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NEWS BRIEF 10
SUNDAY, 05 MARCH 2017
RESEARCH DEPARTMENT
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REAL ESTATE NEWS
UAE/ GCC
UAE-BASED INVESTORS SAVE MILLIONS AS DEMAND FOR LONDON PROPERTY
SURGES
MID-MARKET OPTIONS COME KNOCKING IN UAE HOTEL SECTOR
GCC LEADS THE WAY IN SMART APPROACH TO DEVELOPMENT
UAE MILLENNIAL HOMEOWNERS LOWER THAN GLOBAL AVERAGE
DUBAI
AHMED BIN SAEED LAYS FOUNDATION STONE OF SILICON PARK PROJECT
WAYFINDING IS NOT JUST ABOUT PUTTING UP SIGNS
FOR LUXURY PROPERTY, IT IS ONLY DUBAI IN THE REGION
EMAAR REVEALS A 72-STOREY HOTEL FOR THE DOWNTOWN
BUSINESS BAY PROPERTIES START SEEING GAINS
ESSENTIAL CONTRACT TERMS TENANTS SHOULD KNOW
ONE DUBAI DEVELOPER LOVES BEING IN THE SUN
PAYMENTS PLANS AND CONSTRUCTION MILESTONESS
SCHON TRANSFERS HALF OF DUBAI LAGOON PROJECT TO XANADU TO EXPEDITE
COMPLETION
LUXURY IN 22 CARAT HOMES
DEIRA ISLANDS: FREEHOLD IS PART OF THE PLAN
ESSENTIAL CONTRACT TERMS TENANTS SHOULD KNOW
DUBAI REITERATES STRICT RULES ON MARKETING OVERSEAS PROPERTY
WAYFINDING IS NOT JUST ABOUT PUTTING UP SIGNS
DUBAI COMPANY READY TO 3D PRINT YOUR HOUSE, SAYS 19-YEAR-OLD FOUNDER
EMIRATES REIT REPORTS LOWER PROFIT AS VALUE OF PORTFOLIO MATURES
BLOOM AND FOUNDATION SIGN JOINT VENTURE DEAL TO BUILD STAFF
ACCOMMODATION
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REAL ESTATE NEWS
ABU DHABI
AFFORDABLE HOMES ARE STILL SO FEW IN ABU DHABI
ALDAR MID-MARKET FOCUS SIGNALS COMING SURGE IN ABU DHABI PROPERTY
NEW DH92M PALM JUMEIRAH VILLAS TO FEATURE ‘WORLD’S MOST EXPENSIVE
BATHS’
NORTHERN EMIRATES
TOP SHARJAH LOCATIONS WHERE RENTS ARE CHEAPER
INTERNATIONAL
LONDON HOUSE MARKET RETURNS TO TEMPT INTERNATIONAL BUYERS
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AHMED BIN SAEED LAYS FOUNDATION
STONE OF SILICON PARK PROJECT
Monday, 27 February, 2017
His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dubai Silicon Oasis Authority (DSOA), the
regulatory body for Dubai Silicon Oasis (DSO), the integrated free zone technology park, today unveiled the
commemorative plaque and laid the foundation stone of “Silicon Park”, the first integrated smart city project
taking shape at the hi-tech park. Once complete, the landmark development spanning 150,000 square meters and
constructed at a cost of Dh1.3 billion will reinforce the green credentials of Dubai and the wider UAE.
Hosted under the patronage and presence of His Highness Sheikh Ahmed bin Saeed Al Maktoum, the unveiling
ceremony was attended by Dr Mohammed Alzarooni, Vice Chairman and Chief Executive Officer of DSOA, and
senior management from DSOA.
Set for completion in Q4 2018, Silicon Park will comprise 71,000 square meters of office space, 25,000 square
meters of commercial space, 46,000 square meters of residential area and the 115-key business hotel Radisson
RED Dubai Silicon Oasis. In addition, it will feature value-added contemporary lifestyle facilities, such as
restaurants, cafés, prayer rooms, a shopping centre and an underground parking space that can accommodate
more than 2,500 cars.
His Highness Sheikh Ahmed bin Saeed Al Maktoum said: “In line with the vision of His Highness Sheikh
Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to
transform Dubai into the smartest city in the world, we have conceptualized Silicon Park with smart technology at
the core of its DNA.”
He added: “With the objectives of the UAE Vision 2021 in mind, the integrated smart city project reflects global
trends for smart cities and incorporates most of the KPIs of the UAE National Agenda, including cohesive society,
safe public and sustainable environment. We are confident Silicon Park will offer a modern holistic lifestyle for
residents, workers and visitors.”
For his part, Dr Mohammed Alzarooni said: “Since its establishment, Dubai Silicon Oasis has remained committed
to providing a superior quality of life for its residents and a highly enabling work environment for its business
partners. In line with the Dubai Plan 2021, we have designed Silicon Park to reflect the strategic direction of our
government on smart cities that focuses on six pillars: life, society, mobility, economy, governance and
environment.”
As a smart community, Silicon Park will feature intelligent solutions from charging docks for smart devices on the
streets to smart pop-up furniture and digital play tables, as well as optimally designed bus shelters, piazza
shading and other public amenities. Furthermore, its residential units will boast sophisticated remote-controlled
systems that can regulate lighting, air conditioning and electrical appliances in addition to controlling the
movement of windows and curtains.
Silicon Park’s sports amenities, such as health and fitness centres as well as running tracks and cycling trails, will
allow residents to prioritize their health through enjoying a variety of sporting activities, and therefore live more
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holistic lives. Once open, the project will offer a spectrum of office spaces and modern business facilities including
meeting halls and a multi-purpose conference centre.
In compliance with Dubai Municipality’s Green Building Regulations and Specifications and international LEED
standards, DSOA seeks to ensure environmental sustainability in all its initiatives.
Silicon Park will leverage green building materials and control mechanisms as well as solar panels and doubleglazed windows to reduce heat absorption. The project will optimize the use of renewable energy resources and
adopt measures to achieve efficiency in energy consumption. In line with this objective, it will feature smart
lighting systems with motion sensor controls that respond to traffic and pedestrians.
Silicon Park will also include a control centre that collects and analyses data gathered through sensor devices. The
collated information will enable seamless management of smart devices to ensure the delivery of best-in-class
smart services to employees, residents and visitors.
Completely free of regular vehicles, Silicon Park will use electricity-powered alternatives as the primary mode of
transportation. All residents and visitors owning electric vehicles will be able to access the charging stations set up
across the premises. In addition, they will have the option to use smart rechargeable electric bikes as a means of
conveyance.
A wholly owned entity of the Government of Dubai, DSO operates as a free zone technology park for large
enterprises as well as medium and small companies looking to set up their offices in Dubai.
Source: Emirates 24/7
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DUBAI REITERATES STRICT RULES ON
MARKETING OVERSEAS PROPERTY
Tuesday, 21 February, 2017
The Dubai Land Department has repeated its directive on how overseas properties should be marketed and sold
in Dubai. This includes the requirement that sellers must obtain its approval before advertising these properties
in Dubai.
The circular also emphasises that buyers must follow the legal procedures outlined in the country concerned, and
preview the property before settling contracts and making payments.
Permits for any announcements related to property — whether inside or outside of the country — must be
obtained via the DLD’s Trakheesi system.
To obtain a permit to market here, companies must submit a copy of the title deed, a letter from the country in
question which describes the property’s ownership. There must also be a marketing agreement between the
property’s owner and the brokerage firm, and a copy of the property certification (translated into Arabic) from the
UAE Embassy and the Foreign Ministry.
According to Ali Abdullah Al Ali, director of the Real Estate Licensing Department at the Real Estate Regulatory
Agency (Rera), “This circular is intended to protect residents who are interested in making real estate investments
outside of the country. It encourages brokers to be accurate and cautious in any campaigns that promote
properties abroad, and advises everyone to follow the correct legal procedures, regardless of the contracting
parties, and deal with accredited brokerage offices.”
The circular, however, will not broker the issuance of contracts of sale or receipt of any payments from the client.
Source: Emirates 24/7
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BUSINESS BAY PROPERTIES START SEEING
GAINS
Saturday, 04 March, 2017
After the mid-market freehold communities, value gains in Dubai’s property market are now showing up more
consistently higher up the value chain. The high-rise cluster was one of the beneficiaries during the February
transactional volumes, according to data from ValuStrat.
“Monthly uplifts of 0.5-1.8 per cent were recorded for apartments located in International City, Business Bay,
Motor City, Jumeirah Village, The Greens, as well as Discovery Gardens,” states the report. Tie these to the
“monthly uplifts of 0.4-1.9 per cent recorded for mid-market villas located in Arabian Ranches, Victory Heights,
and Jumeirah Village”, and the gains in Dubai’s real estate is turning broad based.
But the prime and super-premium locations are yet to turn in such marginal improvements. “The February
residential ValuStrat Price Index declined marginally in value due to continued softening of capital values in few
prime locations monitored by the index,” the report states.
“Compared to a 100-point base in Jan 2014, the February overall residential VPI registered 97.4 index points, with
no significant change in values when compared to the previous 20 months and down 0.6% when compared to the
same period last year. Overall residential prices were 13.7 per cent below their peak of 2014.”
As was stated in the January report, two locations are now less than 5 per cent from their peak — in Motor City
(now only 3.2 per cent below peak) and Dubai Production City (4.5 per cent below peak).
Source: Gulf News
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EMAAR REVEALS A 72-STOREY HOTEL FOR
THE DOWNTOWN
Wednesday, 01 March, 2017
Emaar’s hospitality division has announced plans for an architecturally distinctive property in Downtown Dubai,
an address that already has its fair share of attractions. The latest launch is a 72-storey curvilinear tower that will
be a lifestyle resort as well as offer serviced residences to be managed by Address Hotels + Resorts.
