NEWS BRIEF 28 - Asteco

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© Asteco Property Management, 2017 asteco.com | astecoreports.com IN THE MIDDLE EAST FOR 30 YEARS
ASSET MANAGEMENT SALES LEASING
RESEARCH DEPARTMENT
© Asteco Property Management, 2017 asteco.com | astecoreports.com
IN THE MIDDLE EAST FOR 30 YEARS
Page 2
REAL ESTATE NEWS UAE / GCC
FIXED-TERM INVESTMENT PLANS ARE FAILING UAE CUSTOMERS, SAYS FRIENDS
PROVIDENT
ARABTEC WINS DH353M UAE PAVILION CONTRACT FOR EXPO 2020
ECONOMIC SLOWDOWN LIKELY TO HURT QATAR’S BANKING SECTOR ASSET QUALITY
SOLID FUNDAMENTALS SUPPORT UAE’S CREDIT STRENGTH: MOODY’S
UAE PMI DATA POINTS TO SOLID GROWTH IN Q2
QATARI PROPERTY INVESTORS KEEN TO OFFLOAD ASSETS IN UAE
SAUDI-OWNED PARISIAN HOTEL REOPENS AFTER MULTI-MILLION MAKEOVER
GENERATION START-UP: PROPERTYFINDER CHIEF A PIONEER OF ONLINE REAL ESTATE
UAE SHINES AS SUSTAINABLE ENERGY PATHBREAKER
DUBAI
DUBAI PROPERTY MARKET DIRECTION DEPENDS ON SUPPLY, SAYS JLL
DUBAI RESIDENTIAL SECTOR STABILISING
DUBAI HOTEL OWNERS LOOK FOR NEW WAYS OF EARNING IN CROWDED MARKET
BEWARE OF SPECIAL OFFERS ON OFF-PLAN PURCHASES
DUBAI LANDLORDS OFFER ‘FREE’ RENT, MULTI CHEQUES
DH90M: LATEST 'MEGA VILLA' DEAL IN DUBAI
ONE DUBAI MASTER-DEVELOPER GETS CRACKING WITH LUXURY
POTENTIAL HOME BUYERS IN DUBAI MUST MAKE UP THEIR MINDS FAST
DUBAI’S OFFICE REALTY NEEDS TO MIX IT UP
PROPERTY PRICES GO WITH THE FLOW ALONG DUBAI CANAL
LOOK: DUBAI VILLAS SURROUNDED BY FOREST
NEW DH5B TOWER COMPLEX PROJECT UNVEILED IN DUBAI
NEW DUBAI REAL ESTATE CORP BOARD UNVEILED
RIDE ALONG: NAKHEEL OPENS MONORAIL STATION ON THE PALM
DUBAI HOMES: LIVE-IN THE DREAM

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DEFINING LANDSCAPES SINCE 1985
VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION
REAL ESTATE NEWS SHORT ON DOWN PAYMENT TO FINANCE YOUR PROPERTY IN DUBAI?
