news brief 06 - asteco property management · heritage. it could be that it’s reinvented itself...

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

© Asteco Property Management, 2018 asteco.com IN THE MIDDLE EAST FOR 30 YEARS

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 06

SUNDAY, 11 FEBRUARY 2018


© Asteco Property Management | 2018 | asteco.com

IN THE MIDDLE EAST FOR 30 YEARS



REAL ESTATE NEWS

UAE / GCC

7 SIGNS OF A BOOMING PROPERTY MARKET

WHEN A LANDLORD SERVES AN EVICTION NOTICE

LOW DOWN PAYMENTS ARE NOT THE ANSWER

AGEING HOTELS UNDER PRESSURE

SAUDI ARABIA UNVEILS NEW HOUSING PROGRAMME TO BOOST HOME OWNERSHIP

EGYPT'S ORASCOM CONSTRUCTION ADDS $650 MILLION OF CONTRACTS IN Q4

WHY EVERY LONG-TERM EXPAT SHOULD BUY A PROPERTY IN THE UAE

COMPANIES TO PRIORITISE EMIRATIS OVER EXPATS IN NEW NATIONWIDE DRIVE

SURVIVAL OF THE FITTEST: PRIVATE DEVELOPERS SHRINK IN NUMBER

WHY COMPLETE AND NEAR-COMPLETE STOCK IS A SAFER BET FOR PROPERTY BUYERS

WILL READY MARKET STEAL OFF-PLAN'S THUNDER IN 2018?

CHINESE ECONOMIC INFLUENCE IN THE UAE GROWING, SAYS JLL

GULF MARKETS DRAGGED DOWN BY GLOBAL TUMBLE BUT OUTPERFORMS MOST OF

ASIA

MIDDLE EAST REAL ESTATE TYCOON WARNS OF A ROCKY 2019 — BUT SAYS REGION IS

RIPE FOR INVESTMENT

LANDLORD'S CONCERN OVER RECOVERY OF THE RENT EVICTED TENANT OWES

JEDDAH TOWER GOING AHEAD AFTER SAUDI CORRUPTION PURGE

DUBAI

DUBAI’S ESTATE AGENTS PUSH THE ENVELOPE WITH VAT ABSORPTION

A YEAR WHEN NEW INNOVATIONS SHOW UP IN DUBAI REALTY

MODULAR CONSTRUCTION: FASTER, SMARTER, GREENER

OWNERS’ ASSOCIATION IN DUBAI: HOW, WHAT, WHY

DUBAI’S NEW-GENERATION RESIDENCES: LIVE, WORK AND PLAY SPACES

SPECULATIVE BUYING IS RAISING ITS PRESENCE AGAIN IN DUBAI

OMNIYAT AND DORCHESTER COLLECTION TO COLLABORATE IN A NEW PROJECT


© Asteco Property Management, 2018 asteco.com

DEFINING LANDSCAPES SINCE 1985



REAL ESTATE NEWS

DUBAI LAND DEPARTMENT IN NEW STRATEGIC LINK-UP

15.8 MILLION PEOPLE VISITED DUBAI IN 2017

DUBAI BROKER TO ABSORB VAT ON COMMISSIONS

DUBAILAND EMERGES AS DUBAI'S RENTAL HOTSPOT

DUBAI DEVELOPERS WARY ABOUT NEW LAUNCHES

2018: A BUSY YEAR AHEAD FOR DUBAI CONTRACTORS

DUBAI RANKS 7TH LARGEST FOREIGN INVESTMENT DESTINATION CITY IN THE WORLD

DUBAI HOLDING APPOINTS NEW CEO TO RUN $35BN FIRM

WORLD'S NEXT TALLEST HOTEL SET TO OPEN IN DUBAI

EMAAR PROPERTIES MADE $1.8B IN 2017, WORRIED ON 2019

SOBHA NAMES PARTNER AWARDS’ WINNERS

ABU DHABI

SELECTIVE OFF-PLAN SALES GAINS IN ABU DHABI

SUPPLY, REDUCED ALLOWANCES WEIGH ON ABU DHABI RENTS, PRICES

NORTHERN EMIRATES

SHARJAH’S DH24B DEVELOPMENT STICKS TO TIGHT CONSTRUCTION PLANS

FUJAIRAH: TINY EMIRATE’S BIG STRIDES IN REAL ESTATE

INNOVATION EVENTS KICK OFF IN NORTHERN EMIRATES

EAGLE HILLS AWARDS FUJAIRAH PROJECT CONTRACT

INTERNATIONAL

PROPERTY GEMS OF SOUTHEAST ASIA

CARILLION BOSS APOLOGISES TO LAWMAKERS FOR BRITISH COMPANY’S COLLAPSE

COMMERCIAL, GOVERNMENT CONSTRUCTION IN U.S. TO ACCELERATE THROUGH

2019

GLOBAL COMMERCIAL REAL ESTATE INVESTMENT TO DIP IN 2018

HOUSING AFFORDABILITY IN U.S. REMAINED FLAT IN 2017






7 SIGNS OF A BOOMING PROPERTY

MARKET Wednesday, February 07, 2018

Property has long been considered a safe and stable investment option, particularly when compared to more

volatile asset classes such as stocks and shares. Whether you are looking for long-term capital growth, income

generation or a combination of the two, there are some things to consider before making a property investment

that’s right for you.

When it comes to residential property, not all investment opportunities are created equal. There are several

factors that can help predict the future growth of a property market and build an attractive investment case. IP

Global’s recent annual survey has revealed that over 48 per cent of UAE residents would consider investing in

property. When looking for the right market to invest in, it is important to look for the following key characteristics

that will help indicate its potential.

1. Population

This relates to the basic law of supply and demand. A young, growing population is a key indicator of demand,

assuming that those new people require housing. If the number of houses being built in the area isn’t enough to

meet that demand, it tends to be good news from an investment perspective. So long as that demand exists, it’s

an indicator that capital values of properties may be expected to increase. It may also indicate a long-term

scarcity of rental properties, pointing to a potential for rising rents and increased rental income for investors over

time.

2. Employment

Similarly to population growth, if an area’s industry is booming and new jobs are being created, particularly with

employment sectors of the future i.e. technology, digital media and medical research, there is a high chance this

will attract a working age population. A diverse economy showcases a city’s strength and indicates stable future

growth as well.

3. Vacancy rate

Are empty properties few and far between? Do properties for sale or for rent tend to be snapped up quickly? It’s a

good sign that both the sales and rental markets are on the up. Crucially, it’s also a sign that if one tenant leaves,

your potential investment property is unlikely to lie empty for long: good news for ensuring a steady, predictable

stream of rental income.

4. Regeneration

In simple terms, this is where a previously unloved area gets a new lease of life. Very often, a local mayor or

council takes the lead, actively encouraging new housing developments, retail, commercial, cultural and leisure

spaces.

The investment case for areas under regeneration is often much stronger than in more established areas. There’s

often more scope for capital value and rental income growth, while a lower price point often makes them more

accessible for investors too. We’ve seen commercial and retail regeneration change the face of many unpopular

areas into thriving hubs, and the investment case for these areas are often stronger than in more established

areas due to affordability and future uplift.






5. Connectivity

There is historical evidence to suggest that new infrastructure projects boost the local economy by creating new

jobs and attracting more people to a precinct. Not only do infrastructure projects increase employment and local

property values, but they also provide indirect benefits to the community such as consumer expenditure and

social benefits of community development — all of which drive demand.

In particular, road upgrades and developments play a critical role in driving up property values, as these projects

make areas more accessible. Time and again across the globe, we see how improvements to transport

infrastructure have a positive impact on property prices.

6. Amenities and institutions

From big corporate offices through to prestigious university campuses, an area’s “pull” and character tend to be

shaped by the institutions that are present there. For instance, if there’s a respected university with a big

international student base, this may drive strong rental demand in surrounding areas. If the area is starting to

earn a reputation as a natural home for certain industry sectors, or if corporates are increasingly building a

presence there, it could be a positive sign both for the rental and sales markets.

7. Unique factors

What makes an area special is what many investors ask. It might be that it’s making the most of its industrial

heritage. It could be that it’s reinvented itself as a cultural hub. It might be the pull of waterside living that’s

proving irresistible to renters and buyers alike. Either way, if the area’s a “go-to” destination for a growing number

of residents, it’s definitely worth a closer look.

Source: Gulf News

Back to Index






WHEN A LANDLORD SERVES AN EVICTION

NOTICE Wednesday, February 07, 2018

Early last year, the Dubai Land Department (DLD) issued a new tenancy contract format to standardise the

landlord and tenant relationship in accordance with Dubai Law No. 26 of 2007, as amended by Dubai Law No. 33

of 2008 (the Tenancy Law).

Prior to the introduction of the new tenancy contract, a variety of contract formats were being used for short term

tenancies. One such example included formats containing provisions which enabled the landlord to serve an

eviction notice in a manner which was not in compliance with the Tenancy Law. As a result, a number of tenants

in Dubai were being served notices without legitimate grounds for eviction.

While positive steps have been taken by the DLD towards further increasing transparency in the rental sector, it

would appear that eviction procedures in Dubai are still often misunderstood. The Tenancy Law specifies certain

circumstances in which a landlord can validly demand the eviction of a tenant, which are examined in more detail

below.

Eviction prior to expiry

It is often assumed that a landlord can demand eviction at its discretion, so long as it provides sufficient notice to

the tenant.

However, in order to legitimately evict a tenant prior to the expiry of a tenancy:

a) One or more of the circumstances set out in Article 25(1) of the Tenancy Law must be present; and

b) The landlord must provide notice to the tenant through the notary public or by registered mail.

The circumstances in Article 25(1) are limited to scenarios where:

• The tenant fails to pay the rent within 30 days of receipt of a payment notice, unless otherwise agreed;

• The tenant subleases the property without the landlord’s written consent;

• The tenant uses, or permits others to use, the property for immoral or illegal activities;

• The property is a commercial shop and is unoccupied by the tenant without legal reason for 30 or 90 continuous

days in one year, unless otherwise agreed;

• The tenant endangers the safety of the property, causes damage intentionally or due to gross negligence, or

allows others to cause damage;

• The property is in danger of collapse, as evidenced by a technical report;

• The tenant uses the property beyond the permitted use or violates building regulations;

• The tenant fails to observe its legal or contractual oblig

property requires demolition by a government authority.

Eviction on expiry

It is a common misconception that the landlord has an automatic right to evict a tenant upon expiry of the

tenancy.






In reality, irrespective of the tenancy term, the landlord cannot evict a tenant unless:

a) The reason for eviction falls within one of the grounds stated in Article 25(2) of the Tenancy Law; and

b) The landlord has provided 12 months’ notice to the tenant prior to the date of eviction through the notary

public or by registered mail.

Article 25(2) of the Tenancy Law provides limited grounds of eviction on expiry, namely if:

• The landlord wishes to demolish the property;

• The property requires renovation or maintenance which cannot be carried out during occupation;

• The landlord requires the property for its personal use or by immediate next of kin;

• The landlord wishes to sell the property.

It is worth noting that if the landlord chooses to retain the property for personal use, Article 26(2) of the Tenancy

Law prohibits the landlord from renting the property to a third party for a period of two years (for residential

properties) and three years (for non-residential properties), unless the Rental Dispute Settlement Centre (RDSC)

determines a shorter time period. Where the landlord has rented the property in breach of Article 26(2) of the

Tenancy Law, a tenant may request the RDSC to award compensation. However, there is no set precedent for the

treatment of such claims, and therefore it is difficult to determine how it would be enforced in practice.

If a legitimate ground for eviction does not arise, the impact is that the tenant has an automatic right of renewal

on the same terms and conditions, with the exception of any permitted increase in the rent, determined

according to the rent index published by Rera.

Conclusion

Whilst the Tenancy Law aims to limit the potential for disputes arising between landlords and tenants in relation

to eviction, it is clear that any notice demanding eviction should be carefully reviewed by the tenant and legal

advice obtained to ensure the landlord has issued the notice on legitimate grounds.

Source: Gulf News

Back to Index






LOW DOWN PAYMENTS ARE NOT THE

ANSWER Tuesday, February 06, 2018

With more and more of developers’ payments plans starting to look alike, warning signs are starting to flash in

Dubai’s property market. It will do good for everyone in the real estate sector to start heeding the signals,

according to a senior official at JLL, the consultancy.

“Someone could buy a property putting in a token down payment, of even less than 5-10 per cent,” said Craig

Plumb, Head of Research at JLL’s regional operations. “There is very little skin in the game from buyers - in many

ways it’s fairly similar to what was happening in 2007-08. And everyone knows how that turned out.”

All through 2017, the majority of freehold transactions in Dubai involved off-plan properties, and the bulk of them

scheduled for delivery by 2019-20. Or even later.

Plumb’s concerns - and these are shared by some of Dubai’s leading developers - is that if a good number of such

buyers stopped making their subsequent payments, it could set off panic alarms for the entire industry.

“In 2008, there were global issued that triggered the real estate market crisis here,” said Plumb. “That’s probably

not the case now - the local economy’s still growing and that’s a big positive..”

Also, the property market itself could make the necessary adjustments well before problems start showing up.

One way would be for buying to balance itself out between off-plan and ready properties, rather than be skewed

towards the former, which was the case in 2017 and even in the second-half of 2016. “We expect a better

balancing to happen this year,” said Plumb.

Certainly, in Q4-17, some of that shift was visible, though only marginal. There was a fair bit of interest centred on

existing properties on the Palm and Emirates Hills, and that in turn also pushed up the average transaction values

during the period.

For 2018, JLL is projecting about 20,000 units could actually be delivered as opposed to the 35,000 homes that

developers had promised. If this proves the case, it would be in line with the handover rates of the last three to

four years. “Not too much of new supply coming in all at the same time is a good thing,” said Plumb. “But

developers should still be asking themselves why they cannot keep up with their promises. And why the handover

delays still happen.”

There still isn’t that much of mortgage activity in the freehold space, now at about 30 per cent. And even with

mortgage rates rising through the year - in line with US rate hikes - it need not have that much of an impact on the

deal side. Moreover, more developers are offering interest-free payment plans for their off-plan launches, and

that will make it less likely for property buyers to head to the bank for a mortgage.

As for trends in Abu Dhabi, the fact that developers there have not had too many off-plan releases last year - and

probably even in this one - is a good thing. It will give that market the benefit of more time to adjust between

supply and demand. “Abu Dhabi property will be unexciting in terms of launches… but that’s what the market

needs at the moment,” Plumb said.

The likely shape of UAE’s property market this year

* Offices: In Dubai, office vacancy rates will be flat, but in Abu Dhabi and Sharjah, chances are that this could

increase further this year, according to JLL. And landlords with office properties should be careful about making






too many demands on their tenants. Most businesses are looking to reduce costs and they are not going to be

receptive to higher rent demands.

* The VAT effect: JLL do not see VAT as being a “market mover” in UAE’s property market. But it will have an

impact on retail, and retailers may have to absorb some of the VAT costs not to put off their shoppers.

Construction - More projects will be awarded, but some could be scaled down to realistic levels.

Source: Gulf News

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AGEING HOTELS UNDER PRESSURE Monday, February 05, 2018

With the momentum provided by the World Expo 2020 and the ever-growing tourist market, several new hotel

rooms and hotel apartments are coming into the market every year. Dubai expects to host 25 million visitors

during the Expo and targets to have about 164,000 hotel and hotel apartment rooms by then.

Citing Tourism and Commerce Marketing data, Dubai Statistics Centre points out that the city had 79,825 hotel

rooms and 24,678 hotel apartments during the first quarter last year. While Dubai is raising its new hospitality

offerings to cater to all segments of people, ageing hotels and hotel apartments are facing the immense pressure

of competing with the numerous fresh properties now available in the market.

Filippo Sona, director and head of hotels in the Middle East and North Africa (Mena) at Colliers International, says

that although a large number of rooms are coming to market, tourism is expected to achieve a compound annual

growth rate of 7.6 per cent. “By 2021, circa 50 per cent of Dubai supply will require refurbishment with 35 per cent

in need of major renovation, equating to 79,500 and 55,650 keys respectively,” says Sona. “This means that to

remain competitive old hotels will have to reposition their assets, and the unbranded hotels will have to seek a

brand to be able to compete and be recognised as an asset that offers international standards.”

Sona foresees good occupancy levels to be maintained in the next four to five years, comfortably above 75 per

cent. He also expects the rates to come under pressure because the source market of Dubai is evolving.

“To maintain volume there is the need to target mega source markets such as China,” he says. “Historically, this

market drives volume and less average room rate. For future hotel developments where land cost constitute up

to 20 per cent of total costs, expected internal rate of return is 12-14.7 per cent. To achieve the above returns,

stabilised occupancy is needed: 64 per cent for three-star property, 71 per cent for four-star property, 68 per cent

for five-star property, 68 per cent for standard serviced apartments and 69 per cent for deluxe serviced

apartments.”

Refurbishment

For a number of landmark properties that entered the market around 2010 and are now around the seven-year

mark, this year is a good time for a refurbishment, says Marko Vucinic, senior vice-president and acting head of

hotels and hospitality group in Mena at JLL.

A refurbishment is a way forward for ageing hotels; Vucinic points out that old properties will struggle to compete

with newer assets that offer fresher designs and trendier concepts as the Dubai market is experiencing necessary

changes. “We see more challenges appear for ageing hotels regarding average daily rates [ADRs] rather than

occupancy,” says Vucinic. “Hotels will have to lower their rates to attract customers. With lower average rates, it

can be expected that occupancy rates experience an only limited decrease.

“Although the hotels are ageing and renovations make sense for most of the hotels in principle, it is crucial for the

owners to measure the incremental impact of it on the hotel performance.”

