NEWS BRIEF 38 SUN DAY 27 September 2015

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RESEARCH DEPARTMENT

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REAL ESTATE NEWS UAE UAE WORLD'S SECOND HOTTEST PROPERTY MARKET; AHEAD OF...

INVESTORS IN MIDDLE EAST REMAIN INTERESTED IN HOTEL ACQUISITIONS LONDON REAL ESTATE REMAINS A BRIGHT SPOT AMID UAE MALAISE RENOVATION NEW NAME OF UAE PROPERTY GAME

DUBAI GIANT ADVERTS ON DELAYED DUBAI TOWER TO STAY IN PLACE FOR ANOTHER YEAR BESPOKE DUBAI HOME MADE ALL THEIR OWN DUPLICATE LISTINGS 'HEADACHE' FOR UAE REAL ESTATE MARKET DUBAI REALTY TO THRIVE ON HIGH YIELDS BUYING PROPERTY IN THE UAE? 8 KEY QUESTIONS YOU SHOULD ASK DH4,167 TO DH8,333 MONTHLY HOUSE RENT? DOUBLE PARKING CAUSING DELAYS IN DUBAI DUBAI’S ENSHAA PLANNING TO OPEN 25 MORE CAPITAL CLUBS FALCONCITY'S EGYPTIAN PYRAMIDS ‘YET TO WIN PLANNING APPROVAL’ DAMAC RAISES $100M VIA SUKUK LEARNING THE ART OF HOSPITALITY FROM HOTEL INTERNSHIPS BRITISH INTEREST IN DUBAI PROPERTY SURGES AS HOUSE PRICES SLOW

ABU DHABI MOHAMED BIN ZAYED APPROVES AED2.4B HOUSING LOANS IN ABU DHABI BELLA ITALIA: PALAZZO VERSACE DUBAI DEVELOPER ON THE MUCH- DELAYED OPENING, AMBITIOUS PLANS FOR UP TO 10 MORE RESORTS BUILDER PULLS OUT OF DH980M MEENA PLAZA PROJECT IN ABU DHABI ‘AFTER NOT BEING PAID’

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UK’S ASSAEL ARCHITECTURE TO SET UP SHOP IN ABU DHABI THIS YEAR

ZAHA HADID, DESIGNER OF SHEIKH ZAYED BRIDGE IN ABU DHABI, BLAZES TRAIL FOR WOMEN WITH RIBA GOLD MEDAL

NORTHERN EMIRATES RAS AL KHAIMAH PLANS TO ATTRACT 60,000 EUROPEAN TOURISTS FOR HOLIDAY SEASON OTHER FLOATING HOMES TO FLEXI-FLATS: 100 SOLUTIONS FOR LONDON

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DUPLICATE LISTINGS 'HEADACHE' FOR

UAE REAL ESTATE MARKET

FRIDAY 25 SEPTEMBER 2015 Though Dubai’s Real Estate Regulatory Agency has launched eMart to stop duplication of property listings, a software technology expert claims duplicate listings within the UAE’s online real estate market are costing the industry at least Dh1 billion per year. “Duplicate listings are a major headache in our industry, and evidence suggests that the Dh1 billion our team has calculated is likely a conservative figure,” Daniel Hart, CEO, Masterkey, said at the recent Real Estate Brokers programme in the Cityscape Global Conference. The figure was calculated taking into consideration the amount of time, overheads and additional marketing expenses that companies incur when duplicate listings are published. Figures were based on publicly available data published by the Dubai Land Department and conservative estimates obtained from a wide array of brokers regarding the amount of duplication involved. “As the UAE moves towards a more regulated market, our multi listing system will bring agents together instead of competing against one another,” said Hart. The Dubai Land Department has been working to stop the menace of 'ghost' listing since 2012 when it came out with Simsari, a multi listing services system. However, its latest avatar is eMart, an online portal designed for listing sale and rental units. In September 2014, Emirates 24|7 reported Marwan bin Ghalita, CEO, Rera saying, “A lot of brokers came to us, asking not to implement the MLS. We are working the system now. All the listings on eMart have validated details of the properties and not like online portals where the agent’s fill in the details.” Source: Emirates 24/7 Back to Index

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DUBAI REALTY TO THRIVE ON HIGH

YIELDS

THURSDAY 24 SEPTEMBER 2015 Prime properties in Dubai are offering rental yields of over 7 per cent, bringing the emirate among cities that offering high income generating assets for investors, according to Knight Frank. “With price falls continuing to outpace rental value declines, initial yields are rising. Reaching more than 7 per cent in rental yields in the mainstream property segment, Dubai still stands tall among real estate capitals in the world for investor seeking income generating properties. Never to forget that returns here are always tax free,” the UK-based property consultancy said in a recent note. Prices have fallen by 12 per cent in the mainstream segment over the 12 months to June 2015 driven by a projected excess supply. However, the magnitude of decline in prime residential prices was 4.5 per cent in the year to June 2015. Over the past decade, the emirate has been on a real estate roller-coaster ride of boom, crash and recovery. Property values halved between 2008 and 2010, but then rose phoenix-like from the desert to regain most of their losses by 2014. The rallying prices of years 2013 and 2014 in Dubai have set off the alarm so authorities had to react to prevent a market boom-and-crash cycle. Dubai’s market regulators, wielding mortgage caps and a doubling of transaction fees, stepped in to reduce speculation. This combined with deteriorating oil prices, currency fluctuations, a strong US dollar, to which the UAE dirham is pegged and a series of economic and political failures in different parts of world, means lower levels of demand from most regional and international group of buyers looking to purchase properties in Dubai. Falling prices are not totally bad news. With the government stepping in to curb speculative activity through tightening mortgage regulations and capping price increments, it is evident that lessons has been learnt from the 2008 downturn and the market is heading steadily to be more mature and better controlled. “Looking into the city’s sub-markets, the picture is a bit more positive as well. In-demand areas are mostly in the prime segment including villas, townhouses and apartments in the Palm, Emirates Hills, Dubai Marina and Downtown for example. Even during the 2008 downturn, prime properties saw lower levels of declines compared to less established areas,” said Diaa Noufal, MENA Research, Knight Frank Dubai office. Regional competition Abu Dhabi is where the Dubai model is most evident, albeit on a smaller scale. Transaction volumes in the capital have fallen in the past year, but prices have been relatively resilient, rising by about 5 per cent in the 12 months to June 2015. As with Dubai, the rules on mortgage caps also apply to reduce the risk of bumpy cycles. Other regional markets have picked up the sparkle of Dubai speedy development in a way to compete with the emirate and gain a share of the inbound flow of global private wealth. Qatar has legalized foreign ownership as early as 2004, although restricted to a few specific areas. This was reactivated when the first waves of freehold properties started to pour in the market in The Pearl

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waterfront development. Demand has been rising, albeit with a slowdown this year following the oil price crash and regional instability.

Buyers tend to be residents of countries within the Gulf Cooperation Council, although the number of European buyers is rising. Demand for Oman property from across the Middle East and from India and Pakistan has risen in recent years. This is partly due to the potential for some buyers to secure residency following purchase, but also from relatively strong annual investment returns of about 6 per cent. For Saudi Arabia, the biggest economy in the region and the largest oil reservoir in the world, the Dubai market has been an investment opportunity rather than a transferable experience. However, property market in Saudi has been seen evolving rapidly over the last decade with mega scale projects by Dubai- experienced developers such as Emaar and Limitless. Outlook Despite the rise of alternative regional markets for international buyers, Dubai and Abu Dhabi will remain the focus for most activity in the region. Investors, developers and governments here, all alike, are counting on the potential economic growth in both cities - led by a forecasted 20 per cent increase in the UAE population by 2030. Economic positive prospective of Dubai is no doubt deeply founded. Its airport already serves 70 million travellers a year with capacity set to rise to 200m. The port at Jebel Ali is expected to become the world’s largest in the next 15 years, reflecting Dubai’s emergence as China’s logistical hub for the Middle East and Africa, says Knight Frank. Having in mind the Expo 2020 in Dubai and the massive economic activity linked to it, demand is seen gathering momentum in a steady pace over the next seven years and beyond. “A more mature market, a better investment return, and a highly connected city all point to a positive future of the property sector in Dubai,” the consultancy states.\ Source: Emirates 24/7 Back to Index

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BUYING PROPERTY IN THE UAE? 8 KEY

QUESTIONS YOU SHOULD ASK

WEDNESDAY 23 SEPTEMBER 2015 The UAE’s property market has long been a solid choice for those looking to invest in real estate with investors purchasing property in the UAE getting better returns than mature markets such as Hong Kong or London. The past months saw the Dubai residential real estate market continuing with price stabilisation with prospective buyers witnessing housing units becoming more and more affordable, making the UAE offering high-growth investment for buyers. With over 120,000 property listings on the site, EZHeights, a property portal, has released a guide to buying properties with the company claiming all listings are manually screened to ensure that no fakes or duplicates are uploaded to the site. Here is a checklist when purchasing property in the UAE: 1. Location Think carefully about the neighbourhood. Have property prices increased or decreased in the area? Is the area easily accessible and are there good shops and schools close by? Is the location in a high traffic zone, will the sound of the cars be disturbing? How close are you to public transport? Are there any major roadworks or construction projects happening close by? 2. Budget How much money are you looking to spend on a property? What facilities come included in the price? What else can you get for the same price in the same neighbourhood? What is the average price of property in the area? 3. Master developer’s delivery Spend time researching the master developers’ track record. Have they completed all their projects to high standards in the promised time? Do they have a good reputation for property maintenance? Are their older buildings safe and well maintained? Pay a visit to older buildings to see for yourself. 4. Building contractor’s quality record Spend time researching the building contractor’s history and quality record. Have they delivered buildings to a high standard? Have their older buildings had any problems or serious issues that you should be aware of? 5. Potential return on investment If you’re buying a property, you don’t want the value to depreciate in time. How much money do you see yourself making? Will the property lose value or increase in value over time? Are you planning on selling this after a few years or keeping it forever? 6. Recurring monthly costs and service charges How much money will you be spending on the property on a monthly basis? Do you have additional expensive service charges? Will the DEWA bills be high? Do you have to pay annual service fees?

