Friday, October 30, 2009

Emaar records Dh 655mn profit in third quarter 2009

Emaar Properties, the largest developer in the region, has reported a net operating profit for the 3rd quarter at Dh.655m, which is 48 percent higher than that of second quarter operating profit of Dh.442m.
According to Emaar, the increase in profits have been due to scheduled handover of Alma townhomes in Arabian Ranches during the third quarter and better returns on some foreign ventures.
Emaar posted a third-quarter net profit of Dh.655mn, an increase by revised net loss of Dh.417mn during the same period last year. Emaar shares closed 0.2 percent higher at Dh.4.61 on Thursday, an increase from a low of Dh.1.77 in March.

The increase in earnings follows a net loss of Dh.1.29bn during the second quarter this year, mostly due to write-down of its business in the US, John Laing Homes, which filed for bankruptcy protection in February this year. Emaar bought the US developer in 2006 for more than one billion dollars.

The Company also switched over to new accounting process in April which books a profit only when completed property is handed over. Emaar recorded net profit of Dh.1.51bn during the third quarter of last year before changing over to new accounting procedure.
The market is also awaiting for conclusion of merger between Emaar, Sama Dubai, Tatweer and Dubai Properties.

Emaar is generating income from its hospitality unit, with the completion of The Address Dubai Mall, a hotel in Downtown Burj Dubai, during third quarter. Meanwhile, the flagship shopping center, the Dubai Mall, which opened last October, has 1000 stores and Emaar Healthcare Group opened its first medical center at Downtown Burj Dubai.

Emaar has also completed several of its overseas ventures, while the others under construction abroad are making good progress.

Emaar will open the Burj Dubai, the world's tallest tower on 2nd December, which has attributed to the rise in profit to the handover of property at Arabian Ranches.

According to the Chairman of Emaar, Mohamed Alabbar, the focus for first nine months this year has been on project completion and strengthening of customer relationships.

Monday, October 26, 2009

ARRA aims overhaul of property visa regulations

Ajman Real Estate Regulatory Agency (ARRA) authorities have put forward a proposal to overhaul current property visa regulations. ARRA is the first property agency to officially submit such a proposal.

ARRA aims to remove property values, fixed incomes and compulsory exists as the criteria for granting or renewing the six-month residency visas.

The said regulation was a part of the federal resolution issued this May. ARRA however, has asked that it should be possible to renew visas every six months until three years, without having the need to leave and re-enter the country.

Speaking about the minimum property value regulation, which is a part of the visa criteria, ARRA says "The property value in the Northern Emirates does not exceed even half the value in other emirates. This will only lead to serving certain kind of investor."

As for requirement of fixed income of not less than Dh.10,000, ARRA said that this may cause several problems and will open door for companies operating outside the country, to give salary certificates with no reliable references.

ARRA had signed an agreement with Dubai's RERA to create a unified strategy to develop the property sector. The agreement emphasizes the need to create a unified strategy to develop, organize and modernize real estate-related activities.

Saturday, October 24, 2009

JLT is not officially a free zone, says Dubai Municipality

The Dubai Municipality's latest statement regarding the free-zone status of Jumeirah Lake Towers (JLT) has marred the hopes of several thousands of residents who were under the hope of gaining housing fee exemptions.

According to an official at the Municipality, the status of JLT needs to be clarified by a decree, and that free zone claims by a developer does not imply exemption of housing fee for its residents.

The Head of Housing Fee Section at the Dubai Municipality, Abdullah Hashim, confirmed that JLT is not officially a free zone.

The residents of towers in the 'mini-Manhattan' around the man-made lakes by Nakheel have been questioning about housing fee exemption to the developer.

"Although several areas have been claimed to be free zones, they are not free zones. Media reports had stated that the free zone areas are exempt from housing fee, and JLT has been wrongly named as a free zone. But, we never said that, and this has created lot of confusion. None of the buildings there are considered to be part of a free zone," Hashim said.

He added that municipality is however, waiting for a list which could clearly stipulate the areas designated as free zones. The concerned authorities are likely to come up with such a list shortly.

Thursday, October 22, 2009

Property location gaining prominence over rents in Dubai

Asteco, leading property services Company in the UAE, has confirmed that Dubai Metro will play a major role in office lease market.

