NEWS BRIEF 06 - Asteco Property Management · dubai house prices and rents still slipping but worst...

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IN THE MIDDLE EAST FOR 30 YEARS

ASSET MANAGEMENT SALES LEASING

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RESEARCH DEPARTMENT

NEWS BRIEF 06 SUNDAY 07 February 2016





REAL ESTATE NEWS

UAE

LOW OIL PRICE TO HIT ALL SECTORS AS GULF ECONOMIES SLOWDOWN

DUBAI

DUBAI INTERNATIONAL CAPACITY TO GO TO 118M PASSENGERS BY 2023: GRIFFITHS

ASTECO NAMED EXCLUSIVE SALES AGENT FOR CITY APARTMENTS

REVEALED: THREE MOST 'POPULAR' DUBAI COMMUNITIES

DH100 MILLION MANSIONS SOLD IN DUBAI'S MBR DISTRICT ONE

EMAAR WAIVES 4% TRANSFER FEE, AGENTS GIVE UP 2% COMMISSION

NAKHEEL AWARDS DH1.4 BILLION THE PALM GATEWAY CONTRACT

DUBAI WINS BID TO HOST 20TH WORLD LAND REGISTRATION CONGRESS

DUBAI RESIDENTIAL RENTS FALL 10%... 17,400 NEW UNITS DELIVERED

ARCHITECTURAL WONDER AS GREAT AS BURJ KHALIFA AND EIFFEL TOWER: MOHAMMED

WORKING IN ABU DHABI? NOW, FLEXIBLE WORK HOURS DURING BAD WEATHER FOR YOU

STAY GROUNDED WITH THIS RARE DUBAI MARINA DUPLEX

DUBAI-LISTED DEVELOPER AL MAZAYA AIMS FOR DOUBLE-DIGIT GROWTH THROUGH 2020

ARCADIS REPLACES WAEL ALLAN AS MIDDLE EAST HEAD

UNION PROPERTIES PROFIT PLUNGES IN DUBAI SLOWDOWN





THE 5 IMPORTANT THINGS IN BUSINESS RIGHT NOW

DUBAI HOUSE PRICES AND RENTS STILL SLIPPING BUT WORST APPEARS TO BE OVER

SALES AND RENT INCREASES LIFT AL MAZAYA PROFIT

EUREKA MOMENT FOR HOMES OR HOUSES WITH DUBAI CROWDFUNDING PLATFORM

SSANGYONG AND BESIX WIN CONTRACT FOR $1.4 BILLION ROYAL ATLANTIS RESORT PROJECT IN DUBAI

NAKHEEL IN STRONG SHOWING WITH DH4.38B NET PROFIT

ABU DHABI

WORKING IN ABU DHABI? NOW, FLEXIBLE WORK HOURS DURING BAD WEATHER FOR YOU

3,000 ILLEGAL OCCUPANCY VIOLATIONS RECORDED IN ABU DHABI

NORTHERN EMIRATES RUSSIAN TOURISM SET TO RECOVER IN RAS AL KHAIMAH





WORKING IN ABU DHABI? NOW,

FLEXIBLE WORK HOURS DURING BAD

WEATHER FOR YOU

SATURDAY 06 FEBRUARY 2016

The Abu Dhabi Executive Council issued a circular to government entities and companies operating in

Abu Dhabi requesting the adoption of controls and regulations, and the taking of necessary measures to

guarantee flexible office working hours for employees under bad weather conditions in order to ensure

their safety and avoid road accidents.

The circular included a number of guidelines that ask government entities to set the appropriate internal

regulations, controls and instructions to guarantee the safety of employees and maintain the work flow.

They come in response to occupational and human resources safety and health requirements aimed at

supporting the implementation of procedures and regulations proposed in this regard.

The circular further requested coordination with concerned entities to identify bad weather conditions

that may require entities to warn their employees and informing them of such conditions using internal

communication channels.

It also called for raising awareness on the importance of avoiding being on the road during bad weather

conditions and bad visibility, and to give priority to external roads.

Major General Mohammed Khalfan Al Romaithi, Head of the Security, Justice, Health and Safety

Committee at the Abu Dhabi Executive Council stated that "Guaranteeing the safety of employees is the

top priority on the agenda of the Government of Abu Dhabi.

“The Executive Council’s decision improves the performance system and confirms the importance of

human capital as the engine of any progress. It was, therefore, necessary to make available all means

possible to ensure the employees’ safe arrival to and departure from work according to the best public

safety requirements."

He added: "Coordination is ongoing with government entities within the Government of Abu Dhabi to

implement a mechanism to immediately execute the circular, and improve communication channels with

employees to inform them of such conditions.”

Source: Emirates 24/7

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ARCHITECTURAL WONDER AS GREAT

AS BURJ KHALIFA AND EIFFEL TOWER:

MOHAMMED

SUNDAY 07 FEBRUARY 2016

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE

and Ruler of Dubai, on Saturday reviewed the designs proposed by international consultancy houses for

a new tower to be built by Emaar in the Dubai Creek area.

This came during Sheikh Mohammed's visit to a show held at Burj Khalifa, displaying designs by six

consultancy companies bidding for the designing package of the tower contract.

He was accompanied by Mohammed Ali Al Abbar, Chairman of Emaar Properties, Khalifa Saeed

Sulaiman, Director-General of Dubai Protocol and Hospitality Department and Fadil Al Ali, CEO of Dubai

Holding.

Sheikh Mohammed approved the selection of a design by the Spanish-Swiss neo-futuristic architect

Santiago Calatrava.

The design is inspired by Islamic architecture and meets requirements of modern times, as well as local

environment and culture.

Sheikh Mohammed welcomed the idea of the new tower as another landmark and a tourist attraction in

the UAE.

The observation tower in Dubai Creek Harbour is designed by Santiago Calatrava Valls, renowned

Spanish/Swiss architect, structural engineer, sculptor and painter. (Supplied)

He said the march for sustainable development in the UAE is moving steadily to meet the aspirations of

the Emirati people and described the new tower as an "architectural wonder that will be as great as Burj

Khalifa and Eiffel Tower”.

Al Abbar thanked Sheikh Mohammed for his continuous support and his confidence in Emaar's projects.

He said the new tower will prove to be a cultural and tourist icon with its unique design and engineering,

adding that the construction of the tower will begin in a few months' time.

The tower will be part of the multi-billion-dollar Dubai Creek Harbour in Dubai Creek.It has been

designed by Santiago Calatrava Valls, a Spanish/Swiss architect, who has worked on the World Trade

Centre Transportation Hub in New York, Chicago Spire Tower, Calgary Peace Bridge and the Olympic

Sports Complex in Athens. The height of the tower has not been revealed.

The developer said that the design was short-listed from a competitive international design pitch.

The tower, which has not been named yet, will be directly linked to the central island district of Dubai

Creek Harbour, a six million square metre mixed-use development.





The mega project will house 3,664 office units, eight million square feet of retail space, 39,000

residential units and 22 hotels with 4,400 rooms, while the centerpiece will be the ‘Dubai Twin Towers’

that will be the tallest twin towers in the world.

Burj Khalifa, the world’s tallest tower, built by Emaar, has the world’s highest observation deck - 'At The

Top, Burj Khalifa Sky' - on the 148th floor (555 metres). It has two other observation decks on 24th

floor and 125th floor.

A number of other mega tall towers in Dubai will have observation decks as well.

Dubai Multi Commodities Centre has announced plans to have a 360 degree observation deck on the

700-metre-plus Burj 2020, billed to be the world’s tallest commercial tower.

The Dubai One, set to become the world’s tallest residential tower, will house an observation deck at

655 metres.

The 618-metre Canton Tower, world's third-tallest structure, is currently home to the second highest

publicly accessible observation deck at 488 metres followed by Shanghai World Financial Centre with its

Skywalk 100 - a 55-metre-long glass bridge – at 474 metres.


