news brief 22 - asteco property management€¦ · heathrow airport handled a total of 16 million...




REAL ESTATE NEWS UAE

UAE DESERT RESORTS AIM TO STAY BUSY AS TEMPERATURES SOAR INVESTOR CONFIDENCE IN UAE HOTELS GROWS AS VISITOR NUMBERS RISE ALDAR PROPERTIES RETIRES $1.25B BOND AS COMPANY ACHIEVES IMPORTANT FINANCING MILESTONES

BANKS OPEN UP TO UAE’S BOOMING PROPERTY SECTOR DUBAI

DUBAI AIRPORT TO BECOME WORLD'S LARGEST NEXT YEAR - FOR GOOD DEIRA BUILDING RESIDENTS CLAIM TO BE ‘BULLIED’ BY REAL ESTATE FIRM DUBAI'S PROPERTY WATCHDOG ISSUES FINES FOR COLD CALL TACTICS DUBAI REALTY STILL PACKS PUNCH FOR GCC INVESTORS RESOLVING RENTAL DISPUTES AT DIFC PROPERTIES MEYDAN INKS DH700M BANK FINANCING DEAL SECOND TOWER AT BLVD CRESCENT IN DUBAI LAUNCHED BY EMAAR STOP COLD-CALLING HOMEOWNERS, DUBAI BROKERS TOLD DEADLINE APPROACHES FOR LICENSED HOLIDAY HOMES IN DUBAI DUBAI PROPERTY PRICES COOL IN FIRST QUARTER AS GOVERNMENT ACTIONS TAKE EFFECT

NAKHEEL TO HIRE 250 ESTATE AGENTS FOR NEW COMPANY IN DUBAI DAMAC HOPING TO TEMPT BUYERS INTO DOUBLING UP WITH TWO-FLAT DEALS

ABU DHABI

ABU DHABI INTERNATIONAL AIRPORT POSTS 22.5% INCREASE IN PASSENGER TRAFFIC IN APRIL 2014

ALDAR PROPERTIES RETIRES $1.25B BOND AS COMPANY ACHIEVES IMPORTANT FINANCING MILESTONES

ARABTEC SHARES RISE AS CHIEF OVERTAKES AABAR AS LARGEST SHAREHOLDER

ABU DHABI PROPERTY INVESTOR TASWEEK AIMS FOR DH1 BILLION IPO IN DECEMBER

WRITEDOWN HITS BOTTOM LINE FOR TDIC WITH LOSS OF DH1.13BN YAS ISLAND APARTMENT SALE DRAWS ENTHUSIASTIC RECEPTION IN ABU DHABI

KSA

AL FUTTAIM GROUP TO BUILD SAUDI ARABIA’S LARGEST SHOPPING CENTRE

AL FUTTAIM GROUP TO BUILD SAUDI ARABIA’S LARGEST SHOPPING CENTRE




DEIRA BUILDING RESIDENTS CLAIM TO

BE ‘BULLIED’ BY REAL ESTATE FIRM

SUNDAY 08 JUNE 2014

It has been a year since the air-conditioner functioned properly in a building located in Port Saeed, Deira, its residents maintain. In the lobby, the thermometer reads 30° C. Unable to cope with the heat; several residents have vacated their apartments. “A little warmer and we will be roasted,” jokes Waddah Abdullah, a 31-year-old Yemeni.

The situation, though, is nothing to joke about. Besides the air-conditioning, almost all basic amenities are absent in the building, and there seems to be nothing that can move the building management to improve the living conditions.

Despite several attempts by Emirates 24|7, the building management could not be contacted for a comment. The story is told by the building’s residents, who presented the thick pile of papers containing numerous complaints, police cases, civil defence reports, etc. A visit was made by this reporter to the building to confirm the plight.

Ahmed Adel is equipped with two flashlights as he descends to the basement parking, where lights are not working and nobody seems to park their cars there anymore. Temperatures must be soaring towards 40 degrees.

“Look, this is where the electricity cables dangle out of the ceiling without any protection,” says the 25-year-old Egyptian who has lived in the building since 2009. “And here you can see the water damage, which is coming from the walls,” he says pointing to the water-damaged walls in the dingy basement.

“Everywhere, the strains of water leakage can be found. In the basement it got really bad, I suspect that is why the basement was closed for parking,” Ahmed says.

The same approach was taken when residents started to complain about other amenities. “When we complained about the swimming pool, it was shut down. When we complained about the gym, it was shut down. Even the laundry room was shut down. They simply do not want to fix anything.”

According to residents, the fire system does not comply with the safety standards, a stench of garbage and sewage is present on all corridors and mice and rats find a welcome home in the building.

As residents became more vocal, the situation only deteriorated. “Our complaints are answered with illegal notices and practices from the real estate company,” said Ahmed.

Waddah experienced this approach first hand, when his electricity was shut down several times. “Sometimes, it happened without any warning, and sometimes they said it was due to maintenance work, which has never been seen by anyone.

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“AC, electricity and water are the main needs of every resident in the country. How can they take this away from us? I can just as well take a tent into the desert. This is a violation of human rights,” says the frustrated resident, who has started living with his father out of despair.

Apart from electricity cuts, evacuations have been common, describes Ahmed. Only one day earlier, he received an evacuation letter, dated April, and which instructs him to leave the apartment by the end of May.

“I visited the Rental Dispute Committee and was told that the letter was not valid. Unfortunately, many residents got afraid and acted as per these notices. Half of the building is now vacant,” said Ahmed.

While the rent for a one-bedroom apartment used to be Dh40,000 it was recently increased to Dh47,000, an amount Ahmed decided to pay accurately to be sure that he played by the rules. But it does not seem to make a difference.

In a latest attempt to resolve the issue a complaint was formed with the signature of 40 residents and delivered to the concerned authorities, which instructed the real estate company to come up with an adequate response. Nothing happened after that, and meanwhile the case has been closed.

“They are driving us crazy, they just do not care at all,” said Waddah. It is most frustrating to find out that nothing can be done... The real estate company has the ability to ignore all instructions and get away with it.”

Source: Emirates 24/7

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DUBAI AIRPORT TO BECOME WORLD'S

LARGEST NEXT YEAR - FOR GOOD

SUNDAY 08 JUNE 2014

Dubai International will become world's busiest airport for good next year, according to an aviation think-tank.

Centre for Asia Pacific Aviation (Capa) said short-term effects will see Dubai Airport slip behind London's Heathrow Airport for the full year in 2014, but the upgrades will ensure that the emirate has the infrastructure and capacity required not only to become the largest international airport by 2015, but also maintain that position.

Led by strong growth of local carriers Emirates and flydubai, Dubai airport became world's busiest in Q1 2014 by overtaking London's Heathrow Airport. But the passenger traffic will drop because airlines curtailed their flights due to Dubai Airport's closure of two runways for the 80-day maintenance, which commenced on May 1, 2014.

The number of passengers passing through Heathrow Airport reached 72.3 million last year while Dubai International handled 66.43 million passengers.

Dubai Airport handled 18.36 million international passengers over the first three months of 2014, while Heathrow Airport handled a total of 16 million passengers. Dubai had growth of 11.4 per cent, while London Heathrow traffic grew just 0.5 per cent for the period.

However, the Dubai Airport will regain its status of world's busiest for the whole year next year - for good - when airport will have full operations and flights return.

A number of airlines have moved their operations temporarily to other airports due to the runways maintenance and will resume operations from Dubai Airport upon the completion of the refurbishment and upgrading.

