NEWS BRIEF 09 - Asteco Property ManagementLast week, Emaar Properties and Meraas Holding even...

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VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 09 SUNDAY 28 February 2016





REAL ESTATE NEWS

UAE

UAE PROPERTY INSURANCE PREMIUMS TO SOFTEN DESPITE BLAZES LEBANESE TOURISM TO BE HIT BY UAE TRAVEL BAN

DUBAI

DUBAI PROPERTY DEVELOPERS TRY NEW WAYS OF ATTRACTING BUYERS AS MARKET REMAINS IN A RUT

DP WORLD SIGNS CONTRACTS FOR HUGE FOURTH TERMINAL AT JEBEL ALI

NAKHEEL IN DEAL FOR DUBAI LUXURY HOTEL

AZIZI SAYS DUBAI PROPERTY TO RECOVER FAST AS IT LAUNCHES PALM JUMEIRAH PROJECT

TROPICAL ISLAND HOME JUST A SHORT HOP FROM THE UAE – IN PICTURES

DH350M ROYAL BAY RESIDENCE WILL BE COMPLETED BY MARCH 2017

DH1.23 TRILLION PROJECTS PLANNED IN DUBAI, RESIDENTIAL AT DH244 BILLION

NO ARBITRARY RENT HIKE ALLOWED: FOLLOW DUBAI RENT INDEX, LANDLORDS TOLD

SERENA’ IN DUBAILAND: ‘AFFORDABLE’ DUBAI PROPERTY GETS 8.2M

SQFT PUSH

LOW PRICE, HIGH RENT YIELD: BEST TIME TO BUY DUBAI PROPERTY?

ABU DHABI

ADNEC SIGNS DEAL TO BRING MORE EVENTS TO ABU DHABI

ABU DHABI COMPANY TO BUILD 6-TOWER LONDON PROJECT





DUBAI PROPERTY DEVELOPERS TRY

NEW WAYS OF ATTRACTING BUYERS

AS MARKET REMAINS IN A RUT

MONDAY 22 FEBRUARY 2016

Dubai property developers are offering increasingly generous terms to clinch sales in a softening market.

Incentives include deferred-¬payment plans and guarantees over income and capital values.

Last week, Emaar Properties and Meraas Holding even offered a deal where investors can pay 40 per

cent of the purchase price after handover of homes at Sidra villas in Mohammed bin Rashid City.

The developer G&Co announced a similar payment plan for its Dh1 billion Jade at the Fields project, also

in Moh¬ammed bin Rashid City.

The company, which is owned by the former Menacom chief Joseph Ghossoub, asks investors to pay just

5 per cent of the value of a property, followed by a further 6 per cent every six months during the three-

year building programme. A further 15 per cent is payable on completion, totalling just over half of the

building’s overall value. The rest can be paid in quarterly instalments for three years after the handover.

The moves follow a highly publicised deal by Damac Properties offering investors a guaranteed annual

return on advance payments during construction of 3 per cent a year – twice the amount likely to be

received from a bank – until completion.

Damac’s managing director Ziad El Chaar said the offer of a guaranteed return of 3 per cent on funds

invested during construction is currently a trial, and only available on serviced apartments at its

Paramount Hotels and Residences project in Business Bay. e said that the offer was aimed at

encouraging reluctant buyers.

“Many people today are thinking ‘maybe I will invest after six months or maybe the right time to go into

the market will be after one year’. The main driver is to motivate people to enter the market today.”

Damac also announced a “capital guarantee” offer, which guarantees the value of a home for two years

after delivery. Again, this is a trial offer and is currently available only for buyers of villas at its Akoya by

Dam¬ac scheme. Damac has said that it will pay the difference to investors if the villas, which are due

for completion this year, decline in price by the end of 2019.

Mr El Chaar said that the company was not taking unnecessary risks by offering such a guarantee,

arguing that Damac took a conservative approach to managing its finances and that it had net cash of

close to US$1.5 billion. Moreover, its exposure is only on the remaining villas at its Akoya scheme.

It does not reveal sales figures for individual projects, but there are a total of 2,400 villas within the

Akoya project.

“We usually launch such kinds of projects on products where we have a good pot in the escrow

accounts, so we are not taking unnecessary risks,” Mr El Chaar said.





Craig Plumb, head of research at JLL’s Dubai office, said: “With the Dubai market softening, developers

are thinking up ingenious ways to try to attract buyers.

This is a sign that risk is shifting to developers. It will limit the amount of new projects developers can

do.

“I imagine this will make developers themselves slightly less attractive as an investment or slightly

riskier but really, extending the payment plan to after hand¬over is really just bringing Dubai more into

line with other international markets where people would get a mortgage for a property and spread

payments over 25 years.”

