Thursday, April 30, 2009

Dubai, Abu Dhabi top cities in the Middle East

Dubai and Abu Dhabi are the top two cities in the Middle East, reveals the latest global survey report by Mercer, the leading investment services provider.

Followed by the rankings of last year, Dubai has moved up six places in the annual survey from 83 percent last year to 77 percent this year. This increase has been attributed to the improved transport amenities, development of road infrastructure and expansion of international airport and telecommunication amenities and other consumer facilities, the survey reveals.

Meanwhile, Abu Dhabi holds the 84th position this year, compared to 87th place in 2008. This is due to increase in international schools, recreational amenities and development of the airport and increased accessibility to new networks by Etihad Airways, the national airline.

The Mercer rankings are rated based on a point scoring index involving 215 cities across the globe, with New York as the base city. The rankings are considered helpful to governments and major companies.

Dubai House Price Index shows 41 percent decline during Q1 2009

The Dubai House Price Index for first quarter of 2009 released by the leading global real estate consultancy, Colliers International, has indicated a drop of 41 percent during the first three months of this year.

The index has been compiled using mortgage transaction data from financial institutions accounting to 60 percent of the mortgage market in Dubai. It demonstrates a 34 percent decline year-on-year between first quarter of 2008 and first quarter of 2009.

The property prices in the emirate had returned to the levels equivalent to that during Q2 2007, the report pointed out. When compared to other markets in the Gulf, the global crisis has had a huge impact on Dubai, mainly due to high level of integration with global economy as a regional hub, and the wide speculation in property assets before the market's peak during third quarter of 2008.

Speaking about the Q1 2009 report, the Chief Executive Officer of Colliers International, John Davis, said that the negative sentiment is a major factor contributing to decline in the index and availability of finance too has a major impact on the market. The end-users are more concerned about job security, and hence are hesitant to enter the market, despite the finances being open for them.

Looking at the brighter side of things, the index remains unaltered as in March 2009. But, it is too early to predict whether the halt in decline of the index can be sustained during the quieter summer months, Davis said.

The House Price Index takes into account the price trends achieved for completed properties, as against the properties that are still under construction. The results obtained by including the Burj Dubai development in the results, the index indicates that completed properties fell 31 percent, while the properties under construction fell 56 percent. Keeping aside the Burj Dubai, the completed projects fell 32 percent, while those under construction fell 51 percent.
Mortgage lending is beginning to revive in the emirate, with several financial institutions re-entering the market, Davis pointed out.

Tuesday, April 28, 2009

Compensation offered for affected property owners in Dubai

The Deputy Ruler of Dubai and the Chairman of Dubai Municipality, Sheikh Hamdan Bin Rashid Al Maktoum has announced Dh.67.97mn as compensation to citizens possessing properties affected by public planning projects, designed for re-planning and development of the city of Dubai.

The Director General of Municipality, Eng. Hussein Nasser Lootah, said that the government is taking necessary measures to fast-track the disbursement of compensation to the owners of these lands located in several areas of Dubai.

This initiative is a part of the effort by the government to develop various areas in the emirate.

Few of the affected areas are the Jumeirah-1, Hor Al Anz, Al Jafilliya, Al Muraqqabat, Al Refa'ah, Al Rawyah, Al Muteena, Abu Hail, Mankhool and Al Quoz-2.

More information in this regard can be obtained by contacting the following address:

Ismail Meladi
Senior Media Officer, Media Section
Corporate Marketing & Relations Dept.
Dubai Municipality
+971 4 2064657
+971 4 2232188
+971 50 6341075

Downtown Jebel Ali plots ready for developers to commence work

Developers who have invested in Downtown Jebel Ali are free to take possession of their land and commence work, announced Limitless, the global master developer.

About 250 plots are all ready to be delivered to all 122 developers who had purchased land in the 200 hectare project, where the infrastructure work is progressing as scheduled.

According to Salah Ameen, the Project Director of Jebel Ali, this milestone underscores the commitment by the company to the clients, to the project, and to the future of Dubai. Developers can now break ground and the company would focus on infrastructure work to ensure that buildings are all connected to the utilities on completion.

The Downtown Jebel Ali is a combination of recreation, shopping, working and quality living, all within easy access of Dubai and located just 45 minutes from Abu Dhabi. The Downtown will be served by the Dubai Metro and will have its own environmentally-friendly people mover system, reducing road congestion and underpinning Limitless commitment to moving people and not just the cars.

