NEWS BRIEF 17 - Asteco Property Managementreal estate news uae/ gcc premium property can lift uae...

DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN

© Asteco Property Management, 2017 asteco.com | asteco.com/report_library IN THE MIDDLE EAST FOR OVER 30 YEARS

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 17 MONDAY, 24 APRIL 2017


© Asteco Property Management, 2017 asteco.com | asteco.com/report_library

IN THE MIDDLE EAST FOR 30 YEARS



REAL ESTATE NEWS UAE/ GCC

PREMIUM PROPERTY CAN LIFT UAE AND SAUDI ECONOMIES, EXECUTIVES SAY

REITS OFFER EFFICIENT WAY TO OWN UAE PROPERTIES WITHOUT THE HASSLE

MANAZEL MAKES FURTHER CUTS TO PLANNED JORDAN DEVELOPMENT

IMF SHARPLY CUTS MIDEAST OIL EXPORTERS’ ECONOMIC GROWTH FORECASTS

MARKET ANALYSIS: IN TIME, NEW BANKRUPTCY LAW WILL BENEFIT UAE CAPITAL

MARKETS

ISLAMIC HOME FINANCE GOES MAINSTREAM

ATKINS BOARD AGREES TO £2.1BN TAKEOVER APPROACH FROM CANADA’S SNC

LAVALIN

GOVERNMENTS OF GULF COUNTRIES INCREASINGLY FOCUSING ON

DEVELOPMENT OF TOURISM SECTOR

CHINESE INVESTORS LAUNCH OMAN INDUSTRIAL PROJECT

DUBAI

MORE VISITORS AT DUBAI WORLD TRADE CENTRE

EMAAR PROPERTIES DECLARES 15% CASH DIVIDEND OF DH1.074BN FOR

SHAREHOLDERS

IS YOUR SALARY ENOUGH TO AFFORD DUBAI RENTS?

SOUTHERN AFRICAN FUND PICKS EXPOSURE IN DUBAI REALTY

DUBAI PROPERTY Q1 GAINS LED BY HIGHER VALUE DEALS

AHEAD OF ATM, FOCUS IS ON THREE-STARS AND EXPERIENCES

WHAT IS THE INTERIM PROPERTY REGISTER?

IS THE MOST EXPENSIVE PROPERTY THE MOST UNDERPERFORMING?

FROM THE SEA TO THE DESERT: NEW COMMUNITIES IN DUBAI

SUSTAINABLE CITY RATED DUBAI’S ‘HAPPIEST’ COMMUNITY

NAKHEEL BREAKS GROUND ON DH176M HOTEL

DAMAC TO BUILD 2,000-ROOM HOTEL OVERLOOKING AKOYA OXYGEN GOLF

COURSE



IN THE MIDDLE EAST FOR OVER 30

YEARS



REAL ESTATE NEWS DUBAI’S PUSH FOR TRANSPARENT REAL ESTATE ARBITRATION

ITHRA DUBAI TO DEVELOP COMMUNITIES FOR ENRICHMENT OF SOCIETY

DUBAI TOURISM BRIEFS HOTEL INDUSTRY ON CITY’S LATEST DEVELOPMENTS

ABU DHABI

MALL TO BE CENTREPIECE OF ZAYED SPORTS CITY PROJECT

ABU DHABI’S KHIDMAH TO MORE THAN DOUBLE LIFEGUARDS

ABU DHABI’S TDIC MULLS IDEA OF AFFORDABLE HOUSING FOR SAADIYAT ISLAND

ALDAR MAINTAINS ITS AIM AT ABU DHABI MID-MARKET PROPERTY

ESHRAQ AND MUBADALA TEAM UP FOR ABU DHABI PLOT DEVELOPMENTS

ABU DHABI RESIDENTIAL SALE PRICES DROP IN THE FIRST QUARTER

DH3.23 MILLION ALLOCATED FOR DEVELOPMENT OF COMMUNITY FACILITIES IN

ABU DHABI

SEVEN PUBLIC MARKETS FOR ABU DHABI SUBURBS

ALDAR LAUNCHES MID-MARKET RESIDENTIAL UNITS 'THE BRIDGES' ON REEM

ISLAND

NEW COMMUNITY FACILITIES TO ENHANCE LIVING STANDARDS IN AL DHAFRA

TIME TO INVEST IN ABU DHABI

MUBADALA REAL ESTATE UNVEILS ARZANAH PROJECT IN ABU DHABI

TDIC SAYS PROJECTS ON TRACK WITH CONSTRUCTION IN FULL SWING

TOP DEVELOPERS AMONG 100+ EXHIBITORS AT CITYSCAPE ABU DHABI

ABU DHABI PROPERTY AT A GLANCE

IN ABU DHABI, NEW APARTMENTS OFFER THE BEST DEALS

IMKAN STARTS THE ARTERY AT MAKERS’ DISTRICT ON REEM ISLAND

ABU DHABI MUNICIPALITY SIGNS DEALS WITH DEVELOPERS FOR FOUR

COMMUNITY MALLS

PROGRESS MADE ON ZAYED CITY DEVELOPMENT IN ABU DHABI

SAADIYAT ISLAND RESORT DEAL AWARDED TO HILL INTERNATIONAL




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REAL ESTATE NEWS

NORTHERN EMIRATES

RAK TO CONSOLIDATE FREE ZONES

MINISTRY OF INFRASTRUCTURE DEVELOPMENT TO IMPLEMENT THREE PROJECTS

WORTH DH171M

EXPO CENTRE SHARJAH DISCUSSES COOPERATION WITH ISLAMIC CENTRE FOR

DEVELOPMENT OF TRADE

RAS AL KHAIMAH SEES GROWTH IN INTERNATIONAL ARRIVALS IN FIRST QUARTER

INTERNATIONAL

CHINESE PROPERTY STOCKS GO BACK IN OVERHEATED MODE

BARCLAY BROTHERS BID FOR GROSVENOR HOUSE HOTEL: TIMES

LUXURY LONDON HOME PRICES STAGNATE AS TOP-END AREAS DECLINE

ROBUST DEMAND FOR CHINESE PROPERTY AS MORTGAGE LOANS JUMP IN FIRST

QUARTER




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MALL TO BE CENTREPIECE OF ZAYED

SPORTS CITY PROJECT Wednesday, April 19, 2017

Mubadala Real Estate will look to begin talks with mall operators and investors interested in bringing forward a

new 316,918 square metre mall next to the 43,000-capacity Zayed Sports City stadium by the end of this year.

The mall will form the centrepiece of the revamped Arzanah development unveiled by Mubadala Real Estate at

Cityscape Abu Dhabi on Tuesday. It will comprise more than 1.9 million sq m of built-up space around the existing

football and tennis stadiums that will eventually be home to more than 30,000 people.

Ali Eid AlMheiri, the executive director of Mubadala Real Estate, said the master plan unveiled was a "concept of

how we believe the site could be developed in the future", but is based around promoting an active lifestyle for

families.

Residential buildings, for instance, could feature rooftop tennis courts and pools and there will be football pitches

spread across the site. Mubadala Real Estate will be the site’s master developer and will service the plots, which it

then plans to offer to third-party developers.

The new mall will be the first element to be brought forward.

"Once the concept is approved by all of the authorities then we will be marketing the plot to well-known mall

operators/investors – the usual players in the UAE. We’ll get into discussions with them, see who’s interested in

buying it and on the best commercial terms," said Mr AlMheiri.

"We’re probably looking at some time towards the year- end. After that, once you reach the commercial

agreement with them, then the clock ticks."

He said potential investors and developers would largely decide on what went in the new mall (where a connected

hotel is also proposed), but added that it is expecting the mall operator will incorporate an ice rink and bowling

alley to replace existing facilities on site that will make way for the Arzanah project.

The bulk of the remaining site will be made up of residential plots, although there is space for a couple of office

buildings. However, Mr AlMheiri said Mubadala was conscious of current market conditions and would not "flood

the market" with new plots.

"We will be servicing the plots and selling to third parties to do those developments. And the third party will not

come to do the plot unless the market is there to develop. So we are both aligned."

He argued that there would be more interest in the mall, however, despite several major new mall projects now

under way in Abu Dhabi, because most of these are on the eastern side of the island, while this is on the west.

Arzanah was initially launched as a joint venture between Mubadala and Singapore-based Capitala in 2008 as a

1.4 million sq feet scheme containing a five-tower development with 854 apartments known as Rihan Heights on

one corner. Mubadala ended up buying several of the buildings itself.




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Mr AlMheiri said that Capitala would continue to oversee the Rihan Heights project but that Mubadala "will act as

the master developer and will be responsible for developing the necessary infrastructure of the multi-phase

master plan".

Source: The National

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ABU DHABI’S KHIDMAH TO MORE THAN

DOUBLE LIFEGUARDS Wednesday, April 19, 2017

The Abu Dhab-based buildings and maintenance company Khidmah is paddling ahead with plans to more than

double the size of its lifeguard operation as property businesses attempt to splash out into new business areas at

a time when prices and rents are sinking.

At Cityscape yesterday the company, which is 60 per cent owned by Aldar, said it planned to increase the number

of lifeguards it employs from 210 at the moment to more than 500 by the end of the year as the company looks to

maximise alternative revenues during the property downturn.

"Khidmah is a very opportunistic company. We started off identifying a need to employ lifeguards in our own

communities in Abu Dhabi. In just a few years that small segment became a business unit with its own P&L and

now it makes up one of the branches of our business," said Abdulla Al Qamzi, the Khidmah managing director.

"We’ve expanded from Abu Dhabi communities to winning a tender to supply lifeguards for the Dubai public

beaches last year. We’re currently in the process of expanding the business to all the public beaches of the

emirate of Sharjah and by the end of the year we hope to start supplying lifeguards in Saudi Arabia too."

Khidmah, which started operating in Saudi Arabia two years ago where it currently only provides technical

support services such as snagging and heavy-duty maintenance, is currently negotiating a deal to supply 110

lifeguards to work in pools and healthclubs for one major Saudi landlord. Snagging is an expression widely used

in the construction industry to define the process of inspection necessary to compile a list of minor defects or

omissions in building works for the contractor to rectify.

Khidmah was established as an in house management company in April 2009 as a joint venture between Sorouh

(an Abu Dhabi developer that later merged with Aldar) and Dubai-based Capital Investment.

However, since then Khidmah has found a niche for itself in the Abu Dhabi market and has taken on more work

for other property companies.

Mr Al Qamzi said the company had grown from employing five people in Abu Dhabi in 2009 to employing about

4,000 in all seven emirates and abroad this year.

Following the global financial crisis, UAE developers including Emaar, Deyaar, Omniyat, Union Properties and

Nakheel have set up their own facilities and property maintenance companies offering services including

pampering guests at trendy health clubs to meals on wheels as they looked for other sources of revenue and to

reduce their own maintenance costs.

In 2014 Aldar announced it was considering spinning off Khidmah through an IPO. However, since then the

company has remained tight-lipped about these plans and Khidmah declined to comment on whether they were

still being considered.


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YEARS



ABU DHABI’S TDIC MULLS IDEA OF

AFFORDABLE HOUSING FOR SAADIYAT

ISLAND Tuesday, April 18, 2017

Abu Dhabi’s Tourism Development Investment Company (TDIC) on Tuesday said that it is looking to build

"affordable" housing on the capital’s upmarket Saadiyat Island as property developers across the country look to

build lower cost off-plan units to attract buyers in a soft market.

Speaking on the sidelines of Cityscape Abu Dhabi on Tuesday, the TDIC chief executive Sufian Al Marzooqi said

that the developer was conducting a study into the feasibility of building homes at smaller ticket prices in an

attempt to tap into demand.

TDIC, the developer of Louvre Abu Dhabi, is marketing two and three-bedroom town houses at its Saadiyat

Lagoons project, with prices starting at Dh2.4 million and apartments at Mamsha Al Saadiyat, where one-

bedroom apartments were launched in 2014 at nearly Dh3m.

"We are studying building affordable housing," Mr Al Marzooqi said.

"We are also reviewing the mid-market. Mid-market is very positive. There is very high demand. I think that’s

another area where we need also to tap in. But at the same time we try to integrate into our market."

The news comes in a Cityscape property exhibition dominated by off-plan property aimed squarely at investors

looking to purchase at the lower end of the market.

At the stand of Aldar, Abu Dhabi’s largest listed property developer, a small queue of investors lined up on

Tuesday morning to put down deposits on off-plan apartments at prices starting at Dh450,000 at the developer’s

The Bridges project on Reem Island.

Bloom Holding too was heavily marketing 689 small off-plan units at its Bloom Towers in Jumeirah Village Circle in

Dubai that the company launched at the Cityscape exhibition on Tuesday with prices starting at Dh343,000 for

studios and Dh559,000 for one-bedrooms.

"What we have done this time around is that we’re offering two of the three towers for sale and they are

exclusively studios and one-bedrooms because we’ve determined from our experience that this is what’s in

demand in Dubai – actually this is probably what’s in demand in Abu Dhabi also," said Sameh Muhtadi, the chief

executive of Bloom Holding. "This is what’s in demand these days, luxury is not."

Mohammed Al Qadi, managing director and chief executive of RAK Properties, said that his company planned to

start selling 266 apartments at its Julphar Residences tower on Reem Island in Abu Dhabi this quarter.

"Normally nowadays we go small, we don’t build penthouses, we don’t build so many three-bedroom

apartments," he said. "This is where the demand is."

Property brokers in Abu Dhabi continue to report falling property sales prices amid continued supply of units and

dwindling demand as companies in the capital lay off staff in the wake of recent declines in oil prices.




YEARS



According to the broker Asteco, apartment sale prices for completed properties fell by an average of 2 per cent in

the first three months of the year compared with the fourth quarter of last year and 4 per cent compared with a

year earlier.

Broker JLL and dubizzle put the decline at 5 per cent in the first quarter compared with a year-earlier period.


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YEARS



PREMIUM PROPERTY CAN LIFT UAE AND

SAUDI ECONOMIES, EXECUTIVES SAY Monday, April 17, 2017

Demand for premium, investment-grade property in the UAE and Saudi Arabia remains strong and an increase in

supply could help to boost the region’s economic outlook by fuelling greater deployment of capital into the sector,

a survey found.

According to a poll of more than 2,000 executives conducted exclusively for The National by the research firm

Borderless Access, 94 per cent of Saudi respondents and 92 per cent of those from the UAE agreed with the

premise that a greater supply of investment-grade property in their countries would "stimulate the wider

economy, as well as the real estate sector".

In Saudi Arabia, some 44 per cent of respondents said they "strongly" agree with the premise, while 50 per cent

agreed and only 6 per cent disagreed. In the UAE, the figures were 43 per cent, 49 per cent and 8 per cent,

respectively.

Borderless Access said that both markets offer an "availability of high-quality options" across the entire property

spectrum, and that both have generated interest from global developers. It added that the correction in pricing

that has taken place over the past five years has made the market more interesting to investors. Dushyant Gupta,

the senior vice president at Borderless Access, said there had been interest in a number of alternative real estate

investments in the hospital and education sectors, for example.

Craig Plumb, the head of research for JLL Mena, said that he "would have to agree with the consensus that more

investment-grade real estate would stimulate the economy by attracting more investment from at home and

overseas".

David Godchaux, the managing director of Dubai-based Core Savills, said the premise that the development of

more investment-grade property would stimulate the economy is correct, but added he felt that a "change of

mindset" was required for more premium, investment-grade properties to be built in Dubai.

"The lack of supply is so significant that developers prefer to go and build to suit [a particular client]. It’s a much

safer investment than just building and taking the leasing risk, which is a shame because in the grade A market in

Dubai, the leasing risk is almost non-existent and they would achieve higher returns by building, leasing and

exiting or by keeping it within their portfolio," Mr Godchaux said.

"That would create an investment market, but even though the environment is very safe and stable, developers

will most of the time not take the risk.

"Because of that, it is difficult for global institutional investors to go and pick the products that are not strata to

buy." He said that global property investors are generally focused on office buildings, particularly, with a single

ownership structure, strong leasing covenants and ideally just one or a handful of occupiers. However, in the UAE,

many office buildings have been built by developers who sell off strata space piecemeal to individual investors or

to family offices. As a result, although demand for Grade A, single occupancy buildings from multinationals is very

high, in certain areas with the wrong type of office space available, rents are continuing to fall and the levels of

vacant space are increasing.




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Mr Godchaux said the same dynamics affected the warehousing sector, with developers preferring to build to suit

rather than building assets that could later be sold to institutional investors for a better return.

"You have family offices doing deals, but they are not looking at the same type of Grade A products. They don’t

have the same financial power to acquire one building, and they have a higher appetite for risk and so are looking

for higher levels of return.

"I think there is a general lack of understanding on what their [investor’s] strategy is – especially in a market that is

generally oversupplied for grade B space."

Property developer Asteco yesterday published its Abu Dhabi report for the first quarter, which found that prime

rents declined by 10 per cent year-on-year as a result of limited take-up and virtually no new tenants upgrading.

It also said the office investment market remains restricted by the "limited number of units available for sale".


Back to Index




YEARS



ALDAR MAINTAINS ITS AIM AT ABU DHABI

MID-MARKET PROPERTY Monday, April 17, 2017

Aldar Properties will continue its focus on the price-conscious Abu Dhabi investor with the launch at a property

exhibition in the capital today of its second mid-market off-plan housing project.

Abu Dhabi’s largest listed developer said yesterday that it plans to build 1,272 homes on Reem Island with prices

for studio apartments starting at Dh450,000.

At 2015’s Cityscape Abu Dhabi event, Aldar launched Shams Meera, its first mid-market project, with prices

starting at Dh900,000 for a one-bedroom flat. Construction work started in 2016.

Aldar said that the new Dh1.3 billion The Bridges project, close to Repton School Abu Dhabi in the Shams district

of Reem Island, would comprise six towers, three of which the developer plans to retain as part of its leasing

portfolio.

