Wednesday, December 31, 2008
The mortgage defaults and property foreclosures is a very serious problem for banks and real estate developers are being hurt as home sales fall, making it harder for them to repay loans. UAE banks and lending institutions have begun toughening their lending criteria. Raj Madha, a director responsible for equity research at EFG-Hermes Holding SAE, said in a report that the scale of banking sector exposure to property developers and contractors means that a problem for the property sector is substantially a problem for the banks.
Moody's Investors Service has announced that it has revised downwards the outlooks on the ratings of four UAE banks - Dubai Islamic Bank PJSC, Dubai Bank, Abu Dhabi Commercial Bank PJSC and First Gulf Bank PJSC. They have changed the rating to 'negative' from 'stable' and the outlooks on the ratings for all senior unsecured debt issued by the above-named banks have also been revised accordingly.
John Tofarides, Analyst in Moody's Financial Institutions Group said that the rating reflects the growing downward pressures on asset prices and the anticipated profitability pressures from rising funding costs derived from increasingly scarce liquidity and loss of confidence. They have said that that soaring loan growth levels and future loan commitments are exacerbating the pressures on UAE banks' liquidity.
However, Obaid Humaid Al Tayer, Minister of State for Financial Affairs said that the outlook for economic growth for next year is positive. He added that Al Tayer said the Ministry of Finance had imposed conditions on the release of payments to banks to end the liquidity crisis. Central Bank Governor Sultan Nasser Al Suwaidi, in a speech to the FNC, said the national economy is strong. According to the IMF estimates, the economy grew 7 per cent this year and it is expected to slowdown next year.
Saturday, December 27, 2008
The leading construction contractor, Arabtec, is constructing the 84-storey skyscraper and currently the staffs are successfully delivering one entire floor in little more than five working days, it has been reported.
The Damac CEO, Peter Riddoch, said "Ocean Heights is likely to be one of the most iconic projects with a twisting architectural design, which is now taking shape. People passing by the building at Dubai Marina can catch a glimpse of the "turning" appearance of the building, as it reaches its 30th floor."
He added that, Damac is closely working with Arabtec, and more swift progress could be expected by early 2009 on this iconic building.
On completion, Ocean Heights is likely to house 680 single, double and triple bedroom apartments with underground parking bay. The tower incorporates all necessary amenities such as swimming pool, state-of-the-art gymnasium, beaches, tennis, serene gardens, artificial lakes, and jaccuzi.
The tower enjoys easy access to Jumeirah Beach, Wild Wadi Water Park, Dubai Marina, Ibn Battuta Mall and Emirates Golf Club.
Thursday, December 25, 2008
The boom growth during the recent past has now come to an end, and property sellers need to slash prices. Despite this, the agents say that the profit margins are still higher than that in the European and US markets, and in case the sellers reinvest wisely, they will be able to make bargains, and can continue to make money.
Many sellers who have lowered their prices have already seen huge appreciation in the value of their homes and are not much worried about the squeeze on profit margins, the agents said.
For instance, a penthouse at Jumeirah Beach Residence sold after reducing its value from Dh.21m to Dh.14m, and also two luxury villas on The Palm were priced at Dh.13.5mn and Dh.13.7mn, as against the earlier Dh.24mn.
The villas were originally purchased for Dh.5mn to Dh.7mn, which implies that the seller had still made a profit of more than 100 percent, rather than the 300 percent profit, otherwise obtained during the boom time.
The market is very tough and nobody wants to make a loss on property. But still, it is possible to make 100 percent profit, the margin which cannot be obtained in Europe or the US, agents claim.
Investors selling their properties can still consider reinvestment with so many bargains doing rounds, the agents point out.
According to Asteco, Dubai, the recent price correction has only resulted in a more "meaningful" market.
The completed properties were being sold for 15 to 25 percent lesser than that was happening a year ago, when off-plan properties were sold at their original properties. Also several people who have completed their properties have taken the decision of renting them out, rather than selling, due to fall in prices, Asteco said.
The RAKBANK, together with Aldar Properties and Sourouh Real Estate, have entered into a deal, wherein the bank, being a strategic mortgage partner for the developers, is offering upto 90 percent mortgage finance and 25-year loan tenure for all their residential freehold properties in Abu Dhabi.
