Friday, July 31, 2009

Dubai at risk of further price decline

The already suffering property sector of Dubai is at risk of further price decline with the onset of seasonal summer and Ramadan slowdown, and with more expatriates leaving the emirate, coupled with oversupply, said Moody’s Investors Service on Tuesday.

According to Assistant Vice President and Lead Analyst for Emaar Properties, Martin Kohlhase, the oversupply in the market is unlikely to be resolved in the next one year, given the dynamic supply-demand developments, which would result in prices remaining sluggish or falling further, than over the past nine months.

The booming property market of Dubai had come to a stand-still with the onset of global economic crisis and drop in oil prices, putting an end of the economic boom in the gulf region.

Further, a Reuters poll showed that house prices are likely to drop another 20 percent in 2009.

Several thousands of jobs have been slashed and the redundant expatriates are likely to leave in the near-term, provided they find fresh jobs, Moody's pointed out.

Several expatriates, who were already made redundant, were permitted to stay back until the end of school term in June, without their visas being revoked within the usual 30-day period.

Furthermore, the large-scale lending is yet to resume and property developers have had to face several buyer delinquencies.

Moody's had placed the long-term issuer rating of Emaar and Dubai Holding Commercial Operations Group on review for a possible downgrade on 30th June, following announcement of merger of the two groups.

The merged entity will create a new giant in Dubai real estate market, with unrivalled access to a sizeable land bank. Several other factors such as the opening of Dubai Metro, inauguration of Burj Dubai, and the beginning of summer period would shape Dubai's residential property market in the near future, and this could lead to greater differentiation within Dubai's residential areas, from which DHCOG's and Emaar real estate divisions could benefit, Moody's said.

Thursday, July 30, 2009

Damac's Lago Vista development on-track for completion

Damac Properties has announced that structural works of all three towers of its Lago Vista development at the International Media and Production Zone (IMPZ) have been completed.

Lago Vista is the second project to be completed by Damac at IMPZ, following the completion of The Crescent, a three tower development, early this year.

The Lago Vista development features two 25 storey towers and a 28 storey tower, with studios, single and double bedroom apartments. Due for completion during spring of next year, with work-on-site progressing at a rapid pace, explained Peter Riddoch, CEO of Damac.

He added that the structural work at the development is now complete with the domed roof work under progress in two of the three towers.

According to Riddoch, the advanced level of progress of Lago Vista is a proof to all commitment and spirit of teams on-site.

"It is indeed pleasing to note that Lago Vista is entering its final stages of construction, and will be the main focus for the contractors, when seeking completion of the building during early part of next year", Riddoch said.

Lago Vista has a good Mediterranean-themed fa├žade, accompanied by distinctive domed roof. The building features GRC cladding with apartments offering good views across the surround landscape and man-made lake.

The General Manager-Operations at Damac, Ziad El Chaar, mentioned that Lago Vista is well-positioned to take advantage of most of the facilities at the forthcoming Dubailand complex and the nearby Sports City.

The IMPZ is an initiative by the Dubai Government aimed to create a unique cluster environment for media production companies from across the globe to interact and collaborate effectively. IMPZ will grow to be a great community with the easy access of the Emirates Road lying in proximity to offer good connectivity to other parts of Jebel Ali and Dubai. IMPZ is a part of Dubai's vision to develop itself into a global media hub.

Wednesday, July 29, 2009

More than 400 projects suspended in UAE

About 400 projects, worth more than $300billion are either on hold or have been cancelled in the UAE, owing to global financial crisis, revealed Proleads Global.

Construction sector in the UAE will stabilize by the end of the year, and will show further sign of recovery by 2010. Several projects are underway in various sectors, due for completion by 2010-2011, the report said.

The study noticed that there is a slowdown in new projects in the commercial and retail sections, which healthcare and education projects are placed on hold more often than in the past. There is also slowdown in leisure and entertainment, while the rate of cancellations in the residential sector is on the increase.

The once-booming property sector of Dubai has been particularly hit by the downturn, while Abu Dhabi has been more resilient towards the effects of downturn.

At present there are more than 750 active projects in the UAE that are under construction, with almost 450 recently completed.

Proleads, in its February report, mentioned that 52.8 percent of its projects were on hold, while the rest $698billion worth projects are in progress.

Monday, July 27, 2009

Wasl to offer 4000 new leasing units this year

Wasl, the Asset Management Group of Dubai Real Estate Corporation (Drec), will add 4000 new units to its leasing portfolio towards the end of the year, a company executive revealed.

These properties spread across Al Karama, Muhraisnah, Al Badaa, Emirates Golf Club, Al Quoz, Al Rashidivah, Ras Al Khor, Al Barsha and Muhaisnah, which includes apartments, villas and retail space.

Wasl has leased about 20,000 residential and commercial units around Dubai, and will also release about 131 villas in several areas of Dubai this year.

