Gulf Property February 2015 issue by Gulf Property

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The regionâ&#x20AC;&#x2122;s premier monthly for lifestyle, real estate and construction

Mortgage market hot with competition

Cities race for the skies with Tall Towers

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7TH re Y

VOL. 7, NO. 5 FEBRUARY 2015

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EXCLUSIVE INTERVIEWS Ahmed Al Hatti, Cayan Group Hamad Ali, Grand Properties Dr. Samir Hulileh, Jericho Gate Mustafa Pooya, Select Group Adam Price, Select Property Mathieu Greppo, Hyatt Regency Ahmed Al Mansoori, Reef

The Godfather Mohanad Alwadiya: Rise of

TOLL FREE IN UAE: 800 - DANUBE (326823)

Email: info@aldanube.com

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A second opportunity,

due to high demand! Additional units in Hyatt Regency Creek Heights Residences Phase 2 are now released. To register, visit www.creekheights.com or our on-site sales centre. Call: 800wasl (9275) | Email: sales@wasl.ae * Artist’s Impression * wasl is responsible for the development and sale of Hyatt Regency Creek Heights Residences.The residences are not developed, sold, or managed by Hyatt International Corporation or its afﬁliates, including Hyatt International – South West Asia, Limited (collectively, “Hyatt”). Hyatt has granted the developer the right to offer and sell the residences under the “Hyatt Regency” trade name and mark under a trademark license. The Hyatt brand name and trademarks are not part of the sale of the residences. Hyatt has no responsibility for the offering, marketing, sale, or solicitation of any of the residences.

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EDITORIAL

Tough time ahead for the real estate sector in Dubai

Dubai's property market has softened further, as expected, following the artificial price hike right after Dubai's historic World Expo bid winning in November 2013 – that prompted the government to intervene by doubling property registration prices that in turn had wiped off speculative elements from the market.

owever, industry experts are predicting a further fall in property prices, with investor sentiment further dampened by the falling oil prices. If the current low price of oil continues for long, they say it will have a worse impact on real estate.

While many property brokers might have already started panicking, while some others might face job loss or salary cuts, the UAE's economic fundamentals remain strong due to certain factors such as diversification, strong infrastructure and connectivity, ease in doing business – that will continue to attract investment and help job creation. So, we do not see reasons for panicking.

CONTENTS

COVERSTORY 52

NEWSUPDATE

Financial Results DLD transactions

RENTALINDEX

SPECIALFEATURE

20 42

Upendra Balchandani/CBD 28 Victoria Garrett/ Knight Frank 28 Donna Spencer & Chris Allen/Complete Finance 28 Mayank Sawhney/Ernst & Young 29 Sam Wani/ Independent Finance 29 Richard Paul/Cluttons 30

How the developers and brokers navigate through this situation is to be seen. However, those who survived the 2008-09 crisis, know very well how to survive the downturn. We wish them good luck.

Like the previous crisis, we also plan to take this rough weather with courage and grace. We grew in recession. This time also, we shall overcome – with the help of our advertisers, readers and well-wishers.

– T. Akhtar

EXCLUSIVEFEATURE Select Group Tall towers Select Property

56 60 68

HOSPITALITY

INTERVIEW

However, one thing is for sure – this time the decline won't be as drastic as it had been in 2008-09. That time, the market crashed. This time, it is declining. Besides, the market is well regulated and an investor protection scheme is in place. The developers active in the current market are strong and their companies are well capitalised. The current state is also making ready-to-move-in properties more attractive for end-users as they could get the same apartment at a cheaper price than last year. For tenants, this is a good piece of news – as rents won't escalate further, not at least for the time being.

INTERVIEW

Jericho Gate Reef Real Estate

GULF PROPERTY

The region’s premier monthly for lifestyle, real estate, construction and building materials

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T. Akhtar Pan Asian Media MFZ LLC

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Gulf Property 9

REALTYBYTES

Emaar undergoes management restructuring to propel growth Mohamed Alabbar, Chairman of Emaar Properties

lobal property developer Emaar Properties recently announced its new organisational structure, which saw the inclusion and shuffling of many top executives. The developer cited driving sustained value creation for its stakeholders, and powering the growth of the company with a focus on professional project management, timely delivery and world-class customer service, as reasons for the management restructuring.

