news brief 16 - asteco.comsmall bathroom, and a modest living room – large enough to relax, with a...

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IN THE MIDDLE EAST FOR 30 YEARS

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 16 SUNDAY 19 April 2015





REAL ESTATE NEWS UAE

REVEALED: WHICH NATIONALITY BUYS PROPERTY FOR CASH IN UAE UAE HOUSING MARKET IS MATURING, SURVEY FINDS

PLOT THICKENS WITH LAND BANK COMPANIES

DUBAI DUBAI METRO ROUTE 2020 PROPERTY HOT SPOTS: WHEN WILL RENTS

RISE? NEW DUBAI PROJECT TO TRANSFORM DEIRA INTO JBR-LIKE DESTINATION SHAH RUKH KHAN-ENDORSED DUBAI PROPERTY LAUNCH PRICES LOWEST

YET DUBAI’S MORTGAGE DEALS TAKE A DIVE FROM Q1-2014 PEAK

DUBAI'S DEVELOPERS NEED TO SHED TOP-HEAVY APPROACH THE NEST AT AL BARARI IN DUBAI PROVIDES GREEN DREAM LIVING AMID

ARID DESERT ARABTEC CHAIRMAN AND FOUNDER SET TO LEAVE AFTER BOARD

OMISSION DUBAI’S EMAAR SHARES HIT THREE-MONTH HIGH AS CHAIRMAN

MOHAMED ALABBAR STAYS ON DUBAI LEADS REGION IN HOTEL ROOM CONSTRUCTION

EMAAR PROPERTIES PROFIT ON TRACK FOR $1 BILLION MORE SIGNS OF SLOWDOWN IN DUBAI PROPERTY MARKET

RULES NEEDED ON YACHT AND LUXURY CAR GIMMICKS TO INVESTORS IN DUBAI PROPERTY, SAYS EMAAR CHAIRMAN

COURTYARD BY MARRIOTT IN CENTRAL ABU DHABI OFFERS MID-RANGE VALUE AND SUBLIME WAFFLES

ABU DHABI NEW SAADIYAT ISLAND VILLA COMMUNITY CLOSE TO GOLF COURSE

LAUNCHED





COURTYARD BY MARRIOTT IN CENTRAL

ABU DHABI OFFERS MID-RANGE VALUE

AND SUBLIME WAFFLES

SUNDAY 12 APRIL 2015

Courtyard by Marriott Abu Dhabi is a strong mid-range islet in the capital’s sea of ultra-luxury hotels.

As we near the off-peak summer season, room rates vary between Dh460 to Dh710, making it an affordable option for the business traveller, particularly as the location is so attractive.

The hotel is connected to the World Trade Centre Mall, and is in the heart of the city, close to Adia, the Tourist Club, and the beach.

The one-bedroom suite offers one full bathroom replete with triple-width marble shower, a

small bathroom, and a modest living room – large enough to relax, with a pull-out sofa bed. The room is pleasant and the bed obscenely comfortable, but the dark horizontal grain of the

wood-effect wallpaper feels vaguely oppressive. From the seventh floor there’s not much of a view, but the open-air rooftop amenities offer views enough.

In terms of connectivity, there is complimentary Wi-Fi in the room but it’s too slow for

streaming. For Dh35 a day you can upgrade to high-speed access. The business centre houses three meeting rooms, all offering high-speed Wi-Fi along with the standard audio-visual

conference facilities. The largest can accommodate up to 60 guests. The hotel also has special offers for groups of 10 or more.

To power up ahead of the working day, breakfast at The Bistro is a generous buffet. It is the first hotel buffet I have spotted that serves pav bhaji, (an Indian vegetable dish served with bread), for which it scores a few points. A chef will cook eggs to order. But the make-your-own

waffle bar is the buffet’s standout star. Waffles are excellent; customised waffles are sublime.

In the evening, the rooftop venue Up and Below is romantically lit by a firepit and whimsical

bauble lights suspended from wooden lattices. It offers a range of mixed drinks, and an invisible DJ plays Balearic music beneath the stars.

Across the roof, the picturesque pool area is designed for lounging. The pool itself is on the

small side, but it’s lined with shady, bedlike cabanas. If you crane, there’s a sliver of a Corniche view from up here.

For its central Abu Dhabi location, and neat, modern interiors, Courtyard by Marriott is excellent value.

Q&A

Ailsa Martin samples the fare at Fifth Street Café in Abu Dhabi’s Courtyard by Marriott:





Where is it?

Fifth Street Café is located on Courtyard by Marriott’s ground floor, and accessible via World

Trade Centre Mall.

What is the vibe?

Relaxed, informal dining in a modern, hipsterish setting. Fifth Street Café is designed to appeal to trendy young things toting MacBooks for casual lunches, flat whites and artisanal teas. The music playlist is one of Abu Dhabi’s best.

What is the decor like?

It’s full of trendy details like suspended wicker egg chairs, menus on chalkboards and artisan

olive oil jar arrangements. Plenty of plug sockets make it easy to set up shop at the communal table spread with magazines. For Silicon Valley-style brainstorming sessions, hackathons and the like.

What’s on the dinner menu?

A slightly bizarre chicken tikka salad on a savoury waffle; beef braesola, pomegranate and

rocket pitta bread; sea bass on a bed of vegetables and a fantastic pan-fried gnocchi with sage butter and hazelnuts. There is a specials board.

Dessert?

Monumental slabs of Oreo cheesecake and pistachio pie, finished with a round of salted caramel milkshakes. Jumbo-sized cakes and pastries are displayed in the hotel’s dessert

vitrine.

What’s unique here?

For breakfast, they’re offering quinoa porridge with fresh berries, pistachios, dates, honey and cinnamon. Lovely.

Source: The National

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RULES NEEDED ON YACHT AND LUXURY

CAR GIMMICKS TO INVESTORS IN

DUBAI PROPERTY, SAYS EMAAR

CHAIRMAN


Marketing of Dubai property to overseas investors needs new regulation to prevent damage to “Brand Dubai” from gimmicks being offered to coerce buyers including yachts and luxury cars, the chairman of Emaar Properties was quoted as saying on Sunday.

