Pulse on Dubai Property Market

Dubai Property MarketImage Credit: Gulf News Archives

Dubai's property sector has been recovering fast and with the emirate hosting the World Expo 2020, the real estate market has received an even bigger boost in confidence. The optimism is expected to be manifested at the lOth International Property Show (IPS), which will run parallel with the Annual Investment Meeting (AIM) from April 8-10 at the Dubai International Convention and Exhibition Centre.

Last year's edition gathered more than 12,000 visitors from 84 countries, including 46 ministers, and organisers are confident the footfall will exceed 20,000 guests from 120 countries this year, including around 60 ministers. There are also more than 300 exhibitors that are expected to unveil new projects and present exclusive property deals at the event.

"We anticipate major regional and international participation, mainly because it is the first edition after Dubai won the bid to host the Expo 2020," says Dawood AI Shezawi. CEO of Strategic Marketing and Exhibitions, which is organising the event "There is growing interest in the local market, especially Dubai, from real estate developers all over the world."

Last year's IPS unveiled 12 major regional projects by prominent developers. According to the organisers, this year's edition will see a higher number of new projects launched.

Participating companies will come from various sectors, including hotel and leisure, which will make up 18 per cent of all participants, commercial (17 per cent), residential OS per cent), offices OS per cent) and retail (13 per cent), while the rest will represent urban development authorities (l2 per cent) and free zones (10 per cent).

Property Weekly asks exhibitors what they expect from the event and their thoughts on Dubai's property market.

Build market knowledge

Although digital technology has enabled many companies to conduct business networking activities through electronic media, traditional platforms such as exhibitions and conferences are still very important in this part of the world, says Youcef Betraoui, CEO and Founder of Land Sterling Property Consultants.

He also says positive investor sentiment and strong economic fundamentals have created many opportunities for businesses in the UAE. Last year was particularly phenomenal, not just for Dubai but for the entire UAE, adds Betraoui. Moreover; renewed investor confidence, increased business activity and continued government efforts to bolster the regulatory framework have created an invigorating environment as a whole.

"'Last year was a year of property price recovery from the recession lows and we believe 2014 will be the year of fortune reversal, implying positive pay-offs on prudent property investments," says Betraoui "'Experience has made Dubai wiser, hence we expect 2014 to be a good year in terms of price movement, new projects and investor-friendly regulations."

Taking part in the IPS will help galvanise the gains real estate stakeholders have achieved. he says.

"Participating in the International Property Show will serve three main purposes: build our professional network, build an understanding about how to enhance our service offerings to address client needs in the best way and build our market knowledge," says Betraoui.

The show's participants will also be watching out for hospitality projects such as hotels and serviced apartments, which are expected to achieve phenomenal growth because of the Dubai Expo 2020. "We also see increased investment towards vacation ownership [timeshare] properties as Dubai continues to climb in popularity as a holiday destination," he adds.

Develop contacts

With the revived confidence in the UAE property market, this year's IPS will be welcoming many new exhibitors. One of the new entrants is Ready House Real Estate, a specialised property consultancy and development/project management firm.

"We have observed that there are more international real estate companies than local real estate organisations at IPS, which gives us an edge and opportunity to connect with more contacts in the international market," says Pai Shri Krishna Vasudeo, General Manager of Ready House, which will be presenting a select range of properties at the IPS. Vasudeo also expects more investors and property professionals from different countries this year.

"Dubai has matured and bounced back from the slump and the emirate has created its own place in the international market,'' says Vasudeo. "Compared to previous years, Dubai now has better norms and regulations. Furthermore, only developers with a proven record of accomplishment are left in the market now. This leads to a healthy competition among developers and provides great choices to the clients.

"This new trend has put the Dubai market at the top.”

Global Investments

The exhibition provides a unique platform for potential homebuyers and investors to learn, review and understand lucrative global investment offerings. For example, by participating for the first time this year, Spain State, a buyer's services agency, is looking forward to present and sell some of its exclusive properties and promote the benefits of investing in Spanish property, which include becoming a resident of Spain and being able to travel to 26 countries without the need of a visa.

"There are now more Spanish customers looking for investment opportunities in the UAE, and vice versa," says Javier Serrano, CEO of Spain State. "We have a good clientele in the region that invests in property in Spain and we have high-net-worth Spanish customers who prefer to invest in Dubai, since it is tax-free."

Bargain price

He continues: "Our Arabic customers want to take advantage of bottom-of-the-market prices and go bargain hunting for second homes and rental investments in Spain and get Spanish residency."

Serrano says properties in Spain continue to generate interest from UAE investors. One of his Emirati clients bought 10 hotels in Spain last year, while a few other clients in the GCC looked at villas in Madrid and an equestrian complex near the airport. Arable lands are also popular among his clients in Abu Dhabi.

"Each customer has his or her own needs, but being able to offer Spanish residency to investors accelerates the selling process," says Serrano. "Our customers are looking for villas, flats or lands with a minimum investment of €500,000 (Dh 2.52 million). This year at IPS, we are offering clients who will book a property during the event free processing of their residency visa for four years."