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Mohamed Alabbar, Chairman of Emaar Properties, said the new organisational structure draws on the Dubai Plan 2021 announced by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. “As Dubai builds its future as a smart, sustainable city and a preferred place to live, work and visit, Emaar is creating a fresh template for its sustained growth and value creation,” Alabbar stated. “In today’s maturing prop-

erty market, our priority is to manage and deliver our projects efficiently through our team of experienced professionals. They are supported by a new cadre of young professionals, led by Emaar’s core values of developing quality-driven projects, timely delivery and excellent customer service while further enhancing the value of our masterplannned communities,” he further commented. Alabbar added that Emaar, under its new organisational structure, will continue to develop prime real estate assets in its home market of Dubai and other high-growth international markets, as well as strengthen its competencies in shopping malls & retail, and hospitality & leisure. “Among the key strategic directions defined by the new organisational structure are our concerted efforts to strengthen Project Management in Dubai. A seasoned professional has been appointed to head Emaar’s Project Planning & Programming Department for developing appropriate project management programmes and ensuring the timely completion and on-schedule delivery of Emaar’s projects,” he said. Alabbar added that in today’s age of incredible advancements in information technology and the enormous reach of social media networks, it is essential for any company to analyse customer’s behaviour on regular basis and implement proactive strategies.

“As part of this, Emaar has established a Customer Relationship Management department, which will be responsible for developing customer loyalty to the company’s products and services by regularly analysing internal and market data,” he noted. Emaar’s new organisation structure includes Amit Jain who has been promoted to Group Chief Operations Officer and Chief Executive Officer - Emaar Dubai. He will be responsible for the overall operations and financial matters for the Group with a special focus on the Dubai operations. The other senior managers of Emaar include: Mohamed El Dahan & Ozan Balaban (CEOs – Regional); Ahmed Al Falasi (Executive Director – Group Operations); Osama Sabboubeh (Executive Director – Projects Dubai); Osama Abou El-enain (Executive Director – Development Dubai) and Rasha Hassan (Chief Commercial Officer). All of these senior professionals have over eight years or more of work experience with Emaar group. Emaar has also appointed Clare Elliot as Group Head of Human Resources. Additionally, Deepak Jain, who has significant expertise in strategy development for real estate projects as Regional Director for Strategy – MENA at global research firm Jones Lang LaSalle, also joined as Chief Strategy Officer in January. Noel Madigan, with over 32

years of experience in Australia, Indonesia and the Middle East, is heading the Project Planning & Programming Department reporting to the Managing Director and Khalid Dalil has been appointed as head of the Customer Relationship Management Department. Fred Durie, formerly CEO of Emaar International, will continue to serve on the boards of Emaar joint ventures in Jordan and India. Robert Booth, who has been serving as Chief Executive Officer – Emaar Real Estate Dubai, will continue to work with the company in an advisory capacity to the Emaar Chairman. “The organisational structure highlights our strategy of honouring merit and encouraging talented professionals to join us in our ambitious growth journey,” Alabbar said. “Our iconic projects in

Dubai are the result of global collaborations with some of the world’s brightest talents.” With assets of Dh64.93 billion (US$17.68 billion) as of 2013-end and an impressive land bank of over 226 million square metres in high-growth international markets, Emaar has launched several new major projects this year, which received strong investor response. These include the Dubai Creek Harbour at The Lagoons in a joint venture with Dubai Holding, Dubai Hills Estate with Meraas Holding, the expansion of Arabian Ranches and The Opera District in Downtown Dubai, among others. In 2014, Emaar announced one of the largest dividends by any listed company in the UAE of Dh17.12 billion (US$4.66 billion) highlighting its successful model of value creation. g

weet Homes Holdings, a leading UAE-based developer and multi-service provider to the real estate sector, is proud to announce the completion and coming hand over first phase of Paradise Lakes Towers project. The project, which is the first freehold development to be fully completed by a private developer in Ajman, has already received certifications from the Municipality of Ajman and the Office of Civil Defense. Paradise Lake Towers (B5, B6 & B9) is ready to be handed over to its first batch of investors. “We are pleased to announce the handover of

the first phase of Paradise Lakes Towers. This 100% freehold ready project is expected to give its residents a taste of the good life - breathtaking ambience, exquisite interiors and your dream of a luxurious and serene lifestyle that is also close to nature,” said Fahad Sattar Dero, Managing Director. “The project has already received certifications and clearances from the necessary government agencies and is now ready to turn over the keys to investors who have purchased their units. We welcome the residents to their new home and look forward to serving them continuously,” Dero said. The Paradise Lakes Towers project has been de-

