NEWS BRIEF 33 SUN DAY 23 August 2015

ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

REAL ESTATE NEWS UAE WEAK ROUBLE MAKES UAE PROPERTY COSTLIER FOR RUSSIANS

DUBAI REAL ESTATE PROJECTS TO SHARE DUBAI SPOTLIGHT LABOUR CITY READY TO HOUSE 50,000 WORKERS DUBAI'S COSTLIEST APARTMENT: DH181 MILLION @ ONE ON THE PALM JUMEIRAH BENTLEY TO DESIGN DH40M VILLAS ON DUBAI'S SWEDEN ISLAND ICONIC DUBAI OPERA SET FOR COMPLETION IN MARCH 2016 26 NEW PROPERTY PROJECTS APPROVED IN ABU DHABI WORK ON JUMEIRAH FLYOVER BEGINS EMIRATES REIT HAS DH500M FOR ACQUISITIONS AMID DUBAI PROPERTY SLOWDOWN INDIA’S ‘SHOE-BOX’ APARTMENT UNITS SUIT SMALL POCKETS HOT SUMMER AS DUBAI RESIDENTS DEAL WITH AIR-CONDITIONING ISSUES INDIA DEVELOPERS DANGLE PROMOS AND DISCOUNTS TO LURE BUYERS AS SALES CONTINUE ‘DOWNHILL RIDE’ DH59 MILLION APARTMENT AT LE RÊVE IS A PALACE IN THE DUBAI SKY DUBAI TO HOST 6,000 CHINESE INSURERS AND FINANCIERS’ CONFERENCE TOURISM TERROR WILL NOT KEEP PEOPLE AWAY, HISTORY SHOWS PARSONS WINS DUBAI EXPO 2020 SITE CONTRACT DUBAI TO TAKE SPANISH LESSONS FOR SMARTER CITIES EMIRATES DISTRICT COOLING PLANS HIGHER OUTPUT CAPACITY TO MEET EXPO 2020 DEMAND DUBAI BUILDER ARABTEC DECLARES SIX-MONTH LOSS OF DH1.3BN WORK ON JUMEIRAH FLYOVER BEGINS

ABU DHABI MANAZEL FIRST-HALF PROFIT SURGES 179 PER CENT TO DH45 MILLION PROFIT PLUNGES AT ABU DHABI-BASED ESHRAQ PROPERTIES ABU DHABI OFFICE RENTS FORECAST TO RISE ON LIMITED SUPPLY 26 NEW PROPERTY PROJECTS APPROVED IN ABU DHABI

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REAL ESTATE PROJECTS TO SHARE

DUBAI SPOTLIGHT

SATURDAY 22 AUGUST 2015 A shortlist of 37 real estate projects from 15 countries will compete for the Cityscape Awards for Emerging Markets. Winners from each of the 13 categories will be announced in a ceremony at Conrad Hotel, Dubai, on Tuesday September 8. The awards feature alongside Cityscape Global, the Middle East’s largest and international real estate event, taking place from September 8 to 10 at Dubai World Trade Centre. Holley Chant, Executive Director, KEO International Consultants, and a member of the judging panel, said that sustainability is critical to the success of humanity’s future and real estate developers have an important part to play in its realisation. “The quality of the nominations in the Sustainability category for Cityscape Awards for Emerging Markets this year were fantastic,” said Chant. “Projects seemed to really understand that the importance of a sustainable building is not just about being green, but also about serving as a great project from a real estate fundamentals’ point of view. “We have developments that have truly made a positive social, economic and cultural impact on their communities, as well as being environmentally sound. “With sustainable design now a code requirement in the UAE, designers have had to accept this level as the new standard and as a result are challenging themselves even more to create better and more aspirational designs which differentiate their expertise and products in the market.” The 13 award categories include completed projects and projects still under construction across the following sectors: Commercial Project; Mixed Use Project; Leisure & Hospitality Project; Community, Culture & Tourism Project; Residential Project; Retail Project; and Sustainability. Woods Bagot, along with contractor Brookfield Multiplex, is one of the UAE finalists to be shortlisted for two separate categories, hoping to be successful in the Built Commercial Project category and the Sustainability category for its IRENA Headquarters project. Richard Fenne, Principal, Woods Bagot, said: “Should the IRENA Headquarters building win the Cityscape Awards it would be a great regional recognition of the collaborative effort the teams from Masdar, Woods Bagot and Brookfield Multiplex have undergone to design and deliver an exemplar office building. “Sustainable developments play a crucial role in the ongoing growth of the real estate market, locally, regionally and globally. The UAE takes a leading role in sustainability in this region, and is very much at the forefront with benchmark developments such as Masdar City.” Source: Gulf News Back to Index

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LABOUR CITY READY TO HOUSE 50,000 WORKERS

SATURDAY 22 AUGUST 2015 The City, spread over an area of more than a million square metres, consists of 64 buildings, each with four floors. Each building has rooms that can together accommodate 780 workers. In all, the labour accommodations are meant for 50,000 workers. The City has a cinema, entertainment centres, a huge auditorium for community events, commercial complexes, restaurants and even sports facilities like stadiums for volleyball, football and cricket, among other sports. Besides, there will be a police station and a branch within the City to help maintain law and order and ensure workers' safety and security. The City also boasts green space spread over an area of 32,500 square metres and a mega medical centre which will have specialist doctors as well as an emergency unit. Within the City there would also be additional accommodation for 10,000 senior workers. "The supervisory authority for the Labour City has begun asking companies that are interested in taking premises on rent to house their workers to come forward and apply," said Al Sharq. Known as Barwa Al Baraha, the project is built by state-backed Barwa Real Estate Company. It is the largest development project ever built in the country to house workers. These are modern living quarters offering a higher standard of living for those with low income. "It is the biggest and most modern labour camp built in the entire Gulf region," said the daily. The project has been developed in two phases. The first phase consisted of truck and vehicle parking area and basic facilities. The second phase comprises the Labour City project. The 64 buildings are actually grouped into four major sub-complexes, each with 16 buildings. Besides, there are plans to build other blocks within the City that would accommodate senior staff of companies that hire space for the purpose on rent. A huge complex that would house at least 49 used car showrooms, is also to come up in the City. Obviously, these showrooms will be on the ground floor. There will be two more floors above them to house administrative offices. The Labour City is all set to be a model accommodation in the entire region with star amenities for migrant workers, said the daily. Source: The Peninsula Back to Index

