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ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 16 SUNDAY 17 April 2016

DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN © Asteco Property Management, 2016 asteco.com | astecoreports.com

IN THE MIDDLE EAST FOR 30 YEARS


REAL ESTATE NEWS

UAE

EMAAR TO BUILD TOWER HIGHER THAN BURJ KHALIFA AND NEW ‘MEGA-RETAIL DISTRICT’ FOR EXPO 2020

AFFORDABLE HOUSING REMAINS LACKLUSTRE AT CITYSCAPE

BILLION-DOLLAR LAUNCHES TAKE CENTRE STAGE AT CITYSCAPE

ABU DHABI

MUBADALA RAMPS UP LEASING OF OFFICE SPACE AT AL MARYAH

ABU DHABI COULD SEE SLOW 2016

ABU DHABI IMPOSES MUNICIPALITY FEE ON HOTEL STAYS

DEMAND DROPS FOR ABU DHABI HIGH-END RENTALS AS BUDGETS FALL

ABU DHABI DEVELOPER ALDAR TO BUILD 1,315 VILLAS ON YAS ISLAND

BLOOM PROPERTIES TO UNVEIL FAYA PROJECT AT CITYSCAPE ABU DHABI

ABU DHABI’S URBAN PLANNERS WORKING ON WAYS TO RESTART STALLED REEM ISLAND PROJECTS

BLOOM HOLDING TO LAUNCH AFFORDABLE HOUSING PROJECT NEAR ABU DHABI AIRPORT

MASDAR MASTER PLANS FOR SUPER-GREEN COMMUNITY GIVEN ABU DHABI APPROVAL

MÖVENPICK PREPARES TO OPEN HOTEL IN ABU DHABI

SAADIYAT LAGOONS: NEW ABU DHABI DISTRICT SET TO HOME 29,000 RESIDENTS

THE REAL ESTATE LAW TO GIVE BOOST TO ABU DHABI’S PROPERTY SECTOR

EMIRATI BUYERS TARGETED IN AL FORSAN RENT-TO-BUY SCHEME IN ABU DHABI

ABU DHABI PROPERTY CONSULTANTS TO BE QUALIFIED BY END OF 2016 AS ‘MOST BROKERS ARE NOT BROKERS’

AL REEF DOWNTOWN OFFERS HIGHEST YIELDS IN ABU DHABI

HILL INTERNATIONAL TO OVERSEE RIXOS SAADIYAT CONSTRUCTION IN ABU DHABI

NEW 3% MUNICIPALITY FEE ON ABU DHABI EXPAT RENTALS COULD GIVE GOVERNMENT DH612M BOOST

DUBAI

DUBAI IN TOP 5 CITIES FOR ULTRA-RICH

DUBAI CREEK TOWER CAN BECOME LANDMARK FOR CITY, EMAAR CHAIRMAN SAYS

MORE CHEAP HOMES SELLING AS PRICES DROP IN DUBAI



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REAL ESTATE NEWS

DUBAI PARKS & RESORTS RAISES FUNDS FOR SIX FLAGS THEME PARK

DUBAI’S EMAAR PROPERTIES TO REORGANISE INDIA UNIT THROUGH DEMERGER

DUBAI DEVELOPER TAKES FREEHOLD OUT OF CORE AREAS

HIGH-END VILLAS IN DUBAI GET A FIRST QUARTER LIFT

DUBAI FINANCIAL MARKET TO LEAVE THE ONLY HOME IT HAS EVER KNOWN

SHARJAH & THE NORTHERN EMIRATES

SHARJAH A LAND OF OPPORTUNITY FOR THE UK

OMRAN PROPERTIES TO CHANGE SHAPE OF THE SHARJAH SKYLINE

EAGLE HILLS IN FIRST UAE PROJECT WITH ADDRESS HOTEL-BRANDED RESORT IN FUJAIRAH

GCC | INTERNATIONAL

MANAZEL TO START OFF-PLAN SALES IN AMMAN PROPERTY PROJECT EIGHT YEARS AFTER LAUNCH

EMAAR AND RIXOS REPORTED TO BE INVOLVED IN TURKISH THEME PARK TALKS

FIRST HOTEL AT EAGLE HILLS’ SARAYA AQABA PROJECT IN JORDAN TO OPEN EARLY NEXT YEAR

ULTRA-RICH WANT TO BUY COMMERCIAL PROPERTY: KNIGHT FRANK

BOUYGUES TO BUILD PARIS TOWER BEING FUNDED BY ADIA

THE DH143M ENGLISH PILE WITH TWO HOMES BUILT ON A WORLD-FAMOUS GOLF COURSE



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DUBAI IN TOP 5 CITIES FOR ULTRA-RICH

SATURDAY, 9 APRIL 2016

New data places the emirate ahead of Paris, Shanghai and Sydney, but behind London and New York. More than 10,000 individuals with net assets over 10 million have homes in Dubai.

As an investment destination, Dubai is leagues ahead of its regional peers, having emerged as the fifth most important city to the ultra-rich.

A real estate ranking put the city in the top five hubs for wealthy individuals, ahead of Shanghai, Paris and Sydney. London and New York still took the top two spots, followed by Singapore and Hong Kong.

“The general feel is that Abu Dhabi and Doha lag Dubai when it comes to the ease and transparency of doing business, open trade environment and development of many rules and regulations. ”-Dana Salbak, Associate Partner Research, Knight Frank Tweet this

“Dubai is quite the global city within the region,” says Dana Salbak, Associate Partner Research, at Knight Frank. “Economically Dubai is more diverse than the rest of its GCC peers, with trade and transportation, tourism and finance contributing heavily to the Emirate’s GDP. From a business perspective, it’s an ideal gateway city.”

10,000 Individuals

The emirate’s location makes it accessible to 1,500 UHNWIs within a two-hour flight. Knight Frank claims that more than 10,000 individuals with net assets of more that $10 million stay in permanent or secondary homes in Dubai, higher than those choosing to stay in Paris (9,500), The Hamptons (9,300), Miami (5,400) and Cannes (2,220).

The findings chime with survey from property consultants Cluttons and global market research agency YouGov, which say 27 per cent of GCC’s high-net-worth individuals (HNWIs) rank Dubai as their preferred investment destination. Abu Dhabi and Sharjah follow, at 21 and 8 per cent respectively.

“The oil price decline has certainly put budgets under pressure and has triggered a number of macro policy amendments, including the phasing out of energy subsidies an introduction of VAT,” senior partner at Cluttons, Steven Morgan, said in a statement. “We expect these measures to put a clear squeeze on household finances, but, for now the investment sentiment of the region’s high-net-worth individuals remains positive, particularly towards the UAE.”

Dubai Land Department data shows that GCC nationals invested a total of Dh44 billion in the emirate’s real estate in 2015, making them the largest source market of foreign investment in the city’s property market.

Factors

Factors that stand in Dubai’s favour include airport connectivity to six continents, the emirate’s commitment to free trade through special free zones, regulations that encourage foreign investment, as well as cultural reasons.

“Of course the UAE in general and particularly Dubai is currently seen as the region’s safe-haven for many looking for job opportunities or just somewhere to invest their money away from their troubled homes, and even security,” she adds.

The rankings, part of the New World Wealth report, are based on responses from the agency’s database of UHNWIs.



http://gulfnews.com/gn-focus/special-reports/property/property-dubai-in-top-5-cities-for-ultra-rich-1.1705704

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While the factors that benefit Dubai also benefit cities such as Abu Dhabi and Qatar, Salbak said those cities still have some distance to travel. “The general feel is that Abu Dhabi and Doha lag Dubai when it comes to the ease and transparency of doing business, open trade environment and development of many rules and regulations. Both cities are also still dependent on the hydrocarbon sector. This is expected to change in the long-term as investments in hospitality & tourism are underway, but for the meantime it’s hard to see them overtake Dubai as a global city.”

Source: Gulf News

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MUBADALA RAMPS UP LEASING OF OFFICE

SPACE AT AL MARYAH

SUNDAY, 10 APRIL 2016

Mubadala Real Estate is to restart a search for tenants at Abu Dhabi’s largest new office development, two years after leasing activity was put on hold.

The Abu Dhabi-based fund said yesterday that it would market the remaining vacant office space at its 180,000 square metres Abu Dhabi Global Market Square on Al Maryah Island at this week’s Cityscape property show.

Although two of the four vast office blocks in Abu Dhabi’s new financial district have been nearly fully let soon after the complex opened in 2011, leasing on the remaining two, accounting for half of the available space, was suspended in 2013 while Mubadala waited to see how new rules governing the operations of the city’s financial free zone affected tenants.

But in October, the financial free zone declared itself open for business following the publication of new draft laws in January last year.

This means that ADGM Square’s two final office blocks, Al Sarab and Al Khatem, which between them account for 98,000 square metres of top-grade office space, have come back to the market.

The rapid increase in grade A office space is likely to further subdue Abu Dhabi office rents, which are already feeling the strain of low oil prices.

Property brokers say that rents at ADGM Square stand at about Dh2,600 per sq metre – down from more than Dh3,000 at the start of the year.

“With four Grade A commercial buildings … the island’s amenities and offerings have made this one of the most sought-after business districts in Abu Dhabi," said Ali Eid AlMheiri, the executive director of Mubadala Real Estate and Infrastructure.

Source: The National

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SHARJAH A LAND OF OPPORTUNITY FOR

THE UK


LONDON // Lee Jennings has certainly heard of Sharjah — but very few of his UK clients can say the same.

Mr Jennings spent 15 years working at the British Embassy in Dubai, most recently for the Welsh government helping businesses build trade in the UAE.

He left last year, returning to the United Kingdom to set up Jennings International, which specialises in helping business to set up shop in the Arab world. Most often, that means the UAE.

Much of his role involves educating his clients — which range from renewable energy companies to landscaping firms — about the UAE, especially those emirates that do not have the headline-grabbing profiles of Dubai and Abu Dhabi.

“From the UK there’s still a degree of lack of knowledge about the whole of the UAE," says Mr Jennings. “Certainly, Sharjah is an unknown entity to a certain extent."

That is something authorities in Sharjah very much want to change.

The Sharjah Investment and Development Authority (Shurooq) at the weekend held a “Sharjah Day" in London, geared towards British companies looking to set up in the emirate. Shurooq recently opened an office in the UK capital and in September plans to launch a global campaign entitled “Invest in Sharjah".

Marwan Al Sarkal, the chief executive of Shurooq, acknowledges that Sharjah has not previously done all it could to sell itself in global business circles.

“Sharjah has not been promoting itself internationally on a wider level," he says.

“From a business point-of-view, not everyone is aware about Sharjah. So if you go to the business community, people might not really recognise that Sharjah is the biggest industrial hub. They might not recognise that Sharjah is the heart of [small- and medium-sized businesses] in the Emirates."

But the emirate is certainly doing something about it now. Shurooq’s UK operation currently has two staff housed in temporary offices. But there are plans to grow this and buy a dedicated premises in the UK capital, Mr Sarkal says.

“We’re not here in London to test the market — we’re here to stay," he adds.

“We’re going to have more events here in the UK, not only in London. We’re going to go to Manchester in the future, to Scotland, Wales and Ireland to check what are the opportunities, and how we can promote [Sharjah] to UK investors."

Shurooq’s event in London attracted about 200 people — more than double the 80 expected. The authority has also formed a partnership with the Arab-British Chamber of Commerce and is working with the Financial Times on launching a Sharjah FDI conference, Mr Sarkal says.

