NEWS BRIEF 26 - Asteco · 2017. 6. 27. · damac to deliver $1bn muscat port project uae spas...

DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN

© Asteco Property Management, 2017 asteco.com | astecoreports.com IN THE MIDDLE EAST FOR 30 YEARS

ASSET MANAGEMENT SALES LEASING

VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION

RESEARCH DEPARTMENT

NEWS BRIEF 26 TUESDAY, 27 JUNE 2017


© Asteco Property Management, 2017 asteco.com | astecoreports.com

IN THE MIDDLE EAST FOR 30 YEARS

Page 2



REAL ESTATE NEWS

UAE / GCC

ARABTEC AND DRAKE & SCULL MAKE PROGRESS REBUILDING BALANCE SHEETS

COST OF LIVING IN DUBAI AND ABU DHABI RISES BUT REMAINS ATTRACTIVE FOR

EXPATS

GRENFELL TOWER FIRE DISASTER IN LONDON COULD NEVER HAPPEN IN DUBAI,

EXPERTS SAY

ARABTEC AND DRAKE & SCULL MAKE PROGRESS REBUILDING BALANCE SHEETS

MONEY SUPPLY IN UAE CONTINUES TO INCREASE IN MAY — CENTRAL BANK

SAUDI ARABIA’S PUBLIC FINANCES SEEN STABILISING BY 2020

UAE THE WORLD’S 35TH MOST INNOVATIVE COUNTRY

JORDAN DEVELOPER REACHES FOR THE EXTRAORDINARY

EMAAR PROPERTIES APPOINTS NEW CEO

OPPORTUNITIES ABOUND FOR UAE REAL ESTATE SERVICE PROVIDERS

INVESTOR AWARENESS, IMPROVED REGULATORY ENVIRONMENT NECESSARY FOR GCC

REITS TO FLOURISH: SURVEY

EMAAR REAL ESTATE IPO HAS VALUE

ARABTEC GETS GO-AHEAD FOR CAPITAL REDUCTION

DAMAC TO DELIVER $1BN MUSCAT PORT PROJECT

UAE SPAS BECOME A TOURISM STAPLE

INVESTOR AWARENESS, IMPROVED REGULATORY ENVIRONMENT NECESSARY FOR GCC

REITS TO FLOURISH: SURVEY

DUBAI

NEW HOMES ON HORIZON AT ARABIAN RANCHES

DUBAI REALTY TAKES ON A YOUNG AND TRENDY LOOK

THE LITTLE DETAILS HOME OWNERS ARE MISSING OUT ON

WORK STARTS ON DUBAI’S NEW MARINA

DUBAI RENTAL LAW: A TIMELY REFRESH?

LIVING ON THE FRINGES



DEFINING LANDSCAPES SINCE 1985

Page 3



REAL ESTATE NEWS IN PROPERTY MANAGEMENT, YOU HAVE TO SPEND TO SAVE

FIND GREAT HOME RENT DEALS IN DUBAI THIS SUMMER

LIFESTYLE? RETURNS? GATED COMMUNITIES OFFER THEM ALL

DUBAI A SECOND-HOME HUB FOR MULTI-MILLIONAIRES

ZAHRA TOWNHOUSES HIT HOME STRETCH IN TOWN SQUARE

UNIFIED LEASES WILL PROMOTE MARKET TRANSPARENCY

DUBAI TO LAUNCH THE FIRST CROWD ENDOWMENT PARK IN THE WORLD

DEYAAR SELECTS UC FORWARD TO MARKET PROPERTIES IN CHINA

WORK STARTS ON NEW UNIVERSITY 'SUPER CAMPUS' IN DUBAI

DEVELOPER ELLINGTON LAUNCHES THIRD PROJECT IN DUBAI

DUBAI RESIDENTIAL SALES DOMINATED BY OFF-PLAN PURCHASES

ABU DHABI

MUBADALA INVESTMENT COMPANY READY TO BUY REMAINING 50% IN VICEROY

HOTEL GROUP

REEM ISLAND HAS A NEW BEACH AT THE HEAD OF ITS CANAL

ALDAR SAYS MASTER-PLANNED COMMUNITY ON REEM ISLAND WELL ON TRACK

ABU DHABI SAYS TO UPGRADE MIDDLE EAST'S LONGEST TUNNEL

NORTHERN EMIRATES

ABU DHABI PORTS ENTERS DEAL TO DEVELOP FUJAIRAH’S HARBOUR

WORK TO START ON MAJOR SHARJAH RESEARCH PARK IN AUGUST

INTERNATIONAL

US FEDERAL RESERVE RATE RISE TO PUSH CONSTRUCTION COSTS

UK SET TO CAPITALISE ON HALAL LIFESTYLE ECONOMY

‘DANGEROUS SITUATION’ FOR HONG KONG PROPERTY MARKET, SAYS CHAN

TRUMP’S INDIA PARTNER IS GUNG HO ABOUT SALES

SOARING PRICES PUT OFF INDONESIAN HOME BUYERS

UK BUDGET DEFICIT NARROWS, BRINGS BRIEF RESPITE

PAKISTAN TO RESTART SCRUTINY OF INVESTMENT BY BUILDERS




Page 4






Page 5



ARABTEC AND DRAKE & SCULL MAKE

PROGRESS REBUILDING BALANCE SHEETS Wednesday, June 21, 2017

The contracting firms Arabtec and Drake & Scull International (DSI) both announced on Tuesday that they had

made progress in cleaning up their balance sheets. But they remain a risky investment for potential

shareholders, according to analysts.

"Both Arabtec and Drake & Scull are still in the middle of their organisational and capital restructuring," said Nishit

Lakhotia, the head of research at Bahrain-based Securities & Investment Company.

"That will take time. It will at least take another year," he said.

He argued that in both cases minority shareholders have suffered from a dilution of their positions, but the fact

that both firms now have powerful shareholders holding prominent stakes (Aabar Investments in Arabtec, and

Tabarak Investment in Drake & Scull) meant that "their future should be better than what their immediate past

has been in the last couple of years".

"I think its wait and watch on both ends," Mr Lakhotia said.

Allen Sandeep, the director of research at Cairo-based Naeem Holding, said the main challenge that remains for

Drake & Scull will be collecting money owed to it for work done in Saudi Arabia.

"For Arabtec as well, questions still remain over their deconsolidated KSA exposure. For continuing operations,

however, in both cases, the best way forward would be to venture further into areas still having higher barriers to

entry, for example oil and gas."

Sanyalak Manibhandu, the head of research at NBAD Securities, said that the industry still faces liquidity issues,

and in the case of both contractors their push to become regional players has not helped in this regard.

"If you look at the problems with Qatar, even if it is still brief, it shows you the fault lines."

He said the firms were good national contractors, "but if you are talking about regional contractors, the days

where Arabtec or Drake & Scull can safely go across the GCC and make money in all of the markets, I think, is

probably over.

"At the end of the day, each individual country is going to give their own contractor the biggest piece of the pie."

He added that contractors who venture outside of their home markets often find themselves facing long payment

delays.

Arabtec yesterday said it had gained approval for the first part of its recapitalisation – a Dh1.5 billion rights issue

which has increase the size of its share base from 4.6 billion to 6.1 billion. The new shares are due to begin

trading on the Dubai Financial Market today, subject to approval.

The company then plans to reduce the size of its capital base by just over 4.6 billion shares, reducing liabilities to

help extinguish losses.

The firm said it would use the new money raised to help finish projects, support its turnaround plan and pursue

growth opportunities.




Page 6



DSI is planning to cancel 75 per cent of its shares to write off losses of Dh1.71bn. Once this is done, Tabarak

Investment will subscribe to Dh500 million worth of new shares. It is likely to own a majority stake in the

contractor post-investment.

Drake & Scull said yesterday that it had received approval from the Securities & Commodities Authority to begin

final preparations for the share reduction, which is likely to take six to seven weeks to complete. It expects the

investment to be finalised by the end of the third financial quarter.

Source: The National

Back to Index




Page 7



COST OF LIVING IN DUBAI AND ABU DHABI

RISES BUT REMAINS ATTRACTIVE FOR

EXPATS Wednesday, June 21, 2017

Dubai and Abu Dhabi are once again the most expensive cities to live in the Arab world, according to Mercer’s

2017 Cost of Living Survey. Luanda in Angola is the most expensive city for expats in the world, followed by Hong

Kong, Tokyo, Zurich and Singapore. Continuing a trend seen in recent years, both Dubai and Abu Dhabi rose in

the rankings in the 2017 list, with Dubai entering the top 20 in Mercer’s ranking of approximately 200 global cities

for the first time. Here, Nuno Gomes, principal at Mercer Middle East based in Dubai, reveals what is driving the

increase in the cost of living here, and explains why it is only going to keep on rising.

How does this year’s ranking compare to last for the cities in the UAE?

This year Dubai came up one position higher than last year, so not a big change. But it also means that they have

entered the top 20 this year. It is the 20th most expensive city in the world. Abu Dhabi, which went up two spots,

is coming right behind it at number 23. They are quite high. The next one is Riyadh in 57th place. So there is a big

gap between Dubai and Abu Dhabi and all of the others.

What contributed to the rise in the cost of living in Dubai and Abu Dhabi? Because there were no big movements

from a currency fluctuation perspective, which obviously creates an impact in these rankings, this really

represents a high cost of living in Dubai and Abu Dhabi. There has been a more rapid cost increase in the UAE

than in some of the other cities. This is really in line with a lot of data, including inflation, going up towards the

end of last year. The survey covers all elements of spending, not only on daily life in terms of food, transportation

etc, but also other elements such as housing and other goods and services that are consumed on a regular basis.

If you look at all those factors, we have seen a slowdown, or at least not an increase on the housing front, which

really has contributed in the past to accelerate the position in the rankings. But generally speaking, food at home,

food outside of home, other goods and services have become more expensive. It is not a tremendous increase,

we are talking about a climb in one [and two] positions in the rankings.

Do you expect Abu Dhabi and Dubai to become more expensive in the coming years? When you look at these

rankings, it is always a combination of two key factors. One is the cost increases within the countries or cities, the

inflation they go through. And if you look at macroeconomic data, with the Expo 2020 coming and other

expectations, inflation figures are rising. For example, there will be the introduction of VAT. There is some

expectation that some of that will get reflected in consumer spending as well and prices at supermarkets and

other goods and services. So there is an expectation that inflation will [continue to] increase over the next two to

three years. That is only going to propel Dubai and Abu Dhabi further up in the rankings. We don’t know what sort

of currency issues we will face in the near future, but if everything remains as it is, then we could expect that

Dubai and Abu Dhabi continue to rise slightly in the rankings due to higher inflation, especially compared to

European cities, which are at inflation rates of one to two per cent.


Back to Index




Page 8



GRENFELL TOWER FIRE DISASTER IN

LONDON COULD NEVER HAPPEN IN DUBAI,

EXPERTS SAY Monday, June 19, 2017

A tragedy such as the Grenfell Tower fire, which is estimated to have claimed 79 lives in London last week, could

never happen in Dubai, panel manufacturers claim, following the introduction of new rules at the start of the

year.

Images of firefighters attempting to fight the flames and smoke billowing from the apartment block in Kensington

shocked the world on Wednesday.

The fast spreading fire in the 24-storey tower in London has raised concerns in the United Kingdom about the

safety of the kind of aluminium panels used to clad the tower block, and which appear to have helped spread the

fire.

According to press reports this weekend, Omnis Exteriors manufactured the aluminium composite material (ACM)

used in the cladding.

Omnis was asked to supply Reynobond PE cladding, which is £2 (Dh9) cheaper per square metre than the

alternative Reynobond FR, which stands for "fire resistant" to the companies that worked on refurbishing Grenfell

Tower. The panels were then installed by Harley Facades.

Many commentators have drawn parallels with images of the Grenfell Tower fire and a number of recent fires in

towers in the UAE in which aluminium panels were found to have been a contributing factor.

On New Year’s Eve 2015, a fire erupted at The Address Hotel in Downtown Dubai against which the tower’s owner

eventually claimed Dh1.22 billion of damages. Fortunately no lives were lost in the incident. A later investigation

found that the building’s cladding was partly responsible for spreading the fire allowing the fire to spread.

However, panel manufacturers say that after tough new rules were implemented in the UAE at the start of the

year, something like the Grenfell fire could not happen in Dubai.

Last year, Sharjah-based Alubond, the world’s largest maker of ACM panels and the company that supplied the

facade for the Address, scrapped the manufacture of plastic-filled panels in favour of building fire resistant

panels.

"It is heartening to know that in the UAE market all the developers and consultants stopped proposing non-fire

rated composite panels for the upcoming buildings completely," said AM Rao, the group director for Alubond

global operations.

"As such civil defence regulations are very strict and infallible, while binding all parties involved in the construction

with a responsibility to deliver the absolute fire safe systems."

Rival fire resistant panel maker Alucopanel, which is owned by Danube Group, also claimed that a disaster on the

scale of the Grenfell disaster could not happen over here.




Page 9



"An incident like this cannot happen [in Dubai] after the latest UAE Life & Fire Safety Guidelines have been

declared," said Zohaib Rahman, the head of Alucopanel. "There is no room for any developer to use non-fire

resistant panels as they would not be obtain a no objection certificate from Civil Defence. At present Alucopanel

A2 is being installed over 20 Mid-rise & High-rise projects in UAE."

In January new fire safety regulations came into force nationwide.

The amended UAE Fire Safety and Life Protection Code specifies procedures for the installation of cladding and

contains detailed guidelines and responsibilities for consultants, contractors and manufacturers.

For the first time, those who break the rules face prosecution and fines of up to Dh50, 000.

A key new requirement is that builders will have to carry out regular maintenance on cladding panels and replace

them after a certain date.

The Address Hotel fire was only the latest in a long line of cladding related fires to take place in Dubai in recent

years.

In July 2016, a fire gutted the 75-storey Sulafa tower in Dubai Marina, with the flames spreading up quickly at least

15 floors of the building.

In November 2015, a fire engulfed three residential blocks in central Dubai and led to services on a metro line

being suspended, although no one was hurt.

In February 2015, a blaze gutted one of the emirate’s tallest buildings, also in the Dubai Marina area. It destroyed

luxury flats in the Torch tower and prompted authorities to evacuate nearby blocks.

In 2012, a huge blaze gutted the 34-storey Tamweel Tower in Jumeirah Lakes Towers. It was later blamed on a

cigarette end thrown into a bin.

However, other building experts remain sceptical.

"Yes a lot has been done to attempt to improve the type of cladding used in buildings in Dubai in recent years,"

said one expert who asked not to be named. "However, we have seen a number of updates to the UAE fire

regulations over the past few years – usually after major fires take place – and yet we have still seen more fires. In

some cases it has emerged that the type of cladding used in these buildings has not met building standards."


Back to Index




Page 10



ARABTEC AND DRAKE & SCULL MAKE

PROGRESS REBUILDING BALANCE SHEETS Tuesday, June 20, 2017

The contracting firms Arabtec and Drake & Scull International (DSI) both announced on Tuesday that they had

made progress in cleaning up their balance sheets. But they remain a risky investment for potential

shareholders, according to analysts.

"Both Arabtec and Drake & Scull are still in the middle of their organisational and capital restructuring," said Nishit

Lakhotia, the head of research at Bahrain-based Securities & Investment Company.

"That will take time. It will at least take another year," he said.

He argued that in both cases minority shareholders have suffered from a dilution of their positions, but the fact

that both firms now have powerful shareholders holding prominent stakes (Aabar Investments in Arabtec, and

Tabarak Investment in Drake & Scull) meant that "their future should be better than what their immediate past

has been in the last couple of years".

"I think it’s wait and watch on both ends," Mr Lakhotia said.

Allen Sandeep, the director of research at Cairo-based Naeem Holding, said the main challenge that remains for

Drake & Scull will be collecting money owed to it for work done in Saudi Arabia.

"For Arabtec as well, questions still remain over their deconsolidated KSA exposure. For continuing operations,

however, in both cases, the best way forward would be to venture further into areas still having higher barriers to

entry, for example oil and gas."

Sanyalak Manibhandu, the head of research at NBAD Securities, said that the industry still faces liquidity issues,

and in the case of both contractors their push to become regional players has not helped in this regard.

