17 December 2009
The year 2010 is likely to usher in more stable investors and end-users into the property sector in Dubai, UAE-based developers told Emirates Business.
Taha Mohamed, CEO, Tiger Properties, said: "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 mid- to high-end investors will see large potential in the UAE market and focus their attentions here."
Abid Junaid, Executive Director, ETA Star Properties, said: "We have seen more mature investors with long-term perspective coming into the market in the past year. 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."
Ian Powell, Business Development Manager, Bando, said: "Most people are aware of the opportunities that exist in this region, however, convincing them is currently difficult. We are willing to do what we can to support any directive that is issued. We believe existing and new investments will increase from the end of 2010 onwards."
Mohamed said the coming year holds opportunities in certain areas of real estate, but the sector as a whole will continue to face challenges.
"We see the residential sector stabilising on average, with some geographies contracting and other areas increasing in value. Commercial real estate will face the greatest short-term hurdle, but we envisage tower retail leasing as robust."
Junaid said 2010 will be the year of markets consolidating and bottoming-out.
"We will continue to focus on delivering projects due in the coming year. Simultaneously, our leasing division will try and bridge the gap between the demand for good quality homes and offices and the supply coming into the market from these projects."
Powell hopes the economic framework will improve and usher in more investor confidence in the market.
"The map of Dubai is continually changing, we expect some re-organisation of developments." Developers said they have no plans yet to acquire anymore land in the UAE.
"We have already invested in prime land banks across Dubai. As such we do not foresee any further acquisition in the coming year," said Junaid.
Mohamed of Tiger said: "We always explore opportunities and 2010 will be no different. We consider all emirates in the UAE as good investment, so the decisions we make are based on potential return on investments regardless of the emirate." Powell, however, said: "We have always been looking for land in central locations. We still consider Business Bay as a primary focus and have the ability to undertake the right project."
All developers look positive about investment opportunities across the GCC.
"We have investment opportunities that target institutional investors and these will likely be the focus of our efforts in the immediate future," said Mohamed.
With respect to sales strategies, Mohamed said Tiger Properties will reduce its reliance on retail sales and focus on institutional markets. "We will, however, continue to service the retail business but not with the resources previously allocated."
Junaid said in 2010 the focus for ETA Star will be on deliveries and leasing.
"While units in most of our projects are sold out, the little stocks we have will be sold as and when the project is completed."
Powell said Bando will focus on the completing their project. "We are currently working on show apartments at our site offices so investors and buyers can see and feel the quality of what we promise."
As for revenues and profits, Tiger Properties said: "No business in the real estate sector is focusing on the profit margin at this stage. The priority is to maintain quality standards and completion of commitments."
Junaid said: "As per international financial standards, we recognise profits once a project is delivered. As such we will be recognising projects on the projects delivered in 2009, such as Liberty House, JLT Towers, Al Manara, etc."
Powell said: "We have managed to balance some of our losses from the previous periods as construction prices and staffing cost can now be controlled. Being an international developer, the currency situation is now good for us, any profit will now have the dollar strength as a driving factor."
Tiger recently restructured its property business unit in line with market realities and this included a reduction in marketing expenditure. "We have a strong agent network, many of who were able to weather the crisis thus far, and by working with them we were able to maintain a fluid sales and marketing strategy. Many of the weaker players are now out of the market and those that remain are the ones with solid strategies. In this regard, we are optimistic about 2010."
"Our manpower and marketing is matched to the demands of the market. So far, we managed a lean and mean cost structure, which will allow us to sustain the challenging year ahead," said Mohamed.
Developer also said they have no plans yet to expand to international markets.
"The international market is now opportunistic. We are confident in the UAE's rebound and will focus our energies there. The international field is one that may offer interesting options, but these will be evaluated case by case."
Junaid said ETA Star is already active in India.
"We do not see any other market as promising as India in the Asia region in the short term."
Bando is waiting and watching to see how existing regulation, market conditions and the development field settle over this period. "We have significant operations in our home country, which currently have more potential, but the possibility of a turnaround in the UAE market has not been ruled out."
