Report shows interesting Dubai Real Estate Properties price trend

Dubai real estate prices are experiencing some changes. Prices in older districts located in Dubai have are changing and adjusting, with Deirah and Bur Dubai topping the list. Meanwhile, properties in Dubai Marina are changing as well. Studio and three-bedroom apartments that are on sale saw a decrease of 18% and 14% respectively. Renting rates for studios stayed the same, while three-bedroom renting rates are decreasing by 7%.

This report from Dubizzle also says apartments in Dubai Marina is the most popular real estate in Dubai for 2 consecutive quarters, with a staggering 4.9 million searches for one-bedroom apartments between April and June this year. Sales prices here have been decreasing, with an 18% and 14% change in studio and three-bedroom apartments respectively. Dubai Marina’s popularity remained at the top spot for two consecutive quarters in a row, with an impressive location being the most searched during this year’s Q2 with over 20 million searches.

Property price tags for Dubai real estate’s prime location Palm Jumeirah, saw a change in sale prices as well.  Prices for studio and two-bedroom apartments are increasing from 1.45 Million to 1.54 Million and 3.2 Million to 3.5 Million respectively.

The other side of the city also had price changes. Real estate in Dubai’s Deira showed price increases due to a lack of new properties along a sustained demand by occupants. This is why even if prices in these so-called older areas are relatively more affordable than new property developments, there is still a price shift that makes it better aligned with property prices across Dubai. Rental prices for studio apartments in Deira climbed by 18%, while those in Bur Dubai went up from 60K to 65K. Three-bedroom unit prices in the same location also increased from 150K to 158K.

Asked to comment on the report, Dubizzle’s Product Marketing Manager for properties Ms. Ann Boothello said: “The Dubai property market is softening as per the price changes experienced in Q2 this year. Some areas have experienced while older areas in Dubai showed price increases in reflection to a maintained level of demand for these older units and the alignment of their prices with those in newer areas in Dubai. An example of this is that now a studio in Bur Dubai is rented out for AED 65,000 annually and in Dubai Marina at AED 70,000.”

She continued to say that “prices of properties for sale decreased across Dubai, with the exception of studios and 2 BR apartments on the Palm Jumeirah increasing up to 6%. Abu Dhabi on the other hand, experienced price increases in for sale and rent properties; however Al Reem Island saw a drop in prices for 1, 2, and 3 bedroom apartments.”

New Luxury Hotel to be operated by Jumeirah Group in RP Global’s Mixed-use Development

RP Global, the leading Dubai real estate property investment company, has appointed the global luxury hotel company Jumeirah Group, to operate a mixed-use development under RP Global’s US$1-billion iconic tower. Called the Jumeirah Business Bay, this new piece of real estate in Dubai will feature a hotel with 200 rooms, 350 serviced apartments, and 290 luxury residences under the Jumeirah brand.

Offering stunning views of the Burj Khalifa and other parts of the city such as Downtown Dubai, the super-tall tower will have a floor area amounting to over 3 million square feet. Designed to be an urban luxury destination, the tower will showcase a rich variation of food and beverage stalls, an award-winning Talise Spa and Health Club, banquet and conference facilities, and an open-air roof top Sky bar. Situated just behind the Dubai Metro station in Business Bay, this new Dubai real estate property is designed by the distinguished Atkins Global architectural and engineering firm. Atkins Global is also the one responsible in designing the world-famous Burj Al Arab hotel.

Among the tower’s exhilarating features is its sky attraction. It’s a dynamic interactive experience literally higher than anything else. The tower gives its visitors stunning vantage points high above Business Bay.

 “RP Global is a company committed to excellence, and we look forward to working together and operating this outstanding property. Jumeirah has a reputation for luxury and exceptional hospitality, and our partnership reflects the strong synergies between Jumeirah Group and RP Global. As Dubai moves towards its tourism vision of receiving 20 million visitors a year by 2020, we are proud to be strengthening our Jumeirah portfolio in Dubai”, says Jumeirash Group’s President and Group CEO Mr. Gerald Lawless.

Dr. Ravi Pillai, chairman of RP Group of Companies, which is the holding company of RP Global, stated that “We are investing close to US$1 billion of our own resources into Dubai’s real estate sector to develop a world-class tower that will be operated by the esteemed luxury hospitality brand, Jumeirah Group. RP Global is committed to superior quality and timely delivery and like the Jumeirah Group, we strive to create well designed, innovative lifestyle concepts for our buyers. Dubai’s resident population is growing rapidly and we are looking forward to adding an iconic tower to Dubai’s skyline in partnership with Jumeirah.”

The management agreement between the two companies was signed at a ceremony that took place at the Burj Al Aram, Jumeirah Group’s flagship property. Jumeirah Group currently has 23 hotels in operation scattered in Europe, the Middle East, and Asia. It has 25 more in the pipeline under the Jumeirah and Venu property brands.

RP Global is the real estate development company of RP Group of Companies, a conglomerate established by Dr. Ravi Pillai. It has operations in 20 cities across nine countries. The group has a wide-ranging stake in different industries such as hospitality, construction & industrial development, healthcare & wellness, and education & trading. It has executed projects worth over US$25 billion globally, and operates across Middle East, Africa, Australia, and Asia.

The Maturation of Real Estate in Dubai

 Dubai, compared to its neighbouring emirates and countries within the GCC, has been known to have a very distinct freehold on the way they conduct business. However, there has been a requirement for increased regulation in the market recently, which means that the free-reign of freehold might be coming to an end. But not for the wrong reasons.

After the property bubble collapse left so many investors with bad experiences a few years ago, it was high time for the government in Dubai to enforce strict procedures and rulings for the Dubai real estate market.

Over recent years, Dubai has seen increases in regulations and increased amount of stability in the market in what experts proclaim as a maturing of the market.