"If you look at the problems with Qatar, even if it is still brief, it shows you the fault lines."

He said the firms were good national contractors, "but if you are talking about regional contractors, the days

where Arabtec or Drake & Scull can safely go across the GCC and make money in all of the markets, I think, is

probably over.

"At the end of the day, each individual country is going to give their own contractor the biggest piece of the pie."

He added that contractors who venture outside of their home markets often find themselves facing long payment

delays.

Arabtec yesterday said it had gained approval for the first part of its recapitalisation – a Dh1.5 billion rights issue

which has increase the size of its share base from 4.6 billion to 6.1 billion. The new shares are due to begin

trading on the Dubai Financial Market today, subject to approval.

The company then plans to reduce the size of its capital base by just over 4.6 billion shares, reducing liabilities to

help extinguish losses.

The firm said it would use the new money raised to help finish projects, support its turnaround plan and pursue

growth opportunities.




Page 11



DSI is planning to cancel 75 per cent of its shares to write off losses of Dh1.71bn. Once this is done, Tabarak

Investment will subscribe to Dh500 million worth of new shares. It is likely to own a majority stake in the

contractor post-investment.

Drake & Scull said yesterday that it had received approval from the Securities & Commodities Authority to begin

final preparations for the share reduction, which is likely to take six to seven weeks to complete. It expects the

investment to be finalised by the end of the third financial quarter.


Back to Index




Page 12



MONEY SUPPLY IN UAE CONTINUES TO

INCREASE IN MAY — CENTRAL BANK Tuesday, June 20, 2017

The UAE Central Bank announced yesterday that money supplies in different measures, including money in

circulation and bank and government deposits, have increased by 0.6 per cent during last month of May

compared to the money supplies in the previous month of April.

The biggest increase came from an increase of 0.9 per cent recorded in Gross bank assets, including bankers’

acceptances, which rose from 2662 billion dirhams at the end of April to 2686 billion at the end of May 2017.

During May 2017, total bank deposits also increased by Dh10.6 billion mainly due to Dh12.7 billion increase in

Resident Deposits, overriding the Dh2.1 billion fall in Non-Resident Deposits.

Source: Gulf News

Back to Index




Page 13



SAUDI ARABIA’S PUBLIC FINANCES SEEN

STABILISING BY 2020 Sunday, June 18, 2017

The launch of the Fiscal Balance 2020 Programme in the second half of 2017, the MSCI EM watch list

announcement in mid-June and a possible Aramco IPO in 2018 are likely to mark the start of a fundamental

transformation of Saudi Arabia’s economy and public finance, according to analysts at Bank of America Merrill

Lynch.

Analysts say that although fiscal targets are unlikely to be met, the programme will help narrow fiscal imbalances

to mid-single digits by 2020.

“Stabilising forex reserves will require oil prices rebounding above $50/bbl and a moderation in capital outflows.

Despite forthcoming support measures, fiscal austerity is likely to keep growth muted,” said Jean-Michel Saliba,

Meana Economist at Bank of America Merrill Lynch.

Analysts expect comprehensive reforms under Fiscal Balance 2020 Programme over the period from the second

half of 2017 through 2020. These reforms are likely to fundamentally transform the economy’s growth model by

removing some sources of competitive advantages in the private sector, altering the social contract, introducing

taxation, as well as instituting a social safety net and selective government support to corporates.

“The authorities’ desire to support the private sector during the adjustment process inevitably brings tensions

with the ambitious fiscal agenda. As such, we expect the government to announce a private sector support

package that is likely to selectively shelter strategic sectors and systemic entities,” said Saliba.

Excluding a potential support package, economists estimate that the fiscal reforms could drag headline real GDP

growth by 1.2 percentage.

Non-strategic corporates and expatriates are likely the main losers of reforms. The cumulative impact on

expatriates of the expatriate dependent fee, gasoline, electricity and water reforms will likely constitute 9.1 per

cent of expatriate income in 2017 and climb to 22.5 per cent in 2020. However, private consumption may hold up

as Saudi nationals constitute about 75 per cent of total consumption.

The cumulative impact on corporates of the worker levies, energy and water reforms will likely climb to 10.9 per

cent of corporate profits in 2020, or 23.8 per cent, if government support be excluded.

Although the ambitious Fiscal Balance 2020 programme targets are unlikely to be met, imbalances are expected

to narrow to mid-single digits. While gross fiscal reform proceeds are estimated at 11.4 per cent of GDP, net fiscal

proceeds are smaller at 3.8 per cent of GDP. As such, higher oil prices are needed to fill the remaining fiscal gap.

A sustained drop in oil prices is a key risk to the reform agenda. Oil prices above $50/bbl are conducive to helping

reforms succeed while oil prices below $40/bbl are likely to endanger macro stability. Energy policy will look to

support oil prices but 2018 market dynamics are more challenging. Near-term, policy priority remains bringing

forward the rebalancing in the oil market and supporting oil prices. Oil price recovery is needed to narrow fiscal

imbalances.

Analysts expect recent geopolitical tensions, following the GCC stand against Qatar may delay the launch of the

next phase of energy pricing reforms beyond July. This is especially so as the liberalisation of residential electricity

prices and increases in gasoline prices would coincide with the peak in domestic consumption.




Page 14



The reversal of the allowance cuts is a setback in terms of perception of irreversibility and sustainability of the

domestic reform program. However, it is unlikely to derail the reform drive as we believe the move was mostly for

domestic consumption.

A major wage bill reform appears unlikely in the near future despite it being mentioned in the National

Transformation Plan (NTP).

The next round of electricity and energy subsidy reforms is only planned to take place after a safety net has been

put in place, so analysts say progress towards this milestone will continue although some slippage in terms of

timeline may be possible. The reversal of the allowance cuts will likely translate into forex outflows. However, it is

not a material fiscal loosening as cuts were probably around 0.2-0.3 per cent of GDP.

Source: Gulf News

Back to Index




Page 15



UAE THE WORLD’S 35TH MOST INNOVATIVE

COUNTRY Sunday, June 18, 2017

The UAE has improved its standing in the 2017 Global Innovation Index, GII, topping all Arab countries and

ranking 35th globally to improve six places from last year’s 41st position cementing its status as one of the world’s

most innovative countries.

The results of the index were officially announced during a press conference held on June 15 at the UN’s offices in

Geneva, Switzerland that was attended by Ambassador Obaid Salem Al Zaabi, the UAE’s Permanent

Representative to the UN and other international organisations in Geneva. It affirmed the UAE’s significant

progress in several areas, the most prominent of which are ‘human capital and research’ as well as ‘creative

outputs’.

This year’s 10th Global Innovation Index measured the innovation-related performance of 127 countries and

economies representing 92.5 per cent of the total world population and the vast proportion of global GDP. It

relied on detailed measures of innovation inputs and outputs, including 81 indicators providing comprehensive

insights on the various areas of innovation, most notably institutions, human capital and research, infrastructure,

market sophistication, business sophistication, knowledge and technology outputs, and creative outputs.

The UAE achieved a six-rank increase in 2017, up from 41 in 2016 to reach 35 globally. Over the past two years,

the UAE has exhibited a consistent performance by repeatedly ranking as number one in the Arab world. This

year, the UAE also experienced the highest surge among the top 40 most innovative countries with its six-rank

increase.

This jump allowed the UAE to achieve the highest percentage increase in GII scores globally, with a 10 per cent

increase in ranking scores.

Sultan Bin Saeed Al Mansouri, Minister of Economy, said that the UAE’s significant progress in the Global

Innovation Index is the latest of the country’s successive achievements in various fields of development and

global performance indices, which he said contributes in enhancing the UAE’s outstanding position as a regional

and global economic destination.

He added that the UAE has managed to maintain its lead among Middle Eastern and African countries in the field

of innovation and has made significant progress in advancing its ranking among the fastest-growing innovation-

driven countries.


Back to Index




Page 16



JORDAN DEVELOPER REACHES FOR THE

EXTRAORDINARY Wednesday, June 21, 2017

Amman, the proud capital of Jordan whose history goes back several thousands of years, has been an attraction

for visitors from all over the world. Now the city is also getting much-deserved attention from property investors

as Amman’s cityscape undergoes a transformation. With the $5-billion (Dh18.36 billion) mega project to create a

new central business district in Amman’s northern-central district of Al Abdali, the city is getting a completely new

downtown business, residential, shopping and entertainment area.

Part of the Abdali project is a luxury branded mixed-use development called Campbell Gray Living, which is

Amman’s first foray into the luxury lifestyle property world. It consists of upscale private residences, serviced

offices, boutiques and restaurants, as well as a Campbell Gray Hotel. Positioned as one of Amman’s new

landmarks, Campbell Gray Living is being developed by Al Seraje Real Estate Development, which is a subsidiary

of Amman-headquartered Audeh Group, a family business formed in 1990 and now a conglomerate of over 30

companies operating in 11 countries across Europe, the Middle East and Africa. PW talks to Saad Issa Audeh, co-

founder and shareholder of Audeh Group, about the significance of the project for Amman and for property

investors looking for a unique buying opportunity with a greatly diversifying impact on their portfolio.

Amman seems to be on the upswing since incentives for buyers and investors were introduced in 2015, and

Jordan’s economic stimulus plan seems to provide a good growth trajectory for the entire country. Has the time

come to invest in Jordan property?

It most certainly has! When I first saw the Abdali development, I could immediately sense its tremendous

ambition and potential and was drawn to the two most unique buildings towering over the vista. We knew

straight away that we wanted to be part of this new story in Amman.

We didn’t have much experience in the sector back then, but, as you said, due to incentives being introduced and

the commendable economic growth taking place in the country, we felt it was the right time. Real estate continues

to be a haven for capital and a secure income return for investors, and so we were confident that we could

deliver. We created a timeless urban design for the residences that aimed at fostering a welcoming and serene

space for the residents themselves, coupled with a solid return for investors.

We also keep in mind that Jordan as an economy is growing and, according to the International Monetary Fund,

annual GDP growth will reach 4 per cent by 2019, up from expected 3.3 per cent this year.

This, of course, will have a positive impact on the housing and rental markets. With world-renowned brands

entering the country, including Campbell Gray Hotels, this adds to Amman being an attractive investment

destination. The overall business atmosphere is very positive and it is the ideal time for any consumer to be part

of this opportunity.

Amman was so far not known for luxury real estate developments. Is your project flipping the switch for the

luxury property segment in Jordan?

Amman has a highly sophisticated, well-educated and well-travelled population, and we felt that by catering to

their needs we could really challenge the real estate market and offer something that was of international

standards. We are very proud to say that we have become Amman’s most luxurious residential offering despite

the challenges we faced initially coming into this sector.




Page 17



GCC nationals have always visited Jordan for tourism and business, and many of them are well informed about

the market in Amman. We’ve had interest from GCC investors who were just waiting for the right project in

Amman to engage. With Campbell Gray Living’s international standards and the security behind the brand name,

that is now achievable.

We focused on bringing modern, five-star luxury to the city, one with an utterly original perspective. I met Gordon

Campbell Gray, the maestro behind Campbell Gray Hotels, in Beirut and one conversation turned into many

more, and our shared passion for the region and Amman is what brought about this project. We have created a

property of international standards, something you normally find in New York or London, in the heart of Amman.

Hence, we have introduced a new level of luxury living and lifestyle to the city.

Can you give a short overview of the Campbell Gray Living project and its unique sales proposition?

Campbell Gray Living Amman is a mixed-use development for the 21st century. Located in the heart of downtown

Amman, it offers 78 one-, two- and three-bedroom designer-branded residences, as well as 24 serviced hotel

apartments, premium office space, serviced offices, dining and boutique retail space. This mixed-use

development will be further complemented by the Campbell Gray Amman Hotel. It will be a destination in itself

and will provide residents, tenants and visitors the opportunity to live a life of luxury in one of the most historic

cities in the world.

What sets us apart is the attention to detail and the quality of materials and finishes used. We collaborated with

world-renowned, Paris-based AS Architecture-Studio, which created a design that is not only unique to Jordan, but

to the entire Middle East region. To raise the bar even further, each individual residence offers classic

contemporary design by multi-award winning, London-based Martin Brudnizki Design Studio. To pay homage to

its locale, the project also acquires all of its artwork from local and regional artists.

The development’s “crowning jewel” can be found on the rooftop of the residential building. Exclusively for the

use of the private residences, it offers a private retreat in the heart of the city with an array of leisure facilities,

including infinity pool, bar, open-air gymnasium, four fire pits with surrounding seating areas, a large communal

hot tub and the most unique part of all — nine individual private cabanas, each with their own hot tub, sun

loungers and seating and dining areas.

In terms of our unique sales proposition, I think the contemporary design, attention to detail and quality of

workmanship at Campbell Gray Living Amman is unsurpassed in Jordan, and this is what sets us apart from other

developers. The project uses only the best materials and products, namely Italian marble, German kitchenware

and appliances, Lebanese hardwood and the latest smart home technology from US electronics company Lutron.

Can you give a timeline for the various phases of Campbell Gray Living and expected completion dates for each?

The residences are expected to be completed by the end of this year and the retail complex by the end of the first

quarter next year. The hotel will be completed by 2019.

How is the project funded?

The project is self-funded.

Who are your target groups of buyers and investors?

Our main buyers have been Jordanian expats and high-net-worth individuals residing in Jordan looking for

premium real estate that they previously might have bought abroad in the GCC, whereas now they can find it in

Amman and be part of the story of the new Amman. Most of them have purchased it for investment, some even

as a first home for newly weds who are looking for a more modern property which isn’t typically available on the

traditional Amman real estate market. The style of the apartments and the added lifestyle benefits give investors

access to the jet-set lifestyle they have grown accustomed to abroad.




Page 18



We have also received a lot of interest from GCC investors, especially from the UAE, who view the project as a

lucrative investment opportunity, as well as others who are looking to have a home away from their place of

residence. We have had investors that bought apartments as soon as they enter the development as they are able

to sense straightaway the special character of the project and understand the emotion put into its development.

Investing in Amman offers GCC investors the opportunity to enter a new and lucrative market that is exciting and

shows a very healthy growth rate and allows them to diversify their assets.

What are the price brackets for residence and office space in Campbell Gray Living? What would be the expected

annual returns for investors?

The prices range from 252,512 Jordanian dinars (Dh1.3 million) to over 1.54 million dinars, and investors can

expect a return on investment of around 5 per cent, which is high for Jordan. We also expect that the capital value

will increase in the coming years following the completion of the Abdali project, as well as the Johns Hopkins

Medicine International-affiliated Clemenceau Medical Centre. As a branded residences project, the apartments

will hold and increase their value better than non-branded residences and offer higher returns.

How are pre-sales going so far overall?

Pre-sales have been very promising and we are selling fast. We are expecting sales to pick up even more during

the summer as many GCC residents, including Jordanian expats, tend to travel to Jordan during this time. Our

buyers have been mainly Jordanians, Jordanian expats, Emiratis and a few from across other GCC countries.

What is the impact of the development on the local economy?

The residences, hotel, offices and boutiques will create around 1,000 job opportunities. We are hoping to attract

more GCC residents to Jordan, which will surely positively impact tourism. Campbell Gray Living Amman also aims

to attract investors who might expand their business to the country.

Source: Gulf News

Back to Index




Page 19



EMAAR PROPERTIES APPOINTS NEW CEO Wednesday, June 21, 2017

Emaar Properties has appointed Amit Jain as its group chief executive officer with immediate effect.

Mr Jain had already been acting chief executive since April last year, when former chief executive Abdullah Lahej

departed the company to become the head of Dubai Holding’s Dubai Properties Group.

Mr Jain has worked at Emaar Properties for 11 years and already held the chief executive’s post for Emaar’s Dubai

operations. He had also previously been the group’s chief operating officer and its chief financial officer.

Earlier this month, the company also announced that it is planning to seek a separate listing for its UAE real estate

development arm. The company has said that it plans to float up to 30 per cent of the business via a listing on the

Dubai Financial Market later this year.

It said that the UAE real estate arm had grown sales to Dh14.4 billion by the end of last year, up from Dh4.2 billion

five years earlier.

