Global Outlines, Sustainable Business
 
Architecture is not merely the act of erecting walls and roofs; it reflects mentality and cultural nuances in every inch. In some countries, corridors vanish, giving way to spacious kitchens by the entrance; in others, windows open a world beyond the home. Yet, when a developer thinks globally, their projects fill in the missing pieces with precise details, achieving harmony and success, as if following invisible yet robust outlines connecting all parts of the world. Nikolay Panferov, co-owner of Palladium Prime Real Estate, has the ability to perceive the outlines of the future, drawing upon the wisdom of the past and a focus on the days to come.
 
My journey began with a profound interest in architecture and urban planning. I have always aspired to create not just buildings, but comfortable and functional spaces for living and working. This interest led me into the development business, where I could bring my ideas and principles to life. Every decision is grounded in a commitment to quality and convenience for our clients, which has become the DNA of our brand.
 
As for my education — I studied international business and have a PHD in economics. My lifelong interactions with people from different countries and cultures, partly due to my education, have fostered a global mindset. I chose my speciality consciously and have been working in it ever since. I entered this business because real estate in Dubai is currently at the height of its popularity. My experience in organising and managing various businesses allowed me to approach this endeavour with confidence and streamline processes.
 
Having lived in Dubai for several years now, I can attest that doing business here is indeed much easier compared to in Europe. The tax burden is minimal: corporate tax was introduced recently and is easily administered, while VAT stands at just 5%, significantly lower than in Russia or some European countries. When we established our real estate brokerage firm, we were pleasantly surprised: local authorities did not come with inspections, but rather with questions about how they could assist us in adapting and growing our business.
 
Of course, there are challenges as well. For instance, opening bank accounts can be a lengthy process, especially if you do not possess a "low risk" passport. However, once an account is opened, banks do not ask unnecessary questions, which is a major advantage. Money transfers are conducted smoothly without currency control, making Dubai's economy one of the freest in the world. But of course, in certain businesses like real estate development it is almost impossible to work efficiently without local partners, who know UAE market and have good experience in dealing with local rules and authorities. So when we decided to go into this business, we agreed with our current local partner to purchase a major share in his company, and continue to develop this business together under our group's brand.
 
Today, I represent the development company Palladium Prime Real Estate. We are part of Palladium Group, first started as a banking group is Europe, after we decided to start business in Dubai by opening corporate services company and real estate brokerage company, and development company after we agreed to work with our local partner and purchased part in his company, we already have three projects underway: one is under construction, two are being designed, and two plots of land are in the process of being acquired. I am a co-founder of Palladium Prime Real Estate Development. We work alongside Evgeny Kogan, a partner at Palladium. He is an investment banker with 30 years of experience on international stock markets and a track record of effectively managing assets worth over a billion dollars.
 
We have a local partner whose grandfather was the first master developer in Dubai, responsible for constructing the Al Rashidiya district, predominantly inhabited by locals. Our partner hails from a family renowned in this sector. Local partners play a crucial role in expediting the licensing process and adapting to local conditions. Thanks to our partner, we renewed our developer’s licence under new group name much faster than usual, enabling us to commence operations promptly and focus on project development.
 
Accompanying him to numerous meetings, I realised that familial connections are highly valued here. Without local partners of such calibre, entering this business is inadvisable due to numerous hidden challenges known only to locals. Many Russian developers have attempted to penetrate this market, but often struggled due to the specificities of legislation and permitting documentation. Here, everything is much simpler and more logical: land is purchased with building permits, including specified area and height restrictions. In Russia, one buys land first and then seeks governmental permissions.
 
We did not immediately venture into development. Initially, we provided real estate brokerage services and corporate solutions. The Palladium group of companies encompasses various businesses. Having established a successful brokerage business, we decided to progress further by selling properties we develop ourselves rather than those built by others. Hence, we are now engaged in development.
 
Currently, the group employs around 60-70 individuals, including brokers and corporate service staff. Our team prioritises the end buyer’s interests above all else. The company’s concept revolves around constructing high-quality boutique projects of 8-12 storeys. We believe such developments appeal to end buyers as they are completed more swiftly — within a year or two, rather than 3-5 years. This ensures rapid capital turnover for our investors and buyers. We select areas with well-developed infrastructure: restaurants, schools, gardens, parks. Such properties sell better and offer more comfortable living or rental opportunities.
 
Our first project is situated in Jumeirah Garden City, opposite the Museum of the Future. The metro is just 200 metres away, and downtown Dubai can be reached in 5-10 minutes by car. The second project is located in Al Jaddaf Waterfront, often referred to as the "Venice of Dubai" due to its beautiful canals and promenades. The area features Palazzo Versace and other premium properties. We were immediately impressed by the developed infrastructure, children's playgrounds, and walking areas along the water. Downtown is accessible within 5-7 minutes via a wide road from the airport. Festival City Mall is in close proximity, enhancing the location's appeal. We are also constructing a building near the new DEWA office — a high-tech facility with minimal energy consumption. We believe this area is currently undervalued but expect significant price appreciation by the time construction is completed.
 
