News Brief 35 Sun Day 28 August 2016

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NEWS BRIEF 35 SUN DAY 28 AUGUST 2016

RESEARCH DEPARTMENT

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REAL ESTATE NEWS UAE

GULF INVESTORS MAINTAIN INTEREST IN TURKISH PROPERTY DESPITE TURMOIL UAE CLADDING FIRMS INVEST IN UPGRADES TO PRODUCE MORE FIRE-RESISTANT PANELS THE FIVE IMPORTANT THINGS IN BUSINESS RIGHT NOW DUBAI SME PROFILE: BUILDING ENGINEERS FIND THEIR NICHE IN DUBAI MURRAY & ROBERTS GROUP TO CLOSE ITS CONSTRUCTION FIRM REGION’S WEALTHY TO CONTINUE DIVERSIFICATION INTO OVERSEAS PROPERTY HLG CHIEF RELEASED FROM CUSTODY AS HABTOOR EXITS JOINT VENTURE DUBAI’S DRAKE & SCULL SAYS IT HAS NOT HIRED ADVISER TO SEEK INVESTMENT ORASCOM SECOND-QUARTER PROFIT SLIDES SCAM ALERT: UAE WARNS RESIDENTS AGAINST FRAUD PROPERTY ADS DUBAI MUNICIPALITY SUPERVISES 25,000 BUILDINGS UNDER CONSTRUCTION REVEALED: TOP 5 LOCALITIES TO RENT AND BUY A HOUSE IN DUBAI HABTOOR LEIGHTON GROUP CHIEF EXECUTIVE ARRESTED IN DUBAI WOULD YOU PAY DH107 MILLION FOR THIS MINIMALIST PROPERTY MASTERPIECE? – IN PICTURES NEW MALL AT WORLD TRADE CENTER OPENS FOR MANHATTAN SHOPPERS DUBAI WATER CANAL, JEWEL OF THE CREEK AND OTHER INFRASTRUCTURE PROJECTS A BOON FOR CONTRACTORS ‘IMMINENT’ RISE IN DUBAI HOUSE PRICES AS CONDITIONS IMPROVE, NEW REPORT SAYS DUBAI DEVELOPER NAKHEEL BRINGS AN END TO DEBT RESTRUCTURING SAGA WITH DH4.4BN PAYMENT HANDOVER OF DUBAI PROJECTS DELAYED AS AUTHORITIES GET TOUGH ON FIRE SAFETY FIRST LOOK INSIDE DUBAI OPERA AHEAD OF GRAND OPENING DUBAI’S DAMAC AWARDS DH967M CONTRACT TO BUILD AYKON LONDON ONE

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REAL ESTATE NEWS TOWER

BROOKFIELD AND DIFC AGREE ON ARBITRATION OVER ALLEGED GATE BUILDING DEFECTS DRAKE & SCULL INTERNATIONAL SHARES FALL SHARPLY IN DUBAI AS IT REVIEWS BUSINESS ACTIVITIES ABU DHABI DH2.9 BILLION GRANT TO KICK-START BUILDING OF BAHRAIN’S NORTH CITY LOW OIL PRICES CONTINUE TO BITE INTO ABU DHABI HOUSING RENTS GCC/INTERNATIONAL LONDON’S BBC TELEVISION CENTRE TO BE PITCHED TO DUBAI PROPERTY BUYERS QATAR INVESTMENT AUTHORITY BUYS 9.9 PER CENT STAKE IN EMPIRE STATE BUILDING OWNER TIMING IS CRUCIAL WHEN IT COMES TO LONDON PROPERTY CHINA’S INVESTMENT IN $10.7BN CITY IN OMAN TO PROVIDE BUILDING BOOST BRITAIN’S MEDAL HAUL AT THE RIO GAMES ECLIPSES BREXIT AND HOUSE PRICE WOES NEW YORK TOPPLES LONDON FROM PROPERTY PINNACLE AS BREXIT DETERS FOREIGN INVESTORS

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SCAM ALERT: UAE WARNS RESIDENTS

AGAINST FRAUD PROPERTY ADS

Saturday, 27 August, 2016

The UAE Ministry of Interior has alerted residents and citizens of scam operations through fake companies promoting the sale of real estate abroad through advertisements in the media, according to a report in Arabic daily Emarat Al Youm.

The Ministry called on people to exercise caution when making an investment in order to not become a victim of any scam.

The case emerged when residents and citizens told Emarat Al Youm of the proliferation of advertisements in local online journals promoted the sale of real estate and land in some Arab and European countries.

They questioned the validity and legality of dealing with these companies. They confirmed that when they communicate with the advertisers asking them to preview the property, they insisted to preview it via the photo without a preview on the ground.

They emphasised that this raises their suspicion and doubts about the authenticity of such deals and companies.

Lt. Colonel Hammoud Al Affari, Deputy Director of the Law Respect Culture Bureau at MOI, told Emarat Al Youm that some such individuals have exploited the media through fake advertisements aimed at getting money to provide services.

He added that some of these ads might be a trap to defraud people and rob their money or make fake deals.

He pointed out that those swindlers adopting very professional manners to trap their victims do not disclose all relevant information on real estate sales, the right location, or a statement, or being free of obligations, or exaggerate the real price of the said property.

Al Affari appealed individuals to exercise caution where some of those swindlers resort to using psychological methods to influence on people and they play on their desire for quick profit.

Al Affari stressed that people must make sure that the company that publishes such ads is registered in the UAE as per the applicable laws. Source: Emirates 24/7 Back to Index

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DUBAI MUNICIPALITY SUPERVISES 25,000

BUILDINGS UNDER CONSTRUCTION

Thursday, 25 August, 2016

The Buildings Department of Dubai Municipality is undertaking engineering supervision of 25,124 buildings under construction in various areas of the Emirate of Dubai.

The engineering supervision process includes inspection and control of all construction works.

Building permits were issued for various kinds of multi-storied buildings, general and industrial buildings, private villas and investment villas as well as additions, amendments and decoration works.

Khalid Mohammed Saleh, Director of Buildings Department at Dubai Municipality said that the municipality receives requests for technical audit of all these projects under implementation as per stages of work.

"During the first half of the year, the municipality received 25,419 requests for structural audit, which is a 20 percent increase from the number of last year's requests for the same period," he said.

"We also received more than 3,000 requests for scrutiny for issuing completion certificates and the first half of the year saw issuance of certificates to 5,837 buildings, whereas the number was 2,906 during the same period last year," said Saleh.

He pointed out that the increase in the number of requests for technical audit reflects a positive movement in the labour market especially in the construction sector.

Abdullah Shezawi, Head of Engineering Supervision section at the Building Department said that the section undertakes regular engineering inspection at all sites under construction by stages of work and also based on the importance and type of technical and construction risks associated with the work stage.

"The electronic system of the Engineering Supervision section fixes the visit dates specified for each site based on the risk study carried out by the section and also by checking with the global best practices in the field," he said. Source: Emirates 24/7 Back to Index

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REVEALED: TOP 5 LOCALITIES TO RENT AND

BUY A HOUSE IN DUBAI

Thursday, 25 August, 2016

With the year moving beyond the first half, Dubai Land Department (DLD) data shows healthy transactional activity in Dubai.

Investment in Dubai’s real estate sector in the first half of the year crossed Dh57 billion, and there has been encouraging news coming out of Sharjah’s realty market too, with the city pulling in investment worth Dh12.1bn in the first six months of the year.

The real estate market in Abu Dhabi, as always, continues to lure investors with high rental returns on investment and a great promise of capital value appreciation.

Dynamic Dubai

In July 2016, Dubai’s real estate market remained strong with rental yields going as high as 6.5 per cent in select apartment categories. Overall, however, apartment rents became more affordable with a total downward adjustment in July of 2 per cent year-on-year.

Average yield across all bed categories was recorded at 5.6 per cent.

As per Bayut’s findings, the average rent for studio apartments in Dubai remained stable at Dh57,000 compared to the average studio rents in the first half of 2016.

However, the average was down 6 per cent in a year-on-year comparison with July 2015.

The units returned an average rental yield of 6.3 per cent in July 2016, with the average rent for 1-bed units recorded at Dh92,000 and rental yield hovering close to the 6.5-per cent mark. The average rent was 7 per cent less in July 2016 than the average rent in the first half of 2016.

Two-bed apartments fetched owners Dh145,000 in July after a downward adjustment of 3 per cent. However, rental yield remained attractive at 6 per cent. Commanding Dh206,000, average rent of 3-bed units remained stable when compared with H1 2016 values, and the rental yield was 5.4 per cent in July 2016.

The largest apartments, the 4+ bed category, returned an average annual rent of Dh304,000 in July 2016, exhibiting a 2 per cent drop in value from H1 2016. Average yield for these units was recorded at 4 per cent.

Top 5 localities for renting an apartment in Dubai (July 2016)

1. Dubai Marina

2. Jumeirah Lakes Towers (JLT)

3. Downtown Dubai

4. Bur Dubai

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5. Dubai Silicon Oasis

Top 5 localities for buying an apartment in Dubai (July 2016)

1. Dubai Marina

2. Jumeirah Lakes Towers (JLT)

3. Downtown Dubai

4. Palm Jumeirah

5. Business Bay

Abu Dhabi

For the month of July, the average apartment rent in the UAE capital was recorded at AED 126,000 per annum, a 6% downward adjustment from the average rent recorded in H1 2016. Still, the average rental return remained at an attractive 7% in July 2016, creating ample interest from genuine investors.

Compared to values calculated in July 2015, the average studio rent in Abu Dhabi dropped 5% to AED 56,000 in July 2016, while rental values of 1-bed apartments adjusted downwards by 6% to AED 91,000. Two-bed and 3-bed apartment rents fell to AED 129,000 and AED 172,000, respectively, registering decreases of 4% and 5%. The average rent of 4+ bed apartments also came down by 4% to AED 247,000 on average in July 2016.

However, the drops in rental values were neutralised by the impressive yields (7% on average) that the units in the capital offered. Studio apartments topped the yields chart by returning 7.4% in July 2016, while 1-bed and 2- bed apartments returned yields of 7.3% and 6.9%, respectively. The average rental yield of 3-bed apartments rose to 6.3%, while the 4+ bed category returned an encouraging 5.5% in rental yield during July 2016.

