Sunday, August 30, 2009

25 percent of Dubai office space vacant

About 25 percent of Dubai’s office space is vacant, and the amount is expected to climb further this year, with new buildings being completed, according to a report from Jones Lang LaSalle.

An increase in the number of new offices has helped in easing office rents by an average of 25 percent during the second quarter this year, in comparison to the first quarter. This represents a slow rate of decline, compared to a 45 percent decline in rents witnessed during the first quarter of the year.

The global economic crunch has been a major factor behind reduced demands, as several tenants have either downsized or delayed their expansion plans or have waited to see if the rents settle, said Matthew Hammond, the Head of agency at Jones Lang LaSalle (JLL).

The emirate now has an additional 2million square feet of office space available during the quarter, as per the latest report in the Dubai Office Market.

The total office space in Dubai as of June 2009 is 33.6million square feet. The vacancy rates are in the range of 22 to 25 percent, and are likely to grow further in the next six months, as the supply continues to be released.

In mature markets, typically, a healthy vacancy rate would fall in the range of 10 percent, offering occupiers more alternative options, Ahmad Saidali, Head of Investment at the commercial property consultancy, CB Richard Ellis (CBRE) in Dubai, said.

While the landlords are likely to suffer with increased office space in the market, the fall in rents may help Dubai in getting more competitive and attract potential tenants, JLL said.

Thursday, August 27, 2009

Dubai rents stable in few areas

The distortion in supply has led to temporary rent stabilization in few areas of Dubai, while rents in other parts of Dubai are continuing to rise owing to lack of supply, states a report by the leading real estate consultancy firm, Landmark Advisory in its report.

The increasing rents could be due to lack of supply. Several landlords have removed inventory from the market to avoid renting out at current market rates, while others could be out of town during summer and therefore consequently unavailable, said Charles Neil, CEO, Landmark Advisory.

The leasing supply may also be affected by the month of Ramadan, with several landlords waiting until end of the year to reassess the market, he pointed out.

The consultancy firm, in its August 2009 lease guide for the Dubai market, states that the demand for property was particularly strong during June and July with considerable amount of leasing contracts ending around this period. However, the marginal rent increase triggered due to this is considered unsustainable by Landmark Advisory.

Rents in several areas of Dubai have dropped significantly during the past 5 months, but, there are few exceptions to this trend as few units in some preferred developments seem to be doing well.

The price map indicates a continued upgrading trend with major factors for relocation being the demand for location, quality and size.

Landmark Advisory predicts that several residential areas in Dubai are due for further fluctuation, particularly, with the new supply coming into the market during the next 12 to 24 months.

If the rents do decline for these areas, then additional relocation demand can be expected, as long as landlords adapt pricing strategies. This relocation demand will further help in mitigating rental declines, Neil explained.

Dropping rents, growing supplies, make Dubai commercial property sector competitive

The Dubai commercial real estate sector is getting increasingly competitive with falling rents and increasing supplies, which has been making the city more attractive to potential tenants, the study revealed.

The office rents across Dubai continue to decline, although at a lower rate than before, says Jones Lang LaSalle's second quarter report on Dubai office market.

The rental decline noted during the second quarter this year averaged 25 percent, in comparison to a 45 percent decline during the first quarter. The rents for Grade A office space across Dubai (except at the Dubai International Financial Center), is now around Dh.225 per square foot per annum.

This is inline with that recorded during mid-2007 and is equivalent to rental levels in several other major commercial centres in the global market, making Dubai more competitive to move ahead.

A further decline in average rents is likely, with increasing levels of fresh supply, states the report.

Towards the end of 2011, about 25million square feet of additional office space is likely to enter the market, which will increase the vacancy rate and place further downward pressure on average rentals.

The global economic downturn has been a major factor in reducing the demand level, with several tenants having either downsized or delayed their expansion plans, or have adopted the wait and watch approach.

The market has moved in favour of tenants during the past six months, with few attractive deals available in a range of newly completed buildings across Dubai, said Matthew Hammond, the Head at Jones Lang LaSalle.

This has brought about a situation wherein, tenants can take advantage of tomorrow's prices today and negotiate rents below the current levels, he added.

Monday, August 24, 2009

Better stability, lesser distress sales, in Dubai realty market

According to analysts, property prices in Dubai have grown up slightly and the market, in general, has stabilized, showing lesser distress sales.

Few of the sellers who were waiting in the hope of a price recovery, offloaded their assets at a loss during the first half of the year. This trend is not out as yet, but properties in the country are continuing to be sold without many premiums.

Despite the second quarter slowdown in the decline of residential property prices in the UAE, majority of such properties are being sold below their original price.

Apartments in Jumeirah Lake Towers are being sold at the original price and 5 percent below the original price. The trend is more apparent in areas that are not completely developed and the ones that are too highly priced to begin with.

However, the properties that were delivered few years ago, have been faring comparatively better in the current environment. People are continuing to make profits on The Springs and The Greens properties. Even Dubai International City has been doing well, as the original price here was not very high.

