NEWS BRIEF 43 - Asteco Property Management · dubai in line to absorb nearly 15,000 apartments this...
Transcript of NEWS BRIEF 43 - Asteco Property Management · dubai in line to absorb nearly 15,000 apartments this...
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RESEARCH DEPARTMENT
NEWS BRIEF 43
SUNDAY, 22 OCTOBER 2017
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REAL ESTATE NEWS
UAE / GCC
UAE’S WATERFRONT APPEAL
REIMAGINING OUR URBAN CENTRES
THE GROWTH OF ISLAMIC REITS
SELECTING THE RIGHT HOME MORTGAGE
PROJECTS LINKED TO EXPO 2020 WORTH $33 BILLION
NEARLY 150 NATIONS CONFIRM PARTICIPATION IN EXPO 2020
TEN EXPO 2020 DUBAI FACTS
WITH VAT, GULF BANKS WILL EXPERIENCE COST VARIATIONS
SAUDI ARABIA’S PIF SETS UP REAL ESTATE REFINANCE COMPANY
DUBAI
WHERE DUBAI RENTS HAVE RISEN AND FALLEN, Q3 2017
DAMAC NET PROFIT CLOCKS IN AT DH2.3 BILLION, WHILE SALES GAIN 13% TO DH6B
DUBAI OFF-PLAN SALES START TO DWARF READY UNITS
HEADING FOR THE ROOFTOPS TO GENERATE POWER
DAMAC NINE-MONTH REVENUES IN SOLID TERRITORY
MARINA ARCADE: SETTLE INTO A PLUSH LIFESTYLE
DLD OPENS INVESTMENT LANE FOR DIFC ENTITIES
DEYAAR REVENUE UP 96% TO DH512M IN FIRST 9 MONTHS
AZIZI EDGES CLOSER TO DH25B MEGA LAUNCH
DUBAI IN LINE TO ABSORB NEARLY 15,000 APARTMENTS THIS YEAR
DUBAI’S RENTAL DIPS TO CONTINUE INTO NEXT YEAR
MAG PROJECT BECOMES BIGGEST ROLLS-ROYCE GHOST FLEET OWNER
DUBAI’S OFFICE RENTS CONTINUE IN STABILITY MODE
REVEALED: TOP NATIONALITIES LOOKING TO BUY DUBAI PROPERTIES
BIGGEST FACTORY OUTLET OPENS DOORS IN DUBAI
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REAL ESTATE NEWS
DUBAI OFF-PLAN SALES UP 118% AT DH4B
GAP CLOSES BETWEEN DUBAI'S PRIMARY, SECONDARY MARKETS
COMING UP: DH25 BILLION MEGA PROJECT IN HEART OF DUBAI
'AFFORDABLE' HOMES STILL OUT OF BOUNDS FOR END-USERS IN DUBAI
DUBAI HOME BELOW DH1 MILLION? I WILL BUY
ENBD REIT DEPLOYS $105 MILLION FROM NASDAQ DUBAI LISTING
JVC, DUBAI MARINA MOST PREFERRED BY FOREIGN HOME BUYERS
BENGHATTI COMPLETES 5 PROJECTS DH1B AHEAD OF SCHEDULE
WHAT HAPPENS TO ABSCONDERS THAT FLEE MORTGAGED DUBAI PROPERTIES IN
NEGATIVE EQUITY?
ADDRESS RESIDENCES JUMEIRAH RESORT + SPA APPOINTS MAIN CONTRACTOR
DAMAC'S Q3 PROFITS DOWN 20% AS COST OF SALES SOA
OFF-PLAN SALES DRIVING DOWN DUBAI’S RESIDENTIAL PROPERTY PRICES
DUBAI HOLDING 'RE-EVALUATING' JUMEIRAH CENTRAL
ABU DHABI
INVEST AD IN JOINT VENTURE WITH CANADA'S BROOKFIELD ASSET MANAGEMENT
ADIA SIGNS $1BN INVESTMENT DEAL WITH INDIA'S NIIF
NORTHERN EMIRATES
362 RESIDENTIAL PLOTS GRANTED TO SHARJAH CITIZENS
INTERNATIONAL
PAKISTAN’S DEVELOPERS UNFAZED BY RECENT PRICE DROPS
HONG KONG SKYSCRAPER SOLD FOR RECORD $5.15 BILLION: REPORT
WHY PAKISTAN'S PROPERTY SECTOR IS FLOURISHING
DANUBE EYEING LARGER FOOTPRINT IN PAKISTAN
HOW DO FOREIGN BUYERS REACT TO A STRONG US DOLLAR?
THE UNUSUAL PLACES IN LONDON TO BUY A £1M PENTHOUSE
LONDON HOUSE PRICES CONTINUE TO DECLINE
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UAE’S WATERFRONT APPEAL Wednesday, October 18, 2017
The UAE offers some of finest waterfront developments in the world. It is becoming a global hub for an ever-
growing portfolio of exclusive projects set adjacent artificially created canals, lakes, beaches and marinas.
The waterside communities are a hot favourite among the elite, holiday home buyers and investors who desire a
sense of seclusion in their luxury waterfront homes, and yet have all the amenities of leisure, comfort and lavish
living.
Many waterfront communities all over the UAE provide residents with an urban lifestyle and the conveniences of
retail shops, dining outlets, yacht clubs, sporting facilities and several other recreational and cultural activities. PW
looks at what makes the UAE’s premium waterfront developments so desirable to residents, investors and
tourists.
Abu Dhabi
In the capital, developer Aldar is catering to this demand with its vibrant residential offerings in Reem Island, Al
Raha Beach and Yas Island. Talal Al Dhiyebi, chief development officer of Aldar Properties, says, “Each of our
destinations embodies the ideal balance between stunning views of the waterfront, beautiful landscapes, a range
of community amenities, and proximity to the main facilities.”
Reem Island, located adjacent to the central business district on Al Maryah Island, is five minutes away from the
city centre. It offers convenient access to excellent facilities and stunning views of the Arabian Gulf. Al Dhiyebi
says, “The 2.4km Reem Island canal, which opened in April, now flows alongside 35 plots within Aldar’s master-
planned community. It brings waterside views, promenades, seating and areas for exercise and socialising to the
island’s steadily growing population, as well as visitors from other parts of the city.”
Al Raha Beach is built on 5.2 million sq m of natural beachfront, situated next to the main highway linking Abu
Dhabi and Dubai. It offers a mix of premium residential, commercial, cultural, entertainment and public
amenities. Al Dhiyebi says, “The diverse precincts are all residential and mixed-use developments with an array of
facilities, including an exclusive clubhouse, retail outlets and swimming pools. With its abundance of dining
choices, landscaped lawns and peaceful water fountains, Al Raha beach offers a welcoming ambience to residents
of Al Bandar, Al Hadeel, Al Muneera and Al Zeina, as well as guests.”
Waterfront premium
Set across the tranquil blue waters of the Arabian Gulf, Yas Island is a serene sanctuary away from the bustle of
Abu Dhabi’s urban environments. “While enjoying dramatic views of the capital’s central business district skyline,
residents here enjoy quality lifestyle experiences,” says Al Dhiyebi. “These include relaxation on manicured
beaches, access to exciting water sports via Yas Marina, rounds of golf on the world-class Yas Links course and
fun at Yas Waterworld and Ferrari World amusement parks, all within the comforts of the neighbourhood.”
Andrew Covill, director of Henry Wiltshire International, says waterfront homes anywhere in the world are
considerably more valuable than an inland equivalent. There is at least a 20 per cent differential for any water
view compared with a non-water view, says Covill, and that could increase dramatically if the property is located
directly on the sea or has beachfront access.
Although Abu Dhabi city is surrounded by water, it has relatively few true waterfront homes. “In Al Raha Beach,
developments such as Al Muneera and Al Zeina have good sea views from many of the apartments, but some of
the properties in Al Bandar have balconies directly over the sea,” says Covill. “While the price is somewhat higher,
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we believe that over the long term the investment value will be greater as the rarity value of an absolute
waterfront home, as it is known in the business, will increase the value exponentially.
“Al Hadeel is also due to be completed later this year, which is located adjacent to Al Bandar with great sea views
and some apartments located very close to the water. We recommend buying apartments or villas as close to the
water as possible if you cannot buy directly on it. The long-term investment will be worth it.”
On Yas Island, the first new residential development, called Ansam, will be delivered this year. “An Andalusian-
style design of white apartment buildings overlooking the Yas Links golf course and the sea beyond, the units are
sure to be in high demand [with the] stunning views [and] all the leisure and hospitality [amenities] on Yas Island,”
says Covill. “Mayan is a contemporary development on Yas Island, which is under construction and will be
delivered in 2019. It is a mid-rise building with large amounts of glazing looking out to sea across the golf course
and beach.”
Unique products
Saadiyat Island has high-end villas with a range of luxury hotels, beach club, golf club and the forthcoming
Cultural District housing the Louvre, Guggenheim and other museums. The island features Saadiyat Beach Villas,
which Covill says is a mature villa community that is highly regarded and popular among high-ranking executives
and VIP buyers. “Hidd Al Saadiyat, a resort-style development of contemporary villas, will begin delivery of their
villas in the coming weeks,” says Covill. “The absolute beachfront homes were snapped up when the project was
first launched, and only a few have made it to the resale market as they are such a unique product in Abu Dhabi.
“Studies show that beachfront property around the world can be worth 60-100 per cent more than an equivalent
property inland, but the current resale units in this development are only priced at around a 20 per cent
premium, making them a secure long-term investment. The five- to seven-bedroom homes are priced between
Dh15 million and Dh20 million, with the largest specialist villas valuing up to Dh50 million.”
Nudra, the new beachside villa development on Saadiyat Island, is the only gated development in Abu Dhabi with
its own private beach for the residents. “It boasts only 37 land plots and villas within landscaped gardens with
other key facilities like a beachfront clubhouse with gym and infinity pool overlooking the turquoise ocean,” says
Covill.
Dubai
Master developer Nakheel’s famed waterfront and island projects such as Palm Jumeirah, The World Islands and
Deira Islands have put Dubai on the world map as a popular place to live and visit. “Twenty years ago, Dubai’s
coastline was just 70km long,” says Aqil Kazim, chief commercial officer of Nakheel. “Palm Jumeirah and other
waterfront developments have added more than 300km to that coastline, paving the way for the development of
seafront homes, resorts and leisure attractions that have become the envy of people across the world. “[Palm
Jumeirah] is home to Al Ittihad Park, a 1.1-million-sq-ft green oasis surrounded by a 3km jogging track, the high-
end Golden Mile Galleria mall, Club Vista Mare beachfront dining complex and the 11km Boardwalk seafront
promenade, which runs the entire length of the island’s crescent.”
Constantly evolving
Nakheel is also building Palm 360 and The Palm Tower — luxury high-rise hotel and residential projects on the
Palm. Other projects are Nakheel Mall, The Pointe waterfront restaurant and retail complex and the Palm West
Beach/Palm Promenade interconnected beach, park and promenade.
“Waterfront living in Dubai remains exclusive, yet is growing in popularity as it offers better value for money and
better return on investment than in other key parts of the world,” says Kazim. “Also, new attractions and facilities,
such as the West Beach/Palm Promenade, are being added to existing waterfront communities, enhancing their
popularity.” The World Islands is a collection of 300 man-made islands shaped into the continents of the world
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and will have exclusive underwater homes along with lavish resorts and leisure experiences. Deira Islands
consists of four man-made islands, adding 40km of coastline, including 21 kilometres of beaches. It will have
beachfront hotel resorts, residential communities, a creek marina for large yachts and other marina facilities,
shopping mall, waterfront night market and a large amphitheatre.
Dubai Canal
The Dubai Water Canal is the latest gem added to Dubai’s waterfront grandeur. The 3.2km-long waterway starts
from Business Bay, through Safa Park and Jumeirah district into the Arabian Gulf. It will have luxury housing,
hotels, hundreds of restaurants, a shopping centre, walkways, cycle paths and private marinas.
Umar Bin Farooq, CEO of One Broker Group, says, “Dubai Canal has some unique and luxury projects to offer. The
Canal is expected to have about four hotels and 450 restaurants. Which means the footfall in the area will be high
and this will attract a lot of visitors.
“The market has welcomed positively all the projects that were launched in the recent past on the Canal since
there are not many water-fronted plots available, so the advantage of investing in this real estate will be high.
These projects include Al Habtoor City, which offers unparalleled amenities, including the Dragone show, a world-
class tennis academy and very impressive boutiques and cafes. [It is also] a walking distance to Safa Park.” Dubai
Properties Group’s Marasi Business Bay is another remarkable project along the Dubai Canal, covering a 12km
area that will have water homes, floating restaurants, retail options and palm tree-lined marinas. The place is set
to be the region’s first purpose-built yachting destination. The residential development, built on water with boat
access, will create an exceptionally new living proposition for Dubai’s real estate market.
Overlooking the Dubai Creek in Culture Village, Dubai Wharf is another luxury mixed-use waterfront
development. It offers waterfront luxury residences and attractions such as retail, dining and entertainment
outlets. Emaar Properties and Dubai Holding are jointly developing Dubai Creek Harbour at the Lagoons, best-
known for The Tower, which is set to achieve a new record in height. The future-centric, mixed-use development
consists of waterfront eco-resorts, a marina and yacht club, commercial and retail space combining with cultural,
leisure and educational amenities. The development will include shopping malls, luxurious hotels, museums,
world-class resorts and marinas. The other waterfront projects that are poised to become popular tourist
destinations include Al Seef, which recently opened in Bur Dubai, Jewel of the Creek, Marsa Al Arab, Bluewaters
Island and Bvlgari Resort. The established waterfront developments like Dubai Marina, Jumeirah Beach
Residences and Jumeirah Lakes Towers continue to be among the most desirable destinations for the visitors and
residents. These areas offer some of the most ultra-luxurious penthouses and lavish apartments. Dubai Marina
also offers the prestigious leisure strip, The Walk, housing leading retail, hospitality and entertainment options.
Other emirates
The UAE’s premier waterfront developments are not confined to Dubai and Abu Dhabi. Prominent developments
are also found in other emirates. The Address Fujairah Resort + Spa is a luxury hotel and residential development
that was recently launched in Fujairah by Eagle Hills. Ras Al Khaimah’s waterfront concepts include Al Hamra
Village, Mina Al Arab and Al Marjan Island. Sharjah’s manmade Al Majaz Island and Al Majaz Waterfront on the
Khalid Lagoon serve as tourist and leisure hubs that play host to major events. The popular destination also has
apartments, world-class hotels, retail outlets, restaurants, cafes, leisure, entertainment, recreational zones, mini
golf areas and cultural spots.
Al Zorah in Ajman is a lifestyle destination spread over an area of 5.4 million sq m and bordered by 12km of
seafront. The development will have hotels, resorts, serviced apartments, residences and commercial spaces.
Source: Gulf News
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REIMAGINING OUR URBAN CENTRES Wednesday, October 18, 2017
Rapid expansion of cities as they get overcrowded and polluted is an urban planning challenge. Modern day
urbanisation strategy hinges on creating manageable and self-sufficient pockets of urban living within a city.
Optimising what is considered “dead-space” as well as revitalising zones that have historically remained
unpopular for habitation are some of the ways city planners are looking to meet the challenge.
