4.10 AM Friday, 29 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:56 06:10 12:26 15:53 18:37 19:52
29 March 2024

Dubai property prices 'will never decline'

Whatever happens outside will not affect us too much because the GCC countries and the UAE have taken a lot of good cautious steps related to financial factors and issues related to real estate

Published
By Rana Jimaa

Investment bank EFG-Hermes caused a stir last month when it forecast that property prices in Dubai would fall by up to 20 per cent by 2011 after peaking next year.

But in an exclusive interview with Emirates Business Salem Almoosa, Chairman and CEO of Falconcity of Wonders, dismissed such suggestions and said prices would not fall and there would be no correction.

And he accused prospective buyers who said prices were about to fall of doing so in the hope that such speculation would drive the market down and they would be able to buy more cheaply.

Falconcity of Wonders is a Dh5.5 billion mega-project to be built at Dubailand that will feature replicas of the seven wonders of the ancient world and modern wonders such as the Eiffel Tower.


Are real estate prices in the UAE set to go down as has been suggested?

In my opinion prices will never ever go down due to several factors. First and foremost is that we have a visionary leadership that has conducted the essential and proper studies regarding the situation in the Middle East as a whole, as well as a studying the situation in the emirates in particular. So they have a plan. Of course the execution of the plan is not the end of the story, they went further than this by minimising the risk in the execution of the plan which means they looked at the fundamental issues such as economic factors, the political issues, the social issues and so forth. They took all the issues and points concerning the real estate market and took the necessary steps. I also think individuals should not throw speculation into the market for their own purposes. If parties are spreading rumours that prices will go down they are doing this so they can buy cheaply and not because that is a reality. I believe people should not speculate unless what they say is supported by facts.

And a price correction?

I believe there will not be a price correction in the market. Who is saying this? I have not heard of any correction or decrease in prices and I am not seeing it either.

You say the leadership is taking certain issues into account – what particular aspects were you referring to?

One of the important issues is the infrastructure, are they doing what they are supposed to be doing about the infrastructure? The answer is yes, the establishment of proper infrastructure is the reason why are we are such a competitive market in the region. We have a proper infrastructure, and by infrastructure I do not mean only roads and ports and so forth, I am also referring to human wealth. No infrastructure will grow without the appropriate human wealth, so the government as part of its strategy to build a strong infrastructure, is also concentrating on human development. No country in the world goes upward without developing human resources, and by human resources I am referring to UAE and non-UAE nationals. We do not differentiate and the law applies to all of us. Also we are at the globalisation stage, the emirates is becoming part of the world and the world is becoming a small village in economic terms. That means there is a lot of economic interaction. We are very cautious of our economic interaction with the rest of the world.

Do you think the credit crunch in America will affect the real estate market in the UAE or the rest of the region?

What's happening in America today on the mortgage issue will not necessarily touch us and I do not think we are at risk from this because our leadership has calculated all the possible risk involved and put in many preventative measures to make sure that if anything happens outside we will not be affected to a large extent. So if there were an earthquake we would have anti-earthquake solutions.

What about the financial upheaval in Europe – will that have an impact on the UAE?

The Western economy is all in one boat, so the American boat is carrying the European countries with it, and to an extent Southeast Asia as well. But the Middle East has a lot of oil, not industry. It's time to think rationally and to say whatever happens outside will not affect us too much because the GCC countries and the UAE have taken a lot of good cautious steps related to financial factors and issues related to real estate. So the property market is not affected – if it were affected you would not have seen the crowds at Cityscape. At Cityscape, they announced that when you enter doors you will not think anything had happened in America, we have nothing to do with this issue. There is demand in the real estate market from a lot of investors.

Have you any plans for projects outside the UAE?

Not really. I am in love with the UAE. It is my country so I will focus on this place and there are no immediate plans to start project outside the country.

What about the other emirates?

We will consider any opportunity that comes our way, we are always open to new ideas and new projects.

When is the Falconcity project scheduled for completion"?

I cannot tell you the answer to that. Any large-scale project such as this will of course take time and an exact date is difficult to specify. We make plans but they change every year as there are many factors as there are many determining factors. But we hope that in another five years things will be taking shape.

Can you tell us what part of the project has been completed so far?

We have completed around 90 per cent of phase one.

How do you see the UAE's real estate sector in 10 years?

Better than today. For sure the UAE will keep growing, people will keep coming to live here and so the economy will continue to grow.

What do you prefer as a developer – mixed-use or single-use projects?

Mixed used for sure, we get more returns from mixed use and of course the wider scope and variety of developments means the returns are different.

In terms of profitability and returns, do you gain more from mixed or single use developments?

It all depends on the feasibility study, the location and the purpose of the building plus other factors such as roads, impact studies, electricity, water and security. When all these factors are taken into account then the you can determine what brings in more profit. Doing a feasibility study minimises the risk.

Could you tell us what level of revenue you expect to make from Falconcity?

To be frank, it is hard to say at the moment because this can only be determined when the title for off-plan units is transferred from my name to the buyer's name and we receive the full price and this has not yet happened. Maybe in three months' time we will do that and we can then determine the profitability of the project. Right now it is cash in, cash out.

PROFILE: Salem Almoosa, Chairman and CEO, Falconcity of Wonders

Salem Almoosa has a BSc in economics from the University of Tampa, Florida, US. He was formerly chairman of the UAE's Federal Committee for Travel Agents, the Federation of Chambers of Commerce and Industries and the Dubai Board of Travel Agents.

He is a founder member and member of the board of directors of the UAE Contractors' Association, an honorary member of the American Business Council of Dubai and a member of the US National Geographic Society.

Almoosa has taken part in several international conferences as a member of the Dubai Chamber of Commerce and Industry.



A project worth over Dh5.5bn

The Falconcity of Wonders is an Dh5.5 billion project within Dubailand.

The project, according to the developers, embraces modernity while maintaining the rich cultural heritage of the UAE and other countries. Its has been designed to resemble the national emblem, the falcon. It wll be a self-contained residential, tourist and recreational destination, formed on the lines of the wonders of the ancient and modern world, but with a modern twist.

A purpose-built community project in Dubailand, it will feature structures based on famous sites and the architectural marvels of the world, such as the Pyramids. The Grand Pyramid will be a multi functional complex housing residences, offices and other recreational avenues. It is expected to be biggest modern pyramid in the world. Of the two smaller pyramids, one will host Falconcity management facility, while the other is a commercial structure within the theme park.

The Hanging Gardens of Babylon Dubai will house eco-friendly luxury flats, with many open-air restaurants and coffee shops and a garden overlooking the Falconcity Mall. The Eiffel Tower Dubai will be at the central location of the Falconcity commercial sector, which will host commercial, residential, recreational and retail elements. The Elysees will be rich in landscapes with parks, cafes, gardens and fountains. The Taj Mahal Dubai will be a luxurious five-star hotel and the Leaning Tower of Pisa Dubai is a monument in the city of Rome.

The most 'romantic' place in the Falconcity will be Town of Venice situated by the waterfront. It will be developed with open-air cafes, gondolas and pedestrian shopping. The Great Wall Dubai will stretch from one side of the theme park to the other, with a jogging track running on it. It will be higher than a three-storey building and be over 1,700 metres long. It will also act as a buffer zone between the theme park and the residential area. The Theme Park will cover an area of four million square feet and is being projected as the most ambitious tourist destination ever created.

Apart from residential and commercial areas, the project will emphasise on leisure and educational facilities, including health clubs, spas, schools and parks.