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DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN © Asteco Property Management, 2015 asteco.com | astecoreports.com

IN THE MIDDLE EAST FOR 30 YEARS

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 42 SUNDAY 25 October 2015





REAL ESTATE NEWS UAE

UAE RESIDENTS RELOCATING TO SHARJAH, AJMAN RELATIVELY DOWN

IN Q3: REPORT UAE MISSING OUT ON REWARDS FROM HALAL TOURISM

DUBAI

EMAAR, MERAAS LAUNCH MAPLE 2; SALES BEGIN 13 DAYS TO PROPERTY REGISTRATION DEADLINE: DUBAI LANDLORDS

FACE FINES DUBAI RENTS DROP: BUSINESS BAY, SPORTS CITY AND JUMEIRAH

PARK DRAKE & SCULL UNIT WINS MALL EXTENSION CONTRACT IN DUBAI DAMAC CHIEF HITS OUT AT DUBAI BROKERAGES OVER PROPERTY

MARKET REPORTS DUBAI PROPERTY ‘TOO EXPENSIVE’ TO GET IRAN SANCTIONS BOUNCE

DUBAI TO INTRODUCE ENERGY EFFICIENCY RANKINGS FOR BUILDINGS

JUMEIRAH GOLF ESTATES AWARDS CONTRACT FOR ALANDALUS HOUSING PROJECT IN DUBAI

DUBAI DEVELOPER NAKHEEL GROWS PROFIT OVER THIRD QUARTER DUBAI SOUTH SECURES DH4 BILLION FUNDING LINE AT EXPO MILAN

ABU DHABI

ABU DHABI’S RESIDENTIAL SPACE GETS FRAGMENTED

WHERE YOU CAN RENT ONE-BEDROOM UNIT FOR DH50,000 IN ABU DHABI...

BLOOM HOLDING TO LAUNCH SCHOOL BUSINESS OFFERING INTERNATIONAL BACCALAUREATE

TDIC STARTS HANDOVER OF VILLAS AT THIRD PHASE OF SAADIYAT BEACH VILLAS PROJECT

ABU DHABI OFFICE MARKET FEELS STRAIN OF LOW OIL PRICE

NORTHERN EMIRATES

HOW YOU CAN GET YOUR RENT BACK IN SHARJAH: CLICK TO KNOW





EMAAR, MERAAS LAUNCH MAPLE 2;

SALES BEGIN

FRIDAY 23 OCTOBER 2015

Dubai-based Emaar Properties and Meraas Holding will commence sales for the second phase of Maple

townhouses in the 2,700-acre Dubai Hills Estate in the Mohammed Bin Rashid City (MBR City) from

Saturday.

“Maple 2 townhouses will focus on green living. The extensive green landscapes and natural trails make

it the first choice for end-use homeowners and customers who seek long-term value,” Ahmad Al

Matrooshi, Managing Director of Emaar Properties, said.

Phase two of the project will have 666 contemporary-styled townhouses, ranging from 2,200 to 2,700

square feet, with prices starting from of Dh1,999,888 for a three-bedroom unit, the company said.

Three-bed townhouses in Maple 1, launched in April 2015, are currently listed for sale on online property

portals for Dh2.2 to Dh2.25 million.

The break up for the payment plan, as shared by Emaar listed brokers with ‘Emirates 24|7’, is as

follows: 10 per cent on booking (October 24) followed by payment of 10 per cent each in March and July

2016; 10 per cent each in January and September 2017; 10 per cent each in January and August 2018

and the final 30 per cent payable in September 2019 on completion.

Residents of the project will have access to high-end retail, two hotels, a tennis academy, an 18-hole

championship golf course, cafes and restaurants and several parks and natural trails.

Sales will be on a first-come, first-served basis in Dubai and Muscat. Investors who make a down

payment of 30 per cent of the total value of the property and maintain ownership until hand-over is

completed will be offered preferred access and the opportunity to own homes, subject to conditions, the

developer said.

Source: Gulf News

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UAE RESIDENTS RELOCATING TO

SHARJAH, AJMAN RELATIVELY DOWN

IN Q3: REPORT

THURSDAY 22 OCTOBER 2015

Inter-emirate relocation especially to Sharjah and Ajman were relatively much lower during this period

of growth in Dubai. (Shutterstock)

Apartment rents in International Media Production Zone (IMPZ) in Dubai rose between five and 13 per

cent in third quarter 2015 compared with second quarter, reveals a new report.

In its latest report, Land Sterling, a chartered surveyors and property consultancy, said rents jumped by

13 per cent to Dh45,000 per annum (pa) for a studio apartment on a quarter-on-quarter (q-o-q) basis,

while one-bed units increased by five per cent to Dh60,000 pa. Lease rates for two-bed units registered

a 12 per cent jump q-o-q to 18 per cent, with rentals averaging Dh100,000 pa.

In the second quarter, rents in the above community for studio and one-bedroom were down by 11 and

8 per cent q-o-q, with rates averaging Dh40,000 pa and Dh57,000 pa, respectively. Two-bedroom were

then renting for Dh85,000 pa.

# Dubai Marina

The pace of rental decline in Dubai Marina, the home to the four tallest residential towers in the world,

slowed down to 2 per cent in the third quarter for studio units from 5 per cent in the second quarter.

Average lease rates for studio stood at Dh81,000 pa compared with Dh85,000 pa. One-bed units saw

rents falling 8 per cent to Dh110,000 pa, while two-beds remained stable at Dh160,000 pa.

# Dubai Silicon Oasis

Similarly fall in rental rates slowed down in Dubai Silicon Oasis as well. Average annual rent for studio

unit were at Dh48,000, down two per cent q-o-q. One- and two-bed units were being rented for

Dh64,000 and Dh84,000 pa, down 2 and 6 per cent q-o-q, respectively.