Typically there are many definitions of what may defined as a mature market, but a few key identifiers could be described as follows:

•    A market is mature when prices have reached a state of normalcy.
•    When movement in customers’ needs and desires do not appear to be evolving rapidly.
•    Consolidation by leading competitors reducing competition.
•    Market shares of leading competitors being solidified and changing gradually, if at all.
•    Regulatory frameworks, legal protections and regulations aimed at protecting consumers and businesses are in place and implemented.
•    Steady regular profits and growth for the developers.

The United Arab Emirates has only recently been classed as an emerging market by the MSCI. This means it has a long way to go before it’s on par with more developed countries and cities. But looking at the identifiers above, there are a few items pointing to market maturation. So we asked Andrew Chambers, CEO of GGICO Properties and long time real estate veteran, for enlightenment as to what would be the signs that a real estate market is maturing?

INCREASED REGULATIONS

-    Increased regulations aimed at reducing short term speculation and flipping is when speculators buy, with minimal deposit down and flipping or reselling before property is even registered with Oqood. Oqood is a service provided to developers by the Dubai Land Department which aims to ease the registering of all types of contracts between off-plan properties developers and buyers. It allows developers to manage their off-plan properties and participants within a simple framework and user-friendly bilingual Arabic-English interface.

While this was rampant before, it is much less prevalent now—with RERA regulations prescribing registration of transactions. Also, the rate of capital growth of property has slowed tremendously compared with certain years over the last decade.

MORE NEGOTIATIONS

-    Buyer and seller expectations on a price to exchange are at least close enough to allow for realistic negotiations. At present, sellers are asking higher prices than buyers are willing to pay. This has slowed the rates of sale in the market.

LESS RISKY FINANCIAL LEVERAGE

-    When small firms or individuals borrow multiple times and speculate on “off plan” or projects with payment plans in hope that they can resell and make a premium before later payments due.

STABILIZING MARKET PRICES

-    We still see more of a supply driven market, which has suited Dubai’s great growth and has worked when viewed over 10 years or so. But with a steady, measured and considered growth, a planned release of products will help stabilize the market. The market remains a little oversupplied at the luxury end 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 remains inelastic to these macro trends and developers and investors that capitalize on this will be amply rewarded in the years ahead.

BROKERAGE MARKET

-    Tremendous steps have been and are continuing to be taken to control the behaviour of brokers. Also, the slow down clears out many non-performing agents and agencies. Less rogue agents and slowing down the amount of players in the market will be good for market confidence and stability.

AFFORDABILITY

-    The last decade has seen an enormous volume of Top End/Luxury properties become available, which has sold well. Unfortunately, this has left behind the requirements of regular, salary earning expat demands from those living and working here, with requirement for more modest housing that can be afforded from salaries and a level of mortgage. This is now starting to be addressed by some developers in areas such as SO and DSC, where more mid level property, with good payment plans allowing people to buy to occupy.

CLEARANCE FROM BANKS BOOKS OF TOXIC/PROBLEM STOCK

-    The past 5 years has seen banks stuck with many non-performing or incomplete properties in default. This is not good for a stable property market. This seems to be resolved now, with many projects restarted with adequate finance and good business plan to see the construction to completion.

SUMMARY

Whilst there is some way to go for Dubai to be recognized as what the world sees as a Mature Market, Dubai has well survived turbulent times and a number of the issues raised here either resolved or in the process of being resolved.

Nevertheless, it is still important to keep Dubai as being seen as a robust and very positive market position in the World’s eyes.

This can be helped with the continued investment in infrastructure and continual innovation and investment in such opportunities as EXPO2020, WC Airport growth, continued development of tourist attractions such as mid range hotels, theme parks, and other attractions to boost further Tourism growth.

Dubai’s retail optimistic with tourism’s wave

Dubai tourism industry’s strong outing in 2014 has clearly had a positive effect on the retail sector. Undeniably, these two sectors have been closely correlated, with millions of international and regional tourists flocking the emirate each year to enjoy what has become known as the fashion capital of the Middle East. Tourists are especially drawn to the many malls and high-end luxury brands that exist in the emirate. Even as Dubai maintains its high rank in the world of retail, the sector continues to cater to an ever wider market. New mixed-use developments and mall expansions are highlights in the city’s retail real estate space.

CBRE’s global market research report “How Global is the Business of Retail?” 2015 edition shows that Dubai retained its position as the second most important international shopping destination globally for the fourth consecutive year, behind London. Dubai has a presence of 55.7% of international retailers, only less than 3% behind London (58%). Last year, Dubai attracted 45 new international brands with high-profile retailers including Hollister, Cavalli Caffe and McQ Alexander McQueen opening outlets in the emirate.

Top target markets new entrants

The growth in Dubai’s retail sector is linked to a strong economic recovery, the increase in consumer confidence and growing retail supply, along with government support to boost tourism. According to Emaar Malls, the Dubai Mall welcomed almost 80 million visitors last year, up almost 7% from 75 million visitors in 2013-further testament to the growing appeal of the Dubai Mall as a major retail destination for international tourists. Around 60% of The Dubai Mall visitors last year were reckoned to be UAE residents and other GCC tourists, while the other 40% were tourists from outside the Dubai's Retail Sector - retailers regional expansion.

Chinese tourists proved to be one of the biggest draws for Dubai’s hospitality market in 2014, with a 25 percent year-on-year growth in Chinese tourists. The UAE government recognises the tremendous potential the retail and tourism industries hold for the economic growth and in line with Dubai’s tourism vision for 2020, significant steps have been taken to achieve the target of attracting 20 million annual visitors by 2020. In 2013, the UAE government announced to grant on arrival visas to 13 additional nationalities from the European Union. Measures such as these will positively impact the tourism sector and enable the emirate to attract more business and leisure travellers, thus giving boost to the retail sector and further strengthening Dubai’s competitive advantage in the global arena.

Dubai remains the clear destination of choice for the majority of brands looking to enter the region for the first time, frequently using the emirate as a stepping stone to wider regional expansion programmes in the GCC. While 2015 is expected to be more testing for the tourism sector in view of the falling oil prices and economical and political uncertainty in some countries, Dubai however has strongly positioned itself as the premier tourist and leisure destination in the Middle East making it relatively resilient to market fluctuations.