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ASTECO NAMED EXCLUSIVE SALES

AGENT FOR CITY APARTMENTS

TUESDAY 02 FEBRUARY 2016

Asteco, a real estate consultancy, announced it has been appointed as the exclusive sales agent for the

new City Apartments development located within the Jumeirah Circle community.

The residential complex includes 67 one-bedroom apartments along with retail space, and is being

developed by Virtue Properties.

It is set to be handed over in December 2016. Selling prices range from Dh708,170 to Dh947,832.

Unit sizes range from 809 square feet for a one-bedroom apartment, up to 1,272 square feet for a prime

garden unit.

Source: Gulf News

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DUBAI RESIDENTIAL RENTS FALL

10%... 17,400 NEW UNITS DELIVERED

FRIDAY 05 FEBRUARY 2016

A total of 17,400 units were delivered in Dubai in 2015, as rentals fell 10.4 per cent, according to a

report by ValuStrat, a real estate consultancy.

In its fourth quarter 2015 report, the company said 14,000 apartments and 3,400 villas were delivered

while seven off-plan residential projects were launched in during the quarter, adding over 1,500 units to

the residential pipeline by 2018.

“Around half of the residential projects originally scheduled for completion in 2015 are delayed and have

been rescheduled for handover during 2016 and 2017, reflecting a continued construction sector

slowdown,” Haider Tuaima, ValuStrat Research Manager, said.

The ValuStrat Price Index (VPI) for fourth quarter showed a 6.4 per cent decline of values year-on-year,

showing no significant change in values on a quarter-on-quarter (Q-o-Q) basis. The index compares 26

freehold locations.

“More cash investors are seeking projects by well reputed developers particularly for ready properties,”

the consultancy said.

Apartment and villa markets saw values marginally decline by 0.1 per cent and 0.4 per cent Q-o-Q,

respectively. The median apartment value in December was Dh14,122 per square metres (sqm) and for

villas was Dh14,660 per sqm.

Median residential asking rents dipped by three to five per cent in comparison to the same period last

year. On a quarterly basis, residential asking rents declined by 2.3 per cent. Overall, residential rents

were 10.4 per cent lower than the same period in 2013.

The company said that statistical analysis suggests that 2016 may witness a plateau in prices, indicating

a buyer’s market in anticipation of higher rental yields for mid-affordable properties, and increased

interest in prime properties in a search for capital appreciation.

In January 2016, JLL, a property consultancy, said the UAE was unlikely to see oversupply of housing

units and commercial space in 2016, but rentals will soften in the short term.

“A by-product of the slowing market conditions in 2016 is likely to be a continuation of the trend of

project delays. This will represent something of a ‘blessing in disguise’ and will help stabilise the market

and avoid excessive oversupply,” it said in its ‘2016 Top Trends for UAE Real Estate’.

Property consultancy Land Sterling 2015 report said gross rental yields across majority of freehold

communities ranged from 6 to 10 per cent.

In comparison, Global Property Guide, a website that compiles and analyses property price performance

of the world's big economies, states gross rental yields in Hong Kong are 2.82 per cent, India 2.22 per

cent and Singapore 2.83 per cent, London between 2.72 per cent and 3.20 per cent.






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DUBAI WINS BID TO HOST 20TH

WORLD LAND REGISTRATION

CONGRESS

WEDNESDAY 03 FEBRUARY 2016

Dubai beat several countries to win a bid to host the 20th World Land Registration Congress in February

this year. Dubbed ‘Cinder Dubai 2016’, the Congress will be organised from February 22 to 24 by the

International Property Registries Association (IPRA-CINDER) in association with the Dubai Land

Department (DLD).

Themed ‘Smart Registration for a Smart City’, the congress will focus on land registries as producers of

data and smart registration in sustainable cities.

Sultan Butti Bin Mejren, Director General of Dubai Land Department, said, “The selection committee’s

trust in Dubai to host an event as big and all-encompassing as Cinder Dubai 2016 reflects the global

standards maintained by Dubai as one of the leading destinations for big events. The bid was a hard-

won victory for us. We were selected based on criteria such as transparency, investor confidence and

legal certainty.”

He said that Dubai successfully highlighted its achievements in the fields of real estate registration and

legislation. “Dubai’s privileged geographical location, its beautiful surroundings and its high standards

definitely helped to showcase its attractiveness as the ideal venue for this event,” he added.

DLD expects to receive nearly 500 guests representing more than 50 countries around the world. In

addition, 50 expert speakers will share their insights on 18 of the most trending topics in the real estate

industry.

Bin Mejren further said: "By organising this conference, DLD aims to highlight its role in servicing the

real estate sector. Guests will be able to experience Dubai’s modern, contemporary ambience in all

aspects of the real estate industry. Through this event, we wish to promote our achievements and rally

support for our initiatives surrounding the specifics of international real estate registration law."

Cinder Dubai 2016 will serve as a platform to showcase the most important achievements in the field of

real estate registration. In addition, the congress aims to reach a global consensus on unified

international laws for the effective governance of real estate registration, including the use of

technological advances such as smart registration.


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NAKHEEL AWARDS DH1.4 BILLION THE

PALM GATEWAY CONTRACT


Dubai developer Nakheel has awarded a construction contract worth nearly Dh1.4 billion for The Palm

Gateway, a new, three-tower residential, retail and beach club complex at the foot of its flagship master

development, Palm Jumeirah.

Nakheel has appointed Ssangyong Engineering and Construction Co Ltd (Dubai Branch) and China State

Construction Engineering Corporation (Middle East) LLC to carry out the work, which is expected to

begin in Q1 2016 and take just over two years to complete.

The Palm Gateway includes 1,265 luxury homes across three high-rise buildings - the tallest topping

285 metres - to be constructed on top of the existing Palm Monorail terminal, which includes 14 levels of

parking spaces. Apartments range from one to three bedrooms and will be available on lease.

The waterfront living and leisure complex, set in extensively landscaped grounds, will also have an

abundance of retail, dining and health and fitness facilities, including parks, pools, and sports courts.

Located at the entrance to Palm Jumeirah, The Palm Gateway will boast convenient transport links to

other parts of the island and to the rest of Dubai.

The Palm Monorail, which will remain operational throughout the construction of the project, is already

connected to the Dubai Tram and the Dubai Metro, giving residents and visitors easy access to

alternatives to the car.

With panoramic views of Palm Jumeirah, the Arabian Gulf and some of Dubai's most famous landmarks,

The Palm Gateway will also have its own beach club and park - a shaded, landscaped complex with a

diverse range of waterfront dining and shopping options, pool, barbecue areas and fitness facilities,

including a jogging track.

The Palm Gateway is one of number of projects in Nakheel's growing residential leasing portfolio, which

is set to increase to more than 20,000 units, with other new developments coming to Palm Jumeirah,

Warsan Village, Jebel Ali, Dragon City and Nad Al Sheba.


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EMAAR WAIVES 4% TRANSFER FEE,

AGENTS GIVE UP 2% COMMISSION

MONDAY 01 FEBRUARY 2016

Here is the best part of buying a property in Dubai today: You don’t pay the four per cent registration

fee and the two per cent agent commission, thus saving six per cent in the deal.

And that’s not all. The units offered for sale are ready to move in.

The offer is valid on Emaar Properties’ Casa villas in Arabian Ranches.

As per the emailed offer, the buyer will have 12 months to make the full payment with the property

agency stating that there will be no agency commission (2 per cent), no transfer charges (4 per cent);

and the Oqood land registration charge (4 per cent) will be paid by Emaar.

The villas for sale are V188, which is four-bedrooms plus study, but the study has an attached bathroom

that allows one to convert it to a five-bed.

Listed prices range between Dh3.7 million and Dh4.4 million.

