NEWS BRIEF 15 - Asteco

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© Asteco Property Management, 2017 asteco.com | asteco.com/report_library IN THE MIDDLE EAST FOR OVER 30 YEARS
ASSET MANAGEMENT SALES LEASING
RESEARCH DEPARTMENT
© Asteco Property Management, 2017 asteco.com | asteco.com/report_library
IN THE MIDDLE EAST FOR 30 YEARS
Page 2
REAL ESTATE NEWS UAE/ GCC
DELAYED GCC PAYMENTS DISCOURAGE CONSULTANCY FIRMS
HILL INTERNATIONAL CHIEF EXPECTS FURTHER SHRINKAGE IN MIDDLE EAST
OPERATIONS IN 2017
MANY OPTIONS FOR REMORTGAGING A PROPERTY IN UAE
DRAKE & SCULL LOOKS TO FINALISE DH600M CAPITAL RAISE THIS MONTH, SAYS CHIEF
EXECUTIVE
MANAGING RESERVE FUNDS IN JOINTLY OWNED PROPERTIES
BARRIERS TO HOME OWNERSHIP IN THE UAE
LOOKING UP: 1 IN 5 SUPER-TALL COMPLETED BUILDINGS FOUND IN DUBAI
AVIATION AND TOURISM INDUSTRY SET TO BE A DRIVING FORCE FOR THE MIDDLE
EAST ECONOMY
MONEY SPENT IN DUBAI BY OVERSEAS PROPERTY INVESTORS DECLINES 40%
LONG SUMMER FOR DUBAI PROPERTY BEFORE ANY PICKUP
CRACKED, SINKING AND ABANDONED, DUBAI VILLAS TO BE LEVELLED FOR NEW
HOUSING
BURJ KHALIFA APARTMENTS LOSE A QUARTER OF THEIR VALUE IN 12 MONTHS
DUBAI TO EFFECT MAXIMUM TRANSPARENCY IN PROPERTY MARKET
NEW FIVE-STAR HOTEL TO OPEN IN BUR DUBAI
MONTHLY CHEQUES AND SOFTENING RENTS AID DUBAI RESIDENTS
NAKHEEL AWARDS DH136M CONTRACT FOR DRAGON CITY HOTEL
DUBAI’S DEVELOPERS CONTINUE WITH GO-SLOW APPROACH
BUSINESSES CHASE VALUE IN DUBAI’S OFFICE PROPERTIES
SALEH ABDULLAH LOOTAH: BE UNIQUE TO SURVIVE
UNDERSTANDING THE SHIFT IN REAL ESTATE DEMAND

© Asteco Property Management, 2017 asteco.com | asteco.com/report_library
IN THE MIDDLE EAST FOR OVER 30
YEARS
REAL ESTATE NEWS
CLOCK TICKS TO FIND BUYER FOR DUBAI’S COSTLIEST PENTHOUSE AT DH200M
DUBAI REAL ESTATE TRANSACTIONS JUMP 45% TO DH77B IN FIRST QUARTER OF 2017
DUBAI LAND LAUNCHES "KNOW YOUR RIGHTS AS A REAL ESTATE INVESTOR IN DUBAI"
DUBAI LANDLORDS ARE LOWERING RENTS, EXTENDING LEASES TO KEEP TENANTS
DUBAI MOVES TOWARDS NEW RENTAL LAW
DUBAI REAL ESTATE MARKET ON COURSE TO STABILISE DURING 2017
ABU DHABI
WHY YOUR RENT’S TOO HIGH, AND WHAT TO DO ABOUT IT
ABU DHABI DEVELOPER BLOOM PROPERTIES STARTS LEASING APARTMENTS AT AL
BATEEN PROJECT
NORTHERN EMIRATES
INTERNATIONAL
JUMEIRAH LOOKS TO INDIA FOR HOTEL EXPANSION
GLOBAL HOUSING RENT COMPARISON: WHAT $40,000 A YEAR GETS YOU IN TOP
CITIES AROUND THE WORLD
© Asteco Property Management, 2017 asteco.com | asteco.com/report_library
IN THE MIDDLE EAST FOR OVER 30
YEARS
EXPANSION Thursday, April 6, 2017
Dubai’s Jumeirah Group, which operates luxury properties including the Burj Al Arab, is in talks to open hotels in
various locations in India, its next key market for expansion.
"We are in discussions with a number of owners and developers about opportunities right across India, including
Mumbai, Goa, Bengaluru and New Delhi," said Linda Lewis, Jumeirah Group’s vice president of global sales for the
Middle East and Asia Pacific.
"India is an important market for Jumeirah and one we’re increasingly focusing on now that our Asia Pacific
pipeline is firmly established. Jumeirah has ambitions to grow its portfolio and establishing a presence in India
seems a natural next-step for expansion."