The 196 rooms and 532 serviced residences will open up to views of The Dubai Fountain, Burj Khalifa, the rest of
the Downtown and the Arabian Sea.
“It is uniquely positioned as a city lifestyle resort — which integrates all the romantic charm of a resort with the
convenience, amenities and appeal of a city hotel,” said Chris Newman, Chief Operating Officer of Emaar
Hospitality Group. “Address Boulevard is exceptional sin all its facets — from the architecture to the interiors, the
unobstructed views of iconic attractions, and our uncompromising approach to superior guest service.”
As with the exterior, lot of attention will be focused on the interior, and that will be done through art installations.
A total of 48 artists and 251 pieces of art will be on display. An art consultancy commissioned a number of
established and emerging artists to produce these pieces. These include a large sculpture titled “Wings” and a 46piece bespoke collection of chandeliers themed “The Spirit of Timeless Luxury”.
Source: Gulf News
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FOR LUXURY PROPERTY, IT IS ONLY DUBAI
IN THE REGION
Wednesday, 01 March, 2017
Dubai is the sole Middle East city to make it to the most coveted destinations for luxury property investors in the
latest rankings from Knight Frank. Clearly, the market corrections the local property market has experienced since
mid-2014 has not led the wealthy to seek options elsewhere.
Dubai was placed 16th, just behind Seoul and Taipei and ahead of Geneva and Zurich.
In the global listings, at the top, there was a surprise with London edging just ahead of New York with top scores
for investment and connectivity. This despite the doubts that still swirl about how the real estate market there will
fare when the UK formally moves out of the EU. Brexit does not seem to have dimmed investor interest.
Second-placed New York leads on both current and future wealth. The rankings were put together based on the
city’s prospects for current wealth, investment, connectivity and future wealth opportunities for high net worth
investors.
Hong Kong, Shanghai and Los Angeles were placed third, fourth and fifth.
“The global economic powerhouses of London and New York dominate the rankings due to their well-established
lead over other cities,” said Liam Bailey, Head of Global Research at Knight Frank. “However looking ahead, future
wealth concentrations and investment firepower look set to be dominated by a tussle for supremacy between
Asian and North American cities.”
Ready properties
As for Dubai, this will give some confidence to developers to keep testing investor interest with new high-end offplan launches. Transaction gains featuring ready properties are also improving from their 2015-mid-2016 lows,
with January seeing a lot of interest for Burj Khalifa and Downtown units, based on Dubai Land Department data.
And it needn’t be just residential property that will drive future investments. “The availability of more quality
investment stock — particularly in the commercial and alternative sector [education and health care] — is
expected to drive further investments into the city,” said Dana Salbak, Associate Partner and Head of Mena
Research.
The Knight Frank Wealth Report also finds that spending $1 million (Dh3.67 million) would fetch 162 square
metres of high-end residential property in Dubai. A similar sum would provide only 17 square metres in Monaco,
while New York gets the buyer 26 square metres and it is 30 square metres in London.
Dubai’s 162 square meters of accommodation makes it “one of the affordable cities to buy luxury residential
property”.
According to Knight Frank, the ranks of the ultra-wealthy rose by 6,340 in 2016, taking the total to 193,490. It
reverses a 3 per cent decline recorded in 2015. (These are people with $30 million in net assets.) “The momentum
gained in wealth creation in 2016, although relatively modest, was far from being a foregone conclusion,
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especially given that nearly three-quarters of respondents to our Attitudes Survey highlighted political uncertainty
as a significant threat to their clients’ availability to create and preserve wealth,” said Salbak.
For exhibitors at the ongoing Dubai Boat Show, this is another reason why they should be here — the ultra high
net worth investors in the UAE are “most likely” to own a yacht. If it is not a yacht that catches their fancy, then
pedigree race horses will do.
Their Saudi counterparts, meanwhile, would prefer to spend on private jets, according to the Knight Frank Wealth
Report. These are people with $30 million to spend in acquiring assets.
“Personal enjoyment was considered the number one reason why UHNWIs collect and buy luxury assets,
according to the respondents who took part in The Wealth Report Attitudes Survey this year,” said Dana Salbak,
Head of Research. “Some of these objects of desire also turn out to be shrewd investments so it’s no surprise then
that ‘capital appreciation’ is now the second-most-important motivating factor when making a purchase.”
Source: Gulf News
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WAYFINDING IS NOT JUST ABOUT PUTTING
UP SIGNS
Wednesday, 01 March, 2017
Imagine building a massive mixed-use destination that ticks all the boxes when it comes to its architectural details
and aesthetic internal touches. But once it is opened for business, how do you ensure that visitors will be able to
flow through its many levels, corridors and connecting pathways?
Just putting up exit and entrance signs will not do, nor will arrow signs. That’s where specialist signage and
wayfinding specialists come in.
“In a mall or airport, the most critical thing wayfinding does is manage the flow of consumer, consider the main
congestion points and all aspects of the development,” said Graeme Erens, CEO of Genius Loci, which has
partaken in projects such as the Dubai Opera House and Legoland Dubai Parks and Resorts. “Even down to how
the deliveries are done and how access for emergency vehicles can be managed.
“But with residential towers, wayfinding is more a pragmatic exercise, with very specific design solutions for each
of the areas. Essentially, one needs to be able to tell which floor to go to and where to go in case of an emergency.
“There are often degrees of cost consideration. In mixed-use communities, you need wayfinding to connect the
entire development. Each area requires that ... but the challenge is to do that looking relevant to the space.”
Not that wayfinding is a brand new science. It has been around awhile, most spectacularly in the way the these
showed up in the colour coding at the New York subway back in the 1960s. Elements have been there in all of the
destinations that Dubai has created over the years. But, now, it is as close to being an exact science as can be.
And that means calling in the consultancies right at the point when masterplans are being finalised.
“If you take the way a development’s designed, there are often areas within that become iconic,” said Erens. “It
could be a courtyard with a fountain, a walkway along a river or a plaza. Those components sort of become the
recognisable areas within the development that people see as destinations within.
“Wayfinding guides them within and around those areas from point to point. You are not telling people to go from
here to there ... but go on a journey and experience the space you are in to get to where you want to go. It’s
informing the consumer what the great experiences are.”
The signage needs to be one with its environment. It wouldn’t cut much ice if the design comes off as too modern
in a themed setting where the emphasis is on the vintage.
“It should be a functional piece of communication that looks like it belongs to the environment,” the CEO said.
“This where the fun part starts.
“What we end up designing is not something purely functional or contemporary looking, it is manipulative
material, it is theming that looks at the history of the space and the influence of the design. It’s very linked to the
interior design, the landscape and architecture.”
Wayfinding designs are a horses for courses strategy
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With retail spaces, these elements need to be bigger, clearer, colour coded and more activity-based. “It’s a system
of understanding how people make assumptions when moving around a space,” said Graeme Erens of Genius
Loci. “What we do is manage the sequence of information to get to a destination.”
For themed resorts and boutique hotels, what wayfinding does is add to the visual experience of the space. The
theming adds to the believability. “Any themed environment is an artificial experience,” said Erens. “You go into
that space to be convinced that it looks like what the theme promises.”
Source: Gulf News
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MID-MARKET OPTIONS COME KNOCKING
IN UAE HOTEL SECTOR
Wednesday, 01 March, 2017
Research indicates that international tourist arrivals in the UAE grew at a compound annual growth rate (CAGR) of
12.4 per cent, from 9.5 million tourists in 2010 to approximately 17 million in 2015, markedly above the global
growth rate of 3.9 per cent for the same period.
Considering travel- and tourism-related spending, the UAE witnessed $33.7 billion (Dh123 billion) being incurred
in 2015, growing at rate of 7.8 per cent since 2010. Leisure accounted for more than 80 per cent of that
expenditure, emanating from source markets such as Western Europe and other GCC states.
To an extent, demand has been fuelled by measures such as airport expansion, building of theme parks and
providing tourists with a range of hotel accommodation.
The supply of hotel rooms in Dubai increased by 6.5 per cent year-on-year in Q1-16 to 82,760 rooms. The
Department of Tourism and Commerce Marketing is targeting 140,000 to 160,000 hotel rooms by the end of the
decade. Data from STR Global also shows that a further 20,291 hotel rooms are currently under construction, of
which 10,019 are due to come online by year-end.
Globally, economies have begun to be increasingly intertwined, resulting in interdependencies among
stakeholders within the sector.
As investment in technology bears fruit, social media, search engines e-commerce portals, and other online
marketing channels significantly contribute to consumer preference of hotel brand and locational awareness
within tourism. Previously obscure options and locations have begun to emerge on the luxury map.
The top seven areas in which technological advances are transforming the hospitality industry and enabling a new
level of customer service:
1. Online booking systems
2. EPOS (Electronic Point-of-Sale)
3. CRM (Customer Relationship Management)
4. Marketing Automation
5. Social Media
6. Smartphones
7. Smart Appliances
There are a number of solutions that have already begun to change the way that business is done. The common
attribute that they all share is the fact that they allow businesses to have a more convenient, informed and
valuable relationship with customers.
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The UAE hotel sector is overcrowded with five-star luxury rooms, housed in prime real estate in enviable
locations, and with a number of upscale brands managing them. Dubai still remains as a preferred destination for
luxury and mid-market travellers alike. By 2020 an additional 20,000 rooms are expected to be introduced, of
which 53 per cent will be luxury offerings.
When a market is awash with choices in the high-end sector, there’s bound to be an overspill. Dubai is seeing the
construction of 54,000 rooms imminently, and another 72,000 planned for the region, leading to a possibility of a
supply overhang.
Since the UAE hospitality sector has been predominantly occupancy-driven, it can be quite difficult to fill up a
hotel room without compromising on price as measured by the hotel’s average daily rate. For example, the UAE,
in spite of fresh introduction of supply, witnessed occupancy rise from 66 per cent in 2010 to 77 per cent in 2015.
