NEWS BRIEF 04 - Asteco Property Management...OFFICE TOWER SALE IN ABU DHABI WAS TOP DEAL IN 2017...
Transcript of NEWS BRIEF 04 - Asteco Property Management...OFFICE TOWER SALE IN ABU DHABI WAS TOP DEAL IN 2017...
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RESEARCH DEPARTMENT
NEWS BRIEF 04
SUNDAY, 28 JANUARY 2018
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REAL ESTATE NEWS
UAE / GCC
WHY DEVELOPMENT PHASING IS KEY IN MASTER PLANNING
WHY MILLIONAIRES LOVE UAE
UAE RANKED 13TH MOST PROMISING ECONOMY FOR INVESTMENT
UAE HOTEL OCCUPANCY SURGES AS RATES DROP IN 2017: STR
MIDEAST INVESTORS HAVE REASONS TO RETAIN TRUST IN CITY
FOR FACILITIES MANAGERS, KEEPING IT SIMPLE GETS THE JOB DONE
THE VALUE OF LUXURY REAL ESTATE
THE OFF-PLAN IMPACT ON DUBAI REAL ESTATE
A HOME AND AN INVESTMENT
JLL NAMES THIERRY DELVAUX NEW REGIONAL CEO
UAE GOVERNMENT RANKED SECOND IN TRUST GLOBALLY: STUDY
UAE'S AZIZI SAYS PALM PROJECT TO BE DELIVERED AHEAD OF SCHEDULE
REVEALED: THE ONLY PROPERTY SECTOR SHOWING GROWTH IN THE UAE
DUBAI
DEVELOPER LAUNCHES WATERFRONT APARTMENTS
WHY DAMAC CHIEF IS OPTIMISTIC ABOUT DUBAI
SHEIKH MOHAMMED REVIEWS RAPID PROGRESS OF DUBAI CREEK TOWER
PRIVATE DEVELOPERS DOMINATE READY HOUSING MARKET IN DUBAI
FIRST PHASE OF DUBAI BUILDING CLASSIFICATION COMPLETE
DEVELOPER LETS LOCATION, PRICING DO THE TALKING
EMAAR PROJECT CLINCHES DH1 BILLION WORTH OF SALES
UNION PROPERTIES SELLS EMICOOL STAKE FOR DH500 MILLION
EXPO 2020 AWARDS DHS670M CONTRACTS TO LAING O'ROURKE
DUBAI’S PROPERTY MARKET TOYS WITH CRYPTO POSSIBILITIES
DUBAI’S RENTAL INDEX COULD REFLECT NEW CLASSIFICATION
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REAL ESTATE NEWS
DUBAI’S 2018 FREEHOLD ACTION STARTS ON THE WATERFRONT
DUBAI TOURISM AND HUAWEI INK DEAL TO PROMOTE DUBAI IN AFRICA, CHINA
NO NEGATIVE TRUMP IMPACT ON BRAND SAYS DAMAC'S SAJWANI
DUBAI PROPERTY PRICES TO REBOUND IN 2018, SAYS NEW REPORT
DUBAI’S DEVELOPERS HOLD BACK PASSING ON VAT COSTS TO BUYERS
SMALL IS BEAUTIFUL
ABU DHABI
ABU DHABI HOUSE RENTS TO DECLINE MORE
ABU DHABI HOTELS SEE RECORD GUEST NUMBERS
DH220 MILLION ALUMINIUM PLANT OPENS AT KIZAD
ABU DHABI RENTS WILL REMAIN UNDER PRESSURE
OFFICE TOWER SALE IN ABU DHABI WAS TOP DEAL IN 2017
ASTECO EXPECTS 'MODERATE' DIP IN ABU DHABI HOUSING PRICES, RENTS IN 2018
MIRAL SAYS 80% OF UNITS LEASED AT ABU DHABI CORNICHE LEISURE PROJECT
NORTHERN EMIRATES
SHARJAH APARTMENT RENTS SEE STEEP DECLINE IN 2017
RAKTDA, AIRBNB INK AGREEMENT
SHARJAH VILLA RENTS DEFY ODDS TO INCH UPWARDS
INTERNATIONAL
PRICEY CENTRAL LONDON HOMES GET OVER ADJUSTMENT ISSUES
DP WORLD AND INDIA'S NIIF TO INVEST UP TO $3BN IN TRANSPORT, LOGISTICS
DOWNTOWN OFFICE MARKETS RECEIVE DISPROPORTIONATE AMOUNT OF NEW
SUPPLY IN US
TOKYO PRIME OFFICE RENTS TO DIP IN 2018 FROM NEW SUPPLY ADDED
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WHY DEVELOPMENT PHASING IS KEY IN
MASTER PLANNING Tuesday, January 23, 2018
According to data from the Dubai Land Department, total transaction value in 2017 reached Dh285 billion
through 69,000 transactions. Top locations were Downtown Burj Khalifa, Business Bay and Dubai Marina, and
UAE investors led the tally as the top nationality with investments amounting to Dh25 billion, followed by Indians
with Dh16 billion and Saudis with Dh7 billion worth of investments.
Continued transaction activity amid declining price and rent performance in the emirate reflects positively on the
attractiveness of real estate assets for regional and international investors. Prevailing yield compression in the
residential market has still maintained levels higher than what investors are likely to earn in other real estate
hotspots such as New York City, London, Hong Kong, among others.
Even as buyer interest is tilting heavily towards off-plan transactions (more than 67 per cent of overall
transactions in 2017 were in this category), developers are increasingly aligning project concept, phasing and
delivery with end-user demand. Among the newer formats being launched are integrated developments that
combine residential, commercial, cultural and entertainment offerings. As Dubai continues to grow, this style of
urban planning is crucial to maintain a 'city life' feel, while differentiating quality developments from run-of-the-
mill stock commonly seen in the past.
Developers have begun focusing on the positioning of the entire development at the master planning stage,
which gives them control over not only the residential units being built but also the theme and vision for the
community as a whole. This includes provisioning for schools, community retail, healthcare and hospitality early
in the development process rather than as an afterthought.
Some examples of such developments launched recently include La Mer, Dubai Harbour, Marasi Business Bay
and Bluewaters island. La Mer by Meraas is an integrated development of residential, commercial, leisure and
hospitality components. Located between Pearl Jumeirah and Jumeirah Bay, the 13.4 million sqft development is
spread over three areas - La Mer South, La Mer North and The Wharf. The community has 848 units under
construction, 688 of which are apartments and 160 of which are hotel rooms, expected to complete in December
2020.
Another integrated development by Meraas is Dubai Harbour launched in 2017. It is a waterfront destination
spread across 20 million sqft. The mixed-use development will combine high- and low-rise buildings, waterfront
villas, hotels and offices. The master plan includes Skydive Dubai, Dubai International Marine Club, Logo Island
and Dubai Lighthouse, which is a 135-metre-high tower that will house a luxury hotel.
Meraas is also developing Bluewaters Island off the coast of Jumeirah Beach Residence. The project combines
luxury apartments, penthouses and townhouses and is expected to be completed by 2021. Among the under-
construction elements are 10 residential towers with a total of 702 one, two and three-bedroom apartments, as
well as 17 townhouses, 150 retail shops and two luxury hotels. The destination is also home to Ain Dubai, the
world's largest observation wheel.
Across town near the Downtown area is Marasi Business Bay by Dubai Properties Group. The development is
spread across 12km of waterfront promenade along the Dubai Water Canal and Dubai Creek. The development is
divided into three areas - The Yacht Club, The Park and The Pier and is expected to complete in December 2022.
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The first of four Marasi Towers, Riverside, is set to be handed over in 2020. With a project budget of Dh1 billion,
the master plan integrates a range of amenities to cater to its residents and visitors.
These new developments point to a progressive shift towards building communities and from the developer point
of view, this goes beyond simply selling residential units and exiting from the area. Through integrated retail and
hospitality components, there are wider asset classes for investors to participate in the project, while end-users
and visitors are expected to be drawn to the development over a longer time frame.
Additionally, in a cyclical real estate market such as Dubai, such communities are expected to fare better during
periods of declining rents and occupancy pressures in the wider market, such as that seen over the last 12 to 18
months. Development phasing matched with supply-demand dynamics at the master planning stage and
inclusion of facilities closely tied to end-user and tourist visitor needs are key elements in determining the success
of these integrated communities.
Source: Khaleej Times
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WHY MILLIONAIRES LOVE UAE Wednesday, January 24, 2018
Led by Dubai, the UAE continues to be a magnet for the high net worth individuals (HNWIs) in 2017 with more
than 5,000 millionaires mainly from India, Turkey, Saudi Arabia and Nigeria making the emirate as their second
home.
Andrew Amoils, head of research at New World Wealth, revealed that the total wealth held in the UAE is $925
billion (Dh3.4 trillion) by private individuals - this includes everyone living there i.e. poor, middle class and wealthy
together, an increase of 10 per cent in 2017 and up by 60 per cent over the past 10 years from 2007 to 2017.
According to New World Wealth's report, Dubai was among the world's top 14 - and only one from the GCC - cities
where more than 1,000 HNWIs migrated to in 2017.
The study also rated the UAE among the safest country in the Middle East region.
High net worth individuals are generally categorised people having at least $1 million in assets.
Source of income
Amoils revealed that these UAE-based HNWIs are generating their income from financial services (banks),
professional services (law firms, consultancies), real estate, construction and transport industries.
Anita Yadav, head of fixed income research at Emirates NBD Research, said much of the earnings of HNWIs come
from business income or investment income.
"There are also some senior level executive, particularly in banking and finance and oil and gas who command
substantial employment income," she said.
She said the wealth of the UAE-based HNWIs is mainly invested in their own businesses.
"Dubai has a high number of small and medium businesses involved in retail and wholesale trade. Real estate is
another asset class which is attractive to HNWIs. Lately, investment in financial products and commodities is also
on the rise. In order to seek diversification, a noticeable segment of the HNWIs wealth is invested in overseas
assets," Anita Yadav told Khaleej Times.
Akber Naqvi, executive director and head of asset management, Al Masah Capital, sees family-owned businesses
as one of the main income sources for these millionaires.
"We see a lot of multi-generational family offices that were established either here in the region or in the
surrounding areas like sub-continent and Africa; their evolution is similar to the evolution of the global economies
- many have gone from being purely manufacturing to a more diversified portfolio of investments in various
sectors of manufacturing and services.
"Their wealth investments have also evolved and from being conservative and one-asset dimensional they have
started to build more diversified, dynamic multi asset portfolios that not only grow their wealth through various
economic cycles but in many cases they also accentuate and facilitate their core businesses," Naqvi added.
What attracts them to the UAE
Andrew Amoils said the UAE is very popular for migrating millionaires mainly due to the low crime rate, first-class
healthcare system and low tax rates.
Akber Naqvi believes lifestyle, quality of services, modern infrastructure, ease of doing business, safe and secure
place to raise a family are mainly attracting to the UAE.
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However, cost-of-living needs to be managed as that could become a key deterrent, he added.
Anita Yadav of Emirates NBD Research said UAE - especially Dubai - is attractive to high net worth individuals due
to tax-free income, globally central location, low crime rate, good school education, high quality medical services
and good potential for investments.
Compared to other GCC jurisdictions, she said Dubai's laws and regulations are more international investor-
friendly and the level of transparency is relatively high and implementation of law in the UAE is seen to be fair and
reliable.
Source: Khaleej Times
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UAE RANKED 13TH MOST PROMISING
ECONOMY FOR INVESTMENT Thursday, January 25, 2018
The UAE has been named the 13th Most Promising Home Economy for Investment in 2017-19 according to a
survey conducted by the United Nations Council for Trade and Development (UNCTAD) and Investment
Promotion Agency (IPA) Observer.
The ranking, published in the UNCTAD's recently released annual World Investment Report (WIR) 2017, reflects
the UAE's liberal and investment-friendly business policies as the country also moves up in the World Bank's
Doing Business ranking for 2018 to 21.
Meanwhile, the UAE International Investors' Council (UAEIIC), a semi-government investment institution with an
objective to promote two-way investment, has announced its partnership - as Official Investment Partner - with
the Annual Investment Meeting (AIM) to be held at the Dubai World Trade Centre from April 9-11, 2018, that is
expected to boost the $1.85 trillion global FDI flow expected in 2018.
The decision comes as the UAE prepares to liberalise its foreign investment laws allowing greater foreign
ownership in local companies in key sectors - that will help a greater inflow of investment in to the UAE - a major
foreign investment destination.
AIM, the largest annual gathering of government ministers, trade bodies, chambers of commerce and industries,
investment authorities as well as private investor groups, will see a flurry of activities including investment policy
reforms, ease in doing business to allow greater flow of capital and goods movement across the region.
Welcoming the UAEIIC as the Official Investment Partner of Annual Investment Meeting, Dawood Shezawi,
President of AIM, said: "Our partnership with UAEIIC will help boost two-way investment into the UAE and
outward investment from the UAE - and help us play our role as a promoter of investment flow for development.
Over the last few years,AIM has created a global platform for international and local investors to promote
opportunities for investors to identify the right investment projects and help create employment in different parts
of the world. As the Official Investment Partner, the UAEIIC will play a great role in promoting investment."
According to the World Investment Report 2017, global investment flow declined 2 per cent to US$1.75 trillion in
2016. "Flows to developing economies reached $646 billion in 2016, UNCTAD report shows. The flow of outward
investment from developing economies registered a 1 per cent decline to $383 billion, despite a surge of outflows
from China, now the second largest investing country in the world," said the World Investment Report 2017.
"A modest recovery in global FDI flows is forecast for 2017, although flows are expected to remain well below
their peak of 2007. A combined upturn of economic growth in major regions and improved corporate profits will
boost business confidence, and consequently MNEs' appetite to invest," said the World Investment Report 2017.
"A cyclical uptick in manufacturing and trade is expected to result in faster growth in developed countries, while a
likely strengthening of commodity prices should underpin a recovery in developing economies in 2017. As a
result, global FDI flows are expected to increase by about 5 per cent in 2017 to almost $1.8 trillion."
