Monday, November 30, 2009

Emaar unveils The Palace Residences at Downtown Burj Dubai

Leading developer, Emaar Properties has unveiled its new residential project The Palace Residences at Downtown Burj Dubai, which further adds to the appeal of the most sought-after premier lifestyle destination in Dubai.

Being part of The Old Town Island development, The Palace Residences offers 65 units on the whole. Positioned centrally in Downtown Burj Dubai, they offer wonderful views of Burj Dubai and lies in proximity to Burj Dubai - the tallest building in the world, the Dubai Fountain - the world's tallest performing fountain, and The Dubai Mall - world's largest shopping and entertainment destination.

Customers are offered the choice of opting to live in or benefit from the several leasing options offered by The Address Hotels and Resorts, the hotel brand owned by the Emaar Hospitality Group. They get to lease their units with The Palace - The Old Town. The initiatives offer good returns to customers too.

The Managing Director of Emaar Properties, UAE, Ahmed Al Matrooshi said that The Palace Residences offer unmatched property landscape in Dubai, as these luxury homes appeal to the finer tastes and sensibilities of connoisseurs.

Sunday, November 29, 2009

Al Fajer delivers first tower at Jumeirah Business Centre

The first tower, Jumeirah Business Centre 2 of Jumeirah Business Centre development by Al Fajer Properties at the Jumeirah Lakes Towers has been delivered, following restructuring of the company.

The process of re-structuring focused on the liabilities of Dh.4bn by the company and Dh.200-Dh.400billion debt, liquidating its land bank worth Dh.800mn, appointing a new management team and reducing its workforce by 30 percent. The total value of mitigated risk was brought down to Dh.3billion.

According to Shaikh Maktoum Bin Hasher Al Maktoum, CEO of Al Fajer, the construction plan by the company was accelerated to a four-day cycle per floor for phase one, comprising towers one to five of its nine commercial towers.

The development comprises nine towers on the whole, and will cater to both large local and multinational companies. The freehold offices cover a leasable area of 3.6mn square feet.

The handover of units in phase one has been going on, while the phase two comprising four towers will be completed in 2011. So far about 70 percent of the inventory has been sold.

Shaikh Maktoum revealed that the prices for units in the towers have grown from Dh.800 per square foot two months ago to Dh.1200 per square foot on inauguration.

He said that the company is expecting a maximum 50 percent default rate and minimum 20 to 30 percent rate. To counteract the problem, Al Fajer is offering discount packages to investors.

According to Sheikh Maktoum, Dubai still holds a competitive edge when it comes to commercial space.

Moreover, labour accommodation and overheads are cheap, which is advantageous to Dubai, he adds.

Thursday, November 26, 2009

Prices of Dubai Marina units on the rise

The prices of the Dubai Marina apartments have grown by 18 to 38 percent during this year, revealed a real estate company.

The Head of Sales of Asteco, Vineet Kumar, said that single bedroom apartments at Dubai Marina are currently selling at Dh.1300 per square feet, an increase of 18 percent from Dh.100 per square feet sold during the beginning of the year.

The double bedroom apartments are now being sold at Dh.1250 per square feet, an increase from Dh.900 per square feet in January, while the triple bedrooms are sold at Dh.1250 per square foot, an increase from Dh.950 in January.

Single bedrooms measuring 850 to 900 square feet at Elite Residence and Dorrabay are now priced at Dh.1.2million, reveals Asteco’s report. In January 2009 this type of property was quoted as Dh.900,000, while similar apartments were priced at Dh.1.35mn in July 2008.

The double bedroom apartments at Marina Promenade measuring 1280 square foot is currently priced at Dh.1.6mn, while it as Dh.1.15mn in January.

A triple bedroom apartment in proximity to Jumeirah Beach Residence costs about Dh.2.37mn at present, while the same property was priced Dh.1.8mn in January.

However, four bedroom apartments have not seen much improvement in prices at present, and stand at Dh.975 per square foot, an increase from Dh.850 per square feet in January this year.

Demand for four and five bedroom apartments at Dubai Marina is much lower than that for triple, double and single bedroom apartments, as families have the affordable option of purchasing four or five bedrooms at villa communities.

The increased demand for smaller units at the Marina implies that such units command higher prices per sq. ft. than larger ones. The larger the size of an apartment, the lower is the price per sq. ft., said Kumar.

