Dubai Real Times Nov 09 by Sterling Publications

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OFFICIAL MAGAZINE OF REAL ESTATE REGULATORY AGENCY

MANAGING EDITOR K Raveendran

ravi@sterlingp.ae

MANAGING DIRECTOR Sankaranarayanan

sankar@sterlingp.ae

GENERAL MANAGER Radhika Natu

radhika@sterlingp.ae

EDITOR

Linda Benbow

linda@sterlingp.ae

Contributing Editors

Ambily Vijaykumar Vanit Sethi Manju Ramanan

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Creative Director

Harikumar PB

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Designer

Ujwala Ranade

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Sales and Marketing Account Managers

Peter Macwan

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Rashmi Pai

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Accounts & Administration

Biju Varghese Circulation Supervisor

Ibrahim A. Hameed

Printing Asiatic Printing Press L.L.C., PB 3522, Ajman, UAE. Tel. 06 743 4221, www.asiaticpress.com, email: asiatic@eim.ae

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Message from the CEO

Talking to professionals For two days, I enjoyed participating and discussing real estate issues with professionals from the Association of Real Estate Licence Law Officials - ARELLO members - during a meeting organised by RERA’s Sector Development Administration for ARELLO District 6. Sharing thoughts and plans with professionals from more than six different countries who been working in this field for over 35 years added a lot to me, and to the team, and I was so happy to hear it from more than one person when they told us that we are on the right track - and they are amazed at the speed of our work. One great piece of advice they gave us was “load your sector with professional service providers only” and “implement good monitoring systems”. And this is exactly what we are doing in RERA. Year 2010 is the professional year for the real estate sector in Dubai.

Eng. Marwan Bin Ghalita

Distribution: Tawseel PB No 500666 Dubai, UAE. Tel: (+971 4) 342 1512 Sultanate of Oman: Al-Atta’a Distribution Est., Kuwait: The Kuwaiti Group for Publishing & Distribution Co.Bahrain: Al Hilal Corporation, Qatar: Dar Al-Thaqafah, Saudi Arabia: Saudi Distribution Company RERA neither takes responsibility nor accredits any studies, research or statistics that are not issued by it.

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3 The birth of a new era

DUBAI REAL TIMES

C O N T E N T S

6 Arab Appraisal Foundation Dubai’s valuation conference

8 Event Licence law officials meet in Dubai 10 11 13

Valuations Statistics Personality

Reliability of land valuations ‘Taboo’ data Amira Harib Al Kitbi

14 MTA The new normal Sale prices pick up for apartments Location again a priority Salary survey Under a buyer’s microscope New payment plans 24 Movers & Mergers Appointments and amalgamations 26 Comments 31 Event 32 Community 34 Handover 41 Facilities & Services 44 Focus 49 Interior Design 50 Under Construction 52 Legally Speaking

SMEs hold key to growth Confidence in Dubai intact A strategy for success Call the escrow agent Big 5 Rewards and awards Living in luxury A lot of completions Facilities management is the future Increasing value Looking to the future Modern apartment design The only way is up Residency visas for property owners Ask before investing Questions & Answers

COVER STORY

(from left to right) Prof. Refat Alfouari, Hamad Buamim and Marwan bin Ghalita

THE BIRTH OF A NEW ERA RERA’s brainchild, the Arab Appraisal Foundation (AAF), will integrate property valuation standards and practices across the Arab world

gainst the backdrop of property prices in Dubai, and the region at large, experiencing a softening as a result of the global economic crisis, an initiative has been launched to integrate land and property valuation standards and practices across the Arab world. Dubai Real Estate Regulatory Agency’s (RERA) planned Arab Appraisal Foundation (AAF) has been launched. The blueprint was presented at the Arab Conference for Real Estate Development and Construction held in Dubai last month. Announcing this, Marwan bin Ghalita, CEO of RERA said, “Collaboration is the key to the real estate market post the economic downturn. The crisis has taught us to

convert challenges into opportunities for the betterment of the sector. It is imperative to create a suitable investment environment; and we are working to spreading the knowledge to create this investor-friendly climate.” The AAF that is backed by the Arab League of 22 states has been founded to spearhead valuation reforms in Arab nations. The foundation also had inputs from the world’s most influential real estate professional organisations, and is being considered to be the Arab equivalent of influential international institutions such as the US Congressapproved Appraisal Foundation and the UK’s Royal Institution of Chartered Surveyors (RICS). A battery of proposals were

discussed. These included initiatives to reframe and integrate standards and practices and boost rigour and credibility across the professional disciplines involved in the sector. High profile official agencies the Real Estate Regulatory Agency (RERA) and the US authority the Appraisal Foundation were behind some of the key initiatives. One of the most significant results of the cooperation between the two, and their negotiations with other national bodies, is that summit delegates were presented with their blueprint to create a new institution to transform the regional sector’s professional standards and practices. Leading organisations such as the UK’s Royal Institution of Chartered Surveyors, the World Association

of Valuation Organisations, and continental and national equivalents in Europe and Singapore were part of the consultation process. Explaining the need to have professional valuators to ensure that the real estate market in the region stands to gain from global investments into the sector, Nicholas Maclean, MD, CB Richard Ellis’s Middle Eastern Businesses said, “At the moment the Arab world is receiving only 20 per cent of the total global cash flow into the real estate sector. We are losing out to far eastern countries - and Europe is quickly catching up. We have to ensure that we benefit out of the 300 odd new funds that are being created globally targeting the real estate sector.” Throwing light on the current

DUBAI REAL TIMES

By Ambily Vijaykumar

DUBAI REAL TIMES

The Arab Appraisal Foundation can take valuations standards-setting to the highest professional level and by doing so underpin the integrity of Arab real estate markets, further opening these up to international investment

state of the sector in the backdrop of the economic slowdown, Maclean said, “The region at the moment lacks efficient supply of real estate. There is a significant demand for real estate but buyers are unable to find the kind of property that they want to pay for. Hence, the future result would definitely be a high level of vacancy. But the good part is that people are now becoming very flexible with their investments. By that I mean that they will not shy away from exploring all asset classes and secondly they will also be open to investing away from their home countries.” This then brings a big opportunity to a place like Dubai that can benefit immensely from this new demand. “The final aim of this exercise of bringing in professionalism into the industry is to make real estate a facilitator to the economy,” Maclean elaborated.

Driving home the need for this foundation, Sultan Bin Butti Bin Mejrin, Director General of the Land Department, RERA’s parent organisation, said, “The Arab Appraisal Foundation can take valuations standards-setting to the highest professional level and by doing so underpin the integrity of real estate markets, further opening these up to international investment. The launch of the AAF is a genuine milestone in the integration of Arab national real estate markets and international capital markets, a regional trend pioneered by Dubai.” The foundation is empowered to develop and set professional standards for real estate practitioners and encourage integration and the spread of common practices across the regional sector. Its mandate, though geared to the region, is broadly

similar in scope and responsibilities to that of its US equivalent, the Appraisal Foundation. Marwan bin Ghalita, CEO of RERA said, “The new foundation is crucial to the future of the regional property sector. This is a rapidly maturing market and the regulatory framework, administrative infrastructure and standards and practices have to show a similar level of development. Markets stand and fall on their credibility and integrity. True professional standards are the only way to ensure markets continue to be credible and appeal to investors.” Underlining that the AAF was long needed, Prof Dr Adel Yehia Akl, Faculty of Engineering, Cairo University said, “There is a serious need to supervise the financing of the real estate sector. What needs to be done now is to make sure that those who take loans can pay them back. Whenever there is a rapid increase in the price of properties, it will be followed by a slump. This is the reason why there is a need to have qualified valuators who possess proper licences. The local standards should conform to international standards since economies don’t function in isolation anymore. There should also be a mechanism

whereby financial institutions set safe limits for providing loans,” opined Yehia Akl. One of the main focuses of the summit was to decide on possible remedies for the changes that have affected the real estate market during the past 12 months and to assess future short and long term prospects. Specific proposals were formalised concerning the interaction and communication between investors, developers, key organisations and government bodies and the possible input at the strategic level from Arab world policy-setters. Proposals included new forms of partnerships between Arab League states. Mahmoud El Burai, RERA’s Director of Real Estate Sector Development, said: “ARADO with RERA has responded to the concerns of those who deal with real estate issues in Arab states by making the 2nd Arab Real Estate and Urban Development Conference serve as a forum for real estate professionals. The message we shared is that the Arab world’s real estate sector is positioned to recover quickly if the right steps are taken. Delegates participated in the decision to move forward with these steps.” “The Forum acquainted them with the latest commentaries from leading economic forecasters about the prospects and anticipated timetable for recovery of the real estate market in the world’s major markets. It also specifically considered the potential for real estate values in the Arab states to recover faster than elsewhere,” he continued. “We are convinced there is evidence to support taking a positive view and we presented this ‘privileged insight’ to the delegates with an outline of future planned trends and developments.” Mr. El Burai added: “This event was a must for every real estate professional with an interest in the Arab world and a requirement to be aware of the next phase of the cycle.’ Regional representatives were of the opinion that despite the slump, the real estate sector in the Arab world is positioned to recover quickly.

Real estate valuation licensing to become a reality next year Land Department Appraisal Centre to register valuers after launch of new regulations next year

Mohamad Khodr Al-Dah

apply in what has become a mature market.” The announcement is the latest in a gradual rolling out of a coherent system of regulation of professionals operating across the sector. The move to apply proper professional standards to valuations began earlier in the year with the clear statement that the Real Estate Regulatory Agency was to issue the 'Blue Book'. This current announcement takes the process considerably further and will bring real change to the sector. The move confirms the Land Department's determination to partner with leading professional

organisations and institutions to integrate professional standards across the sector. It has become one of the key participants in international standards setting. This latest initiative will ensure not only that foreign professionals are licensed to operate in the UAE but that eventually local practitioners qualifications will be recognised elsewhere and they will be able to practise abroad. Mr. Khodr Al-Dah added: “This is indeed a significant step forward towards ensuring that the highest possible professional standards are rigorously applied to all real estate transactions in the UAE.”

DUBAI REAL TIMES

he Dubai Land Department has announced that it will begin registering and licensing land valuers and valuations from 2010, through its Real Estate Appraisal Centre. The Centre will become fully operational and issue the UAE Valuations Rule Book – the Blue Book - following the release of new regulations governing valuations early next year, it was revealed during the opening of the Arab Conference for Real Estate Development and Construction in Dubai. The announcement is far reaching and has widespread implications, including officially recognising the role of land and property valuers for the first time. The new rules will allow those who are professionally qualified elsewhere with recognised organisations in other territories to be licensed by the Centre to operate in the UAE; and for their profession to be listed on their employment visa. Mohamad Khodr Al-Dah, Head of Dubai Land Department's Taqyeem Real Estate Appraisal Centre – the emirate's leading land valuation body, said: “From next year the Centre will begin accrediting companies, individuals and firms as real estate Valuers. The aim is to ensure the highest professional standards

COVER STORY

Dubaiâ&#x20AC;&#x2122;s valuation conference

Launch of the Arab Appraisal Foundation By Mohamad Khodr Al-Dah, Head of Taqyeem, Real Estate Appraisal Centre

DUBAI REAL TIMES

T 6

he elegant headquarters of the Dubai Chamber overlooking the tranquil waters of Dubai Creek saw a frenzy of activity recently as it hosted Dubaiâ&#x20AC;&#x2122;s Valuation Conference. The 2nd Arab Real Estate & Urban Development Conference was held over three days from 19 to 21 October and was organised jointly between RERA and the Arab Administrative Development Organisation (ARADO). ARADO is a sister organisation of the Arab League headquartered in Cairo. The opening session was

attended by HE Sultan Butti bin Mijren, Director-General of the Land Department and several highranking officials. The conference was inaugurated with inspiring speeches by Eng. Marwan bin Ghalita, CEO of RERA; Eng. Mahmoud Hesham Al Burai, Director of the Real Estate Sector Development Department at RERA; HE Eng. Hamad Buamim, Director-General of Dubai Chamber; and Prof. Refat Al-Faouri, DirectorGeneral of ARADO. The conference witnessed significant interest from the press and saw a list of eloquent speakers

from various parts of the Arab World and the international arena. Several technical papers on valuation were also presented by the speakers at the conference, which led to healthy amounts of debate and the sharing of knowledge between different experts from all over the world. The speakers included: Prof. Adel Yehia Akl, Professor of Structures at Cairo University and a valuation expert in his own right in his native Egypt. Prof. Akl led a series of excellent workshops on valuation that included the various methods of valuation with worked examples,

a history of various economic crises in the past, including the current crisis, valuation reporting, valuation definitions (e.g. market value or forced sale value) as well as many more detailed topics. Eng. Mohamad Khodr Al-Dah, CEng MEng MIStructE, Head of Taqyeem, Dubai Land Department. Eng. Al-Dah spoke about the new Valuation Centre called Taqyeem which will act as a valuation regulator in Dubai. He also touched on the upcoming regulations relating to the valuation profession, international cooperation with

Mr Grzesik also went on to talk about the various relationships and interdependencies between various bodies especially with respect to standards. The TEGoVA scheme of Recognised European Valuer (REV) was also discussed in addition to topics relevant to Mr. Grzesik’s native Poland. Finally, new challenges and changes facing the valuation profession were also discussed, and this includes sustainability and harmonising valuation methodologies (as opposed to just harmonising valuation standards). Mr. John Hockey, MSc FRICS IRRV, Chair of the European Valuations Standards Board at TEGoVA (the body that issues the TEGoVA valuation standards also called the Blue Book). Mr. Hockey gave a detailed analysis on the various methods of valuation and adapting to changes in the marketplace. Mr. Nicholas Maclean, RD BSc (Hons) FRICS IRRV, Managing Director of CB Richard Ellis Middle East. Mr. Maclean flew the RICS flag and gave a very interesting presentation regarding the

The Arab Appraisal Foundation (AAF) The conference also coincided with the launching of the Arab Appraisal Foundation (AAF) in Dubai. The AAF is the brainchild of the Real Estate Regulatory Agency (RERA) and the Arab Administrative Development Organisation (ARADO) and will be an all-encompassing organisation for all Arab countries. At the conference, Mr. David Bunton presented a presentation and paper entitled: “The Establishment of an Arab Appraisal Foundation: A Roadmap” which included recommendations

All Arab countries shall be invited to set up institutions or societies for property valuation (if they do not have such bodies already

on how to take this project forward based on his extensive experience in valuation. In the closing statements of the conference, the following was agreed: • The conference witnessed the participation of individuals representing the internationallyaccepted best-practices worldwide from bodies such as: IVSC, WAVO, TEGoVA and RICS. • All Arab countries shall be invited to set up institutions or societies for property valuation (if they do not have such bodies already). • The AAF will be founded based on the best practices of similar bodies worldwide as discussed in the conference.

The aims of the AAF are: •

To harmonise valuation standards in the Arab world • Sharing and disseminating professional knowledge • To safeguard the rights of the valuer • To be a focal point between the Arab and outside worlds on the subject of valuation • To increase the visibility of the profession to outsiders We look forward to witnessing the setting up of further meetings between sister Arab states regarding the founding of the AAF as well as having an annual valuation conference on the subject of Valuation in the Arab World. The future has never looked so bright for Property valuation in the Arab world.

DUBAI REAL TIMES

various professional valuation organisations, and the founding of the Arab Appraisal Foundation (AAF). Mr. David Bunton, President of the Appraisal Foundation, USA. Mr. Bunton spoke about recent developments and forecasts regarding the US real estate market, and his talk was underpinned by his extensive experience, both in valuation and the US Senate. In addition he also presented a blueprint for the foundation of the AAF. Mr. J. Carl Schultz, MAI CRE SGA FRICS, Vice-Chair of the Appraisal Standards Board of the Appraisal Foundation, USA. Mr. Schultz gave a comparative analysis of the world’s major valuation standards. Mr. Chris Grzesik, REV FRICS, Board Member of The European Group of Valuers’ Associations (TEGoVA). Mr. Grzesik gave a very interesting talk entitled “Standard Setters and the Politics of Valuation Worldwide” and touched on various key valuation organisations including TEGoVA, RICS, IVSC, and the Appraisal Foundation.

international financial markets, sovereign wealth funds (SWF), and a comparison of the markets in the USA, EU, and the Middle East. The audience appreciated the impressive amounts of data and analysis involved in preparing the information that was presented. Dr. Lim Lan Yuan, JP, Chairman of the World Association of Valuation Organisations (WAVO) and member of the Singapore Institute of Surveyors and Valuers. Dr. Yuan presented his views with a talk entitled: “The Valuation Profession: Localisation and Globalisation and the Impact on The Education and Training of Valuers”. Mr Yew Kwong Leung, LLB DIPURBVAL B.Sc. (Econ) M.Sc. MBA FSISV, Partner of Wong Partnership and member of WAVO. Mr Leung touched on the topic of valuation from a legal perspective with his talk entitled: “Statutory and Legal Parameters of Valuation”. The conference was well attended by developers, valuers, lecturers, regulators and students from the Higher Colleges of Technology. The delegates hailed from GCC countries including: UAE, Saudi Arabia, Bahrain, Qatar and Kuwait. Delegates from Arab countries came from: Egypt, the Sudan, and Syria. The conference was well-attended by representatives of various countries farther afield, including: United States of America, United Kingdom, Poland, Singapore and Australia.

EVENT

Licence law officials meet in Dubai RERA paves the way for regional cooperation at international regulators summit. Inaugural District 6 Dubai meeting confirms agency's lead role

DUBAI REAL TIMES

he Real Estate Regulatory Agency (RERA) opened a twoday summit recently, in Dubai, bringing together the key regulators of the international property sector to begin the process of consolidating regional regulation. The initiative comes in the wake of RERA’s recent affiliation with the Association of Real Estate License Law Officials (ARELLO), finalised in the US in April of this year, and confirms the Dubai regulator’s key role in leading the international standard-setting process. RERA is the first regional ARELLO affiliate and is now leading the initiative to harmonise regulation and set benchmark standards for its peer organisations. Officials from the UK, US, Canada, Australia and South Africa joined RERA Chief Executive Marwan bin Ghalita and representatives from the regional sector for the first ARELLO District 6 meeting to be held in the UAE. The Ajman Real Estate Regulatory Agency (ARRA) became ARELLO’s newest Gulf member on the morning of Day 1. Eng. Mahmoud Al Burai, RERA’s Director of Real Estate Sector

Development, said: “Under the ARELLO umbrella, we have begun the process of creating a strong, coherent and mutually supportive framework to take regulation of the regional market to the next level. The District 6 summit offers regional officials the opportunity to meet the world’s leading property sector regulators and standard setters. It paves the way for real advances in regulation of the regional sector and to begin the process of shaping a new direction.” His words were echoed by ARELLO President Mrs. Anne Woody, one of the keynote speakers during the opening day of the summit. Following one of the closed sessions, Mrs. Woody said: “Today’s meeting has created an

opportunity for regulators to come together and to make decisions not only to prioritise issues, but also to make decisions about the right balance between the interests of everyone involved in the sector.

RERA is the first regional ARELLO affiliate and is now leading the initiative to harmonise regulation and set benchmark standards for its peer organisations

There are areas of common concern across all markets, and we can learn from each other’s experience.” “RERA has a powerful regulatory framework and strong leadership, and can offer a model for real estate regulation in the region. ARELLO is spreading its wings to include new territories, and international expansion has been one of the goals of my presidency. RERA’s affiliation was a significant step forward and brings on board representation from the key Gulf region,” she added. There was strong support for the initiative from across the sector,

“Under the ARELLO umbrella, we have begun the process of creating a strong, coherent and mutually supportive framework to take regulation of the regional market to the next level”

with all sides keen to recognise the potential for strengthening the core capabilities as the market continues to mature. Markus Giebel, Chief Executive of Deyaar Development, diamond sponsors of the ARELLO District 6 meeting, said: “The initiatives led by RERA has enabled Dubai to become a truly international property market

and further enhanced the emirate’s appeal to the international investor community. Deyaar welcomes this initiative to bring together real estate experts and professionals from around the world under one roof at a time when the industry is looking for new ideas. The real estate sector in Dubai will benefit immensely from this initiative by

drawing on the experiences of our international counterparts.” As summit host, RERA had the lead role in setting the international regulation agenda. The meeting put the seal on the agency’s elevation to the leading ranks of the sector’s regulators. Recently, it teamed up with the five core organisations responsible for regulating real estate affairs around the world and announced the launch of the Middle East and North Africa Real Estate Society (Menares). RERA is now part of the

International Real Estate federation (FIABCI), the World Association of Valuation Organisation (WAVO), the Royal Institute of Chartered Surveyors (RICS), the Asian Public Real Estate Association (APREA), and the Urban Land Institute (ULI). RERA is on the board of FIABCI, which integrates it into the certified international real estate professionals’ community in addition to real estate courses offered by FIABIC University. Emirates Airlines was the official carrier to the District 6 meeting.

Deyaar plans to restart projects in 2010 Deyaar Strategy: Phased Approach

PHASE III BLUE OCEAN STRATEGIES

PHASE I SAFEGUARD IN CRISIS

PHASE II TOP GRADING

Phase I focuses on safeguarding cash

Phase II focuses on Top grading - a

Phase III focuses on creating “blue

flow through the introduction and the

process that results in a significant

oceans” of uncontested market space

implementation of the following ini-

improvement of the talent base in an

making competition irrelevant and

tiatives:

organisation by replacing the bottom

positioning the company for growth.

performers by top performers.

In this phase, Deyaar will undertake

• Easy Payment Plan

The successful implementation of top

international expansion and product

• Price Reduction

grading is critical for companies in the

expansion, focusing on:

• Customer Consolidation

current crisis to be able to restructure,

Affordable Housing

• Project Consolidation

grow and emerge stronger than the

Retirement Homes

competition.

Fund Management

• Deyaar

Property

Opportunity

(VISION 2015)

Asset Management

Fund

REITs and Financial Products

launch a co-investment fund in 2010 of similar size. Deyaar, which once focused primarily on high-rise buildings, is shifting its focus to villas and low-cost

housing. “The next big thing is handsdown low cost housing ... there are 90 million people in the Middle East who are eligible for low-cost housing. A

developing country needs a middle class. A middle class can’t afford a million dollar apartment in the Marina. The transition of the UAE to middle class is imperative,” he said.

