News Brief 08

ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

NEWS BRIEF 08

SUNDAY, 25 FEBRUARY 2018

RESEARCH DEPARTMENT

ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

REAL ESTATE NEWS

UAE / GCC AVOIDING THE PITFALLS OF A PROPERTY INVESTMENT THE VAT CHALLENGE HOW VAT HAS AFFECTED DUBAI REAL ESTATE BUSINESSES, SO FAR GO THE ‘SMART’ WAY ON YOUR FACILITIES MANAGEMENT COSTS SAUDI ARABIA TO INVEST $64B IN ENTERTAINMENT IN NEXT DECADE 11 UPCOMING AND FASTEST GROWING AREAS IN UAE ALL YOU NEED TO KNOW ABOUT A PROPERTY'S MARKET VALUE WHEN PROPERTY PRICES ARE NO MORE IN SQUARE FEET EXPO 2020 TO DRIVE CONSTRUCTION BOOM IN UAE GREEN, HAPPY RESIDENCES: A DELICATE BALANCE REVEALED: UAE'S HOTTEST PROPERTY AREAS DUBAI MORE HOMES IN 2018 TO PUSH DOWN RENTS IN DUBAI, ABU DHABI SOBHA GROUP NAMES KEY CHANNEL PARTNERS FOR 2017 HIRA INDUSTRIES SETS UP FACILITY AT NATIONAL INDUSTRIES PARK PROPERTY PRICE CORRECTIONS IN DUBAI TO CONTINUE THIS YEAR DUBAI: THE EXHIBITION HALL OF ARCHITECTS STEPS TAKEN TO COOL DOWN DUBAI’S OFF-PLAN MARKET 50 PER CENT COMPLETION REQUIRED BEFORE OFF-PLAN SALES CAN BEGIN IN DUBAI DONALD TRUMP JR. VISITS INDIA TO HELP SELL APARTMENTS FIRST LOOK INSIDE A XXII CARAT VILLA EMIRATES REIT RECORDS PORTFOLIO VALUE OF $860M FOR 2017 NAKHEEL INKS BIGGEST PROJECT DEAL THIS YEAR NEW REPORT REVEALS CHEAPEST, COSTLIEST PLACES TO RENT IN DUBAI DUBAI’S HOTELS ROOM SUPPLY SET TO GROW BY 11.1% FROM 2017-19

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REAL ESTATE NEWS

DEVELOPERS NEED TO PUT 20% OF PROJECT VALUE IN ESCROW PROPOSED RULES MAY HIT OFF-PLAN SALES IN DUBAI DUBAI TO SOON UNVEIL FIRST 3D-PRINTED VILLA 5 AFFORDABLE APARTMENTS NEAR METRO STATIONS IN DUBAI FOR SOME DUBAI DEVELOPERS, OFF-PLAN SALES ARE PASSE DUBAI’S LAND DEPARTMENT RETAINS STATUS QUO ON OFF-PLAN SALES PAY WITH CRYPTOCURRENCY, GET DISCOUNT AT THIS PROPERTY ROOM RATES REVEALED FOR JUMEIRAH'S FIRST ZABEEL HOUSE HOTEL DORCHESTER COLLECTION TO MANAGE RECORD-BREAKING PALM JUMEIRAH PROJECT ABU DHABI ABU DHABI LAUNCHES AN INVESTMENT OFFICE TO ATTRACT FDI HOW DO I TACKLE MY ABU DHABI NEIGHBOUR'S NOISY PARTIES? NEW PROJECTS APPROVED IN ABU DHABI NORTHERN EMIRATES NOW, SHARJAH’S DH25B WATERFRONT CITY SETS SAIL COMING UP: NEW RETAIL PROJECT IN SHARJAH DEVELOPER OF DH25BN SHARJAH WATERFRONT CITY EXPECTS TO SELL PHASE ONE UNITS BY JUNE

INTERNATIONAL FREEDOM SLOGANS COME AT A PRICE FOR CATALONIA’S PROPERTY NEW SALES ROUND KICKS OFF AT LONDON’S CHELSEA CREEK LONDON BACK TO BEING TOP COMMERCIAL REALTY INVESTMENT HOTSPOT ACCORHOTELS SAYS PROFITS UP 66% IN 2017 RISING INTEREST RATES, INFLATION CONCERNS PUTTING UPWARD PRESSURE ON U.S. CAP RATES

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AVOIDING THE PITFALLS OF A PROPERTY INVESTMENT Wednesday, February 21, 2018 Although any asset is an achievement in itself, success to most property investors is really determined by their ability to continue purchasing real estate. Unfortunately, so many UAE residents save for years to be able to afford an investment property, but often once, they achieve this, their progress remains stagnant because they aren’t sure of their next move. Many people avoid investing in property entirely out of fear of failing, and the recession only cemented their worst fears. We also know that after the market plummeted in 2007, it took some time for investors to regain confidence in Dubai as a safe destination for property investment. Scores of residents and foreign investors managed to cash in at the high of the market, but countless saw major losses during the crash, before the market slowly re-emerged, albeit bruised and battered. Since then, keen investors have rightfully come to view Dubai’s real estate as a long-term game rather than an opportunity to make a quick buck. Investing is a long-term game, and if you want to see yourself grow financially, you have to think strategically. For example, in Old Town Dubai, the average price for a one-bed unit was approximately Dh600, 000 10 years ago, and it is now Dh1.2 million. The buy was in a time of crisis for the UAE economy. According to the Dubai Land Department, 69,000 transactions were done during 2017, with the overall transaction value at Dh285 billion. This certainly cements the idea that Dubai is a fertile ground for investors and reflects the strength of the market and its ability to grow. It also presents opportunities for both experienced and green investors to play a smart game. Throughout the years of building my own portfolio, I learnt that the attitude of the investor will continue to play a significant role in long-term investment success. I share below the five most common attitudes that cause people to ultimately fail in this market. Being selfish When a person is investing such a large amount, it’s natural for them to want it to be something that they consider perfect. When it comes to real estate, however, rather than purchasing a property based on personal preferences, it’s crucial to prioritise the wants and needs of the target tenant. If an investor puts themselves first, they not only decrease the pool of prospective tenants, but risk making emotionally charged decisions. Impatience When it comes to property investment, patience is definitely a virtue. Real estate is a long-term commitment, and a common example of an investor failing to reach their target financial outcome is when they lack patience and flip the property for a short-term gain. In order to increase capital growth, and guarantee rental advances, a property needs to be held for at least seven years. Dubai is now attracting long-term investors from all over the world and the flippers of yesteryear are out the door, patience will be a virtue and will pay off. Not taking responsibility

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Often there are numerous parties involved in purchasing an investment property, and a common mistake among failed investors is to blame others for issues that occur. Although certain tasks may be managed by particular people, the responsibility of the property ultimately lies with the investor. If something goes wrong, it is crucial to take accountability and work to rectify the situation rather than passing the blame. Hesitating Countless investors’ experience “analysis-paralysis” and overly scrutinise any potential purchase to ensure the property is perfect. Although it’s always important to make an informed decision, if an investor has done their due diligence and is comfortable with the return, it’s important to buy without too much hesitation to avoid missing out. Doing it alone In order to cut costs, many investors attempt to find, purchase, and manage a property alone. Although this is possible, for most, it results in failure or having to spend more in the long run to rectify problems that arise. To guarantee success it’s important to enlist the help of professionals who can ensure the entire process runs smoothly and with the investor’s best interests in mind. Source: Gulf News Back to Index

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THE VAT CHALLENGE Wednesday, February 21, 2018 While the new value-added tax (VAT) does not directly affect residential property, the housing market will definitely feel the effects of the new tax regime. From the outset, the increase in prices of goods and services in the UAE will take its toll on the purchasing power of residents, which will of course impact their budget on housing. “Major expenditures such as housing rental, education and healthcare services are either zero rated or exempt from VAT,” Mayank Sawhney, director at MaxGrowth Consulting, tells PW. “All these comprise around 60 per cent of total household expenses. So in essence, the VAT should have resulted in an inflation of 2 per cent.” However, retailers have not just increased prices based on VAT; many have built in much higher margins in their prices since January, according to Sawhney, bringing actual inflation closer to 4 per cent. “Most retailers are passing on the costs to the customers, so the costs have gone up,” says Shiraz Khan, senior tax advisor at Al Tamimi & Company. Wholesalers and retailers are also going to be affected and, therefore, this segment will have a new financial burden. “Commercial properties are subject to VAT and all shopkeepers and retailers will have to pay the implementation costs of the tax,” says Muhammad Sohaib, senior accountant at Al Yousuf Real Estate. Such costs include training expenses and software purchases, as well as hiring of VAT accountants. “For high-net-worth individuals, this will not make much of a difference,” notes Sawhney. “But for lower and mid- income people, especially when their salaries or business income is not increasing, even a 4 per cent increase in cost of living will have an effect on their spending.” A recent survey by finance comparison site Yallacompare found that almost half of UAE residents (44.6 per cent) are worried they will not be able to afford the increase cost of living brought about by the country’s implementation of VAT. However, the survey, which was conducted in December and polled nearly 200 UAE residents, found that more than 62 per cent expect a salary raise this year. “There is no big effect as the VAT is only on commercial property at the moment,” Laura Adams, managing director of Carlton Real Estate, tells PW. “We have seen no change in the market since it was introduced.” Moreover, VAT is only chargeable on agent commission and compared with the VAT rates of many other countries, 5 per cent is relatively low, adds Adams. “I believe the problem we have at the moment is pricing,” says Adams. “Tenants and buyers just cannot afford the going rents so are sharing, which is leaving a number of units vacant in the rental market.” There are around 60,140 apartments, 9,822 villas, 3,456 town houses and 7,5457 commercial units that are scheduled to be completed in Dubai this year, data from Propertymonitor shows. In comparison, only 14,514 apartments were completed last year, along with 6,015 villas, 1,898 town houses and 691 commercial units. Based on these figures, the market will see a 250 per cent increase in handovers this year as opposed to 2017, a huge increase that some fear could lead to an oversupply. With that in mind, those looking to sell or lease their properties need to be reasonable with their expected prices, says Adams. Investor mindset Analysts agree the UAE has one of the cheapest VAT rates globally. According to Adams, the UK applies a VAT rate of 20 per cent, Russia 18 per cent, Australia 10 per cent and China 17 per cent. Similarly, Khan points out that in

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Europe, the average VAT rate is over 20 per cent, and in Africa it is around 15 per cent. The global average of VAT or similar tax is around 19 per cent.

Even recently introduced VAT schemes in other countries are higher than the UAE’s. Malaysia introduced a 6 per cent goods and sales tax (GST) in April 2015, while India’s GST that came into effect last year is the highest in the world at 28 per cent, more than Hungary’s 27 per cent. “VAT is an investment-neutral tax, unlike corporate tax for example. Corporate tax is a tax on the profits of companies operating or doing business here, and this is what really affects direct investments,” Khan explains. “VAT is not supposed to be a cost to businesses. “If you’re operating businesses here, you’re collecting tax on behalf of the government. You act as an agent for the government. It shouldn’t be a cost to you. You’re supposed to pass it on to the customers by collecting it from them for the government.” While Dubai has long been positioned as a tax-free haven, this is no longer the case with the introduction of VAT. However, on the flipside, the UAE is moving in the right direction in terms of building trust with investors. The UAE, along with seven other countries, was removed from the European Union’s list of uncooperative tax havens in January, giving the country credit for further enhancing transparency in tax procedures. To strengthen ties with EU partners, the UAE signed 113 additional agreements to avoid double taxation and eight more to facilitate the exchange information for tax purposes. The country also took measures to comply with the Common Reporting Standard and to ensure a transparent flow of information with international partners, including the EU. “Media reports about Dubai being a ‘tax-free haven’ were related to the UAE not being prepared to give information for international assessors,” explains Sawhney. “That was a problem for the EU. Now the UAE has agreed to provide the necessary disclosures required and, as a result, the EU has withdrawn the country from the list — it has nothing to do with the VAT.” In the long term, VAT is expected to positively influence the real estate market, bringing in more transparency and regularisation and increasing its appeal to foreign investors. “The VAT will help in regularising a lot of processes in the UAE, which were not in line with international standards, because there was no proper system of maintaining books of accounts,” says Sawhney. “Now with every transaction you have to maintain proper documentation and disclose where the money came from — that will bring a lot of transparency to the sector.” Source: Gulf News Back to Index

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HOW VAT HAS AFFECTED DUBAI REAL ESTATE BUSINESSES, SO FAR Wednesday, February 21, 2018 It has been nearly two months since value-added tax (VAT) was introduced in the UAE and various industries are feeling its effects in different ways and varied intensity. While residential property is generally free from VAT, some Dubai real estate developers and brokers are feeling the pressure because other business expenses often incur VAT. To get a better view of the impact on real estate-related businesses in the early days of VAT, we talked to executives in the industry about their insights and how they are coping with the new tax regime. Cost-conscious developments VAT is making the construction and real estate community more cost-conscious. As a developer, we do not charge the 5 per cent VAT to our customers. However, there is VAT impact on all the outgoings like contractors, subcontractors, consultant, broker commission and supplier payments. For example, on a Dh100-million construction, we would be paying Dh5 million VAT on contractor bills from January 1. The additional cost makes everyone cost-conscious and going forward I assume the contractors will try to carry out the same volume of work at lower cost by being more efficient. In a way, VAT will make every business more careful and responsible about their expenses. - Atif Rahman, director and partner, Danube Properties Competitive pricing If a contractor passes on VAT-related costs to the developer, it is likely to have an impact on a developer’s selling price. However, with consumers becoming more price sensitive, keeping prices competitive is critical for developers. Hence, a sudden spike in launch prices, however small, could affect demand. As such, residential off- plan sales have been exempted from any VAT, but any future inflation in construction costs could impact sales prices. The first supply of residential property is zero-rated within three years of completion, which allows developers to recover VAT on the construction of residential properties, including elements on architectural design, consulting, contracting and materials used. However, real estate developers should consider the complexities arising from mixed developments involving commercial and residential leasing and the need to assign VAT recovery. -Vijay Doshi, managing director, Vincitore Real Estate Development No burden on buyers VAT has an impact on the developer, as it cannot pass on [the tax burden] to the buyer of residential property. Building material suppliers of our residential projects send us invoices with VAT, which we the developer absorb without burdening the buyers. Therefore, the burden stops at the developer level. This will have an impact on profits of the developer. In commercial properties, the developer can pass on VAT to the buyer, but the market is not conducive to increase prices. -Sailesh Jatania, CEO, Gemini Property Developers Minimal effect on cost Residential property is free of VAT, so neither the developer nor the buyer is affected by its implementation as developers can be reimbursed for VAT when the first supply is in the market. Therefore, the VAT expense effect

