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RESEARCH DEPARTMENT
NEWS BRIEF 02
SUNDAY, 13 JANUARY 2019
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REAL ESTATE NEWS
UAE / GCC / MENA
MENA CONSTRUCTION SECTOR TO GROW AT FASTEST PACE GLOBALLY ON
GOVERNMENT SPENDING
SAUDI ARABIA'S NON-OIL PRIVATE SECTOR GROWTH COOLS OFF IN DECEMBER
UAE PRIVATE SECTOR ECONOMY SLOWS IN DECEMBER ON LOWER OUTPUT AND
ORDERS
2019 OUTLOOK: UAE PROPERTY WILL EXPERIENCE RESILIENCE THIS YEAR
2019 OUTLOOK: HOW THE UAE ECONOMY IS ON THE UPSWING
PROPERTY FIRM SAVILLS REBRANDS IN GULF AFTER CLUTTONS ACQUISITION
NEW $117M OMAN SHOPPING MALL TO OPEN IN JANUARY
SAUDI ARABIA ANNOUNCES PLANS FOR MAJOR ENTERTAINMENT COMPLEX IN
RIYADH
HYATT REINTRODUCES REGENCY HOTEL BRAND IN KUWAIT
CITYMAX HOTELS SET TO OPEN FIRST PROPERTY IN SAUDI ARABIA
2019 OUTLOOK: GULF REGION'S HOTEL INDUSTRY IS RESILIENT AND WILL
CONTINUE TO PERFORM WELL AMID CHALLENGES
WHAT INFLUENCES YOUR HOME MORTGAGE RATE?
TIGHTENING REGULATIONS ALONE WON’T AID UAE REAL ESTATE
WHY NEW GENERATION HOME BUYERS PREFER CONTEMPORARY DESIGN
GCC ECONOMIES TO FOCUS MORE ON DIVERSIFICATION
UAE TO BE FASTEST GROWING GCC ECONOMY IN 2019: IIF
UAE TO GROW 3% IN 2019: WB
DUBAI
HOMEFRONT: 'WHAT ARE THE BEST DUBAI VILLA OPTIONS FOR A BUDGET OF
DH185,000?'
DUBAI SCRAPS BANK GUARANTEES REQUIRED TO SET UP TOURISM COMPANIES
TRADERS TO RECEIVE 50% REDUCTION ON COMMERCIAL FINES IN DUBAI
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REAL ESTATE NEWS
EMAAR UNVEILS PALACE RESIDENCES IN DUBAI CREEK HARBOUR
DUBAI RULER LAUNCHES NEW POLICY TO RAISE UAE LIVING STANDARDS
AVERAGE DUBAI PROPERTY PRICES SOFTEN FURTHER BY 4%
DUBAI RENTS, SALES PRICES TO CONTINUE DOWNWARD SLIP IN 2019, SAYS
ASTECO
DUBAI'S NAKHEEL STARTS WORK ON PALM TOWER INFINITY POOL
UAE DEVELOPER AZIZI AWARDS $58.8M CONTRACTS FOR DUBAI PROJECTS
A DUBAI DEVELOPER FIXATED ON BUILDING TO RENT OUT
DUBAI PROPERTY DECLINES PICK UP SPEED AS MORE UNITS COME INTO MARKET
DUBAI REALTY HOPES WEAK DOLLAR BREATHES NEW LIFE INTO MARKET
HILTON AND AW ROSTAMANI GROUP TO DEVELOP 458-ROOM HOTEL IN BUR
DUBAI
YOUR HOUSE RENT IN DUBAI IS LIKELY TO FALL THIS YEAR
READY-TO-MOVE-IN HOMES GAIN IN POPULARITY IN DUBAI
NAKHEEL HAS A BUSY YEAR FOR PROJECT DELIVERIES
DIFC 2.0: A GLOBAL INVESTMENT HUB IN THE MAKING
DUBAI HOUSE PRICES TO DROP 5 TO 10% MORE THIS YEAR
ABU DHABI
ABU DHABI'S KIZAD ATTRACTED DH1.5BN FDI IN 2018, CEO SAYS
OVER 11,000 ABU DHABI HOMES SET TO BE COMPLETED IN 2019
ALDAR UNVEILS NEW $544M MIXED-USE PROJECT IN ABU DHABI
KIZAD LAUNCHES POLYMERS PARK
NORTHERN EMIRATES
AL HAMRA: KEY PLAYER IN RAK TRANSFORMATION
PARKS, GREEN SPACES WORTH DH100 MILLION BUILT IN SHARJAH
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REAL ESTATE NEWS
INTERNATIONAL
ASIA'S PROPERTY MARKETS JOIN THE GLOBAL SLUMP
ABU DHABI SAID TO MULL SALE OF NEW YORK'S CHRYSLER BUILDING
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ASIA'S PROPERTY MARKETS JOIN THE
GLOBAL SLUMP Wednesday, January 09, 2019
Asia is finally succumbing to the global property slowdown that’s jolted homeowners and investors from
Vancouver to London, with markets in Singapore, Hong Kong and Australia showing fresh signs of softening.
The economic ramifications could be serious. Lower house prices and higher mortgage rates will not only dent
consumer confidence, but also disposable incomes, S&P Global Ratings said in a report last month. A
simultaneous decline in house prices globally could lead to “financial and macroeconomic instability,” the IMF said
in 2018 study.
While each city in the region has its own distinct characteristics, there are a few common denominators: rising
borrowing costs, increased government regulation and volatile stock markets. There’s also dwindling demand
from a force so powerful it pushed prices to a record in many places - Chinese buyers.
“As China’s economy is affected by the trade war, capital outflows have become more difficult, thus weakening
demand in markets including Sydney and Hong Kong,” says Patrick Wong, a real estate analyst at Bloomberg
Intelligence.
Hong Kong
After an almost 15-year bull run that made Hong Kong notorious for having the world’s least affordable property
market, home prices have taken a battering.
Values in the city have fallen for 13 weeks straight since August, the longest losing streak since 2008, figures from
Centaline Property Agency show. Concerns about higher borrowing costs and a looming vacancy tax have
contributed to the slide.
The strike rate of mainland Chinese developers successfully bidding for residential sites is also waning, tumbling
to 27 per cent in 2018 from 70 per cent in 2017, JLL’s recent Residential Sales Market Monitor. Of the 11
residential sites tendered by authorities last year, only three were won by Chinese companies.
“The change in attitude can be explained by a slowing mainland economy,” says Henry Mok, JLL’s senior director
of capital markets. “Throw in a simmering trade war between China and the US, the government has taken actions
to restrict capital outflows, which in turn has increased difficulties for developers to invest overseas.”
Singapore
Home prices on the island, which regularly ranks among the world’s most expensive places to live, posted their
first drop in six quarters in the three months ended December. Luxury was hit the hardest, with values in prime
areas sinking 1.5 per cent.
Government policies are mainly to blame. Cooling measures implemented unexpectedly in July included higher
stamp duties and tougher loan-to-value rules. Extra constraints since then have included curbs on the number of
“shoe-box” apartments and anti-money laundering rules that imposed an additional administrative burden on
developers.
It’s all worked to put the brakes on a home-price recovery that only lasted for five quarters, the shortest since
data became available.
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“Landed home prices, being bigger ticket items, have taken a greater beating as demand softened,” says Ong Teck
Hui, a senior director of research and consultancy at JLL. In Singapore, most people live in high-rise apartments,
called housing development board flats. Landed homes by contrast occupy their own ground space.
Sydney
Sydney-siders have begun to wonder - what sort of economic fallout will there be from the wealth destruction
that comes with the worst slump in home values since the late 1980s?
Average home values in the harbor city have fallen 11.1 per cent since their 2017 peak, according to CoreLogic
data released earlier this month - surpassing the 9.6 per cent top-to-bottom decline when Australia was on the
cusp of entering its last recession.
While prices are still about 60 per cent higher than they were in 2012, meaning few existing homeowners are
actually underwater, it’s economist forecasts of a further 10 per cent fall that’s making nervous investors think
twice about extraneous spending.
The central bank is also worried that a prolonged downturn will drag on consumption and with the main
opposition Labour party pledging to curb tax perks for property investors if it wins an election expected in May,
confidence is likely to be hit further.
Earlier this month, treasurer Josh Frydenberg urged the nation’s banks not to tighten credit any more as the
deepening downturn threatens to weigh on the economy.
Shanghai, Beijing
A crackdown on overheating prices has hampered sales and left values in the nation’s biggest cities around 5 per
cent below their peak. Rules on multiple home purchases, or how soon a property can be sold once it’s bought,
are starting to be relaxed, and there are giveaways galore as home builders try to lure buyers.
One developer in September was giving away a BMW Series 3 or X1 to anyone wishing to purchase a three-
bedroom unit or townhouse at its project in Shanghai. Down-payments have also been slashed, with China
Evergrande Group asking for just 5 per cent compared with the usual 30 per cent deposit required.
“It’s not a surprise to see Beijing and Shanghai residential prices fall given the curbing policies currently on these
two markets,” says Henry Chin, head of research at CBRE Group. An index that measures second-hand home
prices in Beijing has been falling since September while one that tracks Shanghai has been on the decline now for
almost 12 months, he says.
Source: The National
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HOMEFRONT: 'WHAT ARE THE BEST DUBAI
VILLA OPTIONS FOR A BUDGET OF
DH185,000?' Wednesday, January 09, 2019
Our family is growing; we have two sons with another due in March. We live in a three-bedroom apartment but
now think a villa would be best. Which areas are offering the best value for rental? We have a budget of
Dh185,000 per year and could do one or two cheques if needed to secure a better deal. I work in Jumeirah Lake
Towers and my wife in the Dubai International Financial Centre. PF, Dubai
The rental property market saw softening prices in 2018 and with more in inventory coming on stream, the future
looks to be more of the same with in some cases even better rental deals to be had in 2019. Presumably you
would be looking at four-bed houses now that your family is growing so given your location of work and budget
constraints, I recommend the following areas, where there are many choices of great properties.
1. Al Furjan
This is presently the only villa/townhouse community within walking distance to the Metro - though the line is still
under construction. In this community, a four-bed townhouse can be found for as low as Dh110,000 up to
Dh140,000. Detached four-bed phase 2 villas of approximately 4900 square foot can be found from Dh156,000 to
Dh200,000.
2. Jumeirah Park
This is a convenient location for access to JLT. A four-bedroom Nova villa, for example, starts from Dh165,000.
3. Jumeirah Islands
This location is ultra convenient for JLT, with four-bed townhouses starting at Dh180,000. Being able to offer the
rent cheque in one or two payments will put you in a strong bargaining position, so I’m sure you will find exactly
the right property in no time.
Is there a limit on how much my landlord can increase my rent by in Dubai? We have been in our business Bay
apartment for three years and it has been going up by Dh5,000 year-on-year. We now paying Dh110,000. AW,
Dubai
A landlord is legally only allowed to raise the rent as per the Real Estate Regulatory Agency rental calculator. The
maximum rent increases allowed is as per Decree 43 of 2013, which determines the increase in rent for
properties in the emirate of Dubai.
As per Article 1:
• Any property rental value that is less than 10 per cent of the average similar rental amount is not entitled to any
increase in rent.
• When the rent is less than between 11 to 20 per cent of the average similar rent, a 5 per cent increase is allowed.
• When the rent is less than between 21 to 30 per cent of the average similar, a 10 per cent increase is allowed.
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• When the rent is less than between 31 to 40 per cent of the average similar, a 15 per cent increase is allowed.
• A 20 per cent increase on the rent is allowed if the rent is less by more than 40 per cent of the average similar
rent.
If your landlord insists on an amount higher than the amounts stated above, and you cannot arrive at an
agreement, you will have no choice but to vacate and seek alternative accommodation.
Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for 34 years in
London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only.
Source: The National
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MENA CONSTRUCTION SECTOR TO GROW
AT FASTEST PACE GLOBALLY ON
GOVERNMENT SPENDING Tuesday, January 08, 2019
The construction sector in the Middle East and North Africa will grow at the fastest pace globally in 2019 as
regional governments continue to invest in infrastructure projects and rebuild conflict areas, according to a new
report.
The Mena construction industry is estimated to grow on an average 7.5 per cent year-on-year in 2019 and will
expand at an average of 6.8 per cent every year until 2022, Fitch Solutions said in a report on Tuesday. Oman,
Egypt and Iraq will drive most of the region's construction activity.
"Our bullish forecast is underpinned by strong government support for infrastructure development, expansive
economic diversification plans, investment to improve logistics connectivity, and reconstruction efforts in conflict
zones," Fitch Solutions said.
The construction sector in the broader region, particularly in the six-member economic bloc of the GCC that
heavily relies on the sale of hydrocarbons for revenues, took a hit after sovereigns in the region suspended
construction projects on the back of a three-year oil price slum. Oil prices, which fell below $30 a barrel in the first
quarter of 2016, have since recovered as governments seek to build sectors from financial services to tourism.
Of the 16 countries tracked by Fitch Solutions in the region, all are expected to see growth with the exception of
Yemen, where it forecasts a 1.8 per cent contraction as the country's four-year civil war has crippled the
construction sector.
Efforts to rebuild key infrastructure in Libya and Iraq, where the security situation is expected to improve, will
drive construction growth, the report said.
Fitch Solutions expects efforts by the Arabian Gulf states to diversify their economies away from oil and their
plans to build large-scale developments such as Dubai Expo 2020-related projects, the Riyadh Metro and Oman's
plastics industry complex, will be a boon for contractors.
"Government spending on infrastructure will continue to be a crucial factor supporting construction industry
growth," the report noted.
Egypt's construction sector is projected to grow 10.8 per cent year-on-year in 2019 as government investment
backs a packed pipeline of projects aimed at addressing inadequate infrastructure and the needs of fast-growing
population, with numerous power, commercial, industrial and transport developments under construction.
The GCC's construction sector is expected to outperform the broader Mena region's average growth rate in 2019.
The UAE and Saudi Arabia will grow below the regional average at 6.4 per cent and 5.5 per cent respectively,
partly because both have a well-developed infrastructure network and have already implemented some of their
plans for economic diversification, the report said.