He points out that the Islamic finance company Amlak, which is partly owned by Emaar Properties, grew

out of a similar attempt by Emaar to take on property debt during the Dubai property boom. The lender

faced collapse as the housing bust of 2009 came close to wiping out the value of its portfolio but

resumed trading on the Dubai Financial Market last year.

“These offers are indeed a sign that the market is getting more competitive, but we believe that it

doesn’t have any particular effect on the stock,” said Sanyalak Manibhandu, head of research at NBAD

Securities.

“These sort of deals are the sort that only the big developers are able to afford to do. Effectively, what

they are doing is pricing smaller Dubai developers out of the market. We don’t expect them to offer

these sort of deals on all projects, and if they find that they aren’t working then they will probably not

continue with them.”

Source: The National

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UAE PROPERTY INSURANCE PREMIUMS

TO SOFTEN DESPITE BLAZES

MONDAY 22 FEBRUARY 2016

Property insurance premiums in the UAE could fall this year despite a spate of high-rise fires because of

excess capacity in the market, a new report from Marsh shows.

The global insurance brokerage expects overall property premiums to fall by between 10 and 20 per

cent amid fierce competition in the sector.

Several high-rise fires including one at the Address Downtown Dubai on New Year’s Eve have drawn

increased scrutiny from insurers.

“The general liability market is highly competitive, especially for those accounts that are considered to

be well risk-managed and profitable,” said the Marsh Insurance Market Report 2016. “Recent high-

profile fires are unlikely to impact underwriting attitudes however as these buildings are not excluded by

reinsurance treaties, for example the Dubai hotel fire on New Year’s Eve.”

However Marsh said that some insurers believe the spate of recent losses could lead to requests for

“more detailed underwriting submissions and being more vigilant on risk-management practice”.

Neil Irwin, who heads up the regional business of Marsh, said there was an abundance of capital

available for the right managed risks and increasing reinsurance capacity becoming established in Dubai.

He also acknowledged that there are some risks that may not be so well managed where the approach is

to assess the construction of the building, its maintenance and usage.

Global insurance groups have taken a keen interest in building facade blazes following a number of high-

profile fires linked to the use of aluminium composite panels filled with flammable plastic material.

These include the Torch Tower blaze in Dubai Marina last year and earlier fires at the Al Tayer Tower in

Sharjah and the Saif Belhasa Tower in the Tecom district of Dubai.International insurance groups such

as Liberty Mutual, FM Global and Tokio Marine have funded research into fac¬ade fires worldwide.

The latest round of results from UAE insurers released this month highlights the competitive pressures

facing underwriters as they are forced to slash the cost of policies to win market share. The high-risk

strategy has left many exposed and sitting on losses.

Abu Dhabi National Insurance Company posted a full-year loss of Dh334.5 million in 2015, while Oman

Insurance Com¬pany, with the biggest UAE market share, posted a Dh31m loss in the fourth quarter.

Zurich has said it plans to quit the non-life business in the Middle East.


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DP WORLD SIGNS CONTRACTS FOR

HUGE FOURTH TERMINAL AT JEBEL ALI

WEDNESDAY 24 FEBRUARY 2016

DP World yesterday signed two major construction contracts for its US$1.6 billion futuristic fourth

terminal at Jebel Ali port.

The Dubai company, which is one of the largest ports operators in the world, awarded the contracts to

Dutco Balfour Beatty and BAM International Abu ¬Dhabi for the new terminal that will be built on a

reclaimed island north of terminal 2.

Under the terms of the deals, Dutco Balfour Beatty will build the terminal’s main operation yard

including a 1,200-metre long quay designed to accommodate the largest mega container vessels.

Meanwhile BAM will build a 400-metre bridge as well as a 2.2-kilometre, 18-metre deep quay wall. And

the engineering company CH2M Hill (Halcrow) will deliver the civil works on the reclaimed island.

The first phase is expected to be ready by 2018.

DP World did not reveal the ¬value of the construction contracts it had awarded.

“This terminal is the big idea that will change the way ports work in the future. We will deploy the latest

technology in equipping our quays and yards, and run them with the most soph-isticated terminal

operation systems,” said Sultan bin Sulayem, the DP World chairman and chief executive.

“We have a long track record of investing proactively to expand capacity at our operations to meet

changing customer needs. We are building terminal 4 from the ground up, which enables us to future-

proof it for smart container ships emerging in the future.”

By next year, DP World said the new terminal would include 13 of the world’s largest and most modern

giant quay cranes, operated by remote control and another 35 smaller gantry cranes.

According to DP World, the first phase of construction alone would enable terminal 4 to handle 3.1

million giant shipping containers or TEUs (twenty-foot equivalent units), taking Jebel Ali Port’s total

capacity to 22.1 million TEU by 2018.

By that time DP World predicted that Jebel Ali would be equipped with at least 110 cranes with a total

quay length of about 11,000 metres.