In Muhaisnah alone, the company has nine buildings, comprising 1715 apartments. The first phase of the project has 450 apartments with a total built-up area of 787,000 square feet, and will be available for lease shortly. The second phase with 1266 apartments will be available for lease later during the year. The development at Muhaisnah will comprise of studios, single, double and triple bedroom apartments.

The Ras Al Khor area will offer 19 residential buildings with 1732 apartments featuring great community amenities. Located in proximity to the Dubai-Hatta Highway, the project offers residents easy access to major arterial roads and is meant for a community-focused lifestyle. Leasing in the area will commence in October this year.

Additionally, the company plans to release 131 villas across various areas in Dubai, with 92 villas in Emirates Golf Club, 31 in Al Rashidiyah, and an additional 8 villas to the already existing 132 units at Al Badaa this year.

At Al Barsha the company will release two three-storey buildings, offering total of 471 residential units and 31 retail outlets, in proximity to the Mall of Emirates. The latest property here is the 162-unit residential building, offering studios, single, double and triple bedroom apartments. The building aims to cater to the lifestyle requirements of professional executives and families working in nearby business districts.

Tameer set to deliver UAQ project

Tameer, speaking about its project Al Salam City in Umm al Quwain (UAQ), said that it could be worked out in the future, although it is currently on hold.

Several investors in the project were refunded 100 percent of their money.

The President of Tameer, Federico Tauber, confirmed that so far more than seventy percent of investors have been refunded, and the refunding process to all investors will be complete by end of September.

Tauber said that the project would surely be considered in future. There is a significant investment, but it is not the company's priority now. For now, Al Salam City aims to satisfy its customers and refund them, as the company now aims to deliver the projects in hand at present.
The Al Salam City project was being developed by Tatweer, together with Umm al Quwain government. With a long overdue shift in management, the company now aims to handover its remaining eight projects, with a total value of Dh.20bn, under the guidance of Tauber.

Tauber says that it is a major milestone in Tameer's history, as it is the first major project to be delivered. Tameer announced the delivery of its Dh.500mn Palace Towers in Dubai Silicon Oasis, a 25-storey commercial tower, with 150 offices and another 22 storey residential tower with 424 apartments.

The company's project in Al Majid City and Jordan will be handed over next month, while the tower in Business Bay will be ready by December.

Saturday, July 25, 2009

UAE real estate sector recovery likely in 2010

According to the latest quarterly Harbor Report, to be issued end of this month, the real estate sector will begin recovery early next year. The report has been issued by Harbor Real Estate, a brokerage company, also an integrate real estate service provider in Dubai.

The report indicates that although the market seems to have bottomed out, it will take many more months until we see an improvement in the market.

The Managing Director of Harbor, Mohanad al Wadiya, mentioned that the market is in a phase of fragile stabilization, and it is hard to predict at this stage, when exactly an improvement is likely, but it is generally hoped that this will happen during early 2010, although the pace of recovery is largely dependent on the global economic recovery and world economic events.

When the first half of Harbor Report was issued in Q1, the general mood was rather dull. But today it is evident that although the market is stressed, it is not getting any worse, and that in itself is good news. The efforts put in by the government and corporate institutions to beat the recession are slowly gaining grounds. With economists in China, Japan and USA, talking about early recovery signs, the economic growth is now on the horizon, and it looks promising to note that things will pick up by early 2010, Al Wadiya said.

The Harbor report is a quarterly report, which was first issued in April 2009. The second report will be issued end of this month, and will explain in-depth about trends and insider views of the real estate industry. The report has already received a positive response from industry professionals in the region.

Friday, July 24, 2009

Burooj's Al Gurm Gardens villas completed within 7 months

Burooj Properties, the real estate arm of Abu Dhabi Islamic Bank (ADIB), a master developer of mega projects in the UAE and the region, has been successful in the launch, execution and completion of Al Gurm Gardens villas at Al Reem Island, adjacent to Abu Dhabi International Airport and Khalifa Park.

The project includes 80 villas located at a strategic location, covering a total floor space of nearly 285000 square feet. Launched in January this year, the company completed the construction within seven months. The finishing works of the villas are now in progress, and the company has confirmed handover of the units by end of this year.

According to the Managing Director of the Boorj Properties, Adel Ahmed Al Zarouni, the achievement at Al Gurm Gardens is a testament to the fact that risks can be avoided by adopting strategic planning, irrespective of the market conditions.

Several factors needs to be taken into account before investing into any region in the world, the most important being the investment location. Abu Dhabi has been chosen as the ideal location for this project, as it is the destination of choice for property investments due to the visionary urban development plans adopted by the government, Al Zarouni said.

The post-crisis property market is very different from that of pre-crisis period, as the current focus of the developer is on the end-user, who seeks safe, healthy and environment-friendly home, apart from an innovative design and architecture. All these features have been met in this project, he pointed out.