The news comes as brokers published more bearish data on the Abu Dhabi property market. Asteco said

yesterday that apartment sale prices for completed properties fell by an average of 2 per cent in the first three

months of the year and 4 per cent compared with a year earlier. Earlier, JLL and dubizzle put the decline at 5 per

cent.

"As far as we’re concerned work is going at full steam ahead," said Mohamed Al Mubarak, Aldar’s chief executive.

"Museums are being built, theme parks are being built, schools are being built, hospitals are being built. All these

need people to work in them."

Aldar said it was marketing the project to end users and investors earning between Dh20,000 and Dh30,000 a

month – people the company said made up between 40 and 60 per cent of the total population of the capital.

Studio apartments are priced at between Dh450,000 and Dh460,000. One-bedroom apartments will be marketed

for Dh730,000 and two-bed apartments for about Dh1 million.

Construction is expected to begin in the fourth quarter, with handover during the first quarter of 2020.

Aldar’s launch is expected to be one of a number of off-plan property launches at Cityscape Abu Dhabi.

These include Imkan, which will start marketing its The Artery building in the new Makers the District on Reem

Island, and Abu Dhabi developer Bloom, which will start marketing its Bloom Towers housing development in

Jumeirah Village Circle in Dubai.


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YEARS



REITS OFFER EFFICIENT WAY TO OWN UAE

PROPERTIES WITHOUT THE HASSLE Sunday, April 16, 2017

Real estate and construction are regarded as global drivers of economic growth and critical sources of

employment.

In western Europe, where slower economic growth and political uncertainty have squeezed transaction volumes

and prices, over-weighted ownership of real estate assets is increasingly seen as a risk.

Even in the United States, where the real estate market has continued to perform well, some industry observers

are wary of the sector’s long-term prospects. As a result, a significant number of real estate assets have been

spun into listed vehicles that allow individual investors access to real estate portfolios without owning underlying

assets.

In the UAE, real estate investment trusts (Reits) are increasingly considered an attractive prospect, pooling

advantages such as investment diversification and expert investment counsel – normally available only to

institutional investors – for individual investors.

Reits, if managed properly, could have the characteristics that local investors appreciate – a steady income, high

yields, moderate risk and linked to property.

Despite housing some world-class residential and commercial properties, the UAE’s property market – and Dubai

in particular – remains under-resourced in terms of investment grade products. Reits, therefore, could be an

attractive prospect for retail investors seeking fresh UAE property opportunities.

The launch of the UAE’s first ever residential Reit, Equitativa’s The Residential Reit, a Sharia-compliant model with

a seed portfolio of Dh418 million, was a welcome step for the sector. Then in March, Emirates NBD Asset

Management floated a Reit listed on Nasdaq Dubai and raised US$105 million. And, last week, Abu Dhabi

Financial Group announced plans to launch the UAE’s third Reit by the year’s end.

Singapore has a much bigger Reit sector. Investors tend to be attracted to Reits by their dividend yields and,

according to Bloomberg, Singapore Reits offer average yields of more than 6 per cent. This suggests that, despite

slower economic growth, Singapore’s yields have remained relatively strong even as returns on assets have not

necessarily been.

A critical factor that accelerated the growth of Reits in Singapore was the introduction of a clear regulatory

framework and government support. Reits have strong foundations, which tend to create a conducive

environment, promoting their attractiveness among domestic and international investors. Singapore Reits even

allow investors to own international property, further diversifying investment portfolios and reducing market

contagion risks.

Several countries have expressed great interest in Reits. A number of new Reit regimes have been introduced

recently, with India entering the market in 2014. For the UAE’s real estate market, Reits could represent significant

growth.

Two key possible drivers – the hedging of risk and portfolio diversification – help to increase appeal for investors.

For investors seeking tax-efficient, liquid and transparent vehicles, Reits might be the answer. Buying shares in a




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Reit makes investors a partial owner of the properties – and a partial owner of an operating business that

manages properties for profit.

A further benefit of Reits may be their ability to generate higher income over the longer term. Generally, real

estate prices are not correlated with stock prices, therefore, Reits provide diversification. Since Reit shares are

traded on stock exchanges, buying and selling is straightforward.

The appeal of Reits is not limited to retail investors. They improve asset owners’ liquidity, broaden the investor

base, facilitate equity financing and add value in the underlying real estate investment.

Dubai – and the wider UAE property market – is well placed to reap the benefits of Reits. Dubai’s real estate sector

could be on the brink of a significant shift, partly driven by demand for Reits.

Sidharth Mehta is a partner and the head of building, construction and real estate at KPMG Lower Gulf.


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ESHRAQ AND MUBADALA TEAM UP FOR

ABU DHABI PLOT DEVELOPMENTS Sunday, April 16, 2017

Eshraq Properties and Mubadala Development Company are teaming up to develop plots on Abu Dhabi’s Reem

and Al Maryah Islands.

Eshraq said yesterday in a filing that the joint venture company would develop land plots in Abu Dhabi owned by

Mubadala on Al Maryah Island and by Eshraq Properties on nearby Al Reem Island.

The pair said that they would only disclose the locations of the plots once the joint venture company had been

fully established.

"As a strategic investment company and the master developer of Al Maryah Island, we are looking for experienced

partners who can support our wider strategy and bring the right credentials to these projects," said Ali Eid

AlMheiri, executive director of Mubadala Real Estate and Infrastructure.

Eshraq owns three main land assets including a sizeable chunk of Reem Island close to Al Maryah Island.

The developer started selling 500 apartments in a planned residential and office towers project dubbed Marina

Rise in 2007. But the company was hit hard by the global financial crisis and for the past decade Eshraq instead

concentrated on operating a hotel in Dubai and selling some of its smaller land plots on Reem Island.

However, last year the company received a new lease of life when Jassim Alseddiqi, the managing director and

chief executive of the powerful Abu Dhabi-based alternative investments company Abu Dhabi Financial Group

(ADFG), was appointed Eshraq chairman.

ADFG is also Eshraq’s second largest shareholder.

Eshraq said that the appointment of Mr Alseddiqi had enabled it to "establish a strong financial footing and lay

out a new growth strategy."

In January the company said it would press ahead with three major projects: Jumeirah Rise in Dubai; Marina Rise,

on Reem Island; and a mixed-use project Gateway, between the Maqta and Sheikh Zayed bridges in Abu Dhabi.

Mubadala, the Abu Dhabi strategic investment company, which is in the process of merging with International

Petroleum Investment Company, owns Al Maryah Island and acts as the master developer of the island, which is

also the location of a new financial free zone.

However, local property agents say that over the past four years the company has been working to reduce its

exposure to domestic real estate development.


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MANAZEL MAKES FURTHER CUTS TO

PLANNED JORDAN DEVELOPMENT Sunday, April 16, 2017

Abu Dhabi-based Manazel Real Estate said it has reduced for the second time the number of homes in its long-

awaited housing project in Jordan, its first outside the UAE, because of "market feedback".

In a statement to the Abu Dhabi bourse, Manazel said it will be marketing 1,253 apartments and villas at its

Manazel Amman development during the Cityscape Abu Dhabi property exhibition, which starts on Tuesday.

The number of homes in the project has fallen by about a fifth from the 1,600 villas and apartments it was

marketing at last year’s Cityscape. That is about one-third fewer than the 1,863 villas Manazel marketed in the

Jordanian project – then known as Amman Gardens – when it was launched in 2008.

"Numbers are based on the new project layout, which adds other elements into the mixed-use development after

receiving further guidance from market feedback," a Manazel spokesman told The National.

Manazel Amman will also include retail areas, mosques, gyms, pharmacies as well as a medical centre and

kindergarten on site.

The company announced a plethora of ambitious projects in the mid 2000s as the UAE benefited from an

increase in real estate prices. Manazel completed schemes including Al Reef Villas and Capital Mall in the Abu

Dhabi and Dune Village in Dubai. But it was hit badly by the global financial crisis forcing it to put many of its plans

on ice.

The company is working on long-awaited plans to build a 70,000-square-metre Capital Health Care City hospital

and property project in Abu Dhabi and a tourism project in Ghantoot.

"In the pursuit of delivering sustained and optimal shareholder value, Manazel remains focused on the delivery of

unique and diverse real estate and tourism projects, which reflects the company’s commitment to its on-going

expansion strategy to enter new growth markets, which will both diversify the company’s real estate portfolio

while also creating new revenue streams also fulfilling its revenue diversification strategy," said Mohamed Al

Qubaisi, Manazel’s chairman, in a statement.


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ABU DHABI RESIDENTIAL SALE PRICES

DROP IN THE FIRST QUARTER

Saturday, April 15, 2017

Abu Dhabi residential sale prices declined by an average of 5 per cent year-on-year in the first quarter, with

expectations of further drops this year because of lower demand and new supply, according to a report from

dubizzle and broker JLL.

“A decline both in the rental and sale segment is further expected in the capital – fragmented in nature, with some

communities and property types to be affected more than others,” said Ann Boothello, dubizzle’s senior product

marketing manager of property.

The largest fall in villa sale prices came from Golf Garden in Khalifa City A, dropping by 11 per cent to an average

price of Dh1,005 per square foot compared to the first quarter of last year. Other areas that slid in pricing were Al

Raha Beach, Al Reef and Al Zeina. Saadiyat Beach was the only villa community in the report that remained stable

at Dh1,524 per sq ft.

However, the biggest plunge in sales came from apartments in the Al Bandar area, down 21 per cent. Saadiyat

Beach and Al Reem Island both dropped 7 per cent, with downtown Al Reef declining by 4 per cent. Apartments

rentals dropped 6 per cent for one, two, and three bedrooms citywide, while rental prices for three-bedroom

villas declined by 8 to 12 per cent.

Ms Boothello said that developers needed to keep an eye on market demand, which varies greatly from Abu

Dhabi to Dubai. “Abu Dhabi is known for its family-feel,” she said pointing to the most popular search on

dubizzle’s platform in both sales and rentals being two-bedroom flats and four to five-bedroom villas last year, as

opposed to one-bedrooms in Dubai.

As a result, smaller villas were subject to price declines, such as three bedrooms in Al Raha, Al Reef and Al Zeina

and two bedrooms in Al Reem. Property prices have been on a downward spiral for the past year as more supply

has been brought on despite higher vacancy rates. Abu Dhabi has also been grappling with less money from oil

sales, which has led office rental searches on dubizzle to plummet by 47 per cent in the first quarter compared

with a year earlier.

“While demand has reduced largely due to the decline in oil prices and the resultant impact on government

spending and sentiment, reduced supply completions have mitigated the extent of oversupply,” said David

Dudley, JLL’s Abu Dhabi head.

More than 3,000 residential units were completed last year, pushing up the property stock to nearly 250,000 units.

Developers have since become more cautious by reducing completions.

There are about 5,000 units scheduled to be completed this year, but dubizzle and JLL forecast that a significant

proportion of this will be delayed at the final stages to help balance the market. Mr Dudley said that the property

market is expected to remain depressed through next year, but there are indications that supply completions for

2017-18 will be higher than 2015-16 levels. “As market conditions start to improve in Dubai and government

spending returns to Abu Dhabi, the market will head back towards recovery and it will be important for supply

completions to remain balanced,” he said.




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JLL and dubizzle echo reports by property brokers, including Cavendish Maxwell and Cluttons, which have

indicated a softening market in the emirate.

Cluttons said last weak that weak economic conditions, rising inflation and high costs of living are curbing

demand in residential and commercial markets in Abu Dhabi, with the steepest declines in the luxury market.


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IMF SHARPLY CUTS MIDEAST OIL

EXPORTERS’ ECONOMIC GROWTH

FORECASTS Tuesday, April 18, 2017

The IMF said on Tuesday it had cut its forecast for Arabian Gulf oil producers’ economic growth this year, as their

output cut deal is expected to wipe out any gains from higher oil prices in terms of government revenue.

The gloomy regional prediction is in contrast to a slightly brighter outlook for the world economy as a whole,

which the IMF projects will grow by 3.5 per cent this year, up 0.1 per cent from its previous update and up from a

growth rate of 3.1 per cent last year. It left its forecast for next year at 3.6 per cent.

"The expected growth improvements in 2017 and 2018 are broadly based," said Maurice Obstfeld, the IMF’s head

of research, but he added that "growth remains tepid in many advanced economies, and commodity exporters

continue to struggle".

The IMF also said there is a downside threat to broad economic growth from protectionist trade policies that have

been gaining political traction in the more advanced economies, especially the US, under president Donald

Trump, as well as the UK and some parts of Europe, which have turned anti-globalist.

The IMF said it expects real GDP growth for the seven oil-exporting countries in the Middle East of 1.9 per cent

this year, which is a full percentage point lower than the 2.9 per cent growth it forecast for the group in October.

Saudi Arabia’s growth is forecast to grow at just 0.4 per cent this year, compared with last October’s projection of

2 per cent. The UAE’s forecast has been cut to 1.5 per cent from 2.5 per cent forecast in October.

The hardest hit within the group is Iraq, where 0.5 per cent growth had been expected, but it is now forecast to

contract by 3.1 per cent. Also forecast to contract is Kuwait, by 0.2 per cent, compared with a previous forecast of

2.6 per cent growth.

"Iraq, Kuwait, Saudi Arabia, and the United Arab Emirates are bearing the brunt of the cuts," the IMF said,

referring to the deal reached in November to cut Opec production by 1.2 million barrels per day (bpd) to 32.5

million bpd. Saudi Arabia agreed to make up about half of the total cut and has been producing at a rate of about

10 million bpd since the deal took effect in January, compared with record production of about 10.7 million bpd

last autumn.

Opec was joined by 11 other producers from outside the group, led by Russia, the world’s largest oil producer,

and the deal was to run for an initial six months, but it is widely expected to be extended at least until the end of

the year.

While the deal is credited with a rise of about 20 per cent in oil prices over the past few months, the lost

production is biting on those bearing the heaviest load. The lower forecast for Saudi Arabia brings the IMF into

line with many other economic forecasters.




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"It seems the IMF has finally come around to the view that the kingdom’s growth is going to be weak for sometime

in this ‘lower for longer’ oil price environment," said Jason Tuvey, a regional analyst at Capital Economics.

Similarly, the IMF’s view is in line with other private institutional forecasts, such as that of Abu Dhabi Commercial

Bank (ADCB), which is projecting real GDP growth for the UAE to slow to 1.2 per cent this year, down from 2.5 per

cent last year.

"This is due to an expected contraction in real oil sector activity, linked to the Opec-led production cut," said

Monica Malik, ADCB’s chief economist. "Nevertheless, we expect to see an acceleration in real non-oil GDP growth

to 2.9 per cent in 2017, from 2.3 per cent in 2016, partly due to a Dubai-led strengthening in investment activity.

And we see headline GDP growth accelerating in 2018 to 3.1 per cent, supported by both stronger oil and non-oil

GDP growth."

Indeed, the IMF expects UAE real GDP to pick up sharply next year to 4.4 per cent.


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RAK TO CONSOLIDATE FREE ZONES

Monday, April 17, 2017

Ras Al Khaimah will consolidate its two free zones under one umbrella, creating the Ras Al Khaimah Economic

Zone (Rakez).

RAK Free Trade Zone and RAK Investment Authority (Rakia) will fall under the authority of Rakez to create one of

the region’s largest economic zones, housing more than 13,000 companies.

"It is our firm belief that after nearly two decades of operating independently, the time is right to leverage the

combined resources of RAK FTZ and Rakia under one strong, unified brand," said Sheikh Ahmed Al Qasimi, the

chairman of the authority and free zones.

The free zones began consolidating last year, combining their boards and management teams followed by

streamlining various functions and activities. Ramy Jallad, the group chief executive of the three entities, said the

merging of the bodies was natural to scale up and meet the growing demands of existing clients, potential

investors and contribute to the overall economy.

"Bringing together RAK FTZ and Rakia under the umbrella of Rakez is the first step towards taking our customer

experience to the next level," he said. "It underlines our commitment to provide exceptional service delivery,

simplified processes and cost-effective solutions."

RAK has been looking to attract more business and made an announcement at the end of last year that it would

partner the DIFC. Under the agreement, companies, investors and individuals can choose DIFC courts and its

arbitration centre to resolve disputes. Sheikh Ahmed said that this would offer "greater certainty and confidence

in a legal system recognisable around the world", while property and assets of individuals will be more secure.


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MORE VISITORS AT DUBAI WORLD TRADE

CENTRE Sunday, April 16, 2017

Dubai World Trade Centre said yesterday it received more than 3 million visitors last year, an 11 per cent increase

on 2015, despite fewer events taking place at the exhibition centre.

Sheikh Ahmed bin Saeed Al Maktoum, deputy chairman of DWTC Authority, said that the long-term agenda of

DWTC is to act as a key economic contributor to the emirate’s GDP.

Last year, there was a total of 298 meetings, incentives, conferences and exhibitions (Mice) and more than 100

mega-events, a 20 per cent drop from the 500 trade and mega-events held in 2015.

The added foot traffic was the result of an increase in events such as Gulfood, which had a 10 per cent rise in

visitors with more than 93,000 attendees, while the region’s largest construction show, The Big 5, grew 22 per

cent.

Positioning Dubai as a hub for business events also increases revenues from travel spending, which globally

totalled US$1.15 trillion last year, according to the World Travel & Tourism Council. And that sector is expected to

grow nearly 50 per cent to $1.72tn in the next decade.

"Across our business portfolio, we seek to deliver the future ‘integrated Mice destination’ at the very heart of

Dubai, powered by the logistical and regulatory efficiencies of a dual license free zone ecosystem," said Helal

Almarri, director general of DWTC Authority.

DWTC is expanding to house more offerings such as One Central, a development that includes commercial assets,

hotels, residences and a multi-purpose theatre. Mr Almarri said that all of these offerings helped to deliver strong

returns for DWTC clients while strengthening Dubai’s attractiveness to international and regional businesses.

