news brief 45 - asteco property management€¦ · such as nurseries, community centres and...

DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN © Asteco Property Management, 2015 asteco.com | astecoreports.com

IN THE MIDDLE EAST FOR 30 YEARS

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 45 SUNDAY 15 November 2015





REAL ESTATE NEWS UAE

WHY INVEST IN DUBAI: PROPERTY RETURNS BEAT LONDON, NEW

YORK DUBAI

DUBAI PRIVATE SECTOR GROWTH HITS FIVE-YEAR LOW AMID ‘TRAVEL AND TOURISM CONTRACTION’

DUBAI PARKS AND RESORTS LOSSES WIDEN BUT PROJECT ON TRACK NAKHEEL TRIPLES RETAIL SPACE IN DRAGON MART WITH OPENING OF

EXTENSION AL BARARI ‘TROPHY HOME’ ON THE MARKET IN DUBAI FOR DH49M

WOULD YOU BUY A UAE HOUSE THAT HAD BEEN BUILT BY ROBOTS? JUMEIRAH CEO HINTS AT BURJ AL ARAB EXPANSION DUBAI RENTS FALL 2% IN Q3 AS 2,000 NEW UNITS ENTER MARKET

DUBAI SEES RATE OF PROPERTY PRICE DECLINES SLOW IN Q3 DUBAI DEVELOPERS PROMOTE DUBAI INVESTMENT OPPORTUNITY TO

INDIANS DUBAI DEVELOPERS WAIVE 4% PROPERTY REGISTRATION FEE

DH10,000 FINE FOR NOT REPORTING INJURIES AT WORKPLACES 7 GOOD REASONS FOR INDIANS TO BUY PROPERTY IN DUBAI

ABU DHABI ABU DHABI'S SHAKHBOUT CITY WILL HOUSE 80,000 RESIDENTS

EXECUTIVE TRAVEL: ST REGIS ABU DHABI CORNICHE OFFERS STUNNING VIEWS AND YOUR OWN BUTLER

DUBAI-BASED MAN INVESTMENTS IN REGIONAL TIE-UP WITH EASYHOTEL OPERATOR

YAS MALL AIDS SURGE IN PROFIT AT ABU DHABI’S ALDAR PROPERTIES IN Q3

ABU DHABI TENANT’S EIGHT-MONTH WAIT FOR DEPOSIT RETURN

GOES ON ARABTEC BROUGHT LOW AS SHARES TUMBLE ON FRESH LOSSES

REEM MALL LOOKS TO APPOINT MAIN CONTRACTOR BY MARCH NORTHERN EMIRATES

ECONOMIC DIVERSITY HELPING RAS AL KHAIMAH WEATHER OIL PRICE SLUMP

RAK VISITOR NUMBERS REACH HIGHEST LEVEL YET IN THIRD QUARTER

OTHER

CHINA, US AND INDIA TO LEAD GLOBAL CONSTRUCTION MARKET TO $15.5 TRILLION BY 2030





ABU DHABI'S SHAKHBOUT CITY WILL

HOUSE 80,000 RESIDENTS

TUESDAY 10 NOVEMBER, 2015

The master plan for the development of Shakhbout City, featuring additional housing for residents and

community facilities such as parks, mosques, schools and hospitals, has been completed by the Abu

Dhabi Urban Planning Council (UPC).

The master plan has now been formally handed over to Abu Dhabi City Municipality (ADM) for

implementation.

The completion of the master plan is the result of close collaboration between the UPC and all

government stakeholders, including the ADM, Abu Dhabi Education Council, the Health Authority -Abu

Dhabi, General Authority of Islamic Affairs and Endowments, Abu Dhabi Distribution Company and Abu

Dhabi Housing Authority.

Shakhbout City, formerly known as Khalifa City B, is a major residential development on Abu Dhabi

mainland, approximately 30 kilometres from the Abu Dhabi Island central business district, north-east of

Mohammed Bin Zayed City and south of Abu Dhabi International Airport.

Covering a total area of 1,854 hectares, the master plan incorporates much needed community facilities

for residents in a strategically important area close to Zayed City, the new seat of Federal Government

and location for federal ministries and foreign embassies.

While Shakhbout City is anticipated to be home to approximately 80,000 residents in the future, there

is already an established community in Shakhbout City and the master plan has been designed to

sensitively revitalise its existing neighbourhoods, including the streets and amenities, in addition to

adding new public realm and community facilities. The UPC has taken on board feedback from

Shakhbout City’s residents to ensure the master plan incorporates their requirements, where

appropriate.

In line with feedback to provide UAE National housing, the master plan also incorporates the allocation

of 323 additional UAE National housing plots, as well as a “district park” in Shakhbout City’s business

centre. In addition, plots for commercial buildings, government service centres and community facilities,

such as nurseries, community centres and cultural associations, have also been planned.

The master plan is in line with the vision outlined in the UPC’s Plan Capital 2030, ensuring that all

residents enjoy a high standard of living, within easy reach of good quality community facilities.

Abdulla Al Sahi, Acting Executive Director, Planning and Infrastructure, UPC, said: “Shakhbout City is a

vital component of the UPC’s vision to create sustainable, attractive neighbourhoods for all Abu Dhabi

residents. It’s strategically important because we envision it becoming a ‘feeder’ community for Zayed

City, offering residents attractive employment and leisure opportunities within a short commute.





“The updated master plan makes provision for the kinds of facilities outlined in our complete

sustainable communities (CSC) initiative which guides our strategy for ensuring all residents of Abu

Dhabi enjoy easy access to facilities that enhance their quality of life. Shakhbout City is an excellent

example of the UPC’s approach to creating revitalisation plans for existing communities, in addition to

plans for new communities, to ensure a balance of facilities across the emirate.”

The ADM will now take the Shakhbout City Master Plan through to completion. It is currently proceeding

towards enhancing the infrastructure components in accordance with its vision to create a modern

infrastructure system that will be able to cope with usage projections.

To do so, the ADM is carrying out a study to evaluate the differences between the existing and required

infrastructure in order to define the work needed to complete all public service networks, including

telecommunications, sewage and rainwater drainage, irrigation and underground water networks.

Furthermore, the master transportation plan will be finalised by the end of 2015. This plan defines the

required street expansion that will ensure an optimised traffic flow, in addition to enhancing the

entry/exit points to and from Shakhbout City and connection points with highway networks.

The ADM has also assured that the major infrastructure projects in Shakhbout City will include the

development of streets and infrastructure of the commercial strip. The infrastructure design works have

been completed and the implementation works are anticipated to commence in third quarter 2016.

As for the plots to be added in Shakhbout City, the ADM noted that the implementation of such projects

is anticipated to commence in first quarter 2017. It also intends to commence a number of infrastructure

package projects, with the scope of completing all infrastructure works and public service networks,

including the improvement of streets and intersections by adding traffic signals, along with landscaping

for all main streets.

As soon as the master transportation plan is finalised, it is planned to commence the design works of

these projects during 2017. However, the implementation works will start in 2018 and will be completed

over a three-year time frame.

The ADM stated that it has a plan for the next five years, including the development of 29 parks,

divided amongst seven construction projects, which includes Shakhbout City. The first project is for four

parks, whose implementation works are anticipated to commence in fourth quarter 2016. The second

project is for four parks, whose implementation works are anticipated to commence in fourth quarter

2017.

Source: Emirates 24/7

Back to Index





7 GOOD REASONS FOR INDIANS TO

BUY PROPERTY IN DUBAI

THURSDAY 05 NOVEMBER, 2015

Indians have been investing billions of dirhams in Dubai’s real estate market for years now, assured of

higher yields, capital appreciation and a status symbol of being part of the world’s most dynamic city.

In the first nine months of 2015, Indians have invested Dh713billion, topping the list of expatriate

buyers in Dubai’s realty market, with Emirates 24/7 calculations putting the figure at Dh57 billion since

2012 to September 2015.

For the first time, 35 property developers such as Emaar Properties, Nakheel, Dubai Properties, Deyaar

Development, Meydan Sobha, Damac Properties, Jumeirah Golf Estates, etc., are going to Mumbai from

November 6 to 8 to showcase their products under one platform under the Dubai Property Show.