The projects include the Al RAha Beach and Yas Island by Aldar, and Shams project on Reem Island by Sorouh, and the iconic architecture underway for the Sun Tower, Gate district, Alghadeer and Sky Tower.
According to Graham Honeybill, the General Manager of RAKBANK, the announcements of several unique landmark projects, multi-billion dirham investments and growing demand for housing, has made the Capital a property hotspot in the Gulf region, and therefore, mortgage finance provider becomes the focus area.
RAKBANK, the National Bank of Ras Al-Khaimah, was one of the first conventional banks to offer mortgage finance in the UAE four years ago, and has thereafter built a reputation in providing fast, flexible mortgage services in the UAE. This new partnership deal is the latest by the bank, although it is already offering mortgage finance services to several major residential projects developed by other developers such as Nakheel, Emaar, Emaar Bawadi, Mizin, Dubai Properties, ETA Star and Deyaar.
Both Sorouh Real Estate and Aldar are two largest property developers with about Dh.60bn and Dh.45bn worth developments in hand. Aldar owns 51mn square meters of land in Abu Dhabi, while Sorouh is undertaking development of 22million square meters of land in the city.
Tuesday, December 23, 2008
According to the analysts, given the current situation of global financial crisis and thereby the sudden slump in property sector, it is imperative for developers and authorities in-charge to arrive upon a series of measures to restore investor confidence.
A leading banker in the UAE has suggested that probably an initiative from the government's end, such as reconsidering provision of residence visa facility for buyers of free-hold residential units, would help restore the confidence and boost the property sector.
He pointed out that when the property boom in Dubai began, several developers had given an impression that buying a free-hold property would entitle buyers with residential visa status. This resulted in a major boom in the sector and brought about considerable growth. But, just a couple of months ago, when the authorities clarified that buying a free-hold property does not grant a residential visa status, several international investors backed out of the market.
Despite several legislations such as the Escrow Account, interim real estate register rule by RERA, all helped in building investor trust, the sector needs more proactive measures for revitalization, he added.
The Founder-Chairman of Overseas Indians Economic Forum, Dr. Ram Buxani, said that those who bought several units to take advantage of lucrative earning opportunities, should be granted with an affordable exit route, so that they do not end up with distress sales, which would further delay recovery of property market. Also, the projects that are yet to tak-off or get started should be put on hold and incapable investors should be allowed a convenient exit.
Dr. Buxani explained that about 30 percent of property buyers in the market are individual investors, who play a major role in boosting property sector. Another area that needs to be considered is the penalty clause, which should be maintained at a reasonable level of below 5 percent for those intending to exit. In cases where cash refunds are impossible, even issuing bonds which could be redeemed in 3-4 years are a better option.
The prime residential development, comprising double and triple bedroom apartments and penthouses with lake views is located in the Jumeirah Lakes Towers in Dubai. Being adjacent to the Sheikh Zayed Road, the development is in proximity to several other prime properties such as the Emirates Golf Course, Mall of Emirates and the Palm Jumeirah, and other major business hubs such as Dubai Media City, Jebel Ali Free Zone and Dubai Internet City.
Al Seef II includes all modern amenities such as health club, wide array of retail facilities and ample parking space.
The CEO of Deyaar, Markus Giebel, when speaking during the handover, said that the Al Seef II tower is an excellent upcoming community with business and lifestyle amenities. The project is in strict adherence to the best standards in the industry, and this indicates the commitment by Deyaar to cater to customer requirements.
Being one of the fastest growing Dubai-based property companies in the region, Deyaar Development PJSC has grown immensely and has proven to be a one-stop solutions provider. Apart from offering services such as marketing, sales and brokerage, Deyaar's strategic solutions have helped in creating exceptional value for investors. The company has developed over 16,000 commercial and residential properties till date, and is all set to continue and maintain its pivotal place in the property sector of the region.
Sunday, December 21, 2008
The Council will soon submit draft legislation on freehold properties to the government, which is hoped to unify the divergent law pertaining to the sector in the seven emirates.
One of the Council members, Dr. Abdul Rahim Shaheen, said that the council was considering implementation of the proposed legislation as quickly as possible.
With seven emirates handling freehold property under various rules, there has been utter chaos in the sector. The government plans to issue a federal regulation which unifies rules on dealing with foreigners with regard to freehold of properties and imposes strict punishments against those who exploit ownership for generating public interest.