The Dh.500mn Al Gurm Gardens comprises villas, with smart building features incorporated, including touch button for lights, air-conditioning and security, and round-the-clock concierge services, CCTV monitoring of public areas, other additional modern amenities such as a gymnasium, swimming pool, health club, children play area, multi-purpose playground, and a private garden for each stand-alone villa. The project includes spacious green areas with multiple choices of entertainment.

Thursday, July 23, 2009

Ajman property market to strongly focus on mortgage financing

The real estate market in Ajman will immensely benefit from the availability of mortgage financing, said a leading UAE-based developer and multi-service provider to the real estate sector, Sweet Homes Holdings.

The developer said that introduction of mortgage schemes are likely to further boost the efforts taken by Ajman Government. The Ajman government has been striving to regulate the real estate sector of the emirate through ARRA (Ajman Real Estate Regulatory Authority).

With the market getting driven more by the end-user, the introduction of mortgage financing, similar to those in Dubai and Abu Dhabi, has much potential to boost the real estate sales within the emirate.

The Sweet Homes Holdings CEO, Fahad Sattar Dero, said that efforts are made by Ajman Government to attract property investors, which has resulted in considerable developments being made, to put Ajman in a strategic position to overcome the challenges of economic crisis.
However, offering suitable mortgage financing for investors seeking to venture into Ajman, will promote more investment activities in the emirate. A combination of these factors will yield better stability for the Ajman property sector this year, he added.

The master developer of the Dh.3billion 'Ajman Uptown' and the Dh.1.7bn Rainbow Towers projects have revealed the completion of registration with ARRA, and opening of escrow accounts with the Dubai Islamic Bank for both projects.

The developer also noticed exceptional progress in the construction of two high profile developments with Ajman Uptown villas and Rainbow Towers, both on track to hit their delivery deadlines by 2010.

Aldar inks deal to build 5000 villas in Abu Dhabi

Aldar Properties has entered into contracts with three regional contractors to construct 5000 villas in Abu Dhabi, it has been revealed.

Aldar, the largest real estate developer in the emirate, signed contracts with Al Jaber Building of Abu Dhabi, Pembinaan of Malaysia and El Seif Engineering Contracting of Saudi, to construct homes at Al Falah, it said.

The Chairman of Aldar Properties, Ahmed Ali Al Sayegh, said that Aldar has been living up to its mission by increasing housing availability for UAE families, by building sustainable communities that cater to the growth needs of Abu Dhabi, and this is an important step in the development of Al Falah project.

Al Falah, launched early this year during Cityscape Abu Dhabi exhibition, is a master-planned community for UAE nationals, and forms a part of the Plan Abu Dhabi 2030 initiative. Located along the east of Abu Dhabi International Airport and Abu Dhabi-Dubai highway, Al-Falah comprises five villages, a village center, mosques and schools.

The project will be completed towards third quarter of 2013.

The real estate sector in the UAE has weakened dramatically, owing to global financial crisis. But, Abu Dhabi, home to most of the oil wealth within the country, has fared better than its neighboring Dubai. The residential prices in the capital are likely to fall 25 percent on average for the whole year, revealed a Reuters poll last month.

Tuesday, July 21, 2009

Dubai properties on road to recovery

With rents and prices stabilizing, few areas in Dubai are seeing early signs of recovery.

Among the main areas seeing the road to recovery are Dubai Marina, Burj Dubai and Emirates Living. This is largely due to their higher quality and the fact that they are located in a completed community project that seems attractive to people commuting to Abu Dhabi.

Those working in Abu Dhabi are increasingly exploring residential units in New Dubai, due to its proximity to Abu Dhabi. Also tenants are seeking units in community developments.

There is much demand for single and double bedroom apartments and for triple and four bedroom townhouses, said Andrew Chambers, Managing Director, Asteco.

Other established communities such as Downtown Burj Dubai, Jumeirah Beach Residences, and The Springs have received inquiries from tenants, and therefore have been less affected by the rent decline.

The house prices and rent rates in Dubai have considerably reduced during the last quarter reveal the latest industry reports. The apartments and villa prices across Dubai reduced by 15 percent and 13 percent, respectively, on an average.

With the relaxation in finance restrictions and stability in property prices, the Palm Jumeirah has recorded a surge in sales prices for its apartments and villas by 7 percent and 20 percent respectively, during the second quarter, says an Asteco report.

According to the Head of Research and Consultancy at CB Richard Ellis, Matthew Green, the current situation of oversupply, together with weakening demand, both in local and international market, implies that landlords will have to strive extra hard to secure tenancies, contributing to further reduction in rents.

A four bedroom garden homes on The Palm is now being sold for Dh.6.5million, down from the earlier Dh.14million sold during September 2008, the agents said, during the first quarter.

