Cityscape defies real estate fears

DUBAI // They came in their thousands and queued for hours for a parking space, but they would not have missed it for the world. Despite concerns triggered by the international credit crisis, traffic backed up for kilometres yesterday as drivers battled for hours to reach the Dubai International Exhibition Centre, home to Cityscape, the international property investment and development show. On day one of what is being billed as the world's biggest and most successful business-to-business property industry showcase, all roads in Dubai seemed to lead to Cityscape, with tailbacks snaking through the city and the streets surrounding the World Trade Centre reduced to gridlock.

Even the centre's four free car parks and two paid-for multi-storey car parks were unable to accommodate the volume of traffic, and many of the thousands of show-goers sat outside in their vehicles for more than two hours waiting to park. Some were unable to get through the doors until the afternoon. Among them was Hesham Mohamed, 39, a computer sales manager who was hoping to invest in property and queued for three hours for a parking space. Not that he was complaining. It was not, he admitted, "the best way to spend a few hours, but this is Cityscape. It is a must for anyone who wants to buy or sell property and I would not miss it for the world. I will just have to ride it out, however long it takes."

It was the same perspective from the other side of the exhibition stands. "For Cityscape it is worth it," said Isaac Moun, 27, a supervisor for Emirates Investments, a property firm. "I have to man my company's stand and last year we made millions from this event." Billed primarily as a business-to-business event, more than 1,000 exhibitors are at the show, but it was clear that of the first of the 60,000 visitors expected over the four days of Cityscape, many were private investors.

Amish Gupta, an investment banker based in Kenya who already owns property in Dubai, had travelled to Cityscape to look at some of the new developments. "I'm looking at properties in the mid-market sector, perhaps a studio priced below Dh1 million [US$272,300]," he said. There was, he said, "more caution this time compared to two years ago, which is why I'm sceptical about buying in the luxury market. If there is a correction, the high end will be hardest hit, but there seems to still be real demand for mid-range property. But the event is busy and it appears to be business as usual."

Shan Qureshi, a real estate broker, investor and mortgage specialist from the US, said he had taken one overwhelming impression from day one of the show: a sense of "cautious optimism". He was in town to gauge the mood in the market because he was thinking of buying and was keen to assess the reaction here to the credit crisis sweeping the US and Europe. "There are few other markets in the world that are as bullish at the moment about property as here," he said. "There is a feeling of hope that the rest of the world doesn't seem to have."

He did have some reservations - he was concerned that, as a knock-on from the credit crunch, there would be less money available to property buyers in the UAE. On the other hand, he felt that banks here now had an opportunity to learn a lesson from the rest of the world about the scale of the loans it was appropriate to offer borrowers. "I think that potentially it looks fantastic," said Nigel Clark, a property investor from Somerset in the UK. "It is very exciting here. It couldn't be more different from the UK market."

His only reservation was whether or not there was a bubble: "I would like to buy here but the prices are quite expensive." There were none of the Wild West scenes witnessed at Cityscape Abu Dhabi in May, when investors jostled one another at the National Exhibition Centre in a scramble to get their names down for properties, in many cases in the hope of making a quick profit by selling that same day.

One of the stands that had been mobbed by hundreds in Abu Dhabi was Aldar's, and the company had decided not to allow any sales or reservations at Cityscape Dubai. "It's much more relaxed for us; we're happy with our decision," said Ousama Ghannoum, Aldar's media and marketing director. "It allows us to talk and do deals with the architects, the contractors, the suppliers and the institutional investors in greater calmness and serenity, which is what Cityscape is supposed to be about."

Nevertheless, "we've certainly had a lot of people asking if we're selling or taking bookings. And there are a lot of questions about access to finance and whether there will be a correction in the market." Those companies that did set up shop, however, were pleasantly surprised. Among them was Sorouh Real Estate of Abu Dhabi, developer of The Arc on Reem Island, which will consist of more than 700 units, including studios and one- and two-bedroom apartments, due for completion at the end of 2012. It is selling 250 apartments at Cityscape and, by 4pm on the first day, had taken reservations for 150 of them, with a total value of Dh200m, at Dh2,565 per square foot.

"We tempered our expectations before the event but our quiet confidence has paid off," said Gurjit Singh, the company's chief property development officer. For Andrew Chambers, the British managing director of Asteco, a property services company that specialises in rentals, sales and property management, there was an undeniable feeling "of enthusiasm, of effervescence". "The numbers seem to be up today compared with the first day last year," he said, adding that the company had taken a lot of expressions of interest already. "Our number is up on last year."

Far from being dragged down by falling stock markets and property weaknesses in the US and the UK, the UAE could benefit from the gloomy global picture. "People are selling stocks and property is the alternative," he said. "It's a safe haven." And while the rest of the world is reining in plans for expansion, the sheer volume and ambition of the imaginative developments being spawned in the UAE appear to have imbued the local property market with a momentum all its own.

"People who would have invested in other markets have seen dramatic decline," said Elaine Jones, chief executive of Asteco, "but we still have huge development plans ahead of us, so the Emirates is a bit special." Soheil Abedian, the founder of Sunland Group, the developer behind the Palazzo Versace hotel and the QI residential tower, used the exhibition to unveil his latest creation, the 68-storey, Dh6 billion glass Atrium on the waterfront at Jebel Ali.

Within 24 hours of the launch of the property, on the eve of Cityscape, buyers had already committed Dh400m to the project, in which prices for the 1,047 apartments range from Dh2.3m for studios to Dh70m for a five-bedroom penthouse, which has already attracted interest from a Russian businessman. Building will start next year and the project is due to be completed in 2013. "After what happened in the US, Europe and Australia, it would have been naive for any developers to believe they would be immune from the global crisis," said Mr Abedian.

"We thought the market reaction would be much slower by far, but the fundamentals of the economy and the region are based on liquidity and natural resources, which are very different from America's economy, which is built on borrowing. "We have had people committing to the project from countries all over the world. They are not coming from climates economically affected, they are from emerging economies such as Russia, Iran and India, which account for 80 per cent of the interest so far."

rditcham@thenational.ae tyaqoob@thenational.ae