Dubai: The new initiative by Ajman Real Estate Regulatory Authority (ARRA) to match investors who have lost money from stalled projects with approved developers has so far received positive feedback from the investors.
The real estate sector in Ajman, the smallest of the UAE's seven emirates, is the latest victim of the global financial crisis.
Thousands of investors had invested in the emirate's real estate that offered a cost-effective alternative to Dubai's then expensive properties — thus attracting middle income families into its booming real estate market.
As a result, Ajman witnessed scores of master-planned communities mushrooming, including Emirates City, Emirates Lake Towers, Uptown Ajman, Awali City, to name a few.
Many developers fled the scene when the market was facing financial problems, especially following the Lehman Brothers collapse, leaving investors wondering. ARRA then stepped in to defuse the situation and brokered a deal with some developers who are pursuing their projects to help both investors and developers.
The initiative which was implemented a month ago allows investors to choose properties from a list of approved and listed developers and negotiate a discounted rate that would suit them in order to cut their losses on a stalled development.
"What we're doing is matchmaking. We allow investors who have lost money from developers who aren't able and offered them the choice to transfer to a certified credited project," Omar Al Barguthi, director-general of Arra, told Gulf News.
The initiative is aimed at investors who have paid instalments to a developer who is not seeing the project through. ARRA acts as the mediator trying to reach an agreement between listed developers and the investor on discounts and special rates for investing in a new project.
"We look at projects which are undergoing progress, ask them to make a proposal for Arra and let us know what rates they can provide to any potential customer who is transferring. Then we ask the customer whose project is not happening if they want to take up the offer," Al Barguthi explained.
The approved developers must fulfil 16 requirements which are reviewed every month. If they stop meeting the requirements after some time, their registration is cancelled.
"We're here to help both the developer and the investor. We need to look at both parties' interests in order to get things moving in the property market," said Al Barguthi.
Analysts say this is a good example of how government authorities could help the industry move forward.
"It is a good initiative by Arra in trying times. They are showing a path forward and offering alternatives to see that investments are being taken forward.
"They are bringing developers and investors together so there is a common platform where they can find alternate solutions," said Sudhir Kumar, a property analyst and managing director of Realtor's International.