Also, repositioning should be considered for some properties that do not offer any strong competitive advantage

as simple refurbishment might not provide sufficient returns, he adds.

Industry challenges

The existing hotels in Dubai face pressure in numerous forms. Explaining these challenges, Nathan Hones,

partner at Carter Associates, says that older hotels have to compete with new ones that have all the latest

technology and innovation wholly integrated within the building, which creates a seamless guest experience.






“New hotels can draw upon the most current trends in food and beverage service and give in-house guests and

external local customers the experience they are looking for, thus driving additional revenue through non-room

income streams,” says Hones.

Occupancy levels

Hones points out that the occupancy rates last year have held relatively stable across the various tier markets.

“Dubai’s midscale and economy class occupancy rates have gone up slightly, and the upscale hotel sector has

gone down slightly,” says Hones. “The more telling figure is not the occupancy rates, but rather the ADR that has

slumped between 7 per cent and 10 per cent year-on-year, depending on the asset class.”

He says hotels face the challenge of maintaining occupancy levels amid downward pressure across the industry

on ADR and RevPAR. “The existing hotels can slow this erosion of ADR and RevPAR by capturing back some

market share through refurbishing food and beverage outlets, freshening up guest rooms and looking into means

of increasing additional revenue streams,” says Hones.

He adds that problems concerning refurbishments do not come from the hotel operators as they understand the

condition of the hotel best . The real problem comes from the owners that can be reluctant to invest in their

asset, especially if it requires a closure and loss of revenue, says Hones.

Hones adds that in some cases, owners who have fully recovered their investment and enjoy good occupancy

levels are not in a rush to allocate additional funds into their asset. In the other scenario, the owners that might

have significant debt obligations and face dropping RevPARs and ADRs, are reluctant to ask their investors to

reinvest in refurbishment programmes.

Current trends

Rashid Aboobacker, associate director at TRI Consulting, says the growth in supply and competition will drive

many of the older hotels to explore ways to remain competitive and retain market share. These properties could

change or upgrade certain facilities, renovate and refurbish or even redevelop the hotel. Other options include

changing the sales and marketing strategy, repositioning the property, such as converting a hotel apartment to a

hotel or from a corporate hotel to a conference hotel, signing up an operator or brand or a franchise affiliation or

even changing existing ones.

“Those who do not embrace change, upgrade their properties and stay competitive may experience a decline in

performance, escalation in costs, legal challenges and loss of reputation, and some may even go out of business,”

says Aboobacker. “Typically, a hotel undergoes routine maintenance and replacements throughout its life, but

major refurbishments can be expected every five to six years, and major renovations involving substantial capital

expenditure may be required once in nine to ten years.”

He further states that Dubai is seeing several older hotels going through renovations of guest facilities, most

frequently concerning upgrading rooms, repositioning food and beverage facilities and adding meeting and

banquet facilities. Some owners are rethinking their brand or franchise affiliations, leading to rebranding of

properties.

Sanjay Chimnani, managing director of Raine and Horne and exclusive representative of India’s Lemon Tree

Hotels in the GCC, sees the franchise affiliations as a growing trend in the industry these days. When occupancy is

full and there is not enough competition, Chimnani says hotels could work on their brand name. However, when

there is a fight for occupancy, the prominent and well-known regional and global brands stand strong in the

market. “We see in Dubai that a lot of standalone self-branded operators are finding it difficult to run their

operation in the competitive market,” says Chimnani. “Hence they either find an operator to manage and operate

the property for them, or they become part of a franchise of a larger group that gives them its name and its

marketing advantages, yet allows them to operate it.”






This way a standalone hotel gets an advantage from a franchise name, he says. Additionally, most brands also do

regular property audits to ensure that their franchise standards are well maintained, and any refurbishment

happens as per brand standards.

“Having an international or regional brand name offers a lot of marketing depth, the advantage of its brand

familiarity and reputation and a more significant room rate, more penetration into the market and higher

occupancy with better prices,” says Chimnani.

Source: Gulf News

Back to Index






SAUDI ARABIA UNVEILS NEW HOUSING

PROGRAMME TO BOOST HOME

OWNERSHIP Tuesday, February 06, 2018

Saudi Arabia unveiled a 120 billion riyals new housing programme as the kingdom seeks to boost Saudi

ownership of homes from 47 per cent to 70 per cent by 2030. The kingdom’s programme includes an 18bn riyal

loan-guarantee programme to boost access to funding, and 12.5bn riyals to support home down payments, all to

be spent through 2030, Housing minister Majed Al Hogail told Bloomberg. Authorities want to expand the

mortgage market by more than 70 per cent to reach 502bn riyals by 2020, largely through increased private-

sector participation, he added. The government provides 65 per cent of home loans.

The housing programme is a welcome move that will help tackle the issue of affordable housing, analysts said.

“On the demand side, the issue has always been affordability,” said James Reeve, chief economist at Samba

Financial Group, one of the biggest lenders in the kingdom. “That is, most Saudis want housing but cannot afford

what is on offer. Since the passage of the mortgage law, bank mortgage lending has slowly picked up, and these

latest measures should help to bolster lending still further.”

Sixteen government institutions are taking part in the programme that aims to provide a wide choice of housing

units at prices that suit various segments of Saudi families, state-run Saudi Press Agency said. Saudi Arabia, the

world’s biggest oil exporter, is implementing various initiatives as part of reforms aimed at overhauling the

economy under Vision 2030, an overarching roadmap. The government has unveiled a number of initiatives to

address the housing issue.

The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, set up last year a real estate refinancing

company that will help to pump liquidity into the real estate financing market, which is forecast to rise to 500bn

riyals by 2026 from 280bn riyals in 2017. The company, which was launched in partnership with the ministry of

housing and has received a licence from the Saudi central bank, the Saudi Arabian Monetary Authority (Sama), is

expected to refinance up to 75bn riyals worth of mortgage debt over the next five years, reaching 170bn riyals by

2026.

Last year Sama revealed mortgage measures aimed at galvanising the housing market. Mortgage holders will be

exempt from paying administrative fees when they switch between floating loan rate to fixed loan rate and they

can also move from one mortgage lender to another at no extra cost, the kingdom's financial regulator said.

Sama also said last year it would allow mortgage finance companies to provide more funding to home purchases

by raising the maximum loan-to-value ratio for home financing from 70 per cent to 85 per cent for citizens’ first

home ownership only. The bank licensed a national home finance company, Bidaya and introduced an affordable

mortgage programme in conjunction with the ministry of finance. The government has also implemented a 2.5

per cent “white land tax” to prod land owners to develop idle plots for residential use rather than hold on to their

undeveloped properties.

Source: The National

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EGYPT'S ORASCOM CONSTRUCTION ADDS

$650 MILLION OF CONTRACTS IN Q4 Monday, February 05, 2018

Orascom Construction, the Dubai-listed Egyptian builder, added $650 million worth of contracts to its backlog in

the fourth quarter of 2017, dominated by projects in its home market, it said on Monday.

The firm added around $580m of projects in Egypt during the three months to the end of December, across

sectors including renewable energy, marine and commercial buildings.

Orascom in December announced the financial closure of a 250 megawatt wind farm on the African side of the

Gulf of Suez. Orascom is developing the project on a build, own and operate basis, in conjunction with Japan's

Toyota Tsusho, Eurus Energy Holdings and French Engie.

US contracts made up the bulk of other projects awarded, mainly within the private sector.

“We are maintaining our policy of securing quality projects in which we have a competitive edge, and are pleased

with the continued momentum across our bidding pipeline,” said the Orascom chief executive Osama Bishai.

“We are also particularly proud of our recent investment in the 250MW build-own-operate wind farm as it

underscores our strategy to pursue infrastructure investments that create new construction opportunities and

long-term value for shareholders.”

Orascom in November reported a 13.8 per cent drop in third-quarter profits, as losses from its US operations

outweighed increased profitability among its operations in the Mena region.


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WHY EVERY LONG-TERM EXPAT SHOULD

BUY A PROPERTY IN THE UAE Sunday, February 04, 2018

Last week I was sat in the bizarre, treehouse-like Natural restaurant in Phuket, the largest island off the coast of

Thailand, having lunch with two millionaire retirees from the UAE media sector.

Both gentlemen had enjoyed successful careers over a couple of decades. One was the senior sales executive in a

well-known publishing house; the other ran a niche PR business, largely as a one-man show.

Neither man was an obvious candidate to accumulate a million dollar pot by their retirement date. Fast cars,

messing about on boats, and more than a few brunches had taken up quite a slice of their spare cash, though

both were sensible enough guys and always saved a little bit for a rainy day.

So how did they do it? What was the magic formula?

It was quite simple really. Each of them decided to buy a villa in The Meadows in the early days of Dubai freehold

real estate, instead of continuing to pay rent, and subsequently chose to live on the rental income from the same

properties in their retirement.

Indeed, the annual rental on a Thai villa is only one-month of this rental income from Dubai.

Both admit that retiring on the same money in Dubai would be harder; but that is not what they chose to do. For

them the tropical paradise of Phuket seemed a better option, with excellent health care options, beaches, safety

and a very pleasant way of life.

I’m not sure it would necessarily work for me, but there are certainly far worse places to retire.

The main lesson I took away from this encounter, apart from reminiscing about a very different Dubai, was that

any long-term expat in Dubai should strongly consider buying a home early in their stay in the country.

I remember talking to the CEO of Standard Chartered Bank, Ray Ferguson back in the early 2000s about home

ownership in the UAE. He was absolutely convinced that any long-term expat with more than a five-year horizon

ought to buy a property, simply to save on rent and accumulate equity in their home.

That turned out to be very good advice, not least for Mr Ferguson himself, who was an early buyer on The Palm

Jumeirah. But exactly the same logic applies today.

If you are living in the UAE as an expat, the chances are you are paying a huge amount of money each year in

rent. It’s most likely by far your biggest expense, and you are just flushing that money down the drain.

Put a 25 per cent deposit down and take out a mortgage instead, and your monthly repayments will be around

the same, or slightly less. But when you want to finally leave Dubai you can either sell your property and collect

any accumulated equity, or you can let it out and receive the income minus the mortgage payment.

It’s a fact that mortgage companies are always keen to lend to those earning a decent income with solid

companies, and that they can't take those mortgages away from you if you cease to have that job, as long as you

keep up the mortgage payments.

To achieve the best long-term results from this sort of savings plan - and that’s what it is, a savings plan with an

initial 75 per cent top-up from the bank - then you clearly need to buy property when prices are at a low in their

cycle.






What then are you waiting for with the Dubai property down cycle now over three years old, and due for a

turnaround with oil prices now north of $70 per barrel for the first time in three years? Dubai apartments and

villas may never be this cheap again.

Many people are nervous about buying a property. It can seem very daunting to the uninitiated. But personally I

used to feel much greater pain writing a very large check for my landlord.

Also you have nothing to fear but fear itself, or almost. One colleague recently told me she just can’t face the

hassle of dealing with Dubai estate agents and the Dubai Land Department.

Dubai estate agents can be their own worst enemy, with incessant cold calls to anybody unfortunate enough to

be on the lists of owners or potential buyers. Do they really think that I am likely to decide to sell my home as the

result of a casual phone call that always seems to catch me in the shower?

However, there are ways to deal with estate agents. Do your research and decide where you want to buy first.

Then find out who the main agents are for your chosen district and go to see the top real estate agency. Or, if you

want to bypass agents altogether you could buy direct from a reputable developer.

Be wary about off-plan buying, as not a single developer in Dubai pays late delivery fees. But when a project is

under construction it should be possible to take a reasonable guess on when it will actually be ready, as opposed

to when it is supposed to be ready.

As for the Dubai Land Department, in my experience this is arguably the most efficient and best organised part of

the (generally extremely efficient) Dubai Government.

The other thing to appreciate about owning a home is that, aside from annoying maintenance issues, owning a

home is not really any more hassle than renting one, which is your only alternative.

So after a couple of decades writing about property and investments in Dubai, my very strong advice is to buy a

home as your first priority if you plan on staying in the emirate for a while. It’s a great way to painlessly

accumulate wealth here. It's worth remembering as well, of course, that the UAE also has no capital gains tax nor

tax on rental income.

Your alternative is to chance your savings in what are currently very over-valued global financial markets, or

possibly trust your money to a financial adviser whose ongoing fees will affect the long-term performance of your

savings, assuming that he or she is actually honest.


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COMPANIES TO PRIORITISE EMIRATIS OVER

EXPATS IN NEW NATIONWIDE DRIVE Wednesday, February 07, 2018

The government will ask companies to prioritise Emiratis over expats for jobs in about 2,000 companies as part of

a drive to push more UAE nationals into the private sector.

The Ministry of Emiratisation and Human Resources has selected 400 job titles of positions that it wants to see

Emiratis given the opportunity to fill, before an expat is brought in to take the role.

Officials said companies would not be compelled to take UAE nationals on - but give them an interview or

opportunity they may not have otherwise been given.

The selected posts have a salary that exceeds Dh10,000, and are based on professions currently filled by UAE

nationals.

The aim is to provide 15,000 job opportunities for Emiratis by the end of this year.

That would mark a significant rise on 2017, when the the ministry found jobs for 6,862 Emiratis in the private

sector. That was up from 5,608 in 2016.

When one of the 2,000 companies seeks to recruit an expat for a position, the ministry will scan the market for a

suitable Emirati.

If none is found, the company can go ahead and recruit the expat.

If a potential Emirati recruit is found, the company has to interview them and will be encouraged to prioritise

them - if they are fit for the job.

“At the end of the day, the ministry will not force the company to recruit the Emirati, only to prioritise them,” said

Minister Nasser bin Thani Al Hamli, who was newly appointed in October.

And if the company sees the Emirati candidate as unfit, they should justify the reasons to the ministry.

“We will receive their feedback, and train the Emirati to become qualified, of course they can go ahead in the

mean time and recruit someone to fill the post - we won’t keep the post on hold," he said.

He did not provide examples of the selected companies, but described them as important players in the UAE’s

economic supply chain, and that provide job security and have a large number of employees.

The nationwide drive is similar to the role played by Abu Dhabi's Tawteen Council, which was phased out in 2015

and made part of the Human Resources Authority.

The minister said the drive will not leave expats who were originally selected for the job in limbo.

“This procedure will take place from the start, before the company applies for the work visa. They will apply for

the work contract, and no one will leave his job or enter the country before having a contract ready," Mr Al Hamli

said. Once companies get used to the concept, he hopes they will start to scan the market from themselves for

Emiratis first. “We are now in a transition period, so in this phase the companies will be shuffling their priorities,"

he said.

Members of the Federal National Council have repeatedly asked the government to do more to boost

employment levels, claiming too many graduates in particular are unable to find good jobs.






“The goal is to speed up Emiratisation in the private sector and give a chance to UAE nationals to be interviewed.”

Nevertheless, Emiratisation is moving at a slow pace and the ministry had to take initiatives to speed it up, he

said.

“Emiratisation is a joint responsibility and will be achieved by building partnerships; the government will

synchronise with the private sector," the minister said.

At present, there are 4,155 Emirati candidates registered in the ministry’s database, which companies can already

search for by qualification and job area.

As an incentive for companies who cooperate with the scheme, they will be given discounts on government fees

relating to their business.

In addition, the ministry will also offer to set “satellite offices” for companies in rural areas, to boost employment

there.

The first office was set in Khor Fakkan for Emirates National Bank of Dubai, which has so far recruited ten

Emiratis.

By the end of 2018, 1,500 such offices will open based on companies’ requests in Ras Al Khaiman, Fujairah and

Khor Fakkan.

“And in the coming years, similar offices will open in Mussafah, Bida’ Zayed, Al Ain, Al Dhaid, Ajman and Um Al

Quwain," the minister added.


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SURVIVAL OF THE FITTEST: PRIVATE

DEVELOPERS SHRINK IN NUMBER Tuesday, February 06, 2018

Typically, the emergence of a new technology or opening of a new market results in a rapid increase in prices or

valuations. This causes a flurry of new players, dominated by the private sector, entering the market in order to

capitalise on the supernormal returns. For instance, during the Dotcom bubble, there was a surge of tech IPOs as

many investors were eager to invest (301 IPOs at its peak). However, soon after the bubble burst, the number of

IPOs contracted to low double digits in the subsequent years. With the numerous IPOs that were launched, only a

handful of companies survived and thrived which included the likes of Amazon.

When we look at the development sector in Dubai, we can witness a similar outcome. A recent study by Global

Capital Partners highlights the low survival rate of private sector developers between the first and second cycle,

which is common in the nascent stage of any new market. The total overlap of residential and commercial private

sector developers between cycles was a staggeringly low 8 per cent.

As the Dubai real estate market continues to mature, we expect the survival rate of private sector developers will

fall further, implying that the ones that survive will have higher completion rates and enjoy greater confidence

levels in the market.

A grass roots analysis of the residential landscape of private sector developers reveals that during the peaks in

both cycles, the number of developers was at their highest in monitored freehold areas (above 70 unique

developers in both the peaks). As prices increased exponentially, developer margins expanded, causing a flurry of

small developers to enter the market. A dissection of unique developers for the first and second cycle reveals a 9

per cent overlap, implying that the majority were not capitalised well enough to withstand the downturn or did

not see opportunity to re-enter the market.

This is a typical scenario that exists with the creation of new markets that go parabolic where 'easy' money can be

made. What we also are witnessing is that the developers that have survived are the ones that have improved the

product mix and/or the capitalisation of the project, thereby improving the visibility of the supply pipeline.

In addition, the units launched by the top five private sector developers in both cycles shows a higher

concentration for the latter in the ratio of 2:1, highlighting that this time around, the developers were better

funded to take on large scale projects, and thereby improving the concentration of offerings by the said

developers.

