New property ownership law will be issued next month

Dubai: Dubai's new real estate law will be unveiled by the government next month, said a senior government official.

"The draft law is in circulation among the legal and real estate community for feedback and to look if there is any loopholes. I was told that it will be issued in December," said Haiyan Mujarkech, chief officer for projects at Dubai Properties, a Dubai government-owned real estate developer.

"I think the government wants to ensure that every aspect of the sector is being addressed by the new law. There needs to be clarity in the real estate laws."

Meanwhile, Sultan Lootah, business promotion director at the Dubai Chamber of Commerce and Industry, told a Korean trade delegation yesterday that the government would issue the law in 2006.

Sector opened up

The Dubai Government opened the emirate's real estate sector to foreign freehold ownership in 2002, a few months after the 9/11 events, that helped the emirate to attract a significant portion of repatriated Arab capital.

However, large global investment bankers and property fund managers have shied away from the market, alleging lack of data, transparency and a proper regulatory environment. Sensing the new law, a number of global institutes are eyeing this lucrative market to bring in more funds and investment products. Morgan Stanley is the latest.

David Jackson, executive vice-president of Istithmar, said, "Increasing liquidity, easy access to cash and de-regulation of property ownership is helping the sector to expand fast. "We are dealing with assets at 20 to 30 per cent premium and do not have any problems finding investors even at that high premium."

Struan Robertson, managing director of Morgan Stanley's European Real Estate Investment Banking, said, "Large foreign institutes first look at market information, statistics and regulations and legal environment before entering any market. There is not enough credible statistics and clearly the issuance of a real estate law will change the scenario in Dubai for the better."

RAK Properties

Foreigners can have full ownership now

Shaikh Saud Bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, has issued a decree which grants foreigners complete ownership of real estate properties in projects developed by RAK Properties in the emirate.

The decree says RAK Properties is allowed to sell its residential, commercial and tourism units that are part of the company's projects as freehold and without a time-bound ownership deed.