NEWS BRIEF 44 - Asteco Property Management...business and investment hub with the introduction of a...

DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN © Asteco Property Management, 2017 asteco.com | astecoreports.com

IN THE MIDDLE EAST FOR 30 YEARS

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 44 SUNDAY, 29 OCTOBER 2017

DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN | KSA

© Asteco Property Management | 2017 | asteco.com

IN THE MIDDLE EAST FOR 30 YEARS



REAL ESTATE NEWS

UAE / GCC

THE BANKRUPTCY LAW: INFLUENCE ON REAL ESTATE

GULF AND ARAB NATIONALS POWER DUBAI REALTY DRIVE

UAE CONTRACTORS CHASE LOWER COST IMPORTS AHEAD OF VAT

SAUDIS LAUNCH $500B RED SEA ECONOMIC ZONE

SAUDI FUND TARGETS $400B BY 2020

SAUDI ARABIA'S NEW CITY CHANGES FORTUNE FOR CEMENT FIRMS

REITS – NEW INVESTMENT STRATEGIES IN REAL ESTATE

WHY BUYING REAL ESTATE IN A DOWN MARKET IS A GOOD BET

DUBAI

HOW DUBAI'S PRIME PROPERTY PRICES COMPARE TO CITIES WORLDWIDE

FREEHOLD ACTION LIGHTS UP THE ZABEEL AREA

NAKHEEL NET PROFIT TOUCHES DH4B IN FIRST NINE MONTHS

BUSINESS BAY PERFECTS ITS PRICE POINTS FOR INVESTORS

PREMIUM, AFFORDABLE LOCATIONS IN DUBAI POST STEEPEST DECLINES IN RENT

DUBAI’S FREEHOLD AREAS FEEL THE BIGGEST RENTAL PINCH

SEEK AND YOU SHALL FIND LOWER RENT IN DUBAI

DECLINE IN DUBAI RENTS TO CONTINUE IN 2018?

BURJ KHALIFA AND ITS NEIGHBOURHOOD PULL IN DH6.2B

DEYAAR PROPERTIES TO FEATURE HUAWEI TECHNOLOGY

DUBAI DEVELOPER IS OUT TO TEST THE LIVE-WORK BALANCE

SHAIKH MOHAMMAD OPENS WORLD GREEN ECONOMY SUMMIT 2017

EMAAR DEVELOPMENT IPO TO BE SIMILAR IN SIZE TO $1.58BN EMAAR

MALLS FLOTATION

SHOULD INTERNATIONAL CITY INVESTOR SELL HIS TWO UNITS AT A

LOSS OR WAIT IT OUT?

NAKHEEL'S NINE-MONTH PROFIT RISES 2.5% ON GROWTH ACROSS BUSINESS LINES

DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN

© Asteco Property Management, 2017 asteco.com |

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DEFINING LANDSCAPES SINCE 1985



REAL ESTATE NEWS

EMAAR TO FLOAT JUST 20 PER CENT OF REAL ESTATE DEVELOPMENT SUBSIDIARY

WHY YOU SHOULD BET ON SERVICED APARTMENTS IN DUBAI

SOBHA RELEASES MORE HOMES IN MBR CITY

FOREIGNERS PUMP IN DH43 BILLION INTO DUBAI REALTY IN NINE MONTHS

OWNERS MUST HAVE A BIGGER SAY IN BUILDING MANAGEMENT

ABU DHABI

ABU DHABI’S CORNICHE APARTMENTS MORE AFFORDABLE

MID-MARKET IS WHERE ABU DHABI REALTY IS SEEING ACTION

MUBADALA WEIGHS FIRST SAUDI INVESTMENT AMID US PUSH

MANAZEL TURNS TO BUILDING SCHOOLS TO INCREASE REVENUE

WHERE ABU DHABI RENTS HAVE RISEN AND FALLEN, Q3 2017

ABU DHABI HOUSING AND HOTEL MARKETS DECLINE FURTHER

ABU DHABI LANDLORDS SWEETEN LEASES WITH CHEAPER RENTS,

INCENTIVES

NORTHERN EMIRATES

SHARJAH REAL ESTATE TRADE VALUE REACHED DH8.2BN IN THIRD QUARTER OF 2017

SHARJAH REAL ESTATE TRANSACTIONS UP 37%

INTERNATIONAL

OWN-TO-FLIP HOMES ARE HOT PROPERTY ONCE AGAIN IN US

DUBAI PROPERTY SHOW HEADS TO MUMBAI

LULU GROUP TO INVEST DH1.7B IN ANDHRA PRADESH

GREEN FINANCE: THE ROLE CAPITAL WILL PLAY IN TRANSFORMING

THE COUNTRY

HONG KONG PROPERTY MARKET TOO RISKY, SAYS SAVILLS

NEW CONTENDER IN LONDON'S £10M-PLUS HOMES MARKET



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THE BANKRUPTCY LAW: INFLUENCE ON

REAL ESTATE Wednesday, October 25, 2017

The UAE made a huge step late last year towards further raising the country’s attractiveness as a

business and investment hub with the introduction of a bankruptcy law. While the law is still in its

infancy, industry experts says the long-term effects of the regulation will be beneficial to various

industries, including real estate.

The Federal Law 9 of 2016, or the bankruptcy law, applies to all private sector companies in the UAE,

including those incorporated in free zones, except those companies incorporated in the Dubai

International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), which have their own

insolvency regimes, according to Joe Neilson, associate at Trowers & Hamlins.

While citing the law’s impact on the economy as a whole, Neilson says the new regulations will be

favourable to most businesses operating in the UAE, as well as banks and other financial institutions that

lend to those businesses. The modernity and flexibility of the regulations will encourage businesses to

operate in the UAE, offering them greater autonomy to manage their finances, he says.

“It introduces three new procedures available to businesses that are facing insolvency, known as

protective composition, insolvency with restructuring and insolvency and liquidation. These, along with a

new balance sheet insolvency test, will assist businesses by giving them more opportunities to identify

problems, recover and/or restructure when they find themselves in difficulty,” says Neilson.

As it is still in the early stages of the law’s implementation, Neilson believes its impact on the real estate

market is yet to be observed. “The law will encourage lenders to support the businesses and, ultimately,

lead to businesses being more successful in the UAE,” says Neilson. “Successful businesses expand and,

therefore, require more space and more staff to operate — be it office, warehouse, industrial. As a

knock-on effect of expansion, residential real estate will be required to house the extra staff. Hence, the

increased demand is going to impact upon the UAE real estate sector and the market as a whole

positively.”

Confidence boost

While the enhancements in the business environment as a result of the new bankruptcy regulation would

take time, the law already brings the UAE more in line with global business best practices, which creates

stronger confidence among small and medium enterprises (SMEs), government-owned companies and

individual traders, says Mario Volpi, chief sales officer of Kensington Exclusive Properties.

“It will offer creditors and debtors increased flexibility in dealing with financial distress, while ensuring

certainty and security for business owners,” says Volpi. “Owners will be able to rely, to some extent, on

protection for their businesses during re-structuring and effectively be able to negotiate with their

creditors.”

Commenting on its positive impact on the property sector, Volpi adds that the law will help banks

potentially lower their bad loan rate and improve their financial health, thus becoming more flexible in

deciding on future home loans.

The law might also influence the rental market since companies may consider leasing units directly on

behalf of their employees, he adds. This is because the new law stipulates that cheques issued by

commercial entities will not be considered as a criminal offence, if they bounce, Volpi explains.

“If more companies go in for direct leasing on behalf of their employees, this will affect the property

market,” he says. “They might be able to take on multiple leases, therefore, be able to negotiate better



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terms than individuals. Some serial landlords who may own buildings or multiple units might also prefer

to deal with one corporate entity rather than multiple tenants.

“From a commercial perspective, this law will help improve the efficiency of the bankruptcy proceedings

and improve the UAE’s [global ranking in terms of] ease of doing business, which the UAE wishes to top

by 2021. Hence, commercial real estate will also follow the same advantages as mentioned before with

residential units.”

Attract new businesses

“The bankruptcy law offers an enduring and promising platform for a remarkable improvement by

eliminating the criminal offence of bankruptcy by default,” says Manan Chadha, associate director of TRC

Pamco Auditing and Accounting ME. “The new provisions about the bouncing of cheques and the

requirements for a creditor-initiated insolvency proceedings will prove to be a game changer in instilling

a sense of confidence among the SMEs that serve as the backbone of the UAE economy.

“Although there is a lack of real-time evidence to signify and ascertain the improvement in the redressed

mechanism about the time taken to resolve insolvency, recovery rate and insolvency cost to debtors,

there will definitely be a major boost to the insolvency procedures, timelines, and redressed

mechanisms.”

Citing a recent World Bank report, Chadha adds that it costs up to 20 per cent of a debtor’s estate and

yields an average recovery of about 29 cents on the US dollar to resolve insolvency in the UAE. He

believes the local courts will play a pivotal role in implementing the new bankruptcy code and laying the

foundation by ensuring that the provisions of the system are interpreted correctly, especially as the law

has been seriously tested in court until now. “The main objective of this law is to generate an upfront

framework for bankruptcy proceedings to be held by the court, creating an alternate for liquidation,”

says Chadha. “Earlier, debt restructurings were considered expensively lengthy due to lack of formal in-

court arrangements and expertise. However, by establishing and maintaining a proper check on the

interpretation and implementation of the new law and proceedings, the courts can manage to provide a

strong base for such companies to have an opportunity to consensual debt restructuring before

liquidation proceedings. Both debtors and creditor can benefit from the same.”

Reduce speculation

“Stringent bankruptcy laws, which are now in place, should safeguard property owners against

bankruptcy and help reduce associated risks,” says Faisal Durrani, head of research at Cluttons. “These

laws enable transparency and are likely to boost demand in the office sector, encouraging landlords and

tenants to commit to space for a longer term. As these rules and regulations mature, we expect to see it

increasingly benefit business investments. “Companies will now know they are more accountable with

regards to bankruptcy since there is a legal setup that will identify and actively deal with this issue.

Therefore, they are likely to reduce the number of speculatively created new businesses and filter out

tenants who commit to long-term leases but do not manage high-scale overheads and, eventually,

default contracts.”

Real effect

However, pundits agree there remains a level of apprehension. “We are now 10 months after the law

was implemented and to date, we are not aware of any successful filings for bankruptcy,” says Adrian

Low, partner, banking and finance at Clyde & Co says. “The new law has not removed the perceived

social stigma of bankruptcy. “In other markets, such as the US, many claim that entrepreneurs learn

more from a business failure and how to do better next time than those who have never had a business

go bad. Until businesses are able to see, and show, that bankruptcy can help a good business come

through difficult times and ensure that creditors are given a fair payout in the case of a business failure,

then there is likely to be a reluctance to engage with the process.”

Source: Gulf News

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GULF AND ARAB NATIONALS POWER

DUBAI REALTY DRIVE Wednesday, October 25, 2017

Gulf and Arab investors have been powering the Dubai property market, together accounting for Dh40.5

billion in property and plot purchases in the first nine months. In fact, 7,841 Gulf nationals were

participants in 11,000 transactions during the period, parking a massive Dh29.5 billion in Dubai.

To that is added the Dh11 billion from 5,484 Arab buyers from 6,806 deals, according to the Dubai Land

Department. The split of real estate purchases involving other nationalities have not been provided.

There was also fairly high activity among foreign investors, with 17,616 investors making 22,667

transactions worth Dh43 billion plus. “We are extremely happy as the real estate market continues to

maintain its momentum, driven by a general optimism among Gulf, Arab and foreign investors,” said

Sultan Butti bin Mejren, Director-General of Land Department.

The Gulf and Arab investment numbers are remarkable given the backdrop of tensions over the Qatar

issue, which broke just before summer.

“The Dh84 billion worth of real investments made during this period is also a sign of sustainable growth

and the market’s ability to absorb the developer demand for residential, commercial, office and

industrial properties,” said Mejren.

Meanwhile, when it comes to gender, women were also actively involved in the market over this period,

with more than 9,000 entering the market and making a total of 11,000 transactions worth over Dh21

billion.

Source: Gulf News

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UAE CONTRACTORS CHASE LOWER

COST IMPORTS AHEAD OF VAT Wednesday, October 25, 2017

UAE contractors are placing bulk orders with overseas suppliers of building commodities, especially

those from China, to better manage their costs ahead of the VAT (value-added tax) roll-out. Even if that

means placing fewer orders with local manufacturers of steel bars and other key requirements, industry

sources say.

On products such as steel and value-added products, contractors say they are able to get cost

advantages from imports and despite having to pay the 5 per cent import duty. The fact that dollar’s

been strengthening of late has also reduced the import cost factor for local contractors.

The benefits from relying more on imports vary on a product by product basis. “There is greater

variability when it comes to materials such as tiles and sanitary ware, where the differential between

import and local sourcing can be as much as 25 per cent,” said Alireza Alladin, Director at the project

consultancy Unitas. “For steel and cement, the differential is much smaller.

“But in an environment of reduced margins, every saving helps.”

There is a rationale behind the contractors’ search for the lowest cost points. With the launch date

towards VAT ticking, project promoters have made it clear that any sudden cost escalation on building

material prices after VAT will have to borne by the contractors. So, where possible, contractors are

placing the orders now, and also getting the supplies on to their warehouses or project sites.

“On products such as steel, there has been a steady cost escalation in the last 12 months,” said Vinod

Pillai, General Manager at RP Group, which has interests in real estate development and construction.

“Currently, steel rebar prices are at Dh2,000-Dh2,300 a tonne, which is a fair bit higher than they have

been in the past. The disruption in supplies from steel mills in Qatar has been one reason.

“But across the board, there has been a pick up in project activity in the UAE, and not just the mega

constructions. It’s an across the board gains we are seeing.”

That local contractors are placing sizeable orders for imports will not have gone unnoticed by local/Gulf

steel bar and pipe manufacturers. In recent years, they had committed major investments on additional

capacities.