With falling lease rates and availability of more new buildings in Dubai, office location is gaining more prominence, rather than the price, in determining where a company establishes its business, Asteco says.

The decline in property market will help in re-positioning Dubai, as an attractive business location, giving companies the ability to shop around for the best value for money. Offices offering excellent amenities for staff, will be the first to benefit, says Elaine Jones, CEO of Asteco.
Evidence from several international markets has also constantly revealed that land and property values and rentals, within the vicinity of stations, linked to metro lines are increasing considerably (almost 57 percent in the case of Tokyo-Kobe line in Japan). But, the increases do not work until the station is physically open, and not on just announcing the probable date of opening or when under construction.

As for property matters, it is always location that matters. If located close to a Metro station and a shopping mall with ample parking space, it will easily become the preferred option, says Jones. With more Metro stations being opened and people getting aware about its benefits, the ease of commuting by Metro will prove to an important factor when a company decides on re-location.

The RTA has confirmed that Ibn Battuta Metro will open by February 2010. Phase one of the Ibn Battuta Gate mixed-use development is managed by Asteco Property Management, on behalf of ‘Seven Tides’, the Dubai-based owners.

Located at the heart of the new residential and commercial corridor in Dubai, the Ibn Battuta Gate is within 400 metres of a Metro station, due to open soon. It will offer direct access to commercial business, heart of the Jebel Ali free zones and Dubai Marine, Jumeirah Lake Towers, Dubai Financial Center, Internet and Media City, Central Dubai and Dubai World Trade Center.

Wednesday, October 21, 2009

Hi-tech medical center launched at DIP

Dubai Investment Park (DIP), the largest mixed-use development in UAE, and a subsidiary of Dubai Investments PJSC, has announced the launch of state-of-the-art medical center to offer comprehensive healthcare services to its residents and employees at the Park.

The facility, worth Dh.55mn, will include several medical clinics, including general clinics, ophthalmology clinics and dental clinics, apart from round-the-clock emergency service. The medical center will be a four-storey building, with two basement floors and a rooftop gym, spreading across a total built-up area of 20,853 sq mts.

The General Manager of Dubai Investments Park, Omar Al Mesmar, said that the entity is committed to the welfare of its residents and tenants. DIP is continually seeking to find ways to support the growth of companies and improve the daily life of people living and working at the Park.

With this new medical center, residents and employees at the Park will have easy access to quality healthcare services, including 24-hour emergency service. Well-qualified physicians and medical professionals will be employed in the clinics, equipped with latest medical technologies, Al Mesmar said.

The Al Arif Contracting Company, based in Dubai, will be awarded the contract for construction of the medical center, which will be ready by end of next year.

The Dubai Investments Park is the largest business and residential community in the Middle East, with more than 1200 companies. The Park, by itself, is a self-sustaining city within a city, spreading across 32mn square meters, comprising three zones, commercial, residential industrial and educational.

Friday, October 16, 2009

Abu Dhabi witnesses increased supply in residential sector

Abu Dhabi has witnessed an increase in supply of residential property, with about 1000 new apartments delivered to the market during the last quarter, said Asteco, one of the largest property services company in the UAE.

The apartments are mostly coming up in off-island locations, including Mohammed Bin Zayed City and Khalifa City, the company said in its latest third quarter report on the property scenario in Abu Dhabi.

This increase in housing supply in Abu Dhabi will result in landlords becoming more flexible with their pricing, Asteco points out in its report.

The research conducted by Asteco, which carries out market analysis, has also found that about 400 apartments will come on stream this month in the Abu Dhabi island, apart from the supply of apartments in Khalifa City A.

When the market faces increased supply, there will be more discounts on the offer, points out Elaine Jones, CEO of Asteco.

Currently people are more attracted to Dubai due to its cheaper rents and out of the perception that Dubai gives better value for money.

With better quality units being delivered in Abu Dhabi over the next 6 to 12 months, including Marina Square, Sun and Sky Towers, several daily commuters will consider these developments. Therefore, the prospective tenants will begin to target these developments against comparable properties in Dubai, particularly Dubai Marina, Jones said.

However, this aspect is not only the deciding factor to choose a location, Jones agrees. There are also other aspects to be taken into consideration such as giving notice to existing landlords, job issues, and schooling. Therefore, the market demand dynamics may not change until next summer, she points out.