In this regard, the UAEIIC has decided to strengthen its engagement in trade and investment promotional
activities to boost two-way investment. The UAEIIC takes firm steps to be the voice of the UAE to invest abroad, as
it represents a national umbrella of great importance for the development of national investments issued in view
of its role in communication and coordination with government agencies to support, protect, promote and
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expand the interests and objectives of UAE investors abroad and in the interest of the national economy,
according to Jamal Al Jarwan, Secretary-General of the UAEIIC.
"The current global economic situation offers a greater opportunity for international investors when asset prices
become very attractive making acquisition less costly and help investors attain a higher and faster return on
investment," Jamal Al Jarwan said.
"In this regard, we find AIM a perfect fit to attract investment and promote economic opportunities prevalent in
the GCC region for global investors, while at the same time, helping UAE investors to find the right investment
projects in different countries and help the emirati investors to benefit from the opportunities.
"AIM is a real opportunity to highlight the role of the council with foreign officials and non-members investors to
discuss the experience of the council in previous years. The UAEIIC pays special attention to building and
expanding the network of international strategic partnerships.
"Our participation in AIM is in line with the goals of the UAEIIC in exploring investment opportunities around the
world and closely monitor the investment climate to achieve sustainable development for our foreign
investments," he says.
The eighth edition of the Annual Investment Meeting will be held on 9 - 11 April 2018 at the Dubai World Trade
Centre, under the theme, 'Linking Developed and Emerging Markets through FDI: Partnerships for Inclusive
Growth & Sustainable Development'.
In a span of three days, an array of activities are staged including a Conference, Exhibition, Capacity Building
Workshops, Country Presentations, Investors' Hub, Gala Dinner, Investment Awards, various G2G, G2B and B2B
Networking Features, AIM Startup Innovation Showcase and Pitch Competition.
Source: Khaleej Times
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UAE HOTEL OCCUPANCY SURGES AS RATES
DROP IN 2017: STR Wednesday, January 24, 2018
Average hotel rates in the UAE dropped while occupancy increase marginally in 2017 as both Dubai and Abu
Dhabi continue to add tourist attractions, according to STR study released on Wednesday.
"Supply growth continues to affect hotel performance in the country, especially with Dubai's build-up to the 2020
World Expo and beyond. Not only will the amount of new hotel supply continue to influence Dubai's average daily
rates (ADRs), the type of new hotel supply entering the market will create a shift in the pricing landscape, with
more offerings in the Midscale segment," it said in a statement.
The UAE market has been historically dominated by the upper-tier hotel classes. Additional offerings in the
middle-pricing tiers, however, has helped the market's demand continue to rise, as a wider price range has made
Dubai more accessible at various travel budgets, it added.
According to STR, occupancy level in UAE hotels increased 0.5 per cent to 75.1 per cent while ADR fell 3.8 per cent
to Dh599.58. Revenues per available room (RevPar) dropped 3.3 per cent to Dh450 last year.
"Dubai continues to add new tourism attractions to stimulate demand growth, helping the market drive hotel
demand as inventory expands. Abu Dhabi is following a similar trend, but at a smaller scale due to a smaller
market size.
"An expected increase in oil prices, combined with sustained growth in the non-oil sector, should drive economic
expansion in Abu Dhabi in 2018, allowing the economy to rebound from relatively flat performance during the
previous 12 months. That should be an encouraging signal that the hospitality industry will turn the corner," STR
said.
In the Middle East, all the indices recorded decline in 2017.
Occupancy fell 1.1 per cent to 65 per cent while ADR dropped 4.5 per cent to $164.33. Similarly, RevPar decline 5.6
per cent to $106.89.
Source: Khaleej Times
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MIDEAST INVESTORS HAVE REASONS TO
RETAIN TRUST IN CITY Thursday, January 25, 2018
With office investment in 2017 in the City of London hitting £12.2 billion — doubling the 10-year annual average
(£6.259 billion) and just behind the all-time record volume recorded in 2014 (£12.6 billion) — the market
continues to prove itself as a leading destination for global capital.
Volumes were buoyed by investors from over 26 countries transacting in 2017 as non-domestic investors became
more active than ever. Some of these overseas parties were drawn to the weakness in the sterling that has
existed since the EU referendum, while others were attracted by the comparative risk compared to their own
markets. And, also, by comparative returns as prime yields on London offices are higher than those in much of
Europe and the Asia-Pacific.
Such is the demand for London real estate from global capital that we saw two record-breaking deals in the City
during 2017, with CC Land Holdings ltd. acquiring The Leadenhall Building for £1.25 billon, closely followed by LKK
Health Products Group paying a sum of £1.28 billion for 20 Fenchurch Street — the UK’s biggest ever deal for a
single office building.
The result of these two deals saw Asian investors as a whole taking the lion’s share of all transactional activity in
London with a 53 per cent market share, followed by European (15 per cent) and US (10 per cent). There was also
notable activity by investors originating from the Middle East, who represented over 8 per cent of the market with
deals including that by the Al Gurg Group acquiring 240 Blackfriars Road on London’s South Bank for £266 million;
Alduwaliya Asset Management paying £150 million for Riverside House; and a private Middle Eastern investor
paying £285 million for Lacon House.
Adding to this demand from overseas investors, in 2017 we have seen the return of UK buyers to the London
market who, having paused for breath amid the uncertainty created around the referendum. They took a 12 per
cent market share overall and signalled their long-term confidence in the ongoing safe haven London provides for
capital.
There has been a lot of speculation following the announcement by the UK government in the Autumn Budget
that a capital-gains tax on foreign buyers of commercial property will be introduced. Yet, while this creates an
added layer of legislation that could be seen as a deterrent for overseas buyers, it is worth noting the government
does not plan to introduce the tax until 2019 after a consultation period.
And it is anticipated that some investors may be exempted from the changes. Meanwhile, the yield differential
between London offices and other global capital cities remains and we expect overseas investors, many of whom
are looking to diversify capital and preserve wealth outside of their domestic markets, will continue to target the
relative stability of the UK.
With regards to Middle Eastern investors in particular and activity in the City of London — and the wider central
London market — we are likely to see a continued focus on income-producing quality assets prominently
positioned in established office locations. Yet while the focus in London is on wealth preservation and long-term
capital value appreciation, unlike some overseas investor groups, Middle Eastern buyers are already active in UK
regional cities. And, comparatively, outside of London, their focus on long-term income at relatively high yields ...
levels which are unobtainable in London.
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However, as a final thought, it’s worth noting that London remains the most liquid real estate market in the world.
Not only is it attractive to investors because of its resilient occupational markets (including a third of the city’s
developments already being pre-let), it also offers a discount for some overseas parties, particularly those which
dollar denominated, due to the fall in sterling.
The UK is perceived as the most welcoming market in Europe to overseas investors and the landlord-friendly
leasing structures and market transparency make for an attractive marketplace that will continue to draw
overseas interest. Even if investors are prepared to pay more to buy in France or Germany, language barriers can
present problems, and for this reason we expect the strong levels of overseas capital targeting London to
continue into 2018.
Source: Gulf News
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FOR FACILITIES MANAGERS, KEEPING IT
SIMPLE GETS THE JOB DONE Wednesday, January 24, 2018
Facilities management (FM), as a concept, continues to be relatively new and evolving in the region. For the
relationship to be rewarding for FM customers, as well as eventual FM end users, knowing customer needs and
pain points is as essential as educating them.
Globally, customer satisfaction principles are being turned on their head, as companies adopt an outside-in
approach to product and service development and delivery, i.e. creating what customers want versus the
historical method of pushing what has been created. And the FM industry is no different. A proactive, rather than
reactive, approach is being recommended as a best practice going forward. But what does this mean in reality?
Knowing your customers, what they need, what makes them happy and what is good for them can drive greater
customer satisfaction. “Knowing your customers provides critical client knowledge, ensuring that we can meet
their needs,” says Alex Davies, managing director of Emrill. “You need to understand as explicitly as possible their
key drivers at that given moment. For instance, are they focused on cost, quality or experience? How can we assist
them in meeting these requirements immediately and into the future?”
Ahmad Al Matrooshi, managing director of Emaar Properties, agrees that understanding customer aspirations is
the key to FM best practices. “It is important that, to offer the most relevant service, the FM companies must
understand what customers want,” says Al Matrooshi.
Educating customers is central to buy-in
A key issue most FMs face when implementing changes and upgrades in communities is resistance from end
users and owners. Involving and engaging customers and end users in the FM discussion is, therefore, becoming
critical to high-quality and seamless FM operations.
“As FM companies adopt innovative approaches, communicating our strategic shifts is key to secure the buy-in of
the customers and ensure seamless provision of services,” says Al Matrooshi. “It is important that we
communicate what we do and why we do it to our customers.”
However, educating people can be a sensitive matter, as communicating the technicalities of the trade can
complicate matters, according to Davies. He suggests talking about value and focusing on simplified content. “For
end users, we need to educate them on matters such as safe practices and the importance of maintenance to
prevent future asset failures,” he says. “For business clients we need to advise them on legislation changes, future
capital investment requirements and industry development and innovation.”
People are central
The customary view of FM has oft ignored the soft skills necessary for dealing with the people side of the
business. Whether an owner or tenant, interaction with FM staff on-site is what usually drives the perception of a
company, and sometimes even the industry in general.
“Ultimately, FM is not about state-of-the-art technology; it is about people and how we connect to the needs of
residents,” explains Al Matrooshi. “While we are committed to meeting the demands of our customers, the first
point of contact — the human interface — can make a significant difference. Genuine appreciation of the
customer’s problem and a genuine effort to address it helps gain and build trust.”
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Alex adds, “In any service-led business you represent people, and this is even more so in facilities management.
The key is staff training and education and understanding that facilities managers are there to create experiences
that make great places to live, work or visit. Often when visiting a facility, be it a mall, residential building or
airport, we interact mostly with FM staff, such as the security guard, cleaner or concierge, so these people really
are the face of our customers’ brand.”
Transparency
Experts agree that transparency can be a great tool to build lasting trust and enable customer satisfaction. But
Davies says that keeping things simple for the ease of understanding is equally important. “Transparency is key,
but so is simplicity,” he says. “Energy usage is a classic example where technical professionals can over complicate
the situation. Calculating the expected energy usage requires measuring outside temperatures, external humidity,
building occupation and user behaviour as all these drive the result. So if you share this level of transparency with
end users, they can sometimes become lost in the data. If you don’t share this information, then you don’t gain
trust. By using the simplification process, it ensures that all stakeholders in a value chain can understand the
factors involved and this is critical to gaining trust.”
This brings us to another critical area in the transparency arena. With sustainability and energy-saving initiatives
taking hold everywhere, FM companies often adjust common area temperatures in buildings to improve energy
management, reduce energy costs and most importantly reduce consumption and CO2 emissions. However,
customers might assume it’s a lapse on the part of the FM company or building owner, or worse suspect the
temperatures are reduced so that companies add more cash into their till. Davies believes that in such situations,
education with a combination of transparency can help.
“Educating customers on such matters as energy management schemes and behavioural requests for building
safety is an ongoing mission,” he says. “One of the key challenges we face is that by adjusting temperatures for
example we impact on the way someone feels, as they may feel too hot or too cold at certain times, and this may
spark an emotionally driven response to the situation. In my opinion, as an industry we need to do more to
promote the FM industry and the work we do.”
Source: Gulf News
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THE VALUE OF LUXURY REAL ESTATE Wednesday, January 24, 2018
The luxury segment accounts for an almost negligible percentage of all properties in Dubai, but its value certainly
has a crucial impact on the real estate market. “The prime segment is quite modest, with most growth
concentrated in low and mid-market segments,” says David Godchaux, CEO of Core-Savills, tells PW. “We’ve
categorised the segment as anything above Dh3,000 per square foot, which effectively excludes 97 per cent of the
market. Only 3 per cent of transactions that are above this amount.”
Some of the big-ticket sales last year were an Emirates Hills residence that went for Dh101 million and a
penthouse in Omniyat’s One Palm for Dh102 million. The highest single transaction in the third quarter last year
was another villa in Emirates Hills that was sold for more than Dh95 million or Dh4,170 per square foot.
Godchaux says a few hotel apartments such The One Dubai Marina by Wyndham were sold at prices over
Dh5,500 per square foot.
New properties on the card include CityWalk, Bluewaters Island, Bulgari, Dubai Creek Harbour and Dubai Hills
Estate. Branded residences such as Armani and Palazzo Versace are also commanding high prices. While high-end
properties share a steep price point, they tend to have varying selling points.
In Hillside, a sub-community in Jumeirah Golf Estates by Chi-Sol investments, exclusivity is key. With a target
delivery end of the year, Hillside will be an exclusive neighbourhood of only 20 villas, each with a starting price of
Dh24 million. At this level of the market, according to the developer, the residences must have a specific set of
luxury elements.
Jumeirah Golf Estate’s signature luxury villas at Redwood Avenue, meanwhile, is banking on its strategic location
as one of its key differentiators. Located close to the World Expo 2020 site, the villas start at Dh11 million each.
“[As] Dubai continues to transform, Jumeirah Golf Estates’ strategic location in the heart of new Dubai means that
it is at the centre of Dubai’s transformation,” Alya Mahdy, executive director, commercial, Jumeirah Golf Estates,
tells PW.
Here are some of the factors that have helped drive demand for Dubai’s luxury property segment.
1. Location. With location as a prime differentiator, land becomes crucial. And properties commanding views of
landmark projects have a ready stream of buyers. For the Hillside development, land was one of the crucial
factors in the property being considered attractive. “We are actively looking to acquire land, but good land is very
hard to find in Dubai,” Hillside said in a statement.
There was time when the centre of Dubai would keep shifting — first in Deira, then Bur Dubai, right up to the
other end in Dubai Marina, before moving to Downtown Dubai. Godchaux says, “There is no centrally located
land. Earlier, [prime] was a piece of land somewhere after Downtown and before Marina. Emirates Hills and Palm
Jumeirah when they were built, you had to be a visionary to see their appeal. Now these locations are
unavoidable.”
