NEWS BRIEF 33 - Asteco Property Management Leading Real ... · Between 2017 and 2020 alone, at...

DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN

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ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 33

SUNDAY, 13 AUGUST 2017


© Asteco Property Management, 2017 asteco.com | astecoreports.com

IN THE MIDDLE EAST FOR 30 YEARS



REAL ESTATE NEWS

UAE / GCC

WHAT A FED RATE HIKE MEANS TO UAE MORTGAGES

SAUDI BILLIONAIRE TO INVEST $800M IN EGYPT TOURISM

4 OF UAE'S BIGGEST PROJECTS THAT WILL BOOST CONSUMER SPENDING

DSI TO RECEIVE DH100M LOAN FROM TABARAK INVESTMENT

WHAT TO WATCH OUT WHILE REFINANCING YOUR MORTGAGE IN THE UAE

ESHRAQ PROPERTIES SEES FIRST PROFIT IN TWO YEARS

SAUDI ARABIA'S ECONOMY LIKELY TO DIP THIS YEAR, SAYS INSTITUTE OF

INTERNATIONAL FINANCE

MENA HOTEL SECTOR SOFTENS IN FIRST HALF OF 2017: EY

THE WELLNESS OF BEING: UAE GETS ITS FIRST HOLISTIC HOTEL

DUBAI

CHOOSING A BUSINESS PREMISES: BUY OR LEASE?

WHEN RENTING IN DUBAI

HOTEL ROOM RATES ACROSS DUBAI FALL BY 11.5% IN JULY

HALAL EXPO DUBAI ENTERS FDI AGREEMENT

DUBAI REAL ESTATE RECORDS DH390B TRANSACTIONS IN 18 MONTHS

FÄM PROPERTIES SURPASSES DH1.3 BILLION IN CITY WALK PROPERTY SALES

ENBD REIT ACQUIRES FIRST EDUCATION ASSET IN DUBAI

NAKHEEL AWARDS OVER DH430M CONTRACTS FOR DEIRA ISLANDS

WHY LIVE IN A TOWN HOUSE?

OFFICE TENANTS, LANDLORDS NAVIGATE A SLOW MARKET

ARABTEC SWINGS TO DH40M PROFIT IN SECOND QUARTER 2017

DUBAI NON-OIL ECONOMIC GROWTH INDEX SLIPS SLIGHTLY

HOW CAN A DUBAI TENANT ENSURE HIS COMMERCIAL LANDLORD ACCEPTS HIS

NOTICE OF TERMINATION?

WHY INDIANS ARE INVESTING BIG IN DUBAI PROPERTY



DEFINING LANDSCAPES SINCE 1985



REAL ESTATE NEWS

IDLE DUBAI HOMES MAKE AN ACTIVE COMEBACK

SMALL HOMES FETCH BEST YIELDS IN DUBAI

DUBAI CHAMBER HOSTS WORKSHOP ON VAT COMPLIANCE IN UAE RETAIL SECTOR

FIVE STEPS AND AS LITTLE AS THREE DAYS TO GRAB A BUILDING PERMIT IN DUBAI

AZIZI DEVELOPMENTS COMPLETES AND DELIVERS DH350M PROJECT ON PALM

JUMEIRAH IN 22 MONTHS

DUBAI REAL ESTATE PROJECTS WORTH DH21B LAUNCHED IN FIRST HALF

EXPANSION OF DEWA'S JEBEL ALI PLANT ON TRACK

ABU DHABI

TENDERS WORTH DH10B PROCESSED IN ABU DHABI

MADINAT ZAYED SHOPPING CENTRE TO BE REFURBISHED

WRITING A WILL IN ABU DHABI

MORE ABU DHABI TENANTS SWITCH TO AFFORDABLE HOMES

TOP 5 CHEAPEST PLACES TO RENT IN ABU DHABI

NORTHERN EMIRATES

MUAIRIDH BEACH TO GET A FACELIFT

INTERNATIONAL

HONG KONG HOUSING BURDEN GROWS EVEN HEAVIER AS HOME PRICES SOAR

THAT WHOOSH IT’S THE GREAT CHINESE PROPERTY PULLBACK

AUSTRALIA SLAMS BRAKE ON PROPERTY INVESTORS AND PRICES COOL

US HOUSING MARKET’S NEW DOMINANT FORCE: BABY BOOMERS WHO WON’T SELL

ALIBABA, MARRIOTT TO TEAM UP TO TAP CHINESE TOURISM BOOM

RICH PICKINGS IN GLOBAL REALTY

WORLD’S MOST EXPENSIVE HOUSING MARKET JUST GOT EVEN PRICIER






WHAT A FED RATE HIKE MEANS TO UAE

MORTGAGES Wednesday, August 9, 2017

While a marginal increase in mortgage rates is expected in the UAE, experts say there are many more factors that

influence homebuyers’ decision to buy property. People who want to switch from renting to owning homes or

upgrade to bigger homes, and investors who want to take advantage of the high yields in the real estate market

will still find borrowing a viable option to cater their needs. Here is what financial experts say buyers should

consider about mortgage.

Fixed rate offers

The last US rate hike was widely expected and priced into the market, so no significant impact was felt in the UAE

and rates remained stable. Home Matters expects one or two further rate increases by the US Federal Reserve

before year-end. There is a high correlation between US rates and the UAE Central Bank Emirates Interbank

Offered Rate (EIBOR) rate, so we are likely to see a marginal increase in mortgage rates here. Variable rates

offered in the form of EIBOR-linked or bank variable rates will rise with all banks in the UAE. However, many

banks are already reducing margins to remain competitive and still offer attractive fixed rates for one to two

years.

We have already seen a shift in customer appetite with most now looking for fixed rates instead of variable

products. Longer-term fixed rates are few and historically, the maximum fixed rate period seen in the UAE was for

five years. Only a handful of banks would offer such options and these have been removed or seen significant

increases to counter future rate movements. The increase in rates might make buying less attractive, but rents

remain stable, and with more affordable housing projects being handed over, expats wishing to stay in the UAE

for the long term are taking advantage of what is still very much a buyer’s market. Sellers are also becoming more

motivated with the probability of increased borrowing costs.

Global attractiveness

The buyers have been expecting possible rate increases based on news reports since last year. An increase of 25

base points (bps) last year led to banks repricing their rates in the first quarter of this year. The real estate market

is driven by the need of a customer to buy or own property; the rate charged is a secondary decision, which takes

effect while comparing the mortgage offers available in the market. Even after the increase, it is still cheaper to

own property in the long term than renting. However, the increase will result in a small increase in the monthly

instalment or the tenor of the loan for mortgage buyers.

We have had two increases this year with the latest one being 25 bps. From the indications given by the US Fed, it

is likely that there may be another increase by the end of the year or first quarter of next year, but it’s hard to

predict the timing. However, the real estate market in the UAE is affected by many factors, including the

geopolitical environment, the economic environment, the demand–supply situation, etc. Our rates are still lesser

than the rates offered in most countries and, therefore, the return and yield expected on property investment is

still healthy. But this equation is getting more difficult with every increase.

A minor change

Since the dirham is pegged to the US dollar, any change in the US rates has an effect on the UAE’s interest and

profit rates as well. This will possibly result in an increase in interest or profit rates on a home finance in the UAE.






Ultimately, any increase or decrease significantly depends on local market factors and the liquidity in the local

market. If the liquidity is tight, the interbank rates will go up, and if the bank deposits are on the rise, the rates will

tend to go down. Banks raise or lower financing rates based on its EIBOR.

In the home finance/mortgage industry, an increase in rate is typically passed on from banks to customers who

are seeking a home finance for the purchase of the property. Therefore, it is likely that existing home finance

customers who are on a variable rate may see a rate rise on their finances. That being said, home finance

customers will only need to adjust for a relatively small hike in rates. For example, if a customer had availed a

home finance around one year ago of Dh1 million over a tenor of 25 years at 4 per cent per year, when the rate is

revised to 4.25 per cent per year, the monthly instalment impact of the 25 bps rate hike will approximately be

between Dh135 to Dh140 per month. While this is an inconvenience, it is a minor raise in the grand scheme of

things, and customers should not panic.

Competitive offers

Interest rates are important but not the only deciding factor for homebuyers. People moving locations or

upgrading to a bigger property will continue to avail finance options. With a relatively large pipeline in 2017-18

and developers offering favourable terms to support demand, the overall cost of buying a property is expected to

stay flat despite the recent Fed rate hike.

Moreover, new loans and balance transfers from one bank to another have become cheaper in the UAE due to

rising competition among retail banks. While lending rates could rise gradually, banks may not immediately pass

this on to homebuyers. Our analysts expect an increase in interbank/repo rates of around 50 bps by year-end.

However, this may not immediately reflect on homebuyers’ cash flows as banks will continue to try and gain and

retain market share in an accelerating UAE economy.

Source: Gulf News

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SAUDI BILLIONAIRE TO INVEST $800M IN

EGYPT TOURISM Monday, August 7, 2017

Saudi Arabian billionaire Prince Al Waleed Bin Talal is to invest more than $800 million (Dh2.93 billion) in hotels in

Egypt, the investment ministry in Cairo said on Monday.

The announcement came after parliament in May adopted a new law aimed at attracting foreign investment as

the authorities seek to reinvigorate the North African country’s struggling economy.

The ministry said in a statement that Bin Talal told Investment Minister Sahar Nasr in the Red Sea resort of Sharm

Al Shaikh that he would invest in hotels in several locations.

Tourism in the Arab world’s most populous nation has yet to bounce back from before the 2011 uprising that

toppled longtime ruler Hosni Mubarak.

The fall in tourist arrivals worsened after the Daesh group said it bombed a Russian airliner carrying

holidaymakers from Sharm Al Shaikh in 2015 in a crash that killed all 224 people on board.

The Saudi investment would include expanding the Four Seasons resort in Sharm in the southern Sinai,

transforming it into “the biggest resort in the world”, the ministry said.

New hotels would also be built in the Mediterranean town of Al Alameen and in Madinaty east of Cairo.

The ministry said the amount of Saudi investment was “expected to surpass about $800 million”, and the projects

would be carried out with Egyptian real estate developer Talaat Moustafa Group.

Source: Gulf News

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4 OF UAE'S BIGGEST PROJECTS THAT WILL

BOOST CONSUMER SPENDING Monday, August 7, 2017

In a country where shopping is a favourite pastime for residents with high disposable incomes, there is no

shortage of malls, shopping centres and boutiques.

Every so often, a new development is being announced, be it a mega shopping complex on a man-made island or

a series of retail shops to complement another larger-than-life landmark.

Between 2017 and 2020 alone, at least four mega developments that are currently under construction in the UAE

are scheduled for completion, and they are expected to deliver more than 3,000 shops.

The developments include malls, as well as leisure and recreation facilities, that cost as much as $1.8 billion

(Dh6.6 billion) to build. And all of these projects have one goal in common: to cash in on the spending power of

UAE residents and visitors.

In 2016, shopping malls in Dubai, Abu Dhabi and the rest of the emirates, attracted more visitors than ever, with

footfall numbers posting a 5.8 per cent increase, thanks mainly to the huge influx of tourists, shopping

promotions and events, and a tax-free regime.

Retailers in the UAE generated more than $50 billion in revenues in 2016 and, as consumers are expected to

continue opening their wallets, sales will rise further over the next few years.

According to an analysis by the Dubai Chamber of Commerce and Industry, sales turnover is projected to surpass

$71 billion by 2021, up from $56.6 billion at the end of 2016.

“Demand within the UAE’s retail sector remained steady [in 2016], supported by a 5.8 per cent year-on-year

increase in footfall within shopping malls. This trend was supported by a rise in the number of tourists, the

absence of sales tax, in addition to the expansion of sales events, promotions and shopping festivals,” the

chamber said in a report.

BNC Construction Intelligence, which issued a report on Monday for the Big 5 event in Dubai, has identified four

more UAE projects that are currently underway and may further boost spending numbers.

Deira Islands Mall - Deira Island

Project type: Retail facilities

Project value: USD 1.8 billion

Project stage: Under construction

Completion date: December, 2020

City/country: Dubai, UAE

Developer: Nakheel

Highlights: The project is a three-storey shopping mall with 620,000 square metres of retail, dining and

entertainment space at Deira Islands. Its 2.9 million square feet of gross leasable area can accommodate 3,000

shops.






Dubai Eye - Bluewaters Island Development

Project type: Leisure and recreation facilities

Project value: USD 272 million


Completion date: October, 2017


Developer: Meraas Holding

Highlights: While it’s not a giant shopping complex per se, the development will include the construction of retail

spaces, as well as residential, entertainment and hospitality offerings on an artificial island with a 210-metre Ferris

wheel as a centrepiece.

Abu Dhabi Mall - Al Maryah Central

Project type: Retail facilities

Project value: USD 1 billion



City/country: Abu Dhabi, UAE

Developer: Gulf Related

Highlights: The project includes the construction of a 2.3 million-square-foot shopping centre, which will offer 400

retail stores, a food market, 145 cafes and restaurants and a premier health club.

Silicon Park - Dubai Silicon Oasis

The Silicon Park will have its clusters for office and commercial space, measuring 97,000 square met

Project Type: Mega urban development

Project value: USD 354 million




Developer: Dubai Silicon Oasis Authority

Highlights: The project includes the construction of a shopping centre, 25,000 square metres of commercial space,

a 115-room business hotel and underground parking for more than 2,500 cars. These facilities will be within a

new integrated smart city at Dubai Silicon Oasis.

Source: Gulf News

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DSI TO RECEIVE DH100M LOAN FROM

TABARAK INVESTMENT Wednesday, August 9, 2017

Drake & Scull International (DSI) has announced that it will receive an interest-free ‘Qard Hasan’ loan of up to

Dh100 million from Tabarak Investment as part of company’s capital restructuring programme.

The loan will help meet the immediate working capital requirements of DSI until it completes its capital

restructuring programme, which includes a capital increase of Dh500 million to expedite Tabarak Investment’s

entry as a strategic investor, the company said. The withdrawal and payment mechanisms of the loan will be

mutually agreed upon by the two parties and could be implemented in tranches.

Source: Gulf News

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WHAT TO WATCH OUT WHILE

REFINANCING YOUR MORTGAGE IN THE

UAE Tuesday, August 8, 2017

Have you ever felt the need to change your mortgage lender, knowing there may be better, more affordable

mortgage options out there with better terms? This inclination is only natural when you believe now is as good a

time as any to refinance your current mortgage.

There are numerous benefits to be had through a mortgage refinance, the most notable one being more leeway

to meet monthly payments. You can enjoy the lowest interest rates along with more flexible terms as long as you

understand what benefits and stipulations your mortgage product offers.