RISING SCHOOL FEES HIT DEMAND FOR LARGER HOMES IN UAE
VILLA AT EMIRATES HILLS FETCHES DH90M
DUBAI'S TAMWEEL TOWER RESIDENTS HIT WITH OUTSTANDING SERVICE CHARGES
SHEIKH MOHAMMED UNVEILS DH5BN EMIRATES TOWERS BUSINESS PARK
DUBAI DEVELOPER AZIZI BEGINS WORK ON DHS12BN RIVIERA PROJECT IN MBR CITY
DEWA AWARDS DH46M CONTRACT FOR PHASE 1 OF AL-SHERAA BUILDING
RECORD INDICATOR FOR CONSTRUCTION COSTS UP 0.06 PERCENT IN DUBAI IN 2016
AZIZI BEGINS WORK ON DH12B RIVIERA PROJECT IN MBR CITY
ABU DHABI
SOROUH PROFITS UP 75%
JOB LOSSES HIT ABU DHABI REALTY HARD
NEW DH170 MILLION PORT FOR DELMA ISLAND
NORTHERN EMIRATES
LOWER SHARJAH RENTS A BOON FOR TENANTS
SHARJAH RENT DROPS 'LIKELY' ON TOP OF 5.5% DECLINE IN THE LAST 12 MONTHS,
SAYS PROPERTY CONSULTANCY
RAK TO HAVE SEVEN NEW POWER STATIONS WORTH DH750M
INTERNATIONAL
CANADA SEEKS UAE INVESTMENTS IN INFRASTRUCTURE PROJECTS
TAXES TAKE THE HEAT OFF CANADIAN PROPERTY
COST OF GETTING ON THE UK PROPERTY LADDER SURGES TO RECORD
MANHATTAN APARTMENT PRICES HIT RECORD, AVERAGING $2.19 MILLION
GULF INVESTMENT TO CONTINUE IN BOOMING US WAREHOUSE SPACE

© Asteco Property Management, 2017 asteco.com | astecoreports.com
DEFINING LANDSCAPES SINCE 1985
FIXED-TERM INVESTMENT PLANS ARE
FAILING UAE CUSTOMERS, SAYS FRIENDS
PROVIDENT Tuesday, July 4, 2017
One of the biggest providers of expensive fixed-term investment plans, the cause of a high number of complaints
from UAE customers, has admitted that the products are not good enough.
Philip Cernik, Friends Provident International’s chief marketing officer, said that the life industry “could do better”.
He acknowledged the rise in complaints to the UAE Insurance Authority about life companies and the financial
advisers that market the investment products, from customers frustrated by poor performance and very high
costs.
“There is no room for ‘one size fits all’ customer solutions today … If expats like to save for less than five years,
why are there so few alternatives in the market that reflect this?” Mr Cernik said in a column penned exclusively
for The National.
FPI, owned by Aviva, is one the leading providers of fixed-term products in the UAE and other markets in the
Middle East and Asia. The plans promise good returns but also come with high costs that include upfront
commission fees and charges.
To offer investors better protection, the IA confirmed in April that it was pushing ahead with tough new
regulations to transform the way savings, investment and life insurance products are sold in the UAE. Among the
proposals were plans to impose maximum limits on the upfront commission advisers can earn from life
companies. Advisers will also have to clearly illustrate all fees and charges for which the client is liable.
Mr Cernik said FPI has been working to raise the professional standards of advisers in the UAE, launching an
Adviser Academy in 2015.
“If customers are wary of advisers, isn’t it necessary for advisers to raise their professional standards?” Mr Cernik
asked.
To date 200 UAE-based advisers have passed through the Academy and FPI said this will help brokerages adjust
their business models “to make them fit for purpose” when the new IA regulations are introduced – something
experts expect to happen in the third quarter of this year.
However, Sam Instone, chief executive of the fee-based financial advisory company AES International, said FPI’s
proposals to transform its offering will not have an effect because “the system is broken”.
“It’s too little, too late,” he said. “They are trying to reinvent themselves – but they can’t. In reality, investment-
based insurance is expensive and opaque and ultimately doesn’t work because the funds available via life
insurance companies themselves don’t work.”
Source: The National
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DEFINING LANDSCAPES SINCE 1985
ARABTEC WINS DH353M UAE PAVILION
CONTRACT FOR EXPO 2020 Tuesday, July 4, 2017
Dubai-based Arabtec Construction has won the Dh353-million contract to build the UAE Pavilion at Expo 2020
Dubai, the firm and the National Media Council (NMC) announced on Tuesday.
Arabtec Group CEO Hamish Tyrwhitt said in a statement to Dubai Financial Market (DFM), “The UAE Pavilion
project marks yet another achievement on our road map to a sustainable and successful future. It highlights our
strategic focus on the UAE as our core market and also demonstrates our commitment to building our future
through the development of social infrastructure in addition to instilling a performance-based culture within our
organisation.”
Arabtec’s share prices climbed over 12 per cent on the news, leading gains on the Dubai bourse.