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comes down to be minimal, which should not bring any difference to the prices. Practically, the implementation of VAT will increase by 1.5-2.5 per cent the general expenses of any business in the UAE, since the companies are not paying VAT on all of its transactions. -Adnan Al Hamly, CEO, GPD Ghreiwati Property Development Agents incur costs Most buyers do not want to be paying the VAT costs and expect the agents to absorb the costs, which we agree on a case-to-case basis. Most renters so far have been complying with the VAT as the difference is minimal and hardly makes an impact on the overall value of rentals, but in case of high-end rentals for commercial, we feel the pinch as renters want the cost to be absorbed by the agents. Riyaz Merchant, CEO, Realty Force Real Estate Brokers Commissions are negotiated It has opened up a place for negotiations from the clients in the secondary market. Before VAT, the standard commission was 2 per cent that was never a part of the talks, now some of the clients are opening up the issue and asking us to absorb the VAT in the commission being charged. We hope that there would be a standard practice adopted throughout the market in a few months based on the market conditions. I don’t see anyone not concluding a deal because of the VAT, and the proportion of VAT impact on overall price is not that heavy. People were overall on a wait-and-see mode, but now from the start of this year more enquiries are moving on. -Pawan Batavia, CEO, Synergy Properties Buyers defer purchase It is probably too early to say with any degree of accuracy exactly how VAT has affected the cost of selling within the secondary market. I did, however, state last year that the sentiment would be affected by the introduction of this tax. Some buyers will defer the purchase of property, preferring to take a wait-and-see approach before taking the plunge. This potentially has already happened, as sales of off-plan units did slow down in January. If buyers are cautious, fewer sales will take place, putting pressure on an already challenging market. This, in turn, could lead to more softening of prices. -Mario Volpi, sales manager, Engel & Volkers Marginal rise on expense Residential sales and lease, not including short-term leases, are free from VAT. However, the 5 per cent VAT is applicable on incidental expenses, such as brokerage fees, trustee agent fee, no-objection certificate charges, district cooling, Dewa fees, etc. This is absorbed by the party responsible for such expense, unless agreed otherwise. For example, a landlord incurs VAT for maintaining a property, but cannot recover the VAT from the tenant, unless the rent is adjusted, which is difficult in today’s market. Landlord thus take a small hit on their returns. The impact of VAT could be very different for landlords who own whole buildings. However, VAT is not a deterrent for residential sales and leasing, as the expense is marginal and is now an acceptable practice. -Rajiv Ghanekar, senior real estate broker, Keller Williams Real Estate Dubai Increased transparency Nakheel had long been planning for the introduction of VAT by ensuring that all of our businesses were registered in time to comply with the new legislation. We are fully compliant with the new VAT regulations, even in cases where the business needs to absorb the VAT-associated costs. VAT will assist the government to further diversify its revenue streams and ensure that organisations become more transparent. Previously, companies had limited reporting requirements, but with the introduction of VAT, businesses will need to maintain records and report

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periodically. VAT will encourage greater transparency and accountability in businesses, including the real estate sector, with new auditing processes ensuring that companies comply. This new level of transparency will enhance best practice within the sector, further increase investor confidence and encourage new investors. - Sanjay Manchanda, CEO, Nakheel Source: Gulf News Back to Index

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GO THE ‘SMART’ WAY ON YOUR FACILITIES MANAGEMENT COSTS Monday, February 19, 2018 In a survey conducted a few months ago regarding maintenance, nearly 50 per cent of respondents across the various communities in Dubai listed the maintenance of air-conditioning (or lack thereof) as the number one issue at their place of living. Surprisingly, that number has remained the same over the years. Going back to polls conducted in 2010 (and published in various newspapers), the percentage who have remained dissatisfied with their air-conditioning repair has remained broadly the same. This is a stunning indictment of the maintenance industry in Dubai, and illustrates the challenges (as well as the opportunities) of a rapidly growing city. A fragmented industry serves as no excuse for a lack of service to the customer. In point of fact, it is the lack of service that allows for a fragmentation of the industry, something that has been seen in the facilities management and maintenance space. This has become even more prevalent with the generous use of the “Extended Enterprise Model”, otherwise known as outsourcing, leading to an endless loop of subcontractors. The customer has been the one that has suffered the most in this process, as survey after survey has demonstrated. Yet, curiously, it is these customers who have been resistant to the adoption of technological improvements that would obviate the need for accepting such substandard services. In today’s environment, smart appliances cannot only regulate the temperature remotely (via the smartphone, with the data being backed into the cloud), but also provide for alerts when the compressor is not working properly (either through a clogged filer and/or in need of a top up of the coolant). Similarly, cameras that come with facial recognition software allow not only for the alerting of strangers close to the property, but also sync with the security system of the house so as to restrict movement of young children. This is especially true in the case of villa communities where there is a fear of young toddlers wandering out of the front door and potentially into harm’s way. The challenge historically for adopting these technologies was the upfront cost involved. However, that has rapidly ceased being the focal concern for residents; instead it has been replaced with the fear of obsolescence, as customers face a bewildering array of options. Increasingly, the gadgetry involved is getting more sophisticated and is enabled with more functionality (for instance, washing machines that have inbuilt calculators in them ...). These choices become overwhelming, and for the vast majority of residents, the default option then becomes one of status quo. This leads them to accept an inferior level of service than what they have been dissatisfied with. Our advice has always been to keep things simple. Air-conditioning and basic security remain the primary concern for most residents, and any solution that is offered, has to be able to address these concerns in a cost-effective manner. The frequency of human inputs via external assistance has to be minimised, and where needed, inputted well in advance. With these basic guidelines in place, economics then takes over the equation, enabling most residents to be able to implement such solutions — increasingly, the installation can even be done in a DIY framework — with relative ease and simplicity.

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It is clear that the industry is moving towards such cost-effective solutions. Developers are even beginning to offer free cloud storage along with the devices in order to spur sales of their units.

However, the key remains the buy-in of the customer. Rather than pursuing the latest gadgetry, what is needed is a common-sensical approach to the problem, which is durable and which allows for monthly expenses to be controlled more efficiently without an unnecessary disruption of service in peak summer. These solutions exist, and where surveys, though of a smaller sample size, have been conducted for this subset of customers, satisfaction levels have increased significantly, thereby providing the customer with a sustainable solution. Source: Gulf News Back to Index

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SAUDI ARABIA TO INVEST $64B IN ENTERTAINMENT IN NEXT DECADE Thursday, February 22, 2018 Saudi Arabia announced plans Thursday to spend billions on building new venues and flying in Western acts, in a total overhaul of its entertainment sector that would been unthinkable not long ago. Long known for its ultra-conservative mores, the kingdom has embarked on a wide-ranging programme of social and economic reforms driven by Crown Prince Mohammad Bin Salman. At a glitzy press conference in Riyadh, General Entertainment Authority chief Ahmad Bin Aqeel Al-Khatib told reporters the kingdom is set to invest $64 billion (Dh235 billion) in its entertainment sector over the coming decade. “We are already building the infrastructure,” Al Khatib said, adding that ground had been broken for an opera house. “God willing, you will see a real change by 2020,” Al Khatib said, adding that more than 5,000 events were planned for the coming year. Behind him, a screen teased the names of international acts like Maroon 5, Andrea Bocelli and Cirque du Soleil. Neither a breakdown of how the money would be spent or a schedule for the cultural programme were provided. But it follows a series of events in recent months including concerts, a Comic-Con festival and a mixed-gender national day celebration that saw people dancing in the streets to thumping electronic music for the first time. Authorities have also announced plans to lift a decades-old ban on cinemas this year, with some 300 expected to open by 2030. The reforms are part of Prince Mohammad’s ambitious “Vision 2030” programme, which seeks to diversify the Saudi economy as it reels from a slump in energy prices, with the entertainment sector seen as a key potential source of growth. Saudis splurge billions annually on movies and visits to amusement parks in the neighbouring tourist hubs of Dubai and Bahrain, which is accessible by a land causeway. Disposable income of young Saudis Al Khatib vowed to turn around that trend. “I went to Bahrain. The bridge is being reversed,” he said, adding that Bahraini nationals were now coming to Saudi Arabia for events — accounting for 10 per cent of ticket sales in recent months. The goal to keep Saudis — more than half of whom are under 25 — spending their disposable income at home is part of a wider campaign called “Don’t travel”. Saudi Arabia, the world’s top oil exporter, has been struggling to cope with persistent budget deficits that began in 2014 when crude prices plummeted. The kingdom withdrew around $250 billion from its financial reserves in the past four years. Authorities have also increased fuel prices, introduced a value-added tax and cut subsidies in an effort to reduce costs and boost non- oil revenues. The shift has been a painful one for many Saudis accustomed to a generous welfare system. In December, the government announced a budget with record spending as it seeks to stimulate growth. Source: Gulf News Back to Index

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11 UPCOMING AND FASTEST GROWING AREAS IN UAE Thursday, February 22, 2018 Dubai's Jumeirah Village Circle, Abu Dhabi's Downtown, Sharjah's Al Wahda and Muwaileh, and are among the up-and-coming and fastest growing areas in UAE, according to the latest Propertyfinder Trends . At around 6 per cent cheaper to buy or rent a villa in The Springs, interest is rebounding in the community, Dubai's most popular place to rent a villa. Searches were up 32 per cent. Continuing on the affordability theme, Dubai's Jumeirah Village Circle and Studio City both experienced increased interest. JVC, where rents were down 12 per cent for a villa, experienced a glut of supply with a 55 per cent increase in listings. Demand followed, however, with a 27 per cent increase in residential searches. On the commercial side, Umm Ramool, one of Dubai's oldest industrial areas, experienced new interest. Searches for commercial space were up 120 per cent, with a 50 per cent spike in leads per listing (i.e., people expressing interest in a property). It was announced late last year that the airport-adjacent area is getting a 2.1 million square foot free zone dedicated to e-commerce, including office space and fulfillment and logistics centres, to be called Dubai CommerCity, a joint venture between Dubai Airport Freezone Authority (Dafza) and wasl Asset Management Group. Heading further north, Sharjah's Al Wahda and Muwaileh, despite downward pressure on prices, both saw an uptick in interest. Al Wahda quadrupled its search volume, while Muwaileh was up 72 per cent. In the capital, Abu Dhabi's Downtown is becoming more popular (+71 per cent search volume). Masdar City is officially on the map, with ambitions to house 40,000 people. The eco-city's residential searches tripled in 2017, proving the green movement is gaining momentum, the release added. Source: Khaleej Times Back to Index

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ALL YOU NEED TO KNOW ABOUT A PROPERTY'S MARKET VALUE Tuesday, February 20, 2018 The value of an asset is determined by the price a buyer is willing to pay and a seller is willing to sell for. The true meaning of market value as defined by the Royal Institution of Chartered Surveyors (the governing body that regulates all valuation surveyors) is: 'The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.' There can be differences between what the property is worth (market value) and the cost to buy it (price). The price paid may not represent the properties true market value. This is due to the listed property price simply reflecting what the seller is aiming to achieve and is not considered the actual market value. Only after negotiations between the buyer and the seller, the property is sold at a price that both parties agree on and can then be considered market evidence. This is providing the sale was made knowledgeably with no premiums, no hope value and no other reason the buyer may specifically want the property. What affects the value? The value of a property can be affected by many factors including: Location - proximity to schools, shops, malls, close to sea and major roads. Immediate location of the plot within a cluster of plots. View - a desirable view such as sea or marina views would add value to the property while a road or construction view would hinder the value. Age - older properties deteriorate over time and so does their value. Newer properties also tend to have newer features such as central AC, electric gates, pools, etc., which would add value. Size - the size of the plot and the built-up area of the property affects the value greatly. Use - the use of the property determines the level of income and demand for the property. Specification and additional features - examples include pool, gym, central AC, large open areas, marble flooring, kitchen and bathroom upgrades and other additions that add to the desirability of the property. How to increase the value? As a villa owner, the most effective way to increase the value of your property is to extend the property, hence increasing the size of the built-up area. However, you should also be mindful in that the cost to extend the villa may vary due to the value it will add. The cost of construction will be considered when carrying out a valuation yet ultimately the value rate applied will be based on the market at the time of valuation. The most common way of adding value to a property is through renovations including: -Fixtures and fitting -Change of flooring -New bathrooms

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- New kitchen

- Swimming pool - Landscaping There are some renovations that may not increase the value of the property and could affect the final valuation. This includes furnishing and designing heavily on personal taste such as gold taps or extravagant ceiling upgrades. Due to Dubai's melting pot of nationalities, investors and home buyers come from all over the world and tastes vary significantly. Keeping the design simple will not limit the group of potential buyers, thus maintaining the true market value. Source: Khaleej Times Back to Index

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WHEN PROPERTY PRICES ARE NO MORE IN SQUARE FEET Tuesday, February 20, 2018 A new trend is becoming evident in the Dubai property market. Investors are placing more emphasis on the entry price of properties as opposed to the price per square foot. For instance, units that were previously advertised below Dh1,000 per sqft are being promoted as below Dh500,000 for studios or Dh1 million for one-beds to encourage takeup. "Yes, the entry price is becoming important for investors as a key psychological factor in a market increasingly driven by price and competing marketing announcements from a few developers engaged in a race to bottom. Price per square foot is becoming relatively less important because it requires deeper market understanding. Sadly, this is encouraging more of the lower quality stock to be built and marketed at very low price points, where the size and quality are sometimes compromised to achieve that low entry point," says David Godchaux, CEO of Core Savills, a consultancy. Developers are also using this strategy to attract end-users to consider purchasing properties that are coming in at a certain price point. "There is a huge demand from the end-user for affordable housing, whether it is already complete or still under construction. By advertising at under Dh500,000 or Dh1 million, it is appealing to the end-user to show what you can get for under a certain milestone in price," remarks Lewis Allsopp, CEO of Allsopp & Allsopp. Some developers use this strategy to hide the fact that their units are relatively smaller in size or that they have a very limited number of units available at that price point. "Quoting a total price rather than price per square foot is a mere marketing strategy targeting first-time home buyers with one figure, giving a clearer picture on affordability without the need to have to calculate the size multiplied by price per square foot. Savvy investors, however, look beyond the total price or price per square foot. They look for great locations, reasonable unit size, practical layouts, decent quality, fair payment plans, affordable down payments, easy mortgage payments, well-connected infrastructure, good amenities/facilities, the developer's track record, and, of course, the potential total returns on the investment," informs Haider Tuaima, head of real estate research at ValuStrat. This marketing strategy is mostly being used for smaller ticket sizes and targeted at first-time home buyers who were previously unable to afford a property in Dubai due to higher prices per unit. When it comes to mid to upscale properties, investors are still driven by the price per sqft, insist market observers. "The main reason is that the investor is looking at the final price as his tenant is going to pay him as per 1- bedroom, 2-bedroom, etc., in a specific location. There is no incentive for the buyer to buy a big unit and pay more but get a similar rent. This trend has advanced since 2012, when the market started moving towards more compact units with smart floor plans from some key developers, which allow the unit to be efficient with minimum space lost in corridors and other wasted areas," observes Sanjay Chimnani, managing director, Raine & Horne Dubai. Short-term investors are also attracted to the entry price point rather than the cost per sqft. Such marketing strategies are also mostly offered in outer areas. "Short-term investors are drawn to the outer areas, and yields combined with entry price points are the key factors considered. Indeed, there may be a few good deals to be