It said runway works at the emirate's airport have cut capacity by better than 20 per cent. "With Dubai Airports investing more than $7.5 billion (Dh27.5 billion) in enhancements to existing terminals and the construction of new ones, as well as continued growth by the home carrier and the addition of new airlines, Dubai Airport's growth will quickly leave behind the traditional international hubs," Capa said in its latest update on the Dubai Airport.

Dubai is, however, still on track to handle more than 70 million passengers in 2014.

Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates Group, said last month that Dubai International is expected to surpass 70 million passengers in 2014, 5.4 per cent more than last year, despite 80-day closure of the runways.

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Paul Griffiths, Chief Executive Officer of Dubai Airports, had forecast that the Dubai Airports to surpass its target of 100 million passengers by 2020, thanks to sustained growth in passenger traffic.

Over the past decade, traffic at Dubai has more than tripled, while growth at London Heathrow has effectively stagnated, Capa added.

Source: Emirates 24/7

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ABU DHABI INTERNATIONAL AIRPORT

POSTS 22.5% INCREASE IN

PASSENGER TRAFFIC IN APRIL 2014

SATURDAY 07 JUNE 2014

The passenger traffic rose to 22.5% in that month as compared to the same period last year, according to the latest figures.

The airport’s passenger statistics showed that 1,620,324 passengers used the airport during the month, growing from 1,515,407 during the same month a year ago. Aircraft movements increased to 12,420 in April 2014, recording 16.4% growth when compared with 10,673 movements logged in April 2013.

Cargo activity handling rose to 60,059 tonnes representing a 16.6% increase when compared to 51,511 tonnes in April 2013.

The top five routes from Abu Dhabi International Airport during April were Bangkok, Manila, London Heathrow, Doha, and Jeddah.

Ahmad Al Haddabi, Chief Operations Officer at Abu Dhabi Airports, commented on the significant increase saying: "Today Abu Dhabi International Airport caters to more than 40 international airlines connecting the U.A.E.?s capital with more than 96 destinations in over 54 countries globally. This is as a result of Etihad’s growth strategy, evident in new routes to be served this summer including non-stop flights from Abu Dhabi to Los Angeles in the USA, Zurich in Switzerland, Belgrade in Serbia, Perth in Australia, Jaipur in India and Yerevan in Armenia. Abu Dhabi International Airport will also see more flights from its other airline partners this summer, especially in the Gulf region in Saudi Arabia, Qatar and Bahrain. Additionally, more aircraft will fly to Pakistan with extra flights to Lahore, Islamabad, Karachi, Peshawar and Rahim Yar Khan. Similarly, Hyderabad, Chennai and Bangalore will each witness 14 extra flights a week from Abu Dhabi - the greatest growth in the Indian market." "Abu Dhabi Airports is on track to handle this significant increase in air traffic through the upgrade and expansion of our facilities, exciting new retail offerings, and integration of services to ensure a world class travel experience for passengers. We are looking forward to a busy summer programme." Abu Dhabi Airports has implemented a Capacity Enhancement Programme with several key infrastructure projects already delivered, with more in the pipeline.

Source: Emirates News Agency (WAM)

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DUBAI'S PROPERTY WATCHDOG

ISSUES FINES FOR COLD CALL

TACTICS


RERA, the regulatory arm of the Dubai Land Department, has issued official notice to the city's real estate offices to request they desist from direct telemarketing.

The move follows repeated complaints from customers who have contacted the government body saying that they are being disturbed by unsolicited calls from brokers making enquiries about their property.

Investigations by the Real Estate Inspection Department into the complaints resulted in further warning letters being sent to 20 real estate offices in Dubai, a statement said.

Fines of AED50,000 ($13,600) were also imposed against three offices after they were found to be repeating practices they had been previously warned about and which breached RERA regulations, the statement added without naming the companies involved.

"RERA is keen to apply the highest standards of transparency in the market and this means both exercising control on transactions and regulating interactions between real estate agents and customers," said Yousif Al Hashimi, Deputy CEO of RERA.

"As the regulatory body for Dubai's real estate sector, our aim is to ensure that every party undertakes its actions and activities in a professional manner that is consistent with the agency's laws and principles," he added.

The instruction from RERA came in the form of an official letter written by the organisation which was sent out to all registered property brokers in Dubai.

The letter informed the recipients that the practice of direct telemarketing violates RERA's rules and regulations.

RERA decided to take action following an increase in 'cold' calls to customers, with telemarketers apparently trying new ways to get around the existing rules that ban the practice.

It was brought to the organisation's attention that some real estate brokers are claiming a tenuous connection with owners during such calls in an attempt to legitimise their enquiries about their property.

RERA said it used its official notice to remind the brokers that unsolicited calls of any nature were against the department's regulations.

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The letter also stated that brokers are not allowed to cause inconvenience to property owners by using such unprofessional tactics and warned them that they would face sanctions if they didn't desist from the practice.

Source: Arabian Business

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DUBAI REALTY STILL PACKS PUNCH

FOR GCC INVESTORS

FRIDAY 06 JUNE 2014

The pace of transactional activity in Dubai’s realty space may have slackened in the last five months, but there is still enough going around keeping Gulf-based investors interested. A significant plus is the fact that Dubai has the ready properties — cutting across all categories — for investors to pile in.

Recently, PineBridge Investments Middle East, with its regional headquarters in Bahrain, completed the first close of a GCC-targetted real estate fund after raising more than $140 million (Dh514 million). It is targetting an eventual close of $200 million. The first investment was in a property housing a school in Dubai. Other real estate categories in the emirate are being looked at.

“There are a number of opportunities to invest in specialist real estate assets that generate stable returns and unlock capital for business owners in the GCC,” said Talal Al Zain, CEO of PineBridge Investments Middle East. “The target sectors — logistics, social infrastructure and community retail — are key contributors to economic growth and development of the region, as well as for job creation.”

That’s the crux — there are investments that can be tapped by properties that are ready or will be so shortly and where the supporting infrastructure is well established. “The infrastructure is what counts with the kind of big-ticket investments GCC institutions or high networth individuals prefer and remains the number one reason why Dubai still retains a decisive edge,” said Abdullah Al Ajaji, CEO of Driven Properties, a consultancy. “So, even through yields have dropped from what it was last year, property values are still going up. The market has been seeing Saudi institutional investors being active in recent weeks and following individual investors who have been busy in the last two years.

“Dubai’s infrastructure edge is also why Saudi investors will take their time getting busy in Qatar.”

Expatriates

That Qatar property’ prospects as an investment will be a slow burn is echoed by Mark Proudley, associate director at DTZ. “Qatar real estate has benefitted from foreign investors purchasing residential units... but on a much smaller scale and predominantly restricted to expatriates who live and work in Qatar. Strategically it is unlikely that will change in the near future.

“In terms of retail investors purchasing apartments for occupational use, Dubai is a high-profile location and an international destination that attracts people, including investors and tourists from around the world.”

Proudley said in contrast, “Qatar has attracted investors from around the region in districts that permit foreign ownership/investment in real estate. An example is the number of residential towers at Pearl Qatar being developed by regional companies. Lusail as a project has also benefited from foreign investment, again mainly from developers within the region.

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As such, some local developers are already marking out a presence in Qatar. This includes Damac Properties, which has completed one residential project in Lusail and reached an advanced stage with a serviced apartments venture.

“There are opportunities for UAE based developers in Qatar going forward, particularly at projects like Lusail,” said Proudley. “However, given the upturn in activity in Dubai we anticipate that most will be focusing on projects there.