The year 2010 is likely to usher in more stable investors and end-users into the property sector in Dubai, UAE-based developers told Emirates Business.
Taha Mohamed, CEO, Tiger Properties, said: "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 mid- to high-end investors will see large potential in the UAE market and focus their attentions here."
Abid Junaid, Executive Director, ETA Star Properties, said: "We have seen more mature investors with long-term perspective coming into the market in the past year. 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."
Ian Powell, Business Development Manager, Bando, said: "Most people are aware of the opportunities that exist in this region, however, convincing them is currently difficult. We are willing to do what we can to support any directive that is issued. We believe existing and new investments will increase from the end of 2010 onwards."
Mohamed said the coming year holds opportunities in certain areas of real estate, but the sector as a whole will continue to face challenges.
"We see the residential sector stabilising on average, with some geographies contracting and other areas increasing in value. Commercial real estate will face the greatest short-term hurdle, but we envisage tower retail leasing as robust."
Junaid said 2010 will be the year of markets consolidating and bottoming-out.
"We will continue to focus on delivering projects due in the coming year. Simultaneously, our leasing division will try and bridge the gap between the demand for good quality homes and offices and the supply coming into the market from these projects."
Powell hopes the economic framework will improve and usher in more investor confidence in the market.
"The map of Dubai is continually changing, we expect some re-organisation of developments." Developers said they have no plans yet to acquire anymore land in the UAE.
"We have already invested in prime land banks across Dubai. As such we do not foresee any further acquisition in the coming year," said Junaid.
Mohamed of Tiger said: "We always explore opportunities and 2010 will be no different. We consider all emirates in the UAE as good investment, so the decisions we make are based on potential return on investments regardless of the emirate." Powell, however, said: "We have always been looking for land in central locations. We still consider Business Bay as a primary focus and have the ability to undertake the right project."
All developers look positive about investment opportunities across the GCC.
"We have investment opportunities that target institutional investors and these will likely be the focus of our efforts in the immediate future," said Mohamed.
With respect to sales strategies, Mohamed said Tiger Properties will reduce its reliance on retail sales and focus on institutional markets. "We will, however, continue to service the retail business but not with the resources previously allocated."
Junaid said in 2010 the focus for ETA Star will be on deliveries and leasing.
"While units in most of our projects are sold out, the little stocks we have will be sold as and when the project is completed."
Powell said Bando will focus on the completing their project. "We are currently working on show apartments at our site offices so investors and buyers can see and feel the quality of what we promise."
As for revenues and profits, Tiger Properties said: "No business in the real estate sector is focusing on the profit margin at this stage. The priority is to maintain quality standards and completion of commitments."
Junaid said: "As per international financial standards, we recognise profits once a project is delivered. As such we will be recognising projects on the projects delivered in 2009, such as Liberty House, JLT Towers, Al Manara, etc."
Powell said: "We have managed to balance some of our losses from the previous periods as construction prices and staffing cost can now be controlled. Being an international developer, the currency situation is now good for us, any profit will now have the dollar strength as a driving factor."
Tiger recently restructured its property business unit in line with market realities and this included a reduction in marketing expenditure. "We have a strong agent network, many of who were able to weather the crisis thus far, and by working with them we were able to maintain a fluid sales and marketing strategy. Many of the weaker players are now out of the market and those that remain are the ones with solid strategies. In this regard, we are optimistic about 2010."
"Our manpower and marketing is matched to the demands of the market. So far, we managed a lean and mean cost structure, which will allow us to sustain the challenging year ahead," said Mohamed.
Developer also said they have no plans yet to expand to international markets.
"The international market is now opportunistic. We are confident in the UAE's rebound and will focus our energies there. The international field is one that may offer interesting options, but these will be evaluated case by case."
Junaid said ETA Star is already active in India.
"We do not see any other market as promising as India in the Asia region in the short term."
Bando is waiting and watching to see how existing regulation, market conditions and the development field settle over this period. "We have significant operations in our home country, which currently have more potential, but the possibility of a turnaround in the UAE market has not been ruled out."
By Anjana Kumar
© Emirates Business 24/7 2009
