Business | Property
Industrial and commercial sectors in Dubai to receive a boost
Land decree in Dubai poised to spur foreign investment, developers say
- By Nadia Saleem, Staff Reporter
- Published: 00:00 March 17, 2010
- Image Credit: Gulf News archive
- Clockwise from top-right: Gangaramani J.R., Mohammad Sultan Al Thani and Mohammad Al Asoomi.
Dubai: Commercial and industrial sectors in Dubai will experience increased activity after the government allowed free ownership of land for UAE nationals.
The decree, which applies only to UAE nationals, allows those who have received grants to register their property after making a payment of 30 per cent of the land's market value. Following the payment, owners can exercise complete legal rights, the government said on Monday.
Previously, landowners had to comply with restrictions that applied to land transfers. Additionally, they had to use the land for a specific purpose after government approval.
The new mandate will allow holders to use the land for all types of commercial activity.
It will also free them to bring in foreign investment and jointly own the land.
"It's a good initiative to encourage people to have commercial and industrial land so they can utilise it in a much better way," Mohammad Sultan Thani, assistant director-general of the Land Department, told to Gulf News. He said the decree comes at an opportune time for those who want to own land under the title deed.
Thani said the value of the land will be assessed by the Land Department on a case-to-case basis and will not include any construction on it.
The Land Department that overlooks all affairs related to land and private properties will register the commercial and industrial plots under free ownership and set regulations to safeguard property rights.
Meanwhile, foreign direct investment will also be stimulated as commercial property ownership laws ease.
"Many times foreign investors would like to invest in Dubai but they can't obtain commercial licences. Now even foreign companies can buy industrial plots in joint-ventures and cooperation with UAE nationals," said Mohammad Al Asoomi, a UAE economist.
Inspirational
Developers believe the law will raise commercial and industrial competitiveness, as free ownership will result in lower rents.
"In the current revival of the market, there is money but also fear. The decree is inspirational for businesspeople. If they start building the industry, we will have more employment," said J.R. Gangaramani, president and executive chairman of the Al Fara'a Integrated Construction Group.
He said that if the ownership was opened up to expatriates as well, though under limitations such as a condition to develop land within a year, it would stimulate cash flow, create employment and spur economic development.
Noura Yassin, head of Valuations at CB Richard Ellis, a research and consultancy firm, said the new mandate would generate land transactions that would help the market.
"The commercial plots in Dubai's industrial areas are limited. This will help to improve the value of the property from trading."
She said that UAE nationals would benefit greatly as they are required to pay only 30 per cent of the land's market value. The decree would also stimulate the industrial sector's development as owners could get credit based on the property.
Re-vitalising the market
"The decree comes as further proof of the Dubai government's strong commitment to re-vitalising the local property market in the face of ongoing financial pressures," said Matthew Green, head of Research and Consultancy at CB Richard Ellis.
"Significantly the new law could also help to open up the industrial sector, which could be of far greater benefit to the diversification of the emirate's economy than the expansion of the residential market that has been apparent in recent years," he added.
"Industrial and commercial development around the world helps provide a foundation for long-term job creation and economic diversification. It can have a similar positive impact in Dubai and throughout the Gulf ..." said Blair Hagkull, managing director of Jones Lang LaSalle, an industry research firm.
— With inputs from Aya Lowe, Staff Reporter
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