Dubai Real Estate News
UAE Property Market Trends and Reviews

Labels: Cityscape, Townhouses

Labels: Arabtec, New Contracts

With more new regulations introduced, which holds developers accountable for delays in projects, investors in Dubai's real estate sector will no longer have to worry about frustrating project delays, reports the Gulf News.

The Law No.13 and 14, intends to increase transparency in the property market. According to officials in the Dubai Land Department, following registration and approval, all property information will be fed into the system. Hence all details of the project will be readily available and there will be no reason for delays. Law No.13 mandates all developers to pre-register their off-plan properties with the Land Department to form a full database of property transactions. Law No.14 makes it easier for Banks to obtain proof of land titles.

Both Law No. 13 and 14 were made effective last week. Law No.13 ensures that developers register all their projects before launching sales. No one can release a project unless approvals are done, and the approval must be sought from five specified government bodies including Dewa, RTA, Dubai Municipality, Land Department and RERA, said Bin Galita, the CEO of RERA.
Currently few developers are seen demanding a deposit on the unit prior to giving a purchase agreement. As per Law No.13, as soon as the deposit is paid, the sales and purchase agreement should be given immediately.

The new law also stipulates a certain acceptable increase in floorplan of a unit. On completion, however, if the floorplan is smaller than stipulated, the buyer can claim compensation.
The Law No.8 states that developers are given six months time from registration to begin construction of a project. The developers are not allowed to cancel a project without informing the Land Department.

To further increase transparency in the market, the property court will begin operations during first week of October. So far about 96 cases have been solved through mediation by the Land Department. About Dh.200bn worth of transactions are so far registered with the Land Department.

Labels: Dubai Real Estate, Latest News, Property Law

Great Properties, the UAE-based real estate agency, has announced that its share of 'Al Helio Downtown' development in Ajman, has been sold out only two months after its launch.

The real estate sales and marketing agency has been given exclusive rights to sell the plots at Al Helio Downtown, thereby making it the second project promoted by Great Properties and sold on behalf of Al Rashed Real Estate.

The Sales Director for Great Properties, Mohammed Mirza, said "Savvy investors have realized that Ajman is the next great investment opportunity in the UAE. The attractive terms of sale offered by Great Properties and the unparalleled value for money offered on investments in Ajman is one of the main reasons for properties being snapped away so quickly."

About 32 commercial and residential plots have been offered by Great Properties in the development, with a 10 percent down payment option and a special interest-free introductory offer.

The plots were available for Dh.85 per square foot, in comparison to Dh.350 per square foot for similar developments in Dubai. Investors were also given contractual rights to resell the property after making down payment.

Al Helio Downtown is a mixed-use, self-sustained community, spreading across 115 acres. It is just five minutes away from Ajman Downtown development, which will reconfigure the main business in the emirate's business and residential districts. The development will include a nursery, schools, gardens, lakes and health care facilities, mosque and a shopping district.

The Sharjah International Airport is just seven minutes away, and Dubai is just 20 minutes away from Ajman.

Great Properties is managing Dh.2bn worth of projects in Ajman, out of a total six major investment projects worth Dh.40.8bn in Ajman. This makes Great Properties one of the leading real estate agencies in the booming emirate.

Labels: Ajman, Investment Property, Sales

Aqaar Properties, the Ajman-based developer, is hoping to increase its portfolio to Dh.7bn towards end of this year, following announcements of two major developments in Ajman next month.

Aqaar will launch phase two of its first project, the Dh.2.7bn Ajman One, a mixed use development, covering 775,001 square feet.

Ajman is getting highly popular as an investment opportunity and more luxury developments are coming up in the emirate. In line with this, Aqaar is likely to launch the first waterfront development early next month.

The Chairman of Municipality Planning Department, Shaikh Rashid Bin Humaid Al Nuaimi, said "With the launch of phase two of Ajman One and new luxury development, Ajman is entering into a new era of exciting progress and growth. Ajman is transforming itself from a quite emirate into a progressive, vibrant tourism and business destination."

The Phase two Ajman One is located at the core of the new freezone in Ajman, the Ajman One Business District. It will include residential units, four-star hotel with serviced apartments, three office towers and other hospitality facilities.

The office towers are called Apex Business Towers, and will house 640 offices on the whole. The towers one and three will have 27 storeys, while tower two will have 26 storeys. The sizes of office range from 1292 square feet to 2174 square feet. It will also include a four-star hotel, convention center, all of which will be operated by French hotel group Accor SA under the Novotel brand.

The new development targets high-end markets and include retail units, a luxury hotel, a health spa and a souq.

