Tuesday, November 29, 2011

Property valuators being pressurized to value properties at 'pre-crisis' levels

The real estate owners of both private and corporate properties are awaiting for the property valuation results of firms to match “pre-crash valuations.”

According to industry experts, owners of properties are of the belief that the real estate market has recovered considerably, and so, it is time to see whether the value of their holdings have gone back to what they were worth before onset of economic crisis in 2008.

The Managing Director – MENA, Chesterton International, Simon Gray, said that clients are emphasizing valuers to match their older pre-cash valuations carried out on their assets, as they feel that the market has made sufficient recovery this year.

Several larger companies possessing properties had earlier decided not to value their portfolios, as they were aware about the decline in rates since 2008. However, these companies are currently beginning to again compare values, as the market has shown improvement this year, Simon Gray said.

One of the major challenges faced by the industry in the UAE is the reduced prices quoted by small, unprofessional “valuation companies”, which employ agents who claim themselves to be valuers. They are not covered by any professional insurance, which implies that if anything happens, these companies just disappear, leaving the clients exposed to wrong values, Gray points out.

Gray also pointed out that lack of governmental regulations too, can hamper implementation of proper valuations.

The government authorities should maintain a database system, wherein all transactions can be accessed by valuation companies, and they should not compete with private companies on offering valuation services to clients, as it could prove to be a conflict of interest, Gray said.

Dubai has been working on a real estate valuation regulation, which aims to set guidelines for valuation companies. The law is still awaiting government approval for launch. A draft of this law has already been released by the Dubai Land Department. The valuers can adhere to these rules, although they have not yet been made mandatory.

Speaking about the property market in the UAE, Gray said that the market is now mature enough to be divided into areas of developments, rather than being a market as a whole.

Gray is of the opinion that both Dubai and Abu Dhabi markets should be viewed at differently. The prices in Abu Dhabi will continue to decline, with surplus supplies. In Dubai, however, prime areas such as Dubai Marina, Palm Jumeirah, Downtown and Emirates Living will enjoy stable price levels. However, secondary developments such as International City, Silicon Oasis, may suffer further reductions in the near future, provided, the entire region begins showing growth again.

Tuesday, November 22, 2011

New homes in Dubai realty sector may cause decline in prices and rentals

The government real estate data revealed that Dubai recorded less than 1700 real estate deals during the first ten months of 2011, which marks a 70percent decline on sales in the emirate's housing market, in comparison to its peak period during mid-2008.

The data from Dubai Land Department (DLD) showed that nearly 1603 deals with signed during the initial ten months, in comparison to 5,363 deals signed during the same period in 2008.

However, in comparison to the 2009 figures, when the financial crisis was at its peak, the figures reflect 37percent increase, which indicates sign of recovery of housing market in Dubai.

The average monthly real estate sales has increased to 160 from 117 in 2009, but is still quite far behind from the average of 536 property transactions recorded during a month in 2008.

According to Ryan Mahoney, the CEO of Better Homes, the largest real estate firm in Dubai, the market seemed extraordinary during 2005-08, and is now regular.

The CEO of Landmark Properties, Charles Neil, said that rise in sales is attributed to increase in bank lending and increased number of Chinese and Indian investors entering the market.

The real estate prices in Dubai soared when Dubai opened its property market to foreign investors in 2002, and granted them, rights to freehold ownership at several developments. During the period 2007-08, the prices grew 80 percent, with several billion dollars worth of new projects being launched.

However, the prices of houses in Dubai saw the biggest reversal owing to financial crisis, when it fell more than 60percent due to global economic crisis. Thereafter, recovery in housing prices was noticed in the third quarter, wherein, prime projects in Palm Jumeirah and Arabian Ranches saw slight increase.

However, analysts are still concerned, as at least 33,000 new homes will enter Dubai market by end of 2012, and they can cause fresh declines in sale and rentals. Further, renewed global financial woes, coupled with European sovereign debt crisis may be a cause of concern. The Moody’s had last month predicted that any price recovery may be unlikely until 2016.