The one big change at present, compared to the last few months, is that the sellers are hanging on to their properties rather than moving ahead to take big hits. Sellers are even seen removing their listings from the market aiming to minimize their losses. This was noticed in localities such as the Business Bay and Jumeirah Village South, where the infrastructure is in its early stages.

Sunday, August 23, 2009

UAE property developers compete to remain on top

Property developers in UAE are in the rush to establish their standing, reveals a report that analyzes PR activities of top eight developers in the UAE and the real estate sector in the UAE media.

The second quarter Real Estate Media Report of Mediastow, the leading media advisory and intelligence agency in the MENA (Middle East North Africa) region analyzed the media coverage of real estate in the UAE market, and the report was issued this week.

Out of the total 3962 articles with 168 titles that were monitored during the second quarter of the year, the report indicates that the real estate developers in the UAE are competing for prominence, said Mohamed Elzubeir, Head of Mediastow.

Trust plays a crucial role in enhancing the positions of these companies, and media is crucial not only in building the trust, but also in sustaining it, he pointed out.

The stocks of Emaar, Aldar Properties and Sorouh were monitored and correlated to the report. Aldar took the lead, followed by Sorouh and then Emaar during the first two weeks of May, although Emaar surpassed Sorouh from then on.

All the three developers reported a rise in the beginning of June, touching the peak during the second week of the month, coupled by the highly positive messages from merger news of these three companies, with a sharp decline on the 9th June.

The report states that Aldar and Sorouh are still trying to grab the opportunity to take over the real estate market leadership in UAE. The second quarter of the year also saw a dip in the margin of positive, yet non-PR coverage for the majority of property developers.

Towards June, there also seems to be a shift in pattern in terms of language penetration, where, several developers have moved on to Arabic coverage than English, the report said.

This has been further aided by the non PR coverage that they have received, mainly from Arabic publications.

On the whole, there seems to be a drop in coverage during the second quarter of 2009, Elzubeir continued.

Property developers should continue to penetrate many powerful, prominent and manifest mentions to continue to hold its solid positive reputation, which would further lead to better stock performance, move investments and higher sales, Elzubeir concluded.

Reef announces budget-friendly R Serviced Offices in Dubai

The Chairman of Reef Real Estate Investment LLC, H H Sheikh Ahmed Mohammed Zayed Saqer Al Nahyan, has announced the launch of R Serviced Offices in Dubai.

The objective is aimed to offer prime commercial space in major business districts in Abu Dhabi and Dubai, followed by other business hubs in the GCC and subsequently the emerging markets across the world.

The R Serviced Offices flagship operation comprises 188 leading offices in Al Reef Tower, an outstanding commercial development located in the Jumeirah Lakes Towers within the DMCC Free Zone.

The fully furnished offices range from 12.3 square meters to 41.04 square meters in size, and include private guest reception areas and 12 meeting rooms.

There is a strong demand for serviced offices amidst the economic downturn. The demand is largely from small local companies, firms involved in down-sizing or overseas groups seeking to set up branch office in Dubai.

According to H.H. Sheikh Ahmed, serviced offices hold a high potential for growth, as the companies seek to become more efficient in the use of their space.

There is all likelihood for 100 percent occupancy at R Serviced Offices by the first quarter of 2010, confirms H.H. Sheikh Ahmed.

R Serviced Offices are the right option for companies seeking cost reduction. The usual process of having to search for an office space, negotiate lease agreement, purchase office equipment and hire staff is an expensive procedure. With the R Serviced Offices, the companies can avoid excessive upfront expenses of opening an office, as they are not bound to any long-term contracts and do not incur service charges. The companies can also save on fittings, furniture, staffing and monthly rent, apart from permitting access to all benefits of being in DMCC Free Zone, explained Ian Lloyd, Chief Executive, R Serviced Offices.

According to a recent Reuters report, Dubai is the second most expensive office market in the MENA and Europe region. Therefore, serviced offices are the most cost-effective way to create an instant Dubai office. There is no additional service charge for lighting, air conditioning, water, electricity and full time security.

Among the other attractions are tea/coffee, water for clients and visitors, dedicated post office box and mail sorting service, daily newspapers, office maintenance and daily housekeeping.

Jumeirah Lake Towers, the Nakheel development, is one among the most sought-after business and residential districts in Dubai. Standing at a height of 137 meters above concourse, the Reef Tower boasts of spacious layout with 32 storeys, apart from the ground level and three basement floors. The building matches the 21st century requirements and has high-tech facilities in place.

Friday, August 21, 2009

Office rents stabilizes, residential mortgages revive in UAE

Office rents in Dubai Silicon Oasis, Deira and Bur Dubai may have bottomed out, as these areas have not witnessed any major rent reduction during the past month, reveal property analysts.

According to Porush Jhunjhunwala, Manager - Commercial Leasing at Better Homes, a real estate firm, there has been only a marginal reduction of one to two percent during July-August, and this indicates that office rents in these areas have possibly bottomed-out.