Why?
Reimagining a city is not a complex planning concept. As an example, think of places you go out to for dining or
shopping. Think of the restaurant you like but don’t visit often as the surrounding area seems dead, or the
outdoor promenade you fancy but avoid due to traffic congestion? There are several drivers that prompt us to
choose or avoid a place - ease of access, traffic management, adequate parking, lively and vibrant decor - these
could be some of your triggers of choice. And this is where reimagining steps in. Planning, either in advance or
within existing spaces, creates valuable experiences for end-users.
Heritage, convenience, sustainability
Eventually, cities are more about the people who inhabit them than the roads and infrastructure and buildings.
And it is these people and their habits that should influence and guide our urban planning, suggests Firas
Hnoosh, Principal, Design Director of Architecture at Perkins+Will, a leading interdisciplinary architecture and
design firm in Dubai. “We have to create urbanism which responds to our heritage and culture and is not just an
architectural language applicable to the world but not the location”.
Ibrahim Ibrahim, Managing Director, Portland Design Associates, feels sustainability and convenience should be
driving factors. “Cities today need to focus on densification - to build up and maximise the use rather than
building out. This enables better use of natural resources and is more cost effective as you utilise existing services
like transport links. We need to densify around existing urban centers so there are more people working and
living in that same space. This will lead to a need for more amenities and retail and services. And we need to be
smart and strategic about how we do this. How can we better use a space? Can an office be an office in the day
and a retail or entertainment spot at night? This is reimaginging,” says Ibrahim.
Driven by end users
The obsession with architecture and building iconic shapes often leads to a compromise of the human
component of space planning. This leads to exaggerated hyperbolic structures that do little to infuse life and
habitation into a space. “Too many projects are driven by architecture alone or places are driven by shapes.
Projects need to be driven by the end user,” says Hnoosh. “We need to understand who they are and have all our
drivers focused on how they use the space. Architecture is for people, not architects. Architecture doesn’t make a
place. People make a place. What we can do is glue the people together via experiences. This is the fundamental
core of urban centers”, he adds.
Creating experiences requires revisiting and reimagining existing districts and pockets through the eyes of the
end-users, keeping journeys unique but interconnected to the overall city character. “Think of them as
experiences, as a part of the whole. Create distinct districts and characters and encourage journeys by residents
and tourists that are intuitive. Downtown Dubai, for example, has been resolved in terms of how it functions as a
whole. JBR has also been revisited as a whole and is now very successful”, adds Hnoosh. According to Ibrahim,
consumers benefit from the right mix of ingredients, from retail to outdoor spaces. “It’s important to have more
opportunity to walk and access outside public spaces. Consumers benefit from retail, education, healthcare and
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open spaces. Lesser reliance on cars is another important benefit. Unused spaces such as rooftops can be turned
into public spaces as well.”
Bring cold spots to life
Imagining multiple use experiences for a space can give it 24/7 uptime and avoid the “dead-zone” syndrome, feels
Ibrahim. “City centers should have a 24/7 lifecycle. Downtown, like DIFC, is less used out of working hours.
However mixed-use creates a sustainable investment. Going forward we will see more mixed-use developments.
This will eliminate dead space”, he adds.
Hnoosh says “creating destinations in cold spots” will get rid of those dead spots. “We need to make a place real in
peoples heads and hearts and everyday life. Fixed, stagnant space is not sustainable as an experience for the end
users. It is not about fixed plots, plazas and squares but creating activity and events in these spaces.”
People-centric planning
If cities need to be sustainable, it is time to relinquish power back to the people, say the experts. City planning can
no longer be about architects and designers and municipal planners. It needs to be people-centric. The concept of
the public realm is becoming a reality. Public spaces are becoming digital and fluid. It is no longer pre-determined
by a planner where you will sit, eat, play. Instead it is about providing open spaces for users to use as they see fit.
“Any urban development that is not human centric is completely irrelevant and is not sustainable”, says Hnoosh.
Source: Gulf News
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THE GROWTH OF ISLAMIC REITS Wednesday, October 18, 2017
Islamic Real Estate Investment Trusts (I-REITs) are increasingly becoming popular as an investment vehicle that is
much more flexible and diversifying than direct exposure to real estate with similar yields. A number of new
issuances outside the I-REITs’ birthplace of Malaysia underscores this popularity and shows that this sub-segment
is getting traction.
However, for the newcomer, the question is, why does the world need Islamic REITs? Well, investment in real
estate is not halal per se. In fact, REITs invest in real estate ventures, own and in some cases operate commercial
properties such as apartment complexes, hospitals, office buildings, agricultural and forest land, warehouses,
hotels, restaurants and shopping malls. The matter for Islamic REITs is what sort of business tenants are
conducting there and how the REIT is managing its finances.
Sharia compliant
“Generally speaking, an Islamic REIT is a collective investment scheme in real estate in which the tenants operate
permissible activities according to the Sharia,” explains Dr Aznan Hasan, member of the Sharia Advisory Council of
Malaysia’s Central Bank and member of the Sharia Advisory Council of the Securities Commission of Malaysia.
Specifically, Sharia compliance for an Islamic REIT applies to the utilisation of the real estate, including sub-
tenancies, financing of the acquisition and development of the property, as well as cash and liquidity
management and property insurance schemes.
The world’s first Islamic REIT created upon such principles was the Malaysia-based Al Aqar KPJ REIT, launched in
June 2006, which invested in domestic hospitals. It was followed in 2007 by Al Hadaharah Boustead REIT, also
from Malaysia, with initial investment in palm oil plantation estates. Another three followed in Malaysia, namely
the world’s first Islamic industrial and office REIT, Axis REIT in 2008, KLCC REIT in 2013 and Al Salam REIT.
Today, four out of a total of 18 listed REITs in Malaysia are Sharia-compliant. Momentum has also grown outside
of the Islamic REITs’ main playing ground of Southeast Asia, particularly in the GCC.
REIT in the GCC
At the end of last year, Emirates REIT, which was launched in Dubai in 2011 as the UAE’s first REIT and listed on
Nasdaq Dubai in April 2014, officially became the world’s largest Islamic REIT. The trust reported total assets of
$773 million (Dh2.83 billion) and a market capitalisation of $333 million at that time, overtaking now second-
ranked Sabana REIT of Singapore. The total portfolio value of Emirates REIT at the end of the first quarter was
$763.5 million as the value of its portfolio matured, but it was still a year-on-year gain of 10 per cent.
Meanwhile, Emirates REIT has been building up a portfolio in Abu Dhabi. Its managing firm, Equitativa, launched
in February a new private REIT called The Residential REIT, a trust that comprises about 500 homes in Dubai
Motor City and Al Hamra Village in Ras Al Khaimah. It is the first REIT focused on residential property only in the
UAE. Equitavia also set up The Logistics REIT and The Hospitality Property Fund. The Residential REIT is set to be
listed next year. “There is significant interest in REITs across the region from institutional and private investors,”
says Sylvain Vieujot, chairman of Equitativa. “Yields, particularly in the residential market, are attractive in the
current environment and are expected to provide medium term upside.”
Banks get into the act
Emirates NBD, Dubai’s largest bank, listed its own Islamic REIT called ENBD REIT on Nasdaq Dubai on March 23,
raising about $100 million. It was the first initial public offering (IPO) in Dubai since end of 2014.
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Abu Dhabi Financial Group, an alternative investment company with assets under management of around $5
billion, is preparing to float an Islamic REIT it calls Etihad REIT by the end of the year. The REIT comprises 10
income-producing properties across four emirates in a variety of real estate subsectors, including residential,
retail, warehousing and staff accommodation at a total worth close to $820 million. It would be the sixth REIT in
the UAE.
Adding to that, Arcapita Investment Management, a Bahrain-based Islamic investment firm, recently acquired a
portfolio of logistics assets in Dubai for about $150 million adding to its existing logistics stock in the emirate. It
says it could bundle these into another new logistics REIT to be listed at one of the regional exchanges.
First REIT
While the first REIT in the GCC was actually launched in Kuwait in 2007 as Al Mahrab Tower REIT, it remained a
closed and non-listed. In Bahrain, the private Inovest REIT was launched in 2009, followed by the Al Salam Asia
REIT in 2014, but the first public REIT in Bahrain, Eskan Bank REIT, was only listed in January.
In Saudi Arabia, the first REIT laws were introduced in October last year. Two new REITs were listed: Riyadh REIT
and Al Jazira Mawten REIT. Another one, the Jadwa REIT Alharamain Fund, saw its IPO this April.
The total number of (listed) Islamic REITs available globally is still low in relation to demand from Muslim
investors, including takaful companies, which traditionally show a great interest in REIT investments. This means
that despite high returns of between 6 per cent and 8 per cent annually, investors focusing on short-term
investment might shy away owing to the lower liquidity of Islamic REITs as compared to the conventional REIT
market. However, for investors with a longer time horizon, Islamic REITs are indeed an outstanding option to
create income flows and preserve Islamic values at the same time.
Source: Gulf News
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SELECTING THE RIGHT HOME MORTGAGE Wednesday, October 18, 2017
You are all excited to become a homeowner soon — your decision is made, property requirements checklist is
ready, and you are set to now begin the dream home search. However, wait. If you plan to buy a home on a bank
loan, experts’ recommendation is first to get finance pre-approval before any home exploration.
Every prospective buyer should first obtain a mortgage pre-approval to confirm their budget before doing any
serious property hunting, says Deepak Ahuja, director of wealth management, mortgages and bancassurance at
RAKBank.
“Pre-approval is an essential step to complete because the buyer has to provide a cheque for 10 per cent of the
purchase price at the time of signing the sales agreement. Should the commitment occur before securing the
bank’s approval and the loan application is subsequently declined, then the deposit will be forfeited.”
Ahuja adds, “As per UAE Central Bank rules, expats must pay a minimum deposit of 25 per cent of the purchase
price for properties sold for less than Dh5 million. In Dubai, in addition to this down payment, you will need an
additional four per cent transfer fee (less in other emirates) plus a 0.25 per cent mortgage registration fee
calculated on the loan amount. New first-time buyers need to consider all these costs before finalising a
mortgage.”
Product selection
A home finance is a significant commitment in anyone’s life. Tariq Abdullah Ahmad, Head of Home Finance at
ADIB says that the home buyers should carefully examine financial products available on the market and select
the best deal that supports their particular short- and long-term needs.
He says, “For instance, if they are only looking to live in the property for a short period, then a fixed rate for two to
four years may be preferable. If the intention is to stay for a longer duration, then the buyer could consider a
variable monthly payment over the expected tenure.”
With a range of profit rate programmes available in the UAE, each buyer will have different needs, objectives and
time frames for which they wish to finance a property. Ahmad says, “A fixed rate structure is where the profit rate
is agreed for a set time frame resulting in a consistent monthly repayment obligation. Variable rates are made of
a bank’s margin over a base rate, most commonly EIBOR or an EIBOR-linked formula.” RAKBank offers Home in
One, which combines mortgage loan and current account, allowing the client to offset interest based on the funds
held in the account. “Customers (both salaried and self-employed) can benefit from it by using the current
account for their daily requirements as well offset the interest based on the residual balance maintained,” says
Ahuja.
Set provision
Since the purchase of a home is a long-term investment, Ahmad’s advice to the buyers is to aim for stability,
consider, and prepare for worse case scenarios. He says, “Buyers should not stretch their ability to make
repayments, and leave room for unforeseeable events which may require a substantial financial outlay.
For instance, would you be able to keep up your schedule of repayments should you lose your job? We would
encourage buyers to have around one year of living costs in savings as a contingency.”
Other conditions
Ahuja says that besides the interest rate, home buyers should also consider several other charges associated with
home loans. These include:
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• A one-time processing fee that usually is about one per cent of the loan amount.
• Valuation fee that is charged for estimating the property value and could range between Dh2,500 and 3,000 at
most banks
• Property insurance/Takaful that ranges between 0.03 to 0.06 per cent of the property value
• Life insurance/Takaful fee that starts at 0.35 per cent at most banks in the UAE. Upon the customer’s request,
many banks are capable of assigning the personal life insurance policy to the mortgage.
• Early settlement fee that is one per cent of the outstanding loan amount, subject to a maximum of Dh10,000 as
per the UAE Central Bank’s regulations.
• Most banks currently offer low fixed rates only for the first year. So, it is vital to check the second year rate
offering and ensure that they are linked to a transparent financial term like EIBOR/LIBOR, which is readily
published for verification on the UAE Central Bank’s website rather than an Interbank Rate that is not defined.
• If the customer opts for a fixed rate, he also needs to check the terms related to the breakage costs, if he
chooses to exit or settle the loan during the fixed period.
• A mortgage loan is a long-term relationship, so it is essential to deal with only reputed lenders who can manage
the relationship.
Source: Gulf News
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PROJECTS LINKED TO EXPO 2020 WORTH
$33 BILLION Thursday, October 19, 2017
The combined value of Expo 2020-related development projects has reached $33 billion (Dh121 billion), as the
UAE begins the three year countdown to the event, according to BNC Network.
These projects include transport infrastructure, such as the expansion of the road networks, several highways,
roundabouts, interchanges, and the Dubai Metro line set to connect the Dubai Expo 2020 site and Al Maktoum
International to the rest of the city.
According to BNC Projects, a project research firm, the $33 billion also includes mixed-use projects, golf courses,
and residential, commercial, and hospitality developments.
Mostly located at Dubai South, the 145-square kilometre mixed-use development with Al Maktoum International
at its centrepiece, most of these projects are all expected to be completed before Expo 2020.
Once completed, they will create 500,000 jobs, with residents living in a large community within the city, according
to the statement.
The development was initially planned as an airport city to serve Al Maktoum International, the world’s largest
greenfield airport development with a design capacity to handle 220 million passengers and 16 million tons of
cargo per annum with five runways, six terminal buildings.
“As it stands, Dubai is getting ready to host the Expo 2020 and the emirate is way ahead in terms of its readiness
… The mega event it taking place in the Middle East for the first time …” said Avin Gidwani, Chief Executive Officer
of BNC Network.
“While driving past some of the major highways, one would notice the hectic construction activities on the
highways and both sides of these highways, reflecting the pace of development work in the emirate.
Dubai South has been divided into separate functional districts, such as the logistics district, linked to Al Maktoum
International to create a mega cargo hub, which, along with the Jebel Ali Port and Jebel Ali Free Zone, will create
one of the world’s largest sea-to-air logistics corridor.
The 21 square kilometres long logistics district is designed to enable fast-cycle businesses and assist value-added
services such as manufacturing and assembly.
It also will host the Dh25 billion residential district, with a building capacity for 1,100 low to mid-rise buildings that
covers a 715 hectares area and expected to accommodate 250,000 residents, when complete.
The commercial district is expected to provide employment opportunities for an estimated 150,000 people. It will
consist of over 850 commercial towers with three to five star hotel lodging.
An exhibition district that will host the World Expo 2020 site, will be spread across 4.38 square kilometres
dedicated to the exhibition, and meetings, incentives, conferences and exhibitions (MICE) industry.
Source: Gulf News
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NEARLY 150 NATIONS CONFIRM
PARTICIPATION IN EXPO 2020 Thursday, October 19, 2017
Nearly 150 nations have now confirmed their participation in Expo 2020 in Dubai, organisers behind the event
said as they met with representatives from around the world to discuss planning details.