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DUBAI'S COSTLIEST APARTMENT: DH181 MILLION @ ONE ON THE PALM

JUMEIRAH

SUNDAY 23 AUGUST 2015 A Dubai developer is seeking Dh181 million for a penthouse in a Dh2-billion tower on the Palm Jumeirah, making it the most-costliest apartment up for sale in the emirate. The unit is listed by Omniyat Properties in the One at Palm Jumeirah. The listing on its website reveals the 42,477.58 square feet penthouse has eight bedrooms and seven bathrooms. The internal area is 25,836.59 square feet with the balcony area being 16,640.99 square feet. The unit will come with 12 parking spaces, offering full sea and Dubai Marina skyline views. Work has commenced on the tower, which is being built jointly by Omniyat and Drake & Scull International, according to an earlier company statement. The 25-storey tower, comprising 90 apartments, is scheduled for completion by 2017. It will have indoor and outdoor swimming pools, a cinema, cigar lounge, super luxury spa and yacht club. The luxury tower is designed by international architects including Soma from New York, Super Potato from Japan and Vladimir from Lebanon. Previously, Emirates 24|7 reported that the costliest apartment sold in 2014 was for Dh60 million - a unit in Burj Khalifa, the world’s tallest tower. Currently, the most expensive listing in the world is worth Dh1.47 billion ($400 million) for a quintuplex penthouse in Odeon Tower in Monaco, which boasts an infinity pool linked by a slide. Source: Emirates 24/7 Back to Index

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BENTLEY TO DESIGN DH40M VILLAS

ON DUBAI'S SWEDEN ISLAND

FRIDAY 21 AUGUST 2015 Completion of first villa on island, part of THOE on The World, in Q1 2016.The Armanis, Versaces and Bulgaris of the world have already entered Dubai’s luxury real estate market, now Bentley is steering in to design luxury villas on The World islands. Kleindienst Group, developer of The Heart of Europe (THOE) on The World, has teamed up with Bentley Home for the 10 luxury villas on the Sweden island. “Excavation has commenced on Sweden island and concrete work is about to begin. The first villa will be fitted out and furnished during the first quarter of 2016. The remaining nine Sweden villas will be completed by December 31, 2016, in time for a Swedish-themed New Year’s Eve extravaganza on the island,” the company said. THOE is made up of Sweden, Germany, Monaco, Main Europe, Switzerland and St Petersburg Island. Synonymous with the very best of European designs, culture and heritage, Each villa will feature high-end home interiors provided with Bentley furniture being inspired by the craftsmanship and material selection that characterize and follow the design philosophy of Bentley car interiors. “The range of handmade furniture is inspired by the techniques, materials and high quality finishes that are synonymous with Bentley car interiors,” the company claimed. Designed by famous architect Carlo Colombo, the design of each seven-bedroom residence is inspired by the intricate structure of inverted Swedish Viking vessels with the roof of each villa resembling the upturned hull of a Viking ship. Special features include snow and sauna rooms, floor-to-ceiling windows, expansive balconies, a gym and spa, a private infinity pool and landscaped gardens. In December 2014, Josef Kleindienst, CEO, Kleindienst Group, told ‘Emirates24|7’ that the villa could be priced between Dh30 million and Dh40 million. “The island will not only be home to the finest Swedish architecture and design, but it will also bring the best of Swedish culture and lifestyle to Dubai. We want to ensure people are genuinely able to experience Sweden on The Heart of Europe, through food, music, festivals, traditions and architecture,” he had said. THOE comprises six islands: Germany, Austria, Switzerland, Netherlands, Sweden and St. Petersburg with six additional destinations being Sochi, Belgium, Luxembourg, Geneva, Monte Carlo and Poland. The project will have rain and snow-lined streets. Source: Emirates 24/7 Back to Index

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ICONIC DUBAI OPERA SET FOR COMPLETION IN MARCH 2016

THURSDAY 20 AUGUST 2015 Dubai’s grandest attractions among many under construction, Dubai Opera, which will be the centerpiece of the Opera District in Downtown Dubai årea, is set for completion in March 2016, according to its developer. “The scheduled completion for Dubai Opera is March 2016 with concrete, steel structure, block work, electromechanical and finishing works are in progress,” Emaar Properties, Dubai’s largest developer, said in the latest project update. Atkins is the architect while Consolidated Contractors Company (CCC) is the main contractor for the project. Entered from Mohammed Bin Rashid Boulevard, the Opera District faces Burj Khalifa, the world’s tallest building, Burj Park, and The Dubai Fountain. The Dubai Opera will be as iconic in appearance as the world-famous Sydney Opera House, the developer has said. Sydney Opera, which opened on 20 October 1973, is among the busiest performing arts centres in the world, hosting over 1,500 performances each year attended by some 1.2 million people. More than 7 million people visit the site each year. As for Dubai Opera, the Arabian dhow has been the inspiration behind its architecture. The 2,000-seat, multi-format performing arts venue in the emirate will have the ability to transform into three modes; from a theatre to a concert hall and into a “flat floor” form, becoming a banquet of event hall. In theatre mode the space will be suitable for opera, musicals, ballet and dance performances, large- scale drama productions, lectures and conferences. It will seat between 1,940 and 2,040 depending on the configuration, the company states. Transformed into a concert hall by a series of towers on stage to create an acoustic shell that surrounds the orchestra, reflectors overhead will enhance the acoustics and reflect sound. In “flat floor” mode, the room will cater for a number of events including weddings, with banquet style seating able to accommodate up to 1,000 guests. It can also be configured for trade shows, exhibitions, receptions and parties, Emaar said. In May 2015, the developer launched Forte, its second tower in the Opera District after Opera Grand, with units commanding prices of as high as Dh2,700 per square feet. Currently, Dubai is working on several mega projects such as Museum of the Future, Dubai Eye, Dubai Water Canal, Dubai Frame and many more that are expected to be completed before Expo 2020. Source: Emirates 24/7 Back to Index

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WEAK ROUBLE MAKES UAE PROPERTY COSTLIER FOR RUSSIANS

TUESDAY 18 AUGUST 2015 A weakening rouble against the US dollar has made Dubai property costlier for Russian investors by almost 60 per cent, according to a report. In a report titled, ‘Dollar and Sense’, Unitas and Reidin.com said: “At the higher end of the market, which has been historically reliant on foreign inflows, the price of a high-end villa in communities such as Palm Jumeirah, Emirates Hills and Downtown Dubai, prices have appreciated by 60 per cent in the last 12 months in rouble terms even as prices have registered declines of as much as 20 per cent in UAE dirhams.” Pointing out the long-standing relationship between real-estate price cycles and dollar strength, it said: “In times of weak dollar market, real estate prices have had a greater rates of appreciation, when compared to that of a strong dollar. “While there have been several factors that contribute to the under/over performance in each of these periods, it is clear that the dollar strength is a major variable in the contribution of returns of the sector.” Rouble hits six-month low On Monday, Reuters reported that the rouble had hit a new six-month low against the dollar, hurt by weaker oil prices and reports of an upsurge in fighting in East Ukraine. The currency was 0.7 per cent weaker against the dollar at 65.45. Russians have been among the top investors in Dubai’s real estate market for several years, having prime investment in upscale locations such as Palm Jumeirah, Dubai Marina and Downtown Dubai. Though no figures have been released of their investment in the first half of 2015, Dubai Land Department does put them in the list of top 10 nationalities investing in the emirate. The total foreign investment (excluding GCC investment) in the sector is almost Dh30 billion in the first half. Indians were ranked first with investments worth Dh7.8 billion followed by British investors with Dh4.7 billion and Pakistani investors who bought properties worth Dh3.3 billion. “The number of enquiries from Russian are much less than before driven by rouble and oil price weakening,” Kalpesh Sampat, director at SPF Realty told Emirates 24|7. Healthy returns The report points out that though Dubai real estate prices continue to trend lower, investors whose base currency has not been the US dollar are still enjoying healthy returns. Based on analysis of several global real estate markets (United States, United Kingdom, France and Singapore) against Dubai since the inception of freehold in 2002, the report reveals Dubai has been the best performer. “However, in the last 12 months prices across several real estate markets have begun to trend downwards in response to USD strength. We opine that this trend will continue for the foreseeable period,” it added.