Located along the Sheikh Zayed Road stretch, the Techno Park and the Jebel Ali Free Zone will include 326 buildings, 237 residential towers and four zones with three distinct districts -The Trellis, The Urban Center and The Medina, which will have a combination of residential, business, dining and entertainment amenities.

Monday, April 27, 2009

Deyaar ready to handover Madison Residency project

Deyaar Development, one of the major property companies in Dubai, will hand over all its completed units of the Madison Residency project on 16th May 2009.

The Madison Residency, comprising 26 storeys, includes 312 residential units, 161 luxury studio apartments, and is the first of seven buildings due to be handed over in 2009.
Deyaar also plans to organize an orientation programme advising all homeowners about handover the process.

This is essential to provide customers with the opportunity to understand the exact documentation procedure for the final handover, and the facilities management contract, said Markus Giebel, the Chief Executive Officer of Deyaar.

Deyaar also revealed that it plans to put few of its real estate projects on hold, reducing prices on select projects and refunding its customers who made partial payments on few of their projects. Few of the projects that have already been put on hold by the company are the Deyaar Park, Deyaar Enclave and Mirar Residences.

Hydra Properties offers easy payment options to buyers

Leading Dubai-based property developer, Hydra Properties, has issued fresh contracts to its buyers offering easy payment options. The initiative follows complaints lodged by buyers about delays in construction and the unfair price hikes on their purchases. The firm also plans to double its customer services staff strength.

Last month, a group of 50 investors, who joined together to form an action group, put forward their grievance to the company, claiming that prices have risen by 15 percent, despite the drop in construction costs and softening of housing prices.

Hydra argued that it was operating within the law and emphasized on the fact that the investors had been kept aware about the progress of the project ever-since the signing of contracts.

The Clause 12.8 of the contract states that the Landlord has the ability to make adjustments to the sale price of the property with respect to the rise in costs such as exchange rates of foreign currencies, inflation, accrued interest (if any), materials etc., or any other matters affecting the cost of the property.

It has now been learnt that Hydra is preparing contracts which would require purchasers at Hydra Village to pay 2.5 percent every two months till the completion of project in 2011, as against the earlier plan which requires them to pay 10 percent every three months until completion during the course of this year.

Hydra is also modifying a penalty clause which levies Dh.500 per day for late payers. This is now Dh.100 for 15 days and Dh.500 per day after that. Hydra will also pay buyers Dh.1000 a month, if it is more than six months overdue in delivering a project.

The Sales and Services Manager at Hydra, Ahmed Khalil, said "We are revising our contract to create a fair balance of the rights of Hydra and the investor."

The company is also planning monthly construction progress reports and a quarterly publication that would focus about the happening within the company.

Saturday, April 25, 2009

Meidin Holding announces Dh 6bn worth projects in UAE

Meidin Holding, the Abu-Dhabi based property investment firm, has announced its plans to invest Dh.6bn in two projects in Umm Al Quwain.

This includes development of a Dh.4.5bn Amwaj Resort, which includes residential and commercial units, a hotel, and a large shopping mall. The project houses 1820 apartments in two residential towers, a 408 room hotel, and a shopping mall spread across 30,365 square meters and 588 car parking space.

The second project is a shopping mall spread across 2.7mn space, namely the Delma Mall, to be opened in Musaffah shortly. This is worth Dh.1.5bn. The Chairman of Midein Holding, Omair Saoud Arrar Al Dhaheri, said that the construction of the projects will be funded by the company's own resources, and it will not seek funds from the banks, as it would make the projects more expensive under the current situation.

Amwaj has already received a strong investor response, with 70 percent sales achieved, majority of which are from expats.

The hotel too will cater mostly to western tourists, as Umm Al Quwain has a calm and serene environment, away from the busy city life, and several tourists come here to enjoy the natural beauty and serenity of the place, Al Dhaheri said.

Apart from these projects, the company is currently building a fifty storey commercial tower at the Dubai Square.

Friday, April 24, 2009

Mohammed Bin Zayed City residential towers design finalized

The design of residential towers in Abu Dhabi's Mohammed Bin Zayed City has been finalized. On completion, the city will have the capacity to accommodate about 85,000 residents, it is said.

The Head of Planning and Co-ordination in the Town Planning Section of Abu Dhabi Municipality, Fadhl Al Braiki, said that stage one of the project is completed, and the design of the 349 residential towers have been finalized. Out of these, 12,000 residential units will be completed by 2012.