Labels: Ajman, Real Estate Company

Labels: Abu Dhabi, New Contracts

About 50 percent of all investments in the UAE, and the rest of GCC region, goes into the property sector, as against just 30 percent in other Arab states, noted a development expert.

Also, it should be pointed out at this juncture that the Gulf is not subject to the risk of sub-prime crisis, such as that experienced in the United States, said Dr. Refat Abdelhalim Alfaouri, Director-General, Arab Administrative Development Organization (AADO).

Speaking to the media, Dr. Al Faouri, said any crisis would be the result of an excessive supply of residential units, and political problems, which could lead to possibility of instability in the region.

These factors are not predominant in the UAE and other GCC states, right now, as the states are enjoying security and political stability. Also, the gap between supply and demand of residential units is still large.

The AADO, on monitoring the currently flow of investments into the Arab world's property sector, noticed that about $90bn worth of total investments flowed into the real estate sector each year.

The best areas for investment in the Arab World currently are gold and real estate, both of which, offer safety and stability. The property sector has several benefits, the most prominent of which is the availability of large amount of capital, due to huge increase in prices of oil and high demand for residential units due to growth in population in the Arab countries.

But, shortage of skilled manpower to run properties, and weakness of laws governing the industry and property finance institutions are few of the challenges faced by realty sector.
A study by the Abu Dhabi Chamber of Commerce and Industry (ADCCI) reveals that projects in excess of Dh.1.300 trillion are underway and will be implemented in Abu Dhabi in the next few years. This includes construction and property ventures worth more than Dh.752bn.

The construction boom in Abu Dhabi and several other parts of UAE has helped boost the value of the sector over the past couple of years. The contribution to the gross domestic product of the country has increased from Dh.25bn in 2002 to Dh.45.5bn in 2007, and is expected to touch a maximum of Dh.53.3bn this year.

The property sector contributes an approximate of 6.5 percent of the nominal GDP of the UAE, and about Dh.697bn in 2007.

Labels: Investment Property, Latest News, Middle-East, UAE

Labels: Cityscape, Dubai Sports City

Labels: Dubai Marina, Freehold Property, Luxury Homes, Tameer

Labels: Dubai Marina, Luxury Homes, Residential, Tameer

The current credit crunch being witnessed in the US, with Lehman Brothers Holdings Inc being the latest victim, is sure to have its impact across property markets across the world, particularly with banks getting more cautious to lend, commented the Chief Executive of a top real estate company in Abu Dhabi last week.

Ronald Barrot, the Chief Executive of Aldar Properties, when speaking to the media, revealed that "The ongoing crisis will influence the climate of property markets across the world. It will impact the margins and conditions for lending, and banks will get more cautious on matters associated with lending."

Property companies in the Gulf are currently enjoying an economic boom due to high oil prices that have been untouched by the global credit crunch. However, a reluctance by banks to lend in the region could hinder $2.3tn infrastructure, and thereby, real estate investments across the region.

According to Barrot, despite the probability of stringent lending criteria, Aldar would continue with its plans as usual, as the company is confident of being able to maintain business inline with their plans. However, smaller companies may face problems, Barrot said.

Aldar is eyeing real estate opportunities in the US and European sectors during the current situation of global economic recession.

Barrott said that it is too early to predict the impact that the collapse of Lehman Brothers would have on real estate market in the UAE, but "confidence levels were key."

"Markets in the region are amongst the most robust, and will continue to be interesting for people willing to invest. Our market is more insulated from the slowdown than others," said Barrot.

However, a few analysts warn that increasing borrowing costs and tightening liquidity could dampen the developer investment and buyer interest in the UAE. This advance perception of risk will limit the ability of raising funds by the Bank, and will dampen their ability to finance future real estate investment and mortgages. Higher mortgage cost may also slow buyer demand, said Robert McKinnon, a real estate analyst, who is also the Head of Equity Research at Al Mal Capital.

Property shares in the UAE have declined considerably with fears of economic slowdown gripping the region, and the numbers of police probes in real estate companies are growing.

Labels: Latest News, Market Trends, Middle-East

Labels: Construction Projects, Jebel-Ali

Boasting 365 days of sunshine, population growth and reliable economic growth, apart from a booming tourism hub, the UAE is also witnessing massive demand for rental properties. This comes as a tempting package for prospective buyers, states a report in Gulf News.

The new property law which regulates the mortgage process, protecting the rights of borrowers and lenders, making considerable advancements in the home financing market of UAE, offers more choice to consumers than before.

The UAE market is rapidly developing, when compared to markets in places such as the US and the UK, with the central bank data revealing that the mortgage lending in the UAE jumped 55 percent in the year till March.

Another factor worth noting when talking about home ownership in the UAE is the huge demand for rentals in the residential sector. Even the business men who have relocated to the emirates are getting disposed towards purchasing homes in the UAE.

