'Dubai market to recover by next year end'

Dubai's property market will recover by the end of 2011 as mortgages become easier to obtain and more people move to the city, according to the developer of a $4 billion (Dh14.6bn) hotel and residential project. "Banks can't stay away for long," Santhosh Joseph, Chief Executive Officer of Dubai Pearl, said in an interview. "They have to lend and, historically, most of this region's lending goes into property." To sustain itself, Dubai Pearl is relying on $1.5bn paid for apartments in advance and another $500 million that has been committed by Al Fahim Group, said Joseph. "We're not expecting to sell substantially in 2010 and 2011," said Joseph. "We are a zero-debt company but we may look into leveraging at a later date," he said. Joseph has a 20 per cent stake in Dubai Pearl, while the rest is owned by a group of investors led by Al Fahim Group, one of Abu Dhabi's wealthiest families. Dubai Pearl is building four 73-storey towers connected by a single roof less than a mile from the emirate's palm-tree shaped man-made islands shaped like palm-trees. The project, which has the same name as the company, will have 20 million square foot of hotel and residential space. MGM Grand, SkyLofts, Bellagio, and Baccarat are among the six hotels that will have 1,400 rooms. The main structure will be surrounded by an artificial beach and low-rise buildings containing malls and theatres. The project is scheduled for completion in 2013. The property crisis prompted Dubai Pearl to review the project and add entertainment and health components to the design, Joseph said. The company also renegotiated terms with buyers, such as longer payment schedules, to reduce the chance of defaults. "In 2010 and until the second half of 2011, I'm not expecting the international markets to be liquid or mortgages to be widely available," he said. "Real estate cycles are usually three years peak-to-peak and the best locations tend to bounce quickly," he said. Dubai Pearl is at the centre of a newly developed part of the city, surrounded by populated areas such as Palm Jumeirah, DMC and DIC, where international media and technology companies are based. The densely populated Dubai Marina is also nearby. The project has the "best location with a captive clientele in a six-mile radius," said Joseph.