NEWS BRIEF 06 - Asteco Property Management · 2016-05-29 · RUSSIAN TOURIST SHORTAGE TO BE FELT AT...





REAL ESTATE NEWS UAE

UAE PROPERTY COMPANIES UNLIKELY TO FACE FINANCING PROBLEMS

DUBAI

DUBAI DEVELOPER GOES ALL OUT TO TAP OVERSEAS INVESTOR UNDERWATER' VILLAS ON SALE IN DUBAI

WILL THIS GEM OF A HOTEL COME TO DUBAI? DUBAI SHARES RISE AS OIL PRICE JUMPS

TRAFFIC CONGESTION COSTS MORE THAN DH700,000 PER KILOMETRE IN DUBAI

TIME FOR DUBAI DEVELOPERS TO DO THEIR BIT

DUBAI DEVELOPER DAMAC REPORTS 46% PROFIT RISE DESPITE PROPERTY SLOWDOWN

SOBHA DEVELOPERS SPREADS THE NET WITH OVERSEAS OFFICES DUBAI ISLAND HOTEL AIMS TO BUILD ON FAMILY DESTINATION WITH

SERVICED APARTMENTS A HEAD FOR HEIGHTS WITH DH19 MILLION THREE-BEDROOM PENTHOUSE

NEXT TO BURJ KHALIFA FIVE REASONS WHY IT MAKES FINANCIAL SENSE TO BUY THAN RENT A

PROPERTY

ABU DHABI RESIDENTIAL RENTS CONTINUE TO RISE IN ABU DHABI IN Q4

ABU DHABI FINANCIAL GROUP HEAD HAS SHREWD EYE FOR A GOOD BUY DUBAI INVESTMENTS TARGETS ACQUISITION OF ABU DHABI PROPERTY DEVELOPER

SLOWDOWN KEEPS ABU DHABI HOUSE PRICES IN CHECK DURING THE FOURTH QUARTER

ABU DHABI RENT RISES TO SLOW ‘SIGNIFICANTLY’ WITH 35,000 NEW HOMES

ABU DHABI HOTELS REAP BENEFITS OF GOING GREEN ITALY AND CHINA HIGH PRIORITIES FOR TCA ABU DHABI

NORTHERN EMIRATES

LANDLORDS IN SHARJAH CANNOT CHARGE FEE FOR TENANCY RENEWAL NEW SHARJAH PROJECT OPENS UP LARGE PLOTS FOR ARAB BUYERS

RUSSIAN TOURIST SHORTAGE TO BE FELT AT FUJAIRAH AND SHARJAH HOTELS

RAK PROPERTIES PROFIT EDGES UP TO DH155.7 MILLION IN 2014





LANDLORDS IN SHARJAH CANNOT

CHARGE FEE FOR TENANCY RENEWAL

WEDNESDAY 04 FEBURARY 2015

Landlords in Sharjah cannot charge tenants an annual renewal fee unless stated in the tenancy contract,

Sharjah Municipality said.

Any additional fee not listed on an attested tenancy contract cannot be requested by the landlord or real

estate agency and is considered a violation.

The laws on tenancy contracts are listed on the Sharjah Municipality’s website- www.shjmun.gov.ae

Omar Al Sharji, Assistant Director General of Customer Service section at the municipality said the law,

which regulates relations between landlords and tenants, states that a tenancy contract is valid for three

years and the tenant’s rights are protected for that period, after which a new contract with new

conditions is agreed on and signed by both parties. “If a tenant has agreed to the condition of paying

annual fee at renewal, they must abide by the contract.”

Many Sharjah residents have been asked to pay annual fees despite the condition not being included in

their contract.

A tenant, who did not wish to be identified said he has been asked “renewal service fees” by a real

estate agent for the past 10 years for his villa in Sharjah.

“They admit this is not sanctioned by law, but they tell me, ‘we’ve kept your rent low so pay us this fee’.

They do the same with other tenants in villas or apartments,” the tenant added.

Another tenant of a residential building said on condition of anonymity that he refused to pay the ‘fee’.

“When I said it was not allowed, he offered me a discount on the ‘fee’. I insisted I won’t pay and he

eventually backed off. But I know others in my building paid the fee,” he added.

Some residents are forced to sign a separate “management contract” with the real estate agent that

includes a clause to pay the illegal rent renewal fee, which is a violation.

Al Sharji called on tenants to come forth with any complaints by submitting a form along with a copy of

their tenancy contract to the rent dispute settlement division located at Industrial Area five. The

complaint form should be submitted before the expiry date of the contract.

“I urge the public to be informed about the rights and duties of both tenants and landlords in order to

avoid violating any laws,” he said.

Source: Gulf News

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NEW SHARJAH PROJECT OPENS UP

LARGE PLOTS FOR ARAB BUYERS


The first phase of a project in Sharjah offering large-sized plots — of between 18,442 and 32,297 square

feet — for investors to build their own villas has just been launched. The Dh400 million development —

Shoumous Residential Complex — represents a joint venture between MAG Group and Albatha Real

Estate Group and located in the Al Tai district of Sharjah and close to Shaikh Mohammad Bin Zayed

Road.

The first phase, spread over 6.8 million square feet, will feature 220 plots, extensive common areas and

a mall which is to be developed by a third-party developer. The plots are going for Dh90-Dh100 a

square foot. The handover will be by the end of the year. (It has been registered with Sharjah Real

Estate Department.)

“Sales are open to all Arab nationals — we are offering full flexibility on when the buyer wants to start

construction on the plot,” said Dr Hani S. Abu Auida, CEO of Shoumous Properties and Vice-chairman of

MAG Group. “But all of the access infrastructure, the internal road networks and the provision of utility

will be managed by us as the master-developer.

“The nearness to the Shaikh Mohammad Bin Zayed Road is another factor that will score with

prospective investors.”

On why the developer could not have built its own properties and sold them to investors, Auida said: “It

would have altered the timing of the project significantly — compared to handing it over in eight months

to a year, it would have taken us three or four years.

“Plus, in the current market situation, we are giving serious investors to come in at an investment of,

say, Dh2 million compared to Dh7 million or so for a finished property. The buyers have the freedom to

plan the kind of funds they want to invest in building their property.

“We found there was demand from niche buyers who place a prime value on individuality as well as

exclusivity. This is a great opportunity to invest in property in Sharjah.

“We will not be placing any restrictions on investors wishing to sell these plots rather than build. It’s

entirely their call on what they want to do once the transaction is done.”

Train project

The developer also has access to an addition 4 million square feet of land in the area for a second

phase. But the timing for its launch has not been decided. “The planned train project that will connect

Abu Dhabi, Sharjah and Dubai should be passing through the area and we thought a final decision on

the second phase must happen when we have a full picture,” said Auida.

For MAG Property Group, this is its first residential venture in Sharjah, where it had earlier taken on

industrial projects.

As for Sharjah, its property market has been seeing a spike in the launch of large-sized residential

developments. Recently, there was the unveiling of Tilal City, spread over 25 million square feet, by a

joint venture between Eskan Real Estate Development and Sharjah Asset Management. Plots there are

available on both freehold and long-lease terms to a buyer with a UAE resident visa.





Source: Gulf News

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DUBAI DEVELOPER GOES ALL OUT TO

TAP OVERSEAS INVESTOR


Sobha LLC, which has multiple projects in Meydan City, Mohammad Bin Rashid City (MBR City) and

Business Bay, is opening five overseas sales and marketing offices to keep pulling in wealthy investors’

interest in Dubai realty. The new offices will be in London, Singapore, as well as in Kuwait City, Doha

and Riyadh. (There could be a second office in Saudi Arabia, in Jeddah.)

“While these will add to our cost structure, it’s the developer’s job to create awareness of Dubai in the

right markets,” said Ajay Rajendran, vice-chairman of Sobha LLC, part of the Dh2.2 billion Sobha Group,

which also has interests in construction and wood works. (Another Group subsidiary in India has built

upscale residential clusters in key southern Indian cities and is also listed on the Bombay Stock

Exchange. The non-Indian operations make up more than 30 per cent of the Group’s top-line numbers.)

