NEWS BRIEF 01 - Asteco Property Managementamlak finance completes residential project at mirdiff...

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ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 01

SUNDAY, 07 JANUARY 2018


© Asteco Property Management | 2018 | asteco.com

IN THE MIDDLE EAST FOR 30 YEARS



REAL ESTATE NEWS

UAE / GCC

TECH CAN GIVE UAE’S FACILITIES MANAGEMENT FIRMS A STRONG HAND

HOW VAT WORKS IN REAL ESTATE

UAE PRIVATE SECTOR TURNS IN A SOLID DECEMBER PERFORMANCE

OMAN 2018 STATE BUDGET LIFTS SPENDING; LITTLE TO REASSURE RATING AGENCIES

HOMEFRONT: 'MY PROPERTY AGENT IS FORCING ME INTO A MAINTENANCE

CONTRACT. IS THAT LEGAL?'

THE FIRST ARABIAN GULF IPO OF 2018 OPENS FOR SUBSCRIPTION IN SAUDI ARABIA

SAUDI DEVELOPER DAR AL ARKAN TO SELL A 30 PER CENT STAKE OF UNIT IN IPO

UAE SALARIES: VAT SET TO EAT INTO PAY RISES, NEW REPORT SAYS

REAL ESTATE IS ALL ABOUT LOCATION, LOCATION, REPUTATION

WATCH OUT FOR INDIRECT VAT COSTS ON PROPERTY DEALS

WHY OIL MAY BOIL IN 2018

WHAT WILL DRIVE INVESTOR OPTIMISM IN 2018?

18 NEW UAE ATTRACTIONS TO LOOK OUT FOR IN 2018

LANDLORDS LOOK AT EASY-PAY RENT SCHEDULES TO RETAIN TENANTS

DUBAI

FOR OFF-PLAN, JUMEIRAH VILLAGE AND DUBAI SOUTH ARE TOP PICKS

MAG AND AZIZI LEAD PRIVATE DEVELOPERS IN OFF-PLAN RELEASES

MAIN CONTRACT AWARDED FOR 800-ROOM DEIRA ISLANDS RESORT

DUBAI’S NEW HOMES WILL DECIDE PRICES AND RENTS

AMLAK FINANCE COMPLETES RESIDENTIAL PROJECT AT MIRDIFF

DUBAI HOTELS NEARLY SOLD OUT FOR NYE

DUBAI DUTY FREE ANNUAL SALES ROSE 5.6% TO DH7.05B

NAKHEEL AWARDS DH385M CONSTRUCTION CONTRACT FOR BEACHFRONT RESORT

IN DUBAI

DUBAI'S JVC THE 'MOST AFFORDABLE VILLA COMMUNITY' OF 2017


© Asteco Property Management, 2018 asteco.com

DEFINING LANDSCAPES SINCE 1985



REAL ESTATE NEWS

TWELVE KEY FACTORS THAT CAN IMPACT DUBAI REALTY IN 2018

FIXIT APP AIMS TO HELP DUBAI TENANTS RESOLVE URGENT PROBLEMS

DUBAI RENTERS STARTED TO BUY IN 2017

NOTE TO SERIOUS PROPERTY SELLERS: KEEP IT REAL

ABU DHABI

FURTHER DROP IN RENTALS EXPECTED IN ABU DHABI

NORTHERN EMIRATES

DSCD TO PROVIDE UNIFIED DATABASE IN SHARJAH

MOODY’S RATING TO BOOST INVESTMENTS INTO SHARJAH

SHARJAH RENTS: 12% DROP FROM 2016

INTERNATIONAL

SAN FRANCISCO GETS BACK ITS TALL TOWER BEARINGS

US HOUSE PRICES LIKELY TO SLOW DOWN AS TAX BILL RESHAPES ECONOMY,

ANALYSTS SAY

WHICH CURRENCY WILL COME OUT ON TOP IN 2018?

CORPORATE EXPANSIONS DRIVING HONG KONG'S GRADE A OFFICE MARKET






TECH CAN GIVE UAE’S FACILITIES

MANAGEMENT FIRMS A STRONG HAND Wednesday, January 03, 2018

For those of us in the industry, the news that Union Properties would spin off its facilities management (FM)

division could not have come at a more opportune time. An industry that has needed both transparency and

consolidation for a long time finally gets the jolt that it has been looking for. This is a move that will likely spark a

series of cascading events and spur an improvement in services. In the era of VAT, further cost consciousness will

be on the forefront of consumer minds, and it is this that should spur the move towards energy management

through smart home technologies. FM companies that will lead the way in this area will get to gain market share

and capture the imagination of the consumer. And save a few of his dirhams as well. The FM industry in Dubai is a

fragmented one to be sure. Except for a handful of companies at the top, think of the industry as an umbrella of

businesses, with tangled webs of outsourced operations amid hundreds of small outfits.

For the most part, this structure has led to razor-thin profit margins. This typically meant low customer

satisfaction as that has been the easiest variable to sacrifice for short-term gains. In the current scenario, at the

retail end, landlords in the freehold space have been unable to get effective competing quotes, given the lack of

transparency, especially with regards to new technological solutions. Tenants at the mid-end of the market have

not had adequate representation to exert cost-effective measures for themselves. Where there has been

professionalism, it has come with the trade-off of being expensive. This implies that either it has been relegated

to the higher end of the marketplace or effectively done through the management of large buildings, thereby

giving the FM company the ability to acquire marketshare.

This, however, has led to a gap in the marketplace, at the horizontal mid-end of the market (town houses, small

villas, and small buildings, both residential and commercial), where single landlords have been unable to get

adequate advice on how to improve their property. Tenants, equally, have been frustrated, with the consequence

that there has been a higher turnover than seen in international markets of tenants moving houses.

In order to be proactive, FM companies need to invest in newer technologies, with smart home and energy

management systems just being one of them. They have to have the ability to blend expertise of hardware

installation alongside that of software expertise data processing in order to point the landlord and tenant to the

best solution. At the mid-end, the focus should — rightly so — remain on cost-effectiveness. However, the

scalability of the model can only come through an education of the marketplace, combined with higher levels of

after-service. This capitalisation of the industry is what is likely to drive further consolidation in the years ahead.

The corporatisation wave is bound to increase transparency and professionalism across the board, as

homeowners association (HOA) boards exert pressure on behalf of landlords on the one hand and tenants start

to demand more cost-effective mechanisms on the other.

This trend, for the most part, is similar to what is being played out in Tier 1 markets as well. It is only with the aid

of technology these cost savings can be ensured, along with data transparency for the customer. While this

technology wave has been seen at the high end, the real target remains at the mid-end. And it is the acquisition of

this slice that will separate the men from the boys ...

Source: Gulf News

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HOW VAT WORKS IN REAL ESTATE Monday, January 01, 2018

Value Added Tax (VAT) is now a reality, and although residential real estate in general is either exempt or zero-

rated, commercial property dealings will attract an extra 5 per cent on top, affecting residential in a more

roundabout way.

So what is taxable?

• Any commercial property in the UAE, whether leased out or sold, such as offices, retail and even car parking is

taxable, unless provided as part of a residential property.

• In addition, non-resident owners and/or tenants won’t escape the 5 per cent VAT for commercial property. If

the landlord and tenant are both non-residents, the landlord has to register for VAT if the property is in the UAE,

as there is no one else who could account for that VAT.

• Lease incentives, such as free office fit-outs, could be subject to VAT.

• VAT will also be applicable to rents payable under commercial rental contracts, which took effect last year in

respect of rents that relate to 2018.

• Any property, which is not fixed to the ground and hence movable, would also be considered commercial for

VAT purposes. Mobile homes, for example.

• Regular hotels, bed and breakfast and serviced apartments, also come under VAT.

• Residential property leased out on a short-term basis to non-residents also falls under the commercial

category. If a lease is less than six months and the person living there doesn’t have an Emirates ID, it would be

deemed commercial from a VAT perspective.

Exempt versus zero-rated property

In tax jargon, commercial property is standard rated, meaning 5 per cent VAT applies to it, while residential

property is exempt from VAT.

Anything that is designed for living in, such as your own home, nursing homes, student and employee

accommodation, would be considered residential and exempt for VAT purposes.

However, there is a third category – the zero-rated supply, which can also apply to residential. The first supply of

residential real estate within three years from completion would be zero-rated in the UAE, in addition to the first

supply of charity-related buildings, and those buildings converted from commercial to residential, as well as UAE

nationals building their own home.

While this doesn’t affect the buyer or tenant of such a property, as there is no VAT to pay, it is an important

distinction for developers, as they can recover VAT related to development costs, including purchases of materials

and professional services, such as engineers and the likes, which are liable to VAT. Developers in this case make

no revenue during the construction period, but zero-rated supply, contrary to exempt supply, means they can

register for VAT and claim back input VAT. Subsequent supplies of residential would be exempt from VAT, as also

land without infrastructure, so as a developer you can’t register for VAT for those units.

A developer providing both, exempt residential and standard-rated commercial property, would still be able to

register, the only complication being to calculate which VAT is recoverable and which is not.

Reclaiming VAT: to register or not to register






As a developer, a refund mechanism is available to reclaim VAT incurred on development costs. The authorities

can approve the claim within 20 days or ask to extend the time to approve the application. Once approved, the

developer will receive the refund within five days.

Obviously, as a developer it makes sense to register, but for smaller landlords or service providers in relation to

property, it could be a matter of choice, if there was one. If you have a yearly revenue of over Dh375,000, you

have to register, but if your revenue is just over half of that, one can voluntarily register but there is no obligation.

Indirect effect on residential and prices

Just because residential sales and lease prices aren’t burdened with VAT, that doesn’t mean VAT won’t come into

play. For example, Dewa fees and real estate agencies will come under VAT. Sales and leasing are both classified

as taxable goods and services. This means for tenants the next electricity and water bill will feature 5 per cent on

top of the usual amount expected. District cooling and the like of course also fall into this category.

Equally, when seeking help from a real estate agency to buy, rent or manage property, or draw up a sales

agreement, VAT will be added to those services. So, expect agency commissions to become steeper. Real estate

agents must charge VAT on their services if they are registered for VAT, regardless of whether the property is

residential or commercial.

The same applies to any other professional services provided in the real estate sector, be it facility management,

repairs and so on.

In the case of residential property, the sale and lease of property in the secondary market will be exempt from

VAT, and thus owners and landlords will not be able to recover VAT on their purchase (e.g. maintenance costs)

related to the sale or leases. In other words VAT expenses incurred maintaining a property are simply not

recoverable by selling or leasing the property, unless one increases the price of the home accordingly.

However, this is unlikely to happen in the near future. Although the landlord can increase the sale price or rents,

in practice, given the current residential property market, it may be difficult for landlords to pass on this cost to

purchasers and tenants and, therefore, the landlord is most likely to absorb the VAT cost.

What does VAT mean for Ejari and the like?

When it comes down to registering property on the land department’s registry or a rental contract in Ejari, VAT is

unlikely to apply.

In general, fees charged by government as a public authority in a sovereign capacity means no VAT will be

applicable. However, if the fees were generated from a commercial activity conducted by the government, VAT

will apply. DLD registration fees should not attract VAT because these are likely to be regarded as a fee charged

by a public authority performing a function in its sovereign capacity.

Source: Gulf News

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UAE PRIVATE SECTOR TURNS IN A SOLID

DECEMBER PERFORMANCE Thursday, January 04, 2018

There was quite a bit of end-of-the-year cheer for the UAE’s economy, with business conditions for the “private

sector improving at its best pace” in 34 months during December. New orders and output gains were helped by

higher export orders, according to the Emirates NBD monthly tracker of purchasing managers’ sentiments.

A lot of the activity could also be put down to pre-VAT buying spree on the past of businesses.

“The UAE’s non-oil sector expanded sharply in the last two months of the year,” as a consequence, Khatija Haque,

Head of Mena Research at Emirates NBD, said in a statement on Thursday. “It is likely that the introduction of VAT

in January has spurred activity and purchasing in the fourth quarter of 2017, which is in line with our

expectations.” But when it comes to employment and wage growth data, December’s performance was muted

and in line with what was taking place right through last year.

The Purchasing Managers Index (PMI) survey, sponsored by Emirates NBD and produced by IHS Markit, rose to

57.7 during December from 57 a month before.

New order growth accelerated to a 35-month high, with the rate of expansion “sharp and comfortably above the

historical series average”.

But the biggest takeaway from December is the improvement in export orders. The rate of growth was solid

overall and the strongest recorded in nine months, the report states, and with sizeable demand coming in from

other Gulf states.

On the product pricing front, input prices continued to increase during December and that’s been a steady since

June. The respite came in the form of the rate of inflation easing to a three-month low.

While input prices gained, those on the output fell during December. “Companies reduced selling prices to

stimulate client demand, the report states. But the rate of discounting was only ‘modest’.”

Source: Gulf News

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OMAN 2018 STATE BUDGET LIFTS

SPENDING; LITTLE TO REASSURE RATING

AGENCIES Tuesday, January 02, 2018

Oman’s state budget for 2018, approved by ruler Sultan Qaboos on Monday, boosts spending at the expense of

running a large deficit, despite increasing concern among credit rating agencies about the health of the country’s

finances.

The budget projects spending of 12.5 billion riyals ($32.5 billion) this year, up from 11.7 billion in the original

budget for 2017, local media quoted a Finance Ministry statement as saying.

Revenue are projected at 9.5 billion riyals, up from 8.7 billion in the 2017 budget. That leaves a planned deficit of 3

billion riyals this year, the same as last year’s projected deficit.