Top 5 localities for renting an apartment in Abu Dhabi (July 2016)

1. Al Reem Island

2. Al Raha Beach

3. Khalifa City A

4. Al Muroor

5. Al Khalidiyah

Top 5 localities for buying an apartment in Abu Dhabi (July 2016)

1. Al Reem Island

2. Al Raha Beach

3. Al Reef

4. Saadiyat Island

5. Al Ghadeer

Is it a good time to buy?

According to Bayut, at a time of general global slowdown, the performance of UAE’s realty market continues to inspire trust in investors. Both Dubai and Abu Dhabi continue to be safe havens for global realty investors and the

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increasing prospects of Sharjah’s real estate sector provide yet another avenue for parking international wealth in a quickly developing market.

Although rents have seen periodic adjustments, Bayut says it believes the UAE’s unique selling propositions such as a highly smart, diversified economy, security of investment and the great promise of Expo 2020 will keep the real estate and its allied sectors thriving in the months to come. Source: Emirates 24/7 Back to Index

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HABTOOR LEIGHTON GROUP CHIEF EXECUTIVE ARRESTED IN DUBAI

Thursday, 18 August, 2016

The chief executive of Habtoor Leighton Group (HLG) has been arrested in Dubai.

José Antonio López-Monís, the chief executive and managing director of the contractor was arrested on Wednesday according to an Australian stock exchange filing.

"As a result of a complaint filed with police in Dubai, the CEO and MD of HLG, José Antonio López-Monís, was arrested after market close on Wednesday 17, August 2016," said a statement from CIMIC Group, which has a 45 per cent holding in HLG.

No further details were disclosed.

The group said it was assisting Mr López-Monís and would "inform the market as required and as further information is available".

Mr López-Monís joined HLG as chief executive and managing director in October 2012.

HLG is one of the biggest construction groups operating in the UAE.

An HLG official declined to comment. Source: The National Back to Index

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WOULD YOU PAY DH107 MILLION FOR THIS MINIMALIST PROPERTY MASTERPIECE? – IN

PICTURES

Thursday, 18 August, 2016

For those with a love of sleek, minimalist designs, Number Five Cannon Lane in Hampstead, London, is a dream prospect.

The 8,000 sq ft home, which is just a few miles north-west of central London, has been designed to exacting detail by Claudio Silvestrin – an architect and interior designer who has been described as a "master of minimalism".

Mr Silvestrin is an Italian who set up a practice in London 27 years ago. He has designed buildings and interiors for art galleries, museums, restaurants and private clients, including the musician Kanye West. Mr Silvestrin designed the Oblix Restaurant at The Shard and has worked with Giorgio Armani, Anish Kapoor, Calvin Klein and Victoria Miro.

For this project, he was employed by the developer Astwood to create designs for a home that has taken nine years of planning, design and construction.

The property, which is on the market for £22.5 million (Dh107.6m), has been designed on an inclining site over five levels, in a way that still offers privacy despite the use of floor-to-ceiling glass throughout.

The basement level has a 17.7 metre-long swimming pool, a sauna and steam room, a gym, a treatment area, a staff bedroom and a utility and plant room, with sub-basement level storage.

The lower ground floor contains a large reception room, a cinema, a kitchen-cum-breakfast room with a pantry and cold store, and a car lift underneath the two-car garage.

The ground floor features the house’s main reception room running the full width of the property. It has stone- clad walls, giving the appearance of an art gallery. It also has the garage, a balcony and a terrace leading to a garden designed by the Chelsea Flower Show gold medallist gardener Chris Beardshaw, with a hidden storage area.

The first floor contains four of the house’s five main bedrooms, including a principal bedroom with major bathroom and two large balconies, while the top floor has the fifth bedroom and a roof terrace area offering views over Hampstead Heath, overlooking the City of London beyond it.

There is a lift connecting the reception and living floors and a central spiral staircase rising from the lower ground to the top floor.

Developer Astwood said that its aim for the site had been to deliver a "timeless" property – one that keeps its sense of style whatever the latest trend may be. It said that Five Cannon Lane "expresses clearly Claudio’s philosophy that sophisticated simplicity can be achieved through perfect lines, natural materials and quality of light".

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The property is on the market with the brokers Savills and TK International.

Q&A

So what does this house actually look and feel like?

We’ll leave that description to the architect himself. Mr Silvestrin said that "the feeling of Five Cannon Lane is one of calm and serenity; it’s almost a meditative space". Further, "To achieve this simplicity, technology is mostly hidden and there is no ornamentation of any kind ... However, there is drama – the 42-step stone staircase that leads down to the pool and spa recalls an ancient site, for example".

Any other features worth mentioning?

As well as the rough-hewn stone used on walls and staircases, the materials used are of high quality, such as natural oak and white Italian porphyry stone.

There is also an oxidised bronze water feature and bar island, and designer lighting ranges from the Italian company Viabizzuno. The sanitary ware has been designed by Mr Silvestrin himself and there is a sophisticated lighting control system as well as underfloor heating and air conditioning throughout.

Who would live in a house like this?

It’s the sort of place that would appeal to all. Hampstead has been home to everyone from the romantic-era poets such as Keats and Shelley to pop stars such as Liam Gallagher and George Michael. There’s a good reason for this. It provides an extremely pleasant living environment, with 320 hectares of green space just 30 metres away on Hampstead Heath and great views over the City of London, which is just a few miles away. The area is good for children, although whether or not the architect would appreciate the spills, clutters, toys and sticky finger marks that go hand-in-hand with bringing up young kids at his creation is not something that one likes to ask. Source: The National Back to Index

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NEW MALL AT WORLD TRADE CENTER

OPENS FOR MANHATTAN SHOPPERS

Thursday, 18 August, 2016

Westfield’s new World Trade Center retail concourse, which opened on Wednesday inside the mass-transit hub at the rebuilt complex in lower Manhattan, is positioned to outperform the original one, destroyed in the September 11, 2001, terrorist attack, say the company’s co-chief executive.

"All you have to look at is the Apple Store and Eataly," says Peter Lowy at an office that overlooks the 6.5 hectare trade centre site. "When you look at that, you should have much higher volumes because you have much different retailers that do very, very large business."

Westfield opened the 34,000 square-metre shopping complex mainly inside the Oculus, the white-ribbed centerpiece of architect Santiago Calatrava’s US$3.9 billion commuter terminal. The opening was the latest step in a return to normality at the trade centre, where there are two office towers complete and a third on the way, along with a 9/11 memorial and museum honouring the victims of the attack.

As thousands of people flowed in and out of the Oculus, the singer Leslie Odom Jr, performed, followed by the cast of the musical School of Rock. A line formed outside the Lobster Press food stand.

Mr Lowy projects that the mall will generate just more than $1,500 a square foot in sales. The original World Trade Center mall had sales of $903 a square foot in 2000, Mr Lowy said at the time, or more than three times the average for a typical suburban regional US mall. His projects volume for the new retail centre will be almost four times the $400 a square foot found at an average mall today.

Westfield, based in Sydney, Australia, leased the original mall in 2001 in the same deal under which the developer Larry Silverstein won the rights to the twin towers and other office buildings on the site for 99 years. After the attack, Westfield sold its interest back to the Port Authority of New York and New Jersey, which owns the site, while keeping a first-negotiation right should the authority decide to sell its retail rights again.

The mall company reacquired those interests in a pair of deals, the first in 2012 and the second in 2014, for a combined $1.41bn. The Australian Financial Review last week estimated a $2.5bn value for the complex. Mr Lowy declines to comment on the estimate.

The retail concourse, in a complex that links the Port Authority Trans-Hudson trains from New Jersey with the New York subway system, is designed to attract a steady stream of commuters, workers from in and around the complex, residents from the growing neighbourhood that surrounds the complex, and tourists coming to see the memorial, museum and observatory at 1 World Trade Center, the tallest building in the Western Hemisphere.

Westfield is expecting about 15 million global travellers to visit the area annually, Mr Lowy says. He is projecting the complex to generate about $1bn in annual sales volume and operate at a 6.5 per cent profit margin.

The mall will debut with 60 of its just more than 100 stores and restaurants in operation, including Eataly, the Italian-themed food and beverage marketplace, which opened on August 11, and the Apple Store. Other stores preparing to open include Kate Spade, Breitling, Charles Tyrwhitt and Smythson, and nine stores that Mr Lowy

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says were in the original concourse, including a Duane Reade drug store, Victoria’s Secret, Banana Republic, Cole Haan, Crabtree & Evelyn and Papyrus.

Stores still to come after the mall’s debut include the clothing retailer H&M. A representative from the US office of Hennes & Mauritz, the chain’s Swedish parent, says the company is "excited" to be part of the new mall.

The complex is fully leased, says Molly Morse, a Westfield spokeswoman. Stores will come online "in stages," with the entire complex open by the Christmas shopping season, she adds. That does not include a section that cannot be finished until 3 World Trade Center is at least approaching completion, Mr Lowy says.

The new stores face competition across the street at Brookfield Property Partners’ Brookfield Place, where the landlord spent about $250 million upgrading the office complex’s retail space. Its additions include Hudson Eats and Le District, food marketplaces designed in the image of Eataly.

The trade centre’s shopping hub also will have the delicate task of co-existing with the solemn memorial, with its twin pools approximately where the destroyed twin towers were. For many victims’ families, the memorial remains their only grave site. Lee Ielpi, whose firefighter son Jonathan died in the attack, says Westfield has treated the task with sensitivity and respect.

"This is something we’ve thought about for years," sys Mr Ielpi, a co-founder of the 9/11 Tribute Center, which has been interacting with site tourists since early last decade. "The memorial itself and the museum, that is the sacred ground, that 9 acres, but the same applies to the transit hub and all the retail that’s going to be involved in it. But we have to be open-minded about it. We have to realise that there is rebuilding, there is revitalising."

The masterplan for the complex allows the stores to operate without intruding on the memorial, Mr Lowy says. None of the entrances face the memorial, he says. A dining area at Eataly, which is on the third floor of the 4 World Trade Center office tower, overlooks the south tower memorial pool. He says he thinks those uses are compatible.

The memorial and the retail space "can co-exist in the proper manner". Source: The National Back to Index

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TIMING IS CRUCIAL WHEN IT COMES TO LONDON PROPERTY

Friday, 19 August, 2016

Central London high-rise property prices will crash by at least 50 per cent predicts Alastair Stewart, a consultant analyst with Stockdale Securities who has enjoyed a distinguished car-eer in the City. Currently there are 62,050 residential units under construction in London, according to property data specialist Molior. That’s an amazing 156 per cent higher than at the last peak in 2007.

