Moody's reaction to Emaar, Dubai Holding merger
Thursday, July 02, 2009
There is a certain uncertainty surrounding the proposed consolidation between real estate giant Emaar and three other property developers under the government-owned Dubai Holding, and this has led to questions about the possible financial implications for the two companies.
Moody's yesterday reacted to this scenario by downgrading its credit rating on Dubai Holding from level A2 to A3 and placed it on review for further downgrade. Similarly, Emaar has been put on review for possible downgrade from the current Baa1.
Although Moody's acknowledges that Dubai property market have almost bottomed out, the financial implications of its decline have taken its toll on both companies 'debt protection metrics', said Phillip Lotter, Senior Vice President at Moody's and Lead Analyst for Dubai Holding.
In Moody's opinion, these will continue to weaken further, before the effects of market recovery translates into stronger cash flows, irrespective of the announced merger.
One of the concerns is that analysts have a divided opinion on its impact on Emaar. Moody's has expressed concern that Dubai government has accepted diluting Emaar with a weaker business in support of wider market consolidation.
Fitch Ratings has announced that it would monitor Dubai Holding and Emaar ratings for action, as further details emerge. Standard and Poors has adjusted their CreditWatch rating on Emaar to developing from the previous negative.
According to a statement by Standard and Poors, the rating action reflects the possible benefits on Emaar's credit profile from a merger with the real estate business of Dubai Holding Group. The developing implications reflect the downward pressure on the ratings from the weak Dubai real estate markets when the merger is incomplete, S&P said.
Moody's yesterday reacted to this scenario by downgrading its credit rating on Dubai Holding from level A2 to A3 and placed it on review for further downgrade. Similarly, Emaar has been put on review for possible downgrade from the current Baa1.
Although Moody's acknowledges that Dubai property market have almost bottomed out, the financial implications of its decline have taken its toll on both companies 'debt protection metrics', said Phillip Lotter, Senior Vice President at Moody's and Lead Analyst for Dubai Holding.
In Moody's opinion, these will continue to weaken further, before the effects of market recovery translates into stronger cash flows, irrespective of the announced merger.
One of the concerns is that analysts have a divided opinion on its impact on Emaar. Moody's has expressed concern that Dubai government has accepted diluting Emaar with a weaker business in support of wider market consolidation.
Fitch Ratings has announced that it would monitor Dubai Holding and Emaar ratings for action, as further details emerge. Standard and Poors has adjusted their CreditWatch rating on Emaar to developing from the previous negative.
According to a statement by Standard and Poors, the rating action reflects the possible benefits on Emaar's credit profile from a merger with the real estate business of Dubai Holding Group. The developing implications reflect the downward pressure on the ratings from the weak Dubai real estate markets when the merger is incomplete, S&P said.
Labels: Dubai Holdings, Emaar
Deerfields commences construction work on mixed-use project
Deerfields Town Square, the flagship project developed by MBI, an Abu Dhabi-based venture with major stakes in real estate and construction, has commenced work on their mixed-use project.The leading international architectural firm RMJM has been appointed as the Lead Design Consultants for the Deerfields project. RMJM will also work towards implementing changes to the facade, interiors and landscape design of the mall.
The initial ground work and de-watering process has begun, and the building contractor will be announced soon. This marks a new phase in the development of the project.
Located at Al Bahia in Abu Dhabi, and spreading across 220,000 square meters, the Deerfields Town Square project is hoped to be ready by second quarter of 2011.
The General Manager of Deerfields Town Square, Banu Tas, mentioned that the ground-breaking ceremony has taken place, and the project is moving towards its first phase of construction.
The Director of RMJM, Tim Baker mentioned that his company is offering design consultancy for the project, so that the entertainment, shopping, dining, recreation and hospitality venues all come together under a single roof, in a manner so as to offer residents and visitors high quality experience.
Early this year, MBI had entered into an agreement with Carrefour hypermarket mandating a 20-year lease deal. This anchor shop of the French retail giant will span across an area of 10,000 square meters at the Deerfields Town Square project.
Colliers International, the globally renowned retail consultant, will have about 200 retailers from medium to upscale brands, anchor shops, food courts, retail chains, casual and fine dining restaurants, and coffee shops, accounting to almost 80 percent of the development.
