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

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IN THE MIDDLE EAST FOR 30 YEARS

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ASSET MANAGEMENT SALES LEASING

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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

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DEFINING LANDSCAPES SINCE 1985

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ASSET MANAGEMENT SALES LEASING

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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 asce