The HBR portal is in consonance with the UAE’s vision of a rebuilt and fortified property market, especially in Abu Dhabi and Dubai where projects suffered badly during the financial crash between 2007-10. But while its goals are complementary to government targets, the HBR portfolio does not deal with the rehabilitation of stalled off-plan properties.
To explain, an off-plan project involves construction of a building from ground up. Its capital is raised primarily by pre-selling the property, or units within it, at a price much lower than the projected market value. The difference between the purchase price and the selling price is the profit.
Meanwhile, the risk lies in whether or not the off-plan project will be completed according to schedule, or completed at all. Delayed handovers cost investors money. Worse, unfinished construction will mean loss or negative returns for investors. The failure to turn the properties over to investors is not uncommon, and this is typically because of developers going bankrupt.
During the economic crisis in the UAE, billions of dollars worth of property-development projects were put on hold. But as conditions eased, and with aid from the government, construction activity resumed.
Particularly in Dubai, where property values plummeted by as much as 60 per cent during the property bubble, the Dubai Land Authority has come at the forefront of resurrecting stalled off-plan projects. The agency’s Real Estate Investment and Promotion campaign initially developed investment opportunities to attract local and foreign capital in reinvigorating the market.
Under the campaign, the following were launched:
The campaign also saw to the formulation of the Tarabot Investor Service Charter.
It is important to note that the HBR portfolio is distinct from the properties being offered under the Dubai Land Authority’s campaign. Among many unique features, the HBR portal is headed toward the improvement on existing and currently operational structures, such as mixed-use buildings.