Source: The National
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DUBAI SCRAPS BANK GUARANTEES
REQUIRED TO SET UP TOURISM
COMPANIES Tuesday, January 08, 2019
Dubai will waive bank guarantees required to set up tourism companies as the emirate seeks to lower the cost of
doing business and attract investments in line with government initiatives to stimulate the economy.
The move will exempt more than 2,000 travel and tour operators from bank guarantees worth a total of about
Dh250 million and free up capital to reinvest in their businesses, Dubai Tourism and Commerce Marketing said in
a statement on Tuesday.
"Relaxing regulations in support of the business community, especially supporting start-ups and SMEs, is
fundamental for sustained sector growth," Helal Almarri, director-general of Dubai Tourism, said. It is "a very
positive signal for prospective investors and new ventures to launch tourism projects by taking advantage of the
quick and hassle-free processes in place”.
Dubai has slashed various corporate and government fees as part of efforts to increase the emirate's
competitiveness and stimulate business growth after the introduction of a five per cent value-added tax (VAT) last
year. The emirate has set a target to attract up to 25 million visitors annually by 2025 and to become the world’s
most visited destination. Tourism numbers remained flat at 11.58m visitors in the first nine months of 2018
compared to the same period in 2017, according to Dubai Tourism data. The rate of annual passenger growth at
Dubai International Airport in 2018 has decelerated after years of massive expansion.
Before the new deregulation measure, tourism companies were obliged to provide bank guarantees ranging from
Dh100,000 to Dh600,000 as a pre-condition to acquire a trade license from the Department of Economic
Development (DED). The amount depends on the type and number of business activities that the company will
engage in.
The DED totaled the bank guarantees paid by each of the 2,000 companies to arrive at the Dh250m figure, which
it will exempt operators from paying.
Going forward, investors will no longer need to provide bank guarantees to Dubai Tourism to set up tourism
companies or offer travel and tour-related services in the emirate.
Dubai Tourism earlier proposed a plan to attract more transit passengers to visit the emirate, including
introducing time-share accommodation to attract more families and luxury yachts to stopover in Dubai.
Last year, Dubai slashed aviation and municipality fees as part of initiatives aimed at making it easier to do
business. The emirate will scrap 19 fees related to the aviation industry as it seeks to attract more than Dh1bn of
foreign investments into the sector.
In seeking to diversify its economy from oil, Dubai focused on developing its aerospace sector as part of plans to
boost non-oil revenue, transform the city into a business hub, create jobs and attract tourists.
Open-skies policies, large investments in infrastructure and a foreign investor-friendly business environment
spurred the development of the aviation industry. Aviation will account for 37.5 per cent of Dubai’s gross
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domestic product in 2020 and about 45 per cent of GDP by 2030 from 27 per cent in 2013, according to Oxford
Economics.
Dubai is the world’s fourth most-visited cities after Bangkok, London and Paris, according to a Mastercard annual
survey in 2018.
Source: The National
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SAUDI ARABIA'S NON-OIL PRIVATE SECTOR
GROWTH COOLS OFF IN DECEMBER Thursday, January 10, 2019
Saudi Arabia’s non-oil sector growth cooled off in December, however, the companies in the biggest Arab
economy reported a sustained increase in output on the back of rising demand for goods and services, a survey
found.
The Emirates NBD Purchasing Managers’ Index for Saudi Arabia eased to 54.5, down slightly from November's 11-
month high of 55.2. A reading above the 50-mark indicates growth and below 50 signals contraction. The index is
a composite indicator designed to give an overview of operating conditions in the non-oil private sector economy.
The survey is sponsored by Dubai's biggest lender, Emirates NBD, and produced by IHS Market.
Despite easing since November, output growth last month remained quicker than the average over 2018 as a
whole. The survey indicated that business activity had risen in part due to stronger demand, with companies
noting a further - albeit slightly slower - increase in inflows of new business. New export orders were up for a
third straight month but only fractionally, indicating the pick-up in demand was centred on the domestic market,
it added.
While underlying market conditions in the kingdom were reported to have improved, the survey continued to
point to strong competitive pressures across the private sector and, on average, companies reduced selling prices
to help support sales.
The December’s decrease in average output charges was more marked than seen in the penultimate month of
the year.
“There was a small squeeze on margins as firms reported slight increases in both purchase prices and staff pay,
though costs pressures in general were muted by historical standards,” the survey added.
The latest data showed the continuation of a weak rate of employment growth across the non-oil private sector.
“December’s increase in staffing numbers was in fact the smallest since April 2017, with the vast majority of
companies keeping headcounts unchanged from the month before,” according to the survey. “Similarly, the rate
of growth of purchasing activity also eased, down to the weakest recorded in the survey’s nine-and-a-half-year
history. Stocks rose more slowly as a result, while average lead times on purchased items shortened.”
Source: The National
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UAE PRIVATE SECTOR ECONOMY SLOWS IN
DECEMBER ON LOWER OUTPUT AND
ORDERS Thursday, January 10, 2019
The growth in the UAE's non-oil economy was moderate in December, expanding at its slowest level since
October 2016, as output and new orders fell, according to a survey.
The seasonally-adjusted Emirates NBD UAE Purchasing Managers’ Index, a composite indicator that gives an
overview of operating conditions in the non-oil private sector economy, dropped to 54 in December from 55.8 in
November, the lender said on Thursday. A reading above 50 indicates expansion, while a reading below 50 signals
contraction. The report is sponsored by Dubai’s biggest lender and compiled by IHS Market.
The drop in the headline figure reflected smaller contributions from all five constituent indices, suggesting a
broad slowing of growth across the non-oil private sector at the end of 2018.
The latest expansion of business activity was solid overall as new orders increased again, but was slower than
growth in November. New orders rose at the weakest pace since August. The offering of discounts in a
competitive marketplace reportedly contributed to rises in both activity and new business, according to the
survey.
“Efforts to control costs in a competitive environment led companies to leave their staffing levels broadly
unchanged and reduce their stocks of purchases for the first time in four months,” the survey found.
Efforts to control costs discouraged companies from hiring additional workers at the end of 2018, despite
increasing new business.
December data signalled a slowdown in the rate of growth in new export business. Although orders from abroad
increased for the ninth consecutive month, the rate of expansion was the joint-weakest in this sequence.
Anecdotal evidence suggested that new export business had mainly been secured from clients in neighbouring
countries, the survey said.
Companies generally remained optimistic that business activity will continue to increase over the course of 2019.
Optimism was based on expectations of improving economic conditions and success in securing additional sales
over the next 12 months.
Source: The National
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ABU DHABI'S KIZAD ATTRACTED DH1.5BN
FDI IN 2018, CEO SAYS Sunday, January 06, 2019
Abu Dhabi’s Khalifa Industrial Zone (Kizad) attracted Dh1.5 billion in foreign direct investment during 2018 and
expects to see inflows up to $3bn annually, according to its chief executive.
"Total investment in Kizad is around $60bn,” Kizad chief executive Samir Chaturvedi told reporters.
“Every square kilometre to get fully developed needs around $800m to $1bn in terms of industrial base
development and everything else. Our first phase has been around 50 square kilometres, including the port, and
we’re talking almost around $17 to $18bn,” he added.
Mr Chaturvedi was speaking at the signing of a collaboration agreement between Kizad and Abu Dhabi National
Oil Company (Adnoc) to develop a polymers park within the industrial free zone, adjacent to the $7bn Khalifa Port.
The agreement, which follows Adnoc’s announcement last year of a downstream strategy, including plans to
double refining and and triple chemicals capacities, will see the development of the park to diversify options for
export of products, the state oil company’s downstream director Abdulaziz Abdulla Alhajri told The National on
the sidelines of the event. Borouge, the UAE’s largest chemicals company, which is 60 per cent owned by Adnoc
will also be part of the development of the polymers park, which is expected to be completed by 2025.
The park, which is expected to attract $1.5bn in investment over the next five years will use the facilities of the
adjacent Khalifa Port and Cosco Terminal, launched last year, to reach export markets.
"Abu Dhabi Port launched last month the Cosco terminal, this brings around 2.5 million container capacity,” said
Mr Chaturvedi.
"This capacity is expected to go up by 8 million by 2022-25. All this capacity is being created for the industrial
growth of Abu Dhabi and the regional market that we want to support, so there’s ample capacity, the
infrastructure has been built to support almost 20 million containers,” he added.
Khalifa Port last month inaugurated a $430 million terminal, which will be operated by China’s Cosco Shipping
Ports on the basis of a 35-year concession agreement. Kizad is expected to see increased Chinese investment on
the back of growing trade and logistics ties.
"Later this month we’ll be doing the groundbreaking for a passenger car kind of tyre [plant] with ten million tyres
a year production,” said Mr Chaturvedi.
He confirmed the investor was Chinese, and declined to comment on the value of the investment.
Kizad, currently executing phase one of its industrial development, had leased out 65 per cent of the stretch of 50
square kilometres of land and will announce the master plan for phase two early next year.
"By 2020-21, we should be able to completely sell out this area, the phase one. Phase two, we have already
started master planning 182 square kilometres of area, which is on the east of E11 in Abu Dhabi and master plan
will be finalised by early next year,” said Mr Chaturvedi.
Phase two, once completed, would see $100bn in investment upon completion by 2050, he added.
Source: The National
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TRADERS TO RECEIVE 50% REDUCTION ON
COMMERCIAL FINES IN DUBAI Monday, January 07, 2019
Dubai's Department of Economic Development is reducing commercial fines for traders by 50 per cent and
implementing an automatic settlement system that generates a text message alert for fines.
"The Department of Economic Development is proud to launch initiatives based on the vision and directives of
our leadership, especially when 2019 begins as the Year of Tolerance," said Mohammed Lootah, chief executive of
the department's commercial compliance and consumer protection division.
"The automatic fine settlement facility will contribute to enhancing happiness in Dubai and the emirate’s position
across global competitiveness indicators."
Previously, trading customers had to request a settlement on which the system verified the trader’s eligibility for
any reduction in fines. Mr Lootah said the department received more than 4,650 fine settlement requests in 2017
and 2018 under the previous system.
"The net value of fines settled under the 50 per cent reduction in 2017-2018 was Dh23.4 million. We believe that
the new automated system will be smoother and more flexible as it will automatically adjust the fines and benefit
more business owners," he said.
The reduction is applicable only on fines issued for the first offence in a calendar year and is being overseen by
Mr Lootah's division.
Total trade volumes in Dubai’s economic free zones grew by 22 per cent year-on-year in the first nine months of
2018, making a significant contribution to the emirate’s economy, said the department, which released a report
last month.
Free zone trade hit Dh394bn, accounting for 41 per cent of Dubai’s total trade during the period, according to the
Dubai Free Zones Council, the authority that oversees the emirate’s 24 free-trade areas, which include Dubai
International Financial Centre, Dubai Media City, Jebel Ali Port zone and others.
China topped the list of Dubai’s most significant free-trade partners with a total trade volume of Dh59bn over the
period. Saudi Arabia was second with Dh34.2bn, closely followed by India with Dh34bn.
Total imports in free zones amounted to Dh215bn, while exports and re-exports totalled Dh179bn.
Overall, the free zones generated 31.9 per cent of Dubai’s gross domestic product, the council said.
Source: The National
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EMAAR UNVEILS PALACE RESIDENCES IN
DUBAI CREEK HARBOUR Saturday, January 12, 2019
Palace Residences, a five-star waterfront branded residence development, has been launched by Emaar
Properties in Dubai Creek Harbour.
Palace Residences will bring a boutique waterfront living experience for residents with branded 1, 2, 3 and 4-
bedroom apartments, a statement said.
It added that the homes will be serviced on demand by Address Hotels + Resorts, the luxury hotel and resorts
brand.
Investors will have several benefits including 5-year property management services by Emaar, 50 percent discount
on membership at the Palace Dubai Creek Harbour Spa and pool, as well as 25 percent discount on food and
beverage at the hotel’s outlets.
Palace Residences are adjacent to the upcoming 121-room Palace Dubai Creek Harbour hotel featuring a range of
dining choices and luxury hotel services.
Residents will have access to a host of exclusive amenities in both the residential towers and the hotel including a
rooftop infinity edge swimming pool, signature rooftop lounge and grill, a gymnasium, 24x7 concierge service and
valet parking.
Residents will also be able to use the hotel’s services and amenities on demand, including a modern spa, meeting
rooms, 5-star deluxe hotel service, and all-day dining outlet.
The first homes in Dubai Creek Harbour are scheduled for handover early in 2019. Over 5,000 residents are set to
move in to their homes in Creek Marina this year, with over 12,750 residents to move in next year.
Palace Residences is the first launch in the six square kilometre mega-development in 2019.
Source: Arabian Business
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DUBAI RULER LAUNCHES NEW POLICY TO
RAISE UAE LIVING STANDARDS Thursday, January 10, 2019
Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has launched a
new national policy which aims to improve living standards in the UAE.
The policy seeks to create "vital residential communities", providing a new model of life in the country, in line with
the National Agenda of the UAE Vision 2021 and the UAE Centennial 2071, state news agency WAM reported.
It includes six key components - a suitable location, integrated facilities, cohesive communities, areas for
interactive living, cultural participation, and smart systems - to prevent the isolation of residential
neighbourhoods and facilitate transportation and communication.
According to the policy, residential communities must contain certain facilities that will support the lives of their
residents and provide a "rich residential experience" such as shared gardens and sporting facilities.
Sheikh Mohammed bin Rashid Al Maktoum said the UAE prioritises the quality of life of its citizens, while its
government has prioritised housing and is achieving sustainability in this vital sector.
"Our goal is to provide an integrated life for every citizen, and not only a place of residence. We want our
residential communities to bring people together and improve their health and social cohesion. The integrated
role of government sectors and authorities is to improve life quality in the UAE," Sheikh Mohammed bin Rashid
said in comments published by WAM.
"Today, we are beginning a new stage in developing vital residential communities, which facilitate and improve
the lives of all citizens without exception," he added.
Sheikh Mohammed directed relevant authorities to begin adopting the policy and activating its regulations in the
design and establishment of all the residential projects around the country.
The policy, which is developed by the National Programme for Happiness and Wellbeing, in cooperation with the
Sheikh Zayed Housing Programme, aims to determine new principles and standards, to create residential
communities that will improve the quality of life of citizens and their communities.
