Saadiyat Beach Apartment Construction Gets A Nod

The first phase of Saadiyat Beach Apartments will soon kick off as The Tourism Development and Investment Company, which is the prime constructor of tourism, cultural, and residential destinations in Abu Dhabi, has assigned the development work to Abu Dhabi-based Dhabi Contracting Establishment. About 495 apartments will be constructed in the first phase.

Located in the centre of a Saadiyat Beach community, the plans have been deciphered with Arabian and Mediterranean elements. The first phase is expected to be ready by 2011 Q4.

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Qatar World Trade Centre Construction Commences

The development work of Qatar's World Trade Centre tower in Doha has commenced. The work is expected to take at least two years for completion. This was disclosed to the publicon Monday, 28.06.10, during a press conference which was held on the event of signing the agreement between Qatar General Insurance and Reinsurance Company, which owns theproject and the main contractor, the Arabtec Construction Company.

The blueprint of this building showcases latest technology with a very distinct architecture. The Qatar WTC will be a 50-storey tower which will be the abode of 42 levels of offices, a podium of four floors for conferences, four basement car parking and services and a Sphere Structure, housing a multi-purpose auditorium.

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Dubai Real Estate Market Overview

‘Dubai Real Estate Market Overview – Q2 2010: June 2010’ covering the Dubai office, residential, retail and hospitality market segments from Jones Lang LaSalle, the world's leading real estate investment and advisory firm. It reports that tenants have greater opportunities due to increasing availability of space, declining rents, and improved lease terms as the property market begins to bottom out.

Highlights of the overview:

Dubai Real Estate Market Overview
Q2 2010
Market Highlights – Q2 / 2010

• The Dubai office market continues to fragment with a further decoupling between the overall market(which is experiencing increasing vacancies) and good quality buildings in the CBD (where there remainselective shortages). While average city-wide vacancies have increased further (to around 38%), only12% of the 7.5 million sq ft of completed space in single ownership within the CBD is currently vacant.
  

• Retail vacancies have increased to between 8% and 10% as competition intensifies and retailers haveclosed poorer performing stores. This is resulting in a flight to quality and increasing problems (brokentooth phenomenon) in poorer quality centres. The more enlightened centre managers are responding tochanging circumstances by seeking to proactively engage and offer more attractive and flexible terms totheir tenants.
  

• Supply in the residential sector continues to complete, with fewer delays being experienced than in theoffice market. While sales activity has increased and average prices have remained relatively stable,rentals have continued to decline significantly across Q2, particularly in respect of luxury / high end villaand apartment projects.

• The hotel market is the closest to the bottom of the cycle. Increased demand has resulted in a growth ofoccupancies during 2010, but average room rates and RevPAR continue to decline, especially in respectof city hotels.

Dubai Rental Clock – June 2010



















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Dubai Real Estate Transactions Grow In First Five Months

According to the Dubai Land Department, the transactions in the real estate sector have showcased a positive growth in the first five months of this year when compared to the corresponding period last year. 3,642 land sales worth Dh 25 billion have been recorded during this first five months. Out of the 3,169 residential properties in dubai that have been sold off since January 2010, 2,927 were apartments, of which 10 per cent have been mortgaged.

The total land area that has been sold off is about 62,815 square feet. According to the Dubai Focus section in reidin.com, in 2009, 4,961 residential lands were sold off. 3,750 mortgages worth Dh3 2 billion with an area of 95,460 square feet have been recorded during the first five month of 2010. According to the department's assistant director-general Mohammad Sultan Thani, "While we may see less value there are many more transactions on a daily basis compared to last year."

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Risk of Property Bubble of Asia Moderate

According to the international credit rating company Moody’s, even though the property prices have surged, there is only a moderate level of risk from the asset bubbles that have developed in Asia.

According to Deborah Schuler who is the Senior Vice-President at Moody's handling the ratings in Asia, the Middle East and Africa, the steps adopted by the government to ease the market have proven to be effective. "At the moment, we think asset bubbles are confined to the property sector and it's still only a moderate risk," she said.