“The characteristic Indian mindset of solidifying assets in multiple arenas compliments the dynamics of

Dubai real estate that offers a number of options to buyers to accommodate their budget and

preferences. Recent trends of purchasing properties in locations such as Downtown Dubai, Dubai Marina,

Jumeirah Lake Towers and The Palm also suggest that the buyers are looking at profitable dividends in

the shape of rents and resale value,” said Sumansa Exhibitions President Sunil Jaiswal.

Here are reasons why Indians should look at buying a property in Dubai.

1 # Cheaper prices

Property prices in Dubai have declined in 2015 driven by slowing sales volume. But experts say time is

right for investors to buy property here as they stand to get good bargains on ready as well off-plan

properties. According to Knight Frank, $1 million buys just 96 square meters of land in Mumbai, while

the same amount fetches 145 square meters of property in the emirate.

2 # Lucrative yields

Rental yields in India range between 2 and 3 per cent, while Dubai offers a high rental return. Falling

prices make the investment lucrative, as rentals have remained stable with influx of residents. Yields

range from seven to eight per cent even after paying service charges on the unit.

3 # Assured capital gains

Prices in Dubai may be dipping, the UAE is among the fastest growing economies in the world. Dubai is

working on mega infrastructure projects and is the host city for Expo 2020, which will lead to influx of

visitors. Experts believe capital appreciation in the run up to 2020.

4 # Tax-free return





One of the prime incentives for investors here is that there is no tax on rental income, while in India one

has to pay tax on rental income. Thus the tax-free status and easy repatriation policies makes it

profitable for Indians to buy and rent the unit.

5 # Save and secure

The UAE is among the safest and most secure countries in the world. The emirate has business-friendly

laws and allowing investors to set up companies in just few days. It has been investing billions of

dirhams to upgrade the infrastructure of the city.

6 # Tourist destination

Dubai has one of the best skylines in the world. It is home to Burj Khalifa, the world’s tallest tower,

where a number of Indians own apartment. With an expected 25 million visitors by 2020, property

owners are allowed to lease their units, after taking permission from Dubai’s Department of Tourism and

Commerce Marketing, as holiday homes, boosting return on investment.

7 # Proximity to India

Finally, Dubai’s geographical location is another major reason for Indians to come to the emirate. It

takes mere 150 minutes to reach Mumbai, India’s financial capital and three hours to reach New Delhi,

India’s capital. Emirates, Etihad, Air Arabia and Air India offer seamless connectively to number of

destinations across India.


Back to Index





DH10,000 FINE FOR NOT REPORTING

INJURIES AT WORKPLACES

WEDNESDAY 11 NOVEMBER, 2015

Dh10,000 fine will be imposed on companies which fail to report occupational injuries, the Ministry of

Labour (MOL) announced on Wednesday.

Any work related injury, which is serious enough to cause a worker to be absent from work for three

days or more, must be reported to the MOL within 24 hours of the incident.

Occupational injuries includes those during working hours or while commuting from or to a workplace, if

the employee didn’t interrupt or deviate from the usual routine.

A disease caught from one of the listed occupational labour disease agendas is also considered a work

related injury.

The Ministry of Labour urged private sector companies to implement occupational safety and health

standards while on duty and report occupational injuries at once.

Maher Al Obed, assistant undersecretary for inspectional affairs, said; “The ministry’s keenness to

provide a safe working environment for workers comes as a support to avoid occupational injuries and

through the application of innovative standards for occupational safety and health in addition to taking

the necessary steps against the non-complying facilities we shall reach positive outcomes.”

“Facilities that didn’t report occupational injuries, illness or deaths are violating the Cabinet decision No.

40 of 2014 which states a Dh10,000 fine per (non-reported) case, then the Ministry of Labour shall

blacklist the company till they solve the offense,” he added.

Al Obed went on to say reports can be made to the ministry through a hotline 800665, or via e-mail .

The worker’s name, labour card number, property number, date of the injury and a contact phone

number are required for a report to be filed.

In case an injury occurs, the employer must bear the costs of treatment in addition to paying transfer

expenses required for treatments until the employee is able to report back to duty or presents a clear a

statement of a permanent disability.

The official said; “The ministry works diligently towards strengthening commitment to occupational

safety and health measures, all through implementing educational programs for employers to motivate

them to provide all the safety requirements for workers at their workplace and report all injuries a

worker might face, these programmes also target workers to enlighten them about the importance of

adapting to safety measures while working.”

Source: Gulf News

Back to Index





WHY INVEST IN DUBAI: PROPERTY

RETURNS BEAT LONDON, NEW YORK

SUNDAY 01 NOVEMBER 2015

Capital appreciation has been one of the prime reasons for global investors to buy property in Dubai and

now a report from an international real estate consultancy ratifies their decision.

A price comparison of the last five years (2010-2014) for global cities by Knight Frank, the UK-based

consultancy, reveals that Dubai outshines London, New York, Hong Kong and Singapore.

‘The Hub Report 2015’ states prime home prices in Dubai saw an uplift of 59 per cent over the five years

to end-2014 – a better performance than London (52 per cent), New York (47 per cent), Hong Kong (31

per cent), Paris (18 per cent), Singapore (7 per cent) and Sydney (2 per cent).

Since early this year, experts have predicted prices to soften, experiencing a decline of 5 to 10 per cent.

Rents have, however, remained high, offering a rental yield of between seven to eight per cent.

The report said prime home prices fell by 4.5 per cent the second quarter 2015, but the decline was

smaller compared to the mainstream segment’s 12.2 per cent fall.

“Also, the new residential supply pipeline for the prime segment is not significant, suggesting that prices

over the next 12-18 months should maintain a greater degree of resilience,” it added.





Oversupply fears have been quashed by developers in the emirate, with HSBC Global Research also

stating earlier that Dubai may see supply of 90,000 new units by 2018, but the market will absorb fairly

easily all the supply even if the population grows less than five per cent per year.

Safe location

The report emphasised that Dubai remains one of the safest locations in the world, with excellent

connectivity, strong economic prospects, a low tax regime and a stable political system – combined,

these factors will undoubtedly play an important role in paving the way for its success as a global hub.

“Admittedly, the sector has faced some headwinds over the past 12-18 months, however, the wealthy

continue to be attracted to Dubai due to the fact that it remains one of the safest locations in the world,

with excellent connectivity, strong economic prospects, a low tax regime, and strong lifestyle factors,”

Khawar Khan, Research Manager at Knight Frank Middle East, in a press statement.

Moody’s Investors Service, a global ratings agency, has said that government spending on infrastructure

and encouraging foreign investments in various sectors will support the real estate market over the next

five years.

Economy growing

Knight Frank further adds that as per the forecast from the International Monetary Fund the UAE’s

economy will outperform the likes of the UK, US, Germany, Hong Kong and Singapore over 2015-2020.

This, alongside the fact that the federation is among the easiest places to do business globally, should

help to extend Dubai’s lead as a financial and business services hub in the Middle East.





“All else equal, this suggests that tenant demand for good quality, Grade A office space will remain

healthy in the short to medium-term,” it added.

As to the industrial property sector, the consultancy said strong growth over the past decade in

manufacturing and exports have been important drivers of demand for logistics facilities in and around

Dubai.

A number of reasons have supported this, including the excellent quality of the UAE’s transport

infrastructure and the emirate’s strategic location between Europe, Africa and the Far East, The Hub

Report said.

Holiday destination

Dubai continues to make strides as a tourist destination and an air travel hub with visitors to the

emirate staying longer to enjoy the city’s attractions, with the average length of stay rising from 2.6

nights in 2004 to 3.8 nights in 2014.





Moreover, Dubai International overtook London Heathrow in 2014 to become the world’s top airport for

international passenger traffic given.

James Lewis, Head of Knight Frank Middle East, added: ‘‘Unsurprisingly the impact on real estate has

been positive, with higher levels of occupier demand being generated across the office, industrial and

hospitality sectors, respectively.

“Moreover the emirate has established itself as a safe, family-friendly and low tax environment – which

combined with its connectivity to other global centres – has been attracting the world’s growing

population of high-net-worth individuals. Naturally then, demand for luxury residential property has

been gathering momentum.”


Back to Index





DUBAI DEVELOPERS WAIVE 4%

PROPERTY REGISTRATION FEE

TUESDAY 03 NOVEMBER 2015

Dubai property developers are waiving off four per cent property registration fees in order to attract new

buyers to their off plan or under-construction projects, ‘Emirates 24|7’ can reveal.