Source: Arabian Business
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ABU DHABI SAID TO MULL SALE OF NEW
YORK'S CHRYSLER BUILDING Wednesday, January 09, 2019
The Chrysler Building, one of the most iconic structures in New York, has been put up for sale by its owners,
Mubadala and real estate group Tishman Speyer.
The owners did not set a selling price, a source close to the sale told AFP on condition of anonymity, confirming a
report that was first published in The Wall Street Journal.
The building in midtown Manhattan, considered an Art Deco masterpiece, was acquired in 2008 by Mubadala,
which paid $800 million for a 90 percent stake.
Tishman Speyer, which had bought the building outright for a reported $210-250 million in 1997, retained a 10
percent stake.
Neither firm would offer a comment when contacted by AFP.
Tishman Speyer has hired real estate group CBRE to manage the sale of the building at the intersection of 42nd
Street and Lexington Avenue.
The announcement comes at a difficult time for the New York real estate market, especially in Manhattan.
Development of the Hudson Yards neighborhood, on Manhattan's West Side, will soon be complete, with more
than 1.6 million square meters of new office and residential space.
That has driven prices down even further for older buildings.
Another factor for potential buyers to consider: the land on which the Chrysler Building stands is one-third owned
by Cooper Union, a private university.
In 1997, Tishman Speyer negotiated a long-term lease with the university that ran through 2147. That deal called
for the annual rent to rise from $7.8 million in 2017 to $32.5 million from 2019-2027, according to documents
seen by AFP.
The value of the land alone was estimated at $679 million in late 2017.
The Chrysler Building, which opened in 1930, stands 1,046 feet (319 meters) tall. It was the world's tallest building,
but only for 11 months, when it was dethroned by the Empire State Building, also in Manhattan.
The building was a personal project for Walter Chrysler, the founder of the car manufacturer that bears his name,
but remained separate from the auto business.
Source: Arabian Business
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AVERAGE DUBAI PROPERTY PRICES SOFTEN
FURTHER BY 4% Wednesday, January 09, 2019
Dubai’s residential sector in the final quarter of 2018 witnessed a continuation of the tough trading conditions
experienced in previous quarters, according to new research by Chestertons.
Average apartment sales prices fell by 5 percent from the previous quarter while average villa prices softened by
3 percent. Year-on-year performance showed that apartment prices declined, overall, by 16 percent and villas by
13%.
Chestertons said the market is still favouring tenants as apartments saw a further 4 percent rental decrease with
a 3 percent drop for villas from the previous quarter, a continuation of a trend which saw an overall 12 percent
annual decline in apartment rental rates and 8 percent for villas.
Its Dubai Market Report Q4 2018, however, also showed that due to increased affordability, completed unit
transactions saw a 22 percent increase in transaction volumes over Q3 and an overall 7 percent uplift across
2018.
“The real estate market recovery in Dubai continues to be hampered by the increasing excess supply being
released to the market. However, our research has highlighted 41 percent of all residential transactions now
relate to completed units, up 6 percent from 2017, indicating a shift in buyers’ interests, with the trend set to gain
further momentum in 2019 as developers offer attractive incentives and long-term payment plans,” said Ivana
Gazivoda Vucinic, head of consulting, Chestertons MENA.
In the sales market, Q4 continued the trend seen throughout 2018 as prices witnessed further declines in both
the apartment and villa markets. In the apartment segment, prices in Dubai Sports City, International City and
Jumeirah Village Circle (JVC) all fell by 9 percent compared to the previous quarter.
Downtown Dubai and The Greens fell by 8 percent and 7 percent respectively but in contrast, Dubai Marina
remained one of the most resilient locations for investors and end users witnessing a decline of just 1 percent.
Annually, it was Discovery Gardens which saw the steepest decline, with prices dropping by 25 percent year-on-
year while the most resilient apartment location was Dubailand with just a 5 percent adjustment, Chestertons
said.
In the villa sales market, Palm Jumeirah observed a further decline in Q4 with a 7 percent decrease while the
Meadows and Springs remained unchanged from the previous quarter and Arabian Ranches fell by just 1 percent.
In the rental market, apartments in Dubai Marina, Dubai Silicon Oasis, Dubai Sports City, Dubailand and
International City, witnessed a 5 percent decline in Q4 while Downtown Dubai, JLT, JVC and Dubai Motor City all
declined by 4 percent from the previous quarter.
“From a rental perspective, Dubai continues to be a tenant-friendly market, with many making significant savings
by renegotiating terms and price with current landlords or moving to a cheaper location within their current
district or relocating to a new community,” said Vucinic.
The addition of new stock and limited new demand continues to place pressure on landlords with many of them
competing on several fronts to retain or attract new tenants with multiple cheques, rent-free periods and in some
cases agency fees being covered.
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According to Vucinic, this could result in landlords taking advantage of the holiday let market, which has been
legal in Dubai since 2016. “With demand for annual contracts weakening and rents continuing to fall, short-term
holiday rental could prove very lucrative, especially in popular locations, particularly as we edge ever closer to
Expo 2020,” she said.
Source: Arabian Business
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2019 OUTLOOK: UAE PROPERTY WILL
EXPERIENCE RESILIENCE THIS YEAR Tuesday, January 08, 2019
Many industries are undergoing quiet transformation as they adapt to the wave of change brought about by an
evolving global economic order, digitisation, and shifting consumer trends. The property industry is a perfect
example of one that is constantly advancing in response to external factors. This is particularly true of the sector
in the Middle East.
2018 has witnessed the introduction of new laws that will bolster the UAE’s reputation as a world-class business
hub and an economic regional powerhouse.
Legislation related to 100 percent foreign ownership, dual licensing and longer visas for highly skilled
professionals working in science, research and medical fields, has reinforced the country’s commitment to
developing a thriving knowledge-based economy and one of the world’s best destinations to conduct business.
Landlords of commercial real estate are evolving to embrace these changes.
We have seen an increase in the consolidation of office space across the UAE in 2018 and this trend will continue
as occupiers look to reduce costs and secure better or more flexible space. We have also noted an increasing level
of interest from Fortune 500 clients who are enthusiastic for overseas expansion and would like to explore
entering the Middle East market or grow their presence in the region.
Asia Pacific corporations are undertaking an increased level of exploratory activity in the Dubai market. Entering
new markets during challenging times with honest and transparent consultancy is key. The ability to provide
tailored solutions that are cost-effective, robust and evidence-based is incredibly important to new clients.
Dubai’s retail sector is highly competitive, among both occupiers and landlords. Differentiation and the
introduction of omnichannel shopping experiences in the former group and flexibility with the latter group will
prove the key to success for many brands.
As more malls, including the highly anticipated Meydan Mall, move closer to completion, it will be important for
existing facilities to continue to innovate to provide destinations that go beyond retail and offer a wealth of
entertainment, wellness and F&B experiences for the whole family. Research will be vital for many retailers.
Globally, some parts of the retail sector have been struggling to adapt to changing consumer trends and habits.
Increasingly sophisticated data analytics into the growing effect of digitisation and experiential shopping at brick
and mortar outlets will be crucial in driving efficiency and enabling retailers to successfully integrate their online
and offline propositions.
Logistics and warehouse space will be an important sector to watch in 2019. As more international brands look to
move into the UAE, sourcing high quality warehouse space – that can be customised to fit client needs – has never
been more important. This past year, we have seen a strong increase in demand for storage space. Access to
land remains a challenge, as does the small size of the rather opaque market. Opportunities, however, do exist in
this sector particularly for investors whose clients are eager to sign longer leases. As the popularity of online
shopping and same-day delivery continues, we can expect the demand for high-quality space to continue to rise
especially in strategic areas such as Dubai South.
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The recent changes in legislation in Saudi Arabia, including amendments to the structure of the Saudi Arabian
General Investment Authority (SAGIA), accelerated investment applications (establishment of businesses) and
direct property ownership for licensed companies, are sure to have a positive effect on the UAE.
Saudi’s entertainment and tourism sectors will grow rapidly, which will hopefully drive more new visitors to the
region. The complimentary offerings of both countries to large corporates will likely boost their commercial real
estate sectors. But the UAE in particular has proven itself adept at reacting to and initiating, new demand for real
estate. And I have no doubt that this will continue in 2019.
Source: Arabian Business
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2019 OUTLOOK: HOW THE UAE ECONOMY
IS ON THE UPSWING Wednesday, January 09, 2019
Let’s be honest; 2018 was a year of mixed fortunes for a raft of different sectors in the UAE and that has affected
market sentiment, no matter which way you want to slice it. That being said, there are fundamental reasons to
have optimism going into 2019, regardless of subdued and, in some cases, depressed sentiment.
Firstly, it’s important to remember that the International Monetary Fund thinks that UAE’s GDP will increase by 3.7
percent this year, a healthy and sustainable pace of growth that is the envy of many of the world’s most advanced
economies. The banking sector is in good shape, with rising profitability and strong capital levels expected to
translate into a pick-up in credit growth. I’ve picked five further areas that I think will be key to boosting growth
and confidence as we enter an important year for the UAE.
One of the great attributes of the UAE’s local governments is their willingness to make quick changes to
regulations when needed. We’ve seen some key changes in laws over the past year, the most prominent of which
has been to provide 10-year visas to certain sections of the expatriate population.
This will not only encourage entrepreneurs and students already in the UAE to stay, but it will also encourage top-
tier workers and investors from overseas to come to the country too.
Over the course of 2018, we’ve also seen an AED50bn stimulus package from the Abu Dhabi government, another
law to allow 100 percent foreign ownership of non-freezone firms, a relaxation on property lending regulations
for banks from the UAE Central Bank and more. While all of these were announced last year, I expect the impact
from these changes to be felt in 2019, and I’m sure that we can look forward to more amendments in the future
as well.
It doesn’t necessarily make the headlines, but foreign direct investment (FDI) into the UAE has remained
impressively strong in recent years. FDI inflows to the country were up by 7.8 percent on the previous year to
AED37.8bn in 2018, and the UAE alone makes up for almost a quarter of all inflows into the MENA region. That
figure is only set to grow following the introduction of the new law concerning foreign ownership of onshore
companies, which could see FDI grow by up to 20 percent this year.
After a difficult couple of years thanks to the low oil price and government-imposed austerity, the Saudi economy
came out of its first recession since 2009 in the first quarter of this year. Jadwa Investment thinks Saudi GDP will
reach 2.2 percent in 2018, before dipping slightly to 2.0 percent this year. That’s a marked improvement on the
0.9 percent decline the Saudi economy saw in 2016. In line with the return to growth has come another expanded
government budget for 2019, an improved fiscal deficit, increased consumer spending and higher foreign
reserves, which rose for the seventh straight month in October.
Why is this important for the UAE? As the Arab world’s biggest economy, Saudi Arabia is an important source
market for its neighbour, with Saudi nationals investing heavily in businesses and property across the UAE, as well
as visiting the country frequently for tourism and work. This year promises to be even more spectacular for
Sharjah, one of the region’s most diversified economies. Not only has UNESCO named Sharjah World Book Capital
for 2019, but it is also another Biennial year, with the city showcasing its status as the Middle East’s top cultural
hub.
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On top of that, the government of Sharjah has just announced yet another record budget, which will see almost
AED26bn spent on infrastructure, economic and social development over the course of 2019. That’s a 10 percent
rise on the year before, and is an impressive example of the government’s desire to invest even during what some
see as a challenging economic environment.
I still see Sharjah as the ‘hidden gem’ of the UAE real estate market. Ever since the government introduced a law
allowing the sale of property to all nationalities in 2014, the Emirate has witnessed exceptional growth, thanks to
strong demand for integrated, well-designed communities that are reasonably priced. Total real estate
transactions rose by 20 percent in 2017 on the previous year, and we’re hopeful that there will be a similar
pattern of growth in 2018.
No outlook on the UAE economy this year would be complete without a mention of Expo 2020. It seems like a
long time since Dubai won the right to host Expo, but I believe 2019 will be the year in which the wider economy
will really start to benefit.
While construction of the Expo 2020 site is on track and on schedule, there are a host of tenders that remain to be
issued for international pavilions, roads and infrastructure, and permanent offices that will remain after Expo. We
should see a host of contracts at the Expo site being handed out in early 2019, which will get the year off to a
positive start.
For Arada, 2019 promises to be another landmark year. We are about to begin the process of handing over our
first ever homes, as units in Phase 1 of Nasma Residences move towards completion. The entire community will
be completed in the first quarter of 2020, and we’ll also be launching the first phase of Aljada’s Central Hub, a new
leisure and entertainment destination for the UAE, which has been designed by Zaha Hadid Architects, in Q2. As a
new company, it’s time for us to deliver on our promises to our buyers and to the Sharjah community.
Source: Arabian Business
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PROPERTY FIRM SAVILLS REBRANDS IN
GULF AFTER CLUTTONS ACQUISITION Monday, January 07, 2019
International real estate advisor Savills has announced the rebrand of its Middle East business following the
acquisition of Cluttons Middle East.
The firm, which was previously represented by associates in the Middle East, has completed a successful six
month integration process with the region’s longest-established advisor Cluttons Middle East, which will now be
known as Savills.
It will operate across five countries including Bahrain, Egypt, Oman, Saudi Arabia, and the UAE, with seven offices
employing 230 people, offering the broadest geographic reach of any real estate consultant in the region.
Savills will further strengthen these in-country teams with new hires and key recruitment to grow the business
further, it said in a statement.
Savills said it will also expand its Middle East property management business with a specific focus on commercial
assets.
Steve Morgan, CEO of Savills Middle East, said: “Over the past six months, we have been fully immersing our
existing Middle East team with the international Savills brand, and refining processes for a seamless transition for
our clients. There are many complementary synergies and a lot of benefits for partnering with such a well-
established global entity, particularly for our customers who can access a broader range of international services
and networks.
"We believe there are significant growth opportunities from leveraging Savills’ global reach. Clients will benefit
from a team with a comprehensive regional presence and years of local knowledge and experience, backed with a
world-class international network and robust research covering all sectors and markets.”
James Sparrow, Savills EMEA CEO, added: "We have seen an extremely positive start from our newly acquired
Middle East business with some very exciting opportunities arising from the strong collaboration between our
teams both in region but across EMEA and beyond. They are a leading force in the Middle East and have shown us
they share our values and culture with a priority for the highest level of client care.”
