Repossessions, late delivery and sell offs still dominate the Dubai property market

The emirate’s beleaguered real estate market is still very much in the doldrums as the end of the first quarter of 2010 looms.
 
One developer, Bonyan International, confirmed that it has re-possessed units in its Gate 2 project in Jumeirah lake Towers. ‘We are ready to help investors, but everyone has to be reasonable and we have had to re-possess some units,’ said Anas Atatreh, vice-chairman.
 
Other developers are understood to be in a similar position. Cayan Development has registered with the Land Department to auction off two office units in its Cayan Business Centre after repossessing them.
 
And South Korea’s Bando Construction said it was also looking to take back properties. Bando, which is developing the U-bora Tower in Business Bay, said about seven investors have not fulfilled their contractual obligations.
 
‘We have approached investors who are in default. Unfortunately, cancellation may be the only way forward in some cases,’ said Ian Powell, business development manager.
 
Emaar Properties, the Middle East and Africa’s biggest developer by assets, which has already put a number of projects on hold has told investors that two Dubai apartment towers due to be completed last month are now at least two years late.
 
The 45 storey buildings, designed by New York based Frank Williams and Partners Architects, are now set to be finished in February 2012, according to letters sent to buyers.
 
Meanwhile Dubai’s Union Properties said it is willing to sell any of its projects if it receives a fair price. The third largest developer in the Gulf Arab emirate has been hit by the global downturn which has sent prices in Dubai’s once booming property sector fall by up to 50% from their peaks in 2008.
 
‘The company’s complete projects have achieved their investment targets. It’s not strange that we offer them to investors for sale particularly as we have giant projects under way,’ explained Khalid bin Kalban.
 
‘Buyers are mainly investment companies and individuals who are looking to buy complete and rented properties with an income of 7 to 8%,’ he added. He explained that funds raised from asset sales will be used to repay financial commitments and finance ongoing property projects.
 
But it is a sign that developers are having to be creative to find finance for future projects in the face of tight lending from the banks.