On the contrary, ADRs in 2015 dropped by over 5 per cent to $231 in Dubai and 3.1 per cent in the UAE as a whole
to $190 in face of a rise in competition. Consequently, revenue per available room has declined considerably over
the years.
This may imply greater investment in loyalty programmes and promotional activities. Such innovative marketing
may be favourable for occupancy — however not for the ADR of luxury properties. Intensifying competition has
maintained pressure on ADRs, where in H1-16 this fell by 3.5 per cent in Dubai compared to the year before.
Imagine the food pyramid one grows up learning. At the very bottom of the pyramid is a surplus of all the basic
requirements. But as one goes higher, the foods become more decadent and therefore, its availability scarce.
A mature hospitality market tends to work on a similar principal — mid-range options are available in surplus,
whereas luxury is limited to the discerning leisure traveller. In the face of tightening corporate travel budgets,
business travel too is faced with this reality.
This then transcends into carefully ‘adjusted’ investment returns from hospitality projects, based on more
rationalised development costs and return expectations. Being in the UAE, one might already observe that this
pyramid is inverted. There is huge percentage of luxury offerings at the top and relatively weak mid-market
supply at the bottom.
Governments bear cognisance of the threat of a potential supply overhang of luxury and upscale hotel rooms,
and are therefore willing to encourage development of three- and four-star hotels. This has affected underconstruction upscale hotels, which have either stalled or deferred their launch dates or contemplating a distress
sale. Furthermore, hotel guests tend to evaluate the cost of services that matter to them and are equitable in their
opinion — leading to a reduced affinity for luxury offerings.
International operators are responding to the need to diversify the region’s hotel mix. Local hotel developers have
also introduced mid-segment hotel brands in the light of these developments. As the dynamic of luxury changes,
it will not be long before the fundamental assessment of what defines luxury changes. And the “Royal Suite” fails
to be the standard all luxury is measured against.
There comes a need to extend hospitality offerings beyond in-resort amenities to sustain tourist inflow. Theme
parks with unparalleled offerings are now taking centerstage.
New theme parks are also planned for Abu Dhabi. With such developments, hotel accommodation would be
expected to rationalise its offering to cater to the new normal.
Source: Gulf News
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AFFORDABLE HOMES ARE STILL SO FEW IN
ABU DHABI
Wednesday, 01 March, 2017
Abu Dhabi’s property market has some catching up to do in creating those mid-priced homes. As of now, only 18
per cent of its housing stock carry values of under Dh1,000 a square foot compared with the 50 per cent of such
homes (existing and those being built) in Dubai, according to the latest data from Reidin-GCP.
And the gaps are apparent on other fronts, too — Abu Dhabi’s stock of freehold homes (including those defined
as “long-term leasehold”) is still only 20 per cent of the overall housing market. That compares with the 57 per
cent freehold base in Dubai as of now, the data finds.
But given the current weak demand for new homes, it is unlikely that the Abu Dhabi real estate market can plug
these holes in the near term. With the exception of Aldar, other developers are not pushing ahead with new
projects, believing they are better off waiting for the next upturn than get in now. And that by doing so they will
not create additional supply that will further depress prices in the secondary market.
The numbers show the developer’s diffidence for new launches — as opposed to the 4,670 new homes launched
in 2015, last year saw only 3,244 being released as off-plan in Abu Dhabi. (It was 3,272 units in 2014.) “A monthon-month price change signals that Dubai declines have tapered, signalling a bottoming out, whereas Abu Dhabi
continues to fall,” states the report.
From a high of Dh1,429 a square foot in June 2014, average apartment values have dipped to Dh1,296 as of
January 2017, a decline of 9.3 per cent. And the chances are there will be further dips before stabilising.
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“Property values in Abu Dhabi do not appear to have bottomed out as yet,” said Sameer Lakhani, Managing
Director of Global Capital Partners. “On the demand side of the equation, it is because Abu Dhabi has been more
affected by the oil price decline.
“More importantly, in the freehold space, the upper income segment has dominated supply and consequently
leading to a greater fall. The luxury end of the segment has suffered the brunt of the correction.
“In terms of participation by private sector developers, it is expected to rise. However, given the stage of the
property development cycle that it is at, it appears as if the GRE (government-owned real estate) developers like
Aldar will have to be at the forefront of development, including in the introduction of post-handover payment
plans.”
Even mid-market is going to get a look-in. While announcing its 2016 financials, Aldar confirmed that mid-market
housing has been assigned priority in its development plans for this year. That could include creating dedicated
areas within the Yas and Reem Island master-developments for such housing options.
Even the stretches of land on the highway between Dubai and Abu Dhabi could be options as developers seek out
new turfs to pitch up their mid-market/affordable housing. Interestingly, there were a few launches last year
priced between Dh2 million to Dh4 million that were met with favourable responses. Now, it is up to the
developers to push the price bar further down and go for a wider buyer base.
As such, Abu Dhabi’s property market needs a quick reset to get activity back. Unless there is an overnight
improvement in the city’s high paying jobs market, those luxury homes will have fewer options to sell or lease in
the coming months. According to market sources, the number of vacant homes is building up with each passing
month, and that is hurting landlords even more than it did during the crash of 2009.
“Since the peak [in mid-2014], rents in Dubai’s [freehold areas] are down 8 per cent, whereas Abu Dhabi is down
10 per cent,” states the Reidin-GCP report. As with property values, “The month-on-month changes in both
emirates reveals that Dubai trends have begun to bottoming out, whereas Abu Dhabi continues to decline.
“There has been some migratory effect that has been witnessed between the two emirates, suggesting that rental
pressures may continue in Abu Dhabi.”
Source: Gulf News
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ONE DUBAI DEVELOPER LOVES BEING IN
THE SUN
Wednesday, 01 March, 2017
One Dubai developer is enjoying his place in the sun … quite literally. So much so, he is building a boutique hotel
— a 153-room, three storey structure in Dubailand — fully powered by solar energy and which is in line to be the
first such in the region.
The hotel forms the second phase of Diamond Developers’ massive Dubai Sustainable City community.
“We have the final architectural design and work will start within weeks,” said Faris Saeed, CEO of Diamond
Developers. “Once the property opens, which is set for 2018, all the water from the hotel will be reused for
landscaping.
“Much of the fresh produce — around 60-70 per cent — for future guests will be sourced from the adjoining farm
and that means there’s no need for transportation. That translates into zero mileage where possible.”
The hotel development will take up 300,000 square feet, of which the farm will take up 100,000 square feet.
According to Saeed, 100 per cent of the herbs and 80 per cent of the veggies will be plucked from the farm. (The
fruit requirements will need to be sourced from outside.) The property — to be operated by the IHG Group
owned Hotel Indigo brand — wears its sustainability credentials seriously. Where possible, materials from the
Phase 1 construction of Sustainable City will find new purpose within the hotel. That means a lot of the desks and
other furniture could be made out of recycled wood.
The hotel will be an easy fit into the wider Dubai Sustainable City, where the residential part already has come
along nicely. Of the 500 town houses and 89 apartments, 260 villas and 75 apartments are occupied. The prices
range between Dh1000-Dh1,100 per square foot. Car charging stations have been installed and Teslas can be
seen in the parking lot. For mobility needs within, it is using battery-powered vehicles.
The energy requirements are driven by renewables. “Dubai Sustainable City is connected to the national grid … we
have to be connected to it,” said Saeed. “We have a surplus from solar power during the day that we export to the
grid and import at night. There is no other option.
“It was in January last year that the first families started to move in. “We took almost one year to monitor, verify,
document what we had done. So far, everything is working based on our plans.
“We spent almost Dh2 billion for Phase 1 — and no we did not charge a premium for all the sustainability
measures put in place within the homes and the community. The myth of sustainability carrying an extra cost is
just not true.
“In any project designed from scratch with the sustainability goal will end up costing equal or less than a standard
project. We can prove it. Our first homework was done well before the construction. We have created a DNA for
sustainable development.
“These lessons are scalable and adaptable. We can help spread the know-how.”
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What next after Sustainable City?
Diamond Developers is through with Phase 1 of its massive project spanning 5 million square feet. Phase 2 will,
apart from the hotel, feature a country club, school and innovation centre. Beyond Sustainable City, the developer
has plans for mid-rise apartments in the Arjan cluster of Dubailand.
“It’s the second trial on sustainable development we are doing,” said Frais Saeed, CEO. “We have acquired three
plots for G+7-storey structures featuring about 200 units each. Each project could cost Dh150 million/”
Source: Gulf News
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ESSENTIAL CONTRACT TERMS TENANTS
SHOULD KNOW
Wednesday, 01 March, 2017
Landlords and tenants are familiar with the green lease form that has been widely used in the market. Starting
this month, they will have to use a new unified tenancy contract for all residential, commercial and industrial lease
agreements. The biggest difference between the green form and the new unified form is the omission of unlawful
terms. For example, the old form included clauses that renewal is at the discretion of the landlord, and that the
lease is null and void after the expiration date. Under Dubai’s tenancy law, a tenant has an automatic right of
renewal, unless a valid legal reason and notice is given for eviction.
The unified contract includes the following terms:
*The tenant has inspected the premises and agrees to lease the unit in its current condition.
*The tenant will use the premises for its designated purpose and has no right to transfer or sublease the
premises, unless it is legally permitted.
*The tenant will not make any modifications to the premises without obtaining the landlord’s written approval.
*The tenant must pay all electricity, water, cooling and gas charges, unless otherwise agreed.
*The tenant agrees to comply with all regulations related to the use of the premises and common areas such as
parking, pool, gym, etc.
*Any dispute arising from the contract will be settled by the Rental Disputes Settlement Centre (RDC).