During the second quarter of 2009, the average rent for studios eased from Dh.61,500 to Dh.45,000, rents for single bedrooms fell from Dh.93,000 to Dh.78,000, while that for double bedrooms fell from Dh.132,000 to Dh.107,000. The triple bedroom apartments rents dropped from Dh.185,000 to Dh.149,500.

The average rent for villas were Dh.119,000 for double bedrooms, Dh.176,500 for triple bedrooms, Dh.233,750 for four bedrooms and Dh.277,00 for five bedrooms.

Marmooka City development down-sized

Ajman's largest planned community located along Emirates Road, the Marmooka City, has been scaled back from 206 towers to just 20 buildings, owing to downturn in investor demand, a senior official at Real Estate Investment Establishment (REIE), the master developer, revealed.

The luxury sub-urban development was projected to have 206 residential and commercial buildings, featuring 'Manara Ajman', the tallest tower in the emirate comprising a school, large shopping mall, clinics, and five-star hotels, as per the initial project plans.

The project is due for completion next year. The developers have paid more than Dh.1billion so far to purchase a plot within the planned Marmooka project. They will be partially refunded, although not in cash, for the projects that have been cancelled or shelved.

Sunday, July 19, 2009

New Dubai area, much in demand

According to the leading property services company, Asteco, residential units in the New Dubai area have witnessed an increase in demand during the second half of this year.

The sale prices of villa and apartments across Dubai have decreased by 13 percent and 15 percent respectively, which signifies negative growth, in comparison to quarter-on-quarter decline from Q4 2008 to Q1 2009.

However, the report pointed out that the Palm Jumeirah and Dubai Marina, which constitutes the New Dubai area, has reported a good increase in sale prices during the second half of this year.

There was a 20 percent increase in villa prices, while the apartment prices increased 7 percent. With more properties being delivered, the owners are hesitant to sell at lesser cost, and therefore are leasing out their units. Therefore, apartment and villa rental rates on The Palm dropped by 12 percent and 25 percent respectively, reports Asteco.

Vincent Easton, the Sales Director at Engel and Volkers, an estate agency in Dubai, said that during the last couple of months, distressed sellers have been completely removed from the market, while the rest of the owners are hesitant to drop below a certain price level.

People are even willing to commute to Abu Dhabi from the Jumeirah Lake Towers and Discovery Gardens, he pointed out.

The Asteco Managing Director, Andrew Chambers, said that the demand has been mostly for the single and double bedroom apartments, and for triple and four bedroom houses in the New Dubai area.

Saturday, July 18, 2009

Deyaar confirms delivery of The Citadel units in August

citadel from deyaar
Deyaar Development PJSC has announced that it will deliver all units of The Citadel project at Business Bay, in August, thereby fulfilling its to deliver all seven projects in 2009.

Spreading across 565,000 square feet of office space, the premium is a 41 storey commercial tower, with 406 state-of-the-art contemporary commercial units and 29,000 square feet of retail space.

Strategically located within minutes of Shaikh Zayed Road, the project is located in the upcoming airport in Jebel Ali, and all major shopping malls and business clusters in Dubai.

The Citadel is one of the first projects to be delivered in the Business Bay master development.

Deyaar will put forth an orientation programme for all customers on 18th July at 11am before the final delivery. During the programme, Deyaar plans to update its customers with the final documentation procedure for their respective units.

Friday, July 17, 2009

UAE Property prices on the rise again

Property prices in parts of Abu Dhabi and Dubai are witnessing increases as buyers regain their confidence.

The property brokers produced a list of areas where prices had increased by 12 percent last month, while in Abu Dhabi, properties on Al Reem Island have seen an increase by about 30 percent during past couple of months.

After a lull of eight months, average prices fell by 30 percent in Abu Dhabi and by 40 percent in Dubai, and the buyers have returned. Now, it is the third consecutive month of price increase, according to brokers. However, several analysts still prefer to be cautious and say that the market has just leveled out, and that some more decline in prices are likely.

According to Gregory Antioch, a Senior Sales Negotiator at Smith & Ken, a three bedroom villa at The Springs, an established residential community developed by Emaar, which was sold at a rate of Dh.1mn to Dh.1.5mn in May, is now being sold at Dh.2mn.

Emaar's two other projects, 'The Meadows' and 'The Greens' also saw an increase in price by 7 percent and 5 percent respectively. The end-users are less hesitant now, and are realizing that it is cheaper to buy than rent. The distressed sales have almost gone, Antioch noted.

Buyers have begun to trickle into the market in April, when the first signs of price stabilization emerged. A report by HSBC Bank at the end of May indicate that selling prices in the UAE saw an increase of 5 percent in May, compared to April, apart from April's 4 percent gain on March.