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Source: Emirates 24/7

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26 NEW PROPERTY PROJECTS

APPROVED IN ABU DHABI

MONDAY 16 AUGUST 2015 The total floor area of developments given the green light more than tripled in the second quarter of 2015 compared with the first quarter 2015, according to figures released by the Abu Dhabi Urban Planning Council (UPC) on Sunday. The UPC announced that 26 development projects spanning a total gross floor area (GFA) of 2.33 million square metres (sqm) were approved during the second quarter, compared with 708,999 sqm in the previous quarter. The number of projects given the go-ahead was up by just under 25 per cent from the 21 approved in the first quarter. On Abu Dhabi Island, a mixed-use tower development in a prime location facing the Abu Dhabi Corniche was approved. The development has been designed with a distinct lower five-storey podium that has three 24-storey towers emerging over it. The irregular L-shaped profile of the plot has enabled the three towers to be positioned diagonally so as to achieve maximum views of the Abu Dhabi Corniche from the high-end residential apartments, which will be housed in three towers from levels 2 to 24. On Abu Dhabi Island, two residential tower building projects were given the go-ahead. The first tower will have a gross floor area (GFA) of 10,406 sqm over 24 storeys on a plot of 1,098 square metres, while the second tower, similar in design to the first, will have a GFA of 12,508 square metres over 24 storeys on a plot size of 1,354 sqm. Located on the Abu Dhabi Corniche, close to the Corniche Hospital, the Saraya residential tower, comprising 49 storeys and three basement floors for underground parking, was also approved. On Abu Dhabi Mainland, the Burjeel Medical City project in Mohammed Bin Zayed City, a 300-bed specialty hospital covering a GFA of almost 82,000 sqm was approved. The Abu Dhabi University will see an expansion of the existing female student accommodation building. Once complete, the expansion will provide 93 additional residential units for female students to the university. In Al Ain, the Remah Emirati Housing Stage 2 residential project, consisting of ten villas and including a mosque, was approved. The development has a total GFA of 5,350 sqm and a maximum height of ten metres (two storeys). In the Mirfa area of Al Gharbia, a mixed-use project comprising 186 residential units and commercial units was approved. The project includes 192 car park spaces and a well-designed courtyard for residents, and covers a total GFA of 15,252.86 sqm.

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In parallel, the UPC announced that 1,017 villas have been awarded 2 Estidama Pearl Rating, 41 buildings have been awarded a 1 Pearl Rating, and 22 buildings 2 Pearls, making the total number of Pearl Ratings for second quarter 1,080. In addition, nine Estidama training sessions have been held with 567 trainees in attendance. To date, the UPC’s urban development has delivered 440 projects and master plans with a total GFA of 73.6 million sqm. Since the Estidama Pearl Rating System was launched four years ago, the Estidama team has reviewed many projects – a total of 11,878 villas and 1,004 buildings have been awarded a Pearl rating. Source: Emirates 24/7 Back to Index

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WORK ON JUMEIRAH FLYOVER BEGINS

SATURDAY 22 AUGUST 2015 Work on the six-lane flyover on Jumeirah Road has begun, after a detour was put in place last week. The kilometre-long detour that runs between Dubai Ladies Club and Al Athar Street has maintained the existing number of lanes, allowing for the smooth flow of traffic. The detour will allow construction of a flyover on Jumeirah Road which, once completed, will see Dubai Canal flowing underneath, entering the sea in Jumeirah. Work on all three phases of the Dh2 billion project is at various stages of progress, with the 16-lane flyover on Shaikh Zayed Road at more than halfway stage, while the flyover on Al Wasl Road has also seen significant progress. The Shaikh Zayed Road flyover will rise eight metres high and will stretch for around 800 metres. As part of phase three, excavation of the canal inside Safa Park is in full swing, which will see the Business Bay Canal connecting with the Arabian Gulf, turning much of Dubai, including areas like Jumeirah, Bur Dubai, Zabeel, Al Karama, Oud Metha and Satwa, into an island. The final phase also involves construction of three pedestrian bridges linking the two sides of the canal. It also includes constructing four marine transit stations and filling works to build a man-made peninsula along Jumeirah Park. Scheduled for completion in mid-2016, the canal will run 3.2km from Business Bay and empty into the sea in Jumeirah. The Dh2 billion project cuts across Shaikh Zayed Road, Al Safa Park and Al Wasl and Jumeirah roads. Traffic diversions are in place on Shaikh Zayed Road, Al Wasl Road as well as in Jumeirah, to make way for the gigantic project. Interestingly, the Roads and Transport Authority (RTA) has maintained all the existing number of lanes through all diversions, having minimal impact on the flow of traffic. “Work has begun on the construction of the flyover on Jumeirah Road, while construction of bridges on Al Wasl Street are at middle stages of completion,” said an engineer working on the project. RTA recently announced construction of 12 marine stations, five of which will be on Dubai Canal, while the rest of the stations to be built at the Business Bay canal by 2018. Following the completion of the entire project, the Dubai Creek along with the stretch of canals will have 18 marine stations, which will give marine transport a bigger push. The canal is being carried out by three construction giants under three separate tenders. The Dh580 million Phase 1, contracted to Turkish firms Mapa and Gunal, includes construction of a 16- lane flyover on Shaikh Zayed Road under which the canal will flow, began early last year. The Dh384 million phase 2, being undertaken by China State Corporation, involves construction of six- lane bridges each on Al Wasl and Jumeirah roads. The contract of the phase 3 has been awarded to Belhasa Six Construct Co, which along with phases one and two are scheduled to be ready by 2016. The prestigious development, which was launched by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in October 2013, will see the

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extension of Dubai Creek by three kilometres, turning Bur Dubai into an island ringed by the Creek water on three sides and the Arabian Sea on one side.

