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REAL ESTATE NEWS UAE

DUBAI'S TI'ME PLANS NEW HOTELS IN UAE, QATAR, EGYPT PRESSURE MOUNTS TO LIFT FOREIGN OWNERSHIP LIMITS ON UAE SHARES DRAKE & SCULL PROFITS RISE WITH CONSTRUCTION ACROSS REGION

DUBAI INDIAN FIRM TO INVEST DH4BN IN DUBAI REALTY ARABTEC WILL SET UP 5 SUBSIDIARIES DEVELOPER’S LINE UP FOR DUBAI’S MATURE LOCATIONS ROOM TO GROW? AED1,200 PER NIGHT FOR AN AVERAGE HOTEL ROOM IN DUBAI

CRACKDOWN ON SHARING IN TECOM BUILDINGS KEY MONEY-MAKING FACTOR IN DUBAI PROPERTY... AND IT'S NOT JUST LOCATION

DPG UNVEILS FURTHER ENHANCEMENTS AT REMRAAM COMMUNITY IN DUBAILAND

DUBAI TO GET CHAMPS ELYSÉES-STYLE STRIP ALDAR NET RISES 67% TO DH2.25BN AL HABTOOR PROMOTES EXEC TO OVERSEE $3BN DUBAI PROJECT ESTATE AGENTS WELCOME ABU DHABI’S RENT INDEX REVENUES AT JEBEL ALI FREE ZONE REACH A RECORD DH1.53BN TEMPORARY REPRIEVE ON LIFTS FOR BURJ KHALIFA RESIDENTS IN FEES ROW

ABU DHABI ABU DHABI RENT HIKES: LEGAL EAGLES SEEK URGENT INTERVENTION AFTER 40% TO 100% INCREASES

ALDAR PLANS TO BUILD 1,000 UNITS IN ABU DHABI AS NET PROFITS SURGE NORTHERN EMIRATES

RAK PROPERTIES ENDS 2013 WITH NET PROFIT OF AED 151 M




INDIAN FIRM TO INVEST DH4BN IN

DUBAI REALTY

WEDNESDAY 05 FEBRUARY 2014

Jones Lang LaSalle (JLL), a global property consultancy, said on Monday the Dubai property market was "smarter" this time with investors becoming more cautious and better regulations in place.

"There has been concern that Dubai will experience another bubble, but there are many differences this time around that makes for a ‘smarter’ market," Craig Plumb, Head of Research, JLL Mena, said at a press meet in Dubai held to release their top 2014 trends for UAE real estate market (Scroll down to read).

"Some of these differences are that investors are more cautious, regulations are better, developers are less reliant on pre-sales and significant levels of new supply.”

He added that though rise in residential property prices was “irrational” in 2013, the rate of increase will slow-down this year.“ There won't be any correction this year," he stressed.

Citibank, Standard Chartered and Golmand Sach Group have in the past stated that the Dubai property market growth was sustainable and there were no fears of a property crash.

The Dubai Land Department (DLD) figures revealed real estate transactions roes by 53 per to Dh236 billion from Dh154 billion in 2013 with Indians, Britons and Pakistanis topping the list of expatriate buyers.

DLD increased property registration fees in October 2013 from two per cent to four per cent of the property value to discourage flipping in the market. More regulations to control flipping are likely to be released in coming months.

Rents rise to slow

In 2013, property prices rose by over 22 per cent, while rents jumped by 17 per cent.

“We don’t expect prices in the Dubai residential market to cross 22 per cent this year. Rent increases will be below the 17 per cent level seen last year," Plumb said.

A rent cap was in place in Dubai that has limited rent increases for existing tenants between five and 20 per cent. New leases aren't government by the cap.

UK-based Knight Frank had already said Dubai will top the list for global cities that will witness double digit price growth in 2014 with prices jumping by 10 to 15 per cent in 2014 driven by Expo 2020 development and buyer incentives.

20,000 new units

Though in its Q4 2013 report, JLL had predicted that 28,000 new units will be released, Plumb said that realistically they were expecting completion of only 20,000 new units this year as some projects might get delayed.

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Asked what factors could lead to a "correction if likely" in the market, Plumb pointed to external and internal factors.

“External factors could be a financial or a geopolitical event. Internal factors will be continued growth of prices, reaching to an unsustainable level, or construction material/resource constraints.”

Reaching 2008 price level?

Plumb said prices in some locations had reached the 2008 price level, adding that on average the 2008 level may be reached in coming 10 to 18 months.

“In some location we are witnessing that prices have reached the 2008 level, but overall we see that prices will reach that level in the next 10 to 18 months.”

But Knight Frank report said that average prime apartment prices were still about a third below where they were during the 2008 peak, suggesting they still have plenty of scope to rise.

“Hardly any new high-end apartments are due to be delivered over the next 12-18 months (the majority of new prime supply will be made up of villas), further supporting the case that prices in the former segment will play ‘catch-up’,” KF said, adding, "the prime residential market will benefit from the growing population of high net-worth individuals (HNWIs), attracted by the emirate’s favourable tax regime, strong lifestyle characteristics and a well performing economy."

JLL’s top 10 trends for 2014 are

*Avoiding another bubble

*More measured mega developments

*Future directions of growth

*Expo 2020 – Important long term but limited impact in 2014

*More varied approaches to funding real estate

*Two speed investment market

*Growth in corporate activity and workplace transformation

*More investment sales in hotel sector

*Sustainability – from talk to action

*Improved valuation and measurement standards

Source: Emirates 24/7

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ARABTEC WILL SET UP 5 SUBSIDIARIES

SUNDAY 09 FEBRUARY 2014

Dubai-based builder Arabtec Holding, in which Abu Dhabi state fund Aabar owns a major stake, said on Sunday it would set up five new subsidiaries as it expands into new markets and infrastructure projects.

The move follows Arabtec's strategic decision to evolve from a local contractor into a multinational development company as its finances are boosted by its relationship with Aabar and a recovery in Dubai's property market.

Two of the units will focus on infrastructure projects inside and outside the United Arab Emirates, one will focus on water and energy projects and one will concentrate on the Egyptian market, it said in a bourse statement.

Arabtec's shares rose 1.6 per cent in the early morning trading on Sunday following the announcement.

Arabtec will also set up an investment firm, Arabtec Capital, to provide financial services both to other Arabtec units and outside companies.

Arabtec has been expanding aggressively since the arrival of a new chief executive, Hasan Abdullah Ismaik, early last year. He was backed by Arabtec's biggest shareholder, Abu Dhabi's Aabar.

The fund has a 22 per cent stake in Arabtec and last week signed a $6 billion contract with the firm.

Arabtec has also won a series of other contracts in Abu Dhabi, including high-profile projects such as development of Abu Dhabi's main airport and the Louvre museum there, since Aabar began building a major stake in the firm in 2012.

Expanding abroad, Arabtec secured a $1.55 billion contract to build a resort in the Aqaba area of southern Jordan last month.


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REVEALED: KEY FACTOR TO MAKING

MONEY IN DUBAI REAL ESTATE

TODAY... (AND IT'S NOT JUST

LOCATION)

TUESDAY 11 FEBRUARY 2014

In real estate parlance, "location, location, location" is everything, but in Dubai, you have will have to get your "exit time" right as well to make money from real estate.

Though property prices in Dubai may not rise at the same pace as seen in 2013, i.e. 22 per cent increase, prices will continue to rise in 2014.

Jones Lang LaSalle, a global property consultancy, said on Monday that prices were still 15 per cent below the 2008 price levels and would reach the previous level in the coming 10 to 18 months.

So can you make money today from real estate?

"Of course, you can make money," Craig Plumb, Head of Research, JLL Mena, told Emirates 24|7.

"...and that's why so much money is flowing in.

"There is definitely a lot of investment being made and there is no doubt about that."