Godchaux predicts the area between Burj Al Arab and Satwa to become the most prime piece of land not
developed in freehold terms. “There is demand for low-rise, very prime, very sought-after properties. It’s the best
part of the city.”
2. Not just sprawling villas. The new luxury buyer in Dubai is not looking only for villas. Analysts point to a change
in taste. “There is really a shift,” says Godchaux. “We have seen a larger number of luxury apartments built rather
than only high-end villas catering to the luxury buyer. It is luxury but not necessarily a villa. Buyers are looking for
a penthouse, or apartments with private access, high ceilings.”
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Examples include Emaar Il Primo, Volante in Business Bay and One Palm. Volante consists only of two apartment
types: 5,000-sq-ft half-floor units and 10,000-sq-ft whole-floor units.
3. Global competition. Mahdy says, “The Dubai property market has matured, attracting investors from East and
West thanks to its strategic position, attractive quality of life and access to key facilities.”
However, Godchaux warns that Dubai now competes with other global cities. “Potential buyers may look at
Singapore Monaco or London as options. Developers really have to keep that in mind,” Godchaux says.
The buyer profile has accordingly changed. “The profile of buyers is not the same. The ultra segment was made
up of people who were convinced that they wanted to have strong interest in Dubai. Now buyers compare [Dubai]
with other global cities they are invested in,” says Godchaux. “The customer has experience has to be the same as
in Singapore, Monaco and Tokyo.”
The luxury shopper demographic has also evolved in response to geopolitical events and macroeconomic factors.
“We see Russia coming back, while the GCC has always been strong,” says Godchaux. “Indian buyers are strong. It
is expanding a little bit to Europe as Dubai’s profile is rising.”
4. Is it worth it? Gone are the days when the market lapped up anything in the name of luxury. “The market for
luxury residential property, especially villas, changed fundamentally in late 2008 and 2009. Prior to that,
numerous luxury projects were associated with sporting personalities or celebrities based on a perceived lifestyle
experience,” says Mahdy. “The luxury market was characterised by a high volume of both off-plan sales and rapid
price escalation, fuelled by speculation due to a limited supply of completed luxury products. Investors were not
value-conscious and were not evaluating purchases on purely financial or functional terms. Buyers were willing to
pay a premium for the intangible lifestyle associated with those projects.
“However, the market no longer attaches a premium value to such aspirational factors, and is more focussed on
value for money and the level of financial return available from investing in the real estate sector.”
This means that even at the top end of the market, the property has to provide value for money, which Godchaux
says is reflective of a global trend.
5. Turnkey residences. There is now a considerable market for ready-to-move-in living spaces. “The shell-and-core
option means that villas come at an advanced stage of construction, but give customers the flexibility to bring
their own creativity into the final touches, including flooring, tiles and windows, and we have seen many different
styles,” says Mahdy.
Godchaux adds, “We see a rising section of buyers with lock-up and leave mentality. They don’t want to bother
about furnishing and prefer turnkey solutions with a high-end lifestyle. Branded residences are gaining
momentum.”
Source: Gulf News
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THE OFF-PLAN IMPACT ON DUBAI REAL
ESTATE Wednesday, January 24, 2018
New supply, attractive payment plans and the recent price correction have opened better deals for homebuyers
in Dubai’s property market. Analysts say a big chunk of house-hunters are end users and are thus very keen on
pricing. This also means that most are finance buyers. Off-plan schemes are accordingly the most preferred
product, given their competitive price.
Although this is normal in a property market cycle, the rise in demand from budget buyers has also changed the
face of not a few master-plan developments. “We are witnessing a lot of supply coming into the market, and it has
made the market flip from a seller’s market to a buyer’s market,” says Francis Otieno Sr., global property
consultant at Gulf Sotheby’s International Realty. “Developers like Azizi have changed the scope of Meydan, which
was formerly an exclusive high-end part of Dubai and brought in affordable and mid-class apartments. Areas like
Jumeirah Village Circle have also seen an upsurge of developments, which are affordable and are pushing buyers
from the stronger places like Dubai Marina, where the prices have held their ground and are dropping slowly as
opposed to other areas.”
Off-plan sales
Around 73 per cent of all residential sales transactions in the third quarter last year were off-plan, according to a
ValuStrat report. The key locations were Downtown Dubai with 88 per cent of sales being off-plan, Business Bay
(83 per cent), Dubai Silicon Oasis (82 per cent) and Jumeirah Village (78 per cent). “Buyers have been attracted
away from older, second-hand properties with modern specification, lower price points, attractive payment plans
and hoped-for appreciation during the pre-handover build period,” explains Declan King, managing director and
group head real estate, ValuStrat. “This trend is now evident in transaction statistics and is impacting some parts
of the secondary market.”
The value of off-plan transactions went up by 118 per cent to Dh4.04 billion with Downtown owning half the value,
according to a Chestertons Mena report, which also noted a 86 per cent increase in the total number of off-plan
transactions in the third quarter from the previous quarter. Dubai South was the most transacted area with 1,151
transactions, followed by Downtown Dubai with 821 and Business Bay with 686. It also pointed out that the
increased interest in off-plan has resulted in a continued negative impact on completed units, which saw a
decrease of 11 per cent in transaction volumes and 19 per cent in value.
Moving forward a slight pickup in the number of completed unit transactions is expected, according to Ivana
Gazivoda Vucinic, head of advisory and research at Chestertons Mena. “This will, however, have a negative impact
on off-plan sales transactions, which we expect to decline and then stabilise.”
Meanwhile, 29 off-plan projects were launched in the third quarter, adding more than 21,000 units to the
residential pipeline. Some of the notable projects were Azizi Riviera in Meydan, Park Lane Residence in Dubai
South, wasl’s Park Gate Residences in Zabeel and Dubai Properties’ Marasi Riverside in Business Bay.
Investors
Investors are now also buying off-plan as a significant number of projects have been launched and continue to be
launched with attractive selling points and payment plans, according to Sandrine Loureiro, operations manager of
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Rocky Real Estate. “There are still many sales happening in the current market, but most of them are smaller-
ticket items, such as studios and one-bedders, and off-plan sales have taken a majority share of the market.”
Loureiro says sales of completed properties are more common in very specific areas. “Ready properties are
selling too in freehold locations, which are easy to rent and in well-established communities.”
She advises sellers to be realistic with their asking prices, while telling investors to pay careful attention on income
potential. For rental property, for example, Loureiro believes the investor should look for units that can
potentially earn a minimum of 6 per cent.
Gemma Walsh, manager of residential sales and leasing at Better Homes, was more on point, telling sellers that
they should expect prices below the market value. “Currently, properties that are in high demand are those with
the views and the best return on investment in the most desirable areas, [but] everything is below the market
price,” says Walsh. “On the bright side, although the market is saturated, buyers are still buying, which indicates it
is a good time to buy.”
However, job losses have affected the rental market, which is a concern for rental residential property investors.
“The properties that sell best are mostly on par with the market’s demand,” says Walsh. “During this time, sellers
are also becoming more eager to vend their properties. These trends are converting many tenants to property
owners and first-time buyers. Also at the moment, off-plan’s return on investment is better than the ready villas
since attractive payment plans are available.”
In such a market condition, Walsh says sellers should act quickly, i.e. if a seller receives an offer from serious
buyers just within or a little bit below the market price, then go for it. However, for sellers unable to find the right
deals, it might be better to rethink their strategy.
“If a seller feels that the current market rate is too low, I would advise to rent it out for a few years,” says Otieno.
“Bring it back in the market when things are a bit better, or even if the rate stays there, the owner will have gained
on the rental income, which will make an overall difference.”
Source: Gulf News
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A HOME AND AN INVESTMENT Wednesday, January 24, 2018
The decision to invest in Dubai’s property market was a logical next step for the Moosa family — Rachel, Joe and
six-year-old twins Catherine and Michael — and the long-term residents chose to settle in The Villa development
in Dubailand.
“We were looking to invest in a property in Dubai as we found it difficult to move every year due to rental rates
increasing and wanted to invest the money in our own home, rather than paying off the mortgage of another
homeowner,” says Rachel.
“We were originally looking at some of the older developments such as Arabian Ranches, The Lakes and The
Meadows, but a real estate agent suggested we consider The Villa, where the cost per square foot was much
better compared to other developments,” she adds.
Other criteria included road accessibility for schools and work, quality of the development and resale value.
The family liked the feel of the community with its large Spanish-style detached houses and sizeable plots, but
also considered the future return on investment, noting that this part of Dubai could be “a hub for major
development in the coming years”.
A total of 1,811 four-, five- and six-bedroom homes make up Dubai Properties’ The Villa community and the
Moosas’ five-bedroom home is at the heart of the Centro district.
Says Rachel: “This is actually our second purchase. Our first home was bought in the secondary market but the
owner had never lived in it, so we were able to upgrade the property and invest in landscaping. We lived there for
two years but I had my eye on a larger property opposite us, which has also never been lived in and we fell in love
with it. I haven’t seen a home in Dubai with the same floor-plan configuration, which has great space both inside
and out. And the size of the plot encompasses a pool plus enough play area for the children.”
The Moosas shortlisted banks before choosing one that met their mortgage needs, as Rachel explains: “We saved
hard to have a down payment for the first purchase, and researched all the other fees well. We spent around five
weeks looking for the right home the first time, and once we signed the MOU, the process moved quickly and we
moved in about six weeks later.”
Her advice to prospective real estate investors is to get the “full cost picture” before committing on a property and
ensuring that it works within one’s budget.
A Valencia villa, the Moosas’ property has an open tiled central courtyard as its focal point, with the living and
dining spaces leading to it, but seamlessly connected internally as well. The house has been transformed in the
three years the family has lived there, adding a lap pool and a stunning kitchen renovation that opened up the
area to create a huge but welcoming, light and airy space.
“The pool was by far our biggest investment and we also had an outdoor kitchen installed, as well as a majlis for
entertaining, with its fire pit,” elaborates Rachel, who as senior vice-president of human resources at Accor Hotels
Middle East and Africa, has a hotelier’s eye for detail. “Inside, we completely renovated the kitchen, installing a
large central island with built-in refrigerator and storage. The kitchen opens to the dining room and interior
courtyard, making it fabulous for year-round entertaining,” she continues.
The community is still developing its facilities and Rachel is looking forward to the opening of a second Spinneys
supermarket closer to home, with further retail and restaurant options also under development.
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“There is also a Gems school, tennis academy and the St Regis Hotel and Polo Club, located just behind The Villa
and there are numerous other facilities planned for the area. We are also only 20 minutes away from the Dubai
Mall,” she remarks. “We have direct access to E311 [Shaikh Mohammad Bin Zayed Road] and E611 [Emirates
Road], which is great, but the best thing about the community is that it is quiet and safe.”
Source: Gulf News
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JLL NAMES THIERRY DELVAUX NEW
REGIONAL CEO Tuesday, January 23, 2018
JLL has appointed Thierry Delvaux as chief executive of its Middle East and Africa (MEA) business, effective March
4, 2018, the real estate firm said on Tuesday.
Delvaux will succeed Alan Robertson, who is retiring after 30 years at JLL.
In this new role, Delvaux will have overall leadership responsibility for JLL’s strategic direction, brand positioning
and continued business growth across the Middle East and continental Africa, the statement said.
Delvaux has been at JLL for 20 years, holding a number of leadership roles.
Source: Gulf News
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UAE GOVERNMENT RANKED SECOND IN
TRUST GLOBALLY: STUDY Tuesday, January 23, 2018
The UAE has ranked among the highest among world governments in the Edelman Trust Barometer 2018 report
released ahead of the World Economic Forum.
The latest report placed the UAE as the second most trusted government in the world, according to Edelman.
Revealed on Tuesday, the study noted that the UAE was one of “six countries with extreme trust gains” over the
past year.
After seven years — our government is still among the top. The trust has been earned over the years through
working and giving. This trust is our greatest asset and most important achievement.” - Shaikh Mohammad Bin
Rashid
His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler
of Dubai, hailed the milestone on his twitter account on Tuesday.
“UAE ranked second — globally — for most trusted government, according to an Edelman Foundation survey.
After seven years — our government is still among the top. The trust has been earned over the years through
working and giving. This trust is our greatest asset and most important achievement,” he tweeted.
Shaikh Mohammad said the UAE is the second most trusted country in the world based on the trust the public
have in their government.
“For seven years, our government is at the top of the rankings. Trust gained through years of work, construction
and giving. Confidence is our greatest asset and our greatest achievement,” he said.
The annual survey was conducted online across 28 countries with over 33,000 respondents, which was carried out
from October 28 to November 20, 2017.
Respondents had to meet four criteria such as being aged 25-64, college educated, having earnings in the top 25
per cent of household income per age group in each country and to report significant media consumption and
engagement in business news.
According to the international report, the Trust Index in the US government “was the steepest ever measured” as
it dropped by nine points from 2017, while China and the UAE both gained points by seven and six points,
respectively.
The UAE government ranked second at 77 points in the trust indicator for government and public institutions,
while China was ranked first at 84 points.
The trust index is the average of a country’s trust in the institutions of government, business, media and NGOs.
The UAE topped a number of Western countries in the trust index, such as Germany and the UK, which were given
43 and 36 points, respectively.
The trust index in companies and businesses increased in 14 out of 28 countries, with the UAE ranked at fourth
place. Indonesia was first globally with the most trust in businesses, followed by Indonesia, India and China at
second place, and Mexico at third.
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Last year, the UAE also ranked second globally in government trust according to the Edelman Trust Barometer
released in 2017.
Top five most trusted governments in 2018
1. China
2. UAE
3. Indonesia
4. India
5. Singapore
Source: Gulf News
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UAE'S AZIZI SAYS PALM PROJECT TO BE
DELIVERED AHEAD OF SCHEDULE Wednesday, January 24, 2018
UAE-based Azizi Developments said on Wednesday it is on course to complete its project Mina by Azizi on Dubai's
Palm Jumeirah in the third quarter of 2018, ahead of schedule.
Mina by Azizi features panoramic views of the sea and provides private beach access to 178 fully-furnished
serviced apartments and penthouses.
