DUBAI, (Reuters) – There has been a more somber mood at Dubai’s once-glitzy property show Cityscape, as developers showcased projects that are unfinished and speak of lower cost developments.
Gone are the extravagant exhibition stands — some developers last year spent as much as 13 million dirhams ($3.54 million) — and the scores of performers and glamorous promotion girls.
Rohan Marwaha, the managing director of Cityscape, said he hoped to attract 38,000 visitors to the four-day show, which ends Thursday, about half the figure for 2008.
This year, developers have been concentrating on highlighting customer service and finishing projects. There have been very few new project launches at the show.
“No, we are not launching new projects,” Ali Saeed Bin Sulayem, chief executive of Abu Dhabi’s Hydra Properties said, adding the firm was focusing on servicing customers, including offering solutions to clients in financial trouble.
At last year’s Cityscape, one of Dubai’s largest property companies, Nakheel, unveiled its plan to build a 1 km-high skyscraper. It then had to put the project on hold months later as the global financial crisis took its toll on the emirate’s real estate sector.
Dubai’s six year property boom came to a halt late last year, with delays and cancellations of multi-billion dollar development projects.
Donald Trump Jr said in a speech at the show that there was a “herd mentality” during the boom, with speculators flipping properties before completion, creating unrealistic expectations about market demand.
Flipping was common practice in Dubai as investors bought and sold properties in order to make quick profits.
“The days of relying on 100 percent foreign buyers turning up with briefcases of cash are over,” he said. “Those years went by in the blink of an eye, but we all went over the top.”
Trump, executive vice president of the Trump Organisation, said of the height of the real estate boom: “People lost track of the concept of spending, and we have to get back to basics.”
In December, plans for a $790 million Trump Tower in Dubai were suspended. Media quoted Trump Jr saying at the exhibition that the project might be restarted in the next two years.
As many developers restructure, struggle to pay off debts, and commit to project deadlines, some change their strategies to tap into the middle and lower-income housing markets.
The real estate arm of Waha Capital, Waha Land, told Reuters it was considering low and mid-income projects.
Dubai’s Deyaar said it was focused on building low cost housing.
“Low cost housing is a market where we have millions of customers,” Markus Giebel, the firm’s CEO, told a conference.
But while some deals have been concluded recently in Dubai, developers say the Gulf emirate is unlikely to reach the dizzy heights it once boasted, when billions of dollars of projects were launched.
“It will recover but it won’t be like it used to be,” Hydra Properties Bin Sulayem said.