6 Mar 2018
Dubai’s weakened luxury market is offering major value, with cheaper prices than most major global cities, according to a report from Core Savills.
Prime prices in Dubai have been in freefall since 2014, when the collapse of oil prices hit wealth in the region and many high-end buyers in the city. Recent market data show the emirate’s housing market has hit the bottom of its downslide, meaning that now is the time to invest, according to the report out Sunday.
“The top segment may provide better prospects for investors in the coming few years,” according to the report.
For instance, prices in a few luxury quarters, like the towering Burj Khalifa, are down 70% from their peak in 2014, Mansion Global previously reported.
Prices are now cheaper than almost all comparable luxury hubs. High-end homes are around 40% less expensive than Singapore and 50% less expensive than Moscow and Paris, according to the report.
Asian capitals like Tokyo and Shanghai are 60% to 70% more expensive than Dubai when it comes to luxury property.
Buyers get more space for their money, as well.
In elite Monaco, US$1 million will get you only 22 square meters of luxury home (236 square feet)—or a modest dining room, according to the report. That amount will get you 52 square meters (560 square feet) in London, 55 square meters (592 square feet) in New York and 78 square meters (840 square feet) in Paris.
In Dubai, $1 million gets 150 square meters (1,615 square feet)—triple the space in New York or London.
The taxes you pay to buy and own a home in Dubai are less than in most other luxury hubs, according to the report.
In New York, for example, owners spend around 13% of the purchase price in taxes to buy, hold and sell a home over a five-year span, according to the Core Savills report. Owners pay a whopping 33% in Hong Kong and 27% in Vancouver.
In Dubai, owners spent about 7% of the purchase price in taxes over a five-year ownership period—the best of the cities Core Savills measures apart from Moscow, there the cost is closer to 3%.
7 Mar 2018
Ultra-wealthy residents of Dubai will grow by 60% over the coming decade, refueling the currently depressed luxury property market there, according to a report released Wednesday by Knight Frank.
The city’s ultra-high-net-worth population—those worth over US$30 million—is expected to bloom thanks to Dubai’s foundation as a Middle Eastern hub for corporations and strengthening ties with China. The city already has one of the highest concentrations of millionaires in the Middle East—they account for two-thirds of Dubai’s population, according to the report.
The research on Dubai is part of the global brokerage’s annual “Wealth Report,” covering trends in the living and buying habits of the world’s wealthy.
Since 2014, global and local factors have held Dubai’s prime property market back despite the large population of well-heeled buyers. The oil-price meltdown paired with stricter mortgage regulations and an oversupply of luxury development have caused several years of declining prices in the city. In 2017, prime prices fell 5%, according to Knight Frank.
But recent data points to the beginnings of a recovery, as prime prices bottom out and the government logs increased activity. Luxury transactions were up 6.6% in the third quarter of 2017 and up 5.7% in the fourth quarter, according to the report.
The predicted increase of wealthy residents, particularly a cohort of Chinese, in the United Arab Emirates is expected to help turn around the slumped luxury market in Dubai.
Over the past two years, the Dubai Investment Development Agency has forged closer commercial relations with Shanghai—bringing the wave of new ultra-wealthy in China to Dubai. The number of Chinese worth more than $30 million has nearly quadrupled over the past decade, according to the report.
Where will the newest wealthy live?
Established luxury neighborhoods in Dubai include the man-made archipelago Palm Jumeirah, Downtown Dubai—home to the Burj Khalifa— as well as Emirates Hills and The Lakes, according to Knight Frank. New infrastructure near these prime hubs is expected to strengthen their desirability and improve prices.
10 Mar 2018
I am an Indian citizen and I want to invest in Dubai to secure residency. If I buy property in Dubai, will they give me a lifelong residence visa? What are the criteria to get a visa if I buy an apartment? SS, India
It is not possible for any non-GCC national to get lifelong residency in the UAE, even if they purchase property. While it can be possible for an expat to obtain a residency visa based on property ownership, the rules are very strict and the visas are valid for either six months or two years only. There is no guarantee that anyone buying a property will be granted a visa and they do not permit a person to undertake any form of employment in the UAE.
To make an application, the property must have a purchase price of a minimum of Dh1 million and the outstanding mortgage must be no more than 50 per cent. The applicant must have an income of at least Dh10,000 per month from a verifiable source, but this cannot be not from employment in the UAE. Any application must be made to Dubai Economy and the Dubai Land Department for consideration with visas granted on a case-by-case by case basis – approval is by no means automatic. Visas are issued for up to two years under the current rules. In accordance with standard Dubai rules, applicants must undergo a medical examination and organise their own Dubai Health Authority compliant medical insurance. I would reiterate that a property related visa does not permit an individual to work in the UAE, only to reside here, so if they take up employment the property visa must be cancelled with immediate effect and there is no guarantee that any application will be approved or renewed.
What is the procedure if I want to change jobs? I am on a limited contract visa and have been in my job for six months. SH, Sharjah
Formal notice of resignation is the first step and this should be provided in writing. In most cases 30 days’ notice is required per UAE Labour Law but check your contract as in a few cases a longer period may be required. Someone breaking a fixed contract may also receive an employment ban depending on their level of education and the action of the employer, although this would not apply if changing employer within the same free zone.
As SH will be breaking the terms of a limited contract, he must pay a penalty in accordance with Article 116, which states: “Should the contract be rescinded by the worker for causes not set forth in Article 121, the worker shall be bound to compensate the employer for the loss incurred thereto by reason of the rescission of the contract, provided that the amount of compensation does not exceed the wage of half a month for the period of three months, or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract.” This penalty is roughly equivalent to income for 45 days.
I will soon complete six year of service with my company and have been on a limited contract. I will be leaving and received the details of my end of service gratuity calculations from the HR department and they state that I am entitled to gratuity of 21 days for the first five years and 30 days for the sixth year. From what I have read in online articles, I am entitled to 30 days each year from the first year as I have completed more than five years and I am on a limited contract. HR will not believe me and say I need to show them the law that proves this. Can you help? GB, Dubai
In this situation the HR department is correct. This is covered in Article 132 of UAE Labour Law which states: “The worker having spent one year or more in continuous service shall be entitled to an end of service gratuity upon the termination of his service. The days of absence from work without pay shall not be included in the calculation of the period of service, and the gratuity shall be calculated as follows: 1 – The wage of twenty-one days for each of the first five years of service. 2 – The wage of thirty days for every additional year. Always provided that the total gratuity does not exceed the wage of two years.” A payment of 30 days is clearly for ‘additional’ years, so for those in excess of the first five years. GB is entitled to no more than the HR department has advised.
Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 25 years’ experience. Contact her at [email protected] Follow her on Twitter at @FinancialUAE.
The advice provided in our columns does not constitute legal advice and is provided for information only.
13 Mar 2018
Irrespective of where you stay or the kind of accommodation you have, we can all agree that rent is the single biggest expense each month for any expat resident in the UAE. For Dubai, experts say that at least 40 per cent of a resident’s income goes into paying rent.
A one-bedroom apartment could cost anywhere from Dh50,000 to Dh90,000 per year as rent depending on where you stay. While rents have reportedly been falling across the country, these ranges still apply in most areas.
Is buying worth it? Yes, if you’re planning to be in Dubai for a really long time – upwards of 15 years we would say. Most people in the UAE end up staying longer than they originally thought. So, unless you’re only planning to stay less than 10 to 12 years, buying might be a great option for you.
Comparing the two: Buying vs. Renting in Dubai
For the purpose of this comparison we are using a one-bedroom apartment near the Al Jafiliya area as a case study. For renting, we are using Dh65,000 as our sample price (based on the RERA Rental Increase Index) and Dh1.3 million as the sale price for our off-plan apartment.
As you can see the initial spend for property purchase is almost 20 times that of a rental. However, most of it is down payment, which acts as initial equity for the asset that will be your home.
Yearly expenses for 20 years
The following are the yearly expenses for 20 years in each scenario. We are going to assume that the rent increases by 15 per cent after ten years (easier for calculation) and that payment of mortgage amount stays the same per year (which is the case usually.)