"The high number under construction reflect the combination of starts and longer lead times for the large complex sites which appear to be a particular hallmark of this cycle," explains Mr Stewart.

Many of these developments are funded from Asia, and dependent on demand from the same source. It’s very much like Dubai was before the 2008 crash, with off-plan sales to foreigners and low down payments leveraging up the market.

"We’ve seen initial deposits as low as £2,000 [Dh9,566] with a further 10 per cent thereafter," warns Mr Stewart. "But still, with the substantial majority, at least two-thirds to pay on completion."

Therein lies danger.

"Investors facing margin calls may have to liquidate assets quickly," he adds. "A longer-term risk could be that they simply cannot complete because of financial constraints."

Will this leave another London buying opportunity for cash-rich Arab and expat investors? This looks like a repeat of the 1989-93 UK housing recession, when a much smaller bubble in London Docklands apartments exploded, forcing prices down by 40 per cent.

The recovery came at the end of 1992, when George Soros forced the pound sterling out of the European Exchange Rate Mechanism, causing a sudden drop in interest rates. Will something similar happen this time around?

Maybe not. The plight of the pound sterling is an argument for higher and not lower interest rates. UK base rates of 0.25 per cent – only recently cut from 0.5 per cent – do not have much more room to drop.

Before buying any asset it is always advisable to wait for an obvious catalyst for a market recovery. Otherwise you may have a long time to wait for something positive to happen. Britain, now facing many years of negotiations to exit the European Union, may not have a quick bounce back this time.

It could be that only the very EU exit itself marks the bottom of this housing cycle. That might be the moment to buy the best bargains and also coincide with the lowest valuation of the pound sterling against the dirham.

It was after the 1974 stock market and real estate crash that Gulf Arabs first became big buyers of Central London property. I know many families who still stay in those same apartments in Knightsbridge and Kensington each summer.

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Indeed, that was actually the last chance to buy London property at bargain ¬prices. It’s been steadily heading upward ever since. I still find it quite mind-blowing.

The one-bedroom penthouse apartment I rented in not-so-fashionable Soho this summer is worth more than my Dubai villa four times the size. I know London salaries are high, but you could earn the same tax-free in the Dubai financial sector in some occupations.

I concede that London house prices have been defying gravity for a long time. Mr Stewart and I used to be colleagues and he was very concerned about London house prices when we lunched in 1999. But they proved to be an outstanding buy then and only stumbled slightly in 2008 in the worst global financial crisis since 1929.

On the other hand, the mother of all bubbles may have been inflated in this asset class. It’s not only a matter of Asian money flooding the market but the ultra-low interest rates that followed the global financial crisis.

Everybody knows that these interest rates cannot last if investors are going to continue to invest in the future, and higher interest rates will mean only one thing for property prices: that they will go down.

Add to this toxic mixture the recent UK government measures to dampen foreign investment in London property and buy-to-let by domestic investors – a reduction in tax allowances and a 3 per cent hike in transfer taxes – and a serious crisis looms for London house prices. Sales have stalled since the Brexit.

Of course nobody knows just how low the pound will finally go. Plus London’s new mayor Sadiq Khan has promised to be less friendly towards planning permission for homes built for foreign speculators.

Beware of jumping the gun on London residential property. Wait for a recognisable market bottom and a catalyst to reverse it. Source: The National Back to Index

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DUBAI WATER CANAL, JEWEL OF THE CREEK AND OTHER INFRASTRUCTURE PROJECTS A

BOON FOR CONTRACTORS

Saturday, 20 August, 2016

The Dubai Road and Transport Authority’s (RTA) unveiling of new designs for the Water Canal stops and a series of other transport projects this month is another sign that the local market continues to offer opportunities despite difficulties elsewhere in the region, according to contractors.

A series of infrastructure projects being undertaken by the RTA include the new Shindagha Crossing, new dock areas for the Dubai Water Canal, new interchanges for the Jewel of the Creek project and the extension of Burj Khalifa metro station to boost capacity. The projects also feature transport plans for the city, including a traffic management plan that will include the installation of 36 extra bridges to boost traffic flows.

Brendan Young, the head of rail for the Canadian engineering consultancy WSP Parsons Brinckerhoff in the Middle East, said that there are tenders that have been issued seeking consultancies to work on aspects of transport in Dubai. One is an update to the Dubai rail master plan, initially published four years ago.

He said that the update was required to take into account changes that have taken place in the city since, such as development around Al Maktoum International Airport, Mohammed bin Rashid City and the Dubai Parks & Resorts site. It also needs to account for new technologies, such as automated vehicles like rapid transportation, especially in light of Vice President of the UAE and Ruler of Dubai Sheikh Mohammed bin Rashid’s decree that 25 per cent of all journeys should be made via smart and driverless vehicles by 2020.

"What the RTA is doing is not just looking at 2020 but to 2030 and beyond to make sure that the public transport system is the best it can be for the users," said Mr Young.

A tender has been published for consultants to devise a new travel demand management strategy for Dubai, and a tender to create a master plan for a bus rapid transport system.

Mr Young said that transport projects were helping to keep UAE contractors busy, especially as markets such as Saudi Arabia and Qatar are now much quieter than they were before the decline in oil prices.

"The UAE market appears to be quite strong, particularly in Dubai," said Mr Young. "If you talk to contractors in Dubai like Dutco Balfour Beatty, HLG or Khansaheb they’ve all got full order books for this year and most of next year. Some aren’t even bidding. They have plenty of work."

On Thursday, a report commissioned by The Big 5 construction trade show in Dubai from market researcher BNC stated that there are more than 3,700 projects across Dubai with a combined value of more than US$400 billion.

"A growing population, the tourism sector, strategic government investments like the Dubai Plan 2021 and the Dubai Expo 2020 are fuelling the local construction industry," Josine Heijmans, The Big 5 event director said in the report.

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Source: The National

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CHINA’S INVESTMENT IN $10.7BN CITY IN OMAN TO PROVIDE BUILDING BOOST

Saturday, 20 August, 2016

An agreement between Oman’s government and Chinese investors to develop a new US$10.7 billion industrial city near the port of Duqm will help Oman’s flagging construction sector, which is expected to this year post its slowest growth since 2000, according to BMI Research.

BMI said that projects such as the Sino-Oman Industrial City will help to underpin growth for construction in Oman, which it expects to accelerate from a growth rate of 2.4 per cent this year o 4.9 per cent by 2019.

The firm said that inter¬national investors, in particular from China, will fill a funding gap in Oman’s industrial sector that has been caused by the oil price plunge and the government’s inability to directly fin¬ance work. Oman is expected to run an average fiscal deficit of 11 per cent of GDP over the next five years, according to BMI.

"Although Oman possesses a degree of private investment in its construction sector, the state still plays a pre- eminent role in funding infrastructure projects, and as oil accounts for approximately 85 per cent of government revenue, the collapse in price has had a negative impact on its ability to finance projects," said David Lee, an infrastructure analyst covering Oman for BMI Research.

The 50-year deal signed in late May was "promising" as it would also help with Oman’s economic diversification, he added. The project involves Chinese investors developing about 11.7 square kilometres of land within the Special Economic Zone next to Duqm’s port (Sezad).

The consortium putting in the money, led by Ningxia China-Arab Wanfang, is planning three separate zones – heavy manufacturing, light manufacturing and a mixed-use area.

In total, some 35 projects will be undertaken, including construction of an oil refinery capable of processing 235,000 barrels per day, a petrochemicals complex, a concrete plant, a steel smelter, a glass factory, an aluminium plant and a solar factory producing panels and batteries.

Ningxia China-Arab Wanfang, which is made up of six private companies backed by the regional government from the Ningxia autonomous region of northern China, has committed to developing at least 30 per cent of the site by 2022. By this time, it is expected to have facilities capable of housing a population of 25,000, including schools, offices, a hospital and a sports centre. Another section of the site has been reserved for a tourism project with a five-star hotel. Construction will be carried out by consortium member Duqm Ningxia Construction Company, and infrastructure work is already under way.

The construction of the city would be financed by Chinese banks, but each industrial fac¬ility would be financed by the companies building them, Ali Shah, the chairman of local subsidiary Oman Wanfang, told Duqm Economist, a newsletter published by the Duqm Special Economic Zone Authority. Mr Lee said the investment was in line with the Chinese government’s One Belt, One Road initiative of boosting Chinese investment abroad, which has already involved Chinese entities backing infrastructure projects in Egypt and Saudi Arabia.

"Given Oman’s strategic loca¬tion on the Gulf, we believe the country is next in line to see large-scale Chinese investment," said Mr Lee.

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Source: The National

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GULF INVESTORS MAINTAIN INTEREST IN

TURKISH PROPERTY DESPITE TURMOIL

Saturday, 20 August, 2016

Gulf property investors are likely to remain unfazed by the security concerns in Turkey, thanks to their tolerance for risk and the country’s economic potential.

Despite political uncertainty coupled with a recent intensifying of violent attacks from Kurdish PKK militants, property brokers say that interest from Gulf investors remains strong.

"GCC countries currently account for more than 50 per cent of all foreign sales and are expected to increase demand in the short to mid-term," said Diana Dogan, the head of research at the broker CBRE Istanbul.

Earlier this month the Kuwaiti real estate firm Mazaya announced it had raised to 90 per cent its stake in Ritim Istanbul, a development of six tower blocks comprising more than 1,000 homes, 150 shops and nearly 100 offices.

Mazaya, which signed the deal after the botched coup on July 15, is keen to pursue other opportunities in Turkey.

"Any political disturbance internally or externally always has an impact on the market’s economic and financial situation following the external appetite for supply and demand, but this is a short-term effect," said a Mazaya spokeswoman. "The Turkish market has all the strong parameters to promote itself in the GCC."

Brokers in Turkey say that GCC investors are likely to have a higher appetite for risk than their European counterparts.

CBRE figures show that the number of property sales to UK investors – some of the biggest buyers in Turkey’s popular resort centres on its Mediterranean and Aegean coasts – have fallen 16 per cent so far this year, with 408 sales made between January and June compared to 486 sales over the same period last year.

"Arguably, Gulf investors are accustomed to a certain amount of change, so we believe the events in Turkey will not deter them," said Julian Walker, a director at Spot Blue, a property broker which specialises in selling Turkish property to overseas buyers. "The combination of Turkey’s pivotal position bridging East and West, its bullish economy and its predominantly Islamic nation are still an attraction to investors from the Middle East."