Overlap between two cycles

In the commercial space, like the residential space, there was a rush of private sector developers launching

projects in the first cycle. However, in the second cycle, we can witness that the private sector developers for the

most part kept away from the office segment. A comparison between the overlap of private sector developers in

the first and second cycle is only 5 per cent within this segment. Furthermore, the lower rate of overlap suggests

that private sector developers have witnessed tougher conditions in the commercial space.

The reduction in the number of private sector players in an emerging market is a natural phenomenon as

increasing competition forces smaller developers to leave the fray. We opine as the Dubai market continues to

mature, the private sector landscape will be dominated by a few big players (a la Damac and Azizi). As for the

smaller players, they will have to adjust their offerings to be more competitive or unique in order to survive as the






bulk of off-plan sales are skewed towards the more reputable companies. This implies that value in the private

sector can be found in the overlap of developers between the first and second cycles.

Source: Khaleej Times

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WHY COMPLETE AND NEAR-COMPLETE

STOCK IS A SAFER BET FOR PROPERTY

BUYERS Tuesday, February 06, 2018

Dubai completed 14 per cent more residential real estate transactions in 2017 over the year before, with some

69,000 deals done, according to the Dubai Land Department (DLD).

Last year's transaction boom is thanks to the surging supply of off-plan properties. The real estate market's

transition to low deposit plans being the norm, not the exception, should be noted with some trepidation. Private

sector developers now rely almost completely on payment plans of 10 per cent to 30 per cent with balance due

upon completion. Having a purchasing stake, but not the whole purchase price in escrow, can provide buyers with

some comfort that their risk is reduced but it is by no means a guarantee of a happy ending.

Low deposit payment plans are a boon for investors and make for great headlines, but for market observers, they

also raise some red flags.

Niall McLoughlin, a senior vice-president at Damac Properties, one of the region's most prolific developers, called

the increase in 'generous' payment plans "very concerning". McLoughlin notes "too good to be true" plans are

collecting only 10 per cent deposit with the remaining 90 per cent payable over the long term and even into post-

completion. Construction costs typically average 50 to 60 per cent of a project. Where does that leave developers

who collect just 10 to 30 per cent of the property value during the construction period?

And further, where does that leave the property buyer?

Those considering off-plan should be aware that projects can and often face delays, sometimes exceeding years

beyond the marketed completion date. Projects can also be cancelled, completely putting your down payment(s)

at risk.

Following the 2009 GFC, the Dubai government made escrow accounts mandatory in order to protect a

purchaser's progress payments. Since then, developers cannot use purchaser funds for anything other than

construction. And if a project is delayed over a year, buyers can make a claim with Dubai's Real Estate Regulatory

Authority (Rera). But still there is no guarantee that any money will be recovered.

If the finished product is less than you expected, it gets even more complicated.

Despite this, Emaar can launch and sell out a project in a morning. Consumers trust the brand. Time and time

again, they deliver. And they deliver quality. But typically, the smaller (and lesser-known) the developer, the more

generous the payment scheme, and the more generous the commission offered to sales agents. This is not

because these small developers are cash-rich and less in need of buyer funds to construct. The opposite is true.

They are fighting tooth and nail for every single customer.

Critics may claim that at least some of these low deposit offers are not tied to financial reality but are a sell-at-all-

costs and hope-it-works-out-in-the-end strategy. With each new project launch and each new generous payment

scheme offered, the bigger the drag down on property prices of both off-plan and completed stock, and the less

likely developers and off-plan buyers will realise the happy outcome they'd hoped for.






On the flip side, property prices across the UAE have been falling for three-and-a-half years and are now back to

early in 2013, even late-2012 levels. General sentiment is that they cannot keep falling and will rise in the lead up

to 2020. A sound argument can be made that there has not been a better time to buy in at least five years and

may not be for years to come.

If that is true and if you can pick a project with a low deposit payment plan and developer who delivers on time

and what they promise, then the upside could be very substantial.

Oil recently hit $70 for the first time in three years, giving some solid reason for optimism. Despite big falls in

asking rents across the country in the past couple of years, rents are still high and rental yields continue to be

among the highest in the world.

With each passing day, the infrastructure and benefits of living in the UAE improves. It's easy to settle into the

comforts of life here and expats are clearly staying longer. For the many who are now five years-plus into their

two to three-year planned stint, buying and getting out of the rent-forever trap makes a lot of sense. And for

those low on savings, generous off-plan payment schemes can appear to be the only option.

Do your research into the developer, the community and the availability of finance for the project and for you.

Even if the project is two to three years away from completion, unless you plan on paying the whole amount in

cash, talk to your bank or a mortgage advisor about what you'll need to qualify for a loan. You may be pleasantly

or not so pleasantly surprised.

Even if you're in a position today to get a loan, you may not be when the project is finished. Lending criteria,

valuations and your personal circumstances can and will change, and the lower your upfront deposit, the more

difficult it'll be to obtain a mortgage at completion.

Well-located, well-maintained, complete and near-complete stock is a much safer bet, but requires a bigger

upfront cash outlay and is clearly not a get-rich-quick scheme.


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WILL READY MARKET STEAL OFF-PLAN'S

THUNDER IN 2018? Tuesday, February 06, 2018

After a turbo-charged performance in 2017, Dubai's off-plan property sales slowed down in January. The volume

of off-plan sales dipped 28 per cent and the value of such transactions decreased 40 per cent in January

compared to a year ago, according to data by GCP-Reidin.

Only a handful of developers launched new projects last month, including Emaar Properties, Damac Properties

and L-I-V Real Estate Development.

"What is important to remember about 2017 was that there was a huge amount of launches for one, but also that

a lot had attractive payment plans, post-payment plans, fee waivers and attractive offers. It's completely natural

that developers will take a pause, as it's not possible to keep offering those type of deals indefinitely. I think for

2018, we will see less launches, but a strong appetite will remain for the launches that there are," says Lewis

Allsopp, CEO, Allsopp & Allsopp.

"Following an amazing year for off-plan properties with the total volume of sales twice as much as ready

properties, a dip in sales in January is natural to happen," reckons Adrian Popica, general manager, House

Hunters Real Estate Brokers.

In January 2018, 1,645 off-plan deals were registered in Dubai compared to 2,281 units 12 months ago, says GCP-

Reidin data. In terms of value, off-plan sales worth of Dh2.04 billion were transacted in January 2018 in contrast to

sales worth Dh3.375 billion 12 months ago.

Communities that performed particularly well in terms of off-plan sales were Meydan (up 3,043 per cent), Dubai

World Central (119 per cent), Jumeirah Village Circle (115 per cent), Town Square (29 per cent) and Dubai Creek

Harbour.

Developers may also be in a hurry to release any previously unsold stock in the aftermath of value-added tax

(VAT) before launching new projects.

"VAT will have a minimal impact as it only applies to brand new properties that haven't been sold and have been

ready for more than three years. The purchase of an off-plan property is exempted from VAT at the moment,"

informs Popica.

"VAT in property transactions is a comparatively low amount. I don't believe it will have a major impact. It's never

nice having an extra expense, of course, but it is manageable," Allsopp points out.

Market observers expect the focus to shift to ready properties in the next couple of years as most projects

launched in the last three years are going to be handed over before 2020.

Even in the ready market, the volume of sales transactions in Dubai dipped 24 per cent in January 2018 while the

value of such deals decreased 26 per cent compared to January 2017. The final January tally for ready properties

was 867 units against the 1,138 deals a year ago.

Ready properties worth Dh1.307 billion were transacted last month compared to Dh1.769 billion 12 months ago.

Apartments in Dubai Marina and Sports City performed well in the ready market while villas in Arabian Ranches,

the Springs and Meadows and Jumeirah Islands saw robust demand.






"I predict that 2018 will see a strong secondary market performance, especially with the handover of more

affordable housing. I would expect this to continue in the run-up to 2020 with a lot of handovers expected

between now and then," adds Allsopp.

Says Hussain Alladin, head of research and IR, Global Capital Partners: "In a larger sense, though it's too early to

say, there might be somewhat of a rotation of money flows towards the ready space this year as investors see

value in pricing."

There is, however, uncertainty in the market on how sustainable the mid-term absorption of new residential

supply by end-users will be.

Says David Godchaux, CEO of Core Savills: "I foresee a regaining of interest in the secondary market over the next

18 months as many new units are handed over, especially if it turns out premiums are negative on the back of

insufficient end-user demand, weakening rents and decreasing yields. We see a few investors waiting to seize

opportunities when they arise, more specifically in the upper mid market and prime segments, that are

increasingly becoming an attractive product in core and established locations at low price points."


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CHINESE ECONOMIC INFLUENCE IN THE

UAE GROWING, SAYS JLL Wednesday, February 07, 2018

China's influence in the UAE is growing as the contractors from the Far Eastern country become increasingly

active in local construction projects and the number of Chinese visitors continues to increase, according to

consultants JLL.

According to JLL, the UAE plays a crucial role in China’s proposed “new Silk Roads”, including a maritime route

from China through South Asia to Africa and Europe and an overland route through Central Asia to Iran, the

Middle East and Europe.

“This is part of the ‘one belt, one road [initiative] with the purpose of expanding its economic influence across

Central Asia, the Middle East, Africa and also Europe,” JLL senior vice president Marko Vucinic said on Wednesday.

“The main goal is to invest in infrastructure [along these routes]. Dubai is a key city in this strategy, and gateway

to stable markets, especially in Africa.

“China sees the UAE as one of [its] major trading partners,” he added, noting that currently about 60 percent of

Chinese exports to regional markets are channeled through the UAE.

Vucinic pointed to a number of significant Chinese investments in the UAE – such as in Abu Dhabi Industrial Park

and Dubai Food Park – as signs of growing Chinese economic involvement in the country.

“One of the most visible ways that China is having an impact on the UAE is through the large presence of Chinese

contractors in the country,” Vucinic added. “China is also providing construction financing, which is impacting the

overall market.”

Notably, a Chinese company, the China State Construction and Engineering Corporation, is the second most

significant contractor in the UAE by value ($2.94 billion) with 16 projects under execution.

Additionally, Vucinic said China has become the fourth most significant source market for visitors coming to

Dubai, behind only India, Saudi Arabia and the UK.

“There was a 49 percent increase, year-on-year, in the third quarter of 2017 [in Dubai]” he said. “We’re seeing a

similar trend in other emirates. In Abu Dhabi, China is among the top two source markets, and we this spreading

across the Middle East as a whole.”

Andre Langston, JLL Hotels and Hospitality executive VP, said that Chinese brands are increasingly present in the

UAE, and Chinese malls – such as DragonMart – are increasingly looking to expand their presence in the UAE and

elsewhere in the region, a trend he believes will pick up pace in the next few years.

“The Chinese will build and finance the shopping mall, and you’ll see a lot of [Chinese] brands coming into the

market,” he said. “China will have a major impact on the retail industry [in the UAE].”

Source: Arabian Business

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GULF MARKETS DRAGGED DOWN BY

GLOBAL TUMBLE BUT OUTPERFORMS

MOST OF ASIA Tuesday, February 06, 2018

Middle Eastern stock markets fell on Tuesday because of the global downturn in equities, but the region

outperformed emerging markets in Asia, where MSCI's broadest index of Asia-Pacific shares ex-Japan plunged 3.6

percent.

Because of low oil prices and poor liquidity, the Gulf greatly underperformed the uptrend in global emerging

markets last year, so fund managers say it may be less prone to profit-taking and have less distance to fall on the

way down.

The Saudi stock index fell 1.6 percent with declining stocks outnumbering gainers by 169 to 13. Cement shares

continued to pull back after big gains last week, with Jouf Cement down 3.3 percent.

Mediterranean & Gulf Cooperative Insurance and Reinsurance fell a further five percent, having lost almost 10

percent on each of the previous two days. The Capital Market Authority has said it might suspend or cancel trade

in the stock following the central bank's decision to prohibit the firm from issuing or renewing policies pending a

capital increase.

But the biggest bank, National Commercial Bank, rose 0.7 percent. It reported a fourth-quarter net profit of 2.56

billion riyals ($683 million), up from 2.29 billion riyals a year ago. SICO Bahrain had forecast 2.16 billion riyals.

PetroRabigh added a further 3.1 percent after soaring 9.9 percent on Monday, when it reported a leap in fourth-

quarter net profit.

Dubai's index fell 1.5 percent as losing stocks outnumbered gainers by 32 to three. Abu Dhabi's index sagged 0.9

percent.

In Qatar, the index lost 2.1 percent. Salam International Investment, the most heavily traded stock, closed 3.2

percent lower, far off its intra-day low. It had plunged by its 10 percent daily limit on Monday, when it posted an

annual net loss of 89.9 million riyals ($24.7 million) versus a year-earlier profit of 119.7 million riyals.


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MIDDLE EAST REAL ESTATE TYCOON

WARNS OF A ROCKY 2019 — BUT SAYS

REGION IS RIPE FOR INVESTMENT Monday, January 29, 2018

A mogul of Middle East real estate development, Emaar Properties Chairman Mohamed Alabbar, said that the

region has plenty of development opportunities despite geopolitical tensions and difficulties doing business.

"If I was to look at the region as a whole I'm still positive," he told CNBC at the Milken Institute MENA Summit in

Abu Dhabi on Wednesday. However, he cautioned investors to remain prudent in the longer term.

"I'm just careful about what is 2019. I'm just worried that we've been having a good time for too long. So I just

hope that 2019 goes well … So make sure your balance sheet and debt level is at reasonable levels, so if there's a

shake-up you can handle it," he said.

Emaar Properties is a real estate development company based in the United Arab Emirates (UAE) which is

responsible for developments throughout the country and the wider Middle East, and beyond.

Founded in 1997, Emaar Properties has been responsible for much of the development of Dubai, including the

iconic Burj Khalifa, the world's tallest building. It has also developed shopping malls and residential property,

hotels and entertainment venues.

The real estate firm also has developments further afield such as in India and Pakistan.

Speaking to CNBC, Alabbar summarized the outlook for the company. "My view is that Morocco is doing well for

us, I would say Egypt is doing extremely well; Saudi Arabia with all the restructuring going on, it's going to be a

fabulous opportunity. In the UAE, we still expect to grow 20 percent on an annual basis," he said, noting that the

company's growth in India was recovering and Pakistan was doing "reasonably well" for the firm.

Alabbar said the company had achieved around $5 billion of sales in 2017 and close to $1.8 billion of net profit

with the company growing around 20 to 25 percent on an annual basis.

"Trust me, the margins, the opportunities and the growth I've been having in the Middle East over the last 20

years — even if you make a mistake, it's so worth it," he said, although he noted doing business in the wider

Middle East had its challenges. "Of course if I'm doing business in the UAE, it's comfortable, it's safe. But if I have

to go to Cairo (in Egypt) I have to know the government, I have to know the mayor of Cairo, the mayor of

Alexandria. But that's what we do, that's what we're paid for, that's what we have to do to grow our business," he

said.

The Middle East is certainly not a region for the faint-hearted. There is ongoing geopolitical turbulence caused by

the continuing conflict in Yemen, uncertainty in Syria and Iraq about the possible resurgence of terrorist group

Islamic State and internal disputes within the Gulf Cooperation Council (with Qatar being sidelined by Saudi

Arabia, Bahrain, the UAE and Egypt), not to mention perceived proxy wars between Saudi Arabia and Iran.

Couple these issues with economic instability, prompted by the lower oil price, and there's a combustive mix for

most businesses. Alabbar said it was nothing new, however, and that the region was ripe for real estate

development and infrastructure investment.






"I think that what the Middle East is going through is, unfortunately, not new … But the truth is that the

opportunities exist — there are millions of people who have to go to school, they have to shop, they have to find

jobs and open new factories, there's tourism, so therefore that will contribute to economic growth in the whole

region."

Asked about Emaar Properties' balance sheet, Alabbar said there had been difficult times.

"2007, 2008 and 2009 was very painful and I try not to forget the lesson. And I deal with bankers with a lot of

respect but when they come and tell me 'your balance sheet is not very efficient' I know that I'm doing a good job.

So I like to keep my debt at a very reasonable level. Then again, we have to do business, we have to be aggressive

but at the same time we have to keep our eye on the cycle."

Source: CNBC

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LANDLORD'S CONCERN OVER RECOVERY

OF THE RENT EVICTED TENANT OWES Thursday, February 08, 2018

I have a one-bedroom apartment in Dubai Marina, which I rented out to a lady in July of 2017. My problems

started immediately after. Her rental cheque and the cheque issued for the security deposit both bounced and

after a few reminders to her to replace them, I sent her an eviction notice and then subsequently filed a case with

the RDC rental disputes centre. She was finally evicted from the apartment last week and RDC has now closed the

case. My concern is with the recovery of the rent she owes me. Who do I have to follow up with to find out if I will

ever see the rent owed to me?

What about the outstanding DEWA bills? There is no deposit with which I can cover the utility bills. In this case will

I be liable to pay even if the court order clearly mentioned that the DEWA bill has to be settled by the tenant? BR

Unfortunately the award of lost rent or compensation is not automatic by law. The filing party should request

what they are owed as part of the judgment award in the complaint. You will therefore have to follow up with the

rental dispute centre.

In case you were wondering about other avenues, regrettably you will not be able to file a new case for

compensation at the Dubai Courts as they do not handle tenancy cases.

In the meantime, I suggest you sort out what is owed to DEWA etc, so that this can also be added to the

compensation.