MBI is a major investment company specializing in real estate and construction, infrastructure and other industrial ventures.
Labels: Abu Dhabi
Dubai property prices beginning to witness the Metro effect
Tuesday, June 30, 2009
The prices of properties located close to metro stations in Dubai are already beginning to rise, marking the first signs of a Metro effect on the property market, reported analysts in Dubai.
The Jumeirah Lakes Towers (JLT) on Sheikh Zayed Road, located directly opposite the Dubai Marina station are being sold for 6.5 percent more than units in buildings located further away. The difference in prices could equate to tens of thousands of dirhams, pointed out a Dubai-based real estate agency.
Several other agencies have also reported to have been receiving enquiries about properties located in proximity to the metro stations. The trend implies that with just three months left for the opening of Metro's Red Line, home buyers are already beginning to take into consideration the ease of transport when choosing their home.
In the rental market, few mentioned that there was a clear difference in values, which would probably emerge only after the lines open on September 9th. Several residents feared that landlords would take advantage of the locations in proximity to the Metro and raise rents.
The Sales Director at Landmark Properties, Michael, mentioned that units at Indigo Tower, a JLT building near the station, was going for around Dh.800 per square foot, compared to Dh.750 across similar-quality buildings in JLT.
The Head of Property Management at the Dubai-based property portal Gowealthy. com, Andrew Delport, mentioned that units in proximity to the Metro will be the first to recover, once the system was up and running.
Delport considers Dubai Marina to have a similar trend, with the Metro on the Marina side of the freeway. The tenancies are more vibrant here than in other places, offering good value for money.
Dubai Marina is the most popular area for leasing, accounting for 30 percent of new annual lease contracts in Dubai, according to the second quarter 2009 report by Landmark Advisory.
A sales consultant for powerhousedubai.com, Ian Hainey, mentioned that estate agents have been keen to highlight any available access to the Metro. However, so far there has been no drastic difference in rents between properties near the Metro and others. The uncertainty would last until it is known which stations would exactly open on September 9th, and that would have an impact on decision-marking of prospective tenants.
The Jumeirah Lakes Towers (JLT) on Sheikh Zayed Road, located directly opposite the Dubai Marina station are being sold for 6.5 percent more than units in buildings located further away. The difference in prices could equate to tens of thousands of dirhams, pointed out a Dubai-based real estate agency.
Several other agencies have also reported to have been receiving enquiries about properties located in proximity to the metro stations. The trend implies that with just three months left for the opening of Metro's Red Line, home buyers are already beginning to take into consideration the ease of transport when choosing their home.
In the rental market, few mentioned that there was a clear difference in values, which would probably emerge only after the lines open on September 9th. Several residents feared that landlords would take advantage of the locations in proximity to the Metro and raise rents.
The Sales Director at Landmark Properties, Michael, mentioned that units at Indigo Tower, a JLT building near the station, was going for around Dh.800 per square foot, compared to Dh.750 across similar-quality buildings in JLT.
The Head of Property Management at the Dubai-based property portal Gowealthy. com, Andrew Delport, mentioned that units in proximity to the Metro will be the first to recover, once the system was up and running.
Delport considers Dubai Marina to have a similar trend, with the Metro on the Marina side of the freeway. The tenancies are more vibrant here than in other places, offering good value for money.
Dubai Marina is the most popular area for leasing, accounting for 30 percent of new annual lease contracts in Dubai, according to the second quarter 2009 report by Landmark Advisory.
A sales consultant for powerhousedubai.com, Ian Hainey, mentioned that estate agents have been keen to highlight any available access to the Metro. However, so far there has been no drastic difference in rents between properties near the Metro and others. The uncertainty would last until it is known which stations would exactly open on September 9th, and that would have an impact on decision-marking of prospective tenants.
Labels: Dubai Real Estate, Latest News, Property Prices
Cayan's Infinity Tower at Dubai Marina makes steady progress
The leading real estate developers in the region, Cayan Investment and Development, mentioned that its Infinity Tower development at the Dubai Marina, has hastened its construction process and has achieved a major progress on site.
The 80-storey tower offers stunning view of Dubai Marina. The podium levels, comprising six storeys are complete. Arabtec has been appointed as the main contractor of the project, with over 1000 workers in the site, working round-the-clock to ensure the right construction schedule.