Latest Asteco report states Khalidiyah and Corniche as the high-demand areas, although tenants have begun looking at development off Abu Dhabi island too.

Average rental rates on the Corniche for single, double and triple bedroom apartments are Dh.130,000, Dh.175,000 and Dh.220,000 respectively, down from their peaks of Dh.180,000, Dh.260,000 and Dh.350,000.

Developments with gymnasium and swimming pools have begun to command a premium and this is hoped to be the trend with the Marina Square, Meena Plaza and Capital Plaza coming online, the Asteco report said.

The report also highlights demand from small companies in the office market, increasing choice in Al Ain's residential market and expansion in the retail sector.

Thursday, October 15, 2009

Dubai Pearl achieves major construction milestone

Pearl Dubai, developers of Dubai Pearl, a mixed-use luxury development, facing the Palm Jumeirah Island, has announced complete of concrete raft pouring at the Tower 2 (North Tower) of the development.

This marks a major construction milestone with installation of three of the Middle East's largest rafts on Tower 1, Tower 2 and Tower 3 of the iconic project.

The Contractors of the project, Al Habtoor Leighton, has utilized 300-plus workforce in each work shift, for two working days, to deliver the 11,000 cubic metre raft.

This latest construction milestone will permit commencement of works on the super structure for Towers 1 and 2, during the next couple of days.

Another 44,000 cubic meters of concrete will be poured into the foundation of the project, and about 10,000 tonnes of steel reinforcements would be utilized.

Situated opposite the Palm Jumeirah, the Dubai Pearl will offer wonder views of Arabian Gulf, with excellent amenities. It will shape a pedestrian-friendly 24-hour living city, boasting a range of commercial, residential, retail, hospitality and leisure elements.

It will also include a 1800-seater performing arts theatre, to meet the demands of Dubai's growing cultural calendar and will complement the project's entertainment offering.

Saturday, October 10, 2009

REITs can draw huge foreign direct investments into realty market

Several billion dirhams worth foreign direct investment may be poured into the real estate markets in the region through GCC-based Real Estate Investment Trusts (REITs), industry experts reveal.

According to Ahmad Saidali, Vice President, Fund Advisory and indirect investment at CB Richard Ellis Financial Services Middle East, opportunities exist for GCC or Dubai-based and managed REITs or such professionally managed investment schemes. This will help in attracting foreign direct investments into the region, particularly to Dubai real estate market.

REITs are regulated investment portfolios comprising several real estate assets and can be privately or publicly owned. They give access to property portfolios to individual investors, without actually owing assets. REITs are also considered more transparent and secure than other forms of real estate investment, usually offering six to eight percent returns.

According to Saidaili, the potential value of investments fitting REITs structures in the GCC is about $402.6bn (Dh.1.4trillion), depending on economic data for GCC from the World Bank.

Saudi Arabia is the biggest potential market for REIT structures and represents about 52 percent of investable universe through REITs. This is followed by UAE with 20 percent, Kuwait 16 percent, Qatar 6 percent, Oman 4 percent and Bahrain 2 percent, Saidali said.

Since 2006, more than 20 markets worldwide now have REIT regulations, including Dubai. This has helped in fuelling a global REIT market, worth more than $700bn in 2009, the consulting firm A.T. Kearney said.

However, if Dubai has to position itself as a fertile ground for REITs trading, it will face stiff competition from London, Singapore and more such cities.

The major benefit of setting up REITs is to permit international investors to diversify their portfolios by investing in varied real estate and funds, for instance in the Middle East. As for local investors, it offers an alternative to investing in local developer stocks or directly in properties.

SMEs can significantly boost realty demand in UAE

The Small and Medium Enterprises (SMEs) in UAE can help in boosting demand for both office space and affordable residential property in the UAE immensely, if provided access to bank loans to finance start ups, offered working capital and investment for growth and expansion, reveal industry experts.

According to the CEO of MAG Group Property Development, Mohammad Nimer, SMEs account for nearly 80 percent of the economic activity in the UAE, which implies that they employ a large number of staff on the whole, and these employees too need housing.

The Dubai Chamber of Commerce has said that such companies are facing trouble in securing credit from UAE banks, and if they are given credits, it is only for 3 to 6 months with interest rates of about 15 percent, as they fall under high-risk category.