The 2018 budget assumes an average oil price of $50 per barrel, up from an assumption of $45 for 2017. The

Brent oil price is now above $65, so Oman’s revenue is likely to be significantly higher than expected if oil prices

stay flat.

Nevertheless, the budget projects a deficit of 10 per cent of gross domestic product in 2018, well above levels

which economists consider sustainable in the long run and higher than 12 per cent planned for 2017.

The finance ministry said on Monday that it needed to continue raising expenditure to boost economic growth

and living standards, while building social housing and providing other assistance to lower-income citizens.

With smaller oil and financial reserves than its wealthy neighbours, Oman has been spending heavily on industrial

and infrastructure projects in an attempt to diversify its economy beyond oil exports.

That strategy has not reassured rating agencies. Last month, Fitch Ratings cut Oman by one notch to BBB-minus

— just above junk territory — with a negative outlook, citing the budget deficit. Standard & Poor’s already rates

Omani debt as junk.

Of the projected 3 billion riyal deficit in 2018, 500 million riyals is to be covered by withdrawals from financial

reserves and the rest through external and domestic borrowing.

Oman’s actual state budget deficit for the first 10 months of 2017 narrowed to 3.20 billion riyals from 4.81 billion

riyals a year earlier, the latest finance ministry data showed. Finance ministry sources told local media last week

that Oman would delay the introduction of a 5 per cent value-added tax until 2019, instead of imposing it in 2018

as originally planned, to give tax administrators and companies more time to prepare. However, Oman will

impose a new tax on sugary drinks and tobacco products by mid-2018. The ministry said on Monday that it would

proceed with a privatisation programme and was working to sell some state companies in 2018.

The government announced several years ago that it would launch a major privatisation scheme but there has

been little progress since

Source: Gulf News

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HOMEFRONT: 'MY PROPERTY AGENT IS

FORCING ME INTO A MAINTENANCE

CONTRACT. IS THAT LEGAL?' Wednesday, January 03, 2018

We recently moved into a villa and had listed a number of issues to be fixed prior to moving in, which our estate

agent agreed would be done. After moving in there were still some issues outstanding so the estate agent sent

the maintenance company back and they found more issues wrong. Now the agent is saying we have to take out

a maintenance contract with the maintenance company before the outstanding work is finished - this is bearing in

mind the work had already been paid for by the landlord. After some investigation, we discovered that the agent

is also the manager of the maintenance firm and is trying to force us into an annual contract with her company to

get all the repairs completed. Is there a legal precedence on this? Could there be a conflict of interest considering

the agent is basically holding clients to ransom by holding back completion of work until the tenant signs a

contract with her maintenance company? SB, Dubai

Of course there is a conflict of interest here. If you wish to apply and pay for a maintenance contract, it is surely

up to you which company you use, you certainly should not be forced into any agreement with a third party

company you are not happy with.

I would involve the landlord at this stage, to inform him about the outstanding maintenance issues that have yet

to be completed but paid for by him. Let him know that the agent is acting in this shady way, then wait to hear

what happens. The landlord has a duty of care to you as his tenant so has to deal with major maintenance issues,

let the landlord contact the agent and deal with him.

I moved out of my flat and handed over the keys to my landlord. He promised me in an email that my rental

security deposit would be returned by a certain date. However, the landlord id delaying the payment of the

deposit by claiming he is waiting for a security deposit from the new tenant. What can I do to get my deposit

back? NA, Dubai

I suggest you arrange a face-to-face meeting with the landlord. At this meeting you will need to explain to him that

your rental agreement has come to an end and it is not allowed for him to delay the return of your deposit just

because he is waiting for a new tenant to pay their deposit. Your situation is totally separate and if he doesn’t

agree or continues to delay, I suggest you inform him that you will file a case at the Rental Dispute Settlement

Centre.

The landlord has certain responsibilities to you as his tenant and delaying payment is not the correct way to

behave. In reality, getting these relatively small deposit sums back can be quite challenging and it is because they

are relatively small that some landlords think they can get away with the games they play.

I know that the Land Department and the Real Estate Regulatory Authority are looking into improving the way the

rental deposit is held and then returned. Unfortunately for you, these changes are sometime in the future, so in

the meantime, communication and mediation is the only clear way of resolving your dilemma.

Source: The National

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THE FIRST ARABIAN GULF IPO OF 2018

OPENS FOR SUBSCRIPTION IN SAUDI

ARABIA Monday, January 01, 2018

The first share sale of 2018 hit the market on Monday in Saudi Arabia as Al Rajhi Capital opened its real estate

investment unit's initial public offering for subscription, an increasingly popular strategy among asset managers

to raise funds by listing the income yielding investment vehicles.

The Saudi Arabia-based financial services firm said it is selling 42.67 million shares in Al Rajhi REIT Fund at 10

riyals a piece from January 1 to January 14. The shariah-complaint fund aims to have a total size of 1.62 billion

riyals (Dh1.59bn) and is targeting a yield of 6.16 per cent in 2018, the company said in an emailed statement.

Al Rajhi REIT will invest in commercial real estate, including retail outlets, warehouses, offices and educational

establishments across the kingdom, except the two holy cities of Makkah and Medinah, said Al Rajhi Capital, the

investment arm of Saudi Arabia's biggest retail bank Al Rajhi.

"The fund's investment target is to invest in income-generating assets and to lease and distribute at least 90 per

cent of the fund's annual net income in cash over the fund term on a semi-annual basis," Al Rajhi said.

Real estate investment trusts (Reits) have grown in popularity in Saudi Arabia, the region's biggest economy and

Opec's top oil producer, after the regulator put the framework in place for them to be traded on the stock market

in 2016. Since the approval of Reit regulation, six of them have listed on Tadawul, the Arab world's biggest bourse

by market capitalisation, and have outperformed the benchmark stock index. In the past weeks, the Capital

Market Authority approved the listing of two more Reits --Swicorp Wabel REIT and Jadwa REIT Saudi Fund.

Long established in developed markets like the US and the UK and even some of the emerging markets such as

Hong Kong and Singapore, Reits are relatively new in this part of the world. Reits are bought and sold on

securities' exchanges and the rental income generated from the underlying property assets managed by the fund

distributed to shareholders as a dividend.

Al Rajhi said that currently, some 54 per cent of the fund's assets are in retail property, 12 per cent in warehouses,

26 per cent in office space and 8 per cent in the educational sector. The fund said it will have 13 assets after the

initial public offering, without disclosing the value of those assets.

Al Rajhi Capital's own property portfolio in the kingdom, it said, is valued at 2.9bn riyals.


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SAUDI DEVELOPER DAR AL ARKAN TO SELL

A 30 PER CENT STAKE OF UNIT IN IPO Sunday, December 31, 2018

Dar Al Arkan Real Estate Development, the biggest publicly traded real estate developer in Saudi Arabia, has

received a nod from its board for plans to sell a 30 per cent stake in its property management unit, joining a

growing list of regional companies looking to raise funds through initial public offerings of their subsidiary

businesses.

"The company plans to file the offering application to the [ Saudi Arabia's] Capital Market Authority to obtain the

approvals," Dar Al Arkan said in a statement the Tadawul stock exchange, where its shares are traded. Samba

Capital & Investment Management is advising Dar Al Arkan on the deal, it said without giving a timeline of the

transaction or how much it plans to raise through the share float.

Dar Al Arkan Properties Company, is a wholly-owned unit and runs Dar Al Arkan's property management and

leasing business. It has income producing assets worth 2.68 billion Saudi riyals (Dh2.62bn) spread across a

number of cities in the kingdom.

With a successful IPO, Dar Al Arkan will join the ranks of firms such as Emaar Properties, the UAE's biggest

developer by market capitalisation, and state-controlled energy producer Abu Dhabi National Oil Company

(Adnoc), both of which have listed shares in their units this year on Dubai and Abu Dhabi bourses, respectively.

Public offerings are making a comeback following a dry spell over the past couple of years when a slow-down in

economic growth forced many companies to shelve plans for IPOs amid concerns of not getting proper valuations

for their businesses. The Middle East and North Africa region recorded five IPOs in the third quarter of this year

alone, up from a single listing in the same period last year and more offerings are expected, thanks to the

recovery in oil prices, consultancy EY said in a report released in December.

The value of IPOs in the third quarter rose 20 per cent to US$236.7 million from a year-earlier period, led by three

deals on Tadawul, according to EY.

Dar Al Arkan, which has predominantly focused on its home market in the past, in December launched a Dh800

million (US$218m) residential tower in the UAE, marking its first foray outside the kingdom. The 34-storey ‘I Love

Florence Tower’ is located in Downtown Dubai close to the fast-growing Business Bay and Dubai Canal district.

The company, in November, reported a 86.3 per cent profit hike for the third quarter of 2017 to 209.6m Saudi

riyals from 112.5m reported for the same quarter last year.

Real estate investment opportunities abound in Saudi Arabia, the region's biggest economy and Opec's top oil

producer, especially in the the country's hospitality sector despite softer economic conditions, the real estate

agency Knight Frank said in December.

The agency said that the supply of hotels in the key cities of Jeddah and Riyadh remained heavily tilted towards

five-star hotel developments with a lack of hotels in the mid-scale sector and that represents an opportunity for

developers.


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UAE SALARIES: VAT SET TO EAT INTO PAY

RISES, NEW REPORT SAYS Wednesday, January 03, 2018

Employers and employees in the UAE and Saudi Arabia are set for a potential conflict in 2018 on the back of a

contraction in salaries in real terms as the region's two biggest economies introduce value-added tax (VAT),

according to the human resources consultancy Korn Ferry Hay Group.

Salaries in the UAE are expected to rise 4.1 per cent this year but after factoring in an expected inflation rate of

4.6 per cent, they will on average contract by 0.5 per cent, it said in a report released on Wednesday.

"Employers in Saudi and UAE are bracing for a challenging time as they battle with managing business costs and

meeting the expectations of disgruntled employees," the HR consultancy said.

Businesses and employees are preparing for additional complexities of managing costs with the introduction of

VAT from January 1, 2018. The biggest impact will be on end-consumer products which will see a 5 per cent rise in

all major purchases including household goods and utility expenses, Korn Ferry noted.

"There seems to be little indication of employers supporting any real wage increases to support employees with

the additional cost of living," it said.

Globally, employees will see an average wage increase of just 1.5 per cent after adjusting for inflation, while in the

Middle East, wages on inflation-adjusted basis are set to rise 0.9 per cent.

The demand for professionals and skilled laborers, especially in the hospitality, healthcare and food and beverage

sectors is still high. While introduction of VAT makes the UAE a relatively less attractive place for employment, it is

unlikely to be a deal-breaker for people currently employed in the country or seeking opportunities here. The levy

of the new tax at 5 per cent rate in the UAE is still below the global average of 15 per cent.

Yes it does bring down the attractiveness of the place but relatively speaking, it's still very good," Harish Bhatia, a

management consultant at Korn Ferry Hay Group told The National in a telephone interview. "We're all making a

big deal over VAT because it's a new tax and we've never played with the word tax in this part of the world but it

had to come and it was inevitable so the government has other sources of revenue."

Economists have argued that VAT is unlikely to cause a huge spike in the cost of living at time when rents, one of

the major monthly expenses for residents, have gone down. According to government officials, VAt is expected to

net an estimated Dh12bn in the first year and Dh20bn in the second year of the levy. That's likely to give a shot in

the arm to the economy, and will ultimately boost hiring, according to economists.

The UAE economy has suffered in the aftermath of the oil price crash but there are clear signs of a bounce back.

The country's non-oil economy had the biggest three-month gain in November, boosted by steep growth in

output and new business, according to the latest Purchasing Managers' Index, a key gauge of the country's non-oil

economy.


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REAL ESTATE IS ALL ABOUT LOCATION,

LOCATION, REPUTATION Tuesday, January 02, 2018

The UAE's real estate market has become more 'real' in its true sense - full of real buyers, real brokers, real

developers and real money in 2017. Gone are the days of speculation, hot money, exchanging artist's impressions

with high premium and overnight profits and building castles in the air.

Now, the real buyers and investors ask all the real questions to the genuine developers and tick all the boxes

before making their decision. It's a buyers' market and customer is king.

Continued vigilance by the Dubai Land Department (DLD) and the sound regulatory environment steered by the

Real Estate Regulatory Agency (Rera) helped Dubai's real estate market to become more mature and stable over

the last few years. That's why, like any other matured market, the emirate's real estate market will go through the

normal economic cycles of ups and downs - with slight variation from time to time.

However, the current Dubai real estate market scenario is marked with challenges and opportunities. The market

situation continues to be tough due to the ongoing political climate in the region, ample supply and soft prices.

The current downward cycle that started in the second half of 2017 appears to have either approached the

bottom or bottomed out - depending on which research report one trusts more. The decline in prices seems to

have been arrested somehow with either no or marginal reduction.

Most research reports are indicating a market recovery in the next few months - as early as the first quarter of

2018, due to the anticipated surge in demand in preparation for Expo 2020. Some reports suggest that off-plan

sales have picked up - while at the same time, the market might face a supply glut.

So, the current situation is marked with contrasting realities. Although there is a sense of an oversupply in the

market which could be felt by declining prices, a surge in off-plan sales offers a different situation. There are more

than 55,000 homes getting delivered in 2017 and 2018, including more than 25,000 in 2017 alone - that is putting

pressure on price.

One could see property prices - studio apartments - starting at Dh280,000 at The Pulse at Dubai South - which was

unheard of in the last 10 years.

Off-plan continues to attract investors due to attractive returns. There has also been a rise in end-user buying

since many believe that prices have bottomed out. According to the DLD, 52,170 land and property transactions

worth Dh204 billion were concluded in the first nine months of the year. At this rate, the full-year transaction

value would exceed Dh272 billion - higher than the total value of land and property transactions worth Dh259

billion recorded in 2016 and Dh267 billion recorded in 2015.

