Burj Khalifa to enhance 2010 revenues

Dubai's Emaar Properties announced that revenues stemming from the sale of units at Burj Khalifa, the recently-opened, world's tallest tower, will boost the company's 2010 revenues. Emaar, 31.2 per cent owned by the Dubai government, is the Arab world's largest listed developer. It posted third-quarter revenue of Dh1.95 billion. As Emaar recognises revenue and profits on delivery of the project, the revenue relating to the units sold in Burj Khalifa will be recognised in 2010 on delivery, spokesman said.

Emaar has a joint venture with Italian luxury company Georgio Armani to develop hotels around the world, including one at the Burj Khalifa.

Real estate in dubai

Real Estate Market Looking Stable

Dubai real estate market is reaching stability with positive signs in rental of 1 per cent in January and 6 per cent in February. This is the initial positive upward trend that can be noticed after nine months of decline. Rental prices in Dubai stabilised last November and recorded strong gains until February with a 6 per cent month on month increase. Prices were up by 6 per cent in February after a 13 per cent drop following the Dubai standstill announcement last November.

The survey suggests that areas which witnessed the highest number of handovers recently actually saw declines in February; namely Downtown Burj area with a 5 per cent decrease and Dubai Marina with 10 per cent. According to the report, rental rates in Dubai were helped by the spillover from neighbouring emirates (particularly Abu Dhabi) which anecdotal evidence suggests gained momentum last year. The report said mortgages have continued to tighten ahead of the Dubai World debt restructuring proposal. Mortgage volumes fell to 11 per cent in February from 25 per cent in September. Cash buyers were seen to be picking up smaller, more affordable units in areas such as International City (up 9 per cent), Greens (up 11 per cent) and Jebel Ali (up 10 per cent). The report said that the restructuring of Nakheel which controls 50 per cent of expected supply is predicted to lead to further project delays and cancellations supporting sector dynamics. However, expected recovery in the global economy and stronger growth in the UAE this year is likely to support demand.

Real Estate Market Looking Stable

Comparatively Palm property prices still high

Apparently Palm Jumeirah has cut its price by 40 percent from their August 2008 peak. But according to Real Estate expert, units on the Nakheel development are still overpriced. Compared to London, Paris and New York, prices on Palm are still high. In comparison to last year, prices for incomplete units were down by 50 percent and that rents were down by a quarter - favourable to other freehold areas in Dubai.

However based on the number of units due to complete over the next two years it is unlikely that prices will increase. Despite the difficulties faced over the last 18 months the UAE remains a commercial nerve centre of the Middle East. After a period of consolidation of between three and five years prices are expected to rise again. Established areas such as the Springs, Meadows, Jumeirah Islands and the Palm had performed well historically and would continue to see a high turnover of transactions. Dubai World announcement is expected to bring a positive period for the UAE.

property prices

Projects delayed owing to poor planning

The blame on lack of funds holding progress of projects has been proved wrong in a survey which claims that it’s the lack of co-ordination between agencies in the GCC which is responsible for it. In spite of cost and schedule overruns it is completion of a project that makes it successful. A team of professors at the UAE University asked a good sample of sponsors or clients, government departments, contractors, consulting and management firms whether their projects were successful. Despite the many delays and doubling or trebling of total costs, 100 per cent of them replied, "YES".

Lack of funding was not a reason for these delays, the survey, 'Management of Transportation Infrastructure Projects in the UAE', found. Rather, faults are caused by management issues and lack of timely co-ordination among many government agencies, it said. Initial studies revealed that there are frequent disturbances in the decision-making process, which starts from planning, scope assessment, designing and tendering and ends in construction. Some projects that were at the designing phase were sent back to the planning/study phase, while some that were at the construction stage were returned for redesigning. Planning, the most vital part of any project is often not done properly, leading to complicated rework during the process.

Dubai real estate

Dubai home prices slides further

Dubai real estate performed the worst in the current year gliding further by 45 percent. The report is from The Wealth Report 2010 produced by Citi Private Bank and property consultancy Knight Frank. It also showed that Dubai was the biggest faller in the list of the world's 40 most influential cities. The emirate is facing the blow from global economic crisis and plummeted three places to 31 in a list based on their economies, political power, knowledge and quality of life.

New York was the top scorer taking over London's top spot this year, as the UK capital also struggled with the financial downturn. High-end home prices faced turmoil all over but Dubai prices were by far the worst hit and Dublin seeing the second highest declines (25 percent). Luxury home prices rose more than 40 percent in the Chinese cities of Shanghai, Beijing and Hong Kong.

Dubai home prices slides further

Dubai mortgage market soars by 75%

Dubai mortgage market is seeing an upward surge by 75 percent for this fiscal year. Dubai Land Department has made the comparison with same period last year. Official Dubai Land Department (DLD) has given the value based on registration on the system between January 1 and March 21 AED9.99bn ($2.72bn). Comparison shows increase in value by 75 percent to last year when AED5.68bn ($1.54bn) worth of new mortgages was processed.

Mortgage advisor Khadija Ebrahim said this is definitely the case on the ground in the market and that they have seen an increase in the number of inquiries from customers looking for mortgage finance. Number of Dubai residents seeking mortagages is higher and the most popular locations are Emirates Living, Jumeirah Lake Towers and Dubai Marina. The increase was basically ue to a low base last year, and now that the banks have relaxed a bit and are offering better terms and conditions in order to attract customers. Interest rates have also come down and are as low as 6.75 percent, compared to an average of 8.5 percent last year.

Union Properties willing to sell assets

Dubai's Union Properties is willing to sell all any of its projects if it receives a fair price. Union Properties, the third-largest developer in the Gulf Arab emirate has been hit by the global downturn, which has sent prices in Dubai's once-booming property sector tumbling some 50 percent from their peaks in 2008. The developer has received offers for its Ritz Carlton hotel in Dubai which the debt-laden firm is hoping to sell for about AED1.5bn ($408.4m).

The company's complete projects have achieved their investment targets and they are being offered to investors for sale. Buyers are mainly investment companies and individuals who are looking to buy complete and rented properties with an income of 7-8 percent. The funds raised from asset sales will be used to repay financial commitments and finance ongoing property projects. The firm posted a third consecutive quarterly loss on provisions for contracting and property revaluation. It has 6.5 billion dirhams of outstanding debt, of which 2.8 billion had been rescheduled for payment to 2011 from 2009, with the remainder maturing in the long-term.

Dubai realestate

EPG repurchasing units in Palm Jumeirah

Residential and tourism project developer Emerald Palace Group (EPG) is considering repurchasing units of Kempinski Hotel Residences in Palm Jumeirah. There are only 20 units up for sale in the secondary market out of the 244 in the project which made it make the move to buy the units and putting them on rent. The work on the project begun on 2007 and it consists of 244 units, including a mix of high-end suites, residences, penthouses and royal villas. Recently EPG delivered its 100th unit to owners of the development.
The Kempinski Palm Jumeirah Residences range in size from 165 square metres to 1,300 sq m, all including terraces or balconies. The developments consists of a mix of two-, three- and four-bedroom suites and residences, a selection of penthouses and townhouse-style royal villas with their own private pools and gardens. EPG has a strategic partnership with Kempinski Hotels. The developer has commenced work on Emerald Palace Kempinski in Palm Jumeirah.

More Information