Ruwad Establishment said that currently there are more than 260,000 trading and industrial companies in the UAE, out of which 200,000 fall under SME category.

SMEs in the UAE usually employ less than 100 employees with investments in the range Dh.200,000 to Dh.2million.

"Imagine the stimulus to the housing market alone, even if each SME averaged just one new employee per annum, apart from the benefits to wider economy airlines, restaurants, hotels, shopping and so on," Nimer pointed out.

However, a Dun & Bradstreet report recently estimated that the loan rejection rates in the UAE were in the range 50 to 70 percent, partly due to the difficulty by banks in gaining access to accurate financial statements and in rare cases due to the complex and time consuming process of recovering money or liquidating seized assets.

Wednesday, October 07, 2009

UAE villa prices stable, while residential prices uncertain

Residential prices in the UAE have been quite unpredictable this quarter, than during the rest of the year. Villa prices however, are likely to remain stable in the short term, the recent report by Landmark Advisory said.

About 60 percent of residential sales during the third quarter were villas, with an increase of 8 percent in prices on an average, the report said.

Demand for apartments focuses on affordable units. Financing continues to remain a major concern, with financed apartment sales dropping to 14 percent during the third quarter.

As for leasing, villa rentals in Dubai increased by six percent, stemming from relocation within UAE. However, unlike the villa segment, apartment rents in Dubai dropped 17 percent during the third quarter.

Listings were highly inconsistent with real market values in Abu Dhabi. Average prices listed for apartments and villas increased 8 to 10 percent respectively. Rents on the other hand, continue to fall in the Capital.

This year's Cityscape event, which begins today, will not be displaying the over-the-top projects unlike otherwise usually displayed, and investors and industry experts and tenants are beginning to get accustomed to the fact that the market is beginning to stabilize.

Tuesday, October 06, 2009

Cityscape real estate show unveiled

Cityscape, the Gulf's major annual real estate show was unveiled in Dubai today, as a scaled-down version of past years, reflecting steep deterioration in the property sector of the emirate.

The floor space used by property developers were lesser by 30 percent compared to last year, while attendance during the four-day event is hoped to drop by 20 percent this year, according to organizers. Last year's event saw the participation of 1500 companies from 150 countries.

Over the past couple of years, Cityscape has been a venue to unveil new projects. However, this year only nearly-completed developments and pre-announced projects have been featured.
According to Cityscape Managing Director, Rohan Marwaha, people are not expecting multi-billion dollar project launches or major finance deals at this year's event.

Nakheel, major master developer in Dubai had earlier announced plans to build a kilometer tall tower, competing with Emaar, who's nearly-completed Burj Dubai is already the world's tallest building stands above 800 meters in height. However, no impressive displays of the towers have been on the show this year.

Nakheel has confined to a scale model of completed Palm Jumeirah, the only one completed among three man-made palm shaped islands, apart from other smaller projects. Projects of several other developers on the show remain in the "concept" stage.

Meanwhile, Abu Dhabi developers are seen to have made a stronger presence by occupying larger portions of this year's show.

Sunday, October 04, 2009

2010 likely to be a vintage year for Dubai realty market

The prices of housing in Dubai is slowly returning to pre-2007 levels and indicates a vintage year for real estate investments in 2010, claims a leading industry report.

The worst part of the economic meltdown is generally believed to be over, and investors are full of cheer and looking forward to 2010.

Most of the investors in 2010 will be those who ensure that their assets are realistically priced, professionally managed, and will offer long-term stable liquidity, said a recent report by Jones LangLa Salle.

The MENA region was the last to feel the pinch of global economic meltdown, with property prices falling up to 50 percent in few areas in the past year, but, its real estate market was the fastest to cope with the economic crunch.

With the financial pressures beginning to ease, the sale activity is likely to pick-up marginally in 2010 and this will a psychological boost for investors, thereby increasing market confidence. The investors with sufficient cash too invest will benefit immensely, with the low sale prices, almost equivalent to the 2006 levels, said Matthew Green, Head of Research and Consultancy, CB Richard Ellis.

The report mentions that investors are now happier with the state-of-the-market during recent months. This sunny optimism is primarily driven by the overall economic strength derived by hydrocarbon-based economies.

