NEWS BRIEF 52 - Asteco · 2017-12-24 · and propagate our environment…share insights and...

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

IN THE MIDDLE EAST FOR 30 YEARS

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 52 SUNDAY, 24 DECEMBER 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

SHIFTING LANDSCAPE FOR SUSTAINABLE BUILDING

THE INTRICACIES OF DESIGNING THAT PERFECT SPACE

IS THERE ROOM FOR MORE HOMES?

BUILDING CITIES THAT NURTURE

EGYPT TO LAUNCH BUILDING PROJECT IN SINAI — AL SISSI

CONSTRUCTION WORKS AT MAZAYA RESIDENCE AL MAWALEH IN FULL SWING

DUBAI

PROPERTY SELLERS IN DUBAI NEED TO OFFER MORE TO CLOSE DEALS

PALM JUMEIRAH RESIDENT’S HOLIDAY HOME SUCCESS STORY

LIVING IN THE NEST

FINDING A HOME AWAY FROM HOME

AZIZI TO CONTINUE ITS SPENDING SPREE

INSTITUTIONAL BUYERS WILL LIKE POST-VAT REALTY OPPORTUNITIES

REVEALED: WHERE RENTS ARE CHEAPEST, PRICIEST IN DUBAI

PALMA ENTERS DEALS WITH MORTGAGE PROVIDERS

OMNIYAT RAISES DH500M FOR NEW MIXED-USE PROJECT

CHINESE DEVELOPER IN NO RUSH TO LAUNCH OFF-PLAN SALES IN DUBAI

BUY PROPERTY IN DUBAI WITH CRYPTO-CURRENCY

THE UAE BREAKS GROUND ON ICONIC PAVILION AT EXPO 2020

IS A ONE-MONTH PENALTY FAIR FOR TERMINATING A RENTAL CONTRACT AFTER ONE WEEK?

DUBAI COURTS DISMISSES OGER ARBITRATION AGAINST DAMAN RECAP

DUBAI REALTY STILL A WINNER

LIMITLESS TO REPAY DEBT WORTH DH412.4 MILLION EARLY

DLD OPENS CENTRE TO IMPROVE CUSTOMER SERVICE

BUY A DUBAI HOME, GET A TESLA CAR FREE


DEFINING LANDSCAPES SINCE 1985



REAL ESTATE NEWS

ABU DHABI

ALDAR COMPLETES DH658M BUY OF INTERNATIONAL TOWER

YAS ISLAND SET TO RECEIVE ITS FIRST RESIDENTS

NORTHERN EMIRATES

AED 22 BILLION SHARJAH 2018 BUDGET ANNOUNCED

INDIGO TO LAUNCH TWO MORE SHARJAH ROUTES

INTERNATIONAL

WHERE NOT TO BUY PROPERTY

INDIAN DEVELOPER HDFC'S $1BN FUND, BACKED BY ABU DHABI REACHES FINANCIAL CLOSE

HONG KONG HOTEL OPERATOR STOCKS WILL ROCK IN 2018





SHIFTING LANDSCAPE FOR SUSTAINABLE

BUILDING Thursday, December 21, 2017

In the early 1990s, the global construction paradigm began to shift when the US started to integrate sustainability into

the building sector. Today the concept is no longer isolated to one country, region or culture. Green building, sustainable construction and sustainable building is not merely about doing less harm to the environment than

traditional construction. Instead, it is about optimising resources and being environmentally, socially and financially responsive throughout the entire building life cycle: from design, construction, operation, management, renovation and

deconstruction. All new construction, whether it is a school, business towers, recreational facility or industrial buildings,

from Dubai to Copenhagen to Detroit, can integrate and design efficient and socially responsible buildings, communities and cities.

As one of the fastest-growing cities in the world, the concept of sustainability should be integrated in all of the UAE’s community developments. Further solidifying our 2030 goal to be one of the happiest countries in the world, Dubai’s

2016 Municipality Report defines sustainability as “…how we should act, individually and together, to protect, preserve

and propagate our environment…share insights and technologies for future development, while reducing our burden on the planet.”

While the UAE government continues to standardised specifications and enact new policies, the inroads to sustainable building will remain long if it is not taken fervently by the private sector. These policies must be permanently adopted

as standard practice for developers, designers, investors, owners and tenants. However, achieving sustainable

objectives remains challenging in the real estate industry due to its emphasis on maximising returns of profits with little attention paid to the long-term social and environmental aspects. While sustainability has been proven to improve the

safety, health and well-being and eventual cost-saving, they are often overshadowed by present cots.

Together with population growth, urbanisation, transportation and industrial agriculture, creating sustainable

communities is crucial for the well-being of future generations. Developers have an ethical responsibility to integrate a life cycle engineering approach, which obliges a sustainable approach of all resources and elements.

However, for this to come to fruition, affordable resources and solutions must be provided to local developers.

Developers should be provided financial incentives. For example, in the US there are tax credits, reductions or waivers of permits, and a robust certification, which denotes high-performance green buildings and awards programme to

incentivise the market to grow in this direction.

Research already shows that investments in green buildings produce measurable financial value through increased

rental rates, asset values and higher tenant attraction. However, it is important to note the social impacts as well. The

health, comfort, productivity, overall satisfaction, happiness and increased sense of community has also been documented. As technology rapidly increases, the return on investment (ROI) is becoming more apparent. For example,

measuring, monitoring and automating a building’s energy systems can maximise the ROI by using smart technology to ensure equipment is only in use when needed and operates at peak efficiency. We can use the same data and correlate

it with air quality and occupants health. Investors should continue to explore green buildings as practical, profitable and a moral responsibility.

Education and knowledge sharing should be at the forefront of changing the mindset around sustainable construction

and renovations. We know that if consumers understand the value of green products they are more likely to favour and spend accordingly. Owners, end users and tenants should be educated about the financial, health, social and

environmental benefits related to their green residences. Multiple research has demonstrated that renters are willing to pay more to live in buildings with sustainable design features, from energy-saving appliances, to shared community

spaces, and to nearby amenities, with less dependence on driving, making for happier citizens, communities, and cities.





Mirroring broader global advancements in sustainable building, Dubai should continue to prioritise investment towards

green housing. Creating an ecosystem where developers, investors and end users share insights and technologies for future development is not only aligned with Dubai’s vision, but it is paramount for green market penetration. If end

users are willing to invest in the auxiliary benefits of these communities, then developers and investors should provide more options and further solidify the UAE’s commitment to happiness.

Source: Gulf News

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THE INTRICACIES OF DESIGNING THAT

PERFECT SPACE Wednesday, December 20, 2017

Very often people flip through magazines, browse through home stores or hire professional design firms to come up

with a suitable look for their built space. But interior design doesn’t exist in isolation.

The aesthetics of interior design is driven by the sole purpose of creating a harmonious look. It is this look that is

greatly influenced by factors ranging from geographical surroundings, popular materials available, personal choice, current design trends, and even nature.

Interior design isn’t about choosing pretty drapes and pairing the right cushions, instead it is a deep science, with an

often neglected psychological impact. The interior of any space has a considerable impact on your subconscious. The choices that you make when deciding how your home will look have a documented effect on your emotions and

perceptions.

The colour of the walls in your bedroom could be contributing to your anxiety, while your choice in the sitting room

couch could lead visitors to feel comfortable and make them feel at home. It’s a good idea to look behind the scenes,

so to speak, regarding your various design choices and understand what there deeper impact can be.

The colour component

It is a fact that colour is a main component of design and plays a pivotal role in how we experience the world around us and has a definitive effect on our moods. As you begin to conceptualise your home’s interior design, make sure to

use colours in ways that fit with the tone you want to create in the space.

For instance, red symbolises power and passion. It can be used to warm up spaces and make them feel more intimate; orange offers a jolt of energy and innovation. But too much can leave people feeling overwhelmed. Yellow is associated

with happiness, creation, and creativity. Blue perpetuates feelings of calm and freshness, while brown’s natural roots give it a relaxing touch.

White helps impart a sense of cleanliness and purity. It is great for defining a space, but use it along with other colours since too much can make a space sterile.

Often grounding and stabilising neutral hues such as cream and grey can also swing into boring territory if they’re not

accented with other cheerful colours. A simple and soothing beige living room can be given a rich feel with the help of upholstery in varying shades of purple or electric blue.

Another good tip is play with a combination of three colours, with the least intrusive shade reserved for walls, the second complimentary colour for the overall furnishings, and the third most dramatic hue used sparingly to highlight

and add accents.

Objects of desire

People often make the mistake of choosing objects to fill space, from furniture to paintings and other decorative arty

bric-a-brac. But it is important to understand that every object chosen to fill a space also serves to form a function, even if purely aesthetic. But, beyond that, these items also act as an expression of your personality.

People visiting your home tend to instinctively evaluate the interiors on these criteria — how functional is the home; value of the items in terms of is it worth the price; are the objects of emotional and sentimental or heritage value. And,

of course, the aesthetics of it all. When it comes to aesthetics, the proper furniture placement can make you feel

calmer and even happier. It all boils down to symmetry, which can change the atmosphere of your home, because as far as interiors are concerned we see rooms as a whole before we can focus on the individual design elements

themselves. It is in our nature to instinctively love balanced designs because they keep the amount of information that our brains need to process to a minimum. By picking up on a repeating a pattern, we are able to process the individual





elements faster. Since we are easily able to understand symmetrical spaces, we often think of them as more

aesthetically pleasing.

Perception of space

In the world of interior design, space is an actuality as well as perception, and while it is easy to gauge and perceive physical space, creating the illusion of one is far trickier. Interior designers use a concept called perception of space to

make home’s appear more spacious and to make sure that rooms are as user-friendly as possible.

This involves choosing furniture that is scaled to size and slimmer, placing a large mirror on the back wall, and creating depth with wall hangings.

The biggest space creator is a clutter-free room, with high ceilings and the absence of walls that restrict the eye movement. Another way to create the illusion of space is to bring the outdoors in, by either creating French windows or

having a glass fronted balcony that again does not restrict the outdoor view.

Thick curtains or blackout shades also tend to make the room look smaller, go for lighter window treatments such as

sheers and lace.

The writer is Managing Director of Rectangle Interiors.

Source: Gulf News

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IS THERE ROOM FOR MORE HOMES? Wednesday, December 20, 2017

Market estimates as to how many units will be handed over vary, but analysts agree that the key questions are:

location, segment and sentiment. Core areas with sufficient demand for supply that is in tune with the demand will

continue to see growth. Whereas demand will peak during the six months of the World Expo 2020, in the long term the need for staff and worker accommodation will dominate.

Calculating supply based on project announcements, Manika Dhama, senior consultant in the strategic consulting and research department at Cavendish Maxwell, tells PW there is a lot deliveries expected. “According to the Property

Monitor supply tracker, there are more than 100,000 units scheduled for delivery over the 2018-20 period,” says Dhama. The figure roughly tallies with other estimates. Haider Tuaima, head of real estate research at ValuStrat, tells

PW, “Our current estimate stands at 100,000 apartments and 30,000 villas and town houses scheduled for handover

from 2017-20.”