Figures by Asteco reveal that the value of apartments at the Marina has dropped by 15 to 60 percent since July 2008. However, certain towers in the Marina are still maintaining their values due to demand from investors and end-users, although the growth values in prices of few other properties in Dubai are slow. This is reflected in the fact that the prices offered in the market for the Marina have a wide range at Dh.850 to Dh.2000 per sq. ft.

Wednesday, November 25, 2009

UAE invests Dh.100bn into realty sector in 5 years

The UAE has invested Dh.100bn into the real estate sector over the past five years, which is more than double the total capital injected into property projects during the previous five years, revealed official figures by Ministry of Economy.

The investments in the real estate sector during the period 2004-08 accounts for more than 15 percent of the total public and private investments pumped by the UAE during that period, the figures indicate.

Investments in the property sector stood at Dh.41bn during the previous five-year period and experts said that this indicates sharp increase in capital over the past five years. This was the result of construction boom triggered by strong oil prices and the opening up of property sector to foreigners.

Investments in construction sector stood at Dh.41.1bn during the period 2004-08, bringing the total capital pumped into real estate and construction in the UAE to Dh.141bn during that period.

Investments touched an all-time-high of Dh.33.2bn in the real estate sector in 2008 and about Dh.13.8bn in construction sector. In fact, these investments are considered as the main factor for the sharp growth recorded in the non-oil economy sector of the UAE during the past five years.

Official data have revealed that the real estate sector saw an increase by 35 percent per annum, touching a peak at Dh.78.4bn in 2008, compared to Dh.28.5bn recorded in 2004.

Such high growth also helped boost expansions in other non-oil sectors of UAE, boosting GDP by 25 percent. The communication sector was the biggest recipient of investments during 2004-08 with total capital of Dh.114.1bn, followed by manufacturing sector with Dh.112.5bn and real estate by Dh.99.9bn.

According to industry sources, the pace of investment will gather pace during the next few years, as the UAE pushes ahead with major projects to expand its crude output capacity, gas, refining and petrochemicals.

Thursday, November 19, 2009

Global investors eyeing Dubai realty market, once again

With the recession having loosened its grip across the globe, global investors have begun eyeing Dubai real estate market as the property prices have slowly begun to move towards reasonable levels, an industry expert said.

The latest results from the Dubai House Price Index from Colliers indicate that real estate prices in Dubai have grown almost seven percent during the third quarter of the year from the previous quarter, said Tej Kohli, real estate investor and founder of Ozone Real Estate.

The results indicate a bounce in the market and are a true indication of excellent recovery, Kohli said.

According to Kohli, the stability in property prices is set to be steady from this point on, given the fact that real estate prices are moving to more reasonable levels.

The best indication about the Colliers report is that transactions increased by 64 percent during the third quarter, due to relative stability in prices and affordable housing.

Moreover, the growing property boom will be further strengthened by a series of new launches and openings within the emirate, the report said.

Towards mid-December this year, the world’s tallest tower Rose Rayhaan, will see a gala opening, at Sheikh Zayed Road, after which, the five-star Jebel Ali Golf Resort and Spa will re-open following a brief renovation, Kohli pointed out.

A series of projects due for launch, apart from the entry of new airport, a series of high-end hotels, including The Conrad Hotel Dubai and second Ritz Carlton are all ready for opening early next year.

This will be followed by the opening of the crescent-shaped The Palm Jumeirah, Royal Amwaj Resort & Spa, Jumeirah Golf Estate, Dubai International Airport, Tiger Woods' Al Ruwaya Resort, all set to commence in 2010.

The slew of launches indicate that Dubai is well on track, and the global tourist numbers are up by 4 percent during first half of 2009, compared to same period last year, Kohli concluded.

Tuesday, November 17, 2009

Dubai property market - Points to ponder before attaining normalcy

With the Dubai property market, slowly getting back to normalcy, Hesham Elfar, CEO of Coldwell Banker, UAE, reveals to the media, the strategy to be adopted to retain the market in the same way.

According to Hesham, Dubai real estate market is yet to hit the bottom, and a further dip in property prices are likely, before things improve. During the next six months, while the villa prices would continue to remain stable, apartments are likely to see a dip by 5 to 7 percent, due to excess supply coming into the market during the coming months. Even commercial properties are likely to see a fall in prices, due to upcoming supply.

With Dubai showing tentative signs of recovery, players in the industry should not get too complacent, says Hesham. There is more for Dubai to do before it can bounce back, he adds.
In the first place, residence visa issue needs to re-evaluated, as this has drawn several people into investing in real estate in Dubai. A three-year visa has been replaced with a six-month multiple-entry visa, which is expensive and a tedious process with lot of paperwork. This issue needs to be resolved to attract foreign investment, Hesham said.

