Friday, January 29, 2010

Work on private projects at The World to begin soon

Nakheel has confirmed that construction would soon commence on its off-shore island development, The World.

The confirmation about the beginning of the work began when the European developer, Major Trade, announced commencement of work on its island project. Ground works, including soil testing have begun and reclaiming of the island plot and vibro-compaction will begin in February 2010, the Company said.

The Kliendienst Group last month announced that it would begin construction on its Germany Island, part of the Dh.3.1bn Heart of Europe development.

The Managing Director of Nakheel, Marwan Al Qamzi said that The World is an attractive project, given its differentiated offering and close proximity and accessibility to developing markets.

The Arabian architectural and cladding specialist, Arabian Profile Company Limited and Canadian Gulf Construction have been engaged to carry out construction work on the development. The logistics for the project will function out of The World Construction Logistics Port located at Mina Rashid, operated by Penguin Marine Boats Services.

The Managing Director of Major Trade, Viktor Herceg, expressed confidence that on completion of the project, it will generate huge demand for luxury residences. He added that Nakheel has been very supportive as the company has been striving to develop its first island development.

Located at the tip of the Greenland area of The World, the island includes a modern residential villa development and a luxury boutique hotel.

Major Trade is the real estate development investment arm and special purpose vehicle for a mid-sized European residential property developer, particularly responsible for luxury, and high-end developments in Dubai.

The work will begin on as many as 20 islands this year, Nakheel confirmed. The buyers have revised few of their initial designs taking into account the economy, and are now moving ahead with their construction works.

Tuesday, January 26, 2010

Completed quality projects in prime localities in demand

Investors are constantly seeking high-quality properties in prime locations of Dubai, due to stability in prices and increase in demand during the past months, say industry sources.

The Senior Investment Consultant at Asteco Property Management, Ken Rohan, said that transactional volumes have also increased, but investors are more focused on quality completed projects in prime localities.

The developments that are yet to be completed are not attracting potential buyers due to uncertainty about completion of the project and the eradication of speculative market, Rohan said.

However, average residential prices are likely to drop this year, with more supply coming into the market. There could even be considerable price declines in the commercial market, due to surplus projects, although the project delays and infrastructure issues, particularly in Business Bay area, could slow down the supply pipeline, said Jesse Downs, Director of Research and Advisory Services at the Landmark Advisory.

The property boom in Dubai stopped during the late part of 2008, causing prices to fall by half. Few analysts have predicted that the market could slowly recover in the first half of this year.

Friday, January 22, 2010

Housing Price Index indicates market stability

Housing Prices are getting closer to their underlying values, which indicates that the market is beginning to stabilize, reveals Colliers International, the real estate consultancy firm, in their latest house price index for the fourth quarter of 2009.

The latest house price index for the fourth quarter 2009 indicates that prices remained stable during the fourth quarter of 2009, rising only by one percent, which puts it at the same level as in second quarter of 2007.

According to Ian Albert, Regional Director, Colliers International, the fluctuation in the index has been very low during the year at only 1.7 percent. Although, there have been ups and downs, there is a strong indication that the market had reached the bottom point. Every quarter to quarter there will be small variances in prices, as the market attempts to reach equilibrium.
During the previous quarters, the prices in the index increased 7 percent in the third quarter, and declined by 9 percent in the second quarter and by 41 percent in the first quarter.

The report states that the apartment prices have decreased by four percent during the fourth quarter of last year, in comparison to third quarter of 2009. The villa prices have increased by 7 percent in fourth quarter of 2009, compared to third quarter, while the townhouse prices have increased by 10 percent during the fourth quarter of 2009, in comparison to the third quarter.

The Dubai House Price Index has been compiled by using mortgage transaction data from five different financial institutions. The reports are based on figures released by brokers or by the land department, which could sometimes be historic.

The report's data is based on the number of mortgages purchased and how many properties have been bought. The data doesn't include cash purchasers, which could sometimes lead to misleading results, said Albert.

According to Albert, the future of real estate market is dependent on several variables. There are several things happening in 2010, which hasn't been witnessed before.

Tuesday, January 19, 2010

Rents for Burj Khalifa units to outdo other established highrises

The lease rates for units at Burj Khalifa, the world's tallest tower, are yet to be established, although analysts believe that the rental rates for commercial spaces in the tower will easily surpass the prevailing rates in other established high-rise buildings of the world, such as those of Petronas Towers in Kuala Lumpur or the Sears Tower at Chicago, United States.