Overall sales for Emaar Properties for the first three months of 2017 increased by 15 per cent to Dh4.07bn. Net

profit also climbed 15 per cent to Dh1.38bn.

The company appointed a dedicated chief executive for development in March this year. John Carfi joined the

business from Australian property company Mirvac.


Back to Index




Page 20



OPPORTUNITIES ABOUND FOR UAE REAL

ESTATE SERVICE PROVIDERS Tuesday, June 20, 2017

The role of service providers within the real estate industry has changed dramatically today compared to just a

few years ago.

On the occupier side, providers are assuming responsibilities traditionally held by internal corporate real estate

departments. From managing large leased portfolios to conducting strategic planning, occupancy analysis and

forecasting, to even designing new and innovative workplaces, outsourced service providers have transitioned to

play the role of strategic advisors.

On the ownership side, service providers are being asked not just to manage property and pay bills, but also to

formulate strategic operating plans that will uniquely position assets in the marketplace in order to achieve higher

returns for investors. These increasing responsibilities have shifted the dynamic of the provider industry and

enhanced the benefits of outsourcing.

The facilities management (FM) and property management (PM) market in the GCC is relatively new and still in its

infancy compared to developed regions such as Europe, Asia and North America. Nevertheless, it has been

gaining significant recognition over the past decade, primarily developing on the back of momentous real estate

and infrastructure investments.

The FM industry is in different stages of development across the GCC, with the UAE's being the most advanced

where it has evolved from being a reactive one to one that considers energy efficiency and recognises the need

for planned preventative maintenance.

In fact, during 2000-09, the real estate services market grew most rapidly in the UAE in the GCC. In the UAE alone,

the real estate services sector employed about 821,560 people (18.6 per cent of the total workforce), while the

sector contributed about 13.3 per cent to the gross domestic product in 2015. The country, with a rapidly growing

economy and the highest construction spend in the region, has thus been at the forefront of FM adoption in the

GCC.

The total FM market in the GCC as of 2015 stood at $37.3 billion, of which Saudi Arabia constitutes approximately

54 per cent, followed by the UAE (27 per cent). While the UAE has been the market leader in terms of volume of

business for FM and PM services since long, the segment has started to gain considerable traction in Saudi Arabia

as well. The industry is touted to grow about 20 per cent annually on average, driven by a burgeoning property

market, ahead of Expo 2020 and the Fifa World Cup 2022.

The region's outsourced FM services market ($13 billion) lags behind Western Europe and Asia which has a

market size of $353 billion and $241 billion respectively. Currently, the outsourced FM market in the UAE stands at

$4.6 billion, constituting around 36 per cent of the overall outsourced market in the GCC, far behind countries

such as Japan ($100 billion) with nine per cent global share. Nonetheless, the UAE's FM industry is expected to

grow at 8.5 per cent CAGR between 2016-2021, largely driven by projects such as Abu Dhabi's 'Vision 2030' and

Dubai Urban Development Master Plan 2020.

The UAE real estate services market is characterised by a good mix of both global and regional competitors, many

of whom are backed by private equity players and large real estate developers, which has resulted in competitive




Page 21



pricing. However, the industry still remains underserved considering the rapid real estate and urban

infrastructure development.

The sheer size of expected infrastructure investments in the region is testament to the abundant opportunities

that will be present in the future, and it is only through organised FM and PM that these investments can be

safeguarded and sustained. Currently, the industry is fragmented, and the growing awareness for facilities

services requires consolidation and establishment of trusted supply chain mechanisms that can adapt to new

market trends.

In conclusion, the UAE real estate services industry has huge growth potential augmented by higher infrastructure

spending. Additionally, apart from upcoming new buildings and infrastructure facilities, the concept of planned

preventative maintenance and the maintenance of old buildings and facilities has started to provide opportunities

for the industry.

Though continued optimism regarding the prospects of the industry are slightly tempered by the current market

conditions, the fluctuations are not expected to be strong enough to topple the industry's momentum. The

industry has reasons to be optimistic and expect long-term growth. The industry will continue to face stiffer

competition, however consolidation will ensure stronger and efficient players to dominate the industry.

Source: Khaleej Times

Back to Index




Page 22



INVESTOR AWARENESS, IMPROVED

REGULATORY ENVIRONMENT NECESSARY

FOR GCC REITS TO FLOURISH: SURVEY Wednesday, June 21, 2017

Investor sentiment and lack of understanding, along with a weak regulatory environment, are the biggest

challenges for the growth of REITs (real estate investment trusts) in the Middle East, according to the latest survey

by CFA Society Emirates, which gauged the opinions of the society’s members and charterholders in the UAE.

The survey revealed that the majority of CFA Society Emirates’ members ranked expected returns from a REIT

portfolio higher than cash equivalents and bonds, and said that they intend to invest in REITs.

However, they believe that the returns from REITs would be lower than stocks, private equity and real estate.

Amer Abdul Aziz Khansaheb, CFA, President of CFA Society Emirates, commented on the findings, saying, "Over

the past decade, the GCC has seen a surge of activity in the region’s relatively youthful REIT market. Recent

developments, such as the oversubscription of ENBD REIT and Johor Corp’s Al-Salam REIT, suggest that there is a

rising demand amongst investors for this particular asset class.

He added, "With the UAE’s real estate market having the highest demand in the GCC amongst regional and

international investors, a less volatile asset class, such as REITs, is expected to become more attractive, as

investors seek to reduce portfolio risk given the current macroeconomic environment."

However, the survey shows that it is important for investment professionals to increase investor understanding

about REITs and gain their trust through prudent and ethical investment strategies which put investor interests

first, he said.

The key findings of the survey show that investor understanding of REITs was seen as the biggest challenge for its

growth and development in the region.

Sixty-two per cent of respondents are convinced returns from a REIT portfolio will be lower than stocks, while 82

per cent feel that REITs will deliver lower returns than private equity. Forty-six per cent are of the opinion that real

estate would deliver higher returns than REITs.

A large majority of respondents said that the expected returns from a REIT portfolio would be higher compared to

cash equivalents (83 per cent) and bonds (73 per cent).

Seventy-six per cent of members see institutional investors investing in REITS, compared to 23 per cent who felt

that it would be retail investors.

62 per cent of respondents said that they intend to invest in REITS.

Forty-five per cent of members believe that GCC’s real estate market is mature enough for REITS to flourish, while

43 per cent believe that it is not.

Source: Emirates 24/7

Back to Index




Page 23



NEW HOMES ON HORIZON AT ARABIAN

RANCHES Wednesday, June 21, 2017

A fresh supply of homes at Arabian Ranches, one of Dubai’s older freehold communities, are to be handed over in

2019.

Joining the existing two sub-communities — Casa and Palma — the new inventory will spread across four new

ones — known as Lila, Rasha, Rosa and Yasmin — and feature 601 villas, according to the property consultancy

Cavendish Maxwell.

“The current sales prices in Casa range from Dh3.05 million for a three-bedroom, up to Dh4.5 million for a five-

bedroom,” the firm reports based on its Property Monitor database. “In Palma, sales prices range from Dh3.2

million for a three-bedroom (and) up to Dh4.8 million for a five-bedroom.” (The Property Monitor Index for a

three-bedroom in Arabian Ranches II — which encompasses the new cluster — is Dh983 per square foot.) “These

prices are comparable to neighbouring Arabian Ranches (the original community),” the report adds. “However,

sales prices in the original Arabian Ranches have seen a decrease of 1.2 per cent this year.”

Currently, homes at Arabian Ranches II average Dh175,000 in rentals, while at the original location they average

Dh152,000 (after declining by more than 5 per cent this year, partially due to the amount of comparable new

stock available in the surrounding area with Mudon, Damac Hills and Mira).

According to Property Monitor, the current gross investment yield for Arabian Ranches II is 5.37 per cent. “With

significant new supply entering the market over the next two years, there is expected to be pressure on prices,

this limiting the capital appreciation potential in the area for the short-term,” it adds.

Source: Gulf News

Back to Index




Page 24



DUBAI REALTY TAKES ON A YOUNG AND

TRENDY LOOK Wednesday, June 21, 2017

By focusing on innovation and creativity, Dubai is strengthening its millennial appeal and reinvigorating its

property market.

Gone are the days when you just needed an office. Now businesses are looking for space to operate that will give

them a competitive advantage and, for this, developers will need to adapt to remain competitive. In addition, for

corporates, having the right premises is a way to attract the right talent for future growth.

Dubai’s market recovery in 2012 was largely led by the tourism industry. Following the outbreak of Arab Spring in

early 2011, traditionally popular Middle East destinations like Cairo lost their appeal amid heightened security

concerns. Dubai’s safe haven status, aviation hub, world-class hospitality and retail offerings meant it was well

placed to benefit.

The residential market reached peak performance in 2013 when it was announced Dubai would host Expo 2020,

fuelling speculation on its impact on job growth and tourism. High-profile schemes such as the Mohammed Bin

Rashid City further buoyed confidence, as witnessed by project launches that continue into 2017.

In commercial real estate, there was continued improvement by the Real Estate Regulatory Agency, which will

help improve confidence and therefore investment in the sector. Improving the perception of Dubai’s real estate

market is important for growth beyond Dubai Expo 2020.

Coupled with this emerged a rebranding strategy to shake off Dubai’s negative image following the downturn.

Dubai positioned itself as the front-runner of creativity and innovation, while government funding has

encouraged a favourable environment for artists and entrepreneurs to set up.

Technology’s impact on Dubai’s real estate market and economy extends far beyond the polished concrete floors

and exposed ductwork of offices housing tech firms. With increasing numbers of consumers turning to e-

commerce, more consumer goods can be found in warehouses than in retail stores.

As demand for space increases, warehouses are being built with larger footprints and higher clearance heights

than ever before. And many industrial occupiers are now conducting multiple operations under one roof, such as

store inventory replenishment and online sales fulfilment.

As Dubai hopes to attract tech-savvy individuals through new initiatives, developers have realised the need to

develop real estate that caters to a range of consumer and corporate income levels to remain competitive. A

review of the current market supply of residential product versus upcoming projects reveals that developers are

reducing the size of apartments in order to make them more affordable.

Although there is a range in the quality and pricing of offices, this does not necessarily mean that it meets

occupier requirements.

Specifically designed hubs such as Dubai Media City and Dubai Design District (d3) offer creative spaces as well as

learning opportunities (short term programmes from the University of Arts, London) aimed at attracting a young

and creative generation. In turn, it is hoped this will drive the retail market with the growth of SMEs in the city.

The second phase at d3 will be suitable to foster and harness this talent, as well as organically grown hubs such

as Al Serkal.




Page 25



In early 2016, the Dubai Chamber of Commerce and Industry together with IBM launched the Dubai Digital

Entrepreneurship Hub to support technology start-ups in the emirate. Similar efforts include AstroLabs Dubai, the

only Google tech hub in MENA.

There are expected to be further hubs, as momentum gains pace.

Of course there is The Dubai Expo 2020, which will be a global launch pad for Dubai to shine and show its

achievements. With the focus being an opportunity for the advancement of ideas, a celebration of global

connectivity and a catalyst for change, the effects will be a lasting and tangibly beneficial one.

The site has already been earmarked to host research and academic institutions, an exhibition centre and a

technological cluster all with the aim of providing a springboard for new technologies and industries.

Source: Gulf News

Back to Index




Page 26



THE LITTLE DETAILS HOME OWNERS ARE

MISSING OUT ON Wednesday, June 21, 2017

Home buyers are often lost between the design, façade, location, other facilities and the final price when deciding

on the property to live in. While these are essential levers for decision making, very little attention is given to

maintenance-friendly options and its intrinsic perpetual maintenance costs.

Buyers need to educate themselves on the concept of a role for facilities management in built-up environments,

essential services and their potential hidden costs. Between the developer and the homebuyer, there should be a

detailed review of service charges and its components. Very rarely do home buyers have an insight into the

different components of service charges, and especially facilities maintenance costs. As a homebuyer, we must

delve into the details of the buildings’ ongoing maintenance costs, the components of the charges (including

macro level service level agreements) for common areas services like security, MEP services and waste

management. In routine cases, very limited information is provided on the components of the service charges

and in select cases, where no details are provided, there is no information on facilities maintenance shared with

the homebuyer.

Many developers and owners associations are compromising on the minimum core requirements on SLAs

(service level agreement) such as minimum PPM (planned preventive maintenance) frequencies, compliance

requisites on water treatments, and fire system lifts. Often due to aggressive sales drive by developers, there are

compromises on critical FM costs in relation to the context of the total service charges. It is imperative to

understand the intrinsic full life impact of the cost of services and its service level agreements concerning the

common areas while evaluating service charge components such as municipality charges, common areas utility

(district cooling), and master community charges, as applicable. A prospective homebuyer must look at his long-

term costs of the targeted property as these are often not understood, and can negatively impact property value

and diminish the return on investment. Generally, people get very enamoured by building designs and facades,

but must know that these can be very challenging in terms of maintenance, as well the potential costs for

maintenance. In the buildings of today, state-of-the-art systems are provided (which are great value adds), but

buyers must consider their maintenance costs and what provisions are imposed in their contracts.

For home buyers, it is critical to seek full transparency on the future full life cycle costs and its governance during

the handing over phase, when owners’ management associations take over and thereafter manage the building’s

maintenance process. Very rarely do homeowners understand the impact of long term life cycle costs and its

complications.

While the JOP (jointly owned property) law has put certain provisions in place, in practice to date this has not been

very effective. A lot of education and awareness needs to be done at the pre-sales level on the dos & don’ts. In

reality, a lot is written in a sales agreement regarding the responsibilities of the developer and home buyers, but

little details are provided in context to future maintenance of common areas.

It is therefore imperative that regulators put in extensive terms on life cycle maintenance that are embedded in

the sales deeds related to the obligations and a checklist should be provided to each home owner.

Source: Gulf News

Back to Index




Page 27



WORK STARTS ON DUBAI’S NEW MARINA Wednesday, June 21, 2017

Dubai Properties (DP) has started work on the Marasi Business Bay marina, including water features that will be

among the highlights of the community. The developer said it has started installing the pontoons at the Marasi

Business Bay Promenade.

Phase one of the marina will have 157 berths and is expected to be completed in the third quarter.

The marina, which will eventually have 800 berths in total, will also be home to the region’s “first purpose-built

yachting hub”, according to DP. The Dh1-billion mixed-use Marasi Business Bay development will also feature

water homes with pools and floating restaurants along the Dubai Water Canal, and a 12km promenade.

“This year you will see a lot of changes in the Marasi project,” said Masood Al Awar, chief officer — commercial of

DP, adding that the water homes are on track to be delivered to the marina this year from the manufacturing

facility in Finland.

Marasi Business Bay is divided into three sections: the park, pier and marina. The marina can accommodate boats

of varying sizes with berths ranging from 8m to 35m. The berths will be fitted out with essential facilities for boat

owners, including potable water, power supply, drainage and sewage.

“The new marina at Marasi Business Bay will leverage latest advances in construction and engineering for its on-

schedule completion, offering the city a new active urban lifestyle dimension and waterfront destination,” said

Abdulla Lahej, Group CEO of DP.

Marasi Business Bay is one of the few marinas in the UAE to employ Seaflex technology, an environment-friendly

mooring solution. Seaflex provides secure moorings even under severe weather conditions. Residents here will

also have retail and food and beverage options at Bay Avenue, Bay Avenue Mall and Bay Square.

Source: Gulf News

Back to Index




Page 28



DUBAI RENTAL LAW: A TIMELY REFRESH? Wednesday, June 21, 2017

The Dubai Land Department (DLD) announced a new rental law in the works that will enhance transparency in

real estate leases. Calling the new regulation a smart rental index, the DLD is making the switch from a one-size-

fits-all index to a more specific benchmark for each type of asset class, whether residential, office, retail, health

care or schools. The index will also include sub-categories based on how a property is maintained or built.

“The Dubai Land Department considered new law a necessity for keeping abreast of the continuous development

of Dubai’s rental market, where rental dispute claims have increased in recent years,” says Mohammad Ahmad

Yahya, deputy executive director of the Rental Affairs Sector of the DLD, tells PW. “However, these claims only

make up 2 per cent of total registered rental contracts. We are working on a smart rental index that will focus on

a number of aspects and include different characteristics and specifications of the rented property in Dubai. The

new law is currently under discussion with the relevant authorities for final approval. It will further regulate the

rental relationship between landlords and tenants and guarantee their rights, ultimately reinforcing the stability

of Dubai’s real estate sector and attracting investments.”