Even Deutsche Bank, last month, reported an average price increase of 6.5 percent in 13 major locations in Dubai, compared to May. According to brokers, the trend has remained steady with villa prices in few areas of Dubai, increasing between 10 percent and 12 percent since May.

Nakheel's Palm Jumeirah, the reclaimed island development, which saw a decline in prices by 40 percent during September to November last year, saw an increase in prices by 20 percent, since its "low point" in March.

A Broker at Edwards and Towers, Richard Pemberton, said that most sales were now being driven by end-users who purchase properties to live in them, rather than speculators.

Thursday, July 16, 2009

Abu Dhabi rents fall to match Dubai

Rents in Abu Dhabi have fallen sharply, to compensate for the lower prices and new buildings in Dubai, as residents preferred to choose Dubai over Abu Dhabi for investments.

Recently, the apartment rentals in the Capital dropped 35 percent during March to June. The reduction in prices were fuelled by mass redundancies and with tenants relocating out of City Center, revealed the report by Asteco, a leading property services company.

This follows an earlier decrease in rental values at 20 percent during the first three months of the year. Areas including Corniche and Khalidiya have managed to retain their value, while neighbourhoods such as Salam Street, the site of huge re-development have seen a dip in rents.

According to estate agents, landlords have realized that they cannot hold rents artificially high, and are now willing to accept payment in two cheques, as opposed to one.

However, rents for a single bedroom apartment in the capital continues to draw an average of Dh.20,000, above that in Dubai, thereby causing more people to opt commuting.

The Research Head at Landmark Advisory, said "There is a definite trend of people relocating to Dubai, while working in Abu Dhabi. The three major factors for this trend are availability, price and quality of apartments in Dubai."

People are looking in terms of equation. They can either work and live in Abu Dhabi accepting the fact that they will not have to commute, but will have to pay a higher rent for older property with fewer amenities, or they can pay a lower rent with better amenities but have to commute.

The Corniche and Khalidiya continue to be the most sought-after locations in Abu Dhabi, while prices in districts such as Hamdan, Mushrif, Passport Road all have leveled off.

The average rent of a single bedroom apartment in Abu Dhabi dropped by 28 percent or more during the second quarter, while rent for similar sized properties in Khalifa, Muroor and Salam Street fell by 35 percent, said Judy Lam, Regional Research Manager, Asteco.

Single bedroom apartment in the Corniche were priced at Dh.130,000, while similar flats in Khalidiyah were rented for Dh.127,000. On the other hand, rents at single bedroom flats in areas such as Musaffah were Dh.87,000 as per the data.

The drop in rentals are partly due to availability of new villas and flats during the past couple of weeks. About 500 new villas have entered the market in Al Raha, 100 in Khalifa City and 300 in Sas Al Nakheel, while 20 new apartment blocks have been unveiled in the Capital.

According to Managing Director of Asteco, Andrew Chambers, the rent drops will continue until the end of the year.

Housing project construction at Al Marjan on-track

Select Group and Select Property, the joint developers said that final piling and layout are underway for foundation of residential development on Al Marjan Island in RAK, as it remains on schedule for completion in June 2011.

Al Marjan
The joint developers have fully completed all construction requirements and compiled escrow account regulations of Ras Al Khaimah Investment Authority (RAKIA), the government body responsible for socioeconomic growth of the emirate, as properties within the residential development are now offered with attractive payment plans.

Located in a prime location at the top isle of Al Marjan is Pacific, which offers exclusive private beaches and 24-hour concierge, roof top infinity pools, health clubs, steam rooms, saunas and Jacuzzi. The development is equipped with a complete range of complementary amenities including shopping outlets and dining.

The General Manager of Rakia Real Estate Regulatory Agency, Yehia Kambris, said that maintaining a healthy pace of development is a major priority, and that the progress of the project on Al Marjan is being closely monitored. Rakia has also been co-ordinating with all developers to ensure that all properties are built to the highest quality standards and specifications.

The CEO of Select Group, Rahail Aslam, said that Pacific will be one of the most exciting residential destinations in the region, with a wide range of contemporary residences within a well-done landscaped beachfront community.

Pacific comprises six contemporary designed residences, namely, Samoa, Tonga, Bora Bora, Tahiti, Fiji and Polynesia, each offering panoramic views of Arabian Gulf and natural serenity of RAK.

The residential complex will include spacious studios, single room apartments, double bedroom beach duplexes, Gulf suites and Pacific suites. Each beach duplex is located on the ground and first floor, permitting residents to fully exploit pacific's beachfront location and to enjoy a private garden area. The Pacific suites offer good views from a private balcony, while the Gulf suites are located at the tip of every residence.

The project will be one of the major highlights of Al Marjan, complementing the growing reputation of RAK as an upcoming lifestyle destination in the region.