The NMC, the government entity responsible for building and operating the UAE Pavilion, said in a press
statement that Arabtec won the contract over three other shortlisted local and international companies, from a
total of nine initial bids.
Spanish architect Santiago Calatrava, whose work includes the WTC Hub in New York and Rio de Janeiro’s
Museum of Tomorrow, has been chosen to design the pavilion following an international competition that saw
nine international firms submit 11 designs.
Arabtec, in its statement to DFM, where it is publicly listed, said Calatrava’s design was inspired by a falcon in
flight.
The NMC, in its statement, wrote, “The UAE pavilion will be one of the most important landmarks at the Expo 2020
Dubai, reflecting the authenticity and heritage of the UAE, its achievements in various sectors as well as the
nation’s values of openness, communication and tolerance, which are in line with the main theme of the
exhibition.”
The 15,000-square-metre pavilion will be located opposite Expo 2020 DUbai’s central Al Wasl Plaza. Expo 2020
Dubai is expected to attract 25 million visitors from more than 180 countries.
The upper floor of the pavilion spans an area of 2,000 square metres while the mezzanine floor will have an area
of 662 square metres. The ground floor, with gardens and parking spaces, sprawls over 13,300 square metres.
Another 3,000 square metres will be set aside for a plaza level and related facilities.
The pavilion’s design and construction aim to achieve the highest Leadership in Energy and Environmental Design
(LEED) rating.
© Asteco Property Management, 2017 asteco.com | astecoreports.com
DEFINING LANDSCAPES SINCE 1985
ECONOMIC SLOWDOWN LIKELY TO HURT
QATAR’S BANKING SECTOR ASSET QUALITY Wednesday, July 5, 2017
The recent sanctions on Qatar by a group of states led by Saudi Arabia, the UAE, Bahrain, Egypt, Libya, Yemen and
a few other allied countries is expected to have huge consequences on Qatar’s economy and its financial sector if
a resolution takes much time, according to rating agency Moody’s.
“Weaker economic activity could lead to deteriorating asset quality in the banking system and together with an
escalation involving sanctions against the financial sector could necessitate a step-up in government liquidity
support,” said Steffen Dyck, Senior Credit Officer, Sovereign Risk Group of Moody’s.
Although no such sanction has been applied to date, analysts say such a possibility can’t be completely ruled out.
In addition to rising global interest rates, funding costs for the government and other Qatari-based issuers will
increase further and the government’s balance sheet would deteriorate quicker in a scenario of a prolonged
stalemate that extends well into 2018. The sovereign has no external refinancing needs until the first quarter of
2018 when a $2 billion (Dh7.3 billion) sukuk issuance made by SoQ Sukuk A Q.S.C. will mature, but corporates
including government-related entities and banks are facing more sizeable redemptions over the next 12 months.
Aside from bond and sukuk, Moody’s estimates that total short-term external liabilities amount to more than
$115 billion (68 per cent of nominal gross domestic product (GDP) projected for 2017) of which roughly one third
is estimated to be due to creditors in the GCC. Moody’s estimates that about half of this is accounted for by non-
resident deposits and rollover risks would increase in a scenario of further financial sector sanctions.
The government has sizeable asset buffers, including roughly $35 billion in net international reserves at the Qatar
Central Bank and more than $300 billion of assets managed by Qatar Investment Authority (QIA). The
government’s significant resources together with liquid foreign assets in the banking system, which amounted to
about $30 billion as of May, according to Moody’s estimates, provide a strong mitigant against liquidity issues in
the short term. However, a deterioration in economic activities could have strong adverse impact on the financial
sector.
Qatar’s key economic indicators that stood resilient in 2016 and in the first quarter of 2017 are now looking bleak
as the country faces diplomatic and economic isolation from its neighbours and other Arab nations.
Qatar’s key economic indicators such as liquidity in the banking sector and credit growth were positive until the
end of the first quarter.
Total credit facilities continued to grow and stood at a record high level at the end of the first quarter of 2017,
with an increase of 1.9 per cent to reach 855 billion Qatari riyals (Dh862 billion). But with the economic sanctions
taking their toll on liquidity, Qatar is facing a potential funding shortage and high cost of funds that could curtail
credit growth leading to lower GDP growth, especially non-oil GDP growth.
