News Brief 47

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NEWS BRIEF 47

SUNDAY 04 DECEMBER 2016

RESEARCH DEPARTMENT

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REAL ESTATE NEWS UAE

UAE HOTEL RATES IN OCTOBER SLUMP TO LOWEST LEVEL SINCE 2005 UAE THEME PARKS TO WELCOME MORE THAN 19 MILLION VISITORS BY 2020 DUBAI ARABTEC APPOINTS CONSTRUCTION INDUSTRY HEAVYWEIGHT AS CEO NSHAMA TO DELIVER 2,000 HOMES NEXT YEAR DUBAI DEVELOPER COMES OUT WITH MID-TIER HOTEL APARTMENTS 5 CHEAPEST AREAS TO RENT IN DUBAI SCHON TO DEVELOP HOTEL COMPLEX IN DUBAI INVESTMENTS PARK LOWER OFF-PLAN PRICES TO STOKE PROPERTY DEMAND IN DUBAI DEPA TURNS A PROFIT OVER NINE MONTHS ABU DHABI DOES ABU DHABI TENANT MADE REDUNDANT HAVE TO PAY RENTAL PENALTY FOR MOVING OUT EARLY? ADHA STARTS DISTRIBUTION OF 5,463 PLOTS OF LAND, 365 HOUSES TO CITIZENS MOHAMED BIN ZAYED ORDERS DISTRIBUTION OF HOUSING UNITS AND PLOTS OF LAND TO 5,828 CITIZENS NORTHERN EMIRATES RAS AL KHAIMAH SWINGS BACK INTO FULL DEVELOPMENT MODE RAS AL KHAIMAH RENTS HOLD UP WELL IN TIGHT MARKET SHARJAH PROPERTY MARKET SEES LIMITED RELOCATIONS NORTHERN EMIRATES RENTS STAY FLAT AFTER FALLING EARLIER THIS YEAR INTERNATIONAL LUXURY FLATS IN BRUTALIST STYLE ON OXFORD STREET LONDON’S 1 UNDERSHAFT TO BE SECOND-TALLEST TOWER IN WESTERN EUROPE

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ADHA STARTS DISTRIBUTION OF 5,463

PLOTS OF LAND, 365 HOUSES TO CITIZENS

Sunday, 04 December, 2016

In keeping with the directives of President His Highness Sheikh Khalifa bin Zayed Al Nahyan and His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, the Abu Dhabi Housing Authority (ADHA) started today the distribution of 365 houses and 5,463 plots of land to citizens in the Emirate of Abu Dhabi.

Under the supervision of Sheikh Hazza bin Zayed Al Nahyan, Deputy Chairman of Abu Dhabi Executive Council and ADHA Chairman, the Authority started to notify beneficiaries, via SMS messages, of their land or house allocations.

Some 4,065 plots will be distributed in Abu Dhabi, 1,215 in Al Ain, and 183 in the Western Region, while the housing units that are ready for distribution include115 units in Abu Dhabi,129 in Al Ain, and 121 in the Western Region.

ADHA Director General Badr Al Qubaisi said the distribution of plots of land and housing units stems from the leadership's keenness to provide decent living standards to the citizens.

According to Al Qubaisi, all housing units were designed and built to the 2 Pearl Design Rating, which confirms that construction meets the highest innovative green standards. Source: Emirates 24/7 Back to Index

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ARABTEC APPOINTS CONSTRUCTION

INDUSTRY HEAVYWEIGHT AS CEO

Friday, 02 December, 2016

The Board of Arabtec Holding PJSC Arabtec, the leading construction company in the GCC, announces the appointment of Hamish Tyrwhitt as Chief Executive Officer with effect from November 28th 2016.

In announcing the appointment, H.E. Mohamed Al Rumaithi, Chairman of Arabtec, said, "Hamish has a distinguished career in the construction industry. He has the experience necessary for Arabtec to further strengthen the company’s strategic and financial positioning and achieve its full growth potential. We are confident that Hamish’s leadership will allow Arabtec to move forward to a successful and sustainable future."

Hamish Tyrwhitt, Arabtec’s CEO designate, said, "Fundamentally Arabtec is a strong company with a great track record of achievements stretching back over the past 40 years. I am looking forward to taking the company forward and capitalizing on the many opportunities available to the Arabtec Group."

Prior to being appointed as CEO of Arabtec, Hamish Tyrwhitt worked for 27 years at Leighton Holdings Ltd., one of the world’s leading international construction contractors and one of Australia’s largest listed companies.

He held various positions in Australia and in Asia before being appointed as Leighton’s CEO from 2011 to 2014. He became CEO of Asia Resources Minerals, an Indonesian coal mining company listed in London, in March 2015, prior to being appointed CEO of Depa Group in April of 2016.

Mr. Tyrwhitt will retain his existing responsibilities as CEO of Depa Group in addition to becoming CEO of Arabtec Holding.

Mohamed Al Rumaithi added, "I would like to convey the Board's thanks to Saeed Al Mehairbi who has been acting CEO and has guided Arabtec successfully through the tough environment that has affected the construction industry. Saeed will continue to serve as a Director of the Arabtec Board."

Arabtec Holding, comprising nine principle subsidiary companies, is the leading construction company in the Middle East.

As previously reported, the Group is implementing a series of restructuring and cost reduction initiatives. Arabtec generated revenues of Dh6 billion in the first nine months of 2016, an increase of 17% over the same period last year.