The current retail stock in real estate in Dubai measures around 2.34 million sqm. with a retail supply pipeline of around 675,000 sqm. between this year and 2018. This retail pipeline consists mainly of existing mall expansions, including those of The Dubai Mall, Mall of the Emirates and Ibn Battuta Mall. These are in addition to the new malls – Nakheel Mall and The Pointe on the Palm Jumeirah-currently under construction. Additionally, there are key master plans to be developed in the coming decade, mainly Dubai Creek Harbour and Mall of the World. The malls envisioned there will be larger than Dubai Mall, which will potentially change the emirate’s retail landscape drastically.

With plenty to do, excellent infrastructure and world-class shopping and hotel facilities, tourism-driven retail growth in the emirate is set to continue.

Original post from Roots Land Real Estate

The Dubai Retail Real Estate Market Prediction vs Reality for 2015

Demand for Dubai’s retail sector was strong in 2014 driven by growth in spending, a relatively large demographic of young affluent adults, increasing tourist demand, and growth in GDP. The Dubai Mall attracted a record 80 million visitors in 2014 and retailers experienced 14% growth in sales compared to 2013, accounting for approximately 5% of Dubai’s GDP.

The Beach, at Jumeirah Beach Residence, launched in 2014, and City Walk (Phase One) saw a number of new outlets open during the year, including brands from outside of the GCC. Both of these schemes are outdoor lifestyle destinations offering a mix of retail, F&B, wellness and entertainment. Nakheel also announced the development of a number of community retail centres in 2014, with Discovery Gardens and Jumeirah Park Pavillion now open.

Two significant retail IPOs took place in 2014 in Dubai. The first of these was Marka, the UAE’s first public joint stock company focused on retail and hospitality investment, and secondly, Emaar Malls Group. These listings mark a key change in retail market sentiment, evidence by significant investor interest in the IPO and over subscription, following a five year IPO lull since the onset of the global financial crisis and political unrest in the region.

Predictions

1.       Retail trends witnessed in 2014 show that consumers are demanding more than just shopping amenity from malls. Retail environments have evolved to integrate wellness, leisure, F&B and lifestyle to enhance the visitor experience and appeal to wider demographics. We predict this trend will continue in 2015 and will differentiate further between prime and secondary malls, especially in the context of large planned increases in supply.

2.       Dubai’s status as a leading retail destination globally is predicted to continue to drive demand from world renowned retailers. Apple has announced that it will open a new regional store in Dubai in 2015, which is expected to be their biggest outlet in the world. We predict additional demand from leading retailers for flagship stores, who have not yet debuted in Dubai.

Reality

The first quarter of 2015 continued to see quiet activity in Dubai’s real estate market. The retail market continues to be constrained by the slowdown in spending, restricting overall growth levels.

The first quarter saw Dubai’s retail market remain largely stable. Despite recording strong annual growth levels, average retail rents registered no quarterly increases. Similarly, vacancy levels remained at 8% as no major deliveries took place, except for the handover of ‘Box Park’ by Meraas. The subdued nature of the retail market comes as the industry copes with a drop in the number of visitors from Russia, while the weak euro threatens visitors from the Eurozone. Performance of the retail market is expected to remain stagnant throughout 2015, following estimates of a slowdown in retail sales growth figures. The latter is likely to put pressure on retailers and squeeze out some of the small & midsized tenants as they become burdened with achieving targets to meet high rents.

 According to statistics issued by Visa, the total Visa card spend in the first 2 weeks of Dubai’s Shopping Festival (DSF) 2015 increased 12% Y-o-Y to reach USD 54 million. In terms of spending growth patterns, restaurants witnessed the largest annual increase; 31% compared to 2014 figures. Predictably, visitors from Saudi Arabia emerged as the top spenders, contributing USD 35 million to the UAE’s economy, and representing a 29% Y-o-Y increase. Given the general stability in the sector, these figures portray the significant impact the event has on Dubai’s retail market.

SOURCE: Roots Land Real Estate

Dubai Development Legal Requirements from Al Zahmy

Dubai real estate requirements is based in the conditions made for the real estate developer business in Dubai. The real estate developer is defined under law as: “Any natural or juristic person licensed to purchase and sell properties with a view to developing the same with such definition including the main developer or sub-developer.”

In addition, real estate development is defined as “Development of multi-storey buildings or complexes for residential and commercial purposes.” The Government of Dubai developed clear and simple conditions for licenses. It supported these conditions with strict requirements to determine the duties and liabilities of the parties involved in the real estate development together, with safeguarding the same parties by imposing strict penalties against those who breach such provisions. These actions ensure transparency and bolster confidence in the real estate sector in hopes to attract investors to the city. The development of the real estate sector remain promising despite challenges.

Licenses 

In order to proceed with a real estate development project, the real estate developer shall comply with the provisions of the law governing the off-plan sale of the real estate properties. This is the most fundamental element of real estate development as it represents a business by offering real estate units to investors against installments with a view to achieving profits together with a parallel endeavor to convince banks of the profitability of financing real estate development projects.

The local lawmaker in Dubai determines the legal body governing such a business in the Land Department of the Government of Dubai, which is responsible for maintaining a special register for real estate developers, and determining the banks in which the developers and financiers can deposit the installments of the real estate units under the account of the real estate project. Accordingly, since inception, the real estate developer has to open the escrow account, in which the amounts paid by the purchasers or financiers of the real estate units sold off-plan are deposited.

Article (3) of Real Estate Development Escrow Account Act (8) of 2007 stipulates that the provisions of this law apply to those who sell units off-plan and receive payments from purchasers. Further, Article (4) emphasizes that no developer may engage in such business, advertise in local or foreign media or participate in exhibition for promoting real estate units or properties sold off-plan unless it is registered in and licensed by the Land Department in Dubai represented by its director general.