"We are confident in the resilience of the DWTC portfolio today, to catapult greater growth acceleration over the

next three years, sustainably driving GDP contribution from the Mice sector as a key economic driver for Dubai,"

said Mr Almarri.


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MARKET ANALYSIS: IN TIME, NEW

BANKRUPTCY LAW WILL BENEFIT UAE

CAPITAL MARKETS Sunday, April 16, 2017

Consider these facts: the size of the UAE capital markets is about US$327 billion.

This consists of $129bn spread across 191 issues in the public bond market, $103bn across 472 loan tranches in

the syndicated loan market and about $95bn across 97 stocks listed on Dubai and Abu Dhabi stock exchanges.

Bilateral loans and the market capitalisation of Nasdaq Dubai are excluded from this.

And then consider this: in the World Bank’s 2017 Doing Business report, the UAE’s overall rank at 26 was eight

positions higher than its 2016 rankings. However, when it came to winding down a business, the UAE ranked very

low, at 104, with almost 3.2 years needed to wind down a business compared with the OECD average of 1.7 years,

at a cost of 20 per cent of the estate, against the OECD average of 9.1 per cent, and a recovery rate of 29 per cent,

compared with the OECD average of 73 per cent.

Capital markets in any country are affected by the level of investor protection provided by the insolvency law

framework and efficiency of the legal system. To achieve diversification of the economy away from oil, reforms to

improve the legislative environment governing and protecting businesses in the UAE are as important as fiscal

reforms.

The new UAE Bankruptcy Law was ratified as Federal Law 9 of 2016 on October 24 last year and came into force

on December 29. The objective of the law is to modernise and streamline the bankruptcy procedures here in line

with international best practices.

For the country’s markets, the benefits of the law will take time to emerge.

In the short term, the law has had little effect on the markets, as we can see by reviewing the performance of

various asset classes within UAE capital markets for the quarter before and after its implementation.

The effects can be summarised as follows:

The DFM and ADX indexes recorded positive price and volume movements in December last year and in

January. However, those appear to be more a reflection of the "Trump trade" in global equity markets as

well as stability in oil prices. Much in sync with the current volatility in oil prices, the DFM index has now

fallen by about 10 per cent since the beginning of this year and volumes have reduced from more than

Dh1bn to less than Dh100 million per day now.

Given the dirham’s peg to the dollar, UAE interbank rates move in conjunction with the dollar rates. The

three-month Emirates Interbank Offered Rate (3mEibor) has gone up from 0.68 per cent at the end of

2014 to about 1.45 per cent now, mainly in response to the rate hikes in the US. However, the 3mEibor-

3mLibor spread has reduced from 48bps in December to about 31bps now. The reduction in

Eibor/London Interbank Offered Rate (Libor) spread can be interpreted to reflect the positive effect of the

new bankruptcy law. However, it is difficult to quantify it accurately. Reduction in the Eibor/Libor spread




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could largely be attributed to improving liquidity in the local banking system because of higher oil revenue

deposits and lower loan growth.

UAE credit spread premium, defined by the difference between the option-adjusted spread on liquid UAE

bonds (BUAEUL index) and the option-adjusted spread on US IG bonds (Busc index), has narrowed from

more than 50bps in early 2016 to less than 10bps now. While there may be some positive effect of the

new bankruptcy law, again, it is difficult to quantify. The spread tightening can easily be ascribed to

improved oil fundamentals as well as a stronger technical backdrop ensuing from higher bids from the

banking books as they enjoy more discretionary cash from improved liquidity in the banking system.

The syndicated loan market has slowed in the recent past mainly as a result of declining cheap liquidity

from international banks. There is minimal evidence of the new bankruptcy law on the syndicated loan

market, possibly because majority of the borrowers in this space are sovereign or GREs.

There are several reasons why the new law has had so small an effect on the markets, so far. These

include: a) UAE capital markets are dominated by sovereign and sovereign-owned entities, which are

generally perceived to operate above the corporate laws; b) most entities in debt and equity markets have

strong balance sheets and have high credit ratings. They are seen as too far from any bankruptcy event,

and; c) Insolvency regime provides the biggest benefit to companies in the SME segment and this segment

has low representation in the UAE capital markets. The benefits of soft infrastructure reforms also take

time to materialise, particularly in the less deep capital markets, as in the UAE.

Anita Yadav is the vice chairwoman of the Gulf Bond and Sukuk Association. She is also a senior director and the

head of fixed income research at Emirates NBD.


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MINISTRY OF INFRASTRUCTURE

DEVELOPMENT TO IMPLEMENT THREE

PROJECTS WORTH DH171M Monday, April 17, 2017

The Ministry of Infrastructure Development is carrying out three vital projects in the Emirates of Sharjah and

Umm al-Qaiwain, including two projects for the Ministry of Interior and one project for the Ministry of Justice, at a

total cost of AED171 million.

The ministry highlighted that the engineering designs for the three projects were prepared according to the

standards for green buildings and sustainability.

The construction of the headquarters of the special security forces "Unit 2" in Seeh Al Mahab in Al Dhaid, Sharjah,

estimated to cost Dh69 million, has begun, the ministry revealed, adding that it was expected to be completed by

the third quarter of 2018.

The other project, which is being built for the Ministry of Interior, includes the construction of a building for UAE

nationalities and residents in the emirate of Umm al-Qaiwain, which is estimated to cost around Dh57 million and

is expected to be completed in the fourth quarter of 2018.

The Ministry of Infrastructure Development has begun work on the Khorfakkan Court Building project in Sharjah,

which is estimated to cost some Dh45 million and is expected to be completed by the third quarter of next year. It

covers an area of about 16,506 square metres.

Source: Emirates Business 24/7

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ALDAR LAUNCHES MID-MARKET

RESIDENTIAL UNITS 'THE BRIDGES' ON

REEM ISLAND Tuesday, April 18, 2017

Aldar Properties, Abu Dhabi’s leading listed property development, investment and management company, has

announced the launch of 'The Bridges', a 1,272 unit, Dh1.3 billion, mid-market residential development.

Capitalising on the demand for this type of product, Aldar will release one of the towers for sale at Cityscape Abu

Dhabi. Property prices will start from Dh450,000, with eight different unit types including studios, 1, 2, and 3

bedroom apartments.

Underlining the company’s confidence in the growing mid-market segment, the towers, comprising 636 homes,

will be incorporated into Aldar’s leased residential portfolio as part of its investment programme announced last

month.

The Bridges’ two plots, each containing three towers, are separated by the new 2.4km canal that runs through

Reem Island.

Mohamed Khalifa Al Mubarak, Chief Executive Officer of Aldar, commented, "We have launched The Bridges in

order to cater to the significant demand for high quality, yet affordable homes in prime investment zone

destinations across Abu Dhabi. Set alongside the new Reem Island canal featuring a wide range of amenities and

situated close to Abu Dhabi’s business and cultural districts, The Bridges will appeal to both investors and owner

occupiers."

Construction is expected to commence in the fourth quarter of 2017 and be ready for handover during the

beginning of 2020.


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EMAAR PROPERTIES DECLARES 15% CASH

DIVIDEND OF DH1.074BN FOR

SHAREHOLDERS Tuesday, April 18, 2017

The 19th Annual General Meeting (AGM) of Emaar Properties PJSC today declared a cash dividend of 15 per cent

of the share capital, equivalent to Dh1.074 billion ($292 million), for distribution to the company’s shareholders.

The AGM also approved the report of the Board of Directors on the activities and financial position of Emaar, the

Auditor’s report, and balance sheet for 2016.

Ernst and Young was appointed as the auditor for 2017.

The assembly also approved the Employees Incentive Scheme.

Mohamed Alabbar, Chairman of Emaar Properties, said that Emaar has created sustained value for shareholders

through its competencies premium real estate, malls and hospitality.

"The leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime

Minister and Ruler of Dubai, inspires us to push our boundaries and expand our operations with the goal of

creating added value for our stakeholders."

He added: "Our ambition is to further strengthen customer loyalty and enhance our brand value. We will achieve

this with our absolute focus on being a customer-centric organisation. We will also strengthen our financial

performance by maintaining a robust balance sheet. Across all our businesses, we focus on bringing high-calibre

professionals while also shaping the next generation of young future leaders. Our new growth approach is led by

the digital transformation of our operations, which will transform our company and ensure that we are future-

ready."

In 2016, Emaar recorded net profit of Dh5.233 billion ($1.425 billion), and revenues of Dh15.540 billion ($4.231

billion). Recurring revenues from Emaar’s shopping malls, hospitality, entertainment and leisure businesses was

Dh 5.976 billion ($1.627 billion), 38 per cent of the total Group revenue. Emaar’s international operations reported

revenue of Dh2.665 billion ($726 million), 17 per cent of the total Group revenue.

The performance of Emaar’s real estate sales in Dubai recorded notable growth during 2016 at Dh14.4 billion

($3.92 billion). Sales across various international markets in 2016 were valued at Dh3.9 billion ($1.1 billion). The

Group now has a backlog of Dh42.977 billion ($11.701 billion) to be recognised in the next few years.

Emaar also strengthened its landbank, notably in Dubai, without capital investment through joint ventures and

strategic partnerships. The company’s land bank in the UAE now stands at over 24 million sq m taking its total

land bank across all markets to over 190 million sq m.

Emaar Malls (DFM: EMAARMALLS), the shopping malls & retail business majority-owned by Emaar Properties,

recorded a net profit of Dh1.874 billion ($510 million) and revenue of Dh3.227 billion ($879 million) in 2016.




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The shopping malls assets of Emaar Malls together welcomed 125 million visitors during 2016. The Dubai Mall

continues to be the world’s most visited retail and leisure destination, having welcomed 80 million visitors per

annum for the past three consecutive years.

The hospitality & leisure, commercial leasing and entertainment business of Emaar recorded revenues of Dh2.749

billion ($748 million) in 2016.

Average occupancy of hotels under Emaar Hospitality Group in Dubai was 85 per cent, higher than the industry

average.

Emaar’s growth has been led by an overall improvement in productivity in all performance indicators.

The company has introduced a new procurement approach that generates savings. Customer service satisfaction

levels have also increased across all operations – real estate, malls, hospitality and entertainment.

Emaar is now developing The Tower in Dubai Creek Harbour, billed to be one of the fascinating attractions in the

world. Emaar is also strengthening Dubai’s retail sector through new retail precincts in Dubai Creek Harbour and

Dubai Hills Estate.

Another smart development for the future is Emaar South in Dubai South, a next-generation lifestyle destination

in the new aviation and logistics hub of the city, located near the venue of Expo 2020 Dubai.


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IS YOUR SALARY ENOUGH TO AFFORD

DUBAI RENTS? Wednesday, April 19, 2017

Expatriates in Dubai are reputed to earn more than their peers back in their home country, but do they make

enough money to afford living overseas?

Various market research data suggest that while foreigners in the Gulf may enjoy tax-free salaries, high

accommodation costs remain out of reach among the working class, especially low-income professionals.

In fact, researchers have consistently ranked Dubai in the top priciest markets.

Studies have shown that a single tenant needs to earn more than Dh16,000 monthly or Dh200,000 a year to

afford housing costs in the emirate, much higher than in other destinations popular among expatriates.

Nested, a UK-based startup that helps landlords sell their property, has reviewed the rents in 72 cities around the

world for 2017. It said that single residents require an annual income of Dh231,736 (£49,204.56) a year to be able

to afford living in a 420-square-foot room, while a family of four needs to have a yearly paycheque worth

Dh439,704(£93,362.52) to rent an 800-square-foot place.

Dubai did not show up as the priciest residential leasing market for 2017, but came out more expensive than

most of its peers.

The cost of renting an accommodation in the emirate, estimated to be around Dh13.18 per square foot, is the

fourth-highest in the world, knocking off rents in Zurich, which has a reputation for having high living costs, as

well as in London, Miami, Tokyo, Amsterdam, Paris and Melbourne.

The rental costs in the emirate are also more than twice the average lease rates in Madrid, Barcelona, Milan,

Frankfurt, Vienna and Brussels, among other destinations.

Researchers at Savills also found that an expatriate needs to earn Dh214,141 ($58,300) a year, the ninth highest in

the world, in order to afford the housing and other living costs in Dubai. Estimated annual spending in Dubai was

ranked higher than in Sydney, Miami, Los Angeles and Chicago.

In Mercer’s 2016 Cost of Living Survey, Dubai was ranked 21st most expensive out of the 209 cities surveyed,

ahead of San Francisco, Paris, Miami, Los Angeles, Chicago and Sydney, among many other popular destinations.

Analysts have acknowledged that high accommodation costs in Dubai continue to price residents out and many

have no recourse but to share accommodations with non-family members or move out of the city centre.

“There is a large and critical portion of the workforce that remains priced out of the market,” Jesse Downs,

managing director of Phidar Advisory, told Gulf News.

There’s an ongoing effort to introduce more affordable housing units to the market, but to date, the supply is

apparently lacking.

According to JLL Middle East and North Africa, 22 per cent of residential units launched in 2015 were affordable,

while 18 per cent of those unveiled last year were in the same category.




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“Governments have recognised the need to regulate the market to require developers to provide an agreed

percentage of affordable units but more work remains to be done,” said Asma Dakkak, research manager at JLL

Middle East and North Africa.

Monthly rental rates in ten priciest cities and annual income required for single tenants:

1. San Francisco, USA

Monthly rent: Dh7,859

Income required: Dh325,144

2. New York City, USA

Monthly rent: Dh7,531.92

Income required: Dh311,703.46

3. Hong Kong



4. Dubai, UAE



5. Singapore



6. Washington DC, USA



7. Geneva, Switzerland



8. Sydney, Australia



9. Zurich, Switzerland

Monthly rent: Dh4,625





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10. Los Angeles, USA



Note: Figures are based on data published by Nested and April 19, 2017 conversion rates.

Source: Gulf News

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DH3.23 MILLION ALLOCATED FOR

DEVELOPMENT OF COMMUNITY FACILITIES

IN ABU DHABI Wednesday, April 19, 2017

A total of Dh3.23 million has been contributed by nine leading developers towards the establishment of

community facilities in the emirate of Abu Dhabi.

The private sector firms signed a formal agreement with the emirate of Abu Dhabi’s urban sector developer, the

Urban Planning Council (UPC), at Cityscape Abu Dhabi on Wednesday. The funds have been allocated as part of

the companies’ corporate social responsibility initiatives during the UAE’s Year of Giving.

“We are proud to have the private sector’s active support in the building of new sustainable communities that

meet the expectations of residents and living standards in the emirate,” said Falah Al Ahbabi, director general of

the UPC, at a press conference in the capital.

According to UPC officials, the Dh3.23 million will be allocated to a variety of projects over the next few months.

These projects will we designed to develop facilities like public parks, playgrounds, mosques, and recreational

centres, or be used to refurbish and enhance existing amenities, said Mohammad Al Khadar, executive director

for urban development and Estidama (sustainability) at the UPC.

“The call for contributions was made about two months ago, and now that the relevant agreements have been

signed, a committee will look into the allocation of funds towards specific projects. We expect to see the first

projects being completed as early as the end of the year,” Al Khadar told Gulf News.

Up to 70 per cent of the contributions will be used for the development of mosques and parks across the emirate,

especially in areas with a marked shortage of community facilities, he added. While it is not known exactly how

many development projects can be undertaken with the funds, the official pointed out that the construction of a

large new mosque typically costs about Dh20 million.

“For example, we are looking into suburbs like Mohammad Bin Zayed City, Shamkha and Samha, and ascertaining

possible locations for the facilities within these suburbs,” Al Khadar said.

Mohammad Al Mubarak, chief executive officer at master developer Aldar Properties, announced that the

company will build seven mosques in the emirate at a cost of Dh130 million.

“Our partnership with the UPC in this initiative fits within our programme of social responsibility, as well as the

current national emphasis on supporting economic growth through the development of sustainable

communities,” said Sufian Al Marzouqi, chief executive of tourism master developer Tourism Development and

Investment Company.

Source: Gulf News

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SOUTHERN AFRICAN FUND PICKS

EXPOSURE IN DUBAI REALTY Wednesday, April 19, 2017

Botswana-based, publicly-listed Turnstar Holdings Ltd has picked up an office building in Dubai, which could set

the stage for further acquisitions in the city’s mid-tier freehold clusters. Investments are said to be in the region of

$100 million (DH367 million).

Turnstar’s track record until now had been largely confined to the African market, through owning and operating

malls and business parks. Its first acquisition in Dubai is an office building in Dubailand’s Majan cluster, a ground

plus four-storey structure offering 40,000 square feet for boutique offices.

The institutional property and fund operator also appointed Dubai-based Global Capital Partners — which has a

land bank of 1 million square feet — to be its regional representative as it seeks to build a portfolio of properties

offering high-yield generation possibilities.

Subsequent purchases are under consideration. These will include a mix of residential, commercial and industrial

as well as retail offerings, predominantly in mid-income areas as Dubai gears up for the World Expo 2020.

Turnstar is also setting up an office here, while Global Capital Partners will manage current and future asset

acquisitions.

On why it is handpicking mid-market properties and locations, Uzair Razi, Turnstar’s spokesperson, said: “As our

balance sheet shows, we are long-term investors. We believe that this is the only way to maximise the return in

real estate assets.

“It is our intent to capitalise on this [the Dubai exposure] over the next decade. We believe Dubai will continue to

provide extraordinary returns over the next few years. We are patient investors as well, and are more than willing

to ride out the vagaries of business cycles to reap the long-term rewards.

“Our analysis reveal that the corridor leading up to the World Expo 2020 site and the new [Al Maktoum

International] airport offered the highest potential for capital gains, especially given the emphasis this city gives to

logistics. And logistics is a strong precursor for capital gains.”

As per the Turnstar website, it currently has real estate assets of more than 2.4 billion pula (Dh846 million).

Moving into dollar-pegged markets such as the UAE will also offer a currency hedge against domestic currency

volatility.

The planned investments will increase their balance sheet by more than 50 per cent. The company’s share price

more than doubled over the last three years.