Dubai has ramped up its oversight on the emirate’s property sector in the wake of a real estate crash at the end of the last decade which sent prices down by around half from their peak,

including measures to cap loan-to-value ratios on mortgages and a doubling of the fee paid to register transactions.

The property market has recovered strongly since the crash, aided by cash from foreign

investors, many of whom have invested as they perceive the emirate as a safe haven in a region impacted by political tensions.

However, speaking to Arabian Business on Sunday, Mohamed Alabbar, who heads Dubai’s largest-listed developer, said there needed to be additional controls on local property companies when it came to attracting foreign investors.

“Instead of focusing on the fundamentals, what we see today are marketing gimmicks. It is alright to have an aggressive marketing strategy but there is a red line,” Mr Alabbar was

quoted as saying.

“What is the logic of promising customers, who are investing their life-savings in a dream home, a luxury car or yacht?”

Some Dubai developers enticed customers with Aston Martins or Lamborghinis upon the sale of a luxury unit during the worst of the previous downturn to maintain sales.

The measure isn’t restricted to Dubai: in Ajman, one developer in 2014 offered citizenship of Antigua and Barbuda in the Caribbean, in exchange for buying a four-bedroom villa.

However, with property prices in Dubai soft after two years of high growth, the practice has

been returning - buyers on one development currently being marketed will receive a personalised golf cart.

Such “gimmicks” needed laws from Dubai’s Real Estate Regulatory Authority, Mr Alabbar was quoted as saying, as such practices threatened to undermine the trust of consumers in “Brand Dubai”.






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MORE SIGNS OF SLOWDOWN IN DUBAI

PROPERTY MARKET

MONDAY 13 APRIL 2015

Dubai’s property market has shown more signs of a first quarter slowdown as new housing comes on stream at a time of slowing sentiment.

Average apartment prices fell 2 per cent compared with the previous quarter and villa prices

fell 1 per cent during the first three months of the year, the property broker JLL reported as developers completed 730 new homes across the emirate.

“The first quarter of the year continued to see subdued activity in Dubai’s real estate market,” said Craig Plumb, head of research at JLL’s Dubai office.

“As Dubai’s residential market moves towards a period of correction, the next driving force is

predicted to be end-users or middle-income earners, as opposed to speculative buyers.”

The figures, acquired from Reidin data, confirm a CBRE report last week which showed that

average house prices in the city are falling for the first time since the 2008 global financial crisis wiped up to 60 per cent off property values.

At the same time average housing rents for both villas and apartments remained static during

the first quarter of the year, compared with the previous quarter.

In January JLL predicted that average house prices and rents in Dubai would fall 10 per cent

this year because of a lack of affordability in the market and the recent global oil price crash.

The ratings agency Standard & Poor’s, on the other hand, said they would fall 20 per cent because of increased supply and weakening investor sentiment triggered by the tumbling price

of oil.

The broker added that another 22,000 new homes were expected to complete by the end of

the year, although it added that the timings of some of these completions was likely to slip.

Some Dubai estate agents already report that they are asking sellers to drop their asking prices by as much as a fifth, pointing out to those based in the UK and Europe that they will

make up some of the shortfall through favourable currency exchange rates.

At the same time Dubai’s hotels market also faced a slowdown as daily rates declined 5 per

cent year-on-year to US$273 a night from $286 a night in 2014 as demand from Russian and European visitors fell because of weakening currency conversions.


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EMAAR PROPERTIES PROFIT ON TRACK

FOR $1 BILLION

WEDNESDAY 15 APRIL 2015

Profit at Emaar Properties, Dubai’s premier developer, is forecast to cross the US$1 billion threshold in the current year.

Mohamed Alabbar, the chairman, told shareholders at the annual meeting in Dubai that net

profits for 2015 would be Dh3.69bn, a 12 per cent rise over 2014.

Some analysts had expected the meeting to be an occasion for shareholders to express their

disquiet about the share price performance and Mr Alabbar’s role in other property ventures, but there was no controversy and no unexpected questions from the floor at the meeting.

Motions to approve the 2014 accounts, to reappoint the accountants Ernst & Young, and to

reappoint directors were all approved, as expected and unopposed.

Mr Alabbar was reappointed a director along with nine others, putting a final end to speculation

that he might stand down as chairman.

Even before the meeting began, there was a sense that it would be a routine gathering, and that rumours of shareholder unease has been overdone in recent weeks.

“There’s been media talk of unhappy shareholders, but I challenge you to find one here today,” said one investor who declined to give his name.

Another, a representative of a big family office in the region, said that he had been a long-term holder in Emaar and would continue to hold the shares. “The chairman deserves a big bonus, not to resign,” he said.

Mr Alabbar told the meeting that Emaar had big plans in the Dubai property market, despite static or falling property prices.

He highlighted plans for joint ventures in hotel and residential development in the emirate, in partnership with government owned groups Dubai Holding and Meraas.

Mr Alabbar recently announced that Emaar had a land bank of 235 million square metres,

“enough to develop for decades to come”.


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DUBAI LEADS REGION IN HOTEL ROOM

CONSTRUCTION

WEDNESDAY 15 APRIL 2015

Dubai has the largest number of rooms under construction in the Middle East and Africa region, even as room rates come under pressure.

The emirate reported the largest number of rooms under construction with 14,385 rooms

across 49 hotels at the end of last month, according to the consultancy STR Global. That represents 18 per cent of the total number of rooms under various stages of construction in

the region.

Other active markets in the region for hotels were Doha in Qatar, and Mecca and Riyadh in Saudi Arabia.

During the first quarter, average daily rates in Dubai fell 5 per cent to US$273 in the first two months of the year, usually considered the high season. This pulled down the revenue per

available room by 7 per cent over the same period, according to a JLL advisory report published on Monday.

Room rates in Dubai have to become affordable and this is a promising sign, according to

Philippe Harb, the chief operating officer at One to One hotels in Abu Dhabi.