Article (7) of the Act stipulates in relation to the real estate escrow account that any developer who wishes to sell units off-plan must submit a request to open an Escrow Account and attach the following documents:

(1) A certificate of membership in the Dubai Chamber of Commerce and Industry;

(2) Trade license;

(3) Title deed of the plot to be developed;

(4) A copy of the contract concluded between the master developer and the sub-developer;

(5) The initial architectural designs and engineering drawings approved by the Competent Entities and the master developer;

(6) A financial statement of the estimated cost and revenues of the project approved by a certified chartered auditor;

(7) An undertaking by the sub-developer to start the construction works of the project upon having obtained the approval of the master developer for off-plan sale, or an undertaking by the master developer if there is no sub-developer; and

(8) A standard sale contract between the Developer and the purchaser.

All such established conditions are required for opening the escrow account that shall be accompanied by an agreement made in writing between the real estate developer and the escrow (the bank in which the payments made by purchasers of units sold off-plan or by the financers of the project are deposited). Such agreement shall determine the account management conditions, rights, and obligations of the contracting parties with a copy thereof being deposited with the Land Department.

Now, to tackle some of the real estate developer’s obligations, the following question must be answered:

When is the real estate developer deemed late in the performance of its obligation to complete the project?

Real estate developer delay in the performance of its obligations to complete the project is a very considerable, albeit expected risk associated with building and construction agreements with their diversified requirements. Such requirements include the approvals to be obtained from governmental bodies and the duties of the developer, the main contractor, and subcontractors. Therefore, a specific body shall be nominated to bear solely such liabilities and risks in consideration of the investment advantages, margins of profits, and speculations.

Because of this, the lawmakers has not left this issue to the will of developers or investors. Instead, the Government of Dubai has specifically determined the standards relating to the issues that the real estate developer may encounter while executing the real estate project.

The review of the real estate law indicates the cases where the real estate developer is deemed in default in the completion of the project, Article (21) of the Executive Council Resolution No (6) of 2010 approving the Executive Regulations of Law No (13) of 2008 Regulating the Interim Real Estate Register in Dubai expressly states the reasons deemed beyond the reasonable control of the real estate developer, as follows:

(1) If the plot where the project is to be constructed is expropriated.

(2) If a government body has frozen the project for re-planning reasons.

(3) If a building remains or manuscripts are discovered within the site of the project.

(4) If the Master Developer makes alterations to the project site entailing the alteration of the project boundaries and area in a manner affecting the performance of the sub-developer’s obligations.

(5) Any other grounds to be estimated by the Agency. 

Strict Penalties for Violations

Powers vested in dealers and investors are subject to providing a secure, safe and stable investment atmosphere where the investor has broadest credit powers by entering into off-plan sale agreements with investors together with concluding banking finance agreements with banks and financial institutions to finance the real estate project.

Accordingly, the lawmaker has ensured the proper guarantees for both investors and banks. In this regard, Article (16) of the Real Estate Development Escrow Account Act (8) of 2007 stipulates that without prejudice to any penalties stipulated by any other legislation, an imprisonment sentence and a fine of at least one hundred thousand Dirhams (AED 100,000), or either penalty, shall be imposed on those who:

(1) Engage in Real Estate Development activity in the Emirate without a license;

(2) Provide the Competent Entities with incorrect documentation or information in order to obtain a license to practice the Real Estate Development activity;

(3) Knowingly offer for sale Units in fraudulent Real Estate Development projects;

(4) Steal, appropriate, or forfeit any amounts of money delivered to them for the purpose of implementing Real Estate Development projects;

(5)As for auditors, deliberately preparing a fraudulent report upon auditing the financial standing of the Developer or deliberately failing to disclose material facts in their report;

(6) In the case of consultants, knowingly certifying fraudulent reports on a Real Estate Development project; or

(7) In the case of Developers, dealing with a real estate broker who is not registered on the Real Estate Brokers Register maintained by the Department in accordance with Bylaw No. (85) of 2006 concerning the Real Estate Brokers Register in the Emirate of Dubai.

Furthermore, Article (17) stipulates that the real estate developer shall be de-registered and punished with penalties set forth in Article (16) in the cases where:

(1) It is declared bankrupt;

(2) It fails, without an acceptable reason, to commence construction works after the lapse of six (6) months from the date on which he was granted permission to sell Units off-plan (as may be estimated by the Land Department in Dubai);

(3) The license granted to the Developer by the licensing entity is revoked;

(4) It commits any of the violations stipulated in items 2, 3, 4 and 5 of Article (16) of this Act; or

(5) It violates any of the laws and bylaws regulating the activity of Real Estate Development in the Emirate.

Original post from Roots Land Real Estate

Real Estate in Abu Dhabi Experiences Significant Growth in the Real Estate Sector for 2014, 2015 Looking Better

Villa prices raised by 16% and apartments prices go up by 15%. Rental rates went up by 10% apartments and 9% for villas; even rental rates increased by 10%, and 9% for apartments and villas respectively. This means that the demand for prime spaces continues to grow.

For 2015, investors in the real estate sector in Dubai and Abu Dhabi can expect continued rental growth and stable capital values, thanks largely in part to the strong performance in 2014 according to the latest Abu Dhabi real estate report from Asteco, Middle East’s largest independent full service real estate company.

In the Abu Dhabi Property Review: 2014 Highlights & 2015 Outlook of Asteco reported that Abu Dhabi’s real estate market had experienced growth over the recent years and 2015 will continue this trend. There will be a stream of growth in real estate, specifically in rentals and investments.

On 2014, the average sales rates for apartments increased by 15%, villas 16%. Volume of transactions declined in H2 due to the shortage of quality projects for sale in the secondary market, which is a good sign for real estate investors because the demand clearly outweighs the supply. The high sales volumes experienced at the newly launched projects in Ansam, Al Hadeel and Mamsha Al Saadiyat proved that demand for quality projects exists.

“Popular master-planned developments for sale included Saadiyat Island and Al Raha Beach while Reem Island proved to be an attractive area providing more mid-market units. We expect apartment sales prices to remain stable this year as the market becomes more competitive due to the imminent handover of new projects,” said Jerry Oates, General Manager, Asteco Abu Dhabi.