Mortgage lenders are agreeing to offer finance to both end-user and investment purchases, and this makes the prospect of buying-to-rent and second-home purchases even more attractive.
Some confident owner-occupiers who comprise 70 percent of the market are willing to take out finance against existing property to raise cash for secondary purchases which indicates the fair manner in which UAE market is being perceived.

Home financiers, led by Islamic organizations are enjoying a 60 percent slice of the market, and are facing tough competitions from foreign banks keen on getting a slice of the action.

International and local mortgage lenders are striving to make it easier than ever to borrow money for property purchase in the UAE and most mortgage providers can offer customers a list of lenders to choose from.

Flexible and varied home loans are available from various sources, and it is getting all the more easier, to finance commercial, off-plan and under-construction properties, given that the planned property is registered with Dubai Land Department as per the terms of new mortgage law.

Also, it is worth pointing out at this instance that UAE market is standing firm, when the markets elsewhere is witnessing the impact of global slowdown, with the dirham still being pegged to the dollar. This implies that although supply is surpassing demand, rates are sizeable, and the UAE central bank can be forced to track number of US interest rate cuts and home loan rates are lower than during the same period three years ago.

Recent reports state that property prices in Dubai have grown over 70 percent beginning 2007, and more than 20 percent since the beginning of this year. So currently, buyers in the UAE are not looking at two to three percent profit gain in a year, but, the margins expected have grown considerably high. With such profits, interest rates are a secondary consideration.

Labels: Market Trends, Mortgages, Rentals, UAE

With global credit crisis being noticed everywhere in the tough financial world, several property developers in the GCC are turning to Islamic financial instruments for getting a good start for their projects.

According to Swati Taneja, Conference Director of International Islamic Finance Forum, financing carried out as per Islamic rules emphasizes that gains should be derived from ethical, shared investment, rather being interest-based, and hence, this has sidestepped the credit crunch.

The International Islamic Forum, usually held twice a year, will be conducted in Istanbul from 13th to 17th October this year.

The slowdown in the international property market has hit conventional property firms, as investors have begun to scale back their exposure, particularly in highly leveraged markets,Swati said.

There are several instances of emerging developers worldwide adopting the Islamic model to finance their projects. The most recent among these is the biggest property developer of South East Asia, based in Singapore, which is expected to issue $700mn Islamic bond towards end of this year, as the first portion of investment, targeting the Middle East investors.

Taneja pointed out that there are only few competitive sources of finance available in the conventional financial world right now, but, there are several billions of dollars in the Islamic financial sector of the Middle East, seeking investments. However, unless developers plan their projects to be Shariah compliant, they will remain unnoticed.

In recognition of the high competitive alternative offered currently by Islamic finance to the conventional interest-based structures, the forum this year focuses on a special workshop about Islamic real estate deals.

The workshop will offer better understanding of Islamic finance and structures required for real estate development, and will examine the foundation of Islamic finance, and its applicability for real estate transactions.

The forum will identify new markets for Islamic finance and examine Sukuk structures and capital markets, Islamic jurisprudence, emerging Takaful development, alternative asset classes including private equity and real estate, and sustainability with greening of Islamic finance.

Labels: Dubai Real Estate, Mortgages, Real Estate News

The first marina on Palm Jumeirah will be open to public in December this year, announced Island Global Yachting (IGY), the luxury marina developer and management company.

IGY has confirmed launch of an exclusive online auction site to lease berths to owners and residents of the Palm Jumeirah. Anchor Marina, the result of partnership with Nakheel, signifies one of the most prestigious projects by IGY.

The 590 berths of the marina will offer private yachts 10 to 30m in length, apart from modern infrastructural elements such as spacious concrete pontoons, together with some of the most modern technology available to boat owners, such as underwater lighting, LED illumination, wireless internet connections and concierge services.

Michael Horrigan, the CEO of IGY -Middle East and Europe, said that to reflect the prestige associated with Palm Jumeirah, great care has been taken to ensure that the quality of service and structure. The experience one gets at Anchor Marina will position it as one of the most well-appointed marinas in the world.

The guests will be offered with a choice of two clubhouses, one near Anchor Marina East and another near Anchor Marina West. The former will be designed for families, while the later will have a more sophisticated ambience with fine dining restaurants.

Horrigan announced that the Anchor Marina has been scheduled for opening this December, and that this fantastic product is likely to propel Dubai to the global forefront as a 'yachting destination of '.

"We are looking forward to a huge demand for berths and the idea of online auction site is considered as the most transparent and fair way of launching the first tier of leases," he added.

