NEWS BRIEF 03 - Asteco Property Management€¦ · DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN |...

DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN | KSA

© Asteco Property Management, 2018 asteco.com IN THE MIDDLE EAST FOR 30 YEARS

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 03

SUNDAY, 21 JANUARY 2018


© Asteco Property Management | 2018 | asteco.com

IN THE MIDDLE EAST FOR 30 YEARS



REAL ESTATE NEWS UAE / GCC

FINDING OPPORTUNITIES IN DISTRESSED REAL ESTATE PROJECTS

THE FUTURE OF BITCOIN: BILLIONS OR BUST?

WHY AREN’T EXPATRIATES BUYING THEIR HOMES?

REAL ESTATE FORECAST FOR 2018: WHAT PEOPLE IN THE INDUSTRY THINK

A LOOK AT UK FIRM CARILLION’S PARTNERSHIP IN THE UAE

SAUDI ARABIA’S FORECASTS TOO ROSY FOR ECONOMISTS EVEN WITH NEW

HANDOUTS

VAT COULD IMPACT PROPERTY MARKET IN 2018, INCREASE COSTS, JLL SAYS

REAL ESTATE BUBBLES ARE HARD TO PREDICT

SAUDI ARABIA ISSUES TENDER TO BUILD 60 NEW SCHOOLS

DUBAI

PAYING TOO MUCH RENT IN DUBAI? IT'S FAR CHEAPER THAN A DECADE AGO

SURGE IN SUPPLY TO BENEFIT DUBAI TENANTS, BUYERS IN 2018

ANOTHER DUBAI PROPERTY OWNER EMBRACES CRYPTOCURRENCIES

DEYAAR REVENUES IN 75% SURGE TO DH751.6M

DAMAC CHIEF READY TO SELL 15% OF HIS STAKE AT RIGHT PRICE

CONSTRUCTION IS ON AT DH10M WARSAN VILLAGE CLUB

OPENING AN ONLINE WINDOW TO BUY IN 7 DAYS

DOWNTOWN, PALM WEATHER SOFT MARKET CONDITIONS BETTER

PROPERTY OWNERS EYEING AN EXIT FIND IT TOUGH GOING IN DUBAI

NEIGHBOURHOOD WATCH: THE GREENS

BITCOIN IN DUBAI REAL ESTATE: IS IT HERE TO STAY?

MOHAMMAD ALMAZROOEI EXPLAINS GGICO’S VERSION OF A FAMILY HOME

LIVE A RESORT-STYLE LIFE

DUBAI TO GO ALL OUT FOR OVERSEAS BUYERS

HOTEL GROUP JUMEIRAH ENDS SEARCH FOR NEW CHIEF EXECUTIVE

DUBAI’S F&B SECTOR COULD DO WITH A RENTAL COOL-OFF


© Asteco Property Management, 2018 asteco.com

DEFINING LANDSCAPES SINCE 1985



REAL ESTATE NEWS DUBAI DEVELOPERS GO SLOW ON HOME DELIVERIES

DUBAI’S MOST EXPENSIVE COMMUNITIES TO RENT OR BUY

DUBAI'S MARMOOM RESERVE HERALDS NEW ERA OF ADVENTURE TOURISM

DUBAI RENTAL MARKET TO REMAIN 'SUBDUED' IN 2018, SAYS CAVENDISH MAXWELL

IS 'AFFORDABLE' HOUSING REALLY AFFORDABLE?

APARTMENT-VILLA PRICE GAP NARROWS IN DUBAI

MORE SUPPLY TO WEIGH ON DUBAI HOUSE RENTS IN Q1 OF 2018

DUBAI REAL ESTATE PLANS TO ATTRACT GLOBAL INVESTORS

DUBAI HOUSING HEADED FOR OVERSUPPLY?

OFF-PLAN IS OFF THE CHARTS

REVEALED: 5 MOST EXPENSIVE AREAS TO RENT AND BUY IN DUBAI

EMAAR'S NEW DUBAI ISLAND DESTINATION

DUBAI TO HOST FIRST ARAB LAND CONFERENCE

DAMAC CHAIRMAN TO SPEAK ON DIGITAL SKILLS

ABU DHABI

RESIDENTIAL REIT COMPLETES DH772M IN NEW TRANSACTIONS

TABARAK BUYS MAJORITY STAKE IN ABU DHABI’S TASWEEK REAL ESTATE

DSI IN TALKS FOR SECURING DH750M CONSTRUCTION CONTRACTS IN AL AIN

NORTHERN EMIRATES

UPSCALE PROPERTY PROJECTS WORTH DH2.7B LAUNCHED IN SHARJAH

WHY INVESTING IN SHARJAH PROPERTY IS A NO-BRAINER

SHARJAH INT'L RE-OPENS DUTY FREE AREA AFTER MAJOR REVAMP

INTERNATIONAL

LULU GROUP UNIT ACQUIRES EDINBURGH HOTEL FOR $120M

CARILLION RESCUE HOPES WERE UNDERMINED BY BRITISH BANKS, COURT

DOCUMENTS SHOW

BRITAIN’S CARILLION COLLAPSES, FORCING GOVERNMENT TO STEP IN

IRELAND RACKED UP $2.8 BILLION OF COMMERCIAL PROPERTY INVESTMENTS IN 2017






FINDING OPPORTUNITIES IN DISTRESSED

REAL ESTATE PROJECTS Thursday, January 18, 2018

The introduction of the suspended/cancelled project list by the Dubai Real Estate Regulatory Agency (Rera) has

increased visibility on the number of real estate projects in Dubai where construction works have either not

commenced or have subsequently been suspended.

While there are likely to be a variety of issues that have contributed to the suspension of such real estate projects,

it is likely that the recent cooling in the off-plan sales market has been a determining factor.

Notwithstanding current market conditions, there has been an increase in potential purchasers seeking to acquire

or enter joint venture arrangements, in relation to distressed projects.

While a distressed project sale may provide an opportunity to purchase below market value, it is important for a

potential purchaser to identify and consider the specific factors that led to the project becoming distressed, at the

same time as assessing the potential benefits.

Features and benefits of a distressed project sale

In addition to wider market conditions, there are likely to be a variety of circumstances, which give rise to a

distressed project sale. These could include an owner identifying in the early stages of a project lifecycle that it will

not be able to comply with its financial obligations, e.g. the owner being unable to repay an upcoming loan in

relation to the project, or its legal obligations, e.g. a master developer insisting that the owner commence

construction of the project within an upcoming timeframe or be liable to pay penalties.

A potential purchaser seeking to acquire a project at a distressed sale price may in turn be able to offer the

existing owner either the necessary cash funding, the required delivery/sale expertise or both.

To help bring together owners and investors interested in reviving stalled projects, the Dubai Real Estate

Investment Promotion and Management Centre has established the Tanmia scheme, which aims at revitalising

incomplete projects.

Owners can approach the centre for inclusion of their distressed project and investors can approach the centre to

register their interest in funding or acquiring a distressed project. The centre has also established the Tayseer

scheme, which is a guaranteed funding initiative for certain pre-qualifying, distressed projects.

We recently advised a prominent sub-developer based in Dubai who had acquired a distressed project in an up-

and-coming master community. A number of the units in the project had already been sold to third-party

purchasers.

The sub-developer was able to sell the remaining units and terminate or settle with purchasers who were in

default of their payment obligations, ultimately completing and delivering the project, to the benefit of all

stakeholders.

What to consider

Some of the key considerations include:

• Ensuring that the entity presenting itself as the owner of the project is in fact the Dubai Land Department (DLD)-

registered owner.






• Ensuring that the land interests have been fully secured, both in relation to the full payment of the land and

registration of the land interest at the DLD.

• Ensuring that the project has not actually been cancelled by Rera, as once Rera has cancelled a project, the

special judicial committee at the Dubai Courts is then responsible for overseeing the liquidation process, which

would prevent a further sale of the asset, unless by way of a court-sanctioned public auction.

• Enquiring as to whether the land is encumbered by any third-party interests, e.g. by way of mortgage, as such

interests may continue to encumber the land unless restructured or removed.

• Enquiring whether any off-plan sales have been registered at the DLD, as registered owners can then enforce

their rights against the new owner.

• Considering that any off-plan sales may not yet be registered and registration fees on the Interim Real Estate

Register may be payable as the new owner of the project.

• Ensuring that the contracts entered into with third-party purchasers, design and construction contractors and/or

the master developer are effectively assigned to the new owner, along with a careful review of the new owner’s

rights, financial and legal obligations under those agreements, and whether the potential purchaser has the

capabilities to fulfil those obligations.

• Undertaking full financial due diligence to ensure the feasibility of the project, having considered: a) the

remaining amounts that are likely to be received, both in relation to sold and unsold units within the

development; (b) the existing third-party interests that encumber the land/project; and (c) the outstanding

liabilities in order to complete the project.

While a distressed project sale can be an attractive prospect, it will likely carry certain financial or legal risks and,

therefore, the necessary due diligence should be carried out and legal advice obtained to ensure that those risks

are mitigated as much as possible.

Source: Gulf News

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THE FUTURE OF BITCOIN: BILLIONS OR

BUST? Wednesday, January 17, 2018

For just 18 bitcoin, a British-themed studio apartment can be all yours. And if you have 46 of these digital coins to

spare, you can up it to a two-bedroom apartment. Some 150 homes at Aston Plaza & Residences in Dubai Science

Park are available for purchase via the cryptocurrency, making it reportedly the world’s first major property

development where virtual currency buys real estate.

The project offers buyers a chance to “realise their bitcoin gains with a good-quality, appreciating asset”. It is also

meant to underpin the developer’s “strong commitment to the future of the cryptocurrency market and the

bitcoin community”. As Michelle Mone, one of the British entrepreneurs behind the idea, tells CNBC, “Bitcoin is the

currency of the future and it cannot be ignored.”

However, there’s another bit about bitcoin that also cannot be ignored: it is a highly volatile currency without any

legal protections. Besides, many analysts believe that the crypto-bubble is about to burst. Jamie Dimon, CEO of JP

Morgan, famously branded bitcoin as a “fraud” and claimed he would fire any employee trading in it for being

“stupid”. Similarly, The Guardian newspaper recently summed up the bitcoin saga with a provocative headline:

Bitcoin investors hoping to make billions may end up with a sack of fool’s gold.

So should you jump on the crypto-bandwagon for your property dealings? Here are the pros and cons to dealing

in bitcoin.

The upside

• Bitcoin transactions take mere minutes to process, and can be done from anywhere in the world at minimal or

even zero fees. For property deals, the savings will be considerable.

• Real estate firms do not need to implement stringent payment card industry standards that are required for

processing credit card data and other sensitive customer information. In fact, to process bitcoin transactions, all

you need is an app on a smartphone or tablet.

• Bitcoin is powered by blockchain, which stores multiple records of every transaction, making the property deals

resilient to hacks or human errors.

• Once it is confirmed by the bitcoin network, the transaction becomes final and irreversible. So real estate firms

do not have to worry about fraud, consumer chargebacks or hackers using stolen credit cards.

• Since bitcoin is decentralised and not owned by any single entity, it is impervious to changing government

policies, economic downturns, interest rates or hyper-inflation. For many, this makes bitcoin a truly global and

safe currency to transact in.

• Since the blockchain records titles and ownership transactions — and this information is accessible to everyone

— buyers can potentially save on title insurance.

The downside

• The legality of using bitcoin for real estate transactions remains ambiguous. While bitcoin is not considered

illegal in most parts of the world, including the UAE, clear guidelines and regulations on its use are still a work in

progress.






• For the government, it will be difficult to enforce tax laws on real estate transactions done by private parties.

• The cryptocurrency tracker, Digiconomist, estimates each bitcoin transaction consumes 250kWh of electricity,

which is enough to power homes for nine days. And by 2020, the bitcoin network is expected to consume as

much electricity as the entire world does today! This is clearly unsustainable, and it is unlikely green building

projects would want to be associated with such a massive electricity-guzzler.

• Since a bitcoin transaction cannot be reversed, property buyers need to be careful about investing in ongoing

projects — if the construction stalls or goes under, getting refunds could be an uphill battle.

• Moreover, since the value of the cryptocurrency tends to fluctuate wildly, arriving at the exact number of

bitcoins to be paid back might turn out to be problematic — unless the property seller and the buyer have also

agreed upon the value of the property in fiat currency.

• Bitcoin transactions are not linked to any personally identifiable information, such as a name, email ID or

address. While this protects users from identity theft, the anonymous nature of the transactions has also brought

bitcoin notoriety — the cryptocurrency is reportedly being used for money laundering, drugs trade and tax

evasion. So real estate firms might need to implement additional know your customer (KYC) checks for bitcoin-

funded deals.

Source: Gulf News

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WHY AREN’T EXPATRIATES BUYING THEIR

HOMES? Wednesday, January 17, 2018

More than 200 nationalities call Dubai their home. From Indians, Chinese and Samoans to Chileans, Moldovans,

Germans and the British, nationalities from every corner of the world love Dubai and live here with their families.

They come here in search of economic opportunities and improved lifestyle, and because they consider Dubai to

be a safe haven for their families and their business. Regardless of why they were drawn to the iconic city, a

recent study by DIFC Wills & Probate Registry (WPR) found that 64 per cent of residents called Dubai home for a

period longer than had originally planned. But does this actually mean most expatriates end up buying homes?

Somewhat surprisingly, home ownership rates among expatriates living in Dubai remains low. So why do

expatriates continue to rent, especially when they would like to live in this country longer?

Decide early

When it comes to the decision to own a home, the sooner you make it, the better it is. As the city continues to

evolve, livings costs and conditions change and this year is expected to be no different. To quote His Highness

Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, “We

are at the start of the road to our vision, for every peak we reach overlooks the next. Only those who strive to

achieve are on top.” In many ways this encapsulates Dubai’s residential development. Coupled with the UAE’s

2021 vision to be among the best countries in the world, Dubai continuously strives to be the smartest, most

sustainable city on earth.

A comfortable quality of life, ease of doing business, economic opportunities, and growth opportunities are all

factors that make Dubai the best destination for home ownership. So while many expatiates may have stayed for

five or 10 years, it is important to note that Dubai is reborn every year, making each year different from the last.

Each new project inspires both tourists and residents, and also provides new opportunities for investment and

recreation.

In addition to the ever-evolving residential property landscape, many expatriates also have a strong sense of

mobility. The urge to remain mobile may outweigh the desire to own a home, even if the expatriate has enough

wealth to meet the down payment requirement. Also in many cultures buying property is considered a significant

purchase and is often associated with a “forever home”, not necessarily a “stepping stone” in a longer journey.

Even with mobility, buyers have chances to rent at high yield of around 7-9 per cent. Exiting from the market can

be rewarding as well since prices grow at a good rate, making buying a rewarding experience.

The Dubai residential property market has gained from the visionary leadership of Shaikh Mohammad. It has now

become a hub for regional and international networks and businesses.

Where do you live?

When you meet someone for the first time in Dubai, you often ask, “Where do you live?” The place of residence

often tells you about the person’s hobbies and interests. For instance, someone living in Dubai Sports City could

have an interest in sports or would enjoy living close to the lush fairways. A home is not just where you sleep and

eat but it is the community and connection to the city that you create. Research has shown that connection to the

community is a strong determinant of happiness.






So with a stable, attractive residential real estate market, why are more expatriates not buying their homes?

Perhaps, they have not spent adequate time organising their finances to realise that they can actually afford to

buy. Also, many prefer to live in places where they cannot afford to buy, and choose to rent. And still for others, it

may be the legal ramifications if they are not able to cover their monthly mortgage payments.

Regardless of their reasons, it is worth understanding the rules, regulations and financial benefits before making

a decision. Debunking myths and preconceived notions can help expatriates shift from a temporary Dubai mind-

set to understanding the economic, lifestyle and community benefits of purchasing a home.

What it costs

It is critical to understand the financial differences. As a tenant you are required to pay annual rental, which is

based on current supply forecasts and is expected to increase an average 5 per cent every year. Other expenses

associated with rentals include a 5 per cent broker commission each time you rent, 5 per cent municipality fee

and a Dh215 Ejari registration.

When considering purchasing a home, a buyer needs to consider a down payment of around 25 per cent, bank

interest rates, service charges, which cost approximately Dh12 per square foot, a one-time 2 per cent brokerage

fee and a Dubai Land Department transfer fee of 4 per cent. When many expatriates breakdown the costs,

compared with long-term renting, and add the lifestyle and community benefits, purchasing their own home

remains a very attractive option. Purchasing allows expatriates to invest for the future, and considering the length

of time expatriates are staying in Dubai, it makes the most financial sense.

As we ring in the New Year it is worth contemplating your future, making an investment in the place you call

home.

Source: Gulf News

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REAL ESTATE FORECAST FOR 2018: WHAT

PEOPLE IN THE INDUSTRY THINK Wednesday, January 17, 2018

We asked a selection of agents, developers, property data analysts for their views on what will happen in 2018.

Here’s what they said.

Ozan Demir, operations and research, Reidin

Although rental yields have trended lower structurally since 2009, of all the major cities analyzed, Dubai remains

far and above the highest yielding city, suggesting that there is ample room for further yield compression. In the

demand and supply equilibrium in the first nine months of 2017, level of transactions were still 40 per cent less

than the peak in 2013-2014, but the number of transactions have risen by more than 20 per cent compared to the

same period in 2016. On the other hand, upcoming supply is expected to reach 140k units in the next couple of

years. If the project realization rate by the developers increase (50 per cent in the last 3 years) that may prevent

prices to move upwards and also pressuring the rentals.”