The progress is an indication of the impressive track record by Cayan Investment and Development on keeping up with their project schedules, and the dedication by Arabtec towards the project.
The Chairman of Cayan, Ahmad Al Hatti, when speaking about the project construction, mentioned that the progress made on construction of the project reflects the meticulous care that Cayan lends to every aspect of its projects.
On completion, the tower will offer world-class amenities and offer tenants with a vast array of unique services and state-of-the-art amenities.
The construction work has now reached the seventh storey within the past six months. The development has already received a total of six design awards over the past three years, including the International Architecture Award from ‘Chicago Athenaeum’.
In December 2008, Cayan delivered 4 out of its seven projects in Dubai, and hopes to deliver the rest three projects between 2010 and 2011. Apart from projects in Dubai, Cayan has few mega projects in Egypt and Jeddah.
The 80-storey tower offers stunning view of Dubai Marina. The podium levels, comprising six storeys are complete. Arabtec has been appointed as the main contractor of the project, with over 1000 workers in the site, working round-the-clock to ensure the right construction schedule.
The progress is an indication of the impressive track record by Cayan Investment and Development on keeping up with their project schedules, and the dedication by Arabtec towards the project.
The Chairman of Cayan, Ahmad Al Hatti, when speaking about the project construction, mentioned that the progress made on construction of the project reflects the meticulous care that Cayan lends to every aspect of its projects.
On completion, the tower will offer world-class amenities and offer tenants with a vast array of unique services and state-of-the-art amenities.
The construction work has now reached the seventh storey within the past six months. The development has already received a total of six design awards over the past three years, including the International Architecture Award from ‘Chicago Athenaeum’.
In December 2008, Cayan delivered 4 out of its seven projects in Dubai, and hopes to deliver the rest three projects between 2010 and 2011. Apart from projects in Dubai, Cayan has few mega projects in Egypt and Jeddah.
Labels: Construction Projects, Dubai Marina
Commercial property prices will continue to decline globally
Sunday, June 28, 2009
Commercial property prices will continue to plunge this year in the global market, and will not bounce back until next year, according to the DTZ Money into Property report 2009.
The report, which was launched yesterday at the Ritz-Carlton Bahrain hotel and Spa last night, revealed that the number of global investments have fallen by 85 percent from their peak during the third quarter of 2007, till the present day.
The report, which includes 38 countries worldwide, offers detailed review about the trends and performances of the global property investment markets during the past year.
According to the report, commercial property prices will fall once more, as they continue to decline globally throughout this year, and will stabilize only next year. The London City office market will be the only key office market, globally, to offer investors attractive returns at current values.
DTZ also predicts that globally, total office returns will be about minus 20 percent this year, and will be zero or slightly positive next year, going to above 10 percent from 2011 onwards.
Being first published in 1975, Money into Property is the longest running annual report of its kind, providing detailed breakdown of the property investment markets globally, considering the different sources of capital, debt and investor interest.
Having already made its presence in six GCC countries, DTZ is currently undergoing aggressive expansion, across the region, offering complete range of real estate services, staffed with qualified expatriates and experienced nationals.
The report, which was launched yesterday at the Ritz-Carlton Bahrain hotel and Spa last night, revealed that the number of global investments have fallen by 85 percent from their peak during the third quarter of 2007, till the present day.
The report, which includes 38 countries worldwide, offers detailed review about the trends and performances of the global property investment markets during the past year.
According to the report, commercial property prices will fall once more, as they continue to decline globally throughout this year, and will stabilize only next year. The London City office market will be the only key office market, globally, to offer investors attractive returns at current values.
DTZ also predicts that globally, total office returns will be about minus 20 percent this year, and will be zero or slightly positive next year, going to above 10 percent from 2011 onwards.
Being first published in 1975, Money into Property is the longest running annual report of its kind, providing detailed breakdown of the property investment markets globally, considering the different sources of capital, debt and investor interest.
Having already made its presence in six GCC countries, DTZ is currently undergoing aggressive expansion, across the region, offering complete range of real estate services, staffed with qualified expatriates and experienced nationals.
Labels: Commercial Property, Market Trends
Dubai World announces consolidation of operations
Saturday, June 27, 2009
Dubai World yesterday announced that all operational management, pertaining to real estate activities of few of its companies, are being consolidated for better accommodation of market conditions and to maximize resources and expertise.