DUBAI REAL TIMES

ubai developer Deyaar, outlined its strategies and gave hints on its business programmes at the forum, which included forward looking plans on dealing with the current financial crisis and moving ahead with plans to succeed. Its various strategies were borne out by announcements to the press during the weeks following the forum. One week, it announced it had cut 20 per cent of its workforce, the next it said it will re-start developing projects in 2010 and set up co-investment funds for its overseas expansion plans. “2009 was a development holiday. In 2010 we have to start developing again,” Markus Giebel, the firm’s chief executive stated. Giebel hoped to close the firm’s Dh500 million ($136.1 million) distressed debt fund by the end of the year and would ‘attempt’ to

VALUATIONS

Reliability of land valuations By Mouaiad Al Omari

he system of land valuation has its own processes and approach to the value. This process is affected by three main axis. The first is input (legal title/legal rights, legal use, and legal location); the second is constraints (valuation laws and regulations, valuation measure standards, code of conduct, and methodologies); and the third is resources (human resources, and information resources). In the case of land valuation, the process affected by inputs, constraints, and resources produces land valuation (the output). French argues that to obtain non-risky outputs (valuation) and inputs "the comparable information" (French, N., and Gabrielli, L., 2004: p. 485)) should be certain. Which means that to obtain reliable and risk-free outputs (valuation), the following inputs should be reliable. 1 Juridical; 2 Regulatory; and 3 Information and human 1- Juridical means to have: 1. Legal Title. That implies the existence of a confidential land registration system to ensure tenure security and different kinds of related legal rights; 2. Legal Land Use. This implies the existence of town planning strategy in the meaning of obtaining clear investment vision; and 3. Legal Location. This means the existence of a comprehensive legal boundaries system. 2- Regulatory means a set of constraints within which the valuation process must operate. i.e. 1. Valuation laws and regulations; 2. A comprehensive set of valuation measurement standards; 3. High valuation ethical standards; and 4. Clear valuation methodologies.

DUBAI REAL TIMES

3- Information and Human, which are the main resources in the valuation process, means to have: 1. Information. This implies the existence of a credible land data bank system; and 2. Human (valuer), which means to have a qualified, knowledgeable, honest and good integrity, responsible, trustworthy person. This implies the existence of a specialised academic body and coherent professional body to produce such a person.

The land valuation system contains multiple data analysis steps, in which the output of one step is the input into the next step, to produce a market value. For valuation (the output) to be reliable, the whole valuation system, the set of inputs, constraints, and resources, should be reliable. Hence, it is possible to say that reliability in land valuation means reaching a point (high quality valuation) about which stakeholders feel confident to take decisions, if uncertain. In fact, it is possible to say that reliable land valuation can support decisionmakers, in the private and public sectors, in all kinds of land reforms. It provides more transparency in the valuation decision; reduced public expenditures (e.g. expropriation for public works), reduced land disputes in general (between private actors themselves, between the state and other land market participants), facilitate land market developments, reduced corruption, increased land related investments that lead to sustainable national economic development.

But why is valuation reliability important? And for whom is it important? This can be illustrated by the following: 1. To some extent, the comparison process is the integral factor that helps in estimating land value. For this estimation to be accurate and reliable, it should depend upon good quality data (Rowley, S., et al., 1996). 2. Real estate as an asset can contribute to wealth if a trusted opinion (reliable) of value as one of the prerequisites, is in place (John A. Edge, 2002). 3. Credible (reliable) valuations to real estate property, reduce the risk involved in real estate property financial transactions (Pomerleano, M., 2002). 4. In real estate practices, "land and real property can be mortgaged according to its estimated market value and can create new capital that can be further invested either for housing and real property improvement purposes or for any other activities, both for the benefit of the owner and for the general economic development of society" (Chryssy A. Potsiou, 2006: p. 119). 5. With the globalisation of real estate markets and its related techniques, both national and international stakeholders seek transparent, accountable, efficient, certain, reliable and sufficient land administration systems to facilitate cross-border investment opportunities (Jones Lang LaSalle, 2006: p.1). 6. As owning real estate property is an indicator of wealth, many governments depend on real estate as an attractive fixed source of tax revenue (Grover R. 2008). 7. Investors, bankers, land use planners, land developers, decision-makers, long-term and short-term strategy planners need to rely on reliable land valuation to have certain decisions. By contrast, unreliability increases costs, wastes time, increases the level of risk, mistrust and disputes between actors which will affect the national security and sustainable development. But what causes unreliability? This can be seen by the following: 1. The absence of efficient land administration systems which depend upon an accurate land information system (Steudler, D., 2004) 2. Lack of transparency in the real estate market. Jones Lang LaSalle, (2006) identifies transparency in real estate market as follows: • "Any open and clearly organised real estate market; • Operating in a legal and regulatory framework; • Characterised by a consistent approach of the enforcement of rules and regulations; • Respects private property rights; • Implementing the ethical and professional standards of private sector advisors, agents, and brokers who are licensed to conduct business (real estate) in each country (Jones Lang LaSalle, 2006: p. 3). 3. The absence of academic training to produce qualified, knowledgeable and responsible valuers able to act independently and objectively (Mallinson 1994, Carsberg 2002, French, N. 2003, Gilbertson, B. and Preston D., 2005). This means that almost all real estate activities rely on the estimated value. Therefore, acknowledged and experienced valuers should base their estimate of value upon reliable factors, namely the three axises. Although setting up reliability standards is a costly process, the overall benefits for society, economic development and human welfare exceed these costs.

STATISTICS

Transactions and sales during October 2009 Information provided by Real Estate Sector Development, Data Section Total transactions value for the month of October 2009 was Dh9,510 million

Land sales transaction • Total number of sales transactions within the districts was 256 with a total value of transactions at Dh2,188 million for 3,572 thousand square feet

• Emirates Hills 3rd had the highest number of sales transactions with 32 sales • The highest value of sales was achieved by Palm Jumeirah with Dh317 million

Flat sales transactions • Total number of sales transactions within the districts was 1,357 with a total value of Dh1,307 million for 1,469 thousand square feet • Warsan First had the highest

number of sales with 316 sale transactions • The highest value of sales was achieved by Dubai Marina district with Dh357million

Villa sales transactions

A new Arabic monthly magazine called Taboo has been released by the Dubai Land Department, which specialises in the real estate industry and investment. It includes a number of new investigations, studies, analysis and readings of the real estate market, plus an interview with the Deputy Director-General, Department of Land. It includes an analytical study of the Dubai land market during the past eight months of this year which shows that 3,279 apartments were sold at a total value of Dh2,905,596,413 billion dirhams

and 484 residential villas with a total value: Dh2,023,079,415 billion. There were 1,203 land sales at a total value of Dh10,752,961,972 billion. The number of newly registered property owners during the first half of this year has been published by the Land Registry Department. Investors say this information is a significant attraction to all nationalities who are interested in buying into the real estate market here. The data shows that top of the list of new owners among males are British (17 per cent) followed by UAE

nationals (16 per cent) and Pakistanis (15 per cent). Emirati women topped the list of female property owners (21 per cent) followed by Britons (18 per cent) and Indian nationals (13 per cent). There is a growing demand from long-term investors who are keen to obtain certificates of title to their property - a sign of the confidence enjoyed by the Dubai real estate market. The data shows an estimated market growth for Dubai which will attract Gulf investors, despite the repercussions of the global crisis.

DUBAI REAL TIMES

• Total number of mortgage transactions of the districts was 74 with a total value of Dh290 million for 707,000sqft. • Emirates Hill 3rd had the highest number of sales which with 37 sales transactions

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PERSONALITY

Analysing the figures By Amal Abdul Rahim Al Sahlawi

here are a lot of great advantages to having young people work in such a challenging atmosphere such as the real estate sector. It adds a lot of life, energy and creativity - which definitely results in a more positive outcome. RERA is known by many to be a government entity that supports young ambitious leaders who are motivated by challenges and full of hope. Amira Harib al Kitbi joined the Real Estate Regulatory Agency in 2008; she was so excited to work in such a promising work environment. She believed in the power of RERA in regulating the real estate market, her enthusiasm stemmed from knowing that this sector represents 40 per cent of the GDP of the city of Dubai, and by regulating it the emirate is going to attract a lot of smart investment to the region.

Amira works as a statistical analysist; she is responsible for collecting and analysing real estate data from a variety of different sources, analysing it statistically to contribute to market research and to help make wise decisions based on reliable information - which helps

the real estate stake holders to invest safely in the real estate sector - which helps to create further awareness about the real estate sector. Asking her about the obstacles to success: she answers that thinking negatively is the worst thing for success. On the other

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hand, challenge is the best motivation for success, in her opinion. She really thinks that challenges brings out the best in a person Away from work Amira likes to meet new people and make new friends. Photography is her passion, and painting is one of her hobbies. She spends the rest of her free time with the family reminding herself what are the most important things in her life . She is looking forward to completing her bachelor’s degree in business administration, to be part of UAE’s development journey, and to continue what H.H. Sheikh Zayed has started in this land of pride and glory.

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DUBAI REAL TIMES

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13 INTERNATIONAL REALTY

MARKET TRENDS & ANALYSIS

Sentiment starting to improve All market sectors are in the late downturn stage of the property cycle, says analyst

DUBAI REAL TIMES

entiment among both investors and occupiers in the Dubai property market is starting to improve and the rate of decline in both values and rentals is slowing from that experienced over the first half of 2009. All sectors of the market are now positioned in the late downturn stage of the property cycle, Jones Lang LaSalle (JLL) said in a report. A combination of improved affordability and falling household size will naturally increase residential demand, the repot pointed out. At the same time, construction delays and project cancellations will help ease the potential oversupply situation. If these current supply/ demand trends continue into 2010 as expected, the residential market is likely to stabilise next year, it said. But the report stressed that a return to the pricing levels experienced in the real estate boom (from 2007 up until mid 2008) was unlikely in the near future. JLL said that the real estate market mirrors many of the broader macroeconomic trends impacting Dubai, and that the worst of the crises may be over. At the same time, a decline in rentals and values in most sectors is continuing over the remainder of 2009 in the face of significant levels of new supply entering the market. Declining population numbers have been just one factor driving the major adjustment in residential pricing in Dubai over the past 12 months. Sale prices have declined by 40â&#x20AC;&#x201C;60 per cent and rents by 30â&#x20AC;&#x201C;50 per cent in the areas that JLL monitors across the city. While the market has moved decisively in the tenant/purchasers favour over the

past year, the market is experiencing quite different trends between the sales and leasing sectors, the report said. While sales transactions have declined, the volume of leasing transactions has increased since the first quarter of this year as a result of relocations to Dubai from other emirates, upgrades in living accommodation, and a decrease in household size.

Relocation to Dubai There has been increased demand for rental properties in International City and Discovery Gardens over

the past few months. These two Nakheel projects, located on the outer peripheries of Dubai, have benefitted from demand from those previously living in Sharjah and Abu

Dhabi who can now afford to live in Dubai. As residential rents in Dubai soared in 2007/2008, a considerable proportion of the working population in Dubai was forced

While sales transactions have declined, the volume of leasing transactions has increased since the first quarter of this year as a result of relocations to Dubai from other emirates, upgrades in living accommodation, and a decrease in household size

Average Sale Price – Dubai Office Market

Average Capital Value (AED / SqFt)

6,000 5,000 4,000 3,000 2,000 1,000 0 2007 DIFC Business Bay

2008 Burj Dubai Downtown Jumeirah Lake Towers

Q1 2009 TECOM Dubai Silicon Oasis

Source: Jones Lang LaSalle

per cent less. For this reason, many

Dubai over the past few years, this

same time, construction delays and

Prime Rents (AED/Sq Ft)

average rents in International City removal companies revealing only in the sales market where two and will help ease investors’ nerves and AED 325 perbysqmore ft per annum the end Q2 cent 2009.ofAmoves further are three-bedroom apartments that allow them to make better informed 10ofper have decreased than 30 peras ataround 600 decrease 25%affordable has beenandexperienced in Q3 2009, are ideal for end-users and families and more calculated decisions,” the from outside of the UAE,bringing it said. cent, making itofmore 500in higher demand than studios are report said. attracting people back to Dubai, prime rents (excluding DIFC)JLL to circa AED 225–AED 250 per sq ft Decreasing Household Size or400one-bedroom apartments. This “Improved transparency is said. per annum. According to the report, rents The third positive factor driving is different from the past when important for both tenants and 300 were mostly speculators investors. For occupiers, transparent in Abu Dhabi are now significantly activity in the leasing market has buyers Rents arethose likelyintoDubai decline beforereduction the end inofthe looking for short-term investments markets allow for easier comparison higher than due by to a further been a 15% significant 200 the2009, capital’s lack of new average household 2009. and interested in flipping studios of occupation costs and provide closing theaffordable year at around AED 200 per sq ftsize perduring annum. 100 one-bedroom apartments that more options for strategic action supply. A typical two abedroom According to the population and This would represent drop of around 65% over thelast full year. a lower capital outlay. (e.g. the execution of sale and apartment in Abu Dhabi would census (2007), the average household required 0 JLL believes a combination in transparent currently command an annual rent size in the Dubai urban area was End 2008 that Q1 2009 Q2 2009 leasebacks Q3 2009is easier End 2009 prices Dh180,00–200,000, for strata units have also of improved affordability and markets) and improved market data of Asking between 4.14. continued to decline, falling Jones Lang LaSalle by the roughly their 2008 peaksGiven by the of number Q2 2009.of singleSource: falling household size will naturally raises the efficiency of transactions”. while same50% typefrom of unit in Dubai theend high For investors, transparent markets would rent at approximately 30–40 expatriates that have moved into increase residential demand. At the

DUBAI REAL TIMES

figureOutlook was declining even before the project cancellations will help ease of those working in Abu Dhabi haveMarket Demand the potential oversupply situation. If fall in rental in 2009 stimulated opted to shift to Discovery Gardens The stabilisation of the global economy and the significant price Although the rates market is starting to witness tentative signs of these current supply/demand trends and other projects to the south of more sharers to form their own correction have fuelled occupier activity over Quarter three. The improvement (with tenant activity beginning to pick up and rental Dubai where they can pay a lower household unit, according to JLL continue into 2010 as expected, the previous hesitancy is slowly fading withcommute a larger tonumber down), thehaving office market facesmarket an uncertain residential is likely to stabilise analysts.slowing With rental rates rentaway, and still and fromdecrease of occupiers entering the market with a willingness to commit to time as a result of the future supply of new stock. This is likely Abu Dhabi relatively quickly, it is fallen as much as 50 per cent during next year. morethe individuals pointed out. new deals. As the balance of power in negotiations has switched to 2009, increase alreadyhave highmoved vacancy rate and put additional Transparency out of shared accommodation, Residents are also taking form the landlord to tenants, occupiers are looking for more pressure on rents. advantage of lower rents to upgrade generating strong demand for JLL argues that the global economic security through longer term leases. Lease terms of 3–5 years to better quality housing units within smaller (studios and 1 bedroom) downturn has resulted in a more or more are becoming more commonly new Asunits. moreBefore new the supply is continuously onto the market financial crisis, many released Dubai. Forimplemented example, thoseinpreviously critical examination of the real estate peopleareas were forced to share space in Discovery regulatory environment in Dubai. In contracts and some owners are living now even willing to Gardens consider areandsingle additional of second-hand become available, two or three-bedroom apartments now able to lease apartments in these circumstances steps longer term leases of up to 10 years for major occupiers. the market is expected to continue to shift in favour of tenants.to provide Jumeirah Lake Towers or Dubai as a cheaper alternative to renting more accurate and timely market Occupiers will become increasingly meticulous when closing Marina. Similarly, residents of Dubai their own studio or one-bedroom information, increase transparency The majority of occupiers seeking office space are looking to given the wider range of available options. Landlords apartment. Marina are now able to upgrade todeals, and introduce clearer legislation relocate while retaining a cash neutral position. Consequently to provide incentives such aswill rent periods Tenants are now taking advantage units located on Palm Jumeirah or inwill have playfree a major partininanrebuilding of affordable rents and opting out Downtown Burj Dubai, JLL said. confidence and stimulating more the majority of demand is for well located, fitted out space increasingly competitive market. of shared accommodations to live Moving companies are investment in the real estate sector, offered at reasonable rents. benefitting from the increased on their own. Based on surveys it observes. Notwithstanding the above, selective shortages are emerging turnover (churn) within Dubai itself undertaken by Jones Lang LaSalle, it “In the current uncertain Performance the been mostestimated sought after space categories – goodclimate, quality, investors well that the average as well as from the inflows fromin has economic are household Dubai has 10,000 fallen sq Abu outside Dhabi and Sharjah. However, understandably As at the end of 2008, prime rents of DIFC stood at located, fittedsize out inunits of sub ft at reasonable more rents. worried the As number international moves from 4.1 in 2007 to between 2.5 and about risk. Increased transparency to around live in AED Sharjah 550due per to sq cheaper ft per annum. marketofdynamics started rents. This trend is now reversing as has declined, with interviews with 3.0 today. The reverse holds true and clearer real estate regulations changing in 2009, rents saw a 45% drop reaching AED 300– Average Prime Office Rents (Dubai excluding DIFC)

e are looking to n. Consequently fitted out space

f DIFC stood at dynamics started ching AED 300– 2 2009. A further 3 2009, bringing AED 250 per sq ft

efore the end of sq ft per annum. r the full year.

risk premiums, the assessment of need of the hour is for clear policy, likely future investment returns which is fair, open and adhered to As more new supply is continuously released ontoJLLthe market across the board,” said. through performance benchmarks. and additional areas second-hand space become available, They also provide for ofenhanced Real Estate Indices decision-making through the market is expected to better continue to shift in favour of tenants. information and the development The establishing of real estate market Occupiers will become increasingly meticulous when closing of more robust and informed indices tracking the performance deals, given the wider range of available options. Landlords investment strategies and target and valuations of assets within will have to provide incentives such rent free periods in an allocations. theasmarkets would undoubtedly The reportcompetitive points out that aid Dubai’s market transparency. increasingly market. less transparent markets are likely Whether transaction or valuation to perform better in periods of based, such an index would improve Notwithstanding the above, selective shortages are emerging boom than more mature markets. investor confidence, it said. in the most space categories – good out quality, JLL pointed that well RERA’s However, mostsought seriousafter long-term located, out units sub 10,000 sq ft real at reasonable current estate indexrents. is a spot real estatefitted investors are of currently

Real Estate Laws, Guidelines & Initiatives • •

•

Average Prime Office Rents (Dubai excluding DIFC) 600 Prime Rents (AED/Sq Ft)

significant price uarter three. The a larger number ess to commit to ons has switched ooking for more ms of 3–5 years emented in new ling to consider ccupiers.

Market Outlook Although the market is starting to witness tentative signs of improvement (with tenant activity beginning to pick up and rental decrease slowing down), the office market faces an uncertain time as a result of the future supply of new stock. This is likely residency status for freehold allow for better management to increase theriskalready high vacancy rate and put additional purchasers remains unclear. The and the establishment of suitable pressure on rents.

500

•

400 300

•

200 100 0

DUBAI REAL TIMES

to decline, falling d of Q2 2009.

End 2008

Q1 2009

Q2 2009

Q3 2009

End 2009

•

Source: Jones Lang LaSalle

looking at opportunities in more mature and stable markets. For instance, Central London is currently the ‘flavour of the month’ among Middle Eastern investors, accounting for the vast majority of Middle Eastern investment in overseas real estate during the first half of 2009, the report says. This capital has been attracted to London by the perception that prices have adjusted the furthest and the openness and transparency of the market, which makes it relatively simple to establish value and create a more suitable exit strategy than in less mature or transparent markets like Dubai. “Improving real estate legalisation will also increase transparency and investor confidence. At present, it is difficult to get a judgment on a real estate court case and the legal process can be confusing, timeconsuming and in many instances, fruitless. Despite recent attempts to provide clarity, the law concerning

value updated each quarter. This could be taken to the next level and used as the basis of a representative index of real estate pricing and values, it suggested. A benchmarking service which gives owners an objective measure of their real estate performance against relevant yardsticks could also form a useful tool in improving the transparency of the Dubai market, it said. “Successful indices rely heavily on institutional investors and valuers to provide the necessary information required to track performance and values on a timely basis. At present, Dubai is yet to see a significant institutional investment market develop. To reach such a level of maturity requires all real estate professionals (owners, valuers, brokers, regulators) to step up the call for further improvements in transparency,” the report pointed out.

•

• • •

•

A new decree has been established abolishing the minimum amount required to set-up an LLC (Limited Liability Company). This is an amendment to Federal Law No. 8 of 1984. The Dubai Rent Decree (Decree No. (1) of 2009) is part of RERA’s push towards streamlining rents and as per existing rents in 2008, only allows a certain percentage increase for both residential and commercial properties. While the scheme is not legally binding, it is designed to act as an indicator for landlords. This initiative aims at improving transparency of rents for each area, at the same time helping investors with their strategies. As of January 2009, RERA launched a residential property rental index which defines the average annual rents for studios, one, two and three-bedroom apartments in addition to villas in compounds and single villas and the Land Department is encouraging tenants and landlords to register all rental contracts in the emirate prior to this date to help effect this process. As of January 2009, RERA has ordered developers and banks to stop collecting payments exceeding 20 per cent of the cost of properties, until construction begins. Law No. (13) of 2008 concerning Real Estate Registration in Dubai. This law regulates sales of real estate units under construction. Developers may not implement any project or sell any property prior to obtaining the required title deeds and obtaining all necessary approvals. This law also addresses the consequences of any default by the purchaser. Law No. (14) of 2008: This law applies to the mortgage of property and property units as security for debt. It also regulates the procedures to be taken by banks (or any other creditor) in case the mortgagor fails to meet the monthly payment schedule. Law No. 8 Strata Title Law — the strata title law in Dubai came into effect earlier in 2008. It seeks to provide certainty to owners of units in apartment buildings of their rights to ownership and easements (i.e. it confirms that they may sell, lease or mortgage their unit). This law also provides for the establishment of management associations and outlines the developers’ liability relating to various construction defects and the right to charge service fees. RERA and the Dubai Department of Economic Development (DED) have signed a “Co-operation pact” to facilitate all licensing procedures related to the real estate sector. RERA plans to introduce a Realty Agent Trust Account to boost the confidence and transparency in the market and create a strong professionalism within the brokerage industry. RERA has signed an MoU with the Royal Institution of Chartered Surveyors (RICS), aimed at improving the quality of real estate professionals in Dubai and enhancing the standards of expert regulation. The RICS will also assist RERA with a Code of Measuring Practice so as to streamline the process within Dubai. Despite recent attempts to clarify the situation, there remains considerable confusion surrounding the residency rights for foreign nationals purchasing real estate in UAE.