The annual International Participants Meeting, first held last year, brought together 500 senior representatives in
Dubai on Thursday from around 180 countries, the number of nations organisers hope to attract to participate in
Expo 2020.
The meeting was attended by Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai,
and Shaikh Abdullah Bin Zayed Al Nahyan, the UAE’s Minister of Foreign Affairs and International Cooperation.
During the meeting, organisers confirmed that close to 150 countries have formally accepted the UAE
government’s invitation to take part in Expo 2020, including 15 new announcements of participation. The new
announcements included the participation of the US, Austria, Malaysia, and Mexico.
The meeting brought together representatives of countries that have already confirmed their participation as well
as those still considering participation. Some of those who have already confirmed signed their participation
contracts after choosing a theme, budget, and pavilion plot.
Organisers also discussed updates on site delivery and legacy plans, details on marketing and communications
plans, Expo Live, and some of Expo’s partners.
Speaking there, Reem Al Hashemi, the UAE’s Minister of State for International Cooperation and director general
of Dubai Expo 2020 Bureau, said the event is “moving firmly and swiftly from a mission to reality.
“Our Expo 2020 family has grown significantly, and the number of confirmed participants is now close to 150. This
clearly shows how committed we all are to working together in the cause of human progress … We will always
embrace new opportunities for cooperation,” she said.
Attendees were also briefed about progress made on the Expo site.
Ahmad Al Khatib, vice president for real estate and delivery behind the Dubai Expo, said construction of the Expo
site has “progressed tremendously,” in the past 18 months.
From a business perspective, organisers discussed opportunities the Expo will provide for small and medium
enterprises.
“In 2017 alone, contracts for a range of goods and services to the value of $3 billion (Dh11 billion) will be awarded
to suppliers from 22 countries. To raise awareness of these opportunities, the Expo team has been travelling
around the globe, engaging with business communities and international companies of all sizes,” said Marjan
Faraidooni, senior vice president for legacy development and impact.
She said that this outreach will intensify in the coming months and years.
As for plans for the site once the event wraps up, Faraidooni said the site, District 2020, will be an innovative hub
that attracts business.
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“District 2020 has been designed to maximise synergies within a diverse tenant mix, and to deliver long-term
advantages to leading businesses from key growth industries regionally and internationally. These industries
include logistics and transport, travel and tourism, construction and real estate, and education,” she said.
Governing body
Additionally, organisers discussed Expo’s social impact programme, Expo Live, a $100 million initiative to help
projects around the world.
The meeting on Thursday was organised with the Bureau International des Expositions, the governing body of
World Expos. It is held regularly to update Bureau member nations on progress of the Expo.
The Expo 2020 runs for six months from October 20, 2020, and is expected to attract 25 million visits. It will be
held under the theme, “Connecting Mind, Creating the Future,” and will provide a platform to encourage creativity,
innovation, and collaboration.
Source: Gulf News
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TEN EXPO 2020 DUBAI FACTS Thursday, October 19, 2017
Ten Expo 2020 Dubai facts
1. The Expo 2020 Dubai site of 4.38 kilometres squared is more than four times the size of the Expo Milano 2015
site
2. Expo 2020 Dubai will have its own metro station, with trains capable of transporting 23,000 passengers per
hour per direction
3. Expo 2020 Dubai’s theme districts for Opportunity, Mobility and Sustainability will have a combined floor area
of 222,000 square metres, greater than New York City’s Grand Central Station
4. Dewa’s Mohammad Bin Rashid Al Maktoum Solar Park will provide Expo 2020 Dubai with 400 megawatts of
electricity, saving around 2.3 million tonnes of carbon dioxide emissions per year compared to coal production
5. More than 1,200 contracts have been awarded to SMEs, representing more than half of all contracts awarded
by Expo 2020 Dubai
6. Merchandise during the event will be sold at one of the world’s largest souvenir outlets — a 3,000 square metre
“Superstore of the Future”, an area twice the size of Dubai Mall’s ice rink
7. To date, more than 7.4 million hours have been worked on site
8. Each of the Expo site’s four gates has the capacity to handle more than 15,000 visitors per hour, with all gates
being able to handle more than 60,000 visitors per hour
9. Expo 2020 Dubai has connected with more than 540 schools in the UAE, and more than 310 universities in the
UAE and abroad
10. Five million meals will be needed to keep the Expo 2020 Dubai workforce fed during the six months of the
Expo
Source: Gulf News
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WITH VAT, GULF BANKS WILL EXPERIENCE
COST VARIATIONS Monday, October 16, 2017
To mitigate economic pressures emanating from declining hydrocarbon revenues, GCC states will be gradually
implementing Value-added Tax (VAT) from January. Given that VAT is on consumption, it is sometimes considered
as regressive in nature. However, given some of the unique characteristics of the proposed tax reforms, it is likely
to be quite progressive. The proposed rate of 5 per cent is low compared to some other fiscal regimes like
Norway and France, where VAT is levied at 25 per cent and 20 per cent, respectively. Further, some necessities like
essential food items, education, health care, etc, will be either exempt or zero-rated. Within the expenditure
distribution, households with higher consumption are likely to pay a higher proportion of their disposable income
in VAT than households with lower consumption. As an individual’s consumption beyond necessities is one of the
best observable indicators of living standards, a consumption-based tax is amongst the most equitable tax bases.
Therefore, the overall impact on household spending will be minimal with a slight expected increase in inflation to
around 3.5-4 per cent in 2018. An interesting case of VAT implementation will be on financial services. Given the
sheer volume of financial transactions and administrative constraints, financial services are usually exempt from
taxes and the same is the case for GCC. The exemption entails that VAT will not be levied on financial transactions
and any VAT incurred on providing these transactions will be a sunk cost and cannot be recovered. Financial
services are usually classified as principal and third-party transactions. The principal transactions include deposit
mobilisation, extension of credit, contracts of purchase, swaps and other form of monetary rights. Third-party
transactions refer to fee-based intermediary services where financial institutions act as a facilitator. While most of
these services will be exempt, the financial services will invariably be a combination of exempt and taxable
supplied.
There are certain institutional overheads like marketing, utilities and office supplies that will not be recovered and
have to be absorbed by the institution. Similarly, outsourced services like customer services or data processing
will be under the VAT regime. These will be compounded with incidental costs of compliance resulting in declining
banking margins. Therefore, in 2018, while commercial banks are likely to remain well capitalised, resilient and
highly liquid, the pressures emanating from VAT may impair profitability to some extent. This might be
challenging for the financial sector, as in globally integrated fiscal systems, a slight variation in business dynamics
may result in competitive distortions. The larger banks are likely to exhibit adequate flexibility to provision any
potential impact, but smaller banks may have to revisit their pricing going forward. The introduction of new tax
reforms can initially cause some micro-level disruptions but it is likely to benefit GCC manifold. The incremental
revenue from VAT in 2018 is estimated to be $14.1 billion (Dh51.78 billion) for Saudi Arabia, $8.1 billion for the
UAE and $2.7 billion for Kuwait. Consequently, real GDP is expected to grow at $2.5 billion compared to $2 billion
in 2016. Apart from additional revenues, VAT is likely to support foreign trade both within the GCC and with the
outside world. This will have a positive impact on business landscape despite political challenges. As a result, the
governments can continue their support towards subsidies and enhance public spending, notably towards
infrastructure spending in social sectors like education, health care and housing, and consequently creating new
employment opportunities. Nawazish Mirza is Associate Professor of Finance and Deputy Programme Director,
Global MBA and MGB, at SP Jain School of Global Management, Dubai Campus.
Source: Gulf News
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SAUDI ARABIA’S PIF SETS UP REAL ESTATE
REFINANCE COMPANY Thursday, October 19, 2017
The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, has set up a real estate refinancing
company aimed at boosting home ownership in the kingdom, which suffers from a shortage of affordable
housing.
The Saudi Real Estate Refinance Company (SRC) will help to pump liquidity into the real estate financing market,
which is forecast to rise to 500 billion Saudi riyals (Dh489bn) by 2026 from 280bn riyals this year. The company,
which was launched in partnership with the ministry of housing and has received a licence from the Saudi central
bank, the Saudi Arabian Monetary Authority (Sama), is expected to refinance up to 75bn riyals worth of mortgage
debt over the next five years, reaching 170bn riyals by 2026.
“The company will act as an intermediary access point for investors, aligning the liquidity, capital and risk
management requirements of real estate mortgage companies, with the risk acceptability and return on equity to
meet investor targets,” the PIF said. “It endeavours to create stability and growth in the kingdom’s housing sector
by injecting liquidity into the secondary mortgage market, improving standards and facilitating access to local and
international financing sources.”
The new company falls in line with the kingdom’s plans to double the percentage of real estate’s contribution to
GDP to 10 per cent by 2020 from a baseline of 5 per cent, according to the 2020 National Transformation
Programme.
The programme, which will help to wean the kingdom off oil, also envisages raising Saudi ownership of homes to
52 per cent from a baseline of 47 per cent and boosting the contribution of real estate financing to non-oil GDP to
15 per cent from a baseline of 8 per cent.
The plan also sets a goal of tripling the percentage of residential units developed by approved real estate
developers to 30 per cent by 2020.
“SRC will adopt a strategy of acquiring mortgage funds to increase financial capabilities and broaden the activities
of real estate financing companies,” said the fund. “It will also work on linking the investment capital of foreign
and local investors with the range of opportunities available in the kingdom’s growing housing market.”
The company will also issue bonds to real estate finance companies as securities backed by both short and long-
term mortgage contracts.
The availability of more financing should help to address the housing shortage and accessiblity to financing,
according to Craig Plumb, head of research at the broker JLL Mena.
“If more can be done to reduce costs by providing financing on more favourable terms, this will clearly help many
of these who are currently priced out of the market,” said Mr Plumb, adding that reducing the cost of land for
affordable housing projects is another step that needs to be taken.
Saudi Arabia has taken some steps lately to tackle the housing shortage problem.
Sama said in September that mortgage holders would be exempt from paying administrative fees when switching
between floating loan rates to fixed ones and mortgage holders can also move from one lender to another at no
extra cost.
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In January, Sama also said it would allow mortgage finance companies to provide more funding to home
purchases by raising the maximum loan-to-value ratio for home financing from 70 per cent to 85 per cent for
citizens’ first-home ownership only. The bank licensed a national home finance company, Bidaya, and introduced
an affordable mortgage programme in conjunction with the ministry of finance. The government also approved a
2.5 per cent “white land tax” intended to prod encourage land owners to develop idle plots for residential use
rather than hold on to their undeveloped properties.
Source: The National
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WHERE DUBAI RENTS HAVE RISEN AND
FALLEN, Q3 2017 Wednesday, October 18, 2017
Property rental rates in Dubai continued to come under pressure during the third quarter and falls are expected
during the rest of the year, according to a new report.
Average rental rates for apartments fell 4 per cent during the three months to the end of September, while villa
rentals dropped 3 per cent on average, new data from property firm Asteco showed.
This follows a fall in rents throughout 2017, as thousands of new properties have come on to the market at a time
when employment growth has been weak.
Asteco said in its report that although between 3,000 to 4,000 more apartments are likely to arrive before the end
of the year, some supply forecast for Q4 completion will spill over into 2018.
"Despite increased government spending in infrastructure, hospitality and retail in the run-up to the Expo 2020,
market sentiment remains low largely due to weak employment growth and the bearish outlook in terms of oil
price and global economic recovery," it said.
The increase in available homes has meant that tenants have been able to obtain more flexible payment plans of
up to six or 12 cheques rather than the previously more typical annual payment.
Other incentives include rent-free periods of up to two months, Asteco said.
It was noted that the line between rental rates for different villa unit types within the same community is
becoming increasingly blurred.
"For example, within a rental rate range of Dh110,00 to Dh140,000 tenants can choose between a two, three, four
or five bedroom townhouse in Jumeirah Village, although cheaper and more expensive units are available for
each product type," Asteco said.
Transactions on property sales meanwhile have been rising, but prices have fallen as off-plan schemes have
flooded the market.
A report yesterday from Core Savills said the number of deals for built units since the beginning of this year has
increased by 7 per cent year-on-year, while off plan sales jumped 62 per cent.
Average unit value in the off-plan affordable housing segment fell by 11 per cent compared to last year.
Asteco said apartment sales were "broadly stable" during the third quarter, with prices down 4 per cent on
average year-on-year. Villa prices meanwhile were down 3 per cent annually.
Source: The National
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DAMAC NET PROFIT CLOCKS IN AT DH2.3
BILLION, WHILE SALES GAIN 13% TO DH6B Wednesday, October 18, 2017
Revenues came in higher for Damac Properties at Dh5.8 billion in the first nine months, against Dh5.12 billion a
year ago, but net profit took in a decline to Dh2.3 billion from Dh2.84 billion. Gross profit was at Dh2.9 billion.
But there were enough signs of a strong and sustainable income flow for the medium-term, with booked sales at
the end of nine months at Dh6 billion, a sharp 13 per cent gain over the comparable 2016 number. On the
delivery side of things, Damac is maintaining a good pace, handing over 1,923 homes, including 852 units outside
of the UAE.
Total cash and bank balances were at Dh7.9 billion, while gross debt stood at Dh5 billion as at September 30.
On whether the slippage in net profits was turning into a concern, Adil Taqi, Chief Financial Officer, said: “There
will always be some thought … but it should be looked in the overall context of our numbers. And what we see
there are a strong sales flow through the quarter and a pipeline of projects coming up for delivery.
“If we remove the Saudi and Jordan projects delivered during the quarter, where margins are in the 25 per cent
range, that in Dubai remains at above 50 per cent. Those are the numbers we are watching quite closely and they
are in positive territory. The key for us in the future is the extent of de-risking we can achieve on the cash flow.”
Damac’s sales pipeline has been a beneficiary from its continuous round of off-plan launches, which comes
alongside a general improvement in investor activity across Dubai’s property market.
According to Hussain Sajwani, Chairman of Damac, the market has been “steadily solidifying in 2017, with
increasing sales transactions and robust fundamentals, and our medium to long term outlook remains positive.
We have a strong value proposition and continue to appeal to a broader spectrum of buyers with a range of
products at attractive price points.”
Specific to the third quarter, Damac launched its Just Cavalli branded homes, with the first phase clicking well with
the intended buyer base.
Construction continues on about 6,300 villas at Akoya Oxygen and the 18-hole championship golf course. It was
also during the last quarter that Arabtec Construction was awarded a Dh628 million contract for the design and
construction of the main works for 1,296 villas at the golf community.
Damac ramps up on non-UAE handovers
Of the 1,923 units handed over in the first nine months, 454 were at the twin-tower residential and hospitality
project Damac Exclusive in Riyadh. There were also the 398 units at The Heights in Amman, its first project in
Jordan, and made up of three towers.
During the third quarter, DAMAC also significantly ramped up its leasing activities, with a rental portfolio of
apartments at Damac Hills, 95 per cent of which have been leased to date.
Source: Gulf News
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DUBAI OFF-PLAN SALES START TO DWARF
READY UNITS Wednesday, October 18, 2017
A gap is building up between off-plan transactions and those involving ready properties in Dubai, with the third
quarter numbers further amplifying the difference.
