Small developers moving out of Dubai

After the introduction of the Escrow Trust law many smaller developers have moved to Ajman where you see a lot of activity happening, says an industry expert. "If you have noticed the trends there are not too many new projects that have been announced or launched in the last six months as compared to last year," Daniel Husain, vice-president, Schon Properties, told The Business Weekly.

With Escrow law in Dubai only developers with financial strength and companies with credibility can only grow in this market. "As a result of this there is a major supply shortage of both residential as well as commercial units in the market here," he said.

Another interesting trend in the Dubai real estate market, which Schon sees, is an increased demand from foreign institutional investors. Whether they are foreign funds or hedge funds, these institutional investors have come to and coming to Schon to purchase in huge amounts just the way they do in other developed countries like UK. This was not the case earlier. "Although, institutional investments is still lacking in Dubai, now we have been getting a lot of enquiries from them for both the residential as well as commercial properties," he said.

Schon's major buyers as of March 2007, include 27 per cent from the UK, 14 per cent from Iran, nine per cent India, nine per cent from Gulf Co-operation Council (GCC)Gulf Co-operation Council (GCC)Loading... countries and the rest from other parts of the world.

The developer, which has already announced projects worth Dh4 billion in Dubai, is close to finalising a deal to build two residential towers on the Shaikh Zayed Road.

"We are going to launch two towers on the Shaikh Zayed Road, but I cannot give you any more details about that now. We will be launching them very soon. The land has been identified and own those plots, but I am not allowed to disclose any more about that now," Husain said.

Husain feels that getting land is becoming more difficult in Dubai, especially in prime locations. Areas like Jebel Ali Downtown have seen prices jump over the last couple of months. "Dubai Waterfront is the next major hot spot in Dubai and lot of developers including us are going into that direction, because the development trend now is towards the New Dubai side," Husain says.

If you look at the master developers most of there projects are now nearly already sold out. At these areas there is already a high premium, Husain said.

Although the developer is looking at some options in Abu Dhabi and Al Ain, the company is a firm believer in Dubai. "Our core focus is in Dubai and Dubai will always be Dubai," Husain said.
Right from the beginning we had a strategy to focus our developments in the new Dubai airport area. "We feel that with the development of the new airport, the entire area has a very huge potential," he said.

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source: zawya.com