Developers get back into sales mode

Even specialist funds could become active in a more regulated market

Dubai: With the demand-supply gap deemed manageable, developers are firming up their plans to keep the property pipeline in constant motion over the mid-term.

Sheffield Holdings plans to release units at its Dh1.2 billion mixed-use Marina 101 high-rise in Dubai Marina at Cityscape next month. (A hotel operator has been named for the hospitality component, which makes up 35 per cent of the overall.)

“Clearly it will be a case of trying to encash on the market sentiments which are uniformly favourable at this moment,” said Abu Ali Malek Shroff, CEO at the developer. “There are units which we have not sold at the project and some of the existing owners might try to take advantage of the premiums available. It is a case of both developers and investors trying to make full use of the circumstances.”

According to him, the downturn of 2009 cannot all be coloured in black where local real estate is concerned. Marina 101 was one among the many projects announced during the peak years between 2005 to 2008, But unlike many, this one did then go on past the finish line.

 “For the developer with projects on the ground there were savings to be made during the recession by renegotiating contractual terms with contractors and suppliers,” said Shroff. “These saving helped mitigate some of the cost overruns brought on by project delays.”

Going forward, expect specialist funds to get active in the marketplace if the upward trajectory is maintained and yields are conducive. This will be the cue for real estate investment trusts to step forward.

“Reits have gained momentum since the crash; there was only 1 GCC Reit in operation and now we have at least three that I can think of,” said Robin Teh of Chesterton International. “Reits give common folks a chance to invest in and own buildings and is a good way to increase market transparency and competition.

“The market I believe can now take Reits especially if there is a specific law that is passed to regulate this.”

Source: gulfnews

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