Year-on-Year comparisons starting from 2008 to 2014 highlight the continuous apartment sales price growth since 2012, up by 48% for all areas combined. Sales price in Al Muneera at Al Raha Beach is now priced at an average of AED 1,425 per square foot, up 21% compared with last year. Meanwhile, rates at Reef Downtown also climbed 21% to an average of AED 1,000 per square foot. Marina Square also saw a 17% increase to an average of AED 1,375 per square foot.

Villa sales prices had strong growth too, growing 47% on average for Al Raha Beach, Golf Garden and Al Reef Villas during the period.

According to the report, the villa sales market will be almost stagnant as there will be limited prime and high-end villa projects available for sale in the primary and secondary markets in 2015.

Rental rates for apartment were up by 10%, while villas rentals rose by 9%. A prime two-bedroom apartment currently rents for AED 175k-180k per annum with high-end units achieving AED 140-175,000.  Mid to low-end units records an affordable AED 90k-120k.

Villa rental rates are expected to increase during 2015 due to a shortage in quality villa units with occupancy rates expected to remain high.

An average four-bedroom villa could be leased for AED 239,000 per annum in Q4 2014.

The biggest increases in rental rates in 2014 were on Saadiyat Island and Marina Square on Reem Island. The year was also marked by a positive level of transaction activity as tenants continued their flight to quality.

New mid to high quality developments at still relatively affordable rents are encouraging relocation by tenants to upgraded accommodation, with older properties and lower quality projects being placed under increased rental and occupancy pressure.

The Abu Dhabi rental market in 2015 is expected to see continuous strong levels of demand. A range of new projects are due for handover in 2015 including an anticipated 13,000 apartments and villas which will come online, will have an impact on the Abu Dhabi real estate market by creating greater competition, particularly in apartment rents.
-Jeremy Oates

Asteco expects this to continue in 2015 with occupancy rates in popular developments maintaining their current high levels. 

“The Abu Dhabi rental market in 2015 is expected to see continuous strong levels of demand. A range of new projects are due for handover in 2015 including an anticipated 13,000 apartments and villas which will come online, will have an impact on the Abu Dhabi real estate market by creating greater competition, particularly in apartment rents,” said Oates.

Abu Dhabi’s office market was stable in 2014, as landlords of single-owned buildings maintained their asking rates. However, it is anticipated that as new developments such as ADDAX Tower on Reem Island hand over during the year, rates for multiple-owned office space in the Investment Areas could come under pressure as individual landlords compete to secure tenants. 

Since 2013, the Abu Dhabi real estate market has continued to strengthen, a trend Asteco predicts to continue throughout 2015

Source: Roots Land Real Estate

Dubai Property Market Update - Dubai Properties

The real estate in Dubai and the UAE has experienced a breakthrough this year, following the positive performance of the market last year, 2014. This is a major sign of growth and confidence for all the players in the field, especially right after the plummet of the real estate industry during the recession. There have been many improvements made by the industry recently. It has matured in terms of best practice, and serving up regulations & laws to protect both the investor and the developer. These changes have made a positive contribution to ensuring controlled, sustainable market growth in the years to come.

The latest industry reports have reflected a slowing, albeit gradual, pace of price increase; which means that these changes made are positively impacting market behaviour.
From a Dubai Properties perspective, the market this year has put us in a desirable position to build on the strategies that allowed us to experience growth across our portfolio in 2014.

Last year, the demand from investors for residential projects such as Dubai Wharf launched at Cityscape has continued to perform strong, and we expect the same performance from projects that we’ll be addinf this year. As noticed, other DP developments have recorded sell-outs and prompted the release of further units last year. 

We believe 2015 will build on the success that we made last year. For the real estate market, and for DP in particular, our strong sales has been a clear reflection of not only the positive market conditions, but also our successful strategy to develop practical, high quality, and sustainable projects in every segment and area of Dubai that offer essential amenities and facilities to enrich the lives of residents and end users.

DP has already delivered over 36,000 residential units, 2.8 million sq. ft. of office space and over 1.2 million sq. ft. of retail space to the market across key areas of Dubai. The main projects that were launched in 2014 include: Mudon, Remraam, Manazel AlKhor, and Dubai Wharf, some of which, as said earlier, experienced sell-out successes.

DP will continue to develop a growing portfolio of retail, commercial, residential, hospitality and mixed-use projects, and we are still continuing to grow, as future projects across all sectors are being put in the pipeline. These aim to be tailored to meet the needs of real estate investors in the region. We will continue to align our business with the current market demand by launching new projects that provide strong investment opportunities. 

Collectively, the real estate industry in Dubai is continuously experiencing strong growth with investors looking for ‘value for money’ projects across the city with completed infrastructure, accessibility and quality building and finishing. Our projects will continue to meet this market demand in line with Dubai’s growth across the residential, commercial, and retail sectors while continuing with the strategy to develop projects in prime locations of Dubai. 

Winning the Expo 2020 presents a huge opportunity for Dubai’s real estate industry, and as a leading developer with a wide range of projects in every segment and area of Dubai, we are well-placed to capitalise on the increasing requirements which this will bring. 

Moving forward, we plan to launch more projects that cater to the increasing population expected in Dubai over the coming years, from affordable apartments, to villas & townhouses, and high-end luxury accommodation across key areas of Dubai.

Mohammed Al Habbai

Chief Officer for Urban Planning and Infrastructure, DPG

Original post from Roots Land Real Estate

Dubai Property Prices To Fall Another 10%

Image by buckofive via FlickrReal estate prices in Dubai, already nearly 60 percent from their peak, are set to fall another 10 percent over the next two years, as new devices are released in a market flooded with offers, according a Reuters poll.

A Dubai real estate boom collapsed in late 2008 when he was beaten by the global financial crisis and debt crisis of the Persian Gulf state is.

