Cityscape takes on global proportions

It lived up to expectations, year after year, being the launchpad of multi-million dollar deals. Cityscape Dubai, the premier real estate event in the region, over a period of time came to epitomise Dubai's fast-track development model. Today, with the tide ebbing and new launches becoming a distant memory, the event has repositioned itself on a new standpoint to suit the requirements of the current property market. It has, however, retained its status as a networking platform and a barometer for investor sentiment.

Renamed ‘Cityscape Global', the exhibition will now better represent the diverse geographical profiles of exhibitors and participants, claim organisers. "Cityscape Dubai has changed in terms of the profile of exhibitors we attract. For example, in Cityscape Abu Dhabi, 90 per cent of our exhibitors are locally-based. But, in Cityscape Dubai, while 50 to 60 per cent of our exhibitors are locally-based, the rest are international. If we call it Cityscape Dubai, our international exhibitors and participants who want due representation may feel excluded. Besides we're talking about real estate in emerging markets from a global perspective. We believe it's a natural evolution of the event. We will always continue to hold the event in Dubai as it has the infrastructure to support a global event and host the quantity of international visitors that we get," explains Chris Speller, group director, Cityscape.

Speller, however, denies that Dubai's beleaguered property market was the trigger for the rebranding.

"Our focus for the show is still very much about Dubai and what's happening here. The name now, however, gives a true reflection of what the event is about. For instance, in the capital, the exhibition will always be referred to as ‘Cityscape Abu Dhabi' since it is an international event but focused on what is happening in the emirate."

This essentially means that the event takes on a wider meaning in terms of its target audience. No more is it an event associated with local real estate activity, especially considering that it has made a mark for itself in the global market and attracts interest from global players. "The re-branding initiative is a natural evolvement aimed at expanding the target audience base that the exhibition aims to address and attract. The name change represents a change in focus. The exhibition will still take place in Dubai, which means it will be associated with the emirate but it will now cater to global rather than only local audiences and affairs," says Mohanad Alwadiya, managing director, Harbor Real Estate.

Tapping opportunities

As global recovery gathers momentum, competition is intensifying to grab a lion's share of the world's capital. Global players would be keen to tap opportunities especially in the wake of experts predicting a square root-shaped recovery for the world economy. "Exhibitors will have to adapt to the new market reality and portray a positive image that positions them as strong contenders that offer lucrative opportunities for capital growth. The pace of Dubai's recovery will be largely determined by how well it is positioned, packaged and marketed to the world at large as a place to do business, set up home or visit. The rejuvenation of ‘Brand Dubai' is critical," Alwadiya suggests.

By rebranding the event and pegging it on global levels, the organisers will be looking to position Dubai as a regional hub for real estate investment. This makes sense and fits in perfectly with Dubai's ambitious plans to take full advantage of its geographical position and emerge as a central point of business activity. "An international perspective on real estate fits well with Dubai's existing investors since expatriate owner occupiers and international investors constitute the majority of demand for investment zone projects in places like Dubai," reckons Jesse Downs, director of research and advisory, Landmark Advisory.

New strongholds

Much focus is on the emerging Asian strongholds where recessionary trends did not make much headway. The repositioning is expected to help tap into this investment potential in a big way. "Obviously, the event retains its strong roots in the Dubai market, but this will now be complemented by flavours from markets in the Far East and also the Indian subcontinent, where a number of economies continue to show positive growth despite the negative impacts felt upon the global marketplace.

"On the flip side, however, there will be a similar effort to attract regional investors into Europe and Asia as well," suggests Matthew Green, head of research & consultancy UAE, CB Richard Ellis (CBRE).

As a result, the event has now come to provide the ideal platform for the coming together of other events as well, and in a sense assumes a more comprehensive role in the current marketplace. "I was not surprised to hear about the rebranding. It opens up the opportunity to rationalise and combine various events in the region," says Gary Bugden, executive director of PRDnationwide, a global real estate agency.

"It must be difficult to justify so many independent events throughout the region and I expect we will see a move to fewer, more comprehensive events. That may well be the driving force behind the rebranding," he adds.

Gaining mileage

However, despite the wider perspectives Cityscape has taken on in recent times in its new avatar, its relevance as an integral part of the real estate calendar seems to retain much significance. Industry stakeholders keenly watch and gauge developer participation at the real estate expo as an implicit indication of their healthy order books.

"I think a number of developers will be there for appearance and for longer term branding," says Bugden.

At the same time, Bugden is doubtful if there will be any transactions of note arising from this year's event. "It is far too early for off-the-plan sales to re-emerge," he contends.

Cityscape's Speller on the other hand, is optimistic. "If there is no reason for our partners to exhibit, we don't urge them to participate as it's not beneficial. However, our partners continually return to the show because they see benefits of coming to this exhibition. People aren't willing to spend money on building stalls and do marketing unless they see returns. These companies continue to do that on the premise that there is a justifiable reason for participation."

The Cityscape executive also believes that the event is a cost-effective option of meeting prospective investors. "Set up a meeting and fly to the UK to meet one investor or come to Cityscape Global and meet around 150. There are smart investors out there seeking property bargains or opportunities for great growth. If you look at established markets in Europe, an investor can get maximum returns of 10 per cent. While in Dubai, they can look at a substantially higher percentage of yields on such investments. Those investors are coming here to find out what lies in store in Dubai, the UAE and the wider region," he observes.

