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ISAM KHATIB SETTING A REAL ESTATE BENCHMARK
Amidthe bottle-neck situation that real estate sector underwent, some examples of steadfastness in the local market are still achieving success and doing well beyond expectations. Among these property landmarks is I.Khatib & Partners, a company that has set a benchmark for developers. With more than 20 years of experience and more than 100 various projects in the kingdom, the company managed to maintain the same tone of excellence and the same rhythm of accomplishments.
Utilizing the reputable knowledge and education that he obtained from the United Stated and the rich experience gained from world-renowned firms in Saudi Arabia, Mr. Isam Khatib seeks to create value from implementing bleeding-edge working methods and unparalleled standards of quality.
Revealing the secrets of success behind I.Khatib & Partners, Mr. Khatib speaks to Ashraf Al-Zubaidi about what’s done and ‘yet-to-be-done’ by the company.
Jordan Property: I.Khatib & Partners is setting a benchmark in the local market. What’s the secret of your success?
Isam Khatib: On top of the success factors is the dedication that I give to my work. This effort is also backed by unparalleled knowledge of our city. I know only too well each and every distinguished area in Amman because I was born and brought up in the city. Another reason for our success is our unique design. A Master of Science degree from the United States in addition to two years intensive work experience with Saudi Arabia’s leading contractor “BINLADIN Organization” gave me the edge over other developers. Thus, we select the best available locations and support it with the most suitable and efficient interior and exterior design to out buildings. Further, the materials that we use in all processes are of the best quality. But our most important element of success is honesty in dealing with our customers.
JP: Do you manage all the processes of planning, financing, construction and marketing under one umbrella?
Khatib: Yes. All these process are managed under the umbrella of I.Khatib & Partners. We do the planning, execution and marketing, and of course, the financing through local banks. When it comes to construction, we do assign local contractors to execute certain phases of the development, yet, on the higher management level, our own staff is in charge. And all the materials that we need to import are brought through local agents.
JP: How far are you going with the market green trend?
Khatib: Since we started the development stage, we have concentrated on proper heat insulation for the exterior walls and the roofs of all our buildings. For that we have used 5cm-thick polystyrene boards with hollow concrete blocks. In addition, all aluminum windows are of double-glazed glass and all window shutters are of thermally-insulated aluminum with externally constructed shutter housing. In addition, we give great attention to thermal insulation and water proofing of building roofs. Ten years back, we started using underfloor heating. Because we know the importance of all these details, we always give them priority, since they help save energy and control the consumption of heating fuel. In certain projects, like the Abdali, we have applied greywater diversion systems. Also in other projects we used solar panels for domestic water heating. These measures help save at least 25% of energy consumption, but they also add 10% to the initial development cost. Realizing the necessity of these measures, we insist on using them without even consulting our customers. I strongly urge the government to adopt compulsory regulations obliging developers to implement energy-saving methods in their developments. Moreover, we are planning to keep in touch with the newly-launched Jordan Green Building Council for consultancy in this regard. It will also give us access to new green building materials as well as other inventions.
JP: Clearly, your projects do not follow the standard property prices set by surveyors. How do you set the prices of your apartments?
Khatib: We are accused by many people that we set higher prices for our apartments and offices. Our customers know that our units are well worth the difference. Since we choose the best locations for our buildings, the most efficient and optimum interior and exterior design and the best construction materials, and we try to provide all convenient and necessary amenities to our developments. Our prices are usually set on the basis of cost. Lately, the price of land has become an essential element in setting the price. Because we choose prime locations for our buildings, this cost usually constitutes 50% of the price of the unit. We cannot adopt the standard prices set by surveyors because they do not take amenities into considerations. We do not price our units based on market prices at all.
JP: Could you brief us on your Abdali project, and what marketing plan you have for it?
Khatib: Within the Abdali project, we are developing a 6,000 sqm office building. I.Khatib & Partners was among the first developers to buy a plot there because we believed in the Abdali development. This development will contribute to a good future for Amman; it will help increase the number of tourists. Out project there is in the final phase, we executed approximately 90% of the building. When it comes to marketing and sales, we have a good sales team, and we use our team to market and sell the properties. We welcome and do deal with most of the real estate agents in Amman. I think that our sales team is enough for the number of projects we currently have, but for bigger developments, we will need to deal with agents.
JP: How is I.Khatib & Partners dealing with the economic recession?
Khatib: The crisis has affected everybody. Our sales have dropped by more than 50% and we suffered from lack of liquidity. To deal with such a crisis, we reduced the number of new projects by the same percentage and concentrated on smaller units – 200 and 100 sqm apartments and offices.
JP: When it comes to location, your projects are centered at prime locations of Amman. Have you ever considered budget projects?
Khatib: We tried once to choose a budget location for a residential building in Sweifiyeh, with the usual quality standards that we adopt. It was a four-story building consisting of eight apartments. Unfortunately, we faced a lot of difficulties with the end-users, because they did not take into consideration the amenities that we included in the development. As a result of this experience, we decided not to repeat the attempt again. So, as long there is demand on what we produce, we will continue with the same level of quality. Nowadays, we are facing a problem in locating good plot of lands for our residential developments. Maybe the time is coming that people start getting used to the idea of living in residential towers. Currently, we are looking for a nice residential plot within the areas planned by Greater Amman Municipality. We are also considering new areas like the Airport Road, which is becoming a hub for educational institutions.
JP: What marketing strategy do you adopt, or is it a strategy that depends on ‘word of mouth’?
Khatib: Yes. It’s a ‘word of mouth’ policy. We have a certain segment of clients, and they come to us specifically to find what they are looking for. We have a very good customer base of people who appreciate what we are offering, and they continue to deal with us for their children and grandchildren. I know that this might be a weak marketing policy, but at least it’s suitable and enough for the size of our investment. I definitely know that a well-planned marketing strategy might double our sales, but for the time being, we are satisfied with the market share that we have. The capacity of our company cannot handle more that 10 projects at a time, especially when we are in the middle of an economic recession.
JP: How do you assess Amman Master Plan?
Khatib: Actually, it’s a very important step that should have been taken long time ago. However, it’s being implemented properly although it faces some problems here and there, bu the development pace is acceptable given the current impact of the economic downturn. Our company has three office developments within the comprehensive development plan, and these are located on Zahran Street, 5th Circle and 6th Circle. These offices will be sold at more affordable prices than others because their new zoning has allowed a higher building area.
JP: Jordanian end users are becoming more sophisticated. Do you see a change in the mood of end users?
Khatib: Definitely! There is a change in the taste of end-users, and their demands are increasing. Some buyers hire engineers when they buy apartments, and they demand more sophisticated control systems and advanced entertainment and luxury devices in their homes. Among buyers, there are locals, expatriates and foreigners. Our customer base consists of 50% locals, 30% expatriates and 20% non-Jordanians.
JP: How do you foresee the market in the coming few years?
Khatib: I am always optimistic. I believe that our country has much potential for a promising prosperous future. We witnessed a great difference under the leadership of His Majesty King Abdullah II. Jordan now has a good infrastructure to attract regional and international investors in all sectors. As for the real estate sector, I’m sure the situation in 2010 and the coming years will witness improvement by at least 20%. Thus, I encourage individuals and corporations to exploit the opportunity of the current prices to buy apartments and offices, because in the near future, prices will not be the same.