We rented a villa last August 1. On August 21 I received notification from DEWA notifying me of large water

consumption for the previous three months, indicating a possible leak. To cut a long story short, we tried to

contact the landlord through his intermediary but without success. The water consumption for our first 21 days

was 75,000 gallons! We have a pool and garden but are only three people in the property. We did everything to try

to remedy the situation, including reducing irrigation / pool etc, and DEWA were extremely helpful. However, no

word from the landlord until I sent him a letter from RERA (Real Estate Regulatory Agency), which caught his

attention. Now we are close to coming to the end of our six months tenancy and only this week are we finally

getting his workmen to try to locate the leak, and we don't yet know how much this might mean upheaval for us

in terms of digging up the entire front of the property as the leak is most certainly underground. He has now

agreed to pay for all repairs and also to something toward the excessive water bills ... both yet to be realised

however.

We have had no use of the pool and no benefit from the garden at all (contrary to Clause 8 in the Tenancy

Contract). I have had all the trouble of bringing people in, of DEWA monitoring our meter, my having to take

meter photographs night and morning to check consumption and I've had sub meters installed on the pool /

irrigation etc, all at my cost / hassle to me (unfortunately I also was hospitalised in September which somewhat

took priority over the leak!).

My view is this: as we have not had full benefit of the property for the past six months and considering all the

upheaval during that time, can we insist that the full year's rental be reduced to that of an identical villa without a

pool? We have paid of Dh325,000 per annum in two cheques ie Dh162,500 for the first half year. My view is that

the next cheque (held by him) be returned and we reissue for Dh87,500, bringing the rental to Dh250,000, which

is the rental here for an identical villa without pool. I'm aware that RERA would likely be agreeable to






compensation, but I don't want the further expense/unpleasantness of actually filing a case with them against

him. AM, Dubai

As the tenant, you have the right of enjoyment to the property you lease and the landlord has the responsibility of

maintaining it to a set standard including any major repairs and all maintenance issues, of which this is one, and

in return for this you pay the rent.

I believe that you are well within your rights to request this reduction, given you have not been able to use the

facilities which you have already paid for. The key to all of this is face-to-face negotiations directly with the

landlord, these kind of communications cannot be done over email or telephone calls as the gravity of the whole

scenario would warrant this, so insist on getting together to discuss the matter further.

It would appear that the landlord is now facing reality by already agreeing to pay for repairs and the contribution

towards the water bill. I’m sure you will be able to come to some agreement on the second rent cheque.

I understand when you say you do not wish to file a case against the landlord and often tenants are indeed quick

to go down this route. Mediation is always better than litigation but bear in mind that this avenue is always open

to you should you hit a block in your negotiations. Remember to stay calm and just state the facts. What you have

paid for is not what you have received, irrespective of the fact that this leak is not the direct fault of the landlord

etc but it is his responsibility.

Obviously if everything is sorted in the future and you do get the opportunity to use the pool again, I’m sure you

will inform the landlord that you would be happy to reinstate the rent to what it was for the next renewal


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JEDDAH TOWER GOING AHEAD AFTER

SAUDI CORRUPTION PURGE Thursday, February 08, 2018

Construction of the world's tallest skyscraper in Jeddah is going ahead, the head of the consortium behind the

$1.5 billion project said, despite the detention of some businessmen backing the plan in Saudi Arabia's crackdown

on corruption. His comments were a sign that the government is trying to prevent the purge from disrupting

major economic development schemes, even as authorities seize billions of dollars of assets from detainees in

settlements of allegations against them.

"We have faced delays. In projects of this magnitude you always have delays - I hope we'll recover the delays

we've had. We will be open for business by 2020, hopefully," Mounib Hammoud, chief executive of Jeddah

Economic Co (JEC), said in an interview. JEC is owned by Saudi investors including Kingdom Holding Co, which has

a 33 percent stake, and construction giant Saudi Binladin Group, which has 16.6 percent and is the project's main

contractor. Both those companies were affected by the corruption purge.

Kingdom's owner, Prince Alwaleed bin Talal, was detained for nearly three months before being freed in January.

He insisted publicly he was innocent of any wrongdoing, but Saudi officials said he agreed to an undisclosed

financial settlement after admitting to unspecified "violations".

Binladin chairman Bakr Bin Laden and some family members were also detained, and the firm said last month

that part of their shareholdings in it might be transferred to the state in a settlement. Most or all of the men have

now been released. The government said last week that financial settlements reached with dozens of people

totalled over $100 billion so far, and that assets including real estate, shareholdings, securities and cash were

being seized. Hammoud said there had been no changes in ownership of the JEC, however.

Binladin has been hurt by financial difficulties in the past couple of years as the construction sector has slumped.

But Hisham Jomah, chief development officer of the project, said Binladin retained enough manpower and

technical capacity to build the record-breaking skyscraper.

The Jeddah Tower, featuring residential and hotel space as well as shopping facilities, is projected to be over 1,000

metres (3,281 feet) tall, eclipsing Dubai's Burj Khalifa, which is currently the world's tallest building at over 828

metres. Construction has reached the 63rd floor and the superstructure - the concrete shell and the cladding - is

to be completed next year, Jomah said, adding that delays in some areas were inevitable because of technical

challenges.

The concrete mix has to be approved by a structural engineering firm in Chicago every month, given the potential

impact on it of Jeddah's changing temperatures and winds, while experts must check almost every week that the

tower is 100 percent vertical. "Between theory and application, what has been designed and what is actually on

site - that is quite another world," Jomah said.

JEC will sign this week a contract with power utility Saudi Electricity Co to build a 134 megawatt substation to serve

the project, Hammoud said, adding that his company had begun negotiations with investors to build hotels at the

site.


Back to Index






DUBAI’S ESTATE AGENTS PUSH THE

ENVELOPE WITH VAT ABSORPTION Wednesday, February 07, 2018

A property brokerage firm in Dubai is absorbing all value-added tax (VAT)-related charges on commissions. This

will apply to all residential leases it makes on a building at City Walk, the high-end mixed-use destination on Al

Wasl Road, for a limited period — from February 15 to March 2.

In addition, fäm Properties will bear the costs of the 4 per cent Dubai Land Department registration fees for

Building 18B — which it has taken on for leasing — for the same period. “While we have welcomed the

introduction of VAT to real estate transactions in the UAE to bring much needed transparency to the market, we

do understand that such changes are often met with a phase of resistance,” said Firas Al Msaddi, CEO of fäm.

“Our decision to absorb VAT costs on the commission of all transactions in City Walk, as well as waiving the DLD

registration fees for 18B, will offer major financial incentives to buyers who are considering investment

opportunities at a time when current conditions can yield strong medium to long-term gains.”

Building 18B is a six-storey residential and retail property, comprising one- two-, three-bedroom apartments and

a four-bedroom penthouse on the top floor, with retail space on the ground floor.

To date, fäm Properties has topped Dh1.5 billion in residential property sales at City Walk.

It will be interesting to see whether VAT waiver/absorption will become a more common incentive estate agents

start offering in the local property market. If it becomes the case, it will be joint with the other add-ons that they

are already deploying, such as waiver of registration fees.

Source: Gulf News

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A YEAR WHEN NEW INNOVATIONS SHOW

UP IN DUBAI REALTY Wednesday, February 07, 2018

To foresee what we should expect in 2018, it is important to note how the many changes we experienced over the

past year have paved the way for advancement in what is becoming a mature real estate market in Dubai. In the

first quarter of 2017, there was an introduction of the first mid-income affordable villa/town house community,

which provided over 1,800 units of new supply.

The average starting sales price was Dh1.6 million for a three-bedroom town house and rents started in the

Dh130,000 range. Needless to say, this was a big hit with buyers and renters.

The off-plan sales market also revived in 2017, whereby 70 per cent of total transactions were off-plan. The main

reasons were the payment plans and lower total price points due to smaller unit sizes, which lured many

investors and end users to off-plan. We also saw an introduction of innovative concepts of collaborative and

sustainable communities with open, shared living spaces such as UNA in Town Square.

Affordability was also another hot topic. Almost 82 per cent of residential transactions in 2017 were below Dh2

million, with almost half below Dh1 million.

According to the Property Monitor Index, on average, apartment and villa/town house sale prices saw a marginal

decline of 2 per cent. Residential rents declined at a more pronounced rate of 4 per cent and which resulted in a

yield compression at most communities.

This is a positive sign that shows that the market continues to mature as it becomes less volatile and investors are

willing to accept lower yields. With less risk, people have far more confidence over the longevity, sustainability and

long-term outlook.

In 2017, Dubai had more than 13,800 apartments and over 7,800 villa/town houses handed over. This was a

contributing factor to price and rental declines. We also saw new trends where landlords had no choice but to

lower rents, offer rent-free months, multiple cheques and include incentives such as landscaping to entice a new

tenant or keep their existing one. Landlords were also under pressure to increase the number of rental cheques

in a bid to be more flexible, which led to the majority of rental agreements being paid in four cheques or more.

The outlook

* Off-plan and new communities

Off-plan sales will most likely continue strong and developers will get even more creative with their payment

plans and introduce rent-to-own schemes. We also might see banks offer creative new products catering to the

off-plan market, especially for end users and first-time buyers. We will also see more community concepts based

around sustainability and affordability while taking a holistic approach to shared living spaces both indoor and

outdoor.

There is much maturity still needed in the off-plan market and new regulations will possibly be introduced to

better protect investors and offer new development options in the affordable category. The Property Monitor

Supply Tracker shows over 54,000 units are expected to be completed and handed over in 2018, while the

materialisation rate will most likely be in line with recent years and we will probably see this number between

16,000 to 20,000 of new units.






* Innovation in real estate ownership

We are likely to be introduced to new ways of investing in real estate with concepts such as crowdfunding.

Crowdinvesting is where a group of individuals collectively purchase a property. Investors receive proportional

legal share of the property, typically through equity in a special purpose vehicle operated by the online

crowdfunding platform. The return consists of regular rental income and potential capital appreciation at the time

of the sale.

Crowdfunding is still in its virgin state in the region. The emergence of technology-driven crowdfunding platforms

in the West is rapidly reshaping the way individuals make real estate investments.

In the UAE, we are seeing some significant strides, where one technology-driven real estate crowdfunding

platform, Smart Crowd, recently received approval from the Dubai Financial Services Authority to establish the

region’s first regulated real estate crowdfunding platform. This will enable any individual to invest and own a

piece of UAE property for as little as Dh5,000 and will most likely stimulate sales in the secondary market.

According to Siddiq Farid, founder of Smart Crowd, “By bringing affordability in the secondary market we will be

able to defer real estate demand from off-plan to secondary. Investors are still willing to put money to work but

unwilling to make big bets. Crowdfunding allows them to invest in properties that are already generating returns

so they can get paid while they wait for capital appreciation.”

We are likely to see new regulation introduced regarding joint ownership in property to address these initiatives.

Source: Gulf News

Back to Index






MODULAR CONSTRUCTION: FASTER,

SMARTER, GREENER Wednesday, February 07, 2018

It was a 21-year-old student who originally made headlines with modular construction. Building on his university

thesis, Moshe Safdie built Habitat as the Canadian Pavilion for the Montreal World Exposition of 1967. Today,

while his creation still stands as an architectural marvel, modular construction is still to attain main stream

success.

The modular concept allows for quicker project execution; hence, lower cost and earlier to market. Coupled

within a controlled and safe construction environment, it results in a tangible positive return on investment (ROI)

compared with on-site construction. Operational efficiencies include central oversight, 24x7 factory operation,

health and safety standards making it the ideal solution for designers, developers and engineers. Why then has it

not seen wider adoption?

A key reason is the limitations around logistics, shapes and sizes. In ground-up development, designers and

developers like to get creative. The real advantage of modular has been replicating a “pod” over and over again. It

is easier to construct boxes upon boxes of these pods in a factory setting, than on the job site. However, should

the designers request a unique circular dome or curvatures for example, these elements will require on-site

traditional construction. Also, the cranes that place the pods on top of each other can only go up six to eight

floors in most cases. There are creative ways to resolve these issues, but we aren’t going to be building the Burj

Khalifa or the new Abu Dhabi midfield terminal entirely in a factory yet.

In 2012, Amana Contracting Group started operating a Dubai-based innovative concept, Dubox, which designs

and delivers complete multistorey buildings in concrete using modular methodologies. DuBox developed from

the unfinished grey concrete module used by Safdie to the prefabricated prefinished volumetric concrete (PPVC)

modules. Entire structures are manufactured off-site in a 62,000-sq-m factory in Dubai Industrial Park. DuBox has

creative ways to resolve the challenges mentioned earlier to achieve open spaces vertically or horizontally by

adopting hybrid construction methodologies.

Clients such as Adnoc have commissioned a 90,000-sq-m built-up guest house project in Al Ruwais, in the oil belt

western region of the country. By adopting the disruptive modular method of Dubox, the whole project was

constructed off-site using concrete modular elements, and transported to the job site. Accordingly, Dubox

delivered each of the eight G+2 buildings comprising 216 rooms each in a record time of 27 days. The whole

project, including a mosque and a community centre, was delivered in 20 months. Dubox even obtained LEED

Gold recognition on the project.

An 80-week project can be completed in 55 weeks using the modular methods in lieu of conventional

construction. Reduction in completion time generates early income and higher ROI for investors.

Modular is faster, smarter and greener. Manufacturing construction in a monitored factory environment

guarantees high-quality product, fully finished and furnished. Boxes are scalable and relocatable. Built in half the

time of conventional construction with reduced waste, pollution and risk. This disruptive technology has been

gaining foothold, especially with the booming trend of 3D concrete printing.

Source: Gulf News

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OWNERS’ ASSOCIATION IN DUBAI: HOW,

WHAT, WHY Wednesday, February 07, 2018

Owning property comes with its merits, but to get the most out of your investment, it is imperative that the asset

is well managed and maintained. And this is where the owners’ association (OA) steps in. However, most investors

and owners remain partially or completely ignorant to the need for an OA, and its essential role and

responsibilities.

What is an OA?

The Jointly Owned Property Law, popularly known as the Strata Law, was enacted in 2007, with regulations added

in 2010 pertaining to the ownership of common areas, and providing provisions for the establishment of an OA to

manage the same.

“OA is a non-profit establishment and a separate legal entity comprising all the owners of the units in a jointly

owned property,” explains Srinivasan Krishnaswamy, vice-president of business development and strategic

planning at Deyaar, whose job includes looking after OAs for Deyaar’s communities. “The OA is responsible for the

management, monitoring and maintenance of common areas within the jointly owned property and each unit

owner is a member of the OA. All individual owners in a building or community automatically become members

of the OA.”

This means as soon as you purchase an apartment or house in a building or community, you become a part of the

OA. And that necessitates a payment of what is called the annual service charge, for the maintenance and upkeep

of the common areas of the building or community.

OAs manage, control and administer the common areas on behalf of all the owners of a property, including

matters like enforcement of statutory regulations, community or building rules, maintenance and upkeep, and

security. They also play an active role in facility and property management, as well as strategic financial

management required to discharge their role responsibly. Why finances, one may ask? Because properties need

considerable financial commitment to maintain and improve over their ageing life cycle.

The OA is usually governed by a board of five to seven elected unit owners, who work voluntarily for the

betterment of their community. It is headed by an OA manager, who may be an owner acting in a voluntary

capacity, but there is a growing trend for appointing OA managers from a specialist company licensed and

registered by the Real Estate Regulatory Agency (Rera).

“Rera plays an important role with respect to the management and regulates the relationship between parties,

including owners, landlords, developers, owner association management companies and service providers of

facilities in a real estate development or project,” says Krishnaswamy.

Are OAs meeting expectations?

There is a lot of discussion regarding customer expectations from OAs, from disputes surrounding service

charges, to the quality of maintenance and upkeep. So are OAs meeting expectations? Given the complexity and

range of activities OAs need to balance and an increasing demand for quality by customers, upskilling the OA is

becoming a pressing need. An example is companies like Deyaar Owners’ Association Management (Doam),

established in 2009 and a subsidiary of Deyaar Development. Doam offers management services, not limited to

Deyaar properties alone, which include professional administration, diligent contract and maintenance






supervision, cost control and property inspections, among others. Jeevan J. D’Mello, chief customer and

community officer of Emaar Properties, also believes that the maturing OA market is recognising the need for

highly skilled members to meet rising customers expectations.

“The owners’ association management industry is fast developing and the importance of having professionally

qualified association managers is being recognised in the region,” says D’Mello. “Complementing it, service

expectations from customers too are augmenting. It is, therefore, important to train and develop professionals in

the owners’ association management industry to meet the world-class standards that customers expect.”

How can OAs bridge the gap?

A critical expectation of customers is the quality being delivered. While service charges do attract an expectation

that the money will be spent and invested wisely, controlling wastage where possible, a compromise on quality is

not in order, according to D’Mello. “OAs should not compromise quality over cost,” he says. “Good maintenance

practices will not only enhance the value of the property but also reduce capital replacement costs and ensure

health and safety of the residents. Proper insurances to protect the community and residents must also be in

place.”

Inadequate management of building plant and machinery, the perils of which most owners remain oblivious to, is

fundamental to an understanding of the cost-vs-quality ratio. As buildings depreciate, so does the machinery and

equipment. Quality preventive maintenance is, therefore, essential to extend their life and avoid high

replacement costs before time.

An evolving ecosystem for property management has meant evolving customer expectations from OAs. These

now go beyond pure building maintenance to sustainability and efficiency management, as well as adherence to a

growing code of conduct for buildings. Therefore, smarter building management systems for health and safety,

lighting, fire etc., that can further improve quality of life, as well as ensure utility efficiency and cost savings, need

to be factored in if OAs are to bridge the gap. For example, some companies are already implementing a

comprehensive and robust portfolio of services, overseeing technical, environmental, security, financial,

administrative and customer service tasks for the communities they manage, says Krishnaswamy.

What challenges do OAs face?