Ibrahim Al Ghurair, founder of Muraba Properties

In a market full of real estate opportunities, one can now be more and more selective. After a huge boom in

recent years, the real estate market in Dubai is maturing. With this maturity comes higher expectations from

buyers and demand for properties with finer design elements and of higher quality. The need for differentiation

will play a key role in the luxury market in 2018. In terms of integration of the exterior with the interior, the

finishing, quality of fittings and fixtures, and overall attention to detail will be important. We have tried to address

this with our first project Muraba Residences on Palm Jumeirah.

Anton Yachmenev, Managing Director of Forum Group

The property market in Dubai is constantly improving and, it is experiencing many changes that will have an

impact on the luxury sector. The luxury sector is a unique in Dubai. There is an oversupply in the so-called “upper

scale segment”, but a huge number of those properties don’t epitomize true luxury. What we do expect to see in

2018 is the emergence of sophisticated buyers in the luxury market who have actually done their homework. We

will start to see buyers who understand the distinction between true luxury and aspirational luxury and that is a

huge positive for us.

Alexander Von Sayn-Wittgenstein, luxury sales director, Luxhabitat

For buyers in 2018, check the developer’s reputation and take location and completion dates into consideration

while negotiating price. As for sellers, the prices are expected to flatten further so don’t be in a hurry to sell your

property just yet. Renting it would be a good option instead.

Marion Volpi, chief sales officer of Kensington Properties

One of the trends for 2018 will be affordability, but affordability will have to come at a cost and I’m not referring

to financial terms. We are currently experiencing a somewhat challenging property market, where prices are

naturally soft but in order for developers to keep the ticket prices of residential property at what can be described

as affordable to the average person, the actual size of the finished unit will have to be reduced. We have seen this

trend already occurring by many developers in locations such as JVC, Dubai South and Dubailand etc. Building






smaller units will continue next year as this will guarantee the property’s affordability. Buyers or investors will

now have to get used to smaller sized property units when choosing the “affordable” option.”

Paul Spargo, commercial director, Propertyfinder

The trend of decreasing prices across the market continues as observed since their peak in mid-2014. Falling

prices makes buying a property more realistic for a larger Dubai population. Renters are moving into the buyer

category, preferring to pay off their own mortgage, instead of their landlord’s. Dubai villa rents have experienced

the biggest decline of all the categories. This may be due to a significant number of affordable villas released to

the market in areas such as Jumeirah Village Circle and Al Furjan. Looking to 2018, price decline may continue to

ebb, and transactions – especially for the middle-income segment – are expected to remain strong.

Source: Gulf News

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A LOOK AT UK FIRM CARILLION’S

PARTNERSHIP IN THE UAE Monday, January 15, 2018

Carillion is a name embedded deep in the UAE’c construction space, through its joint venture with Al-Futtaim’s

construction arm. The entity since its formation in 1999 had ben associated with some of the biggest and most

complex development works in the country, including that of the Dubai Marina and early last year for a Dh2.2

billion project to build three “Theme Districts” at the Expo 2020 site.

Al-Futtaim has not issued a statement so far on what the liquidation process initiated by Carillion’s UK head office

would mean for the UAE venture. The website currently lists “Carillion Construction Overseas Limited, the

international contracting and services group from the United Kingdom” as holding 49 per cent in the joint venture.

It’s not clear whether there was any change in the shareholding pattern in the recent past.

The original Al-Futtaim venture was with Wimpey, another UK headquarter contractor, in the early 1970s. One of

the first big contracts was for Al Maktoum Bridge (in 1974) and the Dubai Aluminum smelter (in 1977).

In 1994, following Tarmac’s acquisition of Wimpey, Al-Futtaim Wimpey was renamed Al-Futtaim Tarmac. It was

also the year when the work on Deira City Centre commenced.

And then in 1999, there came the Tarmac PLC de-merger and Carillion PLC was launched. It then led the way for

Al-Futtaim Carillion’s formation.

Source: Gulf News

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SAUDI ARABIA’S FORECASTS TOO ROSY FOR

ECONOMISTS EVEN WITH NEW HANDOUTS Thursday, January 18, 2018

Saudi Arabia’s government expects record spending to deliver a strong economic rebound in 2018. Economists

say it’s too optimistic, with officials underestimating the impact of new taxes, subsidy cuts and oil prices.

Even after King Salman ordered additional cash handouts this month to mitigate the toll of austerity on

households, the median estimate of five economists surveyed by Bloomberg is 1.6 per cent growth — well below

the 2.7 per cent in the Saudi budget — with predictions ranging from 0.7 per cent to 2 per cent.

Below are some key reasons for economists’ scepticism:

Oil still king

The government is planning record spending this year to boost growth and help companies adjust to Crown

Prince Mohammad Bin Salman’s strategy to reduce the kingdom’s dependence on oil.

But despite efforts to diversify, oil remains key, and the budget includes a 12 per cent jump in crude revenue.

That’s based on a price of about $63 per barrel, according to estimates by Bloomberg Economics.

Brent crude is trading at almost $70 a barrel. But the price was $115 as recently as 2014, and the still only partial

recovery weighs on the broader economy and not just the oil sector, said Raphaele Auberty, Middle East and

North Africa country risk analyst at BMI Research, which predicts overall growth of 1.6 per cent this year. “We’re

definitely more cautious than the Saudi government,” she said.

Assessing handouts

Several of the economists raised their growth estimates after Saudi Arabia said it would spend an additional 50

billion riyals to boost civil servant salaries and ease the burden of a new value-added tax and subsidy cuts on

citizens.

Though significant, it won’t be enough to bring non-oil growth in line with the government’s 3.7 per cent forecast,

according to Ziad Daoud, chief Middle East economist for Bloomberg Economics. That’s up from 1.5 per cent in

2017.

“It’s really hard to get that 3.7 per cent figure — even if we assume that people will spend all the additional

income they’ll get from the government,” he said.

Tax strain

A value-added tax of 5 per cent, tripling of electricity tariffs for some customers and higher gasoline prices all took

effect on January 1, raising the cost of living for many Saudis. Companies also face new fees to employ foreign

workers, and a levy on foreigners’ dependents will increase in July.

The government’s handouts and a cash-transfer programme in place since December to compensate lower-

income households for the changes won’t fully offset their impact, Monica Malik, chief economist at Abu Dhabi

Commercial Bank, said in a research note.

“On an individual household basis, we believe that some will not be fully insulated from the impact of fiscal

reforms, particularly those working in the private sector and expatriates,” she said. Malik predicts 1.4 per cent

non-oil growth and an overall 0.7 per cent expansion in Saudi Arabia this year.






Shake-up

Mohammad Bin Salman’s shake-up is aimed at making Saudi Arabia’s economy fit better with the modern world.

The reform programme includes selling a stake in the state-run oil giant Aramco, opening the stock market to

more foreign investment and creating the world’s largest sovereign wealth fund.

But there have also been significant shocks. The November arrest of dozens of prominent princes and

businessmen, including billionaire investor Prince Alwaleed Bin Talal, in a stated corruption probe is the most

obvious example; the spat with neighbouring Qatar is another.

“Uncertainties linked to the impact of the anti-corruption probe on the private sector, the breakdown of the

stimulus package, and the funding and timing of off-budget mega-projects keep us conservative on our growth

assumptions,” Bank of America Merill-Lynch economist Jean-Michel Saliba said in a recent research note. He

revised his growth estimate to 1.7 per cent from 1.3 per cent after the announcement on handouts.

Aramco ready to IPO in second half, awaiting govt decision on venue — CEO

Saudi Aramco’s Chief Executive Amin Nasser said on Thursday that the initial public offering (IPO) of the state oil

giant is still planned for the second half of 2018, but the government has not yet made a decision on the listing

venue.

“The company is ready for listing in 2018 when the decision is taken on the listing venue,” Nasser told reporters at

the company’s headquarters.

“We want to see if there is going to be a listing in another market (in addition to the Saudi Tadawul). There is a

committee that is formed that looks into it and whenever the decision is taken the company is ready to

implement.” The sale of up to 5 per cent of Saudi Aramco, is a centrepiece of Vision 2030, an ambitious reform

plan to reduce the economy’s dependence on oil.

Nasser said the plan remains to list the whole company rather than creating a subsidiary to IPO.

Source: Gulf News

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VAT COULD IMPACT PROPERTY MARKET IN

2018, INCREASE COSTS, JLL SAYS Monday, January 15, 2018

The introduction of value added tax (VAT) will bring volatility and uncertainty to the UAE’s property sector, which is

expected to continue to decline in 2018 amid increased supply in some segments of the market, according to

broker JLL Mena.

The five per cent levy, introduced on January 1, does not apply to residential rents and first supply of new homes,

but is already adding pressure to an already subdued property market, which suffered declines last year.

“The UAE real estate industry is entering into a transitional phase, with VAT now in effect and key stakeholders

seeking to decipher its immediate and longer term impact,” said Craig Plumb, Head of Research at JLL MENA.

“Although VAT does not apply to residential rents and sales of new residential property, other real estate sectors

could be negatively impacted by increased costs and cash flow challenges.”

Weak economic growth, jobs cuts, lower housing allowances and increase in supply hit the UAE’s property sector

last year as both rents and prices continued to slide in some segments of the market.

In Dubai, apartment prices in the fourth quarter dropped 4.2 per cent year-on-year, while villa prices dipped 2.4

per cent year-on-year, according to JLL. Declines were steeper in Abu Dhabi, with apartment prices plummeting 14

per cent year on year in the fourth quarter and villa prices plunging 12 per cent year-on-year.

Nevertheless, off-plan residential sales in Dubai rose to their highest level in 2017 since the 2008 financial crisis,

with their share of total transactions rising to 60 per cent in 2017 from 10 per cent in 2010 thanks to attractive

payment plans by developers. A total of 25,600 off plan properties were bought in 2017, compared with more

than 34,800 sales recorded in 2008.

The UAE government introduced VAT this year as part of plans of shoring dwindling government income from oil.

The levy is creating complications in some sectors in its early days of implementation, including real estate.

“One of the main complications for the construction sector will be the treatment of goods delivered after 1

January 2018 where prices have already been fixed,” said JLL. “The main concern for contractors will be the impact

of VAT on cash flows, which could lead to a downward revision in payment times in construction contracts.”

An expected oversupply in the property market is another concern in 2018. In Dubai, around 570,000 units of new

supply could enter the market by 2020, representing an average annual increase of 8 per cent, according to JLL.

“The recent activity in the [Dubai residential] market suggests that confidence has returned to both investors and

developers, however it is worth noting that the number of new launches are significantly below their peak levels

in 2006/2007 and the volume and the value of sales are also below levels recorded during 2013/2014,” the report

said.

“As the market absorbs additional units, it is expected that prices will continue adjusting (downwards) with

occupancy levels following a similar trend as supply growth outpaces potential demand.”

Source: The National

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REAL ESTATE BUBBLES ARE HARD TO

PREDICT Tuesday, January 16, 2018

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their

senses slowly, one by one, said author Charles Mackay.

There is a litany of research surrounding the formation of an asset bubble on how and if even possible to identify

them. Tulip mania is considered to be the first recorded speculative bubble in history dating back to the 1600s

during the Dutch Golden Age. It was popularised in the book Extraordinary Popular Delusions and Madness of

Crowds published by Charles Mackay in 1841. He uses the tulip mania to highlight the point that crowds usually

behave irrationally, leading to extraordinary price movements that cannot be justified by fundamentals. During

the episode, prices for tulips increased 10-fold in 83 days before crashing to its original price.

Another famous example quoted in Mackay's account is that of the 'South Sea Bubble'. The South Sea company

was a British joint-stock company founded in 1711 created as a public private partnership to reduce national

debt. The company was also granted a monopoly to trade with South America. However, at that time, Britain was

involved in the War of Spanish Succession, and any trade from that region was doubtful. However, once again the

madness of crowds and irrational exuberance sent the stock price sky rocketing seven times in 210 days,

eventually leading to its collapse. In 30 days since the peak, prices had reverted to its original flotation price.

In recent times, one of the most famous bubbles in the equity markets was the dotcom bubble in 2010. It was

fuelled by cheap money, easy capital and pure speculation, causing the Nasdaq to rise by 165 per cent 24 months

before the peak. In this case, investors overlooked fundamentals, causing valuations of dotcom companies to

double or triple overnight, which eventually led to the bubble bursting and the Nasdaq falling 63 per cent in the

subsequent 24 months.

In Dubai, the DFM index rallied 265 per cent (2012-2014), surpassing that of the dotcom bubble, before crashing

35 per cent. This was fuelled by a cornucopia of factors which included the 'euphoria effect' due to the win to host

Expo 2020. The rally came to a halt in mid-2014, triggered by the crash of oil prices.

In hindsight 2020, both these events look obvious that a bubble formation was in the works and prices would

eventually implode. They followed the stages laid out in the bubble cycle; stealth, awareness, mania and finally

the blow off. However, the predictability of a bubble has been argued by Nobel Prize economist Eugene Fama that

it is not possible. He does not believe that security prices exhibit price "bubbles," which he defines in his Nobel

lecture as an "irrational strong price increase that implies a predictable strong decline". He calls the term

"treacherous".

However, a recent paper published at Harvard University by Robin Greenwood disagrees with his notion that

bubbles can't be predicted. The paper states that "although sharp price does not predict unusably low future

returns, they do predict a heightened probability of a crash". It further states that if prices increase 150 per cent

above market returns, there is an 80 per cent probability of a crash.

In the real estate market, the largest crash in recent times was during the World Financial Crisis (WFC) of 2008. A

closer look into Dubai and California reveals that both cities rallied 50 per cent and 30 per cent respectively (24

months before their peak). During the WFC, the housing market in California crashed by 32 per cent whereas

Dubai real estate assets declined by 29 per cent.






A look into the second run-up (2012-2014) of real estate prices in Dubai reveals that assets on a city-wide basis

appreciated close to 50 per cent. However, unlike the WFC, markets have had a soft landing falling only 13 per

cent in 24 months. We opine that this time around, there has been lower amount of speculator activity as long-

term investors enter the market, along with stricter government regulations.

Source: Khaleej Times

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SAUDI ARABIA ISSUES TENDER TO BUILD 60

NEW SCHOOLS Wednesday, January 17, 2018

Saudi Arabia's education ministry announced on Wednesday a tender for private companies to build and

maintain 60 schools, as part of economic reforms designed to ease pressure on the state's finances.

Tatweer Buildings Co (TBC), a state-owned corporation that manages projects, said the winning bidder would be

awarded a long-term concession to design, build, finance and maintain facilities for 60 schools in Jeddah and

Mecca, from kindergartens to secondary schools.

In the past, the government built such infrastructure solely out of its own funds. But low oil prices have severely

strained its finances, prompting authorities to seek the participation of private investors.

The upcoming tender, the first in a series, is for a public-private partnership (PPP) in which a private firm or

consortium would be paid to build and then operate facilities over a period, before they were eventually

transferred to the state.

Potential bidders are requested to express interest by Feb. 7, TBC said, adding that it would soon hold a

conference in Riyadh for property developers, investors and financial institutions, as well as legal and technical

professionals.

Under reforms announced in 2016, Saudi Arabia plans to use PPPs to give responsibility for building and

operating much of its infrastructure, including school and hospital buildings and airports, to local and foreign

companies, creating tens of billions of dollars of business opportunities.

As one of the very first Saudi PPPs, the TBC project could help to determine this strategy's success or failure in

coming years, and the level of foreign investor interest.

Officials have said they will permit foreign investors to take 100 percent ownership of companies and facilities in

the health and education sectors, with ministries becoming pure regulators rather than service providers.

Source: Arabian Business

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PAYING TOO MUCH RENT IN DUBAI? IT'S

FAR CHEAPER THAN A DECADE AGO Tuesday, January 16, 2018

Rents in the top cities around the world hit residents in the pocket - and Dubai is no different.

With its location by the Arabian Gulf, entertainment, futuristic vibe, tax-free income status and safety record,

property prices are naturally going to be on the higher side, and this is passed on to the rental market.

But while those just arriving in the emirate may take a deep breath when they see how much it costs to rent a

home for a year, they should maybe count themselves fortunate that rates have fallen significantly compared

with a decade ago.

Data released by the property services company Asteco shows that renting a three-bedroom villa in the Jumeirah

area would have set you back by Dh325,000 in 2008, while the average cost in 2017 was Dh175,000.

Similarly, a five-bedroom villa on Palm Jumeirah (for those living the dream), would have set you back on average

Dh800,000 in 2008, but is now at a level of Dh500,000.

A one-bedroom apartment in Dubai Marina meanwhile is now at almost half the cost of what it was in 2008, as is

a three-bedroom apartment on Sheikh Zayed Road.

The data shows the property market journey, from the global financial crisis after 2008 which saw rents plummet,

to the rise in rents from 2012 to 2014, when the local economy recovered and market confidence returned with

Dubai winning the right to host Expo 2020. Asteco said the market peaked in the second quarter of 2014.

Rents then started dipping again after 2015 due to the strength of the US dollar, low oil price and rising supply in

the Dubai market.