“I think Sharjah deserves to be internationally recognised," he says. “So our objective is just to spread the message that Sharjah is there, Sharjah is open for investors, Sharjah is a very dynamic emirate."



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There are, of course, challenges ahead. Economic growth in Sharjah is said to have slowed, tempered by the gloom over low oil prices and tightening liquidity in the banking sector. Standard & Poor’s (S&P) said last year said it expected economic growth in the emirate to have dipped to 3.5 per cent in 2015, down from 5.5 per cent the previous year. The UAE is also implementing new taxes, such as VAT on goods, while airport exit taxes are coming to Sharjah and Dubai.

James Moffat, the chief executive of Lamprell — an oil-rig construction business based in Sharjah and listed on the London Stock Exchange — acknowledges the firm has felt the impact of the crash in oil prices.

“We’re certainly seeing some headwinds in the offshore business," he says. “Having said that, our yards are all currently full. We have diversified into more onshore business recently. We’ve also invested pretty significantly in our facilities over the last 18 months — we’ve spent about US$60 million."

There are ambitious targets in place to grow trade between the UK and the wider UAE.

In October, the UAE and Britain set a new target to double bilateral trade to £25 billion (Dh129.74bn) by 2020 — about double its current level. The previous target, of £12bn, was reached in 2013 — two years ahead of schedule.

Abdulrahman Ghanem Almutaiwee, the UAE’s ambassador to the UK, told the audience in London at the weekend that there had been “remarkable progress" in relations between the two countries.

“The UAE is now the UK’s largest export market in the Middle East, and it is the 12th largest in the world," he says. “Last year our governments set an ambitious new target to double bilateral trade to £25bn by 2020. Indeed, a new target requires new thinking and deeper engagement."

British companies that already have interests in Sharjah include Serck Services International and Gama Aviation. And many more are eyeing the emirate for opportunities.

The UK’s Watership Down Technologies, which makes organic waste digesters that can be used to create fuels and compost, was one of the companies attending the Sharjah Day in London.

Peter Shepherd, its director of Middle Eastern projects, says the company has big ambitions in the region — specifically in the UAE, Saudi Arabia and Kuwait.

“We have a target of £250m [annual] revenue from the Middle East alone … in 12 months," he says.

Watership Down’s technology can be used to reduce landfill waste and create compost. And the latter is of vital use if the region is to boost its farming activities, says Mr Shepherd.

Watership Down Technologies executives were set to meet with Bee’ah, the Sharjah public-private partnership that specialises in recycling, waste management and the environment, at the event in London.

Khaled Al Huraimel, the chief executive of Bee’ah, says the company already does “a lot of work with UK companies" — including the technology company Chinook Sciences.

Sharjah has some unique advantages over other emirates, experts say.

Mr Jennings, who also does work with Global Business and Investment (GB+I), says that while Sharjah has to “compete with its neighbours", it does have advantages in aspects such as cost, and the fact that it has seaports on both the east and west coasts.

“Depending on what kind of industry you’re in, I think Sharjah offers something slightly different than Abu Dhabi and Dubai," says Mr Jennings. “The cost will probably be lower in Sharjah than in Jebel Ali, for example."

Robert Martin of GB+I — which has a presence in Dubai and the UK and also specialises in helping businesses grow internationally — says the UAE is “fertile ground" for British companies, as well as schools and arms of the country’s National Health Service (NHS).



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“We’ve got several NHS trusts looking to come to the UAE and several British schools. Of course, a lot of them come to us and they ask about Dubai and Abu Dhabi," he says.

“But it’s really interesting for us to educate them about Sharjah, and tell them about the opportunities there. Because they don’t really know much about it, by and large."


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ABU DHABI COULD SEE SLOW 2016


Abu Dhabi’s property market, which has always been slightly behind Dubai, looks set to slow in 2016, agents say. With low oil prices putting a downward pressure on government spending and staff costs, real estate could feel the burn in coming months, though investors gained confidence from the new property law.

“Following a slow but overall positive market performance in 2015, which saw apartment rental rates increase, on average, by 5 per cent, with prime projects achieving up to 10 per cent growth, and 3-4 per cent growth for apartment sales prices, Asteco expects a noticeable slowdown in the next 12 months, compounded by a reduction in government spending and stagnant salary levels,” says John Stevens, the firm’s Managing Director.

“Expats make up about 75 per cent of the population in the capital and are a major demand driver for residential property. So unless there is a significant shift in labour requirements, we feel existing supply and demand will keep the market in equilibrium in the short to medium term.

“In addition, the new property law — No.3 of 2015 — should boost investor confidence with improved sector regulations across key areas.”

With some high-profile redundancies in recent months, previously unavailable properties are now entering the market, adds Robin Teh, UAE Country Manager at Chestertons. “From an Abu Dubai perspective, external investors are able to seek out opportunities in non-freehold areas, but obviously this is restricted to GCC nationals. We are seeing demand from banks and investment funds looking for alternative opportunities to traditional investment avenues.”

For end users, it seems to be a case of wait and watch. “As prices continue to soften in both Dubai and Abu Dhabi the market remains stagnant with relatively lower transaction numbers,” says Dima Isshak, Research Manager, Cavendish Maxwell. “Many homeowners who may have previously been looking to sell have turned to renting their property instead as they have not been able to achieve their expected sale prices.”

Source: Gulf News

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MANAZEL TO START OFF-PLAN SALES IN

AMMAN PROPERTY PROJECT EIGHT YEARS

AFTER LAUNCH


Manazel Real Estate plans to start selling off-plan property at its first overseas project in Jordan about eight years after it was first launched.

The Abu Dhabi developer hopes to attract buyers to its Manazel Amman project of 1,600 villas and apartments, which it is building on the outskirts of the Jordanian capital.

Manazel, whose projects include Al Reef Villas in the capital and Dune Village in Dubai, said that the 500,000 square metre gated community development aimed at middle-income Jordanians would also include shops, mosques, gyms, a medical centre and a kindergarten.

The project, Manazel’s second-largest to date, will be launched on the first day of Cityscape Abu Dhabi, which is set to take place from tomorrow to Thursday. Manazel first launched its Jordanian project, then known as Amman Gardens and comprising 1,863 villas, back in 2008.

However, the developer was hit by the global financial crisis and forced to delay a number of planned projects.

“Manazel Amman is Manazel Real Estate’s first step in our strategic expansion outside of the UAE, and we expect strong demand from buyers at the exhibition and beyond," said Hassan Fahmi, Manazel’s chief executive. “Jordan is experiencing rapid population growth, and Manazel Amman provides affordable housing for residents," he added.

Last year Manazel announced it was considering developing a Dh3 billion tourism project between Abu Dhabi and Dubai.

The company is also looking to build a 70,000 sq metre Capital Health Care City hospital and property project in Abu Dhabi and is working on 860 new homes in a new phase of Al Reef villas.


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OMRAN PROPERTIES TO CHANGE SHAPE

OF THE SHARJAH SKYLINE


LONDON // A new UAE property venture plans to “transform Sharjah’s skyline" with a broad range of development projects, the first of which are set to be announced in the coming weeks.

The formation of Omran Properties – a joint venture between the Dubai-listed Emaar, the Abu Dhabi developer Eagle Hills and the Sharjah Investment and Development Authority (Shurooq) – was announced in January.

While the venture plans to launch property developments globally, the first round of projects will centre on retail and hospitality developments in Sharjah, says Marwan Al Sarkal, the chief executive of Shurooq.

“The intention is not only to make money, the intention is to transform Sharjah’s skyline. Whatever we’re going to develop is going to be unique," Mr Al Sarkal tells The National.

The first projects will involve shopping malls, hotels and resorts in Sharjah – with more details to be announced “in the coming weeks", he adds.

“Our focus is not only on Sharjah City," he says. “Omran is to develop cities in Sharjah like Khor Fakkan, Kalba, Dibba and the central region."

The venture will also consider developments in areas such as residential property, office towers, business parks and partnerships with the education sector, Mr Al Sarkal says. “All of the projects will have to be financially feasible."

Omran, which is headquartered in Sharjah, is 34 per cent owned by Shurooq, with Emaar and Eagle Hills each holding a 33 per cent stake.

Its formation comes at a time of falling property prices in Sharjah. The impact of a “bleak economic outlook" on investor sentiment is likely to keep the market subdued this year, Asteco said in February. Sharjah property sales prices and rental rates fell by 2 per cent each last year, the property consultancy said.

Sharjah’s property market has not opened up to foreign investors in the way neighbouring Dubai’s has.

Non-Arab nationals are not permitted to buy freehold properties, but can buy on a 100-year leasehold basis under new regulations introduced in 2014. But sales have been subdued, Asteco said, partly because of the wave of more affordable properties launching in Dubai.

Omran Properties is not initially planning any leasehold residential properties open to foreign investors, Mr Al Sarkal says.

He says Sharjah does not want to attract “speculators and flippers" into the property market, which would act to inflate property prices and potentially force existing residents to move.

“We are not keen to open Sharjah’s real estate market because it’s going to mainly affect the people that are living in Sharjah."

But Shurooq welcomes partnerships with foreign developers, Mr Al Sarkal adds.



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“The real estate market Sharjah has not opened very much to foreign developers. But foreign developers are welcomed by Shurooq to venture with Shurooq."


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EMAAR TO BUILD TOWER HIGHER THAN

BURJ KHALIFA AND NEW ‘MEGA-RETAIL

DISTRICT’ FOR EXPO 2020


The architect behind a new US$1 billion Dubai tower that will stand higher than Burj Khalifa says it will represent a nation like The Eiffel Tower.

The Paris landmark was built for the 1889 Paris Expo.

Now Dubai’s Emaar Properties is aiming to emulate that architectural impact as preparations get under way for Dubai’s own Expo 2020.

Emaar Properties will attempt to deliver the new Dubai Creek tower and a linked “mega-retail district” at the same time so that they are both open by the time Dubai’s Expo 2020 event begins .

More project details were revealed by the Emaar Properties chairman Mohamed Alabbar and the Spanish-Swiss architect Santiago Calatrava yesterday.

“There’s no doubt that the Eiffel Tower has inspired over 100 years,” said Mr Calatrava. “It represents a city, a whole nation. It still today is a monument. I feel so proud to be part of a team that aims to obtain a similar achievement.”

Mr Calatrava’s design was chosen by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, in February following an international competition between five of the world’s top practices.

Mr Alabbar said that the UAE had only 44 years of history compared to Paris, but believed that this as-yet-unnamed tower could serve as a similar landmark in the future.

Although the overall height of the tower, which will cost about $1bn to construct, was not revealed, Mr Alabbar said it would probably “be a notch taller” than Burj Khalifa – currently the world’s tallest tower but due to be surpassed by the proposed 1km-high Kingdom Tower in Jeddah in 2018.

The Dubai Creek tower will mainly serve as an architectural tower than a working building, but there will be between 18 and 20 upper floors used for a hotel with restaurants, function rooms, an interior garden space and an observation deck.

The tower is likely to be built under three packages, with one company handling the foundation, another building its concrete core and a third carrying out the fabrication of the steel cables, which will be among some of the longest ever used.

Structurally, the tower will have a concrete core and will be clad in glass and steel. An observation deck will offer unencumbered, 360-degree views of the city. Mr Calatrava said that it will also feature spinning platforms that can take guests outside of the deck into the tower’s void to offer more impressive views.

Work on foundation piling is likely to begin “in late June or early July”, Mr Alabbar said yesterday, with a view to the entire tower being ready in four years.



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The 6-square-km Dubai Creek Harbour project is being developed in a joint venture with Dubai Properties.