Property consultancy Land Sterling said in its fourth quarter 2015 report that average price per square

foot was Dh1,177 per square feet compared to Dh1,378 in 2014, while average rents stood between

Dh165,000 and Dh323,000 per annum (pa) compared from Dh176,000 to Dh338,000 pa in 2014.

Gross and net rental yield was at 6.3 per cent and 6 per cent, respectively, compared to 5.6 per cent

and 5.30 per cent, respectively, in 2014.

Making it easier for salaried people to own property, Aqua Properties, a real estate company, is offering

a seven-year monthly payment plan for units in Skycourt Towers, Dubailand.

The company has purchased 178 units worth Dh91 million in the project and is reselling them under a

scheme offering studios from Dh4,000 a month; one-bedroom units from Dh9,000 per month and two-

bedroom units from Dh13,000 a month.

It claims investors can expect a return on investment of above 10 per cent.

The company has already sold 51 units, it said in an emailed statement sent to Emirates 24|7.

“Although there will be no down payment for apartments, there is a one-off premium booking fee and a

2 per cent agency fee. The unit buyer will have to pay 4 per cent transfer fee at the end of the seventh

year along with an admin fee of Dh1,000,” the statement said.

Title deeds will be issued at the end of the seventh year, or upon full payment.

The estimated service charges per square feet is Dh13, but under the offer service charge has been

waived for a year.

Real estate agents put the current average sales price of studio, one- and two-bedroom units at

Dh400,000, Dh650,000 and Dh925,000, respectively.





“Our investment reflects our beliefs and stems from our experience and expertise of the local property

market. Skycourt apartments offer not only the opportunity to own an affordable home, but present an

excellent investment,” said Paul Christodoulou, Chief Operations Officer, Aqua Properties.

The project has over 2,800 apartments in six towers.

UAE attractive

In January 2016, JLL, a global real estate consultancy, said the UAE remains an attractive real estate

market and some buyers, especially owner-occupiers and those investors taking a long-term

perspective, may well see value at current levels.

“Overall, we remain confident that while prices and rentals will soften further in the short term, they are

likely to increase again, perhaps as soon as 2017, as the UAE continues on its’ path to becoming a more

mature real estate market,” the consultancy said.

It ruled out oversupply in Dubai and Abu Dhabi residential and commercial space in 2016 with total unit

completion ranging between 12,000 and 18,000 though developers expect to deliver 36,000 units this

year.


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DH100 MILLION MANSIONS SOLD IN

DUBAI'S MBR DISTRICT ONE


Meydan Sobha, the developer of the Dh21-billion mega Mohammed Bin Rashid Al Maktoum City –

District One, has sold mansions costing up to Dh100 million.

“Yes, there is demand for these eight-bedroom mansions and we have sold quite a number of them,”

PNC Menon, Group Chairman, Sobha Group, told Emirates 24|7, post launch of the third phase of the

project.

Saeed Humaid Al Tayer, Chairman of Meydan Group, revealed that the project would target the upscale

market and the show mansion would be completed by May 2016.

Meydan Sobha is a joint venture project between Dubai’s Meydan Group and India’s Sobha Group.

The first and the second phases, comprising almost 460 villas, have been fully sold out.

The third phase will have 217 villas. Though the prices of the new phase were not disclosed, prices

started from Dh15 million onwards in the earlier phases.

“We are creating a beautiful, luxurious community offering the most central freehold villa properties in

the heart of the city’s centre overlooking what will become the world’s largest crystal lagoon,” Al Tayer

said.

Optimism

Maintaining an optimistic view on the Dubai real estate market, Menon said they were committed to

meeting their delivery schedule.

“Construction of both phases is progressing well. We expect keen demand for the villas in the new

phase as well, as we are offering home owners with bigger plots, a variety of new floor plans and an

option to include a basement.”

The handover for phase one will commence mid-2016, while phase two will be completed by 2017.

To meet the 2018 handover date for phase three, the developer currently has over 9,000 workers on

site for the construction of the villas, with another 1,000 engaged in infrastructure works.

Major buyers in the project are from the Far East, North and South America, and India.

District One, situated close to the Meydan One, will house a shopping mall, the world’s tallest

residential tower and indoor ski-slope, will have one of the largest - a seven kilometre Crystal Lagoon

and manmade beachfront – and a 14 kilometre boardwalk.

The company has already delivered the 8.4-kilometre cycling and running track.

Integration





Asked how the master developer was working on integrating the transport network in the MBR City

development, Al Tayer said they have been working with the Road and Transport Authority, Dubai

Municipality and other authorities to ensure was a cohesive development.

“Since 2007, we have worked with authorities to revisit our infrastructure phases.

“The phases have not been on an ad hoc basis. The Al Khail Road improvement is part of efforts to

improve the network in the development,” he added.


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REVEALED: THREE MOST 'POPULAR'

DUBAI COMMUNITIES


Majority of visits on property portal in Jan 2016 for properties in Dubai Marina, Downtown Dubai and

Palm Jumeirah. Property prices in emirate are far lower than London, Hong Kong. (Supplied)

Upscale freehold communities of Dubai are finding interest from international buyers, a real estate

consultancy claims.

PropertyTrader.ae reveals that the majority of clicks from visitors in January 2016 were for properties in

Dubai Marina, Downtown Dubai and Palm Jumeirah.

Dubai Marina registered 23 per cent of all searches, followed by Downtown Dubai 21 per cent and Palm

Jumeirah with 15 per cent.

“It is no secret that the property market right now is a little slow due to low oil prices and a few other

factors, and I think many investors are scenting a bargain, with the chance to make a fortune when

things pick up later down the line,” company Sales & Marketing Director Umer Ali said.

No information was give on the category of the properties.

Apartment and villa prices fell 11.1 per cent and 10.9 per cent year-on-year in December 2015,

Reidin.com said.

Consultancy firm Deloitte also put the average residential property price decline at 10 per cent for

2015, stating it was expecting prices to drop further this year, which would reflecting a transition to a

more mature market.

The consultancy expects 10,000 units will be delivered this year, while JLL, a real estate consultancy,

believes completion of between 12,000 and 18,000 units.

Property prices in Dubai are far less than London, Hong Kong, Singapore and India, while rental yields

are as high as 6 to 10 per cent, rated among the highest in the world.


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DUBAI INTERNATIONAL CAPACITY TO

GO TO 118M PASSENGERS BY 2023:

GRIFFITHS


Dubai International is to be expanded to handle 118 million passengers a year by 2023, 18 million more

than the previously slated cap of 100 million passengers, Dubai Airports’ Chief Executive told Gulf News

on Monday.

The decision to increase capacity has been taken as an “insurance policy” against any possibility of a

delay in the expansion of Al Maktoum International at Dubai World Central ( DWC ), Paul Griffiths said in

an interview at Dubai International.

“If we cap DXB [Dubai International] in 2020 at 100 million [passenger] that would potentially be five

years before there would be any further growth … that would be an unacceptable situation to plateau

and allow other airports to get ahead,” he said.

DWC is set to be expanded to handle 120 million passengers a year by 2025, up from 5 million

passengers today, the same year Emirates has said it would shift over to the new airport.

But there are questions over whether the project can be delivered on time. In September 2014, when

the expansion was announced, he told Gulf News the project would need to break ground that year to be

ready on time. On Monday, Griffiths said construction has not started with the project still in the design

stage. Still, he also said 2025 remains the target date for delivery.

The extra 18 million in passenger capacity to be found at Dubai International by 2023 is largely to come

from a technology and streamlining processes rather than building new terminals, Griffiths said. This

includes a target to increase aircraft landings and take-offs to between 40 and 41 an hour in peak

periods, up from 36 to 37 today.

Emirates, the biggest airline at Dubai International, is likely to welcome the plans to further expand the

airport. It has previously warned of increasing congestion at Dubai International, something that it fears

could choke its own growth.