However, areas such as Jumeirah Lake Towers, Al Quoz, Ghusais and Tecom are likely to see another 5 to 10 percent correction before rents begin to stabilize there, he said.

David Macadom, Director-Sales and Leasing Commercial at Better Homes, said that the current office vacancy for leasing availability is nearly 15.5 percent. Commercial lease rates have dropped from 40 to 60 percent, based on the area and size of office premises, grade of building, accessibility to the locality, parking facilities and location of the building.

According to Macadam, the office leasing transactions are now leveling off in the range Dh.80 to Dh.150 per square foot per year. There are no declines below these rates.

According to the latest data from Better Homes, the Dubai Silicon Oasis has seen the maximum reduction in office rents (nearly 65 percent), compared to January this year.

The current office rental rates are in the area of Barsha and Dubai International Airport are in the range of Dh.50 to Dh.70 per square feet, with a decline of more than 55 percent in office space.

Office rent rates at Barsha are in the range Dh.80 to Dh.120 per square feet, while in the Dubai International Airport locality, rents range from Dh.90 to Dh.120 per square feet.

The areas that have seen a 55 percent decline since the beginning of the year are Deira (Dh75-110/sq ft), Garhoud (Dh80-110/sq ft), Sheikh Zayed Road (Dh110-170/sq ft) and Umm Hurair (Dh90-120/sq ft), while Karama (Dh90-120/sq ft) and Qusais (Dh80-110/sq ft) have seen a dip of more than 50 percent.

Areas such as Bur Dubai (Dh90-115/sq ft) are down by 50 per cent, Dubai Investment Park (Dh70-85/sq ft) and Jumeirah Lake Towers (Dh55-120/sq ft) are down by 47 to 48 percent from their January levels. This is followed by Downtown Burj Dubai (Dh170-200/sq ft), with 46 per cent reduction and Al Quoz (Dh75-90/sq ft) with 41 per cent drop.

The least affected locality is the Dubai Health care City (Dh.115-145/sq ft), down by more than 35 percent.

In the meanwhile, banks and lending agencies in the UAE are recording healthy growth in residential real estate mortgages, which indicate that prices may be reaching levels that are once again of interest by the end-users seeking to purchase properties.

The HSBC-UAE has witnessed a 25 percent growth in mortgage lending value during the second quarter this year, compared to that during the first quarter.

"As price expectations between buyers and sellers are converging, more transactions are happening both for property sales and mortgages," said Venkatesh Srikantan, Regional Head - Assets and Liabilities, HSBC Middle East.

There is an increase in demand from end-users who had missed the earlier property booms and are happy to purchase property at those price levels, Srikantan said.

Remraam project well on-track

Remraam CommunityConstruction work on Remraam project, a major self-sufficient community development in Dubai, is well on schedule, with noteworthy progress achieved on all phases of the development.

The contractors involved in the project have been working simultaneously on all aspects of the community, and have completed the superstructure on a substantial number of buildings to their full heights, a company statement revealed.

Abour 90 percent of the excavation work on the 22.6 million square feet community project has been completed, while the foundation has been poured for over 70 percent of the project. The infrastructure work throughout the development is also progressing as planned.

The interior design has been finalized and the interior finishes for apartments have also commenced. A model apartment has been completed with enhanced finishes and fixtures, and will be show-cased for investor viewing shortly.

The Remraam Community is steadily getting into shape, and has already achieved several major construction milestones during the past month, said Saeed Bushalat, Dubai Properties Group.

The progress of the project confirms the company's commitment towards the investors and the scheduled delivery of the project, he added.

Remraam is 100 percent compliant with RERA (Real Estate Regulatory Authority) laws and has offered customers with the scope of offering payments based on construction milestones achieved, rather than the regular timeline-based fixed time payments.

Investors in the project have also been offered assistance during the current economic crisis, including incentives that will reward prompt payments with reduction of up to 30 percent on their purchase price.

The development offers true community lifestyle which offers good value for money. The Arabian-themed development features low-rise architecture with high quality standards and an outstanding location within Dubailand, ideal for a range of potential home owners.

On completion, Remraam will be a self-sustained community, offering lush landscaping, which covers 85 percent of the development, with a range of amenities such as swimming pools, health club, gymnasium, sauna and steam rooms, basketball and tennis courts, restaurants, community mall and entertainment outlets, apart from nursery, walkways, parks and retail outlets.

Tuesday, August 18, 2009

Damac's Ocean Heights stands 70 storeys high

Damac Properties, the luxury lifestyle provider, has announced that its iconic 'Ocean Heights' development is nearing 70 storeys in height, and that the development will be completed within a year.

This indicates the Damac's determination on construction and delivery of the skyscraper, which is finally expected to house 84 storeys.

Located at the entrance to Dubai Marina along the Al Sufouh Road, the structure is all set to be one of the most iconic buildings in the area, and is already towering above all other structures in the vicinity, with its twisting architectural design that now more evident.