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7. Seller’s existing mortgage prepayment requirements

Find out what the seller’s mortgage prepayment requirements are and what you need to do to meet these? Are these feasible for your budget and are these reasonable terms? 8. Buyer’s mortgage ability and availability Find out what mortgage you would have available to you. How much would this be and what are the repayment terms? How much would you be borrowing and do you meet the mortgage lenders criteria? Are you eligible for a mortgage? Source: Emirates 24/7 Back to Index

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DH4,167 TO DH8,333 MONTHLY HOUSE

RENT?

TUESDAY 22 SEPTEMBER 2015 The maximum number of renters in Dubai and Abu Dhabi are looking for properties with leases of between Dh50,000 and Dh100,000 per annum (pa), according to a new report. Almost 25 per cent of all Dubai searches are for properties priced between Dh50,000 and Dh100,000 pa, while in Abu Dhabi 29.27 per cent are looking for units in the same bracket, a third quarter 2015 report by propertyfinder.ae. Almost 23.44 per cent of the searches are also for properties with prices of Dh100,000 to Dh150,000 pa. In Abu Dhabi, the percentage stands at 26.24. Dubai Marina is the top searched area on the rental side followed by Palm Jumeirah, Jumeirah Lakes Towers, Downtown Dubai and Business. The three least searched areas in the quarter were Discovery Gardens, Tecom and Al Barsha. On the sales front, Dubai Marina tops the list followed by Downtown Dubai, Palm Jumeirah and Jumierah Lakes Towers. The last three places go to International Media Production Zone, Discovery Gardens and Dubai Festival City. In the villa segment, Arabian Ranches remain the top visited community followed by the Springs, Dubailand and Palm Jumeirah. However, in terms of median price of Dh37 million, Emirates Hills tops the list followed by Arabian Ranches at Dh4.39 million. In Abu Dhabi, Al Reem Island remained the most visited community followed by Al Ghadeer, Al Khalidiya and Al Raha Beach. The three least visited areas were Al Najda Streer, Al Nahyan Camp and Saadiyat Island. Hamdan Street boasts the highest median sales price of Dh75 million, the propertyfinder.ae said. On the villa front, Khalifa City was the most searched area followed by Al Reef and Mohamed Bin Zayed City. As for the prices, Al Reef topped with median price of Dh2.1 million with Nurai Island being the most expensive villa community with a median price of Dh36 million. S&P's outlook Separately, a report issued by Standard and Poor’s Rating Services on Monday said it expects additional housing supply and slightly lesser demand constraining prices and rental rates in Dubai's residential real estate market over the next 12 months. The report reiterated that property prices in Dubai’s residential housing market are expected to fall by 10 to 20 per cent this year. Citing Reidin, the ratings agency said 20,170 new units are planned for delivery in 2015 compared with the three-year annual average of 11,600 units. Price growth has already started cooling down this year with Reidin’s residential property price indices for Dubai showing a negative growth of 10 per cent year-on-year as of August 2015. S&P expects Abu Dhabi, which is facing shortage of quality housing, will prompt rents to climb up albeit at a much slower pace than the 11 per cent of 2014.

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“With only 5,000 units scheduled for deliver y in 2015, if rental caps or similar regulation aren't introduced, we may continue to observe rent increases in the emirate's capital. However, the currently softer economic conditions, driven by lower oil prices, could keep rent increases in the single digits,” the report said. Source: Emirates 24/7 Back to Index

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UAE WORLD'S SECOND HOTTEST

PROPERTY MARKET; AHEAD OF...

SATURDAY 19 SEPTEMBER 2015 The UAE has been named the second hottest market for global residential property investors ahead of Singapore, the United Kingdom and Hong Kong, according to Savills, a UK-based real estate advisor. “The UAE’s domestic wealth creation and growing population and regional demand make it a wise investment choice,” the consultancy said in its latest “World Residential Markets” report, which analyzes economic and demographic trends in 14 countries to forecast how much prices in popular cities will rise over the next five years.

“The UAE stands out as a ‘safe haven’ for both local and international investors in the Middle East, attracting businesses and capital from across the region and into the region,” Savills said, adding, “The economic growth is currently strong, growing 5 per cent per annum since 2011.” The report further disclosed that the first half of 2015 saw prices fall by 7.7 per cent and a lower transaction volume in Dubai amid a wave of new supply and decline in speculative investment. “Dubai is the most internationally invested city for residential real estate in the Middle East and much of Dubai’s success is down to its multi-layered appeal as a business and leisure destination for a range of European and Middle Eastern markets,” the consultancy said.

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Although residential values had fallen by 60 per cent between 2008 and 2011, it was in 2013 that the market recovered strongly, with Savills putting the increase to 39 per cent compared with the former highs. But in order to curb the market volatility, cooling measures were introduced in the second half of 2013, including mortgage caps across the UAE and Dubai doubling registration fee to 4 per cent from 2 per cent of the sales value. “What makes Dubai’s long-term prospects stronger than many other centres in the region is its reputation as a global centre of business. This has been underpinned by the city’s hosting of the World Expo in 2020. Strides are being made in improving the city’s infrastructure with the tram opening in 2014,” the consultancy stated. The US leads the pack, with four cities Los Angeles, Miami, New York and San Francisco (likely to see the strongest mid-term growth). On the third place is Singapore followed the United Kingdom and Spain. Caribbean, Australia, Portugal, Italy, France, China, Hong Kong, South Africa and Switzerland take the sixth to 14th slot. Cities such as London, Singapore and Hong Kong are expected to restrict growth relative to other cities over the next five years. On the other hand, Shanghai, expecting population growth, has witnessed a long period of asset price inflation and will witness a period of rental growth before investors are attracted back into the market, the report said. Source: Emirates 24/7 Back to Index

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DOUBLE PARKING CAUSING DELAYS IN DUBAI

SATURDAY 26 SEPTEMBER 2015 Double parking continues to be rampant in Dubai’s commercial areas and residents say this causes massive delays. Just like it is a problem in most cosmopolitan cities, double parking slows down the traffic flow, especially during rush hour and weekends, Dubai motorists said. Residents Gulf News spoke to said this occurs in the same places most of the time, especially in busy commercial areas in old Dubai where people get takeaways, groceries, make deliveries. Other places in new Dubai are getting busier as well. Naif and other areas in Deira top the list of the places where double parking is common, motorists said. Baniyas Square, Al Fahidi, Meena Bazaar, Al Karama, Jumeirah, Al Barsha, Al Quoz, Al Ghusais, even the service roads on Shaikh Zayed Road near the Trade Centre Roundabout are other problem areas. During a random drive around these busy areas, Gulf News noted that the primary reason for double parking is the limited number of parking spaces in some areas. But even in areas where there were parking spaces just one or two metres away, some people couldn’t be bothered to walk a short distance and still chose to double-park. “I used to live in Naif and the parking problem was one of the reasons why I moved. I had been late to meetings on many occasions because someone decided to block my parking while buying something from a shop in the area,” Jonathan Campos, 37, a Filipino sales supervisor, told Gulf News. “I called police maybe around six to 10 times to clear the traffic because most roads there are one-way. There’s no room to overtake a vehicle that’s double-parked,” he added. In 2014, Dubai Police issued 168,107 fines to people who double parked on the road that disrupted traffic flow while 172,851 fines were issued for parking in prohibited areas. Each fine is Dh200. Rajkumar Pancholia, an Indian businessman whose office is located near Dubai Museum, said double parking is so common in the area that it causes unnecessary traffic jams. “Sometimes it causes me delays for about 10 to 20 minutes. We wait for the person to come back so the people behind me get stuck as well,” Pancholia said. Filipino credit controller Diane de Lara, 31, said waiting for less than a minute once in a while is fine, but not if it’s a habit for many. “If you compute the one or two minutes they make you wait on a busy road every single day because they’re getting their takeaways in a non-designated area that would be a lot. In most cases, it’s as if the shop has already extended its service area to the road. They don’t even care about oncoming traffic anymore,” de Lara said. According to a study published in the Journal of Transportation Research Board in 2013, limiting double parking could result in a decrease of about 15 per cent and 20 per cent in delay (due to slow traffic flow) and stopped time (when one cannot move forward as one’s way is blocked), respectively. However, if double parking is eliminated, delay and stopped time can decrease by up to 33 per cent and 47 per cent, respectively.