*The contract is subject to the laws and regulations of Dubai.
*Additional terms and conditions in conflict with the law will be invalid.
In addition to the above, there are essential terms that should be added to avoid disputes. These can be printed
in the blank spaces provided on the form. Or, an addendum may be attached to the contract, with words such as
“See attached addendum”.
Maintenance issues
The law states that the landlord is responsible for the repair of any damage or defect that may affect the tenant’s
intended use of a property, unless otherwise agreed by the parties. This means that major repairs should be
covered by the landlord, unless the lease places the responsibility on the tenant. However, the law does not
define what would be considered a major repair. If it is not defined in the agreement, it will be left to the RDC
judges to decide.
Termination notices and penalties
Contrary to popular belief, the law does not require the tenant to give a 90-day notice to the landlord for nonrenewal. (Although Article 14 of Law 26 of 2007 required a 90-day notice for non-renewal, Article 14 of Law 33 of
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2008 deleted such requirement.) That being the case, the landlord may want to specify the notice period required
by the tenant and any corresponding penalties that will be imposed in case of a breach of the notice clause.
The law is silent on early termination of the lease agreement, so if there is no early termination clause and the
tenant wishes to terminate the lease prior to expiration, the tenant is at the mercy of the landlord when seeking a
refund of the remaining rent. Therefore, it is in the tenant’s best interest to include an early termination clause
that states how much notice must be given and the penalty, if any.
Condition of property upon vacating
The law states that a tenant must hand over the premises in the same condition in which it was received, with the
exception of ordinary wear and tear or damage due to reasons beyond the tenant’s control. “Wear and tear” is not
defined by law. In a dispute, it is the RDC that decides whether the repairs can be deducted from the security
deposit.
Violations committed by a tenant
Sometimes tenants violate owners’ association, Dubai Municipality or other regulations that may result in a
penalty being levied on the owner of the property. To avoid the landlord paying these fines out of pocket, the
lease should clearly state that the tenant will be liable to pay such penalties, if not, the fine will be deducted from
the security deposit. There should be a statement reflecting that the tenant acknowledges notice of this policy,
and will not challenge it in a judicial proceeding.
Other terms
Any terms that are of importance to either party should be included in the agreement. For instance, if the tenant
has a pet, there should be a clause allowing pets. Make sure that any additional terms do not violate the law or
the owners’ association rules and regulations.
Source: Gulf News
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DEIRA ISLANDS: FREEHOLD IS PART OF THE
PLAN
Wednesday, 01 March, 2017
The first wave of real estate developments on Deira Islands is positioning the Nakheel master development as a
key tourist destination, but officials assured a second wave of projects to be announced later this year will open
the man-made islands to freehold ownership. Nakheel said it has already awarded Dh3 billion worth of contracts
as of last month, with more multibillion-dirham contracts to be awarded this year.
And while most of the announced projects are being developed by Nakheel independently or through joint
ventures, freehold plots near the centre of island A will be released to private developers later this year.
“There will be freehold,” said Ali Rashid Lootah, chairman of Nakheel, during a tour of one of Deira Islands' four
islands last week. “We might launch the [freehold plots located] in the centre of the island before the end of this
year. Around the mall, there will be some commercial plots for sale.”
Waterpaks and shops
Underlining the island’s tourism-led approach, most projects announced by the developer are located along a
6km stretch of white sand beach and around the island’s flagship retail project, Deira Mall. The beachfront
developments include a Dh900-million joint venture (JV) between Nakheel and RIU Hotels and Resorts and the
Dh450-million Deira Islands resort, a JV with Centara Hotels and Resorts. The 800-room RIU and the 550-room
Deira Islands resort will both feature waterparks.
Lootah said two more hotel resort JVs will be announced later this year.
The developer received construction bids for Deira Mall last week. Located in the middle of island A, the mall will
offer 4.5 million sq ft of leasable space, which is bigger than The Dubai Mall’s 3.77 million sq ft.
Nakheel said it has finished 90 per cent of coastal works on islands A and B, including 9.6km of beaches, with the
entire coastline set to be ready in July, allowing the beachfront projects to commence later this year.
Deira Islands will create 40km of coastline, including 21km of beaches. However, Nakheel is only currently
working on islands A and B and has not announced development plans for the two other islands.
Also under way is Deira Islands Boulevard, which will have six hospitality and 16 residential buildings, combining
for over 2,900 apartments and 1,000 hotel rooms and serviced apartments.
Homes for rent
All residences under development are only for lease. Freehold properties could come in once Nakheel starts
selling plots to third-party developers later this year.
Deira Islands will include several marinas with moorings for yachts and small boats. Nakheel has not released
plans, but Lootah says one will be linked to the Dubai Creek. “I think this will be one of the best marinas because
it’s facing the sea and has a connection to the Creek, so it’s very accessible,” said Lootah during an inspection of
the site, where a quay is already in place.
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Open in 2018
Infrastructure work on islands A and B will be completed next year and in 2019 respectively, while the projects
currently under way are expected to be ready by 2020. Deira Islands, however, could open to the public as early
as the second half of next year with the completion of the Dh1.57-billion Deira Islands Night Souq. Built along a
quayside opposite Deira’s coastline, the 2km souq will have 5,300 shops, including eateries fronting an esplanade.
Some 250,000 people are expected to live on the islands, while around 80,000 jobs will be created.
Deira Islands is accessible through a Dh150-million bridge that was opened by the RTA in November, connecting
island A to Al Khaleej Road in Deira. Nakheel said the bridge, which has two lanes in each direction, could be
expanded as traffic to the island increases, while a second bridge also on island A is already on the drawing
board. A series of bridges are also under way linking the four islands to each other.
Source: Gulf News
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LUXURY IN 22 CARAT HOMES
Wednesday, 01 March, 2017
Is luxury living all about extravagance and opulence? Or is it about embracing and enjoying a beautiful way of life?
Of the many bespoke luxury projects that are currently being developed in Dubai, there is one on the west
crescent of the Palm Jumeirah that gives buyers an opportunity to immerse themselves in a truly magnificent way
of life.
Developed by the Russia-based Forum Group, XXII Carat features 22 ultra-luxury villas spread across 500,000 sq ft
with 720 sq ft of beachfront. Being labelled as the ultimate living experience, a €1-million (Dh3.87 million) rock
crystal bathtub by Baldi and one of the world’s most expensive kitchen layouts by La Cornue are just a few
examples of the opulence you will find here. With each villa priced between Dh38.5 million and Dh92 million, the
community is as exclusive as it can get.
Choosing Dubai
Anton Yachmenev, managing director of the Forum Group, says although the company envisioned a few
destinations for the project, Dubai was a natural choice. “The number one reason was Dubai’s appeal as a
cosmopolitan city,” he says. “The second was, of course, the ease of doing business, and third, we felt we could
add to the luxury living choices that were currently on offer.
“When we set out with XXII Carat, we wanted to ensure that we were not building just another luxury project.
What we offer in this community is a combination of the most picturesque location, our experience in delivering
projects on time and our commitment to exceptional quality.”
Yachmenev says the plot was acquired in 2009, while construction on the project started only in August 2015 “as
we felt we had to get every detail right”, from design and interiors to the materials.
Despite the homes being built on prime plots, Yachmenev says each owner has the luxury of vacant space that is
equal to or more than the built area. “This is something that is new for Dubai,” explains Yachmenev.
While the plot sizes range from 15,000-26,000 sq ft, the villas have a built-up area of 8,500-11,000 sq ft.
Sales is picking up gradually, says Yachmenev. While the target market is mainly composed of high-net-worth
individuals (HNWIs), Yachmenev says XXII Carat is not just about luxury that money can buy.
“We are fully aware that our product is targeted at HNWIs, but taking cue from developments around the world,
we have a sort of screening process in place to make sure we’re building the right community.”
The community is being handpicked just as each villa is being handcrafted to the smallest detail. From Italian
marble floors and handcrafted doors to imported electrical accessories, the developer has also ensured that the
exteriors of each home are world class. Some of the highlights include high-quality Bavarian mineral paints with a
50-year fade-away warranty, red clay bricks from Saudi Arabia, windows with dust and noise reduction systems
and a noise barrier fencing system.
Views and facilities
Each villa also has an unobstructed 360-degree view of the sea and the city skyline. It also features a private pool,
landscaped garden and terrace. While the first line of villas offer private access to the beach directly from their
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homes, the central line of villas has access to a private roof terrace and an elevator to the basement parking. Each
home owner also has access to round-the-clock concierge, security and valet parking, in addition to gardening,
pool maintenance and clubhouse facilities.
With nearly 385 workers on-site and with 40 per cent of the project completed, Anton says the development is on
track to be completed and delivered on time by the end of the year. He adds that the construction timeline will
ensure that all villas are delivered together and will not be based on the sale of units.
Service charges
One of the challenges for developers in the past has been the implementation of service charges. Anton says he is
aware this is a nagging issue for many homeowners, but feels it should not be a hassle if the developer is
transparent from the outset. “The service fee is usually not an issue if the developer and the homeowner are clear
about how the charges are laid out,” he says. “It is in our best interests to ensure that each of the 22 owners is
clear on the services and any charges. More than a project, this is a community and we like to keep it that way.”
While XXII Carat is the first project for the Forum Group in Dubai, Anton says the company has already identified
other opportunities. “There are a few projects we are looking, but it’s still very early to say what they will be. Our
priority at the moment is to complete the project and ensure delivery of all units on time.”
Source: Gulf News
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TOP SHARJAH LOCATIONS WHERE RENTS
ARE CHEAPER
Wednesday, 01 March, 2017
Planning to move away from the city centre to save money on rent? The latest data show that tenants who are
open to living farther afield can find even cheaper options in places like Sharjah, where rents have recently
dropped.