“Abu Dhabi has half the rates of Dubai and that is excellent for business, and big business

group bookings are coming back,” he said.

Dubai received 11.6 million guests last year, up 6 per cent from 2013 figures, according to Dubai Corporation of Tourism & Commerce Marketing. The rate of growth cooled from the 11

per cent recorded in 2013.

The fall in the number of tourists from Russia and the euro zone contributed to the decline.

Tourist numbers from emerging markets such as South Asia, Far East Asia and Africa made up for the decline to a certain extent last year. Guests from South Asia, Far East Asia and Africa increased 14 per cent, 13 per cent and 11 per cent respectively.

“This comes on the back of rising wealth and changing consumer habits in emerging markets, in addition to increased efforts to diversify Dubai’s inbound markets,” according to the JLL

report.

Over the next nine months, an additional 3,600 rooms will come on to the market, with 8,400 in line for next year. An additional 9,200 rooms are expected for 2017, according to JLL.

As of the end of first quarter, there were 64,900 hotel rooms in the Dubai market.


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DUBAI’S EMAAR SHARES HIT THREE-

MONTH HIGH AS CHAIRMAN MOHAMED

ALABBAR STAYS ON

THURSDAY 16 APRIL 2015

Emaar Properties shares climbed to the highest in almost three months after chairman Mohamed Alabbar was re-elected at a shareholders meeting, ending months of speculation the

company’s founder may shift roles.

The developer of Burj Khalifa in Dubai, the world’s tallest tower, closed up 9.4 per cent at

Dh8.15, the highest since January 19. Emaar was the biggest gainer on Dubai’s DFM General Index, which increased to 4,079.91, the strongest level in more than four months.

The chairman was re-elected by shareholders at the meeting yesterday,who also approved the

reduction of the board to 10 members from 11 and voted to allow Emaar board members to continue their involvement in other real estate companies. The UAE’s largest developer will pay

Dh1.07bn in dividends for 2014 after shareholders approved a payout of 15 fils a share.

“Investors are relieved there are no changes at the top management and an expected push back from shareholders didn’t materialize,” Taher Safieddine, an analyst at Shuaa Capital in

Dubai, said by phone. “Emaar’s business model is still looking healthy and valuations remain attractive at these levels.”

Emaar’s share price slumped about 25 per cent in the last six months amid falling oil prices and speculation that Mr Alabbar may scale back his role with the company. The chairman has

been increasingly involved with new developers in Abu Dhabi, Dubai and Egypt, drawing criticism over possible conflicts of interest. There’s also been disapproval from some shareholders after Alabbar moved Emaar executives to Abu Dhabi developer Eagle Hills, where

he is a board member.

Alabbar rejected criticism over possible conflicts of interest in an April 9 interview with Arabian

Business. He said the departure of senior Emaar executives to other companies in which he’s involved doesn’t represent a “brain drain” for the developer. He reiterated at the meeting a profit forecast of Dh3.69bn for 2015. Net income for 2014 was Dh3.3bn, the company reported

in February.

“This profit is doable based on the delivery of homes and land sales, which the company never

guides the market on,” said Sanyalak Manibhandu, an Abu Dhabi-based analyst at NBAD Securities. The company is expecting to deliver 2,120 homes this year compared with 1,480 homes completed in 2014, according to an investor presentation on its website.

Dubai’s government owns almost 30 per cent of Emaar, which was founded by Mr Alabbar in 1997. Under his leadership, the company expanded into more than 18 countries including the

US, Egypt, Turkey and India






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PLOT THICKENS WITH LAND BANK

COMPANIES


Complete with brightly coloured pictures of Big Ben and the Houses of Parliament, red Routemaster buses and old-fashioned pillar boxes, a handful of stands at Cityscape Abu Dhabi each year promise a dream of London living.

Offering villa-sized plots of land for as little as £10,000 (Dh54,470) to £15,000 when the average house price in the UK’s capital currently stands at about £460,000, it does seem

almost too good to be true.

As always there’s a catch. Land banking firms, as they have become known in Britain, sell plots of land – often in rural parts of the UK or green belt land – without planning consent for as

little as £10,000 an acre.

This often means that when an investor has bought the land he can do nothing with it apart

from to hope that it is one day re-zoned for some other use (see box).

Land banking companies have a poor reputation in the UK, with a handful having been forcibly wound up by the authorities after being exposed as scams.

In 2012, the FSA secured a £32 million high court judgment against three land banking companies, Countrywide Land Holdings, Regional Land and Plateau Development & Land, and

banned owner James Kenneth Maynard from selling land for business purposes in the UK.

“This decision sends a message to other land banks that we will not sit by and let them con investors out of their money. Indeed we have also started court actions against others that we

believe have been involved in Maynard’s scheme,” said Tracy McDermott, acting director of enforcement and financial crime at the FSA, at the time.

“Anybody investing in land should always have it independently valued to check its worth. Furthermore, if you are ever sold land as an investment with the promise of fabulous returns, and on the basis that someone else will manage it for you as part of a wider site, you should

check the firm is authorised by us.”

The consumer watchdog Which? says: “We believe the land banking model can never work.

Dividing land into individually-owned plots makes it less likely to be built upon, as no developer would want to deal with hundreds of separate owners.”

But with overseas interest in UK property increasing rapidly since the global financial crisis,

companies offering similar services are exhibiting in the UAE and across the GCC.

Bob Clarke, the managing director of Herald Land, runs one of the longest established UK land

banking firms in the UAE.





His company has been operating in the UAE for the past six years and has so far not won planning consent on a single one of the 13 sites it has broken into smaller plots and sold off to

more than 500 clients.

Mr Clarke admits that many land banking firms operating in the UAE and GCC may be involved

in questionable practices.

“There are too many companies in Dubai and Abu Dhabi that can open up tomorrow morning, give advice and they have no controls over their staff, no controls over what people will say.

And the trouble is that these staff may up and leave in two or three months time and that doesn’t help an investor,” he says.

“When we went to Cityscape in Qatar last year there were two young guys from Saudi Arabia selling some land in south London somewhere. They didn’t even know where south London was. They had never seen the land,” he adds.