“While regional investors will always retain an interest, there’s still much that can be done in telling the

story of Dubai property to high networth individuals in global cities. Dubai offers a compelling

opportunity for a second home or purely as an investment.”

Dubai’s developers of premium properties have been making subtle changes in the way they pitch their

sales campaigns. While some are going all out for buyers in the other Gulf states, others have started to

explore possibilities tapping cash-ready investors in the Far East. Sobha’s opening in Singapore should

thus be viewed in this light.

For the immediate future, the developer plans to build up its roster of existing projects rather than

launch new ones. “That’s certainly the intention for the next 12 months at least,” said Rajendran. “We

do have other land acquisitions in Dubai, but that’s for the future.”

That still means there is lots to do. The developer has mounted two substantial projects in MBR City. For

one, it has a joint venture with Meydan to develop the sprawling District One.

The second project, the $4 billion (Dh14 billion) Hartland, is being developed by Sobha LLC on its own.

Construction work will start on the 280 villas and the ground plus eight-storey (G+8) structures (which

will add 1,800 units) in the second quarter. Hartland is scheduled for completion in the first quarter of

2017.

And it is also making a strategic foray into the education and hospitality sectors. Its first school will open

in Hartland by September and there are plans for a second one, also at the same location.

“The other way we are adding to the revenue stream is building a four-star hotel — the Strada and

which will have 300 keys — at the community,” said Rajendran. “We will also be directly handling the

primary retail component at Hartland.

“The two additional lines — education and hospitality — should sit well alongside our core real estate

development activity going forward.

“In our non-India operations, real estate represents the major revenue generator followed by

construction and wood works. The construction side of the business also helps with all of our in-house

projects in maintaining a tight schedule on deliveries.”





Source: Gulf News

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RESIDENTIAL RENTS CONTINUE TO

RISE IN ABU DHABI IN Q4

TUESDAY 03 FEBURARY 2015

Average residential rents continued to rise in Abu Dhabi during the fourth quarter of 2014, with an

estimated three per cent growth quarter-on-quarter, and nearly 17 per cent increase from the same

time last year, according to latest report by CBRE.

Despite the figures, the rise was at a slower pace that at the start of the year, the global real estate

consultancy firm said, adding that the recent delivery of new supply has increased competition, which

led to a more cautious approach by landlords.

“As the cost of living has risen over the past 12 months, there has been a more noticeable increase in

demand for low to middle income units and also for non-prime areas of the capital. This in turn has

driven rental growth in more affordable locations as a flight to quality continues,” said Mathew Green,

head of research and consultancy in the UAE.

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Residential units situated on the outskirts of the city such as those in Khalifa City A and B, Mohammad

Bin Zayed City, and Mussafah continued to gain popularity as rents went up in the capital.

“A two-bedroom unit in the St. Regis currently has rentals ranging from Dh150,000 to Dh210,000 [per]

year whilst similar units in Al Raha Beach have rents starting from Dh140,000 a year,” Green said.

According to the report, the market has also seen an increase in customers looking to purchase homes

rather than rent, driven by lease expirations or rising rents.

Meanwhile, David Dudley, regional director and head of Abu Dhabi office at Jones Lang LaSelle,

attributed the rising rents to an unbalance in the supply/demand equation, combined with the removal

of the rent cap.

“For residential, there is generally a shortage of quality supply. Demand has remained strong, and it’s

really linked to employment generation. Employment has been linked to the government spending

money on [projects] so that meant continued growth of employment, and we anticipate that job growth

may slow down due to the reduction in oil prices,” Dudley told Gulf News.

Discussing the outlook for the rental market, Dudley said he expected continued growth in rents but at a

slower rate than previous years. With a growth rate of 17 per cent in 2013, and 11 per cent in 2014, he

expected single digit growth in 2015.

Looking into the villa market, the CBRE report showed continued stability, with limited available lease

options.

During the quarter, annual rents for an average four-bedroom villa on Abu Dhabi Island started from

Dh190,000 per unit per year with rates going as high as Dh350,000 per unit per year for luxury villa

units in prime locations. Similar residential types in off-island locations are currently being leased

between Dh140,000 and Dh180,000 per unit per year.

Despite rising house stock, Abu Dhabi’s residential market outperformed most others, CBRE’s Green

said.





Source: Gulf News

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UAE PROPERTY COMPANIES UNLIKELY

TO FACE FINANCING PROBLEMS

SUNDAY 01 FEBURARY 2015

Property companies, especially the rated entities in the UAE will have no difficulty in funding their

ongoing and planned future projects the context of falling oil prices and its impact on economic growth,

Franck Delage and Gregg Lemos-Stein, regional property analysts for S&P told Gulf News in an

interview.

S&P analysts said they are anticipating a slowdown in property prices in the UAE which they see as a

relatively short term challenge for the sector.

“We do factor some softening in the real estate prices in the next 12 to 15 months. There are some

short term challenges one of which is the oil price decline. Oil prices could have an impact on corporate

sentiment which could be reflected in the office real estate prices. On the retail segment too there could

be some impact if consumption spending is impacted. On the residential side, weakening

macroeconomic situation could dampen investor demand,” said Delage.

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Analysts said the real estate prices in the UAE have a high correlation to investor sentiment. However

they said Dubai market in particular has stabilised since the financial crisis, thanks to government

regulations and new mortgage rules.

“The Dubai market has calmed down since early 2014, with lower sales volumes and slowing growth in

prices and rents. Legal and regulatory developments across the region have largely contributed to cooler

price growth and are, in our view, likely to promote market confidence and stability over the long term,”

said Lemos-Stein.

In the UAE, initiatives such as mortgage and rent regulation, central bank regulation of banks’ property

exposures, and developer escrow accounts have helped to stabilise the market. However analysts said

UAE companies could face challenges on the supply side.

“We may see a lot more supply in the market in the next two years. Increased supply is likely to outpace

the demand for 2015 which could apply pressure on prices. However the correction will not be as harsh

as during the financial crisis,” said Delage.

Surplus cash

Despite the potential softening of the market S&P sees stable outlook for the real estate sector.

“Developers have strong liquidity, especially in the context that 2014 was a good year for most. We

have taken some positive rating action because most of them have lots of cash on their books. All the

major ones we rate have improved their financial profiles. Thus we expect they will be better equipped

to face softening in price,” said Delage.

S&P rates UAE based companies such as Damac Real Estate Development, Emaar Malls Group, DIFC

Investments, Dubai Investments Park Development Company and Abu-Dhabi based Aldar Properties.

The ratings agency does not anticipate any liquidity related issues for the UAE property companies or

difficulties in fund raising through debt markets because of decline in oil prices or softening of real

estate prices.





“As it stands today we don’t see any liquidity issues for these companies, in addition we don’t see any

problem for them in tapping the debt markets if they require funding,” said Lemos-Stein.

“We maintain a stable outlook for the real estate sector and we don’t anticipate any change in the next

12 months even after factoring in the oil price situation. We do keep monitoring the oil markets. It may

impact the performance of some companies but not in such a way that the compay’s individual credit

rating would be hit. There is enough headroom in the financial matrix and I think that is why we haven’t

changed the outlook,” said Delage.

Source: Gulf News

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UNDERWATER' VILLAS ON SALE IN

DUBAI

SATURDAY 07 FEBURARY 2015

The first 'underwater' villas on Dubai’s The World development went on sale on Saturday, with the pre-

launch price set at Dh5 million.

The three-level villas - the lowest level being under water - are part of Kleindienst Group the Heart of

Europe (THOE), which will have rain and snow-filled streets and floating bridges.

The villas are being sold by Privilege Dubai, a real estate consultancy, which has bought the underwater

villas from the developer.

The consultancy has invited only investors and end-users to its pre-launch event and states in its invite

that the 1,700 square foot villas are expected to be completed by 2017 with payment linked to

construction timeframe.

The number of villas on sale have not been given. No Privilege official could be reached for comment.

Emirates 24|7 has learnt that the developer will officially launch new batch of underwater villas by

March.

