Dubai's total residential stock to reach 320,000 by the end of 2011

A report issued by Al Mazaya Holding's Studies Unit presented some signs of maturity in dealing with the Dubai real estate market, in particular, and with the other emirates, in general. This comes as developers have revised their plans in accordance with the current changes and developments in the regional property market, seeking to benefit from the potential of the coming years to generate gradual growth in investments, trading and prices.

According to the report, despite the expectations of growth in the construction and real estate sectors, growth should be driven by general economic growth. The UAE Contractors' Association expects a 4% growth rate by 2011 in keeping with the general economic growth as the signs of recovery in the UAE have been evident since the beginning of this year.

The supply of more property units in the UAE market, specifically in the Dubai market, is expected to add new high quality units to the property market, which is set to help reduce rental rates during the second half of 2010, according to a Jones Lang Lassalle report, which also expects Dubai's real estate market to deliver a total of 26,000 residential units in 2010 and 25,000 in 2011, bringing the total residential stock to 320,000 units by the end of 2011.

Said Eng. Naif Ahmed Al Awadi, CEO of Mazaya Holding's Dubai Operations: "Over the last couple of years, Dubai established an excellent reputation across all domains and was able to develop its real estate and economic infrastructure, increase growth rates and gain investors' confidence. Dubai managed to uphold this reputation during the global financial crisis with the completion of a number of mega infrastructure, telecommunication and transport projects, the inauguration of Burj Khalifa, as well as by achieving growth in a number of important sectors.

"As for Al Mazaya, despite the impact of the global economic crisis, Dubai will remain the centre of our attention and we are waiting for the right time to seize the potential opportunities and to reinvest in this market. Al Mazaya has set a comprehensive restructuring plan to address the current situation via various tools such as focusing on specific real estate sectors, completing specified projects, generating operational revenues, redirecting some investments, and reviewing the volume and type of projects inside Dubai's market and abroad," he added.

Al Awadi said that Al Mazaya's Dubai Operations Unit is currently focusing on the completion of previously announced projects, the restructuring of some payments, and negotiating with government parties and fund providers to reach the appropriate solutions for buyers, investors and the company's projects in Dubai, as well as acquiring the defaulted properties to facilitate payments for buyers.

Al Awadi underlined the important role played by the Dubai Real Estate Regulatory Agency (RERA) in putting strict laws and regulations in place to govern the relations between developer, investor and buyer, protecting the rights of each party, and helping them find solutions without any negative impact on the developer's interests and projects.

Al Awadi spoke about Al Mazaya's intention to continue its work and to deliver its projects in Dubai, as well as to solve some of the challenges that emerged at some of its projects. He said: "Al Mazaya will continue its delivery of villas in The Villa residential project in Dubai Land. The company has delivered 65 of the first phase's 104 villas to buyers thus far. The company is currently on track to deliver the remaining phase one villas and is expected to complete delivery within a month, while the 110 villas that forms part of the second phase is scheduled for completion from September to November 2010. The third phase, consisting of 306 villas, is scheduled for completion between September 2010 and January 2011, bringing the total number of villas to 520."

He said that the delay caused with The Villa residential project was due to the relocation of the project to a new site, which required formalities and paperwork, mobilization and grading works.

Al Awadi also said that work on Business Avenue has reached the final stages, and that construction on Queue Point is progressing well. He added that the revenues from the project's transactions have been deposited into an escrow account. He expects a large amount of liquidity to be injected into the company from buyers of both Business Avenue and The Villa, and that these amounts will be adequate to fund the project. He assured all that the company will generate surplus liquidity when buyers' default is addressed by the end of this year.