However, analysts factor in the materialisation rate — comparing actual handovers in the past year to planned

completion dates — to arrive at a more realistic estimate. David Godchaux, CEO of Core-Savills, tells PW, “While there are many inflated numbers doing the rounds in the market, our conservative forecast is at 70,000 units due to the

historic mismatch between announced and delivered volumes.”

Dhama says that the number may even be lower. “Given the materialisation rate over the last 2-3 years, with 12,000-15,000 being handed over each year, the handovers over the next two years could also be within this range, thus

totalling around 40,000–50,000 units between 2018 and 2020,” she says.

Meanwhile, the bigger question is how the supply will be absorbed. Analysts say the nature of demand generated by

the Expo will be a key factor. However, the biggest demand in the short term is expected from the influx of tourists.

“The biggest demand will come from visitors to the event and beyond; this is why we are seeing an exponential number of hotels being built,” Tauima says.

Residential demand during the Expo is expected to be primarily for accommodation for visitors during the six-month event as well as in months leading up to it, says Dhama, and this will include hotels, hotel apartments and various

lodging facilities. In the medium and long term, economic activity is expected to peak, buoyed by business and infrastructure growth brought in by the big event, but it may not create an immediate impact on real estate. Godchaux

says, “We believe that the Expo as an event in itself is not going to drive up the number of homebuyers significantly.

However, it will more likely be a catalyst for overall uptick in economic indicators that will trigger positive effects on real estate.”

Economic growth is closely tied to generation of jobs long after the event is over. As such, Dhama says the Expo’s impact on residential demand will depend on the ability of the event to generate long-term jobs. “Thus, the impact of

the Expo on white-collar workforce will be the key driver of residential demand and this parameter will determine the

demand-supply gap,” says Dhama.

It’s crucial to create supply for the segments that are likely to see demand, although a huge chunk of it will not be

coming from the higher end of the income bracket. “In terms of residential demand we expect a high percentage of demand would come from blue-collar workers and staff earning less than Dh5,000 per month,” says Tuaima. “These

people would require adequate supply of labour and staff accommodations. This is followed by engineers, project managers, technical, marketing, financial, HR, IT and others required to help build the project and later work in it.”

Addressing fears of oversupply, Godchaux says that it is not necessarily justified. “There certainly is widespread fear of

oversupply in the market, as evidenced by the results of our last survey by a large majority of respondents,” he says. “Whether the fear is justified or not is not the only important question, as to a certain degree there is a risk that the

fear may become self-fulfilling, with resulting negative pressure on demand from investors, and resulting relative oversupply across many market segments.” One of the ways to counter this, says Godchaux, is by “educating the

market on risks and opportunities, by refusing oversupply blanket statements”. However, he adds that the supply and

demand absorption will focus largely on specific segments.





“I do not believe the overall market to be generally oversupplied, but there are worries to be had in a few segments.

Equally importantly, assessing demand from end users rather than just investors is a critical part of the issue,” says Godchaux. “Prime and upper mid-market segments in core locations should see robust price levels in the mid to long

term, with limited absorption issues. On the contrary, driven by high yield levels, low entry price stock is well absorbed by robust investor demand in the short term, aided by accommodating payment plans. But a lot of the inexpensive

units launched and acquired these days will be handed over in outer areas at the same time, and could face absorption

issues on the rental market if end-user demand is insufficient to absorb them in a short period of time. Resulting falling rental levels and yields could drive some of the initial investors away from the affordable segment of the market over

the next few years .The current pace of entry-level product launch may not be sustainable in the medium term.”

For Tuaima, the larger issue is not delivering to the right segments. “The bigger concern is the supply-demand

mismatch,” he says. “This basically translates into too many high-end properties and not enough mid-affordable options to meet the increasing demand. Developers are addressing this problem, but more needs to be done.”

Post-Expo momentum

However, developers are also looking beyond the Expo as they deliver new supply into the market. “We expect that most of the lower-end jobs would no longer be required after the event, but more importantly, we also expect a longer

term ‘legacy benefit’ of Expo, part of which would market Dubai’s various offerings such as business, trade, hospitality, and tourism in a much wider global scale, resulting in sustained growth in demand for commercial and residential

property,” says Tauima.

Dubai is also learning from various cities that have recently hosted large events, such as Brazil and London, which hosted the last two Olympics. Godchaux says, “With construction activity gathering pace and a growing number of

contracts being awarded to prominent players in the construction industry for the Expo, Dubai is on track to build iconic infrastructure to showcase the UAE on the global stage during the Expo. Optimising built infrastructure for the event

with a sustainable legacy plan after the event becomes imperative and we expect the District 2020 development to address this issue.” District 2020, the legacy development initiative for the Expo, is giving the industry more reason to

be optimistic. Tuaima says, “We think that Dubai is very unique in its demographics and economic status when

compared to other cities. Given the safe haven that Dubai is, demand will continue to grow; Dubai will succeed in creating a new city, namely Dubai South, catering to a new generation of demand that would provide a much-needed

balance with the city’s current northern areas. And like any landmark event, re-purposing the Expo site into the recently announced District 2020 provides a clear vision to the legacy of this major event: new office buildings, new convention

centre, new attractions and a Metro line that connects all this to the airport and the rest of Dubai.”

Staggered delivery

While developers stagger deliveries to maintain stability in prices, holding back supply and releasing it only in time for

the Expo can, in fact, be counter-productive, analysts say. “We need to remember that more than half of the projects that were supposed to be delivered in 2015 and 2016 were delayed, so this is one of the reasons why we are in a

situation where there will be a sudden glut of supply coming our way during the next three years,” says Tuaima. “This

temporary glut impacts rents and capital values in some pockets of Dubai. Bearing this in mind and understanding that we now have a population that’s growing at an accelerated rate as compared to the past five years, a third of whom

live in the northern emirates, and many of whom would consider the move to Dubai when feasible, we expect that oversupply would only be a short-term issue and this is assuming that all projects are delivered on time.”

The strategy is not useful when delivery needs to be timed to an event, as Godchaux says, “Historically, developers in Dubai have been using the strategy of phasing their deliveries as a measure to match supply and demand levels as

delay penalties aren’t always enforced. We expect the same spillover of deliveries to continue over the next two years.

However, we see a bottleneck forming during the end of 2019 early 2020 as many developers would want to deliver in time to capitalise on peak demand levels caused by the Expo. With this timeline, any further phasing or failing to deliver

in the run-up to 2020 may be metaphorically considered by many as missing the bus. “This sentiment is expected to create a glut in the market and we suggest developers to carefully consider their target audience, unit mix and limit

supply volumes to avoid this scenario.”

Source: Gulf News

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BUILDING CITIES THAT NURTURE Wednesday, December 20, 2017

When we talk about the cities of the future it’s often a tongue-in-cheek dinner table scenario with more than a hint of

sci-fi hypothesising. The advent of 3D printing and increasingly sophisticated building information modelling (BIM)

software exemplify technological advancement in the built environment, but innovation in designing sustainable communities that also soothe our souls is just as important.

According to Baharash Bagherian, director of Baharash Architecture, lead designer for phase two of Dubai’s Sustainable City community, benchmark models for future cities are yet to emerge.

For Andrew Whalley, deputy chairman of Grimshaw, the architectural practice behind the World Expo 2020’s Sustainability Pavilion, the whole issue of sustainable cities is at the centre of our future.

“We are seeing massive global population growth, which, according to the latest UN figures, will increase by a further

30 per cent in just over a generation, effectively doubling the current size of our cities,” notes Whalley.

With more than half of the world’s population living in cities, Whalley is looking beyond bricks and mortar issues. He

says: “The real goal, mentally, is to develop environments that address social wellbeing and health and this is all set against the ever-increasing speed of evolutionary technology and impact of IT on our cities.”

Innovation 101

When it comes to design tools, technology has “raced ahead” according to Whalley, but it’s not the same when it comes to building technology. “Cities are mostly built in terms of buildings and infrastructure, and one part of the world

that’s moved at an absolutely glacial pace is building technology — the technological evolution of architecture is way behind.”

While Bagherian also highlights the role technology innovation has to play in shaping improved city models through

design analysis, energy performance optimisation and intelligent project cycle management with BIM systems, he notes that a holistic approach to innovation is required.

“This means designing sustainable projects that address all three key pillars of sustainability: social, economic and environmental,” says Bagherian. “We believe that great architecture is more than buildings; it’s about creating resilient

and inclusive destinations that make people feel healthy to live in, inspired to work in and want to visit.”

At the heart of this is connectivity, an area that has seen Grimshaw work on some of the world’s most high-profile

transportation projects, including London’s under-development Crossrail line and Manhattan’s Fulton Centre transit

complex.

Says Whalley: “The fundamental backbone of a city is its transportation system and our ability to be mobile in a

pleasant and enjoyable way. If you look at Los Angeles, previous generations were wedded to their cars and only recently has there been investment into the new metro system and the younger generation has happily switched

across.”

The other major innovation consideration is underpinned by our relationship with nature, as Whalley explains: “We are still wired in a way that goes back millennia, where having a relationship with nature and the outdoors is critical to our

health and wellbeing, and research supports this so parks and recreational amenities are vital.”

Nature lessons

Mother Nature is an educator — and Whalley cites two relevant examples from the Grimshaw sustainability stable to prove this: the Patricia and Phillip Frost Museum of Science in Miami and Melbourne’s Southern Cross Station.

For the former, the firm replaced conventional air-conditioning systems with a design that uses sea breezes to help cool

the series of four “open-arm stance” buildings and bring nature from the outside in. In Melbourne, the Grimshaw team also followed a natural ventilation approach, creating a sand dune-reminiscent roof for the station that makes the most

of the city’s strong prevailing winds to respond to the structure’s internal need for diesel extraction and ambient cooling.





“In this region it’s not energy that’s the big issue, it’s water. There are things we are doing now that could quite easily

be adopted for the next generation of buildings in Dubai that would be far more efficient,” remarks Whalley. “We’ve all seen the water drops that a dehumidifying air-conditioning unit leaches. This could be captured, recycled and reused to

run grey water systems, which would be far more efficient and cost-effective than using expensive potable water.”

For Bagherian, intelligent sensors that control indoor lighting and temperature, and are adjustable based on exterior

weather and light conditions as well as variables such as the number of occupants in a room, will be a fixture of future

cities.

He says: “Embedding sensors in buildings to detect motion, temperature, noise, moisture, fire, smoke, etc. provides

real-time data. Once these sensors are connected to the Internet of Things, buildings can communicate real-time data to various departments within the city.

“For example, waste can be collected upon receiving automatic notification of full receptacles and user data can be analysed to provide an estimate of the day and time for future waste collections.”

Trending technology

The Grimshaw team recently showcased a completely new under-development technology for the production of 100 per cent recycled glass house panels that are extremely strong, fire resistant and highly insulated.

Says Whalley: “What’s starting to happen in housing is a much greater use of prefabrication. I think the only place it’s been done successfully to date is in Japan, but we are now seeing Europe and, a little further behind, the US taking this

on board.”