Another new entrant at IPS is the London-based Hanson Estates, which aims to create awareness about its recently established Dubai operations during the event. The company specialises in property investment in Dubai and London.

Ronnie Comfort, Managing Director of Hanson Estates, says. “There is tremendous growth potential in the local property market with returns of up to 30 per cent per year in certain areas. Moreover, the renewed confidence in the sector, along with Dubai hosting the Expo 2020, makes investing in Dubai property market a lucrative option for the discerning investor."

With continued global interest in Dubai's real estate market, IPS expects to attract many individuals and companies looking to invest in property as a primary asset. For exhibitors, the event provides a platform to promote real estate investment opportunities in Dubai and overseas, says Comfort.

"We will lead with unique investments such as the new seven-star hotel in Dubai Culture Village as well as overseas opportunities such as the Golden Visa initiative introduced by the Spanish Government for foreign direct investment into the country,” he says. "Under this scheme, a property investment of €500,000 will entitle the investor to a Spanish resident's visa [Schengen visa], which may be converted to European citizenship [based on eligibility] after five years." 

"We are also showcasing off-market homes in what is arguably the safest and most desirable global location, prime central London,” he says, adding that they will be offering a 10 per cent discount on agency fees for registered visitors at the show.

"With overall economic conditions improving, we anticipate healthy sales returns during and after the show. Over the three-day period, we anticipate Dh55 million worth of transactions, while we envisage in excess of Dh4 million in operating profit in 2014," says Comfort.

Generate leads

Many exhibitors return to the IPS every year, claiming the event helps them generate new business and boost profits. Exhibiting for the third time, Geo Property Brokers is making a come-back to property exhibitions since the recession.

The company says IPS helps gain the trust of clients and gather business leads, Abdul Rahimm Naush, Director, says, "We generally become very busy after the exhibition, since the event connects us with potential clients and we build business relations with those who offer us repeat business opportunities.”

Geo Property will be offering projects from Rufi Properties and other developers in Business Bay, International City, Dubai Sports City and Jumeirah Village. "We are not charging any commission for any Rufi Properties project during the event,” says Naush.

He continues, “Our main focus at the event is end users, since post-recession Dubai's real estate market is largely end-user driven. End users are instrumental in providing us continuous business, which is not generally possible with investors."

New at the show

IPS also features a conference jointly organized the Royal Institution of Chartered Surveyors (Rics), the show's knowledge partner. The one-day conference focuses on how frontier and emerging markets can attract sustainable real estate investment.

Robert Jackson, Rics Regional Director, says, "Our aim for the year is to create a free-of-charge event that provides an expert insight into the elements that create a thriving and sustainable real estate market that successfully competes in the global investment arena.”

He says Dubai's property market has picked up significantly in the past two years, but much of the cash investment in the country is largely due to Dubai's status as a safe haven. He further reveals that inward investments until now have been fuelled by cash from areas in the region affected by political instability. To create a truly sustainable real estate market, he says Dubai needs to attract institutional investors and a much wider international investment base.

"There is certainly cash coming in, which is creating a buoyant market. But now we need to focus on mid- to long-term sustainable growth,'' says Jackson. "At the conference, we will speak about the key steps needed to take us towards a sustainable real estate market."

The IPS conference will also discuss the role of regulation in driving transparency and  market confidence and will tackle how local markets can compete with more established markets.

The first session will talk about international standards and regulations. It will look into the standards that will help boost investor confidence. "Investors require transparency, which in turn gives them confidence in the market," says Jackson. "A large part of achieving this is by adopting international standards. The new international standard on property measurement, for example, is going to be introduced in June this year and the Dubai Land Department has already committed to its adoption, which is a positive step towards transparency."

One of the fundamental parameters when assessing a property is its size. The new measurement standard introduces a consistent way of measurement that makes the property valuation process more accurate and auditable.

"There is a need to adopt international valuation standards, which feed into a company's report on its built assets in accordance with the International Financial Reporting Standards,” says Jackson. "All these steps would help produce a transparent market that is underpinned by ethics and professionalism."

In another conference session on how frontier and emerging markets can compete with more mature markets, the focus will be on professional education and training for the local workforce, helping them become more proficient in the property market. The session will also highlight the importance of adopting new technologies and creating opportunities for institutional investment.

Jackson says emerging markets, including Dubai, often lack large-scale commercial assets that can be sold to institutional investors. The session will look at what governments can do to attract these types of investors.

The third session will look at the legal framework that underpins the real estate market. Dispute avoidance and resolution are also fast becoming hot topics in emerging and .frontier markets, which are in the process of building a robust and transparent legal system.” says Jackson.

The final session will be a panel discussion on what a sustainable market should look like from a stakeholder's perspective. There will be contributions from contractors, developers, investors, lenders, occupiers and regulators.

"There is a lot of optimism in the market, but there are also challenges that the market needs to address. That is what the IPS conference will analyse," says Jackson.





Source: Hina Navin, Special to Property WeeklyPW



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