To enjoy seamless functioning, OAs need to ensure they have ample funds. But that appears to be one of the

biggest roadblocks facing OAs currently. “OAs must focus on ensuring they have a robust capital reserve fund and

insurance policies to protect their assets,” says D’Mello. “Capital reserve fund is set aside for future plant and

equipment replacement, after the useful life of an asset has come to an end. On the insurance front, OAs must

ensure they have the right cover by consulting professionals.”

Krishnaswamy adds: “Often if preventative maintenance towards replacing building systems is not planned

correctly, the costs of replacement often negate any possible gains from efficient energy consumption.” A key

driver of low capital reserves is unpaid service charges, which can wreak havoc on maintenance plans and

budgets. The absence of a legal recourse due to the grey area surrounding the legal status of OAs exacerbates the

issue, although Rera is continuously engaging to make the OA a robust and independent legal entity.

The issue becomes more critical in the case of owners residing abroad. “Authorities have yet to enforce legislation

on these service charge requirements,” says Krishnaswamy. OAs allow unit owners to have a say in the day-to-day

operations of the buildings and communities. However, greater communication and engagement is required to

ensure unit owners, the board and the OA manager are fully aware of their roles, and are adequately equipped to

execute their responsibilities.

Source: Gulf News

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DUBAI’S NEW-GENERATION RESIDENCES:

LIVE, WORK AND PLAY SPACES Wednesday, February 07, 2018

Live, work and play spaces designed to appeal to millennials are changing the way homeowners in Dubai look at

property. Developers are delivering a lifestyle with retail, club areas and recreation built in, and house-hunters are

more likely to consider the whole package than the individual house.

Having the lifestyle you desire right on your doorstep is crucial to this segment. David Godchaux, CEO of Core-

Savills, tells PW, “The growing interest for bona fide mixed-use developments and adoption of the live-work-play

philosophy by millennials, is leading communities to blur the edges between these spaces.

“Jumeirah Lakes Towers [JLT] and Dubai Marina, with Dubai Internet City and Dubai Media City, can be very good

examples of combined office, residential and food and beverage areas and they are also home to many start-ups

and small and medium enterprises primarily driven by millennial employees. This demographic doesn’t want to

commute and wants to be centrally located, even at the cost of smaller living spaces.”

The search for the perfect lifestyle becomes an important driver in decision-making. Alya Mahdy, executive

director — commercial at Jumeirah Golf Estates, tells PW, “Similar to the trend in other buyer age groups,

[millennials] have very specific choices when it comes to buying a home, and are more attracted to modern

amenities that complement their lifestyle, the latest architecture and technology, and accessibility to their

favourite spots in Dubai.”

Lewis Allsopp, CEO of Allsopp & Allsopp, says that certain age categories have specific preferences for tower or

villa accommodation. “Buyers in their 20s prefer the tower-style living as the typical tower-style communities lend

themselves to busy and active lifestyles with a huge amount to do on the doorstep,” he tells PW, noting that a

typical expat millennial buyer in the UAE is born in the 1980s and roughly 27-35 years old.

Low-rise

A number of low-rise developments have emerged in the UAE in a trend that is said to be in direct response to

demand from this demographic. Developers are happy to cater to this requirement. “We are seeing this trend of

community living and low-rise developments gaining traction from this demographic. Developers are responding

to this trend, particularly in the affordable market segment, partially also because low-rise construction is cost-

effective,” says Godchaux.

Examples in the affordable segment include Remraam and the upcoming Town Square by Nshama. In the prime

segment, City Walk and the upcoming Bluewaters are among those catering to the trend for destination living.

The GCC millennial is particularly interested in the live-work-play spaces. And there are many communities

offering G+1 G+2 G+3 apartments.

“They are targeted for savvy investors and the newer second-generation regional demographic who prefer a more

European low-rise, pedestrianised development potentially due to the influence of travel and higher education in

the West,” says Godchaux. “This is even evident in the rising level of high street retail and food and beverage such

as Al Seef, La Mer, Box Park and Outlet Village, among others.”

Villas come into the picture for growing families. Allsopp says, “As millennials gets into their 30s, we are noticing

an increasing number are looking towards villa communities as they start to think about raising a family.”






Godchaux agrees that as the family size starts increasing, villas come back into the picture. “Villas, on the other

hand, are predominantly for families who prefer privacy, larger gardens and family spaces, nearness to schools

and are open to commute to economic clusters,” he says.

Affordability

Affordability is crucial to the millennial story. In many parts of the world, millennials cannot afford to buy

property. “Globally, the millennial buyer segment is limited as many face the issue of affordability, while also

being averse to putting their roots down in one place, thus preferring the agility of renting,” says Godchaux.

In the UAE and the wider GCC, the millennial buyer is somewhat more empowered. Godchaux explains, “Among

regional millennial buyers, we see a marginally stronger inclination to homeownership and a slightly higher share

of contributions from the bank of mum and dad to facilitate acquisitions when compared globally.”

Allsopp says that many expats come to work in Dubai as millennials and are eager to get on the property ladder.

“Our data shows that 35.9 per cent of our buyers are millennials,” he says. “I would expect that this would be

higher if it wasn’t for the high obstacles to entry into the market, namely the size of the deposit and the fees

involved.”

He argues that millennials here are quite different from their counterparts in, say, the UK. “It’s quite different to

what we are seeing in the UK and I think that is for a number of reasons,” says Allsopp. “To start with, the cost of

living is high in the UK, as it is in Dubai. What is different in the UK though is that the average wage is lower, it’s

taxed, then there are similar costs to here in terms of rent, car, fuel, food, among other things.

“The millennials in the UK are not in the same financial position as those in Dubai. Added to that, there a

numerous studies reporting that the average millennial in the UK is not as concerned with purchasing property or

looking long term; they are all about the here and now and spending their income on life and experiences, rather

than saving and looking to purchase a property. I think the millennials in Dubai are different, not just because of

the difference in earnings, but because of the mentality of a person that moves away from family and friends to

make something with their life.”

Mahdy says that the lower interest rates are also a factor attracting buyers. “Due to lower profit rates on home

finance, more millennials are buying property than they were previously,” she says.

Developers, for their part, are creating attractive payment plans. “Flexibility in payment plans and ease in

acquiring finance for the initial down payment remain key for the mid-income millennials,” says Godchaux.

There is a big push for more affordable housing, while buyers are also looking at the off-plan market, according to

Allsopp. “They are attractive properties in great communities and they make a great purchase,” Allsopp says.

Rent a lifestyle

Still, more millennials tend to be active in the rental market. Godchaux says, “They are predominantly dominant in

the rental market and relatively limited in the sales market. The shoppers for affordable and mid-income homes

are young couples and families wanting to climb up the housing ladder to ownership.”

Godchaux says that some of the lifestyle elements available in some communities are accessible to renters.

“Places like Dubai Marina and JLT will remain a preferred option by expat millennials due to the lifestyle, amenities

and central location, although predominantly in the rental market.”

Source: Gulf News

Back to Index






SPECULATIVE BUYING IS RAISING ITS

PRESENCE AGAIN IN DUBAI Tuesday, February 06, 2018

The word “speculation” is again being raised in talk surrounding Dubai property sales.

Off-plan properties remain “favourable among investors, underlining the speculative nature of the local market,”

said Mat Green, Head of Research & Consulting UAE, CBRE Middle East. “Around 30,000 new units are anticipated

to complete this year and we expect to see increasing pressures for the off-plan sector and the wider market,

particularly with the recent introduction of VAT [value-added tax].”

Off-plan sales accounted for more than 65 per cent of total transactions last year, an increase of around 56 per

cent in the number of transactions and 44 per cent in terms of total value compared to 2016.

Residential sales prices, which started to go into decline during 2015, could also be in recovery mode. The rate of

decline for the fourth quarter of 2017 has “actually been negligible, at just 0.5 per cent from the last quarter”.

According to CBRE, over 90,000 new homes could enter the market during the period 2018 to 2020, of course

dependent on whether construction delays happen or not.

Source: Gulf News

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OMNIYAT AND DORCHESTER COLLECTION

TO COLLABORATE IN A NEW PROJECT Tuesday, February 06, 2018

Dubai based developer Omniyat and Dorchester Collection from London will collaborate in the development of a

5-star hotel and luxury residences on the banks of Dubai canal.

The project, to come up in the Marasi District, will be unveiled during an official event in March, the two

companies said in a statement on Tuesday without revealing details on the total investments and the deadline for

the completion of the project.

Dorchester Collection owns and operates properties in London, Paris, Milan, Rome and Los Angeles. This is the

first time the hospitality group will be entering the Asian markets.

Source: Gulf News

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DUBAI LAND DEPARTMENT IN NEW

STRATEGIC LINK-UP Sunday, February 04, 2018

The Dubai Land Department (DLD) has announced a new cooperation and strategic partnership agreement with

Medallion Associates LTD, a real estate consultancy firm, aimed at promoting Dubai’s real estate market.

The agreement was signed by Sultan Butti Bin Mejren, Director General of DLD, and Masood Al Awar, Chairman

and CEO of Medallion Associates.

According to a statement on Saturday, under the terms of the agreement, Medallion Associates will act as the

custodian of DLD’s international real estate promotion, helping the department to position Dubai as the world’s

premier investment destination for innovation, trust and happiness.

Medallion Associates will also promote attractive investment opportunities among multinational investors in

Dubai’s real estate market.

Source: Gulf News

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15.8 MILLION PEOPLE VISITED DUBAI IN

2017 Wednesday, February 07, 2018

A record-breaking number of international travellers flew into Dubai in 2017, further cementing the city’s position

as one of the leading tourist capitals in the world, a new report showed.

According to the latest data published by the Department of Tourism and Commerce Marketing (Dubai Tourism),

Dubai is nearing its 2020 tourism target as it welcomed a total of 15.79 million visitors last year, up by 6.2 per cent

over a year earlier.

South Asia emerged as the number one source of tourists for Dubai, with hordes of Indian visitors, amounting to

2.1 million, arriving in the emirate last year, up by 15 per cent from 12 months earlier.

This is partly due to Dubai Tourism’s ongoing collaboration with Bollywood superstar Shah Rukh Khan in the

multi-awarded #BeMyGuest campaign.

Dubai offers a lot of appeal to discerning travellers from around the world. The emirate is not only home to some

of the world's popular landmarks like the Burj Khalifa, it offers a host of activities for families and everyone else to

enjoy.

His Excellency Helal Saeed Almarri, director general of Dubai Tourism, said the 6.2 per cent growth in tourist

numbers has allowed Dubai to “ramp up the pace towards meeting” the 2020 tourism targets, which include

attracting 20 million visitors per year starting 2020.

“Today, Dubai’s travel and tourism sector is not only well positioned to offer a superlative destination experience

across its eight core strategic propositions, but also geared to accelerate its appeal to the diverse and evolving

needs of our global travellers,” he said.

Last year alone saw a number of developments that opened their doors to tourists, further “broadening Dubai’s

appeal to a wide spectrum of visitors.”

The city’s newest beachfront district, La Mer, opened to provide families with a new hotspot for dining, playing

and unwinding, while Etihad Museum was inaugurated. The year also saw the inauguration of La Perle in Habtoor

City, which is seen to boost Dubai’s entertainment scene.

Dubai’s major theme parks – IMG Worlds of Adventures and Dubai Parks and Resorts (DPR) had their first full year

of operations in 2017. Among the openings towards the end of the year were Dubai Frame and Dubai Safari, both

already proving to be popular and the former generating the most impressions ever seen on Dubai Tourism’s

Instagram page.

Saudi Arabia was the second-largest contributor of tourists to Dubai at 1.53 million. The kingdom remained the

highest driver of visitor traffic from within the Gulf Cooperation Council (GCC) region, although the overall

number of Saudi tourists posted a 7 per cent decline from a year earlier.

The United Kingdom was the third-largest source of tourists, delivering 1.27 million travellers – up by 2 per cent

over 2016.

Source: Gulf News

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DUBAI BROKER TO ABSORB VAT ON

COMMISSIONS Wednesday, February 07, 2018

One of Dubai's real estate brokerages has announced that it will absorb the newly implemented 5 per cent VAT on

the commission of all real estate deals done at a particular building City Walk for a limited period from February

15 to March 15.

Fäm Properties will cover the VAT costs on the commission of all units sold and leased in Building 18B in City

Walk. Additionally, fäm Properties will bear the costs of the 4 per cent Dubai Land Department registration fees

for Building 18B for the limited time period.

Firas Al Msaddi, CEO of fäm Properties, said: "While we have welcomed the introduction of VAT to real estate

transactions in the UAE in order to bring much needed transparency to the market, we understand that such

changes are often met with a phase of resistance. This initiative has been designed to help bridge the market's

acceptance of VAT and to help investors manage this phase smoothly.

"Our decision will offer major financial incentives to buyers who are considering investment opportunities at a

time when current conditions can yield strong medium to long-term gains."

Building 18B in City Walk is a six-storey residential and retail property, comprising one, two, three apartments and

a four bedroom penthouse, with retail space on the ground floor.


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DUBAILAND EMERGES AS DUBAI'S RENTAL

HOTSPOT Wednesday, February 07, 2018

For investors, it always helps to know where people are looking for property, either to buy or rent. This gives them

an understanding of where the hot commodities are and where there might be some room for negotiation.

Among apartments, Dubai Marina, Jumeirah Lakes Towers (JLT), Downtown, Business Bay and the Palm Jumeirah

were the most popular communities to rent (in terms of leads and listings), according to the Propertyfinder Group

in October 2017. Owing to infrastructure upgrades, other sought-after communities to rent in Dubai were

Jumeirah Village Circle (JVC), Silicon Oasis, Sports City and International City.

"Total leads are up 29 per cent year on year, with interest expressed in a property listing via SMS on a steady

uptick, more than doubling in the last six months," says Paul Spargo, commercial director of Propertyfinder

Group.

Dubailand apartments, the cheapest to rent in Dubai, saw a rapid increase in leads since November 2016 as the

area moved into a record-breaking year for handovers.

Another report on moving trends by ServiceMarket also put Dubailand in top position for moving in activity in

Dubai last year. This shows an increasing number of people now seem to prefer newly developed suburbs which

offer affordable rents. Silicon Oasis, JVC and Jumeirah Village Triangle also saw a lot of move-in activity by

residents. Dubai Marina and Downtown saw a lot of moving out activity due to relatively higher rents and more

traffic.

"The most likely explanation for why suburbs like Dubailand and Dubai Silicon Oasis are overtaking developed

areas in popularity is that residents have to face lower rents, there's less traffic and facilities like malls, schools

and theme parks are quickly emerging. What's more, freehold properties in these areas are available at much

lower prices," says Obed Suhail, senior writer, ServiceMarket.

One of the few communities with asking prices on the rise, Sports City has seen modest gains in interest,

dropping in popularity from 6 to 8.

One-bedroom apartments were the most popular among renters in Dubai and accounted for 36.5 per cent of

viewings.

In the apartment sales market, Dubai Marina is again the most sought-after, followed by JVC, Downtown, JLT and

Business Bay. Prospective home buyers did most viewings for 2-bed apartments at 34.7 per cent.

The Springs villas jumped to the most popular place to rent and the second most popular area to buy, as median

asking prices declined 6 per cent, according to Propertyfinder.

Other villa communities on the radar of tenants are the Arabian Ranches, Mirdif and Al Barsha. They were most

interested in 3-bed and 4-bed villas, as per Propertyfinder data.

Besides The Springs, other communities popular among home buyers were the Arabian Ranches, Reem and

Jumeirah Park. Among unit types, 3 and 4-bedroom villas were most in demand.


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DUBAI DEVELOPERS WARY ABOUT NEW

LAUNCHES Tuesday, February 06, 2018

The Dubai residential market witnessed solid growth in off-plan sales transactions during the last quarter of 2017.

According to a report by real estate consultancy CBRE, off-plan sales accounted for more than 65 per cent of total

sales transactions for 2017, an increase of approximately 56 per cent in the number of transactions and 44 per

cent in terms of total value, as compared to 2016.

"The sales market has witnessed an improvement in transaction numbers during 2017, with off-plan properties

remaining favourable among investors, underlining the speculative nature of the local market," said Mat Green,

head of research and consulting UAE, CBRE Middle East.

"Business Bay, Jumeirah Village Circle and Downtown Dubai continued to dominate the market, as all three

districts recorded more than 2,000 off-plan transactions for the year," commented Green.

"While off-plan residential transaction volumes registered strong momentum during 2017, competition is likely to

mount in 2018, with a huge number of new units set for delivery and with further project launches expected.

Around 30,000 new units are anticipated to complete this year and we expect to see increasing pressure for the

off-plan sector and the wider market, particularly with the recent introduction of VAT," he added.

In light of the continued slowdown in the residential market, caution among prospective developers and owners

is expected to heighten, and developers are likely to be more guarded in their development and sale decisions.

While residential sales prices entered into a period of decline during 2015, the rate of decline for Q4 2017 has

actually been negligible, at just 0.5 per cent from the last quarter.

According to the report, over 90,000 new homes (apartments and villas) could enter the market during the period

from 2018 to 2020, depending on construction delays.

"The market continues to see a shift in focus as developers seek to readdress the supply and demand gap in the

affordable housing sector. Government approval of the low-income housing policy in 2017 will create tangible

opportunities in this space and help to rebalance supply towards the demographics of the Emirate. Historically

high rents had driven a large number of Dubai's workforce to seek homes in other emirates and to then commute

to Dubai. This group presents a notable opportunity for Dubai's developers to attract back these residents,"

commented Green.


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2018: A BUSY YEAR AHEAD FOR DUBAI

CONTRACTORS Tuesday, February 06, 2018

2018 will see the most number of construction contracts awarded related to Expo 2020, reckons JLL, a real estate

consultancy.