"2016 saw a significant amount of new project launches and deliveries, resulting in moderate but steady declines

in sales prices and rental rates," it said in a report.

For 2018, it expects rental rates to "continue to come under pressure" as a result of the amount of supply

projected for delivery this year, which currently stands at 23,000 apartments and 8,500 villas.


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SURGE IN SUPPLY TO BENEFIT DUBAI

TENANTS, BUYERS IN 2018 Tuesday, January 16, 2018

With 23,000 apartments and 8,500 villas scheduled for handover in Dubai in 2018, significantly more than the

supply in 2017, tenants and investors will stand to benefit by way of more negotiating power, a report from

Asteco, a real estate consultancy, said.

While 2016 and 2017 saw a significant amount of new project launches and deliveries resulting in moderate but

steady declines in sales prices and rents, 2018 will follow similar trends although project launches are anticipated

to ease off as the market finds a new equilibrium, Asteco said.

"2018 is set to be another favourable year for tenants with rental rates predicted to incur a marked drop as a

result of the sheer amount of supply projected for delivery this year."

In 2017, Dubai saw the delivery of 13,000 apartments, 3,600 villas and 2.6 million sqft of office space.

"Investors will continue to be more sensitive to the price point of properties as opposed to the price per square

foot, meaning units that were previously advertised below the Dh1,000 per sqft mark will be marketed for

instance at below Dh500,000 for studios or Dh1 million for one-bedroom apartments to entice take-up."

The consultancy argued that in order to stimulate demand for completed properties and increase transaction

activity in this sector, the UAE Central Bank would need to relax their LTV (loan to value) ratios to make home

ownership more accessible to a large proportion of the local and overseas population. "However, there is no

indication of any such changes in the short term."

Although residential sales and leasing is generally exempt, the introduction of value-added tax (VAT) will indirectly

affect tenants and investors as the tax is applicable to items such as maintenance, utility and agency fees.

However, given current market conditions, some of these charges are expected to be initially absorbed by

owners/landlords, Asteco said.

"While VAT affects all of us, the impact for tenants will be negligible. The commercial market will adjust

accordingly as we see the system successfully implemented nationwide," said John Stevens, managing director,

Asteco.

However, following the VAT introduction, which is applicable to the commercial sector, there has been concern in

the market on how this will affect both tenants and investors. "Despite the fact that it is expected to dampen

market sentiment in the short term, Asteco believes that in the long term, it will ultimately boost the economy."

In 2017, apartment rents softened steadily with decreases ranging from two per cent to four per cent per quarter

on average. Drops in sales prices were slightly less prominent with variations of zero per cent to four per cent.

The villa market fared similarly with average quarterly declines in sales prices and rental rates of two per cent and

three per cent respectively.

"2017 recorded discernible contractions across all asset classes. However, this had and will continue to have a

positive effect on tenants and investors with opportunities and value to be realised in 2018," said Stevens.

One-bedroom apartments across the board have seen rents drop between Dh5,000 to Dh20,000, showcasing a

further 13 per cent decrease on 2016. Units in Downtown Dubai are now available for Dh95,000, The Greens for

Dh75,000, Dubai Marina for Dh70,000 and International City reports Dh40,000 on average.






Rents for one to three-bedroom apartments have shown an average decrease of 13 per cent compared with the

fourth quarter of 2016 and 18 per cent since the last market peak in 2014, which has led to owners/landlords

offering a number of incentives, including rent-free periods and increased cheque payments to retain tenants

and/or improve occupancy.

Stevens said these conditions have put the bargaining power firmly in the hands of tenants who enjoyed a wider

choice of properties, discounted rates and increased incentives. New properties and areas of the city are also

becoming more accessible to a wider tenant pool.

In 2017, average villa rents fell by 11 per cent with four-bedroom units in Arabian Ranches for example priced at

Dh190,000 versus Dh235,000 in 2016.

Sales prices were affected the least with an average decrease of six per cent, although it is important to note that

demand for villas with high ticket prices remained subdued in 2017.


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ANOTHER DUBAI PROPERTY OWNER

EMBRACES CRYPTOCURRENCIES Wednesday, January 17, 2018

More of Dubai’s real estate players are going the crypto currency way.

The Star Business Centre, which operates and leases fitted out offices, confirmed it will accept crypto currencies

as a mode of payment for services rendered. Its tenants can pay rents and service charges by using digital

currency along with the traditional payment systems.

“We have recently been watching the crypto currency revolution and that encouraged us to enhance our business

capability and align them with our business offering,” said Imran Farooq, CEO of Star Business Centre, which is

part of the Samana Group.

Recently, developer MAG confirmed that it will accept the OneGram (which is backed by a gram of gold) from

buyers at some of its projects.

Source: Gulf News

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DEYAAR REVENUES IN 75% SURGE TO

DH751.6M Wednesday, January 17, 2018

Dubai-based developer Deyaar recorded a strong 75 per cent gain in revenues to total Dh751.6 million last year,

against the Dh428.3 million in 2016. The topline numbers were boosted by “steady” progress at its Midtown

development, the company said in a statement of its unaudited numbers.

Net profit, however, came in lower, at Dh130.4 million, against the Dh216.1 million recorded a year ago. But the

developer said the 2016 numbers were boosted by a write-back of provision for impairment on an investment

made in an associate entity and also by fair valuation gain on its investment properties.

Majority-owned by Dubai Islamic Bank, Deyaar has become the first UAE developer to announce 2017 results, and

its revenue gains will go down well with market watchers. This year will see it try and open up new revenue

streams, through an entry into hospitality.

Most of the leading Dubai developers now have hospitality interests or will soon be getting into the space.

“2017 witnessed significant progress in our projects and our hospitality division, as part of our commitment to

diversifying our offering in line with the requirements of the UAE market,” said Saeed Al Qatami, CEO, in a

statement. There will be two handovers, The Mont Rose and the Atria.

On the residential side, the sprawling Midtown is on track to deliver the Afnan and Dania districts by the third

quarter of 2019. The next phase is to be announced later this year.

Source: Gulf News

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DAMAC CHIEF READY TO SELL 15% OF HIS

STAKE AT RIGHT PRICE Wednesday, January 17, 2018

Hussein Sajwani, the billionaire whose Damac Properties Dubai Co. is developing Donald Trump-branded golf

courses in Dubai, would be “more than happy” to sell as much as 15 per cent of his majority stake in the company

to boost the trading in its shares. Shares rose.

“The intention is there,” the Damac chairman said in an interview at his seafront residence on The Palm, a man-

made island off Dubai’s coast. “As an owner who built the company with all the effort and hard work, I am not

willing to sell it when I see my stock is undervalued,” he said. He declined to say what he considers a fair price.

Sajwani owns 72 per cent of Damac, the company he founded in 2002 and grew to become one of the biggest

developers in the Middle East, known for projects designed by Versace and offers of luxury cars such as BMWs,

Lamborghinis and Teslas to buyers during Dubai’s shopping festival. Sajwani has a net worth of $5.2 billion,

according to the Bloomberg Billionaires Index.

“For me, liquidity in the stock is important,” Sajwani said. “At the same time, I love what I do and I see big potential

in the company and I want to stay majority shareholder.”

No advisers have been hired to oversee a possible sale, he said.

Damac closed up 0.3 per cent at Dh3.50 in Dubai trading after climbing as much as 2.3 per cent earlier. The stock’s

trading volume is about six times higher than the 30-day average, Bloomberg data shows. The shares rose 7 per

cent this year, extending a 30 per cent rally in 2017.

Still, the developer is trading at cheaper valuation when compared to peers. Damac is trading at 6.3 times its

estimated earnings over 12 months, below 7.6 times for Emaar Properties PJSC and the 8.6 times, which is the

average for Dubai’s main stock index.

Damac has two golf-course development deals with Trump’s family company. The tie-up has propelled Sajwani

from a developer little known beyond the Middle East into someone often referred to as Trump’s main business

partner in the region. No more deals were being explored with the US president’s organisation, he said.

Sales are forecast to grow about 7 per cent in 2017, Sajwani said, matching analysts’ estimates compiled by

Bloomberg. Damac shares have climbed 32 per cent over the past 12 months, beating Dubai’s real-estate stock

index, helped by its inclusion in MSCI global indexes.

The company is weighing opportunities in cities such as Berlin, Istanbul and London, where he thinks the UK’s

planned exit from the European Union is offering a possibility to expand, Sajwani said.

Source: Gulf News

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CONSTRUCTION IS ON AT DH10M WARSAN

VILLAGE CLUB Wednesday, January 17, 2018

Construction is on for a Dh10 million dining, sports and leisure hub at Nakheel’s Warsan Village community. Due

to open in 2019, the Club will feature a restaurant, swimming pool, children’s pool, gym, fitness studios and tennis

court, as well as a car park.

One of seven in Nakheel’s community recreation clubs, and part of the developer’s Dh5 billion hospitality

expansion, it will provide on-the-doorstep food, fitness and fun activity for residents and a destination for people

living in other areas. It complements those already in operation at Nakheel’s Jebel Ali Village, Jumeirah Islands, Al

Furjan and Masakin Al Furjan communities. More are on the way at Jumeirah Village and Nad Al Sheba.

The recreation club is the latest addition to the 147 hectare Warsan Village community, where the Dh1.2 billion

Warsan Souk, with 1,170 shops, restaurants and cafés, is also under construction and due to open next year. The

souk is fully leased.

Nakheel delivered the 934 villas that make up Warsan Village in 2016. More than 800 villas have already been

handed over to investors, with the rest ready for occupation by new buyers. Prices for the homes start from Dh1.7

million.

Warsan Village is located near Dragon City, Nakheel’s sprawling retail and trading destination.

Source: Gulf News

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OPENING AN ONLINE WINDOW TO BUY IN

7 DAYS Wednesday, January 17, 2018

Interested in a ready property to buy and move into Dubai? And the buyer wants to pick one up within a week?

Not an issue, as long as the buyer can make his mind up and put up that binding offer.

Property selling is starting to make its presence felt in the online world, and that’s exactly where

SellAnyHome.com wants buyers and sellers to link up. It was in August that the portal launched services, offering

a 30-minute window of opportunity for investors to buy a residential unit in Dubai.

Now, they are expanding their buyer base to end users and mortgage buyers, by widening that window to seven

days. And that, according to Omar Chihane, CEO and co-founder, just the natural sort of progression for the

portal. “What we do is cancel out the noise from the buying and selling process, and bring in a ready property to

an end user or investor in a streamlined manner,” said Chihane. “And it’s a transparent process all the way — you

have the flash sale offering property at a particular price.

“If it’s an end user wanting to buy, he can make a booking to view and, if he decides, makes that binding offer

within a three-day time frame. What we hope to do make the interaction between buyer and seller happen as fast

as possible.” It is not a prerequisite that a mortgage buyer has to have secured financing before he makes a deal

on SellAnyHome.com. But having such a funding will be helpful — “The more ahead of the game in securing the

mortgage, the more likely you are to make the transaction faster,” Chihane added.

Last year has been a difficult one for sellers of ready properties in Dubai, with developers selling off-plan units

directly at extremely competitive prices and with sweetened up incentives, post-handover payments being their

primary weapon.

So, for prospective sellers of ready units, any additional channel — even an online one — will be welcome if they

do manage to find a buyer for their terms. What SellAnyHome.com does is relatively straightforward. It puts up a

property after giving it a 100-point check and then engages in a flash sale to get in as much buyer interest as

possible. The pricing is left to the seller’s discretion.

Its August launch was singularly aimed at investors, who had to decide in 30 minutes flat whether they would put

up the cash for a particular listed property or not. They did not get an opportunity to check the property out on-

site.

“We have listed properties between Dh400,000 to Dh22 million and generated a fair bit of traffic,” said Chihane,

who declined to go into how many deals have been nailed down to date. “We had offers on all types of property

— where possible we prefer to list properties that are listed exclusively with us. We expect to do more of that as

we get in a lot more eyeballs.”

Which is where its upcoming Series A funding will help. The plan is to raise $10 million, and expand the online

home buying and selling concept to more cities in the Gulf. It did well out of its seed funding round, generating a

“seven-digit dollar figure”, as Chihane puts it.

Source: Gulf News

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DOWNTOWN, PALM WEATHER SOFT

MARKET CONDITIONS BETTER Wednesday, January 17, 2018

It seems that Dubai’s priciest locations are starting to weather the market conditions better. Transaction values at

the Downtown, the Palm, Emirates Hills and Jumeirah Islands seemed “immune” from negative trends during the

fourth quarter, according to a new update from ValuStrat, the property consultancy.

In fact, Palm and Emirates Hills did see some big ticket purchases during the period, with a seven-bedroom villa at

the latter going for Dh18.92 million to be the costliest deal during December.

But there were year-on-year declines elsewhere, such as at Arabian Ranches (by 2.4 per cent), The Meadows (4.3

per cent), Dubai Marina (5.1 per cent), Jumeirah Lake Towers (7.5 per cent) and International City (4.5 per cent),

ValuStrat data shows.

“The main trends of 2017 were the rise of off-plan launches and their impact on the wider residential market,”

said Declan King, Managing Director and Group Head for Real Estate. “High profile successes in the new homes

sector came at a price for the existing secondary market, with price falls recorded in both sales and leasing rates

for many established locations.”

On rents, compared to the same period last year, rents were down 13.2 per cent for apartments and 12.3 per cent

for villas at the end of Q4-17. “Landlords have become more accommodating in reducing rents for existing

tenants approaching lease renewal,” the report notes.

But as per the official Dubai rental index, “a clear majority of freehold areas saw no change”, the report adds.

Source: Gulf News

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PROPERTY OWNERS EYEING AN EXIT FIND

IT TOUGH GOING IN DUBAI Wednesday, January 17, 2018

Property owners in Dubai better be willing to cut their asking prices if they want to sell. If not, they are staring at

future disappointments.

With off-plan sales from developers overwhelming demand in the secondary market, individual owners have

limited options on pricing their properties. Because the moment they set one, there would be a developer with a

new project offering that something extra, such as registration fee waivers, lower upfront payments and

intallments that can stretch over years. Against that kind of arsenal, very few individual owners can hope to match

up.

Off-plan sales made up more than 70 per cent of transactions in Dubai during 2017. And it’s impact is already

being felt in the rest of the market. “We are seeing declines in secondary market listings, especially in the price

ranges where new supply has been added in 2017,” said Lynnette Abad, Partner at Cavendish Maxwell, the

property services consultancy. “In 2017, sellers held firm to their pricing in the secondary market … while their

units sat empty.

“In the fourth quarter of 2017, we witnessed a little movement in the secondary market from sellers who were

willing to negotiate and this trend has continued. We are also starting to see units priced a little closer to realistic

selling levels. However, the asking prices are still far higher than the achieved.”

The message for secondary market sellers is clear — cut your expectations, unless you are the sort with a

signature property on the Palm or Emirates Hills, and you know that there will be a buyer who will be willing to

meet the price.

But at some of the other older freehold locations in Dubai, “we are starting to see the trend of price reduction on

asking prices for ready properties, especially where the unit types and community features are similar to the new

supply which was handed over in 2017. Buyers are opting for new property in new communities with desirable

amenities.”

According to Cavendish Maxwell estimates, just over 13,800 apartments were handed over in Dubai last year, with

the bulk of these being mid-market units. This is also reflected in the average transaction values attained across

Dubai during the period, of Dh1.3 million. (For apartment sales in 2017, the average was Dh2.3 million.

Off-plan selling prices turned more affordable — “Over the last 12 months, ticket prices for residential properties

have been made accessible to a wider range of buyers through a combination of smaller unit sizes as well as

aggressive payment plans of the 30:70 and 40:60 variety, where the bulk of payment is scheduled to be received

post-completion,” according to the latest real estate market update from Cavendish Maxwell.

But is it the case that developers are once again chasing investors with these payment plans rather than actual

end users, which is what Dubai’s property market needs more of?

“Developers were able to entice investors back into the market with their favourable payment plans and pricing,”

said Abad. “This continues to be very popular and we expect developers to introduce more creative payment

options in 2018.






“The primary issue many end users face is they do not have the funds to put down, either 25 per cent to

guarantee a loan on a ready property or the 50 per cent needed for off-plan property in order to avail a loan. I see

this is an opportunity in 2018 for developers to offer rent-to-own schemes and for banks to offer creative, new

products.”

“Rent decline is expected to continue during the first quarter of 2018, with new handovers planned in both

freehold and leasehold communities across Dubai,” says the new Cavendish Maxwell market update.

The consultancy echoes what others have been saying about how rents might fare this year. “The VAT roll-out in

2018 could also impact some businesses and their recruitment plans,” the report adds. “Additionally, there has

been a wave of mergers and consolidation in certain sectors during 2017, which affected jobs and thus increased

vacancy levels across some communities. These factors point to a subdued outlook for residential property rents

in 2018.”

Last year, the rental drops were most visible at International City, The Greens, The Springs and Al Furjan Villas, the

report finds.

For off-plan sales, the top three buyer choices last year were Business Bay, Jumeirah Village Circle and the

Downtown. And three developers — Emaar, Azizi and Damac — accounted for 41 per cent of all freehold

residential property deals in 2017.

