Changing Times for Dubai Developers with Shared Values
2009-12-01 14:38:49 - Dubai has shaken the real estate world twice, on its its way up and on its fast decent downward, however some developers are bucking the trend through shared values.
As the empire of Dubai leaks out less than positive news about the current state of affairs, many property developers are being sent back to the drawing board to re-calculate their assets and liabilities at a new lower value.
Indeed, since November 2008, values in real estate have plummeted, with prices I many areas
at 50% of what they were a year ago today.
According to Michael J. Tolan, Ceo of World Class Group, “The transformation of Dubai will continue”, he says.
“The euphoria pill has worn off, and investors are not banging down doors to invest in the once, seemingly, invincible emirate in the Gulf,especially after the Dubai government has declined to rescue the debt obligations of any private institutions, even its own famous development companies” said Tolan.
World Class Group conducted a series of seminars one year ago in Dubai, urging developers to learn from recessionary times of the past, citing the US market in the early 70’s as a prime example.
Developers in those days had an oversupply of real estate, the economy was in shambles, gas rationing was part of every day life, and the there was no hope in sight. In the middle of this chaos creativity was the final champion, with the introduction of REITs', Shared Ownership, Condo Hotels and rent with option to buy models.
“Dubai could learn a lesson from this very historical and crystallizing moment in the archives of real estate success”, said Tolan.
“Developers who embrace shared ownership now, at today’s values, are certain to win as investors will also be attracted to low entry prices and usage values that some fractional ownership products provide.”
Tolan, who has written a micro eBook, Property Partnerships,soon to be released in February,2010 for consumers to better understand the value proposition of Fractional Ownership, sees Dubai, Sharm El Sheikh, Thailand and Cyprus as new potential hubs for hybrid products based on the same principal.
Tolan says, “Why invest 100% of capital to use an asset 10% of the time, when you can invest only 10% of the capital and use it 100% to the maximum.”
A unique developers symposium on the subject is scheduled in London on December 8th, featuring experts from the Registry Collection, and sales and marketing professionals. Dubbed ‘The Forum’, the shared ownership industry will provide a think tank for developers seeking alternative methods of attracting new investors.
“The real estate industry has opened its arms to Fractional Ownership models, and now developers from Dubai, Thailand, USA, Italy and Egypt are assembling in London to understand the three dimensional aspects of this new tool” said Tolan.
"Dubai developers would do well to get innovative and proactive now through embracing the transformation and working with the pioneers of these proven concepts" he added.