Property analysts have confirmed that, as rents in Dubai's centrally located properties remain out of reach for
many low or average-income earners, the suburbs remain a magnet for tenants. Jesse Downs, managing director
of Phidar Advisory, however, noted that Dubai tenants are relocating, not only because they are looking for low
rents. "It's often driven by value."
Accommodation rents in Sharjah dropped by 2 per cent during the last quarter of 2016 from a year earlier,
according to real estate consultancy firm Asteco. In dirham terms, annual lease rates have dropped by Dh2,000 to
Dh5,000 for one-bedroom to two-bedroom flats, and up to Dh7,000 for three-bedroom units.
Gulf News crunched the numbers in the latest report from Asteco to find out which specific locations are actually
offering the biggest decline.
Small apartments
For one-bedroom flats, a clear winner in terms of rate reductions are the apartments in Al Nahda area, where
residential units are going for Dh38,000 a year on average, down by 9.5 per cent from Dh42,000 in 2015.
Pedestrians struggle to cross the road in Al Nahda
In Al Qasimiyah, properties posted a 6 per cent drop, from Dh33,000 to Dh31,000, translating to a rental relief of
Dh2,000 in one year.
Also not far behind is the Corniche area, where tenants can see a Dh4,000 reduction in annual rent for onebedroom flats, which can be had for Dh44,000 a year, down by 8.3 per cent from Dh48,000 in 2015.
An arerial view of the Sharjah corniche
The Al Wahda neighbourhood is a great option as well, with one-bedroom units seeing rates dipping by 5.1 per
cent on average, from Dh37,000 to Dh39,000, equivalent to a Dh2,000 decline.A bird’s-eye view of new Al Wahda
street bridge
Also offering a Dh2,000 decline in annual rent are the residential properties in Al Majaz, with costs dropping by
4.87 per cent, from Dh41,000 in 2015 to Dh39,000 in 2016.
Sharjah’s Al Majaz Waterfront development
Savings also await those who opt to stay in Al Khan (Al Mamzar) area where one-bedroom flats now go for
Dh38,000 compared to Dh39,000 in 2015. Though it's marginal, the 2.6 per cent decline can mean Dh1,000 in
annual savings.
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The panoramic Al Khan Lagoon that separates Sharjah and Dubai is a popular picnic spot
Two-bedroom flats
Bigger families looking to rent a two-bedroom apartment can find the most significant rate cuts, about 10 per
cent, in Al Wahda, with flats being offered for Dh45,000, compared to Dh50,000 in 2015.
Significant price drops can also be found for similar units in Corniche, with rates dropping 8.3 per cent to
Dh55,000 compared to Dh60,000 in 2015.
Al Nahda area prices are also competitive for tenants eyeing two-bedroom units, which posted a 7.27 per cent
decline, from Dh55,000 in 2015 to Dh51,000 in December.
In Al Majaz, similar units have posted a 5.1 per cent reduction in rental rates, from D58,000 to Dh55,000, offering
tenants a chance to save Dh3,000 yearly.
Three-bedroom units
If two-bedroom units are not enough, there are still savings to be had from larger living spaces in Sharjah.
The biggest price drop has been posted by apartments in Al Majaz and Al Mamzar, both offering Dh7,000 less.
Three-bedroom units in Al Majaz have dropped from Dh73,000 to Dh66,000 annually, while those in Al Mamzar,
lease rates for similar properties dropped from Dh80,000 to Dh73,000 a year.
Communities with biggest decline in rent:
One bedroom flats (2015 vs 2016 rates)
Al Nahda: From Dh42,000 to Dh38,000 – down by 9.5 per cent
Al Qasimiyah: From 33,000 to Dh31,000- down by 6 per cent
Al Wahda: From Dh39,000 to Dh37,000- down by 5.1 per cent
Al Majaz: From Dh41,000 to Dh39,000, down by 4.87 per cent
Al Khan (Al Mamzar): From Dh39,000 to Dh38,000, down by 2.6 per cent
*Cheapest one-bedroom apartment can be found in Al Yarmook, with prices remaining flat at Dh26,000 a year
Two-bedroom flats (2015 vs 2016 rates)
Al Wahda: From Dh50,000 to Dh45,000, down by 10 per cent
Corniche: From 60,000 to Dh55,000, down by 8.3 per cent
Al Nahda: From Dh55,000 to Dh51,000, down by 7.3 per cent
Al Majaz: From Dh58,000 to Dh55,000, down by 5.2 per cent
Abu Shagara: From Dh42,000 to Dh40,000, down by 4.8 per cent
*Cheapest two-bedroom unit can be found in Al Yarmook area, where rents, however, have gone up slightly from
Dh28,000 to Dh29,000
Three-bedroom flats (2015 vs 2016 rates)
Al Majaz: From Dh73,000 to Dh66,000, down by 9.6 per cent
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Al Khan (Al Mamzar): From Dh80,000 to Dh73,000, down by 8.75 per cent
Al Nahda: From Dh70,000 to Dh65,000, down by 7 per cent
Al Yarmook: From Dh48,000 to Dh45,000, down by 6 per cent
Corniche: From Dh78,000 to Dh75,000, down by 3.8 per cent
*Cheapest three-bedroom unit can be found in Al Yarmook area.
Source: Gulf News
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PAYMENTS PLANS AND CONSTRUCTION
MILESTONES
Thursday, 23 February, 2017
We bought an off-plan property with a payment plan based on construction milestones, for which we made a
down payment of 40 per cent of the purchase price. To our surprise, there was no progress on our villa when we
were asked to start making installment payments. The developer claimed that the milestones are based on the
overall project progress, and not our individual villa. We paid 70 per cent of the purchase price before deciding to
sell. We then discovered the developer is charging us a penalty for delayed installment payments. Are the
developer’s actions correct?
As far as construction milestones, the Real Estate Regulatory Agency (RERA) payment schedule is based on the
overall progress of the project, and not on individual properties. RERA allows the developer to request payments
of up to 10 per cent over the construction completion milestone. For example, if 50 per cent of the project has
been completed, the developer can require that an installment be made to bring the total amount paid by the
buyer equal to 60 per cent of the purchase price. As far as penalties for late installment payments, it depends on
what is stated in your Sales and Purchase Agreement (SPA). If there is a penalty clause, and you made late
payments, the developer may have the right to charge the fee. It is best to consult with a law firm to review the
contents of your SPA, explain your rights and suggest the appropriate course of action. If a buyer wishes to
confirm the status of a project, it can be completed via the Dubai Land Department’s website at
www.dubailand.gov.ae, under the “Project Status Tracking Service”. The “Dubai Brokers” mobile app also includes
much of the information about developers and projects.
I am renewing my lease for another year, and the estate agent is asking for a 5 per cent commission on the
annual rent. Is this permitted by Rera?
Brokers are not allowed to charge a commission on a lease renewal. However, the Real Estate Regulatory Agency
(Rera) has previously stated that “administrative fees” can be charged on renewal, if they are transparent and can
be justified by the work being done by the broker. A limit on administrative fees has not been specified, but the
standard fee appears to be between Dh500-1,000.
I am interested in purchasing a property in Dubai International Financial Centre (DIFC) and getting the two-year
residency visa. Is this possible?
The two-year residency visa for property owners is obtained through the Dubai Land Department (DLD). For a
property to be eligible for this visa, the title deed must be issued through DLD. DIFC has its own property registry,
therefore DLD has no authority over properties located there. So, a DIFC property would not be eligible for the
two-year residency visa. However, if you wish to purchase a property in other designated (freehold) areas of
Dubai for the visa, you may do so if:
•Property is owned freehold (not leasehold or rent-to-own);
•Title deed is in the name of the applicant;
•Property purchase price is at least AED 1 Million (future increases in value will not be considered);
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•Property is ready to live in (not off plan);
•There is a mortgage, at least 50 per cent is paid off.
If you would like to send your questions to Ask PW, please email [email protected].
Source: Gulf News
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ALDAR MID-MARKET FOCUS SIGNALS
COMING SURGE IN ABU DHABI PROPERTY
Sunday, 26 February, 2017
The Abu Dhabi property market is poised to experience a Dubai-like growth surge over the next three years as
Aldar Properties starts to capitalise on pent-up demand for mid-income housing, a report claims.
According to Reidin/Global Capital Partners, Aldar’s announcement earlier this month that it plans to focus on
building mid-market homes this year signals a "paradigm shift" in the Abu Dhabi market.
"Given the recent announcements of Aldar, we expect there to be a growth surge in the next three years as Aldar
capitalises on mid-income market opportunities in order to balance the housing market in Abu Dhabi," said report
author Sameer Lakhani. "This would be similar to the growth that Emaar witnessed in its growth spurt phase in
the first real estate cycle of 2004-08."
According to the report, currently 50 per cent of freehold homes being built in Dubai are valued at below Dh1,000
per square foot, while in Abu Dhabi they account for only 18 per cent.
"With the imminent entry of Aldar into the mid-market segment, there is likely to be a proliferation of
communities that will increase the volume and breadth of product on offer, heightening investor activity as a
result," Mr Lakhani said.
Aldar has said that it expects to launch about 1,500 units a year into the market, but added that this year it would
focus on building mid-market housing at its Reem Island and Yas Island communities.
"Activity by private sector developers is likely to increase as a result, similar to the experience in Dubai," said Mr
Lakhani.
Reidin estimates that homes built by Emaar account for 7 per cent of the entire housing stock in Dubai, while in
Abu Dhabi, Aldar developments account for 10 per cent of the city’s total housing stock.
It adds that in Dubai freehold development accounts for 57 per cent of the entire housing supply, while in Abu
Dhabi it accounts for just 20 per cent.