In 20 years, renting could cost you upwards of Dh2.16 million not including utility bills and other amenities. Buying a house spread over the same period of time could cost you upward of Dh1.76 million not taking into account other incidentals and utilities.
In comparison, everything you pay to buy is directly or indirectly towards something in your own name; unlike rent which is payment for a service with undeniable perks of stability, flexibility and no debt issues.
For buying: At the end of 20 years you end up paying less for buying overall even after the initial spend. Your average monthly rent is at a stable low of around Dh4,166. Not to mention that you would then be a proud owner of Dubai property, which could be sold or rented out to earn back all your investment with profits.
The 40 per cent you spend on living in Dubai comes back to you in another form. The loan doesn’t require any collateral other than the property itself.
For renting: Owning property comes with the financial pressure of having to stay and work in the UAE until your mortgage is paid off. Unlike for your home country, this means having valid employment (and residency) to keep your monthly payments going. Selling your property is not as easy as you would think and this means you may not be able to leave at a moment’s notice. The loan or mortgage uses the property as collateral, so in case you can’t pay off the loan, the property goes to the bank.
Disclaimer: This is a guide only and uses approximate figures and current expense items for the comparison. Gulf News is not responsible for any new items of expense being added or changes in fees at any time. The costs and rents used are averages to illustrate the differences.
7 Mar 2018
Dubai-based developer Danube Properties has announced the launch of its 10th project called Jewelz.
The AED300 million ($81 million) project has been announced following the sales success of its previous developments, the developer said in a statement.
Jewelz was unveiled by Rizwan Sajan, founder and chairman of the Danube Group and Atif Rahman, director and partner, Danube Properties.
The new project offers 463 residential units, ranging from studio, and- and two-bedroom apartments, and features amenities including a health club, swimming pool, steam and sauna room, jogging track, and sports courts.
The project dedicates 50 percent space to open areas with an emphasis on greenery and landscapes, the statement added.
Sajan said: “I am extremely proud to announce our 10th project Jewelz next to Miracle garden at Arjan. Dubai is a lucrative and transparent market when it comes to investment. You will get the highest return on investment, high capital appreciation, and ease in doing business and strong economic growth.
“The current property prices are in favour of those who want to buy their own home. It is cheaper for a person to buy a property in Dubai than to rent one, especially if they are planning to settle in the country long term.”
Rahman added that Jewelz takes Danube’s portfolio to AED3.14 billion.
8 Mar 2018
Office rents in Dubai have continued to moderate during early 2018 as occupiers “rightsize” to suit their business needs, against the backdrop of rising inflation and global economic factors, according to a new report.
Cluttons said that while the level of office market activity remains mixed throughout Dubai, its Spring Office Market Bulletin indicates growing maturing and a healthy outlook for the sector.
It also noted that the introduction of VAT has not had any real impact on landlord behaviour so far since its launch in the UAE on January 1.
The report showed that headline rents in the city’s top tier free zones have remained largely steady, bar one or two low quality buildings.
Away from prime Grade A buildings, which remain well let and in high demand, landlords are demonstrating greater flexibility and are largely receptive to rent reductions at renewal, Cluttons said.
Faisal Durrani, head of research at Cluttons said: “Global economic factors continue to have a direct impact on the real estate market in the UAE. In the office market, upper limit headline rents have been affected, with occupiers either sitting tight, regearing leases, or continuing to consolidate operations.”
Just five of 24 submarkets registered minor downward adjustments during the final quarter of last year, with the weakness persisting into 2018, he said, adding: “It is our view that this will continue for the remainder of the year with rents set to fall AED5-20 per sq ft. However, core free zones are likely to buck this trend, with rents holding steady.”
Cluttons’ latest report also indicated that while overall conditions may seem flat, landlords are not yet at the stage where large discounts and extensive incentives need to be offered.
Paula Walshe, director of International Corporate Client Services at Cluttons added: “So far, the introduction of VAT has not had any real impact on landlord behaviour but we are monitoring this closely. While absorbing the 5 percent VAT costs does not appear to have been considered yet, this may well emerge as an option should rental weakness linger into 2019.”
11 Mar 2018
Dubai-based Azizi Developments has said it is accepting pre-qualification applications for Dhs20bn ($5.44bn) of contracts related to new real estate projects in the city.
The contracts come in addition to its current project pipeline, according to the firm, with construction scheduled to commence in two months and be delivered by 2020.
“This will be a tremendous year of growth and expansion for Azizi Developments,” said Mirwais Azizi, chairman of Azizi Group.
“The new tenders are our largest number released so far and will contribute to our already packed portfolio of projects which we aim to deliver on schedule by 2020.”
The company said it is working on more than 200 projects this year including Azizi Riviera in Meydan One and Azizi Victoria in Mohammed Bin Rashid Al Maktoum City.
Last week, the developer said phases one and two of Azizi Riviera would be pushed back from completion in late 2018 to the first quarter of 2019.
Its other projects include Royal Bay by Azizi and Mina by Azizi on the Palm Jumeirah, Azizi Aliyah Residences and Farhad Azizi in Dubai Healthcare City and Azizi Farishta and Azizi Plaza in Al Furjan.
7 Mar 2018
Dubai’s once-booming property market is firmly in a slump.
House prices have been falling in Dubai in recent years, with S&P Global Ratings warning that the trend is expected to continue until at least 2020.
House prices in 2009-2010 plunged more than 50 percent from their peaks, pushing Dubai close to a debt default.
To try and turn things around, officials are planning a series of road-shows in key international markets this year, like the US, Russia and in particular, China.
11 Mar 2018
DUBAI: Dubai-based master developer Nakheel is heading to MIPIM, the world’s premier property summit, for a third consecutive year to showcase a host of real estate opportunities, collectively worth more than US$2.5 billion.
Creator of the world-famous Palm Jumeirah and other globally renowned Dubai real estate projects, Nakheel is in Cannes, France, to encourage more international investors who already account for more than 28,000 Nakheel customers with investments reaching almost $30 billion to become part of Dubai’s growing real estate sector.
Nakheel comes to this year’s show with a new range of real estate investment opportunities at prime locations across Dubai. Among them are residential units some ready for occupation offering rental yields of up to nine per cent, and land plots for commercial, residential or hotel development.
Regarding this year’s show, Sanjay Manchanda, Chief Executive Officer of Nakheel, said, “The figures speak for themselves. Innovative thinking and bold ambition has turned Dubai into one of the most successful and fastest-growing cities in the world.
“Nakheel is proud to play a key role in the city’s achievements and continues to spearhead ground-breaking, landmark developments that set new standards in creativity, engineering and design. Our large and diverse range of existing and upcoming projects is pivotal to further enhancing Dubai’s position as a global hub for living, trade, tourism, leisure and investment. “We are delighted to return to Cannes and honoured to represent Dubai for a third consecutive year. We look forward to building on the success of our previous visits, as we further highlight Dubai’s ever-growing, unrivalled investment opportunities for investment to MIPIM’s highly knowledgeable, influential audience.”
© Copyright Emirates News Agency (WAM) 2018.
10 Mar 2018
Dubai, United Arab Emirates: Dubai Land Department (DLD) has confirmed that it successfully conducted 8,173 real estate valuations worth over AED 287 billion — the highest value ever recorded — in 2017.
According to a report issued by Taqyeem, Dubai’s Real Estate Appraisal Centre, valuations are done for a variety of reasons such as: investor visas, gifted transfer, auction sales, zakat calculations, sale estimates, and company annual audits. Customers include private owners, develpers and government entities.
His Excellency Sultan Butti bin Mejren, Director General of DLD, commented: “Taqyeem relies on the data and information available in DLD’s records, and operates according to advanced standards for valuation. The Center’s valuation work is undertaken with meticulous attention to accuracy, transparency and professionalism, which reflects DLD’s outstanding performance in providing customer services.” DLD’s work is governed by the International Valuation Standards Council (IVSC) that is the world-governing body for valuation.