Located 15 to 20 kilometers away from the city, the development covers a gross built-up area of 5.8million square meters. The highest tower will include 22 storeys, while the lowest will cover 12 storeys. Each tower costs about Dh.70million, and includes shops, commercial establishments and underground parking.

The next stage of the project is to design the other services, including utilities, and the construction of towers and infrastructure projects will be completed simultaneously, Al Braiki said.

The project is hoped to ease the housing shortage in the emirate, as it targets the mid-income sector.

Wednesday, April 22, 2009

New futuristic District for Abu Dhabi unveiled during Cityscape 2009

The Abu Dhabi Urban Planning Council (UPC) has unveiled details of Capital City District, a major development project in Plan Abu Dhabi 2030. The UPC is the agency responsible for physical planning of Abu Dhabi's future.

The details of the project were revealed during the Cityscape Abu Dhabi 2009, the largest real estate exhibition, which began in Abu Dhabi yesterday.

The entire project would take 25 years for completion and will be built on 50 million square meters of land, almost twice the size of Yas Island. On completion, the Capital District will serve as a second downtown and can house a population of 370,000. The district will offer a mixed-use, sustainable environment featuring commercial, residential, retail and community groups.

Other vital aspects of the masterplan are the schools seving both Emirati and expat community needs, universities, medical campus, higher education amenities and bio-medical research facilities.

Located between the Mohammad bin Zayed City and the Abu Dhabi International Airport, the Capital City District will blend national government institutions, Emirati culture, and city life by offering a fusion of distinct districts interlinked by grand boulevards, open spaces, shaded streets and world-class public transit system.

Located at the heart of Capital City District will be a Federal Precinct, which serves as the national seat of the UAE government. The Capital Boulevard would include Federal ministries and government offices providing a dramatic connection to the Grand Mosque and Presidential Palace.

There would be a total of seven grand boulevards, representing seven emirates, connecting the city center with surrounding districts. The boulevards would help in effective traffic movement within and out of city. An interlinked street system is also an integral part of the master-plan, which encourages walking in the shaded and landscaped pathways. There are also dedicated bike routes offering a safe and convenient alternative travel option across the city.

The residents and visitors of the District can gain access to two main types of streets - the retail streets lined with shops, restaurants, cafes and plazas and the relaxing neighbourhood streets.

Monday, April 20, 2009

Dubai realty sector opens up productive investment opportunities

The correction in the property prices in Dubai will open up several productive investment opportunities in the sector within the next 24 months, revealed a report by Jones LangLa Salle, the real estate advisory firm.

The recent Investor Sentiment Survey carried out by the company reveal that with considerable adjustments already made in the capital and rental values already in place, during the next two years, Dubai will surely be one of the most attractive real estate investment markets in the region.

The property and construction sector in Dubai is undergoing a correction, with several large scale projects either on hold or scrapped altogether, and the prices are easing. However, developers in Dubai are considering this period as an opportunity to re-assess developments and re-focus on end-user elements, such as increased flexibility in payment plans.

The price adjustment will help Dubai immensely, as investors are attracted towards fairer values and better yields. Early signs of activity are already visible, the Survey indicates.

The government too has offered financial assistance by issuing $10bn bond. This is believed to help real estate firms immensely, and this will help in driving up investor sentiments, in a major segment of Dubai's economy. Further, the government has also pledged to continue with infrastructure spending to complete all major projects.

From a regional perspective, the Jones Lang LaSalle report points towards optimism among investors, over the prospects of Middle East Real Estate Sector, a major driver of the market.

2010, best time to invest in Middle East realty sector

With the investors beginning to consider Abu Dhabi as the top regional market in terms of city competitiveness, the year 2010 would be the best time to invest in the Middle East and North Africa (MENA) real estate market, says a new report.

The Head of MENA Investment Transactions at Jones Lang LaSalle, Ian Ohan, says "Investors expect Abu Dhabi to be the best performing property market in the MENA region during the next one or two years."

Given the current scarcity of institutional quality real estate in most sectors of the market, investors are finding the most attractive investment environment in Abu Dhabi, compared to other major markets in the region.

The long-term success and sustainability of the city, including the planned infrastructure, real estate planning, strong corporate governance, environment sustainability, quality of leadership and political stability have all further contributed to this fact.

The financial strength of the government also offers a solid platform for continued infrastructure spending over the next couple of years. As in the other markets, decreased cost of construction and falling land values would result in high returns, particularly, on the projects at their early stages of development.

According to a Jones Lang LaSalle report in March, the Abu Dhabi market is dominated by government-related companies, who are beginning to intervene to rationalize and delay projects, thereby avoiding potential over-supply in future.