It features a 4.5km Creek boardwalk and will also house nine lifestyle districts, 22 hotels, a yacht club, marina and a harbour.

Mr Alabbar said that the new “mega-retail district” that will be linked to the tower is currently under the design phase, but should be announced within the next one to two months. When asked if Emaar’s ambition was to complete this element at the same time as the tower, he said: “We are pushing day and night. We would like to finish it together. It would make sense.”


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DUBAI CREEK TOWER CAN BECOME

LANDMARK FOR CITY, EMAAR CHAIRMAN

SAYS


The new tower being planned for the Dubai Creek has a solid business case, says the chairman of Emaar Properties.

The tower will be the centrepiece of the 6 square kilometres Dubai Creek Harbour district that will be more than double the size of its Downtown Dubai district, which has Burj Khalifa as its centrepiece.

“If you go to Downtown and Burj Khalifa, you can tell that the volume of traffic, activity, trade, tourism and business in general is almost to the rim, to the max," said Mohamed Alabbar.

“Downtown is the most prestigious thing and we will always keep it because that is what built our credibility. But it doesn’t mean we have to stop. We need more space. We are close to our last few buildings. This is a gift to us and we are going to look after it."

Mr Alabbar said that although people may question the need for another tower, flats in Paris with views of the Eiffel Tower, even with not especially good views, can attract premiums of 15 to 30 per cent.

“We’ve realised over time that many of our customers would like to have that view," he said.

The tower will sit in the middle of a development that will contain a 4.5-kilometre boardwalk, 11.16 million sq metres of retail space, 6.79 million sq metres of residential space, 22 hotels, 851,000 sq metres of commercial property and a yacht club and marina.

“We are in the real estate business. We have to do business at the same time and make some money for our shareholders. That’s the ultimate message," said Mr Alabbar. “But so much can be done with elegance, with beauty and with adding something very special to your society."

He said that the development of the creek, which is being done in conjunction with Dubai Properties, was unique because “it’s the first time that the city comes back to its soul".

“The creek is really at the root of the city and it’s time that we go back and pay respect to the core of this city of Dubai."

When asked on the sidelines how Emaar was performing in what has proved to be a difficult market for investors during the past 18 months, Mr Alabbar said that “cycles happen in all economies and all cities worldwide".

“If you ask me about my numbers, I don’t see any pullback. We are doing better than 2015.

“Other developers might not be doing so well, maybe they are not looking after their customers well, maybe they are not doing their marketing right, maybe their unit configuration is not right. To do well you have to go long term, you have to have a strong balance sheet, you have to believe in your customer and you have to believe in the market."



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He argued that Emaar’s continued growth was down to “good management".

“Honestly, we are managing much tighter than last year. The organisation is so much better. But within the next two months we will get better [again] because we are deploying new systems."

Emaar yesterday made a brief announcement to the Dubai Financial Market that its chief executive, Abdulla Lahej, has “discontinued his role" at the developer. His responsibilities are now being handled by the chief operating officer, Amit Jain.

Last week, the head of residential valuations for Cluttons in Dubai, Richard Paul, said the market for residential property was still 20 per cent below the peak achieved back in 2008.

He expected prices to drop by another 5 per cent in the emirate by the end of the year.


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ULTRA-RICH WANT TO BUY COMMERCIAL

PROPERTY: KNIGHT FRANK

MONDAY, 11 APRIL 2016

Volatility in residential real estate markets is pushing investors to other options, Knight Frank's Attitudes 2016 survey shows

The ultra-rich are capitalising on slowing global growth to buy hotels, office buildings and other commercial real estate, a new survey shows.

Findings from Knight Frank’s 2016 Attitudes Survey conducted in conjunction with intelligence consultancy Wealth-X, show that commercial real estate is expected to become an established component of the investment portfolios of the ultra-high net worth individuals (UHNWIs) from the Middle East and North Africa (Mena) region over the next decade.

“Despite the recent decline in oil prices and the slowdown in global trade and commercial volumes, UHNWIs are committed to the growth of businesses and the industrial, logistics and transport sectors over the next decade,” said Dana Salbak, Head of Mena Research at Knight Frank.

While 82 per cent of UHNWIs from the MENA region have invested in residential property over the past decade, only 53 per cent are expected to allocate funds to the asset class over the next decade.

Responses from Mena reveal a growth in allocation to offices from 41 per cent between 2005 & 2015 to 53 per cent between 2015 & 2025. The report also sees the emergence of warehousing and logistics as a key element in UHNWIs real estate portfolio over the next decade, with 32 per cent revealing they would invest in assets within the sector.

“While residential property was historically seen as a secure form of investment, the volatility of the asset class has made the commercial sector more appealing as its value extends beyond the ability to produce income,” said Salbak.

Where the money's going

In terms of location, total cross-border investment from Middle Eastern capital into commercial properties focused on the major global gateway cities of London, Paris, New York and Sydney.

“The availability of diverse investment products (such as real estate investment trusts) have made property more accessible to a wider range of investors, while the high level of market transparency and diverse expertise across these markets enables private investors to overcome their knowledge gaps,” Salbak added.

Source: Gulf News

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MORE CHEAP HOMES SELLING AS PRICES

DROP IN DUBAI


With a supply glut keeping property values down, affordable hotspots are seeing more of the action

Property values in Dubai have seen a significant decline over the past 18 months and appear set to soften further this year, going by first quarter data. However, agents say rates are now low enough for buyers to conclude transactions — particularly at the affordable end.

Prices of apartments and villas contracted 2-5 per cent in the first three months of this year, according to a survey by property consultancy Cavendish Maxwell. Apartment prices dropped 7 per cent, while villas fell 8 per cent compared to the same period in 2015.

More supply

Greater supply is largely responsible and may continue to impact sales this year. About 36,000 units will be added to Dubai’s inventory in 2016, of which 4,584 were delivered in the first quarter.

Nearly half (46 per cent) of the 60 Dubai real estate agents polled by Cavendish Maxwell expect apartment prices to drop by up to 5 per cent over the next quarter. Meanwhile, 39 per cent see a similar decline in villa values. But only 34 per cent expect apartment rentals to decline up to 5 per cent over the same period, and 41 per cent foresee villa rents dropping.

“Market sentiment has affected both buyers and sellers, who are waiting to see a slowdown in decline indicating that the market is stabilising,” explains Dima Isshak, Research Manager, Cavendish Maxwell. In terms of rents, market sentiment suggests that agents believe there may be a slow down on the decline experienced on rental rates during the first quarter of 2016, and that perhaps we are “over the worst”.

Market bottom

Others also hazard the view that the market has bottomed out. Price indices run by ValuStrat and ReidIn both showed a decrease of only about one percentage point in February. ValuStrat’s index posted no significant change over the previous five months. ReidIn’s February sales price indices feel 0.9 percentage points over the month before, or 10 per cent year on year.

“As far as the freehold villa market is concerned, the levelling off started in October last year where most of the locations saw no change in prices, and The Lakes and Jumeirah Islands saw less than 1 per cent dip,” Haider Tuaima, ValuStrat head of research told Gulf News last month. “For the past eight months, early bird investors have been seeking good properties in sought-after locations that provide them with attractive yields and/or capital appreciation at low entry points.”

John Stevens, Managing Director at Asteco, says price declines will continue at a moderate pace this year. “Rates in several developments have already declined sufficiently to encourage the conclusion of transactions.” Last year’s corrections have allowed the market to catch its breath and regain investor confidence in Dubai’s long-term prospects vis-a-vis other property hotspots.



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In terms of rental yields, Dubai averages just over 7 per cent, far more attractive than Hong Kong (2-3 per cent) and London (3-4 per cent). “Yields can be as high as 10 per cent for prestigious developments on the Palm Jumeirah, for example, with hotel-managed apartments at Dukes Dubai and Anantara representing a sound investment,” Stevens explains.

Isshak, too, cautions a long-term approach, particularly since the positive effects of Expo 2020 will likely only begin to impact the market towards the middle of 2017. “Sale prices may not rebound for the next 6-12 months,” she says, adding that off-plan buyers should look for sustainable communities with a good quality of life.

As with last year, there are more transactions in the affordable side of the market. Chestertons Mena data shows that nearly 220 transactions were recorded in first three months of this year for luxury properties in Downtown and Palm Jumeirah, while the number was up to 450 for International City and Discovery Gardens, says Chestertons UAE Country Manager Robin Teh. That echoes 2015’s transactions, where 2,000 sales were posted in affordable areas, versus 1,200 for luxury projects in Downtown and Palm Jumeirah.

Source: Gulf News

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DUBAI PARKS & RESORTS RAISES FUNDS

FOR SIX FLAGS THEME PARK


Dubai Parks & Resorts has raised almost Dh1 billion in debt financing to fund its planned Six Flags theme park.

The Dubai-listed theme park operator said it secured Dh993 million from Abu Dhabi Commercial Bank, Dubai Islamic Bank and Sharjah Islamic Bank.

The cash will fund part of its proposed Six Flags-branded theme park next to the three parks it plans to open off the Sheikh Zayed Road on the outskirts of the city.

Dubai Parks said it was seeking to raise a total of Dh2.67bn to build the 27-ride theme park, based on the Six Flags franchise in the US, which it said was expected to open by the end of 2019.

The theme park company said that the loan accounted for about 37 per cent of the total financing being raised.

The developer is building three theme parks next to the Abu Dhabi-Dubai motorway – Legoland Dubai, Motiongate Dubai and Bollywood Parks Dubai – all of them slated to open in October 2016.

But the company has always said that they form only the first phase of even more ambitious plans which are a key part of Dubai’s target of attracting 20 million tourists annually by the year 2020.

Meraas struck a deal two years ago with Texas-based Six Flags Entertainment to build a theme park at its 25 million square feet Jebel Ali complex.

The original plans for a Dh10bn park announced in November 2012 included five linked theme parks on the site.

Last month the company said it had approved plans for a share issue to help fund the remaining Dh1.68bn it needed to build the Six Flags park.

Dubai Parks said that company shareholders would be asked to vote on a special resolution to approve the proposed rights issue on Monday.

They will be asked to vote on the proposal to increase the share capital by 1.67 billion shares at an issue price of Dh1 per share. If passed, the board will then have a year to decide on the timing of the move.

“Dubai Parks and Resorts has a clear strategy to be the largest leisure and entertainment destination in the Middle East," said its chief executive Raed Kajoor Al Nuaimi. “The proposed Six Flags-branded theme park will strengthen the appeal of our destination for thrill-seekers of all ages."


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ABU DHABI IMPOSES MUNICIPALITY FEE

ON HOTEL STAYS


New fees on hotel stays in Abu Dhabi could raise hundreds of millions of dirhams in revenue for municipal authorities.

A new decree will impose a 4 per cent municipality fee on hotel bills and a Dh15 charge per night per room, according to a report in Al Ittihad. The fees will be collected by the Abu Dhabi Tourism and Culture Authority (TCA) and added to the government budget of the Department of Municipal Affairs.

Abu Dhabi hotels charge all guests and customers a city tax of 6 per cent and a 10 per cent service charge.

But hotel operators said they do not yet know whether the new fees would be applied to all customers or just guests.

“Once this is implemented, we expect facing some operational challenges while collecting the new fees from guests, but it will eventually be normal as guests will become more aware of it, like the case in Dubai when the Tourism Dirham was introduced," said Guy Hutchinson, the chief operating officer of hotel operator Rotana.

