Speaking at the Dubai International Financial Centre (DIFC) annual gathering of business and financial leaders, Emaar Chairman and Chairman of Dubai's Advisory Council, Mohammed Alabbar, told delegates that the government would work with the emirate's three largest property developers to 'manage' the upcoming supply of real estate projects.
Monitoring supply availability
'Today, Dubai's three largest developers control about 70% of the supply onto the market,' Alabbar said. 'The Council, acting in cooperation with them as well as with other private developers, is managing the current and future supply of new projects onto the market. Let me assure you that we have our finger firmly on the pulse of the real estate sector.'
'The real estate sector is witnessing a healthy correction. This is a consequence of global financial conditions – and is inherent to the very nature of the market,' Alabbar continued.
'As we all know, real estate is cyclical. Monitoring supply and sales, the Advisory Council is managing this important sector of our economy, ensuring that new supply is properly managed and that current and future demand is adequately met.'
Alabbar also indicated to delegates that the government would look to 'step in' to help affiliate real estate companies if the need arose.
Emaar merger 'welcome'
Alabbar added that he would 'welcome' a merger with Nakheel, a move which analysts say would create one of the biggest property development companies in the world.
In reference to some of the city's smaller real estate companies, which might expect to see an amount of consolidation following difficulties in raising finance, Alabbar added that: 'Nakheel and Emaar are two separate entities, but we welcome collaboration. If there is a chance I welcome it.'
The government subsequently moved swiftly to deny ensuing rumours that the emirate's top two developers would join forces. 'In response to media reports, a spokesperson for the Advisory Council of the government of Dubai clarified that Emaar Properties and Nakheel are not considering any merger plans,' a statement said.
Real estate slowdown
Nearly all of Dubai's property developers have had to re-examine ongoing and future developments in light of the current freeze on project liquidity.
Emaar has also launched a range of incentives aimed at fuelling interest in the city's property market. As well as allowing buyers to sell units before having paid 30% of the property's value, the company has launched a rent-to-own scheme whereby customers can rent for a year and, if they decide to purchase the unit, put the first year's rental expenditure down as part of the down payment.
Nakheel, Emaar, Dubai Properties and Damac – which has an estimated $30bn worth of projects planned in the MENA region – have all retrenched future plans and rescheduled project roll out dates, as well as downsizing their workforce. See also:Dubai developers feel the effects of price uncertaintyDubai's off plan projects 'on hold' through lack of financingNakheel denies Palm Deira stoppage rumours