“A number of large-scale developments that are either completed or being built will appeal to both locals expatriates including Pearl Qatar, Lusail and Msheireb. It is probably the case that a number of new developments such as Msheireb and Katara do have local heritage at the heart of their vision.”

Then again, “Qatar is not necessarily seeking to compete with Dubai for international investors.”

Source: Gulf News

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NAKHEEL, ENGEL & VÖLKERS TO

LAUNCH NEW DUBAI REAL ESTATE

FIRM

WEDNESDAY 04 JUNE 2014

Nakheel said on Wednesday it has signed a Letter of Intent (LoI) with Germany-based real estate Brokerage Company, Engel and Völkers (E&V), to create a new company specialising in selling and leasing properties in Dubai.

Trading under the E&V brand, the new company expects to open its new Dubai office on October 1 this year, Nakheel said in a statement. It added that the new joint venture will help enhancing services to Nakheel’s new and existing customers and further expanding its diverse range of property-related business activities.

With an aggressive recruitment campaign for the new company already underway, a CEO will be appointed within the coming weeks besides some 250 agents over the next 12 months, according to Nakheel.

“Our strategic partnership is set to redefine real estate services in the emirate,” stated Ali Rashed Lootah said, Nakheel’s Chairman.

Added Christian Völkers, CEO and Founder of Engel & Völkers AG: “This joint venture means that we are tapping into a key market. Dubai is witnessing an enormous growth in population numbers because of its high quality of life and its geographical location between Europe and Asia. That goes hand in hand with a higher demand for top-end property.”

Source: Gulf News

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RESOLVING RENTAL DISPUTES AT DIFC

PROPERTIES


The Dubai decree on rental increases issued at the end of last year has significant implications for the current practice of landlords in the DIFC. Previously, there was no rent cap law in the DIFC.

Now, Decree No. 43 of 2013 — on ‘Determining the Increase in the Real Estate Rentals in the Emirate of Dubai’ — also determines the extent to which rents may be increased in the free zones, and expressly refers to its applicability in the DIFC. As a whole, the decree applies to landlords in all of Dubai.

The decree provides a mechanism for calculating the maximum rent increase permitted, if at all, upon renewing a lease. The calculation is determined by reference to the average rental value in the area where the property is located and the percentage to which the rent pre-renewal falls short of that.

Article 1 of the decree sets out the maximum increase in rent allowed, depending on the difference between the rental amount and the average rent paid in the area. No rent increase is permitted where the rental amount is up to 10 per cent less than the average rental in the same area.

The decree also stipulates that the average rent is determined by the Rera (Real Estate Regulatory Agency) rent index for which the Rental Increase Calculator is available online. The Rental Increase Calculator allows a landlord or tenant to enter the current annual rent paid for the type of property in a particular area and calculate the permitted rent increase.

The Rental Increase Calculator has just this month been adjusted for rental prices and now also includes properties in the DIFC.

Further, it should be noted that the Rental Disputes Settlement Centre of the Dubai Land Department will handle all rental disputes arising between landlords and tenants in the emirate of Dubai (including the free zones). However, this does not apply in respect of rental disputes arising inside free zones that have courts competent to settle rental disputes arising within their boundaries.

Therefore, the DIFC Courts would have jurisdiction over any rental dispute in the DIFC. Moreover, in this regard the DIFC Small Claims Tribunal (Resolution of Rental Disputes) Order No.2 of 2014 directs and expressly provides that the Small Claims Tribunal will hear and determine all rental disputes where the amount of the claim does not exceed Dh500,000.

Source: Gulf News

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MEYDAN INKS DH700M BANK

FINANCING DEAL


Group taps CBI for revolving project financing facility to build a further 1,500 villas for Emirates Group that will add to an existing 528 units.

Dubai: The Meydan Group is tapping Commercial Bank International (CBI) for a Dh700 million revolving project financing facility that will go towards building more than 1,500 villas for Emirates Group in Meydan City. The loan tenor is for eight years and structured in a way to keep the “interest rate lower than the prevailing market rates”, according to a senior Meydan official.

It was last year that Meydan entered its first financing deal with CBI, which is the local affiliate of Qatar National Bank and in which it has a 40 per cent stake. The value of that loan arrangement was not revealed at the time, but market sources reckon it to be “much higher” than the Dh700 million signed up yesterday.

“It was two years ago that Emirates Group bought 528 villas at Meydan, of which we have delivered 306 and the rest in the next two months,” said Saeed Humaid Al Tayer, Meydan’s chairman and CEO. “The latest deal will see a further 1,500 plus villas, taking the total to 2,028. Emirates plans to use them for their pilots as they keep adding substantial aircraft numbers to their existing fleet.

“Simultaneously, Meydan and Emirates will explore whether further properties can be developed along the same lines.”

Based on construction timelines, 500 villas in the new tranche are to be delivered by March next and the rest in five phases over a further 24-month period.

The first of the Emirates’ villas will be ready for occupation shortly. A senior Meydan official said it is unlikely that the master-developer would go for similar arrangements with other big corporate entities in Dubai.

“This is a one-off and reflects the deep relationship between Emirates and Meydan, with the airline being a key sponsor of the races,” said Meghnad Warrier, vice-president for finance and investment at Meydan Group. “However, there are other deals we have accommodated at Meydan, such as the one with Emirates NBD for three commercial properties, where up to 1,400 members of its staff will work.

“There’s also DHL which is finishing one of key logistics hub in Meydan — and the rationale behind that was to have a facility equidistant between the new and the old airports. Many investors have been approaching us given the realisation that Meydan now occupies a most strategic location in Dubai.”

While the races have already given Meydan optimum global exposure, the master-developer’s blueprint is to raise its status as a fully-fledged commercial and residential destination anchored by leisure and

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entertainment options. Several elements of the game plan is taking shape, either through Meydan directly or through sub-developers such as Sobha Group and G&Co.

Source: Gulf News

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ALDAR PROPERTIES RETIRES $1.25B

BOND AS COMPANY ACHIEVES

IMPORTANT FINANCING MILESTONES


Aldar Properties has repaid a $1.25 billion (Dh4.59 billion) bond that matured at the end of May 2014 as the company pushes ahead with a strategy to deleverage, reduce its cost of borrowing and build a strong platform for growth.

The bond that matured in May 2014 carried an annual interest cost of 10.75 per cent and it was repaid using cash and by drawing down on committed liquidity facilities that carry an annual interest cost of 1.7 per cent. Aldar has now successfully refinanced or agreed new terms on all its financing facilities since the merger and has achieved significant interest savings. Aldar’s weighted average cost of debt has reduced from 5.8 per cent to 2.8 per cent.

Since completing the merger last year, Aldar Properties has reduced its gross debt from Dh14.2 billion to Dh10.1 billion and following the repayment of the bond continues to maintain a strong cash position of Dh3.8 billion of cash as of 31 May 2014. Aldar is now forging ahead with new developments at a time when demand is growing for high-quality real estate in Abu Dhabi. The company has nearly Dh40.7 billion in assets.

Source: Gulf News

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INVESTOR CONFIDENCE IN UAE

HOTELS GROWS AS VISITOR NUMBERS

RISE

MONDAY 02 JUNE 2014

Increasing tourist numbers have lifted investor confidence in the country’s hotel sector, particularly Dubai, say the property consultants JLL.

While domestic developers and high net worth individuals form a large portion of investors, there is also an increased appetite from global institutions and conglomerates, it said.

