Dubai: The Dubai Land Department Saturday announced that the UAE's leading financial institutions have lined up to join the exclusive list of bankers authorised to offer funding to Tayseer "tier one" rated Dubai real estate projects.
Following a meeting several days ago with 15 financial institutions, the department confirmed an action plan has been agreed which will see the banks formally submit requests for authorisation within 10 days.
The first steps taken to initiate the new law and procedures to move the Tayseer initiative from blueprint to reality are underway.
A team of senior officials of the Land Department, led by Sultan Bin Butti Bin Mejren, Director-General, Juma Bin Humaidan, Deputy Director-General, and Marwan Bin Gulaita, Chief Executive Officer of the Real Estate Regulatory Agency, won unequivocal support for the Tayseer initiative from the chief executives and senior management of the major financial institutions in the emirate. Tayseer, which will effectively act as a ratings agency for Dubai real estate projects, will bring liquidity to the sector, remove a perceived funding bottleneck and, importantly, establish a guaranteed model for completing key projects.
Tayseer-linked projects are expected to attract cheaper money — in the form of project and end-user funding from the banks — in line with their rating, following a direct appeal to the institutions from the director-general.
The meeting completed stage two of the process of rolling out Tayseer following the previous week's presentation to Dubai's leading developers.
Forty projects have been assigned Tayseer tier one ranking in the first phase of the initiative.
Bin Mejren said: "While the final details of the agreement between the department and the bankers will be completed within one month, they already know what they will get from Tayseer. The key offering is a government guarantee, through the Land Department, that Tayseer-qualified projects meet the required criteria to be classified as tier one."
These criteria require that each of the 40 projects given the green light for Tayseer approval — all within the Dubai Marina, Business Bay, and Jumeirah Lake Towers projects — must be 60 per cent completed and sold.
Bin Butti added: "Tayseer offers the financiers precisely what they have been asking for; well-resourced projects that meet strict rigorously enforced criteria, which virtually guarantee they will be finished to a specific schedule.
The due diligence carried out by the Land Department is a condition of Tayseer qualification and once a project is Tayseer classified the bankers and investors know that it is rated first class."
Successive places
The bankers attending the meeting were told that the first 40 Tayseer projects were only the beginning and that successive phases of Tayseer would follow in the next three years, each with a different focus.
Bin Gulaita added: "This initiative will inspire confidence and accelerate the Dubai real estate market's continuing maturity.
"Implementation of Tayseer will effectively drive demand to where it can be met, direct finance to infrastructure development and encourage the influx of new investors we have seen who are here for the long term rather than as speculators. Tayseer is the key which will unlock the future and it is good for the banks because it will ensure their returns are guaranteed," said Bin Mejren.