Source: Gulf News

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NEIGHBOURHOOD WATCH: THE GREENS Wednesday, January 17, 2018

A low-rise community comprised of 36 buildings and 3,500 units spread across 65 acres, The Greens offers

residents and investors a slice of nature-led urban living complete with shaded paths, grassy stretches, waterways

and a decidedly family-friendly feel.

One of Emaar’s first freehold communities, the collection of cosy studios through to spacious four-bedroom

apartments was released in 2002 and is made up of multibuilding clusters connected by shared outdoor spaces,

designed to create a community-led ambience and attracting young professionals, couples and families.

You probably couldn’t ask for a more convenient location. Situated in the Al Thanyya area, just off Shaikh Zayed

Road, it rubs shoulders with the adjacent Barsha Heights, is only a short drive from Dubai Marina, Mall of the

Emirates, Dubai Internet/Media City and Jumeirah Lakes Towers, with a shuttle bus service to the nearby Dubai

Internet City Metro station.

Nearby education hubs include Regent International School and Dubai International Academy in Emirates Hills

with the American School of Dubai just down the road. Saudi German Hospital and Al Zahra Hospital are the

closest full-scale medical facilities.

Sense of community

A well-established community, the choice of local amenities is another major draw for residents with The Greens

Village retail centre anchored by a supermarket and offering all the services you would expect, including a salon,

barber shop, pharmacy, clutch of cafés and the nearby organic foods café. Its leisure offering is another key

selling point, with each cluster of four buildings sharing an outdoor temperature-controlled pool, gym, children’s

play zone, community hall and barbecue areas. As a bonus, dog walking is permitted in designated areas (but

remember to scoop that poop).

The extended lake that separates The Greens from neighbouring mid to high-rise development, The Views, is

popular with dog walkers, joggers, mums and dads with kids in strollers and those looking to step away from the

hustle and bustle of the city for a moment of peace and quiet. There’s also a dedicated Emaar community

management portal (thegreensandview.ae) for owners and residents.

Location

Haider Tuaima, head of real estate research for ValuStrat, says that “location is key”, noting that The Greens’

lifestyle focus, transportation access and developer credentials collectively make it a great place to live. The

development was originally marketed for sale and on a rent-to-own basis. Many existing occupants are long-term

residents or landlords.

While newer developments are also vying for investor capital, the appeal of this verdant community has endured.

Says Tuaima: “Some investors go for more established developments, while other prefer new developments.

There’s definitely a market for both. Given its excellent location and connectivity options, The Greens enjoys a low

price-to-rent ratio of 13.1 years, and a generous net yield of 5.1 per cent, with potential long-term capital gains.”

Current ValuStrat data puts annual rental rates at Dh69,250 for a studio with one and two-bedroom units at

Dh82,013 and Dh122,426 respectively. Three-bedroom apartments rents average at a healthy Dh159,000. The

Greens offers solid investment potential, and a current average sales ticket size of just over Dh1.3 million.

Source: Gulf News

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BITCOIN IN DUBAI REAL ESTATE: IS IT HERE

TO STAY? Wednesday, January 17, 2018

It made headlines around the globe when Dubai became one of the first in the world where residential real estate

could be bought and sold in bitcoin or similar digital currencies. In September, the Aston Plaza and Residences

development in Dubai Science Park began offering off-plan studios and one- and two-bedroom units starting

from around 30, 50 and 70 bitcoin, respectively. This was at a time when one bitcoin was worth around $4,940

(Dh18,142.15).

After the massive year-end rally of bitcoin, the most expensive unit in the development, a 132.6-sq-m, two-

bedroom residence on the 31st floor, had an off-plan asking price of just 21.97 bitcoin as of December 11, which

is equivalent to $376,000. “Prices in bitcoin vary because they’re pegged to the US dollar and are updated in real

time,” explains Michelle Mone, a businesswoman from the UK and partner in the project led by British property

management and investment holding Knox Group of Companies.

This, in fact, makes her online bitcoin price list look more like stock market prices rising and falling continuously.

However, Mone says that paying in bitcoin for this development is just an option for a limited number of

apartments. The offer is meant to open an avenue for the cryptocurrency community to divest some of their

bitcoins into tangible, physical assets. Depending on demand, there will be more units to be offered in bitcoin,

says Mone.

For the developer, the risk of dealing with bitcoin payments is minimal as payments are converted immediately to

US dollars after the deal is closed. The transactions for the Aston Plaza development are done via US-based

bitcoin payment service provider BitPay.

More recently, MAG Lifestyle Development said it is ready to accept payments in Islamic cryptocurrencies,

including OneGramCoin. The developer also announced last month a 5 per cent discount for “digital” buyers in

any of its eight current real estate projects.

There are two drivers that open the real estate market for bitcoin. One is that more progressive cities all over the

world are beginning to adopt laws to allow the technology to be used in property deals, or do not set regulations

hindering digital currency payments at all. Apart from Dubai, these cities include New York and Miami, selected

cities in Europe, particularly London, as well as Australia, New Zealand and some in the Caribbean.

The other driver is the emergence of brokers and bitcoin exchange portals where members now offer real estate

for bitcoin. Some realty companies, primarily in the US, are also experimenting with cryptocurrencies for

purchases and rent payments. Their main target are millennials or generally people who grew up in a digital

environment, i.e. tech-savvy and those who own substantial bitcoin.

Pioneers

Lev Loginov, co-founder of family office London Wall in the UK capital, made headlines in November by offering a

$23-million mansion near Portobello Road in Notting Hill, an affluent neighbourhood in West London, to be paid

only in bitcoin. Requests for viewings came almost exclusively from people under 30 years old, most of them of

Asian descent. “Most of them made money from mining cryptocurrencies and basically they’re looking to acquire

assets,” Loginov told CNBC in an interview, adding that accepting bitcoin also helps attract young affluent

millennials to property investment.






The first real estate broker to take up cryptocurrency in New York, sells condominiums in Liberty Toye, a new

Lower East Side development, for between $700,000 and $1.5 million in bitcoin. Ben Shaoul, president of New

York broker firm Magnum Real Estate Group, has no reservations accepting cryptocurrency, but admits it is

mainly a progressive marketing tool to gain an edge on the competition. “Over the next five or 10 years, I could

see up to 25 per cent of real estate payments being made in bitcoin or a similar digital currency,” Shaoul said.

Online portals that facilitate real estate purchases using bitcoin have been popping up, with one of the largest,

bitcoin-realestate.com, marketing real estate payable either in US dollars or bitcoin and two other popular

cryptocurrencies, ethereum and litecoin. The portal offers a wide range of choices, from a beach villa in Costa Rica

to a city condo in Bangkok, a mansion in Scotland, a French chateau, a Hong Kong penthouse or an ocean view

apartment in Curacao.

Advantages of bitcoin

That said, bitcoin has also emerged as a tool for buying big-ticket items, and as such has piqued the interest of the

wealthy. Bitcoin has also emerged as a cheaper alternative to transfer large sums of money, avoiding fees and

complicated and sometimes protracted transactions in traditional channels.

As bitcoin bypasses banking networks, transaction fees are as low as 1 per cent and transfer time is reduced to a

few minutes. There is no paperwork and the transfer of value across the globe is frictionless and instantaneous,

which means a buyer from Dubai could sign a contract for an apartment in London or a Tuscany farm mansion

with a mouse click and without the need for currency conversions, banks and agents.

This convenience has awoken the interest of realty agents and real estate administrative bodies who are now

looking closer into the advantages of blockchain technology, the nerve string of any cryptocurrency network.

Some even believe that bitcoin will disrupt the entire industry when combined with smart contracts and

blockchain-based data storage, which would radically improve transparency, speed and security of property

transactions.

Here is where governments come into play to revisit the systems currently in place. The opportunity is that

blockchain-based property transactions take away the need for third parties that currently make buying and

registering real estate a cumbersome and costly process. As of now, real estate deals are paper-based and involve

brokers, escrow agents, lawyers, notaries and banks; on the other hand, a blockchain-based process would allow

people to transfer funds, property titles and data digitally, safely, reliably and far less costly in a convenient peer-

to-peer manner. It also prevents forgery or malfeasance of any form as transaction records in blockchain are

unchangeable.

“Blockchain will allow truly digitised property ownership and exchange, as well as data transfer,” says Ragnar

Lifthrasir, founder and chairman of the California-based International Blockchain Real Estate Association (Ibrea),

one of the driving forces in the global adoption of blockchain in the real estate industry. “It gives real estate

stakeholders more transparency, liquidity and profitability and enables the next evolution of the real estate

industry.”

In October, Ibrea presented at the World Blockchain Summit in Dubai, and the Dubai Land Department (DLD) is

now developing a system that will record all local real estate contracts on blockchain, making the UAE one of the

first two countries to do so, with the other being Georgia.

Dubai blockchain

Dubai ultimately aims to secure all government documents on blockchain by 2020, and the DLD has been tasked

with implementing blockchain to gain the confidence of global real estate investors. “Our aim is to unite all real

estate and department services on a single platform,” said Sultan Butti Bin Mejren, director general of the DLD,

during the launch of its blockchain initiative in October. “We hope to complete our project in 2019-20.”






The technology allows investors to verify property data that is backed by timestamp signatures, enhancing the

transparency, accuracy and credibility of transactions, the DLD said. Buyers and tenants will be able to make

payments electronically and not write cheques. The process would be completed in a few minutes at any time and

from anywhere using a single platform, removing the need to visit any government entity.

Source: Gulf News

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MOHAMMAD ALMAZROOEI EXPLAINS

GGICO’S VERSION OF A FAMILY HOME Wednesday, January 17, 2018

Looking to cater to a niche market, developer Gulf General Investments Co. (GGICO) Group is moving away from

the “shoebox” concept with its new project in Dubai Silicon Oasis. GGICO’s Topaz Premium Residences is firmly

positioned in the family home segment, taking advantage of a community that already offers a wide range of

lifestyle amenities. The developer is making the housing complex even more attracting with a post-handover

payment plan extending over three years.

PW speaks to Mohammad Harib Fadhel Almazrooei, managing director of GGICO, about the group’s various

development projects, with a focus on Topaz.

More than 50 per cent of the Topaz Residences has been completed. When will it be ready for handover?

Our aim is to have Topaz Premium Residences ready by the fourth quarter. Topaz Residences Building 3 will be

ready by the third quarter. We have an affordable payment plan, which is 40 per cent during construction,

followed by 60 per cent over a three-year period post project completion.

What sets Topaz Residences apart from other developments?

In planning the series of Topaz Residences buildings, we’ve moved away from the concept of shoebox living that

pervades the market and which is not an attractive long-term investment for both investors and residents,

considering its potential returns and resell value. Instead, we focused on architecturally well-designed homes that

will harness natural sunlight, which is abundant in this region all year round, while boasting of beautiful

community views. A premium home apartment like Topaz Residences adapts to the lifestyle and needs of families

and hence will always be in demand.

You’re introducing a concept that allows to convert a one-bedroom apartment into a two- or three-bedroom

house when needed. Would families be interested in such a concept?

Our focus on Topaz Premium Residences is to create a living space that allows families to live comfortably in an

expansive environment. With the rampant shoebox apartments swarming the market, we took an in-depth look

at our customers, comprising couples, families and even investors. Inspired by their dreams and lifestyle in Dubai,

we came up with this concept that will cater to the families’ expanding needs.

The one-bedroom apartments are equipped with a generously sized living area that can be converted into a

second bedroom with a bespoke modular cabinet that turns into a bed at night. A few units are also available with

a store room that can be modified into a third bedroom or den. Each unit also has spacious balconies that extend

the space for ideal indoor and outdoor living.

Each one-bedroom unit has an average size of 1,000 sq ft. The adaptive living space is offered at the lowest price,

starting from Dh691 per square foot, making it a valuable investment. The total apartment value starts at

Dh708,695, with a monthly instalment starting at Dh1,750.

Who would be interested in the Topaz Premium Residences?

Taking into consideration the top nationalities who invest in the UAE as per the Dubai Land Department (DLD), we

are expecting a high ratio of investors from India, Pakistan, the UK, Egypt, Jordan, China and Lebanon. We do






expect a higher interest from UAE residents compared with foreign investors, possibly at 60 per cent, since this is

the best property for end users.

Tell us about amenities in the area such as schools?

When families move into our properties, they will have several educational options at their fingertips. Topaz

Premium Residences is adjacent to Dubai Academic City. There are many educational institutes that families can

choose from, from Zayed University to Dubai Men’s College, American University in the Emirates, British

University, Heriot-Watt University, Amity University, German International School Dubai, Fashion Design School,

IMT Dubai and Hamdan Bin Mohammad Smart University to mention a few.

Would Dubai Silicon Oasis be accessible, considering that at this point there is no connecting Metro line?

Dubai Silicon Oasis is considered accessible irrespective of the proposed Metro. You can access other parts of

Dubai through public transport such as taxis and buses. There are also bus shuttles, which takes you to the

nearest Metro station in Rashidiya and back. Private cars can also reach the Dubai International Airport and other

tourist areas of Dubai, like the Dubai Mall, in just 10-15 minutes.

What’s next in the pipeline?

With the success of Topaz Residences, you may expect another addition to the Topaz Residences Buildings series

in Dubai Silicon Oasis.

Source: Gulf News

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LIVE A RESORT-STYLE LIFE Wednesday, January 17, 2018

Tucked away in Dubai Multi Commodities Centre (DMCC) is the Banyan Tree Residences, Hillside Dubai, a luxury

residential development bearing the stamp of the Banyan Tree Group, the global premium developer in the hotel

and spa sector.

The resort is being developed in partnership with Dubai-based property developer, Sweid & Sweid, and is already

attracting interest from investors and buyers due to its unique living and community concept.

Banyan Tree Residences is a gated community where the single 32-storey building occupies only 10 per cent of

the 110,000-sq-ft site; the rest of the plot is assigned to create a luxury experience, incorporating elements of the

Banyan Tree brand. This includes an exclusive clubhouse and spa, a two-storey gym, an indoor squash court,

children’s pool and play area and a poolside café, a massive underground parking area for the residents and an

extensive landscaping area.

There will also be the globally renowned Banyan Tree spa that will have two dedicated massage therapists onsite.

The Dh600 million project is set for completion in the third quarter of 2019 and the launch of the project will take

place in the first quarter.

PW spoke to Maher Sweid, managing partner of Sweid & Sweid, to understand more about the project. Excerpts

of the interview.

Tell us more about the project specifications.

Banyan Tree Residences sits on DMCC but it is removed from the rest of the DMCC with a dedicated road that

leads to Hillside Dubai. With 244 residences, allotted between one-, two- and three-bedroom units. The ground

floor duplex apartments have their own private outdoor gardens. The three full-floor penthouses boast of

amazing of 4.5 metre ceiling heights, 360 degree views of Dubai skyline, spacious terraces and cantilevered pools.

All the apartments have floor to ceiling windows to maximise the breath-taking views of the Dubai skyline.

Depending on which side your apartment is facing, you can take in the views of the Jumeirah Lake Towers skyline,

the Emirates Golf Course, Emirates Hills, and Montgomerie Golf Course.

How did the partnership between Sweid & Sweid and Banyan Tree happen?

For the Banyan Tree Residences project, we were certain that we didn’t want to go for a cookie cutter styled

homes. We wanted to evoke a sense of luxury with extraordinary ancillary facilities. We felt that we could add

value to the development by finding the right operator who had a strong luxury hospitality background and would

be able to partner with us to create an environment fit for urban residential living. When Banyan Tree came on to

our radar, we knew that we would be a perfect fit as we shared similar ethos of creating open spaces with a

luxury resort feel.

There is a lot of attention to interiors from bathroom faucets to kitchen fixtures.

Our background is in the field of interiors. We have brought that passion into this residential development, paying

special attention to details in each room. So, for example, for the bathrooms, we used Grohe fixtures as well as

Villeroy and Boch sanitary ware. In the kitchen we’ve used quartz and Zebrano wood detailing.

We’re also manufacturing custom made tiles that are 1.2 metres each. Moreover, Banyan Tree was involved in the

design process right from the beginning. They sent their experts to ensure that the development meets their

brand standards and criteria.






Considering there’s a lot of floor to ceiling glass in the project as well as extensive landscaping, how will you

maximise energy efficiency?

We have actually invested in technology where all the watering of the landscaping will be done through recycled

greywater and AC condensation. With regards to the usage of glass, from the early days of concept design, we

wanted floor to ceiling glass so that the residents would enjoy the spectacular views of the city. We decided upon

open spaces to let the light in, coupled with the high ceilings.

In addition, from an extreme temperatures point of view, especially in the summer, we wanted the owners to be

comfortable in their home environment and that meant that we would need to upgrade the quality of the glass.

We’ve now settled to use high quality Belgian glass for the façade to meet these specifications.

When are you launching sales?

We are officially launching sales in the first quarter of 2018. The on-site sales centre and show home will be

completed by then. The sales centre is a two storey building with a view of the whole community so that

prospective buyers can grasp the sense of scale of the development, as well as the location and the views.

What are the other benefits owners will enjoy?

There’s one thing that I’d like to highlight from a property management perspective. In terms of maintaining the

development when the units are sold, buyers can be certain that Banyan Tree will continue to remain heavily

involved in day-to-day operations of the development. This is in keeping with their philosophy and ours.