Why consider refinancing

The recent US interest rate hikes have made many UAE residents consider mortgage refinancing; however, there

are other valid reasons to consider:

. The Central Bank put a cap, as of December 2015, on how much banks can charge as exit fees. Banks are only

permitted to charge one per cent of the outstanding principal balance up to a maximum Dh10,000, whichever one

is less. This is a major development as it is applied retrospectively, even for mortgage customers who signed final

mortgage offers stating three to per cent buy-out charges.

. Several UAE banks offer zero processing fees when you want to move your mortgage from another bank, so that

you secure better rates as well as terms and conditions.

. If you took a mortgage before December 2013, you may be in a position to refinance up to 85 per cent of the

property's current value.

. Historic contracts lacked transparency, therefore by refinancing, you are placed into a new contract which is

more balanced and not entirely in favour of the lender.

. Interest rates have declined by 50 per cent since 2008.

Why it's good to refinance now

Homeowners can take advantage of the fierce competition among UAE banks to get discounted fixed-rate periods

on their mortgage. It appears UAE banks are willing to be more generous when it comes to terms on existing loan

exposures.

Things to consider

Many are not armed with the right knowledge before choosing a bank and product. There are over 100 mortgage

products in the market, therefore, you should be well-equipped. Do your homework.

. When choosing any loan product, carefully read the fine print; specifically, the terms and conditions on interest

rates, which have a tendency to change. Watch out for hidden fees and penalties.

. Look at all the fees and understand the full set-up costs, the rate and exit fees.






. Understand the rate as it is temporary and will rise as the years accumulate. Typically, the rates advertised are

one-year fixed rates.

. Go with banks who link all their future rates to the Emirates Inter Bank Offered Rate (Eibor).

. Get everything in writing. If terms are promised over the phone or face to face, always ask for them in writing.

Negotiate with your bank

If your only goal in a refinance is to reduce your current interest rate, consider negotiating with your current bank

for a rate reduction. Some banks offer rate restructuring which is a rate reduction to keep you from leaving the

bank via a refinance. You can also negotiate with your bank to waive the refinancing fees.

Another option would be to consider a buy-out from one bank to another. Most banks would prefer to take over

an existing loan with a history and track record of payments and deem this as less risk compared to a new loan.

Consider a mortgage consultant

A mortgage consultant is the one person you can rely on to give non-biased advice on which loan is the best

based on your circumstances. There is a better chance of renegotiating a better rate through a mortgage

consultant due to their existing relationships with the banks.

Prominent mortgage consultants have access to exclusive offers from banks. So, you're saving on not only the

rate but also on the loan.

The first thing you should look at when choosing a mortgage consultant is their CMB (certified mortgage broker)

licence. If they do not have one, find one who does. Your advisor needs to be experienced and knowledgeable on

both mortgage and real estate markets.

Equity release on property

If you own a property in the UAE with little or no mortgage, you can refinance property and take equity out. Equity

release is provided by many UAE banks and is beneficial when seeking a fast and easy way to get cash to either

buy more property, make home improvements or make your capital work harder.

For example, if you are paying a higher interest rate on your mortgage, you could do an equity release at a lower

rate and pay the same monthly payment. These funds can be used for further investments which generate a

higher rate of return. You can also take advantage of lower real estate prices and buy an investment property.

Also, with the USD strength, it's a great time to take money out and send it abroad at a better exchange rate.

Source: Khaleej Times

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ESHRAQ PROPERTIES SEES FIRST PROFIT IN

TWO YEARS Monday, August 7, 2017

Eshraq Properties Company on Monday said it recorded its first positive earnings in the past two years by

realising Dh636,000 second-quarter profit compared to Dh101.4 million loss in the corresponding period last

year.

In a statement, the UAE-headquartered and listed developer said its board of directors held the fifth meeting of

2017 on Sunday in Abu Dhabi to discuss and approve numerous agenda items, including the company's financial

statements for the three months ended June 30, 2017.

"We have successfully stopped the flow of losses in Eshraq and are looking forward to the new era of growth in

the company," said chairman Jassim Alseddiqi.

"With a prudent growth strategy, Eshraq will continue to expand on existing projects while increasing our pipeline

of future developments to deliver strong results for our investors," he added.

The board also approved investing in a real estate project on Sheikh Zayed Road, Dubai, that is currently in the

design phase.

Dh144 million contract awarded

Meanwhile, the developer awarded a contract worth Dh144 million to Al Sweidi & Shams Contracting to execute

the main works of the Marina Rise project in Al Reem Island, Abu Dhabi.

The Marina Rise is located in the Cove District on Al Reem Island, within walking distance of Galleria Mall and

Cleveland Clinic Abu Dhabi. The development will comprise a single residential building with 233 residential units

(studio, one, two and three bedroom apartments), 271 car parking spaces and a retail space.

Construction is expected to be completed by the end of 2019.


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SAUDI ARABIA'S ECONOMY LIKELY TO DIP

THIS YEAR, SAYS INSTITUTE OF

INTERNATIONAL FINANCE Sunday, August 12, 2017

Saudi Arabia’s economy is expected to contract slightly in 2017 before rebounding next year as the oil crash that

began three years ago and heralded a prolonged period of low hydrocarbon prices impacts the region’s biggest

economy, the Institute of International Finance (IIF) said.

The institute said Saudi Arabia’s economy is expected to contract 0.4 per cent in 2017 before advancing 2 per cent

in 2018. The unemployment rate for Saudi Arabian nationals has increased to 12.3 per cent and is likely to stay

high for several years in the absence of a strong recovery in non-oil growth, according to the IIF.

The institute said that the weakened economic growth was pushing the kingdom’s unemployment higher, adding

that reforms were needed to create enough jobs for entrants into the job market.

“Prolonged low oil prices and the need for further fiscal consolidation has shifted the economy to a lower

prolonged growth path which will not create sufficient new jobs to reduce the high national unemployment rate,”

said Garbis Iradian and Giyas Gokkent, economists at the IIF.

“Deep structural reforms are needed, including quality of education and training to prepare new national entrants

to the labour market to find employment in the private sector.”

The world’s biggest exporter of crude oil has been taking measures to shore up its finances in the wake of the

steepest drop in oil prices since the financial crash of 2008. As part of that effort, the government sold US$17.5

billion in bonds in its first international sale last year. The kingdom is well aware of the need for economic

refocusing and has already taken major steps to address the issues. The country’s leaders have announced an

economic transformation plan to reduce the government’s reliance on hydrocarbon revenues.

The state relies on sales of crude to fund more than 75 per cent of the budget, and lower oil revenues created a

budget shortfall last year that has been estimated at $100bn.

The kingdom’s reforms include privatising state industries, including a stake to the public in Aramco, the world’s

biggest oil producer.

Under the transformation plan, the government is aiming to reduce the unemployment rate to 9 per cent by

2020. But the IIF said that its projection of non-oil growth of 2 per cent to 3 per cent in the next four years would

not be enough to absorb new entrants into the labour market, which averaged around 200,000 per year between

2010 and 2015.

As well as creating more jobs, the country needs to further improve its education system, the IIF said. “Despite the

progress made in recent years, the country still faces major challenges in enhancing the quality of education and

appropriate training,” the economists said in their report. “The skill composition of graduates of the educational

system has long been recognised as being out of line with the demands of the market.”

Source: The National

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MENA HOTEL SECTOR SOFTENS IN FIRST

HALF OF 2017: EY Thursday, August 10, 2017

Hospitality markets across the Middle East and North Africa (Mena) have experienced a softer performance in the

first half of 2017 when compared to the same six-month period in 2016.

This is according to the EY Middle East Hotel Benchmark Survey Report, which found that the majority of markets

experienced a drop in revenue per average room (RevPAR — an industry benchmark for performance) due to a

slower global economy and an increase in supply in some of the markets like Saudi Arabia and the UAE, making

the first six months a challenging time for the four and five-star hotel industry.

Hospitality markets in Cairo, Makkah and Beirut witnessed the highest RevPAR growth in the region during the

first half of this year when compared to the first half of 2016, whilst Dubai recorded the highest overall RevPAR

performance at $209 across the Mena region.

According to EY’s research, the emirate has continued to focus on increasing tourism by means of meetings,

incentives, conferences and exhibitions (MICE) events, leisure attractions, exhibitions and conferences, a diverse

hospitality supply and revised visa policies, which have all contributed to its current performance.

Despite Dubai’s resilience, research firm STR’s preliminary July 2017 data for the emirate indicates a steep

performance decline consistent with the year-to-year shift in Ramadan dates.

According to the report, Dubai’s hotel performance continues to be affected by supply expansion. Additionally,

STR analysts note that July performance was affected by the Ramadan calendar shift, with the Eid al-Fitr holiday in

late June this year versus early July last year. However, Dubai did not experience as severe a downturn as several

other Middle Eastern markets during this year’s Ramadan period.

Yousuf Wahbah, Mena Head of Transaction Real Estate at EY, said in a statement: “The hospitality market

continues to be affected by the drop in oil prices and challenging economic conditions, which has led to more

conservative spending in the government and private sectors as well as among regional tourists. An increase in

supply in some of the markets like Saudi Arabia and UAE has also contributed to a drop in the performance. The

summer months, which are typically seen as the low season in the majority of Mena hospitality markets, are

expected to experience lower occupancy and room rates compared to the first half of the year.”

“Starting September, we expect to see an increase in the hospitality market performance in some of the Mena

cities due to the Haj pilgrimage, global forums and regional events being hosted across the region, and regional

trips taken during long weekends for upcoming holidays,” he added.

Source: Gulf News

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THE WELLNESS OF BEING: UAE GETS ITS

FIRST HOLISTIC HOTEL Thursday, August 10, 2017

As the UAE strives to hit high on the happiness scale, wellness tourism continues to gain momentum at a time

when stress-related ailments are on the upswing. According to a report released by Colliers Experiential Travel

Series earlier this year, the UAE led the charge in the Middle East wellness tourism market, with an average of 1.7

million trips generating $2.7 billion (Dh9.9 billion) annually.

Dubai rolled out a series of initiatives to tap into this growing market with the launch of its DXH (Dubai Health

Experience) programme in April 2016 by Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince

of Dubai. The programme was introduced to support its “Dubai, a Global Destination for Medical Tourism” project.

DXH aims to promote Dubai as a global centre for the provision of medical tourism services with a target of

attracting half a million international patients by 2020. Lending weight to this drive is a sprawling Dh700 million

wellness resort that is scheduled to open its doors on October 1 on The Palm Jumeirah, with a focus on mind-

body balance. The 255-room Retreat Palm Dubai MGallery by Sofitel is positioning itself as the “first holistic well-

being resort” in the region and is an initiative by the DXH in conjunction with the Dubai Health Authority (DHA).

Speaking to Gulf News, the resort’s General Manager, Samir Arora, said: “The Retreat is the first of its kind resort

in the GCC, with a sole focus on holistic living. From our architecture which is designed around the Chinese

concept of Feng Shui, right to our food and beverage needs, which is 90 per cent organic, everything is catered

towards wellness.” He explained that the property will also house the world’s first Rayya Wellness Centre, a home-

grown brand that will offer wellness packages for adults and children, including weight management, along with

housing a spa, a recreational centre and a nutrition clinic.

Regional expansion

Under the Accor Hotels umbrella, this property also marks the entry of the first MGallery brand in the region,

which, Arora said, is targeted towards the solo female traveller. He explained: “The MGallery concept is divided

into three different hotel concepts, namely Signature, Heritage and Serenity hotels. While The Retreat falls under

the Serenity sub-brand, there is room to expand on the MGallery concept further within the UAE.”

When quizzed, Arora admitted “active discussions” were underway for other properties in the country, but

declined to comment further. The opening of the beachfront property has been delayed, he revealed, but a soft

opening for The Retreat is underway.

“Room sales have already commenced through travel agencies, with our biggest source markets being Germany,

followed by Russia and the UAE,” he stated, adding: “Saudi Arabia also holds a lot of potential for growth in the

coming months.” Arora explained that 200-odd wellness related activities will be offered at the property, along

with specialised detox programmes that will include packages starting with two nights, three-day retreats where

guests can sign up for weight loss, yoga, fitness and more.

As this tourism drive continues to draw in the numbers, the DHA estimates that by 2021, more than 1.3 million

medical tourists will visit the emirate alone.

Source: Gulf News

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CHOOSING A BUSINESS PREMISES: BUY OR

LEASE? Wednesday, August 9, 2017

With the continuing expansion and creation of free zones and special economic zones, there are more and more

opportunities for businesses to own their own premises rather than remain tenants. One of the most widely

discussed challenges in the market is the increasing rental rates that are having to be paid, especially in some

sub-markets, such as the Dubai International Financial Centre, where the availability of office space is limited.

With rentals continuing to increase, we have seen an increase in requests from clients to undertake scenario

analysis as to whether to continue as a tenant or to buy the space.

There are a number of key factors to consider that are specific to the commercial sector when deciding whether

to rent or buy.

Location

While the location of the property is obvious, one has to consider how the market is evolving, where will your

clients be in the next 10 years and what is happening in the market that may affect where your business or your

clients’ business will move. Importantly, there has to be some availability of suitable properties in the freehold

market in the desired location.

Flexibility

As businesses grow, space requirements also expand or evolve. When leasing accommodation, the lease often

specifies what works can and can’t be undertaken to modify the space and, more importantly, the condition upon

which it must be returned at the end of the lease. While the lease maybe 10 years or so and such an obligation

maybe disregarded as being distant, we are seeing a number of instances where large corporates took offices in

shell-and-core condition 10 years ago and are now consolidating their businesses into new premises. In addition

to the significant fit-out costs in their new offices, they have an obligation to reinstate the current property to it’s

“as leased” condition, which requires additional budget — although this is not applicable if the space is owner

occupied.

Meanwhile, expanding your own property is going to be limited also, and the while relocation is costly, there is

limited residual burden if a rental tenant relocates. If the company owns the property, then it can be leased to a

third party. However, in industrial markets, an asset may have depreciated in value and disposing it in the future

may be a challenge.

Financial

The international accounting standards are changing and as such the way that occupational leases are recorded

will soon be impacting companies’ profit and loss statements. This is an area of much ongoing discussion globally.

Historically many companies preferred to rent as they didn’t want real estate assets shown on their accounts.

Leases previously were also not shown, but will now be reflected, especially long-term leases. In some instances,

this is making it financially more advantageous to own the asset rather than be a tenant, from an accounting

standpoint.

Initial fit-out and relocation costs can be significant and usually depreciated over a number of years to minimise

the financial effect on the balance sheet. The lease obviously needs to be of a length, or have security of renewal,

to permit a period of depreciation.






There is obviously a different entry price between an acquisition and rental. It is important to look at the

correlation between the costs of each — in essence to work out how many years of rent (assuming market

conditions remained static) would you be paying to reach the same price at purchase and then determine in line

with a business plan which is more advantageous.

Commercial mortgages exist, and while they are not as commonplace as in the residential sector, it is possible for

companies to fund part of an acquisition through a mortgage.