Saudi Arabia is also increasingly being considered as offering strong potential, with several respondents suggesting that it would be the strongest performing property markets across the MENA region in the next one or two years.

However, despite concerns over short-term risks, Dubai has been ranked second (following Abu Dhabi) on the most of long-term underlying factors, which promises a recovery of the market in the medium-term. With significant market adjustments in rental values and capital, already in place, Dubai too, may be one of the most lucrative property investment opportunities in the region.

Cityscape Abu Dhabi 2009 opens with fresh hope to tackle crisis

Cityscape Abu Dhabi
The four-day annual property exhibition, Cityscape Abu Dhabi 2009, has been unveiled at the Abu Dhabi National Exhibition Center on Sunday.

The show involves participation of both regional and international investors, government authorities, real estate developers who intend to discuss the current market challenges and strategies to tackle them.

The event was inaugurated by General Shaikh Mohammed Bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and the Deputy Supreme Commander of the UAE Armed Forces. When touring the exhibition, General Shaikh Mohammad was briefed by exhibitors about their developments.

There are about 40 or more participating companies in the event. An executive from Sorouh Real Estate said that few developers have been offering affordable housing for all levels of income. This is an important development, as earlier, only prominence was given only for high-end property developments, he added.

A senior executive of Aldar Properties, one of the largest property development companies in Abu Dhabi, Ousama Ghannoum, said that several banks and finance houses have come forward offering loans to potential buyers, which would generate interest in various developments in and around Abu Dhabi City and the emirate.

The Managing Director of Ascon Group, Abid Junaid, said that this year's Cityscape is hoped to re-instill the consumer confidence in the property sector and help in revival of the sector.

Abu Dhabi has a better hold and can capitalize on the relative weakness of other property markets facing turmoil and uncertainty due to global economic recession. This is because the emirate has the largest sovereign wealth fund and the long-term plans for continued real estate and infrastructure development.

This year's Cityscape is likely to be 32 percent bigger than its last year's edition and covers a gross area of more than 38.000 square meters.

New projects are to be announced at the exhibitions, including one by Aldar Properties.

Saturday, April 18, 2009

Ajman bans developers from announcing buy-back schemes

Ajman has banned developers from offering Buyback schemes to purchasers for promotion and sale of their projects, a senior government official in Ajman revealed.

The Director General of ARRA (Ajman Real Estate Regulatory Agency), Omar Al Barguthi, said that few developers are offering such schemes, and this practice need to be stopped.

With the land and property prices shooting up in Dubai during 2007, Ajman came to be known as the destination with most affordable housing targeted for the mid-income group. Several projects were unveiled during this period, which lured customers with promises of residency visas and guaranteed buyback of units.

Barguthi clarified that few developers misused some information for publicity and mislead investors. Hence now the developers are banned from coming up with any campaign unless they receive a written approval from ARRA.

The developers have been banned from advertising about visas, unless ARRA grants them the permission to do so after proper verification about their ability to do it.

Cityscape Abu Dhabi to kick-start on 19th April

The Cityscape Abu Dhabi, the international property investment and development event, will be held between April 19th and 22nd 2009 at the Abu Dhabi National Exhibition Center (ADNEC), it has been announced.

This year's event is hoped to be 32 percent bigger than last year's event, and would cover an area of more than 38,000 square meters.

Ever-since its launch in 2007, the Cityscape Abu Dhabi has grown considerably year after year.

This growth will continue this year too, due to expansion of ADNEC's exhibition facilities to create the largest exhibition center in the Gulf.

This year's event has six additional halls, making the event to span across 9 exhibition halls, apart from the Atrium.

The Cityscape is an annual networking exhibition and conference that focuses on all aspects of property development. It attracts property developers, regional and international investors, lead architects and designers to an annual forum that celebrates the best in architecture, real estate, urban planning and design.

The event is open on the said days from 10am to 7pm at ADNEC.

Friday, April 17, 2009

Rents in Abu Dhabi higher than in Dubai

Rental in Abu Dhabi continues to remain strong are likely to remain so, despite the decline in rents in the other GCC nations owing to the global financial crisis.

The leading property management company, Asteco, has reported that residential and commercial rents have dropped very little during the first quarter of this year, inline with capital values. The scarcity in supply of residential and commercial units has led to high demand for quality office and apartments.

Companies are also reducing the accommodation allowance of staff, which has made its impact felt on the ability of tenants to rent at current levels.

