Dubai government-owned property developer Nakheel said it would participate in Dubai’s main property exhibition, Cityscape Dubai. This represents a U-turn over an earlier announcement a few days earlier that it was not participating in Cityscape. The company, the developer of iconic projects, like the Palm Jumeirah and The World, said the decision was made "following discussions with various industry stakeholders, including partners and the leading event’s organisers".
It’s announcement was followed by a similar change of mind from Emaar Properties which said its decision "follows discussions with the various agencies involved in organising the event”.
This comes at a time when data showed that office price rentals in Dubai’s freezones fell by 63 percent in the past year.
24 September 2009
Analysis and forecast: increasing risk
The news about Dubai’s real-estate sector does not seem to be improving. Dubai’s previous economic boom was largely due to the real-estate industry and Cityscape is seen as the main annual real-estate event, where developers compete in showcasing their latests projects. Previous Cityscape events have witnessed buildings being sold in hours, off plan.
The fact that Nakheel and Emaar decided not to participate confirms that the backbone of the Dubai economy does not have a change of survival in the foreseeable future. The change of heart that came later does not reflect a change of opinion, but is almost certainly due to government pressure, as a non-participation by Nakheel and Emaar is a de-facto death certificate to the Dubai real-estate market.
Data published about a massive drop in office rental prices in the free-zones also indicate further trouble. Whilst this is partly due to more supply being put on the market, even more supply will come later in the year as more projects are completed. As Dubai has failed to diversify its economy, it will be increasingly difficult for Dubai to fill the massive empty space of real-estate.