The Heart of Europe comprises six islands: Germany, Austria, Switzerland, Netherlands, Sweden and St.

Petersburg with six additional destinations being Sochi, Belgium, Luxembourg, Geneva, Monte Carlo and

Poland.

Emirates 24|7 reported before that a part of the project will have the world's first 'rain and snow-lined

streets'.

In January 2015, Oqyana Real Estate, a developer, signed a deal Dutch Docklands to create a private

island villas within the 'Oqyana World First development', a project in The World islands.

The World

The World project is nine-kilometres wide and seven kilometres-long. It covers an area of 931 hectares

and will add 232km to Dubai's natural 67km of beachfront.

The islands range from 150,000 to 450,000 square feet in size.

The project is divided into private estate island zones, commercial zones, which have low/mid/high

density resorts, hubs for ferry transfer points and public visitor areas.

Source: Gulf News

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WILL THIS GEM OF A HOTEL COME TO

DUBAI?

SUNDAY 01 FEBRUARY 2015

Dutch architects behind a China hotel that would look like a giant sliced block of amethyst have eyes on

Dubai for its own gem of a hotel.

Amsterdam-based NL Architects is designing a luxury hotel on the Ocean Flower project, an artificial

island under development in the sea north of Hainan Province in southwestern China. The developer,

Guangzhou-based Evergrande Group, is looking for an investor for the project who would also run the

hotel operations.

“We imagine that Dubai would be the perfect habitat for a gem like the Amethyst Hotel,” said Kamiel

Klaasse, one of the architects from NL Architects in the team.

“We very much hope that we will be able to attract an hotelier that would like to eventually build a chain

of these, all slightly different, all special on different locations.”

Rooms at the Amethyst Hotel would be placed around a large void that rises several stories, and access

to the rooms will be along the outer perimeter of the hotel, according to the architects.

Crystalline shards would frame the windows, giving the hotel a look of the gemstone.

Mainland China is home to some of the luxurious and unconventional properties.

Among them are the horse-shoe shaped Sheraton Huzhou Hot Spring Resort in Huzhou, near Shanghai,

that opened in 2013. The Sunrise Kempinski Hotel outside Beijing, which is opening this month, looks

like a rugby ball.

But hotel performance in China is expected to remain flat, according to a report from consultants JLL

this month.

The average room rate was expected to rise by 2.4 per cent to RMB409 (Dh239) last year while

occupancy rate and revenue per available room were expected to remain flat at around 60 per cent

RMB241.

The Chinese government’s measures in 2013 to curb conspicuous consumption had a negative impact on

luxury hotels’ food and beverage revenue in particular, the report said.

Source: The National

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ABU DHABI FINANCIAL GROUP HEAD

HAS SHREWD EYE FOR A GOOD BUY


Jassim Alseddiqi says he is not a risk-taker even after closing two of the biggest central London property

deals of the past year at what could be the peak of the market.

Is he worried he paid too much for the trophy assets of No 1 Palace Street and New Scotland Yard?

“I’ll tell you in two years,” smiles the engineer turned investor who runs Abu Dhabi Financial Group. If

he is worried, it doesn’t show.

The two sites are among the most prized in central London, where until now it has been Qatari investors

who have dominated the big ticket purchases from The Shard to Harrods.

If you can stump up as much as £60 million (Dh332m) needed to buy a penthouse at No 1 Palace

Street, your nearest neighbour could be the Queen. Down the road in Victoria, the revolving sign outside

New Scotland Yard has been a fixture of TV crime capers and films for decades.

Iconic buildings come with iconic price tags

“Today you cannot buy something so valuable and so unique without a premium,” says Mr Alseddiqi.

“What we paid for it is its value.”

While London homes have added about £500 billion in value over the past five years, many analysts

believe the party is over — especially at the luxury end of the market, which recorded some of the

biggest gains.

But that has not diminished Mr Alseddiqi’s long-term faith in the market.

“It’s tough to say whether it’s the right time to buy or not. It is if you are a long-term investor but not if

you are a flipper.”

Still, ADFG is unlikely to follow up its two trophy purchases in Victoria with any more acquisitions in the

near future. Instead, it will focus on opportunistic investments in the UAE such as a planned US$100m

acquisition of a financial services company which it is currently assessing.

“In central London we are delivering about $3bn of inventory over the next five years between all our

projects. I don’t see that we will invest in another project any time soon.”

Abu Dhabi Financial Group was created in the depths of the global financial crisis and has reaped the

benefits of the recovery, achieving an average internal rate of return of about 26 per cent since it

started operation in 2011.

“We extract value. We find niches. We are opportunistic,” he says. “It’s hard for us to find a good deal

but that’s why our returns are so high.”

It operates through six units which include Abu Dhabi Capital Management, Spadille and Qannas

Investments.

Employing something of the Warren Buffett maxim of being fearful when others are greedy and greedy

when others are fearful, ADFG was quick to reap the investment opportunities arising across the region

as the Arab Spring and global financial crisis combined to weaken asset prices and scare investors.





He recalls: “Four years ago we were the only ones investing. We deployed around $50m buying stakes

in Middle Eastern companies when everyone was sitting back watching what was happening.”

While the rapidly developing alternative investment space is considered by some as inhabiting the riskier

neighbourhoods of the financial world, Mr Alseddiqi disagrees.

“I don’t think it’s fair to say we are risk-takers. On the contrary if you look at our investments, we don’t

take a lot of risk.

“If we were risk-takers we would have been hit with the Swiss franc crisis, the oil crisis or the equities

crisis.”

He points out that the company exited its UAE real estate investments a year ago.

ADFG’s debt and property platforms have generated handsome returns for the company since its

formation four years ago.

“Companies usually come to us when they have exhausted options with banks or when they need more

than the banks offer — this is where we excel. Today, markets are risk-averse or are turning risk-

averse, but where you get your alpha return is in alternative debt rather than equity investments.”

Mr Alseddiqi is sanguine about the likely impact of the tumbling price of oil on either the ADFG business

model or the UAE property market and wider economy.

He points out that much of the company’s investments are in countries whose economies could benefit

from cheaper oil, but acknowledges there will be an impact in the UAE.

Even amid predictions last week from the S&P ratings agency that Dubai property prices could lose as

much as 20 per cent this year, he believes most of the excessive leverage that exaggerated the previous

property crash has been purged from the system.

“It’s not the first time oil has dropped,” he says. “This always happens in cycles and you cannot have a

high oil price for a long time. As we approach 2020, real estate and hospitality assets will improve — it’s

only five years away.

Mr Alseddiqi graduated as an electrical engineer and fell into a financial career in what he describes as

fluke.

He says his engineer training has helped him in an industry that he says sometimes relies on projections

rather than facts.

“It changes the way you analyse a pitch. Projections are not facts, they are based on assumptions,” he

says.

While last year was all about announcing big plans in central London, the group will be looking to

emerging opportunities in eastern Europe in the year ahead.

It plans to invest up to €200m (Dh829m) over the next two years in the region, which could rise to as

much as €500m by the end of the decade.

The markets may be very different, but he says his approach will be the same — seeking out

opportunities, not risks.

“It is about investing in quality deals, not quality assets,” he says. “There is a difference.”


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DUBAI SHARES RISE AS OIL PRICE

JUMPS


Dubai shares rallied yesterday after oil prices jumped 8 per cent on Friday, the strongest one-day surge

in nearly three years.

The benchmark equity index advanced 4.5 per cent, the biggest move in six weeks, to 3,840.22 points.

The Abu Dhabi Securities Exchange General Index rose 2.1 per cent to 4,552.61.

Dubai Financial Market Company, the listed shares of the stock exchange, rocketed 9.4 per cent to

Dh2.08.

West Texas Intermediate on Friday jumped to $48.24 a barrel after Baker Hughes said that rig count in

the US dropped by 94, leaving 1,223 rigs in service. The development raised concerns that another 300

rigs could be out of operation in the next few months.

“Liquidity is still tight, but the rebound is because of oil prices. It’s the first time they’ve closed up in

weeks,” said Nabil Farhat, a partner at Al Fajer Securities in Abu Dhabi.