And they have been vocal about cubing import where possible through raising import duties. They have

been petitioning the UAE Government regularly to raise the duty ceiling, through mechanisms such as

the “safeguard duty” on top of the import duty. For their part, local authorities have instructed the

construction industry to use locally made goods in government-sponsored projects.

But where such restrictions are not in place, contractors and project consultants are keen to place

orders with the lowest-cost supplier.

“Imports have always been an integral part of the cost management process for contractors,” said

Mohammad Mustafa, who heads the design and consultancy firm Emsquare. “This has become even

more so as contractors strive to maintain margins in an environment of industry turbulence.

“Payment terms under boom days were between 30-60 days; they have in some cases extended to

beyond 180 days, making it unsustainable for many of the smaller players. “Thankfully, construction

costs have remained broadly stable over the last two years. But this is expected to change and in fact

changing already. Steel prices are moving higher internationally. What remains to be seen is whether

this is something that will now spread across the board on commodity prices.”



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Buying bulk right now is the solution for contractors

The next two months could see contractors pulling out all stops to ensure they get in more than enough

supplies of key building materials. Those orders need to be delivered and stocked before the VAT launch

date to be free from having to pay.

There has been a sharp scaling up in new project activity in recent weeks, and contractors are fairly

certain how their order books will look. That means there is little risk of them being caught with excess

stock from importing all of their short-term needs now rather than later.

Plus, as things stand now, building material prices are inching up, and with few signs of any sudden

volatility pulling prices down.

As for VAT, apart from the initial teething issues, the construction industry believes it can assimilate the

costs easily enough. “There has been some evidence of “bulk buying”,’ said Mohammad Mustafa of

Emsquare. “For the most part, this has been at the margins because a) we are in a tight liquidity market

and b) the bulk of the forward purchases can be done by the bigger players, which will likely enter the

fray towards November/December.

“The heightened purchase activity is a function of capital as much as it is a function of arbitrage. The

larger players have increased purchases, and yes there has been an increase in tenders awarded. This is

essentially an arbitrage play.

“This kind of short term arbitrage activity was also witnessed in the days and weeks before Dubai Land

Department announced an increase in transaction charges from 2-4 per cent.

“Certain players move in to take advantage of the situation, but smoothens itself out in the weeks after

the new levy takes place.”

Source: Gulf News

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SAUDIS LAUNCH $500B RED SEA

ECONOMIC ZONE Tuesday, October 24, 2017

Saudi Crown Prince Mohammad Bin Salman announced plans to build a new city on the Red Sea coast,

promising a lifestyle not available in today’s Saudi Arabia as he seeks to remake the kingdom in a time

of dwindling resources.

The prince said the city project, to be called “NEOM,” will operate independently from the “existing

governmental framework” with investors and businesses consulted at every step during development.

The project will be backed by more than $500 billion from the Saudi government, the country’s

sovereign wealth fund and local and international investors, according to a statement released on

Tuesday at an international business conference in Riyadh.

The ambitious plan includes a bridge spanning the Red Sea, connecting the proposed city to Egypt and

the rest of Africa. Some 10,000 square miles (25,900 square kilometers) have been allocated for the

development of the urban area that will stretch into Jordan and Egypt, creating “the world’s first

independent special zone stretching over three countries.”

A bridge connecting Saudi Arabia with Egypt was announced during a visit to Cairo last year by King

Salman. “NEOM is situated on one of the world’s most prominent economic arteries, through which

nearly a tenth of the world’s trade flows,” Prince Mohammad said. “Its strategic location will also

facilitate the zone’s rapid emergence as a global hub.”

Prince Mohammad is spearheading efforts to prepare Saudi Arabia for the post-oil era. In the course of

his meteoric rise to power since 2015, he’s revealed plans to sell a stake in oil giant Saudi Aramco and

create the world’s largest sovereign wealth fund, and has ended some social constraints, including a

long-standing ban on female drivers.

“NEOM will be constructed from the ground-up, on greenfield sites, allowing it a unique opportunity to

be distinguished from all other places that have been developed and constructed over hundreds of

years,” Prince Mohammad said in the statement.

The plan will likely be met with the same mixture of optimism and doubt that has greeted his previous

headline-grabbing announcements. His supporters can be expected to cheer what they see as a bold

drive to transform the kingdom, while others will point to past failed attempts to overhaul the Saudi

economy that also included industrial cities in the desert.

Klaus Kleinfeld, the former chairman and chief executive officer of Siemens AG and Alcoa Inc., was

appointed to lead the development of NEOM. The project “seems to be broadly modeled on the ‘free

zone’ concept pioneered in Dubai, where such zones are not only exempt from tariffs but also have their

own regulations and laws, hence operating separately from the rest of government,” said Steffen

Hertog, a professor at the London School of Economics and longtime Saudi-watcher.

The city will focus on nine industries: energy and water, mobility, biotech, food, technological and digital

sciences, advanced manufacturing, media and entertainment, according to the statement. “The focus on

these sectors will stimulate economic growth and diversification.”

SoftBank to work with Saudi Arabia on new city

SoftBank Group Corp will work with Saudi Arabia on the development of “Neom”, a new business and

industrial city announced on Tuesday. Softbank Group CEO Masayoshi Son said at an investment

conference in Riyadh on Tuesday that Saudi Arabia’s Crown Prince Mohammad Bin Salman had asked



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him to get involved. “I think Neom is a fantastic opportunity,” Son said, adding that the SoftBank Vision

Fund would invest in Saudi Electricity Co (SEC).

NEOM at a glance

The project called ‘NEOM’ will operate independently from the “existing governmental framework”.

The plan includes a bridge spanning the Red Sea, connecting the zone to Egypt and the rest of Africa.

Some 25,900sqkm urban area will stretch into Jordan and Egypt, creating “the world’s first independent

special zone extending over three countries.”

The project will focus on nine industries: energy and water, mobility, biotech, food, technological and

digital sciences, advanced manufacturing, media and entertainment.

Source: Gulf News

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SAUDI FUND TARGETS $400B BY 2020 Wednesday, October 25, 2017

Saudi Arabia’s main sovereign wealth fund wants to increase its financial clout to 1.5 trillion riyals

(Dh1.5 trillion, $400 billion) by 2020 as part of the kingdom’s efforts to boost private-sector growth and

wean itself off oil export dependence.

The assets-under-management goal, laid out by the Public Investment Fund (PIF) on Wednesday, came

on the second day of an international conference in Riyadh. It was accompanied by publication of PIF’s

first comprehensive business programme, outlining targets for investments and returns for 2018-2020.

PIF, which is expected to receive proceeds from the planned sale of 5 percent of state oil company Saudi

Aramco’s shares, has currently around $230 billion worth of assets under management.

It plans to create 20,000 direct domestic jobs, and 256,000 construction jobs by 2020. This will increase

PIF’s contribution to Saudi Arabia’s gross domestic product from 4.4 percent to 6.3 percent, it said in a

statement on Wednesday.

Investments will be in sectors such as real estate and infrastructure as well as in new areas of activity in

the Saudi economy through the establishment of companies such as the Saudi Arabian Military

Industries company and the Saudi Real Estate Refinancing Company.

One of the biggest tasks facings PIF will be the delivery of a $500 billion plan to build a business and

industrial zone extending into Jordan and Egypt, announced at the start of the conference on Tuesday.

PIF also set a new target to increase total shareholder return to 4-5 percent between now and 2020

from 3 percent, it said on Wednesday.

“The PIF Program represents a vital milestone as we work towards realising Vision 2030,” Crown Prince

Mohammad bin Salman Al-Saud, the economic reform plan’s architect, said in a statement.

‘Long-term’ average annual return

The 96-page programme said PIF will structure its investments in six areas: Saudi equity holdings,

sector development, real estate and infrastructure, mega projects, international strategic investments

and a “diversified pool” across global asset classes. It said “long-term” average annual return from these

areas would be between 6.5 to 9 percent. Outside of Saudi Arabia, PIF’s investments will be in a number

of assets such as fixed-income, public equity, private equity and debt, real estate, infrastructure and

alternative investments such as hedge funds, the fund said. PIF Managing Director Yasir Al Rumayyan

said the fund was open to investing in more big ticket items such as US ride services company Uber. It

also outlined its four major sources of funding to include capital injections from the government,

government asset transfers, loans and debt instruments as well as retained earnings from investments.

Blackstone plans to double assets to $800b in five years

Blackstone Group LP could double its assets under management to $800 billion (Dh2.9 trillion) in five

years, according to Chief Executive Officer Steve Schwarzman. “We have internal targets, plans,

aspirations to basically double where we are which would take us to $800 billion,” Schwarzman said in

Bloomberg TV interview in Riyadh on Wednesday. When asked whether the New York-based asset

manager could be a trillion dollar fund, he said: “That’s possible.”

Schwarzman, 70, said last week that he expects Blackstone’s assets to continue rising in the fourth

quarter. The firm is raising money for its new infrastructure fund, and it’s making a foray into early-

stage growth investing, President Tony James said.

Source: Gulf News

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SAUDI ARABIA'S NEW CITY CHANGES

FORTUNE FOR CEMENT FIRMS Friday, October 27, 2017

Saudi Arabia’s plan to build an entirely new $500 billion city by the Red Sea has breathed life into the

country’s beaten down cement sector.

Shares of companies such as Saudi Cement, Southern Province Cement and Yanbu Cement, the

country’s biggest by market value, have all risen since the kingdom announced the plan earlier this

week. The gains follow sharp declines for most of the year as investors recognize the potential for a

change of fortune.

The announcement “is surely a long-term positive for the cement sector -- a sector which has been

reeling under immense pressure of overcapacity, inventory pile up, cost increases and a plummeting

cement price, over the past two years,” said Ankit Gupta, vice president for research at Shuaa

Investment Management in Dubai.

Three days of rising share prices bear testimony to the project’s significance. After falling 20 per cent

this year through Octobert 23, Tabuk Cement has climbed 28 percent in the past three trading sessions,

more than erasing its decline for the year. Saudi Cement Co., Southern Province Cement and Yanbu

Cement have all advanced at least four times more than the country’s main stock gauge.

Companies such as Tabuk and Al Jouf Cement that are located in the north of the country, near to where

the new city will be based, stand to benefit most given that logistics are a major cost element for

cement companies, Mr Gupta said.

Still, the stocks may not be entirely out of the woods yet, according to Mr Gupta.

“It’s a bit premature to be overly optimistic about the prospects of the entire Saudi cement sector, with

the sector still having over ten months of inventories and limited short-term demand catalysts,” he said.

Source: The National

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REITS – NEW INVESTMENT

STRATEGIES IN REAL ESTATE Monday, October 23, 2017

As I continue to meet various stakeholders, especially regional investors, it is coming to my attention

that they are increasingly seeking to better understand what to expect from Real Estate Investment

Trusts (Reits).

“Will Reits continue to gain widespread acceptance in the region?”, “Will they soon be able to provide a

steady income and yield higher revenue?” These are some of the questions I have recently heard and I

will attempt to respond to these here based on my own views and market perception.

Undoubtedly, investors in this region, and the UAE in particular, are beginning to realise the benefits of

making Reits an integral part of their portfolio. Of course, we are starting from a low base in comparison

with more mature markets, but across the GCC it is clear that there is growing acceptance and

understanding of Reits.

If we consider the number of publicly listed Reits currently available in the market as a barometer, we

have seen strong appetite for an investment vehicle that can easily be described as a "real estate

mutual fund". The growth is reflective of the broader shift in the attitudes of investors in a market that,

until recently, had a limited number of structured real-estate products.

Despite being nascent, Reits’ adaptability has resulted in developing a number of genuinely impressive

fund portfolios tailored specifically to the needs of local investors. This is evident in the new mix of

assets that the funds have added to their portfolios.

Regional Reits, which traditionally relied heavily on office and residential projects, are now expanding to

include alternative sectors, such as education and health care. Put simply, investors in the UAE and the

wider region can now choose from a variety of products.

Of particular significance is the recent move by ENBD Reit to buy a new school that is currently being

built in Dubai's Remraam community for Dh55 million. In a related deal, the fund has also acquired a

student accommodation facility in Dubailand in May 2017 for Dh120m.

In addition, the UAE’s first ever Reit, Emirates Reit, has also completed three school deals over the past

few years. The most recent one was the sale and leaseback agreement with the British Columbia

Canadian School in Dubai Investments Park.

The education sector has certainly been a source of positive news for Reits, predicated on the

burgeoning demand of schools in the region. According to a recently published industry report, 1,000

new schools are expected to be built in Dubai, Abu Dhabi, Riyadh, Jeddah and Cairo in the next five

years, with 350 of them expected to be supplied by the private sector.

Comparatively untapped, however, is health care, which involves high capital investments, whether it be

for obtaining property to construct hospitals or procuring advanced medical equipment. With the UAE

healthcare market predicted to grow by 60 per cent by 2021, and in line with the UAE Vision 2021

National Agenda to establish a world-class healthcare system, the sector is a lucrative prospect for Reits

seeking high-impact returns and reliable growth.

A further catalyst for Reits expansion and diversification in alternative sectors is the fund managers’

ability to identify high-impact assets whose appeal remains unaffected by market cycles, while

simultaneously allowing investors exposure without owning the underlying asset. This presents an

unrivalled opportunity for funds to focus solely on alternate asset classes. A case in point is Five



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Holdings, which recently announced that it would launch an Dh2.1 billion hospitality-focused Reit, the

first and biggest such in the region.

Looking ahead, there are some things we can now foresee with more certainty as the real estate sector

in the UAE and the wider region continues to gain maturity. With Reits gaining wider acceptability and

investors becoming increasingly sophisticated and seeking risk-free returns, the one thing that we can

say at this stage is this: Reits in the region will continue to chart a new direction for the future,

underpinned by local advantages, strategic location and upcoming events, including Dubai Expo 2020.