He said that the issue has endangered national interest and UAE's identity as the Emiratis are being outnumbered by expatriates, due to which, few residents have begun demanding rights.
Expatriates are not entitled to 25-year residency through owernship of a property, clarified a senior official at the Ministry of Interior.
The Director of Legal Department, Ministry of Interior, Col. Rashid Sultan Al Khider, when speaking to the media, said that the Naturalization and Residency Law does not have a clause that permits expatriate property owners to obtain a 25-year residency visa.
This clarification by the Ministry regarding implementation of a new law by FNC, came, following the practice of several property developers advertising residency visas with their property sales.
Col. Rashid said that such advertisements by property companies are not right, and is in violationg of Naturalization and Residency Law, which stipulates expats in the UAE are here either for study, work, medical treatment, or tourism or are sponsored by family members.
Therefor, the FNC's plan to implement a regulation on freehold property coincides with the current situation, wherein, property marketing companies are adopting wrong practices to hit the society.
The developer also revealed completion of four out of six towers progressing in the Marina. The towers are already being handed-over to the clients.
Dorra Bay project is a 22-storey residential tower, launched in April 2006, located along between the beach and the marina and consists of single, double, and triple bedroom units, garden terrace apartments, duplexes and penthouses.
Dorra Bay offers residents ample modern amenities such as swimming pools, kids play areas, state-of-the-art gymnasiums, lush outdoor landscaping, and modern business center. Residents can also enjoy easy access to shops located within the tower, boating berths, all of which, add to the convenience of residing at Dorra Bay.
The completion of projects despite bad turn of events in the global markets, emphasizes the commitment by the company toward delivering the projects, which further instills customer confidence in the company.
The Cayan Investments CEO, Kareem Derbas, said that Cayan has always strived and has remained committed towards delivering high-end luxury and high-return investments to customers, and will continue to do so in future.
Cayan began its operations five years ago with a single project on the Dubai Marina, and now has projects portfolio worth Dh.8bn.
Friday, December 19, 2008
The Chairman of Pearl Dubai, Abdul Majeed al Fahim, said "As far as we are concerned there is no liquidity problem and our projects are on track. There may be some technical delays, but nor financial delays, and all projects would be delivered on time."
Al Fahim agreed that the crisis has posed challenges and hindrance for investors around the globe, and that few local projects that have been launched without proper planning or studies may get cancelled, particularly those set up by small firms.
Talking about the growth in property sector, he said that there could be positive growth in the UAE, but it could be a single digit growth.
Another executive from a major property company revealed that although the credit growth in UAE had slowed down, this has not made an impact on its projects worth Dh.70bn within and outside the emirate.
Sorouh Real Estate, which is currently executing projects worth Dh.70bn in Abu Dhabi, confirmed that it plans to go-ahead with all its projects as planned, despite the global meltdown.
The Chief Operation Officer of Sorouh Real Estate, Samer F. Abu Hijleh, said, that their businesses are growing despite the global financial crisis and the company has not sacked any employee, nor have plans to cut down workforce, and in fact, the company plans to recruit more workers.
Speaking to the press during the announcement of Arabian World Construction Summit Conference to be held between 9th and 11th February 2009, organized by Meed, he said, the Sun and Sky Towers on Reem Island of Abu Dhabi will be delivered in 2010. All the 1140 units of the two towers have been sold.
Sorouh has also sold 100 out of 111 plots to sub-developers on Shams on Reem Island.
The Authorities have urged investors to stay alert and get in touch with RERA, before signing deals.
Circulation of such information is 'highly misleading' and 'deceptive' to investors. This will result in investors losing money directly, if the contracts are not thoroughly read and cross-verified, and if proper legal advice is not sought, officials at RERA announced.
The officials have requested investors to consult them for any official information on Dubai property market and pertaining to investments.
Thursday, December 18, 2008
With nine projects, worth more than Dh.13bn in progress, Omniyat confirmed delivery of all projects in a span of three years, at the rate of three deliveries per year.
The CEO of Omniyat, Peter Walichnowski, said that construction is progressing as scheduled for all launched projects of Omniyat, and the company is committed towards meeting delivery schedules. The first three projects - Bays water, One Business Bay and The Square, would be ready by April 2009. The second bath of three projects - Binary, The Pad, and Gemini would be ready by 2010, while next three projects - The Opus, the Octavian and Beachfront would be delivered by 2011.