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Continued increased police visibility and taking the Dubai Metro help solve the problem, residents said, but exercising self-discipline is the key. But for Palestinian expatriate Mohammad Shaath adding more parking spaces is the answer. Source: Gulf News Back to Index

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DUBAI’ S ENSHAA PLANNING TO OPEN

25 MORE CAPITAL CLUBS

SATURDAY 26 SEPTEMBER 2015 Dubai’s Enshaa, the developer behind the Capital Club brand, is aiming to open 25 more venues, with Asia and Africa the main focus for expansion, its CEO has revealed. Signature Club International owns, develops and manages premier private business clubs and currently operates the Capital Club Dubai in the Dubai International Financial Centre (DIFC) and the Capital Club Bahrain in the Financial Harbour in Manama. Membership is strictly by invitation only and limited to around 1,500 members, drawn from the leading businesses in the region. Enshaa acquired 100 percent of Signature Clubs International in November 2009 and the CEO, Raza Jafar, told Arabian Business he is planning up to 25 clubs, but declined to give an exact timeframe for the expansion plans. “The Capital Club and that is part of our hospitality growth and we are very active in growing that business. We are expanding more in Africa and Asia and our ambition and target is to have 25 Capital Clubs across the globe.” Enshaa is also developing the Palazzo Versace Dubai resort, which was scheduled to open five years ago but is now likely to open within the “We are just waiting for the road access in the next six to 12 weeks. By November-ish, in six to 12 weeks we should be able to open up [the resort]. We will have a soft opening,” Jafar said. He also added that the opening is the start of a rapid roll out of Versace-branded resorts, with Enshaa planning up to 10 more resorts over the next decade. “Our company has the right of first refusal for a global rollout of Palazzo Versace, so we are exploring at the moment the development management and hotel management of several projects as we speak. We are exploring Europe, we are exploring Asia. They are two areas we are actively exploring. My ambition and dream would be to have ten hotels operating around the globe with the Palazzo Versace brand and managed by us,” Jafar said. Source: Gulf News Back to Index

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MOHAMED BIN ZAYED APPROVES AED2.4B HOUSING LOANS IN ABU

DHABI

TUESDAY 22 SEPTEMBER 2015 Sheikh Mohamed instructed the Abu Dhabi Housing Authority to immediately disburse the loans to the beneficiaries in accordance to the procedures. The new loans cover the needs of citizen across the Emirate, with 879 beneficiaries in Abu Dhabi and 323 in the Eastern and Western Regions. The gesture reflects the keenness of the UAE President, the Crown Prince of Abu Dhabi, and follow up by H.H. Sheikh Hazza bin Zayed Al Nahyan, National Security Adviser, Vice-Chairman of the Abu Dhabi Executive Council and Chairman of the Abu Dhabi Housing Authority, on the provision of decent living conditions for families to ensure socio-economic stability. The government housing loan in Abu Dhabi of AED2 million, is interest-free and refundable in equal monthly instalments. The citizens are exempted from paying 25 per cent of the total value of the loan granted to them upon completion of the construction of the building, in addition to granting a one-time exemption of certain percentages and other incentives on early repayment of the loan. Source: Emirates News Agency (WAM) Back to Index

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BELLA ITALIA: PALAZZO VERSACE DUBAI DEVELOPER ON THE MUCH- DELAYED OPENING, AMBITIOUS PLANS

FOR UP TO 10 MORE RESORTS

FRIDAY 18 SEPTEMBER 2015 When Palazzo Versace Dubai was announced in late 2008, in the midst of the global financial crisis, it made headlines around the world when it was revealed it would include the planet’s first refrigerated beach. The revolutionary system would help prevent rich holidaymakers from burning their feet on the scalding hot sand during the desert summer, using a system of heat-absorbing pipes built under the sand and giant wind blowers. While the developers claimed “this is the kind of luxury that top people want,” unsurprisingly, environmentalists were up in arms. “Dubai is like a bubble world where the things that are worrying the rest of the world, like climate change, are simply ignored so people can continue destructive lifestyles,” the Tourism Concern group said at the time. Fast forward to 2015 and after nearly five years of delays, Enshaa, the Dubai-based developer behind the AED2.3bn ($626m) project, has started handover of the units and is gearing up for the opening of the property. However, one thing that has been scrapped is the infamous refrigerated beach idea. “My partner had that ambition, to somehow provide the feeling of a beach,” Enshaa CEO, Raza Jafar (pictured below), recalls. “But I have spent the last two years of my life working on triple bottom lines: environmental, social and economic. “From an environmental point of view, I did not find that [the refrigerated beach] a feasible decision and I have been scaling back on anything that is not environmental. So we do have a small beach but it is not air-conditioned through electricity.” Jafar earned autonomy to backtrack on such controversial decisions in 2011 when Enshaa took full control of the then under-construction Palazzo Versace Dubai hotel in a swap deal that also saw it relinquish its stake in a finished Australian hotel. Sunland Group, the firm’s Australian joint venture partner, took 100 percent ownership of the Palazzo Versace Gold Coast. The Brisbane-based firm released its 51 percent stake in the Versace-branded Dubai hotel and its 50 percent share of the D1 Residential Tower Dubai in exchange for full control of the Australian hotel, which opened its doors in 2000. Although notoriously behind schedule, Enshaa finally began handover to owners earlier this year of the Palazzo Versace residences and 518 apartments at the 80-storey D1 Tower. “The apartments at D1 Tower fuse rich Middle Eastern heritage and culture with today’s ultra-modern construction materials and quality furnishings. We have seen very strong demand for D1 Tower apartments since inception. We

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are delighted to deliver homes that will provide the ultimate modern living experience in a highly desirable location,” Jafar says.

“The handover has started and people are taking over possession of units and are moving in; we have quite a few residents moved in already and the rest are working their way up,” he adds. “We are doing delivery of four customers every day so we can spend enough time on each one. Each customer may own multiple units so it’s not just four units a day. We are very proud of the fact that we spent whatever time was available from the delays and infrastructure to use to it constructively to improve the quality whenever possible.” During the split between Enshaa and Sunland, the managing director of the Australian firm, Soheil Abedian, admitted at the time that the Dubai resort had begun construction “during a very difficult economic time”. Market rumours had suggested the property had struggled to secure project finance in the wake of the global downturn and Jafar confirms they had to compensate some owners because of the delays. “In some ways or forms during these years we always had to keep our customers updated on the progress. There has not been a major compensation per se on any of the delays because these delays were mainly because of the infrastructure over here,” he states. “If you come to Palazzo Versace now you still don’t have the access road, which is in the process of being completed, so it is going to take an extra six to 12 weeks before we open up, so we are hoping all that gets done. Electricity, there is no power over there. We have been building and running the project with our own self-generation for the last seven years.” However, Jafar, says he holds no bitterness towards Dubai authorities for the infrastructure delays: “They have their own priorities. There is a lot of stress on growth in the city. They have done what they can to accommodate us and move forward and it is all being done as we speak. We are just waiting for the road access in the next six to 12 weeks. By November-ish, in six to 12 weeks we should be able to open up [the resort]. We will have a soft opening.” As the luxury project moves towards completion, Jafar looks back on what has learnt from the experience of developing the Palazzo Versace Dubai and what he would do differently: “The lessons I have learnt with this projects is, number one, always continue the delivery of the project, as your credibility is way more important than short-term losses and gains. Number two, I also realise the fact that there is a liability with the pre-sales model and this needs to be reduced and we need to be totally comfortable of the financial closure, keeping in mind the contingencies. Number three, my view in future would be to not start a project where the infrastructure is not completed.” Looking to the future, Jafar is confident and plans to adapt these skills and lessons by developing nearly a dozen more Palazzo Versace-branded hotels across the globe. “Our company has the right of first refusal for a global rollout of Palazzo Versace, so we are exploring at the moment the development management and hotel management of several projects as we speak. We are exploring Europe, we are exploring Asia. They are two areas we are actively exploring. My ambition and dream would be to have ten hotels operating around the globe with the Palazzo Versace brand and managed by us. “Our immediate plans are for two areas of business: one is the real estate development and the other is hospitality. So as the construction and delivery on the project is getting handed over the other phase of our business, the hospitality, which is the hotel is just beginning. So our immediate focus is to ensure the quality and service and offering of the hotel lives up the expectations of our client and to ensure we provide the best product regionally and internationally.” Enshaa’s business does not just include the Versace partnership, it also owns the Capital Club in Dubai, a private members club which opened in the Dubai financial district in 2008. Membership is strictly by invitation only and limited to around 1,500 members, drawn from the leading businesses in the region. Jafar states that he also has ambitious plans for the Capital Club brand: “In addition to Versace, we are also in the Capital Club and that is part of our hospitality growth and we are very active in growing that

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business. We are expanding more in Africa and Asia and our ambition and target is to have 25 Capital Clubs across the globe.”