The real estate development and property transactions of Dubai Maritime City, Dubai Multi-Commodities Center and Leisurecorp will be managed by Nakheel. The changes, however, will have no impact on the daily business of the companies.
The consolidation planning is on currently, with assistance from Consultants, Alix Partners, and the process will be completed during summer.
Dubai World, the major player in real estate businesses in Dubai and across the world, has invigorated the industry, re-defining whatever possible through its companies' efforts and dedication.
Dubai World, in its statement, mentioned that it is extremely proud of its achievements, and aims to continue to be a leader in real estate business and hopes that the current decisions will help in meeting the requirements of customers in a better manner.
Dubai World is Dubai government's investment flag bearer, with a portfolio comprising the world's most renowned companies such as DP World, Drydocks World & Dubai Maritime City, Nakheel, Leisurecorp, Economic Zones World and Istithmar World.
The real estate development and property transactions of Dubai Maritime City, Dubai Multi-Commodities Center and Leisurecorp will be managed by Nakheel. The changes, however, will have no impact on the daily business of the companies.
The consolidation planning is on currently, with assistance from Consultants, Alix Partners, and the process will be completed during summer.
Dubai World, the major player in real estate businesses in Dubai and across the world, has invigorated the industry, re-defining whatever possible through its companies' efforts and dedication.
Dubai World, in its statement, mentioned that it is extremely proud of its achievements, and aims to continue to be a leader in real estate business and hopes that the current decisions will help in meeting the requirements of customers in a better manner.
Dubai World is Dubai government's investment flag bearer, with a portfolio comprising the world's most renowned companies such as DP World, Drydocks World & Dubai Maritime City, Nakheel, Leisurecorp, Economic Zones World and Istithmar World.
Labels: Dubai Real Estate
Emaar, Dubai Holdings under consolidation talks
As per the statement issued by the Dubai Government Media Office, four large development firms in Dubai - Emaar Properties PJSC, Sama Dubai LLC, Dubai Properties LLC and Tatweer LLC, have come together to hold one of the larges banks in Dubai, and have begun discussions to join together and form a larger entity, intended to rise up to the current challenges and to transform Dubai into a global city.
The proposed consolidation, when implemented, would create the biggest developer ever, in the MENA and Asian regions.
Dubai Properties, Sama Dubai and Tatweer are a part of Dubai Holdings, the investment arm of Dubai Government, while Emaar Properties, is on the verge of completing Burj Dubai, the world's tallest tower, 32.5 percent of which, is owned by the Dubai Government. Emaar also finds its listing in Dubai Financial Market.
The proposed consolidation of these leading real estate units will mark the beginning of a new chapter in the annals of global real estate, apart from building on the remarkable achievements in Dubai during the past thirty years.
The Royal Bank of Scotland PLC is the Advisor of Emaar Properties, while Merrill Lynch International represents the interests of Dubai Holdings.
The statement revealed that the firms are almost finalizing the proposed consolidation, including valuation of various entities, and assessment of potential transaction structures. Discussions are also on with the respective regulatory authorities, the statement said.
The Chairman of Dubai Holdings, Mohammad Al Gergawi, mentioned that consolidating these companies with Emaar is a natural progression towards evolution of Dubai real estate landscape, offering benefits to all stakeholders.
By clubbing forces, the largest combined entity will be given an unparalleled platform to maximize the opportunities in local and international markets. The combined entity has a clear strategy to better the positioning of Dubai as a world-leading hub in property development and management.
The Chairman of Emaar, Mohammad Ali Al Abbar, mentioned that there could be exceptional synergies between Dubai Holdings and Emaar's major real estate businesses. These comprehensive discussions are driven by shared vision regarding the consolidation of our respective visible success stories till date and the aim by the companies for creation of a world-class group, ideally positioned to help and support the current development of Dubai as a world-leading hub.
The proposed consolidation, when implemented, would create the biggest developer ever, in the MENA and Asian regions.
Dubai Properties, Sama Dubai and Tatweer are a part of Dubai Holdings, the investment arm of Dubai Government, while Emaar Properties, is on the verge of completing Burj Dubai, the world's tallest tower, 32.5 percent of which, is owned by the Dubai Government. Emaar also finds its listing in Dubai Financial Market.
