• Home
• /
• Local business

Trump to Dubai’s Developers: Be Realistic, but Keep Dreaming Big

Donald Trump, Jr., said that Dubai should take practical steps toward reviving its real estate business. Chief among them would be to try to soak up its excess property supply, improve regulations and transparency, and develop a market for secondary mortgages.

Trump, Vice-President of the Trump Organisation founded by his developer father, delivered the keynote address on the event’s opening day.

The younger Trump recalled his disbelief when he first learned of the ultra-luxurious Burj Al Arab hotel, with its 200 rooms and cost of close to $1 billion. Similarly, he related his astonishment, when he last attended Cityscape Dubai three years ago, at meeting a developer who had hoped to attract buyers with the help of unusual props at his exhibition booth: three robot-like models of Tyrannosaurs.

“The thing that made Dubai great was some of this excess,” he said. “Without projects like that,… how could Dubai have come as far as it did?”

The emirate has succeeded in creating a reputation for itself as a hothouse for adventurous developments, Trump said. “In Dubai, you’re limited by just two things: your imagination and the laws of physics.”

Dubai is arguably an extreme example of outsized ambitions, but its “mood of excess” in the years leading up to the financial crisis and collapse in property markets worldwide was not unique. “Everyone went over the top,” Trump said. “America did. Emerging markets did. Banks did. And finally, consumers did.”

Investors worldwide followed one another in a herd, and developers lost touch with reality by ignoring a project’s costs in pursuit of glory, he argued.

“I don’t think anyone saw the level of severity” of the downturn, he said, the Trump family included. He described the last 12 months as “the greatest learning year of my career.” Now, however, “it’s time to get realistic.”

Trump’s address concerned Dubai’s viability as a long-term investment, and it kicked off a day-long series of talks headlined: “Dubai, Boom or Doom.” He seemed to foresee neither boom nor doom for the emirate’s property market. Rather, recovery was likely to occur piecemeal, depending on each project’s location and desirability, Trump said.

“Certain areas are going to come back before others — because they are great, because they make sense,” he said. Trump observed that the construction of many projects here continues apace, and he answered skeptics by scoffing at the suggestion that Dubai has become “a dust bowl” amid the 
market’s collapse.

Trump’s company has a financial stake in Dubai, in an unfinished tower project on Palm Jumeirah. For now, the US firm and its local partner Nakheel have suspended work there. “When it makes sense, we’ll go forward,” Trump said. He described the project’s planned design as resembling a cross between a lotus blossom and a pineapple.

“We’re very much believers in the region,” he added, noting that he wanted “to see this project to fruition” before setting out in search of opportunities elsewhere in the Gulf.

In spite of Dubai’s setbacks, Trump advised developers here to try to maintain a sense of momentum. “Don’t lose that desire, the drive that made Dubai so special,” he counseled. If developers “pull out” of a place, “it makes it that much harder to get re-started.”

To expedite a property recovery, Dubai should consider making several changes, he said. First, developers and sellers must lower their prices to achieve sales and stimulate the market. “We have to be willing to negotiate… The days of relying 100 per cent on foreigners who are showing up with briefcases full of cash — they’re over.”

Secondly, Dubai is moving in the right direction by upgrading and clarifying its property regulations. However, it needs to make the rules and the industry more transparent, especially if it wants to attract foreign talent to come and work here, Trump said.

Finally, the emirate needs to develop a secondary market for mortgages, so as to help stoke demand from home buyers and absorb some of its excess residential capacity, he said.

Trump delivered his upbeat message with enthusiasm and good humour. And he seemed to want to allay any misgivings among his more than 100 audience members that he might be a ruthless egomaniac — a perception some people have of his father, known to many for his hard-edged role in the reality TV show 
“The Apprentice.”

The younger Trump acknowledged, for instance, that he and his father have sometimes lacked sensitivity to important cultural differences among various property markets.

“I know it’s un-Trump-like to admit that there’s something we did not know, but it’s true.”

· bruce@khaleejtimes.com