Tuesday, June 29, 2010

Dubai property sector records growth in transactions

The real estate market in Dubai has recorded growth in number of transactions, in comparison to the same period last year, the Dubai Land Department report said.

The first five months of the year registered 3,642 land sales, worth a total of Dh.25bn. The sales comprised a total area of 62,815 square feet, the department said.

The website Reidin.com said that there were 4,961 residential sales transactions in 2009. The Land Department figures also revealed that during the first five months of the year, 3750 mortgages were registered worth Dh.32bn.

The Assistant Director-General of the department, Mohammad Sultan Thani said that although the value is lesser, there are several transactions on a daily basis, compared to last year. The sale of residential properties figured 3,169 from January until May this year, with 10 percent or more of these transactions mortgaged. Apartments represented 2,927 of these transactions, of which, about 10percent were mortgaged.

There are more transactions than last year, with the numbers showing a bottoming out of the market, and a flat trend.

Real estate industry experts said that while the transactions may be higher, the prices were not. The average price in 2009 was Dh.870.4 per square foot, while for this year it is Dh.816. According to CEO of reidin.com, Ahmet Kayhan, the prices at present have gone back to the levels of third quarter of 2007, with villas leading those of apartments.

The occupier owners now prefer villas over apartments, and the fact that villas are pulling ahead of apartments is a healthy sign. They are expecting to make money, selling whole buildings, but, are focusing on sale and purchase of affordable smaller apartments.

The residents in Dubai are also taking advantage of the falling rentals, property experts mentioned.

The June leasing guide by Landmark Advisory said that rents had dropped in lower and better quality apartments.

The Director of Research at Landmark Advisory, Jesse Downs, said that tenants are seeking more value for their rental dirham and are able to arrive at alternative options to negotiate attractive deals. This is a trend now, mostly seen in high quality units in prestigious locations.

Thursday, June 24, 2010

Dubai to host world's first real estate exchange regional branch

The regional branch of the world's first specialized real estate exchange is all set to be housed in Dubai, and will be operated by the Irex Group of Canada.

The Group yesterday announced plans to launch its first group of exchanges - Irex Europe/MENA and Irex Canada in 2012. The company is seeking authorization to establish an operating branch in Dubai to service issuers and manage listings in the MENA region. It also aims to operate an Irex exchange in London on obtaining approval of the FSA (Financial Services Authority).

The company will create and operate a regulated securities marketplace for listing and trading of real estate assets in major financial centers across the world.
The exchange will list securities of real estate projects that are approved and licensed by government authorities.

Irex Europe/Mena will have its headquarters in London, and branch offices in various EU member states and the MENA region. Irex Canada will be headquartered in Vancouver, British Columbia.

"The development of a real estate exchange took 10 years and at present we are in the process of establishing this exchange on the ground," said Safar Al Harthi, Executive Chairman, Irex Group.

He continued that Dubai is the preferred location for the regional branch in the real estate exchange, given its infrastructure and regulatory framework that supports the launch of the exchange.

Although, no final decision has been taken in this regard, there have been invitations from three GCC states to host the regional exchange. But, Dubai was the first to invite and is the preferred location, and therefore, it is our first priority, he said.

The real estate exchange will be dedicated for trading in asset-backed securities of the real estate sector only, and this will be unique across the world.

The exchange will create a wide variety of financial instruments to securities real estate assets such as RPI units (Real Property Investment Units), Reits (Real Estate Investment Trusts), common shares, trust structures and debt securities.

The developers can access liquidity through securitizing their projects in the exchange. They can overcome their current shortage of liquidity due to financial crisis, and this will help them in continuing their operations, he said.

Falling rental values in Dubai lead to high demand for villas

With the declining rental values, villas in Dubai are much in demand from potential tenants now.
The Managing Director at Harbour Real Estate, Mohanad Alwadiya, said that villa rentals seem attractive at the moment. But, with more villas likely to enter the market, rentals are likely to decline, although at a slow pace.