Current regulation

Law No. 26 of 2007, as amended by Law No. 33 of 2008, regulates the relationship between landlords and tenants

of all types of real estate in Dubai. The rental dispute settlement centre (RDC) was established in 2013 as a judicial

arm of the DLD to resolve rental disputes.

The RDC and the introduction of a rental cap and rental index has been quite revolutionary in the existing

relationship between a tenant and a landlord, says Philip Sequeira, head of property regulatory at Hadef and

Partners. “Dubai is a unique market with a high proportion of renters when compared to owner-occupiers, and

historically there have been shortages in supply,” says Sequeira. “Therefore, there was a requirement to regulate

landlords and provide more protection for tenants. The landlord-tenant [LT] Law and RDC have achieved these

goals.”

Sequeira says the present law covers all leases in Dubai, except specific free zones. However, there still exists

confusion on several issues such as the rental index, application of certain provisions vis-à-vis commercial leases,

malls, schools, industrial facilities and so on. Therefore, the authorities have moved to clarify the treatment of

different types of leases, which will eliminate the ambiguity that currently exists in several provisions in the law,

says Sequeira. He also believes it would also be good to see more regulation applied in respect of security

deposits, while establishing a central authority that could hold and regulate these.

The rental market benefits from the index, which is updated yearly using information from the Ejari registration,

as it allows both tenants and landlords to determine the correct rental value of a property, while preventing

excessive increases, says Laura Anderson, leasing manager at Exclusive Links Real Estate.

Anderson says that the unified lease contract recently introduced has also helped enhance transparency in the

market as agents and landlord will have to use same contract. She says the contract format could still be improve

further by creating unified template for any addendum on the contract.

Limitations

The tenants and landlords use the rental index to understand the leases applicable in an area as well as the

amount by which current rent can be increased. Sequeira says even the RDC relies on the rental index when

determining disputes on rents between landlords and tenants. However, it has some limitations.




Page 29



“The index does not differentiate between types of properties in the same class i.e. residential inside gated

communities or with specialist facilities, and there is a lack of clarity on its application to certain shopping malls or

commercial areas,” says Sequeira. “There is also confusion when applying the rental index on old and new

properties. Although the index covers, residential, commercial, retail, industrial and staff accommodation, there

still seems to be a problem when it comes to specific areas and zones.

“Moreover, not all shopping centres or malls are covered by the index. Therefore, tenants who have leases in

malls or shopping centres not covered by the index have to rely on or abide by the terms and conditions of their

leases and may be are at a disadvantage when dealing with a one-sided contract favouring the landlord.”

Similarly, schools and hospitals are not covered by the index. ‘Therefore, the commercial terms agreed between

the landlord and tenant apply, which sometimes could be disadvantageous to the tenant,” says Sequeira.

He says the present index has its flaws when referring to it to determine potential rent increases. “It could be

good or bad, depending on which side of the fence you are sitting on,” says Sequeira. “For instance, an old

dilapidated building of 30 years falls in the same rental index as that which is just a year old. It is also possible that

the old building might not have the same facilities like that of a new building and also may or may not be in a

gated community with extra commercial facilities, yet the same index will apply.

“It is, therefore, imperative that the rental index should undergo some refinement to assist the index’s suitability

to a wider variety of properties.”

Input method

Mario Volpi, chief sales officer of Kensington Exclusive Properties, points out that the present rental index has

four sections: residential, commercial, industrial and staff accommodation. “For residential, it will require you to

fill in information about the type of property i.e. villa or apartment and the number of bedrooms,” says Volpi. “For

the commercial section, it asks only the type of property i.e. office, retail, warehouse, etc. and the size in square

foot. Both also request information on the location and the current rent.”

Once all information is inputted, the index will advise if an increase in rent is due or not.

“Given that there is limited information required to input within the present structure, it, therefore, gives only an

average answer. When more points of information are added such as facilities, quality, age, shell and core, etc., a

more accurate figure will be given, so both tenants and landlords will benefit from this fairer system,” says Volpi.

Any change that will improve the property sector is welcomed, but Volpi says there must be public awareness

about the new policy. Agencies, landlords, sellers, tenants and buyers, in particular, must be made aware of the

changes.

“Recent changes in regulation to help clean up the market are being adhered to by agents, but the public is very

slow to accept changes or procedures,” says Volpi. “This is either down to a lack of understanding or perhaps an

unwillingness to do things differently to what they are used to do.”

New benchmark

Suraj Rajshekar, general manager of Rocky Real Estate, however, believes that the public is now better informed

with any new regulations. “We are in a better rental market than we were three to five years ago,” he says. “The

tenants are very well aware of the index so the landlords cannot exploit them. The DLD is taking several proactive

steps to streamline processes in every aspect of real estate. They are even taking inputs from the market to

collectively come out with ideas to improve the property market. This has raised the confidence of all the

stakeholders in the market.”

Rajshekar believes that classifying properties based on quality, facilities, maintenance, amenities, etc., will help set

a benchmark for the market to build better-quality projects and to provide quality maintenance.




Page 30



“We are seeing buildings already being marked in the older areas of Dubai such as Karama,” says Rajshekar. “With

the smart marking, it will become easy for authorities to classify them in the index, wherein well-maintained

buildings with good facilities will get good rents.”

Source: Gulf News

Back to Index




Page 31



LIVING ON THE FRINGES Wednesday, June 21, 2017

Dubai’s new communities developing along its outskirts, combining the best of work, life and play, are suddenly

abuzz with activity. As the city grows, developing its road networks and transport systems, more and more people

are preferring to move away from the busy areas of Downtown Dubai or Dubai Marina to the peace and quiet of

the city’s outskirts, as well as to enjoy a good amount of privacy.

Developers have also capitalised on road expansions, whereby we can journey from our homes to our workplace

within a relatively short time. This has changed the landscape of the real estate rental and buying markets.

Brokers now find themselves journeying around the outskirts of Dubai showcasing a variety of options available

to the discerning lessee or homeowner.

With areas like Jumeirah Village Triangle and Jumeirah Village Circle (JVC) enjoying completed roads, malls and

schools, alongside walkways and parks, these properties further afield are now becoming popular and preferable.

New developments such as Dubai South and even Nshama’s Town Square that lie further along the fringes of

Dubai is testament to the government’s desire to create the perfect living environment for its workforce, as well

as show a commitment to commuters.

Consider this comparison: the cheapest two-bedroom apartment in Downtown will cost Dh105, 000 annually to

rent or Dh1.5 million to buy, offering 1,450 sq ft. In JVC the cheapest two-bedroom apartment will cost Dh70, 000

to rent and Dh735, 000 to buy, offering 1,100 sq ft. Although smaller in size, units in JVC come with community

services and a great lifestyle. Combine this with amenity and lower utility bills based on size, these fringe

communities are proving very popular.

Also, for most of us, schools play a big role in deciding where we live. With nine new schools in the Al Basha area,

families living in communities such as Mudon, Sustainable City, Town Square and Ranches now have better

choices as a result of the extensive road networks that was not available to them a few years back.

The market now gives a new tenant multiple options and as a result tenants are now in a better position to

negotiate with the landlords on the price and number of cheques. New incentives and deals have also opened the

market for occupants and homeowners alike.

Source: Gulf News

Back to Index




Page 32



IN PROPERTY MANAGEMENT, YOU HAVE TO

SPEND TO SAVE Wednesday, June 21, 2017

Facilities management (FM) is the maintenance of a building, its facilities and its equipment, with a view to

extending the life of the assets. It also encompasses the day-to-day operations of running a building and keeping

it in good working condition for its residents. And for these services, there is an associated cost, levied as a key

component of service charges.

Common perceptions

FM has often been cast as the black sheep of the real estate industry, with end users and even owners largely

perceiving it as an unnecessary cost and burden. End users and owners often dispute the expense that FM

entails, and there is widespread discontent regarding the efficacy and cost balance of these services.

This resistance is typically born of a lack of awareness about FM, its benefits and the problems caused by an

absence of FM and a short-term view typically of owners who do not live in their properties and are thus not

motivated to invest in extending the property’s life.

Expenses vs savings

Good FM actually enables definite cost savings for owners and end users, adding years and value to the property

life cycle. End users and owners often do not see the value of their investment in the service fee to maintain their

property.

And this is where it becomes critical to engage users and educate them on how the absence of FM can

significantly shorten the life of a building and severely impact the quality of life of its residents. It is also important

to point out a well-executed FM can actually result in cost savings.

A good FM model

Good FM integrates people with the place, processes and technology, and only through this combination is it able

to deliver both direct and indirect benefits to end users. Here are some qualities of a good FM mode.

*Uses technology to drive the maintenance processes, making them more efficient and intuitive, thus creating

savings. For example, a good FM system identifies problems before they occur, schedules preventive

maintenance automatically, avoids capex expenses for replacement of equipment and other tasks.

*Is comprehensive in its scope of including all facilities and assets as part of its property and building

management.

*Deals with a single contact and avoids inefficiencies and costs associated in dealing with multiple vendors.

*Optimises use of energy, water and other resources in common areas, e.g. energy-efficient lighting or use of

drought-resistant plants in landscaping.

Good FM does not exist in isolation of the people and residents it serves. Beyond the tangible savings it offers,

good facilities management focuses on the resident and user experience, as they are its key beneficiaries.

Direct, indirect savings

The direct impact of a well-executed FM include:




Page 33



* Prolongs life of an asset/building/property.

* Eliminates or reduces instances of break and fix.

* Reduces inefficiencies and wastage of energy and water.

The indirect benefits of a good FM include:

* Reduces business risk caused by power or elevator downtime.

* Positive productivity, health and experience of residents, employees or visitors in terms of the quality of air,

temperature control, hygiene and safety.

The way forward

So where in the future can the industry look to deliver greater savings to clients? Experts suggest two key areas:

FM getting more involved with projects at the design stage and in energy management.

While the mad rush to build, and buy, iconic skyscrapers and real estate continues in Dubai, little do property

owners and end users know how the shape and construction of a building ultimately impacts its energy

consumption and FM requirements. Jamal Lootah, president of the Middle East Facility Management Association

(Mefma) and CEO Imdaad, says FM needs to get entrenched even deeper into the building life cycle, getting

involved at the design and planning stage to effectively reduce FM costs post construction.

“We have to be there from day one in the design stage, giving advice to not build a building in that shape, which

will make it difficult for you to maintain it later, or we can advise which system can fit in your building,” says

Lootah.

Energy is another big space that can enable significant savings, whether by energy inefficiency, which tends to be

system led, or reducing energy waste, which tends to be user led. Lighting is a natural starting point for FMs since

lighting adds approximately 35 per cent across a building’s energy spend, and it can yield a significant payback.

The need of the hour is to educate end users and owners why it is prudent to spend now to realise savings later.

Source: Gulf News

Back to Index




Page 34



FIND GREAT HOME RENT DEALS IN DUBAI

THIS SUMMER Wednesday, June 21, 2017

Anecdotal information is that summer can often be a great time for prospective tenants to house-hunt in Dubai,

striking a good deal on rental listings that have been sitting empty for a while — the lettings market is generally

quieter over the hottest months, with many residents going abroad on school holidays and peak temperatures

making property viewings a challenge.

This is likely to continue to be the case this summer. Additionally, shrewd tenants looking to secure a lower price

may now benefit further in areas of the city experiencing increased levels of new supply.

Data shows a general softening of residential rents across most of Dubai. Leasing rates are now broadly back to

where they were in the first quarters of 2013, erasing any gains from the last few years. This is a result of a slower

secondary market and global economic headwinds over much of this period.

Nonetheless, Dubai continued to have strong off-plan sales activity for much of this decade. Purchasers are

attracted by quality landmark developments with high-end specifications and attractive payment plans. Much of

this new build stock was purchased by investors who are now listing their recently completed properties in a

more crowded rental market. Some owners can well afford to hold on to get the rent they want. Others,

particularly those with monthly mortgage repayments, will want to avoid empty periods with no rental income

and will possibly be motivated to secure a tenant at lower rates.

Absorption rate

The capacity of a location to find tenants for newly handed over property is termed the “absorption rate” i.e. how

long it will take for new-build property to be let. The absorption rate in prime residential areas such as Downtown

Dubai, Dubai Marina and Palm Jumeirah is expected to remain broadly resilient. However, some newer areas will

possibly find it more difficult, especially where hundreds of villas or multiple apartment towers are all being

handed over at about the same time.

ValuStrat’s analysis of some of Dubai’s suburban locations that are experiencing increased supplies of newly

completed property reveals that Liwan district, estimated to have 1,430 new units delivered this year, has

experienced a 16 per cent decline in rental values for two-bedroom properties over the last 12 months.

International City, with a predicted 2,031 new properties expected this year, has seen a drop of 13 per cent in

lease prices for two-bedroom units since last year. Master-planned communities such as Dubai Silicon Oasis and

Dubai Sports City, with 4,341 and 1,907 units in the pipeline this year respectively, have both witnessed rental

price declines of up to 12 per cent on some unit types year-on-year.

This suggests a strong correlation between increased rental stock supply and resultant lease rates.

Competition among landlords is good news for prospective tenants, not only by way of lower rents, but also

additional sweeteners such as multiple cheque payments, rent-free periods and assistance with landscaping and

decorating costs.

Supply-based pressure

According to ValuStrat research, this year’s pipeline is estimated at 25,000 units, while another 42,000 are slated

for delivery next year. In light of this, supply-based pressures are likely to remain for the next year or two on




Page 35



some sectors of the rental market. It is noteworthy that 16,000 properties are expected next year in Dubailand

alone, to include mostly mid-market locations such as Living Legends, Akoya and Town Square. In the medium

term, we anticipate that the equilibrium may better balance out. As the city grows, with an increased population

and economic activity, helping to absorb new housing deliveries and better match demand with supply.

In conclusion, we suggest that prospective tenants looking to make a move in summer to consider areas of

increased new supply. The next few months may prove to be a favourable time to negotiate a lease on a new

home, especially those seeking two- or three-bedroom property in areas such as Dubailand, Al Qudra Road or

some of the newer western districts of the city.

Source: Gulf News

Back to Index




Page 36



LIFESTYLE? RETURNS? GATED

COMMUNITIES OFFER THEM ALL Tuesday, June 20, 2017

Gated communities are favoured both by end-users and investors mainly because of safety, amenities, lifestyle,

status, restricted access and resultant privacy, recreational clubhouses and community awareness.

"A tenant who does not wish to compromise on values important to family life such as safety, security and quality

lifestyle living is prepared to pay a premium rental in return for peace of mind that gated community living brings.

An owner/investor enjoys the pride of ownership and status recognition associated with holding a unit in a

particular gated community while confident that the well-managed asset will increase in property value upon re-

sale," says Cheryl McAdam, head of residential valuations at ValuStrat.

Gated communities on a global level trade at a premium, which can be witnessed in countries such as the United

States, England and South Africa. The premium can range from 12 per cent to 30 per cent in international

markets, says the GCP report.

"A closer look in the city of Los Angeles, for instance, reveals that gated communities have superior capital gains

relative to its non-gated counterparts. In Dubai, there is a 30 per cent premium for rentals [listed prices] in gated

communities," explains Hussain Alladin, head of research, GCP Group.

A rental comparison between contiguous communities in Dubai that are gated and non-gated reveals that the

former trades at a premium. The premium is at the upper end of what has been observed globally.

According to ValuStrat, since 2013, villas in a gated community were eight per cent more expensive to rent than in

non-gated developments. Also, there were nine times more transactions for gated villas when compared to

overall villa transactions since 2010.

"Evidence indicates that there is a bigger pool of buyers/investors for freehold gated units than non-freehold

developments bearing in mind the restrictions on ownership/disposal," observes McAdam.

Developers are also catering to this demand among end-users and investors for gated communities. In the Dubai

villa housing stock, 37 per cent of units are in gated freehold communities. A dissection of freehold areas further

reveals that 86 per cent of villa communities are gated. The non-gated communities are predominately in

leasehold areas such as Jumeirah, Al Wasl and Al Sufouh.