However, Jafar says he has no plans to partner with other fashion brands as he is more than happy with the Italian powerhouse. “The reason why we are working with them is because it is more than a fashion brand, it has a home collection, and has been famous for it over three decades, and it is all over [the world]. We are in the business of offering the best products. We believe in our partner and we are not talking to anybody else… It is difficult for us to put cars instead of sofas,” he says, taking a swipe at rival developer Damac who this month announced a partnership to design Bugatti-branded villas in which the famous supercar is located in a glass garage visible from inside the villa close to the sitting room. With the Palazzo Versace Dubai resort just weeks away from opening its doors, Jafar points out that, despite the difficult market conditions in which it was born, it has managed to sell most of its units at the resort and the D1 tower: “They are almost fully sold. D1, out of 528 units we have got 25-30 left and out of 169 Palazzo Versace residences I think we have 15 or 16 left.” Recent market reports have stated that Dubai property sales rates declined by around 2 percent from during the third quarter of 2015, and by around 6 percent year-on-year. Mat Green, head of research & consultancy UAE, CBRE Middle East said the residential sector is likely to continue to stabilise in the coming months, with nearly 20,000 new units set to enter the market during the course of the year. While 13 percent of real estate agents in Dubai who took part in Emirates NBD’s latest monthly Real Estate Tracker survey actually reported an increase in average sales prices over the past three months and some luxury developers have recently claimed the high-end sector was relatively immune to price drops, Jafar believes otherwise. “No, even in the luxury end there is a slowdown. The movement in property has reduced substantially and the prices are at least 5 to 15 percent lower than they were last year. I think it has been pretty much been across the board.” Despite the challenging real estate market, the hospitality sector is still performing well. Earlier this month, figures from hospitality data firm Hotstats revealed that UAE hotels witnessed rising occupancy rates in July, following the traditional slump experienced during the holy month of Ramadan. Four-and five-star hotels in Dubai experienced a significant increase in performance levels, with occupancy levels increasing by 9.9 percent to 60.2 percent. As a result, revenue per available room (RevPAR) recorded a double digit growth of 18.3 percent. The increase in room revenues, coupled with an 8.7 percent reduction in operating costs, drove a significant rise in bottom-line performance. As a result, Jafar is confident of success when the hotel resort opens for business later this year and he believes the Dubai hotel will perform even better than the first Palazzo Versace resort in Australia. “Our hospitality management has been managing the Palazzo Versace Gold Coast and the former general manager of Palazzo Versace Gold Coast, along with the team we have got, is there already and has been on the ground and we are moving forward. The [Dubai and Gold Coast] markets are very different, we feel the Dubai one will be profitable a lot quicker. The RevPARs are a lot higher and occupancies are a lot higher but there is a lot of competition so the service standards we have to offer have to do very well.” A sign of the calibre of the resort is the fact that last year Heinrich Morio, the former general manager at the Burj Al Arab, left his position at the iconic property to take up the same role at Palazzo Versace Dubai. “We improved certain things that has further improved the wow factor,” Jafar says, as he describes the appeal of the Palazzo Versace. “In the hotel lobby there was a beautiful carpet that was designed by Versace and due to the fact we had more time on completion [due to the delays] we decided to convert

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that into one of the most beautiful pieces of mosaic art pieces in the world. So things like these were added wherever we can to improve the look and feel of the product.”

With time and effort put into the project, it's possible the project will survive perfectly well without the headline-grabbing refrigerated beach. It could also be one the most-anticipated projects to open in Dubai this year. Source: Arabian Business Back to Index

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FLOATING HOMES TO FLEXI-FLATS:

100 SOLUTIONS FOR LONDON

SATURDAY 19 SEPTEMBER 2015 Floating homes to building houses on top of existing public buildings to flexible apartments, 100 such ideas have been proposed to meet London’s burgeoning housing demand. New London Architecture (NLA), the capital’s built environment think-tank, will release 100 ideas that aim to solve London’s housing crisis, which is the result of an international competition. Organised in collaboration with the Mayor of London, the competition attracted over 200 entries from 16 countries around the world. The 100 shortlisted ideas will be on display in a free public exhibition at the NLA galleries in The Building Centre from October 15, 2015. Ten winning ideas, selected by the jury, will be announced in October, with winning submitters invited to join a Greater London Authority working group to examine how their ideas can be applied to real London sites to deliver future housing for the capital. Attracting submissions from world-renowned architects including Rogers Stirk Harbour and Partners, Grimshaw, Farrells, dRMM, Mae Architects, Feilden Clegg Bradley and SimpsonHaugh and Partners, as well as developers, consultants, local boroughs and everyday Londoners, the shortlist presents a selection of radical ideas from living on the Thames to the creation of a new mega-city. As London debates where to house the growing population, a number of ideas examine how we can increase densities in town centres, around stations, and in the suburbs. The redevelopment of London’s suburbs proved to be a strong theme with Alastair Parvin and Adam Towle in partnership with the WikiHouse Foundation proposing the introduction of a new initiative called ‘Right to Replace’. The scheme would enable homeowners to demolish their properties in the suburbs to create their dream home but only if they use half the space. Suburban houses are often inefficient with energy and land, so this concept would provide new eco-friendly homes, designed to the owner’s preference, whilst freeing up space for an extra residence. More ambitious proposals include transformations of the outer London region, such as property consultants GL Hearn’s idea for a mega-city near the M25, supplying a vast number of new homes as well as new workspaces, retail, public realm and infrastructure links. Making better use of London’s canal and river network proves another strong theme. Baca Architects’ entry would create 7,500 new fixed-placed floating homes on the city’s canal network, which they believe could be completed in a mere six to 12 months. Similarly, architecture studio dRMM have worked on a scheme called Floatopolis, a larger, more utopian vision to transform London’s famous docks and sites on the River Thames into water neighbourhoods that not only encompass housing but also lidos, open-air cinemas, workspaces, cafés and schools. Continuing this line of enquiry, Farrells and Buro Happold collaborated to look at the Thames from an infrastructure viewpoint. Through the creation of low-level bridges across east London, the duo suggests that a further 50,000 new homes could be created simply through areas becoming better connected with transport links. There are currently 34 bridges in London, only one is situated east of Tower Bridge. The

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creation of these bridges would encourage investment in a number of areas that are currently being overlooked.Others explored infilling unused land, with ideas ranging from brownfield sites to repurposing rooftops. WSP | Parsons Brinckerhoff’s research into delivering housing on top of existing public buildings such as hospitals, schools and libraries suggests that a total of 630,000 new homes could be delivered through this method – far outnumbering the current need of 440,000. Bell Phillips Architects proposes adding modular housing to the flat roofs of post-war housing estates, whilst Akira Yamanaka Architects’ submission aims to create micro-housing in the gaps between terraced and semi-detached homes. Self-build communities were put forward as a viable option with the emphasis falling on homeowners to take the future of their properties into their own hands. Ideas ranged from an app that located sites for future development to a new ‘build-to-own’ financing and ownership model by Savills. Global architecture practice NBBJ presented one of the more dramatic transformations of the London streetscape by replacing a selection of roads with rows of new dwellings. With 9,000 miles of streets in London – equating to over a third of London’s built surface area – changing sections of the current road network would create more pedestrian-friendly areas and a better community feel for residents. Entries submitted demonstrated that designers are interested in developing new construction methods and pre-fabrication. A flexible apartment plan designed by Levitt Bernstein that would allow the occupant to transform the floor plan from a one-bedroom to a four-bedroom showcased how construction could provide adaptability. Y:Cube by Rogers Stirk Harbour and Partners shows how prefabrication can make well-designed, single apartment homes easy and cheap to manufacture within factories. Lord Bob Kerslake, Chair, London Housing Commission said: “The scale of the challenge is so big that we genuinely need some fresh thinking. There are a lot of new ideas here particularly new approaches to tenure and off site construction.” Source: Arabian Business Back to Index

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FALCONCITY'S EGYPTIAN PYRAMIDS

‘YET TO WIN PLANNING APPROVAL’

WEDNESDAY 23 SEPTEMBER 2015 The developer hoping to build a replica of the Egyptian pyramids and other attractions in Dubai has yet to be granted approval from the authorities, it has emerged. A decade after the ambitious Falconcity of Wonders project was launched to investors, the developer is still awaiting consent to recreate world wonders including the Pyramids, Eiffel Tower and Taj Mahal. Falconcity was exhibiting at last week’s Cityscape conference in Dubai and, according to a statement on its website, intended to give investors and media an update on the plans. According to the National newspaper, Alharith Bin Salem Al Moosa, vice-chairman of Falconcity, said: “The designs for the pyramids are with Dubai Municipality. “However, with such complicated buildings and the drawing still not approved from the municipality it will be 36 months, at least, before we see them.” The original plan was for the area to house 75,000 people by 2021 – as well as the proposed attractions. So far, around 400 villas at the mixed use scheme have been built and around 2,000 residents have moved in, according to the report. But the development was hit by the global recession and has struggled to get off the ground. Matthew Green, head of research at CBRE, was quoted as saying: “I feel 75,000 residents is unrealistic. “[The developer has had relative success with the functional villas, but I think Dubai has moved on from rebuilding the Leaning Tower of Pisa.” On July 8, Falconcity announced a new “smart” online customer service website where prospective and existing residents can make requests for title deeds, maintenance, mortage credit and other services. Source: Arabian Business Back to Index

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INVESTORS IN MIDDLE EAST REMAIN