Savills is a UK listed firm, established in 1855 with a global office network of over 600 wholly owned and associate
offices employing more than 35,000 people in over 60 countries throughout the Americas, the UK, Europe, Asia
Pacific, Africa and the Middle East.
Source: Arabian Business
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OVER 11,000 ABU DHABI HOMES SET TO BE
COMPLETED IN 2019 Sunday, January 06, 2019
Increased market supply and bearish market conditions led rental and sales prices to continue a downward trend
in Abu Dhabi, according to a new a Q4 market report from property services company Asteco.
According to Asteco, there were approximately 6,200 residential units delivered in the UAE’s capital in 2018,
including 4,500 apartments and 1,700 villas. Approximately half the supply was concentrated on Abu Dhabi’s
islands, including Al Reem and Yas Islands.
There were, however, a number of projects that were delayed and that are spilling over into 2019, such as the
anticipated Omega Tower on Reem Island.
Regarding rents, he report noted that average annual rents declined 10 and 9 percent, respectively, which Asteco
attributes to increased supply and market conditions.
Additionally, demand for office space was generally subdued in 2018 because of limited business and
employment growth. As a result, office rental rates for offices fell, on average, 4 percent, although several mid
and low-quality commercial buildings recorded increases of 10 percent or more.
The report added that off-plan properties – which were being offered at attractive rates with flexible payment
options – continued to generate interest and, in some cases, high demand.
Apartment sales prices, for their part, were found to have decreased 9 percent on average in 2018, with the
highest declines recorded in Marina Square and Sun & Sky Towers on Al Reem Island.
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In the villa market, sales prices softened 4 percent, with the highest decreases in Al Raha Gardens and Al Reef
Villas.
2019 Outlook
Asteco forecasts that approximately 11,200 residential units will be completed in 2019, including 2,350 on Reem
Island, 2,500 at Al Raha Beach, 1,300 on Yas Island and 1,250 on Saadiyat.
This new supply, in turn, is expected to exert further pressure on rental rates.
“Whilst some residents are expected to downsize and seek value-for-money properties, others will take advantage
of the increased choice at lower rates to upgrade,” the report added, noting that demand for office space will
likely remain “tepid”.
Sales prices are also expected to continue to soften, although Asteco believes that the rate of decline is expected
to slow towards the end of 2019.
Source: Arabian Business
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DUBAI RENTS, SALES PRICES TO CONTINUE
DOWNWARD SLIP IN 2019, SAYS ASTECO Sunday, January 06, 2019
Despite lower than anticipated handover volumes, there were steady rental rate declines across all asset classes
in Dubai in 2018, according to a Q4 real estate report from property services company Asteco.
In the report, Asteco said it recorded the delivery of 15,000 residential units over the course of the year, of which
12,000 were apartments and 2,750 were villas.
Additionally, office supply volumes picked up towards the end of the year, with an additional 2.86 million square
feet in total. According to Asteco, the pace of new projects eased over the course of the year as developers
“adopted a more cautious approach” in response to lower demand and growing supply.
Despite the overall handover volume being below expectations, Asteco said additional supply “was still significant”
and resulted in rental declines averaging 10 percent for apartments, 10 percent for villas, and 5 percent for
offices, although some areas “significantly” under or outperformed.
Sales prices across all asset classes were found to have declined by an average of 13 percent.
“Emphasis continued to be unit price points, as opposed to the rate per square feet,” the report notes. “The
steady decline in sales prices for completed projects has improved affordability and hence opened the market to
a wider investor pool and facilitated a rise in end-users and first-time buyers.”
2019 Forecast
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According to Asteco, construction activity during 2019 for committed projects is expected to continue unabated,
despite a slowdown in new project launches, largely due to construction-linked and post-completion payment
plans, which ensure that payments are linked to construction milestones.
The additional supply, combined with handovers previously scheduled for 2018, will see an additional 30,000
residential units and 3.6 million sq. ft of office space brought to the market.
While Asteco predicts that the additional supply will result in continued pressure on rents, the rate of decline is
expected towards the end of 2019. Generally low rents are also expected to help tenants move up in terms of
size, quality and location, the report added.
Sales prices are also expected to continue to fall in 2019.
“Although the focus will remain on affordable developments, transaction volumes are anticipated to rise as
residents take a longer-term view on living in Dubai,” the report added.
“While market conditions mean that it is unlikely that LTV [loan to value] ratios will change, we believe that
developers, banks and other financial institutions will become more creative and introduce solutions to bypass
the high down payment required to avail a mortgage.”
Source: Arabian Business
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DUBAI'S NAKHEEL STARTS WORK ON PALM
TOWER INFINITY POOL Tuesday, January 08, 2019
Master developer Nakheel has started work on the rooftop infinity swimming pool at The Palm Tower, its 52-
storey, luxury hotel and residential complex at the heart of Palm Jumeirah in Dubai.
Perched 210 metres above ground and covering 775 square metres, the infinity pool – one of the highest in the
world – borders all four sides of the building.
The pool – which will hold 930,000 litres of water – is on the 50th floor of The Palm Tower. Above the pool will be a
podium housing a 51st level speciality restaurant and a 52nd storey public viewing deck, 240 metres high.
Construction of the rooftop dining viewing deck complex will begin soon.
Located at the heart of Palm Jumeirah, The Palm Tower comprises a 289-room St Regis hotel, 432 luxury
residences and a number of dining and leisure facilities. The hotel occupies the first 18 floors, with fully-furnished
studios and one, two and three bedroom apartments on the upper floors.
Fit out of the St Regis – due to open later this year – has already begun, Nakheel said.
The Palm Tower is directly connected to the under-construction Nakheel Mall which is due for completion this
year.
Source: Arabian Business
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UAE DEVELOPER AZIZI AWARDS $58.8M
CONTRACTS FOR DUBAI PROJECTS Tuesday, January 08, 2019
UAE-based Azizi Developments has awarded a contract valued at over AED216 million ($58.8 million) to Chirag
Contracting to develop four plots with a total area of more than 1 million square feet.
The contract is divided into two parts with the first valued at AED164.8 million for developing three plots, with a
total area of over 769,515 square feet in phase one of Azizi Riviera, the flagship waterfront development in
Meydan One.
The second part of the contract is dedicated to a plot in Al Furjan with a total built up area of over 245,244 square
feet, which is valued at AED51.6 million.
Farhad Azizi, CEO of Azizi Developments, said: “Delivering our projects as per schedule is our top priority and a
commitment to our customers. Our new contract with Chirag Contracting, among several others, underlines our
focus on working with best-in-class contractors to develop our developments to the highest standards of quality
and aesthetics.”
Launched in July 2017, Azizi Riviera is the company's flagship community development inspired by the French
Riviera lifestyle.
Azizi Developments said it is on schedule with the progress of the project with several residences in the first
phase set to be handed over this year.
Upon completion, Azizi Riviera will have 71 mid-rise buildings, with over 16,000 residences including studios, and
one-bedroom, two-bedroom and three-bedroom apartments.
Source: Arabian Business
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ALDAR UNVEILS NEW $544M MIXED-USE
PROJECT IN ABU DHABI Tuesday, January 08, 2019
Aldar Properties on Monday announced the launch of its newest AED2 billion ($544 million) development,
Alreeman, in Alshamkha.
The mid-market, mixed-use development offers residential and commercial land plots available for purchase by
all nationalities, said the developer in a statement.
Alreeman is spread over an area of 2.8 million square metres and land plots include a series of residential clusters
that will feature single and multi-residential villas and apartments, complemented by retail space, F&B, mosques,
sports, education and commercial facilities, it added.
Sales for the land plots will commence on January 19, with prices starting from AED690,000 for villa plots and
AED4.69 million for commercial plots.
Alreeman will provide a network of walkable gardens, parks, open spaces interwoven with greenery and cycle
tracks that facilitate public life and social interaction.
Construction is expected to start this year with infrastructure enabled land targeted for handover to customers in
2021.
A key feature of Alreeman is the purchaser’s ability to design their villa or apartment building according to their
exact specifications within the approved GFA limits, said Aldar.
Talal Al Dhiyebi, CEO, said: “The launch of Alreeman builds on Aldar’s successful development strategy and further
expands our focus in to new areas of Abu Dhabi. Catering to the mid-income segment, this development
responds to market demand to live in a desirable community with a wide range of facilities while also appealing to
investors looking to construct apartment buildings or villas to generate recurring income.”
The development is in close proximity to some of Abu Dhabi's major infrastructure projects and lifestyle
destinations, including Yas Island, Zayed City, New Al Falah, Masdar City, Mohammed Bin Zayed City and Abu
Dhabi Airport Free Zone.
Source: Arabian Business
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NEW $117M OMAN SHOPPING MALL TO
OPEN IN JANUARY Tuesday, January 08, 2019
UAE-based retail giant Majid Al Futtaim has announced that its new mall in Oman is scheduled to open in January.
The announcement follows a site visit to the OR45 million ($117 million) City Centre Suhar development by a
number of Omani officials.
Husam Al Mandhari, senior mall manager – Oman – Shopping Malls at Majid Al Futtaim - Properties, welcomed
the officials on a behind-the-scenes tour in the final phase of construction on City Centre Suhar.
When operational, the mall will offer more than 120 stores, a nine-screen VOX Cinemas, a 7,348 sq m Carrefour,
entertainment experiences and a variety of dining options.
Located on Al Batinah main road, the mall will add 35,301 square metre of gross leasable area to the sultanate’s
booming retail sector, the company said in a statement.
It added that the opening of City Centre Suhar is part of Majid Al Futtaim’s investment plans to increase the
company’s total investment in the sultanate to OR705 million by 2020.
Source: Arabian Business
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SAUDI ARABIA ANNOUNCES PLANS FOR
MAJOR ENTERTAINMENT COMPLEX IN
RIYADH Thursday, January 03, 2019
Saudi Arabia plans to build an 100,000 square-metre entertainment complex in Riyadh, according to the state-run
Saudi Press Agency.
According to SPA, the Saudi Entertainment Ventures Company – a wholly owned subsidiary of the Public
Investment Fund – plans to build the complex on Riyadh’s Eastern Ring Road at the intersection of King Abdullah
Road.
Abdullah bin Nasser Al Dawoud, the chairman of the board of directors of the Saudi Entertainment Ventures
Company, said that the first-of-its kind project will include green and open areas for sporting activities,
entertainment and live shows.
Additionally, the complex will include a wide variety of local and international restaurants and cafes, as well as
cinemas.
The value of the investment was not disclosed.
Investments
The PIF has said that its combined projects will eventually be able to cater to more than 50 million visitors each
year, provide 22,000 direct jobs and contribute SAR 8 billion ($2.13 billion) to Saudi Arabia’s GDP by 2030.
In 2018, PIF established SEVEN with an initial funding amount of SAR 10 billion ($2.67 billion). The company has
announced plans to set up 20 entertainment complexes around the kingdom.
SEVEN also opened the kingdom’s first cinema in 40 years last year in partnership with AMC Group.
Other planned entertainment ventures in Saudi Arabia include a Six Flags in Qiddiya, which will also be capable of
hosting motorsports and cultural events.
Source: Arabian Business
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HYATT REINTRODUCES REGENCY HOTEL
BRAND IN KUWAIT Saturday, January 12, 2019
Hyatt Hotels Corporation has announced the opening of Hyatt Regency Al Kout Mall, marking the reintroduction
of the Hyatt Regency brand to Kuwait.
The opening marks the first of two Hyatt properties in collaboration with Tamdeen Group, the second of which is
Grand Hyatt Kuwait, set to open in 2020.
Hyatt Regency Al Kout Mall offers 200 guestrooms, including 53 Junior Suites, 67 Regency Suites and 14 two-
bedroom Premium Suites.
It also features a range of culinary experiences including Andiamo, an Italian restaurant, and 25,833 square feet of
flexible meeting spaces and the Regency Ballroom while Club Olympus offers a 24-hour fitness centre and sauna.
"With the convenient location of the property and our exceptional hotel facilities, we are thrilled to welcome
guests to Hyatt Regency Al Kout Mall, an ideal space for our guests to work, engage or relax," said Fadi Akeel,
general manager Hyatt Regency Al Kout Mall.
"We are excited to welcome the Hyatt Regency brand back to Kuwait," said Mohammed Jassim Khalid Al Marzouq,
chairman of Tamdeen Group. "We look forward to our continued collaboration and future openings in this
dynamic city."
Source: Arabian Business
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CITYMAX HOTELS SET TO OPEN FIRST
PROPERTY IN SAUDI ARABIA Friday, January 11, 2019
Citymax Hotels, part of Dubai-based Landmark Group, has announced the launch of Citymax Riyadh, scheduled
for mid-2019.
The company said the project is a key milestone for the mid-market brand, further strengthening its expansion
plans across the Middle East and North Africa (MENA) region.
Located in the Olaya district, which is the primary business district of Riyadh, Citymax Hotel Riyadh is the brand’s
first hotel in Saudi Arabia and the second outside of the UAE.
Citymax Hotels chief operating officer, Aly Shariff, said: “Mid-tier travel as a whole is on the rise, which puts us in a
very favourable position as the demand is certainly there and growing. This is especially true in Saudi Arabia, as
the Kingdom’s Vision 2030 to drive economic diversification has had a major impact on the hospitality industry.
"We are excited to introduce our brand to the Kingdom as we open our first Citymax Hotel in the capital, and
spearhead further development across the region.”
The three-star property will offer a total of 65 rooms, as well as an all-day dining restaurant, Citycafé and a
Lavazza coffee shop. Other facilities include meeting rooms as well as a fully-equipped gym and sauna.
Source: Arabian Business
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2019 OUTLOOK: GULF REGION'S HOTEL
INDUSTRY IS RESILIENT AND WILL
CONTINUE TO PERFORM WELL AMID
CHALLENGES Tuesday, January 08, 2019
I remember going to a hotel conference in the USA in 2001. It was the peak of the cycle, new hotel supply was
rising and demand was starting to fall off. A negative adjustment to hotel performance was clearly on the way.
However, hoteliers were in denial. One speaker said that there would be no downturn. A second accepted that
there might be – but was confident that it wouldn’t affect the cities in which his company ran hotels.