Harbour Real Estate said that an estimated 3500 to 4000 villas are likely to enter Dubai by the year-end. This could lead to 10 percent drop in villa rents. But villas are strong assets for Dubai, and the demands for villas are always likely to be higher than apartments.

The Manager - Residential Sales & Leasing at Better Homes, Kosta Giannopoulos, said that it is difficult to actually quantify by how much villa rentals are likely to decline, but due to rise in supply with the handover of more projects such as the Jumeirah Village, Lavan, Shorooq, The Villa, Cedre Villas etc., the stagnation of demand, there is likely to be constant downward pressure on rents.

In Dubai's Mirdiff area, a four bedroom villa with an area of 3000 square feet is being rented out for about Dh.120,000 per annum. Rentals for a four bedroom in Dubai are Dh.136,000 per annum for a 4,101 square feet space in Dubailand and Dh.150,000 per annum for 5,600 square feet at Umm Suqeim.

With more villa projects entering Dubai, it is likely that prices will continue to decline at a slow pace. For instance, the Mirdiff villas recorded a 15 to 20 percent decline in recent times, mainly due to handover of the Shorooq Villas, Alwadiya said.

Alwadiya said that in Mirdiff, rentals for four bedrooms range between Dh.115,000 per annum and Dh.180,000 per annum, while five bedrooms range between Dh.130,000 per annum and Dh.210,000 per annum. A triple bedroom villa in Mirdiff area with 1590 square feet space currently attracts a rental of Dh.80,000 per annum.

The villa rentals are in the range of Dh.120,000 to Dh.150,000 per annum for a double bedroom villa at Al Warqaa, Dh.140,000 to Dh.180,000 for triple bedroom villa rental and in Springs triple bedroom rentals are in the range of Dh.110,000 per annum to Dh.175,000 per annum.

Monday, June 21, 2010

DIFC rentals stagnant during the last quarter

There has been no rental decline in DIFC (Dubai International Financial Center) during the past three months, which is an indication of the office rental scenario in Dubai, said a recent study report by CBRE.

The DIFC rents declined 11.1percent last year, in contrast to steep decline of 29.2 percent in rentals witnessed in other cities such as Moscow, during the same period.

Ireland, France and Poland also witnessed considerable decline in office rentals during the past year at 30.4percent, 16.7 percent and 17.9 percent respectively.

Meanwhile, with increase in supplies, tenants in Dubai are expecting landlords to offer better incentives. Abu Dhabi too witnessed continued occupier interest during the first quarter this year, and the market seems ready to offer incentives. Moreover, rents dropped during the first quarter due to few poor quality stocks.

The report said that with about 400,000 square meters of new Grade A office space being delivered in 2011, landlords of vacant Grade B buildings are in tenants favour. Following an initially bullish outlook for 2010 from landlords, landlords of vacant Grade B buildings are cutting rents more aggressively to secure tenants before this influx of new buildings.

Thursday, June 17, 2010

Aldar to launch of Dh 40bn entertainment project at Yas Island

Aldar Properties has announced the launch of a Dh.40bn water park on the Yas Island, its major leisure and entertainment destination project.

The park, spreading 16.4hectares will feature 40 rides and attractions, with four rides that have never been seen before in a water park.

Conceptual planning approval for the project has been granted by Abu Dhabi Urban Planning Council, which has appointed UK-based Atkins as lead designer of the project.

The company has initiated the pre-qualification process for the main contractors of the project, and construction will begin next month. This is scheduled for delivery in 2012, the release said.

The water park is a part of world-class recreational attractions at Yas Island, and in the likes of Ferrari World Abu Dhabi, the first theme park in the world, and the largest attraction of its kind, due to be opened on 8th October.

Yas Island houses Yas Marina Circuit, the venue of Formula 1 Etihad Airways Abu Dhabi Grand Prix, and Yas Links, the region’s first true links golf course. It also includes seven hotels, including the Yas Hotel.