# Discovery Gardens

Rents, however, rose for studio and one-bedroom apartments in Discovery Gardens. The former rose 4

per cent to Dh51,000 pa, while the latter increased by 4 per cent to Dh73,000 pa. Two-beds were fell by

5 per cent to Dh95,000 pa.

# Downtown Dubai

The consultancy reported a two per cent decline in rentals for two-beds in the upscale Downtown Dubai.

Average annual rate stood at Dh175,000 pa. Studio and one-bed units saw 2 and 4 per cent increase to

Dh92,000 pa and Dh135,000 pa, respectively.

# Jumeirah Lakes Towers

Leases for two-bed units in Jumeirah Lakes Towers declined by four per cent to Dh135,000 pa. Studio

and one-bed dwellings registered three and one per cent increase with annual average rent being

Dh67,000 and Dh94,000, respectively.





# Business Bay

In Business Bay, studio units rates rose three per cent to Dh80,000 pa. Both one- and two-bed

apartments reported three per cent decline with average rents at Dh96,000 pa and Dh140,000 pa.

#Dubai Sports City

One and two-bedroom units saw rents rising by 3 and 5 per cent in the third quarter. Average leases

rates at Dh75,000 pa and Dh115,000 pa, respectively. Studio rates remained stable at Dh52,000 pa.

#Jumeirah Beach Residence

Rentals for studio and one-bed apartments saw a reversal with rates rising 2 per cent to Dh87,000 pa

and 5 per cent to Dh110,000 pa. Two-beds stabilised with no further drops compared with the second

quarter’s three per cent decline. Average annual rents remains at Dh145,000 pa.

Rents on the rise

Overall, apartment rentals, Land Sterling said, rose per cent q-o-q in the third quarter with few areas

witnessing rental softening in certain unit categories.

“Residential rental performance in 2015 has been exceptional amidst the prevailing negative market

sentiment. Despite several project deliveries in 2015 till date, new supply has been absorbed by the

steady influx of residents in the emirate, as non-oil sector economic activity maintained its momentum

post second half 2015,” the consultancy said.

Inter-emirate relocation especially to Sharjah and Ajman were relatively much lower during this period

of growth in Dubai.

“Second-tier communities such as Dubailand continued to satisfy price conscious tenants with affordable

rental options and significant infrastructural improvements. Additionally, the increase in the transport

costs offset most of the gains of lower rents in Sharjah/Ajman,” the report stated.

Source: Emirates 24/7

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HOW YOU CAN GET YOUR RENT BACK

IN SHARJAH: CLICK TO KNOW

WEDNESDAY 21 OCTOBER 2015

Tenants in Sharjah can get rent refund provided they furnish evidence of a force majeure event, a legal

expert told 'Emirates 24|7'.

“The tenant can request for early termination prior to the expiry date to the landlord provided evidence

of existence of a force majeure event can be furnished in the absence of a contractual provision in the

lease,” said Aruna Mukherji, Associate - Property Practice, Al Tamimi & Company.

“Upon happening of such force majeure event, the Rent Disputes Settlement Committee in Sharjah may

order termination of the lease by payment of compensation by the tenant for a rent equivalent not less

than 30 per cent of the rent for the unused period.”

Likewise, the landlord can also request for early termination upon the happening of a force majeure

event and the settlement committee would order payment of compensation to the tenant in light of the

facts and circumstances of the particular case.

According to the lawyer, a landlord in Sharjah is generally not permitted to evict tenants prior to expiry

of three years from the signing of the lease and may terminate the lease upon the occurrence of

specified events of default by service of a written notice to the defaulting tenant.

“Even a tenant can request for early termination if the lease contains an early termination clause,” she

added.

'Emirates 24|7' has reported earlier that the Sharjah Municipality allows a landlord to fix a new rent post

the expiry of three-year rent contract, but tenants can file complaint if they think the increase is

“unreasonable”. In fact, landlords are not allowed to hike rent for two years post the first rental

increase.

Sajeel Kumar, an Indian who has just moved to UAE and rented a one-bed apartment, said he wasn’t

aware of any rent refund regulation in the emirate.

“I never knew there was such a regulation. It’s good to know that the emirate does protect the tenants

in case of any force majeure events,” he added.

In Dubai the contract cancellation terms are mentioned in the rent contract, with the norm being

landlord receiving two months’ rent as compensation. In cases where the landlord seeks higher

compensation than mentioned in the rent contract, the tenant can approach the dispute settlement

committee for relief.


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13 DAYS TO PROPERTY REGISTRATION

DEADLINE: DUBAI LANDLORDS FACE

FINES

MONDAY 19 OCTOBER 2015

With only 13 days (nine working days) left for property owners to complete their unit registration with

the Dubai Land Department (DLD), real estate developers have started reminding landlords to complete

the formalities by October 30, 2015, following which they could face penalties.

In notices sent to their clients, developers said: “As mandated by the DLD, all sold units require to be

registered before October 30 and failure to comply will attract action and penalties from the department.

To facilitate your unit registrations, visit our office to take this forward with the least delay.”

The developers further stated that in the event of non-compliance they will not be responsible for any

action or penalties that are likely to be implemented by the DLD.

In April 2015, Emirates 24|7 reported that developers were informing buyers/owners that DLD had

implemented a new regulation that ensured all registration charges of 4 per cent were payable upfront

by the end user against their respective units instead of the earlier provision of payment on completion

and all had to meet the deadline of June 30, 2015, or face heavy penalties. The deadline was, however,

extended by six months.

It is not clear whether the deadline is likely to be extended again, but real estate brokers rule out any

such possibility.

In an emailed response to Emirates 24|7, DLD had said that they would be applying the laws and

regulations of Executive Council Resolution No. 30 of year 2013 in the case of violators.

