Dubai: The Dubai government has no plans to sell state-owned property or go to the stock market despite a legal amendment that makes changes to the way Dubai Real Estate Corporation (DREC) is run.
The new law — which makes DREC responsible for constructing, investing or using government land, and commercial and industrial properties in Dubai — also allows the corporation to sell its assets.
But Hesham Abdullah Al Qasim, vice president and chief executive officer of DREC, told Gulf News yesterday that this was not on the cards.
"While DREC is completely into the leasing market, and the amendments to the law now allow selling government properties, there is, however, no intention to sell any of these assets or even to go to the stock market," he said.
"We are too much into the rental business and we don't sell. We are a solid company. All our projects are being completed on time. Our business model is clear of the freehold market, unlike Emaar. We are completely into the leasing market," Al Qasim added.
His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai, yesterday amended the law setting up the DREC, which manages government properties.
"The new version of the law says the corporation will report directly to the ruler, while previously it was watched over by the Investment Corporation of Dubai," Al Qasim said. He praised the move as a better monitor for government properties.
According to the amendment, the corporation will also carry out real estate marketing and management activities for commercial properties, in addition to developing, buying, selling, leasing and managing real estate registered under its name.
Al Qasim clarified that DREC is an independent entity that has registered steady growth, saying: "We are a conservative corporation working to meet the needs of the market in different segments."
The third article of the law stipulates setting up a government-owned public corporation called DREC, enjoying corporate body status, and financial and administrative independence, as well as the full legal capacity to carry out its operations to achieve its objectives.
Matthew Green, Head of Research & Consultancy UAE, CB Richard Ellis Middle East, welcomed the changes to the law “DREC will be an opportunity to streamline operations and strip off excess fat to create more focussed business lines that are commercial in their approach. Importantly they will also hold power in a legal capacity to ensure its goals can be reached.
“From a consumer perspective it will also lead to the creation of a commercial entity able to contract to third parties, and able to sue and be sued.”
He added: “We would hope that the creation of streamlined entity would lead to better transparency and disclosure of information which is something that the market clearly requires.”