Property valuation complements many other activities, and helps gauge the growth of investments. Accurate and regular valuations help prevent random prices in the market which leads to reduced speculation.
The valuation contributes to the organisation and management of land values and supports the supply and demand equation, which is used by Dubai’s Rental Dispute Centre to issue judgments based on confirmed figures issued by specialised entities.
Developers can also benefit from the findings of the valuation committee to make well-thought out market presentations, ensuring that they create campaigns based on reasonable long-distance pricing forecasts.
About Dubai Land Department:
Dubai Land Department (DLD) was found in May 1960 to establish the most prominent real estate sector in the Middle East and in the world.
DLD provides outstanding services to all its customers whilst developing the necessary legislation to propel the real estate sector in Dubai, organizing and promoting real estate investment, and spreading industry knowledge. DLD seeks regional and worldwide innovation in real estate with the aid of its active organizations that include: Real Estate Regulatory Agency, the regulatory arm, Real Estate Investment Management & Promotion Center, the investment arm, Dubai Real Estate Institute, the educational arm, and Rental Dispute Center, the judicial arm.
11 Mar 2018
The Dubai Land Department (DLD) conducted 8,173 real estate valuations worth more than AED 287 billion ($78.1 billion) in 2017, the highest value ever recorded.
According to a report issued by Taqyeem, Dubai’s Real Estate Appraisal Centre, valuations are conducted for a number of reasons, including for investor visas, gifted transfers, auction sales, zakat calculations, sale estimates and company annual audits. Customers include private owners, developers and government entities.
“Taqyeem relies on the data and information available in DLD’s records, and operates according to advanced standards for valuation,” said DLD director general Sultan Butti bin Mejren.
“The centre’s valuation work is undertaken with meticulous attention to accuracy, transparency and professionalism, which reflects DLD’s outstanding performance in providing customer services.”
Additionally, the DLD noted that property valuation helps gauge the growth of other investments, and helps prevent random prices in the market.
The valuations also contribute to the organisation and management of land values, and supports the supply and demand equation used by Dubai’s rental dispute centre to issue judgements based on confirmed figures.
11 Mar 2018
Dubai is among the world’s top destinations for foreign direct investment (FDI) in the real estate market, according to new research from consultants JLL.
In a new report entitled “World Cities: Mapping the Pathways to Success”, JLL identified Dubai as one of a new group of ‘hybrid’ cities that have attributes of either ‘emerging world cities’ or new world cities’.
According to the report, Dubai has been making progress in improving real estate transparency, and as a result has seen high levels of foreign investor activity in the last cycle.
The report identified Dubai – which was named the most transparent real estate market in the Middle East in JLL’s 2016 global real estate transparency index – was termed ‘hybrid’ due to a number of initiatives designed to improve transparency and after witnessing a transformation in the quality of its commercial real estate market.
‘Hybrid’ cities, as defined in the report, are medium-sized and compete in specialised markets, which benefit from access to large domestic markets. They are durable in the medium-term and are among the top real estate investment destinations, as seen in the case of Dubai.
Additionally, ‘hybrid’ cities have a “superior live-ability” equation compared to their national and regional peers, JLL noted.
“Dubai and Abu Dhabi top the list of being termed hybrid cities,” said Craig Plumb, JLL MENA’s head of research. “They share characteristics, aspirations and priorities in terms of the specialisms that they nurture, the talent and businesses that they attract, and the style of quantity of real estate required.
“With this in mind, it makes sense to assess cities in the Middle East as it allows room to evaluate the competitiveness of the market,” he added.
7 Mar 2018
Dubai: Developers in Dubai building homes worth Dh10 million and more have reasons to hope – global high networth investors are once again renewing their interest in such super-prime offerings. And these funds will have less of the speculative flavour about them.
“The luxury real estate investor base in Dubai is twice as diverse as in London or New York – that breadth of demand will provide some stability,” said Liam Bailey, Global head of Residential Research at Knight Frank, the London headquartered consultancy which issued its annual wealth report on Wednesday. “There had been a number of property markets worldwide that had gone through a challenging period in the last couple of years. Dubai has had issues on pricing and we had seen the same thing happening in London.
“But alternative investments (including real estate) continue to take in demand from wealthy individuals. We are living in extremely uncertain times (rife) with generational conflicts rather than of the national kind. And the best safe haven in such times is real estate.”
In Knight Frank’s rankings, Dubai is placed in the 85th spot among the top 100 cities for luxury real estate, with Delhi and Bengaluru occupying the 83rd and 84th spots. Dubai’s top end of the residential market saw prices decline by 3.3 per cent over a 12-month period up to December last, while Abu Dhabi, which is in 95th place, saw a decline of plus 10 per cent.
At the top of the table are the Chinese city of Guangzhou, where values had shot up 27.4 per cent, and Cape Town, where luxury residences enjoyed a 19.9 per cent gain.
The re-entry of wealthy investors into Dubai’s real estate scene has a lot to do with the still soft pricing. “Dubai still has some way to go before it rates as a maturing market,” said Bailey. The investor interest is not just not resonating in the residential space, but even underpins commercial assets such as industrial property.
“Australia and New Zealand are the other markets that are well placed in drawing more global investor interest. Even though from a domestic buyer’s perspective, both are already priced too high.”
That a number of high-end developments are being readied in Dubai should keep investor interest in good order. If the Bulgari-branded mixed-use development off Jumeirah was the focal point for such demand last year, the likes of Bluewaters and Nikki Beach will sustain inward interest. And so will the Atlantis Residences, One Palm (with its Dh102 million penthouse), and all of the villas in MBR (Mohammad in Rashid) City in clusters such as Dubai Hills Estate and the Hartland.
According to Maria Morris, Partner at Knight Frank, “Dubai’s prime real estate is going through a transition and there are now various opportunities that were not there even five years ago.”
And the rush by developers in the last two years to come out with more mid-market options means there is far less chance of an oversupply happening at the prime end. Developers holding ready stock or building new ones priced in the tens of millions needn’t worry – there are buyers out there.
In Dubai, luxury is still a bargain
* Someone with $1 million to spend will find that it can fetch him 138 square metres of luxury real estate in Dubai. The same in Monaco would only get 16 square metres, 22 square metres in Hong Kong, and 25 square metres in New York, according to Knight Frank’s Wealth Report.
* The report names the Palm as among the “peak performers”, alongside Sydney’s Forest District and Shanghai’s Hongqiao CBD. With the development of The Pointe and Nakheel Mall, offering some 5.9 million square feet of entertainment, dining and retail, the appeal of the (Palm’s) stem is set to broaden. A two-bedroom apartment starts at $750,000, while garden homes and villas start at US$3 million, says the report
6 Mar 2018
A handful of developers and landlords in Dubai are going down the cryptocurrency route in accepting Bitcoins as a mode of payment from investors/tenants. What’s more, a few are even offering discounts in project costs for buyers paying with cryptocurrency. Clearly, in a subdued sales market, industry players are thinking out of the box to target crypto investors and help divest their wealth into tangible assets.
The volatility displayed by Bitcoin at the start of the year when it soared to $20,000 and currently trading above $11,000 can be a dampener for anyone looking to close a property deal in that currency.
“There is little evidence to suggest that cryptocurrencies are getting widespread usage in the real estate market, beyond the one-off announcements that have been made. This is obviously due to the volatile price nature these crypto assets have witnessed, as well as a wide series of warnings [including from the UAE Central Bank] that have repeatedly cautioned investors from using the same,” says Nasser Malalla, senior partner at the law firm of NP Associates.
The UAE Central Bank has issued warnings against trading of any digital currency as it hasn’t given any licences for such currencies. As per sub-section D.7.3 Provisions for Virtual Currencies of the Regulatory Framework for Stored Values and Electronic Payment Systems published January 1, 2017: “All virtual currencies [and any transactions thereof] are prohibited”. This is probably due to the speculative nature of this medium of exchange.