Tuesday, July 14, 2009

Main contractor appointed for Wadi Walk project

Dhabi Contracting has been appointed as the main contractor for its 'Wadi Walk' project by Ilyas and Mustafa Galadari Group, the owners of City of Arabia, the $5billion residential, commercial, retail and entertainment destination in Dubailand.

The contract was awarded to Dhabi Contracting to build low-rise Mediterranean style apartments and waterfront community in the city, after outbidding four other companies.

With soil-testing, shoring and excavation works already complete, Dhabi Contracting is now mobilizing on-site and is commencing foundation works of the project.

The Managing Director of Dhabi Contracting, Sami Edwards, revealed that with about 1000 workers and 40 engineers on site for Mall of Arabia, the company has now inducted nearly 500 more to workers to build Wadi Walk.

Wadi Walk is a vibrant waterfront community running along a eight-kilometer canal, offering residents with huge range of cafes, restaurants, retail outlets and ample space to stroll and relax.
Acting as the focal point of development, the deep blue colour of the canal will maintain their pristine quality by 11 water filtration plants sunk within the basement. The visitors will be able to sail along and move from Wadi Walk to Mall of Arabia, along the waterway aboarding fleets of water taxis, which are electronically powered to eliminate noise and pollution.

The development has been designed to restrict traffic flow, with cars and other vehicles diverted to the rear of the apartment buildings, where there will be ample parking space for shoppers, diners and residents.

Sunday, July 12, 2009

ACI's Dubai waterfront towers on hold

The German-owned developer, Alternative Capital Invest (ACI) Real Estate, who is behind projects such as Michael Schumacher, Boris Becker and Niki Lauda towers, revealed that it plans to put on hold its developments on the Dubai Waterfront and shift investor holdings to other assets.

The affected projects are Ferretti and Pershing towers that are yet to begin construction. The company announced that it plans to shift clinet investments in these developments to towers in Business Bay, which includes the towers linked to prominent German sports figures.

The Lauda, Becker and Schumacher towers are now under construction, although they are behind schedule.

During the past couple of weeks, a group of German investors in ACI-linked funds, which financed the developments, had lodged complaint against the developer for having missed the payout deadlines. The Dubai Waterfront towers have been put on hold, as the developer is struggling to maintain investor funding, which is required for completion of current projects.

The Managing Director of ACI Dubai, Robin Lohmann, in his recent press meet, mentioned that the slowing payment left its impact on construction schedules.

"All our sites in Business Bay are under construction. But there are delays in people's payments, and we have slowed down to deal with it. When nobody pays, the construction stops, and that is the last thing we want," he said.

Out of the eleven projects underway by the company, seven were under construction, he pointed out.

Saturday, July 11, 2009

New building regulation announced in Ajman

A new Law issued by H H Shaikh Saud bin Saqr Al Qasmi, the Crown Prince and Deputy Ruler of Ras Al Khaimah, will bring in better regulation to the building sector in the emirate.

According to Law No.1 of 2009 for regulation of buildings in the emirate, it will be applicable to all buildings, except those that come under special decree or resolution.

The Law does not permit anybody to construct a building or make additions, or expansion, or partly or wholly demolish it, or make any modifications, whether on the facet or internal divisions, without prior permission from the authorized section of emirate’s municipality.

The law is applicable to a range of topics dealing with buildings, such as designs, construction, architectural standards, specifications, license, additions, expansions, maintenance, safety, and penalties for breaching provisions of the law.

As per the law, the construction permit will remain valid for a period of one year from the date of issuance and will be considered void, if no construction happens on the site within the said period or if the work is stopped for more than six months, without valid reasons. The permit can be renewed within 30 days following expiry.

The Architect is responsible for the safety of the building for ten years after delivery. The Municipality Chairman has the right to instruct the concerned authorities to remove unlicensed caravans, pounds, and makeshift houses when their owners fail to do so after expiry of the grace period given to them.

Based on the Technical Committee recommendations, the Municipality Chairman can also order demolition of any worn-out buildings or facilities that may pose danger to inhabitants and passers-by or harm the environment and public health.

The law will be implemented within a month after its issuance and will be published in the gazette.

Real estate sales in Dubai drops by half in 2009

Property sales in Dubai dropped by more than 40 percent during first half of this year, compared to that registered during the same period last year, reports REIDIN.com, the firm that tracks property with the data available from Dubai Land Department.

A total of 1724 sales transactions were registered during the first half of the year, marking a 42.6 percent decline over the same period last year, reports REIDIN.com.

Although, the prices have begun stabilizing in Dubai during the past two months, according to analysts and property brokers, the Deutsche Bank reports that residential prices increased by 6.5 percent, touching Dh.1285 per square foot in 13 locations around Dubai last month, compared to May.

The steep decline in property transactions suggests another slow quarter for developers, with many working to create new business strategies and change the plan of their projects to survive the changed economic environment, analysts said.