Residential apartments in the Corniche and Khalidiya are the most popular, and rentals are high in these areas. The average annual rent for a single bedroom apartment in these areas are Dh.252,500 and Dh.170,000 respectively.

Just as in Dubai, even here, the local investors do not agree to lower their prices on vacant units. However, expatriate owners have reduced their apartment rents by almost 20 percent.

Villas in Bateen and Khalidiya are expensive with Dh.365,000 being charged per year for a three bedroom apartment, while Dh.410,000 and Dh.475,000 are being charged for four bedroom and five bedrooms.

On the whole, the rents in Abu Dhabi seem to be more expensive than in Dubai, in contrast to the usual norm.

The Managing Director of Asteco, Andrew Chambers, has warned that due to shortage of supply, Abu Dhabi is just being perceived differently. About 5000 to 6000 new apartments would come on the market during early 2010.

This extra stock would give tenants a better range of properties to choose from, and offer better flexibility in negotiating with landlords. There is an increase in residential apartments in the Passport Road, Hamdan Street, Corniche and Muroor areas. More villas would enter the market this year, particularly in the Golf Gardens, Al Reef and Khalifa City A and Al Raha Gardens.

As for the commercial rents, there is still strong demand noticed for Grade A office units, while substandard properties have seen a decrease in rents. Office spaces have dropped 27 percent on Defence Street and Muroor, and by 25 percent on Passport Road.

Emaar announces International Village Festival in Dubai

Leading property developer, the Emaar Properties, has announced a fifteen day cultural and retail festival, due to take place at the Emaar Boulevard in Downtown Burj Dubai from 17th April 2009 to 2nd May 2009.

Known as the International Village, the festival showcases a diverse range of products from about 20 countries, across 41 pavilions.

Designed to suit various cultures, the festival will display products, artifacts and general paraphernalia from countries such as Europe, Africa, India, Korea, China, Singapore, Thailand, Pakistan, Phillipines, UAE, Tunisia and Vietnam and other Middle Eastern countries. The participating countries will represent their cultural ethos by way of their retailed products. This would be further complimented by country-specific cultural programmes and entertainment.

Dubai being the cultural hub of the region, such an event would help in strengthening the tourist appeal, by establishing Downtown Burj Dubai as a must-visit tourist destination, says Ahmad Al Matrooshi, Managing Director of Emaar Properties at UAE.

International Village reflects Emaar's promise to be the lifestyle center that further complements the other attractions in Downtown Burj Dubai, such as The Dubai Fountain.
Visitors to the family festival will be treated to a rich diversity of shopping choices from several parts of the world, apart from cultural performances. The pavilions set up along the Village will display a collection of handicrafts, jewelry, artifacts, traditional dresses, clothing, home accessories, silverware, crystals, perfumes and food items.

International Village will be held periodically at the Emaar Boulevard, and forms a part of Downtown Burj Dubai's plans to enlighten the boulevard. The festival will be open on the said days from 4pm to 11pm during weekdays and from 4pm to midnight on weekends and holidays.

Emaar Boulevard has been designed to be the nerve-center of activity in the city, and a celebration of downtown culture with high-fashion shops, cafes, hotels, and walkways.

Wednesday, April 15, 2009

Limitless confirms handover of 600 units at Jebel Ali this year

Limitless has announced handover of 600 residential units and about 900,000 square foot of commercial space in the Dh.70bn township development of Downtown Jebel Ali.

The 600 residential units of the two buildings and the 900,000 square feet commercial space would be handed over by the end of the year on lease-basis.

Limitless Downtown Jebel Ali
The Downtown Jebel Ali plot comprises 329 plots, with about 300 of them being sold out to third party developers. The rest of the plots will be retained by the company for its own development.
The Downtown Jebel Ali project includes four blocks and there are plazas located in the center of each zone. The ground-breaking on the first plaza will be done by the end of this year. Speaking about the project, Salah Ameen, Project Director said that there are already four commercial buildings built within Downtown Jebel Ali, and 60 percent of these are either leased or occupied completely.

By the end of the year, eight buildings in Downtown Jebel Ali would be leased. The final date of completion of construction is yet to be announced, Ameen said. Limitless said that so far there are several enquiries from people interested in the residential units of the master development.
Early this month, Limitless had made 38 percent of its staff redundant, while also delaying the second phase of Arabian Canal project, owing to global financial crunch.

Work initiated at Tameer's Platinum Towers

Platinum tower at Business Bay
Tameer, the leading property developer, has commenced its works on the mixed-use twin tower development located at Dubai’s Business Bay, namely, The Platinum Towers.