According to the property consultancy Knight Frank, Istanbul had the third-fastest house price increases in the world in the year to the end of March 2016, with an average property price growth of 19.6 per cent. At the same time, Turkey’s third largest city, Izmir, experienced the ninth fastest global house price growth, with prices rising 16.7 per cent.

Foreign investors also make up only a tiny fraction (1.7 per cent) of housing sales in Turkey, according to CBRE.

"We don’t currently feel that the recent coup will have much of an impact on sales volumes, velocity or achieved price," Ms Dogan said.

"The government is well aware that residential construction is a key sector in Turkey’s growth and will push banks to reduce interest rates to help maintain sales growth."

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Despite the coup attempt and a series of recent bombings in both Istanbul and Ankara, CBRE predicts that Turkish house prices will continue to rise between 10 per cent and 15 per cent over the next year. The increase will be driven by the country’s rising population, a recent interest rate cut and a stream of refugees coming to Turkey from Syria who are pushing up housing rents.

The broker says that this sort of increase would be in line with house price growth over the past three years that was also a period of currency depreciation, sociopolitical unrest and conflict.

But Turkish companies are scaling back their marketing of property to overseas investors.

The number of Turkish companies taking stands at the Cityscape property exhibition in Dubai next month has fallen this year to 20 from more than 50 last year following the attempted coup and a recent increase in political unrest.

"One of the main reasons we are seeing a reduced Turkish presence at Cityscape is that local developers have refocused their attention on their core consumer demographic instead of trying to achieve block or single unit sales from the Middle Eastern market," said Ms Dogan.

Mr Walker said there was a drop in inquiries from overseas investors after the attempted coup, but pointed out that this is an opportunity to buy. Source: The National Back to Index

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‘IMMINENT’ RISE IN DUBAI HOUSE PRICES AS CONDITIONS IMPROVE, NEW REPORT

SAYS

Sunday, 21 August, 2016

Dubai’s residential market is on the verge of an "imminent" increase in prices as a result of improving economic conditions and a relatively stable supply, according to a new Reidin/Global Capital Partners report.

The study, A Tale in Three Markets, says that recent trends in equity and oil markets and the limited supply of new completed units all point to a citywide increase in property prices in the near future.

The report states that there has traditionally been little correlation between oil and property prices, but this has changed in the past six months as concerns over the former’s effect on property prices has amplified their effect on the market.

It also said that there is usually a "modestly positive" relationship between equity markets and housing markets but, despite a 25 per cent increase in the value of the Dubai Financial Market index from recent lows earlier this year, house prices have remained flat.

Sameer Lakhani, the managing director of Global Capital Partners, says that a reversion to historical means is likely to occur in both cases by an increase in house prices – especially as developers have been restrained in terms of releasing supply.

He said that during the last crash, the market faced a "perfect storm" of a complete lack of demand and a huge oversupply.

More than 60,000 units were launched in 2007 and more than 40,000 in 2008. As a result, more than 60,000 units were completed in 2008, and a further 30,000 or so per year continued to flood the market in 2009-10 during a major slump.

In the most recent cycle, launches and completions have been lower. Fewer than 40,000 units were launched at the most recent peak in 2014. This halved to 20,000 last year and is likely to be lower again this year, Mr Lakhani said. The number of completions has remained at – or below – about 20,000 since 2011.

"There’s a perception issue and there’s a data issue," he said. He said the perception of oversupply occurs because master developers often state their intention to deliver thousands of homes when announcing a project, but they have become better at pacing delivery to match demand.

"For example, Nshama has said it is going to be a 30,000-unit community when it is complete. Has Nshama actually launched 30,000 units? No – they’re not even close. They’ve launched, I think, barely 3,000.

"This time around, they [developers] are more responsive. If they see a market that is softening, they pull back not only in terms of the number of units but also the number of units they are completing."

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He said there have been shortages – and price rises – within mid-income communities for a few months and that soon, a citywide increase is likely as demand picks up on the back of an improving economy.

Overall, experts remain divided on the current prospects for Dubai’s property market.

Many, such as JLL’s Craig Plumb and Dubizzle, have said that the market has shown signs of bottoming out, with no significant price declines in recent months. Mr Plumb has stated that a recovery in prices is likely to begin either late this year or by early 2017.

But Phidar Advisory remains pessimistic. It has said that demand for new homes from both investors and owner- occupiers remains weak despite the lower supply. It has predicted that prices are likely to continue declining throughout 2017. Source: The National Back to Index

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UAE CLADDING FIRMS INVEST IN UPGRADES TO PRODUCE MORE FIRE-

RESISTANT PANELS

Sunday, 21 August, 2016

A race between two Indian tycoons in the UAE to open the country’s first factory capable of producing A2- standard fire-resistant panels looks to have been won by Danube Group’s Rizwan Sajan.

Danube Group, which produces the Alucopanel cladding range under licence in the Middle East from its factory in Dubai Technopark, and its competitor Mulk Holdings have said that they have gained certification for their new A2 panels.

But Zohaib Rahman, the division head of Alucopanel Middle East, part of Danube Group, said it will be the first to begin commercial production, which is set to start after a launch event at the Technopark factory this morning.

A2 Standard panels are in the process of being made compulsory under the UAE’s Fire & Life Safety Code. The panels have a stone core, making them much less susceptible to igniting than many existing panels that have a polythene (LDPE) core. These have been highlighted as contributing towards a string of building fires in the UAE.

Alucopanel began trial production of A2 panels early last month, Mr Rahman said. "After the launch is over, we can start commercially."

He said the company has added an extra production line to its factory in Technopark, which began operations last year. It has also ensured both lines are capable of producing A2 panels, which means it will have the capacity to produce up to 4 million square metres of A2 panels per year.

Meanwhile in Sharjah, Shaji Ul Mulk, the founder and chairman of Mulk Holdings, which produces Alubond USA aluminium cladding panels in the emirate, has announced a US$50 million upgrade to its facility which will lead to it having three new lines capable of producing A2-standard panels.

Mr Ul Mulk said that the $50m that it has invested has involved the upgrade of two of its three existing lines (one will be retained for lower-specification B-rated panels for export) and the introduction of a new A2 line. This will give it the capacity to produce up to 6 million square metres of A2 panels each year, making it the biggest facility of its kind in the world, he said.

The factory, which sits on a 50,000-square metre plot, is increasing in size by 50 per cent to 18,000 sq metres and additional facilities will be added, including additives manufacturing for an agent to bind the aluminium panels to the stone cores and a line to produce the substructures into which the panels will sit.

"The entire substructure is also being manufactured within the Sharjah facility. So we will become a one-stop supplier to the industry of the entire system," he said. The upgrade is to be complete in the first quarter of next year, he said.

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Alubond USA also has a factory in Turkey, which produces 2 million sq metres of A2-rated panels per year through which Alubond USA currently supplies the UAE market.

Source: The National Back to Index

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DUBAI DEVELOPER NAKHEEL BRINGS AN END TO DEBT RESTRUCTURING SAGA WITH

DH4.4BN PAYMENT

Monday, 22 August, 2016

Nakheel has repaid a Dh4.4 billion Islamic bond as the developer emerges from a five-year financial restructuring.

The company behind Dubai’s palm-shaped islands said the final trade creditor sukuk payment this week marked the end of a process that began in August 2011.

It represents a major milestone for a developer often associated with both the highs and lows of the emirate’s turbulent property market.

"Officially as of today we have no debt," Ali Rashid Lootah, the chairman ofNakheel, said in Dubai.

The repayment of the sukuk effectively paves the way for the developer to raise more bank borrowings to fund a massive construction programme across the emirate.

"We will be going to the market," said Mr Lootah. "Banks are very much interested in financing our projects. We are in serious discussions with different lenders."

Nakheel had to be bailed out by the government after amassing billions of US dollars in debt during a property boom that turned to bust in late 2008. The developer was at the heart of the ensuing 2009 Dubai World debt crisis, which rocked global financial markets. The bailout, along with Nakheel’s previous debt, was restructured in 2011.

Aidan Birkett, the British financier who led the Dubai World restructuring, recognised that Nakheel was key to the overall success of the plan.

"If you fix Nakheel, you fix the real estate sector and you go a long way to fixing the Dubai economy," he told The National in March 2010.

Almost seven years on from the Dubai World debt crisis, Nakheel has rebounded from its loss-making years, generating a steadily increasing profit that reached Dh4.3bn last year from Dh1.2bn in 2011.

Nakheel has also switched focus from hugely capital-intensive artificial island building to creating less cyclical recurring revenue from shopping malls and hotels.

In addition to the 21,000 homes it has either under construction or planned, its retail project portfolio covers more than 16 million square feet. It also has 14 hotel and serviced apartment projects around the city.

Nakheel is emerging from years of financial restructuring at a time of economic uncertainty in the emirate.

Property sales are in the doldrums and the strong dollar, to which the dirham is pegged, is hurting retail sales and hotel bookings.

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JLL recently revised its forecast for a revival in the Dubai property market to early next year from halfway through this year. Cluttons expects further market softening into next year.

Still, Mr Lootah believes that while the property market is not as buoyant as it was, there are enough people still moving to the emirate to sustain the thousands of new residential, retail and hotel units being built. He expects the market to start moving again soon.

"There was a slowdown after 2014 but there was no panic in the market," he says. "More and more people are moving to Dubai – we see that from our leasing.

"The speculation is not there in Dubai any more, and that is healthier." Source: The National Back to Index

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HANDOVER OF DUBAI PROJECTS DELAYED AS AUTHORITIES GET TOUGH ON FIRE

SAFETY

Tuesday, 22 August, 2016

About "270 or more" building projects across Dubai have witnessed delays to handover as authorities have become much stricter in ensuring that cladding systems meet building and fire-safety standards, according to experts.

New building codes which will demand higher-rated cladding panels are currently being circulated among consultants, and manufacturers of aluminium composite panels (ACPs), but before these are introduced early next year much more focus has been placed on making sure that existing codes are met.

Zohaib Rahman, the division head of Danube Group’s Alucopanel Middle East business, said the handover of projects had been delayed because of problems in meeting a version of the code that became law in 2012, which requested that not only panels but also the cladding systems into which panels are installed are certified. He was speaking at the launch of the company’s new A2 ACP factory at Dubai Technopark.

