Gulf Finance House returns to Dubailand
Gulf Finance House has returned to Dubailand five years after its first ill-fated foray into theme park development there ended with huge losses.
The investment bank announced a Dh5.5 billion Arabian Legends entertainment complex at Cityscape in 2004 that was scheduled to be completed last year. Due to the global financial crisis, however, it was forced to withdraw from the project, taking a US$300 million provision against its exposure in 2009.
Now the Bahrain-based investor is back after signing a land sale agreement with Dubai Properties Group.
The 1.2 million square foot development will comprise residential, commercial and retail spaces. The land sale agreement with Dubai Properties Group (DPG) was announced yesterday. The investment bank has plans to develop 830,000 sq feet for detached and adjacent villas and 75,000 sq feet for residential apartments.
“GFH is continuing to expand our investments in the UAE market, where we see considerable opportunity both in real estate as well as other sectors,” said Hisham Al Rayes, the chief executive of GFH. “This is another important step forward in the execution of our strategy and efforts to effectively leverage positive dynamics in the Dubai market and the growing Dubailand district. We look forward to building on this initiative, which we are confident will create significant value for the bank and our stakeholders.”
The development, starting later this year, is planned to be built over the next five years. The announcement follows a number of residential projects across Dubailand that have been newly announced, such as Damac’s Akoya or DPG’s relaunched Mudon.
“We expect the Dubai market to continue its road to recovery, with growth projected across all real estate sectors during 2014,” said Nick Maclean, the managing director of property consultants CBRE Middle East. “The pattern of this growth is becoming more inclusive, although individual sub-markets, quality and ownership structures can still have a major influence on performance.”
Dubai’s property market has recently slowed a bit from its barnstorming performance last year, in which UAE Central Bank economists estimated it grew 24 per cent last year.
Dubai’s Land Department believes the doubling of the property registration fee and new mortgage regulations are lowering speculation and helping to reduce the risk of a bubble forming in the market. Some analysts have suggested an oversupply on the horizon that could bring a price correction of 20 to 30 per cent.
“With market conditions steadily improving, we anticipate that residential rental and sales growth will continue throughout 2014,” said Mr Maclean. “However, we expect growth levels to be lower than 2013 performance.”
Updated: July 9, 2014 04:00 AM