The dedicated auction site www.igyauctions .com is now developed to undertake the week long auction from 1st to 7th November, exclusively for owners and residents of the Palm Jumeirah. The owners/residents will get to lease one berth per property and the leases will be granted for a five year period. The berths for auction will be open to both East and West site of the Anchor Marina for yachts of 10-30m length.

Prospective bidders can begin registrations from 15th October and from then on they will be considered pre-qualified. Thereafter, the users can exclusively browse the site and place bids on unique selection of berths available for long-term leasing.

Labels: Latest News, Palm Jumeirah

The Indian film industry's uncrowned King, Shah Rukh Khan is said to have ventured into the UAE realty sector as a real estate developer.

The Bollywood superstar has started conceptualizing few properties in Ras Al Kahimah emirate of the UAE, and will begin with the Shah Rukh Khan Boulevard, located in the island of Al Dana in Ras Al Khaimah.

The superstar is expected to arrive in Dubai for the forthcoming Cityscape exhibition to be held between 6th and 9th October.

Shah Rukh Khan has teamed up with Nakheel, the leading property developer in the UAE to purchase a house on the man made island of Palm Jumeirah, located off the coast of Dubai.

The property in Ras Al Khaimah will include studio, single and double bedroom apartments, designed by well-known architect Toni Ashai. The superstar, himself, is said to have associated with the development via TSA International Investments, a leading property financial consultancy in the UAE.

Labels: Latest News, Ras Al Khaima, UAE

Tiger Properties have announced the launch of its latest project, Tiger Towers at the core of Dubai Waterfront development.

The twin condominium towers, 170 and 185 meters in height, will be located at the Madinat Al Arab of the Dubai Waterfront development. The towers would cover a built-up area of 121,500 square meters and the buildings will be joined together by 3000 square meters of retail space at the street level and a four-storey podium building.

The towers will also share four levels of underground parking. The towers will the exclusive corner units that offer breath taking views while also maximizing daylight exposure. The towers have a wide array of amenities, including children's playroom, concierge services, club facilities, lounge for relaxing, a spa, exercise room and swimming pool. The club facilities also include roof-top restaurant at the 48th floor and landscaped areas on the ground level.

The CEO of Tiger Properties, Taha Mohammed, said "With Tiger Towers we will establish a new benchmark for buildings in the Waterfront district - one of the most successful urban neighborhoods of Dubai."

According to Tiger Properties, this high-rise project is an icon in the city, likely to be the most luxurious urban condominium building in Dubai.

Labels: Commercial Property, New Developments, Water front

Prices at Business Bay are likely to cross Dh.5000 per square foot mark from the present Dh.3500 to Dh.4000 per square foot during the coming months, predicts an industry expert.

The CEO of Aakar Developers, Yadvinder Singh, recently said that with Dubai drawing considerable attention from more businesses and people, a huge shortage of commercial properties are likely in future. Business Bay apart from being the only main business hub for Dubai, will rise to be a global hub for all businesses.

Although commercial properties in localities such as the Dubai Media City, Dubai Internet City, Dubai Financial Center and TECOM continue to remain attractive, they come with certain limitations and are open only to few kinds of business activities. But properties at Business Bay are used to conduct all types of businesses, and hence there is a greater demand for commercial space at the Bay, which is likely to be the hub for every industry, he pointed out.

According to Singh, the current price of Dh.4000 per square foot at Business Bay is comparatively cheaper than established international hubs such as New York, London, Singapore or Hong Kong. The prices here are soon likely to cross Dh.5000 per square foot mark, he said.

Business Bay is an ideal location for all businesses based in Bur Dubai, Deira and adjacent areas who are seeking relocation of their businesses to Business Bay, due to its close proximity to Dubai Mall, Burj Dubai and DIFC.

"The business-friendly Dubai continues to attract an increasing number of individuals and companies to its shores. Corporates are finding it difficult to establish offices here. Being a flourishing business hub, they require the best location for setting up an office, and Business Bay will be the next business hub not only for Dubai, but for the world. Owning an office at Business Bay would be prestigious" he added.

Any new developer seeking to begin a project at Business Bay will have to think twice before investing, as a plot of land here will cost him thrice more than what he would have ideally paid two years ago. This coupled with mounting construction and labour costs will need a serious thought before embarking on a project under prevailing conditions, Singh said.

Labels: Business Bay, Market Trends

Labels: Dubailand, Luxury Homes, New Developments

Sama Dubai, leading real estate developer and a division of Dubai Holding, has refused to comment about the news reports that Al Arabiya, the Kuwaiti real estate firm is seeking arbitration proceedings against Sama Dubai for blocking sale of plots in the Lagoon Project to United National Bank (UNB).

The media had last week carried reports stating that Al Arabiya claimed that the deal with the Abu Dhabi-based UNB and Sama Dubai had been fixed in June.