"The system requirement is from 2012," said Mr Rahman. "The code was there, but many people were saying that they didn’t know. They [Civil Defence] are saying that if you don’t know, it doesn’t mean that the law is not existing."

The Civil defense couldn’t be reached for comment.

David Campbell, the regional director for Thomas Bell-Wright International Consultants which specialises in fire testing cladding systems, said that he did not know the exact figure in terms of projects awaiting approval, but believes that the 270 figure quoted by Mr Rahman "sounds about right". He said that some of the project delays were from Civil Defence. Delays for other projects were from Dubai Municipality, which is looking at the effect of fires not only on ACP-clad buildings, but all external facades.

Moreover, companies are also "scrambling to test systems on projects that are under construction" to make sure they meet the requirements of the new code, which requires that buildings use the higher-rated A2 ACPs.

The new codes include four tests — three covering panels and another entire systems. One of the panel standards being incorporated — EN13501-1 — not only demands that panels are resistant to combustion, but that they also give off less smoke and do not drip even when placed under extreme heat.

Mr Campbell said that tighter inspection of existing codes was understandable.

"You can let every single one of these buildings finish, and the problem will go on for some more years, or you make the decision to look closely at everything. There’s over 1,000 buildings affected by past events, do they want to add to that with another 200-and-something?," he asked.

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"The best thing is to hold them up a bit and check each one. Not all of those buildings are going to be bad — we’ve done some project basis tests and they’ve passed.

"I know it’s affecting some people, and there’s a lot of people crying at the moment over projects being delayed, but to be honest the government is saying ’safety first’."

Mr Rizwan Sajan, chairman of Danube group, said that it began work on upgrading its ACP manufacturing plant (which only opened two years ago) last year in anticipation of the introduction of tougher standards for ACPs.

"I’d been looking at this for a long time, but unless and until the Civil Defence approved it, nobody will buy this product," he said. "This is more expensive than the normal product — about 30 to 40 per cent more."

However, he added that in terms of the overall cost of a building, it would add between 0.5-1 per cent to budgets.

"To save all of the problems and all the calamities we had in the past, I’m sure that any developer would be happy to pay it," he said.

The upgrade of the Alucopanel factory to produce A2 panels is costing about Dh100m. Once work is completed early next year, it will have a capacity to produce 4 million square metres per year of panels.

Sharjah-based Mulk Holdings is also in the middle of an upgrade of its Alubond USA plant, which will be capable of producing 6 million square metres of A2-rated panels when it is completed in the first quarter of next year. Source: The National Back to Index

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THE FIVE IMPORTANT THINGS IN BUSINESS RIGHT NOW

Tuesday, 22 August, 2016

Here’s what you need to know in UAE business and globally on this Monday morning.

• End of the oil bull market

Oil fell after the longest run of gains in four years as Iraq seeks to increase exports amid a global overhang of crude inventories and as Nigerian militants call an end to hostilities. West Texas Intermediate for September delivery, which expires Monday, slid 58 cents to $47.94 a barrel, while Brent for October settlement dropped 80 cents, or 1.6 per cent, to $50.08 a barrel on the London-based ICE Futures Europe exchange this morning. (Bloomberg)

• India unsettled by new bank governor

India bonds and rupee fell on Monday after the government said the Reserve Bank of India deputy governor Urjit Patel would be promoted to governor, a role in which he is expected to hold the line on inflation by keeping interest rates on hold. Patel is due to start his term on September 4 after his appointment on Saturday. (Reuters)

• Dubai property prices set to rise

• London house prices to wane next year

London’s soaring housing market will hit the brakes next year. Values will fall 1.25 per cent, their first annual decline since 2009, as home buyers await the fallout of the UK’s vote to leave the European Union, according to a forecast from Countrywide Plc. Values will rise again in 2018 as a shortage of homes in the capital and low interest rates support prices, the broker said. (Bloomberg)

• Going loopy over transport

Last week we revealed that Airbus is trying to bring flying taxis to the world’s skies. And now DP World, the Dubai shipping company, is also looking to revolutionise travel - although in this case how it moves containers at Jebel Ali Port rather than people after signed a memorandum of understanding with Los Angeles-based Hyper¬loop One. Read more here. Source: The National Back to Index

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FIRST LOOK INSIDE DUBAI OPERA AHEAD OF GRAND OPENING

Tuesday, 22 August, 2016

There’s just over a week to go until Dubai’s opera house opens its doors to an excited public.

And for those who can’t wait any longer for a glimpse inside, help is at hand courtesy of Dr Anwar Gargash, the Minister of State for Foreign Affairs.

He posted this short video on his Instagram account, giving a taste of what is to come at the venue close to Burj Khalifa, which opens on August 31.

Spanish tenor Placido Domingo will perform at the opening gala, with the arts complex set to host about 50 concerts in its opening four months.

These will include a Broadway musical, Indian classical music, ballet, flamenco, orchestral and a magic show.

The opera house is shaped like a dhow, a traditional wooden boat used for centuries in Arabian Gulf waters.

It can seat 2,000 and can be transformed from a theatre to a concert hall and also a venue suitable for banquets and weddings. Source: The National Back to Index

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BRITAIN’S MEDAL HAUL AT THE RIO GAMES

ECLIPSES BREXIT AND HOUSE PRICE WOES

Tuesday, 22 August, 2016

There is nothing like success on the sports field to cheer up a nation, and Britain’s amazing run in Rio has brushed aside the Brexit gloom. A month ago, the Remainers were livid and the Leavers were embarrassed, but not any more. Instead of falling off a cliff, the UK economy is actually doing remarkably well.

Almost every day last week brought a new statistic to confound the gloomsters. British companies were not supposed to keep hiring this summer – but they have. And the employment rate reached a record 74.5 per cent during the three months to June. There are now 31.8 million people at work, 172,000 more than the previous quarter, and unemployment, at 4.9 per cent, is the lowest in 11 years.

And people were not supposed to go on spending, yet retail sales rose 5.9 per cent last month compared to a year ago. That doesn’t happen in a recession, that’s for sure. Surveys of household expectations have risen in the past month, when they were supposed to have collapsed (they did, briefly, last month but recovered this month).

Economic forecasts, slashed at the end of June, have also begun to revive. In the wake of the Brexit vote, the Bank of England cut its growth projection for next year from 2.3 per cent to 0.8 per cent, which was the biggest cut in its annual forecast since 1993. Yet last week, Moody’s, which downgraded British debt in the wake of Brexit, said it is forecasting 1.2 per cent growth next year. Few other countries in Europe will do that.

The Nobel Prize-winning economist Joseph Stiglitz, much quoted by the Remainers for his staunch opposition to Brexit, has now concluded that "the UK isn’t likely to be much worse off and potentially could be better off" as a result of leaving the EU.

I confess that I was among the Remainers, who were almost in despair at the end of June. But with share prices higher now than they were pre-Brexit, commodities recovering, oil back above US$50 (20 per cent up in a month) and Team GB winning as many gold medals as Germany and France combined, things look a bit different. I suspect they will look different again in the autumn, when a more realistic picture emerges, but for the moment we are doing just fine.

That more realistic picture may already be emerging in the London property scene, which for many years has been the great investment destination for every kind of money in the world – oil money, hot money, Russian oligarch money, Chinese, Indian, Malaysian and Japanese money and, after the Euro crisis in 2010, Greek, Spanish and Portuguese funk money. The result has been residential property trading at levels beyond the dreams of those who bought even a decade ago.

That seems to have come to an abrupt halt. One story doing the rounds last week has sent shivers through the property market. An intern at one of the big property investment companies, simply doing some research, called an estate agent to check the price of a home for sale at £55 million (Dh264.4m). An hour later, the agent called back to say he had spoken to his boss "and because it’s you, we’re prepared to take £5m off the price". The bemused intern politely declined and an hour later the estate agent called back again. "You’re driving a hard bargain," he said. "But because it’s you, we’ll take another £2m to £3m off." So without even trying, the intern got £7m to £8m off the price in just a few hours.

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Stories of that kind abound. The asking price of a property on Charles Street in Mayfair has been cut from £22.5m to £19.5m and its owner is said to have entertained offers in the mid-teens. Higher stamp duty had already severely hit the top end of the market before the Brexit vote, but there seems little doubt that the effect has been multiplied since. Capital and Counties Properties has shaved £200m, or 14 per cent, off the valuation of its Earls Court development where it is building 7,500 high-priced homes.

In currency terms, British assets are 18 per cent cheaper in American dollars, 12.8 per cent in Malaysian ringgits, and 17.9 per cent cheaper to a Hong Kong buyer than they were a year ago. Add the big discounts, ranging up to 50 per cent in some cases, and London properties are suddenly looking a lot cheaper than they did a year ago.

The only problem is there are not many buyers. Maybe now is the time? Source: The National Back to Index

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NEW YORK TOPPLES LONDON FROM PROPERTY PINNACLE AS BREXIT DETERS

FOREIGN INVESTORS

Tuesday, 22 August, 2016

New York has knocked off London as the world’s premier city for foreign investment in commercial property due to fears the vote to leave the European Union would diminish the British capital’s appeal as a global financial centre.

Data on cross-border property transactions indicate greater unease among investors prior to the referendum, which voters unexpectedly approved on June 23, than had been captured in the capital markets prior to the vote.

Cross-border capital flows into London property fell 44 per cent in this year’s first six months from the same period in 2015, according to data from brokerage Jones Lang LaSalle.

Property investors feared Britain’s exit from the EU would erode London’s role as a premier financial centre and reduce the value of their investments, the majority of which are office buildings.

Norway’s sovereign wealth fund, one of Britain’s largest foreign investors, said it cut the value of its UK property portfolio by 5 per cent because of the vote.

"It would be fair to say that London bore the brunt of Brexit fears," said David Green-Morgan, director of global capital markets research for JLL in Chicago. "The big fear is that London will lose a lot of the financial service jobs that has made it such a global financial centre."

New York gained US$10.3 billion in cross-border investments in the first six months of the year compared with the $6.9bn that London took in, data from JLL show. In the same year-ago period, London garnered $12.4bn while $11.3bn flowed to New York, according to JLL.

The 8.9 per cent decline in cross-border investment New York experienced is in-line with the roughly 10 per cent decline major cities experienced this year when compared to 2015, a stellar year in property investment around the world.

Concerns the UK market was coming toward the end of the cycle amid signs pricing was reaching unsustainable levels only partially explains the drop-off in investment flows to Britain, the largest decline since the financial crisis.