Article (6) of the resolution states: “Without prejudice to any severer penalty provided for by any other

law, anyone who commits any of the acts stipulated in Article (5) of this resolution shall be fined with

double the prescribed fees.”

Article (5) states: “Following actions shall be deemed as fees evasion: providing false data about the

value of the real estate transaction; using any trick or way of whatever kind or nature to evade the

payment of fees and doing any other act that would evade the payment of fees.”

Though DLD has ruled out doubling of property registration fee as penalty, property agents said owners,

missing the deadline, would have to pay double the current registration fee (8 per cent of the property

registration fee). Even a top real estate brokerage firm said owners, failing to comply with the

regulation, will face “tough” penalties.


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DUBAI RENTS DROP: BUSINESS BAY,

SPORTS CITY AND JUMEIRAH PARK

SUNDAY 18 OCTOBER 2015

Rents remained stable in most locations across Dubai, but fell by two and three per cent in Business Bay

and Dubai Sports City respectively, according to the latest report by Cavendish Maxwell.

Rates fell by up to three per cent in Victory Heights and Jumeirah Park from the previous quarter, with

prime locations continuing to demand premium rents, the real estate consultancy said in its third quarter

2015 report.

One-bed apartment in Downtown Burj Khalifa was being rented from Dh110,000 to Dh125,000 per

annum (pa), while one-bed unit in the Views or Greens ranged from Dh95,000 to Dh110,000 pa.

Lease rates fell on average by one per cent in villa communities such as the Meadows, the Springs and

the Lakes, but these communities continued to report strong rental activity during this year.

The first nine months of 2015 saw delivery of 6,000 residential units. These figures exclude serviced/

hotel apartments, the report said.

Completed developments were primarily delivered in Dubai Sports City, Dubailand, International City,

Jumeirah Golf Estates and Jumeirah Village Circle. Over 70 per cent of the completed developments

were in the apartment category, while the remaining 30 per cent fell in the villa and townhouse

segment.

“There were approximately 18,000 residential units scheduled to enter the market in 2015. Of those

6,000 units have been completed so far. We have seen many developments initially scheduled to be

completed at the end of 2015, delayed to the first half of 2016 or to a later date in 2017,” Cavendish

Maxwell said.

Price fall continues

Overall, apartment prices continued to drop, however, the rate of decline in prime locations such as

Business Bay, Downtown Burj Khalifa and Palm Jumeirah decreased.

In the third quarter 2015, prices continued to decline at the same rate as the previous quarter in Dubai

Marina, the Greens and Views, Jumeirah Beach Residence and International City. Dubai Sports City and

MotorCity declined at a more accelerated rate throughout this quarter.

Prices in secondary locations such as International City, MotorCity and Discovery Gardens declined the

maximum, falling 10 per cent, 10 per cent and 9 per cent, respectively, over a 12-month period from Q3

2014. In the more central and established areas, prices slipped by four to five per cent during the same

period.

“These slower rates of decline may suggest that prices will level out and stabilise leading to the end of

this year,” the consultancy said.

Decline in villa prices slowed in the quarter-on-quarter in communities such as Jumeirah Golf Estates,

the Meadows, the Springs and the Lakes. Price declines accelerated significantly in Jumeirah Islands,

Victory Heights, Arabian Ranches and Al Furjan.

Jumeirah Golf Estates villa prices fell by one per cent as against a three per cent decline in the previous

quarter.





Prices in the villa market declined by nearly 4.4 per cent in the first nine months of 2015 and nine per

cent over a 12 month period.

The consultancy believes additional supply entering the market could place further pressure on prices to

the end of 2015 and through 2016.

“Factors such as the estimated population and job growth leading to the year 2020, alongside the UAE’s

initiatives to encourage investment, will support the absorption of this upcoming supply,” it added.


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ABU DHABI’S RESIDENTIAL SPACE

GETS FRAGMENTED


Abu Dhabi’s residential market is recording some serious fragmentation, with low quality apartment

buildings in secondary locations experiencing rental declines. In these instances, rentals have been

averaging between Dh30,000-Dh50,000 for studios and one-bedroom units, according to the latest

update from CBRE.

But at the higher end of the rental spectrum, premium to very high-end units are fetching landlords

between Dh60,000-Dh105,000 for studios and Dh85,000-Dh150,000 for the one-beds. “After

maintaining around 2-3 per cent growth over the past quarters, average market rentals saw a marginal

decline if around 1 per cent quarter-on-quarter, but still maintained an annual growth rate of close to 8

per cent,’ CBRE report notes.

“Prime developments across the capital have shown greater resilience to the emergence of more

challenging market conditions during the quarter,” said Mat Green, Head of Research and Consultancy

UAE, CBRE M. E. “This is reflected in the widening rental gap, as rentals for new leases remain

unchanged from the previous quarter despite the prevailing market conditions.”

But the respite from rental gains, however slight, could be temporary. A drop is expected in the level of

completed housing units, which will ratchet up the pressure on the rental side of things.

‘The low level of expected completions over the next three years will help to provide a cushion against

the ill effects of the declining commercial market and a slowdown in some other sectors of the economy,

which ultimately influences demand for housing,’ the report adds.

Based on current estimates, Abu Dhabi will see 8,500 new residences getting completed in each of the

next three years as against the average of 11,000 a year during the last five years.

On the sale side, key locations such as Raha Beach and Reem Island had ‘marginal growth in annual

terms’, with rates increasing by 1-2 per cent (year-on-year). Average values range from Dh14,265-

Dh17,760 a square metre. Prices for more affordable masterplan developments, such as Al Reef and

Hydra Village, have remained unchanged during the quarter at Dh8,500-Dh12,375 a square metre.

But the overall market will have to factor in the strong headwinds blowing across the economy. There

are the cut in the UAE Government’s public expenditure levels, and the first one in 13 years. Earlier in

the year, the Abu Dhabi Distribution Co. also cut subsidies on utilities and which was followed up by the

removal of oil subsidies.

