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RESEARCH DEPARTMENT
NEWS BRIEF 23 SUNDAY, 04 JUNE 2017
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REAL ESTATE NEWS
UAE/ GCC
UAE ECONOMY POISED FOR GROWTH PICK UP, EFG-HERMES SAYS
MORE NRIS KEEN TO MAKE SECOND PROPERTY INVESTMENT
LANDLORDS, RETAILERS ADAPT TO NEW MARKET CONDITIONS
VAT AND REAL ESTATE: A LEGAL PERSPECTIVE
NEW ENTITY TO MANAGE MERAAS, DUBAI HOLDING PROJECTS
KUWAIT'S PROPERTY MARKET RECOVERY PEGGED TO OIL PRICE RISE
UAE IN TOP 10 IN IMD WORLD COMPETITIVENESS CENTRE RANKINGS 2017
UAE DEVELOPERS BUY MATERIALS IN BULK TO AVOID VAT EFFECT
STRATEGIC FACILITY MANAGEMENT CRUCIAL FOR REGION'S BUILT ASSETS
SAUDI ARAMCO SIGNS DEALS TO BUILD GULF'S BIGGEST SHIPYARD
DUBAI
DUBAI TO HOST INTERNATIONAL FORUM FOR REAL ESTATE PROFESSIONALS
ENBD REIT INVESTS DH120M IN STUDENT ACCOMMODATION
BUY NOW, PAY LATER DEALS SPUR DUBAI PROPERTY MARKET
WHY DUBAI IS A HOTSPOT FOR PROPERTY INVESTORS
DUBAI HOTELS OUTSHINE REGION, POST HIGHEST REVENUE, OCCUPANCY RATES
DIP GROWS WITH 280 NEW SUB-TENANTS IN THE FIRST FOUR MONTHS OF 2017
PROPERTY ON THE FAST TRACK: DUBAI METRO’S IMPACT ON REAL ESTATE
SHAIKHANI GROUP ANNOUNCES HANDOVER OF 100 UNITS IN CHAMPIONS TOWER 1
WORK STARTS ON $111M SIX-TOWER PROJECT IN DUBAI
DUBAI EXPO 2020 SUCCESS DEPENDS ON WHAT HAPPENS AFTER
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REAL ESTATE NEWS
ABU DHABI
FAITHFUL + GOULD TO OVERSEE MIRAL’S DH12BN YAS BAY PROJECT
BLOOM PROPERTIES STARTS CONSTRUCTION ON SOHO SQUARE PROJECT AT
SAADIYAT ISLAND
UAE STOCKS GAIN DHS2.8 BILLION ON BUYING SPREE
NORTHERN EMIRATES
RAK'S TOURISM SECTOR ON A ROLL
INTERNATIONAL
FLOOD OF BUYERS SNAP UP HONG KONG FLATS BECAUSE OF THIS REASON
INDIA STAYS FASTEST GROWING ECONOMY
NORTHACRE SAYS INVESTORS ARE IN FOR THE LONG HAUL ON LUXURY LONDON
PROPERTY
U.S. HOME VALUES NATIONWIDE SURPASS 2007 MARKET PEAK
UK HOUSING LIFTS CONSTRUCTION GROWTH TO STRONGEST SINCE 2015
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UAE ECONOMY POISED FOR GROWTH PICK
UP, EFG-HERMES SAYS Tuesday, May 30, 2017
The UAE’s economy will turn the corner next year, with growth outstripping 2017, thanks to improvement in the
non-oil economy, according to the Egyptian investment bank EFG-Hermes. EFG-Hermes expects the economy to
slow this year amid continued lower oil prices and the difficulties small and medium-sized enterprises are having
in adjusting to the new economic realities. As a result, real GDP growth is expected to slip to 1.1 per cent this year
from 3 per cent in 2016, the bank said on Tuesday. Next year, however, the economy is expected to advance by 3
per cent.
"We see the pick-up in economic activity gaining more pace over the coming period, driven mostly by Dubai’s
expansionary fiscal stance, preparations for Expo 2020 gaining pace and Abu Dhabi’s receding fiscal tightening,"
said Mohamed Abu Basha, an economist at EFG-Hermes. "Overall, GDP growth is likely to decelerate this year in
light of lower crude production in compliance with OPEC supply cuts."
OPEC and a group of countries led by Russia have agreed to extend a six-month global oil output cut that ends in
June into the first quarter of next year to prop up oil prices.
Citing higher tourist arrivals, a rise in Dubai property transactions, an increase in government spending on
projects ahead of Dubai Expo2020 and Abu Dhabi’s relaxation of austerity, the Cairo-based bank said it expects
the country’s non-oil economy to advance 3 per cent this year and 3.5 per cent next year. Last year, the non-
economy grew by 2.7 per cent, the bank said.
When it comes to where the growth will be coming from, Mr Abu Basha said that most of it will come from Dubai
rather than Abu Dhabi because the former is less reliant on oil prices than the latter. The UAE economy’s growth
has slowed in recent years due to the collapse in oil prices that started in summer 2014.
As a result, governments and companies have cut back on spending on projects and slashed jobs. Consumers
became cautious about spending money, further dampening growth. However, a rebound in oil prices since
November has improved business confidence in the emirates, while an uptick in global trade has made
economists, including those at the IMF, more upbeat about the local economy.
The non-oil economy is set to rebound this year on stronger global trade and investment spurred by Dubai Expo
2020, the IMF said this month. Non-oil GDP is forecast to expand at 3.3 per cent this year with the budget deficit
shrinking to 4.5 per cent of GDP, it said. Overall, the economy will expand by 4.4 per cent next year from 1.5 per
cent this year, according to the fund.
Mr Abu Basha also cited an improvement in key economic indicators for the UAE, such as the monthly purchasing
managers’ index, as a reason behind the investment bank’s renewed sense of optimism.
A gauge of the Dubai economy showed that the emirate’s business conditions improved in March amid gains in
output, new orders and employment. Wholesale and retail, travel and tourism and construction industries led the
advance on the Emirates NBD Dubai Economy Tracker in March, capping the index’s strongest quarter since the
first quarter of 2015.
Meanwhile, tourism has also been on the rise. In the first three months of the year, Dubai hosted 4.57 million
tourists, up by 11.5 per cent on 4.1 million from a year earlier. The growth was more than double the rate
registered in the same period last year.
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Visitors from India, Saudi Arabia and the UK accounted for one-third of the total number during the period, with
India becoming the first country to record almost 580,000 visitors in any quarter, according to Dubai’s
Department of Tourism and Commerce Marketing.
Source: The National
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MORE NRIS KEEN TO MAKE SECOND
PROPERTY INVESTMENT Tuesday, May 30, 2017
More NRIs in the UAE are now interested in securing an additional investment back home - there has been a rise
of 110 per cent in this segment from 20 per cent last year to 42.12 per cent now.
This was revealed in a survey conducted by the organisers of the upcoming Indian Property Show among 10,000
UAE-based Indian expats.
There is an increase of about 45 per cent in people looking to buy homes in the budget range of Rs5.1 million to
Rs7.5 million (Dh290,000 to Dh426,000) from 21 per cent last year to 30.48 per cent this year.
Although Mumbai, Chennai, Bengaluru, Delhi, Hyderabad and Pune remain the top favourite cities among the
Indian community here, Kannur, Thrissur and Thiruvananthapuram have emerged as new destinations of
interest.
"NRIs are crucial stakeholders of the real estate industry. In 2017, total NRI investment in realty in top eight cities
is expected to touch $11.5 billion [Dh42.20 billion]. This will represent 20 per cent of the total market share,
currently estimated at $60 billion [Dh220 billion]," said R. Srividya, general manager of corporate sales and brand
engagement, Indian Property Show, Sumansa Exhibitions.
The Indian Property Show, now in its 20th edition, will be held from June 8 to 10 at the Dubai World Trade Centre.
The survey was conducted to understand the reason of buying property in India, preferred cities for investments,
type of property, timeframe, budget and finances planned, etc.
Apartments remained a favourite choice for investment at 46.97 per cent followed by villas (27.35 per cent), land
(15.08 per cent) and commercial (10.60 per cent). There has been a 51 per cent increase within the 41 to 50 year
age group of people looking to buy property in India, from 25 per cent last year to 37.78 per cent this year.
Majority of interested NRI buyers from the UAE fall within the monthly household income bracket of Dh10,000 to
Dh20,000 at 39.17 per cent, whereas the second biggest group earns between Dh20,000 and Dh30,000 at 22.01
per cent.
There has been a decline in intent to purchase within the budget ranges of Rs500,000 to Rs2.5 million (19 per cent
to 14.3 per cent) and Rs2.6 million to Rs5 million (26 per cent to 21.94 per cent).
There has been a 32 per cent increase in the number of NRIs looking to purchase in the budget range of Rs5.1
million to Rs10 million (37 per cent to 48.38 per cent).
Source: Khaleej Times
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LANDLORDS, RETAILERS ADAPT TO NEW
MARKET CONDITIONS Monday, May 29, 2017
Landlords are offering flexible lease terms, including longer rent-free periods, in an attempt to retain their key
occupiers as the UAE retail market faced continuing headwinds with a strong dirham continuing to dent sales.
A new research by real estate consultancy Knight Frank also reveals that while well-established malls with higher
footfall continue to maintain healthy occupancy rates, the delivery of additional retail supply is expected to put
pressure on overall occupancy rates.
The UAE shopping malls are also expected to experience further competitive pressures from online rivals, as
more consumers embrace e-shopping, analysts at the real estate consultancy said.
However, the long-term view remains optimistic as Dubai's retail market is strongly supported by the hospitality
sector. "The delivery of Dubai's new theme park complexes along with the Opera District and other demand
generators is expected to drive demand for the hospitality market, which will undoubtedly have a knock-on effect
on the retail market."
Matthew Dadd, partner at Knight Frank, said retailers in the UAE are now seeing modest single-digit growth in
sales due to general macroeconomic conditions. However, there are signs of saturation as an additional 900,000
sq m of space will be delivered over the next couple of years through new shopping centres or expansions to
already existing ones. This comes as developers use retail as an anchor for their mixed-use developments.