Also, to further boost commercial markets, the government should offer incentives to companies to establish shops in the UAE. When companies set up offices in a country, they in-turn create job opportunities, housing requirements, and increase consumer spending, which is vital for the economy. Also incentives are needed for financial institutions and trading companies. But, more than anything, a clear, transparent regulation is required to ensure that buyers' rights are protected in a real estate market, Hesham points out.

According to Hesham, Burj Dubai, once opened, will increase the value of property in the area surrounding it.

The Executive Towers, which is recently completed is well-positioned and will gain the benefit of being in proximity to Burj Dubai.

The Infinity Tower, which will be unveiled in June 2010, will offer wonderful views of the sea and Dubai Marina to its residents, given its spiral design.

Victory Heights can get large, reasonably priced villas, close to Dubai Sports City's amenities.

Friday, November 13, 2009

Property market recovery is dependent on supply-demand factors

The UAE property market, which largely focuses on Dubai and Abu Dhabi, will take a couple of years to recover from the financial crisis, said J.P. Grobbelaar, the Director of Research and Advisory at Colliers International, the leading real estate consultancy.

High speculation levels in residential and commercial properties, prior to onset of crisis, had exaggerated the downturn, he commented on the second day of the Ministry of Economy-sponsored Abu Dhabi Outlook Summit.

The downturn in property market was expected, although it was not meant to be so severe. The correction is actually good for the market, as the market is now returning to fundamentals, Grobbelaar said.

According to Grobbelaar a healthy recovery of property market will depend on factors such as supply and demand that the developers are relying on more now, rather than speculation.

Rentals for residential properties in Dubai have fallen 38 percent since the beginning of the year, while Abu Dhabi has seen 18 percent decline.

Analysts state that the recent increase in investor activities in both markets are an evidence of initiation of recovery.

"The market is being driven by excess liquidity and easy monetary policy. With the interest rates being considerably low, coupled with depreciating currency, money is flowing out of banks into real estate and property," says Majid Azam, analyst for HC Securities - MENA (Middle East North Africa) region.

An oversupply of residential units in Dubai and an undersupply in Abu Dhabi is causing a spill-over impact and transforming both markets into one, he added.

Thursday, November 12, 2009

Marina Residences brings in 2000 new residents to Palm Jumeirah

Master developer Nakheel's announcement to handover the homes at Marina Residences, is likely to bring in about 2000 new residents into Dubai's Palm Jumeirah.

The phased handover of 980 units in the project, located at the tip of the trunk of the island will continue until early next year, Nakheel said in its statement this week.
Marina Residences

Among the 980 units, 940 units are a mix of apartments and penthouses. The luxurious penthouses are designed over four storeys offering about 14,000 sq. ft. of living space. The development also includes 40 townhouses located along the marina-fronted promenade.

The Palm Jumeirah currently houses 12,000 residents and the work in the island is likely to continue over the next 5 to 6 years.

The Managing Director of Nakheel Development Projects, Marwan Al Qamzi, said that at Nakheel, the focus is on delivering quality communities and handover of Marina Residences is another major milestone on Palm Jumeirah.

Tuesday, November 10, 2009

Wasl to add 5000 new housing units into Dubai property market

There will be an additional 5000 new housing units or moere in Dubai property market during the next couple of months by Wasl, the asset management arm of Dubai Real Estate Corporation (DREC), a top official said.

The Chief Executive Officer of DREC, Hesham Abdullah Al Qasim, revealed that Wasl already manages about 20,000 housing units. Now with the inclusion of these residential units, the total housing units under the company’s portfolio will touch 25,000.

Over the past year, there has been a natural transition of Dubai property market from freehold to leasehold. This will help in easing rents further, with mounting supplies.

The total housing supplies in Dubai this year may range from 27,000 to 30,000 according to the projections made by Department of Finance, which is hoped to be less than enough to cool the demand. But, with the impact of global economic crunch on UAE economy, the demand forecast has been revised further down.

Few analysts are still of the opinion that the current deliveries may result in an oversupplied market, which may bring down prices and rents down further. However, according to Al Qasim, the price readjustment has been good for market. The new supplies will help in stabilizing the market further, particularly when the demand in market picks up.

"We have a balanced portfolio of housing units that are 95 percent occupied, which gives us a very good coverage," he added.

Established in June 2007, the DREC combines the assets of Development Board and Dubai Real Estate Department through Law No.14, according to which, the corporation will be a public commercial institution, affiliated with Dubai Executive Council.