Source: Gulf News

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DUBAI TO GO ALL OUT FOR OVERSEAS

BUYERS Monday, January 15, 2018

Dubai’s property market is to go all out chasing overseas investors. A series of roadshows will be held in key

overseas markets — India, China, Russia and even the US — through the year to get these investors to sit up and

take notice. The Dubai Land Department is putting its full weight behind the initiative.

The first of these will be held closer to the UAE, through two-day events in Amman and Kuwait and scheduled for

late March. They will be followed by Cairo in April, Beijing in May, and Moscow in July. The North American leg is

set for October, in Chicago and Dallas. London will get to showcase Dubai realty over three days in September,

and Mumbai does so in December.

Last year, Arab and Chinese investors were particularly active in Dubai’s freehold space, while Indians represented

the second biggest buyer demographic — spending Dh15.6 billion — after UAE nationals (who did Dh25.3 billion).

“We had a series of overseas events last year and that generated about Dh3 billion in enquiries,” said Majid Saqr

Al Merri, senior director at the Dubai Land Department. “Our message to overseas investors remains the same —

Dubai can offer yields of 7-11 per cent compared with the 3-5 per cent you might get elsewhere.”

The Land Department already has ‘promotion trustees’ operating out of the Dubai head office, who effectively act

as liaison for international buyers and offer all sorts of back-end support.

The department is doubling down on pushing Dubai’s profile as a realty investment destination. Last week, it

confirmed the launch of a property show in Dubai, for April, that will open a new window for transaction

possibilities.

But the big push will be made with an eye on the overseas buyer. The Chinese, market sources say, will be the

next big thing and some of that interest already showed up in the 2017 numbers, by figuring among the Top 10

nationalities buying in Dubai.

Chinese state enterprises are already active in financing select projects, as are their big construction companies.

And developers such as Damac have got representations in China to make their brand known.

As for other buyer demographics, market sources believe that Indian buyer support should remain consistent

through the year. All projects and properties registered with the Land Department and backed up with an escrow

are eligible to be part of the overseas roadshows.

“It will be up to the developers and other exhibitors to decide what sort of incentives need to be packaged,” said

Kalpesh Sampat, managing partner at Gulf Sotheby’s International realty. “But we have seen it being done before

at earlier overseas roadshows.”

The key costs would be the 4 per cent registration fees on a property transfer, or for the ‘Oqood’ if sold off-plan. In

Dubai, developers have been absorbing most of these sundry costs and that has been a factor in the fairly healthy

off-plan sales in 2017.

Source: Gulf News

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HOTEL GROUP JUMEIRAH ENDS SEARCH

FOR NEW CHIEF EXECUTIVE Wednesday, January 17, 2018

Jumeirah, Dubai’s government-owned hotel group, said on Wednesday it had appointed Jose Silva as the new

company’s new chief executive.

Jumeirah said that Silva would bring over 35 years of experience in the hospitality industry, including almost 25

years with Four Seasons Hotels & Resorts.

The group, which owns the Burj Al Arab, said in July 2017 that its chief executive at the time, Stefan Leser, was

leaving for “purely personal reasons.”

The arrival of Leser would be the first time in 18 years that Jumeirah had ushered in a new chief executive,

following nearly two decades with Gerald Lawless at the helm.

Leser’s time at the company would be short-lived, however, with the German leaving a little over a year after

taking over.

Now, nearly six months later, Silva arrives from his role as regional vice president overseeing France, Switzerland,

Spain and Portugal for Four Seasons.

In addition, Silva was general manager of the highly acclaimed Hotel George V in Paris.

According to a statement from Jumeirah, he is regarded by the industry as an innovative mind and a hotelier who

is consistently redefining the new norm of luxury.

As chief executive officer of Jumeirah, they added, Silva would be responsible for its international expansion, while

continuing to elevate the brand and its growing portfolio, “building on the company’s success over the years.”

Abdulla Al Habbai, chairman of parent company Dubai Holding said in a separate statement: “We are determined

to continue developing Jumeirah into a globally recognised national champion; setting new industry benchmarks

for world class service and quality.”

Source: Gulf News

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DUBAI’S F&B SECTOR COULD DO WITH A

RENTAL COOL-OFF Monday, January 15, 2018

Landlords in Dubai may be more willing to listen to their F&B tenants and even accommodate them on rents. This

would have been quite unthinkable even a year ago.

In fact, “rents in retail locations (non-prime) are already witnessing a softening, and this is expected to continue,”

said Rafat Hodroj, General Manager for F&B at GCP Group and operator of the Big Ben quick-service outlets. “We

expect between a 5-15 per cent reduction.

“The prime areas and Tier 1 malls are more difficult to forecast; in any event, any reduction there — if at all — will

be considerably less.”

For all intents and purposes, rents in the retail sector could do with a bit of cooling off.

They had been on an upward curve for the last five years and what had cut retailers and F&B businesses was that,

even last year, most of the prime retail destinations enforced increases despite the general market sentiments

being quite weak.

The cost of doing business has already led to a high “attrition rate” in the local F&B sector, according to Matthew

Green, Head of Research at CBRE UAE.

“This is further exacerbated by rapidly rising supply levels and the presence of high rentals across Dubai’s prime

retail and hospitality spaces.

“However, with market conditions weakening over the past year, there is evidence of declining rentals and

increasing flexibility from landlords when negotiating new contact terms.” But even dropping rents by a few

percentage points will only be a partial solution for F&B sector’s weak growth curve.

“I am paying less in Covent Gardens in Central London than on the Boulevard on a per square metre basis,” said

Naim Maadad, CEO of Gates Hospitality.

“Footfall and volumes globally are non-comparable to the UAE’s population. “It should be about allowing the

tenant more control over how they spend money and in Dubai the prices are high everywhere and not just on the

obvious locations. It would be great to see deals being made to get new locations off the ground.”

According to Maadad, rents should be linked to turnover and come with enough flexibility built-in.

For instance, rents should not be uniform between the front- and back-end of a property, or if on the terraces.

And “operators should not have to compete with government bodies,” said Maadad.

“Like it is done globally, a successful destination works on complementing the retail mix based on a formula

where shoppers can eat among many other activities. This will prolong the time shoppers spend in a destination

and will attract more than just foodies. The cuisine mix also should be balanced so operators complement one

another rather than simply competing against one another.”

Source: Gulf News

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DUBAI DEVELOPERS GO SLOW ON HOME

DELIVERIES Monday, January 15, 2018

Developers in Dubai delivered less than half of the homes they had promised to do in 2017, and in a way ensuring

that new supply will not be flooding the market in one go.

This is a tactic they had been using consistently to keep supply levels in check.

But last year, only 14,700 units were delivered as against the proposed 31,300, states the new UAE real estate

update from JLL. This works out to a 47 per cent “materialisation rate” and a drop from the 52 per cent achieved

in 2016, when 17,700 new homes were completed. (But in 2015, the completion rate was particularly bad, with

only 8,400 units done out of the 25,100 units promised. That’s materialisation rate of 33 per cent.)

Even with the new supply, Dubai’s rents will remain under pressure. JLL reckons that apartment rents dropped by

12 per cent - and villas by 9 per cent - last year and could see a further softening.

At some point in the next three years, developers will have to ramp up their delivery game.

Offplan sales made up 60 per cent of overall property sales in Dubai, and with a majority of them having

anticipated handover dates by 2020-21.

Buyers, meanwhile, can expect more incentives from developers this year. “This is because the VAT regulations on

residential sales offers developers a zero-rate on all sales within three years of the completion of a project,” the

report notes.

More supply is the case in Sharjah as well, where freehold projects are emerging out of the developer pipeline.

“We are aware of announcements to construct around 30,000 additional residential units across Sharjah,” says

the JLL report.

“However, as most of these projects have not yet announced details of their phasing, it is not possible to identify

how many of these will be delivered over the next two years.”

On the sales side, average prices remained “largely unchanged” through 2017. But volumes are gaining with the

launch of sales at new projects from Arada and Alef.

The new developments are clustered around the east, and will eventually end up the congestion experienced in

the older residential locations on the western side.

The new areas include the University City and the industrial area within the Al Saja’a suburb, JLL reports.

(Currently, 89 per cent of Sharjah’s existing stock are apartments.)

JLL estimates that Abu Dhabi recorded 3,000 residential handovers last year. A further 8,000 units apiece are

expected in each of the next two years… in a best-case scenario. But most of these will be on the “new islands”,

made up of Saadiyat, Reem, Raha Beach and Yas.

In fact, handovers of the first homes on Yas started recently and should pick up pace this year. The new islands

currently take up more than 60 per cent of projects under construction.

Source: Gulf News

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DUBAI’S MOST EXPENSIVE COMMUNITIES

TO RENT OR BUY Monday, January 15, 2018

Emirates Hills is the most expensive villa community to buy or rent a property in Dubai, according to

Propertyfinder Group, which has analysed the emirate’s priciest areas.

According to the real estate portal, those looking to buy in the luxury villa community would shell out Dh2,604 per

square foot to live there. Palm Jumeirah takes second position at Dh2,437 per sq ft, while The Lakes community,

which sits next to Emirates Hills, comes in third at Dh1,369.

“Even with real estate prices dropping across the country, luxury living still comes at a premium," Propertyfinder

Group said in a report on Monday. A square foot in Emirates Hills costs 243 per cent more, and in Palm Jumeirah

221 per cent more, than the median asking price in Jumeirah Village Circle, the least expensive area in Dubai,

Propertyfinder said.

The three top communities for purchasing villas are also the top three most expensive villa communities to rent,

with Emirates Hills costing tenants Dh80 per sq ft, Palm Jumeirah Dh75 per sq ft and The Lakes Dh74 per sq ft.

Residential sales and rental prices in the UAE continued to fall between April and October, encouraging renters to

consider buying properties, according to Propertyfinder Group's 2017 Trends study released last month. Real

estate prices and rents in the UAE have fallen over the past two years due to the economic slowdown, job cuts

and lower housing allowances amid an increase in supply in some communities.

Mario Volpi, the chief sales officer at Kensington Exclusive Properties, said Emirates Hills continues to attract

wealthy buyers "due to its exclusionary and privileged trademark and it has been the ambition of many to own a

villa in this sought after community". Those looking for a deal on a luxury apartment may also struggle.

Downtown Dubai, the most expensive apartment community to rent in, costs tenants Dh117 per sq ft, also

making it the most expensive rental community in the emirate overall, 31 per cent more costly than Dubai's

median rental price of Dh89 per sq ft.

Old Town was close behind at Dh115 per sq ft and The Views, which is located next to the Greens, comes in at

Dh109 per sq ft. Buying an apartment in a luxury area is also a costly option with Downtown Dubai the most

expensive community at Dh2,132 per sq ft, followed by Old Town at Dh1,965.

"Downtown apartments command a higher rate per square foot than the average due to the fantastic lifestyle the

area has to offer," said Mr Volpi. "It is already a world-class destination but it continues to be further developed

and improved upon. Having the Burj Khalifa, dancing fountains, world’s largest mall, Dubai opera etc. all in close

proximity, will obviously be the magnet to attract the well-heeled of Dubai."

Luxury areas such as Emirates Hills and Downtown Dubai, though, are not immune to price declines, in line with

the overall market, according to Mr Volpi. Rents in downtown were on average 15 per cent higher in December

2016, compared with December 2017, he said. "The trend for residential rents in 2018 is for a continuation of

softening prices," said Mr Volpi. "There is likely to be more potential downward movement for Downtown due to

the larger available choice of apartments and the likelihood of more inventory being released."


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DUBAI'S MARMOOM RESERVE HERALDS

NEW ERA OF ADVENTURE TOURISM Thursday, January 18, 2018

A desert park spanning 10 per cent of Dubai’s total landscape has been welcomed by adventurists who claim the

emirate is edging towards a new era of outdoor tourism.

The government has announced the Marmoom Reserve project will be the first unfenced desert conservation

area in the country when it officially opens in 2030.

It will host more than 20 sporting events every year, and be the perfect destination for visitors looking to learn

more about the desert wildlife and experience the nation’s beautiful natural landscape.

Fadi Hachicho, founder and lead mountain guide at Dubai tour operators Adventurati Outdoor, said the project

marks a new dawn of tourism potential.

“As a tour company, we are focused on rock climbing, hiking and canyoning, but we know there is a huge demand

from people wanting to get outside and experience the desert in different ways,” he said.

“More people have to realise the potential for tourism in the desert, with safaris and camping trips.

“There is huge potential for growth. Hiking is the most popular activity we hear from people, and that usually

develops into other sports like climbing.

“Backpacking where people carry everything they need is also becoming very popular.

“There are no fresh water streams or rivers here, so people have to carry their own water supplies, which is part

of the challenge.

“There are currently very few recognised trails or routes, so there is plenty of room for development in this area.”

Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, launches the Marmoom Desert Conservation

Reserve. Pictured with Sheikh Maktoum bin Mohammed, Deputy Ruler of Dubai; Sheikh Ahmed bin Saeed,

Chairman of Dubai Civil Aviation Authority and Chief Executive of Emirates Group; Sheikh Mansoor bin

Mohammed; Mohammad Al Gergawi, Chairman of the Executive Office of Sheikh Mohammed bin Rashid. Wam

XDubai, an adventure company known for their high-flying stunts, welcomed the potential for more sporting

activities to be hosted in the emirate.

“The project opens up a host of new possibilities for us in our mission to encourage UAE residents and visitors to

push their limits through sport and activity,” said its general manager Mohammed Javad.

Marmoom will hope to replicate the success of the Dubai Desert Conservation Reserve a 225-square-kilometre

natural reserve established in 2002 and home to Al Maha Desert Resort and Spa.

The fenced-in wilderness has served as a protected habitat for a variety of indigenous mammals including

hedgehogs, shrews, gazelles, Arabian hares and at least three species of bats.

Mr Hachicho has been working as an outdoor consultant with Ras Al Khaimah tourism, an emirate that is enjoying

huge growth in this area.

“The Marmoom Project is a good effort to make these kind of activities more accessible and affordable for the

pubic, and once they get into these kind of sports they can develop their skills,” he said.






“We are witnessing the development of the outdoor community and the UAE as an adventure destination,

especially from Bahrain and Kuwait where there is not the same landscape as here.

“Oman, Saudi Arabia and Ras Al Khaimah are becoming very popular with adventure tourists so there is a lot of

competition.

“There is so much more potential here. This is a new era for adventure travel, and it is helping create a lot of new

outdoor activity clubs.”

The reserve will be home to more than 204 species of native birds, 158 species of migratory birds, and 10 km of

lakes, encompassing the Al Qudra Lakes.

It will include 10 animal and bird observation platforms, star and sunset observations decks, areas for yoga, an

outdoor theatre, all powered by a 5,000 megawatt solar power complex.

“As long as the government regulates the industry properly with licenses and safety workshops for those working

in the industry, it can continue to grow safely,” Mr Hachicho said.

“The bright lights of the city will always be popular with tourists, but this offers something different.”


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DUBAI RENTAL MARKET TO REMAIN

'SUBDUED' IN 2018, SAYS CAVENDISH

MAXWELL Wednesday, January 17, 2018

Dubai’s residential rents will continue to decline in the first quarter of 2018 and remain muted for much of the

year, as upcoming supply, the impact of VAT and other factors hold down prices, according to a new report.

“Rent decline is expected to continue during the first quarter of 2018, with new handovers planned in both

freehold and leasehold communities across Dubai,” said Dubai-based property consultancy Cavendish Maxwell in

a report.

“The VAT rollout in 2018 could also impact some businesses and their recruitment plans. These factors point to a

subdued outlook for residential property rents in 2018.”

The agency said merger and acquisition activity last year also led to job losses, further increasing vacancies in

some communities.

Residential rents and prices have been declining in the past two to three year as low oil prices slowed down the

economy, leading to job losses and lower housing allowances amid an increase in supply.

During 2017, residential property rents declined at a more pronounced rate than sales prices, resulting in yield

compression in most communities, according to Cavendish Maxwell’s 2017 Year in Review report, which is based

on figures from its Property Monitor real estate database.

The 12-month decline in residential rents across Dubai averaged 4 per cent as of December 2017, compared to a

2 per cent average decline in residential sales prices.

In 2017, residential sales prices traded within a close range of Dh1.25 million to Dh1.5m for apartments and

Dh1.7m to Dh2.1m for villas and townhouses – based on an average market price of Dh1.3m for apartments and

Dh2.3m for villas and townhouses. This represents a narrowing gap between apartment and villa prices.

The sales price movement in the last 12 months has varied substantially not only between communities but also

among different buildings within the same community, the report noted. This differentiation is expected to

continue as buyers have an increasingly large supply base to choose from.

“Property fundamentals such as developer track record, proximity to social and public infrastructure, ease of

access, maintenance, among other factors will drive price movement,” the report said.

Off-plan residential properties accounted for the majority of total sales during 2017, with more than 24,900

transactions, Cavendish Maxwell said. It attributed the increase in off-plan market activity to a combination of

factors including lower price inventory, aggressive payment plans being offered by developers and new mortgage

products from banks, some of which are tailored towards the first-time buyer.

In terms of completed supply, more than 13,800 apartments and 7,800 villas or townhouses were handed over in

Dubai during 2017, according to the report. Approximately 54,000 units are scheduled to be handed over in 2018,

including delayed projects from previous years. However, the actual materialisation rate is likely to be lower than

this and fall in line with previous years, where annual handovers have ranged between 16,000 and 20,000 units.