The value of contracts directly related to Expo 2020 is $6.1 billion. "2018 will be a busy year for contractors who

have bagged Expo contracts as they will be in delivery mode. They can tap new opportunities in the sectors of

leisure, retail and hospitality. More than 25 million visitors are expected in Dubai during Expo 2020. Dubai has a

shortage of rooms at the lower end of the market. This demand must be tapped," suggests Alan Baker, head of

project management, JLL Dubai.

The Expo forms a small part of a much bigger project, Dubai South, reckons JLL. It accounts for only 5 per cent of

total land area in Dubai South.

"Infrastructure to support the Expo - such as extensions to Dubai World Central, Metro line and RTA road

improvements - are proving to be catalysts for growth. Outlying residential locations - such as Dubailand - are

gaining in popularity as a result of these infrastructure upgrades," Baker adds.

However, some private sector developers are already scaling down projects to more realistic levels, exercising

caution ahead of the legacy effect of Expo 2020.

China's rising clout

Chinese contractors have a big presence among the top 5 contractors in the UAE. They also provide construction

finance. The China State Construction and Engineering Corporation ranks as the second biggest contractor in the

UAE with projects worth of almost $3 million and 16 ongoing developments.

There was a 49 per cent increase in Chinese visitors to Dubai in 2017, with the country ranking as the No 4 source

market, estimates JLL.

"Chinese property buyers accounted for about 3 per cent of all sales in Dubai in 2017. They are taking a lot of

construction projects and bringing in financing. They are also bringing in their own people for these projects. As

those people tend to get familiar with Dubai, they will want to buy homes for themselves. This trend is bound to

grow," elaborates Craig Plumb, head of research at JLL Mena.

Market conditions

Residential rents in Dubai will see further softening this year as the market is close to bottoming out, says Plumb.

Property buyers need to watch out for a potential oversupply as well as 'overgenerous' payment plans, he warns.

"The source of residential demand will be population growth and developers encouraging tenants to turn into

property owners," observes Plumb. Abu Dhabi, meanwhile, typically lags Dubai by 12 to 18 months in its cycle.

Rents there have more room to fall before bottoming out, the consultancy reckons.

VAT effect

The introduction of value-added tax (VAT) has not had a "market-moving" impact on the UAE property market. "It

is more of a disruption than anything else. Since the market is soft, owners [commercial and retail] will have to

absorb the increase in VAT costs and cannot pass it on to tenants," Plumb adds.






VAT has no impact on UAE land values and residential rents, limited impact on construction costs, residential

sales, commercial rents, commercial sales and the hotel sector and a significant impact on the retail sector.

"We saw a lot of activity in December because clients brought ahead a lot of transactions to avoid paying VAT.

January has been relatively quiet. VAT has an impact on a company's cash flow. You have to pay VAT before you

can reclaim it. It remains to be seen how quickly merchants can reclaim VAT," informs Plumb.

JLL estimates VAT to have a one-off inflationary impact of 2 per cent in the UAE in 2018.

"Developers can recover VAT costs incurred during construction on a quarterly basis. VAT incurred on operating

expenses cannot be charged back to tenants during first three years after completion. Since bare land is VAT

exempt, developers cannot recover VAT for legal fees, etc.," clarifies Mireille Azzam, national director, JLL Mena.

Investment trends

UAE real estate is seeing increasing interest from institutional investors - asset managers, real estate investment

trusts, pension funds and insurance companies.

"They are chasing yields in logistics, healthcare, education and staff accommodation. We expect to see much

more transactions in that space. We expect little change in yields despite the three to four likely rate hikes in the

US. This is because of the lack of quality assets in the UAE," says Gaurav Shivpuri, head of investment

transactions, JLL Mena.

Middle East investors are also looking for alternative asset classes globally in the quest for yields (data centres,

logistics, etc.). While the UK, US and the West have typically grabbed the lion's share of funds invested outside the

Middle East, the investor focus is now shifting to Africa, Latin America and Eastern Europe.


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DUBAI RANKS 7TH LARGEST FOREIGN

INVESTMENT DESTINATION CITY IN THE

WORLD Wednesday, February 07, 2018

Dubai has attracted AED25.5 billion in foreign direct investments in 2016, making it the seventh highest recipient

city of Foreign Direct Investment, FDI, in the world, according to a report by the Dubai Government. These results

are expected to inspire other cities seeking greater FDI at the forthcoming Annual Investment Meeting, AIM, to be

held at the Dubai World Trade Centre from 9th-11th April 2018.

Total FDI into Dubai stood at AED270.8 billion between 2011 and 2015 and in 2016, the emirate ranked 7th among

the leading cities of the world attracting AED25.5 billion in FDI. As an open economy, Dubai is affected by global

trends but FDI receipts are expected to recover in 2017-2018, a report by Dubai Economy, said recently.

The number of active businesses in Dubai increased to 148,842 in 2017, including 19,877 new trade licenses

issued in 2017, according to the Dubai Economy, the trade licensing body of Dubai Government. Renewal of

licenses accounted for 128,965 transactions in 2017 while there were also 26,029 Initial Approval transactions and

38,223 Trade Name Reservations. Auto Renewals constituted 47,125 transactions, Instant Licenses 684, and e-

Trader licenses 616.

Dawood Al Shezawi, Chief Executive Officer of AIM Organising Committee, said, "Dubai remains a shining example

of what a city could achieve through economic vision and by attracting foreign investment. Guided by a strong

leadership, the public and private sectors worked hand in hand to deliver the best return on investment in key

sectors – trade, tourism, real estate and retail sectors – that continues to draw a large pool of foreign capital that

is helping creating employment and business opportunities for all stakeholders.

"As we inch closer to the forthcoming AIM hosted by Dubai, more and more public policymakers and international

investors will take notice of Dubai’s business model and its success stories to help build other economies.

"In this way, Dubai inspires the rest of the world’s cities and metropolises to attract greater foreign investment."

Dubai Government expects its AED376.8 billion, or US$102.67 billion, economy to grow at 3.5 percent in 2018.

In terms of openness, Dubai ranks third in the world after Luxembourg and Hong Kong, with a high degree of

dependence on foreign trade for income. Dubai's openness ratio was 321 percent in 2016, meaning that trade

flows were more than three times higher than the net value added in the economy.

Diversification and a relatively high degree of openness in Dubai along with the positive impact of global trends

will boost economic growth in the emirate in 2018 and beyond, according to the Dubai Economic Outlook report.

Dubai will achieve 3.5 percent growth in 2018, also drawing on the continued recovery in global trade and the

highest growth rates in most developed economies.

Among the new licenses issued in 2017, business women owned 12 percent of the new businesses. The top

nationalities among the new license holders were Indians, Pakistanis, and Egyptians, followed by Saudis, Britons

and GCC nationals. Saudis ranked second in terms of market share, followed by Omanis, Kuwaitis and finally

Bahrainis in that order.






"This reflects the wider mix of global investor base investing in Dubai, which is a great example how the emirate

appeals to wider nationality," Al Shezawi added. "Dubai’s attractiveness in drawing foreign investment will remain

a key subject of discussions at various levels amongst more than 19,000 delegates and visitors."

Among the new licenses issued in 2017, more than 64.3 percent were Commercial, 33.8 percent Professional, 1.1

percent Industrial and 0.9 percent belong to the Tourism sector. The outsourced service centres of Dubai

Economy played a major role in service delivery accounting for almost 80 percent of all the business registration

or 231,902 of the total transactions in 2017.

The total value of Dubai's trade in non-oil goods was AED1.28 trillion, US$348.77 billion, in 2016. Dubai’s imports

are much more than its total exports as most imports are transported to other emirates and to neighbouring

countries without them being registered as re-exports.

Source: Emirates 24/7

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DUBAI HOLDING APPOINTS NEW CEO TO

RUN $35BN FIRM Monday, February 05, 2018

Dubai Holding appointed Amit Kaushal as chief executive officer, replacing Edris Alrafi who left the investment

firm owned by the emirate’s ruler after less than a year.

Kaushal was previously chief financial officer at the conglomerate that manages about $35 billion of assets,

according to an emailed statement. The statement didn’t provide a reason for Alrafi’s departure.

Kaushal previously worked at Goldman Sachs, UBS Group AG and Deutsche Bank AG in London and Dubai,

according to information on Dubai Holding website. It’s not clear who will replace Kaushal as CFO.

Dubai Holding, which owns Dubai Properties Group and hotel operator Jumeirah Group, is one of three main

state holding companies in the emirate, according to information on its website.

During the boom years, government entities amassed overseas assets such as luxury retailer Barneys New York

and US hotel and casino group MGM Resorts International. Many assets were then sold during the 2008-2009

financial crisis.

Alrafi was appointed as CEO of Dubai Holding in April last year, replacing Fadel Al Ali. He joined as Dubai Holding

as it focused on a new organizational structure and debt management program, according to a statement at the

time.

The news following the announcement earlier today that Dubai Properties group CEO Abdullah Lahej resigned

from his position at the property development and management company, and will be replaced by Raed Al

Nuaimi from North25.


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WORLD'S NEXT TALLEST HOTEL SET TO

OPEN IN DUBAI Saturday, February 10, 2018

Shaikh Zayed Road will continue to host the “world’s tallest hotel”, with the opening this week of the Gevora built

by the Al Attar Group.

The 75-floor structure stands at a height of 356 metres (1,167.98 feet) and has 528 rooms. It is located right near

the DIFC cluster and with the Emirates Towers as neighbours.

Gevora and the Al Attar Group hope to take over the world’s tallest hotel mantle from the JW Marriott Marquis

Hotel just down Shaikh Zayed Road, which soars to 1,165 feet. The property opened in 2012 and has 1,608 rooms.

Dubai has two other entrants in the tallest hotel stakes, in Rose Rayhann, which stands tall at 1,093 feetk and the

Burj Al Arab, at 1,053 feet.

The Al Attar Group has multiple high-rise interests along Shaikh Zayed Road.

Most of the other hotels in the tall rankings are dominated by Chinese developers and their flagship hotel

projects.

Gevora’s opening on February 12 will allow for a better balance to be struck between Dubai and China in hosting

these eye-catching landmarks.

The Al Attar Group has multiple high-rise interests along Shaikh Zayed Road; in fact it was among the handful of

developers who moved in with projects just as the location on either side was coming into prominence in the

early 2000’s.

Shaikh Zayed Road shot into prime time prominence with the Emirates Towers, which opened in April of 2000.

Prior to that there were just the towers on the opposite side of the Road and near the Crowne Plaza.

Then the freehold boom started in Dubai in earnest and the Burj Khalifa and the many signature towers within

the DIFC cluster came into being. And later on there was Business Bay and its line-up of Executive Towers.

Now that the Gevora is all set to open its doors, what next for Dubai's Shaikh Zayed Road? Is there space left for

new builds on what is already an area with the highest concentration of high-rises?

There could well be new possibilities taking shape, with the Dh5 billion Emirates Towers Business Park as a

possible destination. And further down the Road, there will be two “super-tall” structures forming part of “Uptown

Dubai”, which will be built by the Jumeirah Lake Towers developer DMCC.

Source: Gulf News

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EMAAR PROPERTIES MADE $1.8B IN 2017,

WORRIED ON 2019 Thursday, February 08, 2018

Emaar Properties made $1.8 billion (Dh6.61 billion) in profit and close to $5 billion in sales in 2017, the chairman

of Dubai’s largest listed developer said ahead of its full year results.

The developer of the Burj Khalifa, the world’s tallest tower, made $1.43 billion in 2016 and reported $3.92 billion

in Dubai property sales.

“We’ve been growing about 20 to 25 per cent on an annual basis,” Chairman Mohammad Alabbar said late on

Wednesday at a conference in Abu Dhabi.

Emaar, in which the Dubai government owns a minority stake, reported double digit quarterly sales growth in

each of the first three quarters of 2017.

Alabbar said that a lot of infrastructure was still required in markets Emaar is operating in, including Saudi Arabia,

the United Arab Emirates, Turkey, and Egypt, and that he was looking at the market positively.

However, he also said that he was worried about 2019.

“We had a good time for too long,” Alabbar said, without elaborating.

Source: Gulf News

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SOBHA NAMES PARTNER AWARDS’

WINNERS Friday, February 09, 2018

Sobha Group announced the winners for the Annual Sobha Channel Partner Awards 2018 on February 6 in Dubai.

As many as 600 channel partners gathered at the Four Seasons Hotel, Jumeirah, for the annual awards.

Accolades were awarded in 6 categories - platinum, gold, silver, bronze, top channel partner 2017 and top

international channel partner 2017, respectively.

The recipients for the awards are registered channel partners for the Sobha Hartland project in Dubai. The 23

awards were given by Jyotsna Hegde, president of Sobha Group, and Francis Alfred, CEO of Sobha Group. The

main criteria for selection was on the volume of sales achieved for the year 2017.

The winners of the different award categories include established names in the real estate fraternity and are the

following:

Top International Channel Partner - 2017: Big Pockets Commercial Brokers.

Top Channel Partner - 2017: Morka Real Estate.

Platinum Partner: The Noble House Real Estate Broker.

Gold Partner: Sky Bay Real Estate Broker, Maher Al Hindi Real Estate Broker, Blooming Bird Real Estate, Lemar

Property LLC and Synergy Properties.

Silver Partner: Provident Real Estate Broker, Aston Pearl Real Estate Broker, Better Homes LLC, Zooma Properties

Est, Clarke And Scott Real Estate Broker, Vanguard Real Estate Brokers and Livinstyle Reality.

Bronze Partner: Property Junction International Real Estate Broker, Mega Homes Real Estate Brokers, Tarkan Real

Estate Brokers, Fortune Homes Real Estate Brokerage, Silver Sea Properties, Ray White International Real Estate

Broker, Crystal Bright Real Estate LLC and St Clair Real Estate Broker.

Jyotsna Hegde said: "Sobha Group's journey over the past year has been nothing short of incredible. Tonight's

special awards ceremony is a platform for all our valued partners who have been an integral part of our incredible

journey. Sobha Group's vision is to be the most trusted and respected real estate organisation in the GCC and to

continue to transform the way people perceive quality by pioneering innovative projects and exceeding

customers' expectations across core markets. Our success and celebrations would be incomplete without our

partners and their continued support for our flagship project Sobha Hartland in MBR city, Dubai."


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SELECTIVE OFF-PLAN SALES GAINS IN ABU

DHABI Wednesday, February 07, 2018

A relative Improvement in off-plan sales provided a sliver of hope for Abu Dhabi’s property market.

Saadiyat Island recorded an increase in apartment sales prices for a “second consecutive quarter, at 5 per cent,

fuelled in part by the inauguration of the Louvre Abu Dhabi, states an update from the realty consultancy

Chestertons. Prices inched up from Dh1,362 per square foot to Dh1,430.

In fact, right through the fourth quarter of 2017, off-plan sales trended higher with developers rolling out

incentives. But the secondary market had to put up with a 2 per cent decline in apartment sales prices and 1 per

cent decline on villa prices.

“We saw the effects of a number economic factors, including low oil prices, reduced government spending,

increased stock in the secondary market, a rising cost-of-living and redundancies,” said Ivana Gazivoda Vucinic,

Head of Consulting and Research.

The rental market felt the pinch as well, leading to a decline in rates of 2 per cent and 1 per cent for apartments

and villas, respectively, during the fourth quarter.

“Shrinking company housing allowances and excess rental supply exerted downward pressure on rental prices in

the emirate,” said Vucinic. “Vacancies in some locations, such Al Raha Beach, surged over the quarter as residents

downsized their accommodation or moved to more affordable communities.“ But tenants looking to downsize

also set off upward rental pressure on smaller units, with rates for one-bedroom units in Al Khalidiya rising 7 per

cent and in contrast to what was happening in the rest of the market and locations.

Source: Gulf News

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SUPPLY, REDUCED ALLOWANCES WEIGH

ON ABU DHABI RENTS, PRICES Wednesday, February 07, 2018

Off-plan sales are driving the Abu Dhabi housing market as the emirate continues to feel the pinch of reduced

government spending and sluggish economic growth, according to Chestertons Mena.

In Q4 2017, off-plan sales activity remained high as developers rolled out a number of incentives to attract buyers.

However, the secondary market witnessed a 2 per cent decline in apartment sales prices and 1 per cent decline in

villa sales prices. GCC and Arab nationals dominated both markets.

Ivana Gazivoda Vucinic, head of consulting and research at Chestertons Mena, said: "Throughout 2017, we saw

the effects of a number of economic factors, including low oil prices, reduced government spending, increased

stock in the secondary market, a rising cost of living and redundancies."

Sales prices, on average, decreased by 2 per cent for apartments during Q4 2017, with some markets

experiencing a more pronounced decline, such as Reem Island (5 per cent).

Conversely, Saadiyat Island registered the highest increase in apartment sales prices for the second consecutive

quarter, at 5 per cent, fuelled in part by the inauguration of the Louvre Abu Dhabi. On average, prices increased

from Dh1,362 per sqft to Dh1,430 per sqft in Saadiyat Island, compared to Reem Island which declined from

Dh1,242 per sqft to Dh1,184 per sqft.

Average villa sales prices fell by 1 per cent in Q4, with the Al Raha Beach area falling more than 4 per cent from

Dh1,348 per sqft to Dh1,282 per sqft; while Khalifa City, in contrast, registered an increase of almost 6 per cent,

with prices up from Dh852 per sqft to Dh895 per sqft. There was an overall decline in rents of 2 per cent and 1

per cent for apartments and villas respectively.

Vucinic added: "Shrinking company housing allowances and excess rental supply exerted downward pressure on

rents. Vacancies in some locations, such Al Raha Beach, surged over the quarter as residents downsized their

accommodation or moved to more affordable communities."