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WHY BUYING REAL ESTATE IN A DOWN

MARKET IS A GOOD BET Tuesday, October 24, 2017

The best thing about real estate is its cyclical nature and its ups and downs. Imagine if real estate was a

stagnant commodity, there would be no price gains and no profits. If you look at the price trends of any

real estate market for the past few years or for that matter past several years, you'll see the price graph

going up and down.

For a seasoned investor, the right time to strike is a down market. Investing when everyone else is

selling can be rewarding provided you have enough patience to support your decision of investing.

Buyers have an edge in a down market as when sales transactions are slow, the market is full of

properties for sale at a lower price. With enough options to confuse you before making a decision, it is

important to have foresight and know which area and type of property will bring profits in the long run.

Research

No matter what the market situation is, it's important to know which areas will produce the best long-

term returns. Especially in a down market, choose the most promising area with good rental yields and

expected to offer high capital appreciation.

Tools

There are a number of free reports and analysis available from eminent professionals. These tools

provide an insight of the price trends and predictive future indicators. They can come handy in

determining the type of property and area with high growth potential.

Negotiate

Don't be afraid to negotiate in a down market. As an investor, you're not in a hurry to buy, so wait for

the right opportunity and pick a property at the best price possible. Shortlist a few properties, make

realistic offers and strike the perfect deal.

Patience pays off

Patience is the key to profits when it comes to real estate investments. Whether it's buying the right

property or selling, you need to wait for the right time. The return for your investment will depend on a

variety of factors. The overall success of the investment will depend on not only where and when you

buy, but also how long you can hold onto your property. It may appreciate more or less than your

expectations and the longer you hold generally, the better growth you will achieve. Keep a long-term

outlook for selling your property and remember you never lose till you stay invested. The objective is to

make as much profit as you can and it starts from buying the right property in the right area at the right

point of the market cycle.

Adaptability

The real estate market changes from time to time and staying abreast of trends is paramount for

investors. Know where the market is going and make strategic changes to your investment plans. Take

professional help from real estate investment advisors. They have the experience and knowledge to

suggest changes that can bring maximum profits.

In order to be successful in real estate investing, it's important to know how to make money in any

market situation. There are strategies that work in a struggling market and others for a boom time. It's

a matter of understanding the market and using the right strategy.



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There are many real estate investing opportunities in Dubai today. Do your research and invest

intelligently. In a down market, you will likely be able to purchase more property with less money and

generate more rent per dirham invested than in a booming market. In all market situations, there is

profit out there and staying out of the game is not an option. Any investor with keen understanding of

the real estate market will surely win.

Source: Khaleej Times

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HOW DUBAI'S PRIME PROPERTY PRICES

COMPARE TO CITIES WORLDWIDE Thursday, October 26, 2017

The city of Dubai is rightly famous for the glitz and glamour of its architecture. There’s an abundant

supply of majestic properties with sprawling gardens or swanky apartments overlooking its yacht-lined

marinas. But despite all that opulence, the emirate remains one of the least costly places to own a

home.

The average cost of Dubai’s prime real estate is one of the lowest in the world, ranking in the 34th place

on the latest global ranking of property hotspots by New World Wealth released Wednesday.

In Dubai, a prime apartment costs approximately $8,400 per square metre as of the third quarter this

year.

That’s slightly higher than the $8,200 average price last year, but still a far cry from Monaco’s average

price of $48,000 per square metre.

The tiny city-state, known for yachts, fast cars, casinos and wealthy residents, has been ranked the

most expensive city for prime property out of the 54 destinations included in the study by the market

research firm.

Monaco is followed by New York, which has just overtaken London this year.

Dubai is trailing behind a number of cities in Europe that dominate the list, including Saint-Tropez, Paris

and Nice in France and Rome, Florence and Milan in Italy.

Other American destinations, such as The Hamptons, Los Angeles, Miami and San Francisco, as well as a

few other Asian hotspots like Hong Kong and Beijing, are also far more expensive than Dubai.

“Notably, prices in New York, Sydney, Beijing and Shanghai all rose strongly over the past 12 months,

while prices in London, Parish and Rome are all down,” said the New World Wealth.

Andrew Amoils, head of research at New World Wealth, noted that prices in Dubai's prime real estate

are still rising, aided by the continued influx of wealthy individuals into the city.

"Most of the wealthy people moving to Dubai are coming from Africa and the Middle East. I would

imagine Dubai should break into the top 30 worldwide within the next ten to 20 years. It is certainly an

up-and-coming hyotspot," he told Gulf News.

Within the Arab world, Dubai tops the list, with Abu Dhabi following closely behind in the 35th position.

The other two Gulf cities included in the study, Doha and Riyadh occupy the 38th and 40th place,

respectively.

New World Wealth analyses the top prime property hotspots worldwide as part of its “Global Wealth

Migration Review.” The latest data reflect the prices of prime property as of September 2017. The report

also benchmarks the top Middle Eastern cities against the worldwide list.

Source: Gulf News

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FREEHOLD ACTION LIGHTS UP THE

ZABEEL AREA Wednesday, October 25, 2017

The high-profile Zabeel area in Dubai is seeing freehold action — Phase 1 of wasl1 is now on sale. This

phase will feature four luxury towers set on a shared podium, and featuring 746 apartments. Eventually,

the wasl1 will be a nine residential high-rise cluster.

The project — which will include integrated spaces and a building designed to resemble the No. 1 — will

also include a hotel, four mixed-use towers, and a central plaza. The developer — wasl Asset

Management Group — is having a new promotion for the second tower.

It targets individual buyers who have already bought property in the first tower at Park Gate Residences.

It does not apply to institutional investors and real estate agents.

The campaign encourages customers who have booked their units in the first tower to nominate

relatives and acquaintances to make purchases at the second. For each successful nomination the

original customer will receive a certain percentage of the unit value they purchased as well as an iPad.

Wasl will allow each customer to nominate three persons, meaning that they can receive the redemption

rate for three purchases.

The foundation works are underway for Park Gate Residences after completion of drilling and enabling

works. Completion of construction of Park Gate Residences is expected in mid-2020. According to

Hesham Al Qassim, CEO, “We applied our extensive experience in Dubai’s real estate market and our

knowledge of the needs and expectations of our customers to develop a truly exceptional project.”

Source: Gulf News

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NAKHEEL NET PROFIT TOUCHES DH4B

IN FIRST NINE MONTHS Wednesday, October 25, 2017

Nakheel recorded a 2.5 per cent year-on-year increase in net profits to Dh4 billion for the first nine

months of 2017. During the period, the master-developer has maintained the pace of residential

handovers, at nearly 1,200 units.

Also, it has been expending its community development footprint across some of Dubai’s emerging

locations, such as Nad Al Sheba and Jebel Ali. At Cityscape last month, Nakheel confirmed that it will

soon get back into the offplan mode, with two signature tower project launches deemed imminent. Both

are on the Palm.

“The growth in our net profit signals stability and maturity in Dubai’s real estate market, and reflects our

ongoing strategy to diversify our business in order to build a long-term, sustainable business and

achieve our financial objectives,” said Ali Rashid Lootah, Chairman. The revenue numbers have not been

announced.

So far this year, Nakheel has awarded contracts worth over Dh7 billion, including a Dh4.2 billion one for

Deira Mall (on Deira Islands) and another for Dh1.5 billion for The Palm Gateway, “with more due by the

end of the year”, it said in a statement.

On the completion side, there are the Warsan Village and Jumeirah Islands’ townhouse communities and

the 401 homes at Al Furjan. There was also the groundbreaking for hotels at Ibn Battuta Mall and

Dragon Mart.

There has been “significant progress on joint ventures with Centara Hotels & Resorts and RIU Hotels &

Resorts”.

Currently, it has more than 23,200 residential units under construction, while the current and future

retail portfolio comprises 17 million square feet of leasable space, including 13 million square feet under

development. It’s hospitality collection has 17 hotels and serviced apartment complexes, two of which

are open, with 6,000 rooms between them.

Source: Gulf News

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BUSINESS BAY PERFECTS ITS PRICE

POINTS FOR INVESTORS Wednesday, October 25, 2017

Launched in 2003, Business Bay is a central business district situated on an extension of Dubai Creek.

Since the master-developer Dubai Properties began selling plots in Business Bay to private developers in

2005, this community has emerged as one of the core business districts.

With close links to public transport and proximity to Downtown Dubai, it makes the area a desirable

location to those working anywhere in the emirate. According to the Property Monitor Communities

Index, the average sales price for a studio is Dh934,000, with one-bedrooms setting you back Dh1.38

million. Two-bedroom apartments are selling at an average of Dh1,547 a square foot compared to

similar communities such as Downtown Dubai where such units are selling at an average of Dh2,549 and

with direct views of Burj Khalifa.

Current gross investment yield for Business Bay is 5.84 per cent. With significant new supply entering

the market over the next few years, there is expected to be pressure on prices, thus limiting the capital

appreciation potential in the area for the short-term.

According to the Property Monitor Supply Tracker, in 2018, over 2,000 apartments and about 1,000

hotel rooms are expected to be added to the Business Bay community. Some of the major projects to be

completed next year include Damac Towers by Paramount, Majestine Alure with serviced hotel

apartments, Marquise Square Tower, The Pad by Omniyat and Moon Tower by Arabia.

As an extension of Business Bay, Dubai Properties has launched Marasi Business Bay and will stretch

Dubai Canal until Shaikh Zayed Road. With a 12-kilometre marina promenade, the district will consist of

floating homes, shops and restaurants.

Current occupancy rates vary by building with better maintained buildings operating at 85 per cent plus

occupancy levels. However, with the new upcoming supply these rates could also come under pressure.

Looking at the rental situation, Business Bay proves to be a more affordable option compared to Dubai

Marina. Property Monitor rental database shows that a one-bedroom in Dubai Marina will set you back

Dh95,000 a year whereas a one-bed in Business Bay stands at Dh85,000.

In a prevalent trend in the market this year, the number of cheques in Business Bay has also increased

compared to when it would typically be a one-cheque system. Two- and three-cheques make up 60 per

cent of rental contracts with four cheques covering 23 per cent of rental contracts.

One-cheque rental agreements only make up 7 per cent of overall agreements in Business Bay.

Source: Gulf News

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PREMIUM, AFFORDABLE LOCATIONS IN

DUBAI POST STEEPEST DECLINES IN

RENT Wednesday, October 25, 2017

Some premium and affordable residential neighbourhoods in Dubai are losing the most rental values –

on a percentage basis – according to the latest data compiled by a real estate consultancy firm.

Rents in Dubai Marina, where one-bedroom flats can cost up to Dh95,000 a year, are showing the

steepest fall, with overall leasing rates registering a 19 per cent drop in September 2017 over the

previous year, figures released by Asteco showed.

Dubai marina

The cost of renting a flat in Dubai has been on a downward path and as of the third quarter of the year,

rates fell by 12 per cent on average when compared with a year earlier. The downside has been due to

demand failing to keep up with a huge supply of properties.

In Downtown Burj Khalifa, where new high-rise towers are popping up like mushrooms, landlords are

likely more open to lower their rates compared to many other locations. Overall rents in the area posted

a negative 18 per cent drop, the second-highest among the communities included in the study.

In the affordable category, the two locations with the steepest fall in rents are Dubai Sports City and Bur

Dubai, each registering rental dips of -16 per cent.

Dubai Sports City

However, the cost of renting a one-bedroom flat in Dubai Sports City averages Dh59,000 a year, making

it a cheaper option compared to Bur Dubai, where a one-bed apartment can set a tenant back between

Dh45,000 and Dh80,000 annually.

Residential units in Jumeirah Village and Deira are also registering major price reductions at -15 per

cent, while in Business Bay and Greens, costs have fallen by -14 per cent. The number of new flats

delivered between January and September this year, amounting to 10,200 units, has already surpassed

last year’s total supply of 8,750 flats, and some 3,500 more units are coming in before year-end.

Tenants who are on the hunt for a new flat today may not just have an upper hand in negotiating with

the landlords, they’re more likely to see a lot of empty units to choose from.

According to Jesse Downs, managing director of Phidar Advisory, vacancies are high in established

communities, with an overwhelming 35 per cent to 40 per cent of homes lying empty.

“Even in the most popular areas, vacancies are typically around 25 per cent,” Downs said.

Where rents have fallen most:

Dubai Marina

Highest rent: Dh95,000

Lowest rent: Dh55,000

Average rent: Dh75,000

% Change: -19%



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Downtown Dubai

Highest: 120,000

Lowest: 75,000

Average: 97,500

% Change: -18%

Dubai Sports City

Highest: 70,000

Lowest: 48,000

|Average: 59,000

% Change: - 16%

Bur Dubai

Highest: 80,000

Lowest: 45,000

Average: 62,500

% Change: -16%

Jumeirah Village

Highest: 68,000

Lowest: 48,000

Average: 58,000

% Change*: -15%

Deira

Highest: 75,000

Lowest: 35,000

Average: 55,000

% Change: -15%

Business Bay

Highest: 90,000

Lowest: 60,000

Average: 75,000

% Change: -14%

Greens

Highest: 95,000

Lowest: 65,000

Average: 80,000

% Change: -14%

Rental declines in other communities:



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Palm Jumeirah:

Highest: 150,000

Lowest: 80,000

Average: 115,000

% Change: -13%

Jumeirah Lakes Towers

Highest: 85,000

Lowest: 55,000

Average: 70,000

% Change: -13%

International City

Highest: 52,000

Lowest: 35,000

Average: 43,500

% Change: -13%

Jumeirah Beach Residence

Highest: 120,000

Lowest: 80,000

Average: 100,000

% Change:-12%

Al Barsha

Highest: 75,000

Lowest: 55,000

Average: 65,000

% Change: -12%

Shaikh Zayed Road

Highest: 125,000

Lowest: 70,000

Average: 97,500

% Change: -9%

DIFC

Highest: 130,000

Lowest: 80,000

Average: 105,000

% Change: -8%



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Discovery Gardens

Highest: 65,000

Lowest: 50,000

Average: 57,500

% Change: -2%

*% Change is for period September 2016- September 2017

Note: Rental figures are for one-bedroom flats only

Source: Asteco

Source: Gulf News

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DUBAI’S FREEHOLD AREAS FEEL THE

BIGGEST RENTAL PINCH Tuesday, October 24, 2017

Check out areas in Dubai that are seeing significant new supply of homes between now and the next two

years. Your lower rent options are more likely to be found there.