“One of the reasons why this particular type of land in the past has had a bad name is that you’ll get people buying a plot of land in the middle of Norfolk and they will sell it to people

outside the UK. It’s very easy to mislead people.”

Instead, Mr Clarke says his company is making serious attempts to win planning consent for its clients – a long and complicated process which, even if it is successful, is likely to take many

years – but which would increase the value of the plots by a multiple of 10 if the gamble pays off.

“Land banking has been done for years and years in the UK. It’s been done by farmers, royalty, financial institutions and developers,” he says.

“There are stages you have to go in. From day one when you buy a piece of land you have to hold on to it and do nothing for a good two or three years. The minute it is transferred to our name we get a section 4 put on us by the local authority. That says you can’t do any kind of

planning without permission. We know that anyway. It’s standard.”

“The next thing you get in certain areas is groups springing up saying that they don’t want

houses built in the neighbourhood. So we give it a good two to three years to calm down. When you go for consultations or initially sounding councils out you get a flat ‘no, no, no, no’. But the minute you start putting paperwork together and submitting infrastructure [plans] and

everything they have to take you seriously because that costs money.”

Mr Clarke says that his clients are all informed about the risks involved in buying land without

planning consent and his staff are fully trained concerning issues regarding the UK planning system as well as Rera-compliant.

However, a quick internet search reveals a number of posts, purportedly from angry clients, all

of whom have chosen to remain anonymous.

When asked what checks are made on exhibitors to ensure that they are legitimate and that

their sales are ethical, Cityscape organisers say that they ensure that any exhibitor is operating within the laws of this country.

“We are working closely with our government partners such as the Abu Dhabi Department of

Municipal Affairs and the Abu Dhabi Urban Planning Council in Abu Dhabi, as well as Dubai Land Department and more specifically Rera in Dubai to collect any information from our

exhibitors that they may require,” says Wouter Molman, the director of Cityscape Group.





“If it would turn out that any of the clients doesn’t hold the relevant licence or permits to participate in our events or showcase a specific project, we would follow any instructions given

by the relevant authorities,” he adds.

“It is worth noting, however, that the majority of our clients have been exhibiting with our

events for many years, and are in fact very reputable companies that have successfully delivered some outstanding projects across the UAE and beyond.”

Lay of the land to win consent

In the UK, planning consent has been required in order to be allowed to build on land or to change the use of land or buildings since the 1940s. This means that farmland usually costs a

fraction of the price of land which has been granted planning approval to be developed as housing.

Land which has been designated as “green belt” in the UK has been left as farmland to prevent

urban sprawl. The land is officially protected and any development is often extremely controversial in local communities.

But under the National Planning Policy Framework under very special circumstances small amounts of green belt land can be granted planning consent if the benefits of development would outweigh the harm caused to the green belt.


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ARABTEC CHAIRMAN AND FOUNDER

SET TO LEAVE AFTER BOARD

OMISSION


The Arabtec chairman Khadem Al Qubaisi is set to leave the company after his name was not included on a list of board nominees. Founder Riad Kamal was also not included on the list.

Mr Al Qubaisi, who is also the managing director of Ipic and the chairman of Aabar, was not on a list of 16 nominees for the company board to be decided at the Arabtec AGM on Thursday,

according to documents submitted to the Dubai Financial Market.

A board committee is tasked with choosing which names to pass forward for election.

“Mr Al Qubaisi is very much seen as an establishment figure so this move may been viewed as

a negative by the market,” said Sanyalak Manibhandu, research manager at National Bank of Abu Dhabi.

Arabtec shares closed up 4.66 per cent on Thursday at Dh2.92. However, most analysts put this down to a market-wide uptick thanks to an increase in the price of oil.

In accordance with UAE company rules, Arabtec shareholders will elect a new board of

directors from the nominees and the board will later vote to elect a new chairman from among their number.

Mr Al Qubaisi presided over the Arabtec share crisis last year, when Arabtec stock fell from a high of Dh7.70 on May 14 to Dh2.61 on June 30.

The crash came in the wake of the sudden departure of the former chief executive Hasan Ismaik last June, which heralded a major company restructuring and the departure of key managers.

Mr Kamal, who founded Arabtec in 1975, resigned as chief executive in February 2013 and was replaced by Mr Ismaik. His departure is considered less surprising. “Mr Kamal was bound to

leave the company at some point,” Mr Manibhandu added.

Arabtec declined to comment further on the reshuffle.

Last month Arabtec startled the market by revealing a Dh94.4 million loss for the final three

months of 2014, compared with a Dh122.1m profit the same period a year prior.

Net profit for the year fell more than 48 per cent to Dh241.6m from Dh468.3m in 2013 as

general and administrative expenses ballooned almost 75 per cent to Dh749.9m from a year earlier.


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THE NEST AT AL BARARI IN DUBAI

PROVIDES GREEN DREAM LIVING AMID

ARID DESERT


Al Barari has launched The Nest, a development of villas.

Ranging from Dh7.7million to Dh12m, the 99 villas will be part of a verdant ecosystem situated

off the Mohammed bin Zayed Road.

The development is hidden by tall trees and thick green bushes on the opposite side of MBZ to

Global Village. One can quite easily miss this housing estate because of the nature that has been planted and the height of the sand dunes that surround it.

Al Barari literally means “wilderness”.

The drive in brings you through deep foliage and a green vista one does not usually associate with Dubai or the desert. The landscape is a natural reserve and contains the region’s largest

privately owned plant nursery, producing 700 varieties.

The Nest started building in mid-March but has no set completion date as yet. The development plan shows each villa with a built-up area of 6,300 to 7,000 square feet with plot

sizes ranging from 9,000 sq ft to 15,000 sq ft. In all the 99-villa community will span 2.41 million sq ft. All the villas will face the skyline of Dubai with excellent views of Burj Khalifa.

The Nest villas feature a private pool, outdoor shower, outdoor entertaining area, barbecue area, landscaped gardens with a lawn and parking for two cars. Floor-to-ceiling windows will

allow unfettered views of the lush surroundings.