A second phase of expansion, set for an unspecified future date, will involve Dutco Balfour Beatty

building an additional operation yard with a 1,000-metre long quay at the terminal.

When that is finally completed – something DP World said would only go ahead “in line with market

demand” – terminal 4 would be able to handle a total of 7.8 million TEU.

The decision to press ahead with construction at terminal 4 comes despite the fact that this month DP

World reported a fall in volumes at its UAE facilities during the fourth quarter of 2015.

Consolidated volumes at the company’s UAE facilities, dominated by Jebel Ali Port, fell 2.9 per cent year-

on-year to 3.7 million twenty foot equivalent units (TEUs) in the three months to the end of December






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NAKHEEL IN DEAL FOR DUBAI LUXURY

HOTEL


Nakheel signed up with Thailand’s Minor Hotel Group to manage the developer’s second property at Ibn

Battuta Mall in Dubai.

The mall, which is undergoing an expansion, expects to open the 372-room property in 2018. It will be

branded as one of the upscale Avani Hotels and Resorts. A second property at the mall, a 372-room

Premier Inn, is expected to open this year.

Dubai’s ever-increasing number of hotel rooms, meanwhile, is putting downwards pressure on rates and

occupancy.

Last month, the average room rate in Dubai was Dh914.09, a 10 per cent decline year-on-year, while

occupancy slid 0.8 per cent year-on-year to 85 per cent, said the research company STR Global.

In November, Dubai had 78,184 rooms, or a 5.5 per cent increase year-on-year, according to the latest

data.

Ibn Battuta Mall’s new 14-storey hotel will have direct access to it, and a link to the Dubai Metro.

The mall is adding 766,000 square feet of retail and entertainment space. The expansion is expected to

take three to five years, according to the developer.

The mall currently receives 22 million visitors a year. The extensions will add about 1,000 shops to its

current 300, and two multi-screen cinemas.

The Minor Hotel group has a joint venture with Nakheel to build a 500-room Avani beachfront resort at

the developer’s Deira Islands project

This month, the developer opened a 251-room ibis Styles hotel at Dragon Mart, and has another seven

in the pipeline that are expected to take between two to five years to complete.

A 320-room Premier Inn is in the works at Dragon City.

Under construction is The Palm Tower, a 289-room hotel, that will be branded St Regis. The luxury hotel

will occupy the first 18 floors of the 52-storey tower.

Other projects include a joint venture with Spain’s Riu Hotels and Resorts for a 750-room, all-inclusive

beachfront resort. Nakheel also has a joint venture with Thailand’s Centara Hotels and Resorts for a

550-room resort and water park, which is in the design phase, also at the Deira Islands.


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ADNEC SIGNS DEAL TO BRING MORE

EVENTS TO ABU DHABI


Abu Dhabi National Exhibition Centre (Adnec) has signed a deal with Index Conferences and Exhibitions

to attract more events to the capital.

The Dubai-based firm, which has opened an office in Adnec, will initially bring four new events to Abu

Dhabi.

Adnec will host Children & Parents World Exhibition, Lifestyle Exhibition, Media Communication &

Content World Conference and Atech World Conference and Exhibition this year and next.

Index will primarily target Arabian Gulf visitors and global exhibitors to drive footfall and business

opportunities at the events.

“We face a big task to create an environment that encourages both visitors and exhibitors,” said Abdul

Salam Al Madani, the chairman of Index. “A viable and vibrant conference space needs the cooperation

of tourism, transport, hospitality and commerce departments.

“Abu Dhabi now has the infrastructure that is needed to host and house international visitors. It is not

just about footfall, it is about attracting the right people to speak to the right exhibitors to foster

business.”

Index was established in Dubai in 1991 organising events nationally, regionally and internationally. It

targets 25 per cent growth annually but is not expecting those returns from Abu Dhabi immediately.

Abu Dhabi recorded double-digit growth at its main ex¬hi¬bition centres last year as the emirate hosted

more big conventions.

Adnec and Al Ain Convention Centre together hosted 369 events in 2015, an increase of 13 per cent on

the 327 events from the previous year. They drew 1.8 million visitors.


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LEBANESE TOURISM TO BE HIT BY UAE

TRAVEL BAN


The ban on UAE citizens to travelling to Lebanon will hurt the country’s tourism sector, experts say.

The travel ban comes on the heels of Saudi Arabia stopping US$4 billion in military aid to Lebanon last

week. The Saudi decision was backed by the UAE, Kuwait and Bahrain.

Security concerns and geo¬political tensions also plague Syria, Egypt and Turkey.

Travellers from the UAE and the Arabian Gulf are expected to prefer destinations in Europe and the Far

East over popular destinations in Egypt, Lebanon and Turkey this year, according to Euromonitor

International and travel agencies.