8,000,000

m2 NLA

6,000,000 4,000,000 2,000,000 0

MARKET TRENDS & ANALYSIS 2004

2005

2006

2007

2008

2009

2010

2011

DUBAI CUMULA TIVE RESIDENTIAL SUPPLY 400,000

MENA overview 2009 report by Colliers 360,000 340,000 320,000

Commenting on the MENA Over300,000 view 2009, JP Grobbelaar, Director: 280,000 2008 2009 Research and Advisory, said: “Despite differences in socio-economic, demographic and regulatory factors between the markets, the overview

lenders surveyed maintain an overall positive outlook for 2010, driven by an expected increase in governmental support to ease liquidity restriction in the banking sector. This should result in lower interest rates and also higher loan-to-value ratios. Also, 57 per cent of the respondents indicated that lending criteria and internal restrictions are expected to ease during the next six to 12 months. The Dubai Office Occupancy Survey monitors the performance of this real estate sector in light of the economic crisis by comparing the occupancy level of specific buildings between Q1 2009 and Q3 2009. The survey indicates a market beset

4,000,000 3,500,000

m GLA

3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2008

m2 NLA

DUBAI CUMULA TIVE OFFICE SUPPLY

4,000,000 2,000,000

8,000,000 0

m2 NLA

6,000,000

2004

2005

2006

2007

2008

2009

2010

2011

4,000,000

Number of Units

with falling demand and oversupply highlights a common theme: the de2,000,000 evidenced through increasing va- terioration of regional markets over DUBAI CUMULA TIVE RESIDENTIAL SUPPLY 0 the last 12 months in the face of the cancy levels and falling take up rates. 2004 2005 2006 2007 2008 2009 2010 2011 global economic crisis. Prices have The gap between demand and sup400,000 ply is expected to amplify due to a fallen, in some cases precipitously, as 380,000 significant increase in forthcoming liquidity tightened, economic activ360,000 340,000

DUBAI CUMULA TIVE RESIDENTIAL SUPPLY

320,000

400,000 300,000

Number of Units

380,000 280,000 360,000

2008

2009

2010

2011

340,000 320,000 300,000 280,000 2008

DUBAI CUMULA TIVE RETAIL SUPPLY 2010

2009

2011

m2 GLA

4,000,000 supply, which is expected to double ity slowed and negative sentiment 3,500,000 the current market supply of 3.0 mil- grew. ” 3,000,000 area to around 6.0 Grobbelaar added: “We would lion m² leasable expect thatSUPPL the Yrecovery of each million m²2,500,000 by 2011. DUBAI CUMULA TIVE RETAIL 2,000,000

4,000,000 1,500,000 3,500,000 1,000,000

GLA

3,000,000 500,000 2,500,000 0 2007

2,000,000

2008

2009

2010

2009

2010

“We maintain that a return to fundamentals will continue throughout the down swing in this property cycle. Increasingly, investors and end-users shift their attention onto properties where quality of products, location strength, supporting leisure and commercial amenities ,and effective facility management meet end-user requirements,” concluded Grobbelaar.

Key report findings: • Well-planned developments will enjoy stronger demand than poorly designed developments, which enjoyed price appreciation due to market undersupply and speculation rather than quality of product. • 71 per cent of developers surveyed at Cityscape Dubai 2009 believe that the Dubai Market has yet to bottom out. • 77 per cent of the lenders surveyed keep an overall positive outlook for 2010. • Dubai Office Market capacity set to increase by 100 per cent between 2009 and 2010.

DUBAI REAL TIMES

2007

8,000,000 6,000,000

regional market will correlate to the level of exposure the market has to 2010 economic 2011recovery, and any global most importantly, the extent to which the demand-supply dynamic is unbalanced.”

DUBAI CUMULA TIVE RETAIL SUPPLY

DUBAI CUMULA TIVE OFFICE SUPPLY

olliers International, the global real estate consultancy, has released its 2009 MENA Real Estate Overview. The second edition of this comprehensive regional overview provides comparative key performance indicators across seven markets in the Middle East and North Africa (MENA). In addition, Colliers International commissioned three surveys, covering Cityscape exhibitors, financial institutions, and commercial property occupancy in order to assess the pulse of the Dubai real estate market. According to the Cityscape 2009 Survey, which recorded the responses of 28 developers exhibiting at the Middle East’s largest real estate event, 71 per cent of respondents believed that the Dubai market has yet to bottom out. Only 18 per cent of respondents confessed to suspending sales until the market had recovered sufficiently. Sales enquiries were lower this year than in 2008 and focused on residential rather than commercial developments. However, on a positive note, the majority of sales enquiries were for developments in Dubai and Abu Dhabi. The Banking Survey, which aims to develop an understanding of institutional property finance criteria and restraints, included responses from 13 institutions - 10 local and 3 international. Lenders reported a hardening of loan criteria for both residential and commercial property loans, driven by a heightened aversion to risk and ongoing downward corrections in property values. Loan-toValue ratios have been lowered to 50-85 per cent from last year’s peak rate of around 95 per cent, while 80 per cent of institutions are reluctant to lend against properties in developments that are not yet completed or at least close to completion. Despite the current low investor confidence, 77 per cent of the

Number of Units

380,000

MARKET TRENDS & ANALYSIS // PROPERTY PRICES

Sale prices pick up for prime Dubai apartments Communities with completed facilities are preferred choices, but rental rates see minimal change, says Asteco report

DUBAI REAL TIMES

partment sales prices for completed projects in the prime Downtown Burj Dubai area have seen the highest quarter-on-quarter increase of eight per cent, according to Asteco property services company. In its Dubai Q3 2009 report, Asteco says sales apartment prices for Downtown are up from Dh1,200 per square foot in the second quarter to Dh1,300 per square foot in the third quarter, “thanks to the Dubai Mall, the Dubai Fountain and improved infrastructure in the area“ which is overlooked by Burj Dubai, the world’s tallest building nearing completion. However, across the whole of

Dubai, sale prices for completed apartments and villas have increased only slightly with an average one per cent and three per cent compared with the second quarter, according to the report. Rental charges have seen minimal change compared with the same period. The company, which carries out comprehensive property market analysis, says Jumeirah Beach Residence has also seen a five per cent sales increase as a result of continuous opening of retail units, gyms nearing completion and strong interest in leasing from both Dubai and Abu Dhabi residents. Asteco CEO Elaine Jones said: “Both Downtown Burj Dubai and

Jumeirah Beach Residence are highly desirable, fully established communities, which are exactly what the market is seeking. A completed tower is no longer enough if it is not part of an integrated community with convenient access to schools, hospitals, transport, leisure and entertainment facilities. In terms of villa communities, The Springs and Arabian Ranches are faring well for the same reasons.” Asteco reports that transactions and enquiries have picked up in line with mortgage availability. Demand is predominantly for smaller units such as studios and one bedroom apartments, or two and three bedroom villas or townhouses.

“It should be noted, however, that the increased interest in completed communities has resulted in landlords inflating their prices,” the report adds. “In addition, the option to lease these units is making price negotiations less flexible as the need to sell to generate income is lower.” In the Dubai apartment and villa rental market, Asteco reports that “increased interest and rumours of economic recovery have caused some landlords to raise their rents. But many of these units remain empty for several months due to a significant amount of supply and increased competition.” Overall, however, apartment and villa rental rates have seen minimal

In terms of villa communities, Springs and Arabian Ranches are faring well for the same reason as mentioned above with AED800 and AED850 per square foot respectively. Transactions and enquiries have picked up in line with mortgage availability and those who could not afford to buy a unit at the peak of the market are now taking advantage of lower prices. Demand is predominantly for smaller units such as studios and one-bedroom apartments, or two- and three-bedroom villas or townhouses due to the price point. Across Dubai, sales prices for apartments and villas have increased slightly with on average 1 and 3% respectively, compared with Q2 2009. It should be noted, however, that the increased interest in completed communities has resulted in landlords inflating their prices. In addition, the option to lease these units is making price negotiations less flexible as the need to sell to generate income is lower..

Sales and Leasing Property Management Investment Agency Valuation Market Research Property Consultancy Furnishing and Design

AED/ft

Communities alongside Sheikh FOR ADDITIONAL INFORMATION, Zayed Road are the preferred PLEASE CONTACT: Average Apartment Sales Prices and Percentage Change (Q2-Q3 2009) choice, whereas developments Judy Lam around Emirates Road suffer Regional Research Manager from the location disadvantage, Email: JudyL@asteco.com Business DIFC Discovery Down Dubai Dubai Dubai Green Greens Inter- Jumeirah Jumeirah Mirdiff Motor Palm World the report adds. “However, this Bay Gardens town Marina Silicon Sports Communational Beach Lake City Jumeirah Trade Burj Oasis City nity City Residence Towers Centre isWeidling likely to change next year with Jenny Dubai Q2 Q3 Percentage Change Seniorthe Research Analyst opening of Al Maktoum Email:International JennyW@asteco.com Average Villa Sales Prices and Percentage Change (Q2-Q3 2009) Airport.” Asteco reports a noticeable Tel: +971 4 4037777 increase in activity in the leasing Fax: +971 4 4037778 market, prompting tenants to get Arabian Dubai Emirates Green Jumeirah Jumeirah Jumeirah Meadows Mirdiff Palm Springs better value for their money, either Ranches Sports Hills Community Island Park Village Jumeirah City Q2 Q3 Percentage Change by decreased rents, increased property size, better quality or better amenities changes in the third Management: quarter of respectively. Customer +971 4 403 77 00 bedrooms, Dh180,500 for three, specifications www.asteco.com Rates for studios and one- Dh227,500 for four and Dh278,500 and accessibility. “Despite the minus three per cent and zero per apartments are for five-bedroom units respectively. Real Estate Regulatory Agency’s cent respectively, according to the bedroom report. Currently, average rental beginning to stabilise, whereas Asteco says the majority of inquiries attempts to provide a rental rates for studio apartments are there is still room for further drops are for Jumeirah and Umm Suqeim index earlier this year, it is these Dh45,000 while one, two and three for larger units, says the report. where tenants are looking for three- influences which are truly driving bedroom apartments command Villas and townhouses are available bedroom units between Dh150,000 current rental market activity,” the report added. Dh76,000, Dh103,000 and Dh139,000 an average for Dh117,500 for two- and Dh180,000. 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0

2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0

20% 15% 10% 5% 0%

-5%

-10% -15% -20%

25% 20% 15% 10% 5% 0%

LAW UPDATE No. (15) of 2009 Regulating the Hearing of Rental Disputes Arising in Free Zones (Passed on 14 June 2009): Dubai has many free zones, each with jurisdiction over certain activities within it. With the exception of the Dubai International Financial Centre (DIFC), the free zones do not, however, have courts available to review rental and other disputes. Article 1 of Law No. (15) provides that “the Rent Committee shall determine rental disputes arising between landlords and tenants of immovable property in the free zones of the emirate of Dubai.” Article 2, however, states that the provisions of Article 1 do not apply in relation to the following: a. Rental disputes to which any of the free zone authorities in the emirate of Dubai is a party; b. Rental disputes arising within the free zones which are under the jurisdiction of special judicial committees or courts. Article 3 states that the Rent Committee will only hear rent disputes not already determined prior to Law No. (15) coming into effect. Law No. (15) came into effect on the date it was published in the Official Gazette. Accordingly, unless the dispute is within DIFC, it is likely to be heard by the Rent Committee. Law No. (15) of 2009 does not, however, make clear how a dispute should be determined where the property is within a free zone but the lease document contains an arbitration clause. Leases with arbitration clauses in Dubai are excluded from the jurisdiction of the Rent Committee and it may be that the Rent Committee would consider arbitration in accordance with the arbitration clause if it was still the correct venue for determining any landlord or tenant dispute, notwithstanding that the property or dispute arises in a free zone.

Decree No. (22) of 2009 on Private Development Zones in the Emirate of Dubai (passed on 31 May 2009): Decree No. (22) relates to the municipal type functions of the government-related master developers, free zones and other government corporations within Dubai. The decree relates to land within private development zones being lands, compounds and areas owned by ports, customs and free zone corporations, and Dubai World companies such as Nakheel, Limitless, Dubai Maritime City, Istithmar and Dubai Multi Commodities Centre. Article 2 provides that the ports, customs and free zone corporations shall be solely responsible for the following in the Private Development Zones: a. Supervising regulation of all matters related to infrastructure development and the provision of General Services; b. Issuing all types of licences within the Private Development Zones; c. Determining, evaluating, imposing, applying and collecting service fees and budgets and related matters pertaining to the General Services and licences. General Services are defined as gas, water, energy, sewage treatment, wastewater and central cooling services provided to the Private Development Zones, and any additional services the Corporation provides to the Private Development Zones from time to time. Article 3 creates some accountability on the part of the ports, customs and free zone corporations in assessing any service charges by providing that such charges will be coordinated with the Land Department and Real Estate Regulatory Agency. The above legal information is supplied courtesy of Al Tamimi & Company, and printed in the report by Asteco.

DUBAI REAL TIMES

The following laws have been passed in the second and third quarter of 2009 relating to property within Dubai:

MARKET TRENDS & ANALYSIS

Location again a priority as rental prices soften Dubai Metro expected to play important role in office lease market, says Agent

ith lease rates in Dubai declining as more new buildings become available, office location rather than price will again become a priority in determining where a company sets up business, says Asteco, the largest

metro lines increase significantly – 57 per cent in the case of the Tokyo – Kobe line in Japan. However, what is interesting is that the increases do not occur usually until after the stations physically open, not when the line is announced or under construc-

tant element in company decisionmaking about where to locate.” Phase one of the new Ibn Battuta Gate mixed-use development is being managed by Asteco Property Management on behalf of Dubaibased owners Seven Tides. “Ibn Battuta Gate is located at the

of retail space and entertainment attractions. Ibn Battuta Gate, which features a dramatic entrance arch larger than the Arc de Triomphe in Paris, also has direct access to Sheikh Zayed highway. The office complex has a basement parking for over 350 cars and automatic

Ibn Battuta Gate features a dramatic entrance arch larger than the Arc de Triomphe in Paris

Robotic car parking for office workers

DUBAI REAL TIMES

Ibn Battuta Gate

property services company in the United Arab Emirates. “The decline in the real estate market is helping to re-position Dubai once again as an attractive business location giving companies the ability to shop around for the best value for money,” said Asteco CEO Elaine Jones. “Offices which can offer substantial amenities for staff will be the first to benefit,” she added. In addition, evidence from many international markets consistently reveals that land and property values and ultimately rentals, within the vicinity of stations linked to new

tion. According to the RTA, the Ibn Battuta metro station will be operational by February 2010. “This is not surprising,” said Jones. “In property matters it has always been a question of location, location, location and office developments like Ibn Battuta Gate - located in close proximity to a Metro station as well as a shopping mall and ample parking - will increasingly become the preferred option. “As more Metro stations are opened and people become aware of the benefits, the ease of commuting by Metro for office staff will prove to be an increasingly impor-

very heart of Dubai’s new residential and commercial corridor,” Jones added. “The complex is within 400 metres of a Metro station due to open soon which will provide direct access to the commercial business heart of the Jebel Ali free zones as well as Dubai Marina, Jumeirah Lake Towers, Internet and Media Cities, Dubai Financial Centre, Dubai World Trade Centre and Central Dubai itself.” With 40,000 square metres of leaseable modern office space spread over 11 floors, the office complex is also next door to the mall with its 300,000 square metres

parking for a further 760 vehicles. “In further phases, the Ibn Battuta Gate offices, will also benefit from a five-star Moevenpick Hotel and a residence, so office tenants will be able to take advantage of short or long-term accommodation as well as the hotel facilities,” added Jones. Founded in Dubai in 1985, Asteco is a major regional and international real estate services firm. It offers clients independent market analysis, design development consultancy and valuation services, sales and leasing services, as well as asset and property management services.

MARKET TRENDS & ANALYSIS

Survey of real estate salaries Survey reveals current average base salary of real estate professionals in the region down by 3.7 per cent from last year in previous years, which shows a general confidence in the region and a desire to continue their careers here. 06 “The real estate industry will continue to evolve over the next Employer Type What is the main activity of the organisation? few years, bringing with it new opportunities for professionals. 2007 2008 2009 The long-term prospects of the region - driven mainly by its strong fundamentals - remain vibrant. Fortysix per cent of the respondents still strongly believe that the property market will get better over the next 12 months. This illustrates that professionals believe that the (left to right): Matthew Taylor and William Buck Middle East Real Estate Salaries Middle East is the major global real estate market to work in at present. estate professionals double the Average Middle East Real Estate Salary What is your current monthly base salary in $USd? number of participants last year We recognise the importance of - took part in the online survey, providing honest, consultative advice which was conducted in July and and were proud to launch this year’s August 2009. Of the total number ‘Middle East Salary Survey’ to visitors of respondents, 43 per cent are at ‘Cityscape Dubai 2009’,” concluded working in Dubai (down by 27 per Matthew Taylor, Director, Macdonald cent compared to last year), while 19 & Company. A free online version of the per cent are working in Abu Dhabi (up by five per cent since 2008). This survey is available on www. Middle East Real Estate salaries year’s survey was also participated macdonaldandcompany.ae and www. in by a respectable percentage of cityscapeintelligence.com. In addition, respondents from other Middle East a more comprehensive online the real estate market. Despite 08 the current economic climate, the countries. Insights from the survey statistics package is available at a cost Bonuses showed that respondents are for those who wish to use the survey job market has not, and will not, also grind to a halt. Many organisations far more likely to consider working in more detail, for benchmarking, Annual Bonuses Received budgeting and planning purposes. other East value locations thanBonus are taking the opportunity to ‘up in What was Middle the approximate of your annual (or Bonues) over the last 12 months? skill’ or expand teams that have suffered long term skill shortages,” $5.0K - $9.9K 8%(-5%) $10.0K - $24.9K 13% (-4%) said William Buck, Director, Up to $4.9K 9% (-4%) Macdonald & Company. “Also, there 8% 13% 9% is an emergence of a new breed of $25.0K - $54.9K + 7% (-10%) 7% professionals whose proficiency lies in maximising the value of real 4% $55K plus 4% (-3%) estate assets, as companies are restructuring, refinancing and re59% of the survey respondents received no bonus whatsoever, 18% more than last year. Nil 59% (+18%) determining their position in line Only 41% received any kind of bonus (down from 59% last year). The average bonus per year was with current market conditions.” USd$13,630 (down from $15,446 last year). Bonuses A total of 2,083 Middle East real 50%

43% 36%

There is a 6% increase in the number of respondents from owner/operators versus the previous year.

29% 21% 14% 7%

Consultancy

Developer

Contractor

Owner/ operator

Investor

Financial Services

Other

US$11.000

The average base salary of a Real Estate professional in the Middle East is USd $10,340 (38,040 aEd) per month. Taking this view and in comparative terms the average salary has decreased by 3.7% versus the previous year, though still 7.2% higher than in 2007.

US$10.500

US$10.000

US$9.500

The average salary decrease has been consistently applied across the “years of experience” in the industry.

US$9.000

2007

2008

2009

Base: all giving an answer (2007: 850. 2008: 1,033. 2009: 2,083)

Market Sentiment Salary and responsibility are the most important factors when it comes to job satisfaction, followed closely by job security, career progression and management style within the organisation.