Friday, November 18, 2011

Existing rent cap to continue in Abu Dhabi until 2012

Abu Dhabi has announced to extend the existing curb on price increases, which has compelled the landlords in the emirate to restrict annual rent hikes to less than five percent until 2012.

According to the Crown Prince of Abu Dhabi, Sheikh Mohammed bin Zayed, the rental cap will be extended to 9th November 2012, so as to bring about a stability in the tenancy market.

Rental increases if any, should be in the range zero to five percent, confirmed a statement from WAM, the state-run news agency.

Both Dubai and Abu Dhabi have introduced price caps, following the housing boom in the UAE, to tackle the issue of soaring rentals. Dubai was the first to introduced rental cap during 2005, capping hikes at 15percent.

The current regulation in Dubai and Abu Dhabi does not permit landlords to increase rentals by more than five percent for the entire duration of the tenant’s lease period.

Being a latecomer to Gulf real estate boom, and due to lack of supply, Abu Dhabi witnessed a modest decline in housing prices and rentals, in comparison to its neighbouring Dubai, during the onset of global economic crisis. However, majority of developers in Abu Dhabi have focused on delivering existing projects, which led to increased release of properties into the market.

Another 11,000 fresh homes are due to be delivered prior to the end of this year, the latest Jones Lang LaSalle (JLL) report said in its report last month.

JLL’s Head of Abu Dhabi office, David Dudely, commented “The market is taking a short-term hit for long-term benefits.”

Further, the oil-rich emirate had announced plans to distribute Dh.2.3bn in the form of housing loans to 1400 nationals in the emirate to help them build homes or renovate their properties.

The UAE had earlier said that Dh.7bn has been allocated from its 2011 budget for housing projects and home loans to nationals, apart from spending on infrastructure.

Thursday, November 17, 2011

Major up-turn noticed in Dubai hotel, property sectors

The vibrant hotel sector in Dubai is a major boost to the retail and residential sectors, as these sectors have begun to show signs of resilience amidst the regional unrest. This has reinforced Dubai's position as leading global destination for tourists and investors, revealed a recent report.

The unrest prevailing elsewhere in the region has actually made Dubai as much sought-after destination, with several tourists having re-scheduled their holidays to the UAE, due to volatility in other parts of the region, said the Jones Lang LaSalle (JLL) report.

Although the Dubai hotel sector has been immensely benefitted by the Arab Spring, the retail and residential sectors too, have received a boost over the past nine months.

According to Chief Executive of JLL, Alan Robertson, the current political and economic stability of the UAE will continue to bring in long-term benefits for Dubai real estate market.

However, for a more sustainable recovery, this up-turn will have to be converted into broader economic activity, so as to boost employment sector too, but there is not much happening yet, said Robertson.
According to Robertson, the Arab Spring has made a positive impact on the hotel, residential, and retail sectors of Dubai market. The hotel and retail sectors have been pushed into recovery stage, while the residential market is also improving. The Arab Spring led to stronger performance during first half of the year. But, these benefits may be limited by the fluctuating financial concerns emanating from US and Europe over the past few months.

The JLL report also pointed out that Dubai Airport is currently the fourth busiest airport in the world, reporting year-on-year arrivals of 9.5percent. Dubai hotels achieved an average occupancy rate of 78percent, driven by major increase in number of GCC nationals visiting Dubai. The retail sector also benefitted from the unrest in other parts of the region, as major malls in Dubai recorded increase in traffic and sales activity.

The residential sector too, saw increased demand, as those concerned about stability and security elsewhere in the region, turned towards Dubai. However, this is yet to translate into increased rentals or pricing of houses. The outlook for residential market in Dubai is mixed, with the sector approaching bottom of property cycle. Villas in upmarket locations are clearly performing better than apartments both in terms of sale prices and rentals.

The office sector has been least affected, and continues to be more tenant-favourable, with rentals and selling prices continuing to decline in several parts of Dubai throughout 2011.