Some of the top developers - such as Emaar Properties, Nakheel, Dubai Properties, Damac Properties and Azizi

Developments - continue to make major announcements on new projects that are being absorbed in the market.

Buyers are seen lining up to buy properties in some of the project launches. This reflects a growing investor and

buyer appetite for new properties - while the ready-to-move-in properties might take time to get absorbed.

This also reflects the ground reality that properties could be snapped up by buyers if they find it at the right

location, right quality, built by the right developer and the right payment plan. Along with growth in off-plan sales,

the most significant development has been a plethora of back-ended payment options being offered by






developers to woo customers. The rise of Dubai South as a favourite destination for investment was another

major development.

Despite challenges, there are opportunities due to the upcoming Expo-2020, rise of affordable housing and rising

demand from neighbouring Asian countries, such as India, Pakistan and China.

When it comes to real estate, historically it has been emphasised that property is about location, location and

location. I see real estate as more about trust. For property buyers and investors in Dubai, it is also about the

developer's credibility.

However, a sustainable business model with healthy cash flow, backed up with credibility and commitment to

customer happiness, will be the key differentiator between real estate developers in the coming years.

Developers will be required to be more agile and customer-focused to be able to gain public trust in future.

Source: Khaleej Times

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WATCH OUT FOR INDIRECT VAT COSTS ON

PROPERTY DEALS Monday, January 01, 2018

With value added tax (VAT) kicking in today, end-users in Dubai are confused whether to advance their property

purchases or to continue paying rents and wait for sales prices to bottom out.

As per VAT regulations, developers enjoy a zero rate on all residential sales within three years of completion of a

project. Any home sale done after those three years will come under VAT. However, residents need to watch out

for the indirect costs arising from property transactions.

"There will be no direct effect of VAT on unit costs as prices of new residential sales is zero rated and residential

leasing is exempted. Nevertheless, indirect costs coming from the ancillary processes of transactions and

construction will have an inflationary effect on the final prices over time, that we estimate to be from three per

cent to five per cent. Services in the building life cycle such as acquisition services, mortgage charges, construction

and property management, maintenance charges, etc., are expected to see a more direct effect from VAT," says

David Godchaux, CEO of Core Savills.

Market experts call for caution and remind buyers that there were similar concerns when the Dubai Land

Department doubled transfer fees on property transactions from two per cent to four per cent in 2013. Such

short-term blips are unlikely to affect buying behaviour.

"Markets adjust to these transaction levies and the reality is that even after VAT, UAE levies on real estate are very

competitive when compared to the developed world," says Hussain Alladin, head of IR and research at Global

Capital Partners. With attractive property prices and generous payment plans from developers, Dubai appears to

be on course for increasing end-user ownership levels and that trend is likely to continue, regardless of VAT.

Meanwhile, for those sitting on the fence waiting for prices to bottom out, it will be wise to defer your decision no

longer.

"Whether Dubai property prices have bottomed out or not depends upon the location and individual

development as there are varied drivers affecting sales prices in different communities and districts. Generally,

we expect further room for softening, particularly in areas witnessing a spike in new and off-plan launches in the

lower market segment as competition by a few developers on low pricing are pulling the area averages down and

sometimes dampening recovery of the re-sale market as well," adds Godchaux.

Some experts believe a turnaround is on the horizon, with green shoots appearing in certain communities such as

the Palm Jumeirah and Jumeirah Village Circle since the beginning of the year.

"Given the supply and demand dynamics at play, investors should not expect double digit returns this time

around, but a slow and steady recovery as fundamentals play themselves out," says Alladin.


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WHY OIL MAY BOIL IN 2018 Wednesday, January 03, 2018

The nearly two-year high upswing in oil price came as an unexpected boon for Gulf oil exporters, who now have

more reasons to be upbeat about a robust rebound in 2018 and start the year with a bang.

Brent crude futures, the international benchmark for oil prices, were at $67.29 on Tuesday, the most since May

2015.

For the economies of oil-rich GCC countries, which are embarking on new round of bold reforms, including the

introduction of value added tax to boost their revenue streams, the pick up in oil price will give added momentum

to their expansionary spending agenda and diversification drive.

On January 1, the UAE and Saudi Arabia launched the five per cent VAT regime, which is expected to supplement

state coffers to offset the revenue setback caused by a steep price plunge over the past three years.

Analysts at Moody's believe that higher oil prices would benefit the UAE, Kuwait and Oman the most by reducing

the current account deficits by an average of four to seven per cent of GDP.

The UAE is among the most strongly-positioned GCC sovereigns in terms of both the size of their financial assets

compared to government spending and low fiscal break-even oil prices, while Saudi Arabia, Oman and Bahrain

have a higher fiscal break-even oil price along with much lower financial assets on which to draw.

On Wednesday, oil traded near the highest close in more than two years before US government data forecast to

show stockpiles extended declines for a seventh week and as unrest continued in Iran, the Opec's third-biggest

producer.

US West Texas Intermediate (WTI) crude futures were at $60.87 a barrel at 1241GMT, up 49¢ from their last close

and their highest level since June 2015.

Brent crude futures - the international benchmark for oil prices - were at $67 a barrel, up 43¢ but still trailing

Tuesday's high of $67.29 that was the most since May 2015.

Traders said the dips followed indications that markets had recently overshot as US production is set to rise

further and doubts are emerging about whether demand growth can continue at current levels.

Global demand is expected to rise to 98.45 mbpd in 2018 from 96.94 mbpd in 2017 with demand for Opec crude

to rise to 33.4 mbpd from 33 mbpd in 2017.

Lukman Otunuga, research analyst at FXTM, said Tuesday's trading session saw oil prices record their strongest

year opening since 2014. WTI Crude ventured above $60.50, inching towards levels not seen since mid-2015 as

anti-government protests in Iran continued.

"Supply disruptions, geopolitical risk, and market optimism over Opec- and Russia-led supply cuts could continue

to support the upside; but the question is, for how long? Rising production from US Shale producers still poses a

threat to higher oil prices, and the upside could face some headwinds down the line. Taking a look at the technical

picture, WTI Crude is in an uptrend on the daily charts. The breakout about $60 could encourage a further incline

higher towards $62.50," said Otunuga.

Moody's senior vice-president Terry Marshall said all that enthusiasm could start waning this year. Prices for both

Brent and WTI will probably be stuck between $40 and $60 a barrel for most of this year as US shale production

rises, global supplies remain high and compliance with Opec-led output cuts falters. "Prices will likely remain

range-bound, and possibly volatile, on a combination of increasing US shale production, reduced but still






significant global supplies, and potential non-compliance with agreed production cuts - especially if demand

growth is more tepid," Marshall said.

There's still upside to the price," said Daniel Hynes, an analyst at Australia & New Zealand Banking Group in

Sydney.

"The market is definitely getting a little more positive about supply and demand dynamics. It's highly unlikely we'll

see any impact on output from the Iranian protests but it does raise market awareness of rising geopolitical

risks."

Oil last year capped a second annual advance as the Opec and its allies trim supply to reduce a global glut. Prices

will probably trade between $40 and $60 a barrel this year, penned in by rising US shale production, declining but

still hearty worldwide supplies and eroding Opec compliance, according to Moody's Investors Service.


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WHAT WILL DRIVE INVESTOR OPTIMISM IN

2018? Sunday, December 31, 2018

As we prepare to bid farewell to 2017, global investors have experienced 'a bit of everything' this year. Even

though there have been regional volatilities, 2017 has, in the main, been marked by steady and rallying financial

markets.

In the US, since Donald Trump was elected as president in November last year, the Dow Jones has closed at an all-

time high over 70 times. In addition, the S&P 500 closed at a record high on 52 days during this year - the fifth

most out of any point in history.

Whilst in Britain, the FTSE100 hit a peak closing high, with the blue-chip stock market reaching 7556.24 points in

October. Furthermore, markets have soared in Asia, with the MSCI Asia-Pacific Index clinching the longest run of

monthly gains in the past 10 years.

As such, will 2018 be a similar bag? Or, perhaps, we'll see more chaos in the markets as a string of geopolitical

factors - Brexit and the Trump presidency, to name but a few - unfavourably affect investor returns?

Whatever happens, to my mind there are several reasons why investors should be optimistic about the year

ahead.

To begin with, although central banks will tighten monetary policy, it's highly likely to be done in a gauged

manner, so as not to disrupt asset prices. A prime example of this is in the US, as the Fed raises interest rates at a

comparatively slow speed, so as not to endanger the economy. This action has seen US stock market indices

reach a string of new highs. Indeed, more of the same slow monetary policy tightening can be expected from the

European Central Bank and the Bank of England in 2018.

Additionally, the acceleration rate of global GDP growth is growing. The IMF forecast revealed in October is for 3.6

per cent GDP growth this year. This is well within the three to four per cent range favoured by economists. Also,

this growth is fairly evenly distributed, with all major economies around the world growing at a satisfactory speed.

As we've seen, the economy in China is growing at a much more robust pace than anticipated. The eurozone is

still benefitting from a, much-awaited, recurrent upturn, with the undertaking of structural reforms that will

enhance long-term growth prospects. A lot of this is reliant on French President Emmanuel Macron, showing that

change is indeed possible in France, and so can therefore also be achieved in countries such as Spain and Italy.

Another reason for investors to be positive for 2018 is the fact that corporate earnings are rising, helped along by

strong GDP growth. This aids dividend payments, stock market valuations and companies' credit ratings.

Moreover, tax cuts in the US may be a stimulus to growth on a global scale. Trump's tax reform bill could, many

insist, be revenue-neutral or perhaps result in a slash of overall tax collected of $1.5 trillion.

Naturally, the more tax cuts we see, the greater fiscal stimulus will be given to the US economy, which will also

boost imports into American economy, increasing global trade. That said, even so-called revenue-neutral tax

reform could have a significant effect on the US economy, if it simplifies tax and results in less misrepresentations

in the economy and finance. Such examples are decreasing the tax incentive for companies to use debt for their

funding rather than equity, as well as altering the treatment of profits earned abroad to urge the remittance of

cash back to the US. This, of course, is of great interest to technology firms such as Apple and many others.






Naturally, it's impossible to know whether the same level of resilience in the markets will be experienced in 2018,

or whether turbulence will be increased. However, we do know, as history has taught us, that markets work on an

upward trajectory, so whatever the next year brings, investors are urged to keep on investing.


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18 NEW UAE ATTRACTIONS TO LOOK OUT

FOR IN 2018 Sunday, December 31, 2018

There is much to look forward to in the new year, especially since 2018 has been declared the Year of Zayed, to

mark the the UAE's founding father's 100th birth anniversary. Emiratis, expats and visitors to the country can

therefore brace themselves for some stunning attractions across the country, which will surely make 2018 a year

to look forward to.

Here's our list of the top 18 sites and attractions that are set to capture UAE's imagination in the coming year.

From adventure activities to educational entities, entertainment and leisure complexes, this is where you can

head to make the most of your outings in 2018.

Dubai Frame

The stunning, one-of-a-kind structure, which was designed back 2009 and has already won an architecture award,

provides a 360-degree view of Dubai, with a 93-meter glass bridge that connects the past and present of the city

visually by showcasing old and new Dubai. Located in Zabeel Park, the golden rectangular attraction - constructed

to look like a picture frame - stands at 150 metres high, at an estimated cost of Dh160 million.

Mohammed bin Rashid Library

The world's largest library, overlooking Dubai Creek, will open to the public in the first quarter of 2018, and aims

to contribute to the knowledge revolution. Book lovers in the UAE will surely have a new favourite spot to hang

out in, in this larger-than-life 7-storey library, which will be home to 4.5 million print, audio and electronic books.

Warner Bros. World Abu Dhabi

Superhero fans look out, because the Warner Bros World Abu Dhabi theme park will finally open its doors in

2018. The mega theme park, which is estimated to cost US$ 1 billion, is located in the centre of Yas Island, near

Ferrari World Abu Dhabi and Yas Waterworld. It will feature at least 29 rides, entertainment programmes and

interactive shows, as well as dining areas and retail outlets inspired by Warner Bros.

The world's longest zip-line

Adrenaline junkies, brace yourselves for the world's longest zip-line, set to open in Jebel Jais, the highest peak in

the UAE, in Ras Al Khaimah. Although the exact length of the zipline has remained a secret until its official

opening, it will break the current Guinness world record held by 'The Monster,' in Puerto Rico, which is 2,200

metres long.

Dubai-Sharjah Bridge

Commuters between Dubai and Sharjah can finally heave a sigh of relief as a massive Dubai-Sharjah nine-lane

bridge with a capacity of 17,700 cars per hour will be opened by August 2018. According to authorities, traffic will

be diverted away from heavily congested routes, such as the Al Ittihad Road and the Shaikh Mohammad Bin

Zayed (MBZ) Road.

Al Qana

The new tourist and entertainment destination, Al Qana, will open in the second quarter of 2018 in Abu Dhabi.

The development, which is estimated to cost Dh850 million, includes residential apartments, a cinema hall, a






marina club and retail outlets, spanning a 150,000 square-metre area. The destination will even have the largest

aquarium in Abu Dhabi, standing at 5,000 metres in height.

'CLYMB' the world's tallest indoor climbing wall

Abu Dhabi has become the global destination for attractions, and the much-anticipated climbing wall is another to

add to its list. The Capital will open the world's tallest indoor climbing wall in 2018, which is designed in a giant

futuristic cube. The CLYMB, located on Yas Island, is estimated to cost US$100 and is 43 metres in height.