Housing prices in the state of the Persian Gulf, home of the tallest building in the world, which has 900 homes plunged 58 percent from their peak in the fourth quarter of 2008, according to the median estimate of 15 banks, firms investment and research institutions.

Prices in Dubai and Abu Dhabi fell five percent and 10 percent respectively in 2011, according to the survey, which was taken last week.

The decline continued in 2012 with prices of 4 per cent in Dubai and Abu Dhabi 4 percent, according to the median forecast.

Abu Dhabi, United Arab Emirates and home to most of its oil, weathered the financial crisis better than Dubai, but now faces an oversupply of goods. Prices have already fallen by 45 percent.

In the latest sign of the housing market is in trouble, Abu Dhabi government has intervened with an aid package of $ 5.2 billion for the state's largest developer Aldar Properties will help the company meet looming debt obligations.

Analysts do not see the Dubai real estate market bottom out until the second half of this year, as soon as possible.

Rents in Abu Dhabi is to reduce by 13 percent in 2011 and 5 percent in 2012, according to a median forecast of 12 analysts.

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• Dubai islands falling into the sea: Dubai World sinks after fund crisis (dailymail.co.uk)

Seddiqi Launches First Branded Rolex Tower in DIFC

Seddiqi & Sons Investment, the real estate arm of the UAE's leading timepiece retailer, Ahmed Seddiqi & SonsAhmed Seddiqi & Sons announced the launch of the Rolex Tower, the first of its kind in the Middle East and the only branded Rolex Tower globally not owned and managed by the watchmaker itself.

Created by Skidmore, Owings and Merrill, the architects behind the Burj Khalifa and Canary Wharf, the Rolex Tower in Dubai is to offer 25 floors of two and three bedroom apartments including two luxurious penthouses, as well as 31 levels of premium commercial space and a ground floor for high end retail offerings. The Rolex Tower's design, finish, panoramic views and bespoke services are the hallmarks of its status as the premiere address in the heart of the city's business district.

Mr Abdul Hamied Seddiqi vice chairman of Ahmed Seddiqi & Sons said that "This venture marks Rolex's first endorsement of the Middle East's property sector and to be entrusted with the Rolex brand is a testament to the company's collaboration with Ahmed Seddiqi & Sons over the last fifty years. The launch of the Rolex Tower demonstrates our conviction that quality and service are among the most vital considerations whether buying a watch, finding a home or building a business."

The materials and expertise deployed in constructing the Rolex Tower underscore the premium nature of the building with 40,000 meters of aluminum and glass being used for the exterior, 3385 tonnes of steel and 29,150 cubic metrics of concrete underpinning all baths and public areas. Residents can enjoy IP TV and video on demand complemented by high speed wireless access while businesses in the Rolex Tower will make use of keyless entry controlled floor access and secure generous onsite parking.

Sourced from www.thenational.ae

Dubai Holding Unit Delays Repayment of $555 Million Loan for Second Time

Dubai Holding Commercial Operations Group LLC, a real estate and hospitality group owned by the emirate’s ruler, said it received an extension on a $555 million revolving credit line until Nov. 30.

All lenders to Dubai Holding Commercial agreed to extend the facility, the company said in a statement to Nasdaq Dubai today. The facility is extended under “commercial terms,” it said.

Dubai Holding Commercial in July received a two-month extension on the loan at “commercial terms,” the company said then.

Source: Bloomberg

More gloom for Dubai real estate market as second property index shows price falls in second quarter

The oversupply of residential property in Dubai is predicted to peak in 2012 with vacancies of between 25 and 28%, according to the latest real estate report by Landmark Advisory.
At the same time distressed sales are leading to accelerates price declines, according to the Dubai and Abu Dhabi Real Estate Report for the third quarter of 2010 from the consultancy.

‘As prices are falling faster than rents, this is pushing up yields,’ said Jesse Downs, director of research and advisory services at Landmark Advisory.

‘This is positive for the market as higher yields are required to attract investors wary of the weak market fundamentals and perceived downside risk. At the moment, financing remains limited, which means investors continue to dictate market trends,’ she explained.

The report found that sale volumes slowed in the second quarter, compared to the first. Prices for villas dropped by 5% and apartments fell by 5.8% as a result of limited buyers and tighter lending restrictions.

In neighbouring Abu Dhabi quality issues could lead to a rapid reshuffling of the market as the new higher quality supply is delivered, the report also points out. Downs expects only 20% of high end properties in the pipeline will meet the standard, which will have a knock on effect on prices for mid-range homes.

‘However, we predict that this trend will be temporary, with performance weakening and not recovering once the truly high end developments are delivered,’ she added.

In Dubai and Abu Dhabi rental costs declined across the board with Dubai villas down 4.4% and apartments down 5.8% during the quarter. Abu Dhabi rents dropped by 11%, a sharp decline compared with 3% in the first quarter of the year.

‘These declines are supply driven following new on-island deliveries such as Khalidiyah Palace, Al Aryam Tower, Silver and Wave Tower. Static sales prices and declining rents have resulted in further yields compression, currently at 5.1%, and we anticipate that yields will continue to compress in the short term,’ Downs explained.

The figures confirm those released by consultants Colliers International earlier this month which showed house prices fell by 4% in the second quarter of the year compared with an increase of 2% in the first three months of 2010.

The consultancy is predicting that around 33,000 new units will be released onto the market by the end of the year, less than its original estimate of 41,000 due to project delays or rescheduling.

‘There are already more than 340,000 residential properties in Dubai with an average occupancy rate of 87%, with further declines anticipated,’ said Colliers International’s regional director, Ian Albert.

‘The market simply cannot absorb the additional supply unless the population grows and/or the release of stock is slowed down,’ he added.

Albert also warned that a dramatic drop in rents made home ownership a less attractive option for investors in terms of income generation, another factor that was weakening demand.

Property Market in Dubai

Dubai is the emirate of the UAE, the seventh and the second largest in area after Abu Dhabi. The bulk of sales in Dubai is generated from the property and tourism. This is one reason that most people prefer to invest in Dubai property market to make profitable business and make huge profits. Real estate projects in Dubai are simply delightful and a center of attraction for visitors. The climate in Dubai is also dry so it is a perfect choice for real estate agents to invest in.