Last year, 4.1 million guests checked into Abu Dhabi’s hotels, staying a total of 12.24 million nights. That could have fetched the government Dh183.6 million based on the new Dh15 fee per room per night. The 4 per cent municipality fees charged on the total bill would raise an additional Dh264.8m based on last year’s hotel revenues.

Hotel guest numbers gained 18 per cent last year, compared with the year earlier.

TCA has not yet published tourism targets for this year.

“We do not believe this additional fees will have notable impact on hotel demand and will be absorbed by the market," said Rashid Aboobacker, the associate director at TRI Consulting, a Dubai management consultancy.

Abu Dhabi’s room rates fell in February along with average occupancy. The average occupancy rate was 77.6 per cent, down from 81.5 per cent a year earlier, according to Hotstats data from TRI Consulting. The average daily room rate was Dh157.95 in February this year, down from Dh217.20.

The declines were attributed to the absence of large trade fairs this year, such as the biennial International Defence Exhibition and Conference – Idex – held in February last year. The event at the Abu Dhabi National Exhibition Centre attracted 80,000 people.

“The exhibition was primarily responsible for the 51.2 per cent spike in profit per room," said a Hotstats report.

Dubai introduced a “tourism dirham" of between Dh7 for budget hotels and guesthouses and Dh20 for five-star hotels and luxury hotel apartments in 2014. The fee is charged per room per night.



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Dubai hotels also impose a 10 per cent service charge and 10 per cent municipality fees per room per night.

Hotels in Ras Al Khaimah also charge a Dh15 tourism fee per room per night and a 10 per cent service charge.


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DEMAND DROPS FOR ABU DHABI HIGH-

END RENTALS AS BUDGETS FALL


Abu Dhabi’s rental market is showing signs of fragmentation as softer demand for higher-priced areas contrasts with a shortage of more affordable homes.

According to Cluttons, cuts to housing allowances offered by companies in the emirate means there is a much smaller pool of potential tenants for high-end properties, leading to longer void periods.

The company said in its Abu Dhabi Spring 2016 property market outlook that housing budgets continue to hover at about the Dh100,000 to Dh150,000 mark – but average apartment rents start at Dh160,000 per year and average villa rents are Dh270,000.

CBRE’s latest Abu Dhabi Marketview offered similar findings, stating that although overall rents remained flat, cheaper units were subject to rental growth of 2 per cent during the first quarter of the year, offsetting a softening at the top end of the market.

“Lease rates in areas such as Corniche and Khalidiya remained high, with prime rentals for one-bedroom and two-bedroom units currently around Dh120,000 and Dh180,000 respectively," said Matthew Green, the UAE head of research and consulting for CBRE.

He said that there was a “continued shortage of affordable homes in the capital", meaning that rent levels at the lower end of the market would remain strong as more people seek out cheaper accommodation to mitigate the higher costs of living.

Cluttons said that some landlords had recognised the issue and were beginning either to lower rents or offer greater flexibility in payment terms, with some now accepting quarterly cheques.

It said that affordable submarkets such as Al Reef Villas and Hydra Village will remain resilient, with the former experiencing rent rises of 8.7 per cent and the latter rental increases by 26 per cent over the past 12 months.

Overall, though, it said rents to the end of the first quarter remained subdued, with apartment rental growth across the city slowing to 0.8 per cent year-on-year and villa rents declining by 1.4 per cent.

“The deflation in residential values reflects growing caution in the market, which is being compounded by low levels of demand," said Edward Carnegy, the head of Cluttons Abu Dhabi.

The listings website Dubizzle said there had been a steep rise in demand for emerging, inland communities in Abu Dhabi and Dubai, but said there had been a decline in demand for properties in older, established communities such as the Corniche and Tourist Club areas.

It said that rental prices in Al Reef increased by 9 per cent year-on-year, while sale prices were up by 4 per cent.

Despite this, Dubizzle’s product marketing manager, Ann Boothello, said Al Reef was “still one of the most affordable communities in which to buy, with a sale price per square foot at Dh860".

In Al Ghadeer, rents increased by 15 per cent year-on-year and sale prices by 3 per cent. Rents also increased by 10 per cent at Khalifa City A. Contrary to other reports, it said rents in the Corniche area dropped by 10 per cent and in the Tourist Club area by 13 per cent.



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“As we see real estate becoming more affordable in central communities, the price increase in less central and established areas indicates that the capital is more family-orientated and people are seeking larger spaces for less," Ms Boothello said.


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ABU DHABI DEVELOPER ALDAR TO BUILD

1,315 VILLAS ON YAS ISLAND


Abu Dhabi’s largest property developer has announced plans to build more than 1,000 villas on Yas Island.

Aldar Properties unveiled plans for Yas Acres, a Dh6 billion project of 1,315 new villas which it plans to build on the northern shores of Yas Island alongside a golf course, club house, parks and schools.

At a press conference yesterday in the build-up to Cityscape Abu Dhabi,Aldar said that the 811,108 square metre villa project would be aimed at expatriates and locals who were looking for villas in the Dh3 million to Dh5m price bracket.

“At the moment buyers in Abu Dhabi don’t have much choice when it comes to villas,” said Greg Fewer, Aldar’s chief financial officer. “They can either buy on Saadiyat where there is a very good product but the prices are very high, or they can buy in Al Reef, which is also a very good product but aimed at a more mass-market demographic. At the moment there isn’t anything in between and we believe there is a real demand for it.”

Aldar said that the villas would range between three-bedroom town houses which it planned to sell for Dh2.9m to huge palaces with undisclosed prices. It said that the average price for a three-bedroom town house worked out at about Dh1,100 per square foot – slightly lower than the Dh1,250 per sq ft at which Cluttons estimates current villa prices stand.

Aldar said it would fund the development from its own cash reserves and through off-plan sales. The company said that it would not start selling off- plan villas at Cityscape, but that it planned to hold a separate sales launch later in the year.

Yas Acres, which is scheduled to start on site almost immediately and is expected to complete at the end of 2019, will be Aldar’s largest and most ambitious project to be attempted since the heady days before the global financial crisis.

The Aldar chairman Abubaker Seddiq Al Khoori, said that he was confident enough to press ahead with such a large project despite the gloomy economic climate in Abu Dhabi caused by low oil prices and a swath of job losses and other cutbacks for three reasons.

“Despite falling oil prices, all five of the projects that we have launched so far have been very successful and have sold faster than we anticipated,” he said. “Aldar has had a very balanced strategy and has not rushed out and built too many projects or too many units. And thirdly there are still a lot of our projects due to be completed over the next two or three years which are government projects, and which are driving growth in the economy.”


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BLOOM PROPERTIES TO UNVEIL FAYA

PROJECT AT CITYSCAPE ABU DHABI


Bloom Properties is to unveil the fourth phase of its Bloom Gardens project at Cityscape Abu Dhabi.

The latest phase, named Faya, will contain 132 town houses made up of 28 clusters that each contain four units and four clusters containing five units.

The company said it is targeting UAE nationals looking to bulk buy at least three units, and that it would offer a payment plan with the schemes, with 60 per cent paid over the course of construction and the remaining 40 per cent on completion, which is due by the end of next year.

Bloom Gardens is a residential community near Khalifa Park in Abu Dhabi, where three previous phases containing a total of 325 villas have already been launched.

“Bloom is delighted to launch Faya in the well-established and mature Bloom Gardens community," said Sameh Muhtadi, the chief executive of parent com¬pany Bloom Holding.

“Faya will be developed to the highest standards in design, architecture and construction, while providing attractive long-term investment returns for UAE national investors."

A new community centre is also due to open at Bloom Gardens in the summer, the developer said. It will contain health clubs, saunas and steam rooms, a gym and swimming pools. There will also be a multi-purpose hall for holding events and a community mosque with a capacity to house up to 200 worshippers.

Bloom Holding is a subsidiary of Abu Dhabi-based National Holding.


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EMAAR AND RIXOS REPORTED TO BE

INVOLVED IN TURKISH THEME PARK TALKS


The Dubai developer Emaar Properties is said to be in talks with the Turkish hotel group Rixos to partner in a theme park project in Turkey, according to Turkish media reports.

Emaar did not confirm the talks or disclose details.

“Appropriate disclosures are made only subsequent to finalisation of any agreements," said an Emaar spokeswoman.

Rixos, which is financing the project in Antalya, was not immediately available for comments.

Work on the theme park, according to the engineering firms involved in the project, started in 2014 and is spread over 250,000 square metres.

Called Eko Temali Theme Park, it will have features such as a dolphinarium, water slides, a sea trek aquarium, an aquarium restaurant, wave pools and lazy rivers, according to Athens-based Marine Aquarium Technology, which manufactures and installs life support systems such as aquarium filtration.

The first phase of the 1.2 billion Turkish lira (Dh1.5bn) project is expected to open in May in Belek, Antalya, according to the Daily Sabah newspaper.

Rixos has a resort on the Palm Jumeirah and Rixos Bab Al Bahar in Ras Al Khaimah. It is expected to open the 414-room Rixos the Walk in Dubai Marina this year.


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ABU DHABI’S URBAN PLANNERS WORKING

ON WAYS TO RESTART STALLED REEM

ISLAND PROJECTS

TUESDAY, 12 APRIL 2016

Abu Dhabi’s Urban Planning Council is working on a plan to restart stalled property developments on Reem Island.

According to UPC officials, the planning body is looking at ways to encourage property developers to restart construction work on a handful of unfinished towers on the island that were hit by the global financial crisis.

“We are in the final stages of providing a recommendation for the way forward for these problems in Reem Island," said Mohamed Al Khadar, the UPC’s executive director for Urban Development and Estidama Sector, at the Cityscape property exhibition in Abu Dhabi yesterday. “What the recommendation is I cannot disclose to you right now, but we will present it to the leadership of the government and then they will give us the mandate to go ahead and do it. This is one of our priorities." he said.

“Reem Island is beautiful but it is been underestimated. This island can be easily rectified by different decisions, so we will be doing that exercise."

As the bottom fell out of the property market in late 2008 and prices plunged, investors walked away from their commitments and property finance dried up, leaving developers unable to continue with billions of dirhams worth of development plans.

Property experts predict that the UPC’s plans may be similar to the Tanmia initiative from the Dubai Land Department that it launched in 2011 and where the DLD acts as a mediator between the developers of stalled projects and new developers and investors interested in restarting them.

At the end of last year, DLD reported that it had helped to restart 51 stalled projects worth Dh12 billion since the initiative was launched four years earlier.

“Reem Island clearly needs something like this," said Craig Plumb, the head of research at JLL’s Dubai office. “However, the problem will be injecting the funding to get these towers finally built."

According to figures from JLL’s Cityscape presentation, the UPC is scaling back its 2030 master plan for the capital with the city’s projected population for that year revised downwards to 2.4 million from an expected 3.1 million people when the plan was first published.

Mr Al Khadar said that 27 projects and master plans were approved by the UPC in the emirate of Abu Dhabi in the final three months of last year, bringing the total number of approvals last year to 101.

This annual total accounted for a total floor area of 13.5 million square metres – 26 per cent more than in 2014.

Projects approved in the final quarter of last year included three Reem Island projects – the 185,000 square metre Reem Mall, 574 apartments in Najmat Towers and 408 apartments in Shams Meera.



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They also include the first phase of a new development on Al Fahid Island, located between Saadiyat and Yas islands on the capital’s Sheikh Khalifa Highway.

Mr Al Khadar said that the UPC had given approval to 59 projects in Abu Dhabi that were allowed to exhibit and to sell units to customers at Cityscape and nine which were allowed to exhibit but not currently to sell units.