A third bought into the story of the downturn and freely admitted that it would indeed impact the cities where he
owned hotels. No problem though, he said, because his hotels were so well located that they would be little
affected. They were all wrong. When the crash happened, it swept everyone before it.
A similar mood of denial prevailed in the UAE at the start of 2018. At a debate held at the Gulf and Indian Ocean
Hotel Investors’ Summit in February, speaker after speaker was confident that Dubai, Abu Dhabi and Saudi Arabia
would all enjoy a “soft landing”. By April at Arabian Travel Market, the mood was darkening and by the HOFTEL
Members’ Summit in Dubai in October it was quite sombre.
At present, however, unlike the US downturns of 2001-2003 and 2008-2012, the market in the UAE is quite
stratified. Resort hotels in some of the markets like the Palm Jumeirah, Yas Island and Saadiyat are generally
doing reasonably well and in a few cases, booming. In contrast, hotels in downtown Dubai (Deira and Sheikh
Zayed Road) and downtown Abu Dhabi are being hit and having to discount rates heavily in order to fill up.
Meanwhile, concerns about oversupply are rising in Saudi Arabia and even Muscat.
Overall, it is clear that the next few years may be challenging for hotel and serviced apartment owners around the
region. What can they do to preserve their bottom lines?
The answer adopted by many hoteliers at the moment is to slash rates and suck in low-rate business. That
approach can work for a short-time, but if the supply issue lasts for several years, as it probably will, then it poses
the danger of dragging down the entire market.
However, there is a wide range of other approaches to support profits which are worth consideration. For
example, owners should consider reviewing their cost structures to see where fundamental changes can be
made.
These may include combining back office functions, “complexing” with other hotels sharing the same owner or
operator, and looking closely at their supplier contracts and their management agreements with operators to
ensure that key business partners are fulfilling all of their obligations.
Another option would be to seek out new market segments, especially from India, China and Africa as well as
South East Asia, the ASEAN region is still booming and flights from there are relatively inexpensive. The process of
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opening up these new markets involves genuine sales and marketing efforts rather than just sending out offers or
maximising e-commerce channels.
Owners should also review their use of under-utilised areas, for example, converting restaurants to meeting
rooms or vice versa; renting out some of the ground floor or even the parking and asking tricky questions like
“Can the GM’s office make way for a saleable suite?”
Now is the optimum time, if they can afford it, for owners to use the slow market as an opportunity to do
renovations. Finally, a number of owners with portfolios of hotels and serviced apartments are now moving from
management agreements to a franchise.
The good times will roll again one day. The region is extremely resilient, every destination is adding new
attractions and tourism infrastructures are being upgraded. In the meantime, owners don’t need to sit idly by and
suffer from lower profits. There is still plenty of scope for value-added asset management.
Source: Arabian Business
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A DUBAI DEVELOPER FIXATED ON
BUILDING TO RENT OUT Friday, January 12, 2019
Arif Mubarak never gets bothered that he is building residential communities and thousands of homes without
any plans to sell even one of them. Because his sole purpose — even fixation — is to keep renting them out.
So, this is one CEO of a real estate company in Dubai whose conversations are not peppered with “off-plan” or
“ready” properties. But if the subject veers towards “rent”, that’s when Mubarak gets all animated. As CEO of
Dubai Asset Management and a portfolio of 10 communities with a population of 100,000 tenants, guess he has
every right to do that.
“The sales market is there for them [residents] if they require it,” said Mubarak. “Our purpose is to enable them to
call Dubai home through the rental option. Rentals are still the majority in the real estate market in Dubai, and
that’s a fact.
“We believe that sector requires a lot of attention and there are tremendous opportunities to be explored,
whereby you can tap into a bigger spectrum of people rather than focusing on just sales.”
It was early last year that Dubai Asset Management came into being after the parent entity, Dubai Holding,
created new stand-alone businesses that includes Dubai Retail. The communities under Dubai Asset Management
include Remraam, Al Khail Gate 1 and 2, Dubai Wharf, and the Ghoroob and Shorooq clusters in Mirdif.
But the ongoing slowdown in Dubai’s property market is not just confined to the sales side … even rentals are
under constant pressure. So, isn’t this rental-only focus hurting his company’s bottom-line? More so as other
government-owned developers have a mix of properties for sale and rental.
Mubarak insists Dubai Asset Management has built in enough cushion against current market forces. “As we
speak right now, we are sitting at a 95 per cent occupancy rate across the board,” the CEO added. “On top of that,
the average stay within our communities is almost 4.5 years compared to market average which is 3.5 years.
“For me, it’s about building cohesive, fully-fledged building communities.”
But with rents sliding across the board, isn’t Dubai Asset Management seeing the need to adjust its own rates?
“We are flexible — we respond to customers and our communities. I say we’ve been able to hold our rental rates
better than the market in 2018 and also maintained our occupancy rates.
“This signals that we are heading in the right direction. We respond by offering a variety of options, including
flexible (rental) payments. (That means) multiple cheques, monthly payments rather than the traditional three or
four yearly cheques.
“It’s how much you understand the market. We need to understand what’s happening first — before jumping in
and giving options to customers.”
According to real estate consultancies, forecasts for the year suggest rents and sale prices will remain under some
duress. More handovers of homes at freehold communities will be the main contributing factor.
Amid these external factors, Dubai Asset Management is not solely reliant on the individual tenant to lease and
stay in its homes. Its portfolio has 40 per cent made up of corporate clients, who typically take long-term leases of
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between five and 10 years. Those long-term leases also do their bit for sustaining cash flows, and a the company
is offering this to “our other clientele, especially when it comes to renewals”.
But don’t call what the company does as a leasing agency … that’s unlikely to go down well with Mubarak. “We are
an asset manager — not a leasing agency or a property manager,” the CEO said. “It’s critical that you own it. One
of the successful models that we have seen is to manage the end-to-end life cycle journey of the customer, all the
way from the initial check-in of the apartment to the final check out. One of the successful measures, based on
customer feedback, is that the owner is there to support them and ensure they have a smooth process.
“We are one of the largest property asset management companies in the UAE. Being an asset manager who
actively develops, acquires and manages these assets, it’s critical for us.”
Would it mean the company would only build its own projects and not acquire what may come into the market
from other developers? “We are building our own communities — acquisition is an option but not a focus.
“As an institutional asset management company, we are market-driven and cautious when it comes to growth. It
is driven purely on evaluation and market trends. We are growing our portfolio within the existing land bank of
Dubai Holding land bank.”
Another ‘build-to’ model makes its mark
Anyone in the real estate space would have come across the ‘build-to-own’ or ‘build-to-rent’ strategies. Dubai
Asset Management wants to add ‘build-to-suit’ into this mix.
This is where it develops properties based on the specs provided in advance by corporate clients for their
workforce accommodation needs.
“The first one was on Al Ain Road, called Rahaba residence,” said Arif Mubarak. “It was built specifically for two
corporate clients and has 100 per cent occupancy. That could be an area for expansion. We are talking to a few
corporates and we see it as a product required in the market.”
CEO Profile
Arif Mubarak fast-tracked his way into senior positions at Dubai Properties as the real estate market eased its way
out of the downturn brought on by the global financial crisis in 2008-09. In fact, he was part of a generation of
Emiratis who came into management prominence at government owned enterprises during the period.
He has been at Dubai Holding for more than 18 years, and was a founding member of the management team
there. Mubarak was also founding member of Dubai Media City under the Tecom Group.
Source: Gulf News
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DUBAI PROPERTY DECLINES PICK UP SPEED
AS MORE UNITS COME INTO MARKET Wednesday, January 09, 2019
Dubai: Property prices in Dubai started falling at a faster pace towards the end of the year, most likely brought on
by the sheer volume of new homes being delivered. Much the same was being felt in the residential rental space
as well, according to the latest Knight Frank report.
The report estimates that in the three months up to November, values were down 4 per cent. Taken over a 12-
month timeframe, the rate of decline is pegged at 4.1 per cent.
On rentals, the three-month period saw a 3.9 per cent dip, while from a year-on-year perspective, the decline was
8.6 per cent.
“While demand had eased in 2018, price falls are more due to the considerable level of supply delivered in 2018
and that which is expected to be delivered in 2019,” the report notes.
Of the initial 32,727 units forecast to be delivered last year, Knight Frank reckons 22,476 units reached the finish
line.
But that’s still considerable given that in each of the previous three years, the tally was well under 15,000 homes
or so.
“This increase in supply, in addition to the unabsorbed supply from previous years has led to the extended
pressure on prices and rents which we are witnessing, this trend is expected to continue throughout 2019.”
What of buying activity? The first two quarters of 2018 proved quite burdensome, but since then the decline in
transactions has moderated with deal flows falling 3 per cent year-on-year to November 2018.
In Abu Dhabi, average sale prices were down 4.7 per cent in the year to November, with those on apartments
falling 4.4 per cent while those for villas or town houses declining by 4.9 per cent.
The biggest declines were for apartments on Al Reem Island, which fell 5.7 per cent, and on Saadiyat Island and Al
Reef villa areas, where prices are down 5.6 per cent apiece.
Rents across Abu Dhabi recorded an 8.7 per cent drop in the year to November.
Source: Gulf News
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AL HAMRA: KEY PLAYER IN RAK
TRANSFORMATION Wednesday, January 09, 2019
Ras Al Khaimah (RAK) has seen unprecedented growth in several key industry drivers in recent years, which has
resulted in a pipeline of residential, leisure, retail and hospitality projects to be delivered over the next few years.
A range of public and private initiatives has seen the emirate develop a reputation as a regional hub for world-
class, large-scale developments.
This isn’t surprising given the new vision of the emirate announced by the ruler His Highness Shaikh Saud Bin
Saqr Al Qasimi, where long-term, sustainable plans and strategies have been put in place to stimulate tourism
growth and develop the real estate sector.
This vision is shared by Al Hamra, one of the UAE’s foremost brands.
A leading master planner and premium luxury developer in the northern emirates, Al Hamra has been integral in
transforming the real estate, hospitality and retail landscape since launching in 2003.
“Ras Al Khaimah is emerging as a preferred investment and tourism destination leveraging its geographic location
and business growth potential,” said Benoy Kurien, Group CEO of Al Hamra.
“When combined with ambitious tourism growth targets of one million visitors by the end of the year and 2.9
million by 2025, it is easy to see why the emirate is looking forward to a fruitful future.”
Al Hamra Village is the group’s 77-million-sq-ft development consisting of 1.5km of beach line, 4,000 homes, five
hotels, including the luxurious Waldorf Astoria and recently opened Ritz-Carlton, an 18-hole championship golf
course and 200-berth marina.
It has seen the residential vertical of the business remain steady due to the value-for-money and attractive
lifestyle proposition.
Even against a backdrop of low-priced, smaller properties launched in Dubai’s affordable housing segment, Al
Hamra remains popular for end users and investors.
Larger property size, beachfront location, world-class amenities and a tried-and-tested sales strategy have
resulted in near 100 per cent occupancy. Due to strong demand and market dynamics, the company is preparing
to launch smaller town houses as second homes.
“Developers in RAK have always shown a certain amount of cautious restraint from a supply and demand
perspective. At Al Hamra we are meticulous in our market research and ensure when we launch a new product
the demand is there,” added Kurien.
From a retail perspective, Al Hamra is undergoing several enhancements to its malls, including a $100m (Dh367
million) expansion and upgrade to Manar Mall, which will see the gross leasable area double from 300,00 sq ft to
nearly 600,000 sq ft, adding a further 80 retail and food and beverage destinations.
As part of the development, Al Hamra has signed a management agreement with Emaar Hospitality Group to
operate a 250-room Rove Hotel, which will have access to the mall, further underscoring the cohesive effort to
boost visitor numbers to the emirate.
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Within Al Hamra Village, the Al Hamra Marina & Yacht Club remains a major attraction for boating enthusiasts,
while the Al Hamra Golf Club has hosted prestigious events, such as the final part of the European Challenge
Tour.
“We have developed a product that really does have something for everyone. Brands such as the Ritz-Carlton and
Waldorf Astoria are synonymous with luxury. The golf course and marina, and the amenities they offer, are world
class, plus our residential design and build quality are second to none — it’s easy to see why we are fast becoming
a must-visit, must-return destination,” explained Kurien.
Source: Gulf News
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WHAT INFLUENCES YOUR HOME
MORTGAGE RATE? Tuesday, January 08, 2019
A home mortgage is provided on a longer tenure than most other financial instruments, which means the
monthly payments are going to be on your expenses for a long time. It is quite important to make sure this won’t
make you stressful at any point in time till you clear it. The easiest way to make way for an easy mortgage payoff
is to obtain a cheap rate on it at the start itself.
There are several things that have an impact on your mortgage rate.
Loan amount
It’s extremely important to keep the loan capital to a minimum. Any redundant extra mortgage capital is a burden
and will raise the monthly instalments. Banks only finance 70-80 per cent of the property value. The rest should
be borne by the borrower. Some banks may allow applicants to negotiate on interest rates if they are ready to pay
a high down payment and borrow less.
Credit score
This three-digit number is one of the prime factors when your bank approves the loan. Applications with a high
credit score not only get approved easily, but banks can also offer lower rates. Pay your existing loans and credit
card bills on time, which will improve the credit score over time.
Loan-to-value
LTV ratio is calculated by dividing the mortgage amount by the property value. The lower the LTV ratio, the higher
chances of loan approval. This means that the mortgage amount should be as low as possible. With a high LTV
ratio, lenders might increase the interest rate. High LTV ratio borrowers also need to get property insurance to
reduce the lender’s risk.
Tenure
The maximum repayment period on a home mortgage is 25 years. Overall a shorter tenure means lower interest
rate compared to a longer one.
Employment, income
The applicant must have employment for at least one to two years in the region and a minimum monthly salary of
Dh8,000. If the monthly income is higher, a borrower can pick the best mortgage product and also negotiate on
rates.
History of loans
If the borrower has a history of loans that were cleared without any delays, it not only has a favourable impact on
the credit report but also help get a lower interest rate.
Location of property
If your property is situated in a good location, which tends to develop, then the lenders might charge less interest
rate because it makes the borrower less likely to default on payments. And even if he does, the resale value of the
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house will compensate the mortgage provided. If the house is in an underdeveloped area with no signs of
progress, the lender might provide higher rates.