Opportunities for Buyers

Various options are available to real estate buyers in Dubai that the real estate market offers a wide range of people. Apartments, flats, villas, condominiums and more, buyers have a choice to choose something that would meet their needs and tastes. Buyers who think that the Dubai property market needs a lot of investment can find different properties for what they are looking at incredibly reasonable prices. The best part is that people can easily obtain the property at a favorable spot without having to worry about additional costs.

Opportunities for Investors

As buyers, investors can also get help in investment in Dubai real estate market. There are many options for investors who can buy products at reasonable prices and sell at prices which has been successfully established large profits. Real Estate in Dubai has helped many people to earn huge profits from their properties and take full advantage of the market. All you need to keep in mind are associated laws that are essential, especially when buying or selling a property. If you are new to the real estate market, then real estate agents can provide much help in the management of procedures, legal obligations and other requirements.

Dubai Property Owners Now in Control of their Units

Dubai property owners can now play an active role in management and operation of their towers and communities as per the new regulations which provide the framework for the ‘Dubai Jointly Owned Property Law,’ said an industry expert.

The guidelines, implementing ‘Dubai Jointly Owned Property Law' Law No. 27 gives home owner associations control over who maintains their units, choses service levels and costs and also the much-disputed service fees.

The new ‘Dubai Jointly Owned Property Law' paves way for the legal establishment of home owners associations, said Nicole Betts, head of Association Management, at Dubai-based Asteco Property Management.

“Now that the much anticipated and long awaited regulations are effective, the dawn of a new era in the Dubai property market is upon us. This legislation will bring much need transparency, guidelines and real estate regulatory authority (Rera) directive to the emerging industry of association management. It is good for the market,” she noted.

According to Betts, the idea of home owner associations managing service levels and controlling service fees transparently was ‘good for the market.’

"Until now the way in which jointly owned freehold property has been operated has not been regulated, it has been left up to the developer to provide property management services or outsource them to facility management companies and service charges have been calculated and collected by developers," she pointed out.

“These methods of operation have been widely detrimental resulting in a poor level or lack of services such as cleaning, security, pest control and maintenance of the buildings facilities and an inaccurate representation of service charges to the market due a multitude of factors,” the expert added.

As with any new regulation, Betts said there is a period of adjustment and property owners, developers and service providers will no doubt "face challenging times ahead for as full understanding of the regulations and their implementation becomes understood."

“The effect on the property industry will ultimately be a positive one, providing much needed transparency and disclosure on the operating costs for projects as well as project specifications and contractual arrangements,” she added.

Asteco Property Management manages several informal owners associations in Dubai and its association management team recently attended the Rera ‘Owners’ Association Management Program’ at the Dubai Real Estate Institute.

“We intend to be one of the first organisations to be licensed by Rera to manage owners’ associations as well as providing both developers and property owners with professional consultancy services to assist them with the compliance and transition of their developments,” Betts noted.

According to her, these new regulations will certainly reassure overseas investors. "Transparency is essential especially for foreign owners and to now have an owners association to help protect their interests will certainly boost confidence in the Dubai market."

"Historically, on occasions, there have been challenges in collecting service charges from owners, some refusing to pay believing that they were not legally obliged to do so," she explained.

The regulations will bring much needed legal support which will ultimately enable the owners association to file a lien (security interest) over a unit where the owner refuses to pay their service charge obligations.

“In the current economic climate, investors more now than ever need their properties to earn their keep, providing a continuous income stream and optimal return on investment. A well presented and managed building always initially attracts a better quality of tenant and most importantly retains them longer,” Betts added. TradeArabia News Service

Aramani Hotel Dubai Opening Delayed

The opening of the first hotel designed by Giorgio Armani will be delayed due to volcanic eruptions in Iceland that forced flight cancellations from Europe, according to BusinessWeek.

The Armani Hotel Dubai, in the Burj Khalifa, the world's tallest building, was scheduled to open its doors on April 21, but the opening date has now been pushed to April 27.

Every element of the hotel has been designed by the fashion legend, says a report by International Herald Tribune.

The 160-room hotel will feature eight restaurants and house Armani-branded retail stores, it says.

Real Estate Rents Expected to Drop More

Dubai Real Estate market overview report last month according to Jones Lasalle, Dubai’s present stock of office space stands at 43.6 million sq. ft. Currently, the vacancy level is estimated to be 33 per cent of that or about 14.4 million sq. ft. In addition, the 2010-2012 pipeline of newborn supply has been updated 33 per cent due to delays and project cancellations to 40 million sq. ft. from 60 million sq. ft. Roughly 54.4 million sq. ft. will most certainly remain vacant, that calculates to a vacancy rate of 65 per cent.

The average grade A rentals like in Downtown Burj Khalifa or Dubai International Financial Centre, are currently at Dh250 per sq. ft. and are estimated to decrease even further before stabilizing by 2011 at the earliest.

Approximately 54.4 million sq. ft. priced at a Dubai average of Dh150 would yield roughly Dh8.2 billion of annual revenue for landlords. So what do you do when you can’t rent all this space?

Consultancy firm CB Richard Ellis also reports and predicts that commercial and residential property rents in Dubai will continue to decline this assemblage due to oversupply and rising vacancy rates. Lease rates for commercial space in newer areas of Dubai, which have already dropped 50%, are expected to head lower ‘as competition for tenants continues to lead landlords towards greater incentive packages’, the report said. Residential units are also likely to see ‘a further diminutive contraction during the course of the next assemblage as a substantial volume of newborn residential accommodation reaches the final stages of construction’, it said.

Big move predicted in Dubai real estate

Dubai real estate market will see a shift from quality creation to quality management in 2010 as it looks to rebound from the impact of the global economic downturn, according to Jones Lang Lasalle.