Dubai predominantly has cash buyers and they have can still make a good return on their investment.

International investors have invested over Dh162 billion in 2013 in Dubai's property market with Indians, Britons and Pakistanis doubling their property investment in 2013 compared to 2012.

Plumb, however, states making money from property sales will depend on one's investment horizon.

"If you want to stay here for the long-term then, of course, there is no problem, you ride out the cycles, but if you just want to come in and sell again, at some point, you have to get the 'timing' right.

"You have to make sure that you have obviously sold before the market corrects.

"And so if you have to make money in real estate, it's just not location, location, location, it's timing, timing and timing as well," Plumb asserts.

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The Wealth Report 2013, produced by Knight Frank, a global property company, had said that prices of Dubai's prime luxury properties were 10 times lower than Monaco, the world's most expensive residential property market despite prices rising by 20 per cent in 2012 and 2013, respectively.

In an interview with Emirates 24|7, Dubai Investments Chief Executive Officer Khalid bin Kalban said that the growth cycle in Dubai's real estate market had just begun and prices were still far below the peak of 2007-2008.

"Prices fell from the peak of 2007 and 2008 by a maximum of 60 per cent and a minimum 40 per cent; we even haven't reached that 40 per cent.

"Though we have seen increase of up to 20 per cent, we haven't really come back to the value of 2008.

"Generally, it's a five-year growth cycle... we are just at the start of the first year and so you still you have four years of growth."

UAE's safe haven status brought in a number of investors to invest in the real estate sector, he said, adding, "Nothing can beat the capital appreciation on the property market except the stock market.

"An investor here can expect nothing less than 7.5 per cent return."


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DEVELOPER’S LINE UP FOR DUBAI’S

MATURE LOCATIONS

SATURDAY 15 FEBRUARY 2014

With their advanced infrastructure, Downtown and Business Bay represent the best options for a new developer to come in and make headway with their projects. This applies to both getting the projects completed as well as making sure they are a hit with investors/end-users.

“There are limited new plot options available at these locations now, and they are the ones where values are recording some of the highest growths in Dubai,” said Ravi Pillai, chairman of the Bahrain-based RP Group, one of the largest Indian owned businesses in the region. In its initial foray into real estate development in Dubai, the Group is committing $1.5 billion (Dh5.5 billion) for mixed-use projects. The Group had extensive interests in construction and in ancillary services for the oil industry as well as health care.

“The best part of getting into established projects is that little time is needed on the support infrastructure … it’s already there. We intend to go directly into our projects.”

Source: Gulf News

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DUBAI PROPERTY BOOM: RISE IN

DEVELOPERS LAUNCHING PROJECTS IN

2014


Resurgence in the property market, led by UAE's strong economic fundamentals, safe haven status and growing interest from regional and international investors, is driving an increasing number of developers to launch projects in Dubai.

Since the beginning of the year, Emaar Properties, Dubai's largest developer, has launched five new projects and Nakheel has announced sales for land plots in its master developments.

Last week, Jones Lang LaSalle, a global property consultancy, said the Dubai property market was not going to witnessing any price correction this year. UK-based Knight Frank has already put the price increase between 10 and 15 per cent this year, with Dubai Land Department chief expecting anything between 35 and 40 per cent.

Driven by demand and growth prospects, others are joining the bandwagon. Dubai Investments, a diversified investment conglomerate, is planning to launch projects valued at Dh3.5 billion this year with Orion Real Estate Development, a new entrant, announcing plans to invest Dh500 million in real estate developments.

Revealing to Emirates 24|7 about the project launches, Khalid bin Kalban, Chief Executive Officer, Dubai Investments, a Dubai Financial Market-listed company, said: "We will be launching phase 3 of Green Community, a Dh500 million project, and relaunching our Mirdiff Hills, a Dh3 billion project, in 2014."

The Green Community phase 3 will have nearly 250 units, of which more than 200 will be villas.

Kalban added the company was revising the concept of Mirdiff Hills and work was expected to start on the project in or after the third quarter.

When launched in 2008, Mirdiff Hills was slated to be a mixed-use development, consisting of 680 apartments, 380 offices and 129 retail outlets. The project was put on hold following the global financial crisis in 2009.

Dubai Investments has among one of the largest land banks across the UAE, totalling nearly 30 million square feet gross floor area (GFA), owned by its different subsidiaries such as Dubai Investments Park, Dubai Investments Real Estate Company, Al Taif Investments and its joint venture Properties Investments.

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"The UAE real estate industry is in the midst of a robust growth - which is a reflection on its sound fundamentals and overall business and investor confidence across sectors, be it retail, tourism, aviation, hospitality or trade," Kalban said.

He told Emirates 24|7 earlier that the growth cycle in Dubai's real estate market has just begun and prices are still far below the peak of 2007-2008.

MAG Group

MAG Group, a real estate developer, launched Dh800 million mixed-use project in Dubai Healthcare City.

The project, developed in joint venture with Dubai Healthcare City, is expected to include two hospitals covering a total of 260,000 square feet, plus an 80,000 square feet clinic; a residential complex of four buildings with combined gross floor area of 430,000 square feet; a hotel apartment with a gross floor area of 80,000 square feet and 100,000 square feet of retail space.

Company official expect the project to be completed by 2016.

Orion Real Estate

Orion Holdings has announced launch of Orion Real Estate Development (ORED), its development arm, which will work on at least, five projects worth Dh500 million.

Raghav Sadana, Vice Chairman, and Orion Holdings, said: "We are excited to enter the property development sector, especially at a time when Dubai is witnessing excellent growth across all core industries. Our team has experienced the highs and lows of the local real estate market, and we are confident that our efforts towards establishing this new venture will yield good results."

ORED will launch projects in Jumeirah Village Circle (JVC), a development near the upcoming Mohammed Bin Rashid City.

Orion Holdings' real estate portfolio includes properties in Business Bay, Jumeirah Village Circle, International City, Dubai Silicon Oasis, Jumeirah Golf Estates, and Emirates Hills.

Union Properties

Union Properties and National Properties, a unit of National Bonds Corporation, said in January they were developing an upscale residential project at the Green Community in Motor City.

The first phase of the project will focus on the construction of 78 villas spread across an area of 330,000 square feet, while the second phase will include 74 villas and 58 apartments (two and three bedrooms) across six floors spanning 425,000 square feet. Work on the project is expected to begin in the second quarter of 2014 and is slated for completion in end 2015, the companies had said.

Emirates 24|7 had revealed that Union Properties will launch five towers and a launch a project replicating Paris' famous Champs Elysées in Motor City by mid-2014.

Source: Gulf News

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ROOM TO GROW? AED1,200 PER NIGHT

FOR AN AVERAGE HOTEL ROOM IN

DUBAI


Hotels in Dubai reported the highest profit levels in the region in 2013 for the fourth consecutive year, according to TRI Hospitality Consulting. Gross Operating Profit Per Available Room (GOPPAR) for 2013 increased 10.3 per cent to $206 (Dh757), Average Room Rates (ARR) for the year were up by 6.5 per cent to $324 (Dh1,190) and Rev PAR was up by 7.6 per cent for the same period.

The annual Arabian Travel Market (ATM) roadshow arrived in Dubai on Thursday, February 13, at the Dubai World Trade Centre as industry stakeholders fine-tune their promotional plans ahead of region's largest travel and tourism event.

Executives from Reed Travel Exhibitions, the organiser of ATM, are holding a workshop for exhibitors, ahead of this year's May 5-8 event, bringing together upbeat key industry players to discuss marketing opportunities and how to showcase their proposition to ATM's 21,000 trade visitors.

In the first nine months of 2013, Dubai government figures revealed that, Dubai hotels welcomed 7.9 million visitors, a year-on-year increase of almost 10 per cent and due, in part to longer average stays, visitors spent $4.2 billion an increase of 17 per cent compared with the same period in 2012.