The report noted that super regional malls such as The Dubai Mall and Mall of the Emirates remain the top choice
for existing and new brands to operate in. Meanwhile community and neighbourhood centres have gathered
pace in recent years, as they add value to the residents and ensure continuous revenue streams for retailers and
mall operators.
A report by real estate consultancy Core Savills predicts that Dubai can expect to see its existing retail stock go up
by 25 per cent in the next three years with nearly 800,000 square metres of new retail supply. Therefore, the
market should anticipate an overhang of retail supply owing to the many projects nearing completion, including
Nakheel Mall, Pointe on the Palm Jumeirah, and The Dubai Mall expansion, not to mention the high number of
malls looking to be operational in time for Expo 2020.
Dubai, despite its modest population, is already ranked second highest in the world - behind New York - in terms
of mall density at 1,214 sqm(GLA)/1,000 people and is due to show signs of peak market penetration, the report
notes.
Knight Frank report noted that weaker market conditions coupled with a strong supply pipeline are driving
retailers and mall operators to offer promotions and price reductions to entice customers and maintain strong
footfall. Strategies such as the three-day 'Super Sale' (May 18-20), is part of the Dubai Festivals and Retail
Establishment's robust scheme to further boost Dubai's retail sector. Boosting sales, particularly ahead of
Ramadan and the quieter summer months, is expected to further enhance and build on the emirate's strong
position as a central shopping hub, said the report.
The general macroeconomic conditions that resulted in the slowdown in retail sales growth in 2016 are still
largely in place and will continue to contribute to a challenging environment for retailers. Once used to double-
digit growth
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(10 per cent-15 per cent), UAE retailers are now seeing modest single-digit growth in sales, said the report.
Another trend is that traditional retailers are facing competition from e-commerce leaders such as Amazon. E-
commerce sales are expected to account for $1.5 billion of the Gulf's high-end luxury segment within the next
four years.
Retailers are also coming up with new strategies by more often offering promotions and price reductions to
entice customers and maintain strong footfall to further enhance and build on the emirate's strong position as a
central shopping hub.
The study found that supported by Dubai's position as a regional hub for trade flows and re-exporter of devices in
the region the electronics market is expected to grow 4.7 per cent to reach $3 billion by 2020.
The study also noted that traditional retail sector is evolving, offering urban-lifestyle destinations, such as Box
Park, Citywalk and the Dubai Design District (D3).
"It is our view that brick & mortar stores will continue to be essential given shopping centres in Dubai provide
family entertainment in addition to shopping, however retailers may look to realign their real estate strategies to
reduce operating costs and to invest further into online channels," said the study.
Source: Khaleej Times
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VAT AND REAL ESTATE: A LEGAL
PERSPECTIVE Wednesday, May 31, 2017
Until such time as the VAT laws are finalised and publicised, there will remain an element of doubt as to their final
form. Nonetheless, some patterns are emerging which may allow those in the real estate industry to take steps
now to protect or clarify their position regarding VAT in their legal documentation.
What we know or think we know
VAT will be charged at five per cent on the taxable supply of goods and services. VAT is a tax on the value added at
each stage of the supply chain.
Any entity or person required to register must charge VAT on their taxable supplies. The difference between the
VAT charged on supplies made (outputs) by a registered entity and the VAT that entity pays to suppliers (inputs) is
the tax payable to the VAT authority. If the inputs exceed the outputs a credit may be due.
Only businesses making supplies over a certain threshold (anticipated to be Dh375,000) shall be required to
register for VAT on a mandatory basis. However, to take advantage of being able to set off inputs and outputs,
many businesses under this threshold may opt to register to recover VAT provided that their supplies exceed a
lower threshold of Dh187,500. It is also anticipated that certain supplies will be either “exempt” or “zero rated”. In
simple terms, a “zero rated” supply will enable the supplier of the relevant goods or services to charge VAT at zero
per cent, while being able to recover any VAT paid on its inputs. An “exempt supply” is where the provider of
goods or services cannot charge VAT on the supply, but must pay VAT on its inputs.
Residential property
As the sale and purchase of newly constructed real estate is likely to be “zero rated” and secondary market real
estate transactions are likely to be “exempt”, investors in residential property will not be required to pay VAT to
the developer or a subsequent seller.
Similarly, residential landlords are not expected to charge VAT to tenants. However, investors are likely to have to
pay VAT to providers of leasing or management services relating to the property and will not be entitled to
recover this VAT.
Residential developers
As the first sale of a property is likely to be zero rated, it is expected that developers will not be able to charge VAT
on such a sale, but will be able to claim back any input VAT paid to their suppliers in the course of developing the
project. For this reason, it is not necessary to specify that the purchase price in contracts with investors is
“exclusive of VAT” or “plus VAT”; doing so could confuse investors and result in them seeking to reduce the
purchase price to offset the risk. However, developers’ management documentation (strata or otherwise) should
clarify that VAT will be payable by investors on any management service fees.
Commercial investors
It appears relatively settled that investors in commercial real estate will be required to pay VAT on the purchase
price, whether from the developer or secondary market. It is anticipated that if the taxable activity of the investor
is the leasing of real estate, the investor shall be entitled to claim a credit for the VAT paid on the acquisition of
the real estate. As such, the payment of the VAT on acquisition should be more of a cash flow issue.
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Commercial tenants
Commercial tenants will be required to pay VAT. For most commercial tenants, this will not be a material issue as
they will be able to set off this input VAT against output VAT that they are collecting on their supplies.
Accordingly, it should not be an issue in most cases for landlords to insert clauses stating clearly that all sums
charged to tenants under the lease will be “exclusive of VAT” and that VAT will be payable in addition to such
sums. Landlords will also pay VAT on any management services they receive. In the case of net leases, where
service charges are payable by the tenants, VAT may also be payable on such service charges.
With regard to leases entered before the VAT laws come into force, a key issue will be whether the tenant is
required to pay VAT on the rent if the relevant lease does not clearly state that rent is exclusive of VAT. In this
respect we would expect the transitional provisions of the VAT laws to state that VAT would be payable in addition
to the rent where the tenant is registered for VAT and is entitled to a deduction for the input VAT. If the tenant is
not registered for VAT the position is more controversial as there is no ability for the tenant to claim the rent as an
input credit. In this situation it is plausible that the rent will be deemed to be inclusive of VAT. However, the
position that the VAT laws adopt on this key issue remains to be seen.
Commercial developers
As noted above, developers will be entitled to charge output VAT on the sale of commercial real estate and to set
off such amounts against the input VAT they pay to their suppliers. Accordingly, developers should provide in
their sale and purchase documentation that the purchase price will be “exclusive of VAT”.
Other issues
Precisely how commercial and residential real estate is defined also remains uncertain at this stage. Whilst we
would anticipate that real estate assets such as workers’ accommodation, hotels and serviced apartments would
be considered commercial real estate, the status of optional rental pool properties or holiday homes is less
obvious. Mixed-use developments incorporating residential and commercial components may also create some
challenges in terms of how the apportionments of VAT inputs are calculated. Another key issue may be what
exactly constitutes “bare land” in determining whether or not an “exempt” supply has been made.
In the absence of the final form of the VAT law or additional guidance from the authorities, it is difficult to be
prescriptive as to what amendments developers or investors may want to make in relation to their legal
documentation. Moreover, this article is not intended to be a full summary of all issues likely to emerge from the
VAT law. We trust, however, that this article alerts stakeholders in the real estate industry to some of the relevant
issues and gives guidance as to what areas may need to be explored.
Source: Gulf News
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NEW ENTITY TO MANAGE MERAAS, DUBAI
HOLDING PROJECTS Monday, May 29, 2017
A new business entity is expected to be launched in Dubai, managing multibillion dollar development projects
across Dubai Holding and Meraas Holding. The entity will be led by Raed Al Nuaimi, who will serve as its chief
executive officer.
Al Nuami currently serves as chief executive officer of DXB Entertainments (DXBE), the Dubai-listed owner and
operator of theme parks. A statement from DXBE on Monday said Al Nuami will remain the company’s CEO until a
new chief executive is appointed.
“He will thereafter continue as a senior executive with the company, in the role of managing director and
executive member of the board of directors,” the statement said.
It added that the appointment of a new CEO “will be announced by the company in due course.”
No other details were provided on the new entity or when it would launch. Managing development projects
across Dubai Holding and Meraas, however, would entail working on projects that possibly include Boxpark, City
Walk, Last Exit, La Mer, and Pearl Jumeira, among others, all of which are under the Meraas umbrella. Projects
under Dubai Holding include Jumeirah Group, Tecom Group, Emirates International Telecommunications, and
Dubai Group, among others.
Before his role as CEO of DXBE, Al Nuami was chief leisure and entertainment officer at Meraas Holding, where he
helped develop new strategies and identify opportunities for the company in key growth areas of leisure and
entertainment. According to his bio on the DXBE website, he earlier also held senior management roles with
Tatweer, Dubailand, and Dubai Properties Group.
Al Nuami is a former member of the UAE Naval Forces, and holds a bachelor’s degree in Business Administration
from Ashford University, UK.
His appointment as head of the new entity was made by Abdullah Al Habbai, who is the chairman of Meraas
Holding and DXB Entertainments. In March 2017, Al Habbai was also appointed by Shaikh Mohammad Bin Rashid
Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, as chairman of Dubai Holding, the
investment conglomerate.
Source: Gulf News
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KUWAIT'S PROPERTY MARKET RECOVERY
PEGGED TO OIL PRICE RISE Tuesday, May 30, 2017
Residential property deals in Kuwait declined by 42 percent in April compared to March due to sluggish market
activity, with recovery depending on oil price rise, Kuwait International Bank said on Tuesday.
A total of 305 deals worth KD89 million [$293.15m] were registered in April, compared to 528 deals, valued at
KD51 million, in March. Average deal value fell by 27 percent compared to last month, reaching KD291,000 per
deal, the bank said.
Sales in investment sector fell by 42 percent quarter-on-quarter and 51 percent compared to the previous year,
reaching KD42m. The sector registered 60 deals compared to 81 deals the month prior, with average deal value
falling to KD706,000 per deal. On the other hand, the commercial sector witnessed only four deals worth KD13m.