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BLOOM HOLDING TO LAUNCH

AFFORDABLE HOUSING PROJECT NEAR ABU

DHABI AIRPORT


Bloom Holding plans to launch a huge affordable project of 5,000 homes close to Abu Dhabi International Airport.

The company has a 2.2 million square feet plot close to the airport, which it plans to develop into flats, villas and town houses, with the blocks of flats making up to 5,000 homes.

“Affordable housing is our next natural progression," said Sameh Muhtadi, the chief executive of Bloom Holding. “That’s where the demand is."

The project is currently being master planned and Mr Muhtadi said that he hoped to have approvals in place from Abu Dhabi Municipality and the Urban Planning Council in place to be able to launch the scheme next year, with a view to the first units being made available to lease by 2019.

Mr Muhtadi said that it was still too early to say how much it these units might fetch.

“But there is a sweet spot for what can be defined as affordable. We hope to target Dh800,000 for an apartment and we hope to offer units for rent for Dh75,000."

He said that Bloom is in talks with the municipality about potentially adding a pedestrian bridge from the site directly to the airport.

Bloom Holding is also planning to launch three new projects this year – two in Abu Dhabi and one in Dubai. All three will be ready to launch by the time Cityscape Global takes place in September.

One of these will be a high-rise project opposite Al Maryah Island containing a hotel and serviced apartments with 240 keys. This will contain units for sale and to lease aimed at corporate occupiers, Mr Muhtadi said, and will be branded as Bloom Residences.

The other one in Abu Dhabi is a large residential project being developed entirely for leasehold. It will contain three towers and will be built on a plot opposite Sheikh Zayed Grand Mosque.

“The plot of land we have will offer unparalleled views of Sheikh Zayed Bridge and the mosque at the same time. We think it’s going to be tremendous demand for that."

The project in Dubai, named Bloom Heights, will consist of two, 30-storey towers with about 600 apartments. It will be based in Jumeirah Village Circle.

A report published by Cluttons yesterday stressed the need for more affordable housing in Abu Dhabi, which is partly due to cuts to housing allowances being offered by corporates to workers.


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MASDAR MASTER PLANS FOR SUPER-

GREEN COMMUNITY GIVEN ABU DHABI

APPROVAL


Masdar has won planning consent to build thousands of apartments and villas at its super-green Masdar City community in Abu Dhabi.

The government-owned eco-developer said that it had been granted planning consent by the Abu Dhabi Urban Planning Council to build two new phases of its vast master plan close to Abu Dhabi International Airport.

At a press conference at Cityscape Abu Dhabi, Masdar officials said that the UPC had approved detailed master plans for a 637,000 square metres phase 2 of Masdar City, which will include a research and development cluster, 2,000 apartments and a Gems school as well as another 341,000 sq metres phase, which will include 1,000 homes.

Most of the new developments will be built by third-party developers with Mubadala-owned Masdar acting as a master developer.

Masdar said that it expected the new developments to be rated as “Estidama pearl level four" – a super-green rating in a sustainability ranking system set up by the UPC which has never before been reached by a development in the UAE.

At the moment only 5 per cent of the Norman Foster-designed Masdar City master plan has been completed, most of which includes the prestigious Masdar Institute, which specialises in researching renewable technology.

But Masdar said that about 35 per cent of the planned built-up area of the ambitious city would be completed over the coming five years as third party developers start to mobilise.

The US$15 billion to $18bn development, which was first unveiled in 2007 as the world’s first entirely self-sustaining, zero-carbon, zero-waste, car free city, was originally slated to be completed in 2016.

By the end of this year, Masdar was originally envisaged to be housing 40,000 residents and 50,000 workers in super-sustainable surroundings.

But the project was hit hard by the 2008 global financial crisis which effectively put a break on Masdar’s development and forced the developer to redesign the project along more commercial lines, to drop plans to make the development carbon neutral and to invite third party developers to build out large chunks of the city.

Masdar officials now describe the project as “low carbon" rather than “no carbon".

“Essentially what we are trying to do is to reduce the carbon footprint not just of buildings but of entire cities because 75 per cent of greenhouse gases are produced by urban areas," said Anthony Mallows, executive director of Masdar City.

“Low carbon development is among our targets. No developer is able to develop zero carbon because human beings, by our very nature, breathe out carbon."



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Earlier this week the Abu Dhabi-based developer Reportage Real Estate broke ground on the first major residential development in Masdar City, Leonardo Residences, a block of 170 apartments close to the Masdar Institute.

Masdar said that 93 per cent of the apartments in the block, which is targeting a minimum 3 Pearl Estidama rating, had been reserved.


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BOUYGUES TO BUILD PARIS TOWER BEING

FUNDED BY ADIA


Bouygues has won a €200 million (Dh840.5m) order to build a tower in the financial district of Paris that is being developed by the Abu Dhabi Investment Authority.

Linkcity Ile-de-France, the property development arm of a unit of Bouygues Construction, signed a contract to develop the Alto Tower at La Defense, Bouygues said.

The 150-metre tall tower was designed by IF Architectes and will comprise 38 floors of office space arranged in what the developer describes as an unusual flare shape.

It means the surface area of each floor will range from 700 square metres at the base to 1,500 sq metres at the top.

Arabian Gulf sovereign wealth funds have become prolific investors in both residential and commercial property in European cities such as Paris and London.

European commercial property investment jumped by a quarter last year to more than €238.5 billion, according to Knight Frank data.

The development will replace the Les Saisons office building and will also include shops, connecting the Ancre neighbourhood in Courbevoie with La Defense itself.

Detailed preliminary designs are expected to be completed this year, with site works starting in September.

The project is scheduled to be handed over in the first quarter of 2020.

Adia confirmed the award.


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EAGLE HILLS IN FIRST UAE PROJECT WITH

ADDRESS HOTEL-BRANDED RESORT IN

FUJAIRAH


The Abu Dhabi-based developer Eagle Hills is to undertake its first project in the UAE, an Address Hotel-branded resort and serviced apartments in Fujairah.

The company’s development manager, Mohammed Al Ridha, said at Cityscape Abu Dhabi on Tuesday that the resort will be built at Sharm in Fujairah, which is about 3 kilometres south of existing resorts at Al Aqah beach, and 21km south of Dibba Al Fujairah.

The project is being built on a 1.2-million square feet plot of land and will contain an Address Hotel with 196 rooms, including a presidential suite and family suites, 10 five-bed villas overlooking a hotel plaza and 177 serviced apartments – 102 two-bed, 60 three-bed and 12 four-bed units – spread over five low-rise blocks.

These will look out on to a 500 metre-long beach promenade, and there will be parking for 432 cars.

Eagle Hills declined to give a development value for the project or indicative sale prices of the units, stating that these would be revealed at a later date.

Mr Al Ridha said the serviced apartments would all either have “partial or full" sea views and will be managed by Emaar Hospitality Group. They will be available on a freehold basis only to Emiratis and other GCC investors.

“It’s all Address-branded. It’s all serviced. You can put it back into a rental pool and we will take good care of it," Mr Al Ridha said.

Grading of the site is due to begin in June, and it is expected that the main contract for the resort’s construction will begin in September or October. Eagle Hills is currently “in the process" of preparing the tender, he said.

“We have all of the authorities’ approval, it’s just a matter of fixing the prices and all of that. You will see things happening there very soon," Mr Al Ridha said, stating that the project should be ready for handover by mid-2019.

Jaidev Menezes, the corporate director for business development at Emaar Hospitality Group, said he did not believe there was an existing development in Fujairah that was comparable to Eagle Hills’ proposed scheme.

“In terms of infrastructure, in terms of the location and in terms of what they are trying to do, there’s nothing like this. There are a few other hotels that have announced and branded residences, but nothing in terms of the scale and quality is comparable."

He said that it was “only logical" for Emaar Hospitality to use the platform it had built with The Address brand in Dubai to roll out to other emirates, GCC states and overseas locations.



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According to a first-quarter 2016 Northern Emirates report published at the International Property Show in Dubai on Monday, demand for smaller units is growing in Fujairah. Although prices for bigger units fell back slightly during the quarter, one-bed apartments increased in price by 30 per cent, and currently cost between Dh25,000 and Dh35,000 per year to rent.


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MÖVENPICK PREPARES TO OPEN HOTEL IN

ABU DHABI


The Swiss hotel group Mövenpick is eyeing entry into Abu Dhabi as the capital grows its tourism offerings.

Demand for hotel rooms in Abu Dhabi outstripped supply in March, the research group STR Global said yesterday. Average occupancy levels stood at 83.3 per cent, a 4 per cent increase over the same period last year. However, the average room rate declined 4.9 per cent to Dh515.70, leading to a 1.1 per cent drop in the revenue per available room, a key measure of a hotel’s profitability, to Dh429.40.

Large trade fairs and exhibitions fuelled demand for hotel rooms last month, led by the four-day Integrated Offshore Commissioning course, and the week-long Abu Dhabi Aviation and Aerospace Week, which included the Abu Dhabi Air Expo and the Red Bull Air Race.

Mövenpick is currently in the final stages of signing a contract for a hotel in Abu Dhabi, according to Andreas Mattmüller, the chief operating officer at Mövenpick Hotels and Resorts for Middle East and South Asia.

“Entering a destination is a long-term decision and commitment to the destination does not depend on economic cycles," he said.

This year, it will open Mövenpick Hotel City Star Jeddah with 230 rooms and a third property in Doha with 136 rooms.

It plans to open two more properties in Dubai in the next two years. Mövenpick Hotel Apartments Downtown Dubai with 246 apartments is expected to open next year. The opening of the 251-room Mövenpick Hotel Dubai Media City has been pushed to 2018.

Mövenpick said it expects to add 15 properties in the Middle East by 2020. It currently operates 30 hotels in the Middle East. In the UAE, it operates six hotels, all of which are in Dubai.

As part of the strategy it is looking at projects in Muscat, Sohar and Salalah besides Abu Dhabi, Fujairah and Ras Al Khaimah, Mr Mattmüller said.

Dubai, which had around 78,184 hotel rooms at the end of November, according to STR Global, is expected to add more in the run-up to Expo 2020. Room rates have been dropping in the city as more inventory comes into the market.


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AFFORDABLE HOUSING REMAINS

LACKLUSTRE AT CITYSCAPE

WEDNESDAY, 13 APRIL 2016

Abu Dhabi: As local real estate developers launched new residential projects at Cityscape Abu Dhabi featuring high-end villas and town houses, affordable housing remained the elephant in the room, with limited supply in that market.

There is, however, growing demand for affordable housing both from individual investors and corporate clients especially in the oil and gas sector that are looking to cut their housing costs, according to Cluttons, a real estate consultancy.

“I suppose what’s telling is we’re actually seeing rental rates going up in the affordable residential developments because there is demand for them. We believe there is a gap in the market for more affordable products.

It’s certainly an avenue developers should look at because there will be demand for these products,” said Edward Carnegy, head of Cluttons Abu Dhabi.

Legal framework

Speaking to Gulf News during Cityscape, Carnegy said that there was also a need to strengthen the regulations and the legal framework from the government in order to boost the development of affordable housing.

“If we talk about financing, people have to be able to afford to buy [the housing] in the first place. I think a compromise situation could be public-private partnership, so the government may be injecting land into a development and a developer financing cost-effective housing,” he said.

From a developer’s perspective, affordable housing comes with a challenge of lower profitability compared to higher-end projects. However, Carnegy pointed that affordable housing also requires lower build cost, which means it was a matter of developers trying to find the right cost-to-profit equation.