Refusing to comment on the issue, the Executive Chairman of Sama Dubai, Farhan Farid-ooni, in his statement to The Gulf News, has been reported as saying that commenting on an investors relationship with the company, breaches the contractual agreement between the company and the investor.

Several analysts in Dubai when trying to predict the future of housing and property in Dubai during the next couple of years have predicted that a notable correction is likely.

Al Arabiya has already spent about Dh.1bn on 18 plots since 2007 at the Lagoons development in Ras Al Khor. But, last week, Sama Dubai is said to have returned payment cheques after holding them for three months, although it refused to clarify as to why the cheques were held back for so long.

Al Merri, the Chief Executive of the Lagoons Project, is under investigation, and was questioned last month.

The Kuwaiti firm, Al Arabiya, which has been listed on the Kuwait Stock Exchange, in their note to Sama Dubai, emphasized that they intend to go ahead with arbitration at the Dubai International Arbitration Center, within Dubai's Chamber of Commerce.

UNB is also considering legal proceedings, it has been said. This is another addition to the long series to cracks to appear in the fragile property sector of Dubai, which unsettles all those, interested in the market. The Police have investigated several officials of major companies such as Tamweel, Nakheel and Deyaar.

Labels: Dubai Holdings, Lagoon, Latest News

The Cityscape Dubai 2008, due to take place between the 6th and 9th of October will display the potency of the UAE real estate market and its immunity towards global property recession during the coming month.

Cityscape Dubai is likely to break new records this year with more than 60,000 participants from about 150 countries attending to conferences and exhibitions, due to be held at the Dubai International Exhibition Center.

The event will begin with the Real Estate Leadership Strategy Summit, gathering the efficient real estate investors from around the world to address trends, strategies, opportunities in the global market place.

The International Real Estate Investment and Development Conference, Cityscape Dubai's main conference, will feature world-class speakers for three days of analysis of the macro-economics of realty development and financing options.

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Labels: Cityscape, Property-show

Labels: Damac Properties, Dubai Marina, Freehold Property

Labels: Abu Dhabi, Luxury Homes, New Developments

During an exclusive event held in Paris recently, Dubai Properties showcased sale of its latest residential development, 'Babil', worth Dh.50bn, at Culture Village.

This uniquely designed six storey residential building, offers 159 residential units in an old souq area. The event highlighted the key aspects of Babil, and invited high-end European investors as audience at the Ritz Hotel in Paris.

The event follows the successful launch of the development at Harrod's in London, where Babil had drawn considerable investor interest.

Culture Village spans over 40million square feet, featuring vast open spaces, traditional wind towers, unique sculptures, cobble stone walkways, waterways topped with bridges, restaurants, creek side souks, cafes, amphitheatre for live performances and cultural festivals, exhibition hall and museums.

The development also includes serene residential communities, vibrant commercial and retail sectors, schools, academic institutions, art colleges and learning centers for dance and crafts.
The main focus is the 215-suite Palazzo Versace Dubai, which sprawls over 429,509 square feet of prime land, comprising 220 condominiums, spa, restaurants, and 204 luxury villas furnished with an exclusive line of products from Versace Home Collection.

A premium waterfront development, with unobstructed views of the Creek, the resort is scheduled for opening in 2009.

Dubai Properties includes a wide portfolio of residential, commercial and mixed-use developments such as the Business Bay, Jumeirah Beach Residence, The Villa and Tijara Town.

Labels: Cultural-Village, Real Estate Projects, Residential

Saba Properties JLT has awarded Arabtec LLC, a subsidiary of Arabtec Holding PJSC, with a Dh.664mn construction contract of its latest tower, Saba 4.

The Saba 4 tower, located in Jumeirah Lakes precinct of Dubai, has its infrastructure works well under progress, and the development of main structure will happen in first quarter of 2009.

The tower, which is 222 meters in height, has 51 storey dedicated for business space, parking, and several other amenities, required to cater to needs of offices.

The Chairman of Saba Properties, Javaheri, said "Arabtec has a wonderful engineering vision, which has manifested in development of high quality developments, whether commercial or residential, with an integral architectural framework. This has proven to have outstanding status in the market through construction of various landmark projects and strategic plans. We are pleased to work with Arabtec, and will render complete support to this agreement and future agreements that would help realize the expectations of both our companies."

Arabtec Holding PJSC, known as Arab Technical Construction Company PJSC, is a Public Joint Stock Limited Liability Company, formed in 2004 for investment in the contracting sector through establishing, acquiring and owning shares in construction related companies in UAE and abroad.