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made, but today's high return is not always a good indicator of tomorrow's yields - on the back of the very important supply expected to be handed over in the next 3 years at low price points. In outer areas, this short- term strategy may result in a few disappointed buyers, finding themselves locked between falling rents and decreasing capital values, making their investment illiquid in the mid term," warns Godchaux. Meanwhile, long-term investors are more careful, selecting developers with a strong reputation and track record, especially when buying off-plan. Location is also one of the most important factors for these investors, as long- term capital value is more likely to be retained in central areas. "Investors are intelligent and savvy people. They are not going to purchase something at a low yield or something with little chance of capital appreciation or something with a questionable exit strategy just because it is advertised at being under a certain price point," explains Allsopp. Discerning investors in Dubai consider location, occupancy in the area, price, size, net yields and payment plans before making a purchase. "Investors are becoming more conscious of the full life-cycle of their investment [rather than just counting on the short-term capital appreciation followed by the exit]. Hence, they are more interested in the quality of construction, amenities, connectivity, service charges, rental potential and exit options," says Ivana Gazivoda Vucinic, head of consulting and valuations and advisory operations, Chestertons Mena. Meanwhile, sellers are adapting to the new market reality. "This is evident through the constant downward correction in prices to meet the current demand and investors' price sensitivity," adds Vucinic. Source: Khaleej Times Back to Index

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EXPO 2020 TO DRIVE CONSTRUCTION BOOM IN UAE Monday, February 19, 2018 Preparations in the run-up to Expo 2020 are proving to be a catalyst for the UAE construction industry. The rise in oil prices is also beneficial for contractors since regional governments are beginning to restart old projects or invest in new infrastructure development. However, contractors are not insulated from challenges - they face smaller margins, more competition in project bids, delayed payments and rise in the cost of doing business. There is also concern about the extent of project awards after all the Expo contracts have been let. "There is a large amount of current activity but concerns remain about the volume of works after 2020. Meed Projects estimate that around 30 per cent of the $3.8 billion in construction contracts for the Expo have already been let, with another 60 per cent in the final procurement stage and expected to be let during 2018. The volume of new projects awarded across the UAE is expected to decline in 2019 and 2020," says Alan Baker, JLL national director, project and development services - Mena. Sentiment in the UAE's construction sector is optimistic as the region prepares for Expo 2020. According to Avin Gidwani, CEO of BNC Network: "As the demand for hotel rooms, housing and the need to expand infrastructure increases, one can see activity in a number of construction sites across Dubai. Crude price that is currently hovering over $60 per barrel, up from $40 to $50 a few months ago, is going to lift investor sentiment and will encourage the government and the private sector to invest in new projects or start held-over projects." Sentiment is most optimistic among contractors in Saudi Arabia and the UAE as the governments look to spend more on infrastructure and construction as they seek to diversify their economies away from oil. The consultancy JLL estimates that the Dubai government has passed the largest ever budget for 2018 (totalling Dh57 billion) of which more than 20 per cent is allocated to infrastructure spending (an increase of more than 40 per cent from 2017). "Activities related to setting up the venue for Expo 2020, especially the Dubai Metro expansion by the Roads and Transport Authority, is supporting demand," observes Bharat Bhatia, CEO of Conares, a steel products manufacturer. He adds: "Our order book is pretty good for the future and we are very positive for the year 2018." A spokesperson from Atradius, a global credit insurance company, says: "We have observed a positive momentum in the sector since Q4 2017 which we believe will continue. In fact, we expect a further pick-up in pace during the second half of 2018. Improved oil prices are and will continue to positively impact the overall perception and the fiscal position of the construction sector." Recent findings from Pinsent Masons' GCC Construction Survey refer to ongoing concerns relating to delayed payment, the rising cost of capital and increased number of disputes. "The industry faces a number of key challenges, including pressures on margins and increased competition for projects. This is placing a burden on many second tier contractors who are finding themselves squeezed by the trend for larger firms to bid for smaller projects than they have traditionally been interested in. Delays in payment terms have impacted the cash flow and reduced the profitability of many contractors," explains JLL's Baker. Market observers claim some contractors face up to a six-month delay in getting their payments. However, defaults have been low in the past few years.

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"Another problem is the higher cost of doing business - with the recent set of new fees introduced, cost of business is going to go up significantly this year. Last year, most contractors had to add mandatory health insurance scheme for their workers. Construction companies run business on a very thin margin - between 3 to 5 per cent. Any cost escalation causes negative cash flow. These are teething issues due to regulatory changes and will settle soon as business align to these changes," points out Gidwani. However, Conares' Bhatia denies any challenges with regards to payments. "Banks are very supportive and our contractors are also paying on time with no records of disputes." While infrastructure accounts for a big chunk of construction awards, there are growth opportunities in other segments as well. Almost 40 per cent of the total spending on Expo 2020 related projects of $6.1 billion has been allocated to infrastructure projects. "There has been a pronounced move away from traditional asset classes [offices, residential, retail and hotels] in recent years, with more interest in alternative assets such as affordable housing, education and healthcare. We see this trend continuing into 2018, with increased interest in areas such as student housing. There remains significant investment in physical infrastructure in both the UAE and Saudi Arabia," reckons Baker. BNC Network's Gidwani adds: "To meet the anticipated demand of over 20 million visitors by 2020, the hospitality, leisure and recreation and retail sectors will offer large opportunities. Although the higher cost of doing business is squeezing the profit margin, these sectors still remain profitable." Source: Khaleej Times Back to Index

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GREEN, HAPPY RESIDENCES: A DELICATE BALANCE Thursday, February 22, 2018 Green building and sustainability are probably the most abused terms in recent years as real estate developers try to meet the world’s growing appreciation towards environmental preservation. And now a new concept has emerged that draws upon people’s growing concern for a more balanced, ethical and responsible approach towards progress: the happiness index. When designing or building a real estate project, developers and architects are now looking at ways to incorporate elements that are not only environmentally sustainable, but also make occupiers happy and satisfied. For instance, Majid Al Futtaim, one of the leading developers of retail and leisure projects, recently came up with a first-of-its-kind neuroscience study in the Middle East and North Africa to identify the key drivers behind emotional attachment to urban developments and communities. The company used key findings of the survey to formulate designs and placemaking for its future projects. The study, which was conducted by Neurons Inc among UAE residents, used electroencephalography (EEG) and eye tracking technology to measure how participants subconsciously and consciously responded to nearly 100 images of urban developments and landscapes from around the world. Hawazen Esber, CEO of Majid Al Futtaim — Communities, says: “Historically, researchers and developers have focused on the conscious drivers of preference for real estate design and development. Our unique neuroscience research study enables a deeper understanding of what subconsciously drives emotional value and a sense of belonging for our customers and the wider community.” The company said that the survey emphasised on greenery, which was naturally landscaped and positioned in a way that provided a sense of human scale and privacy. The study also highlighted a subconscious preference for shades of blue and green in design and artistic features that people can interact with and embrace. Esber says that the study has helped identify crucial elements that make for happy, healthy communities and “become the foundation for how we bring our integrated retail, leisure and entertainment offering”. The Sustainable City The Sustainable City in Dubai is another major project that is being developed with a focus on three elements of sustainability: economic, environment and social. Diamond Developers, which is building the 5-million-sq-ft project, has roped in the SEE Nexus Institute to monitor the performance of the community and compile feedback from the residents, and along with their partners University of California, Davis and the World Wildlife Fund. Together they have conducted several social surveys that are designed to measure the happiness and wellbeing of the residents of the city. “Every aspect of the development has been designed to benefit residents economically, from its revenue-sharing scheme that offers a net zero service fee — a first-of-its-kind unique initiative — to a wealth of employment opportunities,” says Wassim Adlouni, vice-president and a board member at Diamond Developers. He says the working model for the Sustainable City is based on the philosophy of engaging with customers, innovating solutions and then sustaining it through engagement with the community.

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“The community living in the city had initiated and adopted a raft of initiatives to both conserve resources and minimise carbon footprint through highly energy-efficient home design and use of eco-friendly building materials,” says Adlouni. Regional trend Demands for sustainable and people-friendly futuristic communities have not only just picked up in the UAE but also in the region, as the world’s leading architects and planners are being roped in to build such projects. Khandamah Mountain project For instance, German architect Tobias Lindemann, who is best known for creating futuristic zero-energy houses, is currently involved in the development of the Khandamah Mountain project in Makkah, which he won through an international planning competition. The 91-hectare smart city mega project will accommodate around 160,000 people with its hotels, residences and malls alongside parks and open spaces. “With our smart city developments in Saudi Arabia, we started in the early design stage to implement guidelines and manuals to create emission-free and electrified, intelligent urban planning and plus-energy buildings. Our intention is to build the greenest buildings in the Middle East,” says Lindemann, who is the founder of the White Sky Group. Lindemann has introduced IT and AI-based automatic response and feedback intelligence in White Sky’s smart city developments and studies about designing current and future megacities. He insists sustainability is now a must, starting from the early design stage to the final realisation. “Space, lights and views are paramount parameters in architecture. Good design and architecture make us happy,” says Lindemann. While real estate developments and buildings need to be sustainable, he insists they also should be iconic so that users can identify with and understand the design culture to develop an emotional connection and pride of ownership. UAE takes the lead With the UAE government forming a new Happiness Ministry in 2016, Dubai seems to have taken a lead in placing happiness on its national agenda. This has encouraged both private and public sector entities to work towards enhancing happiness for citizens and expats in the UAE through better services and infrastructure. “Under the UAE Vision 2021 national agenda, the government wants to ensure sustainable development, as well as preserving the environment and to achieve a perfect balance between economic and social development,” says Adlouni, adding that he is witnessing the shift in the industry and the end-users. These efforts have placed Dubai at 28th position in the world and first in the Arab region as the happiest city, according to the World Happiness Report 2016, published by Sustainable Development Solutions Network (SDSN), a global initiative for the United Nations. Azizi Developments’ CEO Farhad Azizi says his company fully supports the vision of Dubai to be the happiest city in the world by providing world-class infrastructure, projects and services. In terms of customer experience, he says, “We strive to provide a responsive and engaged customer service that goes the extra mile to communicate effectively with our customers and resolve their queries efficiently. Customer testimonials are another way that Azizi measures the happiness index of their home owners.” Azizi says their projects are being designed to inspire and keep the happiness barometer of the buyer rising “with uplifting creations that our engineering and design team bring to each project”. Azizi Riviera He gives example of the Dh12-billion Azizi Riviera development in Meydan One. Located on the banks of the Dubai Canal and drawing inspiration from the French Mediterranean, the company says the project features

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relaxing and interesting elements such as a bocce area, zen gardens, yoga zone, pets agility area, outdoor chess and a lounge for movie nights. Another major development that Azizi is developing in Meydan is Azizi Victoria, which is twice the size of Azizi Riviera. The project will house a mega integrated retail district, high end hotels, parks and gardens and contemporary living spaces. “Victoria is inspired by the British lifestyle of Victoria, London, providing residents with the perfect balance of entertainment, work and living spaces. All these elements encourage residents to interact and socialise, thus help increasing the happiness factor,” insists Azizi. He is optimistic the happiness agenda will eventually extend to more corporates as a guide to measure themselves in terms of achieving happiness for all stakeholders and improve further. However, Adlouni says the need of the hour is for developers to set up a dedicated social sustainability team, as it speeds up the process of creating a happy community. “It is only when the residents get to know each other, begin to socialise and become accountable towards each other, as well as share a perception of the ethos, the ideals and the visions of their neighbourhood can they truly form a sustainable community,” explains Adlouni. Given the prevailing environmental challenges around the world, Lindemann says sustainability is the only path for the future. “We need to focus on intelligent light building structures and sustainable smart city planning,” says Lindemann. “We estimate by 2050, there will be 50 global megacities, each with more than 10 million habitants. Design and technology excellence is the key to the future.” Source: Gulf News Back to Index

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REVEALED: UAE'S HOTTEST PROPERTY AREAS Thursday, February 22, 2018 For those of you looking to move house, it helps to know the most sought-after areas in the UAE in terms of affordability, location and amenities. Interest is rebounding in The Springs, Dubai's most popular place to rent a villa. At around 6 per cent cheaper to buy or rent a villa, searches in The Springs were up 32 per cent, according to Propertyfinder Group which compiled search behaviour on its portal for Q2 and Q3 of 2017. Jumeirah Village Circle and Studio City both experienced increased interest. JVC, where rents were down 12 per cent for a villa, experienced a glut of supply with a 55 per cent increase in listings. Demand followed with a 27 per cent increase in residential searches. On the commercial side, Umm Ramool, one of Dubai's oldest industrial areas, experienced new interest. Searches for commercial space were up 120 per cent, with a 50 per cent spike in leads per listing (i.e., people expressing interest in a property). It was announced late last year that the airport-adjacent area is getting a 2.1 million square foot free zone dedicated to e-commerce, including office space and fulfillment and logistics centres, to be called Dubai CommerCity, a joint venture between Dubai Airport Freezone Authority and wasl Asset Management Group. Sharjah's Al Wahda and Muwaileh, despite downward pressure on prices, both saw an uptick in interest. Al Wahda quadrupled its search volume, while Muwaileh was up 72 per cent. In the capital, Abu Dhabi's Downtown is becoming more popular (+71 per cent search volume). Masdar City's residential searches tripled in 2017. Source: Khaleej Times Back to Index

