broker perspective industry
that they didn’t really value brokers. Now, however, good brokers are worth their weight in gold to developers, as they provide money so they can finish their products. Yet if a developer teams up with an unscrupulous broker it can ruin the name of the developer.” “I think the broker-developer relationship is getting better. Now everybody in the industry knows who’s who and there is more respect for those that are left.” Choueri states that it is in the interests of developers
to work with brokers due to their “mass network which offers a much larger exposure to the market.” Yet it appears that not all developers engage the services of brokerage companies. Joe Farah, managing director for UAE developer Plus Properties, comments: “Brokers are having big problems – even with leasing – because developers are cutting the intermediary role of the brokers and their commission, and going directly to the customers. “Brokers with two or three years’ experience – that
know the market and the best offers and have regular clients – do not have any problems. But it’s very difficult for a new brokerage company to survive.” He suggests that the broker-developer relationship
If you are a developer, you should be a developer and let the agents do the brokerage. It’s very difficult to play the role of both and also encourage brokers to come on board, unless you have very defined rules
is still in need of repair. “There is a lack of trust towards brokers because some agents took the customers’ money and didn’t pay the developers back. Nowadays, clients are more aware and want to see a building com- pleted before paying. Therefore only professional brokers will continue to do business.” Meanwhile, Choueri suggests that brokers’ noses were
put out of joint by the actions of some developers. She says: “I think the mistake that some Dubai developers made was – due to the appealing profit margins of bro- kerage companies – they opened their own firms which competed with brokers rather than working with them. “If you are a developer, you should be a developer and
think the market will take off there. A lot of people are commuting from Dubai but when the supply comes into the market the rental prices will ease. It’s all about supply and demand. Once the new units are completed the prices will be similar to Dubai.” He also backs the quality of the new supply. “I think
the new units in Abu Dhabi will be of an acceptable standard. It’s all about quality – anything sub-standard is going to have a tough time. Given the amount of money that the Abu Dhabi government is spending on infrastructure, I can’t see us being let down by sub- standard developments.” Boswell believes that the future is bright for the
emirate and adds: “Abu Dhabi has a fantastic future; the government is putting the infrastructure in first and it is going to be a much better planned city than Dubai. Having said that, the two cities will complement each other – Abu Dhabi is a little bit more reserved than Dubai and I think people will do business between the two.”
Sami also has faith in the Abu Dhabi market and comments: “Abu Dhabi suffered in the first quarter but I think things will pick up from the summer onwards.”
IMPROVING RELATIONS?
Have the weakened market conditions resulted in a closer working relationship between brokers and developers, or have the two parties been driven apart? For Chesterton’s Akhlaghi, the situation has improved. “I think that developers now have a better understanding of the role of brokers. At the peak of the market, everyone was going to them and buying at crazy prices. Now that the market has slowed they have had to rethink their sales strategy and they are using brokers more and more,” he says. Akhlaghi’s sentiment is echoed by Boswell, who
believes that developers now value the role of brokers. He says: “I think that developers were so spoilt before – and there were so many agents willing to sell their products –
let the agents do the brokerage. It’s very difficult to play the role of both and also encourage brokers to come on board, unless you have very defined rules.” Choueri also hints that some developers are cutting
out brokers by setting commission rates too low. “If a developer has a great product worth US$1 million but offers you one percent commission, then the agent won’t be interested, unless they have a salary and they work for the developer. But most likely they will have to spend money on petrol and telephone calls and share fifty percent of that one percent with their company.” Although many have been left with a sour taste in
the mouth, Boswell asserts that a collaborative effort between brokers and developers will aid market recovery. “We are out of the worst, so from now onwards it will only get better. All the mistakes that everybody has made need to be left behind and learnt from. The more the developers and brokers work together the faster the confidence will reappear in the world market. It’s down to how the brokers conduct themselves and how the developers finish the product. If this is done correctly then it should carry us forward.”
22 /
/jun-sep 2010
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