“It is our understanding that investors who allegedly purchased properties using cryptocurrencies, as per some media reports, did not make a direct payment using the technology. Rather, it was the equivalent value of the cryptocurrency in UAE dirhams,” reckons Haider Tuaima, head of real estate research at ValuStrat.
“We haven’t actually brokered any agreements where cryptocurrency has played a part. From anecdotal evidence, it has come into the market, but only at a very marginal level. There are too many issues with it at the moment, first and foremost its volatility. It’s hard to structure a deal on something that can fluctuate in value so much from one day to the next – how do you set the value? On top of this, to actually transfer Bitcoin is still quite a complex and convoluted process and it’s not a system that can handle a great number of transactions in one day. So to make it scalable for more regular usage would require a lot further development,” observes Lewis Allsopp, CEO of Allsopp and Allsopp, a Dubai-based brokerage firm.
Dubai became one of the first cities in the world where residential real estate could be bought and sold in Bitcoin or similar digital currencies when Aston Plaza and Residences in Dubai Science Park announced that its off-plan units could be purchased using digital currencies in September 2017.
Recently, Samana Developers, a Dubai-based developer, offered a 7 per cent discount to buyers of homes in its maiden project who want to make payments through cryptocurrency. MAG Lifestyle Development also said it is ready to accept payments in Shariah-compliant cryptocurrencies, including OneGram (backed by a gram of gold). The developer also announced in December 2017 a 5 per cent discount for digital buyers in any of its 8 current real estate projects.
The Star Business Centre, which operates and leases fitted out offices, confirmed in January that it would accept cryptocurrencies as a mode of payment for services rendered. Its tenants can pay rents and service charges by using digital currency along with the traditional payment systems.
“At the present moment, it appears as if this is another tactic by which developers can distinguish themselves, and is unlikely to go mainstream until and unless crypto assets themselves become more widespread in their usage,” adds Malalla.
Cryptocurrency usage in properties is starting to gain traction in Dubai, however, it is yet to go mainstream. “This would hinge on local regulations, credibility of companies providing related products/services and willingness of people to adopt the innovation,” says Murtaza Khan, CEO of Etherty, a blockchain-based, real estate-focused trading platform.
“I find it hard that a developer, given the enormous challenges in real estate development and the capital pumping business it is, would ever speculate with his product using a cryptocurrency dealing,” comments Sailesh Israni, MD, Sun & Sand Developers Group.
“Investors should conduct enough diligence before investing. It may sound like a decent marketing opportunity for developers by using the latest technological advances to gain efficiencies and reach wider audiences, but it’s more than that. Developers have realised that there is a fast-growing community of crypto-investors – a lot of them have become very rich in the last few years, and there are very few options for them to spend their newly-earned wealth. Since real estate is a lot more stable investment, this is becoming a massive market and a lot of developers will be vying for attention from these investors who are looking to diversify their portfolios by offering them deals and payment options that involve crypto-currencies,” adds Khan.
Until regulation is released to control cryptocurrencies in the UAE, most investors have decided to stay on the sidelines despite the curiosity these crypto assets have attracted, say market observers.
“Clearly, given the volatility, the investor base that it has garnered has been for the most part speculative,” says Malalla.
“We need to look at the technology behind Bitcoin and other cryptocurrencies. The technology that cryptocurrencies use will be what plays a big part in rent and purchase payments. Currently, it’s still in a very embryonic state, so we need to wait for the technology to evolve and more players to come to the market before it starts to play a larger part in the property market,” suggests Allsopp.
7 Mar 2018
ARADA has announced that one of the world’s most prominent architecture practices, Zaha Hadid Architects, will design the Central Hub, the centrepiece of Aljada, the developer’s new Sharjah mega project.
Designed with environmental considerations integrated throughout the masterplan to minimise the consumption of resources, the winning entry conceptualises the first moment a water droplet strikes the earth’s surface, captured in an array of elliptical buildings designed to channel prevailing winds into civic spaces and courtyards to facilitate cooling during the summer months.
The central observation tower is surrounded by public squares that incorporate water features irrigated by recovered and recycled water, while tensile canopies will sustain a microclimate at ground level for verdant gardens featuring species native to the region.
The first phase of the Central Hub, which will include the opening of ARADA’s sales centre, will be launched in the last quarter of 2018, a statement said.
Sheikh Sultan bin Ahmed Al Qasimi, chairman of ARADA, said: “Zaha Hadid Architects’ integrated design approach matched our vision for Aljada’s Central Hub as an interconnected destination. This approach is synonymous with ARADA’s mission to develop rewarding and engaging communities, building the Sharjah of tomorrow.”
The heart of the AED24 billion ($6.8 billion) Aljada mixed-use development, he said the 1.9 million square foot Central Hub will be a major destination for tourists and residents.
The Zaha Hadid Architects design for the Central Hub will incorporate the use of treated wastewater to allow the vegetation in the precinct to flourish, while the architecture will incorporate active and passive measures to lower the demand for indoor cooling, he added.
Aside from the ARADA sales centre, the first phase of the Central Hub will also include an adventure activity zone, a food truck destination showcasing home-grown brands, and outdoor events spaces.
Aljada was unveiled by Sheikh Dr Sultan bin Muhammad Al Qasimi, Ruler of Sharjah, last September.
In January, ARADA secured a AED1 billion financing facility from two UAE banks to help fund the development of Aljada, and also announced that CH2M had been awarded the infrastructure design contract for the project.
Delivered in phases starting in 2019, construction on Aljada will begin in the first quarter of 2018 and the entire project is expected to be completed by 2025.
7 Mar 2018
Abu Dhabi boasts the highest number of households earning more than $250,000 in the region, according to a new “Wealth Report” from Knight Frank.
According to the report, Abu Dhabi has 270,686 households making more than a quarter million dollars, a number which is expected to grow seventh fastest globally to 426,890, overtaking London’s 382,807 by 2027.
In Dubai, 245,272 households were found to earn more than $250,000, which is expected to increase by 36,432 by 2027. In Saudi Arabia, Riyadh and Jeddah account for 198,789 and 130,849 households making above $250,000, respectively.
Globally, over the course of the next five years the Indonesian capital of Jakarta is set to grow the most, with 223,447 households set to break the $250,000 threshold, followed by Cairo with 152,643.
New York topped the table in every ranking, with London in second place overall. Of the top 20 cities, North American cities made up the top 10, with Asian cities – most notably Singapore – occupying five spots.
“This year’s index produced some very interesting results with regard to the projected growth of wealthy households around the world that will be exciting to track,” said Liam Bailey, global head of research at Knight Frank. “However, North America’s domination of the current household wealth tables is unequivocal. Although the economic powerhouses such as New York and London dominated the overall rankings again, it is interesting to note the power of other US cities.”
7 Mar 2018
The number of ultra-high net worth individuals (UHNWIs) in Dubai will grow 60 percent by 2026, according to a Dubai-specific “Wealth Report” from Knight Frank.
According to the report, Dubai experienced a 12 percent increase in UHNWIs between 2015 and 2016, outpacing other financial hubs such as New York, London, Hong Kong, Singapore and Tokyo.
The report credits the expected increase in UNHWIs to a rapid population increase of 76 percent in the decade to 2016, as well as an additional 15 percent increase expected by 2026.
Additionally, significant infrastructure projects and new neighborhoods associated with Expo 2020 Dubai have made the emirate an increasingly attractive destination for investors.
“Arguably, no city has seen such a rapid transformation as Dubai,” said Liam Bailey, global head of research, Knight Frank.
“The speed of growth and expansion has brought more volatile property market cycles than in other more established cities, but every cycle helps create a more mature investment environment.
“The opportunities arising from this growth are significant, a rapid growth in population has opened up investment prospects across residential, industrial, retail, office and leisure,” he added. “That rapid change creates opportunity for real estate investment.”
Additionally, the report noted that while there has been a steady long-term increase in prime property values roughly in line with other global hubs, Dubai remains relatively affordable, with $1 million being enough to purchase 138 square-metres of prime residential property, compared to 16 in Moscow, 22 in Hon Kong, and 28 in London.