Bagherian adds: “Modular construction allows for shorter construction times, more consistent quality and more economic savings. Technology is also helping modular construction through parametric modelling, which defines

relationships among building elements and this makes it possible to change one aspect and instantly understand its impact on the overall design. Thus technology is fuelling a more intelligent workflow in the development of sustainable

cities.”

He also flags 3D printing as an opportunity driver, with the ability to also provide more flexibility in the shape of

buildings. “For example, curvilinear structures can be achieved without having to worry about the extra costs of

creating formworks.”

Paving the way

Addressing the challenges and opportunities facing governments, urban planners, architects and city stakeholders everywhere, Bagherian raises the question of designing environments to fit the needs of a rapidly changing world.

“A major challenge is designing projects that are fit for our needs for the next 30-50 years. How can we provide a

holistic solution to development while also future proofing them at the same time? This means making sure that they are resilient. A resilient city should have the capacity to maintain the same level of quality of life should there be any

future shocks and stresses to its environment. Most of our cities however, are far from resilient,” he says.

Baharash Architecture is also supporting the advancement of knowledge of affordable sustainable practices, and

launched the Knowledge Hub for Sustainable Development this year to explore new solutions and strategies to facilitate

progress on sustainable thinking in the Middle East and North Africa.

“In terms of where we are on the journey, we are at the very beginning, and this has to be a commitment to and for

future generations,” says Whalley.

Source: Gulf News

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EGYPT TO LAUNCH BUILDING PROJECT IN

SINAI — AL SISSI Saturday, December 23, 2017

President Abdul Fattah Al Sissi said on Saturday Egypt will in the next two to three years embark on a $5.60 billion

construction project in the Sinai Peninsula whose north has been gripped by an Islamist insurgency.

While coast of the south of the peninsula is peppered with Red Sea tourist resorts, North Sinai province is

underdeveloped and lacks basic infrastructure and job opportunities.

Security forces have battled Islamist militants in the mainly desert region, stretching from the Suez Canal eastward to

the Gaza Strip and Israel, since 2013. Militants have killed hundreds of police and soldiers.

Al Sissi ordered armed forces to end the insurgency within three months after an attack on a mosque in North Sinai last month killed more than 300 people. It was the worst militant attack in Egypt’s modern history.

“We have entrusted the ministry of housing and the engineering authority with a national project of comprehensive urban planning,” Al Sissi said at a ceremony to inaugurate a development project in the Suez Canal city of Ismailia.

The president said the project would cost 100 billion Egyptian pounds and that it would be carried out whether he

remained in power or not.

He did not provide a start date, sources of funding or specific details of what would be built under the project.

Source: Gulf News

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CONSTRUCTION WORKS AT MAZAYA

RESIDENCE AL MAWALEH IN FULL SWING Wednesday, December 20, 2017

Mazaya Real Estate Development, the developer of Mazaya Residence Al Mawaleh, one of the top integrated & mixed-

use projects in Al Seeb area in the heart of Muscat, has announced that 59 per cent work on project's first phase (Zone 1) has been completed and its units are expected to be delivered in June 2018.

In addition, foundation laying and other necessary works for the second phase (Zone 2) are going on at a rapid pace and projected to be completed in early 2019.

Al Mazaya also announced a cash discount of OMR5,000 in addition to 30 per cent discount coupons from Home Centre

in the project as the year-end offer.

Sheikh Mubarak Al Sabah, Executive Director of Marketing and Sales, said: "At Al Mazaya, we are keen to promote

Mazaya Residence in Muscat as a living model to be copied for its quality, standard and professional work which has been our hallmark in all the projects launched by Al Mazaya on the various markets where we operate. We never

compromise on quality and standards and our commitment to deliver final products on time."

"The construction and development work of all phases of Mazaya Residence is going on as per the plan."

Al Sabah added: "As part of our efforts to give customers an idea of what they are going to buy as their dream home,

the company has prepared a fully furnished model apartment on the project site, in conjunction with Home Centre, the leading furniture brand in the GCC region. The apartment provides home buyers a first-hand experience in addition to

the look and feels in terms of spaces available in the flat and furnishing standards that can be followed. The idea is to

give property buyers a comprehensive picture of the apartments that will be delivered upon the completion of the project."

He highlighted that the project was very well accepted by the property buyers as 50 apartments have been sold out of the total 120 units of different sizes in addition to 28 shops in the first phase of the project. The latest design standards

are being followed in terms of optimum utilisation of spaces, with one-bedroom apartments ranging between 68 and 74 square metres, 2-bedroom apartments between 99 and 110 square metres and 3-bedroom flats from 142 to 154

square metres.

"These options meet the needs of all segments including end-users and investors. Particularly, we have taken into consideration the needs of Omani citizens in addition to Gulf nationals. It's important to mention that our products

provide an excellent opportunity for investment due to significant returns." Al Sabah announced the end-of-year offers for the property buyers in the project that include cash discounts of up to OMR5,000 on residential apartments and 30

per cent discount coupons from Home Centre on all purchases. Al Mazaya launched a large-scale marketing campaign

in Oman for the dynamic project which meets the needs of the market and allows various segments to own affordable and competitive housing units. It also caters to the aspirations of the Omani real estate market, which enjoys

economic, investment and tourism potential that distinguishes it from other markets in the region and heralds a promising and bright future for the country.

Al Mazaya Holding has set up a sales centre within the project area, which houses the project's outline templates and finishing material samples to allow buyers and visitors to recognise the top standards and specifications being followed

across the project.

He added that Al Mazaya Holding seeks to promote sales and attract customers for the first phase of Mazaya Residence in order to enhance the company's investment portfolios in Oman, and consequently stimulate the development of the

project's next stages, which will ultimately help the company forge ahead with new developments in the near future.

Source: The National

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PROPERTY SELLERS IN DUBAI NEED TO

OFFER MORE TO CLOSE DEALS Wednesday, December 20, 2017

Property sellers in Dubai have a fight on their hands if they are trying to find buyers now. Because these days,

developers with off-plan sales are coming up with more competitive pricing and incentives that individual sellers cannot even think of matching.

This explains why off-plan sales had one of its best runs during 2017 while secondary market transactions continue to lag at some distance. There are also an increasing number of cases where individual sellers have had to pull out their

listed properties because of a lack of demand in the secondary space. Or because they were getting buyer offers that

were nowhere near their asking prices.

These sellers can only blame developers and their off-plan programmes for their plight. “Developer financing with post-

handover payment plans is effectively subsidising off-plan sales and propping up the volumes,” said Jesse Downs, Managing Director at Phidar Advisory. “These are available to almost anyone and without the paperwork or delay. If

these payment plans continue to be offered, this will likely prop up the primary market relative to the secondary.”

So, is there no option for individual sellers? Or do they need to cut their asking prices even further to get potential buyers even remotely interested?

“The only way to compete is through reducing price ... or improving and differentiating the product quality — for example, capital improvements through renovation,” said Downs. “But it would be difficult for sellers to offer incentives

to directly attract buyers from the primary to the secondary market because the appeal is two-fold — the payment plan

and the newness of the product. And sub-optimal maintenance is leading to depreciation of completed assets.”

Refurbishment

According to Downs, better sense dictates that sellers should spend on refurbishments, typically involving the kitchen or bathrooms “because these are the more complex and value-add spaces of a home”.

“The other rooms are often empty boxes ... so refurbishment is usually a coat of paint. Flooring is usually ceramic, porcelain tile or wood, which if properly maintained has a 25-50 year life cycle depending on the specification.

“In other markets, vinyl and carpet may be used, which has a far shorter life cycle.”

But sellers need to also keep mind other factors. “Sometimes, the challenges can’t be mitigated because of congestion-based infrastructure limitations in the area,” Downs added. “Depending on the situation, it may be sensible to simply

reduce the asking price and exit.”

As such, since November, property sales in Dubai have gone through a bit of softening. Last month’s apartment sales

volumes are down 32 per cent on a year-on-year basis. And between September and November, the volumes are lower

by 22 per cent from the year ago total, according to Phidar data.

The property consultancy reckons that prices too will remain under pressure, citing slow job growth and “over-building”

in the mid- to high-end residential space. “Since September, prices for completed properties — even in well-established communities — have declined,” said Downs. “We think this will continue through 2018.”

Factbox: Home rents to remain under pressure

The first rental declines happened at the top end of Dubai’s residential market. And now it is starting to spread across

less expensive rental categories as well.

“Rents will likely continue to decline on the back of new handovers and weak demand,” said Jesse Downs of Phidar. “Especially for housing built for the mid-high to high (aimed at households earning about Dh25,000 or more per

month). The majority of products is targeting this demographic.





“Rents will continue to decline at a gradual but steady pace until we see evidence of job growth or a significant

slowdown in stock expansion. The problem is not the new handovers because it is growing at a moderate pace. The problem stems from the high rental inflation in 2012-14 — the market is now correcting this because the rents reached

were simply not sustainable over a long period.”

Source: Gulf News

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PALM JUMEIRAH RESIDENT’S HOLIDAY

HOME SUCCESS STORY Wednesday, December 20, 2017

Recent market research from Chesterton Mena revealed a staggering 421 per cent increase in Airbnb property revenues

for Dubai listings between August 2015 and August 2017 reaching $3.3billion (Dh12.11 billion), and with the choice of accommodation options growing threefold over the same period to 3,249 listings, mi casa is definitely su casa (my

house is your house).

Officially given the operational green light in May 2016 by Dubai’s Department of Tourism and Commerce Marketing

(DTCM), Airbnb now offers rental options from a cozy dorm bed with breakfast for just Dh75 per night to a palatial six-

bedroom Palm Jumeirah villa for Dh5,000 per night.

Home comforts

Leigh-Ann Steele, an interior designer and owner of bespoke baby line company, Butterscotch, hasn’t looked back since putting her one-bedroom Palm Jumeirah Shoreline apartment onto the holiday rental market in December 2015.

She previously renovated and sold a similar one-bedroom unit to move to a larger home, but decided to reinvest the

profit from the sale in a second apartment targeting the tourist market.

“We completely remodelled and renovated the apartment, so when you walk in you wouldn’t recognise it as an original

Shoreline apartment. We took walls down, redid the flooring, put in a brand new kitchen and bathrooms and even retiled the balcony,” she says.

While the monochrome-styled apartment clearly fits the upmarket image of a Palm Jumeirah holiday pad, she was

careful not to go completely overboard when it came to budget. “For a holiday home you don’t need to have the latest Miele washing machine or wooden flooring,” says Steele. “For example, we put in luxury vinyl tile flooring in an

authentic wood-look finish, which is very hardwearing, and the glasses are from Ikea. For linen, I always use really high-quality, hotel-grade products as this is something that guests definitely notice. The only issue I have is that the

laundries here tend to use really strong cleaning chemicals, so I have to replace things fairly often.”

It’s this level of investment and attention to detail, plus a beach club bonus, that Steele believes has driven consistent

demand for the apartment, with an average annual occupancy of around 80 per cent.

Cost of renting

Post-renovation but before debuting the property online, Steele’s first step was to register the apartment as a holiday

home on the DTCM online permitting system, and pay the requisite fees (see guide). And then there are the Airbnb fees: the host is charged 3-5 per cent service fee for every completed booking. In addition, she needed to arrange for

home contents insurance and purchase a fire extinguisher and fire blanket in line with health and safety requirements.