It is now obvious that people were becoming increasingly nervous about the Brexit vote, Mr Green-Morgan said.

Britain is viewed as more investor friendly than the United States because of beneficial tax arrangements. However, underlying property fundamentals – strong demand and not too much supply – must be in place to attract capital, as now is the case for the US office and multi-family property sectors.

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The uncertainties created by Brexit has made investors more cautious about Britain and to a lesser extent about Europe, said Ken McCarthy, a senior managing director and regional research director for Tri-State New York at

Cushman & Wakefield. Negative interest rates across the euro zone also are driving investment to the US, he said.

"You’re going to see people look to redeploy their capital elsewhere and the big one will be the US. Most likely, given that it is overseas capital, it will focus on gateway cities," he said, citing New York, Boston, Washington, Los Angeles and San Francisco. Source: The National Back to Index

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BR OOKFIELD AND DIFC AGREE ON ARBITRATION OVER ALLEGED GATE

BUILDING DEFECTS

Wednesday, 23 August, 2016

The Dubai International Financial Centre (DIFC) has agreed with the developer Brookfield Multiplex to go to arbitration in the DIFC Courts over alleged defects in the construction of the Gate building, the heart of Dubai’s financial centre.

The agreement, contained in a consent order granted by the DIFC Courts this month, heads off a legal confrontation between the two parties.

The DIFC originally took action in non-DIFC courts in the jurisdiction of the Emirate of Dubai after a slab of marble fell from the Gate in October, seeking the appointment of an expert to inspect and report on the Gate.

It did so because the Gate was built in 2003, before the DIFC came into existence as a legal jurisdiction the following year.

In the order made by the DIFC Courts, both parties "agree that the seat of any arbitration arising out of the [2003 deal that led to the Gate construction] should be the DIFC, and any arbitration should be governed in accordance with DIFC and London Court of International Arbitration rules".

Brookfield and the DIFC have agreed to hold off claims and applications against each other until arbitration is agreed.

In its original case, the DIFC claimed that Brookfield "committed irregularities in technical and engineering works, which caused substantial damage to the building and endangered the safety of the building and its workers". Source: The National Back to Index

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DUBAI ’S DAMAC AWARDS DH967M CONTRACT TO BUILD AYKON LONDON

ONE TOWER

Wednesday, 23 August, 2016

Damac has awarded a £200 million (Dh968m) contract to Australia’s Lendlease to build its Aykon London One tower amid a frenzy of high rise construction in central London.

The building has been designed by the architect Kohn Pedersen Fox and the interiors have been created in partnership with Versace Home, with which Damac has an existing relationship, having completed Versace Home- branded residences at Al Jowharah Tower in Jeddah.

The project will contain 450 residential units, 90 of which have been set aside as affordable homes, in two interlinking towers. The 50-storey north tower will contain 360 luxury units with a starting price of £900,000, while the south tower will contain the 90 affordable units, with four storeys of offices above. There will also be a sky bridge between the two towers with a roof garden at level 24. Construction will be completed in 2020.

The towers overlook the south bank of the River Thames and sit in the Nine Elms district, close to the former Battersea Power Station building, which is also being redeveloped.

"Aykon London One is a landmark project and our first major international development outside of the Middle East," said Hussein Sajwani, the chairman of Damac Properties.

"We have great confidence in the London marketplace and this project is already proving to be highly desirable to customers and investors from within the UK, as well as other parts of the world." A recent report on London’s property market by adviser London Central Portfolio (LCP) said the number of new apartments being sold was in decline at a time that construction was accelerating.

It stated that the amount of new apartments in the pipeline had increased by 20 per cent since 2013, with 106,123 new units under development. Applications for permission to build new homes were also up by 27 per cent, with plans for another 111 high-rise towers awaiting approval. Most new homes are being built in two "mega-clusters" – Tower Hamlets and the Battersea-Nine Elms area.

There are 18,665 homes being built in Battersea-Nine Elms, where prices have fallen by about 8 per cent since 2014, compared with an increase of 23 per cent for London as a whole. In inner London, the number of new homes sold so far this year is 43 per cent lower than in the same period last year.

Naomi Heaton, the chief executive of LCP, said: "In light of the plethora of tax hits over the past few years, possibly exacerbated by the uncertainty of Brexit, it appears foreign investors, the majority buyers of new developments, may finally be turning away."

However, Damac said the first phase of the Aykon London One project, which comprised about 40 per cent of the total rooms available, had sold out, and that the launch of the next phase of units was imminent.

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A spokesman for the company said London remained an attractive location for overseas investors, who now see value following the recent decline in value of the British pound. The spokesman added it was actively seeking new opportunities in London – either single sites for apartments or larger sites for community-style developments in the Greater London area. Source: The National Back to Index

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DRAKE & SCULL INTERNATIONAL SHARES FALL SHARPLY IN DUBAI AS IT REVIEWS

BUSINESS ACTIVITIES

Wednesday, 23 August, 2016

Shares in Drake & Scull International (DSI) opened sharply lower on Tuesday morning, after the construction firm said it was reviewing business activities and seeking strategic investors after slipping into the red during the second quarter.

DSI shares opened more than 2 per cent lower, after Reuters reported that the company has appointed lawyers to hold discussions with the Securities and Commodities Authority, the UAE stock market regulator, on the possibility of bringing in strategic investors.

The construction firm has been hard hit by the economic slowdown across the Arabian Gulf in the wake of lower oil prices, particularly in its core market of Saudi Arabia.

DSI earlier announced a second quarter loss of Dh207.6 million, compared to a profit of Dh10.3m for the same period last year.

Chief financial officer Kailash Sadangi told Reuters that the company had made a decision to withdraw gradually from its civil engineering business in Saudi Arabia, and had discussed with advisers the possibility of a further business review in recent weeks.

DSI’s shares have fallen about 13 per cent during the past two weeks. Source: The National Back to Index

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LOW OIL PRICES CONTINUE TO BITE INTO ABU DHABI HOUSING RENTS

Thursday, 24 August, 2016

Housing rents in Abu Dhabi fell 2 per cent in the three months to the end of July as the global fall in oil prices continued to bite.

According to new figures from the property data company Reidin, average rents fell 0.61 per cent in the month of July.

Rents in the capital now stand at the same levels they were two years ago and about 1 per cent lower than a year ago.

Reidin, whose data is used by many of the big property brokers in the UAE such as JLL and CBRE, said that average rents in Dubai fell by a similar rate, down 0.62 per cent in July and down 1 per cent during the three months.

Unlike in Abu Dhabi, rents in Dubai have been falling for the past two years and now stand 4 per cent lower than they did a year ago and 5 per cent lower than they were two years ago, Reidin added.

Last week, data from property portal Bayut.com found that asking rents for the apartments listed on its website in both Abu Dhabi and Dubai were falling steadily.

Bayut.com reported that in the year to the end of July this year, rents for studio apartments in Abu Dhabi fell 5 per cent to Dh56,000 while average rents for one-bedroom apartments sank 6 per cent to Dh91,000.

Average rents for two-bedroom apartments in the capital fell 4 per cent over the past year to Dh129,000.

In Dubai, Bayut.com said that rents for studio apartments fell 6 per cent year-on-year to Dh57,000 while average rents for one-bedroom apartments in the city fell 7 per cent to Dh92,000.

Average rents for two-bedroom apartments in Dubai fell 3 per cent in the year to the end of July to stand at Dh145,000. Source: The National Back to Index

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DH2.9 BILLION GRANT TO KICK-START BUILDING OF BAHRAIN’S NORTH CITY

Thursday, 24 August, 2016

A major new city that will eventually house a population of up to 90,000 people in affordable accommodation in Bahrain looks set to finally go ahead after the project gained a Dh2.9 billion grant from the Abu Dhabi Fund for Development (ADFD).

Al Madina Al Shamaliya, or North City, project is set to be built on reclaimed land to the north of the island, close to Budaiya. It is being built in phases, with the first worth Dh374 million set to start shortly now that funding has been agreed. It will provide infrastructure services to support building work on Islands 13 and 14.

This will be followed by a second, Dh2.56bn phase that will support construction of the first 2,694 homes on the site.

ADFD is providing the development grant to Bahrain’s ministry of housing, which is overseeing the development of North City. It said that the project will be part of a series of interlinked, man-made islands that are, according to the kingdom’s minister of housing, Basim bin Yacob, "part of a much broader plan to build 40,000 new homes for our people".

ADFD’s funding is part of an overall aid package worth US$10bn being provided by four Gulf states.

The UAE, Saudi Arabia, Kuwait and Qatar each pledged to provide $2.5bn to Bahrain in 2011.

ADFD is overseeing the UAE’s investment.

Already this year, the UAE has provided a grant worth Dh3.73bn to help fund the expansion of Bahrain’s International Airport, just after a contract to build a new terminal was awarded to a joint venture between Arabtec and Turkey’s TAV Construction.

Mr bin Yacob said that the UAE was "a committed friend and partner" in Bahrain’s development efforts.

"We are hugely appreciative of this funding, which will help us [relieve] some of our chronic housing shortages here in Bahrain with the North City project. I hope that such economic and social development, such as with our new airport, will be a catalyst for national and regional growth."

Mohammed Saif Al Suwaidi, the director-general of ADFD, said: "The North City project is an important project which will be an economic boost to Bahrain through new construction and opportunities as well as easing urgent overcrowding issues."

The project has been subject to some delay, with tenders for initial infrastructure packages floated two years ago. However, work has progressed, with Bahrain-based consultancy firm SSH being appointed as contract manager and site supervisor for the infrastructure and bridge works in February this year.

It said the infrastructure works involved installing over 5.5 kilometres of roads and utilities such as water, drainage, irrigation and telecoms networks, as well as both road and pedestrian bridges connecting the islands.

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Source: The National Back to Index

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ORASCOM SECOND-QUARTER PROFIT

SLIDES

Thursday, 24 August, 2016

Orascom Construction reported a 22 per cent year-on-year decline in second-quarter pro¬fit amid a tough Saudi market, the Egypt-based contractor said on Wednesday.

Net profit plunged to US$26.4 million from $34m a year earlier, the company said.

Revenue remained largely flat at just over $1 billion.

Orascom, whose shares are listed on Nasdaq Dubai, said that the Saudi Arabian market remained particularly challenging, with chief executive Osama Bishai stating that it was continuing "to take prudent measures" to limit its exposure to the kingdom.

