Sobha acquires 8 million sq ft plot of Dubai land

India-based Sobha Developers has acquired eight million sq ft of land in Dubai from the Meydan Group for an undisclosed sum.

Sobha Developers said it would use the land to build a mixed-used development, Sobha City. The first project will be announced in the last quarter of 2012, local media reported.

“This is a pivotal step in the overall development of Meydan City,” Saeed H. Al Tayer, chairman of Meydan Group, said. “This investment….is an indication of the international confidence in Dubai and its significant infrastructure,” he added.

The project, adjacent to the Meydan Godolphin Parks, will be completed in eight years, PNC Menon, chairman of the Sobha Group, said.

Total land sale transactions in Dubai reached 2,961 in 2011, valued at AED22bn ($5.9bn) according to the Dubai Land Department.

Property prices in the emirate soared after the city opened its real estate sector to foreign investors in 2002, granting them freehold ownership rights at many developments. Between 2007 and mid-2008 prices in the emirate rallied almost 80 percent, according to Morgan Stanley.

But the market saw the biggest regional collapse in house prices in the wake of the financial crisis, as speculators fled the market and credit lines dried up.

The value of construction projects scrapped or on hold in the UAE soared to $958bn in the 12 months to October, Citi said in December. The Gulf state, which accounts for more than half of the stalled or cancelled projects in the MENA region, saw $20bn worth of developments added to the list over the last year.

More cancellations are likely as the UAE battles a fresh slowdown in infrastructure projects, Citi analysts said in the MENA construction projects tracker report.

“This is 80 percent weighted to delayed projects. Given the slowdown in this market we believe there is further risk of cancellations,” the report said.

Bangalore-based Sobha Developers was founded by PNC Menon, currently ranked as 897th in the Forbes billionaire list and fifth richest Indian in the GCC.