Future investment

Despite the risk of depreciation, disposing of an owned and operational asset by way of a sale and leaseback can

be a very beneficial way of getting capital inflow. The majority of business continue to rent, preferring the

flexibility of being able to upscale, downsize or relocate as and when required, but with the changes to the

accounting standards and the increasing rental rates, maybe the mood is shifting and there will be more

consideration towards acquiring assets in the future.

Source: Gulf News

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WHEN RENTING IN DUBAI Wednesday, August 9, 2017

Renting is always an exciting yet complex process. Whatever the reasons, whether it’s moving to Dubai in pursuit

of a job or changing residence in search of a better community, finding and renting a suitable home requires time

and due diligence. While Dubai’s residential lettings sector now has several regulatory safeguards in place to

protect tenants, renting, whether you’re new to Dubai or a long-term resident, can still be a perilous task. PW talks

with some experts to bring you tips for making the rental process a smooth one.

Plan ahead and shortlist your requirements

Nitin Chauhan, business head of Aspen Real Estate, says the rental process can be a tricky one for those

unprepared. “But the entire exercise of research, viewing and negotiations can be done right if one has planned

what one is looking for, and has the correct market update through a reputable agent,” says Chauhan.

It is, therefore, always better to brainstorm and plan ahead before meeting agents or looking at properties. This

saves precious time and effort in the rental process. “You should list down all the features and facilities that you

want in your new home. Once you have finalised this list, you can easily leverage it to shortlist suitable homes,”

adds Bana Shomali, founder and CEO of Service Market (formerly MoveSouq.com), the UAE’s largest online home

services marketplace.

Set a budget

A next critical step within the planning stage is setting the budget. This can serve as a critical component for

shortlisting communities or housing that suits your needs within your budget category. “An open budget usually

leads to a waste of time,” explains Chauhan. “Once you fix a budget or a budget range, your home begins to take

shape.”

An often ignored aspect of budget planning can be the fees and extra costs that can add up to a considerable

amount, catching you off guard in case you haven’t factored it into your planning. Talking about the various

charges one needs to be cognizant of before renting, Lukman Hajje, CCO of the Propertyfinder Group, explains,

“Letting agents usually charge a fee of 5 per cent. Landlords usually demand a 5 per cent security deposit, while to

get connected to the Dubai Electricity and Water Authority [Dewa] requires a deposit of Dh2,000 for apartments

and Dh4,000 for villas. Another major charge is the Dubai Municipality fee, which is 5 per cent of the value of your

annual rental contract, deducted in 12 instalments via your monthly Dewa bill.”

Use a reputed

Be wary of online listings that are not hosted on reputed sites, caution experts.

“There are a lot of real estate scams and fake listings out there, so be wary and only reach out to licensed real

estate agencies. You should also avoid listings on platforms like Facebook, because they are often unreliable”,

warns Shomali. Asking for the real estate agents license before you hand over any money to them can save you

from getting duped.

Check out the location and community

While choosing a house, it is important to pay attention to the location and the community. “It matters as much as

the house, if not more. Depending on your needs, there are multiple things you should consider, including

whether the area is child-friendly, if it has supermarkets or restaurants nearby, or if it is pet friendly if you have

any family pets”, says Shomali. For those moving to Dubai and without a car, it is important to consider locations

that have easy access to public transportation like the Metro.






According to Chauhan, “While deciding on the location bear in mind the commute to work, access, traffic, facilities

nearby like schools, hospitals, supermarkets, parks, play areas, shopping centres, etc.

Negotiate a good deal

Most tenants, especially those moving to Dubai for the first time, are unaware that they can negotiate the rent

and terms of their contract with the landlord based on payment schedules. Checking how the rent for your

shortlisted home compares to other properties in the area is also necessary to ensure you are not hoodwinked

into paying a higher rental amount.

“Dubai’s real estate sector has been sluggish in the last two quarters and this has strengthened the bargaining

power of prospective tenants, so don’t be afraid to make an offer after you have considered the advertised price.

Few landlords now demand a single cheque to cover the full 12-month rental period. The norm now is for four

cheques, but if you do have the spare cash or an employer that’s happy to give you an advance, then offer to pay

a year upfront in return for a discount,” suggests Lukman.

Inspect the property

Before signing the final rental agreement it is important to inspect your villa or apartment thoroughly for any

existing issues. “You might have to face unexpected bills and many hassles if the home you are moving into has

any maintenance problems such as pest infestations or a neglected garden. If you spot anything like a cracked

window or broken cupboard, immediately bring in into the notice of your landlord and take photos of any existing

issues, so that you don’t lose your deposit when you vacate the property,” advises Shomali.

Read the contract

Finally, it is very important to read the tenancy contract thoroughly. Chauhan calls the contract “the key to your

happiness in your new home”.

“A reliable brokerage will ensure that both the tenant as well as the landlord is effectively protected through the

terms of the contract”, he adds. Experts strongly urge tenants who most often skip this part of the rental process,

to go over the agreement in detail to avoid surprises at a later stage. “One of the major mistakes many tenants

make is that they sign the contract and seal the deal without fully understanding its terms and conditions.

Confirm the duration of the tenancy and the notice period you’ll have to give when you decide to leave the house.

You should also be aware of what changes you’re allowed to make while renovating the house and read the fine

print to make sure no special requirements are mentioned in the contract”, says Shomali.

Maintenance fees are one such cost that can be hidden in an unread contract, explains Lukman. “Before signing a

rental lease agreement, make sure you read the contract to ensure it specifies that the landlord is responsible for

both building service fees and major maintenance. As a tenant, you can expect to pay for minor repairs, but if you

end up paying to get something more substantial fixed in an emergency you should be entitled to a refund

providing you keep a copy of the invoice”, he adds.

The property market in Dubai offers you with lots of choices while finding a home, from a villa to an apartment to

townhouses, and should you find the right one, ensure you seal the deal without delays and commit and pay the

security deposit to book the property. Also don’t forget to spend some time giving your new home some care

before you move in. Schedule home services such as painting, deep cleaning, and pest control a few days before

you move in as this can save you and your family a lot of stress and hassle.

Source: Gulf News

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HOTEL ROOM RATES ACROSS DUBAI FALL

BY 11.5% IN JULY Thursday, August 10, 2017

Rates at hotels and resorts across Dubai continue to fall, as more rooms come on stream and put pressure on

hoteliers.

Initial data released by hotel industry research firm STR showed that room prices in the emirate have gotten even

more affordable in the summer, costing an average Dh471.25 per night in July, down by 11.5 per cent compared

to the same period last year.

The decline is mainly due to the room inventory growing faster than guest numbers. “Dubai’s hotel performance

continues to be affected by supply expansion,” STR said in a statement.

While demand increased by 1.8 per cent in July, room supply went up by 5.6 per cent, leaving plenty of

accommodations empty and revenues falling.

Hotel occupancy rates across Dubai averaged at 65.7 per cent, falling by 3.6 per cent compared to a year earlier.

As a result, the revenue per available room dropped by 14.7 per cent to Dh309.76.

STR analysts, however, pointed out that July performance was also affected by the Ramadan calendar shift, with

the Eid al-Fitr holiday falling in late June this year versus early July last year.

“However, Dubai did not experience as severe downturn as several other Middle Eastern markets during this

year’s Ramadan period,” STR said.

Source: Gulf News

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HALAL EXPO DUBAI ENTERS FDI

AGREEMENT Wednesday, August 9, 2017

Halal Expo Dubai has teamed up with Islamic economy intelligence provider Salaam Gateway to promote and

attract foreign halal investment into Dubai.

The agreement will scale-up Halal Expo Dubai within UAE and to the global investors, exhibitors and trade visitors

from halal food, Islamic banking and halal lifestyle sectors.

Under the partnership agreement, the two platforms will undertake regular consultations to review and ensure

alignment of ongoing collaborative activities, and to develop a joint work programme. The agreement will focus

on expanding the use of joint promotional activities to increase awareness about the Halal Expo Dubai and its

programmes.

Halal Expo Dubai, taking place on September 18, is a major specialised event in Middle East for the Islamic

economy and is expected to attract over 4,000 buyers from over 40 countries.

Source: Gulf News

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DUBAI REAL ESTATE RECORDS DH390B

TRANSACTIONS IN 18 MONTHS Tuesday, August 8, 2017

The spike in property handovers and off-plan is telling on Dubai’s transaction numbers — in the 18 months

ending July 31, the Land Department recorded Dh86 billion in such transactions, which totalled 63,903.

This was followed by land sales, which generated 24,000 deals and for a combined value of over Dh283 billion.

Buildings fetched volumes of Dh21 billion from 8,000 transactions, data from Land Department show.

It was last week that the government entity released details of the year to end June volumes, with the market

seeing Dh132 billion in transactions.

Now, the 18-month data shows that steady gains are being made in both the freehold (for all nationals) and non-

freehold designated zones.

“These figures demonstrate an atmosphere of optimism across the real estate market,” said Sultan Butti Bin

Mejren, Director-General, in a statement. “This momentum will remain in the foreseeable future.”

His sentiment is shared by other market sources, who suggest that the market is seeing the steady sort of

recovery it needs. Speculative buying, if at all it is there, is limited in its impact.

Over the 18-month stretch, there were 67,409 transactions for land, buildings and units worth Dh165.731 billion.

And for the same period, mortgages were registered for Dh188.514 billion — from 22,353 transactions — and

which bodes well for end-user activity present in the market. Other transactions saw a further Dh36 billion

through 6,077 transactions.

Source: Gulf News

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FÄM PROPERTIES SURPASSES DH1.3

BILLION IN CITY WALK PROPERTY SALES Monday, August 7, 2017

Dubai-based real estate broker Fäm Properties has topped Dh1.3 billion in residential property sales at City Walk,

a new development in Jumeirah built and managed by Meraas.

Firas Al Msaddi, the Fäm Properties CEO, said in a statement on Monday that the bulk of sales were to first-time

buyers of buildings, while just over Dh325 million worth of sales were in the secondary market.

He added that the volume of sales highlighted the importance of understanding, and capitalising on, the

dynamics of supply and demand in the Dubai property market.

Source: Gulf News

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ENBD REIT ACQUIRES FIRST EDUCATION

ASSET IN DUBAI Sunday, August 6, 2017

ENBD REIT said on Sunday it has it has acquired South View School in Dubai’s Remraam Community, and will

construct a school at a total transaction value of Dh55 million.

The deal marks ENBD REIT’s first acquisition of an education asset, as part of its strategy for diversifying its

property portfolio into alternative real estate.

“This is our first education asset, and an important step in the ongoing diversification of our portfolio away from

purely office and residential properties,” Tim Rose, head of Real Estate at Emirates NBD Asset Management, said

in a statement. “The UAE’s education sector continues to prosper and grow, and we are very proud to have

become a part of that journey.”

South View School, once complete, will be operated by Interstar Education, part of Interstar Advisory Services,

which currently runs the Victory Heights Primary School in Dubai Sports City.

Following acquisition and completion of the development, the ENBD REIT property portfolio’s total value will be

$367 million (Dh1.35 billion), with a net asset valuation (NAV) of $292 million, or $1.15 per share.

Loan-to-value (LTV) ratio on gross asset value (GAV) is 29 per cent, with occupancy of 87 per cent across the

portfolio.

Source: Gulf News

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NAKHEEL AWARDS OVER DH430M

CONTRACTS FOR DEIRA ISLANDS Wednesday, August 9, 2017

Master developer Nakheel has awarded four contracts — collectively worth more than Dh430 million — for Deira

Islands, its new, 15.3 square kilometre waterfront city currently under construction in Dubai.

The contracts, covering islands A and B of the four-island development, are for a sewage treatment plant, a

district cooling plant, a substation and piling work for an 800-room resort.

Nakheel has now invested nearly Dh7.5 billion in infrastructure and construction contracts for Deira Islands so

far.

With a diverse range of retail projects, resorts, hotels and residential developments, Deira Islands will transform

Dubai’s Deira district into a world-class hub for tourism, retail and entertainment.

The waterfront city will add 40km, including 21km of beach, to Dubai’s coastline and pave the way for the

development of hundreds of hotels, residences and attractions. Deira Islands is expected to have a population of

250,000 and to create 80,000 jobs.

In April, Nakheel awarded a construction contract worth Dh4.2 billion for Deira Mall, the centrepiece of Deira

Islands and Dubai’s biggest shopping mall in terms of retail space. Meanwhile Deira Islands Night Souk, with more

than 5,300 waterside shops and restaurants, is under construction and due to open in 2018.

Source: Gulf News

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WHY LIVE IN A TOWN HOUSE? Wednesday, August 9, 2017

Living in a town houses is becoming popular among couples and families, as well as investors, in Dubai.

Affordable housing rates, low service charges, attractive returns, home and land ownership and ease of

maintenance all make town houses an attractive purchase option. The rising demand has directed master

developers to develop a good range of town houses within their projects.

Mario Volpi, chief sales officer of Kensington Luxury Real Estate Brokers, says town houses are popular because

the built-up areas are larger than some independent villas. “Ground plus one is the most popular type as there is

only one set of stairs as compared to G+2,” says Volpi. “The one-bedroom town houses in Jumeirah Village

Triangle [JVT] offer returns of 7.5 per cent and, similarly, Springs return rates are approximately 7-7.5 per cent.

Jumeirah Village Circle [JVC] and JVT offer a good selection of town houses, whereas Arabian Ranches 2 Mira,

Akoya and Warsan in Dubailand are new projects that are about to be or have just been handed over.”

Mini cities

Fintan Flannelly, client manager at Exclusive Links Real Estate, says communities along Al Khalil Road such as

Meydan, Dubai Hills, JVC, JVT and Jumeirah Golf Estates offer town houses at different price points. Along Al

Quadra Road, there is Mudon and Mira, which have been delivered over the past 18 months. Flannelly says

Arabella and Serena in Mudon have been popular among buyers since they were launched last year.

“Established town house developments like Springs, Arabian Ranches, JVC and JVT continue to be popular, while

the new kids on the block, Mira, Nshama, Arabella and Serena in Dubailand have sold well where off-plan prices

are attractive,” says Flannelly.

Attractive investment

Indian investor Akash Gandhi points out that a town house is a better choice than an apartment because of the

size; apartments can go up to Dh1,000-Dh1,500 per square foot, while town houses are in the range of Dh600-

Dh900. Also, a town house gives the buyer independent ownership of the land, so it’s suitable for a long-term

investor. The maintenance charges are also much lower.

“I have rented the unit and returns are good,” says Akash Gandhi on a three-bedroom plus maid’s room town

house her purchased in JVC in 2013. “I make a 9 per cent net return on investment [ROI] and with the current

market price, it is still a 7 per cent net income, which is also attractive. Even if you are a finance buyer paying

interest at 4.5-5 per cent, it is still a positive ROI, with the added possibility of capital appreciation.”

Market trends

Flannelly says investors typically have been dominant players in town house developments. “Now the developers

are becoming more flexible in their payment plans that open off-plan at favourable prices to end users,” he says.