But going forward some of the pressure on rents would start being felt by locations outside of these

neighbourhoods. “No area or property type is immune to this trend,” said Lynette Abad, Head of

Property Monitor at the consultancy Cavendish Maxwell.

“Areas with more supply are obviously impacted higher — but other established, mid-market locations

are also affected as consumers are shifting and opening their options to areas they never considered

before. With new supply coming into the suburban communities, we are seeing tenants shift from

established communities to like-for-like product in suburban communities at a cheaper rent.

“In addition, the majority of the suburban areas now have facilities, connecting roads and amenities

sought after by the general public, including malls and recreational facilities.”

So, where exactly should budget-conscious tenants be headed? Apartment rents are lower in Jumeirah

Village Circle (JVC) compared to those in Business Bay or JLT. According to Property Monitor’s supply

tracker, more than 3,000 units are scheduled to be completed in JVC by year-end.

“Of course, the “materialisation rate” of what will actually be completed will be much lower,” said Abad.

“With more supply coming, rental rates and terms will only get more competitive and favourable for the

tenant. Also, we are even seeing high quality apartments like the Belgravia in JVC available at a lower

rent than a Business Bay apartment.”

Jumeirah Village Circle is one option, and so is Dubai Sports City. Between these two locations, the

current capacity is 19,000 homes. (It’s anybody’s guess as to how many of these are rented out and

how many occupied by end users.)

“JVC, Dubai Sport City and International City have all seen rents weaken with JVC weakening the most,”

said David Godchaux, CEO of Core Savills. “(Interestingly) sales prices in this area have had a relative

increase.

“New stock is increasing competition by increasing the options available to tenants. But a lot of the new

stock being launched will only become available in several years. We certainly expect the supply coming

at the lower end of the price spectrum to exert negative pressure on rents by 2020, if demographic

growth is not sufficient to aid absorption.”

Outside of these three areas, recently completed clusters in Dubailand have absorbed rental demand

from neighbouring areas and playing their part in contributing to the broader decline in rentals. The

“Mira” community in Reem, for instance, absorbed some of the rental demand from Springs and Arabian

Ranches, according to Godchaux.

|As Mira is an Emaar product launched at a relatively lower entry point, tenants do not mind

compromising on location for rents. Other Dubailand clusters such as Remraam have also absorbed

some demand from Dubai Sports City, Jumeirah Village and Dubai Silicon Oasis.”

And down the road — metaphorically speaking — Dubai South looms to set its own pressure points on

what the rest of the city can charge as rents.

Dubai’s high-end neighbourhoods have felt the rental pinch the most



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According to Core Savills data, Dubai’s original freehold destinations have had quite a bit of rental dip.

The Greens cluster has seen declines of up to 12 per cent since January 2016, while for the Palm, it was

11 per cent. The DIFC residential towers have dropped 9 per cent, according to Core, while those in the

Downtown and Dubai Marina both saw contractions of 8 per cent apiece.

Source: Gulf News

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SEEK AND YOU SHALL FIND LOWER

RENT IN DUBAI Tuesday, October 24, 2017

In Dubai, the chances are that you will come across a property being offered at a rent lower than what

you are paying. And you won’t need to shift quite a distance to make use of the offer. Chances are there

is a brand-new building within the neighbourhood offering a lower rent and more options with state-of-

the art gym equipment and a swimming pool that looks the part.

Nor do you need to downsize into a smaller apartment to make all this happen.

For the first time in four years, Dubai’s tenants are starting to believe they do have an opportunity to

reduce their rent burden. More so, as landlords are willing to meet them halfway.

They need to as more of Dubai’s emerging locations see new apartment buildings getting completed.

Dubai South, for instance, is all set to open the doors wide with as many as 800 units likely to be

delivered by private developers by year-end or early 2018. They form part of about 2,000 units that are

to be readied in phases over the next two to three years.

There is also the developer Nshama going about with the handovers at its Town Square community

down Mohammad Bin Zayed Road. Chances are that at both these locations a sizeable portion of the

new homes will be placed in the rental market. And they can have a telling impact on what landlords

elsewhere in the city are able to charge on their existing properties.

Plus, the rental dynamic will also need to start factoring in what Dubai’s master-developers can do.

Nakheel is fast-tracking the creation of residential-focused communities where the properties will be

leased by it. For instance, there is one under development at Nad Al Sheba, which will feature 1,572

high-end villas, all for rental purposes. The project is due for delivery next year. Over the next five

years, Nakheel intends to double its leased home portfolio to 36,000 units over a five-year period.

Damac Properties in its latest third-quarter financials confirmed that its move into the leasing space —

at its Dubailand development — has got off to a good start. When Dubai’s leading developers push hard

into leasing, the ripple effect will be felt for a long time.

Already, there is quite a disconnect between what the Rera (Real Estate Regulatory Authority) Rental

Index lists for a particular community and what landlords are actually asking. “For example, a two-bed

in Downtown is between Dh140,000-Dh180,000 in the Index, although the current asking prices on

property portals start from Dh120,000 for two-beds,” said an estate agent. “It’s the same now for Dubai

Marina, where the Index indicates Dh120,000-Dh160,000 while the actual asking prices are Dh90,000

onwards.

“Clearly, the change in the rental market is yet to be reflected in the Rera index and would need further

calibrations in the following months.” According to Core Savills’ Q3-17 Dubai market update, the final

three months should add another 5,000 units and take the full-year delivered tally to about 17,800

units, and “largely in the mid-market segment”. Now, that’s the most telling point.

So, those tenants who feel they cannot put up with their current landlords’ demands any longer should

be out there scouting for lower rental options. Because a significant portion of recent deliveries are

going to end up in the rental space. Unlike in the past, landlords see there is no wisdom in keeping a

unit vacant until they get their demands. Because next year and 2019 will see much more than 15,000

plus units getting delivered. “Rent decline has been significantly varied in Dubai and across freehold

areas,” said David Godchaux, CEO of Core Savills. “The lowest year-on-year drop have been about 2 per

cent while the highest has been 10 per cent.



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“But locations such as Bur Dubai, Karama, Mirdif and Al Ghusais remain fairly inelastic due to the lower

tenant movements and captive demand, although we’re also seeing a mild softening.

“Rental contractions we predicted at the outset of 2017 have played throughout the year with a

sweeping effect seen across the 19 (freehold) districts we monitor. The high-end freehold clusters are

showing the most significant declines. We expect all districts to continue following the same trend, and

the general sentiment of rent drops to be amplified over the next 12 months.”

Source: Gulf News

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DECLINE IN DUBAI RENTS TO

CONTINUE IN 2018? Tuesday, October 24, 2017

With a glut of apartments and villas for lease and tenant demand failing to keep up, rents in many areas

around Dubai have been heading south for some time now. And if the latest analysis were correct, it

looks like the trend will continue towards year-end and even drag on into 2018.

According to Jesse Downs, managing director of Phidar Advisory, many signs point to the cost of renting

a home in Dubai coming down further and these include the huge influx of new residential developments

and slow employment growth.

Construction of new flats, villas and townhouses has been quite aggressive of late, especially since the

city expects the number of visitors to swell during the Expo 2020 hosting. As of the last quarter,

thousands of apartments and hundreds of villas were delivered in Dubai, providing more options for the

tenants to choose from and pushing rates down.

“Rents will continue to decline through the end of this year and likely into next year,” Jesse Downs,

managing director of Phidar Advisory, told Gulf News.

“In fact, we’ve seen stronger rent declines in September than the rest of the year. In September, even

sales prices started to decline again, and significantly.”

Rents for most flats in Dubai fell in September, with the apartment rental prices decreasing 0.85 per

cent month-on-month and falling 6.07 per cent year-on-year, according to real estate tracker REIDIN.

A similar trend has been witnessed by Asteco, which reported that the cost of leasing an apartment over

the third quarter of 2017 fell 4 per cent, while year-on-year rental comparison showed a more marked

decline of 12 per cent. Villa rental rates, likewise, have fallen by 3 per cent quarter-on-quarter and 10

per cent year-on-year.

The overall trend has obviously been due to demand not keeping up with a huge influx of new

apartments and villas. While more properties are being built or delivered, there are fewer tenants who

are eager to snap up flats and villas.

Between August and September alone, some 3,300 residential units -- including more than 600 villas --

were delivered, according to JLL. Before the end of 2019, expect more homes, approximately 80,000, to

flood the market.

“The 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,” noted John Stevens, managing director of

Asteco. Still, there are landlords that refuse to lower rates in certain areas, and this is causing the

market to flatten somehow at the moment.

According to Downs, some property owners are still expecting the market to stabilise, so they tend to

hold onto their units instead of agreeing to a lower rent, hoping that somehow they will soon have the

upper hand in the market. “But higher vacancies are impacting every community in the city,” she said.

“Sometimes, unrealistic expectations prevent landlords from renegotiating with existing tenants – but

tenants are finding better deals and moving within their own buildings for a lower rent and sometimes

better lease term, like a more professional landlord with professional maintenance teams and better-

managed units.” This trend can be seen even in the most popular areas in Dubai.

“Eventually, prolonged vacancies will convince landlords to reduce their advertised and accepted rents to

more realistic levels, so rent declines will probably drag on into the next year.”



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As to when the rents will stabilise or start going up again, there is no clear-cut forecast. But factors,

such as higher oil prices, improved business conditions and better job prospects could likely work in

favour of the landlords.

“Most likely, it will stabilise towards the end of 2018 or in 2019. However this is also incredibly positive,”

noted Downs.

“House prices were far too inflated and high rents also have negative consequence for the city as well as

for real estate investors. High rent inflation simply is not sustainable and leads to volatility and

uncertainty, which reduces volumes and liquidity.”

“This introduces liquidity risk, which means uncertainty over the ability to exit an investment. Reasons

for exiting can vary - sometimes it's personal, sometimes it's more systemic. Liquidity risk is often

underappreciated by the average Dubai real estate investor.”

Source: Gulf News

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BURJ KHALIFA AND ITS

NEIGHBOURHOOD PULL IN DH6.2B Monday, October 23, 2017

Cash-rich investors are making a strong return to Dubai’s property market, with the Burj Khalifa and its

immediate neighbourhood becoming the top-selling location by taking in Dh6.2 billion in the first nine

months.

Business Bay followed with Dh5.5 billion while Dubai Marina had Dh5.3 billion, according to figures from

Dubai Land Department.

In all there were Dh204 billion worth of realty transactions in the first three quarters from 52,170 deals.

Land in Dubai is proving a sought after commodity, with plot sales attracting Dh143.4 billion, achieved

from 11,169 transactions.

Building sales generated a further 5,014 transactions for a total value of Dh12.7 billion, while 36,000

transactions happened involving residential units for Dh48.7 billion.

Cutting across asset type, there were 11,699 transactions worth Dh102 billion financed through

mortgages.

The location that brought on the highest number of mortgage-based deals was Palm Jumeirah (with 578

transactions exceeding Dh11.3 billion), and followed by Business Bay (596 transactions worth Dh4.6

billion).

According to Sultan Butti bin Mejren, Director-General of Dubai Land Department, “The data clearly

shows increasing demand across all property categories, which means that we are attracting a wide

variety of investors.

“We expect the market to remain on this upward trajectory of sustained growth.”

Source: Gulf News

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DEYAAR PROPERTIES TO FEATURE

HUAWEI TECHNOLOGY Sunday, October 22, 2017

Deyaar Development, a UAE-based property development company, has inked a deal with Huawei to

supply residents of its properties with technology and smart home products, the company said on

Sunday.

The five-year Memorandum of Understanding signed between Deyaar and Huawei, a Chinese technology

firm, will cover several elements, including the introduction of “state of the art networks” and Voice over

Internet Protocol (VoIP) capabilities in numerous properties, including Mont Rose, The Atria, and Al

Barsha Hotel. Future projects will also be fitted with these solutions.

Source: Gulf News

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DUBAI DEVELOPER IS OUT TO TEST

THE LIVE-WORK BALANCE Sunday, October 22, 2017

Creating communities in Dubai is no longer about living in one place and driving down to work

elsewhere. If both can be done at the same place, all the better. And throw in a mammoth lobby with

music streaming through, then the developer and the resident have hit the right groove.

“The live-and-work concept has worked quite well in Europe, the US and Japan,” said Fred Durie, CEO of

Nshama, which recently started handover at its 3.1 million-square-metre Town Square development off

Mohammad Bin Zayed Road and further down from Al Barsha. “We have had the handover of 320

townhouses so far, and we are seeing residents who couldn’t afford this location earlier come into Town

Square.”

At the time of its launch, in 2015, it offered introductory prices of just under Dh1 million for a three-

bedroom townhouse and Dh350,000 for a studio. The entire development will take 10 years to build up

and eventually be home to 80,000 residents. Each of the sales launches so far has been met with robust

demand.

Some of the initial handovers are also entering the rental market, with a three-bed having an asking

rate of Dh120,000 and more, while a four-bed unit has a tag of Dh135,000 plus.

“At some point, we as the developer will be open to retaining some of the buildings in Town Square for

[short-term] leasing purposes,” said Durie. “At the moment, however, we just have one such project, for

1,500 units, leased out for 10 years to a corporate tenant. That will be delivered in Q1-19.

“We have masterplanned the entire 3.1 million square metres and well in line to meet that 10-year

completion timeframe.”

With the first tenants moving in plus the units put up for rents, Town Square will have a decisive say in

how the rents in the immediate areas play out.