Azizi Developments, which is building a number of residential projects in Al Furjan, will be paying the

four per cent registration fee for buyers in some of its projects in Al Furjan.

“We will be paying the registration fee, or Oqood, for new buyers in some of our projects and the offer

will be valid for the first week of November 2015,” a company spokesperson told this website.

Gulf General Investment Company (GGICO) states on its website that it will pay four per cent

registration fee for apartments in its Topaz Residences in Dubai Silicon Oasis but the fine print, however,

states it is ‘limited to Topaz Residences 3 new purchases’.

“Construction has reached over 20 per cent with ongoing progress in a community with complete

infrastructure,” the developer said, adding, it is offering affordable payment plan (35 per cent before

completion and 65 per cent after completion over three years.)

Partial payment

Union Properties will also be paying half of the four per cent property registration fee on behalf of the

buyers in its Green Community West phase three.

“We will be paying two per cent of the registration fee on behalf of the investor. Besides, we will be

offering a flexible payment plan of up to 10 years post-handover,” a senior company official told this

website during the launch of the project last week.

Parvez Khan, chairman, Pacific Ventures, confirmed to this website that his company was planning to

offer similar incentive to new investors.

“Currently market is under pressure and so waving of registration fee fully or partially is just promotion

to attract investor as sharing cost puts less burden on investors,” he added.

Despite the lure of saving quite a bit of money, Parvees A. Gafur, Chief Executive Officer, Propsquare

Real Estate advised investors to be cautious.

“Some developers have been offering this incentive on a short-term outlook to boost their sales on off-

plan properties. It has not become a regular trend though. Again buyers have to do their homework well

on the project they are buying into and its offer suits their investment acumen,” he added.

Though earlier only selected developers waived transaction fee, but were mostly offering freebies

ranging from furniture vouchers to new home appliances, from holiday packages to cars.





In August 2015, Lookup.ae, a real estate portal, estimated that 120 new projects were launched in

Dubai in the past 24 months.

In the same month, an analysis by Unitas and Reidin.com on the evolution of off-plan payment plans

found that the price trend has a direct impact on the degree of flexibility offered by developers.

“As prices began to rise in 2013, developers offered aggressive payment plans to buyers. However, as

prices began to dip towards the end of 2014, payment terms begin to get skewed towards the end of

completion,” they said, stating that the degree of flexibility was higher in private sector developers.

In March 2015, Mashreq, a leading UAE bank, said in its Wealth Gauge report that innovative payment

plans were need of the hour as back-loaded schemes, especially for off-plan properties (where

developers were asking for chunk of the payments to be made only after the unit was handed over),

were in demand.


Back to Index





DUBAI DEVELOPERS PROMOTE DUBAI

INVESTMENT OPPORTUNITY TO

INDIANS

SATURDAY 07 NOVEMBER 2015

Hoping to attract Indian investors to Dubai’s real estate market, developers from the emirate played

high on the factors such as safety and security, higher rental yields and on-time project completion at

the Dubai Property Show, which opened in Mumbai, India’s financial capital, on Friday.

Thirty five of the top developers showcased projects worth billions of dirhams at the three-day event,

organized by Sumansa Exhibitions, expecting more investment from the Indian community, which

‘Emirates 24|7’ revealed last week had alone invested a whopping Dh5.2 billion in the emirate’s real

estate market in the third quarter 2015. Their total investment has reached Dh13 billion in the first nine

months 2015.

Even the UK-based consultancy Knight Frank said in March 2015 that $1 million could buy 145 square

metres of prime property in Dubai compared to 96 square metres in Mumbai.

“There is enough motivation to invest in Dubai for investors provided they have got the investable fund

and are looking to diversify their investments,” Sanjay Manchanda, Chief Executive Officer, Nakheel, told

‘Emirates 24|7’.

“Dubai is an excellent place and doesn’t need any introduction especially in Mumbai. The changes in the

regulations have only made sure investor’s interests are protected. Though there would be some swings

and events in the short horizon (one to three years), but fundamental overall long-term situation seems

to be good, sustainable growth,” he emphasised.

Indian investors account for 11 per cent of Nakheel’s customers and so far purchased 4,400 villas,

apartments and land plots with a combined value of $2 billion.

The developer is showcasing projects worth $4.6 billion, which includes Deira Islands and Palm Tower

Residences on Palm Jumeirah, at the event.

Don’t miss out

Yousuf Kazim, CEO, Jumeirah Golf Estates, admitted Indian investors did matter for the Dubai property

market.

“We want to be close to the investors and so we are participating in the event. UAE offers good

infrastructure and value for investment and we don’t want Indians to miss out on the opportunity if they

want to diversify. We are here with the Dubai Land Department, which is an assurance that this event is

legitimate.”





The company is showcasing Alandalus, ‘affordable luxury’ apartment project, with prices starting Dh750

per square feet.

“Investors wanted us to give them apartments overlooking our golf courses. We did listen to them and

offered them Alandalus.”

Currently, 700 families are occupying villas in the master development, which is home to two

championship golf courses. Majority of the investors and residents are from Britain and India.

Marketing tie-ups

AlHarith Bin Salem Al Moosa, Vice Chairman, Falconcity of Wonders, was expecting to tie-up with

investors and local brokerage firms.

“Our expectations are very high and we are expecting to meet people who are directly or indirectly

interested in our project. Dubai offers political stability and an easy access to global and regional

markets, besides boasting one of the lowest crime rates in the world, making the emirate a safe and

secure zone. And all this is offered at affordable prices, all governed, secured, and registered with DLD

to secure your investments”.

Al Moosa, however, ruled out special offers or discounts for investors at the event, adding, “In the long

run our prices and payment plans offer a win-win situation.”

Attractive destination

“Dubai, with its all-encompassing, flexible nature, offers class and comfort at an affordable price, not to

forget excellent quality and a ready infrastructure,” Sultan Butti bin Mejren, Director-General, Dubai

Land Department (DLD), said in a statement.

“This will be particularly attractive to the middle-income group, which will no longer have to choose

between affordability and luxury. Indians have long understood the value of Dubai real-estate – as

evident by their growing investment in the emirate – and they realise the long- and short-term financial

dividends that they can attain.

“This is why Indian nationals continue to rule the foreign real-estate investment chart; in the first half of

2015 alone, they sliced a significant 15 per cent share – the highest in Dubai’s real-estate market by a

foreign nationality,” he added.

Expo 2020 boost

Sultan Al Suwaidi, Partner, Sumansa Exhibitions, organizers of Dubai Property Show, stressed that the

economic activity in Dubai has shown healthy figures as evident by the city’s diversification across

various sectors including finance, logistics, tourism and retail.

“With Expo 2020 round the corner, the economy is certain to improve further which will have direct

effect on rental and resale value of Dubai property. In the last one year, Dubai has reached more than

seven per cent in rental yields in the mainstream property segment, not to forget that returns here are

always tax-free. Office rents in particular, have seen profitable returns; rents were 23 per cent higher in

the Q4 of 2014 than last year.”

Easy payment options





Deyaar Developments showcased its “affordable” Midtown development at International Media

Production Zone and the upscale The Atria at Business Bay.

“We are expecting Indians to invest in Dubai due to the high rental yields and the low mortgage rates

offered by Dubai banks,” company Vice-President Sales Nasser Amer told this website.

He revealed the company is offering a flexible payment plan, with investors able to book a unit in

Midtown by paying as low as Dh10,000, followed by five per cent payment every six months till reaching

30 per cent and the rest, 70 per cent, paid on handover in September/October 2018. It has tied up with

Dubai Islamic Bank to provide finance to investors.

Cash discounts

Tebyan Real Estate Development Managing Director Naji Alia said they will be offering flexible payment

plans and discounts of up to 10 per cent for buyers in its Sparkle Tower in Dubai Marina.

“We will be offering discounts to buyers during the expo, which could go as high as 10 per cent. Property

prices in Dubai have stabilized and it is a good time for Indians to buy with capital appreciation expected

over the years.”

Average prices for the Swarovski-branded project are Dh1,275 per square feet, with handover expected

in December 2016.

The exhibition was inaugurated by Bollywood celebrity Malaika Arora Khan and will run till 8 November,

2015, at Bombay Exhibition Centre. Visitor timing are from 11am to 8pm.