Tuesday, November 15, 2011

Floating Islands likely to turn into reality in 'The World'

Investors of The World project, who have a water mass on their islands, now have an alternative option of obtaining a self-sustainable floating island.

The concept has been introduced by the Dutch Company, which is responsible for construction of Nakheel's Floating Proverb, which spreads across 89 floating islands surround Palm Jebel Ali. The project spreads across a surface area of 220,000 square meters and spells out an Arabic poem when read from the air.

According to Paul van de Camp, Chief Executive Officer, Dutch Dockland, talks are being held with some private investors about launching a floating island on The World.

Several investors, who purchased an island on The World, got water mass. Heavy investments would be required to make these islands ready for construction. Therefore, if they were offered a self-supportable floating island, which could be built by combining an already existing landmass, they could be made more feasible.

With all the necessary equipments within the island, it becomes totally self-sustainable, and the owners do not have to look for an outside help on getting any infrastructure readied.

Dutch Docklands has the reputation for producing zero footprint floating projects, and numerous other concepts, including building a floating Olympic Village and a stadium.

Plans are also underway to introduce this concept to the Qatari government, hoping to turn it into reality. As Qatar will be hosting the World Cup and is bidding for the Olympics, they will require the necessary infrastructure and stadiums. Docklands is of the opinion that Qatar can consider building a floating stadium or even a whole village.

Last year, the Dutch Dockland entered into a joint venture with government of Maldives to develop several floating amenities, including a 18-hole golf course, private villas and a hotel.

Friday, November 11, 2011

Nearly 300 villas to be ready in Jumeirah Golf Estate by December 2012

The luxury golf community, Jumeirah Golf Estate will see the completion of infrastructure works, dedicated power substation and more than 300 villas before next year-end.

Work has begun on the 132KV power substation, which will be ready by next year, with Alstom, a French conglomerate being the contractor for construction, testing and commissioning the substation. The substation is currently 64percent complete, revealed a Nakheel spokesperson.

The company also hopes to complete 160 villas in Whispering Pines in November 2012, while 99 villas and 47 mansions in the Flame Tree Ridge and Fireside respectively, are likely to be ready by December 2012.

The ETA-Ascon-Star Group Company, Ascon Road Construction, has begun working on the main infrastructure, completing works associated with district road, main ring road, district roads and underground utilities such as irrigation, water and sewage systems. The main infrastructure works are almost 57percent complete, with more progress likely in the coming months.

Electrical works are likely to begin this quarter. A UK-based private construction solutions provider, Laing O’Rourke, will deliver all 160 villas in the Whispering Pines district, a community of three and four bedroom villas in Tuscan style. The infrastructure works are making good progress too.

According to Nakheel spokesman, the project is almost 43 percent complete, and will be completed by November 2012.

Meanwhile, the Dubai-based Al Nekhreh Contracting has begun working on the Flame Tree Ridge and Fireside districts, with 99 villas on Flame Tree Ridge and 47 Mansions on Fireside to be ready by December 2012. At present, Flame Tree Ridge is 46percent complete and Fireside is 55percent complete.

The Flame Tree Ridge comprises five-bedroom villas located between Fire and Earth courses, and offers wonderful views of both. The vibrant Flame Tree is known for its great orange-red flowers.

Designed by Greg Norman, Fireside is considered as most prestigious among all its developments. It comprises 66 five and six bedroom houses, built around tranquil gardens and tiered fountains.

Nakheel, during the month of June, confirmed that the Dubai government will offer funding for completion of development, covering an area of 1119 hectares. But, work has been suspended on Water and Wind, of the four courses in 2009.

Tuesday, November 08, 2011

Homes in Dubai more affordable than in Abu Dhabi

The rents in Dubai have fallen as much as 11percent, while Abu Dhabi has noticed rentals falling by six percent during the third quarter, said the Q3 property report by Asteco.

The cheapest single bedroom flats worth Dh.30,000 to Dh.40,000 were found in Khalifa Cities A and B and Mohammad Bin Zayed (MBZ) city in Mussafah, Abu Dhabi, although they were of low-quality comparatively.
In prime properties, even the cheapest single bedroom flats may cost Dh.40,000 to Dh.50000. But, such properties falling in this range, are also available in Khalifa A and B.