All the villas will have solar panels on the roof.

Al Barari already has two developments, The Reserve and The Residences, fully occupied with

infrastructure catering for leisure and entertainment.

The Nest’s residents will have access to the ultra-modern facilities of the wider Al Barari

development including Body Language health club, a fully equipped gym, an outdoor temperature-controlled pool, tennis courts and a full schedule of group exercise classes. It also offers a restaurant, The Farm, and Heart & Soul, Al Barari’s signature destination spa.

The future development includes a retail village, dining venues, a vanity area, floating market, lakes and water features and themed gardens.

Q&A

Martyn Crook, business development director at Al Barari, gives details about the project.

The villas went on sale on Sunday, how many have you sold?





We have sold 92 out of the 99 so far, which is an incredible response in a week. We thought the market was ready because we had an amazing response to our apartments that were sold

in February, Seventh Heaven, which are low-rise, nine floors and 11 floor apartments.

When will The Nest be delivered?

We have a schedule that says 24 months, but I think we can easily deliver them in under 18 months; we want to over-deliver and under-promise.

How many villas will be on Al Barari when The Nest is completed?

There will be 319 villas sitting in 19 million square feet of land, but Al Barari will be a destination with hotels, villas, offices and serviced apartments in the future. I don’t want to

say when that will be a reality, but the plans are there and the vision is sustainable.

How big is the nursery on Al Barari?

It is 1.6 million sq ft and we grow all our plants there so that we are able to keep the beauty

and exclusivity of the development to a maximum. We are looking at opening the nursery up to the public so that they can see the incredible plants we grow there. They can come now and

buy plants, but it has the potential to be a destination on its own.


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NEW SAADIYAT ISLAND VILLA

COMMUNITY CLOSE TO GOLF COURSE

LAUNCHED

SATURDAY 18 APRIL 2015

The launch of a new gated villa community on the edge of Saadiyat Beach Golf Club in Abu Dhabi is targeting a shortage of modern villas in the capital.

Tourism Development & Investment Company (TDIC) said that Jawaher Saadiyat will feature 83 properties, with four-bedroom townhouses and four, five and six-bedroom villas with floor-

to-ceiling windows.

“The launch of Jawaher Saadiyat comes following an in-depth research which showed that the market still lacks this category of four and five-bedroom villas and townhouses,” said Ali Yousif

Al Hammadi, chief executive at TDIC.

A statement from TDIC said that the villas’ flat roofs can be used as private lounges, while

each villa will come with two to four shaded parking spaces. The overall built-up space will be between 4,628 sq ft to 13,648 sq ft.

The five and six-bedroom villas will feature an independent majlis with its own pantry, toilets,

office and guestroom, in addition to a dedicated driver’s and cook’s room.

The properties will be showcased at Cityscape Abu Dhabi, which runs from Tuesday until

Thursday at the Abu Dhabi National Exhibition Centre.

Saadiyat Island has been divided into six separate neighbourhoods. The Saadiyat Beach district

is currently the most advanced with the majority of the island’s properties.

TDIC said last month that construction of the third phase of Saadiyat Beach Villas is on track for completion in June.

The third phase consists of 77 four and five-bedroom villas, taking the total in the community to 428.

Saadiyat Development and Investment Company (SDIC) also said last month that its luxury beachside villas at Hidd Al Saadiyat were 40 per cent complete.

The project is built on nearly 1.5 million square metres of natural waterfront land on the north-

east part of Saadiyat Island, and will be home to 4,000 people with 453 villas and 15 low-rise apartment buildings when complete. The villas, dubbed “beach palaces” by the developer, are

priced from Dh7 million to around Dh40m.

SDIC said that 78 per cent of the infrastructure has been completed, while the project is scheduled for completion at the end of 2016.





The first phase of Mamsha Al Saadiyat, a 1.4 kilometre beachfront mixed-use development with apartments and townhouses, had sold out according to TDIC last year.

Prime house prices in Abu Dhabi rose by 14.7 per cent last year, according to a report from Knight Frank.

However, the market slowed in the final quarter, with property broker JLL reporting that prices were unchanged during the final three months for the first time in two years, as strict mortgage caps and tumbling global oil prices prompted investors to stay away.


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UAE HOUSING MARKET IS MATURING,

SURVEY FINDS

SATURDAY 18 APRIL 2015

More than half of Emiratis pay for new homes in cash, a new survey from the polling company YouGov has found.

Fifty-four per cent of Emiratis pay the full value of property purchases with equity, compared

with fewer than three in 10 western expatriates.

The findings come ahead of Cityscape Abu Dhabi, which starts on Tuesday.

Emiratis pay with cash “because they have the ability to”, said Warren Philliskirk, a director at Mortgage International, a Dubai-based advisory company.

“But we are seeing more Emiratis using finance. It’s still much cheaper than small business

lending or getting an overdraft.”

The type of customer buying a house in Dubai is also changing, he said.

“We’re seeing the genuine end users coming to the market – people who’ve already been here three to five years already, people who don’t want to rent anymore or people who are upgrading from what they’ve already bought.

“It’s not really an investor market anymore. Where there are investors they’re looking for long-term yields as opposed to buying and selling quickly to make a profit. The market is maturing.”

“Authorities are really on the case to make sure things aren’t overheating,” he said.

Kailash Nagdev, YouGov’s managing editor in the UAE, said the some home buyers were still looking at houses as investment assets, and not just family homes.

Customers are looking to invest in more than just a residential unit,” Mr Nagdev said “This is challenging developers to come up with innovative investment propositions and attractive

mortgage schemes ... for those making their first step onto the property ladder,” Mr Nagdev said.


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REVEALED: WHICH NATIONALITY BUYS

PROPERTY FOR CASH IN UAE


Fifty-four per cent of UAE nationals prefer to pay cash when buying property, according to a new survey by YouGov.

Asians expatriates (39 per cent) take the second place followed by Arab expatriates (37 per

cent) and Western expatriates (27 per cent), the survey of 308 residents reveals ahead of three-day Cityscape Abu Dhabi 2015, which begins on April 21.