“We are now seeing Dubai Properties [DP] offering 40-60 payment plans over three years with a 10 per cent down

payment, and several other developers offering 25-75 payment plans in fast-developing areas like JVC with a

construction timeline of 18 months.

“Investor’s driven by ROI pursue town houses with low service fees in proven locations, while investors looking for

capital appreciation will look at proven developers in newer areas with good payment plans. The net ROI can vary

from 6.2-8.75 per cent if you get in early with a good off-plan price. However, location is still paramount for end

users who want better quality, more choices in floor plans and space.”






He notes that three-bedroom town houses are the most popular type. As far as off-plan is concerned, DP’s Serena

and Arabella, with good payment plans, are attractive, says Flannelly. For those looking for variety, he points to

JVC, which has one-, two-, three- and four-bedroom options over two and three floors, in a variety of styles from

modern to Mediterranean and prices starting from Dh1.35 million to Dh3.1 million.

“I have recently seen a few town house projects in JVC that are pretty amazing regarding layout and finishes, and

you have your elevator,” says Flannelly. He believes town houses offer less risk as an investment because of the

strong demand from families, be it for rent or sale. Families are also less likely to change homes too often, while

the service fees are also lower, he adds.

Unit options

Rajiv Ghanekar, senior real estate broker at Keller Williams Real Estate Dubai, says town houses are typically built

in clusters of two to six units, with prices varying based on the positioning of the house, proximity to amenities

and plot size.

“A middle unit is built on an average 2,250 sq ft of plot and offers around 600 sq ft of usable backyard space,

while a corner unit is built on a 3,000-4,000 sq ft plot and can provide a huge usable back-side yard space of

nearly 2,000 sq ft,” explains Ghanekar. “On average, the yearly outgoings on a three-bedroom plus maid’s room

town house in established communities such as The Springs and Al Reem is between Dh6,000 and Dh10,000 per

year, whereas it is Dh15,000-Dh25,000 for a three- to five-bedroom independent villa and approximate Dh35,000-

Dh50,000 for a three-bedroom apartment.

“Thus, town houses are more realistic, easy to manage and offer huge savings in yearly outgoings.”

He also points out that the segment has generated a significant momentum since a number of affordable housing

projects were announced in 2013. “Clients who invested in early 2013 in Emaar’s Mira Townhouses are today

witnessing a 40-50 per cent capital appreciation and a rental return of close to 8 per cent net,” says Ghanekar.

“While it is difficult to say whether a similar capital appreciation can be expected for the current off-plan offerings,

but even then, these would make good investment purely from a rental yield perspective.

“I would estimate that a three-bedroom plus maid’s room town house purchased today at a price of circa Dh1.5

million, with an estimated completion of 2019-2020, would still rent at a conservative figure of Dh120,000 per

annum. Take away Dh10,000 per year in community charges, the projected net return of Dh110,000 would be

over 7 per cent. And, this is a good enough reason to invest in town houses.”

Source: Gulf News

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OFFICE TENANTS, LANDLORDS NAVIGATE A

SLOW MARKET Wednesday, August 9, 2017

Following the subdued results at the start of the year, Dubai’s office sector continued to display little momentum

in the second quarter, in the midst of bearish market sentiment, low oil prices and regional uncertainties.

“Although quoted rental rates were broadly unchanged over the last quarter, transaction evidence indicated

marginal declines of 2 per cent, while landlords continued to show increased flexibility during negotiations to

secure new tenants and retain existing ones,” says John Stevens, managing director of Asteco.

In the first half, there was very little change in demand and activity from occupiers compared with the second half

last year, but the market still witnessed a high level of activity from occupiers reviewing options, considering

relocations or reducing their footprint by increasing efficiencies. “More recently, there has been an increased flow

of transactions with occupiers prepared to commit to new offices,” says Dana Williamson, head of agency and

occupier services at JLL Middle East and North Africa (Mena).

Industry experts tracking the sector say they observed an increasing number of enquiries as occupiers witnessed

greater market certainty. Although there was a drop in enquiries during Ramadan, Knight Frank says it has since

seen a pick-up — a positive sign for the traditionally quite summer months.

“Landlords were still heavily pressured to keep rents low to combat greater market competition and, therefore,

we witnessed no change,” says Matthew Reason, senior surveyor, commercial leasing at Knight Frank.

Reason says landlords offered greater incentives in the form of rent-free periods and fit-out contributions as

bargaining chips to incentivise tenants.

However, the market continues to face added pressure due to oversupply. Around 4 million sq ft was completed

last year, with a further 200,000 sq ft in the first half this year. A total of 2.5 million sq ft is expected to be

delivered this year. “With the current oversupply, increased pressure has been placed on annual sales and rentals,

resulting in rates to soften by 6 per cent and 3 per cent respectively,” says Stevens.

While enquiries in the second quarter were predominantly for smaller-sized units, Stevens says tenants were

increasingly looking for grade A office space from single-building owners rather than leasing strata title property.

Top locations

From a location perspective, grade A projects under single ownership on Shaikh Zayed Road and in the Dubai

International Financial Centre (DIFC) area performed well. “Rental rates for offices in Dubai Investments Park and

Dubai Silicon Oasis remained flat both year-on-year and quarter-on-quarter, mainly due to limited activity in these

locations,” says Stevens. “There was a quarterly drop of 3 per cent on Shaikh Zayed Road, which translated to an

annual rental decrease of 6 per cent. While Barsha Heights, Bur Dubai and Business Bay all witnessed a 5 per cent

fall in rents.”

Asteco also reports that sales prices in Barsha Heights, Dubai Silicon Oasis and Jumeirah Lakes Towers (JLT)

showed no quarterly change, compared to an 8 per cent drop in prices in DIFC and 5 per cent in Business Bay.

Preleasing of commercial offices continues to be subdued, but Reason says companies are still looking at the long

term when investing in real estate in Dubai, noting that grade A fitted office spaces have performed significantly

better than shell and core, as occupiers are still constrained on their ability to expend capex.






According to JLL, office buildings in onshore areas and free zones with direct access to Metro stations, ample

parking and amenities and large floor plates remain in high demand. “Furthermore, dual-licensed buildings

offering both offshore and onshore licensing options continue to gain traction,” says Dana. “Challenges, however,

continued for office product on the periphery of the city, in older areas and in strata-titled buildings for which

there is less demand.”

Chestertons, meanwhile, reports that office sales in areas it monitors decreased by an average of 5 per cent

during the second quarter, with the highest decline recorded in JLT at 15 per cent. “Despite the growth of sales

values, rents were still under pressure and dropped by 3 per cent on average,” says Ivana Gazivoda Vucinic, head

of advisory and research at Chestertons Mena.

Compared to the previous quarter, Vucinic says that office sales declined by 7 per cent on average in terms of

volume and 17 per cent in value, which she says is a sign of a correction.

Key sectors

Outside of DIFC, Knight Frank points to pharmaceutical and health care organisations as key drivers of demand in

the first half, with engineering and architectural firms also seeing significant movement.

“Moving forward, we expect movement of audit companies, law firms and consultancies to take advantage of the

DIFC dual licensing as the blue chip firms look to consolidate to a central headquarters,” says Reason.

Meanwhile, technology, IT and media companies, as well as legal and consultancy firms, remain either stable or in

growth mode. “They often seek space in established free zones or in Dubai’s central business district. We believe

this trend will continue in the medium term,” says Dana.

Demand from the financial services sector remains subdued and while there has been relatively little demand

from oil and gas companies, Dana says this is a relatively small sector in Dubai.

A raft of international companies are expected to set up businesses in Dubai in preparation for the World Expo

2020, potentially increasing orders and demand. “The macroeconomic environment should become less of an

issue as businesses adapt to a new pricing strategy to overcome the drop and knock-on effect of low oil prices,”

says Stevens.

New supply

With 2.5 million sq ft to be delivered this year, the total supply could reach 3.2 million sq ft, according to Asteco.

Much of the supply will be from Dubai World Trade Centre’s new dual licensed buildings.

“In some areas, we have seen oversupply have an adverse impact on sales and rental prices,” says Stevens.

“Business Bay, for example, which has a significant amount of existing and upcoming office space, saw a year-on-

year rental decrease of 5 per cent, while from a sales perspective, prices dropped by 16 per cent during the same

period.”

However, Dana says future supply levels do not represent a significant threat of oversupply.

Outlook

JLL predicts rental rates in Dubai for the remainder of the year to remain relatively flat. “There are many

established companies in the UAE looking to optimise their occupancy strategies as part of their plans in Mena,”

says Dana. “As landlords are willing to provide additional attractive terms in return for long-term commitments,

we expect the high level of activity to continue for the remainder of the year.”

Industry observers note that weakened oil prices have caused businesses to either consolidate their operations or

downsize, leaving notable vacancy levels in the market. “We expect the market to remain flat in the coming

months with recovery expected in the latter months of 2018,” says Vucinic.






Knight Frank also anticipates minimal improvement for the remainder of the year, but still expects the market to

be better than the previous year. “In the run-up to Expo 2020, we would look to expect greater performance from

areas such as Dubai South, as the residential communities and overall infrastructure improve,” says Reason.

The second half of 2017 is expected to hold many possibilities for tenants, but is likely to be a challenging year for

landlords, according to a Knight Frank report. The growth of REITs as a commercial investment vehicle is also

expected to bring further liquidity and is likely to attract more investors as it signals market maturity.

The emirate’s expanding landscape is also set to support future demand for office space with demand being likely

from the FMCG, Islamic banking and financial technology sectors. Demand for commercial office space in and

around Dubai South, meanwhile, is expected to gain traction with the expansion of Al Maktoum International

Airport and the Dubai Metro Red line.

Source: Gulf News

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ARABTEC SWINGS TO DH40M PROFIT IN

SECOND QUARTER 2017 Wednesday, August 9, 2017

Arabtec Holding reported on Wednesday Dh39.8 million in net profit attributable to owners for the second

quarter of 2017, marking a jump from the Dh186.4 million in losses recorded in the same period in 2016.

The figure marks the second consecutive quarter of profits for the construction giant following over two years in

the red, during which the company accumulated around Dh4.6 billion in losses.

Second quarter results brought profits in the first half of this year to Dh57.4 million, up from the Dh232.8 million

in losses recorded in the first half of 2016. The rise was supported by lower costs that fell nearly 10 per cent in the

second quarter of 2017, the company said in a statement. It added that the profits so far this year come as

Arabtec completed in June a recapitalisation programme aimed to turn around financial performance.

Arabtec’s revenues, however, in the second quarter were nearly 6 per cent lower year-on-year, reaching Dh2

billion. Revenues for the first six months of the year were Dh4.2 billion.

“We will also remain on track to optimise the delivery of our Dh17.4 billion backlog, and continue to work on

turning risks into opportunities through the resolution of legacy claims and collecting receivables,” Hamish

Tyrwhitt, Arabtec’s group chief executive officer, said in a statement.

He added that the completion of the recapitalisation programme leaves the company to “focus on risk

management and business transformation.” The programme included a Dh1.5 billion rights issue and a capital

reduction measure to extinguish losses.

In a presentation to the Dubai bourse website on Wednesday, Arabtec said that over the rest of 2017, it plans to

dispose of non-core investments, recycle capital to generate cash and sustainable returns and implement an

action plan on legacy claims. Arabtec said it has already refocused on its core competencies and key geographies,

and established a treasury plan, among other steps. The rebound to profitability and the updates on the

company’s plans, however, failed to excite investors, with Arabtec’s share prices falling 2.26 per cent to close at

Dh3.46 on Dubai Financial Market on Wednesday.

“The new management set out a vision with the start of the year, and so far, they’ve delivered, but the problem is

that the value now is a bit too rich … Is it reasonable to be buying at three times the book value and 50-odd times

earnings?,” said Sanyalaksna Manibhandu, director of research at the National Bank of Abu Dhabi Securities.

Arabtec’s share prices spiked overnight in late June from less than Dh1 to Dh3 as shares were repriced to reflect

the reduction in the company’s capital, a move that took 4.6 billion shares off the bourse. However, even with the

reduced number of shares, Manibhandu said prices were still rich considering the company’s earnings.

“The actual results today [Wednesday] were better than my estimates, and because of that, I’ve had to adjust my

estimates for the second half,” Manibhandu said. “There’s now tighter control over costs, and I think the revenue

they are bringing in is perhaps more sustainable than before. But still, the question that investors have to ask is:

are they going to pay multiples at this current price?”

Source: Gulf News

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DUBAI NON-OIL ECONOMIC GROWTH

INDEX SLIPS SLIGHTLY Wednesday, August 9, 2017

Emirates NBD Dubai Economy Tracker Index, a key measure of the emirate's private non-oil economic health

dipped slightly in July as the pace of employment stagnated, however growth momentum outlook remains robust.

The composite indicator fell marginally to 56.3 in July from 56.5 in June. A reading below 50 suggests that the non-

oil economy is generally declining, whereas a reading above 50 indicates that it is expanding.

“While the headline index continues to reflect strong growth in the non-oil economy in July, firms’ margins

continue to be squeezed as they lower selling prices, particularly in the trade and hospitality sectors," said Khatija

Haque, the head of Mena research at Emirates NBD. "Employment growth remains soft overall.”

Growth in the non-oil private sector in July was boosted by gains in the wholesale and retail industries index which

stood at 57.9 last month. That was followed by travel and tourism at 56.3 and the construction at 54.8.

The report noted that there was still a sharp increase in output despite the slightly slower pace than June. Those

gains were attributed by respondents to an increase in projects and more favourable economic conditions.

New business expanded at the fastest pace since April as a result of promotional activities and stronger

underlying demand conditions, respondents told the surveyors.

Still, job creation continued to be slight as it has been over the past five months despite the surge in expansion

witnessed over the same period.

The growth in July however is another indicator of an improving local economy which in recent years has stalled in

the wake of the collapse of oil prices.

Despite reverberations from subdued oil prices after crude entered a bear market on the back of an increase of

supply globally, the non-oil economy of the UAE continues to perform well thanks to a rise in global trade,

tourism, as well as spending and investment in infrastructure ahead of the Dubai Expo2020.


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HOW CAN A DUBAI TENANT ENSURE HIS

COMMERCIAL LANDLORD ACCEPTS HIS

NOTICE OF TERMINATION? Wednesday, August 9, 2017

I have given a notice of termination to the landlord through email and registered post. We don't have a physical

address, only a PO Box. This is for a commercial villa and we have had no response from the landlord nor an

acknowledgement of the communication, which was sent over to him. Please note that this is a long-term tenancy

and it has a clause of a two-month notice for termination. The next rental cheque is due soon. Kindly advise me

on the process of getting the landlord to accept the termination notice and if not, what other means do I have to

get released from the tenancy contract? RP, Dubai. Sending communications for reasons of terminating a tenancy

contract electronically is perfectly acceptable from a tenant to a landlord. However, the 12-month notification to

vacate sent by a landlord to a tenant has to be sent via notary public or registered mail. Presumably your notice

wishing to terminate is within the two months notice clause in your contract. This being the case, you have

fulfilled this part of the agreement. What you do not mention is if there is a penalty to terminate early. It is clearly

not helpful when a landlord remains silent but you must get hold of him to effect the vacating process, so keep on

trying.