‘With economic challenges brought about by a period of lower oil pricing, US dollar strength and

sustained global uncertainty, the outlook for Abu Dhabi’s real estate market is for a further deflation in

the short-term,’ the report says.


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WHERE YOU CAN RENT ONE-BEDROOM

UNIT FOR DH50,000 IN ABU DHABI...


Although affordable housing remains a major concern for residents of the UAE capital, apartments in

tertiary locations offer economical housing options, according to CBRE.

“Rental prices for inferior housing units and those situated outside in tertiary locations ranged from

Dh30,000-50,000 per unit per annum for studios and one bedrooms respectively.

The price differentiation is attributed to a combination of factors including quality, location, facilities and

the proximity and accessibility of residential schemes to key commercial and social centres,” the global

consultancy said in its third quarter report on Abu Dhabi MarketView.

On average, annual rentals for upper middle and high-end properties ranged from Dh60,000-Dh105,000

per unit per annum for studios and Dh85,000-150,000 per unit per annum for one-bedroom units.

“Smaller units such as studios and one-bedroom apartment units remain in strong demand,” the

consultancy said.

Average rents declined one per cent in the third quarter 2015 compared with the second quarter 2015

though the annual growth rate stood at 8 per cent.

“The negative impact of the economic slowdown is evidently being felt in the Abu Dhabi residential

market, with rents finally being checked after a series of quarterly rental growth, which stretched back

to Q3 2013,” said the consultancy.

Villas beat apartments

In a statement, Mat Green, Head of Research and Consultancy UAE, CBRE Middle East, said that the

market was showing some signs of fragmentation, with older and poorer quality apartments -

particularly those in secondary locations - experiencing rental declines and dragging down the

performance of the wider market.

“However, residential villas depict a contrasting trend, recording a small increase of less than one per

cent during the third quarter.

"The limited supply, particularly within the main Abu Dhabi island, reinforced the steady performance of

this segment.”

Higher income individuals and corporate occupiers continue to show a preference for master-planned

developments, particularly established communities that offer residents access to facilities and services.

“As a result, prime developments across the capital have shown greater resilience to the emergence of

more challenging market conditions during the quarter. This is reflected in the widening rental gap, as

rentals for new leases remain unchanged from the previous quarter despite the prevailing market

conditions,” said Green.

The low level of expected completions over the next three years will help provide a cushion against the

“ill effects” of the declining commercial market and a slowdown in some other sectors of the economy,

which ultimately influences demand for housing.





On average, the emirate will see supply of 8,500 new housing units per annum over the next three

years as against 11,000 units, which have been completed annually over the past five years.

Sales prices rose by one to two per cent year-on-year (y-o-y), with average rates ranging from

Dh14,265 to Dh17,760 square metres. Prices for more affordable master plan developments, such as Al

Reef and Hydra Village, remained unchanged the third quarter at Dh8,500 to Dh12,375 square metres.

Short-term deflation

Commenting on the outlook of the market, Green said, “With on-going economic challenges brought

about by a period of lower oil pricing, US dollar strength, and sustained global uncertainty, the outlook

for Abu Dhabi’s real estate market is for a period of further deflation in the short term.

“We expect to see a fragmented marketplace, with more pronounced declines to be experienced in

secondary locations and for inferior products. As a result, we forecast that prime developments in the

office and residential sectors, will see steadier performances across rentals and occupancy rates, aided

by the availability of limited available stock, both currently and within the future development pipeline.”


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BLOOM HOLDING TO LAUNCH SCHOOL

BUSINESS OFFERING INTERNATIONAL

BACCALAUREATE


Bloom Holding is set to announce a deal with a top US education provider to launch a school business

offering the International Baccalaureate as part of its diversification strategy.

The Abu Dhabi company’s chief executive, Sameh Muhtadi, added that it is also in the process of

finalising agreements that will see it launch a number of healthcare businesses.

“We are diversifying our activities. We believe we can provide a better quality of living to our clients by

providing the best education services, healthcare services and facilities management,” said Mr Muhtadi.

“It’s complementing the offering we have in real estate and going beyond the residential component.”

He said he expected to finalise a deal with the US education firm, which he declined to name, within the

next two weeks.

“But I can tell you it’s one of the best schools in the United States, based out of Manhattan.”

Negotiations are ongoing to acquire the land for the school, which he has said Bloom is targeting to open

by September 2017.

“The school will require a lot of facilities and amenities, so finding the appropriate plot of land is going to

be key to where we site our first school,” Mr Muhtadi said. “It would be fast track, but we have

contractors on board that have committed to completing the school within a year.”

Talks are also under way to acquire a plot of land in Dubai to launch a new English curriculum Brighton

College in Dubai, following on from existing schools in Abu Dhabi and Al Ain.

In August, Brighton College claimed it had achieved the best results for an English curriculum school in

Abu Dhabi, with 52 per cent of its GCSE students achieving an A or A* rating this summer.

In health care, Mr Muhtadi said the company is finalising agreements with one of the top-ranked

children’s hospitals in the world and a hospital group related to “a very prestigious university” in the US.

It is also developing a polyclinic model – initially for its own communities, but which could be later rolled

out across the UAE.

“We are taking it very cautiously. We are doing studies and surveys to identify exactly where the

demand gaps are,” Mr Muhtadi said.

The potential for the UAE’s healthcare market come into sharp focus last week following competing bids

for Abu Dhabi’s Al Noor Hospitals. It agreed a deal that could see it sold to the South African private

healthcare company Mediclinic International for US$2.3bn, but its UAE rival NMC Health has vowed to

continue its own bid for the company.