And those little touches such as a super-sized lobby can lend a hand. At 2,000 square metres, the area

has been divvied up for a music room, games corner, reading space and creative zones.

“Right now we have two ground level lobbies, each part of a ground-plus-11-storey building with 478

residential units [studios and one-bedroom apartments],” said Durie. “Sure, the work-life aspect has

been tried at some of the other projects in Dubai. But I would like to think we have taken this concept a

long way forward. Under the UNA concept we are launching now, tenants can also benefit from the

licenced co-working spaces.

“The home and work aspirations of the new generation have changed. They seek social destinations that

add to their quality of living with none of the fuss associated with traditional apartment-living. This is a

perfect fit to the start-up, digital-savvy youth of our times. They value privacy and individuality yet

cherish the joy of social collaboration.”

Source: Gulf News

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SHAIKH MOHAMMAD OPENS WORLD

GREEN ECONOMY SUMMIT 2017 Wednesday, October 25, 2017

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE

and Ruler of Dubai officially opened the World Green Energy Summit (WGES) on Tuesday morning,

attending the opening ceremony and touring the exhibition.

He was accompanied by Shaikh Hamdan Bin Mohammad Al Maktoum, Crown Prince of Dubai and

Chairman of the Executive Council.

This week Dubai plays host to three major ecologically-focused events that will emphasise sustainability.

First is the 19th annual Wetex, running from October 23 to 25 at the Dubai World Trade Centre (DWTC),

swiftly followed by the 4th annual World Green Economy Summit (WGES), which is running from

October 24 to 25, at the same venue as Wetex. The two events are being held in conjunction with the

2nd edition of the Dubai Solar Show, as part of Dubai’s Green Week.

This year’s summit will highlight three key issues facing the green economy, according to Saeed Al

Tayer, CEO of Dubai’s Electricity and Water Authority (Dewa), the event’s organiser.

These are innovation and technology, finance and investment, and leadership and policy.

The opening ceremony of the summit saw Al Tayer announce the opening of a Dh2.4 billion green fund

in the presence of Shaikh Mohammad and Shaikh Hamdan.

The first day closed with Al Tayer, who is also the Vice-Chairman of the Dubai Supreme Council of

Energy, leading a youth dialogue session, aimed at promoting youth engagement in a green economy.

He called upon the youth in the UAE and around the world to become part of the global efforts towards

reaching a green economy.

“[The WGES theme of] ‘Driving Innovation, Leading Change’, illustrates the pivotal role that young

people play in the transformation to the green economy, because innovation and creativity are qualities

of youth, and the change we seek is a continuous process, which to a large extent is driven by the

youth,” Al Tayer said.

Organisers hope that stakeholders and policymakers will work together at the summit to tackle some of

the challenges created by climate change.

On this point, Al Tayer told assembled media last week at a press conference that “the world today ... is

feeling the impact of climate change. We are in dire need of adapting to these changes.”

He said that people often mistook climate change for a merely environmental problem.

“Rising sea levels and so on are not the only impact [of climate change]. Climate change will impact the

economy, reaching social and health organisations,” Al Tayer said.

Source: Gulf News

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EMAAR DEVELOPMENT IPO TO BE

SIMILAR IN SIZE TO $1.58BN EMAAR

MALLS FLOTATION Thursday, October 26, 2017

Emaar Properties,the UAE's biggest listed property developer, has priced the initial share sale of its real

estate development subsidiary, Emaar Development, which will be similar in size to the US$1.58 billion

flotation of its malls unit in 2014.

Emaar, which is selling 20 per cent of its real estate business, will offer 800 million shares and will

announce the offer price range at the opening of the initial public offering (IPO) next month, it said in its

prospectus on Dubai Financial Market (DFM)’s website.

The prospectus said 90 per cent of the offer would be reserved for institutional investors, while 10 per

cent would be available to retail investors.

Forty million shares would be reserved for the Emirates Investment Authority, the prospectus added.

The Emaar Development offer will be in two tranches, according to the prospectus, with the first taking

place between 2-13 November 2017 and the second between 2-15 November.

Dividends from the offering will be distributed to investors in January, Emaar said in a separate

statement.

Emaar Properties announced the IPO plans earlier this week, scaling back initial plans for up to a 30 per

cent stake sale of Emaar Developments.

The reduced size of the offering disappointed investors, with shares in Emaar tumbling 2 per cent on

Sunday.

However, the announcement of the IPO is still significant, as only one company - insurer Orient UNB

Takaful - has listed on DFM since Dubai Parks and Resorts in November 2014.


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HOMEFRONT: SHOULD INTERNATIONAL

CITY INVESTOR SELL HIS TWO UNITS

AT A LOSS OR WAIT IT OUT? Wednesday, October 25, 2017

I bought two studios in International City in 2014: one for Dh392,000 and another for Dh372,000 in

June 2014. In anticipation of a price increase this year, I held on to these investments but unfortunately

the prices seem to be continuously dropping. In lieu of the current situation, and with so much of supply

coming in, do you still recommend holding on to these investments or should they be sold right away.

Even the rental yield has dropped from 9 per cent to 7 per cent for this area. I have an offer for both the

units for Dh350,000 each. What action should I take? AK, Dubai It is true that for the rest of this year

and perhaps even into 2018, residential sale prices on the secondary market will experience further

softening. This is mainly due to the many options available in the off plan primary market, along with

exceptionally generous payment plans and post payment plans.

The answer as to whether to hold on or sell your units, given you have buyers for both, lies not in my

recommendation but in your situation. If you require any immediate injection of money then go ahead

and sell, if however you bought the apartments as long-term investments, I would hold onto them, at

least until Expo 2020. Property values, much like stocks and shares, go up and down therefore timing of

when to transact or hold is the key. The future looks rosy given the government spending plans on the

infrastructure and the positioning of Dubai as a tourist destination of choice. This coupled with the Expo

will highlight Dubai as a safe and investor-friendly city which again, if you hold onto your properties for

a longer period, will mean you will not have to sell at a loss in the future and will have still enjoyed your

return on investment. Even if this has reduced from 9 to 7 per cent, it still represents excellent returns

compared to other cities.

Can a non-resident of the UAE or a non-working resident purchase property in Dubai? So, say a resident

of another country wishes to purchase a property in Dubai as an investment, what would be the

requirements? GB, Dubai It is indeed possible for you to buy a property in Dubai without being a

resident. If you choose to buy with cash it is very straightforward; you can also avail yourself with

finance too but banks will only lend a maximum of 50 per cent of the purchase price so bear this in

mind. The easiest way to proceed would be to engage the services of a Rera-registered (Real Estate

Regulatory Agency) estate agency, sign the statutory Form B with the agency (this is effectively the

agreement between you and the agency to find you your property) and give them all the requirements

needed such as location, size and type of property you are looking for then let them do their work. You

do not have to be present, properties can be bought without you being here but in this case you will

have to appoint a power of attorney to act on your behalf. Alternatively you will need to visit for

viewings, to sign the no objection certificate and of course the final transfer. Once you have selected

your property and agreed a price with the seller, the agency will organise a form F (sales contract) that

you must sign before paying a 10 per cent of the sale price as a deposit. The seller will have to pay off

all outstanding service charges and apply for the NOC from the developer. Once the NOC is ready, the

transfer can take place. The whole process, if bought by cash, can take less than a week but perhaps

allow a two-week period in case of delays. The process takes a while longer if the purchase is being

done with a mortgage.


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NAKHEEL'S NINE-MONTH PROFIT RISES

2.5% ON GROWTH ACROSS BUSINESS

LINES Wednesday, October 25, 2017

Nakheel, the property developer behind the Palm Jumeirah, said on Wednesday its net profit in the first

nine months of this year rose 2.5 per cent year-on-year to Dh4 billion thanks to growth across its

businesses.

The company’s businesses include residential development, hospitality, retail and leasing businesses. It

did not provide a breakdown of revenue or profitability.

“The growth in our net profit signals stability and maturity in Dubai’s real estate market, and reflects our

ongoing strategy to diversify our business in order to build a long-term, sustainable business and

achieve our financial objectives,” said Nakheel chairman Ali Lootah in a statement.

Nakheel expects to issue more contracts by the end of this year after signing more than Dh7bn worth of

agreements so far this year, including a Dh4.2bn contract for Deira Mall, the centrepiece of Deira

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

The company also awarded a Dh1.5bn contract for The Palm Gateway, a residential retail complex on

Palm Jumeirah.

Nakheel has more than 23,200 residential units under development at several locations across Dubai,

including Palm Jumeirah, Nad Al Sheba and Jumeirah Park. Its current and future retail portfolio

encompasses over 17 million sq ft of leasable space, including 13 million under development. It

currently has 17 hotels and serviced apartment complexes with 6,000 rooms, two of which are open, in

addition to a number of clubs and restaurants.

In the first half of this year, Nakheel posted a 10.5 per cent decline in net profit but affirmed its

confidence in meeting full-year forecasts.

The developer currently has Dh50bn worth of projects under construction, it said in September.

Property developers are forging ahead with project despite falls in prices and rents.

Property rental rates in Dubai continued to come under pressure during the third quarter and further

falls are expected during the rest of the year, according to broker Asteco.

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, the broker said.

This follows a fall in rents throughout 2017, as thousands of new properties have come on to the market

amid job losses and lower housing allowances.


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EMAAR TO FLOAT JUST 20 PER CENT OF

REAL ESTATE DEVELOPMENT

SUBSIDIARY Sunday, October 22, 2017

Emaar Properties, the UAE’s largest listed real estate company, scaled back plans for the listing of its

real estate development arm, Emaar Development, sending its share price tumbling.

The developer on Sunday said it would list a 20 per cent stake of Emaar Development, after having said

in June that it would offer up to 30 per cent. Retail investors can subscribe to the IPO from November 2-

13, while qualified investors can subscribe from November 2 -15.

“The IPO of our UAE development business will allow potential investors an opportunity to participate

in a pure play UAE developer offering strong and stable cash flows and an attractive dividend yield,” said

Mohamed Alabbar, the chairman of Emaar Properties. “Additionally, it offers the opportunity for Emaar

Properties’ shareholders – including the UAE Government – to unlock the true value of our UAE

development business.”

The company did not comment on the lower stake sale.

News of the reduced sale was poorly received by investors anticipating the largest IPO on the Dubai

stock exchange for several years, together with a special dividend payment for Emaar Properties

shareholders.

Shares in Emaar Properties suffered their worst day for six months, closing down 2.1 per cent at

Dh8.57. “The issuance of a 20 per cent stake still equates to a sizeable Dh4.5 billion to Dh5bn offering

on our estimates, compared to the approximately Dh5.8bn raised through the 15 per cent stake sale in

Emaar Malls IPO,” said Ankit Gupta, vice president of investment management at Shuaa Capital.

“However, in the short term, the lower offering size does imply a potentially lower one-off special

dividend, and thus may have disappointed some retail participants who were primarily focused on the

dividends from the stake sale.”

“The market has priced in expectations of a Dh9bn plus special dividend over the past few months,

which equates to Dh1.28 per share at 1x net asset value,” said Mohammad Kamal, an analyst at Arqaam

Capital in Dubai.

“Assuming a [lower] net asset value of Dh23.8bn for the carve-out, this suggests IPO proceeds of

Dh4.76bn or a special dividend payment of Dh0.66 per share.”

The listing of Emaar Development will be only the second IPO on the Dubai bourse since 2015. The

DFM’s last IPO, insurance provider Orient UNB Takaful, was oversubscribed, but has yet to trade since

its shares were listed in June.

Emaar Properties approved the IPO at its board meeting on Saturday, together with the transfer of

“certain assets of the real estate development business of the company in the UAE” leading to the

“conversion of Emaar Development into a public joint stock company”.

Dubai’s biggest listed developer said this summer that the funds raised would be “primarily distributed

as dividends to Emaar’s shareholders”.

Emaar Malls was added to the DFM in 2014, with its Egyptian unit hitting the Cairo stock market the

following year.



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Emaar Development represents 20 per cent of the parent group’s assets. A public listing would clinch

more funds for Emaar’s investment strategy.

Emaar Developments last week said that comprehensive income rose 32 per cent year-on-year to Dh2.1

billion for the first nine months of this year.

Revenue for the period rose 27 per cent to Dh6.5bn, with income from apartment sales rising 82 per

cent.

Emaar Development, which has built 34,500 residential units since 2002, had more than 24,000

residential units under development at the end of September.

The subsidiary plans to launch about 50,400 units over the next five years with an average annual unit

sales target of 10,000 units and a targeted overall gross profit margin of 40 per cent, the company said.

As of the end of September, the company sold 80 per cent of its units under development, which have

an average gross profit margin of 41 per cent for sold units and a sales backlog of Dh41bn.


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WHY YOU SHOULD BET ON SERVICED

APARTMENTS IN DUBAI Wednesday, October 25, 2017

Serviced/hotel apartments have traditionally been more expensive to buy compared to standard

residential units in Dubai. They also offer higher yields to investors, especially if managed by an

internationally branded operator.

Serviced apartments are usually occupied by business travellers, relocating families and leisure GCC

families. Serviced apartments are a great way for newcomers to get settled in Dubai as they provide

more flexibility to the tenant - fully furnished and monthly rent payments also include utility bills and

cleaning services.

There are approximately 15,000 freehold completed serviced apartments in Dubai, with 30,000 units

expected to enter the market over the next five years, according to a new GCP-Reidin report.

Investors in serviced apartments are betting on sustained tourism growth in Dubai.

With the recent shift in focus to expanding the UAE's family leisure attractions, the need for more

serviced apartments is being felt more than ever. Dubai's increasing number of family-friendly theme

parks and outdoor adventures and festivals are drawing an increasing number of travellers to the region

for extended periods of time. Demand for serviced apartments is likely to continue to rise in the coming

years.

"The expected surge in serviced apartments reflects the optimism regarding tourism numbers and is in

line with the increase in hotels throughout the city as well," says Hussain Alladin, head of IR and

research at Global Capital Partners. However, supply numbers may shift as developers adjust pipeline

depending on market conditions. But, the actualisation rates in the serviced space is likely to be much

higher than in the residential space.