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MO RE HOMES IN 2018 TO PUSH DOWN RENTS IN DUBAI, ABU DHABI Thursday, February 22, 2018 2018 is set to be another favourable year for tenants with rents predicted to drop as a result of the sheer amount of supply projected for delivery this year. According to Asteco, 23,000 apartments and 8,500 villas are scheduled for handover in Dubai in 2018. In 2017, Dubai saw the delivery of 13,000 apartments, 3,600 villas, Asteco adds. The decline in residential sales prices in Dubai has slowed down but rents are still seeing a fast decline - which is good news for tenants, according to Reidin. Abu Dhabi continues experiencing a higher decline both in rents and sales prices. Dubai sales prices Dubai residential property sales prices declined 0.14 per cent in January 2018 and 3.67 per cent year on year, says Reidin data. Apartment sales prices registered a minimal drop in January 2018 with a decrease of 0.03 per cent month on month and 3.74 per cent year on year. Dubai villa sales prices registered a drop in January 2018 of 0.58 per cent month on month and 3.36 per cent year on year. A few areas in Dubai such as Dubai Sports City, Discovery Gardens and Dubai Marina registered a sales price increase in January. Dubai rents According to Reidin, Dubai residential rents decreased 0.43 per cent in January 2018 and 7.65 per cent year on year. Apartment rents registered a decrease in January with a 0.29 per cent drop month on month and a 7.43 per cent decline year on year. Villa rents registered a decrease of 1.22 per cent month on month and 8.85 per cent year on year. Rental prices in some affordable areas such as Discovery Gardens, Jumeirah Village Circle and Dubai Silicon Oasis showed minor uptick changes. Reidin's operations and research director Ozan Demir said: "Dubai and Abu Dhabi residential sales markets have continued to soften during January albeit on a lower rates when compared to previous periods due to subdued real estate investment activity. Even though average sales transaction ticket prices remained unchanged, number of residential transactions in the secondary and off-plan markets have declined around 25 per cent year on year in January 2018." Abu Dhabi Approximately 9,000 residential units, including 6,200 apartments and 2,800 villas and townhouses are anticipated for completion this year, says Asteco. Abu Dhabi residential sales prices decreased 0.4 per cent in January 2018 and a 8.04 per cent decrease year on year. Apartment sales prices registered a drop in January of 0.50 per cent month on month and 9.21 per cent year on year. Villa sales prices registered a decrease in January of 0.10 per cent month on month and 4.25 per cent year on year. Abu Dhabi residential rents decreased 0.99 per cent in January 2018 and 10.85 per cent year on year. Source: Khaleej Times Back to Index

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SOBHA GROUP NAMES KEY CHANNEL PARTNERS FOR 2017 Wednesday, February 21, 2018 Key channel partners were recognised at the Sobha Group’s recent annual awards event. There were winners in six categories, which included Noble House named “platinum partner”, Morka Real Estate being the top channel partner for 2017, and Big Pockets Commercial Brokers rated the top international channel partner. More than 600 channel partners attended. These firms were registered for the Sobha Hartland project, one of the developer’s signature projects at MBR (Mohammad Bin Rashid) City. Source: Gulf News Back to Index

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HIRA INDUSTRIES SETS UP FACILITY AT NATIONAL INDUSTRIES PARK Wednesday, February 21, 2018 The fixing systems division of Hira Industries and the Netherlands’ Walraven Group have opened a Dh20 million facility at National Industries Park. Spread across 6,500 square meters, the facility meets the green building norms. Hira Industries has had an alliance with Walraven for three years now. “With the opening of this new facility, we have not just consolidated our presence in the region, but also spearheaded our operations to supply quality products on time,” said Ravi Wadhwani, General Manager of Hira Walraven. Source: Gulf News Back to Index

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PROPERTY PRICE CORRECTIONS IN DUBAI TO CONTINUE THIS YEAR Tuesday, February 20, 2018 There will be a further “correction” in Dubai’s property market during the year and on top of the 5-10 per cent dip in 2017, according to the credit rating agency S&P’s latest projection. And it could be 2020 before prices stabilise “at the earliest”, it adds. “How much stimulus Expo 2020 Dubai provides remains to be seen, but market players remain hopeful,” the report notes. “In 2020, however, the sector could well start to benefit from the potential increase in economic activity and positive business sentiment attached to Expo; the expected 25 million or more visitors and floods of new residents to Dubai should support the market. “We anticipate a speculative surge in prices, devoid of any demand and supply mismatch.” Another favourable factor could be the return of Chinese investors and Russian tourists, which could “breathe new life into the market”. But no expects a repeat of the sharp decline recorded in 2009. This time out the slowdown is more gradual in nature, and a future recovery will also happen at the same pace. On the VAT related costs developers face, S&P’s report suggests that this will “borne by whoever is under pressure, at least until we see some organic recovery in the market”. Source: Gulf News Back to Index

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DUBAI: THE EXHIBITION HALL OF ARCHITECTS Tuesday, February 20, 2018 Following the delivery of the iconic Ferrari World in Abu Dhabi, Benoy has experienced remarkable growth in the region over the past 10 years and now has projects in the UAE, Bahrain and Egypt, adding to its international portfolio across Europe, Asia and the Americas. PW spoke to Neil Kee to find out what the new head of design thinks of Dubai, and how architecture in the region is changing. What excites you the most about working in the UAE? I have joined the Dubai design studio at a very interesting time, as 2017 actually marks Benoy’s 10-year anniversary in the region. It is exciting to be working in such a fast-paced, growing city such as Dubai, which is a playground for architects in many ways. It enables creative thinkers such as myself to bring our ideas to life. I always look forward to working in new markets; I’ve worked in over 20 different countries during the course of my career. It’s not my first time in the UAE. I’ve had the pleasure of working on designing and delivering Ferrari World Abu Dhabi. Working on such an ambitious project of that scale was undoubtedly a career highlight. Neil Kee helped design Ferrari World Abu Dhabi Coming from Benoy in Singapore, how do you view Dubai as a place for architectural expression? What differentiates Dubai in the way space is used as opposed to other cities you’ve worked in? Culturally Singapore, where I was previously based, and Dubai are very different. Each is unique in its own interesting way, but economically and architecturally there are remarkable similarities between the two. Both are global iconic cities that are blessed with a highly talented design pool and a constant drive for innovation. The architecture in both cities is quite impressive and can easily take your breath away. Neil Kee of BenoyI have found that Dubai is akin to an exhibition hall where architects from all over the world have come to display their talents and creative skill, each with their own unique cultural influences and stylistic nuances. Can you share details of your upcoming projects? Bahrain Marina is the creation of an authentic urban waterfront district that is envisaged to become a major lifestyle destination for Bahrain, the surrounding region and the global community. It will create a landmark lifestyle attraction connecting the prestigious Bahrain Marina with the people and the heart of Bahrain. The project has been approached with a focus on placemaking. A series of spaces and high-quality public realm promotes social interaction across a diverse cross section of the public to foster a sense of place and community. The project accommodates multiple uses around a series of social spaces, maximising building design and proportionality as well as the space between buildings, with strong visual focuses on the natural beauty of the site. Bahrain Marina's design uses fisherman huts as a reference

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Architecturally, the design reflects the community’s local character and personality by using fisherman huts as a reference to the original character of the shoreline, a unique and special characteristic of Bahraini heritage. The yacht club is a modern take on the facility originally centred on the site, with its nautical silhouette a focal point to the marina and the jewel of the scheme. In a fast-moving and competitive global landscape, the intent is for the youth of Bahrain to have the very best platform to excel. Therefore, a new concept has been introduced in “third place” creative spaces, accessible to all of the community and promoting entrepreneurism, youth engagement and creativity; a place where people can design, test and launch enterprises and exhibit their creative work. This facility is strongly connected to the site’s venerated neighbour, the National Museum and cultural district. Bahrain Marina will be the heart of the community; a place to spend time with friends and family, to eat, drink, be entertained, relax and enjoy life. How does Benoy see its future in the UAE and the wider region? Architecture in the region is changing and evolving to connect people with their surrounding environments in new and exciting ways. There is an increased focus on health, lifestyle and community; projects are now becoming pedestrian friendly, there are more open areas for social gatherings and Benoy plays a role in connecting people with place. Here, I would like to build new relationships and seek out future collaborations. Being new to Dubai, exploring new developments and innovations in the Middle East and North Africa is both a professional and personal goal of mine, in particular projects that are true to the Benoy ethos, which is to give back to the community and area in which we live, and continue to provide innovative design. Source: Gulf News Back to Index

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STEPS TAKEN TO COOL DOWN DUBAI’S OFF-PLAN MARKET Tuesday, February 20, 2018 Dubai’s real estate authorities are likely to step in to cool down the off-plan residential sales rush, which, if left unchecked, could have created the risk of too much supply coming in at the same time. Developers with upcoming off-plan launches are now expected to finish 50 per cent construction before they can start selling. Earlier, the cut-off was 20 per cent. The authorities are stepping in before the risk of the market overheating became a reality. Already, speculative buying was starting to show up in recently launched projects, and industry sources were starting to voice real concern about a “2008-like situation”. According to the consultancy JLL, residential projects with more than 90,000 units have been announced in Dubai and are either in their development stage or likely to start the activity shortly. But all through last year, it did seem that sales of off-plan properties were running ahead of the market. Developers, even those with not much of a track-record, were getting on with their off-plan sales and sweetening the offers through post-handover payment plans of even 5 years and more. The risk was that these sales more often than not had minimal down payment requirements. Interestingly, government-owned developers are exempt from the new requirements, market sources say. “The revised regulations regarding developers and construction timelines will reduce the probability of stalled projects,” said Nasser Malalla Ghanem, Senior Partner at the law firm of NP Associates. “This regulatory oversight ensures proper financial close of projects, plus further reduce the chances of investor disputes.” Smaller developers with upcoming projects will need careful planning managing their funds ahead of the sales launch. Source: Gulf News Back to Index

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50 PER CENT COMPLETION REQUIRED BEFORE OFF-PLAN SALES CAN BEGIN IN DUBAI Tuesday, February 20, 2018 Dubai’s developers may no longer be able to rush out with their off-plan sales — they will need their projects to reach the 50 per cent mark before they do so. The earlier requirement was for a project to be 20 per cent ready before sales could be launched. The provision that developers must have paid off all the costs related to the land remains in effect. (The changes do not apply to government-owned real estate companies, according to informed sources.) Such a move could have far-reaching consequences for developers — especially the smaller ones — as they would have to wait longer to get funds flowing back into their operations. But the latest changes would be for the greater longer-term benefit of the market, sources add. This would prevent those developers trying to get sales pushing projects with bare minimum down payments and extended post-handover instalment periods for buyers. Last year had seen a flood of off-plan launches and sales, and with the majority of these projects expected to take three to five years to complete. Many had been expecting the pace to be maintained this year as well. Leading developers such as Damac had been warning the market that these handover terms could have serious consequences if in a future downturn, buyers stopped payments and developers were left with “dead” stock. How would more stringent requirements on off-plan launches play out? “The proposal to amend the developer’s law could spur consolidation among (smaller) investor-developers,” said Sameer Lakhani, Managing Director at Global Capital Partners. “A second benefit would be to improve confidence among investors that these projects would be completed — once you reach the 50 per cent mark, there’s every incentive to finish the rest.” According to estimates by JLL, the consultancy, more than 95,000 residential units were launched in Dubai and with likely completion dates before end-2020. “This is approximately twice the average demand over the past five years,” said Craig Plumb, Head of Research — Mena at JLL. “If all these units were to be delivered, there would be a likely oversupply and which would have a negative impact on sale prices and rentals. “Tightening the restrictions on the supply of off-plan units is a welcome response to concerns about a potential oversupply.” Developers will also need to have a serious think about when they complete a project and how the sales are faring on it. Because any unit left unsold three years after construction will be subject to VAT. Apart from oversupply, market watchers were also getting anxious about the quality of build of some of the new projects. They warned that cash-strapped developers could start cutting corners just to get the project off their hands. “The new policy if it comes into full effect will reduce the systemic risk that is currently building up on the back of a few developers flooding the market with sometimes poor quality products at heavily discounted prices,” said David Godchaux, CEO at Core Savills.

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“The (50 per cent requirement) will act as a screening mechanism for developers. They will now have to ensure they are in a stronger cash flow position to sustain the development risk without the help of capital guaranteed from off-plan sales. “There will be less short-term pressure on property prices as some developers were competing to quickly attract buyers in the very early phases of their projects.” Developers sources were unavailable for comment. But the fact that the leading master-developers will not be impacted will ensure that a steady flow of off-plan launches will continue. As for private developers, they will now have to show more “skin in the game” in terms of putting in their own funds and on the project site. Some developers had privately been voicing concerns that the pace of off-plan launches last year meant a return of speculative buying in Dubai’s property market. For the greater and longer term good of the marketplace, this had to be nipped. The 50 per cent cut-off effectively means that this will be the case. Source: Gulf News Back to Index

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DONALD TRUMP JR. VISITS INDIA TO HELP SELL APARTMENTS Tuesday, February 20, 2018 “Trump has arrived. Have you?” shout the barrage of glossy front-page advertisements in almost every major Indian newspaper. The ads, which have run repeatedly in the past few days, herald the arrival not of the American president but of his eldest son, Donald Trump Jr., who is in New Delhi to sell luxury apartments and lavish attention on wealthy Indians who have already bought units in a Trump-branded development outside the Indian capital. The newspaper ads promise that buyers who order apartments in the development by Thursday will get “a conversation and dinner” with Trump Jr. a day later. President Trump has pledged to avoid any new foreign business deals during his term in office to avoid potential ethical conflicts. While the projects that Trump Jr. is promoting in India were inked before his father was elected, ethics experts have long seen the use of the Trump name to promote even existing business ventures as tricky territory. The distinction between old and new projects can be hazy, they note, and new deals can be shoehorned into old. Donald Trump Jr. posed for photos Tuesday morning in New Delhi with Indian developers building complexes in four cities. Among the business partners accompanying him was Kalpesh Mehta who heads Tribeca, the firm described as the main Indian partner for Trump brand real estate projects. Mehta came to notice soon after President Trump’s November election victory, when pictures of him and two other Trump Indian real estate partners with the president-elect in New York made a big splash in Indian and American media. Later in the week, he is scheduled to make a speech about Indo-Pacific relations at a New Delhi business summit, sharing the stage with Prime Minister Narendra Modi. In Gurgaon, the sprawling and ever-growing New Delhi satellite city where a new Trump Towers will eventually rise, the construction site is just mountains of dirt and unruly shrubbery, one of many residential projects yet to be built. For miles upon miles, the landscape is little more than tin-roofed huts for construction labourers and tiny makeshift food shacks to keep them fed. And while there’s almost nothing at the Trump construction site, a handful of burly guards enthusiastically insisted on keeping journalists out of the area. The Trump Organization has licensing agreements with all its Indian business partners, who build the properties and acquire the Trump name in exchange for a fee. The organisation has five projects in India, making it the brand’s largest market outside the United States. A luxury complex is already open in the central city of Pune, with other developments in varying stages of construction in the coastal cities of Mumbai and Kolkata, and two in a chrome-and-glass New Delhi suburb, Gurgaon. The apartments are expensive — though not outrageously so in the overheated real estate world of India’s wealthy elite. An apartment in the Trump Towers complex in Gurgaon runs between $775,000 and $1.5 million.