Jumeirah already has one property under development in Mumbai, but progress on that has been slower than
expected.
It signed an agreement in November 2012 to operate the planned 470-room hotel. At the time of the
announcement, it said that the property was slated to open this year.
Jumeirah said that the property was "still in development" but it did not have an opening date.
The company at that point also said it was looking for other opportunities to open hotels in India.
Global hotel operators are ­eager to expand in India because of the country’s growing wealth and burgeoning
travel market amid a population of more than 1.2 billion. India has relatively few luxury branded hotel rooms per
capita.
A lot of the leading hotel chains have been expanding at "a fairly rapid pace" in India, said Abhijeet Umathe, the
associate director of hospitality and leisure advisory at Knight Frank India.
There had been "a bit of a pipeline shortfall in the last two to three years because of economic constraints",
however.
Jumeirah had perhaps been held back in terms of advancing its development plans in India by their "positioning"
at the luxury end of the market, he said.
"In the cities in India where Jumeirah wants to be present, the real estate costs are extremely high, so if you have
to build over a very large average build size per room, the return is not there for the owner."
Most of the expansion in India’s hotel market is taking place at the mid to upscale segments of the market, but
not at the very top end of luxury, Mr Umathe added.
Jumeirah, which operates ­hotels in locations including London, Istanbul, Frankfurt, and the Maldives, as well as
several properties in the UAE, regards India as a important feeder market.
On Sunday, it announced that it had opened a representative sales offices in India to target the luxury travel
market for its existing hotels.

© Asteco Property Management, 2017 asteco.com | asteco.com/report_library
IN THE MIDDLE EAST FOR OVER 30
YEARS
Source: The National
Back to Index
© Asteco Property Management, 2017 asteco.com | asteco.com/report_library
IN THE MIDDLE EAST FOR OVER 30
YEARS
DELAYED GCC PAYMENTS DISCOURAGE
CONSULTANCY FIRMS Thursday, April 6, 2017
Growth in the consultancy market in the GCC is slowing dramatically as multinational firms have been deterred by
late payment issues.
A study by Source Global Research (Source) found that the consultancy market grew 6 per cent in 2016, which is a
decline from the 15 per cent growth recorded in 2014.
The study said that the market had grown in size to US$2.8 billion. That compared with $2.5bn in 2014. About
$900 million of this was spent by public sector clients, but the slowdown in work for governments was even more
pronounced, with growth dropping to 5.6 per cent last year, compared with 19.4 per cent in 2014.
It said that the recent slump in oil prices had affected public sector budgets.
Edward Haigh, a director of Source Global Research, said: "Six per cent growth meant that 2016 was the year in
which the GCC – the consulting world’s star performer for so many years – stopped standing out."
Complaints from consultancy firms about late payments is also on the rise the study said, with firms reporting
that conditions in Saudi Arabia and Qatar have become "markedly worse" over the past 12 months.
Demand for consultancy services in the UAE grew by 6.6 per cent, reaching $815m last year. However, there was a
significant difference noted between Abu Dhabi and Dubai. The former market was characterised by cautious
clients and slow decision-making, according to Source, whereas the latter was described as a regional bright spot.
Saudi Arabia remained the region’s biggest market, spending $1.31bn on consultants last year, while Qatar spent
$342m.
The financial services sector was the most active market for consultants across the GCC.
The report noted that the introduction of value-added tax (VAT) next year could drive demand for consultants in
the UAE.
The report also argued that the cancellation or postponement of many projects was also creating challenges for
companies that are trying to plan their own resources.
"You can’t help wondering if there’s a year of extraordinary growth dangling somewhere out there in the future of
the GCC consulting market," Mr Haigh added.
"Combine Saudi Arabia’s National Transformation Programme with a recovering oil price, pressure building in
Qatar as 2022 nears, and the Dubai World Expo in 2020, and you start to create a perfect storm of demand for
consulting services. Unfortunately for consultants, that year will not be 2017."
Chuck Harrington, the chief executive of Parsons – a US-based engineering consultancy, which earned about 20
per cent of its global revenue of US$3.2bn in 2015 (the most recent year for which figures are available) from the

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IN THE MIDDLE EAST FOR OVER 30
YEARS
VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION
"The overall issue of delayed payments in the GCC region has gotten more severe in the past few years; we are
seeing our receivables – that is, approved invoices – go significantly beyond the contractual terms and conditions
that we’ve signed up for," said Mr Harrington. "Depending on the project, late payments can reach two to three
times of the contractually mandated terms."
Mr Harrington added that there were " some hopeful signs in Saudi Arabia, such as the government bond
issuance last year, which eased the liquidity crunch in the kingdom".