The proposed consolidation of these leading real estate units will mark the beginning of a new chapter in the annals of global real estate, apart from building on the remarkable achievements in Dubai during the past thirty years.
The Royal Bank of Scotland PLC is the Advisor of Emaar Properties, while Merrill Lynch International represents the interests of Dubai Holdings.
The statement revealed that the firms are almost finalizing the proposed consolidation, including valuation of various entities, and assessment of potential transaction structures. Discussions are also on with the respective regulatory authorities, the statement said.
The Chairman of Dubai Holdings, Mohammad Al Gergawi, mentioned that consolidating these companies with Emaar is a natural progression towards evolution of Dubai real estate landscape, offering benefits to all stakeholders.
By clubbing forces, the largest combined entity will be given an unparalleled platform to maximize the opportunities in local and international markets. The combined entity has a clear strategy to better the positioning of Dubai as a world-leading hub in property development and management.
The Chairman of Emaar, Mohammad Ali Al Abbar, mentioned that there could be exceptional synergies between Dubai Holdings and Emaar's major real estate businesses. These comprehensive discussions are driven by shared vision regarding the consolidation of our respective visible success stories till date and the aim by the companies for creation of a world-class group, ideally positioned to help and support the current development of Dubai as a world-leading hub.
Labels: Dubai City, Emaar, Latest News
Dubai heading towards stability in home rents
Thursday, June 25, 2009
There are indications of rent stabilization in Dubai, with few landlords still experiencing good demand for higher quality rented homes in prime locations, a leading property consultancy reveals.
Landmark Advisory Group, one of the leading real estate consultancy companies in the region, yesterday released its sales and leasing price maps for the Dubai market.
The Dubai price maps, continues to show evidence of 180 degree turnaround from the earlier supply-driven property market to a demand-driven property market, although, on an average, the consultancy hopes to see further decrease in Dubai rents for the third quarter of the year.
The latest price maps from the consultancy, indicate the distressed sale opportunities have largely been exhausted, as sellers are reluctant to lower existing prices, and buyers sometimes are even paying increased rates for their sought-after residential developments, as only limited homes are available.
According to Director of Research, Jesse Downs, at Landmark Advisory, the Dubai property market shows distinct signs of market stabilizations, and return of confidence from end-users. In a few cases, even the sales prices have increased. This is mainly due to the dynamics of each development.
Small villa developments with limited supply have tapped into sufficient value recognition among end-users with regard to location, layout, and amenities and build quality. These are among those residential developments experiencing increases in prices, such as the Green Community and the Jumeirah Islands. A similar trend is also seen in leasing rates for few villa communities.
However, the price lists indicate a steep decline in apartment prices. The economic downturn, together with large quantity of high-rise apartments that were completed last year, has resulted in over-supply in this sector.
A noteworthy element in the price maps by Landmark Advisory is the constant refinement of price differentiation, which was earlier based on factors such as location, view and quality of finish.
Off-late consumer decision making is based on factors such as environment. Those in proximity to high voltage power lines are going for lower rates, than similar units located away from power sources.
Landmark Advisory Group, one of the leading real estate consultancy companies in the region, yesterday released its sales and leasing price maps for the Dubai market.
The Dubai price maps, continues to show evidence of 180 degree turnaround from the earlier supply-driven property market to a demand-driven property market, although, on an average, the consultancy hopes to see further decrease in Dubai rents for the third quarter of the year.
The latest price maps from the consultancy, indicate the distressed sale opportunities have largely been exhausted, as sellers are reluctant to lower existing prices, and buyers sometimes are even paying increased rates for their sought-after residential developments, as only limited homes are available.
According to Director of Research, Jesse Downs, at Landmark Advisory, the Dubai property market shows distinct signs of market stabilizations, and return of confidence from end-users. In a few cases, even the sales prices have increased. This is mainly due to the dynamics of each development.
Small villa developments with limited supply have tapped into sufficient value recognition among end-users with regard to location, layout, and amenities and build quality. These are among those residential developments experiencing increases in prices, such as the Green Community and the Jumeirah Islands. A similar trend is also seen in leasing rates for few villa communities.
However, the price lists indicate a steep decline in apartment prices. The economic downturn, together with large quantity of high-rise apartments that were completed last year, has resulted in over-supply in this sector.