Downsizing did, however, bring some positive news for investors, as rents for one-bedroom apartments in Al

Khalidiya rose by 7 per cent bucking the wider market trend. In the villa market, Al Reef and Reem Island emerged

as preferred locations. For example, a three-bedroom villa in Al Reef could be rented for Dh120,000 pa and on

preferential leasing terms. Saadiyat Island was the best performing area in the apartment segment and Khalifa

City in the villa segment. Mohammed Bin Zayed City registered the highest increase in villa rents at almost 2 per

cent.

Vucinic added: "There is a likelihood of positive economic sentiment emerging from Adnoc's recent

announcement to invest $109 billion in growth strategies. This plan could be the turning point for Abu Dhabi's

real estate sector as it could generate new jobs and therefore renewed demand for residential property."

The supply of new apartment and villa units peaked at around 1,500 and 250 respectively. In addition,

announcements were made about Al Riyadh City, reserved solely for UAE nationals and the 18-hectare waterfront

development, Pixel Towers, which will contribute 480 residential units, expected to come to the market in 2018.


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SHARJAH’S DH24B DEVELOPMENT STICKS

TO TIGHT CONSTRUCTION PLANS Wednesday, February 07, 2018

The developer behind what is to be Sharjah’s biggest private sector development — at Dh24 billion it sure is

massive — does not believe in waiting around to reach project milestones. The plan is to have the first residents

move into “Aljada” by the end of next year.

What makes the target interesting in itself is that the main contractor for the first phase of residential works is to

be announced and work to begin by March. The CEO at Arada, Ahmad Al Khoshaibi, is not unduly fazed by the

tight project timelines it has set for itself.

“One of the issues we find in the region is that developers promise a lot,” said Alkhoshaibi. “Our guidelines are

straightforward — if we show something in our marketing brochures, we need to deliver give it to the buyers. We

don’t want situations where the renderings show something and then when it is finished, the feature is not

included or lacks in quality. A lot of people complain about going to communities and find the features such as

swimming pools have not been built. ... That’s not going to happen at Aljada.” - Ahmad Al Khoshaibi, CEO at Arada

“Most construction delays are related to cash flow problems at the developers. If the bureaucratic delays are

eliminated, any developer can make the payments on time.

“We speak to the contractors and 70 per cent say they can deliver to our schedules, which is to finish the whole

development in seven to eight years. A lot of contractors are as yet not being utilised to a very high percentage.”

Aljada takes up what has been billed as the last untouched piece of land — 2.2 million square metres — in the

centre of the emirate, with landmarks such as the SAIF Zone, the American University and the airport as its

immediate neighbours.

So far, the developer has had a couple of sales releases and seen buyers pick up about 750 units. Phase 1 will

have 1,000 apartments, with prices at Dh750 a square foot.

“There will definitely be an increase in prices for further phases,” the CEO said. “A developer can discount the

initial phases and then add in subsequent ones. That’s also a way to reward the early buyers.

“Our cost to build will be higher than the usual product you find in Sharjah and that’s because the open spaces,

the greenery and all the other features add to the costs” (Aljada on completion will sport quite a bit of green, with

the master plan showing a 2.2 kilometre stretch of parkland right at the residents’ doorsteps.) Another thing the

developer does not want to see happen is that Aljada remains one giant construction site even when the first

residents have moved in. “The first phases should not be made to feel the effect of subsequent phases,” said

Alkhoshaibi. “This is a main issue in the UAE.

“A lot of people complain about going to communities and find the features such as swimming pools have not

been built. And that it’s put off until the final phase. That’s not going to happen at Aljada.”

Given the scale of the project, it will be quite a balancing act that the developer and its contractors need to carry

out. Aljada is much more than a cluster of low-rise apartment buildings around a park. For one, there is the

Central Hub, part of the first phase of development and which will feature multiple entertainment attractions, F&B

and more. The cost to build this component alone could be about Dh1 billion.






There are going to be at least four hotels, two being five-star, that Arada will build and have operators manage

them. The master plan has also marked out locations for schools, and retail areas along 2.2 kilometres each

stretch either side. (Arada has filed offers of Dh1 billion to sell off the retail component, but the company said that

it keep holding it.) A further element will be a ‘commercial business park’, of 500,000 square metres and which is

yet to formally launched. Two of the planned hotels will be in this cluster.

“We aim for Aljada to be a transformational project from every aspect,” the CEO added. “If anything, the sheer

scale of it would pivot Arada onto bigger opportunities — and not just in Sharjah. Our objective — and it’s being

hammered into us constantly by our shareholders — is to over deliver. In fact, we under promise and over

deliver.”

Source: Gulf News

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FUJAIRAH: TINY EMIRATE’S BIG STRIDES IN

REAL ESTATE Wednesday, February 07, 2018

One emirate that is quietly making a strong pitch to attract tourists and real estate developments is Fujairah.

Located completely on the eastern coast of the UAE along the Gulf of Oman, the fifth-largest emirate has

relatively moderate climate than Dubai and Abu Dhabi, best suited for mountain and beach-loving travellers.

The emirate’s economy has long been driven by its traditional fishing and agriculture sectors, thanks to ample

rainwater from the Hajjar mountains. However, the other local industries that also flourished over the years due

to construction boom in other emirates are mining and stone crushing.

Fujairah expects its population of around 235,000 to exceed half a million by 2040. Keeping the population and

tourism growth in mind, the government is building around 8,800 homes and 1,500 hotel rooms over the next five

years. Despite being a small emirate, Fujairah has managed a GDP of over Dh15.43 billion in 2016, according to

data released by the Fujairah Statistics Centre.

Fujairah 2040 Plan

With the launch of Fujairah 2040 Plan in 2015, the emirate is expected to receive a major infrastructure and public

service boost in terms of building new roadways, residential complexes, besides upgrading the seaport and

airport facilities. The local government has already started spending Dh1.5 billion to improve road networks and

build water barriers, ports and residential complexes and health care facilities.

The municipalities of Fujairah and Dibba have collectively issued around 2,600 building permits in 2016. The

Ministry of Infrastructure and Development alone had implemented new projects worth of over Dh38 million in

2016.

The ambitious development plan would also include enhancing Fujairah seaport’s capacity by adding new

terminals for oil, marine services, dry bulk and containers with an anchorage area. Whereas, Fujairah’s only

international airport that handled 9,690 aircraft movement and 33,600 passenger movement in 2016 will go

through major expansion by increasing the runway and apron area.

Real estate, tourism

Fujairah is witnessing many tourism-linked real estate developments, including hotels and villas in the city. Abu

Dhabi-based Eagle Hills was first to start residential development with direct access to the Fujairah beach. The

development is an eight-minute drive from the airport and 25 minutes from the border of Oman. Eagle Hills

Fujairah Beach is mixed-use with a gated residential community comprising 84 two-, three- and four-bedroom

villas and town houses.

Eagle Hills is further enhancing its presence by building two five-star hotels in a bid to attract more tourists and

investment into the northern emirates. In 2016, the company announced its first property, Address Fujairah

Resort and Spa, which will be located in Sharm in Fujairah. The project will have the Address Hotel with a range of

five-star amenities and four residential buildings that include 170 branded apartments, five beach villas and five

garden villas. The company earlier this year signed a Dh300-million facility with the National Bank of Fujairah to

finance the construction of the resort. This follows its second property, Palace Fujairah Beach, which is a premium

luxury hotel to be managed by Address Hotels and Resorts. The project will feature 162 rooms and suites and will

be set on a prime piece of coastline on the gulf.






“Catering to both tourists and investors, the upcoming Eagle Hills Fujairah Beach project will offer a mixed-use

development, including a world-class beach and gated residential community, which will undoubtedly add further

appeal to the area,” says Khaleed Zaki, general manager of Millennium Hotel Fujairah, which opened its first

property in 2015.

With 220 guest rooms and suites, Millennium Hotel is directly connected to Fujairah Mall, and the operator is

planning to expand its operations by introducing a ballroom with a capacity of 500 people. “Fujairah is seeing a

steady increase in visitor numbers and over the past few years there had been some major development projects

implemented by the government that have helped put Fujairah on the map as a business and leisure hub. Since

the Fujairah Plan 2040 launched in 2015, there has also been a focus on extending the base of industrial,

commercial and agriculture production,” says Zaki.

Dubai Investments, which initially announced Dh400 million in real estate projects in March 2008 that were

subsequently suspended following the downturn, also announced that it is restarting the development of Fujairah

Business Park and The Market.

Tourism, for sure, is one of the fastest-growing sectors in Fujairah, as the emirate distinguishes itself with its

rugged mountains, valleys, waterfalls, oases and wide sandy beaches.

The emirate has 21 hotels properties and 3,200 rooms. In 2016, it welcomed around 764,000 guests. The number

of hotels is expected to grow rapidly with many new properties announcing projects. InterContinental Hotels

Group (IHG), for instance, recently announced the opening of its first resort in the Middle East in Fujairah. The

property will have 190 guest rooms and suites, including 44 club rooms and 38 suites.

With its many unique attributes, such as the beaches, diverse coral reefs, a predominantly mountainous

landscape and the oldest mosque in the UAE, Zaki says Fujairah continues to be a promising market, “with great

potential to rival the other more established emirates when it comes to domestic and international tourism”.

Overall, Fujairah still offers less choices when it comes to resort hotels compared with other emirates. “In order to

attract a wider market and to further entice holiday makers to explore the region’s many unique selling points,

Fujairah is likely to see an increase in luxury resorts openings in the next few years,” says Zaki.

David Prince, area vice-president of Rotana, says Fujairah tops the list of the hotel operator’s best-performing

markets in the Middle East. The company, which currently has two properties in the emirate, Fujairah Rotana

Resort and Spa and Nour Arjaan by Rotana, claims to have registered strong performance in terms of revenue

and occupancy. “Fujairah’s hospitality sector has been flourishing in recent years on the back of a booming

tourism scene,” says Prince. “There has been a marked increase in regional and international tourist arrivals to the

emirate following the local government’s launch of a number of initiatives to promote the destination over the

past few years.”

Prince points out that the tourism sector has been identified as a core pillar of the economic diversification policy

of the UAE, as its contribution represents a significant share of the country’s revenues. “As a result, various local

and federal authorities have been exerting substantial efforts to strengthen the sector and enhance the offerings

of different tourist attractions around the country,” he says. In addition to its adventure and nature offerings, the

emirate is also home to internationally recognised historic sites, including Al-Heil Castle, the Old Fort and Al Bidya

mosque, which is the oldest known mosque in the UAE. An attractive cultural offering together with a tourist-

friendly geography presents an incredible opportunity for a major tourism boom and an uptick in tourist

footfall.While there is already progress in the hospitality sector, Prince expects mid-range to affordable properties

to help attract more tourists in the future.

Port expansion

Its strategic location and access to the Indian Ocean give Fujairah easy access to major global shipping routes.

With its multipurpose port, Fujairah is already home to the world’s largest livestock shipping companies. The






Fujairah Free Zone, which is located in the Port of Fujairah, offers opportunities to foreign investors looking to

invest in banking and trade.

The Port of Fujairah is expected to go through a major expansion with a recent Dh500-million agreement signed

with the Abu Dhabi Ports Company (ADPC), which will develop the port infrastructure, including the deepening of

berths to a draft of 16.5m and the establishment of a 1,000m quay and a 300,000-sq-m storage yard to

accommodate the expected growth in cargo traffic.

“Fujairah Port is one of the key economic, commercial and logistics hubs not only in the emirate but in the entire

nation on account of its important strategic location overlooking the Pacific Ocean at the crossroads of shipping

lines between East and West,” Dr. Sultan Bin Ahmad Sultan Al Jaber, Minister of State and chairman of ADPC, told

WAM news agency.

ADPC, which recently signed a 35-year concession agreement with the Port of Fujairah, has exclusive rights to

develop port infrastructure and manage its operations. “The government’s strategic partnership with Abu Dhabi

Ports will help enhance the existing infrastructure and efficiency of operations at the port, which lies on the UAE’s

east coast,” says Prince. “Also, the launch of the country’s first very large crude carrier [VLCC] jetty last year with

an investment of Dh650 million is expected to put Fujairah on the global map.”

Fujairah government has also signed a partnership agreement with Minpoint Business Investments and Niras

International Consultancy to begin construction of a Smart Logistics City. The first phase of construction is slated

to start by year end.

In addition, the emirate has also been making efforts to strengthen its private sector with an emphasis on small

and medium enterprises. Fujairah had around 237 manufacturing units employing 11,000 workers in 2016. In the

same year, the government issued 11,820 new and renewed business licences to expand its private sector.

“The upsurge in new economic initiatives will attract new investments and investors alike, bringing positive strides

to the emirate’s tourism and hospitality sector,” says Prince.

Source: Gulf News

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INNOVATION EVENTS KICK OFF IN

NORTHERN EMIRATES Thursday, February 08, 2018

A week of events kicked off in Fujairah and Ras Al Khaimah on Thursday to mark UAE Innovation Month.

Six activities will be held across Fujairah on Thursday and Wednesday as part of the country-wide initiative. More

than 20 government and federal entities are taking part.

In the city, residents and visitors can meet with young inventors, learn about idea generation and take part in

interactive workshops at Fujairah Fort on Thursday and Friday.

Fifteen inventors will give presentations on Al Faqit beach in Dibba about their creations and share lessons learnt

from their experiences.

Fujairah Mall, in collaboration with Fujairah Scientific Club, will host various activities and display products

developed by local inventors to serve as inspiration for the country's future innovators.

In Ras Al Khaimah, 60 start-ups from 12 countries will gather at Al Marjan Island to take part in the UAE’s first

Seaside Startup Summit which will be held from Thursday to Monday.

The five-day summit, held in a majlis tent by the sea, will focus on connecting people and help start-ups broaden

their outlook.

The Startup Summit concept was adopted in Armenia years ago in response to ineffective gatherings by

innovators and entrepreneurs. The summit in RAK is organised by the Startup Armenia Foundation and Ras Al

Khaimah’s Incubation and Accelerator unit. It is held under the patronage of Sheikh Saud bin Saqr Al Qasimi, Ruler

of Ras Al Khaimah, who is also expected to attend.

More than 1,500 people from across the world are expected to attend.

“The RAK Seaside Summit aims to provide entrepreneurs with an opportunity to demonstrate innovative business

solutions, provide an opportunity to communicate with decision-makers and social networking sites, as well as

compete for the opportunity to win funding,” said Dr Abdul Rahman Al Naqbi, director general of the Department

of Economic Development (DED).

The start-ups will be competing to win $50,000 in funding by taking part in "brand battles".

Also in RAK, the public works department has organised a series of laboratories and workshops on innovation at

Saqr Park in RAK on Thursday and Friday.

Innovation Week will run until next Wednesday in Fujairah and RAK before moving on to Sharjah.


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EAGLE HILLS AWARDS FUJAIRAH PROJECT

CONTRACT Wednesday, February 07, 2018

Eagle Hills Abu Dhabi has awarded the construction and infrastructure works contract for its Fujairah Beach

development to Ghantoot Transport & General Contracting.

Ghantoot will be responsible for the development of the 38,258 sqm site, which includes the 167-key Palace Hotel,

80 luxury villas and the associated infrastructure.

Low Ping, CEO of Eagle Hills, said: "This milestone brings us a step closer to delivering this development to

Fujairah. Fujairah Beach offers a unique investment opportunity to buyers as it is situated on the beach and

within the city, and we have already witnessed a huge level of demand coming from investors. The project is on

track for its 2019 completion."

Fujairah Beach and will be the first residential development in Fujairah with direct access to the beach. The mixed-

use development will feature a gated residential community, comprising 80 villas and townhouses available in

two, three and four-bedroom layouts.

In addition to the UAE, Eagle Hills is developing projects in four international markets, namely Morocco, Bahrain,

Jordan and Serbia.

In the UAE, Eagle Hills is working closely with the Fujairah and Dibba Fujairah Municipalities on two projects,

namely Fujairah Beach and The Address Fujairah Resort + Spa.


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PROPERTY GEMS OF SOUTHEAST ASIA Monday, February 05, 2018

The diversity of Southeast Asia and a more tolerant culture have made the region an attractive destination for

property buyers. From a rich, well-organised country such as Singapore to a more chaotic but endearing nation

like Thailand, from Vietnam with its newly adapted go-getting attitude to a more laid-back atmosphere in

Malaysia, there is a lot to choose from.

Generally, the investment activity across Southeast Asia’s real estate landscape remains strong, owing to a

number of factors. Two decades after the Asian economy crisis, the regional economies have stabilised and some

are now among the fastest-growing worldwide, namely Vietnam, the Philippines and Cambodia. This naturally

makes a good foundation for an advancing property market that attracts large amounts of foreign investment.

Vietnam is probably the best example. As the formerly secluded country eases its property ownership regulations,

opportunities abound. Thailand and Malaysia are also at the forefront of this development. Most of the real

estate activity in the region is focused on urban centres, with Bangkok and Kuala Lumpur standing in the

limelight, and Manila, Jakarta and Phnom Penh catching up and benefiting from a steady influx of foreign buyers

in the recent past, many of them from China. Another push comes with the improvement in infrastructure and

urban transport in major Southeast Asian cities where railway and underground systems are under development

or expansion.

Besides that, more and more upscale resort developments at popular or upcoming tourism destinations are

being developed across the region, some of which are highly attractive for investors who might also want to use

them as a part-time holiday residence.

That said, buyers who are looking for affordable homes will still be able to find them in the region — with the

exemption of Singapore even though the city state’s property market is in a cool-down phase — for as low as

around $150,000 (Dh550,875) for a premium two-bedroom condo as long as it is not in the heart of a central

business district. On the other hand, luxury residential developments are still rare as the market for high-end real

estate is developing rather slowly; resort mansions or beach villas can turn out to be quite costly in particular.