According to Dubai International Airport, annual passenger traffic also rose to 66.4 million in 2013, an increase of 15.2 per cent, with 28 new routes in 2013; it now serves a total of 239 destinations.

"The Dubai success story continues with increases right across the board. It is difficult to imagine that growth slowing anytime soon, especially with Standard Chartered Bank estimating that at least $9 billion will be invested in Dubai's infrastructure ahead of the Expo 2020," said Mark Walsh, Portfolio Director, Reed Travel Exhibitions.

"Indeed the Dubai Corporation for Tourism and Commerce Marketing has been established to promote brand Dubai around the world and armed with a considerable budget. Hotels will pay a new 'Tourism Tax' of up to Dh20 per room per night, to fund the endeavors of the DCTCM [Dubai Corporation for Tourism and Commerce Marketing], as Dubai focuses on its 20 million visitor target by 2020," added Walsh.

Dubai is the penultimate stop of the six Middle East destinations being visited by the ATM team during its week-long roadshow which took in Bahrain, Kuwait, Lebanon and Oman with Riyadh to come next week.

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Dubai Government's Department of Tourism & Commerce Marketing (DTCM) has already attended a dedicated focus workshop, as it prepares to support destination Dubai during ATM.

Other UAE participants at ATM will include some of the biggest names in the regional and indeed international travel and tourism sector such as Emirates, flydubai, Air Arabia, Etihad, Arabian Adventures, Rotana Hotels, Jebel Ali Hotels, Address Hotels and the Jumeirah Group.

Current and potential exhibitors visited during the roadshow will learn about new event features including the introduction of an annual theme, with 2014 shining the spotlight on the luxury travel sector. The seminar programme in particular will focus on this important theme, which is particularly relevant to Dubai and the rest of the Gulf region.

The popular ATM seminars return covering travel technology and other key industry issues such as luxury travel trends, aviation, and Expo 2020, CSR and mid-scale hotels. Also returning are the visitor trails, helping visitors identify the specific travel sectors on the show floor including: shopping, career, budget, health and wellness, air and water travel.

New this year is a showcase theatre, which offers exhibitors the opportunity to present their products and services in one hour sessions and the ATM Live Wall, which will broadcast live streaming of interviews, panel debates and other show highlights.

Arabian Travel Market 2014 will take place from May 5-8 at the Dubai International Convention & Exhibition Centre. Last year, ATM welcomed over 21,000 visitors from 165 countries, covering 22,000 square metres of floor space.


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CRACKDOWN ON SHARING IN TECOM

BUILDINGS


Building managements are issuing eviction notices to people found sharing apartments in Tecom areas.

In a bid to crack down on unauthorized sharing in new Dubai, they have also introduced a rule under which people must seek permission from them before moving out.

"The policy is intended to ensure that it's the tenant who is moving out and not anyone else," said Abdul Jalil, leasing manager, Al Abjar Real Estate.

A notice on one of the buildings -- Al Shaiba Tower -- read: "Shifting of furniture etc. requires permission from the accounts office and if the move-out falls on a public holiday, you must obtain a permit the day before."

"Our building is only for families and we ensure this when they register as tenants. We even take an undertaking from tenants that the lease will only be for family accommodation. Despite this, sometimes tenants bring others to live in. No sooner we identify such a flat, we immediately issue an eviction notice," said Jalil.

A similar 'moving-out policy' has been introduced in another building in Tecom. "We've issued eviction notices to people sharing illegally," said a building manager here.

In an email response, a Tecom spokesperson said: "It is the responsibility of building owners what management rules and regulations they put in place in terms of tenants occupying their buildings, but these must be in line with government regulations. Tecom Investments has no responsibility in this regard."

Source: Gulf News

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ONE-BEDROOM APARTMENT IN BURJ

KHALIFA GOES UNDER HAMMER

THURSDAY 13 FEBRUARY 2014

This time, it's an one-bed apartment. The 1,102-square feet unit has been listed on Emirates Auction website at a reserve price of Dh4.2 million.

The minimum bid increment is set at Dh5,000, with the auction closing on February 19.

Emirates 24|7 had reported earlier that a two-bed apartment in Burj Khalifa was up for auction with the reserve price at Dh5.625 million.

The 2,008 square feet apartment was sold for Dh5.925 million, 5.3 per cent over the reserve price.

Emirates Auction sells these properties on the "auction order" of Dubai Court, the company website states.

Current online listings for one bed range between Dh3.9 million and Dh5.5 million. Prices in the tower vary as per the view and floor.

Cluttons, a real estate consultancy, said in January that average residential apartment prices in Burj Khalifa were Dh3,750 per square feet (psf), which is a 50 per cent increase on the February 2009 figure. Values have risen by 87.5 per cent since units were first launched in July 2006 with prices rising by 25 per cent last year.

In 2008, Mohamed Ali Alabbar, Chairman, Emaar Properties, had said that apartments were selling for over Dh10,000 psf. But price fell to a low of Dh2,400 psf in 2009-10 following the global economic crisis.

Jones Lang LaSalle, a global consultancy, said on Monday that prices will continue to rise in Dubai's residential market but will be lower than the 22 per cent increase witnessed last year. The consultancy ruled out see any correction in the market for 2014.

Burj Khalifa (2,717-feet) has 900 studio, one-, two-, three- and four-bedroom apartments, while there are 144 private Armani Residences. Cluttons stated that their calculations exclude Armani apartments.

The tower offers luxurious recreational and leisure facilities including four swimming pools, an exclusive residents' lounge; health and wellness facilities; Atmosphere, the world's highest fine dining restaurant at level 122 and At the Top, the world's highest observatory deck with an outdoor terrace on level 124.


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ABU DHABI RENT HIKES: LEGAL

EAGLES SEEK URGENT INTERVENTION

AFTER 40% TO 100% INCREASES


Legal experts in Abu Dhabi have urged the emirate's government to intervene to legalise and regulate the recent sharp increase in residential and commercial rents in the UAE capital.

Arabic newspaper 'Al Bayan' said the legal experts said this was necessary to prevent worsening of problems between landlords and tenants.

They said the abolition of the five per cent ceiling on rent hikes, leaving rents to the forces of supply and demand, had made the market unstable.

Tenants are claiming that many owners of old houses have jacked up rents by 40 to 100 per cent, though some have sought increases of five to seven per cent only.

The newspaper said complaints by tenants have increased after many landlords took advantage of the current market situation and raised housing and office rents sharply.

The rental burden on many middle-income tenants have doubled in the absence of regulations to determine reasonable rents, making urgent government intervention necessary, the paper said.

Justified hikes?

Judge Mohammed Saeed Mohammed Mattar Al Za'abi, head of the Abu Dhabi Federal First Instance Court, said there is some justification for rent hikes as owners of old buildings have seen a decline in the growth of their incomes in the past few years as a result of inflation and the five per cent ceiling on rent hikes, though it is also true that the real estate market is now much stronger than in 2008 and 2009.

Al Za'abi also said a large number of low-income tenants working in both government and private sectors have suffered after housing rents were left to free market forces.

It is difficult for this segment of society to bear the burden of a 50 to 60 per cent rent hike. The rent hikes for government employees are generally more than the rise in their housing allowances, he added.

Some tenants living in three-room flats, whose rents of Dh100,000 a year were paid by their employers, have seen their rents shoot up to as much as Dh160,000, making it difficult for employers to compensate their staff fully, Al Za'abi said.

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The judge also said even if the tenant is able to find a new place at the old rent, he has to bear the very high cost of moving to the new house, besides the mental stress.

Three-year contracts

Al Za'abi said though rent hikes are permissible, the demands of the landlords should be logical and reasonable.

Exploitation and greed should not be acceptable and all should aim to achieve a stable housing market in Abu Dhabi, he added.

Al Za'abi suggested drawing up three-year fixed rent contracts which could be revised for two more years.