According to Reidin, house prices in Dubai fell 13 per cent between December 2014 and December 2016, while in
Abu Dhabi prices fell just 9 per cent during the same period. However, the data company adds that house price
declines in Dubai appear to be bottoming out, while in Abu Dhabi they continue to fall.
The report comes at a particularly gloomy time for UAE developers. Last week the credit ratings agency Standard
& Poor’s (S&P) said that it expected house prices and rents in the UAE to continue to fall throughout 2017 because
of the continued fallout from low oil prices and currency woes.
"For 2017, we see no signs of market improvement for the UAE real estate sector, despite housing affordability
improving from the current price environment," S&P said. "The strength of the dollar is making the UAE
increasingly expensive for tourists and low oil prices in 2016 have diminished purchasing power and weakened
investor sentiment."
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The ratings agency also pointed to the fall in the value of the UK pound as a major concern for the UAE property
market. The currency has declined by 17 per cent against the US dollar in the past 12 months as the UK in June
voted to leave the European Union.
Source: The National
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DUBAI COMPANY READY TO 3D PRINT
YOUR HOUSE, SAYS 19-YEAR-OLD
FOUNDER
Sunday, 26 February, 2017
A teenager who has relocated his start-up business in 3D printing technology from Silicon Valley to Dubai has said
that it is ready to begin offering 3D printed houses and buildings.
Chris Kelsey, 19, the co-founder and chief executive of Cazza Construction Technologies, has said that its mobile
printing robots are capable of printing a 200 square metre house in a single day using just two workers – one to
monitor the machine and another to add elements such as steel rebar and electricity cables within predetermined sections.
"If someone wants to build a house, we design and engineer according to 3D standards. From there we bring the
machine on site and set up the position where it is meant to print. Once it is in position, the machine 3D prints
according to the software design," he said.
Mr Kelsey, who was born in Pennsylvania and grew up in California, began to seriously look at the market for 3D
printing in construction early last year, using the proceeds generated from the sale of an earlier company – an
app and website development business known as Appsitude.
He said that he "wanted to change the world" and had created Appsitude to generate funds to develop "dream
ideas". When he sold the business, he planned to invest in a company developing technology in 3D printing, but
when he couldn’t find anything suitable he set up his own firm.
His plan involves developing different types of machines for different purposes. Alongside the on-site 3D printing
machines, which he said are capable, with supporting equipment, of building skyscrapers and of working in
remote locations, Cazza is also developing larger, factory-based machines that can custom-make other home
elements.
He declined to say how much the company has invested in its technology to date but said that developing a
company creating hardware such as robots is considerably more expensive than software development. Cazza
will also eventually sell its machines to interested parties.
Mr Kelsey said that the difference between his technology and other nascent 3D construction companies lies
partly in the formula it has created and in its ability to deliver smooth, finished concrete surfaces. He also said the
mobility of its on-site robots, known as Minitanks, give it a greater flexibility to build vertically.
Although 3D printing is more expensive than building using traditional methods, Mr Kelsey expects this to change.
"The cost of labour is increasing and we feel that is going to increase more over time. And even if it doesn’t, I still
think that people will see that it is more efficient to use the machines."
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In December, Cazza agreed to collaborate with the Dubai Government on 3D printing technologies and it has
been enrolled in the Dubai Future Accelerators programme. Once the programme is complete, it is expected to
sign a memorandum of understanding with Dubai Municipality.
He is also helping Dubai Municipality to formulate new laws and building codes specifically relating to the use of
3D printing in construction. Dubai has already set a target for 25 per cent of buildings to be 3D-printed by 2030.
Mr Kelsey said that this process effectively begins in 2019, when buildings will need 2 per cent of 3D-printed
elements to gain municipality approval, with this figure stepping up each year until eventually reaching 25 per
cent by 2030.
"There’s a huge disruption that’s about to happen with this technology," he said.
A report by BMI Research in December predicted that 3D printing will be transformative for the construction
sector. It said that despite high upfront investment costs, "the technology has the potential to cut construction
costs … over the next five years" by replacing the need for many skilled labour roles, and reducing the amount of
materials wasted using traditional methods.
Source: The National
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EMIRATES REIT REPORTS LOWER PROFIT AS
VALUE OF PORTFOLIO MATURES
Monday, 27 February, 2017
Emirates Reit has reported a 22 per cent drop in profit for 2016 to US$47.8 million compared with $61.5m a year
earlier, mainly because gains in the value of its property portfolio were not as high in 2015.
Overall, the company recorded a 22 per cent increase in total income from its property portfolio to $50.7m versus
$41.5m in 2015, with rental income up by 23 per cent to $45.3m.
It also recorded an unrealised gain following a revaluation of its portfolio of $36.5m, although a $53.2m gain last
year meant that both its net property income and its net profit levels were both lower. Operating expenses for
properties also increased by 17 per cent to $15.1m compared with $12.9m.
The Reit manager, Equit¬ativa Dubai, said that it achieved a total return for investors of 10.2 per cent during the
year, with the net asset value of its trust increasing by 5 per cent to $493.4m. Net assets per share grew to $1.65
from $1.57.
Gains in rental income were mainly due to increased lettings at Index Tower (its flagship asset in the Dubai
International Financial Centre) and the rent of the new British Columbia Canadian School – a new-build it is
developing at Dubai Investments Park at a cost of around Dh88m.
It attributed the $36.5m revaluation gain on a post-completion increase in value of the new Jebel Ali School it has
built within the Damac Hills community off Al Qudra Road, and a gain in the value of Index Tower as more floors
have been let. It said the fact that the gain was not as high as last year was due to the "maturing of the portfolio
over time and the slowdown in the broader commercial real estate sector".
Equitativa Dubai also said that it had made progress in agreeing deals for a retail podium area at Index Tower,
with 50 per cent of the space pre-let. Remodelling work for the podium and a fit-out of the retail units is set to
take place over the next three months.
The firm also said that it expects to benefit from the fact that its parent company, Equitativa Real Estate, was
granted a decree in October allowing it to acquire onshore properties in Ras Al Khaimah. It said the decree would
benefit Emirates Reit "by enlarging its acquisition pool".
Sylvain Vieujot, the chief executive of Equitativa Dubai, said: "Emirates Reit continues to offer strong total returns
despite the slower market for commercial property.
"Our funds from operations has grown by 38 per cent, demonstrating a conversion from valuation gains into
actual cash flow," he added.
The firm is also continuing to look at acquisition opportunities. It finished the year with total debt of $315m and a
loan-to-value ratio of 38 per cent, which is below the regulatory maximum of 50 per cent.
"Our experience in developing schools has been very successful and we expect the Reit to continue investing in
the education sector," Mr Vieujot said.
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Source: The National
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BLOOM AND FOUNDATION SIGN JOINT
VENTURE DEAL TO BUILD STAFF
ACCOMMODATION
Monday, 27 February, 2017
The Abu Dhabi property developer Bloom Holding and Foundation Holdings have signed a joint venture to build
middle management staff accommodation across the UAE and the Middle east region.
The pair said that they expected the 50/50 joint venture to spend Dh1 billion building about 4,000 staff
accommodation apartments over the next three to five years for clients in the health care, hospitality and
education sectors.
Bloom and Foundation said they ultimately planned to float the new joint venture company on a local or
international stock exchange.
Both have agreed to spend Dh150 million in seed capital to start the new venture and expect to raise bank
financing on a project-by-project basis.
The company has already acquired two sites to develop a first batch of homes in Jumeirah Village Circle in Dubai
and an unspecified location in Abu Dhabi.
"We plan to institutionalise the staff accommodation sector in the Middle East," said Sameh Muhtadi, the Bloom
Holding chief executive. "The concept is very similar to the way in which Aldar will build staff accommodation for
Etihad cabin crew, but this will be for middle and upper management."
"At the moment businesses in the UAE could well be leasing 15 units in one building and then another 10 in
another one. They have to deal with Dewa, different registrations and all sorts of other problems. What we
propose is to take all of those headaches away," Mr Muhtadi added.
Foundation Holdings was founded in November by Abhishek Sharma, the investment banker who helped to lead
IPOs for Amanat Holding and Al Noor Hospitals on the DFM and London Stock Exchange.
In January Bloom said that it planned to be ready to go public itself with a possible IPO over the next two years.
Source: The National
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LONDON HOUSE MARKET RETURNS TO
TEMPT INTERNATIONAL BUYERS
Monday, 27 February, 2017
London’s prime housing market could be starting to bottom out after two years of house price falls as a slump in
the value of sterling and big discounts from sellers tempt international investors back into the market, property
brokers say.
According to JLL, a better-than-expected economic performance in the UK since Christmas and an uptick in the
number of transactions during the final quarter of 2016 mean that its previous forecasts that house prices in
London’s so-called golden post codes are looking "a little conservative".
At a briefing in Abu Dhabi on Monday, JLL said that it now expects the prime London housing market to
outperform its November forecasts of flat performance in 2017, 1 per cent growth in 2018, 2.5 per cent in 2019,
3.5 per cent in 2020 and 4 per cent in 2021 – equating to compound growth of 15.2 per cent over the next five
years.
"Against a backdrop of quite significant uncertainty in the market and a subdued performance across Europe
generally, the story I’m trying to unpack here is a story of relative outperformance against those expectations as
they were in November," said Adam Challis, the head of residential research at JLL.
The data firm LonRes reported last week that the number of homes under offer in superprime areas such as
Chelsea and Belgravia had risen to the highest since before the EU referendum in June.
It said that the volume of offers accepted on prime London homes, which had fallen to less than half of the
previous year following the referendum, increased in January to just 4.5 per cent lower than for the same month a
year earlier.
Top-end London property ¬prices have been falling for the past two years after former finance minister George
Osborne introduced changes to stamp duty, which increased the amount of tax paid by purchasers of high-value
homes and then added a 3 per cent extra charge for non-owner occupiers. According to Knight Frank, prime
London house prices fell by 6.7 per cent in the 12 months to the end of January, with values in Bayswater dipping
by 14 per cent.