Job Satisfaction

DUBAI REAL TIMES

acdonald & Company, property recruitment specialist and the only one accredited by the Royal Institution of Chartered Surveyors (RICS), unveiled the third ‘Middle East Salary Survey’ at the opening of Cityscape Dubai 2009. According to the survey, the average base salary of regional real estate professionals across all disciplines is $10,340 (Dh38,040) per month - a figure that exceeds 2007 numbers by 7.2 per cent, but reflects a 3.7 per cent drop from last year. Completed in collaboration with The Royal Institution of Chartered Surveyors (RICS) and Cityscapeintelligence.com (CI), the annual survey is the most comprehensive survey undertaken for the property sector. Further findings from the survey revealed that only 21 per cent of respondents received an increase in base salary this year - significantly down from 71 per cent the previous year. Moreover, 19 per cent of the respondents have received a salary reduction (versus one per cent last year), while 37 per cent experienced no change in salary (versus 35 per cent last year). Assessing current market sentiment, the study listed salary and responsibility as the most important factors when it comes to job satisfaction, followed closely by job security (up by 13 per cent on last year) and career progression. Interestingly, the offer of a better salary is still the most likely impetus for changing job being cited by respondents. “There are early signs of improvement in the world economy, but confidence and availability of capital continue to severely affect

MARKET TRENDS & ANALYSIS

Buyers put their properties under microscope

DUBAI REAL TIMES

s market conditions LPM’s expert team of have fuelled property surveyors is qualified to carry out buyers to become comprehensive technical and increasingly more photographic reports that identify selective in choosing their homes any defects in a new property. The or investments, Landmark Property report advises new homeowners Management (LPM) is pioneering on the steps they should take to new methods to ensure that these look after their property, enabling same conscientious buyers can them to provide developers with fully understand the condition of a full rectification or ‘de-snag’ their newly-purchased property list and ensure that everything during the handover period. within the property is fitted and In a bid to protect and educate working at the time of handover. new property owners in Dubai By employing this service, costly the company recommends replacements can be avoided at a Donna Newman carrying out a comprehensive Condition Survey at the time of handover to garner an in-depth understanding of any defects for which developers are liable during Around the power socket proper finishing G/Floor the standard one-year defect required 18 Around the power socket proper finishing G/Floor required socket proper finishing Around the power G/Floor liability period. Defects include required faulty electrical sockets, poor Rear entrance slop area minor masonary works Rear entrance area 19 Rear entrance slop area minor masonary works Rear entrance area tiling, unlevelled floors or ceilings, required Rear entrancerequired slop area minor masonary Rear entrance area inferior paintwork, and misaligned works required 20 Rear entrance slop area painting marks to be Rear entrance area Rear entrance slop area painting marks to be Rear entrance area doors and windows. removed by the main contractor removed by the main contractor Rear entrance slop area painting marks to Rear entrance area “Having a professional carry be removed by the main contractor out a Condition Survey provides 21 DEWA trunking near LV room‐ Health & Safety Outside Near LV room DEWA trunking near LV room‐ Health & Safety Outside Near LV room Issue buyers with an in-depth picture DEWA trunking near LV room-Health & Outside Near LV room Issue Safety Issue of their property at the time of 22 Curbstone to be fixed near the security barrior handover and a list from which Curbstone to be fixed near the security barrior Curbstone to be fixed near the security the developer can work to ensure barrior 23 One number interlock missing Near Security Barrior greater buyer satisfaction and One number interlock missing Near Security Barrior better return on investment,” One number interlock missing Near Security Barrior 24 Rubber mat to be provided in LV Room‐ Health LV Room explained Donna Newman, Rubber mat to& Safety be provided in LV Room Head of Landmark Property LV Room-Health & Safety detector Rubber mat to be provided in LV Room‐ Health LV Room Management. “Putting the new & Safety 25 Masking tape to be removed around the smoke All Masking tapedetector to be removed around the All property under a microscope smoke detector ensures that developers rectify Masking tape to be removed around the smoke All 26 Gap to be filled with fire proof foam–cable tray LV Room Gap to be filled with fire proof foam-cable LV Room LV room detector faults and defective workmanship tray LV room at their cost, not the homeowners, Gap to be filled with fire proof foam–cable tray LV Room as they are contracted to do so.” LV room -3-

-3-

later stage, helping to ensure that properties maintain their value and that the new home owner is paying for a valued property. “Until now, many of the region’s new homeowners have not been aware of their rights when taking possession of a new home,” continued Newman. “However, having a snagging report or Condition Survey carried out to make sure that everything is fitted and working correctly at the outset will provide greater peace of mind while potentially saving substantial outlays for replacements at a later stage.” By commissioning LPM to conduct a Conditions Survey at the time of purchase, owners can take full advantage of the Defect Liability Period (DLP), a one-year contractual entitlement in which buyers can report defects in their newly purchased property which are then the developer’s responsibility to rectify. During the Defect Liability Period, consultants work with owners and carry out a thorough and detailed photographic evaluation of the property, ensuring that any defects are identified and rectified by the developer thus saving the owner the expenditures. While property developers conduct a basic snagging prior to handover, the experience and training of the LPM Consultants ensures that building, mechanical and electrical faults are properly identified and rectified.

MARKET TRENDS & ANALYSIS // FINANCIAL ROUND-UP

Meydan signs Ijara agreement From left to right: Meghnad Warrier, Financial Controller – Meydan Group; Mohammad N. Al Khayat, Commercial Director – Meydan Group; Saeed H. AlTayer, Chairman, Meydan Group; Abdul Kareem Showaiter, Deputy CEO, EIB; Amr Arafa – Head of Investments, EIB and Yasar Abdul Sattar Kalthoum, Investment and Syndication Operations Manager, EIB.

eydan Group L.L.C, developer of Meydan Grandstand and Racecourse that will host the Dubai World Cup in March 2010, recently announced the signing of a Dh100 million Islamic financing facility with Emirates Islamic Bank (EIB). The signing ceremony was officiated by Mr. Saeed H. Al-Tayer, Chairman of Meydan and Mr. Abdulla Abdul Kareem Showaiter, Deputy CEO, General Manager of Corporate & Investment of EIB. The developer will use the longterm Ijara, or Shari’ah compliant Islamic financing, to fund the further development of the Falcon Car Park adjoining the Grandstand. The Islamic financing facility, a first for

the company, will go towards the construction of the car park which will have a million square feet of leasable area. The Falcon Car Park takes its name from its architectural design, which, when seen from above, is shaped like the outstretched wings of a falcon. The signing ceremony took place along the sidelines of Cityscape Dubai 2009. Meydan was a significant participant, and its exhibition stand was one of the biggest at the event. It showcased all four of its sub-districts collectively known as Meydan City. Mr. Al-Tayer said that the partnership with EIB will further strengthen Meydan’s value proposition as a world-class horseracing venue; the grandstand and racecourse features

Long-term financing facility will support funding of Meydan Falcon Car Park Meydan City is the brainchild of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice-President and Prime Minister and Ruler of Dubai. It is the culmination of his vision to create not just the ultimate venue for horse racing, but also an integrated city that is sustainable, environmentally responsible and also one that positions Dubai at the centre of the competitive global business stage. Meydan City will feature the Meydan Free Zone and four distinct subdistricts – the Meydan Racecourse; where the Meydan Grandstand will take centre stage and be home to the 2010 Dubai World Cup, Meydan Metropolis; a series of state-of-the-art business parks, Meydan Horizons; where business towers intermingle with luxury waterfront developments and Meydan Godolphin Parks; with its distinctive Godolphin Tower created in the image of a thoroughbred and also where the shopping destination Signature Mall is located. cutting-edge all-weather surface and turf tracks, a grandstand that can hold up to 60,000 people, a five-star hotel, an IMAX theatre and luxury corporate suites that offer unobstructed views of the racetrack.

He said: “This Ijara agreement is the beginning of a long-term partnership that will reaffirm EIB’s reputation as a well-respected, leading Islamic bank and a significant move for future Islamic facility tie-ups.”

anmiyat has revealed details of a new payment plan for all of its developments in the United Arab Emirates (UAE) including flagship project ‘Living Legends’. The new plan for Tanmiyat’s customers was drafted in consultation with several investors and sales agents to ensure the viability of the schedule. All payment timelines are benchmarked against construction milestones as per the latest RERA law. In developments like Living Legends, where villa construction is ongoing and will be completed at the end of 2010, investor payments are expected to be completed over the course of the coming year. The final calendar of payment

Dr. Wan Hasni

reflects the realities of today’s real estate market and allows both the developer and its clients the freedom to pursue a variety of solutions. Dr. Wan Hasni, Advisor in Charge of Tanmiyat, said: “In May 2009 we advised all our customers to stop

making their payments as we were going to review the schedule of payments against the construction progress. Last month, we began communicating the revised, RERAapproved payment plans to our customers.” “Our newly enhanced customer relations department caters to our customer’s requests and has been offering them guided tours of our construction sites. We’ve received wonderful feedback and have many more satisfied customers willing to go forward with our new payment plan,” he continued. Several investors have welcomed both the new plan and the added degree of transparency Tanmiyat has

begun to introduce to the process. “In the past, there wasn’t always clear communication to investors, but with new management on board there has been a marked improvement,” said Shabir Suleman, owner of 70 properties in the Living Legends development. “I’ve been able to tour the site to view the status of construction, and I’ve seen first hand the advanced state of the development.” “I was one of the several investors who were asked to review the new payment plan prior to its implementation, and I, personally, am quite comfortable with the new timelines that have been put in place,” continued Suleman.

DUBAI REAL TIMES

New payment plan for Tanmiyat customers

MOVERS & MERGERS

Malcolm Wall Morris appointed CEO of DMCC • DGCX CEO takes over DMCC; draws upon professional background and expertise in commodities sector • Outgoing DMCC CEO Dr. David Rutledge retires following more than six years at DMCC and decades in international commodities, financial and derivatives markets

DUBAI REAL TIMES

ubai Multi Commodities Centre (DMCC) has appointed Mr. Malcolm Wall Morris, formerly Chief Executive Officer of the Dubai Gold & Commodities Exchange (DGCX), as its new Chief Executive Officer. Mr. Wall Morris replaces Dr. David Rutledge, who is retiring after more than six years of service at DMCC, including the previous five as Chief Executive Officer. Dr. Rutledge has served as both Chairman of DGCX, and more recently, as an active board member working closely with Mr. Wall Morris on the development and management of the region’s largest derivatives market. A commodities expert with over 15 years of professional experience, Mr. Wall Morris was appointed CEO of DGCX in 2007, following his tenure as Head of Business Development, Commodity Products, at Liffe, the derivatives business of NYSE Euronext. At DGCX, which is 51 per cent owned by DMCC, Mr. Wall Morris led the exchange into the next stage in its strategic growth, consolidating its position as the leading derivatives exchange and preferred platform for executing commodities and currencies business in the Middle East. During his tenure as CEO of DMCC, Dr. Rutledge led the expansion of the organisation’s focus from only precious metals to encompass a much broader array of commodi-

Wall Morris led the exchange into the next stage in its strategic growth, consolidating its position as the leading derivatives exchange and preferred platform for executing commodities and currencies business in the Middle East

Malcolm Wall Morris

ties, including tea, cotton, precious gems, plastics, pulses and energy. Since he joined DMCC, the Centre has realised its long-term goal of establishing Dubai as a hub for the global commodities trade. Last year, DMCC opened its new permanent offices at the Almas Tower in Jumeriah Lakes Towers (JLT). JLT is DMCC’s master-planned freezone community, which as of the end of August 2009, had registered over 1,700 companies wishing to avail themselves of the stateof-the-art infrastructure designed to support the needs of the global commodities trade. Over the previous decades, Dr. Rutledge held a range of senior po-

sitions at leading firms active in the commodities and financial markets in the United States and his native Australia. “Dr. Rutledge has made an enormous contribution to the sustained growth and diversification of DMCC, and we will all miss his astute professional guidance and personally gentle nature,” said Mr. Ahmed bin Sulayem, Executive Chairman of DMCC. “At the same time, we are extremely pleased to welcome Mr. Malcolm Wall Morris as the Centre’s new Chief Executive. A partner and colleague who provides fresh energy and keen industry insights, he will guide DMCC to the next stage in its ongoing expansion.” Dr. David Rutledge

Patrick Heuze takes over as COO of Emaar Hospitality Group

Patrick Heuze

maar Hospitality Group LLC, the hospitality & leisure business subsidiary of Emaar Properties PJSC, has appointed Mr Patrick Heuze as

Chief Operating Officer. Reporting to Mr Marc Dardenne, Chief Executive Officer, Mr Heuze will assume a leadership and guidance role to ensure a key focus on quality standards, superior guest experience, high operational efficiencies and upholding the brand’s core ethos across all properties. Mr Heuze joined Emaar Hospitality Group in September 2007, and within a year, was promoted as Senior Corporate Director of Devel-

opment and Operations. His most recent position was in the capacity of Senior Director - Hospitality Asset Management & Development for Emaar Properties PJSC. In his role, Patrick was instrumental in the project and development division of the group while also maximising the performance of Emaar Hospitality assets composed of The Address Hotels + Resorts; Nuran Serviced Residences; Hayya! Recreation Clubs; Arabian

Ranches Golf Club; Dubai Polo and Equestrian Club; Dubai Marina Yacht Club and other hospitality properties. A French national, Patrick joined Emaar Hospitality Group from Sunland Hotels + Resorts, Maldives, where he was Vice-President. During his tenure at Sunland, he expanded the business from one to five hotels and led and motivated a team of 800 associates across the business.

lobal holding company Dubai World has largely completed its organisational restructuring. This has resulted in significant cost savings and increased efficiency. Its businesses are now well prepared to thrive in both the current climate and the still uncertain future environment. The reorganisation builds on the changes announced in June, when management of Jumeirah Golf Estates, Jumeirah Lakes Towers and the real estate activities of Dubai Maritime City moved to Dubai World real estate company Nakheel. As a result of the overall reorganisation, the company is scheduled to benefit by more than $800 million dollars in operating savings over the next three years. The total workforce managed by Dubai World companies globally has been reduced by approximately 15 per cent to less than 70,000. This includes approximately 45,000 international workforce of DP World and Drydocks Word. However, the reduction is around 25 per cent in the UAE, largely as a result of the downturn in the real estate market

in the region. Each Dubai World division is now more appropriately sized for the current market, while at the same time, well-placed to take advantage of the eventual economic recovery. During the process, each division reviewed its business plans and developed a clear strategy in line with its specific area of expertise, and reviewed their operations and costs to better reflect the current environment. Importantly, the ownership of the key assets underpinning Dubai World’s balance sheet remains unaffected by the organisational restructuring. Dubai World Chairman Sultan Ahmed bin Sulayem said: “While the challenges we faced are not unique, with no global entity immune from the pressures of the worldwide recession, we are confident that Dubai World and its subsidiaries are properly structured to embrace the new global reality. Our diverse portfolio of assets around the world, together with our significant interests here in Dubai, provides us with an exciting and compelling future. With the reorganisation, the group

enters this next vital phase of our evolution, better able to withstand all economic eventualities.” Some of the key highlights of the restructuring are: Nakheel, the real estate development arm of Dubai World, has reorganised to focus its activities on that core business. The company is now structured into two divisions – asset management and real estate development. It is now responsible for management of some real estate assets previously managed elsewhere in the group, and includes the management of several hotels and commercial property from Istithmar World, who will continue to own these assets. Istithmar World Istithmar World is the investment arm of Dubai World. Istithmar World Ventures and Istithmar World Capital have been merged and Istithmar World’s activities are now focused principally on the ongoing management of assets already acquired by Istithmar World. In addition, Istithmar World will manage the assets of Dubai World Africa in addition to the Victoria & Alfred Waterfront in

Cape Town, South Africa. Retailcorp World Retailcorp World is the newly created retail management arm of Dubai World formed from a division of Nakheel. It will manage all of the UAE-based retail activities within the group, including shopping malls (Ibn Batutta Mall and DragonMart), food and beverage outlets and distribution, hypermarkets, and retail and food and beverage outlets in South Africa, formerly managed by the Nakheel Retail division. Other key subsidiaries Drydocks World and Ports and Free Zones World, which is made up of DP World, Economic Zones World and P&O Ferries, have maintained their current structures and are well positioned to weather the downturn and continue to progress, despite the more difficult environment. Internationally focused real estate developer Limitless has also been rationalised and reorganised. It is now focused on maximising value through managing its investments in five development projects internationally, in Saudi Arabia, Jordan, Russia, China and Vietnam, as well as the mixed-use development Downtown Jebel Ali in Dubai.

DUBAI REAL TIMES

Dubai World organisational restructures

COMMENTS

SMEs hold the key to UAE’s real estate growth Increased liquidity for small and medium-sized businesses will drive demand for office space as well as affordable residential property, says expert

DUBAI REAL TIMES

mall Medium Enterprises (SMEs) could drive demand for both office space and affordable residential property in the UAE if they can secure bank loans to finance startups, provide working capital and investment for expansion and growth, according to an industry expert. “It is widely accepted that SMEs account for approximately 80 per cent of the UAE’s economic activity, which means that collectively they employ a large number of staff, require industrial, commercial and office space and naturally employees need housing. However, they are restricted by a lack of liquidity,” said Mohammed Nimer, CEO of MAG Group Property Development. According to the Dubai Chamber of Commerce these companies are having trouble securing credit from UAE banks. If they do, the terms are short, usually three to six months and the interest rates for unsecured loans are averaging around 15 per cent due to their perceived high-risk category. According to Ruwad Establishment, there are over 260,000 trading and industrial companies in the UAE of which over 200,000, are classed as SMEs. The UAE classifies companies according to the number of employees and the level of investment, and in general, an SME has less than 100 employees with an investment range between Dh200,000 and Dh2 million. “Imagine the stimulus to the housing market alone if each SME averaged just one new employee per annum, not to mention the benefits to the wider economy – airlines, hotels, restaurants, shopping and so on,” added Nimer. A Dun & Bradstreet report

estimated earlier this year that loan rejection rates were in the range of 50-70 per cent, due in part to the bank’s difficulty in gaining access to accurate financial statements and in rare cases the complex and time consuming process of recovering money or liquidating seized assets. Other statistics of the survey provide equally grim reading. Of those polled, just 25 per cent of small businesses used a secured loan and only 13 per cent had used an unsecured loan, while 45 per cent used an overdraft and 55 per cent a letter of credit facility.

Nimer acknowledged government efforts such as the lowering of minimum investment levels to form a company. He also praised the support provided by institutions like the Mohammed Bin Rashid establishment for Young Business Leaders and the Khalifa Fund. “However more needs to be done to unlock the potential of the SME sector, banks must relax their lending criteria, SMEs are the backbone of many developed economies and they hold the key to real ecomonic growth in the UAE,” added Nimer. “It is interesting to note that

“Mid-range properties will be the first to recover,” says MAG Group CEO Mohammed Nimer.

SMEs are responsible for 30 per cent and 28 per cent of US and Japan’s exports respectively. China’s two million SMEs have greatly increased their exports and Toyota depends on SMEs to produce 80 per cent of its car parts,” said Nimer. Nimer applauded the recent initiatives to improve transparency and regulations and agreed that liquidity was not the only hurdle the real estate industry needed to clear. “The Dubai real estate market in particular has witnessed the more unsavoury side of property development. Financial irregularities, land ownership disputes, cancelled and delayed projects and poor quality finishes,” he said. Nimer agreed confidence needed to be restored, but added that liquidity was at the root of the problem and would continue to play a critical role. “Owners and staff of new small businesses with aspirations as owner-occupiers will still need mortgages,” said Nimer. Having been in business now for 30 years, the MAG Group has an enviable track record of stability and consistency and it is that sort of profile that new investors will be looking for when the inevitable upturn arrives. In total, MAG has a property portfolio in excess of Dh3 billion and was one of the first developers to create Escrow accounts for all its projects, long before the Dubai Government introduced Law number 8. In October last year, MAG Property Development was awarded ISO 9001 certification by risk management company Der Norske Veritas (DNV) and still remains one of the few developers in the region to be accredited to that standard.

COMMENTS

Confidence in Dubai intact Falconcity of Wonders Chairman Salem Al Mossa says regulation is only helping strengthen faith in the real estate market

“W

e have come a long way” was the only comment that Salem Al Moosa, Chairman, Falconcity of Wonders gave when asked about the status of the project that was launched in 2005. The Dh5.5 billion project in Dubailand is designed to spread over an area of four million square metres and is divided into five overlapped phases. The purpose-built community project features structures based on the wonders of the world, such as the Pyramids, Hanging Gardens of Babylon, the Eiffel Tower, Taj Mahal, the Great Wall of China, Leaning Tower of Pisa and the Lighthouse of Alexandria. Talking on the sidelines of Cityscape Dubai last month, Salem Al Moosa said that he does not look at exhibitions as a sales platform for his products. “Our interest in being part of exhibitions of this nature is to get feedback from people who come to these events. The idea is to get an idea of the market trends. We come to know about people who are keen on investments in the real estate sector. This is also a good opportunity to assess the demography of the people who are interested in buying. This is also a platform to meet people related to our sector such as engineering

Salem Al Mossa

consultants, suppliers, contractors - it is almost like a one-stop-shop for us.” Talking about the crisis that took all businesses by surprise, Al Moosa says there is no need to be panicky about the situation. “In real estate, unlike the share market, your investments won’t be wiped out. Dubai is a real investment heaven. The factors making the emirate a good bet for investments is that there is good governance, infrastructure, and the fundamentals of the economy here are strong.” He goes on to add that people who left the emirate in the aftermath of the crisis will return sooner or later. Praising the new initiatives taken by RERA to regulate the real estate sector

here, he expresses confidence in investors being assured about their investments in a government regulated market. “I won’t say that the rest of the places are not good for investment, but if you go to the US, Pakistan, India or Britain, your investments would be hit by income tax regulations. In some places, you would probably have to give away half of what you make, but here you bag your profits. The government may charge some amounts here and there but that is nothing when you compare it to the amount of money that investors have to shelve out to invest in other countries,” he defends. Elaborating further, he says, “an investor ends up with 90 per cent of what he makes going in his pocket and it can either be transferred anywhere or can be reinvested here in Dubai or can be stacked in a locker; and the government guarantees it. It is not possible to find this kind of business friendly atmosphere and flexibility anywhere else in the world, so I don’t understand why people are fooling themselves by saying that they are going to choose some other place over Dubai for their investments.” Appreciating the clean up initiated by RERA, Salem Al Moosa says that the move making

construction-linked payments assures investors that their money is safe. “Elsewhere, you can buy an old flat, refurbish it and then sell it and make a bit of money. Where in the world will you find developments of the magnitude that we are talking about here? Intervention by RERA has also ensured that speculators are kept at bay from the market,” he says. Crediting investors with being “wise enough” to make informed decisions about the markets to invest in, Salem says Dubai is reaching that state of maturity thanks to government efforts. However, when quizzed about investment consultants expressing concern over regulation in the market, Salem Al Moosa said that without regulation, “everything becomes a salad.” He says that he is sceptical about people who are “spreading the rumour about investor scepticism. Either these people are fishing in polluted water or they are here to make a fast buck. There is no place for such people in the market.” Salem Al Moosa also reiterates his belief that the UAE is “the best place to do business” and that he does not find the need to shift his focus away from the sector in the country. He is also confident that his pet project Falconcity, when complete, will be “one of the best”.