“Airbnb offers home insurance, which covers the owner for accidental damage up to a certain threshold, and we also had our own building and contents insurance.”

The apartment currently rents for around Dh900 per night, which includes the apartment servicing fee, and Leigh-Ann puts cleaning and laundry costs at Dh400 per guest turnaround (regardless of length of stay). The average length of

stay she says is five to seven nights, and if guests want daily or mid-week full cleaning, there is an additional charge.

“We also had a beach closure for the last nine months and had to pay Dh200 per day for our guests to use the

adjacent beach, which was an unexpected cost,” she adds.

The Airbnb set-up is extremely flexible when it comes to rate setting. “You can play around with the pricing, so if you see that bookings are low next month, you can adjust the price; and this all happens at the click of a button.”

All about the ratings





The final step in the process was to create the apartment listing, which took just two hours from concept to clickable

booking. “It was the easiest thing ever. Once I’d taken pictures of the apartment on my iPhone, we sat over coffee to write the description then uploaded everything, and we were live.”

While location is a natural selling point, review ratings are key to attracting new guests. “As soon as we started getting positive reviews and comments, our occupancy rate shot up. Within the first three months we were running at an

average of 85 per cent,” she says. “The slow summer months can obviously hurt us, but both years we’ve had longer

term lets, which has covered us financially.”

Guests check in to find a welcome pack containing room temperature and chilled water, tea, coffee, milk (low and full

fat), breakfast cereal and fruit, a small supply of dishwasher and washing machine tablets and other household basics, and the Dubai and local area guide.

“This is extremely well received and the more information you can provide a guest with, especially a first-time visitor, the better your reviews,” she notes. “If the guest provides us with a shopping list, we can also arrange for the fridge

and cupboards to be stocked with their preferred products prior to arrival, as a supplementary paid service.”

Steele’s guestbook spans the world with visitors from across Europe and the US to Russia, Saudi Arabia and Uganda.

Extra care

In the two years since she put the apartment on Airbnb, Steele has yet to recount a hospitality horror story, but is very hands-on when it comes to managing the process from booking to departure.

“I make sure that I check the apartment after every clean and guest turnaround — you have to. And we have a strict

no party rule in place, although you never know what could happen.”

Source: Gulf News

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LIVING IN THE NEST Wednesday, December 20, 2017

Waking up to birds chirping is a lifestyle choice for those who live in Al Barari; the villas at The Nest offer the newest

option to do just that and more. Set in the lush greenery of this large development, 55 four-bedroom villas come in two

different sizes and layouts ranging from 6,340-7,470 sq ft and plots measuring 10,600-13,300 sq ft.

But never mind the generous sizes, the design inside and out is what stands out.

The contemporary style villas feel cosy, despite the space and open-air layout. High ceilings and corresponding windows from top to bottom allow for natural light to flood the interior. A gallery, rather than an enclosed hallway,

leads into a multifunction room and three en-suite bedrooms, including the master bedroom, surrounded by terraces — an open invitation for breakfast outside.

The villas have plenty of natural light. “It’s all about bringing the outdoor in and connecting people back to nature,”

reasons Nadia Zaal, CEO of Al Barari.

This is a fact appreciated by Finnish resident Hanna Karonen, who lives with her family in The Nest.

“The Nest villas are modern and there are lots of natural light with big, full-height windows,” says Karonen, an interior designer.

The fourth bedroom, also en-suite, is located on the ground floor, along with an open-plan living area and an elegant

kitchen dressed with white quartz stone tops and quality cabinets and appliances.

Looking into the landscaped garden, the infinity-edged pool immediately catches one’s attention, sparkling in turquoise,

complete with outdoor shower and a barbecue area — it is the perfect setting to just chill out.

Apart from its luxurious simplicity, the designers looked at functionality. The driver’s and maid’s quarters, with kitchen

and plenty of light, adjoin a spacious two-car garage.

The homes and the community’s lifestyle were designed with young families and their children in mind, explains Zaal.

“Creating a strong sense of community is at the heart of everything we do,” says Zaal. “A community where you can

live, feel and think differently. A community our residents look forward to coming home to every day. Where they can thrive and their loved ones can blossom.”

She adds: “Residents can stroll through our beautiful gardens, they can walk their dogs and let their kids play in dedicated playgrounds. It feels so peaceful.”

As a mother of two, Karonen confirms the sentiment. “The kids are happy to go biking around the lovely and safe Al

Barari area.”

Karonen moved to Al Barari after living for eight years on the Palm Jumeirah. “I love living in The Nest. After staying on

the beach, it was a nice change to move somewhere green and into a more zen and relaxed atmosphere.”

Indeed, her family has taken such a strong shine to their new lifestyle that they have started pondering whether to

make their ‘nest’ more permanent. “We are renting, but we are seriously thinking of buying in this area,” she says. The

homes start at Dh9.9 million and go up to Dh16 million depending on plot size and location.

However, either one of the two tastefully furnished and decorated show homes would set one back about Dh14 million.

The developer has agreements with several large banks for both resident or non-resident buyers to obtain mortgage.

“By end of January all homes will be completed. Residents have already started moving in. It’s a finished product and

we only have a few left for sale,” says Zaal.

The neighbourhood

The homes are a delight, but maybe the best part is the forest-like surroundings — peaceful, yet close enough to get

around Dubai, with the Burj Khalifa glistening in the distance.





“Al Barari is truly differentiated from other communities in Dubai. After driving on the highway surrounded by sand,

bridges and one high-rise tower after another, the moment you enter the community, you feel you’re in another city,” describes Zaal.

“That’s why Al Barari is considered the green heart of Dubai. Most people, regardless of background, long to be in nature. This is why our community is diverse, with residents from European, Asian and Middle Eastern backgrounds.”

Living in such vast greenery may raise questions about sustainability — a subject very closely associated with the

developer, the Zaal family, which has ensured that the greenery is sustainable by adopting various conservation techniques, including the use of treated and recycled water within Al Barari. The Nest also features solar panels for the

water heater, smart control irrigation and other environmental pluses.

Residents can also avail of the other existing facilities at Al Barari, including the Body Language health club with tennis

courts, the Heart & Soul spa and wellness centre, as well as The Farm restaurant.

“We love, and enjoy the good food of The Farm,” says Karonen.

The future

The Nest borders The Reserve, where eight plots are still available to build one’s own home, and by mid of next year the Seventh Heaven apartments, including its retail offering, as well as the canopy Ashjar apartments, will come online.

“We are currently completing The Nest villas and expect to deliver Seventh Heaven and Ashjar by mid of next year,” details Zaal. “Ashjar and Seventh Heaven are currently at 80 per cent completion.

“We are also working on creating a truly exciting retail experience at Seventh Heaven for the whole community. The

offering will feature a kids’ zone, a wellness and beauty zone, a retail and services zone and a host of exciting food and beverage outlets.”

Al Barari’s second phase, including a hotel resort, medical facilities, an assisted living unit, school and more themed gardens, is expected to begin after the under-construction projects are handed over.

“The design of phase two has already been concluded and we are now moving aggressively on bringing this design to life,” says Zaal.

“Our overriding vision is to build a truly unique community that is beyond bricks and mortar. A community with a way

of life that is about connection, nature and the joy of living.”

Source: Gulf News

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FINDING A HOME AWAY FROM HOME Wednesday, December 20, 2017

Greenery, space and a sense of community were Paria Ghorshi’s non-negotiables when looking to rent a new family

home in Dubai, and the Norwegian-Iranian mum of one, and owner of mobile hairstyling service Blow Out and Go,

found her zen in the city’s emerging hinterland.

She says, “When I visited Jumeirah Golf Estates for the first time, I fell in love immediately. The homes are large and

beautiful, and the finishing is great.

“I also love the fact that it is a peaceful, green and welcoming community yet it’s only 20 minutes away by car from

Marina, Palm Jumeirah, Downtown Dubai and Jumeirah.”

Despite its “semi-rural” landscaping, the onsite facilities are decidedly five-star. “We also have access to the clubhouse,

which has an amazing pool, club facilities, sports bar and fantastic fine dining restaurant,” she enthuses. The decision

to move to an emerging outlying community was as much about a “feeling” as the bricks and mortar aspect, as Ghorshi explains, “I looked at villas all over Dubai and the area that I felt the most at home in was in Jumeirah Golf Estates.

“I initially rented a four-bedroom villa in one of its four districts and, after a few years of living there, I felt we needed a bigger space so we moved two districts down from where we were originally to The Sundials sub-development

overlooking the Earth Course, and couldn’t be happier.”

Her key criteria when scoping out prospective properties was to find a home that reminded her of Europe. “Having grown up in Norway, I do miss the greenery. I wanted a warm community; somewhere child-friendly with everything

within arm’s reach,” she says. “In addition to the clubhouse and all the activities on offer, living here really does give you that home-away-from-home feeling,” she continues.

The ability to “fall out of bed and onto a world-class golf course” is one of the lifestyle highlights for Ghorshi and she

can’t think of any downsides to the development, although “a good school would complete this amazing community.”

While the internal move was relatively plain sailing, she has a word of advice for prospective renters. “When we lived in

Whispering Pines, a Jumeirah Golf Estates sub-development, we had maintenance included, which was very useful.

“It wasn’t included when we moved and my advice to new residents would be to negotiate this part of the contract, as

it makes the move into a new home a lot more seamless.”

An interior design hobbyist, bringing her own stylish touch to bear was the finishing touch,. As Ghorshi explains, “I’d

previously decorated a few properties within the community and with my villa I repainted it and brought in new

furnishings. Two of my favourite rooms are the basement, which we converted into a cinema room, and my walk-in wardrobe.”

Source: Gulf News

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AZIZI TO CONTINUE ITS SPENDING SPREE Tuesday, December 19, 2017

Azizi Developments continues its billion-dollar run... the developer will be pumping in an additional Dh9.1 billion into

UAE real estate during 2018. The company’s budget for the next year has been approved.

“Our developments will include new residential projects in upcoming locations and community-style projects in high-potential areas across the city,” said Farhad Azizi, CEO. “Our priorities for 2018 are to... maintain a healthy balance

sheet and capital discipline. The sooner we can achieve our long-term goal; the sooner we can further grow our business, build on the success of 2017, and work to exceed next year’s goals while remaining a construction-driven real

estate company.”

This year has seen it being particularly active, including launching two multi-year projects at Meydan. The waterfront

project Riviera is valued at Dh12 billion and the Victoria twice that.

The developer also has projects on the ground at Al Furjan and on the Palm Jumeirah. “While 2017 was one of the busiest years for us operationally, we expect to see further business growth and development in 2018 – especially as

we near the commencement of Expo 2020,” said Azizi.

Source: Gulf News

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INSTITUTIONAL BUYERS WILL LIKE POST-

VAT REALTY OPPORTUNITIES Tuesday, December 19, 2017

Institutional investors could like what they see in a post-VAT (value-added tax) Dubai property market. “When you

consider the audit-related implications of VAT across almost every industry — and particularly in real estate — combined with the government initiatives of open source data, the market becomes increasingly attractive to global

players,” said Firas Al Msaddi, CEO of fäm Properties.