"Our focus in all Mena markets remains on quality projects where we have a competitive edge and are comfortable in the source of funding," Mr Bishai said.

Revenue for the first six months of the year increased by 6.5 per cent to almost $2bn, and net profit increased by 24 per cent to $49.4m.

Half of the revenue earned by the company during the first six months came from the Mena region and the other half came from work in the US.

Of the 50 per cent earned in the region, 44 per cent was generated in Egypt.

The company reported a 4.8 per cent year-on-year increase in its backlog to $7.5bn, or $9.5bn once its 50 per cent stake in contractor Besix is accounted for. New projects won include a joint venture deal to build three tunnels across the Suez Canal and new work on the Cairo ¬Metro programme.

Mr Bishai said the firm had made "steady progress" throughout the first half of this year, and highlighted the diversity of projects it has secured in Egypt, which "reflects our position as an integral player in the development of Egypt’s infrastructure.

"While the power sector in Egypt led our Mena backlog growth last year, our varied skillset and strong market presence have allowed us to capitalise on increased spending across other sectors," he said.

The value of new contracts awarded to Orascom dropped by 16.5 per cent year-on-year to $2.7bn, but in a note published by Egypt-based investment bank EFG Hermes, its analysts said that the level of new awards "surprised positively" given the fact that only $510m was awarded in the first quarter. It had esti¬mated new awards of $650m, but the award of the Suez Canal tunnelling contract has added $900m to $1bn, according to analysts’ estimates.

Egypt now represents 63.5 per cent of the company’s backlog, the US around 26 per cent and Saudi Arabia 4.6 per cent.

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Source: The National

Back to Index

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QATAR INVESTMENT AUTHORITY BUYS 9.9 PER CENT STAKE IN EMPIRE STATE

BUILDING OWNER

Thursday, 24 August, 2016

Qatar Investment Authority (QIA), the Middle Eastern country’s sovereign wealth fund, bought a near 10 per cent interest in Empire State Realty Trust, owner of New York’s Empire State Building, as it boosts investments in North America and the Asia Pacific region.

The fund acquired 29.6 million newly issued Class A common shares at $21 each and will have a 9.9 per cent economic and voting interest in the real estate investment trust. The acquisition translates into a new $622 million investment in Empire State Realty, the company said in a statement on Tuesday.

The QIA "is re-balancing its geographical exposure towards the US and Asia because they were over exposed to Europe at one point," Fadi Moussalli, Mena head of International Capital Group at JLL, said. "When Qataris invest in the US they reduce their currency exposure because their riyal is pegged to the US dollar, which isn’t the case with European investments."

The fund has been adding to its real estate assets this year. In June it agreed to buy Singapore’s Asia Square Tower 1 from BlackRock in Asia Pacific’s largest single-tower sale, according to JLL.

QIA has invested about $40 billion in property around the world, with about $22bn in office transactions and $7.5bn for hotels, including the 2014 purchase of the St Regis Rome, according to Real Capital Analytics.

For Empire State Realty, the investment will help it "plan for the future, now with more capital and one of the most sophisticated and reliable real estate investors in the world as our partner," John Kessler, the company’s president, said in the statement.

Empire State Realty didn’t say how it will deploy the money raised. Chief financial officer David Karp said that the company recently expanded its revolving credit line to $1.1bn. Those funds, combined with Qatar’s infusion, will enhance the company’s "ability to drive long-term value" for shareholders, he said.

Empire State Realty Trust has been a publicly traded REIT since October 2013, following two years during which Empire State Building supervisors Peter Malkin and his son Anthony battled with some of the tower’s longtime investors over whether going public was in their interests.

The shares closed yesterday at $20.52, up 14 per cent this year. The company owns 10.1 million square feet (938,000 square meters) of office and retail properties, mostly in Manhattan, with the rest in New York’s northern suburbs.

Last October, Qatar Investment Authority and Brookfield Property Partners formed a joint venture on Manhattan West, an $8.6bn mixed-use project on New York’s far west side. QIA, which was established in 2005, is the world’s

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ninth-largest sovereign wealth fund with assets valued at $335bn, according to rankings by the Sovereign Wealth Institute.

More investments in US real estate are sure to follow, JLL’s Moussalli says. "The US real estate market is offering fantastic opportunities for equity-rich investors right now." Source: The National Back to Index

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DUBAI’S DRAKE & SCULL SAYS IT HAS NOT

HIRED ADVISER TO SEEK INVESTMENT

Thursday, 24 August, 2016

Drake & Scull has denied that it has appointed "any legal adviser in connection with bringing in a strategic investor or issuance of mandatory convertible bonds" with a view to raising new capital.

The Dubai-based contractor issued a statement to the Dubai Financial Market in response to a story published by Reuters on Tuesday, which stated the company was looking for advisers to review its business and find strategic investors.

In the statement, the contractor said that it appoints advisers "to review strategic operations and provide financing solutions" as part of its normal business, but had not appointed a specific legal adviser in relation to bringing in more investment.

Last week, Drake & Scull reported a Dh207.6 million loss attributable to its parent company for the second quarter of 2016, which it blamed on project cancellations and one-off provisions, citing project delays and cancellations that have been brought on mainly by clients in Saudi Arabia. Revenue for the quarter also dropped by 37 per cent year-on-year to Dh805m.

A note accompanying its second quarter results from auditors PwC stated that Drake & Scull had a negative cash balance of Dh300m as of June 30, and warned that if it was unable to generate sufficient cash flow within the next 12 months it "may not be able to meet its financial obligations as they fall due".

The company still has net assets of Dh1.9 billion and in a statement accompanying its results, chief executive, Khaldoun Tabari said that despite challenges, the business remained "operationally and financially robust".

"Due to our longstanding partnership with major international and local banks, we continue to retain strong lines of credit and secured access to funding to deliver our ongoing projects backlog," he said.

"We are in the process of embarking on a new strategy to reposition ourselves as a leader in the market. We will also initiate fundamental changes to our group and leadership structure which will be supplemented by a reorganisation and realignment of senior management roles." Source: The National Back to Index

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LONDON’S BBC TELEVISION CENTRE TO BE PITCHED TO DUBAI PROPERTY BUYERS

Thursday, 25 August, 2016

The building where classic television shows Top of The Pops, Dad’s Army, Blue Peter and Fawlty Towers were recorded is being converted into flats and marketed in Dubai next month.

BBC Television Centre at Wood Lane, White City, W12 7RJ – an address which still comes tripping off the tongue of millions of Brits growing up writing stamped addressed post cards to Record Breakers, Blue Peter competitions or pleading letters to Jim’ll Fix it – is to be exhibited at Cityscape Global.

The historic building, which was the headquarters of the British Broadcasting Corporation (BBC) between 1960 and 2013 and appeared as the backdrop for many of the broadcaster’s most well known programmes, is currently being converted into 800 new homes as well as cafes and restaurants, an independent cinema, office space for up to 5,000 workers, and a private members’ club.

A first phase of 432 homes is due to be completed in 2018.

Property developer Stanhope bought the 14-acre site for £200 million in 2012 on a 999-year lease, after the BBC decided to save money (an estimated £33m a year) by selling off most of the site and moving many of its operations to Manchester.

Despite at the time promising a "full scale disposal" of TV Centre, in 2014 it emerged that the Beeb will still lease some of the studios in the newly renovated building once the work has been completed. This means that buyers will be able to live above active BBC studios and may even get to brush shoulders with TV stars coming to record new shows

Stanhope promises that the AHMM-designed building will include lots of other facilities including a gym, residents’ lounge with private screening room, private courtyard, gardens and a rooftop restaurant. And the building is located opposite Westfield London, Europe’s largest shopping mall.

Prices in the new development don’t come cheap. The ones being marketed in Dubai range from £700,000 for a one-bedroom apartment to £8m for a penthouse.

But the developer is hoping that a fall in the value of the pound following Britain’s referendum vote to leave the European Union earlier this year will encourage investors from the Middle East to buy.

Q&A with Stanhope’s sales and marketing director, Peter Allen.

How many properties had you sold to customers from the GCC before the Brexit vote?

There were seven sales at Television Centre from buyers in the GCC before the Brexit vote, which came via the London offices of our joint agents, Savills and Strutt & Parker. Five of these sales came from Dubai and one from both Jordan and Saudi Arabia.

How many have you sold to GCC buyers since the Brexit vote?

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Since the Brexit vote, we’ve sold one unit to a buyer from Saudi Arabia.

How much cheaper are your properties in real terms for dollar buyers since the Brexit vote?

In real terms, our scheme is 10 per cent better value today than it was before the Brexit vote – so there is a clear opportunity for GCC investors to capitalise on this fact.

How much demand are you seeing from GCC buyers looking forward?

We’ve definitely seen a recent spike in enquiries from GCC buyers and have discussed the development at length with our local agent partner in Dubai, Elysian Global, which approached us via Strutt & Parker. This increased demand and the sales completed to date have given us the confidence that Television Centre resonates with buyers in the region. We’re really excited to introduce our product in person to the GCC market for the first time at Cityscape.

How much demand are you seeing from British buyers post Brexit?

We have been very encouraged. There was a period of uncertainty immediately after the Brexit vote but that is now passing we are returning to ‘business as usual’. Source: The National Back to Index

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HLG CHIEF RELEASED FROM CUSTODY AS

HABTOOR EXITS JOINT VENTURE

Friday, 26 August, 2016

The chief executive of Habtoor Leighton Group (HLG) who was arrested in Dubai this month has been released without charge.

His release coincided with the exit of Al Habtoor Holding from the joint venture construction company behind some of Dubai’s biggest projects — including one that was billed as the world’s largest building.

José Antonio López-Monis, the chief executive and managing director of the contractor was arrested on August 17. No further details on why Mr López-Monis had been detained were made public.

His detention came to light after CIMIC Group, which has a 45 per cent stake in the contractor, issued a statement to the Australian Stock Exchange.

The company issued a second statement on Friday morning confirming Mr López-Monis has been released without charge.

At the same time CIMIC said it had entered into a binding agreement with its two joint venture partners in HLG which "will enable one of the shareholders, Al Habtoor Holding LLC to transfer its shares to another partner Riad Al Sadik, subject to execution of final documentation."

Mr Sadik is the current chairman of HLG who along with Khalaf Al Habtoor, founded Al Habtoor Engineering Enterprises in 1970.

