Market sources have stated that recently, master-developers in Dubai have started to foster a subdued view of investors and sub-developers, those holding back their plots without launching planned projects. If these sub-developers cannot come up with justified reasons for their delay, they might actually face new penalties.
One developer stated that master-developers and Dubai’s realty sector do not want the land to be attained as a hypothetical asset, where not much is being done to keep the development on track. In the past, there have been several projects made by investors with specific strategies, back when the market was going through an amendment in 2011-2012.
At the present, these developers would like to see evident on-site work taking place, without things being left unused, until the landlord chooses to sell based on the best price he will be getting.
If these master-developers insist on this, it could result in a flood of off-plan liftoffs in the second quarter of this year, irrelevant of whether or not the market as a whole is in a favorable state.
For potential property owners, in particular, end-users, this will be a noble thing. Any enhancement in activity related to launching, means that there would be less room for values to dash sharply anytime in the near future. But what about the sub-developers who are dependent on the master-developers’ demands?
According to Sameer Lakhani, the Managing Director of Global Capital Partners (which has plots at Dubailand’s commercial and upper residential clusters), there have been discussions on grounding penalties on a basis of development-to-development; penalties for failure to comply could be around 20 percent of the land value every year. According to Lakhani, more than anything else, the possible threat of such fines could have a stimulating effect on project launches, or even get the landlords to dispose the properties sooner than originally planned.
Dubai’s authorities have made it clear that they want the market to remain operating on a challenging level, with new developments coming in at regular gaps.
However, sub-developers are striking up rigid resistances wherever they can.
Many of the top projects in the UAE have already endured delays ever since the market rectification in 2009. These delays, have at times, strained and highlighted the relationships between sub-developers and master-developers, with both sides trying to push the blame over to the other side.