“Buyers have been attracted away from older second-hand properties with modern specification, lower price
points, attractive payment plans and hoped-for appreciation during the pre-handover build period,” said Declan
King, Managing Director and Group Head for Real Estate at ValuStrat. “This trend is now evident in transaction
statistics and is impacting some parts of the secondary market.”
During Q3-17, a substantial 73 per cent of properties bought were from off-plan schemes. These percentage splits
hark back to a time when Dubai was still in the build out phase of its freehold boom in the mid part of the last
decade.
Key locations included Downtown Dubai with 88 per cent of sales being off-plan, Business Bay with 83 per cent,
Dubai Silicon Oasis at 82 per cent and Jumeirah Village at 78 per cent.
“The new homes market has seen increased activity — with many developers working to diversify away from the
high-end luxury segment,” said King. “And broadening into a burgeoning affordable homes sector and new
locations to the south and east of the city.”
Unlike some of the other real estate consultancies, ValuStrat sets the full-year handover numbers at 25,000
homes. Most of the other place handovers at about the 15,000 unit mark.
According to ValuStrat, “This year’s total new supply of residential stock is estimated at 25,000 units, 50 per cent of
which have already been completed, most of which are in Dubailand, International City and Silicon Oasis.
“Many of the projects delayed from the past 18 months are either now completed or expected to deliver in the
remainder of this year, putting total estimated residential supply for 2018 at 55,000 units.”
Based on its internal index, ValuStrat states the overall property market recorded a 1.2 per cent dip in value
during the third quarter. This translates into a 14.6 per cent decline from a mid-2014 peak.
“Compared to the last 12 months, one-third of villa/town house locations continued to see declines in value,
compared to half of apartment locations,” the report adds.
Among the locations to have seen a 5 per cent and more value gain over the last year are the Jumeirah Village
Triangle town houses (by 6.3 per cent), International City (5.1 per cent), Burj Khalifa (8.1 per cent), Motor City (5.5
per cent), and Discovery Gardens (7.7 per cent).
Residential investment yields have compressed by four basis points since the beginning of the year, as market
rents for the first half of this year were 10.5 per cent lower than last year. The highest net yields were registered
in Discovery Gardens, Dubai Sports City and Remraam at 6.03, 5.93 and 5.69 per cent, respectively.
Source: Gulf News
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HEADING FOR THE ROOFTOPS TO
GENERATE POWER Wednesday, October 18, 2017
Want to light up your homes via solar power? Utico, which is into utility industry services, has an answer for that.
It is committing $100 million into a solar investment programme, which will see it install panels on rooftops. Utico
aims to complete solar installations across 5,000 homes in the next 18 to 24 months. Homeowners can install
“SolarFree” rooftop systems “without getting into any long term liability through power purchase agreements or
long-term lease, the company said in a statement.
“We believe our solar investment proposition which will guarantee the fastest cash pay back to investors, along
with an option to recoup full investment in the project within a maximum of three years,” said Richard Menezes,
Managing Director of Utico. This will be a “huge incentive to homeowners to switch to solar power, in turn
promoting green economy.
“SolarFree will literally free up the home rooftop investor‘s equity in the project, rather than getting him into
liability and long term debt. Moreover, the investor will also gain from RoI (return on investment) through regular
and fast cash paybacks based on the solar power generated.”
An investor can opt to get back investment in the solar installation from Utico within 18, 24 or 36 months.
Investors will also have an option to buy the system through an in-house finance arrangement.
“Under SolarFree, we will offer the sale of the system at a fixed-price guaranteeing homeowners a return even if
the solar system does not produce any power and an optional programme that offers the homeowner get his
investment back within a period of three years,” said Menezes. “The time frame can be shorter even for elite
qualified consumers.”
The Dubai Electricity and Water Authority is running its own rooftop panel scheme in the form of “Shams Dubai”
solar programme.
Source: Gulf News
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DAMAC NINE-MONTH REVENUES IN SOLID
TERRITORY Wednesday, October 18, 2017
Revenues came in higher for Damac Properties at Dh5.8 billion in the first none months, against Dh5.12 billion a
year ago, but net profit took in a decline to Dh2.3 billion from Dh2.84 billion.
But there were enough signs of a strong and sustainable income flow for the medium-term, with booked sales at
the end of nine months at Dh6 billion, a sharp 13 per cent gain over the comparable 2016 number. On the
delivery side of things, Damac is maintaining a good pace, handing over 1,923 homes, including 852 units outside
of the UAE.
Total cash and bank balances were at Dh7.9 billion, while gross debt stood at Dh5 billion as at September 30.
Damac’s sales pipeline has been a beneficiary from its continuous round of offplan launches, which comes
alongside a general improvement in investor activity across Dubai’s property market.
According to Hussain Sajwani, Chairman of Damac, the market has been “steadily solidifying in 2017, with
increasing sales transactions and robust fundamentals, and our medium to long term outlook remains positive.
We have a strong value proposition and continue to appeal to a broader spectrum of buyers with a range of
products at attractive price points.”
Source: Gulf News
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MARINA ARCADE: SETTLE INTO A PLUSH
LIFESTYLE Wednesday, October 18, 2017
It’s not just another new luxury tower in Dubai’s famed high-rise neighbourhood. The elegantly designed Marina
Arcade incorporates a number of aspirational amenities, which its developer believes will distinguish it from the
pack. The residential tower houses 280 apartments ranging from one- to four-bedders, as well as triplex
apartments and palatial penthouses with private pool and terrace. Residents have access to sky gardens with
terrace and whirlpools. The tower also boasts one of the largest fully fitted multipurpose halls for community
activities, with a kitchenette for parties and large TVs.
Residents also enjoy genuine peace and quiet, as the developer has employed French experts, Technal, to ensure
solid sound proofing of all apartments and common areas.
“We are very proud of our amenity offerings, but the star is the gym, which is over 6,000 sq ft, making it the
biggest gym of all residential towers in Dubai Marina,” says Abdulaziz Al Awar, chairman of Mada’in Properties, the
developer of Marina Arcade. “We have dedicated areas for men and women, with some absolutely world-class
equipment and a steam and sauna section, as well as plush changing rooms.”
Aspirational experience
Marina Arcade stands 180m and 47 floors high in the entrance area of the Dubai Marina, allowing not only for
sweeping views of the marina, Dubai Media City and the sea, but also quick access to Shaikh Zayed Road
Interchange 5.
There are 366 parking spaces — one- and two-bedroom apartments are allotted one slot each, while three- and
four-bedroom apartments are provided two each. Special allocations have been made for the handicapped and
valet parking is at hand 24/7. There is also 24-hour concierge service, while amenities include a jogging track, pool,
table tennis and snooker areas, pool and gym.
“An interactive indoor kids play area and special lounges also add to the aspirational living experience,” adds Al
Awar.
Italian architect and interior designer Matteo Nunziati went for the stylish and sophisticated look his country is
known for. The units feature fitted kitchens with Bosh white goods.
Safety
The developer has also made sure to comply with Dubai’s fire safety standards in terms of cladding, and has also
integrated fire stops to increase the resistance of its building. The tower runs its own chillers for cooling,
increasing energy efficiency and lowering long-term costs for residents. An Emaar facility management subsidiary
supervises maintenance, according to Al Awar.
“Cooling charges are included in the service fees making this significantly lesser than the independently paid for
district cooling and, therefore, is of great benefit for the residents,” says Al Awar.
Value for money
More than 70 apartments at Marina Arcade have already found residents and more homeowners are expected to
move in before year end. There are also a number of tenants as the developer has retained some units for its
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leasing portfolio. However, the tenants can choose to eventually become homeowners, using part of the rent as
payment.
“End users, who are currently paying at least Dh140,000 rent yearly, can convert their rent into equated monthly
instalments,” says Al Awar. “We are confident all units will be sold within this year. As with any high-end Dubai
property, the buyers represent a mix of investors and end users, and come from diverse geographic and ethnic
backgrounds.
“They all have one thing in common — an aspiration to own or live in an awe-inspiring tower with breathtakingly
beautiful apartments and excellent amenities that embellish their lifestyle.”
The apartments were initially offered with prices starting at Dh1.6 million for a one-bedder; current prices now
start at Dh2.1 million.
“The price per square foot varies depending upon the apartment configuration and floor location, but we are very
competitive with the prevailing market rates,” says Al Awar. “In fact, customers get far greater value for money at
Marina Arcade than elsewhere due to its superior-quality finish, designer lobby, superb amenities, higher-quality
maintenance and five-star hospitality everyday living.”
The developer has worked out a payment plan, requiring 50 per cent to be paid on possession and the other half
over five years, working out at 2.5 per cent every quarter.
“We have also tied up with the UAE’s top banks for quick and easy loan processing with a 75:25 finance ratio,” says
Al Awar.
The future
The raison d’être for the name of the tower becomes obvious looking ahead. “The name Marina Arcade reflects
the composite community of residential towers and the retail arcade,” reveals Al Awar. “The original master plan
of the development included a 30,000-sq-ft retail arcade, which is scheduled to go into build-up in a few months.”
Source: Gulf News
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DLD OPENS INVESTMENT LANE FOR DIFC
ENTITIES Wednesday, October 18, 2017
It was recently announced that the Dubai International Financial Centre (DIFC) and the Dubai Land Department
(DLD) have entered into a strategic memorandum of understanding (MOU). The purpose of the MOU is to allow
investors to use DIFC-based entities to acquire and hold real estate assets in Dubai outside the DIFC. The move is
intended to be a critical step towards further boosting the DIFC’s status as a major financial and regulatory hub in
the Middle East.
Previous position
As of May, there were more than 1,600 active registered companies operating within the DIFC. The DIFC is an
attractive option for overseas investors as it offers a 100 per cent foreign ownership structure and an
independent, common law-based judicial system. However, companies established in the DIFC have not been
permitted to acquire real estate interests outside the DIFC, except in some limited cases. As a result, a large
segment of real estate investment in Dubai flowing from the DIFC was driven by individuals rather than
institutional investors.
Changes
As a result of the MOU, it is anticipated that the DLD will now allow DIFC entities to acquire real estate assets. On
this basis, DIFC-based entities, partnerships, foundations, real estate investment trusts (REITs) and real estate
funds will have increased access to direct investments in Dubai’s “on-shore” real estate market. With the rising
interest in property funds and REITs in the region, the DIFC’s well-established framework of laws and regulations
could provide a supportive environment for those seeking to set up an entity to invest in real estate as an asset.
The proximity and connection to the DIFC and its legal framework may also result in DIFC-based entities using the
DIFC court and arbitration centre as the appropriate dispute forums when entering into real estate contracts. This
is likely to result in a compelling argument for international institutional investors to invest in Dubai’s maturing
real estate market.
Possible limitations. While DIFC-based entities will now be able to hold real estate assets located outside of the
DIFC, at the same time there may be some important limitations, which will need to be considered and addressed
as part of any on-shore real estate transaction. For example, companies whose owners are non-GCC nationals will
still only be able to purchase property in areas designated for foreign ownership in Dubai. In addition, the DIFC-
based entity will only be able to hold the land. It will still need to separately appoint an appropriately licensed and
registered developer in the event the intention is to perform development activities on the land.
Investment potential. Despite there still being some restrictions for DIFC entities, the strategic MOU between the
DLD and the DIFC will nevertheless simplify the land owner registration process for these entities. The ability for
investors to use DIFC-based entities to hold real estate assets in Dubai will likely encourage structured investment
in the real estate sector by offering a broader range of structuring options for future projects, as well as increase
demand within the DIFC. This is an exciting step in the continuing development and maturity of Dubai’s real estate
market.
Source: Gulf News
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DEYAAR REVENUE UP 96% TO DH512M IN
FIRST 9 MONTHS Tuesday, October 17, 2017
Deyaar Development PJSC (Deyaar), a property developer and real estate services provider, today reported
revenues of Dh512 million for the first nine months of the year, a 96 per cent increase over the Dh261 million
seen in the same period in 2016.
The increase is attributable to robust sales and the acceleration of progress in the construction of Deyaar’s
flagship projects, including The Atria and Mont Rose, both of which currently have passed the 80 per cent
completion mark. The Midtown project is on track for completion by the third quarter of 2019.
Deyaar recorded a gross profit of Dh182 million in the third quarter of 2017, compared to Dh105 million posted in
the same period last year, while net profit stood at Dh100 million, compared to Dh167 million in same period last
year.
Net profit for the same period in 2016 included a write-back of a provision for impairment of investment in an
associate and a fair valuation gain on an investment property. Saeed Al Qatami, CEO of Deyaar, said, “Over the
past nine months of 2017, Deyaar has made major headway in three of our flagship projects while focusing on
expansions within the hospitality segment to further grow our portfolio. With the significant progress in our
developments, Deyaar is witnessing a new cycle of growth that aligns perfectly with our long-term strategic plan
driven by UAE Vision 2021.”
Source: Gulf News
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AZIZI EDGES CLOSER TO DH25B MEGA
LAUNCH Tuesday, October 17, 2017
Azizi Developments will take on a distinctively British theme for its next mixed-use development, expected to cost
a whopping Dh25 billion and create 30,000 residential units. It is to feature 105 mid- and high-rise buildings.
The location will be ‘central Dubai’, with further details expected to be announced at the formal launch. The
construction area will span 33 million square feet and twice the size of its Azizi Riviera project in Meydan One.
Construction of the project is scheduled to begin in November and be completed before Expo 2020.
“The new project announcement comes as part of Azizi Developments’ commitment toward developing a city
which has given us many opportunities, including secure investments and business environment,” said Mirwais
Azizi, Group Chairman. “The rules and regulations in Dubai have provided an ideal environment for business
growth, establishing the city as a preferred destination for trade and property investments.”
The developer generated a lot of buzz with its earlier launch, the Riviera, with Phase 1 selling out during last
month’s Cityscape Global.
Source: Gulf News
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DUBAI IN LINE TO ABSORB NEARLY 15,000
APARTMENTS THIS YEAR Tuesday, October 17, 2017
Dubai’s residential market could close the year with just under 15,000 apartments being handed over, compared
to 8,750 last year. Much of the handovers are taking place in the emerging locations of the city, and continue to
put further pressure on property values. But the full impact of the new deliveries could be felt only by early to
mid-2018
“There has been a steady rise in new projects reaching completion. However, Asteco believes a significant amount
of the supply previously forecasted for handover in [the fourth quarter of 2017] will spill over into 2018,” said John
Stevens, managing director of Asteco. “These delays are likely to result from both intentional phasing
considerations and unplanned construction delays/financial issues.”
In the third quarter, apartment prices were relatively unchanged, though on a year-on-year basis there was a
relative decline of around 4 per cent. For Business Bay and Dubai Marina, the dip was at a more pronounced 8
per cent year-on-year, followed by Dubai Sports City, International City and Jumeirah Village, each recording a fall
of 7 per cent. The Greens and DIFC properties remained at par compared with the third quarter of 2016.
“The [2017 third quarter] results clearly showed a rise in transactions across the market, as owners and tenants
continued to secure the best deal possible,” said Stevens.
“However, while the market remained flat or witnessed marginal decreases, some areas did show more
pronounced drops, particularly year-on-year.
“The rise in new finance options for off-plan residential projects, including increased incentives and post-
completion payment plans, has opened the market for buyers with more limited equity. These developments now
demand a larger share of the sales volumes compared to completed units, with rates continuing to decline as a
result.”
