Wednesday, April 25, 2012

291 stalled projects in Dubai to be resumed shortly

Dubai had announced that a total of 291 stalled projects will soon see the light of the day. Each of the 291 registered projects, as of 31st March 2012, will qualify for either the Tayseer or Tanmia initiative, and, work on the projects will be resumed.

The Real Estate Regulatory Agency (RERA) in Dubai has quoted in the prospectus as saying that 165 projects have been completed since the start of 2009. About 291 projects have been put on hold. These projects will be completed in due course. Another 29 projects have not yet commenced.

A bond prospectus posted on the London Stock Exchange in 2011, states that 217 real estate projects have been cancelled as of 31st May 2011. The new bond prospectus reveals that the current market situation has led to re-evaluation of several real estate projects and delays in several projects. Since mid-2008 several real estate projects have been cancelled or delayed, reflecting shortages in liquidity for developers and decreasing headline real estate prices and rental rates.

Under the Tayseer programme, a total of 154 projects have been launched in 2010, out of which 40 projects qualified under the required criteria. The criteria require that projects should possess adequate infrastructure planning, with well managed escrow trust account and financial reporting, the technical report should show minimum 60 percent construction completion, and that minimum 60 percent of the project is sold.

As per the prospectus, the Tanmia initiative will include 33 projects, two of which have been launched already. The initiative is designed to boost investor confidence in these projects, which the Dubai Land Department has identified as qualifying for the Tanmia program.

As of 31st March 2012, Dubai has 596 registered developers and 852 registered brokers.

Last year, DLD recorded Dh.94bn villa-related realty transactions and Dh.43bn apartment-related property transactions.

According to Jones Lang LaSalle the residential real estate market in Dubai, appears to have bottomed out with prices similar to early 2008 levels.

Meanwhile, Knight Frank in its March report said that real estate in Dubai, has not only achieved stability, but, even the prices have grown by 2.3percent on an average during last quarter of 2011.

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