Shiv Gupta is the co-founder and director of mymoneysouq.com
Source: Gulf News
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DUBAI REALTY HOPES WEAK DOLLAR
BREATHES NEW LIFE INTO MARKET Monday, January 07, 2019
The dollar’s recent softening could be a good thing for Dubai’s property market, if this manages to bring back
more buyers from non-dollar-denominated markets.
Because the fact remains that even with property prices sliding in Dubai in the last two years, the dollar’s
overwhelming strength during this period made buying real estate here still pricey for these investors. This meant
investors in India, Russia, China and even those from the UK found the currency difference against the dollar to
be too steep for a decent return from any property purchase here.
“As the dollar strengthened for the typical nationalities who’ve been investing in Dubai real estate, it meant the
normal economics of overseas buyers coming in during times of oversupply and prices slipping hasn’t happened
so far,” said Steve Morgan, CEO of Savills M.E., which as of January 1 completed all the integration processes from
its purchase of Cluttons’ regional interests last June.
“Dubai real estate was still expensive for people not holding dollars — the pound was at a ten-year low against
the dollar. Now, if the dollar manages to extend its current weakness, it could make real estate here more
affordable and overseas buyers will come back in greater numbers.”
Upcoming Dubai Land Departments data will show how much of buying interest was among foreign investors. But
the data only goes by the nationality of the buyer, and does not record whether he is an expatriate based here or
an individual based outside the country when the deal was made.
According to market feedback, foreign buying interest at the premium end of the property market is still steady —
it’s in the sub-Dh3 million space that deals involving these investors have fallen significantly.
Plus, competition for the investor dollar in global real estate remained intense throughout 2018. These days, one
can buy apartments in Manhattan for under $1 million (Dh3.67 million) — the first time this has happened since
2015 and brought on by oversupply. It’s a theme that Dubai’s property market is not unfamiliar with.
According to Morgan, “There’s no reason why an oversupply situation is anything to get embarrassed about. No
one has [a] crystal ball in predicting outcomes. There is an inelasticity about supply in real estate — developers
start on new projects when the market is good. It takes three to five years to build a project and during this period
markets cool down or heat up.
“Right now in Dubai, even foreign buyers will find attractive the lower deposit requirements and longer payment
plans developers are offering. They get in with a small amount of money and buyers are attracted by the future of
those developments. This had a knock-on effect on [overseas investor] demand for finished properties.”
Interestingly, the reverse is true among domestic buyers, where demand shifted decisively in favour of ready
properties during 2018.
Post-Cluttons integration
After the Cluttons integration, Savills will be on the lookout for any opportunity to tap into foreign fund flows
headed here. But there is much that can be done even outside of these transactions.
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Residential leasing and asset management will remain a priority — currently, this makes up 30 per cent of its
Dubai’s revenues and 70 per cent in Sharjah.
“Leasing still holds a lot of value and is key to winning property and asset management contracts,” said Morgan.
The deal was effected without any job losses, according to Morgan. In a marketplace as tight as the one in Dubai
right now, and especially in the real estate space, that did take some doing.
“We didn’t let anybody go and, in fact, grew it further by absorbing most of the Cluttons’ franchise teams in Oman
and Bahrain,” he added. “The projection for the next 12 months is to increase the workforce by 24 per cert. All the
former Cluttons’ associations in the region have come to an end after serving some notice period.”
Global real estate had a solid workout in 2018
Sure New York and Miami property markets failed to deliver because of oversupply, but the rest of the US was
doing quite well for itself in attracting investors. And on the other side of the Atlantic, London had “more
transactions than ever before,” according to Steve Morgan, CEO of Savills M.E.
Brexit’s sway on UK’s real estate has not placed a vice-like grip on buying.
“Residential prices in London have declined 10-15 per cent in the last 18 months... add to that the 12-18 per cent
currency benefits for those holding dollars, and you see reasons behind the deal flows.”
Globally, Savills reckons that real estate deals were up 8.5 per cent over the year before.
Source: Gulf News
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TIGHTENING REGULATIONS ALONE WON’T
AID UAE REAL ESTATE Thursday, January 10, 2019
You can’t have it both ways. You cannot have a regulatory framework that protects asset holders whenever prices
fall and, at the same time, perpetuate an economic system that makes things more affordable for the small
investor through regulatory moves.
The two are simply in conflict ... and any attempt to prove otherwise is simply disingenuous. This does not imply
that I am against government intervention. In point of fact, intervention has been a frequent characteristic in the
world economy, but we need to define the objectives clearly.
A regulatory framework has multiple objectives to overcome, but in an economic analysis, has the effect of
reducing costs for the end-user. This is often offset by the costs imposed by government regulation. We then
operate in a world of trade-offs where the objective is that society benefits on a net basis.
Some market observers argue that a natural equilibrium is something that all economies will reach. But they also
artfully switch the debate to rail against the practices of industry observers and their inability to capture
accurately the dynamics of the real estate market. They call for regulatory oversight for these so called industry
observers.
One of their suggestions include a “holistic regulatory oversight committee” that reaches across disciplines. I am
not an expert in real estate matters nor in forming regulatory committees, but this line of thinking is not new. It
fundamentally boils down to the pace of regulatory reforms, the constituents that they are aimed at, and the
balance sought to be achieved between economic growth and social stability.
This is an all too human endeavour ... sometimes we succeed and sometimes we need more work against the
backdrop of a world that is changing rapidly. In establishing Rera (Real Estate Regulatory Agency), for example,
Dubai has put in place a model blueprint for regulating the free wheeling practices of the real estate industry.
India has already adopted a similar model, and others such as Egypt, China and Pakistan are examining their own
legislation with a view to introducing a similar framework.
In other areas like telecom deregulation, more work needs to be done, as articulated by other legal and economic
experts in the field. Through a series of feedback loops, both from within the industry as well as from external
observers, we know we have succeeded most often through the “price mechanism”.
For example, there were a number of concerns expressed about the volatility and the pace of rental increases in
the real estate market in the first cycle. This concern has now been obviated through rental regulatory practices
that have been put into place, to the point where some argue that this is no longer needed.
I have never argued that more cannot be done. As new practices are introduced — through innovation, which is
the hallmark of private enterprise — the role of the regulator is to forever be the gatekeeper, protecting against
any attempt at “price gouging” or other anti-competitive behaviours. In codifying this doctrine, the role becomes
one where the function of price signals becomes critical.
This implies that price volatility becomes the natural consequence of an asset-driven economy. Regulating against
the movement of asset prices simply means that the interest of asset owners are given precedence over that of
the small investor, which is simply against the raison d’etre of regulation.
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No amount of regulation can do away with economic boom-bust cycles. Instead the focus should remain one
where the competitive framework of the economy is increasing. It can only do so if the starting point of regulation
is a reduction of costs for the operation of enterprise.
Affordability then becomes the key lens with which to view the success — or lack thereof — of regulation.
Nasser Malalla Ghanem is Senior Partner at NM Associates, which has a joint venture with GCP.
Source: Gulf News
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HILTON AND AW ROSTAMANI GROUP TO
DEVELOP 458-ROOM HOTEL IN BUR DUBAI Tuesday, January 08, 2019
Hilton has signed a management agreement with AW Rostamani Group to develop a DoubleTree by Hilton hotel
in Bur Dubai, the pair announced on Tuesday.
DoubleTree by Hilton Dubai Al Mankhool will join 11 hotels currently operating or in the pipeline for the brand in
the UAE, and represents the first time AW Rostamani Group has entered the hospitality market.
The hotel is expected to open in 2020.
“Since we introduced DoubleTree by Hilton to the UAE four years ago, the brand has been a real success story and
is now one of the fastest growing in the market,” said Carlos Khneisser, vice president of development, Middle
East and North Africa, Hilton.
“It offers the versatility to create a hospitality experience that fits an owner’s personal vision, supported by the
established standards and global reach of an established brand. We look forward to working with AW Rostamani
Group to bring about a new and unique offering for travellers looking to experience staying in the heart of Dubai’s
traditional, cultural district.”
Construction is already underway on the mixed-use development, which will house the property. Located within
the portion of Dubai commonly referred to as the city’s ‘Old Town’, the hotel will contain 327 guestrooms with 131
serviced apartments.
Source: Gulf News
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YOUR HOUSE RENT IN DUBAI IS LIKELY TO
FALL THIS YEAR Thursday, January 10, 2019
Residential rents in Dubai are expected to see further declines over the first half of 2019, before stabilising in the
second half of the year or early 2020. This comes on the back of a huge level of supply expected to hit the market
this year.
Analysts estimate that more than 63,000 homes will be delivered in Dubai this year. These are projects that were
launched as Dubai won the bid to host Expo 2020.
"While many of these projects will not be delivered on schedule, the level of actual completions is still likely to
exceed demand. Another negative influence on the rental market are the attractive payment plans being offered
by many developers that are seeking to attract renters to purchase property in Dubai. This will result in a relative
shift in the market with more demand to own and less to rent properties," says Craig Plumb, head of research, JLL
Mena.
According to Prathyusha Gurrapu, head of research and advisory at Core: "In the rental market, the older central
built stock continues to be under pressure to retain its novelty with occupier preferences shifting to outer areas
where newer and competitively priced options are increasingly becoming available."
JLL estimates that around 22,000 homes were completed in Dubai in 2018, the highest level for the last five years.
There was a significant surge of handovers witnessed during Q4 2018. The vast majority (around 75 per cent)
were apartments, with the remainder comprising townhouses and villas.
The consultancy ValuStrat estimates that upcoming supply for 2019 currently stands at 78,566 residential units.
"However, this number is subject to significant downward adjustment. Communities with significant upcoming
supply in 2019 include Dubailand [Akoya Oxygen, Damac Hills, Town Square, Dubai Legends, Arjan], Mohammed
Bin Rashid City [Meydan One, Dubai Hills Estate, District 11], Jumeirah Village Circle and Business Bay," informs
Haider Tuaima, head of real estate research at ValuStrat.
These are the communities that are likely to see significant rent reductions.
"The majority of completions for 2019 will be in the apartment sector, with major deliveries expected in Meydan
[including Azizi's Riviera project] and Al Habtoor City," adds Plumb.
Apartment districts of Discovery Gardens and Dubai Sports City witnessed over 25 per cent reduction in rents
from their peak Q4 2014 values, according to Core data. The villa communities of Jumeirah Park and Jumeirah
Village Circle and Triangle also witnessed over 30 per cent decline in rents.
"Citywide asking rents declined 8.6 per cent since last year. Apartments in International City, Discovery Gardens
and Dubai Sports City saw steepest annual rental declines of 14.6 per cent, 14 per cent and 13.1 per cent,
respectively. Asking rents in villa communities, Jumeirah Islands and Palm Jumeirah fell 12 per cent and Victory
Heights declined 10.5 per cent annually," ValuStrat's Tuaima adds.
As a result, more landlords are responding to the tenant-friendly market by reducing rents or offering other
incentives such as rent-free periods, accepting multiple cheque payments or the inclusion of maintenance within
the rent.
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Generally, smaller apartments and larger villas saw the biggest rental declines last year. Due to the increasing
stock of smaller format and studio apartments, these units appear to be most affected, with a year-on-year rent
drop of 16 per cent for studios and 12 per cent for one-bedroom units.
As residential rents have softened in the Northern Emirates as well, there has been a mixed response from
tenants in terms of moving back to Dubai. Tenants are also moving from northern parts of Dubai towards the
centre, the east and further south of the city.
"Some families have moved to Dubai to be closer to their workplace and avoid longer commute time while others
have tried to optimise housing expenses by taking advantage of the softened rents and not relocated," reckons
Prathyusha.
"Some families are moving into Dubai from Sharjah and the Northern Emirates as rentals decline in Dubai. The
extent of this trend is limited by the corresponding fall in rents in these more remote locations, which means that
tenants can reduce their living costs by remaining in place," Plumb adds.
Sales market
Apartment sales prices fell by 5 per cent in Q4 compared to Q3 2018 while average villa prices softened by 3 per
cent. Furthermore, year-on-year performance showed that apartment prices declined by 16 per cent and villas by
13 per cent, according to Chestertons.
Knight Frank estimates that residential prices and rents in the UAE are likely to continue to soften in 2019.
"However, we may see additional demand which helps underpin the market as a result of the recent approval of a
range of legislations to ease visa regulations, given that many of the changes are linked to property ownership,"
says Taimur Khan, research manager, Knight Frank.
Source: Khaleej Times
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READY-TO-MOVE-IN HOMES GAIN IN
POPULARITY IN DUBAI Wednesday, January 09, 2019
Ready-to-move-in units have seen a surge in popularity in Dubai owing to attractive incentives and long-term
payment plans from developers looking to clear their inventory.
In the fourth quarter of 2018, completed properties in Dubai saw a 22 per cent increase in transaction volumes
over Q3 and an overall 7 per cent uplift across 2018, according to real estate services firm Chestertons.
"The real estate market recovery in Dubai continues to be hampered by the increasing excess supply being
released to the market. However, our research has highlighted 41 per cent of all residential transactions now
relate to completed units, up 6 per cent from 2017, indicating a shift in buyers' interests, with the trend set to gain
further momentum in 2019 as developers offer attractive incentives and long-term payment plans," said Ivana
Gazivoda Vucinic, head of consulting, Chestertons Mena.
Apartment sales prices fell by 5 per cent from the previous quarter while average villa prices softened by 3 per
cent. Furthermore, year-on-year performance showed that apartment prices declined by 16 per cent and villas by
13 per cent, according to Chestertons.
According to Knight Frank, residential prices and rents in the UAE are likely to continue to soften in 2019.
"However, we may see additional demand which helps underpin the market as a result of the recent approval of a
range of legislations to ease visa regulations, given that many of the changes are linked to property ownership,"
said Taimur Khan, research manager, Knight Frank.
"While there are clear challenges facing the market, the recent approval of a range of legislations to ease visa and
foreign business ownership by the UAE Cabinet are likely to drive additional demand in the UAE's property
market. Looking ahead, we expect that the prime segments of the market are likely to continue to outperform the
mainstream market overall," Khan added.