The company has also reported revenues of Dh2 billion in the third quarter of this year, a 25% rise compared to the same period last year. Arabtec’s backlog of current and future projects stands at Dh20 billion. Source: Emirates 24/7 Back to Index

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MOHAMED BIN ZAYED ORDERS DISTRIBUTION OF HOUSING UNITS AND

PLOTS OF LAND TO 5,828 CITIZENS

Friday, 02 December, 2016

His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, has ordered the distribution of 365 houses and 5,463 plots of land to citizens in Abu Dhabi, Al Ain and the Western Region.

The move is in implementation of the directives of President His Highness Sheikh Khalifa bin Zayed Al Nahyan.

The housing units include 115 residential units in Abu Dhabi, 129 housing units in Al Ain, and 121 in the Western Region.

Plots of land will also be distributed to 4,065 citizens in Abu Dhabi, 1,215 in Al Ain, and 183 in the Western Region.

The residential units were built as part of a complex, and come equipped with communal facilities constructed according to the highest standards to ensure the highest level of safety and comfort of the population. Source: Emirates 24/7 Back to Index

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RAS AL KHAIMAH SWINGS BACK INTO FULL

DEVELOPMENT MODE

Wednesday, 30 November, 2016

Ras Al Khaimah’s real estate market is getting back into full development mode … and its leading developer is right in the thick of action. Rak Properties has confirmed it will flag off an estimated Dh5 billion mixed-use project within its Dh10 billion Mina Al Arab master-development next year.

“We are nowhere near utilising the full potential of the Mina Al Arab location, which covers 30 million square feet and with prime sea-facing land options,” said Mohammad Sultan Al Qadi, CEO and Managing Director. “The new project will take up 800,000 square feet and will have extensive focus on hospitality and retail elements. The project designs are still being worked on, but once the launch happens, it should keep us busy through to 2021.

“In the meantime, we will need to decide on the branding and other details — we will complete these processes closer to the launch date.

“For the funding needs, we will rely on equity and go in for external funding where needed, with a Sukuk [Islamic Sharia-based debt instrument] being one of the options.

“Ras Al Khaimah is in immediate need for new hotels and rooms … the estimates suggest as many as 10,000- 15,000 hotel rooms within the next 10 years.” (Currently, there are 5,000 rooms available.) Apart from building new, Rak Properties is also reviving dormant hotel projects that got hit in the aftermath of 2008’s crisis. Recently, it confirmed that work will restart on the 350-room upscale island property that will be managed by InterContinental Hotels and set to open in 2019. “We had Anantara coming in earlier, now it’s InterContinental and there are more to come.”

Independent reports suggest the northern emirate’s hospitality sector has been a steady performer in recent quarters and is set to cash in fully during the peak season over the next few weeks. Occupancy levels and bookings are already at optimal levels and that should continue all the way into late February.

According to the consultancy CBRE, hotels in the emirate managed “further growth in occupancy rates and revenue per available room” during the third quarter, “aided by the early timing of Ramadan which led to higher visitation during July as compared to the previous year”.

“Year-to-date occupancy rates have averaged over 70 per cent, but with peak visitation months during the final quarter, these figures are likely to be higher by year end,” it adds. “RAK’s hospitality market is currently one of the country’s tourism bright spots, as it bucks wider regional trends of declining room revenues.”

Joint venture

Signs of a project-led upturn are evident in some of the Northern Emirates, further evidence that the UAE real estate and construction sectors need not be entirely dependent on what is happening in Dubai alone. Ajman’s Al Zorah development — a joint venture between the emirate’s government and Lebanon’s Solidere International — is ticking off key construction milestones and simultaneously boosting its hospitality component. Umm Al Quwain recently signed off on a massive mixed-use project involving Sobha Group.

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The Rak Properties’ chief believes his emirate has every chance of taking its place in the sun. “I believe that Mina Al Arab offers us space — on- and offshore — to create more opportunities for Ras Al Khaimah’s hospitality sector,” the CEO said. “We don’t need to look around for additional land in the emirate. We have enough.”

But Rak Properties does have a presence in Abu Dhabi, in the form of the 24-storey Julphar Residences on Reem Island. “We are in the process of awarding the contracts — this will be our second venture in Abu Dhabi after RAK Tower, which we sold in 2013,” Al Qadi added.

“It’s too early to decide what we might do with Julphar Residences. As a development strategy, Rak Properties sells 70 per cent of whatever we build and retain the remaining for our leasing portfolio. This is a model that should work well for us.” Source: Gulf news Back to Index

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NSHAMA TO DELIVER 2,000 HOMES NEXT

YEAR

Tuesday, 29 November, 2016

There could be some respite in store for Dubai’s mid-tier residential rentals with more than 2,000 homes set to be delivered next year at Nshama’s Town Square development. The project — which currently has 5,000 units under construction — has been a favoured hot spot for end-user buyers.

Now, if of the upcoming 2,000 units, a good number are occupied by their owners, it could offer some respite to the residential market elsewhere in the city, especially in regard to rentals. Market sources have maintained that only significant new supply can ensure the rental dynamic veers ever so slightly in favour of tenants.

“For the first time, customers have the opportunity to shift from a rental model to owned homes in a mega- development with all the modern amenities,” said Fred Durie, CEO of Nshama. “The value proposition that we put forward is unbeatable.”

