Thursday, March 31, 2011

Nakheel confirms implementation of its sukuk plan

“The maximum limit required by the Dubai-based master developer, Nakheel, to implement its re-structuring proposal is almost over. There are no more hiccups. Once the feedback of creditors is received, we will go ahead with the sukuk plan,” said Ali Rashed Lootah, the Nakheel Chairman.

As per the re-structuring plan of Nakheel, the trade creditors will be given repayment in the form of 40percent cash and 60percent in the form of Islamic Bond, Sukuk.

The developer, early this year, said that 91percent of its trade creditors have approved the deal. The deal aimed to reach a threshold limit of 95percent towards end of 2010.

Meanwhile, last week, Nakheel announced that the debt restructuring process too, will be complete by first half of 2011, and it will soon issue the restructuring deals, including a term sheet for an Islamic bond offering, to trade creditors who have signed its restructuring plan.

The total amount paid by the company to the trade creditor in January was Dh.3.9bn. Meanwhile, Dubai World, last week revealed that it has signed a final deal to restructure $24.9bn in debt to 80 creditors.

Tuesday, March 29, 2011

Dubai registers 114 projects under the Tayseer Programme

So far about 114 projects have been registered under the Tayseer Programme of Dubai Land Department (DLD). The first funding deal under the scheme is likely to be finalized shortly.

According to Majida Ali Rashed, the Senior Counsel Strategy, DLD, the second phase has begun with several projects having been approved under the Tayseer Programme. Discussions are now underway between the developer and the bank for funding under the scheme.

Tayseer is a sophisticated formula for funding, wherein banks are linked to real estate projects guaranteeing high feasibility. The programme is aimed to push property sector towards a new development strategy with the support and offering of financial ties based on specific criteria, she explained.

So far, seven banks have signed with DLD for financing under the Tayseer initiative. These banks are Abu Dhabi Islamic Bank, Emirates Islamic Bank, Noor Islamic Bank, Abu Dhabi Commercial Bank, Dubai Bank, Mashreq and Ajman Bank.

Tayseer was launched in June 2010, with 40 projects in Dubai Marina, Jumeirah Lake Towers and Business Bay approved in the initial phase. This initiative aimed to boost the liquidity in the market considerably and strengthen the confidence in Dubai property sector.

The programme accredits only those projects that are registered with the department, are less than 60percent complete, holds an escrow account, and are moving as per the construction schedule, under a competent contractor capable of timely delivery of the project.

The real estate buyers can also benefit from Tayseer, as the programme now enrolls banks that offer end-user financing for approved projects.

Tayseer was introduced to promote real estate investment, and ease lending in property sector. Banks have been given the right to choose between financial individuals and financing of projects. For few investors purchasing an approved project will help gain priority from the banks, although it is up to them to finalize the terms and conditions of the deal, Majida said.

Dubai Developer to sell 40 apartment units at construction cost

The developer of La Fontana di Trevi, a residential project in Arjan, Dubailand, has announced sale of 40 units of the development at construction cost, in order to settle the final payment and meet expenses pertaining to the delivery of the project.

The Chief Executive Officer of Triveni Builders and Promoters Limited, Ashok Galgotia, said about 40 units that have been taken back by the company from its defaulters, as the company needs to pay contractors and meet other expenses prior to handover, which requires another Dh.9mn to Dh.10mn. Despite the 20percent to be received at the time of handover from customers, more money is required to meet all expenses.

Galgottia mentioned that he will offer his 60-odd investors the first chance to purchase apartments at construction cost. Only if the investors turn down the offer, the units will be offloaded in the market.

Galgotia claimed that his project is one among the few “fast track” projects approved in Arjan community by Mizin, the master developer.

Wednesday, March 23, 2011

Dubai aims to complete 220 housing projects in 2011

The emirate of Dubai is moving ahead with its 220 residential projects in 2011, said Marwa bin Ghalita, Chief Executive of RERA (Real Estate Regulatory Agency).