A survey published last year by Alpen Capital estimated that the UAE’s healthcare market is set to grow

at an annual rate of 12 per cent to $69.4bn by 2018, up from $39.4bn in 2013. It said all GCC countries

face increasing demand for healthcare services due to a rapidly expanding population and a higher





prevalence of chronic diseases such as diabetes. Improvements in health care also mean many more

people live to an older age.

The number of people who are 65 or older across the GCC is set to surge from 1.2 million this year to

14.2m by 2050.

Bloom is part of the Abu Dhabi investment group National Holding.

Source: The National

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TDIC STARTS HANDOVER OF VILLAS AT

THIRD PHASE OF SAADIYAT BEACH

VILLAS PROJECT


The Tourism Development and Investment Company (TDIC), the master developer behind Saadiyat

Island, on Sunday said it had started to hand over 77 villas at the third phase of its Saadiyat Beach

Villas project.

The four-bedroom and five-bedroom villas, which range between 449 and 542 square metres in size,

were first put up for sale as off-plan investments at Cityscape Abu Dhabi in April 2013, where they were

priced between Dh6 million and Dh8m.

The TDIC said it was handing over the villas to buyers in phases and that it expected to complete that

by the end of next month.

The completion of the third phase brings the total number of villas in the TDIC’s Saadiyat Beach Villas

complex to 428.

According to the latest report from Asteco, Saadiyat Beach Villas remain some of the most expensive in

the capital.

It found that prices for villas on Saadiyat Island, the Abu Dhabi island earmarked for the city’s cultural

projects such as the Louvre Museum, stood at Dh5.47m for three-bedroom villas, Dh6.1m for four-

bedroom villas and Dh10.75m for five-bedroom villas.

Prices for villas in the second most expensive villa complex in Abu Dhabi, Golf Gardens, stood at Dh3.4m

for a three-bedroom home, Dh4.4m for a four-bedroom villa and Dh5.2m for a five-bedroom villa.

Annual rents for villas on Saadiyat Island ranged between Dh290,000 and Dh300,000 for a three-

bedroom villa, between Dh310,000 and Dh350,000 for a four-bedroom villa, and between Dh350,000

and Dh850,000 for a five-bedroom home.


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UAE MISSING OUT ON REWARDS FROM

HALAL TOURISM


The UAE has been missing out on a huge opportunity in the burgeoning halal tourism market, which is

growing at double the rate of conventional tourism, according to an industry specialist.

“Abu Dhabi, Dubai and Sharjah are part of a hugely strong brand – the UAE – but they offer very little

for halal tourists,” Elnur Seyidli, the chairman of HalalBooking.com, told the World Halal Travel Summit

in Abu Dhabi on Monday.

The market for Muslim travellers was worth US$145 billion last year and is expected to grow to $200bn

by 2020, according to the MasterCard-Crescent-Rating Global Muslim Travel Index (GMTI) 2015.

“If you look at halal beach resorts there are none in the UAE. Turkey is one of the few full service beach

resort destinations that offers separate beaches for women, women-only swimming pools, pools for

women with sons and family pools. They also offer prayer rooms close to the entertainment among

other halal attractions,” Mr Seyidli said

While city break hotels, centred on urban destinations, can have halal options, beach resorts need to be

solely focused on Muslim visitors as a mixed offering cannot work, he said.

Halal tourism is far more involved than the lack of alcohol in the destinations. It fully engages with

Muslim tourists, offering options that will enhance their holidays such as trips to important Islamic

destinations and shopping areas and is sympathetic to their faith.

But UAE hotel operators, travel companies and even tourism bodies have stepped up efforts to garner a

share of the sector.

Abu Dhabi Tourism & Culture Authority (TCA Abu Dhabi) has for the past year targeted the sector as an

important part of its marketing.

“We see halal tourism as a niche market,” said Sultan Hamad Al Dhaheri, acting executive director of

TCA Abu Dhabi. “Right now we are focusing on Arab nationals in Europe and we are trying to raise the

awareness in other markets such as Turkey and Malaysia. We know the whole region has a gap in beach

resorts offered for halal tourists and we are talking to developers and hotel operators about the

opportunities on offer in Abu Dhabi.”

Jasem Al Darmaki, the acting director general of TCA Abu Dhabi, said Abu Dhabi is set to undertake

international marketing initiatives with leading halal travel partners.

“We have already begun partnering with the world’s leading online accommodation booking platform and

our local destination management companies are supporting international operators with halal

products,” Mr Al Darmaki said.

Jannah, a hotel operator that recognised the opportunity for halal tourism. launching two years ago in

Abu Dhabi, has reaped the rewards in terms of occupancy and average room rate.

Dnata travel, a part of Emirates Group, on Monday announced that it has developed new tours and

services designed for Muslim travellers.

The company said the decision was based on research that showed Muslim travellers’ biggest unmet

needs on holidays were access to halal food and a Muslim-friendly experience.





Meanwhile, hotel operators are also planning Sharia-compliant properties in the UAE.

Ajman-based R Hotels will open Palm Jumeirah’s first halal-friendly and Sharia-compliant property in the

last quarter of next year. Another hotel on Ajman corniche will open in 2017.

“We make sure that for our existing, as well as new projects, we secure Islamic finance only,” said

Sumair Tariq, the managing director of R Hotels.

“Our properties cater to diverse markets across the globe and not just Muslim travellers.”

Nehme Darwiche, the chief executive and founder of Abu Dhabi-based Jannah Hotels and Resorts, said

that its focus on the halal sector has been paying off.

“We launched Jannah Eastern Mangroves in Abu Dhabi two years ago, and we have had an average 92

per cent occupancy, he said.

Mr Darwiche added that the company plans to open a 272-room hotel in Sharjah in 2016 and two more

are planned for Dubai and one in Fujairah in the next few years.


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DRAKE & SCULL UNIT WINS MALL

EXTENSION CONTRACT IN DUBAI


A Drake & Scull International unit has won a Dh224 million contract to install mechanical, electrical and

plumbing works for a new mall extension in Dubai.