Property firms led the gains on the Abu Dhabi Securities Exchange.

Eshraq Properties jumped 5.3 per cent to 79 fils. Aldar Properties gained 5.4 per cent to Dh2.50. RAK

Properties rose 5.5 per cent to 76 fils.


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DUBAI INVESTMENTS TARGETS

ACQUISITION OF ABU DHABI

PROPERTY DEVELOPER


Dubai Investments’ next acquisition is likely to be in the Abu Dhabi property sector after the company

yesterday announced plans to acquire 60 per cent of Dubai-based Al Mal Capital to help manage its Dh3

billion portfolio.

It plans to acquire an Abu Dhabi property developer next month and divest two businesses next year, its

chairman said.

The conglomerate, which owns stakes in almost 40 companies, yesterday disclosed plans to acquire 60

per cent of Al Mal Capital to use the investment bank as a platform to advise on deals and manage DI’s

investment portfolio.

DI, whose largest shareholder is the state-owned Investment Corporation of Dubai, said it determined

the price by net asset value according to the financial statements.

It has agreed to buy Al Mal for Dh150 million at “book value”. Al Mal Capital has assets of Dh500m and

equity of Dh260m, Khalid bin Kalban said. Al Mal Capital declined to comment on the deal.

“The premium will come later. Whoever stayed as a shareholder will benefit,” Mr bin Kalban said

yesterday.

“We have at least two targets with potential exits in 2016. Soon, within one month, we will be acquiring

an Abu Dhabi real estate [company], which is a private joint stock, and we already agreed on the

pricing. Again, it’s going to be on a book value.”

Al Mal Capital, whose business spans investment banking, asset management and private equity, was

forced to shut its brokerage and cut costs after the 2009 Dubai financial crisis. It decreased its head

count from 100 staff to below 20 over three years and moved its offices from Dubai’s Emaar Square to

Tecom to reduce expenses.

DI’s businesses are divided into three broad categories – property makes up about 58 per cent,

manufacturing is 20 per cent and investments are about 22 per cent, Mr bin Kalban said. He added the

company plans to rely more on investments.

DI plans to mandate Al Mal Capital to manage its Dh3 billion investment portfolio, which DI takes care of

now with a small team, Mr bin Kalban said. The aim is for it to become a vehicle for investment exits

and private placements.

“That’s why we bought the company. It will do so many things for us and will complement the portfolio

we’re having,” he added.

“It’s a win-win situation for both parties,” said Nabil Farhat, a partner at Al Fajer Securities in Abu

Dhabi.





“It makes sense for Dubai Investments because they own a lot of subsidiaries and want to take these

companies public or restructure. At the same time, they are going into a new line of business, which is

asset management.”

DI’s credit profile was upgraded to BB+ from BB by Standard & Poor’s Ratings Services in June after one

of its subsidiaries, Dubai Investments Park Development Company, issued a five-year sukuk and

strengthened the group’s liquidity.

Shares of DI headed towards the maximum one-day price increase yesterday, soaring 13.7 per cent to

close at Dh2.48.

Separately, the conglomerate reported a 63 per cent rise in net profit to Dh1.34bn last year, it said.

The board recommended a cash dividend of 12 per cent and bonus shares of 6 per cent, subject to

shareholder approval, the company said.


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TRAFFIC CONGESTION COSTS MORE

THAN DH700,000 PER KILOMETRE IN

DUBAI

SATURDAY 07 FEBRUARY 2015

Traffic congestion in Dubai is on a par with most major cities in the world, costing the economy

Dh771,147.388 per kilometre in fuel and time lost, Gulf News can reveal.

According to the Roads and Transport Authority (RTA), Dubai’s economy was set back by Dh2.9 billion in

terms of loss in working hours, time and fuel in 2013. A simple division of the annual loss with the total

length of roads in Dubai, which is 3,760.63 centreline kilometres, shows a loss of Dh771,147.388 per

kilometre.

With 1.39 million vehicles registered in Dubai, the traffic cost per vehicle per year amounts to Dh2,086.

However, the scenario would have been much worse if RTA had not developed the city’s infrastructure

over the last nine years, spending up to Dh60 billion in building roads, establishing a Metro network and

expanding other modes of public transport.

Without the road and public transport projects implemented by RTA, the loss for the year 2013 alone

would be Dh16.6 billion.

In reality, the estimated cost of time and fuel lost in congestion from 2006 to 2013 was around Dh27.9

billion, owing to improved infrastructure.

According to RTA’s calculations, without the road and public transport projects implemented by RTA, the

sum of these losses within the same period would be around Dh100.4 billion.

“What this means is that the RTA implemented road and public transport projects which saved around

Dh72.53 billion. The approximate value of Dubai’s transportation assets is around Dh73 billion while the

total capital expenditure made by RTA on road and public transport infrastructure between 2006 and

2013 was around Dh60 billion. So, the value of savings in time and fuel approximately balances the

whole value of Dubai transportation assets’ value and is equivalent to around 120 per cent of the RTA’s

total capital transportation expenditure made between 2006 and 2013,” said Nasser Abu Shehab, RTA’s

Director of Strategic Transport Planning, speaking exclusively to Gulf News.

This shows that though there are major losses to the economy due to congestion, significant

investments in roads and transport infrastructure have managed to offset the effects of congestion to a

great extent.

In fact, RTA figures show that there have been benefits of decongestion to the community as well as the

wider economy, which may not necessarily be in direct revenues.

“International studies have shown that the ratio of total benefits [direct and indirect] to costs of

transportation infrastructure and services can be as high as six to one. This indicates that every dirham

spent on transportation infrastructure and services can yield up to six dirhams in the form of direct and

indirect benefits,” said Abu Shehab.





Referring to international urban transportation trends he added: “The current international trend is to

optimise the efficiency of existing transportation infrastructure and services with high emphasis on

developing safe and environmentally sustainable transportation systems which basically depend on mass

transit options rather than private cars to provide the mobility requirements of cities and communities.

For example, the UITP (International Association for Public Transport) vision is to double the public

transport trips’ share by 2020.”

As a way forward, he emphasised, RTA will continue its efforts in the development of transportation

infrastructure and services in future and will be spending in the range of Dh5 to Dh7 billion annually

within the next few years for this purpose.

Source: Gulf News

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TIME FOR DUBAI DEVELOPERS TO DO

THEIR BIT


Developers with upcoming off-plan launches have to take it upon themselves to ease the entry of

potential buyers into the property market. And such incentives should not be limited to the price alone.

“New launches stand a better chance of finding committed buyers if developers limit the upfront

payments and make sure the rest of the payments come post completion,” said Zafer Taher, CEO of

G&Co, a developer which has three ongoing upscale projects at Meydan City.

“Under those payment terms, I believe buyers stand a better chance of getting a mortgage facility from

banks in the current market situation. And if the bulk of the payments are staggered post completion,

buyers can even have pre-approvals for the project to be treated as a completed one.” (Under the

current Central Bank requirements, banks can offer only a maximum of 50 per cent loan-to-value on off-

plan projects.)

According to Taher, developers could also do well to set their sights lower — “If developers in Dubai are

used to 30-40 per cent returns, there is no harm if those were now revised to 20-25 per cent. Times

have changed … developers must learn to work with the new realities.”

How developers can restructure payment terms can resonate with new market realities. It could even

help alleviate the concerns of buyers with off-plan properties on their hands.

“Where mortgages do create distressed sellers is when they are used to buy off plan property,” said

Mehroz Majeed, Residential Consultant, Better Homes Real Estate — Marina Branch. “We saw a lot of

this in the years preceding the financial crisis and we’ve started to see more off-plan purchases through

mortgages as developers have started to launch new developments.

Related Links

Dubai realty remains ‘firmly positive’

“In these cases a buyer has a payment plan to maintain or a mortgage to facilitate while no rent is

coming in. Therefore there is far greater financial pressure and which in some cases leads to distressed

seller.

