“Seeing is believing,” says Sanjay Chimnani as we look out of his 15th floor office through the haze of a sandstorm.
Below us are the construction sites and property developments of Dubai’s Business Bay.
Chimnani is the Manager of the Australian-based real estate agency Raine and Horne, which moved to Dubai in early March.
He says foreign property developers are investing in the UAE for its strategic location in the region.
Building development in the UAE has recovered from the global financial crisis in 2007 to again becoming a mega billion dollar business that attracts investors from all over the world.
“Dubai has become the most logical place to operate in the Middle East due to its strategic location and strong economy.” Says Chimnani. “It is amongst the top ten cities in the world to invest in and is a very important market for Raine and Horne to be involved in”.
They weren’t the first to arrive. LJ Hooker and Ray White are already well established.
“Ray White has recently opened an agency in Dubai before we did. The big top three Australian real estate agencies have all opened up offices in Dubai.”
“It’s too big a market to be ignored,” he says.
Despite Australian interest in the region, there are numerous cases of Australian developers losing money, along with their reputations in the Middle-East.
Marcus Lee knows all too well the problems and pitfalls in the UAE.
The accountant who worked for an Emirati developer says, “starting up a company in Dubai is generally a red taped roller coaster.”
Lee worked as a commercial manager for the large developer Nakheel but was arrested on fraud-related charges after a failed deal by the Queensland developer, Sunlands.
He spent nine months in prison and four years under house arrest in Dubai.
Lee, who was eventually found innocent, says developers still face uncertainty in the market despite government rules to control property after the GFC.
“In short the red tape and cross over requirements of Dubai and UAE Government agencies is immense. B does not follow A and D never follows C. Rules are made up and done away with at a moment’s notice all the time. There is no predictability whatsoever for any businesses in what may be required from one day to the next,” he says.
But so far Raine and Horne have not faced such problems.
Chimnani says, “The government regulatory authority has completely taken control of the market, this has gotten rid of speculators and left us with a very mature market with more long term investors.”
On moving to the region Chimnani says “the timing was right, there was a lot of regulation in the market which didn’t exist before 2009 and should there be another global financial crisis it would be corrected.”
This regulation and constant change in laws by government has left the market very unpredictable says Lee, “the laws are consistently changing and it’s important for Australian businesses to pay attention to this.”