In the apartment segment, prices in Dubai Sports City, International City and Jumeirah Village Circle (JVC) all fell by
9 per cent compared to the previous quarter. Downtown Dubai and The Greens fell by 8 per cent and 7 per cent
respectively. In contrast, Dubai Marina remained one of the most resilient locations, witnessing a decline of just 1
per cent. Annually, it was Discovery Gardens which saw the steepest decline, with prices dropping by 25 per cent
year on year. The most resilient apartment location was Dubailand with just a 5 per cent adjustment from the
previous year.
In the villa sales market, Palm Jumeirah observed a 7 per cent decline in Q4. The Meadows and Springs remained
unchanged from the previous quarter while Arabian Ranches fell by just 1 per cent, indicating the prices in these
particular communities may have bottomed out, the Chestertons report added.
In the rental market, apartments saw a further 4 per cent decrease in Q4 and a 3 per cent drop for villas from Q3.
This was a continuation of a trend which saw an overall 12 per cent annual decline in apartment rents and 8 per
cent for villas.
In the rental market, apartments in Dubai Marina, Dubai Silicon Oasis, Dubai Sports City, Dubailand and
International City witnessed a 5 per cent decline in Q4, with a one-bedroom in Dubai Marina now available for
Dh82,500. Downtown Dubai, JLT, JVC and Dubai Motor City all declined by 4 per cent from the previous quarter.
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Due to the increasing stock of smaller format and studio apartments, these units appear to be most affected by
market adjustments with a year-on-year recorded drop of 16 per cent for studios and 12 per cent for one-
bedroom units.
In the villa rental market, the highest Q-on-Q declines were witnessed in three-bedroom units with average rental
declines of 4 per cent.
"From a rental perspective, Dubai continues to be a tenant-friendly market, with many making significant savings
by renegotiating terms and price with current landlords or moving to a cheaper location within their current
district or relocating to a new community," added Vucinic.
The addition of new stock and limited new demand continues to place pressure on landlords with many of them
competing on several fronts to retain or attract new tenants with multiple cheques, rent-free periods and in some
cases agency fees being covered.
According to Vucinic, this could result in landlords taking advantage of the holiday let market, which has been
legal in Dubai since 2016. "With demand for annual contracts weakening and rents continuing to fall, short-term
holiday rental could prove very lucrative, especially in popular locations, particularly as we edge ever closer to
Expo 2020," she said.
Source: Khaleej Times
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NAKHEEL HAS A BUSY YEAR FOR PROJECT
DELIVERIES Tuesday, January 08, 2019
Master developer Nakheel has a busy year ahead in terms of handovers. This encompasses residences, hotels
and shopping malls, some iconic addressed included.
A top official said the Deira Islands Night Souk, Premier Inn Dragon City, Avani Ibn Battuta Mall, the Nakheel Mall
in Palm Jumeirah, the St Regis Dubai, The Palm, and Nad Al Sheba Residences are some of the prominent
deliveries for the developer this year.
The five-star, 289-room St Regis will occupy the first 18 floors of the 52-storey Palm Tower located on the trunk of
the Palm Jumeirah. This is part of Nakheel's Dh3 billion hospitality portfolio, under which it has approximately
6,500 hotel rooms in its portfolio, either delivered or under development.
"We are building hotels that also fit in the luxury sector. But, we are mostly focusing on three to four-star hotels,"
Aqil Kazim, chief commercial officer, Nakheel, said during a site tour in Dubai on Tuesday.
The developer has also tied up with Spain's RIU and Thai group Centara for hotels on Deira Islands. It has roped in
Raffles to operate the hotel component in its upcoming project, the 260-metre-tall Palm360, which will be one of
the tallest towers on the Palm Jumeirah upon completion. Piling work is underway and design is in advanced
stages on this flagship project, the executive informed.
Meanwhile, construction is complete on 432 luxury residences spread across 30 floors in the Palm Tower.
However, the homes will only be delivered in 2020.
"The residences come fully furnished and with a seven-year payment plan. The price of a studio starts from Dh1.7
million and a 2-bedroom from Dh10 million. All 3-bedroom apartments have been sold out. All apartments will
offer one of the four views: Atlantis, Marina skyline, Burj Al Arab or the Palm Gateway towers," said Kazim.
According to Lewis Allsopp, CEO of Allsopp & Allsopp: "The Palm Tower is a very luxurious project and the pricing
structure reflects this. Buyers looking to invest in affluence in a hugely iconic area should consider this
development."
However, Allsopp added that at the moment, most buyers interested in investing in property on the Palm
Jumeirah are looking for readily available units such as Shoreline and Marina Residence apartments, which offer
more value for money and instant rental returns or a home to live in for end-user buyers.
Level 52 of the Palm Tower will offer a public viewing deck at 240 metres. Nakheel will operate this space and a
fee will be levied for tickets. The access point for this viewing deck will be through Nakheel Mall.
"The public viewing deck on the 52nd floor will be a pit stop for visitors and tourists en route to the Atlantis, The
Palm," said Kazim.
The Palm Tower also includes an infinity swimming pool perched 210 metres above ground - one of the highest in
the world, similar to Marina Bay Sands in Singapore. The pool is on the 50th floor of the Palm Tower. Above the
pool will be a podium housing a club and a speciality restaurant. This will be on an exclusive access basis.
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The Dh1.2 billion Palm Tower will be connected with the under-construction Nakheel Mall, which is 70 per cent
leased out, and a Monorail station. The mall has 1.1 million sqft of leasable area and features 350 retail and F&B
outlets.
The mall will have three access points for cars, three for pedestrians and a separate Monorail station. Al Ittihad
Park will also offer access to the Nakheel Mall while there will be two tunnels connecting it to the surrounding
Marina Residences. The mall will not have a utility roof, instead it features a glass dome with F&B and retail.
"The St Regis hotel, club and Nakheel Mall will be handed over in 2019. The hotel fit-out work is ongoing,"
explained Kazim.
"The Palm Tower is a lifestyle product, which is what Dubai is looking for. There is water frontage from all sides:
this is the project's USP," concluded Kazim.
Source: Khaleej Times
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DIFC 2.0: A GLOBAL INVESTMENT HUB IN
THE MAKING Monday, January 07, 2019
Dubai International Finance Centre (DIFC), the region's largest financial free zone, will undergo expansion in order
to cement the emirate's position as a business capital and hub for international investment.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler
of Dubai, said developing the financial sector is a priority that supports the economic future of Dubai and further
enhances investor confidence, given the vital contribution it makes to Dubai's economy mainly through DIFC.
"The financial sector remains one of the cornerstones of our economy. We are keen that the development of
infrastructure is matched by the development of legislation by continuously reviewing it to ensure it is among the
best in the world and that it can facilitate the best environment for supporting greater excellence and
achievement," Sheikh Mohammed said.
The Dubai Ruler approved the launch of the new chapter called DIFC 2.0 for the development of the free zone.
The announcement came following the Fifty- Year Charter recently announced by Sheikh Mohammed that aims to
ensure Dubai's sustained prosperity and accelerates the development journey of the emirate, the UAE and the
region.
During a visit to DIFC, Sheikh Mohammed was accompanied by Sheikh Hamdan bin Mohammed bin Rashid Al
Maktoum, Crown Prince of Dubai and Chairman of The Executive Council; Sheikh Maktoum bin Mohammed bin
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Rashid Al Maktoum, Deputy Ruler of Dubai and President of DIFC; Sheikh Ahmed bin Saeed Al Maktoum,
Chairman of Dubai Civil Aviation Authority and Chairman of Emirates Group; Sheikh Ahmed bin Mohammed bin
Rashid Al Maktoum, Chairman of Mohammed Bin Rashid Al Maktoum Knowledge Foundation; and Sheikh
Mansour bin Mohammed bin Rashid Al Maktoum.
"The next phase requires the introduction of the latest technologies that can support the growth of various
business sectors. We are not only trying to meet the requirements of the present time but also be a major
contributor to shaping the future of the world's economy and positively influence greater well-being for the world.
We are confident that Emiratis will be successful in achieving this strategic objective," Sheikh Mohammed said.
The Centre's phased growth plan will triple the scale of the leading financial hub in the Middle East, Africa and
South Asia (MEASA) region. The new expansion will add 13 million square feet of space to the centre's ecosystem,
providing an international focal point for FinTech and innovation.
The development of DIFC 2.0 will commence immediately and will be completed in several stages. Upon
completion, the new district will comprise 6.4 million square feet of office space, 2.6 million square feet of creative
space, 1.5 million square feet of residences, 1.3 million square feet of retail space and 700,000 square feet
devoted to leisure and entertainment.
This will be complemented by a financial campus covering approximately 400,000 square feet, an additional
250,000 square feet of hospitality offerings, and 3.5 million square feet of car parking space.
DIFC 2.0 is an extension of the existing jurisdiction, with direct connections to Dubai's public transport networks.
Embracing a pedestrian lifestyle, the next phase is set apart from conventional city living with underground
service paths allowing for the free movement of bikes, pedestrians, cars and smart transportation.
"The next phase of our development will translate into further growth for the regional financial services
landscape. We are excited to continue working alongside our vibrant community, which includes some of the
most prominent global financial institutions, to evolve our offering and to support the development of the
financial services industry across the MEASA region," said Essa Kazim, governor of DIFC.
DIFC now houses more than 22,000 professionals working across over 2,000 companies in the district.
Source: Khaleej Times
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WHY NEW GENERATION HOME BUYERS
PREFER CONTEMPORARY DESIGN Tuesday, January 08, 2019
As someone who works in the field of luxury real estate, I have had the privilege and the pleasure of visiting some
truly spectacular homes across the world. It never ceases to amaze me just how much care homeowners put into
interior design and into crafting a space that is as good to look at as it is comfortable to live in. Of course, there
are the occasional misfires where I find myself wondering just what was going through their heads, but for the
most part, the homes I come across are simply breathtaking. This is especially true of a city like Dubai, where
design and aesthetics are essential aspects of any property.
Dubai's design aesthetic is especially unique, in large part due to the multicultural population as well as the wide
age range of home buyers. On one end of the spectrum, you have the long-time expats who moved to the city
decades ago and have raised their families here. On the other, there are the new arrivals, the young couples and
budding families who are starting to establish new lives for themselves. Each demographic brings with it a
different perspective and way of life, which is ultimately showcased through the design of their homes, whether
they are lavish penthouses in the heart of the city or stately villas in suburban neighbourhoods.
While the Mediterranean and coastal European aesthetic of areas such as Arabian Ranches and Jumeirah Golf
Estates are much preferred by older residents and families with a higher median age, the newer generation of
homeowners is more interested in contemporary design. Newly built neighbourhoods such as District One,
Hillside in Jumeirah Golf Estates, Sidra in Dubai Hills and Tilal Al Ghaf are characterised by sleek lines, stark
silhouettes and neutral palettes. After all, the home buyers of today are part of the iPhone generation, raised on
the concept of 'less is more' when it comes to aesthetics.
The Apple store is the quintessential example of that. Visiting an Apple store is a unique experience because of its
unconventional design, stripping every element we would expect of a retail outlet to its barest form. This creates a
space that is clutter-free and a smoother flow between the various areas of the store, thus enhancing the
experience. The same principle can be seen in contemporary villas, using a style that is austere without being too
minimalistic. This again serves to remove clutter, making each room feel much larger and more relaxing.
Another clever design element in Apple's stores is the use of floor-to-ceiling glass. The lack of a door or storefront
not only gives the store a distinct look, but also creates an open environment that invites passersby to walk inside.
Extensive use of glass is perhaps the most common trend that I have come across in the newer homes that I have
visited. Floor-to-ceiling windows and glass doors are increasingly common features and are standard components
of newly built villas, resulting in a sense of light and space that can make the cosiest home feel like a mansion.
Indeed, one may notice that on a square foot basis, the new villas are perhaps a bit smaller than long-established
homes such as the ones in Emirates Hills or Arabian Ranches yet the space feels larger because of the seamless
border that connects the interior of the home to the outdoors.
There is some concern that all that glass will lead to overheated villas, especially during Dubai's balmy summers.
However, this is not a frivolous choice made for simply for the sake of aesthetic appeal. Advances in fenestration
technology and particularly the use of argon gas between window panes have helped to increase energy
efficiency.
Ultimately, the market speaks for itself. Contemporary neighbourhoods such as District One, Sidra at Dubai Hills,
Hillside at Jumeriah Golf Estates and Tilal Al Ghaf have seen robust sales, with many of the homes selling within
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weeks of launch. This shows the strength of the design, among other factors, and suggests the direction in which
Dubai is headed.
This contemporary modern aesthetic is a symbol of Dubai's design evolution and forms a part of what will be this
city's future.
The writer is founder and CEO of LuxuryProperty.com. Views expressed are his own and do not reflect the newspaper's
policy.
Source: Khaleej Times
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APP FOR REAL ESTATE VALUATORS
LAUNCHED IN DUBAI Monday, January 07, 2019
The Real Estate Regulatory Authority (Rera) at the Dubai Land Department (DLD) has announced the launch of a
smart application for real estate valuators called 'Taqyimee'.
The launch was attended by Sultan Butti bin Mejren, director-general of DLD; Marwan bin Ghalita, CEO of Rera.
Bin Ghalita affirmed that the Executive Council Resolution No. 37 of 2015 regulates all aspects of the real estate
appraisal processes in the emirate. The Rera is responsible for organising and registering real estate valuators.
He stressed that the Rera's strategic projects emphasise the importance of launching smart applications that
contribute to meeting customers' expectations and providing them with data to support their investment
decisions.
Ali Abdalla Al Ali, director of the Real Estate Licensing Department, said the application serves the objectives
adopted by Rera and comes within the framework of the smart transformation of services provided by the
Authority about real estate valuation services.
Source: Khaleej Times
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DUBAI HOUSE PRICES TO DROP 5 TO 10%
MORE THIS YEAR Tuesday, January 08, 2019
There is potential for residential real estate prices in Dubai to decline by another 5 to 10 per cent this year before
the market hits the bottom, said Steve Morgan, CEO of Savills Middle East.
This is on top of the 6 to 10 per cent decline Dubai residential property prices witnessed in 2018, the executive
added.