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Low Rents Increases Dubai Villas Demand

Reports claim that there is a tremendous increase in the demand for villas in Dubai. The major reason behind this is the steep decline in the rents, which was a result of excessive supply of the property into the real estate market. The real estate firm expects that Dubai will be the abode to 3,500 to 4,000 more villas by end of 2010.

"Villa rentals are looking very attractive at the moment. With a further supply of villas to enter Dubai, rentals are expected to decline although at a slow pace. This could trigger a 10 per cent further decline in villa rents. However, villas are strong assets for Dubai and demand for villas is always likely to be higher than apartments. If there is any correction in rental rates for villas it is only because it is a natural market situation," said Mohanad Alwadiya, Managing Director, Harbor Real Estate.

Emaar Sells Hampton Non-MENA Assets

Dubai-based Emaar Properties has sold off Hamptons International to UK-based Countrywide as a part of its realigning and repositioning strategy. Dubai’s leading construction firm, Dubai Emaar Properties, has disclosed on Thursday that its property management subsidiary, Hamptons International, has been sold off to UK-based real estate company, Countrywide. Emaar had acquired Hamptons in 2006 for Dh 562 million from a Singapore-based firm.
According to a Emaar spokesperson, “As per the agreement, Countrywide will own and operate Hamptons International offices in the UK, Europe and key Asian markets, while Emaar will own and operate the Hamptons International offices in the Middle East and North Africa region”. But no information on the deal is available. But, Emaar will continue to “share synergies” with Countrywide for the promotion of Emaar Properties across the UK and world.

Luxurious Bahrain Properties Facing Price Fall

Asking prices for high-end apartments in Bahrain have dropped 20 per cent compared to 2009 as sales of freehold villas and apartments remain almost non-existent over the last two years, Knight Frank, the global real estate consultancy, said.
Sales of freehold villas and apartments have been almost non-existent in Bahrain over the last two years, which is indicative of the fact that investors are wary in these uncertain economic times and owner occupier demand for luxury property appears to have been satisfied at least in the short term, the report said. Also, the boom times of speculative purchasers enjoying healthy returns on investments by flipping off-plan properties for a profit are a distant phenomenon.
As many of the mixed-use schemes are experiencing construction delays, investors looking to generate rental returns on completed projects are similarly staying away.

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Dubai is still a key investor’s destination

A report from Moody's Investment Service asks the investors to be optimistic about Dubai and reap out of the lower property costs in the city as it still is one among the most preferred investment choices of investors. According to Faisal Hijazi, Business Development Manager, Rating Services and Islamic Finance at Moody's Dubai, revamping Dubai is not an easy and short process. The investors should keep this in mind and then invest in the city.
"But I think the investors should now take advantage of the available opportunities, which are numerous. Dubai still enjoys a good position in this respect and I think there are good investment opportunities in some sectors," Hijazi said.

Dubai Rentals

Dubai Property Lease Rates Facing Sharp Decline

The rates of leasing out properties in June have witnessed a huge dip when compared to the lease rates in April 2010. The surplus inflow of stock into the real estate market has attributed to such a scenario. Rents in the capital are coming down and will continue to do so, especially in the fourth quarter of 2010 and first quarter of 2011.
According to the Dubai lease guide from Landmark Advisory even though the low-quality buildings and other properties located in less renowned areas are victims to this decline in lease rates, the interesting part is that the quality properties in the most-wanted areas are still facing this decline.

Burj Khalifa Owners Not Keen On Selling Their Units

The real estate agents of Dubai have mentioned that more than 70% of the people who own apartments in the renowned Burj Khalifa are unwilling to sell their property, but they are looking forward for a good increase in the lease rates to reap the maximum benefit.
According to the Portfolio Manager at Networth Real Estate, Rano Rahim, increase in rates is one among the major expectations of the Burj Khalifa owners. According to her, "Further, almost 70 per cent of the people are not ready to sell the property as it has a brand value attached for them. They don't mind putting it up for rent in order to earn returns on their property. Right now, people are only enquiring and asking for our advice on rents and sales values. Since their investment is so huge we are trying to get them the maximum returns”.