“We’ve created that buffer capacity at DXB to allow continual growth here because what we don’t want

to do is get into a situation where there is no more airport capacity to allow Emirates to continue to

grow. And as an insurance policy in case there is a delay of producing DWC Phase Two,” Griffiths said.

Also on Monday, Dubai Airports said Dubai International passenger numbers grew in 2015 by 10.7 per

cent to 78.01 million. Next year, Griffiths is forecasting around 89 million passengers despite a gloomy

global economic outlook due to a slowing down in China and the weakening oil price.

Many of those passengers will pass through Terminal 1’s newly built Concourse D, which Griffiths said

will open later this quarter. The new concourse will cater to all airlines currently operating in Terminal

1’s Concourse C, except for Emirates. When Concourse D opens, Emirates will take over Terminal 1’s





Concourse C, which will also be refurbished, including upgrading gates for Airbus A380 aircraft and

Boeing 777 sized aircraft.

Flydubai to head to DWC by 2020

Over the longer term, Emirates will start to move into Concourse D around 2020 when “regional airlines”

shift over into Terminal 2, which is currently occupied by flydubai, Griffiths said. By 2020, flydubai will

have moved the majority of its operations to DWC , he said.

“Capacity here [at Dubai International] is limited and it makes use of scarce resource to put large

airplanes on the slots that are available here,” Griffiths added.

Flydubai operates a fleet of Boeing 737s, narrow-body aircraft, and in October 2015 it started split-hub

operations from DWC .

Asked about Griffiths comments, flydubai Chief Executive Ghaith Al Ghaith told Gulf News by email,

“With the delivery of more than 100 aircraft due between the second half of 2016 and 2023 we remain

focussed on supporting travel, trade and tourism by enhancing connectivity from Dubai’s two airports.”


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LOW OIL PRICE TO HIT ALL SECTORS

AS GULF ECONOMIES SLOWDOWN


The drop in oil prices will be felt all across the sectors, experts said as the UAE banks report less profits

and companies lay off workers feeling the heat of low oil prices that have brought in record budget

deficits in Gulf economies.

The National Bank of Abu Dhabi posted a 25 per cent drop in fourth-quarter profit last month and RAK

Bank cut as many as 250 jobs as it adjusts to slowing growth.

Earlier this week, international law firm Simmons & Simmons announced that they would be relocating

to Dubai from Abu Dhabi due to lack of business.

“We would be moving to Dubai in April. The low oil price is definitely impacting,” Adrian Nizzola, a

partner in Simmons & Simmons told Gulf News.

“Companies are likely to scale down operations or shut their offices. Demand has slowed down and

people are being relocated. Some are even losing jobs. It’s very challenging,” he added.

“The sentiment in the market is cautious but slightly optimistic. They think that the budget can be

planned.”

An oilfield services company based in Dubai said the number of job applications has risen in recent times

as companies lay off workers to cope up with the revenue losses.

“Job applications from oil industry professionals have increased ten times in the last few months. Some

of them are well qualified and are ready to work for less salary,” said Ashik Subhani Sulaiman,

managing director of Great Water Maritime which supports the oil industry.

“The scenario is gloomy. Many companies in the UAE are reducing their staff forcing people to look for

jobs elsewhere. No new projects are coming online,” he added.

From a peak of $115 (Dh422) per barrel in June 2014, oil prices slid to less than $30 in recent times as

oil production peaks across the globe. The World Bank predicted an oil price of $37 per barrel in 2016.

Non-oil sectors

The low oil price environment is likely to affect all sectors and slowdown the economy, a London based

energy expert said.

“The non-oil sector in these countries is virtually dependent on the oil revenues through contracts given

to them by the GCC governments. A continuation of low oil prices will damage the non-oil sector very

badly with more closures and more redundancies,” said Dr Mamdouh G Salameh, a consultant to World

Bank on energy.

Gulf economies are ushering in reforms to cope with the losses. Saudi Arabia raised fuel prices by 50 per

cent as the country posted a record $98 billion (Dh360 billion) budget deficit in 2015 due to the sharp

fall in oil prices.





The UAE deregulated fuel prices in July and a new policy linked to international fuel prices was

introduced. Bahrain and Oman have increased fuel prices last month, whereas Kuwait said they are

planning to bring in changes in fuel prices in the first quarter.

Meanwhile, the UAE Exchange does not expect remittance to grow this year. Job losses, the economy

growing slow and China crisis will have an impact on remittances, Y. Sudhir Kumar Shetty, President of

UAE Exchange said.

“This year will probably don’t see much of growth in remittance sector. The kind of three to four per cent

that we have seen in the previous years may not be there this year,” he said.

“Despite the fact we had financial crisis in 2009, at that time the major hit was construction sector. Now

the affect is multifold with job losses and slowdown in new opportunities,” he added.

Source: Gulf News

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3,000 ILLEGAL OCCUPANCY

VIOLATIONS RECORDED IN ABU DHABI


Abu Dhabi Municipality has warned residents against illegal housing practices and crowding in flats as

they could face fines ranging up to Dh200,000.

A total of 3,328 violations were recorded in Abu Dhabi last year due to illegal housing conditions,

including overcrowding in houses, the construction of makeshift homes, and other conditions that failed

to adhere to t housing safety standards issued by Abu Dhabi Municipality.

The violations were reported as part of a major campaign by Abu Dhabi Municipality to ensure that all

residential areas and housing units are safe for occupancy, with a wide range of areas covered under the

campaign, including Abu Dhabi City, Musaffah, Al Bateen, Al Wathba, and Al Shahama.

According to the municipality, violations were discovered due to diligent monitoring and inspections that

were carried out, and also assistance from members of the general public, who lodged complaints by

calling its Public Call Centre, after which the municipality was sent to investigate.

The highest number of violation was reported in Al Wathba with over 1,952 offences issued for

overcrowded living accommodations, followed by 140 violations due to disorderly additions in buildings

and villas.

The Musaffah Municipal Centre reported a total of 621 violations due to overcrowding, and 140 other

violations such as the illegal building of temporary walls, and other structures without the required

permit.

Al Shahama Municipal Centre issued 302 violations for overcrowded living accommodations, followed by

Al Bateen Municipal Centre which reported 124 violations for overcrowding, and another 46 violations

due to disorderly buildings and building of illegal structures in villas without a permit from the

municipality.

The campaigns are aimed at regulating the occupancy of residential units which are governed by laws

and regulations. Fines ranging from Dh10,000 to Dh100,000 are issued against the violator, be it a

landlord, a lessor, a lessee, an occupant or any other housing provider. Repeat violators are slapped

with a fine of Dh100,000 and above but not exceeding Dh200,000. In both cases a court ruling can be

issued mandating the removal of the violation at the expense of the violator and evacuation of the

residential unit.

According to the statement, the phenomenon of bachelors living in residential neighbourhoods in

makeshift houses cause scores of problems and challenges, including the exacerbation of overcrowding,

construction of more disorderly, partitioned and unlicensed residential units falling short of civilised

standards, the proliferation of sanitary waste on a large scale, and distortion of the urbanised

appearance.

As part of the campaign, the municipality has also released its residential units occupancy guidelines,

which contains a series of regulations that must be followed. The municipality highlights the importance

of adhering to all engineering specifications and complying with the health and safety standards in this

regard.





The municipality calls upon all community segments, including companies, investors and individuals, to

comply with the laws and regulations governing the occupancy of residential units, and cooperate with

the competent authorities to ensure sound, hygienic and sustainable living standards, provide a decent

living for all community members, terminate all elements disfiguring the urbanised outlook of cities, and

maintain societal values.

All structures must be properly licensed and approved by the competent authorities in Abu Dhabi City

Municipality as provided for in the residential units’ occupancy law. All contracts must be properly

registered according to the municipality’s tenancy contract attestation system (Tawtheeq) which

regulates the landlord-tenant contractual relationship and safeguards their rights.