“Although moving at a slow pace, prices continued to decline, as a result of economic uncertainty, and
demand/supply levels in the market,” the report said.
It added that over the next couple of months, Kuwait real estate market is expected to stand at levels similar to
those observed in April, unless the market witnesses positive developments in crude oil prices or economic
developments, both locally and globally.
Source: Arabian Business
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UAE IN TOP 10 IN IMD WORLD
COMPETITIVENESS CENTRE RANKINGS 2017 Thursday, June 01, 2017
The UAE jumped five positions to rank among the world's top 10 most competitive economies for the first time in
the annual rankings of the IMD World Competitiveness report 2017.
The UAE is the only Arab country to find a place among the super league of the global top 10 nations, as the
reform announced by the UAE government at the beginning of 2015 seems to be paying off.
As the global progress towards the digital economy gains momentum, the UAE is leading the region's digital
transformation with a host of innovative programmes to enhance its networked readiness.
Commenting on the performance of this year, Reem bint Ibrahim Al Hashemi, Minister of State for International
Cooperation Affairs and Chairperson of the Federal Competitiveness and Statistics Authority, said, "Every year, the
UAE demonstrates to the whole world the effectiveness and efficiency of the overall development strategy
adopted by the UAE government under the vision and guidance of its wise leadership, based on investing in
human development, stimulating innovation, development and continuous modernisation."
"We congratulate the UAE and its people on this feat, and thank all federal government agencies for their
concerted efforts to support the UAE's global competitiveness," she said.
"The adoption of international standards and indicators to assess the performance and competitiveness of the
federal and local government institutions, helps us to perform our mission of providing consultancy for the
development of performance, and working with these institutions to transform proposals into plans, initiatives
and strategies aimed at improving the global competitiveness of the state and achieving the UAE Vision 2021 to
become one of the best countries in the world by the Golden Jubilee of the Union," said Abdullah Nasser Lootah,
Director-General of the Federal Authority for Competitiveness and Statistics.
Source: Emirates 24/7
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UAE DEVELOPERS BUY MATERIALS IN BULK
TO AVOID VAT EFFECT Wednesday, May 31, 2017
Dubai: In a move to avoid any VAT-related costs, local developers with existing projects are already placing orders
on building materials they will need only after construction is complete. By placing orders now and receiving the
goods before the year is out, they will not have to factor in the 5 per cent additional surcharge that will come into
effect from 2018, according to an industry source.
“This is happening even with projects that are only at the beginning stage,” said Mohammad Mustafa, managing
director of Emsquare Engineering Consultants. “If they place the orders now for categories such as ceramics,
doors, ironmongery, pay and have them delivered, the developer makes sure those VAT charges do not apply for
their existing project. As such, it will mean quite a difference between what it will cost them now and the likely
expenses from 2018.
“But any project coming after three months will feel the impact of VAT and will need to factor in the increased
costs and related overheads.”
Over the last three quarters, a rush of projects were put out for tendering, and particularly so in Dubai. Project
promoters have also been quick to announce contractors and get the work cracking on site.
Doing so also places them in a stronger position to start placing orders on what these projects will require after
completion. Clearly, VAT has been a clear factor in their cost equations, industry sources add.
Fortunately, the bulk of the building material categories are seeing price stability. It is not yet certain whether
developers bringing forward their orders will put pressure on such commodity prices.
“All VAT-related material costs will have to paid by the developer... this is being strictly enforced in new
contractual terms by the contractors,” said Mustafa. “They have issued notices to all parties in the last three
months. Developers will need to do some preparatory work on managing their costs after VAT gets implemented.
There will be a steep learning curve.”
Mustafa’s firm is currently associated with 60 ongoing projects with a combined value of Dh4 billion.
According to him, even as most material prices have been stable, cement has gone through 5-10 per cent cost
inflation in the last 12-18 months.
“Also, Dubai Municipality has during this period been stringent in requiring sub-contractors to have valid Dubai
licenses for participation. And that their labour force must have accommodation in Dubai itself.”
Their contractors and sub-contractors are taking every precaution not to get hit by any sudden cost spiral.
Lump-sum contractual deals are the norm, which allows contractors to factor any possible increases in key
commodity costs.
“Lump sum contracts offer a lot of security for contractors — as such, no developer is willing to accept inflation-
related cost escalations for materials,” said Mustafa. “They will only agree to pay what’s been agreed at the
beginning.
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“So, contractors key in all sorts of cost risks over the 18- to 20-month period a project typically takes. This way he
is already covered before the start of a project. In an uncertain market situation, this is still the best way to stay on
top of cost-inflation risks.”
Source: Emirates 24/7
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STRATEGIC FACILITY MANAGEMENT
CRUCIAL FOR REGION'S BUILT ASSETS Friday, June 02, 2017
Industry leaders at the first IFMA-RICS World Workplace Forum in the Middle East, discussed various strategic
topics in Dubai recently.
Almost 200 participants from over 24 countries participated in this high level forum hosted by IFMA, the
International Facility Management Association, and RICS, a global professional body working across land, real
estate, construction and infrastructure. Some of the topics were: "Dispelling the Myth: Strategic Facility
Management vs Traditional Facilities Maintenance"; why should organisations consider a model of strategic
facility management? What can be done by stakeholders in the market to encourage global best practice into the
region coupled with use of technology and data? And how can relationships and collaborative supply chain
benefit the industry?
With a diverse selection of speakers and panellists which brought global and regional perspectives, discussions
explored the importance of embracing strategic facility management for adding value to both end users and
owners of real estate, and ensuring longevity and capital value preservation and growth for built assets in the
region.
Lack of collaboration between asset owners, developers, FM's and service providers coupled with ineffective
tendering and procurement processes are issues which clearly need addressing.
Tariq Chauhan, CEO, EFS, and title sponsor of the event, commented: "Suppliers must be engaged with much
earlier in the supply chain to ensure they are able to add value for the life of the service contracts."
Opportunities for emerging technology and the use of data in building analytics is driving change in the industry.
Laurie Gilmer, VP Facility Services, Facility Engineering Services, emphasised the need to embrace digital
disruption, and that being flexible, innovative and adaptable will ensure success in the market place. She stressed
one of the biggest challenges facing the industry is from "competitors who don't currently exist and those we are
not aware of."
Facility management contracts across the GCC are predicted to hit $66 billion by 2020, and globally, FM is a
trillion-dollar industry practiced by 25-million professionals. It has grown both in size and scope - evolving from a
tactical service to a strategic discipline.
Asif Siddique, executive director at Deyaar Facilities Management, said: "In this growing market, this event is a
fantastic platform for facilities management professionals and decision markers to come together to learn and
discuss in-depth how international best practices can be applied in the region, the latest innovations impacting
the industry, and achievable strategies to drive robust development in asset management."
Source: Khaleej Times
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SAUDI ARAMCO SIGNS DEALS TO BUILD
GULF'S BIGGEST SHIPYARD Wednesday, May 31, 2017
Saudi Aramco plans to build the Gulf's largest shipyard through a joint venture with three companies that it
announced on Wednesday, a $5.2 billion project aimed at helping reduce the economy's reliance on oil.
Low oil prices have drastically slowed Saudi Arabia's economy so it is trying to create manufacturing jobs and
produce goods and services which traditionally it has imported.
Its strategy is to use large amounts of government money and the procurement budgets of big state-run
enterprises, such as national oil firm Aramco, to attract foreign expertise to develop strategic industries.
Aramco said it had signed a shareholder agreement with National Shipping Co of Saudi Arabia (Bahri), a state-
controlled firm which ships oil for Aramco, London-listed United Arab Emirates engineering firm Lamprell Plc, and
South Korea's Hyundai Heavy Industries Co.
The 4.3 square kilometer (1.7 square mile) shipyard will be located at Ras Al Khair on Saudi Arabia's east coast.
"The directors expect that the Maritime Yard will be the largest in the Arabian Gulf in terms of production capacity
and scale," Lamprell said in a statement.
Major production is expected to start in 2019 with the yard hitting full capacity by 2022.
It will be able to work on four offshore rigs and over 40 vessels a year including three very large crude carriers
(VLCCs), Aramco said.
The government will cover about $3.5 billion of the total cost, with the remainder funded by the joint venture, said
Lamprell, which will invest up to $140 million and own 20 percent of the venture.
Aramco will own 50.1 percent, investing as much as $351 million.
Bahri will invest up to $139 million for a 19.9 percent stake and Hyundai up to $70 million for 10 percent. The
government's Saudi Industrial Development Fund has agreed to provide a debt facility worth about $1 billion. As
part of the deal, Saudi Aramco's parent firm will buy 20 jack-up drilling rigs as well as offshore support vessels and
services from the joint venture, Lamprell said.
Lamprell shares jumped 13 percent after the announcement.
Bahri will buy at least 75 percent of its commercial vessel requirements over 10 years from the venture - a
minimum of 52 commercial vessels including a "significant number" of VLCCs, Lamprell said.
U.S. oilfield services and equipment provider McDermott International has said it will build a fabrication yard at
the Ras Al Khair complex and move some of its operations gradually from Dubai to Ras Al Khair by the mid-2020s.
Source: Reuters
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DUBAI TO HOST INTERNATIONAL FORUM
FOR REAL ESTATE PROFESSIONALS Tuesday, May 30, 2017
The Dubai Land Department, DLD, will host the 69th World Congress of the International Real Estate Federation,
FIABCI, in Dubai on April 27 - May 2, 2018.
FIABCI provides access and opportunity for real estate professionals interested in gaining knowledge, sharing
information and conducting international business with each other.
"Dubai made a prominent appearance at the 68th edition of the event, which took place under the slogan ‘Smart
City, Smart Building in the European state of Andorra on May 23- 28," said Mahmoud Al Burai, Executive Director
of Dubai Real Estate Institute (DREI), the educational arm of DLD.
