Cityscape proves a major draw

Large crowds buck downward turn in many housing markets, showing 'cautious optimism'.

A draw of the 360 Time World Tower.

It seems that not everything related to property is on a downwards slide. Whether they were there to hammer out investment deals or to gauge the health of the regional property market, the size of the crowds at the Cityscape Dubai exhibition was in sharp contrast to house price trends in many western markets.

The number of visitors during the first three days of the annual event was up more than 30 per cent over last year, hitting 56,000 compared with 42,000 in 2007. And with yesterday's extra day, total numbers at the time of going to press were forecast to hit 70,000. "I think the huge response from the real estate community internationally is a testament to the strength of the property market here in the region," said Rohan Marwaha, the managing director of the Cityscape Group, who described the mood over the four days as one of "cautious optimism".

"Certainly, a lot of people have been waiting to see how this event plays out, and now that it's drawing to a close I think they are surprised that deals are still being done and there's still a lot of interest," he said. The higher attendance numbers took their toll on the roads surrounding the exhibition centre, with traffic backed up for hours as drivers battled to reach the event and then find a parking space. Once at the exhibition centre, the question on everyone's mind was the extent to which the UAE would be impacted by the snowballing economic crisis. Despite four days of debate, that question remains largely unanswered.

"After four days [of Cityscape], the feeling about what is going to happen is still not clear; the suspense is still there," said Mohammed Nimer, the chief executive of MAG Group Property Development Department. Mr Nimer said he was surprised by the large number of Cityscape visitors, but noted that many displayed an air of caution. He acknowledged that even if the organisers of Cityscape had allowed property developers to sell units, the number of takers would have been slim. Visitors were carefully "exploring and discovering" projects before deciding whether to buy, he said.

One such investor, Sameeh Khaleel, a UK citizen, said: "I'm observing before I buy anything, but I'd rather be here than anywhere else in the world. It is the safest place and I wouldn't put my money anywhere else today." Jock Douglas, the sales manager at the Abu Dhabi branch of the property services firm Asteco, said people were testing the market during the first two days of the event before making firm "expressions of interest" on the last two days.

Mr Douglas said Asteco took such expressions of interest on 10 individual apartments and was in the final stages of negotiation for two entire floors in a tower in Abu Dhabi. "[The event] has exceeded our expectations," he said. Gurjit Singh, of Sorouh Real Estate, added: "One major difference with last year's Cityscape is that people are very clear about what they want." Many other developers were accepting reservations for property, but said they did not allow money to change hands.

Mr Marwaha said developers had "by and large" adhered to the new rules banning all but large investment deals or joint-venture agreements in an attempt to prevent a repeat of the scramble for individual units during Cityscape Abu Dhabi. "I don't expect any of the exhibitors to turn away a deposit cheque if it's put in front of them, but the idea is that business-to-business transactions are done, which we define as US$5 million (Dh18.4m) and above," he said.

Many visitors said they attended the event purely to gain an insight into whether the UAE remained a good place to buy property. According to Henry Azzam, the chief executive for the Middle East and North Africa at Deutsche Bank UAE, the market is by no means immune from the global economic crisis. "We are better equipped than most countries around the world to navigate this crisis and have a soft landing. Nevertheless, it's going to hit us, and its impact will become more visible in the weeks ahead," he said.

He highlighted the tightening of local access to international credit, which would force lenders to be more selective about extending loans to would-be buyers. "Tighter liquidity, more stringent lending requirements, negative sentiment, less demand from international players and less speculation are all negative elements on the demand side," said Mr Azzam. "But fortunately the Government controls the supply coming on the market, and if it is able to manage it properly, we don't expect to see a crash. On the contrary, a soft landing and a slight correction."

With house prices expected to enter a period of stability, now could be a good time for end-user buyers to make their move, he added. [e-mail] [e-mail]