DUBAI REAL TIMES

By Ambily Vijaykumar

COMMENTS

A strategy for success The ability to afford property has come under pressure, which is forcing real estate agencies to raise their game. Here, Cecilia Reinaldo, Managing Director of Fine & Country Middle East, tells Dubai Real Times why strong business fundamentals, specialisation and professionalism are key to estate agents and the property market moving ahead

DUBAI REAL TIMES

s Managing Director of Fine & Country (Middle East), I am privileged to visit our international licencees far and wide. Most recently I attended the launch of our three new offices in Malta and very quickly identified with the same core values that differentiate good from an average agency. I was soon reminded that the best practice is the over-riding and determining factor of a good estate agency. Obviously, it helps to have brand recognition and some independent operators maintaining ultimate professionalism throughout, but it seems that wherever I travel, the same raw ingredients of honesty, resourcefulness, endeavour, and most importantly, putting the client first, make good estate agents stand out from the usual. The UAE can be no different and surely the agents skilled and committed to the market in which we work, will continue to thrive in the

industry. Certainly these are fundamentals, which form the basis of RERA’s intention to develop the Dubai property market for those agents willing to embrace new regulations, with the ultimate aim of client satisfaction. RERA is surely right in seeking to ensure that the Dubai property market matures with better equipped professional practitioners, to regain its enviable ‘first class city’ status. One of the more interesting initiatives, which I have witnessed internationally and now seems to be part of the local evolving regulatory accreditation, is the concept of specialisation and how those agents, who focus on a particular market sector, have very quickly been identified as experts in their particular location. Being a specialist has proven to be ‘value added’, not only to the agent concerned, but also and more importantly, to the buying and selling public. Specialisation

is sometimes difficult for existing businesses to adjust to. However ultimately, intimate knowledge of a particular location, property type or price is something sellers and buyers immediately associate with. A specialising agent should be familiar with the law of contract, foreign exchange, wealth management, estate preservation, off-shore trusts, Shariah law etc. It goes further by qualifying various properties on offer and, as appropriate, the various finance options, prospects and marketing initiatives; all of which form a crucial understanding of the market in which they operate. A specialist can target energies in to a limited amount of properties and qualify the properties with unique marketing initiatives to deliver excellence in the market in which they operate. For example, if you are moving house would you go to a conveyance or a litigation lawyer? How many times do you hear

‘’generalist’’ agents saying “it is about Dh2,000 square feet”? We all need to raise the bar to ensure that estate agencies maintain the professionalism they deserve. After all, we yield extremely well when we do things right and I suspect the specialist will win the day with his/her market intelligence, since this is surely superior to the generalist approach. Undoubtedly every home seller who is serious about selling their property in any market should be willing to pay more in order to attract superior specialised ‘agents of knowledge’. My opinion is only one, but the specialisation seems to be a recurring theme, and perhaps over time, those who embrace change, will survive and we all will benefit. Let’s hope that the worst of the economic downturn is behind us, so there should be better times ahead, as it is our own collective responsibility and our future lies in our own hands.

COMMENTS

Infrastructure is an important economic element in need of constant development

Dubai Metro brings economic and social change

ith the launch of the Dubai Metro having already taken place, many people may wonder why the government of Dubai continues with the development of the project despite the current economic and financial turmoil that has hindered, delayed and led to the termination of numerous other infrastructure projects. But the emirate’s decision to continue with the Dh28 billion project is a sound one that displays a good understanding of current conditions combined with positive outlook, looking forward to a bright future that will require a strong economy and an advanced infrastructure. The Dubai Metro represents the practical execution of the Dubai Road and Transportation Authority’s (RTA) strategies for 2015 concerning infrastructure, which aim to provide an integral road and transport system that allows for fluid vehicle movement and the highest safety standards, as well as revolutionising the concept of ‘public transportation’, which is well known across the world for its timeand effort-saving features. Infrastructure is the backbone of every successful economy,

espcially with the many facilities and services it provides to all areas of the community, including investors and businessmen looking for ripe development opportunities to continue their activities. As such, the Dubai Metro, which incorporates a long-term strategic design for its development and operation, will have a strong positive impact on the emirate’s economy. Now is the right time for the development of infrastructure that is based on well-laid plans and principles of economic growth encouragement, since economy and infrastructure are inseparable elements of any country. Therefore, it is imperative to set project priorities based on projects’ contributions to economic growth and their ability to create job opportunities for citizens and the private sector. Numerous Arab countries have invested large sums of money in developing advanced infrastructure, but it is even more important to ensure that there is enough money for maintanence and upgrade purposes, as today’s modern infrastructure could easily become outdated in a few years. The Dubai Metro, which is

Eng. Salwa Malhas

“ Infrastructure is the backbone of every successful economy, especially with the many facilities and services it provides to all areas of the community” says Eng. Salwa Malhas expected to provide Dh17 billion over ten years, covering 50 per cent of the project cost, may bring more benefit for Dubai’s local economy

due to the economic and social change it will bring to the everyday lives of Dubai’s citizens and residents who are used to daily traffic jams and high transport costs. Needless to say, the development of integrated transport methods in Arab countries contributes greatly to their competitive edge, both locally and internationally, which in turn increases their economic growth due to the development infrastructure which is the main factor in attracting investments and pumping capital into advanced and mature investments. What is more, the development of alternative transport also reduces traffic jams – the cause of much frustration in the Arab World – and eases traffic flow between different areas, which cuts delays, facilitates official dealings, reduces costs, and ultimately increases productivity. We can see from the above that the Dubai Metro is a major element in Dubai’s sustainable economic growth process due its numerous features, especially the economic ones, which will help transform Dubai from a regional city in the GCC, the Arab region and the Middle East, into an internatioal city on par with the most advanced capitals of the world.

DUBAI REAL TIMES

By: Eng. Salwa Malhas, Executive Vice-President at Al Mazaya Holding

COMMENTS

Real estate deal falling apart? Call the escrow agent

DUBAI REAL TIMES

s a last resort in May 2009, and in an attempt to salvage a real estate transaction, a desperate broker called enTrust & Title to see if there was any way to instill confidence in the buyer so he would move forward with the purchase of his seller’s property. The buyer was rightfully demanding that if his purchase funds were going to be used to pay off the seller’s debt to the developer before the property actually transferred, there was a risk of the buyer not receiving title to the property thereafter. Unfamiliar with escrow services, the broker was delighted to learn that as the escrow agent, the company would not only secure funds until the transfer was completed, it would also handle all aspects of the transaction including prorating the rents, providing accounting to each party, collection and disbursement of fees and commissions, registering title deed certificate at the Land Department and sending the original documents to the principals. Finally, the deal was signed and all the participants were extremely pleased with the transparency of the transaction and the speed and simplicity with which it was closed.

Title conveyance services as a neutral third party The UAE e-Government initiative has attracted the Silicon Valley entrepreneurs to create the world’s first high technology real estate title conveyance services company in Dubai. “The operating principle of enTrust & Title group of companies is to provide complete transparency, simplicity, speed and security in any real estate transaction by acting as

a neutral third party intermediary”, said Aziz Valliani, Chairman and CEO of enTrust & Title Ltd. “Starting professional services in our market is a great move that is in line with our strategy to insure professional service providers satisfy the investors. The knowledge and the technology that exist within the company will save investors time and will assure them better due diligence before entering in a deal,” said CEO of the Real Estate Regulatory Agency (RERA), Marwan Ahmed bin Ghalita. The enTrust & Title online services enable parties in a transaction to deliver ‘closing instructions’ to the company that spell out exact responsibilities and key deliverables in their Sale and Purchase Agreement or MoU. Highlighting the documentation, Lisa Dale a property partner at the law firm of Al Tamimi & Company validated that “they are very thorough and in conformance with the local laws, regulations and procedures.” The biometrics of the principals captured during the signing of the closing instructions are used to validate the authority and ownership of the seller and identify the buyer and his or her pertinent details. The company reviews the ‘closing instructions’ to determine and obtain specific powers of attorney from both parties to coordinate with the government authorities, lenders, strata managers and utility companies, to obtain exact fees, outstanding loan amount, new loan amount, strata fees and any outstanding obligations. A ‘settlement statement’ is then provided to each party, so they

would have a clear understanding of funds required to close the deal and the net proceeds that will become available to the Seller. Upon approval, the company proceeds to register the transaction by coordinating funding of the buyer’s new loan and pay the seller’s existing loan to avoid duplicate interest and protect double mortgage on the property. The new loan funding request is only made when the buyer’s funds are in place and all paperwork is ready to register the transfer of property to

information to be stored in about one square inch of plain paper. The data contains personal and property information and is sealed perpetually for privacy and security of the buyer and the seller. The information may be unlocked at any time with the biometrics of the individual or an authorised individual. The multi-million dollar investment in research, design and development of technology may be applied in numerous vertical applications. The management’s

him. Instantly upon registration, the seller’s loan is paid to the lender as the new mortgage is registered on the property under the buyer’s name. Cheques are also instantly generated and issued to all parties, including sellers and brokers. “For proper legal transparency, the role of a neutral intermediary is crucial” said Shahram Safai, a partner at the law firm of Afridi & Angell. The enTrust & Title Enterprise (enTTE) system automates this tedious and rigorous process and all the data is archived. The technology enables over 1GB of data and

domain expertise in providing escrow services in USA led the company to pursue the Dubai real estate market. The company provides its services in Software as a Service (SaaS) model. This model makes it completely transparent, simple and expeditious, so that the registered sellers or buyers may be able to conduct their transactions from anywhere in the world through its network of enTrusted Witnesses who are members of the community in good standing with pristine reputation, and trained to perform their duties by the company.

EVENT

Light at the end of the construction tunnel With exhibitor space increased, and pre-registrations at record levels, organisers of The Big 5 exhibition are seeing positive signs for an upturn in the construction industry in the UAE

The Big 5 exhibition is somewhat of a barometer for the construction industry and we are extremely positive that business is starting to stabilise DMG research has shown that, despite the economic downturn, the Middle East construction industry will keep growing at an annual rate of 3.5 per cent in the next five years, ranking third behind Asia and significantly ahead of Europe or Northern America. The region is a perfect gateway for the Indian subcontinent and Asia and is, therefore, in a strong position to provide access to the two regions with the highest expected construction growth in the next two years. Contrary to the widespread belief that all construction has stopped, there are still significant projects in the pipeline, which have a total value across the Middle East region of $3.1 trillion. The UAE leads the project

market, accounting for 42 per cent of the total project value, while the value of projects in Bahrain has more than doubled to almost $68 billion and those in Qatar have increased by 71 per cent in the last year. Despite a tough year, research carried out by independent consultants BNC, shows that almost 70 per cent of the total registered

projects in the GCC are still currently under construction with a further six per cent out to tender and 10 per cent already in the concept and design stages. In the UAE, 7,231 projects – commercial, residential, hospitality, medical and educational – are currently still under construction and over 1,000 projects are in the pipeline for this year alone. As the largest event of its kind in the Middle East, The Big 5 provides an unrivalled platform for architects, engineers, contractors and developers from the public and private sectors to network, source and specify the latest building and construction products and services. Featuring national pavilions from all major exporting countries of the world, The Big 5 provides a most comprehensive product offering for the building and construction industry. The show will also be bringing together an impressive line-up of added value elements including a Key Buyers programme, product seminars, a conference programme ,and the acclaimed Gaia Awards.

DUBAI REAL TIMES

he Big 5, a leading international building and construction show, is set to take place from 23-26 November at Dubai World Trade Centre. Registration is looking positive, with visitors from over 70 countries signed up to attend. The show will be 15 per cent bigger than last year in terms of exhibition space, and has grown to include the new halls being constructed at the venue. The show is almost fully sold out, with 92 per cent of the 43,000 square metre floor space booked. Exhibitors include Emirates Steel Industries, RAK Ceramics and Exeed Industries from the UAE, French Euroslot, Climatech and Dectron from Canada, Turkish based Tekmar marble, Tongby Control Technology from China, Germany’s Putzmeister Mörtelmaschinen and the Lapesa Grupo from Zaragoza, Spain. Paula Al Chami, Show Director, said, “The Big 5 exhibition is somewhat of a barometer for the construction industry and we are extremely positive that business is starting to stabilise. We seem to be bucking the trend of some other trade shows, which has been reflected in the increased floor space, and the right level of industry people signing up. Clearly, this has been a year of a slow-down in growth in construction, but it seems that The Big 5 is coming at just the right time, as the industry is starting to look forwards again and will be able to put a considerable amount of speculation to rest.”

COMMUNITY

Rewards and awards Arabtec CEO in frank exchange

DUBAI REAL TIMES

rabtec Holding CEO Riad Kamal recently gave a rare insight into his ascent as one of the region’s construction giants to members and guests of the Capital Club, a private business club. Kamal was the inaugural guest speaker at the Club’s new ‘Under the Spotlight’ series which provides personal perspective from some of the region’s notable entrepreneurs and leaders. More than 100 members and guests turned out to hear Kamal share how he overcame the challenges in building Arabtec and described his strategies for success, with interviewer Guy Guillemard, CEO of Signature Clubs International. “I don’t think you can plan success,” Riad commented. “I only planned one per cent of what we have today. I can just simply say that we were in the right place at the right time. The opportunities that Dubai and the Maktoum family were able to give us were the main drivers.” Listed as #70 in the 2009 Power 100 Ranking of the World’s Most Influential Arabs by Arabian Business, Kamal has overseen Arabtec’s recent expansion into Saudi Arabia. The humble CEO is reluctant to give advice: “Advice is very difficult to give – who am I to give it? But if I was to comment from my personal experience it would be: I think you need to be as human as possible. I always feel that if I don’t give I’m not doing anything. The most satisfying thing in my daily life is helping people – not just financially, but in their career. I am Deputy Chairman

Shahnaz Pakravan, Riad Kamal and Guy Guillemard

of the Welfare Association which is a great humanitarian organisation operating in the West Bank and Gaza, among other charities, and I believe that the more you give the more the universe will give you,” Riad concluded. Rashad Bukhash, Director of the Architectural Heritage department at Dubai Municipality, picked up a cultural award during the Cityscape Awards for Architecture in the Emerging Markets, held last month. He was honoured for restoring Mohamed Sherif Sultan Al-Olama House and the House of Traditional Architecture in Dubai; and revitalising public open spaces in the historic Bastakia district. Suha Ozkan, one of the judges and founder of the World Architecture Community, said Rashad excelled not only for the restoration works, but the innovative use of public spaces. “Dubai was a large village in the 1950s before all the development and Bastakia now stands as a great monument to the city’s cultural heritage,” he said. “This is one out of the 136 buildings that we have restored in

entries this year and were judged according to quality, innovation and environmental response by a panel of five experts. Two awards were given under the Tourism, Travel & Built category – Dubai’s Roads & Transport Authority, for the Dubai Metro; and Turkey’s Melkan Gursel & Mural Tabanlioglu for their work on the Libertas Rixos Hotel. “We felt it was right the Metro should gain an Award,” added Ozkan. “It is not only the hardware which is

“This is one out of the 136 buildings that we have restored in the UAE and the reward is a good sign we are going the right way in restoring the history of Dubai, especially at this time when the whole area is booming towards modernisation,” said Bukhash.

Winner of the Cityscape Awards 2009

the UAE and the reward is a good sign we are going the right way in restoring the history of Dubai, especially at this time when the whole area is booming towards modernisation,” said Bukhash. The awards received a record 300

impressive, but the stations, which are designed as landmarks.” Four young architects, all students from Sharjah, were also recognised for their potential, Momna Arshad, Reihaneh Ramezany Mahonaky, Tahereh Rajabi and Ahmed Hosny. “.

Inheritance of cities in Arabian Peninsula coveted honour of Engineering Firm of the Year. Of a possible 10 awards presented during the gala dinner in Dubai, Atkins was short listed as a finalist in three categories, Engineering Firm of the Year, Young Architect of the Year (Obada Adra) and Best Completed Project (Almas Tower). In addition, Atkins’ work on the Dubai Metro Red Line was recognised, with the RTA winning the Infrastructure Project of the Year (finished project) category which acknowledges projects that effectively connect people within urban centres and offer the best options for sustainable, efficient transportation. The winners were judged by a panel of experts who were particularly impressed by Atkins commitment to sustainability and research into reducing energy consumption in high rise towers. Bruce Maney, Project Director, Rail Projects for Atkins in the Middle East was on hand to collect the award in front of 200 leading professionals from the region’s architecture industry, including architects, developers, service providers, contractors and building owners. “It is relatively easier to deliver sustainable solutions on small boutique

projects but Atkins has excelled in delivering the much more challenging task of viable sustainability in high rise structures such as the Dubai International Financial Centre Lighthouse Tower. The company’s key involvement as lead designer of the Dubai Metro Red & Green Lines is contributing to the reshaping of Dubai as a sustainable city with realistic choices of available transportation modes to reduce its dependence on private cars,” Bruce commented. A 45-year-old Emirati senior corporate manager at, Economic Zones World, is relentlessly pursuing his goal of scaling Africa’s highest peak in Mount Kilimanjaro, Tanzania. Ali Dawood, Senior Vice President, Africa Region, Economic Zones World, made his third successful ascent of Uhuru Peak during the recent Eid holidays, taking just two and a half days to reach the top. In 1999, he achieved it in four days (and became the first UAE national to climb the peak), while in 2003 he clocked three days. Dawood, who had recently recovered from an Achilles tendon injury, described the successful climb as “a

Bruce Maney

testament to my return to fitness and proof that anyone can do it to restore body and spirit”. He began his ascent at Mangaru Gate and crossed rain forests and tough terrain before reaching Uhuru Peak at dawn on September 23. An avid outdoor adventurer, Dawood trained for the ordeal by climbing 35 floors of stairs 10 times a day, alternated with regular walking to gain endurance. His ultimate wish is to set a record by climbing Uhuru Peak within 24 hours, and says he is not going to rest until he achieves it.

Ali Dawood

DUBAI REAL TIMES

he Architectural Heritage Department of Dubai Municipality, in coordination with the UAE Heritage Association organised a lecture recently entitled ‘The phenomenon of inheritance of cities in the south east of the Arabian Peninsula in ancient history’. Dr. Hamad Mohammed Bin Sarai, Associate Professor of Ancient History in the UAE University delivered the lecture, at Dar Al Nadwa in the Bastakiya area. According to Eng. Rashad Mohammed Bukhash this lecture came as part of educational and awareness-raising events held throughout the year. He added that in the south-east (Oman peninsula) a number of cities, ports and towns emerged in different interior, coastal, plain and mountainous environments and on oases. “They have played important economic roles in the region and contributed to the cultural exchanges between the regions and adjacent areas. Local and imported goods were exchanged and some of them earned global reputation over the centuries and became great archaeological places. Some were included in the elaborate residential and defence plans. These towns, cities and ports had been exchanging roles and inheriting places era after era that extended from the third millennium BC to the seventh century AD,” said Eng. Rashad Mohammed Bukhash. This lecture was an overview of the phenomenon of inheritance of cities and their emergence in the region with different environments and places. Archaeological sites, historic cities and coastal ports have been suffering from the abundance of population and construction throughout the times, leading to the demise of ancient monuments sinking under the modern buildings and this is what it reveals of days between now and then. Atkins’ engineering capability was recognised at the 2009 Middle East Architect Awards, winning the

HANDOVER

Mohammed bin Zaal

Living in luxury Al Barari says it will not shift its focus away from luxury developments By Ambily Vijaykumar

DUBAI REAL TIMES

he handover for the first lot of villas of one of the most talked about developments in the recent past, Al Barari, has begun. The first phase of this development in Dubailand consists of a total of 287 luxury villas and is worth close to $1.5 billion. “The first batch of handovers consists of about 35 villas, then about 33, then 20, 15 and so on. We are aiming to hand over about five to ten villas a week. The process will continue well into April 2010,” informed Mohammed bin Zaal, COO, Al Barari. The project that is being made at a cost of US$6.4 billion is spread over a total of 14 million square feet. The USP is that it has about 80 per cent of open and green space. To achieve that goal, the developer has invested

in importing about 800 species of plants and flowers from about 20 countries across the world for its six landscaped botanical gardens and open parkland areas. Mohammed bin Zaal claims that the exclusivity of the project has ensured that the cost of property at Al Barari has doubled in value despite the crisis. “We have received about 70 per cent of our payment from our clients and so we are well financed to complete the project on time,” he clarifies. Al Barari also happens to be one of the few select developments in Dubai that have been exempt from opening an escrow account. “That is something that we are very grateful to RERA for doing. They have had faith in us and we have had faith in those who invested

with us and hence we have been able to proceed smoothly with the project,” he says. Speculators have been the villains in the real estate story of Dubai in the recent past. When quizzed whether such a high-end product was troubled by its share of profit-mongers, Mohammed bin Zaal said, “We share a personal rapport with each of our clients. Since it is an ultra-luxury living space, about 95 per cent of our buyers were end users. The majority of our projects are sold. As far as the crisis is concerned, everybody has been affected and there is no escaping the fact. But that has not deterred us from giving this development our complete focus and delivering it to our clients at a time that we had promised.”

The project is also home to one of the world’s longest man-made waterways stretching up to 14.6 kilometres. This entails a massive responsibility for the developer in terms of its maintenance. Al Barari has its own in-house facilities management company, Wojood, assigned with the task of the upkeep of the project. With RERA planning to put facilities management under its regulation radar, what does Al Barari have to say about the regulators role in managing FM companies? “We have been working very closely with RERA on our project. Its regulations will only bring more transparency and accountability to the real estate sector in Dubai and aid it in its growth. This will help

the market mature,” says Mohammed bin Zaal. Home Owners Associations (HOA) will now be the key to deciding which FM company is assigned the task of the upkeep of a project, once the law in this regard is out it will define the role of HOA, FM companies and developers. Would Al Barari then raise any objections to HOA demands of having another FM company manage their project apart from Wojood? “It is the client who will decide who will manage the property for them. If they feel that our in-house FM company is not suited for the job, they can have their way. But we are confident that since we have been doing the upkeep of the property, which includes looking after a vast amount of varied plant species, for the past two years, Wojood knows the job inside out as far as Al Barari is concerned. I don’t think it would be an easy task to find a replacement for it so quickly. This project is not only about the homes, but is also equally about its surroundings and I think that since Wojood has been involved in it from the very beginning it will be difficult to find someone to fit into their shoes,” argued bin Zaal. The second phase of Al Barari, consisting of about 500 residential apartments, which is being built for those who would want to stay within

Villa at Al Al Barari

the development but cannot afford the villas, is still in the planning phase. Mohammed bin Zaal said that the group’s current concentration is the first phase that is being delivered. The same reason also holds for the developer dropping any new projects off its priority list for the moment, the COO elaborates. There is a general buzz in the real estate market that mid-size projects are a segment that has a huge growth potential in the future. When asked whether Al Barari will

be stepping into that segment in the future, Bin Zaal countered it saying that the developer’s niche is the luxury market and it has no plans to shift out of that zone for

the moment. Al Barari will also hold the distinction of being one of the region’s lowest density eco-sensitive regions.

