Signs that the property industry in the gulf and Middle East is healing from its bruised and battered downturn are beginning to emerge with developers looking to the future but the focus is very much away from hard hit Dubai.
New developments are largely outside Dubai which saw prices slump up to 50% last year and those that are operating in the emirate don’t see any recovery for at least another 12 months, if not longer.
Developers are very much concentrating on other locations. Oman’s Ominvest revealed that it is planning a $1 billion integrated tourism resort in the southern port city of Salalah that will include four hotels and housing units which will be offered for sale to both local and international investors.
‘The construction of the resort will start in late 2010 or early next year and it will be built in three phases. We are building a complete town that caters to both local and international visitors,’ said chairman Hani Al Zubair.
Meanwhile UAE’s Majid Al Futtaim (MAF) Properties is planning an $817 million shopping mall and office project in Syria, as it seeks new markets in the Middle East and North Africa outside an already packed Dubai.
The firm, famous for building an indoor ski slope in Dubai, and which typically enters markets with French retailer Carrefour as anchor tenant of its malls, will fund the project with its own financing and with banks in Syria. It will have a mall, hotels and office buildings.
The company has ten operating malls in the Middle East and North Africa and plans to more than double its portfolio by 2015 with 14 new projects in the UAE, Oman, Egypt, Lebanon, Syria, Qatar, Saudi Arabia and Yemen. Chief executive Peter Walichnowski said the company’s malls have shown resilience to the global economic crisis and did not see a significant drop in sales in 2009.
But there are tentative signs that confidence is slowing creeping upwards in the beleaguered Dubai market. Emerald Palace Group said that none of its customers had defaulted on payments for units at its Kempinski Hotel Residences Palm Jumeirah project in Dubai. Company chiefs said the zero defaults were a ‘reflection of our customers’ confidence in the project, in Palm Jumeirah and in the long term potential of Dubai’.
Dubai’s property market will not recover before next year and most likely towards the end of 2011 as mortgages become easier to obtain and more people move to the city, according to the developer of a $4 billion hotel and residential project.
Banks can’t stay away for long. They have to lend and historically most of this region’s lending goes into property,’ said Santhosh Joseph, founder and chief executive officer of Dubai Pearl.
‘We’re not expecting to sell substantially in 2010 and 2011. We are a zero debt company but we may look into leveraging at a later date,’ he added.