The canal is expected to be ready by October 2016. Source: Gulf News Back to Index

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ABU DHABI OFFICE RENTS FORECAST

TO RISE ON LIMITED SUPPLY

SATURDAY 22 AUGUST 2015 Abu Dhabi has seen office space enquiries fall during the first half of 2015 as lower oil prices fuel uncertainty, according to a new report by Knight Frank. Its Abu Dhabi Office Research Report said the main demand for offices during the first six months of the year was for between 200 sq m and 500 sq m (50 percent of total inquiries). The report added that demand was led by the financial services (22 percent), leisure/hospitality (15 percent) and professional sectors (15 percent). Over the same period, the number of enquiries from the engineering and construction sector increased, reflecting growing demand stemming from rising infrastructure construction activity, Knight Frank said. The report said that there had been little change in office headline rents in the first half of this year but added that rents are likely to see upward pressure in the next 12 months as little Prime or Grade A new office supply is due to be delivered to market. Prime office rents edged up in Abu Dhabi in the first six months of 2015 to AED1,900 per sq m, while rental values for Grade A shell and core office space remained steady at AED1,400 per sq m. Knight Frank said it expects that Prime/Grade A supply under construction or being delivered to the market does not fully meet current market demand, in terms of price point and location. It added that further spending to improve the city's infrastructure should make it a more attractive destination for private investment in the medium to long-term. In turn, this is likely to have positive implications for office demand in Abu Dhabi. Matthew Dadd, Abu Dhabi commercial leasing, Knight Frank, said: "The Abu Dhabi office market remains subdued in terms of new commercial premises under development. The current supply does not solely meet current occupier demand, however, we are still witnessing consolidation of operations and flight to quality." Source: Arabian Business Back to Index

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PROFIT PLUNGES AT ABU DHABI-

BASED ESHRAQ PROPERTIES

SUNDAY 16 AUGUST 2015 Eshraq Properties, the Abu Dhabi-based company whose projects include residential developments on Al Reem Island, today said that its profit in the second quarter dropped 97 per cent amid a sharp fall in revenues. Net income decreased to Dh916,840 in the second quarter from Dh28.5 million in the same period last year. Revenues fell to Dh4.9m in the three months ended June 30 from Dh59.6m in the same period last year, the company said. The company did not elaborate on reasons for the decline in revenues. Eshraq shares closed 2.7 per cent lower to 73 fils.. The profit decline comes even as rents and housing prices have increased across the board in the capital, apart from Al Reem Island, where there was a decline in sales prices for two and three-bedroom apartments, according to a second- quarter report published by the classified website dubizzle last week. Two-bedroom apartments on Al Reem dropped in price by 2 per cent to Dh1.96m, and three-bed units fell by 5 per cent to Dh2.8m. Source: The National Back to Index

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MANAZEL FIRST-HALF PROFIT SURGES

179 PER CENT TO DH45 MILLION

SUNDAY 16 AUGUST 2015 Abu Dhabi-based developer Manazel Real Estate declared a 179 per cent increase in net profit for the first six months on the back of an improvement in margins, a drop in finance costs and an improved valuation of its investment portfolio. Profit for the first half of 2015 rose to Dh45 million compared with Dh16m a year earlier. Revenue was 8 per cent lower at Dh262.8m, which it said was due to the fact that it handed over its Al Reef Downtown project in the same period a year ago. The company’s chairman, Mohamed Al Qubaisi, said that it had made “significant progress” on a restructuring plan and the implementation of a new business strategy that involved building recurring revenues in related business areas. He added that sales in Al Reef 2, launched after the completion of Al Reef Downtown last year, were “in line with our expectations”. Chief executive Hassan Fahmi said it had completed 1,818 apartments and 2,376 villas at Al Reef Downtown last year, and is building 860 villas at Al Reef 2 in Samha, close to Kizad and Khalifa Port. “We will continue to pursue the significant growth opportunities that exist for our group via diversification as we evaluate opportunities both in our local and regional markets,” said Mr Fahmi. “We remain firmly focused on expansion and growing Manazel’s brand and footprint in the years ahead.” Source: The National Back to Index

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DUBAI BUILDER ARABTEC DECLARES

SIX-MONTH LOSS OF DH1.3BN

SUNDAY 16 AUGUST 2015 Shares of Arabtec fell 5.3 per cent on Sunday after the contractor posted heavy losses, the third quarter of losses in a row, because of “a number of poorly performing projects”. The Dubai-listed builder swung to a second-quarter loss of Dh996.4 million from a profit of Dh113.5m in the year-earlier period. Arabtec shares, which closed at Dh2.11 on Sunday, are down 24.3 per cent for the year. For the first half of the year, the company incurred a net loss of Dh1.3 billion, compared with a profit of Dh265m in the same period last year. Arabtec said it was “taking corrective action in response to these legacy issues”. The company announced a new round of restructuring last month, which led to the departures of several top executives. They include Iyad Abdul Rahim, the chief financial officer, Yazan Hatamleh, the chief human resources and administrative officer, and Wassel Al Fakhoury, the general counsel and chief compliance officer. Arabtec’s financial statements indicate that the contractor – which has announced plans to sell several of its business interests in Saudi Arabia including its equity in Arabtec Saudi Arabia, Arabtec Construction Machinery, Saudi Austrian Arabian Ready Mix and Efeco Saudi Arabia – posted big losses within these businesses ahead of their potential sale. Under its accounting rules, these are now classed as “discontinued operations”, and Arabtec declared a loss of Dh352.5m for the three months to June because of a revenue loss of Dh149.8m. However, Arabtec said the benefits of its restructuring would begin to show in its fourth-quarter results this year and continue into next year as it reduces its cost base. The builder said it had a strong backlog of projects worth more than Dh20.2bn and “the necessary talent, support and other resources in place to deliver the projects on time, with highest quality and safety”. Arabtec said: “The restructuring process, management changes, and the adoption of more conservative policies show Arabtec is on track to enhance its position within the industry, and to enable the company to perform in the currently challenging environment.” Mohammad Kamal, the director of research at Arqaam Capital, described Arabtec’s latest results as “a negative read in the context of three quarters of disappointing numbers”. He said: “Cost proliferation and a slowdown in execution, relative to the size of its order book, have impacted profit and loss heavily. The structural changes being put in place will likely require time to bear fruit. Overall, it is likely that the business will miss consensus full-year earnings expectations.” Market conditions for contracting companies remained tough, Mr Kamal said, noting that Dubai-listed contractor Drake & Scull posted weaker results this month. “The macro environment at hand will continue to pressure sector earnings and cash flows,” he said.

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Source: The National

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EMIRATES DISTRICT COOLING PLANS HIGHER OUTPUT CAPACITY TO MEET

EXPO 2020 DEMAND

MONDAY 17 AUGUST 2015 Emirates District Cooling (Emicool) said it plans to increase output capacity by more than half to meet demand arising from the World Expo 2020 development boom. The company is to expand its operations to 500,000 tonnes of refrigeration (TR) – the amount of heat that is removed from the air – up from its current 330,800 TR. “The demand within Dubai Investments Park and across the UAE is on the rise amid burgeoning construction and we are fast augmenting our capacity in line with this,” said Adib Moubadder, Emicool’s chief executive. Dubai expects as many as 25 million visitors during Expo 2020, and developments are growing rapidly, with Dubai Investments Park preparing to build eight hotels and service apartment buildings in the next five years. Dubai Investments Park said the emirate would require an additional 45,000 hotel rooms and investments of about US$7.1 billion were expected for new projects. Emicool, a joint venture of Dubai Investments and Union Properties, presently has six plants that supply district cooling to various areas in Dubai. District cooling is the chilled water that is delivered to cool the air in buildings. The doubling of capacity at Dubai Investments Park to 250,000 TR is part of the expansion plans. Emicool said air-conditioning use in Dubai Investments Park increased 30 per cent in the first half of the year. Omar Al Mesmar, the general manager of Dubai Investments Park, said the park’s expansion plans included six schools, a university, more than 4,500 companies, industrial units, as well as retail and commercial outlets. “Dubai Investments Park’s proximity to both Al Maktoum International Airport and the Expo 2020 site is leading to increasing demand for quality hotel and serviced apartment projects to cater to the anticipated tourists flow,” he said. Source: The National Back to Index