Source: Gulf News

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DUBAI DEVELOPER DAMAC REPORTS

46% PROFIT RISE DESPITE PROPERTY

SLOWDOWN

MONDAY 02 FEBRUARY 2015

Profit at Damac rocketed 46 per cent last year as the high-profile Dubai developer completed thousands

of new homes despite the recent slowdown in the emirate’s real estate market.

Damac, which is known for signing licensing agreements with the likes of Fendi, Tiger Woods, Donald

Trump and Paramount, and for offering customers buying its posh apartments yachts and luxury cars,

said net profit grew to US$937 million last year from $641.5m the previous year.

The company, which began trading on the Dubai Financial Market in January after listing on the London

Stock Exchange in 2013, reported that revenue for the year grew 64 per cent to $2 billion from $1.2bn

the previous year.

Damac attributed the growth to the completion of 3,553 homes in eight projects during the period.

These included five apartment blocks in Business Bay – most of which were started before the global

financial crisis – Lincoln Park on Umm Suqeim Road, two buildings of Lakeside at the International Media

Production Zone, and its first international development, Al Jawharah in Saudi Arabia.

Land sales at Damac’s Akoya and Akoya Oxygen golf course-led housing areas also generated revenue

of $873.5m – 43 per cent of total revenue – the company reported.

It added that advances from customers stood at just short of $2bn at the end of December, up from

$1.71bn a year earlier.

The news comes as property analysts are predicting that real estate prices in the emirate will plunge by

up to a fifth this year on the back of falling oil prices, the imposition of mortgage caps and higher

transaction fees.

Last week, the real estate broker JLL and the ratings agency Standard & Poor’s put out pessimistic

market predictions for the year, with S& P predicting that house prices could fall by as much as 20 per

cent this year and JLL forecasting average falls of up to 10 per cent.

The Dubai Land Department last month reported that the value of property transactions last year fell 7.6

per cent compared with the previous year to Dh218bn as the market slowed at the end of the year.

But Damac remained upbeat in its assessment of the market.

“Against the backdrop of economic growth and a stabilisation of real estate prices in Dubai, we believe

that Damac will continue to benefit from customer demand for our product,” said Hussain Sajwani,

Damac’s executive chairman and chief executive.

Sebastien Henin, the head of asset management at The National Investor, said: “These were good

results today that enabled Damac to outperform the rest of the market. However, the real question with

Damac is whether it will be able to sustain this sort of performance going forward in an environment of

falling real estate prices. The problem is that if oil prices continue to fall, investors may well postpone

their purchases, which will make it harder for Damac and other real developers to sell.”





Holders of Damac’s London-listed global deposit receipts (GDRs) voted overwhelmingly to swap each

GDR for about 23 ordinary shares on the Dubai Financial Market in January. However, a small

percentage have so far remained trading in London after their owners elected not to swap them.

In a separate announcement, Damac said it was delisting from the LSE and cancelling the company’s

GDRs. It expects to acquire remaining GDRs on or before March 16.

Damac shares closed up 6.84 per cent at Dh2.03.


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RUSSIAN TOURIST SHORTAGE TO BE

FELT AT FUJAIRAH AND SHARJAH

HOTELS


Hotels in Fujairah and Sharjah are expected to feel the effects of new room supply and fewer Russian

tourists this quarter, according to an industry report.

The revenue per available room (Revpar), a key industry measure of profitability, is expected to drop by

26 per cent to $120 this quarter in Fujairah and by 6 per cent to $81 in Sharjah, according to the

consultancy Colliers International.

Comparative figures for the year earlier quarter were not available from Colliers.

The occupancy rates in Fujairah and Sharjah this quarter are forecast at 70 per cent and 86 per cent,

and average room rates at $171 and $95, respectively.

Comparative figures for the year earlier quarter were not available from Colliers.

“The new properties that opened, started trading at promotional rates to gain market share and this has

led to an overall market compression, resulting in hotels having to reduce rates to maintain volume

levels,” said Filippo Sona, the director for the Middle East and North Africa at Colliers.

“In addition to the new supply, both markets have been suffering from an overall downturn in inbound

business, as the wider [Arabian Gulf] is feeling the oil price effect and the European market is

economically suffering.”

Olivier Hick, the vice president at Accor in the Arabian Gulf and Levant, expects a 40 per cent decline in

Russian tourists to the UAE this year, affecting resorts in particular.

This could be a major setback for hotels, especially since Russia was the fifth-largest source market for

the UAE last year, he said.

Coupled with the devaluation of the rouble, Russian tourists are heading to resorts such as Sharm El

Sheikh in Egypt, which offer a better value for money proposition.

For Fujairah Rotana Resort & Spa, Russia’s economic woes are worrying as the market last year

represented 35 per cent of its total business.

“The collapse of the Russian rouble and the plunging of Russia’s economy towards recession has put

pressure on this market,” said Hossam Kamal, the general manager of the property located at Al Aqah

Beach. “Hence the drop in the revenue per available room, and the reduction in outbound travel from

the Russian market is expected.”

The hotel is now trying to tap other markets such as Germany, the UK and eastern Europe to

compensate for the drop in Russian visitors.

The northern emirate has 18 hotels with 2,664 rooms and 20 serviced apartments accounting for 819

rooms. Last year, the French operator Accor opened Novotel with 182 rooms, Adagio Aparthotels with 72

apartments, and Ibis with 180 rooms.





This year, more properties are expected to come on stream, including the 194-room Fairmont Fujairah

on Al Aqah beach, and the 221-room Millennium Hotel Fujairah connected to the Fujairah Mall.

Both the properties are rated five-star.

Next year, three more are expected to open, including an InterContinental and a Hues Fujairah Resort

with up to 35 private villas.

In Sharjah, 1,002 hotel rooms are expected to come on stream this year along with 50 serviced

apartments, according to Colliers.

The emirate has 51 hotels and 55 serviced apartments.


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SLOWDOWN KEEPS ABU DHABI HOUSE

PRICES IN CHECK DURING THE

FOURTH QUARTER


Arabtec has been awarded two contracts worth a total of Dh375 million from Emaar Properties in its

second major new business win since its managing director, Hasan Ismaik, left the company last year.

Arabtec said that its Arabtec Construction subsidiary had won a Dh209m contract to build town houses

at Emaar’s Al Mira Residences in Dubai by May next year.

A company spokesman said that the new contract was separate from the Dh1 billion contract that

Arabtec and Emaar announced in March to build 1,582 town houses at the Mira community, the first

phase of Emaar’s master development Reem.

It also said it had won a Dh166m contract to build more villas at Emaar’s nearby Arabian Ranches

extension by March next year.

The two contract wins are Arabtec’s second major new business awards since former managing director

Hasan Ismaik left the company last year.

Mr Ismaik, the architect of Arabtec’s ambitious expansion strategy the company had been following

during the earlier part of the year, left Arabtec in a shock move on June 17. That triggered a crisis in the

firm’s share price in July and August as it cut highly paid and new mergers and acquisitions staff as well

as its chief operating officer, chief information officer and chief risk officer.

It also sent the company’s shares The plummeting share price also dragged ing down the rest of the

Dubai bourse and prompting prompted shareholder Aabar to hold an emergency press conference last

summer in order to reassure shareholders that the company was not about to be taken over. Last week

Arabtec revealed it had won two contracts through its Target Engineering subsidiary worth a total of

Dh560m from Abu Dhabi National Oil Company.

“In realising such achievements the company relies on active and prudent instructions and the persistent

follow up by the board of directors,” Arabtec said in a statement to the DFM.

“These are backed by tremendous efforts exerted by the management team, which were characterised

by the successful thorough structuring process which included the development of business mechanisms

over the past six months.”


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ABU DHABI RENT RISES TO SLOW

‘SIGNIFICANTLY’ WITH 35,000 NEW

HOMES

TUESDAY 03 FEBRUARY 2015

Housing rent increases in Abu Dhabi are set to slow this year as the emirate feels the effects of declining

oil prices and a slowing global economy.

A report by the property broker CBRE predicts that rents which had rocketed by an average of 17 per

cent last year will slow “significantly” as thousands of new homes come to the market just as the global

economy hampers corporate expansions.