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The rest of the details of Donald Trump Jr.’s itinerary are hazy despite repeated emails to the Trump Organization and its Indian partner Tribeca. However, local media have reported that he is slated to visit other Trump projects across India. On Wednesday he is expected to be in the eastern city of Kolkata to promote luxury housing bearing his family name there. On Thursday he will be in India’s business capital, Mumbai, where he is to quaff champagne with the city’s elite at a reception hosted by the Lodha Group, the real estate company that is building the golden-hued Trump Tower there. Source: Gulf News Back to Index

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FIRST LOOK INSIDE A XXII CARAT VILLA Monday, February 19, 2018 Premium and luxury are words that are directly associated with gold, so when a developer decides to name a residential project XXII Carat, it more than indicates what’s on offer. The 22 luxury villas on the West Crescent of the Palm Jumeirah are all furnished with high-end finishing materials and equipment imported from France and Italy, such as La Cornue, Baldi, La Cuisine Française, Devon & Devon, Schuco and Miele. Nestled between two five star properties on either side, XXII Carat could well be the only truly private gated residential villa project in the crescent area of the man-made island. As Anton Yachmenev, managing director of Forum Group, the project’s Russian developer, says, “This is the only villa project with true beach access. There are not too many seven-bedroom villas on the Palm and there are no villas on the Crescent, making this project special.” After almost two year of construction, the five-star residential accommodation is almost near completion and ready to welcome its first guests this quarter. Our recent visit to the development demonstrated how a well- thought-out concept of luxury can be truly brought to life. Mediterranean style The design of the project follows a Mediterranean style and each villa consists of seven bedrooms, a landscaped garden and a private swimming pool. XXII Carat is built on a 500,000-sq-ft plot and in three rows named Sapphire, which as eight villas and faces the beach, Emarald, which also has eight villas and faces the sea and Dubai Marina, and Ruby, which lies between the two rows with six villas. “The project has been conceived in a way to provide easy access to all residents to the beach,” says Yachmenev. “Sapphire, the most premium villas, has direct access to the beach.” The villas are being delivered at a time when the standards of luxury living in Dubai have changed, but for the better, according to Yachmenev. “A decade ago, Dubai was not a place to buy a home and settle down,” he says. “It was transient and short term and wasn’t taken seriously as somewhere you might want to spend the next 20 to 30 years of your life. “But that has changed, dramatically. There is now a trend of discerning well-heeled buyers choosing a permanent home in Dubai and that’s why we came up with the idea for XXII Carat. It is a place residents can truly call home, where no expense has been spared. Each villa has been expertly designed and furnished to make sure you will never want to leave.” Yachmenev describes buyers of the project as “luxury-minded people from all over the world”. He adds: “They are people with style and sophistication who know exactly what they want and they expect nothing less than perfection.” Residents also enjoy valet parking and concierge services, pool and garden maintenance and even chauffeuring kids. First glimpse When you step inside the villa, the first thing you notice is the kitchen. The timeless beauty of La Cornue cookers, which are decorated with fleur-de-lis and one-of-a-kind enamelled plinths, is a clear standout feature. These custom-made range cookers combine traditional style with the latest technology to ensure outstanding cooking results.

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“Our involvement with XXII Carat was particularly unique for us because it was the first time we took on such a large project,” says La Cornue’s General Manager, Benoît Favier. “Usually, we design made-to-measure kitchens on a case-by-case basis but with XXII Carat we were involved with a global luxury real estate project with 22 exceptional and unique units. “Forum Group had two major requirements. Firstly, everything needed to be electric and then the plinths, which are normally made from stainless steel, had to be enamelled in the same colour as the cooker.” Complimenting the cookers are the kitchen cabinets, which were fitted by leading French company La Cuisine Française. “The kitchen is technically the most challenging part of the house – an everyday work area with its mixture of humidity, heat, liquids and air circulating in and out,” explains Christopher Cousin, founder and CEO of La Cuisine Française, whose family has been creating, manufacturing and fitting luxury furniture since 1821. “Most of our kitchen cabinets are made from plywood carcasses, guaranteeing stability and lightness in weight, resistance to humidity, and increased load capacity. But for XXII Carat we went a step further by upgrading certain features and adding special flourishes such as the addition of fine gold and silver leaf.” The bathroom is where you will find the jewel in the crown of the XXII Carat villas: the $1-million (Dh3.67 million) bathtubs, which feature precious-rock fixtures from high-end Italian interiors specialists, Baldi. Taking inspiration from the Italian Renaissance, Luca Baldi, CEO of the family-owned company, describes his creations as “a perfect expression of the rarity and exclusivity of the Italian lifestyle”. The raw crystals, weighing in at more than 10,000kg each, were shipped from Brazil to Italy, where they were then hand-carved into a deep egg shape before arriving in Dubai. “The residents of XXII Carat villas in Dubai will be among the first in the world to bathe in these remarkable tubs and enjoy the truly unique, magical and luxurious experience,” says Luca. “They offer the ultimate escape from the stresses and strains of everyday life.” Decadent bathroom Italian firm Devon & Devon provided the decadent bathroom décor, giving it a touch of European elegance. Art director Paola Tanini, and in partnership with the interior design studio Transforma, picked out catalogue pieces that were painstakingly redesigned and adapted to the Arab-Mediterranean style. “We take classical shapes and use contemporary materials to come up with astonishing timeless bathroom furnishings,” says Tanini. “For XXII Carat’s bathrooms we used the Rose collection, Dandy and Coventry taps and fittings in an 18-carat gold finish and Cavendish accessories.” The properties in the development are priced between Dh3,500 and Dh7,500 per square foot. For the smaller Ruby villas, the starting price is around Dh39 million. Prices go all the way to Dh92 million for the only remaining corner unit in Sapphire. The developer says half of the properties are already sold. “When we started work, it was the last piece of land on the crescent,” says Yachmenev. “Hence, we were able to incorporate the most modern design structure and add in some of the latest technological advancements into the development.” The development has a built-up area of about 300,000 sq ft, which includes the villas and a hotel apartment located at the centre of the development, which also houses the concierge service. Each villa has a minimum plot size of 15,000 sq feet and up to 26,000 sq feet for corner villas, with built-up areas ranging from 10,000-12,000 sq ft. Both the Emarald and Ruby are slightly raised from the ground. “We have raised the structure up so that residents, especially of Emarald, do not get to see the movement of vehicular traffic on the adjacent road,” says Yachmenev. “We also wanted to ensure that people who are commuting on the road do not get to see inside the villas. At the same time we wanted to provide our clients easy and clear view of the adjoining sea from their gardens.”

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Privacy

Yachmenev says special care was taken to ensure that each villa remained private from the adjoining property. “Each villa is designed in such a way that the private yard is indeed private. In fact, we have even limited the number of windows on the sides overlooking neighbour’s properties.” Buyers come from Europe, the CIS region and the GCC. The developer says only one of the eight beach-facing villas remain unsold, with the price now increasing by about Dh12 million since the launch. “We have had a lot of enquiries from people who are even interested to make sixty to seventy percent of the payment and sometimes even more in return for a price discount,” says Yachmenev. Almost all buyers have opted to customise their properties, leading to additional works. “Each of them have a different taste and want to customise various elements within the structure,” he says. “We kept the basic design more classical. We have delivered most of the customisation through our main contractor, the Abu Dhabi based Teejan Contracting.” Although it has ventured in the UAE at a time when the property market is considered to be bottoming out, Forum Group is upbeat with its first project in the country. “We have been in the business in Russia for many years and have built over 20 major projects. However this has been a good [first] experience in the UAE market,” says Yachmenev, adding that he expects Dubai to witness a slow but steady growth during the next two to three years. “We ourselves plan to expand and will launch out second project next year.” The developer said it has a land bank to build two more projects in new and upcoming areas in Dubai. “In terms of buildable area, we have about 700,000 sq ft and about 450,000 sq feet of sellable area,” Yachmenev. Source: Gulf News Back to Index

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EMIRATES REIT RECORDS PORTFOLIO VALUE OF $860M FOR 2017 Monday, February 19, 2018 The real estate investment trust Emirates Reit recorded a portfolio value of $860 million (Dh3.16 billion) for 2017, up 14.2 per cent year-on-year. Moreover, the asset management firm cleared all of its outstanding bank debts in December, with the “gearing ratio” now at 41.9 per cent. (As per regulatory requirements, the cap is set at 50 per cent. Last year, rental income grew 19 per cent to $53.9 million, which in turn led to a 19.6 per cent increase in total property income to $60.6 million. The net asset value was $1.74 a share (or $522 million), which works out to a total return of 10.6 per cent. (This includes the two dividend distributions totalling 8 cents a share paid out in January and June 2017.) “We ended the year on a high note with the successful issuance of a $400 million Sukuk,” said Sylvain Vieujot, CEO of Equitativa Dubai, which manages the Reit. “The strong fundamentals of our portfolio have continued to drive rental income growth and funds from operations. “We are well positioned to embark on the next phase of the Reit’s development. We actively explore further acquisition opportunities in both commercial and education sectors and remain confident about the upside potential of Index Tower and Mall.” Progress continues with the leasing of commercial space at Index Tower. This mirrors the “growing interest of the asset and location with its upcoming integration into DIFC’s Gate Avenue”, Emirates Reit said in a statement. Fitouts work at the Index Mall is as per schedule and is expected to complete in the first-half of the year. In December last, Emirates Reit closed a $400 million, 5-year sukuk with a profit rate of 5.125 per cent per annum. This was used to refinance the Reit’s existing debt and replace amortising loans with fixed-rate bullet funding. It became the first Reit from the region to access the international sukuk market and obtain a credit rating. The order book peaked at $1.1 billion and was 2.5 times oversubscribed by 90 global investors. Total occupancy across its properties was 84.5 per cent as of end December. The average unexpired lease term is eight years. Source: Gulf News Back to Index

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NAKHEEL INKS BIGGEST PROJECT DEAL THIS YEAR Sunday, February 18, 2018 Nakheel has signed a Dh4.2 billion contract for its mall project on Deira Islands — the biggest single project tender awarded in Dubai’s construction sector this year and, quite possibly, in recent times. The project’s scope involves the construction of Deira Mall, which will be the largest of its kind in the region. Construction will begin this quarter itself, with completion scheduled for 2021. Deira Mall will have more than 1,000 shops, cafes, restaurants and entertainment outlets stretching across 4.5 million square feet of leasable space, and a 3.8 million square feet multi-storey car park with 8,400 parking bays. United Engineering Construction (UNEC) is the main contractor. The mall will be the centrepiece of Deira Central, a 9 million square foot mixed-use community located at the centre of Deira Islands, which will feature 50 residential and hotel towers set within an extensive parkland. “The mall will provide endless attractions for residents of Deira Islands, the wider UAE community and the millions of tourists who visit Dubai each year,” said Ali Rashid Lootah, chairman. Deira Mall is one of two large-scale retail clusters being built on Deira Islands. The other, Deira Islands Night Souk, is to be the “world’s largest night market”, with 5,300 shops and almost 100 quayside cafes and restaurants. This is project due for completion later this year. Source: Gulf News Back to Index

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NEW REPORT REVEALS CHEAPEST, COSTLIEST PLACES TO RENT IN DUBAI Sunday, February 18, 2018 With most apartments in Dubai costing more than Dh1 million to own, the huge majority of the city’s residents are forced to rent throughout their life in the emirate. But how do tenants know they’re getting a good deal? The latest report based on actual rental figures by Asteco shows how much Dubai residents should expect to pay for a one-bedroom unit around the city. As of December 2017, the data showed that International City remains the most affordable place to live in. The community has the cheapest rental prices for anywhere in Dubai at Dh40,000 per year. On the other end of the scale, the Palm Jumeirah is the costliest neighbourhood, with rents costing tenants an average of Dh110,000 annually. The good thing, though, is that wherever they want to settle in next, tenants can expect to pay a lower rent. Throughout 2017, apartment rental rates declined steadily, from 2 per cent to 4 per cent per quarter, on average. The average rent for a one-bedroom home in International City dropped by Dh5,000 compared to the rates in 2016, while in the Palm Jumeirah, the average rent dipped more significantly by Dh20,000. What to expect The downtrend is likely to continue this year, as more new apartments will be delivered. In fact, analysts are predicting that rental rates are going to drop more significantly than sales prices. “Sales prices and rental rates are expected to continue to come under pressure with a more pronounced drop anticipated for the latter as a result of the sheer amount of supply projected for delivery this year,” the real estate services company said in a report. “Sales prices and rental rates are likely to see further adjustments until market conditions and economic sentiment improve.” 5 cheapest areas  International City Average annual rent: Dh40,000 Average decline between 2016 and 2017: Dh5,000  Deira Average annual rent: Dh50,000 Average decline: Dh10,000  Jumeirah Village Circle Average annual rent: Dh55,000 Average decline: Dh5,000  Dubai Sports City

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Average annual rent: Dh55,000

Average decline: Dh10,000  Discovery Gardens Average annual rent: Dh55,000 Average decline: Dh10,000 5 costliest areas  Palm Jumeirah Average annual rent: Dh110,000 Average decline: Dh20,000  DIFC Average annual rent: Dh100,000 Average decline: Dh5,000  Downtown Dubai Average decline: Dh20,000  Jumeirah Beach Residence Average annual rent: Dh95,000 Average decline: Dh10,000  Shaikh Zayed Road Average annual rent: Dh90,000 Average decline: Dh5,000 * Figures are applicable to one-bedroom flats in Dubai Source: Gulf News Back to Index

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DUBAI’S HOTELS ROOM SUPPLY SET TO GROW BY 11.1% FROM 2017-19 Tuesday, February 20, 2018 A new study of Dubai’s hotel market is forecasting a 10.2 per cent compound annual growth rate (CAGR) over the next 24 months in occupied room nights, reaching 35.5 million annually in 2019. According to the study, conducted by Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism), the emirate’s room supply is set to reach 132,000 by the end of 2019, growing at a two-year (2017-2019) CAGR of 11.1 per cent. Meanwhile, occupancy levels are expected to remain at around 76-78 per cent, despite a significant growth in capacity, provided Dubai increases its international overnight visitation numbers in parallel. Dubai Tourism says it is working to increase visitor levels, in line with its target of bringing 20 million tourists to the emirate in 2020, through “concerted efforts to raise awareness in both established and emerging source markets.” Also seeking to increase the length of each visitor’s stay, the authority forecasts that the duration of travel from new and existing segments is expected to see further growth in the medium term, “positively impacting demand for room nights, which is in turn expected to outpace visitor growth over the coming 24-48 months.” Helal Saeed Al Merri, director general of Dubai Tourism, said in a statement: “With international and local investors, and operators continuing to actively pursue opportunities in Dubai, we expect to see not only sustained growth in inventory in line with our projected demand for occupied nights, but also further diversification across various asset classifications, to ensure that as a city we are the most globally competitive in providing our visitors the optimal range of options that cater to their preferences across the spectrum of hospitality offerings.” At the end of 2017, Dubai’s hotel inventory stood at 107,431 rooms, with growth of 4 per cent over the course of the year, and occupancy at 78 per cent. The emirate offset its capacity increase thanks to the 6.2 per cent growth in overnight visitors to 15.79 million. The statement adds that this robust performance is “particularly significant” as it came amid challenging economic and political conditions across key source markets, including the volatility impact of “fluctuating oil prices and Brexit.” Source: Gulf News Back to Index