Besides, 75 per cent of 'first time' property buyers show interest in buying properties in the country with the survey disclosing that 85 per cent of property owners are more likely to be aged over 50.

However, location remains key when investing in the real estate market.

Fifty-one per cent of respondents favoured properties near retail shopping malls followed by

those close to beaches, public parks and mosques, the survey said.

“The study highlights continued confidence in the local real estate market with three-quarters of first time buyers preferring to purchase properties in the UAE,” said YouGov’s UAE Managing

Director, Kailash Nagdev.

“However customers are looking to invest in more than just a residential unit, which is

challenging developers to come up with innovative investment propositions and attractive mortgage schemes to make them affordable for those making their first step onto the property ladder,” he added.

Abu Dhabi plan

The Abu Dhabi Urban Planning Council (UPC) will unveil its new corporate vision at the

Cityscape event. The updated vision and mission statements are more aligned with the its mandate as 'guardian of the Abu Dhabi Vision 2030'.

The UPC will also officially announce the projects that have been given the go-ahead in the

first quarter 2015, following the recent announcement of 76 Emirates-wide projects during 2014.

Falah Al Ahbabi, the UPC’s Director General, commented: “Abu Dhabi is developing at an incredible pace and we, as government entities, must be proactive in developing the kind of platform required to support this growth.

“This growth should not comprise the sustainability of the Emirate.

“Therefore, Estidama is at the heart of any urban plan or development in Abu Dhabi, whether it

be residential, commercial, community or mixed-use.





“Additionally, the UPC always considers the lifestyle component, to ensure that a development is as livable as possible.

“Ultimately, we are transforming Abu Dhabi into a world-class sustainable capital city, to ensure the longevity of the emirate for future generations.”

Since the Estidama programme, a building design methodology for constructing and operating buildings and communities more sustainably, was launched four years ago, a total of 11,881 villas and 921 buildings have been awarded a Pearl Rating.

Indigo’s BMW offer

Indigo Properties, a Dubai-based developer, will offer villa buyers a BMW320i on the purchase

of a villa along with an extended payment plan over three years post purchase and handover in its Orange Lake project in Jumeirah Golf Estates.

Buyers can pay 20 per cent of the purchase price on booking the property, with 20 per cent

payable on handover and 20 per cent per year for the next three years after the handover.

Prices for the villas start at Dh7 million.

The developer has tied-up with Mashreq for mortgages up to 65 per cent. “The handover of the properties is expected in the next two months,” company CEO Dev Maitra said in a statement.

The project comprises 68 Mediterranean-style villas with themes such as Andalucian, Tuscan,

Provencal, Hacienda and Riviera.

Source: Emirates 24/7

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DUBAI'S DEVELOPERS NEED TO SHED

TOP-HEAVY APPROACH

THURSDAY APRIL 16 2015

As the volume of transactions have started to fall further, with prices closely following suit (in certain freehold areas, prices have already dropped by approximately 20 per cent), the question on everyone's mind is: how long will this correction last?

As the world gets used to a paradigm of lower oil prices, the worry is whether there is a similar shift in the arc of real estate prices. As speculative activity recedes and the era of off-plan

flipping comes to an end, looking at the population demographics along with the topography may provide some clues as to where the city's industry is headed.

Since the advent of the freehold phenomena, Dubai's population has grown by approximately 7 per cent per annum (75 per cent of the growth from net influx of people). The supply of homes has tripled from 156,000 units to 465,000 units, and the city has enjoyed a boom in asset

prices, for a number of reasons, principal being single investors buying multiple properties either for rental yields and/or for holiday home purposes.

Also, as a result of the expansion of the population as it became a magnet for the immediate region in terms of employment opportunities. Given the fact that growth was fuelled by investor money, and end-users accounted for roughly 13 per cent of overall purchases at this

time, it is critical to note the income demographics and match them against the supply demographics.

When this analysis is done, it appears that 22 per cent of the supply introduced in the last 12 years is accessible to only the top 2 per cent of the population. Furthermore, when velocity dynamics are introduced (the ability of units to be bought and sold readily in terms of

absorption capacity) the communities that emerge on top are International City, Discovery Gardens, IMPZ, Sports City and the surrounding areas of Dubailand (Arjan, Majan, Liwan and

Dubai Residential Complex).

It appears as if the structure of the market is analogous to that of an hourglass. There is a preponderance of supply at the top- and bottom end of the spectrum. If Dubai is going to

move towards a dynamic where demand will be derived from end-users, and not emulate the Spanish model, then it serves to reason that the mid-income space is what needs to be catered

to.

There have been more offerings in this space in recent months as developers have started to adjust, but given the weightage at the top end of the market, it is apparent that any macro

price index will remain sluggish for some considerable time to come.

It is important to note that the entire advent of the freehold phenomena and the subsequent

boom-bust cycle came against the backdrop of a declining dollar and rising oil prices, and only in the last year have these two relationships changed. It is reasonable to postulate that even as the influx of population continues, demand for housing will shift towards end-users.





For this to be sustainable, mortgage caps that were introduced last year may need to be relaxed in order to incentivise end-users to purchase. Perhaps, more critically, there has to be

more options at the supply end that need to be offered by developers. It is this transition period that will be a challenge to navigate.

The market remains well (if not over-) supplied at the top end of the spectrum (both in the villa and apartment space) and the impact of lower oil prices and stronger dollar will undoubtedly dampen the demand from overseas investors. However, domestic demand at the

mid-end remain inelastic to these macro trends, and developers and investors who capitalise on this will be amply rewarded in the years ahead.

Source: Gulf News

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DUBAI’S MORTGAGE DEALS TAKE A

DIVE FROM Q1-2014 PEAK

THURSDAY APRIL 16 2015

UAE’s banking industry are still trying to get a handle on their mortgage operations — latest data suggest that home financing transactions at the end of the first quarter are down to levels that were there during March 2013. And this is quite removed from the peak activity recorded

during the first three months of 2014, according to Cavendish maxwell, the consultancy, in the launch issue of its ‘Property Monitor’ report released Wednesday.

