Cityscape Global, the annual real-estate exhibition in Dubai, is seeing a large increase in exhibitors and floor space this year as the emirate’s market recovers.
Developers are gearing up to announce a number of large projects around the show, he says. A lot of the new activity centers around Mohammed bin Rashid City, a huge swath of desert that Dubai’s ruler, Sheikh Mohammed bin Rashid al Maktoum, announced would be developed last November. A joint venture between Dubai’s Meydan Group and India’s Sobha Developers said last week that it would build the world’s largest man-made lagoon there, adding to a list of world-record claims in Dubai that includes the tallest building, tallest hotel and tallest all-residential building. Damac, another Dubai-based developer, recently launched a 28-million-square-foot development in Dubailand, a massive district where construction all but halted during the downturn.
While prices have jumped in the past year, Mr. Molman doesn’t think it’s the seed of another bubble. A new law enacted a couple years back now requires developers to fully own the land upon which they’re building and keep 20% of their construction costs in an escrow account. The move was meant to protect investors after many developers stopped construction when the market took a dive and did not refund investor deposits. Dubai also recently decided to double the cost of registering land transactions from 2% of the price to 4% in order to put a damper on speculation. That higher fee went into effect on Sunday.
“The market has matured to an extent,” Mr. Molman says. “Obviously there are a lot of improvements that still need to be put in place, but the players that are active in the market are professional real estate developers. They’re not the cowboy companies of which we unfortunately had quite a few back in the day, which were able to launch projects without having escrow accounts in place. Technically they could do anything with the money that people would pay down. Now that goes straight into an escrow account.”
Cityscape Global isn’t just about Dubai: the conference was rebranded from Cityscape Dubai in 2010 to reflect what its organizers saw as an increasingly international scope and audience. This year, though, much of the attention is certain to focus on the emirate, given its property market’s rapid rebound. Muted activity elsewhere in the region, especially in countries affected by Arab Spring unrest, also seems likely to refocus the conference on the Gulf in general and Dubai in particular.
There’s plenty of optimism going into the show, Mr. Molman says, but lingering worries such as how regulations can avert another bubble and the growing importance of sustainability in construction are likely to be hot topics.
“It’s a volatile market, and any leading exhibition is a reflection or a barometer of the market, and Cityscape’s no different,” Mr. Molman says. “We’ve gone from great heights back in 2008 to a substantial decline and now gradually it’s been growing again in the past two years.”-Wall Street Journal
