Dubai’s developers and contractors have learned lessons from the recent housing bust which will help to avoid the same mistakes being made again, according to a panel at Construction Week’s Leaders In Construction 2014 event.
Bishoy Azmy, CEO of Dubai-based Al Shafar General Contracting, said: “I think it’s a good thing that a lot of us still remember the tragedies of the last crisis. There is a lot of wisdom in our minds despite the hype and the billions in project announcements.”
Ajay Rajendran, vice-chairman of Sobha Developers, which recently announced the $4 billion Sobha Hartland project, said that it would be “a travesty to forget all of the lessons we learned” during the recent crisis, but added that he believed the regulatory environment had changes which meant another bust was less likely.
“The problem in 2007-08 is that all of the money developers collected was used to buy another plot.
“Now that risk has been removed through RERA escrow arrangements. If a contractor feels the developer has an ability to sell and is pricing sensibly, that money will enter an escrow account and will be used to pay the contractor. So it is very secure from that point of view.”
Simon Moon, Middle East CEO of building consultancy Atkins, said there was “no doubt that there’s going to be huge opportunities”.
However, he said that much of the recent growth in the region had been fuelled thus far through increased government spending, which needs to be backed up by more private sector development.
He added that he would like to see a “maturing of the relations between developer, contractor and consultant”, as well as schemes being developed with greater integrity and with more thought being given into creating spaces where people can enjoy a mix of working, playing and living. Source: Arabian Business