Cityscape Global 2019: UAE property market witnessing upturn due to govt measures: BinGhatti
Dubai-based developer has launched two new residential projects worth a combined $217.5 million this year
The real estate slowdown in the UAE hasn’t fazed Binghatti Developers, the real estate arm of Dubai-based Binghatti Holding, from launching new projects. On Tuesday, the company launched its 600 million UAE dirhams ($163 million) Binghatti Avenue residential tower at the Cityscape Global exhibition in Dubai, which follows the launch of 200 million dirhams ($54.5 million) Binghatti Gateway project during Cityscape Abu Dhabi in April.
In its launch press statement, the company said the 35-storey Binghatti Avenue, located in Dubai’s Al Jaddaf area, will feature 665 units, and is scheduled to handed over in November 2021.
Muhammad BinGhatti, CEO and Head of Architecture at Binghatti Holding said the company expects to receive good response for its other projects including Binghatti Stars and Millennium Binghatti Residences from both investors and end-users during the event.
“We intend on maximising our brand exposure at the Cityscape Global event and giving people an opportunity to understand who we are as a company and what we do differently from other developers in the region,” he said in a pre-launch email interview.
The developer currently has two billion dirhams ($544.5 million) worth of projects under various stages of construction, adding up to a total of 3,000 units and more than four million square feet of development area.
While there has been a marked slowdown in new launches this year, BinGhatti said they are optimistic of market performance as the UAE government has brought out new legislative measures enabling new visa rules to ensure investors have ease in securing residency when acquiring a property.
“We strongly believe that the UAE property market is witnessing a highly positive upturn. Most of the projects launched recently are offering very reasonable pricing and provide buyers with opportunities that were perhaps unavailable earlier,” he said.
Government measures
However, capital values of residential properties across Dubai have seen an overall annual fall of 11 percent, with capital value falling by 31 percent since its peaks in mid-2014, according to ValuStrat’s Dubai real estate review for the third quarter of 2019.
While the Dubai government has announced several measures including the formation of a Higher Committee to fix demand and supply equilibrium, industry experts expect prices to face continued downward pressure even in 2020 as new measures take their own time to bring some positive effects.
The Binghatti CEO said the market’s performance has been improving since the Dubai government is taking several measures aimed at further diversifying the economy and reduce its dependence on the oil economy.
As a matter of fact, he said, more funds are being invested in sectors such as health, energy, tourism and transport, industry and manufacturing, which would surely have a positive impact on the real estate sector and its different segments.
“We anticipate 2020 to emerge positively for the real estate market, as the high influx of foreign trade and investment into Dubai will strengthen the market for real estate developers,” said BinGhatti.
New markets
In this testing time, Binghatti is looking to diversify its source markets beyond the UAE.
“We are eyeing the launch of an office each in Riyadh and Jeddah, with the facilities likely to be staffed by Saudi nationals,” he said.
BinGhatti said there’s a lot of cash in Saudi Arabia and investors are looking for invest-able products. “They are willing to deploy capital, but it is an issue of providing the right product, pitch, and package,” he noted.
The company is also looking to tap into the Chinese market, with the opening of a new office in Honk Kong. “We have a team dedicated to servicing the Chinese investors with our offerings,” he said.
BinGhatti pointed out that the Dubai government has made it easier for Chinese investors to do business within the UAE. “This has evidently enabled the real estate developers to focus on payment plans that are tailored for the Chinese Investor,” he said.
With Expo 2020 is set to take place next year, BinGhatti expects a marginal pickup in economic growth with support coming largely from the construction and real estate sectors.
“We expect the completion of Expo 2020-related infrastructure projects and additional residential housing supply to enter the market from existing projects this year. A boost to tourism and related spending linked to Expo 2020 should drive somewhat stronger growth in 2020,” he concluded.
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