To date, the developer has issued construction contracts worth Dh3 billion awarded for eight residential projects and allied infrastructure. The 31 million square feet development is anchored by a central square, the Vida Townsquare Dubai hotel and a Reel Cinemas Cineplex.

According to Durie, “Across all aspects of the development, we have set clear construction milestones. Town Square will be a proud addition to the residential portfolio of Dubai, made distinctive for its affordability lifestyle attractions. “We are working with the best-in-class contractors and consultants, who have accelerated their workflow to ensure on-time delivery.”

Multiple residential launches

Key contractors include Shapoorji Pallonji, Kier Dubai, Al Naboodah Contracting, Beaver Gulf Group and Binladin Contracting Group.

Town Square has had multiple residential launches to date, most recently coming up with the Noor Townhouses featuring three- and four-bedroom homes. As of November, nearly a third of all work on the 730 Hayat Townhomes are done, with the foundation completed and superstructure is in progress.

For the Zahra Apartments — 546 of them — the superstructure work is progressing on Level 6 of the tower. Construction of the Zahra Townhouses (320 in number) is nearly 65 per cent complete.

Meanwhile, on the wider infrastructure, progress is as per schedule. This includes a massive 2.5 million cubic metres earthworks, 75 per cent of the sewer and storm water networks and 50 per cent of the potable water, irrigation, firefighting and telecom networks. The initial road works package has been awarded to Binladin Contracting, who is also responsible for the construction of wet utilities. Source: Gulf News Back to Index

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DUBAI DEVELOPER COMES OUT WITH MID-

TIER HOTEL APARTMENTS

Tuesday, 29 November, 2016

Dubai South and its immediate neighbourhoods have seen its share of new mid-market home launches ... now it’s the turn of hotel apartments. Schon Properties has launched iSuites, a Dh3.2 billion development that will feature 2,550 hotel apartments at Dubai Investment Park. It is to feature 21 buildings of nine floors and two basements. These, the developer says, will be delivered by 2020. Part of the iSuites inventory will be offered to investors. “Dubai, which has 100,000 hotel rooms and hotel apartments, will need 40,000 new hotel rooms and hotel apartments within less than 46 months as the clock is ticking for Expo 2020,” said Noorul Asif, Chief Operating Officer at Schon. The iSuites cluster will also have a 125,000 square feet retail promenade called the Laguna Centrale Mall. “iSuites is the commencement of Schon’s restructuring plan and change of development direction, fully focusing on hospitality ventures going forward,” said Asif. “Dubai’s hospitality market is segregated and spread throughout the city, but there are niche tourism hot spots which are expecting massive gains in the next three years.”

The turnkey construction contract has been awarded to Dubai Civil Engineering, part of Al Hamad Group. Source: Gulf News Back to Index

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5 CHEAPEST AREAS TO RENT IN DUBAI

Monday, 28 November, 2016

Dubai may be one of the best places in the world to live in, but housing affordability remains an issue for a lot of people.

Apartment costs are indeed one of the biggest expenses for residents in the country, constituting nearly about 50 per cent of the consumer basket. To minimize monthly outgoings, many expatriates end up sharing accommodations with strangers.

But take heart – there are still decent places out there that don’t necessarily break the bank. The key is to do some research and comparison shopping.

In general, accommodation cost varies widely across the emirate. Annual rents can differ as a result of a number of factors such as supply and demand, facilities, location or proximity to the city centre and transportation links.

A tenant renting a flat in an old, decrepit building near a Dubai Metro station could be paying more than those who opt to live in a shiny, new apartment in the outskirts. Far-flung or newly developed communities are some of the cheapest areas to rent.

Gulf News takes a look at the neighbourhoods where annual rents don’t cost an arm and a leg.

Most studio apartments in these communities cost below Dh50,000 a year or approximately lower than Dh4,000 a month. Generally, one-bedroom flats in these areas can cost between Dh48,500 and Dh66,000.

Here are the top five cheapest areas to rent, as of the third quarter of 2016. These places are ranked using the rental figures provided by property consultant Asteco:

1. International City

Average rent for studio units: Dh 37,500

Average rent for one-bedroom apartments: Dh48,500

2. Deira

Average rent for studio units: Dh45,000

Average rent for one-bedroom apartments: Dh62,500

3. Jumeirah Village

Average rent for studio units: Dh47,500

Average rent for one-bedroom apartments: Dh62,500

4. Discovery Gardens

Average rent for studio units: Dh49,000

Average rent for one-bedroom apartments: Dh66,000

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5. Jumeirah Lakes Towers

Average rent for studio units: Dh65,000

Average rent for one-bedroom apartments: 80,000

*Prices are as of Q3 2016

Where apartment rents have dropped*:

Discovery Gardens: -5%

Jumeirah Lakes Towers:- 5%

DIFC: -1%

Dubai Marina: -4%

Palm Jumeirah: -5%

Shaikh Zayed Road: -2%

Where apartment rents have increased*:

Deira: 2%

International City: 3%

Jumeirah Village: 1%

Greens: 1%

Downtown Dubai: 5%

*% change (Q3 2015- Q3 2016) Source: Gulf News Back to Index

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RAS AL KHAIMAH RENTS HOLD UP WELL IN TIGHT MARKET

Thursday, 24 November, 2016

Limited new residential supply has ensured Ras Al Khaimah’s real estate market has not had to go through the price and rental volatility recorded in Dubai and Sharjah during the first-half of the year.