The CEO of Tameer, Ghassan Sheiknini, expressed his happiness over the commencement of works, and said that this emphasizes the commitment by the company to meet the expectations of investors and customers.

The Development Director of Platinum Towers, John Zwets, said that the site mobilization, which began in early February, has been continuing for the past couple of weeks.

In the next few weeks, the secant-wall piles will be installed to retain the parking basement excavation, he revealed.

Located at the heart of Dubai's Business Bay, the Platinum Towers includes two 29-storey towers, positioned adjacent to each other. Each tower comprises 3 basements, one ground floor with state-of-the-art amenities, including health club, gymnasium hall, 984 parking spaces and shopping amenities.

Tuesday, April 14, 2009

The Springs, voted the best hotspot for purchase or rent

The Springs has been voted as the best hotspot for purchase or rent of property in Dubai during the month of February, reveal the latest findings by the property portal propertyfinder. ae.

The Springs accounted for more than 22 percent rental inquiries during the month, and 13 percent of the total inquiries in February.

The findings reveal that both buyers and renters are looking to move further out of traditional residential hubs in Dubai, to locations such as the Jumeirah Lake Towers, The Springs, and the Discovery Gardens.

The Head of Marketing at propertyfinder, Marcello Sambartolo, said that this survey has revealed interesting statistics, as a total shift in rental interest is noticed towards new residential areas such as Jumeirah Lake Towers and Discovery Gardens, where the rents are more competitive.

According to the data, there is an interest from end-users seeking to invest in Dubai real estate, as it is offering opportunities to capitalize on the drop in housing prices.

The hot spots for Feb'09 are:

To buy (Feb 2009):
1. The Springs - 13.52%
2. Jumeirah Lake Towers - 11.21%
3. Dubai Sports City - 8.03%
4. International City - 8.69%
5. Dubai Marina - 7.85%

To rent (Feb 2009)
1. The Springs 22.69%
2. Discovery Gardens 19.28%
3. The Lake 8.75%
4. Dubai Marina 7.72%
5. Arabian Ranches 6.66%

Monday, April 13, 2009

Abu Dhabi property sector welcomes foreign buyers for the first time

Al Reef Development by the Manazel Real Estate is progressing as scheduled, and is the first property project to deliver homes in Abu Dhabi, which can be purchased by foreigners. Also, the Al Raha Beach, by Aldar Properties, is also on its way towards completion of its first phase of the development.

Al Reef includes 2380 villas and 1810 apartments near the Abu Dhabi International Airport. The first phase of Al Reef villas will be delivered during the third and fourth quarters of this year, while the other phases are scheduled between March and the end of next year. This includes the 46 five-storey apartment buildings of Al Reef Downtown. Al Reef villas and apartments were sold out soon after their launch in 2006.

Manazel, a private developer, is also likely to hand-over the keys of Dunes Village, a 942 apartment project in Dubai, next week to investors. The Dunes Village comprises 19 five-storey buildings in Dubai Investment Park on the Emirates Road. This will be completed by 15th April.

"Dunes and Al Reef are nearly complete, and nothing of it has been altered," said Zeyad al Bakeri, Senior Project Manager at Manazel. However, due to the recession in the property sector, the company had to reschedule its ambitious project, Building Materials City (BMC), extending the construction period to five years, instead of three.

The BMC includes 4151 apartments, offices and a shopping mall. The mall and the two prestige towers are under construction. The towers would be completed in three phases over five years, instead of two-and-a-half years as originally planned.

Sunday, April 12, 2009

Dubai considers new options for selling properties to Britons

The first-ever mass auction of Dubai properties happened last week.

Earlier several Dubai properties were being purchased by investors in the UK. However, with the Pound value plunging to record-lows, mortgages slowed down, and several of the developments in the city were put on hold, traditional methods to showcase developments to Britons are no more successful.

The Managing Director of Properties Dubai, Asif Choudhary, agreed that they have stopped receiving any inquiries for properties, and hence planned a way out. Auctions are a great way for generating big business in the UK.

The Sales and Marketing Director at Hircon International, Manish Bhatia, said that for any property market to grow stronger it needs to be changed hands from someone who is financially weak to the one who is financially strong.

The off-plan properties were hardly generating sales, except for that of RAK Properties. With several developments in Dubai, being put on hold, British investors were questioning if certain projects, would ever get completed.