“Political tensions have and are expected to have in the forecast negative impact not only on the

economic ties but is also expected to be detrimental for the tourism flow from Gulf counties towards

Lebanon,” said Kinda Chebib, the lead analyst at Euro¬monitor International. “[Arabian] Gulf tourists in

general were vital to the industry and to the Lebanese economy. Those decisions are therefore expected

to have strong repercussion on the financial situation of Lebanon on the short to medium term.”

Security concerns could also result in a gradual repatriation of the Gulf workforce cur¬rently active in

Lebanon. “Gulf invest¬ments in major Lebanese sectors and in particular in key real estate projects are

likely to be halted or cancelled,” Ms Chebib said.

The Gulf government deposits at the Central Bank of Lebanon is around $860 million, she said.

Lebanon’s own security issues deterred Gulf tourists from spending holidays in the country last year.

The Lebanese tourism ministry was hoping to attract Gulf travellers back, with its Rise Above Lebanon

promotional video, which is a part of its “Live Love Lebanon” campaign. The country also promoted itself

in Dubai through advertising hoardings last month.

About 1.44 million tourists were expected to visit Lebanon this year, up marginally from 1.4 million last

year, according to Euromonitor International. Of these, 48,000 were expected from Saudi Arabia, up

from 45,700 a year earlier. From the UAE, the number of arrivals were expected at 7,900, up from

7,600 last year.

Travel agents also expect low outbound flow to Turkey and Egypt.

Because of the current poli¬tical climate, bookings to these destinations have dropped, according to

Musafir.com.

“Lebanon and Turkey have taken a huge hit in terms outbound numbers,” said Atish Thapa, the head of

leisure travel at Musafir.com. “Overall all three markets could see an increase in bookings from quarter

three onwards, but the quarter one and quarter two outlook on sales to these destinations is low.”

Leisure travel to Lebanon was expected to decline by 20 per cent this year compared to last year,

according to the Egyptian travel agency Travco.





“There was not that much demand from the Arabian Gulf markets to Lebanon,” said Akram Adel, the

director of travel for holidays and business and incentive travel at Travco in Dubai. Demand to Turkey

and Egypt is also expected to be down by 30 to 40 per cent compared to last year, he said.

Musafir’s Mr Thapa said the portal was experiencing a lot of nterest in offbeat European destination such

as Croatia, Bulgaria, Scandinavia and Hungary

“Apart from traditional destinations such as the Far East, Kenya, Maldives and South East Asia, cruise

options to these destinations are the most enquired,” he said.


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AZIZI SAYS DUBAI PROPERTY TO

RECOVER FAST AS IT LAUNCHES PALM

JUMEIRAH PROJECT

THURSDAY 25 FEBRUARY 2016

Afghan developer Azizi Developments has become the latest in a string of property companies to launch

new off plan luxury apartments in Dubai.

Marketing a block of 90 partly-built apartments on Palm Jumeirah with a press conference and

marketing shindig aboard a yacht sailing from Dubai Marina, Azizi attempted to lure potential investors

to shell out between Dh2.2 million and Dh4.5m despite a property slowdown.

Azizi, which owns two of Afghanistan’s four biggest banks and also runs a business importing oil and gas

into Afghanistan from Kazakhstan, said that the new block, between the Anantara and the Viceroy hotels

on the crescent of the Palm, was already 25 per cent complete and would be finished in March 2017.

Azizi said that it had financed the construction on the project so far with revenues from its oil and gas

importing business which it said had not been hit by the slump in oil prices because it did not produce or

refine.

“We are in a very healthy phase of the property cycle,” said Farhad Azizi, chief executive of Azizi

Developments. “The next few months will see market stabilisation and then the economy is going to

recover very fast by mid-2017. These are good times for buyers to invest in a good location and good

property to make a profit and capitalise on quick price appreciation.”

The new Dh350m Royal Bay Residence block is just the latest in a Dh4.5 billion development plan for

Azizi which is expected to complete eight blocks of apartments in Dubai’s Al Furjan in 2016 and also

plans to launch a second apartment building of another 180 apartments on the Palm later this year.

Azizi said it had purchased the Palm land in 2013 after master developer Nakheel rejigged a number of

plots.

And Azizi is not alone in launching new projects in Dubai. Last week, Damac Properties announced it was

planning to build its Dh7.4bn Aykon City – six new towers of hotels, apartments and offices overlooking

Dubai Canal and Safa Park.

Dubai Properties Group has also recently launched its 8.2 million square foot Serena development to be

built in Dubailand.

The falling price of oil and the strong US dollar to which the dirham is linked has hit the housing market

in Dubai, pushing average prices down by around 15 per cent in 2015. Many analysts are predicting falls

of another 10 per cent this year.

According to property broker CBRE around 6,000 nearly completed homes in Dubai are sitting empty as

developers wait for prices to stabilise.





