International real estate companies are using their own equity and sales revenues to fund their projects with plans to launch alternative funding vehicles such as real estate funds.
Emirates Business spoke to Kuwait-based Al Mazaya Holding Executive Vice-President Salwa Malhas; India’s Sheth Estate International Chief Executive and Managing Director Ashwin Sheth; Saudi Arabia’s Tanmiyat Group Executive Director Rasim Kaan Aytogu; South Korea’s Sungwon Middle East Vice-President Richard Lee; Ireland’s CHI Development Chief Executive Roger Wakeham and Pakistan’s Rufi Real Estate & Construction Director Mehrooz Manzoor Rufi, who said were optimistic about the market but said tight liquidity conditions and exit of speculators were slowing down the realty sector.
Are you revisiting strategies with respect to your development portfolio in the UAE?
MALHAS: We have three categories of projects: One that are nearing completion; second that are mid-way into construction and finally projects that are in the design stage. We are totally committed to completing our on-going projects. We have funds in place and we have done feasibility studies on our design-stage projects. We are very optimistic about the Dubai realty sector. In all we have nine plots in Dubai that are yet to be developed. With respect to revisiting our strategies, we cannot ignore what is happening in the market. The units that we have not been able to sell, we are reworking our feasibility studies on those and will put a number of those units into our leasing portfolio.
AYTOGU: Well, the global financial crisis is making everyone in every sector re-examine the plans that they had in place before it hit, which is not necessarily a bad thing. Essentially, the economic slowdown will encourage greater caution in certain areas, which will benefit investors in the long run. So although we are expecting a quieter period as investors and buyers re-evaluate, we are confident that this will not last long and that we will be able to go ahead with our expansion and development plans, albeit at a somewhat reduced pace. In the meantime, amidst the current economic doom and gloom, there is a silver lining of positive opportunities for developers to press ahead with implementing restructuring and, hence, improvements to ensure better corporate governance and operational efficiency are in place in the medium and long term to take advantage of the next real estate cycle. read more
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. A mortgage loan is a secured loan in which the collateral is property, such as a home.
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