The Global Leader in Web-Based Real Estate Software

Cityscape Dubai 2009 Finds Realism

In years past, attending Cityscape Dubai meant you were going to see the biggest and best that the industry had to offer. Budgets were an afterthought, with companies from around the world barring no expense to ensure they had not only a presence, but made an impact at the event.

 

Cityscape Dubai is still largely considered the preeminent B2B real estate event of the year. However, this year uncertainty about the turnout of the event permeated throughout the industry. Yes, it is smaller, that much is obvious upon entering the exhibition center.  And yes, the foot traffic is nowhere near the crowds of past years. The stands are not as many or as big, and the giveaways are less flamboyant and far and few between. However, this is not necessarily a bad thing, it’s simply the reality.

 

For years, Cityscape Dubai resembled a social gathering rather than a showcase for serious professionals to connect and focus on business. That sentiment has changed for Cityscape Dubai 2009. The atmosphere of the event is calmer and geared more towards genuine networking and business connections. The sense is while you may not fill your rolodex with a flood of new business cards,  the ones you are collecting are more meaningful and more qualified.

 

Moreover, the feeling is one of realism, and that the event more accurately reflects the current conditions of the market. The big names are there, but not in the manner that they are accustomed to. It’s truly refreshing though, because one is actually able to approach the executives and staff, and engage in meaningful conversations that render genuine business relationships.

 

So, if you haven’t taken the time to stop by the exhibition, you really should. This year is unlike any in the recent past and more importantly it represents the reality of the industry. No more smoke and mirrors, but rather real professionals doing what they can to improve their businesses. It bodes well for the industry because the participants and visitors alike are actually acknowledging one another in a meaningful way.

 

Don’t forget to stop by our stand in Hall 4, stand 4A40 and tell us what you think about the event, we’d love to hear what your take is.

 

Best Regards,

The Masterkey Team 


Posted: October 6, 2009 06:44 by Masterkey
Posted in  General | Opinion  |  Comments (1)
What caused the Dubai Real Estate market slow down and what can you do about it?

For those who missed the last Dubai Property Society event, you missed a fascinating speech and following debate on the cause and impact of the Financial Sector on the Real Estate industry. I can hardly do credit to Ali Al Shihabi’s understanding and depth of the situation, but I’ve summarized the main points below:

What caused the slow down?

  1. Early 2008 - Talk of revaluation of Dirham vs. US dollar flooded Dubai with money from financial institutions looking to make a quick gain. Local UAE banks in turn provided financing based on these deposits, and when International funds decided to pull out a few months later local banks had their own mini credit crunch.
  2. Mid-Late 2008 - The world banks had the much publicized credit crunch, compounding the already tight situation in Dubai, leaving banks with less deposits than loans.
  3. Late 2008 - Stock markets declined, causing a fall in available funds to individuals and corporations alike.

Combine these three points and we see the financial sector tightening up, making lending prerequisites tougher and dropping the total percentage they will lend to individuals. This in turn makes it harder to purchase property and leaves speculators scrambling to offload their investments.

Are we doomed? No!

  • Look worldwide and look at the UAE, or even the GCC compared to other world markets. The GCC is in the strongest position to ride out the credit crunch wave with a strong surplus of cash left over from the recent spike in oil prices. With these funds the UAE federal government has guaranteed deposits for 3 years in all UAE banks and thus provides a level of comfort for the UAE Banking sector that other markets do not enjoy.
  • Al Shihabi argued that the UAE moved very fast to protect the banks but the recent ’slow down’ is due to communication and that this security has not been communicated as well as is should have been in the media. In comparison, governments elsewhere do not have the massive financial backing that the GCC has, and Al Shihabi believes that the UAE market will recover faster than others.

So what does this mean for projects in the UAE?

  • Real estate projects which have already commenced and which have full commitments from the banking system will continue during this initial drop and the public will eventually see that these projects will continue construction and confidence will grow. There may be some delays, but that will only reduce the potential oversupply and keep prices stable.
  • The so called “paper market” - projects only in the planning stages - will have difficulty getting the financing to fund these new developments, and will be a risk to any investor.

What about Dubai in general?

  • Dubai has a underlying business model that is great and sustainable. It has tourism, it has a thriving business sector, it has a strong world renowned airline and it’s growing. The fundamental problem with Dubai is transparency. In order for the public to feel more secure, reputable data needs to be released in order to inspire confidence. It is better that the bubble burst now and not in 5 years as the market could benefit from more affordable prices. Existing projects will benefit and established real estate brokers will have work hard to stay afloat over the short downturn.
  • Al Shihabi argued that with all things considered this downturn is healthy for the market and it will separate the good from the bad.

So what does this mean for me as a broker/developer?
Get organized, use this time to clean house and find ways to save money. This can be done by reducing overheads, but depending on your business can also mean being more productive with your current staff. Efficiency drives profitability, and focusing on the finer elements of your business can ultimately help save you money.

Of course, Masterkey can save you money as well, so plan now for the Dubai comeback.

Daniel Hart
Director of Business Development
Masterkey
www.gomasterkey.com

More about Mr. Ali Al Shihabi al Shihabi of Rasmala
Mr. al Shihabi established Rasmala Investments in 2002. Prior to that he had been a member of the Board of Directors of the Saudi Hollandi Bank, and Chairman of the Board Management Committee. Mr. al Shihabi is a member of the board of the National Bank of Ras Al Khaimah (RAK Bank). He holds a BA from Princeton University and an MBA from Harvard Business School.


Posted: November 17, 2008 03:05 by Masterkey
Posted in  General | Opinion  |  Comments (0)