On the Azizi yacht however, the potential investors invited on board by the developer seemed impressed

with what they saw.

“I would need to analyse the figures more carefully before I made a final decision but Azizi’s offering

seems very tempting,” said Sharam Gulzad, chief executive of Gulzad Group, which invests in property

around the world. “We have made money in the past by buying in the most prime areas during a

downturn. They usually tend to be the fastest to recover and so we hope this will be the case in Dubai

too.”


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TROPICAL ISLAND HOME JUST A SHORT

HOP FROM THE UAE – IN PICTURES

THURSDAY 25 FEBRUARY 2016

With its turquoise blue waters, white beaches and lush vegetation, homes in Eden Island, a 56-hectare

housing and marina development in the Seychelles, should be an easy sell.

“Welcome to your home in Paradise”, reads the slogan on the advertisements, displaying pictures of

happy families sailing in yachts.

More than 400 of the 569 apartments and villas have been completed and are already occupied by

homeowners or tenants. The first properties were handed over in 2007.

But, despite conforming to every picture postcard image of a tropical island retreat, global economic

turbulence is rocking attempts to market the final 69 homes at the residential and commercial marina

development, just 200 metres off the coast from the capital island of Mahe.

“The South African market originally accounted for 50 per cent of our sales. But the reality is that the

strength of the dollar has affected the South African market. When we were selling in 2008, the rand to

the dollar was about six, it’s now 16,” says Peter Smith, Eden Island’s director, who is a South African.

“And when we started selling in Europe, the dollar to the euro was around 1.30 or 1.40, now it’s almost

on a parity.”

With the UAE dirham pegged to the US dollar and, therefore, unaffected by currency fluctuations, Eden

Island’s developers, like others around the world, are hoping to make up the shortfall in sales with some

heavy marketing in Dubai and Abu Dhabi.

Mr Smith also says that the decision to target the UAE comes at a time when interest in the Seychelles

is increasing.

Certainly, over the past few years, the UAE Government has ploughed billions of dirhams into Africa’s

smallest country, which includes Etihad Airways taking a 40 per cent equity stake in Air Seychelles,

Sheikh Khalifa, the President of the UAE, building a large palace in Mahe and Abu Dhabi’s Urban

Planning Council making its first international collaboration to produce a Seychelles 2040 plan.

Mr Smith says UAE investors account for 7 per cent of the total number of units sold at the development

and 13 per cent by value.

Nonetheless these things do not come cheap. A one-bedroom apartment will set you back about

US$500,000 while a six-bedroom villa is on the market for $5.3m.

But that money goes quite a long way on the private estate, with perks for each buyer including 24-hour

security, a golf buggy to get around (there are no cars on the island), a boat mooring and Seychelles

residency for yourself and family.

Q&A

How many people from the UAE visit the Seychelles?





The UAE is the fourth largest inbound tourism market with 13,845 visitor arrivals in 2014 and 21,178 in

2015, which is a 53 per cent increase year on year. Property owners include Sheikh Khalifa, the

President of the UAE, who in 2010 built a vast new palace on a former US Air Force base. Etihad signed

a tie up in 2012 with the national carrier, Air Seychelles, increasing the number of flights and visitors

from the capital.

What do the locals think?

Opinions about international investment are mixed. While some are happy with the increased

opportunities and jobs, others blame expatriates for pushing house prices up.

What sort of property rights do they have?

Property is sold freehold and, as an owner you, your spouse and minor children are also invited to apply

for residency of, which is available for five years and renewable every five years.

How much of a return can I make?

According to Eden Island, since completion of the first home seven years ago, people have made up to 8

per cent a year growth. The developer also offers two-year rental guarantees on selected properties.

What about tax?

The purchase of a new home is free of any transfer taxes and sanction. However, tax is charged on

rental income.


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DH350M ROYAL BAY RESIDENCE WILL

BE COMPLETED BY MARCH 2017

FRIDAY 26 FEBRUARY 2016

Royal Bay Residence has been designed with 45-degree orientation to allow all the living rooms, kitchen

and bedrooms to get sea views (Supplied)

UAE-based Azizi Developments has launched Royal Bay Residence, a collection of 90 fully-serviced

residential apartments, crescent of Palm Jumeirah, stating the property market in Dubai was “healthy.”

Construction of the Dh350-million upscale project has already commenced and is expected to be

completed by March 2017.

The new project, part of company’s Dh4.5 billion development plans to build thousands of apartments in

Al Furjan project and Palm Jumeirah.

The project has been designed with 45-degree orientation to allow all the living rooms, kitchen and

bedrooms to get sea views. Sizes range between 802 square feet to 1,638 square feet for the

apartments, while prices start from Dh2.2 million to Dh4.5 million.