REALTYBYTES

Sweet Homes delivers freehold project in Ajman

Fahad Sattar Dero, Managing Director, Sweet Homes

signed to give its residents ‘a glimpse of heaven on earth’. The real estate development, which is composed of eight towers, comprises G+4 parking + 25 typical floors + health club. The project is located right in the heart of Ajman and ensconced be-

tween two major highways -- Sheikh Mohammad Bin Zayed Road and Emirates Road - offering quick access to Dubai, Sharjah, Ras Al Khaimah, Umm Al Quwain and Fujairah. “We are happy to hear about the coming turnover of Paradise Lakes Towers. As one of the many people who have invested into this development, the completion of the project has been highly awaited and anticipated. Having seen the towers stand majestically across the Ajman skyline, I can say that this was well worth the wait and we look forward to finally getting the keys to our units,” concluded Hany Al Deeb, an investor. g Gulf Property

DAMAC Maison opens new Cour Jardin hotel apartments REALTYBYTES

uxury real estate developer, DAMAC Properties has opened its third luxury serviced hotel apartments in the Burj Area of Dubai – ‘DAMAC Maison Cour Jardin’ - managed by the company’s hospitality arm, DAMAC Maison Hotels & Resorts. Within walking distance to the Dubai Mall and Dubai

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Fountain, DAMAC Maison Cour Jardin is now open for business in this bustling area of Dubai. The launch of the hotel apartments in the developer’s third project after DAMAC Maison Dubai Mall Street and DAMAC Maison Canal Views. The official opening took place in late December and was preceded by a special event for business partners

from the travel & tourism industry, who visited the project and received detailed first-hand information about the various aspects, facilities and services offered at this new luxury property. Segafredo Italian Café is a distinguished feature at the hotel, located at the ground floor and offering a perfect set-up for morning breakfast, lunches or casual meetings. This famous Italian chain launched in 1988 is present in more than 60 countries in 5 continents and is growing rapidly around the world due to its special taste and quality serving the best Italian coffee and various food items. “DAMAC Properties is extending our hospitality offering in terms of quantity and quality for the visitors of Dubai,” said Niall McLoughlin, Senior Vice President, DAMAC Properties. “DAMAC Maison Cour Jardin, as with all DAMAC Maison projects, will offer various first-class options to clients searching for the best experience in town, be it for leisure or business.” “The opening of DAMAC Maison Cour Jardin couldn’t have been timed better; especially during this very busy period that includes the festive season and the upcoming Dubai Shopping Festival that will generate a substantial increase in the number of visitors coming to Dubai,” McLoughlin stated. Strategically located in the heart of the business, dining and shopping district of Dubai, this plush hotel is the

ideal place for both business and leisure travellers alike, looking to shop in the world’s largest mall or to visit the well known water fountains in between many other attractions. Spreading across 19 floors, with more than 350 apartments, DAMAC Maison Cour Jardin offers refined living in comfortable deluxe rooms, with one, two and three bedroom suites on offer, all with exceptional services. One of the special features of DAMAC Maison Cour Jardin is the ‘Chrysalis Spa’, the second in town after the one launched at DAMAC Maison – Dubai Mall Street, offering the best body and skin treatments offered by experts in the field. The terrace is another highlight of the project; with a total area of more than 4,300 square feet and set on the first floor. It represents an excellent option for large functions and events that can be held around the swimming pool within a ‘green’ set-up of plants giving an open and relaxed atmosphere in the middle of Downtown Dubai. DAMAC Properties’ hospitality portfolio will expand within the next three years to reach around 10,000 units of hotel rooms, serviced hotel apartments and villas. The company has multiple luxury projects in the pipeline, including ones near the Burj Khalifa and other key areas of Dubai. They will be launched in the coming months. g

