UAE real estate is on road to recovery |
Khaleej Times - 28 August, 2012
The real estate market’s recovery is on track and the banks should come forward to ensure adequate liquidity for investors and developers to support the growth in the property sector of the emirate, a senior official of Damac Properties said.
The Middle East’s largest private luxury developer has seen encouraging growth in the real estate market during first half of 2012, outperforming a recent report which suggests Dubai’s prime property has experienced nearly six per cent growth in the past six months.
“We are certainly seeing positive signs that Dubai’s property market is recovering. While we retain a cautious optimism, we believe that the improvement in valuations will continue to increase well into 2013,” Niall McLoughlin, senior vice-president, Damac Properties, told Khaleej Times during an interview.
Referring to the latest report from Knight Frank, he said that Dubai’s market is continuing to see an upturn in real estate valuations in the luxury sector. That is also reflected in the Damac Properties portfolio with serviced apartments proving a very successful sector for the company this year, he said.
“Confidence is coming back to the Dubai market and investors are looking to capitalise on some great offers. We are set to see an increase in valuations throughout the rest of the year and into 2013,” he added.
The Dubai Land Department recently announced the highest number of unit sales and unit value recorded during any July on record, reaching more than Dh2 billion. The Real Estate Appraisal Centre at the Dubai Land Department successfully valuated 1,090 properties worth Dh42 billion at the request of property owners in the first half of 2012. “I think that many areas have already recovered. Prices stabilised last year and have continued to grow at a steady pace in 2012. Prime real estate areas such as Dubai Marina, Sheikh Zayed Road and the Burj area are performing strongly as the infrastructure is in place and demand is high,” McLoughlin said.
Referring to the latest report by Asteco, he said that average apartment sale prices in Dubai Marina, Sheikh Zayed Road and the Burj area are increased between eight and nine per cent from quarter one to quarter two this year. Projects on the Emirates Road will pick up as the infrastructure there is completed.
“The Dubai property market is maturing in many areas and we certainly welcome the developments that the Government of Dubai, through Rera, is making. They are helping to open the market up to more people, provide guidance and a framework to develop trust and reassurance for investors coming into the market for the first time. These moves will help to reinvigorate the market.
“What is needed now is for the banks to bring liquidity back for investors and developers. The market is performing well and now is the time for the banks to support that growth,” he explained.
Luxury remains a key area
McLoughlin said the luxury market in Dubai will always remain a key area for investors. He said there is a strong demand for serviced apartments, especially from investors from Saudi Arabia, Russia and India.
“The most desirable, well finished and maintained properties in key locations demand a premium. We are, however, seeing that investors are increasingly discerning in their tastes. They recognise that the very high-end properties should offer the most exclusive customer service with stunning finishes,” he said.
“There are many outstanding investment opportunities at the moment, especially in the luxury sector. The savviest buyers are coming back into the market in a big way as they can now realise an investment in the most prime areas and properties, which had been previously out of the price range,” he added.
Looking for opportunities
McLoughlin said Damac Properties looks at opportunities to expand the brand into new markets.
“Yes, we are always looking for opportunities to take the Damac Properties brand to new markets and expand our operations. We aim to be the largest developer of luxury properties worldwide, but it is important to conduct due diligence. We will only step into new territories where we feel we can bring value. The economic factors must also be conducive.”
Damac Properties was established in 2002, as a private residential, leisure and commercial developer in Dubai and the Middle East. Since then, it has expanded rapidly into North Africa, Jordan, Lebanon, Qatar and Saudi Arabia. The developer has 36 completed buildings with 7,374 units across the region.
“Currently, we are present in Jeddah, Amman, Beirut, Cairo and Lusail City in Doha, the main city for the 2022 World Cup. The company will continue to step into new markets worldwide provided it can bring added value and the economic conditions are right,” he said.
With reference to the UAE, McLoughlin said Damac will be completing a number of exciting projects in the next 12 months, including the hugely anticipated Burjside Boulevard, Damac’s first luxury serviced apartments, managed to five-star hotel standards by Damac Suites and Spa.
“We completed 21 buildings in 2011 as construction work continued at a good pace. We are currently working on 50 projects and our plan for the rest of this year and into 2013 is to deliver on those projects we are currently at 70 per cent completion,” he said.
“Damac has 50 buildings at various stages of progress across the Middle East and North Africa region. These consist of 9,849 units, spanning 16,886,151.00 square feet,” he concluded.