United Arab Emirates real estate in the news

The UAE property markets have been in the news for the last year, and much of that news was negative. When the ball dropped in the new year, it seemed to bring a new vitality to Dubai and the rest of the region’s real estate industry. It’s not all good news, of course, but there are initiatives that are believed to be good for the real estate sector and the region, and portend better times to come.

Harmonization of education for best business practices
Dubai Property College has formally joined the Arab Administrative Development Organization (AADO) in a new initiative to spread professional property education and training across the region. Mahmoud El Burai, Head of the College and Director of Real Estate Development at RERA, the Real Estate Regulatory Agency, is quoted as saying: “It lays the groundwork not only for the harmonization of standards and practices, but also for the creation of a real estate block with great appeal and, significantly, credibility to investors from anywhere in the world. The goal is to get professional practice right by ensuring that training is available at a level that is aligned with international best practice.”

Prices fall but activity rises
CB Richard Ellis has issued a report showing that projects suspended in 2009 are being revived, with new contracts being awarded and old projects being completed. With prices already low, this new inventory is expected to drive prices down further. Landlords are using phased rent and other incentives to attract tenants. Although prices and rents have gone down, there is also new investment interest in the area. With prices in some areas more than 50% below their peak, institutional investors are entering the scene, buying in size and quality to increase their holdings.

An increase in mergers and acquisitions is expected
An expected trend in 2010 is increased M&A activity. With over 2,000 brokers listed by the Real Estate Regulatory Authority (RERA), it’s a fragmented market that should result in bigger, stronger companies buying out the smaller entities. Along with mergers and acquisitions, there is also the prediction that activities will begin to shift from development to more project management and restructuring.

All told, the United Arab Emirates looks set to see a return of some of the excitement of the past in real estate development.