The third project is in the design phase and located at the entrance to Palm Jumeirah. This area is a hub for high-tech and IT company offices, yet residential properties are scarce. We are confident demand will be high as many will wish to live near their workplace and enjoy strolls through parks or squares.
 
The target audience for Palladium Prime Real Estate Development is quite diverse. We sold our first project within a month, with buyers hailing from all over the world. Approximately 70-80% of our clients purchase property with business intentions, focusing on rental opportunities and the potential of the area. We strive to ensure they receive a good rental income. When pricing apartments, we consider potential rental income, especially for smaller properties.
 
Globally, our target audience is the middle class. In Russia, this tends to be wealthier individuals, whereas in the Emirates, they are less affluent. We aim to cater to a broad spectrum of buyers by offering high-quality properties at a 4+ level — not super-premium, but with a high standard of finish and comfort. Our first building will feature hotel-like services. We are creating apartments with the option of additional services, such as laundry and cleaning, provided by the management company for an additional fee. There will be an option to rent out the apartments on a daily basis through a dedicated app. This is a unique service that no one else currently offers. Owners will be able to store their belongings in a separate room and notify the company via the app when the apartment is ready for rental. The management company will handle rentals through various platforms.
 
We anticipate a long-term yield for our clients of around 7.5-8%. For short-term rentals, income could reach 12-14%. Of course, short-term rentals require more intensive maintenance and lead to accelerated depreciation of the property, but the management company takes care of all concerns, making the process as transparent and convenient as possible for owners.
 
The management company charges a commission for its services, but even with this factored in, the returns remain high. Typically, people hire real estate agents to manage properties, but here everything will be transparent and convenient through the app. This significantly simplifies the process and eliminates risks associated with unscrupulous brokers.
 
One of the interesting aspects of Palladium Prime Real Estate Development is its transparency in working with investors. Unlike other companies that offer fixed returns or purchase land themselves, we operate under a different model. The investor buys the land in their own name, and we act as the developer, ensuring full transparency of the process. This allows the investor to earn up to 60% from the project, which is a very attractive proposition in the market.
 
In our field in Dubai, it was quite a revelation to realise that the real estate market here is rather conservative. Major developers continue to offer standard apartments, much like they did twenty years ago. Flexible products are rare, creating an opportunity for smaller companies. There are no stringent barriers here as there are in Russia, where the market is divided among major players and legislation imposes strict requirements. In Dubai, a free economy allows one to start a business in development.
 
Many expatriates residing in Dubai often observe that apartments lack space for shoes and corridors. In our studios, the kitchen is not situated in the corridor, as is frequently the case here. We offer a full kitchen with integrated appliances and sliding doors to prevent odours from permeating the apartment. Space for shoes is thoughtfully provided in the corridor. We learn from the mistakes of our competitors to offer a high-quality product. In our initial project, we utilise marble and achieve a finish on par with Dubai's top developments.
 
Of course, there is always room for improvement. We could have done many things differently, but it is important to take pleasure in what has already been accomplished. For our Palladium Group, our development branch has only been in business for two years, and we already have three projects with a portfolio approaching $200 million. This is a commendable achievement. Initially, it was challenging: without completed projects under our brand, convincing investors is difficult. We showcased projects by our local partner, who completed a lot of projects in the UAE before the pandemic. This helped us gain trust and begin our development journey.
 
For us, success is measured by the satisfaction of shareholders, investors, and employees. It is crucial to foster the right atmosphere within the team so that people remain loyal to the company and work towards a common good. Our team is international: I am the sole Russian among the management, while others hail from various countries. Working amidst such cultural diversity is truly fascinating.
 
For me, inspiration stems from both success at work and leisure. Travel always inspires me. Stability is also important: some people are drawn to constant change, but I am more comfortable in a stable environment. Previously, I took partengaged in show jumping and paintball, which also provided much experience and inspiration.
 
I draw strength from achievements I am proud of, such as independently attracting an investor for our first project in the Emirates. This is indeed a significant victory at present.
 
Life has presented various situations. The past few years have not been easy in world history. Several times, very close individuals betrayed me, which was shocking. Yet, at the same time, other close ones always supported me. This taught me to value people and help them. Perhaps the best advice I received was: "Never say never."
 
We do not rule out constructing a landmark building closer to the centre of Dubai that will strengthen our brand and become its symbol. We even have a concept, but I will refrain from revealing details for now. We are already collaborating with renowned architects. Our design partner hails from Zaha Hadid's team. They assisted in developing Zaha's projects in Dubai. Although their concepts are costlier to produce, we aspire to reach this level.
 
We plan to expand our project portfolio and continue offering high-quality properties with a high level of comfort. It is important not to rest on our laurels and constantly strive for new heights. We are confident that our business approach and attention to detail will help us achieve even greater success in the future. So, I can candidly say that my current state of mind is most optimistic.