Source: Gulf News
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DUBAI’S RENTAL DIPS TO CONTINUE INTO
NEXT YEAR Tuesday, October 17, 2017
Dubai’s residential rent decline is spreading to more locations and chances are this should continue well into the
next year. But tenants should not be expecting a sharp decline similar to the one they saw back in 2009. This time
out, the softening will stick to a narrow range.
But for cash-strapped households, any relief on the rental side would be welcome. And where the decline does
not match tenant expectations, they are likely to look elsewhere.
“We expect the next cycles of renewals to result in rent reductions and tenant relocations, leading to modest falls
in overall market averages over the next 12–24 months,” says the new Dubai property update from Core Savills.
“We extend our forecast of the ongoing rental softening onto next year.”
The first cracks in the rental market appeared in the second-half of 2015, and more or less confined to the
upscale neighbourhoods — the Jumeirah villas for one and on the Palm — of Dubai.
And then through 2016, the declines became more apparent in Dubai Marina and the Downtown. This year, both
freehold and the more traditional residential areas are seeing landlords feeling the pinch.
Depending on an individual’s budget, Jumeirah Village and the Downtown are where he should be looking to get
the maximum benefits from the drop. At the former, rents are down 7 per cent.
“While the handover of new, higher quality units contributed to resilient sales prices, rents continued to decline
due to weak tenant demand and increased competition amongst older and new units,” said David Godchaux, CEO
of Core Savills. “Due to weak tenant demand, many landlords in this area now offer tenants attractive payment
options such as 12-cheque rent instalments or one-month rent-free.”
As for the Downtown, lease rates are lower by around 6 per cent as “new developments in neighbouring areas
were handed over and offered tenants more options”. For instance, the apartments at City Walk pulled in some of
the demand and are “likely to gain more traction as the community reaches higher occupancy levels”.
Keeping the rental market in a state of flux is the solid gain in new handovers. Deliveries during Q3-17 were
“significantly higher” than in the second quarter, totalling 5,950 units compared to 3,500.
“This spike in deliveries can be attributed to the completion of several sizeable developments over the summer,
some of which were delayed from Q2-17 and the Ramadan period,” Godchaux said. “We conservatively estimate a
further 5,000 units will be delivered by the end of the year in line with our annual forecast of 17,800 units, largely
in the mid-market segment.”
So, where does this leave the investor eyeing optimum yields from Dubai property? “Further yield compression is
likely although fundamentals for such compressions significantly vary across market segments,” the report adds.
“The bottom segment units are anticipated to suffer the most due to insufficient future tenant demand.
“On the contrary, the upper mid-market and prime segments should witness yield compression caused by gradual
stabilization and recovery in prices combined with stronger resilience in rentals in the mid-term.
“Lower income occupiers remain hesitant to buy, whilst investor-driven demand keeps off-plan sales buoyant –
albeit with developers increasingly competing on price points.” The buoyancy in the offplan selling space is
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double-edged. While it will be enticing for developers to keep launching more and mop up as many buyers out
there as possible, it also raises concerns over a significant stock build-up. Any sudden shift in investor support for
offplan would be detrimental to the longer term health of the market.
“Although we anticipate the number of proposed units and actual hand-overs to vary notably, we expect
developers to continue building in the run up to 2020 creating a significant surplus in the lower end of the market
that does not adequately address the needs of target end-users,” said Godchaux. “Despite stronger regulations
being in place, we continue to view increasing off-plan activity with caution, particularly given its detrimental effect
on ready sales that fuels further systemic market risk.”
Source: Gulf News
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MAG PROJECT BECOMES BIGGEST ROLLS-
ROYCE GHOST FLEET OWNER Monday, October 16, 2017
The Dubai developer MAG is to become the biggest fleet owner of Rolls-Royce Ghost cars in the Middle East.
The fleet features 12 of the super-exclusive model and could see further additions. These will be used at the MAG
Creek Wellbeing Resort in Dubai, billed as the first wellness-inspired project in the region.
“MAG Creek Wellbeing Resort is the epitome of wellness luxury, and our partnership with Rolls-Royce will
complement the architecture and landscaping of this luxury waterfront resort, while also framing the Rolls-Royce
motor cars in a beautiful setting,” said Talal Moafaq Al Gaddah, CEO of MAG Property Development.
“The iconic reputation of the Rolls-Royce brand perfectly complements this project, which brings the concept of
wellness-inspired real estate to the UAE for the first time.”
MAG Creek Wellbeing Resort will be home to 17 waterfront mansions deigned by Italian architect Carlo Colombo
and built adhering to the patented Delos WELL Building Standard. The project also features 75 luxury apartments,
172 serviced holiday homes, a wellness centre and a 95-room Wellness Hotel.
Source: Gulf News
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DUBAI’S OFFICE RENTS CONTINUE IN
STABILITY MODE Monday, October 16, 2017
The top-end of Dubai’s office property market is starting to stabilise further with supply levels more or less
running in sync with demand. For the majority of office tenants, there haven’t been any sudden rental shocks, as
rates have been flat for the better part of 22 months.
This holds true for both prime and secondary office locations, with upscale properties quoting Dh200 a square
foot on average, while those down the value chain are getting about Dh100 on average, according to the latest
update from CBRE.
“The ongoing permanence of rents underlines the relative scarcity of good quality office accommodation in key
areas, although future pipeline levels are now starting to rise again after a flurry of major new launches,” said Mat
Green, Head of Research & Consulting UAE, CBRE M.E.
A combined 85,000 square metres of new office accommodation was completed during the third quarter,
including the handover of the National Bank of Abu Dhabi headquarters in Al Jadaf and Building C3 at Dubai
Trade Centre District.
And then there was the launch of “District 2020”, a mixed-use scheme adjoining JLT and which will provide high
grade office space in the lead-up to Expo 2020. A key phase of the project — which comes from DMCC is expected
to be handed over in Q4-21 following the Expo.
Meanwhile, in Dubai’s retail space, size and scale are turning decisive in how much mall operators can charge.
“Trading conditions for smaller community and regional centres and non-mall formats have become more
testing,” the report states. “Retailers are increasingly looking for flexibility from landlords to help soften the
impact of changes in sales volumes.”
They will need as much help from mall owners as they can get. Down the line, there will be the further pressure
imposed by around 1 million square of gross leasable area (GLA) to be handed over between 2017-19.
In residential sales, the market continues to keep the numbers up, and especially from a year-on-year
perspective. Data from Dubai Land Department shows total value of residential transactions up by about 11 per
cent in H1-17, driven by growth in overall transaction numbers, which rose close to 29 per cent. But average sales
price “experienced a minor dip, falling by around 1 per cent”.
In residential leasing, average rentals dipped 1.5 per cent from the second quarter, but with notable variations in
performances at a sub-market level.
“The disparity between rising deal volumes and the performance of the leasing sector demonstrates how
investors appear to be taking a longer-term view on the residential market, looking beyond softening rentals,”
said Green.
Source: Gulf News
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REVEALED: TOP NATIONALITIES LOOKING
TO BUY DUBAI PROPERTIES Monday, October 16, 2017
Wealthy foreign investors have been pouring billions of dirhams into Dubai’s real estate, snapping up apartments
that can be rented out for profit or held as investments, and it looks like the trend will continue.
Residents from overseas markets, particularly from India, Saudi Arabia, United Kingdom, United States and
Pakistan are currently the top potential buyers of properties in Dubai. These likely investors are either on the
lookout for units in more mature areas or in recently launched, up-and-coming communities.
These are the latest trends revealed by real estate platform dubizzle, which has tracked the activity of foreign
users on its site. It found that residents from India, Saudi Arabia, United Kingdom, United States and Pakistan are
currently shopping for a new piece of property to buy in Dubai.
As of the month of August, Indians topped the list of most eager buyers, representing 19 per cent of the searches
for property for sale, followed by Saudis (16 per cent), Brits (15 per cent), Americans (13 per cent) and Pakistanis
(10 per cent).
Properties in Dubai continue to gain growing interest from buyers, both locally and abroad. In August alone, some
Dh2.7 billion worth of homes were snapped up in Dubai, with nearly half of them (40 per cent) located in Dubai
Marina and Downtown Dubai.
According to a JLL report, the total value of transactions of existing residential properties increased over 2017,
with sales year-to-date in August exceeding Dh13.7 billion, up 28 per cent year-on-year.
Search data also showed that potential buyers from other countries, such as Ireland, Egypt and Jordan are
showing interest to invest in the local property market, with around 8 per cent, 6 per cent and 3 per cent of the
visits, respectively. Interested buyers from Kuwait registered around 2.4 per cent of visits, followed by Germany.
There’s also been a notable interest from residents in the UAE and a review of local searches for property for sale
showed that UAE nationals, Lebanese and Chinese are looking to buy as well.
The trend coincides with the data supplied by the Dubai Land Department, which recently reported that buyers
from India, Pakistan, Saudi Arabia, UK, Egypt, Jordan, China, Lebanon and US had ploughed Dh151 billion into
Dubai realty over an 18-month period.
While UAE nationals emerged as the biggest spenders, with Dh37.4 billion worth of investments, Indian and
Pakistani nationals spent more than Dh27 billion in Dubai real estate, while those from Saudi Arabia snapped up
properties worth Dh12 billion. Buyers from Jordan and Egypt also spent at least Dh4 billion.
Source: Gulf News
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BIGGEST FACTORY OUTLET OPENS DOORS
IN DUBAI Friday, October 20, 2017
The biggest factory outlet in Dubai showcasing high end brands from all around the world, brands4u, has opened
its doors to shoppers.
The soft opening was in the presence of Indian film actor, producer and entrepreneur Sunil Shetty.
Paul Raymond P. Cortes, Consul-General of the Philippines in the UAE, officially inaugurated brands4u in the
presence of dignitaries from diverse fields.
Speaking to the media during the inauguration, Vijay Samyani, managing director and founder of brand4u, said:
"The UAE is the region where people always get inspired by trends. They are always looking for an opportunity
that will provide a chance to have one-on-one meeting with their brands of desire. So we believe brands4u would
open a wonderful shopping platform for them."
Kamal Lalwani, general manager, added: "We are very excited to offer value-based shopping experience to our
customers at brands4u outlet. It is a destination store in the heart of the city, where shoppers get multiple brands
under one roof at discounted prices. Mainly we chose this season as shoppers get an opportunity to shop
leisurely before the chilled waves of winter hit."
"Our mission is to introduce various luxury brands to customers with an extremely rock bottom price range. We
provide a unique shopping experience by offering great product ranges and decent value for money," added
Samyani.
Source: Khaleej Times
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DUBAI OFF-PLAN SALES UP 118% AT DH4B Wednesday, October 18, 2017
The total number of off-plan transactions in Dubai during the third quarter of 2017 has increased by 86 per cent
from the previous quarter, while the value of off-plan transactions was up 118 per cent at Dh4.04 billion.
"With reference to off-plan transactions, Dubai's real estate market has witnessed seasonal peaks and troughs in
the last year. After a promising start to 2017, sales plummeted during a disappointing Q2. However, they have
picked up positive momentum in Q3," said Ivana Gazivoda Vucinic, head of advisory and research at Chestertons
Mena.
The area with most transactions was Dubai South with 1,151, closely followed by Downtown Dubai with 821 and
Business Bay with 686. The total value of off-plan sales in the period was Dh4.04 billion with Downtown
commanding 50 per cent of the overall value. The increased interest in off-plan units had a negative impact on
completed units where an 11 per cent decrease in transaction volumes and a 19 per cent in values were
witnessed.
"In Q4, we expect to see further corrections of sales prices and rents. A slight pickup of completed unit
transactions is expected. This will, however, have a negative impact on off-plan sales transactions which we
expect to decline and then stabilise," said Vucinic.
Overall, apartment sales prices have continued to decline during the third quarter of 2017 witnessing a drop of
two per cent. This could potentially trigger further declines in completed unit values, as investors shift more
towards off-plan property opportunities offering convenient payment options such as five-year post-handover or
one per cent payment per month.
Prices varied significantly from community to community within the apartment market with Dubai Silicon Oasis
declining nine per cent to Dh829 per sqft whereas The Greens witnessed growth of 13 per cent to Dh1,352 per
sqft, by far the best performing area in Q3. Dubai Marina was the only other location to witness an increase of
two per cent, average sales prices in the area are now Dh1,470 per sqft.
Apartment rents fell further in the third quarter after additional stock entered the market leading to a three per
cent decline. Discovery Gardens, Dubai Marina and Jumeirah Village Circle, on average, witnessed declines of five
per cent.
"We have seen a two per cent decline for studios and a three per cent decline for one-, two- and three-bedroom
apartment units. Studios have been relatively resilient this year and performed better throughout the year when
compared to larger apartments, the same is true of the villa market. Two and three-bedroom villas are
performing better than larger configurations," added Vucinic.
Villa sales prices have been more resilient due to the higher level of corrections during the previous quarters. The
Meadows and Springs were the worst affected areas, both recording a seven per cent decline. In villa rentals,
three-bedroom units witnessed a modest four per cent increase during the third quarter, while other sized units
declined by two per cent (two bedrooms), three per cent (four bedrooms) and one per cent (five bedrooms).
"To stimulate demand, we are increasingly seeing landlords now offering more favourable rental plans, these
include up to 12 cheques and even rent-free periods as an incentive to lease properties," said Vucinic.
Source: Khaleej Times
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GAP CLOSES BETWEEN DUBAI'S PRIMARY,
SECONDARY MARKETS Tuesday, October 17, 2017
Value is derived by the agreement of a willing buying and seller in an arm's length transaction. However, what if a
buyer is willing to pay more directly to a developer, who is willing to sell for more? What if many buyers are willing
to pay more in the primary market while the secondary market is suffering and spotted with distressed deals? Is
the two-tiered market really that divided?
The Dubai market is saturated with an array of new developments and a supply pipeline of approximately 32,000
units still scheduled to be delivered in 2017. Fundamental market principles of supply and demand dictate the
direction of prices overall. This is evident in the decline of -2 per cent in the past year alone, in line with
government regulations implemented to curb demand while an abundance of new supply continued to enter the
market.
Demand was driven by affordability and socioeconomic factors while supply was driven by the optimism of
developers who have invested heavily in Dubai. The result, an overall reduction in prices and a divide between the
primary and secondary markets. Speculation was fuelled by the announcement of Expo 2020 which boosted the
secondary market initially. It can be argued that the secondary market was then curbed by government
regulations in order to assist the primary market. While hefty deposit and purchase cost requirements halted
secondary market purchases, incentives were provided through easy payment plans within the primary market to
ease purchases. The market, therefore, has been driven by off-plan transactions during 2014-2017.
We are now at a stage where a significant proportion of new developments are near completion, hence the
primary and secondary markets are competing on a like-to-like product. The secondary market is still driven by
demand while the primary market is driven by the developers' profit margin. Some developers have been known
to believe that the market is not demand driven and that demand is merely a made-to-believe concept while
prices are being determined by developers. It is hard to believe, however possible in this part of the world.
There is a significant proportion of buyers opting to buy direct from developers in the primary market. What is
more interesting is that they are paying a higher price to fulfill the developers' higher price requirements by
comparison to the secondary market. On average, buyers are paying five per cent more than what is on offer in
the secondary market. Although they are getting a new property, the underlying reason to pay more could be due
to another factor.