Difficult segment

Sameh Muhtadi, chief executive officer of Bloom Properties, an Abu Dhabi-based developer, said, affordable housing was a “very difficult segment to cater for”.

“It’s a very difficult segment to contain construction costs especially with the land valuations as they are … It’s not as profitable as [the rest] of real estate, but the profit is in numbers — in scale, so you make up for the smaller margins in the scale,” he said.

The CEO believes that Bloom has found the right formula, however, with plans to launch more than 5,000 units in the affordable housing units for sale and lease by early 2019.

The development, which will be located close to Abu Dhabi International Airport, is still in the master-planning stage. Muhtadi said he was hoping the project’s location will help attract large corporations whose employees work at the airport.



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Sweet spot

“[Affordable housing], in our mind, is the one segment of the market that is least catered for and it has the highest demand. The sweet spot for what we would consider affordable would be Dh800,000 for a two-bedroom apartment to sell, and it will be Dh75,000 to rent,” Muhtadi said.

As per the Urban Planning Council’s regulations, every master plan must have a certain quota of residential units allocated to mid-market housing. For Mubadala, for example, which is the master developer behind Al Maryah Island, a component of the Island’s plan has been allocated to the mid-market segment.

However, the strategy on when and how to develop such housing has not been finalised, according to Saed Arar, associate director of Mubadala Real Estate.

The case is much the same with other developers that have approved plans for mid-market housing, but are yet to construct the units.

Cityscape Abu Dhabi runs until Thursday at Abu Dhabi National Exhibition Centre (Adnec), bringing together more than 90 exhibitors.

Source: Gulf News

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BILLION-DOLLAR LAUNCHES TAKE CENTRE

STAGE AT CITYSCAPE


Developers launch residential, retail, hospitality projects

Abu Dhabi: A number of residential, retail and hospitality developments were launched at the tenth edition of Cityscape Abu Dhabi, which kicked off in the capital on Tuesday, and runs until Thursday.

One of the largest projects showcased at the event was Aldar Properties’ Yas Acres, a residential and leisure development, featuring a total of 1,315 villas.

The Dh6 billion project is set for completion in the fourth quarter of 2019, and has already received strong response from investors at Cityscape, Aldar said.

“Our research and experience tells us that Yas Acres should satisfy the demand for a high quality villas product that is available for purchase by investors and owner occupiers. We will soon be announcing the commencement of sales, and look forward to keeping the market updated on our progress,” said Talal Al Dhiyebi, Aldar’s chief development officer.

Also participating at Cityscape was Eagle Hills, which launched The Address Fujairah Resort and Spa in partnership with The Address Hotel and Resorts. The mixed-use project comprises 197 residential units and 20 villas.

Macy’s department store

Meanwhile, Mubadala Development Company unveiled the expansion of their projects on Al Maryah Island. These include Abu Dhabi’s first Four Seasons Hotel, which will open in May this year.

Mubadala also updated investors on developments at Al Maryah Central, a mall with 2.3 million square foot of retail space that is scheduled to open in 2018. The mall will house the first international Macy’s department store and a Bloomingdale’s store.

For those looking to invest outside the UAE, Trafalgar Properties highlighted its project, Green Lane, which is freehold land for sale in Liverpool, UK.

Source: Gulf News

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DUBAI DEVELOPER TAKES FREEHOLD OUT

OF CORE AREAS


Wasl Properties lines up projects in emerging locations of the city

Dubai: For wasl Asset Management Group, launching freehold projects does not mean sticking to the tried and trusted locations in the city. By placing its launches in as yet untapped Nad Al Hammar and in Jebel Ali (spanning 20 million square metres), the Dubai Government’s asset management arm favours the untested over the familiar.

And there are more locations it is homing in on, such as the one in Al Kifaf near World Trade Centre Roundabout and behind the Etisalat tower and close to Zabeel Park. Phase 1 will have four buildings and then will be expanded to include more residential and office buildings, a convention centre (makes commercial sense given the closeness to World Trade Centre), a shopping strip and hotels.

“In any freehold project we launch, wasl properties, a subsidiary of wasl Asset Management Group, retains a certain component that will go into our leasing portfolio,” said Hesham Abdullah Al Qasim (left), CEO of wasl Asset Management Group. “It also sends out a message to the rest of the investors about the level of confidence we have in our own projects from a return on investment perspective. We are not launching to sell and make a full exit.”

Pricing indexes But won’t going for less developed areas of the city put a clamp on the kind of pricing that wasl properties as the developer can command? Al Qasim reckons that is not how the company’s business model works: “We follow a lot of pricing indexes, both developed internally and from external sources, before arriving at the launch prices. We go by what the market at a particular location can reasonably expect.

“It’s what we have done with our leasing portfolio — and that’s three times what we build under freehold each year — and that stretches across the entire city. This includes highly developed areas such as Jumeirah and Karama.

“Wherever we see that general pricing of rentals in a particular neighbourhood is starting to get too high, we build new capacity there to stabilise asking rates.” (This is the strategy the developer has deployed with its “dar wasl” project on Al Wasl Road, where the rents on the villas and apartments are going slightly lower — about 5 per cent — than the prevailing rates. According to Al Qasim, from the 2014 peaks, villa rents on Jumeirah have dropped and could take another year for them to balance out.)

Jebel Ali The developer’s upcoming freehold projects, particularly wasl Gate in Jebel Ali, will get more expansive. The Jebel Ali location will go in for multiple property categories, including offices. “In the first phase, we will be selling town houses — but when the market is right,” the CEO said. “If we don’t sell, we can always lease.

“Leasehold will always be part of the company’s DNA — as such, there’s a lot that other developers are doing with freehold. But leasehold options are what a majority of residents still want and what the city needs.”

Being a government-owned entity might mean that for wasl it is not too much of a stress to expand the land bank. But the company’s fortunes are still dictated by the tides of market movements.



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Market economy “It was in 2007 that we launched with a portfolio of 7,000 units and now that’s gone up to 35,000,” said Al Qasim. “During the worst of the crisis years we were still building and delivering mid-income leased properties in Muhaisnah. And yet we had no problem in leasing those.

“More recently, we had people queuing from 4am when we opened leases for another project in Muhaisnah, wasl Oasis II. Queues for rental projects are unheard of in Dubai — but we saw that happen.

“A market economy will always have a high beat and a low beat — but something in the market will always force you to do something.”

Factbox: More than the sum of its parts * Beyond its leasehold and freehold interests, wasl Properties holds a portfolio of some of the best hotel addresses in town. And two golf courses. Its hotel interests include the Le Meridien, Hyatt and Dusit Thani properties. In all, there are 14 hotels together accounting for 4,000 plus rooms. The two golfing related assets are the Dubai Creek Golf & Yacht Club and the Emirates Golf Club.

* Even with such a sizeable development portfolio, wasl Properties will not consider investing in a construction firm or set up its own facilities management arm. “That’s hardly our core competence,” said Hesham Abdullah Al Qasim. “It’s one of the easiest ways to lose focus when one takes on too many interests outside of the core focus.”

Source: Gulf News

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SAADIYAT LAGOONS: NEW ABU DHABI

DISTRICT SET TO HOME 29,000 RESIDENTS


The Saadiyat Lagoons, the largest district on Abu Dhabi’s luxury Saadiyat Island, has been launched by The Tourism Development & Investment Company (TDIC).

“The Lagoons District is a premium residential community which is expected to become home to 29,000 residents across more than 4,000 residential units," TDIC said in a statement following the unveiling at Cityscape Abu Dhabi 2016.

It said the 6 million square-metre, mixed-use development will feature contemporary townhouses, villas and apartments that offer access to neighbourhood shops, F&B outlets, children’s play areas, mosques and leisure facilities such as a state-of-the-art equestrian centre.

The Lagoons District will be developed in phases with the first phase including 820 townhouses set in a gated community. The townhouses will make up 236 two-bedroom units and 584 three-bedroom units featuring a contemporary style. Out of the 820 townhouses, only 246 units will be made available for sale after Cityscape Abu Dhabi.

TDIC said the district has been designed “to encourage active lifestyles", with walking and cycling paths located throughout.


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THE REAL ESTATE LAW TO GIVE BOOST TO

ABU DHABI’S PROPERTY SECTOR


Al Forsan Holdings completes Al Forsan Village near Khalifa City

Abu Dhabi: The new property law introduced earlier this year in Abu Dhabi would give boost to property sector and gives more confidence for people to buy a villa or an apartment, an executive at Al Forsan Real Estate company told Gulf New at Abu Dhabi Cityscape.

“The new law gives consumer better confidence specially for the off plan projects. It guarantees that the developer would complete the project regardless of his financial condition,” said Rashid Al Qubaisi, General Manager of Al Forsan International Sports Resort, and spokesperson for Al Forsan Real Estate Management.

The new Real Estate Law came into effect at the beginning of this year. It states that a developer will now not be allowed to sell units off-plan unless it proves that it owns a real estate right over the project land and that it has opened an escrow account for the development.

“As a developer, we are always with the regulations and follow the rules,” Al Qubaisi said, adding that the company’s Al Forsan Village project near Khalifa City is being “well received by investors”.

“Our lease-to-own offer has been well received by the investors and they are looking at these villas for both personal use and investment purposes. A villa at the Al Forsan Village could be purchased and owned for as low as Dh300,000 per annum,” he said.

The project with 385 villas and 440 apartments was completed last year. A five-star hotel would be constructed in the fourth quarter of this year.

He said the company, an arm of Al Forsan Holding develops mixed-use communities that support active lifestyle through the integration of world class sporting facilities.

The company did not disclose the total investment involved in the project.

Source: Gulf News

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EMIRATI BUYERS TARGETED IN AL FORSAN

RENT-TO-BUY SCHEME IN ABU DHABI


Al Forsan, the Abu Dhabi-based sports resort and housing complex, has come up with a “rent-to-buy" offer targeting Emiratis.

The government-owned developer said at Cityscape Abu Dhabi yesterday that it was offering rent-to-buy as an option for 50 of the 385 villas and town houses it has completed in Khalifa City A, on the outskirts of the capital.

Under the terms of the deal, Emirati buyers will be able to pay a premium on their rent for five years, which can later be used as a deposit on a mortgage.

This means that for a Dh4.9 million four-bedroom town house, which would normally rent for Dh210,000 a year, under a rent-to-buy deal, a buyer would pay a total of Dh300,000 for five years.

At the end of the five years, Al Forsan would then give the buyer back their Dh450,000 overpayment plus a credit of another Dh1.05 million – enough cash to pay for the 20 per cent deposit required by banks to raise a mortgage.

Although construction on Al Forsan Village started back in 2008, it was not until the start of this year that the first residents moved into the development, which also has 440 apartments.

Al Forsan declined to say how many of the villas and apartments it had sold so far, and how many were leased. But it said that during Cityscape so far it had received bookings from 12 buyers.

Al Forsan denied that it was offering rent-to-buy as a response to the current softening Abu Dhabi market.

“Our market is local and we’re pretty sure that the low oil price will not affect buying ability," said Rashed Al Qubaisi, the general manager of Al Forsan International Sports Resort and spokesman for Al Forsan Real Estate Management. Brokers do not expect more developers to start offering similar schemes this time around.

“Rent-to-own is really a very poor deal for developers," said Ben Crompton, the managing partner of Crompton Partners. “It is generally a sign that the developer hasn’t been able to sell off-plan. It’s generally a last resort because developers prefer to sell off-plan if they can and get that cash up front."