The main contractor of the project, Arabtec, is completing one storey every week. The Alumco is installing the external blue glass cladding on the building. The electric wiring and cabling works inside the tower have reached the 60th floor, while the interior plastering and painting have reached floor 55.

The CEO of Damac, Peter Riddoch, remarked that the progress made by Ocean Heights project is a great testament to the tremendous team work happening on site.

Damac is on-track to complete the building, and this demonstrates the team work by all staff and contractors, he pointed out.

On completion, Ocean Heights will feature 680 apartments ranging from single to triple bedrooms, and 'Signature Series penthouse range', the ultimate luxury apartments with latest in hi-tech gadgetry and luxurious home comforts. The first penthouse floor is just been constructed at floor 67.

Apart from offering stunning individual homes, Ocean Heights will offer communal outdoor leisure deck, complete with pool, gymnasium, steam rooms, views of the Palm and Atlantis. There will be good accessibility with nearby links to the Dubai Metro and the range of leisure amenities and shops of the Marina on hand.

Ocean Heights is the third project at Dubai Marina, to be completed by Damac Properties. This will be followed by Damac Heights, another super tall structure due for completion in 2013.

According to the General Manager-Operations at Damac, Ziad El Chaar, the Marina continues to be prime location for people seeking for investment in property in Dubai.

"We hope the two iconic buildings, coupled with our already completed projects like The Waves and Marina Terrace, offers great opportunities to customers with a range of various options," he pointed out.

Ocean Heights is expected to be completed by the end of the year, contributing to the Damac Properties triology at Dubai Marina by next summer, El Chaar confirmed.

Monday, August 17, 2009

Dubai likely to record 31,000 surplus residential units

According to a JP Morgan report, a surplus of 31,000 residential units could be recorded in Dubai, mainly due to the decline in expatriate population, while the shortage of units in Abu Dhabi is hoped to rise to 28,000 by the year-end.

In the short-term, the non-residential sector in the UAE will continue to be under pressure, owing to global financial crisis. However, historical shortage of both retail and commercial space in Abu Dhabi has kept tab against fall in leasing rates well below Dubai, reveals an investment bank report on MENA (Middle East North Africa) real estate.

Ever-since its peak during mid-2008, the average transaction volumes are down by 60 percent during the first half of 2009, compared to that during same period in 2008. Despite the slight pickup in transaction volumes recently, the supply overhand in Dubai property sector will touch 28,500 by end of the year, because of the modest economic forecast and negative population growth estimates, JP Morgan said.

Furthermore, after 2009, the JP Morgan says that the forecast of 3.5 percent population growth for Dubai is unlikely to absorb the surplus residential units, which according to Colliers International, will total to 25,000 per annum in the next three years.

However, given Dubai's large infrastructure investment, the city's positioning which makes it accessible to neighbouring economies out of which few are facing economic challenges, and Dubai being a liberal tax-free business-friendly destination, a surprise demand recovery from regional investors, exposed to less stable geo-political environments, cannot be ruled out, the Bank concludes.

Contrastingly, the short-term supply of homes in Abu Dhabi is fairly limited. The high occupancy levels are unlikely to ease from near 100 percent any time soon, the Bank said.

ARRA's permission mandatory for cancellation of projects in Ajman

Property developers in Ajman will not be permitted to arbitrarily cancel any sale and purchase agreements (SPAs), as they will have to obtain permission from ARRA (Ajman Real Estate Regulatory Agency).

According to SPAs signed earlier between the developer and investor, the developer has the right to forfeit the property of the investor if the investor fails to meet payment deadlines.

No developer is authorized to cancel any contract unless they obtain an approval from ARRA. ARRA has been monitoring the situation closely and are permitting investors to fulfil their commitments by offering time, said Omar Al Barguthi, DG, ARRA.

"WE are accepted post-dated cheques from few developers whose projects are yet to begin or whose constructions have halted. We have also opened escrow accounts for them, and will be depositing cheques only when are sure about the progress of the work," Barguthi clarified.

However, no clear information is available on the number of properties forfeited by developers, as of now. Besides, the regulatory authority has accepted post dated cheques from few developers whose projects are yet to reach the proposed level of construction. ARRA is also working out a plan linking payments to construction milestones.

Saturday, August 15, 2009

Tamweel reports third consecutive quarterly loss

Tamweel, the Islamic mortgage lender reported second-quarter loss of Dh.35million, as it boosted provisions against potential mortgage defaults.

Tamweel and its competitor Amlak Finance, whose shares have been suspended since November, are being restructured by the government. They may be merged as they suffer from steep decline in real estate prices owing to Dubai’s property market slowdown.

Compared to a profit of Dh.211m during the prior-year period, Tamweel reported a net loss of Dh.35million during the second quarter.

This was Tamweel's third consecutive quarterly loss, and is short of the Dh.4m profit, which was forecast by an analyst in a Reuters survey in July.