Guidelines

The municipality has issued the residential units occupancy guidelines which provide for:

A maximum of three people (bachelors) are allowed to live in a room in commercial buildings.

•It is illegal to rent out halls and corridors or make partitions in residential units without seeking the

municipality’s consent first.

•Each residential unit (apartment in a commercial building or within a residential villa, attached or

detached villa) shall be occupied by one family.

•All government entities, companies, enterprises, institutions, and corporations shall provide housing for

their employees, without violating the provisions of Law No 1/2011, governing occupancy of residential

units.

•It is not allowed to rent or occupy properties built in commercial, residential or investment land plots,

nor buildings to be demolished in whole or in part.

Source: Gulf News

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STRONG PERFORMANCE IN UAE

MARKETS, BUT CAN IT LAST?


The Dubai Financial Market General Index (DFMGI) rallied 201.18 or 7.04 per cent last week to end at

3,058.42, its second best weekly performance since April of last year. There were 32 advancing issues

and only three declining. While volume fell from the prior week, it came in at the second highest level of

the past 23 weeks.

In addition to the DFMGI putting in two consecutive weeks of strong performance on healthy volume,

the index closed near the high for the week (3,063.95), at a four-week high, and above its 55-day

exponential moving average (ema) for the first time since early-August 2015. These are all bullish signs

signifying the underlying strength of this rally. The 55-week ema is a indicator telling us something

about the intermediate-term trend, and represents potential resistance when it occurs above price. A

daily close back above the moving average line is a sign of strengthening.

Further, since hitting a low of 2,590.72 three weeks ago the DFMGI has advanced as much as 18.3 per

cent. As first discussed last week, a gain of more than 16.1 per cent (2,897) from a bottom would be

the largest advance since early-May 2015. That was when the index hit its high for 2015, which

eventually led to a 39.1 per cent decline as of the the January 2,590.72 low.

Regardless of the short-term positives, the bigger picture remains tenuous. The current rally is

contained within a large 21-month downtrend, which saw the DFMGI drop 52.1 per cent as of the

2,590.72 January low. There is a potentially signficant resistance zone starting just above last week’s

high of 3.063.95, and up to the most recent swing high of 3,188.83 from late-December. On the way

there the DFMGI will have to contend with potential resistance from both a long-term uptrend line and

intermediate-term downtrend line. The two lines intersect around 3,100. Further up is 3,149/3,151,

consisting of the 200-week simple moving average (sma) and prevous monthly resistance, respectively.

The intermediate-term downtrend, which started from the late-July peak, remains in place until there is

a daily close above the December high. Until then downward pressure remains. This means there is a

good chance that the January lows will eventually be tested. Or, the January lows are exeeded to the

downside thereby triggering a continuation of the long-term downtrend.

Near-term support is at last week’s low of 2857.24, followed by 2,800.

Abu Dhabi

Last week the Abu Dhabi Securities Exchange General Index (ADI) gained 230.33 or 5.89 per cent to

close at 4,140.77. This was the largest advance in the index since May of last year, with the move

supported by a surge in volume. Volume reached its highest level since late-April 2015. Market breadth

was positive, with 27 advancing issues and eleven declining, leaving room for additional stocks to join

the advance.

The ADI ended strong, closing near the high for the week (4,147.32), and back above both its long-term

uptrend line and 200-week sma. An advance above 4,166.87 will put it at a four-week high, where it will

next be approaching potential resistance of the intermediate-term downtrend line and 21-week ema.

The 21-week ema can be used as a proxy for the trend line as they have been converging for almost

four months.





A decisive daily close above the 21-week ema will provide the next sign of strength. However, the six-

and-a-half month downtrend remains in place until there is a decisive daily close above the late-

December swing high of 4,313.78.

Last week’s low of 3,915.68 is near-term support. If that low is broken to the downside the ADI will be

back below both its uptrend line and 200-week sma, thereby increasing the odds for a test of the

3,731.56, and possible break below it.

Stocks to Watch

The National Bank of Abu Dhabi (NBAD) advanced 0.80 or 10.8 per cent last week to close at 8.18.

Volume was decent, but slightly lower than the prior week. This puts the stock at an eight-week high,

and clearly above its 55-day ema for the first time since March of last year. Also, it is now back above

the minor swing high of 8.04 from December. Each are signs of strength pointing to NBAD being a

market leader on a technical basis. The weekly close above the December swing high is an early sign of

a downtrend possibly turning into an uptrend. However, so far we’re just seeing a bounce off support of

6.86 hit three weeks ago. Next the stock needs to exceed the 21-week ema at 8.38, and then the 8.75

swing high from November to show it’s got more upside in the short-term.

A multi-month double bottom trend reversal pattern has been forming in the chart of Damac Properties.

It closed up 6.55 per cent last week at 2.44 as volume surged to a 20-month high, and has now closed

above its 55-day ema for the first time since September. These are early signs of strength as the double

bottom breakout doesn’t occur until there is a rally above 2.49. Based on just the pattern, the minimum

target would be 2.98, if a breakout occurs.

Source: Gulf News

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NAKHEEL IN STRONG SHOWING WITH

DH4.38B NET PROFIT


Dubai Government-owned developer Nakheel pulled out a strong 19 per cent increase in 2015 net

profits, to total Dh4.38 billion against the previous year’s Dh3.68 billion.

While the split between its various revenue streams was not given, it is believed that both core

development activities and the move towards creating long-term income generating assets have shown

results.

The latter includes multiple hotel assets, starting with the first one — the Ibis Styles at Dragon Mart —

which opened earlier this week. Plus, the cash coming in from its already substantial retail portfolio is

another bulwark.

Last year, Nakheel handed over 847 properties to owners at its Palm Jumeirah, Al Furjan, International

City, Jumeirah Village, Jumeirah Park and Jumeirah Heights communities. This takes the overall tally of

deliveries to around 9,700 units between 2010 and end 2015.

“Nakheel’s profits have steadily improved from Dh960 million in 2010 to Dh4.38 billion in 2015.” said

the developer’s chairman Ali Rashid Lootah.

“2015 saw the completion of Dragon Mart 2, the first phase of expansion at Dragon City which, in

subsequent years will contribute significantly in diversifying our revenue streams,” he added.

“Our strategy to have a more diversified business is taking shape. Our first hotel has opened, Dragon

Mart 2 is now operational, and we expect to complete and start operations at the first phase of Ibn

Battuta Mall expansion in 2016,” Lootah said.

“These projects will contribute to our recurring revenue which is expected to grow in subsequent years

as more projects are completed.”

The Nakheel results will bring a lot of cheer to the property market and its developer and investor

community, given the concerns they have had over the drop in transactional activity in recent quarters.

Plus, property values continue to be under strain, though in recent weeks the pace of softening seems to

have slowed. It is expected that Emaar and Damac too will be putting out solid numbers in the coming

days.

More importantly, the construction sector will be looking to Nakheel for further sustenance. The master-

developer awarded contracts worth a combined Dh8 billion last year, including for the flagship Palm

Tower as well as for Deira Islands Night Souq, among others.

In the statement, Nakheel’s chairman also confirmed the company will be dipping into its own resources

to meet an upcoming debt repayment.

“Our trade creditor sukuk is due to mature in August and Nakheel is well-placed to honour this financial

commitment from its own internal resources,” said Lootah.





This will “successfully conclude the last of any restructuring-related matter. In conjunction with this

major undertaking, we will continue to build on our improved performance in 2016 and implement our

growth plans.”

Source: Gulf News

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SSANGYONG AND BESIX WIN

CONTRACT FOR $1.4 BILLION ROYAL

ATLANTIS RESORT PROJECT IN DUBAI

SUNDAY 31 JANUARY 2016

Ssangyong Engineering & Construction is set to build the new US$1.4 billion Royal Atlantis resort at

Palm Jumeirah alongside contractor Besix (Belhasa Six Construct).