“While our preference is for higher rental yields — which data shows to be the greatest weightage for

appreciation in the long term — we are not only looking at the mid-income market,” the Turnstar spokesperson

added. “If yields and opportunities present themselves at the higher end of the market, then that will be the route

that we will take.”

Turnstar’s entry could be one of the first instances of listed southern African institutional investors forming plans

for a Dubai property exposure. Traditionally, northern Africa has channelled ample funds into the sector, both




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retail and institutional. The belief in local real estate industry circles is that Dubai’s property market can start

leveraging foreign institutional interest in earnest going forward. The Dubai Land Department is also giving this a

big push, with upcoming regulatory reforms that would encourage overseas REITs (real estate investment trusts)

to come in.

When that happens, it can be a game changer from Dubai property’s heavy reliance on retail investors. On the

alliance with Turnstar Holdings, Sameer Lakhani, Managing Director of Global Capital Partners, said: “There is no

set commitment for any number of projects; rather, the decision is fuelled by the opportunity that is presented in

the marketplace. There is a joint conviction that as the real estate market here matures, opportunities will

continue to present themselves. Accordingly, the mandate is large ... but essentially opportunistic.”

Source: Gulf News

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DUBAI PROPERTY Q1 GAINS LED BY

HIGHER VALUE DEALS Wednesday, April 19, 2017

Property investors seem more willing to pick up higher priced properties in Dubai — in the first three months,

transactions of Dh1 million and more made up 64 per cent of the overall compared with 47 per cent in Q1-16.

Simultaneously, today’s buyers are going back to larger unit sizes, which is also a stark departure from their 2016

preferences for smaller units at more modest prices, according to data from Reidin-GCP.

This could also be a sign of improved end-user interest in recent buying activity, given their preference for larger

units than is the market norm.

Also, going by the first quarter numbers, the established communities of Springs and the Meadows recorded the

highest year-on-year gain, of 48 per cent. Even the interest around the apartments in JLT was pronounced.

Interestingly, Springs and Meadows also recorded the highest price growth year-on-year of 6 per cent, suggesting

that sellers are confident enough to ask for more. And get them too. (The cluster that fared the worst in buying

volumes was International City, down 18 per cent from Q1-16, the Reidin-GCP report notes.)

“After a decline in the last three years, there has been a resurgence in transactional activity in the first quarter of

2017, confounding sceptics that had called for a continued decline in volumes,” the report adds. “A recent

criticism suggested that the reason why activity is on the rise is due to the registration of previous sales.




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“However, an analysis of communities with no handovers — JLT, Greens, Springs and Meadows — shows a

significant jump in activity.”

That some of Dubai’s older locations are faring well enough in the secondary market is something of a surprise.

The belief in the market was that the sharp spike in off-plan launches in the last six months was solely responsible

for most of the buying taking place. “We have witnessed a sharp increase in off-plan sales in Dubai South and

Creek Harbor, testifying to the demand that is increasing at both ends of the spectrum in Dubai,” the report says.

“Prices are rising in select locations and largely due to end user activity,” said Sameer Lakhani, Managing Director

of Global Capital Partners. “We know this is because these are in established locations and/or in areas where the

nature of transactions are single rather than multiple [as happens when investors are involved]

“Regarding buying patterns, overall there seems to be the beginning of a shift in sentiment towards the luxury

segment as transnational activity has started to rise in those areas, too.”

With Ramadan approaching and immediately followed by the summer break, developers should start slowing

down on off-plan launches and take their chances — and better utilise marketing spend — from September. An

enforced slowdown could also benefit the market in another way — some market sources have been sounding

alarms over the sheer number of new projects being released into the market at the same time. That too when

buyers are still working their way back into the market.

Source: Gulf News

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CHINESE PROPERTY STOCKS GO BACK IN

OVERHEATED MODE Wednesday, April 19, 2017

The world’s hottest property stocks are to be found in China as tougher measures to cool real estate prices fail to

deter investors.

Chinese companies account for nine of the 10 best performers this year on the Bloomberg World Real Estate

Index. Among members of the MSCI China Index, Country Garden Holdings Co., Sunac China Holdings Ltd. and

China Evergrande Group are the standout winners with gains of more than 70 per cent, five times the pace of the

benchmark measure.

Soaring sales and improving profits go some way to explaining a surprise rally that has pushed the shares into

overbought levels, lifted valuations and forced short sellers to retreat. While Credit Suisse Group AG says now’s

the time to take profit, BNP Paribas SA — one of only two brokerages to recommend buying all three stocks at the

start of the year — says gains can continue, albeit more narrowly.

“Investors will be more selective in buying the stocks this year,” said Wee Liat Lee, an analyst at BNP in Hong Kong.

“Large developers will gain market share from the smaller players. You need to be a very big developer with

diversified exposure across different cities in China to thrive amid tougher curbs.”

Country Garden, Sunac and Evergrande trade at least 28 per cent above analysts’ average target price, although

valuations remain below the multiple for the global real estate gauge. Lee said clients are now more receptive,

after a global marketing tour in January was met with hours of debate and investors “trashing” his bullish takes on

Country Garden and Sunac in particular.

“You can’t ignore them after this rally,” Lee said.

Home prices rose last month in 62 out of 70 tracked by the government, the most since October. New home sales

by value increased 18 per cent to 1 trillion yuan (Dh533 billion) last month from a year earlier.

The firms have characterised themselves with debt-fuelled expansion, an aggressive appetite for land banks and a

focus on size over profitability. Sunac was among the country’s most active real estate buyers last year, lifting its

total debt-to-equity ratio to the highest since the global financial crisis. Evergrande is China’s most indebted

property developer, although it has unveiled measures to reduce its net gearing and cut financing costs.

Still, sales for companies on the MSCI China Real Estate Index are forecast to soar 39 per cent this year on

average, while earnings will probably grow 9.2 per cent. China’s listed developers are witnessing the first drop in

debt leverage since the 2008 global financial crisis.

“Earnings for these three firms are indeed so-so,” said CIMB Securities Ltd. analyst Raymond Cheng. “But some

investors would prefer rapidly-growing sales than profits only. Their soaring contracted sales in the past year

could also lock in some profits this year or next year.”

Riding China’s property market boom last year, contracted sales for Evergrande and Country Garden soared 82

per cent and 120 per cent respectively, making them the nation’s top and third largest by that measure. Sunac’s




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sales more than doubled to 150 billion yuan. Those gains outpaced the 36 per cent growth for new-home sales

nationwide.

Burned by the rally, bearish speculators have been trimming their bets. Short interest on Evergrande dropped to

11 per cent of free float, compared to last year’s high of 30 per cent, according to data compiled by IHS Markit Ltd.

and Bloomberg. For Country Garden it’s just 3.7 per cent, or half what it was in February.

Sanford C. Bernstein & Co. analysts still recommend shorting Sunac, citing “stretched” valuations, declining

profitability and high exposure to the bigger cities with buying restrictions. Credit Suisse also has a word of

caution on the sector, predicting revenues will rise at a slower pace in the second quarter.

Most first- and second-tier cities imposed home-buying curbs in the past six months, while top policymakers

reiterated a pledge to limit property speculation at this year’s National People’s Congress. New banking regulator

Guo Shuqing has said he will pay close attention to real estate bubbles after 45 per cent of new loans in China last

year went to the property sector, with most going to personal mortgages.

Source: Gulf News

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SEVEN PUBLIC MARKETS FOR ABU DHABI

SUBURBS Wednesday, April 19, 2017

Seven new public markets will soon be built in the capital’s suburbs in order to offer access to a range of facilities

for residential neighbourhoods, the Municipality of Abu Dhabi City announced today (April 19).

The projects, which are on display at Cityscape Abu Dhabi, will cost Dh550 million in total, said Musabbah Al

Murar, acting general manager at Municipality of Abu Dhabi City.

“One of the key objectives of establishing markets and community facilities in these areas is to raise the standard

of living in the city’s suburbs. These new structures will also promote social interaction, and allow residents to

relax and unwind,” the official said.

Among the projects is a 9,000-square metre structure in Bani Yas that will cost about Dh45 million. In Shakhbout

City, a two-year Dh160 million project will develop a 33,000 square-metre community market. In nearby

Mohammad Bin Zayed City, Dh170 million will be invested by a private sector firm to set up a 36,000-square

metre retail and entertainment venue.

On the first day of Cityscape yesterday (April 18), the Municipality also signed agreements with three other

developers.

Under the first agreement, Al Shamkha will see the development of a 16,000-square metre market at a cost of

Dh68 million. A smaller 13,000-square metre structure will be built to serve the needs of communities on Yas

Island, and it will Dh65 million. And In Wathba, a small 5,000 square-metre market will be set up at a cost of Dh21

million.

In addition, Khalifa City will also have another community market soon, and it will be attached to Al Raha Park.

The development will span 2,700-square metres, and cost Dh15 million.

Along with a range of retail options, the public markets will offer residents access to sports centres, recreational

and entertainment facilities and essential customer services.

Apart from community facilities, this year’s Cityscape Abu Dhabi has seen the launch of Bloom Properties’ Bloom

Towers in Jumeirah, as well as the development model and plans of Abu Dhabi’s new residential and commercial

hub, the 45-square metre Zayed City.

Master developer Aldar also revealed plans to invest Dh250 million into a new public park on Reem Island, and

real estate developer IMKAN announced Makers District, an 18-hectare mixed-use development on the island.

Source: Gulf News

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NEW COMMUNITY FACILITIES TO ENHANCE

LIVING STANDARDS IN AL DHAFRA Tuesday, April 18, 2017

A range of new community facilities will soon enhance living standards in Al Dhafra region (formerly Western

Region), the Department of Municipal Affairs and Transport (DMAT) announced in the capital Tuesday.

On the first day of Cityscape Abu Dhabi, the DMAT signed an agreement with a local private firm for the

refurbishment and extension of a Dh222 million Central Market in the Al Dhafra town of Madinat Zayed. Following

the development, the 53,000 square-metre Market will include better retail offerings, as well as a slew of

recreational facilities, a number of health centres and a cinema.

The town of Ghayathi will also soon have a new fresh-produce, meat and fish market spanning about 17,200

square metres. The Dh33.7 million development will also include gyms, children’s play area, and a cinema on its

upper levels. The project is expected to be awarded to developers soon.

Ateeq Al Mazrouei, acting director general of Al Dhafra Municipality, also called upon the private sector to take

advantage of the investment opportunities in the region. These include the refurbishment of the Ghayathi

slaughterhouse, and the development of residential projects in the towns of Mirfa and Liwa. The Municipality is

also looking for investors to develop a 52,000-square metre commercial and residential hub in Ghayathi, as well

as a project to create billboards along the Abu Dhabi-Ghuwaifat international highway.

Source: Gulf News

Back to Index




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TIME TO INVEST IN ABU DHABI Wednesday, April 19, 2017

As real estate in Abu Dhabi becomes more affordable and developers remain confident in creating real estate

products that buyers want, it may just be the right time to invest in the UAE capital. “The anticipated delivery of

new projects in the short to medium term is expected to increase investment opportunities, which in turn will

have a positive effect on transaction volumes,” says John Stevens, managing director of Asteco.

He adds: “With an expected 2,550 apartments expected to be delivered by the end of the year and 1,350 already

delivered in the first quarter, it is expected that both rental rates and sales rates will see further marginal

declines.”

According to Cavendish Maxwell research, Abu Dhabi’s supply pipeline includes nearly 3,400 units on Saadiyat

island, 5,400 units on Yas island and 8,200 upcoming units on Reem island, among other areas, expected to be

gradually handed over until 2020.

“Supply pressure will be felt more strongly on projects that are undifferentiated from the existing stock, ie offering

more of the same in terms of amenities, unit sizes and payment plans that are weighted heavily towards pre-

construction payments as opposed to post-handover,” says Manika Dhama, senior consultant at Cavendish

Maxwell. “Developers need to respond to current consumer needs through planning more efficient designs and

launching lower-priced inventory, especially options targeting end users.”

While Abu Dhabi’s economy is strongly linked to oil price stability and government spending, the real estate sector

shouldn’t wait for external factors to spur activity.

“Housing demand has been impacted by these factors, with redundancies in the oil and gas sector and mergers of

government-backed entities,” says Dhama. “Consumers are more cost-conscious today. Thus, any improvement in

transaction levels is only likely when developer offerings are adjusted to current demand dynamics, both from

regional investors and end users.”

Mid-market approach

Sameh Muhtadi, CEO of Bloom Holding, says developers should pay more attention towards addressing the mid-

market housing gap. He points to his success with Bloom Heights, a mid-market development in Dubai’s Jumeirah

Village Circle (JVC), which he says can be replicated in Abu Dhabi.

“We believe that our success selling 80 per cent within a week last year was partly due to the quality of the design,

the list of amenities and its prime location in JVC,” says Muhtadi.

At Cityscape Abu Dhabi, Bloom Holding will be showcasing its projects in the capital: Park View and Soho Square

on Saadiyat Island and Bloom Marina in Al Bateen. The Abu Dhabi-based developer is also launching another

project in JVC, Bloom Towers.

In with the new

Stevens says that already existing or under-construction projects offer quite an attractive menu for buyers to

choose from.

“The market is expected to see further corrections over the next year, followed by a stabilisation phase, with

increase in demand for good quality and competitively priced products,” says Stevens. “We’ve already witnessed




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off-plan, competitively priced villas with flexible payment plans generating interest from potential investors,

versus a decrease in demand for older stock.”

David Godchaux, CEO of Core Savills, on the other hand, points out that most buyers had been expecting further

price drops. “Even though there are very good bargains available in both the off-plan and the ready market,

buyers are not confident on taking on debt as they are uncertain of their future course, hence they are holding

back,” says Godchaux.

One reason buyers are hesitating is an anticipated interest rate hike. “Unlike some other countries, buyers in the

UAE cannot secure fixed interest rates for more than two to five years, exposing themselves to the risk of future

interest rate hikes,” Godchaux explains.

Nonetheless, as in most market cycles, there are astute investors who are looking to capitalise on the current

market conditions.

“If an end user or investor is not necessarily pressed for access to finance, an off-plan product from reputed

developers complying with regulations and nearing completion make for a potentially attractive investment,” says

Godchaux.

Abu Dhabi’s new property law, including a mandatory escrow account and developer accountability for delays,

has helped boost investor confidence.

“Initiatives, such as the recently implemented Abu Dhabi real estate law show that the government is committed

to a fair and transparent property market, encouraging local and international investment alike,” says Talal Al

Dhiyebi, Chief Development Officer of Aldar.

Where to look

Developers in Abu Dhabi are adjusting their portfolio to match demand, according to Cluttons, which is what TDIC

is doing with its Saadiyat Lagoons district, where two-bedroom town homes start at Dh2.4 million.

“Up to now the capital values of apartments on Saadiyat island have held up reasonably well, given the high

quality of the offering here,” says Faisal Durrani, partner and head of research at Cluttons. “However, sea-view

villa values have corrected sharply; we saw prices dip by 19 per cent last year.”

According to Stevens the new competitive pricing for the Saadiyat Lagoons off-plan villas, with flexible payment

plans, has piqued the interest of potential buyers.

Furthermore, Stevens says that even with the current market slowdown, Reem Island and Al Raha Beach also

remain as major areas for new investments.

For affordable property, Stevens recommends Al Reef. “It offers a community with affordable, good-quality

products, which is still recording positive demand.”

Sweet spot

According to Durrani, a sweet spot has emerged in the capital for property priced between Dh800 and 900 per

square foot. This explains why Al Reef Villas recently saw a 2.4 per cent increase to Dh850 per square foot, while

prices in Al Ghadeer Villas dropped by 5 per cent to Dh950 per square foot, according to Cluttons’ Abu Dhabi

Spring 2017 Property Market Outlook.

“This brings them slightly more in line with each other,” says Durrani. “There is a renewed focus on what is

perceived to be affordable among buyers. The added advantage of Al Reef Villas is, of course, the proximity to

Abu Dhabi island, which has in part supported the slight rise in capital values in this submarket.”




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Rents

According to Stevens, 150 villas were handed over in Abu Dhabi in the first quarter and will be followed by 750

homes by year end.

“The addition of these extra units against a backdrop of limited public spending, job cuts and a reduction in staff

allowances will see further pressure placed on the market,” Stevens cautions. The trend was especially visible at

the top end of the property spectrum, where rents have fallen sharply.

Durrani says, “This is reflecting the aversion to rented luxury accommodation, which has been exacerbated by a

slowdown in the rate of [creation of] senior-level jobs across the emirate.”

Dhama says tenants may well move from older to newer areas, provided the rental payout does not squeeze their

budgets. “Landlords may need to provide incentives to entice tenants, over and above flexibility of payment

through multiple cheques,” says Dhama. “Occupancy risk will continue in larger units as senior-level executives

remain most impacted by readjusted employee benefits, such as housing allowances.”

Core Savills predicts apartment rents to drop anther 7 per cent and villas by up to 10 per cent this year,

particularly prime units.

“In a market that is contracting, an introduction of backdated municipality tax adds further pressure on the rising

overall household costs, while the reinstatement of the 5 per cent rental cap is not relevant in the backdrop of

widespread rental drops, as a rental cap is generally applicable to keep rising rents in check,” says Godchaux.

Cluttons, for its part, expects rates to dip 5-7 per cent this year, with the top end experiencing sharper falls.

“The focus of activity is very much centred on what is perceived to be affordable, so from a developer or investor

perspective, this is definitely going to be the core focus of the market,” says Durrani. “Affordable housing is

something we have flagged before and given where we are in the current property cycle, the demand for

affordable homes is probably the strongest it has ever been.”

UAE capital plays catch up with free zones

Free zones have played a key role in the economic development of Dubai, being one of the principle tools used to

attract trade, employment and investment over the past 30 years, and facilitate the transfer of skills, knowledge

and technology. The emirate has more than 25 free-trade zones, each aimed at a different industry, including

finance (Dubai International Financial Centre), technology (Tecom), medical (Healthcare City), air freight (Dubai

Airport Free Zone Authority) and commodity trading (Dubai Multi Commodities Centre (DMCC). It is estimated that

the free zones have almost 20,000 companies employing 225,000 workers and account for more than 30 per cent

of the total GDP of Dubai. Over 35 per cent of all the office space monitored by JLL is located within free zones.