"Real estate prices have slipped and with the strengthening of the US dollar, investors from traditional source
markets such as Russia, India, UK and Europe are facing affordability issues. It's not just real estate, but other
sectors like tourism are also facing affordability issues. Real estate across the world, even in advanced markets,
goes through cycles," Morgan told Khaleej Times on Monday.
Supply of additional inventory is also weighing on the Dubai housing market. 2019 will see the handover of
projects that were announced when Dubai won the Expo 2020 bid. This also coincides with the softening in oil
prices. But, demand is expected to pick up once the Expo kicks off in 2020.
However, Morgan insisted that the products being delivered were of high quality, citing units in La Mer, City Walk,
Dubai Creek Harbour, etc.
"Dubai is ahead of the curve compared to other GCC real estate markets. There is pressure across most of the
GCC markets we operate in," the Savills executive informed.
He requested the government to do more to bring down the cost of transactions. "There are steps in the right
direction such as the long-term visas, property visa for retirees and spurt of payment plans for off-plan
properties. The real estate sector will also benefit if Dubai manages to attract more visitors who transit through its
airports. The increase in infrastructure spend is likely to trickle down to the economy," he reckoned.
Meanwhile, Morgan affirmed that Dubai is still an investor-friendly market. "There are good yields to be had if you
buy at the right price in the right project. But, second generation residents who have been living here for many
years are keen to own their own property."
Referring to the marginal impact of VAT on the commercial property market, Morgan said: "The cost of operating
a business is still high in the UAE. The cost to apply for or renew a trade licence, visa, etc., is rising every year. VAT
is an additional cost for these businesses."
He also cited the flight to quality in the office space and big occupiers spreading out across the city. He referred to
HSBC moving its headquarters to Downtown Dubai as an example of consolidation.
Savills announced the rebrand of its Middle East business following the acquisition of Cluttons Middle East on
May 31, 2018. The firm, which was previously represented by associates in the Middle East, has completed a six-
month integration process with Cluttons Middle East, which will now be known as Savills.
In the Middle East, it will operate across five countries, including Bahrain, Egypt, Oman, Saudi Arabia and the UAE.
Savills is looking to further strengthen its capital markets business by working with clients in the Middle East to
enable them to access investment destinations across the world. "There are several sovereign wealth funds and
private family businesses in the UAE looking to invest across asset classes and geographies," Morgan added.
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Source: Khaleej Times
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GCC ECONOMIES TO FOCUS MORE ON
DIVERSIFICATION Friday, January 11, 2019
The global economy will see slower growth in 2019, but the overall outlook remains positive for the GCC, with
many countries such as the UAE focused on their diversification strategies, experts said.
Speaking at a media session, Michala Marcussen, group chief economist at Societe Generale, said the large
amount of debt worldwide is a fundamental concern for many economists. The outlook for 2019 is one of slower
growth in the global economy, but overall the impetus remains positive.
"High levels of debt in the global economy become particularly important if we are faced with a more abrupt
slowdown globally. Interest rates are already at a very low level, so the ability to alleviate balance sheets by
dropping them even lower is reduced. But, there are several positives as well: we can see strong fiscal impulse
from the US, as well as low oil prices encouraging consumer spending," she said.
She also noted that the share of zombie companies - firms that are at least 10 years old but unable to cover their
debt servicing costs with profits - has continued to increase.
"There are more zombie companies in the system, which makes it a vulnerability and hints at lower productivity."
On the situation in the US, she noted that there was continued uncertainty with President Donald Trump's threats
to keep the government shut for the next few months. "This could become a trigger for something much more
negative for the US economy."
Edgardo Torija Zane, senior economist for the Middle East, Turkey at Central Asia at Societe Generale, noted that
2018 proved to be a good year for economies in the region, thanks to an increase in average oil prices. "Looking
ahead into 2019, there is still a lot of uncertainty right now regarding oil prices," he said.
"Our assumption is that oil prices will average at $65 per barrel. It's a good price for many countries, but there is
still going to be a need for reforms. When we look at the progress that has already been made in implementing
reforms, what we have seen is reassuring. The challenge will be to ensure that the GCC economies continue to
diversify their economic structures and ensure that growth will be inclusive. Another challenge will be to tackle
the issue of unemployment among the younger population in many of the countries."
Source: Khaleej Times
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UAE TO BE FASTEST GROWING GCC
ECONOMY IN 2019: IIF Wednesday, January 09, 2019
The UAE will be the fastest growing economy in the GCC region this year along with Oman, driven by non-oil
sector, Dh50 billion Abu Dhabi stimulus package and projects linked to Expo 2020 Dubai, according to a new
report released on Wednesday.
The Institute of International Finance (IIF) analysts projected the UAE's real GDP to grow 3.1 per cent in 2019
compared to 2.9 per cent estimated for 2018. But growth is projected to slow down to 2.7 per cent in 2020.
Nominal GDP is estimated to increase from $434 billion (Dh1.592 trillion) in 2018 to $444 billion (Dh1.629 trillion)
in 2019 and $458 billion (Dh1.681 trillion) in 2020.
Taimur Khan, Research Manager, Knight Frank, said in an another UAE research that outlook for the UAE's GDP
growth in 2018 and 2019 remains positive on the back of higher oil prices, a range of stimulus packages and
easing of business regulations in both Abu Dhabi and Dubai, which are likely to support activity in both the public
and private sectors.
International Monetary Fund had predicted 3.7 per cent growth for the UAE for 2019 in its October forecast. While
World Bank on Tuesday predicted 2 per cent in 2018 which is expected to accelerate to 3.0 per cent in 2019 and
3.2 per cent in 2020 and 2021.
According to IIF forecast, Oman's real GDP growth is also projected at par with the UAE at 3.1 per cent for this
year and 3.4 per cent in 2020. While Saudi Arabia's real GDP is predicted to grow 2 per cent in 2019, Kuwait at 0.4
per cent, Qatar at 2 per cent and Bahrain at 2.4 per cent.
"Consumer inflation will ease in 2019 in Saudi Arabia and the UAE after the VAT related spike in 2018. Downward
pressure from the low rental prices will persist," IIF analysts said.
In 2018, higher oil prices enabled temporary improvements in the external and fiscal positions of the GCC
countries.
"We see the aggregate current account surplus declining from $153 billion in 2018 to $86 billion in 2019 due to
lower oil prices and export volumes. We also expect the aggregated fiscal deficit to widen again from 1.4 per cent
of GDP in 2018 to around 4.0 per cent in 2019 and 2020, and the public debt to rise to 45 per cent of GDP by
2020," said Garbis Iradian, chief economist, Mena, IIF.
Source: Khaleej Times
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UAE TO GROW 3% IN 2019: WB Wednesday, January 09, 2019
The UAE's gross domestic product (GDP) will maintain its strong growth in 2019 and the next two years, helped by
higher investment and regulatory reforms, despite headwinds in the global economic growth, said a new report
released on Tuesday.
The World Bank said in its latest report that the UAE is expected to grow two per cent in 2018 but the growth is
expected to accelerate to three per cent in 2019 and 3.2 per cent in the following two years of 2020 and 2021.
The International Monetary Fund (IMF) in October hiked the UAE's growth forecast for 2018 and 2019 on the back
of higher oil prices, continued reforms to promote the private sector and increased government spending.
"With oil production and government spending set to rise, overall growth is projected to strengthen to 2.9 per
cent this year and 3.7 per cent next year," IMF had said.
According to World Bank's January 2019 Global Economic Prospects, growth among oil exporters is expected to
pick up slightly this year, as GCC countries as a group accelerate to a 2.6 per cent rate from 2 per cent in 2018.
"Higher investment and regulatory reforms are anticipated to support stronger growth in the GCC. Iran is forecast
to contract by 3.6 per cent in 2019 as sanctions bite," World Bank said.
In rest of the GCC, Kuwait is projected to clock fastest GDP growth of 3.6 per cent this year followed by Oman (3.4
per cent), Qatar (2.7 per cent), Bahrain (2.6 per cent) and Saudi Arabia (2.1 per cent).
For the Mena region, the World Bank estimated 1.7 per cent growth for 2018 and 1.9 per cent in 2019 as growth
among oil exporters is estimated to have strengthened last year.
"Among the countries of the GCC, increased oil production and prices have eased fiscal consolidation pressures,
enabling higher public spending and supporting higher current account balances. Among non-GCC oil exporters,
anemic growth in Iran associated with US sanctions has been a drag on regional growth," it said.
Global economic growth is projected to soften from a downwardly revised 3 per cent in 2018 to 2.9 per cent in
2019 amid rising downside risks to the outlook, the World Bank said on Tuesday.
"International trade and manufacturing activity have softened, trade tensions remain elevated, and some large
emerging markets have experienced substantial financial market pressures," the January 2019 Global Economic
Prospects said.
Growth among advanced economies is forecast to drop to two per cent this year.
"At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the
ride could get even bumpier in the year ahead", said World Bank CEO Kristalina Georgieva.
"As economic and financial headwinds intensify for emerging and developing countries, the world's progress in
reducing extreme poverty could be jeopardised. To keep the momentum, countries need to invest in people,
foster inclusive growth, and build resilient societies," Georgieva said.
Source: Khaleej Times
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KIZAD LAUNCHES POLYMERS PARK Monday, January 07, 2019
Kizad has announced the launch of Kizad Polymers Park, which will be capable of producing 300-400 kilo tonnes
of plastic products a year, and contribute around $2.5 billion to GDP by 2025.
The potential export market for the park is estimated at $500 million annually, and will ensure Abu Dhabi's
position as a hub for developing the latest innovations in sustainability and technology in the industry, including
new and advanced and polymer technologies, such as composites and 3D printing.
Speaking to the media at ArabPlast 2019, Samir Chaturvedi, CEO of Kizad, said: "Polymers is one of the fastest
growing segments in the industry right now. We want to bring everything together to make a value proposition for
the industry, and we are trying to create an ecosystem which is very competitive. We have the best quality
infrastructure that is available on land as well as one of the biggest and most important ports in the region. In
addition to this, there are several policies that are in place to help businesses operate."
The strategic collaboration framework between Abu Dhabi National Oil Company (Adnoc) and Kizad Polymers
Park aims to accelerate investment and innovation in the region's plastics industry. Kizad Polymers Park will cater
to a variety of different polymers segments, including industrial use, such as packaging, construction, and semi-
finished products; end-use customer, such as household goods, agriculture and hygiene products; material
science, including compounded and composite materials, and 3D Printing.
Crucial to supporting the circular economy are polymer recycling companies. The park will host a vibrant
polymers ecosystem, including diversified polymers space and raw materials, production systems and technical
support, polymers distribution and trading, and logistics.
"Abu Dhabi is the ideal location for polymers converters looking to reach both regional and international markets.
Tenants at Kizad Polymers Park will benefit from access to raw materials from regional producers and
connectivity to global polymers product demand through Kizad's major transport links, which include Abu Dhabi
Ports' flagship deep-water port, Khalifa Port and international airports," Chaturvedi added.
Abdulaziz Alhajri, director, Adnoc Downstream Directorate, said: "Adnoc is proud to collaborate with Abu Dhabi
Ports and Kizad to further strengthen and develop the UAE's conversion industry. Together, we will work to
ensure alignment with the Ruwais Derivative & Conversion Parks and other industrial parks catering to different
parts of the polymers value chain, offering investors a wide choice of options, while also building on synergies."
Source: Khaleej Times
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PARKS, GREEN SPACES WORTH DH100
MILLION BUILT IN SHARJAH Tuesday, January 08, 2019
Determined to keep its environment green and community-friendly, the emirate of Sharjah has built Dh100
million worth of public parks throughout 2018, the Sharjah Public Works (SPW) has said.
A total of 30 residential parks and walkways were constructed in different parts of Sharjah, under the directives of
His Highness Dr Sheikh Sultan bin Mohammed Al Qasimi, Member of the Supreme Council and Ruler of Sharjah.
The Ruler also ordered the construction of three more parks and an entertainment centre in Muwailih for 2019.
Courts for sports activities, playgrounds, washrooms and recreational areas for families will be set up in these
new venues.
Speaking to Khaleej Times, Ali bin Shaheen Al Suwaidi, chairman of the SPW, said these projects were part of a
development plan that would bolster the emirate's reputation not just as a child-friendly city but one that caters
to the needs of everyone.
He said that these projects aim to encourage residents to live an active lifestyle by making the most of the parks'
running and cycling tracks and other sports facilities.
Current projects
Al Suwaidi said the SPW is currently working on three parks in Al Nouf 2, 3 and 4 at a cost of Dh15.3 million - and
these are not going to be plain-looking parks.
Part of the budget is earmarked for murals, decorative walls and well-designed corridors, as well as a football
field, a playground and a store. The fund will also cover the construction of paved corridors, service buildings and
irrigation lines.
The massive Al Siyouh Ladies' Park, spanning 140,000 square metres in Area 4, is also in the works, and the SPW is
wrapping up the first phase of the project.
Once completed, this park would significantly expand the green spaces in the area. To protect the privacy of
women who will be visiting the park, fences were installed at a height of 2.10m and length of 1,550m. A 1,420m
running track with a width of three meters also surrounds the park.
Al Siyouh had two other parks, including one that spans 151,000 sq m in Area 6. Running tracks, energy-saving
lamps, parking spaces and decorative elements were common features of these leisure areas.
"The parks projects in this area came as a response to the public's needs and after a comprehensive study
prepared by the SPW," Al Suwaidi said.
Three parks in Al Qarayen, including one ladies' park, were also built at a cost of Dh17.5 million, while the first
phase of two parks in Al Rahmaniya was completed with a funding of Dh5 million.
Al Jaraiana Ladies Park and Al Houma Park, on the other hand, are about 80 per cent done, and the Martyrs'
Memorial Square will soon be taking shape, according to the SPW.
Source: Khaleej Times
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With over 30 years of Middle East experience, Asteco’s
Valuation & Advisory Services Team brings together a
group of the Gulf’s leading real estate experts.
Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai,
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Our breadth of experience across all the main property
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of research that supports our decision-making.
John Allen BSc MRICS
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VALUATION & ADVISORY
Our professional advisory services are conducted by
suitably qualified personnel all of whom have had
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Our valuations are carried out in accordance with the
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The Professional Services Asteco conducts throughout
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Asteco has established a large regional property sales
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Our sales teams have extensive experience in the
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