“Developers are responding to transaction activity and prevailing prices by staggering the release of units either

through a delayed launch after a certain percentage of the construction has been completed, or by phased

delivery of units within a development. This strategy is expected to continue in the coming year,” the report said.

An already marked shift in demand towards affordable housing is expected to continue this year. Almost 82 per

cent of residential transactions in 2017 were priced below the Dh2m and almost half (47 per cent) were below

Dh1m, according to figures from the Dubai Statistics Centre included in Cavendish Maxwell’s report. Furthermore,

85 per cent of all transacted units were apartments, “a clear choice for budget sensitive buyers”.

Last November, a study by UAE marketplace dubizzle.com and real estate consultancy JLL found that ‘mid-market’

properties – those priced cheaper than Dh1,000 per square foot – were the only price category of the Dubai

residential market for which online searches on dubizzle.com rose in 2017. This indicates continued growth in

demand for affordable housing amid flat market conditions and increasing supply.

However, Cavendish Maxwell’s report noted that investors in this sector face several challenges, including the fast

depreciation of affordable housing, as it is usually built more cheaply, and lower profit margins compared to

other asset classes.

For buyers, the main challenge is the limited availability of housing finance for those earning below Dh15,000.


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IS 'AFFORDABLE' HOUSING REALLY

AFFORDABLE? Wednesday, January 17, 2018

Does Dubai offer affordable housing to its residents? The jury is still out on the subject. In 2015, the Dubai

Municipality defined affordable housing as a living space for people whose salary is between Dh3,000 to Dh10,000

per month. As a rule of thumb, housing is usually considered affordable if it costs less than 30 per cent of gross

household income.

However, in 2014, the average annual expenditure on housing and utilities as a percentage of total household

expenditure was higher in Dubai than other major cities, which indicates that many households in Dubai were

overburdened by the cost of housing. A more visible sign of the shortage of affordable housing options is the

traffic congestion caused by daily commuters, who live in more affordable housing in the northern emirates while

working in Dubai.

"Government intervention is needed to provide housing supply for the segment that earns below Dh10,000.

Supply for this segment is limited to certain specifications, such as studios and one-bedroom apartments, which is

not attractive for families," says Maysa Shocair, managing partner, Affordable Housing Institute.

Although developers have changed tacks to target the mid-income segment, they are still aiming projects at

households earning between Dh10,000 to Dh30,000.

According to Cavendish Mawell, in the Dubai homeownership market, 45 per cent of existing units are affordable

to households earning up to Dh33,000. Of those, only six per cent is affordable to households earning less than

Dh10,000, 16 per cent to households earning less than Dh15,000, 33 per cent to those earning less than Dh25,000

and 45 per cent to those earning up to Dh30,000. The bulk of units available to households earning less than

Dh10,000 are studios, with some one-bedroom options available, both unattractive homeownership options for

families.

"Our inclusionary zoning policy will make it mandatory for developers to allocate 15 to 20 per cent of every

project for affordable housing. We have tools to make sure prices don't go up. We also depend on master

developers and sub-developers to make sure affordable housing benefits the right category of people," observes

Mahmoud El Burai, CEO of Dubai Real Estate Institute.

It is often observed that affordable housing projects are usually lapped up by investors at the launch phase, who

then inflate prices on resale, making the units out of bounds for the mid-income segment.

Almost 82 per cent of the residential transactions in 2017 were below Dh2 million with almost half, or about 47

per cent below Dh1 million. Furthermore, 85 per cent of all transacted units were apartments, a clear choice for

budget-sensitive buyers.

Mid-income buyers are also restricted from home ownership owing to the strict mortgage requirements imposed

by the UAE Central Bank. There is limited availability of housing finance for those earning below Dh15,000 and the

reduced loan-to-value (LTV) ratio (75 per cent for properties below Dh5 million) also poses a challenge. The

Central Bank's off-plan financing regulations require buyers to pay 50 per cent of the value of a house before

opting for home finance and many households struggle to save the upfront amount required.

"Banks need to educate and make the masses more aware about mortgages available," suggests Mohanad

Alwadiya, CEO of Harbor Real Estate.






"There exists an opportunity for banks in the affordable housing segment. The UAE Central Bank needs to

liberalise mortgage requirements or offer subsidies for affordable housing," explains Atif Rahman, director and

partner, Danube Properties.

Many developers have structured payment plans to respond to these constraints. "Some plans allow buyers to: (i)

pay the down payment [50 per cent or less] over an extended period of time; (ii) offer buyers the opportunity to

take a 50 to 75 per cent mortgage on the value of the property once it is completed; or (iii) bypass banks and pay

developers directly over an extended period," explains a Cavendish Maxwell report.

Developing low-income housing also poses a challenge to developers in the form of high land prices in accessible

locations and lower profit margins compared to other assets classes. As a result, developers have been seeking

out cheaper land plots in locations further away from city centres to deliver more affordable housing. They are

also increasingly offering smaller unit types (studios and one-bedrooms) and smaller sizes of each unit type. To

improve space utilisation, some developers are adding modular space-saving furniture that easily changes

functions.

"Affordable housing does not mean cheap housing. It is about creating value engineering, economies of scale and

negotiating with the supply chain. It should be a matter of best practice for developers rather than one that needs

regulation," adds Danube's Rahman.


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APARTMENT-VILLA PRICE GAP NARROWS IN

DUBAI Wednesday, January 17, 2018

The gap between apartment and villa/townhouse prices is narrowing in Dubai, says consultancy Cavendish

Maxwell.

The first quarter of Q1 2017 marked the entry of lower priced villa/townhouse inventory into the market, taking

the average trading price for villas and townhouses in Dubai from Dh2.7 million at the end of 2016 to Dh2.2

million in the first quarter of 2017. New villas and townhouses priced as low as Dh1.3 million were launched in

areas such as Reem and Dubailand.

Meanwhile, apartment prices have stayed within a narrow range of Dh1 million to Dh1.5 million since 2016.

Over the last 12 months, ticket prices for residential properties have been made accessible to a wider range of

buyers through a combination of smaller unit sizes as well as aggressive payment plans, where the bulk of

payment is scheduled after completion.

Both apartment and villa/townhouse prices registered declines of two per cent in 2017 while residential rents

declined four per cent. Areas including The Greens, International City, Al Furjan villas and The Springs witnessed

the steepest annual decline.

"Landlords continue to offer incentives, including payment through multiple cheques and first month rent-free, to

attract tenants who are currently benefiting from increasing supply and rent declines across the market," a report

by the consultancy adds.

Number of cheques

The majority of rental agreements for residential properties in 2017 were in four cheques, unlike 2016 where one

cheque agreements were most prevalent. In 2017, one cheque made up 35 per cent of all rental leases for

villas/townhouses while four cheques accounted for 45 per cent of leases. For apartments, one cheque payments

made up 22 per cent of leases and four cheque payments made up 58 per cent of total rental agreements.

The number of cheques could increase to six or even 12 in the future, estimates Cavendish Maxwell. The top

areas where four cheques were more prominent include Emirates Living, Dubai Marina, Arabian Ranches, Reem,

Downtown and Burj Khalifa. However, this trend is expected to become common in other locations in Dubai,

particularly in emerging areas where new supply is being added.

The majority of off-plan transactions for apartments during the year were for studio and one-bedroom units, with

Business Bay, Jumeirah Village Circle and Downtown Burj Khalifa ranked as the top locations for off-plan

apartment transactions. Dubai Marina, International City and JLT were the top secondary market locations for

apartment transactions.

Town Square, Serena and Dubai South were the top locations for off-plan villa transactions. Emirates Living, Reem

(Mira) and Arabian Ranches were top locations for secondary market villa transactions.

More than 13,800 apartments and over 7,800 villas/townhouses were handed over in Dubai during 2017,

estimates the consultancy. The majority of units handed over in 2017 were largely concentrated in Jumeirah

Village Triangle, Jumeirah Village Circle and Liwan in Dubailand.






There are approximately 54,000 units scheduled to be handed over in 2018, including delayed projects from

previous years. The actual materialisation rate for 2018 is expected to be in line with previous years, where

annual handovers have ranged between 16,000 to 20,000 units.


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MORE SUPPLY TO WEIGH ON DUBAI

HOUSE RENTS IN Q1 OF 2018 Tuesday, January 16, 2018

During 2017, residential rents declined at a faster pace than prices, resulting in yield compression in most

communities. Primarily, new project handovers have impacted rent performance. According to Property Monitor

Supply Tracker, more than 13,800 apartments and over 7,800 villas/townhouses were handed over in Dubai

during 2017. Rents for residential properties have also been impacted by sluggish business growth and the

impact on jobs in the emirate. While certain sectors have downsized, resulting in job losses, others have

readjusted housing allowances and subsidies, leaving tenants with tighter budgets.

Rent performance

For apartments rented in 2017, the three most popular areas among tenants were Dubai Marina, Downtown Burj

Khalifa and Palm Jumeirah. In these three areas, 12-month change in rents averaged 3.5 per cent, with studios in

Downtown and one-bedroom units in Marina registering rental declines of more than four per cent. According to

the Property Monitor Index, the average apartment rents as of December 2017 across freehold locations in Dubai

ranged from Dh32,340 for studios in International City to Dh177,984 for two-bedroom units in Downtown.

Majority of the rental contracts signed in 2017 across Dubai were in the Dh80,000 to Dh120,000 per annum range

(31 per cent), followed by 27 per cent contracts in the Dh50,000 to Dh80,000 per annum bracket.

Among villas/townhouses rented in 2017, the most active locations were Emirates Living, Arabian Ranches and

Reem. Within Emirates Living, The Springs and The Meadows registered 12-month declines of around five per

cent. Similar declines have been recorded in Arabian Ranches as well.

According to the Property Monitor Index, the average villa/townhouse rents as of December 2017 across freehold

locations in Dubai ranged from Dh158,400 for three-bedroom units in Al Furjan to Dh405,600 for five-bedroom

units in The Lakes. Majority of the rental contracts signed in 2017 for villas/townhouses across Dubai were in the

Dh120,000 to Dh180,000 per annum range (42 per cent), followed by 27 per cent contracts in the Dh180,000 to

Dh240,000 range. These metrics point towards increasing interest among residents for smaller villa/townhouse

units that have now become more affordable than before. This trend is expected to continue as additional lower

priced villa inventory will enter the market in the coming quarters.

Multiple cheques

In addition to lower rents in 2017, the market took a turn away from being landlord-driven to becoming a tenant-

market, whereby increased supply has brought wider choice to residents and eased the burden to a certain

extent.

While landlords continue to offer incentives like first month rent-free, tenants are also being able to negotiate on

terms like number of cheques. Rent payment through multiple cheques is slowly becoming the new norm for

residential properties in Dubai and this was particularly evident in 2017 when four cheques made up 58 per cent

of rental payments for apartments, whereas one cheque made up only 22 per cent of the total. These figures

represent a shift from prevalent structures in 2016, where four cheques made up only 23 per cent and one

cheque made up 46 per cent of the total. In 2017, rental contracts for villas/townhouses were also dominated by

four cheques payment, which accounted for 62 per cent of the total payments. In comparison, one cheque

payment made up 56 per cent and four cheques made up only nine per cent of rental payments in 2016.






Outlook for 2018

Buildings with superior quality, facilities and maintenance will continue to fare better and achieve higher

occupancy rates. Increased choice has led to tenant movement both within the same community to better

buildings as well as migration to communities with better infrastructure. This differentiation is expected to

continue as residents find themselves in charge when it comes to choosing a property within budget.

In 2018, a total of 54,000 units are scheduled for completion, of which around 78 per cent are apartments. These

include delayed projects from earlier years and actual materialisation is expected to be much lower, at around

16,000 to 20,000 units, as in previous years. Rents will continue to face further pressure in the first quarter of

2018 because of this additional supply and subdued business sentiment. Any recovery in residential property

rents would be linked to improved rate of job creation on the back of sustained business growth and increased

government spending on infrastructure ahead of Expo 2020.


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DUBAI REAL ESTATE PLANS TO ATTRACT

GLOBAL INVESTORS Monday, January 15, 2018

The Dubai Land Department (DLD) has embarked on an aggressive campaign to attract global investors to deploy

funds in Dubai real estate this year.

The two-pronged campaign involves organising more editions of the Dubai Property Show internationally and

taking out more road shows in key global cities all through 2018.

"With the increase in residential supply in Dubai, we need to bring in new investors to absorb the inventory," said

Sultan Butti bin Mejren, director-general, DLD.

The DLD will organise editions of the Dubai Property Show in London, Shanghai, Mumbai and Moscow. The

regulator will also take out property road shows in Europe (Dublin, Antwerp and Monte Carlo), Africa (Cairo,

Nairobi and Dar es Salaam), North America (Chicago and Dallas), Middle East (Kuwait, Amman, Riyadh and Jeddah)

and Asia (Beijing, Singapore and New Delhi).

Each city in the global promotion plan has been meticulously selected based on feedback from developers.

Majid Saqer Al Marri, senior director, real estate promotion department, real estate investment management and

promotion centre at DLD, said: "All developers, banks and registration trustees will support us in providing

services to investors. We will promote both off-plan and ready properties in Dubai which have all the necessary

approvals, licences and escrow accounts in place. Our message to overseas investors is that Dubai can offer yields

of seven to 11 per cent compared with the three to five per cent you get in other global cities.”"

“The developers and other exhibitors will decide what sort of incentives need to be offered,” said Kalpesh Sampat,

managing partner at Gulf Sotheby’s International Realty. “But we have seen it done at earlier overseas

roadshows.” This initiative comes on the heels of the announcement of the Dubai Property Festival in April which

is set to attract both international investors as well as residents.

Majida Ali Rashid, assistant director-general and head of the real estate investment management and promotion

centre, said the DLD received 10,000 visitors at the Shanghai, Mumbai, Moscow and London editions of the Dubai

Property Show last year, with the majority being investors. The value of bookings and sales made at these

exhibitions reached nearly Dh3 billion.

The DLD also announced that it would organise the second edition of the Real Estate Tycoon Awards in London in

September 2018. "We aim to recognise individuals and organisations who have elevated Dubai's global standing

as a real estate destination in the world," added Al Marri.

Replying to a question on promoting Dubai real estate in Pakistan, Al Marri said: "We took into consideration

different markets globally. We are waiting to explore more events in Pakistan. Pakistanis are among the top

ranked investors in Dubai property." Discussing the impact of the value-added tax on Dubai investors, bin Mejren

said: "VAT will help add value to the UAE's infrastructure. There will not be a big effect on the property sector. It

might have a small effect on commercial real estate."


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DUBAI HOUSING HEADED FOR

OVERSUPPLY? Monday, January 15, 2018

With Dubai developers on a project launch spree in 2017, several thousands of units are expected to be released

to the market by 2020. This could result in a situation where supply outpaces demand.

According to a JLL report on Monday, 570,000 units of new supply could enter the market by 2020, representing

an average annual increase of eight per cent. Citing an Oxford Economics study, JLL says Dubai's population is

expected to grow an average of three per cent per annum. This suggests that market absorption rates will be less

than the levels of new supply and thus a large number of residential units may be left vacant.

However, going by the past few years, it is unlikely that all these projects will complete on time. JLL believes only

40 per cent of the total proposed supply of residential units in Dubai has actually materialised over the past five

years.

The total residential stock in Dubai is estimated at 491,000 units at the end of 2017. Key projects which were

completed include Duja Tower in Trade Centre (679 units) and The Polo Residence in Meydan (598 units). 2018 will

likely see up to 17,000 apartments entering the market, estimates the consultancy.

Although 2017 witnessed a slew of project launches in Dubai, their number was significantly below peak levels

seen in 2006/2007 and the volume and value of sales were also below levels recorded during 2013/2014.

Both sales prices and rents declined over the year, but the rate of decline slowed over Q4. As the market absorbs

additional units, it is expected that prices will continue adjusting (downwards).

JLL reckons that one of the major drivers of the more subdued market has been the slowdown in economic

growth. The start of 2018 could see a reduction in activity in the real estate market due to uncertainties around

the value-added tax (VAT).

"The UAE real estate industry is entering into a transitional phase, with VAT now in effect and key stakeholders

seeking to decipher its immediate and longer term impact. Although VAT does not apply to residential rents and

sales of new residential property, other real estate sectors could be negatively impacted by increased costs and

cash flow challenges," said Craig Plumb, head of research at JLL Mena.

The majority of residential sales were concentrated in the off-plan sector, where developers offer attractive prices

and payment plans. A total of 25,600 off-plan properties were purchased in Dubai in 2017, with 2017 set to record

the highest level of off-plan sales in Dubai since 2008, explains JLL.

Abu Dhabi

There were 3,000 residential units delivered in Abu Dhabi during 2017, with 88 per cent of completions being

apartments, bringing the total stock to approximately 251,000 units.

Future supply is expected to shift to the New Islands (Saadiyat Island, Reem Island, Yas Island and Raha Beach),

comprising more than 60 per cent of projects currently under construction. By 2020, 12 per cent of the total

residential supply in Abu Dhabi will be on New Islands, compared to eight per cent in 2017. This trend is

predominantly driven by the high number of apartment completions on both Reem Island and Al Raha Beach.






Limited future supply is expected to enter the main Abu Dhabi Island representing approximately 57 per cent of

the total residential supply in Abu Dhabi in 2020 compared to 62 per cent in 2017.