The larger global Wealth Report, launched concurrently with the Dubai-specific report, found that New York tops the tables in every ranking, followed by London. North American cities made up 10 of the top 20, with Asian cities – most notably Singapore – occupying five spots.
1 Mar 2018
Bahrain has launched a new regulatory authority to oversee its real estate market, with the aim of improving foreign investment, according to its CEO.
According to Sheikh Mohammed bin Khalifa Al-Khalifa, CEO of Real Estate Regulatory Authority (RERA), the authority’s first priority will be the licensing of real estate service providers and off-plan sale projects.
RERA’s scope of responsibility will cover the licensing of not only real estate professionals, including developers, brokers, and sales agents, but also developments, such as the advertising of off-plan projects, Al-Khalifa elaborated.
The launch of RERA coincided with the implementation of Law No. (27) of 2017, which decrees that all real estate professionals obtain a licence from RERA by 31 August, 2018 to avoid being subject to penalties, Bahrain News Agency (BNA) reported, quoting Al-Khalifa, who made the announcement during a press conference.
In addition to providing licensing services, RERA will offer training and development programmes for real estate professionals.
“RERA is committed to building a stronger real estate market,” Al-Khalifa said.
“Enhancing the efficiency of the real estate sector is our primary focus, and we are confident that by safeguarding the interests of consumers, investors, brokers, developers, and all stakeholders in the market, RERA will make an important contribution to Bahrain’s economic growth and increase foreign investment.”
5 Mar 2018
The Rental Disputes Centre (RDC), the judicial arm of Dubai Land Department, has received a donation of AED500,000 ($136,000) from Emirates Islamic Bank to support insolvent tenants in rental claims disputes.
The donation will be used to pay the dues in difficult cases, said Judge Abdulqader Mousa, director of the RDC, in comments published by state news agency WAM.
He said: “We would like to thank Emirates Islamic Bank for this noble humanitarian initiative, which will help us to achieve more stable relations between landlords and tenants, thereby sustaining Dubai’s attractive real estate environment.”
Mousa added: “The RDC has assigned a specialised committee to study the families’ situations and identify their circumstances. In 2017, we received many similar donations that are in line with the spirit of the ‘Year of Zayed’ in the UAE.”
Awatif Al Harmoodi, general manager of operational quality & processes at Emirates Islamic Bank, said: “We at Emirates Islamic Bank are fully committed to supporting the ‘Year of Zayed 2018’ initiative launched by President His Highness Sheikh Khalifa bin Zayed Al Nahyan.
“We focus on a range of programmes and events that are designed to provide support and assistance to eligible groups in the UAE community in line with our corporate social responsibility, charity and humanitarian policy.”
7 Mar 2018
Deciding to retire at the age of 48 was a decision David Cox made quickly.
Working as an accountant in the UAE construction sector, where he says business continued to be difficult in 2011 and 2012 following the global financial crisis, had taken it out of him.
And one day he had simply had enough.
“I said ‘do I really have to put up with this? I had this light bulb moment where I thought, ‘maybe I don’t, there is an option to stop’,” says the Briton, who first moved to the UAE 12 years ago and quit his job in January last year.
Mr Cox now documents his early retirement on his blog I Retired Young, which details exactly how he manages his finances as a retiree, including breakdowns of his monthly and annual finances.
He will be also sharing his experiences on Saturday in Dubai at a talk entitled” I Retired Young – My Journey to Financial Freedom & Early Retirement in Dubai” hosted by SimplyFI, a non-profit community of personal finance and investing enthusiasts, at Abu Dhabi University’s Dubai campus.
However retiring early is not possible for everyone. As a diligent saver, Mr Cox, now 49, had the financial means to quit his career; in addition his wife, a teacher, still works full-time with her package covering the accommodation on their two-bedroom apartment in Sports City, which the couple moved to from a villa last June to cut costs. Another advantage is that his children have moved out of home, with his 22-year-old daughter now employed and his son, 19, studying at university.
“We pay for the costs associated with university (tuition, accommodation and a living allowance), for which we have a fund set aside, so we don’t count it as our normal day to day costs,” says Mr Cox, who adds that his wife was supportive his decision to retire young. “As long as I’m happy and we have enough money to live the life we want then she’s fine with it.”
While in the past he had joked about retiring early, he says he had not necessarily been saving toward that goal.
“I have always been a bit of a worrier,” he says. “So I have kind of tried to save money so if something goes wrong we will be okay.
“And in hindsight some of those thought processes were a bit daft, because I’ve always worked on a catastrophic basis that if I lose my job, it is a complete disaster, but of course you can get another one. I always worried about that so I put money away.”
However, he did not have a regimented savings plan with a certain percentage of his salary set aside each month – instead, he and his wife strove to live a “balanced lifestyle,” where they could do what they enjoyed, but never to excess with any sort of bonus always squirrelled away.
In 2006, with his savings gradually building up, he decided to build a property portfolio, taking a large chunk from the proceeds of the family home in the UK, that had not rented out well since their move to the UAE.
The first investment was a house in St Neots in Cambridgeshire, UK, which they then rented out, with the rest used as a down payment for a house in Dubai in The Meadows – a decision he describes as the “most scary thing” which cost him many nights’ sleep.
“I was so terrified. We didn’t have to buy it,” says Mr Cox. “The property value went up and then it crashed. And we could have panicked and sold before now. And we didn’t, so we made nearly Dh3 million on that property. We sold about three years ago, literally the week before prices started going down. And I think it’s probably gone down 20 per cent or 25 per cent since.”
The couple then used the proceeds of the sale of the house in The Meadows to buy five more rental properties in the UK, and later dipped into savings to purchase another five. In total, they now own 11 properties – six of which are in St Neots, one is in the Midlands, and four are located in the north of England, an area they do not know but bought there based on the rental returns they would offer. They have purchased a 12th property – a ski apartment in France – which is currently under construction that they plan to rent out when they are not using it themselves.
“We did have some mortgages in the past but we paid them off as soon as we could. I really don’t like debt,” says Mr Cox, adding that the portfolio provides the family with a monthly income of £5,500 (Dh27,969), £3,700 of which they use to sustain their lifestyle.
Mr Cox now writes about his retirement experiences on his blog I Retired Young.
In addition, Mr Cox holds a substantial amount in mutual funds, low-cost Vanguard funds and stocks and bonds – though he does not want to reveal the value of his holding – plus another £50,000 in cash.
It was thanks to this financial portfolio, that he felt comfortable enough to retire, but he says he still worried whether he could actually afford to give it all up and what he would do with his spare time.
“I thought it was going to be really expensive because I would have 10 hours every day where I would need to entertain myself and that would cost money,” he says.
But instead, it cost him less, partly because the family no longer needed two cars any more and because he has made a number of lifestyle adjustments to ensure they have enough. These include downsizing their home and swapping Spinney’s for Carrefour for the supermarket shop.
His spare time is now spent writing his blog and managing the property portfolio. He has also come to realise he does not need to go skydiving and scuba diving every day as he is comfortable filling his time with chores and meeting friends.
“I spend more time on my blog,” he says. “I meet up with friends for coffee, chats and cycling; I do the household chores and I plan the four months of travel we have coming up in the second half of this year.
“I still get up and start doing stuff at 9am until 5pm, so it’s a bit like work,” he says. “Everything I do I choose to do. Sometimes I clean the toilets or the bathroom, and people say that’s terrible but don’t 99 per cent of people in the world do that? It’s just normal.”
Mr Cox does not tell others he has retired as it makes him feel old, so when he is asked what he does he tells people he is a lifestyle specialist, “because I am specialising in my own lifestyle,” he explains.
So would he ever go back to work? Perhaps, he says, if work means making money, but never to do anything of a corporate nature.
“There is too much that I don’t like about that type of life,” he says. “But I can see me doing work, but it will be work that I want.”
Mr Cox could see himself and his wife renovating houses in the UK. Whatever it will be, it will not involve tying himself to anything – not even as a freelance consultant.
“If you become self employed or maybe a consultant, you may end up being tied to that and trying to make a success of that.”
