Dubai Developer Revives Port City Project With $183m Tower

Omniyat Group began work on a 48-storey tower in Dubai Maritime City on Tuesday, the first residential building under construction at the long-delayed project as developers bet the emirate’s renewed property boom is sustainable.

Dubai rents had risen for 10 straight quarters before falling one per cent in the third quarter, property consultants CBRE reported in September, and prices are now back up around their 2008 peaks.

Work on dozens of building projects has resumed and new developments announced, sparking fears Dubai could repeat the boom-bust cycle that left thousands of investors out of pocket and some facing financial ruin.

Developers, however, remain bullish.

“I don’t feel there’s oversupply, we will see sustainable growth rather than the large jumps seen in the last two years,” Mahdi Amjad, chief executive of Dubai’s Omniyat Group, told reporters.

“You need to focus on the fundamentals and Dubai has demonstrated that its financials are very strong — tourism, trade, the attraction Dubai has globally — Dubai’s real estate market is much more mature than it was before.”

His company broke ground on a 225-unit tower in Dubai Maritime City on Tuesday, which the developer valued at Dhs600 million ($163 million) and predicted would be finished in 2017.

The City, first announced in 2003 and slated to be completed by 2012 according to media reports, is part of DryDocks World, which restructured $2.2 billion of debt in 2012. Both are units of Dubai-government owned Dubai World.

Omniyat’s tower is 80-90 per cent funded through equity from its shareholders, bank lending and off-plan sales, said Amjad.

Sales start on Wednesday and more than half the units have already been reserved, he said.

“We will be awarding over Dhs2 billion of construction (contracts) over the next 6-9 months,” said Amjad.

Omniyat, a privately-held company jointly owned by Dubai-based and Kuwaiti investors, values its portfolio at Dhs12 billion and this will double by 2020, he said.

Dubai Maritime City redesigned its master plan after several companies failed to build on their plots, with the development now scheduled to include 53 projects.