“Demand from visitors is rising in the UAE and in Dubai in particular, leading to the investor confidence. But there is also a consciousness of the possibility of oversupply,” said Ahmed Ramdan, the group chief executive of Dubai-based hospitality consultancy Ròya International.

“Banks are still conservative in their approach as they see this as a real estate rather than a tourism sector and this is a challenge.”

Dubai has 410 hotels accounting for 60,166 rooms, or 64 per cent of the UAE inventory.

JLL says of the 28,000 new rooms to come onstream by 2016, Dubai will account for about 50 per cent followed by 31 per cent in Abu Dhabi.

In the capital, the supply of hotel rooms had grown faster than demand in the past, but the emirate is ramping up its tourism sector with diverse offerings such as those on Yas Island, which is expected to stabilise the market, JLL analysts said. The emirate has 20,242 rooms from 94 properties.

Driven by the expansion of Emirates Airline and Etihad Airways, visitor numbers have also been increasing. Last year, Dubai attracted 11 million travellers, while in Abu Dhabi 2.8 million people checked into hotels.

The two airlines between them introduced 31 new routes in the past two years. This year, Emirates has announced flights to Abuja, Brussels, Chicago, Kano in Nigeria, and Oslo. Etihad has announced eight new routes including Perth, Jaipur, Dallas and a service to Los Angeles that began yesterday.

Investment related to travel and tourism in the UAE touched Dh21 billion last year, or 6.2 per cent of the overall investments, according to the Geneva-based World Travel and Tourism Council. The figure is expected to rise by 9.7 per cent this year, and by 5.1 per cent annually over the next 10 years to Dh37.8bn in 2024.

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The UAE’s hotel sector is one of the top categories to receive foreign direct investment (FDI) apart from oil and gas, power and water, construction and IT.

The UK, central Europe, Saudi Arabia and Kuwait account for most of the FDI inflows into this sector in the UAE, Mr. Ramdan said.

“They are quite familiar with the market and have been investing in different sectors [already],” he said.

With the inflows and increasing investor confidence, a number of stalled hotel and hospitality projects have been revived. That includes Nakheel’s Deira Islands. In March, the developer released 94 hotel plots for sale that will add 23,000 rooms.

Within Ròya’s portfolio, revived projects account for 15 per cent of its 60 projects, and at least 10 per cent of these involve FDI.

The Dubai government initiative to encourage the building of more mid-range hotels will increase the number of investors in the sector, Mr. Ramdan said.

“The last two years [investment] has grown tremendously, and now you will see it will grow but it will stabilise because supply is coming into the market,” he said.

More developers are announcing hotel projects. Dubai-based Union Properties last week announced that it would build 1,000 hotel rooms in the next five years in the mid and budget range.

Meraas Holding is developing the Bluewaters project off Jumeirah Beach Residence that will have a five-star hotel besides a 210-metre Ferris wheel.

Mohammed bin Rashid City, Dubai Canal, a theme park complex in Jebel Ali and a design district in Downtown Dubai besides Saadiyat Island in Abu Dhabi are expected to drive tourism in the run-up to Expo2020.

Source: The National

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AL FUTTAIM GROUP TO BUILD SAUDI

ARABIA’S LARGEST SHOPPING CENTRE

MONDAY 02 JUNE 2014

The Al Futtaim Group, one of the biggest conglomerates in the UAE, has signed a deal to build Saudi Arabia’s largest shopping centre as the developer seeks a foothold in the lucrative Saudi retail market.

The company struck a deal with Riyadh-based Kayannat Real Estate Company to export its Festival City concept and build a 6 billion riyal (Dh5.87bn) super-regional mall in the Al Diriyah district to the west of Riyadh.

The 250,000 square metre Al Diriyah Festival City mall, which is to include an Ikea anchor store, a luxury 500-room hotel and serviced apartments, will be located 5 kilometres from King Saud University and 10km from King Abdullah Financial District.

Al Futtaim said that the scheme has obtained all necessary building permits and is ready to start construction in the coming weeks.

Under the agreement, Al Futtaim will provide investment and development management services to build and operate the mall.

“With a population of 30 million, Saudi Arabia is the GCC’s biggest market with a booming retail sector expected to reach a value of 276bn riyals by the end of 2014, which accounts for 17 per cent of Saudi Arabia’s GDP,” said Omar Al Futtaim, the vice chairman of Al Futtaim Group.

“This agreement will add another significant asset into our portfolio of regional malls. It gives us a footprint into the kingdom’s retail sector and extends our network of shopping centres.”

The project is the latest of Al Futtaim’s Ikea-anchored Festival City- branded shopping and entertainment schemes, which the company is aiming to export across the Middle East.

The company opened the original Dubai Festival City Mall in 2005 and last year opened a 157,700 sq metre Cairo Festival City. In Qatar, Al Futtaim and its joint venture partners have completed the first phase of the 254,000 sq metre Doha Festival City.

In Muscat the company is working with local partners to build Oman’s largest shopping mall, which will have an Ikea. The company is also co-developing a 120,000 sq metre, Ikea-equipped shopping mall in Casablanca, Morocco.

Retail spending has been growing rapidly in Saudi Arabia over the past three years, driven by a government policy to grant bonuses to state employees after the Arab Spring.

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According to the property consultancy JLL, average retail rents in Riyadh increased over the six months to the end of March to 2,700 riyals per sq metres from 2,600.

“Al Futtaim is just one of a number of Dubai-based developers looking to get a foothold into the lucrative Saudi Arabian market,” said Craig Plumb, the head of research at JLL’s Dubai office. “At the moment the country has no other major internationally branded retail centre and the malls which have been completed have been of varying quality.”

The developer could face difficulties getting the project’s first phase – the Ikea store – completed within its tight 12-month schedule as the country’s contractors continue to suffer the effects of a government clampdown on illegal workers.

Almost 1 million foreign workers are believed to have departed the kingdom between March and November last year after authorities began enforcing work permit rules. The total number of foreign workers was estimated at 9 million before the action.


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SECOND TOWER AT BLVD CRESCENT IN

DUBAI LAUNCHED BY EMAAR

MONDAY 02 JUNE 2014

Emaar Properties has launched the second phase of its BLVD Crescent project in Downtown Dubai. The second phase will feature more than 70 one, two and three-bedroom apartments within the 20-storey BLVD Crescent Tower II. The first phase featured the other tower, which spans 38 storeys and was launched in March.

“With Downtown Dubai witnessing strong demand, driven by the confidence of international investors to take advantage of Dubai’s position as a safe hub for investment, BLVD Crescent Tower II, which follows the successful launch of the first tower in Dubai, Abu Dhabi, Almaty, and Shanghai earlier this year, will once again underline the city’s burgeoning real estate industry,” said Arif Amiri, the chief commercial officer, Emaar Properties.

Emaar will launch BLVD Crescent Tower II simultaneously in three cities – Dubai, Abu Dhabi, and Kuwait City. Online registration will commence on Wednesday at 10am.

Sales will be held on Saturday at Emaar Pavilion on Mohammed Bin Rashid Boulevard, in Dubai; the Emaar Sales Centre in Al Nahda Tower, in Abu Dhabi, at 10am; and in Kuwait City at The Regency, Al Bida’a, Al Tawoon Street, Salmiyaat, at 9am.


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UAE DESERT RESORTS AIM TO STAY

BUSY AS TEMPERATURES SOAR

MONDAY 02 JUNE 2014

Desert resorts across the Emirates bank on the silence of the landscape to sell its rooms as well as the views they offer.

Set up mostly along the lines of Arabian architecture the experience can be enjoyed in luxurious surroundings, with blue pools and secluded villas.

