Monday, December 17, 2012

Dubai to release new Real Estate Investor Protection Law by early 2013

The Real Estate Investor Protection Law will be released during the first quarter of 2013 in Dubai, a senior Dubai Land Department (DLD) official has confirmed.

The Senior Consultant and Director of Planning & Organizational Development at DLD, Majida Ali Rashid, said that the department received several suggestions from the public and subsequent changes have been incorporated in the law. It will be released within next three months.

The draft was released in June, seeking suggestions from industry participants. The draft law permits investors to get complete refund if the developer fails to complete or handover the property within stipulated timeframe, or if the developer deliberately defrauds, or alters the specifications of the unit without obtaining the necessary permits.

The investors can also claim compensation in cases of breach of any warranty or undertaking contained in the contract for sale by broker and the seller, or for misrepresentation by the developer or investor or broker, and in cases of specifications in violations of the contract for sale, after obtaining an expert’s report to that effect.

Hadef & Partners in its 2012 report on the legal state of Dubai real estate market report, which was released last week, said that only 28 percent of the 8500 respondents are aware of the proposed law, and 56% are unfamiliar about its contents.

Sunday, December 16, 2012

Signature villa on Dubai Palm Jumeirah, up for auction on 19th December

A six-bed Signature Villa along the Palm Jumeirah will be open to public auction, along with the 11 other freehold properties that are up for auction this year.

The base price of the villa, spanning 1243.78 square metre villa is Dh.19mn. The auction will be held on 19th December.

According to real estate agents, the prices for similar villas are in the range of Dh.22 to Dh.25 million at present. The property prices, particularly of the villas on the man-made island, have gone up considerably this year.

Leading global real estate consultancy, CB Richard Ellis, said that Garden Villas prices have grown by 22 percent in the past one year.

The other real estate properties being auctioned on the same day are 101.1 sqm apartment in Bahar 01 building at Dubai Marina (JBR) for Dh.850,000, 151.91 sqm apartment in Shams 04 at Dubai Marina (JBR) for Dh.1.3mn, 192.88 sqm apartment in The Zen Tower at Dubai Marina for Dh.1.76mn, 101.7 sqm apartment in Al Dhafrah 3 at Al Thannyah Third for Dh.1mn and 76.74 sqm apartment in Reehan 1 at Al Thannyah Third for Dh.700,000. On 26th December, five of these properties will go under the hammer.
The recovery in market sentiment has led to increased sales this year, with DLD having said that real estate sales have touched Dh.83bn over the first nine months of 2012.

The Section Head, Auctions Section at DLD, Humaid Omran Al Shamsi, said that the department plans to auction 80 properties in 2012. Already the department has auctioned 35 freehold and non-freehold properties in 2011, of which, nine were unsold, said Jones Lang LaSalle (JLL), in its latest report this year.

The Residential market in Dubai continues to see high levels of sales activity and the prime market is considered to have bottomed out. The rentals have begun to recover, with uplifts noticed in seven percent for villas, and five percent for apartments, year-on-year, the global consultancy said.

Friday, December 14, 2012

Jumeirah Island villa plots sold out: Nakheel

Leading Dubai-based master developer, Nakheel, has announced that it sold all villa plots in Jumeirah Islands for more than Dh.55.4mn.

The plots were snapped up at a company auction for Dh.513 per square feet, marking a 46 percent premium over their bid price of Dh.350.

The sales indicate renewed investor confidence in Dubai real estate market. The developer already sold two land plots on Palm Jumeirah for a total of Dh.419mn and 122 residential villa plots in Jumeirah Village Circle for Dh.113mn earlier.

Nakheel will begin sales of 90 villas at Jumeirah Village Circle on 13th December.The four bedroom villas spanning 3,700 square feet have been priced for less than Dh.3mn.

Earlier this week CB Richard Ellis said that selling prices in Palm Jumeirah has grown 16 percent year-on-year, with highest increase of 22 percent, being noticed for Garden Villas on the Palm Jumeirah.