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DUBAI TO TAKE SPANISH LESSONS

FOR SMARTER CITIES

WEDNESDAY 19 AUGUST 2015 Dubai Municipality will today sign an initial agreement with Barcelona City Council to share their best practices for creating smart cities. The deal will be signed by Hussain Lootah, the director general of Dubai Municipality, and Josep Pique, the chief executive of Barcelona City Council’s economic growth office, as part of a two-day bilateral meeting. Dubai’s planners will visit Barcelona in November to learn from its experience. Mr Pique said yesterday that Dubai should try to use Expo 2020 as a target for developing – and then showcasing – the most advanced smart-city technologies in the world. “You are in the right moment, you are in the right place and you have the right momentum,” he said. “From that point of view, Expo 2020 must be a showroom of the smart city of Dubai. It needs to invite entrepreneurs and to invite companies to show the best solutions for the cities of the 21st century.” He said that smart city technologies were important as they allowed for the collation and cross- examination of information from a variety of inputs including transport, energy, water use and waste streams. This allows city chiefs to interpret and even change behaviour to affect a smoother running of a city. However, Mr Pique argued that smart-city technology only played a part of a city’s transformation, adding that the other two key elements were the creation of knowledge cities to bring in high-value jobs and attractive societies in which people wish to work. “Infrastructure and human planning is the key element to be sure we are developing the right city for the right economy for the society,” he said. “This is very important. We have to combine the three elements, and we have to be sure that we are understanding the challenge of top cities. “Dubai, as well as Barcelona, is playing in the Champions League [for smart cities].” Mr Pique, who is also the vice president of the International Association of Science Parks and Areas of Innovation, was the chief executive of an initiative known as 22@. This transformed an area of abandoned and underused industrial properties into Barcelona’s own smart city. About €200 million (Dh812m) was spent on below-ground infrastructure including a pneumatic waste collection system, district heating and cooling, and a smart lighting and security system. Over the past 15 years, 4 million square metres of new property have been built in the Spanish district and 95,000 new jobs have been created – 45,000 of which are in the knowledge economy. The city council also retained 30 per cent of the space developed for social housing. Mr Pique said this element was important to ensure that everyone working in the area could live in it, thereby relieving pressure on transport networks.

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“We believe the best mobility system is no mobility. If you are working and living within walking distance, you don’t need public or private transport.”

Last year, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, issued a directive to make Dubai the “smartest city on earth” within three years. The citywide plan involves linking government services to smartphones and the introduction of fibre- optic cable and high-speed Wi Fi networks across the city. Within the new Dubai Design District, Cisco and du are delivering a range of internet-enabled services that provide traffic and parking information, monitor building waste and integrate a series of safety, lighting and security functions. Source: The National Back to Index

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PARSONS WINS DUBAI EXPO 2020 SITE

CONTRACT

WEDNESDAY 19 AUGUST 2015 Construction consultancy Parsons is to carry out the design and supervise construction of all of the infrastructure works for Dubai’s Expo 2020 site. The US-based firm said that work will involve designing, monitoring and delivering all infrastructure works for a 438-hectare site, which will include several pavilions, souqs and entertainment venues. “We are excited that Parsons was selected by Expo 2020 Dubai to help deliver this first ever global showcase staged in the region. “Our collective efforts will embody Dubai’s overall mission to spur innovation, opportunity, and connectivity,” said Gary Adams, Parsons Middle East Africa president. The company’s group president, Todd Wager, said: “Given the magnitude and distinctiveness of Dubai Expo 2020, this is a significant win for us and we are deeply committed to supporting Dubai with our global and local resources to provide a new level of sustainable design and operational services.” Parsons is already overseeing a number of infrastructure packages for major Dubai projects including the Dubai canal and new link roads to the Dubai Parks and Resorts site. A consortium led by US-based CH2M Hill and UK-based Mace was appointed as real estate programme management consultants for the Dubai Trade Centre Jebel Ali development – the master planned area around the site – in January. Source: The National Back to Index

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TOURISM TERROR WILL NOT KEEP

PEOPLE AWAY, HISTORY SHOWS

WEDNESDAY 19 AUGUST 2015 It is a popular, cowardly tool of terror, promising heavy fatalities and a hit to economies of nations that rely on tourists. But history shows this week’s attack in Bangkok and recent atrocities in Tunisia does not mean people will stay away. Whatever motivated the man who planted a bomb at Bangkok’s Erawan shrine – a popular attraction for foreign visitors and an important symbol for Thais – on Monday, the immediate objective seems clear. As events of recent years have shown, in Tunisia, Egypt, Morocco, Indonesia and many other locations, including European capitals, the tourism industry is considered a prime target by terrorists. The extremists are unmoved by the pleas made by political leaders and the media that the holidaymakers threaten no one. There is no concept of innocence in their minds. To the ruthless militant, inflicting massive, often random casualties amounts to stock in trade. Murdering well-protected political leaders and other decision-makers can be harder, although attempts are still regularly made and sometimes succeed. Tourist locations present softer targets and attacking them is designed to cause maximum harm to the economic asset they represent. The effects increase significantly if foreigners are among their victims. Official responses follow a familiar pattern. The authorities vow to track down those involved, or in the case of suicide attacks, accomplices or organisers. Governments insist those behind the evil acts will not be allowed to achieve their long-term goals and urge the public not to surrender to fear. But with each atrocity, damage is done and can be devastating, if not always long-lasting. Egypt offers an illuminating example of the harm caused and the possibilities for recovery. An early example in the recent history of high-casualty operations aimed at tourists occurred at the Queen Hatshepsut temple near Egypt’s Valley of the Kings in 1997. Sixty-two people, including 36 Swiss nationals, four honeymooning Japanese couples and a five-year-old British girl, were killed. The systematic nature of the slaughter, including mutilation of bodies, caused widespread horror. Even a leader of Al Gama’a al-Islamiyya, the Islamist group blamed for the massacre, sought to claim the intention had been to take hostages, not commit mass murder and much later denied involvement. The attack provoked a public backlash against extremists, but tourism – Egypt’s biggest earner – was badly hit, as it was by the knock-on effects of the September 11 attacks in the US in 2001 and by incidents such as the Sharm el Sheikh suicide bombings that killed 82 people in 2005. However, western travel specialists say popular holiday destinations tend to recover and maintain their recovery, provided the returning visitors feel secure. The BMI research agency, part of the Fitch global financial information group, concluded in July that Egypt’s tourism market was recovering well from sharp declines in 2011 and 2013 caused by “large political uprisings, subsequent changes of government and decline in internal security”. Sean Tipton, spokesman for the Association of British Travel Agents, agrees. “The Egyptian market is currently quite healthy. But then, Tunisia was healthy before this year’s attacks. Those events killed the

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Tunisian market, which of course is what those responsible intended, to do as much damage as possible to the industry and economy.