Deira Island Night Souk

A splendid, traditional Arabian souk will open for residents in Deira by the end of 2018. The market, which is

located next to Deira Mall, will include 5,300 retail outlets, which are spread along 1.9 kilometres of stunning

waterfront views, and will feature 96 cafes and restaurants, making for a complete family and dining out

destination.

Aladdin City

The magical Aladdin City, based on the lore of Aladdin and Sindbad from Arabian Nights, will feature six

enormous towers.The complex, which is 4,000 acres in size, will include golden buildings that are linked together

by bridges, creating a harmonious sense of connection. The mega-structure will also include a hotel, reaching 34-

storeys.

Bluewaters Island

The manmade island, which is around 300 metres off the Jumeriah Beach Residence (JBR) coastline, aims to give

residents and visitors the feeling of connection, rather than isolation. The stunning development will offer

residential buildings, apartments, penthouses, townhouses, beach hotels and 200 outlets and restaurants.

Cityland Mall

This is not just another shopping mall. Cityland Mall will be the UAE's first nature-inspired shopping centre with

botanical wonders, featuring a 200,000 square-foot open-air garden, known as the Central Park.

Reem Central Park

Residents living on Abu Dhabi's Al Reem Island have much to look forward to in 2018, with many developments

and projects that are near completion, including Reem Central Park. The new spot will cover an area of 1,000,000

square feet and will have a mosque, cafes, restaurants, shopping outlets and even a skate park.

Azizi Riviera

The mega project, located in Mohammed bin Rashid Al Maktoum City, is expected to open in 2018. Azizi Riviera,

which is estimated to cost Dh12 billion, is a stunning waterfront project located on the banks of the Dubai Canal

and will include 69 residential buildings, two hotels and a retail district.

'Ain Dubai' the World's largest Ferris Wheel

Ain Dubai, soon to be the world's largest Ferris wheel, is set to be one of the most iconic destinations in the

emirate. The gigantic wheel offers visitors a stunning 360-degree view of the city and its coastline, will be over 210

meters tall and is set on its own little island - Bluewaters.

W Hotel, The Palm

A second W Hotel will open in Dubai in March, located on the beautiful shores of the Palm Jumeirah. The sleek

hotel will feature 350 guest rooms and 58 suites, as well as stunning skyline views and a state-of-the-art gym.

Mandarin Oriental






Mandarin Oriental Jumeira Beach is set to open by the end of 2018 and will feature stunning guest rooms and a

variety of restaurants, spas and outlets, as well as beautiful water views and easy-access to the beach.

Rosemont Hotel and Residences

Located in Barsha Heights, Rosemont Hotel and Residences is expected to open in 2018, and will feature an

incredible man-made beach and rainforest garden on a five-storey podium, which connects the two towers.

Shams Boutik

Located on Al Reem Island, Shams Boutik is an exciting cosmopolitan hub that features a wide range of cafes,

restaurants, arts and crafts shops, clothing outlets, and even connects to the Burjeel Day Surgery Center medical

clinic. Although some of the shops are already open, the rest are expected to operate in 2018.


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LANDLORDS LOOK AT EASY-PAY RENT

SCHEDULES TO RETAIN TENANTS Thursday, January 04, 2018

Faced with the prospect of losing tenants and ensuing property vacancies in a soft rental market, rigid payment

frequencies of years past are giving way to more flexible rental schedules, suggests a Dubai property expert.

For years leading up to 2008, landlords across the UAE demanded a one-time annual rent cheque from tenants

presenting hardships for those earning minimal salaries.

The single block leasehold payments in the country reflected a more commercial mindset for office leasing but

are less preferred in the residential rental sector.

In other countries such as Canada and the United States, 12 monthly cheques is the norm in many provinces and

states where new tenants pay two months rent up front to cover first and last month’s rent.

Since the last economic crisis, rent schedules have been staggered by some landlords to three or four cheques a

month to entice tenants.

But now, with rents forecast to fall well into 2018, a small segment of landlords are making allowances for rent

payments 12 times a year in order to keep existing tenants in their properties.

In its [2017] Q3 report, Asteco noted that in Al Ain, for example, “landlords offered reduced rents and flexible

payment terms on contract rentals to retain existing tenants.”

In a few years’ time, we could see monthly cheques — landlords may start opting for that. Landlords are

beginning to understand that it’s a competitive market and they have to attract tenants.”

The easy-pay schedule could become more popular as more owners and landlords compete for tenants with

better rent contract terms, said John Stevens, managing director of Asteco.

“Ultimately, yes, [landlords] are flexible and they are becoming more flexible,” he said. “In a few years’ time, we

could see monthly cheques — landlords may start opting for that. Landlords are beginning to understand that it’s

a competitive market and they have to attract tenants.”

In other countries such as Canada and the United States, 12 monthly cheques is the norm in many provinces and

states where new tenants pay two months rent up front to cover first and last month’s rent. They also pay a

security deposit that is refundable at the end of the lease if there are no damage to the property,

To protect landlords in the UAE, however, renters who pay monthly might be expected to pay a higher security

deposit to guard against tenants abandoning their contractual obligations.

“Yes, we might be looking at a higher deposit levels of three months at least to cover them,” Stevens said.

Source: Gulf News

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FOR OFF-PLAN, JUMEIRAH VILLAGE AND

DUBAI SOUTH ARE TOP PICKS Wednesday, January 03, 2018

Property buyers in Dubai were chasing affordable options in 2017, with Jumeirah Village Circle (JVC) and Dubai

South recording the highest number of off-plan transactions among the city’s freehold communities. JVC, which

already hosts a sizeable resident base, figured in 2,161 deals and followed by the fast-developing Dubai South

enclave, which did 2,095.

Figuring in third place as the most sought after off-plan location was the pricier Downtown, where 2,039

apartments were bought direct from developers last year, according to data from GCP-Reidin, the property

services firm. (At the Downtown, another 607 ready units were also bought during the period.)

For ready properties, mostly sold in the secondary market, Dubai Marina retains its prime position, with 1,860

units, and followed by International City, which figured in 1,227 deals through the year. But the latter saw a 21 per

cent drop in volumes compared to 2016.

In dirham terms, overall citywide off-plan sales during 2017 weighed in at the Dh28.63 billion mark, while ready

transactions added another Dh19.51 billion.

In 2017, the gap between off-plan sales and those for ready in the secondary market widened considerably.

Based on GCP-Reidin data, there were only 11,536 ready units sold as against 21,884 in off-plan. Clearly, all those

developer-backed incentives — with post-handover payments being particularly decisive — continue to tilt sales

in the off-plan direction. (Post-handover plans accounted for nearly two-thirds of all off-plan launches in Dubai

last year).

Expect more of the same this year. Off-plan releases are likely to see a return to form after a relatively slight run

in the fourth quarter of 2017, during which only 3,818 units were released. As against that, the third quarter of the

year saw 18,267 units released and second quarter accounted for 12,513 units.

“Sure, the fourth quarter of 2017 was when there was some brakes applied on the number of launches,” said

Sameer Lakhani, Managing Director at Global Capital Partners. “Remember that entire communities were

launched in the fourth quarter, such as the ‘Azizi Victoria’ (at MBR City). Yet the number of unit launches does not

reflect that, primarily because developers have a staggered sales policy.”

VAT element

There is also the value-added tax (VAT) sentiment to check on. Some developers, such as Danube Properties, have

stated they will wait on the next launches until a clear picture emerges on whether potential buyers are likely to

hold back or not. (As such, all residential sales are exempt from VAT, but consumers typically turn over-cautious

whenever a tax element is rolled out.)

“It will be interesting to see if sentiment — and launches — are affected in the first and second quarter of 2018,”

Lakhani said. “Direct developer financing is fuelling off-plan sales. In the ready market for the most part,

developers are still absent and where present, catering to investors rather than end users.”

If new off-plan launches have a subdued first-half, it will give developers with ongoing sales some leeway in trying

to find buyers. And without having to wonder what sort of incentives the new releases will have. Even if indirectly,

VAT will have given Dubai’s property market some sort of a breather.






Offices suddenly turn hot property in Dubai

* Investors spent the last three months of 2017 snapping up strata-titled offices and this way try to pre-empt

having to pay VAT on such transactions. December was the best month for office sales during 2017, with 210

deals being recorded, and ahead of November’s tally of 126. In all, 1,417 office units were sold in Dubai last year

* Business Bay offices were the most sought after with 105 units sold in December

* In 2017, the first quarter was the most busy sales-wise, when a combined 9,145 units (ready and off-plan) being

sold in Dubai. Even though deal flow during November was weak, the fourth quarter of 2017 still managed to see

8,544 units sold

* In value terms, the first quarter of 2017 recorded the highest figure, at Dh13.68 billion, according to GCP-Reidin

data. In second place was the Dh12.73 billion in the third quarter.

Source: Gulf News

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MAG AND AZIZI LEAD PRIVATE DEVELOPERS

IN OFF-PLAN RELEASES Wednesday, January 03, 2018

Dubai’s private developers sure had a good run in 2017, releasing as many as 30,109 units into the market.

Compared to that, government-owned or affiliated master-developers released 13,919 units during the period.

The development arm of MAG Group had the highest set of releases among private developers, with 5,569 units,

according to data issued by GCP-Reidin. Azizi, which had quite a busy second-half in 2017 with two back-to-back

mega-launches, came in second with 4,452 units. Damac was placed third at 4,090 units, with the developer

steady in adding to this buying options at its two master-developments, Damac Hills and Akoya Oxygen (both in

Dubailand).

But at the top of the off-plan pipeline was Emaar, with 9,493 units released in 2017, the GCP-Reidin data notes.

This tally has Emaar account for 22 per cent of Dubai’s overall sales transactions in 2017, while in value terms, it

was 35 per cent.

With Dubai South and MBR City gaining in prominence as investor destinations, this year could see private

developers retaining their edge on off-plan launches. But it will take a lot more time for private players to close

the gap that the master-developers have had historically.

Within the ready space, Emaar and Nakheel accounted for 33 per cent of property sales transacted in 2017. “A

comparison between sales in Emaar and Nakheel ready stock reveals that the former has a higher percentage in

terms of value, whereas the latter is a dominant player in terms of volume,” as per the GCP-Reidin report. “The

core reason for this is due to the composition of their transactional volumes. The bulk of Nakheel’s units has been

in mid-income communities (such as International City, Discovery Gardens and Remraam), whereas Emaar has

concentrated on the upper-end of the spectrum with Downtown and Marina.”

Source: Gulf News

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MAIN CONTRACT AWARDED FOR 800-

ROOM DEIRA ISLANDS RESORT Wednesday, January 03, 2018

Nakheel and Spain’s RIU Hotels & Resorts have awarded the main contract — valued at Dh385 million — for the

construction of an 800-room beachfront resort and water park at Deira Islands.

It will be built by Bin Ladin Contracting Group llc Dubai, which was chosen from a shortlist of 10 contractors who

bid. The project is dues for completion in two years. The total investment value is Dh670 million.

“Our first international joint venture will bring a new dimension to Dubai’s hospitality offering by providing a new

concept in accommodation and attracting a new market segment to the emirate,” said Ali Rashid Lootah,

Nakheel’s Chairman.

The property will offer mid-scale, family-orientated, beachfront accommodation. The resort, RIU’s first in the

Middle East, will be one of Dubai’s biggest in terms of the number of hotel rooms.

“Nakheel has proven to be the best partner for our entry in to the Middle East market, and we hope it is the first

of other projects to come,” said Joan Trian, RIU’s Financial Director. “In fact, this is a great step forward in our long-

term expansion strategy in the Middle East and South East Asia”.

The joint venture is one of 16 projects in Nakheel’s Dh5 billion hospitality expansion programme, under which

some 6,000 new rooms and hotel apartments will be delivered.

Deira Islands, which is expected to have a population of 250,000, will add 40 kilometres of coastline to Dubai.

Source: Gulf News

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DUBAI’S NEW HOMES WILL DECIDE PRICES

AND RENTS Tuesday, January 02, 2018

Even if developers fail to meet their project handover schedules in the next three years, chances of Dubai’s home

prices starting to record sharp gains are marginal. On the contrary, both sales and rentals could remain under

considerable pressure.

In an ideal world, Dubai would see another 140,000-plus homes being completed over the next 24 to 36 months.

But given how developers have fared on keeping their promises, that tally seems remote. As per available

indications, developers could have handed over about 15,000 units in 2017, far removed from the 25,000-30,000

predicted at the start of last year. And even “if the project realisation rate by the developers increases [50 per cent

in three years] that may prevent prices to move upwards and also pressure rentals,” said Ozan Demir, Director of

Operations and Research at the consultancy Reidin.

While tenants will welcome any further declines in rents — and they did drop across the city in 2017 — developers

with upcoming launches may have to confront a quite difficult selling environment. They will be launching at a

time when the market has already seen quite a few of them. In fact, last year was one of the most active for

offplan releases in the last five years. But if they decide to hold back selling to a later date, chances are that others

could come in and pick up whatever buyers are out there. Also, in a VAT regime, developers will need to keep one

eye on the clock — all sales of residential units after three years of a project’s completion will be liable for the tax.

As for potential buyers, they should keep a few pointers in mind. “Check the developer’s reputation and take

location and completion dates into consideration while negotiating price,” said Alexander von Sayn-Wittgenstein,

Luxury Sales Director at Luxhabitat, the estate agent. “As for sellers, the prices are expected to flatten further so

don’t be in a hurry to sell your property just yet. Renting it would be a good option instead.”