The company’s Middle East managing director, Joon Hun Kim, confirmed that it had been awarded the

project for the resort, which he said “should be another landmark for Dubai”.

The Royal Atlantis Resort and Residences will be built for Investment Corporation of Dubai (ICD), next to

its existing Atlantis resort on Palm ¬Jumeirah.

The project, which has been designed by the architect Kohn Pedersen Fox, will have 780 guest rooms

and suites and 232 serviced residences.

It will be 46 storeys tall.

Ssangyong Engineering & Construction (E&C) is a South Korean construction company which has had a

presence in the Middle East since the 1980s and in Dubai since 1997, when a previous joint venture with

Besix resulted in the completion of the hotel component of Emirates Towers.

Its last project to be completed in the region was the Grand Hyatt in 2003, on which it made a loss. It

subsequently concentrated on projects in South East Asia, but retained a branch office in the emirate.

Financial problems in its home market related to stalled property projects also led it to apply for court

receivership to reschedule debts in late 2013, and ICD subsequently bought a controlling stake in the

company last year for a reported 2 billion Korean won (Dh666.7 million).

Since then, it has renewed its focus on the region. Last month, its joint venture with Brookfield Multiplex

was named as main contractor for the $1bn ICD Brookfield Place tower being built at DIFC.

However, despite reports to the contrary in Korean media in December, it has not yet landed a deal to

build the three-tower Palm Gateway complex above the Palm Monorail Gateway -terminal.

The project by developer Nakheel will contain 1,313 ¬apartments.

Mr Kim said that it had submitted a bid alongside JV partner China State Construction Engineering

Corporation, but that Nakheel “is still in the process” of evaluating bids.

“It’s an open tender. It’s not through any special arrangement,” he said.

Mr Kim said that last year’s acquisition of Ssangyong E&C by ICD had given it greater confidence in

bidding for other projects in the region, including potential airport and infrastructure work.





“We would like to contribute our part to help the Dubai government’s preparation for 2020 Expo,” he

said. “In the Middle East, the most risk for projects come from the owners’ side. But we have no kind of

risk here in Dubai. That’s a big advantage.”

Elsewhere in the GCC, it is targeting new projects in Saudi Arabia and Qatar.

It has formed a joint venture with Saudi Binladin Group to bid for “two or three” stadium construction

projects for ¬Qatar’s Fifa 2022 World Cup.

“Hopefully, we will get at least one,” said Mr Kim. “We have experience of building Olympic and World

Cup stadiums, even though it is more than 10 years ago.”

Neither Besix nor ICD replied to requests for comment.

Nakheel’s Palm Gateway project was unveiled in 2008, but was relaunched as a luxury residential

project at Cityscape Global in Dubai in September 2014. Tenders for the project were initially launched

in December 2014 with a view to bids being submitted by March, but this was later extended to May

2015.

A spokesman for Nakheel confirmed that it has yet to award a contract for the project.

Source: The National

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EUREKA MOMENT FOR HOMES OR

HOUSES WITH DUBAI CROWDFUNDING

PLATFORM


Homes or Houses, a company that sources and rents properties for expatriates and foreign buyers

investing in UK property, has become the first international firm to raise funds using the Dubai-founded

equity crowdfunding platform Eureeca.

Jackie Fitzgerald, the company’s founder and director, is a former Arabian Gulf expatriate who spent six

years in Bahrain and seven in Dubai before returning to the north-east of England to set up Homes or

Houses in 2012.

The business is based in Blaydon – near Newcastle – and specialises in property in the region, where Ms

Fitzgerald is from. So why choose an ostensibly UAE-based platform to raise US$610,000?

“Eighty per cent of the Homes or Houses client base resides in the UAE, making it logical to use a

crowdfunding platform headquartered in Dubai,” Ms Fitzgerald says.

She was proved correct, selling 13.4 per cent of equity to investors from within her 50-person client

base.

It was Eureeca’s licence from the United Kingdom’s financial conduct authority (FCA) that ticked the box

for Ms Fitzgerald.

“While the Middle East is Eureeca’s flagship market, I didn’t view it as a Middle East platform per se; this

is largely because of its FCA regulation, which was very important for us as a UK company.”

The Eureeca co-founder and managing director Sam Quawasmi emphasises that it is a global platform.

“Creating an international corridor of investment is the backbone of our business model,” he says.

“In the UAE equity crowdfunding is unregulated, such as peer-to-peer lending. However, we have always

been ‘regulation ready’, and we use the same systems and investor protection controls approved by the

FCA in all markets in which we operate.”

Eureeca operates in Mena, Europe and South East Asia, and opened a London office after getting its FCA

licence last February. Since then, it has also been approved by the Malaysian Securities Commission and

hopes to become fully operational in Malaysia in the coming weeks.

So far 15 businesses – including the freelance firm Nabbesh, Core Fit and the fashion companies Jobedu

and Poupee Couture – have raised a total of $2.5 million using Eureeca, usually from a pool of 30 to 35

investors per deal. But after the success of Homes or Houses, the pipeline is growing, Mr Quawasmi

said, with a European technology SME now looking to Eureeca to raise $10m.

Ms Fitzgerald was persuaded by Mr Quawasmi – with whom she had worked during her five years at

Shuaa Capital – to look at more funding. “Sam suggested that my business was at the cusp of requiring

expansion capital, to prevent success from being our downfall, and he was right.





“Eureeca were great guides through the process – from getting our financials and campaign documents

sorted to advising me on how best to package my campaign.”

Momentum is important to crowdfunding, she adds.

Homes or Houses raised $100,00 in the first five days, doubled it in 19 days, and reached its funding

target – $404,000 – in 27 days. Ms Fitzgerald decided to overfund, stopping at $610,000, with a third of

the total coming from one UAE institutional investor.

A percentage of the funds will be used to open a Dubai office this year, initially to handle administration

for its UAE customer base.

“There is, of course, considerable admin involved in purchasing property for people living outside the

UK, so we think this will streamline the process.”

As well as the UAE, Ms Fitzgerald’s clients come from Canada, Australia and South Africa. On average, a

Homes or Houses client owns 4.2 houses; the maximum is 12.

“In the north-east, property is about a third of the cost of property elsewhere,” Ms Fitzgerald says. “An

average property would be a two to three-bedroom houses costing £50,000 (Dh260,000) to £100,000.

“This allows buyers to build a portfolio of properties, rather than a single property, say, in London. Our

properties’ average yield is about 7 per cent, significantly higher than in the south.”

As a new business, trying to raise money was a “daunting experience”.

“I was rather apprehensive going into the process,” Ms Fitzgerald admits. “Would people want to invest?

Would the campaign be a flop? Homes or Houses is now the largest raise on the platform and the first

UK business to raise funds through Eureeca, and obviously we’re delighted and proud of the outcome.”

Adds Mr Quawasmi: “There is so much more to equity crowdfunding than just capital, and Homes or

Houses took advantage of the model to the fullest extent. Jackie successfully leveraged her customer

base for investment, secured an institutional investment and capitalised on our dual position in the UK

and UAE. She really got it.”


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SALES AND RENT INCREASES LIFT AL

MAZAYA PROFIT


Al Mazaya Holding’s fourth-¬quarter net profit rose 7 per cent as the Kuwaiti property developer

boosted sales of its projects in Dubailand and the fair value of its investment properties rose.

Net profit in the three months to December 31 rose to 2.5 million Kuwaiti dinars (Dh30.2m) from 2.4m

dinars in the year-earlier period, the company said. Total operating revenue reached 20.8m dinars in the

fourth quarter, up from 1.36m dinars the previous year, beating forecasts from Kuw¬ait’s NBK Capital.

“Al Mazaya boosted income, generated from existing fully occupied projects, by renewing lease contracts

and increasing rates to reflect the current market prices ... this helped to increase the operating revenue

generated from lease operations,” said Ibrahim Al Soqabi, the group chief executive.