But summer time is a hard sell for such resorts when heat and humidity keep many travellers away. So many are turning their attentions indoors.

“This summer, we are taking advantage of the fact that outdoor activities do not take place too often due to the heat and we are expanding our campsite facilities to be able to cater to 300 guests for corporate and leisure events,” says Arne Silvis, the general manager of the Al Maha Desert Resort and Spa.

Al Maha is one of at least half a dozen resorts that dot the desert in the Emirates. While some of them are located in remote areas, others recreate the sense of exclusivity right outside bustling Dubai.

Although deserts would seem to be the natural place to avoid during summer – a traditionally low season for hotels in the region – resort scan boost business in the Emirates with cheaper rooms, package deals on rooms and food and the promise of experiencing the desert away from the crowds. This year, as summer months coincide with Ramadan and Eid falling at the end of July, earlier than last year and shortening the low season this might well be one of the busiest for the desert resorts.

“The hotel industry is incredibly diverse and fast paced, with each season catering to different markets that visit the UAE and the summer is no different,” says Wael Soueid, the area general manager for Abu Dhabi Anantara Hotels, Resorts and Spas.

The mid-summer months of June, July and August have recently included Ramadan and Eid Al Fitr. Occupancy rates hover in the bottom range and average room rates go down as the properties compete to attract guests. This year, with Eid occurring around late July, hotels expect the low season to be until the end of that month, instead of the end August like last year.

“Desert resorts generally experience a softening in demand during the summer months as the temperatures become too high for the majority of visitors,” says Chris Hewett, a senior consultant at Tri Hospitality Consulting.

Last year, during the low period, Dubai hotels experienced an average occupancy of 55 per cent while in Abu Dhabi hotels touched 49 per cent.

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“The hotel market in the UAE historically experiences the lowest occupancy levels during Ramadan as demand from within the [Arabian] Gulf and other international markets subsides,” he says.

“Demand generally recovers directly after the Eid Al Fitr holidays as was experienced last year, when occupancies in Dubai jumped to 72 per cent in August.”

But lower occupancy rates do have some benefit for the hoteliers.

“The summer months have proven to be challenging months for all UAE hotels,” says Anders Dimblad, the area general manager for Banyan Tree Al Wadi resort in Ras Al Khaimah. “This time does allow us to refocus on our training efforts and maintenance programmes.”

Banyan Tree occupancies drop by an average of 20 per cent over its peak season during this time.

Most of its guests come from the neighbouring emirates and the Gulf.

“We find that families that have not travelled overseas tend to take a mini break at the resort due the proximity,” Mr. Dimblad says.

“From our European markets, [guests from] Germany and the UK tend to combine their stays with a city hotel and shopping experience in Dubai.”

The 32 tented villas at the resort, which opened in 2010, was originally set within a 100-hectare nature reserve with a small number of reintroduced oryx and gazelle. As the wildlife proliferated, the reserve spread out and now covers more than 500 hectares.

At Al Maha, the occupancy rates on average for May remain close to 65 per cent, dropping off in June to 55 per cent and 45 per cent in July. Day visitors, however, keep coming along for spa activities or meal packages.

Safely ensconced in air-conditioned Land Cruisers away from the heat and humidity, wildlife safaris carry on. Camel rides and early-morning falconry displays continue, too.

For hotel workers, it is the best time to take a holiday.

“As summer months are the quietest in the year, members of staff try and take their vacations during that time,” Mr. Silvis says. “However, most of the engineering team remains on the property during the summers to carry out maintenance and various refurbishment tasks.”

One of the major driving factors for business during this time is the reduced room rates on offer.

“This appeals to visitors who wish to experience the desert resorts and who are unlikely to afford the high rates the properties charge during the peak periods of demand,” Mr. Hewett says.

The Emirates Group-owned Al Maha, 65km outside Dubai and managed by the Starwood group, has 42 rooms that start at Dh4,000 for June weekends and can go up Dh27,600. In October, it can go up to Dh5,000.

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At the 113-room Bab Al Shams Desert Resort and Spa, guests can explore the desert by jeep, horse or camel, or try out archery, falconry and even croquet and room rates to enjoy all this start at Dh823 for weekends in June. Four months later, these start at Dh1,588.

The prices are similar at Qasr Al Sarab Desert Resort by Anantara with 206 rooms where, besides the usual desert activities, guests can choose from desert walks and mountain biking.

Anantara manages four desert resorts: the Anantara Sir Bani Yas Island Al Yamm Villa Resort; the Al Sahel Villa Resort; Desert Islands Resort and Spa; and Qasr Al Sarab Desert Resort by Anantara in Liwa.

At the 101-villa Banyan Tree Al Wadi Hotel in Ras Al Khaimah rates start at Dh1,589 in June, compared with Dh2,000 in October.

The three-star Tital Liwa Hotel on the edge of Rub Al Khali, or the Empty Quarter, in Al Gharbia is the only mid-market property for the discerning tourist. Rates at its 66 rooms start at Dh599.

The usual target audience for desert resorts during this time is domestic visitors, who look for “staycations” closer to home.

“[But] we continue to target guests from Europe such as the United Kingdom or Germany, as well as the domestic UAE market and the wider Gulf market,” says Mr. Soueid.

Mr. Silvis says his property targets mainly expatriates living and working within the Gulf countries as well as the Gulf nationals.

“Many of these guests are looking for a nice weekend break away from the cities and the desert resort provides an ideal escape from everyday routine; the climate is also much more favourable in the desert with less humidity,” he says.

“International guests are less inclined to travel to the warmer parts of the world in summer, so we have to focus our attention on the local market.”


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DUBAI PROPERTY PRICES COOL IN

FIRST QUARTER AS GOVERNMENT

ACTIONS TAKE EFFECT

MONDAY 02 JUNE 2014

Dubai home prices, which rose the most in the world over the 12 months through March, slowed in the first quarter after financial authorities took steps to cool the market, broker Knight Frank LLP said.

Values gained 3.4 percent in the emirate, slowing from 9.2 per cent a year earlier and putting Dubai behind Lithuania, Estonia and Malta for the quarter, London-based Knight Frank said in a statement. Dubai homes climbed 27.7 per cent during the 12 months through March, far outstripping China’s 17.5 per cent gain.

Dubai financial authorities have been trying to tame a market that has lurched between boom and bust since it was opened to foreign buyers in 2002. The UAE Central Bank has restricted mortgage lending and the Government doubled transaction fees as rapid price increases sparked concern that a bubble was forming.

Home values worldwide increased 0.6 per cent in the first quarter, compared with a 1.2 per cent gain in the previous three months, a Knight Frank index of 54 countries showed. Prices in the countries tracked climbed by an average of 7.1 per cent over the 12-month period.

“The final quarter of the year often sees a peak in sales,” Kate Everett-Allen, head of international residential research, said in the report. “Buyers rush to complete sales before the New Year when new tax rules often come into effect, leading to a quieter market in the first quarter.”

The worst-performing markets over the last 12 months were Croatia with a 9.7 per cent drop, Cyprus, which fell 8.7 per cent and Greece, where prices were 8.4 percent lower. It’s the first time since 2008 that none of the countries tracked fell by more than 10 per cent, according to Everett-Allen.


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DEADLINE APPROACHES FOR LICENSED

HOLIDAY HOMES IN DUBAI

MONDAY 02 JUNE 2014

Dubai holiday homeowners have just two weeks to comply with new rules requiring them to let their properties through newly established licensed operators.

