Developers in Dubai are hoping that 2010 will be a better year for the real estate market despite worrying headlines about Dubai World and its debt.
Although subsidiary master developer Nakheel has had to use a bailout from the Abu Dhabi government to pay a bond due earlier this week, the industry points out that most of the industry is unaffected and they hope that investors will return in coming months.
‘More serious investors will definitely be entering the property market in Dubai. The previous years attracted many speculators, which contributed to inflating the market. With the retraction that occurred over the past year, we believe middle to high end investors will see large potential in the UAE market and focus their attentions here,’ said Taha Mohamed, chief executive of Tiger Properties.
He added though that 2010 will be a challenging year for the industry. ‘We see the residential sector stabilising with some areas contracting and others increasing in value. Commercial real estate will face the greatest short term hurdle, but we envisage tower retail leasing as robust,’ he explained.
Abid Junaid, executive director of ETA Star Properties said more mature investors with long term outlooks are what the emirate needs. ‘Investors who seek true value in real estate and who are serious and committed to doing business in Dubai for the long-term will enter Dubai,’ he predicted.
Most people are aware of the opportunities that exist in this region, however, convincing them to invest is currently difficult, according to Ian Powell, Business Development Manager at Bando.
‘We believe existing and new investments will increase from the end of 2010 onwards. Dubai is continually changing,’ he said.
Meanwhile a report from Deutsche Bank says that Dubai based Emaar Properties is in a stronger position than it seems due to the cancellation of its plans to merge with three other real estate companies.
The developer, which is building the world’s tallest tower, will no longer merge with Dubai Properties, Sama Dubai and Tatweer, the property units of Dubai Holding. ‘Now that the potential merger with Dubai Holding entities is off the table we believe investors can take a fresh look and rediscover Emaar’s appealing equity story,’ Deutsche Bank analysts said.