"This indicates the faith by the company in the Dubai market and also that the company is well-placed to meet the prevailing market conditions. The company is focused on the needs of customers, and will deliver outstanding real estate projects that offer superior quality commercial and residential lifestyles," he added.
The six-storey low rise building is located in the Arjan Master Community in Dubailand, and is considered 'one-of-a-kind community' which promotes greenery, nature, and a amenity-rich lifestyle that prioritizes family.
The development is located within a short distance from the Mall of Emirates, the Gold and Diamond Park, and the Global Village. La Fontana is targeted towards investors seeking guaranteed and best rental returns, in case they decide not to move into their new home immediately on gaining possession.
The units are priced in the range of Dh.498,600(starting price for studios) to Dh.1,315,900 (for double bedroom). The new homes would be ready for delivery by 2010, despite the current slowdown in property market, the officials confirmed.
La Fontana offers a range of finance options to individual buyers and investors, in co-operation with Mashreq Bank and HSBC, and Badr Al-Islami Bank for Islamic financing.
Being part of the Arjan Master community, La Fontana includes residences, parks, schools, hotels, offices, retails and community spaces meant for leisure pursuits.
Mizin, the subsidiary of Dubai Holdings, and a member of Tatweer is the master developer of the project, and Arkiplan Consulting Engineers are the project designers.
Tuesday, December 16, 2008
A senior official of the company, who spoke to Gulf News, said that although nobody is immune to the financial turmoil, but all projects planned by the company will continue as planned, and there will be no staff cuts.
The ongoing projects by Aldar in Abu Dhabi, including the Central Market project, Formula 1 track, Al Raha Beach residences, and hotel projects will be completed as scheduled, he added.
The Formula 1 track would be ready by next year to host the Formula 1 race of 2009 on November 1st in Abu Dhabi as planned, he confirmed.
The real estate projects across the company's portfolio are estimated to have exceeded $72bn in value.
Monday, December 15, 2008
Despite the rise in housing prices by five percent during the third quarter of this year, in contrary to the drop during the previous month, the overall picture of property sector seems to be that of a rapidly cooling market, the bank reported.
There has been a 36 percent increase in the number of people willing to sell their properties in November, but it seems that investors are turning away from the market, while the market indicates slow growth in prices and there is a scarcity in mortgage availability too, due to the global economic condition.
The said report by HSBC, follows the last month's report by the bank, which said that property prices in Dubai fell by 4 percent between September and October 2008, while the prices of villas tumbled by 19 percent.
Leading property consultant, Colliers International, last week warned that although the residential prices grew 5 percent during third quarter of the year, the values are likely to drop during the final quarter of 2008.
According to the HSBC report, the Abu Dhabi property market, which had been considered a much safer investment option than Dubai, too saw a 1 percent dip in property values
However, the research from the Citigroup, the investment bank, has expressed confidence on Abu Dhabi property market, stating that the emirate has been able to finance all its current projects due to massive budget surplus and sovereign wealth funds, contributed by the soaring oil prices during initial part of the year.
Saturday, December 13, 2008
The Chief Executive of Smith & Ken, Benjamin J Smith, who spoke to the media, said that when a person is unable to sell his property, he is offered the choice of swapping the property for another one, with a value lower than his current property, thereby offering the person a chance to own another property, while also holding back some extra cash.
Explaining the concept, he went on to say that a client of Smith & Ken, who owned a three bedroom shoreline sea-facing apartment worth Dh.4.5mn, with 2,184 square feet area, was actually in search of a garden home. The agency helped the client in locating a property at Palm Jumeirah, worth Dh.9mn four bedroom villa, with an area of 6500sq. ft., whose owner was looking to sell it.
The agency helped both owners to meet up and signed a deal between them. The advantage of such a deal, in this particular case, was that the person who was swapping his garden home property for the shoreline apartment, got an get hold of extra cash.
The agency charges the buyer and seller one percent of property value as commission. Speaking about the Dubai property market, Smith urged banks and lending institutions to raise the loan-to-value ratios once again, to the earlier 80 to 85 percent level, to reinvigorate sales.
Smith feels that even if prices are dropping in Dubai, it is still an attractive destination considering the investor's return and rental yield.
The value of residential properties in Dubai has climbed 5% during third quarter, when compared to second quarter of this year, while the average price for homes has risen by 7%.