Acting on a December decree, the Dubai Department of Tourism and Commerce Marketing (DTCM) will initially accept applications from operators who want to manage 20 or more holiday homes in their portfolio.

Holiday homeowners will need to let through one of these licensed groups. The DTCM did not disclose the costs involved of applying for a licence.

Only licensed operators will be allowed to manage residential properties as holiday homes from June 15.

The law applies to those who want to turn their furnished residential properties into holiday homes as an alternative form of rental income. They should be leased out as a whole unit on a daily, weekly, monthly or annual basis. Such properties will not require the Ejari tenancy contract.

“Visitors booking their accommodation through licensed operators will have the assurance that the accommodation they are booking has been classified in line with global best practices,” said Khalid bin Touq, the executive director of licensing and classification at DTCM. “Owners of properties will benefit from the expertise and marketing capabilities of the operator.”

The licenses will be granted in select areas, according to the December decree, and will classify these properties as either “standard” or “deluxe”.

Operators are being asked to apply for initial approval, following which they have three months to align their services and the properties, according to the requirements for the final approval.

The directive would help to regulate the holiday homes market, said Filippo Sona, the head of hotels at Colliers International’s Dubai office.

Currently there is no contract between the property owner and the guest to safeguard the rights of the individuals involved.

“The licensing was born out of a need to regulate, monitor, control and safeguard the tourists and make sure the offerings are safe,” he said. “Consumers can be assured the property is inspected and there is a quality guarantee. Some property owners may not like it because fees and charges can take away some of their profit, but if licensed they can also charge more money.”

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The concept of holiday homes in Dubai has been around for the past 15 years, coinciding with the rise of the tourism and real estate sectors, especially in the new areas of Dubai Marina and the Palm Jumeirah.

Holiday homes have grown throughout the emirate in recent years and have become especially popular with large families as an alternative to what can be prohibitely expensive hotel accomodation.

Four-bedroom villas for a five-day stay currently rent for more than Dh25,000 on the Palm Jumeirah, according to MyDubaiStay.com, which also lists holiday homes for rent in Downtown, Dubai Marina, Jumeirah Lakes Towers and Jumeirah Beach Residence.

Imran Latif, who started My Stay Group and MyDubaiStay.com in 2005 and now manages about 100 apartments and villas for the owners, agrees.

“The law has been in consultation since 2010 so it’s good news that it is now released, and the industry is properly recognised. Owners and guests can be assured they will only be dealing with professionals officially licensed by the DTCM [as] Dubai continues to grow as the hub for tourism in the Middle East,” Mr. Latif said. “This announcement will help to further regulate the property industry for holiday homeowners in Dubai.”

“Some people were charging high rents and services such as how often it is cleaned and where it is located were left at the discretion of the owners,” said Mario Volpi, the managing director of Prestige Real Estate in Dubai.

The regulation is expected to bring in professional players and standardise the holiday homes market besides increasing the accommodation offerings in Dubai.

“Dubai is building a lot of touristic attractions but there are not enough hotel rooms, and it takes three or four years to build a hotel,” Mr Volpi said. Around 10 per cent of the company’s portfolio can be classified as holiday homes.

Almost all real estate companies have a small portion of their portfolio in the holiday homes market. Dubai has more than 2,000 registered real estate brokers and 184 property management companies.


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STOP COLD-CALLING HOMEOWNERS,

DUBAI BROKERS TOLD

MONDAY 02 JUNE 2014

Property brokers were warned by the Real Estate Regulatory Agency on Monday: stop cold-calling homeowners or risk a heavy fine.

The regulatory arm of the Dubai Land Department, Rera, issued the warning following complaints from residents who were disturbed by unsolicited calls from brokers asking about their property.

The letter, written by the real estate inspection department and sent to all registered property brokers in Dubai, said direct telemarketing phone calls breached regulations.

Fines of Dh50,000 have been levied on three property offices that persisted with the phone calls despite warnings. “After looking at the complaints in detail we sent a warning letter to 20 real estate offices in Dubai,” said Yousif Al Hashimi, Rera’s deputy chief executive.

Homeowners have long complained of phone calls and emails from brokers asking them to sell their property.

Several residents had approached developers to insist that their contact details were not given to property houses.

Despite a 2011 Central Bank ban on banks from marketing products through telemarketing calls, unsolicited telemarketing for financial services is widespread.


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YAS ISLAND APARTMENT SALE DRAWS

ENTHUSIASTIC RECEPTION IN ABU

DHABI


Investors crowded into the breakfast room of the Crowne Plaza hotel to snap up the first residential units for sale on Yas Island yesterday.

While there was a mix of local and expatriate investors for Aldar’s first property sales available for non-UAE nationals on the island, the going appeared slower than the company’s last sale of Al Hadeel units.

The developer did not disclose how many units were available for sale yesterday but said that all of them had been sold.

All 223 off-plan Al Hadeel units, which included studios, apartments, town houses and duplexes, were sold off in the first couple of hours in last month’s event.

Earlier an Aldar spokeswoman said yesterday that the response for the off-plan 540-unit Ansam project was “quite good”.

At 10am – two hours after the sale opened – the number of potential buyers in the halls milling around the juice and croissant stands was about 300, with 75 already having been to the sales counter.

About 2,000 people had registered their interest for the project at Abu Dhabi’s Cityscape exhibition in April and on the developer’s website.

Aldar launched the first phase of Ansam apartments overlooking the Yas Links Golf Course at prices ranging between Dh723,000 for a studio and Dh3 million for a three-bedroom apartment.

The construction of the units is due to start early next year and is expected to be complete in 2017.

The second phase of Ansam will include 1,200 apartments but its release date has not been announced.

Investors can acquire up to five units, but that must be a mix of studios and apartments.

“There is a good market for the right product because there has been a shortage of off-plan sales in investment areas in Abu Dhabi,” said Craig Plumb, the head of research at JLL’s Dubai office.

“Part of the problem with the Abu Dhabi property market is that there are still few investment zones where foreigners can buy and that limits the options.”

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Expatriate investors in Abu Dhabi are restricted to nine areas such as Saadiyat Island, Al Raha Beach, Reem Island, Masdar, Lulu Island and Sowwah Island to own 99-year leases, according to the Abu Dhabi 2030 Plan.

Abu Dhabi properties have been relatively cheaper than Dubai’s since late 2012. “Prices will continue to rise in Dubai, therefore encouraging people to see Abu Dhabi as a good value,” Mr Plumb said.

While there are no restrictions on how long an investor needs to wait before reselling units, at least half of the purchase price must be paid to Aldar before they can be resold. The Dubai developer Emaar requires buyers to pay 40 per cent of the home value before resale is permitted.

Aldar’s next announced project is on Nareen Island, where it hopes to sell 140 villa plots to Emiratis. The island is located near the Emirates Palace hotel in Al Bateen.

The company has 23 developments under consideration, including the Alghadeer development near the Dubai 2020 Expo site.


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WRITEDOWN HITS BOTTOM LINE FOR

TDIC WITH LOSS OF DH1.13BN

TUESDAY 03 JUNE 2014

Abu Dhabi’s Tourism Development and Investment Company lost Dh1.13 billion last year amid a writedown of more than Dh600 million on hospitality assets.

In a filing of its accounts for last year with the London Stock Exchange on Monday, TDIC said it had agreed to write down Dh658.4m on the sale of hospitality assets for Dh948m. It did not specify what the hospitality assets were.

Construction costs for the developer of Saadiyat Island surged last year. The construction cost of residences there is listed at Dh1.93bn in the London filing, under the heading of direct costs from residential sales. The previous year, similar costs were reported as Dh203 million.