Back to Index





CHINA, US AND INDIA TO LEAD

GLOBAL CONSTRUCTION MARKET TO

$15.5 TRILLION BY 2030

TUESDAY 10 NOVEMBER 2015

The volume of construction output will grow by 85% to $15.5 trillion worldwide by 2030, with three

countries - China, US and India - leading the way and accounting for 57% of all global growth, said a

new report released today.

The benchmark global study - the fourth in a series from Global Construction Perspectives and Oxford

Economics - shows average global construction growth of 3.9% per annum to 2030, outpacing that of

global GDP by over one percentage point, driven by developed countries recovering from economic

instability and emerging countries continuing to industrialise.





"China's share of the world construction market will increase only marginally as growth slows in the

world's largest construction market to 2030. In comparison, US construction will grow faster than China

over the next 15 years - growing by an average of five percent per annum. Meanwhile, we're due to see

a surge in construction rates in India as it overtakes Japan to become world's third largest construction

market by 2021," says Graham Robinson, Executive Director, Global Construction Perspectives.

According to Global Construction 2030 report, China construction growth is to slow considerably with a

slump in housing and the first ever decline in housing output for China will be registered this year.

But, its transition to a consumer and services driven economy provides opportunity for growth in new

types of construction in healthcare, education and social infrastructure, as well as retail and other

consumer end-markets. The abolition of China's one-child policy adds impetus to our long-term view.

The construction market in India will grow almost twice as fast as China to 2030, providing a new engine

of global growth in emerging markets. India's urban population is expected to grow by a staggering 165

million by 2030, swelling Delhi by 10.4 million people to become the world's second largest city.

"Although globally we see construction growing more rapidly than the overall economy, with developed

markets forecast to rebound from their depressed levels, many will not be back to their previous peak

levels even by 2030. The current weakness in most emerging countries is likely to be temporary, with

higher growth rates soon returning," says Mike Betts, Global Construction Perspectives.

In the US construction growth will tilt towards the southern states, reflecting the region's greater catch-

up potential and higher population growth.

"Fed lift-off, expected as early as December, could mean a risk for construction growth in key emerging

markets - Brazil, Russia, Turkey and India - that could all suffer from significant short-term reductions in

growth for construction, with some of these countries potentially halving growth," says Jeremy Leonard,

Director of Industry Services, Oxford Economics.

"Whilst there is an interesting relationship between the top three countries, it is important not to forget

that we see significant weakness in Brazil and Russia, whilst we see extraordinary growth in Indonesia.

In Latin America, we expect Mexico to overtake Brazil, whilst Indonesia will overtake Japan by 2030,

says Jeremy Leonard, Director of Industry Services, Oxford Economics.

Brazil risks a 'lost decade', as the stranglehold of excessive bureaucracy and the Petrobras scandal

continues to hold back the economy and investment. The strong demographics that supported Brazilian

growth are reversing, leading to stagnation in demand for construction over the longer-term.

When it comes to Europe, whilst it won't recover to reach pre-crisis levels until 2025, the UK is a stand-

out growth market, overtaking Germany to become the largest in Europe and the world's sixth largest

construction market by 2030.

"Construction is likely to be one of the most dynamic industrial sectors in the next fifteen years and is

utterly crucial to the evolution of prosperous societies around the world. The numbers within this report

are huge and that translates as creating vast numbers of new jobs and creating significant wealth for

certain countries across the globe," says Fernando A. Gonzalez, Chief Executive of global building

materials company CEMEX.






Back to Index





DUBAI SEES RATE OF PROPERTY PRICE

DECLINES SLOW IN Q3


The pace of price declines in Dubai's real estate market has slowed during the three months to October,

according to Emirates NBD's latest Dubai Real Estate Tracker survey.

It said there was an improvement in the new buyer enquiries index and the new international buyer

enquiries index, particularly for apartments, suggesting there is demand at the right price.

Data for the residential lettings market was also encouraging, with agents reporting rental price growth

for both apartments and villas in the three months to October, albeit at a slower pace than in the August

survey.

Although the price of both apartments and villas declined in the three months to October, the rate of

decline was less than in the August survey, according to estate agents.

In particular, 17.1 percent of agents reported higher prices for villas in Q3, compared to 10.8 percent in

the previous quarter.

The survey showed that the volume of sales declined further in the October survey, with some agents

noting that sellers were reluctant to reduce prices while buyers had adopted a more cautious approach

in an environment of greater economic uncertainty.

According to the survey, more agents reported increased new buyer enquiries in Q3 as the new buyer

enquiry index for apartments rose to 50.0 in October from 37.8, while the villa index rose to 38.6 from

25.7.

Interest from international buyers has also improved, with 25 percent of agents reporting increased

enquiries from new buyers, up from just 14.6 percent in the three months to August.

The survey said the total number of new villa lettings declined in October, while volumes were flat in the

apartment sector. Nevertheless, agents reported higher rental prices in the three months to October

with the composite index at 56.8.

The rate of price rises has eased since the summer however. Once again, apartments have

outperformed villas, with 45.6 percent of agents reporting higher rental prices for apartments, compared

with 36.8 percent for villas.

New enquiries for apartment rentals continued to rise, but at a slower pace than the August survey. New

enquiries for villa rentals were lower on average in October.

The survey added: "The new enquiries index points to softening demand, and it is perhapsunsurprising

that agents expect rental prices for both villas and apartments to decline over the next three months

however."





More than two-thirds of consumers surveyed reported paying more rent for leases renewed in the three

months to October, higher than the August survey.

Source: Arabian Business

Back to Index





DUBAI RENTS FALL 2% IN Q3 AS 2,000

NEW UNITS ENTER MARKET

MONDAY 09 NOVEMBER 2015

Residential rents in Dubai fell by 2 percent during the third quarter of 2015, according to a new report

by Abu Dhabi Islamic Bank (ADIB) and its real estate advisory subsidiary MPM Properties.

Capital values for completed apartment units fell 9 percent year-on-year, with the highest drop

registered across prime developments, which had seen a substantial rise in the rate of sales since the

second half of 2013.

The report added that on the supply front, around 2,000 new units were completed in the quarter,

mostly in leasehold areas.

It said the total value of residential apartment transactions fell by 8.6 percent quarter-on-quarter, from

AED4.62 billion ($1.25 billion) in Q2 to AED4.22 billion in Q3 2015.

This is in line with past trends, with the third quarter of the year tending to be a relatively quiet period

for the real estate market because of the peak summer and holiday season, the report said.

It added that the controlled supply of new office space, coupled with continued positive occupier

sentiment, is helping to maintain Dubai’s healthy rental and occupancy levels in the office market.

The Dubai office market remained stable quarter-on-quarter despite a rise in new stock, as demand for

office space continued to show an upward trend, mainly from start-up companies. Prime Central

Business District (CBD) rents ranged between AED 110-220 per square foot per annum while secondary

locations have recorded rents ranges between AED70-200 per sq ft per annum.

The report said Dubai’s retail sector witnessed a marginal drop in footfall and spending during Q3, with a

number of major retailers reporting slower sales year-on-year.

"This could be largely attributed to a fall in spending by tourists, who are key drivers of demand," the

report added.

“Much of the impact has been noticed across the luxury retail segment due to global currency

fluctuations and falling oil prices. However, overall prime retail assets remain strong performers and

demonstrate positive growth with waiting lists for space still over-subscribed despite expansions,” said

Paul Maisfield, CEO of MPM Properties.


Back to Index





JUMEIRAH CEO HINTS AT BURJ AL

ARAB EXPANSION

THURSDAY 12 NOVEMBER 2015

Gerald Lawless, president and CEO of Jumeriah Group, has hinted that the luxury hotelier may be set to

expand its flag ship property, the iconic Burj al Arab, it was reported.

Speaking on Wednesday at the Conde Nast Traveller Forum in Dubai, Lawless let slip something rather

fascinating, ShortlistDubai.com reported. At the end of his speech, he put up a slide of the Burj Al Arab,

and said “if you look closely, you may notice something different.”

The ocean facing side of the hotel had a large expanded triangular area in white, showing what looked

like an expanded beach and possibly retail/restaurant facility.

“We will be announcing something soon,” Lawless said.The Burj al Arab opened in December 1999 and,

at 280 metres, it is the third tallest hotel in the world.


Back to Index





WOULD YOU BUY A UAE HOUSE THAT

HAD BEEN BUILT BY ROBOTS?

SATURAY 14 NOVEMBER 2015

Etienne Mouton, the head of technology for the Middle East at WSP Parsons Brinckerhoff, a construction

consultancy, is not surprised that the first “printed” office is being built in the UAE.