Some of the prominent up-and-coming freehold gated communities are Town Square by Nshama, clusters within

Mohammed bin Rashid City, Sobha Hartland and projects in Dubai South.

Among the existing gated communities, ValuStrat says high-volume inspections and transactions are coming

through in The Springs, Arabian Ranches, The Meadows and the Palm Jumeirah.

Freehold ownership is ranked as the most desirable form of ownership as it is not burdened with many

restrictions and therefore has a bigger pool of buyers.

"One of the principal reasons why premia is greater for the freehold space is due to the wider investor base.

Given the fact that the freehold base is expected to increase further, the premia being observed for master-

planned and gated communities will partly be a result of the wider investor base that the freehold status

accords," Alladin points out.




Page 37



Property owners in a freehold gated community also have the reassurance that a homeowners association will be

appointed to control the maintenance of the grounds (common areas), amenities (swimming pool, gym, and

tennis courts), security staff and overall appearance of the community, retaining status and desirability.

"An investor is more likely to maintain security of tenure longer as the tenant is content with the added

advantages of a gated community, and is less likely to re-locate. The landlord experiences less vacant units and

resultant loss of rental income. There is another profile of investor who is more lured by higher rent returns and

prepared to take a higher risk in investing in properties outside of a gated community which are not burdened

with homeowner levies and common area maintenance," adds McAdam.

ValuStrat has also noticed a large number of valuation requests for re-valuations of refurbished homes in gated

communities. "Homeowners are confident that the capital outlay to refurbish or extend homes in these precincts

translates into higher property values and a higher potential rental income should they elect to rent out at some

point," McAdam points out.


Back to Index




Page 38



DUBAI A SECOND-HOME HUB FOR MULTI-

MILLIONAIRES Sunday, June 18, 2017

Dubai ranks among the top five second home hotspots for the world's multi-millionaires, according to New World

Wealth, a wealth research firm.

The number of multi-millionaires in Dubai stood at 8,600 last year compared to 8,400 in 2015. The city has 2,400

resident millionaires and hosts 11,000 multi-millionaires during peak months.

The consultancy defines a multi-millionaire as having a wealth of $10 million or more.

Notably, Dubai ranks higher than more established cities such as Miami, Paris, Zurich, Los Angeles, Rio and

Sydney. Abu Dhabi is estimated to have over 500 second homes.

London tops the list with 19,500 multi-millionaires with second homes in the city (as of December 2016). Second

on the list is New York with 18,400 multi-millionaires, followed by Hong Kong (15,000) and Singapore (11,700).

High net worth individuals mostly buy second homes in areas such as the Palm Jumeirah, Emirates Hills and

Downtown Dubai. "Other new projects such as Jumeirah Hills and waterside villas on the Dubai Water Canal are

also attracting attention along with one-of-a-kind apartments such as penthouses, etc," says Mario Volpi, chief

sales officer, Kensington Exclusive Properties.

Second homes bought by the uber wealthy are usually held for when the family needs it and are rarely let out.

"The majority of such buyers keep their property for themselves, their family members and friends to stay in as a

holiday home. Tenanted properties often require a lot of upkeep, which is why the owners opt to leave them

vacant. Besides this, the investment returns on luxury homes aren't attractive enough. In most cases, these

buyers have a maid who takes care of the property while the owners are away and opens the door to family

members and friends who are in town. We very rarely see such properties rented out by a foreign end-user,"

observes Daniel Garofoli, luxury sales specialist at Luxhabitat.

Although buyers of all nationalities purchase second homes in Dubai, agents cite Saudi nationals in particular as

well as individuals from the wider GCC.

"The majority of HNW clients are from within the GCC, India, Pakistan, the UK and European wealth centres.

However, there are many more nationalities at that level securing second homes in Dubai," explains Maria Morris,

partner - Knight Frank Middle East.

Many Russian/former Soviet Union nationals and those coming from Western Europe such as the UK, Italy,

Monaco and France also go for second homes in Dubai, adds Volpi.

The price range for a second home purchased by UHNWIs is usually in the range of Dh10 million to Dh15 million.

They opt for beach homes as well as pied-à-terres, depending on their existing property portfolio.

"If they own a beach home in south of France, they might want to enjoy the city life in Downtown Dubai or Dubai

Marina. If they have their apartment in the middle of Moscow, they might go for a villa on the Palm or an

apartment/penthouse with private beach," says Luxhabitat's Garofoli.

Meanwhile, Knight Frank's Morris says the agency is seeing a shift in demand from very large villas to well-

designed, high specification apartments for second home purchases.




Page 39



Multi-millionaires demand privacy, high security amenities, quality and easy access to the city from their second

homes.

"Upgraded apartments and villas are achieving a higher price than original shell and core products from

developers. If a property has a state-of-the-art kitchen, upgraded bathrooms and come fully furnished with

branded high quality furniture, that's the most sought-after property for such a high net worth buyer. They prefer

to move in to the property with just their luggage," says Garofoli.

"Other than financial objectives such as long-term capital appreciation, the HNWI tends to look for high-quality

offerings that align with their global portfolios in other key international cities such as London, New York, Hong

Kong, etc," adds Morris.

Multi-millionaires also typically go for properties which are out of reach to others either by the uniqueness of the

property itself or the price tag.

"They are attracted to developments where there are limited units or one-off properties within an apartment

block such as exclusive penthouses," says Volpi.

Brokerages see an increase in enquiries and viewings from HNW clients from September to March. "We mostly

get enquiries way ahead of the arrival of the purchaser, often from their assistant or family members," concludes

Garofoli.


Back to Index




Page 40



ZAHRA TOWNHOUSES HIT HOME STRETCH

IN TOWN SQUARE Sunday, June 18, 2017

The first residential community in Town Square, a 31 million sq ft development, is fast taking shape, with the

Zahra townhouses readying to welcome homeowners later this year.

In addition to finishing touches being done on the townhouses, the supporting infrastructure for a full-fledged

residential community is being completed. While the network of roads has been completed, swimming pools and

landscaping are progressing.

Fred Durie, CEO of Nshama, the developer of Town Square, said: "We are progressing as per schedule to hand

over the first homes in Town Square soon."

The progress of Town Square and Zahra Townhouses is regularly updated by Nshama on its social media

channels to give investors and potential customers details on the progress achieved. Zahra Townhouses, 320 of

them, is the first residential phase in Town Square with a choice of three and four-bedroom homes.


Back to Index




Page 41



UNIFIED LEASES WILL PROMOTE MARKET

TRANSPARENCY Tuesday, June 20, 2017

The Dubai Land Department (DLD) is taking all possible measures to ensure that the procedures for registering

property leases in the emirate of Dubai are easy and of the highest standards. To achieve this, the DLD

coordinates with other government departments to integrate government services as part of the Dubai

Government's transformation to smart services.

The DLD announced the launch of the unified lease in March 2017 with the aim of establishing greater

transparency and credibility in the real estate market. The adoption of the unified lease agreement is in line with

the DLD's to establish transparency and clarity for the benefit of all parties in the real estate market.

Dubai has been able to assume its position as a world-leading real estate destination as it provides a safe haven

for investment, living and business; the unified lease will contribute to consolidating the emirate's positive image.

Completion of legal system

The unified lease agreement was implemented to contribute to the completion of the legal system and the

consolidation of the rights and duties of contracting parties. Through its various departments, the rental sector is

responsible for the implementation of the new unified lease agreement alongside other activities. The move is

aligned with the DLD's vision of limiting personal actions that may harm the market. The relevant committees in

the department monitor all variables in the real estate market, and review them to comply with the new laws and

regulations.

Legal reference

Law (2) 2003 is one of the references on which the unified lease agreement was based. The lease agreement was

also based on Law (33) 2008 regulating the relationship between landlords and tenants in Dubai, specifically

Article 25 that outlines scenarios in which the landlord can request the eviction of the property (including the

sublease), allow others to use the property and use the property for purposes other than stated in the licence.

In accordance with Law (26) for the year 2007, specifically Article (16), during the term of the lease, the landlord

shall be responsible for the maintenance of the property and for the repair of any malfunction that affects the

tenant's satisfaction of the intended benefit, unless otherwise agreed.

The law obliges the landlord to bear this responsibility in all cases, but does allow for the liability to be transferred

to the tenant if there is a consensual agreement. This prevents the establishment of a binding clause and ensures

tenants and landlords are in agreement.

Easy operation

Landlords can download the contract and print it directly from the official 'Ejari' website (www.ejari.ae). Although

there are many clauses in the contract, the relationship between the parties is governed by specific laws including

the Tenancy Act, which defines and regulates the imposition of penal obligations to be applied in case of any

issue.

It is the responsibility of the parties to the contract to agree on items that meet their requirements and needs

when signing the unified lease for the first time.




Page 42



Government coordination

The DLD has coordinated with many government agencies that require customers to provide lease contracts

registered with the DLD in the 'Ejari' system in order to complete their transactions. The goal of the DLD's

collaboration with these departments is to contribute to the integration of government services.

Customers are able to complete the majority of their dealings with these departments as soon as the lease is

registered through the 'Ejari' system. A good example is the partnership between the DLD and the Dubai

Electricity and Water Authority (Dewa). One of the benefits of this relationship is that it allows customers to access

the authority's services once the lease is registered, without the need to review it and resubmit the application

and documents.

The 'Ejari' smart system is one of the channels for registering leases and facilitates registration and other services.

The authorised user can register their lease at any time and from any location, view data, status of lease and

status of the real estate within their jurisdiction, and also follow up on rental indicators, maintenance reports and

more.


Back to Index




Page 43



DUBAI TO LAUNCH THE FIRST CROWD

ENDOWMENT PARK IN THE WORLD Tuesday, June 20, 2017

In line with the directives of His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, to declare

2017 as the Year of Giving, Dubai Municipality and Mohammed Bin Rashid Global Centre for Endowment

Consultancy (MBRGCEC) have announced the revival of the over 125-years’ age-old custom of the endowment of

palm trees by establishing the Endowment Park, a first collective endowment park & dates factory in the world.

The project is located next to Mushrif Park, Dubai and will be spread over an area of 15 hectares.

The new park combines the business model of crowdsourcing (a concept that has been successfully used in many

economic projects) with the concept of innovative endowment adopted by the Mohammed bin Rashid Global

Centre for Endowment Consultancy.

Hussain Lootah, Director General of Dubai Municipality said: “We all know that Dubai is pioneering in innovation

in different fields, today we announce one of its innovation in the charity field. This is in line with the year of

giving declared by H.H. Sheikh Khalifa Bin Zayed Al Nahyan, UAE President, the the strategy of the year of giving

launched by H.H. Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice-President, Prime Minister and Ruler of

Dubai. Alihsan park will be the first collective-endowment park in the world under the name of UAE community”.

Lootah added: “we will work soon on the infrastructure of the endowment park and we will then open the door

for the community to donate palms from their houses and farms. The production of this park will be packed in an

endowment date factory located in the same park. The dates will be distributed to needy segments”.

Dr. Hamad Al Hammady, Secretary General of MBRGCEC said: “The Endowment park in Dubai is one of the

initiative that supports the directives of H.H. Sheikh Khalifa Bin Zayed Al Nahyan, UAE President in regard to the

year of giving, it also adopts the concept of innovative endowment launched last year by H.H. Sheikh Mohammed

Bin Rashid Al Maktoum, UAE Vice-President, Prime Minister and Ruler of Dubai. The centre works to establish

innovative initiatives to open the doors for the whole community to be part of endowment.”

The first collective-endowment Park in the world will be established with the members of the UAE community

donating the palm trees, which in turn will become an agricultural endowment. The project will also include a

charity date-packing factory, which will allocate its entire production towards the needy members within the UAE

community. The project has an expected annual production capacity of around 150 tonnes of dates.

The Endowment Park aims at opening the doors of sustainable charity to all its community members. The entire

concept is derived from the 125-year old custom originating from the Hatta region, which had the social custom

of endowing palms by traditionally donating the proceeds into charity and favouring the needy members of the

community.

During the second half of 2017, Dubai Municipality will announce the launch of the invitation to donate towards

the palms endowment for the park as soon as the infrastructure is completed on the project. The municipality will

also issue the specific requirements for each endowment palm tree in order to ensure the quality of production

within the Endowment Park.


Back to Index




Page 44



DEYAAR SELECTS UC FORWARD TO MARKET

PROPERTIES IN CHINA Thursday, June 22, 2017

Deyaar Development PJSC, one of UAE’s leading property development and real estate services companies, has

signed an agreement with real estate marketing and consultancy company UC Forward, to run roadshows in

China showcasing Deyaar properties to Chinese investors.

Based in Beijing, UC Forward is the only company offers services focus on Dubai real estate sales and marketing

consultancy with a specialisation in the Chinese market. UC Forward has also operated in Dubai since 2016, hence

the company provides a comprehensive solution for Dubai developers entering into the Chinese market.

According to figures from the Dubai Land Department, Chinese investors contributed over AED10 billion to

Dubai’s real estate market the past 4 years. Estimates showed that the Chinese population in Dubai has seen

rapid growth by 53 per cent over the last 5 years, and Chinese expats run at least 4,000 companies in the UAE.

UC Forward will organize roadshows in China for Deyaar, between June-December 2017. These will be held in

Beijing, Shanghai, Shen Zhen, and Suzhou.

Nasser Amer, Sales Vice President, Deyaar, said: “With a strong understanding and in-depth knowledge of the

Chinese market and its buyers’ preferences, in addition to having offices in both China and Dubai, UC Forward is

the ideal partner for us to tap into the massive potential the market holds. We have had considerable interest

from Chinese investors in our Dubai properties, and we are pleased to have UC Forward to properly showcase

our portfolio of wide-ranging properties.”

Richard Huang, Chairman of UC Forward, said: “The Chinese market has a strong interest in the UAE, and Dubai in

particular represents an attractive holiday destination to the Chinese public. Given the existing demand for

Deyaar’s property, we are confident that these roadshows will prove successful to both sides of the relationship.”

Deyaar Development PJSC is a leading real-estate developer and real-estate services company, headquartered in

Dubai. Since its establishment in 2002, the company has registered exponential growth to become an industry

leader in the region, with a share capital of AED5.78 billion.

Source: Gulf Today

Back to Index




Page 45



WORK STARTS ON NEW UNIVERSITY 'SUPER

CAMPUS' IN DUBAI Tuesday, June 20, 2017

Construction work has started to build Brighton College and Dwight School of New York in Dubai with a combined

development value exceeding AED275 million ($74.8 million).

Airolink, a design and build construction conglomerate, said in a statement that construction is taking place at a

10-acre site in Dubai. It was awarded the contract by the education arm of Abu Dhabi-based Bloom Properties.

It added that Brighton College UK and Dwight School New York will open branch campuses in Dubai in September

2018. The two schools, which will be located within a ‘super campus’ will have a combined enrolment capacity of

up to 4,000 students.

The schools will also offer extensive sports facilities, including tennis and squash courts, and a full soccer pitch

with a 400-metre running track.

The 89,000 square metre campus will also accommodate the Centre of Excellence for Arabic Language, Culture

and the Arts.

Dr Anil G Pillai, chairman and managing director of Airolink, said: “Our engineers, construction supervisors and

project managers are working with a collective pool of 500 workers and technicians to complete the project on

time by July 2018 – ahead of the new academic year beginning in September 2018.”

Airolink is currently constructing a number of projects that are at various stages of development in the UAE and

has recently broken ground on a large building project in Dubai.

Founded in 1845, Brighton College (UK) is a top-tier UK independent secondary day and boarding school offering

a British curriculum through to GCSE and A Level.

New York's Dwight School is a top-tier private education institution in Manhattan and the Dubai school will be its

first Middle East campus.

Facilities include a dedicated Learning Resource Centre, iconic back box theatre for performances, sports hall,

outdoor pitches, games courts and a swimming pool.

Two “big ticket” facilities will be shared with Dwight school – a 600-seat auditorium and an IAAF standard running

track.