Both apartment and villa sales prices saw slight declines over the last quarter of 2017, while rents remained flat

for both segments. Investor sentiment has been negatively impacted since 2014 when oil prices started declining.

Sharjah

Congestion in the older residential locations in the western parts of the emirate has led a significant shift in

population to more eastern locations.

A big change in the Sharjah residential market results from changes to the property ownership laws introduced in

2014 to allow non-Arab expatriates to purchase property. This has resulted in the development of a number of

master-planned communities, including Al Zahia, Tilal City, Nasma Residences, Al Mamsha, Aljada and Sharjah

Waterfront City.

The vast majority of the residential units in Sharjah are apartments (89 per cent), with only 11 per cent of the

current stock comprising villas.

There have been announcements to construct around 30,000 additional residential units across Sharjah in

coming years.

The average price of apartments sold in Sharjah has remained largely unchanged during 2017. Rents in Sharjah

have continued to decline (by between six per cent and 10 per cent) over the year. This has been driven by

softening of rents in Dubai, which has reduced the movement of tenants from Dubai to Sharjah. Sharjah

continues to be an affordable residential destination, with average apartment rents 30 to 40 per cent lower than

comparable mid-market products in Dubai.


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OFF-PLAN IS OFF THE CHARTS Monday, January 15, 2018

It's no secret that off-plan property sales were responsible for the market momentum in Dubai last year. The

volume of off-plan transactions were up 60 per cent year on year in 2017. They accounted for over 70 per cent of

all transactions last year. December seemed to be a continuation of that yearly trend, with the month alone

seeing 2,190 such deals, according to data released by Global Capital Partners (GCP). Only July witnessed more

off-plan transactions last year at 2,219 deals.

"Off-plan transactions have had an extraordinary year, fuelled largely by generous back-ended and post-handover

payment plans provided by developers. December proved to be a continuation of that yearly trend; it will be

interesting to gauge how the appetite changes [if at all] during the first half of 2018, especially as emphasis starts

to shift towards deliveries of some of these projects," says Hussain Alladin, head of IR and research at Global

Capital Partners.

There may be many reasons for this spike. According to David Godchaux, CEO of Core Savills: "Few off-plan

transactions take time to be reflected in the Oqood system, particularly from smaller developers. December also

had a lot of holiday bargains and additional aggressive payment plans lasting for the month which may have

caused this uptick. Lastly, December along with March are usually one of the busiest months of the year as

businesses/individuals both take decisions before financial year closures. Also, anticipations of mark-ups due to

higher service charges on residential products may have triggered closures."

The spike in December transactions could also be due to people being concerned about impending VAT and how

this may impact them.

Dubai South or Dubai World Central registered the biggest uptick in off-plan transactions last year - up a

whopping 738 per cent from 2016.

"This demand stems from one of the lowest entry points available in the market," reckons Godchaux.

The proximity of Dubai South to the Expo site and the price points it offers attracted both end-users and investors

alike.

"There is demand for a few reasons, namely excellent payment plans from developers and the hope of good

capital appreciation due to the transport infrastructure and Expo 2020," observes Mario Volpi, chief sales officer,

Kensington Exclusive Properties.

Other projects that saw robust off-plan sales were Dubai Hills Estate, Dubai Creek Harbour, Jumeirah Village Circle

and Downtown Dubai.

Ready market performance

The secondary market, on the other hand, clearly suffered in the aftermath of off-plan's dominance - transactions

in 2017 were up a measly two per cent, according to GCP data.

Among the communities that performed well, Discovery Gardens outperformed the rest, with secondary market

transactions up 32 per cent in 2017 while Motor City saw a 42 per cent decline in deal volume. Sales were also

weak in International City and International Media Production Zone.

"Discovery Gardens seems to have attracted incremental investor interest especially after the announcement of

the extension of the Metro, as well as to cater to the growing construction projects that are taking place in Dubai

South. To that extent, there has been some rotation of funds away from International City towards Discovery

Gardens," explains Alladin.






"Despite the reduction in rent and sale prices, the return on investment for Discovery Gardens is one of the

highest in Dubai. International City is perceived to be of low quality and therefore not in great demand," informs

Volpi.

"Discovery Gardens saw a few bulk deals in 2017 creating this spike. Nevertheless, sales price performance has

been relatively weak, witnessing a six per cent drop year on year. The average sales price drop was more

significant [eight to 10 per cent] as we are noticing a flight to quality on the secondary market on the back of

softening prices in core locations too, combined with secondary locations seeing increasing competition coming

from numerous off-plan launches at low price points. Still we see many owners holding back selling as selling now

is much below premiums and the yields are still good/high," adds Godchaux.

Office market

December also registered the highest volume of commercial transactions in 2017 with 210 deals. With VAT kicking

in on January 1, 2018, there was a flurry of activity in the last month of 2017.

"The spike in office demand has partly been due to the imposition of VAT for commercial buildings in 2018. In a

broader sense, the office demand curve at the lower end of the spectrum continues to illustrate demand from

SMEs," expains GCP's Alladin.

"The office transactions are primarily concentrated in the strata office districts of Jumeirah Lakes Towers and

Business Bay. We believe implementation of VAT on commercial properties played a part in this interim spike,"

concludes Godchaux.


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REVEALED: 5 MOST EXPENSIVE AREAS TO

RENT AND BUY IN DUBAI Monday, January 15, 2018

Those in search of a residence befitting their Dubai lifestyle may want to check out these Top 5 lists, showing the

most expensive apartments and villas to rent or buy in the City of Gold.

For those looking to buy a villa, here is some context: a square foot in Emirates Hills costs 243 per cent more, and

in Palm Jumeirah 221 percent more, than the median asking price in Jumeirah Village Circle, the least expensive

area in Dubai, says PropertyFinder Group.

The median price to rent an apartment in Dubai is Dh89 per square foot. By contrast, Downtown Dubai (Dh117

per sq ft), the most expensive neighbourhood to rent, is a whopping 31 per cent more costly than the emirate's

median.

The biggest drop in asking price for apartments for sale was in The Views (-5.2 per cent), knocking it off the Top 5

list of most expensive. Still not a bargain, though, at Dh1543 per sq ft, says PropertyFinder.


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EMAAR'S NEW DUBAI ISLAND DESTINATION Thursday, January 18, 2018

Emaar Development on Thursday unveiled a private gated island destination in the Arabian Gulf, offering

residents the opportunity to experience Miami beach style living in Dubai.

Providing exclusive access for residents to a 1.5km private beach, the new 10 million square feet Emaar

Beachfront destination will feature a wide range of leisure and lifestyle attractions including F&B outlets,

beachside play areas and retail pop-ups set along a promenade.

Emaar said it is now offering the first residences for sale at a twin-tower development of 33-storeys and 26-

storeys, Beach Vista.

Customers can choose from a selection of 1 to 4-bedroom apartments that will have access to facilities such as

swimming pools, gyms and parking areas at the podium.

Ahmad Al Matrooshi, managing director of Emaar Properties, said: “Emaar Beachfront is a one of its kind private

island development that offers the opportunity to experience a new lifestyle by the Arabian Gulf.

"Its unique selling proposition is its location and the free access it offers for residents to a private beach.”

Emaar said it will launch the sale of Beach Vista homes on January 20.


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DUBAI TO HOST FIRST ARAB LAND

CONFERENCE Saturday, January 20, 2018

The Dubai Land Department, DLD, has announced that Dubai has been chosen to host the First Arab Land

Conference, which will run from February 26-28, 2018.

The conference will address many of the most-challenging land-related issues in Arab countries, including how to

manage land to reduce conflicts, and how to maximise the use of land and real estate for individuals, states, and

society as a whole. In addition to being a platform for knowledge sharing, the conference will work towards

enhancing regional cooperation, capacity development, and innovation in land management and real estate

reform in order to promote social and economic development in the Arab region.

DLD is collaborating with several regional and international institutions and bodies to organise the event,

including the World Bank, the Global Land Tool Network, UN-Habitat, the Arab League and the Arab Union of

Surveyors.

In addition to high-level ministerial meetings, the conference will also include technical sessions in which research

papers and presentations will be presented which will address land and property cases in Arab countries.

The key topics and presentations of the conference are access to land for sustainable business and investment;

Interlink between housing policy and land management; education, research and capacity development on land

policy, management, and administration; protection of land and property rights of displaced people and refugees;

women, land and property rights; and new technologies to support land and real estate registration systems,

property valuation and taxation policies.

The conference will be open to all interested parties including those employed in the real estate sector,

individuals, companies and institutions, government officials, academics, students, real estate brokers and

developers.

Source: Gulf News

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DAMAC CHAIRMAN TO SPEAK ON DIGITAL

SKILLS Saturday, January 20, 2018

The founder and chairman of Damac Properties, Hussain Sajwani, will speak about the increasing demand for

advanced digital skills on day one of the World Economic Forum in Davos.

Sajwani's session to focus on the Middle East's efforts in developing ICT skills among its young population, where

Sajwani was the main supporter of the recently launched 'One Million Arab Coders' Initiative in October 2017.

The 'Digital Skills Imperative' session will bring top decision makers and thinkers together to discuss the need for

advancing digital skills as a priority, in response to rapid global digitalisation and mass automation. The session

aims to identify whether existing skill-building efforts can scale up to address the changing nature of the digital

workforce.

"As the world moves towards the adoption of a digital economy, it is becoming increasingly dependent on the

availability of a skilled workforce, where each nation's economic success and failure is dependent on its efforts in

developing a talent pool of highly skilled workers to cope with this disruption," said Sajwani.

'One Million Coders' is a first of its kind pan-Arab education initiative supported by the Hussain Sajwani - Damac

Foundation, the philanthropic arm of the Damac Group and its chairman. Launched in collaboration with Dubai

Future Foundation, the initiative aims to create a pool of one million software coders to lead the Arab world into a

digital era.

The 'Digital Skills Imperative' session at WEF aims to highlight some of the key industry trends driving demand for

advanced skills, and raises a number of discussions around the topic including shifting mindsets on lifelong

learning and inclusive opportunities, designing incentives for collective action and investment, and understanding

the role of emerging technologies.

"The digital skills gap is a global dilemma, not just one for the emerging markets, as millions of jobs in software

development already need to be filled right now. What happens when these jobs increase by 20, 30 or 40 percent

in the near future? Where will the global community find a sustainable stream of talent to tap into? The global

community needs more initiatives like 'One Million Coders' to empower their societies with the skills and technical

expertise required for jobs of the future. This is a strategic imperative for the economic success of any nation, as

the world enters the Fourth Industrial Revolution," Sajwani added.


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RESIDENTIAL REIT COMPLETES DH772M IN

NEW TRANSACTIONS Tuesday, January 16, 2018

The Sharia-compliant Residential Real Estate Investment Trust (REIT) has completed transactions totaling Dh772

million.

As part of the deal, Abu Dhabi Islamic Bank provided 165 units from three buildings on Al Reem Island to The

Residential REIT.

Arcapita and a Saudi institution also contributed three buildings — with 285 units — on Saadiyat Island as part of

the transaction. The combined value of Residential REIT’s portfolio touched Dh1.3 billion as of December 31, 2017.

The Residential REIT — incorporated in the Abu Dhabi Global Market — was launched a year ago by Equitava, the

REIT manager. With the latest deal, the shareholders in the former include National Bonds Corporation, Al Hamra

Real Estate Development, Abu Dhabi Islamic Bank, Arcapita Investment Management, the Saudi institution and a

private investor.

“This is our second REIT in the UAE to achieve critical size and attract key institutional investors,” said Sylvain

Vieujot, Chairman of Equitativa.

“The Residential REIT has built an attractive and diversified portfolio providing the strong foundation needed to

propel us to the next stage, where we prepare for further growth and a future IPO.

“We trust that 2018 will be a great year for both our UAE Reits — Emirates REIT and The Residential REIT.”

Source: Gulf News

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TABARAK BUYS MAJORITY STAKE IN ABU

DHABI’S TASWEEK REAL ESTATE Tuesday, January 16, 2018

Tabarak Investment said on Tuesday it has acquired more than 80 per cent stake in Abu Dhabi’s Tasweek Real

Estate Development and Marketing.

No financial details of the deal were disclosed in an emailed statement sent to the media.

The acquisition comes as part of Tabarak’s plans to diversify and support its real estate portfolio, which will now

include Tasweek’s strategic international real estate investments. “In the near future, Tasweek’s current

investment portfolio will witness additional projects that are directly related to Tabarak’s investments,” Ahmad

Kilani, Chief Executive Officer at Tabarak said in a statement.

Source: Gulf News

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DSI IN TALKS FOR SECURING DH750M

CONSTRUCTION CONTRACTS IN AL AIN Monday, January 15, 2018

Drake & Scull International (DSI), which is seeking to restructure around Dh1 billion of debt, is negotiating Dh750

million worth of contracts for a real estate development in Al Ain after clinching an intial contract worth Dh250m,

the company said on Monday.

Gulf Technical Construction Company (GTCC), a subsidiary of the Dubai-based construction firm, won a Dh250

million contract to develop the mixed-use villa Nasayem project in Wahat Al Zaweya in Al Ain, which comprises

290 three-bedroom villas and 46 four-bedroom villas.

The Dubai-listed contractor expects to conclude talks in the first half of 2018 for securing additional contracts

worth Dh750m within the Al Ain development.

“The new Wahat Al Zaweya contract is a great start towards what we expect to be an invigorated fiscal year

marked by steady recovery and further stability,” said Rabih Abou Diwan, investor relations director at DSI. “We

expect more of such positive developments in the coming months from GTCC and across all our divisions.”

DSI said earlier this month it expects to finalise restructuring of approximately Dh1bn of debt it raised for projects

in Saudi Arabia by March-end this year. It will also begin negotiations with bondholders in the UAE to refinance

Dh440m worth sukuk in the second half of 2018.

The Dubai contractor, which was hit hard by a slowdown in the Arabian Gulf economies, has already reached an

agreement with a group of nine lenders to refinance Dh566m of corporate debt. Under the deal, agreed in the

fourth quarter of 2017, the banks on average have extended the maturities by three years on loans, representing

56 per cent of the company’s total corporate general debt, which at the end of September last year stood at

Dh1.07bn.

The company has secured new credit lines and working capital facilities for its ongoing and new projects portfolio.

The Dh440m sukuk, due to mature in November 2019, makes up the remaining tranche of the DSI’s corporate

general debt. The DSI group’s total bank debt at the end of the third quarter of 2017 had reached Dh2.92bn.


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UPSCALE PROPERTY PROJECTS WORTH

DH2.7B LAUNCHED IN SHARJAH Tuesday, January 16, 2018

Construction will commence within weeks on three new mega projects in Sharjah, each of which will try to make

full use of the emirate’s extensive waterfront possibilities.

The combined investments would be in the range of Dh2.7 billion, including Dh2.4 billion on developing Maryam

Island into a 460,000 square metre mixed-use destination featuring 1,890 freehold residences and a hotel

component.

Then there is the “Kalba Waterfront”, which will feature extensive retail and entertainment options and again with

a waterside setting.

The third of the projects announced on Tuesday (January 16) is for a luxury hotel, the “Palace Al Khan”.

Spread over a 66,000 square metre expanse, the property will come on a location that has vestiges dating back

centuries. The project will retain all of the “pearl fishing village” remnants, according to the developer. (The 87-

room hotel will be managed by an Emaar Hospitality Group brand and cost Dh120 million to build.) All three

projects will benefit from a tight construction schedule, with key phases being complete in “three to four years”.

A 50:50 alliance between the Sharjah Investment & Development Authority (Shurooq) and Abu Dhabi-

headquartered Eagle Hills is responsible for all three projects. A new entity, Eagle Hills Sharjah Development, is

the operating entity.

According to Shaikha Budoor Bint Sultan Al Qasimi, Chairperson of Shurooq, “We are today building a new city for

the Sharjah of the future. “We are confident the three projects will add to the quality of real estate in the emirate

and lead to more pioneering projects in line with aspirations.”

“Shurooq’s intention is to create an identity for Sharjah built around these newer luxury developments,” said

Marwan Bin Jasem Al Sarkal, CEO of Shurooq.

“It will be part of our move to diversify the local economy and real estate will have a major say in that.” (Shurooq’s

real estate portfolio includes multiple urban renewal programmes across the city.)

For Eagle Hills, a privately held real estate investment company with Emaar’s Mohammad Alabbar as Chairman,

the move into Sharjah builds on its UAE portfolio. Until now, its development portfolio had been weighted by

signature projects, principally hospitality-themed, in locations such as Morocco and Serbia. (Eagle Hills is also

currently working on a hotel and gated community project in Fujairah.) “

Across all three projects, we will maintain the special culture that is so associated with Sharjah,” said Alabbar.

“There is nothing to suggest that Eagle Hills would only take on non-UAE projects. The company very much has a

role in the UAE’s development space.”

Sharjah’s real estate sector has been in over drive over the last two years. New initiatives are coming up such as

an industrial free zone and which would decongest some of the established commercial areas within the city.

The market has also seen the entry of Arada, a joint venture involving Sharjah and Saudi investment companies,

and whose project, Aljada, aims to build on one of the last stretches of land in the heart of the city. Areas such as

University City and further east are also going through the development phase.






