Dubai: The Dubai Land Department Wednesday introduced a financing initiative called "Tayseer" to stimulate real estate funding for 40 selected developments in the emirate.
The government guaranteed fund has been designed to fund completion of shortlisted developments "effectively".
Details of Tayseer were revealed during a meeting with key developers in the offices of the Dubai property sector's registrar and regulator, in the presence of Marwan Bin Galita, CEO of the Real Estate Regulatory Agency (Rera), and senior officials of the department.
Sultan Bin Butti Bin Mejren, Director General of the Land Department, said that Tayseer introduces a four way partnership between the Dubai Government through the Land Department, the UAE's leading banks, developers and investors in the sector.
"This will offer clear transparency and in doing so, inspire confidence among developers, end users and all those with an interest in Dubai's property sector," Bin Mejren said.
"It is linked with a clear commitment to manage supply and the overall quality of Dubai's property stock and urban planned space through infrastructure development."
Once a project has been examined and found to be qualified for Tayseer, it's approved and receives the Tayseer trademark, it immediately enjoys the status of having a Government guarantee that it will be completed and by a specific date.
"This is what the banks have been looking for in order to participate and we clear commitments from a group of banks to participate and offer both construction and end user funding," Bin Mejren added.
The focus of the first phase of this initiative is those projects which are under construction or almost finished, almost 30 per cent of the total. These are projects in developments such as Business Bay, Dubai Marina and Jumeirah Lake Towers, areas with good infrastructure either already in place or being developed. However, no list of projects has been issued at the time of going to print.
Bin Galita added that all supported projects have been scrutinised, approved and guaranteed by the Land Department, and stringent due diligence has been carried out to ensure they meet the criteria for eligibility.
These criteria require that adequate infrastructure is planned or in place, that the trust account is properly managed and financial reporting is full and timely. The technical report must show that a minimum of 60 per cent of construction is completed and that at least 60 per cent of the project is sold.
Blair Hagkull, Chairman of real estate firm Jones Lang LaSalle in the Middle East, welcomed the announcement by the Land Department.
"This is a very important development for the real estate sector in Dubai under the auspices of the Land Department. The opportunity to finish those high profile projects that are in various stages of completion is central to the positive evolution of the overall industry," Hagkull told Gulf News.
"It is a statement that can contribute to rebuilding the confidence in the sector as the absence of finance has been identified as a major drawback by many."
Khalid Al Mutaiwe'e of the Land Department has been appointed to head the team which will manage a dedicated Tayseer section.