“There have obviously been initial concerns about VAT increasing costs for developers, brokerages, landlords and the

end-user. However, it will not directly affect the sale or rental price of residential properties, but it will have an indirect

effect on the market as a whole.” As per government directives, all residential property sales and rentals carry no VAT charge. But transactions involving all manner of commercial real estate will be charged at 5 per cent.

Source: Gulf News

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REVEALED: WHERE RENTS ARE CHEAPEST,

PRICIEST IN DUBAI Tuesday, December 19, 2017

Rents in most communities in Dubai have continued to fall, but despite the declines, a lot of people are still relocating

to other areas in search for lower housing costs.

According to property specialists, reduced household budgets are driving tenants to move farther afield, where both

new construction and existing communities are offering far more affordable options.

And if you haven’t already checked out, International City and Dubai Land are now the best places to live in for

residents on a tight budget, according to the latest data released on Monday.

The two neighbourhoods now offer tenants an average rent of Dh60 per square foot, the cheapest anyone can find in Dubai today. That’s roughly Dh54,360 a year for a living space of 906 square feet, according to October 2017 figures

compiled by a real estate specialist.

Tenants will also find affordable options in Dubai Investment Park, the second-cheapest neighbourhood where rents

cost Dh64 per square foot. Rounding up the top seven best places for tenants who don't want housing costs to get in

the way of their savings goals are Al Furjan, Dubai Silicon Oasis, Motor City and Discovery Gardens.

Where rents are cheapest

1. International City*

2. Dubai Land*

3. Dubai Investment Park

4. Al Furjan

5. Dubai Silicon Oasis

6. Motor City*

7. Discovery Gardens*

Flats in Downtown Dubai, on the other hand, are the priciest, with the average rent per square foot costing Dh117 a year. Tenants opting to live in the premium neighbourhood will have to shell out an average of Dh106,000 for a 906-

square-foot apartment, slightly pricier than Old Town, where rents average Dh115 per square foot. The research,

published by Propertyfinder Group in its latest report, looked at various rental markets across Dubai and averaged the prices in each neighbourhood per square foot.

Where rents are priciest

1.Downtown Dubai

2. Old Town

3. The Views

4.DIFC

5. Dubai Marina

6.Greens

7.Palm Jumeirah





Propertyfinder Group said rent prices across the emirate continued to fall in October, with a median price per square

foot of Dh89. Some communities have witnessed “modest” increases, but the majority have seen single-digit percentage declines in asking prices over the past six months.

“This can be directly attributable to the level of new stock being handed over. Many of these developments were sold to investors, some of whom had hoped to make a capital gain and flip (on-sell) at, or prior to, completion,” noted

Lukman Hajje, chief commercial officer of Propertyfinder Group.

“But failing market has converted these speculators into buy to let investors. This affects not only the development itself but surrounding areas and rents within new and established projects in similar price points.”

According to Jesse Downs, managing director of Phidar Advisory, rents continued to head south in October this year, with declines averaging 3.8 per cent. This is largely driven by the combination of weak job growth, new supply

handovers and reduced housing budgets.

Downs said that as newly developed communities opened up in outlying areas, more tenants relocated away from the

city centre, to take advantage of lower rents. This has left a lot of vacancies in popular locations.

Where rents have dropped the most

The biggest rental declines were observed in Discovery Gardens, where rents dropped more than 9 per cent in October

2017 compared to April 2017.

“Historically one of the most affordable developments in Dubai, it is facing increased competition from new affordable

projects across Dubai,” added Hajji.

The only area that bucked the trend is Dubai Investment Park, where rents moved in the opposite direction, rising by 3.5 per cent during the same period.

* Locations with similar median asking rents.

Source: Gulf News

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PALMA ENTERS DEALS WITH MORTGAGE

PROVIDERS Monday, December 18, 2017

The developer Palma has secured deals with Emirates NBD, Sharjah Islamic Bank, Amlak Finance and Mortgage Finder

to offer mortgages for its Serenia Residences on the Palm.

The high-end property is due for completion in a few weeks. Designed by Hazel Wong, the architect behind Emirates

Towers, Serenia Residences cost Dh1.5 billion and is located on the Palm’s crescent. It features 250 units of one to three-bedroom apartments as well as penthouse suites.

Source: Gulf News

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OMNIYAT RAISES DH500M FOR NEW MIXED-

USE PROJECT Monday, December 18, 2017

Dubai-based Omniyat has signed a financing facility with Ajman Bank for Dh500 million, which will be used for the

construction of a mixed-use project at Dubai Water Canal in Business Bay. The project is a partnership between Omniyat, Saudi Arabia’s Rashed Al Rashed Group and Jenina Real Estate Development Co. Ltd., a Saud Kanoo’s

company.

The facilities are structured in line with Sharia-compliant practices for a five-year tenor.

The project cost is Dh1.34 billion and scheduled for completion by 2020. It will consist of a hotel, residences and retail

development. The official announcement is due in 2018 first quarter. Construction on site has already begun.

“Omniyat has separated itself from the competition by focusing on unique projects that resonate with discerning

investors and by collaborating with like-minded partners,” said Mahdi Amjad, Chairman and CEO of Omniyat.

The project will cement Omniyat’s move into the lifestyle sector and precedes the opening of ME Dubai at The Opus by

Zaha Hadid later in the year. Omniyat currently has a development portfolio valued at more than Dh23 billion.

Source: Gulf News

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CHINESE DEVELOPER IN NO RUSH TO

LAUNCH OFF-PLAN SALES IN DUBAI Monday, December 18, 2017

A new developer to Dubai, backed by Chinese investors out of Hong Kong, is taking a different sales approach to its

first project — a Dh21 billion residential community at Meydan. The developer plans to reach clear project milestones before getting started on off-plan sales.

Put it down to the Chinese way of doing things. “Right now, we are at the 10 per cent mark on the construction side with Phase 1 and confirmed as such by the Dubai Land Department,” said Tariq Jarrar, Vice-President of Sales and

Marketing at Oriental Pearls, which is the developer of Royal Pearls. “There are certain project protocols that the

Chinese shareholders want to stick to — and that includes not rushing out with the sales. We don’t see this strategy as being a disadvantage in finding buyers.”

All through 2017, developers have stuck to one script — get on with the off-plan sales at the earliest. This way, the developers believe, they get a chance to mop up as many buyers out there. Buyers, by and large, responded and

ensuring this was a bumper year for off-plan sales.

Chinese investment firms participating directly in Dubai’s development scene is still very much a rarity. But this is a status that is likely to change dramatically in the coming year or two. Already, the Chinese are emerging as a key buyer

demographic in Dubai’s property market. Chinese financial institutions — including the Industrial and Commercial Bank of China — had taken up exposures in a loan syndication for Five Holdings (previously known as Skai). (The loans were

paid up ahead of schedule.)

If the pace of Chinese investors snapping up Dubai property picks up further, expect more development funds to come through from there. Oriental Pearls’ shareholders built their fortunes in general trading activity. Oriental Pearls expects

Chinese buyers to account for about 20 per cent of the project’s sales.

As things stand now, it has not set a firm date to roll out sales. But it will be open to taking in expressions-of-interest,

the official added. It picked up the substantial 4.6 million square feet of land 18 months ago. To date, it has committed over Dh1.3 billion.

River Pearls will have 36 buildings and 8,000 apartments when it is completed by 2022. Phase 1 will see 12 buildings

and 1,565 units. The developer is working on setting the launch price in consultation with JLL and Knight Frank, the official added. Other developments in the area are going for between Dh1,200-Dh1,550 a square foot.

“We are back to the drawing board to see how we could add more smart-home features to the apartments,” said Jarrar. “Once that’s done, we will be in a better position to set our prices.

But, in the coming days, we should be ready to name the main contractor.” (It is believed that there are three

contenders in the fray for the main contractor’s mantle.)

The Meydan area, itself part of the mega development that will be MBR City, has been one of the most active in terms

of new launches this year. After starting with premium residential offerings, developers are now putting in place a wider mix into the destination. Azizi recently had back-to-back launches with its massive “Riviera” and “Victoria” projects.

There is quite a sustained level of buying activity happening with MBR City projects, including those coming directly from the master-developer Meydan.

Source: Gulf News

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BUY PROPERTY IN DUBAI WITH CRYPTO-

CURRENCY Monday, December 18, 2017

You can soon buy a property in Dubai using crypto-currency. And with Sharia-compliance too.

MAG Lifestyle Development is allowing buyers in its projects to use “OneGram”, the Sharia-compliant crypto-currency. Said to be a first for the region, the move could also bring OneGram into the mainstream and get it the kind of

exposure Bitcoins do.

Each OneGram Coin is backed by a gram of gold, which ensures that it remains “fully capitalized” and a stable digital

currency. In compliance with Sharia, it is also zero interest and non-speculative as it is pegged to gold.

OneGram will go live in June next. Investors in MAG properties will purchase OneGram to the value of the property and receive a 5 per cent discount on the property price as a result.

The OneGram will then remit to MAG according to the payment plan, which is 35 per cent over six to nine months and 65 per cent on completion at the end of 2019.

“This is a mega announcement as it is our first real-world application for OneGram,” said Mohammad Ibraheem Khan,

Co-Founder of OneGram.

"This shows the “market that we are here to stay by creating real-use cases for our token.”

Bitcoin and other crypto-currencies are currently “struggling to enter the mainstream in the Middle East, where their inherently speculative and risky character does not complement the local investment culture”.

Talal Moafaq Al Gaddah, CEO of MAG Lifestyle Development, commented: “At MAG, we exist to inspire our customers

to expect more from us, and we are delivering on this promise by allowing them to benefit from the growing potential of crypto-currencies with OneGram.

"In Dubai’s forward-thinking real estate market, where embracing smart digital solutions is a key priority for driving sustainable growth in line with our leadership’s directives, we are proud to be standing apart from the pack by

achieving another regional first.”

How OneGram is Sharia-compliant

The underlying asset behind OneGram is gold. Each OneGram coin is backed by one gram of gold. As a Sharia-

compliant investment product, OneGram follows the three basics for trading in Islamic finance: There is no interest mechanism in the issuance of OneGram, the profit or loss sharing is part of the rewards scheme, and there is minimal

speculation as OneGram is an asset backed by physical gold.

Source: Gulf News

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THE UAE BREAKS GROUND ON ICONIC

PAVILION AT EXPO 2020 Sunday, December 17, 2017

The UAE has broken ground on its pavilion at Expo 2020 Dubai, with Shaikh Ahmad Bin Saeed Al Maktoum, chairman of

the Expo 2020 Dubai Higher Committee, laying the foundation at a ceremony on Sunday.

The event also included the signing of the official agreement for the UAE’s participation in the Expo, which was signed

by Sultan Ahmad Al Jaber, Minister of State and chairman of the National Media Council (NMC), and Reem Ebrahim Al Hashemi, Minister of State for International Cooperation and director-general of the Expo 2020 Office.