Developers on their part should also be looking at cutting corners — literally. Only by dropping the size of the

individual units will they be able to keep prices at an “affordable” range. Some developers are already ahead of

the game in adjusting to this reality. “We have seen this trend already occurring by many developers in locations

such as JVC [Jumeirah Village Circle], Dubai South and Dubailand,” said Mario Volpi, Chief Sales Officer at

Kensington Properties. “Building smaller units will continue as this trend will guarantee the property’s affordability

tag. Buyers or investors will now have to get used to smaller-sized property units when choosing the ‘affordable’

option.”

But there are market sources who worry that cutting down the size may put off end-users from buying. A typical

four-member family might find it extremely difficult to squeeze into a sub-800-square-feet home. They may be

willing to do so if it is rented, but putting up money of their own to buy would give them pause.

Clearly, Dubai’s developers will have some chopping — and adding up — to do in 2018 and beyond.

Developers had a sales bonanza in 2017

In the first nine months of 2017, freehold transactions were up more than 20 per cent over the same period last

year. But compared with the market peaks of 2013-14, the 2017 volumes are still down by a fairly sizable 40 per

cent.

Source: Gulf News

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AMLAK FINANCE COMPLETES RESIDENTIAL

PROJECT AT MIRDIFF Tuesday, January 02, 2018

Amlak Finance has announced the completion of its residential project in Mirdiff. This marks the first time the

mortgage provider has developed a fully-owned property. In all, it features 54 villas. The Dh138-million

development includes 18 land plots with a total built-up area of 180,085 square feet. Each plot consists of three

townhouses with four to five bedrooms, private gardens and parking facilities. “This project further strengthens

our position in the market,” said Arif Al Harmi, Managing Director and CEO, of the Amlak Finance.

Source: Gulf News

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DUBAI HOTELS NEARLY SOLD OUT FOR NYE Thursday, December 28, 2017

If you’re after something extra special and planning to book a hotel in Dubai for New Year’s Eve, you need to act

quickly.

Sources in the industry said that rooms are selling fast, and most of the hotels around the emirate are almost

fully booked and currently running on a 90 per cent occupancy.

Rooms in Downtown Dubai, one of the most popular destinations that attract hundreds of thousands of revellers

every year, are even more difficult to find, with every property in the area now only have one to five empty spaces

left.

Burj Khalifa fireworks

And if you’re hoping to get a room with a Burj Khalifa or fountain view, prepare to be disappointed -- unless you're

willing to spend your whole month's salary or more.

All the rooms with a view of the world’s tallest tower at Emaar-run hotels -- Address Boulevard, Address Dubai

Mall, Palace Downtown, Manzil Downtown and Vida Downtown – are now sold out.

“We don’t have rooms anymore with Burj views. They have long been booked up,” said one staff. “We’re only a few

days before New Year and if you book later, I can’t guarantee there will still be spaces available.”

A spokesperson of Emaar Hospitality Group said that advance bookings for New Year’s Eve, as well as current

occupancy levels, “have been high.”

“There is tremendous interest among visitors on the new and innovative ‘Light up 2018’ Downtown Dubai

spectacle, with visitors coming in from all over the world as well as a strong growth in the number of staycations

by UAE residents,” the spokesperson told Gulf News.“ There have also been strong bookings for New Year’s Eve

get-togethers at our hotels.”

In Ramada Downtown, a hotel apartment that's very close to Burj Khalifa, a source said there are only very few

rooms left and interested guests need to shell out a minimum spend of a little over Dh15,000 to secure a booking

for New Year's Eve.

Ramada Downtown Burj

"We don't accept bookings for 31 December alone and the minimum stay should be three nights. We only have

four rooms left and the one with Burj Khalifa and fountain view is going for more than Dh15,000 for three nights,"

said a staff.

Glenn Nobbs, general manager for Copthorne Hotel in Dubai, said they’re almost reaching full capacity as more

and more guests are coming in from the Gulf region, including UAE, as well as both East and Western Europe.

“Currently, we are about 90 per cent full. Each day we edge closer to being 100 per cent full,” Nobbs told Gulf

News.

“With the anticipated light show at the Burj Khalifa, as well as the number of other amazing events that are

planned across the emirate [there’s been a surge of visitors]. We are also seen as a very safe destination in the

region for many international travellers,” he added. Downtown Dubai will attempt to break the Guinness World

Record on the eve of 2018 with its laser light show. The event is said to be a “never before seen spectacle” that will

again put the global spotlight on the Burj Khalifa tower and also use Downtown’s properties as a canvas.






The celebrations in the area and other neighbouring places have been among the most anticipated, and on New

Year’s Eve, tourists from the world over and residents across the UAE will descend on the emirate.

Emirates said it is expecting 250,000 people arriving into Dubai starting today until New Year’s day. That is more

than a quarter of the total number of flyers passing through Dubai International during the peak travel period.

Emirates passengers pack Dubai airport’s Terminal 3 to get confirmed seats

“Dubai has quickly catapulted into the top five for celebrating New Year festivities with the show at the Burj

Khalifa complimenting all the other ones taking place in various hotels, resorts and the [Dubai Shopping Festival],”

said Premjit Bangara, general manager for travel at Sharaf Travel Services.

“The lovely weather, along with tourists coming to spend their winter break, combined with the above festivities

has contributed to the influx of tourists into Dubai In December.”

With a huge wave of tourists arriving in Dubai for New Year’s Eve, Bangara said it doesn’t come as a surprise that

hotel properties in the city are selling fast.

“A majority of the hotels in Downtown are fully booked for New Year’s Eve, and hotels in other areas of Dubai are

running at 90 per cent occupancy during this period,” Bangara told Gulf News.

“We have seen a surge in bookings during the period starting 20th December to the 6th of January. Most of the

travellers have come in from various points in Europe, India, China and a few other Asian countries.”

Source: Gulf News

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DUBAI DUTY FREE ANNUAL SALES ROSE

5.6% TO DH7.05B Wednesday, January 03, 2018

Dubai Duty Free (DDF) is hailing 2017 as a record year after its annual sales rose 5.6 per cent to Dh7.05 billion.

December saw a new monthly sales record, the firm said on Wednesday, with total sales of Dh801 million. A

three-day sales discount of 25 per cent during the month to mark the firm’s 34th anniversary saw sales of Dh196

million.

Perfumes remained the top-selling category, with annual sales of Dh1.1 billion accounting for 16 per cent of the

firm; s total sales. Liquor and tobacco were the second and third best performing categories, with sales of Dh1.09

billion and Dh690 million respectively — up 2 per cent and 19 per cent.

Executive Vice-Chairman and CEO Colm McLoughlin said in a statement: “We are pleased to announce such a

positive year with 2017 marking our 34th year of business. The entire team at Dubai Duty Free has worked hard

to provide passengers with a first class shopping experience at both Dubai International and Al Maktoum

International.”

During the year, the firm said it recorded a total of 27.2 million sales transactions, an average of 75,000 a day,

with 73 million sales units sold.

Sales of cosmetics rose 17 per cent to a total of Dh626 million. Electronics sales were up 16 per cent to Dh547

million, driven largely by new launches from firms such as Apple, DDF said in a press statement.

Sales of watches were up 13 per cent to Dh518 million, with handbags and small leather items up 16 per cent to

Dh187 million.

DDF said 87 per cent of its sales were made in its shops in Departures, accounting for a total of Dh6.1 billion, with

arrival sales increasing by 3.6 per cent to account for 10.8 per cent of total sales.

During the year the firm opened new sales areas in Concourse C of Dubai International Airport, and a new Bulgari

shop in Concourse B. It also opened new retail areas in Al Maktoum International Airport, and a shop in the

Riverland area of Dubai Parks and Resorts.

Source: Gulf News

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NAKHEEL AWARDS DH385M

CONSTRUCTION CONTRACT FOR

BEACHFRONT RESORT IN DUBAI Wednesday, January 03, 2018

Nakheel, the builder of palm-shaped islands off the coast of Dubai, and Spain’s RIU Hotels & Resorts have

awarded a construction contract for their Dh670 million joint venture beachfront resort and water park at Deira

Islands in Dubai.

The joint venture has signed a Dh385m contract with Bin Ladin Contracting Group in Dubai, which was chosen

from a shortlist of 10 construction firms. The 800-room project, among the biggest in Dubai in terms of hotel

rooms, is set for delivery in 2019, according to a statement on Nakheel’s website.

The latest contract has pushed the value of total infrastructure and construction contracts to almost Dh8 billion at

Deira Islands, with more on the way, Nakheel said without elaborating.

“Our first international joint venture will bring a new dimension to Dubai’s hospitality offering by providing a new

concept in accommodation and attracting a new market segment to the emirate,” Nakheel chairman Ali Rashid

Lootah said. He added that the project at Deira Islands will add to a diverse range of tourism-related projects that

will help the government achieve its 2020 tourism target of attracting 20 million visitors to the emirate.

Developers in Dubai, which is preparing to host the World Expo in 2020, are pushing ahead with hospitality

projects to accommodate the influx of visitors in the emirate for the mega event. Nakheel’s joint venture

development is one of 16 projects in Nakheel’s Dh5bn hospitality expansion programme, under which some 6,000

new rooms and hotel apartments will be delivered across Dubai in line with the government's tourism vision.

The JV is the first project for RIU in the region. The company has almost 100 hotels with around 45,000 rooms in

19 countries, and will deliver a new hospitality concept for Dubai, offering mid-scale, family-orientated, beachfront

accommodation. The project is located close to the Deira Central, Nakheel’s mixed-use community with the

upcoming Deira Mall as its centrepiece.

“This is a great step forward in our long-term expansion strategy in the Middle East and South East Asia,” Joan

Trian, RIU’s financial director said.

Deira Islands, which is expected to have a population of 250,000 and to create 80,000 jobs when completed, will

add 40 kilometres of coastline to Dubai.


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DUBAI'S JVC THE 'MOST AFFORDABLE VILLA

COMMUNITY' OF 2017 Sunday, December 31, 2017

Dubai’s Jumeirah Village Circle (JVC) district took the accolade of being the most affordable villa community for

home buyers and was one of two villa developments in the emirate that saw prices rise in 2017 as the number of

UAE residents opting to buy properties rose , according to a new report.

Sales prices in JVC were up 4 per cent between April and October and was among the top searches on real estate

listing portal Propertyfinder. Prices for villas in JVC averaged Dh758 per square foot.

“Long-term residents are taking advantage, snapping up good deals, planting roots, and swapping their rent

cheques for a mortgage,” says Lukman Hajje, the chief commercial officer of Propertyfinder Group. “Few global

cities offer the opportunity to buy a well-built four bedroom free-standing villa in a prime location on a decent

sized block for under US$1.2 million.”

Dubai property sales have slowed over the past year as an increasing supply of new units, a slowdown in the

economy and subsequent job cuts dented demand. Developers in Dubai are expected to deliver 80,000 units by

the end of 2019 and a portion of the new inventory coming to the market caters to the middle-income segment,

according to a third quarter Dubai property report from broker JLL Mena.

Sales prices of villas in the third quarter of this year recorded a 1.1 per cent year-on-year fall, according to JLL,

while those of apartments declined 1.6 per cent from the same period in 2016.

Propertyfinder said that the buying decision last year were influenced by increasing affordability, flexible payment

plans on mortgages, and the popular belief that prices are near the bottom.

Prices in Al Barsha district -- the second area to see a price rise -- went up 0.6 per cent. It received its highest-ever

number of inquiries on listings in September, as handovers rose,Propertyfinder said.

Dubai Land was the second most affordable area in Dubai to buy a villa in 2017, with prices averaging Dh845 per

square foot, according to Propertyfinder. It also had one of the highest overall rates of handovers in the UAE last

year, with around 2,500 units delivered to the market.

However, the villa sales prices as a whole in Dubai declined significantly between April and September, with rates

at The Meadows community dropping by 9.3 per cent, Dubai Land by 8.2 per cent, Al Furjan by 8.1 per cent and

Jumeirah Islands by 7.1 per cent, Propertyfinder said in a report released in December.

The portal does not expect hand over of properties to new homebuyers and mortgage-payers to slow down in

2018, but warned about deceptive payment plans.

“Far better regulation now exists to ensure that payments are linked to construction milestones and that buyer

funds are held securely in escrow,” said Mr Hajje. “But a few of these too good to be true payment plans may

prove to be just that.”

Middle-market properties were the only price category of the Dubai residential market for which online searches

on UAE marketplace dubizzle.com rose this year, indicating continued growth in demand for affordable housing

amid flat market conditions and increasing supply. The searches on dubizzle.com for mid-market properties –

cheaper than Dh1,000 per square foot – accounted for 66 per cent of all property searches on the platform in






September 2017, up from 42 per cent in September 2016, according to dubizzle.com and property consultancy

JLL’s End of Year Property Report focusing on the Dubai residential market released in November.

Mid-market properties accounted for 57 per cent of all property advertisements on dubizzle.com during the

month, compared to 52 per cent last September, the report added.

In stark comparison, the proportion of searches for properties in the Dh1,000-1,500/sq ft bracket dropped by 13

per cent over the year and 3 per cent for the Dh1,500-2,000/sq ft bracket, with the proportion of listings also

dropping for these brackets, by 1 per cent each.


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TWELVE KEY FACTORS THAT CAN IMPACT

DUBAI REALTY IN 2018 Sunday, December 31, 2017

The rise in Brent crude to $60 a barrel and the trade volume ballast generated by the world's first post-Lehman

synchronised economic recovery is hugely positive for UAE economic growth in 2018. After all, the UAE is unique

because Abu Dhabi's 100 billion barrels of proven oil reserves is complemented by Dubai's role as the Gulf's

financial, logistics, aviation, shopping and services hub.

