Union Properties, no bubble risk

Q. Is there a risk of a bubble in the regional real estate market?

A. There is little risk of a bubble because the growth that we are seeing here in Dubai is long overdue. If you look at all the properties that are being built at the moment, it's very little compared to what we are seeing elsewhere in the world.

If we're taking about maybe 50,000 units under construction at the moment, that's a very small amount, especially when the 50,000 units are the only ones being offered on a long-term or freehold basis. People want to come and invest here; it's a new trend.

Q. What is driving demand right now?

A. Dubai on the whole is a nice city to live in. It's very much a cosmopolitan city. The standard of living is as high as anywhere else in the world.

It's also one of the fastest growing cities in the world. There are a lot of opportunities for young entrepreneurs, young engineers, young professionals to come here and set up businesses and create opportunities.

Q. What about the effect of oil prices on foreign investors and the global economy?

A. Of course, it impacts it. In terms of daily life, gas prices affect individuals. The cycle will continue with the airline industry and the costs. But oil prices have almost an invisible direct effect on real estate at the moment.

If the price stays high, it may have some negative effects on other parts of the world. But because Dubai is a growing city and a lot needs to be done here, the government is taking care of the infrastructure one way or another. For now, we are not seeing any direct effect of the price of oil, whether it goes up or down.

Q. What indicators tell you where the market's heading: demographics, oil prices, rental prices?

A. The fact that there is a continuous demand. Or the fact that all the hotel rooms are fully booked. Or when someone is looking for an office building and we can't find anything for him. Or the fact that we have 100 percent occupancy. That gives me confidence that there is still room, that there's nothing to worry about.

If you put up a hotel now, it will be fully occupied the moment it opens for business. All those factors are promising factors that say we are still short of satisfying the demand of the market.

You open the paper and see that a new property is being launched and then call; it's already sold out. Those are the things I see on a daily basis. I can't see the bubble bursting because we haven't even satisfied the demand of the market.

We're still short of hotel rooms, we're still short of airport terminals. Those are all promising and positive things to see in Dubai.

Q. What happens when there's no more land to build on or to reclaim?

A. I think we'll be asking this question, maybe, in 50 years' time because there's still plenty of land left to develop. Look at Paris or London. There's no more construction but people are still going there.

At some point, it will reach saturation point from a construction point of view - in my opinion, many years from now. Even after we reach that point, we will still see people coming to Dubai, spending time and money, whether for business or leisure.

Maybe construction will slow down at some point, but it doesn't mean everything else will shut down. Now Dubai is a baby and it needs to be looked after, but it will grow and grow and grow.