Source: The National
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© Asteco Property Management, 2017 asteco.com | asteco.com/report_library
IN THE MIDDLE EAST FOR OVER 30
YEARS
WHY YOUR RENT’S TOO HIGH, AND WHAT
TO DO ABOUT IT Thursday, April 6, 2017
As the rental housing market continues to dip tenants are in a strong position to call the shots but they have to
know what the current rates are for their home area.
The hot gossip over the garden wall in the capital these days seems to be how much rent the neighbours are
paying.
Rents fell in almost every neighbourhood of Abu Dhabi last year, by as much as 25 per cent for a high-end, one-
bedroom flat on the Corniche. The market shows no sign of picking up. Property company Core Savills said that
this year’s drop in values would be close to 2016 levels, with prime and mid-prime villa values anticipated to fall by
at least 15 per cent, and apartment prices by seven per cent.
Increasingly, tenants are finding the neighbours who just moved in next door are paying substantially less rent
than they are. With the new Tawtheeq bill adding strain to their finances, when the time comes to renew the
lease, tenants are prepared to push hard for a drop in rent.
But how to go about this process with delicate diplomacy?
Scottish resident David Crook has seen this question appear several times lately on the Facebook group that he
runs, Tenants in Abu Dhabi (TOADS).
As a senior property manager with Abu Dhabi National Properties, he is an expert in this field, as one of his jobs is
to negotiate between landlords and tenants.
"We see so many rent reduction requests coming in on a daily basis," he says. "My advice to tenants is not to be
too greedy, but also be aware that there are very few occasions now where landlords are justified in proposing to
increase rents. Landlords will try, understandably, to get away with holding ground as much as they can, but there
is a tipping point."
Just before the two-month notice period is up, Mr Crook advises tenants to scour property websites such as
propertyfinder.ae, or property managers’ lists of available units in their area, to arm themselves with evidence of
current market rates.
"Its essential to do your homework," he says. "Tenants can then say to their landlord ‘Here is some proof of what’s
happening in the market, so I’m looking for a reduction’. We advise landlords that it’s always better to retain a
tenant at a slightly reduced rent than to have an empty property.
If your lease is with a property management company, then they will be the ones to negotiate with, says Mr
Crook. "You’d have to write to that company and explain ‘I’m happy to renew, but I’m looking for X, Y, Z’. The
company will then either take that decision themselves, or go back to the landlord to seek their approval."
Australian resident Judith Summers had to do some hard bartering through a property management company to
achieve an 8 per cent drop in rent for the three-bedroom flat she shares with her husband in Al Muneera. The
couple, whose rent had increased year-on-year since they moved in 2012, went to the negotiating table with an
annual rent of Dh195,000.
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IN THE MIDDLE EAST FOR OVER 30
YEARS
VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION
"At first, they announced the rent would be increased to Dh200,000," says Ms Summers. "We offered Dh175,000,
and in the end, we agreed on Dh185,000. I love living in Al Muneera and our lives are centred in this part of Abu
Dhabi, so we really didn’t want to have to move. But we would have done so if they hadn’t agreed to a decrease –
my husband was adamant about that."
Moving to a new property costs "at least Dh10,000", says Mr Crook, and there’s the burden of time and stress, too.
Source: The National
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IN THE MIDDLE EAST FOR OVER 30
YEARS
GLOBAL HOUSING RENT COMPARISON:
WHAT $40,000 A YEAR GETS YOU IN TOP
CITIES AROUND THE WORLD Wednesday, April 5, 2017
The National had a look at what US$40,000 (Dh146,916) a year would get you in terms of renting an flat in major
cities.
Zurich in Switzerland came out as the city in which you could end up in the smallest flat – with a 807-square-foot
historic flat close to the Zurcher Bahnhofstrasse taking up your annual budget.
In London, your money could get you a 850 sq ft flat in a secondary prime area such as Bayswater, Earls Court,
Hampstead Heath, Notting Hill, Marylebone, Regent’s Park, Pimlico, South Kensington or St John’s Wood.
In the United States, a budget of $3,333 a month would get you a one-bedroom flat in Manhattan or prime areas
in San Francisco.
In Paris, you could rent a 1,000 sq ft flat on the Rue Du Pont Aux Choux in the city’s Third Arrondissement.
In Dubai, Abu Dhabi and Doha, Dh146,916 could get you a two-bedroom flat.
In Abu Dhabi, you could get a two-bedroom flat of up to 1,400 sq ft in the Raha Beach neighbourhood or a two or
three bedroom flat on Reem Island – although it would also pay for a much larger flat or villa in cheaper locations
such as Khalifa City A.