INTERESTED IN HOTEL ACQUISITIONS

SUNDAY 20 SEPTEMBER 2015 Middle Eastern investors are expected to remain active hotel buyers this year despite a weakening oil prices. “Western Europe and the US will attract more and more Middle Eastern investors,” said Chiheb Ben Mahmoud, the head of hotels and hospitality for Middle East and Africa at JLL. “Depending on their portfolios and investment styles and strategies, some other Middle Eastern investors will be interested by off-road ventures in newly emerging destinations with different risk return propositions.” While the falling price of oil was widely expected to have an impact on international hotel acquisitions, it has not yet been felt. “We are talking about the global capital market and it is affected by a large number of factors,” said Mr Ben Mahmoud. Brent oil fell to about $47.47 per barrel last week from $96.97 a year ago. During the first half of this year, about $10 billion was spent by Middle East investors buying hotels in Europe and the United States, he said. But some regional investors are looking to exit their hotel assets.Qatar-backed Katara Hospitality is in talks to sell the luxury hotel chain Fairmont, according to UK media reports last month. Among the investors in FRHI Hotels and Resorts is Saudi prince Al Waleed bin Talal’s Kingdom Holding. The hotel chain operates the Fairmont, Raffles and Swissôtel brands. In May, the group opened the 252-room Fairmont Ajman. One of the potential buyers of Fairmont is InterContinental Hotels Group (IHG), which is also eyeing Mövenpick, according to media reports. IHG did not immediately return emails and FHRI said the reports were speculative. JLL expects 2015 to be a bumper year for hotel transactions, according to Mr Ben Mahmoud. The value of deals is expected to exceed US$65 billion, up by 15 per cent over last year’s volumes. Transaction volumes in the Americas could reach $34.5bn, followed by Europe, the Middle East and Africa at $24.7bn and Asia Pacific at $8.5bn, according to a JLL report in January. “Last year, Asian investors represented 43.2 per cent of the cross-border hotel transactions, and the flow of money from Asia into the mature markets of North America, Europe and Australia is anticipated to keep rising,” according to EY analysts. This week, Katara Hospitality announced it would buy the 316-room The Westin Excelsior Rome from Starwood Hotels & Resorts for €222 million. Katara has 35 properties in operation or under development worldwide, and expects to add 26 more by 2026. Source: The National Back to Index

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BUILDER PULLS OUT OF DH980M MEENA PLAZA PROJECT IN ABU DHABI ‘AFTER NOT BEING PAID’

MONDAY 21 SEPTEMBER 2015 A Malaysian construction company that was supposed to be building a Dh980 million mixed-use project in Abu Dhabi has said it is pulling out because it has not been paid. Zelan Holdings issued a notice last Thursday to Meena Holdings, the developer building the project in the Port Zayed area of the capital, detailing its plan to terminate their agreement. Zelan had signed a contract to build package two of the Meena Plaza project, which was meant to contain three apartment towers and one office tower, in 2008. The project was intended to be made up of 246,000 square metres of buildings and include a helipad sun bathing deck, a covered Jacuzzi and wading pool, a cinema and private medical centre. Work had started and stopped several times,but a new agreement was signed last September after Meena Holdings agreed to pay Zelan Dh121.63m, which it said was owed for work done. As part of the deal, the contract price was revised upwards for a second time to just more than Dh980m. It was initially expected to cost Dh925m. But on Thursday, Zelan again announced that it was halting work and was looking to terminate its agreement. In a statement to Malaysia’s stock exchange, Zelan said Meena Holdings had failed to pay Dh27.6m for work done and materials supplied. It also highlighted “the employer’s continuous interference with the valuation and/or certification” of its claims for money owed. Zelan said it was now looking to terminate its contract within the next 14 days as a result of that. It said it “will take the appropriate steps to pursue its claims against the employer and recover any loss and damage arising out of the termination”. Meena Holdings could not be reached for comment. The company was set up to create the project by a number of shareholders, including the privately- owned Abu Dhabi developer Tamouh. A Tamouh spokesman said it “is not in a position to comment on this matter as we are not the only employers of the contractor Zelan. In fact there are several parties and investors involved in the development of Meena Plaza. “However, we are aware of the dispute taking place between the employers and the contractor, which we understand had to be reported to the Malaysian Stock Exchange Authority by Zelan pursuant to clauses specific to the country’s laws, given that the contractor is a public company listed on the Bursa Malaysia,” he said.

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“Though we are not directly involved in the resolution of this disagreement, due to our minority ownership and having no direct role in the management of this project, we are confident that this matter will be settled shortly with all the relevant technical teams. It is the priority of all concerned parties to reach an amicable resolution and the delivery of the project on the planned date.” Source: The National Back to Index

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DAMAC RAISES $100M VIA SUKUK

TUESDAY 22 SEPTEMBER 2015 The Dubai developer Damac Properties has announced that its main property development arm, Damac Real Estate Development, has issued US$100 million of unsecured debt via a sukuk. In a brief statement, the company’s chief financial officer Adil Taqi said that the proceeds would be used “for general corporate purposes and for the acquisition of land plots to strengthen and extend the company’s development pipeline, in accordance with our medium-term funding strategy”. The 18-month debt certificates were secured by way of a private placement and have been rated as BB by the debt agency Standard & Poor’s. Damac Properties reported a net profit of Dh2.7 billion for the six months to June 30 and a Dh4.7bn turnover. No comparable figures were given for the previous year as it only listed on the Dubai Financial Market in January, but when compared with its London-listed predecessor Damac Real Estate Development its figures represented a 57 per cent hike in profit and a 30 per cent increase in turnover. Damac Properties finished the period with cash in hand and in its bank balance of US$2.4bn, which was a 32 per cent increase on the amount held six months earlier. However, when announcing its half-year results Damac said that it could increase its current debt level of $800m to $1.1bn to give it greater flexibility over cash. Walid Bellaha, an emerging markets analyst with Barclays, said that although the company has healthy cash assets of about $2.4bn, most of this money sits in escrow accounts, which is only made available once new homes are handed over. “The free cash the company has available is only about $350m,” he said. “They want to have this flexibility for cash. They have started paying significant dividends and they still plan on [launching] new projects.” This year, Damac announced that it planned to pay two dividends for 2015 totalling 25 per cent – up from 10 per cent in 2014. It also said it would pay dividends of about 25 per cent next year. Mr Bellaha said this was likely to cost the company $250m during the second half of 2015, plus $400m next year. However, its current cash pile is also likely to be replenished as it anticipates the handover of 1,000 units in the second half – on top of the 1,500 delivered in the first six months. “They have said they are comfortable with leverage of 1.1x corresponding to about $1.1bn based on their last reported 12-month Ebota,” he said. “They can add a further $200m this year if they find something opportunistic that they want to employ the money for.” Emirates NBD was the sole bookrunner for the fundraising. Source: The National Back to Index

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LEARNING THE ART OF HOSPITALITY FROM HOTEL INTERNSHIPS

TUESDAY 22 SEPTEMBER 2015 It was during his internship at a five-star hotel in Abu Dhabi that Wissam Al Saadi learnt never to underestimate the importance of the TripAdvisor website. The Palestinian-Canadian, 21, is studying for a diploma in hotel management and tourism at the European International College (EIC) and secured a six-month placement in a luxury hotel’s front office earlier this year. “The first thing my hotel manager did every morning was to switch on his computer and check the rankings on TripAdvisor,” he recalls. “If a member of staff gets a bad review, they are in big trouble.” Currently the only institution in the capital offering hotel management and tourism courses, EIC has partnered with a number of UAE hotels to offer on-the-job training to students. Such training is vital in the rapidly growing industry. The number of visitors to the capital rose by about 20 per cent to 1.98 million in the first half of this year from the same period last year, according to the Abu Dhabi Tourism and Culture Authority. That is good news for the city’s hotels but also for EIC students, many of whom hope to find work in Abu Dhabi when they graduate. The college, which has about 200 students, is moving to a new, bigger campus in Karama next month as more school leavers consider a career in hospitality. Unlike EIC’s current villa campus on Muroor Road, which opened nine years ago, the new site has its own kitchen and restaurant facilities to replicate hotels in the emirate. “With Expo 2020 around the corner, we are expecting more students as opportunities in the tourism sector continue to increase,” says Thouraya Labben, dean of EIC. According to a JLL report released in July, 5,200 new hotel rooms will open up by 2017 in Abu Dhabi. Sixty per cent of EIC students are enrolled in bachelor’s degree courses and diplomas in hotel management and tourism, the rest pursue master of business administration or bachelor of business administration studies. But Ms Labben says that an education in tourism and hotel management does not restrict graduates to jobs in the travel and hospitality sector. “Career options are wider than that. Any professional who has an education in hotel and tourism management learns the highest levels of customer service, which can be put to use in many fields,” she says. Ms Labben adds that customer service skills are increasingly desirable to employers, as more jobs are set to become automated. The Oxford Martin Programme on the Impacts of Future Technology (2013) estimated that 45 per cent of jobs would be automated within 20 years. “More and more companies don’t differentiate themselves with their product, but with the service that they are delivering,” says Ms Labben. “Technically, a product can be easily imitated. But customer service is ‘savoir faire’ – it cannot be duplicated. That’s why demand is going to increase for hotel management courses.”