Complaints rising

Mohammed Yassin Mansour, legal adviser to the Abu Dhabi Chamber of Commerce and Industry, confirmed that complaints from tenants have risen significantly as a result of inordinate rent hikes by landlords.

Yassin said complaints are likely to increase in the coming months, especially with the end of house leases of majority of government employees in April.

He said significant hikes in both residential and commercial rents, ranging from Dh85,000 to Dh160,000, had taken place.

He also expressed fears of a return to the pre-2009 conditions which saw dramatic surge in rents.

Effect on investments

Lawyer Tariq Al Serkal said the increase in residential and commercial rents will affect investments in Abu Dhabi.

Al Serkal said it is important to create a safe investment environment for Abu Dhabi to achieve its ambitious economic plans until the year 2030 and such an environment cannot be created without regulating rents.

The first question any potential investor in Abu Dhabi would ask is about rent hikes which could harm his profit margins, he added.

If rent hikes continue uncontrolled, investor will be reluctant to come as all companies need offices and houses for their staff.

It will be difficult for companies to make profits as long as rents remain high, he added.

Rents should match the incomes of the largest segments of Abu Dhabi's residents to prevent the capital from becoming too expensive, Al Serkal said.

He said hikes in shop rents will force traders to raise prices which in turn will raise the cost of living.

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A return in house rent hikes to 2008 and 2009 levels will also have negative psychological and social impact on tenants living with families, forcing them to send their families home and take to bachelor accommodations, he added.

When house rents are reasonable, tenants with families spend much on their children's education in private schools and medical treatment.

The emirate's economy will be affected by fewer students, patients and shoppers, all because of high rents, he pointed out.

He also said, because of high rents in Abu Dhabi, major international companies prefer to open its representative offices only in Abu Dhabi and open regional offices in other emirates or neighbouring countries even when the booming UAE capital has launched huge projects.

Al Serkal said high rents could force international companies to move out of Abu Dhabi to more attractive places.

New housing

Lawyer Hidya Hammad said new buildings cannot help solve Abu Dhabi's rent problem because rents are too high even there which most of the tenants cannot afford.

Some landlords have exploited the situation to raise rents of old buildings by as much as 100 per cent, she added.

Tariq Serkal stressed the need for government intervention in the real estate market in Abu Dhabi.

He added the government is still the main player in the market and should not stay away from the market in the present worrying situation. State intervention has helped achieve economic stability and increased investment in the past.

He said the problem of residential and commercial rents could be solved by fixing rents for the various areas of the city like Corniche, Al Murour and others.

Legal adviser Mohammed Yassin said the law in Abu Dhabi requires the tenant to be given a notice period before raising the rent.

He said that, according to Article 16 of the law, lease contracts are considered to have been renewed automatically unless the tenant has been notified about the change in the terms of the contract or has been asked to vacate the property.


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KEY MONEY-MAKING FACTOR IN DUBAI

PROPERTY... AND IT'S NOT JUST

LOCATION


In real estate parlance, "location, location, location" is everything, but in Dubai, you have will have to get your "exit time" right as well to make money from real estate.

Though property prices in Dubai may not rise at the same pace as seen in 2013, i.e. 22 per cent increase, prices will continue to rise in 2014.

Jones Lang LaSalle, a global property consultancy, said on Monday that prices were still 15 per cent below the 2008 price levels and would reach the previous level in the coming 10 to 18 months.

So can you make money today from real estate?

"Of course, you can make money," Craig Plumb, Head of Research, JLL Mena, told Emirates 24|7.

"...and that's why so much money is flowing in.

"There is definitely a lot of investment being made and there is no doubt about that."

Dubai predominantly has cash buyers and they can still make a good return on their investment.

International investors have invested over Dh162 billion in 2013 in Dubai's property market with Indians, Britons and Pakistanis doubling their property investment in 2013 compared to 2012.

Plumb, however, states making money from property sales will depend on one's investment horizon.

"If you want to stay here for the long-term then, of course, there is no problem, you ride out the cycles, but if you just want to come in and sell again, at some point, you have to get the 'timing' right.

"You have to make sure that you have obviously sold before the market corrects.

"And so if you have to make money in real estate, it's just not location, location, location, it's timing, timing and timing as well," Plumb asserts.

The Wealth Report 2013, produced by Knight Frank, a global property company, had said that prices of Dubai's prime luxury properties were 10 times lower than Monaco, the world's most expensive residential property market despite prices rising by 20 per cent in 2012 and 2013, respectively.

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In an interview with Emirates 24|7, Dubai Investments Chief Executive Officer Khalid bin Kalban said that the growth cycle in Dubai's real estate market had just begun and prices were still far below the peak of 2007-2008.

"Prices fell from the peak of 2007 and 2008 by a maximum of 60 per cent and a minimum 40 per cent; we even haven't reached that 40 per cent.

"Though we have seen increase of up to 20 per cent, we haven't really come back to the value of 2008.

"Generally, it's a five-year growth cycle... we are just at the start of the first year and so you still you have four years of growth."

UAE's safe haven status brought in a number of investors in the real estate sector, he said, adding, "Nothing can beat the capital appreciation on the property market except the stock market.

"An investor here can expect nothing less than 7.5 per cent return."


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RAK PROPERTIES ENDS 2013 WITH NET

PROFIT OF AED 151 M


RAK Properties, Ras Al Khaimah's biggest property developer listed on Abu Dhabi Stock Exchange, has announced net profit of AED 151 million for the year ended 31st December 2013, compared to AED 147 million in 2012.

This was announced on the sidelines of the Board of Directors (BOD) meeting. The board proposed 5% cash dividend for the year 2013. This proposal will be presented for ratification at the annual general meeting of the company due to be held on March 6th 2014.

Mohammad Sultan Al Qadi, Managing Director and CEO, RAK Properties said: "We are satisfied with the company's performance in 2013 and we anticipate stronger performance in 2014. In 2013, we handed over 192 residential units, including villas, townhouses, apartments and commercial offices in Mina Al Arab and Julphar Tower in Ras Al Khaimah and RAK Tower in Reem Island in Abu Dhabi."

"The leasing of residential, offices and retail space has seen a noticeable increase and this improvement is expected to continue during 2014. In 2013, the company set up a Customer Service Centre in Julphar Towers and also opened a full-fledged Sales Office in Mina Al Arab Project," he added.

He said: "Real Estate prices in the UAE are set to continue the rise in the coming period after the announcement of Expo 2020 bid win, and we expect that the property sector in Ras Al Khaimah will see a stable and sustainable growth in the long and short run."

In 2013, RAK Properties announced the 'Flamingo Villas' project that comprises 104 sea-view villas located on the coast line in Mina Al Arab. The villas come with all amenities, including separate swimming pools for adults and kids, children's play area with different play equipment, a multipurpose court and green turf areas.

"In 2013, we followed a clear strategy to provide modern architectural designs that come in harmony with the theme of RAK Properties 'Living Closer to Nature'. We equip our projects all the basic amenities and entertainment facilities to offer customers a quality living experience that meets their expectations in terms of quality and return on investment," Al Qadi said.

"We are proud to be one of the largest real-estate developers in the region. Our operations have seen significant expansion in Abu Dhabi and Ras Al Khaimah. Moreover, the company successfully attracted investors from various classes and well-known brand names in all its developed and underdevelopment amenities," Al Qadi added.


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DPG UNVEILS FURTHER

ENHANCEMENTS AT REMRAAM

COMMUNITY IN DUBAILAND

MONDAY 10 FEBRUARY 2014

Dubai Property Group, DPG, has unveiled details of further enhancements at its thriving Remraam community in DUBAILAND, including plans for a Geant Easy supermarket, set to open in the first half of 2014.

Now home to many families, Remraam is conveniently located just off the Emirates Road between the Jebel Ali Free Zone and Al Maktoum International Airport in the heart of DPG?s DUBAILAND district.

