A total of 40 projects have been shortlisted for the first phase of the Land Department’s groundbreaking initiative to offer developers and investors a ‘Government guarantee’ to fund completion of selected premium developments.
Details of Tayseer, which effectively guarantees finance and completion of the selected projects, were revealed yesterday during a meeting with key developers in the offices of the Dubai property sector’s registrar and regulator.
The first phase of the initiative is expected to significantly boost liquidity in the market and bolster confidence in the sector, Sultan bin Butti bin Mejren, Director General of the Land Department, told the group which included the main players in the emirate’s property sector.
Supported by Marwan bin Ghulaita, Chief Executive Officer of the Real Estate Regulatory Agency (RERA), and senior officials of the Department, Mejren outlined the expected impact of Tayseer, which introduces a four way partnership between Dubai Government, through the Land Department, the UAE’s leading banks, developers and investors in the sector.
Announcing that official confirmation of the shortlisted selections would be released today, he said: ‘The bigger picture is that through this and other related initiatives the Department is introducing a different, comprehensive and coherent level of strategic management to Dubai’s property sector. This will offer clear transparency and in doing so inspire confidence among developers, end users and all those with an interest in Dubai’s property sector. It is linked with a clear commitment to manage supply and the overall quality of Dubai’s property stock and urban planned space through infrastructure development.
‘Now, once a project has been examined and found to be qualified for Tayseer, is approved and receives the Tayseer trademark, it immediately enjoys the status of having a Government guarantee that it will be completed and by a specific date. This is what the banks have been looking for in order to participate and we clear commitments from a group of banks to participate and offer both construction and end user funding.’ The focus of the first phase of this initiative are those projects which are under construction or almost finished, almost 30% of the total. These are projects in developments such as Business Bay, Dubai Marina and Jumeirah Lake Towers, areas with good infrastructure either already in place or being developed.
Bin Ghulaita confirmed that the process of examining projects to ensure they qualify for Tayseer status is extremely stringent and they have to meet a battery of criteria which is strictly applied. He said: ‘The Tayseer portfolio of projects has been put together with the specific aim of building on that trust which inspired so much interest in Dubai and its property sector.
‘It puts under one umbrella a selection of property projects scrutinised, approved and guaranteed by the Land Department and for which stringent due diligence has been carried out to ensure they meet our criteria for eligibility. These criteria require that adequate infrastructure is planned or in place, that the trust account is properly managed and financial reporting is full and timely. The technical report must show that a minimum of 60 per of construction is completed and that a minimum of 60% of the project is sold.
‘There has to be a clear statement of the strength and ability of the contractors assigned to the project and the channels and flow of cash to them from the developer must be shown. Enforcement of the criteria offers the banks the comfort levels they need to participate fully.
‘Dubai attracts more foreign direct investment than anywhere else in the region, much of this into the property sector. This first phase and subsequent phases of Tayseer offers a sound basis for such inward investment, inspires confidence and adds to its credibility.’ The Department confirmed during the meeting that senior official Khalid Al Mutawei has been appointed to head the team which will manage a separate dedicated Tayseer section for the department. Al Mutawei said: ‘Tayseer is all about trust and furthering the trust in Dubai. It is also putting liquidity back into the system.’ Mejren added: ‘Tayseer is guaranteeing projects are being delivered and on time.’