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Experts say property developers must be 'realistic' about demand

Supply must be managed by adopting a "realistic" view of market demand, top bosses at Al Hamra and Eshraq tell CW

A realistic view of market demand must be adopted by property developers [representational image].
A realistic view of market demand must be adopted by property developers [representational image].
Benoy Kurien, chief executive officer at Al Hamra Group.
Benoy Kurien, chief executive officer at Al Hamra Group.
Jassim Elsiddiqui, chairman of Eshraq Properties.
Jassim Elsiddiqui, chairman of Eshraq Properties.

Developers in the GCC must manage the supply of new projects with a realistic view of market demand, the head of Ras Al Khaimah-based Al Hamra Group has told Construction Week.

“The market expects quality homes that are affordable and sustainable,” said chief executive officer Benoy Kurien, commenting on what the group sees as the main opportunity for GCC developers in next 12 months.

“We see customers focusing on amenities, not only within the development, but also in the surrounding neighbourhood,” he added. However, he added that the current market situation “will pose challenges to many developers with regards to sales and financing of projects”.

READ: Ras Al Khaimah's Al Hamra reveals major branding shake-up

Kurien said the middle-income segment “is an important market that will continue to grow”.

INTERVIEW: Benoy Kurien, Al Hamra Group

Jassim Elseddiqi, chairman of Eshraq Properties, echoed similar views while responding to Construction Week: “Developers who were aggressively investing in projects over the past few years, especially at the peak of the market – over-leveraged their balance sheet to do so – would be facing a liquidity crunch in current market conditions.

“Launching off-plan sales at current market condition would not achieve the best returns on investment and would be value-destructive.”

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Construction Week - Issue 742
May 23, 2019