So much so, gated communities in Ras Al Khaimah have outperformed the rest of the residential market within the emirate, according to the latest update from CBRE, the consultancy.

These locations are also fetching “significant premiums” for the investor. “Apartment lease rates in the developments of Al Hamra Village and Mina Al Arab are faring comparatively well with a two-bedroom unit ranging from Dh65,000-Dh75,000 and Dh60,000-Dh70,000,” the CBRE report states.

“A two-bedroom villa in Mina Al Arab ranges from Dh85,000-Dh90,000, a three -bedroom will range from Dh110,000-Dh140,000 depending on the size, view and location in the masterplan.”

But this is a factor of lower new supply meeting consistent demand. But new stock is coming through, with the “imminent handover of units at the “Pacific” development on Al Marjan Island,” the report notes. “The project, which is being developed by Select Group, comprises 1,440 apartments, with the handover process due to start during H1-17.

“New units are also expected within the Mina Al Arab development, with the handover of Phase II of the Flamingo Townhouses expected during Q4-16. In total, 57 new units are set to be delivered.

“Development activity in major masterplan locations such as Al Marjan Island is likely to pick up in the short to medium term, with a number of local and international developers having already purchased plots with a view to delivering mixed-use schemes to the market.”

But developers will need to watch out for global currency fluctuations as a potential spoiler of their prospects. The continued strength of the dollar is creating “subdued investment conditions across the country” and that will be a downside to demand prospects.

“However, with a stable economy and continued demand for quality housing, any downside is likely to be modest and short lived,” CBRE reports.

“In terms of future growth potential, the key economic drivers for RAK will remain as the government, specifically in the form of quasi-government development companies, which are fundamental in evolving the Emirate’s burgeoning tourism market. RAK’s growing industrial and manufacturing sectors are also expected to maintain their current rate of expansion, driven by local names such as RAK Ceramics and RAK Cement.” Source: Gulf News Back to Index

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SHARJAH PROPERTY MARKET SEES LIMITED RELOCATIONS

Sunday, 27 November, 2016

Sharjah residents are not making the shift to new homes in Dubai, at least not in sizeable numbers to make a difference to rental dynamics, according to the latest report from the property services firm Asteco.

That rents in Dubai did not decline enough — in fact they are already showing signs of high stability — is cited as the primary reason for far fewer relocations Sharjah during this market cycle. In fact, the softening in Sharjah rents has also ground to a near halt — during the third quarter it was down a marginal 1 per cent, according to the report.

“The stabilisation of the [Sharjah] market was a knock-on effect, in part, to rental rates in Dubai also balancing out,” said John Stevens, managing director of Asteco.

But Sharjah’s residents also needn’t worry too much about sharp increases to what they are paying now. New stock is being added, and that should exert pressure on landlords trying to get more. As such average rents are “still 38 per cent cheaper than in 2008” as additional supply keeps rates from increasing rapidly, the Asteco report says.

New developments are fetching rents of Dh20,000-Dh35,000 for a studio and Dh45,000-Dh90,000 for a three- bedroom unit. Rents in the popular Al Majaz area are going from Dh25,000 to Dh35,000 for a studio, and three- bedroom units from Dh48,000 to Dh90,000. Corniche values are at Dh26,000-Dh35,000 for a studio, with three- bedrooms commanding Dh60,000-Dh95,000. \

More tower projects are also getting off the starting blocks, with a recent one being the Sahara Tower 6 by Al Thuriah. Construction of the twin-tower has started and will feature 376 residential units, which are now on sale and due for handover in the fourth quarter of 2019.

Based on official data, real estate related investments in Sharjah were valued at Dh12.1 billion during the first six months, from a total of 1,860 sales transactions. Of this, 89.5 per cent were within Sharjah City in areas such as Al Khan (240 transactions), Al Majaz 3 (173), Sajaa Industrial Area (159), Al Nahda (111) and Muwaileh Commercial District (105).

Of the other Northern Emirates, Ras Al Khaimah recorded a 1 per cent rise in apartment units during the third quarter, as did Ajman — taking prices close to their 2008 peak levels (only 9 per cent lower).

Rents for newer buildings in Ras Al Khaimah are now at Dh26,000-Dh40,000 for a studio and between Dh85,000- Dh110,000 for a three-bedroom unit.

The gains recorded in Ajman were attributed to the “better quality supply to its stock while also improving its overall offering to residents in terms of retail and road connectivity”.

High-end apartments now range from Dh22,000 to Dh38,000 for a studio and three-bedrooms at Dh42,000- Dh72,000.

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Fujairah’s residential rentals were more or less stable through the third quarter as new supply came online such as the housing project in Al Taween.

Rents vary from Dh23,000-Dh28,000 for a studio and Dh45,000-Dh60,000 for a three-bed. Source: Gulf News Back to Index

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UAE HOTEL RATES IN OCTOBER SLUMP TO

LOWEST LEVEL SINCE 2005

Saturday, 03 December, 2016

Hotels operating in the UAE continued to see declines in occupancy and room rates during October, according to the latest data from industry consultants STR.

It said the UAE's hospitality sector reported an occupancy dip of 2.9 percent during the month to 75.6 percent, while average daily rates (ADR) dropped 9.6 percent to AED668.05, the lowest for an October since 2005.

