Al Futtaim boss urges Dubai to ‘get real’

MAJID Al Futtaim (MAF) Investments has claimed Dubai property firms’ rush to market is having a negative effect on other regional construction projects.

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By  Richard Agnew Published  October 2, 2005

MAJID Al Futtaim (MAF) Investments has claimed Dubai property firms’ rush to market is having a negative effect on other regional construction projects. The UAE-based investment group said a “lack of customer satisfaction” and “confusion” was emerging among homebuyers in Dubai, thanks to developers’ decisions to sell properties first and “sort the issues out afterwards”. Many high-profile Dubai-based projects such as the Jumeirah Islands development have failed to meet deadlines and been delayed — a trend which needs to change, the company said. “If you look at a lot of the early buyers of some of these developments, they are still waiting for the delivery of their product two years after it was promised,” Jeff Rosely, group vice president of property development for MAF Investments told Arabian Business. “It’s very easy to draw up a plan and say ‘I’ll sell that’. But you’ve got to do the work. You can’t sell off the concept, you have to sell off a reality,” he added. Rosely said developers were in danger of losing credibility, and defended its decision to hold back from selling properties in The Wave, its US$800 million development in Oman. He said it had delayed the commercial launch of the project, to wait for freehold and development agreements to be signed with Oman’s government. “There’s an over-expectation in the marketplace, if you like, about why we haven’t delivered, why we aren’t out there building,” he said. “We could be out there and selling now, much the same way as Dubai has sold. We don’t want to do that because we see that as diluting the credibility of the project. We prefer to take three to six months extra to get to market. I prefer to be slower and surer rather than jumping in and then having to backtrack and have regrets,” he added. Rosely said that properties in the resort, which spans seven kilometres of prime beachfront near Oman’s international airport, would be commercially launched this year. But he declined to provide a date for its overall completion. “How long is a piece of string?” he said. “The completion date is a function of how the product is received in the market. If you look at a lot of projects that have sold out, they’ve pre-committed on construction costs, which they didn’t have under control. We want to go forward in a manner where we deliver value for our shareholders and customers,” he added. Rosely also denied that the departure of the project’s legal advisors, Trowers & Hamlins in May had affected the development. “There weren’t any problems. We just had a disagreement. We had two different points of view about the appropriateness of the relationship. Why do people change their advertising agency or branding agency? It’s part of business,” he added. As well as MAF, the project’s backers include Oman’s Waterfront Investments, which represents the government of Oman and the National Investment Funds Company, which represents the Omani Pension Funds. It will comprise 1200 rooms in four hotels and numerous restaurants and shops and further the Sultanate’s strategy of promoting ‘sustainable’ tourism. “Oman doesn’t want to be Dubai,” said Rosely. “They aren’t after mass-market tourism. They are after cultural, more refined tourism.” None of the leading Dubai-based property companies were willing to comment on the claims.

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