“People tend to trust the advice they’re given by the [British] foreign office with the result that 90 per cent just don’t go any more.” The Indonesian island of Bali has survived the damage to its reputation caused by the bombings of 2002 and 2005, the first of which claimed the lives of 202 people, 88 of them Australians. The other casualties came from more than 20 countries. Despite the carnage – 20 more people were killed in the 2005 attacks – visitors have kept faith. In 2012, it was estimated that tourism pumped about US$9 billion (Dh33.05bn) of foreign exchange into the Indonesian economy. Tunisia may take heart from success in rebuilding confidence in Bali and Egypt as holiday destinations. But the heavy loss of life in this year’s attacks has left its tourism industry battered. In June, just three months after one gunman killed 22 mostly foreigners when he opened fire at the Bardo museum in Tunis, another Kalashnikov-wielding murderer carried out a deadlier attack on a hotel in the resort of Sousse, leaving 38 dead. The Tunisian and French presidents, Beji Caid Essebsi and Francois Hollande, moved swiftly to make a joint declaration of “solidarity in the face of terrorism”. But the effect on tourism was instant. Most of the Sousse dead were British and travel companies quickly flew out most of the 3,000 UK nationals who were there on package holidays. The British foreign ministry changed its travel advice to discourage “all but essential travel”, a status that remains as the high season draws to a close, despite government hints that it might soon be eased. Tour operators such as Thomas Cook do not plan to resume package tours before early next year. Even before the Sousse attack, tourism figures for April – the month after the Bardo museum shootings – were 25.7 per cent down on April last year, and revenue 26.3 per cent lower, according to Tunisia’s central bank. Travel analysts have said pre-bookings by French holidaymakers for July and August were about 38 per cent down on the same period last year. It is the second time in just less than five years that Tunisian tourism has been dealt a wounding blow. In 2011, after the first stirrings of the Arab Spring led to the removal of the dictator Zine El Abidine Ben Ali, the surrounding chaos drove down annual visitor numbers from a record seven million in 2010 to under five million. The number of holidaymakers from France, the country’s former colonial power and its chief source of European travel, plummeted from 1.4 million to only 800,000. Strenuous efforts to revive the industry were rewarded by a return to figures approaching pre-revolution levels by the end of 2013. Elyes Fakhfakh, tourism minister from 2011 to 2013, mocked a tendency in the media, especially in France, to portray the country “as if it’s Afghanistan”. As the recovery gathered strength, six million tourists were counted last year and the figure had been expected to rise before this year’s attacks. Now, the Bardo and Sousse atrocities that were claimed by ISIL have again brought Tunisian tourism, which accounts for 7 per cent of the economy, to its knees and are threatening the fledgling democracy. It would have been lost on the Sousse killer Seifiddine Rezgui Yacoubi, a 23-year-old electrical engineering student who was shot dead by police, that his actions endangered the livelihoods of the 400,000 compatriots, 10 per cent of the population, estimated to work in the sector.

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Those familiar with Tunisia continue to acclaim the country’s charm and what diplomats in Tunis describe as the overwhelmingly friendly nature of its people towards visitors. Tunisia also offers a relatively low-cost holiday and this, along with the visible security introduced at holiday resorts, may gradually draw people back. But there as elsewhere, attempts to prevent further attacks will not soothe the fears of holidaymakers wondering where they may safely travel. Nor will they deter terrorists from seeking to cause further bloodshed. Thai prime minister Prayuth Chan-ocha described the attack on the Erawan shrine as intended to “destroy our economy, our tourism”. Andrew Herdman, director general of the Association of Asia Pacific Airlines, told the BBC: “It’s bound to affect tourism. Tourists will be fearful and tourism is a key pillar of the economy.” In Tunisia, there is some belief the same resilience it showed after tourism suffered chaos in the Arab Spring, will see the industry triumph over adversity. Jack Lang, president of France’s Institute of the Arab World and a former French minister of culture, gave this hope a boost by pointedly choosing to take his planned holiday this month in Tunis and the resort of Hammamet. Mr Lang acknowledged the need to feel safe, but gave a blunt reminder. “Tunisia is no more dangerous than France, the US or Great Britain,” he said. “Terrorism can strike anywhere even when we try to take all possible measures of precaution in our countries.” Source: The National Back to Index

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DUBAI TO HOST 6,000 CHINESE INSURERS AND FINANCIERS’ CONFERENCE

WEDNESDAY 19 AUGUST 2015 About 6,000 Chinese insurance and finance industry professionals will meet in Dubai next week after the emirate beat competition from Hawaii and Singapore to host their annual conference. The event will help Dubai maintain its high rate of growth of visitors from China into the second half of this year. In the first six months of 2015, Dubai received 241,000 Chinese tourists, up 25 per cent compared to the same period a year earlier, Dubai Tourism said yesterday. Dubai has made a concerted effort to woo the Chinese traveller, and the announcement that the International Dragon Award (IDA) Annual Meeting will be held in the city for the first time starting onSaturday will be welcomed. “China is a very important inbound market for Dubai, and the emirate is making big efforts to attract more Chinese visitors,” said Issam Kazim, chief executive of Dubai Tourism. “We set out a plan from 2012 to bring in more Chinese guests, this is not a short-term shift, the timeline is mid to long term.” Chinese visitor numbers to the emirate are predicted to rise 98 per cent in the 10 years through 2023 to 545,000, according to a report in March from Oxford Economics and InterContinental Hotels Group. The growth will be supported by the rising supply of three- and four-star hotels in the emirate, which appeal to the increasing numbers of Chinese travelling. Of the 3,600 hotel rooms expected to come on stream in the nine months through December this year, 44 per cent would be rated three-star or lower, according to JLL. The organisers of the IDA conference said Dubai was chosen ahead of many bidders including Hawaii, Bangkok, Singapore and cities in Japan and Taiwan because of “its first-class accessibility”. “Once the Dubai government offered some financial support and we saw the infrastructure and the city, the decision was not a hard one,” said Richard Wu, chairman of the IDA 2015 Annual Meeting. “This will be the first time the conference has been held outside of Asia, and we have had many people expressing a desire to come and see the ‘city of the future’ as Dubai is seen.” The increasing number of visitors from China is a welcome fillip for the emirate as the stream of Russian tourists slows amid economic sanctions at home. Russian tourist numbers fell by almost a quarter last year. “Russia is a very important market because it doesn’t just impact hotels, it hits retail,” said Rashid Aboobacker, a senior consultant for TRI Consulting. “Dubai tourism is a diversified market so it doesn’t have a major impact. The Chinese visitors don’t spend as much when they get here and they stay in smaller hotels. Dubai has always been known as an expensive destination. Maybe this is a natural correction which needed to happen.”