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ABU DHABI PROPERTY CONSULTANTS TO

BE QUALIFIED BY END OF 2016 AS ‘MOST

BROKERS ARE NOT BROKERS’


All of Abu Dhabi’s real estate consultants should be properly trained and qualified by the end of this year following the introduction of the new real estate law.

Abdullah Al Bloushi, the executive director of land and property management at the Department of Municipal Affairs, said that training courses for brokers – which feature an exam at the end that has to be passed – had already begun.

Speaking to The National at Cityscape Abu Dhabi, Mr Al Bloushi said that the qualifications were introduced in a bid to improve standards.

“Most of the brokers right now, they are not brokers. They are working as a broker but they don’t have the minimum requirement to be a broker. In the UK or Australia, you have to have a degree or a qualification."

The courses, which are being provided by Abu Dhabi Vocational Education and Training Institute, are being introduced gradually, with pass rates expected to increase throughout 2016.

“There was a grace period, but by the end of this year all of them should have the training," he said. “For anyone to renew the licence, he will have to get through it."

He said that the law was created after benchmarking best practice in countries including Singapore, Australia, Hong Kong, the UK and Dubai.

‘We did a gap analysis on our old laws, and we found there was some gap. That’s why we introduced these new laws regarding the escrow account (where funding is ring-fenced for a specific project and only accessed once 20 per cent of the work is complete), the licensing of the professionals, all of these things. If we don’t have these laws, that means there is something wrong."

A YouGov survey published on Tuesday found that despite the law already being a few months old, some 32 per cent of brokers in Abu Dhabi still had no awareness of its existence.

“Obviously, that’s a little bit concerning, because there’s a gap in communications there," said Richard Jolley, the head of property listings at the classifieds portal Dubizzle.

He added that although pro¬perty laws have been in place in Dubai for many years, there were still issues with enforcement.

David Dudley, head of the property consultancy JLL’s Abu Dhabi office, said that the new real estate law had been generally welcomed by the emirate’s property sector.

“There were gaps in the system that needed to be filled. These laws put in place those missing components. They’ve been talked about for eight years now so there were no surprises," he said.



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However, he added that there were concerns that the extra regulatory hurdles may compound the problems being experienced in Abu Dhabi’s market over the lack of new supply. JLL’s new Abu Dhabi Market Report said the amount of new supply coming onto the market was at a 10-year low – just 719 units were completed in the first quarter of 2016.

“I’m not that concerned about reduced supply in a period of weak demand. My concern is when the market rebounds and demand growth increases, we need an adequate supply to keep rents competitive."

Mr Al Bloushi said that the law would be evaluated at the end of 2016 after receiving feedback from stakeholders, including brokers, developers and banks.

“If we’ve found there is more restriction, for example, we can make it easier in terms of restrictions and requirements. We can fine-tune things, according to the need," he said.


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AL REEF DOWNTOWN OFFERS HIGHEST

YIELDS IN ABU DHABI


Al Reef Downtown and the Al Muneera areas of Abu Dhabi offer the highest yields — of around 9 per cent — in Abu Dhabi right now.

A standard two-bedroom apartment in Al Reef Downtown now rents for Dh110,000, while on Al Reem Island it will be Dh145,000. Al Bandar remains one of the most expensive locations — a two-bedroom apartment rents for Dh195,000.

On average, property investors can still aim for fair-to-middling yields on their property purchases in Abu Dhabi, even though nothing much changed in value and rental terms during Q1-16, according to an update from Chestertons, the consultancy.

Average yields in the city could be in the range of 6 per cent, the agency adds.

“It’s been an extremely quiet first quarter in terms of major announcements following a swathe of launches in H2 2015, but we are confident that any further launch announcements will be positively absorbed into the market,” said Declan McNaughton Managing Director UAE, Chestertons MENA. “Quality apartments proved to be the preferred choice of investors.”

With villas, rentals for entry level or lower range leases on three- bedroom villas are from Dh110,000 and climbing to Dh150,000 for a four-bedroom. Leases on an average three-bedroom villa in Al Reef would be Dh153,000, Dh195,000 in Al Raha Gardens, and Dh340,000 on Saadiyat Island.

“With supply failing to match current levels of demand, this has given landlords an opportunity to cautiously raise annual rental rates, although we are seeing a tempered approach where the increases are marginal,” said McNaughton.

“Moving forward, we believe the market will soften further exacerbated by uncertain economic conditions, and is fast approaching a period of consolidation.”

Source: Gulf News

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DUBAI’S EMAAR PROPERTIES TO

REORGANISE INDIA UNIT THROUGH

DEMERGER


Mumbai // Emaar Properties is ending its joint venture with India’s MGF, through which it built the athletes’ village for the Commonwealth Games in New Delhi, a project that was plagued by controversy.

Emaar said that it agreed to the demerger of Emaar MGF “in order to lend greater focus on its Indian operations and for the purpose of developing the pot¬ential for further growth and expansion of the business".

In a statement to the Dubai Fin¬ancial Market it said the “reorganisation would enable Emaar to implement focused strategy for its real estate business in India and will allow the business to undertake future expansion strategies".

“The demerger does not have any financial impact on the company," an Emaar spokesperson said. “We will announce more details on it in due course."

Emaar MGF has completed residential projects in Gurgaon and Chennai and had a number of housing developments planned for cities including Hyder¬abad and Jaipur, as well as commercial and retail projects in Gurgaon. It is not clear how the projects will be divided between the two companies.

“The demerger, in our opinion, would result in splitting of the assets – including the land bank, current developments, guarantees and advances and liabilities," Naeem Brokerage wrote in a research note. It said that Emaar MGF has a land bank of 30 million square metres and more than 11,000 units either under development or to be developed.

“Apart from the land bank and projects under development, Emaar’s exposure to Emaar MGF includes loans to associates amounting to Dh2.7 billion, while investments in associates amounted to Dh2.1bn," according to Naeem.

The joint venture has been operat¬ing in India since February 2005. It was set up by Emaar and the Indian property tycoon Shravan Gupta’s MGF, as the Dubai company looked to diversify outside of the UAE.

But Emaar has faced a host of challenges with its joint venture in India. It was caught up in con¬tro¬versy surrounding the development of the 2010 Commonwealth Games village in New Delhi.

Emaar MGF was blamed by the government for alleged poor quality construction work and delays, resulting in a legal dispute with the Delhi Development Authority. The company also struggled with plans to launch an initial public offering on the Bombay Stock Exchange. It scrapped a number of IPO attempts because of weak market sentiment and regulatory hurdles.

In June 2013, India’s government claimed that Emaar MGF had violated rules by making investments of 86 billion rupees (Dh4.74bn) in farmland using foreign funds.

MGF could not be reached for comment on the demerger.



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Abhimanyu Sofat, a co-founder of AdviseSure, an investment advisory company in India, said that he was not surprised to hear of the demerger, adding that possible factors could include the failure of the company to launch its IPO and the current subdued state of India’s real estate market.

It is a “challenging job" for foreign companies to invest in India’s real estate market, he added.

Naeem Brokerage said that for Emaar “from a valuation perspective, the move could turn out to be a positive in the longer run, given the legal and regulatory headwinds faced" by the joint venture.

“The demerger could also signal a change in strategy, possibly resulting in greater focus towards its India operations," it said.

The Economic Times, an Indian business newspaper, quoted an unnamed source familiar with the matter as saying: “Shravan Gupta has decided to move out India. Gupta is no longer keen to actively participate in the management of the JV that was [a] key issue for separation."


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THE DH143M ENGLISH PILE WITH TWO

HOMES BUILT ON A WORLD-FAMOUS GOLF

COURSE

THURSDAY, 14 APRIL 2016

Alongside the local developers showing off projects at this year’s Cityscape Abu Dhabi, brokers were also offering a myriad of international opportunities - from studio apartments in Vietnam and Cambodia through to luxury holiday homes in the United States.

One of the most eye-catching, though, was a £27.5m (Dh143m) pile overlooking the famous Wentworth Club on the outskirts of London, in the village of Virginia Water just seven miles from Heathrow Airport.

West Drive is a plot of land containing not one, but two freehold residences in substantial grounds with direct access onto the West Course — one of Wentworth’s three championship golf courses and one of the top 100 courses in the world, according to Golf Monthly.

The Wentworth Estate was originally a seat of aristocracy, but in the 1920s was transformed by local builder WG Tarrant into an estate for luxury properties, with mansions built onto plots containing a minimum of one acre (4,000 square metres) of land.

Currently, the main property at West Drive is Chelsea House — a 9,940 sq ft home set in 2.25 acres of grounds that was purpose-built in 2008.

It is a south-facing property spread over four floors, with the main ground floor area containing a reception room running the full length of the property, an entrance hall, a kitchen/family room, a study and a dining room.

A lower ground floor has a pool, gym, games room, cinema, playroom and staff quarters, while the upper floors contain five bedrooms, including a master bedroom with two bathrooms and two dressing rooms — one of which is linked via a spiral staircase with a huge walk-in wardrobe taking up almost half of the second floor.

It is being offered alongside Cawsand Place, which is one of the few remaining homes built by Tarrant on the Wentworth Estate. It stands at 5,500 sq ft with an adjoining pool, but has planning consent to be demolished and replaced with a 22,500 sq ft mansion on 3.9 acres of land with an adjoining security building.

Interestingly, for an overseas investor, the two properties are owned via a pair of offshore companies registered in the Isle of Man, which effectively means they are not liable for Stamp Duty Land Tax — a UK property tax that was recently increased to 12 per cent for homes worth over £1.5m, or 15 per cent for any additional homes owned.

Q&A

Nicholas Spencer, senior sales manager at Henry Wiltshire International, tells Michael Fahy more about the Dh143m West Drive:

Why is the Cawsand property ripe for demolition?



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Cawsand is a lovely, lovely structure but it’s simply not practical for modern life. It was last refurbished in the 1980s. It’s sitting there, waiting for somebody with the wallet and the willing, frankly, to do it justice.

I’ve heard of Wentworth. Why is that?

It’s the birthplace of the Ryder Cup and the BMWPGA Championship. It was recently bought by Reignwood Group – a Chinese conglomerate that is looking to reposition it as the number one golf club in the UK and among the top ten globally.

What are the neighbours like?

On one side is a pair of Gulf royals, and on the other is a Russian oligarch. Even among heavy hitters, these are heavy with a capital H. The whole estate is fenced, you have mature private trees and shrubs. Privacy is not even bothered to be mentioned. It’s assured. The whole premise of Wentworth Mansions when it was created was privacy and space.

And how about the local amenities?

Although Virginia Water is outside London, it is seven miles from Heathrow. It is six miles from Fairoaks, which is a private airport. You have some very good schools nearby (Eton College, Sunningdale, St George’s, St Mary’s Ascot and the American School in Surrey). You have the Royal Holloway, which is one of the premier research universities in the world. There’s a railway station five minutes away. It is 45 minutes from central London. And celebrity chef Heston Blumenthal’s restaurant, The Fat Duck, is 19 miles away.


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HILL INTERNATIONAL TO OVERSEE RIXOS

SAADIYAT CONSTRUCTION IN ABU DHABI


Hill International has landed a two-year contract to oversee construction of the new Rixos Saadiyat Island Hotel in Abu Dhabi.

The company has a 65 per cent stake in a joint venture with EHAF Consulting Engineers that will provide design and construction supervision for the five-star, 374-key hotel.

Its contract is worth Dh13.8 million.

Mohammed Al Rais, the regional president for Hill’s project management group, said: “This five-star hotel will be an important tourist attraction on fast-growing Saadiyat Island."