Just as telling has been the drop in mortgage financing — ‘Around the peak (during Q1-2014) we witnessed a spike in the level of refinanced mortgages

following a drive from local banks with new products targeting this segment’, the report adds.

The subdued mortgage activity has been brought on by multiple factors, such as the high loan-to-value (a maximum of 50 per cent) set for off-plan launches, the general softness in buying

activity experienced since the second-half of 2014, and banks’ continued reluctance to go full out with their home financing offers. An option to set this right could be for the UAE ‘Central Bank change LTVs to simulate the market in run up to the Expo (2020)’, according to the

Cavendish Maxwell report.

“Whether the market is soft or not, the fact is that there is still lots of appetite for buying

property in Dubai at the right price and right location,” said Zafer Taher, CEO of G&Co., the developer which has ongoing projects at Meydan City, in a recent interview. “It would make the sales cycle for off-plan launches a lot smoother if prospective buyers could ensure a

mortgage facility from a bank, or at the least, even a pre-approval.

“But without such approvals, the developer may have to extend incentives such as lower down

payments to convince a buyer to get in now.” (G&Co. confirmed that talks are on with a local bank whereby the developer can take on a direct role in helping buyers come up with their non-equity financing.)

It is a step that Damac Properties has taken through an association with Abu Dhabi Commercial Bank, wherein buyers at its Akoya project will have their mortgage processing fees

waived.

Other developers are spreading out the payment schedules, with the Safeer Tower 2 in Business Bay — launching on April 19 — requiring 10 per cent on booking, 10 per cent after 60

days, 20 per cent on handover (June 2016), and 60 per cent payable over three years post the handover.

But, at the broader level, access to mortgage remains a tight proposition — “For off-plan, the resistance (on the part of banks) is much higher at this stage and only (projects) of a handful

of blue-ribbon developers are exempt,” said Sameer Lakhani, CEO of Global Capital Partners. “This will change, but for now banks are predominantly interested in offering mortgages for ready units.





“It’s evident from Dubai Land Department data of recent months the share of mortgages has moved beyond the traditional 15-20 per cent of overall transactions. In the villa space, it’s now

in excess of 50 per cent of all transactions and moving higher.

“This is all evidence of a maturing market — with more stable buyer profiles banks will take

increasing comfort in taking up mortgaged assets. This sets the stage for banks to securitise and list them at some point.”

For the moment, though, potential property buyers would wish banks would just make it a lot

more easier for them to sign on the dotted line.

Source: Gulf News

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SHAH RUKH KHAN-ENDORSED DUBAI

PROPERTY LAUNCH PRICES LOWEST

YET

SUNDAY APRIL 19 2015

An affordable housing price war has begun in Dubai’s real estate market, with a new company upping

the ante for a project endorsed by Bollywood superstar Shah Rukh Khan.

Studio apartments in the Royal Estates in Dubai Investment Park (DIP) will soon start selling for

Dh284,888, while one-bed units will be offered for Dh575,888.

“The official launch of the apartments will happen in the coming two to three weeks.

“These units are very much in the affordable price range and something that the market has been

seeking,” Shahid Rasheed, General Manager, Texture Properties, told Emirates 24|7.

“Our price per square foot stands at Dh580. The response in our pre-launch has been great,” he said,

revealing, investors will have to pay a 10 per cent down payment on booking, with the balance payment

being paid over 4.5 years in EMIs of nearly Dh3,600 per month.

The first phase of the launch will include three towers, consisting of 1,200 apartments, which are set for

completion by end-2017.

Aristocratic Star, Pacific Ventures and Texture are co-developing the development’s apartment building

component, worth Dh1.6 billion, according to Parvez Khan, Chairman, Pacific.

In August 2014, Emirates 24|7 reported that Shah Rukh Khan, the second-richest actor in the world

with a personal wealth of $600 million, was pitching for affordable housing in Dubai.

“It should be something belonging to the world where I belong. I am a lower middle-class guy… if I

wanted a house, a house for myself, what would it be like?

“Please try to make it affordable and try to have a kitchen as a central theme,” the actor said.

Nshama, a real estate developer, has already started selling apartments for Dh349,988 in its Town

Square project near Al Barsha, in close proximity to the Arabian Ranches Golf Course.

Craig Plumb, Head of Research, JLL Mena, and Mario Volpi, Managing Director, Ocean View Real Estate,

told this website last week that they were expecting other developers to follow suit and launch more

affordable units into the market.

In March 2015, Emirates 24|7 reported that Dubai Municipality (DM) had allocated over 100 hectares of

land for affordable housing, mostly to meet the demand for dwellings for people earning between

Dh3,000 and Dh10,000 per month.

“In just three areas — Muhaisnah 4, Al Qouz 3 and 4 — we allocated land in excess of 100 hectares for

affordable housing and that will take up more than 50,000 people. “We have many more areas where

similar housing will come up,” Abdulla Mohammed Rafia, Assistant Director General for Engineering and

Planning Sector, DM, said.





Khalid bin Kalban, Chief Executive Officer, Dubai Investments, a Dubai stock exchange-listed company,

told this website that affordable housing market was going to outshine luxury market segment in 2016.

“I think 2016 onwards there will definitely be a pick-up in affordable housing because of the projects

being undertaken by the government such as the Al Maktoum International Airport, Expo 2020 venue

development and theme parks in Jebel Ali area,” he said.

Dubai is expected to create over 277,000 new jobs in the run up to the Expo 2020 and may witness an

undersupply situation rather than an oversupply.

Moody’s Investors Service, a global ratings agency, has said the government spending on infrastructure

and encouraging more foreign investments in various sectors will support the real estate market over

the next five years.

The government has announced the new Dubai Metro Route 2020 project - an extension of the Metro’s

Red Line from Nakheel Harbour and Tower Metro station to the Expo 2020 site, which will serve

Gardens, Discovery Gardens, Al Furjan, Jumeirah Golf Estate, and DIP, which house over 240,000

residents.