The decline in prices is more than 50 percent in few areas, which has taken its toll on the value of transactions. The data shows that the total value fell by 39.9 percent, touching Dh.2.02billion.

An Analyst at Nomura Securities, Chet Riley, has revealed that earnings across UAE real estate board are likely to remain weak for the second quarter.

There are signs of stability in the underlying market, but the second half of the year will witness the 'crunch' when several developments are due. If developers face delay, they are not likely to see sales revenues, and this may lead to further downgrades, he said.

Currently, analysts are closely monitoring Emaar Properties and Union Properties, as they have reduced their contact with investors and are passing through crucial phases. Emaar has announced merger talks, with three real estate companies under Dubai Holding. Union Properties, on the other hand, have recently undergone a management overhaul, and is facing difficulty in filling the funding void.

An Analyst at Deutsche Bank said that the price increases are the result of easing pressures from distress sales and the potential sellers who are remaining are now unwilling to sell at current rates.

The analyst predicted further fall in prices to the tune of 15 to 20 percent by the end of the year.

Thursday, July 09, 2009

Distressed funds await entry into Dubai realty

Several distressed funds are waiting to jump into Dubai's real estate market and invest in few of the attractively valued assets, industry experts revealed on Tuesday.

Although no distressed funds are yet active, the few that are in pipeline will increase confidence in the market and rescue defaulted assets.

The Chief Executive Officer of Investment Boutique, Heather Wipperman, said although there are direct investments, it is taking much longer, as people hesitant and cautious. Several distressed funds are ready to enter the market.

When the fund is raised, it goes in and buys assets under default. The fund then holds these assets until the market recovers and then releases back, said Marwan Shehadeh, Managing Director, Al Futtaim Capital.

Shehadeh continued that funds are a hot subject now. People are finding it difficult to get into investments at this time and now with the onset of summer and Ramadan, the major bonds are coming due, so people are waiting to see what happens there.

Traditionally, distressed funds get effective when the market has bottomed out. Experts in Dubai feel that property market is yet to hit the bottom or is very close to it.

Property prices in Dubai have dropped to levels never seen before, and although there have been cases of distressed sales and property auctions; the general sentiment in Dubai is more buoyant than in previous month.

The terms distressed asset is applicable to properties whose value is much lower than it should be. The sales come from the default rate. The real distress happen when developers stop easy payment plans and those who cannot pay becomes the opportunity for the fund, explained Markus Giebel, Deyaar Chief Executive.

Although the distressed sale numbers are dwindling in Dubai, real estate activity requires a serious kick-start. It will do good to the market, to get to a point where the funds can acquire a complete portfolio or half portfolio, buying in bulk, as they will be able to get considerable discounts. With several initiatives, there are no considerable distressed funds that are active today, Wipperman said.

Ajman's Lake View Towers yet to take-off

Investors of Lake View Towers in Emirates City of Ajman have filed complaints to the regulatory agency of the emirate and the police, regarding the status of the project.

About 500 investors have paid Dh.120mn so far, towards their units in Lake View Towers, being developed by Lake View Real Estate Developers, but the project is yet to see the light of the day.

More than 40 complaints have already been filed at the Al Refaa police station in Dubai and with Ajman's ARRA (Ajman Real Estate Regulatory Agency), but no action has so far been taken, an investor said.

According to a spokesperson in ARRA, the police are carrying on investigations, and ARRA will do its best to protect the money of investors and will ensure transparency in law.

The Administration Manager of Lake View Real Estate, Suhail Gani Quraishi, said that the developer has registered and it is only the short-term investors who intend to wriggle out of the project. The people who have complained require their money back, and a lot of it was short-term investment.

About 90 percent of the registration process is complete and only some final documents are required to complete it, after which construction will begin, Quraishi said.

ARRA recently established a dispute committee to deal with such issues.

Tuesday, July 07, 2009

Rakeen to commence second phase construction at Al Marjan

Rakeen, the leading property developer will begin its second phase of infrastructure works on the Dh.365mn Al Marjan Island in Ras Al Khaimah.

The infrastructure work was awarded to Rizzani, the contracting and engineering company, which will take care of the installation of amenities such as water, electricity, telecommunications, drainage, channel crossings, soft and hard landscaping, fire fighting installations and street lighting.

The initial phase of infrastructure work, covering the Peninsula Island 1 and Island 2, began in July 2008. It is hoped to be complete by June 2010 at a cost of Dh.366mn.

The company plans to fast-track the completion of infrastructure works, as various projects are being built on Al Marjan, depending on infrastructure amenities.

With the phase one of the infrastructure work progressing as scheduled, work on the second phase would commence, after having identified the contractor for the job.

The company has assured that it has reviewed all infrastructure works to ensure that all elements comply with quality standards, particularly with regards to sustainability and minimal environmental impact.