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Ms Labben defines EIC as a boutique higher education institution. “The boutique concept emerged in the hotel industry when small hotels decided to differentiate themselves from big hotels through a trendy and customised service,” says Ms Labben. “We were inspired by this and deliberately opted to be a small institution. Our success does not depend on the number of students. What matters is the quality of education.” But the hands-on experience students are exposed to is also key. Wissam Fattoum, a 25-year-old Tunisian student, completed a six-month internship this year in the front office of the Hilton Abu Dhabi hotel on the Corniche, and in the kitchens of Al Raha Beach Hotel. He is now in the final term of his bachelor’s degree study. “The reality was not always the same as what I’d learnt in the classroom,” he says. “The rule is ‘never say no to a guest’. But sometimes hotels get overbooked, and it’s hard to deal with this. And sometimes you have really rude guests to deal with.” For the Tanzanian student Maryam Yahya, 23, she too, like Mr Al Saadi, discovered the value of TripAdvisor. After three weeks of her internship at Holiday Inn Abu Dhabi, she received a rave review that led to her promotion to run the guest relations department. “TripAdvisor is very important, it has changed the competition within the hotel industry,” she says. “It’s a pressure on us, but it’s also an exciting challenge because we’re young and we have that hunger to learn.” Born and raised in Abu Dhabi, Ms Yahya hopes Holiday Inn will offer her a job when she graduates. s For Mr Al Saadi, there was more to his internship than worrying about online guest reviews. “When they arrive, all the guests want to be upgraded to the best room, with the best view, and you simply can’t always please everyone,” he says. “The main thing I learnt was how to be hospitable in these situations.” Source: The National Back to Index

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LONDON REAL ESTATE REMAINS A

BRIGHT SPOT AMID UAE MALAISE

WEDNESDAY 23 SEPTEMBER 2015 As ever, the outlook for the UAE property market remains a fiercely debated topic. Although prices continue to fall at the top end of Dubai’s real estate market, according to the latest UBS Prices and Earnings study – which examines prices, wages and earners’ purchasing power in 71 cities globally – housing costs in Dubai are still among the four most expensive in the world. And a report from Asteco this month revealed that luxury property prices dropped an average of 10 per cent in the past quarter. Apartments in Dubai Marina have declined in value by as much as 17 per cent and Palm Jumeirah units have slumped 13 per cent. For an end-user looking to buy in the UAE, the recent pullback in prices could be the right time to jump into the market. But as an investor, the latest bout of market volatility is cause for concern. I would be hesitant to predict what will happen next. Will safe-haven markets such as London continue to hold their allure for UAE investors seeking shelter from the local residential storm? In a word, yes. London’s property market continues to offer something for every investor’s strategy and risk appetite. In fact, in the early days of the global financial crisis, London property experienced significantly shallower dips, and a much faster recovery, than other, more liquid investment assets. It continues to rise in value and at a historic pace. To best explain the popularity of London property, let’s start with the bigger picture. A robust economy, a strong sovereign currency and a booming population are all driving demand for housing. Balance this against the city’s endemic shortfall of new homes and it is little surprise that prices continue to track steadily upwards – perfect conditions for the longer term, five to 10-year investment play that most investors would be wise to take. For buy-to-let investors, London’s rental market is also in rude health, delivering yields of up to 6 per cent in Outer London. This trend is often described as the “ripple effect”, and also drives capital growth patterns. With prime central property appreciating an average of only 2 per cent in value over the past 12 months, buyers are starting to seek out new pockets of value in Outer London, where gains of more than 25 per cent are forecast in the next three years. For many investors, especially those not familiar with London, predicting exactly where these pockets of value will emerge next is the tricky part. A glance at the city’s future commuter train map – which is due to be transformed from 2018 when Crossrail welcomes its first passengers – is a useful first step. Europe’s largest construction project will provide a major new rail service, connecting 40 stations along its 100-kilometre route between Berkshire in the west and Essex in the east – dramatically shortening travel times between key commuter towns and the City, Canary Wharf and Heathrow Airport. The Crossrail stations connecting Outer London property markets are starting to show massive potential. Ilford is one town that is expected to be a major beneficiary. Crossrail’s arrival there will cut travel times to some key central locations in half, with the journey to Heathrow reduced to 52 minutes from 71. Since the scheme received a green light in 2008, the value of properties within 500 metres of the town’s future Crossrail station have risen 17 per cent, a rate well above that of the local market. As a result of Crossrail, and the lack of housing to meet increased demand, the property market remains strong and investors entering the market can expect gross yields as high as 7 per cent a year.

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The case of Ilford illustrates this key point: to unlock value, you need to be selective and do your research. The potential for strong gains remains. This is why UAE investors, in certain and uncertain times, continue to look to London’s property market with confidence. Source: The National Back to Index

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UK’S ASSAEL ARCHITECTURE TO SET

UP SHOP IN ABU DHABI THIS YEAR

WEDNESDAY 23 SEPTEMBER 2015 The co-founder of UK-based Assael Architecture plans to open an office in Abu Dhabi by the end of the year. John Assael, who is also the chairman, has started recruiting staff. The firm will target projects such as master planning and designing large, residential-led communities. “It’s been very interesting listening to people talking about the need for middle-income housing [in the Gulf], because this is something we are specialists in,” he said in an interview. “We’ve been advising the mayor in London and also the British government on a new sector, which is the private rental sector, where we have institutional investors [funding projects].” Mr Assael already has links with the GCC. He opened an office in Bahrain on the same day that he opened his first office in London in 1979, but later decided to return to London to focus his efforts on one market. “I wanted to get a big reputation in London, so I decided I was going to focus on that. There are about 3,500 architecture firms in the UK, and we’re about No 50,” said Mr Assael. Assael Architecture also advises many Arabian Gulf clients on projects in London, and it recently created a new master plan for Dubai’s Za’abeel Park. Mr Assael said he considered Bahrain and Dubai for his new headquarters in the Arabian Gulf, but “we think the real opportunities are in Abu Dhabi”. His company has worked with the Urban Land Institute in Britain to create a housing model for developers and investors looking to target the build to rent sector. “Those are particular skills I can bring. I would love to be able to share my knowledge here in the Gulf to help developers and even the government focus on the private rental sector,” said Mr Assael. Abu Dhabi United Group, an investment fund, has made some investments in the affordable housing sector in the UK. It has yet to do so in the UAE, where government housing programmes have been geared towards Emiratis. Last year, the fund signed a 10-year, £1 billion (Dh5.62bn) agreement with Manchester City Council to develop up to 6,000 affordable homes for rent in the city. The first phase of the initiative, known as Manchester Home, will build 830 homes for rent on six sites close to the city centre. A contractor was appointed this month to build the first of these homes, and work is set to start next month. The property consultancy JLL recently released a white paper on the requirements for affordable housing in the Middle East. In the UAE, it defined affordable housing as homes for middle-income families with monthly household earnings of between Dh10,000 and Dh30,000. About 39 per cent of households in the UAE are in that bracket. Speaking at the recent Cityscape conference, Craig Plumb, JLL’s head of research for the Middle East and Africa, said there was a shortage of about 3.5 million affordable homes across the Middle East.

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He said governments could help by encouraging developers to provide more affordable housing through inclusionary zoning regulations, where developers are required to build a minimum number of affordable homes for individual projects. “It’s also important to have regulations that keep units affordable. What’s happened in the past is that affordable units have been affordable when they have launched, but by the time they have been flipped or sold on few times, they no longer are,” said Mr Plumb. Source: The National Back to Index

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RAS AL KHAIMAH PLANS TO ATTRACT 60,000 EUROPEAN TOURISTS FOR

HOLIDAY SEASON

THURSDAY 24 SEPTEMBER 2015 Ras Al Khaimah plans to attract 60,000 tourists on charter flights from Europe over the upcoming holiday season as the northernmost emirate invests heavily in new resorts. RAK has joined hands with two charter flight companies in Europe to transport thousands of tourists to the emirate for the peak tourism season. From October through next May, Sun Express, owned by the German tour operator FTI, could fly 40,000 tourists to RAK, while Poland’s Itaka Travel Agency could transport 20,000 tourists through charter flights. “That is our premium peak period for us,” said Haitham Mattar, the chief executive of Ras Al Khaimah Tourism Development Authority (RAK TDA). “Besides the charter flights, we do receive a high number of tourists that come through scheduled flights from Air Arabia into Sharjah and RAK, as well as Emirates airline into Dubai.” From November, the authority would promote the emirate along with Dubai as part of a package tour with Emirates airline for Russians. “We have seen a slowdown in the Russian market, but the diversity of the markets that we have has enabled us to grow and we have not lost on the [hotel] occupancy,” Mr Mattar said. “The potential growth markets are India, China and Turkey.” The number of Russian tourists visiting the UAE has fallen this year because of Russia’s slowing economy, the declining rouble and the collapse of oil prices. In March, tourist arrivals from Russia and Commonwealth of Independent States countries at Dubai International Airport in the first quarter fell 31.7 per cent from the same period last year. The spending of Russian tourists also declined in the first quarter, according to data from Network International, a payments processing firm in Dubai. RAK TDA is expecting a 16.4 per cent rise in the number of tourists this year to 850,000, from 730,000 last year. RAK expects to receive 1 million tourists in 2018. Working with the tourism authorities in Dubai and Abu Dhabi, RAK TDA has created tour packages for stopovers in the emirate. Britain, Russia and Germany are among the top tourist source markets for RAK. “It remains to be seen whether new hotel openings have managed to attract more arrivals from other origins, like the UK and Germany, which could potentially offset that reduction [of Russian tourists],” said Benjamin Young, an analyst at Standard and Poor’s. Tourism currently makes up 2.5 per cent of RAK’s GDP, with the federal government providing funding for the emirate’s basic public services and infrastructure.