The award is the second major hospitality contract picked up by Hill in the Middle East in the past two weeks. The company also recently announced that it would help to deliver a new Marriott Hotel within the diplomatic quarter of Saudi Arabia’s capital, Riyadh, under a two-year, US$2.7m deal. The 38,000 square metre hotel will have a conference centre, ballroom, 80 hotel rooms and 140 serviced apartments.

A CBRE report for this year’s first quarter stated that occupancy rates in Abu Dhabi hotels dropped by 2 per cent to 75.7 per cent. This was despite a 9 per cent increase in passenger growth through Abu Dhabi International Airport. Average room rates also fell, leading to a 20 per cent year-on-year decline in revenue per available room – to Dh375 per room per night, from Dh500 in February last year.

“The drop in performance was mainly attributed to growth in room supply, which has heightened competition," said Matthew Green, CBRE’s UAE head of research and consultancy.


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NEW 3% MUNICIPALITY FEE ON ABU DHABI

EXPAT RENTALS COULD GIVE

GOVERNMENT DH612M BOOST


The new municipality charge being levied against rental contracts in Abu Dhabi is likely to boost government revenue by about Dh612 million a year, according to National Bank of Abu Dhabi.

The fee, which will be added as a monthly charge to utility bills, has been introduced as another method for generating revenue to help plug the emirate’s budget deficit, according to a note from the bank.

NBAD’s economists based their figure on the forecast that Abu Dhabi would have 255,000 units on the market by the end of 2016, that they would attract an average rent of Dh100,000 per year, and that 80 per cent would be occupied.

“It is evident that the government is looking for recurring and sustainable revenue streams that will continue to increase steadily over time," it said in its note. “It seems likely that more such measures will be implemented, across various aspects of the economy, which in aggregate will deliver – in our opinion – not just meaningful but substantial incremental and diversified revenue for the government."

A new charge on hotel stays has also been introduced.

David Dudley, the head of the property consultancy JLL’s Abu Dhabi office, said that the property market was currently in a “fairly fragile" stage of its cycle.

“Over the past few years, there has been various ways in which the cost of living has increased – increases to rents, to the cost of goods and the reduction of fuel subsidies.

“In the current environment of low oil prices, the government needs to reclaim more money to subsidise municipal costs, so I can understand why they are thinking about it. But adding further to the cost of living could have a detrimental affect on demand," he said.

D M, 28, a French national who has lived in Abu Dhabi for two years, said: “Most expats did not receive any pay increase this year, and we are all already subject to a rent increase of at least 5 per cent every year.

“This will directly impact my savings and my quality of living, which are the two main reasons why I decided to move to Abu Dhabi."

The city’s developers shrugged off any potentially negative impact to investment sentiment. A spokesman for Aldar said that it was unlikely to affect its operations, stating that the charge was emirate-wide, and is in line with costs already imposed in Dubai.

“It’s a marginal cost, and I think people understand that it’s not going to make a difference if you’re renting something for Dh200,000 or Dh250,000."



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Sameh Muhtadi, the chief executive of Bloom Holding, agreed. He said it may have a slight impact on tenants, but many of its schemes – including its new affordable housing project planned near Abu Dhabi airport – were on offer only to UAE nationals who are exempt from the charge.

“And as a UAE company, if we’re leasing out to UAE nationals, it’s not going to affect us either."

Anthony Mallows, the executive director of the Masdar City project, argued that the charge was a sign that Abu Dhabi’s property market is maturing.

“It’s an indication that the regulatory environment is maturing around real estate."

He said that when increased regulation and zoning has been introduced in US markets, for example, there is initial negativity because of a fear of increased costs, but “good zoning actually increases property values and maintains them".


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HIGH-END VILLAS IN DUBAI GET A FIRST

QUARTER LIFT

FRIDAY, 15 APRIL 2016

Dubai: Signs of selective gains are starting to show up in Dubai’s property market — for the first time in several quarters, sales of Dh10 million and plus villas are seeing a marked improvement. Their sales nearly “doubled” in the first three months compared to the quarter previous, according to first quarter 2016 data from ValuStrat.

In fact, “their share of overall villa registrations increased from 5.7 per cent in the last quarter to 11.1 per cent now,” said Haider Tuaima, Research Manager. The spike may have had to do several off-plan villa launches that happened in recent weeks and finding favour with investors. Much of the 2016 supply will come from projects carried over from last year. The off-plan residential projects launched in the first quarter of 2016 should add more than 2,000 units to the residential base in the years up to 2021.

Long-term capital appreciation

After a relative “stable” nine months relative to pricing, ValuStrat research reckons that more end users are “seeking to get on the property ladder, anticipating long term capital appreciation while saving on monthly rental expenditure. “Dubai’s apartment market has shown a slight quarterly improvement in values, up 0.1 per cent while the villa market saw values marginally decline by 0.2 per cent,” it adds. “The median apartment value in March was Dh1,319 per square foot and for villas it was Dh1,361 per square foot.”

Source: Gulf News

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FIRST HOTEL AT EAGLE HILLS’ SARAYA

AQABA PROJECT IN JORDAN TO OPEN

EARLY NEXT YEAR


The Abu Dhabi developer Eagle Hills is to open the first of four hotels in its US$1.6 billion (Dh5.9bn) Saraya Aqaba project by the first quarter of next year.

The chief executive of Eagle Hills Jordan, Alaa Batayneh, said that the Luxury Collection by Starwood would be the first of the site’s four hotels to open during a phased completion of the project, which should be entirely built by mid-2018.

Mr Batayneh said Eagle Hills has been looking to speed up work on Saraya Aqaba after buying out the project’s previous developer, a public-private consortium, early last year.

Saraya Aqaba has faced more than a decade of delays and all but 60 of its investors opted to take refunds when they were offered.

“People got sick of ‘next, year, next year’," Mr Batayneh said.

He said Eagle Hills has sought “to build credibility again". A 60,000-square-metre lagoon, which is to add 1.5 kilometres to Jordan’s 26km of shoreline, is to be completed by the end of the year, a new sales centre and show apartments have been built and 92 units have been brought forward for sale.

Once complete, Saraya Aqaba is to be a gated community with four premium hotels – two operated by Starwood and two by Jumeirah Group – and 866 homes. The 640,000sq m site is also to house a 2,000-capacity conference centre, a water park, and a yacht club. All structures on the site, which are being built by a CCC, Arabtec and Drake & Scull joint venture, are already complete.

In total, Eagle Hills is working on four schemes in Jordan, and the value of its live portfolio is $2.6bn (Dh9.55bn).

In Aqaba it is also building 449 units at the Al Raha project, which is to eventually form part of a huge new waterfront community on the site of the city’s old port. The master plan, which includes a cruise liner terminal, is being reworked to reduce its vertical scale while the developer waits for the government to move the port’s container-terminal and gas-storage operations to a new port 20km further south. Eagle Hils expects to take delivery of a 300,000 sq m plot for the first phase next year.

Meanwhile, in Amman it is nearing completion of two other Starwood-led projects. A $350 million, St Regis complex with a 220-key hotel and 79 branded residences is due to be complete in the second half of next year, and a $200m, 37-storey tower in the new Abdali district containing a W Hotel, offices and 40 luxury apartments is expected to be ready in the first quarter of 2017.



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Despite political unrest in neighbouring countries, Jordan’s real estate market has continued to perform well. Last year’s census showed that the country’s population had grown by 87 per cent in a decade – to 9.5 million, from 5.1 milliob in 2004. A Q4 2015 report by Asteco said that residential prices had increased by 3 per cent year on year in Amman, and that Aqaba had witnessed a revival in interest, especially from people looking for second homes.


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DUBAI FINANCIAL MARKET TO LEAVE THE

ONLY HOME IT HAS EVER KNOWN


The Dubai Financial Market, the emirate’s main stock exchange, is to construct a new high-tech headquarters in Business Bay, ending its 16-year presence in the historic World Trade Centre.

DFM is to seek tenders for the multimillion dollar building on land that has been given to it by the government-owned developer Dubai Properties, valued at Dh231 million, in a move that marks a significant southward shift in the financial centre of gravity in Dubai.

Essa Kazim, DFM’s chairman, told The National: “It is a very good site, looking over Sheikh Zayed Road by the entry to Business Bay. It’s very close to the Dubai International Financial Centre and at the heart of the new Dubai. It will be a custom-made building that can accommodate our own and the brokers’ requirements, and will have a significant data-recovery capability."

Designers and architects will be asked to submit plans for the new project, which should be completed in three to four years, he said. DFM has been considering a move to a new HQ for some time, weighing the attractions of Business Bay or a site within DIFC precincts. The quality of the Business Bay site, and issues of regulation, swung the decisions in its favour.

DFM is regulated by the federal Securities and Commodities Authority, while DIFC entities fall under the Dubai Financial Services Authority.

The market will move out of the 38-year-old World Trade Centre, where it has been since it was founded in 2000, with its characteristic oak-panelled trading floor. Mr Kazim said he was considering whether to include a physical trading floor in the new design. “Even in these days of sophisticated financial technology, a trading floor is good for marketing and ceremonial purposes. But we will see what the brokers want. Their business requirements are very important."

It is too early to say what will happen to the trade centre’s current premises. The tower, which houses big corporate and financial tenants as well as DFM, is the centrepiece of the expanding Dubai International Convention Centre.

A statement on the DFM website confirmed the upcoming move, according to the requirements for disclosing material information.

“Kindly note that the DFM has received free of cost a land plot from Dubai Properties subsidiary of Dubai Holding in the Business Bay in Dubai, noted that the land plot measuring 10,232.9 square meters with market value Dh231m to construct its main building that will house the market’s future headquarters, in line with the market development vision."


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With 30 years of Middle East experience, Asteco’s Valuation & Advisory Services

Team brings together a group of the Gulf’s leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai, Northern Emirates, Qatar, Jordan and the Kingdom of Saudi Arabia not only provides a deep understanding of the local markets but also enables us to undertake large instructions where we can quickly apply resources to meet clients requirements.

Our breadth of experience across all the main property sectors is underpinned by our sales, leasing and investment teams transacting in the market and a wealth of research that supports our decision making.

John Allen BSc MRICS Director, Valuation & Advisory +971 4 403 7777 [email protected]

Julia Knibbs MSc Associate Director – Research and Consultancy +971 4 403 7789 [email protected]

VALUATION & ADVISORY Our professional advisory services are conducted by suitably qualified personnel all of whom have had extensive real estate experience within the Middle East and internationally. Our valuations are carried out in accordance with the Royal Institution of Chartered Surveyors (RICS) and International Valuation Standards (IVS) and are undertaken by appropriately qualified valuers with extensive local experience. The Professional Services Asteco conducts throughout the region include: • Consultancy and Advisory Services • Market Research • Valuation Services SALES Asteco has established a large regional property sales division with representatives based in UAE, Saudi Arabia, Qatar and Jordan. Our sales teams have extensive experience in the negotiation and sale of a variety of assets. LEASING Asteco has been instrumental in the leasing of many high-profile developments across the GCC.

ASSET MANAGEMENT Asteco provides comprehensive asset management services to all property owners, whether a single unit (IPM) or a regional mixed use portfolio. Our focus is on maximising value for our Clients.

OWNER ASSOCIATION Asteco has the experience, systems, procedures and manuals in place to provide streamlined comprehensive Association Management and Consultancy Services to residential, commercial and mixed use communities throughout the GCC Region. SALES MANAGEMENT Our Sales Management services are comprehensive and encompass everything required for the successful completion and handover of units to individual unit owners.



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