"Dubai participated in this year’s congress with a major platform to inform delegates of what we will be
presenting at the ‘Happy Cities’ edition next year. Dubai is perfectly positioned to organise major international
events and this has allowed us to gain the trust of delegates from across the world. Dubai was voted to host this
important event due to this exceptional reputation and the concerted efforts made by a number of our official
institutions – notably the Department of Tourism and Commerce Marketing and Emirates Airline. We are
confident that we will organise a unique edition that is aligned with our vision of making Dubai the world's leading
destination for innovation, confidence and happiness."
During the event, Al Burai delivered a presentation highlighting investment prospects in Dubai and the
regulations that have been introduced to guarantee the rights of all parties in this sector. Dubai also took this
opportunity to launch the official website for the 69th edition – www.fiabcidubai.com – in order to promote it
among the attendees and inform them of the busy agenda they can expect.
The presentation also shed light on the unique opportunities that the UAE and Dubai in particular can offer
visitors and investors.
The FIABCI conference is an essential platform for those working in the real estate sector, as it provides them with
the latest knowledge, allows them to exchange ideas and visions, and promotes international trade links and
partnerships. It is a global network that is open to all stakeholders in the industry, which promotes business and
trade opportunities, and shares information and best practices at local, regional and global levels.
The network includes over 100 real estate companies, 1.5 million real estate professionals, 60 academic
institutions and 3,000 companies and individuals directly associated with the real estate sector, including
brokerage firms, real estate developers, lawyers, engineers, and insurance and planning experts. The systems and
materials presented at the event are being shared and deployed in four key regions: Africa, the Americas, Asia-
Pacific and Europe.
Source: Emirates 24/7
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ENBD REIT INVESTS DH120M IN STUDENT
ACCOMMODATION Tuesday, May 30, 2017
ENBD Reit, the Nasdaq Dubai-listed Shariah-compliant real estate investment trust managed by Emirates NBD
Asset Management, on Tuesday said that it has acquired Dubai's first purpose-built student residence by Global
Student Accommodation.
ENBD Reit has acquired the 424-bed property from the global leader in student accommodation on a sale and
leaseback agreement at a transaction value of Dh120 million. The acquisition is ENBD Reit's first in the student
accommodation segment, and part of a strategy for diversifying its asset portfolio. As part of the transaction GSA
has entered into a 7-year lease.
The property, Uninest Dubailand, was built in 2016 and is the first of its kind in Dubai. It is in close proximity to
Dubai Academic City, serving students attending more than 30 institutions across the city. Responsibility for
managing the property will remain with GSA's operations team, under the Uninest Student Residence brand.
"We're very pleased to announce our first acquisition since the successful listing of ENBD Reit on Nasdaq Dubai in
March. This is an important step in our capital deployment programme, and a key milestone for the process of
diversifying our portfolio beyond traditional asset classes," Tim Rose, head of Real Estate at Emirates NBD Asset
Management, said. ENBD Reit is a leading Shariah-compliant Real Estate Investment Trust, invested in properties
across Dubai's office, residential, and alternative real estate asset classes. In March 2017, the company
successfully raised $105 million when it listed on Nasdaq Dubai.
The property comprises a 160,000sqft floor area covering 2 basement levels, a ground floor and 9 upper stories,
as well as a roof-top swimming pool. A total of 242 rooms offer 424 beds, with residents benefitting from
amenities including a café, gym, entertainment room, cinema room, dedicated study area and outdoor terrace.
The operator also provides a regular shuttle service to universities and shopping malls.
Following the acquisition, the ENBD Reit property portfolio's total value is $349 million, with a net asset valuation
of $297 million, or $1.17 per share. Loan-to-value ratio on gross asset value is 32 per cent, with occupancy of 86
per cent across the portfolio. The portfolio's weighted average unexpired lease term is 2.23 years, with offices
accounting for 61 per cent of the portfolio, residential accounting for 29 per cent and alternative assets (including
student accommodation) making up the remaining 10 per cent. ENBD Reit has a total of 8 properties across
Dubai.
"I am delighted that GSA's work to bring purpose built student accommodation to Dubai has attracted the
attention of such a well-respected partner with a track record for investing in high quality, income generating
assets in the UAE. This transaction demonstrates the strength of GSA's vision to support the continued growth of
the higher education sector in the UAE and we look forward to working closely with ENBD REIT's real estate and
fund management team," said Nicholas Porter, chairman of GSA.
GSA is headquartered in Dubai and operates two brands Uninest and The Student Housing Company. Founded in
2007, the company is growing rapidly across Australia, China, Germany, Ireland, Japan, the UAE and the UK.
Source: Khaleej Times
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BUY NOW, PAY LATER DEALS SPUR DUBAI
PROPERTY MARKET Tuesday, May 30, 2017
Developers have used payment plans as a key tool to reinvigorate the real estate market since 2014, changing
from mostly front-loaded to back-ended payment plans.
In 2013, more than 80 per cent of launches had payment terms that were front-ended, whereas in 2016, more
than 55 per cent of launches had back-ended and post-handover payment plans, reveals a recent report by GCP-
Reidin.
"During the earlier cycle, I don't believe there was much initiative or a need for such incentives, with projects
launching and selling on the same day or week. As demand became less and more supply emerging, most
developers took the route of post-handover payment plans. This was simple but effective to stimulate a slowing
market and it worked," says Lewis Allsopp, CEO of Allsopp & Allsopp, a Dubai-based real estate agency.
"In the previous cycle, prospects of capital gains were much higher. Hence, incentives were limited to schemes
such as offering cars and similar incentives," recalls Hussain Alladin, head of research, GCP Properties.
In around 2012-13, developers launched payment plans linked to construction milestones. "However, the plan
typically ended as full balance payment on handover. Even when post-handover payment plans were launched
later, they typically averaged at one to two years," observes Ranjeet Chavan, CEO of SPF Realty.
Supply priced above the Dh1,200 per square foot level has not experienced the extent of developer incentives, as
has been the case with lower psf rates. This implies that back-ended payment plans have predominantly been in
the domain of the mid-market segment, and where they have been offered in the luxury space, it has been in the
larger ticket size items such as villas.
The bulk of the supply below Dh1,200 psf has been launched with flexible payment plans (68 per cent of units
have greater than a 50 per cent installment on handover), whereas in the above Dh1,200 psf supply, it is nearly
half, adds the GCP-Reidin report.
"End-users who buy luxury real estate tend not to get swayed by different incentives. They would much rather
prefer a discount on the transaction and offer to pay the property in full rather than opt for a payment plan.
There are some back-ended payment plans offered for mid-tier projects that will deliver by 2019 or 2020. Ultra
high-net-worth individuals choose to invest in these projects as it gives them flexibility and spreads the risk on
their property portfolios," explains Brigitte Tenbergen, luxury sales specialist at LuxHabitat.
In addition to generous payment plans, other incentives being offered are a 50 per cent to 100 per cent waiver on
Dubai Land Department fees, free upgrades, etc.
"Developers have recently started to offer to pay 50 per cent of the property registration fee. Guaranteed rentals
are another option, with some developers offering three years guaranteed rent. I think the biggest incentive a
developer can offer at the moment is linking the payment plan to a mortgage, so paying a maximum of 25 per
cent down and 75 per cent on completion. This would attract a large segment of the market who are end-users,"
suggests Allsopp.
Ever since back-ended payment plans entered the market in early 2014 through private developers, they have
proliferated throughout the ecosystem to the point where even government-sponsored developers are
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increasingly offering post-handover payment plans. Government sector developers were offering virtually no
back-ended payment plans at the start of the cycle. This trend has reversed mirroring that of the private
developers.
"Fifty five per cent of units launched by private developers have used back-ended payment plans, whereas in
government-sponsored developers, the majority is still front-loaded. There has been a shift from developers in
both sectors towards back-ended payment plans from 2013 in an attempt to reinvigorate demand," adds Alladin.
Back-ended payment plans are not only used by end-users, but by investors as well.
"Payment plans is a form of developer leverage that can be used by investors to increase their return on
investment. With prolonged payment plans, the investor can book a unit with smaller deposits, allowing him to
resell at a later point without using large amounts of capital, allowing them to achieve super-normal profits,"
points out Alladin.
"The payment schemes also help investors in a big way, giving an investor the flexibility to make payments in a
relaxed manner and enhance rental yields. The construction-linked plans offer credibility and trust among buyers
and post-handover schemes allow investors to start earning rental yields before full payment. It also attracts a
large end-user market where there are buyers who prefer to pay part of the purchase price after getting
possession of the property," concludes SPF's Chavan.
Source: Khaleej Times
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WHY DUBAI IS A HOTSPOT FOR PROPERTY
INVESTORS Tuesday, May 30, 2017
From its beginnings as a fishing and pearling port, Dubai has morphed into a glittering global marvel today. It has
defied the norms and defined the extraordinary to captivate the world. Glamour and grandeur have now been
synonymous with Dubai as it builds the first, largest and biggest phenomena in the world.
A seven-star hotel, the tallest skyscraper, the longest automated Metro network and more truly make Dubai a
world of wonders. As such, Dubai has become a business and tourism hub as well as a proud home to millions of
residents who revel in its lifestyle appeal. Combining its unique entertainment hotspots, shopping capital status,
unheard of luxuries, golden sunshine and sandy beaches, Dubai is the place to live out your dream life.
Dubai is a commercial capital for 3.5 billion people from the Indian subcontinent, Africa, the Middle East and CIS
nations - roughly 40 per cent of the global population. Recent studies show that Dubai has become a hotspot for
the world's wealthy property investors. It is the second most attractive real estate investment market in the world
for high net-worth individuals after London. There has been a five per cent growth in UK visitors to Dubai due to
the Brexit announcement and ensuing 20 per cent currency devaluation. Dubai attracted a record of 14.9 million
overnight visitors in 2016, an increase of five per cent from 2015. It aims to welcome 25 million visitors annually
by 2020 and for the third consecutive year, the Dubai International Airport has been ranked as the busiest
international airport in the world.
Real estate transactions in Dubai jumped to Dh77 billion in about 20,000 deals in the first quarter of 2017, a 45
per cent spike in value compared to the first quarter of 2016, as per the Dubai Land Department.