REALTYBYTES

Nakheel starts leasing spaces at Golden Mile

akheel in January began leasing office, retail and dining space at Palm Jumeirah’s Golden Mile in Dubai, as part of its expanding retail development portfolio. The Golden Mile will have around 70 outlets including a supermarket, department store, cafes, restaurants, medical centre and gym. The first are expected to open in April 2015. Around 400,000 square feet of office and retail space is available in total. g

Retailers book 30% of Circle Mall

lmost a third of shop space at Nakheel’s new Circle Mall at Jumeirah Village in Dubai has been booked – less than two weeks after its launch, developer Nakheel stated recently. Around 130,000 square feet at the new retail and leisure destination is accounted for, with upscale British supermarket chain Waitrose confirmed as the anchor store. The multiscreen cinema and most of the casual dining and food court space is also already taken, Nakheel announced. Circle Mall will have 200 shops, an anchor supermarket, two departmental stores, a cinema and a variety of dining outlets. Ali Rashid Lootah, Chairman of Nakheel, said: “Retail expansion will continue to be

a focus for Nakheel in 2015 and beyond. We are targeting 10 million square feet of leasable space through a diverse range of new projects – from large-scale malls and souk-style complexes that will attract residents and tourists.”

“The reaction to Circle Mall, and to other recentlylaunched Nakheel projects proves that retailers are hungry for new space where they can expand their business and capitalise on Dubai’s growth.” The mall is located be-

tween Sheikh Mohammed Bin Zayed Road, Al Khail Road and Hessa Street, and will serve hundreds of thousands of residents and tourists across Dubai. Construction is expected to begin in Q1 2015.” g Gulf Property

REALTYBYTES

FEP acquires 50% stake in Oryx Industries

irst Equity Partners (FEP), a MENA private equity firm, recently announced the acquisition of Oryx Industries, a Fujairah-based producer of building materials. FEP and the partners have collectively committed a total of Dh500 million to the venture as of December 2014. The initial acquisition of a 50% stake will be followed by a full acquisition by end of Q1 2015. The consortium of investors who have joined forces with FEP to execute this acquisition include: Sheikh Abdulla Al Sharqi (Chairman of Oryx Industries), State Holding (Qatar), Rawabi Holding (KSA) and Al Waab Real Estate (Kuwait). A press conference was held on January 15 and led by spokespersons representing leading shareholders including Qais Al Maskati, MD and CEO of First Equity Partners, Osman Ibrahim, Group CEO of Rawabi Holding, Majdi Khalaf, Vice Chairman/CEO of Oryx Industries, and Adnan Ashkanani, Executive Management member of State Holding. The acquisition supports the expansion plans of the construction materials producer, which has delivered robust growth in the recent past. It also capitalises on the GCC’s construction boom, driven by significant investment in large-scale real estate and infrastructure projects. g

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Dubai Investments buys key financial, realty firms

ubai Investments PJSC (DI), the leading investment company listed on the Dubai Financial Market, has announced expansion plans across its diversified portfolio, which includes two new acquisitions worth Dh400 million. The new acquisitions in the financial and real estate sectors are expected to reinforce Dubai Investments’ robust growth across its 40plus subsidiaries and joint ventures, amidst surging trends and escalating investor confidence. The new financial entity, with expertise in asset manage-

struction materials’ manufacturing businesses achieving strong year-onyear growth. Khalid Bin Kalban, Managing Director and CEO of Dubai Investments, stated, “We are eyeing expansion across our group portfolio and our new acquisitions are in line with this. The financial service company is a right fit for us and perfectly complements our model. The new real estate company will be a great addition to our portfolio, and

Khalid Bin Kalban, Managing Director and CEO of Dubai Investments

precedented demand in the sector benefited DI immensely, given our wide presence across the entire spectrum of the industry. We are confident that the current demand in the sector will continue in the foreseeable future and we are geared to cater to the required capacity.” Over 67% of Dubai Investment’s asset base is in the real estate sector and is currently worth over Dh8.2 billion – making DI one of the biggest real estate players in UAE. DI also has one of the largest land banks across the UAE, totalling nearly 30 million square feet of Gross Floor Area (GFA). g