Sahar Al Ansari, Director - Real Estate Management at DPG, commented, "Our Remraam community has already proven to be a popular choice for Dubai families looking for spacious apartments with community facilities. Now, we are proud to announce further enhancements for the benefit of residents, including a Geant Easy supermarket, sporting and leisure facilities and a clubhouse for the whole family to enjoy." Once complete, the Community Retail Centre will also house a range of neighbourhood outlets including a pharmacy, laundry and a money exchange centre, as well as a flower and coffee shop.

Source: Emirates News Agency (WAM)

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DUBAI TO GET CHAMPS ELYSÉES-STYLE

STRIP


Union Properties, a Dubai-based publicly listed company, will launch a project replicating Paris’ famous Champs Elysées in Motor City by mid-2014, company Chairman told Emirates 24|7.

"Though we are planning to launch our project after a few years, we are now looking at launching it by mid-2014," Khalid Bin Kalban said.

The Champs-Élysées Street in Paris is one of the most expensive strips of real estate in the world.

Last year, the developer said it plans to launch six new projects worth Dh1.5 billion, which will include expansion of the Green Community in Motor City and The Ribbon, a retail development.

Apart from launching of the 'Champs Elysées project', Kalban said the company would launch five towers of 20 to 35-storeys in Motor City.

"We are working on the concept designs. We plan to sell the concept to investors."

Emirates 24|7 revealed earlier that Union Properties had been approached by investors who wished to buy two out of the six projects it plans in 2014 in concept design stage to an investor.

The developer's net profit jumped to Dh1.58 billion in 2013 from Dh175.8 million in 2012 with revenues reaching Dh4.49 billion compared to Dh1.87 billion.

The company also recommended a 5 per cent bonus share dividend to shareholders for 2013.


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ALDAR NET RISES 67% TO DH2.25BN


Aldar Properties, Abu Dhabi's listed property development, investment and Management Company, reported on Wednesday that net profit increased by 67 per cent to Dh2.25 billion in 2013 compared from 2012.

Revenue for the full year was Dh5.38 billion. The company’s fourth quarter net profit stood at Dh427 million, rising 79 per cent from the same period in 2012.

The growth in net profit for the year was primarily driven by the impact of the acquisition of Sorouh as well as ongoing handovers of units at key residential developments, sales of residential units, the handover of infrastructure as part of a transaction with the Abu Dhabi government announced in 2013, and higher recurring revenues from the Company’s hospitality and investment property portfolio.

Aldar Properties recorded a one-off gain on the acquisition of the net assets of Sorouh Real Estate following the merger between the two companies.

Commenting on the results, Abu baker Seddiq Al Khoori, Chairman of Aldar Properties, said: “We have moved quickly to build a platform for sustainable growth having completed our merger integration earlier than planned. We have strengthened our financial position, enhanced our capital structure and made progress balancing our business between developments and recurring revenues.

“We are seeing strong growth in the Abu Dhabi economy and Aldar will continue to play an integral role building communities and attractions that meet the lifestyle demands of both residents and visitors alike. We are currently working on new development projects from our extensive land bank that will lead us into a new phase of profit growth that will drive shareholder value.”

Recurring revenue

Recurring revenue grew 27 per cent to Dh1.83 billion over 2013, largely due to the combination of Aldar and Sorouh investment properties on merger.

Residential leasing activity picked up strongly at the end of 2013 at newly completed projects, including the Gate Towers and Al Rayyana, while the Company’s residential portfolio comprising leased assets at Sas Al Nakhl, Khalidiya Village, Al Raha Beach, Sun and Sky and Al Murjan Tower were almost fully leased.

Yas Mall, which is scheduled to open in November 2014, is set to transform the retail landscape in Abu Dhabi.

Revenues from the hospitality portfolio, which includes seven hotels on Abu Dhabi’s Yas Island and now the Tilal Liwa Hotel in the Western region of the emirate, increased 21 per cent to Dh504 million.

Full Year occupancy rates on hotels increased to 77 per cent in 2013, from 65 per cent in 2012.

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Real Estate development revenues were driven by the completion of key projects, in particular the Gate Towers, where 199 units were handed over during Q4 2013, as well as our ongoing programme of land and infrastructure deliveries to the Government.

Aldar also substantially completed several National Housing projects, which generate revenue for Aldar, including Al Sila’a in the Western Region, Al Ghuraibah in Al Ain, and Al Watani, Al Raha Gardens and Al Falah in Abu Dhabi. Our project management fee based pipeline is set to develop further with an increase in activity at Abu Dhabi Plaza in Astana, Kazakhstan that we are developing on behalf of the Government of Abu Dhabi as well as the Zone K residential project on Yas Island.

As of 31 December 2013, total assets were Dh43.7 billion and gearing (net debt to equity) was 58 per cent, compared to 144 per cent a year earlier. Aldar continues to maintain a strong cash position with Dh8.3 billion of cash and available liquidity at the end of the year.

Aldar is planning a number of new developments, including up to 1,000 units on Abu Dhabi Island, Yas Island and Al Raha Beach which will be developed in a phased approach and launching in first half of 2014 in line with market demand.

Following completion of the merger between Aldar Properties and Sorouh Real Estate, the two businesses are now fully integrated. Systems and processes are now aligned and all re-branding activity has been completed.

The company is well on track to exceed its per annum synergy estimate of Dh90-110 million.


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DUBAI'S TI'ME PLANS NEW HOTELS IN

UAE, QATAR, EGYPT


TI’ME Hotels Management will open properties in Ajman, Luxor, Qatar and Abu Dhabi over the next 18 months, taking the group portfolio to 11 properties.

The hotel group said a new head office in Dubai and regional office in Cairo will drive expansion plans.

This year, the mid-scale TI’ME group will take over the management of the 154 room TI’ME Tut Hotel in Luxor, Egypt as well as the TI’ME Capital Hotel Apartments in Ajman, UAE, with 120 apartments due to be handed over in March.

In 2015, the 42-storey Al Jawhara TI’ME furnished apartments will open in Abu Dhabi, and in Qatar the nine-storey TI’ME Rako Hotel will open its doors in the industrial belt of Wakra, close to Doha.

TI’ME Hotels CEO, Mohamed Awadalla, said: “Demand for modern, well managed and competitively priced accommodation is rising in all of the major resorts and cities throughout the region.

"In this respect local independent hospitality brands are more readily accepted in the value chain. We have a grassroots understanding of the regional markets, our overheads are modest and we are flexible when it comes to respecting an owner’s aspirations.”

TI'ME said its new head office covers 360 square metres on the fourth floor of the Al Fattan Plaza, the home of Dubai Government’s Department of Tourism, Commerce Marketing.

Additionally, the company is in the final stages of acquiring office space in Cairo, which is due to become operational by March 1. The office will serve as a platform for supporting sales and marketing in Egypt and expansion plans for the area.

TI’ME Hotels Management recently marked its first foray into the Abu Dhabi market with the opening of the 72-unit TI’ME Pearl Residence.

Source: Arabian Business

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AL HABTOOR PROMOTES EXEC TO

OVERSEE $3BN DUBAI PROJECT

FRIDAY 14 FEBRUARY 2014

Al Habtoor Group, the Dubai conglomerate, said on Friday that it has promoted Henning Fries to managing director of the company's hospitality division, adding that he will be responsible for overseeing the opening of the $3bn Al Habtoor City project.

The project, a multi-use development currently under construction, will incorporate three five star hotels - WESTIN, W Hotel, St Regis - as well as three high-residential towers.

Fries, who joined the Group in early 2013, oversees the global hotel assets, and has been instrumental in driving growth in the hotels division, the company said in a statement.

The promotion, which takes place effective immediately, is part of a "realignment of a cohesive strategy" across the Group, it added.