The UAE’s National Innovation Committee was one of the first organisations in the world to announce

plans to create an entire office – including its contents – from three-dimensional (3D) printed materials.

The project, which is being built to house the staff of Dubai’s Museum of the Future, uses a 20-feet-high

3D printer and is to be completed by 2017.

When announcing the project in June this year, the committee’s chairman, Mohammed Al Gergawi, said:

“The idea of 3D printing buildings was once a dream, but today it has become a reality.

“This building will be a testimony to the efficiency and creativity of 3D printing technology, which we

believe will play a major role in reshaping the construction and design sectors. We aim to take

advantage of this growth by becoming a global hub for innovation and 3D printing. This is the first step

of many more to come.”

Mr Mouton says that the Middle East – and Dubai in particular – is “at the forefront of technology and

wants to prove that things can be done early on and at quite a large scale”.

Driven by the development of building information modelling (Bim) software, project design teams can

now create incredibly detailed, information-rich virtual models of buildings as opposed to two-

dimensional blueprints.

Recent advancements in 3D printing and materials science mean that these models can then be

automated to allow for the “printing” of entire buildings.

Already, Winsun, a Chinese construction company, has used a 20-feet-high printer to print a house that

was 33 feet wide and 132 feet long from recycled construction waste within just 24 hours. It has also

used a 3D printer to create units for a five-storey apartment building.

Another Chinese company, Zhouda Group, claims to have created 3D homes that were printed in

factories that could be assembled on sites within three hours. In Amsterdam, MDCX, a Dutch firm, is

using a 3D printer to make an entire bridge out of steel.

There are two main advantages of building in this manner – both of which have the potential to

massively reduce overhead costs such as materials cost.

Winsun has said that since the exact amount of material is used, the amount of construction waste

generated can be reduced by between 30 and 60 per cent. In some instances, material recycled from

previous buildings can be reused.





The second is the cost of labour, which Winsun estimates can decline by between 50 and 80 per cent.

Although precise figures for construction are hard to quantify because these techniques are still in their

infancy, a report from Bank of America Merrill Lynch published this year argued that robots would be

used to perform about 45 per cent of all tasks in manufacturing by 2025. That could lead to savings of

between US$600 billion and $1.2 trillion as workers in construction, maintenance, manufacturing and

agriculture are replaced.

This forecast is based on just 15 to 25 per cent of workers’ tasks being automated in developed

markets, and only 5 to 15 per cent of workers being replaced in emerging markets. On such an

assumption, between 30 million and 60 million existing jobs would be axed from the global workforce,

and construction is the sector – other than health care – whose employees are considered to be most

likely to be replaced by robots.

Andrew Elias, the managing director of Dubai-based Kele Contracting, believes that if 3D printing

technology can be developed to create mass-produced homes, the Middle East is a natural target

market.

Source: The National

Back to Index





AL BARARI ‘TROPHY HOME’ ON THE

MARKET IN DUBAI FOR DH49M


Nestled away on the outskirts of Dubai, Al Barari, an exclusive estate of palatial villas, houses some of

the emirate’s richest and most private residents.

But this 19,145 square foot, six-bedroom Bromellia house in the leafy Desert Leaf 1 neighbourhood

takes all that to a new level.

The villa’s current owner, who lives in Monaco, has spent thousands of dirhams upgrading what was

already a fairly luxurious, if standard, Al Barari villa into the type of home he hopes will attract the

world’s super rich.

Standard villas in the district currently sell for around Dh15 million. But this villa, which has never been

lived in, comes with a price tag of Dh49m thanks to its upgrade – though the agent says the seller is

“prepared to negotiate”.

“We have already had enormous interest in this villa, from Russian billionaires to high profile Africans,”

says the villa’s agent Luke Jones, luxury sales director at Dubai broker Luxhabitat.

It is rumoured that Saudi businessman Adnan Khashoggi, once considered one of the world’s richest

men, has even viewed the property.

Certainly this villa, which comes fully furnished, has all the trappings a billionaire playboy could hope

for.

Features include a 1,300 sq ft chlorine-free pool with fibre optic lighting underneath and glass walls

which create a striking starry pattern in the water. Close by is a 200 sq ft jacuzzi alongside a pool bar

and barbecue area.

A separate yoga temple and massage area help one balance one’s chi as well as a state of the art gym

complete with steam room, exotic shower and ice plunge pool.

Inside, in true James Bond style, is a games room as well as a vast private cinema.

The property includes its own air-conditioned “car showroom” for four cars plus a garage for another

three cars making it seven parking spaces in total.

“This is one of the only super luxury trophy homes in Al Barari,” Mr Jones adds. “Most of the villas in the

development come on plots measuring around 15,000 square feet but the owner here has bought an

extra chunk of land meaning that this villa plot is rare in measuring around 26,000 square feet.”

Q&A

What is Al Barari?





Al Barari, which means “the wilderness” in Arabic, is a luxury, eco-conscious gated estate in Dubai’s Nad

Al Sheba enclave built by Dubai’s prominent Zaal family. The whole development comprises just a few

hundred low density homes surrounded by lush gardens. The first residents moved into the community

in Spring 2010.

What is in it?

The development comprises 217 villas, a health food restaurant and the region’s largest privately owned

plant nursery. Eighty per cent of the 4.2 million square foot development is made up of green space,

themed gardens, landscaped lakes and freshwater streams.

Where do the plants come from?

The Zaal family have brought plants from all over the world to Al Barari. They boast that they have

introduced 800 species that have never been grown in the Middle East before, including a tall palm tree

called a Bismarckia nobilis, or the Bismarck fan palm that is native to Madagascar.

Is this a good time to buy?

According to the property broker Cavendish Maxwell, villa prices in the third quarter of 2015 are 9 per

cent lower in the city than they were a year ago. However, Mr Jones says that although Dubai’s

mainstream real estate market is slowing down this year, the super luxury end is still moving. He points

to the sale in October of a villa in Emirates Hills for Dh93 million. He stresses people are willing to pay

for quality.


Back to Index





REEM MALL LOOKS TO APPOINT MAIN

CONTRACTOR BY MARCH


The main contract to build the US$1 billion Reem Mall project is likely to be awarded by the end of next

March, giving National Real Estate Company, a Kuwaiti developer, two-and-a-half years to build the 2

million square feet retail hub.

Shane Eldstrom, Reem Mall’s chief operating officer, said it had already sought bids from contractors.

“We expect to get the tenders back in mid-December, so we’re probably looking at February to March

next year,” he said at the launch of Reem Mall in Dubai on Wednesday evening. The mall is being

developed alongside United Projects for Aviation Services Company, which has pledged up to $225

million in equity funding.

Samuel Sidiqi, Reem Mall’s chief executive, said that most of the financing was either “in place or in

sight”, with ongoing negotiations over debt funding.

“It’s not finalised. We’re in the process,” he said yesterday.

Mr Eldstrom said he was “very confident” that the work could be completed within its 30-month

programme, despite the complex nature of the mall. Half of the 6,800 parking spaces will be in two

basement levels, and the other half will be above two main shopping levels.

“We’re making significant investment in transport infrastructure, including a highway flyover linking

directly to Abu Dhabi’s main island,” said Mr Eldstrom.

He said the project team had spent two years creating detailed designs aimed at improving the user

experience. Car parking spaces will never be more than 150 metres from a store entrance, for instance,

and shoppers will never be more than 91 metres away from a bathroom.

“There are some good malls in Abu Dhabi. There may even be some great malls. Reem Mall will go a

step further. We are now developing the outstanding retail destination in Abu Dhabi,” said Mr Eldstrom.

The mall will house a hypermarket and several anchor stores. Mr Eldstrom said discussions with

potential tenants “are either well advanced or concluded”.

Over the past couple of years, there has been a mall construction boom in Abu Dhabi, with the addition

of the 645,000 square feet World Trade Centre Abu Dhabi mall and the 2.5 million sq ft Yas Mall last

year. Gulf Related is due to open its 2.3 million sq ft Al Maryah Central project in March 2018 – six

months ahead of Reem Mall’s completion.

Mr Eldstrom argued that Abu Dhabi “is a market that’s really ripe” for more retail projects. “We’ve done

all of the research anticipating that all of these projects are successful, and we remain very successful,”

he said.