Dh400mn is the worth of the two entities that Dubai Investments has acquired

ment, corporate advisory, debt raising and brokerage capabilities, will augment DI’s capabilities in the sector while the new real estate company will complement DI’s market leadership in the property domain. The expansion plans follow a successful 2014 for Dubai Investments, which saw its operations across real estate, glass and con-

contribute to our growth amidst the current upswing in the sector.” He added, “2014 has been a great year for DI’s business growth. The real estate industry has always been a key driving force for UAE’s economy and the un-

REALTYBYTES

Anantara moves into Qatar with Banana Island Resort

nantara’s ‘Banana Island Resort Doha’, the luxury brand’s first resort in Qatar, was launched recently and received a grand opening, as HE Sheikh Abdullah bin Nasser Al Thani, Prime Minister of Qatar and the Minister of Interior inaugurated the project. ‘Banana Island Resort Doha’ is being managed by Anantara, the leading luxury developer specialised in resorts and hotels management, and is developed by Al Rayyan Hospitality, which has developed other hospitality projects in Qatar and London. Banana Island Resort Doha by Anantara is located on a Qatari crescent shape island in the Arabian Gulf, and is only a 20 minute journey by luxury ferry from Al

Shyoukh Terminal located in the city’s downtown area, or a 10 minute helicopter ride directly from the Hamad International Airport. The distinctive crescent shape of the island provides a natural harbour framed by an 800 metre-long private beach, where guests can relax and swim in the calm waters of the turquoise sea. ‘Banana Island Resort Doha by Anantara’ feels a world away from bustling Doha. The 141 luxury guest rooms, suites and villas are designed in Arabian style with signature Anantara touches including 54 Premier Sea View Rooms, 16 Deluxe Sea View Rooms, eight Sea View Suites, 18 Anantara Suites and 34 spacious Sea View Pool Villas featuring a personal pool and poolside cabana. The eight two-bedroom

Over Water Villas and trio of prestigious three-bedroom Anantara Over Water Villas offer 360 square metres of luxurious space and a 62 square metre personal pool, ideal for families and groups of friends. The resort boasts its own marina with 30 berths. Be-

sides it also offers a retinue of outdoor sports, fitness, water sports and luxury yacht sailing options. Eight dining options offer a mouthwatering choice of Middle Eastern, Italian and international cuisines at spectacular locations all around the island. g Gulf Property

Nakheel, Engel & Völkers sign JV REALTYBYTES

akheel has signed a joint venture agreement with the global, Germanybased premium real estate brokerage firm Engel & Völkers to create a new company specialising in selling and leasing properties in Dubai, United Arab Emirates. The agreement follows a letter of intent, signed between the two companies in 2014, to seek global opportunities by bringing together Nakheel’s Dubai real estate expertise and Engel & Völkers’ long-standing international brokerage experience and network. The joint venture has created a new company that will operate under the Engel & Völkers brand. Engel & Völkers is currently represented with more than 600 offices based in 38 countries spanning five continents, through which

Ali Rashid Lootah, Chairman of Nakheel

Sven Odia, CEO of Engel & Völkers

Nakheel will be able to market its properties to more than 500 locations worldwide and benefit from exposure to a new international clientele. In turn, Engel & Völkers shops can refer interested buyers to the joint venture in Dubai, leading to extensive cross-selling opportunities. The company expects to open its new, 850 square metre Dubai Market Centre

(MC), based at Nakheel’s head office, in the first quarter of 2015. The MC brokerage platform seeks to employ 250 staff members, and the recruitment campaign is already underway. Nakheel Chairman Ali Rashid Lootah said, “This exciting joint venture is a natural progression for both Nakheel and the Dubai real estate sector. We are de-

area of 21 square kilometres. Lusail City, one of the GCC region's most high profile real estate developments, is sponsored by Qatari Diar Real Estate Investment Company. Upon completion, the development is expected to include residential and commercial developments as well as districts focused on education, media, energy and entertainment. Atif A. Abdulmalik, Chief Executive Officer of Arcapita, said, "Arcapita has an established track record of master-planning and developing large-scale golf