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NEW DUBAI PROJECT TO TRANSFORM

DEIRA INTO JBR-LIKE DESTINATION

SUNDAY APRIL 19 2015

Dubai Municipality (DM) will commence work on a mega beachfront development set around Al Mamzar

Lake in Deira, which will be akin to Jumeirah Beach Residence, according to a senior government official.

“We are working on the project and the concept design has been agreed on. It is going to be a

destination like others areas such as JBR,” Abdulla Mohammed Rafia, Assistant Director General for

Engineering and Planning Sector, Dubai Municipality, told Emirates 24|7.

The civic body is working with Emaar Properties, Dubai’s largest developer, on this project. The

companies had signed a memorandum of understanding (MoU) in May 2014.

“We are expecting to break ground early next year,” he revealed, but declined to give the project cost.

The project, which is being planned around the 53-hectare (131-acre) Al Mamzar Lake, will have

waterfront residences, serviced residences, retail amenities, fountains and water features, and water-

themed leisure attractions.

In a statement issued in 2014, Rafia said: “As per the MoU, Emaar will conduct the required feasibility

and environmental studies, and design a world-class project that is suited to the nature of the land. We

will evaluate the report submitted by Emaar to choose a development model that complements Al

Mamzar’s current status as one of Dubai’s most popular leisure destinations. Through the proposed

project, we aim to add further value to the area, in turn contributing to Dubai’s economy.”

Ahmad Al Matrooshi, Managing Director, Emaar, had also highlighted in the same statement that the

development potential of Al Mamzar will add to the “city’s economy by creating another engine of

growth in the Deira region.”

Emaar is currently working on a new waterfront project along Dubai Creek, which is being developed

through a joint venture with Dubai Holding. It is also working with Dubai World Central to develop

Legacy Park, a 70 million square feet golfing and lifestyle development, in close proximity to the World

Expo 2020 venue at Al Maktoum International Airport.


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DUBAI METRO ROUTE 2020 PROPERTY

HOT SPOTS: WHEN WILL RENTS RISE?

WEDNESDAY APRIL 15 2015

Dubai Metro’s Route 2020 project — the extension of Red Line rom Nakheel Harbour and Tower Metro

station to the Expo 2020 site - will drive price and rent increases in communities served by the new

route. This, however, will be only once it gets operational in 2018 and is unlikely to lead to any rental

increases this year, believe real estate experts.

The new route will serve areas such as the Gardens, Discovery Gardens, Al Furjan, Jumeirah Golf Estate,

and the Dubai Investment Park, which are home to over 240,000 residents.

The extended sector of the Metro line will stretch 15 kilometres and includes seven stations, including

two underground ones. “Rents and currently stable and prices are trending down in most locations

across Dubai.

“We expect average sale prices to decline by up to 10 per cent this year. The news of the new Metro

extension will not alter this general trend, but it will improve sentiment towards those areas to be

served by the new metro extension,” Craig Plumb, Head of Research, JLL Mena, told Emirates 24|7.

“The impact of this improved sentiment will be felt first in the sales market as it will result in higher

rentals being achieved in the future.

“These rentals will not of course apply until after the metro extension is completed and we would

therefore not expect the announcement to have any immediate impact upon rentals in 2015.” Mario

Volpi,

Managing Director, Ocean View Real Estate, said that any future expenditure by the government on

infrastructure will give a boost to [investor] sentiment and ultimately improve the fortunes of property

owners in those areas. “Dubai is spread far and wide and the more the city is connected via roads and

other means of transport, the more its outer lying developments become part of a thriving city,” he

stated.

A survey by Roads and Transport Authority (RTA), released in 2012, said value of property close to

Dubai Metro stations and tracks had surged by seven to 34 per cent since the transport system began

operating in 2009. Even studies conducted in countries such as the UK, Germany, Japan, Hong Kong,

and the US reveal that mass transit systems have had a positive impact on the value and rents of

properties, with hikes ranging between three and 50 per cent.

There is increasing evidence that locations next to existing Metro stations are commanding higher prices

and rentals, Plumb said, with the trend being most notable in locations such as Business Bay and

Jumeirah Lakes Towers – where towers close to the Metro are certainly performing at a premium to

those located further away.

The areas that will benefit most are those within 400 metres walk of the stations, with a progressive

decline in the benefit as you move further away from this radius.

A comparative analysis done by Emirates 24|7 in January 2014 found rents in residential towers near

Jumeirah Lakes Towers were between 13 and 26 per cent higher than those faraway from the station.

“There are no purpose-built high-density transit oriented developments (TOD’s) around the metro

system in Dubai to date, as the existing route is largely designed to service existing areas of

development.





“The new extension allows the opportunity to create new TOD’s around the additional stations and it will

be these that will benefit the most in comparison to the surrounding areas.” However, Mario felt it was

too early to predict the increase in prices, stating, “As these developments get plugged into the

transport system, more and more buyers/tenants will move there so eventually prices will be reflected

by this fact.”

Volumes may go up

Parvees Gafur, Chief Executive Officer, PropSquare Real Estate, also believes prices and rents are

unlikely to rise in the short term, but could led to increase in number of enquires and transaction

volumes. “The area on the Metro route will see an increase in transactional activity and will see

increases only after 2018.

“They will be the new investment hot spots but do remember that over the time we will see more new

communities being built and that could drive investor interest to other areas,” he stated.


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With 30 years of Middle East experience, Asteco’s Valuation & Advisory Services

team brings together a group of the Gulf’s

leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain,

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understanding of the local markets but also enables us to undertake large instructions where we can quickly apply resources to meet clients requirements.

Our breadth of experience across all the main property sectors is underpinned by our sales, leasing and investment teams transacting in the market and

a wealth of research that supports our decision making.

John Allen BSc MRICS

Director, Valuation & Advisory

+971 4 403 7777

[email protected]

Julia Knibbs MSc

Manager – Research and Consultancy - UAE

+971 4 403 7789

[email protected]

VALUATION & ADVISORY

Our professional advisory services are conducted

by suitably qualified personnel all of whom have

had extensive real estate experience within the

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