With Dubai launching a series of mega projects, the emirate's property sector is projected to see a ramp-up in
2018, thanks to a growing demand for new apartments ahead of Expo 2020. There is a total of 4,000 active
projects worth an estimated $313.6 billion, setting the stage for Dubai's solid growth in the construction sector.
Among various foreign investors, the trend of Indians investing in Dubai has surged due to exponentially
increasing property prices in India. Almost 25 per cent of Dubai real estate investments are contributed by
Indians. Foreign investments in Dubai real estate market approached Dh44 billion in 2016, from 22,834 investors
of 136 nationalities. There has been a 20 per cent boost in Chinese visitors crossing a half million for the first time
in Dubai and overnight traffic included a record 14 per cent of Russian investors. Properties in Dubai provide
among the world's best investor returns in terms of appreciation and rent (120 per cent compared to 75 per cent
in London and 63 per cent in New York). Dubai also enjoys 20 to 30 per cent real estate appreciation annually.
Dubai offers high rental yields compared to other major cities around the world - between seven to 10 per cent a
year. Bank borrowing for mortgage/home loans is at four per cent. So, even if one borrows money, he/she still
can make on average six per cent per year. This makes it a strong reason for people to buy property in Dubai and
have a second income from rents while the property keeps appreciating in value.
Dubai enjoys the status of a 'safe haven' and with continued growth of tourism and other sectors, more and more
investors from both traditional and untraditional markets will keep flocking here.
Source: Khaleej Times
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DUBAI HOTELS OUTSHINE REGION, POST
HIGHEST REVENUE, OCCUPANCY RATES Tuesday, May 30, 2017
Hospitality industry in Dubai recorded an increase in April across all key performance indicators, including the
highest revenue per available room, as hotels across the Middle East North Africa (Mena) region experienced
mixed results.
In Dubai, hotels reported RevPAR of $273, an increase of 18.7 per cent in April compared to the same 2016
period, and also posted the highest occupancy at 88 per cent and the highest average room rate of $310, said EY
in its Mena Hotel Benchmark Survey report on Tuesday. "Numerous events such as the Arabian Travel Market and
the Arabian Hotel Investment conference attracted visitors from across the Mena region and may have helped
boost the city's hotel performance," Yousef Wahbah, Mena head of Transaction Real Estate at EY, said.
Across the region, higher occupancies at lower average room rates affected hotels' overall revenue per average
room. "With the start of Ramadan at the end of May, it can be expected that Mena cities will experience a softer
performance until the Eid holidays at the end of June," said the report.
Abu Dhabi's hospitality market witnessed a drop in RevPAR by 4.8 per cent in April 2017, which can be attributed
to the drop in ADR from $133 in April 2016 to $120 in April 2017. However, occupancy increased by 4.5 per cent in
April 2017 when compared to the same month last year. According to official data issued by Dubai's Department
of Tourism and Commerce Marketing, Dubai's hospitality industry is poised to enter a new growth trajectory with
hotel rooms predicted to surge to 140,000-160,000 keys by 2020 from 93,030 as of January 2015.
As the UAE's tourism and leisure sector, a key pillar to prop the nation's post-oil economy, is projected to reach
Dh237 billion by year 2026, the Emirates hospitality sector is witnessing a big boom with nearly 100 hotel projects
now under construction. According to Market research firm STR, there are currently 99 hotels being built in the
UAE, the highest in the region. The ongoing projects represent 17 per cent of the 556 properties in the Middle
East that are either under construction or in the final and planning stages. The new hotels will boost the country's
supply by another 28,898 rooms. In 2017 alone, around 16,000 hotel keys are expected to be handed over in the
UAE.
EY report noted that Doha's hospitality market witnessed an increase in average occupancy from 65.6 per cent in
April 2016 to 74 per cent in April 2017. However, the city's ADR dropped by 7.3 per cent in April 2017 when
compared to the same time last year. The increase in Doha's hospitality market could be a result of Qatar Airways'
new offer for transit travelers who are eligible for a free one-night hotel stay if they choose to layover.
In Muscat, the hospitality market witnessed an increase in average occupancy of 7.7 per cent when compared to
the same period last year. This may be a result of the spring break and Easter holidays where expats from
neighboring countries considered the city to be an ideal short getaway.
In Saudi Arabia, Riyadh's hospitality market continues to witness an overall drop in performance month over
month. RevPAR dropped from $130 in April 2016 to $106 in April 2017. "This can be attributed to the drop in ADR
by 10.9 per cent in April 2017, coupled by a decrease in average occupancy of 5.8 per cent when compared to the
same time last year," said the report.
However, Makkah saw an increase in RevPAR, reaching $107, a 24.3 per cent increase from last year, possibly due
to an increase in religious tourism ahead of Ramadan.
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Outside of the GCC, Amman's hospitality market witnessed a decrease in RevPAR of 5.3 per cent in April 2017
when compared to the same month last year. The drop, according to EY, is a result of the ADR decreasing from
$153 in April 2016 to $148 in April 2017, though occupancy remained relatively steady.
Source: Khaleej Times
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DIP GROWS WITH 280 NEW SUB-TENANTS
IN THE FIRST FOUR MONTHS OF 2017 Tuesday, May 30, 2017
Dubai Investments Park (DIP), the unique integrated commercial, industrial and residential community in the
Middle East and a wholly-owned subsidiary of Dubai Investments PJSC, has announced that 280 new sub-tenants
have leased premises within DIP between January and April 2017, reinforcing its surging reputation as the
preferred and most sought-after business destination in region.
The new leases during the period under review included 219 warehouses, 38 offices and 23 commercial units,
bringing the total number of operational companies within DIP to over 4,880 – covering a wide range of
industries, from medium to light industrial units in aluminium, steel, chemicals, pharmaceuticals, textiles, plastics,
oil & gas, construction, building materials and contracting sectors.
The leases included new and old tenants, who expanded their warehousing spaces within DIP. These included
Transguard Group LLC, Azadea Group, ETA Melco Elevators Co LLC, Hilti Emirates, Chef Middle East, among
others. Over 95% of DIP land is leased and 98% of its industrial zone is occupied.
The surge in tenants reflects the growing eminence of DIP, driven by its strategic location, state-of-the-art
facilities, business-friendly environment and world-class logistics.
Omar Al Mesmar, General Manager of DIP, said: “The spurt in the number of sub-tenants in the January-April 2017
period is a very encouraging sign for DIP’s growth plans. Over the last 19 years, DIP has played a pivotal role in
attracting companies and industries from across the region and the globe. DIP’s proximity to Expo 2020 site and
Dubai South also makes it the preferred destination for both investors and end-users.”
Al Mesmar added: “DIP has consistently developed its road network, with increased accessibility to and from the
park with the new Al Houdh Interchange, besides upgrading its infrastructure, services and facilities and coupled
with this, the proposed Dubai Metro Route 2020 line passes through DIP, all of which continue to attract new
tenants into the development.”
Born out of a pioneering vision by Dubai Investments, DIP is today a booming community, accentuated by over
12,000 residential units, 90,000 residents, 20 million square feet of office space, 18 showrooms, six schools, five
operational hotels, besides 20 residential buildings and a large of staff accommodation.
DIP offers a wide array of warehousing, storage and commercial facilities for large, medium and small-sized
enterprises; as also dedicated plots where companies can custom-build warehouses.
Over the years, DIP has spent over Dh4 billion in enhancing and improving the infrastructure to international
standards, which includes 140-km of internal road network and well-integrated water and electricity systems, the
best of hospitals, educational institutions, hotels, retail outlets, supermarkets and other lifestyle necessities.
Source: Emirates 24/7
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PROPERTY ON THE FAST TRACK: DUBAI
METRO’S IMPACT ON REAL ESTATE Wednesday, May 31, 2017
What’s the cheapest residential rental property near a Dubai Metro station? While you’ll still be paying a premium,
according to Mario Volpi, chief sales officer at Kensington Exclusive Properties, the best-priced apartments near a
Metro station are in Deira and Bur Dubai.
“In the current market, the cheapest one-bedder rent on the Metro’s green line can be found in Hor Al Anz, which
is close to Al Qiyada station,” he says. “In Al Qusais, one-bedroom apartments are around Dh58,000 per year; in
Abu Hail, Al Jadaf and Naif, which are near the Baniyas Metro Station, a one-bedder costs Dh60,000.”
On the red line, Volpi says there are cheaper options in Karama, where prices for a one-bedroom apartment start
at Dh60,000. “In Jumeirah Lakes Towers [JLT], an equivalent apartment is approximate Dh65,000, while units close
to Deira City Centre station cost on average Dh65,000,” he says.
Property appeal
Sanjeev Krishnan, 58, from India, operates a yoga centre in Karama that is just a five-minute walk from the Metro.
He says the train service provided a big boost to his business, although the rent also increased by 40 per cent in
the last four years.
“My clients now have easy access without getting stuck in the heavy Karama traffic,” says Krishnan, who has
operated his business for the past 14 years. “The Metro has added an extra appeal to the centre.”
Mohaned Sharifh, global property consultant at Gulf Sotheby’s International Realty, says properties close to the
Metro, whether in freehold or leasehold areas, receive a slightly higher demand and therefore offer a higher
return for investors.
“Many people who relocate to Dubai usually start by renting cars and later realise that it is rather costly
considering all the other costs of living in Dubai,” says Sharifh. Transport facilities nearby provide a convenience
factor and savings.”
Value effect
The Roads and Transport Authority’s Strategic Planning Department, in collaboration with the Real Estate
Regulatory Agency, has reported a significant increase on the value of commercial property and land adjacent to
Metro stations, as well as those linked by the feeder buses.
According to Dana Salbak, associate partner of research at Knight Frank, the figures vary wildly from 7-34 per
cent. “Studies have shown that purchasers of property within a ten-minute walk of Metro stations in Dubai are
prepared to pay a premium,” says Salbak. “They hope to benefit both from savings on transport and time spent
commuting. In a city such as Dubai, where an average commute can take up to two hours per day, this can be a
substantial saving.”
Salbak says rents for units located close to Metro stations are 13-26 per cent more expensive. “Because of this,
there has been a surge in interest in purchasing property within these locations,” she says. “The government’s
plan to further extend the Metro by 15km from Nakheel Harbour & Tower Metro station to the World Expo 2020
site has already raised expectations that communities along the route could experience a rise in value.”