“A de-escalation is likely only gradually. Risk of further escalation remains. The large FX mismatch in the Qatari
banking sector keeps it vulnerable to an abrupt withdrawal of GCC funding. We estimate $35 billion (20 per cent
of GDP) in banking sector capital outflows within one year if the GCC decides to sever financial ties,” said Jean
Michel-Saliba, Mena Economist of Bank of America Merrill Lynch.

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DEFINING LANDSCAPES SINCE 1985
VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION
Analysts say although QIA’s foreign assets will help the country withstand outflows and defend the peg, prolonged
outflows could erode QIA’s balance sheet.
According to Institute of International Finance (IIF), a Washington-headquartered global association of the
financial services industry, if the current crisis persists for an extended period and ties deteriorate further, Qatar’s
GDP growth could decline to 1.2 per cent in 2017 and 2 per cent in 2018, principally due to lower non-
hydrocarbon growth impacted by increased uncertainty weighing on investment and a tighter financial
environment and perhaps deposit flight that could raise the cost of funds.
Cuts in financial ties and increased counterparty concerns could hinder ease of doing business and trade finance.
“In this scenario, lower than expected non-hydrocarbon revenue could widen the deficit fiscal deficit to 7.8 per
cent of GDP in 2017. The external current account deficit could remain at around 2 per cent of GDP as the sharp
fall in travel- and transport-related service receipts due the prolonged travel bans of neighbours and airspace
closures,” said Boban Markovic, Research Analyst at IIF.
Source: Gulf News
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DEFINING LANDSCAPES SINCE 1985
SOLID FUNDAMENTALS SUPPORT UAE’S
CREDIT STRENGTH: MOODY’S Monday, July 3, 2017
Strong economic fundamentals support UAE’s sovereign credit strength according to Moody’s which has assigned
a credit rating of Aa2 and had upgraded the credit outlook from negative to stable recently.
The global credit rating agency said its recent change in outlook for the UAE economy was in response to effective
policy response to the low oil price environment via an acceleration in the country’s reform agenda and the
ongoing recovery in the fiscal and current account balances. The UAE recorded a strong economic growth of 3 per
cent last year despite low oil prices.
“Superior infrastructure supporting diversification, very high per capita income and hydrocarbon reserves of
more than 70 years at the current rate of production also support creditworthiness. In addition, the UAE’s
domestic politics have a track record of stability and the country has strong international relations,” said Mathias
Angonin, a credit analyst with Moody’s.
Analysts say the UAE’s main credit challenge relates to weaker economic and fiscal metrics caused by the oil price
shock and the country’s fiscal reliance on hydrocarbons with 48 per cent of government revenue in 2016 coming
from this sector.
According to the rating agency, further improvements in policy and data transparency in the UAE and improved
diversification efforts would support upward revision of the rating outlook.
High income levels, resource endowment and competitiveness underpin UAE’s economic strength. “We assess the
UAE’s economic strength as ‘very high’ reflecting its very high income level, moderately large size, abundant
hydrocarbon reserves with low cost of extraction, vibrant non-oil economy, and well-developed infrastructure,”
said Angonin.
The hydrocarbon sector is projected to make a smaller contribution to real growth in 2017 because of the recent
Opec decision to freeze production. Average daily production levels reported by the government dropped 6 per
cent quarter-on-quarter in the first quarter of this year. However, the crude oil production outlook is largely
resilient to volatility in oil prices as very low extraction costs of UAE producers ensure economic viability of new
and existing projects.
The UAE’s non-oil growth decelerated again in 2016 to 2.7 per cent from 3.2 per cent in 2015 and 4.6 per cent in
2014. This relative slowdown is likely to extend into 2017, followed by a gradual recovery in 2018-2020.
“Supporting growth in the non-oil economy will be government spending — after two years of spending cuts, we
expect consolidated government spending to increase in 2017. In Dubai, mega-projects will continue to support
non-residential construction activity, which will accelerate in the years leading to the 2020 World Expo,” Angonin
said.