Besides, he does not ever foresee a need to earn any more money. They have enough to sustain their lifestyle for the rest of their days.
“We set our budget this year and we are going a little bit over, but in reality if we spent double I think we would probably still be okay.”
David Cox’s December expenses
Before David Cox gave up work he used to be more relaxed about his expenses. Now, every dirham is accounted for.
He publishes his monthly expenses on his blog to show others how it can be done. His post about his December costs – see the table – shows how the family’s increased spending due to the Christmas period resulted in overshooting the budget by $1,989, at $6,547 in of actual expenses, compared to the budget of $4,567.
“Christmas increased our costs. We bought gifts (for 19 people) and also our grocery bill skyrocketed,” he wrote on his blog.
“Our kids were back home, so we shopped for a family of four again, and also bought treats and more expensive foods. My routine went out of the window and we mostly shopped in the expensive supermarket which costs 20 per cent – 25 per cent more … ouch!”
While Mr Cox acknowledges that the costs were high in December, he says that is “the reality” of life.
“You get some higher months and some lower months. December happened to have Christmas gifts, Christmas groceries, car insurance renewal and sick pets.”
The post also reveals how the family overspent against its budget in 2017 – with actual costs standing at £50,111 ($61,853), compared with a budget of £44,400 ($54,804). “That doesn’t sound good, it’s 13 per cent over budget,” Mr Cox wrote. Asked how he feels about missing his financial targets, Mr Cox says his budget for the expense target is conservative as it is less than the passive income they receive from their rental properties.
“Therefore, if we overspend a little, it’s not a problem,” he says. “I also think that Dubai can be quite an expensive place so that pushes the spend up now, but we will see some reduction when we relocate in the summer.”
7 Mar 2018
The average price of prime residential property in Dubai – defined as the sector’s most expensive 5 per cent sub-segment – dropped 3.3 per cent between November 2016 and November 2017 amid subdued demand, according to Knight Frank’s 2017 Wealth Report.
But the number of real estate transactions rose during the period, with prices set to lift as the Emirate’s economy strengthens and the number of Dubai-based ultra-wealthy individuals rises, the real estate consultancy predicted.
“Dubai’s residential market has moved through a number of phases over the past five years. Strong price growth was replaced by price falls, but the latest data points to a recovery in demand and the beginning of a new pricing cycle,” said Taimur Khan, Dubai-based senior analyst at Knight Frank.
The price drop for Dubai’s prime residential segment was shallower than for other Arabian Gulf markets over the period, the consultancy’s annual Wealth Report showed. Riyadh’s prime prices fell 5 per cent, Abu Dhabi’s by 10 per cent, and Doha’s 15 per cent.
Prime residential property values in Dubai have risen by 5.1 per cent over the five-year period to the end of 2017, with the emirate expected to lure more ultra-wealthy buyers in the years ahead with its strategic location and improving infrastructure.
The Emirate will witness a 60 per cent surge in the number of ultra-high-net-worth individuals (those with personal assets of $30 million or more) by 2026, according to the report.
“Factors such as relative affordability, ownership costs and the influence of currency fluctuations make Dubai attractive to wealthy residents from across the UAE, the wider Asian region and further afield,” said Lord Andrew Hay, global head of residential at Knight Frank.
Residential sales prices have in general declined over the past two years in Dubai amid weak economic conditions. Average apartment sales prices declined by 2 to 6 per cent year on year in the six months between April and October 2017, according to a Propertyfinder.ae report published in December.
Villa sales prices saw steeper declines over the period, of up to 9.3 per cent and 8.2 per cent in midmarket areas including The Meadows and Dubailand.
But prime sales prices were more resilient, Propertyfinder added, with villa prices in Emirates Hills and Jumeirah Park remaining stable over the period.
“The prime and super-prime markets are to some extent cushioned from [external market volatility] due to lower levels of supply,” Liam Bailey, head of residential research at Knight Frank, told The National.
Knight Frank’s report said established prime areas such as Emirates Hills, The Lakes, Palm Jumeirah and Downtown Dubai have continued to attract occupier and investor interest.
“Demand in those areas is expected to strengthen, the report said, underpinned by infrastructure investments including at Nakheel Mall on Palm Jumeirah, Dubai Mall, and other projects to enhance connectivity in Downtown Dubai,” the report said.
“The proximity of these locations to the new developments for Expo 2020 Dubai should help to underpin a gradual price recovery in prime residential markets. We expect this will be spurred by the weaker Emirati dirham, which depreciated by 6.8 per cent in 2017.
The volume of transactions of prime residential property in Dubai were up 6.6 per cent year on year in the second quarter of 2017 and 5.7 per cent in the third quarter – the first consecutive annual increase since the second quarter of 2013, and an encouraging sign, Knight Frank said.
What’s more, despite a steady long-term increase in prime values, Dubai remains comparatively affordable. With $1 million, investors can purchase 138 square metres of prime residential property in Dubai, versus 16 square metres in Monaco, 22 in Hong Kong, 25 in New York and 28 in London, the report said.
Prime properties in Dubai are approximately 40 per cent less expensive than Singapore and 50 per cent less than Moscow and Paris, said a separate study from consultancy Core Savills on Tuesday. “Prime and ultra-prime property prices in Dubai are now among the lowest of any comparable global hub,” the study said.
5 Mar 2018
Opportunities for Dubai’s real estate buyers have never been so wide after several years of significant off-plan launches, combined with softening prices of ready developments across all areas of the emirate. This scenario peaked last year, with over 40,000 units from new off-plan projects being launched. The majority of those homes were positioned in the mid-market segment, reflecting a shift in the market’s focus over the last five years.
The changing characteristics of the local market has created growing opportunities for first-time buyers to purchase a starter home, with developers aiming to appeal to long-term residents who have traditionally rented their homes. There are also more options for first-time investors, with flexible back-weighted payment plans, making it easier for potential purchasers to start their real estate portfolios. Similarly, for the more seasoned investors, access to payment plans has facilitated a market for calculated investing, with comparatively cheap finance and options to extend payments years after actual completion of units. This has been incredibly appealing for investors with a long-term vision and are willing and capable of a long holding period of their real estate assets, thus benefiting from rental income before full payments are made.
Developers are very aware that investors are maturing along with the market, and they are now selling to a more knowledgeable market with greater transparency. At the same time, there is also far higher competition and, therefore, they are having to incentivise sale. These incentives predominately include flexible payment plans, sharing of the 4 per cent Dubai Land Department registration fee and in some cases even guaranteed returns.
The diversity of the buyer pool has also driven developers to become more creative in their design, sales and marketing strategies, and their overall vision for their developments, keeping in mind the end user’s experience, whether that is the owner-occupier or renter. While investors will focus on the price per square foot, owner-occupiers are more sensitive to the unit price, and what value is attached to that price.
Investors focus on the price per square foot; owner-occupiers are more sensitive to the unit price
Developers are maintaining the positioning and quality of the development via more efficient design of buildings, as well as the individual units, innovative building and fit-out materials, as well as adding value through amenities, facilities and enhancing the living experience within the development and master plan.
Although buying an off-plan property comes with potential risks, including completion and handover delays, the volume of sales for these assets far exceeds that of completed properties. This reflects the market’s appeal to speculative investors, and the more constrained input of end users. International buyers in particular are being enticed by the availability of incentives, mainly those which ease the financial burden on the buyer. The inclination towards off-plan property was highly evident last year, when the market recorded a huge 60 per cent increase in sales, with much of the growth occurring in the number of villa transactions.
There has also been a slight move towards more market-driven unit typologies and developments, as developers expand their buyer profile pool by targeting new international markets. With increased competition, developers are looking towards global practices to increase their sales and interaction with buyers in the local markets. They are continuously exploring ways to facilitate the buying process, with some developers already introducing online reservation and booking payment for a property. With Dubai’s vision to always be ahead of the curve in terms of technology, we could expect developers to have the full buying process online and even the use cryptocurrencies in the future.
5 Mar 2018
Dubai: Emaar Development has launched a collection of super-luxury homes at The Grand, located near the heart of Creek Island in Dubai Creek Harbour.