Although the bargaining element when buying at an auction is justified, keeping the current scenario in mind, those who listed Dubai Properties were not prepared to given them away.

According to Choudhary, there are two types of sellers in the market currently - those operating at a loss but remain financially stable, and also the overleveraged who would sell for less. But the latter is more than the former in the market.

Bhatia points out that making sales at this point does not indicate a market recovery, and emphasized that for this to happen, lending too, may have to ease.

For a recovery to happen, certain other developments will have to be considered. People may purchase at cheaper prices, but that may not be a sign of recovery. One may have to wait until the lending eases up, he said. Bhatia emphasized that the auction format is an effective strategy, and it would be good to carry out such a format in Dubai.

Choudhary agreed that the market for selling Dubai Properties to people in the UK is yet to recover, but auctions may help in maintaining interest at the movement.

Saturday, April 11, 2009

Rising sea levels puts waterfront projects at high risk

According to a United Nations Report, the rapid rise in sea levels is likely to put waterfront developments at risk.

The Assistant Secretary-General for Disaster Risk Reduction (UNISDR) at Geneva has stated that rising sea levels and water shortage are a cause of concern for the Middle East region.

Speaking on the occasion of Humanitarian Aid and Development Conference, the official stated that low-lying areas, threatened by the sea delta may head for a disaster due to rising sea levels, caused by change in climatic conditions. Expert engineering skills may help in keeping the infrastructure intact, as shifting the infrastructure would be a costly affair.

The first report on disaster risk reality in the MENA region by UNISDR is expected to be launched shortly. The report would focus on the impact of urbanization on climate, the environmental hazards and the eco-system in the region, particularly the Middle East, as it is highly prone to storms, droughts and water shortages.

Setting up a legal framework may help in leading a sustainable future. The Gulf region has plenty of wealth, resources and political determination, and hence the region can play a major role in sustaining its own natural resources, the report said.

Friday, April 10, 2009

Unofficial rental index by Landmark depicts 45% decline in rents

Landmark Advisory has compiled and published an unofficial list of average rents across Dubai, which will be an alternative to official rental index.

This unofficial index gives an updated scenario of the market and will be published every two months. It will also serve as a guide for landlords and tenants, apart by the official index published by the RERA (Real Estate Regulatory Authority).

RERA had confirmed that it would release an updated version of its latest rental guide in April. According to RERA, the new index, due to be released this month, will show a 10 to 15 percent decline in rental prices.

However, the index published by Landmark Advisory, shows a decline of up to 15 percent in rentals.

So far, residents who felt they were highly charged in terms of rent, used to file cases directly to the Rent Committee in Dubai Municipality. But, now the rental index may help in resolving such disputes.

But, Neil, CEO of Landmark Advisory has clarified that the index by Landmark Advisory cannot be used for settling disputes, as people would still require an official index to settle legal cases.

But, this particular index by Landmark, may act as a guide for tenants seeking for rent in various locations of Dubai, he said.

Thursday, April 09, 2009

Sale of off-plan properties are defunct, says developer

Major property developer in Abu Dhabi has termed the off-plan sales model as "defunct", which implies that the companies will have to push in more money during the early stages of projects, in order to gain confidence of the buyers.

This off-plan model has triggered-off the construction and property prices boom in the Emirates, as Dubai was the first to begin selling off-plan homes about a decade ago. However, the buying interest has now dried up, due to lack of mortgage and the confidence levels have dropped, affecting several projects.

For instance, Capitala, a joint-venture between CapitaLand of Singapore and Mubadala Real Estate and Hospitality, is also the developer of 147 hectare site on the Abu Dhabi Island. The company is considering a plan to make most of buyers' payments that are due, after the completion date.

The Deputy Chief Executive of Capitala, Peter Wilding, said that the sale of off-plan model is basically defunct, and that the company is yet to make any official changes, but it is currently being reviewed to change the payment plans.

The first project of Capitala, Arzanah, is a development which focuses on health and active lifestyle. The project includes 9000 homes, a mall, three medical centers, and 7km bike tracks and the existing Sheikh Zayed Stadium and other recreational amenities.

Although Capitala has sold 86 percent of its apartments during its first phase, including 14 villas, the challenge remains as to how to find buyers for unsold units, while also trying to maintain the payment schedule of earlier buyers.

Wilding revealed that the company has planned to begin offering homes that are inline with market demand. For instance, the next phases are more affordable set of buildings, called The Lofts'

Changing payment plan to have the most of money due after construction will help in convincing buyers to make investment, Wilding said. After discussing with the Urban Planning Council, some of the heights aspects of the buildings have been altered to prevent them from blocking views of the Sheikh Zayed Mosque and Sheikh Zayed Stadium.