Labels: Arabtec, New Contracts

The first phase of Al Nujoom Islands, the realty project currently under progress in Sharjah, will be completed shortly, with about 95 percent of the digging for the project's water canals completed.

The Chairman of Al Hanoo Holdings, Sheikh Abdullah bin Fahid Al Shakrah, said that the lining of canal banks is a complicated process, as these canals are the main base for the waterfront infrastructures of the project, particularly, those pertaining to marinas, island connectors and tide breakers.

Al Hanoo Holdings had to use about 2.3mn tones of rock to line the bank of water canals. Al Hanoo has made various development procedures on the masterplan of the water canals. These canals allow water to circulate in a record period, above the standard international average. The 3km long waterfront has also been converted into a 35km stretch.

The Middle Eastern realty company has made various development procedures on master plan of water canals. The Al Nujoom Islands project in UAE is now being developed in three stages. Developmental works on the property development are likely to be complete by end of third stage in 2010.

Labels: Construction Projects, Sharjah

Labels: Business Tower, Dubai Sports City

Property prices on Reem Island, a commercial, residential and business project, across the coast of Abu Dhabi, have more than doubled touching Dh.3000 per square foot from Dh.950 over the past couple of months.

According to Vincent Eastone, Sales Director, Sherwoods Independent Property Consultants, a rapid growth has been noticed during the past three years, not only in terms of new projects, but also in prices of properties. The current Abu Dhabi market, although interesting, is largely led by speculation. Although speculation is healthy, as it helps attract international interest and attracts investors seeking short-term gains, it is not sustainable.

There exist high chances of creating a bubble effect. For instance, what should have been a gradual increase over a three year period is seen happening in nine-months.

A market attracting short-term investors will have a risk factor involved, as to whether the investors would remain committed and continue their future payment plans or whether they would exit.

Easton also pointed out that the situation is very much the same in Dubai. For instance, when during the first six months of this year, several people were crowding during the launch of residential units by Emaar at Downtown Burj Dubai, while only 200 to 300 units were available. There is still a huge demand for major projects, and this indicates that there is still a healthy level of interest in UAE.

When compared to other international cities, Dubai is comparatively a young market, maturing gradually. Establishment of RERA has been a major step ahead, although, there is need for more structuring regulations and transparency in the market. RERA and Dubai Land Department have done good jobs till date, Easton commented.

Labels: Abu Dhabi, Al Reem Island, Market Trends, Property Prices

Being exposed to the overheated property market in the Gulf, the Banks such as the First Gulf in Abu Dhabi are in a vulnerable position, where funding conditions for financial firms are likely to deteriorate HSBC stated.

HSBC has reduced price targets on several major banks in the emirate, stating the financial sector would remain challenged by the lack of economic diversification in the country.

HSBC, in its note to the clients, stated that the high concentration of real estate and construction loans in the portfolio of banks is a matter of concern, although it is not an immediate threat.
Banks such as the First Gulf and National Bank of Abu Dhabi are the most exposed to any downturn in the property market.

HSBC has reduced its investor recommendation on First Gulf to neutral from overweight, with a price target of Dh.24.5, while also lowering its price target on National Bank of Abu Dhabi to Dh.19.9 from Dh.22.5.

Banks in the Gulf have considerably weakened during the recent weeks, based on the bourses in the region, on concern that a rapid expansion in the realty market, to which the Banks are exposed, may have gone too far.

For instance, the Abu Dhabi Commercial Bank has shed 24 percent this year so far, while the First Gulf Bank has gained about 10 percent. There is overheating in the real estate market in the region, but we do not notice any immediate threat to asset quality, the note stated.

HSBC has also lowered its price target on Union National Bank to Dh.11.0 from Dh.11.9, and from Dh.7.8 to Dh.6.4 on Abu Dhabi Commercial Bank.

Labels: Middle-East, Mortgages

Dubai, popularly known as the city of tall towers, may soon prove to be the most expensive commercial real estate location in the world, reports The Gulf News.

The latest reports have already placed Dubai as the sixth among the list of most expensive office space in the world, behind other commercial big-hitters such as London, Moscow, Hong Kong, Tokyo and Mumbai.

The world's most expensive location at present, London, has noticed that investors are getting timid, as they are passing through the effects of a global credit crunch. The gloomy financial predictions and stringent measures, have led to a plunge in commercial property values, with a recent 20 percent decline noticed in values.

In the meanwhile, in the shiny and optimistic skyscrapers of Dubai, the sky is the limit, as far as real estate is concerned. High demand for office space is driving the prices sky-high, while the supply has been lagging behind.

It is likely that the companies may think twice before setting up large headquarter type of offices in Dubai, due to the spiraling costs. This may prompt establishment of smaller businesses, giving investors a presence in the Middle East, although not a head office.

