During the Dubai property crisis, about 600 real estate projects were abandoned or stalled. However, the government created initiatives so investors could proceed with their projects.
Two significant schemes are the Tayseer and Tanmia programmes created by the Real Estate Investment Management and Promotion Centre within the Dubai Land Department. In January, the Real Estate Regulatory Agency (RERA) stated that 187 projects have been completed since the beginning of 2009, 253 are still delayed and 232 are likely to be completed at some point in the future.
Tayseer
This programme aims to increase confidence in the market by connecting sources of financing (mostly UAE banks backed by the Dubai government) with stalled projects. It is designed to allow developers to obtain finances to complete their projects, making investment more attractive and creating new opportunities for investors.
To be aided through this programme, the project must be at least 60% completed, have an escrow account, the land must be freehold and served with infrastructure, and an application form completed.
All general information as per the requirements of the Tayseer programme must be registered.
There are certain standards used to evaluate a project. First, the centre evaluates the availability of services, the population density in the area, the possibility of future expansion and the area’s attractiveness for population and investment.
Then it determines the return on investment based on rental or sale value per square metre. The centre also assesses the infrastructure such as the road network, electricity, water and sewage services. The building specifications, especially the area, division and types of finishes, are considered as well.
Last, the contractor is evaluated by examining its credit rating, its technical rating in official records and its history on previous projects. After all the requirements are met and the centre has evaluated the project positively, financial aid is provided through the Tayseer programme, allowing the project to be completed in time.
Tanmia
This programme focuses on incomplete projects by finding new developers or investors to take them on. The Land Department showcases the projects to interested new developers and, if the developer is approved, the centre creates and implements a strategy. Any project between zero and 95% complete can be selected by the centre.
The procedures related to the developer include expressing willingness to join the programme, filling out the application and submitting the documents.
The procedures relating to the investor include expressing willingness to join the Tanmia programme and signing a non-disclosure agreement with the centre. The investor must provide a development or trade licence, company profile and brief working plan.
When the centre registers a project with Tanmia, it will submit a technical report, a financial report and a property evaluation. Once the documents by the three parties have been submitted and all the procedures are completed, the centre will facilitate the project as it is funded by the investors.
Future growth
The government has taken the initiative to drive the resurgence of the real estate market and demonstrate its commitment to ensuring that all projects are completed.
With these new initiatives, Dubai’s real estate sector has the ability to become as successful as it aimed to be before the crisis.
RERA has stated that its 253 registered projects are likely to qualify for either the Tayseer or the Tanmia programme, which is good news for the investors and the Dubai real estate market as a whole.
Shiraz Sethi, until recently an associate at Bin Shabib & Associates
Jimmy Haoula, managing partner, Bin Shabib & Associates
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