UAE property law in 1 year: Alabbar
|
|
DUBAI - The UAE Federal Law on Properties will be in place in a year’s time and there will not be any turning back for the emirate’s property sector, according to Mohammed Alabbar, chairman of Emaar Properties. In an interview to Banking & Finance magazine, Alabbar said that the property sector in Dubai will be growing ever stronger in the coming years with demand fuelled by both expatriates and foreign buyers. Question: Can you give us an indication of the volume of projects that Emaar is involved as a real estate developer? What is the amount of investments that you have committed to these projects in the next few years? Answer: We have several projects, some of these have been completed and some are presently in various stages of development. But all of them are lifestyle properties, which have helped in enhancing Dubai’s global image as a lifestyle destination. I quote local newspaper reports, which say Dh20 billion of new construction related projects have been tendered since the beginning of this year, and the government expects $50 billion (Dh 184 billion) in real estate investment by 2010. Emaar is one of the leading property developers; so you can deduce what Emaar’s contribution is to those figures. Q: Do you see a growth in the demand for properties? Could you give a breakdown of the percentage of sale, reservation, and leasing facilities of your projects? B: Our lifestyle homes and communities are appreciated and the demand for such products is growing. The demand arises from the fact that Dubai is attracting young, upwardly mobile entrepreneurs, businessmen and professionals, who are increasingly looking to set up businesses or homes in this city — thanks to the vision of Shaikh Mohammed bin Rashid Al Maktoum. These young people want to enjoy similar lifestyles they’ve been enjoying back in their countries and Emaar provides that lifestyle. I like to add here that we have handed over more than 5,000 homes to date across most of our developments and we expect to cross 8,000 before the current year ends. These numbers should illustrate the attraction our properties have for our homeowners and investors. Emaar will be looking at nearly 13,000 families settling down in Emaar homes in a couple of years time. This, of course, does not include homes in the Burj Dubai tower. Q: How many nationalities comprise your homeowners? A: Emaar homeowners are spread across every nationality that has made Dubai their place of work and leisure. It is one of the few cities in the world that embraces nearly 170 nationalities having different cultures, languages and cuisines. This gives Dubai and Emaar its character and its place in the world. Q: Do you have any apprehension given the property boom in Dubai, especially with the constant supply of new projects? A: The Dubai property sector is booming and will continue to do so. Most new developments are now sold out. Some of those who have not yet bought property hope that things will slow down. But all evidence suggests to the contrary. Local, regional and global interest in buying Dubai property is getting stronger not weaker. There is a new wave of local buyers, who have been hanging back and are now frightened of missing out. Three key factors are driving the real estate boom. First, the historically low level of international interest rates has cut debt servicing costs and allowed companies and households to borrow more. Second, there is a lack of obvious investment opportunities. The end of the 1990’s equity bull market and the low level of current bond yields have led to an unusual amount of uncertainty over future returns from traditional investments. Real estate tends to offer a predictable income as well as the possibility of capital gains and has performed well over the long term. Third, global liquidity is high. There is a lot of cash chasing few assets. Also, the well-paid professional workforce employed in Dubai is no longer seeking to ‘go back someday’. They have made Dubai their home. Q: What is Emaar’s diversification plans and which sector do you wish to enter? What about Emaar’s plans for investment in other Arab nations? A: While Emaar continues to actively pursue expansion in its core business of innovative, high quality real estate development, it has diversified into related business lines to further build value for its 41,000 shareholders. In line with this corporate belief, Emaar also owns and manages three subsidiaries — Dubai Bank, focused on retail and commercial banking, EMRILL, a joint venture with the UK-based Carillion, which provides innovative property and facilities management services, and its technology and communications company, Sahm Technologies. Emaar is also the majority single shareholder in Amlak Finance, UAE’s first mortgage finance company. Emaar is also signed up to build mixed-use projects in Jordan and India that are significant in scale and proportions. Q: When do you anticipate the issuance of the Real Estate Ownership Law, and is there any controversy about ownership of foreigners? A: I foresee a definitive federal property law to be in place within one year’s time that will provide clarity for real estate investors although they all know that the government has never reneged on promises. At present there is no federal property law in the UAE, so freehold cannot be held to be illegal, but neither is it explicitly legal. At Emaar, we have a fair contract between the buyer and us that ensures the rights and privileges of the expatriates owning freehold properties in Dubai. The Emaar Properties sale agreement promises ”a clear and unencumbered freehold title to the Lot to the Purchaser, subject only to instruments, easements, rights of way, convenants or agreements with or in favour of a government authority.” Q: What about Dubai Mall Fund Project intended to support business creativity among UAE nationals? Have you received any response so far? A: We launched The Dubai Mall Fund because we want to encourage UAE nationals to develop their business acumen. The project will provide Dh20 million as seed capital to our young nationals who propose original concepts in retail business. This way we can ensure that some of these become the future retail leaders in Emaar’s globally recognised The Dubai Mall project, which is set to change the face of global retail forever. The programme has been very well received among the community. |