Tamweel said that it booked Dh.89m provisions against potential defaults on its books to offset the decline in property investment values.

The additional impairment provision on the home financing portfolio has been taken on a prudential basis and the company has not faced any considerable provision requirement, Tamweel said.

The total provisions against its mortgage portfolio stood at Dh.168m at the end of June, with Dh.140m taken as prudential provisions. Provisions against property investments were Dh.120m.

Tamweel revealed that income from properties for sale dropped almost 100 percent, touching Dh.1.7m during the second quarter, from Dh.134m last year. Income from Islamic financing and investing assets dropped by 12.6 percent to Dh.184m from Dh.211m in 2008.

During the first half of the year, the lender had lost Dh.75.8m, compared to a profit of Dh.387.3m during the same period last year. Islamic financing assets constitute 89 percent of the total assets of the firm at the end of six-month period, while investment in real estate was six percent.

Friday, August 14, 2009

Foreign investors keen on Dubai hotel properties

Several foreign investors have shown interest in Dubai hotel property sector to grab benefits from opportunities following Ramadan, revealed a senior executive at CBRE Hotels.

The Vice-President at CBRE Hotels, Amine Hamdani, said that although the number of transactions in Dubai is still poor, there is considerable interest among investors in properties located in Dubai.

"Several foreign investors are looking at Dubai with interest," he said.

CBRE has identified about 12 interesting hotel properties in Dubai. Five are operational and others are newly developed. The hotels with more than 120 rooms are worth $60million or more, depending on the location.

Hamdani said investors are looking for income-generating and operational hotels in good locations. Newly developed hotels and those under development are not of much interest to foreign buyers.

There are several opportunities available for cash-rich investors. The hotel investment deals happening in the industry are comparatively very few in number as the region has been dominated by developers and not investors.

Hamdani revealed that according to earlier estimates, 65,000 new hotel rooms are required in the next seven to eight years. But owing to economic crisis, the number of extra rooms in the next five years would be just 22,000, constituting 30.8 percent of the forecast. The market has been hit by adverse conditions in the real estate market, with several mixed-use developments with hotels being stopped or delayed.

On the flip side, during the past four years, the developers have been investing in the hotel industry yields high earnings. In the next four to six years, institutionalisation of hotel industry, coupled with the growth of strong investment market will result in more foreign buyers seeking long-term opportunities. The door will remain shut to a large portion of short-term players, although few will remain, and will have a role in bringing back liquidity, he concluded.

Wednesday, August 12, 2009

Al Fara'a confirms timely completion of major residential projects

Al Fara'a Properties, a member of the Al Fara'a Construction, a property and industrial group, announced that it is on track to keep up its delivery targets for two of its major residential projects, due for completion towards end of 2010.

One of these projects, namely, The Manhattan, draws inspiration from the urban residences of New York in 1930s, and will offer 355 units comprising studio, single, double and triple bedroom apartments.

The second project, namely, Mulberry Mansions, includes Victorian-styled townhouses with four bedrooms, a terrace, a private two-car garage, a balcony, small private garden and a maid's room.

The Director of Al Fara'a Properties, Natasha Gangaramani, confirmed that the construction of The Manhattan is progressing as scheduled, with the ground floor slab being completed, including ramps leading to the three basements.

"We believe that swift, efficient and timely handover of projects is as important for investor, as the value of investment, driven by construction quality and facilities offered," Gangaramani said.
With more than three decades of strong track record to its credit, the Al Fara'a Group has the flexibility to meet its primary goal of excellence. It recently launched the facilities management division, which enables the company to ensure that all the current projects of the company are built in accordance with the best global practices.

John Baarens, the General Manager, Al Fara'a General Contracting, the contractor for Jumeirah Village-based projects, said that with the completion of initial groundworks, the project is now focusing on the superstructures of The Manhattan and Mulberry Mansions.

"To ensure the standards and offer quality value proposition for our client, we will use only extensive tendering and value engineering capabilities offered in the market, and will continue accessing the broad-base of expertise throughout the Al Fara'a Construction, Property and Industrial Group. We are confident about delivering these projects towards end of 2010," Baarens said.

Hydra Village model villas launched in Abu Dhabi

Hydra Properties, subsidiary of the Royal Group, has launched model villas at Hydra Village.
The villas are likely to give investors better guidance about their future homes at the self-contained, upscale residential village in the vicinity of Abu Dhabi.

Potential home buyers are being taken around on a guided tour of the premises by dedicated customer service team between 9am and 6pm everyday.

The Chief Executive of Hydra, Ali Bin Sulayem, expressed 100 percent committed towards timely delivery of projects. The visitors have expressed satisfaction about the progress so-far achieved, and have gained a close vision of the development, due to the company's effort to offer better clarity on the project, he said.

The initiative by Hydra is a part of its strategy to connect better with its customers. The trained executives at the center can address all investor queries, and remove concerns regarding progress of the development.

