The real estate boom that has fuelled the prodigious growth of Dubai and fast-tracked many to a better life in the sun has been hit by a series of steep hikes in the cost of core building materials. Add to that continuing housing supply shortages and all of a sudden (if HC Securities Brokerage is to be believed) you have a city whose property market is rapidly approaching the price levels of London’s West End.
With its large-scale real estate projects, Dubai has become more than just a playground for discerning holidaymakers and professional expats. But with increasing costs and supply fears, developers are fearing huge financial implications for the construction industry which, according to Abdulrahman Al Tassan, CEO of Rakaa Property, may lead to a crunch that could add to inflationary pressures, create an economic slowdown and cause a subsequent investment collapse.
But cynics predicting the imminent demise of the emirate’s property boom have so far been wide of the mark, says Blair Hagkull, managing director of Jones Lang LaSalle MENA, who is confident fresh supply will come to the market this year. But, he says, problems persist in the short term.
As demand outpaces supply, Hagkull says the region will be faced with a ‘flight to quality’, where property-seekers take what they can get from a market fast running out of prime real estate in the most desirable locations. Tassan believes that the pace of development in Dubai has become its own worst enemy, as the availability of both building materials and manpower has been overtaken by the sheer speed of development.
Record oil prices, surging inflation and droves of expats combined to produce a 19 per cent rise in property prices last year - a figure well above market expectations.
Tassan cited local statistics, which found the total value of land transactions in Dubai to have risen 70 per cent in 2006, compared to the previous year. This surge in investment has created distinct areas within Dubai and established patches with unique characteristics and serving specific purposes.
“Dubai’s real estate market is not the homogeneous market that it was five years ago,” contends Hagkull. “We very clearly see a differentiation between the older historic areas of Bur Dubai and Deira and the central business district in the World Trade Centre area. Then there’s what is referred to as ‘new Dubai’, which takes in Internet City and the Marina.”
While banking giant HSBC has said it doesn’t expect supply to catch up with demand until 2015, Hagkull says that the 300 per cent rise in property prices seen in the last five years is a phenomenon that’s not likely to be repeated. “We’re seeing a broader trend to a more maturing of the market. Once you’re at a world level, it’s unlikely you’re going to reach twice that level any time soon.”
A formidable force weighing on the tireless expansion of Dubai is the new laws governing the financing of developments, while others predict that the breakneck pace of construction will eventually tip the market into a state of oversupply. Then there is the question of what will happen years down the line when developers have to pay back the loans which, in the wake of the global credit crunch, have been more readily available as borrowing is cheaper.
But Hagkull says much of the answer for the long term lies right here in Dubai, in the form of pent-up demand. “Right now, Dubai is about 25 per cent under-served. It’s only natural that if you have limited space, you put more people in that space. In the long run that has an impact on employee satisfaction in the workplace. So we anticipate a reallocation of space, as people move out of less-than-optimum locations. This will accommodate a significant amount of demand,” he said, adding that it would create a cascading effect, where people leave less optimum, smaller, older and more distant locations and move into the central areas.
Whatever the doom-mongerers say, the overwhelming international interest seen at the International Property Show over the past three days suggests Dubai’s surging real estate market is here to stay and has served as the opening salvo to what is shaping up to be another lucrative year for the emirate’s property sector which, according to research reports, is responsible for up to 50 per cent of all property-related activities in the Gulf.
Article source: www.7days.ae/business
Tuesday, February 19, 2008
Raising the roof
Monday, February 11, 2008
Dubai Investment Park
Dubai Investment Park (DIP) is a recent, Environment friendly zone located in UAE. Dubai Investment Park delivers all requests for business, residential, recreational development. It covers 3200 hectares area and located approximately nine kilometers Ireland from the Arabian Gulf. It is approximately 3.5 kilometers in width and 9.7 kilometers in length.
The Dubai Investment Park has extremely competitive real estate market in UAE. The Park has a high profile and environment-friendly technology development, which is designed to be a self contained city with diverse land usage and special features. Dubai Investment Park is a moderate business zone spreading in large area of 32 million square meters offering investors a range of quality services. DIP has a wide variety of aim such as manufacturing, office, housing, research, distribution, logistics and academic function.
Dubai Investment Park aim to offer viable prices for entirely developed plots along with No hidden charges. The park has various sized plots for a variety of uses which are vacant for long term use. The park has quality controls to maintain development, water supply network, waste water collection network, treatment and recycling facility.
The Dubai Investment Park representing all features such as pre-built units available for lease along with gate access on site security and full complement of infrastructure. The park has direct access to major UAE freeways to Jebel Ali Port and the proposed second Dubai Airport. Park design control is to maintain the quality of development of the park as well as possible equity participation by Dubai Investment.
The park has world-best Infrastructure includes Domestic water system to supply 19 million gallons per day. Irrigation water system to supply 6 million gallons per day.
Industrial process water system to provide 2 million gallons per day, On-site sewage treatment plant, Private power plant to supply 600mVA, potential daily gas demand of 2.5 million m3 per day, 50,000 telephone lines.
Click on the image to enlargeContent Source: JCA Consulting