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Asian Investors Fascinated By Dubai

The investors from India, Hong Kong and Singapore are now under the fascination of Dubai. With the prices of Dubai-based properties registering a growth, they have become the ‘Apple of the eye’ of these Asian investors. According to the Chief Executive Officer of Standard Chartered for Europe, Middle East, Africa and Americas, V Shankar, “Initial signs of interest are emerging among Asian investors to invest in Dubai's real estate where the prices have been pretty attractive following a sharp drop over the past two years”.
A Bank of America Merrill Lynch report had mentioned that the prices of property in Dubai have witnessed a dip of 45% when compared to the peak levels it had registered during the third quarter of 2008. But the HC Securities report that was revealed yesterday is a complete contradiction with this. According to the HC Securities report, the cost of Dubai properties are on a growth mode, that is a complete reflection of the increase in interest people have in the real estate sector of the Emirates.

Nakheel To Clear Off Its Debts Upto Dh 500,000

Nakheel is in the process of paying off its debts of up to Dh 500,000 completely. According to the spokesperson of Nakheel, “All trade creditors have been or are in the process of being paid Dh 500,000, which means that those owed Dh500,000 or less are paid in full”. “Our talks with our partners are progressing and we are confident that an agreement will be reached shortly”, he added.
But Six Construct and Arabtec, when contacted, mentioned that they were not in the list as Nakheel owes them higher figures. "We do not disclose such information, but we are very pleased with our partners' positive response”, said Nakheel, when asked about the increase in the consenting firms after the UAE Contractors Association meeting, last week.

Dubai Rentals

Jointly Owned Property Law

On 10th December 2007, Law No. (27) of 2007 on Ownership of Jointly Owned Properties in the Emirate of Dubai was issued laying the foundations of a “Strata” form of property ownership in Dubai. The Jointly Owned Property Law contemplated the passing of further rules and regulations providing more detail on how the property ownership scheme would be implemented and operate. These rules and regulations were termed the “Implementing Regulations”. The Implementing Regulations (excluding the Survey Directions) have now been published as “Directions”, effective from 13th April 2010.

Dubai Rentals

Greener building products to reduce Gulf?s 66 million tonnes of annual construction waste

The construction industry is a leading contributor to growing waste levels in the GCC, producing a reported 66 million tonnes of waste material a year or around 55 per cent of the 120 million tonnes of waste generated within the region. MAPEI, leading global manufacturer of adhesives, sealants and chemical products for buildings, has revealed that it now sets aside 70 per cent of its annual R&D budget, which translates to USD 105.5 million, for the development of eco-friendly construction products and materials, which not only reduces waste, but also improves installation efficiency at site. The move is intended to support new government policies on sustainability and environmental protection.
Construction waste can contain materials that lead to soil and water pollution due to harmful byproducts such as solvents, plastics and chemical treatments. The use of non-toxic building materials and furnishings, such as low- and zero- volatile organic compound paints and sealants, is essential to constructing or renovating ‘green buildings’, ensuring that they have minimal environmental impact.

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Abyaar sells 50% of Pier 8 Dubai Marina project

Abyaar Real Estate Development, a Kuwait-listed company, has sold 50 per cent of the Dh360 million Pier 8 project in Dubai Marina to an Emirati investor. The value of the deal has not been finalised, but only an agreement to sell the stake has been reached, he added. Industry experts told this newspaper the sales value could be in the range of Dh500 to Dh550 million.
"Although we have been in talks with Kuwaiti banks for getting finance for the project, we decided to sell 50 per cent of our project to a local businessman. He will be part funding the project," the official, who did not wished to be named, said in a telephonic interview.
The 40-storey Pier 8 in Dubai Marina features 234 apartments plus three townhouses and two penthouses. The project has reached the 16th floor, but no new timeline has been set for completion, the official added.

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