Being the second largest Arab economy, next only to Saudi Arabia, the UAE has plenty of current surpluses and can easily depend on sovereign wealth to cover the financial cost of property projects, despite the poor investment returns in 2008, the Citigroup explained.
But unlike in Dubai, Abu Dhabi outstrips supply for all segments of property sector. At present scarcity of prime office space has led to increase in rents by 40 percent during the period 2005-06, by 10 percent in 2006-07, and 14 percent in 2008.
Despite the huge rental increase, the average prime rates are competitive, considering the global values. The rents in Abu Dhabi are still behind London and Hong Kong, Singapore, Moscow and Tokyo.
The supply in residential sector is expected to surpass demand by 2012. According to Citigroup, the extremely low vacancy rates, high price and rental increases of properties, would continue to boost sales and rents in residential segment. Even the retail sector can relax and enjoy solid increase as long as the existing supply stock lasts.
Pointing to the "Plan Abu Dhabi 2030", which briefs the development framework for Abu Dhabi, the Citigroup noted that is a prime tourist destination with a huge mix of leisure tourists and business travelers. Also, the national spending power contributes to the retail market in Abu Dhabi, as against Dubai which depends on tourist inflows.
Citigroup has the third largest GDP per capita, and given the strong growth forecasts and oil surpluses, it seems that national spending levels seem to continue to rise, the Citigroup explained.
Thursday, December 11, 2008
Although, several other projects were announced that claimed to surpass Burj Dubai's height, analysts now agree that all such projects would require several billions for completion, and hence, they have all been bought to a halt.
The crisis is expected to govern global lives for the next three to five years, and an additional five years at least, would be required for the towers to surpass the 818 meters final height of Burj Dubai, and hence, it is now safe to say that the astonishing landmark, Burj Dubai, would cement its place as the world's tallest building till 2019.
About four projects have been announced till date to outstrip Dubai. One being the Al Burj Tower by Nakheel in Dubai, the others are the Murjan Tower 1 in Bahrain, Burj Mubarak al-Kabir in Kuwait, and a kilometer high tower for Jeddah by Saudi Arabian Prince Al-Waleed bin Talal.
Located in Business Bay district of Dubai, the Burj Dubai, the tallest man-made structure ever, will be ready for occupation in September 2009. The building, which forms a part of the 2 Square Kilometer development, called 'Downtown Dubai' along the Sheikh Zayed Road at Doha Street, holds records of being the tallest structure, tallest freestanding structure, building with maximum floors, in the world.
Speaking during the recently held Urban Waterfront Conference, the experts revealed that the global market value of waterfront developments was set to exceed $500bn within next five years.
Housing three Palm projects, The World, and Waterfront, in pipeline, Dubai is set to be one of the major active locations in terms of waterfront developments, the experts revealed.
Although temporarily these projects are on hold, investments in Dubai are continuing to grow. So far, despite the global financial crisis, Dubai has been the most attractive destination for investors around the world till date, with an investment of more than Dh.158bn being invested during the year. This is in comparison to Dh.151bn investments last year, said Ahmet Kayhan, Chief Executive of Reidin.com.
As per the figures, the top investor countries in Dubai are India, Saudi Arabia, Russia, UK, Iran, Oman, Canada, Bahrain and Kuwait, apart from few other countries such as Pakistan, Singapore and Afghanistan having invested during the first three quarter of this year.
Monday, December 08, 2008
According to the Chief Executive of Dynasty Zarooni, Kabir Mulchandani, the current short-term problem needs to be tackled, as several buyers do not have access to mortgage or loans. Hence, the company has launched a monthly payment scheme, so that customers could enter the market in a bigger way. The company has also lowered their prices of both freehold and rental properties. Several of their properties have been placed into the rental market from the freehold sales.
"The flexi-payment scheme will help release the stocks, which will get utilized by end-users in the market, as there is a high demand for new supplies in the market," Mulchandani said.
Peter Penhall, the Chief Executive of Gowealthy.com, an online property portal, said that the market is now correcting itself and there is a liquidity crunch, while the banks are also tightening lending measures. The company has launched a sales campaign for Axis Residences at Dubai Silicon Oasis by GGICO. About 657 units were released and the buyers were allowed to make payments in 100 monthly installments, with three percent down-payment while registering for the property.