Qatar, Saudi Arabia and Abu Dhabi property markets will be among the first to recover in the region, with stronger economic fundamentals and government initiatives. These markets will see greater increase in performance and pricing during the coming year.

Dubai, in particular, is likely to grow at a steady pace of four to six percent per year until 2015. Investors are considering Dubai to be the regional leader in terms of city competitiveness and real estate infrastructure, says Brendan Coakley, Managing Director at Chesterton International.

The success of Dubai in the past comes largely from its name being built as a city with good infrastructure. However, concerns still remain about the availability of capital for real estate purposes and supply-demand dynamics. The lack of liquidity and resentment on the part of few financial institutions to resume lending is proving to be a barrier for the Dubai Market.

However, taking into account the huge volume of new stock either completed or in pipeline, and combined with minimal levels of demand, the supply-demand imbalance is the main issue for the future recovery of the market, Green said.

Therefore, in future, there is increased need transparency and honesty on the part of developers, brokers and investors themselves.

Gulf News to be title sponsor for World Wide Property Show 2009

Al Nisr Group, together with Worldwide Shows and Events, has signed deal for the Gulf News to be the title sponsor for the Worldwide Property Show in 2009, the contract of which could be renewed every two years.

The Grand Hyatt Dubai show due to be held between 29th and 31st October, will now be known as Gulf News Worldwide Property Show.

The Worldwide Property Show is one of the few realty exhibitions to have survived, despite meeting the Gulf War, 9/11, the Sars epidemic and the current global recession.

Launched in 1995 in the UAE, the show is now the longest running property show in the Middle East. The show has also successfully reached Singapore, Hong Kong, Boston, Bahrain, Zurich, Seoul, Kuwait, Abu Dhabi, Doha and Muscat.

Apart from developers within the UAE, the event also includes participants from overseas, thereby offering the right platform for Emirati investors and buyers to find homes for investment, holidays or for retirement both locally and abroad.

The show had successfully drawn more than 60 participants from 32 countries with about 3900 or more visitors attending the three day show last year.

According to George Betz, International Sales Director at Worldwide Shows and Events, the interest in overseas real estate is definitely back on several investors’ agenda, with US, England and Asia considered as hot spots.

The Gulf News, being one of the leading newspapers in the region, the agreement will offer additional exposure to the show both for local and international exhibitors, he added.

The organizers of the show also plan to take the show to Singapore and Beijing over the next six months, as the property market shows marked improvement, globally.

Saturday, October 03, 2009

Khoie Properties denies insolvency allegations

Khoie Properties has denied insolvency allegations against the company, and emphasized that it continues to remain in control of more than Dh.1billion worth assets.

The firm also retains the Dh.700mn worth receivables as it owns the Dh.5bn La Hoya Bay project in Ras Al Khaimah.

The Ras Al Khaimah court recently appointed Rakeen as the official custodian of the project, which was a welcome relief for investors in La Hoya Bay.

The Chairman and Chief Executive of Khoie Properties, Frank Khoie is currently in jail, but, he is adamant that his company is not insolvent. Khoie Properties currently holds Dh.288mn worth investor money.

Out of this, about Dh.81mn was allocated for design, architecture and construction and engineering works, while Dh.72mn was paid to the Ras Al Khaimah government for the land.

Apart from the Dh.61mn which was given in as commissions, Dh.56mn was paid as salaries, and for promotions, advertising and administrative expenses, the company said. Another Dh.18mn was invested in the Ras Al Khaimah American School.

According to the company, the real estate market as a whole has been affected by the financial crunch, and Khoie Properties has been no exception. Therefore, the developer has claimed that accusations regarding insolvency are baseless, and Khoie Properties still has the ability to deliver the La Hoya Bay project to investors.

Khoie Properties had acquired six plots of land from Rakia, worth a total of Dh.302mn. When the first cheque for Dh.72mn towards construction was funded, controversies cropped up that the developer was unable to meet the Dh.57mn land payment in December 2008.

"Tightening credit markets, coupled with slow sales did bring about a slowdown in Khoie business. Funding for the project was much dependent on sales revenue, which had dried up completely," said Frank Khoie, who spoke to the media.

However, whether Khoie Properties will be able to take back control of La Hoya Bay, is yet to be watched.