Monday, July 06, 2009

ACI Investors demand refund of money

German and Austrian investors are demanding their money back from developers of Nikki Lauda, Borris Becker and Michael Schumacher towers in Dubai.

The investors had paid a total of about Dh.779.7m into funds to pay for the buildings. The investments were to be repaid from the capital gains.

The investors said that their money due in March is yet to be repaid, and that they are in consultation with lawyers to withdraw their money from the funds.

The investment company behind the project, Alternative Capital Invest (ACI), however, confirms that it has "solid assets", and the towers will go ahead.

The Managing Director, Robin Lohmann, mentioned that the money to repay investors were not available as the projects could not be sold as planned, amid the slowing market conditions.

Instead, he offered the investors with choice of either waiting until the assets of ACI gets liquidated, or choose a property asset owned by another company Falcon International Investment Group based in Dubai.

However, investors fear that if they accept the Falcon option, it may involve additional costs and risk. The investors claim that the ownership of Falcon's assets is unclear, although it is associated to ACI.

One of the investors mentioned that Falcon only speaks about reservation contracts of various properties, and reservation contract is not a purchasing contract.

Lohmann said "With this package, we intended to show people that we have ACI assets, and that in addition we also have in offer a security package through Falcon of fully paid assets, which is almost the double of what was due in March.".

Property buyers who have invested in off-plan apartments of ACI's buildings are also upset about the delays in construction.

Saturday, July 04, 2009

Tamweel Tower at Jumeirah ready for handover

One of the largest real estate finance provider in the UAE, Tamweel PJSC, today announced that its building project at the Jumeirah Lakes Towers, the Tamweel Tower, has been completed. Tamweel has begun the handover of units to their respective owners.

Positioned in a prime location in Jumeirah Lakes Towers, the Tamweel Tower is situated on the North Eastern corner of Jumeirah Lakes Towers. The 34-storey tower includes a range of residential, commercial and retail spaces, with about 160 luxurious apartments, 5 retail shops on the ground floor, 16 office spaces in the first to fourth floors with dedicated entrance and elevators.

The residential apartment complex, comprises double and triple bedroom apartments from the 5th to 33rd floor. The tower also includes a range of amenities such as state-of-the-art gymnasium, swimming pool, steam, sauna, Jacuzzi and multipurpose closed area on the top floor.
The CEO of Tamweel Home Finance Division, Varun Sood, mentioned that Tamweel Tower offers a great environment for living. It is pleased to deliver the units to owners and offer them with the opportunity to live their dream home in Jumeirah Lakes Towers.

The Jumeirah Lakes Towers is a distinguished community in the heart of New Dubai, adjacent to Sheikh Zayed Road. The dynamic waterfront community surrounds the wonderful residential and office towers and hotels and retail outlets.

The four man-made lakes offers stunning views from all around, making the Jumeirah, one of the most sought-after communities in Dubai. The two metro stations will offer more convenient access with easy commutation for residents.

Sherwoods expects stability of property prices in Dubai

Sherwoods Independent Property Consultants (SIPC), the leading real estate consultancy, has mentioned that there has been a steady shift in property prices in Dubai.

The prices are moving towards more reasonable levels, as the market enters a new phase that will help the transition into recovery, Sherwoods pointed out.

Sherwoods further hopes to see definite signs of growth in terms of property prices and real estate investments, during the fourth quarter of 2009, while the year 2010 is hoped to be a year of stabilization, with new direction for the real estate sector.

According to the consultancy, the excellent performance by the property sector, amid the global economic downturn could be due to the decision by Dubai to enhance infrastructure development in the emirate.

Sherwoods appreciated the fact that major industry players too, quickly adapted themselves to the dramatic changes in the market, and urged them to focus on the positive aspects of the global recession.

The Managing Director of SIPC, Iseeb Rehman, mentioned that today's prices are conducive for long-term investment and will fetch good returns in the long-term. Hence, he advises that people should not think about short-term investments at this point of time.

Sherwoods further pointed out that Dubai property sector has been able to remain in comparatively better condition even during the peak of economic downturn during the first half of 2009, mainly due to lesser number of speculators in the market, which is, a major positive development resulting from the downturn.

Sherwoods also mentioned that the recession gave Dubai the opportunity to consolidate its real estate regulations and legal frameworks, while also maintaining equilibrium in the demand and supply levels of the market.

Sherwoods appreciated Dubai's commitment towards aggressively pursuing major infrastructure projects such as Dubai Metro, despite the global economic crunches, which are vital steps taken by Dubai to sustain international interest and attention on Dubai.

The initiatives taken by RERA to protect Dubai property market, is considered "extremely positive", Sherwoods said, and noted that there is a lot of work waiting ahead.

Thursday, July 02, 2009

Moody's reaction to Emaar, Dubai Holding merger

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.

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.