At 62-storeys, the high-rise features one-, two- and three-bedroom apartments, four-bedroom penthouses, and podium-level townhouses with private gardens.
“Dubai Creek Harbour is one of the most sought-after lifestyle destinations in the city,” said Ahmad Al Matroushi, managing director of Emaar Properties. “With tremendous economic value to be generated by the new global icon, Dubai Creek Tower, and a wide range of retail, F&B and leisure attractions, it is truly a city of the future.”
5 Mar 2018
► Cost: Dh1.2 billion
► Size: 17 million sq ft
► 25 metre high crystal dome straddling the mall’s Monorail station
►15-theatre VOX Cinemas complex
► 350 shops, restaurants and leisure attractions
► 5 floors
► 3 underground parking levels
► 4,000 parking spaces
► 2 fountains
► 2 waterfalls plunging 65 ft into the mall
► Fine dining roof plaza
► Spectacular views of The Palm Jumeirah island, Arabian Gulf and Dubai skyline
The Dh1.2-billion Nakheel Mall is rising at the heart of the Palm Jumeirah. The mall will also be the access point for the 240-metre ascent to the public viewing deck at The Palm Tower, Nakheel’s 52 storey hotel and residential project, rising adjacent to the mall.
Dubai: Construction of Nakheel Mall, the Dh1.2 billion retail and entertainment destination at the heart of Palm Jumeirah, is now 85 per cent complete, with fit out also under way at major outlets at the mall, master developer Nakheel said on Monday.
The news comes as a giant, 600-tonne tower crane is removed from the construction site, signalling a major milestone in Nakheel Mall’s progress.
All under and above ground floor and ceiling work has been completed, with interior works, such as granite and glass fixing, well on track.
— Dubai Media Office (@DXBMediaOffice) March 5, 2018
Meanwhile, the centre piece of the mall – a 25 metre high crystal dome that will straddle the mall’s Monorail station – is also taking shape.
Inside the mall, fit out of the 60,000 sq ft, 15-theatre VOX Cinemas complex has begun, with more retailers due to start fitting out shortly.
Nakheel Mall, part of Nakheel Malls’ Dh16 billion expansion that will take its total retail space to over 17 million sq ft, has 350 shops, restaurants and leisure attractions across five floors, plus three underground parking levels with 4,000 spaces.
Features include two fountains, two waterfalls plunging 65 ft into the mall and a fine dining roof plaza with spectacular views of the island, Arabian Gulf and Dubai skyline.
Access to public viewing deck at 240 metres
The mall will also be the access point for the 240-metre ascent to the public viewing deck at The Palm Tower, Nakheel’s 52 storey landmark hotel and residential building, also at an advanced stage of construction.
The Palm Tower comprises a 289-room St Regis hotel and 432 luxury apartments, topped off by one of the world’s highest infinity pools on the 50th floor.
Above that is a 51st storey restaurant complex, with the rooftop viewing deck, offering awe-inspiring views across island, sea and city views on the 52nd level.
Other large-scale projects in Nakheel Malls’ growing portfolio include Deira Mall, the Middle East’s largest mall, for which an Dh4.2 billion construction contract was signed last month; Deira Islands Night Souk; Al Khail Avenue; The Circle Mall; Nad Al Sheba Mall; Warsan Souk; Discovery Gardens Mall; and major expansions to Ibn Battuta Mall and Dragon Mart. Nakheel Malls currently has 4.5 million sq ft of retail space in operation, with another 12.5 million sq ft on the way.
Nakheel Mall is one of a host of new Nakheel developments — across the residential, retail, hospitality and tourism sectors — on Palm Jumeirah.
Among the others are the iconic PALM360 two-tower hotel and residential complex featuring a Raffles hotel, Raffles-branded residences including 12,000 sq ft penthouses, and the world’s largest sky pool.
The Pointe, The Palm Promenade, Palm West Beach, The St Regis Beach Club and Palm Beach Residences are also under construction or development.
24 Mar 2018
Dubai is a city that never fails to run out of success stories. Several expats tried their luck here and it all paid off eventually. Some win millions of dirhams in raffles, the others get kilos of gold and there are some who – thanks to their financial knowledge were able to successfully navigate their way into achieving good fortune. The latter is the case of Gina Gelvero – a Filipina expat based in Dubai who has been in town for more than a decade.
Gelvero’s story starts like most Filipino expat stories in Dubai: Financially illiterate and satisfied with getting their salary. During her early years in Dubai, Gelvero didn’t know much about investing her hard-earned money into another source of income; the Filipino Times reports.
It was only after thirteen years that she wised up and started buying apartments in the Philippines.
Her efforts payed off and Gelvero now owns three apartments in three different cities. She has been paying for them on a 24-month instalment basis at zero interest rate.
Currently, Gelvero is looking into purchasing another apartment in another city in the Philippines. She said that she plans to get six more apartments within 10 years – that’s one apartment every single year!
When asked about her decision to invest, Gelvero said: “I wanted to have passive income so even if I don’t work, I will have something to rely on financially. We should not just depend on our monthly salary. What if you suddenly lose your job?”
Gelvero plans on renting out the apartments.
3 Mar 2018
Indian nationals, who form the largest foreign investor group in Dubai’s real estate market, have bought properties worth more than AED83 billion ($22.6 billion) in the last five years, according to new statistics.
The spending power – from 2013 to 2017 – has been revealed in figures compiled by Dubai Land Department ahead of the Dubai Property Festival taking place in April.
Indians invested AED15.6 billion in Dubai’s real estate in 2017, AED12 billion in 2016 and AED20 billion in 2015 – the highest in a year, DLD said.
Sultan Butti bin Mejren, director general of Dubai Land Department said: “Dubai Property Festival is one of our initiatives and the latest platform to promote Dubai real estate, reflecting our mission to make Dubai the best destination for investment, ideal choice for business and living. We are working with all stakeholders in the real estate sector to make the festival a rewarding opportunity for all.”
Indian nationals form the largest expatriate population in the UAE and they are also the largest foreign owners of business establishments in the country.
Most of Dubai’s residential stock of 490,000 homes is occupied by the Indian expatriate population. Indian expatriates mostly rent homes although tens of thousands of freehold homes are also owned by Indian nationals.
“Indian nationals are the largest group of foreign investors in Dubai’s real estate and as both the UAE and India strengthen strategic relationship, we see a greater synergy and increased investment by Indian nationals in UAE,” said Dawood Al Shezawi, head of the Organising Committee of Dubai Property Festival.
Dubai Land Department recorded 69,069 real estate transactions with a total value exceeding AED285 billion in 2017.
“As UAE-India relationship strengthens, Dubai Land Department also deepens its engagement with Indian economy to help create a win-win situation for all stakeholders,” Al Shezawi said. “We have put India in our global map of increased interaction and have been supporting the Indian Property Show in Dubai while also organising Dubai Property Show in Mumbai – the commercial capital of India.”
Dubai Property Festival takes place at Dubai World Trade Centre from April 9-11 and is expected to attract most developers, brokers, banks, mortgage providers and financial institutions.
The event is part of the DLD’s on-going efforts to support the real estate sector and create a win-win situation for all the stakeholders.
27 Mar 2018
His Excellency Sultan Butti Bin Mejren, director general of DLD, has confirmed that around three in every 10 properties across Dubai are now owned by women.
Speaking at the First Arab Land Conference, which runs from 26-28 February, Mejren pointed to the sweeping changes in urbanisation and property ownership in Dubai in recent decades, and expressed his pleasure at number of woman home owners across the emirate.
“We are proud of the vital role that DLD plays in protecting the rights of all investors, including women, who now own about 30% of Dubai’s properties,” said Bin Mejren, adding: “We are also proud of DLD’s database, which verifies the ownership of 220 different nationalities in Dubai’s real estate market.”
It takes just 30 minutes to register a Dubai property on DLD’s database that has recently been transformed with blockchain technology, providing more security and transparency of real estate investment transactions.