The prices of Signature and Garden Home Villas on the Palm Jumeirah have grown, registering average increase of 11 to 25 percent during first half of 2012, in comparison to same period last year.

Wednesday, December 12, 2012

First phase of Al Zorah project to be ready by 2014

Ajman is likely to launch a new five-star luxury resort theme park, pedestrian walkway and beach club by summer of 2015. These form the components of first phase of multi-billion-dirham Al Zorah project, which was re-launched in December 2011.

The five-star hotel will be designed by Italian architect Piero Lissoni, in collaboration with NORR Group, while Belgian architect, Jean Michel Gathy from Dennisston will design the 230 rooms in the resort, Al Zorah Development Company said.

Al Zorah is a joint-venture between Ajman government and DIFC-registered Solidere International.
About eight UAE construction companies will submit their bids on 17th January 2013, the company said.

Spanning an area of 100,000 square metres, the resort will have 154 individual rooms, private suites, and villas, apart from four restaurants and a spa. Contracts have already been awarded for infrastructure works.
Further, the road linking work, linking the project with Emirates Road has been completed. The project is only 15 minutes away from the Sharjah International Airport, and 25 minutes from Dubai International Airport.

The first phase of the project will include “Mangrove of the World Theme Park”, offering visitors an interactive experience with environment and marine nature and activities.

Further, there will be apartments and villas, Board Walk, pedestrian walkway stretching more than 300 metres surrounded by restaurants, cafes and shops all the way to waterfront tourist marina area and beach club. Among the other amenities will be the spa, swimming pools, golf course, clubhouse, amusement and entertainment centres.

Originally master-planned as “coastal city” in late 2007, the Al Zorah project was worth Dh.220bn, but, land size was reduced by half post re-launch in December 2011.

As per the new master plan released by the company, the project is said to have five districts – City Centre comprising hotels, retail centres, offices, marinas and public square; Parkland Resorts comprising six beachfront hotels, creek side residences, sandy beach, and lagoon frontage; Golf Course comprising 18-hole championship course; Gateway – the high-rise mixed-use community, and Corniche Village comprising townhouses and villas overlooking the sea.

The first phase of the project comprises four hotels with 700 rooms, with Dh.1.2bn contracts already issued. The first phase is likely to be completed by 2014, Al Zorah Development Company said.

Tuesday, December 11, 2012

Emaar launches maiden project in multi-billion dollar MBR City

Emaar Properties, leading Dubai developer, launched their first project in the recently planned multi-billion dollar flagship development yesterday, a complex comprising luxury residences and a golf course.

The Dubai Hills, form a part of Mohammed bin Rashid (MBR) City, the mega-tourism and retail development project, announced by the emirate in last month.

The villas in the project will be built on plots ranging from 20,000 to 30,000 square feet, designed around a new 18-hole championship course, to be developed by world golf course experts.

Unveiled by HH Sheikh Mohammed Bin Rashid Al Maktoum, the UAE Vice President and Prime Minister and Ruler of Dubai, the new gated community will offer ultra-luxury residences, with a brand new lifestyle, that will set a new market in high-end lifestyles, following huge success of ‘Emirates Hills’ by Emaar.
The Dubai Hills villas in the new community will overlook the rolling greens and fairways, and will be the first project in the MBR City, to reflect the vision of HH Sheikh Mohammed on future growth of the emirate, bringing about a new dimension to luxury living.’

Dubai Hills will be a remarkable addition to the residential property landscape in Dubai, mirroring the highest standards for MBR City, further energising the property sector.

Located between the Emirates Road and Al Khail Road, with easy access to all business and tourism landmarks in the city, the new development will also offer retail centres, parks, schools, and healthcare amenities. Residents will gain access to largest park in the heart of MBR City, as well as the Mall of the World development, which will be the world’s largest mall and largest family entertainment centre in the region, developed together with Universal Studios International.

