Dubai: When asked if Meydan’s plans for progress into the future, including hosting the 25th running of the Dubai World Cup, were poised to dovetail with the UAE hosting the World Expo in 2020, Al Tayer stated that his sights were fixed on the near future.
“I think we cannot lose sight of the next 12-24 months,” he stated. “We need to plan carefully. Expo 2020 is a nice added value for Dubai and the UAE, but I think that Dubai was on its way to an upturn regardless. Dubai plans for such events and has always been successful. Having the Expo in the year 2020 is just the icing on the cake. If you ask me, Dubai will have growth and sustainability with or without the Expo.”
Providing a perspective to the sudden increase in rentals, following the announcement that Dubai would host the Expo, Al Tayer reasoned, “ I don’t think it is a healthy trend to have uncapped or unreasonable hike in prices by using the Expo 2020 as an excuse. But it seems there is a desirability and this as such elevates the demand to this degree. How long it will be and what implications it has is difficult to see provided the end user is genuine.
“ If it is a matter of speculation then you walk on thin ice. In Meydan we have certain policies and we deal with entities that have done business with us before. We don’t do bulk selling and we wish to ensure that investors are genuine.”
“The real estate market is regulated,” added Al Tayer. “The leasing sector is controlled by Rera [Real Estate Regulatory Agency]. The other issue may be in the area of land values.
When asked if he visualised a potential crisis in case the market was not properly monitored by the authorities Al Tayer explained, “To interject from another direction — I don’t think long term investors lost during the crisis. If the lease per square foot was X and Y and it dropped by 20-25% during the global downturn then we must be prepared to ask what the rental was before 2006 and to what limit did it reach in 2008? Many investors have seen their payback period come down from 10-12 years to 6-7 years. If you benchmark that globally then it is healthy. No where can you visualise a payback period for a home loan within 6-7 years. Maybe the drop is where the price should actually be. If you make a profit of 10-15 per cent then that’s good, because globally the percentages are a lot less than that.”