Investors will also receive monthly email updates with video clippings of major construction milestones achieved at the site. Early this year, Hydra Properties waived off the penalty fees and offered to hold-off payments until early 2010.

According to Bin Sulayem, the open communication policy adopted by the Company is the latest initiative taken to meet the client-queries.

Being a compound city in the entrance of Abu Dhabi, Hydra Village offers the convenience of self-sustained, small-scale city, blend with comfort of uptown community.

A group of townhouses surrounded by greenery of recreational parks and open spaces, sprinkled with top-notch facilities such as clinics, mosques and other impressive utilities infrastructure renders Hydra Village as a welcome community for the time-strapped professionals and those seeking an idyllic lifestyle.

Monday, August 10, 2009

Dubai housing prices dip 24 percent in Q2 2009

Residential prices in Dubai fell by 24 percent during the second quarter, from the previous quarter, although at a comparatively slower rate, inline with improving global property markets, the Landmark Advisory said in its latest report.

In Abu Dhabi, however, the prices fell less during the same period, as the emirate continues to tackle the global downturn better than its neighbour.

The average selling price for villas in Dubai dropped 24 percent, while that of apartments fell 17 percent in the second quarter. During the first quarter, however, the prices of villas and apartments fell by 32 and 23 percent respectively compared to the fourth quarter of previus year.

Dubai property sector has been hit hard by the global economic crunch, but the improvement seen in more mature markets such as the US and Britain, comes as a happy sign to investors.

Residential prices in Dubai is hoped to stabilize by the fourth quarter of this year, after falling 9 percent from the previous quarter, Colliers International, mentioned in its report.

Rents of villas in Dubai fell by 19 percent, touching Dh.220,350 during the second quarter, while that of apartments dropped 23 percent touching Dh.129,900. The volume of transactions of villas and apartments increased 25 percent and 20 percent respectively, as several people relocated from Dubai to Abu Dhabi and Sharjah.

In Abu Dhabi, although the selling prices of apartments fell by 11 percent, and there was an 8 percent decline in villa prices, during the second quarter, compared to previous quarter, the prices are unlikely to fall further, the report confirms.

The rate of decline slowed considerably, as prices for both categories fell 20 percent and 30 percent respectively during the first quarter from the fourth quarter, Landmark said in May.

Rents in apartments and villas fell by nearly 10 percent during the second quarter. With more supplies likely to enter the market, rents for villas and apartments are likely to fall considerably, says Landmark Advisory, part of real estate brokerage and consultancy Landmark Properties.

Work on world's tallest commercial tower makes steady progress

Fortune Group, the leading Dubai-based property developer has revealed that work on the prestigious Burj Al Alam, the world's tallest commercial tower, is going at a steady pace, with the piling work progressing satisfactorily at Dubai's Business Bay.

Speaking about the progress of work, Syed Muhammad Ali, the CEO of Fortune Group said the shoring work is complete, and already 146 of the 513 piles required for foundation of pioneering project have been laid. The piling should be complete by January 2010, and the project is on track for scheduled completion by 2012.

The structure, which is expected to be 510 meters tall on completion, the company has used state-of-the-art structural techniques in shoring and piling, and the best construction practices with about 58,000 cubic meters of concrete, and 5000 tonnes of steel which will require 180,000 man-hours to complete.

Designed by Nikken Sekkei of Japan, Burj Al Alam resembles a crystal flower and is an eye-catching hyperboloid skyscraper that flares out at the top and bottom, and draws inspiration from the Arabian rose and Zen culture.

Comprising 74 storeys of office space, it also includes a high-end 200-room hotel (the highest in the world), and 104 serviced apartments in the top 27 floors, the four-storey retail concept "The Corporate Mall" at the base. The six-storey crown where the petals separate, offers wonderful views of Business Bay to the south, and Burj Dubai super high-rise tower to the north, featuring restaurant, the world's highest sky garden and rooftop spa, viewing deck, Turkish bath, helipad and private club facilities.

About 50 percent of the retail space of the tower in Corporate Mall, and 75 percent of commercial space has already been sold out by Fortune Group.

Sunday, August 09, 2009

Several Dubai Marina projects delayed

The properties in Dubai designated as on hold by RERA (Real Estate Regulatory Agency), the property regulator by Dubai Government, are not the only projects that have been delayed. In fact, the agency has two other categories, such as 'delayed' and 'progressing to RERA-approved revised schedule', to indicate that a project is behind schedule, The National reported.

According to a report published in RERA's official magazine, although 10 percent of projects are currently 'on hold', the developer is still unsure, as another 31.8 percent of the projects have been 'progressing but not yet on site'.

RERA, last month made the announcement that it had designated 69 out of 407 projects on hold, which constitute 17 percent of the projects.

Among the nine delayed projects in the Marina, RERA's website reports only three as delayed. Among these, one of the projects, designated as delayed is the 90-storey Damac Heights tower, launched in 2007.