Aldar aims to make this facility, one of the most environment-friendly and sustainable water parks in the world. Atkins is designing the buildings, so as to make it on par with Estidama guidelines, and is chalking out ways to reduce energy and water consumption considerably.

The facility will offer a unique entertainment opportunity for people of all ages, enabling families and individuals alike to indulge in a thrilling experience that reflects our rich maritime culture.

Wednesday, June 16, 2010

Lease guide for Dubai as released by Landmark Advisory

One of the leading real estate consultancy companies in the region, Landmark Advisory, has released its June lease guide for Dubai. The guide combines transactional data with mystery shopping and broker surveys and are prepared by analysts at Landmark Advisory.

The Dubai lease guide published in 2010 indicates that lease rates have fallen for both residential and commercial units across Dubai, irrespective of the quality and location. Although the lower quality units in not so well-known areas are experiencing strongest decline, more significant trend is the continued rent decline for quality units in prestigious locations. The decline is largely due to increased supply, a trend, which would continue as 100,000 new units are expected to hit the market during next two years.

"Tenants are seeking better value for their rental dirham and are trying to leverage alternate options to negotiate good deals. This in turn, is compelling landlords to settle for lesser rents", says Jesse Downs, Director of Research & Advisory Services.

Rentals in Dubai has been strengthened by tenants relocating from neighbouring emirates such as Abu Dhabi, with landlords in Dubai benefiting from tenants moving into Dubai to take advantage of lifestyle and lower rental rates.

Ms. Downs pointed out that the imminent delivery of Marina Square in Abu Dhabi will prompt potential commuters to rent an apartment in Abu Dhabi, which will no-doubt hurt rental demand in Dubai. Moreover, rents in Abu Dhabi are also declining and will continue that way, particularly until first quarter of 2011.

Residential rents in prestigious locations in Dubai are declining. Lower limits for a single bedroom on the Palm Jumeirah have dropped by 6%, while single bedroom apartments in JLT have fallen further 10% since publishing previous lease guide.

In lower quality areas such as International City, lower limits have dropped 12%, while upper limits for both studios and single bedroom apartments have decreased by 22% on an average. Even well-established localities with limited supply pipeline are also experiencing rent declines.
At the commercial front, rents have declined, and are likely to decline further, Landmark Advisory said. Landlords are attracting new tenants by offering low lease rates, long-term leases, and high incentives in the form of rent-free periods or increased cheque options.

According to Downs, location and incentives are set to play a major role in drawing tenants going forward. The commercial market is witnessing prolonged oversupply period, and with new developments in Business Bay and JLT, it is expected for completion in 2010 and beyond.

Monday, June 14, 2010

Dubai economic growth to rebound in 2010

Dubai's economic growth will rebound this year, with trade, transport, finance, manufacturing and government services will be the major contributors, while real estate, construction, domestic services and mining will remain in the negative territory.

Dr. Elsa Abdelgalil, the Senior Manager, Dubai Chamber Economic Research Department, when speaking during a seminar, said that utilities, social and personal service sectors are also likely to help growth, although to a lesser extend.

On the whole, the emirate will rebound this year. The real GDP in Dubai has been growing at 12.18percent on an average from 2001 to 2008. Only in the year 2009, had Dubai experienced a decline of 2.5percent. Therefore, the years 2010 and thereafter has to be positive, he said.

The post-economic crisis era is likely to bring about fundamental and structural changes, which would lead to creation of new business environment, said Hamad Buamim, Director-General, Dubai Chamber of Commerce.

Al Mazaya commences handover of The Villa units

Al Mazaya Holding has begun handover of 104 villas which constitute the Phase One of its The Villa project in Dubai.

Located in Dubailand, along the Emirates Road, The Villa offers 520 modern residential villas, the first phase of which is, already complete. The construction and development of the Phase Two villas comprising 110 units, and 306 units in phase three are 70 percent complete.