Let’s consider if he continues to ignore your messages/communications. As time gets closer to the next rental

cheque payment, you clearly do not want to fall foul of the law, but you have little or no choice but to make sure

the next cheque is not honoured, otherwise you run the risk of losing this sum. If the rental payment is not made,

the landlord has no choice but to get in touch with you. Even if he doesn’t make contact but goes to file a police

case against nonpayment of rent, you can defend yourself by showing the communications he has chosen to

ignore. One very important point here, you must not continue to occupy the villa if you have not paid rent so

make sure you vacate as per your notice and put all your affairs in order before the next rental payment is due.

Sorting out your deposit and other incidentals can be dealt with at a later stage.

Your other option can be to file a case at the Rental Dispute Settlement Committee (RDSC). This way the RDSC can

force the landlord to accept the terms of the contract and release you. This option could take you beyond the

date of your next rental payment and will cost you 3.5 per cent of the annual rental amount. I have a property

which we bought while it was rented out. Last year, we renewed our tenant's contract and also sent him a 12-

month eviction notice as we planned to move in ourselves. Our situation has now changed as our stay in Dubai is

no longer definite. We gave our current tenant the option to extend his tenancy but he wishes to move out. Can

we then look for a new tenant (with the same or a decreased rent) or would we run into legal tangles with the Real

Estate Regulatory Authority (Rera)? MO, Dubai. You appear to have done everything in the correct manner so far,

especially in offering to renew the tenancy to the current tenant. Despite originally serving the 12 month's eviction

notice for reason of self occupation, given that he now no longer wishes to renew, you would be free to market

the property to find a new tenant. When it comes to the level of new tenancy, the rent is determined by the

market price. If you wish to offer the rent at a reduced amount, this is entirely up to you and you will not have

issues with Rera.


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WHY INDIANS ARE INVESTING BIG IN DUBAI

PROPERTY Tuesday, August 8, 2017

In less than 40 years, Dubai has transformed from a local trading community into one of the most inspirational,

exciting and successful cities in the world. It continues to make global headlines as an immensely attractive

destination for tourists, investors and businesses alike.

With recent economic changes in India and the lack of incentivised benefits for investments, especially in the real

estate sector, Indian investors are looking for alternate means to achieve higher returns on investments from

different avenues. As such, they are setting their sights on Dubai.

Due to its diverse population and cosmopolitan lifestyle, Dubai offers residents and businesses a unique

environment enriched with hundreds of cultures and a quality of life and work unrivalled in the Middle East. This

encourages potential investment from around the world, especially India.

In recent years, the trend of Indians investing in Dubai has surged due to the exponentially increasing property

prices in India. Almost 25 per cent of foreign investment in Dubai real estate is contributed by Indians. Indians

topped foreign real estate investments in Dubai last year, making Dh12 billion worth of property transactions

across 6,263 investors. As per a recent report from the Dubai Land Department, they are still the leading foreign

investors along with Pakistani, British, Chinese and Canadian nationals, having bought Dh26.8 billion worth of

properties in Dubai in the first half of 2017.

There has been a 12 per cent growth in the number of Indian travellers to Dubai despite demonetisation and cash

pressures. Given the recent developments, the repercussions have lowered sales in the Indian real estate sector.

Post demonetisation last November, Indian investors who wish to invest in second homes or deploy their

recently-converted old money to new money have limited options to achieve higher returns in India.

In Dubai, Indian investors can avail of tax-free returns of eight to 10 per cent and sound capital appreciation as

the dirham is pegged to the US dollar and unaffected by currency fluctuations. Additionally, under the Reserve

Bank of India's 'liberated remittance scheme', an Indian investor can transfer $250,000 legally per year. A couple

can send $500,000 every year. This amount can fetch a fantastic property in Dubai. The ease of registering a

property in Dubai in comparison to India is much better and one is entitled to a residence visa on investing Dh1

million in this city.

Property prices in Dubai are very economical as compared to India. A property in a prime location in the city of

Mumbai costs anything between ?40,000 to ?55,000 per sqft, a property in Delhi will range up to ?36,000 per sqft

and in Bengaluru, it ranges between ?19,000 and ?27,000 per sqft. Dubai offers property investments in the centre

of town at a starting price of Dh1,480 (?25,000) per sqft.

Besides, all apartments here are sold in terms of carpet area while in India, it is sold as built-up. In addition, car

park is given for free here. In India, it is charged separately. In Dubai, most apartments come with fittings and

fixtures whereas in India, properties usually come shell and core.

So, when you add all this up, you get a fantastic deal in Dubai and much higher value for money. As of today, you

can buy only a 99sqm land plot in Mumbai for $1 million versus a 162sqm land parcel in Dubai for the same

amount.






Dubai has been a hotspot not only for businesses but also for sectors such as tourism, real estate, etc., for the

past few years. The city is considered a viable international hub because of its steady economic growth, good

infrastructure, city planning and ease of access to the rest of the world. Its inclusive culture and tolerance for

multiple nationalities is welcoming.

Indian investors will benefit from Dubai being considered the most sustainable city in the region and a haven in

terms of real estate investment.

Don't forget, there are close to 200-odd flights a week to and from India, with an average flight time of only three

hours.


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IDLE DUBAI HOMES MAKE AN ACTIVE

COMEBACK Monday, August 7, 2017

Dubai has had its share of homes that remain vacant for most part of the year. Referred to as 'shadow inventory',

such homes have existed in Dubai since the early years of freehold ownership. According to a recent

Propertyfinder report, shadow inventory is being added back to the rental market in Dubai as capital appreciation

ebbs.

The owners of shadow inventory fall into two categories - those who bought for investment purpose and are

waiting for the right time to exit and those that bought the unit as a holiday home and don't want to deal with a

tenant.

"There has been an increasing number of shadow inventory that has come to the market. However, the units still

only make up a small percentage of the overall new instructions we see. I don't think it's a new trend. If you go

back five to six years, there were a lot more empty apartments and villas than than there is now. These are not

units that have just been handed over. They are at least a couple of years old and never lived in," says Lewis

Allsopp, CEO of Allsopp & Allsopp.

"Shadow inventory could include homes that are not yet sold or rented for a long time. These residential units

may be undergoing foreclosure or are already owned by a bank or government agency to be auctioned at a later

stage. However, other scenarios include landlords waiting for the right time to sell or rent their unit, second

[winter-sun] homes or homes that will be converted into short-term holiday lets," observes Haider Tuaima, head

of real estate research, ValuStrat.

These properties are typically based in prime areas such as Downtown Dubai, DIFC, Dubai Marina, Jumeirah

Beach Residence and the Palm Jumeirah. These are areas that were first launched in Dubai and where a lot of the

initial investment came into.

Shadow inventory is mostly found in the form of apartments in Dubai. "We used to see shadow inventory in villa

areas and while there are still some, they have mostly been either let or sold now," adds Allsopp.

Capital declines

These high-end locations suffered the most capital declines during the three-year market correction. According to

ValuStrat, capital values declined 14.4 per cent on average since their peak during the first half of 2014.

So, it comes as no surprise that shadow inventory is being released to the market.

"Those who bought homes for investment and are waiting for the right time to exit are coming to terms with the

fact that they may have to hang on for longer than they thought. In terms of the global economic situation, there

is quite a bit of uncertainty. This is playing on the minds, and maybe even pockets, of some owners and is another

reason why the owner of an empty property will decide to sell or rent. On the whole, there is more of a lean

towards renting the properties than selling them," informs Allsopp.

An increasingly popular trend is for shadow inventory to be put into the market as a short-term let or holiday let.

Here, the owner will get increased returns and more flexibility with the availability of the property. For owners

opting to sell, the right price is the primary motivation. "As with any maturing market, sellers here are getting






flexible and less speculative. Most sellers have strong confidence that the property market will be a different

game in the run-up to Expo 2020," says Parvees Gafur, CEO of Trustworthy Real Estate.

Who is buying?

End-users are mostly buying shadow inventory with a mortgage and looking to live in it. The days of quick profits

are largely gone. So, for the most part, investors are not buying these units.

Owners of vacant homes not only face a loss of rent, but they also incur annual service and maintenance charges.

"Quite a bit of money will have to be pumped into each property on a yearly basis. There is only so long it can go

on before an owner will decide that either selling the property or renting it out is going to be a better option,"

adds Allsopp.

For instance, real estate agents Allsopp & Allsopp has listed an upgraded penthouse in Dubai Marina. "The

owners were going to use it as a second home but their plans changed and they left it empty for a number of

years. They have brought it to the market only now," the CEO adds.

However, shadow inventory is only a small contributor to the rent decline witnessed in Dubai now. A big reason

for the rent drop is an increased supply, but this is mostly coming from recently handed over developments.

"Rents generally follow the sales market, although, with one-year delay or perhaps more. Additionally, rents have

been negatively affected due to the volume of fresh residential supply in the market," concludes ValuStrat's

Tuaima.


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SMALL HOMES FETCH BEST YIELDS IN

DUBAI Monday, August 7, 2017

The city of Dubai attracts property investors from around the world as residential rental yields in some areas are

higher than other global investment destinations such as Manhattan, London and Singapore.

On closer analysis, it is found that affordable freehold communities offer the best gross yields in town -

International City at 9.16 per cent and Discovery Gardens at 8.85 per cent. Other communities that offer mid-tier

housing such as International Media Production Zone, Barsha Heights, Jumeirah Village Circle and Dubailand also

offer gross yields close to eight per cent and above, according to statistics from property consultancy Cavendish

Maxwell.

"Discovery Gardens and International City fall under the category of affordable housing and, therefore, are in high

demand for tenants, which leads to high yields for investors. Compare this to Dubai Marina where demand is high

and offers a healthy yield, but due to lower ticket size of investment vs lesser differential ratios in rents across

Dubai, the yield percentage for Discovery Gardens and International City becomes higher," explains Mansi

Saxena, marketing director, SPF Realty.

Usually, prime areas have the lowest yields and non-prime areas tend to have higher yields. For instance,

Downtown Dubai offers a gross rental yield of 5.62 per cent and Business Bay of 5.85 per cent.

"Distance from a central business district, limited amenities and high vacancy are some factors in non-prime

areas that lead investors to assign higher risk and, therefore, higher yields to these areas," observes Manika

Dhama, senior consultant at Cavendish Maxwell.

"Affordable housing is a segment that is under-serviced in Dubai and will continue to deliver good yields," says

Sanjay Chimnani, managing director, Raine & Horne Dubai.

Villas vs apartments

Villas offer lower yields since they are usually end-use products and internal maintenance, if unoccupied, could be

high. Villa communities such as Jumeirah Islands offer gross yield of 3.67 per cent, Palm Jumeirah 4.68 per cent,

Jumeirah Golf Estates 4.87 per cent and Mohammed Bin Rashid City 5.10 per cent, according to Cavendish

Maxwell data.

"Villas usually attract investors who are looking to invest and retain the property for the long term, use it for

rental earning or most likely move in at a later stage. However, the net return on apartments in Dubai is around

seven per cent to 10 per cent, which is always higher than that of villas, which ranges from about five per cent to

eight per cent at the maximum," informs SPF Realty's Saxena.

Properties in Dubai can be counted on to fetch better gross rental returns than capital appreciation. With price

declines continuing across the Dubai residential market over the past 18 months, there is limited capital

appreciation opportunity at present.

"Capital appreciation depends on the area of investment. Typically, off-plan offers higher capital appreciation. As

an area develops in terms of infrastructure, amenities, things to do, etc., the perceived price goes up, resulting in

higher capital appreciation," adds Saxena.

So, what should investors chasing yields watch out for when zeroing in on a property?






What to watch out for?

"Yields can be impacted by operating costs related to the property. For instance, in some buildings, chiller charges

are borne by the landlord and not the tenant. Therefore, the emphasis should always be on net yield," says

Dhama.

She adds: "For residential properties, factors such as proximity to central and secondary business districts,

building quality as well as occupancy should be taken into consideration. Also, different unit types in the same

location operate at different yields and hence a study of underlying factors impacting rents in the area as well as

differentiation between unit types is needed."

Investors should also consider liveability from a tenant point of view. Access to schools, public transport,

supermarkets, etc., make a house easier to rent and, therefore, will likely give a high yield.

"The average price per sq ft vs average rent in the area or similar area should be looked at as that is directly

linked to the yield. Other things that matter are size of the apartment - for example, one-bedroom and studio

apartments typically give better yields," adds Saxena.

"Completed communities will always offer a better yield than ones that are still under construction or/and where

amenities are still not available," concludes Chimnani.


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DUBAI CHAMBER HOSTS WORKSHOP ON

VAT COMPLIANCE IN UAE RETAIL SECTOR Thursday, August 10, 2017

The Dubai Chamber of Commerce and Industry on Tuesday organised and hosted a workshop in cooperation

with the UAE's Federal Tax Authority which aimed to familiarise retailers in the country with the forthcoming

value-added tax (VAT), as well as mandatory registration procedures associated with the new tax.

The workshop, hosted at the Chamber's premises, was attended by over 400 participants representing various

retailers in the UAE. The event is part of the second phase of the joint effort by the Ministry of Finance and the

Authority's tax awareness programme, which aims is to keep the UAE's business community informed on new tax

laws and compliance procedures.

Khalid Ali Al Bustani, Director General of the Federal Tax Authority, said: "This workshop marked the begining of

the 2nd phase of the tax awareness campaign launched by the Ministry of Finance and the Federal Tax Authority

back in March, which was successful in achieving its objectives of educating retailers in the UAE about tax

procedures, businesses' tax obligations, the FTA's role in the implementation process, and the VAT's contribution

towards a more sustainable and diversified economy."

The FTA's Director General thanked Dubai Chamber for its support in organising and hosting the workshop, and

emphasised the important role that the Chamber plays in keeping businesses in the emirate informed about

important regulatory developments. He added that the future workshops would be hosted to raise awareness

about the UAE's new tax system in other economic sectors and help them prepare for VAT before it comes into

effect in January 2018.

Atiq Juma Nasib, Senior Vice President of Commercial Services at Dubai Chamber said: "Hosting these types of

workshops is a crucial part of raising awareness about the requirements that UAE-based businesses will need to

fulfill to prepare for VAT. The highly attended first workshop reflects a maturing private sector that is keen to keep

pace with regulatory changes in the country."

Nasib stressed the Chamber's commitment to supporting the development of business in Dubai, and enhancing

the competitiveness of the emirate's private sector, adding that the organisation plays a critical role as bridge

between the public and private sectors. A second workshop on VAT compliance for importers and exporters will

be held at the Chamber's premises on August 22, 2017.