Emaar Properties, last month, launched the 'To Own' schemes which were meant to make property purchases much easier for customers. The programmes, titled "Plan to Own" and "Rent to Own" were aimed to strengthen the property sector by enabling easier purchases and making property purchase more affordable for customers.
The Executive Chairman of Omniyat Properties, Mehdi Amjad, also agreed that with mortgages getting harder to obtain these days, his company is also considering new payment plans to motivate customers. Earlier, Omniyat had launched a 50-50 payment plan, wherein 50 percent payment was paid during construction and the rest 50 percent was paid upon completion of the project. The company agrees that a similar payment program would soon be launched.
According to officials, smart marketing techniques, attractive payment schemes, a good price, and a good product, could all help developers to ride out of the current real estate slump.
Sunday, December 07, 2008
The company had organized an orientation programme to inform the owners about the handover, which is being done ahead of scheduled date.
The orientation programme was organized to update customers with the final documentation procedures, including facilities management contract and amenities at the tower. The orientation was held on 29th November at the Grand Hyatt hotel.
According to Chief Executive Officer of Deyaar, Markus Giebel, the delivery of Al Seef 2 emphasizes the continued commitment by Deyaar towards offering customers with best international quality and service experience and its strict adherence to stipulated time-frames.
Despite the current global challenges, Deyaar continues to focus on business growth and development of iconic communities. Al Seef II is known for its unique architecture and is positioned in one of the most renowned and much sought-after locations in Dubai, offering a world-class lifestyle, Giebel added.
Located at the Jumeirah Lakes Towers (JLT) development, Al Seef II comprises 210 double and triple bedroom apartments and penthouses with lake views. The tower is equipped with modern amenities, including a health club, ample parking space and access to a range of retail amenities.
Located adjacent to Sheikh Zayed Road between Interchange five and six, the Jumeirah Lake Towers includes several high-rise commercial and residential towers. It is located in close proximity to other signature developments such as the Palm Jumeirah, Mall of Emirates, and Emirates Golf Course, and other three major business hubs in Dubai, such as the Dubai Media City, Dubai Internet City and the Jebel Ali Free Zone.
According to a statement by the company, the business strategies and phasing and rollout of Jumeirah Gardens are being reviewed in the most opportune way to cater to the changing requirements of investors.
The mega-project was launched by the company during the Dubai Cityscape exhibition held in October. The project, which had been due for construction over a 12-year period, will include 7 distinct areas, covering 110million square feet of land, including the islands.
One section would comprise the Dubai Park, which will be half the size of Safa Park. The Phase one of the project will cover 820,000 square meters and include low, mid and high-rise office, residential and retail buildings, apart from two hotels and a shopping arena.
It will also include several sky-rise towers, including the 1 Dubai, which is hoped to be one of the largest and tallest buildings in the world.
The Dubai Government has already established a panel to supervise the launch of future realty projects in the emirate, in view of the global economic turmoil. Such a panel has been established for the first time in Dubai.
The panel will however not look at projects that have already been launched, said Nasser Al Shaikh, the Director-General, Dubai Department of Finance.
"No projects will be called off and it will be up to the committee to decide on the launch," Al Shaikh said.
Thursday, December 04, 2008
The MAG 218 residential tower, comprising 555 apartments spreading over 66 storeys, has reached the 45th floor in height.
According to the Chief Executive Officer of the MAG Group, Mohammed Nimer, the company had opened the full-floor show apartments, 18 months prior to handover date, for the owners to view the quality of finish. This emphasizes the commitment by the company towards customers, and their confidence in keeping up to their promise.
The MAG 218 Tower is one of the several freehold residential towers located at the Dubai Marina, opposite the Jumeirah Lake Towers, next to Dubai Media City. The tower has been designed by Dar Al-Handasah, and will be located next to Marina Pinnacle and the Marina Heights.
Covering an area of 36,887 square feet, the 66 storey tower will comprise total of 330 single bedroom and 220 double bedroom units. The units of the Dh.350mn worth tower range from 78 to 167 square meters in size.
The MAG tower has below and above ground parking, podium roof with swimming pool and Jacuzzi, BBQ area, TV room, outdoor terrace, ball room, gymnasiums, and community health club floor with community hall. The top five storeys feature a full glass exterior.
The clarification came, following the announcement made by Nakheel that few of its projects in Palm Jebel Ali may be scaled down.
Azizi Investments have a total of five projects planned at the Palm Jebel Ali. The concept design of Azizi Crystal at Crescent A of the Palm received approval last week.