MBR City, the brand new city that redefines the concept of urban development, will focus on family tourism concept, with the central park here, being 30 percent bigger than London’s Hyde Park.

Thursday, December 06, 2012

Dubai most preferred for property investment in the region

Dubai is the most preferred property investment market in the region, as it includes the greatest number of investment-friendly demand drivers, said a recent report.

Dubai's stable political environment, developed infrastructure and market transparency, makes it competitive in the region, said the 2012 MENA Real Estate Investor Sentiment Survey, published by Jones Lang LaSalle (JLL), a leading real estate investment and advisory firm.

Apart from better economic fundamentals and property prices / rental values, Dubai has the maximum number of investment grade properties in the region, the study said.

With real estate offering more risk/return ratio than alternative investments, several regional investors are disposing their non-core assets and are seeking assets that offer stable long term returns, the report said.

Although real estate is a popular asset class for Middle Eastern investors, they are looking at a strategic approach as they seek to re-balance their investment portfolios.

The survey indicates that investors are ready to pay more for well-located assets with good security of income, in comparison to last year. The real estate market in the MENA region is more dominated by private individuals and families rather than institutional investors, unlike in mature western markets, and this trend will continue over the coming years, the report said.

The residential assets are considered as most attractive, with interest rates going strong in this segment. But, there is uncertainty in the market, and investors are hesitant to invest large amounts of equity in single deals and are wary of incurring excessive debt.

Other risk factors such as security of income, political stability, also remain at the forefront of investment decisions. Investors are willing to pay more for sustainable buildings.

Craig Plumb, Head of MENA research at JLL, said that little money is flowing into real estate from players outside the region and investment market continues to be dominated by local players.  Middle Eastern investors continue to remain major players on the global real estate stage, accounting for total of $5.3bn of real estate transactions outside the region during the first nine months of the year.

Tuesday, December 04, 2012

Dubai on road for another property and construction boom

Dubai, aiming to further strengthen its position as Middle Eastern hub for transport and tourism, has embarked on several major construction projects that bear some of the hallmarks of the debt-laden boom years in Dubai.

The Dubai Ruler, HH Sheikh Mohammed bin Rashid Al-Maktoum, last month, ordered construction of a new city, named Mohammed bin Rashid City, worth more than $10bn. It comprises 100 hotels, world’s largest shopping mall, art galleries, exhibition centers and parks.

Soon after, there were announcement plans for $2.7bn leisure complex comprising five theme parks. Dubai is also bidding to host the World Expo 2020, the first-ever time a city in the Middle East would host the event, which requires construction of an exhibition centre on the outskirts of the emirate.

Although Dubai is enjoying economic recovery due to improvement in major areas such as trade, transport and tourism, it still has to repay $100bn debt from previous property boom in 2008. Hence, the current plan leads one to think about how these ambitious construction projects would be financed, and if it will lead to over-supply in a still-fragile property market.

Sheikh Mohammed says that the projects will help boost Dubai’s economy and infrastructure. However, questions remain if Dubai can resume constructions on the scale of last property boom.

During the boom years (2004-07), various Dubai-based entities expanded quickly on cheap debt provided by local and regional lenders. When the global crisis set in, property prices in the emirate plunged by 60%, leaving banks with debt hangover, which they are still struggling with.

Some analysts have expressed concerns about whether Dubai is repeating its mistakes of the past by paving way for another property boom. For instance, details on how the Mohammad Bin Rashid City will be financed still remains a question mark. The project, whose exact cost is yet to be revealed, will be developed by Dubai Holding.

According to estimates by analysts at Shuaa Capital, the Dubai government and some of its affiliates have raised $8bn this year, to restructure old debts, signalling re-opening of debt market for the emirate. With the European banks retreating from the bonds and loans in the region, the spotlight turns back on local lenders such as Dubai Islamic Bank or Emirates NBD, which are eager to boost their lending after several years.
All this has led to concerns that a new lending bubble may be on the anvil, and Dubai should be careful not to repeat its mistakes.