The Senior Vice President at Mazaya Project Management, Dubai, Fathi Damiri, said that the work on The Villa mainly took place during the financial crunch, which had a major impact on property markets across the world.

The villa, being a family-oriented project, and away from the noise and buzz of the city, is designed in a modern style which allows harmonious community, wherein each family can maintain their privacy.

Tuesday, June 08, 2010

Dubai property prices re-bound 12 percent

Property prices in Dubai have re-bounded 12 percent after January when the market had a second trough, paring most losses, following the standstill announcement in November 2009, HC Securities have announced.

Rentals have stabilized after the 4 percent fall in April, but will increase 2 percent in May, with the yield hovering around 6 percent since the start of the year.

The number of transactions too, increased by 1944 units in April, and 2073 in May from 926 units in January.

Although oversupply continues to be the biggest concern, there has been a further slowdown in construction in the existing sites. Also, the development of raw land has been restricted. Moreover, the anecdotal evidence suggests that the job market is growing again, HC Securities reported.

Nakheel resumes stalled projects, disburses contractor payments

Nakheel, the property arm of Dubai World, has begun paying away contractors who owed less than Dh.500,000 and will resume work on short-term projects within weeks, a Nakheel spokesperson has announced.

Nakheel has begun to pay claims by contractors that carry a value less than Dh.500,000, the spokesperson confirmed, although he did not reveal a total value or the number of claims under Dh.500,000.

Construction will begin on all short-term projects that were delayed to restructure the company, and the work will resume in weeks, the spokesperson has confirmed.

Friday, June 04, 2010

Second phase of Cedre Villas project ready

The region's integrated free zone technology park, Dubai Silicon Oasis (DSO), has confirmed delivery of second phase of its Cedre Villas project, comprising exclusive spacious villas.

The second phase of the 1,047 unit project includes 647 units that are ready to be occupied with water and electricity connections, the DSO revealed in its statement.

Following the highly successful first phase of the development, launched in October 2009, which included 400 villas, which were completely sold out, DSO has now included 647 villas, making a total of 1,047 units.

Located within the 7.2sq km integrated high-technology free zone, the villas offer executive townhouse and twin villas with three to five bedrooms. The villas are available in three architectural models and are offered at competitive rates.

The second phase has already received 30percent booking, revealed one of the top officials of the company.

Located within the gated community of Dubai Silicon Oasis on Emirates Road, the development offers a community centre with exclusive club house, a shopping complex, swimming pools, health and leisure facilities, schools and academies, play areas, clinic and other lifestyle necessities. These facilities are likely to be ready by August this year.

The Cedre Villas project is a combination of office towers, research and development and industrial zones, educational institutions, hotels, villas, healthcare facilities and a range of lifestyle options aimed at creating a dynamic commercial and social environment.

Thursday, June 03, 2010

Tameer's Elite Residence on schedule

Construction work on the Dh.1.7bn Elite Residence project at Dubai Marina is on schedule, and the cladding work will begin shortly, revealed Tameer Holding Investment, the developer.

The 91-storey Elite Residence Tower, is uniquely designed and is a true blend of classic architecture with modern layout and stylish finishes. The cladding work will be carried out by Cladtech International, a leading UAE-based cladding contractor.

On its completion in 2011, the new landmark development will stand 380 metres tall and will grow to be one of the world's tallest residential towers and housing 1500 residents.

The tower comprises four basements, three swimming pools, two gymnasiums, a luxury reception, a children's play area, a 24-hour security and a prayer area. The project offers a total of 696 apartments with a mix of spacious single and double bedroom apartments, and spacious three and four bedroom penthouses.

Being ideally located at Dubai Marina, Elite Residence is just minutes away from Dubai Marina Mall, Mall of Emirate, Dubai Media City, Dubai Internet City and Jebel Ali.

Moreover, the tower is easily accessible from the Dubai Metro Red Line, and is just walking distance from The Walk at Jumeirah Beach Residence, with plenty of hotels, restaurants and boutique shops, an open beach and water sports facilities.