Mohammed Al Habtoor, vice chairman and CEO, Al Habtoor Group said: "Mr. Fries has been a great addition to our management team. He has been key in driving growth for the business and plays an important role in our business strategy."

Fries recently oversaw the successful opening of the Waldorf Astoria Dubai Palm Jumeirah, the latest addition to the Al Habtoor Group's growing portfolio.

The Group currently runs and operates hotels in the UAE, Lebanon and Hungary.

Before joining the Al Habtoor Group, Fries oversaw operations for several top brands including Fairmont Hotels & Resorts, IHG, Mandarin Oriental Hotel Group and Mövenpick Hotels & Resorts.

In December, Al Habtoor Group announced a major reshuffle across its boards as part of plans to enhance growth.

The shakeup, across all units, includes hotels, motors, real estate, schools, car rental as well as the Group's legal and audit boards.

Source: Arabian Business

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ESTATE AGENTS WELCOME ABU

DHABI’S RENT INDEX


Property experts have welcomed a proposed rent index for Abu Dhabi as likely to bring stability to the market.

The index, which is expected to be introduced next month, will use market data to set fair rents for each of 10 to 12 residential zones on Abu Dhabi Island.

“I think it is what the market needed,” said Istvan Berger, manager of the property company Light House Abu Dhabi.

“The Government did the right thing last November by removing the 5 per cent rent cap because with the rising cost of maintenance and service fees it was becoming unfeasible for property owners.

“But there needs to be a balance in how high rents can go because people only get a certain salary and if they can’t afford a place in Abu Dhabi then they will move to other emirates.”

Demand was still high for apartments, particularly in newer developments and from large companies, he said.

“The older areas may have more supply than demand at the moment but we expect to see prices increase by between 10 and 15 per cent this year, before stabilising,” said Mr. Berger.

William Neill, head of Cluttons Abu Dhabi, said the industry had expected an initiative after the removal of the 5 per cent cap.

“This is good timing for the rental market as it begins to mature,” he said.

“We would like to see more details about how it will work but I think it will provide protection for tenants and landlords as it will be a guide to what the current market rates are.

“We don’t expect rents to increase that much this year as most people who had to downsize have already done so.”

Despite the removal of the cap there was little evidence that landlords had increased rents significantly above the market level, said Mr. Neill.

“We did hear stories that people in the Khalifa City A compounds were told that they would be seeing huge increases but from our experience we didn’t see that.”

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Areas where there could be higher growth this year were Reem Island, Al Reef and Al Raha. “There is a supply and demand balance at the moment but we are seeing more construction projects being announced,” said Mr. Neill.

“Once they are built there could even be a downward push on rents as higher numbers of residential units come on to the market.”

David Dudley, head of Jones Lang LaSalle-Abu Dhabi, said the index would help to keep rents competitive, especially amid concerns about excessive increases after the removal of the cap.

“Prime rents in Abu Dhabi increased by 17 per cent during 2013,” he said. “It was not emirate-wide, but at prime locations.

“There was a concern that the removal of the rent cap would result in hugely increased rents, making the market in Abu Dhabi uncompetitive.

“The index will hopefully maintain rates at a competitive level.”

Al Ittihad, the Arabic-language sister newspaper of The National, reported that property company data showed more than 10 per cent of residential apartments on Abu Dhabi island, about 20,000 homes, were unoccupied.

The index is being compiled by the Department of Municipal Affairs, the Department of Economic Development, the Urban Planning Council and the Abu Dhabi Council for Economic Development.

Residents hope it will counteract rising rents. “The rent is way too high,” said Asif Ali, a Pakistani expatriate who lives in Mussaffah.

“They removed the rent cap, so now we have no security. I’ve been told indirectly by my landlord that the rent will increase, but I have no idea by how much.

“They need a straightforward rule to set the rents.”

Wilfredo Mirana, from the Philippines, used to live in Dubai and considers rents in the capital “better”.

“My rent is increasing though. After Dubai won Expo 2020 even here in Abu Dhabi I will be paying more. My rent has already gone up by Dh200 a month, but it might go higher again.”

“I think there should be a limit on how much it goes up.”

Source: The National

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PRESSURE MOUNTS TO LIFT FOREIGN

OWNERSHIP LIMITS ON UAE SHARES


Pressure is building to lift foreign ownership limits in the UAE.

The property developer Deyaar Development has become the latest company to consider opening up to outside buyers.

UAE stocks are expected to be incorporated into MSCI’s emerging markets index in May – a move that is forecast to attract Dh1 billion in investments into listed companies. Last June the international index compiler upgraded the UAE’s classification from frontier market to emerging market.

Deyaar’s board is due to meet tomorrow to discuss allowing foreigners to own company shares.

“A foreign ownership of 25 per cent is crucial to be included in the MSCI Emerging Market Index. Many institutional investors that use [the index] as a benchmark would start investing in those UAE names, if certain other conditions are also met,” said Jaap Meijer, the executive director for research at Arqaam Capital, a Dubai-based boutique investment bank.

Increasing the foreign ownership limit would allow companies to “further tap the international capital markets for equity capital,” said Oliver Schutzmann, the vice chairman of the Middle East Investor Relations Society (Meirs).

“At the end of the day a lot of listed companies want to attract international institutional investors because they tend to have deep pockets, take a longer-term view of company strategy and it is easier to build relationships with one large investor than lots of small retail investors.” Meirs “would not be in favour of removing foreign ownership restrictions altogether because it could open the floodgates to hostile takeovers from abroad,” Mr. Schutzmann said.

Under UAE rules, most companies listed in Abu Dhabi and Dubai may choose to allow investors from outside the UAE or GCC to buy up to 49 per cent of their shares. However, many choose to set their foreign ownership limits at a lower level and some do not allow any foreign ownership at all.

In July 2012, the state-controlled telecoms company Etisalat said it was in talks with the Government about lifting a ban on foreign ownership of its stock. Shares of Etisalat remain accessible only to Emiratis.

In recent months more and more UAE companies have increased the number of shares they allow foreign investors to buy as they take advantage of growing demand from overseas.

In September, Mashreq raised its foreign ownership limit to 20 per cent from 0.9 per cent and the bank added it was already planning a second increase.

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Abu Dhabi Islamic Bank said in November that it was working on a plan to give international investors access to its shares.

And in December, Dubai Islamic Bank approved a plan to lift the amount of the bank’s shares that foreign investors can buy to 25 per cent from 15 per cent.

Meanwhile overseas investors have been snapping up the shares they are allowed to own. Foreign investors currently hold 48.9 per cent of shares in the Dubai-listed logistics company Aramex. Similarly they own 43.7 per cent of shares in the construction firm Arabtec.

They also own 18.93 per cent of RAK Bank, which currently allows a 20 per cent foreign ownership, as well as 13.73 per cent of Dubai Islamic Bank, which allows a 15 per cent foreign ownership.

Union Properties, which sets its foreign ownership limit at 15 per cent, is currently 14.71 per cent owned from outside the Emirates.

This month the Aramex chief executive Hussein Hachem called for the limits on foreign ownership of its shares to be amended above the 49 per cent limit, citing strong global demand for its equity from abroad.

“There is a queue for our stock from global investors. Having the foreign ownership limits is a handicap for us, because we are a global company. More liquidity would be very positive for us,” Mr. Hachem said.

“If UAE markets want to compete on the international scene, removing foreign ownership limit for non-strategic industries is a must,” said Fathi Ben Grira, the chief executive of Menacorp, an Abu Dhabi investment company.

Deyaar said in its filing yesterday that it would also consider a restructuring plan, without further elaboration. That sent the stock down 3.79 per cent.


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ALDAR PLANS TO BUILD 1,000 UNITS

IN ABU DHABI AS NET PROFITS SURGE


Aldar Properties aims to develop 1,000 new apartments across Abu Dhabi from Al Bateen to Raha Beach.