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Some of the locations expected to benefit from the extension of the Metro include Discovery Gardens, Jumeirah
Golf Estates, Dubai Investments Park and the site of Expo itself, she says.
“Also, up to four further lines, which will extend the route to 421km, are being considered to provide a
comprehensive transport system covering most of the city and passing near some of the most popular residential
areas in Dubai,” adds Salbak.
According to research intelligence firm ValuStrat, properties within a ten-minute walk of the new Metro stations
could see sales prices increase up to 15 per cent, with a similar increase in rents once the stations become
operational.
Accessibility is a major selling point in these areas, in addition to local facilities and home amenities, says John
Stevens, managing director of Asteco. He cites Dubai International Financial Centre (DIFC), Downtown Dubai,
Dubai Marina, JLT and The Greens are some of the most-sought after locations that have good access to Metro
stations.
“All these developments are situated along the Metro red line, making them convenient residential destinations,
which will have a positive impact on price,” says Stevens. “However, depending on the budget, the tenants and
investors should select the communities they can afford.”
From an affordability perspective, Al Barsha, Bur Dubai and Deira are more appealing, he says. JLT, Business Bay
and The Greens are most attractive to the mid and upper-mid segment.
“Overall, these areas benefit from an attractive offering that includes open areas, landscaping and generally good
levels of facilities and amenities,” says Stevens. “At the high to luxury end, Dubai Marina, Downtown Dubai, DIFC
and Jumeirah Beach Residence all have good Metro or tram links.”
Volpi believes the Metro extension will ensure that housing in more remote areas will not remain vacant for long.
Such areas include Al Furjan, it is currently quite isolated from a public transport point of view.
Challenges
The Metro service undoubtedly has become an added amenity for Dubai residents and extra feature for investors
to make an attractive return on their property investments. However, Salbak warns investors that the disruption
during the construction phase of the Metro expansion can initially cause a negative impact on prices.
“Noise, air pollution and traffic congestion near stations may also negatively influence property prices after
completion – this is particularly relevant to residences or hotels in the immediate vicinity of stations along the
route,” says Salbak. “In addition, buyers in these areas also have to factor in the increased price of property, which
may deter some from purchasing for personal or investment purposes.”
Source: Gulf News
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SHAIKHANI GROUP ANNOUNCES
HANDOVER OF 100 UNITS IN CHAMPIONS
TOWER 1 Monday, May 29, 2017
Abu Dhabi: Dubai-based developer Shaikhani Group on Monday announced the handover of 100 units of
Champions Tower 1 to its customers.
Families are in the process of moving in after getting the necessary No-Objection Certificates (NOC) from the
concerned departments with 48 families moving in till date, the group said in a statement.
The group announced the delivery of 135 units in the Dh150 million Champion Tower I in February this year. The
delivery of these units follows the handover of 224 units last year, raising the number of deliveries to 359
apartments in a year. It currently has five projects that are under construction, including three in Dubai Sports
City and one in Jumeriah Village Circle.
Source: Gulf News
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WORK STARTS ON $111M SIX-TOWER
PROJECT IN DUBAI Tuesday, May 30, 2017
Ground breaking has taken place on the site of a new six tower residential complex in Dubai’s Jumeirah Village
Circle (JVC).
Close to Al Barsha Fourth, the six building project is valued at AED410 million ($111 million), covers an area of
100,000 sq ft and has been designed by Abdul Rahim Architectural Consultants (ARACO).
The buildings will add a total of 772 apartments to JVC, consisting of 75 studio units, 655 one-bedroom
apartments and 42 two bedroom apartments and is expected to be completed within 17 months, the company
said in a statement.
Rahim Lari, ARACO's general manager, said construction on all six sites will begin simultaneously under its
supervision. In addition, ARACO’s scope of work will include architectural design, MEP and structural engineering
and obtaining the necessary licences from all relevant bodies.
“Real estate in Dubai continues to be an attractive investment and our participation in this project underlines our
trust in the emirate’s economy as it continues to provide the highest return on investment of any market in the
region. We are delighted to be a part of this grand project in JVC and seek to carry out our duties within the
agreed terms and conditions,” said Lari.
Conceptualized and owned by HNI Clients Real Estate and represented by investor partner Praveen Sharma, the
buildings will be constructed by Ghantoot Gulf Contracting Company.
Source: Arabian Business
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DUBAI EXPO 2020 SUCCESS DEPENDS ON
WHAT HAPPENS AFTER Thursday, June 01, 2017
On May 1, 2015, Expo Milano 2015, the latest franchise of the Universal Expositions that started in Paris in 1889,
opened its doors. It was a much anticipated but controversial event which experienced work delays, investigations
about bribery and Mafia-related building companies, and overall doubts about the real usefulness of such big
events.
As envisaged by the prime minister of the day, Matteo Renzi, Expo should have been his apotheosis as a political
leader: the worldwide success expected from Expo would have relaunched Italy’s ruined image and struggling
economy. He spent months listing the enormous benefits it would bring to the country: the internationally
renowned Bocconi University estimated an exorbitant €31 billion (Dh127.85bn) turnover from Expo-related
businesses.
No one in the city of Milan saw such a pharaonic outcome: most restaurants and hotels complained about the low
number of visitors. Visitors ate inside the Expo area and slept outside the city in cheaper accommodations rather
than booking rooms in downtown Milan.
The event lasted six months: the first two were a complete flop. Tickets were on sale at €32. Soon after the
inauguration they were being peddled at fire-sale prices via social media such as Groupon, on a 2x1 deal basis. At
the end, in November, Expo totaled some 20 million visitors. Government claimed a big success, but it was not.
The total visitor count included Expo employees, to increase the numbers, and at some point organisers had
introduced a €5 ticket only to have drinks at night. Numbers were doped; long-craved foreign visitors were few.
Now the Expo site is languishing in Milan’s outskirts. The land is valued at €80 million and it was supposed to be
revamped as a university or research centre. But so far no buyers have showed up and nobody has any idea
whether the area will ever be reused. Sadly it might go on to enlarge the already big list of "desert cathedrals"
filling up the Italian landscape. Was Expo Milano a profitable event? As of today, two years later, we still don’t
exactly know. Expo SpA, the company that managed the event, has never made public its balance sheet. It only
announced an income-cost statement in early 2016: Expo has cost Italian taxpayers a skyrocketed bill of €2.2bn,
while it had sluggish revenues of €420m. Some reports said tickets would have to have been sold at €100 to reach
break-even point.
Giuseppe Sala, the Expo chief executive at the time, said it would have published an event balance sheet only
after a forthcoming city mayor election, so not to disturb the campaign. Oddly, Mr Sala himself was a candidate
and eventually elected city mayor. So he never finished the job at Expo.
Unofficial estimates claim that Expo Milan could have lost €32m. Not exactly what you’d call a success story. Other
Expos, though, closed even worse: Sevilla, Spain in 1992, lost the same amount as Milan; Hanover, Germany in
2000, was the worst of the past decade, with €1.1bn in losses reported. Only Shanghai, in 2010, has been a
success: €120m in profit. And that’s because 70 million Chinese, mostly coming from the underdeveloped
mainland, went to visit the show: it was an event for families that usually wouldn’t have the chance to fly abroad
and see places for real.
So here is the juice of the story: Expos in the western world and developed countries are a loss-making activity,
but they have proved to be successful in developing countries or "New Economies" that need to establish
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themselves on the stage and be recognised worldwide. Luckily, that is the case of Dubai, the next city to host Expo
in 2020.
For Dubai, Expo 2020 could be a good card to play. For a city whose economy relies on a tourism and
entertainment economy, that’s a big boost. But administrations should know in advance what to do next with the
Expo area after the event. It is best to avoid the Brazil Syndrome, where Olympic and World Cup facilities are
rusting and completely abandoned.
Source: Gulf News
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FAITHFUL + GOULD TO OVERSEE MIRAL’S
DH12BN YAS BAY PROJECT Tuesday, May 30, 2017
Project management consultancy Faithful + Gould has been appointed to project manage Miral’s Dh12 billion Yas
Bay master development.
Yas Bay, which was announced earlier this month, is a 14-million-square foot site at the southern end of Yas
Island. The master plan for the development includes a new pier and promenade, a 3.2m sq ft Media Zone
operated by twofour 54, new homes, an 18,000-capacity multipurpose Yas Arena and several cafes, parks and
restaurants. Once complete, it is expected that the site will house 10,000 workers and up to 15,000 residents.
Faithful + Gould has been appointed on a four-year contract to work on phase one, which includes the Yas Arena,
a 650-key hotel, cafes, restaurants, retail outlets and a cinema. All of these are expected to open to the public by
2019.
Campbell Gray, the managing director of Faithful+Gould Middle East, said: "Miral has a clear objective for Yas
South to become a globally recognised leisure and entertainment destination, and we are really excited to be a
part of that."
He added that the firm has plenty of experience of managing major projects, including Al Maryah Central in Abu
Dhabi and the new Royal Atlantis and Bulgari Hotel & Residences projects in Dubai.
Faithful + Gould is part of UK-based building consultancy firm Atkins, which is currently the subject of a £2.1bn
(Dh9.9bn) takeover bid from Canadian engineering consultancy SNC Lavalin.
Source: The National
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BLOOM PROPERTIES STARTS
CONSTRUCTION ON SOHO SQUARE
PROJECT AT SAADIYAT ISLAND Sunday, May 28, 2017
Bloom Properties, a unit of Bloom Holding, said that it has started construction on its Soho Square urban
development at Saadiyat Island.
Soho Square is the second mixed use development by Bloom on Saadiyat and will boast residential, retail and
commercial spaces close the New York Abu Dhabi campus.
It will include 302 high-end residences upon completion that will start from the size of studio all the way to
townhouses and penthouses.
"Given the high demand for quality urban housing with high end amenities on the island, Bloom is committed to
the timely delivery of the project that will ensure compliance with best in class construction standards," said
Sameh Muhtadi, chief executive officer of Bloom Holding.