The increases in the fair value of investment properties and in gross profit from property sales last year

were offset by an increase in financing cost, sale of associates and joint ventures, and other expenses,

the company said.

“We believe that Mazaya’s ongoing development project, Queue Point/Queue Line Liwan in Dubai, has

the right offering, catering to the mid-income segment; this, in our opinion, should help Mazaya

generate relatively good demand in a broadly soft market,” said NBK Capital.

“Furthermore, the company’s rental property portfolio in Kuwait and Dubai remains strong, with almost

full occupancy.”

Al Mazaya, which is listed in Dubai and Kuwait, plans to expand in the Arabian Gulf and Turkey, and is

evaluating projects in those areas, Mr Al Soq¬abi said.

With regard to its debt, the property developer said it had converted all its borrowings into Sharia-

compliant financing last year as part of a five-year debt plan.

“Al Mazaya has successfully accomplished one of its key objectives for 2015 – converting all its loans

into Islamic financing. These facilities will be used in new investment opportunities that will drive growth

in accordance with the corporate strategic plan,” said Mr Al Soqabi.

Al Mazaya said its financial facilities’ maturities have been structured into medium and long-term

structures, cutting financing costs and reducing fin¬ancial obligations.


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DUBAI HOUSE PRICES AND RENTS

STILL SLIPPING BUT WORST APPEARS

TO BE OVER


Average house prices in Dubai fell by 0.14 per cent in December as investors search for signs that price

falls are finally levelling out.

According to the property data company Reidin, house prices fell by an average of 11 per cent over the

12 months of 2015 as lower oil prices, the strong dollar and geopolitical unrest continued to affect the

city’s real estate.

Both apartment and villa prices were affected, Reidin said, with apartment prices in December falling

0.14 per cent compared with the previous month – translating to an 11.1 per cent year-on-year fall. And

villa prices were down 0.10 per cent compared with the previous month – a 10.9 per cent fall compared

with a year ago.

However, Reidin said that rents in the city had fallen far less dramatically – dropping 1.03 per cent

month-on-month and by an average of 3.2 per cent over the year.

It found that average apartment rents fell 1.1 per cent compared with the previous month and 2.9 per

cent over the year, while villa rents were down 0.64 per cent month-on-month but fell 4.6 per cent

compared with a year earlier.

In undersupplied Abu Dhabi, it was a different story, Reidin said that average house prices had stayed

pretty much static all year, declining by just 0.8 per cent over the year and barely moving in December.

It said that apartment prices were down by an average of 3.4 per cent over the year but actually

increased slightly in December. Villa prices rose by an average of 2.4 per cent over the year and 0.7 per

cent in December from a month earlier.

At the same time rents in the capital reportedly fell 3.8 per cent over the year and were down 1.36 per

cent in December compared with the previous month.

In January last year the property broker JLL predicted house prices and rents in Dubai would fall by 10

per cent as the market reacted to the dramatic house price inflation over the previous 18 months.

“Following a rapid increase of residential rents and prices between 2012 and 2014, the market has now

clearly stabilised, with sales prices falling in Dubai and remaining stable in Abu Dhabi during 2015 – but

with a significant decline in transaction volumes in both markets,” said Craig Plumb, head of research at

JLL Mena. “Prices are expected to decline further over the next six months.”

But last month the consultancy ValuStrat reported “no significant change” in values of apartments and

villas in the 26 areas that it monitored in Dubai in December, leading the research manager Haider

Tuaima to say that it indicated “a plateau in prices”.





Mr Tuaima said: “Some might suggest that this is a bottoming out of the market, and the only next step

is for values to go up. We are not saying that at the moment, but it seems the signs are indicating that

we have reached a predictable stage of the market. If all other economic factors are the same, we are

assuming it will stay this way for the next three to six months.”


Back to Index





THE 5 IMPORTANT THINGS IN

BUSINESS RIGHT NOW


Here’s what you need to know in UAE business and globally on this Monday morning:

• The oil price rally appears to be over

After a four-day advance, the oil price rally has met resistance at $35 a barrel. “Unless we begin to see

some tangible news emerge on production cuts, we’re getting toward the limits of this rally,” Ric

Spooner, a chief analyst at CMC Markets in Sydney, said. “Oil will struggle to get past $36.” Will

interested parties agree to a production cut?

• US carriers re-open the Open Skies row

It’s been a while since words were publically exchanged across the Atlantic between the US carriers and

Gulf airlines, but American, Delta and United have claimed that bookings from Orlando, San Francisco

and Chicago to the region and beyond were down by as much as 13.3 per cent following the entry of

Emirates, Etihad Airways and Qatar Airways on those routes.

• Better bank results

Last week wasn’t the best for UAE bank results - NBAD’s Q4 net profit was down 25 per cent, while

Mashreq’s was 13.7 per cent lower. There’s been a better start this week, however, with ADCB reporting

a 16 per cent riseand FGB saying that its net income in the fourth quarter gained 11 per cent to

Dh1.71bn versus Dh1.55bn in the same period the previous year, boosted by “other operating income”.

• DXB still No 1 for international passenger traffic

Traffic exceeded 78 million in 2015, the airport announced this morning. And it’s set to continue growing

with Concourse D slated to open this quarter.

• Dubai residents await fire insurance claims

A month on from the fire at The Address Downtown Dubai hotel and residents are waiting to find out

whether they are covered by Emaar’s own building insurance.


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UNION PROPERTIES PROFIT PLUNGES

IN DUBAI SLOWDOWN


Profit at Union Properties, the Dubai developer behind Motor City and the Green Community, halved last

year as the company was hit hard by a slowdown in the emirate’s property market.

Union Properties reported that net profit for the year sank to Dh434.6 million – down 49.7 per cent from

Dh864.9m the previous year.

Revenues for the period fell 61 per cent to Dh1.46 billion from Dh2.07bn a year earlier, the company

reported to the Dubai Financial Market yesterday.

“Net profit was approximately Dh435m, giving 12 fils as earnings per share for 2015,” said Ahmad Al

Marri, general manager of Union Properties.

He added that total assets reduced by 2.4 per cent to Dh8.2bn at the end of 2015, while shareholders’

equity in the company increased by 6.6 per cent over the period to stand at Dh5.3bn.

The news concludes a disappointing year for Union Properties, which reported an 84 per cent fall in

profit in the first quarter of the year, a second-quarter net profit fall of 96 per cent and third-quarter

profit slide of 13.5 per cent, much of which it blamed on lower sales revenues and lower gain on

property valuations.

The company did not provide a breakdown of fourth-quarter numbers.

“The fall in profits is not a surprise,” said Harshjit Oza, a property analyst at Naeem Brokerage.

“With oil prices low and a softness in the Dubai property market, we have been expecting some

developers to report weak earnings and falls in profits. We expect this weakness to continue in 2016 as

well.”

Union Properties was hit hard by the global financial crisis in 2008.

After 2010, to shore up its cash balance, the developer sold some of its key assets such as the Ritz-

Carlton Hotel and substantial stakes in Limestone House and Index Tower to its key shareholder,

Emirates NBD.

However, since then the company has begun construction on 226 properties at the third phase of its

Green Community project in Dubai Investments Park, and has unveiled plans to establish a Saudi

Arabian joint venture with Naif Al Rajhi Investment Company.

The company’s shares fell 1.4 per cent to Dh0.626 in Dubai yesterday.


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ARCADIS REPLACES WAEL ALLAN AS

MIDDLE EAST HEAD


The building consultancy Arcadis has replaced Wael Allan as its chief executive just 12 months after his

appointment.

The consultancy has announced that Graham Reid has been appointed as Middle East chief executive,

effective from February 1.

Mr Reid had previously been global design director for Arcadis.

Mr Allan was appointed as Middle East chief executive and a member of Arcadis’ senior management

team in February 2014 following the company’s £296 million (Dh1.55 billion) take¬over of Hyder

Consulting, where he had been regional managing director. In a statement, Arcadis said Mr Allan left the

firm at the end of January to pursue opportunities outside of its business.