Abu Dhabi’s only major listed property developer said it would start to sell the new units in the first half of this year – 500 of them on Yas Island, 250 at Raha Beach and another 250 at Al Bateen Peninsulas.

The developer yesterday disclosed full-year profits of Dh2.25 billion, 67 per cent higher than a year earlier, before it merged with its rival, Sorouh.

The results missed expectations because of previous project delays.

Aldar said that the largest of its three new developments would be located close to Aldar’s Yas Mall, which is due to open in November. It will be the company’s first private housing scheme on Yas Island, which is also master planned by Aldar.

The new Raha Beach scheme is set to be located close to Aldar’s Al Bandar complex, while the Al Bateen Peninsula scheme will be on an island close to Abu Dhabi, the developer said.

“We could be selling any one of these developments at Cityscape Abu Dhabi in April. All three could be there if we see that appetite is increasing,” said Gurjit Singh, Aldar’s chief development officer.

“In the coming months you will see how people move away from renting because the rent cap is off. People are starting to think where they will put their equity – to rent or into a piece of real estate to stay in immediately – or to stay in three years’ time when they can accumulate sufficient capital. The public should watch this space because Aldar is going to come in with some very attractively priced real estate,” he said.

Aldar added that it was also set to start work on a national housing scheme to be known as Zone K on Yas Island on behalf of the Abu Dhabi Government, which it said would help Yas Island reach a “critical mass”.

Shares in Aldar fell 4.23 per cent to Dh3.4 as the company reported a fourth quarter net profit of Dh427 million, a 79 per cent increase on the same period the previous year, before Aldar merged with Sorouh, but still falling short of analysts’ expectations.

“Handovers at national housing projects, namely Watani (703 villas), Sila’a (448) and Ghuraibah (600) were delayed until the first half of 2014. Management previously guided for the handover of 3,000 units in the fourth quarter of 2013 in a number of projects that by our estimates could have contributed about Dh4.5bn in revenues,” said Mohammad Kamal, an analyst at Arqaam Capital. “The delivery of these

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units is consequently rolled forward to the first half of 2014 once building completion certificates are finalised.”

During the year, Aldar said that it had handed over 199 flats at its newly completed 3,533-flat Gate Towers scheme on Reem Island in Abu Dhabi, and that it had leased out 36 per cent of its 1,537 Al Rayyana development on the Abu Dhabi mainland, which had been evacuated after a courtyard collapsed in 2012.

“We expect to sell only about 250 units on the open market,” said Greg Fewer, Aldar’s chief financial officer. “We’re actually going to be holding back some sale product because we prefer to have these in the leasing portfolio. In Abu Dhabi the gross yield is between 7 and 7.5 per cent. That’s attractive.”

Aldar said that despite delaying the planned opening date for its Yas Mall shopping centre by eight months to November to coincide with the Abu Dhabi Formula One race, retailers had committed to lease more than 80 per cent of the 2.5 million square foot mall and that handover of shops to tenants for fit-out had begun.

“The construction completion will happen earlier this year on time, on plan and on budget,” said Mr. Fewer. “It’s actually marginal how much the extra cost is not to have opened. We’ve done the analysis – what it costs versus what we think the tangible and intangible value preservation side of that equation is and we’ve made our decision.”

Aldar said that it was “well positioned” to manage Dh7.9 billion of debt that is due to expire this year.

“We’ve got Dh8.3bn of cash and available liquidity set up already on the balance sheet as of the end of the year, so we’re well positioned to manage this year of maturities,” Mr. Fewer said.


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REVENUES AT JEBEL ALI FREE ZONE

REACH A RECORD DH1.53BN


Jebel Ali Free Zone reached record revenues of Dh1.53 billion last year as rents in Dubai’s industrial district soared, pushed up by increased demand amid government plans to build the world’s leading logistics hub in the emirate.

The free zone is an industrial area exempt from foreign ownership restrictions. It rents out warehouse space to companies, and is located close to several of Dubai’s zoned industrial and logistics areas, and the Jebel Ali Port.

JAFZ paid down a big chunk of its outstanding debts last year, while annual profits rose to Dh690 million from Dh 252m, according to a London Stock Exchange filing.

“JAFZ’s fundamentals are very strong,” said Edward Batten, associate director at Knight Frank, a property consultancy. “It’s a household name … [and] the busiest port outside of Asia.”

Rents, which currently stand at about Dh36 per square foot for industrial space at JAFZ, increased by 19 per cent in the second half of 2013, and are trending up, according to data from Knight Frank.

“We’re seeing a big squeeze on available stock,” said Mr. Batten. “There’s a lot of leasing activity,”

Industrial, manufacturing and logistics firms account for the highest number of rental inquiries for the JAFZ site, followed by the food and beverage sector, according to the data.

Profit increases were driven by a major fall in costs, following the transfer of an “integrated facility complex”, believed to be its conference centre, to its parent company. In exchange for this, Dubai World paid Dh1.1bn toward reducing the free zone’s debt pile, according to the filing.

This move enabled the free zone to cut its gearing ratio – which measures the company’s debts as a proportion of total capital held – from 50 per cent in 2012 to 39 per cent in last year.

JAFZ issued a Dh2.38bn Islamic bond in 2013, which is set to mature in 2019. That is in addition to a term loan of Dh4.4bn, of which Dh1.81bn has so far been repaid.

The transfer of the building also helped to cut the free zone’s costs.

“JAFZ didn’t continue with the investment [in the conference centre] because they would have completed it at the wrong time in the market,” said Mr. Batten. “[But] we’re now seeing real growth in the market, and big inquiries in the office sector will start doing deals there sooner rather than later.

“The conference centre is probably going to come to market at a very good time,” he said.

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JAFZ, which covers an area of 56 sq kilometres, owns an estimated Dh6.13bn of investment property, according to the filing.

“We enjoy the advantage of having the port, the free zone, the logistics corridor and the Al Maktoum airport with a small area,” said Hisham Al Shirawi, JAFZ’s chairman. “That’s the biggest and most efficient logistics corridor in the world – [cargo can move] from sea to plane in no time.”


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POACHING THE NAME OF THE GAME

FOR GULF HOTELS


Hotels are poaching staff from rivals as an acute shortage of workers poses a challenge for hospitality operators seeking staff for hundreds of new properties planned across the Arabian Gulf. Hiring is set to become particularly difficult in Dubai as the number of hotel rooms is predicted to double by the time the city hosts the Expo 2020.

“Hotels are poaching from one another,” said Laurent Voivenel, the chief executive of Hospitality Management Holdings (HMH), which operates 32 hotels in the Middle East.

Hoteliers attract better staff from their competitors “by offering better benefits, better accommodation, or minimum percentages of service charges,” he said.

International hotel groups are adding tens of thousands of new hotel rooms across the region as improved flight connections through hubs such as Dubai, Abu Dhabi and Doha spur building.

Events such as Expo 2020 and the 2022 Fifa World Cup in Qatar provides an additional lift to the hospitality industry.

Starwood Hotels & Resorts, which has brands such as Sheraton and St. Regis, expects to hire 6,000 people by 2017 in the Gulf. The Dubai-based HMH expects to recruit 700 people as it looks to open five properties in the Middle East, including the UAE, this year. They include a 304-room Coral International Sports City in Dubai in the next quarter.

The Hilton Hotels & Resorts, which has brands such as Conrad and DoubleTree, has 392 job openings in the UAE alone.

“Quite a bit of poaching takes place,” said Raj Bhatt, the chief executive of Hozpitality.com, a specialist recruitment site. “A lot of movement is happening – and much more than five years ago.”

The trend is fuelling inflation in the industry as operators are forced to offer better pay or improve terms and conditions at a time of accelerating inflationary pressures in cities such as Dubai and Abu Dhabi.

