Tuesday, November 10, 2009

Wasl to add 5000 new housing units into Dubai property market

There will be an additional 5000 new housing units or moere in Dubai property market during the next couple of months by Wasl, the asset management arm of Dubai Real Estate Corporation (DREC), a top official said.

The Chief Executive Officer of DREC, Hesham Abdullah Al Qasim, revealed that Wasl already manages about 20,000 housing units. Now with the inclusion of these residential units, the total housing units under the company’s portfolio will touch 25,000.

Over the past year, there has been a natural transition of Dubai property market from freehold to leasehold. This will help in easing rents further, with mounting supplies.

The total housing supplies in Dubai this year may range from 27,000 to 30,000 according to the projections made by Department of Finance, which is hoped to be less than enough to cool the demand. But, with the impact of global economic crunch on UAE economy, the demand forecast has been revised further down.

Few analysts are still of the opinion that the current deliveries may result in an oversupplied market, which may bring down prices and rents down further. However, according to Al Qasim, the price readjustment has been good for market. The new supplies will help in stabilizing the market further, particularly when the demand in market picks up.

"We have a balanced portfolio of housing units that are 95 percent occupied, which gives us a very good coverage," he added.

Established in June 2007, the DREC combines the assets of Development Board and Dubai Real Estate Department through Law No.14, according to which, the corporation will be a public commercial institution, affiliated with Dubai Executive Council.

DREC is responsible for owning and managing its land bank, including sizable amount of properties registered under the name of Dubai Government, and others. The corporation holds a large portion of the Dubai land bank, however, it has no plans to enter the freehold property market.

Housing rents in Dubai surged between 2005-08 based on growing demand, which has compelled several thousands of Dubai residents to shift to places like Sharjah where rents were lower which pressurized the infrastructure. Growing rentals prompted the government to impose a rent cap to help the mid-income group, apart from seeking solid investment in low-cost or affordable housing that helps Dubai to tame housing inflation.

Wasl has continued to maintain its low rents in Dubai, despite the recent rent hike. Rent for a double bedroom flat has been as low as Dh.16,000 in few parts of Dubai even now.

In order to help the market and ease pressure on rents, DREC has undertaken a massive housing scheme to offer affordable homes for growing population. The new housing supplies are part of this plan.

Wasl is developing its businesses in several verticals such as Hospitality, Property, Leisure and Industries. About 5000 industrial units of Wasl are already spread across 27 industrial zones such as Jebel Ali, Al Quoz, Rashidiya, and on the hospitality side there are eight hotels under management. Wasl also gradually plans to add hospitality commercial and retail project development arms.

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