However, properties in Dubai are most affordable, as rents in Dubai are cheaper than in Abu Dhabi, says Vineet Kumar, Head of Business Development, Asteco Property Management in Dubai.

For instance, a single bedroom flat in a new building centrally located in an established area in the capital may be rented for Dh.90,000 to Dh.100,000 per annum, while the same property in Dubai will be rented for Dh.70,000 to Dh.75,000, he pointed out.

However, according to the Asteco report, Abu Dhabi has already shown signs of stabilization. Rentals in Abu Dhabi registered six percent decrease on an average during the third quarter, which is smaller than 8percent and 9percent declines recorded during previous two quarters.

Several units have been delivered to the market, and this may have a downward effect on rentals. The most significant among these is the Al Zeina project at Al Raha Beach with 952 apartments,124 villas, 26 penthouses and 119 townhouses, the report said.

Sunday, November 06, 2011

Dubai's Rolex Tower bags Overall Project of the Year 2011 award

The 235m tall Rolex Tower in Dubai, has been named "Overall Project of the Year", during the Middle East Architect Awards 2011.

Designed by SOM (Skidmore, Owings & Merrill), the Rolex Tower is owned and managed by Seddiqi and Sons Investment, the real estate arm of the leading UAE timepiece retailer Ahmed Seddiqi & Sons.
The Rolex Tower is the result of a 50-year partnership between Rolex and Ahmed Seddiqi & Sons, a spectacular glass-fronted symbol of timeless elegance, precision and quality.

The 62-storey mixed-use Rolex Tower in Dubai is one of the next-generation high rises located along Sheikh Zayed Road in Dubai. The tower has a total structural height of 235m, with residential and office facades, and was unveiled on 7th November 2010.

Among the major features of the building are light wells and slots in the facade, panoramic penthouses located along the roof floors, and high performance fritted glazing on the tower facades.

The Consulting Partner at SOM, George Efstathiou, who received the award, said that this award is indicative of the quality design work that comes from SOM. Dubai has been the second home for SOM over the past eight years. Rolex is synonymous with timelessness, and the Rolex Tower is a timeless building.
The judges hailed the tower as an excellent elegant addition to the Sheikh Zahed Road skyline in Dubai, amongst several other flamboyant towers.

SOM was awarded in the same category last year for its Burj Khalifa project. Among the other projects that were shortlisted for this category were Al Manara Project by TNQ Architects & Engineers, Al Shaqab in Qatar by Leigh & Orange Qatar, and the Masdar Institute of Science and Technology, Abu Dhabi.
SOM’s Efstathiou also won the prize for ‘Architect of the Year 2011’.

Saturday, November 05, 2011

Furnished R-Serviced offices available at Business Bay's Crystal Towers

The UAE master developer, REEF Real Estate Investments has launched R-Serviced offices in Crystal Towers in Business Bay. These R-services offices are ready-to-use offices and are ideal for small and medium sized enterprises (SMEs).

These offices house the world's leading oil and gas corporations and blue chip entities of the world, including OMV, Lukoil, and Weatherford’s.

The Managing Director of Reef Real Estate Investments and Chairman of R-Serviced Offices, Shaikh Ahmad Mohammad Zayed Saqer Al Nahyan, said that few commercial addresses are more prestigious than Crystal Towers, and he expressed optimism over these new additions to the portfolio of Middle East.
The Chief Executive of R-Offices, Ian Llyod, said that it is all about working smarter through leveraged office space designs that focus on latest innovations, while also serving the needs of corporate world.

The international business community responded well to the first location of Reef Tower in the DMCC Free Zone, and the same positive reaction is expected in Business Bay too, he said.

R-Offices were first launched in August 2009 with just a single storey of serviced office space. Now, this spans across 13 floors. But, with tenants constantly competing for space, rents may be tempered owing to recession, and the incentives for tenants may recede significantly.