Dubai’s first free zone was Jebel Ali Free Zone (Jafza), based around the then newly developed port in Jebel Ali.

Jafza remains the largest and most important free zone in Dubai, covering an area of 10,000 hectares and

employing more than 135,000 workers at what is now the ninth largest port in the world.

It is no surprise that Abu Dhabi is also now turning to free zones as part of its strategy to diversify its economic

base. Similar to Dubai, the first free zone in Abu Dhabi, Zones Corp, which was created in 2004, is aimed at the

manufacturing and trading sector. However, unlike Jafza, this free zone is not linked directly to a major port, as

Abu Dhabi’s port-based free zone, Khalifa Industrial Zone Abu Dhabi (Kizad), was not designated until 2010.

To date, there are six designated free zones in Abu Dhabi, targeting clean technologies (Masdar), finance (Abu

Dhabi Global Market), logistics (Kizad), media (TwoFour54) and airfreight (Abu Dhabi Airport Business City). Along

with Zones Corp, these free zones have attracted more than 1,600 companies to the UAE capital.




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Free zones offer occupiers competitive advantages and in their original European context, these advantages were

largely around reduced taxation and customs duties. In the UAE’s low-tax environment, these advantages are not

as important as elsewhere, but the principle of offering a more competitive business environment has appealed

to many overseas businesses. For many such companies, the ability to operate in the UAE without a local sponsor

is the primary advantage.

-- Craig Plumb is head of research at JLL Mena.

Source: Gulf News

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ISLAMIC HOME FINANCE GOES

MAINSTREAM Wednesday, April 19, 2017

Islamic banks say a varied product portfolio and competitive pricing, in tandem with a growing number of

mortgage transactions in the UAE, are attracting consumers to their home finance products. A Unitas Consultancy

report based on Reidin data says that mortgage activity as a percentage of sales activity has doubled over the last

seven years, accounting for 55 per cent of transactions last year.

In the UAE, Islamic banking comprises a large percentage of the total mortgage activity, and many Islamic banks

offer competitive products. The penetration of Islamic banking has increased, while real estate has emerged as a

desirable asset class for these banks.

Imran Ahmad, product manager at Sharjah Islamic Bank, says, “Islamic banks are on a par with their conventional

counterparts in terms of products, flexibility and penetration. Since mortgages have a tangible underlying asset,

they work well with Islamic financing.”

According to the 2016 Islamic Banking Index by Emirates Islamic, “In 2016, just over half of banked consumers [51

per cent] have at least one Islamic banking product, an increase of four percentage points on the previous year.

Among both Muslim and non-Muslim consumers, an increased penetration of Islamic salary transfer accounts has

been observed — 51 per cent of Muslim consumers and 22 per cent of non-Muslim consumers hold an Islamic

salary transfer account, up from 47 per cent and 18 per cent respectively in 2015.”

Long-term asset

An asset-backed transaction, which ties in the customer for a long relationship, is preferred by banks. On the

other hand, the long-term relationship motivates banks to create products that are responsive to customer

needs.

Iqbal Shaikh, Head of Retail Banking, Ajman Bank, says, “Home finance, being a secured product, is definitely a

focus for Islamic banks in terms of their product offerings. Being a long-term product, home finance helps in

building up the profitability of the bank for a longer tenure. Most home finance cases are for a longer term, and

that enables the bank to maintain a relationship with the customer over a lifetime.”

Competitive pricing

Many customers in the UAE opt for Islamic finance when it appears on the top 10 lists sorted by rates on

comparison sites, indicating that, all things being equal, customers will choose according to price. “I think the

home finance solution that was offered to me was very competitive in the market and provided me with a strong

alternative to the other options out there,” says Vladislav Kiryushin, 30, adding that he opted for a 25-year Islamic

home finance as it conforms to his religious beliefs.

On comparison websites, Islamic finance products jostle for space with conventional loans, offering rates as low

as 1.79 per cent and a minimum salary of Dh7,000, with or without salary transfer. Some couple the home finance

offer with insurance, called takaful.




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According to the Islamic Banking Index, over half of the consumers are value seekers. “A key finding of the survey

continues to be that over half of respondents [51 per cent] would seek Sharia-compliant products only if the

benefits are comparable to, or better than, those offered by conventional products,” the report states.

What’s different?

Islamic banking forbids earning from riba or interest. Catering to the home finance market means getting around

the concept of mortgage and interest, and replacing it with profit. Amjad Nasser, head of Sharia at Noor Bank,

says there are basic differences in documentation between Islamic home finance and the conventional mortgage.

“The relationship between client and Islamic bank in home finance transactions is essentially not based on a

borrower-lender relationship.”

When you opt for Islamic finance when buying property, the bank does not loan money and charge interest for it.

“Most Islamic home financing falls under the term Ijara, which is more of a leasing agreement between you and

the bank,” Nasser explains. “There must be a tangible asset — the property itself — that you want to buy. The

bank pays the price of the property to the current owner, or builder, to purchase it. The [new] owner of the

property will be the bank, [which] will then lease the property out to you for a mutually agreed timeframe upon

entering the contract.

“You will be charged a certain amount every month as rental, which you will pay for the agreed period. At the end

of the tenure, you will have the ownership transferred to your name after full payment of all your obligations

towards the financing.”

He says that most Islamic home finance products are based on Ijara, and the lease contract for Islamic home

finance is known as a lease agreement ending in a transfer of ownership.

Another kind on financing called murabaha is based on sales and purchase. “This is where the bank buys a

property and sells it to you at an agreed profit,” Naser says.

Similarities

For the end user, while the names and terms may be unfamiliar, the process itself is not very different from

signing up for a conventional mortgage.

“The average turnaround time for receiving a pre-approval for home finance is within three to four days from the

application submission date,” says Shaikh. “The documentation requirements are similar to that of a non-Sharia

compliant bank, hence there is no additional paperwork or delay.”

Kiryushin says there was no noticeable difference between Islamic and conventional financing. “I did not find the

process to be any more time-consuming than a normal mortgage, in fact the approval from the bank was turned

around pretty quickly,” he says.

Islamic banks, like their conventional counterparts, also abide by the UAE Central Bank and the Al Etihad Credit

Bureau regulations when extending financing services.

More to choose from

In today’s more mature property market, banks compete to provide the best value for money to the consumer.

“The home finance market and the evolution of the home finance products has moved to mature levels within the

last few years across the industry, for both conventional and Islamic products,” says Pawan Dhawan, head of

home finance at Noor Bank. “With new players entering the home finance arena, making it their key product to

increase their book size and add to their revenue stream, it is evident that home finance product offerings have




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shown resilience during the crisis period and bounced back with a positive outlook — hand in hand with a

maturing and sustainable real estate market.”

Even as developers lure buyers with attractive terms of payment and government introducing measures to

protect consumers, banks are doing their part by tying with vetted partners.

“Like most banks, we prefer working with established developers, which include master developers such as

Emaar, Damac, Aldar, DP World, Nakheel and Meraas, as well as various other reputable developers such as

Meydan Sobha, Aldar, NBC, Aqaar, Al Seeb Properties, Al Zorah Developers, among others,” says Shaikh.

“Generally, banks prefer working with developers who have an established record of projects being completed

and handed over as per anticipated timelines.”

Ahmad says Sharjah Islamic Bank has partnered with developers in Sharjah such as Sharjah Holdings and Majid Al

Futtaim, which is developing the Al Zahia Community, and Al Thuriah Group, which is developing Sahara Towers.

Off-plan

Off-plan financing, which is in great demand in the UAE, is also available in line with the Central Bank’s guidelines,

but it may be difficult for the consumer to pay 50 per cent upfront as stipulated by law.

“We, as a financing bank, play a role when customers have completed their initial 50 per cent contribution to the

developer,” says Ahmad. “In addition to this, if there are still balance payments due to be paid to a developer

during the construction period, after the customer has paid 50 per cent, then we can pay the balance payment

and book the finance based on the payment plan stipulated in the sales and purchase agreement signed by the

customer and developer.

“Else, we generally wait until the property is ready for handover to extend our services to finance the last balance

payment to the developer due at the property completion stage.”

Source: Gulf News

Back to Index




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AHEAD OF ATM, FOCUS IS ON THREE-STARS

AND EXPERIENCES

Tuesday, April 18, 2017

To succeed, the Middle East’s travel sector must focus on experiences, according to several industry executives

assembled at a press conference on Tuesday for the Arabian Travel Market (ATM) event, taking place from April

24 to April 27 in Dubai.

Expo 2020 continues to drive growth, as Dubai aims to complete 160,000 in time to welcome an additional five

million visitors over the course of the event, said Simon Press, Senior Exhibition Director with organises ATM. This

has prompted a boom in the three-star hotel segment, and an increase in airport capacity.

One of the key trends in the industry is experiential travel, he said. This encompasses adventure, culture, heritage,

health and wellness, sports, and theme parks.

Emirates Chief Commercial Officer Thierry Antinori said at the press conference that people were looking for “a

more authentic and engaging travel experience,” whilst Emirates was focused on “meeting and exceeding

customer expectations”.

Dubai is well on track to meet its target of 20 million visitors by 2020, according to Essam Abdul Rahim Kazim, CEO

of Dubai Corporation for Tourism and Commerce Marketing, and mid-range hotels appear to be performing well

as a result.

According to Olivier Harnisch, CEO of Emaar Hospitality, the company’s entry in to the three-star market through

its Rove brand has been “simply amazing from all perspectives,” describing the numbers as “incredible”.

The next Rove hotel is set to open at the Dubai World Trade Centre in June, and the company has seven more

Rove hotels planned over the next two years, predominantly in the UAE.

They are intended to cater to a growing segment of middle class visitors that are expected to make up a large part

of the Expo 2020 visitors.

Harnisch added that these three-star hotels, in terms of the volume of properties, would make up a bigger part of

Emaar’s business in the coming years than their luxury brand, The Address.

Source: Gulf News

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EXPO CENTRE SHARJAH DISCUSSES

COOPERATION WITH ISLAMIC CENTRE FOR

DEVELOPMENT OF TRADE Monday, April 17, 2017

The importance of developing and enabling trade among Islamic countries, and members of the Organisation of

Islamic Cooperation, was discussed during a meeting between El Hassane Hzaine, Director General of the Islamic

Centre for Development of Trade (ICDT), and Saif Mohammad Al Midfa, CEO of Expo Centre Sharjah, according to

a joint statement released on Monday.

At the meeting, the attendees stressed the need for the various stakeholders to cooperate on organising joint

business exhibitions amongst all Islamic countries, in order to develop their trade relations.

Both parties also discussed the methods for developing cooperation, including organising Islamic trade fairs

serving the Halal industry.

Source: Gulf News

Back to Index




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WHAT IS THE INTERIM PROPERTY

REGISTER? Wednesday, April 19, 2017

As the viability of a development project is, in most cases, dependent on the pre-sale of a minimum number of

the real property units in the development before construction begins, there is a need to protect the interests of

those investors and purchasers entering into sale agreements and paying monies to developers prior to the

commencement and completion of building operations. The need for these protection measures led to the

establishment of the Interim Property Register and the Oqood management system in 2008.

Oqood is the management system developed, regulated and monitored by the Dubai Land Department (DLD)

through the Real Estate Regulatory Authority (Rera) to regulate off-plan sales of real property units. Off-plan sales

are the sale of real property units prior to their construction (hence off-plan) or which are still in the process of

construction.

A temporary property register

The Interim Property Register for Dubai was established by way of Law No. 13 of 2008 and is essentially the

property register within the DLD in which sale contracts of off-plan units and other off-plan legal dispositions of

real property must be registered until the construction thereof has been completed and the completion certificate

is issued to the property developer. Hence this property register is a temporary property register and thus aptly

named the Interim Property Register, as these off-plans sale units are, after completion, transferred to the DLD’s

Property Register.

The developer of a project, such as a building, may only begin to advertise and sell a real property unit off-plan

after it has fulfilled a number of important conditions in relation to the real property being developed, specifically

regarding the possession thereof, the right to develop and the approval of the project by the competent

authorities.

Any contract of sale or legal disposition that affects the ownership rights in a real property unit sold off-plan is

void unless it registered on the Interim Property Register (Oqood).

Ensuring transparency

The Oqood is more than simply a record of the real property units sold, it is designed and managed as a

comprehensive management system in which the full details of the purchaser and the real property unit, as well

as the payment terms applicable to the contract of sale are registered by the developer in the name of the

purchaser, using the Oqood online portal of the DLD.

The developer then uses the system to manage and record the payments of the registration fees and costs made

by the purchasers and the issue of receipts for such. The system is aimed at ensuring transparency in the

management of the process from the time the sale contract is registered to the ultimate completion of the project

and the issuing of the title deed in the name of the purchaser.

As the receipt of all proceeds from off-plan sales must be paid into escrow accounts approved by the DLD, the

Oqood system allows for the monitoring of these funds and regulates the usage thereof by the developer. The




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funds in the escrow account are only released to the developer upon the developer reaching certain stages of

completion.

This ensures that the funds are utilised only for the completion of the development, and an amount of five per

cent of the entire project is also retained in the escrow account for a year after completion to ensure that the

developer complies with all its commitments in respect of the project.

On registration a certificate of registration is issued in the name of the purchaser. This gives the purchaser the

security that his right to the said real property unit (provided he is not in breach of the sale contract) cannot be

sold or alienated without his knowledge while also providing the purchaser with the protections afforded by the

law in the case of cancellation of the contract.

The registration fees payable to the DLD are payable on the registration of the off-plan sale contract and are paid

by the purchaser and the seller equally unless otherwise agreed in the relevant sale agreement and which

amounts to four per cent of the contract value together with certain minimal administrative charges.

The property purchased off-plan is then transferred to the Property Register and recorded in the names of the

purchasers once the project has been completed, or once a completion certificate has been issued to the

developer, and the DLD has been provided with the required confirmation that the purchaser has paid for the

real property unit and complied with the sales contract.

The Interim Property Register and the Oqood system also provides a system for the registration of mortgages

over off-plan real property units.

The writer

John Peacock is a senior associate in the Commercial and Real Estate Department of BSA Ahmad Bin Hezeem and

Associates. The views expressed here are his own.

Source: Gulf News

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IS THE MOST EXPENSIVE PROPERTY THE

MOST UNDERPERFORMING?

Wednesday, April 19, 2017

As we move into the second quarter, the short-term prospects of the Dubai residential market appear subdued.

The rental market’s fortunes remain tied to the looming World Expo 2020. At this stage, construction contracts

worth Dh11 billion linked to the Expo are expected to be announced throughout the year, which will drive up the

rate of job creation. New jobs that follow are likely to be centred on low- to middle-income groups, which is likely

to boost competition for more affordable stock.

Top remains weak

For now, of the 32 freehold submarkets we track across the emirate, 12 have registered price declines in the first

three months. The Burj Khalifa (down 6.9 per cent) led the residential capital value declines during the first

quarter as the appetite for luxury, high-end property remains weak. With this latest change, average residential

values in the Burj Khalifa are 25 per cent down on this time last year, positioning it as the weakest performer

across the city, although values here, which stand at roughly Dh2,700 per square foot, are still among the highest

in the city.

Hattan Villas at The Lakes (down 13.5 per cent), Hattan Villas at Arabian Ranches (down 12.6 per cent), villas on

the Palm Jumeirah (down 12.3 per cent) and apartments on the Palm Jumeirah ( down 11 per cent) rounded off

the list of the five weakest-performing markets over the past 12 months.

Similarly, in the rental market, it has been at the very top end of the rental spectrum where prices have been

squeezed the most. High-end villas on the Palm Jumeirah, Jumeirah Islands, Hattan Villas at The Lakes and Hattan

Villas at Arabian Ranches have collectively seen average rents slip by nearly 20 per cent over the past 12 months.

This compares to an average decline of 9.9 per cent across the rest of the city.

These residential submarkets, particularly the villa sectors, are among the most expensive in Dubai. Their

presence on the list of the most underperforming areas in the city reflects the continued buyer focus on areas

perceived to offer the greatest value for money.

The aversion to high-end homes stems from underlying affordability issues and perhaps, more importantly,

nervousness borne out of uncertainty surrounding the health of the global economy in the wake of recent events,

including Britain’s historic decision to leave the EU, persistent weakness in oil prices, the election of Donald Trump

and the unknown impact the new US President’s policies may have on global economic growth.

Lifestyle, affordability central to price resilience

Victory Heights (Dh1,125 per square foot), Arabian Ranches (Dh1,115) and Emaar developments in Downtown

Dubai (Dh2,100) appear to have bucked this trend, with prices holding steady over the past 12 months. Clearly,

the perception of good value and the entrenchment of existing communities have aided these markets’ stability.

Although it is worth noting that over the past three years, values at Victory Heights and Arabian Ranches have

declined by 19.1 per cent and 10.3 per cent respectively, suggesting these markets may be approaching their

lowest ebb.




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Aside from the Burj Khalifa, the lifestyle and destination living appeal of Downtown Dubai has in a way insulated

the market’s performance from the fall-out of global geopolitical events, which has also spurred development

activity and new project launches in the past 12 months. However, the number of plots available inside the

Mohammad Bin Rashid loop are very limited, which will start to create a supply bottleneck in this area, suggesting

that the resilience in values in Downtown Dubai, excluding the Burj Khalifa, will persist as purchase opportunities

diminish. In fact, there was a 47 per cent drop in the number of units launched in Downtown last year, when

compared to 2015.