Source: The National
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UAE STOCKS GAIN DHS2.8 BILLION ON
BUYING SPREE Wednesday, May 31, 2017
Sentiments improved at UAE stock markets on Tuesday following a selective buying spree targeting leaders, with
trading companies gaining Dhs2.8 billion in market value, as per statistics issued at the close of today’s session.
Dubai Financial Market General Index held decent gains for the second straight session, increasing by 0.67 per
cent to 3,340 points, with the Abu Dhabi Securities Exchange General Index closing at 4501 points, an increase of
0.20 per cent over yesterday’s session.
The DFM-listed Dubai Islamic Bank increased to Dhs5.81, with Emaar Malls up to Dhs2.56 and Damac to Dhs2.89,
while GFH Group was the best performer, jumping to AED2.27, a growth of 4 per cent over the last traded prices.
At ADX, Abu Dhabi Commercial Bank led the rise trajectory, closing at Dhs7.34, with Etisalat edging toward the
Dhs18 mark at Dhs17.50 In terms of liquidity, a total of 4751 transactions were conducted worth Dhs352 million
over 183 million shares.
Advancing shares outnumbered declining stocks, with 36 companies ending on a high note out of 58, with 8 firms
closing down and14 at their last traded prices.
Dubai’s index rose 0.7 per cent in thin trade as builder Arabtec, the most heavily traded stock, jumped 4.0 per
cent on Tuesday.
Theme park operator DXB Entertainments climbed 2.3 per cent, pulling further away from a two-year low hit on
Sunday. Investors were still reacting positively to news that its chief executive Raed Kajoor al-Nuaimi had been
appointed CEO of a new entity that will manage development projects for Dubai Holding and Meraas Holding. The
company has not yet named a new CEO.
Most Gulf stock markets rose on Tuesday, with petrochemical shares pushing Saudi Arabia up, although Qatar
dropped partly because of a fresh tumble by property firm Ezdan Holding.
Source: Gulf Today
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RAK'S TOURISM SECTOR ON A ROLL Monday, May 29, 2017
Ras Al Khaimah's booming tourism sector is showing no signs of slowing down, and the emirate continues to
draw an increasing number of visitors from emerging markets such as Russia, Poland and India.
CBRE's Q1 2017 RAK MarketView report found that visitors from the UAE, Germany, Russia and the UK remained
the key source markets for the emirate. Experts have highlighted the recent launch of several new offerings as
one of the main reasons behind the successes of the emirate's tourism sector.
"It is an exciting time for the tourism industry of Ras Al Khaimah, with the increased focus on Jebel Jais and active
adventurers over the last 12 months, and with further products to be introduced later this year, the appeal of the
emirate as a year-round destination, offering more than just sun and sand, is attracting increasing visitors and
tourism investors," Haitham Mattar, CEO of the Ras Al Khaimah Tourism Development Authority (RAKTDA), told
Khaleej Times.
Ras Al Khaimah's tourism industry witnessed a tremendous growth of 8.7 per cent between 2014 and 2017,
surpassing that of the UAE, which has grown 5.7 per cent in the same period. Last year represented a strong year
of growth for Ras Al Khaimah, not just in terms of the increased visitor numbers that surpassed 820,000 - an
increase of 10.9 per cent on the year before - but also the emirate's hospitality portfolio. The emirate is emerging
as a major hub for hotel investment with a projected pipeline of 10,200 keys, which puts it in a leading position in
the UAE.
Mat Green, head of research and consulting for the UAE region at CBRE Middle East, also noted that Ras Al
Khaimah's hospitality market has witnessed a solid start to the year, with over 193,000 visitors recording more
than 758,000 guest nights. This is a reflected growth of 8.3 per cent and 18.7 per cent growth in visitor arrivals
and guest nights, respectively, on a year-on-year basis.
Ras Al Khaimah's encouraging tourism trends have also translated into solid hotel occupancy and revenue
performances. According to data from STR, average occupancy rates were up 6.8 per cent year-to-date over the
January-March period from 71.3 per cent to 76.3 per cent, versus the same period last year, whilst revenue per
available room (RevPAR) rose 2.3 per cent during the same period. This was despite a four per cent decline in
average average daily rates (ADR), which continued to fall. Overall room revenues also rose, up 8.1 per cent on the
same period last year.
"This year has begun strong, with year-to-date international arrivals up by 11 per cent compared to the first four
months of last year. The emirate achieved the second highest ADR and RevPAR, and third highest occupancy rates
in GCC, according to latest STR report," Mattar said.
As the emirate draws closer to reaching the its one-million visitor target by the end of 2018, the need for quality
hotel rooms has never been so important, he added. "Currently offering just over 5,000 hotel rooms, Ras Al
Khaimah's increasing hotel and resort portfolio is expected to grow by more than four thousand rooms over the
next three years, across various categories, with a number of opportunities still available for further investment in
Ras Al Khaimah's hospitality landscape. We are working closely with travel and tourism stakeholders to ensure we
attract the right brands and accommodation options to support sustainable growth across the emirate."
Around 500 new hotel and hotel apartment keys are expected to be completed over the remainder of 2017, with
a similar figure to be completed in 2018. This includes the Hilton Garden Inn and the expansion of the Cove
Rotana, which are both due open in 2017, and the CityMax hotel that is expected to be delivered in early 2018.
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Crowngate International also broke ground recently on its Avani Resort on Al Marjan Island, which is at the heart
of Ras Al Khaimah's aspiration to redefine the local hospitality sector.
"As the key tourism destination in Ras Al Khaimah, Al Marjan Island offers the perfect location for our project,
which will firmly position us in an area expected to witness high demand and tremendous tourism growth in the
years to come. Offering a budget-friendly option for discerning travellers, our four-star resort captures a
previously untapped market, and we cannot wait to welcome the first guests in 2019," said Joe McCormack,
founding partner of Crowngate International.
Al Marjan Island accounts for 78 per cent of upcoming hotel room supply in the emirate. Only a short drive away
from hectic city life, it is set to evolve as a favourite destination for staycations and international visitors alike. The
destination is a popular choice among the domestic UAE market, which continues to represent Ras Al Khaimah's
largest source market representing 40 per cent of visitor arrivals year-to-date.
Recently released statistics by Colliers International showed that beach resort guests now contribute more than
80 per cent of visitors to Ras Al Khaimah's. While two thirds of the upcoming hotel inventory represent the five-
star segment, the emirate has been seeing rapidly increasing demand from cost-conscious tourists looking for
premium four-star options at competitive rates.
Source: Khaleej Times
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FLOOD OF BUYERS SNAP UP HONG KONG
FLATS BECAUSE OF THIS REASON Monday, May 29, 2017
Thousands of people flocked to snap up flats in Hong Kong, lured by favourable financing terms offered by the
city's No.2 developer even as authorities fret over sky-high prices that a series of cooling measures has failed to
dampen.
Potential buyers, clutching documents and flanked by agents, queued early for a chance to buy one of the 496
apartments developed by Cheung Kong Property Holdings, which is controlled by Hong Kong's richest man Li Ka-
shing.
The mostly local crowd buzzed around and blocked most of the passageways spreading across two floors in a
glitzy shopping mall, with one property agency fencing off the mall's food court with its blue banners to make
room for their clients.
Cheung Kong Property, which has a market value of $28 billion, enticed buyers with lending terms they found
hard to resist just a week after the central bank introduced its eighth round of mortgage tightening rules for
banks in a bid to cool record-high prices.
The development features flats in the mid-range Tsuen Wan district spanning about 400 to 1,100 sqft (37 to 102
sqm), on sale for $960,000 to $3.6 million. Yet robust demand at the project launch underscores the challenge the
government faces in taming prices in one of the world's most expensive real estate markets.
Skyrocketing property prices have added to growing discontent in the city, with its population already under strain
from high living costs and a widening wealth gap although few buyers expected them to ease any time soon.
"The government has no ability to cool the property market. The earlier you buy a flat, the better," said Hong Kong
resident Ho Sui-kit, a freelancer in his 40s who hoped to help his son pay the downpayment to buy a three-
bedroom apartment. Ho said he would choose a mortgage plan promoted by the developer, where its subsidiary
finance company would lend up to 85 per cent of the apartment's value to the buyer but charge higher interest.
Plans like these, where developers partner with finance companies, mean buyers like Ho could evade restrictions
by the central bank and pay a smaller down payment.
When buyers get loans from banks, which are regulated by the central bank, they can only borrow up to 60 per
cent of the home value or less, depending on the size of their loans and if they already have outstanding
mortgages.
"The government's measures do not have a big impact on us, because for the people buying, a flat is their biggest
wish in life," said executive director at Cheung Kong Property, Justin Chiu.
He added the developer would "actively consider" offering more aggressive mortgage packages if there is
demand for them.
"Most buyers are end-users, so there isn't a bubble. As long as Hong Kong's economy is stable and buyers have
stable jobs, they can pay their mortgages and own their own homes."
Source: Khaleej Times
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INDIA STAYS FASTEST GROWING ECONOMY Monday, May 29, 2017
India remained the fastest growing major economy in the world last quarter, with growth buoyed by an improved
performance in manufacturing and services, a Reuters poll of economists found.
Prime Minister Narendra Modi's ban of high-value currency notes last year had a major short-term impact on
demand but private and public consumption has recovered.
The median forecast from a poll of 35 economists showed the economy grew 7.1 per cent annually in the first
three months of this year. Forecasts ranged from 6.5 to 7.8 per cent.
Annual growth was 7 per cent in the quarter ending December, and 7.9 per cent in the January-March quarter last
year.
"The demonetisation drive barely impacted the economic momentum in the second half of FY'17. Most of the
high-frequency indicators showed only a marginal slowdown and were quick to recover," said Tushar Arora,
senior economist at HDFC Bank.
India's industrial output rose 2.7 per cent in March from a year earlier, beating the median consensus of 1.5 per
cent growth in a Reuters poll.
Factory and services activity expanded for most of the first quarter of 2017, rising to a five-month high in March,
indicating the effects from demonetisation were short lived.
This acceleration in economic growth was partly driven by favourable domestic factors, including a significant
improvement in the transmission of past central bank policy rate reductions into banks' lending rates,
encouraging investment.