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DEVELOPER S NEED TO PUT 20% OF PROJECT VALUE IN ESCROW Thursday, February 22, 2018 In response to recent media reports, the Dubai Land Department (DLD) has confirmed that developers only need to deposit 20 per cent of the project’s value in escrow ahead of launching off-plan sales. They also need to verify ownership of the project and pay its value in full, in addition to receiving all approvals from the competent authorities, according to a statement issued on Thursday. Sources had told Khaleej Times on Tuesday that a proposal was being mulled which would force developers to launch off-plan sales only once construction had reached the 50 per cent mark. This was to reduce the pace of off-plan launches in Dubai. But in the latest statement, there is no mention of any plan to raise the 20 per cent limit to 50 per cent as a requirement for developers to launch sales. Sultan Butti bin Mejren, director-general of the DLD, said: “There is a strong coordination among all relevant government institutions, including the DLD, as well as between developers and various parties in the market to establish confidence among investors and achieve the highest degree of transparency in Dubai’s real estate market.” The Land Department’s statement said 150 new projects were registered in Dubai during 2017, at a combined value of Dh82 billion and that 90 projects were completed during the period. Source: Khaleej Times Back to Index

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PROPOSED RULES MAY HIT OFF-PLAN SALES IN DUBAI Sunday, February 11, 2018 Regulatory authorities in Dubai are now tightening the screws on developers to ensure on-time delivery of projects. Industry sources claim the regulator has proposed that developers can only launch sales on off-plan projects once construction reaches the 50 per cent mark. This will also help reduce the risk of market oversupply and result in consolidation among smaller private developers. As it stands, the law stipulates that 20 per cent of construction funds be provided by the developer as a form of bank guarantee in addition to a 10 per cent guarantee performance bond by the contractor. This ensures that 30 per cent of the funds are in place. Or else, the percentage of construction to achieve was 20 per cent. "Any move higher exerts obligatory pressure on the developers to ensure that financial close is that much more secure. This is the norm in developed markets but also where banks are sufficiently comfortable in extending this form of finance to developers," says Hussain Alladin, head of IR and research at Global Capital Partners. However, larger state-backed developers are reported to be exempt from this move, considering their track record of execution and delivery, while few of the smaller developers sometimes do not deliver as per design and scheduled timelines. This decision comes in the wake of a record year for off-plan launches in Dubai in 2017. "Off-plan sales have been burgeoning over the last 12 to 18 months. We have been cautioning the market of this trend, particularly given its detrimental effect on ready sales, and the systemic risk building up if occupier [tenant] demand is not able meet the deliveries in new supply in the affordable segment in the mid term," observes David Godchaux, CEO of Core Savills. This proposal is likely to slow down the pace of off-plan launches in the short term. It will also reduce the risk that is currently building up on the back of a few developers flooding the market with sometimes lower quality product at heavily discounted prices and lucrative payment plans. "The initiative will further help in filtering developers who have the ability to complete projects. It will also increase buyers' confidence in off-plan projects. At the same time, authorities must consider developers who have performed and delivered over the years. Based on their performance, they can keep the same rule of selling after completion of 20 to 30 per cent," explains Sailesh Israni, director at Sun & Sand Developers. Other market stakeholders are calling for a more comprehensive control of the supply, specifically in outer areas and lower price segments. "This will help property developers to become more responsible and careful before planning new projects - and discourage business houses and developers with limited financial resources. It might eliminate certain developers who are struggling with finance," remarks Atif Rahman, director and partner of Danube Properties. This move is expected to raise the barriers to entry into Dubai's real estate market. The proposal may also divert customers from off-plan to ready-to-move-in properties and help fill up growing inventories. "It is a timely intervention and a step in the right direction. This also means that property developers will have to become more responsible towards their customers and all stakeholders," suggests Sailesh Jatania, CEO of Gemini Property Developers. Source: Khaleej Times Back to Index

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DUBAI TO SOON UNVEIL FIRST 3D-PRINTED VILLA Monday, February 19, 2018 Dubai will see its first 3D-printed villa in two months, Engineer Hussain Nasser Lootah, director-general of the Dubai Municipality, told the Emarat Al Youm daily. The technology would be used to build villas in a government housing programme. 3D printing will reduce construction costs and shorten delivery timeframes. The technology is expected to disrupt the construction industry. According to Dubai's 3D Printing Strategy, 25 per cent of all buildings in Dubai will be 3D printed by 2030. The Dubai Municipality has brought all the necessary tools and equipment to build the villa, said Lootah. "3D printing is a disruptive technology, one that promises to upend the entire real estate industry. Currently, the process is still more expensive than conventional building methods; moreover it is in its embryonic stages, being able to accommodate only rudimentary designs. However, within a 10 to 15-year time frame, it appears likely that this form of 'printing' will start to replace existing methods of construction," said Sameer Lakhani, managing director of Global Capital Partners. A Dubai-based startup, Cazza, had announced in February last year that it would build the world's first 3D-printed skyscraper. Source: Khaleej Times Back to Index

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5 AFFORDABLE APARTMENTS NEAR METRO STATIONS IN DUBAI Monday, February 19, 2018 The unfailingly punctual Dubai Metro is the lifeline of millions of UAE employees who travel across its extensive routes to their offices everyday. Connecting most residential and commercial areas in the emirate, the Metro allows commuters to sail over peak morning and evening traffic. No wonder that people are always on the lookout for accommodations near the Metro. Khaleej Times takes a look at five such options you can explore: 1. 1-bedroom flat for rent near Salah Al Din Metro Station Rent: Dh55,000 per year (details here) 2. 2 BHK flat for family near Karama Metro Station Rent: Dh65,000 per year (details here) 3. 1 BHK flat on rent for family, Golden Sands area, Bur Dubai. Walkable distance from Al Fahidi Metro Station Rent: Dh58,000 per year (details here) 4. 2 BHK flat on rent near Abu Hail Metro Station Rent: Dh65,000 per year (details here) 5. 2 bedroom flat near Salah Al Din Metro Station Rent: Dh65,000 per year (details here) Source: Khaleej Times Back to Index

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FOR SOME DUBAI DEVELOPERS, OFF-PLAN SALES ARE PASSE Saturday, February 24, 2018 For some developers in Dubai, finishing a project is as good a time as any to start selling it. This could even turn into a competitive advantage for developers with Dubai recording a steady pick up in demand for completed properties even as off-plan volumes show a decline. More so, as Dubai’s real estate authorities are likely to make compliance on construction timelines and build quality as priorities when it comes to licensing projects. According to market talk, developers are already facing increased scrutiny from the authorities on their projects — both at the time of registering and at the time of completion. Quality of build is the buzzword these days in official circles, developers say. And with consequences for anyone failing to deliver their promises. BUS Raju Shroff“With so much of off-plan being launched and sold, a stronger regulatory oversight is always good … for property buyers,” said Raju Shroff, one of the partners in Signature, which has two blue-chip projects in its portfolio. “Dubai’s property market is entering a crucial phase with a flood of new properties to be delivered between now and end of the decade.” This is why Signature is placing so much emphasis on its first project delivery — the pricey 118 at the Downtown and about 50 metres from The Dubai Mall. The ground plus 44-storey structure features only 28 units, with prices averaging Dh3,500-Dh5,000 a square foot, making it one of the super-premium offerings currently. Each apartment takes up an entire floor and the duplexes — and there are only two of them — would cost Dh55 million to Dh65 million. “Definitely, we are using the handover as a strategy to sell the remaining 14 units,” said Shroff. “The initial units were mostly sold through private sales during the course of the project. And we always knew that to attain sell- out, we would have to show the end product to potential buyers. “Now, with people actually staying in the tower, they will be the best advertisement and marketing we will have to sell the rest of the units. “With so much of off-plan inventory in the market, the serious buyer needs to see something concrete or in marble, not just brochures. When we launched the 118, we promised a Manhattan experience and Mayfair finishes at the building — completing it and then make a serious sales push was the right thing to do.” It’s not just at high-rises that developers in Dubai are taking the “seeing is believing” approach. At Jumeirah Golf Estates (JGE), Jupiter Holdings recently launched sales for the 34 premium villas making up Sienna Views … but after building the properties. The developer is owned by a high net worth Saudi investor. Prices start at Dh1,050 a square foot for the 22 units facing the Fire golf course while the others come with a Dh900 psf price tag. “We have sold eight of the 34 units, including six that was picked up by a private investor,” said Phil Sheridan, CEO of Fine & Country, the estate agent. “Given that it is a premium project and location, we are aware that it will take time to sell out and we are prepared for that. “In the kind of market sentiments we have right now, high-end products can’t be sold — or leased -overnight. But there’s a buyer/tenant base out there who want to move the next level up from a mature development such as Jumeirah Islands or a Meadows to a greenfield site. Jumeirah Golf Estates provides that sort of option — there aren’t that many communities with the extent of greenness and tranquillity, or of kids on their bikes.”

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According to Sheridan, JGE currently has about 850 units built and with an occupancy in the 90 per cent plus territory. “It’s true that JGE properties haven’t seen too high a capital appreciation and there’s still plenty of stock coming, both from the master-developer and private players.” Market sources suggest that more developers — at least those with deep pockets and don’t need to live off off- plan proceeds — will hold back sales until completion or close to that milestone. There are also concerns that speculators are coming back into the off-plan space, and much more easily these days given the low upfront payment offers and post-handover plans. It’s in the ready space that longer term investors and end users are being seen. Going forward, this could become even more apparent as market sentiments shift towards delivery dates and not on off-plan incentives. As such, there isn’t much left that developers with off-plan can give away as incentives. Or they could follow Innovate Living’s approach — for its super-luxury Palme Couture Residences on the Palm, it’s strategy was to sell the 14 units “after completion to allow owners an opportunity to appreciate the real value of their investment”. The units range between 5,028 square feet to 10,750, while a ‘“royal penthouse” takes in 19,247 square feet and includes a separate three-bedroom guesthouse and terrace. According to Kareem Fahmy, CEO of Innovate Living, “With investments in a range of projects valued at over $125 million across different divisions, we plan to make further forays following strong interest in our brand.” And in doing so, possibly change the off-plan sales fixation of Dubai’s developers. Source: Gulf News Back to Index

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DUBAI’S LAND DEPARTMENT RETAINS STATUS QUO ON OFF-PLAN SALES Thursday, February 22, 2018 Dubai’s real estate authorities have decided to retain the status quo on the percentage developers should put up in escrow before launching offplan sales. But there could still be significant differences between what developers used to put up earlier and what they have to do now. In a statement issued Thursday, the Dubai Land Department said developers need to place in escrow 20 per cent of the “total project value”. Developers until now had been used to putting up a bank guarantee of the “value of the construction”. Clearly, there will be a marked increase in developer guarantees if the “project value” is enforced. Project value is much more than the sum of the costs related to construction. Developers will be awaiting further clarification from the real estate authorities on what this might mean. There is a strong demand from developers to “deposit the 20 per cent escrow of the total value of the future projects they intend to launch”, the Land Department statement had added. In addition to the percentage of the project value as escrow, developers must continue to verify ownership of the project and pay for the land to be used in full. In addition, they should also receive approvals from all “competent authorities”. There were plans to enforce stricter requirements that freehold developers had to comply with, according to informed sources. But in the latest statement, there was no mention of any plan to raise the percentage limit to 50 per cent of project completion as a pre-requisite for developers to launch offplan sales. There were many who believed that such a higher limit would scale down the pace of offplan launches and sales and that it could hurt the Dubai property market in the short-term. But many big developers had been arguing that there were too many offplan launches happening in Dubai, many of them with extended post-handover payment terms. This was bringing back speculative buyers into the marketplace, developers had warned. But in a statement, the Land department tried to dispel all concerns on medium-term health of the market. Sultan Butti bin Mejren, Director-General, said: “There is a strong coordination among all relevant government institutions including Dubai Land Department, as well as between developers and various parties in the market, to establish confidence among investors and achieve the highest degree of transparency in Dubai’s real estate market.” This “enhances investor confidence in real estate development projects”. Late last year, real estate authorities had been sounding out private developers about the need for stricter project compliance and on build quality. It was at the time that the 50 per cent cut-off was mooted for offplan sales to begin. Some of Dubai’s leading developers and even boutique operators had confirmed to ‘Gulf News’ that such a move had been in the pipeline and that it would have come into effect this year. (Apparently, the move would have exempted government owned developers from the requirement.) As such, there were limited offplan launches in Dubai during the first few weeks of this year, with Emaar and Damac launching one apiece and another one from LIV, a boutique developer with a tower project in Dubai Marina. It will be interesting to see whether offplan launches pick up now that the Land Department has clarified the 20 per cent escrow requirement.