As a result, revenue per available room (RevPAR) declined by 12.3 percent to AED505.34.

STR said October was the 22nd consecutive month of year-over-year ADR decreases in the UAE, due in part to consistent and significant supply growth, which is up by 5.1 percent year to date). At the same time, demand has remained strong, up 5 percent year to date.

In Dubai, hotels saw occupancy fall by 2 percent to 78 percent, ADR was down 9.8 percent to AED764.63 and RevPAR dropped 11.6 percent to AED596.16.

STR said strong supply growth (up 5.8 percent year to date) has slightly outpaced a year-to-date demand increase (up 5.6%) in the market. In addition to the strong development pipeline, STR analysts attributed Dubai’s performance to a decline in visitors from the drop in oil prices.

In Riyadh, Saudi Arabia, STR reported decreases in occupancy (down 7.2 percent to 56.2 percent), ADR (down 3.6 percent to SR796.30) and RevPAR (down 10.6 percent to SR447.46).

STR said as one of the Gulf’s key hubs, Riyadh is heavily dependent on corporate travel but that business has suffered with the drop in oil prices, and coupled with significant supply growth (up 8.9 percent year to date), Riyadh’s performance has slumped.

Regionally, hotels in the Middle East reported a 4.4 percent decrease in occupancy to 64 percent, a 9 percent drop in ADR to $174.19 and a 13 percent decline in RevPAR to $111.48. Source: Arabian Business Back to Index

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NORTHERN EMIRATES RENTS STAY FLAT AFTER FALLING EARLIER THIS YEAR

Sunday, 27 November, 2016

Housing rents in the UAE’s Northern Emirates remained largely flat during the third quarter after falling in the first part of the year in line with the performance of the Dubai market.

Sharjah and the other Northern Emirates, located within commuting distance to Dubai, have traditionally been seen by many cost-conscious workers as cheap locations when rents in Dubai increase. According to the property broker Asteco, rents for flats in Sharjah fell by 1 per cent during the three months to the end of September.

"The stabilisation of the market was a knock-on effect, in part, to rental rates in Dubai also balancing out," said John Stevens, Asteco’s managing director. "As a result there was a minimal number of relocations taking place between Dubai and the Northern Emirates."

The brokers Cluttons reported that rents in Sharjah had fallen by about 8.3 per cent year-on-year in the first quarter of this year as the slowdown in the UAE economy led to job losses and cost savings across the board, prompting Dubai landlords to reduce rents.

According to the property broker JLL, rents for flats in Dubai fell by 3 per cent in the first quarter of this year before falling another 1 per cent in the second quarter and stabilising in the third quarter.

Asteco reported that on average, rents in new developments in Sharjah ranged from Dh20,000 to Dh35,000 for a studio and Dh45,000 to Dh90,000 for a three-bedroom unit.

Rents in the upmarket Al Majaz area and Al Khan (Al Mamzar) had the largest quarterly increases, rising by an average of 2 per cent compared with the previous quarter to range from Dh25,000 to Dh35,000 for a studio, while three-bedroom apartments are available from Dh48,000 to Dh90,000.

Meanwhile, rents along the emirate’s Corniche had the biggest quarterly falls, dipping by an average of 9 per cent to start from Dh26,000 to Dh35,000 for a studio while three-bedroom apartments span from Dh60,000 to Dh95,000.

Asteco said that rents in Ajman increased by 1 per cent during the three months to the end of September this year amid an improvement in the emirate in terms of road connectivity and shops.

Rent for high-end flats in Ajman ranged from Dh22,000 to Dh38,000 for a studio, while three-bedroom flats were available from Dh42,000 to Dh72,000.

Asteco said that housing rents in Fujairah remained stable over the quarter. Rental rates typically varied from Dh23,000 to Dh28,000 for a studio and Dh45,000 to Dh60,000 for a three-bedroom flat. Source: The National Back to Index

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DEPA TURNS A PROFIT OVER NINE MONTHS

Sunday, 27 November, 2016

Depa, the Dubai-based interiors contractor that fitted out Burj Khalifa, said that it turned profitable in the first nine months of the year compared to the same period last year amid cost cuts.

Net profit rose to Dh29 million in the first nine months compared to a loss of Dh7m a year earlier.

Revenue was unchanged during the period at Dh1.18 billion from the same period last year.

"The group continues to improve its operational delivery with many key enhancements under implementation," said Hamish Tyrwhitt, the company’s chief executive.

"These delivery enhancements, in addition to the strategic and financial support provided by our senior management team, will enable the group’s operating companies to better service our clients and ultimately lead to our capturing a greater share of our addressable market."

The company has been suffering financially amid the regional slowdown in the construction industry and has taken measures including job cuts to maintain profitability. Source: The National Back to Index

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LOWER OFF-PLAN PRICES TO STOKE PROPERTY DEMAND IN DUBAI

Monday, 28 November, 2016

Property developers in Dubai are marketing cut-price off-plan properties to tempt buyers back into the market.

Villas at Damac’s latest off-plan development are being marketed at Dh200,000 less than they were a month ago.

At a marketing launch at the end of October, Dubai developer Damac announced that it would be selling off-plan three-bedroom villas at its Akoya Fresh project in its Akoya Oxygen golf course development at starting prices of Dh1.2 million.

Less than a month later, the developer is marketing off-plan three-bedroom villas at the same development for Dh999,999 through real estate brokers in Dubai.