The AED780 million project will cover a total area of 11,244 square metres which includes 120 one-bedroom, 54
two-bedroom, 4-three bedroom, and 4 penthouse residences.
In addition, it will include a total retail area spanning 1,532 sq m, Azizi said in a statement.
Farhad Azizi, CEO, said: “It’s very pleasing to announce the increased pace of progress of our second and most
ambitious project on the Palm, Mina by Azizi. Constructing quality homes and delivering to our customers on time
is at the core of Azizi Developments’ business.
"In the case of Mina by Azizi, we are aiming to deliver ahead of schedule.”
Mina by Azizi is set to be completed almost a year to the date after its first luxury residential project on the Palm
Jumeirah, the AED350million Royal Bay, completed in August last year.
Source: Gulf News
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REVEALED: THE ONLY PROPERTY SECTOR
SHOWING GROWTH IN THE UAE Monday, January 22, 2018
Villas in Sharjah have continued to buck the wider trend of retreating rents in the emirate’s residential rental
market, according to a new report by consultancy Cluttons.
Villas recorded an increase of 1.7 percent, taking the overall residential rate of growth to 0.4 percent during the
last quarter of 2017, the report said.
Cluttons’ Sharjah Property Market Snapshot for Spring 2018, showed that over the last two years, Sharjah’s villa
market has grown in both profile and popularity as the real estate market repositions itself with new and
affordable options.
This trend is helping retain the emirate’s appeal and attractiveness amongst those households that have been
priced out of Dubai, or are seeking a more family oriented lifestyle, the report noted.
Suzanne Eveleigh, Cluttons’ head of Sharjah, said: “Communities such as Al Zahia have been a runaway success
and with most major new shopping mall developments in Sharjah anchoring these new lifestyle destinations, the
future of community living in the emirate appears relatively buoyant, especially when compared to many other
property segments in the UAE.”
In contrast to the villa market, apartment rents in Sharjah registered a steep decline of 13.6 percent in rents.
Cluttons’ research shows that Abu Shagara topped the list of weakest performers, with rents retreating by an
average of 15.1 percent during 2017.
According to the report, Sharjah’s residential rental market is set to face pressures from rising stock, which is
helping to cement the tenant’s market that took hold three years ago.
“Many landlords are reluctant to adjust advertised rents downwards due to concerns about alienating existing
tenants. However, with tenants increasingly seeking out new and energy efficient buildings, reflecting household
financial pressures stemming from the 1 January introduction of VAT, rising utility bills as subsidies continue to be
phased out and rising inflation levels, we feel landlords will need to be flexible with rents and the payment plans,
particularly in older buildings, to sustain demand,” added Eveleigh.
Faisal Durrani, head of research at Cluttons said: “With sudden turnaround in economic growth, or residential
demand unlikely to increase during 2018, Cluttons expect rents will continue to moderate, with apartments likely
to see corrections of 5-7 percent next year, while villa rents are expected to experience growth of between 1-2
percent.
"This makes Sharjah’s villa market the only property segment in the UAE to see sustained positive growth.”
Source: Arabian Business
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DEVELOPER LAUNCHES WATERFRONT
APARTMENTS Tuesday, January 23, 2018
Damac Properties has announced the launch of a luxury development in Business Bay, Reva Residences, offering
one and two-bedroom apartments overlooking the Dubai Water Canal. One-bedroom apartments start from
Dh699,000.
"Business Bay has become the bustling centre of Dubai's business, leisure and entertainment district," said Niall
McLoughlin, senior vice-president at Damac Properties.
Damac is offering competitive payment plans for Reva Residences, with one per cent monthly payment plans and
up to 45 per cent balance on completion.
Source: Khaleej Times
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WHY DAMAC CHIEF IS OPTIMISTIC ABOUT
DUBAI Wednesday, January 24, 2018
Hussain Sajwani, founder and chairman of Damac Properties, expressed optimism and ruled out an oversupply
scenario in the Dubai property market. Speaking to CNBC at the World Economic Forum in Davos, he said the
Dubai realty market is "very healthy and stable".
"I don't see a danger of capacity because we have about half a million freehold units in Dubai. We're growing at
least three to four per cent. We need a minimum of 15,000 units every year. In the last three years, we've
produced less than 10,000 units. Going forward, I don't see more than 10,000 to 12,000 units. So, I see supply and
demand equilibrium," explained Sajwani.
Referring to a stable growth of six per cent achieved last year, the chairman said he doesn't foresee the Dubai real
estate industry experiencing a surprise such as the 2008 crash or extreme price swings like in 2013, when values
shot up by approximately 30 per cent.
On his recent announcement to sell a 15 per cent stake in Damac, Sajwani said: "The question was: 'Would I be
willing to sell some stake in the company?' For creating the liquidity, yes, I'm willing to sell. Is it 5 or 10 or 15 per
cent? This depends on the market, price and timing."
He also spoke of Damac Properties' brand affiliation with US President Donald Trump. Damac has signed a deal
with the Trump Organisation to operate two golf courses in Dubai. To a question if the brand could suffer as a
result of the ebb and flow in Trump's popularity, Sajwani said: "We signed a commercial deal with the Trump
Organisation to build two golf courses for us, and we opened the first golf course on February 20 last year. We're
very happy with the design, the quality and I think it's one of the best golf courses, not just in the Middle East but
around the world. Our second golf course is on the way. I don't see any impact, any effect on our business. We
are doing business as usual."
The senior executive was also upbeat in his outlook for the company. "Last year, our sales are going to be up by a
few percentage. It's going to be announced soon."
The Damac chief has, on earlier instances, highlighted investment opportunities in the UK owing to a softening
property market. He added: "We're looking to expand. Our cashflow is very strong and our balance sheet is not
fully leveraged. We're looking at Europe and North America. I think the UK, especially London, provides a major
opportunity, especially with the softening of the property market after Brexit, and the pound is more reasonably
priced, compared to the dollar two years ago."
Source: Khaleej Times
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SHEIKH MOHAMMED REVIEWS RAPID
PROGRESS OF DUBAI CREEK TOWER Wednesday, January 24, 2018
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler
of Dubai, reviewed the progress of Dubai's next tallest tower, Creek Tower, in the heart of the 6 sq km Dubai
Creek Harbour.
Sheikh Mohammed's visit coincides with Emaar setting a new milestone in the construction of Dubai Creek Tower
with the placement of concrete for the pile cap commencing in September last year, the core of the pile cap has
now reached its highest point.
Over 50 per cent of the pile cap has now been finished with completion scheduled for mid-2018.
Dubai Creek Tower's pile cap is an approximately 20 metre thick multi-layered, tiered reinforced concrete top that
covers and transfers the load to the foundation barrettes. To date, about 25,000 cubic meters of concrete has
been poured, weighing about 60,000 tonnes or half the weight of the CN Tower in Canada.
In October 2016, Sheikh Mohammed marked the ground-breaking of the tower, with the foundation work
accomplished in a record time. The tower's 145 barrette piles were tested to a world record load of 36,000 tonnes
and laid 72 metres deep to firmly secure the super-structure. In all, about 50,000 cubic metres of concrete will be
used to fully cap the foundation piles.
Over 450 skilled professionals from across the world are working on site highlighting the global collaboration that
marks the construction of the new iconic structure. Designed by Spanish/Swiss architect and engineer Santiago
Calatrava Valls, Dubai Creek Tower will feature several observation decks such as the Pinnacle Room and VIP
Observation Garden Decks.
Dubai Creek Tower will add incredible economic value to Dubai Creek Harbour, a mixed-use development located
near the Ras Al Khor Wildlife Sanctuary that is home to over 67 species of water birds and is protected by the
UNESCO Ramsar Convention.
The Ruler was accompanied by government and Emaar officials.
Source: Khaleej Times
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PRIVATE DEVELOPERS DOMINATE READY
HOUSING MARKET IN DUBAI Tuesday, January 23, 2018
As the Dubai housing market continues to grow, options for investors and end-users to choose from proliferate.
Currently, there are over 3,000 freehold projects in the ready space and over 700 in the off-plan market. This wide
selection can leave some home seekers and investors perplexed. A recent study by Unitas Consultancy highlights
the buying patterns in the Dubai real estate market. In the ready space, government-sponsored developments
has seen a systematic decline of market share in transactional activity as a surge of private sector projects come
have come online. In 2010, developments of Emaar and Nakheel accounted for nearly half of all activity, whereas
in 2017, it has reduced to 33 per cent.
A comparison between transactional activity of Emaar and Nakheel's ready projects reveals that the former has a
higher percentage in terms of value, whereas the latter is a dominant player in terms of volume. The core reason
for this is due to the composition of their developments. A large portion of Nakheel's portfolio has been in the
mid-income housing market with projects such as International City and Discovery Gardens whereas Emaar has
concentrated on the upper-end of the spectrum with Downtown and Dubai Marina.
In the off-plan space, there has been a reversal of roles, where government sponsored developers experienced
significant higher growth rates (40 per cent) over the last two years. Emaar is the market leader for residential
transactional activity and launches, accounting for 35 per cent of value and 22 per cent of volume in 2017. This
highlights the investor confidence in their product and completion rates compared to other developers in the
market. A dissection of ready supply by developers in monitored areas reveals that Nakheel and Emaar account
for 36 per cent of housing stock. This highlights the importance of government sponsored developers in the initial
rollout of freehold Dubai. However, an analysis of future supply reveals a shift towards other players entering the
market, driven by the private sector.
In the current cycle, Nakheel has played a minor role in terms of launching new residential supply. This time
around, they have concentrated in developing their retail outlets, diversifying from mega malls to community
malls. Given the land bank of Nakheel, we expect this paradigm to mean revert as they increase the scope of
freehold offerings in the coming years. On the other hand, Emaar has continued to launch new units, accounting
for 15 per cent of the off-plan market. The dominance of a few developers on building out the infrastructure of
new cities can be witnessed in Singapore as well. The Far East Organisation is one of the top developers in
Singapore and has rolled out 17 per cent of the entire private housing stock. This statistic highlights the role of
premier developers that develop over time as a function of market confidence and track record, a dynamic that
has yet to play out on such a scale for private sector developers in Dubai.
The data clearly indicates that there is a disparity between the ready and off-plan market in terms of market
dominance. Given the high levels of confidence, Emaar (and GREs in general) dominates the off-plan space,
whereas in the ready space, there appears to be private sector dominance. This implies that prices and incentives
will remain attractive in the private developer space, exerting further margin pressure. In the ready space, pricing
power continues to exist; it is the transition between off-plan and ready that is not being adequately captured
either by analysts or data.
Source: Khaleej Times
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FIRST PHASE OF DUBAI BUILDING
CLASSIFICATION COMPLETE Tuesday, January 23, 2018
The Dubai Land Department (DLD) recently announced the completion of the first phase of its building
classification project, which was launched earlier in 2015 as an initiative from the DLD to survey real estate
projects across Dubai.
Phase one focused specifically on (non-freehold) old areas in Dubai.
Sultan Butti bin Mejren, director-general of DLD, said: "This important project aims to enhance the transparency
in real estate transactions by ensuring accurate data is available to government and private real estate customers.
Our target was to complete the project by the end of 2017 which we have done."
After a survey of empty land plots, villas, commercial and residential buildings, factories and shopping centres, all
types of buildings in Dubai were incorporated into the project's database. This will facilitate rental procedures for
tenants, as well as provide a precise classification of each property in the surveyed areas.
The survey examined 100 per cent of land plots outside freehold areas, with the data collected focusing on the
current state of the plot, whether there was a building or just vacant land, as well as determining the number of
buildings, floors and units (apartments) and the nature of the property's use (residential or commercial).
Moreover, the specifications of the property were also listed according to 64 criteria, which includes the
availability of parking spaces, the age of the building, the existence of facilities and services such as lifts, as well as
the profile of its location such as sea view.
The survey revealed that 79,280 plots of land are now located in non-freehold areas, compared to 69,982 plots
located in freehold areas, bringing the total up to 149,262 plots.
The project will ensure that developers are able to classify their projects according to DLD classifications. With the
data, real estate brokers can now list properties based on DLD classification, while allowing companies to classify
any property before leasing it.
There is a possibility of modifying the rental increase calculator to reflect the classification of buildings.
Source: Khaleej Times
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DEVELOPER LETS LOCATION, PRICING DO
THE TALKING Monday, January 22, 2018
At a time when developers are vying with each other to offer unique incentives to attract buyers, one company is
counting on location, competitive pricing and build quality to stand out from competition. L-I-V Real Estate
Development has launched sales on its flagship project in Dubai Marina and is confident of attracting both
investors and owner-occupiers with a competitive payment plan and pricing.
L-I-V Developers says the LIV Residence Dubai Marina is coming up on the last prime plot in the precinct,
purchased in 2015. The waterfront property comprises 179 units, an even mix of studios, 1-beds, 2-beds and 3-
beds.
The average price per sq ft at the project is Dh1,500, with studios priced at Dh749,000 and one-beds at Dh1.19
million. There will be three duplex penthouses that will be tailor-made to clients' tastes.
"The price will be released on request. The penthouse collection has not been released to the market as yet. We
are the only developer in Dubai Marina to offer a two-bedroom apartment with a maid's room," says Latif Habib,
CEO of L-I-V Developers.
"Our location is prime and the quality of the product speaks loud," the CEO adds.
What the developer does offer is a competitive payment plan - 40 per cent during construction (10 per cent each
stretched across 240 days) and 60 per cent upon handover.
The Dh400 million project will be ready by Q2 2019. Construction began in September 2016 and is at 20 per cent
today. "Moving forward, we will finish one floor every eight days. By the summer of 2018, we will have finished 17
floors," explains Habib.
L-I-V Developers has opened an experience centre in Marina Plaza to the public.
With buyers spoilt for choice of off-plan projects to choose from, the developer wanted to show concrete progress
on ground before commencing sales. "Our motivation was to bring construction to a healthy percentage before
launching sales. Since September 2016, we have been perfecting our concepts and designs and maximising views
from every apartment," the CEO observes.
