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It is a quite simple formula that developers in Dubai need to follow until 2020 — build and sell their residential properties.
''The current up cycle is geared towards selling residential and keeping the commercial properties in the developer books,'' said Ahmad Khalaf Bin Touq Al Marri, general manager of Union Properties. ''It's a cycle that has a definite timeline in sight — 2020.''
During the downturn, many of the emirate's developers had focused on creating a leasable portfolio. The intention was doing so would create a sustainable income flow rather than let themselves be too reliant on the wild swings in the selling market.
But Al Marri believes developers have to change with the times. ''There's a need for quality housing, and buyers are willing to invest in new or emerging locations,'' he said.
Union Properties will be testing the extent of the buyer sentiments through five high-rises at its MotorCity development, which until now had been uniformly low- or mid-rise. ''Given the different GFA (gross floor areas), these towers will be between 20 to 45 floors,'' said Al Marri. ''The Vertex Towers should go on sale once a certain construction timeline is reached, keeping in mind the Dubai Land Department requirements for launching off-plan sales.''
Currently, property values in MotorCity average around Dh1,000 a square foot.
The developer is thinking vertical as well. Phase Three of the popular Green Community has been confirmed, which will add another 210 townhouses to the total. It will also do the development and project management for a community project within MotorCity, but on land that is owned by another investor.
Even retail at MotorCity is getting a bit of a makeover. The original plans for the Auto Mall have been revised to create a more convention shopping and entertainment centre that can take care of the needs of the community and the immediate neighbourhoods. (Another of its retail projects, The Ribbon, is inching closer to the halfway mark.) ''Things are looking good, both on the project side and on the financial,'' said Al Marri. ''Debts were slashed and the company is focusing on clearing projects through its own funds wherever it can. But there's a flip side — reducing the debt load meant some assets, land and built property, had to be sold. But that's the nature of business.''
Read on Dubai Holding's announcement of new projects
Source: Manoj Nair, Associate Editor, gulfnews.com