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Economy to triple by 2015

The Dubai Government set itself aggressive economic targets after exceeding all its earlier plans.

Under the Dubai Strategic Plan 2007-2015 unveiled yesterday, the emirate will aim for an 11 per cent growth target for each of the next eight years and take the gross domestic product to $108 billion (Dh396.6bn), nearly triple that of the $37bn (Dh135.9bn) achieved in 2005.

His Highness Sheikh Mohammed bin Rashid Al Maktoum,Vice-President and Prime Minister of the UAE and Ruler of Dubai, outlined the master plan yesterday in the presence of government officials, prominent businessmen and members of the private sector.

“We have come a long way towards achieving the objectives of the vision,” said Sheikh Mohammed of the first strategic plan, which focused on the years 2000 to 2010.

“Indeed we have exceeded all expectations and predictions. When I announced my vision for Dubai in the year 2000, I spoke of economic aims for the year 2010. In fact, not only have these aims been realised, but they have been exceeded in half the time.” The new strategic plan aims to raise GDP per capita to $44,000 (Dh161,600) by 2015 from $31,000 (Dh113,900) in 2005.

“The non-oil sector contribution to the GDP is now 97 per cent, compared to 90 per cent in 2000,” Sheikh Mohammed said.

The strategic plan focuses on six key pillars that will fuel the emirate’s future growth. These include tourism, trade, professional services, financial services, transportation and construction.

These sectors will be supported by some key “strategic thrusts”, including international standard laws and regulations, cost of doing business and living, quality of life and human capital, which will ensure that each of the chosen sectors achieve their aims.

The massive economic march will mean that Dubai will need an additional 882,000 individuals to join its workforce by 2015, bringing total employment to 1.73 million “with a significant move towards higher skilled employment”.

Sunland pays $107m for beach site


08Feb07

THE Sunland Group has continued its push into Dubai with the $107 million purchase of a giant beachfront development site in an area earmarked as the city's future central business district.

The Gold Coast property giant is teaming up with government-owned property company Nakheel to develop an $860 million mixed-use project on the site in the upmarket Palm Jebel Ali precinct.

The twin-tower development will comprise 300 luxury apartments, 330 serviced units, 10,000sqm of retail space and 10,500sqm of office space.

Sunland has paid a $10.5 million deposit for the site, with a further $16.2 million to be paid once the contract has settled.

The company said the remainder will be paid over two years in six-monthly instalments.

Sunland managing director Sahba Abedian said the company was still to firm up final designs for the project, construction of which is set to start in March next year.

The development will be completed in 2011, bringing on stream Sunland's third Dubai project in the space of three years.

Its Dubai Palazzo Versace is set for a 2009 finish and the Q1's sister tower, D1, is to be completed in 2010.

Mr Abedian said a slowdown in the Australian high rise sector and the strength of the Dubai market had encouraged the company to take a bigger plunge in the emirate.

He disagreed the company was taking on a heavy workload, with the latest deal boosting Sunland's development pipeline to $2.5 billion.

The company is also project manager for Emirates Sunland's $4 billion mixed-use project at White Bay in Umm Al Quwain.

"There is a very strong line of opportunities emerging in that region and we can't afford to ignore them," said Mr Abedian yesterday.

"We believe our current strategy of balancing our portfolio between Australia and the United Arab Emirates will underpin the strength of the future income of the group."

Palm Jebel Ali is located adjacent to the UAE capital Abu Dhabi and is the site of a major shipping terminal in one of the world's busiest ports.

Also under way in the area is the construction of a new international airport that will be twice the size of Dubai's existing terminal.

Mr Abedian said there is a growing consensus that Palm Jebel Ali will become the new city hub for Dubai due to its proximity to these facilities.

News of the latest deal helped lift Sunland's shares to a record high of $4.10 yesterday, after they cracked $4 for the first time this week.

The shares finished the day's trading 1c lower at $4.

Project delays to avert oversupply
15 February 2007

DUBAI — With at least 50 per cent of the ongoing residential projects expected to be delayed by up to two years beyond their scheduled completion in 2008, there will be little room for oversupply in Dubai's property sector over the next five years, according to leading market analysts.

Dismissing the current over supply projections on Dubai's property sector, RichVille Advisory Group yesterday said there will be an additional demand on residential units by around 480,000 as Dubai's population is poised to grow to 2.5 million by 2010. While the expected projects scheduled for completion by 2010 do not exceed 500,000 residential units and since most of these would not be completed by 2008 as scheduled, there will be no room for oversupply and a price drop, it said.

"We do not expect most of the developments to be actually completed by 2008 as scheduled, given the construction progress of these projects, the difficulty of finding good contractors, as well as the cash flow management from the developers," it said while giving much brighter outlook for the real estate market. "While we agree with the experts’ interpretation of the available statistics which suggesting some sort of correction or softening in certain real estate segments, we believe that there are several measures and factors that can offset any risk of a market downturn," RichVille report said.

"Our expectation is that the population will actually double over the coming five years, especially once all the 'specialised free zones' are completed by 2008/ 2009. Furthermore, the population mix will also shift to more high and mid-high income professionals, when in the past the majority was mid-low and low-income professionals as well as many labourers," the report said.

According to Tariq Ramadan, chairman and CEO of RichVille, the current over supply projections are mostly limited to high-end properties and does not take into consideration the fact that almost 50 per cent of the demand on such high-end units actually comes from second homebuyers (not investors) from Saudi Arabia, Kuwait, Abu Dhabi, Northern Emirates, as well as Qatar. "More Europeans also started to buy second homes in Dubai. These buyers create a significant demand on such units, way beyond population growth rates."

"Current return on investment in the residential market is above 12 per cent. In addition, there is a price appreciation of around 20 to 30 per cent as projects are completed. As long-term returns, these are considered significantly higher than international rates. As explained above, we do not expect a significant gap between supply and demand over the coming five years, however, should there be any over supply for certain periods, we expect that returns will always be attractive and above international standards, at least for the foreseeable future," the company said.

The report noted that most historic sales were driven by speculators who drove the "quick" sales of several projects. "However, with the increased construction cost and prices, this target segment is disappearing. This makes of the market more of a real one, based on end-buyers as well as long-term investors. In other words, demand form the "true" buyer of projects has not declined, but actually is increasing especially since many projects are getting close to completion."

According to the report, Dubai's office market is currently offering one of the highest returns worldwide, while prices are considerably below international average.

The current return on offices exceeds 20 per cent, and it is expected to increase over the coming two years.

"The current office space available in Dubai is around 12 million sq m, and is expected to increase to over 30 million sq m over the coming five years. Current occupancy rates are around 99 per cent and are expected to maintain their position for at least the next two years. With the significantly increasing current demand, office rents are also expected to increase by 30 per cent to 40 per cent over the coming two years."

However, the report noted that in the unlikely case that demand does not keep up with supply over the coming five years, occupancy rates will not go under 75 per cent, which is higher than market averages around the world. "Furthermore, return on office rental income will likely continue to be higher than current rates and significantly above international averages."

Grounds at JBR (Jumeirah Beach Residence) comming on nicely. August 07 should be the completion date of the first towers.

 

Marina Shopping Mall starting to take shape

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Continues in Part 2.....

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