There has been good interest in the apartments, both from end-users and investors. "Local demand has been
good, so we don't see the need to go overseas for marketing the project," Habib adds.
While 70 per cent of the apartments in the project offer marina views, residents will also have exclusive private
beach access. L-I-V Developers has delivered custom-built homes in Los Angeles and New York and has ongoing
projects in Istanbul. It has also developed custom-built villas in Emirates Hills. The group has land bank in Dubai
and is looking to acquire more plots.
"Our corporate culture is to only focus on key locations and established communities. Our brand will benefit from
it. It makes sense to have our flagship project in a location such as the Marina," Habib adds.
The developer has no leverage and is funding development with its own equity.
Source: Khaleej Times
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EMAAR PROJECT CLINCHES DH1 BILLION
WORTH OF SALES Sunday, January 21, 2018
Emaar Development has recorded total sales worth approximately Dh1 billion at the launch of the first residences
in Emaar Beachfront, following a good response from UAE-based and international investors.
Emaar Development's launch of Beach Vista, a twin-tower development, also recorded good response from
customers, with all 375 residences launched sold out.
Mohamed Alabbar, chairman of Emaar Properties, said: "With Emaar setting impressive property sales last year,
the response to our first launch this year is a positive statement on the robust performance of Dubai's property
sector. It also underlines the credentials of Emaar Development in designing and delivering world-class homes.
Residents of Emaar Beachfront will have exclusive private beach access.
Source: Khaleej Times
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UNION PROPERTIES SELLS EMICOOL STAKE
FOR DH500 MILLION Monday, January 22, 2018
Union Properties has announced the sale of its entire stake in Emicool, a district cooling services provider, to
Dubai Investments, which already owned 50 per cent of Emicool, for Dh500 million. Union Properties will invest
the proceeds from the transaction in enhancing its investment portfolio, expanding its operations and
development projects and supporting its growth strategy.
Union Properties had received several offers to sell its shares in Emicool from various local and international
companies, and subsequently notified Dubai Investments of its intention to sell its stake.
As per Emicool's Articles of Association, the partner had priority to buy any shares offered for sale. Accordingly,
Dubai Investments announced its intention to acquire Union Properties' stake, which amounts to 50 per cent of
Emicool. The final legal proceedings of the transaction were concluded on January 18, giving Dubai Investments
full ownership of Emicool.
Nasser Butti Omair bin Yousif, chairman of Union Properties, said: "The year 2018 marks the beginning of a new
phase in the development and growth of Union Properties. After finalising the development of the company's
long-term strategy in the second half of last year and following the successful launch of several new projects and
subsidiaries, the sale of our entire stake in Emicool is part of our new strategic investment approach. We will
invest the proceeds of this sale in enhancing our investment portfolio, expanding our operations and
development projects, and supporting the Group's growth strategy."
Established in 2003, Emirates District Cooling (Emicool) is a limited liability company. Emicool's core operations
include providing district cooling services for residential, commercial and industrial areas, as well as distributing,
transporting and selling cold water used in cooling equipment for individual and corporate clients.
Source: Khaleej Times
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EXPO 2020 AWARDS DHS670M CONTRACTS
TO LAING O'ROURKE Tuesday, January 23, 2018
Expo 2020 Dubai has awarded two major construction contracts worth a combined Dh670 million to international
building company, Laing O'Rourke.
Under the terms of the agreement, the UK-headquartered contractor will build Expo 2020's Leadership and Media
Pavilions, and the event's 'Hammerhead' access road to Al Wasl Plaza plus landscaping.
With a diameter of 150m, Al Wasl Plaza will form the centrepiece of Expo 2020's 4.38sqkm site in Dubai South. It
will include a massive steel trellis dome, the contract for which was awarded to Cimolai Rimond ME in November
2017.
Ahmed Al Khatib, Senior Vice President of Real Estate and Delivery at Expo 2020 Dubai, said, "We are on track to
deliver an exceptional site for an amazing Expo. We are delighted to announce Laing O'Rourke as the main
contractor for these important two contracts. The company was selected from among strong international
competitors due to its keen understanding of our technical and commercial requirements. It has a long and
prestigious history within the UAE construction sector.
"These projects will be constructed in close proximity to the UAE Pavilion and other pavilions. This area is already
a hive of construction activity, with all of these projects being built simultaneously. With this in mind, close
collaboration between construction companies on site will be vital to coordinate logistics and ensure that work
continues according to our schedule."
UAE-based real estate developer Meraas is managing design and procurement activities for Expo 2020's Al Wasl
Plaza, which was designed by Chicago-based Adrian Smith + Gordon Gill Architecture.
Expo 2020's Leadership and Media Pavilions will be transformed into hotels post-Expo, as part of the District 2020
legacy development project. They are both expected to achieve four-star ratings. The Leadership Pavilion will
accommodate UAE leadership during the Expo.
The Hammerhead, so called because of its distinctive shape, will house a ramped access road for Expo 2020's
truck tunnel - a subterranean road that will run underneath Al Wasl Plaza. It was designed by Pasadena-based
Parsons Corporation.
Construction related to Expo 2020 is expected to reach its peak towards the end of 2018 and early 2019. There
are already about 12,000 people working across all projects on the site; this figure is expected to grow to 35,000
by early 2019.
Speaking during a visit to the Expo 2020 site, Ray O'Rourke, Chief Executive at Laing O'Rourke, said, "The
continuation of work in Dubai South is a great opportunity to showcase the strength of our Middle East team on
Expo 2020. We are committed to local employment in the region, and innovation, through our approach to offsite
manufacturing, building on the knowledge and experience we have gained in the Emirates over the past decade.
"We are delighted that Laing O'Rourke has been chosen to build these prestigious projects, and look forward to
playing our part in the first World Expo in the Middle East, Africa, and South Asia, MEASA, region in 2020."
Laing O'Rourke is due to commence work on 28th January. All shell-and-core construction on site is scheduled to
be completed by October 2019 - a full year before Expo opens on 20 October, 2020.
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Ahmed Al Khatib said, "Today marks 1,000 days before Expo 2020 Dubai opens its doors to the public. However,
with all heavy construction activities due to be completed more than a year before the Expo's inauguration, it is
essential that work continues to progress smoothly."
Through its overall theme, 'Connecting Minds, Creating the Future', Expo 2020 Dubai will be a celebration of
ingenuity that provides a platform to encourage creativity, innovation and collaboration, underpinned by its three
subthemes: Opportunity, Mobility, and Sustainability.
In keeping with Expo 2020's subtheme of Sustainability, Laing O'Rourke and its fellow construction companies will
work together with Expo 2020 to ensure environmental, economic, worker welfare, and health and safety best
practice.
Expo 2020 Dubai will run for six months, from 20th October, 2020 to 10th April, 2021, and is expected to receive
25 million visits, with 70 per cent due to come from outside the UAE, the largest proportion in the history of World
Expos.
Source: Khaleej Times
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DUBAI’S PROPERTY MARKET TOYS WITH
CRYPTO POSSIBILITIES Wednesday, January 24, 2018
Would you settle your rents using a crypto currency? Or buy that freehold apartment in Dubai by shelling out a
few Bitcoins?
With the volatile ride Bitcoin’s having of late, much of it spent in shedding value, it will take quite a bit of courage
on the part of investors and property owners to seal the deal via a cryptocurrency. But that is not the same as
saying players in Dubai’s real estate market are not trying.
A developer or two have said their upcoming sales programmes will have a place for these alternative currencies.
But what has been gaining traction is landlords holding commercial properties saying that rents could be settled
this way; the owner of Star Business Centre is the latest to do so.
But will Bitcoins and various other cryptos ever emerge as an integral part of a real estate transaction in Dubai?
Or will it be more of a show on the sidelines?
Any laws that could provide some basis are as such still far from being a reality. “For now, there is no regulatory
activity that restrict its usage or regulates its oversight,” said Sameer Lakhani, Managing Director at Global Capital
Partners. “The UAE Central Bank has joined others — it was actually one of the earlier ones — in warning about
the speculative nature of Bitcoin. Since then, clearly there have been increasing calls to regulate the “commodity”,
it is increasingly likely that this will happen.”
So, when a developer or landlord says they can settle a transaction using a crypto, it does not mean they are
accepting it as a “legal tender”. Instead, they are accepting the equivalent in Bitcoins or any other form of
cryptocurrency.
“Given the fact that they are accepting the equivalent amount, the volatility falls on the buyer who is
contemplating the purchase in any other commodity rather than the legal tender,” said Lakhani.
But for now, that volatility has ratcheted up quite a bit. Chances are that Bitcoin could drop below $10,000
(Dh36,731). And to place that in context — just weeks ago it soared all the way to just under $20,000. (That was
the time when everyone wanted to have a piece of the action … or at least were still thinking about buy-ins.) Other
cryptos — look at what is happening on the ether counter — too are under duress on their pricing. Given this kind
of dizzy price falls, why would anyone want to use it to settle a property deal here? It was on January 17 that Star
Business Centre announced it would be open to taking cryptos for rental payments. (When the property owner
made the decision, a Bitcoin was commanding upwards of Dh51,200 on average. That lofty level has since come
down to Dh39,449.) So how would a landlord lower the risks if his rent gets paid using cryptos? “The answer to
volatile market is very simple — we take the cryptocurrency and straightaway convert them into a cash position,”
said Imran Farooq, CEO of Star Business Centre and Group CEO of Samana Group. “On the basis of transfer of
cryptocurrency, the same position is closed.
“The transfer may take few minutes … but as soon as the deal is confirmed the currency is converted to cash.
Therefore, we have zero risk. “We don’t believe that cryptocurrency holders are small in number. All modes of
settlements are accepted be it cash, transfer or foreign currency — so crypto is again another medium. “We often
get clients with foreign currencies and we are used to handle multiple currencies and their settlements. The client
does not need to inform us well in advance. At the time of settlement, the rate is locked and at the same time we
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close our crypto position into a dollar one.” The big push for cryptos in real estate will come when developers in
Dubai — even a handful of them — confirm their willingness to accept such payments on off-plan sales. Doing so
sure could boost their chances of pushing property to the digital crowd. That can only be a good thing.
The pros and cons of a crypto-based real estate transaction
For Star Business Centre, it allows them to add a new mode of payment that could find favour with some
overseas clients or even start-ups. “Start-ups will find it very convenient and faster rather than going through a
complicated process of bank transfer, as in some countries bank transfers are controlled due to foreign exchange
(regulations),” said Imran Farooq, CEO, who has “limited investment” in crypto currencies such as Ethereum,
Ripple and IOTA. “So they may like to make the payment through crypto currency.”
Buying or selling Bitcoins these days can be a dizzying experience — short of $20,000 one day and dropping to
below $11,000 on another. Sure, change could also happen with prices shooting up overnight. But such changes
make it an asset to watch out, but can it be used as a payment method? “Currently, there are no mechanisms that
exist on the exchanges that would be able to hedge risks,” said Sameer Lakhani of Global Capital Partners. “These
are being considered and it is likely some regulatory oversight and standardisation of contracts are achieved.”
Source: Gulf News
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DUBAI’S RENTAL INDEX COULD REFLECT
NEW CLASSIFICATION Tuesday, January 23, 2018
There could be changes in the rental index covering Dubai’s neighbourhoods, across all types of properties. This
follows the completion of the first phase of classification of buildings across the emirate.
The survey extended to plots outside of the freehold areas, with the data collected focusing on the current state
of the plot, whether there was a building or just vacant land, as well as determining the number of buildings,
floors and units.
This will facilitate the rental procedures for tenants, as well as provide a precise classification of each property in
the surveyed areas.
The nature of the property’s use — whether for residential or commercial, as well as the specifications of the
individual property were listed according to 64 criteria, which includes the availability of parking spaces, the age of
the building, the existence of facilities and services such as lifts, as well as the profile of its location such as sea
view.
The latest images were take to support the data collected.
“Our target was to complete the project by the end of 2017 which we have successfully done, and today we are
pleased to announce that all parties in the real estate sector are now able to benefit from the survey data,” said
Sultan Butti Bin Mejren, Director-General of Dubai Land Department.
The project was launched in early 2015. Phase One focused specifically on the older areas in Dubai. Based on the
findings, 79,280 plots are located in non-freehold areas, compared to 69,982 plots located in freehold areas.
The project will also ensure that developers are able to classify their projects according to DLD classifications.
Source: Gulf News
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DUBAI’S 2018 FREEHOLD ACTION STARTS
ON THE WATERFRONT Monday, January 22, 2018
It’s the waterfront for Dubai’s first off-plan launches of the year.
Emaar went for such a location with a twin-tower release its “Beachfront” development, and now L-I-V Developers
has launched sales at its first tower project, which are on the Dubai Marina waterfront.
And it seems that investors are willing to come on board. Emaar issued a statement that it generated sales
interest of Dh1 billion from selling out the 375 units on offer. And a top official at L-I-V confirmed that its pre-
launch sales at its Dh400 million project had generated a “significant amount of bookings” and that full details will
be announced shortly.
Both projects had tags at the upper end of the pricing spectrum, with Emaar’s reportedly at around Dh2,000 a
square foot, according to market observers. L-I-V’s was at Dh1,500 a square foot.
Clearly, Dubai’s developers and its property buyers are picking up on the same sentiments that was on show right
through 2017. And VAT has not dented sentiments in the residential off-plan space. At least based on what has
been on show so far.
“We have been focused on the project details and not whether we should have launched sales before VAT came
into effect,” said Ishan Khwaja, Director of L-I-V Developers. “The project is more than 20 per cent complete and
we wanted to ensure that it is completed by Q2-19 and well before the Expo event.
“Most projects that are being launched today and hoping to benefit from an Expo upturn will only be completed in
2021-22. “Our pricing is based on the fact that all of the apartments will either have a water view or a sea view.
The prime plot became a natural fit.”
L-I-V Developers has been around in the market for some time, primarily through acquiring plots and developing
Dh20 million plus villas at Emirates Hills. The Dubai Marina plot was bought in 2015 and construction started in
Q3-16. (The company also had some development interests in the US, principally in New York, Los Angeles and
Orange County.) Khwaja said the company has built up a land bank for further launches, and that the choice will
always be for “prime investment locations”. The second project could be by the middle of this year.