Source: Gulf Today

Back to Index




Page 46



DEVELOPER ELLINGTON LAUNCHES THIRD

PROJECT IN DUBAI Saturday, June 17, 2017

Ellington Properties, the Dubai-born design-led boutique property developer, has announced the launch of its

third project.

The company said in a statement that Eaton Place in Jumeirah Village Circle (JVC) underlines its expansion, just a

month after completing its first project – Belgravia, also in JVC.

Eaton Place offers studios and 1 and 2 bedroom residences overlooking a resort style pool courtyard, it added.

Robert Booth, managing director of Ellington Properties, said: “Jumeirah Village Circle is a highly sought-after

residential destination for investors and home-owners, especially families who prefer an upmarket, design-led

lifestyle.

"Following the handover of Belgravia, we are launching Eaton Place, another exclusive development that is

defined by the highest standards of quality and aesthetics.

He added that the construction of Eaton Place is progressing, with homes to be handed over in mid-2018.

Ellington, which said it also plans to develop affordable rental units in the emirate by 2020, is behind other

projects being built in Downtown Dubai, Palm Jumeirah and Jumeirah Village Circle.

Source: Arabian Business

Back to Index




Page 47



MUBADALA INVESTMENT COMPANY READY

TO BUY REMAINING 50% IN VICEROY

HOTEL GROUP Monday, June 19, 2017

Mubadala Investment Company could announce as early as this week that it will buy out the 50 per cent of

Viceroy Hotel Group it doesn’t already own, a person familiar with the discussions confirmed.

The hospitality group owns and operates more than dozen hotels across the world, including the Viceroy Palm

Dubai, which opened at the end of March, the Yas Viceroy Abu Dhabi, which straddles the Formula One track, and

L’Ermitage Beverly Hills, which it acquired in 2010.

The deal would see involve Mubadala, Abu Dhabi’s strategic development company, buying the 50 per cent stake

owned by Malaysian businessman Jho Low and his affiliates, after he and his family lost a long battle in US federal

court to prevent the seizing of assets by the US department of justice, which has alleged they were acquired with

proceeds illegally siphoned from the 1Malaysia Development Bhd (1MBD) sovereign fund. 1MDB is the subject of

investigations in multiple jurisdictions.

US prosecutors last week filed a civil forfeiture complaint in a federal court in Los Angeles seeking US$540m in

assets allegedly purchased with funds stolen from 1MDB, including "rights to and interests in the Viceroy Hotel

Group", the Financial Times first reported on Sunday.

Mubadala officials declined to comment, and the terms of a possible deal have not been disclosed.

Mr Low acquired his stake in two transactions for a total of US$31 million more than five years ago, since when

the group has continued to expand. The proceeds of any sale would be held by the US department of justice as

part of its recovery process. Other assets the authorities have sought to seize include a New York penthouse, a

share of EMI music publishing rights, and a corporate jet.

The Viceroy hotels are part of Mubadala’s international hospitality portfolio, which sits within the $122 billion

fund’s "alternative investments and infrastructure" platform, accounting for about 30 per cent of its assets.


Back to Index




Page 48



REEM ISLAND HAS A NEW BEACH AT THE

HEAD OF ITS CANAL Sunday, June 18, 2017

Aldar’s flooding of the Reem Island canal has created a new beach on the Abu Dhabi island.

The 2.4-kilometre canal, which was filled with water in April, runs through the company’s master-planned Shams

development. The beach at its head is made for hosting community events such as Aldar’s Reem Weekend in

April, which attracted more than 5,000 visitors.

Also set along the canal are Aldar’s The Bridges development, which launched in April and is set for completion in

2020, and Reem Central Park, which is slated to open next year.


Back to Index




Page 49



ALDAR SAYS MASTER-PLANNED

COMMUNITY ON REEM ISLAND WELL ON

TRACK Sunday, June 18, 2017

Abu Dhabi: Aldar’s master-planned community on Reem Island is developing at a rapid pace with the 2.4-

kilometre Reem Island canal, Reem Central Park, Vida Hotel and Residences and mid-market residential projects

Meera and The Bridges, the developer said on Sunday.

Giving an update on various projects, Aldar said the construction for the Vida Hotels and Resorts project is

scheduled to start this year for completion in 2020 where as The Bridges targeting mid-market housing will finish

in early 2020.

Meera, another of Aldar’s mid-market developments is 16 floors complete, according to the developer.

Vida will operate a 262-key hotel and 192 serviced apartments. These will be accompanied by Aldar’s 329 marina

residences within the development, which will add to the 5,000 homes already within its leased residential

portfolio.

The Bridges, which Aldar announced during City Scape Abu Dhabi this year is a 1,272-unit, Dh1.3 billion mid-

market residential development with prices ranging from Dh450,000 for a studio to Dh1.5 million for a three

bedroom flat.

Reem Central Park which will feature a mosque that can accommodate 2,000 worshippers besides food and

beverage outlets, a retail centre, a skate park, play areas, and an interactive water feature is expected to open to

the public in 2018,

“In addition to being incredibly attractive for owner-occupiers, Reem Island continues to capture the attention of

investor audiences, with well over 60 per cent of the plots in our master plan currently in various stages of design

and construction, and the balance earmarked for future development opportunities by us as well as third parties,”

said Mohammad Khalifa Al Mubarak, chief executive officer, Aldar Properties.

Source: Gulf News

Back to Index




Page 50



ABU DHABI SAYS TO UPGRADE MIDDLE

EAST'S LONGEST TUNNEL Monday, June 19, 2017

Abu Dhabi City Municipality has announced details of improvement works to be carried out on the Sheikh Zayed

Tunnel and Street in Abu Dhabi, at a cost of AED109 million.

The project will see the upgrade of new entry and exit points for the tunnel and significant improvements to

junctions with other streets, as part of efforts to enhance traffic capacity and improve traffic safety in this vital

road, state news agency WAM reported.

The project, which is expected to take over two years to complete, is part of Abu Dhabi's lland to upgrade

infrastructure, roads, bridges and tunnels, it added.

Under the new plans, the municipality will undertake the project by adding improvements to phase 1 instead of

carrying out 3 phases. This includes upgrading the Sheikh Zayed Tunnel and Street as per traffic safety

requirements and ensuring flexible traffic flow.

Key improvements include constructing a 400-metre-long slipway between Sheikh Zayed Street and Sheikh Zayed

Street Tunnel between Al-Falah Street and Hazza Street junctions by adding two tunnel-bound lanes in the

direction exiting Abu Dhabi, and two lanes exiting the tunnel in the direction of the city entrance.

Works also include improving the junction with Al Falah Street by adding two lanes in the direction of Al Reem and

Al Maryah islands, and improving the surface street at Qasr Al Bahr junction to enable smooth traffic flow in the

direction of the city.

Abu Dhabi Municipality opened Sheikh Zayed Street Tunnel in 2012, and at 3.6km, including a 2.4km enclosed

section, it is longest tunnel in the Middle East.

Source: Arabian Business

Back to Index




Page 51



ABU DHABI PORTS ENTERS DEAL TO

DEVELOP FUJAIRAH’S HARBOUR Wednesday, June 21, 2017

Abu Dhabi Ports has entered a concession agreement with the Port of Fujairah that will grant it exclusive rights to

develop port infrastructure, including making berths deeper to let bigger vessels pass.

It will also manage the port’s operations as part of the 35-year concession agreement, both parties said.

"This agreement comes in line with the directives of Sheikh Hamad bin Mohammed Al Sharqi, Supreme Council

Member and Ruler of Fujairah, to further develop the Port of Fujairah and support the strategic role it plays in

enhancing the UAE’s economic growth," said Sheikh Saleh bin Mohammed Al Sharqi, chairman of the Fujairah

Department of Industry and Economy.

"We look forward to working closely with Abu Dhabi Ports in making this strategic partnership mutually beneficial

both in the short and long term and enhancing Fujairah Port’s capabilities and strengths both regionally and

internationally."

The deal gives Abu Dhabi Port the exclusive right to enhance existing infrastructure as well as managing

container, general cargo, roll-on roll-off and cruise ships in the port. The agreement also gives Abu Dhabi Ports

exclusivity in the Emirate of Fujairah for container businesses.

"This concession agreement reflects Abu Dhabi Port’s and Port of Fujairah’s efforts to develop infrastructure in

the UAE in line with the leadership’s vision to help drive economic and trade growth across all sectors. We

strongly believe that developing Fujairah Port and increasing its capabilities will enable it keep up with the

industry’s constant growth," said Sultan Al Jaber, Minister of State and chairman of Abu Dhabi Ports.

"Abu Dhabi Ports will utilise all its capabilities and expertise to enable Port of Fujairah to achieve its objectives,

based on best practices. In particular we plan to leverage the geography of this strategic port to contribute to the

development of the UAE’s commercial and tourism sectors," he added.

Fujairah has been positioning itself as a regional oil trading hub, which is a national objective for the UAE.

In the past decade, the port has tripled its berths to nine and increased shipping traffic more than eight-fold, with

the port handling more than 2,200 vessels last year.

Onshore storage capacity has increased twenty-fold in the past two decades to 10 million cubic tonnes and the

port operator has plans to increase that to 14 million cubic tonnes by 2020, said Captain Mousa Murad, the Port

of Fujairah general manager.

Fujairah in September opened a US$175 million jetty, giving it the capacity to berth very large crude carriers, or

VLCCs, the most common class of oil-carrying supertankers.


Back to Index




Page 52



WORK TO START ON MAJOR SHARJAH

RESEARCH PARK IN AUGUST Monday, June 19, 2017

Construction work on the first phase of a major new science park in Sharjah is due to get under way in August,

with the first buildings set to be delivered in early 2019, according to the head of the company overseeing the

project.

Hussain Al Mahmoudi, the chief executive of AUS Enterprises, said infrastructure work started on site in April and

is likely to complete in November. "The main building we will start constructing this summer – some time in

August – and we anticipate 18 months to conclude this," said Mr Al Mahmoudi in an interview with The National.

Phase 1 of the Sharjah Research, Technology and Innovation (RTI) Park will contain three, inter-linked buildings

with a built-up area of about 50,000 to 60,000 square feet. This will house the park’s headquarters, laboratories

and innovation centres. A hotel and convention centre may also be added as part of the first phase. Future

phases include new villas, a technology museum and a centre of excellence.

Mr Al Mahmoudi said the RTI park was a key plank in the Sharjah’s Government’s shift towards a knowledge-

based economy. Alongside a Dh10 levy on every government transaction above Dh50 that was introduced this

year to support research initiatives, land has been granted for a 45-storey residential tower site on Al Majaz

waterfront and for a school project both of which will provide an endowment for future development. The

American curriculum school is still in the concept stage, but designs for the tower are already under way and it is

expected to be built "within the next couple of years", said Mr Al Mahmoudi. He said the RTI park will be attractive

to participants and potential investors because it offers "some important basics" that do not exist elsewhere in

the country. "These basics are solid universities. That’s the challenge with other technology parks, because they

don’t have strong universities next to them."

The RTI Park sits next to Sharjah’s University City, "which holds more than 35,000 students, 2,000 PhDs, faculty,

plus 17 educational institutions in one university city". He said the two major universities, Sharjah University and

American University of Sharjah, are undergoing a transformation from teaching universities to science and

research-based institutions. He also said the science park would be a free zone that aims to attract potential

foreign direct investment by access to talent and potential funding for projects. Unusually, he added, university

staff and students would also be allowed to own businesses and commercialise their work.

The technology park will focus on six main sectors – renewable energy, water, environmental, transport, digital

and industrial technologies. Craig Plumb, the head of research at JLL Mena, said of the science parks that have

thrived elsewhere in the world, the most successful have been the ones those with strong links with universities.

"They’re not just real estate to house science and technology companies," he said.

"There aren’t many science parks in this part of the world, but the closest thing you would get to them … a lot will

have been developed as industrial estates like, for instance, Tecom, Internet City and Knowledge Village." He said

part of the reason for this is that universities in general have focused on teaching as opposed to research, but

there were examples – such as the Masdar Institute – where commercialisation of technology plays a more

important role.


Back to Index




Page 53



US FEDERAL RESERVE RATE RISE TO PUSH

CONSTRUCTION COSTS Sunday, June 18, 2017

The increase in interest rates by the US Federal Reserve last week is likely to make borrowing costs for projects

and contractors more expensive but is unlikely to derail funding plans for major projects by governments and

other clients in the region.

"In terms of raising bonds and the general, day-to-day project finance that contractors have to deal with, I don’t

think that an increase of that range makes a huge impact," said Zander Muego, a partner at the cost consultancy

Thomas and Adamson.

"Obviously, if the cost of money gets more expensive then it does impact contractors, and ultimately it impacts

the industry.

"There’s obviously a number of factors impacting the industry just now. Certainly, material prices have been

moving around, the market is fairly tight as well, so there aren’t huge margins for contractors in the first place.

"But the bigger challenges for contractors is one of cash flow and having sufficient cash to raise bonds rather than

small adjustments in the rates," Mr Muego said. He said in terms of project finance, the rise in interest rates is

only likely to be of note if it becomes part of a wider trend.

"If a project is feasible, then I would suggest that that small adjustment in the rate would not suddenly make that

project not feasible. But if that continues, it would have an impact."

Faithful + Gould’s regional development director, David Clifton, said: "There’s probably going to be another rate

rise this year as well, and it’s not the individual ones that are a concern, it’s the compounded effect of them that

might cause concern in due course."

However, he said that liquidity, rather than the cost of finance, was of greater concern for project funding.

"There is liquidity; it just takes time for that to reach the market." He also said that as governments move towards

alternative financing methods to fund projects, it will be long-term borrowing rates that will be more keenly

watched.

"Short-term interest rates probably aren’t going to cause a lot of pain right now," said Mr Clifton. Maarten Wolfs, a

partner and Middle East infrastructure finance leader at PwC, said any increase in base rates will increase

borrowing costs for the industry but, in terms of infrastructure financing, interest rates are only one part of a

much more complex set of sums. "The cost of long-term interest rate hedging and the lenders’ risk premium must

also be taken into account. We have seen a number of incremental rate hikes over the last few years. However, it

is fair to say we are still in a macro-economic cycle of historically low interest rates."

He said, in general, higher interest rates "have rarely prevented important infrastructure projects from

advancing".

"And in the case of many projects which are structured as PPPs, interest rate risk is a pass-through to the

government or end-user under the offtake contract."


Back to Index




Page 54



UK SET TO CAPITALISE ON HALAL LIFESTYLE

ECONOMY Monday, June 19, 2017

The United Kingdom is in pole position to capitalise on the trillion-dollar Muslim lifestyle economy, according to

the experts behind London’s biggest B2B halal conference.

Hundreds of household retailers, entrepreneurs and businesses took part in MLE Connect 2017 in the City last

month to discuss how businesses can capture a slice of the global Islamic economy.

"The attractiveness of the UK market from a global perspective means the value of the Muslim lifestyle economy

cannot be underestimated or ignored," says Tahir Mirza, the founder and director of the MLE Connect event.

A report by Euromonitor estimates that Muslims will make up more than a quarter of the world’s population by

2030. The Islamic consumer lifestyle market is one of the fastest-growing sectors in the world, expanding to an

estimated US$1.8 trillion in 2014 and projected to reach $3tn by 2021 according to a report by Reuters and Dinar

Standard.

"We feel strongly that 2017 is a year of opportunity for those who embrace the sector and adjust their offering

accordingly," Mr Mirza adds. "The opportunities that exist for all businesses, regardless of religion, are too big to

miss."

Alongside British household names such as the retailers Tesco, Asda, Sainsbury’s and the mortgage lender

Nationwide, the event brought together sector experts, investors and industry specialists from across the United

Kingdom, as well as delegates from the UAE and wider Middle East, Turkey and Malaysia.

In the past five years, a wave of new SME businesses has sprung up in the UK. These start-ups range from

innovative fusion-food businesses that combine convenience and faith values, to permeable nail polish

companies and mobile apps. A slew of newly incorporated e-commerce sites have been created to sell everything

from colourful hijabs to halal-friendly lipsticks and Islam-friendly holidays.


Back to Index




Page 55



‘DANGEROUS SITUATION’ FOR HONG KONG

PROPERTY MARKET, SAYS CHAN Wednesday, June 21, 2017

Hong Kong’s property market is in a dangerous situation and vulnerable to a correction, Financial Secretary Paul

Chan said in an interview.