Still, TDIC narrowed its annual loss from Dh2.15bn in 2012. The company, established in 2006, also reported losses in 2008, 2009 and 2010.

TDIC reported revenues of Dh3.5bn, up from Dh1.26bn the previous year.

TDIC’s construction of Saadiyat residences, which include apartments and villas, started in 2010 and was completed in October 2012.

Of the six buildings, which have a total of 495 one to four-bedroom apartments, four were sold last year and one was sold this year. The sixth has not yet been sold.

A TDIC representative credited “strong market demand” for the sale of apartment units.

The units were on sale for anywhere from Dh1.9m to Dh3.7m on property websites.

The units were sold to Emirati and GCC residents. Expats can take a 99-year lease. The Residences at the St Regis Saadiyat Island Resort has 32 four and five-bedroom villas starting at Dh14.8m. Ninety per cent of the villa inventory has been sold.

The builder of the Louvre and Guggenheim on Saadiyat has increased its bank borrowings to Dh9.05bn over Dh4.89bn the previous year. TDIC has a sukuk repayable on October 21 and has another US$1bn conventional bond maturing in July.

“We have lined up sufficient capital to handle our $ 2bn in bond maturities and fund the company’s ongoing operations,” the representative said.

TDIC said it has been finalising “two separate financial arrangements” ahead of the bond maturing dates this year “aiming to have all documents in execution form in order to comfortably close before the

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maturity dates of the $1bn sukuk”. But it has not signed any new financing this year. It could sell one of its assets, which include a five-star hotel, residential apartments, villas and a retail district.

During the year, TDIC transferred the Al Sahel and Al Yamm lodges on Sir Baniyas Island, with a book value of Dh302.8m, to its parent company TCA Abu Dhabi. It also transferred the ownership of the Dh150m military museum land near the heritage Maqta Fort to Abu Dhabi Municipality.

Last year, it pledged the Eastern Mangroves Marina building, with a book value of Dh242m, to Union National Bank against a loan of Dh91.6m.

In 2012, TDIC transferred to TCA Abu Dhabi some of its hospitality assets – Qasr Al Sarab hotel, Desert Islands Resort and Spa on Sir Baniyas Island as well as the Manarat Al Saadiyat visitors’ centre and Fanr Restaurant on Saadiyat Island – with a total book value of Dh2.1bn. The aim was to convert loans into government grants.

In March, it announced it would sell a Saadiyat beach plot for Dh300m, on book value of Dh88m. The plot could be used to develop a hotel and branded residential units.


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BANKS OPEN UP TO UAE’S BOOMING

PROPERTY SECTOR


Banks are increasing exposure to the UAE’s booming real estate industry and betting that, five years after property values slumped and non-performing loans soared, this time it will be different.

Lending to the construction segment climbed 40 per cent to Dh181 billion last year, according to the latest central bank data, the most since 2008, when loans jumped 81 per cent. Emaar Malls Group, a unit of Emaar Properties, raised US$1.5 billion in Islamic financing last month, the company said on Sunday.

Banks’ non-performing loans grew to between 10 and 12 per cent after the 2008 credit crisis as property prices crashed by more than half. Real-estate values in Dubai increased at the fastest pace in the world last year, while bank lending growth accelerated to the quickest in five years.

“You can see in terms of business practices that things aren’t as hairy as they were in 2008,” said Raj Madha, an independent regional banking analyst in Dubai. Back then “people were selling buildings, then looking for ways to build those buildings. We haven’t seen that come back yet”, he said.

Borrowing costs have tumbled, with the yield on Emaar’s Islamic bond due in 2019 falling 99 basis points this year to 3.46 per cent on Friday. That compares with a 56 basis-point drop to 4.04 per cent for Middle East bonds, according to JP Morgan Chase indexes.

Real-estate prices in Dubai increased 35 per cent last year, the biggest jump globally, according to Knight Frank. The Central Bank has imposed mortgage caps and lending limits in a bid to help protect banks from a repeat of the property crash, when values declined as much as 65 per cent from their peak.

The emirate and its entities borrowed more than $110bn to become a commercial and tourism hub before 2008, with developers relying on bank lending and advance sales of unbuilt properties to propel the world’s fastest-growing real-estate market.

“Anytime you have a dramatic increase, there’s always a question about the quality of that lending,” Mr Madha said.

Some of the increase in construction-related loans last year recorded in the government figures was because of a reclassification of exposures, according to a Standard & Poor’s report last month. Still, S&P expects the growth in lending to continue because real-estate developers are starting big new projects, the report said.

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Dubai will spend more than $8bn on roads, a railway extension and new buildings as it prepares to host the Expo 2020 global trade fair. Abu Dhabi is building a new port, attractions including Louvre and Guggenheim museums, and expanding its airport as it tries to diversify its economy away from oil.

Banks are a lot more cautious after the crash “so they won’t be aggressively lending, at least at this stage”, said Chiradeep Ghosh, a Bahrain-based senior analyst at Securities & Investment. “As long as real-estate prices remain steady, it shouldn’t translate into non-performing loans.”


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DAMAC HOPING TO TEMPT BUYERS

INTO DOUBLING UP WITH TWO-FLAT

DEALS


The Dubai property developer known for enticing investors with the promise of free yachts, speed boats or jet skis when they buy a luxury flat is hoping to attract buyers with the offer of cheap deals for people buying two flats.

This summer Damac said it was offering buyers the chance to buy two apartments in developments in Business Bay, the Burj area, Dubai Marina, Dubai World Central and Dubailand, at prices starting from Dh 1.4 million.

The company, which is known for its glitzy advertisements on Dubai billboards, said that the offer included units in two different locations for schemes including its Naia hotel apartments in Jebel Ali, homes at its Akoya golf course project in Dubailand, hotel apartments at its Paramount Hotel project at Jumeirah Waterfront at Maritime City and its project at Dubai World Central.

“Damac Properties is well known for bringing fresh and exciting offers to the market during the summer promotions in Dubai,” said Niall McLoughlin, the senior vice president at Damac Properties. “We have a wide array of units in prime locations all across the city and are in a unique position to present investors with a package of units at a very attractive price point.”

Damac did not say exactly which of the properties would be included in the Dh1.4m deal.

With the luxurious penthouse at Damac’s recently completed Damac Maison block of hotel apartments on the market for Dh14.8m, the offer could seem tempting.

However, Damac launched sales at its Tenora hotel apartment project in Dubai World Central last December with prices starting at Dh610,000.

This promotion is not the first time Damac has offered extravagant perks to property buyers.

In 2012 the developer offered anyone buying a Damac property a Sea-Doo jet ski, a Monterey cruiser or an Azimut yacht, In 2005, the developer threw in Audi and Porsche cars with apartments purchased in one of 13 upscale developments.

“To anyone tempted by this offer I’d advise them to be a little sceptical,” said one Dubai estate agent who asked not to be named. “Developers are not stupid and run these sorts of offers to make money. I’d be surprised if any of these apartments are really being sold at a significant discount.”


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NAKHEEL TO HIRE 250 ESTATE AGENTS

FOR NEW COMPANY IN DUBAI


Nakheel plans to hire 250 estate agents to work for a new company selling Dubai homes.

The palm island developer has teamed up with Germany-based real estate Brokerage Company Engel and Völkers (E&V) to establish a new company.

“Dubai is witnessing an enormous growth in population numbers because of its high quality of life and its geographical location between Europe and Asia,” said Christian Völkers, the chief executive and founder of Engel & Völkers. “That goes hand in hand with a higher demand for top-end property.”