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The Land Department’s statement also said that 150 new projects were registered in Dubai during 2017, at a combined value of Dh82 billion. And that 90 projects were completed during the period. According to Bin Mejren,

“All agreed and applicable procedures in the market provide reassurance to both developers and investors. They also work to limit transgressions among all parties, and prevent the emergence of any negative activities to protect the Dubai’s real estate market, especially as it has gained wide international fame by focusing on protecting the rights of all. This has attracted investors from all over the world, establishing Dubai as the preferred place to live, work and visit.” What Dubai’s developers had been used to ahead of offplan launch For opening an escrow account, developers needed to funish: -Twenty per cent of the project’s construction works shall be completed or a bank guarantee of 20 per cent of the value of construction shall be provided; -No Objection Certificate from the master-developer stating the project name and authorizing offplan sales and marketing; -Final building permits; -Copy of the Commercial License: -Title deed of the land in case the owner of the land and the developer are different. Source: Gulf News Back to Index

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PAY WITH CRYPTOCURRENCY, GET DISCOUNT AT THIS PROPERTY Thursday, February 22, 2018 Samana Developers has broken ground on its first real estate project - Samana Greens, with an offer of 7 per cent discount for buyers who make payments through cryptocurrency. The project will come up at Arjan. The Dh75 million Samana Greens will deliver 131 residential units comprising studio to 2-bedroom apartments. Construction is scheduled to start this month and will be completed in April 2020. Property buyers will be able to make transactions using the developer's digital currency channel. Imran Farooq, CEO of Samana Group of Companies, said: "Samana Greens will be based on green building concepts. Customers can choose their preferred mode of payments - be it cash, cheque, credit card, home finance, bank transfer of cryptocurrency." The project will be fully financed by Samana Developers. Once construction starts, Samana Developers will announce the pricing and payment plan. In September, the Aston Plaza and Residences development in Dubai Science Park began offering off-plan studios and one- and two-bedroom units starting from around 30, 50 and 70 bitcoin, respectively. MAG Lifestyle Development said it is ready to accept payments in Islamic cryptocurrencies, including OneGramCoin. The developer also announced in December 2017 a 5 per cent discount for "digital" buyers in any of its eight current real estate projects. Source: Khaleej Times Back to Index

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ROOM RATES REVEALED FOR JUMEIRAH'S FIRST ZABEEL HOUSE HOTEL Tuesday, February 20, 2018 Rooms rates have been revealed for the first Dubai hotel to open under Jumeirah Group's new Zabeel House brand. Zabeel House by Jumeirah Al Seef will open on the banks of Dubai Creek this spring, with summer rates starting from AED495 per night, increasing to AED725 for the winter months. Zabeel House by Jumeirah Al Seef is the first hotel in Jumeirah’s new ‘upscale-casual’ collection, a statement said. A smaller version is also opening next door – Zabeel House MINI by Jumeirah – with a lower price point that doesn’t skimp on style or comfort, Jumeirah said, adding that rates would start from AED350 (summer) and AED495 (winter). "Guests will step into two contemporary retreats, creatively designed with some Insta-worthy quirks, relaxed restaurants and a rooftop pool; and step out to one of Dubai’s most exciting neighbourhoods," the statement said. The bigger hotel will offer 200 rooms, either Popular, Plush or Suite, plus four restaurants and bars, pop-up events, and a rooftop infinity pool. Zabeel House MINI by Jumeirah Al Seef will offer 150 rooms, a courtyard space designed for pop-up events and outdoor film, plus two street-food inspired restaurants. Source: Arabian Business Back to Index

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DORCHESTER COLLECTION TO MANAGE RECORD-BREAKING PALM JUMEIRAH PROJECT Tuesday, February 20, 2018 Dubai-based developer Omniya on Tuesday said the Dorchester Collection will manage its One Palm development on The Palm Jumeirah, making it the first residential development in the Middle East to be managed by the luxury hospitality brand. The news follows last week’s announcement of the partnership between the two companies that will bring Dorchester Collection to the region for the first time, with a new development on the banks of Dubai Canal. The development includes a 5-star hotel and luxury residences, managed by Dorchester Collection, at Marasi. One Palm broke the record for the most expensive penthouse in Dubai last year when one buyer paid ($27.7 million (AED102m) for the rooftop property. The price tag far exceeded the previous title price tag of AED60 million set earlier this year. New project confirmed for one of the largest waterfront plots in Dubai's Marasi district The triplex unit has been designed in opulent rich textures of London-based luxury design studio Elicyon, famed for its involvement in the renowned One Hyde Park building. The buyer bought the unit on the condition of a very specific request. Despite One Palm offering three swimming pools, the buyer asked that a 20-metre long private lap pool was built on the rooftop of his penthouse, so that he could swim in private. Source: Arabian Business Back to Index

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ABU DHABI LAUNCHES AN INVESTMENT OFFICE TO ATTRACT FDI Tuesday, February 20, 2018 Abu Dhabi’s Department of Economic Development on Tuesday launched an investment office that will focus on attracting investments to help in the diversification of the economy, a top official said. Called the Abu Dhabi Investment Office, it will act as a one stop centre for investors to invest in various sectors of the economy. “It will act as an FDI promotion office, deal structuring and in solving challenges facing investors in Abu Dhabi,” said Khalifa Bin Salem Al Mansouri, the Undersecretary of the Department on the sidelines of the launch. Abu Dhabi has attracted around Dh95 billion as of end 2016, he said adding that 2017 figures are not yet ready. Abu Dhabi is investing billions of dirhams in building infrastructure, creating free zones and developing tourism and leisure sectors as it tries to boost growth and diversify the economy. The Department of Economic Development expects Abu Dhabi to achieve a 3 per cent average growth from 2018 to 2021 with 4.2 per cent growth in the non-oil sector and 2 per cent for the oil sector. Source: Gulf News Back to Index

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HOW DO I TACKLE MY ABU DHABI NEIGHBOUR'S NOISY PARTIES? Wednesday, February 21, 2018 Every week, a tenant in the building I rent a flat in holds a very noisy party with many guests and loud music etc. Sometimes this goes on into the early hours, keeping my family awake. I have tried to reason with this person but to no avail. I have also informed the landlord but nothing has been done. How do I manage this situation? HA, Abu Dhabi When it comes to matters of unsociable behaviour there are a few things that can be done to eradicate this problem. The first is to speak to the occupants to explain that their behaviour is not reasonable for others to tolerate. The second is to inform their landlord directly. As you have already tackled both of these suggestions to no avail, the third option available to you is to speak to the building management/security. They ought to speak to the occupants directly and this should be enough to either get the music/noise turned down sufficiently or closed off. If none of this works, the final option is to call the police who, no doubt will pay a visit to the neighbours. This in itself should stop the party all-together. My landlord wants me to agree to a bill of Dh8,000, which he will deduct from my Dh11,000 security deposit . He sent me a quotation but I completely disagree with it because he’s asking me to repair things that I had asked him to repair while I was renting the apartment. During the two years I lived there, I faced AC issues, a leaking ceiling because of the AC and mould with a horrible smell. Towards the end, we even had rats. Because he knew all of this, I assumed he would return my deposit in full but instead he told me it is my responsibility, as the tenant, to return the property in a usable condition for the next tenant. He added that he does not want to take money from me and if I agree to pay he will pay half the bill. I am still totally shocked by this. We are supposed to meet to discuss the matter further but I do not have any condition report from the first day I moved in. However, I do have pictures and videos of the problems. What do you suggest? ST, Dubai I always recommend face-to-face meetings to resolve differences, so it is good that you have already organised this. At this meeting, you will have to remain calm and explain to the landlord exactly what is expected of him and that it is his responsibility to repair and maintain the rented property. The tenant's deposit is only used for repairing and replacing items damaged as a direct result of the tenant's negligence. While a property condition report would have been an excellent tool to have at your disposal, possessing the videos and photos taken on the day you moved in will also be of great help. Remember that major maintenance is always the responsibility of the landlord while minor repairs lie with the tenant. These are often differentiated by monetary values, for example under Dh500 is regarded as minor and over this sum is major. When vacating, a tenant has to return a property in the condition it was given at the start of the tenancy so for example, if it was freshly painted and cleaned, this is how you have to return it. I suggest you agree to paint and clean the property but only after the landlord has repaired the AC, rectified the mould and resolved the smell. If you did have rats, I assume you called in pest control so would have invoices,

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documents or photos to show evidence of this. If the landlord insists on his stance and you still do not agree, you always have the option of filing a case at the Rental Dispute Settlement Centre. The committee will ultimately decide on the outcome but remember that it costs 3.5 per cent of the annual rental amount to open the file. Source: The National Back to Index

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NEW PROJECTS APPROVED IN ABU DHABI Thursday, February 22, 2018 His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces, yesterday approved three landmark development and tourism projects in the capital. Covering three million square metres, the projects include establishing a seaport, a media production city and a creativity zone. The projects will be implemented at Zayed Port. Shaikh Mohammad approved the projects while visiting the Al Mina area where he was accompanied by Jassim Mohammad Buatabh Al Zaabi, Chairman of the Abu Dhabi Executive Office and Member of the Abu Dhabi Executive Council, and Falah Al Ahbabi, Director General of the Abu Dhabi Urban Planning Council. The Abu Dhabi Crown Prince was briefed on the projects’ components and stages of implementation by Jassim Al Zaabi, Falah Al Ahbabi and Mariam Eid Al Muhairi, the director-general of Abu Dhabi Government Media office. Exceptional development Shaikh Mohammad said that Abu Dhabi, under the directives of President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, is witnessing an exceptional development rate for urban projects that offer new and distinctive marine destinations for Abu Dhabi residents and visitors, while at the same time preserving its national identity, cultural and human resources. He also highlighted the importance of developing projects that serve the capital’s residents by providing tourist facilities that attract visitors and tourists, and thus enhancing the emirate’s reputation as a leading business and tourism destination, which will thereby increase investment opportunities for companies and diversify the national economy. Shaikh Mohammad also called for the development of the Zayed Port as a multipurpose area, as well as for the redevelopment of all community markets in the Al Mina area, including fish, vegetables, wood and carpet markets. The Media Production City will be located at Zayed Port, spanning 300,000 square metres. It will contain an external filming site and TV and cinema production studios. The move follows Abu Dhabi’s massive success in attracting a number of Hollywood and Bollywood films to the city. The Creativity Zone will be developed in cooperation with the Salama Bint Hamdan Al Nahyan Foundation. It will offer innovators in Abu Dhabi residential and miscellaneous facilities to carry out their work, in addition to leisure and recreational areas, all of which will be located around Warehouse421. The project will be a cultural destination for artists and designers, and will help enrich the creative community of UAE residents and visitors. Source: Gulf News Back to Index

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NOW, SHARJAH’S DH25B WATERFRONT CITY SETS SAIL Monday, February 19, 2018 Sharjah’s Dh25 billion Waterfront City is starting to show up on the development radar. Just under two years after its announcement, infrastructure works on the 60 million square foot mixed-use destination in Hamriyah have reached key milestones. Work on a Dh220 million substation that will provide 700 megawatts (MW) of power has started. The structuring of the canals and eight islands is complete — as are the bridges interconnecting the islands. Construction has started on the 326 villas on Sun Island. Sultan Al Shakrah“We have finished the roads and bridges, and now we have launched sales for the villas in Phase 1,” said Sultan Al Shakrah, chairman of the Sharjah Oasis Real Estate Company and the developer of Waterfront City. “So far, we have had 30 per cent of the units sold, and these prices are from Dh2.5 million to Dh8 million.” These are pricier than the recent launches Sharjah has had, which does make the 30 per cent mark in a relatively short time frame noteworthy, according to market sources. And with the development stretching across a 36km beachfront, location sure plays to Waterfront’s City’s advantages. Of the eight islands making up the city, Sun Island is due for completion by September 2019. Phase I covers 499 plots on Sun Island and Thuraya Islands and a central business district with 24 towers. This phase will entail a development cost of Dh9.5 billion and occupy 4.5 million square feet. And clearly, there is appetite among investors for the new generation of mega projects in Sharjah. Apart from Waterfront City, Sharjah has been witness to an unprecedented development boom, led by projects such as the Dh24 billion Aljada, Tilal City, and those from the Shurooq-Eagle Hills joint venture. Just this week, Shurooq, the Sharjah investment authority, confirmed a deal with Kuwait’s Mabanee for a retail destination. Both the older and new locations within Sharjah are part of this full-scale new development drive. As for Waterfront City, isn’t two years between the launch of a development and off-plan sales to start quite a stretch? According to Al Shakrah, “We did not want it any other way. The plan was to have all of the infrastructure — or as much of it anyway — ready before the sales.” Final masterplan The final masterplan for Waterfront City has provisions for 1,500 villas and 65 mid-rise buildings. These are to be delivered over six phases. But Al Shakrah makes a clear distinction. “We will proceed with the later phases depending on the market situation at the time. We are not going to rush into anything just because of pre-set timelines. You play by the market rules and cycles,” he said. But there will still be plenty in the initial phases, not least a Crystal Lagoon with as many as 38 rides. One of the biggest names in the destination experience business, Jack Rouse Associates, has been tasked with this responsibility.

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If all goes according to plan, the final round of works is set for completion in 2021. The development will have a resident population of 60,000 when complete, 14 hotels and serviced apartments, and a marina capacity for 800 berths. “Waterfront City will not only be about residences or water rides,” Al Shakrah said. “We have won the necessary approvals for a mall, there will be hotels, one hospital and a private university. “Banks are quite willing to see us achieve our goals, plus we have the funds and could come up with our own financial structure.” New freehold supply and rents in Sharjah What will be interesting to see what sort of longer term impact the new freehold supply will have on Sharjah’s rental rates. Already, residential rents are under severe pressure, brought on by a combination of new supply and a weak economic situation. But as was the case with Dubai’s first freehold boom, Sharjah current freehold spree is concentrated on prime properties and locations. Source: Gulf News Back to Index

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COMING UP: NEW RETAIL PROJECT IN SHARJAH Sunday, February 18, 2018 The Sharjah Investment and Development Authority (Shurooq) has unveiled a new partnership with Kuwaiti developer Mabanee to develop a real estate project in Sharjah. The new partnership was formed during an agreement signing which took place on Sunday between Sheikha Bodour bint Sultan Al Qasimi, chairperson of the Authority, and Mohammed Abdulaziz Alshaya, board chairman of Mabanee. Covering 65,000 square metres, the new development in the Mughaider area aims to transform the area into a premium tourist and leisure destination for Sharjah's residents and visitors. The development will house stores, restaurants and cafes and high-end recreational facilities. The new project will be developed and managed by Mabanee. The project aims to provide investment opportunities in commercial, residential and tourist sectors. Sheikha Bodour said: "Sharjah maintains its status as a prime investment destination within the region and in keeping with its strategic plan, Shurooq constantly looks to explore ways to forge new partnerships with top investors." Alshaya said: "As the largest real estate company in Kuwait, Mabanee sees investment opportunities in the UAE, especially Sharjah, as a new horizon for its business growth. This approach draws on the immense success of our flagship project 'The Avenues Kuwait' and extends our business operations even further beyond Kuwait to Saudi Arabia and Bahrain where 'The Avenues Bahrain' was inaugurated in October 2017. Work is currently underway on 'The Avenues Riyadh' and 'The Avenues Al Khobar' with total investments of $5.67 billion. He added: "Sharjah was the first choice for us as a new project in light of its investment-friendly environment, sophisticated infrastructure and legislative framework." Source: Khaleej Times Back to Index

