UAE Real Estate in the News
The United Arab Emirates’ real estate markets have been in the news over the last year, and much of that news was negative. When the ball dropped on the new year, it seemed like it brought a new vitality to Dubai and the rest of the region’s real estate industry. It’s not all good news of course, but there are initiatives that are believed to be good for real estate and the region, and harbingers of better times to come.
Education Harmonization for Better Business Practices
Dubai Property College has formally joined with the Arab Administrative Development Organization (AADO) in a new initiative to spread real estate sector professional education and training throughout the region. Mahmoud El Burai, Director of the College and the Director for Real Estate Development for RERA, the Real Estate Regulatory Agency, is quoted as saying: “It puts in place the foundation not merely for harmonization of standards and practices but also for the creation of a real estate bloc with huge appeal and, significantly, credibility for investors from any part of the world. The aim is to get the professional practice right by making sure the training is available to a level which is aligned with best international practice.”
Prices Down but Activity Up
CB Richard Ellis has issued a report showing that projects put on hold in 2009 are being reactivated, with new contracts being awarded and old projects moving to completion. With prices down already, it is expected that this new inventory will bring them down even more. Landlords are using staged rent and other incentives to attract tenants. Though prices and rents are down, there is also new investment interest in the area. With prices in some areas off more than 50% from their peak, institutional investors are entering the picture, buying up in size and quality to increase their holdings.
An Increase in Mergers and Acquisitions Expected
One trend expected in 2010 is more activity in mergers and acquisitions. With more than 2000 brokers listed by the Real Estate Regulatory Authority (RERA), it’s a fragmented market that should result in stronger and larger companies buying up the smaller entities. Along with mergers and acquisitions, there is also the prediction that activities will begin to shift from development to more project management and restructuring.
All considered, the UAE appears to be in a position to see a return of some of the excitement of the past in real estate development.
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