More options are coming up across the length and breadth of Dubai’s waterfront locations — Meraas has multiple
island options such as Bluewaters and Nikki Beach, the Palm with its Raffles-branded twin-tower on the Palm,
Dubai Properties with 1/JBR, and Emaar with the Beachfront and its other twin-tower project — for an Address
hotel — at Jumeirah Beach Walk.
And that’s only along the Jumeirah coastline. Further down and in and around the Dubai Creek Canal, developers
are lining up their latest high-end living options.
The real estate action by Dubai’s waterside is going to flow for some time to come.
Source: Gulf News
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DUBAI TOURISM AND HUAWEI INK DEAL TO
PROMOTE DUBAI IN AFRICA, CHINA Wednesday, January 24, 2018
Dubai’s Department of Tourism (DTCM) and Chinese electronics manufacturer Huawei have agreed to cooperate
on efforts to make Dubai the “destination of choice for tourists from the Middle East, Africa, and China,” Huawei
said in a statement on Wednesday.
Under the terms of the agreement, Huawei will work with DTCM to promote Dubai’s local culture and heritage
throughout these countries, the statement said, while providing a “convenient and seamless online experience in
Dubai” for holiday bookings.
Source: Gulf News
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NO NEGATIVE TRUMP IMPACT ON BRAND
SAYS DAMAC'S SAJWANI Wednesday, January 24, 2018
The Damac Properties brand will not suffer because of its ties to Donald Trump and the Trump Organization,
founder and chairman Hussein Sajwani said in an interview.
In an interview with CNBC at the World Economic Forum in Davos, Sajwani said the deals that Damac has signed
with the Trump Organisation - to operate two golf courses in Dubai - are not negatively affected by the ebbs and
flows of President Trump’s popularity.
“We have opened the first golf course…we’re very happy with the design [and] the quality,” he said. “I think it’s one
of the best golf courses, not in the Middle East, but around the world.”
“Our second golf course is on the way, and I don’t see any impact, any effect of our business [due to Donald
Trump]. We’re doing business as usual,” he added. “As a matter of fact, last year, our sales, I think, are going to be
up by a few percentage [points].”
Sajwani also said he believes that the Dubai realty market remains and stable, leading him to be optimistic about
the future.
“I don’t see a danger of [over]capacity because we have about half a million freehold units in Dubai,” he said.
“We’re growing at last three to four percent.
“We need a minimum of 15,000 units very year. In the last three years, we’ve produced less than 10,000 units,” he
added. “Going forward I don’t see more than 10,000 to 12,000 units, so I see supply and demand equilibrium."
Source: Arabian Business
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DUBAI PROPERTY PRICES TO REBOUND IN
2018, SAYS NEW REPORT Monday, January 22, 2018
The UAE’s real estate market may experience a turnaround in 2018 after years of falling property prices, according
to data collected by Propertyfinder Group.
The latest edition of Propertyfinder’s ‘trends’ report notes that the sale prices of apartments have been falling
with low, single digit declines across most areas of Dubai. Similarly, villa prices experienced significant declines,
particularly in Meadows (9.3 percent), Dubai Land (8.2 percent), Furjan (8.1 percent) and Jumeirah Islands (7.1
percent).
“Popular sentiment is that prices are at, or very close to, the bottom of the cycle and will increase in the lead-up to
Expo 2020,” said Lukman Hajje, Propertyfinder Group chief commercial officer.
“There will also be an increase in product offerings in affordable emerging communities in the sub-one million
AED, sub-one thousand AED per square foot segments, which were historically underserved during Dubai’s earlier
construction booms.”
Hajje added that the oil price rally of the last four weeks – which has reached a three-year high – means here may
be more reason to be bullish on the UAE’s real estate market.
Additionally, Propertyfinder noted that population growth outpaced new supply by two to one in Dubai, according
to real estate portal Reidin. According to Propertyfinder, 2018 will likely follow a similar trajectory, with
strengthening demand potentially offsetting the rise in supply.
Property investments were also found to still command healthy yields of six to eight percent, suggesting that
Dubai (and Abu Dhabi) remain attractive options for investors-turned-landlords.
Lastly, Propertyfinder noted that homeowners have largely avoided the brunt of changes in the UAE’s tax policy,
and still do not have to pay taxes on capital gains, property appreciation, salaries or rental yields in the UAE.
“With real estate prices declining significantly in the last 12 to 18 months, and with the lowest price per square
foot across 10 major international cities, Gulf Sotheby’s is predicting that 2018 will see an uptick in the market,
especially for the ready segment,” Gulf Sotheby’s managing partner Kalpesh Sampat wrote in the Propertyfinder
trends report.
"The lower pricing has mainly been a result of several off-plan launches in the affordable segment," he added.
"This strategy cannot be sustained over a long timeline, as it adversely impacts the bottom line - that's why I am
convinced pricing will revert back to more normalised levels in 2018."
Source: Arabian Business
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DUBAI’S DEVELOPERS HOLD BACK PASSING
ON VAT COSTS TO BUYERS Saturday, January 27, 2018
Developers in Dubai have so far not passed on the higher VAT-related costs they have been incurring on projects
to property buyers. But this is a situation that cannot go on and some sort of price appreciation should start
showing up in sales agreements, sources say.
So far this year, there have been two high-profile launches of freehold projects in Dubai, and with premium price
tags, including one where the average per square foot price was Dh2,000 and over. And because of the premium
on location and quality of build, these projects would have carried similar price tags even before VAT.
But the true test for developers will come when they introduce the next round of sub-Dh1.5 million properties.
Will these developers keep price tags at more or less similar levels? Or will there be a 5 per cent or more cost
inflation built into their next round of prices?
They are certainly not getting any help from contractors, who have already priced in the VAT factor into their
billings from January. “Apart from the VAT element, there has been an increase in key raw material prices,
concrete and steel rebars,” said Vinod Pillai, General Manager at the RP Group, whose construction division is a
main contractor on multiple projects in the UAE.
“Rebar prices have gained 3.5-4 per cent in the last week or so — and it’s always been a commodity that could go
either way in short span. Contractors have been passing on the cost increases — VAT- and non-VAT related — to
the project promoters in their invoicing.”
According to market sources, the local construction industry had mobilised early in their VAT preparations, by
updating their software and accounting systems and getting even the smaller contractors to do so. And by the
time VAT did become a reality, the industry and its players were good to go.
They were in mood either to absorb the VAT costs despite developers — at least some of them — making such
demands. But contractors still have had to make some adjustments.
“This is something that developers were resisting on initially, and have tried to renegotiate with us,” said K.A.
Siddiqui, Partner at Dubai Walls Construction. “But in most cases, there is at least a partial VAT cost pass through
that is taking place.
“In our opinion, this is a trend that will continue as margins for the contractors were already squeezed to begin
with. And depending on the clientele, there has been some ability for developers rather than contractors to
absorb the higher costs.”
But can contractors keep on absorbing VAT related costs, even partially? Already with payments from clients
stretching to months, to take on the additional burden of paying off part of the VAT costs that should be paid by
developers.
For the moment, “in certain cases, there is some negotiation taking place between developers and contractors to
meet half way on these costs,” said Mohammad Mustafa, Managing Director at Emsquare Engineering
Consultants. “However, in all cases we are seeing that some pass through — from the contractor to the developer
— is taking place.” There are also the VAT payments that the main contractors have to pay their subcontractors
and then file reclaims with the tax authority. As things stand now, it could take two months for such
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reimbursements to come through. Sources say it is far more likely that instead of actual pay backs, some sort of
readjustments will be made on subsequent claims.
“So, it would not exactly be a cash back, but more of an adjustment on the next payment terms,” said Pillai. “But in
the short-term, the main contractor is effectively having a double VAT exposure of 10 per cent — one that he
needs to pay the authority and the additional 5 per cent made on behalf of his suppliers, such as for MEP,
building materials, etc.
“The cash flow situation will require careful management because the reclaiming will take time.”
Source: Gulf News
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SMALL IS BEAUTIFUL Saturday, January 27, 2018
Developers in Dubai are adopting a new strategy to capture an untapped market share. They are increasingly
offering smaller unit types -studios and one-bedrooms - and smaller sizes of each unit type to overcome the
relatively high cost of land and deliver more affordable properties. This makes the units affordable to a segment
of the population like small and young families who were earlier priced out of the Dubai housing market.
"We have seen a change in the trend where the sizes have been reduced so that the end product aligns with what
the current market is demanding. This makes the units more affordable to the buyers/end-users, but not
necessarily impact the developers' costs. By reducing the size to fit market demand, the number of units in any
project goes up, which means more kitchens, more bathrooms, more walls, more car parks, which increases the
costs for developers," says Ranjeet Chavan, managing partner, Gulf Sotheby's International Realty.
End-users are also attracted to these units as they represent an opportunity for some to get onto the property
ladder while living in a top location.
"From an investment point of view, they are a fantastic option - the prices are lower, so it's more attractive and
they still offer very good rental yields. There are obviously larger units in the market and some buyers will prefer
that, but those units: a) aren't for everyone, and b) aren't affordable to everyone," explains Lewis Allsopp, CEO,
Allsopp & Allsopp.
Most private sector developers and even the larger ones are deploying this strategy. "There is no specific
developer type doing this, we can see this happening at various locations by different developers but it is not a
constant. When a buyer walks into a property, he likes to see a lot of space and good views. This is just the natural
behaviour of anyone buying real estate to live or for investment," observes Dounia Fadi, CEO, MD Properties.
Industry stakeholders claim these will not be cookie-cutter apartments. Faced with an increased demand for a
relatively new market segment, developers are trying to find the best approach to cost and design affordable
properties. To improve space utilisation, some developers are adding modular space-saving furniture that
changes functions.
Adrian Popica, general manager, House Hunters Real Estate Brokers, says: "Developers have access to the latest
technology and are able to include in the affordable projects features such as smart home systems and
sustainable community planning. Most developers aim to provide affordable communities with all the facilities
and amenities needed by residents."
Allsopp insists these are still very good apartments. "It's not like people are being offered shoe boxes to make a
home in. They will be well-built, of good quality and in good locations," he reiterates.
However, developers find it hard to retain the affordability of units after investors have picked it up at launch. "If
small units remain affordable, then that is a good thing. When investors come pick the cheaper smaller units for
rental income, that pushes prices up, hurting the little guy. No one anywhere in the world can regulate that or put
restrictions on that, but we need to somehow come up with a way that affordable properties remain within an
affordable bracket," points out Dounia.
Market observers cite how smaller affordable properties are the norm in other global cities as well.
"It is not a strategy, but a norm if you take a closer look at unit sizes in comparable cities such as New York, Paris,
London, Tokyo and Mumbai, Dubai has been generous in sizing the units initially but with the market maturing
and rise in demand for small and affordable housing, this is probably the best move for developers to capture
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increased market share. The other reason that acts as a catalyst and has a direct impact on unit sizes is the
availability of land in prime locations, which is always limited," says Chavan.
A McKinsey Global Institute study talks about the best strategies to achieve affordable housing - finding land in
the right location, reducing construction costs through value engineering, industrial approaches and innovation,
increasing operations and maintenance efficiency and reducing financing costs for buyers and developers.
"Looking at the way local developers have approached the affordable housing segment, we can notice a lot of
similarities and it's safe to say that they studied and implemented strategies that worked in other parts of the
world," adds Adrian.
"The more congested a city, the smaller the units and higher the price. Dubai still has a lot of land available to
develop. Scoring big profits from a development should not and cannot be the only driver. Developers must take
into account cost of living versus average wages, etc," concludes Dounia.
Source: Khaleej Times
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ABU DHABI HOUSE RENTS TO DECLINE
MORE Wednesday, January 24, 2018
Residential rents and sales prices in Abu Dhabi are expected to see further moderate declines in 2018 owing to
the continuous delivery of new supply, says real estate consultancy Asteco.
Average apartment and villa rents declined by 10 per cent and seven per cent in 2017 in comparison to 2016,
whilst apartment and villa sales prices declined 10 per cent and four per cent year on year.
While rents for one-bedroom apartments decreased by an average of Dh10,000 per annum, the larger two- and
three bedroom units dropped by an average of Dh16,500, says Asteco in its Q4 2017 market update.
Limited economic growth continued to translate into job cuts, reduction of staff allowances and limited new
employment opportunities. This, coupled with the increase in new supply, resulted in a drop in sales prices and
rents across all asset classes. The decline was most prominent for high and mid-quality properties, the report
adds.
"Approximately 9,000 residential units, including 6,200 apartments and 2,800 villas and townhouses are
anticipated for completion this year, predominantly within the districts of Reem Island, Al Raha Beach and Yas
Island," said John Stevens, managing director, Asteco.
"Based on previous years, the delivery of some of this inventory may be postponed until 2019 such as the delayed
office buildings Omega Towers on Reem Island and the ADIB HQ on Airport Road, which were due for delivery in
2017 but are now expected for handover in 2018," Stevens continued.
Around 2,800 apartments and 750 villas and townhouses were delivered in 2017.
While transaction activity for completed properties slowed compared with previous years, newly launched off-
plan quality projects came with attractive payment plans and discounts.
Source: Khaleej Times
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ABU DHABI HOTELS SEE RECORD GUEST
NUMBERS Tuesday, January 23, 2018
Hotels and hotel apartments across the capital enjoyed a comfortable 2017, with a record 4.875 million visitors
staying in Abu Dhabi's 162 hotels and hotel apartments - a 9.8 per cent year-on-year increase.
According to the Department of Culture and Tourism - Abu Dhabi (DCT), the number of guests staying in Abu
Dhabi city during the year rose by 10.3 per cent to reach 4,295,030 across its 131 hotels and hotel apartments,
which provide 26,821 rooms. The Al Ain region, meanwhile, recorded a 5.5 per cent increase to 450,328 guests
across its 20 hotels; while the Al Dhafra Region rose 8.2 per cent to number 130,180 guests at its 11 hotels and
hotel apartments.