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FIVE STEPS AND AS LITTLE AS THREE DAYS

TO GRAB A BUILDING PERMIT IN DUBAI Sunday, August 12, 2017

Sheikh Mohammed bin Rashid, Vice President of UAE and Ruler of Dubai, has ratified a shortened building permit

process, helping to further enhance the emirate’s real estate sector.

The strategy, initially announced in February, has five steps requiring all the involved public authorities to reply to

submitted applications within three days for each step, dependent upon the consultant and contractor meeting

all requirements. The assistant director general of Dubai Municipality of Engineering and Planning, Daoud Al Hajri,

said that the committee overseeing the process has formed four teams to revise the process as needed.

One team will work on developing the new building regulations based on customer and company feedback. The

other teams will look into licensing of consultancies and contractors, ensuring compliance of building materials,

and analysing bids from IT firms to develop an electronic payment system.

The Emirate's strategy on building permit procedures is based on three pillars: the development and streamlining

of permit procedures, bringing together systems and requirements, and providing a “one-stop shop” where the

complete permit process from A to Z can be completed.

In the future, contractors and consultancies will have a streamlined building regulatory framework in place

providing a comprehensive guideline. This will be executed via an advanced electronic platform, in line with the

Smart Dubai initiative.

Part of the emirate’s Smart Dubai initiative is to increase digitisation within government offices. The government

released a Dubai data economic impact report earlier this year that said open and shared data had the potential

to add more than Dh10 billion to the economy annually. “This estimate includes the impact of publishing and

sharing both private and government sector data. That’s an additional Dh4,000 per person added to the

economy,” the report said.

The government said that by opening government data alone, the added value would be Dh4.3 bn to Dh6.6bn

annually as of 2021. “It is clear that the big value drivers of impact for Dubai are the transport, storage and

communication sector; the public administration sector; wholesale, retail trade, restaurants and hotels sector;

and the real estate sector,” the report said.


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AZIZI DEVELOPMENTS COMPLETES AND

DELIVERS DH350M PROJECT ON PALM

JUMEIRAH IN 22 MONTHS Monday, August 7, 2017

Azizi Developments has announced the completion of Azizi Royal Bay, a Dh350million residential property project

at Palm Jumeirah, in 22 months. This makes it the sixth project to be delivered by the developer.

Since the start of the year, the property developer demonstrated a faster pace of completed projects, with

handovers of 1,000 units in Dubai. It is expected to hand over five more projects for the remainder of the year

and 80 projects before 2020.

Farhad Azizi, CEO, Azizi Developments said: “We are very excited to hand over yet another project in Dubai and

this reflects our capabilities to deliver our properties on time. The remainder of the year will see us delivering

more projects. Construction work is underway in a number of our projects across prime locations in Dubai and, in

the run up to Expo 2020, the next few years are a critical period for us.”

Source: Gulf News

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DUBAI REAL ESTATE PROJECTS WORTH

DH21B LAUNCHED IN FIRST HALF Sunday, August 12, 2017

Dubai Land Department, DLD, has announced that a total of 88 real estate projects have been launched from the

beginning of 2016 until the first half of 2017.

In a statement, DLD confirmed that 68 real estate projects were registered during the first half of 2017,

representing a value of Dh21 billion.

Sultan Butti Bin Mejren, Director-General of DLD, said, “Dubai is currently witnessing increasing interest from

international investors, which has reinforced confidence in our real estate sector and its future prospects.”

Bin Mejren added that 713 developers are registered in DLD’s database, alongside a total of 483 projects.

Emphasising the vitality of Dubai’s real estate market, Bin Mejren explained that since the establishment of the

Real Estate Regulatory Agency, RERA, ten years ago, 535 projects of various sizes have been completed,

supporting a variety of economic activities in Dubai. The first half of this year also witnessed the completion of 24

projects that had been initiated in previous years.

The figures reaffirm the momentum and sustainability of Dubai’s real estate market, which is following an upward

growth trajectory. Contributing local factors include the development of ambitious infrastructure projects, and the

atmosphere of security and tranquillity that continues to define Dubai and the wider United Arab Emirates.

Source: Gulf News

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EXPANSION OF DEWA'S JEBEL ALI PLANT

ON TRACK Sunday, August 12, 2017

Saeed Mohammed Al Tayer, managing director and CEO of the Dubai Electricity and Water Authority (Dewa), has

reviewed the progress of the M-Station expansion project.

M-Station is the largest electricity generation and water desalination plant in the UAE. Al Tayer was accompanied

by Nasser Lootah, executive vice-president of generation; Mansour Al Suwaidi, vice-president for project

generation; Masoud Kamali, project manager; Adel Shukralla, senior manager of projects at M-Station; and Majed

Abdullah, senior manager of administration (fire and security).

Al Tayer was briefed by Siemens representatives on the construction, engineering and operational progress of the

project, which is going according to schedule.

Over 70 per cent of the project has been completed. This includes pouring 45,000 cubic metres of concrete (96

per cent complete), erecting 4,900 tonnes of structural steel and heavy metal work (75 per cent complete) and 8.3

million safe man-hours without any injuries.

Since 2015, the Dewa has been working with Siemens on the Jebel Ali M-Station expansion. The total cost of M-

Station construction and expansion is Dh11.5 billion.

The station's total capacity will reach 2,885MW when expansion is completed in 2018.

The Dewa is working to build a robust infrastructure to enhance its total production capacity, which is currently

10,200MW of electricity and 470 million imperial gallons of desalinated water per day (MIGD).

M-Station has a current total capacity of 2,185MW of electricity and 140 MIGD.


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TENDERS WORTH DH10B PROCESSED IN

ABU DHABI Monday, August 7, 2017

The Department of Finance — Abu Dhabi (DoF) has announced that the ‘Al Maqta’a bidding hall’ processed

tenders worth more than Dh10 billion, from ten different government entities in Abu Dhabi, during the first half of

2017. The tenders managed by ‘Al Maqta’a bidding hall’ included infrastructure projects in Abu Dhabi.

The Al Maqta’a bidding hall was established in June 2015 for capital and operational project tenders.

The aim behind its establishment is to enhance transparency, competitiveness, and openness pertaining to

tenders issued by Abu Dhabi-based government entities which are of a value of more than Dh100 million.

Source: Gulf News

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MADINAT ZAYED SHOPPING CENTRE TO BE

REFURBISHED Monday, August 7, 2017

Line Investment and Property LLC has signed a contract to invest in, and operate, the Madinat Zayed Shopping

Centre in the capital, and will spend Dh42 million refurbishing the mall.

According to an agreement signed today (August 7) with the emirate of Abu Dhabi’s municipal sector regulator,

the Department of Municipal Affairs and Transport (DMAT), the shopping mall development and management

division of Lulu Group International will invest Dh810 million over the next 10 years into the Centre.

In turn, it will receive 10 per cent of the estimated yearly revenues in as much as Dh129.8 million, a statement by

the DMAT announced on Monday.

The shopping centre is one of the capital’s oldest malls, and today houses a range of outlets, including a, an Abu

Dhabi Cooperative Society supermarket, a furniture retailer, and a host of smaller mobile phone, tailoring,

textiles, perfumery and accessories stores.

The centre is also known for housing the Gold Centre, which is home to many gold and silver jewellers, and a

relatively recent expansion saw the development of a large food court and a Lulu Hypermarket.

Located in the heart of downtown Abu Dhabi, the centre is a popular venue and caters largely to middle- and

lower-income earners. It however lacks comprehensive parking options, and other facilities like restrooms and

praying facilities are underdeveloped.

Under the new contract, extensive refurbishment will therefore be undertaken to spruce up the mall.

“This project is part of the Municipality’s efforts to extract the best results from ventures with strategic partners

who are the backbone of the economy,” the DMAT statement said.

Line Investment currently manages five malls in the capital alone, including the wildly popular Al Wahda Mall, as

well six other facilities in Al Ain, Ras Al Khaimah and the Middle East.

Source: Gulf News

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WRITING A WILL IN ABU DHABI Wednesday, August 9, 2017

With advances in the UAE legislation, every emirate is now gearing up to ensure that expats are able to protect

their assets. With the Dubai International Financial Centre (DIFC) already offering services to expatriates in Dubai

and Ras Al Khaimah, Shaikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Chairman of the Abu

Dhabi Judicial Department, recently approved changes that allow non-Muslim expats in Abu Dhabi to determine

how assets are handled upon death.

Currently, the Abu Dhabi system is not yet ready, but the government has agreed in creating wills in English for

non-Muslims. These changes came into effect after decisions were made to modify the rules governing wills in

Abu Dhabi. So far, there have been no definitive means to determine the registration and execution of wills that

were drafted in the UAE capital. Although laws of inheritance from an expat’s home country can be applied, this is

still a very tedious process. In the case of an eventuality, assets of the owner are frozen by default. Moreover, as

per the law, all the dependent visas are cancelled by default. Also, the custody of minor children would require

local judicial intervention, and most of the assets/estate would go towards covering legal fees and liabilities.

Hence, it is recommended for every individual to be on an independent visa.

A legislative framework was recently introduced to avoid disputes over custody of children, passing on of estate,

asset and other belongings. Earlier, in most cases, Sharia was applied and this led to all assets being frozen for a

long time before being split between the heirs. Contacting all applicable heirs and beneficiaries would usually

result in delay. And it would prove to be particularly arduous in case there was a conflict regarding legal heirs and

natural heirs. The new amendments allow for wills to be registered in English for a fee of Dh500. In Dubai and Ras

Al Khaimah, only non-Muslims currently have the option of registering their will with the DIFC Wills and Probate

Registry, which will provide certainty in the case of an expat’s demise. In such a situation, all real estate will be

passed on to the appointed beneficiary. All these solutions are flexible, and appropriate legal advice will provide a

better understanding.

Establishing a registry of wills for non-Muslims will ensure legal protection by creating a flexible means for them

to determine how their wills are written and executed posthumously. The registry will also maintain data

concerning the testator, beneficiaries, witnesses and Emirates. In Abu Dhabi, the new amendments extend to

properties on Saadiyat Island, Reem Island and Yas Island. The law will encourage expats to look at Abu Dhabi as

a tolerant and accepting hub of culture and commerce. Introducing this flexible new legal framework has further

improved the image of Abu Dhabi as a multicultural destination.

Over the past few years, foreign investments have had a positive impact on almost all sectors of trade in Abu

Dhabi. A lot of expats in different countries have made extensive investments in real estate properties across the

emirate in the past several years. Foreign companies, with their branches across Abu Dhabi have brought multiple

job opportunities for expats from around the world. The expansion of the real estate market has also increased

the number of properties that expats are investing in.

With Abu Dhabi establishing itself as an ideal destination for business expansion, these legal reforms hope to

attract a greater influx of expats. This new change in legislation seeks to protect the rights and freedoms of those

belonging to varied faiths and beliefs. It is also recommended to create two wills if you have a company in Abu

Dhabi and a branch in any other emirate. This move ensures that all the assets and accounts are protected as per

the law of respective emirate.

Source: Gulf News

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MORE ABU DHABI TENANTS SWITCH TO

AFFORDABLE HOMES Sunday, August 6, 2017

Employment uncertainty and the rising cost of living are adding pressure on the residential leasing market in Abu

Dhabi. Residents are now tightening their spending and gravitating towards affordable housing, according to real

estate consultancy CBRE.

In Q2 2017, average house rents in Abu Dhabi declined by nearly 11 per cent year on year and three per cent

quarter on quarter. However, there is a high degree of market fragmentation, with upscale properties

experiencing larger drops of around 12 per cent, against more affordable properties which have declined

between six to 10 per cent.

Mat Green, head of research and consulting, CBRE Middle East, said: "As vacancy rates increase, rent declines are

also increasing, driven by the addition of new units in locations such as Reem Island, as well as various standalone

properties across the capital. As residents become more prudent in their spending, smaller units in cheaper

suburban locations are finding more favour."

The capital city's residential sales market is seeing declining values and low transaction volumes, with prices

falling four per cent during Q2. Al Raha Beach and Reem Island remain popular investment locations, with sales

rates ranging from Dh14,000 to Dh17,200/sqm. More affordable investment locations, such as Al Reef and Hydra

Village, have prices ranging between Dh8,400 to Dh12,175/sqm, and remain in high demand due to their lower

price point.

However, the delivery of new residential units over the next 12 months is likely to further dampen an already

weak sales market, with investors deferring their buying decisions anticipating further dips in prices.


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TOP 5 CHEAPEST PLACES TO RENT IN ABU

DHABI Sunday, August 12, 2017

The top five most affordable rental areas in Abu Dhabi revealed:

1. Khalifa City A - Khalifa City A, which is located around 45 minutes away from the city centre of Abu Dhabi, is a

good choice for families seeking affordable units to rent and is relatively close to various international schools.

Studios are available from as little as Dh26,000 a year, while one bedrooms are available from Dh35,000 a year,

two bedrooms for Dh55,000 and three bedroom unit for Dh76,000 a year.

2. Mohamed Bin Zayed City - Spacious apartments can be found in Mohamed Bin Zayed City (MBZ), near

Musaffah, Shabia, and close to shopping malls and dining restaurants.

A one bedroom apartment can be found for around Dh30,000 a year, a two bedroom unit for around Dh45,000

per annum, and three bedroom apartments for around Dh70,000 a year.

3. Al Zahiyah (Tourist Club Area) - Tourist Club area is a prime location in the city of Abu Dhabi, with numerous

hotels, shopping malls, hospitals and dining restaurants located only a few steps away from residential units.

Despite the heavy traffic and shortage of parking spaces, families can feel at ease finding affordable apartments

in the bustling city.

A 1bhk apartment can be had for around Dh38,000 a year, 2bhks for Dh45,000 approximately, and 3bhks for

around Dh70,000 a year.

4. Al Mussafah, Shabia Residential Area - Although Shabia is located in a busy industrial neighbourhood with

heavy traffic, particularly during rush hours, residents can find comfort knowing that the area has new buildings

and that schools, shopping malls and hospitals are only minutes away.

A one bedroom apartment can be rented for around Dh35,000 a year, a two bedroom unit for around Dh54,000 a

year, while a three bedroom apartment can be found for around Dh70,000 a year.

5. Muroor Area - Muroor is another area for families seeking affordable apartments for rent in Abu Dhabi.

Although the area often has heavy traffic and lacks parking spaces, other amenities like shopping malls, hotels,

restaurants and entertainment areas can be found in just about every corner.

A one bedroom apartment in Muroor area can be rented for around Dh35,000 a year, a two-bedroom for around

Dh48,000 a year, and three-bedroom apartments for around Dh75,000.


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MUAIRIDH BEACH TO GET A FACELIFT Thursday, August 10, 2017

The development works will be done in all the open beaches of the emirate in the coming period as part of the

department's plans to cope with the economic boom in the emirate,

The Ras Al Khaimah department of public works has unveiled a project to develop the popular Muairidh beach,

said a senior official.