Matthew Green, CBRE’s head of research and consultancy for the UAE, said that demand for mall space

remained high and that no sizeable amount of stock was likely to come on to the market until 2018.

But he said “there will be some competition” between Al Maryah Central and Reem Mall because of their

proximity.

“I think there is going to be a winner and a loser in that battle potentially, or they are going to have to

look at a different selection of brands.”


Back to Index





ARABTEC BROUGHT LOW AS SHARES

TUMBLE ON FRESH LOSSES

WEDNESDAY 11 NOVEMBER 2015

Just 18 months ago shares in Arabtec Holding were riding high at about Dh7 each. Recently included in

the MSCI Emerging Markets Index and touting orders including a project for a million housing units in

Egypt, it had expansion plans across the region and beyond.

Today such dreams seem like a distant memory, with the builder’s stock price having taken a battering

thanks to the messy departure of both its chief executive and chairman, the scaling back of many

ambitious projects, together with the realities of the new economic climate brought on by lower oil

prices.

Yesterday’s announcement of a Dh944.7 million loss for the third quarter resulted in Arabtec’s stock

tumbling a further 9.4 per cent at the start of trading in Dubai to its lowest level since May 2013.

The stock eventually pared its losses, ending down 5.07 per cent at Dh1.31 on the DFM.

Traders were puzzled by investor interest in the stock yesterday. “You can only speculate that there are

some people who still think the company has some life left in it,” said Khaldoun Jaradat, a trading

manager at Brokerage House Securities in Dubai.

A number of financial institutions no longer actively cover Arabtec’s shares.

“The level of disclosure they give isn’t sufficient for us,” said one analyst who has dropped coverage of

the stock, asking to remain anonymous.

Of the eight analysts tracking Arabtec shares listed by Bloomberg, seven recommend either reducing or

selling any holdings.

Pressure on the share price is set to continue in the near term, according to Mohammad Kamal, the

director of research at Arqaam Capital in Dubai.

“As it stands, the level of receivables, irrespective of quality, is greater than what the business is worth

in terms of equity,” he noted.

“The company has a substantial amount of debt maturing in the next 12 months. Sentiment will

continue to be determined by Arabtec’s ability to demonstrate future cash generation.”

However, Arabtec’s difficulties are not likely to last forever, according to Allen Sandeep, the director of

research at Naeem Holding in Egypt. He still rates the stock as a “hold”.

“Arabtec could be slated for a turnaround in terms of operating performance, which could later on be

followed by fresh liquidity injection [through debt or equity]. Through [major shareholder] Aabar’s

backing, we foresee Arabtec to be able to get the required funding in order to start on a new growth

phase,” he said in a research note.






Back to Index





ABU DHABI TENANT’S EIGHT-MONTH

WAIT FOR DEPOSIT RETURN GOES ON


In March 2015 we vacated an apartment in a gated community near Abu Dhabi. We moved because the

rent jumped up following the removal of the rent cap. All went well with the handover, but eight months

later we are still waiting for the return of one of our deposits. The staff working on behalf of the

landlord, a developer, have made promises to return the money but still it has not been delivered. We

raised this at the executive director level in the company and eventually received the rent deposit back

after six months, but we are still waiting for the District Cooling deposit to be returned. The amount to

be returned is not in dispute – they simply refuse to pay it. What can we do? IS, Abu Dhabi

The return of a deposit is one of the most common problems I hear about and one that often doesn’t

follow a “one size fits all solution”. In your situation, you have had to be incredibly patient and also

persistent which has now ultimately paid off as you have finally received your rental deposit monies

back. I recommend that with the District Cooling deposit, you keep up your persistence with the

company and/or try to take matters at even higher levels. Given that the amount is not in dispute, I

suggest requesting a face-to-face appointment and being available in person is often the key to success

as telephone calls and emails are too easily ignored. Threatening to go to a higher authority, such as the

municipality, might help but I always believe diplomacy is the way forward. Being polite but firm should

win the day. I’m certain that the amount in question is too small to file a court case, so please try and

keep persevering.

What is the law for an early lease termination in Ras Al Khaimah? We rented an apartment in Al Hamra

village and had so many issues after moving in that we have decided to leave after two months. When

checking the contract terms, we noticed the landlord added special conditions into the document. We

have a copy of the contract we signed without any of the special conditions. To end the issue positively,

we sent a one-month notice to the landlord, but he refuses to accept it and insists on us staying until

the contract ends. We went to the municipality, legal department and the police station in RAK but

nobody could tell us what the law is. And how we can cancel the contract if it’s been modified after we

signed it? EP, Ras Al Khaimah

Any alteration to a contract after all parties have signed it is not permitted without the agreement of the

said parties and therefore will render the contract null and void. I suggest you use this extremely

serious point to cancel the contract and move on. Seeking another way to remove yourself from this

situation may also prove difficult as the rental sector in RAK is still developing, and unfortunately there

does not seem to be any clear procedure yet of how to legally break a tenancy contract. Perhaps you

can use examples of what happens in other emirates to help in your continued negotiations with the

landlord. In Dubai, for example, there is a commonly followed practice that the tenant has to pay a

penalty of two months’ rent and in Sharjah the amount is 30 per cent of the outstanding rental amount.

Given that the RAK municipality or the higher authorities have not been able to assist you, try and find





some common ground with your landlord and perhaps explain his responsibilities to you as his tenants

regarding the maintenance of the property. If he had been more responsible you probably would not

have sought early termination of the contract in the first place.

I am subletting a room. When I moved in I paid a deposit of Dh1,000 (to secure the property). No terms

were discussed apart from rental price and the monthly payment and no written contracts were

exchanged. I am now leaving Dubai but have only given a few days’ notice. The person I rent from is

demanding a month’s rent. As no contracts were exchanged and this was not discussed, where do I

stand? EA, Dubai

The fact that you do not have a proper written contract means that no conditions to the agreement can

be verified. Therefore the fact that you have given only a few days’ notice to vacate should not be the

trigger point for you to pay one whole month’s rent, as this would not have been agreed upon

beforehand. More importantly, subleasing is not allowed unless the landlord is aware and has expressly

agreed to it (in writing). Therefore before entering into further contentious discussions, I suggest you

request the proof from this person that they are legally subletting.


Back to Index





NAKHEEL TRIPLES RETAIL SPACE IN

DRAGON MART WITH OPENING OF

EXTENSION


Nakheel added 1.4 million square feet of retail space in Dubai with the opening of Dragon Mart 2.

The Dh1 billion extension is nearly double the size of the existing Dragon Mart. Presently, shops open in

the extension make up 65 per cent of the available space, but the developer said the extension would be

fully occupied within two weeks.

The two-floor extension has a 12-screen cinema, a 250-room hotel and a multi-storey car park adjoining

the complex.

“We have 500 outlets with another 600 kiosks in this new retail space,” said Ali Rashid Lootah, Nakheel’s

chairman. “This is the first delivery of Nakheel’s new expansion into retail. We want to capitalise on the

success of our previous offerings.

“Dragon Mart gets 50,000 to 80,000 visitors every day and now we have given those customers a new

destination for them to visit.

“We can see the benefit to the surrounding area as real estate rents have already jumped because of

what we now offer. The extension will only be 70 per cent Chinese retailers, with a 9,000 square metre

Geant as our anchor.”

Mr Lootah said all the mall space in Dragon Mart 2 was pre-leased, showing the appetite for retail space

in the city.

Nakheel has 10 large new projects under development – ranging from the 3 million sq ft Deira Mall to

the 432,000 sq ft Circle Mall in Jumeirah Village Circle – and a number of neighbourhood malls due for

completion in the next five years.

On the Palm, Nakheel is due to deliver The Pointe, a 1.4 million sq ft, 135-outlet waterfront destination,

across from Atlantis in December next year, and Nakheel Mall, which will have more than 300 retail

outlets, in 2018.

The new Dragon Mart extension is looking to service the 70,000 residents of International City.

Geant, the anchor tenant, has opened its third-largest hypermarket in the extension, after Yas Mall and

Ibn Battuta Mall, catering to local residents and Dragon Mart employees. The hypermarket operator has

a long-standing relationship with Nakheel but said rents continued to weigh on profitability.

