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real estate


H. E. Mohamed Alabbar, chairman, Emaar Properties


investors and developers – is figuring out which way the cycle is moving, and when it is most likely to shift direction. Because in real estate, as in life, we all want to be ahead of the curve. We want to buy when the cycle is


r fast facts


– uae-founded property titan emaar has built some of the country's most striking landmarks, from the world's largest tower, Burj Khalifa, to the world's largest mall, dubai mall.


– recurring revenues from the hospitality and shopping malls businesses of emaar accounted for nearly 41 per cent of total revenue in the first nine months of this year.


– Founded in 1997, emaar is listed on the dubai Financial market.


52 / DECEMBER 2011


down, and sell when it’s up. And, as developers, we want to build for not just current but also future demand. That sounds awfully simple. Unfortunately, real estate cycles are complex things, influenced by countless factors, both local and global, that make them hard to predict. So what do we do? Generally,


we study historical trends, current leading indicators and ongoing price fluctuations to assess, as best we can, the direction of the cycle. That’s one option. Another is to


focus less attention on the vagaries of the market and, instead, zero in on underlying demand, asking ourselves: What do people really need, right now and in the future, that they can’t get? So let’s step back for a moment and look at our region with a bird’s eye view. What do we see? A lot of young people, including millions who need good jobs and just as many who require quality homes for themselves and their families. Our region needs sustainable jobs and


affordable homes. It’s hard to miss this plain fact.


eal estate, like just about everything else in life, is cyclical. The eternal challenge – for homeowners,


My belief in fundamentals, in the importance of going back to basics, is one of the reasons why Emaar, which has traditionally focused on affordable luxury developments, recently launched a new subsidiary - Al Dawahi Development, a next-generation developer of value housing projects across the Arab world. At a time when the housing shortage in some of the fastest growing cities in the Middle East is estimated at over five million units, Al Dawahi Development will address the huge demand for value housing. Creating a new category of homes and communities that provide value to young families, we will create self-sufficient communities that fulfill the aspirations of Arab youth and their families. A back of the envelope calculation will show that if we can build 40,000 homes annually, it would take at least 100 years to meet pent up demand. Clearly there is room here for not just Al Dawahi, but many more developers to enter the market of value housing. However, it is important for developers to implement the right business model that works on volume and a good supply chain that offers the best prices for building materials. Three years after the world’s financial


system nearly collapsed, we need to go back to basics. After all, as any builder knows, every project must start with a strong foundation.


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