The world’s best performing property market in the year to March has created a feeding frenzy for property brokers as prices approached levels last seen during the 2008 market peak.

But growth has slowed this year following a series of measures aimed at curbing property inflation and averting the risk of another bubble. Home prices tumbled by more than half in the emirate in the wake of the 2008 crash. Property prices gained 3.4 per cent in the first quarter, down from 9.2 per cent growth a year earlier according to Knight Frank.

“There were significant increases in unit prices in Q4 2013 following news of Dubai’s Expo 2020 win and we saw deals flounder as sellers with genuine offers decided to wait in anticipation of further growth,” said John Stevens, managing director of Asteco, the property broker. “Transactions slowed down in established communities where surging prices went beyond what buyers were willing to pay.”

Trading under the E&V brand, the new joint venture expects to open its new Dubai office by October 1, 2014.


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ALDAR REPAYS $1.25BN BOND,

SLASHES INTEREST PAYMENTS


Aldar Properties has repaid a US$1.25billion bond helping the Abu Dhabi based developer to slash annual interest payments by Dh700 million compared with last year.

The bond, which matured at the end of May 2014 and which carried an initial annual interest cost of 10.75 per cent was repaid using company cash reserves and existing loan facilities which carry an annual interest cost of 1.7 per cent, Aldar said in a statement today.

Aldar’s overall cost of borrowing has fallen 70 per cent from Dh1 billion a year to Dh300 million the company said while its weighted average cost of debt has fallen has fallen from 5.8 per cent before the bond repayment to 2.8 per cent.

Aldar was hit hard by the global financial crisis when property prices in the capital fell by as much as half prompting agencies such as Moody’s to downgrade its ratings status to “junk” in 2010 and pushing up its cost of borrowing as investors feared for the safety of their cash.

However, since then the company’s outlook has improved steadily, benefitting from major asset sales to the Abu Dhabi Government, a government endorsed merger with rival property company Sorouh and a recent uptick in the Abu Dhabi property market.

Aldar reported yesterday that since completing its merger with Sorouh in June last year, the company has reduced its gross debt from Dh14.2bn to Dh10.1bn.

At the end of May this year Aldar said it held cash worth Dh3.8bn and Dh 40.7bn worth of assets, including 77 square miles of development land.

“Our strategy to continue deleveraging the business and reduce the company’s annual interest payment is well advanced,” said Greg Fewer, Aldar’s chief financial officer. “Thanks to our refinancing initiatives the company will now pay Dh700 million less annually to service our debts - a reduction of 70 per cent over just one year. We continue to remain focused on deleveraging the business and optimising our cost of capital.”

Last month Aldar returned to the off plan sales market after an absence of four years as the company announced three new projects in Abu Dhabi worth a total of Dh5 billion.

The company plans to start selling off plan flats at its Ansam project – its first major apartment scheme on Yas island – on Saturday.

Aldar added that it was assessing 20 other development projects in Abu Dhabi emirate and plans to launch at least two new schemes every six months.


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ABU DHABI PROPERTY INVESTOR

TASWEEK AIMS FOR DH1 BILLION IPO

IN DECEMBER


The Abu Dhabi-based property investor Tasweek expects to launch an initial public offering of its shares by December.

The Dh1 billion private company founded by the former Emaar and Sorouh executive, Masood Al Awar, confirmed yesterday that it was looking at listing 55 per cent of its shares on either the Abu Dhabi Securities Exchange or the Dubai Financial Market by the end of the year.

Tasweek, which is owned by 53 Emiratis and operates a US$250 million property portfolio spread across the UAE, Malaysia and Morocco, said it was talking to the law firms Tamini and Simmons & Simmons and brokers from National Bank of Abu Dhabi, Shuaa Capital, Abu Dhabi Commercial Bank and The National Investor regarding the offering.

The company added that it expected to appoint a financial adviser for the float at the end of this month.

“We are an Abu Dhabi company, so the probability is higher that we will list in Abu Dhabi, but we don’t want to make that commitment right now,” Mr. Al Awar said.

Speaking at an event to promote the company’s Smart City Living conference in Dubai, Mr Al Awar added that the company was also talking to the consultants Deloitte and PwC regarding the float.

Tasweek, which was set up in 2009 to invest in distressed property in Dubai and Abu Dhabi, said that it was evaluating which parcels of land it owned would be included in the listing.

Tasweek’s decision to list comes on the back of a spate of recent IPOs from UAE companies, including the Dubai developer Damac, which listed its shares in London in December, and Emaar Properties, which announced in May it had received approval from the Securities & Commodities Authority to float 25 per cent of its malls division on the DFM.

“As UAE markets have rallied, so valuations are becoming very attractive to companies looking at IPOs,” said Sebastien Henin, the head of asset management at The National Investor. “Demand for real estate is also back in the UAE, so from a business point of view real estate developers are looking for ways to finance new projects. So it is not surprising that we are seeing more real estate companies looking at IPOs.”


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ARABTEC SHARES RISE AS CHIEF

OVERTAKES AABAR AS LARGEST

SHAREHOLDER

THURSDAY 05 JUNE 2014

Arabtec shares were lifted yesterday on news that its chief executive had increased his personal shareholding in the company, making him the single largest investor in the builder of Burj Khalifa.

Hasan Ismaik’s stake in the construction firm climbed to 28.84 per cent from 20.51 per cent previously, according to data published yesterday on the Dubai Financial Market.

The acquisition means that Mr Ismaik is now the single largest shareholder in the company, overtaking Aabar, the Abu Dhabi investment fund.

Arabtec announced on May 29 that Mr Ismaik had increased his stake to 21.46 per cent from 8.03 per cent.

Mr. Ismaik’s stake was subsequently reported to have fallen to 20.51 per cent on Monday. No explanation was given for the decrease.

Arabtec’s shares closed up 2.55 per cent in Dubai yesterday at Dh6.43 each.

Aabar holds a 21.57 per cent shareholding in the company via four subsidiaries, after a series of share purchases in 2012. Arabtec said in March last year that the fund would not seek to further increase its stake in the company.

Mr. Ismaik joined Arabtec in August 2012 and was appointed CEO in February 2013. He is one of five individuals on Arabtec’s nine-person board brought in by Aabar.

An Arabtec statement issued after Mr Ismaik’s stake increase last month said that the move was a vote of confidence in the company, and was designed to reduce volality in the company’s share price.

However, one UAE-based analyst, requesting anonymity, said the move could signal a number of things.

“I’ve never seen a CEO buying up a 20 per cent stake of a company of Arabtec’s size in a single week,” the analyst said.

“You could take the move at face value and say that it’s because he believes the stock is undervalued. On the other hand you could read it as a move to keep the share price high, and to accumulate shares to use as currency for a possible future merger or acquisitions.”

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Arabtec shares have more than trebled in value since the start of the year, benefiting from the accelerating pace of construction in the UAE and the prospect of contracts in Egypt.

However the company’s shares have endured a volatile month, shedding 9 per cent of their value in the first full week of trading after the announcement of their inclusion in MSCI’s Emerging Markets Index in mid-May, before recovering much of their value in the past two weeks.

Mr. Ismaik’s stake increases may have been accompanied by other share purchases by other Arabtec or Aabar officials, in a move to shore up control of the company, the analyst speculated.

An Arabtec spokesman declined to comment.


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With 29 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, Jordan 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]

Julia Knibbs MSc

Manager – Research and Consultancy - UAE +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.

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