Dubai
Don’t go looking for the same private developer names in Dubai’s first freehold development cycle (between 2002-08) and now. You will not find many.
In fact, the overlap could be as little as 8 per cent in the residential freehold space and even further down, at 5 per cent, in commercial. “The remaining companies (92 per cent in residential) were either under capitalised or didn’t see the opportunity to re-enter the market,” states the new GCP-Reidin report. The reduction in the number of private sector players in an emerging market is a natural phenomena as increasing competition forces smaller developers to leave the fray.
“In the second cycle, we can witness that the Top 5 private sector developers launched more than double the units (about 50,000 units) compared to the first cycle. This highlights that this time around the private sector developers are better capitalised to take on large scale projects (as with Damac and Azizi).
“We opine as the Dubai market continues to mature the private sector landscape will be dominated by a few big players. Investor concerns on purchasing private sector stock have clearly abated especially with developers who survived both boom-bust cycles in Dubai.”