A drop in prices is unlikely before 2012, but the status of UAE thereafter, is not known. At present, Dubai has 19.1mn square feet of commercial space, boasting a 98 percent occupancy rate. Most of the commercial properties being sold are given off off-plan to developers, striving to keep pace with the demand.

About 75.8mn square feet of space is likely to enter the market within 2012, and then with more office space finally made available, it should be watched as to what happens to prices here and abroad.

There may not be many other places, other than Dubai and UAE, which has so much development planned. The Dubai International Financial Center, Burj Dubai complex and Business Bay, are all places specifically designed to lure companies towards establishing their shops in Dubai.

The cost of building supplies will continue to rise, as the global market continues to slow down, but, this may push prices even higher. Although this could also bear an impact on the building schedules here, a quick glance at the mixed-use and office specific developments being announced regularly in UAE, indicates the buoyancy and optimism in the market.

Although the inflation touched 11.3 percent towards end of last year, while the rent surged 17.5 percent, these have never hindered the growth of property market in 2008. According to recent study, Dubai has witnessed a 136 percent rise in property sales during the first half of this year, and this is bound to continue.

Labels: Commercial Property, Market Trends

The Mohammed bin Rashid Gardens, expected to be one of the most ambitious urban projects in the world, is likely to accommodate more than a quarter of a million people with a system known for its parks, waterways and gardens, which represent the largest formal urban masterplan in the Southern Gulf. This fact has been revealed by CivicArts, the architectural firm for Mohammed bin Rashid Gardens.

With a construction cost worth more than $60bn, the logistics of manually building such an immense development such as the Mohammed bin Rashid Gardens are matched by the monumental scale of water management required to transform the desert into lush oasis.
The masterplan weaves water into the social fabric of 21st century city, where the interests of recreation, transportation and environment will all go hand in hand.

Designed by Eric Kuhne, the masterplan of the new city was unveiled by H.H.Sheikh Mohammed bin Rashid Al Maktoum, the Vice-President and Prime Minister of UAE and Ruler of Dubai, which includes provision for education, homes, commercial and financial facilities, apart from tourist landscapes, civic buildings and more.

"Water will be the lifeblood of the new city, pumped through a network of pools, canals and waterways, creating a waterfront which will be unrivalled in the Middle East," said Kuhne.
The canal system will be navigable and will support life on many levels, offering wildlife habitats numerous opportunities for recreation and leisure. With about 150km of waterfront and wetlands, the Central Union Canal will give the ecosystem of the city, the capacity to support a range of living creatures on scale unprecedented in the Middle East.

The lakes, waterways, canals, retention and detention ponds will all together form a perfect habitat for procreation and protection of aquatic and terrestrial wildlife.

The masterplan also permits a variety of waterway edges, including keystone walls with integrated plants, stepped terraces that offer upper-level dining, apart from the mid-level cycle paths, lower-level walkways and gabion walls all planted with aquatic plants set with boulders to create natural informal character. The beach and detention ponds allow easy access to canal, which will facilitate the provision of public beaches and informal lawn areas.

The water channels, pools and fountains are the organizing elements of the wide gardens, with unique Arabian pattern of parkways and canals which has drawn inspiration from astrolabes, which when once charted the heavens will now become symbols of geometry for this new city.
The main aspect of the design is the Grand Canal, which will find its way through the Dubai Creek and Business Bay through the astrolabe pattern to the heart of Mohammed bin Rashid Gardens, before returning to the Gulf. The design implies that residents, workers and visitors to the new city will never be far from gardens or water, and the circling canals, culminating in dramatic, Grand Central Fountain will be a unifying aspect.

The water and power strategies will be supported by low water usage and energy-efficient buildings. The building control systems, together with water and energy-efficient fittings will minimize demand. Well-designed facades will maximize the use of natural light and buildings, and integrate solar technologies to supply hot water and local cooling for residences that are not connected to the city-wide district cooling networks.

The design of the city will include and unprecedented level of water recycling. Sophisticated water treatment will bring in non-potable water supply which will reduce potable water demand and effluent stream will meet irrigation needs. The greening of the city with canals, parks and ponds will draw attention of migratory birds, enhancing local and global biodiversity. Planting will create cool corridors for walking and riding.

Labels: Dubai City, Environment-friendly

The prevailing high prices in Dubai realty sector are likely to be short-lived, and a slowdown is expected, announced the Chief Executive of Daman Investments, a top asset management company.

"Prices are sure to stop growing at this maddening pace. I doubt we will see a significant long term bust. But we will see corrections" said Shehab Gargash, CEO, Daman Investments.