The costs incurred on a secondary market purchase include two per cent agency fees, four per cent registration
fee and another one per cent on other charges, particularly for mortgage buyers. In the primary market, however,
there would be zero agency fees and the four per cent registration fee is paid by the developer in most cases. As it
transpires, the gross price paid in both the off-plan market and secondary market is very similar.
What needs to be remembered is the net price, which is unlikely to be achieved when the primary market buyer
decides to sell his property. At that point, the importance of market fundamentals and supply and demand will
prevail again, when the seller must be willing to sell his property at the price a secondary market buyer is willing
to pay.
Source: Khaleej Times
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COMING UP: DH25 BILLION MEGA PROJECT
IN HEART OF DUBAI Tuesday, October 17, 2017
Azizi Developments has announced plans to launch a mega community in the heart of Dubai.
The project, whose name is yet to be announced, will have a distinctly British feel, with themes and elements
influenced by contemporary British culture and way of living. The development will comprise residential,
commercial and retail space, with 105 mid-rise and high-rise residential buildings featuring 30,000 apartments.
The new Azizi project will be located in central Dubai with a construction area of 33 million square feet - twice the
size of Azizi Riviera in Meydan One. The development will include education facilities, retail outlets, hospitality, a
shopping area and outdoor recreation spaces.
Construction of the project is scheduled to begin in November and be completed before Expo 2020.
Source: Khaleej Times
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'AFFORDABLE' HOMES STILL OUT OF
BOUNDS FOR END-USERS IN DUBAI Tuesday, October 17, 2017
Developers in Dubai are shifting their strategy to affordable housing. However, how much of the announced new
supply is actually affordable to end-users in Dubai? Not much.
"Anecdotal evidence suggests a mismatch between affordable stock and the requirements of prospective home
owners. While studio and one-bed units appeal to investors, end-user demand is for smaller two-bedroom units
at similar entry prices," according to a new report released by property consultancy Core Savills.
Lower-income occupiers remain hesitant to buy while investors drive demand for off-plan sales, particularly
below the Dh1 million price point. Sales transactions for ready units in the third quarter of 2017 increased
modestly at seven per cent, but were overshadowed by the 62 per cent rise in off-plan sales when compared to
Q3 2016. Even with this spike in off-plan transactions, the average unit value is 11 per cent lower than last year,
reflecting the strategy shift that developers are resorting to by bringing lower entry products to the market while
competing on prices.
"Instead of adjusting supply to demand, a few developers are taking the risky route of adjusting prices - by
occasionally offsetting quality or shrinking their margins. This brings a significant amount of lower quality stock to
the market which may find short-term investor take-up on the back of lucrative payment plans, sometimes aided
by the high level of marketing spend. If sales and tenant demand for such products has been overestimated, this
may not be sustainable in the long term," warns David Godchaux, CEO Core Savills.
Burgeoning off-plan activity is also affecting the ready sales market. Individual landlords are trying to keep pace
with the overhang of off-plan projects by reducing sales prices, as a result bringing the area average down. This
presents opportunities for home buyers. For instance, in Dubai Marina, due to increasing competition from off-
plan apartment deliveries launched at higher entry points, many investors are opting for ready units at lower
prices.
The weakest performing villa districts in terms of sales were Jumeirah Islands and Jumeirah Park, both dropping
almost six per cent. A two per cent price increase was recorded in Emirates Hills while few large transactions of
new or refurbished villas on the Palm Jumeirah have seen average prices in the area decline by 2.5 per cent,
according to Core data.
Rental market
The consultancy claims there has been widespread rental contractions across districts in Dubai. As sales prices
have not dropped at the same rate, yield compression has been witnessed across most areas and is expected to
continue in 2018.
Godchaux explains: "Widespread falls in rents continue to force the market to adjust downwards - an effect that
will persist as the next cycles of lease renewals inspire further rent reductions and relocations, particularly among
tenants whose rents are yet to reflect the softening market. Although widespread, the magnitude of these drops
will likely remain limited." According to the report, Dubai Marina and the Palm Jumeirah were the weakest
performers, with rents dropping by 10 per cent year on year.
Supply
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Core estimates that over 5,950 units were delivered in Q3 and forecasts that 17,800 units will be handed over for
the whole year.
Godchaux concludes: "Although actual handovers may vary substantially from expected supply figures and even
with stronger regulations in place, we remain very cautious about the possible risk of oversupply in the lower end
of the market."
Source: Khaleej Times
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DUBAI HOME BELOW DH1 MILLION? I WILL
BUY Tuesday, October 17, 2017
All the action in the Dubai property sector is transpiring in the under-Dh1 million price market. Not only does this
signify an effort by developers to tap the mid-income market segment but also the willingness of banks to finance
more end-users.
According to GCP Properties, in terms of expected supply that has been announced, 37 per cent is below the
Dh1,000 per square foot while 45 per cent of the property transactions conducted since 2015 have been below
the Dh1 million mark.
"This suggests that there has not only been a definitive shift in the part of developers to cater to this latent
demand, this shift has also met with success as Dubai moves its focus to cater to the more mid-income segment
of the demand curve," says Hussain Alladin, head of research at GCP Properties.
In terms of new supply, a majority of off-plan units being launched is below Dh1 million, mostly apartments and
townhouses.
Most off-plan transactions in this price range is concentrated in areas such as Dubai South, Al Furjan, Town
Square, Jumeirah Village Circle, Jumeirah Village Triangle, MBR City, Akoya and Akoya Oxygen. Emaar, Dubai
South, Azizi, Damac, Nshama and Danube are only some of the developers offering properties in this price point.
"The most popular off-plan transaction is a 1-bed in Dubai South with an average sale price of Dh583,000,
followed very closely by a 2-bed in Dubai South with an average sale price of Dh860,000," informs Lynnette Abad,
partner and head of Property Monitor.
The sub-Dh1 million mark is mostly made up of studios and one bedrooms, and to this extent, there is supply in
more upscale areas such as Dubai Marina, Business Bay and Meydan. It is only when you look at two bedrooms
and above, does the number of communities shrink.
Meanwhile, if you are looking to buy a ready property on the secondary market below Dh1 million, consider
communities such as Discovery Gardens, International City, Dubai Sports City, Silicon Oasis, IMPZ, Dubai
Investments Park, Al Khail Heights, Jumeirah Village and areas in Dubailand that include Liwan, Majan, Arjan and
Dubai Residential Complex.
"The average apartment sale in Discovery Gardens is Dh706,000 for a 1-bed and Dh494,000 for a studio," adds
Abad.
In areas such as Dubai Marina and Jumeirah Lakes Towers, there are a lot of ready units available below Dh1
million, according to Lewis Allsopp, CEO, Allsopp & Allsopp.
"There are also off-plan options on the Palm Jumeirah that you can buy for under Dh1 million as well as in Dubai
Hills, Dubai Creek, Business Bay and JLT," he adds.
However, anecdotal evidence suggests that it is still mostly investors who are picking up homes below Dh1
million.
"The biggest challenge to date is for an end-user to come up with a 25 per cent down payment. If developers can
create a scheme which caters to this group, whether it's through a rent-to-own option etc, they will capture a very
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large end-user market which has been yearning to purchase property in Dubai," observes Abad. Although end-
users are buying properties where the developer offers attractive payment plans, activity is expected to pick up
considerably once the properties are handed over and buyers can get banks to finance 75 per cent of the
purchase.
"The challenge has always been for end users to obtain financing. Banks have become more willing to provide
financing, and this is reflected in the mortgage statistics. Mortgage transactions have risen from 20 per cent of
overall activity in 2012 to more than 55 per cent in 2017. Nonetheless, demand will be even higher should
financing conditions ease further," reckons Alladin.
Besides the down payment, end-users must also pay several processing fees during their property purchase.
"We're talking approximately 32 per cent of the property value, once we consider bank fees also. It's a lot of
money for people to be able to save up
Source: Khaleej Times
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ENBD REIT DEPLOYS $105 MILLION FROM
NASDAQ DUBAI LISTING Monday, October 16, 2017
ENBD Reit, the Shariah-compliant real estate investment trust managed by Emirates NBD Asset Management, has
successfully completed deployment of the $105 million it raised at listing in March 2017.
ENBD Reit's latest acquisition of The Edge building in Dubai Internet City also utilised its existing Islamic finance
facility. Recent acquisitions by ENBD Reit have focused on diverse asset types.
In May, the Reit acquired Uninest Dubailand, a student accommodation building, from GSA for $33 million. In
August, ENBD Reit acquired its first development asset - South View School - in Remraam at a transaction value of
$15 million, growing the total portfolio value to $367 million.
ENBD Reit's most recent acquisition of The Edge in Dubai Internet City saw a transaction value of $76 million push
the total portfolio value up to $447 million.
Anthony Taylor, fund manager, real estate, at Emirates NBD Asset Management, said: "We're pleased to announce
the complete deployment of the cash raised as part of the listing in March. Investors in Reits are looking to see
efficient utilisation of funds in a portfolio of assets that will consistently generate income. Ours is such a product,
and we are looking forward to growing both its footprint and value in the coming months and years."
Following the deployment of the listing proceeds, ENBD Reit now holds 10 assets across Dubai. The portfolio has
an overall occupancy of 89 per cent, with a weighted average unexpired lease term of 3.5 years. Offices account
for 67 per cent of the portfolio, residential buildings account for 22 per cent and alternative assets (including
student accommodation and education) make up the remaining 11 per cent. ENBD Reit's last reported net asset
valuation (NAV) was USD $292 million, or $1.15 per share, as at June 30, 2017.
Source: Khaleej Times
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JVC, DUBAI MARINA MOST PREFERRED BY
FOREIGN HOME BUYERS Monday, October 16, 2017
The most searched areas by overseas property buyers in August 2017 were Jumeirah Village Circle, Dubai Marina,
the Palm Jumeirah, Abu Hail and Downtown Dubai, according to a recent report by dubizzle Property.
"While recent local trends suggest that the interest of mid-market homes and newer areas are taking the spotlight
away from the more mature areas, interest from foreign investors is more varied. There seems to be a healthy
interest in the Dubai property market with the popularity of areas being distributed among more mature areas
and newer, up-and-coming communities," said Barry Judge, general manager of dubizzle.
In August, Indians topped the list of potential buyers, representing 19 per cent of the searches for property for
sale, followed by Saudis (16 per cent), Brits (15 per cent), Americans (13 per cent) and Pakistanis (10 per cent).
Users based in Ireland, Egypt and Jordan also showed interest in the UAE property market with around eight per
cent, six per cent and three per cent of the visits respectively. Kuwait users registered around 2.4 per cent of the
total foreign visits for property for sale on dubizzle, followed by two per cent of the visits from Germany.
The top nationalities that search the platform for property for sale from investors based in the UAE in August
were UAE nationals, Lebanese and Chinese.
This is in line with the top 10 nationalities investing in property in Dubai over the past 18 months with a total
transaction value worth Dh151 billion, which are India, Pakistan, Saudi Arabia, UK, Egypt, Jordan, China, Lebanon
and USA as recently revealed by the Dubai Land Department.
Source: Khaleej Times
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BENGHATTI COMPLETES 5 PROJECTS DH1B
AHEAD OF SCHEDULE Sunday, October 15, 2017
Dubai-based property developer Benghatti on Sunday said it delivered 5 projects worth Dh1 billion ahead of
schedule in the UAE.
The company said in a statement that its projects range from residential to industrial, including Benghatti Views,
Benghatti Horizon, a factory in Dubai Silicon Oasis, Benghatti Court at the Jumeirah Village Circle, as well as the
main building of the juice and food factory in Abu Dhabi, which accounts half of the total investments value of
Dh500 million.
"We are constantly looking at the best investment opportunities in the local market in Dubai, as our future
objectives do not stop at certain limits. We will continue to strive to develop and implement the best practices in
all our projects in terms of engineering, designs, quality of finishes, distinguished locations," said Mohammed
Benghatti, CEO, Benghatti Developer.
Benghatti pointed out that the company has started to implement its future plan until 2020. Its portfolio includes
17 new projects in different parts of Dubai. These new projects are distributed among five vital investment areas
in the Emirate, namely, Silicon Valley, Business Bay, Al Jaddaf, Dubai Land Residence and Liwan.
The developer, which has 30 projects currently under developments in various locations in Dubai - a is also
considering acquiring more development land plots in the same areas to strengthen its land bank, which currently
stands at 2 million square feet.
These 30 buildings will add 6,000 housing units and retail spaces to the local market, at a rate of 1,500 to 2,000
units per year.
Mohammed Benghatti stressed that Dubai real estate market has all the fundamentals and bases to keep abreast
of all developments in different circumstances and times. "We are always optimistic about the future of this sector
during the coming years. There are huge opportunities with high returns on investment. They are feasible and
logical", he added.
Benghatti has recently launched its latest real estate project, Benghatti Stars, with a total investment of Dh250
million.
Source: Khaleej Times
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WHAT HAPPENS TO ABSCONDERS THAT
FLEE MORTGAGED DUBAI PROPERTIES IN
NEGATIVE EQUITY? Wednesday, October 18, 2017
Given the fall in property prices in Dubai, I know several people that have fallen into negative equity and are
considering walking away from their mortgages and returning to their home country. Can you explain any
potential legal repercussions in this scenario for the owner? NC, Dubai
The first thing I would like to say is don't walk away from any financial commitment, especially a mortgage. Even if
the property is in negative equity, there are always better options available.
Contrary to popular belief, banks are more reasonable than they are portrayed and the key is always
communication.
I do not have your detailed information to comment specifically but suffice to say that if a property is worth less
than its mortgage, a surprising number of banks would rather accept a small loss (difference in selling price to
mortgage value), than have to deal with the fallout of an absconded mortgagor. Selling a property, even for less
than the mortgage value, can still be a viable option as long as the bank is involved and has agreed to the sale.
Absconding does not really offer any kind of solution because, if carried out, it will leave the absconder very
vulnerable.
The debt does not disappear and depending on the bank, it could also employ individuals to find the missing
person to recoup the outstanding amount plus additional costs.
If the absconder ever finds himself having to land back in Dubai (for whatever reason), the authorities will arrest
him/her at the airport and that’s when the real problems start.
The reality is that the UAE repossession process is not as robust as say, in Europe or the US for example and the
whole process can take several months. If individuals are finding it hard to keep up with repayments, it is
important not to panic; one must take stock of the situation, definitely involve the bank and try to come up with a
workable solution/strategy for all.
I have a small issue regarding my current tenancy and would like to know if a landlord can:
1. Sell a property while a tenant is living in it?
2. Do apartment viewings for potential buyers (if this is not in the contract)?
3. Request an agent takes pictures of the property while the tenant's belongings are there? ZF, Dubai
A landlord is perfectly entitled to sell his or her property even if there is a tenant in situ, having said that, it is
important that the landlord respects the fact that while the property does not belong to the tenant, it is his or her
home, therefore careful consideration has to be given in terms of privacy and the tenant's time especially when it
comes to showing the property.
As the tenant, you obviously have a right of privacy, so for the taking of photographs, you can request the agent
states on any future advertising that the furniture is not for sale and is only there to give a representation. With
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reference to the viewings, even if there is nothing mentioned in the rental contract, the agent must attend all
viewings at a time that is convenient to you. If you do not wish for any of this to happen, you can just say no,
however not working with the landlord while he is trying to sell can be deemed as being obstructive on your part
and will not endear you to his good side, so bear this in mind.