On offer for investors is a 20:80 payment plan, whereby buyers pay 80 per cent only upon handover.

"We have a different strategy. We prefer to start construction of our projects before the launch and sales

process takes place. The construction of our boutique offering of Royal Bay Residence has already

commenced,” said company CEO Farhad Azizi.

He added: “We are in a very healthy phase of the property cycle, the next few months of market

stabilisation and then economy is going to recover very fast by mid-2017 and these are good times for

buyers to invest in a good location and good property to make a profit and capitalise on quick price

appreciation.”

The company expect the project to offer returns on investment of up to 10 per cent.

In September 2015, an Azizi official had told Emirates 24/7 that they are building 17 projects (eight

residential and nine hotel/serviced apartments) in Al Furjan, a master development close to the Expo

2020 venue.

On the hospitality front, the company plans to have over 1,000 rooms under management by 2020

including a major project worth Dh1.1-billion five-star hotel in Dubai Healthcare City phase 2 that will

have 400 keys and eight restaurants.

Source: Emirates 24/7

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DH1.23 TRILLION PROJECTS PLANNED

IN DUBAI, RESIDENTIAL AT DH244

BILLION

FRIDAY 26 FEBRUARY 2016

Projects under planning in Dubai are valued at $337.2 billion (Dh1.23 trillion), with the total value of

projects under construction at $53.6 billion, reveals a new report.

The Deloitte and Meed Project’s report, “The Dubai Construction Pulse”, which analyses the construction

market across a range of sectors, found the majority of the current or planned development are within

the residential sector, estimated at $66.4 billion (Dh243.68 billion). This includes projects either in the

execution or the planning stages.

Residential sales prices fell towards the end of the year in 2015 by nearly 10 per cent with prices likely

to continue to soften this year as well.

Though real estate experts have predicted a slowdown in property deals, Dubai Land Department

Director-General Sultan Butti Bin Mejren told ‘Emirates 24|7’ this week that the emirate had registered

total real estate deals worth Dh68 billion in just 53 days of this year, referring to stability in the market.

Total development activity within the hospitality and leisure sector is estimated at $21.2 billion made up

of projects in the execution and the planning stages.

Dubai is aiming to attract 20 million visitors per year by 2020, according to the Department of Tourism

and Commerce Marketing. Growth in international overnight visitors since 2010 averaged 9.2 per cent

per year, and if this rate of growth continues, the 20 million target will most likely be met.

The report predicts that growth may be modest in 2016, with occupancy levels down to at 70-75 per

cent during the year.

In the retail sector, the total development is estimated at $15.33 billion. Growth will be flat this year,

however, the emirate’s status as a leading retail destination globally will remain.

The total activity within the commercial sector is expected at $9.1 billion with a number of additional

projects to be announced in prime locations which includes the Dubai International Financial Centre.

The report states that these are “significant amounts of investment for most mature economies, but for

an emerging market such as Dubai, they are extraordinary figures which provide evidence of Dubai’s

increasingly diversified economy.”

“Despite regional security concerns and wider macro-economic turbulence, Dubai continues at pace with

significant project awards in the first quarter 2016, including the Palm Gateway Towers, Phase II of the

Atlantis Resort and Dubai Creek Harbour to name but three”, said Ben Hughes, director at Deloitte

Corporate Finance Limited.





Major projects announced in the first months of 2016 include $840-million phase II of Atlantis Hotel on

Palm Jumeirah, $380-million Palm Gateway Towers, $370-million ICD Brookfield Place and $190-million

Mandarin Oriental Hotel.


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NO ARBITRARY RENT HIKE ALLOWED:

FOLLOW DUBAI RENT INDEX,

LANDLORDS TOLD

28 SUNDAY FEBRUARY 2016

Tenants in Dubai, who are facing arbitrary rent hikes by landlords, can move the rental disputes

settlement centre for justice.

“There is a rent law in place and all have to follow it. All the rents have to be increased as per the rent

index,” Dubai Land Department Director-General, Sultan Butti Bin Mejren told Emirates 24|7 on the

sidelines of the recently-concluded ‘Cinder Dubai 2016’.

He added: “If somebody is cheating in the market you can go to the rental dispute committee.

“We now have a fast-track system in place and decisions are taken in just 30 days.”

The government announced the setting up of the Rental Disputes Settlement Centre in September 2013,

aimed to enhance legal procedures that facilitate the settlement of rental disputes which, in turn, reflect

positively on socio-economic stability among members of the community.

The official rent index is now being updated once a year, effective January 2016.

Asked why the change was introduced, Bin Mejren said: “We thought it would be best for the market.

One rents an apartment for a year and hence, the rent will not change every month or quarter, but only

after a year.”

He added they were working on launching an improved version of the rental index, but no specific time

was given.

Tenants should keep in mind the following points to possibly thwart their landlord’s effort of any

arbitrary rent hike.