By 2020, DLD hope to launch a self-registration system for property ownership that will allow customers to register from anywhere around the world.
Dubai’s initial registry law was set up in 2008 and then amended in 2013, according to Bin Mejren. Annually, Dubai registers around 75,000 real estate transactions.
1 Mar 2018
The slow state of affairs in Dubai’s off-plan property market continues. Only about 1,200 residential units were released in the first two months as against the quite substantial 5,048 units — from 26 projects — for the same period last year, according to data from Reidin-GCP.
The problem for developers with off-plan projects is that they will now have to start thinking how to put in all of their energies into launching between now and mid-May, which is when Ramadan starts and is traditionally a slow period for real estate transactions. After that, there will be the onset of summer and developers are loath to make any major push during that period.
This effectively leaves a window of about 70-75 days for them to get back into the off-plan launch groove. They will also be needing some help from buyers.
For the most part, buying activity during the first two months has been relatively muted, with 1,693 ready units transacted in the first two months as against 2,256 units same period last year. Last month’s ready sales are pegged at 794 deals and down from the 899 in January, the Reidin-GCP data finds. On the off-plan side, January and February’s combined volumes were 3,056 units and down 40 per cent from the 5,091 recorded last year.
“Both ready and off plan transactional activity are down significantly,” said Sameer Lakhani, Managing Director at Global Capital Partners. “Ready transactions are down 25 per cent on a volume basis and 30 per cent on value, while off-plan is down 40 per cent on volume basis and 50 in value.
“This year, it was expected there would be a slowdown in off-plan activity after the torrid pace of the last three years. What we expect is there to be a gradual pickup in secondary market activity as the year progresses.”
But developers are not about to give up on off-plan this year. The small and even mid-sized ones are hoping to see some signs of renewed buyer interest before they get on with their launches. None of them, however, want to be in a situation where they launch and then their sales come up well short of expectations. It would also have meant a needless waste of marketing resources.
So, for the moment, only developers who are reasonably sure they can sell even in this tight market situation are venturing to do so. What this does is leave the field open for them to get the eye of a potential buyer. They needn’t worry about a host of other developers trying to do the same thing with their projects, which was the case all through 2017.
Last year, it did seem as if each week had one or the other developer announcing an off-plan launch. And even multiple launches in the same week.
Will the slowdown in off-plan activity force developers to change tack? According to Maher Sweid, Managing Partner at the boutique developer Sweid & Sweid, “In a challenging market, what has worked in the past need not apply any longer. For the moment, at least, only developers who can offer some differentiation on their projects are selling off-plan.”
Sweid & Sweid has launched sales at its Jumeirah Lake Towers based project, the Banyan Tree Residences, and with plans to hold back 50 per cent of the stock until completion.
Lakhani agrees that buyers are now looking for something beyond the multi-year post-handover payment plans. “Given the fact that developers have for the most part maxed out on incentives, the next phase of the market will likely involve consolidation among private sector developers. This has already started and we expect this trend to accelerate.”
Interestingly, some developers — the more confident among them, certainly — are also starting to raise prices, though marginally, on off-plan. This is most apparent in the fresh round of sales at ongoing projects. But as yet, there are no indications of developers raising selling prices because of higher VAT-related build costs
MBR City rockets up in the off-plan charts
During the first two months of 2018, the projects at Mohammad Bin Rashid (MBR) City collectively sold 373 units to be the highest selling freehold cluster in Dubai. It was followed by Jumeirah Village Circle (337 units) and Dubai Marina (174).
In the ready space, Dubai Marina continues its pole position with 274 units sold and with Sports City (187 units) in second spot.
According to the latest Reidin-GCP report, off-plan sales prices are showing some signs of firming up, but in an extremely selective manner. “A look into Business Bay and Jumeirah Village Circle reveals that initially off-plan sales were cheaper than the ready index, causing the money flow to switch from one to the other,” the report states. “However, there has been a reversal in this trend. Developers have justified these higher prices with post handover payment plans and rental guarantees.”
24 Feb 2018
Dubai : For some developers in Dubai, finishing a project is as good a time as any to start selling it. This could even turn into a competitive advantage for developers with Dubai recording a steady pick up in demand for completed properties even as off-plan volumes show a decline.
More so, as Dubai’s real estate authorities are likely to make compliance on construction timelines and build quality as priorities when it comes to licensing projects. According to market talk, developers are already facing increased scrutiny from the authorities on their projects — both at the time of registering and at the time of completion. Quality of build is the buzzword these days in official circles, developers say. And with consequences for anyone failing to deliver their promises.
“With so much of off-plan being launched and sold, a stronger regulatory oversight is always good … for property buyers,” said Raju Shroff, one of the partners in Signature, which has two blue-chip projects in its portfolio. “Dubai’s property market is entering a crucial phase with a flood of new properties to be delivered between now and end of the decade.”
This is why Signature is placing so much emphasis on its first project delivery — the pricey 118 at the Downtown and about 50 metres from The Dubai Mall. The ground plus 44-storey structure features only 28 units, with prices averaging Dh3,500-Dh5,000 a square foot, making it one of the super-premium offerings currently. Each apartment takes up an entire floor and the duplexes — and there are only two of them — would cost Dh55 million to Dh65 million.
“Definitely, we are using the handover as a strategy to sell the remaining 14 units,” said Shroff. “The initial units were mostly sold through private sales during the course of the project. And we always knew that to attain sell-out, we would have to show the end product to potential buyers.
“Now, with people actually staying in the tower, they will be the best advertisement and marketing we will have to sell the rest of the units.
“With so much of off-plan inventory in the market, the serious buyer needs to see something concrete or in marble, not just brochures. When we launched the 118, we promised a Manhattan experience and Mayfair finishes at the building — completing it and then make a serious sales push was the right thing to do.”
It’s not just at high-rises that developers in Dubai are taking the “seeing is believing” approach. At Jumeirah Golf Estates (JGE), Jupiter Holdings recently launched sales for the 34 premium villas making up Sienna Views … but after building the properties. The developer is owned by a high net worth Saudi investor.
Prices start at Dh1,050 a square foot for the 22 units facing the Fire golf course while the others come with a Dh900 psf price tag. “We have sold eight of the 34 units, including six that was picked up by a private investor,” said Phil Sheridan, CEO of Fine & Country, the estate agent. “Given that it is a premium project and location, we are aware that it will take time to sell out and we are prepared for that.
“In the kind of market sentiments we have right now, high-end products can’t be sold — or leased -overnight. But there’s a buyer/tenant base out there who want to move the next level up from a mature development such as Jumeirah Islands or a Meadows to a greenfield site. Jumeirah Golf Estates provides that sort of option — there aren’t that many communities with the extent of greenness and tranquillity, or of kids on their bikes.”
According to Sheridan, JGE currently has about 850 units built and with an occupancy in the 90 per cent plus territory. “It’s true that JGE properties haven’t seen too high a capital appreciation and there’s still plenty of stock coming, both from the master-developer and private players.”
Market sources suggest that more developers — at least those with deep pockets and don’t need to live off off-plan proceeds — will hold back sales until completion or close to that milestone. There are also concerns that speculators are coming back into the off-plan space, and much more easily these days given the low upfront payment offers and post-handover plans.
It’s in the ready space that longer term investors and end users are being seen. Going forward, this could become even more apparent as market sentiments shift towards delivery dates and not on off-plan incentives. As such, there isn’t much left that developers with off-plan can give away as incentives.
Or they could follow Innovate Living’s approach — for its super-luxury Palme Couture Residences on the Palm, it’s strategy was to sell the 14 units “after completion to allow owners an opportunity to appreciate the real value of their investment”. The units range between 5,028 square feet to 10,750, while a ‘“royal penthouse” takes in 19,247 square feet and includes a separate three-bedroom guesthouse and terrace.
According to Kareem Fahmy, CEO of Innovate Living, “With investments in a range of projects valued at over $125 million across different divisions, we plan to make further forays following strong interest in our brand.”
And in doing so, possibly change the off-plan sales fixation of Dubai’s developers.