Drake & Scull Engineering said yesterday that it had already started work on a 192,000 square metre

mall extension, which will include a high rise hotel and a low-rise podium comprising a hypermarket,

cinemas and additional shops.

The project is scheduled to be handed over by 2018.

DSI did not say which shopping centre it was working on or where the new project would be located.

Many of Dubai’s biggest shopping centres are in the process of adding new space.

Key expansions currently in process include a 1 million sq feet extension to Ibn Battuta Mall planned for

2018 that will feature a retractable glass roof over a 300,000 sq ft courtyard and another cinema.

Other planned extensions include extensions to Dragon Mart, The Dubai Mall, BurJuman and Festival

City.

An extension to Mall of the Emirates opened last month.

According to JLL, an additional 136,000 sq metres of new shopping space is expected to be delivered to

the Dubai market in the remainder of this year, mostly comprising extensions to existing malls.

And the broker expects 403,000 sq metres to come to the market next year pushing average retail rents

in the city down.

“We expect that this new space coming to the market, much of which is in the form of extensions to

existing malls, is likely to push rents down. This will probably mean that rents for super-regional malls

stay flat and rents for everything else falls,” said Craig Plumb, the head of research at JLL’s Dubai office.

On Saturday, the Dubai developer Nakheel announced that it had awarded nearly Dh2.3 billion of

contracts to build three new shopping centres in the emirate – the Deira Islands Night Souk, Warsan

Souk and the Circle Mall.


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DAMAC CHIEF HITS OUT AT DUBAI

BROKERAGES OVER PROPERTY MARKET

REPORTS


Damac Properties has accused some of the real estate sector’s biggest brokerages of “professional

malpractice” by publishing Dubai market reports forecasting excess supply.

Ziad El Chaar, managing director of the developer, slammed data put out by property brokers as

inaccurate and damaging to market sentiment, in an open letter sent to media yesterday.

Without naming any particular agency, Mr El Chaar criticised reports at the start of the year predicting

that as many as 25,000 homes would be handed over in Dubai in 2015.

“We announced to the market at the start of the year that we would hand over between 2,000 to 2,500

units over the course of 2015. Of that number, around 1,500 would be in Dubai. We remain on target to

achieve this figure,” he said.

“One of the other large developers in Dubai, Emaar Properties, has told the market it will hand over

circa 800 units in Dubai this year. That’s almost 2,500 units from the two developers that make up over

50 per cent of all the current inventory handovers in Dubai. So it begs the question … where are the

25,000 total handovers in Dubai in 2015 which was predicted within market research reports?”

Mr El Chaar said that while “such predictions help companies gain exposure and perceived authority …

they also have a detrimental effect on the generally positive sentiment in the market and they also have

the danger of turning people away from what remains a strong and well regulated market place”.

A Damac spokesman said that the developer had decided to speak up on the issue as a “leader in the

market” and that such reports have had no impact on Damac’s own sales figures or ratings.

JLL, the international property consultancy, at the start of the year forecast that 25,000 homes were

expected to be completed in 2015.

Yesterday, JLL declined to respond to Mr El Chaar’s comments. CBRE said in December that 65,000 new

units could enter the market between 2015 and 2017.

Nick Maclean, managing director for CBRE in the Middle East, said yesterday that the broker is confident

of its findings and that the issue in the Dubai market is one of affordability and not supply. “We compile

our price information from data from Reidin, the Dubai Land Department and our own valuation

department. In terms of future supply, if clients decide to elongate the development process then the

numbers will not be accurate at that time but in general we’re fairly confident in our numbers,” he said.

“What we are seeing is a reaction to excessive price rises in 2013.” Faisal Durrani, the head of research

at Cluttons, said yesterday it expects “something in the region of 20,000 units to be delivered in the

city’s freehold areas between now and the end of 2017, most of which will be villas, 70 per cent to be

exact”.

Some brokers admit, however, that figures can sometimes “slip” as developers decide to phase projects

differently in reaction to market conditions.






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DUBAI PROPERTY ‘TOO EXPENSIVE’ TO

GET IRAN SANCTIONS BOUNCE

TUESDAY 20 OCTOBER 2015

Dubai homes are 4.4 times more expensive for Iranians using local currency than they were five years

ago, meaning a lifting of sanctions against the nation would have little short-term effect on the emirate’s

slumping real estate market, according to Phidar Advisory.

“This is simply a matter of economics,” Phidar managing director Jesse Downs said by phone on

Monday. “The rial will take time to appreciate and until that happens, Dubai property will be very

expensive for Iranian buyers.”

Iranians have been among the largest buyers of homes in Dubai after Indians, Pakistanis and Britons,

fuelling speculation that lifting the sanctions would release a flood of investment in Dubai real estate.

Home prices in the emirate of Dubai were down more than 12 per cent in the third quarter from a year

earlier as a stronger dirham deterred Europeans and a slump in oil prices hurt economies across the

GCC.

As Iran’s second-biggest trade partner since 2009, the UAE is well-positioned to help Iran increase its

consumption of foreign goods, Phidar Advisory said in a report. However, sanctions relief would leave

Iran less dependent on the UAE than it is now.

Sanctions against Iran probably will be lifted within the first three months of 2016, after the

International Atomic Energy Agency has confirmed the nation has curtailed its nuclear work, diplomats

said last month.

If inflation in Iran is controlled, the country may retain capital and attract investment from abroad, Mr

Downs said. If not, cash will pour out of the country, but much of that will bypass emerging markets.

Iranian investors would gain access to the US and Europe where yields are higher compared with Dubai

and volatility and geopolitical risk are lower, according to the report.