# Ejari is mandatory

All tenancy contracts in Dubai have to be registered with Ejari.

It costs Dh195, but the question is who pays?

Real Estate Regulatory Agency (Rera) does not specify the party paying the fee, but generally in a strata

tower the onus is on the tenant.

Where a property management firm manages a tower they have to pay the fee.

These companies, however, do recover the cost from the tenants.

Documents required for registration includes tenancy contract, recent Dewa bill, title deed copy or

affection plan, tenant’s passport, visa and Emirates ID copy.

# 90-day notice is must





A landlord has to give a 90-day notice if s/he wants to increase the rent and that too as per the Rera

rent index.

No notice being served means a landlord cannot raise the rent at all.

If there is no communication between the two parties, the contract is automatically renewed at the

same rental price.

Generally, agents, on behalf of the landlord, tend to give only a 30-day notice period to force tenants to

accept the hike as moving out becomes difficult.

# Follow rent index

It is mandatory for the landlords to follow the rent index, but as mentioned the 90-day notice is

mandatory.

In case the notice has been served, either electronically or in writing, the landlord can increase the rent

as indicated by the index.

What the Rent Law says?

In order to control arbitrary rental hikes, the Dubai government has already issued Decree No. 43 of

2013 concerning the percentages of maximum property rent increase that are to be allowed upon

renewal of tenancy contracts.

The rent increase slabs are as follows:

# No rent increase if the rent of the property unit is less than 10 per cent of the average rent of a

similar property in the same residential area.

# If the rent value is between 11 and 20 per cent less than the average rent of a similar property, the

maximum rent increase shall be equal to 5 per cent of the rent value.

# If the rental value of a unit is between 21 and 30 per cent less than the average rent of a similar unit,

the maximum rent increase shall be equal to 10 per cent of the rental value.

# If the rental value of a property is between 31 and 40 per cent less than the average rental of a

similar property, the maximum rent increase shall be equal to 15 per cent of the rental value.

# If the rental value of a property unit is less than 40 per cent or more of the average rent of a similar

unit, the maximum rent increase applicable is of 20 per cent.

The decree also informs that the average similar rental value of the property will be determined by the

rent index.


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‘SERENA’ IN DUBAILAND:

‘AFFORDABLE’ DUBAI PROPERTY GETS

8.2M SQFT PUSH

28 SUNDAY FEBRUARY 2016

Dubai Properties Group (DPG), the real estate arm of Dubai Holding, on Sunday launched ‘Serena’ in Dubailand, targeting the 'affordable' townhouse segment.

Spanning an area of 8.2 million square feet, the residential community will be developed in five phases, with the first phase expected to be completed by the fourth quarter of 2018.

With each cluster of four to six units, phase one will house two- to three-bedroom townhouses and three-bedroom semi-detached villas.

It will have three community centres including recreational facilities, swimming pools, gym, retail options, play areas and a clinic.

“We are helping lead the resurgence of Dubai’s real estate market through the smart and strategic development of iconic mixed-use destinations, as we anticipate and deliver on the rapidly changing and diversifying Dubai.

“Serena stems from our long standing experience in the market, and our understanding of the growing demand for affordable housing in the emirate,” company Group CEO Abdullatif Al Mulla said in a statement.

He added: “We believe that everybody should have access to good quality affordable housing that meets their needs.”

No details were shared on the total number of units and prices.

Some developers have targeted the 'affordable' townhouse category, which include Royal Estates in Dubai Investment Park and Town Square development close to Arabian Ranches and

Expo 2020 site.

What’s affordable?

In September 2015, Erik Volkers, Senior Consultant, Research, CBRE Middle East, told Emirates 24|7 that mid-income UAE residents earning Dh15,000 to Dh25,000 a month found it quite a challenge to buy property in the emirate.

A UAE household earning Dh15,000 a month, he said, could afford a ready-to-buy property of Dh800,000 maximum, but would need to deposit Dh200,000 (25 per cent) as per UAE mortgage regulations.





A UAE household earning Dh25,000 per month could afford a ready-to-buy property of Dh1.35 million maximum, but would need to deposit Dh335,000 (25 per cent) as per the UAE

mortgage regulations.

JLL, a real estate consultancy, found that households in the country should allocate up to 30 per cent of their gross income on housing and so a family earning Dh20,000 a month could

afford to pay around Dh6,000 a month on either renting, or buying their unit.

“For developers to attract this sector of the market, they need to ensure that monthly payments are fixed at this level,” Craig Plumb, Head of research for Mena region, JLL, told this

website.


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ABU DHABI COMPANY TO BUILD 6-

TOWER LONDON PROJECT

27 SATURDAY FEBRUARY 2016

New Scotland Yard, the Metropolitan Police headquarters, is set to be demolished after the planning permission was granted for a new residential, office and retail scheme by Abu Dhabi

Financial Group (ADFG), according to media reports.