Arabtec Construction is building the pavilion. The company won the contract after competing against national and

international companies. Arabtec has already delivered mega-projects throughout the UAE, including the Louvre Abu Dhabi, and the expansion of Abu Dhabi International Airport.

Shaikh Ahmad said in a statement: “The UAE Pavilion will undoubtedly be one of the most prominent attractions of Expo 2020, drawing in many millions to witness its futuristic design.”

He added: “It will be a wonderful opportunity to share our Emirati culture and achievements while showcasing our

ambitious vision for the future. The Pavilion will be an architectural marvel that all seven Emirates can rightly take pride in, both now at the ground-breaking stage, during Expo, and in legacy when it will become a lasting icon of our nation.”

The UAE Pavilion is designed in the shape of a flying falcon, symbolising the country’s leadership and pride. The design’s components reflect the values of openness, communication and tolerance, aligning with the main theme of the

exhibition, which calls for cooperation with the international community to improve quality of life through sustainable

development.

For his part, Al Jaber stated: “The UAE Pavilion is a prominent landmark at the Expo 2020 Dubai; it represents the host

country and will be the main attraction for millions of visitors from all around the world.”

Completion

The pavilion covers an area of more than 15,000 square metres; it is made up of four floors with the top storey dedicated for hospitality with an area of 1,717 square metres. Meanwhile, a 588-square-metre mezzanine floor will

house support units, and the two remaining floors consist of more than 12,000 square metres of exhibition space. The

entire structure is expected to be completed by the end of 2019.

“The Pavilion showcases the history of the UAE, which stretches over thousands of years, and tells the story of our wise

leaders, their vision and their achievements that have transformed the UAE into an international role model. At the same time, the structure will introduce visitors to the UAE’s ambitious aspirations for the future, all the way till 2071,”

Al Jaber added.

The NMC approved the design submitted by architect Santiago Calatrava after a seven-month design competition, where nine international architecture firms submitted 11 different concepts. Entries were evaluated based on strict

criteria, including the extent to which they successfully embodied the main theme of the Expo (Connecting Minds, Creating the Future), as well as their representation of UAE heritage, balancing the country’s past and future.

“The UAE Pavilion will be the long-lasting legacy of Expo 2020 Dubai, bearing witness to the UAE’s success in organising not only the first Expo in the Middle East and Africa, but also one of the world’s best expos to date. This

adds another achievement to the UAE’s ever-growing track record of successes,” Al Jaber said.

Source: Gulf News

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IS A ONE-MONTH PENALTY FAIR FOR

TERMINATING A RENTAL CONTRACT AFTER

ONE WEEK? Wednesday, December 20, 2017

We rented an apartment for one of our staff members in the International City. The landlord refused to reduce the rent ahead of the contract renewal, so I sent a vacating notice three months before the expiry date, which was accepted by

the landlord. Just a week before the tenant was due to move out, the landlord agreed to our price so we asked him to

send us a new tenancy contract for rent. Unfortunately, the staff member then had to leave so we did not need the apartment anymore. We sent an email (a week after the expiry of the current lease) informing the landlord that we

would not renew and that we would hand over the key and the access card. Now he is refusing to accept the handover saying that we have overstayed by a week (which is true ) and that we cannot just vacate the property without paying

a one-month penalty. What needs to be done if the handover is refused? RP, Dubai

The first question to ask is what does the contract says about penalties? The other point is that the landlord believed the tenant would stay on, so I question why you would inform him that this was not the case after one week had

lapsed? The landlord does have a point.

You should have checked with the tenant before agreeing to a new contract. Now the landlord is faced with finding a

new tenant quickly to mitigate his void period, so is demanding compensation.

I suggest that the penalty of one month rent is a small price to pay given that, in reality, one week was still “under contract”. For your case, I believe this has been an expensive lesson but one that I’m sure you have now learnt, so will

not repeat.

I signed a tenancy contract last month for a studio apartment in Silicon Oasis. The tenancy contract states that the

tenant has to pay for:

1. Any maintenance above Dh500

2. Chilled water (when I checked this with building management, they said the building was chiller free and that no

meters were present)

Also the apartment is meant to be handed over to me very soon but until now, the agent has not organised the Ejari.

Please advise what I should do? RG, Dubai

Firstly, when it comes to maintenance, the norm is for the tenant to pay for any repairs or services needed under

Dh500 and anything above this figure ought to be the responsibility of the landlord. For some reason, your contract is

the other way round, so I would definitely change this.

The second point about the tenant paying for chilled water would normally mean the consumption of AC in the

apartment. If this building is chiller free and no meter is present you cannot possibly pay for the chiller. This is then the responsibility of the landlord as it will form part of the maintenance charges.

If the tenancy agreement also started on a certain date and you have not moved in yet, I suggest you either get a refund for the days that the apartment has not been given to you or the contract is altered to reflect the date that it

will be handed over to you.


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DUBAI COURTS DISMISSES OGER

ARBITRATION AGAINST DAMAN RECAP Sunday, December 17, 2017

Daman Real Estate Capital Partners ( Daman Recap) has won a favourable judgment in the Dubai Courts of Appeal in

its long-running dispute with contractor Oger Dubai, relating to the Burj Daman real estate project in the Dubai International Financial Centre (DIFC).

Representatives of Daman Recap, a special purpose vehicle set up for the development of the 3.2 million square foot project, said the Court of Appeal declared null and void a Dh965 million arbitral award obtained by Oger against Daman

Recap in Dubai International Arbitration Centre in 2015.

Oger Dubai brought an arbitration against Daman Recap after it was dismissed as developer of the 65-storey development in 2012 for what the SPV describes as “non-performance of its contract citing “culpable delay” in

completing the project.”

The construction firm brought a case the following year against Daman Recap, based in DIFC, before the free zone's

courts, demanding enforcement of the arbitral award. Daman Recap at the same time appealed to have the arbitral

award annulled in the Dubai Courts.

Dubai’s Judicial Tribunal for the Dubai Courts and DIFC Courts ruled last year that the case should be heard exclusively

in the Dubai Courts and that the DIFC Courts should “cease from entertaining the case.”

“Daman Recap is satisfied that after a long and costly legal process, justice has prevailed, and that the mechanisms put

in place by the Government of Dubai to regulate the relationship between the Emirate’s two complimentary judicial

systems have worked well to protect the rights of all affected parties,” a representative said in a statement on Sunday.

It is unclear whether Oger has decided to refer the judgment of the Dubai Courts of Appeal, which was made in

October but has only recently come to light, to the emirate’s Court of Cassation.

Oger was unavailable for comment on Sunday.


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DUBAI REALTY STILL A WINNER Saturday, December 23, 2017

Dubai remains an attractive market for property investors despite softening rents and sale prices this year as the

emirate still offers stable returns on real estate investment, a latest report says.

Property portal Bayut.com's annual report for 2017 indicated a seven per cent and five per cent average return on investment on apartments and villas, respectively, in Dubai this year.

It identified Dubai Marina as the most sought-after area for both renting and buying apartments this year, while Mirdif and Arabian Ranches led the pack in villa renting and buying, respectively. It noticed Dubai International City as the

most affordable popular area for both renting and buying apartments, while Mirdif offered the lowest-priced villas and townhouses in the emirate.

"As more and more off-plan projects are completed in 2018, handed over and put on the secondary market, we can

expect prices continuing to attract investors while landlords will have to stay competitive to entice potential tenants," chief executive of Bayut.com Haider Ali Khan said.

"In the long run, as the market and the broader economy move on a trajectory of diversification and maturity, the opportunity for developers and sellers to capitalise on their investment remains strong," Khan added.

Atif Rahman, director and partner of Danube Properties, said Dubai is perhaps one of the best real estate markets from

an investment perspective, where rental return on investment is one of the highest.

"Typically, an investor can easily fetch seven to 10 per cent annual rental returns, depending on the location, product

quality and size of the property. In most developed markets worldwide, the rental yields vary from two to five per cent," Rahman said.

"The other aspect of investing in Dubai is the presence of an extremely sound regulatory environment that makes the

investment in Dubai's real estate an absolutely safe proposition - regardless of which location you invest in. So, from real estate investment point of view, Dubai offers one of the best investment opportunities when compared worldwide."

Prabhakar Raghavendra Rao, joint managing director of Gemini Property Developers, said real estate assets - residential, commercial, retail and hospitality properties - in Dubai offer one of the highest rates of return on

investment, compared to most metropolises in the world.

"Depending on the location, size and the quality of the property, buyers could recover the total investment in 12-15

years - one of the fastest rates of return on investment due to high rental yields. That's one of the reasons why there

won't be any shortage of property buyers and investors in Dubai and the UAE - no matter how many properties are added to the existing properties every year," Rao told Khaleej Times.

Rents on decline

The report said apartment rents in Dubai remained on the decline with highest decrease of 16 per cent recorded in

International City where tenants paid annual rents of Dh31,000, Dh42,000 and Dh65,000 for studios, one- and two-

bedroom apartments, respectively. Dubai Silicon Oasis, Mirdif, Bur Dubai, Deira and Al Nahda were other sought-after areas for renting apartments this year.

For villas and townhouses for rent, Mirdif was the top choice of tenants and followed by homes in Jumeirah, Al Barsha, Umm Suqeim and Arabian Ranches.

Mirdif was the most affordable villa community with yearly leases of Dh130,000, Dh145,000 and Dh150,000 for three-, four- and five-bedroom villas, respectively, with a 9 per cent to 13 per cent year-on-year drop.

Palm Jumeirah was the most expensive popular villa locality in Dubai this year with yearly leases of Dh315,000,

Dh420,000 and Dh450,000 for three-, four- and five-bedroom villas, respectively, with a six per cent to 13 per cent year-on-year decline this year.

Sales prices more attractive





Dubai Marina was the most desirable Dubai community for buying apartments this year, followed by Downtown Dubai,

Jumeirah Village Circle, Jumeirah Lake Towers (JLT) and Palm Jumeirah. Investors paid Dh850,000, Dh1.35 million and Dh2.2 million for studios, one- and two-bedroom apartments, respectively.

Palm Jumeirah remained the most extravagant popular area with studios, one- and two-bedroom flats, demanding Dh1.25 million, Dh2.4 million and Dh2.7 million, respectively.

In terms of investment in the affordable segment, Dubai International City remained the most cost-effective to

investors as studios, one- and two-bedroom apartments were priced at Dh350,000, Dh475,000 and Dh850,000, respectively, roughly reflecting a 5 per cent decline from 2016.

Apartment types that bucked the trend were studios in Dubai Silicon Oasis and Dubai Sports City with a 1 per cent increase, one-bedroom apartments in Palm Jumeirah with a 5 per cent upturn and two-bedroom apartments in JLT with

a 0.5 per cent rise.

Most of the interest for buying villas and townhouses in 2017 was observed in premium gated communities such as

Arabian Ranches, Reem Community, Dubailand, Palm Jumeirah and The Springs, among others.

The most expensive well-liked area for buying villas is Palm Jumeirah with three-, four- and five-bedroom villas and townhouses commanding Dh8 million, Dh11.5 million and Dh15.5 million, respectively, with a 4 per cent to 9 per cent

year-on-year decline from 2016.

