Trump dismisses talk of realty bubble

Dubai: Donald Trump Jr, the son of American real estate tycoon Donald Trump, has dismissed talk of a bubble in Dubai's property market.

Speaking with Gulf News on the sidelines of Dubai's Cityscape property exhibition, Trump said a cyclical lull will hit the market where the velocity of sales drops and weak developers are weeded out.

But he said Dubai's tax free status, its political stability and the freedom given to developers to design innovative projects will sustain investor interest.

"If you say there will be a correction long enough, eventually you'll be right because everything is cyclical. Dubai will never always grow at 25 per cent per year," he said.

"I'm expecting the market to re-centre, which will probably happen in two or three years, but it will affect different properties in different ways."

"The nature of real estate is that people who were able to weather the bad times will always do well."

In Dubai to inspect progress on the Dh2.2 billion Palm Trump International Hotel and Tower (expected to be complete in 2009) on the trunk of Palm Jumeirah, Trump said his family's future investments will be focused on the UAE and Dubai, rather than emerging markets such as Saudi Arabia.

"We don't want to be the first time in. Sometimes you are rewarded with the risk, but normally the second or third one in gets to realise the value that number one created," he said.

Although demand for commercial space in Dubai is growing, Trump said the Trump Organisation will focus on developing residential property.

He refused to give specifics on upcoming Dubai projects, but didn't rule out developing on The World and the second and third Palm islands.

"We're focused on getting our project up and running and making sure that we are delivering on time and catering to our buyers," he said.

"Nakheel (joint venture partners for the Trump Tower Dubai) has talked to us about doing something on the other Palms and The World and once we get our first product underway and in the building phase we will start worrying about other projects."

Trump said he was never concerned about the delays which hit construction of the Palm Jumeirah, stressing that a project which had never been attempted before would always be hit be time issues.

He added that the emirates' freedom to develop innovative real estate projects such as the Palm islands are a major reason that investors will continue to target Dubai rather than established markets were developers are limited by numerous planning restrictions.

"Here you can push the design envelope to new heights. Structural engineering is going to evolve largely on the projects that are happening in Dubai," he said.

"You can't find quality architects elsewhere in the world anymore because they are all working here."