Just as is the case with all R-Serviced Office suites, each office at Crystal Towers is fully furnished at competitive monthly rate. The offices can be rented on short-term or long-term basis with flexible leasing terms and pricing.

According to Shaikh Ahmed, several of the new supplies have been already absorbed without any major impact on leasing rates. The future office supply in Dubai will be less than 30 percent of that anticipated from 2011 to 2013, owing to governmental initiatives to control oversupply.

Dubai witnessed addition of at least 15 million square feet of office space in 2010, which led to total of 48mn square feet of office space in Dubai. An additional 12mn square feet of commercial space was projected for 2011, taking the total vacancy levels to nearly 40 percent. However, despite the new supply, the market showed considerable resilience.

Friday, November 04, 2011

Value of completed buildings in Dubai hits an all-time quarterly high

The value of completed buildings in Dubai surged by more than 220percent, during the third quarter this year, touching an all-time quarterly high, according to statistics by the Dubai Municipality.

The statistics were published in the Dubai Statistics Centre website, which said that the values increased by more than 220 percent, touching Dh.14.07bn, in comparison to the previous quarter this year, when the value of completed buildings were just Dh.4.4bn.

Moreover, this value is more than double the value of buildings during the same quarter in 2010, the statistics revealed. Therefore, this marks an all-time quarterly high for value of completed buildings since the year 2005, as per Dubai Municipality data.

The surge in values of completed buildings may be largely due to the huge surge in value of industrial buildings, and sure in values of public amenities completed during the quarter.

This increase in activity is a reason to celebrate for the industrial property market in Dubai, says Cluttons, the real estate specialists in their latest Dubai property market update.

Moreover, during the third quarter this year, there has been increased demand from international light industrial and logistics occupiers who entered the market seeking better quality units, said Cluttons, the real estate specialists in their latest Dubai Property Market Update.

Meanwhile, the number of completed buildings in Dubai, grew by more than 15percent, touching a total of 736 from 638, quarter-on-quarter. However, it was 17percent lower than the number of completed buildings during the same quarter last year.

The last time when the value of completed buildings in Dubai hit a low, was during the fourth quarter of 2009, when 614 buildings worth Dh.4.32bn were completed. Thereafter, the value of completed buildings has always seen marked improvement.

While last year Dh.30.8bn worth of buildings were completed during the first three quarters, this year, at least Dh.24bn  worth of buildings have been completed as per data.

Cluttons revealed that a steady demand has been witnessed for high quality residential buildings in the Emirates Living, Marina, Downtown, Jumeirah, and Arabian Ranches. There is also demand for high quality office space in Dubai, especially from large space users seeking to consolidate from an old obsolete space spread around the city, to a modern, efficient office space. This trend is likely to continue, said Cluttons.

Thursday, November 03, 2011

Tameer announces completion of Elite Residence project

Tameer Holding Investment, the leading real estate developer in the Middle East, announced that its 91-storey Elite Residence project in Dubai has touched the final height of 381 metres.

The developer has just completed the roof structure and mast of the Dh.1.7bn tower. On completion of this milestone, and with all plant and equipments in place, the tower crane has been removed now. The team is currently working on the internal finishing, as the project goes through its final stages.

The President of Tameer, Federico Tauber, mentioned that given the central location of the project, and its vicinity to several prestigious landmarks including the Dubai Internet City, Dubai Marina, Knowledge Village, Media City, Jebel Ali Free Zone, and Media City, and its access to transport routes through road, metro and Al Sofouh tram, the Elite Residence will soon be one of the most sought-after addresses.

Given the unique design which combines classic architecture with modern layout and stylish finishing, the 91-storey Elite Residence tower offers all major amenities, including sports and recreation facilities, fully-equipped gymnasium, sauna and steam rooms, indoor and outdoor swimming pools, multi-function rooms, and children play areas.

The project offers a range of spacious single and double bedroom apartments, three and four bedroom penthouses, and a total of 697 apartments, all of which, will together make home for around 1500 residents.