Ghalita said that all the projects are being evaluated now, and any project that doesn’t seem good for investors will be stopped.

Although Ghalita did not mention the exact number of projects being cancelled, he said that RERA, in December, already cancelled 115 projects that remained off-plan.

The Director General of Dubai Land Department, Sultan Butti bin Mejrin, when speaking during a conference, said that real estate transactions worth Dh.123bn were signed last year.

The real estate sector in Dubai has bin badly hit by the downturn, with billion dollars worth projects being either suspended or cancelled, with real estate prices having declined by 60 percent.

Among these, the high-profile projects that Dubai has either put on hold or cancelled are Tiger Woods Residential and Golf Course project by Dubai Properties and the one-kilometer tall tower by Nakheel.

Sunday, March 20, 2011

Real GDP growth of 3% to 5% predicted in Dubai this year

The economy in Dubai is likely to grow 3 to 5 percent in actual terms this year, backed by the strong support of tourism, trade and other sectors, revealed a senior businessman in Dubai.

The Chairman of Dubai Chamber of Commerce and Industry, Abdul Rahman Al Ghurair, mentioned that the sharp downturn in the real estate sector of the emirate, following the global fiscal distress of 2008, brought down the inflation and increased the capital flow.

Further, given the positive growth rate recorded last year, coupled with excellent investment environment in Dubai at present, and the positive feedback from investors, Dubai is likely to record a real GDP growth of 3 to 5 percent this year.

Several factors, including better performance of trade, tourism and financial sectors have contributed in predicting the projected growth this year, which is more than 2.5percent of that recorded last year.

The figures for 2010 showed that exports and re-exports in Dubai surged 15.2percent, touching Dh.214.4bn from Dh.186.1bn in 2009. For the year 2011, the beginning was quite encouraging with exports and re-exports having jumped by 24.2percent, touching Dh.19.7bn in January. The figure grew by 8.3percent touching Dh.17.5bn in February (year-on-year comparison).

Even the services sector is one of the vital stimulants in Dubai economy. The sector has been performing well, recording annual growth of 16percent. The other sectors contributing to Dubai growth are tourism and financial services which has been solid and flexible in the recent past, and are likely to grow in near future.

Further, the investment environment will be strengthened with the opening of new hotels, completion of infrastructure projects, and strengthening of banking sector.

Meanwhile, the real estate sector has definitely instilled positivity in the emirate, as there were several commercial and residential units being supplied to the market, and consequently more companies and more people. With decline in value of properties, there has been depressed inflation, as the real estate and utilities sector constitute 36.1percent of consumer price index. The depressed inflation, in-turn, has led to attracting more capital into Dubai, while also boosting its competitiveness as global financial and business centre.

Tuesday, March 15, 2011

Nakheel allows swapping of plots in short-term projects

Nakheel has permitted the plot owners of its projects to swap plots in exchange of plots for short-term projects, with the plots being offered at market price.

According to a Nakheel spokesperson, owners in long-term projects, will however be offered only plots in short-term projects as exchange.

Few investors have expressed keenness in swapping their plots for completed or near completion properties, as the projects that they have purchased have been put on hold.

But this new option offered by Nakheel implies that plot owners cannot exchange their investments for completed or near completed properties such as villas and apartments at Discovery Gardens, and International City of Jumeirah Village.

Nakheel agreed that it has been offering a re-fund option, as a part of overall re-structuring plan by the company. Therefore, customers in long-term project are welcome to swap their funds into available inventory or choose consolidation of their funds. A long-term re-fund option is also open to them.

Earlier, Nakheel had offered consolidation option to investors in Palm Jebel Ali projects, offering them three alternatives – a credit note for money paid for a plot, exchanging it for a plot in Palm Jumeirah, The World, or Jumeirah Village, and a full re-imbursement on 31st December 2015.