The UAE growth delta is unquestionably positive and GDP growth can well double to three per cent next year. The

10 per cent fall in the US Dollar Index has also historically been a reflationary tailwind for the UAE property

markets. I also expect a counter-cyclical, expansionary federal budget to offset dismal private consumer spending

and the protracted banking credit crunch. Ceteris paribus, higher government spending, faster payment of

contractor debt and a new public sector liquidity cycle/fiscal stimulus has had a 'trickle up' impact on local

property markets.

Unfortunately, benign macro factors will not offset those that caused rents and capital values to fall sharply since

2014. Why?

One, corporate consolidation (think NBAD-First Gulf Bank, Ipic-Mubadala), the sharp downturn in global aviation,

the oil and gas capex slump, the epic plunge in retail sales (Amazon is the Evil Empire for shopping malls) and the

sheer unaffordability of high-end private education and healthcare has led to tens of thousands of executive job

losses.

Two, the Federal Reserve's easy money era ended in 2017. The American central bank will shrink its balance sheet

by $270 billion and raise interest rate give times in 2018. This means three month Emirate Interbank Offered Rate

(Eibor), the benchmark for consumer loans and home mortgages in the UAE, could well rise by another 150 basis

points in 2018. This is hugely negative for a home mortgage market entirely dependent on floating rate bank

debt.

Three, the introduction of the value added tax (VAT) at a time of flat consumer and business spending is negative

for sentiment and private consumption. This will cast a big chill on demand for new home and office spaces in

2018.

Four, despite the significant fall in home prices since 2014, affordability metrics relative to average income are far

too high even now. Note that the only active villa market is the Dh2-3 million owner - occupier segment.

Five, the luxury sector was dependent on offshore buyers that has been devastated by such events as the

collapse/devaluation of the Russian rouble, Egyptian pound, Nigerian naira, Modi's rupee reform and Middle East

crisis etc. This explains the 50 per cent fall in transaction volume since 2014. Luxury home prices will continue to

fall sharply in 2018 and 2019.

Six, not even "prime" areas such as Downtown and Palm Jumeirah have been immune to the market malaise. Burj

Khalifa prices are now trading 70 per cent below their Dh11,000 a square foot peak but still only generate only

two per cent (after service fees) return for investors. This is not market equilibrium.

Seven, pockets of value have emerged in the multiple micro-markets that constitute Dubai real estate. Land prices

in International City offer value after a 30 per cent fall. It is possible to negotiate a labour accommodation deal at

a 12 per cent net yield for the cognoscenti Al Quoz.






Eight, the slower economic growth in Saudi Arabia, the Qatar embargo and the plunge in petrocurrency revenues

in Kuwait and Oman have led to a fall in GCC tourists and home buyers. The political uncertainty in Pakistan,

Britain and India has also hit demand from these three key feeder nations.

Nine, 40 per cent vacancy rates in Business Bay, the 25 per cent fall in Jebel Ali Grade A warehouse rents, the

plunge in high-end school enrollments and falls in hotel revenue per available room (Revpar) metrics mean that

the commercial property sector is still stressed, though could stabilise with higher GDP growth in 2018.

Ten, price trend divergence across specific Dubai micro-markets will widen in 2018. Investors should avoid retail

brokers selling seven per cent fee offplan "deals" and do their own due diligence via credible law firms. Avoid

marginal, non-transparent, hard selling, undercapitalised, ethically challenged private developers like the plague.

Eleven, take advantage of Expo 2020 projects and the new transport infrastructure in Dubai South. Remember,

price is what you pay. Value is what you get. Oscar Wilde was so right. A man who knows the price of everything

(Broker Bro! Dalal Bhai!) knows the value of nothing.

Twelve, monitor rental trends, divergence between prime and secondary markets, interest rates, and banking

loan growth in real time. Dubai remains the most vibrant, futuristic, networked, cosmopolitan city in the Arab

world, a magnet for our best and brightest.


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FIXIT APP AIMS TO HELP DUBAI TENANTS

RESOLVE URGENT PROBLEMS Wednesday, January 03, 2018

A Dubai-based real estate broker has devised a new property management system which will give tenants an

instant communication channel to resolve urgent maintenance problems.

The system, conceived by fäm Properties in Dubai will transform the way real estate agents and landlords

communicate and help tenants resolve issues quickly and more efficiently, its designers said.

Tenants, often frustrated by delayed response to urgent maintenance problems, will be able to use the system to

resolve domestic issues like AC breakdowns, plumbing leaks and electrical failures.

fäm Properties said in a statement that it will also give landlords peace of mind by delivering real time condition

reports, budget forecasting and showing actual return on investment (ROI) for individual properties.

“The objective is to take property management services to a new level, using technology to make it much faster,

easier and more effective for real estate agents, landlords and tenants to talk to each other,” said Firas Al Msaddi,

CEO of fäm Properties.

“This is another first for the Dubai property market, and we feel it’s particularly important in the current economic

climate to adopt an innovative approach to real estate overall.”

He added that he believes the new property management offering will help dispel negative attitudes towards real

estate agents in the UAE market.

It comprises an Oracle-based customer relationship management (CRM) system linked to an Android and iOS app,

both developed by the company’s in-house tech design team.

The bespoke online platform, which can be individually tailored, considers maintenance fees, service charges,

incoming rent and all other financial aspects to calculate actual ROI for landlords.

By using the new Fixit app, which is linked to the online CRM platform, to upload information and images, tenants

can instantly can bring urgent maintenance issues to the immediate attention of landlords and agents.

Ahmed Abou El Naga, director of Asset Management for fäm Properties, said: “This instantly puts the problem

into perspective and results in faster solutions.

“That’s vital for tenants who may be left without AC during the hot summer months or need prompt action to fix

leaks.”

The obvious benefits of the app for the tenants are expected to boost occupancy rates for managed units,

increasing profitability for landlords in the process, he added.

Source: Arabian Business

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DUBAI RENTERS STARTED TO BUY IN 2017 Wednesday, January 03, 2018

The last 12 months have Dubai residents switch their rental contracts for mortgages, according to a new report

from Propertyfinder Group.

Attracted by improved affordability in a real estate market that has consolidated over the last two years, as well as

more generous payment plans from developers, residents have decided in increasing numbers to snap up

properties in the likes of Jumeirah Village Circle, Dubai Land and Al Barsha.

Such is the popularity of places of Jumeirah Village Circle in 2017 that it was one of the few districts in Dubai that

experienced a rise in asking prices, with a 4 percent uptick over the previous year. Propertyfinder also reported a

doubling of the number of viewings and enquiries in the area. It still, however, remains one of Dubai’s most

affordable villa communities, with prices remaining around AED758 per square foot.

Dubai Land, which has experienced a surge in villa completions in 2017, helped the area enjoy a high rate of

handovers as 2,500 units were brought to market. It also remains the second-best value prices for villas, with

prices remaining about the AED845 per square foot mark.

“Long-term residents are taking advantage, snapping up good deals, planting roots, and swapping their rent

cheques for a mortgage,” says Lukman Hajje, chief commercial officer of Propertyfinder Group.

“Few global cities offer the opportunity to buy a well-built four bedroom free-standing villa in prime location on a

decent sized block for under $1.2 million. Try doing that in London, Sydney, New York, Paris, or Geneva. Good

luck.”

According to chartered surveyors Cavendish Maxwell, residential property transaction prices have traded within a

close range of AED1.25 million-AED1.5 million for apartments and AED1.7 million-AED2.1 million for villas.

Source: Arabian Business

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NOTE TO SERIOUS PROPERTY SELLERS:

KEEP IT REAL Tuesday, January 02, 2018

Property sellers in Dubai are having a relatively tough time finding buyers for their units since they are competing

with overgenerous developers who are luring customers with affordable prices, extended payment plans, DLD fee

discounts/waivers and special offers for their off-plan units. No wonder then that off-plan was responsible for a

major chunk of property transactions in 2017. Suffice to say that off-plan cannibalised the secondary market in

Dubai last year.

"Over the last couple of years, money flows have become skewed towards off-plan developments in the ratio of

2:1, which historically has been 1:1. A year-on-year [January-November] comparison of activity reveals a 35 per

cent increase in transactions [ready and off-plan]. However, the bulk of the increase can be attributed to the off-

plan market with a 64 per cent rise, while the ready market incurred a marginal increase of three per cent. The

combination of lower prices, extended payment plans and entry into developing areas has forced investors to

take opportunistic bets in the off-plan market compared to the plain vanilla options in the ready space," says

Hussain Alladin, head of IR and research at Global Capital Partners.

An interesting trend to note is that while investors typically opt for off-plan properties, end-users are increasingly

getting into this space as well.

"End-users are entering this market and are prepared to wait for the properties. That being said, there is a lot a

secondary market unit can offer that an off-plan one can't. If a seller is serious to sell, there are buyers out there

and still a lot of transactions happening. Following the activity in Q4 2017, I expect the secondary market to do

well in 2018," explains Lewis Allsopp, CEO, Allsopp & Allsopp.

Market commentators cite several instances where sellers are getting offers nowhere near their asking prices.

According to GCP, there is a 11 per cent differential between transacted and listed prices on a city-wide scale. This

mostly implies that sellers have not adjusted prices.

"It all depends what price a property comes to the market at. What we try to do before a property comes to the

market is to discuss with the owner the current market, recent transactions, trends, competition, etc., and bring

the property to the market at a price which will be attractive enough to gain interest and give a small space for

negotiation. Ultimately, if a seller has to give a big discount, then they have brought the property to the market at

an incorrect pricing level in the first place," observes Allsopp.

However, there have been transactions taking place in the secondary market and a rise in mortgage activity in this

space as well. This implies that more tenants could be taking up mortgages to turn into owner-occupiers. "The

continued fall in city-wide ready prices, although green shoots have begun to appear in certain communities, will

lessen the gap between ready and off-plan prices, causing investors to refocus their intentions in scouting value in

the ready market. A trend we believe will play out over the next couple of years, causing the ratio of sales

between ready to off-plan to mean revert to its historical averages," adds Alladin.

Sellers are being advised to be patient if they wish to capitalise on the upswing that could be on the horizon. "An

increase in government spending, a rise in oil prices and the catalyst of the World Expo 2020 sets the stage for an

economic boom in the coming years," reckons Alladin. Although off-plan holds appeal owing to the newness of

the product and attractive payment plans, a secondary market unit too has a lot of advantages.






"It is ready to move into, most of the time is in an established community, it's financeable up to the central bank

regulations, which depending on the sales price can be up to 75 per cent LTV [an off-plan unit is 50 per cent], and

you can actually see what you are buying. Secondary market buyers are mostly people who are currently renting

and looking to get onto the property ladder, people living with family and looking to buy their first home and

there are also plenty of clients who want to either up or downsize," informs Allsopp.

Sellers will do well to keep the property they wish to sell vacant. This is one of the primary things a buyer will look

for once they have decided on the right property type and area.

"If an owner has their property rented out, this can be a difficult proposition for them as they will have to cover

the mortgage while the property is vacant, but the overwhelming fact is that a vacant on transfer property sells

quicker and for a higher price, so it's worth the short-term pain. If it's not vacant, then there should be a vacation

notice in place, so there is a definite timeframe for the tenants leaving. After this, it's just the usual - make sure

the property is well-presented, de-cluttered, etc., and make sure it's always available for viewings," suggests

Allsopp.

According to Allsopp & Allsopp, the average sales price in Dubai last year was just over Dh2.5 million. Properties

listed in the secondary market in the price range of Dh1 million saw the greatest sales activity.

Source: Gulf News

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FURTHER DROP IN RENTALS EXPECTED IN

ABU DHABI Thursday, January 04, 2018

Abu Dhabi residential market will continue to see further drops in rentals in 2018 but the reduction is not

expected to be at the same pace as in 2017, experts told Gulf News.

“We will see a further fall in rentals of between 4 per cent and 7 per cent this year,” said Andrew Ausama,

associate director of Core Savills consultancy in Abu Dhabi.

He said developers of residential units could withhold stock or delay development of new buildings due to the

trend.

“Landlord investors who have leveraged their assets may have increased pressure to avoid vacancy of their assets

and are encouraged to reduce rents and offer attractive payment terms of six to 12 cheques per year.”

Abu Dhabi rentals: 2018

• 1-bedroom: might go down from Dh70,000 currently to Dh60,000 in Reem Island and from Dh60,000 to

Dh50,000 in downtown Abu Dhabi.

• 2-bedroom: will be available for as less as Dh60,000 per annum downtown Abu Dhabi.

• Al Reem Island: 12% to 14% drop

• Al Raha Beach: 9-11% drop

• Khalidiya: 8 to 9% drop

• Khalifa City A: 5 to 7% drop (Over the last 12 months)

Property consultancy Asteco in a recent report said that average apartment rental rates dropped by 3 per cent

over the third quarter in 2017 and by 10 per cent during the past 12 months, with the highest rate of decline

recorded for mid-end properties and large units within prime and high-end projects.

Tahir Mahmoud, sales executive, Abu Dhabi-based Foot Print real estate, also expects further pressure on rental

rates in 2018.

“We expect at least 6,000 units to be ready in Reem Island alone,” said Mahmoud.

Giving a breakdown of expected reductions this year, he said a one-bedroom flat might go down from Dh70,000

to Dh60,000 in Reem Island and from Dh60,000 to Dh50,000 in downtown Abu Dhabi.

Two-bedroom flats will be available for Dh60,000 per annum in downtown in Abu Dhabi.

“There has been a reduction in rents across Abu Dhabi. We are expecting this trend to continue this year too. VAT

(Value Added Tax) too will have an impact though not directly as the tax is not applied to residential rents.”