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“We understand that key contributors to the federal budget, including Abu Dhabi’s contribution, will reduce this year as a reaction to lower oil revenues. In turn, we expect that this could translate into lower federal expenditures in Ras Al Khaimah,” said Mr Young. The emirate is, however, gradually ramping up its tourism infrastructure. RAK, which has 5,000 hotel rooms at 19 hotels, expects to increase the number of hotel rooms by 3,500 by 2019 across 12 hotels. That includes a 300-room Marriott resort that is expected to open in 2019 and a 250-room Anantara Mina Al Arab in 2018. Most of the growth in the hotel sector is expected to take place along the coast. Beachfront properties will make up about 95 per cent of the hotels in RAK by 2019, up from the present 0 per cent. Some hotels in the emirate’s city are also up for a revamp. The 475-room Hilton, which opened in 1992 as the emirate’s first five-star property and is owned by its government, will undergo renovation with government funds. The renovation is expected to take two years. “So, they are still putting in the funds [in tourism despite the oil price fluctuations],” said Mr Mattar. “We haven’t seen a slowdown in the funding from the federal government.” Last month, hotels in RAK reported an average occupancy rate of 67.3 per cent, up 21 per cent from the same period last year. Room revenues grew 13.3 per cent. For the year so far, the hotel occupancy rate is 61.6 per cent, up 8.6 per cent from the same period last year. Al Marjan Island is among the ongoing major tourism and real estate projects, and the island is expected to have 20 hotels by 2025, according to Mr Mattar. The island presently has three hotels, with five under construction. Source: The National Back to Index

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BRITISH INTEREST IN DUBAI PROPERTY SURGES AS HOUSE PRICES

SLOW

THURSDAY 24 SEPTEMBER 2015 A slowdown in house prices in Dubai coupled with high rents and low UK yields is prompting a spike of interest among British investors in cheaper property hot spots in the emirate. According to figures from the property website Bayut.com, the more affordable area of Dubai Sports City has become the most-viewed real estate location this year. It found that 16.9 per cent of web users in Britain looked at properties in Dubai Sports City in the year to August – overtaking the perennial favourite Dubai Marina, which drew16.7 per cent of views. It was followed by Downtown Dubai, which attracted 13.3 per cent of UK views, and Jumeirah Lake Towers, which drew 12.5 per cent. Bayut said the increasing popularity of Dubai Sports City contrasted strongly with the same period a year ago, when the upmarket area of Dubai Marina was the clear favourite. Dubai Marina attracted more than a quarter of all UK views (26.1 per cent) to Bayut’s website a year ago. Bayut said it was unable to provide overall numbers for hits to its website. Haider Khan, Bayut’s chief executive, said: “2015 has so far been all about affordability. Although Dubai Marina remains at the No 2 spot, affordable options such as Dubai Sports City have made their way up the ladder.” With residential rents in Dubai remaining broadly stable this year but house prices reportedly falling, the surge in interest is likely from either prospective renters hoping to clinch a cheap rent or from investors looking to exploit increasing yields in the cheaper areas of Dubai compared with those in London. Property brokers in Dubai estimate that yields in the cheaper areas of the city such as Sports City vary somewhere between 6 and 8 per cent. By contrast, residential yields in prime central London can be as low as 2.5 per cent. “Broadly speaking, rents in Dubai have remained stable while prices have fallen, so yields have increased,” said Craig Plumb, JLL’s head of research in Dubai. “But for cheaper areas such as Sports City, yields will be higher than those in more established areas. And value for money is becoming more important for both renters and investors.” When it came to views from India, Bayut said there was little change in the most popular properties. Dubai Marina again was the most popular area, attracting 22.3 per cent of traffic – compared with 25.8 per cent for the same period in the previous year. Business Bay was the second-most popular area for Indians, the website said, attracting 19.5 per cent of hits from the subcontinent, up from 6.1 per cent the previous year.

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“Just like other foreign investors, Indians also remain on the lookout for the most lucrative real estate option in Dubai, which turns out to be none other than Dubai Marina,” Bayut said.

The development of Dubai Water Canal was attracting more investors to the Business Bay area, it said. In July, Bayut reported that sales values in Dubai dropped between 5 and 10 per cent in the first half of this year compared to the same period last year, led by a stronger US dollar, international sanctions on Russia, the oil price slump, euro-zone economic turmoil and the IMF’s less-than-promising outlook for the global economy. It corresponds with reports from other experts. CBRE reported this month that Dubai house prices had fallen 6 per cent through July and last month from the same period a year earlier. Source: The National Back to Index

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ZAHA HADID, DESIGNER OF SHEIKH ZAYED BRIDGE IN ABU DHABI, BLAZES TRAIL FOR WOMEN WITH RIBA GOLD

MEDAL

THURSDAY 24 SEPTEMBER 2015 Zaha Hadid has become the first woman to be awarded a royal gold medal by the Royal Institute of British Architects (Riba). The architect, who was born in Iraq and whose practice in London is involved in several projects across the Arabian Gulf, was awarded the prize in recognition of her lifetime body of work. The award, established in 1848 and approved by the Queen, is considered one of the most prestigious in the industry. Past recipients of the gold medal include Frank Lloyd Wright (1941), Le Corbusier (1953), Norman Foster (1983) and Frank Gehry (2000). Ms Hadid has designed The Opus mixed-use tower in Dubai, Al Wakrah Stadium in Qatar and the new metro station for the King Abdullah Financial District in Riyadh. These projects are all being built. Ms Hadid also designed the Sheikh Zayed Bridge in Abu Dhabi and the King Abdullah Petroleum Studies and Research Centre in Riyadh. “I am very proud to be awarded the Royal Gold Medal, and in particular to be the first woman to receive the honour in her own right,” said Ms Hadid. “We now see more established female architects all the time. That doesn’t mean it’s easy.” Sometimes the challenges are immense. There has been tremendous change over recent years and we will continue this progress.” Ms Hadid later cut short a BBC interview, during which she was asked about allegations over construction worker deaths in Qatar. In a tense exchange with a BBC interviewer, she said:“There haven’t been any problems. I have to put you right. There hasn’t been a single problem at our stadium in Qatar. “I sued someone in the press for it and they had to withdraw it and apologise. Not on our site. Absolutely not.” Ms Hadid was also asked about the Japanese government’s decision to scrap the flagship stadium project that she had designed for the Tokyo 2020 Olympics – a move that she described as “a scandal”. Ms Hadid won an international competition to design the stadium three years ago. However, when the interviewer asked her to finish her answer quickly, she ended the interview. “Don’t ask me a question if you can’t let me finish it or I won’t say anything,” she said. The International Trade Union Confederation had published a report alleging that a large number of workers from India and Nepal had died while working in Qatar between 2011 and 2013.

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Workers from those two countries make up about 60 per cent of Qatar’s migrant worker population.

Enabling works on the Al Wakrah stadium project began in May last year, but the main construction contract only began in February this year. Work is being carried out by HBK Contracting, a Qatari company, and is due for completion in 2018 Source: The National Back to Index

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RENOVATION NEW NAME OF UAE

PROPERTY GAME

FRIDAY 25 SEPTEMBER 2015 When the British investment banker Sharaz Hussain moved to Dubai in 2010 with his wife and family, they decided it made financial sense to buy and renovate a property rather than rent. They bought a six-bedroom, five-bathroom villa in the Meadows in Emaar’s Emirates Living community and spent six months refurbishing it. By the time they finished, they had installed a glass staircase, a new bespoke kitchen, an open living space and completely landscaped the garden. “A lot of people just decide to rent, but rents are high and, with a commitment to three years, knowing the amount we would spend on rent, we thought we might as well buy and create a home we would like to live in,” says Mr Hussain, 44, a father of three whose wife Amber, 40, is a schoolteacher. But with house prices in Dubai the fastest-falling in the world this year, according to Knight Frank, is renovation the new name of the property game? Mohammed Khan, a residential sales and leasing consultant at Better Homes, estimates that renovations can add 10 to 15 per cent to the original sale price. “The most common upgrades are fittings and fixtures, a change of flooring, a new bathroom or the addition of a swimming pool,” he says. “I had a three-bedroom apartment for sale where the owner spent Dh50,000 replacing all the floor tiles with wood flooring and improving the finish. The new buyer chose my unit because of the renovations, paying an extra Dh100,000. Renovation doesn’t guarantee a successful sale at an increased price; however, in this case it worked.” While Mr Hussain won’t be drawn on how much they bought their villa for, or the renovation cost, he says they were “prudent”. “We kept to a relatively tight budget of 2 per cent of the property cost. You can do a lot without spending a lot.” So has it increased the value of the property? “The work added about 15 per cent to the value,” says Mr Hussain. “We had it valued after, and the agent was desperate to sell it, but we did it for ourselves as a home.” With the market also rising in the period leading up to this year, Mr Hussain estimates their villa is now worth 30 per cent more than when they bought. “It’s made the property more desirable. If you’ve seen 15 to 20 properties, they all very much look the same inside. Love it or hate it, ours is different. We noticed that where we live in the Meadows, a significant number of houses have now been renovated – or upgraded, as the agents say.” Prices in Dubai’s residential property market have dropped by about 10 per cent year-on-year because of fears of a glut of new supply coming on to the market. According to JLL, about 23,000 new homes are due to be handed over this year, but the company has said completion of some could be postponed to next year or 2017, depending on market conditions.