DUBAI REAL TIMES

A vast variety of plants grown for the Al Barari project in their own nursery

HANDOVERS

A lot of completions The past month or two has seen many more offices, villas and apartments being completed and handed over to their owners

DUBAI REAL TIMES

akhruddin Properties completed its handover of the prestigious Oasis High Park last month. Built at an investment of Dh100 million, the plush 160-apartment residential building, with an area of approximately 206,000 square feet, is located at Dubai Silicon Oasis. Mr Yusuf Fakhruddin, CEO, Fakhruddin Properties said: “We are extremely pleased that despite the downturn, we have been able to keep our commitment to our clients. Silicon Oasis is a great community to begin with and has an incredible infrastructure. During the course of its development, many extra lifestyle features were added to the tower to provide added value to our customers such as swimming pool, sauna, steam rooms, state-of-the-art health club and 24-hour security,” he added. The project has already been fully sold out. “For those who need our assistance, we are helping to lease out and sell ready apartments. We are also facilitating our investors to get the maximum possible return on investment.” Mr Fakhruddin said, “We thoroughly snagged the entire building ourselves before the handover to ensure that the execution has been done as per the stringent quality standards defined.” Like the rest of the market, Fakhruddin Properties rode the wave of the emirate’s property boom for years. However today, admits Mr Fakhruddin, “Volumes and profitability are greatly reduced compared with last year. Prices

Oasis High Park

We are helping to lease out and sell ready apartments, also facilitating our investors to get the maximum possible return on investment have dramatically plunged putting into reverse the amazing surge. But despite the crash, we have not stopped. Rather, we have continued with the construction at all our projects by creatively fighting the challenges of the industry. Be it the Lake Central at the Business Bay or Trafalgar Central at International City, all are progressing well. No doubt plans will have to be modified to meet new realities, but the good news is that we are able to stick to our plans. Wisely channelling and managing cash flow is the key to success in the current scenario. We

are offering flexible payment plans to our customers who have invested their hard-earned money with us in good hope.” Mr Fakhruddin’s advice to investors is, “According to our analysis, the real estate market meltdown is primarily due to investors’ psychological fears and a general loss of confidence in the Dubai market. Some of the factors which have further contributed to the downturn are the speculators and short-term flippers in the market. However, this global recession has not hit as hard as it has in the western part of

the world thus, still making Dubai a better choice. The prices of real estate market have nearly touched rock bottom and some of the areas in UAE are way undervalued. This brings in the opportunity for cash buyers to invest in this market which is actually offering the best deal out of the lot. Investors are indeed protecting their existing assets, but the challenge lies in creating and maintaining a portfolio of productive, efficient and relatively liquid assets considering the current economic scenario. At the same time, we do believe if investors have the holding power and the patience to wait till the property is delivered, they can definitely get a very good ROI in future.” Mr Fakhruddin remains upbeat about the UAE’s long-term outlook, despite the market’s current woes and believes spacing projects could provide the market the muchneeded soft landing. “The carnage is widespread. Most are scaling back or hibernating in the hope of weathering the storm. What is great is that prices have stopped to drop like before. Within Dubai, opportunities are still there and considering the history, they will never run short.” Last month Victory Heights Golf Residential and Development LLC announced that Larsen & Toubro Limited (L&T) and Eastern Contracting LLC (Eastern) Joint Venture Company had handed over 84 new villas from the villages of the luxury golfing residential community. The project undertaken by the

Residential spaces at The Executive Towers include studios, loft apartments, fourbedroom terraces, garden apartments, and one, two, three, and four-bedroom apartments Villa at Victory Heights

joint venture company involves the construction of 295 high-end or luxury villas ranging in sizes from Type B 5,182 sq ft and Type C 4,334 Covering some 25 million square feet, Victory Heights is an exclusive villa community offering 961 beautifully designed villas and town homes set in and around The Els golf course. The 18-hole

club academy will be based within the community. Dubai Properties Group (DPG), a member of Dubai Holdings, has commenced the handover of 2,387 high-end units at the residential and commercial towers of the Executive Towers development, located in Business Bay. The pioneering new development comprises 12

The handover of The Executive Towers, which includes 176 commercial units and 2,211 residential units, was launched with a comprehensive customer service

West Heights 1-6. The development will also include a 307-room hotel tower. Residential spaces at The Executive Towers include studios, loft apartments, four-bedroom terraces, garden apartments,

Executive Towers

championship golf course has been designed by renowned golfer Ernie Els and is complimented by the Butch Harmon Golf Academy. Additionally, an international tennis

buildings, ten of which are residential and features 60 villas located at the plaza level, 16 boutique office villas, and a three-level podium that offers parking bays for 3,602 vehicles.

designed to deliver a seamless transition for homeowners and investors with an unprecedented level of services and amenities at their disposal. The name of the 11 towers has now been revealed by DPG. The first four residential towers facing east will be named East Heights 1-4; while the fifth, a 39-floor commercial property, will be called Aspect Tower. The remaining six residential towers, facing west, will be named

and one, two, three, and fourbedroom apartments. Additional features include 24-hour security and maintenance, state-of-the-art health clubs with swimming pools, plaza-level landscaped gardens and direct access to the adjacent Bay Avenue featuring 185 retail outlets. The Executive Towers is the second major freehold project to be handed over by Dubai Properties Group following the successful release of Jumeirah

DUBAI REAL TIMES

Villas at Dubai Silicon Oasis

DUBAI REAL TIMES

Beach Residence (JBR), the largest single-phased development in the region. Dubai Silicon Oasis Authority (DSOA) recently announced that 400 of the total 1,047 units at Cedre Villas are available for sale and lease to investors. The 400 villas in the first phase of the project comprise Executive Villas, Twin Villas, and Town Houses. They are available with three architectural modelsModern, Traditional, and Islamic, and are offered at very competitive rates in relation to current market prices. In addition, at Cityscape, DSOA also announced that the remaining finishing works for the Dh1.55-billion villa development is proceeding as scheduled, while more than 280,000 cubic meters of concrete have already been laid out for construction. Eng. Muammar Al Katheeri, Chief Officer – Engineering Management at Dubai Silicon Oasis Authority, said: “This landmark development comprises spectacular villas built with up to 40 per cent more space than the available villas in the market, and are built in accordance with international quality standards that reflect the commitment of Dubai Silicon Oasis in creating an integrated community for those living and working in the region’s pioneering technology cluster. ” Arabtec Holding is contracted to lay the finishing works for the gated community that is strategically located on the Emirates Road. The development offers residents an exclusive clubhouse, a shopping complex, health and leisure facilities, swimming pools, schools and academies, hospitals, play areas and other lifestyle necessities. Dubai Silicon Oasis is a whollyowned entity of the Government of Dubai and operates as a free zone technology park for the semiconductor, microelectronic and other high technology-based companies looking to set up their regional headquarters and R&D facilities in the Middle East and Africa region. Dubai Sports City has made steady progress during the past year with the delivery of key projects, community facilities and sports venues, and is looking forward to an

even busier 2010, with more deliveries and major events in the pipeline, according to the development’s top executives. Speaking on the eve of Dubai’s annual Cityscape event, President Khalid Al Zarooni, revealed that the $4 billion mixeduse project is now coming to life, with hundreds of residents moving in to take advantage of the sporting and community facilities on offer. 2009 was a year of achievements for DSC with the opening of the Butch Harmon School of Golf in February, the inauguration of the Dubai International Cricket Stadium in April, the handover of phase one villas at the golf community Victory

The first half of 2010 will see the full launch of the much-awaited Dubai Sports City Academies Campus, the opening of The Els Club permanent clubhouse, and the delivery of Canal Residence West, a collection of buildings presented in Arabic, Mediterranean, Classic European, Venetian, and Spanish Andalusian architectural styles. Omniyat, the Dubai-based real estate developer, welcomed crowds to its stand on the first day of Dubai Cityscape 2009. This year marks the delivery of the developer’s first three projects, the advancement of all launched projects and the launch of a new business entity.

event, Omniyat has witnessed the completion of three projects, One Business Bay, Bayswater, and The Square. Omniyat kicked off 2009 with the groundbreaking of its eighth project, Octavian, and has since completed the piling and shoring works. Meanwhile, it is working closely with master developers on the progress of The Pad, The Binary, The Gemini and Octavian. The Opus, Omniyat’s flagship project, is now being fast-tracked to completion. Earlier this year, Omniyat launched Omniyat Asset Management with its three business units offering strata management, facilities

Dubai Sports City comes to life

Heights in June, as well as the opening of Bradenton Preparatory Academy Dubai, which opened its doors to pupils in September. Last month saw football supporters from across the UAE gather at the stadium to watch the season’s opening UFL Etisalat Super Cup match, while in April, cricket fans enjoyed a series of events between Pakistan and Australia, where more than 60,000 watched two ODIs and one Twenty20 game between the two sides. Additional fixtures, which will include sports and music events, are planned throughout 2009 and 2010.

Last month saw football supporters from across the UAE gather at the stadium to watch the season’s opening UFL Etisalat Super Cup match, while in April, cricket fans enjoyed a series of events between Pakistan and Australia In the face of an economic downturn, a carefully orchestrated consolidation and change in strategy afforded the developer one of its most productive years to date. Since the close of last year’s

management and property services. The goal is to provide customers with a convenient and efficient way to capture and enhance the value of their investment, completing the company’s real estate value chain.

HANDOVER

Timely delivery of ‘Le Grand Chateau’

he Dubai Land Department (DLD) has lauded Al Fara’a Properties for the timely completion and handover of its Dh225 million ‘Le Grand Chateau’ (LGC) project in Jumeirah Village. In addition, Nakheel Properties, the master developer of Jumeirah Village, also commended Al Fara’a for being the first to deliver in its high profile community development and for completing the project six months before its scheduled 2010 deadline. The announcement follows a recent handover ceremony held at ‘Le Grand Chateau’, which was attended by officials from DLD, Nakheel, and the Al Fara’a Group. Ideally located at the heart of Jumeirah Village, Le Grand Chateau draws inspiration from the architecture of 16th century chateaux of the Loire Valley in France. The development comprises 15 luxurious four-bedroom G+2 townhouses, a residential block with a total of 185 apartments, and a range of amenities, including a gymnasium with aerobic facilities as well as entertainment and lifestyle areas, which will ensure that all residents, including some 50 families who have moved in and the others that will follow them, enjoy a sense of community. Over and above its impressive design, all aspects of the project - from furniture to lighting - have been carefully selected and blended to ensure a consistent themed ambience throughout the development. “We are extremely humbled by the

praise and votes of confidence given to us by officials from the Dubai Land Department and Nakheel,” said Natasha Gangaramani, Director, Al Fara’a Properties. “We have built ‘Le Grand Chateau’ with a lot of attention to detail and based on the rich learning and study of lifestyles that we have established in the last three decades.” Officials from the Dubai Land Department emphasised their focus on ensuring the health of the Dubai property market to sustain its global position as one of the most competitive property destinations. Sultan Butti bin Mirjin, Director General, DLD, said, “The Dubai Land Department wishes to congratulate the first batch of tenants on their move into Le Grand Chateau and for the excellent investment they have made with this exceptional project. We also congratulate Al Fara’a Properties for meeting their scheduled delivery, and for taking great pains to prioritise and care for every aspect of their client’s lifestyle and community needs. The DLD continues to provide support for developers like Al Fara’a, who despite

the impaired market conditions, still managed to honour their commitment to on-time delivery of projects.” The Al Fara’a Group has provided LGC investors access to flexible financing options for the project through Abu Dhabi Commercial Bank (ADCB). To ensure a consistent theme across the project, the leading property developer has partnered with Al Huzaifa Furniture to bring occupants a range of décor ideas centered on classic Italian furniture in a contemporary modern setting. LGC tenants are also offered special rates on the leading furniture company’s latest collection and its turnkey interior design services such as design consultancy, concept designing and custom interior solutions. “Al Fara’a Properties is an outstanding developer and it has been a true pleasure working with them to deliver this project. As the master developer of Jumeirah Village, it brings us great pride that our community project is the home of this exceptional new development. We are eager to see more high quality projects from this developer to rise amidst our communities,” said Chris O’Donnel,

Chief Executive Officer, Nakheel. The company has two other luxury residential projects within Jumeirah Village - the ‘The Manhattan’, and the ‘Mulberry Mansions’. Inspired by the urban residences of 1930s New York, The Manhattan will offer 355 units, which comprise a selection of studio, one-, two-, and three-bedrooms apartments; while Mulberry Mansions will provide 12 Victorian-styled twostorey townhouses, incorporating four bedrooms, a private two-car garage, a terrace, a balcony, maid’s room with separate access, and a small private garden. “We are grateful to the Rulers of the UAE for their vision and exemplary leadership, to the Dubai Land Department, to Nakheel, to our banking partners and our clients for their support and zest to make this project come alive. We believe that delivering a development is far beyond just delivering habitable spaces. Rather, it is the delivery of a community and a lifestyle within the development. We choose and meticulously plan the colours, finishes, design angles and circulation within the buildings. Our sustained commitment to deliver outstanding development projects and our excellence in planning diligently has allowed us to complete the ‘Le Grand Chateau’ project way before the deadline. We also strongly believe that the Jumeirah Village master development is a prime commercial and residential venue,” concluded Gangaramani.

DUBAI REAL TIMES

Al Fara’a Properties commended by Nakheel for being first to deliver in Jumeirah Village

FACILITIES & SERVICES

Increasing value

n experienced Facilities Management business has within its operation robust and diverse skills that when combined plan, sustain and provide, in a cost-effective and environmentally sound manner, the facility and services necessary to support a client’s properties. The property use could be commercial, government, health, industrial, transport (airports, train and bus stations) and education. It also provides essential operations such as hard and soft services; functions which include relocation, transport of personnel, materials and life cycle management within a client’s facilities, configuration of conference and meeting space, and management and distribution of special materials. It further provides management, policy and oversight of a client’s property, plant and equipment matters. Working with the client, FM formulates property business policy, programme integration, standardisation and business improvements to ensure that properties maintain their usefulness and outstrip their expected life. People forget that a property will decay, infrastructure within it will fail and equipment will cease to operate if it is not professionally and proficiently kept in a good condition; in a nutshell an unserviced property’s value reduces substantially. Well-serviced, well-maintained and well-managed equates to a sustainable solution. If we consider real estate we have to consider development, which as we all know, is the con-

Well-serviced, well-maintained and well-managed equates to a sustainable solution Richard Burl

tinual reconfiguration of the built environment to meet a country’s needs. Developing is producing real estate to sell or rent; it is a core business where fundamental activities optimisation is continuous and the activity of management is fully focused upon achieving a return against investment. The main goal of any management should be to maximise the effectiveness of the core business. To enable the real estate market to fulfil formulated goals, it has to concentrate on its primary activity (core business), which when characterised is a dominant, functional process, performed by the real estate company in order to fulfil its primary function – profit. Facility Management is a secondary activity; supporting all the other activities that fall outside the Primary activity. FM creates conditions to support the success of the core business. Supporting activities will includes managing support finances, human resources, technical and telecommunications, plus other services such as horticulture, waste management and cleaning

to name but a few. It operates and maintains. FM enables the quality management of supporting activities. It is expected to control and to optimise the supporting activities (processes) in entities which support the effective running of the core business. Therefore the bottom line reply is that if FM was utilised by the real estate market they would be able to concentrate fully on their primary activity safe in the knowledge that their properties will be in above average condition, which in turn increases value. This combination of specialisms is blended with a broad knowledge (technical, economical, ecological, psychological, ethical, etc.). It has good knowledge with the right practical experience. FM is responsible for the impeccable running of supporting activities. Therefore should we go one step further and consider the Facility Manager in the design phase of a development process? The design phase starts after the developer has signed the contracts; he has appointed an architect and

engineer, decided on a general contractor, determined general sales targets and other requirements. The architect, as a member of the development team, assisted in basic planning and then provides schematic and final design, preparation of construction documents, and administration of agreements and generally provides the support a developer needs. During the design process, there is an opportunity to minimise possible market risk, that is, the inability to be competitive; full utilisation of space in an evolving market, minimising operating costs, maintenance costs, costs for repair or innovation and energy costs, etc. Facility Management should be involved at an early design stage to provide significant building operating experience. It is not a competitor or opponent to the architect in the preparation phase, but rather a partner. Without argument the leading task in the maintenance phase is led by the architect; the Facility Manager’s experience should be put to good use on behalf of the developer. He would present economically and operationally alternatives including the pros and cons. However the final decision shall always sit with the architect and the developer. It is highly recommended that during the proposal, preparation and construction of the building, to include the knowhow of Facility Management in the development process. This contribution will reap benefits many times over in lower operating costs, as well as introducing effective working practices.

DUBAI REAL TIMES

Richard Burl, EMCOR Facilities Services Group Regional Managing Director, discusses Facilities Management and its role in the development processes

FACILITIES & SERVICES

Facilities management is the future FM companies say that focusing to reduce energy costs in a building can greatly help bring down service charges

DUBAI REAL TIMES

By Ambily Vijaykumar

“F

acilities management companies should be involved from the design phase of any building,” argued an architect working on a five-star hotel project in Dubai. “FM is the future and the sooner we realise it, the better it is, since it will only aid in the proper upkeep of properties that are being built at such high costs,” he added. There are close to 75 facilities management (FM) companies from all over the globe operating

in the Middle East at the moment and about 19 of them are from the UK alone. According to research the FM market in the Gulf region will be worth an estimated $892 billion over the next 25 years. Out of that, the UAE has a potential worth of about $704 billion. With such a large potential for growth, it is not surprising then to see so many facilities management companies setting up shop in the UAE and especially in Dubai. “There are several instances in

the market in the past where you appoint a watchman, who is a guy who has just come off the plane. You place him in a building and ask him to run it for you when he knows nothing about what is to be done, has no FM experience and just leaves the building in a state of disrepair. That is the old UAE. what is needed today is professional FM expertise from educated and experienced FM companies,” says Mick Dalton, General Manager, Marafeq FM, UAE.

That is one of the reasons behind RERA’s plans to regulate the companies operating in Dubai as part of the proposed new regulations to Strata Law no 27 of 2008. RERA proposes to not only regulate the FM providers but also to train them for a better understanding of Dubai laws. “Regulating FM companies could prove counter,” says the GM. “My suggestion is that trying to regulate the HOA (Home Owners Association) owned buildings may

Mick Dalton

be certain services i.e. number of security guards, receptionists or cleaners, then service charges will vary accordingly. The fourth and the final factor is legislation. For instance if the government passes a law making it compulsory to station lifeguards at public swimming pools, that has to be obeyed. “FM companies can be regulated for as long as the government wants and to whatever extent they want, but these four factors will determine what the service fee for any building is going to be,” the Marafeq GM explains. FM companies say that there are areas that can be addressed with urgency so that the total running cost of any building is brought down, thereby benefitting the home owners; first and foremost among them being to regulate district cooling company charges. “I would suggest that RERA insist on district cooling companies installing water meters in every lot in a building; and a reduction in charges. At the moment, what happens is that residents are not being charged for what they use and the bulk meter installed forces costs to be based on area rather than consumption. Sub metering for chilled water must be installed from the outset so that there is transparency on the costing for the district cooling and AC bills,” opines Marafeq. “Secondly in a mixed-use development that would have

retail, hospitality and residential buildings, the service fee should be determined by the kind of services that are is being provided for individual types of buildings. By being flexible with service charges for different buildings what will be achieved is the proper upkeep of the property since every property is built differently and for different purposes,” argues Dalton. The third thing that he says should fall under RERA’s regulation is the master community levy. “At the moment, master developers try to charge many costs through the master community levy and in some cases interest on loans for borrowing money to finish off the work in the master community. That is a cost that the master developer must bear and not the home owner,” Dalton suggests. There is also an input with regard to DEWA tariffs. “At the moment there is a slab charge and which is obviously for most common areas in the building - and that comes at the highest rate. If DEWA were to bring out tariffs that would allow common areas to be at a lower rate then it will go a long way in reducing service fees,” opines Dalton. Apart from the above four inputs, FM companies would also like RERA to impart training to home owners association to collect service fees. “RERA could also look to giving HOAs the tool and government support to collect fees. At the moment neither HOAs nor developers are able to collect service fees, and FM companies are suffering on payments, “laments Marafeq. What FM companies are calling for is a transparency and order in the way service charges are collected. The way out he suggest is to have the government set out a fund, collect the service fees and pay the FM companies. “This should be on the lines that if owners don’t pay, they can have their electricity cut off, or evicted out of their apartment or the apartment sold to recover the costs,” suggests Marafeq. The reason why FM companies are feeling the pinch is also because

of the “lack of flexibility” with supply chain costs. For example, a monopoly of a few lifts companies in the market. “The moment you approach them the figure they quote is Dh300,000 for a year - and that is non-negotiable,” says Dalton. The stumbling block he says is that only the company that has installed the lift can maintain it. Fire alarms and building management systems too are big expenses in any service fee costs. Part of RERA’s plans to regulate FM companies includes approving them and issuing new licences. FM companies say they already have to procure licences for working in every individual emirate. So if they operate in three emirates, they have to apply for three different trade licences. This is followed by a freezone licence, which makes it four. With RERA’s plans to introduce a new licence, FM companies say it may be an added financial commitment that they might not be able to take. Additional costs they say will ultimately trickle down to the HOA because FM companies are not in a position to absorb it. Hence instead of succeeding in bringing the service fees down, which is RERA’s objective, it will only see service fees pushed up further. To continue with investor confidence in the Dubai real estate market, FM companies suggest that RERA could think about bringing changes to the law that would put the onus of footing the service charge on the person who occupies the property and not the just the one who owns it. They suggest that when it is the person who stays in the property who is using the services provided by the FM companies, why should an investor who says overseas, for instance, pay for it? If this is reversed, it could boost investor confidence and take the burden off them. Facilities management companies are positive about the future of the Dubai real estate market and also their prospects in it. But they say that the key to progressing in the future would be “shared and with agreed collaboration.”