Saeed Ali Al Kas, deputy head of agriculture and parks in the department, said the open beach will have new

recreational facilities, kids playing areas and sitting counters while green areas will be extended therein to add to

the scenic view of the place.

The same development works will be done in all the open beaches of the emirate in the coming period as part of

the department's plans to cope with the economic boom in the emirate, he added.

"The new recreational areas, sitting facilities and playing areas will be set up on a total area of 6,000 square feet."

The department is all set to expedite procedures and finish the much-awaited project in a record time; "hopefully

in September this year."

The project is in line with the department's plans to add more green areas to the emirate, he explained. "The new

facelift is expected to attract more tourists and visitors."

The Muairidh area is well known with its charming scenic views, green areas and tourist resorts and beaches, Al

Kas underlined.

"The department will also organise a number of functions, shows and exhibitions on the beach after the

completion of the first phase of the two-phase project this September."

Interlock walkways will also be built across the beach so that the public can easily walk to the sitting areas instead

of wading in the sand, he elaborated.

"Many other agricultural and recreational services will be added along the beach for people's convenience."

Adnan Ukasha, a Jordanian resident, said the expected facelift will add to the glamour of the beach. "I always

accompany my family to the Muairidh beach every weekend to enjoy to fine weather and view."

Abdullah Al Suri, an Emirati national, said they have much awaited this move. "The development works of the

beach will attract more tourists and visitors to the beach," he said, wishing to see free fast wifi service on the

beach.


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HONG KONG HOUSING BURDEN GROWS

EVEN HEAVIER AS HOME PRICES SOAR Tuesday, August 8, 2017

Living in the world’s most-expensive property market means having to set aside more than half your income as

mortgage payments. Hong Kong’s mortgage-payment-to-income ratio rose to 54.2 per cent in June, the highest

since 1998, figures from Centaline Property Agency show.

The low affordability is a result of the steep rise in home prices, which have kept soaring despite efforts by the

city’s leaders to impose restrictions to cool the market. A gauge of existing home prices, Centaline Property’s

Centa-City Leading Index, broke previous records Friday to reach 160.3. The index has climbed 11 per cent this

year and has surged more than 50 per cent in the past five years.

Debt-to-income ratios have surged in Hong Kong despite the fact that borrowing costs are far lower now than

they were two decades ago, with average mortgage rates that are less than half the level of 1998. As the Federal

Reserve follows on its path of increasing interest rates and Hong Kong follows suit, Hong Kong Monetary

Authority Chief Executive Norman Chan has urged potential homebuyers to consider the impact on mortgage

payments.

Source: Gulf News

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THAT WHOOSH IT’S THE GREAT CHINESE

PROPERTY PULLBACK Tuesday, August 8, 2017

That whoosh you just heard? It’s Chinese money pulling back from property in London to New York.

Capital centres globally should brace for tumbling real-estate prices as Beijing manages to do what Brexit and

higher interest rates haven’t. Reflecting tighter regulations, China overseas direct property investment could drop

84 per cent to $1.7 billion this year and about another 15 per cent to $1.4 billion in 2018, according to Morgan

Stanley.

Mainland money began piling into offshore commercial property in 2013. Land prices were expensive at home,

and investors wanted to find a hedge against a weakening yuan.

Another draw was the prospect of higher returns in cities such as Sydney where yield spreads — the difference

between rental yields and what government bonds pay — are higher. A slumping pound post June 2016’s Brexit

vote helped, too. While some marquee transactions are still being inked — think the purchase earlier this year of

London’s “Cheesegrater” tower by Chongqing-based, Hong Kong-listed CC Land Holdings Ltd. — their numbers

are dwindling.

A strengthening yuan, along with China’s One Belt One Road initiative that needs funding, will see many property

deals dry up. Over the past few months, Beijing has made it tougher to get money out, clamped down on more

fanciful transactions such as the buying of football clubs and luxury hotels, and is now going after some of the

country’s most prolific acquirers. Dalian Wanda Group Co., Anbang Insurance Group Co., HNA Group Co. and

Fosun International Ltd. have all included real estate in their global buying binges.

Against that backdrop, and with increasing foreign-government scrutiny thrown into the mix, it’s hard to see how

Chinese offshore real estate acquisitions can continue at such a pace. Domestic developers are already finding it

harder to tap international debt markets, and have been resorting to short-term securities instead.

This matters because Chinese capital accounted for one-quarter of commercial property transactions in central

London last year, up from 1 per cent a decade ago. China is now the second-largest foreign investor in the US

after Canada, and is responsible for between 12 and 25 per cent of all office transactions by value in Australia

over the last two to three years. In Hong Kong, Chinese firms have bought about 80 per cent of the residential

land sold so far in 2017, and have spent around $6.5 billion on office space from 2012 through 2016.

One sliver of good news — some Chinese companies have capital already stashed offshore with which they can

keep buying, plus there are other interested Asian parties around. London’s “Walkie Talkie” tower was sold last

month to Hong Kong’s LKK Health Products Group Ltd. And Sunac China Holdings Ltd., now the most indebted

developer after buying assets from Dalian Wanda Group Co., last week issued $1 billion of dollar bonds.

Whether that’s enough to offset the amount of money going the other way, however, is questionable. Investors

would be wise to stand well back.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Source: Gulf News

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AUSTRALIA SLAMS BRAKE ON PROPERTY

INVESTORS AND PRICES COOL Tuesday, August 8, 2017

One of the key engines of Australia’s five-year housing boom is losing steam.

Property investors, who have helped stoke soaring home prices in Australia, are being squeezed as regulators

impose restrictions to rein in lending. The nation’s biggest banks have this year raised minimum deposits,

tightened eligibility requirements and increased rates on interest-only mortgages — a form of financing favoured

by people buying homes to rent out or hold as an investment.

Australia’s generous tax breaks for landlords, combined with record-low borrowing costs, have made the nation

home to more than 2 million property investors. Demand from those buyers has contributed to a bull run that

has catapulted Sydney and Melbourne into the ranks of the world’s priciest property markets. Now, signs are

emerging that the curbs are starting to deter speculators — and home prices are finally starting to cool.

Take the case of 29-year-old Taku Ekanayake, a former IT salesman who owns six investment properties in cities

including Adelaide and Brisbane. He shelved plans to add a Melbourne apartment to his portfolio after rising

rates increased his annual mortgage bill by A$14,400 ($11,360). The biggest banks have hiked rates on interest-

only mortgages by an average of 55 basis points this year, according to Citigroup Inc.

“With the rate hikes I don’t think it is a very viable option for me to invest there now,” he said.

In other signs the market is cooling, property auction clearance rates in Sydney have held below 70 per cent in

seven of the past eight weeks, compared to as high as 81 per cent in March before the curbs were imposed. And

investor loans accounted for 37 per cent of new mortgages in May, down from this year’s peak of 41 per cent in

January.

That’s helping take the heat out of property prices, particularly in Sydney, the world’s second-most expensive

housing market. Price growth in the city slowed to 2.2 per cent in the three months through July, down from a

peak of 5 per cent earlier this year, CoreLogic Inc. said Tuesday. In Melbourne, rolling quarterly price growth has

eased to 4.2 per cent.

“There have been some signs that conditions in the Sydney and Melbourne markets have eased a little of late,”

the Reserve Bank of Australia said on Friday.

While the regulatory curbs are aimed at ensuring the financial system could weather any downturn in the

property cycle, they may also make it easier for first-time buyers to break into the market. Housing has become a

popular investment for Australians, who can claim the cost of an investment property — including interest

payments — as a deduction against other income, such as salary, and get a capital-gains tax discount if they hold

the property for more than 12 months.

The favourable tax treatment for investors has become a hot political issue, with young first-time buyers

protesting they are being priced out of the market. The opposition Labor party has pledged to wind back the

concessions if elected to office, while the government announced a range of policies in its May budget aimed at

addressing housing affordability.

Now, with costs increasing, and price growth slowing, property may lose some of its lustre as an investment asset.






The changes “reduce investors’ ability to pay, and means they have to pay owner-occupier values rather than

investor values,” said Angie Zigomanis, senior manager, residential property, at BIS Oxford Economics in

Melbourne. The restrictions will take “some of the bubble and froth” out of the market, he said, forecasting

median Sydney house prices will decline 5 per cent by the end of mid-2019 as investors retreat.

To be sure, investors aren’t exiting the market entirely. Ekanayake, who recently quit his job to start a mortgage

broking company, is now focusing on cities such as Brisbane and Adelaide where houses are cheaper, but haven’t

enjoyed the price-growth of Sydney or Melbourne. He says many of his clients are now looking for properties

where they can still make a profit with a principal-and-interest loan.

Even so, banks may need to get even tougher on lending standards in order to to meet the regulator’s order to

restrict interest-only loans to 30 per cent of new residential loans by September.

Interest-only loans are seen as more risky because borrowers aren’t paying down any principal and may look to

sell en-masse if property prices decline. Moody’s Investor Services in June cut the credit ratings of Australia’s big

four banks, citing interest-only and investment loans as an indicator of rising risk.

“We’ve already seen developers start to shift their efforts and focus more on owner-occupiers and less on

investors,” said Sophie Chick, head of residential research at Savills Australia. “The restrictions have really made

investors think twice.”

Source: Gulf News

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US HOUSING MARKET’S NEW DOMINANT

FORCE: BABY BOOMERS WHO WON’T SELL Tuesday, August 8, 2017

Jake Yanoviak is hunting for houses. On a weekday afternoon in North Philadelphia, the 23-year-old painter

cruises along on his bike, its black paint obscured under stickers from breweries and rock bands. He turns onto a

side street, where he spots a few elderly neighbours, standing on adjoining porches. He parks, leans on one

handlebar and makes his pitch.

“Anybody on the block considering selling?” Yanoviak asks gently. “I’m not a developer, I’m not interested in

renting to students. I’m just a kid trying to buy a house, fix it up and live in it.”

“We’re not going no place,” replies a 70-something woman, relaxing in fuzzy white pig slippers in the row house

where she’s lived twice as long as Yanoviak has been alive. “All these houses are taken.”

Like much of his generation, Yanoviak is desperate to get a piece of an increasingly scarce commodity: prime

American real estate. Millennials are finding themselves out in the cold because building has slowed, and longer-

living baby boomers are staying put, setting up a simmering conflict between the two biggest generations in US

history.

To succeed, buyers and real estate brokers must show uncommon persistence and, at times, diplomacy. Yanoviak

has tried sheriff’s sales, lost two bidding wars, ridden miles on potholed streets and left notes in mailboxes, all to

no avail.

People 55 and older own 53 per cent of US owner-occupied houses, the biggest share since the government

started collecting data in 1900, according to real estate website Trulia. That’s up from 43 per cent a decade ago.

Those ages 18 to 34 possess just 11 per cent. When they were that age, baby boomers had homes at almost twice

that level. Public policy contributes to the generational standoff. Property-tax exemptions for longtime residents

keep older Americans from moving. Zoning rules make it harder to build affordable apartments attractive to

senior citizens.

“The system is gridlocked,” says Dowell Myers, a professor of urban planning and demography at the University of

Southern California. “The seniors aren’t turning over homes as fast as they used to, so there are very few existing

homes coming online. To turn it over, they’ll have to have a landing place.”

In Lexington, Massachusetts, a Boston suburb, broker Dani Fleming offers pizza and refreshments to entice the

mostly elderly homeowners to attend seller seminars on “how to unlock the potential of your home.”

In Alameda, California, east of San Francisco, 38-year-old Angela Hockabout, her husband and their two children

live with her 76-year-old mother-in-law, who is holding onto the home because the real estate taxes are so low.

Under the almost-40-year-old ballot measure Proposition 13, they are tied to the property’s value when the house

was purchased in the 1970s. “Dear Homeowner, I have been looking to buy a house for almost a year and have

not found one.”

In Omaha, Nebraska, Bill and Peg Swanson, a couple in their late 60s, say they might move if they could find

affordable single-family homes aimed at seniors nearby. Still, like many from their generation, they like ageing in

place, tending their garden of green peppers, kale and tomatoes. “There are a lot of reasons to stay here,” Bill

Swanson says. “We still enjoy putting around the yard.” That kind of thinking ends up costing young home

shoppers such as Yanoviak. After graduating from Carleton College in Minnesota with a degree in media studies,






he now lives in West Philadelphia with his parents, an arborist and a director of a non-profit. For a living, he does

carpentry and helps paint movie sets. He’s looking at homes costing as much as $200,000 and may rent out

rooms to friends.

Yanoviak scouts property with Google Maps, Zillow and the city’s property-record site. When he finds something,

he calls his real estate agent, Cecile Steinriede, who checks it out. He also keeps an old-school sheaf of letters in

the rear pocket of his pants, so he can hand them out or slip them in mailboxes. “Dear Homeowner,” they read. “I

have been looking to buy a house for almost a year and have not found one.”

Yanoviak has his sights on a neighbourhood called Brewerytown, a community of brick, masonry and vinyl row

houses that range from tidy to decaying, with paint peeling, holes in roofs and weeds growing from cracks in

sidewalks. Along with inter-generational tension, Yanoviak’s search raises delicate questions of race and class.

He’s white and college-educated, and he’s often knocking on the doors of working-class black homeowners who

see their homes as key to an affordable retirement and a way to pass wealth to future generations. (None would

give their names.) Yanoviak acknowledges the awkwardness. It doesn’t help, he says, when developers assault

residents with insulting, lowball cash offers.

“It’s inevitable for me to be perceived as an outsider,” Yanoviak says. “But I’m not trying to change the community.

I’m trying to contribute in positive ways and be a neighbour.” Resentments fester in neighbourhoods of all

ethnicities. In a traditionally Italian section of South Philadelphia, which is now out of Yanoviak’s price range, 70-

year-old Nick Ingenito, sits on the front steps of the three-story brick house his grandmother’s aunt bought in the

early 1900s.

‘Wouldn’t Move’

“Where do these young people get this money?” he says, looking out at the street where he played stick ball as a

kid. “This neighbourhood still has the soul of the past. Everybody I know “- people older than me “- wouldn’t move

from here for nothing unless they couldn’t afford it no more.” On a recent Thursday evening after work, Yanoviak,

wearing a black T-shirt, jeans and a brown belt emblazoned with the Schlitz logo, mounts his bike to make the

housing round.

On one of his first stops, a black cat slinks under the wooden gate next to an abandoned house with bay windows

that piqued Yanoviak’s interest. Using his bike as a ladder, he stands on the seat and stretches his chin over

barbed wire. All he can see are bed springs and junk. Yanoviak starts cycling again, taking both hands off the

handle bar to tap on his iPhone, noting the address of a property he might want to revisit.

Church Properties

He stops to chat with the pastor of a church, which owns a handful of properties but isn’t selling. “No, we’re

holding out for God to do what he said he was going to do and that is to give us the block,” the pastor tells

Yanoviak. Then, he sees a grey-haired man puttering in his garage.