Off-plan still buoyant

Interestingly, the off-plan market continues to be active and was responsible for 53 per cent of all transactions

last year, according to Reidin. The banking liquidity crunch in the aftermath of the oil price collapse two years ago

appears to have subsided to a degree, which has supported the steady performance of off-plan homes. We

anticipate the off-plan market to remain upbeat, especially for schemes launched by reputable developers in and

around established communities such as Dubai Marina or Downtown Dubai.

Stability by year end

Any benefit from the World Expo on the sales market is likely to lag the rental market, however, the performance

of residential capital values is intrinsically linked to the wider regional and global macroeconomic picture. The

former is especially important given the crucial role of regional investment in Dubai’s property market landscape.

Ahead of any Expo-linked boost to demand, the sales market is expected to register further corrections of up to 5

per cent on average, with the top end of the secondary market likely to be impacted more severely. Anything

priced in excess of Dh1,800-Dh2,000 per square foot is likely to be slow to sell. There is, however, potential for

increased stability towards the end of the year.

Weak at the top

The five weakest performing markets over the last 12 months.

Burj Khalifa

Hattan Villas at The Lakes

Hattan Villas at Arabian Ranches

Villas on the Palm Jumeirah

Apartments on the Palm Jumeirah

Holding steady

Pricing in these areas have been holding steady over the last 12 months.

Victory Heights

Arabian Ranches

Emaar developments in Downtown Dubai

The writer

Faisal Durrani is head of research, Cluttons. The views expressed here are his own.

Source: Gulf News

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RAS AL KHAIMAH SEES GROWTH IN

INTERNATIONAL ARRIVALS IN FIRST

QUARTER Monday, April 17, 2017

Ras Al Khaimah experienced a jump in international visitors in the first quarter of 2017, the Ras Al Khaimah

Tourism Development Authority (RAKTDA) said in a statement on Monday.

New figures reported by RAKTDA, which develops the emirate’s tourism infrastructure and oversees its domestic

and overseas promotions, show that the overall visitor arrivals to the emirate in the first quarter grew by 8.3 per

cent year-on-year.

With domestic tourism still the single largest contributor to Ras Al Khaimah’s tourism performance, the arrivals

this year were largely driven by growth from international source markets, which recorded a 11.3 per cent year-

on-year rise over the first three months of the year.

Source: Gulf News

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FROM THE SEA TO THE DESERT: NEW

COMMUNITIES IN DUBAI Wednesday, April 19, 2017

Developers in Dubai are masters of creating communities with a twist. PW takes a look at some of these

community developments and what they offer.

Bluewaters Island

Meraas’ man-made island project is best known for the world’s largest observation wheel, Ain Dubai, but a new

residential community will flourish around it.

Bluewaters will have 17 town houses and 10 low-rise apartment buildings, which will have 698 glass-fronted one-

to four-bedroom apartments ranging from 1,150-2,500 sq ft, and four spacious five-bedroom penthouses of over

9,000 sq ft, with huge terraces and 360-degree views. Contemporary and warm in design with floor-to-ceiling

windows, the residences are set on a podium, affording the best views of Ain Dubai and the boulevard.

Residences are currently selling at Dh2,100-Dh2,600 per square foot. The island offers a pedestrian lifestyle, with

shaded walkways and water courtyards. Private facilities include swimming pools, gyms, basketball courts and

play areas. A 265m pedestrian bridge connects to Jumeirah Beach Residence, while a bridge connects directly to

Shaikh Zayed Road. Driverless vehicles will shuttle residents and visitors between the island and the Dubai Metro.

Deira Islands

Nakheel’s Deira Islands will feature residences, although not for sale. There are 2,600 one-, two- and three-

bedroom apartments in 16 residential towers, as well as more than 250 town houses up for lease. Arranged in

clusters, they will feature swimming pools and, of course, retail. Deira Islands will be a new leisure hot spot, full of

entertainment, with parks, walkways and even a water park.

Dubai Creek Harbour

Staying with the island lifestyle theme, although this one’s inland. Harbour Gate is the latest community launched

within Dubai Creek Harbour’s Island District. To be completed by summer 2020, it will have 491 one-, two- and

three-bedroom apartments featuring huge balconies. Six duplex town houses are on the podium level, which will

become a social hub with retail, eateries, a teen’s room, fitness centre and indoor and outdoor children’s play

area.

Residents will live right at the gateway of the Island District, close to the boardwalk, marina and Vida Hotel. A

range of food and beverage, retail and leisure attractions make Harbour Gate a vibrant neighbourhood, says

Ahmad Al Matroushi, managing director of Emaar Properties.

Dubai Creek Harbour also features previously launched residential offerings, including Harbour Views, Creekside

18, Creek Residences, Creek Horizon and The Cove.

City Walk: urbanity in the city




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As the name indicates City Walk in Jumeirah is fast becoming an enclave of an ultimate pedestrian lifestyle within

Dubai. Residents will be able to enjoy low-rise retail arcades, as well as a huge park. The apartments are set within

34 five- and six-storey pavilion-style buildings.

Town Square: urbanity in the desert

A little further out along Al Qudra Road, Nshama is creating an urban lifestyle with the 750-acre Town Square. A

central square will provide the hustle and bustle of an urban lifestyle, complete with shopping, gastronomy

centres, a Vida Hotel and Reel Cinema.

The development features mid-rise apartment buildings and town house communities set in green enclaves,

fostering social activities and wellness where residents can jog or ride bicycles on trails, or simply playing in the

central park.

Around 5,000 units are under construction, and the first batch of 2,000 units will be handed over this year. The

latest among the Town Square offerings are the three- and four-bedroom Noor town houses, distributed in three

neighbourhoods with a community club.

Others that have been launched are 730 town homes in Hayat, 320 town houses in Zahra, 546 apartments in

Zahra and 618 apartments in Zahra Breeze Apartments. Another 658 homes in Jenna, Warda, Hayat Boulevard

and Safi are also under way.

Apart from quality contemporary designs, Town Square is popular because of its affordable prices and payment

plans. For the apartments, 80 per cent is due on handover. Several apartments will be delivered this year and next

year.

Al Habtoor Polo Resort & Club: Nature and luxury for rent

Another community inspired by nature, Al Habtoor Polo Resort and Club is an equestrian community features 122

three- to five-bedroom villas.

Located in Dubailand, along Emirates Road, the community also features 25 homes branded by St Regis, which

operates an Andalusian-style hotel in the development. The design fosters light-bathed open-plan living, floor-to-

ceiling windows and a touch of Italian in fully equipped kitchens. The villas are only for rent, starting at Dh220,000

per year for a three-bedder, Dh240,000 for a four-bedder and Dh350,000 for a five-bedder. All homes come with a

maid’s room; the bigger units have their own pool.

“The villas are now available for rent,” says Sanjeev Agarwala, chief operating officer of Habtoor Hospitality and Al

Habtoor Investments, adding that the handover of houses started early this month.

“We want to keep them within our real estate portfolio, as the villas are very lucrative, there are only a limited

amount of them, and there is a lot of demand. The residential aspect of the resort provides residents with a lot of

benefits from the adjoining resort and club.”

The gated community comes with gyms, pool and spa and tennis courts. While it will surely appeal to horse

owners, offering dressage and show-jumping arenas, 520 stables and a veterinary clinic, it could equally appeal to

those who simply look for a serene place to live.

“Space and greenery are generous compared with other communities, and it has character with winding roads

and contours,” says Agarwala.

The developer also offers a 24-hour maintenance service to residents.




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“This is a community designed for young families and professionals who enjoy a sporty, outdoor lifestyle,” says

Helen Tatham, managing partner of Prime Place, the exclusive agent.

Reem Community: A villa community designed to fit the desert

Across the road from Town Square, lies Emaar’s Reem community, promising a fun lifestyle in the desert, thanks

to unique features, including a dune and desert botanical garden, a rock climbing wall, sand surfing, camel riding

trails, camp sites, dune buggies, as well as go-kart, skate and water parks.

A central park has interactive fountains and walkways, as well as a retail and restaurant plaza. Clubs, nurseries,

schools, mosques, cricket and football pitches, a mini golf course and a movie amphitheatre make this an active

community.

Three phases of the Mira town homes have been handed over. Many are up for rent and the best part is they are

still relatively affordable.

Dubai South: To the other side of town

Dubai South’s residential offerings, The Pulse and The Villages, are based on the principles of providing happiness

and wellbeing to residents. Other residential options in Dubai South include MAG PD’s affordable MAG 5

Boulevard apartment community and the Emaar South golf district. Other community developments are likely to

spring up, in what is bound to become another popular destination in Dubai close to the Al Maktoum

International Airport and the World Expo 2020 site.

Emaar South will be a smart and green community with an urban touch, housing 15,000 residences, including

apartments, town houses and villas. It will have tree-lined boulevards and cycling trails, as well as “green”

transport. There will be a golf course, hotels and a school.

Source: Gulf News

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MUBADALA REAL ESTATE UNVEILS

ARZANAH PROJECT IN ABU DHABI Tuesday, April 18, 2017

Mubadala Real Estate and Infrastructure unveiled the master plan for Arzanah, a new community development

near Zayed Sports City in Abu Dhabi. The 1.9 million square meter development will include residential, retail,

hotels, education, sports, and health care offerings, and will be located at the gateway point to the Capital, a top

executive of Mubadala said on Tuesday.

“Historically we were focusing on the development of Al Maryah Island. Now we are introducing a new project

which is the redevelopment of Zayed Sports City. This project will keep us busy in the next ten years and will

further drive the growth of Abu Dhabi’s retail, health care, residential, entertainment and hospitality sectors,” said

Ali Eid Al Mheiri, Executive Director of Mubadala Real Estate and Infrastructure speaking to Gulf News on the

sidelines of Cityscape Abu Dhabi. The total investment in the project is not known.

From a retail perspective, the plan include a 316,918 square meter indoor shopping Centre, which will house a

bowling alley and ice rink, and other family-focused entertainment elements.

In addition, investment plots are available for school developments by third party developers, he said.

Speaking on Al Maryah Island, he said they are continuing with leasing and sales activity on the island.

“We have four commercial towers on Al Maryah Island. Two of them are almost full and two are being leased right

now. Al Maryah Central shopping mall is under construction. “

The company has recently announced an agreement with Eshraq Properties to explore partnership in developing

plots owned by Mubadala on Al Maryah Island and by Eshraq Properties on Al Reem Island.

“We are creating a partnership to develop something good. The cooperation with private sector is very important

and we would like to encourage it as much as possible,” he said on the partnership.

Mubadala Real Estate and Infrastructure is a real estate arm of Mubadala Development Company which is being

merged with International Petroleum Investment Company.

Source: Gulf News

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TDIC SAYS PROJECTS ON TRACK WITH

CONSTRUCTION IN FULL SWING Tuesday, April 18, 2017

The Tourism Development and Investment Company (TDIC), a real estate company owned by the government of

Abu Dhabi announced that all their projects are on track with construction activity in full swing.

Speaking to reporters at Cityscape Abu Dhabi on Tuesday, chief executive officer of the company Sufian Hassan Al

Marzouqi said Mamsha Saadiyat with 241 residential apartments is 30 per cent complete whereas Jawaher

Saadiyat with 83 units is 20 per cent complete.

The company’s other project Saadiyat Lagoons is in a tendering stage.

Mamsha Al Saadiyat overseeing the beachfront is close to Guggeinham, Louvre and Shaikh Zayed museums, he

said.

“The project is under construction and is set to be opened in June 2018. The total investment in the project is

Dh1.2 billion and has apartments ranging from one to four bedrooms with retail space for food and beverage

outlets.”

Jawaher Saadiyat is a golf community project consisting of townhouses and six bedroom villas. The total

investment in the project is Dh370 million and is expected to be opened in August 2018.

Al Marzouqi said the third project of the company — Lagoons — will be a mid-market housing project with prices

ranging from Dh2.6 million to Dh3.9 million per unit.

More than 800 townhouses will be built as part of the Lagoons project, he said.

“We are reviewing mid-market segment as there is a high demand. That’s an area where we want to tap in like

other developers. We are conducting a study on affordable housing to take up more projects.”

Speaking on Abu Dhabi’s property sector, he said it is going through correction and the outlook is positive.

“In real estate you have to go through this otherwise something is wrong. The property sector is in a correction

stage and we are positive about the sector.”

On museum projects of the company, he said Guggeinham is not on hold and Louvre will be handed over to

Tourism and Culture Authority of Abu Dhabi this year. He did not specify the date when Louvre would be handed

over to TCA.

The real estate company also launched a premier selection of residential units across three projects on Saadiyat

Island under a new flexible payment schedule on the first day of Cityscape Abu Dhabi 2017.

Potential investors and homeowners can secure their unit with a deposit of 2.5 per cent of the unit sales price for

the 50 apartments available for purchase in Mamsha Al Saadiyat, the company said.

The same terms have been extended for 29 contemporary villas on sale in the Saadiyat Beach Golf Club-facing

Jawaher Saadiyat, as well as more than 30 units in Saadiyat Lagoons.

Source: Gulf News




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SUSTAINABLE CITY RATED DUBAI’S

‘HAPPIEST’ COMMUNITY Tuesday, April 18, 2017

The Sustainable City by Diamond Developers has been named the “happiest community” in Dubai at the first Gulf

Real Estate Awards instituted by the Dubai Land Department.

The best master-development laurels went to Damac Properties for its Akoya cluster and the top prize for

residential luxury went to Al Barari.

The best project in the hotel category was picked up by Enshaa and its Palazzo Versace in Culture Village. And the

top pick in the retail category was the Al Mouj in Muscat.

Sustainable City, located within Dubailand. And Diamond Developers also won for being the most “green” among

projects. Saudi Arabia’s Dar Wa Emaar’s was rated as having the most affordable housing development.

The awards — announced earlier this year — are the first from a government department in the UAE. And the

scope of the awards also extended to Gulf-based developers. More than 150 submissions were received.

“We would like to assure all our partners that the awards will continue to evolve year after year in line with

Dubai’s growing status, and confirming the emirate as a centre of global real estate innovation. We can guarantee

this through our adoption of the highest standards during the planning and implementation of all stages of the

programme, from receiving the nominations and undertaking the screening process, to selecting the winners and

announcing the results,” said Sultan Butti Bin Mejren, Director-General of Dubai Land Department.

Dubai Real Estate Institute, the educational arm of Land Department, had signed an agreement with Awards

International at Cityscape Global last year for the awards programme.

There were wins for Hopkins Architects for its commercial offices submission and for Luxury Owner Association

Management for being the best owners association manager. In all there were 20 categories.

According to Mark Hamill, Managing Director for Awards International UAE, “It’s important professionals have one

standout event giving all companies, big and small, an equal chance of recognition. Having a fully transparent

awards process makes this event special — knowing you’ve beaten the best on merit alone does wonders for

individuals and companies.”

Kaizen Asset Management was rated as being the best employer in the real estate space, while the most

“innovative” marketing campaign was led by SPF Realty.

The best mortgage provider award went to National Bonds Corporation and the outstanding architecture was

won by Bin Ghatti Developers.

Source: Gulf News

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TOP DEVELOPERS AMONG 100+

EXHIBITORS AT CITYSCAPE ABU DHABI Tuesday, April 18, 2017

Developers in the UAE are showcasing a range of new property developments and are aiming to capitalize on

growing demand for mid-market accommodation as Cityscape Abu Dhabi kicks off.

The event runs till April 20 at the Abu Dhabi National Exhibition Centre (Adnec), and brings together over 100

exhibitors.

These include major developers such as Aldar Properties, Tourism Development an Investment Company (TDIC),

Bloom Properties, Abu Dhabi Urban Planning Council, and Eshraq Properties, among others.

Developers have already announced new projects that they are showcasing at the property exhibition.

Aldar Properties, for example, announced on Monday the launch of The Bridges, a 1,272-unit, Dh1.3 billion mid-

market development.

Bloom Properties also unveiled Bloom Towers, a mid-market residential development in Dubai’s Jumeirah Village

Circle.

The new property launches come amid softening demand across the UAE as investor sentiment weakens on the

back of slower economic growth and lower oil prices.

A recent report from property advisory JLL said that further declines are expected in certain sub-sectors over

2017.

Cityscape Abu Dhabi was officially opened on Tuesday by Shaikh Hazza Bin Zayed Al Nahyan, vice chairman of the

Abu Dhabi Executive Council.

Source: Gulf News

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ABU DHABI PROPERTY AT A GLANCE Tuesday, April 18, 2017

Where do I put my money?

John Stevens, Managing Director of property managers Asteco, offers his view on the top areas to look at in Abu

Dhabi:

“Depending on type, quality and location, all investment areas in Abu Dhabi — including Al Raha Beach (pictured),

Saadiyat Island, Reem Island and Yas Island — comprise both complete and under construction projects of

different quality, type and prices.

“TDIC’s Lagoons project is offering competitive pricing for off-plan villas with flexible payment plans, which is in

turn piquing the interest of potential buyers.

“Even with current market slowdown, Reem Island and Al Raha Beach remain major areas for new investments.

“Yas Island includes prime products — with the exception of few high-quality projects — that have seen positive

demand.

Forecast: Early clouds give way to sunny days

Haymaking season is still a while away, says Arlene Jimenea, Senior Research Analyst, CBRE Middle East

Through 2017 prices are likely to continue on a downward trajectory, the mood perking up over the next couple

of years. “Despite improvements in average oil prices in the first quarter, there are still no apparent major

demand generators that might significantly alter the current downward trend on rents.

“In the sales market, prices are likely to level off as more investors will likely opt to hold properties in light of low

transaction activities and weak market sentiment.”

Over the medium term (2018-2020), the outlook remains positive on the back of growth estimates of 3.5-3.7 per

cent by Abu Dhabi’s department of economic development. “The forecast growth is highly anchored on the

continued robustness of the non-oil sector, with estimated growth rate of

6-8 per cent during the same period,” Jimenea says, but warns that market saturation remains a risk.

