August 18 2009

UAE-based real estate companies are going for international certifications to establish internal best practices during this lean time but such certifications have not necessarily helped them register sales growth, real estate executives told Emirates Business.

"I am yet to hear of any real estate investor looking to buy property in Dubai based on the fact that the developer has an international certification. Today, for the investor, some key requirements for buying property are a good price, a good developer and a completed project. This is what really matters to an investor today," said Robert Mckinnon, Managing Director, Equity Research, at Al Mal Capital.

"An international certification may allow a developer to move into international markets more easily," he said.

Sana Kapadia, Vice-President, Equity Research, at EFG Hermes, said obtaining an ISO certification is beneficial for a real estate developer, as it enables the developer to establish international best practices in the organisation.

"However, investors today are more concerned with having sufficient cash flow to fund their projects. The certifications are only a measure for operational efficiency," said Kapadia.

Rufi Real Estate, which has an ISO 9001 certification, said there was no major impact on sales for developers having ISO certifications, except that they were able to attract international investors with the help of this international accreditation.

"The ISO accreditation helps us attract international investors as it is internationally recognised," said Mehrooz Manzoor Rufi, Director, Rufi Real Estate.

"Local investors are not concerned about an ISO certification. They are more concerned about developers abiding by rules and regulations set out by the Real Estate Regulatory Agency (Rera). We have taken an ISO certification only for our international investors, since they tend to show more faith in international certifications," he said.

Dr Rula Sadik, Nakheel's Director Design & Planning and SSHE, said: "It's challenging times like now that companies should seek a competitive advantage to help them thrive and grow. ISO certification is one such advantage."

The Dubai-based master develper's iconic projects such as The Palms have ISO certification for a variety of its business units, these include Occupational Health & Safety System OHSAS 18001, Quality System ISO 9001, and Environmental Management System ISO 14001

"Working in compliance with ISO certification can help companies raise the bar in the region in the areas of health and safety, environmental management and quality excellence. This in turn will contribute towards increasing consumer confidence and help build sustainable business practices," said Sadik.

Abid Junaid, Executive Director, ETA Star Properties, which recently received the ISO 9001:2008 certification, said there is a surveillance audit conducted by the ISO body every six months where they check the record-keeping of the companies registered under the ISO certification.

"What they are really concerned about is the fact that standards set by individual companies are met. The ISO body does not set any standards for real estate companies. They only ensure that the standards that individual companies set for themselves are met."

Junaid said developers require negligible investments in order to obtain an ISO certification. "The certification only ensures that quality standards prevail," he said.

In 2006, ETA Star Properties was among the first developers in the UAE to receive the ISO certification. When the ISO body issued a revision of the standard in 2008, ETA Star adjusted its quality management systems to the new requirements, underwent a fresh certification process, and is now among the first few organisations in the UAE to achieve the standards.

Meanwhile, Limitless, the arm of Dubai World, said it was working towards an ISO 9001 certification for quality management and an ISO 14001 for environmental management.

Khuyool Investments, another UAE-based developer, is also hoping to get an ISO certification by 2010. "Currently we are working on the procedural aspects for obtaining it," said Kussay Al Sheikh, CEO-Partner, Khuyool Investments.

Traditionally, manufacturing and – in recent times – service industries have achieved remarkable benefits in business processes and performance by adopting a well-defined quality management system.

Similar benefits can be achieved by construction and real estate companies if they implement an ISO 9001:2000 quality management system, said many top executives in the sector.

According to international standards, the ISO 9001:2000 Quality Management System is said to be one of the best tools to increase productivity, streamline operations, increase customer satisfaction and improve profit margins through superior quality of product, process and service.

Source: Emirates Business 24/7