"A near double digit year-on-year growth in the number of guests staying in all three regions of the emirate is
testament to our drive and determination in helping the emirate evolve into a must-visit place on any traveller's
itinerary," said Saif Saeed Ghobash, director general, DCT. "Abu Dhabi's unique cultural archetypes, combined
with diverse natural landscapes, cultural and historic sites, dynamic family-leisure entertainment and ambitious
business opportunities, will continue to stimulate visitation and help us grow by 11 per cent per annum to achieve
8.5 million visitors by 2021."
Ghobash, however, said that he is aware of the challenges that the emirate will face in supporting key metrics
such as length-of-stay and occupancy rates.
Throughout 2017, key overseas markets continued to perform well with guests from China surging year-on-year
by 60 per cent to number more than 372,000 to be Abu Dhabi's largest overseas source market, with the numbers
swelled by the easing of visa restrictions and Chinese visitors now receiving visas on entry in the UAE.
India is the second largest international source market with more than 360,000 guests recorded during the 12
months, an increase of 11 per cent. The UK remains the largest European source market, registering a 13 per cent
rise to more than 270,000; while the US market also showed a considerable rise of more than 23 per cent.
Domestic tourism from within the UAE, on the other hand, increased 2.6 per cent to number slightly over 1.5
million hotel guests.
"Combined with our ongoing international marketing and promotional activities and our excellent collaboration
with strategic partners, including our national airline Etihad Airways and Abu Dhabi Ports, we will continue to
evolve and lead Abu Dhabi's tourism proposition to achieve new levels of excellence; implementing new initiatives
and working closely with the private sector, while striving to achieve new record numbers of hotel guests,"
Ghobash said.
Source: Khaleej Times
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DH220 MILLION ALUMINIUM PLANT OPENS
AT KIZAD Wednesday, January 24, 2018
Ducab Aluminium Company, the latest company to join the UAE's fast growing aluminium sector, marked its
official opening at Khalifa Industrial Zone Abu Dhabi (Kizad) on Wednesday.
Sheikh Hamed bin Zayed al Nahyan, Chief of the Abu Dhabi Crown Prince's Court, inaugurated the Dh220 million
joint venture between Ducab, the UAE-based leading manufacturer of high-quality cables and cabling products,
and Senaat, one of the largest holding companies in the UAE's industrial sector.
Sheikh Hamed stressed that industry has become a significant pillar of the UAE national economy. He said
economic diversification is essential to maintain the pace of comprehensive development and ensure strong
growth in the future.
Ministers and other senior leaders and executives as well as customers attended the opening ceremony.
In a statement, DAC said the joint venture embodied the efforts to expand the development of the industrial
sector in the UAE by embracing the partnership model that combines national industrial sector organisations in
Abu Dhabi and Dubai. "DAC cooperates with Emirates Global Aluminium (EGA) to supply the new manufacturer
with molten aluminium in a unique collaborative model to promote partnership strategies among national
institutions."
DAC said it would aim to strengthen the UAE's industrial supply chain in line with the national strategy to enhance
industrial investment opportunities across the country. The company will manufacture 50,000 metric tonnes of
high quality electrical grade aluminium rod and overhead conductor per annum once it reaches its full capacity
supplying to both local and international customers.
Eng. Jamal Salem Al Dhaheri, Chairman of Ducab and Chief Executive Officer (CEO) of Senaat, who has assumed
the role of Chairman of DAC, said the launch of the plant extends the UAE's industrial capabilities and addresses
the growing aluminium market globally.
"DAC has signed a long-term partnership with its neighbour EGA for the supply of molten aluminium to the facility
along Kizad's 'Hot Metal Road.' With this special partnership with EGA, we are now positioned to offer tailored
products for the electrical supply chain, optimizing local resources in line with the Abu Dhabi Economic Vision
2030. Moreover, the new company will substitute substantial imports of aluminium rods and overhead lines into
the UAE, and help build a competitive edge for 'Made-in-UAE' industrial products," said Al Dhaheri.
"Ducab Aluminium Company marks an important milestone in the UAE aluminium sector and adds to a growing
number of downstream ventures in aluminium being developed in Kizad as part of the UAE's ambitions to further
diversify the national economy. Proximity to Port Khalifa is a real advantage for this export-orientated business.
DAC has already signed rod supply contracts to service customers across the GCC, India, Lebanon, North America
and select markets in Africa. Further expansions are also being planned for Latin America and Europe as DAC
targets export sales of over Dh300 million in 2018," said Dr. Ahmad bin Hassan Al Shaikh, Vice-Chairman of Ducab
and DAC Board Member.
DAC manufactures Electrical Conductive (EC) grade aluminium and aluminium alloy rods, wires, and bare
overhead conductors. The activities at DAC will complement Ducab's existing portfolio, which has seen the 100
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per cent UAE-owned company become a global leader in the development, design, manufacture, marketing and
distribution of copper and aluminium wire and cable products.
With five manufacturing facilities in the UAE including DAC, Ducab's products are currently used in the energy,
general construction, oil & gas, industrial, defence, transport, marine, mining and other specialty industry
verticals.
Abdulla Kalban, EGA's Managing Director and Chief Executive Officer, said the aluminium industry with EGA at its
heart has long played an important role in the economic diversification of the UAE, creating jobs and economic
opportunity. "We welcome the official inauguration of DAC, and look forward to reliably supplying them with the
metal they need to make their products in the years to come."
The UAE aluminium sector as a whole employs some 30,000 people, making it the largest employer among the
UAE's energy intensive industries.
Captain Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports, said the proximity of the DAC facility to major
partners Emirates Global Aluminium, which is also based in Kizad and other anchor tenants in the aluminium
cluster, is a clear advantage in terms of access to raw materials. "We look forward to welcoming more industrial
and logistics companies to set up at Kizad and Khalifa Port Free Trade Zone to maximize down, mid and upstream
availability within specialized clusters at Kizad."
Source: Khaleej Times
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ABU DHABI RENTS WILL REMAIN UNDER
PRESSURE Wednesday, January 24, 2018
Residential rents in Abu Dhabi will remain under pressure this year and more so if the 6,000 odd new apartments
do get handed over. In all, 9,000 residences, including 2,800 villas, are due for delivery through this year,
according to an update from Asteco.
The property services firm believes rentals could record “moderate declines as a result of the continuous delivery
of new supply during a period of moderate economic and market growths”.
Apartment rents had average quarterly declines of 2-3 per cent during 2017.
The upcoming handovers will primarily take place at Reem Island, Al Raha Beach and on Yas Island.
On the freehold sales side of things, where developers are willing to offer mid-range residential options, investors
will queue up. A case in point being Aldar’s The Bridges and Water’s Edge. Market sources say other developers
could soon take to this off-plan strategy as well.
In the office space, the gloom in the job market continues to have a telling impact on real estate transactions. The
decline in rents was “most prominent” for high- and mid-quality properties. “Limited economic growth continued
to translate into job cuts, reduction of allowances and limited new employment opportunities” are the primary
factors impacting commercial real estate’s possibilities.
It will require developers with office projects to change strategy where they can. “Based on previous years, the
delivery of some of this inventory may be postponed,” said John Stevens, Managing Director of Asteco. These
include the “delayed office buildings Omega Towers on Reem Island and the ADIB HQ on Airport Road, which
were due for delivery in 2017 but are now expected for handover in 2018”.
Source: Gulf News
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OFFICE TOWER SALE IN ABU DHABI WAS
TOP DEAL IN 2017 Monday, January 22, 2018
A transaction involving a Grade A 26-storey office tower at Abu Dhabi’s Capital Centre district was the largest
commercial real estate transaction in 2017, according to JLL, which advised on the deal.
The International Tower was acquired by Aldar Properties recently.
Completed in 2012 by SinoGulf Real Estate Investments, the property has a gross leasable area of about 40,000
square meters and a built-up of 91,000 square metres.
Located close to Abu Dhabi National Exhibition Centre, the property’s tenants include Aecom, Wood Group, and
McKinsey & Co. “This is by far the largest sale of a real estate asset in Abu Dhabi in recent times, which confirms
that there remains strong interest among investors for well-built, let and managed properties in Abu Dhabi and
the UAE,” said Gaurav Shivpuri, Head of Capital Markets in MENA, JLL. “We will soon begin the marketing of a high
quality residential asset on the island and expect it to have similar strong investor interest, as the market begins
to stabilise after a few years of challenging conditions.”
Besides this sale, JLL advised four other large asset transactions in the region during 2017, totalling over Dh2
billion in value.
Source: Gulf News
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ASTECO EXPECTS 'MODERATE' DIP IN ABU
DHABI HOUSING PRICES, RENTS IN 2018 Wednesday, January 24, 2018
Residential rents and sales prices in Abu Dhabi will undergo further “moderate” declines in 2018, owing to the
continuous delivery of new supply, real estate consultancy Asteco said on Wednesday.
“Approximately 9,000 residential units, including 6,200 apartments and 2,800 villas and townhouses are
anticipated for completion this year, predominantly within the districts of Reem Island, Al Raha Beach and Yas
Island,” said John Stevens, managing director at Asteco.
“Based on previous years, the delivery of some of this inventory may be postponed until 2019, such as the
delayed office buildings Omega Towers on Reem Island and the ADIB HQ on Airport Road, which were due for
delivery in 2017 but are now expected for handover in 2018.”
Average apartment and villa rents declined by 10 per cent and 7 per cent respectively in 2017 compared with
2016, while apartment and villa sales prices declined 10 per cent and 4 per cent year-on-year, according to the
company’s fourth quarter 2017 market update.
Abu Dhabi property market slowed in the past two years in line with economic trends, job cuts and reductions in
staff housing allowances. This, compounded by an increase in new supply, caused a drop in sales prices and rents
across all asset classes, although the decline was most marked for mid-market and luxury properties, the report
said.
Rents for one-bedroom apartments decreased by an average of Dh10,000 per annum, the report said, while
larger two- and three bedroom units dropped by an average of Dh16,500.
Reductions in villa rental rates and sales prices were less pronounced, with quarterly changes varying between 0
per cent and 3 per cent over the year.
Demand for completed properties slowed compared with previous years, the report added, however, “newly
launched quality off-plan projects with attractive payment plans and discounts will continue to benefit from good
levels of demand”. This could increase investment in the real estate sector in 2018, it said.
Asteco’s outlook for the Abu Dhabi office sector is also subdued, with further rental declines predicted across all
sub-sectors of space. In 2017, reduced business growth and low oil prices resulted in limited demand for office
space, causing rents to soften by 5 per cent year-on-year on average compared to 2016.
In several grade A and B offices buildings the decline was more pronounced, Asteco said – up to 10 per cent on
some contract renewals.
Around 85,000 square metres of office space was delivered in 2017, mainly within Al Maryah Tower on Maryah
Island and the mixed-use Leaf Tower on Reem Island.
Additional office developments anticipated for completion in 2017 were delayed and are likely to be handed over
in 2018, the report added.
Source: The National
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MIRAL SAYS 80% OF UNITS LEASED AT ABU
DHABI CORNICHE LEISURE PROJECT Wednesday, January 24, 2018
Miral Asset Management, the government-owned developer behind Yas Island’s main leisure attractions, said 80
per cent of food and beverage units at its new beachfront leisure project in Abu Dhabi has been leased, ahead of
its completion in March.
The A’l Bahar beachfront development on Abu Dhabi Corniche, Miral’s first development outside Yas Island, is on
track to open as planned by the end of the first quarter of 2018, the developer said.
“We are on track to launch the groundbreaking leisure, wellness and retail space by the end of March to the
public, ahead of the Mother of the Nation Festival,” said BR Kiran, chief portfolio officer at Miral, in a statement on
Wednesday.
“Leasing of available retail spaces is also on track with a variety of leasing opportunities still available for both
established brands and local start-ups which we feel is a unique and exciting advantage to this project.”
Unveiled in December, A’l Bahar is a beachfront community space occupying 80,000 square metres and stretching
600 metres down the beach.
When complete, it will include basketball and volleyball courts, an outdoor gym, children’s play area and 48 retail
and F&B units made from shipping containers.
Also opening at the complex is Haddins, a health and wellness facility, and Bodytree yoga and pilates studio.
There will also be an inflatable waterpark concept called Aquafun.
Construction of A’l Bahar began in October and is progressing “on schedule”, said the developer. Infrastructure
work is also under way with cladding and aluminum structural work in place.
Retailers will start fitting out their units from February, Miral added.
Miral was set up by the Abu Dhabi government in 2011 to manage the entertainment components of the 25
million square foot Yas Island, alongside state-backed real estate developer Aldar, which oversees the island’s
residential and retail strategy.
In December, its chief executive Mohamed Al Zaabi, said the company planned to develop other projects outside
of Yas Island once A’l Bahar is complete.
“Miral has been through a good learning curve, we’ve learned a lot through Yas Island, in terms of creating a
destination for tourists and residents. I think we can capitalise on that for different projects in future,” he said.
Source: The National
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SHARJAH APARTMENT RENTS SEE STEEP
DECLINE IN 2017 Tuesday, January 23, 2018
Villas in Sharjah bucked the wider trend of falling rents in the emirate's residential rental market, recording an
increase of 1.7 per cent and taking the rate of growth to 0.4 per cent during the last quarter of 2017, according to
real estate consultancy Cluttons.
Over the last two years, Sharjah's villa market has grown in popularity, appealing to those households priced out
of Dubai or seeking a more family-oriented lifestyle.
Suzanne Eveleigh, Cluttons' head of Sharjah, said: "Communities such as Al Zahia have been a runaway success
and with most major new shopping mall developments in Sharjah anchoring these new lifestyle destinations, the
future of community living in the emirate appears relatively buoyant, especially when compared to many other
property segments in the UAE."
In contrast to the villa market, apartment rents in Sharjah registered a steep decline of 13.6 per cent in the last
quarter of 2017, compared to a decline of 10.6 per cent in 2016. Research shows that Abu Shagara topped the list
of weakest performers, with rents retreating by 15.1 per cent during 2017.
