Manazel turns to building schools to increase revenue
The Abu Dhabi property developer will build four facilities across Al Reef and Ghantoot
Manazel Real Estate, the Abu Dhabi property developer, said on Wednesday it would add four schools to its residential developments in the emirate as it seeks to create new revenue streams from health care and education.
The Abu Dhabi listed company said it expects to attract a “number of experienced international education institutions to its planned new facilities”.
Mohamed Al Qubaisi, the Manazel chairman, said that the firm’s expansion strategy is dependent upon diversifying into new and growth sectors such as education and health care. “This in turn will deliver significant revenue growth and shareholder returns over the longer term,” he said.
Three schools will be built in the Al Reef development near the Abu Dhabi airport to accommodate 4,000 students ranging from kindergarten to primary levels. The fourth facility, taking 1,200 students from early level to kindergarten, will be built within the Ghantoot Hotel and Resort.
The developer did not disclose when the construction was set to be complete or the amount of investment.
Manazel is not the only property developer expanding into the education sector.
Aldar Academies, a unit of Abu Dhabi developer Aldar Properties, has invested Dh1 billion since 2007 on education and currently operates seven academies in the capital, in addition to an agreement to manage four schools for Abu Dhabi National Oil Company.
At a time when oil prices have remained depressed for more than three years, property developers have been boosting efforts to diversify their assets across sectors.
Strategy&, a PwC company, released a report in August that placed the education sector as the second most attractive market in the GCC.
The company said: “The demand for private education is strong as it is driven by
an expansion in the student population, discretionary income growth, a consumer preference for private education, and governmental privatisation initiatives.”
Manazel’s move into education would fall under real estate sale-leasebacks, which is on the lower end of the risk/return spectrum, according to Strategy&. Currently, the UAE K-12 education system is dominated by the private sector which is expected to grow with the rise in population. The population in the region will hit 65 million by 2030, a third of whom will be under the age of 25.
In Abu Dhabi, more than 60 per cent of the total students in 2014-15 attended private institutions, registering a compound annual growth rate of 6.2 per cent since 2010, according to a report from Alpen Capital.
A number of villa schools were closed during the five years to 2015 as a result of new regulations, which led to more institutions being created to accommodate the villa students and new enrolments. Alpen Capital said that Abu Dhabi invested Dh2.3bn to open 43 new schools from 2011 to 2015.
Updated: October 25, 2017 07:20 PM