Friday, September 22, 2006

South Korean developers enter in Dubai property market

By the year-end, the total commitments from the South Koreans will be valued at over $2 billion. While the first lot of ventures is being financed solely by the developers, those that will follow could be backed by South Korean real estate investment trusts (REIT) and even European financial institutions.

“Our investment in Dubai is not a result of a detour, it is part of Korea’s own economic expansion programme,” says Lee Elliot, Manager at Bando Construction Co. Ltd.

The company is getting ready for a full-fledged presence in the local market with the Ubora Towers. Ground breaking is expected by the end of the year. Construction of the super-structure should commence in the first quarter of 2007. Sales of units (70 commercial and the rest residential and retail) have not started, but the prices should be comparable to the premium rates in Business Bay of over Dh1,000 a suare foot.

Located between the stadium in Dubai Sports City on the left and the Victory Heights villas on the right, the property will get a further push with its proximity to the Ernie Els 18-hole golf course. The high-rise offers 30 floors of commercial space at rates of Dh850 to Dh950 a square foot. Axon Gulf expects a sell-out by the end of the month.

In the pipeline are six other projects in Business Bay and Dubai Sports City. “It is location, the developer and his target market that will drive the property growth in Dubai,” says June S. Kim, Chief Executive Officer, Axon Gulf. On the possible entry of South Korean REITS, Richard Lee, Vice-President at Sungwon Corp., says: “It is their prerogative to direct investments into the Dubai market.” Apart from being the developer, Sungwon intends to use its vast construction track record to good use here.

[Article from Property Weekly]

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