Damac said that there had been no reduction and that the price difference was due to a difference in the types of villas being marketed.

"The difference in price is due to the different villa types they are selling at any point in time," a Damac spokeswoman said.

"Each project has several different villa types and each type has a different price."

Kamran Alithe, the managing partner of Splendour Homes, one of the brokers marketing the properties said that the villas priced at less than Dh1m were located in the middle of rows, while those at the ends were priced at Dh1.2m.

"It is a marketing strategy the developer is using," Mr Ali said.

"There is no depreciation in the market. We are sensing positive vibes in the market."

In June, hundreds of people queued to buy flats and villas at Nshama’s Town Square development.

At the time the developer marketed one-bedroom apartments from Dh503,988. However, one-bedroom flats in the development are being marketed at Dh378,888.

"A number of developers are looking at adjusting pricing levels to increase the sale rates for off-plan projects.

"Rather than simply reducing the price on a like-for-like basis, these adjustments are being made through other means, such as the extension of payment terms and adjustments to the sale areas of units," said Craig Plumb, the head of research at JLL’s Dubai office.

According to the Dubai Land Department, 14,600 units were sold off-plan in the first 10 months of last year, with an average price of Dh1.6m. Over the same period this year, 13,000 units were sold off-plan at an average sale price of Dh1.46m.

Property data company Reidin and research company Unitas Consultancy estimate that the average off-plan prices per square foot in Dubai have fallen to about Dh800 per sq ft from Dh870 per sq ft a year ago.

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Unit as says that the fall in average price is a result of developers marketing smaller apartments in suburban locations rather than house prices for individual off-plan properties falling in the secondary market.

"I think it is fair to say that the 10 per cent differential from last year to this year in terms of off-plan property prices comes from developers responding to customer demand and offering a different sort of product to the market," said Muhammad Sameer Lakhani, the managing director of Unit as Consultancy.

"This year we have seen launches of communities like Dubai South, which are in a very different area and are marketed for a very different selling price than properties on the Sheikh Zayed Road corridor."

Last week, Cluttons reported that average residential values in Dubai in the third quarter of this year stood 7.4 per cent lower than they were a year earlier.

In January, Damac’s managing director, Ziad El Chaar, told The Sunday Times newspaper that he would go on TV naked and resign if the Dubai property market crashed this year. Source: The National Back to Index

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SCHON TO DEVELOP HOTEL COMPLEX IN

DUBAI INVESTMENTS PARK

Tuesday, 29 November, 2016

The developer behind the stalled Dubai Lagoon project in Dubai Investments Park has unveiled plans to build 2,550 hotel rooms.

Schon Properties on Tuesday announced plans for the Dh3.2 billion project within Dubai Investment Park.

Schon said the 2.6-million-square foot iSuites complex of 21 nine-storey buildings comprising the hotel apartments as well as 52 restaurant and cafes and a 125,000 sq ft shopping mall will be delivered in time for Dubai’s Expo in 2020.

It said it had awarded a construction contract to Dubai Civil Engineering to build the development and work on the project started in October. It said the first deliveries are expected by summer 2019 and the full project would be completed by summer 2020.

More than 2,500 people signed up to invest in Schon’s flagship Dubai Lagoon project in 2005. The project, scheduled to be completed in 2008, was billed to have included 49 buildings comprising 4,000 apartments around a man-made lagoon.

With little construction progress on site by 2014 and dozens of investors demanding their deposits, the Dubai Land Department announced the scheme would be broken into seven phases and monitored by Rera until completion.

Under the new agreement, two of the seven phases were redesigned as hotel apartments and are being marketed as the iSuites.

Despite assurances in 2014 that the Dubai Lagoon project would be complete by the end of 2016, the development still appears to be unoccupied. Schon said it expected the first residents to move in during the first quarter of 2017 and that 200 units were complete and waiting to be connected to electricity and water. It said that the entire master community would now be completed in 2019 or 2020.

Schon declined to comment to The National when asked how it would fund the new hotel project. It said it would make "news announcements in the next few weeks to update investors and customers".

"Experience has taught us to put our focus on what is the most important thing to our customers – that is delivering to customers on time and at the right price," said Noorul Asif, the chief operating officer. "We are confident that with the team we have in place, iSuites will deliver on time. Source: The National Back to Index

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LONDON’S 1 UNDERSHAFT TO BE SECOND-

TALLEST TOWER IN WESTERN EUROPE

Tuesday, 29 November, 2016

Plans to build a 73-storey tower that at over 300 metres high would be the tallest in the City of London financial district have been approved by the local authority, which said the project was a vote of confidence in London after the Brexit vote.

Long a destination of choice for foreign investors drawn to its lucrative property sector, London is experiencing a boom in the construction of tall buildings – a trend that upsets some residents but has been encouraged by local authorities.

Officially called 1 Undershaft, the new tower will rise almost 305 metres above sea level, making it the second- tallest building in Western Europe after The Shard, which is also located in London, just across the River Thames from the City.

"This development shows the high levels of investor confidence in London’s status as a global city following our decision to leave the European Union," said Chris Hayward, the chairman of the City of London Corporation’s planning committee.

Some opponents of Brexit have warned of a potential downturn in London’s financial services industry if some international firms move jobs and activities to other European centres to maintain the benefits of operating within the EU.

The new tower is expected to provide 130,000 square metres of office space, enough to accommodate 10,000 workers.