PW takes a look at what’s on the cards in the high-end property market in Southeast Asia.

Thailand

The country’s capital Bangkok had not been in the centre of attention of luxury property buyers until the

development of MahaNakhon, the city’s tallest and most expensive residential tower, which interestingly attracted

a lot of investment from the Middle East, particular from Dubai. This tower officially opened in August under

much fanfare and is sold out. But there are other upscale developments in Thailand that provide opportunities

for either urban or resort leisure living.

One Bangkok is a $3.5-billion property development in central Bangkok by beverage mogul Charoen

Sirivadhanabhakdi, the largest investment in one such endeavour in the city by a private company. It will include

offices, residences and retail. The first stage of the 1.83-million-sq-m project is expected to open in 2021, with the

full completion in 2025. One Bangkok will comprise five grade A office towers, five luxury and lifestyle hotels,

three ultra-luxury residential towers and retail outlets.

MahaSamutr is a country club in Hua Hin, the summer retreat of the royal family south of Bangkok, with luxury

villas currently under construction, built around Asia’s first and largest crystal lagoon — created by the same

company working on the lagoon and man-made beach in Mohammad Bin Rashid Al Maktoum City’s District One.

MahaSamutr, developed by Pace Development, the same company that built MahaNakhon, will feature 90 villas,






each covering between 550 sq m and 600 sq m on a large plot with prices starting from around $1 million. Sales

kicked off in 2015, and there are still villas available.

Anantara Layan Phuket Residences is the latest addition to Thailand’s super-luxury residences. It is a private

estate of 15 huge pool residences overlooking the Anantara Layan Phuket Resort and surrounded by tropical

forest on Phuket’s west coast. The residences are developed by Minor International, the brand owner of the

Anantara hotel and resort chain. The project features three- to seven-bedroom units, each with exorbitant sizes

ranging from 1,700-3,600 sq m, while the development also has shared pavilions for dining, living, fitness,

entertainment and work. Each residence also boasts a large 21m-long infinity swimming pool overlooking the

Andaman Sea.

Malaysia

Medini — Iskandar Malaysia is the flagship urban township project within Iskandar Malaysia, an economic zone

development in Malaysia’s southern state of Johor and directly neighbouring Singapore. Medini spans over 9.3 sq

km and is planned for a population of 450,000 by 2030, which makes it Malaysia’s largest single urban

development to date, planned to become the smart and connected central business district of Iskandar. There are

quite a number of residential projects, including condominium buildings, mixed-use towers, hotel residences and

villas. The more exclusive developments are the garden estates of Sunway Iskandar and the three-tower Meridin

Suites Residences. Signature developments include Mall of Medini and the theme park Legoland Malaysia Resort.

Four Seasons Place Residences, among the current few top-end residential developments in Kuala Lumpur, is

right next to the iconic Petronas Twin Towers and nearly as tall with 65 floors, housing 242 private residences

starting from the mid-level, above a huge shopping mall and a Four Seasons resort hotel. The units, ranging from

110-700 sq m, feature living areas with high ceilings and glass walls that open out to spacious terraces with

panoramic views of the city. The largest have their own swimming pool overlooking Kuala Lumpur City Centre. Set

to open early this year, more than 70 per cent of the 242 units have been sold so far, with prices starting from

$1.5 million. An exclusive five-bedroom duplex on the highest floors fetch $4.8 million — among the most

expensive apartments ever sold in Kuala Lumpur.

Amaris Terraces By-The-Sea in Penang, Malaysia’s northwestern resort island and technology hub, are luxurious

terraced houses with land ownership rights within a master-planned seaside development. It is a low-density

development with just 29 three-storey, five-bedroom seaside homes. The villas have internal courtyards

reminiscent of the spacious designs of traditional houses in old Penang, as well as private pools. Located not far

from a retail district with marina, upmarket eateries, shops, art galleries and a performing arts centre, the

development offers houses with prices ranging from $870,000-$1.1 million.

Vietnam

Binh Quoi Thanh Da Island is an upscale urban development in Vietnam’s economic hub of Ho Chi Minh City

where square-metre prices for premium developments are already exceeding $4,000. The district, on an island

enveloped on all sides by the Saigon River, is being designed as an integrated living space for mobile urban

professionals and features a number of high-end residences. The master plan also includes an organic ensemble

of a high-profile and iconic integrated resorts, a series of high-rise office towers and a mix of five-star hotels, a

cluster of modern retail malls and sporting venues and mixed-use precincts for living, working and leisure. Just

4km from Ho Chi Minh City’s international airport, the 426-hectare Binh Quoi Thanh Da Eco Township is planned

to accommodate up to 30,000 residents and will be connected with Ho Chi Minh City by bridges over the Saigon

River.

Mövenpick Cam Ranh Resort is an exclusive beach villa development on Bai Dai Beach in the city of Cam Ranh

near Nha Trang in central Vietnam, only a five-minute drive from Cam Ranh International Airport. The

development consists of 121 villas designed in a combination of modern architecture and traditional style, as well

as 250 five-star hotel rooms and a serviced apartment with 96 luxury units. Facilities include golf green, tennis






courts, beach club, restaurants and playgrounds. All villas, hotel rooms and apartments have direct ocean view

from living rooms and bedrooms. Prices for the villas start from around $620,000. Owners willing to rent receive a

guaranteed rental return of no less than 10 per cent annually over 10 years in a rental pool programme where

owners commit to an 85 per cent profit share for subleasing, currently the highest profit commitment in

Vietnam’s resort property market. Villas can also be used as a second home as owners are allocated up to 180

days each year. Operations start this month.

Hoi An City is a luxury resort development near Da Nang and the ancient town of Hoi An in north-central Vietnam.

The entire development spans over 400 hectares, features 198 apartments, 12 beachfront villas, 1,200 hotel

rooms, 20,000 sq m of retail space, a spa, gym and Cineplex. Expected to be completed early this year, the

investment scheme is similar to the Mövenpick Cam Ranh Resort, but the threshold is a bit lower with prices for a

one-bedroom apartments starting at $119,000. Two types of two-floor, five-bedroom sea-view villas, with sizes

ranging from 490-790 sq m, have prices starting at $600,000. A minimum annual profit of 9 per cent in 10 years is

guaranteed in a rental pool scheme, with 28 days per year free stay for the owner.

Source: Gulf News

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CARILLION BOSS APOLOGISES TO

LAWMAKERS FOR BRITISH COMPANY’S

COLLAPSE Tuesday, February 06, 2018

The boss of Carillion, the British construction firm which collapsed last month, apologised to lawmakers on

Tuesday as he faced questions over a failure which put thousands of jobs at risk.

Carillion, which employed nearly 20,000 people in Britain, collapsed on January 15 when its banks halted funding,

triggering Britain’s biggest corporate demise in a decade and forcing the government to step in to guarantee

public services from school meals to roadworks.

“I’m truly sorry,” interim chief executive Keith Cochrane said. “It was the worst possible outcome. This was a

business worth fighting for and that’s certainly what I sought to do during my time as chief executive.”

Under questioning from lawmakers Cochrane said that net debt was too high at the end of 2016 and the

company was trying to reduce it before it faced a deterioration of cash flow after March 2017. Meanwhile, another

452 jobs are to be cut at Carillion, the British government said on Monday, meaning about 5 per cent of the

collapsed construction and support services company’s domestic workforce has been put out of a job so far.

The Official Receiver, which manages insolvencies for the British government, has since been looking through the

about 450 contracts that Carillion was managing when it collapsed, seeking alternative contractors to complete

the tasks. The organisation said the job cuts announced on Monday were across the country and related to

private and public contracts that were being managed by Carillion, as well as some back-office functions.

About 16,000 jobs still hang in the balance. So far, about 1,019 have been saved, while 829 redundancies have

been made.

A government spokesman said the jobs saved had been transferred to other contracting companies.

He said the Official Receiver did not have an estimated time for when it would finish reviewing the contracts,

adding they were being reviewed in the order that most supported the extraction of “business value” for Carillion

creditors.

“These are obviously decisions that the receiver is taking, but we appreciate these are very difficult times for those

people working at Carillion, and where the government can provide support we will, of course, do so,” Prime

Minister Theresa May’s spokesman said.

The government, as well as private partners and lenders to the company, have announced measures to assist its

employees and its suppliers, most of whom were not insured against losses.

Most recently, British Business Bank has agreed to provide up to £100 million ($141 million; Dh516.27 million) of

lending to small businesses and workers affected by Carillion’s liquidation.

Source: Gulf News

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COMMERCIAL, GOVERNMENT

CONSTRUCTION IN U.S. TO ACCELERATE

THROUGH 2019 Tuesday, February 06, 2018

According to American Institute of Architects, despite labor shortages and rising material costs that continue to

impact the construction sector, construction spending for nonresidential buildings in the U.S. is projected to

increase 4% this year and continue at that pace of growth through 2019.

The American Institute of Architects semi-annual Consensus Construction Forecast indicates the commercial

construction sectors will generate much of the expected gains this year, and by 2019 the industrial and

institutional sectors will dominate the projected construction growth.

"Rebuilding after the record-breaking losses from natural disasters last year, the recently enacted tax reform bill,

and the prospects of an infrastructure package are expected to provide opportunities for even more robust levels

of activity within the industry," said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. "The Architecture Billings

Index (ABI) and other major leading indicators for the industry also point to an upturn in construction activity over

the coming year."

Source: World Property Journal

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GLOBAL COMMERCIAL REAL ESTATE

INVESTMENT TO DIP IN 2018 Thursday, February 08, 2018

According to global real estate consultant JLL, property investors worldwide continued to demonstrate their

confidence in global real estate markets throughout 2017, with investment in the final quarter hitting its highest

level in three years. Despite continued political concerns, real estate markets mirrored the global economic

recovery with Q4 2017 volumes coming in at $228 billion, bringing full-year activity to $698 billion, six percent

higher than 2016. Both EMEA and APAC recorded a strong full-year performance, jumping 22% and 13%

respectively, while the Americas saw volumes dip by 12% as investment in the U.S. continues to slip.

Although JLL acknowledged the market to be in an extended cycle, investor appetite for the sector has remained

consistent. But JLL also reports the market is unlikely to see the same highs in 2018 as a relative lack of product

combined with continued discipline are likely to cause the market to soften by five to 10 percent and finish

around $650 billion.

Other global real estate capital markets Highlights by JLL include:

Global real estate transaction volumes for the fourth quarter of 2017 totaled $228 billion, 10% higher relative to

the same period in 2016. This brings full-year volumes for 2017 to $698 billion, 6% above the total transacted in

2016.

EMEA closed the year on a high note as full-year volumes jumped by 22% to $300 billion, making it the most active

global region. Asia Pacific followed suit with a 13% increase in activity, bringing the total for 2017 to a record high

of $149 billion. In the Americas, annual investment dipped by 12% to $249 billion.

Foreign investors continue to favor London as the British capital led all cities in attracting cross border investment

in 2017. Capital from Hong Kong represented nearly 41% of all foreign inflows to London in 2017, up from 17%

the year before, says JLL.

Capping off what has been an exceptional year for the industrial sector, with volumes up 38% from 2016, the

fourth quarter saw the closure of CIC's $14.3 billion acquisition of Logicor, a pan European portfolio of industrial

assets.

U.S. multifamily investment maintained its momentum as volumes reached nearly $41 billion in the fourth

quarter says JLL. Annual activity fell to just shy of $140 billion, about 8% lower than the record-breaking total seen

in 2016, as the sector faces the potential for near-term supply risk with many urban submarkets continuing to

digest elevated deliveries.

Global real estate markets continued their strong performance in 2017. While yields in many global markets are

at record lows, healthy cash flow fundamentals have underpinned pricing. Though global markets remain liquid,

the relative lack of product combined with continued investor discipline are likely to limit further growth in

investment in 2018. Given this, JLL expects global investment volumes in 2018 to soften by 5%-10%, to around

$650 billion.

Source: World Property Journal

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HOUSING AFFORDABILITY IN U.S.

REMAINED FLAT IN 2017 Friday, February 09, 2018

According to the National Association of Home Builders / Wells Fargo Housing Opportunity Index released this

week, data for all four quarters of 2017 show housing affordability remaining essentially flat throughout the full

2017 year.

In all, 59.6 percent of new and existing homes sold between the beginning of October and end of December were

affordable to families earning the U.S. median income of $68,000. This is just slightly up from the 58.3 percent of

homes sold that were affordable to median-income earners in the third quarter, and effectively the same rate as

in the fourth quarter of 2016, when the HOI stood at 59.9 percent.

"Builder confidence and consumer demand remain strong, and this should help bring more buyers into the

marketplace in the year ahead," said NAHB Chairman Randy Noel. "At the same time, builders are working hard to

keep home prices affordable as they continue to grapple with persistent labor and lot shortages, burdensome

regulations and rising costs for building materials. Another factor that could have a negative effect on housing

affordability in the first quarter is a recent rise in mortgage interest rates."

"Ongoing job and economic growth coupled with tight inventories and rising household formations are boosting

housing demand," said NAHB Chief Economist Robert Dietz. "Meanwhile, NAHB has reduced its home price

forecast this year to 2.9 percent as a result of the recently enacted tax reform legislation. While it will further

boost economic activity, the new tax law is expected to contribute to price softness in some high-cost, high-tax

markets now that deductions for income and property taxes are capped at $10,000 per year."

The national median home price fell to $255,000 in the fourth quarter of 2017 from $260,000 in the previous

quarter. Price changes in this series can sometimes diverge from other national measures due to the limited

geographic scope of the underlying data. Meanwhile, average mortgage rates inched down four basis points in

the fourth quarter to 4.06 percent from 4.1 percent in the third quarter.

Youngstown-Warren-Boardman, Ohio-Pa., and Syracuse, N.Y., tied as the nation's most affordable major housing

market. In both metros, 88.3 percent of all new and existing homes sold in the fourth quarter were affordable to

families earning the area's median income of $54,600 and $68,000, respectively. Meanwhile, Cumberland, Md.-

W.Va., was rated the nation's most affordable smaller market, with 96.9 percent of homes sold in the fourth

quarter being affordable to families earning the median income of $53,900.

Rounding out the top five affordable major housing markets in respective order were Indianapolis-Carmel-

Anderson, Ind.; Scranton-Wilkes Barre-Hazleton, Pa.; and Columbia, S.C.

Smaller markets joining Cumberland at the top of the list included Kokomo, Ind.; Wheeling, W.Va.-Ohio;

Davenport-Moline-Rock Island, Iowa-Ill.; and Mansfield, Ohio, which also posted a fifth place tie with Monroe,

Mich.

San Francisco, which had been the nation's least affordable housing market for 19 straight quarters before being

displaced by Los Angeles in the third quarter of 2017, once again assumed the mantle as the least affordable

market. There, just 6.3 percent of the homes sold in the last quarter of 2017 were affordable to families earning

the area's median income of $113,100.






Other major metros at the bottom of the affordability chart were located in California. In descending order, they

included Los Angeles,-Long Beach-Glendale; Anaheim-Santa Ana-Irvine; San Jose-Sunnyvale-Santa Clara; and

Santa Rosa.

All five least affordable small housing markets were also in the Golden State. At the very bottom of the

affordability chart was Salinas, where 12 percent of all new and existing homes sold were affordable to families

earning the area's median income of $63,100.

In descending order, other small markets at the lowest end of the affordability scale included Santa Cruz-

Watsonville; San Luis Obispo-Paso Robles-Arroyo Grande; Napa; and San Rafael.

Source: World Property Jorunal

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With over 30 years of Middle East experience,

Asteco’s Valuation & Advisory Services

Team brings together a group of the Gulf’s

leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai,

Northern Emirates, Qatar, and the Kingdom of Saudi

Arabia not only provides a deep understanding of the local

markets but also enables us to undertake large

instructions where we can quickly apply resources to meet

clients requirements.

Our breadth of experience across all the main property

sectors is underpinned by our sales, leasing and

investment teams transacting in the market and a wealth

of research that supports our decision-making.

John Allen BSc MRICS

Director, Valuation & Advisory

+971 4 403 7777

[email protected]

Jenny Weidling BA (Hons)

Manager – Research and Advisory

+971 4 403 7789

[email protected]

VALUATION & ADVISORY

Our professional advisory services are conducted by

suitably qualified personnel all of whom have had

extensive real estate experience within the Middle

East and internationally.

Our valuations are carried out in accordance with the

Royal Institution of Chartered Surveyors (RICS) and

International Valuation Standards (IVS) and are

undertaken by appropriately qualified valuers with

extensive local experience.

The Professional Services Asteco conducts throughout

the region include:

• Consultancy and Advisory Services

• Market Research

• Valuation Services

SALES

Asteco has established a large regional property sales

division with representatives based in UAE, Saudi

Arabia, Qatar and Jordan.

Our sales teams have extensive experience in the

negotiation and sale of a variety of assets.

LEASING

Asteco has been instrumental in the leasing of many

high-profile developments across the GCC.

ASSET MANAGEMENT

Asteco provides comprehensive asset management

services to all property owners, whether a single unit

(IPM) or a regional mixed use portfolio. Our focus is

on maximising value for our Clients.

OWNER ASSOCIATION

Asteco has the experience, systems, procedures and

manuals in place to provide streamlined

comprehensive Association Management and

Consultancy Services to residential, commercial and

mixed use communities throughout the GCC Region.

SALES MANAGEMENT

Our Sales Management services are comprehensive

and encompass everything required for the successful

completion and handover of units to individual unit

owners.

news brief 06 - asteco property management · heritage. it could be that it’s reinvented itself...

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