The warning comes as rate hikes by the US Federal Reserve send borrowing costs higher in Hong Kong, given the

city imports US monetary policy due to its currency peg. The Hong Kong Monetary Authority last week boosted

borrowing costs by 25 basis points to 1.5 per cent after the Fed raised its target range by the same amount.

“That’s why we have to warn our people about the dangerous situation of the property market at the moment,”

Chan told Bloomberg Television in an interview.

Chan, who was appointed finance secretary in January, said he is concerned about a correction in Hong Kong, the

world’s priciest housing market. “No one can tell how deep the adjustment will be or what is the appropriate level

of adjustment.”

At the same time, Chan also talked up the strength of Hong Kong’s financial system, which he said can withstand

any steep correction. The government is already taking steps to boost supply and ease demand and the current

cycle isn’t showing signs of a crash, he said.

The Asian financial crisis touched off a six-year property bust in Hong Kong that shaved more than two-thirds off

prices and saddled the city with a stagnant economy and deflation. Chan said he doesn’t expect that to be

repeated. “The situation is very different from 1997.”

Efforts by authorities to cool demand through tighter rules for lending and other measures have so far had little

impact on home prices in Hong Kong, as developers bid up the cost of land to new records and borrowing costs

remain low. The value of outstanding mortgages jumped by more than a third in the five years through December

and now amounts to 47 per cent of gross domestic product, more than 10 percentage points higher than in early

1997 before a housing bubble burst.

Predictions of a property crash in Hong Kong have been proven wrong in recent years as the city shook off crises,

epidemics, an ageing population and China’s slowdown. Its status as a gateway to the world’s second-biggest

economy, with Western-style legal protections, means Hong Kong continues to attract investment.

Chan said the former British colony’s role as a conduit for capital into and out of China remains a key strength.

“We can be a risk manager for both sides,” Chan said.

Source: Gulf News

Back to Index




Page 56



TRUMP’S INDIA PARTNER IS GUNG HO

ABOUT SALES Wednesday, June 21, 2017

As President Donald Trump prepares to host Indian Prime Minister Narendra Modi in Washington, his business

partner in India is gearing up to sell high-priced condominiums at Trump Tower Mumbai.

While the timing may be coincidental, it points to possible conflicts of interest: Trump continues to profit from a

business deal with India’s largest real estate developer, who has close ties to the ruling Bharatiya Janata Party

(BJP). The developer, Mangal Lodha, the founder and major shareholder in the Lodha Group, is a senior party

figure in the state of Maharashtra. His political manifesto echoes a familiar slogan: “making Mumbai great again.”

Lodha’s son, Abhishek, who took over running the family business in 2010, says he sees no conflict because

Trump hasn’t been involved with the company since he entered the White House. Lodha paid Trump as much as

$5 million for the licensing deal on the Mumbai development, according to the president’s financial disclosures.

“There cannot be any conflict of interest in relation to his association with us,” Lodha said in an interview in

London. “Mr. Trump becoming president and the Trump’s organisation relationship with us are completely

independent, and any attempts to link the two are not grounded in facts.”

In January, Trump handed over management of his company to his two older sons but refused calls to divest.

Critics of the president frequently complain that this unprecedented arrangement is problematic because it can

create doubt about whether the president is putting his interests ahead of the nation’s. Trump’s dealings with

Modi illustrate this potential collision between his priorities as a businessman and his decisions as president.

As Trump and the US State Department negotiate with India, his company is accepting payments from business

partners with ties to the Indian government. That raises questions about whether Trump stands to profit from his

foreign policy decisions, and also whether Indian authorities will give special treatment to the president’s Indian

business partners to win his favour.

Modi is due in Washington next Monday for his first face-to-face meeting with Trump, a politically charged visit

likely to be dominated by the president’s decisions to pull out of the Paris climate accords and tighten rules for

letting foreign workers into the US, which will affect Indian companies and outsourcing firms.

Lodha says he plans to resume sales of luxury condos at the 75-storey Trump Tower Mumbai at the end of the

month. He says the development, overlooking the Arabian Sea, is 60 per cent sold and due for completion in

2019. He halted condo sales in November when Modi banned high-denomination notes to reduce corruption, a

move that had a chilling effect on real estate.

Lodha said demand has bounced back, with February-April turning out to be the strongest three-month sales

stretch ever for the company. “We don’t plan our business based on who’s meeting whom,” he said.

Lodha is building one of three Trump-branded properties in India. In addition to Mumbai, a Trump Tower in the

western city of Pune is being built by Panchshil Realty and another Trump Tower in Gurgaon southwest of New

Delhi is being constructed by IREO Realty.

Lodha says he first got to know Trump in 2013 and it never occurred to him or his family that Trump would one

day be president. Lodha, a privately-held family-owned company, has invested hundreds of millions of pounds




Page 57



into two luxury residential developments in London, its only commitment outside India. The company is planning

to sell shares in an initial public offering in 2018.

Mangal Lodha’s manifesto takes a page from the Trump doctrine: “Our plan for making Mumbai great again?

Listening to you first.” He goes on by saying Modi’s election in 2014 meant “a new government that makes

promises and actually delivers.”

Trump called India a “true friend and partner in addressing challenges around the world” after a call with Modi in

January, one of the first heads of state he spoke with upon taking office. Earlier this month, when announcing the

US would be pulling out of the Paris climate accords, Trump singled out India for demanding “billions and billions

and billions of dollars in foreign aid from developed countries” as its condition for participating in the agreement.

India’s Foreign Minister Sushma Swaraj said there was “no reality” in what Trump had said and that India signed

the Paris agreement because of a commitment to protect the environment.

Source: Gulf News

Back to Index




Page 58



SOARING PRICES PUT OFF INDONESIAN

HOME BUYERS Wednesday, June 21, 2017

Analysts love them, investors loathe them. Three out of the seven Indonesian stocks which have unanimous buy

recommendations from analysts are residential developers and all of them have fallen by at least 16 per cent this

year.

Predictions that lower interest rates in Indonesia and last month’s decision by Standard & Poor’s to raise its

sovereign rating to investment grade would benefit the country’s property developers, along with banks, have

been undercut as soaring prices deterred home buyers.

The Jakarta Construction, Property and Real Estate Index has dropped 5.8 per cent this year, the worst

performance among the nine industry gauges in the equity benchmark. That contrasts with a 15 per cent gain for

financial stocks, the best.

Residential property prices in Indonesia’s 14 largest cities have risen by 58 per cent in 10 years through the first

quarter of 2017, according to central bank data. Increases for some locations are so great that the benefit of

cheaper financing won’t be enough to attract buyers, according to Jemmy Paul, a fund manager at PT Sucorinvest

Asset Management.

“Home prices in some areas where these listed developers are located have been rising far steeper than the

average,” he said. “In some cases it can be more than double. This has made the drop in interest rates

meaningless.”

Bank Indonesia went on a cutting spree last year as it lowered rates six times, and the benchmark has been kept

unchanged at 4.75 per cent since October. Shares of PT Modernland Realty have dropped 23 per cent this year,

while PT Intiland Development and PT Lippo Cikarang have fallen 16 per cent and 19 per cent respectively.

Millennials represent the most important generation for Indonesia developers right now as around half of this

demographic is at the prime age to buy a first home or get a first upgrade, but property-price increases in many

cities have outpaced income growth over the past five years, making housing unaffordable, according to Morgan

Stanley.

Gross domestic product per capita in Indonesia was 45.2 million rupiah ($3,402) per year, according to the latest

survey by the country’s statistics agency in 2015, while average per capita income for Jakarta in 2014 was 174.8

million rupiah. That compares with an average asking price of apartments in the capital of 32.1 million rupiah per

square meter, according to a first-quarter report by real estate services company Colliers International Group Inc.

To stay competitive, Indonesian property developers need to adapt to address the needs of the millennial

generation which has to deal with increasing home prices and affordability issues, Morgan Stanley’s analysts

Mulya Chandra and Nico Yosman wrote in a May 8 report.

“Prices have somewhat stabilised in the past one to two years, but wage growth has yet to catch up,” they wrote.

“At more than five-times annual household income, and with average mortgage rates around 10-11 per cent,

housing is out of reach for many buyers.”




Page 59



Even Morgan Stanley’s top sector picks Bumi Serpong Damai PT and Ciputra Development PT have

underperformed the Jakarta Composite Index’s 8.6 per cent advance this year, with Bumi Serpong gaining 2.9 per

cent, while Ciputra has slumped 13 per cent.

For Indra Mawira, a fund manager at PT Panin Asset Management, the divergence has lured him toward the

underperforming property companies compared to the banking stocks.

“While many are still holding negative sentiment toward property stocks, I find them to be more attractive after

the drop,” Mawira said. “Share prices on banks have largely priced in all the good news, so I would put property

on a slight overweight, while I would hold a neutral stance on banks.”

Source: Gulf News

Back to Index




Page 60



UK BUDGET DEFICIT NARROWS, BRINGS

BRIEF RESPITE Thursday, June 22, 2017

LONDON: Britain’s budget deficit narrowed last month, helped by a recovery in value-added tax receipts, giving

finance minister Philip Hammond some respite ahead of an expected increase in borrowing later this year.

The deficit in May stood at 6.7 billion pounds, down nearly 5 percent compared with the same month last year,

the Office for National Statistics said, citing figures that exclude state-controlled banks.

The shortfall matched the median forecast in a Reuters poll of economists.

The public finances were boosted last month by the biggest intake of value-added tax receipts for any May on

record, after these sales taxes stalled in April.

Britain has been struggling to fix its public finances since the budget deficit surged to around 10 percent gross

domestic product in 2010 after the global financial crisis.

Since then it has been cut steadily to 2.4 percent of GDP in the 2016/17 financial year which ended in March, its

smallest since before the crisis.

While borrowing over the first two months of the 2017/18 financial year stands 0.4 percent lower than at the

same point in 2016/17, the deficit is expected to increase later this year.

The Office for Budget Responsibility thinks it will widen to 2.9 percent GDP in 2017/18 when Hammond will have

fewer one-off factors to help him.

Britain’s economy is also widely expected to slow as negotiations to leave the European Union progress.

Households are already strained by rising consumer prices, fuelled by the pound’s sharp fall after last June’s

Brexit vote.

On Tuesday he said he would stick to the fiscal rules he set out late last year, committing to balance the budget by

the middle of the next decade.

The opposition Labour Party, emboldened by a stronger-than-expected showing in this month’s national election,

has called on the government to relax its grip on spending and has linked a series of recent terror attacks and a

deadly fire in a public housing tower block to budget cuts.

Hammond’s plan might come under pressure if Britain’s economy disappoints further after losing most of its

momentum in the first three months of the year. However, he already has some room for manoeuvre within his

existing plans allowing him to spend more if needed.

The ONS said income tax revenues rose 2.7 percent year-on-year in May to 11.7 billion pounds, while corporation

tax revenues increased 2.5 percent to 4.7 billion pounds.

Britain’s markets watchdog has proposed stricter rules for people who advise customers who want to switch from

a defined benefit pension plan to a scheme that relies on investment performance.

The Financial Conduct Authority said it was intervening after seeing cases of poor advice.

Source: Gulf Today

Back to Index




Page 61



PAKISTAN TO RESTART SCRUTINY OF

INVESTMENT BY BUILDERS Thursday, June 22, 2017

The Federal Board of Revenue (FBR) of Pakistan will re-initiate scrutiny of money trail of investments in real estate

sector by developers and builders after an elimination of the fixed tax regime in the budget for the next fiscal year

of 2017-18, sources said.

The sources said the fixed tax regime restrained FBR from undertaking scrutiny of investments made by builders,

developers or any others on their behalf.

“In the fixed tax regime, the builders and developers calculate their amount to be paid on a project and no further

questions were asked by tax authorities,” an official at Regional Tax Office (RTO) Karachi said.

Finance Minister Ishaq Dar, in his budget speech, announced withdrawal of the fixed tax regime for builders and

developers from July 1.

According to the fixed tax regime, the builders and developers are bound to pay various taxes per square

yard/foot, which are variable area to area.

Minister Dar said builders and developers had committed to contribute around Rs28 billion, but so far their

contribution was mere Rs110 million.

The Association of Builders and Developers argued that under the fixed tax regime around Rs150 million was

deposited to national exchequer. The contribution would be around three billion rupees in the next two years,

said the association.

Last year, the government introduced the tax regime for builders and developers before introducing reforms in

taxation on property business.

The FBR, after consultation with stakeholders, had announced the fixed tax regime with a hope that a huge

amount would be invested in various projects, which would yield a significant amount of revenue.

Tax officials said the fixed tax regime provided a sort of amnesty to builders and developers because under such

regime the tax authorities neither ask questions nor conduct audit of this industry.

BENAMI REGULATIONS

The tax official said another major reason behind the withdrawal was introduction of benami laws, which are

likely be implemented from the next fiscal year.

The official said in the normal tax regime builders and developers would have to declare the name of investors.

“Previously, the investors were taking advantage in the absence of benami laws,” the official said. “Now, in the

normal regime investors could not make investment without declaring their identity.”

The RTO official said the builders and developers would have immunity from questioning for the tax year 2017

during which fixed tax was imposed. “Otherwise, the FBR can open cases for audit during the past five years,” the

official added.

The government is set to further increase property valuation rates by about 30 per cent for major cities of the

country from July, a move that is expected to irk real estate agents and traders much like it did last year.




Page 62



The move comes as the real estate sector, once labelled ‘dead for revenue purpose’, has started generating cash

for tax authorities.

As a result of the increase in property valuation rates for federal tax purposes under the first phase, the

government’s revenues from the sector increased 100 per cent to roughly Rs15 billion while property transactions

also grew by one-tenth during the July-April period of the outgoing fiscal year.

“Under the second phase, the government would notify fresh property valuation rates for major cities by June 30,”

says Federal Board of Revenue Chairman Dr Mohammad Irshad. He said that the rates would go up by another 30

per cent on average, but these would still be lower than the actual prevailing market rates.

The government also plans to increase the number of cities included in the plan from 21 to 30. The new rates will

be notified after the approval of the Finance Bill 2017.

Source: Gulf Today

Back to Index




Page 63



EMAAR REAL ESTATE IPO HAS VALUE Thursday, June 22, 2017

Mohammed Al Hashemi, the executive director of Invest AD Asset Management, answers questions on Emaar’s

recently announced real estate unit IPO, the benefits of listing subsidiaries and what the IPO means for the wider

market.

Is Emaar’s real estate unit IPO a surprise to the market? How does it fit into the company’s broader strategy?

The announcement by Emaar of its intent to float up to 30 per cent of its real estate development unit in

November should not come as a total surprise. The success of the Emaar Malls IPO in 2014 has clearly

encouraged the company to look at additional ways to realise value from its operating businesses and enhance

shareholder returns. Its hotels and entertainment businesses are the remaining key operations that may also be

earmarked for future IPOs or partial sale in the coming years, leaving Emaar Group itself as a holding company.

More and more companies are choosing to list subsidiaries. What does this mean?

For corporates regionally whose operations have grown over the years to span several distinct activities, a

separate listing of one or more of those activities can bring several major benefits. This is in a context where

valuations of the parent company may be relatively depressed compared to where the management feels it

should be. It helps to ascribe a more direct valuation to listed subsidiaries, and hence crystallise higher valuations

than is implicit in the parent company’s valuation. In addition, it’s a means for the parent company to raise

additional capital through a partial sale, which can be deployed for business development elsewhere across the

group, and yet the parent can retain a majority exposure to the listed business through its balance sheet.

Furthermore, it’s a means to bring greater visibility and autonomy to the listed entity and allows the parent

company to further reduce its stake at higher valuations down the line.

What can we read from the objective to distribute funds as dividends to shareholders?

Emaar’s decision to distribute to shareholders the funds raised from the IPO shows clearly that the primary

reason for this spin-off is not due to a need for capital but rather to unlock value. The management’s view is that

the market is undervaluing Emaar Group’s assets and there may be some frustration there.

What does the IPO mean for the regional property sector and can we expect to see more property IPOs going

forward?

