Dec 23 2010 |
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Repossessed units: Sell them or rent them?
By Parag DeulgaonkarDevelopers uncertain, but expert says leasing a more fruitful strategy
When contacted by Emirates 24|7, a number of developers admitted they had repossessed properties, but were uncertain on whether to sell them through an auction at a lower price or just put them up for lease till the market recovers.
Emirates 24|7 reported in November that Tameer Holding had completed repossession of 200 units by October-end and plans to take back another 600 units for which termination process has begun.
A top official of another large private real estate development company, on conditions of anonymity, said they also had not decided on their plan for repossessed properties.
However, Matthew Green, Head of Research & Consultancy UAE, CB Richard Ellis Ltd Middle East, says the current market conditions do not favour a developer sell his repossessed units, rather leasing it would be a more fruitful policy.
"For developers with repossessed units the ideal situation would obviously be to sell unwanted assets and reduce their liability to any further declines in property values. However, realistically current conditions are just not conducive to this approach and building a steady income stream through leasing is likely to be a more fruitful strategy in the short to medium term," he adds.
© Emirates 24|7 2010
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