Muted Cityscape ends with industry looking beyond the downturn
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Muted Cityscape ends with industry looking beyond the downturn

Muted Cityscape ends with industry looking beyond the downturn

The Cityscape Dubai 2009 exhibition closed with no major surprises or announcements from exhibitors and muted attendance figures, reflecting the state of the market following the sharp corrections of the past 12 months.

    Floor space was much reduced from previous years. Although the majority of the UAE's larger developers had a presence, no new projects were unveiled.

    Indeed, Dubai's two biggest real estate groups, Emaar and Nakheel had initially announced that they would be absent from the show, before performing u-turns in the days before, saying that following 'discussions with the organisers' they would be hosting stands.

    Far from the lavish scenes of 2008, which featured gargantuan models and hi-tech imaging displays, cost-cutting was evident in the stands, with exhibitors mostly showcasing scale models of projects under construction or ready for delivery.

    According to the organisers, visitor numbers were down by 50% on 2008. Over the four days of the show approximately 38,000 people passed through.

    Some exhibitors noted that the lack of crowds was actually a positive development, as 'tourist' visitors were replaced by individuals and groups interested in specific projects and investments, reflecting a more mature expectation of the show.

    'We've had enquiries, taken names and will get back to them with pricing,' Waha Land COO Hazem Nowais told 'The show is living up to the true essence of Cityscape...not flipping properties in the carpark.'

    Aside from the main stands, Cityscape 2009 featured a number of conference streams on the sidelines of the event, targeting most aspects of the region's property market. The differing views of sector analysts which came out during these sessions show that the future for the market remains unclear.

    Conflicting opinions

    A panel of experts at one of the Cityscape conference streams told delegates that Dubai's market was showing signs of nearing the bottom, but opinions varied on what shape the recovery would take – and what effect new units, estimated at close to 66,000 over the next three years, coming online would have on prices, which Asteco's Elaine Jones estimated stood at 2006 levels for leases.

    ' There is no point in hiding the fact that there is excess capacity,' said Dr Hani Shammah, CEO of Abu Dhabi-based Bloom Properties. 'The question is how will Dubai create demand drivers to absorb that capacity? Now it's about diversifying the economy, which they have been successful at.'

    Deyaar CEO Markus Giebel and Landmark Properties CFO Charles Neil agreed that the market had likely seen the end of steep prices falls, and that villa prices were beginning to increase, but warned that it would be difficult to chart a recovery. ' very fragmented market which has no clear picture and no clear direction,' said Neil.

    False recovery

    JP Grobbelaar, Director, Colliers International, was more pessimistic: 'We are going to see a false recovery. People are talking the market up and are very keen to see the market recover and will grab at whatever they can identify as green shoots to support their theory,' he said.

    'However, I believe we are looking at further declines in rentals and property prices in the residential and office sectors. The road to recovery has got to be seen as something that will take a while.'

    Jurgen Herre, Managing Director, Hines Middle East agreed, predicting that the recovery would take a 'w' shape. 'Now that speculators are out of the Dubai property sector, it has become a supply and demand driven market, which will hurt the emirate as there is so much inventory in the pipeline,' he said. 'The amount of supply that is coming onto the market in the next few years is staggering. I do not feel there is enough demand to support it.'

    Increased regulation

    Looking forward, Donald Trump Jnr, Vice President of the Trump Organisation warned that Dubai had to continue to increase transparency and legislation in the sector, as the city was now competing not just against other emerging markets, but also against developed economies.

    Trump noted that during the boom some of the projects announced in the emirate had 'lost touch with reality' and that Dubai should capitalise on its existing and planned infrastructure and legislation when looking beyond the downturn.

    In terms of increasing legislation, Rera's Director of Development, Mahmoud El Burai told delegates at one of the conference streams that the agency would release an emirate-wide pricing index, similar to its current rental index. 'We are looking at a professional and transparent real estate market, where all parties' rights are protected,' said El Burai, adding that the agency was rolling out a series of initiatives designed to include all main groups within its regulatory framework.

    ' has been a long and painful year...but it has taught us to be more creative, effective and ambitious,' he said. 'We have done a lot but there is more to do, this is just the start of it.'
    AMEinfo Staff

    AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.

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