Renewed global interest

The organisers claim that pre-registration figures and participants for conferences suggest a renewed global interest under the new format. Market observers appear to endorse this. "As the difficult economic conditions continue, it is unlikely that many exhibitors would choose to be present without valid reason. Instead, firms will be viewing the event as a prime time to increase their market share for future growth. By doing so, they will be aiming to position themselves for the time when momentum picks up," says CBRE's Green.

According to Billy Rautenbach, managing director, The Property Store, "Things will carry on regardless of the name change. In fact, the name change may even attract additional interested parties."

On another level, the completion of several projects has shifted the market into handover mode. This has integrated the services sector as an essential part of the property market in Dubai. As a result, Cityscape Global is likely to see an emerging emphasis on the services sector this year. "As projects reach handover to owners' associations, the emphasis in the real estate sector will likely shift from development and sales to the operational phase and Cityscape Global may start to see this change in emphasis," says Bugden. Concurring with him, CBRE's Green adds, "We can expect to see an increased number of new SMEs trying to enter the market with service-based business lines, such as facilities and building management likely to be near the top of the list."

Cityscape has evolved since its inception as a conference in 2001. Following the ban on active sales by developers two years ago, the exhibition has now reverted to being a B2B event. According to Rautenbach, "You will find introductions taking place, networking and some deals will be closed, but I don't think there will be any bargain hunters. Certainly, there will be some end-users." However, the expo is unlikely to attract retail purchasers until the market recovers. Following increased international exposure under the new format this year, industry observers believe Cityscape Global holds good potential for B2B activities.

Opportunities aplenty for investors

With several businesses showing their wares and services under one roof at Cityscape Global, end-users and investors with access to funds and seeking lucrative investment returns can take advantage of opportunities existing in the local marketplace. Astute buyers are now looking for properties which provide the fundamentals to guarantee long-term capital growth along with an acceptable rental yield. "Cityscape will definitely appeal to this new breed of investors and end-users," says Alwadiya.

However, the lack of institutional quality stock is likely to deter such investors. "We have seen interest in the region from property and investment funds, but a lack of institutional quality stock [non-residential property] brought about by strata title and restricted ownership still presents a great hurdle to access," says Ian Alberts, regional director, Colliers International. With Cityscape Global coinciding with Europe's largest property conference — Expo Real in Germany this year, some international visitors are likely to be conspicuous by their absence.

Market regulations

Given Cityscape's massive scale and scope of exposure for new projects and services, industry observers believe it is an opportune time to make clarifications to proposed regulations. There is much disillusionment about lax attitudes to implementing laws, and Bugden gives voice to this when he says, "The recent approach to real estate regulation in Dubai confuses me. At a time when regulation is so critical to market recovery, we have seen delays, indecisiveness, uncertainty, lack of transparency and some very puzzling decisions.

Clarification is needed in a number of areas but I doubt that it will be forthcoming."

At the same time, there may be reason for optimism, considering Dubai's efforts towards becoming a more regulated market model. While the efforts to protect rights, lift standards of professionalism and establish a transparent, credible and functional framework are to be applauded, there is still a long way to go before the industry can be said to be in the final stages of maturity. "Cityscape represents an excellent platform to address the different stakeholders within the industry and announce new proposed laws. We usually expect new announcements to coincide with the highly attended event," adds Alwadiya.

Expo's impact on property sector

Industry experts affirm that it would be improper to expect the new Cityscape format to improve the exhibition's performance or accelerate the recovery of Dubai's property sector. Linking the fortunes of the local real estate industry to global market recovery, Alwadiya says, "To gauge the primary driver of a Dubai economic recovery, we must take a global or macro view first. The rebranding of Cityscape from that perspective is definitely a step in the right direction. The Dubai recovery process will need to be driven by fundamental and solid economic drivers, not speculation. Population growth, driven by an increase in commercial activity, will be the primary determinant of a real estate recovery as Dubai attracts new business entities, investors and owner occupiers who have a long-term outlook to their participation in Dubai's economy."

Corrective measures

Exhibiting local projects on par with their international counterparts at Cityscape Global, developers in Dubai will need to gauge where they stand in the value comparison as all vie for a share of the global dollar.

"They need to ensure that the mistakes made over the past five years where lack of planning, customer focus and attention to market fundamentals are not repeated again. Alternatives for serious investors will not just be located within the Dubai market or even regionally. China, for example, is experiencing a real estate recovery of significant proportions while other nations such as Australia are also recovering well," warns Alwadiya.

Affirming faith in the local market's investment potential, CBRE's Green sums up, "Regardless of the name change, there is no doubt that Dubai will remain very much in the spotlight at this year's Cityscape event.

"Investment into the emirate was significant, not just on a local scale but also on an international level. As such, there remains a very serious interest in how the market is performing and whether any further signs of recovery are emerging."

An international perspective on real estate fits well with Dubai's existing investors since expatriate owner occupiers and international investors constitute the majority of demand in Dubai's investment zones."

The rebranding initiative is a natural evolvement aimed at expanding the target audience base that the exhibition aims to address and attract."