Off-plan listings in Dubai Marina were the most sought community by investors followed by projects in Downtown

Dubai, Jumeirah Village Circle, JLT and Dubai Silicon Oasis, according to the report.

"We have seen an overwhelming response to our apartments, a positive sign that the market is still robust with plenty of demand for high quality yet affordable properties," Muhammad BinGhatti, CEO and head of architecture at Binghatti

Developers, said.

Referring to a report by Reidin/Global Capital Partners report, Rao said the total return of real estate assets in major

cities such as Dubai, New York, Singapore and London stood between five and 11 per cent.

In Dubai and Singapore, he said real estate assets have returned close to 120 per cent in the form of rents and capital

gains over the last 10 years, compared to 75 per cent in London and 63 per cent in New York. In Dubai, the majority of

returns have been through rental increases.

"Going forward, affordable luxury properties will be on high demand. Therefore, those properties will command a

higher and faster return on investment," Rao of Gemini Property said.


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LIMITLESS TO REPAY DEBT WORTH DH412.4

MILLION EARLY Wednesday, December 20, 2017

Dubai-based real estate developer Limitless will close 2017 with an early payment of Dh412.4 million to banks and

trade creditors on Thursday.

The payment - a week ahead of the due date - comprises Dh297.1 million to banks and Dh115.3 million to trade

creditors. Once made, Limitless will have repaid almost half of its outstanding bank debt and trade creditor obligations.

Thursday's transactions will bring Limitless' bank repayments to Dh2.2 billion (49.4 per cent of the total), with Dh278.7

million paid to trade creditors (48.3 per cent of the total settlement due).

In May 2016, Limitless cleared Dh1.9 billion of bank debt with an immediate payment following the conclusion of its restructuring agreement with lenders. The payment, six months ahead of time, covered the first repayment instalment

and 80 per cent of the second. The company also paid Dh163 million to trade creditors at the time. The final repayments are due in December 2018.

Limitless chairman Ali Rashid Lootah said: "Limitless continues to meet its obligations and commitments to investors.

We thank the government of Dubai and our lenders, trade creditors and investors for their continued trust and support."

Source: Khaleej Times

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DLD OPENS CENTRE TO IMPROVE

CUSTOMER SERVICE Wednesday, December 20, 2017

The Dubai Land Department (DLD) has launched 'Cube', a new customer service centre, on the third floor of its

headquarters to provide real estate investors with exceptional services.

Cube has been established in collaboration with a number of key partners, including the General Directorate of

Residency and Foreigners Affairs in Dubai, the Dubai Police General Command, the Dubai Health Authority, the Department of Economic Development in Dubai and the Federal Authority for Identity and Citizenship.

The DLD is upgrading its services to reach a seven-star level. It is keen to satisfy customers and meet the aspirations of

investors by providing them with high standards of service. The Cube project also contributes to positioning Dubai as the best place to live and work, attracting foreign capital and encouraging direct and indirect investment in support of

Dubai's economy.

Majida Ali Rashid, assistant director-general and head of the Real Estate Investment Management and Promotion

Centre at DLD, said: "We have established Cube in line with the directives of our leadership to further develop our

services. We will achieve this through continuous efforts to provide the highest quality services to real estate investors in one location, allowing them to complete all procedures easily and conveniently."

Rashid added: "This initiative is a major step in our approach to providing all real estate services in a way that ensures an easy and efficient investment experience for our customers."

Cube reduces both effort and time for real estate investors by providing all services in one location, rather than the

previous 15, and by completing procedures in one working day rather than the previous 10. The centre will include medical centres, printing offices and insurance companies.


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BUY A DUBAI HOME, GET A TESLA CAR FREE Tuesday, December 19, 2017

Damac Properties is offering a new Tesla with the purchase of select units from its portfolio of luxury villas and

apartments during this Dubai Shopping Festival (DSF). For every qualifying purchase throughout the DSF, running from

December 26, 2017, till January 27, 2018, customers will drive away in a new Tesla.

Niall McLoughlin, senior vice-president, Damac Properties, said: "We're delighted to offer investors an opportunity to

experience luxury with Damac and drive away in a luxury car. We aim to surprise investors with a dream car to complement their home purchase. Customers look forward to our DSF promotions as we provide double the joy of

owning a home - with a valuable car on the house."


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ALDAR COMPLETES DH658M BUY OF

INTERNATIONAL TOWER Wednesday, December 20, 2017

Aldar Properties has completed its acquisition of the International Tower in Abu Dhabi’s Capital Gate district for Dh658

million. The office tower features 39,000 square metres of Grade A net leasable area.

The purchase will “immediately” contribute to Aldar’s net operating income, given that International Tower already has

a high mix of tenants.

Key anchor tenants include Abu Dhabi Systems & Information Centre, Aecom, Wood Group, McKinsey & Company and

BAE Systems.

The buy will complement the developer’s “existing Dh18 billion asset management portfolio of high-quality real estate assets across the retail, residential, office and hospitality sectors and supports Aldar’s asset management strategy to

grow net operating income.”

“The acquisition of International Tower clearly demonstrates our belief in the strength of Abu Dhabi’s commercial real

estate market,” said Talal Al Dhiyebi, CEO of Aldar.

The Capital Gate district is where the Abu Dhabi National Exhibition Centre is located. International Tower is located at the heart of the business hub.

Aldar recently announced it will retain a proportion of the Water’s Edge residential development for its asset management portfolio.

Source: Gulf News

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YAS ISLAND SET TO RECEIVE ITS FIRST

RESIDENTS Monday, December 18, 2017

The Yas Island in Abu Dhabi is getting its first residents. Aldar Properties has commenced hand over of residential units

at Ansam located on the island. Situated on the west side of the island, Ansam features four Andalusian-style apartment buildings. Handovers have also started at Al Hadeel, which sits on the sea-front of Al Raha Beach alongside

some of Aldar’s popular locations — Al Bandar, Al Muneera and Al Zeina.

Source: Gulf News

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AED 22 BILLION SHARJAH 2018 BUDGET

ANNOUNCED Sunday, December 17, 2017

H.H. Dr. Sheikh Sultan bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Sharjah, has issued Law No.

10 2017 approving a general budget for the Emirate of Sharjah of AED 22.1 billion (US$ 6 billion) for the fiscal year 2018. According to Sharjah Finance Department (SFD), the budget has increased 6 percent compared to the final 2017

budget in order to meet the requirements of government departments and achieve strategic objectives across economic, social, scientific and cultural spheres, including increasing investment in infrastructure.

The Emirate’s 2018 public budget aims to continue to stimulate the economy, support economic growth rates and

ensure the financial stability of the emirate. The SFD will also ensure that all data, indicators and results are within the international financial standards, including inflation rates, spending across sectors and other macro-economic

indicators.

In common with previous years, economic development receives the biggest funding with 44 percent of the new

budget, an increase of 7 percent compared with the sum allocated for 2017. Sharjah has invested strategically in

developing key economic sectors including tourism, healthcare, energy, manufacturing and industry and real estate.

Meanwhile, 24 percent of Sharjah’s 2018 budget has been allocated to infrastructure investment, an increase of 3

percent on 2017 spending. The social development sector has been allocated 23 percent of the budget for 2018, an increase of 6 percent compared to last year, towards providing the best services, support and assistance to citizens and

residents of the Emirate. Government administration, security and safety accounted for about 9 percent of the total

budget for 2018 increasing 13 percent on 2017 spending.

Salaries and wages account for 36 percent of the total operating budget for 2018, other expenditures account for 59

percent, while capital expenditure accounts for about 5 percent. Overall, the operating budget has grown 7 percent for 2018 compared to 2017.

According to SFD, government revenues have been budgeted 8 percent higher than in 2017, constituting the main source of funding for the 2018 budget. Capital revenue accounts for 14 percent of 2018’s revenue budget, customs

revenues for 7 percent (an increase of 9 percent on 2017 figures), oil and gas revenues for 2 percent (a 100 percent

increase over 2017, while tax revenues accounted for 1 percent of total public revenues.

Revenues generated by central authorities’ amount to about 49 percent of the total revenue budget, an increase of 3

percent compared to 2017, while revenues generated by independent bodies accounted for about 51 percent of the total budget.

The new 2018 public budget aims to empower government agencies with the financial capacity to achieve their

strategic and operational objectives, whilst strengthening the Emirate’s ability to balance of repayment of loans, interest rates and economic indicators.

Source: Sharjah Update

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INDIGO TO LAUNCH TWO MORE SHARJAH

ROUTES Sunday, December 17, 2017

IndiGo, India’s largest budget-carrier, will introduce non-stop flights to Sharjah from Lucknow (LKO) and Hyderabad

(HYD) starting 29 December 2017, due to the growing demand for Sharjah connections. The airline launched its inaugural flight to Sharjah International Airport in March, connecting Sharjah with Kozhikode (Calicut), followed by the

addition of a direct flight from Thiruvananthapuram (Trivandrum) in April.

IndiGo will be the first airline to launch direct Lucknow-Sharjah flights. The low-cost airline plans to use the new

Sharjah routes to provide connections to Bhubaneswar, Chennai, Goa, Kolkata, Kochi, Raipur, Rajahmundry, Mangalore,

Patna, Tirupati and Visakhapatnam.

Headquartered in Gurgaon (Gurugram), India, IndiGo is India’s largest passenger airline with a market share of 39.5

percent (October 2017) and is ranked among the top ten best low-cost airlines in the world by leading consumer aviation website Skytrax. The airline currently connects 46 destinations, including 7 international destinations.

India has emerged as the fourth largest market for international visitors to Sharjah and the emirate has driven ongoing

marketing campaigns targeting India’s outbound tourism over the past few years. Sharjah-headquartered budget airline Air Arabia, which launched operations in 2003, began developing the Indian market early on, adding 13 destinations

throughout India by 2009. Indian airlines Air India Express and Jet Airways also operate Sharjah flights.

Sharjah International Airport handled 11 million passengers in 2016, growing 10 percent over the previous year. In

February, the government approved a US$400 million (AED 1.46b) budget for the expansion of Sharjah International

Airport, to increase airport capacity from 8 to 18 million passengers a year.


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WHERE NOT TO BUY PROPERTY Wednesday, December 20, 2017

The generally accepted take on real estate is that a house will inevitably appreciate in value over time and then be

passed on to heirs. This isn’t the whole truth. The future value performance of a house is very much dependent on

macroeconomic factors, including credit supply conditions in the mortgage market, vulnerability of economies to high levels of household debt and high bank leverage ratios, as well as hard factors such as building quality, local

infrastructure or land-use planning regime by the municipality. This means that assessing whether a real estate market is overheating or in a downturn is a complex issue.

This happens even in the most politically and economically stable countries, such as the Netherlands. The country’s housing market had enjoyed a boom with impressive annual growth in prices in large Dutch cities from the 1980s until

2009. But the market started to overheat after Netherland’s economy nosedived, sending house prices downwards,

with a peak in value loss in 2012.