According to CBRE, two-bedroom apartments in the St Regis development on Saadiyat Island currently

bring in rents of between Dh150,000 and 210,000 a year, while similar units in Al Raha Beach have

rents starting from Dh140,000 a year.

Annual rents for a typical four-bedroom villa on Abu Dhabi Island start from Dh190,000 a year with

rates going as high as Dh350,000 a year in prime locations.

Similar residential types in off-island locations are currently being rented between Dh140,000 and

Dh180,000 a year.

“The delivery of new supply in recent months has increased competition for tenancies, resulting in a

more cautious approach by some landlords who have become more realistic with their rental requests,”

said Matthew Green, CBRE’s head of research and consultancy for the UAE.

The news comes as property analysts in Dubai predict that both rents and prices are set to fall this year

as the market suffers a correction.

Last week the property broker JLL predicted that new build property in Dubai would drop by an average

of 10 per cent during 2015 with homes on the edges of the city likely to be hardest hit.

Market commentators observe that the property market in Abu Dhabi tends to lag that of Dubai by

between a year and 18 months.

However, property brokers in the capital currently predict that average rents in the city will continue to

increase – albeit at a slower rate than during the first half of 2014.

In the final three months of the year, CBRE reported that average housing rents in the capital grew by 3

per cent after rocketing 12 per cent between January and June 2014.

The rent increases follow a government decision to remove a rent cap in the city in November 2013

which had restricted landlords to increasing rents for existing tenants to 5 per cent a year.

“For now, we expect the recovery in residential rental rates to continue, albeit at a slower pace than

during the first half of 2014,” Mr Green.

“As the cost of living has risen over the past 12 months, there has been a more noticeable increase in

demand for low to middle-income units and also for non-prime areas of the capital. This in turn has

driven rental growth in more affordable locations as a flight to quality continues.”





CBRE said that sales prices for homes in the capital were relatively subdued during the final three

months of the year, with a 2 per cent average price increase.

Average prices in Abu Dhabi investment areas now typically range between Dh13,725 and Dh18,300 per

square metre, CBRE said. The firm said that “with transaction volumes down, and uncertainty prevailing,

it is likely that the sales market will remain slow in the coming quarters”.


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SOBHA DEVELOPERS SPREADS THE

NET WITH OVERSEAS OFFICES

WEDNESDAY 04 FEBRUARY 2015

Dubai property developers are seeking to attract overseas buyers amid slowing sales at home.

Sobha Developers said yesterday that it plans to open five sales offices in overseas locations to market

its Dubai homes.

Sobha, which is currently promoting a US$4 billion project of 282 off-plan villas and 1,800 apartments at

its Sobha Hartland project close to Business Bay, said it was in the process of opening new sales offices

in London, Singapore, Riyadh, Doha and Kuwait City by July 2015.

It has sold abouthalf of the 73 villas and 79 apartments included in the first phase of the development

since the project launched last summer.

The developer is the latest to look overseas to boost sales and tap into a wider pool of buyers.

The Dubai developers Emaar and Damac have also staged overseas launches in markets as diverse as

London, Riyadh, Jeddah, Delhi and Mumbai.

“We are currently seeing more and more Dubai-based projects marketed overseas as the number of

purchasers is getting even smaller and the number of potential lenders is tightening,” said Simon

Townsend, international capital markets and business development manager for the Middle East at DTZ.

The number of property transactions in the emirate fell by nearly 15 per cent last year, according to

Dubai Land Department data. Prices also started to soften during the second half of 2014.

Last week the property agent JLL predicted that house prices in the emirate would fall by about 10 per

cent this year while the ratings agency Standard & Poor’s predicted the decline could be high as 20 per

cent.

“There is no question that there is a slowdown,” said Ajay Rajendran, vice chairman of Sobha.

“But is it a slowdown sufficient to affect prudent and seasoned developers? I don’t think so. We could be

in serious trouble if the sort of price rises we saw a year ago continued for the next two years.”

Sobha said that it was selling apartments at about Dh1,600 per square foot and the villas were priced at

about Dh2,050 per sq ft. The company said that 80 per cent of buyers were end users.

The developer is nearing the completion of the first of two schools at the project, which is due to open

for the September 2015 school year.

The project is Sobha’s second scheme in the Dh21 billion Mohammed bin Rashid City.


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DUBAI ISLAND HOTEL AIMS TO BUILD

ON FAMILY DESTINATION WITH

SERVICED APARTMENTS


Dubai’s new island destination Bluewaters aims to become a long-stay family destination as hotel

operator Jumeirah’s Venu brand prepares to open serviced apartments alongside its first property there.

It plans to open the 300-room Venu Bluewaters Island Hotel with 119 serviced apartments branded as

Venu Living.

These are expected to open in 2017.

Bluewaters Island, which is to be home to the world’s largest Ferris wheel, will also host retail,

residential, hospitality and entertainment zones.

The new Venu brings Jumeirah Group’s hotel properties in the pipeline to 26. It already operates 22

properties in Europe, the Middle East and Asia.

Developed by Meraas Holding, Bluewaters is located off the Jumeirah Beach Residence coastline.

Dubai has announced projects reinforcing the city as a family destination to help meet its target of 20

million visitors by 2020.

Family tourism would also diversify Dubai beyond beaches and shopping. Serviced apartments help

promote that idea.

Many tourists from countries such as Saudi Arabia, Dubai’s largest source market, prefer to stay in

apartments rather than hotel rooms as they visit with families, said Issam Kazim, the chief executive of

Dubai Corporation for Tourism and Commerce Marketing, at the Destination Dubai 2020 conference last

month.

As of August last year, there were 213 serviced apartments in Dubai accounting for 24,924 keys – or 28

per cent of the overall hospitality lodging accommodation in the emirate – and 62 serviced apartment

operators, according to the consultancy Colliers International.

There were another 6,052 serviced apartment units in the pipeline.

Last September, Meraas announced the blueprint for Dubai Parks and Resorts in Jebel Ali that would

include Motiongate theme park based on DreamWorks Animation characters, Bollywood Parks Dubai and

Legoland.

The first phase is expected next year.

A Dh35 billion Desert Rose housing project for Emiratis was also announced by Dubai Municipality last

month that aims to promote the emirate as a family destination.

The project will comprise 20,000 new homes for Emiratis and 10,000 low-cost houses for expatriates

spread over 4,000 hectares near Emirates Road and Al Ruwaya.






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ABU DHABI HOTELS REAP BENEFITS OF

GOING GREEN


Sustainability and efficiency have become key concerns when planning infrastructure and major building

developments but now attention has turned to the role such considerations play in the country’s

hospitality sector.

One of the oldest hotels in Abu Dhabi reflects the changing landscape. The three-star property in the

capital’s business district has been replacing outdated lighting and putting in water-saving systems ever

since the city’s green guidelines were implemented four years ago.

Built in 1979, and renovated in 1997, Mercure Abu Dhabi Center Hotel on Hamdan Street, a 215-room

hotel spread over 20 floors with nine restaurants, recycles 30 per cent of the approximately 1.9 tonnes

of waste it generates per month, which amounts to 570 kilograms. Staff are incentivised to collect

recyclables such as paper, plastic, cans and cooking oil by sharing proceeds from the sale of the waste.

Since it put in more resource-efficient systems, it has reduced water bills by 25 per cent and electricity

bills by about 10 per cent a month, says Peter D’Veiga, the chief engineer at the hotel who has been

with the property since its first day.

But guests are harder to please.

“Some of them want more water pressure and brighter lights but you can’t help it, we are still providing

them the best of the things,” he says. “But today, many are aware of [sustainability issues].”

The Mercure, being an older property, will not be affected by new hotel rating policies due to be

implemented by Abu Dhabi Tourism and Culture Authority (TCA Abu Dhabi) from the end of the year –

but sustainability is a key plank of the system.

TCA Abu Dhabi says the sliding scale of one star to five stars will affect new projects and will take into

consideration how water and energy efficient the properties are and their contribution to waste

reduction.