Knight Frank said that lower prices and the fall in the value of the pound were tempting international investors
back into the market, with sales increasing in the final quarter of 2016.
According to the annual Ultra Prime Barometer report produced by Beauchamp Estates, Leslie J Garfield and Iltam
Real Estate, together with Dataloft, a marketing intelligence organisation, US dollar-pegged investors in London
are getting discounts of about 10 per cent on super-prime London homes compared with before the EU
referendum.
The report found that in 2015, the average price of an ultra-prime residential property in Mayfair was US$5,306
per square foot; this has dropped by 10.6 per cent to $4,741 per sq ft currently.
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Source: The National
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GCC LEADS THE WAY IN SMART APPROACH
TO DEVELOPMENT
Monday, 27 February, 2017
In a recent white paper titled "Innovations and Disruptions in Building Energy Efficiency in the GCC", Frost &
Sullivan highlights a number of technologies and services that it says will become more relevant in the region as a
result of greater adoption of renewable energies and energy efficient policies.
"With the penetration of information and communication technology, buildings are expected to become smarter,
intelligent, environmentally friendly, and energy efficient," says Sasidhar Chidanamarri, the associate director of
energy and environment practice for the Middle East, North Africa and South Asia at Frost & Sullivan.
Among potential products that are likely to gain traction in the GCC energy efficiency (EE) industry are LED
lighting, building management systems, district cooling, building insulation, energy recovery devices, solar
thermal air conditioning, non-electric chillers and building integrated photovoltaics, the report says.
Besides those, the services market such as energy performance contracting (EPC) is also expected to provide
significant opportunities in the GCC.
EPC is a form of "creative financing" for capital improvement that enables the funding of energy upgrades from
cost reductions.
Air conditioning accounts for up to 60 per cent of peak electricity demand in the GCC, the report says, adding that
the market for EPC in the UAE was estimated to be US$80 million to $100m in 2015 and is expected to have a
CAGR of 15 to 17 per cent in the next four to five years.
In the context of buildings, Estidama in Abu Dhabi regulates the design, construction and operation of buildings
through phased approvals. Estidama also uses an assessment scale called the Pearl Rating System, for driving and
determining sustainable development by reducing a building’s load from heating, ventilation and air conditioning
systems and lighting.
Meanwhile, in November, the Emirates Green Building Council (GBC) and the Dubai Supreme Council of Energy
signed a memorandum of understanding.
"Key focal areas of the partnership include sustainable energy demand side management associated with
increasing penetration of green buildings in Dubai; cooperation will focus around energy and water use efficiency,
near net-zero energy buildings, green building standards and energy intensity of buildings," says Emirates GBC.
It was formed in 2006 with the goal of advancing green building principles for protecting the environment and
ensuring sustainability in the UAE.
However, the Frost & Sullivan report points out that the regional market also faces barriers regarding the
knowledge and expertise of sector players such as architects and consultants.
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"The overestimation of cost premium incurred in certified sustainable buildings that are more likely to use EE
products and solutions [as opposed to] normal buildings shows a lack of understanding and involvement in
sustainable buildings," Frost & Sullivan says.
In a report by the World Business Council for Sustainable Development on energy efficiency in buildings, building
professionals have overestimated the cost premium by 17 per cent, whereas the ideal premium is about 5 per
cent, it adds.
"In order to gain first mover advantage, EE solution and technology providers have to create strong customer
value propositions by pushing technologies or solutions into the market," the report says.
The growth of green buildings can be seen as an indicator of the commitment that the GCC has toward energy
efficiency. In this regard, the UAE is a leader in the field. "It can clearly be derived that the UAE, Saudi Arabia and
Qatar are the strongest adopters for this initiative.
"The UAE ranked eighth in the global green building growth as per the US Green Building Council’s LEED rating
system," says the report.
"The UAE’s total gross square metres of LEED-certified and registered space is 53.44 million and with the total
number of LEED-certified and registered projects at 910."
If fully adopted, the region’s energy-efficiency policies should provide a financial boost to governments as they
can reduce the wasteful consumption of oil, gas and electricity.
They will also eliminate or reduce the need for huge investments in power generation.
Reforms related to fuel and electricity tariffs by GCC governments are also improving prospects for energy and
environment technologies, the report says, besides improving the financial situation in an era marked by falling
revenues due to low oil prices.
The market for energy efficiency products and solutions as well as energy service companies "are bound to grow,
driven by government initiatives and a shift in opinion and attitude towards viewing energy expenditure as a
strategic cost centre", says Frost & Sullivan.
"With buildings becoming fully integrated and networked using wireless, Web-based automation systems, owners
seek to maximise the real benefits," notes Mr Sasidhar.
"Hence, energy management will lead to improvements in operational efficiency, optimisation of energy and
demand management."
Source: The National
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UAE-BASED INVESTORS SAVE MILLIONS AS
DEMAND FOR LONDON PROPERTY SURGES
Monday, 27 February, 2017
A new report reveals that currency shifts are driving a fresh wave of property buyers based in the Middle East
who are targeting London real estate.
Post-Brexit, changes in the dollar-sterling exchange rate generated significant price savings and investment
opportunities for US dollar-pegged investors in London. In 2015, the average price of an ultra prime residential
property in Mayfair, for instance, was US$5,306 per square foot, this has now dropped by 10.6 per cent to $4,741
per sqft currently, according to the annual Ultra Prime Barometer report by Beauchamp Estates, Leslie J Garfield
and IItam Real Estate, together with Dataloft, a marketing intelligence group.
A US dollar buyer purchasing a typical 3,900 sqft ultra prime apartment in Mayfair now pays $18.49 million,
compared with $20.69m in 2015 – a saving of $2.2m, says the report. In contrast, for a multi-millionaire buying a
Mayfair home in sterling, equivalent costs have risen 3.6 per cent from £3,719 (Dh16,948) per sq ft in 2015 to
£3,853 per sq ft currently. Thus the same Mayfair apartment costs the sterling investor some £15.02m, up from
£14.5m in 2015 – an extra £522,600.
Along with most countries in the Middle East being dollar pegged, including the UAE, Saudi Arabia, Jordan, Oman,
Qatar, Lebanon and Bahrain, there is also the wealthy UAE-based Indian-diaspora business community whose
wealth is US dollar based.
"The 10.6 per cent drop in London real estate prices for dollar buyers therefore had considerable influence over
the past six months on the pattern of enquiries and sales of ultra prime £5m-plus residential property sector in
the UK capital," the report says.
"While enquiries and sales in prime central London from UK domestic buyers has remained relatively stagnant,
over the past six months enquiries from Middle East and Asian investors have risen 15 per cent and purchases in
prime central London are up 10 per cent; while enquiries and sales from UAE-based Indian buyers is up 10 per
cent and 5 per cent, respectively."
Middle East purchasers typically spend anything between £5m to £60m buying lateral apartments or houses in
Mayfair, Knightsbridge or Belgravia, the report says.
Middle East-based expat Indian buyers tend to invest between £2m to £20m, with the majority choosing to buy
London pied-à-terre homes in Mayfair or Belgravia, with Grosvenor Square and Eaton Square being the favoured
addresses, respectively. Ninety-five per cent of dollar pegged Asian investors, such as those in Hong Kong and
Macau, buy for investment, spending £500,000 to £1.5m in new build projects along the River Thames or around
Canary Wharf, the other 5 per cent typically invest £5m to £25m buying homes for end use in Mayfair or Belgravia,
the report adds.
Meanwhile, cash-strapped Londoners looking to invest in property might find the UAE is a more enticing
proposition. Harrods, the famous department store in London’s upmarket Knightsbridge, is offering apartments
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in the new Downtown Views development, by Emaar Properties, directly linked to The Dubai Mall, the world’s
largest retail centre.
The Downtown Views initiative part of the recently launched Emaar Properties 2017 showcase in Harrods on the
2nd floor of the department store, which is open daily until August 31.
The latest showcase, following a similar opening last year, features homes at the development just off Sheikh
Zayed Road. Downtown Views is a new 55 storey residential apartment tower with more than 400 luxury one, two
and three bedroom apartments, located in the upcoming extension of The Dubai Mall. Apartment residents will
have direct access to the mall via a 500 metre overhead bridge which will connect the leisure podium at the base
of the apartment tower with the shopping mall.
Apartments at Downtown Views are priced from £270,600.
Source: The National
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SCHON TRANSFERS HALF OF DUBAI
LAGOON PROJECT TO XANADU TO
EXPEDITE COMPLETION
Tuesday, 28 February, 2017
Schon Properties, the developer behind the stalled Dh7 billion Dubai Lagoon project in Dubai Investments Park,
has agreed to transfer half of the beleaguered mega-project to another developer in an attempt to speed up
delivery.
Schon Properties said on Tuesday it had struck a deal with the Dubai developer and contractor Xanadu Real
Estate Development to transfer 2.33 million square feet of the total 4.3 million sq ft project to its ownership.
Under the agreement, Xanadu will be responsible for completing three of the seven phases of the vast housing
and hospitality project – 17 buildings comprising 1,300 apartments.
Schon said it had agreed the deal with Xanadu to speed up delivery at the mega-project, which was initially
announced in 2005 and was scheduled to be completed in 2008.
More than 2,500 people signed up to invest in Schon’s flagship project, which was billed to have included 49
buildings comprising 4,000 apartments around a man-made lagoon.
With little construction on site by 2014 and dozens of investors demanding their deposits, the Dubai Land
Department (DLD) announced the scheme would be broken into seven phases and monitored by the Real Estate
Regulatory Agency until completion.
Nonetheless, many investors who bought off-plan homes at the project are still angry at the delays and have been
meeting to discuss how best to press their case.