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DUBAI TO INTRODUCE ENERGY

EFFICIENCY RANKINGS FOR BUILDINGS

TUESDAY 20 OCTOBER 2015

Dubai Municipality is planning to introduce a new ranking system for rating a building’s energy efficiency

and a new law setting minimum standards for retrofitting properties.

Speaking at the Emirates Green Building Council’s annual congress in Dubai on Monday, Nabil Siyam,

the principal building studies specialist at Dubai Municipality, said that both the ranking system and the

retrofitting standards are likely to be introduced in January next year.

“This will be four categories and will be introduced from 1 January 2016,” he said, referring to the

rankings.

The entry-level for ranking buildings will be the bronze category and will be based on the minimum

standards that buildings need to meet under Dubai Municipality’s Green Building Regulations, which

were initially introduced for government buildings in 2010 but became mandatory for all new buildings

last year.

“Then there are some enhancements or new requirements for the other classifications,” Mr Siyam said.

The new law governing retrofits for existing buildings, meanwhile, is likely to follow a similar pattern to

the rules for new buildings that became mandatory last year in that it will not be compulsory for private

projects in the first ¬instance.

“It will be launched but always Dubai Municipality will be giving our stakeholders an optional period,”

said Mr ¬Siyam. He said he could not give a date at this stage as to when it might become compulsory.

Meanwhile, Dubai’s Supreme Council of Energy senior director of strategy and planning, Taher Diab, said

that it is in the process of developing an “energy intensity map” for Dubai. “This is actually a tool where

you can look at where is Dubai’s highest [energy] consumption.That is naturally going to target older

buildings and facilities.

“We’re going to be looking at a sample of commercial, residential and industrial, and then take it to the

step where Etihad Esco, for example, can focus their strategic planning on where to target building

¬retrofits.”

Etihad Esco is a company that was set up by Dubai Electricity and Water Authority in 2013 with a remit

to help to improve the energy efficiency of Dubai’s existing building stock.

Abu Dhabi already has its own energy efficiency ranking for buildings, known as Pearl ratings under its

Estidama regime. However, thus far in Dubai, companies looking to prove a building’s green credentials

have generally adopted the US Green Building Council’s LEED (Leadership in Energy and Environmental

Design) standards. As a result, the UAE has the eighth-largest stock of LEED-rated buildings outside the

United States at 3.1 million square metres.

The new retrofitting law will utilise a framework that was developed into a set of technical standards by

the Emirates Green Building Council this year.

Saeed Al Abbar, the chairman of the Emirates Green Building Council, which is a not-for-profit industry

body, said there are 120,000 existing buildings in Dubai and that many of these were built before any

energy efficiency or sustainability regulations were in place.





“Even those that were built within the regulations, some are five or six years old and need fine-tuning or

refurbishing to ensure they are performing as well as they should be.”

About 35,000 of these have been identified as being suitable for major retrofits but others could benefit

from improvements in operational and maintenance practices to enhance their lifespan, he added.


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JUMEIRAH GOLF ESTATES AWARDS

CONTRACT FOR ALANDALUS HOUSING

PROJECT IN DUBAI


Dubai government-owned developer Jumeirah Golf Estates is pressing ahead with plans to build 674

mid-market flats and 54 town houses after it awarded a contact for the work to Al Habtoor STFA Soil

Group.

Construction work on the project, to be known as Alandalus, is scheduled to begin before the end of

October and be completed before EXPO 2020.

Prices for the apartments will start from Dh597,000, the developer said.

Yousuf Kazim, chief executive of Jumeirah Golf Estates, said that the project was the first in the region

to include mid market housing on a golf development.

Alandalus will also include shops, hotels, cafes and restaurants.


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DUBAI DEVELOPER NAKHEEL GROWS

PROFIT OVER THIRD QUARTER


Nakheel recorded a rise in third-quarter profit as it handed over homes and grew its retail business.

Net profits at the company rose to Dh780 million in the three months to the end of September, up from

Dh750m for the same period a year earlier, calculations show.

The developer said that the increase was “mainly due to continued strong performance by Nakheel’s

development business, with ongoing handovers of properties to customers”.

Nakheel said yesterday that it had made a net profit of Dh3.61 billion for the first nine months of 2015 –

up 39 per cent on a year earlier. Most of this profit appears to have been made in the first part of the

year.

Nakheel did not provide figures for its turnover during the period or any detailed breakdown of how its

profit was achieved.

The company, which is behind some of Dubai’s most ambitious projects including the Palm Jumeirah and

Ibn Battuta Mall, amassed debts during the global financial downturn, forcing it to cancel major projects.

Last year Nakheel reported that it had reduced its debts to Dh4.4bn from Dh12.3bn by repaying

Dh7.9bn of bank debt four years ahead of time. Nakheel’s trade creditor sukuk of Dh4.4bn is due to be

paid in August 2016.

The company has awarded a flurry of contracts over the past three weeks worth more than Dh3.1bn.

The latest of these was a Dh353.7m contract to build the Circle Mall between Sheikh Mohammed bin

Zayed Road, Al Khail Road and Hessa Street in Jumeirah Village Circle.

“We will continue to build on these results during the last quarter of the year,” said the Nakheel

chairman Ali Rashid Lootah.

Dubai property developers are facing tough trading conditions as a strong dollar and weakening

sentiment hit sales. JLL this month reported that average house prices in Dubai had fallen 10 per cent in

the 12 months to August 2015, while average housing rents in the city were down 1 per cent.

JLL said that it expected prices to continue softening over the remainder of the year and into 2016.


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DUBAI SOUTH SECURES DH4 BILLION

FUNDING LINE AT EXPO MILAN


The Italian export credit company Sace has announced a €1 billion (Dh4.16bn) credit facility to assist

the development of Dubai South.

The funding can be used for deals with Italian contractors or other goods and service providers from

Italy for the development of Dubai South, which is the world’s first purpose-built Aerotropolis being

overseen by Dubai Aviation City Corporation (Dacc).