DREC is responsible for owning and managing its land bank, including sizable amount of properties registered under the name of Dubai Government, and others. The corporation holds a large portion of the Dubai land bank, however, it has no plans to enter the freehold property market.

Housing rents in Dubai surged between 2005-08 based on growing demand, which has compelled several thousands of Dubai residents to shift to places like Sharjah where rents were lower which pressurized the infrastructure. Growing rentals prompted the government to impose a rent cap to help the mid-income group, apart from seeking solid investment in low-cost or affordable housing that helps Dubai to tame housing inflation.

Wasl has continued to maintain its low rents in Dubai, despite the recent rent hike. Rent for a double bedroom flat has been as low as Dh.16,000 in few parts of Dubai even now.

In order to help the market and ease pressure on rents, DREC has undertaken a massive housing scheme to offer affordable homes for growing population. The new housing supplies are part of this plan.

Wasl is developing its businesses in several verticals such as Hospitality, Property, Leisure and Industries. About 5000 industrial units of Wasl are already spread across 27 industrial zones such as Jebel Ali, Al Quoz, Rashidiya, and on the hospitality side there are eight hotels under management. Wasl also gradually plans to add hospitality commercial and retail project development arms.

Saturday, November 07, 2009

Dubai Government forms Committee to deal with bounced property cheques

The Dubai Government has established a new judicial committee to deal with bounced cheque cases in the property sector.

H.H. Shaikh Mohammad Bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE and Ruler of Dubai issued a decree establishing a judicial committee to this effect.

The Committee will settle dispute cases pertaining to bounced cheques irrespective of whether issued by a buyer to a developer or from tenants and beneficiaries of long-term units as per the provisions of Law No.7 of 2006 pertaining to property registration in Dubai.

The judgments from the Committee will be decisive and cannot be challenged and will be implemented through execution department of Dubai Courts.

The decree also prevents the Public Prosecution and Courts from doing any investigation on bounced property cheques or issuing any sort of ruling in this regard, unless the case is looked into by the Committee. The bodies must start referring such cases to the Committee.

According to experts, such a move will help the real estate sector of the emirate in moving forward.

The CEO of Real Estate Regulatory Agency (RERA), Marwan Bin Galita, said that creating a judicial committee to settle bounced cheque disputes in property deals will prove useful to property market. Several real estate issues could be solved by bridging gap between buyers and sellers by offering them logical companies that satisfy both.

The Committee will include a Chairman, who will be chosen by appeal court judges in Dubai Courts, apart from two other members, the Dubai Primary Court judge and a representative from Dubai Land Department.

The Committee has the right to cancel a bounced cheque issued to a developer if it has been proven so, and obliging the issuer of the cheque to write another one in its place to replace the disputed cheque.

Dubai is following an international standard of solving disputes involving bounced cheques in property business and this helps in maintaining transparency, and to regain market confidence.

Thursday, November 05, 2009

Free legal service launched to support Dubai real estate community

The new free legal service launched to support people caught in real estate associated court cases, has proved to be a fair way to protect the interests of Dubai's real estate community, reports the Gulf News.

The main objective of such an initiative was to ensure fairness and justice to those concerned about property matters and those in need of such assistance, irrespective of the circumstances, clarified Mohammad Sultan Thani, Assistant Director General, Land Department.

The free legal advice service ensures that none is prevented from pursuing their rights just because they may be priced out of the system.

The Head of CBRE (CB Richard Ellis), the leading research and consultancy firm, Mathew Green, said that the free legal advice offer is another step in the right direction by RERA (Real Estate Regulatory Authority), as it aims to improve transparency in the Dubai property market.

Although the overall confidence in the legal dispute system has been little low due to the time taken in addressing the current backlog, one of the local law firms involved in this initiative said that justice for all is the main motto behind the initiative.

Dubai houses record 7 percent rise in prices during Q3 2009

Prices of housing units in Dubai saw an increase for the first time during the third quarter, following the major downturn faced by property market in the wake of credit crunch, reports Colliers International, the leading real estate consultancy.

Dubai, which houses the tallest buildings and man-made islands in the world, saw its property market hitting the bottom, with finance drying up, construction activities almost coming to a halt, and several projects being cancelled or delayed.

Colliers, in its third quarter report, mentioned that the house prices marked a 7 percent rise during the period, compared to that of the previous quarter, the first-ever increase after third quarter of 2008.

According to Colliers, the increase was largely due to availability of mortgage and more confidence about expatriate job security.