Mr Reid now leads an Arcadis team of 2,200 people in the Middle East. Over the past 12 months, he had

spearheaded the expansion of a series of global design excellence centres. Before that, he had been

Hyder’s UK managing director.

“Graham is a collaborative and results-oriented leader with a strong track record,” said Stephan Ritter,

an executive board member of Arcadis. “We are pleased to welcome Graham to the regional operations

of the Middle East.”

Mr Ritter added that Mr Allan had “played an instrumental role” in the integration of the Hyder business

into Arcadis.

“He is one of the most respected leaders in the Middle East construction and engineering industry and I

wish him well with his next endeavours.”


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DUBAI-LISTED DEVELOPER AL MAZAYA

AIMS FOR DOUBLE-DIGIT GROWTH

THROUGH 2020


Al Mazaya Holdings is targeting growth in annual net profit of a 10 per cent through 2020, as the

Kuwait-based property developer expands its projects in the Arabian Gulf and Turkey, its chief executive

said on Tuesday.

Al Mazaya, which is listed in Dubai and Kuwait, posted a 15.2 per cent increase in full year net profit for

2015 attributable to equity holders, reaching 9.3 million Kuwaiti dinars, up from 8m dinars a year

earlier.

Al Mazaya’s fourth quarter net profit rose 7 per cent to 2.5m dinars from 2.4m dinars in the year-earlier

period as it boosted sales of its projects in Dubailand and the fair value of its investment properties

rose. Total operating revenue reached 20.8m dinars in the fourth quarter, up from 1.36m dinars the

previous year, beating forecasts from Kuw¬ait’s NBK Capital.

The company is focusing this year on nine major projects spread across Oman, Kuwait, UAE and Turkey,

said Ibrahim Al Soqabi, the group chief executive.

With regard to its debt, the property developer said converted all its borrowings into Sharia-compliant

financing last year as part of a five year debt plan.

“Al Mazaya’s current borrowing stands at 81m dinars,” said Mr Al Soqabi. “This is subject to change

depending on new projects. However, the group currently has no immediate plans to increase its

borrowing.”


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STAY GROUNDED WITH THIS RARE

DUBAI MARINA DUPLEX

THURSDAY 04 FEBRUARY 2016

While Dubai apartment buyers generally find their chosen investment at the higher end of the spectrum,

there are properties to be found at less heady heights.

For this tower, Azure, in Dubai Marina is only five storeys high, one of just a few low-rise freehold

residential buildings located in the area.

Inside, property buyers can snap up a fully refurbished three-bedroom duplex with outside space for

Dh4.3 million.

The price incorporates the refurbishment and the fact that the European owner is selling it fully

furnished, according to the Luxhabitat, the agent marketing the apartment. Its decor is in keeping with

European tastes and the refurb has given it an industrial, urban, edge – although buyers will need to like

white, cream or grey, which dominate the colour scheme.

The duplex on offer straddles the building’s two top floors and has four balconies offering marina views

from every room. It also comes with three bathrooms, with one en suite, a study room, fully-fitted

kitchen with composite worktops and an extra laundry/storage room can double up as a maid’s room,

according to the agent.

Building amenities include a community pool, and, imperative if one lives in the Marina, parking for two

cars and a lift to all floors.

Having been constructed by the developer Bonyan Emirates in 2005, the building was one of the first

completed in Dubai Marina.

It gives the buyer that first mover advantage as it sits in a central location on a quiet street with retail,

food and beverage, a hotel and a yacht club on the doorstep. With access to the metro only a matter of

minutes away, Dubai Marina Mall literally around the corner and Jumeirah Beach Residences, with

accompanying beach, over the bridge that the tower sits next to, there are few better appointed

buildings in the Marina.

The duplex offers a built-up area of 2,487 square feet and the opportunity to move in immediately. The

space has been lived in, by its owner, for the past two years and has a homely feel. While the

skyscrapers of Dubai dominate the space, this gem of a building proves that less is more.

Q&A

Brigitte Tenbergen, an estate agent with Luxhabitat, tells Andrew Scott more about the Dh4.3 million

Azure Tower apartment:

Dh4.3m seems a bargain for the area and the property. Is it?

It is true that if this apartment was in one of the many Emaar residences that adorn the Mar¬ina, it

would cost Dh5m to Dh6m, but because this is an older building and its developer may not have the

cachet of one of Dubai’s premier developers it is appropriately priced. The location of this duplex is,

without a doubt, one of the best in the whole Marina development. Everything one may need such as a





supermarket, nightlife, bars and restaurants, the new Meraas development The Beach with its cinemas

and F&B and the Metro is on your doorstep.

Why is it being sold fully furnished?

The owner has lived in it but decided that it would be easier to sell if it could be bought off the shelf. He

believes that many people that own in the Marina have residences in other parts of the world and

therefore may not want to go through the hassle of furnishing a property that may not be lived in all

year round. You can buy this duplex and move in immediately with everything you need ready and

waiting. The decor is not to the usual taste of the market and we have already had many interested

parties because of its finishing.

The property market has cooled recently hasn’t it?

It definitely had cooled but we have seen a real pickup in inquiries and viewing for the last month of

2015, and that has carried through to 2016.


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RUSSIAN TOURISM SET TO RECOVER

IN RAS AL KHAIMAH


Ras Al Khaimah expects Russian visitor numbers to stabilise this year as they avoid key destinations in

the region because of security concerns.

Of the 740,383 tourists to the emirate last year, about 8.2 per cent were from Russia and it remains an

important source market, said Haitham Mattar, the chief executive of the Ras Al Khaimah Tourism

Development Authority (RAK TDA).

“We remain optimistic that Russian visitor indicators will continue to stabilise over the coming years,

following our efforts to further connect Ras Al Khaimah with the Russian market,” he said.

Qatar Airways, which started flying four times a week from RAK airport this month, is expected to bring

tourists from Russia and other European destinations such as Germany and Austria.

Low oil prices, currency fluctuation and a deteriorating economy had hit Russian visitors to the UAE.

In Dubai alone, the number of tourists from Russia, CIS and Eastern European region dropped 22.5 per

cent last year compared to 2014, according to Dubai Tourism.

Despite the decline in Russian visitors during the first half of the year to the emirate, RAK TDA reported

a 4 per cent growth in Russian tourists in the fourth quarter.

“As we further drive the development of the emirate’s leisure tourism offering, we are seeing guests

from the Russian market and beyond choosing to extend their stays,” Mr Mattar said.

The average length of stay of Russians to Ras Al Khaimah increased to 8.77 nights last year from 5.76

nights in 2014.

Affordable room rates along the beaches of the Northern Emirates and security concerns in traditional

markets such as Egypt and Turkey have been cited as reasons for the growth, as reported earlier by The

National.

For the weekend of February 18, a room at the five-star Rixos Bab Al Bahr in Ras Al Khaimah costs

Dh389 all-inclusive for a night. At Rixos the Palm in Dubai, a room on the same weekend starts from

Dh831.43 for a night, according to the hotels’ websites.

The average room rate in RAK last year was Dh640.32, up from Dh631.84 in 2014, according to the

research company STR Global.

Turkey was the top destination for Russians last year as it attracted 3.6 million tourists, according to

figures from the Turkish tourism ministry.

In 2014, Russia was the largest source market for tourists to Egypt, according to the consultants

Euromonitor. Egypt is yet to release tourism data for last year.

But both the countries lost some of their appeal late last year. Russia cancelled all flights to Egypt in

November after the crash of a Russian plane over the Sinai peninsula, killing 224 passengers. Also in





November, Russia asked its citizens to cancel trips to Turkey after Ankara downed a Russian fighter jet

in Syria.


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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.

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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 · dubai house prices and rents still slipping but worst...

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