An agreement for the funding was one of two signed at Expo Milan yesterday as part of an event

marking the forthcoming closure of the 2015 Expo and looking forward to Expo 2020 in Dubai.

An initial agreement was also signed with Abu Dhabi Ports to improve links between both parties.

The Dubai South deal was signed by Dacc’s executive president Khalifa Al Zaffin and the chief executive

officer of Sace, Alessandro Castellano.

“We have been using on a continued basis Italian technology as well as materials and goods in our

developments including Dubai International Airport,” said Mr Al Zaffin. “We welcome Italian businesses

to contribute to this great development with the support of Sace, which has been interacting with us

together with other Italian agencies to bring a fruitful -partnership.”

Mr Castellano said that the deal “will generate important opportunities for our companies, especially

small and mid-size enterprises, in one of the UAE’s largest investment projects”.

He added: “Dubai South will involve a variety of sectors in which Italy has extraordinary experience,

which we are certain will be employed in the new metropolitan area of Dubai, where Sace will be

opening an office soon.”

Dubai South is a 145 square kilometre city being built around Al Maktoum International Airport.

The airport itself will be the subject of $32bn worth of investment over the next decade with a view to

making it the biggest in the world with a capacity of 220 million passengers.

The city will also contain the Expo 2020 site, a Dh25bn residential zone known as The Villages, a

logistics and cargo district, a business park free zone, an aviation district and an Emirates Flight

Academy.

Last month, Dacc signed agreements with consultants JLL and CBRE to bring in international investors to

its business park free zone.

Sace currently has a portfolio of loans worth €78.5bn at September 30, which was a 5 per cent increase

on the same period last year.

The organisation said that its agreement with Abu Dhabi Ports would help to boost trade between the

UAE and Italy through the sharing of information offering business opportunities for Italian companies

that it could fund.

Already, Italian companies export €5bn in goods and services to the UAE, and bilateral trade between

the countries has been valued at Dh30bn.





Italy is the UAE’s second-biggest trading partner in Europe, while trade with the UAE makes up more

than half of Italy’s business in the GCC.

Mohammed Al Shamsi, the chief executive of Abu Dhabi Ports, said: “By facilitating initiatives of mutual

interest and expanding opportunities for trade and investment, Abu Dhabi Ports, the enabler of Abu

Dhabi’s maritime business, is supporting our mission to realise the Emirate’s economic diversification.”


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ABU DHABI OFFICE MARKET FEELS

STRAIN OF LOW OIL PRICE


Abu Dhabi’s office market is starting to feel the strain of lower oil prices with rents falling 4 per cent in

the third quarter of the year.

According to the property broker CBRE, average office rents in the emirate – a good indicator of the

city’s economy – slipped to Dh1,075 per square metre a year in the three months to the end of

September 2015, down from Dh1,118 per sq metre during the same period a year earlier.

During the quarter, Brent crude oil averaged about US$50 per barrel, down more than 50 per cent from

$102 per barrel a year earlier.

CBRE said the drop in oil prices had squeezed tenants in the oil and gas industry as well as the public

sector, who make up the majority of the Abu Dhabi market, leading to a slump in demand for office

space in a market that had never really recovered from the global financial crisis.

“With the oil and gas and public sectors serving as the primary office demand generator, demand for

office space from both new occupiers and expansion of existing end-users has started to slow,“ said

Matthew Green, the head of research in CBRE’s Dubai office. “These conditions have also had a knock-on

effect on other parts of the office sector, including some professional service companies, such as law

firms, which rely heavily on work from government and government-related institutions.”

However, Mr Green said that the price falls were mainly felt in the city’s ageing and inferior quality office

space.

Prime office rents remained stable at about Dh1,900 per sq metre on average.

CBRE said that the city’s highest office rents were found at Mubadala’s Abu Dhabi Global Market Square,

where asking rents start from Dh2,900.

However, the developer had shelved plans to lease the 183,000 sq metre block until the city’s financial

free zone opened.

Mr Green said that the lack of available top quality office space in the city meant that in future prime

rents were likely to remain more resilient to the economic slump, while the secondary market could be

subject to further falls in rents.

Abu Dhabi’s office market was hit hard by the global financial crisis. Prime office rents fell dramatically

from about Dh4,750 per sq metre in 2009 as the crisis led to firms reducing the amount of office space

they leased just as a glut of new prime office space hit the market in areas such as Abu Dhabi Global

Market Square, the Capital Centre and along the Corniche.


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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,

Dubai, Northern Emirates, Qatar, Jordan and the

Kingdom of Saudi Arabia not only provides a deep 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

Middle East and internationally.

Our valuations are carried out in accordance with

the Royal Institution of Chartered Surveyors

(RICS) and International Valuation Standards

(IVS) and are undertaken by appropriately

qualified valuers with extensive local experience.

The Professional Services Asteco conducts

throughout the region include:

• Consultancy and Advisory Services

• Market Research

• Valuation Services

SALES

Asteco has established a large regional property

sales division with representatives based in UAE,

Saudi Arabia, Qatar and Jordan.

Our sales teams have extensive experience in the

negotiation and sale of a variety of assets.

LEASING

Asteco has been instrumental in the leasing of

many high-profile developments across the GCC.

ASSET MANAGEMENT

Asteco provides comprehensive asset

management services to all property owners,

whether a single unit (IPM) or a regional mixed

use portfolio. Our focus is on maximising value

for our Clients.

OWNER ASSOCIATION

Asteco has the experience, systems, procedures

and manuals in place to provide streamlined

comprehensive Association Management and

Consultancy Services to residential, commercial

and mixed use communities throughout the GCC

Region.

SALES MANAGEMENT

Our Sales Management services are

comprehensive and encompass everything

required for the successful completion and

handover of units to individual unit owners.

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