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Opportunity awaits well financed projects despite the downturn. But, property buyers are looking for substance, not smoke and mirrors.

The economic crisis has halted progression on a number of international real estate projects as they struggle to find survival solutions.

Many highly leveraged developments whose success has been tied to achieving ‘off plan’ sales, are failing to secure sufficient buyers to maintain their debt position. Consequently, many new projects are on hold as developers look to reduce their exposure to risk by waiting for better market conditions.

Dubai, which benefited hugely from the opportunistic ‘bear market’ is now one of its victims, and the future of many ambitious projects now hangs in the balance.

However, Frank & Earnest who provide marketing solutions for some of the world’s leading real estate projects believe that the current market conditions, whilst intrepid, do offer advantages for those who aren’t so debt reliant.

Brett Gregory-Peake, Managing Director commented. “Much like the mortgage market, where cash rich owners can benefit from the low interest rates on offer, there are numerous advantages for cash rich projects.”

Brett says, “There is no need to rush into the market, so developers should be focusing on preparation. Buyers are still out there, but they are looking for credible investments that are low risk. Developers that can afford to finance construction without sales obligations will find a less competitive market, where the right approach and high quality materials will help them to stand out. Buyers are looking for projects with substance, not smoke and mirrors.”

Since May 2008, even the most celebrated projects have been put on hold, including Nakheel’s Trump Tower in Dubai and Cipriani in Las Vegas.

Harry Lewis, Director of Savills International commented. “Despite the fact that there are fewer buyers out there, given that fewer projects are launching, one could argue that it’s possible to achieve greater visibility in this market.”