At the other end of the scale, Cape Town was where $40,000 a year would get you the most for your money,
renting a 3,000 sq ft house in areas such as Bakoven, Bantry Bay, Camps Bay, Clifton, Fresnaye, Green Point,
Mouille Point, Hout Bay, Waterfront, and City Bowl.
So, why is it that, despite their small population sizes, GCC cities are relatively expensive to rent?
Analysts pointed to the fact that cities in the region typically have a large number of expatriates who are often in
receipt of generous housing allowances, which pushes up the prices of the most desirable properties.
"In terms of the rental costs, my view would be that as a proportion of population, the expat and corporate
relocation market would be larger in Dubai, Abu Dhabi and Doha than in cities such as New York and London,"
said Kate Everett Allen, a partner in international residential research at Knight Frank.
However, analysts also said that this sort of snapshot of properties available in various world cities was not a
definitive study, and property rents within each city vary greatly depending on location and condition of each
property as well as the amenities available.
Secondly, the type of housing stock also makes a difference to the size of flats available within each price band.
This means our budget may well rent a much smaller flat in Zurich than other major world cities because the city’s
housing stock is typically older and smaller.

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IN THE MIDDLE EAST FOR OVER 30
YEARS
VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION
Currency fluctuations may also play a part, with the value of sterling down nearly 20 per cent against the US dollar
since the Brexit vote and the Swiss franc holding strong against most other currencies.
Arlene Jimenea, a senior research analyst at CBRE Middle East, said there was a variety of properties on offer
within the same price bands.
"For roughly Dh147,000, tenants could get a two-bedroom flat in central locations in Abu Dhabi, including newly
completed developments in investment zones [eg: Reem Island and Al Raha Beach]," she said.
However, residents willing to go out to locations such as Khalifa City or Mohammed Bin Zayed City, could get a
three-bedroom flat for the same amount.
"In Doha, residents willing to pay $40,000 a year could likely get a two-bedroom flat in prime locations such as the
Pearl Qatar, West Bay and Diplomatic Areas," she said.
"But for the same price, housing options expand to include relatively larger units in communities on the periphery
of the city."
Source: The National
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IN THE MIDDLE EAST FOR OVER 30
YEARS
PROPERTY INVESTORS DECLINES 40%
Wednesday, April 5, 2017
The amount of money spent by overseas investors in Dubai last year plummeted by more than 40 per cent
compared with a year earlier as currency fluctuations hit Indian and British investors, prompting developers to
slow housing completions.
According to property broker Core Savills, the total amount of money invested in property by investors from
outside the Arab region fell to Dh44 billion last year from Dh74.6bn in 2015. It found that the total number of non-
Arab, non-GCC investors into Dubai fell 35 per cent to 22,834 in 2016 from 35,162 in 2015.
Core Savills analysed Dubai Land Department data to show that the total amount of money spent by Indian
investors on Dubai property fell 42 per cent last year to just Dh12bn from Dh20.8bn in 2015. The broker said that
the total number of Indian investors buying property in Dubai fell 28 per cent to 6,263 in 2016 from 8,756 in 2015.
At the same time the total amount of money spent by British purchasers on Dubai property fell 46.7 per cent to
Dh5.8bn in 2016 from Dh10.9bn in 2015. The total number of British home purchasers in Dubai fell 31 per cent to
3,372 in 2016 from 4,889 in 2015.
And the total amount of money spent by Saudi Arabian investors on Dubai property last year fell 15.7 per cent to
Dh8bn from Dh9.5bn, even though the number of investors stayed roughly static.
"Looking at real estate investment in Dubai in 2016, we witnessed a year-on-year contraction in the total number
of investors — notably amplified by non-regional buyers," said David Godchaux, the chief executive of Core
Savills.
"A strong dollar continues to affect the traditional buyer nationalities such as Indians, British and Pakistanis as
their currencies have devalued significantly over the last year. We also saw receding regional demand from GCC
investors."
Overall Core Savills estimated that total residential sales in Dubai last year fell 32.9 per cent to Dh91bn in 2016
from Dh135.7bn in 2015, while the total number of investors fell 24.9 per cent to 42,018 in 2016 from 55,955 in
2015.
The broker said that weak demand in the market was prompting property developers to slow down construction
and complete fewer homes than they had predicted.
Core Savills estimated that developers handed over just 3,100 completed homes in the first three months of 2017.
The broker said it anticipated that only another 15,000 units would be brought to market throughout the rest of
the year – roughly half the anticipated amount.
Property consultancy Cavendish Maxwell has said that 2,500 new homes were completed during the first quarter

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IN THE MIDDLE EAST FOR OVER 30
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VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION
said that developers are likely to delay many of these handovers to prevent too much stock coming on to the
market.
"While some projects are delayed as a result…