"The deal signifies the strength of partnership in developing large projects," said Noorul Asif, the chief operating
officer of Schon Properties. "The government would not allow this to happen unless it was confident that both
developers will deliver and that customers are in safe hands."
Xanadu first became involved with Dubai Lagoon in 2014 as part of a deal brokered by the DLD, which was
attempting to restart projects stalled during the global financial crisis.
At the time, Xanadu agreed to invest Dh339 million into the project as part of a deal that involved its contracting
arm PGS Gulf Contracting being awarded a Dh678m contract for construction work on the site.
However, yesterday Schon said it had now agreed to transfer ownership of five buildings comprising 210
apartments at its Rowan neighbourhood, another five buildings comprising another 210 apartments at its
Winterberry neighbourhood and 880 apartments in seven buildings at its Lilly neighbourhood to Xanadu so that it
could press ahead with the rest of the project using its own contractors.
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Schon said it now plans to press ahead with work on 830 apartments and another 2,550 hotel rooms, which are
also partially built.
According to Schon, the entire mixed-use project will now be finally completed by 2020.
Source: The National
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UK BUILDER CARILLION MUTED ON
PROSPECTS FOR GULF CONSTRUCTION
Wednesday, 01 March, 2017
The UK-based construction company Carillion has said that it expects the pace of new contract awards in the
Middle East to remain slow this year amid a low oil price environment.
The company, which operates in the UAE and Oman through a pair of long-standing joint ventures with local
partners, reported an 11 per cent increase in revenue to £668.3 million (Dh3.03 billion) in its Middle East
construction business last year, but added that this included a £77.8m positive swing in currency movements.
The division’s underlying operating profit declined by 36 per cent to £16.1m, but the firm said this was owing to a
one-off gain in 2015 from reorganising staff accommodation in Oman. Without this, it said operating profit
margins would have increased to 2.4 per cent, up from 1.9 per cent last year.
Speaking on a conference call, chief executive Richard Howson said the pace of contract awards in the Gulf
"remained very slow throughout the year due to the prolonged low oil price".
He said that it had been able to pick up two major UAE contracts where it had been able to bring in funding from
UK Export Finance, a government-backed export credit agency – the new £60m Bee’ah headquarters in Sharjah
and a £160m deal for two office buildings at Dubai World Trade Centre, which is its third win at the same
development.
Mr Howson said that Carillion is currently being " very, very selective in the Middle East", focusing mainly on
projects where it can bring in export fin¬ance as it offers more certainty over when it will be paid.
"In the last few years we have deliberately not chosen to bid for what I call traditional construction work in the
Middle East," he said.
This targeted approach and the slower market meant that the value of its current and probable orders dropped
to £500m by the end of 2016, compared to £800m a year earlier. However, its pipeline of potential contract
opportunities remains high at £15bn compared with £16bn in 2015 and makes up for 36 per cent of total work
being targeted by the firm.
Interserve, another UK contractor active in the region, also reported mixed fortunes.
Its international construction division, which trades solely from the Middle East in joint ventures with Khansaheb
Group in the UAE and as Gulf Contracting in Qatar, reported a 6 per cent increase in revenue to £296.9m and a 30
per cent growth in operating profit to £16.9m.
It won new UAE contracts from Majid Al Futtaim Group for the City Centre Ajman Mall and for a £40m tower in
Dubai International Financial Centre.
In Qatar, it picked up a deal to build a five-star hotel for InterContinental Hotels, but added that this market
"continues to show few immediate signs of the long-awaited resurgence".
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Moreover, its international support services arm, whose main area of business is serving the region’s oil and gas
market, grew turnover by 19 per cent to £267.9m, but experienced "a significant reduction in activity and profit"
during the second half of the year, which it blamed on the lower oil prices and client spending curbs.
Chairman Glyn Barker said this slowdown was likely to extend into this year. The company has already begun to
reduce the size and cost base of the division’s operations, as well as div¬ersifying into related markets like power
and water in Oman and Qatar.
"We have been and will continue to take mitigating action on our cost base where possible," said Mr Barker."
Source: The National
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UAE MILLENNIAL HOMEOWNERS LOWER
THAN GLOBAL AVERAGE
Wednesday, 01 March, 2017
A quarter of people aged 18 to 36 in the UAE own their own home, a new survey has found. The figure for the UAE
is far lower than the global average, but in line with the trend across all age groups in the UAE.
According to a report by HSBC that assessed the views of more than 9,000 people in nine countries, just 26 per
cent of millennials in the UAE own their own property.
The survey, in which more than 1,000 respondents in the UAE were questioned, including Emiratis and
expatriates, found that the proportion was the lowest of nine countries analysed by HSBC. China topped the list at
70 per cent of millennials saying they were owner- occupiers, while 46 per cent of Mexican millennials own their
own homes and 41 per cent of French millennials saying the same.
At the other end of the list Australia had the second lowest proportion of millennial homeowners at just 28 per
cent and the UK came in at 31 per cent.
Unlike in most of the other countries surveyed, the proportion of millennials in the UAE owning their own homes
came in roughly in line with homeowners in the general population, which is at 28 per cent. According to official
statistics, 64.5 per cent of adults in the US own their own homes and in the UK the level stands at 63.5 per cent.
"When you look at the fact that only 28 per cent of respondents in the UAE own their own homes obviously that is
lower than other markets, but you have to remember that this is coming from a low base," said Craig Plumb, head
of research at JLL’s Dubai office. "The number of owners-occupiers has increased across the board over the past
15 years. Before then most foreigners were not allowed to buy property in the country."
Despite the introduction three years ago of limits on how much could be borrowed to buy a home, millennials in
the UAE showed the lowest level of concern about raising a deposit, with 45 per cent of those questioned
reporting a lack of savings for a deposit as a barrier to home ownership. That’s compared with a global average of
69 per cent.
Instead, 50 per cent of UAE millennial homeowners said that their parents had helped them to buy a home – the
highest proportion of all the countries surveyed.
"There has been a lot of talk about the affordability of real estate in the UAE, but from this survey what we can see
is that home buyers in the UAE are actually doing OK compared with those in other parts of the world," said Kunal
Malani, the head of customer value management, HSBC Middle East.
Source: The National
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NEW DH92M PALM JUMEIRAH VILLAS TO
FEATURE ‘WORLD’S MOST EXPENSIVE
BATHS’
Thursday, 02 March, 2017
It may be a building site at present but Forum Group’s XXII Carat development, marked by an eight-foot-high gold
hoarding, is attempting to lure the world’s super-rich.
Positioned next to the One & Only hotel at the extreme end of Palm Jumeirah’s crescent, the 22 seven-bedroom
luxury villas are currently being built by the Russian developer Forum Group. It is the company’s first venture into
the Middle East. The homes are on the market at between Dh38 million and Dh92m.
"There are seven billion people on this planet so I don’t think finding 22 investors who can afford these villas will
be a problem," says Anton Yachmenev, Forum Group’s managing director.
So what do you get for your money? For the biggest spenders, the company says it plans to include a free studio
apartment with each of the Dh92m villas as a gift to house staff.
"Some people like their nanny to live with them, some people don’t. No one so far has said no to a free studio,"
Mr Yachmenev says. "They all love them."
In addition, Forum Group is offering some purchasers of its most expensive villas super-luxury interiors, which
include the world’s most expensive baths. These bathtubs are crafted from huge slabs of amethyst, rock crystal
and malachite and are sourced from the Amazon rainforest before being shipped to Italy to be shaped and
polished. They are often sold at prices exceeding US$1m.
The company says it is spending Dh30 to Dh40 million alone on the villas’ fixtures and fittings, which will include
fingerprint entry, walk-in closets, marble floors, soundproof walls and locker rooms.
That’s on top of the Dh200m it spent in 2009 on the land and the Dh200m in basic build costs.
"It was a big gamble to buy the land in 2009 but it wasn’t the right time to start this in 2010 or 2011. The market
wasn’t ready. Now this place is a lot more developed. There are different kinds of investors coming to Dubai," Mr
Yachmenev says.
Q&A
What is Forum Group?
Forum Group is a developer set up by Russian billionaire Oleg Cherepanov, who made his money by building
homes and malls in Russia’s fourth largest city Yekaterinburg.
How do the prices compare with other Palm villas?
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According to property broker Asteco, average prices for villas on the Palm Jumeirah during the final quarter of
2016 stood at Dh2,500 per square foot. Mr Yachmenev says that the less expensive villas in his development
comprise around 10,000 square feet and retail at between Dh4,000 and Dh4,500. However, he says that this
compares with refurbished higher number signature villas on the Palm fronds which sell for between Dh3,500
and Dh4,000.
How much did the land cost?
The 500,000 square feet plot of land on which the development is being built was purchased for Dh200 million. It
was bought in 2009 through equity.
How much of it has been built?
The developer says it has now completed 40 per cent of construction.
How many have been sold?
So far Forum Group says it has managed to sell five of the villas at the end of last year – albeit at a bit of a
discount – to wealthy Russians and Europeans.
What else is in the development?
Forum Group is also building 10 apartments on the site which are required as part of its planning consent from
Palm master developer Nakheel. Forum says it plans to sell the larger units and will give away the studios with
every high value villa purchase. Nakheel also requires Forum to build 24-hour dining space which Forum says it is
likely to offer to the purchaser of one of the largest apartments as some form of extra private space.
Source: The National
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With over 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, 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.
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:
John Allen - BSc, MRICS
• Consultancy and Advisory services
• Market research
• Valuation services
Director - Valuation & Advisory
+971 4 403 7777
[email protected]
SALES
Jenny Weidling - BA (Hons)
Manager – Research and Advisory
+971 4 403 7789
[email protected]
Asteco has established a large regional property Sales
Division with representatives based in UAE, Saudi
Arabia 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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