Real estate brokers now recognize as separate professional category

The prospect of an 'all professional' concept in Dubai Property moved a step closer today with the Real Estate Regulatory Agency (RERA) announcing an commendation with the Ministry of Labour (MoL) to have Dubai real estate brokers officially recognised as a separate professional category.

New Labour Cards and Residence Visas issued to realty broker will now include their designation, in exchange to the previous practice of categorising them all as sales staff.

RERA is near to finalising a comprehensive agreement with the MoL which will see all the professions it registers - much as valuers, consultants, mortgage brokers, agents, and surveyors -formally recognised as separate job categories by the Ministry. Marwan containerful Ghulaita, Chief Executive Officer of RERA, said, \"This is the first step towards a complete classification of the real realty professions in Dubai.\"

Dubai Real Estate Brokers Warned by RERA

Dubai real estate brokers have been warned by the Real Estate Regulatory Agency (RERA) that they face losing their licence if they fail to intend approval before running any direct marketing campaigns. The move aims to halt unlicensed brokers from sending unsolicited and often inaccurate text or SMS sales messages to the public, following complaints from individuals who have been the target of book campaigns. Yousef Al Hashemi, Head of RERA's Licensing Department, said: 'Our priority is to ensure the campaigns are legitimate and not misleading,' adding: 'Failure to comply could mean the loss of a licence or entrance not being renewed. The rules are clear and should be rigorously implemented so to protect buyers and investors. For our part we routinely check all requests for authorisation to separate campaigns.

Real estate maintains healthy coverage in Q3

Despite the drop in new projects in the UAE, real estate companies maintained a healthy exposure in the local media with Emaar recording maximum coverage.

The Mediastow Q3 report on the real estate industry revealed that negative coverage of the property sector decreased considerably in the third quarter, compared to the same period last year. The report, the fifth in the series, analysed the media coverage of the UAE real estate sector, with a focus on Al Qudra Real Estate, Aldar, Emaar, Sorouh, Dubai Properties, Nakheel, Sama Dubai and Damac.

The 34-page report assessed the success of PR campaigns of the eight real estate developers, as well as threw light on how their media coverage fluctuated, and how it compared with each other.

Emaar – the largest real estate developer in region – maintained its lead in all sectors including manifest (explicit material exactly as it appears), PR driven and non-PR categories.

PR driven campaigns were not the highest content generators as "manifest" reports topped the list for Emaar in July 2009. This was closely followed by non-PR and positive reports in most months of the third quarter and PR-generated reports were a distant third and fourth in ranking for most of the time for all the developers.

The head of Mediastow, Mohamed Elzubeir, said: "As for coverage, Damac and Emaar had their amount of coverage peaks in July 2009, while Al Qudra Real Estate, Sama Dubai and Sorouh had their peak in August 2009. Finally, the coverage of Aldar Properties, Dubai Properties and Nakheel peaked in September."

Emaar, followed by Sorouh and Aldar, figured in the top three in terms of newspaper coverage size, measured in column centimetres (cc), in July and August 2009. September saw Nakheel in the lead, followed by Emaar and Aldar. A total of 3,962 articles from 168 publications were monitored between July and September 2009 for the report. Also, stocks movements of Emaar, Aldar Properties and Sorouh were evaluated and correlated with media coverage.

Compared to the third quarter of 2008, there was a general drop in numbers, with some experiencing a bigger drop than others. Al Qudra, Emaar and Nakheel experienced significant decreases in Q3 2009, compared to the same period in 2008, in terms of the volume of coverage.

In comparison to the 2008 Q3 report, there was a considerable drop in coverage of news items covering deals and partnerships. Even though the news of the landmark merger plans between Emaar, Sama Dubai, Tatweer and Dubai Properties was announced during this period, but it did not match the coverage of the same subject in the previous year's third quarter.

Damac and Al Qudra almost disappeared from the news coverage on deals in the last month of Q3, while Sama Dubai gained the maximum climbing up to 40 points to be at the top. Emaar maintained a steady position alternating between the second and third slot during the period, while Nakheel took a major plunge from leading in the same period in 2008 to a distant fourth in September 2009.

The overall drop in the coverage was most contrasting in the project category covering launch, reviews, updates and completion. From a healthy 246 points as the highest point of coverage, the average in third quarter of 2009 fell to below 50 points.

In a surprising turn of events, almost all leading developers increased their CSR activities.

Nakheel recorded the maximum coverage with 66 points and Emaar at a close second at 58. Other developers Aldar, Dubai Properties and Sorouh also increased their efforts and got reasonable exposure in return (all above the 30-point mark).

Print media – shouldering the maximum amount of media exposure in advertising and reporting – carried on the momentum with Emirates Business giving maximum exposure to Emaar, followed by Aldar and Surouh. Nakheel received the maximum exposure from The National and Arabic daily Al Khaleej gave maximum coverage to Dubai Properties and Damac.

Emaar, Aldar Properties and Sorouh experienced an upward trend in the third quarter of 2009. Aldar enjoyed a decent rise in terms of share prices throughout the quarter and inched up further during the latter part of September 2009.

The differences in coverage were not that great in terms of OTS (opportunities-to-see) and coverage size, with the exception of Al Qudra Real Estate, which experienced a very sharp drop. Interestingly, Aldar Properties maintained an average of 15,000 OTS throughout Q3 2008 and Q3 2009. Average OTS is a measure of the number of chances an average member of the target audience will have of being exposed to an advertising campaign.

September 2009 saw healthy recoveries in terms of OTS and coverage, as it exceeded September 2008 figures. This was the case for Damac, Dubai Properties and Emaar. Interestingly, while September 2009 provided healthy figures for newspapers' coverage size, it also substantially lowered coverage sizes of magazines.

The Prominence Index rankings were worse in 2009 across the board. Sorouh and Nakheel were the only two developers that managed to maintain the same Prominence Index in August 2009 compared to August 2008. July 2008 was the best month for the property developers in terms of Prominence Index in the third quarter of 2008, while September 2009 was the best month in the third quarter of this year.

Source: Business24/7