If the landlord wants to evict you for reason of the sale, he has to give you 12 months written notice sent via
notary public or registered mail. It is also worth noting that if the buyer is wishing to move in himself, he has to
send another 12 months' notice himself.
Source: The National
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ADDRESS RESIDENCES JUMEIRAH RESORT +
SPA APPOINTS MAIN CONTRACTOR FOR
JBR'S TALLEST TOWER Wednesday, October 18, 2017
Multiplex Constructions has been awarded the main construction contract to build the Address Residences
Jumeirah Resort + Spa in Dubai.
Mobilisation has started for the construction of the mixed use 77-storey twin tower development, which will
feature a 217-room hotel, La Dolce Vita inspired furnished apartments, and The Residences Jumeirah Dubai,
Managed by Address, the unfurnished residential apartments.
The project will be the tallest tower on the Jumeirah Beach Walk skyline. It is scheduled to be completed in the
fourth quarter of 2020.
Source: The National
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DAMAC'S Q3 PROFITS DOWN 20% AS COST
OF SALES SOA Wednesday, October 18, 2017
Profit for Damac Properties, the Dubai real estate developer and operator of the emirate’s Trump International
Golf Club, dropped 20 per cent in the third quarter, coming in below an analyst estimate, as the cost of sales leapt
70 per cent.
The developer reported a net profit of Dh719 million for the three months to September 30, down from Dh902m
a year earlier. The figure came in below an estimate of Dh780m from EFG-Hermes.
Damac’s revenue rose by 30 per cent to Dh2.29 billion for the quarter, coming in ahead of EFG’s estimate of
Dh1.8bn, helped by a surge in international sales to nearly Dh1bn from Dh20m in the same period last year.
However, sales in the UAE declined by a quarter to Dh1.3bn as Dubai’s property market remains sluggish.
“Dubai’s property market has been steadily solidifying in 2017, with increasing sales transactions and robust
fundamentals, and our medium to long-term outlook remains positive,” said Hussain Sajwani, the chairman of
Damac Properties.
“We have a strong value proposition and continue to appeal to a broader spectrum of buyers with a range of
products at attractive price points.”
The developer awarded a Dh628m contract in August to build about 1,300 villas within its Akoya Oxygen cluster to
Arabtec Construction. Damac said at the time that deliveries on the clusters would start from the second half of
2018 and run through to 2022.
Damac shares ended the day unchanged at Dh3.95.
Fellow Dubai property firm Deyaar Development on Tuesday posted a 40 per cent fall in profit for the first nine
months of the year, as the company wrote back provision for impairment of investment in an associate and
recorded fair valuation gain on investment properties for the corresponding period last year.
Source: The National
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OFF-PLAN SALES DRIVING DOWN DUBAI’S
RESIDENTIAL PROPERTY PRICES, BROKERS
SAY Tuesday, October 17, 2017
Residential property transactions in Dubai are rising, but the price trajectory remains unclear as developers
selling off-plan units drive down prices in the affordable housing sector and create a stock of low-quality
residential units in the emirate , brokers said on Tuesday.
The number of deals for built units since the beginning of this year has increased by 7 per cent year-on-year,
while off plan sales jumped 62 per cent, according to Core Savills.
“As we enter the final quarter of 2017, a year in which most market players expected the Dubai residential market
[prices] to bottom out, there remains a clear lack of direction,” said the broker. “Despite higher year-on-year
transaction volumes, uncertainty and concerns of oversupply have produced divergent sale price trends and
further market fragmentation between performing and non-performing communities.”
The market fragmentation is being exacerbated by developers who are behind a big chunk of off-plan new stock
in the mid-market segment and are attracting investors, particularly, to the below Dh1 million price point, the
broker said.
Average unit value in the off-plan affordable housing segment fell by 11 per cent compared to last year as new
inventory and easy payment options continue to push prices lower, Core Savills said.
“This further illustrates developers’ current strategy of bringing lower entry products to the market while
competing on prices,” said the broker. “Instead of adjusting supply to demand, a few developers are taking the
risk of adjusting prices, in some cases by offsetting quality or shrinking their margins."
The off-plan sales are concentrated in the affordable market segment, which includes a two bedroom unit below
Dh1 million, and some properties in the mid-market segment, which ranges between Dh1-2.5 million for 2-3
bedroom apartments. According to Core Savills statistics, the mid-market segment represented 52 per cent of
deliveries in the third quarter, followed by affordable segment with 28 per cent.
“If sales and tenant demand for such (off-plan) products has been overestimated, this may not be sustainable in
the long term,” said the broker.
“This trend also affects the secondary sales market, artificially reducing prices, as individual landlords try to keep
pace with off-plan prices that are bringing area averages down and dampening recovery.
Overall, apartment property prices in Dubai were down 4 per cent year-on-year in the third quarter and flat
quarter-on-quarter, with off-plan sales driving down rates, according to an Asteco report.
“These developments now demand a larger share of the sales volumes compared to completed units, with rates
continuing to decline as a result,” said John Stevens, managing director of Asteco. “Compounding the issue,
despite increased government spending on infrastructure, hospitality and retail in the run-up to the Expo 2020, is
that market sentiment remains low. This is largely due to weak employment growth and the bearish outlook in
terms of oil prices and global economic outlook.”
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Both brokers expect deliveries to continue in the ramp-up to the Expo, but Core Savills cautioned that the quality
of off-plan products will not meet the demands of the end-users.
“Although we anticipate the number of proposed units and actual hand-overs to vary notably, we expect
developers to continue building in the run up to 2020 creating a significant surplus in the lower end of the market
that does not adequately address the needs of target end-users,” said Core Savills. “Despite stronger regulations
being in place, we continue to view increasing off-plan activity with caution, particularly given its detrimental effect
on ready sales that fuels further systemic market risk.”
Source: The National
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DUBAI HOLDING 'RE-EVALUATING'
JUMEIRAH CENTRAL, INSISTS PROJECT WILL
CONTINUE Sunday, October 15, 2017
Dubai Holding, one of the emirate’s three big conglomerates, is “re-evaluating” its 47 million square feet Jumeirah
Central residential and office development on the Sheikh Zayed Road “to meet expected future demand”. The
company said it remains committed to the overall project.
The developer said yesterday its changing priorities for the development, unveiled at last year’s Cityscape Global
exhibition, have prompted a restructuring of its upper management, with chief operating officer Morgan Parker
due to leave the company in the next three months.
“Dubai Holding is prioritising projects that will be ready for Expo 2020 Dubai and those that will help draw tourists
to the Emirate," a Dubai Holding spokesperson said on Sunday.
"As a result, we are currently focusing our resources on projects such as Marsa Al Arab. We are still committed to
Jumeirah Central but the project is currently being re-evaluated to meet expected future market demand. This
decision has resulted in an organisational restructuring that will see Morgan Parker stepping down from his role
by the end of this year.”
Jumeirah Central was originally due to include 9 million square feet of retail space, 7.5 million square feet of
offices, hotels with a total of 7,200 rooms, and 11,000 homes.
The project is based on the former site of the Mall of the World project, and is set to contain a total of 278
projects in total. Although Dubai Holding did not say how many phases would be developed in total, it said its
intention is to concentrate on the south-eastern corner of the site adjacent to the existing Sharaf DG Metro
station.
The first phase of the overall project was to comprise 17 million square feet, including 12 office projects and 14
hotels.
At the time of its unveiling, Jumeirah Central's total cost was estimated at Dh73.4b billion. Of that, the company
said it would spend roughly Dh24bn on the first phase of the project.
Source: Khaleej Times
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INVEST AD IN JOINT VENTURE WITH
CANADA'S BROOKFIELD ASSET
MANAGEMENT Monday, October 16, 2017
Invest AD, the Abu Dhabi asset manager, will create a real estate investment trust (Reit) in a joint venture with
Canada’s Brookfield Asset Management to target investment opportunities in the UAE.
Brookfield, which has US$250 billion of assets under management, will develop other real estate investment
products in collaboration with Invest AD in addition to the Reit, which will be formed under the regulatory
framework of Abu Dhabi Global Market.
“The UAE real estate market has reached a level of maturity that requires the professional management of assets
and supports the creation of investment vehicles that will be attractive to institutional and individual investors,”
said Faras Al Ramahi, the chief executive of Invest AD.
“Invest AD’s partnership with Brookfield, one of the most respected names in global real estate, will help to
deliver innovative and value-enhancing real estate investment products. Through the Reit, which is just the first
product that the joint venture is planning, we aim to build a portfolio of high-quality assets and bring other
property owners across the UAE into a successful partnership while offering investors the benefits of liquid access
to stable, income-generating commercial real estate.”
Reits trade like stocks and bonds on an exchange, paying out dividends from rent to investors.
Source: The National
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ADIA SIGNS $1BN INVESTMENT DEAL WITH
INDIA'S NIIF Tuesday, October 17, 2017
India’s National Investment and Infrastructure Fund (NIIF) has announced a $1 billion investment agreement with
the Abu Dhabi Investment Authority (ADIA).
As part of the agreement, ADIA will become the first institutional investor in NIIFs master fund and a shareholder
in its investment management company, National Investment and Infrastructure Ltd.
The proposed corpus of the NIIF is proposed at $6 billion, of which 49 percent is to come from the Indian
government, with 51 percent being offered to long-term international investors.
Amon the infrastructure areas NIIF is targeting are housing, water, waste management and energy.
“This agreement marks the culmination of an extensive process of collaboration with ADIA to develop an
investment structure that is attractive to international investors will remaining closely aligned with the NIIF’s
objectives,” said NIIF CEO Sujoy Bose. “We are proud to have ADIA as our founding partner and we now look
forward to announcing further agreements with other investors.”
Khadem Al Remeithi, executive director of the real estate and infrastructure department at ADIA, said the NIIF “is
set to play an important role in facilitating the flow of foreign capital into India’s infrastructure sector.”
“As a long-standing investor in India and in infrastructure globally, ADIA welcomes the opportunity to be the first
to partner with NIIF in a platform that is sure to be of interest to other long-term institutional investors,” he
added.
Source: Arabian Business
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362 RESIDENTIAL PLOTS GRANTED TO
SHARJAH CITIZENS Saturday, October 21, 2017
The Committee apologised for 16 applications for non-fulfillment of conditions to meet the allocation
requirements, this came during the meeting held at the headquarters of the Sharjah Planning and Survey
Department.
Waleed bin Falah Al Mansouri, Chairman of the Committee, said that the committee decided to grant 362 plots to
the citizens in different regions in the Emirate of Sharjah, as Sharjah City - Central Region - Eastern Region - Kalba,
Khorfakkan - Dibba Al Hisn –Al Hamriya City.
He explained that the committee discussed the best ways to meet the needs of the citizens in line with the
directives of His Highness Sheikh Dr. Sultan bin Mohamed Al Qasimi, Supreme Council Member and Ruler of
Sharjah and instructions of Sheikh Sultan bin Mohammed bin Sultan Al Qasimi, Crown Prince and Deputy Ruler of
Sharjah, and follow-up of Sharjah Executive Council, to meet the needs of citizens and to provide them fast and
simplified procedures.
Source: Sharjah 24
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PAKISTAN’S DEVELOPERS UNFAZED BY
RECENT PRICE DROPS Wednesday, October 18, 2017
Pakistan’s developers are not going to get caught up thinking short-term.
That’s why they seem to be taking in their stride the near constant political turmoil, a relatively overvalued
currency, and the fact that property values are down by nearly double-digits from what they were just under a
year ago. And developers — whatever be their size — are keen to emphasise that these are only short-term
hurdles to climb over.
That is why Zeeshan Zaki, Director at Karachi-based Saima Builders can say: “For quality developers and
developments, there has been no shortage of demand. Projects continue to be sold regardless of the political
turbulence … such is the shortage.
“Since 2011, property prices have gone up by 5-6 times and even higher in many cases. While this may sound
extremely high, it is important to remember that it has come from an extremely undervalued position. And even
today remains undervalued relative to its peers in the region.”
Non-resident Pakistani buyers have had much to do with demand spike since the start of the decade. It was also
the time that developers started to favour sprawling gated communities, and which managed to pick up
significant interest from buyers in the Gulf.
But a key component enabling the upturn was the soft Pakistani rupee for the better part of the decade. That is
not the case now.
“The rupee remains overvalued from a trade perspective, and something that has been stated by the IMF,” said
Sameer Lakhani, Managing Director of the consultancy Global Capital Partners. “The government thus far has
been reluctant to devalue the currency, because they reckon structural reforms are needed rather than just a
mere devaluation.
“However, if we are took at past performance, it is highly probable the currency will move lower within the next 12
months.”
Currently, a dollar fetches Rs105.38, but in summer this year had dropped to Rs108.09. The IMF in some of its
recent pronouncements have suggested the currency is about 20 per cent overvalued.
Any devaluation move could turn into a boom time for the country’s developers, more so if overseas Pakistanis
feel the recent drop in property values further improves their prospects.
Across all of the prime cities, recent months have seen corrections, in some instances quite sharp too. In the
upscale areas, values are now down by 5-15 per cent, while in second-tier neighbourhoods, the hit has left quite a
dent in values, down 20-25 per cent, according to market sources.
“The situation will remain somewhat turbulent on the economic front until the political situation stabilises,” said a
developer. “Investors hate uncertainty and these appear to be uncertain times.”
It could be that the real estate market — and the wider economy — has to wait until after June 2018 before a
clearer picture emerges. The next general elections are due then, and a clear mandate from voters should
smoothen some of the rough edges on the political front.
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Zaki, for one, remains convinced the property market has what it takes to take on the recent turbulences. “I
maintain that property values have only just started to recede that too in select areas and predominantly because
of the political situation in Pakistan,” he added. “Fundamentally, the country remains severely undersupplied in
terms of quality housing, a situation that is expected to remain for much of the coming decade.”
Most developers are thinking in the longer term. Despite the price drops, the number of project launches have
not seen receded. Market sources suggest that what is absent is the speculative buying, and that can only return
when the political situation corrects itself.
“Until then, the property market will remain turbulent with a net downward bias,” said Lakhani. “From a medium
term perspective, with prospects for financing opening up as banks start to offer mortgages, the outlook for the
real estate sector does remain bright.” But if the speculative buyers are not picking realty, developers hope the
non-resident Pakistani buyers would. “Overseas resident buying has increased significantly and has been less
susceptible to politics,” said Furqan Hussain of the publicly listed Quice Industries, which recently ventured into
property development. “A rupee devaluation is widely expected in the next few months, and for the domestic
buyer this has already been factored in.
“But the recent downturn should be seen in perspective — there is very little of debt based development activity
going on. And property buying through mortgages is still on the low side. The issue of repayments is not such a
major concern.”
A snapshot of Pakistan property market’s recent performance
Property values are down by 5-10 per cent in since peaking in about May-June. In some of the more speculation
prone areas, the declines have been wider.
But the flow of off-plan launches has not seen a tailing off. Market sources this pace will continue as demand far
outweighs supply. There has not been much of a reduction in launch prices either.
As with the property market, stocks too have been hit by the political climate. The Pakistan stock market peaked
in March and since then has corrected by 22 per cent, making it one of the worst performing emerging market
this year.