Lack of parking spaces in downtown Abu Dhabi is also likely to impact rents as residents will opt for places such

as Shahama or Mohammad Bin Zayed City on the outskirts which offer a plenty of parking.

Source: Gulf News

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DSCD TO PROVIDE UNIFIED DATABASE IN

SHARJAH Wednesday, January 03, 2018

Sharjah Department of Statistics and Community Development (DSCD) data and information sharing platform —

Tabadol (exchange) — to enhance communication and statistical gathering systems in the emirate.

The initiative was rolled out in collaboration with six local government departments to design an intelligent

digitised tool that will support the collection and seamless exchange of administrative data — all fed into this

unified statistical system accessible to every state directorate and government entity in the emirate. Tabadol will

also guide state entities to adopt best international practices in data exchange and protection, and function as a

constantly updated reference of indicators and statistics about the emirate.

Source: Gulf News

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MOODY’S RATING TO BOOST INVESTMENTS

INTO SHARJAH Wednesday, January 03, 2018

The recent Moody’s rating for Sharjah will impact positively on the emirate’s business environment as well help in

attracting investments, according to the chairman of Sharjah Economic Development Department (SEDD).

Sharjah’s rating of A3 by Moody’s Investors Service is based on the increased government revenue, stability of the

budget indicators and high gross domestic product (GDP) per capita, Sultan Abdullah Bin Hadda Al Suwaidi said in

a statement on Wednesday.

Sharjah’s GDP is close to Dh90 billion and has witnessed an average growth of 12.6 per cent over the past five

years contributing to the increase in cash flow, according to the SEDD statement.

The GDP growth was due to the development of travel and tourism and the increase of 2 per cent in revenues in

2016, and the 3.8 per cent increase in fixed capital formation with continuous growth of the economic sectors in

2016, especially in the fields of manufacturing by 10 per cent.

It was also affected by increase in investments in infrastructure, information and communications, education,

among other things.

“The latest classification by Moody’s demonstrates that Sharjah’s economy blends diversity, efficiency, and

contributes to enhance confidence for existing investors and open up prospects for more investors in the future,”

Al Suwaidi stated.

Moody’s expects real GDP to grow by 2.7 per cent annually in 2018 and 2019, driven by higher commercial and

tourism activity in the emirate, as per SEED statement.

Impact of VAT

Al Suwaidi clarified that the introduction of value-added tax (VAT) will not affect or change the status of Sharjah as

a regional centre of business and the competitive advantages it provides for business, both in terms of location,

ease of export and import, or in terms of the development of infrastructure and legislation.

He also pointed out that Sharjah’s economy continues to increase its services and to strive for smart services to

improve the business environment and investor satisfaction.

Project launches

Sharjah launched various projects in the last two years to boost the economy including the development of Souq

Al Jubail, the establishment of Souq Al Haraj, the development of Tilal City and Heart of Sharjah, in addition to

spending on cultural events such as Sharjah Biennial and Sharjah Heritage Days.

According to Al Suwaidi, the launch of new projects demonstrates the great diversity of vision in Sharjah and also

reflects the ability to invest and generate revenues in sectors where Sharjah has a competitive edge.

Source: Gulf News

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SHARJAH RENTS: 12% DROP FROM 2016 Thursday, January 04, 2018

Residential rents in Sharjah took the biggest fall in the Northern Emirates, sliding 12 per cent on average since the

third quarter of 2016, according to new research.

A main reason for the softening of rents in the Northern Emirates was the increased supply of affordable

properties in Dubai, said the UAE Real Estate Report Q3 2017 by Asteco, a leading Dubai-based real estate

services company.

Rents in Dubai affect bordering Sharjah, where rents are much lower, on average.

It appears that Sharjah tenants, for the most part, are staying put amid falling rents across the country.

While some are taking advantage of lower rents by moving to relatively inexpensive suburban areas of Dubai, the

majority of Sharjah apartment tenants like where they are, John Stevens, managing director of Asteco, told Gulf

News.

His comments echo the Q3 report, which shows that even though average rents fell 13 per cent in the most

affordable areas, of both Dubai and Sharjah from Q3 2016 to Q3 2017, the difference in the actual amounts is

clear.

Trendspotting in Sharjah

Average annual rent for two-bedroom apartments in Al Wahda ranged for just Dh25,000 to Dh28,000 in Q3.

For example, the report shows that two-bedroom flats in Dubai’s International City, widely regarded as one of

Dubai’s most affordable areas, cost Dh50,000 to Dh70,000 in average annual rent — a 13 per cent decrease on Q3

2016.

However, those rates, when compared to Sharjah’s affordable Al Wahda area (where rents also dipped 13 per

cent on average), are still expensive — double or more. Average annual rent for two-bedroom apartments in Al

Wahda ranged from Dh25,000 to Dh28,000 in Q3.

Some Sharjah tenants told Gulf News that rents in Dubai are still out of their reach.

Compared to occupancy rates of up to 40 per cent during 2008, occupancy rates today in Sharjah have climbed

well past 80 per cent, he added.

One of the biggest factors in Sharjah retaining its tenants is a better understanding by landlords of an evolving

market, Stevens said. “Landlords in Sharjah are being more flexible with tenants.”

Source: Gulf News

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SAN FRANCISCO GETS BACK ITS TALL

TOWER BEARINGS Wednesday, January 03, 2018

The skyscraper came late to the city, a shipping and manufacturing hub for much of its existence. The wealthy

roosted on the hills, and the masses toiled on the flats and the docks. Everyone lived close to the ground in a

setting renowned for its natural beauty.

Now the things being shipped are virtual, and vast amounts of office space are needed to design, build and

market them. Salesforce, a company that did not exist 20 years ago, will take up residence on January 8 in the new

Salesforce Tower, which at 1,070 feet is the tallest office building west of the Mississippi.

In Silicon Valley, the office parks blend into the landscape. They might have made their workers exceedingly rich,

they might have changed the world — whether for better or worse is currently up for debate — but there is

nothing about them that says: We are a big deal.

Skyscrapers tell a different story. They are the pyramids of our civilisation, permanent monuments of our

existence. They show who is in charge and what they think about themselves. Salesforce Tower is breaking a San

Francisco height record that stood for nearly half a century.

“A ceiling has been breached,” said Alison Isenberg, a professor of urban history at Princeton University. “Now the

discussion becomes, “Is this just a building that is taller than the ones we already had” or does it raise new

questions about the nature of the city?”

Salesforce Tower is visible from just about everywhere. Go to the farthest edges of the city, and its 61 storeys of

tapered steel and glass stick up like a forceful thumb. On the drive north from the airport, the tower is the one

building discernible over Potrero Hill.

From the distant North Bay, it is the first thing you notice as San Francisco sheds its customary morning fog. The

building catches the morning sun, dazzling the way none of its lesser neighbours do.

The tower is not beautiful, but is impossible to ignore. The top floors are set off from the rest, and the crown is

flat rather than a spire. It looks as if a rocket were stowed up there, an escape vehicle for the tech overlords when

the city is consumed by disaster.

It will have to be a big rocket, because there are so many overlords. While few were looking, tech ate San

Francisco. There are now 79,129 high-tech jobs in the city, about triple the number a decade ago, according to a

new research report from the real estate firm CBRE.

If you work in an office in the city, there is a 28 per cent chance you work in tech. That level is exceeded only by

Seattle, where the sharp growth of Amazon pushed the percentage of tech workers up to 38 per cent, and by

Silicon Valley itself, where it is 42 per cent.

“San Francisco has gone from being driven by multitudes of industries in 2007 to being now focused largely on

tech,” said Colin Yasukochi, a CBRE analyst. “The growth feeds on itself. Tech workers are attracted to the great

opportunities in the city, and the supply of workers means more tech companies come here.”

The website for Salesforce Tower makes a point of noting the other tech companies nearby — Yelp, Amazon,

eBay, Intuit. Meanwhile, non-tech companies are slimming down and looking elsewhere. Charles Schwab, the

financial services firm founded in San Francisco in 1971, just built a 5,000-employee campus in Texas.






Within Salesforce Tower’s shadow, a more slender, 802-foot building is also just coming to completion. It will

house thousands of Facebook employees; there are condos for sale as well. The penthouse is available for a

reported $42 million, offering a well-heeled mogul the chance to make a splashy statement.

San Francisco has always been like this. There were so few skyscrapers in the city’s first century that the ones that

were built tell a tale of rampant egos and unrestrained power. At the end of the 19th century, the city’s

newspapers had hubris and wealth to rival today’s internet companies.

In 1890, the owner of the ‘San Francisco Chronicle’, M.H. de Young, erected a 10-storey building worthy of his

publication. It was the tallest building on the West Coast.

That irked the new owners of ‘The Call’ newspaper, the Spreckels family, who in 1895 commissioned a tower of

their own mere feet from the Chronicle building. It would be more than half again as tall — 18 storeys — and

would be, they promised, “the finest building ever erected for a newspaper office”. It had a 60-foot terra cotta

Baroque dome, four corner cupolas and spectacular flourishes.

If Salesforce executives ever get too full of themselves, they can seek out the Call building.

In 1938, the dome was removed, and the remains were stripped of all architectural splendour. The building —

whose high-tech tenants include a venture capitalist and a DNA sequencing start-up — is getting a facelift, but its

past glory is gone for good.

As for The Call itself, the paper disappeared many decades ago, leaving no trace.

Source: Gulf News

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US HOUSE PRICES LIKELY TO SLOW DOWN

AS TAX BILL RESHAPES ECONOMY,

ANALYSTS SAY Monday, January 01, 2018

The steady increase in housing prices in many of the nation’s priciest markets, including the Washington region, is

expected to slow in coming years, analysts say, as the Republican tax law begins to reshape a major part of the US

economy.

For generations, the tax code has subsidised home ownership, particularly for people in the upper-middle class

and beyond. The Republican tax legislation, however, pushed in the opposite direction, scaling back subsidies

once thought untouchable.

To pay for other tax cuts benefiting individuals and corporations, the GOP tax plan trims the mortgage interest

deduction and property tax deduction, which combined allow some homeowners to take tens of thousands of

dollars off their taxable income.

The law allows interest to be deducted on mortgages only worth up to $750,000, instead of the previously existing

$1 million limit (people who got loans before December 15 are grandfathered into the $1 million limit). It also put

a $10,000 cap on the amount of state and local taxes, including property taxes, that can be deducted from the

federal return.

Economists and housing experts broadly agree the changes will slow price increases in expensive housing

markets — though nobody expects housing values to decline, given the overall strength of the economy and the

fact that there are relatively few houses for sale in top markets.

Still, experts are debating who wins and loses from the changes, and the reality may turn as much on perception

as on the fundamental economics.

Bonnie Casper, a real estate agent with Long & Foster in Bethesda, Maryland, says the new rules will put a lot of

prospective home buyers in wait-and-see mode, which could prompt a slowdown in the market.

“If they’re not going to have a tax benefit, maybe they’ll go rent and not buy,” Casper said. The tax overhaul “could

hinder first-time buyers in particular, and then have a cascading effect.”

Edward Pinto, a housing expert at the American Enterprise Institute, says lower housing prices will prove

attractive to first-time home buyers who might have felt exasperated by the rapid increase in home values in

recent years. “Existing homeowners have benefited from that on the backs of first-time home buyers,” Pinto said.

Housing prices have been increasing by about 6 per cent a year over the past five years nationally, according to

the Standard & Poor’s/Case-Shiller index. Economists now expect these areas to see some slowdown in coming

years, particularly in pricier regions like the Northeast Corridor, parts of the West Coast and Florida, and a

number of Midwestern cities.

Mark Zandi, chief economist at Moody’s Analytics, a research firm, estimates that in the New York metropolitan

region, some counties could see prices 10 per cent below where they would have been without the tax bill by the

summer of 2019. The median US county will see a decline of 0.8 per cent, he predicted.






“House prices suffer under the tax plan,” Zandi wrote in a recent analysis. “The impact on house prices is much

greater for higher-priced homes, especially in parts of the country where incomes are higher and there are thus a

disproportionate number of itemises, and where homeowners have big mortgages and property tax bills.”

According to Moody’s analysis, home prices could deflate by 2 per cent in the District of Columbia, 2.5 per cent in

Montgomery County and 2.3 per cent in Arlington County. Loudoun County is most affected in the region, with a

projected 2.6 per cent decline in prices relative to where they would have been.

By way of example, if the price of a $500,000 home in the District would have risen to $525,000 by the summer of

2019, under the new law it will only go up to $515,000, assuming a 3 per cent rather than 5 per cent increase.

“The biggest impact is probably the psychological impact on buyers,” said Lindsay Reishman, a senior vice

president with the real estate firm Compass. “We might see fewer transactions, a little less activity for a while.”

ATTOM Data Solutions, a real estate data and analytics firm, found that the District, Maryland and Virginia are

among the 15 jurisdictions with the highest percentage of mortgages above $750,000 this year.

According to its data, the District had the most nationwide, with just less than 17 per cent. Maryland and Virginia

came in at 3 per cent. Those figures understate how prevalent high prices are in the wealthier parts of the states.

Two jurisdictions within Virginia had the highest percentage of loans above that threshold; 27 per cent of the

homes in Falls Church and 20 per cent of the homes in Arlington sold for more than $750,000 year.

The new law’s effect on property taxes will affect more than 90,000 homeowners in the Washington region,

according to ATTOM. Alexandria and Arlington in Virginia have the greatest percentage of homeowners with

property taxes north of $10,000, 12 per cent and 10 per cent respectively.

