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Only innovative developments can attract new customers

Only innovative developments can attract new customers
Dubai formed a new committee to control the pace of realty projects and bring stability and balance between supply and demand.

Dubai - New realty projects in Dubai need to add value to emirate's economy, attract new types of demand

By Waheed Abbas

Published: Sat 14 Sep 2019, 9:30 PM

Last updated: Sun 15 Sep 2019, 6:51 PM

Property developers in Dubai cannot just duplicate their existing projects because new developments have to add value to the emirate's economy and attract new types of demand after the latest initiatives announced by the government, say industry executives.
"The purpose of the new committee is to control supply. Basically, if you come up with a new project, it has to add value and attract new type of demand. Emaar projects are attracting new types of customers because it is not just building towers but destinations and landmarks. Similarly, other developers have to tap new streams of tenants, not regular tenants such as those who already have residence visas here," said Firas Al Msaddi, CEO of fam Properties.
"The trend of coming up with 10-20 same types of buildings will not happen again in Dubai. developers have to sell concept and say what they want to do with the land and how much value it will add to the economy," he added.
Dubai has formed a new committee to control the pace of real estate projects and bring stability and balance between supply and demand. It will also ensure that there is less direct competition between private and semi-government developers.
"If you look at new upcoming master communities, Emaar is bringing world's next tallest tower and Meraas has the world's largest observation wheel in their communities. They brought new concepts to City Walk as well. That is where private developers cannot compete," he added.
Nick Grassick, managing director of PH Real Estate, said less direct competition between semi-government and private developers will ensure greater diversification of homes regarding design, location and price point.
"We may see semi-government entities develop larger master-planned communities containing a greater number of affordable homes, with private developers encouraged to develop more bespoke, boutique projects within those communities. Less direct competition from government backed developers may also encourage overseas investment from international developers as more opportunities become available," he said.
Grassick noted that if supply is noticeably controlled, and release dates changed to affect the oversupply concern, this will invariably have a stabilising effect on values.
Gaber Nehma Kenger, CEO of GN Homes, said controlling supply will help sales prices increase, but it will not help rent prices increase dramatically.
"Rent prices dropped not only because of the increase in supply, but also because of the increase in the cost of living here in Dubai. But I still believe that the rental income here is very attractive compared to other major cities around the world; making 6-8 per cent return on investment on rent is magnificent if you compare it to the rest of the world," he added.
- waheedabbas@khaleejtimes.com

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