By Andrew White
Deyaar CEO says fundamentals still strong; firm has $27m in accounts payable to contractors.
The head of Dubai’s second-largest developer, Deyaar, has claimed that the real estate market will post a recovery in 2011, the third year after its initial crash.
“My personal belief is that Dubai has reached the bottom,” Deyaar CEO Markus Giebel told reporters at a roundtable in Dubai on Monday. “I cannot tell you whether the market will oscillate five percent up or down this year, but I can tell you that it won’t go 20 percent up or down.
“In my personal opinion Dubai will see a recovery in year three, by which I mean 2011.”
The Deyaar executive said that Dubai’s fundamentals were still strong and observers, particularly the media, had underestimated the emirate’s strength.
“If you believe in Dubai, you should believe in Dubai’s real estate sector. Because if Dubai is healthy, then the real estate sector will be as well,” Giebel added.
The Deyaar CEO indicated that 2010 would be “the year of the contractor” and insisted that the firm had less than AED100m ($27m) in accounts payable to contractors.
Giebel revealed that the firm had instigated a full review of all its contractors and is in the process of issuing its ten of its biggest partners with transparent payment plans that would be “completed and signed within the next two or three weeks”.
“Your contractors don’t want the money right now,” he claimed. “If you talk to these people, they are just asking for clarity or a payment plan. It’s most important to talk to these people and then commit to, and execute, a payment plan.”
If "Fundamentals" = supply and demand then they are not strong. 10,000's of units are coming online next year will he "personally" take them from the market to create strong "fundamentals"?
Mr. CEO of Deyar kindly please learn lesson from what has happened in Dubai and how thousands of jobs were lost during the past 1 year and 4 months. We all know how much debt is there on Dubai World so request you to please stop this artificial push up of real estate market and be reasonable otherwise we might see rehersal of 2009.
We all know more supply is coming to the market and there will further distress sales and no investor to purchase
One of the most important factors that would determine the success in the U.A.E Real Estate Market would be to ensure that expats feel secure in buying property in the U.A.E I know of a few people who would have wanted to invest in Real Estate but are reluctant to do so because of lack of properly defined Laws that would safe guard the Rights of surviving family members should there be a demise in the family. i.e. in terms of residence visas, bank accounts, distribution of assets and inheritance. â€œA Will or Testamentâ€ should be recognized by international standards. Right now, there are no clear or defined laws for expats, as to who benefits in case of the demise of a family member, and even it does exists it is not according to International standards. Not many people want the hassle of going to court and fighting it out for years for something that should rightly be theirs in the first place. â€œWills & Testamentsâ€ must be given precedence when it comes to Real Estate laws in the country and should meet with international standard practices, that is one way to ensure that the Real Estate Market improves since the majority population consists of expats.
This whole article revolves around the 'fundamentals' being in place for a Real Estate recovery in 2011...yet NOT one fundamental is mentioned. How very convenient to sight that fundamentals are in place and then to not actually mention any of them to back up your statements. If DW defaults (we may as well say Dubai because thats what the money markets see DW as), Portugal, Ireland, Italy, Greece or Spain then there is NO WAY a recovery can come into effect in 2011. Greece is teetering on the brink of default and so are the other nations mentioned. The Banksters, if you have been reading the news, have leant money to these nations 'off balance sheet' so they could hide their debt levels to gain entry to the Euro Currency and EU as a whole. They all lied about their debt levels and now its all coming home to roost because they can not service the debt they took on. They all mortgaged their future income to pay for 'todays/yesteryears' growth. All this has a direct effect on the Dubai and UAE Real Estate industry...because its all about money. If there's no money to be borrowed or no money to be earned to replace that what is spent/has been spent, people/companies will save and cut costs further to survive. I sometimes wonder whether these Real Estate people actually have any understanding of basic economics or can actually understand what has happened in the last 2yrs of credit squeezing with the knock on effect to every industry and what lead us to where we are today. The mind boggles when you see CEO's churning out these rediculous statements...and these are the people who are supposed to know whats going on and are supposed to lead us out of the credit crisis!
There is always a bottom and then a recovery. My view is Dubai has all the necessary elements for success driven by a visionary leader His Highness Sheikh Mohammed. Dubai has demonstrated its capability in the past & history will repeat itself. Dubai will bounce back with greater resillience. We are all stakeholders in Dubai's success. If we live in Dubai we must have faith in the leadership & support its recovery . If we do not believe in Dubai , Its Capability & recovery ....we are in the wrong place. History will repeat itself, Dubai / UAE will recover from strength to strength to greater heights.
Thats exactly what he said last year. And then they planned the $500MM 'Distress Asset Fund', which didnt fly for obvious reasons. If I remember correctly Deyaar called off that plan just 2-3 months ago on account of its failure. Now the question is - if he truly believes that the market has reached bottom (finally!!), shouldnt they have stuck to the distress asset fund plan? For someone who cant make head or tail of basic 'fundamentals' of markets, he sure is highly overpaid as CEO of Deyaar. Thats where my money is being spent, I say!
where;s the property visa ?
if we just go back to the headlines in recent business news the view of Dayer s chief does not make any sense it seems he is trying to artificialy paint a rosy picture of the real estate mkt.thousands of trade licenses have not be renewed,there is fall in white collar recruitment which means no new companies or offices are opening,investors complaining about their capital stuck in defunct projects which may not even commence or finish,in such a scenrio which sensible investor would be expected to invest.investors either invest for reasonable rent returns or for occupying the property themselves but with residence permit not being available for a long period the real estate mkt will dry up and the postion will weaken further.
This is the start of a major deep depression. The mistakes, debts & gambles of the property circus need to be paid down or defaulted on. My guess is that most of the property in Dubai will fall much further in value due to poor quality and dire maintenance. The bubble is still leaking and will probably take up to a decade to fully deflate. Don't listen to these jokers who were a major part of the circus back in the day!