In addition, infrastructure spending is expected to support growth, as will higher agricultural output if the
monsoon rains prove favourable.
The economy is also expected to benefit from the introduction of a nationwide goods and sales tax (GST),
elminating multiple state sales taxes, making it far easier to do business in India. The GST is expected to come
into effect from July 1.
"The GST will boost Indian GDP at least by 100-150 basis points. It won't happen right after July 1, but probably by
the end of FY18," said Karan Mehrishi, lead economist at SMERA Ratings Limited.
'GST Solution'
HP India, in collaboration with KPMG, on Monday launched a secure and affordable invoicing platform called "GST
Solution" to help millions of traders and micro, small and medium enterprises (MSMEs) move seamlessly to the
new GST regime.
"GST Solution" has the capability to support users to file all their transactions as per the new tax norms in a
convenient manner and also reduce the invoice reconciliation requirements of large companies.
"HP has participated in every significant milestone of central and state government's digital journey, starting from
printing the first computerised railway ticket to enabling several 'Digital India' initiatives," Sumeer Chandra,
Managing Director, HP Inc. India, told reporters here.
The end-to-end solution has hardware from HP, GST invoicing software by KPMG, Cloud storage for storing
invoice data, uninterrupted GST Suvidha Provider (GSP) access, e-sign, GST registration and migration services.
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It facilitates the entire process from inputting purchase invoices, generating sales invoices, managing the input
credit ledger and generating reverse charges.
The solution also helps businesses receive the tax credit through automatic reconciliation of purchase invoices to
ensure a seamless transition to the new taxation structure.
"KPMG is proud to assist in advancing the adoption of GST and, in fact, to be associated with all of the signature
initiatives of the Indian government," said Arun Kumar, Chairman and CEO, KPMG India.
In addition to empowering MSMEs, the solution can also support large organisations enforce a regime wherein
their vendors, distributors and dealers are on the GST system, complying with the process and filing their GST
returns accurately.
The solution can help indicate loopholes in the ecosystem in the form of a tax credit leak at any nodal point. HP
also announced to enable specialised help desk support having tax experts for GST-related queries and
operational assistance via calls, emails and chats.
Source: Khaleej Times
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NORTHACRE SAYS INVESTORS ARE IN FOR
THE LONG HAUL ON LUXURY LONDON
PROPERTY Tuesday, May 30, 2017
Amid political upheaval in the United Kingdom, the luxury property developer Northacre remains bullish on its
outlook for the year as investors take a long-term approach to the high-end market in London.
After a difficult 2016 dominated by the Brexit vote, triggering a dramatic drop in property prices and the volume
of transactions, 2017 is forecast to be much better for the firm, majority-owned by Abu Dhabi Financial Group
(ADFG).
In the first three months of this year, according to JLL, prime London property prices posted their first quarter-on-
quarter rise since the third quarter of 2014, when oil prices began to fall from their summer peaks of about
US$110 per barrel.
"In general, prices stopped rising in the middle of 2014 after 20 years of continual growth. Despite Brexit, and
stamp duty increases, many international buyers have used this as an opportunity to continue to purchase
property in London. In light of this, we will not be changing our forecasts," said Niccolò Barattieri di San Pietro,
Northacre’s chief executive.
The London developer’s residential project No 1 Palace Street, opposite Buckingham Palace – bought by ADFG for
£310 million (Dh1.46 billion) in 2013 – is scheduled to be completed in 2019, by which time the UK is expected to
have finalised the terms of its exit from the European Union.
While many observers expect markets including Paris, Frankfurt and New York to benefit from the UK’s period of
uncertainty, Mr Barattieri believes London will remain the top draw for property investors.
"We strongly believe that London will continue to hold its dominant and stable position as the No 1 city for
investors. Other European cities will still struggle to compete due to London’s strong investment opportunities
and its unrivalled international connectivity," said Mr Barattieri.
Financial institutions have started to move staff to other financial centres, such as Frankfurt, Dublin and
Luxembourg, in anticipation of Brexit but Mr Barattieri does not expect this to affect the luxury end-user market
in London.
"The type of employees that are moving to other financial industries are not our target market. They don’t
generally buy super high-end apartments, especially within the types of departments that are being moved. As a
result, this hasn’t affected Northacre," he said.
Agent Savills is marketing the 72 units at the 300,000 square feet No 1 Palace Street, which are reportedly being
priced at up to £30m each.
Last year, Northacre reported a 7 per cent rise in revenue to £4.5m but made a pre-tax loss of £1.6m on a drop in
development fee income as a result of the completion of its Vicarage Gate projects. It was also unable to sell its
own £6.55m development at 22 Prince Edwards Mansion.
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Northacre is developing a £1 billion mixed-use project on the site of the former police HQ New Scotland Yard and
plans to begin marketing it this summer, after the June 8 UK election. The political climate could work in its favour,
according to Mr Barattieri.
"The current favourable climate for buyers from US dollar-dominated markets has obviously provided
international buyers with an opportunity to seek investment and our clients are recognising this period of
uncertainty as the ideal moment to show confidence in the UK housing market as a weather-able and dominant
force," he said.
However, overall house prices in London are predicted to fall in real terms across 2017 – marking the first time
this has happened since 2011 – according to an index by Hometrack, the Press Association reported on Friday.
Hometrack’s latest report shows annual house price growth in London is already running at less than a third of
the levels of a year ago.
In April, house prices there were increasing by 3.5 per cent annually – compared with a 13 per cent surge a year
earlier.
London house prices are now rising at their lowest rate in five years, Hometrack said.
Source: The National
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U.S. HOME VALUES NATIONWIDE SURPASS
2007 MARKET PEAK Tuesday, May 30, 2017
According to the April 2017 Zillow Real Estate Market Report, national U.S. home values have surpassed the peak
hit during the housing bubble and are at their highest value in more than a decade. The median home value in
the U.S. is now $198,000, 1 percent higher than peak value hit in 2007.
Home values across the country rose 7.3 percent since last April, the strongest rate of appreciation in more than
10 years. Seattle, Dallas and Tampa reported the greatest home value growth over the past year. Home values in
Seattle rose almost 12 percent, to a median home value of $432,300. Dallas and Tampa home values rose 11
percent year-over-year.
When the housing market crashed a decade ago, home values plummeted and it has taken about 10 years for
median home values to reach prior peaks. However, some markets median home values recovered more quickly
than others. Among the 32 largest U.S. metros, 10 markets saw their median home value exceed prior bubble
peaks more than a year ago, while 17 have yet to regain peak value.
"Now that the typical U.S. home is worth more than ever, people may be tempted to ask if we're in another
national housing bubble," said Zillow Chief Economist Dr. Svenja Gudell. "We aren't in a bubble, and won't be
entering one anytime soon. There are big differences between the market then and the market now: Then, loose
credit, speculation and overbuilding were ingredients in a recipe for disaster. Now, healthy home buyer demand
is being driven largely by a stable economy and demographic tailwinds, which is exactly what we would expect in
a healthy market. Supply has been slow to catch up to this demand, which is causing home values to grow at a
faster clip than we might otherwise expect. Beyond that, the market's fundamentals look largely healthy. Homes
are largely more affordable in most markets today than they were prior to the bust, and will remain so for the
foreseeable future, even if mortgage rates rise. Americans clearly continue to see the value in homeownership,
especially young Americans, which bodes well for the future."
Median rent across the nation rose 0.7 percent since last April, to a median payment of $1,412 per month. Seattle,
Sacramento, Calif. and Los Angeles reporting the greatest year-over-year rent appreciation among the 35 largest
U.S. metros. Rents in Seattle are up 6 percent to a Zillow Rent Index (ZRI) of $2,114. Rents in Sacramento are up
almost 5 percent, while Los Angeles rents are up 4 percent.
One of the greatest hurdles for home shoppers this summer will be low inventory. There are 8 percent fewer
homes on the market than a year ago, with Minneapolis, Columbus, Ohio and Seattle reporting the greatest drop.
There are 27 percent fewer homes on the market than a year ago in Minneapolis and Columbus, and 20 percent
fewer in Seattle.
In April, mortgage rates on Zillow ended at 3.83 percent, the lowest month-ending rate since October 2016.
Mortgage rates in April hit a high of 3.88 percent in the first few weeks of the month, with the month low at 3.74
percent. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to
anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.
Source: World Property Journal
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UK HOUSING LIFTS CONSTRUCTION
GROWTH TO STRONGEST SINCE 2015 Friday, June 02, 2017
London: Britain’s construction industry unexpectedly picked up last month, growing at the fastest pace since 2015
as housing strengthened.
IHS Markit’s monthly index rose to 56 in May from 53.1 in April, a far better reading than the decline to 52.6
forecast by economists. Workloads increased the most this year and the pace of hiring also improved, according
to the report published on Friday.
The report follows a stronger-than-forecast manufacturing survey from Markit this week, which showed solid
factory activity. A gauge of services, the largest part of the economy, will be published on Monday.
In the construction report, there were also signs that cost pressures — largely related to the weaker pound — are
easing, with input prices rising at the slowest pace in seven months. Some companies said that the peak phase of
price hikes for imports had now passed.
The one cloud in the report was Brexit and the outlook for the economy, with firms noting that “heightened
economic uncertainty continued to act as a brake on client spending.”
Source: Gulf News
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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.
John Allen - BSc, MRICS
Director - Valuation & Advisory
+971 4 403 7777
Jenny Weidling - BA (Hons)
Manager – Research and Advisory
+971 4 403 7789
VALUATION & ADVISORY
Our professional Advisory services are conducted by
suitably qualified personnel all of whom have had
extensive Real Estate experience within the Middle
East and internationally.
Our valuations are carried out in accordance with the
Royal Institution of Chartered Surveyors (RICS) and
International Valuation Standards (IVS) and are
undertaken by appropriately qualified Valuers with
extensive local experience.
The Professional Services Asteco conducts throughout
the region include:
• Consultancy and Advisory services
• Market research
• Valuation services
SALES
Asteco has established a large regional property Sales
Division with representatives based in UAE, Saudi
Arabia 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.