DUBAI REAL TIMES

drive away FM companies from that segment. Dubai will be the only place in the world with regulated FM companies. FM companies operate in the residential segment because it is free for all and the competition drives down costs and service fees. The moment that freedom is taken away, there is a huge risk of FM companies turning away to unregulated sectors like health and research, military, industrial, commercial, government, retail and leisure and so any legislation that would drive the companies away from the residential segment could only prove counter-productive.” However, from a home owners’ perspective, the possibility of having to shell out large sums of money regularly as a service charge is also not a very inviting one; the reason behind RERA putting a stop on arbitrary hikes in service charges by developers and master developers without getting prior approval from them. “A blanket service charge for buildings of varying nature is not practical simply because the cost of maintaining residential, commercial and retail buildings is different. The onus of deciding the service fees should ideally be done jointly by the HOA and FM companies and there should be complete transparency with regard to the process that goes into deciding what the cost should be,” states Marafeq. But how much is enough? The running cost of any building is affected by four factors. One is the external environment that will have a major impact on the energy consumption and that would reflect in the electricity bills. The second one is the building itself; its services and the fabric of the building. For example an all-glass building will consume more energy than one with curtain walling, generally. If there are six lifts as opposed to three there will be more energy consumption and maintenance costs. Marble floors will take a higher cost to maintain than other types of flooring. The third is the owners and tenants. When an owner or tenant demands that there should

FOCUS

Glass hub of the region Dh175 million expansion bolster Emirate Glass’s position in European glass market

DUBAI REAL TIMES

Ziad Yazbeck

mirates Glass LLC (EGL), one of the leading processors of architectural flat glass in the Middle East and a subsidiary of Glass LLC, wholly owned by Dubai Investments (DI), is continuing its efforts to carve Dubai’s name in the international arena as a glass hub of the Middle East region as it sponsored yet another edition of the Emirates Glass – Leading European Architects Forum (LEAF) Awards, a prestigious global award encompassing the architectural, design and build industries. Held on September 4th in Berlin, Germany, the 2009 Emirates Glass LEAF awards received over 150 entries and brought together hundreds of practising professionals in the industry. For three consecutive years, Emirates Glass has been the title sponsor of the renowned worldwide event which allows entries from all companies, technologies and individuals who have made an outstanding contribution to the world of architecture and strive to set higher benchmarks for the buildings of tomorrow. Commenting on EGL’s monumental contribution to the event, Mr. Ziad Yazbeck, General Manager, Emirates Glass, said, “Our involvement with the LEAF Awards reflects our genuine interest in breaking through international markets and

positioning the company as a global glass processor of the highest calibre, and in turn cementing Dubai’s position as a leading glass hub in the Middle East region.” Maya Zouein, Marketing Director, Emirates Glass, added that support for future LEAF The new coating facility at Emirates Glass LLC awards could be excategories. It honoured sophisticatpected, saying, “Emirates Glass is intending to continue with ed projects from some of the world’s the sponsorship of this important most celebrated architects, with the event for many years to come. We winners including EAA-Emre Arolat will be leveraging the completion Architects, David Chipperfield Arof our Dh175 million expansion pro- chitects, Woods Bagot, and ATELIER gramme and the recent commence- BRÜCKNER GmbH. The ceremony ment of our new Dh100 million glass concluded with the presentation of coating machinery to broaden the The LEAF Award by Ziad Yazbeck to markets and to be a more significant Woods Bagot for their project, Qatar player and integrated component in Science and Technology Park. Established in 2003 to recognthe European market.” This year’s event highlighted keen ise and reward excellence in the international competition with many building design industry, the LEAF leading names in the architectural Awards have been reputed as and design fields, and several new some of the world’s most influential and lesser-known organisations vy- events in the international architecing for the coveted awards across 11 tural calendar.

mirates Glass LLC (EGL) was established by Dubai Investments PJSC in 1998 and has secured a position as one of the leading providers of energy efficient architectural glass in the Middle East with a rapidly growing market stretching from London to Hong Kong. Through the extensive EMICOOL range of sputter-coated solar control and thermal insulated glass products, Emirates Glass is able to satisfy the demands of contemporary architecture for colour, light, comfort safety and efficiency in all types of buildings and within realistic budgets. The core operation of Emirates Glass is the application of ultra-thin metallic coatings by means of cathodic sputtering on to float glass substrates. These coatings, which comprise various combinations of Silver, Tin, Zinc, Chromium, Titanium and Stainless Steel, greatly enhance the colour and reflectivity of the glass. Thus products provide impressive levels of solar control and thermal insulation (when used in double glazing) to minimise heat gain into all building types besides reducing the consumption of energy for summer cooling.

Emirates Glass’s new Dh100 million glass coating line has commenced operations earlier this month and is now online. The Terra G coating line is set to boost EGL’s manufacturing capacity threefold up to 3.5 million square metres of flat glass products per annum. The new coating facility began production for the first time on September 13 and the new glass coating line underwent installation at EGL’s manufacturing facilities in June at the Dubai Investments Park, which also houses the company’s multimillion-dirham headquarters. This production facility upgrade has been sourced from Germany and is part of an overall expansion programme worth Dh175 million as the company relocates its entire operations to the Dubai Investments Park. With a bed-width of 3.3 metres and a sputtering section 68 metres long containing 20 cathode-positions (15 installed initially, including 10 rotatable C-Mag type, and 5 Planar magnetron), the equipment is the largest and most sophisticated armada of machinery in the Middle East. It can manufacture, according to the strictest standards in the glass production and processing industry, a wide range of high-performance, energy-efficient glass types with high selectivity ratios, now being favoured among architects and developers throughout the region. The company’s dedication to supporting eco-friendly construction and sustainable development has exceeded expectations in meeting the challenges of green building principles and requirements.

FOCUS

Looking to the future Companies are using their slowdown period by looking to the future and preparing for an uphill climb when the time is right. Students are being prepared for the world of employment, developers are proving their worth by gaining and regaining certification, partnerships are being formed, and Dubai itself is still attracting quality gatherings such as the The International Bar Association Conference, which will come to the Middle East for the first time in 2011. successfully re-certified its Quality Management System (QMS) for ISO 9001:2008 certification, the latest global benchmark in the standards of excellence. Emaar was originally certified to the ISO 9001:2000 by LQRA in September 2006. After completion of its three year validity period, Emaar underwent a stringent recertification audit in AugustSeptember 2009 to audit the company’s QMS to ISO 9001:2008 standards. Kenneth Laidler, President of Association of The re-certification Professional Interior Designers (APID) covers all departments linked to said. “Workshops and master classes residential and commercial property will focus on topics such as Business development, project management by Design, Interior Design Project and customer service operations. Mr Issam Galadari, Chief Executive Management, Feng Shui and 3D Officer, Emaar Properties said: “The Rendering.” Emaar Properties PJSC, the re-certification to ISO 9001:2008 global property developer, has quality standards is a reiteration

of our commitment to continual improvement, a vital link in our journey towards excellence. Emaar is the pioneer in master-planned communities and was among the first property companies in the region to be accredited to ISO quality certification. Simultaneously, we also implemented sustainable development practices to receive the ISO 14001:2004 environmental certification.” As continuous measurements for ensuring the QMS, Emaar conducts regular in-house audits on all departments to evaluate the system’s implementation, customer satisfaction methods and continuous improvement plans. These audits are conducted by ISO 9001 trained Internal Auditors or Lead Auditors and reviewed by senior management. Master developer Limitless has embarked on a new partnership

Mr Issam Galadari, Chief Executive Officer, Emaar Properties, received the certification from Mr P.T. Graaf, Senior Vice President, Lloyds Register Quality Assurance (LQRA)

DUBAI REAL TIMES

rofessional practitioners and students of interior design from all over the world will have the opportunity to showcase their work and compete for the ‘International Federation of Interior Architects/Designers (IFI) Design Excellence Award’ at the upcoming World Interior Design Congress. The event will be held under the patronage of Her Royal Highness Princess Haya Bint Al Hussein, wife of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, from November 6th to 11th, under the theme ‘Celebrate Interior Design’. Applications have flooded in from abroad and from design students studying at universities in this country, including the American University in Dubai, American University of Sharjah, MAHE Manipal, Zayed University, Ajman University of Science and Technology and Al Ghurair University. Hazem El-Khatib, MFA, a senior member of the Dubai-based Association of Professional Interior Designers (APID) highlights the goal of the Congress to uplift the status of the profession in the UAE and attract more practitioners in the future. “Through the workshops, master classes and competitions, we hope to provide ID professionals and students with the training and exposure to global trends and best practices to help them excel,” he

DUBAI REAL TIMES

with real estate advisors DTZ to ramp up leasing activity at The Galleries at Downtown Jebel Ali. A-grade office space is available in The Galleries’ first four commercial towers, where a growing list of household names such as Ericsson, Kraft, Standard Chartered Bank and Citibank have already moved in, with more commercial and retail contracts under negotiation. Within easy reach of Dubai and Abu Dhabi, The Galleries offers tailor-made accommodation featuring onsite property and facilities management services. Business can lease from 1,000 to 15,000 square feet per floor, on single or multiple floors. Philip Gray, UAE Country Manager for DTZ, added: “The market is now seeing increased occupier activity and we are experiencing good levels of demand for office accommodation, particularly those with Metro access. The Galleries is an excellent example of a A-grade commercial space in a strategic location, as evidenced by the highprofile tenants who are already occupying the building.” The Galleries – an eight building mix of offices, homes, retail and recreational space – is set in extensively landscaped grounds with podium gardens, pools, fountains and a 300-seat amphitheatre. It is within walking distance of a Metro station, will offer residential units for lease from the first half of 2010. The International Bar Association (IBA) has announced that Dubai has been selected as the host country for its 2011 Annual Conference - the first time in IBA’s history that its annual conference will be held in the Middle East. It is scheduled to take place from 30 October to 4 November, 2011 at the Dubai World Trade Centre. This will be the largest international gathering of lawyers and bar associations in the world. An average, over 4,000 of the world’s top lawyers attend the week-long annual event, which features over 150 highly topical sessions covering a wide range of legal issues. The event is an opportunity for lawyers from around the world to meet and hear firsthand about legal developments in various jurisdictions.

Pictured at The Galleries are Salah Ameen, Limitless Deputy Executive Director, ME (right) and Philip Gray, UAE Country Manager, DTZ

HE Dr Hadef Bin Juaan Al Dhahiri, Minister of Justice in the UAE said: “This decision reflects the confidence of the global community of lawyers in the advanced level of legal services in the United Arab Emirates. We will continue working to improve these services and ensure the enforcement of justice.” The International Bar Association, established in 1947, is the world’s leading organisation of international legal practitioners, bar associations and law societies. Issues discussed at the IBA’s annual conference will cover diverse areas such as antitrust; anticorruption; arbitration; art; aviation; banking; business crime; business organisations; capital markets communications; construction projects; consumer law; corporate counsel; corporate governance; corporate social responsibility; criminal; cross-border transactions; entertainment; ethics; extraterritorial jurisdiction; globalisation; hedge funds; human rights; immigration; indigenous peoples; insolvency; intellectual property; international construction; internet; investment; judiciary; law firms; maritime; media; medicine; mergers and acquisitions; mining; money laundering; negligence; oil and gas; outer space; real estate; rule of law; securities; sport; tax; technology; trade; travel; and water. The UAE’s construction sector is continuing to show steady signs of recovery, a fact that is reflected by the increasing demand for blue collar workers in the country. In line with this,

Dulsco HR Solutions, the region's largest human resource outsourcing company, has announced plans to increase its blue collar manpower pool by at least 25 per cent. Dulsco HR Solutions recently brought in more than 1,000 recruits from Nepal, Bangladesh, Myanmar and India in response to growing demand from numerous companies to outsource their manpower needs in order to gain greater operational flexibility while reducing liabilities. Dulsco HR Solutions' outsourced manpower covers various categories such as general helpers and cleaners, semi-skilled manpower and skilled manpower. The latter category includes plumbers, masons, electricians, carpenters, fabricators, drivers and many more. The company also outsources forklift operators, office assistants, and security guards, among others. “The onslaught of the global economic crisis has seen a lot of companies shift to manpower outsourcing. The outsourcing model has evolved from being mainly a cost-saving strategy to being a powerful tool for maximising operational efficiency. The practice is particularly gaining popularity in active Arab economies. This recent expansion of manpower will enable us to meet the growing demand for outsourced workers of this category throughout the region,” says Valerian D’Souza, GM, Manpower Services, Dulsco HR Solutions. The manpower specialists provide continual training to its

standby workforce in areas such as skills, languages, hygiene, health and safety. Dulsco also provides its employees with accommodation facilities, sports spaces, recreational events and medical services to ensure their physical and psychological fitness. Deutsche Messe Dubai Branch is all geared up to step into another successful year with its fifth edition of DOMOTEX Middle East, the only dedicated carpets and floor coverings exhibition in the MENA region, featuring an enhanced and refocused selection of product offerings and trade activities to complement a major upturn in the carpets and floor coverings industry. It will be held from May 10 to 12, 2010 at the Dubai International Convention & Exhibition Centre (DICEC), and will cater to the sustained strong demand in the GCC and MENA markets, while taking advantage of the resurgence of traditional growth markets in the UAE. Deutsche Messe Dubai Branch revealed that it expects to generate new demand from the more than 750 active construction and real estate projects being developed all over the UAE. Most of the projects have been scheduled for completion in 2010 and 2011, offering excellent business opportunities for regional and international industry players. The Designers Corner will present the latest breakthroughs in design flooring as well as a select range of inspiring reference projects that will help stimulate new ideas and design concepts. The Creative Flooring section, facilitated by experienced professionals of The Academy of Flooring Skills (TAOFS) from the UK, has been enhanced to offer more interactive and engaging demonstration sessions focusing on the most up-to-date techniques and products. It will showcase a comprehensive range of handmade and machinemade carpets; textile and resilient floor coverings; parquet and wooden flooring; laminates; sports arena flooring; fibres, yarns and textiles; cleaning and application technologies; ceramic tiles; and natural stone and marble floorings,

The Address Montgomerie Dubai

and manage the boutique styled clubhouse and focus on offering tangible guest benefits in line with

SHORTS Arabtech Construction establishes ‘Arabtec Professor in Civil Engineering’ Arabtec Construction L.L.C. (Arabtec), has signed an agreement to establish the Arabtec Professor in Civil Engineering at the Higher Colleges of Technology (HCT); becoming one of the founding members of the HCT Foundation’s 100-Club. The company’s three year sponsorship will establish the ‘Arabtec Professor in Civil Engineering’ who will work with other deans, chairs and faculty from across the HCT college system. The chair will promote best practices, monitor and improve academic standards, evaluate student performance, facilitate faculty development, and develop relationships across the system and in the community.

Dubal wins regional Power Generation award The efforts of state-owned Dubai Aluminium Company Limited (Dubal) to improve the overall efficiency, reliability and security of its captive power station have been recognised at regional level, through receipt of the Power Generation and Water Solutions “Transmission and Distribution Project of the Year Award” for 2009. Dubal was also an official finalist for three other award categories: Middle East Power Plant Operator of the Year Award; Middle East Desalination Plant Operator of the Year Award; and Energy Efficiency Award.

Danube Building Materials goes green with timber Danube Building Materials (DBM), supplier to construction, building materials and shop fitting industries, has announced the launch of the first Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC)-certified whitewood and hardwood timbers products in the GCC. No matter what policies exist, contractors cannot fulfil consultant specification if the materials are not available on the ground. DBM has been engaged in ongoing discussion with Dubai Municipality on how to best formulate and implement ‘green’ building codes to ensure a positive effect on the environment.

the brand’s operational ethos. This latest addition of The Address Hotels + Resorts will increase their

ever-growing portfolio in the UAE to five, which includes the already opened properties of The Address Downtown Burj Dubai, The Address Dubai Mall, and The Palace – The Old Town and the soon to open hotel The Address Dubai Marina. Among the signature services that will be implemented with immediate effect are the 24-hour stay checkin policy and free Internet access across the hotel. The golf course and adjoining golf academy, which have been immensely successful since their launch in October 2002, will continue to be managed by the world’s foremost luxury Golf brand, Troon Golf.

Dubai school to offer degree in real estate Dubai Real Estate Institute (DREI), in partnership with Australia’s Bond University, is to offer a master’s degree in real estate. The master’s degree has a strong focus on the local market and targets real estate practitioners who are eager to improve their knowledge, skills and practices to excel in the industry both locally and internationally, the institute said.

Aramex expands express delivery channels to include Dubai Metro Aramex consignments are transported in special trolley bags

In line with its commitment to innovation and dynamism in its operations, Aramex, the global logistics and transportation solutions provider, has expanded its delivery channels for local express services within the emirate of Dubai to include the recently launched Dubai Metro. The new transport route complements Aramex’s existing ground fleet for express consignments, boosting overall efficiency and reliability of services for those routes that are currently inhibited by heavy vehicular traffic.

Two more islands sold on The World Nakheel has said it had sold two more islands on its The World project at an average of $65m each. “An island was sold as recently as August,” Marwan Al Qamzi, Group Managing Director Nakheel Projects said.

Mall of the Emirates expansion moves ahead The Mall of the Emirates has announced it is expanding its retail space with the new 10,500 square metres extension. A second glass dome is under construction above the mall’s extension area, designed by F+A Architects and detailed by Holfords. The new space will accommodate 40 more stores, and will cover three levels, plus a central fountain feature.

DUBAI REAL TIMES

machinery and technology associations and publications. The region's leading industry players, including wholesalers and retailers of floor coverings, decision makers in the contracting business, planners, architects, interior designers, construction companies, project planners, floor fitters and other skilled workers from the sector are expected to attend the exhibition and trade fair. The Address Hotels + Resorts, the five star premium hotel brand of Emaar Hospitality Group, has strengthened its portfolio in the UAE with the addition of The Montgomerie Dubai golf club with effect from October 8, 2009. The Address will now operate

INTERIOR DESIGN

How to go about modern apartment design By Anil Mangalat, Senior Designer / Architect at Samuel Creations S A

Tricks of the trade •

Position your big Italian sofa first and then work your way down to your smaller furniture pieces. Throw in one designer easy chair for that elegant but chic look. • A tasteful cow skin or loop pile rug would go perfectly with a polished stone or porcelain tile floor. Contrasts between materials if handled with taste can render the living room with a certain je ne sais quoi. • Ambient dimmable lights are a good choice and help vary the moods. • Usage of oversized paintings or exotic collections is a great way to breathe a little drama into your living room. A dining room is the life of a

good party setting.¬¬ to create that delightful milieu, work with a more lively coloir palette. But do remember a good balance between function and aesthetics is paramount.

Tricks of the trade •

A stately dining table should be accompanied by efficient yet interesting sideboards or buffets. • Create a feature wall on one side using an oversized artwork, leather panelling or just sophisticated wallpaper. • To this setting, one could toss in comfortable medium or high back chairs that make subtle or outrageous design statements to spark interest. • Position a modern chandelier, or a couple of pendant lights, over the table, keeping the source at about 900-1100mm away from the table top to achieve a soft but buoyant glow around your spread. • Last but not least, accessories using anything from eclectic cutlery to an iconic centre piece. The past few years have seen a complete perception change when it comes to kitchens. Apart from the appearance of the equipment which now come in all colours and finishes from glossy pearl whites to etched stainless steel, multi-functionality is playing an integral role. So it’s back to the basics for the new kitchen look. Tricks of the trade • Good amount of cabinetry and storage should eliminate

the problem of clutter. Messy and homely kitchens are totally passé. • Make use of spotless finishes like Corian and stainless steel. Combine them with grainy woods like walnut and oak for that trendy and immaculate kitchen look. • Add to it some invigorating shots of colours like lemon yellows, apple greens and zesty oranges for the final touch! In the bedroom, personalisation takes on a pivotal role in the design. Whether one is drawn to the opulent neo-classic or contemporary minimalism, the bedroom is a sanctuary and should be designed like one.

Tricks of the trade •

Soft headboards behind a comfortable bed, in leather or a textured fabric, along with reading lamps are a great comfort for late night readers. • Violent colours should be avoided for large surfaces. They should be used instead to create lively contrasts through accents. For that airy and elegant resort look, one can use patterned whites, a few shades of taupe and some wicker/rattan accent pieces. • Focus should be given on soft furnishings. Choose plush fabrics like cashmeres and silks when choosing bed throws and cushion upholstery to give it that extra tactile and textured oomph. The modern bathroom has an almost spa like connotation. Large vanity

counters, elegant sinks with designer faucets, state-of-the-art rain shower systems and luxurious Jacuzzis have all become commonplace.

Tricks of the trade •

Lighting ranks very high on the list when it comes to good bathroom design. Having warm ambient light is great while soaking in the tub for your spa-like feel but wall mounted lights around the mirror that light up the face are a must for every bathroom. • Doing up a wall behind the tub or the vanity in an elegant glass, stone or mosaic is a great way to make a statement. • For mirrors the trick is to go as big as you can. Nothing makes more of a statement in the bathroom than a perfect reflection. At the end of the day, whatever style one chooses as a medium of expression,-be it the grand Classical, funky Retro-pop, eclectic Global or contemporary Minimalist, it is the ingenuity of the designer that sets apart an interior design scheme. For those that want to take it a step further, the International Federation of Interior Architects/Designers is having their bi-annual World Design Congress here in Dubai, where celebrated speakers such as Ross Lovegrove, Piero Lissoni, Nadia Swarovski, Vicente Wolf and Sebastian Conran, to name but a few, will be sharing their valuable insights into the field of interior design. For more information on the event, visit www.ifi2009dubai.org.

