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The DREC, established through a decree issued by the emirate's ruler, Sheikh Mohammed bin Rashid Al Maktoum, on June 16, will be responsible for building, investing and utilising commercial and industrial land and properties situated throughout Dubai. The corporation will be a public commercial institution, affiliated to the Dubai Executive Council, and will be able to sign property deals on behalf of the emirate.
Sheikh Mohammed appointed Ahmed bin Bayyat as the chairman of DREC's board, with Omar Mohammed Ahmed bin Sulaiman as his deputy. A day after the decree was issued, Hesham Abdullah Al Qasem was named DREC's chief executive, putting him in charge of the day-to-day operations of the corporation, including the drafting of the new body's strategic plan.
The launch of DREC has generally been welcomed by the local real estate sector, as it will give an accurate database of its land and property assets, which represent up to 30% of all commercial property in Dubai.
"This should enable the government to first determine the exact value of its landbank. This knowledge will allow it to decide what to do with what it holds and how to effectively manage it, " said Nicholas Maclean, managing director of property services firm CB Richard Ellis Middle East, to local press on June 18.
"If government property has a reputation for being properly managed, this will set a standard which could have an impact on the private sector. It's a very positive step," he added.
Beyond the immediate high profile that DREC will gain in the existing Dubai property market, the corporation will also emerge as one of the leading players in the world's real estate development sector.
Experts are also tipping that by consolidating the state's property portfolio, DREC will be in a position to free up unused land for commercial or retail development, encouraging foreign investment and opening the way for greater involvement in public sector real estate by the private sector.
With the authority to form partnerships and agreements with companies, institutions and persons it deems appropriate, DREC will have much more in common with similar governmental bodies in the West, where state property assets are managed by professional organisations.
The founding of DREC comes less than a month after Sheikh Al Maktoum ordered the setting up of the Deira Investment Company, established to develop property projects, with its first scheme being a massive redevelopment of the Deira district in downtown Dubai, which ultimately could have a budget of $20bn, in partnership with South Korean construction firm Sungwon.
Taken separately, the founding of the two corporate bodies could be seen as a strengthening of the position of the Dubai government in the property market. Taken together it seems that the state is overhauling the way it conducts its real estate business, consolidating it and making it more professional.