Implementation of the policies for hotels will be checked via a one-off assessment carried out by the

Urban Planning Council at the design stage.

“The [new] Pearl Building Rating System [PBRS] for hotel design is intended to be applied at concept

and design stage of the development,” says Nasser Al Reyami, the director of standards regulations and

licensing department at TCA.

“[But] TCA Abu Dhabi collects data on hotel water, energy and waste performance during operations for

all hotels, not only those that will be designed according to Estidama PBRS design requirements,” he

adds.

While the original Estidama (which means sustainability in Arabic) Pearl Rating System was launched in

2010 and encompasses all facilities, including hotels, there had not been one exclusively for the

hospitality sector until now.

The new classification system will take into consideration some additional parameters. Among these will

be the social media reputation of a hotel, its rating provided by Olery.com, says Mr Al Reyami.





“The new classification will marry the important aspects of services and customers’ feedback in addition

to just the infrastructure of the hotel.

“This allows TCA to have a more accurate measurement of the hotel performance as rated by TCA’s

inspectors and social media ratings,” he says.

The Amsterdam-based Olery.com tracks online reviews on sites such as Tripadvisor, and social media

feedback on Facebook, Twitter and Four Square among others, on issues such as cleanliness, location

and service. It will track the online reputation of all TCA-licensed hotels.

“We analyse and see whether a hotel is good enough to deserve the number of stars it has got,” says

Kim van den Wijngaard, the chief executive and co-founder of Olery.com. “But it is not only a

punishment tool as a hotel, which has a good reputation online, can earn an extra star [from the

authority].”

Among new hotels, Rotana’s Saadiyat Island property will be compliant with both the old and the new

system. The company has not given an opening date for the property.

“There is a marginal increase in capital costs but this should recoup over several years, due to the

significant savings in operating costs,” says Greg Allan, the area vice president of Rotana for Abu Dhabi,

Al Ain and Salalah.

Towards the end of last year, Abu Dhabi was on target to receive 3.1 million tourists and it aims to

attract 3.5 million this year. There were 157 hotels and hotel apartment properties in the emirate during

the first 11 months of last year, with numerous others in the pipeline.

“For new projects there is still time to fit the development within the new regulations, however, from

experience this tends to increase the total costs of the project by 8 to 10 per cent or more,” according to

Filippo Sona, the director of consultancy at Colliers International. “In turn it gives the hotels better life,

cycling costs and the ability to drive more profitability by saving utilities costs.”

In addition, good green credentials provide a marketing tool that can help to make a destination more

attractive – especially for the growing number of travellers for whom a hotel’s carbon footprint is

important, say consultants and hoteliers.

“Promoting responsible and sustainable tourism provides a competitive advantage for the emirate as

sustainability is becoming one of the key decision-making factors for some holidaymakers,” says Mr

Sona.

“The new generation of travellers feels that the experience is complete if the choice of hotel is

environmentally friendly.”

When considering sustainability for a new hotel, it is important to integrate the features at the design

phase, according to Holley Chant, the executive director for corporate sustainability at KEO International

Consultants in Abu Dhabi.

But, she points out, that is not the end of the story.“It is critical, post-occupancy to have proper facilities

maintenance done with a trained team on an Estidama building and also to have recommissioning of the

building periodically,” she adds.

For new hotels, implementing policies outlined in the new Estidama Pearl rating system are key.

Steps can include using solar power for heating water and using energy efficient LED light fixtures.

Other ways of boosting efficiency can be more prosaic. Rotana, for example, allows guests to opt not to

have their bed sheets changed on a daily basis and has installed restrictors that cut the flow of water

from taps in bathrooms and restrooms.

It has also introduced technology to regulate air conditioning systems as well as motion-sensors –

meaning communal lighting such as in corridors is only used when triggered by a person.





Other sustainable initiatives centre on recycling. In the past two years Rotana properties in Abu Dhabi

have recycled 810 tonnes of waste.

The Beach Rotana Abu Dhabi has installed a composting machine with capacity of 270kg of food and

garden waste that produces about 2.7kg of compost per day for use on landscaping features. The result

is a reduction of food waste, material that is thrown away, of 85 to 90 per cent, Mr Allan says.

Waste management can start with a hotel reducing the number of disposable items in each room, such

as at many five-star establishments that provide printed welcome letters in envelopes bearing the

guest’s name, or cutting down on the numerous bottles of shampoos, shower gels and conditioners most

offer.

“For many guests throw-away excesses no longer define luxury but actually offend them,” Ms Chant

says.

The global travel websites Tripadvisor and Booking.com highlight hotels that are energy efficient, while

the Amsterdam-based BookDifferent.com, an affiliate of Booking.com, has been tracking the carbon

footprint of hotels including those in this country since it launched in 2012. It has more than 585,000

hotels on its portal and of that 891 are in the UAE.

Back at Mercure Abu Dhabi, the hotel’s chief engineer wants to put in more energy-saving features.

“But it requires [a] big budget,” Mr D’Veiga says.

“Also, we have lots of used disposable batteries, bulbs and lights that we are storing because there is no

supplier who can collect these.”


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ITALY AND CHINA HIGH PRIORITIES

FOR TCA ABU DHABI

THURSDAY 05 FEBRUARY 2015

Italy and China are at the forefront of the Abu Dhabi tourism agency’s agenda.

The Abu Dhabi Tourism and Culture Authority (TCA Abu Dhabi) has partnered with 14 Italian tour

operators and destination management companies to promote the emirate. Next month, a delegation is

to visit Milan as part of the agency’s Europe Destination Road Show.

The emirate’s hotels registered 55,619 Italian guests last year, up 19 per cent over the previous year.

They stayed an average of 4.31 nights, ahead of the market average of 2.99 nights, according to TCA

Abu Dhabi.

This year, after Etihad signed deals with Italy’s Alitalia, air capacity between Abu Dhabi and Italy

increased 66 per cent. There are now 35 direct flights per week, and the frequency from Milan and

Venice has tripled.

“There remain clear opportunities to grow the sector further,” said Mubarak Al Nuaimi, the director of

promotions and overseas offices at TCA Abu Dhabi.

Outbound tourism flows in Italy increased last year to 16.14 million trips, up by 5.6 per cent over the

previous year, according to Euro monitor International. Spending abroad also increased to €20.1 billion

(Dh84.36bn).

That came after a year of decline because of the European economic and financial crisis affecting

Italians’ available income.

In 2018, Italians are expected to make 20 million trips abroad and spend €22.2bn.

Visitor numbers from China, the other fast-growing source market, are also set for a boost.

Next week, in association with the Beijing-based China Tourism Academy, TCA Abu Dhabi will issue the

academy’s Welcome Chinese certification to more than 20 hotels and attractions in Abu Dhabi.

To qualify for the basic bronze level of certification, a hotel must provide Chinese television channels,

distribute the Welcome Chinese magazine in all rooms and offer special discounts and services to

Chinese tourists, according to welcomechinese.com.

Abu Dhabi last year reported 120,350 guests from China, an increase of 166 per cent, making it one of

the top five overseas markets. Much of the number comprised the 10,000 agents of the Chinese

cosmetics company Nu Skin who visited as part of an incentive trip.

The number of Chinese tourists expected to have travelled abroad last year is estimated to exceed 100

million, up from about 99 million the previous year, according to the Centre for Aviation.

The seat capacity between China and the Middle East was low compared to other destinations. As of last

July it was about 76,000, compared to 1.4 million in north-east Asia, which includes Japan and South

Korea, and 217,452 in western Europe.

However, Etihad Cargo increased the capacity last March on its Abu Dhabi-Chengdu route. The capacity

to and from the Chinese city grew to 40 per cent to 930 tonnes per month. The passenger service

between Abu Dhabi and Chengdu also became a daily service from five times a week on an Airbus A330.






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A HEAD FOR HEIGHTS WITH DH19

MILLION THREE-BEDROOM PENTHOUSE

NEXT TO BURJ KHALIFA

THURSDAY 05 FEBRUARY 2015

Property investors around the world will always talk of “location, location, location”. But in Dubai you

can add “elevation, elevation, elevation” in to the mix.