Government Related Entity (GRE) developers (such as Emaar, Vida, etc.) account for 34 per cent of

existing stock in the serviced/hotel apartment space, and this number is expected to reduce to 19 per

cent by 2021. GRE developers are expected to focus on the upper end of the market, leaving the private

sector to cater to the mid-income segment. Within this asset class, there is a variance in price

premiums, depending on which community you choose to buy in.

Ready serviced apartments in Downtown Dubai and Dubai Marina trade nearly double the price of their

non-serviced counterparts. However, on the Palm Jumeirah, they enjoy only a 38 per cent premium,

according to the report.

"The lower premiums witnessed on the Palm Jumeirah may be a result of a confluence of factors,

including but not limited to the fact that there is a steady pipeline of off-plan projects that will likely

pivot prices higher," added Alladin. There is also variance in prices between the off-plan and ready space

in this asset class.

In Palm Jumeirah, ready serviced apartments trade at a discount to their off-plan counterparts by an

average of 20 per cent. The reason for the premium in off-plan units are rental guarantees and

extended payment plans offered by developers. Off-plan serviced apartments in Business Bay are also

more expensive than their ready counterparts. "This indicates that in Business Bay, the quality of

serviced apartments is generally increasing with better brand names now coming in," Alladin concludes.


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SOBHA RELEASES MORE HOMES IN

MBR CITY Wednesday, October 25, 2017

Sobha Group has announced the launch of building 5 in Hartland Aflux as part of phase three in Sobha

Hartland Greens. They are 12-storey apartment buildings located on the Dubai Water Canal.

Building 5 in Hartland Aflux will comprise 1, 2 and 3-bedroom apartments. Apartment sizes will range

from 812sqft to 2,232sqft. Expected completion date is October 2019.

P.N.C. Menon, founder and chairman, Sobha Group, said: "This project caters to the affordable luxury

segment and offers the perfect home for nuclear families and first-time buyers. The product has been

developed with both investors and end-users in mind."


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FOREIGNERS PUMP IN DH43 BILLION

INTO DUBAI REALTY IN NINE MONTHS Wednesday, October 25, 2017

Foreign investors accounted for the bulk of real estate investments in Dubai in the fist nine months of

2017. They invested over Dh43 billion in Dubai properties through 22,667 transactions, according to the

Dubai Land Department (DLD).

Gulf nationals came in second place, investing nearly Dh29.5 billion in 11,000 transactions. The market

also attracted Arab investors who closed 6,806 real estate transactions worth over Dh11 billion.

The total value of real estate investments made in Dubai in the first nine months of 2017 exceeded

Dh84 billion.

Women of various nationalities have also been actively investing in the Dubai property market in the

first three quarters. More than 9,000 women made 11,000 transactions worth over Dh21 billion.

Sultan Butti bin Mejren, director-gGeneral of DLD, said: "The real estate market continues to maintain

its momentum, driven by a general optimism among Gulf, Arab and foreign investors. The Dh84 billion

worth of real investments made during this period is also a sign of sustainable growth and the market's

ability to absorb the developer demand for residential, commercial, office and industrial properties. The

real estate market is in full harmony with other economic sectors in the city."


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OWNERS MUST HAVE A BIGGER SAY IN

BUILDING MANAGEMENT Tuesday, October 24, 2017

The building reviews section on propertyfinder.ae is full of colourful anecdotes about the

professionalism, or lack thereof, of building management services around the country. It is by far our

single most commented theme and makes for entertaining reading. Some of it, unfortunately, is unfit for

publication. But what's clear is that for residents here in the UAE, good building management equals a

good building.

The breakneck pace of development in this exciting part of the world comes with its own unique set of

challenges. The vast majority of Dubai's freehold housing stock is less than 10 years old. The laws

governing them are even younger, and the application of these laws are younger still.

How your building is managed and by whom is important. It can make a big difference to your quality of

life. For owners, the short and long-term viability of your investment lies in the hands of those

responsible for its ongoing maintenance. Technically, that's the owners themselves (for everything

within the boundaries of their apartment) and the Owners' Association (OA), which is responsible for all

common areas of the building such as lifts, fire and safety equipment, lighting, and power.

The OA is a representative group of owners who act on behalf of all owners. They are also responsible

for the setting and collection of building fees from owners, managing the budget, making payments to

suppliers and the administration of the communal reserve fund to cover any future maintenance costs.

Not a small responsibility and one which increases significantly for taller and older buildings.

Strata law regulation, based upon international best practice, aims to protect the interests of all

stakeholders and has existed in Dubai since 2010. Once a new project is complete and handed over, the

developer is required to register a Jointly Owned Property Declaration with Dubai's Real Estate

Regulatory Agency. You can check with Rera to make sure your property developer has done so.

Thereafter, homeowners then manage their property through an OA.

Responsibilities

The OA may assign a building facilities manager of their choice, and may choose to raise fees or lower

fees as they see fit to properly manage and maintain the building. At least that's how it's supposed to

work.

Owners' associations do exist but in practice their influence is limited, and legally they are not a

registered recognisable entity, which makes it almost impossible for them to recoup unpaid building fees

from owners via the courts. Developers continue to yield the most power and commonly make unilateral

decisions; assign building manager rights to their preferred suppliers without the input, or in direct

contradiction to the wishes of the OA. All of which frustrates owners and raises legitimate questions

about whose interests are being served. Particularly if the developer no longer owns property within the

development.

Proponents may claim that while OAs are good in theory and should be part of the discussion, in

practice, individual owners lack the education, experience and expertise to handle such a responsibility.

Dubai is full of the world's tallest skyscrapers jam-packed with complicated, expensive machinery and

facilities. Oversight and maintenance of fire safety systems for a 90-storey building is not for the faint-

hearted.

Many of Dubai's freehold property owners are non-residents and others are less than fully engaged in

their building and community. OAs have reportedly struggled to achieve enough attendees at annual

general meetings to reach the minimum required for a quorum.



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Technical expertise

Undoubtedly, the developer knows the building intimately and from a technical expertise perspective is

far better equipped to service its needs. And regardless of how much stock within the project they

retain, developers will forever hold a vested interest in the building as it carries their brand and

reputation.

Critics will claim that developers maintaining such influence is illegal, a serious conflict of interest and is

prone to abuse. Much has been written about unreasonable fee hikes, residents being locked out from

buildings and facilities, pools being drained in ongoing battles between developers and owners over the

years, mainly over unpaid maintenance fees and NoCs.

Requiring NoCs for building work should be a safety mechanism to protect the building from faulty

workmanship for major work being done. But when building security who have been appointed by the

developer request an NoC for a single curtain rod installation by Ikea, extortion is the word that comes

to mind.

The good and bad guys in this debate depend much upon your perspective, but these are clear

examples of what happens when the interests of owners and developers don't align. For now, developers

are winning most of these arguments and more needs to be done to legitimise OAs, their legal status

and rights of owners.

OAs need to play the role that they were intended to do: Represent owners' interests in the ongoing

management and policies of their building. The system is not perfect but it is evolving. Positive strides

have been made but there is clear room for improvement.


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ABU DHABI’S CORNICHE APARTMENTS

MORE AFFORDABLE Tuesday, October 24, 2017

Renting one of the high-end apartments in Abu Dhabi’s Corniche area is now 15 per cent less expensive.

But tenants seeking to save more on rents should seek out options in Al Reef Downtown, Khalifa and

MBZ City, where the drops have been steeper, according to an update from Asteco.

“We are experiencing a weak labour market with reduced employment opportunities and a tightening of

housing allowances,” said John Stevens, managing director. “This, together with additional supply since

2016, has led to increased vacancy rates which we expect to continue into 2018."

“Landlords are discounting rents and offering flexible payment terms, [up to 12 cheques] to retain

existing tenants and secure new leases.”

Around 2,750 apartments were completed across the emirate since the beginning of the year, compared

with 1,350 for the whole of 2016.

In addition to the 800 units delivered in the third quarter of 2017, a further 1,500 apartments are due

for hand-over before year-end.

The highest year-on-year decline in villa sales was recorded in Hydra Village, at 9 per cent, with quarter-

on-quarter results showing a fall of 3 per cent, the same as at Raha Gardens.

In all, about 550 villas have been completed in 2017 and a further 250 villas are due for delivery before

the end of the year.

“Rising vacancy rates have been experienced in many villa communities as tenants opted to downsize to

smaller or more affordable properties, while some even transitioned to apartment units to reduce their

accommodation expenses,” said Stevens.

Source: Gulf News

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MID-MARKET IS WHERE ABU DHABI

REALTY IS SEEING ACTION Monday, October 23, 2017

Where available, mid-market offerings are hitting the right notes in Abu Dhabi’s property market. Aldar’s

Water’s Edge scheme on Yas Island has had a good response and follows on from its earlier launch of

The Bridges.

But the broader Abu Dhabi residential market continues to “face downward pressure, with rents and

prices registering further declines on both a quarterly and an annual basis”, states the latest JLL update

on the emirate’s property market. But what the likes of Water’s Edge does is set a “new benchmark for

good quality waterfront housing at a lower price point”.

Around 550 units were delivered in Q3-17, bringing the emirate’s total residential stock to 250,000 units

or so. Latest deliveries include the Al Jazeera Tower on the Corniche, the C34 residential tower in Saraya

on the Corniche and the Abu Dhabi Marina Development in Al Bateen.

A further 3,000 residential units are scheduled to enter the market by the year end, mainly within Reem

Island, Saadiyat Island and Saraya, JLL adds.

In office space, rents were stable in the third quarter.

While headline rents in prime retail and office projects remained relatively stable, both sectors moved

further in favour of occupiers. Q3 also saw a further decline in residential and hospitality performance

due to the continued reduction in market sentiment.

And this was “despite the decline in demand, as office supply remains stable with no major completions.

However, the delivery of additional supply at a time of weaker demand is expected to place downward

pressure on rents over the next 12 months, particularly in secondary buildings.”

Source: Gulf News

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MUBADALA WEIGHS FIRST SAUDI

INVESTMENT AMID US PUSH Wednesday, October 25, 2017

Abu Dhabi’s Mubadala Investment Co. is weighing its first investment in Saudi Arabia together with the

kingdom’s sovereign fund and started talks to invest in US technology companies.

The sovereign fund is considering investing in the technology, real estate and industrial sectors in Saudi

Arabia, Chief Executive Officer Khaldoon Al Mubarak said in an interview with Bloomberg TV in Riyadh on

Tuesday. The kingdom is “a tremendous market” and Mubadala is exploring investments with the Public

Investment Fund, he said.

Sovereign wealth funds in Gulf Arab states are looking at opportunities in new areas, such as

technology, to lessen their reliance on volatile oil markets.

Mubadala plans to invest as much as $15 billion (Dh55 billion) over five years in SoftBank Group Corp.’s

Vision Fund. Mubadala last week said it was opening an office in Silicon Valley to manage this

commitment.

Mubadala has also started talks to invest in US technology companies after opening its office in the

country.

“After we started our relationship with SoftBank, it became clear to us that we needed to go deeper,”

said Al Mubarak. “In order to go deeper, we needed to be closer to the market.”

Source: Gulf News

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MANAZEL TURNS TO BUILDING

SCHOOLS TO INCREASE REVENUE Wednesday, October 25, 2017

Manazel Real Estate, the Abu Dhabi property developer, said on Wednesday it would add four schools to

its residential developments in the emirate as it seeks to create new revenue streams from health care

and education.

The Abu Dhabi listed company said it expects to attract a “number of experienced international

education institutions to its planned new facilities”.

Mohamed Al Qubaisi, the Manazel chairman, said that the firm’s expansion strategy is dependent upon

diversifying into new and growth sectors such as education and health care. “This in turn will deliver

significant revenue growth and shareholder returns over the longer term,” he said.

Three schools will be built in the Al Reef development near the Abu Dhabi airport to accommodate 4,000

students ranging from kindergarten to primary levels. The fourth facility, taking 1,200 students from

early level to kindergarten, will be built within the Ghantoot Hotel and Resort.

The developer did not disclose when the construction was set to be complete or the amount of

investment.

Manazel is not the only property developer expanding into the education sector.

Aldar Academies, a unit of Abu Dhabi developer Aldar Properties, has invested Dh1 billion since 2007 on

education and currently operates seven academies in the capital, in addition to an agreement to manage

four schools for Abu Dhabi National Oil Company.

At a time when oil prices have remained depressed for more than three years, property developers have

been boosting efforts to diversify their assets across sectors.

Strategy&, a PwC company, released a report in August that placed the education sector as the second

most attractive market in the GCC.

The company said: “The demand for private education is strong as it is driven by an expansion in the

student population, discretionary income growth, a consumer preference for private education, and

governmental privatisation initiatives.”

Manazel’s move into education would fall under real estate sale-leasebacks, which is on the lower end of

the risk/return spectrum, according to Strategy&. Currently, the UAE K-12 education system is

dominated by the private sector which is expected to grow with the rise in population. The population in

the region will hit 65 million by 2030, a third of whom will be under the age of 25.

In Abu Dhabi, more than 60 per cent of the total students in 2014-15 attended private institutions,

registering a compound annual growth rate of 6.2 per cent since 2010, according to a report from Alpen

Capital.

A number of villa schools were closed during the five years to 2015 as a result of new regulations, which

led to more institutions being created to accommodate the villa students and new enrolments. Alpen

Capital said that Abu Dhabi invested Dh2.3bn to open 43 new schools from 2011 to 2015.


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WHERE ABU DHABI RENTS HAVE RISEN

AND FALLEN, Q3 2017 Tuesday, October 24, 2017

Abu Dhabi’s residential sales prices and rents continued to slip in the third quarter because of job losses,

lower housing allowances and increased supply, real estate broker Asteco said on Tuesday.