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Source: The National

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DH59 MILLION APARTMENT AT LE RÊVE

IS A PALACE IN THE DUBAI SKY

THURSDAY 20 AUGUST 2015 For those willing to spend Dh59 million on a property, it must have something that few others offer. Le Rêve is one such property. Although there are several high-rise buildings in Dubai known for their height, offerings, hotels or a combination of all three, Le Rêve, a 52-storey residential tower, celebrates its location on “millionaires’ row” overlooking the Palm Jumeirah and Dubai Marina. Le Rêve means “the dream” in French, and you have to dream big if you want to live in this tower. Its first 41 floors have just two apartments each. Celebrities and multimillionaires reside on the remaining nine floors, which are occupied by a single unit boasting luxurious touches such as a gym designed by tennis ace Roger Federer, a 24-hour concierge and two drivers’ rooms beside the cars in the garage. Each of these apartments also has five private parking spaces; The tower has a spa that could only be found in five-star hotels. Oh, it also has private lift access – you see it’s the little things in life that make all the difference. So now we know what’s outside the door, what do you get from a whole floor of an apartment block? In fact you get exactly 15,716 square feet of space, 6 bedrooms, 7 bathrooms, 4 reception rooms, a private cinema and a study. You’ll also get a terrace offering views only birds usually have and staff accommodation. The fixtures and fittings are of a quality one would expect from such a residence. All tiles are made from Italian marble, whether wall or floor, and the other floors are hardwood. The kitchen has state-of-the-art appliances and enough room for a family to breakfast, brunch and dinner without moving far. The fact that Le Rêve is located where it is and its top apartments take up a full floor gives means panoramic views of Palm Jumeirah, Dubai Marina and the sun-drenched, dancing-blue ripples of the Arabian Gulf. q&a still the right time to buy high? Gregory Lewis, senior negotiator with Knight Frank tells us more about the property: You mentioned celebrities living in Le Rêve? Well Roger Federer has a place there and Fernando Alonso, the ex Formula 1 World Champion, so I’d avoid the gym unless you want to feel slightly inadequate. Why would I spend Dh59 million when the property market is slowing down. It said in The National only last week that prices in Dubai Marina had fallen 18 per cent? Well I could say don’t believe everything you read in the newspapers, but I won’t. We have seen with prime- and super-prime properties that there has been no softening in the market. In fact the market has arguably picked up. We usually sell one property a month in Emirates Hills (which is similarly priced), but this year we are selling nearly two properties a month. Only last week we sold two villas –

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one for Dh78 million and one at Dh155m. The main point is that the rich still have money and these properties do not come on the market very often, so the market is buoyant.

Dubai Marina must be a special place? Yes and no, the building of the tram route through the middle of it made living there fairly unbearable with constant delays, traffic lights and changing routes. However Le Rêve is insulated from the tram as it has its own service road to avoid the snarled up traffic. However for metropolitan living there are few places like it with the Walk, The Beach and the new island Dubai Eye coming online. Source: The National Back to Index

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INDIA DEVELOPERS DANGLE PROMOS AND DISCOUNTS TO LURE BUYERS AS

SALES CONTINUE ‘DOWNHILL RIDE’

SATURDAY 22 AUGUST 2015 India’s housing market is under pressure, as developers delay new projects and bombard potential buyers with offers ranging from discounts and waived fees to free air miles in an effort to revive sales. “There is no denying that there has been a decent correction in prices in some markets and inventory pile-up across metros over the last year,” says Sumit Jain, the co-founder and chief executive of CommonFloor.com. Depressed sales have pushed developers into coming up with innovative offers to tempt buyers. “Developers are coming up with a range of new initiatives to infuse more positivity into the market,” says Rahul Purohit, the principal partner at Square Yards, an Indian real estate consultancy. “Increasingly these initiatives are becoming popular all over India.” In Mumbai, for example, research by Knight Frank reveals that the housing market is “reeling under tremendous pressure” with a 47-per-cent drop in new launches in the first half of the year, while there are 200,000 unsold homes in the Mumbai metropolitan region, as sales continue their “downhill ride”. Demand has dropped by 30 per cent over the last two years, the firm’s figures show. Home sales of 28,446 properties and new launches of 18,887 units between January and June this year made it “the worst half-yearly period in the post global financial crisis era”, according to Knight Frank. The premium market in Mumbai in particular has struggled, with no new launch in the last six months, it says. Factors including a soft rupee and high inflation over the past couple of years have had an effect on home sales. “Several reasons erupting over the last few years have contributed to the current mess,” according to Knight Frank. “Muted property price growth expectation and booming financial investment alternatives have weakened the investment rationale for property, thereby keeping investors away. On the other hand, for end users, high property prices and low income growth continue to be the top concerns. Notwithstanding the coping strategies – easy financing schemes and freebies – adopted by developers to revive demand, these factors took a toll on market momentum.” Knight Frank is forecasting “modest improvement in market momentum” in the second half of the year and “stagnation on the price front” in Mumbai following slow growth of 2.5 per cent in weighted average prices in the first half of the year. But a report released by Ambit last month stated that property prices in Mumbai could fall by 50 per cent. Other Indian cities have also fared badly. Data from CommonFloor.com shows a 56 per cent decline in residential launches in Delhi NCR (national capital region) in the second quarter of this year compared to

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the same period last year, while Bangalore experienced a 73 per cent drop, Hyderabad a fall of 82 per cent, and launches in the Mumbai region declined by 74 per cent.

“The Mumbai residential market is grappling with a huge inventory pile-up which is primarily due to overpriced residential market,” says Mehul Thakur, the director of Viva Homes, a developer based in Mumbai. He adds that price movement is “a contagious phenomenon” and if one builder drops prices, then others will follow suit. Mr Jain points out that potential buyers stand to benefit from the weak market conditions and that the offers are having some effect. “Discounts and incentives – up to 20 per cent – through interesting schemes and plans so as to lure homebuyers … in-turn help in demand creation, which is essential in the current scenario.” Tata Housing recently announced a promotion for non-resident Indian (NRI) buyers of free Jet Privilege miles, the air miles scheme of Jet Airways, on purchase of a home in its housing projects. Other deals now on offer include the promise of free cars and modular kitchens, as well as various financing packages. One of the deals the Mumbai developer HDIL has come up with allows customers to make a down payment of 1.2 million rupees (Dh67,750), while the remaining balance does not have to be paid until after the possession of the flat. The developer pays the interest on the customer’s bank loan until that time. “A new offer most of the time leads to a significant increase in inquiries, and the same has been witnessed by us as well,” says Hariprakash Pandey, the senior vice president, finance, at HDIL. “The inquiries have more than doubled after introducing various new offers.” Prashat Mirkar, the vice president of marketing and sales at the House of Hiranandani, a developer with projects in Bangalore, Chennai, Hyderabad and Mumbai, explains that there are varying performances across different segments. “We feel that the slowdown is acute only in the high-price segment,” says Mr Mirkar. “The mid-range segment, which we cater to, continues to hold steady. For the market to return to the boom of 2006 to 2008 might not be necessarily a good thing, but we definitely could see a steady improvement in 2016.” The developer has introduced offers including rent back for its Chennai project, under which the customer pays 25 per cent upfront and the remaining 75 per cent is paid at the time of possession. In the interim, it pays rent to its customers. In Bangalore, House of Hiranandani is waiving the premium for homes on higher floors. The government’s push for “housing for all by 2022” is leading to increased focus on budget homes. “From the affordable housing point of view, we see a lot of potential in the market,” says HDIL’s Mr Pandey. “With the government’s focus on making housing affordable to the common man through policy amendments, the country’s metros collectively have witnessed a major boost in terms of affordable home launches during the first half of 2015.” With interest rate cuts and an improving economy, he believes that property sales could “revive” towards the end of this year. Kamal Khetan, the chairman and managing director of Sunteck Realty, also believes that the market will start to show signs of improvement in the coming months following a challenging period in which potential buyers have been waiting on the sidelines. “The property prices are beginning to stabilise and developers have started offering good deals,” he says. “Fence-sitting buyers will be encouraged to hit the buy button by the end of this year.”