Five factors that are affecting the sector

Lukman Hajje, Chief Operating Officer of real estate portal Propertyfinder.ae, says there are several powerful

factors shaping the property market. We asked what’s on his list

1. Expo 2020

The much-anticipated event has this year alone seen 47 construction contracts worth more than Dh11 billion

awarded within the Expo site. “Microeconomics is about to witness a housing boom over the next three years,

with prices rising and buyers pouncing on opportunities in 2017 to materialise their investments by 2020,” Hajje

explains.

2. New supply

A host of new launches has been announced in Abu Dhabi and Dubai. Hajje cites the examples of powerhouses

such as Sobha Group and Riviera Group in Dubai and Aldar in Abu Dhabi, all of which will deliver residential units




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this year. In Abu Dhabi in particular, look towards Aldar’s Mayan luxury development on Yas Island, being

developed at a cost of Dh500 million.

3. VAT

The three letters on all our minds stand for a 5 per cent value-added tax the UAE plans to roll out from January.

Details are still hazy, but Hajje says we can look to other countries: “Commercial properties may be taxed, and

first sales of residential properties may include VAT too. This real estate market will need to start changing its

administration processes and compliance procedures will need to adapt to the taxation system.”

4. New visa policies

The UAE recently implemented a visa-on-arrival policy for Russian and Chinese citizens, Hajje says. “This was due

to more than one million collective visitors from both countries within the past year. The new visa regulation is

expected to boost tourism and that is an obvious and natural trigger for real estate investments.”

5. Indian buyers

India’s roaring economy has enriched its middle class, who are now considering opportunities in the UAE. “India

invested Dh12 billion in Dubai property last year, which makes it the biggest expat investor. Now that India’s

demonetisation policy has rocked its country, more citizens are expected to further buy into the UAE property

sector and reap the benefits,” Hajje says.

The 5 per cent rent cap

Ivana Gazivoda Vucinic, Head of Advisory & Research at Chestertons Mena, says the move will help stabilise the

property sector

In December, Abu Dhabi reinstated a rent cap of 5 per cent on all residential properties. “However, given current

market conditions, many landlords are keen to ensure their properties are occupied, [and] are unlikely to increase

or ask for anything above current market rates. When the market starts to pick up, which we estimate to be in

2018, the cap will ensure tenants can forecast their expenses and price fluctuations remain minimal," says

Vucinic.

“For affordable products, Al Reef offers a community with affordable good-quality products that are still recording

positive demand.”

Source: Gulf News

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NAKHEEL BREAKS GROUND ON DH176M

HOTEL Monday, April 17, 2017

Nakheel, the Dubai-based property developer, on Monday broke ground on a new Dh176 million hotel at Dragon

City.

The 304-room Premier Inn property will be Nakheel’s second hotel at Dragon City, and is set for delivery in 2019.

The hotel has a built up area of 178,000 square feet, and will have a restaurant, a gym, and a Costa coffee shop.

The ground breaking comes less than two weeks after Nakheel awarded a contract worth Dh136 million to Al

Ghurair Contracting and Engineering Works to build the hotel.

Source: Gulf News

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IN ABU DHABI, NEW APARTMENTS OFFER

THE BEST DEALS Monday, April 17, 2017

The best rental deals on residences in Abu Dhabi could be on the new one ones as landlords ramp up on

incentives. Market dynamics also had a hand in keeping rentals on new deliveries within a tight range.

“The delivery of 2,700 new apartments over the last 15 months put further pressure on rental rates,” states the

first quarter update from Asteco, the marketing services firm.

Consequently, the “majority of new supply was offered below prevailing rates to facilitate a higher take-up.”

Interestingly, as many handovers – 1,350 units — took place in the first three months of this year as in the whole

of last year, according to latest industry data. By the year-end, it is expected developers will have delivered 2,550

apartments.

They have to — as rents in Abu Dhabi remain under extreme duress, particularly at the top end of the residential

leasing space.

On many counts, the level of stress on asking rents is much higher than what landlords in Dubai’s freehold zones

are facing.

What is remarkable about Abu Dhabi is that it is happening within a much lower residential base.

Largest drop

High-end units recorded the largest drop with 12 per cent on average in the last 12 months, while for the wider

home leasing space it was by 8 per cent, Asteco adds.

The state of the job market was particularly felt, as “limited public spending, job cuts and a reduction in staff

allowances continued to affect sentiment.”

Landlords are facing a stark choice — stick to their demands and see their tenants moving out and having to keep

the units unoccupied for longer.

Or they can give in to market forces and sign up tenants for the best they can get under the circumstances.

Tenants were “negotiating favourable leasing conditions as budgets were reined in, due to economic uncertainty

and overall employment prospects,” said John Stevens, managing director, Asteco.

But even among the general flux, there were some linings that lent hope.

Villa rentals “put up a slightly better performance” with declines limited to 5 per cent over the last 12 months and

a marginal 2 per cent for the first quarter, the report finds.

This, it attributes, to low demand and limited availability of quality units. Villas in communities such as Al Raha

Gardens and lower end units on Abu Dhabi Island were down by up to 12 per cent.

Things will remain just as tight on the sales side. New mid-market launches could bring back buyers and end-

users, but for any sales upturn to extend to all property classes might be a stretch.




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“This quarter (January to March) has underscored the existing trend that 2017 will be challenging,” said Stevens.

“We expect to see further corrections, but with a marked increase in demand for good quality and competitively

priced products as the appetite for older stock fades.

“Indeed, we’ve already witnessed off-plan, well-priced villas with flexible payment plans, such as TDIC’s Lagoons

projects, generating interest from potential investors.”

New offices: Burdened by vacancy

Office tenants in Abu Dhabi seem to be staying put. They are showing no inclination to upgrade or seek better

locations for their premises, causing lease rates to drop 10 per cent compared with the first quarter.

On a quarter-on-quarter basis, the decline is 2 per cent, according to Asteco.

“Buildings with limited parking and larger floor areas struggled and landlords continued to sub-divide units and

offered reduced rates and incentives to entice tenants,” the report says.

“Rentals in older Grade B buildings ranged from Dh650-Dh930 a square metre, whilst fitted space in new prime

buildings achieved Dh1,800 per square metre on average.”

Three prime office towers are expected to be handed over in 2017, including the ADIB Headquarters building on

Airport Road, as well as Leaf Tower and Omega Tower both located on Reem Island, together adding

approximately 180,000 square metres of Grade A stock.

Supply completed in 2016 was 84,000 square metres.

Source: Gulf News

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BARCLAY BROTHERS BID FOR GROSVENOR

HOUSE HOTEL: TIMES Sunday, April 16, 2017

David and Frederick Barclay, the billionaire owners of the Daily Telegraph, bid more than £600 million (Dh2.7

billion, $751 million) for London’s Grosvenor House hotel, the Sunday Times reported, citing a person with

knowledge of the matter that it didn’t identify.

The property was put up for sale three years ago by its current owner, the Sahara Group. The company is

controlled by Indian businessman Subrata Roy, who was imprisoned in early 2014 for allegedly defrauding

investors and released on parole. The Times said Roy must raise £1.3 billion in bail and has a deadline of Monday

to deposit several hundred million pounds to the Indian regulator.

Sahara also owns majority stakes in New York’s Plaza and Dream Downtown hotels. In July, 3 Associates Capital

Management Ltd, an investment vehicle of several wealthy UK families, and two Middle Eastern partners

submitted a $1.3 billion bid for Grosvenor House and the two New York stakes, a bid hampered by the complexity

of the financing behind the hotels, the Times said.

The Barclay brothers are only interested in buying Grosvenor House, a luxury hotel operated under the JW

Marriott brand next to Hyde Park in London’s Mayfair neighbourhood, the Times said. The talks may fail to

produce a deal given the messy sales process, the newspaper cited the person as saying.

Source: Gulf News

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ATKINS BOARD AGREES TO £2.1BN

TAKEOVER APPROACH FROM CANADA’S

SNC LAVALIN Sunday, April 23, 2017

The board of the UK-based construction consultancy Atkins has accepted a £2.1 billion (Dh9.88bn) offer for its

business from SNC Lavalin, a Canadian construction and engineering group.

The offer, which was first announced this month, values Atkins at £20.80 per share, a 35 per cent premium on the

£15.40 price that the shares closed at on the day before the news broke.

In a statement on Friday, SNC Lavalin said the merger would create a business with revenues of C$12.1bn

(Dh32.92bn) and 53,000 employees worldwide. It also said it expects to generate C$120 million in savings by

combining the two businesses, C$80m of which is expected to come from Atkins.

Atkins and SNC Lavalin have a significant presence in the Middle East, and the combined business will have more

employees in the wider Middle East and Africa than any other global region – 19,625. The company said it expects

to generate about 20 per cent of its business from this region once the deal is completed.

In an interview with The National in July last year, SNC Lavalin’s regional chief executive Alan McLean said it

employs about 11,000 staff in the Middle East and generates about 15 per cent of its revenue from the region.

Most of these staff are contractors who had previously worked for the Kentz business acquired by SNC Lavalin for

£1.2bn in 2014, and the energy sector remains its biggest source of regional revenue, followed by infrastructure

projects.

Atkins employs 2,400 people in the Middle East and earns 14 per cent of its global revenue of £2bn from this

region. It is working on projects such as four new economic cities in Saudi Arabia for the Economic Cities

Authority, the Riyadh and Doha metro projects, and the Port Sultan Qaboos redevelopment in Oman.

Neil Bruce, the president and chief executive of SNC Lavalin, said the takeover "creates new revenue growth

opportunities in key geographies by positioning us to capitalise on increased cross-selling and the opportunity to

win and deliver major projects in new regions".

He said it would "position us as a premier partner to public and private sector clients".

Allan Cook, the chairman of Atkins, said SNC Lavalin’s offer represented "an attractive and certain value in cash

for Atkins shareholders, reflecting the high quality of the business".

The world of construction and engineering consultancies has undergone a wave of consolidation in recent years

as firms bid to build global scale. Aecom completed a US$6bn takeover of rival firm URS in October 2014, the

same month WSP completed an £820m buyout of the US-based consultancy Parsons Brinckerhoff from the British

contractor Balfour Beatty. The Dutch-headquartered consultancy Arcadis has also acquired Hyder and the project

management firm EC Harris in recent years, while the world’s third-biggest consultancy, WorleyParsons, last

month announced that it had recently rebuffed a takeover offer from Dubai-based Dar Group. The Dar Group has

retained a 13.45 per cent stake in WorleyParsons.




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SNC Lavalin’s takeover of Atkins is expected to be completed in the third quarter of this year.


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DAMAC TO BUILD 2,000-ROOM HOTEL

OVERLOOKING AKOYA OXYGEN GOLF

COURSE Sunday, April 23, 2017

Damac Properties has announced plans to build a five-tower hotel comprising 2,000 hotel rooms overlooking its

planned Trump branded golf course at Akoya Oxygen.

The Dubai-listed developer known for its high-profile tie- up with the US president Donald Trump’s golf course

operation, is marketing the hotel rooms to investors as off-plan investments at this week’s Arabian Travel Market

exhibition.

Off-plan prices for hotel room units in the project start at Dh395,000, payable over five years, according to

Damac’s website.

"Investors will be pleased with the opportunity to own a hotel room on an international golf course that reaps

higher returns than any other investment classes," said Niall McLoughlin, the senior vice president for Damac.

"Owning a hospitality unit provides an attractive return on investment due to the burgeoning tourism industry

and potential revenues that can be generated."

Estimating hotel yields in Dubai is not always straightforward as the idea of selling off individual rooms to

investors is fairly new in the region, while existing hotels are often owned by private investors who seldom

disclose the prices they paid for the properties.

Last year, Damac marketed freehold hotel rooms in its Aykon City development on Sheikh Zayed Road starting at

Dh800,000, saying that they would provide an estimated 10 per cent return on investment.

At the same time Bayut.com reported that studio flats in Dubai Silicon Oasis offered an 11 per cent return, while

yields for studio flats in Dubai Sports City stood at 10 per cent.

Cluttons estimated that office yields in Dubai can range from 6.5 to 9 per cent, while workers’ accommodation can

offer yields of between 10 and 20 per cent.

According to Dubai’s Department of Tourism and Commerce Marketing, the number of overnight visitors coming

to Dubai last year increased 5 per cent to 14.9 million, despite the strength of the US dollar making it more

expensive for many overseas visitors. However, the amount of money tourists paid each night fell by about 5 per

cent.

And, with CBRE estimating that another 35,000 hotel rooms and serviced apartments are due to be delivered

before the end of 2019, analysts expect room rates to continue to fall.


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IMKAN STARTS THE ARTERY AT MAKERS’

DISTRICT ON REEM ISLAND Saturday, April 22, 2017

The development company set up to deliver the Dh12 billion Makers’ District, planned for Abu Dhabi’s Reem

Island, has said The Artery structure being built to kick-start the project could be replicated at proposed sister

sites in Egypt, Morocco, Montenegro and Brazil.

Walid El Hindi, the managing director of the Abu Dhabi Capital Group-owned developer Imkan, described the

Dh100 million structure unveiled at last week’s Cityscape Abu Dhabi as "like the seed for creating the project’s

soul", which is a rather grand way of describing a structure that has been designed, at least in part, as one of the

district’s car parks.

The seven-storey, domed structure has a central atrium that will serve as a performance space. Around the

outside are two interlocking ramps scaling the entire height of the building.

One of these will be used for car parking for the first phase of the Makers’ District, but the other will be filled with

creative spaces and workshops for use by local artists and craftspeople.

"It’s a brilliant idea," said Mr El Hindi, who joined Abu Dhabi Capital Group two years ago following his resignation

as chief development officer of Emaar Misr shortly after its flotation.

"The brief was very difficult," he said. "We want a parking structure but at the same time we wanted an events

space. The two spirals going up – just like the DNA spirals that are intertwined but never meet – that’s the

concept. You have one spiral for artists and one spiral for cars."

Work will begin on the project within five months, coinciding with the construction of 12 other buildings making

up phase one of Makers’ District, including apartments and office space – all of which are due for completion by

2020.

Over the project’s entire lifespan, more than 4,000 homes and 100,000 square metres of office space will be built,

alongside food & beverage units, an "art hotel" and a small marina.

Mr El Hindi said about two years’ worth of research has gone into the Makers’ District concept, which is targeted

at millennials. Office space will be geared towards smaller, creative companies and apartment units to younger

buyers, including families.

Abu Dhabi is the first Makers’ District that will be brought to market and Mr El Hindi said despite the Emirate’s

focus on culture through developments such as the Louvre, he believes there is a gap in terms of spaces for those

looking to create art, rather than display it.

"We identified the gap and we identified it in different places in the world," he said. "We’re already working on a

Makers’ District in Rabat, Morocco. We’re working on the Makers’ District in Cairo, Sao Paulo, Montenegro … We’re

really taking this concept worldwide and we want to connect all of these districts."

He said each of these could be kick-started by a development similar to The Artery.




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"The Artery is a brand right now. Maybe there will be an Artery in each one, but there will definitely be the ‘seed’ in

each of those projects."

According to the property consultancy Cavendish Maxwell, apartment prices on Reem Island remained flat in the

first quarter of 2017 and are only 1 per cent lower year-on-year.

However, more new apartments are planned for Reem Island by the end of 2020 than any other investment zone

in the city. Of the 35,000 apartments set for delivery from 2017-2020, 8,200 are due to be built at Reem Island.


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YEARS



ABU DHABI MUNICIPALITY SIGNS DEALS

WITH DEVELOPERS FOR FOUR COMMUNITY

MALLS Thursday, April 20, 2017

Abu Dhabi Municipality has signed new deals with developers who are set to bring forward community malls at

separate sites in the emirate.

The municipality signed deals on Wednesday with Abu Dhabi-based developers City Lights and Persistence for

Property Development (Persistence), according to the head of investment Jassim Al Dhaheri. These were for new

"community markets" in Al Wathba, Al Shamkha and Yas Island. City Lights will build the malls in Al Wathba and Al

Shamkha, and Persistence will build the Yas project.

The deals have been signed under build, operate, transfer (BOT) agreements, with developers holding the plots

for a 32-year term. They will have two years to build the malls and then a 30-year operating period before

eventually handing them back to the municipality.

"They are all almost the same size," said Mr Al Dhaheri. "They usually have an anchor supermarket, retail shops,

coffee shops and some community service provisions. Also, where applicable, or where needed, we provide locals

with government service counters to save them the hassle of travelling further."

The Yas Island mall being developed is a 13,281 square metre retail centre on a 22,136 sq metre plot which will be

within the existing villa community for Emiratis that currently exists in the area.

Mr Al Dhaheri said "our plan in total is to have 38 community markets. It depends on the developments and

where they are mostly needed".

Three more deals, including a further community mall and two small marina areas for boats and jet skis at Al Sadr

and Al Bahya, were signed yesterday.

The mooring facilities and associated buildings at Al Sadr and Al Bahya will be developed by Emirates Investment

Corporation (EMIC), while a smaller community market with a gross floor area of 2,700 square metres will be

developed at Al Raha Gardens by Cornerstone Real Estate.

Mr Al Dhaheri said the signings follow four earlier agreements for community malls, including sites at Mohammed

bin Zayed City and at Shakhbout City. He said that the municipality has used a tender processes to choose

developers, with firms providing the best technical specifications and commercial terms generally picking up the

BOT contracts. He said that there had been "huge interest" in the community mall projects tendered thus far.

Riyad Al Halabi, general manager of Persistence, said that its project will contain a supermarket, community

services such as a gym and a nursery, a municipality service centre and other shops. He argued there would be "a

high demand" for the project not only from residents in the existing Yas Island villa community but also from the

nearby Yas Acres project, where Aldar Properties is bringing forward more than 1,300 villas.




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"If you are living in this community and you want to purchase bread, cheese … you should not go to Yas Mall and

spend time for parking. We are talking here about the basics. You need nurseries, you need a gym."

He said that the Yas community mall would cost about Dh70 million to build and be completed by the end of

2019.


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PROGRESS MADE ON ZAYED CITY

DEVELOPMENT IN ABU DHABI Thursday, April 20, 2017

Work is pressing ahead at the long-awaited Zayed City, a 49 square kilometres development originally intended to

become Abu Dhabi’s second capital.