Sharjah goes upscale with trio of Eagle Hills developed projects

It is not greenfield sites or the outskirts that Sharjah has provided for three new high-profile projects. Each of

these will fill gaps in the emirate’s development arena and makes full use of what nature and history have offered

it. For instance, the Kalba Waterfront retail destination will overlook a lagoon lined with mangroves. And sticking

with the natural theme, the mall will have street-like shopping experiences. The gross leasable area will be 11,204

square metres and projected completion in Q3-19. Cost will be Dh160 million.

Making use of the offshore location, Maryam Island has an expected completion date of Q4-19. Apart from the

1,890 homes, there will be five- and four-star hotels with a combined 602 rooms. The development cost is pegged

at Dh2.4 billion.

The pearl fishing village of Al Khan will now have prominence as the future location for the super-premium, 87-

key Palace Al Khan hotel. It will cover an area of 66,302 square metres along the Al Khan coastline. Completion is

projected for Q2-20.

Source: Gulf News

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LULU GROUP UNIT ACQUIRES EDINBURGH

HOTEL FOR $120M Tuesday, January 16, 2018

Twenty14 Holdings, the hospitality investment arm of Lulu Group, said on Tuesday it has completed the

acquisition of a Waldorf Astoria property in Edinburgh for $120 million.

The Caledonian now joins a portfolio of $650 million worth of luxury property across the UK, the Middle East, and

India owned by Twenty14. In a statement, the company said it plans to invest another $28 million to enhance the

building on Edinburgh’s Princes Street.

The acquisition of the Waldorf Astoria – The Caledonian follows another key takeover by Twenty14 of Great

Scotland Yard, home of London’s Metropolitan Police Service, in 2015 for £110 million. The company is turning the

London property to a five-star hotel.

Adeeb Ahamed, managing director of Twenty14 Holdings, said the company is currently “actively pursuing” other

investment opportunities in Europe, the Middle East, and India.

“Our vision is to create a billion-dollar investment company…There is a tremendous opportunity to extend our

portfolio of luxury hotels, in view of the current market scenario. We have a few projects in the pipeline at various

stages of planning and development, and we aim to add a few more properties to our portfolio in the next few

years,” he told Gulf News by email.

Twenty14 said it has been looking at iconic locations around the world to add to its portfolio, and The Caledonian

was a good fit.

Asked about the concerns regarding Brexit on Scotland’s economy, Ahamed said, “We are yet to see a clear path

for Brexit, although related developments have picked up since the decision was made.”

“When Brexit does happen, there will be fund movement, which would naturally bring certain financial

constraints. However, unless a proper solution or decision is taken, it is too early to opine or reach a conclusion

on the matter,” he said.

A Twenty14 spokesperson said the UK is a strong market, and that some projects are now up for sale as a result

of Brexit.

The spokesperson confirmed the company plans to keep the management of the hotel unchanged with the

Waldorf Astoria, a brand operating under Hilton, and that it plans to preserve the heritage of the 241-room

property.

Source: Gulf News

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WHY INVESTING IN SHARJAH PROPERTY IS A

NO-BRAINER Tuesday, January 16, 2018

The Sharjah real estate market did not get its due until the government relaxed rules and opened investment to

expatriate buyers on 100-year leases in 2014. This decision resulted in a handful of developers launching large,

master-planned communities to tap Arab as well as non-Arab investors and end-users. Arada was the new kid on

the block in 2017, having launched two master communities - Nasma Residences and Aljada - in Sharjah.

"It wasn't our intention to launch two massive master developments in the same year. Arada has a charter to

focus on creating prime and quality communities. We had our eyes on Dubai, Sharjah, Saudi Arabia and other

international markets such as Italy, London and Sydney. But, the UAE is our focus point. Sharjah is a hidden gem.

There is a 10 per cent transactional gap between Sharjah and Dubai. We wanted to be the first mover to capitalise

on Sharjah's untapped potential. No one has given it the merit it deserves," said Ahmed AlKhoshaibi, Arada's CEO.

According to Craig Plumb, head of research, JLL Mena: "The main attraction of projects in Sharjah is their lower

cost than Dubai. While it clearly varies from project to project, JLL estimates that residential prices in Sharjah are

currently 30 per cent to 40 per cent lower in Sharjah for product of similar quality."

"Another attraction is the location of new projects such as Aljada. These projects are providing expatriate families

with access to good quality family housing to purchase in Sharjah for the first time."

The $6.5 billion (Dh24 billion) Aljada is a massive master community spanning 24 million sq ft and split into 10

phases, each including 1,000 residential units each. Phase one has already been released to the market and only a

few hundred units remain to be sold. The developer plans to release phase two by the end of January and the

entire community will be ready by 2025.

Other components in Aljada include a business park spanning 500,000 sqm and projected to include 20,000

workers, four hotels (two 5-star and two 3-star), a hospital, four schools, a retail boulevard and linear parks

running through the entire community.

"We are in talks with the government for a free zone. The business park will be launched in April 2018. We will

retain a good chunk of assets in the community for recurring revenue," the CEO adds.

Arada is also planning an entertainment hub as a draw card to attract approximately 10,000 tourists to the

community. "We aim to give you an entertainment experience of Dubai standards but at the cost of what you

would pay in Sharjah," AlKhoshaibi added.

Although the developer planned to launch Aljada in 2018, the launch was preponed to 2017 after it witnessed

robust sales for Nasma Residences. "There is a need for a well-designed, quality master-planned development

that has amenities in Sharjah," he observed.

The untapped demand is reflected in how Arada managed to sell out 115 units in a single building in one day, a

record for Sharjah.

Currently, end-users account for 30 per cent of sales in Aljada and investors make up the rest. "I expect that trend

to change once we start construction. There will be a 50:50 split. End-users are waiting for us to hit the ground."

Arada is tendering for infrastructure and phase one construction. "We will award the job in February and likely

start construction in March. We might do pre-mobilisation on site to save time," informed AlKhoshaibi.






A big chunk of investors is UAE locals, followed by those from the GCC (Kuwait, Saudi Arabia), Arabs (Tunisia,

Algeria, Syria, Palestine, Lebanon) and Asians (Indian, Pakistan). "I believe the Arabs and Asians will eventually

become the biggest buyers. UAE locals have a good eye for value; they know the price now is cheap and there is

good potential for appreciation."

The average price per sqft at Aljada is Dh750, with studios priced from Dh299,000, one-beds from Dh545,000 and

the cost going up to Dh3 million for a semi-detached four-bedroom villa.

Arada does not allow buyers to sell until they have paid 40 per cent of the property value. This limits speculation.

"We have had interest from potential bulk buyers. We do our due diligence before doing bulk deals. It's mostly

from GCC investors who are eyeing capital appreciation and long-term revenue," said the CEO.

The developer has allocated Dh5 billion of equity to Aljada. It recently secured a syndicated loan of Dh1 billion

from Abu Dhabi Commercial Bank and Dubai Islamic Bank to help finance the development of Aljada.

Unlike Dubai developers, Arada isn't offering overly aggressive payment plans. There are two payment plans in

place for Aljada: 30:70 and 40:60. "We want to make sure that people who are buying are committed. We don't

want to force people to buy something they can't afford."

On why property investors must choose Sharjah over Dubai, AlKhoshaibi said: "Investors must look at capital

appreciation and yields. Sharjah's real estate market has a lot of growth potential. The government's initiative to

allocate the biggest spend for infrastructure shows its commitment to the real estate market. Also, Sharjah

retains its residents a lot more, with their average tenure being 20 to 30 years. The cost of living is also affordable

in Sharjah. The emirate also offers net yields between eight to 10 per cent."


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SHARJAH INT'L RE-OPENS DUTY FREE AREA

AFTER MAJOR REVAMP Thursday, January 18, 2018

Sharjah International Airport has re-opened its Duty Free shopping area, following extensive renovations.

The revamp includes new internationally-recognised brands, in addition to its original nine stores and extends

over a total area of 1,800 square metres, state news agency WAM reported.

The renovation project is part of Sharjah International Airport’s efforts to improve services for passengers.

The opening was attended by Sheikh Khalid bin Issam Al Qasimi, chairman of Department of Civil Aviation in

Sharjah, Ali Salim Al Midfa, chairman of Sharjah Airport Authority and Sheikh Faisal bin Saud Al Qasimi, director of

Sharjah Airport Authority.

"This renewal underscores our continued commitment to providing the best services, world-class shopping and

quality facilities to our passengers, while enabling our Duty Free market partners to benefit from the continued

growth of passengers and customers during the coming period," said Al-Midfa.

Andrea Belardini, divisional CEO for Dufry Asia, Middle East and Australia which operates the Duty Free area, said:

"The completion of our new store marks another important step in our journey to deliver retail excellence and a

world-class customer experience to passengers visiting Sharjah International Airport."


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CARILLION RESCUE HOPES WERE

UNDERMINED BY BRITISH BANKS, COURT

DOCUMENTS SHOW Wednesday, January 17, 2018

The collapse of Carillion came only days after one of the British group’s main lenders, Royal Bank of Scotland

(RBS), tightened terms on its funding, court documents show.

The RBS decision three days before the collapse served to weaken attempts to protect Carillion’s cash position,

the construction and services company’s interim CEO Keith Cochrane said in a statement submitted to the High

Court in London.

RBS took “unilateral action, which in the company’s view undermined the group’s efforts to conserve cash”,

Cochrane said.

Carillion collapsed on Monday, throwing hundreds of large projects into doubt and forcing the government to

step in to guarantee vital public services in one of Britain’s biggest corporate failures.

Carillion owes almost £1.3 billion to its lenders and had only £29 million in cash reserves by Monday, the

documents show.

The company held about 450 government contracts helping to build roads, railways and schools and maintain

hospitals before it collapsed under the weight of its debts after a series of construction projects ran into trouble.

Cochrane said the company’s cash position was eroded after RBS on Friday proposed that the company make

payments to suppliers two days earlier than previously planned. This hit the company’s liquidity by between £2

million ($2.75 million) and £20 million, Cochrane added.

RBS declined to comment.

The taxpayer-funded bank has in the past been heavily criticised for its treatment of distressed business

customers, with the actions of its Global Restructuring Group the subject of parliamentary scrutiny and legal

action.

Santander, another of Carillion’s largest lenders, was also singled out for criticism.

Cochrane accused Santander of putting the brakes on Carillion payments, though it later reversed its decision

after talks with the company.

Santander said in a statement it was a prudent step and that the bank continuously reviews its lending to reduce

exposure to losses.

Talks between Carillion, the government and other stakeholders failed to reach agreement on a “bridging

arrangement” last week, according to the documents, which provide a detailed account of the company’s six-

month demise.

As a result, the stricken company wrote to the government on Saturday to make a final request for short-term

funding that would give bosses time to implement a rescue plan.






However, Carillion’s fate was sealed on Sunday when the government told directors it would “not be willing to

provide such support to the company”.

Last-ditch talks with key financial stakeholders also failed to reach a deal and the directors concluded the 200-

year-old business was insolvent at a board meeting held the same day.

Source: Gulf News

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BRITAIN’S CARILLION COLLAPSES, FORCING

GOVERNMENT TO STEP IN Monday, January 15, 2018

Britain’s Carillion collapsed on Monday after its banks lost faith in the construction and services company,

throwing hundreds of major projects into doubt and forcing the government to step in to guarantee vital public

services.

Carillion was forced into compulsory liquidation after costly contract delays and a slump in new business left it at

the mercy of its lenders and battling a ballooning debt pile.

The demise of the 200-year-old business poses a major headache for Theresa May’s government which has

employed Carillion to work on 450 projects including the building and maintenance of hospitals prisons, defence

sites and the country’s new superfast rail line.

Employing 43,000 people around the world, including 20,000 in Britain, Carillion has been fighting for survival

since July when it revealed it was losing cash on several projects and had written down the value of its contract

book by £845 million (Dh4.2 billion or $1.16 billion).

“In recent days we have been unable to secure the funding to support our business plan and it is therefore with

the deepest regret that we have arrived at this decision,” Chairman Philip Green said.

“This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve

over many years.”

Employing 43,000 people around the world, including 20,000 in Britain, Carillion has been fighting for survival

since July when it revealed it was losing cash on several projects and had written down the value of its contract

book by £845 million (Dh4.2 billion or $1.16 billion).

Carillion has debt and liabilities of £1.5 billion with creditors that include banks RBS, Santander UK, HSBC and

others. It has a pension deficit, included within that figure, of £580 million.

With banks refusing to accept the group’s latest attempt to restructure, May’s senior ministers met around the

clock in recent days, under pressure from the opposition Labour Party and unions not to use taxpayer money to

prop up the failing company.

David Lidington, the minister in charge of the Cabinet Office which oversees the running of government, said his

first priority was to ensure that public services continued. He urged the company’s staff to continue to work and

said the government would pay their salaries.

Some contracts handled by Carillion would go to alternative providers, he added.

The company’s collapse comes at a difficult time for the government as it negotiates its exit from the European

Union. “It is regrettable that Carillion has not been able to find suitable financing options with its lenders but

taxpayers cannot be expected to bail out a private sector company,” Lidington said in a statement.

“For clarity, all employees should keep coming to work, you will continue to get paid. Staff that are engaged on

public sector contracts still have important work to do.” Labour’s business spokeswoman Rebecca Long-Bailey

called for a full investigation as to why the government continued to award Carillion contracts when it was clear it

was in trouble.






“This company issued three profit warnings in the last six months yet despite those profit warnings the

government continued to award government contracts to this company,” she told BBC TV.

“We’re ... asking for a full investigation into the government conduct of this matter.” Spun out of Tarmac nearly 20

years ago and having bought Alfred McAlpine in 2008, Carillion has worked on key construction projects including

London’s Royal Opera House, the Suez Canal road tunnel and Toronto’s Union Station.

In July last year it won contracts to build Britain’s new High Speed 2 rail line, a major project that will better

connect London with the north of England.

Source: Gulf News

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IRELAND RACKED UP $2.8 BILLION OF

COMMERCIAL PROPERTY INVESTMENTS IN

2017 Wednesday, January 17, 2018

According to global real estae consultant JLL, €2.3 billion ($2.8 billion USD) of Irish investment property traded

during the year 2017. This level, while lower than 2016 transaction levels, is in line with our expectations. It is a

return to more 'normalised' market volumes. As in previous years, the final quarter was the strongest of the year,

with over €970 million ($1.18 billion) trading in Q4 2017.

The largest transaction of the year was the sale of The Square Shopping Centre, Tallaght in Q4, which was jointly

sold by JLL for over €250 million ($306 million). In terms of location, the market remained Dublin-centric. Across

sectors, offices and retail were the strongest performing sectors, representing 37% and 31% of total year end

investment volumes respectively.

John Moran, CEO and Head of Investment said that: "It has been another strong year for investment in Ireland

with €2.3 billion ($2.8 billion) trading. After the exceptional performance of last year, 2017 has seen the Irish

investment market return to a more normalised level of activity. Interest in the Irish market, has remained high,

with a large number of prime-large scale assets in particular attracting overseas interest and a number of new

entrants to the market. Whilst offices and retail have dominated volumes, we have started to see very strong

interest in the alternatives sector in Ireland. This includes Student Housing and Private Rented Sector. We are

forecasting this trend to continue in 2018, with these types of assets to be met with strong demand and

aggressive pricing, as opportunities come to the market. We are also expecting to continue to see strong demand

across the offices and logistics sectors, where solid occupier market fundamentals are reinforcing investor

appetite."

Source: World Property Journal

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With over 30 years of Middle East experience,

Asteco’s Valuation & Advisory Services

Team brings together a group of the Gulf’s

leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai,

Northern Emirates, Qatar, and the Kingdom of Saudi

Arabia not only provides a deep understanding of the local

markets but also enables us to undertake large

instructions where we can quickly apply resources to meet

clients requirements.

Our breadth of experience across all the main property

sectors is underpinned by our sales, leasing and

investment teams transacting in the market and a wealth

of research that supports our decision-making.

John Allen BSc MRICS

Director, Valuation & Advisory

+971 4 403 7777

[email protected]

Jenny Weidling BA (Hons)

Manager – Research and Advisory

+971 4 403 7789

[email protected]

VALUATION & ADVISORY

Our professional advisory services are conducted by

suitably qualified personnel all of whom have had

extensive real estate experience within the Middle

East and internationally.

Our valuations are carried out in accordance with the

Royal Institution of Chartered Surveyors (RICS) and

International Valuation Standards (IVS) and are

undertaken by appropriately qualified valuers with

extensive local experience.

The Professional Services Asteco conducts throughout

the region include:

• Consultancy and Advisory Services

• Market Research

• Valuation Services

SALES

Asteco has established a large regional property sales

division with representatives based in UAE, Saudi

Arabia, Qatar and Jordan.

Our sales teams have extensive experience in the

negotiation and sale of a variety of assets.

LEASING

Asteco has been instrumental in the leasing of many

high-profile developments across the GCC.

ASSET MANAGEMENT

Asteco provides comprehensive asset management

services to all property owners, whether a single unit

(IPM) or a regional mixed use portfolio. Our focus is

on maximising value for our Clients.

OWNER ASSOCIATION

Asteco has the experience, systems, procedures and

manuals in place to provide streamlined

comprehensive Association Management and

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mixed use communities throughout the GCC Region.

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completion and handover of units to individual unit

owners.

NEWS BRIEF 03 - Asteco Property Management€¦ · DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN |...

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