Works have begun on site, but have now stopped to permit a design review in accordance with the comments by Dubai Municipality, said RERA's inspection note. Schedule will be updated when the design and re-tendering has been completed, it states.

According to a spokesman for Damac Properties, the company has three other projects in Dubai Marina, among which, the Marina Terrace and The Waves have been completed, while the Ocean Heights has reached 66th storey.

The other project in the Marina is Damac Heights, and it is not cancelled or on hold and is very much in progress, confirmed Niall McLoughlin, Senior Vice President, Corporate Communications.

Although launched in 2007, the project will not be completed before 2013. The other two projects for which RERA's reports are not available online are Harbour Residence and My Tower, with inspection reports stating as progressing to RERA-approved revised schedule.

Friday, August 07, 2009

New visa rule implemented for property owners in UAE

Property owners in UAE will have to leave the country every six months, to continue staying in the emirate without a work visa, according to new rule by the DNRD (Dubai Naturalization and Residency Department).

Renewal of the new six-month property visa for non-working investors will be carried out at the airport, based on the statement by DNRD.

Once the multi-visit visa issued by the property owner expires abroad, his visa will be renewed at the airport on arrival, said the statement issued by the department.

The multi-visit visa was announced in June by a regulation to clarify the law on developers sponsoring investors on residency visas. But confusion prevailed, as to whether the investors already sponsored by master developers such as Nakheel and Emaar would be required to make the transfer.

The Deputy Director of the department, Brig. Obaid bin Surur, mentioned that the DNRD officials have begun implementation of the law last month, and are fielding inquiries from developers round-the-clock.

According to the new regulation, investors will have to meet few criteria to gain a multi-entry visa. They will have to own a Dh.1million worth property, own health insurance in the UAE, have a monthly salary of minimum Dh.10,000. The investors will also have to be 100-percent owners of the property title deeds, and should present them to the department.

Although the new law has been welcomed, analysts are of the opinion that a longer stay is required to revitalize the market.

According to a statement by the ING financial group in June, people from economically/politically unstable countries in the region had purchased residences in Dubai, presuming that they would automatically be granted residency, a huge asset to own, if the situation in their home countries turned sour.

Dubai was the only market in the region to offer this link, it pointed out.

Sorouh confirms timely delivery of Shams development projects

Sorouh Real Estate's iconic Sun and Sky towers are on their way for scheduled handover during the first quarter of 2010, the Managing Director of Sorouh, Abubaker Al Khouri revealed early this week.

The towers are among the four projects that constitute the Shams Development on Reem Island, the Dh.25billion flagship luxury housing community, due to serve 53,000 people, on completion.

The company has already slashed its prices by up to 35 percent in the Gate Towers, and Alghadeer, also a part of Shams development.

To help its developers in completing construction of the project, and to help its buyers with their purchases, Sorouh has stepped in with financing options for both. Alghadeer and Gate Towers are due for completion, as scheduled by 2012.

"It is logical for a company or developer to revisit its business plan at a time, when prices have considerably dropped, particularly, if we manage to re-negotiate these prices", Al Khouri said.

Apart from the discounts, buyers at Alghadeer can put off payments until their units are delivered to them, while the buyers of Gate Towers have had their payment plans adjusted, Khouri said.

Sorouh has always been a step ahead in offering help to its developers and customers to live up to their commitments, in comparison to several other major UAE developers. Last month, Sorouh reported more than 75 percent decline in its second quarter profits, compared to the same period last year.

Wednesday, August 05, 2009

Queue Point to be ready for handover next year

Queue Point Apartments
Construction work on the first residential project targeted at mid-income segment, namely The Queue Point in Dubailand, has been resumed, following series of external challenges which had resulted in temporary halting of the project.

Al Mazaya, which had entered into a contract for the project with Mizin, a subsidiary of Al Liwan, the main developer, to purchase 40 plots, has reported that construction work has resumed on all project buildings, with 40-60 percent completion rates throughout the project. It has confirmed that Queue Point will be delivered to owners next year.

Speaking about the progress in work on Queue Point, the Managing Director and CEO of Al Mazaya, Eng. Khalid Esbaitah, said that the project has faced several challenges which affected the progress and delivery schedule.

Choosing the right contractor for the project has been the most difficult task, particularly during this time of economic crunch, as several contractors were stuck mid-way due to variance in prices of construction materials and contracts and the decline in funding, Esbaitah said.
However, Queue Point is one of those projects that had overcome the economic fluctuations, apart from being an investment, which guarantees considerable returns for investors, he pointed out.

The project has not seen recent fluctuation in prices, while correctional methods are being applied, and the demand is equal to supply, as Queue point is based on reasonable prices on installment basis.

Queue Point is an integrated residential project, meant for mid-income sector, offering luxurious lifestyle on par with other major projects. The project has drawn several residents seeking to own affordable apartments, with over 95 percent of the project units having been sold already.

