United Arab Emirates: Monday, November 29 - 2004

Nakheel highlights benefits of investing in property in Dubai at Cityscape 2004 Conference

Nakheel, the property development company behind some of Dubai's most innovative projects, foresees an attractive return on investment for investors in the property sector in Dubai, as a result of liberalised property ownership laws and the economic diversification policy which spurred economic activities in several sectors including IT, hospitality and tourism.

Commenting on Nakheel's participation at Cityscape 2004, Sultan Ahmed bin Sulayem, Executive Chairman, Nakheel, said: 'Nakheel's participation and sponsorship of events such as Cityscape, forms the part of our strategy to extending support to key conferences and events for the real estate market. For Cityscape 2004, we are showcasing the latest Nakheel offerings that have been conceived and launched since last year.'

Wahid Attalla, Executive Director, Commercial and Operations, Nakheel, said: 'Dubai's lead in allowing foreign investors to own property has marked a real revolution in this sector. Property investment laws in Dubai now link property ownership to visas to the investor and his immediate family, thus removing a major stumbling block in the development of the property sector.'

Attalla said the past few years have seen a dramatic shift in the way the world looks at the GCC, due to a combination of factors, including liberal policies of several governments. The most dramatic development has been the introduction of bold and forward-looking changes by the authorities, aimed at opening up the property sector. In this revolution, Dubai has been a pioneer, as well as a model for other countries in the region.

'The changes in land and property ownership laws have brought international trends into property investment. For example, mortgage rates have declined to as low as 5 per cent, giving a further boost to investment in property, and introducing a culture of sale and resale. Yet another factor that drives the development of the property is the pricing, which makes Dubai a highly attractive investment option for long-term investors,' Attalla added.

'We have full confidence that there is no looking back as far as investment in property is concerned. The investment graph is pointing upward and it is likely to remain in that direction for a long time to come. This is because the real estate sector is driven by Dubai's larger vision of becoming one of the major cities of the world. We can confidently say that investors can look for excellent returns both in the short term and long term.'

The three Palm Islands including The Palm, Deira were showcased at Cityscapes 2004 along with an overview of Nakheel's other diverse projects and its key features that make Nakheel properties an ideal investment choice for investors.

'Innovation in concept, design and execution have been the driving forces behind all Nakheel projects, offering investors and home-seekers a distinguished address and exclusive lifestyles,' said Clive Lowe, Director Operations, Nakheel. 'This unique selling proposition has attracted property investors from all over the region and globe, with some of our properties being sold out in record time, including The Palm Jumeirah and Jumeirah Village.'

Now with the level of investment currently committed to new real estate projects across the Middle East, and most of it from sources that will not dry up the moment oil prices dip, there is absolutely no valid argument that the present real estate could come to an end overnight. Even a regional emergency would spike oil prices, which would hardly be bad news for the flow of money into real estate here.

What looks far more probable is that building will eventually overtake demand, but only sometime after real estate prices have reached a substantially higher level than exists today. Why should a villa in Dubai cost less than one-third of the cost of a house outside London? Disposable income is probably higher in Dubai.

Only when real estate prices in the Middle East start to approximate to average global prices – perhaps Singapore is the benchmark – should investors begin to feel concerned.

In the meantime there is plenty of money for investors, speculators and end-users in this great property boom, although it is heartening to see the Dubai authorities taking effective action to put a cap on the profits of speculators who have ruined many property booms before with excessive greed.

Eventually there will be a position when too much new-build comes into the market at prices that are no longer behind world prices. At that time property owners will have to decide whether to get out quickly, or hold on through a slowdown.

And in property those with a long-term perspective do best in the long run, although this maybe a lesson that has to be learned painfully by some in the region.