This market has been evolving ever since the used car showroom dealerships vacated the area at the end of 2015.
Much of the demand here has been driven historically by those working in the used car industry. Many of these
households have now relocated, which has pushed vacancy rates up to between five and 10 per cent and rents
are declining as landlords move to entice demand. The only other market to register double digit declines was Al
Qassimiya (-10.6 per cent).
According to the report, Sharjah's residential rental market is set to face pressures from rising stock.
"Many landlords are reluctant to adjust advertised rents downwards due to concerns about alienating existing
tenants. However, with tenants increasingly seeking out new and energy-efficient buildings, reflecting household
financial pressures stemming from the January 1 introduction of VAT, rising utility bills and rising inflation levels,
we feel landlords will need to be flexible with rents and payment plans, particularly in older buildings, to sustain
demand," added Eveleigh.
Faisal Durrani, head of research at Cluttons, said: "With a sudden turnaround in economic growth or residential
demand unlikely to increase during 2018, rents will continue to moderate, with apartments likely to see
corrections of five to seven per cent next year, while villa rents are expected to experience growth of between one
to two per cent. This makes Sharjah's villa market the only property segment in the UAE to see sustained positive
growth. This is likely to prompt further investment in the city's villa segment."
Source: Khaleej Times
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RAKTDA, AIRBNB INK AGREEMENT Wednesday, January 24, 2018
Ras Al Khaimah Tourism Development Authority (RAKTDA) and Airbnb have signed a Memorandum of
Understanding (MoU) to promote responsible home sharing, boost tourism and diversify the tourism offer in the
Emirate of Ras Al Khaimah.
The announcement was made by Haitham Mattar, chief executive officer of RAKTDA and Hadi Moussa, Airbnb's
General Manager for the Middle East and Africa, at a Press conference in Ras Al Khaimah.
This agreement follows the recent adoption of a new Directive which makes clear that people in the Emirate are
allowed to share their space as long as they respect basic safety rules and register via a simple online process.
As part of the MoU, Airbnb and Ras Al Khaimah will promote the new rules and responsible home sharing by
creating a Responsible Hosting Page informing hosts of the rules and linking to official information and sending
regular email reminders to hosts; Exchange insights and learnings about travel trends on Airbnb in order to raise
awareness about the positive impacts of the Airbnb Community and boost tourism.
Haitham Mattar, chief executive officer of RAKTDA, said: "The MoU that we've signed with Airbnb marks a massive
milestone towards diversifying the tourism scene in Ras Al Khaimah. We aim to welcome one million visitors by
end of 2018 and 2.9 million by 2025, and therefore the demand for more rooms is essential to accommodate
those visitors. We are confident that our partnership with a leading international hospitality pioneer such as
Airbnb will help take Ras Al Khaimah's tourism offering to the next level. In addition, this project will strengthen
our ability to increase the choice of options for our guests and cater to a more diverse traveler portfolio,
particularly in light of growing demand towards the sharing economy."
On the new Directive legitimising home sharing, Haitham added: "As part of RAKTDA's responsibility, we will
ensure that hosts adhere to the quality standards of safety, insurance, health and amenities needed to enhance
the visitors experience."
Hadi Moussa, General Manager Airbnb Middle East and Africa said "Ras Al Khaimah is a wonderful place to visit
and I'm excited that our growing host community will support the Emirate in attracting more travellers to the
region and help the diversification of tourism. Airbnb has so far partnered with over 350 governments around the
world and we are committed to being good partners to the Emirate and support the responsible growth of
innovative forms of tourism."
The new Directive and agreement between RAKTDA and Airbnb will ensure that more residents of Ras al Khaimah
will be able enjoy the benefits of tourism and more guests will be able to discover all the Emirate has to offer.
Source: Khaleej Times
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SHARJAH VILLA RENTS DEFY ODDS TO INCH
UPWARDS Monday, January 22, 2018
Villa rents in Sharjah do not seem to be following the script. In the fourth quarter of 2017, they actually gained a
marginal 1.7 per cent, but that is still quite a contrast to the general decline in residential rents elsewhere in the
UAE. And this year, they could put on another 1-2 per cent, according to Cluttons in its latest update.
In fact, apartment rents in Sharjah still remain under pressure, and are “likely to see corrections of 5-7 per cent
this year”. If this pans out, it follows a 10.6 per cent rental correction all through 2017, with Abu Shagara topping
the list of weakest performers, seeing rents down an average of 15.1 per cent during 2017.
“This market has been evolving ever since the used car showroom dealerships vacated the area at the end of
2015,” as per Cluttons reports.
The other neighbourhood to register double-digit declines was Al Qassimiya, which recorded a dip of 10.6 per
cent.
The emirate’s existing landlords will also need to worry about what’s on the horizon — a raft of new freehold
projects were launched last year and should start deliveries by late 2019-20.
But these landlords are also caught in a bind. They are “still reluctant to adjust advertised rents downwards due
to concerns about alienating existing tenants. However, with tenants increasingly seeking out new buildings,
reflecting household financial pressures stemming from the January 1 introduction of VAT, rising utility bills as
subsidies continue to be phased out and rising inflation levels, we feel landlords will need to drop rents,
particularly in older buildings, to sustain demand,” the report adds.
Source: Gulf News
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PRICEY CENTRAL LONDON HOMES GET
OVER ADJUSTMENT ISSUES Wednesday, January 24, 2018
After three years of price falls, there are signs that prime central London housing values may be bottoming out.
Values in the UK capital’s most expensive central locations slipped a marginal 0.9 per cent in the final quarter of
2017, while annual price falls totalled -4 per cent, in line with our expectations.
The Savills research view is that prime central London is ahead of the curve in adjusting to current market
conditions. Values are on average 15.9 per cent below their 2014 peak, ahead of the first significant stamp duty
increase.
But the rate of price falls has slowed and values are now finding a level, albeit no growth is expected for the next
two years.
In contrast, the more domestic outer prime London markets have not seen values fall to the same extent as the
higher value central locations over the past few years. But further small falls are expected this year, with
significantly lower five year house price growth.
But what buyers and sellers want to know, of course, is what happens next.
Forecasting house prices is never completely straightforward, but the current backdrop of political and economic
uncertainty in the UK only increases the challenges. Getting it right presupposes that we are making the right
economic assumptions, can predict policy direction and have the ability to anticipate the fickle nature of buyer
sentiment.
We don’t have space here to set out all the factors that we do know, or can predict with confidence. But suffice to
say, we at Savills base our forecasts on a wide range of indicators, including a detailed knowledge of previous
housing market cycles.
So, in a few words, I will attempt to summarise what we think is in store for the UK capital’s prime residential
markets. Having seen double-digit falls since the stamp duty rises of late 2014, house prices in London’s prime
central locations are beginning to find a level.
But uncertainty over the impact of Brexit points to two further years of no growth. Thereafter, when uncertainty
clears and central London’s prime residential real estate again represents identifiably good value, prices will
bounce. By the end of 2022, we expect values across the city’s most established core prime central zones to have
risen by a fifth (20.3 per cent).
While this may look ambitious in the current climate, it represents a departure — likely permanent — from the
historic trend, which saw average annual price growth of 5.7 per cent above the rate of inflation between 1979
and 2014. During that period London was transformed from a purely domestic market in the pre-Thatcher years,
to one of the world’s leading global cities. This rocket-fuelled promotion phase cannot be repeated, but London
can — and we believe it will — retain its position among an elite group of world cities, valued for its low risk
status.
The wider prime London market is more dependent on domestic buyers employed in the financial and business
services sector, for whom mortgage affordability is more of a concern. This will constrain price growth, which is
projected to total 10.2 per cent, with modest 2 per cent fall across 2018.
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We think the risks regarding London’s position as a global commercial centre have been overplayed. Whatever the
challenge from other cities, London will almost certainly remain a key global financial centre and develop as one
of several European hubs for the growing tech sector.
Its prime markets will therefore benefit from new domestic wealth generation as well as attracting wealthy
international buyers.
Source: Gulf News
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DP WORLD AND INDIA'S NIIF TO INVEST UP
TO $3BN IN TRANSPORT, LOGISTICS Monday, January 22, 2018
Dubai-based ports operator DP World and India's National Investment and Infrastructure Fund (NIIF), a quasi-
sovereign wealth fund, said on Monday they had created a fund to invest up to $3 billion of equity in the transport
and logistics sectors in India.
The money will target acquiring assets and developing projects in sea and river ports, freight corridors, special
economic zones, inland container terminals, and logistics infrastructure such as cold storage, the two
organisations said.
It follows NIIF in October signing a $1 billion investment deal with a unit of Abu Dhabi Investment Authority, one
of the largest sovereign wealth funds in the world.
DP World, which operates several ports in India, said in January last year it was partnering with Canadian pension
fund manager Caisse de dépôt et placement du Québec to create an investment vehicle worth $3.7 billion that
would invest in ports and terminals worldwide.
Source: Arabian Business
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DOWNTOWN OFFICE MARKETS RECEIVE
DISPROPORTIONATE AMOUNT OF NEW
SUPPLY IN US Thursday, January 25, 2018
32 million square feet of positive net office absorption forecasted in 2018
According to CBRE's 2018 U.S. Real Estate Market Outlook, improved U.S. office market fundamentals should
continue, downtown markets will receive a disproportionate amount of new supply, the tech sector will likely
remain a primary demand driver, and occupiers will pursue space efficiency and agility in 2018.
"The strongest gains in employment, occupancy and rents will likely occur where recovery has lagged during this
cycle, and where there is little or no construction underway, including many former housing-bubble markets in
the South and West," said Scott Marshall, Americas President, Advisory & Transaction Services at CBRE. "Suburban
submarkets that offer a range of housing choices along with urban amenities--including retail and restaurant
options, public transit and walkability--are well positioned to capture demand from maturing millennials, and thus
could be attractive to both real estate investors and occupiers."
CBRE expects continued U.S. office market growth in 2018, with net absorption projected to total 32.1 million sq.
ft. As occupiers have focused on maximizing efficiency and productivity in their portfolios, net absorption has
become more muted in recent years than in past expansion periods. That has led to more moderate but
sustainable growth rates, which should continue in 2018.
Downtown Markets to Receive Disproportionate Amount of New Supply
With significant construction activity occurring in Manhattan, San Francisco, Washington, D.C., and other large
downtown markets, city centers are expected to account for a disproportionate share of new supply in 2018. This
will likely result in the downtown vacancy rate increasing more (60 basis points) than the suburban vacancy rate
(10 basis points).
Overall, completions are expected to outpace net absorption for a second straight year in 2018, driving a modest
20-basis-point increase in the vacancy rate to 13.2 percent--only slightly above the cyclical-low of 12.9 percent in
Q3 2017. Given the modest increase in vacancy, CBRE expects overall rent growth to decelerate to 2 percent from
2.4 percent in 2017.
Tech Sector to Remain Top Occupier
The tech sector has accounted for nearly 20 percent of major office leasing activity in recent years and will likely
remain a primary demand driver in 2018 in leading tech markets like the San Francisco Bay Area and Seattle, as
well as in emerging, lower-cost tech hubs like Charlotte and Phoenix. The tech sector is expanding at about twice
the rate of overall job growth, despite having slowed during the past few years.
"Several lagging sectors, such as financial services and energy, have increased their shares of office leasing activity
in 2017--a positive indicator of demand coming from a wider range of industries," said Andrea Cross, Americas
head of office research, CBRE. "Prospects for reduced financial industry regulation and oil price stabilization have
fueled optimism in these sectors, and markets with concentrations of these industries like New York and Houston
should benefit."
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Occupiers Will Continue to Pursue Space Efficiency and Agility
Labor remains the primary challenge facing occupiers, due in varying degrees to cyclical low unemployment,
technology-driven competition and a widening skills gap.
"Occupiers are taking a balanced approach to real estate strategy, continuing to pursue space efficiency while
reinvesting savings into workplace enhancements that will help them attract and retain employees," said Whitley
Collins, CBRE's Global President of Advisory & Transaction Services.
Occupiers in the financial and technology sectors are leading this charge, but more conservative industries--like
the legal sector--are adopting these principles as well. U.S. law firms have lowered their space requirements by an
average of 27 percent over the past 18 months, with many moving into prime office space and implementing
improved workplace design.
Although there has not been a material shift away from long-term leased office space, occupiers are showing
clear interest in flexible-serviced agreements. Those include a spectrum of shorter-term offerings like traditional
serviced offices, enterprise-coworking models and on-demand space offerings.
"With personal devices and cloud technology making employees more mobile and rendering the physical office an
optional place to work, employers are seeking more choice in workplace locations and greater flexibility in
reducing long-term commitments in an uncertain business environment," said Julie Whelan, Americas head of
occupier research, CBRE. "We expect occupiers' interest in shorter-term leases and third-party space aggregation
to grow as these models are more widely tested and understood."
Source: World Property Journal
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TOKYO PRIME OFFICE RENTS TO DIP IN
2018 FROM NEW SUPPLY ADDED Wednesday, January 24, 2018
According to CBRE's newly released 2018 Japan Real Estate Market Outlook, due to a new supply of Class A office
space coming on the market, rental rates in Tokyo will see a correction in 2018.
CBRE reports office rents are set to fall for Tokyo Grade A buildings, but will continue to rise in regional cities. New
supply in Tokyo will average 233,000 tsubo in 2018 and 2019, an increase of almost 30% on the 10-year annual
average.
The vacancy rate is thus expected to rise to 4.8% at the end of 2019, 2.7 points higher than at the end of 2017. As
a result, rents are likely to decline over the course of 2018, and are forecast to fall by around 8% by the end of
2019.
Meanwhile, future supply will remain limited in regional cities, where supply-demand conditions are already tight.
With strong occupier demand also expected to continue, rise in rents is expected to continue in these regional
cities.
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
Jenny Weidling BA (Hons)
Manager – Research and Advisory
+971 4 403 7789
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
Consultancy Services to residential, commercial and
mixed use communities throughout the GCC Region.
SALES MANAGEMENT
Our Sales Management services are comprehensive
and encompass everything required for the successful
completion and handover of units to individual unit
owners.