Westminster City Council approved plans for redevelopment of the building on Wednesday night once the police department moves to a smaller building, The Telegraph said.

Developer Northacre, in which ADFG holds a stake, will rename the site “Ten Broadway” with the six-building development, comprising 268 apartments, expected to be completed in 2021.

“Ten Broadway will be a landmark mixed-use scheme of one million square feet, nestled between the historic attractions of Parliament and Buckingham Palace," said Northacre’s chief

executive Niccolo Barattieri di san Pietro.

The striking towers of between 14 and 20 storeys will be visible from Buckingham Palace, the London Eye and the Houses of Parliament, the Evening Standard said. Prices range from

£3million to £30 million, it added.

The Abu Dhabi-based company purchased the building for £370 million in December 2014, appointing Northacre as development manager in June 2015.

New Scotland Yard has been the Met’s home since 1967, but the decision to sell was taken in order to pump extra cash into frontline policing to offset government cuts. However, the

famous rotating sign will move to the new building.


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LOW PRICE, HIGH RENT YIELD: BEST

TIME TO BUY DUBAI PROPERTY?

23 TUESDAY FEBRUARY 2016

The time may be best to buy property in Dubai as prices are falling, but rental yields remain high, according to a new report by Chestertons Mena.

"Property prices have corrected significantly over the last year with attractive bargains in some locations.

“With high rentals, this is an apt time to lock a property that will bring good yields,” said company Managing Director Declan McNaughton.

“There is a general consensus in the industry that the market will remain subdued during 2016. However, this phase could provide good investment opportunities for the long-term.

“Also, this phase will not last long as we move closer to Expo 2020. This is an ideal market for both end users and long-term property investors,” he added.

Dubai is expected to see an addition of over 3,000 housing units this year, with the imbalance in the supply and demand situation continuing to build pressure on property prices.

“We expect sale prices to correct further during the year,” said company Country Manager Robin Teh, stating the total number of transactions in fourth quarter 2015 dropped by 44 per

cent to Dh24.3 billion compared to Dh33.1 Billion in the third quarter 2015.

The consultancy said an estimated 15,000 units were delivered in 2015 with a similar number being delivered over the next three years, following which “supply may reduce significantly”.

“Master developers could alter the construction and delivery cycle accordingly and this could keep the supply figures under control,” Teh added.

The property consultancy said rentals in majority of the prime residential communities remained stable in the fourth quarter 2015 though locations such as Jumeirah Park, Islands

and Jumeirah Golf Estates reported rental decline of 3 per cent, 2 per cent and 2 per cent, respectively.

Overall, the villa segment fell one per cent in the fourth quarter compared to the previous quarter.


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With 30 years of Middle East experience, Asteco’s Valuation & Advisory Services

Team brings together a group of the Gulf’s leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai, Northern Emirates, Qatar, Jordan and the

Kingdom of Saudi Arabia not only provides a deep understanding of the local markets but also enables us to undertake large instructions where we can quickly apply resources to meet clients requirements.

Our breadth of experience across all the main

property sectors is underpinned by our sales, leasing and investment teams transacting in the market and a wealth of research that supports our decision making.

John Allen BSc MRICS

Director, Valuation & Advisory

+971 4 403 7777

[email protected]

Julia Knibbs MSc

Manager – Research and Consultancy - UAE

+971 4 403 7789

[email protected]

VALUATION & ADVISORY

Our professional advisory services are conducted

by suitably qualified personnel all of whom have

had extensive real estate experience within the

Middle East and internationally.

Our valuations are carried out in accordance with

the Royal Institution of Chartered Surveyors

(RICS) and International Valuation Standards

(IVS) and are undertaken by appropriately

qualified valuers with extensive local experience.

The Professional Services Asteco conducts

throughout the region include:

• Consultancy and Advisory Services

• Market Research

• Valuation Services

SALES

Asteco has established a large regional property

sales division with representatives based in UAE,

Saudi Arabia, Qatar and Jordan.

Our sales teams have extensive experience in the

negotiation and sale of a variety of assets.

LEASING

Asteco has been instrumental in the leasing of

many high-profile developments across the GCC.

ASSET MANAGEMENT

Asteco provides comprehensive asset

management services to all property owners,

whether a single unit (IPM) or a regional mixed

use portfolio. Our focus is on maximising value

for our Clients.

OWNER ASSOCIATION

Asteco has the experience, systems, procedures

and manuals in place to provide streamlined

comprehensive Association Management and

Consultancy Services to residential, commercial

and mixed use communities throughout the GCC

Region.

SALES MANAGEMENT

Our Sales Management services are

comprehensive and encompass everything

required for the successful completion and

handover of units to individual unit owners.

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