Dubai real estate development sector: Survival of the fittest
Source: REIDIN , Author: Posted by BI-ME staff
Posted: Mon January 29, 2018 11:21 am

UAE. Typically, the emergence of a new technology or opening of a new market results in the rapid increase in prices or valuations. This causes a flurry of new players, dominated by the private sector, entering the market in order to capitalize on the supernormal returns.

During the Dotcom bubble there was a surge of tech IPO's as many investors were eager to invest (301 IPO's at its Peak).

 

However, soon after the bubble burst the number of IPO's contracted to low double digits in the subsequent years. The development sector in Dubai had a similar outcome in terms of survival rate of private sector developers between its first and second cycle, which is common in the nascent stage of any new market.

In the private sector landscape, developers rushed to launch projects during the peaks of both the cycles. However, the overlap between common developers in both cycles was only 8%.

In the second cycle we can witness that the top 5 private sector developers launched more than double the units compared to the first cycle. This highlights that this time around the private sector developers are better capitalized to take on large scale projects (ala Azizi and Damac).
 
We opine as the Dubai market continues to mature the private sector landscape will be dominated by a few big players (ala Damac and Azizi).
 
However, investor concerns on purchasing private sector stock have clearly abated especially with regards to developers that have survived both boom-bust cycles in Dubai.
 
To read the full report click here: http://bit.ly/2rEHoN1 

Click here to read the original article on the REIDIN website

Photo Caption: For illustrative purposes only (File photo)

About REIDIN
REIDIN is the leading real estate information company focusing on emerging markets. REIDIN offers intelligent and user-friendly online information solutions helping professionals access relevant data and information in a timely and cost effective basis.

For more information, pleased visit www.reidin.com

About Unitas
Unitas believes in in-depth planning and discipline as a mechanism to identify and exploit market discrepancy and capitalize on diversified revenue streams. The purpose of Unitas is to manage, direct, and create wealth for our clients.

For more information, please visit www.unitasconsultancy.com

 

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