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The outlook is “lukewarm”, according to Mr Purohit.

“Prices in the NCR and Mumbai region will roughly remain stable,” he says. “There will be increase in absorption levels, but given the high supply in the market, it would not translate into any substantial price appreciation.” Indian expats have become increasingly important to developers amid such market conditions. “One important trend that needs to be understood that at present the dynamics of Indian realty is also strongly influenced by the rise in activities by the NRI segment,” says Mr Purohit. He adds that there has been a surge in demand from Indian expats based in countries including the UAE. “Bangalore is receiving the highest volume of NRI investment followed by other markets such as Ahmedabad, Pune and Mumbai.” Source: The National Back to Index

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HOT SUMMER AS DUBAI RESIDENTS DEAL WITH AIR-CONDITIONING

ISSUES

SATURDAY 22 AUGUST 2015 With the mercury rising to almost unbearable levels, especially during the first half of the year, Dubai residents had to bear the discomfort of summer with their air-conditioning units failing on them. Results from an survey by online portal MoveSouq.com and facilities manager Imdaad show that more than 50 per cent of Dubai households have experienced problems with their cooling units during the first six months, making it the biggest maintenance issue in Dubai. The situation is even worse for those living in villas, where 70 per cent of the surveyed residents have complained about the inadequacy of air conditioning. Overall, at least 8 of 10 of the respondents complained of having faced at least two frequent maintenance issues such as sewage and smelly ducts, electrical problems, thin walls and defective water heaters. The problem of bursting water pipes also appeared to be a major issue especially among villa residents, where 24 per cent of them have complained of facing. For residents who opted to have problems fixed, 50 per cent said their landlords shouldered all the costs of repair, while less than half paid for the all expenses. In some instances, meanwhile, the maintenance bill was split equally with their landlords. Source: The National Back to Index

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INDIA’S ‘SHOE-BOX’ APARTMENT UNITS

SUIT SMALL POCKETS

SATURDAY 22 AUGUST 2015 The size of apartments in India is rapidly shrinking as developers build smaller properties to make them more affordable. “Builders are exploring innovative ways to make residential housing across major cities more appealing to potential buyers at a time when it is increasingly becoming difficult to sell expensive apartments,” said Anuj Puri, the chairman and country head at JLL India. “Unable to sell expensive homes in a sluggish market, builders across India are making smaller apartments without lowering the price per square feet and compromising on the quality of product.” Builders in India “are emulating the famous sachet marketing strategy adopted by fast-moving consumer goods companies in the late 1990s”, he said, referring to how companies in India have created smaller packages of products such as washing powder and shampoo to appeal to buyers unable to afford to buy such goods in larger quantities. Mumbai’s apartment sizes, which were already smaller than those in other Indian cities, have decreased the most over the last five years with a 26.4 per cent reduction, according to JLL. In Bangalore, there has been a 23.7 per cent decrease in average apartment sizes, followed by Chennai at 22.2 per cent and Pune at 7 per cent, its figures show. Sumit Jain, the co-founder and chief executive of CommonFloor.com says that this is a “major trend”. Its figures reveal that the number of apartments that were less than 46.5 square metres in size launched in Delhi NCR was almost 4,000. That increased by 330 per cent last year to 17,180 units below 46.5 square metres. But if this trend continues, it could lead to the Delhi NCR market becoming “plagued with shoebox-size units” with few buyers, CommonFloor.com has warned. Mr Puri said: “The fall in average apartment sizes across all top seven cities is a clear indication that developers intend to make houses affordable for buyers by reducing average apartment size instead of reducing the capital values.” Source: The National Back to Index

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EMIRATES REIT HAS DH500M FOR ACQUISITIONS AMID DUBAI PROPERTY SLOWDOWN

SATURDAY 22 AUGUST 2015 Emirates Reit has more than Dh500 million in firepower for property acquisitions as the Sharia-compliant real estate investment trust takes advantage of the property market slowdown in Dubai, a company executive said. “The fact that the market is softening and the number of transactions is significantly lower also means when you are a buyer you are in a better position,” said Sylvain Vieujot, Emirate Reit’s executive deputy chairman. “This might be an opportunity for doing better acquisitions.” The Nasdaq Dubai-listed company is investing Dh208.3m to develop an education complex at property developer Damac’s Akoya project in Dubai. It also last year bought 17 out of 25 office floors, 1,426 car parking spaces and the whole retail component of Index Tower in the Dubai International Financial Centre (DIFC), its biggest acquisition to date. The number of completed residential property deals in Dubai has tumbled by more than two thirds, according Dubai Land Department figures quoted by broker JLL. Dubai property prices could fall 10 to 20 per cent over the remainder of this year and early 2016, ratings agency Standard & Poor’s said in June. “We have less demand, but it is not really having a financial impact on us,” said Mr Vieujot. “We see less demand but we manage to keep our prices.” Emirates Reit’s loans to value ratio was 27 per cent at the end of June, which gives it room to borrow to fund acquisitions. “If we buy a building that is fully occupied, or a school or a warehouse that’s exactly what we are looking at, at the moment,” said Mr Vieujot. “We are looking at something with a good cash flow that will help us deliver better returns.” To date, the annualised return on the reit this year has been 16.4 per cent, and the company expects to maintain the figure for the rest of the year. Emirates Reit has 8 properties, with a total value of Dh2.3 billion at the end of June. Net profit rose 2.8 per cent to Dh129m in the first half of this year compared with the year-earlier period. The company expects profit to improve this year with the lease of offices in Index Tower, which now represents 43 per cent of the firm’s total asset value. “We expect over the next quarters to have very good occupancy in Index, and therefore profit can only improve and very significantly improve,” said Mr Vieujot. The firm expects to lease Index tower at a premium due to its location in DIFC.

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In its latest Dubai office report for the first half of this year, Knight Frank said that rent levels for fitted out space in DIFC remained steady at Dh2,530 per square metre, compared to Dh1,991 per square metre in Downtown Dubai and Dh1,615 for offices fronting Sheikh Zayed Road or in Dubai Internet City. Source: The National Back to Index

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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.