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Funds turn to Dubai as property rush subsides |
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8/19/2006 9:41:51 AM |
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DUBAI - Property funds see growing opportunities in Dubai as the speculative rush in the emirate's property sector subsides and new supply begins to stabilise the market.
Funds had difficulty accessing suitable properties in Dubai when the boom kicked off four years ago because developers would immediately sell individual unit or whole floors off plan to speculators to earn a quick return.
Funds, which prefer to buy entire buildings, have benefited as the market cools and more developers wait to sell completed developments to funds.
"That's where the market is starting to evolve slowly," Tim Rose, senior real estate fund manager at Emirates Bank, told Reuters in an interview this week. "Developers are seeing the opportunity in being able to hold on to a property and sell it to a fund which is looking for a steady cash flow from rental income."
Funds have also benefited from new laws clarifying foreign ownership and allowing collective investment.
Dubai, one of the seven emirates in the UAE federation, kicked off a regional property boom four years ago by allowing foreign investment in real estate. But until this year foreign investors had no clear legal title.
As the property market slows, Dubai is also looking to attract institutional investment. The emirate has approved rules allowing real estate investment trusts (REITS) and is amending laws to give foreigners limited freehold ownership and formal 99-year leases. |
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