A noteworthy element in the price maps by Landmark Advisory is the constant refinement of price differentiation, which was earlier based on factors such as location, view and quality of finish.
Off-late consumer decision making is based on factors such as environment. Those in proximity to high voltage power lines are going for lower rates, than similar units located away from power sources.
Labels: Dubai Real Estate, Rentals
Nakheel presents revised budget for Discovery Gardens community
Wednesday, June 24, 2009
Leading Dubai-based property developer, Nakheel, has established a revised budget for its Discovery Gardens community following detailed review of suppliers and scope.
The new price has been arrived upon, together with Dubai's RERA (Real Estate Regulatory Authority), and gives a reduction of Dh.5 per square foot in service charges for homeowners.
The Managing Director of Nakheel Asset Management and Design (NAMAD), Abdulrahman Kalantar, mentioned that initially when the service charges were set for Discovery Gardens, it was based on the best estimates. Thereafter, after a long review, the company has taken advantage of recent reductions in the cost of goods and serviced and has made this reduction in overall service charge budgets.
The new low service charge rates will be back-dated to 1st January 2009, and any rebates will be credited against next year's service charges, effective 1st October 2009.
Following introduction of Strata Law in April 2008, Nakheel made required preparations to register the Owners Association with RERA, once the regulations are finalized by the Dubai Land Department (DLD).
The new price has been arrived upon, together with Dubai's RERA (Real Estate Regulatory Authority), and gives a reduction of Dh.5 per square foot in service charges for homeowners.
The Managing Director of Nakheel Asset Management and Design (NAMAD), Abdulrahman Kalantar, mentioned that initially when the service charges were set for Discovery Gardens, it was based on the best estimates. Thereafter, after a long review, the company has taken advantage of recent reductions in the cost of goods and serviced and has made this reduction in overall service charge budgets.
The new low service charge rates will be back-dated to 1st January 2009, and any rebates will be credited against next year's service charges, effective 1st October 2009.
Following introduction of Strata Law in April 2008, Nakheel made required preparations to register the Owners Association with RERA, once the regulations are finalized by the Dubai Land Department (DLD).
Labels: Discovery Gardens, Nakheel
Al Barakah places new option before property investors
Tuesday, June 23, 2009
Al Barakah, the real estate developer, who has been much in the new off-late for allegedly bouncing cheques worth more than Dh.40mn, has now requested its investors to drop all their claims against the company, and in return, the CEO has promised shares fin a new holding company.
The proposal was circulated by the company to all its investors, and advertisements were placed in local newspapers, inviting the investors to submit claims to Horwath MAK, an auditing company in Dubai.
According to Tariq Minhaj, an Al Barakah representative, the company is now planning to build its long-delayed projects, with a UK-based construction company.
Several hundreds of investors suffered losses after investing on off-plan properties in about half a dozen towers that are yet to see the light of the day. The investors were lured by the guaranteed buy-back scheme, wherein the company had pledged to re-acquire its properties within few months after sale, with a 50 percent profit on the down-payment.
Few of the investors were given post-dated cheques as a guarantee, while few others were given only MoUs (Memorandum of Understandings). Once the cheques began bouncing, the Chief Executive of the company, Imran Khan went hiding, and now the police is in search of him.
Al Barakah has a dozen projects on the drawing board in Dubai and Ajman, including the 'tallest tower to-be' in Ajman.
The proposal was circulated by the company to all its investors, and advertisements were placed in local newspapers, inviting the investors to submit claims to Horwath MAK, an auditing company in Dubai.
According to Tariq Minhaj, an Al Barakah representative, the company is now planning to build its long-delayed projects, with a UK-based construction company.
Several hundreds of investors suffered losses after investing on off-plan properties in about half a dozen towers that are yet to see the light of the day. The investors were lured by the guaranteed buy-back scheme, wherein the company had pledged to re-acquire its properties within few months after sale, with a 50 percent profit on the down-payment.
Few of the investors were given post-dated cheques as a guarantee, while few others were given only MoUs (Memorandum of Understandings). Once the cheques began bouncing, the Chief Executive of the company, Imran Khan went hiding, and now the police is in search of him.
Al Barakah has a dozen projects on the drawing board in Dubai and Ajman, including the 'tallest tower to-be' in Ajman.
Labels: Real Estate News