Sales prices for apartments slid 3 per cent quarter-on-quarter and 10 per cent year-on-year, with the

most significant year-on-year drops recorded in Al Muneera and Reef Downtown areas, which plunged

12 per cent.

Around 2,750 units have been completed since the start of 2017, compared with 1,350 for the whole of

2016, and a further 1,500 apartments are expected to be delivered by the end of 2017.

“We are experiencing a weak labour market with reduced employment opportunities and a tightening of

housing allowances,” said John Stevens, managing director of Asteco. “This, together with additional

supply since 2016 has led to increased vacancy rates which we expect to continue into 2018.”

Average apartment rents dropped 3 per cent quarter-on-quarter and 10 per cent year-on-year, with the

steepest declines recorded for mid-market units and large properties within prime and high-end

projects.

“Landlords are discounting rents and offering flexible payment terms, (up to 12 cheques) to retain

existing tenants and secure new leases,” said Mr Stevens.

Villa rental rates fell 3 per cent quarter-on-quarter and 6 per cent year-on-year, with the steepest

declines recorded in Al Raha Gardens, Hydra Village and the larger units within Saadiyat Beach Villas.

While a small number of villas were delivered in 2016, 550 villas have been completed so far in 2017

and a further 250 units are due for handover before the end of this year.

“Rising vacancy rates have been experienced in many villa communities as tenants opted to downsize to

smaller or more affordable properties, whilst some even transitioned to apartment units to reduce their

accommodation expenses,” said Mr Stevens.


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ABU DHABI HOUSING AND HOTEL

MARKETS DECLINE FURTHER Tuesday, October 24, 2017

Residential rents and sales prices in Abu Dhabi declined in the third quarter of 2017 on the back of

economic tightening and the release of new housing stock, according to real estate consultancy JLL.

Apartment sales and rental prices in the capital both dropped 13 per cent year-on-year over the quarter,

while sales prices declined 13 per cent year-on-year and rents by 9 per cent, JLL’s latest market

overview found.

The decline was slightly less on a quarterly basis – at 3 per cent and 5 per cent for apartment sales and

rents, respectively – and 8 per cent and 1 per cent for villa sales and rents, respectively.

Still, the emirate’s residential market faces ongoing pressure due to a continued increase in vacancy

rates resulting from new supply completions during a period of job losses and cuts in housing

allowances, JLL noted.

Approximately 550 units were delivered in the third quarter 2017, bringing the total residential stock to

around 250,000 units. With a further 3,000 units scheduled to enter the market in 2017, residential

vacancies could increase further in 2018, causing further rental declines, the consultancy said.

New deliveries in the third quarter included Al Jazeera Tower on the Corniche, the C34 tower in Saraya

and Abu Dhabi Marina Development in Al Bateen.

Craig Plumb, head of MENA research at JLL, said the downwards trend would continue into the fourth

quarter of 2017. “Rents are low across the board, which is good news for tenants,” he said. “We expect

this trend to continue, probably at the same rates, as we see no reason to suggest price stabilisation.”

He added: “Oversupply is not the problem in Abu Dhabi – it’s lack of demand, due to job cuts, corporate

restructuring and reductions to housing allowance. So affordability for tenants is crucial and they are

looking at cheaper options, of which good quality ones are not widely available.

“There are no signs of the market bottoming out yet.” The emirate’s hospitality market registered an 8

per cent drop in average daily rates (ADRs) and a 2 per cent drop in occupancy levels compared to the

same period last year, the report showed.

As a result, revenue per available room declined by 11 per cent in the year to August 2017 compared to

the same period last year. However, the final quarter of the year is traditionally a strong period for Abu

Dhabi’s hotel market and this trend is likely to be strengthened by the planned opening of the Louvre

museum in November and the Formula One Grand Prix, according to JLL.

Meanwhile, Abu Dhabi’s office and retail rents remained “relatively stable” at 0 per cent year-on-year

change for both sectors, supported by few major completions taking place during the quarter, according

to the report.

However, the market is increasingly moving in favour of occupiers at a time of weaker demand. Mall

operators, for example, have been offering increased incentives such as flexible leasing terms, early

break clauses, rent-free periods and contributions to fit out, to attract and retain retailers.

The delivery of additional supply is expected to place further downward pressure on office and retail

rents over the next 12 months, particularly in secondary buildings.


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ABU DHABI LANDLORDS SWEETEN

LEASES WITH CHEAPER RENTS,

INCENTIVES Tuesday, October 24, 2017

Weakness in the job market and reduced housing allowances exerted downward pressure on both villa

and apartments rents and sales prices in Abu Dhabi in the third quarter of 2017, says real estate

consultancy Asteco.

"We are experiencing a weak labour market with reduced employment opportunities and a tightening of

housing allowances. This, together with additional supply since 2016 has led to increased vacancy rates

which we expect to continue into 2018. Landlords are discounting rents and offering flexible payment

terms [up to 12 cheques] to retain existing tenants and secure new leases," said John Stevens,

managing director, Asteco.

Approximately 2,750 apartments have been completed across Abu Dhabi since the beginning of 2017,

compared with 1,350 for 2016. In addition to the 800 units delivered in Q3, a further 1,500 apartments

are due to handover before the end of 2017, estimates Asteco.

Apartment rents dropped by three per cent over the quarter and by 10 per cent over the last 12 months,

with the highest declines recorded for mid-end properties and large units within prime and high-end

projects.

In the high-end segment, the highest year-on-year (YoY) declines were recorded at Abu Dhabi Corniche

(down 15 per cent), while mid-end and low-end areas also evidenced large declines, including Al Reef

Downtown, Khalifa and MBZ City.

Sales prices for apartments declined three per cent quarter on quarter (QoQ) and 10 per cent YoY. The

most significant YoY declines in sales price were recorded in Al Muneera and Reef Downtown, both down

12 per cent, with the highest QoQ declines reported in City of Lights, down eight per cent, and Sun &

Sky Towers, down six per cent. Both Al Bandar and Saadiyat Beach Residence were unchanged for the

quarter.

Villas get cheaper

Villa rents decreased by three per cent QoQ and by six per cent YoY. Al Raha Gardens, Hydra Village and

the larger units within Saadiyat Beach Villas recorded a more pronounced drop, with rents softening by

seven per cent, four per cent and five per cent respectively.

The highest YoY decline in villa sales was recorded in Hydra Village, at nine per cent, with QoQ results

showing a decline of three per cent, the same as Raha Gardens.

Only a small number of villas were delivered in 2016. However, approximately 550 villas have been

completed in 2017 and a further 250 villas are due for delivery before the end of Q4.

Stevens said: "Rising vacancy rates have been experienced in many villa communities as tenants opted

to downsize to smaller or more affordable properties, while some even transitioned to apartments to

reduce their accommodation expenses."

He added: "Despite a marginal decrease in sales prices for completed villas, demand for prime and high-

end off-plan projects, particularly those located on Yas Island and Saadiyat Islands, remained strong."



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How office market fared

Similar trends echoed throughout the office market due to a subdued economy, despite a modest

recovery in the oil price since the start of the year. Office accommodation is evidencing low occupancy

rates with approximately 170,000sqm of office space having been delivered over 2016 and 2017.

Stevens said: "Office rents were broadly unchanged over the quarter. However, evidence indicates

declines of five per cent to 10 per cent on contract renewals within several Grade A and B office

buildings. Landlords have actively sought to reconfigure accommodation into smaller units and offer

rent-free incentives to retain existing tenants and secure new tenants."


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SHARJAH REAL ESTATE TRADE VALUE

REACHED DH8.2BN IN THIRD QUARTER

OF 2017 Monday, October 23, 2017

Sharjah saw a 37.2 percent increase in the value of real estate trade in the third quarter of 2017 at

AED8.2 billion, as compared to the same period in 2016, according to figures released by the Sharjah

Real Estate Registration Department.

Abdul Aziz Al Shamsi, Director-General of the department, said the total number of transactions stood at

11,853 in the third quarter of 2017, of which 2,384 were ownership certificates and 811 were sales

transactions.

''Mortgage transactions reached 894, including 482 transactions valued at AED3.4 billion,'' he added.

The total traded areas reached 34,304 million square feet.

''Sector-wise, residential, commercial, industrial and agricultural transactions in the same period totalled

483,181, 123 and 24, respectively,'' Al Shamsi noted.

The Al Khan area led in volume, with 162 transactions.

Source: Emirates 24/7

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SHARJAH REAL ESTATE TRANSACTIONS

UP 37% Tuesday, October 24, 2017

Sharjah registered a 37.2 percent increase in the value of real estate transactions made in the third

quarter of 2017 compared to the same period in 2016, according to new statistics released by Sharjah

Real Estate Registration Department (SRERD). A total of 34,304 million square feet of real estate was

traded during Q3, with a total value of US$ 2.23 billion (AED 8.2 billion).

Residential property transactions drove third quarter growth accounting for about 60 percent of total

real estate transactions. New master-planned developments, supported by 2014 revisions to the

emirate’s property law have transformed Sharjah’s residential sector. A number of large-scale projects

in various stages of development have boosted the availability of both off-plan sales and sales of

completed residential units in Sharjah.

Master-planned projects currently in development include the 14 million square foot Al Zahia

Community, the 25 million square foot Tilal City and, announced last month, the 2.2 square kilometre

Aljada urban residential district and the 3 million square foot Al Mamsha residential community.

Collectively the new developments are expected to accommodate about 150,000 people when

completed.

According to SRERD, mortgage transactions during Q3 reached 894, including 482 transactions with a

combined value of AED 3.4 billion (US$ 0.9b). Overall, the total number of real estate transactions

registered by the department stood at 11,853 in the third quarter, of which 2,384 were ownership

certificates and 811 were sales transactions. Transactions by sector included 483 residential, 181

commercial, 123 industrial and 24 agricultural transactions.

In August, Sharjah Real Estate Registration Department announced a 46 percent increase in the number

of real estate sales transactions during the first six months of 2017, with a 23 percent growth in the

number of residential sales transactions.

GCC investors predominate in Sharjah residential property sales, although recent changes to the

property law have led to increased investment from foreign expatriates living in the United Arab

Emirates. According to global property consultancy Cluttons, rising demand pushed Sharjah villa rental

prices up by 11.7 percent during the first six months of 2017.

Source: Sharjah Update

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OWN-TO-FLIP HOMES ARE HOT

PROPERTY ONCE AGAIN IN US Saturday, October 28, 2017

House flipping in the US, which declined after the financial crisis in 2008, is on the rise again, thanks to

low interest rates and rising home prices.

And with the renewed interest comes investors looking for a high return. But the real estate strategy —

in which a home is bought, renovated and resold quickly — requires fast access to money, and

developers are willing to pay higher interest rates for it. The loans are backed by the property and are

short, typically running for a year or less.

The funds that finance them offer reliable returns of about 8 per cent, for those who can meet minimum

investments, generally $100,000. The finance industry around house flipping has been active for

decades, and it has been ticking up lately.

Last year, 5.7 per cent of all home sales were flips, the highest level since 2006, according to Attom

Data Solutions, a property database. The trend, popularised on TV series like HGTV’s “Flip or Flop” and

“Flipping Out” on Bravo, is attracting the interest of Wall Street: Last week, Goldman Sachs bought

Genesis Capital, a leading lender to house flippers.

But the loans — sometimes referred to as fix-and-flip or hard-money loans — come with risks, including

developers unable to pay them back and a drop in real estate prices that could make properties hard to

sell or even rent. Chris Gutek, a former equity analyst at Morgan Stanley who has been an independent

investor for the last decade, said he lost money on loan funds in 2008, but remained bullish on the

sector.

“I was getting nice 12 to 13 per cent interest for a few years, but I had one very bad experience in

2008,” Gutek said. “I lost a bunch of money. It was not good underwriting.”

Funds set up these days by lenders like Genesis Capital and Anchor Loans say they are more

transparent and conservative in their underwriting. He has put about 20 per cent of his liquid assets in a

fund managed by Broadmark Capital, an investment bank in Seattle that has $350 million in 200 short-

term loans.

“Since 2009, the fund hasn’t been tested, and I’m very, very aware of that,” Gutek said. “There is some

risk that real estate values will reset, but I feel good about the meaningful investment process.”

For sceptics, the quick turnaround on real estate speculation might evoke the go-go thinking that led to

the mortgage crisis just a decade ago. But investors say hard-money loans are more stable than a bank

mortgage because they are secured by properties at a lower loan-to-value ratio, a risk assessment used

by lenders. The average loan-to-value ratio in the industry is about 55 per cent, compared with 75-80

per cent for a typical mortgage.

This provides a substantial cushion to protect against a property falling in value. It also ensures that

developers do not walk away from the properties because they have put a substantial amount of their

own money into a project.

“When the loan matures, let’s say it’s 11 months, we want our borrower to be successful,” said Stephen

Pollack, the chief executive and president of Anchor Loans. If the developer runs into a problem, “we’ll

try to help them come up with a solution,” he said. “Maybe we’ll ask them to put a tenant in there and

take out a rental loan. But if the risk of the loan has changed and it’s at a higher leverage amount, we

want to do something to get us in a safer position.”



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In other words, the developer needs to put more money in, which Pollack said most of them agree to

because they want to continue their relationship with Anchor. And because the length of the loan is

shorter than a mortgage, the risk is smaller.

“There’s an asset bubble in stocks and a bond rally,” said Shannon L. Saccocia, managing director of

Boston Private Wealth. “Is this creating the opportunity for another bubble in real estate? The reality is

for us, given the short duration of the loans, they’re easy for us to monitor.

“They’re very different from securitisation.”

To make their portfolios more stable, some lenders diversify so they are not stuck in one market or

move into different types of real estate, like retail and land. “The benefit for a high net worth investor

coming in is, they’re instantly diversified,” said Joseph L. Schocken, president of Broadmark Capital.

“And to have that kind of diversified portfolio producing the yield we’ve produced — roughly 11 per cent

— is very unusual. What will get your attention is the stability.”