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Paul Philmore, managing director of the upmarket renovation company Space3, which refurbished the Hussain family home, says with the current market conditions, owners of more established properties – those that are eight, 10 or 12 years old – are almost forced to consider refurbishing. A Dubai resident for seven years, he has completed 40 to 45 full-home renovations in that time as well as hundreds of partial renovations. He is working on a Dh22 million villa in the Lakes bought two months ago and being remodelled for a further Dh3m. “Many homeowners have been living here for a while and their villas are getting a bit tired,” he says. “They want to enjoy their home and protect their investment in terms of keeping it in good condition, but they have an exit strategy and hope to add value by differentiating theirs from the other, original villas and add after-market appeal – and hopefully, value – when they sell.” But renovations do not come cheap. According to Mr Philmore, for an average detached villa in the Lakes or Meadows worth Dh4m to Dh5m, a full refurbishment generally costs Dh350,000 to Dh400,000 – about 10 per cent of the value. “In the more upmarket Dh20m villas, you could spend 20 per cent of the value on renovation,” he adds. Julian Straube, the managing partner of Algebra Contracting, set up his second business to support his estate agency, Algebra Real Estate, and specialises in Dubai Marina apartments. “Contracting came about because I was struggling to find reliable contractors myself,” he says. “My first project was my own first apartment – a standard two-bedroom in the Marina in a good quality building. I opened it up, made it more modern and redid the kitchen. I lived in it for five years, then rented it out furnished. The renovation cost me Dh40,000 and furniture Dh60,000. I got Dh25,000 more in rent annually – Dh155,000 when the market was at Dh130,000.” Mr Straube says the two things all his clients ask for are a new bathroom and kitchen, mainly because developers often “cheap out” on the size and fittings of these key rooms. The contractor says he will even remove a precious bedroom from an apartment – and yet increase its value. “Developers cram as many apartments as possible into a floor. You can’t fit in a king-size bed and there’s not enough wardrobe space. I spent Dh100,000 on a three-bedroom apartment and sold it as a two-bedroom for a million more … keeping in mind that the market was on an upturn.” Mr Straube claims renovation can add double its cost to the value, citing one two-bedroom Marina apartment. “We spent 25 per cent of the property value for renovation, but the rent increase was about 70 per cent – really substantial. The rule of thumb is that to renovate, you will get your money back in three years in rental increase,” he adds. But before readying your hammer and chisel, Ben Crompton, the managing partner of Crompton Partners, an estate agency set up in Abu Dhabi in 2012, sounds a note of caution. “Generally renovations don’t add value – people have a very clear idea of the price per square foot and you have to seriously differentiate from the apartment or villa beside it to be able to charge more,” he warns, adding that with most investment areas, particularly in Abu Dhabi, apartments no more than seven years old are not dilapidated enough to need upgrading. Another hurdle is gaining permission to carry out upgrades. “Developers in many cases do not permit large renovations,” says Mr Khan. “One exception was with the two-bedroom villas in [Nakheel’s] Jumeirah Village Triangle and Circle, originally 7,000 square feet with a maid’s room and a massive garden. The developer later permitted the addition of extra rooms, encouraging many owners to not only add multiple rooms but also extend the living and dining spaces.

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“What resulted was that a two-bedroom villa, originally sold for Dh2.8m and rented at Dh165,000, became a four to five-bedroom villa that sold for Dh3.8 million and rented at Dh230,000 to Dh250,000. The renovation cost was approximately Dh700,000 to 800,000, so the value was raised by 30 per cent.” And Mr Khan says owners should remember the renovation they choose may not be to everyone’s taste. “Aesthetic sense is so subjective,” he adds. Mr Crompton suggests sticking to neutral colours and styles. “In apartments we see cosmetic changes such as the addition of wallpaper – that doesn’t add value. In villas there’s more room for modifications – to add a pool, knock down a wall to open a kitchen or landscape a garden,” he says. “In Abu Dhabi, Saadiyat Island has the most potential with big gardens and a rambling layout.” Mr Straube’s advice for a successful return is to ensure any work does not “exceed the overall prestige of the project” – so don’t dress your apartment up beyond the finish of the development it sits in. “In the Marina, the buildings, facilities, pool, gym – from the outside they are far superior in quality than the actual apartments. In these cases, it’s worth it. “Get a good deal in the first place, and ensure you have no pressure to sell afterwards. Take the time to find a client who appreciates your renovation.” Source: The National Back to Index

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BESPOKE DUBAI HOME MADE ALL

THEIR OWN

SATURDAY 26 SEPTEMBER 2015 Sharaz and Amber Hussain share their renovated Meadows home with their three children – Eisa, 12; Amaya, eight; and Imani, six. The Hussains’ move to Dubai brought them from London, where space is confined, which is why they wanted to open out their six-bedroom, five-bathroom villa as much as possible. “The villa was eight years old but very dark with standard fittings. It wasn’t to our taste,” says Mr Hussain. To create the open-plan feel, they removed arches and squared off and removed columns where they could. “We were restricted by the developer from ripping out interior walls and ceilings, so one open living space downstairs was not doable. We put in a glass stairway, large and light tiles, and spotlights. Single- panel sheets of glass replaced windows.” The couple also redesigned the layout upstairs. “Standard houses here tend to have an en suite with every bedroom, but so small,” says Mr Hussain. “We now have a “Jack and Jill” – two bedrooms share a bathroom through two doors. We put in washbasins for the children that were slightly lower than standard, and an open living space and games area in the majlis.” They also redesigned the garden, which was heavily landscaped with lots of shrubbery, to accommodate their three young children. “We wanted lots of playground space. We landscaped, put in artificial grass and, for aesthetics and safety, moved the swimming pool to the very back of the garden. “One of the things that caught us by surprise here is that bespoke is probably no different to buying off the shelf, price-wise. We wanted the huge coffee table in the day room to be exactly the same colour as the kitchen units, so we just had one made and dipped it in the same paint. The front door adds a lot to the home – we initially had double doors and we now have a bespoke front door that we designed and could never normally have.” Source: The National Back to Index

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GIANT ADVERTS ON DELAYED DUBAI TOWER TO STAY IN PLACE FOR

ANOTHER YEAR

SATURDAY 26 SEPTEMBER 2015 Dubai’s biggest improvised billboards look set to be around for at least another 12 months. Al Wareed Advertising, which books the giant ads that hang off the site of the delayed Sky Spiral Towers project in Al Sufouh, has renewed its contract allowing it to hang ads from both sides of the building for at least another year. The company, founded by Tarek Al Wareed in 2006, has been using the site since 2011. Mr Al Wareed declined to state how much he charges for the ads, or how much he pays to hire the building. However, he said the clients that have used it – including Apple, Kia Motors and Cleartrip.ae – have been happy with the results. “The return on investment is really good,” he said. Etisalat has a 12-month contract for one side of the building. The other side is currently vacant after Apple’s recent campaign finished, but Mr Al Wareed said clients need to pay for periods of at least three months due to the set-up costs. “The location has a big production cost. The printing and installation of the artwork alone will cost over Dh300,000. It wouldn’t be feasible for the advertisers or for us to have it on a monthly basis. “Printing and installation also takes time – two weeks. We can do it faster – it was requested by Apple and it took three days only.” He claims that the wall banners hanging from the building are the biggest in the world. “When I discussed this with Guinness World Records, they told me it wasn’t the biggest because there is a building wrap in Taiwan. I don’t know how many thousand square metres. But that is a building wrap, not a wall banner.” The Dubai building belongs to Ahmed Abdul Rahim Ahmed Al Attar Properties, part of Al Attar Group. It started work on building a 45-storey building, with a pair of spiralling circular annexes at either end in 2007, appointing Cairo-based The Arab Contractors. The building was meant to house apartments and complete by late 2010. Mr Al Wareed said he knows that his rolling, 12-month contract for this site may not last for many more years. “Hopefully if the landlord is not going to start doing the facade work on the building [by then], we will renew it for one more year. This will be there for another one or two years maximum – not much more than that.” Requests submitted to Al Attar Group to give a completion date for the project were not answered.

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He says he has been approached by landlords of other stalled projects, but none have the prominence of this site, with the Etisalat banner visible from several kilometres away.

Lisa Knight, founder and director of Dubai-based The Brand Foundation, says that prominent outdoor adverts – especially on Sheikh Zayed Road – are effective. Her firm advises property clients including Asteco Property Management and a number of small and medium-sized property developers. She advises developer clients to use them “because, quite frankly, you can’t beat it in terms of exposure”. She added that apart from placing television adverts, it is the most expensive medium, costing upwards of Dh1 million per month. “If you’re advertising property, what people are looking for is credibility. If you see a large billboard – especially in a prominent position – you assume the developer is credible and has got the liquidity to afford such a large campaign,” she said. “Not many of the smaller players take it up, because of the outlay. But you can’t achieve that kind of exposure by spending Dh100,000-Dh200,000 on Google adverts. It’s incomparable.” Source: The National Back to Index

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VALUATION & ADVISORY

With 30 years of Middle East experience, Our professional advisory services are conducted Asteco’s Valuation & Advisory Services by suitably qualified personnel all of whom have had extensive real estate experience within the team brings together a group of the Gulf’s Middle East and internationally. leading real estate experts. Our valuations are carried out in accordance with Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai, Northern Emirates, Qatar, Jordan and the the Royal Institution of Chartered Surveyors (RICS) and International Valuation Standards Kingdom of Saudi Arabia not only provides a deep understanding of the local markets but also enables (IVS) and are undertaken by appropriately us to undertake large instructions where we can qualified valuers with extensive local experience. quickly apply resources to meet clients requirements. The Professional Services Asteco conducts Our breadth of experience across all the main throughout the region include: property sectors is underpinned by our sales, leasing and investment teams transacting in the market and a wealth of research that supports our decision • Consultancy and Advisory Services making. • Market Research John Allen BSc MRICS • Valuation Services Director, Valuation & Advisory

+971 4 403 7777 SALES [email protected] Asteco has established a large regional property

sales division with representatives based in UAE, Saudi Arabia, Qatar and Jordan. Julia Knibbs MSc Our sales teams have extensive experience in the Manager – Research and Consultancy - UAE negotiation and sale of a variety of assets. +971 4 403 7789 [email protected] LEASING Asteco has been instrumental in the leasing of many high-profile developments across the GCC.

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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.

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