The design is by Eric Parry Architects, a London-based studio that has worked on several high-profile projects, including the modernisation of the historic St-Martin-in-the-Fields church just off Trafalgar Square in central London.

The developer is the Singapore-based Aroland, which said it was developing tall buildings in capital cities around the world.

A public relations spokeswoman said 1 Undershaft was Aroland’s first project in London and gave no further details about the developer, which does not have a website.

Nicknamed the Trellis due to its external metal bracing, the new building will be part of a cluster of towers that also includes the distinctive Gherkin and more recent additions such as the Leadenhall Building, known as the Cheese-Grater.

There are more than 430 buildings of 20 storeys or more in the pipeline in London, according to a survey this year by New London Architecture, an independent organisation.

Critics say the city’s skyline is becoming increasingly cluttered by generic glass-and-metal towers that have little architectural interest and dwarf historic landmarks such as the dome of St Paul’s Cathedral.

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Some projects have faced fierce opposition from residents and groups such as the Skyline Campaign, which is supported by a architects, historians, engineers and others who feel London’s character and heritage is under threat from towers. Source: The National Back to Index

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DOES ABU DHABI TENANT MADE REDUNDANT HAVE TO PAY RENTAL

PENALTY FOR MOVING OUT EARLY?

Wednesday, 30 November, 2016

I have had my job terminated by my company in Abu Dhabi and therefore did not give a two-month notice to my landlord due to the sudden situation. Now the manager of the apartment is asking me to vacate when the contract finishes and pay a two-month penalty. Do I have any rights if my job has been terminated? IB, Abu Dhabi

I can appreciate the stress your situation has caused you and obviously sympathise. My advice would be to try to come to some form of agreement with the landlord. See if you can either arrange a face-to-face meeting or a telephone call at the very least. If this is not possible then a meeting with the manager may help. Although he is not the decision-maker, maybe he can put your case forward to the owner. The law states that for a contract termination you do have to give two months’ notice, but often tenants do manage to find a compromise with their landlords if this notice period has been missed. It is for this reason that I am suggesting a meeting for you to explain. Ultimately, if the landlord is not prepared to meet you, let’s say halfway, then unfortunately there is little you can do and regrettably you will still have to pay the penalty. If this happens it will seem that this will add insult to injury at a time when you will require some understanding or support.

My tenancy contract will be expiring in three months. By contract I have to notify the landlord 90 days prior to expiry in case I want to renew the tenancy. What if the landlord refuses to renew? Can I still stay in the apartment and if yes, for how long? IB, Dubai

The 90-day rule is in place to ensure that either party inform each other of any changes to the contract. Believe it or not, you do not have to actually inform your landlord that you wish to renew, having said that, it is clearly polite and an expected form of communication if indeed you do wish to continue to live in the property.

The landlord is legally bound to renew with you each year. There are only a few reasons allowed for him not to. These include: if he wishes to move into the property himself or his immediate next of kin or if he wishes to sell or if he has to make such remedial works to the property that would make it difficult for a tenant to live there or lastly, if the property requires demolition. For the past two reasons, the landlord would require a technical report granted from the concerned authorities.

In the case of all these reasons, the landlord would also have to give you a 12 months’ written notice to vacate which must be sent either by registered mail or notary public.

I hope you can clearly see that you ought to be able to renew without any issues. But it is polite to inform the landlord of your intentions – if nothing else, it will help to remain on positive terms with the owner. Source: The National Back to Index

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LUXURY FLATS IN BRUTALIST STYLE ON OXFORD STREET

Thursday, 01 December, 2016

The skyscraper that became a byword for London’s housing crisis in the 1970s is now being marketed to the super rich in the UAE as exclusive residences.

Centre Point, a 33-storey tower at the east end of London’s Oxford Street, became a symbol of homelessness after property tycoon Harry Hyams deliberately kept it empty for nearly a decade as he waited to find a single office tenant to lease it.

The 117-metre tall Brutalist style concrete tower was completed in 1966, but in 1974 it was targeting by protesters, who camped out at the tower.

The iconic Richard Seifert-designed tower has since been redesigned by London-based property company Almacantar as 82 luxury apartments costing between £1.8 million and £55m.

Property broker Knight Frank is marketing them across the GCC after an exclusive private viewing in Dubai last month.

These include two massive 2,133 square foot three-bedroom, three-bathroom apartments each retailing at £7.5 million.

Given access via their own private lifts and with interiors designed by Conran & Partners, the apartments will include views of London landmarks including the Houses of Parliament, St Paul’s Cathedral and the City of London.

According to the agent, residents will also enjoy use of features more associated with a luxury hotel such as a spa and treatment rooms, a 30-metre swimming pool, cinema, 24-hour security and concierge service.

Brushing aside concerns that overheated property prices in the UK could flounder as a result of Britain’s referendum vote in June to leave the European Union, Almacantar and its advisers suggest that even these extraordinarily steep house prices could potentially jump when London’s new Crossrail trail lines begin to open from 2019.

"What is really exciting is the evolution of this central area right in the heart of London and that from a connectivity point of view it will be the only point at which Crossrail 1 and 2 will meet across London," says Victoria Garrett, the head of international project marketing for Knight. q&a near top shopping areas

Lucy Barnard reveals more about the transformation of London’s Centre Point into luxury homes.

Why is Centre Point so famous to Londoners?

