Property executive calls for major shake-up to fill Dubai office space

A major property developer says that Dubai needs a new regulatory body to co-ordinate its 16 free zones.

Dubai needs a new regulatory body to co-ordinate its 16 free zones and increase the number of businesses entering the emirate, according to a major property developer. "Not all free zones are created equal," said Sheikh Maktoum Al Maktoum, the chief executive of Al Fajer Properties. "We need to increase the performance and management of free zones."

Al Fajer's projects are located at Jumeirah Lake Towers, which is overseen and regulated by the Dubai Multi Commodities Centre (DMCC). The 50 office towers there have the highest number of vacancies of office space in the emirate, according to property consultants. Sheikh Al Maktoum said on Sunday that improving the company registration process and standards of the DMCC could lead to a 50 per cent increase in prices there, where the cost of an office is between Dh750 (US$204.20) and Dh900 per square metre. He said prices had dropped by up to 70 per cent in some areas since the crisis.

The DMCC should "focus and work on commodities and not try to do real estate", he said during a speech at the Middle East and North African Real Estate Society conference. "[DMCC] are commodity traders trying to manage a real estate project and try to be a regulator at the same time." Sources familiar with the centre's plans said a broad review of its policies was under way and initiatives would soon be announced. A new body could co-ordinate the free zones so that all businesses setting up in Dubai could benefit from a uniform set of standards for registration, Sheikh Al Maktoum said.

"I believe there should be more co-ordination and consolidation of management of free zones," he said. Dubai's free zones include Jebel Ali Free Zone, the Dubai International Financial Centre, Dubai Media City and Dubai Healthcare City. Sheikh Al Maktoum said the Dubai property sector needed more co-operation between developers and buyers. "What you have seen in the last two years is customers, investors and developers playing a zero sum game," he said. "That means for me to win you have to lose. It was a game of chicken between the developer and the investor. If the developer can't deliver then the investor gets his money back. If the developer delivers, the investor loses his money … The best solution is reconciliation and working together."

Sheikh Al Maktoum said he was confident about Dubai's future because of its shrewd investment in infrastructure over the past decade. "It is always the darkest just before the dawn," he said. "I'm very confident that things will improve drastically from where we are today." [e-mail]