The Company in its statement yesterday, said that the developments at Palm Jebel Ali are located in Crescent A and Crescent E, wherein work by Nakheel is progressing as scheduled.
The land will be handed over to Azizi Investments by Nakheel next year. Crescent A is scheduled to be complete, latest by March, and construction work will commence by April. The project would require 2 years for completion, said a spokesperson from the company.
The land in Crescent E will be handed over by the third quarter of 2009.
The projects by Azizi Investments on the Palm Jebel Ali are the Azizi Diamond, Azizi Fontanne, Azizi Crystal and Azizi Platine on Crescent A, and Azizi Onyx on Crescent E. The company is committed to deliver the project as scheduled.
"We are focusing on quality of design, quality of build and outstanding customer service. We understand the need for Nakheel to scale back on its projects, given the current economic climate, but we are pleased that this does not affect our progress," the company said.
The company also confirmed that it is moving ahead with projects at Mina Rashid and Al Furjan and other Nakheel projects that remain unaffected.
The company also said that the Dh.3.5bn worth construction contract for the 12 plots that it owns at Al Furjan would be awarded soon. The company is under negotiations with various companies, including Arabtec, Al Naboodah and Al Shafar General Contracting for awarding the contract. The soil testing and piling work has been completed.
Monday, December 01, 2008
- Mega projects on hold
- Property companies axe jobs
- Smaller realty companies planning merger
With Dubai property sector undergoing a transitional phase, companies are reviewing their project strategies, and developers are more cautious with their future investments on projects, as several mega-developments are now being reviewed.
Even work on 'The Universe' will be restricted to preliminary studies, Nakheel said. Decrease in liquidity and financing has led to delay in progress of such projects, resulting in these projects bearing the brunt of financial turmoil. The mega-projects that had earlier brought about a property boom in Dubai, have now been put on hold.
Limitless too, revealed that it is reviewing construction schedule of Arabian Canal. The Head of Dubai's RERA, Marwan bin Galita, said that developers need to review their projects which are yet to be launched for sale. Recession is a very crucial phase, and RERA had been urging developers to do this about a year back, Galita said.
The Chairman of Crisis Management Committee, Mohammad al Abbar, last week said that it would pull back on its building spree due to the current financial crisis. Apart from backing out of its projects, Nakheel has also laid off 500 employees, constituting 15 percent of the company's work-force. All the 500 employees were offered redundancy package, including outplacement support services to assist them during this transitional phase.
Better Homes, Damac and Omniyat too, have followed suit, with Better Homes axing 50 jobs, Omniyat with 69 jobs, and Damac laid off 200 jobs, with the drop in demand for properties.
Meeras however, said that it does not have plans for lay-offs at the moment.
According to analysts, about 819 employees have lost their jobs in the Dubai real estate sector till date, with more to follow. However, the Head of Research and Consultancy at Cluttons, Matthew Green, said that these happenings are not restricted to the realty sector alone, and few other major corporate too, have announced staff reductions.
In the meanwhile, the time is now appropriate for small developers to join hands to bring confidence back into the market, say analysts.
A member of Financial Crisis Committee said that Dubai has been witnessing plenty of defaults on high-end properties with worsening financial conditions, and there are possibilities of merger among smaller developers. Even Head of RERA, Marwan bin Galita, agrees that merger between small companies would bring in more confidence, as good mergers in any sector adds more value to the sector.
The developers, Union Properties and Deyaar, although denied talks about any plans of merger, they were unable to comment on whether the government would order their merger.
Secondary prices in Dubai and Abu Dhabi fell 4 to 5 percent in October from the previous month, while the villa prices of Dubai dropped by 19 percent, under strict lending conditions, according to a recent HSBC statement.
The "off-plan" market is not doing too well, due to market speculations. Few of the banks have stopped financing, while few developers are said to be demanding exorbitant prices. However, the prices of "affordable" off-plan properties may pick-up during second quarter of 2009, if the banks improve on their lending, Bin Galita said.
RERA is likely to implement a new law on registration of off-plan properties next week.
On the whole, Dubai real estate sector has met with stringent mortgage lending measures, liquidity crunch, and real estate slowdown during recent months. The indications of property boom in Dubai, have atleast, temporarily halted, and developers are seen scaling back on their projects, while jobs are cut and property prices have plummeted.