In short, developers across the country are trying to put up with the fewer sales and reduced cash flow affecting their operations. This impact has even touched the contractors.

Monday, April 06, 2009

New regulation likely for termination of off-plan contracts in Dubai

The Dubai Land Department has amended the Article 11 of Law No.13 regulating the Interim Real Estate Register, and this will be released in 15 days time. Once, released the new regulation is hoped to introduce provision for cancellation of contracts, and is hoped to benefit the market.

The department had already issued an internal circular during November 2008, wherein the circular stated that in case of termination of an off-plan contract, the developer can retain 30 percent of the contract value (30 to 70 percent of the amount paid), and that this would be applicable to amounts exceeding 30 percent.

However, in case of termination of contract, the developer of the property will retain the amounts paid by the buyer, until the real estate is sold.

The Director-General of Dubai Land Department, Sultan Butti bin Mejren, has said that the revised article would establish new grades for properties and developers, and would be more than the 30-70 rule, currently applicable.

The Law No.13, Article 11, which is currently applicable states that a developer is required to keep the Land Department informed, if a buyer breaches a sales contract. Thereafter the department would notify the purchaser personally or by registered mail or email, giving him one month time to fulfill the contractual obligations. At the end of the term, the developer can cancel the contract and refund the sum paid by the buyer, after deducting an amount not more than 30 percent of the total value of the unit.

Saturday, April 04, 2009

Memon initiates work on Gardenia I & II project

Gardenia 1 and 2The leading Dubai-based property developer, Memon Investments, has begun construction on the Dh.150mn worth Gardenia I & II projects, located in Jumeirah Village.

Memon had recently announced awarding of the shoring and excavation contract to International Foundation Group (IFG). The elevator contract was awarded to Shanghai & Arabian Electromechanical.

According to Rizwan Shaikhani, the joint Managing Director from Memon Investments, the uniqueness and quality incorporated into the Gardenia I & II projects, will add to the growing reputation of Jumeirah Village, making it a highly desirable mixed-use destination.

The 'Gardenia I & II' project is a mix of residential, commercial, and retail spaces, featuring residential apartments, including studios, single bedroom, double bedroom and loft apartments, with retail units on the ground floor.

Spread across 811 hectares, the integrated master community, Jumeirah Village is a mixed-use development, which on completion, would include residential and business units, international schools, retail outlets, hospitals, shopping malls, parks, sports fields, boulevards, cafes, restaurants and mosques.

Thursday, April 02, 2009

i-Rise Tower on track for completion in 2010

Realty Capital has announced completion of works on the fifth podium floor slab of its i-Rise Business Tower project. The company has confirmed that the project is on track for its scheduled completion by mid-2010.

At present, work is in progress on two more slabs to complete the podium structure, comprising huge concrete and steel quantities.

Even the mechanical and electrical works are going as scheduled, and the interior designing team has already reviewed the finishes and is working on the best possible design to match the magnificent fa├žade.

Covering a built-up area of 1.8million square feet, i-Rise Tower is one of the largest office towers in the region.

Being one of the major office developments in the region, i-Rise has been successful in generating attention from potential tenants and investors. Hence we are determined to continue with the development, without any delay and complete the project within the scheduled time frame, said Marwan Mansour, CEO of Realty Capital.

On completion, i-Rise tower would comprise 37 storeys with premium facilities like 18 high-speed elevators, retail space, fitness center, restaurants, cafes, and large multi-storey car parking. The unique design of the tower would make it a popular landmark in Dubai.

Limitless announces layoffs, postpones $61bn project

The leading Dubai-based property developer, Limitless, has announced a seven percent reduction in its workforce, and has also put on hold the major $61bn Arabian Canal Project, owing to global economic downturn.

The company, in its statement, mentioned that it has made this difficult, but necessary decision, in response to the current market conditions. Unfortunately, this indicates job-losses for a small proportion of a staff.

The job cuts by Limitless are the latest to hit its parent company, Dubai World.

As for its decision to delay the Arabian Canal project contract, Limitless says "Our invitation for bids on phase 2 of the excavation drew healthy response from local and international firms. We have contacted them to advise them about the postponement of awarding this contract."

However, the company confirmed that the work on Phase One of the Canal is in progress. The company has a vast portfolio of projects in Saudi Arabia, Jordan, India, Russia, Malaysia and Vietnam.