It’s possible that we will see similar announcements in the coming months by other corporates in the real estate

sector that have seen the success of the Emaar Malls IPO, and are now closely watching this IPO. A clear example

where there is hidden value is Abu Dhabi-based property company Aldar, which can clearly look to raise new

capital or realise value through separate listing of its growing malls business. Malls in the emirate of Abu Dhabi,

such as Yas Mall, World Trade Center and Al Jimi malls, could be injected into this.

What about other industries, for example, airlines? Where can investors find hidden value?

The airlines sector in the GCC is another prime example of an industry that is particularly suited to reap significant

benefits from operators listing selected operating subsidiaries. For example, Saudi Airlines has already listed its

catering and ground services operations. Given the strategic nature of national airlines to GCC countries, a partial

listing of subsidiaries allows operators to raise capital and alleviates the need for the parent group to list.

Governments can therefore retain full control at the holding company level. In this respect, both Etihad Airways

and Emirates make excellent candidates.





Page 64



Back to Index




Page 65



DUBAI RESIDENTIAL SALES DOMINATED BY

OFF-PLAN PURCHASES Thursday, June 22, 2017

Off-plan property transaction now make up almost half of all residential sales in Dubai, with buyers taking

advantage of increasingly generous payment plans, according to listings portal propertyfinder.ae.

The company said cheaper homes and lower deposit requirements were driving investors towards off-plan deals.

It said median prices for homes have fallen by 20 per cent between November 2015 to April 2017, extending a

slump that had begun two years earlier.

Yet lower prices have not affected developers’ sales of off-plan homes, with Emaar Properties and Damac

Properties reporting higher sales in the first quarter of 2017. Emaar booked deals worth Dh6.05 billion in the first

quarter, a 44 per cent year-on-year increase, while Damac sold properties worth Dh2.2bn, up 11 per cent year-on-

year.

Propertyfinder Group’s chief commercial officer, Lukman Hajje, said buyers of completed projects typically have

to find a deposit of 25 per cent of a home’s value, plus a further 6 per cent to cover charges and fees.

"That’s a large amount of money and it’s forcing many potential purchasers away from the completed property

market to off-plan, where developers are enticing them with low upfront and even back-ended payment plans."

Emaar Properties has some of the least generous payment schedules, Propertyfinder said. For instance, at

Downtown Views II it requires 70 per cent of a property’s value to be paid during construction and the remaining

30 per cent on completion. Damac Properties, by comparison, allows for 60 per cent of the payment for its

Casablanca Villas scheme at Akoya Oxygen to be paid on completion, and Dubai Properties offers similar terms at

Mudon Views. Smaller developers are even more generous, it said, with Danube Properties requiring 25 per cent

of a property’s value at its Bayz project to be paid within 120 days, and the remainder to be paid at 1 per cent per

month until December 2023.

"In theory, buying off-plan allows investors to take advantage of historically low Dubai property prices for a very

low cost and a get a foothold in the market but this strategy does not come without risk," Mr Hajje said.

"Projects are often delayed and buyers have little option but to wait. Also, the finished product may not be what

they expected. Glossy brochures can look amazing but market conditions and political or economic situations

change, as do the price and availability of certain materials. All these can impact what’s eventually delivered."

The property broker Core Savills said in its Q1 Dubai residential report that off-plan sales were enjoying a "robust

performance", especially in established areas like Dubai Marina and Downtown Dubai.

"Off-plan sales are increasingly regaining a foothold, particularly products from reputed developers – although

having a detrimental effect on secondary market sales, notably in prime apartment districts," said David

Godchaux, the chief executive of Core Savills.


Back to Index




Page 66



ARABTEC GETS GO-AHEAD FOR CAPITAL

REDUCTION Thursday, June 22, 2017

The contractor Arabtec has announced that it has gained regulatory approval for the second phase of its share

recapitalisation programme, which will see the number of shares in issue decline to 1.5 billion from 6.1 billion.

In a statement to the Dubai Financial Market, Arabtec said Thursdaywould be the last day of trading in its existing

shares before the reduction takes place, which is being done on a pro-rata basis.

The lower number of shares will begin trading at a restated price once markets reopen on Wednesday, June 28.

The reduction in the company’s share capital will reduce its liabilities, allowing Arabtec to extinguish historic

losses of about Dh4.6 billion that were racked up over a disastrous trading period that saw the firm post nine

consecutive quarterly losses between 2014-2016, including a Dh3.4bn loss last year.

It also follows a rights issue which saw the company raise Dh1.5bn by issuing new shares to existing investors.

Arabtec said on Tuesday that it would use the proceeds from this rights issue to finish existing projects, execute

its turnaround plan and pursue new business.

The rights issue had been backed by Arabtec’s biggest shareholder, Aabar Investments, which effectively

underwrote the process by offering to buy stakes that minority stakeholders declined to take up.

Speaking at the company’s AGM in April, when investors approved the recapitalisation programme, Arabtec’s chief

executive Hamish Tyrwhitt said that it had considered several other methods of shoring up its balance sheet,

including raising more debt or issuing convertible bonds, but had ruled them all unsuitable as the company was

not in a position to borrow more.

Mr Tyrwhitt, a former head of CIMIC Group in Australia who was appointed as Arabtec’s chief executive in

November last year, said the company had established a new approval process to better manage contract risk.

"The industry has not evolved for thousands of years. If you keep it simple, if you win work for which you have the

ability to make a cashback profit, if you employ competent people and you empower them, the company will be

successful," he said.

"The company has an incredible past, it has an incredible list of projects. Going forward, we need to harness our

track record, and [start] winning work that has the ability to make money."

The company has embarked on a three-year turnaround programme, with the current year based on stabilising

the business. Alongside the capital restructuring, Mr Tyrwhitt has also been reshaping Arabtec’s management

team and has set out a strategy focused on its three core contracting businesses – Arabtec Construction, the oil &

gas specialist Target and the mechanical and electrical contracting business Efeco. It is also planning to sell off

non-core assets and improve recovery rates on money owed for outstanding work.

Sanyalak Manibhandu, the head of research at NBAD Securities, said contractors such as Arabtec continue to face

tough macroeconomic conditions, with the recent agreement by Opec members to extend current production

cuts into 2018 likely to impact negatively on the GDPs of the countries concerned.

"When you’re talking about production cuts moving into 2018, it means that the growth momentum for 2018 will

be a little suspect as well," he said.




Page 67




Back to Index




Page 68



DAMAC TO DELIVER $1BN MUSCAT PORT

PROJECT Thursday, June 22, 2017

The Dubai-based developer Damac has been chosen by the government of Oman to develop the US$1 billion

project to redevelop Port Sultan Qaboos in Muscat.

Damac’s brief from the Omani government’s investment and development arm, Omran, is to transform the

historic port into a tourist-led, mixed-use destination.

Port Sultan Qaboos had historically been Muscat’s trading port, but most commercial shipping activities have

subsequently been moved to Sohar Port. This has paved the way for the site to be used mainly for tourism

purposes by housing cruise liners. The redeveloped site will include Souq Al Mina – a market district next to the

cruise liner terminal aimed at tourists – as well as hotels, restaurants, retail, dining and apartments.

Damac’s chairman, Hussain Sajwani, signed a memorandum of understanding at the site yesterday with the

chairman of Omran, Ali bin Masoud Al Sunaidy, who is also the deputy chairman of Oman’s Supreme Council for

Planning. Oman’s minister of transport and communications, Ahmed Al Futaisi, was also in attendance.

Mr Sajwani said: "As the second-largest developer in the region and with a strong record of international

experience, Damac is ideally positioned as the joint development partner of Omran.

"As part of its commitment to the project, Damac will contribute to the local road infrastructure, improving

opportunities for local SMEs and Omani nationals."

Ali Al Sunaidy said that Mina Sultan Qaboos Waterfront is based in the historic centre of commerce in Muscat, in

Muttrah. The area is "one of the most visited tourist destinations in Oman", he said.

"The redevelopment of the port by Omran will build renewed interest and focus to the area, while creating a

strong investment proposition for the tourism, real estate and leisure industries," he said.

The redevelopment of Port Sultan Qaboos is expected to take place over four phases, completing in 2027. The

first phase is due to complete in 2020. Damac’s role is understood to cover the development of the entire project

but it is not a direct investor.

Mr Al Futaisi had previously said that Omran would retain a 51 per cent share in the venture with the remaining

49 per cent offered to investors.

The venture is Damac’s first major project in Oman but it has delivered schemes across several other Arab states

previously, including Saudi Arabia, Qatar and Lebanon.

By the end of March, the company had delivered 18,500 homes across all of its completed projects and had

44,000 more under development.


Back to Index




Page 69



UAE SPAS BECOME A TOURISM STAPLE Monday, June 26, 2017

At this year’s Beautyworld Middle East trade show, held at the Dubai International Convention and Exhibition

Centre, the centrepiece of the vast hall that was dedicated to the spa industry was called the Sensorial Journey.

Stepping into the stand, spa professionals were wowed by a bespoke experience designed by the luxury French

beauty brand Carita and the brand consultants Centdegres. It played to all five senses – sight, touch, smell, taste,

and hearing. It began with a drink made from detoxifying ingredients and ended with a facial treatment using

Carita’s Cinetic Lift Expert machine, which uses LED, ultrasound and microcurrent technology to give the skin an

instant pick-me-up.

It was a sophisticated experience designed to tune into the needs of the increasingly demanding UAE spa goer.

"They are looking for ‘Luxury 2.0’," says Susie Ellis, the chief executive of the Global Wellness Institute (GWI). "They

want a higher level of expertise from the therapists and trainers, and crave a more unique menu of services that

includes indigenous practices and products that can help educate them about the region and its secrets to

greater health and vitality, things they can get nowhere else."

With a market that is growing so fast, it is no wonder UAE spa goers are becoming more discerning. The global

wellness tourism market here – which includes the spa sector, as well as all travel associated with enhancing one’s

personal wellbeing – is the market leader in the Mena region, at twice the size of its next closest competitors,

Morocco and Israel, combined, according to the GWI.

Ms Ellis, who hosted the spa industry-dedicated Wellness Symposium at this year’s Arabian Travel Market, says

the wellness industry offers huge opportunities for the UAE economy.

"The wellness tourism market is a critical, fast-growing component of the UAE’s fast-growing tourism industry,"

she says. "In 2015, the UAE’s Minister of Economy reported that tourism contributed US$36.4 billion to the

country’s economy, 9 per cent of total GDP. And wellness tourism comprises 13.4 per cent of that total tourism

spend including both domestic and international, at $2.72bn in revenues. So, about one in seven of total tourism

dollars generated comes from trips with a wellness component."

And while the UAE’s spa sector, with treatments offered in both standalone spas and within hotels, is smaller than

its total wellness market, it is growing at an even faster rate. The Mena region’s spa powerhouse, it grew from

$582 million to $742m between 2013 and 2015, boasting an increase from 121 spas to 687, according to the

Global Wellness Institute (GWI). It also ranks as one of the top 20 national spa markets in the world.

The UAE simply dominates in Mena, driving 35 per cent of the region’s spa revenue, says Mrs Ellis. "The UAE spa

market is nearly three times bigger than its closest Mena competitor, Saudi Arabia, at $255m. To put the UAE’s

spa market growth in some global context, the UAE market grew 27.5 per cent from 2013 to 2015, while the global

growth average was only 4 per cent. That’s roughly seven times faster growth. That’s incredibly impressive.

"There are 687 spas that earn $742m annually, or $1.08m on average per spa, which is very high. Just compare

that, for instance, to the number three Mena spa market, Morocco, which has 1,785 spas earning $244m annually,

or roughly $137,000 per spa."

Pooja Hemrajani, an analyst at Colliers International, points out that in Dubai alone there are more than 200 spas

in operation, and a further 25 new hotel spas are expected to open in 2017.

"Spas are now seen as an integral feature of a hotel, and often occupy prime real estate within a hotel," says Ms

Hemrajani.




Page 70




Back to Index




Page 71



INVESTOR AWARENESS, IMPROVED

REGULATORY ENVIRONMENT NECESSARY

FOR GCC REITS TO FLOURISH: SURVEY Wednesday, June 21, 2017

Investor sentiment and lack of understanding, along with a weak regulatory environment, are the biggest

challenges for the growth of REITs (real estate investment trusts) in the Middle East, according to the latest survey

by CFA Society Emirates, which gauged the opinions of the society’s members and charterholders in the UAE.

The survey revealed that the majority of CFA Society Emirates’ members ranked expected returns from a REIT

portfolio higher than cash equivalents and bonds, and said that they intend to invest in REITs.

However, they believe that the returns from REITs would be lower than stocks, private equity and real estate.

Amer Abdul Aziz Khansaheb, CFA, President of CFA Society Emirates, commented on the findings, saying, "Over

the past decade, the GCC has seen a surge of activity in the region’s relatively youthful REIT market. Recent

developments, such as the oversubscription of ENBD REIT and Johor Corp’s Al-Salam REIT, suggest that there is a

rising demand amongst investors for this particular asset class.

He added, "With the UAE’s real estate market having the highest demand in the GCC amongst regional and

international investors, a less volatile asset class, such as REITs, is expected to become more attractive, as

investors seek to reduce portfolio risk given the current macroeconomic environment."

However, the survey shows that it is important for investment professionals to increase investor understanding

about REITs and gain their trust through prudent and ethical investment strategies which put investor interests

first, he said.

The key findings of the survey show that investor understanding of REITs was seen as the biggest challenge for its

growth and development in the region.

Sixty-two per cent of respondents are convinced returns from a REIT portfolio will be lower than stocks, while 82

per cent feel that REITs will deliver lower returns than private equity. Forty-six per cent are of the opinion that real

estate would deliver higher returns than REITs.

A large majority of respondents said that the expected returns from a REIT portfolio would be higher compared to

cash equivalents (83 per cent) and bonds (73 per cent).

Seventy-six per cent of members see institutional investors investing in REITS, compared to 23 per cent who felt

that it would be retail investors.

62 per cent of respondents said that they intend to invest in REITS.

Forty-five per cent of members believe that GCC’s real estate market is mature enough for REITS to flourish, while

43 per cent believe that it is not.


Back to Index




Page 72



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, Qatar, Jordan and the Kingdom of

Saudi Arabia not only provides a deep understanding of

the local markets but also enables us to undertake large

instructions where we can quickly apply resources to meet

clients requirements.

Our breadth of experience across all the main property

sectors is underpinned by our sales, leasing and

investment teams transacting in the market and a wealth

of research that supports our decision making.

John Allen BSc MRICS

Director, Valuation & Advisory

+971 4 403 7777

[email protected]

Jenny Weidling BA (Hons)

Manager – Research and Advisory

+971 4 403 7789

[email protected]

VALUATION & ADVISORY

Our professional advisory services are conducted by

suitably qualified personnel all of whom have had

extensive real estate experience within the Middle

East and internationally.

Our valuations are carried out in accordance with the

Royal Institution of Chartered Surveyors (RICS) and

International Valuation Standards (IVS) and are

undertaken by appropriately qualified valuers with

extensive local experience.

The Professional Services Asteco conducts throughout

the region include:

• Consultancy and Advisory Services

• Market Research

• Valuation Services

SALES

Asteco has established a large regional property sales

division with representatives based in UAE, Saudi

Arabia, Qatar and Jordan.

Our sales teams have extensive experience in the

negotiation and sale of a variety of assets.

LEASING

Asteco has been instrumental in the leasing of many

high-profile developments across the GCC.

ASSET MANAGEMENT

Asteco provides comprehensive asset management

services to all property owners, whether a single unit

(IPM) or a regional mixed use portfolio. Our focus is

on maximising value for our Clients.

OWNER ASSOCIATION

Asteco has the experience, systems, procedures and

manuals in place to provide streamlined

comprehensive Association Management and

Consultancy Services to residential, commercial and

mixed use communities throughout the GCC Region.

SALES MANAGEMENT

Our Sales Management services are comprehensive

and encompass everything required for the successful

completion and handover of units to individual unit

owners.

Date post:	01-Jan-2021
Category:	Documents
Upload:	others
View:	3 times
Download:	0 times

NEWS BRIEF 26 - Asteco · 2017. 6. 27. · damac to deliver $1bn muscat port project uae spas...

Documents