Located at the end of Oxford Street, Centre Point is visible across much of central London. The building also shares its name with homeless charity Centrepoint leading many to associate the name with the plight of homelessness.

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What is this part of London like?

Centre Point is close to 30 museums, public and private galleries, 40 theatres (including the Royal Opera House), and Europe’s most sought after shopping spots.

What is Crossrail?

Crossrail is a 118-kilometre railway line under development in London and the Home Counties of Berkshire, Buckinghamshire and Essex. A large section of the line is due to open in December 2018. Brokers say that by cutting journey times in the city, properties along the line will probably increase in value. The line has been under construction since 2009, so many of these increases may have already been seen.

What about house prices?

According to Knight Frank’s housing forecast, house prices across the western part of central London fell by 7 per cent in the year to date as uncertainty surrounding the Brexit process knocked consumer confidence. It estimates that house prices in the area around the City of London close to Centre Point will have fallen 2.5 per cent by the end of this year and will remain flat next year. Source: The National Back to Index

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UAE THEME PARKS TO WELCOME MORE THAN 19 MILLION VISITORS BY 2020

Thursday, 01 December, 2016

The UAE’s existing and new generation theme parks will attract more than 19 million admissions a year by 2020 if current trends continue, according to data released by Colliers International ahead of Arabian Travel Market 2017.

The prediction is made using existing admissions and arrivals data for Yas Island’s Ferrari World and Waterworld and Dubai’s Aquaventure and Wild Wadi as well as a sample of new and upcoming parks. All four parks have experienced a strong correlation between the rising number of visitors to the UAE and its admissions, with their combined admissions predicted to reach 19 million visitors annually.

Similar patterns are expected to be seen for IMG Worlds of Adventure and Dubai Parks and Resorts, which opened this year in Dubai. Both parks have ambitions to draw in millions of visitors in their first year of operations, with IMG expecting to attract 4.5 million people and Dubai Parks and Resorts predicting 6.7 million ticketed visitors.

Simon Press, Senior Exhibition Director, Arabian Travel Market, said: “Dubai has a unique chance to replicate the success we have seen in other markets such as Orlando, Singapore and Tokyo, attracting new arrivals while also capturing a share of both the stop over and direct tourism markets. Theme parks are a new addition to the tourism landscape here in the GCC and it’s important that destinations are positioned to take full advantage of the benefits they can bring.”

The predictions were published in a report titled Theme Park Tourism, by Colliers International, and released to coincide with the openings of Dubai’s IMG Worlds of Adventure and Dubai Parks and Resorts (DPR).

IMG and DPR will be exhibiting at Arabian Travel Market (ATM) taking place 24-27 April 2017, with IMG taking a stand 74% larger than in 2016. Yas Island and Ferrari World will also be exhibiting at ATM.

The growing importance and impact of theme parks to the regional tourism landscape will be explored as part of the programme on the ATM Global Stage.

Typically, a theme park can expect to attract a visitor mix that is approximately 70% domestic, up to 20% regional and around 10% international, with MICE groups also forming a large share of admissions especially in cities with a strong business culture, such as Singapore and Tokyo.

Press added: “We are seeing the start of a new era for Dubai and the UAE with the opening of the world’s largest integrated theme park development, Dubai Parks and Resorts, and other mega attractions. These join the likes of Ferrari World and Yas Water World and naturally these will draw ever larger crowds to the region.”

DPR features four parks: Bollywood Parks, Motiongate and Legoland with Six Flags Dubai opening in 2019. It also boasts a hotel resort, Marriott’s Lapita from The Autograph Collection, the first inner circle theme park hotel in the region. With the Riverland retail and dining destination, the AED13.2bn development covers 30.6 million square feet of land

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IMG Worlds of Adventure spans 28 football fields and is the first global theme park to bring international brands Marvel and Cartoon Network together, in addition to two proprietary brands IMG Boulevard and Lost Valley –

Dinosaur Adventure. The park features a unique array of roller coasters and attractions, 28 F&B venues and 25 retail outlets.

The new parks will also create a distinct economic boost for hoteliers following a difficult 24 months for the hospitality industry regionally. Hotels and airlines have seen business disrupted by events in key source markets including sharp fluctuations in the value of the Ruble, Euro and Sterling.

Colliers concluded that the closer a hotel is to a theme park, the stronger its performance will be in the key metrics of occupancy, Average Daily Rate (ADR) and RevPAR, the decade after opening.

Hotels located in the “inner circle” of a theme park development can expect to achieve occupancy levels two to 10 percentage points higher than properties in the outer circle and city. At Singapore’s Resort World Sentosa in 2015, an occupancy rate of 92% was achieved compared to an average of 85% for the city.

The average length of stay at theme park hotels varies from two to six days globally.

At Disney World Orlando the average stay is 4.5 days, but this is attributable to the year round warm climate and the clustering of other parks and ancillary facilities in the Orlando area. Parks such as Euro Disney Paris, typically welcome guests for 2.4 days and Disneyland Tokyo only 1.3 days.

Press added: “This is the UAE’s chance to position itself as a major leisure destination on a global scale and there are many businesses in the tourism and leisure industries which should position themselves to take advantage of this. With more attractions than ever before the UAE, and particularly Dubai, are making clear progress towards achieving their tourist arrival targets.” Source: The National Back to Index

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With 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 leading real estate experts. East and internationally.

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