The world's tallest tower spreads across Dh.600 per sq. ft. on an average, which is double that of other competing high-rises across the world, said Porush Jhunjuwala, Manager, Commercial Leasing at Better Homes.

The average price of offices across the world falls in the range of $30 to $40 per sq. ft. and in iconic towers such as the petronas in Kuala Lumpur and the Sears in Chicago it is about $60 and $85 respectively.

As far as Burj Khalifa is concerned, rentals will be based on demand and supply in the tower. Several large corporates have shown interest in the prestigious tower and have enquired for office space. However, it is too early to arrive at a definite rental amount what the tower is likely to command, said Jhunjuwala.

The height of the storey in which the unit is located, will be a major factor in determining the commercial rent value. The expected premium should be about 5 percent higher with the increase in height of each storey, he said.

Another main factor to determine the rent will be the service charges, which again, are yet to be cleared at the moment. Further, even service charges for the offices, form an important component of the rent, which also needs consideration, he said.

The selling prices of residential units are likely to appreciate soon, with delivery dates set from next month onwards. At present, the apartments will draw an average sale price of Dh.3500 to Dh.5000 per sq. ft. However, with the delivery of more apartments there will also be an improvement in the achievable sales prices, says Vineet Kumar, Head-Sales, Asteco, the leading property management firm.

Currently, the office space demands an average selling price of Dh.6000 per sq. ft. to Dh.7500 per sq. ft., he said. The units on the higher floors will obviously go for a higher price attracting a premium of about 15 percent in selling prices for higher storeys.

Friday, January 15, 2010

Dubai records stability in apartment, villa prices: Asteco Report

Dubai has recorded stability in selling prices of apartments and villas for completed developments towards end of 2009, with no changes in prices during the third and last quarter of 2009.

According to Asteco, the largest property services company in the UAE, the Dubai residential and commercial property market witnessed an increase in transaction during the second half of 2009 as the economy had picked up and there was an improvement in mortgage availability.

Among the developments monitored, the Palm Jumeirah was able to hold values to the maximum, Asteco said.

Being an iconic development, and with constant improvement in infrastructure and completion of residential and hotel developments, the Palm Jumeirah is one of the most sought-after destination, said Elaine Jones, the Asteco Chief Executive Officer.

The other areas that have been of considerable interest to Asteco throughout 2009 are the Dubai Marina, Downtown Burj Dubai, Jumeirah Beach Residence, Arabian Ranches and Springs, as they offer lifestyle communities with more accessibility to leisure, entertainment, retail and education.

The average selling price of apartments in Dubai stood at Dh.950 in 2009, a decrease by 16 percent since Q1 2009, and Dh.1000 per square foot for villas with a decrease by 9 percent change since Q1 2009, the Asteco said in its report.

Business Bay and International City recorded maximum decrease in apartment sale prices since Q1 2009 with 23 percent fall. The prices at Green Community and Palm Jumeirah have remained stable with no change since the beginning of the year.

However, the year-on-year change from Q4 2008 was less by 46 percent in 2009 in comparison to that recorded in Q4 2008 and Q1 2009. This is followed by Arabian Ranches with 29 percent. However, the Palm Jumeirah and Springs recorded a positive growth with 20 and 21 percent respectively.

Similar to the apartments, the price decreases were most substantial between Q4 2008 and Q1 2009. The average year-on-year decrease amounted to 49 percent since Q4 2008.

Dubai has recorded decrease in rentals by 24 percent for apartments and 18 percent for villas on an average throughout the year of 2009, as said by Asteco.

Apartment rental rate decreased 6 percent in Palm Jumeirah, which recorded the minimal decrease, followed by a decline of 15 percent by International City since Q1 2009.

The villa leasing rates in Jumeirah and Umm Suqeim saw the highest drop with 30 percent. The Palm Jumeirah was the only area which to record an increase in villa rentals by 4 percent on an average due to lack of availability, as several owners purchased property to live in or to keep as a holiday home.

In comparison to Q3 2009, the rental declines slowed down during the last quarter with overall decrease of 2 percent recorded for apartments and 1 percent drop for villas. Although the rates picked up slightly in October, the negative media attention which Dubai received in November, recorded a decline in rental once more.

