Dubai Cityscape few Visitors – no deals – what a difference a year makes
Posted by 7starsdubai on October 8, 2009
original source Wall Street Journal
On the eve of last year’s Cityscape, Dubai’s annual real-estate trade show, Nakheel unveiled plans to build a one kilometer-high skyscraper at a glitzy event with guests including actors Catherine Zeta-Jones and husband Michael Douglas.
This year, the government-owned developer made a much more modest appearance, displaying just two of its $80 billion worth of projects at the four-day event, which closes Thursday. Plans for its Nakheel Harbour and Tower development are now on hold.
Since Cityscape 2008, Dubai’s property bubble has dramatically burst. Home prices have slumped up to 50% from peaks, lending has slowed and by some estimates close to $300 billion worth of construction is either delayed or canceled.
Many were hoping that this year’s Cityscape, usually a barometer of sentiment for Dubai’s real-estate sector, would kick-start activity in the emirate’s stalled property market, but the lackluster mood in the exhibition halls suggests otherwise.
Organizers say visitor numbers have fallen about 50% to 38,000 from a year ago. Those who are attending are there mainly out of curiosity rather than serious plans to invest in property.
“I’m here to test the market,” said one visitor from Saudi Arabia with property investments in Dubai. “There are no new opportunities, but its reassuring to see that there are projects underway. That means there’s still money flow here.”
With just one project launch at this year’s show – a $100 million development in the Kurdish region of Iraq by New Zealand-based developer Atconz Real Estate Development, developers say they are focusing more on project completion and the retention of existing customers.
“2009 is the year of the customer, rather than new projects,” said Markus Giebel, chief executive of Dubai’s second-largest developer Deyaar.
It’s a far cry from last year’s event when men dressed as Zulu warriors alternately danced and lounged next to a sprawling scale model of AmaZulu World, a development slated for South Africa, by Ruwaad, a U.A.E.-based company.
During the boom times, some developers spent up to $3 million on exhibition models, entertainers and glamorous promotion girls, according to Donald Trump Junior, executive vice president of the Trump Organization.
“Some people had taken it too far,” said Trump. “They lost touch with reality.”
In December, plans for a $790 million Trump Tower on Nakheel’s Palm Jumeirah were suspended. Trump Jr said earlier this week that the project might be restarted in the next two years.
“I’d love it to happen in the next two years, but it won’t be any time soon,” he said.
One of the highlights of last year’s event was the launch of Meraas Development’s $95 billion project called Jumeirah Gardens. The sprawling scale model drew in crowds of visitors. This year, although Meraas’ model is on display, the crowds are smaller and the Dubai government-backed real-estate developer admits it is scaling down its plans.
“We looked at the market, the investors, the changing real-estate scenario,” said Sina Al Kazim, chief business development officer.
Despite the gloom, there are some murmurings of recovery, or at least the market having hit the bottom.
“Perhaps what we’re seeing is a new realism, a reality check,” said Blair Hagkull, regional managing director of real estate consultancy Jones Lang LaSalle. “2009 has been the year of contraction. 2010 will see the ushering in of a new era of stability.”
By Stefania Bianchi, Dow Jones Newswires; +971 4 3644967; email@example.com
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