His firm runs two funds and is about to start a third. All three focus on booming cities like Atlanta,

Denver and Seattle. He said his goal was to make the book of loans as transparent as possible. The

average loan varies in size depending on the lender, ranging from several hundred thousand to $15

million.

At Rubicon Mortgage Lending, loans range from $800,000 to $1 million. Douglas C. Watson, a principal

at the firm, said that although Rubicon was focused on the San Francisco Bay Area, it had diversified

into retail, storage and land.

Hard-money lenders boast of the speed in which they finance loans, typically in less than a week,

compared with several months for a traditional bank. For the smaller builders and house flippers who

rely on these loans to do business, the speed with which these lenders can have the money ready

trumps the high interest rates they charge.

Jeff Walker, a principal at Square One Homes in Renton, Washington, which builds multi-family homes in

Seattle, said he had been using hard-money lenders for more than a decade. He has borrowed often

from Broadmark and tries to laugh off the rates he gets — usually around 12 per cent interest with 4

percentage points of fees for a one-year loan.

“That’s outrageous, but what are you going to do?”

It’s the company’s timeliness that matters to him when he needs to move quickly in the hot Seattle real

estate market.

“I can say, I’ll close on it within 48 hours, and I can get them to help me do it,” he said. “I can compete

against a cash buyer, even though I’m not a cash buyer.” But even Walker, who said he typically made

35-40 per cent return on his projects, is cautious that too much of a good thing can be, well, too much.

“Seattle is a booming market,” he said. “It’s going to come to an end at some point, but why not make

it while you can?”

Source: Gulf News

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DUBAI PROPERTY SHOW HEADS TO

MUMBAI Friday, October 27, 2017

Dubai Land Department is taking its Dubai Property Show to Mumbai for the third year running.

Indian citizens have long been the largest non-GCC buyers of Dubai property, the Land Department said

in a press statement.

Land Department Director General Sultan Butti Bin Mejren said, “Indians have long since understood the

worth of Dubai real estate as an investment haven as it gives them a very lucrative value for money.”

Asanga Silva, Deputy General Manager, Dubai Property Show, added, “Indians consider Dubai as their

second home, and for a good reason. In terms of population, they form the highest expat nationality in

the emirate, significantly contributing to the UAE’s economic growth with presence across all walks of

life.

“Tourism-wise, Indian tourists are now the largest source market for Dubai, driven by the fact that

many Indians have relatives and friends living in the emirate. Given the strong ties, it is only natural

that when it comes to investing their money overseas, Indians consider Dubai as a practical option.”

Land department figures show that in the 18 months between January 2016 and the end of June 2017,

Indian investors made 10,628 transactions worth more than Dh20.4 billion in Dubai property.

The Mumbai event will run from November 3 to November 5.

Source: Gulf News

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LULU GROUP TO INVEST DH1.7B IN

ANDHRA PRADESH Monday, October 23, 2017

Lulu Group will invest Dh1.7 billion in the construction of a shopping mall, a five-star hotel and a

convention center in the Indian state of Andhra Pradesh in Visakhapatnam, it announced on Monday.

"Andhra Pradesh being the newest state in India has a tremendous potential for investments in various

sectors especially in hospitality and retail. We've had many rounds of fruitful discussions with the

government of Andhra Pradesh and the speed with which they approved our project is commendable.

We are looking forward to the start of construction in February 2018," said MA Yousuf Ali, the chairman

of Lulu Group.

The announcement came as the Chief Minister of Andhra Pradesh, N Chandrababu Naidu, visited the

UAE to seek investments in various sectors of the southern Indian state to boost its economy.

Source: Gulf News

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GREEN FINANCE: THE ROLE CAPITAL

WILL PLAY IN TRANSFORMING THE

COUNTRY Wednesday, October 25, 2017

Without the injection of capital into environmentally friendly initiatives, projects and programmes, the

shift to a more sustainable economy will not be possible, according to a panel of experts speaking at the

World Green Economy Summit (WGES).

The session, which focused on green finance and the role the financial sector plays in the green

economic transformation, provided an overview of the role of existing financial institutions and financing

tools in accelerating the global transition to a sustainable green economy.

“As we all know there is no greater challenge than that of climate change. Five years ago, green

infrastructure projects were struggling for investment, but a lot has changed since then,” said Hajir

Naghdy, Group Head of Macquarie Capital, Asia & the Middle East.

In the last 10 years, the total world renewable energy capacity has increased from 989,000 megawatts

(MW) in 2007 to over 2 million MW in 2016.

Green bonds have been issued, which are estimated to be worth $81 billion (Dh297 billion), a significant

multiple of the $2 billion issued in 2012.

“Costs of production in the offshore wind industry have fallen dramatically to a point where the cost of

green energy is lower than conventional power in some markets,” James Grabert, Director of

Sustainable Development Mechanisms at the United Nations Framework on Climate Change (UNFCC),

said.

Awareness

Additionally, the investment community has become aware and educated in the renewables sector, said

Naghdy. Combined, these factors have enabled the industry to assess price rises sharply and set up

numerous global green funds, using pension funds and industrial finance loans.

The Middle East is playing an important role in green finance, according to Frank Beckers, Head of

Project Finance and Advisory, First Abu Dhabi Bank (FAB).

“The region not only supports large scale renewable projects, but is also supporting these initiatives by

financing projects. As the targets are high it is steep for the banking industry to support these projects

on its own. As such, support from other investors will be required as well,” Beckers said.

One of the major challenges surrounding the region is that the market and financial institutions are

often confused about green economy, the panel said.

Security

It is therefore necessary to align public-private partnerships (PPP), implement friendly regulations to

translate this standard in to the international markets, and establish capital markets to address issues of

long-term financing. Green bonds are another alternative which serves as a route to attract finance,

they said.

Governments play an important role in accelerating and maintaining the security of green finance, but

corporates also need to come up with an actual pathway to manage their assets, said Grabert.



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Ultimately, technology will play a large role in defining the future of green finance, the experts said.

“Financial technology [fintech] is governing the green economy and as we move into a more

decentralised energy system, there will be a broader acceptance of these systems,” concluded Naghdy.

Source: Gulf News

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HONG KONG PROPERTY MARKET TOO

RISKY, SAYS SAVILLS Friday, October 27, 2017

Hong Kong’s sky-high prices and low affordability rank it as one of the riskiest property markets for

Savills Investment Management, which is avoiding the city in favor of Japan and Australia.

“Hong Kong is highly, highly expensive,” Kiran Patel, who helps manage US$18 billion as chief

investment officer at Savills Investment, said in an interview in Singapore. “Even with the lowest cost of

capital, it is hard to justify today. We don’t think you can keep going up one year after another.”

Hong Kong’s home prices keep soaring higher, climbing 11 per cent since the start of the year to

continue a nine-year bull run. Commercial property prices in the city have also set a slew of records this

year. Li Ka-Shing’s CK Asset Holdings sold its 75 per cent holding in The Centre for HK$40.2bn

($5.15bn), a record for a Hong Kong office tower, according to reports earlier this month, while a

carpark in the Central district slated for redevelopment fetched HK$23.3bn earlier this year.

Hong Kong was ranked the least affordable city to buy a home, according to the UBS Global Real Estate

Bubble Index. Real incomes have virtually stagnated in Hong Kong for many years, so housing is less

affordable than in any other city surveyed and the average living space per person amounts to only 14

square metres, the UBS report said.

Savills last year sold out of a residential development joint venture in Hong Kong after cost overruns and

planning delays, Mr Patel said. The investment yielded an internal rate-of-return of just 7 per cent,

instead of the expected 20 per cent, he said.

While Singapore is more attractive than Hong Kong, both markets have tight supply and are very

volatile, Patel said. Still, he is scouting for offices in Singapore as leasing is picking up and the market

seems to be bottoming out. Savills sold a couple of Singapore office assets last year as the fund

investing in them was maturing, he said.

Japan remains Savills’ most attractive market, given tight property supply and cash flowing into the

system, Patel said. Savills also likes Australian property as the economy remains robust and offers

stable annuity income.

“We would like to grow in Asia, but there is an abundance of capital and a shortage of assets,” Patel

said. “We don’t want to shoot the lights out, we aren’t in the high end opportunistic-risk space. We are

looking more for annuity type income so we focus on developed markets like Japan and Australia and

some emerging markets like China.”

Source: Gulf News

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NEW CONTENDER IN LONDON'S £10M-

PLUS HOMES MARKET Monday, October 23, 2017

New luxury developments, especially super-prime family houses, have increased the supply and sales

levels of ultra-prime housing in London's St Johns Wood, driving the borough up the city's top-10

addresses list and ahead of Mayfair and Kensington, according to the London estate agent Aston Chase.

Hampstead, too, has gained ground for the same reasons and now tops Marleybone, Chelsea and

Westminster.

Using sales data from Lonres, Aston Chase sales records and local market intelligence, the firm looked at

ultra-prime residential sales across Inner London between January and October 2017 for properties

valued above both £10 million (Dh48.3m) and £15m.

Despite London’s ultra-prime residential market remaining “highly-discerning and challenging”, there

have been £727m - 50 sales - of ultra-prime deals during 2017 for homes valued above £10m. Of these

ultra-prime deals, 30 sales were for houses, the balance for super-luxury apartments.

Within the overall figures, there have been 15 ultra-prime deals for properties sold for over £15m -

£331m worth of sales in total. Seven were for super-prime houses, the balance were apartments and

penthouses, according to Aston Chase.

Belgravia is London’s top super-prime address for sales over £10m; with £151m worth of deals - seven

sales. This is followed by Knightsbridge with eight sales worth £114m.

St Johns Wood ranks in third place, with £88m worth of deals, or six sales, ahead of Mayfair with five

deals totalling £74m, Kensington with £73m of deals and six sales, while Hampstead came in next with

four sales totalling £54. Regent’s Park/Primrose Hill saw four deals worth with £47.

In a nod to its relatively new-found appeal to the wealthy, St Johns Wood is also home to a regular

supercar gathering.

In eighth place on the list comes Marylebone also with four deals, for a total of £37.5m, followed by

Chelsea with two deals worth £26.5m . Westminster came in 10th with two sales worth a total of

£20.2m.

For £15m-plus deals, the key addresses across London are Hamilton Terrace, Chesham Place, Carlyle

Square, Eaton Square, Grosvenor Square, Lancaster Gate, Charles Street, Victoria Road, Wilton

Crescent and Redington Road.

While for the rest of London for £10m-plus deals the ratio of sales between houses and apartments is

evenly balanced, in north-west London super-prime deals are dominated by the sale of large luxurious

new developments, new build or newly refurbished substantial family houses. In St Johns Wood,

Hampstead and Regent’s Park/Primrose Hill, all the £10m-plus deals have been for new or newly

refurbished homes, with five sales in excess of £15m.

"The impressive sales performance of St John’s Wood, Hampstead and Regent’s Park/Primrose Hill is

down to three factors," says Mark Pollack, the co-founding director of Aston Chase. "Firstly the quality

and supply of new super-prime houses and new developments has risen significantly over the past 18

months. Secondly the Inner London residential property market is now product-led rather than location-

led, with buyers prioritising newly built or refurbished homes with less emphasis on location.



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"Thirdly, north-west London provides super-prime buyers with more space and value compared to the

West End. Super-prime homes in St Johns Wood typically sell from £2,250 to £3,250 per square foott;

half the cost of buying in Mayfair or Belgravia.

“Historically there have been much higher levels of ultra-prime property stock in Mayfair, Chelsea,

Westminster and Kensington, so one would expect the level of £10m-plus deals to be higher in these

addresses. However, this year the north-west London locations of St Johns Wood and Hampstead have

performed disproportionately well, with St Johns Wood in particular outperforming Mayfair, Chelsea and

Kensington.”

Aston Chase said all of the £15m-plus deals it has been involved in so far this year have been to

families, typically a couple in their mid-40s to mid-50s, with two to three children. These super-prime

buyers have been a combination of British and international purchasers, but significantly none of them

have been from EU countries.

“Since the 2017 General Election Inner London residential sales have been very much driven by

overseas buyers and they prefer ‘turn key’ new homes rather than second-hand products, which is why

the premium market has become very development led," says Simon Deen, the director and head of

new homes at Aston Chase.


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With over 30 years of Middle East experience, Asteco’s Valuation & Advisory

Services

Team brings together a group of the Gulf’s leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain,

Dubai, Northern Emirates, 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

[email protected]

Jenny Weidling BA (Hons)

Manager – Research and Advisory

+971 4 403 7789

[email protected]

VALUATION & ADVISORY

Our professional advisory services are conducted

by suitably qualified personnel all of whom have

had extensive real estate experience within the

Middle East and internationally.

Our valuations are carried out in accordance with

the Royal Institution of Chartered Surveyors

(RICS) and International Valuation Standards

(IVS) and are undertaken by appropriately

qualified valuers with extensive local experience.

The Professional Services Asteco conducts

throughout the region include:

• Consultancy and Advisory Services

• Market Research

• Valuation Services

SALES

Asteco has established a large regional property

sales division with representatives based in UAE,

Saudi Arabia, Qatar and Jordan.

Our sales teams have extensive experience in the

negotiation and sale of a variety of assets.

LEASING

Asteco has been instrumental in the leasing of

many high-profile developments across the GCC.

ASSET MANAGEMENT

Asteco provides comprehensive asset

management services to all property owners,

whether a single unit (IPM) or a regional mixed

use portfolio. Our focus is on maximising value

for our Clients.

OWNER ASSOCIATION

Asteco has the experience, systems, procedures

and manuals in place to provide streamlined

comprehensive Association Management and

Consultancy Services to residential, commercial

and mixed use communities throughout the GCC

Region.

SALES MANAGEMENT

Our Sales Management services are

comprehensive and encompass everything

required for the successful completion and

handover of units to individual unit owners.

NEWS BRIEF 44 - Asteco Property Management...business and investment hub with the introduction of a...

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