“I’m looking at properties in the neighbourhood, there isn’t a whole lot on the market so I’m cold calling,” Yanoviak

says. “Give me $2 million,” the homeowner replies. “I don’t want no low number.”

It turns out the price is for the whole block. Even then, the potential seller has second thoughts. “I wouldn’t sell

even if you gave me $2 million “- this is my retirement,” he says. “If you gave me a bag of money, I wouldn’t sell.”

After a few hours chatting with a half dozen owners and visiting eight properties, Yanoviak gets back on his bike,

his pitch letters still hanging from the back pocket of his jeans. He heads back to his parents’ house, deferring for

yet another day his search for a home.

Source: Gulf News

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ALIBABA, MARRIOTT TO TEAM UP TO TAP

CHINESE TOURISM BOOM Tuesday, August 8, 2017

Alibaba Group Holding Ltd is supercharging its fledgling travel service by partnering with Marriott International

Inc, the world’s largest hotel operator with some 6,000 properties globally.

The companies will set up a joint venture to feature Marriott’s entire line-up, from the eponymous brand to the

Sheraton and Ritz-Carlton, on Alibaba’s Fliggy site. The two will link their loyalty programmes and provide

promotions for Chinese travellers, they said in a joint statement.

China is now the world’s largest source of outbound travellers, a still rapidly growing populace that spent more

than $100 billion (Dh367.3 billion) in 2016 and is spurring changes across the global tourism industry. Their rising

numbers have fuelled a deals spree and spawned alliances between foreign hotel chains and domestic partners.

Marriott and its rivals are also hunting for ways to capture more guests and shore up loyalty, as they compete

with alternative providers such as Airbnb Inc. and try to reduce fees paid to the likes of Priceline Group Inc and

Expedia Inc.

“The most important piece though is the marriage of our respective areas of expertise,” said Arne Sorenson,

Marriott’s chief executive officer, declining to discuss revenue-sharing with Alibaba. “It’s really about how do we

service this already large but quickly growing group of global travellers, particularly Chinese travellers.”

Marriott shares climbed 1.1 per cent to $106.17 in New York. The Bethesda, Maryland-based company plans to

release second-quarter earnings after the market closes. Alibaba shares rose 3.6 per cent to $158.84.

The venture announced Monday strengthens an existing partnership between Alibaba and Marriott. Marriott tied

up with Alibaba affiliate Zhejiang Ant Small & Micro Financial Services Group in 2015, to let guests pay for hotel

stays and related items with Alipay on phones.

Under the new agreement, the e-commerce giant will highlight Marriott’s storefront on Fliggy and — drawing on

data on more than 500 million mobile monthly active users — help devise content and programs to draw in

increasingly affluent globetrotters. The global hotel chain may in turn help round out the offerings on Fliggy,

which Alibaba is building into a viable competitor to longer-established Ctrip.com International Ltd and up-and-

coming Meituan travel. Last week, Alibaba and Ant unveiled a wide-ranging cooperation agreement with Cathay

Pacific Airways Ltd.

“It’s an extension of our partnership to a new area,” Daniel Zhang, Alibaba’s chief executive officer, said in an

interview. “Both of us believe we can generate huge synergies from this strategic partnership.”

An estimated 122 million Chinese ventured outside the country in 2016 and spent about $109.8 billion, according

to the China National Tourism Administration, with key destinations including Japan and the US. The number of

visitors to the US alone is forecast to rise 15 per cent this year and next to an estimated 3.96 million in 2018 from

about 3 million in 2016, according to the US Commerce Department.

Marriott’s hoping to widen its slice of that market. It fended off Anbang Insurance Group Co last year to win the

bidding war for Starwood Hotels & Resorts Worldwide, the purchase of which made Marriott the world’s largest

hotel operator and gave it more luxury and lifestyle brands, a bigger presence outside the US, and a large cohort

of loyal guests, including a big share of higher-spending business travellers. Starwood had about 21 million






people in its frequent-guest programme at the time of the merger, and Marriott had about 56 million, with some

overlap between the two.

Its tie-up with Alibaba reflects the industry’s shift away from traditional industry middlemen. Hotels are offering

incentives for guests to book directly and to earn points through co-branded credit cards. Hilton this year teamed

up with Amazon.com Inc to allow members of its Honors frequent-guest programme to spend their points on

Amazon’s website, starting in July.

Source: Gulf News

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RICH PICKINGS IN GLOBAL REALTY Wednesday, August 9, 2017

On the lookout for new pockets of value in new and existing markets, Richard Bradstock is responsible for helping

investors in the Middle East fund lucrative opportunities around the world. He shares some of the most attractive

international real estate investment destinations.

US: Chicago and Los Angeles

“Chicago is a hidden gem in the real estate market, a market to which investors are beginning to pay attention,”

says Bradstock. “The city has the sixth-highest GDP among world cities and is expected to be the key US property

investment market through 2017.”

Bradstock points out that Chicago was recently named by UBS as the most undervalued global financial centre in

the world. “With property prices still 10 per cent below their 2007 peak and thriving technology, government and

education sectors, Chicago is a city that’s in major demand,” says Bradstock.

Furthermore, he explains that a very limited supply of new developments is expected. “We’re currently at a 30-

year historical low for the development and delivery of new condominium blocks. Double-digit annual property

price growth has been recorded in key neighbourhoods. Since July 2013, average condo prices have risen 21.2 per

cent, while prices at IP Global’s most recent Chicago project have risen 5-6 per cent since February 2015. These

figures are extremely encouraging for potential real estate investors.”

Recommendations

He recommends one- and two-bedroom flats in the CBD/The Loop, and three- to five-bedroom detached town

houses in the inner suburbs, which include a garden and parking.

The average property price in Chicago is around $222,000 (Dh815,486), whereas in Los Angeles prices can start

from $626,800.

Bradstock recommends getting a mortgage/financing consultant to provide comprehensive support throughout

every stage of the investment process.

Los Angeles

“With a population of 4 million in 2016 and a Gross Metropolitan Product of $888 billion in 2015, Los Angeles

represents a strong property market for investors; with its resilience illustrated by its relatively fast recovery

following the global financial crisis,” Bradstock argues. “In 2015 median sale prices surpassed their pre-recession

levels and continued development is expected. There remains room for growth as although condominium prices

were up 5 per cent year-on-year to October 2016, they remain 3 per cent below peak values.”

The Trump factor

In a growing global city such as Chicago, Bradstock says local residential property demand is not driven or

impacted by national government. “We expect to see a continued influx of international investors and buyers on

the lookout for safe haven markets like Chicago. Our usual advice to investors is to consider a hold period of five

to ten years anyway — which means that any short-term political shocks can be outlived.”

Mitigating risk

Bradstock recommends to diversify portfolios by investing in a wide range of assets and classes. “Investors are

always at the mercy of events: whether foreseeable or completely out of the blue,” he says. He also advises to






bank on a property’s reputation; a unique asset class would not be impacted by short-term shocks, such as stocks

and the likes. To survive economic downturns, take a long-term outlook.

Canada: Vancouver and Toronto

“Investors and developers are cautiously optimistic about the Canadian property market,” says Bradstock.

“Toronto and Vancouver’s markets continue to experience high demand due to a lack of supply, which has driven

up prices and caused affordability concerns.”

He notes that Vancouver is expected to lead all Canadian cities with 3.3 per cent in GDP growth this year, while

Toronto’s economy remains healthy and growing, with construction, transportation, warehousing, retail,

wholesale and manufacturing all contributing to this growth.

According to IP Global’s annual YouGov survey, when it comes to investing in property abroad, 20 per cent of UAE

residents would consider investing in Canada.

“Toronto and Vancouver are the two largest markets in Canada and the most favoured market among UAE

residents. However, it is important to note that a foreign purchaser tax of 15 per cent has recently been

introduced in both cities.” Pricing. “Similar to the UK, Chicago and Berlin, it’s quite straightforward to get a

mortgage. Pricing is also similar to Chicago and London in key cities,” Bradstock says.

UK

“Currently our focus lies heavily on Outer London, Crossrail route towns and key regional cities like Birmingham,

Manchester and Liverpool for the foreseeable future,” says Bradstock. London as usual leads in terms of

buoyancy with average house prices double that of the UK average, according the Land Registry, but prices rose

by just 3.7 per cent year-on-year in March, compared to a 6 per cent average increase for the rest of the country.

Bradstock advises to pinpoint the areas with the greatest scope for added value. These areas include wherever

Crossrail passes through. “Woolwich is an especially notable Crossrail winner; the borough is expected to see

value growth of 39 per cent from 2016 to 2020,” he says. He also cites outlying areas delivering desirable yet

accessible accommodation in tune with the aspirations of a largely young, professional occupant base.

“Increasingly, these are go-to destinations where urban regeneration features heavily — as does making the most

of the waterfront. Croydon is a case in point: £23 million [Dh110 million] has recently been spent on rejuvenation

of the town centre. It’s much more than a commuter town; 100,000 people are employed across 12,500

workspaces.”

Guaranteed yields

Bradstock points to research from Savills that although the number of homes built in London was expected to hit

a record in 2017, these numbers would fall sharply from next year. The currently supply of homes also does not

match the demand for homes costing less than £450 per square foot, but rather targeted above that and up to

the £1,000 price point.

Manchester, Liverpool and Birmingham

Bradstock says there has been much investment on infrastructure in the north, including high-speed rail links and

upgrades to Manchester Airport. This and the lower cost of living have attracted many working professionals and

in turn businesses.

Typical outlay

In a recent project in Woolwich, London, the costs include property price (£392,000), legal fees (£700), land

registry fees (£270), stamp duty (£21,360), mortgage broker fee (£3,822) and valuation, furniture, tenant and

handover fee (£7,700)






Average property prices in Manchester are around £150,000 for a one-bedder and £230,000 for a two-bedder. In

prime locations, it is £190,000 for a one-bedder and £325,000 for a two-bedder, according to JLL. Land registration

would cost £158,403.

In Liverpool, the average prices are £120,000 for a one-bedder and £195,000 for a two-bedder. In a prime

location, prices are £145,000 for a one-bedder and £235,000 for a two-bedder. Land registration cost is £122,283.

In Birmingham, the average prices are £140,000 for a one-bedder and £173,000 for a two-bedder. In a prime

location, the prices are £173,000 for a one-bedder and £250,000 for a two-bedder. The cost of land registration is

£165,182.

Cross-border mortgage

“In terms of mortgage finance for overseas nationals, the UK is one of the most robust and straightforward

mortgage finance industries. In the last five years, our sister company Liquid Expat have seen their available

number of lenders willing to accept a UK mortgage application rise from 20 to up to 35 lenders on their approved

panel,” says Bradstock.

Expats purchasing a buy-to-let unit using a UK property as collateral can get up to 75 per cent loan to value. It can

go up to 90 per cent depending on the purpose of the purchase.

Australia: look East

According to IP Global’s annual YouGov study, 11 per cent of UAE residents would consider investing in property

in Australia.

“A considerable number of our UAE clients do plan to buy in their home country, as the majority of employment

contracts here are on a fixed-term basis,” says Bradstock. “Therefore, often our clients have a set goal and

timeline for when they return.”

Home or investment?

“We continue to have a high degree of confidence in the overall direction of Australia’s Eastern cities, based on the

fact that the most recently available public data shows prices continuing to rise,” says Bradstock. However, he

notes significant increases in foreign-buyer stamp duty in New South Wales, Victoria and Queensland and

significantly reduced mortgage availability for foreign borrowers. “[This] make Australia a less attractive

investment destination for foreign nationals than other tier one property markets globally at this time,” he

cautions.

Germany: Berlin

This year Berlin was named the top market for real estate investment and development in a report carried out by

PWC and the Urban Land Institute, scoring highest on investment, development, prospects for rental growth and

prospects for capital growth.

In 2016, apartment prices increased 9.6 per cent, with the top market segment (new builds) experiencing 10.5 per

cent capital growth. Rental growth was also strong for the same market segment, at 4.6 per cent, according to

CBRE. Bradstock says waves of regeneration are moving outwards from the city’s central locations of Mitte,

Charlottenburg and Friedrichshain, with investors and start-ups moving into new districts on the fringe of the city

centre.

Pricing and outlay

For a €315,000 (Dh1.36 million) property, investors can expect to pay a one-off 6 per cent transfer tax of €18,900,

0.5 per cent land registry tax of €1,575, 1.5 per cent notary fee of €4,725 and the optional 1 per cent mortgage

broker fee of €1,701.






Prices can range from €180,000 to €1 million.

Financing

For investors expecting to fund their acquisition through mortgage finance, Berlin is a foreigner-friendly market.

As any other mature realty market, due diligence is thorough, which is a strong indicator of a stable market.

Source: Gulf News

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WORLD’S MOST EXPENSIVE HOUSING

MARKET JUST GOT EVEN PRICIER Friday, August 11, 2017

The world’s priciest housing market got even more expensive in the second quarter.

Hong Kong’s housing affordability ratio, which measures the proportion of income spent on mortgages, worsened

to about 67 per cent for the quarter, the government said Friday, up from 56 per cent in the year-earlier period.

The latest figures underscore the challenges that incoming Chief Executive Carrie Lam faces in taming home

prices in a city where it now takes a household 18 years of median income to buy a home, according to data from

Demographia. Compared with the 1997 peak, overall flat prices in June were 94 per cent higher, according to

government data.

The number of residential transactions surged 43 per cent to 18,892 in the second quarter, fuelling rising prices.

Centaline Property’s Centa-City Leading Index of existing home prices surged to a record high 160.3 July 30. The

index has climbed 11 per cent this year, and has jumped more than 50 per cent in the past five years.

Source: Gulf News

Back to Index






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, Qatar, Jordan and the Kingdom of

Saudi Arabia not only provides a deep understanding of

the local markets but also enables us to undertake large

instructions where we can quickly apply resources to meet

clients requirements.

Our breadth of experience across all the main property

sectors is underpinned by our sales, leasing and

investment teams transacting in the market and a wealth

of research that supports our decision making.

John Allen BSc MRICS

Director, Valuation & Advisory

+971 4 403 7777

[email protected]

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, Qatar and Jordan.

Our sales teams have extensive experience in the

negotiation and sale of a variety of assets.

LEASING

Asteco has been instrumental in the leasing of many

high-profile developments across the GCC.

ASSET MANAGEMENT

Asteco provides comprehensive asset management

services to all property owners, whether a single unit

(IPM) or a regional mixed use portfolio. Our focus is

on maximising value for our Clients.

OWNER ASSOCIATION

Asteco has the experience, systems, procedures and

manuals in place to provide streamlined

comprehensive Association Management and

Consultancy Services to residential, commercial and

mixed use communities throughout the GCC Region.

SALES MANAGEMENT

Our Sales Management services are comprehensive

and encompass everything required for the successful

completion and handover of units to individual unit

owners.

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