“In 2012, after a house was sold in the Netherlands, its value would decrease by approximately 1,200 euros per month,

meaning that a purchased house lost parts of its value month after month, until a recovery in 2014,” said Brigitte van de Pas, researcher at Hamburg-based business intelligence firm Statistica.

Look for signs

Thus, it is imperative for buyers to look for signals whether a market is starting to overheat or is already on the edge of diving. This can be done by looking at the market with the largest price growths and/or on markets showing a tendency

of losing steam in property prices. Obvious signs for an upcoming bubble include a decoupling of prices from local incomes and rents, and distortions of the real economy, such as excessive lending and construction activity not in tune

with demand.

“Our data shows that global housing boom appears now to be losing momentum, with most of the Middle East, Latin America, Australia and New Zealand and some parts of Asia experiencing either house price falls or a deceleration of

house price rises,” says Matthew Montagu-Pollock, founder and president of Global Property Guide (GPG), a firm which surveys residential housing prices worldwide and compares data. He also points at markets with sharp price rises,

which might look healthy, but should be handled with care.

According to Montagu-Pollock, the five strongest housing markets based on the GPG’s survey during the second quarter

were Iceland (21.28 per cent), Hong Kong (19.27 per cent), Ireland (13.52 per cent), Canada (13.08 per cent) and

Romania (8.87 per cent). The biggest year-on-year house-price declines were in Puerto Rico (down 9.59 per cent), Russia (7.58 per cent), Qatar (6.25 per cent), Macedonia (5.99 per cent) and Egypt (5.32 per cent).

This indicates that investors should not invest in markets showing signs of overheating or in value-losing destinations in view of the fact that the overall market is losing momentum.

Bubble Index

The UBS Global Real Estate Bubble Index, an annual study designed to track the risk of housing bubbles in global cities, comes to a similar conclusion. The this year’s index puts Toronto on top of the risk list, thanks to skyrocketing home

prices and strong buyer demand. Toronto is followed by Stockholm, Munich, Vancouver, Sydney, London, Hong Kong and Amsterdam.

“These cities all remain in risk territory, with Amsterdam joining this group after falling into overvalued territory last year,” said Matthias Holzhey, UBS researcher and co-author of the report. “Valuations are stretched in Paris, San

Francisco, Los Angeles, Zurich, Frankfurt, Tokyo and Geneva as well.” Holzhey adds that low interest rates were a big

contributor to the potential bubble, while other indicators are simply out of proportion.

“The bubble risk in select world cities has increased significantly over the last five years,” says Holzhey. “Real house

prices of those metropolises within the bubble-risk zone have climbed by almost 50 per cent on average since 2011. In the other financial centres we looked at, prices have risen by roughly 15 per cent. This gap is grossly out of proportion

to the differences in local economic growth and inflation rates.”





US cities with the highest risk of overheating are San Francisco and Los Angeles. In the case of San Francisco, the

technology boom and strong foreign demand have helped house prices soar 65 per cent since 2012. Despite the thriving economy, average incomes have risen only 10 per cent since 2012 and have not kept pace with house prices.

In Europe, Stockholm is the city most in danger of a property bubble. In the last 10 years, house prices climbed by 60 per cent, more than twice as fast as incomes. Munich is in a similar situation against the backdrop of record-low

vacancy. Home prices rose 85 per cent in the last 10 years and affordability continues to deteriorate.

London is a special case. Low affordability, economic slowdown and uncertainty about the UK’s relationship with the EU kept housing demand in check in the last four quarters, but the city is still in bubble risk territory.

In Asia, Hong Kong seems to be the most troubled city in terms of real estate overvaluation, although the market is still inflating, which has to do with the fact that there is not a lot of room left to develop on the island. However, demand is

outstripping incomes, which has created affordability issues.

Middle East

In the Middle East, three key markets appeared to have lost steam. In Qatar, the property market is now in trouble as

a result of a sharp economic slowdown and the ongoing diplomatic crisis in the region. Average home prices dropped 6.25 per cent during from January to June 2017, its fourth consecutive quarter of declines. Though, property prices

increased slightly by 1.1 per cent in the third quarter of 2017 year-on-year.

The real estate market in Egypt remains weak, with the nationwide real estate index having fallen by 5.32 per cent

year-on-year in the first half of the year.

Dubai’s residential property prices fell a soft 2.51 per cent in the first six months. However, demand seems to rise strongly again, signalling improving property market conditions. During the first half, the value of real estate

transactions rose by 16.8 per cent year-on-year to $35.9 billion (Dh131.84 billion), and the number of transactions increased by 26 per cent, data from the Dubai Land Department shows.

Source: Gulf News

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INDIAN DEVELOPER HDFC'S $1BN FUND,

BACKED BY ABU DHABI REACHES FINANCIAL

CLOSE Friday, December 22, 2017

Indian mortgage lender Housing Development Finance Corporation's (HDFC) investment advisory arm has reached financial close on its billion-dollar affordable real estate fund, which has Abu Dhabi Investment Authority (ADIA), the

world's second largest sovereign wealth fund as a key backer.

HDFC Capital Advisors said on Thursday that it had raised $550 million in initial closure on its second affordable housing fund, which will be combined with an earlier fund launched in 2016 to create a $1bn investment pool.

The newly-created fund is set to have a development footprint of 75 million square feet across affordable and mid-income residential projects across 15 Indian cities over the period of two to three years, HDFC said in a statement.

"These funds will play a significant role in progressing towards the 'Housing for All by 2022' objective of the

government," said Deepak Parekh chairman at HDFC.

"Affordable housing will not only act as a growth driver for the real estate industry in India but will also be a catalyst for

GDP growth. The current lack of flexible, long-term capital is one of the key challenges facing developers of affordable and mid income housing in India," he added.

Affordable housing remains an underserved segment within India's lucrative real estate industry. The world's second

most populous state is pushing through an ambitious agenda to bridge the housing gap by building 20 million affordable homes in urban areas by 2022 as well another 10 million rural parts of the country by 2018. However, the

targets remain far from realised with a mere 300,000 being built so far under the government scheme implemented in 2015.

"India’s housing market presents a compelling investment opportunity driven by the country’s continued economic growth and backed by supportive government initiatives," said Khadem Al Remeithi, executive director, real estate and

infrastructure department at Adia.

"Our investment in HDFC’s platform aims to meet the strong demand for early-stage financing of housing projects and encourage the continued growth of the affordable and mid-income residential sector," he added. Adia, whose portfolio

size remains undisclosed has made significant inroads in the Indian real estate sector this year.

In October, Adia's wholly-owned subsidiary signed a $1 billion investment agreement with a India's National Investment

and Infrastructure Fund to invest in energy, transportation and infrastructure-related sectors. The Abu Dhabi fund has

increasingly pivoted towards the east, increasing its portfolio in China and India, from where it expects continued growth.

Adia remains invested in a number of asset classes, including fixed income and equities in India. It was also reported in July to be in talks to buy 49 per cent of the Rajiv Gandhi Hyderabad International Airport, which serves the capital and

IT-hub of the eastern Indian states of Andhra Pradesh and Telangana.

"India’s housing market presents a compelling investment opportunity driven by the country’s continued economic

growth and backed by supportive government initiatives. Our investment in HDFC’s platform aims to meet the strong

demand for early-stage financing of housing projects and encourage the continued growth of the affordable and mid-income residential sector."


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HONG KONG HOTEL OPERATOR STOCKS

WILL ROCK IN 2018 Sunday, December 17, 2017

My idea of nirvana in Hong Kong is to wake up in a glass walled aerie (preferably the Four Seasons), with a panoramic

view of the Victoria Harbour. Hong Kong is one of the world's most attractive hotel investing markets, thanks to its proximity to 1.3 billion potential jet setters in the Middle Kingdom and its role as Asia's financial, shipping, property,

retail and shopping hub ever since the Scottish taipans of Noble House wrested it away from the Manchu Empire in the Opium Wars.

Hong Kong has hotel metrics that any global city could envy. About 60 million overnight stay visitors in 2017. A 88 per

cent occupancy ratio. A five per cent rise in visitor arrivals in the next three years. About 90 per cent occupancy ratios are for three star and four star (B tariff) hotels. A six per cent to seven per cent rise in average daily room rates, a

testament to the momentum in hotel pricing power. There are at least a dozen medium tariff hotels in Hong Kong which estimated to deliver 15 per cent RevPar growth in 2018. "To get rich is glorious". The ghost of Paramount Leader

Deng whispers to me as I scan my Bloomberg screen for investment ideas. One country, two systems means investing

in Hong Kong hotels in 2018 is arguably one path to Dengian glory. The Hong Kong dollar is pegged to the US dollar, down nine per cent in 2017. Macau is on a roll after Beijing's corruption crackdown ends. All good.

It is never prudent to invest in hotels in cities where land is not scarce or supply is not constrained, as is not the case in Hong Kong. When hotel occupancy rates reached 90 per cent, supply growth is a mere three per cent, Chinese

overnight arrivals momentum begins to rise and revpars (revenue per available room) surges 10 per cent, there is

invariably serious money to be made in Hong Kong hotel shares.

Lee Ka Shing, Asia's wealthiest billionaire and Mr Hong Kong, just sold a central office tower for HK$33,000 ($4,225) a

square foot. It makes no sense to me to invest in the surreal, stratospheric commercial property market on the eve of a historic regime change and tightening cycle at the Federal Reserve. In fact, if I was a developer in Hong Kong (which I

am sadly not), I would convert dodgy two star hotels in Kowlon, Wan Chai, Aberdeen or Causeway Bay into "office blocks" to reap a triple bagger return. This can, of course, be replicated in the stock market on the netherworld of the

Hang Seng index - Emperor Hotel in Suzy Wong's Wan Chai homegirl block. I believe the opening of the Water World at

Ocean Park, the expansion of Hong Kong Disneyland expansion and the Kowloon waterfront project (Chinese tea houses, theatres, museum etc) will attract Mainland Chinese budget tourists to three/four star hotels. This is especially

true since the Express Link will connect Hong Kong to the Canton/Shenzhen high speed rail network, the demographic heart of South China. This will be a game changer for Hong Kong budget tourism.

Risks? Interest rates will rise in 2018. Airbnb is a threat but Hong Kong has one of world's lowest flat vacancy rates and

the flats are shoeboxes in any case. The big money Chinese with homes on the Peak or flats in Central will scorn Airbnb, which is not a licensed hotel operator. South China group travellers have no Airbnb solution. Skype is a greater

threat to five-star hotels than Airbnb. Hong Kong suffered traumas from SARS or political shocks like the Tiananmen Square massacre, Umbrella Revolution or the Asian flu. In 1998 when Asia melted down or 2004, when SARS shut

down Hong Kong, hotel occupancy ratios plunged to 10 per cent or lower. North Korea is the obvious geopolitical risk for 2018, as is terrorism risk from say, Tibetan or Uighur militants. My call? The Year of the Dog in Chinese zodiac. Yet

if my call is right, three star hotel operators will be no "dogs of the Hang Seng" at all LOL.


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John Allen BSc MRICS

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Jenny Weidling BA (Hons)

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NEWS BRIEF 52 - Asteco · 2017-12-24 · and propagate our environment…share insights and...

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