“The problem we are finding is that rents just keep going up and up,” said Mark Lack, Geant’s chief

operating officer. “We have been in Nakheel’s Ibn Battuta Mall for 10 years, so the rent we have there is





appropriate. But we pay the same rate for this new space in Dragon Mart 2, which isn’t bad, but it’s a

new space. We have a fantastic relationship with Nakheel that allows us space in many of its malls, but

Dubai isn’t cheap.”


Back to Index





YAS MALL AIDS SURGE IN PROFIT AT

ABU DHABI’S ALDAR PROPERTIES IN

Q3


Aldar Properties reported a 9.4 per cent increase in third-quarter profit as the government-backed

developer reported a jump in recurring revenues thanks to the performance of Yas Mall.

The Abu Dhabi-listed company said that profit attributable to the owners for the three months to the end

of September this year rose to Dh634.3 million, up from Dh579.6m in the same period in 2014 and

beating analysts’ predictions.

Much of this came from its recurring revenues portfolio, including the 235,000 square metre Yas Mall,

4,800 rented apartments, thousands of square metres of upmarket offices, scores of hotel rooms and its

schools business.

Profit from the recurring revenues portfolio nearly doubled compared with the previous year, rising 46.6

per cent to Dh349m from Dh238m a year earlier.

Revenues for the portfolio also increased by nearly a third – up 32.9 per cent to Dh2.06 billion from

Dh1.55bn a year earlier as the company leased out all of the 355 shops in the mall, 99 per cent of its

homes, 92 per cent of its offices and occupancy at its hotels stood at 79 per cent.

“We’ve got assets in the hotel space, retail, and commercial office and residential for the general

population so taken as a whole it’s a much diversified proxy optic for the health of Abu Dhabi,” said Greg

Fewer, the Aldar chief financial officer.

However, total revenues for the company fell 13.9 per cent during the period to Dh1.17bn, missing

analysts’ predictions – something Aldar put down to a change in accounting rules since the previous

year, as well as the fact that it handed over a glut of delayed apartments the previous year.

The company said that despite a slowdown in the Abu Dhabi market, it was pressing ahead with the sale

of a series of off-plan properties.

According to the property broker Cavendish Maxwell, both villa and apartment prices in Abu Dhabi

dropped 1 per cent in the third quarter of the year as mortgage caps, the strong dirham and the fall in

global oil prices continued to weigh on the market.

“We still see a constructive market on the ground in Abu Dhabi for new off-plan product,” Mr Fewer said.

“There is latent demand in some important sub sections of the market.”


Back to Index





DUBAI-BASED MAN INVESTMENTS IN

REGIONAL TIE-UP WITH EASYHOTEL

OPERATOR


A Dubai-based company has agreed a master development deal to roll out the easyHotel chain of budget

hotels across the Middle East.

Man Investments, part of Mohammed Juma Al Naboodah’s private office, made the agreement with

easyHotel, a London-based business founded by Stelios Haji-Ioannou, the founder of the budget airline

easyJet.

Mr Al Naboodah is a shareholder in the family-owned Al Naboodah Group, which has interests in real

estate development, construction, automotive retail, travel and tourism.

Easyhotel has three company-owned hotels with 390 rooms and 18 franchised hotels with 1,490 rooms,

including a 216-bed property in Jebel Ali that was opened with Istithmar World in 2010.

Under the new deal, Man Investments will build 600 hotel rooms by 2017, and is targeting a total of

1,600 rooms by 2020. It is focusing its efforts in the UAE and Oman, and its first easyHotel will be a

300-room property in Bur Dubai.

The company said it had secured land and properties to open new hotels in 2017.

Guy Parsons, the chief executive of easyHotel, said Man Investments was a “great cultural fit” for

easyHotel because it had established a significant geographical foothold in the region in several business

areas, many of which were targeted at value-conscious consumers.

“With land prices currently at a premium, their capacity for speed and scale of development is a

considerable competitive advantage,” he said.

A Man Investments spokesman said: “We see a significant gap in the budget sector in the entire region.

Currently there are no hotel brands offering a combination of great value and superb quality, and we

feel that easyHotel is perfectly designed to take advantage of this opportunity.”


Back to Index





EXECUTIVE TRAVEL: ST REGIS ABU

DHABI CORNICHE OFFERS STUNNING

VIEWS AND YOUR OWN BUTLER


There’s nothing more annoying than hanging around a hotel lobby to check in after a long flight. So it’s

a pleasant surprise at the St Regis Abu Dhabi Corniche to be greeted by three empty check-in tables, be

offered a juice and still arrive to the room, luggage delivered, 10 minutes later.

The first St Regis hotel was built in New York by society man John Jacob Astor IV before he drowned on

the Titanic. Fast-forward a century and St Regis is a chain sitting within the Starwood group.

The Corniche hotel, 36 kilometres from the airport and within a few kilometres of the banking district,

opened two years ago and caters well to the business traveller – the gym, business centre and room

service are all 24-hour.

Attached to the Nation Galleria mall, the hotel has a marbled corridor crossing beneath the busy

Corniche road to its beach club. It has 283 rooms and a presidential suite, eight restaurants and bars, a

spa, male and female salons and a helipad.

The room is thoughtfully laid out – there are three desk-height power points, as well as USB, audio and

HDMI sockets, and even a power point built into the inside of the room safe door.

Transformers are available, Wi-Fi is automatically connected after first login for your entire stay – and

for up to five devices – and there are two chairs for the desk so you can work with a colleague if

necessary. A socket next to the bed, clearly labelled 230V, is ideal to charge your phone overnight.

One feature that sets St Regis apart is its butler service. Your butler arrives to your room shortly after

you do, gives you their business card and shows you around. They are available “for any other request,

however large, small or unusual”. A 20-page colour printing request was emailed in at 10pm and hand-

delivered to the room 15 minutes later.

Luxury touches are everywhere, in the super-soft bedding, motorised drapes, chandeliers and in-mirror

bathroom television (although that didn’t work properly, in five days). And the view – a stunning

panorama of the sea, Marina Mall, nearby skyscrapers and Emirates Palace.

Prices per night start from Dh650 in low season and Dh900 in high season.

q&a looking after your needs

Suzanne Locke reveals more details about a business stay at the St Regis Abu Dhabi Corniche:

What about tea and coffee?

As well as the normal kettle and creamer in the room, you can call any time for free tea or coffee,

delivered by the butler with fresh hot or cold milk on a beautiful silver tea set and with biscotti. There is

also a generous amount of complimentary bottled water in the room – great when the tap water is

desalinated. Just don’t touch the expensive minibar or room snacks – Dh50 for a very light tub of crisps

and Dh18 to Dh28 for soft drinks.





Can I get a newspaper?

The hotel says a variety of local and international newspapers is available, with an iPad app for more

publications and hotel iPads available on request from the butler. However, this guest’s newspaper

request was wrong every day for five days and the butler said the hotel did not have iPads available.

Any cleaning facilities?

Pop your shoes in the bag for complimentary shoe-shining, along with up to two pieces of laundry free a

day. Have it picked up by 9am for same-day service. There’s also one-hour pressing and an iron in the

room.

What about room service?

Room service is delivered in 30 minutes, wheeled in on a heated hostess trolley draped in a tablecloth

and then laid out for you. Breakfast is international, from congee to foul medames and chana masala;

try the salmon from the all-day dining. And the late-night menu, from 11pm to 6am, includes the ever-

present club sandwich and Arabic meze.


Back to Index





RAK VISITOR NUMBERS REACH

HIGHEST LEVEL YET IN THIRD

QUARTER


Ras Al Khaimah’s Tourism Development Authority has announced a 14 per cent increase in visitor

numbers during the third quarter of 2015 to almost 200,000 visitors – the highest number ever recorded

in the emirate.

The Authority said revenue from tourism recorded by hotels in the Emirate increased by 22 per cent

year-on-year during the quarter to $55.7 million, or Dh204.5m ($45.7m a year ealier).

Occupancy rates also increased to 58 per cent compared to 51 per cent a year earlier, while revenues

per available room jumped by 36 per cent to $78.93. The amount of money generated from food and

beverage revenue also grew by 10 per cent to $18.5m.

The authority said that local tourists still make up the bulk of visitors, with 49 per cent of visitors coming

from other parts of the UAE thus far in 2015. Germany remains the main source of international visitors

– providing 8.9 per cent of the total. Visitors from the UK overtook those from Russia, at 5.2 and 4.6 per

cent respectively, while visitors from India made up the top five nationalities, providing 4.3 per cent of

total vistors.