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DEFINING LANDSCAPES SINCE 1985
UAE PMI DATA POINTS TO SOLID GROWTH
IN Q2 Tuesday, July 4, 2017
The Emirates NBD Purchasing Managers’ Index (PMI) for the UAE increased to 55.8 in June, up from 54.3 in May,
on the back of faster output and new order growth last month.
The latest improvement was supported by sharper rises in both new orders and output. The ongoing upturns in
output and new order book volumes encouraged companies to engage in input buying, leading to further
increases in inventories.
“The rise in output and new orders in June is encouraging, although we note that firms continued to reduce selling
prices on average in order to support demand and order growth. The survey also highlights the lack of
employment growth despite strong the strong increase in new work last month. Overall however, the PMI data for
[the first half of] 2017 supports our view that the non-oil sectors have grown at a faster pace relative to [the first
half of] 2016,” said Khatija Haque, head of Mena Research at Emirates NBD.
Remaining comfortably above the crucial 50 threshold, the latest PMI reading signalled a sharp improvement in
the health of the private sector. Notably, the rate of growth was stronger than the long-run series average of 54.5.
Data showed firms continued to discount selling prices in order to support order growth, with average selling
prices declining for the third consecutive month.
Firms also cited increased marketing efforts as contributing to new order growth.
As employment stagnated, new export orders fell for the first time in seven months as demand from international
markets reduced.
“This is disappointing against a backdrop of strong rises in output and new orders, and supports the view that
firms are reluctant to boost hiring in an environment where their margins continue to be squeezed,” Haque said.
Business confidence towards the 12-month outlook eased to the second-lowest in the survey history. Following a
decline in the prior month, there was a renewed increase in input costs.
External demand softened slightly in June, with new export orders declining marginally. While businesses are
optimistic about the coming year, the business optimism index fell to 56.5 in June, the second-lowest level on
record.
Just under 13 per cent of firms expected output to be higher in 12 months’ time, compared to 23.6 per cent in
May. Nevertheless, stocks of purchases (pre-production inventories) increased sharply in June, with this index
rising to 57.3 from 54.7 last month, suggesting that firms do expect output and new work to remain strong in the
coming weeks.
The average PMI reading for the second quarter of 2017 was 55.4, only marginally softer than the first quarter
and consistent with a strong rate of non-oil private sector growth in the UAE.
“The second-quarter 2017 PMI reading is also much higher than that for the corresponding quarter last year,
confirming that non-oil growth has likely accelerated [year-on-year], in line with our expectations. However, the

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DEFINING LANDSCAPES SINCE 1985
VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION
downgrade our forecast for the UAE’s real GDP growth to 2 per cent this year, down from 3 per cent in 2016,”
Haque said.
The downgrade is entirely due to the projected contraction in oil production, which is not captured in the PMI
survey.
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DEFINING LANDSCAPES SINCE 1985
QATARI PROPERTY INVESTORS KEEN TO
OFFLOAD ASSETS IN UAE Tuesday, July 4, 2017
Qataris with property investments in the UAE are in a state of limbo. In a kneejerk reaction, some of them pulled
the plug on their investments and sold at vastly reduced prices whereas a majority is still hopeful that the row will
be resolved.
Investors from Qatar and Kuwait cumulatively accounted for Dh2 billion worth of property transactions in Dubai
last year, according to the Dubai Land Department.
"The majority of our Qatari clients are in a state of confusion as to what to do. Some have sold and at greatly
reduced prices but many are just waiting before deciding what to do next," says Mario Volpi, chief sales officer,
Kensington Exclusive Properties. "There have been some sales, particularly from one Qatari investor who has
liquidated his entire portfolio before the initial two-week deadline to leave the UAE."
The level of discounts offered varies from seller to seller, but typically the amounts range from 10 to 15 per cent
below market price. "We did find a sudden increase in the number of Qatari owners who decided to sell their
assets in Dubai. Sometime has since passed and while we are still assisting some…