A statement by Colliers International said that the Q3 results indicates a bounce in the market, but the Q4 results should be waited and watched before predicting the existence of a growth profile or potential recovery.

The prices for villas, apartments and townhouses showed a modest increase during the quarter, compared to the second quarter when there was an increase in the number of deals also. Even market transactions during the third quarter showed a 64 percent increase over the second quarter, with apartments making up for majority of deals.

The Colliers index is mainly based on mortgage data from local and international lenders. It measures prices in the parts of Dubai where foreigners have been granted permission to purchase properties, ever-since Dubai opened its real estate market to foreigners in 2002. These areas were largely responsible for the Dubai real estate boom.

The improved condition in Dubai's real estate sector are inline with a nascent recovery in a more mature global property market, such as United States and Britain, the report said.

According to a Reuters poll in October, the prices will drop another 10 percent this year. Colliers however, reported a 47 percent drop year-on-year during third quarter.

The prices of housing had witnessed a 9 percent drop in the second quarter, but the pace of decline had slowed thereafter. The boost in the third quarter helped in bringing back the prices to levels last seen in second quarter of 2007, the Colliers report said.

Tuesday, November 03, 2009

Complete recovery of UAE property market likely in three years

With the property prices yet to hit the bottom, and the banks still being reluctant to lend, the total turnaround in the UAE real estate sector will not happen until the next two to three years, says a management consultant company.

According to Dr. Reinhold Leichtfuss, Senior Partner and Managing Director, Boston Consulting Group - Middle East, the property market in the UAE, along with other emerging markets will continue to be volatile, as it is difficult to predict exactly when or what sort of turnaround it will be for Dubai.

According to Leichtfuss, there has been a pick-up in rentals for residential flats/apartments during the last quarter, particularly in quality destinations, although there still exists the possibility of decline in prices.

The global downturn had affected the once-booming property sector of Dubai, bringing down the property prices to more than 50 percent from their peak levels in 2008.

Investors and developers are still pinning hopes on a global economic recovery to revive interest in the sector, but, the prices will continue to remain flat, if not going down further, as the supply will be further strengthened by the new projects that are likely to hit the market by end of this year and in 2010.

Leichtfuss agrees that there has been a slow increase in return of people into the market, as there is a huge supply to begin with. Rents have marginally increased in few areas, but with the new supplies coming in next year, it is to be wait and watched as to how it will be next year.

One major cause could be due to the fact that banks are still hesitant to resume lending, and for banks that have, the criteria have become more stringent. Financing continues to be expensive and unavailable for people who wish to purchase during the downturn.

According to Leichtfuss, the recovery of real estate sector could be accelerated by real estate funds that give investor access to the market, and benefit from the upside of investing in otherwise defaulting properties.

Monday, November 02, 2009

Completed properties with access to basic amenities preferred

Asteco, the largest property services company in the UAE, has reported that apartment sales for completed projects in the prime Downtown Burj Dubai area have seen maximum increase of 8 percent on quarter-to-quarter basis.

In its third quarter report on Dubai property market, Asteco said that sales prices for apartments in Downtown have grown from Dh.1200 per sq ft during the second quarter, to Dh.1300 per sq ft in third quarter.

Across the whole of Dubai, sale prices for completed apartments and villas have increased only slightly with an average of 1 percent and 3 percent, compared to the 2nd quarter report. Rental charges have seen minimal change during the same period, the report said.

Asteco CEO, Elaine Jones said that both Downtown Burj Dubai and Jumeirah Beach Residence are fully established communities that are highly desirable, which is exactly what the market is seeking. A completed tower is no longer sufficient, if it does not form a part of integrated community with sufficient convenient access to hospitals, schools, transport, leisure and entertainment amenities. As for villa communities, The Springs and Arabian Ranches are doing well.

The property market analysis by Asteco has revealed that demand is high mainly for smaller units such as studios, single bedroom apartments, double bedroom villas or townhouses. Overall, however, apartment and villa rental rates have seen minimal changes.

At present, average rental rates for studio apartments are Dh.45,000, while that for single, double and triple bedrooms are Dh.76,000, Dh.103,000 and Dh.139,000 respectively. Villas and townhouses are available for an average of Dh.117,500 for double bedroom, Dh.180,500 for triple bedroom and Dh.227,500 for four bedrooms and Dh.278,500 for five bedroom units.

According to Asteco, majority of inquiries are for Jumeirah and Umm Suqeim where tenants are seeking 3 bedroom units in the range Dh.150,000 and Dh.180,000.