Last year, Nakheel agreed that it will continue to offer customers in long-term projects, the option to receive credit equivalent to 100% of their installment payments, and exchange for projects nearing completion at current market value.

At present, Nakheel is in the process of completing short-term projects, phases or certain components of master developments, including Al Furjan, Jumeirah Park, Veneto, Jumeirah Heights, Jumeirah Village South, Badrah, Jumeirah Island, and Palm Jumeirah, where construction progressed considerably.

Monday, March 07, 2011

New housing supplies in Abu Dhabi unlikely to affect Dubai

According to industry experts, Dubai will only be marginally affected by the new housing units entering Abu Dhabi market. This is because, although about 21,000 new housing units are due for delivery this year in Abu Dhabi, a delay in handover of units are likely, and only half of the said housing units may be delivered eventually.

However, Dubai’s Marina may be impacted, partly due to the new units entering Abu Dhabi, and also as there are about 12000 units yet to be delivered in Marina.

According to Landmarks Properties CEO, Charles Neil, people living there may prefer to move to Abu Dhabi and/or other projects such as JLT where there is less congestion. Therefore, rents are likely to fall in Marina by next year or in 2013.

Even the Residential Leasing Consultant at Barsha Office of Better Homes, mentioned that although the Abu Dhabi realty market may get a breather, it may not bear an impact on Dubai property prices, nor would it prompt people working in Abu Dhabi and living in Dubai to consider re-location. But properties in Marina and Emirates Living Communities may compete for rental rates.

One of the main reasons is the lack of good residential units in Abu Dhabi, coupled with high demand that the city faces. The buildings in Abu Dhabi, particularly on island, is poor with little amenities, and parking being a major problem, points out the expert at Landmark Properties.

Meanwhile, the attractive rents and the good lifestyle that Dubai offers will continue to lure tenants and they may not think about re-location, say experts.

Moreover, experts predict that prices of housing units in the Capital are likely to be higher than those in Dubai for the time being. Although more stock would be available in Abu Dhabi, it cannot compete with prices being offered in Dubai atleast for some time soon. Moreover, the ‘lifestyle’ factor also counts.

However, for the 20percent who chose to move back to the Capital, rental rates will still not be able to compete with those in mature communities of Discovery Gardens and JLT, wherein a single bedroom apartment is available for Dh.35,000 to Dh.50,000 per annum, the Better Homes expert said.

Even when all planned units are finally delivered, a major reversal of people moving to Abu Dhabi is unlikely, as with rapid growth of Abu Dhabi economy, there will not be an oversupply of quality accommodation, and equilibrium is expected only by about 2014. Moreover, there are other factors also to be taken into account such as better quality of schools in Dubai, and families with single-earning members being able to survive better in Dubai, pointed out Neil.

Saturday, March 05, 2011

Work on Dynamic Tower likely to progress

The developers of Dubai's 80-storey self-rotating Dynamic Tower have expressed keenness to put the project back on track.

The Communication Manager at the Dynamic Architecture Group, Simona Casati, revealed that the Dynamic Tower in Dubai, which was on hold till date, owing to current situation, is likely to be back on track. Although the company has not yet secured funding for the project, the construction of the project will begin any time soon.

The design of the Dynamic Tower involves 80 pre-fabricated apartments that can spin independently, and take one to three hours to make a complete rotation. The 420mts tall building offers apartments that could spin a full 360 degrees on voice command, around a central column, with the help of power-generating wind turbines.

The first 20 storeys will be allocated for retail space, the next 15 for a hotel, and rest 35 storeys for residential apartments and the top 10 floors will have luxury villa-style apartments.

Dynamic Tower project is also in pipeline in few other countries too, including world's leading capitals, it is said.

According to New York architect, David Fisher, Dynamic Tower is the first building that rotates, moves, and changes shape. The building never looks the same even once in a lifetime, he adds.