According to Shehab, with the demand continuing to grow, the realty sector will witness growth and prices will continue to increase. But Dubai is no longer a direct build-and-sell proposition. During the past weeks, the UAE realty sector was in the limelight for several reasons, such as the much talked about Morgan Stanley report, which indicated a 10 percent drop in prices by the next two years, when the supply comes into stream.

The market is in a consolidation phase, and will see a differentiation among good and bad quality developers, Shehab added.

Mohammad Nimer, CEO of MAG Group Property Development, agreed that the prices are no-doubt sky-high, and is getting less attractive for investors and end-users, and hence, a correction is bound to take place. The people who already purchased property will realize that the price paid was 'inflated', and secondary market buyers and investors will think twice before investing.

The Government of Dubai has now passed a mortgage regulation, making registration mandatory, which cracks down off-plan sales, and reduces fears of speculation in the market. This will surely have a positive impact on the market, although the market will face a slow down. But, it will sure make the market stronger, he added.

Sudhir Kumar, the Managing Director, Realtors International, pointed out that premiums in witnessed in the market, during the recent years, have now become a past. He, however, said that he does not expect a slowdown in the market within next two years.

Temporary shake ups may happen, but, considering the corrective measures being taken, when all the regulations are passed, abnormal premiums are unlikely to happen, he added.

Labels: Market Trends, Real Estate News, UAE

Mega developments are here to stay, and will be the future standard for real estate development in the region, reports the Gulf News.

Mohammed Hussein Abdullah al Nemer, the Board Member and Chief Marketing Officer of Awali Real Estate Investments, stated that the rise of mega projects in the UAE realty sector, may be due to several factors, which are hoped to bring in demand and form the ideal platform for large-scale community developments, as against the smaller, single-purpose developments during the past.

The growing UAE economy, draws high numbers of new residents each year, and creates a knock-on impact on the property sector. This has led to massive surge in demand for high quality commercial and residential properties.

With the demand, comes the need for luxury, convenience, exclusivity, integrated community services, all of which could be expected from a modern life-style.

Mixed-use developments not only cater to the necessities of modern living, but also play a major role in the sustained development of the economy in the region, as the sheer volume of development is not only indicative of the vastness in the market, but, is also a major contributor to the growth in terms of job opportunity.

Labels: Real Estate News, UAE

With the new law emphasizing that all its off-plan units be registered with the Dubai Land Department, the real estate market in Dubai is a far safer place for investment now, reveal legal consultants.

"The law is a step ahead in the vision of Dubai to develop a well-regulated property market, with particular emphasis being laid on consumer confidence and transparency"said Will Grinter, Legal Consultant, Clyde &Co., an international law firm.

Law No.14 will become effective in Dubai on the publication of next issue Government Gazzette. With large numbers of complaints pouring in from investors, in the off-plan market in particular, this new law will boost the security aspect in investments, and will a shot of much-required confidence in the market as a whole.

Apart from offer protection to off-plan investors, the new law will also enhance transparency in dealings of the secondary markets in off-plan property, and will also facilitate the registration process upon completion of development.

Grinter also warns that the new law does not include any special provision regarding project delays or cancellations, although RERA holds investigative powers.

A property court, due to begin operations soon, will deal with real estate disputes and is another positive step to ensure complete transparency in the market. Grinter also revealed that the new law would bring in a mandatory procedure that needs to be followed by any developer looking to end sale and purchase agreement.

Labels: Dubai Real Estate, Off-plan, Property Law

The iconic tower developed by Emaar, Burj Dubai, has attained record height of 688 meters.

The tower, which is already the world's tallest, after surpassing KVLY-TV mast of USA, North Dakota, in April 2008, now includes 160 storeys, which is also the largest number of storeys than in any building.

On completion, Burj Dubai, will meet all four criteria listed by the council on tall buildings and urban habitat (CTBUH), which classifies the world's tallest structures. The CTBUH takes into consideration the height of buildings upto the structural top, the highest occupied floor, the top of the roof, and the tip of pinnacle, antenna, spire, mast or flag pole.

Designed by the Skidmore, Owings & Merril (SOM), Burj Dubai is constructed by Samsung Corporation of South Korea. The project and construction is managed by Turner Construction International. About 7500 professionals and skilled workers are employed on-site at Burj Dubai.
The cladding work is nearing completion, and the work has begun on the interiors, which boasts superior finishes. Only the best efficient technologies are being deployed to ensure that the iconic building remains as a standard for energy usage and water recycling.

Burj Dubai is the anchor mega-project by Emaar at the Dh.73bn Downtown Burj Dubai. Being described as the new heart of the city, the Downtown Burj Dubai is a mixed-used development comprising premium hotels, modern residences, exclusive business facilities, and shopping malls and leisure amenities.

Labels: Burj Dubai, Latest News