Dubai Real Estate Boom Fuelled By Returning Assets

by Lorys Charalambous, Tax-News.com, Cyprus

23 March 2005

Chief executive officer of Dubai Holdings, Salman bin Dasmal told the Australian Business Group at a Gulf luncheon last week that $300 billion is estimated to have returned to the region out of around $1 trillion held overseas at the time of 9/11.

Stiffer legislation and disclosure regimes insisted upon by the US in the wake of the terrorist attacks have driven away some investors. Mr bin Dasmal said that most of the money had returned to Saudi Arabia, and from there a lot had found its way into Dubai real estate, as well as regional equity markets.

The Dubai real estate market has certainly been booming in recent years. Mr bin Dasmal said that Dubai had been encouraged by the easy availability of cash to go ahead with its building plans at a faster rate than would have been the case otherwise, giving as an example the giant theme park Dubailand being built outside Dubai; this project has raised $6 billion in one year, which had been its budget for five years.

A number of massive projects are at various stages of development in Dubai, including the gigantic twin island called The Palm, Dubai Marina, Jumeirah Beach Residence, Emirates Hills, Emirates Lakes, further expansion of Dubai airport, Dubai Festival City, Burj Dubai, Dubai Pearl, Dubai Health City, The Business Bay, Dubai International Financial Center and Dubai Metals and Commodities Center.

Hashim Al-Dabal, CEO of Dubai Properties, which recently launched The Business Bay, shed some light on the project in an interview with Arab News, saying: “The Business Bay received tremendous response since the day it was announced by Gen. Sheikh Mohammed ibn Rashid Al-Maktoum, crown prince of Dubai and UAE minister of defense. The response was similar to that received by other large projects such as Jebel Ali Port, Dubai Internet City, Dubai Media City and Dubailand.'

When asked about the size of investments the project will attract, Al-Dabal said, “Although initially, the total investment size was calculated to be worth between AED20 billion and AED30 billion, the actual size may well exceed these numbers going by the response to the first phase. As you know, we received commitments of more than AED4 billion in just a matter of hours from domestic and foreign investors.”

The latest Dubai project to be announced, just this week, is a joint venture between ETA Star and India's Hiranandani Developers to build a 90-storey tower to be known as 23 Marina. Towering to 380 metres over the Dubai Marina, it will have 48 duplex apartments on the top floors. Residents will be able to enjoy a five-star health spa, indoor and outdoor temperature controlled pools, children's pool, bubble bath and spas at three levels.

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