The withdrawal of Al Habtoor from HLG marks the end of a partnership that was formed in 2007 when Al Habtoor Engineering merged with Gulf Leighton, part of CIMIC Group — Australia’s biggest contracting group.

Over a decade the pair delivered high profile projects countrywide but came unstuck on the $2.4 billion Dubai Pearl launched in 2009.

According to the HLG website, the development was expected to be the largest single building in the world covering some 20 million square feet spread across four 73-storey mixed-use towers.

But seven years after its launch, construction work has long since stopped with only the partially constructed concrete frames of the buildings visible from the surrounding roads.

HLG could not be reached for comment on Friday. Source: The National Back to Index

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REGION’S WEALTHY TO CONTINUE DIVERSIFICATION INTO OVERSEAS

PROPERTY

Saturday, 27 August, 2016

The price of oil may have fallen but Middle Eastern property investors are set to continue to pump billions of dirhams into big-name properties overseas, despite slowing global growth.

Analysts predict that although property prices locally are falling, the amount of money raised by sovereign wealth funds, private companies and high net worth individuals in the region to spend on bricks and mortar in Europe and North America is set to rise this year.

Data on cross-border property transactions from JLL shows that the amount of money spent by Middle Eastern investors on foreign property in the first half of this year stood at about US$9 billion, slightly higher than the same period a year ago.

Other than the Middle East, the US and Canada were the only regions to show increases in the amount of cross- border property investment during the first half of the year as worries over Brexit, an economic slowdown in China and recessions in Brazil and Russia scared off investors elsewhere.

"Middle Eastern investors are usually interested in diversifying risk so we expect to continue to see them putting more money into overseas property assets," said Craig Plumb, the head of research at JLL’s Dubai office. "The low cost of oil may mean that they are getting less income but generally they are cutting back in other areas."

On Thursday, Qatar’s sovereign wealth fund paid US$622 million for a 10 per cent stake in the company that owns New York’s Empire State Building as part of a plan to boost its North American assets.

Qatar Investment Authority (QIA), which already owns stakes in Europe’s tallest building, The Shard, the Canary Wharf Estate, Harrods and the Olympic Park in London, said that it had bought a 9.9 per cent stake in Empire State Realty Trust, acquiring 29.6 million shares in the group at US$21 each.

The high-profile property purchase is expected to be the first of many from QIA, which last year opened a New York office as the sovereign wealth fund seeks to grow its North American portfolio and diversify away from the UK and Europe, where it already has a large exposure.

JLL reported earlier this year that Britain’s decision to leave the European Union in June has prompted foreign investors, including those from the Middle East, to eschew their usual investment choice, London.

It said that cross-border capital flows into London property fell by 44 per cent in the first six months of the year compared with the same period a year earlier as investors worried that Brexit would force banks and other financial institutions to move their headquarters away from the City of London leaving thousands of square feet of office space empty.

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CBRE also reported that London’s influence as an investment destination is waning. It said that the city received 32 per cent of the cash spent on property by Middle Eastern investors in the first quarter of 2016, down from 43 per cent in 2013.

With demand falling and the price of the pound at historic lows, some investors are already cutting the value of their UK assets. Earlier this month, the world’s largest sovereign wealth fund, Norway’s Global Government Pension Fund, said it cut the value of its UK property portfolio by 5 per cent because of the vote.

According to Knight Frank, average house prices in the upmarket district of Knightsbridge fell by 7.3 per cent in the year to the end of July – their biggest annual falls in nearly seven years – on the back of Brexit uncertainty and tax hikes.

"The pound is particularly low right now and Middle Eastern investors tend to be opportunistic so if they felt that there was value to be had in London at the moment – especially for private individuals buying large houses in prime London addresses – then we could well see some investment," Mr Plumb added. "However, for sovereign wealth money we expect to see more of a switch towards the US." Source: The National Back to Index

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MURRAY & ROBERTS GROUP TO CLOSE ITS CONSTRUCTION FIRM

Saturday, 27 August, 2016

The South African construction firm Murray & Roberts, which helped transform the UAE skyline by raising landmarks such as the Burj Al Arab, is to quit the building sector.

The surprise announcement was made this week as the 114-year-old company released its interim results for the six months to December 31.

The Johannesburg-based company is to focus on three core sectors in future – underground mining, oil and gas and power and water said Henry Laas, the chief executive. The move marks the exit of a company that was an integral part of the UAE’s construction charge since the 1990s.

"The decision to dispose of the infrastructure and building businesses supports the group’s long-term strategy to focus its business on the global natural resources markets, and follows an extended period of careful planning and consideration," Mr Laas said.

The company has been saying for some time now it wanted to exit from construction, which it no longer considers to be central to its business.

"Nothing obvious comes to mind, although they have been describing their building and infrastructure business in South Africa and the Middle East as noncore for some time," an unnamed analyst told Business Daynewspaper in Johannesburg.

Founded in 1902, the company had in recent years become closely associated with the UAE’s surging construction drive. The Burj Al Arab, which it built in collaboration with the Al Habtoor Group, was the Murray & Roberts’ first project award in the UAE and it oversaw building the main structure and interior fit-out of the 7 star, suites-only hotel.

Completed in 1999, the Burj Al Arab set the pace for many architecturally significant buildings that have come to dominate the UAE’s profile.

In the years since then, Murray & Roberts has grown throughout the GCC with its headquarters in Dubai and operations in Abu Dhabi, Qatar, Saudi Arabia, Bahrain, Oman and Kuwait.

Murray & Roberts has also participated in constructing landmarks such as the Shangri-La Hotel and Goldcrest Views towers in Dubai.

It built the Al Attar Business Tower and participated as a subcontractor in The Palms. Murray & Roberts is also behind the raising of the 33-storey National Bank of Abu Dhabi.

In South Africa, the company was for many years the country’s largest construction firm, building the Cape Town stadium for the 2010 Football World Cup, for instance.

However, the group has struggled with a fall in commodity prices and a softening construction sector in the Arabian Gulf. It has also had to contend with outstanding legal claims such as a continuing dispute relating to its

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participation in the construction of Concourse B at Dubai International airport. The group is still trying to settle an outstanding payment for the work, for an undisclosed sum.

At the results presentation, Mr Laas said that total outstanding claims came to two billion rand (Dh51m), which included the amount it was demanding from Dubai International. This figure also covered another dispute relating to the construction of a light rail network in South Africa.

The group reported first-half revenue of 15.3bn rand, down from the 15.9bn rand in the corresponding period last year.

Mr Laas said that oil and gas and underground mining had traditionally contributed 80 per cent of group profit. The company would now focus on oil and gas in Australasia, the US and Canada as well as underground mining in Africa, Australia, Canada and the US.

Outstanding construction work in the UAE will be completed by next year, a company spokesman said. Source: The National Back to Index

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SME PROFILE: BUILDING ENGINEERS FIND THEIR NICHE IN DUBAI

Saturday, 27 August, 2016

Structural engineer Matthew Esther likes to look out of his window, to the offices where his competitors are hard at work.

For Mr Esther, a Briton who set up the Dubai structural-engineering firm Webb Yates & Esther last year with Mohammed Al Dah, an Emirati and fellow structural engineer, the fact that there are other small companies concentrating on such specialised aspects in Dubai is a complete change from the situation just a few years ago, when only big multinationals offered these services.

"We are not unique," Mr Esther says. "There are a number of practices, both in terms of architecture and engineering, that have sprung up since the recession that are viable in standing on their own two feet, feeding a niche in the market that won’t even appear on the radar of the larger practices."

Experts say the UAE’s construction market will grow at a faster pace than the wider economy. According to BMI Research, the value of the construction industry is set to increase to Dh181 billion next year from about Dh162bn this year, reflecting growth of 6.6 per cent – well ahead of the IMF’s forecast of 2.6 per cent for the wider economy.

And eight-strong Webb Yates & Esther is just one of a flurry of new start-up practices by building specialists who have either been laid off or are attempting to capitalise on a swath of smaller-scale property development around the city.

"We don’t have the capacity to do the really big scale metro projects," Mr Al Dah says. "But if you wanted to do a project of three villas in Jumeirah and needed a structural engineer, then that would suit us. It’s a sign the market in Dubai has matured that there are even these sort of projects being built."

Set up by Mr Esther, a former country director for engineering company Meinhardt, and Mr Al Dah, a director for technical affairs at Dubai Land Department, Webb Yates & Esther is part owned by the partners of British structural-engineering practice Webb Yates.

The company has completed a 30,000 square metre housing project in the UAE and is working on a couple of hotels in the region, as well as a scheme in the Seychelles.

As structural engineers working closely with architects to help design technical aspects of a building, such as the amount of wobble allowed in the floors, the pair have found it an uphill task getting through the red tape in Dubai.

In accordance with Dubai Municipality rules the company has had to register as "architects of record" and will have to employ an architect even though it only wants to do structural-engineering work. "It’s just one of the nuances of doing business in the region," Mr Esther says. "In terms of the niche where we place ourselves in the market, we’re not heavy into engineering. We’re in that grey area between engineering and architecture."

But the pair say not competing with architects is helping them win work in the Middle East.

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"The fact that we don’t compete with architects is one of our strengths," Mr Al Dah says. "Mainly the architects get the work. They put together bids to do work. When they win a bid they need to set up a design team very quickly.

They can’t hire ten structural engineers, three mechanical engineers, etc. Instead they will call Matthew up and say ‘We have just got this residential building, we need help’. We can hire people if we need to, but we know we will have a number of projects where these requirements come up."

Being partially owned by a British practice with a 10-year track record and a team of more than 40 people also gives Webb Yates & Esther a chance to get on the radar of clients, they say.

"If you look at a lot of the specialists across the world, let us say you look at tall building experts, bar very few companies, the upper echelon are actually small to medium-sized practices. At that level of expertise size is not that much of a deciding factor," Mr Esther says.

"The selling point for these big multinationals is that they can take on all aspects of a big project because they have all the specialists somewhere in the world. But if there’s a brand that you want to launch, something where the attention to detail or particular architectural gem is how you want to push your brand, the hotel specialist might be a smaller practice."

And setting up with a Dubai start-up gives its British cousin access to fast-growing construction markets.

"As a traditional UK practice their potential for growth is probably limited," Mr Esther says. "Within the UK market the growth is steady but fairly flat. But the potential for growth in an emerging market is a lot more significant." Source: The National Back to Index

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