And I don’t mean the sky high price of this Dh19 million three-bedroom penthouse in Downtown Dubai.

Such is the ubiquity of tall buildings and the love of apartment living in the UAE that a serious premium

is paid for the height one resides at. How much of a premium is not an easy equation to analyse, as

height does not always mean expensive; the location, finishing and aspect all come into play.

This property has an A1 location – it is Downtown Dubai, attached to The Dubai Mall; the finishing is

also A1, being part of Emaar’s The Address Dubai Mall hotel; the elevation is impressive as the

apartment sits on the 44th floor.

However, with the world’s tallest building next door, it may have an inferiority complex.

The aspect is the only sub-A grade, and that is a purely subjective opinion. If you live next door to Burj

Khalifa it’s a pity you can’t see it.

The 4,147 square feet penthouse comes fully furnished. It is currently rented. It has the luxury of high

ceilings, a fully equipped open kitchen with fridge, dishwasher, electric cooker and washing machine

ready to go.

More importantly, with the pad part of the hotel complex, there is the option to buy-in the five star

lifestyle. Rates can include Wi-Fi, cable TV and Dewa charge, two covered parking spaces available with

access to the pool and gym. Housekeeping is not included but can be provided à la carte and paid on a

pro-rata basis.

The Downtown area has become one of the most desirable in the Middle East, with millions of tourists

flocking to see Burj Khalifa, the Dubai Fountain and the world’s biggest shopping mall.

The Old Town features traditional Arabian architecture in a low-rise community with Burj Khalifa

dominating the skyline.


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FIVE REASONS WHY IT MAKES

FINANCIAL SENSE TO BUY THAN RENT

A PROPERTY

FRIDAY 06 FEBRUARY 2015

Home ownership rates in Europe vary from Germany at 53 per cent to Romania at 96 per cent (the

United States is 65 per cent), according to national data. Many around the world, including in the UAE,

choose to own their own home because it makes financial sense. Here are five reasons why:

1. Inflation-proof investment

Inflation in the third quarter of last year was 4 per cent, according to Abu Dhabi Statistics Centre. This

means things such as food, fuel, rent, etc appreciated in cost by 4 per cent. Inflation means that if you

keep your money in a bank account at 1 per cent interest you are actually losing 3 per cent of that sum

per year in real terms, as everything else is getting more expensive but your money stays almost the

same. When you put your money in an asset that also appreciates along with inflation then you do not

lose money. Very few banks offer anywhere near 4 per cent interest, so investing in an asset makes

sense.

2. Capital appreciation

Let us take a real example: a three-bed apartment on Raha Beach, Al Muneera, in Abu Dhabi is about

Dh190,000 to rent annually and Dh3.2 million to buy. When you buy a home with Dh3.2m of your own

money and the home appreciates along with inflation by 4 per cent per year then you make 4 per cent

on your money. If you buy a home worth Dh3.2m with just Dh800,000 (which is the minimum 25 per

cent down payment required) and the other Dh2.6m of debt, and then your home appreciates by 4 per

cent, you a get 16 per cent return on your Dh800,000 outlay. Sounds like a trick? It isn’t.

The asset is worth Dh3.2m — an increase of 4 per cent is Dh128,000. Whether you own the house

outright or have borrowed to finance it, that Dh128,000 is added to the equity (the value of the house

less debt owed to the bank) in the house, the bank does not get any of it. Your repayment stays the

same and the amount owed to the bank is not adjusted. This is called leverage. Over five years it would

add about Dh700,000 to the equity.

Warning: watch out when the market falls and leverage works the other way. Your bank does not take

gains when your house appreciates, but also will not take losses if it goes down.

3. Paying down equity

When you rent, your money goes straight into your landlord’s pocket. When the property is yours you

either own it outright or more likely you have finance on it. The repayment on a Dh2.6m loan over 25

years is about Dh152,000 per year. That is Dh38,000 less than the amount to rent the same unit. The

best thing is not just the Dh38,000 saving per year but your Dh152,000 repayment now goes to paying

off your mortgage, adding to the equity.

Initially not a lot of your repayment goes to paying down the equity. In the first year the outstanding

mortgage amount only decreases by about Dh57,000, but by the fifth year this rises to Dh67,000. The





rest is used to pay back the interest to the bank. Over five years you would have paid off around

Dh300,000 of debt and Dh460,000 towards interest repayments.

Warning: you need to add on the hidden cost of service charges on the building; a unit like this would

charge around Dh20,000 per year, or Dh100,000 over five years.

4. Rent insulation

According to JLL, rents in Abu Dhabi over the past two years recorded 20-25 per cent increases, and,

according to Colliers, the capital is facing a housing shortage of more than 50,000 units. Abu Dhabi

rents are not falling (unlike Dubai) any time soon. If you own your own home your rent is the amount

you are repaying to your bank every month, and with a fixed mortgage that amount does not change.

5. Pure financial sense

Assuming that everything works as it should, over five years your property will appreciate by Dh700,000

and you will pay off Dh300,000 of debt. Deduct Dh460,000 of interest and another Dh100,000 of service

fees and you come out with a Dh440,000 positive return — more than 50 per cent on your Dh800,000

investment and you have not paid any rent. If your rent is Dh190,000 per year over five years that is

Dh950,000, and that is assuming no rent rises. The difference between buying and renting is around

Dh1.4m. Even if your home does not appreciate in value a single fil, you still come out ahead by

Dh700,000.


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RAK PROPERTIES PROFIT EDGES UP TO

DH155.7 MILLION IN 2014


RAK Properties posted a 3.4 per cent increase in net profit last year, buoyed by strong revenues in the

fourth quarter, the company said on Sunday.

Net profits last year edged up to Dh155.74 million from Dh151m in 2013, the firm said. Revenues in the

fourth quarter of last year were Dh297.8m.

The company did not give a comparable figure for the fourth quarter of 2013, nor did it give fourth-

quarter net profit figures.

“The results of the fourth quarter of 2014 also reflect the increased level of investments being made in

Ras Al Khaimah as it continues to attract regional and international investors to take advantage of its

many potential opportunities,” said Mohammed Sultan Al Qadi, the managing director and chief

executive.

Rental rates in Ras Al Khaimah grew 5 per cent in the third quarter of last year, according to the

property broker Asteco.

Shares in RAK Properties last traded at 78 fils each. Over the past year they have ranged from a high of

Dh1.52 in April to a low of 57 fils in December.

The company’s total assets last year reached Dh4.7 billion, nearly unchanged from the total assets

recorded in 2013.

“2014 has seen an impressive growth in our business portfolio, in conjunction with the allocation of a

budget of Dh1bn to develop and expand the Mina Al Arab development project, and the completion of

new facilities that include an environmental hotel and a set of residential villas as part of projects that

are being implemented during the current year,” said Mr Al Qadi.

“There is no doubt that the introduction of Flamingo Villas and Bermuda Villas have contributed greatly

in enhancing our performance levels. The recent results have prompted us to continue our intensive

efforts to launch new projects and deliver Flamingo Villas by the end of this year, in line with our pursuit

to develop the urban landscape of Ras Al Khaimah.”

In 2013, Rak Properties launched Flamingo Villas, consisting of 104 villas to be built in the Dh10bn Mina

Al Arab project. In November last year, the firm began building the 157 properties of Bermuda villas

project in Mina Al Arab.

Demand for residential property in the Northern Emirates is expected to slow this year because of the

stabilisation of the property market in Dubai, which reflects on the property market in Ras Al Khaimah,

Asteco said in a third- quarter report for the Northern Emirates.


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With 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, Jordan 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]

Julia Knibbs MSc

Manager – Research and Consultancy - UAE

+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.

NEWS BRIEF 06 - Asteco Property Management · 2016-05-29 · RUSSIAN TOURIST SHORTAGE TO BE FELT AT...

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Transcript of NEWS BRIEF 06 - Asteco Property Management · 2016-05-29 · RUSSIAN TOURIST SHORTAGE TO BE FELT AT...