Source: Gulf News
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HONG KONG SKYSCRAPER SOLD FOR
RECORD $5.15 BILLION: REPORT Monday, October 16, 2017
A landmark skyscraper owned by Hong Kong’s richest man Li Ka-shing has sold for a record of more than $5
billion (Dh18.36 billion), according to a report Monday, indicating that the city’s booming property sector shows
no sign of slowing down.
Li’s CK Asset sold its 75 per cent stake in The Centre, which is located in the city’s bustling Central district, to a
consortium led by a Chinese energy firm, the Hong Kong Economic Journal said, citing unnamed sources.
The city’s fifth tallest skyscraper would become Hong Kong’s most expensive commercial building ever sold if the
HK$40.2 billion (Dh18.92 billion; $5.15 billion) deal goes through, the paper reported.
The sale would surpass a transaction earlier this year, where a prime commercial lot — occupied by a multi-storey
car park also in Central — was sold off for HK$23.28 billion by the government to Henderson Land, which is
owned by the city’s second richest man, Lee Shau-kee.
A spokeswoman from CK Asset said no immediate information was available.
Shares in CK Asset, Li’s flagship property company, rose 2.62 per cent to HK$66.50 in Hong Kong trade Monday.
The deal will soon be announced and the name of the building may be changed, the report added.
Hong Kong’s surging property market has become a political issue as costs in one of the world’s most expensive
metropolises continue to soar, forcing some small businesses to close owing to sky-high rents while many
residents cannot afford to buy or rent decent homes.
Commercial and residential property prices have been fuelled by an influx of money from wealthy mainland
Chinese investors and developers.
The 89-year-old Li announced a sweeping reorganisation of his businesses in early 2015, saying he wanted to
secure stability in future.
Source: Gulf News
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WHY PAKISTAN'S PROPERTY SECTOR IS
FLOURISHING Saturday, October 21, 2017
The Pakistan Property Show offers an opportunity to overseas Pakistanis to fulfill their dreams of owning a
property back home besides having investment options in one of the most high-return real estate markets in the
Asia-Pacific region. Sultan Butti bin Mejren, director-general of the Dubai Land Department, inaugurated the
show, which primarily targets the second-largest community in the UAE. Haider Ali Khan, CEO of Bayut.com;
Zeeshan Ali Khan, CEO of Zameen.com; and Imran Ali Khan, CEO of Emerging Markets Property Group (EPMG),
among others, were present on the occasion. The two-day event is likely to be a regular feature to provide an
exclusive showcase to the Pakistan real estate sector on the global stage and the first ever to be hosted at the
Dubai World Trade Centre. However, there is no option to book orders and sales at the event as this was
exclusively introduced at Cityscape Global in September.
"This is just the beginning of an exciting journey to take Pakistani real estate around the world," Zeeshan Ali Khan
said. The UAE is home to 1.5 million overseas Pakistanis who remit approximately $4.33 billion every year to
Pakistan and majority of this are invested in the property sector as it offers good returns. Exhibitors and visitors
at the show were upbeat about the future prospects of the industry and expect a win-win situation for all
stakeholders. "First and foremost, we are the flag-bearers of brand Pakistan that is peaceful, progressive and
representative of aspirations of overseas Pakistanis and investor-friendly. Pakistan is a model economy that is
gradually giving real estate its due position in deriving the economic development," Khan said. "The Pakistan
Property Show will bring about two fundamental changes. Firstly it will vastly improve the share of real estate in
remittances. Secondly it will help substantially grow foreign direct investment by attracting foreign investors and
developer groups to Pakistan," he added.
The Pakistani realty market has been witnessing a boom over the last decade due to the establishment of more
and bigger gated communities with standards to match overseas Pakistanis' experience of living abroad. Adding
the shortfall of 10 million housing units leaves no reason to keep market sentiment bullish. Simply put, the
demand far exceeds the supply.; business has only one direction to go - upwards. "The real estate industry
believes in our cause and has consistently stood beside us...aAs a culmination of our commitment to Pakistan, the
Pakistani real estate sector and the overseas Pakistanis, we have taken our expos global with the Pakistan
Property Show. Now the world is in audience to Pakistan's progress and promise for the future," Khan said.
Sharing details of the exhibitors, the entrepreneur said more than 50 exhibitors comprising leading developers
and real estate brokerages are participating in the show." They are showcasing a very wholesome bouquet of
properties from all across Pakistan - all the way from Peshawar, Islamabad, Lahore, Karachi and to Gwadar and
everything in between. Overseas Pakistanis with varying preferences and budget ranges will be able to find
something to their liking at the show," he said. "Foreign investors - both the go-slow and aim-big - will equally
have most secure and high yielding properties to choose from. Pakistan Property Show is a win-win for all."
Imran Ali Khan said EMPG's group companies across UAE, Pakistan and Bangladesh are helping the regional
multi-trillion-dollar real estate industry realise its full potential. "EMPG has successfully innovated a unique
regional framework for collective economic growth that we hope will guide regional markets in other parts of the
world."
Source: Khaleej Times
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DANUBE EYEING LARGER FOOTPRINT IN
PAKISTAN Wednesday, October 18, 2017
Real estate firm Danube Group aims to strengthen its presence in Pakistan by attracting more investments into its
property portfolio, and is also expanding its home furnishing brand into the South Asian country.
"Pakistan is strategically a very important market. We are searching for a right franchise partner there. Some
investors have shown interest, [so] we are evaluating the right partner. Post completion of the market research
and study, we are looking to open stores across major cities of Pakistan. Though the location is still not decided,
we will plan the location based on our research analysis," said Adel Sajan, director of Danube Group.
He pointed out that Danube Home stores usually span an area between 5,000 sqft to 10,000 sqft for boutique
concepts and 25,000 sqft to 45,000 sqft for the big box concept, with an investment ranging between $400,000
(Dh1.468 million) to $2.5 million (Dh9.175 million), depending on the size of the store, number of stores and
operating cost in the country. In order to tap Pakistani investors, the Dubai-based group recently appointed
cricket captain Sarfaraz Ahmed as its ambassador in Dubai.
Atif Rahman, director and partner at Danube Properties, told Khaleej Times in an interview that the group's
customer base from Pakistan is expanding fast, therefore, it's important with over 200 million population to focus
on the market and reach out to customers there.
"Right now, between seven to eight per cent of investors - and revenues - are from Pakistan. In terms of sale
value, we are talking about Dh200 million-plus investments by Pakistani nationals in to Danube's projects. We are
also seeing month-on-month increase in investments that motivated us to be associated with a brand
ambassador from that market and also start venturing into that market locally. Therefore, you will see a lot of
road shows and activities in Karachi and Lahore at the end of October and early November," Rahman revealed
during the interview.
Meanwhile, Pakistani nationals are one of the largest investors in Dubai's real estate sector. A recent statement by
Dubai Land Department said that Pakistani nationals made 5,398 real estate transactions worth nearly Dh7
billion. Pakistan's Federal Board of Revenue recently told parliament that its nationals had parked $8 billion
(Dh29.36 billion) in to the UAE's - mainly in Dubai - real estate sector.
Rahman said: "Without any doubt, our business from Pakistan is going to grow. There is a consistent demand for
construction material as well as properties. We have a very traditional, conventional and organic way of
expanding business. We go out on a small scale and grow it strength-by-strength. Right now, we have added two
cities of Karachi and Lahore; if the response continues to be good and numbers are increasing, we will continue to
invest. There is no upper limit - it's purely organic and based on the confidence in the market," he noted.
Source: Khaleej Times
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HOW DO FOREIGN BUYERS REACT TO A
STRONG US DOLLAR? Tuesday, October 17, 2017
As the strength of the US dollar fluctuates over the years, buyers of real estate assets have responded to the
move in different ways. Three major cities driven by foreign investment, New York, Singapore and Dubai reveal a
dichotomy over the last 10 years. New York real estate prices have had a low positive correlation to the
strengthening dollar, whereas Dubai and Singapore have a moderate inverse relationship. Dubai has been a city
driven by foreign money flows since the creation of freehold. Today, foreigners account for more than half of all
real estate transactions across the emirate.
As the greenback strengthens relative to other currencies, it's reasonable to imagine two things to transpire. First,
foreign buyers could begin to look for cheaper Dubai homes. And second, more price-conscious buyers seeking
more modest homes with may be left with fewer choices. Our research indicates that while both of those are
happening to some level, not all foreign buyers have reacted in the same way to fluctuating exchange rates.
Pakistanis and Indian nationals account for a large portion of the foreign buyers and have responded similarly to
a strong US dollar. The buyers from both nations seem to be sensitive to currency fluctuations. Contrary to the
market wisdom, where the devaluation of the home currency leads to lower activity, in both these cases there
have been the opposite response. Investors from the subcontinent look to hedge their investments from a
devaluating currency, consequently moving them to dollar-denominated assets. Over the last couple of years,
investments from Pakistan have decreased in the backdrop of a stable rupee along with an asset boom in the
local real estate and property market. However, recently the political instability coupled with the fears of a
devaluation on the horizon has sparked a flight of capital back to Dubai.
The International Monetary Fund has warned that the Pakistan rupee is overvalued by 15 to 20 per cent. British
buyers on the other hand also appear to be sensitive to currency exchanges, but in a more predictable way: as
the pound devalued in the wake of 'Brexit', capital inflows reversed from Dubai to London as buyers tried to
capitalise on the opportunities in London.
However, the recent recovery of the sterling and over-dramatisation of the repercussions of Brexit will eventually
cause a reversal of money flows into Dubai. A case where the dollar movement has had minimal impact on
buyers from a country is Saudi Arabia. They are largest buyers of Dubai real estate assets from the Arab
countries, with investment flows quadrupling over the last five years. Saudi investments have had a non-existent
correlation to the dollar index, and we opine that money flows from Saudi Arabia are poised to increase
significantly in the coming year.
Despite having a short-term impact on transactions, there is limited evidence linking long-term currency
movements to investment flows. Instead, what is seeming is that investment flows are determined by domestic as
well as international fundamentals; in Dubai, as monetary flows from neighbouring countries (Saudi Arabia)
attest, fundamentals against the backdrop of continued infrastructure spending appears robust. It is this that will
underpin an expected increase in monetary flows in the years ahead.
However in the short term, given the relationship between property prices and the dollar strength, we can expect
Dubai real estate prices to bounce back. Since 2016, the dollar index has corrected by 10 per cent, implying that
Dubai assets have become cheaper for foreign buyers. In the start of the year, we have already witnessed an
increase in transactional activity, especially in the off-plan space.
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In certain communities, this has been accompanied with a slight price rise as well. This is a trend that we expect to
continue. Important to take cognizance of is that this is no longer a "one-way" market; fluctuations in prices will
mimic a "random walk" before economic stimulus via construction projects kick in next year.
Source: Khaleej Times
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THE UNUSUAL PLACES IN LONDON TO BUY
A £1M PENTHOUSE Friday, October 20, 2017
London’s eight-year housing boom means £1 million (U$1.3m) apartments are now being offered in areas
historically associated with heavy industry and subsidised worker’s housing.
Telford Homes last week said it had sold three penthouse apartments in once-down-at-heel Stratford, the district
that hosted the London 2012 Olympic Games, for more than £1m. There’s plenty more for buyers to choose from
- more than 780 penthouses are on sale in London for more than that amount, according to listings on real estate
website Zoopla.
Tax hikes, high prices and economic uncertainty have stymied growth for homes in central London’s most
expensive neighbourhoods even as government support for first-time buyers boosts values in the city’s outer
districts. There are currently 13,600 London homes being offered for more than £1m on real estate website
Rightmove, more than double the 5,348 homes that sold above that level in the city in the first half of the year,
according to the Land Registry.
Here are six penthouses in London that are on the market for at least £1m in places you might not expect:
1) Stratford Central, Stratford: £1.38m
Just one three-bedroom penthouse remains on offer at Telford Homes’ 31-story Stratford Central project. Spread
over two floors, the home has a walk-in shower, an outdoor kitchen and access to a private gym.
2) Borough, Southwark: £1m
Apartments overlooking the River Thames regularly sell for millions of pounds. Now, the trend is spreading to
districts further south.
The owners of a two-bedroom, two-bathroom apartment on Sudrey Street, about five minutes walk from Borough
underground station, are seeking exactly £1m. The third-floor property measures 987 square feet.
3) Tottenham Road, Hackney: £1.25m
The London borough of Hackney, home to some of the city’s most deprived areas, is now beloved by hipsters,
creating tension with locals who accuse them of helping to push up home prices. This three-bedroom penthouse
occupies the top two floors of a converted Victorian school and is being offered for £1.25m.
4) Royal Arsenal Riverside, Woolwich: £1.3m
London home builder Berkeley Group Holdings is currently listing five penthouses on the waterfront in the
Woolwich district with prices starting at almost £1.3m for a two-bedroom, two-bathroom duplex that measures
1,014 sq ft. London City Airport is less than 15 minutes away by public transport.
5) Miramar Lodge, Hendon: £1.25m
This large three-bedroom penthouse is part of a gated community in London’s Hendon district, almost eight miles
north east of the city centre.
The 1,536 sq ft home has underfloor heating, access to a communal garden and is being offered by broker
Roundtree real estate.
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6) Royal Wharf, Silvertown: £1.05m
Developers Ballymore Properties and Oxley Holdings are currently building about 3,385 homes in London’s Royal
Docks, close to the ExCel London exhibition centre. Among them is a three-bedroom duplex on the 14th and 15th
floors of Latitude House that is being offered for £1.05m
Source: The National
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LONDON HOUSE PRICES CONTINUE TO
DECLINE Monday, October 16, 2017
London house prices are falling at their fastest pace since the aftermath of the financial crisis, confirming the
British capital as the worst-performing part of a slowing market.
Early data point to home values in London declining 2.7 per cent in September from a year earlier, the most since
2009, according to Acadata and LSL property Services. A 0.7 per cent fall in August marked the first negative
reading since 2011 as sellers in some of the city’s most expensive boroughs, including Westminster, Wandsworth
and Hammersmith, were forced to cut prices.
Outside of London and south-east England, the market appeared more buoyant, with prices on average rising in
September by more than 3 per cent on the year, though the pace of growth has been slowing since the end of
2016.
In London, values fell for a sixth consecutive month. If the provisional estimates are confirmed, the average price
of a home in the capital was less than £582,000 (Dh2.8 million), the lowest since the end of 2015.
The fall will be welcome news to people struggling to get onto the housing ladder after years of rocketing prices.
The prime minister Theresa May’s government announced an extension of its “Help to Buy” mortgage-assistance
program earlier this month.
The downbeat picture was confirmed in a separate report from Rightmove, which said asking prices in London fell
an annual 2.5 per cent in October. While they rose 3.1 per cent on the month, driven by owners of more
expensive properties, achieving these prices is far from assured as buyers now have more choice, according to
the Rightmove director Miles Shipside.
Source: Khaleej Times
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DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN
© Asteco Property Management, 2017 asteco.com | astecoreports.com
DEFINING LANDSCAPES SINCE 1985
Page 67
ASSET MANAGEMENT SALES LEASING
VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION
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, 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
Jenny Weidling BA (Hons)
Manager – Research and Advisory
+971 4 403 7789
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.