DUBAI REAL TIMES

efore a professional interior Designer sets out to conceive any apartment, he must fully comprehend his client’s requirements and lifestyle. Samuel Creations pride themselves in being profoundly sensitive to their client’s individuality and cultural background. When designing for oneself, the approach remains the same. The first step is to isolate areas within the apartment and tackle each one as a mini project in itself while keeping an overall visual identity. The living room is where most people spend the bulk of their free time. So the word comfort is critical here.

UNDER CONSTRUCTION

The only way is up

ook around as you move about the city and see a number of buildings steadily going upwards. Men in Toetector shoes and brightly coloured hard hats move between scaffolding and portacabins continuing with their job of construction. Yes, proj-

DUBAI REAL TIMES

Silver Tower view showing the progress of the superstructure up to 26th slab floor & building core wall up to the 28th

ects and developments are still going ahead. Construction of Tameer’s 31-storey Silver Tower, located in Business Bay, is progressing. According to company officials, the 22nd typical floor of the superstructure has now been completed and the firm is expected to deliver the completed project in 2010. The development is advancing well and construction

passed the 60 per cent mark some time ago. Sources in Tameer confirmed that the slab for the 26th floor has been completed and the core wall has reached the 28th floor. The company is looking forward to handing over the completed units to owners and investors. At a height of 148 metres, the tower, with its silver aluminum facade and ultra-smart glass architecture, will comprise 260 offices of varying sizes, all characterised by the highest standards of design and construction. In addition to offering premium office space, Silver Tower will also be home to a fullyequipped health club, 748 private parking spaces, retail and commercial outlets, a cafeteria and more, spread across a total area of around 700,000 square feet. Construction on the i-Rise ofice tower is moving ahead with full power as the delivery date in 2010 is approaching. The i-Rise Office Tower is being developed by Realty Capital Middle East FZ LLC in Dubai’s TECOM Site-C and will be one of the largest office towers in the region, with 37 storeys of corporate and executive offices, incorporating a total builtup-area of more than 1.9 million square feet, an extensive retail area with restaurants and boutiques, as well as ample parking for office tenants and retail customers summing

up to 2,300 parking bays. The business tower will feature a specially treated podium façade; modern executive and corporate offices; 19 high-speed elevators, dining establishments; commercial space; a fitness centre; a helipad; and a multistorey car park. Realty Capital is working with the main contractor Al Naboodah in order to complete the project on

i-Rise

schedule. The casting of the 16th floor slab is underway, and electrical and mechanical works are also completed for the 14th floor. National Fire Fighting Manufacturing FZCO (NAFFCO), the largest fire fighting equipment manufacturing company in the Middle East, announced that construction on its one million square feet central production facility in Jafza is progressing

Naffco’s new production facility

used can cover 34 National Basketball Association specified basketball courts. The total length of gaskets – 2,050,000 linear metres – if laid endto-end is about the distance from Dubai to Damascus in Syria (2,052 kilometres). The cladding materials were specially made using advanced engineering techniques and include high-performance reflective glazing, aluminium mullions and textured steel spandrels with vertical stainless steel tubular fins. The cladding accentuates Burj Dubai’s height while lending it a shimmering slenderness. Panels of more than 18 different strength specifications and over 200 sizes have been used, all of them double-glazed and factory-sealed. The world record for the highest aluminium façade installation was achieved by Burj Dubai earlier in the year at a height of 512 metres, less than one year after work started. Mr. Mohamed Alabbar, Chairman, Emaar Properties, said “One of the key considerations when designing the cladding was maximising resistance against heat transmission from the sun and improving energy efficiency within the tower. The materials used, as well as withstanding the harsh summer temperatures ,keep heat out of the building, allowing for a significant reduction in the amount of air-conditioning required. Burj Dubai’s exterior is a

Burj Dubai’s exterior is now complete

model for high-rise developers creating sustainable buildings of the future.” The high wind speeds were a major challenge. At the highest altitudes, engineering teams had to work in tightly controlled shifts to install panels safely and efficiently. To minimise the risks involved in working at such towering heights, curtain-walling for the spire was preinstalled on the ground and then lifted to the summit to be secured. The panels used on Burj Dubai

have varying thicknesses, each featuring two glass pieces of about 8 mm to 12mm thickness, buttressed by a 12mm spacer for strength and resilience. Keeping the tower façade clean will be the next engineering challenge. To guarantee that every corner of Burj Dubai sparkles, 18 window-washing units are built into the tower, including nine track-mounted telescopic cradles, each with an extendable jib arm for cleaning that reaches more than 20 metres.

DUBAI REAL TIMES

on schedule. “The new facility is set to be fully operational by the end of 2009,” says Eng. Khalid Al Khatib, CEO of NAFFCO, commenting on the company’s expansion. Established in 1991 in Jafza, NAFFCO's current 274,000 square feet facility in the free zone includes its global headquarters, state-ofthe-art manufacturing and storage facility and its regional office. The company's core business entails design; manufacturing, supply, installation and maintenance services of products from basic firefighting equipment to highly sophisticated fire trucks. Exterior cladding for Burj Dubai, the world’s tallest building being developed by Emaar Properties PJSC, is now complete. The tower has accomplished a world record for the highest installation of an aluminium and glass façade. The total weight of aluminium used on Burj Dubai is equivalent to that of five A380 aircraft and the total length of stainless steel bull nose fins is 293 times the height of Eiffel Tower in Paris. The last cladding panel numbered 24,348, weighing 750 kg and 1160mm x 6400mm in height was placed at a height of over 662 metres (2172 ft), thus accomplishing the mammoth task of cladding the world’s tallest building. Arabian Aluminium Company, in association with Hong Kong based Far East Aluminium, began exterior cladding of Burj Dubai in May 2007, and the vast project has involved more than 380 skilled engineers and on-site technicians. A mixed-use tower featuring residences, corporate suites, and the world’s first Armani Hotel and Armani Residences, Burj Dubai is on course to be completed this year with work on interiors progressing simultaneously. With a total of 24,348 cladding panels over a total curtain wall area of 132,190 square metres, Burj Dubai’s shimmering exterior minimises heat transmission and saves energy. The total 103,000 square metres of glass used in the cladding panels can cover 14 standard football pitches and the 15,500 square metres of embossed stainless steel

LEGALLY SPEAKING

Residency visas for property owners in the UAE By Al Tamimi & Company

DUBAI REAL TIMES

“I

f I own a property in the UAE, will I be entitled to a residency visa?” “What are the conditions that have to be met in order to obtain such a visa?” These and similar questions have confused property investors for quite some time because there were never any laws or regulations in existence which clarified the conditions that had to be met and procedures to be taken to obtain a residency visa. In the past, some developers used residency visas as a tool to encourage investors to buy property by promising them full support and help to obtain such visas. In the Emirate of Dubai, developers would sponsor their clients when such clients applied for residency visas to the relevant authorities. However, due to the lack of comprehensive legislation, applicants did not always succeed in their efforts to obtain the desired visa. This led to inconsistency and vagueness with regard to the issue of eligibility for residency visas. In addition, there was also ambiguity as to the duration of such a visa, as some investors were able to obtain a three year visa and others were granted a visa for only one year. To add to the confusion, the Emirates of Ras Al Khaimah and Ajman had their own completely separate procedures and conditions to grant residency visas to property

owners. As a result of this confusion and due to the lack of laws and regulations governing this matter, ‘Ministerial Decision No. (281) of 2009 amending some provisions of the Executive Regulations of the entry and residency law for entry and residency of foreigners’ was issued at the federal level to specify the rights and obligations of property owners in relation to residency visas. The said Ministerial Decision supersedes any other residency visa regulations locally implemented in any of the Emirates. This article aims to highlight the main points of the Ministerial Decision and discuss the conditions which have to be met to obtain a residency visa. The Decision deals with two major aspects, the first being the duration of the visa, specified to be six months, and the second stipulating the qualifying conditions. According to Article 33 of the Ministerial Decision, the visa shall be issued for six months, after which the visa holder must leave the country either to his own country or to any GCC country. It is not clear from the wording of the said article whether the visa holder must stay outside the country for one month, as is the case for visit visas, or he can apply immediately for the renewal of his visa. On 5th May 2009, the print ver-

sion of Gulf News newspaper quoted Brigadier Nasser Al Awadhi Al Minhali, Acting Director–General of the Federal Naturalization and Residency Department (FNRD), as saying, “After six months in the country, the investor must leave the UAE to return to his home country or any of the GCC countries for at least a month before he is eligible to ap-

ply for a fresh mult-entry visa”. The online version, however, removed the words “at least a month” . A follow up report in the newspaper on 5th May 2009 stated that, “It was reported earlier that people who complete six months stay need to stay out of UAE for at least a month before being able to renew the visa. However, the interior min-

Conditions Article 34 of the Ministerial Decision stipulates the conditions which need to be fulfilled in order for a property owner to be eligible for a residency visa. These conditions can be divided into two categories. The first relates to the property itself and the second relates to the

applicant. 1. Conditions related to the Property: • The property must be completed. Owners of plots and off-plan properties do not qualify for a residency visa. • The value of the property must be Dh1 million minimum.

The Ministerial Decision did not clarify the basis on which the property will be valued, however, the most practical way to value the property will be by using the amount stipulated in the sale and purchase agreement. • The property must be suitable in size to house all family members. This condition is to ensure that the property is a suitable place for family members. For example, owning a studio will not qualify a family of four for residency visas. • The property, whether a house or an apartment, must be wholly owned by the applicant. According to this condition, joint ownership is no longer accepted

for the purpose of obtaining a residency visa. Previously in joint ownership cases, a residency visa was granted to the first named person on the title deed. This is no longer the case, as the applicant must be the only owner of the property. The exception to this condition is joint ownership between husband and wife,

and in such cases the husband as an applicant will be eligible with his family members for residency visas. 2. Conditions related to the Applicant: • A title deed issued by the competent authority in the Emirate. The title deed issued by the competent authority (for example, the Dubai Land Department) is considered to be the only evidence acceptable to prove ownership of a property. Any other documents such as a sale and purchase agreement or a reservation agreement are not accepted. • Valid medical insurance for the duration of the stay in the United Arab Emirates. The applicant must present a valid medical insurance certificate for himself and his family members for the duration of the residency visa. • The wife and children of the applicant can be included in the visa. • The applicant must have a minimum fixed monthly income of Dh10,000, whether generated inside or outside the United Arab Emirates. This condition stipulates that the applicant’s monthly income must not be less than Dh10,000 (and applicants may be asked to provide three or six months’ bank statements to prove this). It is clear that the Ministerial Decision provides that the required income can be generated inside or outside the UAE. However, it should be noted that granting a residency visa to property owners does not give such owners the right to work inside the country. Not all sources of income are acceptable but examples of an acceptable income generated in the UAE are inter-

est from bank accounts and income coming from stock dividends.

Why might terminology be important? Does the Ministerial Decision pertain to visit visas or residency visas? The Decision provides, in Article 34, the following: “the application to obtain a visa or multi-entry permit in relation to the ownership of property should be submitted as per the following conditions and procedures…”. Although the Ministerial Decision deals with the rights of property owners to enter and live in the UAE, the Decision uses terminology such as “visa” and “multientry permit”. Using the expression “multi-entry” may create some uncertainty as this expression is usually associated with visit visas as opposed to residency visas, which are by their nature multi-entry visas anyway. The importance of such a distinction is that a residency visa gives more rights to its holder than a visit visa. For example, holders of residency visas are entitled to open bank accounts and obtain a driving licence . Issuing Ministerial Decision No. (281) of 2009 was a good step towards achieving clarity in relation to eligibility of home owners to obtain residency visas. In addition, the Ministerial Decision unifies the procedures and conditions which existed in the various emirates, which were causing confusion and led to inconsistent results. However, as discussed above, there still remains some confusion in relation to the implementation of some provisions of the Decision. This ambiguity will hopefully lessen with time and practice as more people submit their applications to obtain residency visas.

DUBAI REAL TIMES

istry on Tuesday confirmed there is no waiting time before renewing the visa.” Another report published in Khaleej Times on 5th May 2009 stated that, “To renew the visa, the owners should leave the country to their homelands, or to the GCC countries, without need to stay one month as they can apply to renew the visa after hours of leaving the country”.

LEGALLY SPEAKING

Buyer beware: questions to ask before investing By Helen Tapadar Hangari, Senior Legal Consultant, DLA Piper Middle East LLP

DUBAI REAL TIMES

fter the events of the past year, no one can be in any doubt that the real estate market in Dubai is a very changed place to that of previous years. The frenzied speculation that sent prices soaring has ceased and we are now faced with a new, more mature, real estate market. Although the market is certainly a more difficult terrain to conquer than previously, there are still healthy returns to be found for companies who are willing to adapt their approach and do their homework before entering it, whether by way of purchasing an asset, entering into a lease or entering into a management agreement of, for example, a hotel. In previous years, many developers and investors would not ask important questions concerning the land or the proposed development before parting with their cash as prices were accelerating steeply and it was easy to realise gains. However, in the drive for these short term gains, many players have been hard hit by long-term problems. In these changed times the rewards will only be there for those who are willing to do thorough due diligence and assess whether a project is really worth investing in. The regulatory framework is also evolving to allow more investigation to be done into a potential investment before committing to it, which reduces the scope for disputes and disappointments in the future. Here are some of the questions

done in a matter of hours without any investigation by an investorsâ&#x20AC;&#x2122; professional advisors. Prior to heads of terms being signed, an investor ought to appoint a professional team to work on the transaction with them in order to avoid expensive pitfalls further down the line. In most cases, at the very least, this will consist of lawyers and surveyors. A good firm of lawyers will conduct a thorough due diligence of all aspects of the project and of the seller/owner and negotiate contractual arrangements that protect the investor as much as possible. Surveyors ought to be appointed to inspect the project itself and in the case of completed projects, it is wise to get the space measured independently rather than simply rely on the seller's measurements. Helen Tapadar Hangari

that every investor should be asking:

Registered broker For some time now, the Real Estate Regulatory Agency (RERA) has required all brokers operating in Dubai to be registered with them. An investor should check the credentials of any broker it approaches with RERA, whose website contains a list of all the approved brokers in Dubai. A well-informed investor will also shop around to find an equally well-informed broker who understands the nature of real estate investments and who can back up any projections it makes as to the asset's future performance.

Registered developer RERA's website also contains a list of approved developers and investors can also, in many cases, obtain further information on the projects it is currently undertaking. Such details are the name of the project, the master developer, the location, the escrow account number and the relevant escrow agent i.e. the bank holding the escrow monies. This is important information and can be used as a starting point for investigations into the developers escrow arrangements, if the investment is into a property under construction.

Professional advisers Gone are the days when deals were

Construction progress The RERA website also contains information on the progress of many projects and, importantly, whether the project is on hold. This is again a useful starting point for seeing how progressed a project under construction is but, of course, a site visit should always be undertaken, along with other investigations depending on the particular project.

Title investigation It is imperative for an investor to ensure that the party purporting to sell or lease an asset, or grant a management agreement of the same, is the party that owns the asset and is therefore entitled to enter into such a transaction. Title deeds are

Owner investigation An investigation into the company that owns the asset must be conducted in order to ensure that it is a validly existing company and that ownership of the asset, and any associated transactions are authorised activities according to its trade licence. The nationality of the ownership of a company will also determine where in Dubai it can own land and this is also worth investigating. If a property is under construction, an investor will understandably be concerned about whether it will indeed be completed or not. Therefore, it is perfectly reasonable to raise enquiries with the owner regarding the progress of construction and the associated professional appointments it has made, for example, who its contractors

are. Depending on the nature of the investment, it may be appropriate to investigate the construction aspect of the project in greater detail.

Negotiation of contracts Hopefully with the end of a speculators market will come the end of contracts being treated as non-negotiable; and we have seen strong evidence of this change already. Whilst certain factual provisions in a contract will be non-negotiable simply because they are fact (e.g. proposed handover date), there is no reason why other terms in a contract cannot be negotiated and the ability to negotiate is a key indicator of the level of sophistication of a seller or developer. A seller or developer who still refuses to negotiate a contract may be suspected of trying to hide something or simply not understand its own project well enough to think outside of the box of standard contracts. RERA have repeatedly stated that they can help investors where a developer has acted contrary to the contract between the parties. However, if an investor has signed a contract which is heavily weighted against him, and the developer is not

in breach of it as a result, it is almost impossible to take any real action in these circumstances.

Strata arrangements Law No. (27) of 2007 Concerning the Joint Ownership of Properties (Condominiums) in the Emirate of Dubai (commonly referred to as the 'Strata Law') has been much talked about but will be applied in practice once the associated regulations are published and come into effect. With

The above issues are just some aspects that should be examined before making an investment in real estate and is not exhaustive. The nature and extent of due diligence will vary on a case-by-case basis depending on the nature of the investment. Such due diligence is simply common practice in mature markets and is to be welcomed in Dubai as it adds more credibility to the real estate market. Obtaining such in-

The regulatory framework is also evolving to allow more investigation to be done into a potential investment before committing to it, which reduces the scope for disputes and disappointments in the future the introduction of the regulations, there will be obligations on developers to make certain important disclosures to prospective purchasers of real estate under construction and for completed projects, the strata schemes will be operating and equally there will be detailed information to review to understand the scheme and the liabilities and obligations that come with owning or occupying part of the project.

formation at the entry stage will also make matters more straightforward at the time a company wishes to exit from its investment when the potential buyers at that time will certainly ask for the same information. Therefore, taking the time to carry out detailed due diligence now, will result in benefits throughout the life of the investment and lead to a more rational approach in the market which is better for everyone involved.

DUBAI REAL TIMES

issued by Dubai Land Department and can be obtained by interested parties. If an asset manager has been appointed in respect of the asset, or there are intra-group leasing arrangements in place, a more detailed investigation will need to be conducted by the investor's lawyers.

LEGALLY SPEAKING

Q&A

Questions answered by Al-Kabban & Associates Can I pay my instalments according to the construction stages that are completed, even though the contractual agreement specifically states that the instalments are required on a preset time-frame? According to RERA regulations, all off-plan real estate payments are to be paid as per construction stages, even if the developer’s sale agreement states that payments are to be made on specified dates. When can I cancel my contract and not be in breach of any laws?

DUBAI REAL TIMES

If the developer has not registered the visual contract with the Oqood division of the Land Department. The initial purchase and sale agreement between the developer and purchaser needs to be registered with Oqood at the Land Department. In the event that it is not registered, the purchaser of the unit has the right to file a case pursuant to Article 3 of Law 13 of 2008. a. If the developer has not opened an Escrow account for the project If payments received by the developer from the purchaser(s) have not been deposited into an escrow account for a specific project, then the developer’s actions are considered a breach of trust. Pursuant to Article 16 (4) of Law 8 of 2007, the developer is held liable and can be imprisoned with a fine not less than Dh100,000. b. If the developer has not genuinely commenced with the construction. In this situation the purchaser(s) will have to refer their inquiry to the concerned division in RERA. After investigation, if RERA has reason to believe that the developer has indeed not commenced construction of the project, pursuant to the new Article 11(5) of Law 9 2009 RERA has the authority to cancel the project. If this occurs, then the developer must return all amounts collected from the purchaser(s) with accordance to the procedures stated in Law 8 of 2007 concerning Guarantee Accounts of Real Estate Developments in the Emirate of Dubai.

As a Developer, can I force the buyers to pay the remaining instalments and how? The developer can force the purchaser(s) to pay the remaining instalments if the purchaser(s) fail to fulfil the contractual obligations set out by the purchase and sale agreement. The developer should notify the Land Department of the defaulted payments in a detailed report. The Land Department will then issue a 30-day notice for the purchaser(s) to remedy his/her breach. If the purchaser(s) fail to comply, then pursuant to Article 11(2) of 2009 the amount that can be retained or demanded depends on how much of the development has been constructed. The relevant categories are listed below: • If the developer has completed not less than 80 per cent of the development, the developer may retain all of the amounts paid by the

Dr. Reyadh Al-Kabban

purchaser(s) and may request the purchaser(s) to pay the unpaid amount of the purchase price stated in the contract. If the purchaser does not pay the remaining amount, the developer can request the sale of the real estate unit at public auction to obtain the remaining amount. • If the developer has completed not less than 60 per cent of the development, the developer may terminate the contract and retain not more than 40 per cent of the purchase price stated in the contract. • If construction of the development has commenced but has not yet reached 60 per cent, the developer may terminate the contract and retain not more than 25 per cent of the purchase price stated in the contract. • If construction of the development has not yet commenced for reasons outside the developer's control and without any neglect by the developer, the developer may terminate the contract and retain not more than 30 per cent of the amount paid by the purchaser(s) towards the purchase price. Construction under Law 9 of 2009 means that the developer has taken possession of the development site and has commenced construction works in accordance with the designs authorised by the competent authorities. What is the position of the Dubai Courts regarding the developer’s non registered contracts with the Land Department? This is a controversial topic. According to the legislation in place, the investor is entitled to his money back if the contractual agreement is not registered with Oqood in the Land Department. The Dubai Courts have differing opinions depending on which court the dispute is at. The Court of First Instance has passed several judgements on real estate disputes that have non-registered contracts in Oqood pursuant to Article 3 (1) (2) of Law 13 2008 regarding the regulation of the initial registration (Oqood) in Dubai. Paragraph 1 of Article 3 of the mentioned Law provides that all off plan transactions are to be registered in Oqood with the Land Department, otherwise the transaction shall be considered null and void. The Appeal Court till today has taken a different stance to this matter and has cancelled the judgements passed down from the Court of First Instance. This has been done on the grounds that the principle that has been set up by Article 3 of Law 13 2008 is not considered a public order, instead they argue that it has been placed for regulatory purposes of real estate contract registration at the Land Department. The Appeal court has decided that any disputes with the developer must be initially referred to the Land Department, where the dispute shall be reported before filling the case in the Dubai Court of Law, pursuant to Article 13 of Law 13 2008. The Court of Cessation is yet to issue any decisive judgement over the mentioned disputes. We still await their decision as this will provide the turning point for these disputes and will have a large-scale impact on both developers and investors.