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DEVELO PER OF DH25BN SHARJAH WATERFRONT CITY EXPECTS TO SELL PHASE ONE UNITS BY JUNE Tuesday, February 20, 2018 Sharjah Oasis, the developer of the Dh25 billion Sharjah Waterfront City, expects to sellunits of phase one by June as the emirate's private sector banks on increase in non-Arab citizens owning freehold real estate, its chief executive said. Sharjah Waterfront City is expected to be built over six phases with phase one comprising 321 villas on Sun Island and is set for completion by September 2019. The private developer declined to put a value on phase one. “We sold approximately 50 per cent [of units], and as per the demand the first phase will be closed by June,” Sultan Al Shakrah of Sharjah Oasis told The National. Sharjah has a growing population of around two million that is overwhelmingly expatriate. Much of Sharjah’s real estate remains geared towards affordable housing for expatriates who live in the emirate for its low cost of living but are employed in Dubai. Arab nationals can buy on a freehold basis in Sharjah, but other nationalities can purchase homes on a 100-year lease. In 2014, the government of Sharjah passed a law permitting anyone with a valid residence in the UAE to buy property on a 100-year lease but not land. Since then mega-developments such as the Dh24bn Aljada developed by a firm owned by Saudi Arabia's billionaire Prince Alwaleed bin Talal as well as Tilal City - a joint venture between Sharjah Asset Management and Eskan Real Estate Development - are tapping into the growing demand for freehold property in the emirate. Developers such as Sharjah Oasis believe the waterfront development, which lies on Sharjah’s outskirts along its border with the emirate of Umm Al Quwain, can offer returns on investment of up to 12 to 13 per cent from the time of handover of units in September 2019. “We’re welcoming all sub-developers who are serious and have a good reputation, hunting selected developers to come join with us at this point,” Al Shakrah said. The development located along Sharjah’s expansive waterfront offers villas ranging from 2,800 square feet up to 15,000 square feet at a price range of Dh2.5m to Dh8m, competing with similar developments launched in Dubai along older community hubs such as Deira. Sharjah’s ambitions are Dubai-scale with the upcoming water front development offering a habitat for around 60,000 people in 1,500 villas, 95 towers built on artificial islands, a water theme park, the emirate’s largest shopping mall, a commercial cluster and retail arcade as well a water theme park and a marina with 800 berths for good measure. The developer has so far completed Dh3bn-worth of infrastructure works that has among other things created eight islands and 20 kilometres of new coastline and beachfront properties. Source: The National Back to Index

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FREEDOM SLOGANS COME AT A PRICE FOR CATALONIA’S PROPERTY Wednesday, February 21, 2018 Global pension funds, insurers and other investors are holding back on buying office space in Catalonia due to fears a split from Spain could lead to an exodus of business from the region. Corporate property in the wealthy northeast and its capital Barcelona has been a hot ticket, but interest has cooled since October’s disputed independence referendum and pro-independence parties’ bid to reinstate sacked leader Carles Puigdemont. Investment in office space in Catalonia from October to December dropped by 63 per cent from the previous quarter and 84 per cent on the year-ago period to 71.5 million euros, according to data provided by CBRE. The concern is that if Catalonia splits from Spain, it would drop out of the European Union, forcing companies to move from the region to avoid being subject to tariffs.“We speak regularly to our investors and they have told us they don’t want to touch Barcelona office investments for now,” said Carsten Czarnetzki, country head for Spain at AEW Europe, which has 26.6 billion euros of assets under management in Europe of which 430 million euros are in Spain. The figures, along with a drop in tourist numbers, are a sign the political standoff is already having an economic fallout as funds wait to see if companies which have already moved their registered headquarters follow up by shifting employees. Some investors are using the uncertainty to win discounts. Meridia Capital, a Barcelona-based fund investing in Spanish real estate on behalf of global pension funds, insurers and sovereign funds, got 5 per cent off the price of shopping centre Barnasud, bought for 21 million euros in November, said Javier Faus, CEO. “I said: ‘Give me a small discount to reflect the Catalan situation’,” said Faus, whose firm has invested 800 million euros in real estate over the last four years, mostly in office space split more or less equally between Madrid and Barcelona. Meridia has 400 million euros of assets under management in Barcelona and Faus said high demand and a scarcity of buildings had made discounts harder to get earlier in the year. Real estate accounted for 11 per cent of foreign investment in Spain in the first nine months of 2017, making it the second-biggest sector to receive funds from abroad after energy, according to economy ministry figures. Spain is still an attractive destination for those seeking to invest in commercial real estate. The government expects the economy to grow by around 3 per cent this year, making it one of the fastest-growing in Europe. However, the weighting of Catalonia in investment in Spanish office space roughly halved in the fourth quarter compared to the three previous quarters to 18 per cent, the CBRE data showed. Catalonia’s capital Barcelona is a thriving Mediterranean city that has drawn many corporate tenants in the technology and media businesses in recent years from Amazon.com Inc to online game maker King, creator of Candy Crush. The region is a manufacturing and industrial hub, accounting for one fifth of the Spanish economy and a quarter of exports, and it was named top European large region of 2018-19 for its strategy in attracting foreign investment by FDI Intelligence, a Financial Times unit.

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“It’s true that many have put investment on hold. On the bright side, no one has told me to get out of Catalonia for the next ten years,” said Faus of Meridia Capital.

The Catalan rental market, which has seen prime office rents rise by nearly a third since Spain emerged from recession in 2013, has so far held up, said Ines Arellano, director of investor relations at Merlin Properties, which has around 250,000 square metres of office space under management in Catalonia. There were fewer deals in the office rental market in the fourth quarter, but rents and occupancy rates continued to rise, she said, adding that the rental market took longer to react to external factors than investors. Rents averaged 23.5 euros per square metre for prime office space in the fourth quarter of 2017, compared to 31 euros in Madrid, according to CBRE. Average yield was 4.25 per cent. That compared to 17.75 euros per square metre in the fourth quarter of 2013, the year that Spain emerged from recession. More than three thousand companies moved their registered headquarters out of the region from October to December after a chaotic referendum led to a declaration of independence and the sacking of the regional administration. Companies continue to move their registered headquarters from the region, with the Spanish units of RayBan sunglasses maker Luxottica and chewing gum company Wrigley both shifting to Madrid earlier this month, according to company register data. But there has not been a flow of office jobs out of the city, however, and business areas like new development 22@ in the north of the city continue to draw big name tenants. Office blocks under construction in 22@ — a trendy area aimed at technology and media companies — have been pre-rented to Amazon.com Inc, US shared office space company WeWork and Norwegian media company Schibsted. Amazon closed the deal to rent 11,000 square metres in June 2017, according to the building’s then owner, Grupo Castellvi. “We don’t know what effect the political situation will have on demand,” said Czarnetzki of AEW. “We don’t think this situation is going to be resolved quickly. It’s a new reality that we’ll have to live with.” Source: Gulf News Back to Index

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NEW SALES ROUND KICKS OFF AT LONDON’S CHELSEA CREEK Wednesday, February 21, 2018 A new round of sales has started at London’s Chelsea Creek development, part of a regeneration project by the developer St. George. The Chelsea Creek project will deliver 2,376 homes. “The last 15 years has seen intense regeneration come to fruition and the market appetite remains robust,” said Tom Hawkins, Partner, Head of International Project Marketing Middle East, Knight Frank, which is handling the sales. “With the limitations of expansion within central London, areas open to regeneration remain exceptionally rare and this site represents a key marker in the London property market.” Source: Gulf News Back to Index

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LONDON BACK TO BEING TOP COMMERCIAL REALTY INVESTMENT HOTSPOT Sunday, February 18, 2018 London regained its status as the world’s most attractive market for commercial real estate investments, totalling £17 billion (Dh87.57 billion) from a 33 per cent year-on-year increase. This is according to Knight Frank, the consultancy, which also found that Middle East-based investors made up 8 per cent of the international capital that found its way into these transactions. In all, overseas investors channelled £14.2 billion into London’s office properties last year. New York was placed second and ahead of Paris and Frankfurt. Source: Gulf News Back to Index

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ACCORHOTELS SAYS PROFITS UP 66% IN 2017 Wednesday, February 21, 2018 French hotel chain AccorHotels said Wednesday that its profit jumped last year, “driven by robust business and a very dynamic development.” “The group has never been so strong,” boasted chief executive Sebastien Bazin. “AccorHotels’ earnings for 2017 mark another leap in performance, with excellent operating results and record development,” Bazin said. “The group continues to benefit from positive market trends with a confirmed increase in volumes.” AccorHotels, which is Europe’s biggest hotel group and includes Sofitel, Novotel, Mercure and Ibis, said in a statement that its net profit jumped by 66 per cent to €441 million (Dh1.9 billion, $545 million) in 2017. Underlying or operating profit grew by 24 per cent to €492 million on a 17.7-per cent increase in revenues to €1.94 billion euros, the statement said. The group said it opened 301 hotels last year with a total 51,413 rooms, bringing its overall hotel portfolio to 4,283 hotels and 616,181 rooms. “Against this buoyant backdrop, AccorHotels continues to pursue its dynamic trajectory, consolidate its market share and enrich its range of services for customers and partners,” CEO Bazin said. He did not provide any guidance for the current year. Source: Gulf News Back to Index

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RISING INTEREST RATES, INFLATION CONCERNS PUTTING UPWARD PRESSURE ON U.S. CAP RATES Friday, February 23, 2018 According to global property advisor CBRE, the recent rise in inflation and higher interest rates is expected to put upward pressure on U.S. capitalization rates in 2018, counterbalancing the impact of strong global capital flows into the commercial real estate sector. The CBRE North America Cap Rate Survey provides insights on movements for the major property asset classes. Cap rates for U.S. commercial real estate assets fell slightly in H2 2017, albeit with some variation by sector. Industrial and logistics cap rates tightened the most, with multifamily rates also edging down. Office and hotel cap rates had some modest changes in both directions. Retail cap rates increased, largely for power center assets. "U.S. cap rates were largely flat outside of the retail sector in H2 2017 though a shift from sale to refinance activity, contributed to lower transaction volumes. The recent spike in inflation and anticipated higher interest rates this year will add upward pressure on cap rates, offsetting the downward forces of expected strong institutional and global capital flows," said Spencer Levy, Senior Economic Advisor and Head of Americas Research, CBRE. Among the major commercial real estate sectors: Office cap rates for stabilized CBD properties decreased modestly for most asset classes and market tiers in H2 2017, reversing the upward trend that began in H2 2015. Stabilized suburban office cap rates ticked up, albeit at a slower pace than in recent months. Near-term cap rate stability is expected for the majority of CBD and suburban markets, both for stabilized and value-add product. "The flat cap rate environment is most indicative of two shifts: a material decrease in foreign capital in 2017 that was often the high bidder, particularly for gateway core office; and the shift towards the highly liquid refinancing markets for many would-be sellers. Overall, we expect flat to rising cap rates in gateway markets in 2018 due to both late cycle and rising interest rate factors, though fast-job-growth smaller markets may see further modest declines as investors search for yield and the depth of the institutional buyer pool in these markets increases," said Chris Ludeman, Global President, Capital Markets, CBRE. Industrial and logistics cap rates fell by 13 basis points (bps) for acquisitions of stabilized assets, finishing H2 2017 at 6.52%. Cap rates declined in all classes of stabilized properties. Most survey respondents (79%) expect no changes to stabilized and value-add cap rates in H1 2018, while 15% expect minimal decreases of less than 25 bps. "The industrial and logistics sector has performed exceptionally well though the best product--big box warehouse distribution in major markets with large credit tenants--is now unlikely to see further cap rate compression and there is increased institutional interest in smaller "last mile" sites that benefit from both e-commerce and the growth of new local industries," said Jack Fraker, Global Head of Industrial & Logistics, CBRE Capital Markets. Retail cap rates increased for shopping centers and some high-street properties in H2 2017, except for high- quality assets in select gateway markets. Value-add centers attracted increased interest from investors in H2, as pricing on core retail centers remained robust.

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"Retail cap rates, while showing only modest headline movement overall, actually rose a lot outside the best assets in the best markets, with particular weakness in power centers. Investors are rolling tenants' rents to market levels at their renewal rather than taking back the space," said Mark Bratt, Senior Managing Director, Institutional Properties - Retail, Capital Markets, CBRE. Multifamily maintained the lowest overall cap rate level among all property in H2 2017. Cap rates fell slightly due to investors' continued appetite for product. Robust investment activity kept cap rates for stabilized property acquisitions, as well as expected returns on cost for value-add assets, at historically low levels in H2 2017. "Multifamily is showing continued strength with a significant capital shift underway towards secondary and suburban markets cap rate compression could occur even in the face of any modest continued upward interest rate movement," said Brian McAuliffe, President, Institutional Properties, Capital Markets, CBRE. Hotel cap rates remained steady in H2 2017, especially in CBDs. Nearly every hotel segment and geographic area, including CBD and suburban, had modest, single-digit upticks or downticks in cap rates ranging from -3 to +6 bps. "The hotel sector continues to benefit from investors seeking yield premiums over other asset classes, despite slowing growth rates in underlying fundamentals. We are sensing renewed optimism around pricing power for operators in 2018. Interest from all equity types continues to be strong, enhanced by a perceived strengthening in fundamentals driven by optimism from the tax overhaul," said Kevin Mallory, Global Head and Senior Managing Director, CBRE Hotels. Source: World Property Journal Back to Index

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With over 30 years of Middle East experience, VALUATION & ADVISORY Asteco’s Valuation & Advisory Services Our professional advisory services are conducted by suitably qualified personnel all of whom have had Team brings together a group of the Gulf’s extensive real estate experience within the Middle East and internationally. leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai, Our valuations are carried out in accordance with the Northern Emirates, Qatar, and the Kingdom of Saudi Royal Institution of Chartered Surveyors (RICS) and Arabia not only provides a deep understanding of the local International Valuation Standards (IVS) and are undertaken by appropriately qualified valuers with markets but also enables us to undertake large instructions where we can quickly apply resources to meet extensive local experience. clients requirements. The Professional Services Asteco conducts throughout Our breadth of experience across all the main property the region include: sectors is underpinned by our sales, leasing and investment teams transacting in the market and a wealth • Consultancy and Advisory Services of research that supports our decision-making. • Market Research • Valuation Services

John Allen BSc MRICS Director, Valuation & Advisory SALES +971 4 403 7777 Asteco has established a large regional property sales [email protected] division with representatives based in UAE, Saudi Arabia, Qatar and Jordan.

Our sales teams have extensive experience in the Jenny Weidling BA (Hons) negotiation and sale of a variety of assets. Manager – Research and Advisory +971 4 403 7789 LEASING [email protected] Asteco has been instrumental in the leasing of many high-profile developments across the GCC.

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

OWNER ASSOCIATION Asteco has the experience, systems, procedures and manuals in place to provide streamlined comprehensive Association Management and Consultancy Services to residential, commercial and mixed use communities throughout the GCC Region.

SALES MANAGEMENT Our Sales Management services are comprehensive and encompass everything required for the successful completion and handover of units to individual unit owners.