Speaking at Cityscape Abu Dhabi this week, Abdulla Al Sahi, executive director for planning and infrastructure at

the Urban Planning Council (UPC), said that the Abu Dhabi Government has approved about Dh3.5 billion for the

construction of infrastructure for an Emirati housing development which will eventually comprise 3,000 villas and

for further infrastructure works at a medium-density neighbourhood in the south- west of the project.

The UPC said that infrastructure work on the project’s first neighbourhood of land plots for villas was now 20 per

cent complete and was due to be finished in 2019.

It added that work on the 3.8 million square metres South Spine neighbourhood, due to comprise 4.6 million sq

metres of housing, 198,000 sq metres of offices and 273,000 sq metres of shops, had also been approved and

would be completed in 2019.

Zayed City, which was originally known as Capital District and later New Khalifa City and is located in a triangle

between Khalifa City A, Khalifa City B and Mohammed bin Zayed City, will eventually house 300,000 people and

325,000 workers.

Mr Al Sahi said that parcels of land in the master plan have been granted to various entities including developers

and government bodies as well as individual Emiratis.

Local property brokers say that the different ownerships of the land has made the project relatively complex, with

influential landowners lobbying for work to start despite demand for most property types in Abu Dhabi currently

being soft.

According to the UPC, plans for the project include 15.2 million sq metres of residential, 890,000 sq metres of

offices, 802,000 sq metres of retail, 2.7 million sq metres of government buildings, 203,000 sq metres of mosques

and 2.1 million sq metres of schools.

However, Mr Al Sahi said these figures could change over time as the market evolved.

"We’re talking about a 20 years project," he said.

In October the Abu Dhabi Executive Council approved nearly Dh6bn worth of development projects in Abu Dhabi

emirate including a Dh1bn construction package for Zayed City.

Plans for its Grand District were originally drawn up between February 2008 and March 2009 and include a

central Federal Precinct to serve as the UAE’s national seat of government, and a central space hosting seven

Grand Boulevards that represent the seven emirates.

In November 2013 the Abu Dhabi government services company Musanada said it was close to ordering work to

begin on a first phase of Emirati housing, comprising 2,723 villa plots, which it said would be completed in about

two years.




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A second phase would be completed in about 27 months, while a third phase would also take about two years to

complete, it said at the time.

Mr Al Sahi said the time taken to complete Zayed City was not as important as the fact that there is a commitment

to see the project through.

"This is a huge area. It’s half the size of Abu Dhabi island. Construction could take years and years," Mr Al Sahi

said.

"It will be a new area to support the existing area that is Abu Dhabi island. This is our vision and this is what our

leadership gave us in 2008 and still we are working towards this."


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YEARS



SAADIYAT ISLAND RESORT DEAL AWARDED

TO HILL INTERNATIONAL Thursday, April 20, 2017

The US project management firm Hill International has won a one-year contract to provide construction

management for a new resort development at Saadiyat Island in Abu Dhabi.

The company said the contract has been awarded by Sheikh Suroor Projects Department, on behalf of Sheikh

Suroor bin Mohammed Al Nahyan.

Hill International said that the deal was worth Dh7 million and covers the management of a resort on a 113,000

square metre site containing a 293-room hotel. The resort’s operator was not named.

Hill International is already working at Saadiyat Island, having picked up a two-year deal in April 2016 to manage

construction of the 374-room Rixos Saadiyat Island Hotel in a joint venture with Ehaf Consulting Engineers. That

deal was worth Dh13.8m. "Saadiyat Island will be an incredible destination for visitors to the region," said

Mohammed Al Rais, the Middle East president for Hill International’s project management business.

"This new resort development for Sheikh Suroor will become one of the premier hospitality destinations on the

island."

This month Hill Interntional reported a net loss of US$18.8 million for 2016, compared with a net profit of $6.9m a

year earlier. Almost $11.1m of this is related to its soon-to-be divested construction claims group, which is due to

be sold to Bridgepoint Capital for $147m. The deal is expected to close at the end of the month.


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LUXURY LONDON HOME PRICES STAGNATE

AS TOP-END AREAS DECLINE Thursday, April 20, 2017

London home values grew at their slowest annual rate in almost five years in February as values in the capital’s

most expensive boroughs including Camden, Kensington and Chelsea fell, according to Acadata and LSL Property

Services.

Prices across the city rose just 0.1 per cent on the month to an average £606,780 (Dh2.8 million), the groups said

in a report. That left the annual gain at 1.5 per cent, the weakest reading since April 2012.

The data add to evidence that London’s housing market is increasingly split along value lines, with the capital’s

most expensive areas posting declines and the lowest-priced gaining. In February, the city’s top 11 boroughs by

value saw prices fall by an average of 0.5 per cent on the month, while the least expensive 11 recorded a 0.4 per

cent increase, Acadata and LSL said.

Kensington and Chelsea, the capital’s costliest borough with an average property price of about £2m, led the

declines with a 2.6 per cent drop as the tentative recovery at the top-end of the London market "appears to have

fizzled out", the report said.

According to national data for March, prices in England and Wales rose 0.5 per cent from February to an average

of £301,280, 3.3 per cent higher than a year earlier, the report showed.

* Bloomberg


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DUBAI’S PUSH FOR TRANSPARENT REAL

ESTATE ARBITRATION Friday, April 21, 2017

the large role that real estate plays in the economy, it is of little surprise that legislation in this sector has been

among the most proactive in the world, with many other countries following suit in terms of adopting the

principles that Dubai has put into place for the protection of both investors and developers.

The most notable has been the case of India, where there has been the establishment of RERA, an extrajudicial

body that oversees the sector and expedites claims brought before it, especially by the small investor.

In Dubai, what needs to be examined is the role that arbitration plays before either party goes for litigation. It is

this process that has been developed throughly over the years, and it is because of these procedures that dispute

resolution has been made considerably more effective. It is worth noting here that because of the measures in

place, disputes being escalated to the courts dropped considerably in the last three years.

Litigation is always a lengthy exercise. It is safe under normal circumstances to estimate the period it takes to

issue a first instance verdict as being six to ten months.

Then, it takes a further six months to issue a second instance verdict (by the appeal court). In total, it takes

between 10 months to a year or 18 months to reach a final colony of a lawsuit of said nature under normal

circumstances. In some cases, however, the lawsuit is prolonged to enter a third stage, i.e., Court of Cassation.

The total period increases in such cases might even reach two or three years, bearing in mind the parties’ possible

ill-intentioned intervention to play tricks and prolong the period it takes to litigate and reach a final colony. It is

the length of this period that has led Dubai’s RERA (Real Estate Regulatory Agency), the DIAC (Dubai International

Arbitration Centre) as well as the legal community to encourage arbitration as an effective and expeditious form

of dispute resolution.

The bilateral contract entered into between parties therefore forms the crux of the issue. Form F instituted by

RERA has gone a long way towards the standardisation of contracts that developers and investors enter into.

Nonetheless, the devil is always in the details, and it is highly encouraged that at its inception, as well as for any

subsequent amendments that may be entered into for the duration of the agreement, legal advice be sought,

which is widely available, both at RERA as well as through the legal community at large.

It is also critical to highlight that communication in the event of a dispute should be prompt, and in writing, such

that a trail of documentation is clearly established. These widely established best practices ultimately aid both the

regulator as well as the arbitrator in expeditiously arriving at a solution, thereby negating the need (in most cases)

to resort to litigation.

Ultimately, it is worth highlighting that in case of deciding to file a lawsuit, the importance of checking the judicial

jurisdiction. That is, whether it shall be considered by the courts or an arbitration tribunal. This is determined by

the agreement between the developer and purchaser as stated in the contract.

For instance, if the agreement states that arbitration shall be sought in case of any conflict, the parties are to

abstain from resorting to courts. And in the event that a party resorts to court, the other party may maintain that

the lawsuit shall be revoked due to the arbitration clause.




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On the other hand, if the agreement states that arbitration shall be sought in case of any conflict and a party

seeks litigation with a court while the other party does not maintain the arbitration clause during the first hearing

set, the defendant is considered to have forfeited its right to maintain the arbitration clause and shall not be

allowed to submit the invalidity of the lawsuit due to the arbitration clause.

In addition, the court shall have the jurisdiction over the conflict regardless of the contract provisions stating

otherwise. In Cassation Appeal No 14 Year 2012 Real Estate, the court ruled that rules relating to registration of

properties in the real estate registry in the emirate are matters of public policy and, thus, may not be subject to

arbitration.

This widely read result, gives the investor the comfort that the courts ultimately have the authority to protect the

claims of the investor and override what they believe to be unfair settlements.

The writer is the senior Partner at NM Law, which has an alliance with GCP Group.

Source: Gulf News

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GOVERNMENTS OF GULF COUNTRIES

INCREASINGLY FOCUSING ON

DEVELOPMENT OF TOURISM SECTOR

Sunday, April 23, 2017

A new report by project research and intelligence provider BNC Network shows the growing focus on tourism

sector development by the governments of Gulf countries- Saudi Arabia, UAE, Oman, Qatar, Bahrain and Kuwait-

gradually trying to diversify revenue base and reduce dependence on hydrocarbon, according to the Dubai-based

BNC.

“With the upcoming mega events such as Expo 2020 in Dubai and the World Cup in Qatar, the GCC governments

are obviously preparing themselves for major global events that require additional hotel and tourism facilities

that also will help them diversify revenue sources,” said Avin Gidwani, Chief Executive Officer of BNC Network.

The Regional tourism sector will get a major boost in the years to come, thanks to the ongoing economic

integration process and as the GCC countries prepares to develop a common market and once the physical

infrastructure — such as the GCC rail networks connect the major cities, he noted.

Border formalities

“People from one city will travel to the other for overnight stay and return without having to cross the border

formalities — such as the European Union. The region is preparing for such heavy tourism traffic. There will be a

time when people will board a train from Ras Al Khaimah [in UAE] to perform Umrah [an extra, optional

pilgrimage that does not count as the once-in-a-lifetime Hajj] in Makkah [Saudi Arabia] and return to Ras Al

Khaimah a day later,” Gidwani added.

In March, there is an increase of 1 per cent in terms of number as well as in dollar value in the GCC’s hospitality

projects as compared to February, 2017. In March, seven hospitality projects with a combined estimated value of

around $1.1 billion (Dh4.0 billion) were put on hold in the GCC. The largest hospitality project in dollar terms to be

put on hold was Business Park and Hotel located in the Heart of Jeddah worth $600 million (Dh2.2 billion),

according to the BNC report.

Source: Gulf News

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CHINESE INVESTORS LAUNCH OMAN

INDUSTRIAL PROJECT Thursday, April 20, 2017

Chinese investors in Oman on Wednesday laid the first stone of an industrial zone in the sultanate’s southern port

town of Duqm under a $10.7-billion (Dh39.26 billion, 10-billion-euro) development plan.

Chinese investors signed a deal last year to finance a series of industrial projects on the nearly 12 square-

kilometre (5 -square-mile) site on the Indian Ocean, 550 kilometres south of the capital Muscat.

The first stage of the project is worth $3.2 billion (three billion euros) according to the project’s sponsors.

It will include a power plant, a drilling equipment factory and hotels.

Oman in 2008 announced plans to build a port and shipyard in Duqm to handle supersized crude carriers and

compete with Dubai’s Jebel Ali free zone.

Oman Oil Company and Kuwait Petroleum International last week signed an agreement to build a refinery there

worth around $7 billion, with a capacity of 230,000 barrels per day when it is completed in 2019.

In 2015, Chinese investments in Oman amounted to some $2 billion (1.8 billion euros) and trade between China

and the sultanate reached $17.2 billion (16 billion euros) according to official statistics.

The sultanate derives 79 per cent of its revenues from oil, of which it produces about one million barrels per day.

Like other Gulf states, it has been affected by a cash crunch due to a sharp drop in oil prices since June 2014.

Most of them have introduced austerity measures and set out plans to diversify their economies.

Source: Gulf News

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ROBUST DEMAND FOR CHINESE PROPERTY

AS MORTGAGE LOANS JUMP IN FIRST

QUARTER Friday, April 21, 2017

China extended 1.7 trillion yuan (Dh907 billion, $247 billion) in property loans in the first quarter of 2017, central

bank data showed on Friday, reflecting robust demand in the sector.

Property loans, comprised mainly of individual mortgages and loans for real estate development, accounted for

40.4 per cent of all new loans made in the quarter, data from the People’s Bank of China (PBOC) showed.

In the first quarter of 2016, lending was 1.5 trillion yuan ($218 billion) and sales growth accelerated to a near

three-year high boosted by a range of official stimulus measures.

Lending in the first quarter of 2017 showed a significant rebound from the previous quarter’s 1.21 trillion yuan

($176 billion), a Reuters’ calculation based on central bank data showed, when demand was oppressed by a slew

of property curbs introduced in October until sales picked up again this year.

Outstanding property loans rose 26.1 per cent from a year earlier to 28.39 trillion yuan at the end of the first

quarter, it said.

Outstanding individual mortgages rose 35.7 per cent from a year earlier by the end of the first quarter to 19.05

trillion yuan, the PBOC said in a report posted on its website.

Marking a departure from previous quarters, the PBOC did not disclose the net increase in individual mortgages

in the first quarter.

The PBOC could not be immediately reached for comment.

Source: Gulf News

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ITHRA DUBAI TO DEVELOP COMMUNITIES

FOR ENRICHMENT OF SOCIETY Friday, April 21, 2017

Ithra Dubai, a real estate developer and asset manager, announced on Thursday that work has commenced on

two of its landmark projects in Dubai, One Za’abeel and Deira Enrichment Project.

Ithra Dubai is wholly owned by Investment Corporation of Dubai, and was established to develop real estate

projects that will serve Dubai’s diversity through enriching the city’s offering and supporting the needs of its social

fabric in all its threads.

Mohammed Ibrahim Al Shaibani, Chairman of Ithra Dubai, Executive Director and CEO of Investment Corporation

of Dubai (ICD) commented, "The importance of the real estate sector in Dubai, now warrants strategic attention

and specialized focus. Consequently," he added, "Ithra Dubai stems from ICD’s continued commitment to social

and economic development on adding value to the sustainable growth of Dubai’s real estate sector. We continue

to provide strategic oversight to support Ithra Dubai fulfil its promise to build strategic sectors that enrich

societies and economies."

Inspired by the vision of Vice President, Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin

Rashid Al Maktoum , for the ongoing evolvement and development of the Emirate and its people, Ithra Dubai

undertakes real estate development projects that enrich the economy and strengthen Dubai’s edge as a global

powerhouse. Ithra Dubai’s projects will add choice and opportunity to provide the diverse segments of Dubai’s

society with solutions at a variety of price-points for their housing, hospitality, education and commercial or

business needs.

"We do not develop structures, we create communities that thrive and prosper. We enrich the lives of city

dwellers by helping them realize their dreams - those of making a home, expanding a business, or offering world-

class education to their children," said Issam Galadari, Director and CEO of Ithra Dubai. "We aim to help shape a

city that stands tall on the global arena; ultimately transforming the legacies of our past into landmarks of the

future," he added.

Deira Enrichment Project aims to develop Deira, the vibrant cornerstone of Dubai’s trading legacy. The expansion

of Deira towards the Waterfront is a tribute to the tradition of trade in the country. The development will expand

the Deira Souk to become the centerpiece of the district and will create a bustling hub of life that will add to the

already rich tapestry woven by communities past and present. The area will boast a plethora of retail spaces,

from shop fronts to storage areas, – ultimately enhancing the workflow process. The Development will also offer a

strip of restaurants and retail stores along the creek which will create a bustling promenade, the first of its kind in

Deira, a range of Hotels, catering to business travelers and city dwellers.

As part of the wider Deira Enrichment Project, The Waterfront Market, opening this year, will enhance the fresh

food shopping experience and create an environment for local fishermen, butchers, and vegetable and dry goods

traders to grow and thrive.

One Za’abeel is another iconic project being developed by Ithra Dubai. A symbol of ambition, innovation and the

pioneering spirit of Dubai, One Za’abeel stands proudly in the Za’abeel district at the heart of the city, strategically

positioned between the old and new business districts of Dubai. It is a two-tower, high-rise mixed use




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development incorporating luxury residences, a luxury and ultra-luxury hotel, serviced apartments, office spaces,

retail podium (The Gallery), and the iconic Linx - a panoramic sky concourse that connects the two towers of One

Za’abeel. The world’s largest cantilever, floating an awe-inspiring 100 metres above the ground will offer a choice

of attractions, fine restaurants and lounges.


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DUBAI TOURISM BRIEFS HOTEL INDUSTRY

ON CITY’S LATEST DEVELOPMENTS Friday, April 21, 2017

Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism) held an event today for the hotel

industry in partnership with Meraas and Dubai Parks and Resorts. Hosted at Bollywood Parks, the event gathered

concierges and members of the hotel community from across the Emirate to share updates and information on

the latest hospitality offerings and experiences across Dubai.

Over 200 attendees were taken on a tour of the parks and Riverland, as well as given updates on various projects

in the pipeline. The objective of the forum was to ensure the best level of local knowledge and service be

consistently offered to visitors by Dubai’s hotel community.

Dubai Tourism’s efforts, alongside those of its partners, are testament to the ongoing commitment to deliver

exceptional visitor experience and promote Dubai as one of the world’s leading destinations for tourists and

business visitors alike.

Issam Kazim, Chief Executive Officer of Dubai Corporation for Tourism and Commerce Marketing (DCTCM), said:

"Our partners in the emirate are of utmost importance to our efforts to promote Dubai as a destination as we

head towards 2020, and their support is truly invaluable. We are very happy to be able to host members of

Dubai’s hotel community today who represent the city first hand and we will continue to invest in our relationship

with them."


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With over 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, 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]

Jenny Weidling - BA (Hons)

Manager – Research and Advisory

+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 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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