“These figures are extremely encouraging as we work towards our target of 1 million visitors by the end

of 2018,” Haitham Mattar, the chief executive of Ras Al Khaimah Tourism Development Authority, said in

a news release.

“As the destination gains global appeal, we plan to steadily diversify our source markets through

strategic global partnerships with leading industry stakeholders, repositioning the emirate on the world

tourism stage,” he added.

Officials at the tourism authority were not available to answer questions regarding the figures yesterday.

The accountancy firm EY’s latest Hotel Benchmark Survey showed that Ras Al Khaimah recorded a 55

per cent year-on-year increase in average room yields in September, reaching $89. This was partly

thanks to a 4.7 per cent climb in occupancy rates to 63 per cent.


Back to Index





DUBAI PARKS AND RESORTS LOSSES

WIDEN BUT PROJECT ON TRACK


The Dubai-listed theme park company behind plans for three Florida-style theme parks due to open next

year posted a Dh29.6 million third-quarter loss while adding that the project is 73 per cent complete.

Dubai Parks and Resorts said that losses for the three months to the end of September widened from

Dh29m in the second quarter and Dh13m in the first quarter as work on the Dh10.5 billion project

progressed.

The theme park operator did not give a comparable figure for the third quarter of last year because it

was listed only last December. Because the park is under construction, it did not have revenue to report.

In a filing to the Dubai bourse on Wednesday, Dubai Parks & Resorts said that cumulative spending at

the project (including land acquisition) had reached Dh4.8bn, an increase from Dh3.8bn as at the end of

the previous quarter, while structural work was now 73 per cent complete, up from 57 per cent in the

second quarter.

Dubai is counting on its entertainment and theme parks sector to help it maintain its rapid growth in

tourist arrivals, which it plans to nearly double to 20 million by 2020.

Dubai Parks and Resorts said that the 25 million square feet park, which will comprise Legoland Dubai,

Motiongate Dubai and a Bollywood theme park as well as a water park and a hotel, remained on course

to open on Sheikh Zayed Road in October 2016.

The company added that it had received 12 lease proposals from companies looking to take space in its

220,000 sq ft Riverland district shopping, dining and entertainment mall, accounting for 19 per cent of

the space.

Dubai Parks and Resorts, part of Meraas Holding which is owned by Dubai’s ruler, is forecasting 6.7

million ticketed visits in 2017, the first full year of operation, helping to produce revenue of Dh2.4bn.

“We have reached a critical milestone in the construction of the region’s first integrated theme park

resort and are now less than 12 months away from the official opening of Dubai Parks and Resorts,” said

Raed Al Nuami, the chief executive of Dubai Parks and Resorts. “With construction of the individual

parks progressing rapidly, you can now truly begin to appreciate the size and diversity of offerings at

our resort.”

He added that 11,000 workers and 34 contractors were currently on site.

This month the company started negotiations with travel operators in an attempt to sign “dozens” of

deals designed to help it meet sales targets.

The company has not yet revealed ticket prices, saying rates will be comparable to other UAE attractions

such as the Aquaventure Waterpark and Yas Waterworld. Day passes for the latter attraction start at

Dh240 for an adult.

The company shares increased 3.39 per cent in trading to close at Dh1.22.


Back to Index





ECONOMIC DIVERSITY HELPING RAS AL

KHAIMAH WEATHER OIL PRICE SLUMP


The diversity of Ras Al Khaimah’s economy is helping it to weather the downturn caused by the oil price

crash, credit ratings agencies say.

Although the northern emirate has not totally escaped the effects of the spending brakes applied by the

UAE and other regional governments because of lower oil and gas revenues, it will be bolstered by

continued spending on infrastructure projects as a countermeasure to the economic slowdown.

“We still expect real GDP [the value of all goods and services produced domestically, after adjusting for

inflation] to expand by 4.5 to 5 per cent per year in 2015 to 2017, driven by construction, rising tourist

inflows and manufacturing growth,” Fitch said Friday in a report that affirmed RAK’s long-term credit

rating at A.

Last year, RAK’s economy grew 4.6 per cent, according to the government.

The emirate’s tourism sector has expanded rapidly recently and the RAK tourism authority last week

reported a record number of visitors for the third quarter – up 14 per cent quarter-on-quarter to about

200,000.

Ras Al Khaimah’s hotel revenue grew 22 per cent quarter-on-quarter to about Dh205 million in the third

quarter.

RAK is among the smallest emirates in the federation, with a population of about 300,000. Its wealth

rests on real estate and the hospitality sector, as well as a handful of export-focused industries – with

companies such as RAK Ceramics, RAK Cement and Gulf Pharmaceuticals among them – which also

experienced robust growth recently.

The tourism sector is making efforts to expand into business events, a plan designed to attract foreign

investment to the emirate’s industrial free zones.

The UAE was hit hard by the global financial crisis seven years ago but has followed a fairly conservative

fiscal path since.

Standard & Poor’s affirmed its debt rating on RAK last month. “RAK’s relatively diverse economic base

and strong public finances will offset slower regional demand and lack of monetary policy flexibility,” it

said with references to the emirate’s membership of the federal budget process and the dollar-pegged

currency.

Ras Al Khaimah has just a small direct exposure to the hydrocarbons sector through RAK Gas, from

which the government derived 15 per cent of its revenue last year, down from 26 per cent in 2013. But

it is exposed more broadly via the federal budget and implied central government guarantees.

Fitch, which had forecast a budget deficit for Ras Al Khaimah, estimates that the emirate’s budget would

rise to a surplus this year of 1.1 per cent of GDP, from 0.8 per cent last year. Fitch and S&P criticised

Ras Al Khaimah’s lack of government transparency and bureaucratic development. According to Fitch,

RAK’s budgeting process “is not yet methodologically mature”, so there are many gaps that can only be

filled in via federal data interpolation.

Improvement on that front might help improve the emirate’s debt ratings, said Fitch and S&P.






Back to Index





DUBAI PRIVATE SECTOR GROWTH HITS

FIVE-YEAR LOW AMID ‘TRAVEL AND

TOURISM CONTRACTION’

MONDAY 09 NOVEMBER 2015

Dubai’s private-sector economy grew at its slowest rate for more than five years last month, according

to a survey by Emirates NBD, in the latest sign of the impact of lower oil prices on the UAE’s real

economy.

The bank’s Dubai Business Activity Index score fell to 51.4, its lowest level in 68 months, down from 56

in September, with the key segments of tourism, construction, and retail and wholesale falling behind in

growth compared with the previous month.

Dubai’s score remains above the neutral level of 50, suggesting that its economy is still growing

modestly.

However, growth in new orders across the emirate registered its second-weakest rate of expansion since

December 2010, resulting in firms raising staff numbers at the weakest rate in nearly four years.

The survey’s release comes a week after the UAE’s purchasing managers’ index dropped to 54.0 for last

month, its lowest level since March 2013, another sign of the low oil price’s effects on the non-oil

economy.

“We expect growth in Dubai to remain positive given its strong fundamentals,” said Daniel Kaye, the

lead economist for the Middle East at Oxford Economics.

“But the start of the Fed’s rate hiking cycle will present a risk for capital flow into emerging markets,

more generally.”

Better-than-expected US payroll data for last month, which released on Friday, has fuelled speculation

that the Fed will begin raising rates from next month.

Dubai’s key travel and tourism sector contracted in October, according to the Emirates NBD survey,

falling to 49 from 52 the previous month.

However, the tourism indicator is expected to return to positive territory in the coming months as Dubai

heads into the winter high-season, according to Khatija Haque, Emirates NBD’s head of Mena research.

The emirate’s construction sector and wholesale and retail subsector also slowed last month but

remained in positive territory, scoring 56.1 and 52.8, respectively.

“The construction sector survey data is encouraging, as it signals relatively robust growth in new orders

and output in October, despite heightened concerns about government spending in the face of sustained

low oil prices,” said Ms Haque.

The UAE’s economy as a whole is expected to grow 3.5 per cent this year, according to comments last

month from the Minister of the Economy, Sultan Al Mansouri.





“With oil prices remaining around the US$55 mark, economic growth will be mainly driven by the non-oil

sector, which is expected to grow by 4.5 per cent this year,” said Alp Eke, a senior economist at National

Bank of Abu Dhabi.


Back to Index





With 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, 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.

news brief 45 - asteco property management€¦ · such as nurseries, community centres and...

Documents