“The easiest way is poaching, said Sunjeh Raha, the managing director of the Dubai-based International Centre for Culinary Arts, which trains chefs to work in hotels. But while “this will raise wages, [it will] not increase supply,” he said.

Currently, Dubai has around 84,000 rooms – but this figure is expected to double as around 20 million visitors pass through the city in 2020.

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Almost 90 per cent of the projected 277,149 employment opportunities generated by Expo 2020 would occur between 2018 to 2021, according to the Dubai government team behind the event. Expo 2020 is expected to add 110,000 new jobs to the hospitality and tourism sector, according to government estimates. Hotel companies will come under increasing pressure to hire from rivals as hotel building gathers pace, say industry analysts.

“There’s no way hotels can keep up,” said Martin McGuigan, the head of reward consulting at Aon Hewitt Middle East. “We are going to see more talent swapping between hospitality groups, and more brand names are poaching from each other or from mid-tier hospitality companies.

While salaries in Dubai hotels have not changed significantly, many hotel operators are looking to recruit from further afield to source people with the required skills. Countries that include Myanmar, Russia, Tunisia, Morocco and even Brazil are becoming popular source markets for hospitality employees, say analysts.

Hozpitality.com currently lists 2,000 positions and more than 300,000 applicants from 200 countries are registered on the website. This month, the website recorded 40,000 applications – up almost a quarter compared to last year, for a similar number of vacancies.

“Recruitment had slowed down considerably between 2008 and 2012, and started picking up last year,” he said.

Hotels are also increasingly looking at how they can improve their benefits packages to attract the best talent.

Headhunters compete over “everything from level of training and investment, career prospects, accommodation, healthcare cover, [and] what [the job] does for your family,” said Mr. McGuigan.

“Typically, hospitality isn’t the highest paying industry in the world – so small things can make a very substantial difference to that mid-level of talent,” he said.


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DRAKE & SCULL PROFITS RISE WITH

CONSTRUCTION ACROSS REGION


Expansion across the Middle East helped to drive full-year profits at Drake & Scull International (DSI) up by 61 per cent.

Net profit rose to Dh185 million as sales surged 47 per cent to Dh4.9 billion at the Dubai-based contractor that specialises in mechanical, electrical and plumbing work.

That helped to increase its order backlog by more than a third to Dh12bn.

“We continue to focus on cost reduction, return on capital and liquidity to drive sustainable performance across all our markets,” said Mukhtar Safi, the DSI chief financial officer. “We will remain selective in the new construction projects we undertake to minimise risk and preserve capital.”

UAE construction companies such as DSI, Arabtec and Depa have been expanding their global footprint amid rapidly rising building activity across the region.

Total planned and unawarded contracts from the GCC region now stand at about US$1.04 trillion according to Meed – or about two thirds of the region’s GDP.

DSI has been extending its reach beyond its specialist origins to pick up larger and more mainstream construction orders, helped by a number of acquisitions in recent years.

This week one of its units won a Dh375 million contract to build The Pointe retail development on the tip of Dubai’s Palm Jumeirah artificial island, close to the Atlantis hotel.

The GCC remains the key growth market for the company, with 42 per cent of its order book originating out of Saudi Arabia.

It has also expanded across the Levant region, with Jordan contributing about 12 per cent of new project awards last year.

DSI hopes to add more projects across the oil, gas and rail sectors in the year ahead.


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TEMPORARY REPRIEVE ON LIFTS FOR

BURJ KHALIFA RESIDENTS IN FEES

ROW


Burj Khalifa tenants were given a reprieve on Sunday when they were allowed to use lifts to get to their homes, despite some landlords still not paying outstanding service fees.

Air conditioning in the world’s tallest tower, at 829.8 metres also remained switched on to all apartments, although security cards giving access to gyms and pools were deactivated by the developer Emaar.

Access to facilities and utilities were due to be cut on Saturday, Emaar’s deadline for fees to be paid.

Now some tenants, unsure how long they will be able to get home or even when their landlords will settle the bills, have decided to look for new places to live.

“They gave us a one-day extension instead of services turned off on Saturday, these were turned off today,” said a Burj Khalifa resident.

“We got a call from Emaar that we could use the lifts and they said the air conditioning would not be switched off. They have turned off everything else – gym and pool access. “We have asked for an extension of facilities since we have paid our rent in full. We view it as a small win for tenants that we can use the elevators but it’s best to move soon.”

Developer Emaar issued letters last month listing services that would be cancelled as a warning to owners of apartments whose maintenance fees were unpaid.

“We write to you in respect of outstanding service fees. Despite our earlier notice, follow-ups and legal notice issued to the unit owner the fees have not been settled,” stated the letter dated January 27.

“Should we fail to receive the payment by February 5, we will be forced to cease all of the above services effective February 8.”

There was no response from Emaar on Sunday but on Thursday the developer urged owners to make payments since this went towards management of common areas.

“While most homeowners have paid their service charges, it has been noticed that a few owners are yet to make the payment. A circular has been issued to remind and urge residents to pay the service charges to ensure the seamless management of the common areas and other community amenities,” a spokesperson said.

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“For the welfare of all residents, it is the responsibility of individual homeowners to make the service charge on time.”

In the 163-floor building, studios and one to four-bedroom apartments are between levels 19 and 108. The developer did not provide the number of residents whose access to facilities has been revoked.

Tenants received support from landlords who said renters should not be punished.

“It is unfair because this is not the tenants’ fault, they have paid their rent and it is not fair they suffer,” said MG, a landlord with more than 10 properties in the Burj for which all fees are paid.

“They (Emaar) need to find something that will affect the owners, that’s what they need to focus on.”

Residents of the 900 apartments have amenities such as tennis courts, landscaped gardens, fitness centres, indoor and outdoor pools, a children’s playground and pool.

Annual maintenance fees for a one-bedroom apartment was below Dh100,000, for a two bedroom between Dh120,000 to 150,000 and for a three bedroom between Dh200,000 to 220,000

There have been numerous instances of service fee disputes across Dubai with renters advised to seek confirmation from the developer or community management that all fees were paid before signing a tenancy contract.

For the last two years, Emaar has used ‘name and shame’ tactics by identifying the house number of defaulters on display boards at the entrances of Arabian Ranches, The Lakes, springs and The Greens. The developer also warned defaulters it could stop rubbish collections.

Air conditioning was cut for several hours to villas in Jumeirah Islands last year by the developer Nakheel. The developer also drained and then refilled swimming pools in a Palm Jumeirah development in 2012 and the year before Shoreline residents also on the Palm were denied beach access due to unpaid fees.


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With 29 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 - Dubai +971 4 403 7789 [email protected]

VALUATION & ADVISORY

Our professional advisory services are conducted by suitably qualified personnel all of whom have had extensive real estate experience within the Middle East and internationally. Our valuations are carried out in accordance with the Royal Institution of Chartered Surveyors (RICS) and International Valuation Standards (IVS) and are undertaken by appropriately qualified valuers with extensive local experience. The Professional Services Asteco conducts throughout the region include: • Consultancy and Advisory Services • Market Research • Valuation Services

SALES

Asteco has established a large regional property sales division with representatives based in UAE, Saudi Arabia, Qatar and Jordan. Our sales teams have extensive experience in the negotiation and sale of a variety of assets. LEASING Asteco has been instrumental in the leasing of many high-profile developments across the GCC.

ASSET MANAGEMENT Asteco provides comprehensive asset management services to all property owners, whether a single unit (IPM) or a regional mixed use portfolio. Our focus is on maximising value for our Clients.

OWNER ASSOCIATION Asteco has the experience, systems, procedures and manuals in place to provide streamlined comprehensive Association Management and Consultancy Services to residential, commercial and mixed use communities throughout the GCC Region.

SALES MANAGEMENT Our Sales Management services are comprehensive and encompass everything required for the successful completion and handover of units to individual unit owners.

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