Located along Al Liwan in Dubailand, Queue Point is located close to the intersection between Al Ain Road and Emirates Road in Dubai. The project will include multi-purpose residential and commercial buildings that are between five and fifteen storeys, with enchanting designs. Residential and commercial units are interspersed with green spaces, gardens and waterfalls that cater to the needs of various sections of the society.

Monday, August 03, 2009

Limitless to begin leasing of apartments in Downtown Jebel Ali

The Galleries from Limitless
Limitless, the global master development arm of Dubai World, has announced that it would commence leasing of 300 apartments of The Galleries.

The CEO of the Limitless, Saeed Ahmed Saeed, said that the units at The Galleries combine modern work with quality living, offering a good balance of indoor and outdoor life, and promotes use of environment-friendly transport, all amidst a community-style environment.

Located in Downtown Jebel Ali, the project is served by the Dubai Metro, and will comprise four mixed-use buildings with three storeys, comprising 600 apartments, spreading across 85,000 square meters. It will also include four newly-completed commercial towers with A-grade offices available for lease. The complex also includes several retail outlets, and landscaped shaded grounds, due for completion in September.

Downtown Jebel Ali houses renowned international businesses such as Standard Chartered Bank, Blom Bank France, Citibank, Ericsson, L'Oreal and Kraft foods, apart from several other local and global companies. The offices offer high-quality tailor-made accommodation with onsite property and facilities management services.

Downtown Jebel Ali offers quality lifestyle with a combination of work, recreation and shopping, within easy access of Dubai, and just 45 minutes from Abu Dhabi. It will be easily served by the Dubai Metro and will have environment-friendly transport system, reducing road congestion. The projects will also have ample shaded outdoor space, a hallmark of Limitless projects.

Sunday, August 02, 2009

Decline in property prices, rentals will not be too severe

According to leading property consulting firm, CB Richard Ellis, weakening sales, lessening demand and fresh supply entering the market, will lead to immense declines in property prices and rentals in Dubai during the second half of this year, but the drop will not be as severe as experienced during the previous half of the year.

The once-booming property sector in Dubai, is yet to recover, although the price declines are reducing, and will hopefully bottom out by the end of the year, said CBRE in its latest report on the property market here.

The property market in Abu Dhabi enjoys a better edge over Dubai, but will remain subdued although price drops will level off, as more investors plan to hold on to their assets due to lowering prices.

The Associate Director at CBRE Middle East, Matthew Green said that the company has already registered double-digit falls during the first half, but the declines will be limited to single-digit level during the rest two quarters.

Green said that he does not expect recovery in Dubai until next year, as the residential and retail prices will be further pressurized due to high volume of supply.

According to CBRE, the pressure on lease and occupancy rates during the second half will be most prominent in new residential developments such as International Media Production Zone, Dubai Silicon Oasis and Motor City.

In the commercial office market sector, supply will substantially increase during the next six months, and the majority will be from new business areas such as Al Barsha, Jumeirah Lake Towers, Business Bay, TECOM and Dubai Silicon Oasis.

With the supply continuing to surpass demand, the competition between landlords will tighten, resulting in greater incentives for tenants, Green said.

Saturday, August 01, 2009

Emaar reports second quarter loss due to exceptional write-down

Emaar has reported Dh.1.29bn loss during the second quarter of the year, marking 161 percent decline in profits, compared to Dh.2.12bn during the same period last year, due to writing off the full value of its US subsidiary.

Emaar also recorded 135 percent decline in half-yearly profits, which dropped from Dh.3.01billion during the first half of 2008 to Dh.1.05billion during the first six months of 2009.

Emaar in its statement revealed that due to continued slow down in the US real estate market and Chapter 7 proceedings, pertaining to J L Homes, Emaar has decided to write down the complete book value of J L Homes, which amounts to Dh.1.73bn ($470million) during the second quarter, in order to be conservative in accounting for such an investment. This exceptional write-down resulted in a net loss of Dh.1.29bn during the second quarter of this year.

Emaar, the developer of the world's tallest tower, Burj Dubai, decided to write-down its investment in the US unit, J L Homes by Dh.1.77bn, back in 2008, as it tried mitigating further slumping. This resulted in a 54 percent decline in the company's year-end profits.

However, it is yet to be ascertained as to why this write-down has been leaving such a huge dent in the company's revenue. The second quarter results were released by Emaar, following closure of stock markets yesterday.

The Managing Director of CB Richard Ellis -Middle East, Nicholas Maclean, said that given the geographical concentration of Emaar, and taking into consideration the net profit of Dh.442mn during the last quarter, the result seems good.

The company's revenues are down by 65 percent, touching Dh.194bn during the second quarter, compared to Dh.5.60bn during the second quarter of 2008.

Half-year revenues also dropped 57 percent touching Dh.3.49bn from Dh.8.13bn by the end of first-half of 2008.

The Chairman of Emaar, Mohammad Ali Al Abbar, has described 2009 as a challenging year so far, but has emphasized that Emaar is focusing on project delivery and is going ahead to create 10,000 new jobs with its mall and hospitality projects.