In general, economists say, the tax breaks have tended to boost the price of homes in the past because they

effectively make it cheaper to afford a bigger mortgage and a bigger house, which homeowners then factor into

their sales prices.

To Pinto and some housing experts, Congress’ decision to take a few steps back from subsidising home

ownership is welcome news after years of government advocacy of home ownership. Some blame that housing

enthusiasm for being one of the forces, among many others, that led to the housing collapse and Great Recession

in 2007-08.

This decade, housing companies have been far more cautious about building homes, leading to price increases,

and the Census home ownership rate has fallen from a peak of 69.2 per cent at the end of 2004 to 63.9 per cent

as of Sept. 30.

A report by the housing website Zillow has found that 44 per cent of homes are worth enough that it makes sense

for a homeowner to itemise deductions. Under the new law, the percentage drops to 14.4 per cent.

Beyond tweaking the mortgage interest deduction and state and local tax deduction, the GOP tax bill also doubles

the size of the standard deduction to $24,000 for a married couple. Taxpayers have the option of taking itemised

deductions or the standard deduction.

In the past, the value of the housing deductions may have nudged people into buying homes even when they

have been happier renting, Pinto said. Now people have more options.

“They get to make a choice about how to spend their money,” he said.

Others argue that reducing public support for home ownership could have broad social consequences.

“This is one of the shortcomings of the tax bill. Ordinarily, you want there to be ownership, especially of real

estate,” said Greg Smith, a certified financial planner at the Wise Investor Group at Baird. “There is a civic good

that comes from owning rather than renting.”






Still, Smith says home buyers and homeowners should not get carried away with calculations over the impact of

the tax bill.

“It’s easy to be short-term oriented,” he said. “If you’re buying a house, hopefully you’re buying a house because

you’re going to be there for at least five years, and a lot can happen in five years.”

Source: Gulf News

Back to Index






WHICH CURRENCY WILL COME OUT ON

TOP IN 2018? Wednesday, January 03, 2018

The world’s currencies are on an endless roller-coaster ride, their relative values constantly rising and falling in

relation to each other, with the occasional stomach-churning drop.

Last year, it was the turn of the US dollar to hurtle downwards, as UAE expats earning dollar-pegged dirhams

know to their cost.

The dollar suffered its worst year in a decade, hitting UAE residents with financial commitments in foreign

currencies, as their earnings do not travel as far as they did a year ago.

The two big winners of 2017 were the euro, which outpaced almost every other major currency, and the British

pound, which was the year’s surprise package, making a partial recovery from the traumatic post-Brexit crash in

2016.

The Japanese yen weakened against most major currencies, while the Chinese yuan and Russian rouble also

slipped.

So what does 2018 have in store? Will the dollar surge race back into contention? Will the euro continue to lead

the pack? Most intriguingly, what is going to happen to bitcoin, the raciest currency of all?

US dollar

2017 was a bad year for the dollar, which fell about 12 per cent against the euro to end the year trading at around

US$1.20.

It was a similar story with the British pound, with the dollar weakening around 8 per cent to close the year at

around $1.35, and also falling against everything from the Mexican peso to Swedish krona.

Some saw this as a sign that US economic might is fading, especially with the IMF downgrading its 2018 growth

forecast from 2.5 per cent to 2.1 per cent, well below the 3 per cent targeted by the White House.

However, David Hillier, a currency expert at global transfer service Moneycorp, now expects the US dollar to

rebound this year, as president Donald Trump’s move to slash corporate tax from 35 per cent right down to 20

per cent inspires US companies to repatriate trillions of dollars held overseas.

“This will heighten demand for the dollar, increase domestic investment and strengthen the economy, all of which

should boost the greenback,” he says.

Sheridan Admans, investment manager at The Share Centre, predicts a strong year for the US economy and dollar

as Mr Trump’s tax reforms boost company earnings. “This may force new Federal Reserve chair Jerome Powell to

raise rates more aggressively than the market expects, and higher interest rates will lift the dollar,” he says. After

a tricky couple of years, dollar and dirham earners could finally get some respite.

The euro

While the dollar may fight back against many global currencies in 2017 it could struggle to recover lost ground

against the buoyant European single currency. Mr Hillier sees another positive year for the euro. “Political

instability in Italy and Germany is easing and economic growth has strengthened across the eurozone, while

recent free trade agreements with Canada and Japan should also help.”






The single currency should receive a further boost if the European Central Bank starts to unwind its €1 trillion

($1.2tn) monetary stimulus package as expected, Professor Hillier adds.

Charles Purdy, chief executive of Smart Currency Exchange, suggests the euro could dip against sterling if there is

progress in signing a post-Brexit trade deal with the UK. “However, political risk in the eurozone is now falling in

stark contrast to the politically-charged atmosphere in the UK, so the euro should remain strong.”

Sterling

The British pound collapsed by 17 per cent after the shock EU referendum result in 2016 but fought back strongly

against the dollar and other global currencies, although, it fell another 3 per cent against the euro.

Mr Hillier expects current uncertainty to ease as EU trade talks progress. “Sterling could be one of the strongest

performers over the next 12 months, along with the Japanese yen,” he says.

Mr Purdy is also bullish on the pound, especially if domestic wage growth picks up and inflation falls, ending the

current squeeze on consumers. “If this encourages the Bank of England to increase interest rates again, that

should also help sterling,” he says.

Joel Kruger, market research analyst at LMAX Exchange, puts his neck on the line and predicts the pound will be

the big winner in 2018. “Sterling is in a wonderful position to outperform as progress on Brexit is made, worst

case scenarios are dismissed and the economic outlook improves,” he says.

However, sterling is walking a tightrope and if EU negotiations go badly it could plunge again. Morgan Stanley

recently warned it could fall as much as 7 per cent against the euro this year.

Japanese yen

The yen had a tough 2017, falling 9 per cent against the euro and 5 per cent against sterling, while holding steady

against the dollar.

However, Mr Hillier expects the currency to rise this year, citing the country’s new-found economic vigour,

improved growth and free trade agreement with the EU, finalised last month. “The Japanese economy expanded

at an annualised rate of 2.5 per cent in the third quarter of 2017. This, together with expected global growth,

should lead the yen into strong bullish territory.”

Mr Purdy says the yen is currently undervalued and its fortunes could be about to change. “An upturn in the

global economy should bring higher growth, spending and inflation across the globe, which might encourage the

Bank of Japan to loosen its policies.”

However, he warns the world’s third-biggest economy could be hit by political tensions between the US and North

Korea, especially if Kim Jong-un continues to fire ballistic missiles over Japanese territory.

Chinese yuan

The yuan has performed poorly lately and Mr Purdy expects this to continue this year.

Chinese president Xi Jinping is forcing through market-oriented reforms of the country’s foreign exchange rate

and financial system, in a bid to expand global adoption of its currency. “However, attempts to drag the renminbi

out of the doldrums might be hit by US threats to impose protectionist trade measures on China,” says Mr Purdy.

Mr Hillier predicts the yuan will remain weak against the major currencies. “China will continue to ease foreign

investment restrictions, which should offset its capital outflow pressures.”

Russian rouble

The rouble has been hit by low oil prices and could be further sunk by interest rates cuts in 2018.






Mr Hillier says President Putin's presence, "will continue to bring stability, but we expect current

underperformance to continue in 2018.”

Emerging markets

Emerging market currencies did well in 2017, benefiting from the weak US dollar, Mr Hillier says. “They could

struggle if the dollar picks up although expectations of global economic growth should improve their outlook.”

He is optimistic over prospects for the Indian rupee and South African Rand. “Both countries look set to lead the

emerging market rebound,” he says.

Australian dollar

Mr Purdy reckons “the stars are about to align” for the Australian dollar in 2018. “Anticipated interest rate hikes by

the Reserve Bank of Australia, global economic growth and improved conditions for commodities like iron ore

may drive up the Aussie dollar," he says. "The danger is this may already be priced into the market.”

Bitcoin

After an astonishing year in which it rose 1,800 per cent at one point, cryptocurrency bitcoin continued its crazy

volatility over Christmas, when its price swung between $12,000 and $17,000.

Mr Kruger says investors should brace themselves for more to come. "There is no denying bitcoin's potential, as it

could be a compelling alternative store of value to gold, while the underlying blockchain technology may drive the

next wave of global technological innovation.”

However, he says bitcoin’s price has rocketed past the point of rational appreciation and too many questions

remain unanswered. “Bitcoin has also benefited greatly from the ultra-accommodative global monetary policy. If

interest rates rise in 2018 and we see a flight to safety, that could suck out the speculators, and drag bitcoin back

down to earth.”

Fawad Razaqzada, market analyst at Forex.com, says there is little doubt that bitcoin is a bubble, the only

question is how far it can go before bursting. “In an uncertain world, the only certainty is that the massive

volatility in bitcoin and other cryptos such as ethereum, litecoin and XRP by Ripple will continue in 2018.”

A word of warning

As with every currency, you must limit your exposure to the unpredictable shifts and swings, because even the

experts cannot say with certainty what will happen next. If you thought stock market performance was impossible

to predict, second-guessing currency movements is even tougher. No currency has its own intrinsic value, this can

only be valued in relation to another currency, known as its pair. So, for example, the US dollar can be priced

against the European single currency, British pound, Japanese yen, Chinese renminbi, Indian rupee or Venezuelan

bolívar, but never on its own. It is therefore impossible for every global currency to rise – or fall – at exactly the

same time. If one rises, another must fall, and vice versa.

David Hillier, a currency expert at global transfer service Moneycorp, says any exchange rate forecast involves not

one but three predictions. “You must predict the future value of the two currencies individually and their relative

strength to each other. If you call just one wrong, your forecast will be wide of the mark.” Charles Purdy, chief

executive of Smart Currency Exchange, says expats must limit their exposure to foreign exchange swings. “It can

be highly costly and unnerving if currency volatility works against you, so you need to manage your risk.”

If sending regular payments overseas consider using a currency transfer service to lock into a favourable rate for

one or two years, rather than leaving yourself at the mercy of market swings.


Back to Index






CORPORATE EXPANSIONS DRIVING HONG

KONG'S GRADE A OFFICE MARKET Tuesday, January 02, 2017

According to JLL's latest Property Market Monitor released this week, net take-up in Hong Kong's overall office

market amounted to 68,800 sq. ft in November 2017, with average monthly rent reaching HKD 71.7 per sq. ft --

0.3% higher than in October 2017. The overall vacancy rate in the Grade A office market decreased to 4.8%

compared to 4.9% in October.

Leasing demand continued to be underpinned by the expansion requirements of financial services companies. In

Central, Ping An Bank reportedly leased 13,900 sq ft at One Exchange Square, expanding from offices in Bank of

America Tower, while LGT group reportedly expanded by 27,800 sq ft at Two Exchange Square.

Rents in Central grew by 0.3% m-o-m on the back of a 0.6% m-o-m rise in rents in Grade A3 offices, where vacancy

rate remained below 2%. Rents in Kowloon East rose for the second consecutive month, advancing by 0.4% m-o-

m on the back of tight vacancy within the Millennium City portfolio.

Alex Barnes, Head of Hong Kong Markets at JLL said, "Chinese financial service companies drive the vast majority

of demand in Central. Demand from Chinese corporates will be the engine room of the Central office market into

2018."

Hong Kong's retail market continues its recovery and investors continue to buy into it. Link REIT sold 17 retail

centres in non-core areas (about 1.2 million sq ft, IFA), along with 8.249 car-parking spaces, for a total

consideration of HKD 23 billion to a consortium led by GAW Capital Partners, with estimated initial yields ranging

from 2.3% to 3.2%.

Denis Ma, Head of Research at JLL in Hong Kong said, "The record amount paid for Link REIT's assets reflects the

positive outlook held by investors on Hong Kong's retail property market. The transaction also adds to a recent

trend of PRC investors buying into the local property market through JV structures."

Source: World Property Journal

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With over 30 years of Middle East experience,

Asteco’s Valuation & Advisory Services

Team brings together a group of the Gulf’s

leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai,

Northern Emirates, Qatar, and the Kingdom of Saudi

Arabia not only provides a deep understanding of the local

markets but also enables us to undertake large

instructions where we can quickly apply resources to meet

clients requirements.

Our breadth of experience across all the main property

sectors is underpinned by our sales, leasing and

investment teams transacting in the market and a wealth

of research that supports our decision-making.

John Allen BSc MRICS

Director, Valuation & Advisory

+971 4 403 7777

[email protected]

Jenny Weidling BA (Hons)

Manager – Research and Advisory

+971 4 403 7789

[email protected]

VALUATION & ADVISORY

Our professional advisory services are conducted by

suitably qualified personnel all of whom have had

extensive real estate experience within the Middle

East and internationally.

Our valuations are carried out in accordance with the

Royal Institution of Chartered Surveyors (RICS) and

International Valuation Standards (IVS) and are

undertaken by appropriately qualified valuers with

extensive local experience.

The Professional Services Asteco conducts throughout

the region include:

• Consultancy and Advisory Services

• Market Research

• Valuation Services

SALES

Asteco has established a large regional property sales

division with representatives based in UAE, Saudi

Arabia, Qatar and Jordan.

Our sales teams have extensive experience in the

negotiation and sale of a variety of assets.

LEASING

Asteco has been instrumental in the leasing of many

high-profile developments across the GCC.

ASSET MANAGEMENT

Asteco provides comprehensive asset management

services to all property owners, whether a single unit

(IPM) or a regional mixed use portfolio. Our focus is

on maximising value for our Clients.

OWNER ASSOCIATION

Asteco has the experience, systems, procedures and

manuals in place to provide streamlined

comprehensive Association Management and

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.

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