Monday, January 11, 2010

Ajman to establish new property dispute panel by Q1 2010

Ajman will shortly announce a new committee to settle disputes between developers and investors. The committee will take up issues pertaining to cheques involved in real estate transactions.

The Director General of Ajman Real Estate Regulatory Authority (ARRA), Omar Al Barguthi, said the committee was hoped to begin operations by end of 2009. But the clearance from the Ministry of Justice is awaited.

Apart from resolving investor-developer disputes, the committee will also take up issues pertaining to post-dated cheque issues and more such cases pertaining to property sector, he added.

The committee will include five members nominated by the Executive Council, headed by a Judge assigned by the Ministry of Justice. In November, the Dubai Government established a new judicial committee to deal with cases of bounced cheque in property sector.

ARRA is working with Ruler's Court of Ajman based on a decree to establish a 'bounced cheque committee'. The decree is hoped to be passed within next two months, said Lisa Dale, Partner and Head of Property Department, Al Tamimi & Company.

This follows the initiative by Dubai, wherein a similar committee was established on the directions of Dubai's Ruler.

Ajman has several cases of off-plan property purchasers, wherein developers were given post-dated cheques. When the purchasers bought property off-plan and gave post-dated cheques, the purchasers have failed to honour these cheques, either because the developer has not progressed with construction, or due to financial constraints faced by the purchasers. The developer then files a complaint and in several instances, the purchasers have either left the country or are facing criminal prosecution, Lisa explained.

Tuesday, January 05, 2010

World's tallest building, Burj Khalifa, now open to public

Burj Khalifa to Public
The world's tallest building, standing tall at 828 meters in Dubai, has been named Burj Khalifa, by H.H. Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai. The building was known as Burj Dubai until yesterday.

When unveiling the nameplate, Shaikh Mohammed said "We built the high-rise for people with strong will and determination. The highest point in the world should be linked to big names and I announce today the opening of Burj Khalifa Bin Zayed."

The UAE has put a new spotlight on the world map today, he added.

Just after the opening, about eight skydivers appeared in the sky, carrying UAE flags and pictures, landing in front of Shaikh Mohammed.

The final height of the tower, which was a closely guarded secret until yesterday, was revealed during the spectacular ceremony. The public who gathered in the premises were thrilled by the breathtaking fireworks display that lip up the building to its full height.

The show was broadcast to millions across the world by several local and international media organizations. The opening of the tower also coincides with the fourth anniversary of accession of Shaikh Mohammed as Ruler of Dubai.

Future residents of Burj Khalifa were also among the invited guests to see their future home. An overwhelming sense of patriotism filled the Burj Park Island, as people stood in thousands to witness Dubai Fountains performing the national anthem.

The entire inauguration included a pre-show, and three themed acts - From the Desert Flower to Burj Dubai, Heart Beat, and From Dubai and the UAE to the World, a fireworks finale.

The Speaker of Federal National Council, Abdul Aziz Al Ghurair, said Burj Khalifa is another milestone in the development and progress, which transformed the emirate into world's fastest growing city and helped transform UAE into a leading regional and international nation.

A host of facilities makes Burj Khalifa, a must-visit attraction for all tourists to the Middle East. Apart from being the only tallest man-made structure ever-built, it is also, a true multi-purpose building, when compared to other super high-rises across the world.

Several other high-rises world-wide, such as the Petronas Towers at Kuala Lumpur, Taipei 101 or Willis Tower in Chicago, are all used only for business purposes, while the Burj Khalifa has it all. It includes residential apartments, hotel, offices and other public amenities.

The main attraction is the Observation Deck, called At The Top, on the 124th floor, at a height of 442 meters above ground-level, offering an indoor panorama floor, with special telescopes, and an outdoor area for real experience.

The deck can be reached by double-decker elevators, carrying 21 people at each deck, traveling at ear-popping speed of 10 meters per second.

The observatory is the highlight of any visit to the Middle East. The journey begins at the lower ground level of Dubai Mall, wherein visitors get to watch the multimedia presentation, before entering the elevator lobby at the concourse of Burj Khalifa.

The deck includes a boutique, offering merchandise items and souvenirs. The Deck will be the highest level that public visitors can reach in the tower. There are several sky lobbies too at the upper part of the building, meant for residents and office workers, which can also be used by guests as a meet-and-greet venue.

The sky lobbies includes fitness amenities, swimming pools, jacuzzi, recreation rooms, fine-dining restaurant, and The Club.

The Club gives priority to residents, but is also open to the public and includes pools, gymnasiums, with a dedicated ladies-only gym and spa facility.

The concourse level of the tower offers shopping amenities, and the Armani hotel lobbies and restaurants. In the residential lobby, the World Voices collection by artist Jaume Plensa can be viewed. There are also other art pieces from prominent international and Middle East artists on the display, which gives the true spirit of global harmony.

Just outside the Burj Khalifa, is a park spreading across eleven hectares of land, featuring outdoor spaces, greenery, leisure and dining, and play areas, the Dubai Fountain and other themed water experiences.

The public are given access to the park from 10am to 10pm, Sunday to Wednesday, and from Thursday to Saturday from 10am to 12pm. The tickets are priced at Dh.100 for adults, Dh.75 for kids less than 12yrs of age, and Dh.210 for urgent access.

Monday, January 04, 2010

Burj Dubai Tower, Burj Dubai Metro Station, to be unveiled together

Burj Dubai Metro Station
The Chairman of the Board and Executive Director of the Roads, Mattar al Tayer, announced that Burj Dubai tower opening will also coincide with the opening of Burj Dubai Metro Station.

The RTA will officially begin operation of the Burj Dubai Metro station from tomorrow, to mark the fourth anniversary of the accession of H.H. Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, as the Ruler of Dubai and opening of the world's tallest tower.

The Burj Dubai station is elevated with the concourse and platform, which is situated at a higher level than the elevated Metro track. The station is 132 meters in length and 29 meters in width, with the capacity to handle 11,000 passengers per hour, per direction, and has two entry points fitted with escalators and lifts.

The station is likely to be used by about 1000 passengers every day on weekdays and by about 19,000 passengers during weekends and holidays, Al Tayer said.

The Burj Dubai metro station will serve the main Downtown Burj Dubai district, spanning an area of 45mn square feet. It surrounds residential, commercial, and recreational units, including Burj Dubai, Dubai Mall, 9 hotels, 19 residential towers, 30,000 residential units, and a boulevard, spanning 3.5kms in length. Residents living on the other end of the Jumeirah 2 road will also have easy access to the station.

To feed the station, RTA has deployed 11 buses, operating on two routes. Six buses will operate on Route F13 at 10-minute interval, linking Burj Dubai station with Burj Dubai area, including the Dubai Mall, The Address hotels and The Palace, The Boulevard and other locations in the area.

The Route F16 has five buses operating at 10 minute intervals, linking Burj Dubai station, with Jumeirah 2. Buses begin at the station and pass across the Mazaya Center, Al Wasl and Al Uruba Road, before heading back to the Metro.

Friday, January 01, 2010

New legislation on property rent cap for 2010

The Vice President and Prime Minister of UAE, and Ruler of Dubai, H.H. Sheikh Mohammad Bin Rashid Al Maktoum, issued a legislation on property rent cap in 2010 to ensure the stability of property market in the emirate.

The decree aims to regulate the relationship between tenants and landlords and chart a legal framework for this matter.

Rent increase caps for 2010 will be set at the same rates as for 2009, as per the decree issued on rental cap in 2009. The decree endorsed the Real Estate Regulatory Authority (RERA) rent index as the main reference to determine the average rent on which the rental increases in 2010 will be decided.

Rental increases are permissible only if the property is more than 25 percent below the average index price. If the rent charged was 26 percent to 35 percent less than the average rent for similar property, the maximum increase shall be equivalent to 5 percent of rent value for the year 2009.

If the rent charged was 36 percent to 45 percent less than average rent for similar property, the maximum increase will be equivalent to 10 percent of rental value for the year 2009.

Similarly if the rent was 46 to 55 percent less than average rent for similar property, the maximum increase shall be equivalent to 15 percent of rent value for the year 2009.

If the rent was 56 percent to 55 percent less than the average rent for similar property, the maximum increase shall be equivalent to 20 percent of rent value for the year 2009.

The decree will get effective from the date of issuance, and will be published in the official gazette.