residential communities having made successful investments in leading projects in Dubai and Bahrain. Pursuing investment opportunities in real estate markets across the GCC region continues to be a key part of our global investment strategy.” Hisham A Al Raee, Arcapita’s Chief Operating Officer, added, “The Arcapita team developed the master plan and design concepts for one of the largest single plots in Lusail City. During the holding period, the team focused on attracting development

lighted to partner with E&V to create this new company, which will allow us to tap into new markets and give investors worldwide the opportunity to become part of Dubai. Our partnership unites our Dubai expertise with the skills, knowledge and renowned customer service of one of the world’s top brokerage firms.” Sven Odia, CEO of Engel & Völkers AG, added, “We are extremely pleased to partner with Nakheel to offer mutual services on the fast-growing real estate market of Dubai. Engel & Völkers is a strong and well-known brand. For a strategic partnership we were looking to join forces with an equally strong brand. The joint venture agreement paves the way to create a business that will provide significant benefit to its customers in Dubai.” g

Arcapita sells $1.4bn stake in Lusail Investment rcapita, a global alternative investment management firm, has recently announced that it has sold its 50% stake in Lusail Golf Development LLC (‘Lusail Golf’), to Barwa Real Estate Company QSC. Lusail Golf owns the development rights to a 3.66 million square metres plot of land north of Doha, Qatar. The total value of the plot is approximately US$1.4 billion. The plot owned by Lusail Golf is located in ‘Lusail City’, a master-planned development covering an

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Atif Abdulmalik, Chief Executive Officer, Arcapita

partners and optimising land utilisation. We are pleased that our investment in Qatar has resulted in a profitable outcome for our investors.” g

REALTYBYTES

Nakheel opens Al Khail Avenue for retail lease

akheel recently launched 1.5 million square feet of shopping, dining and entertainment space at Al Khail Avenue, the latest project in the company’s growing retail portfolio. Located at Nakheel’s Jumeirah Village Triangle community, alongside Dubai’s Al Khail Road, the mall will have 350 shops including a supermarket, department stores and speciality outlets, a multiscreen cinema, entertainment zone and a diverse range of cafes and restaurants including al fresco dining. Al Khail Avenue, first announced during design stage in August 2014, will be a new destination for visitors and residents across Dubai, and a convenient, on-the-doorstep shopping and leisure hub for the tens of thousands of people living at Jumeirah Village, Jumeirah Park and other nearby areas. Nakheel expects to issue a construction tender in Q1 2015, with project completion anticipated in 2018. Al Khail Avenue will feature a modern geometric design and a central glass atrium letting in plenty of natural light. The mall’s diverse range of shops will be complemented by a wide selection of dining options, including a number of outdoor restaurants on a first floor promenade. There will also be a fivelevel car park for more than 4,400 vehicles. g

SPF Realty selling Meydan’s first freehold villa project

eydan Dubai, one of the largest and most luxurious integrated racing, business and lifestyle hubs in the world, will witness development of Millennium Square, the first-of-its-kind semi-detached freehold luxury villa project in the city. The project, to be developed by G&Co at an estimated value of Dh3 billion, is exclusively sold by SPF Realty. Prices for these offplan freehold villas start from Dh4,348,750 on a 30/70 payment plan that allows the buyer to pay 30% in the first 12 months (10% upon booking, 10% in the sixth month and 10% in the 12th month); and 70% at the time of receiving the completed property. The project will be handed over in Q4 2017.

Investors of any nationality, irrespective of their residency status, can buy the Millennium Square freehold property. The property purchased by an expatriate will be put in her/his name for life, which allows the buyer to register the property in the Dubai Land Department. The owner will then have full rights to the property, including the right to sell, lease or rent it at his/her own discretion. This property can also be inherited, in line with Dubai Government laws. The Millennium Square project in Meydan Dubai offers ultra-luxurious, semidetached villas with the finest of exclusive suburban living and convenience of nearby urban destinations including Dubai International Financial Centre, Downtown Dubai and a di-

rect link to Sheikh Zayed Road. The semi-detached villas consist of pairs of houses built side by side sharing a party wall and in such a way that each house’s layout is a mirror image of its own. Commenting on the project, Kalpesh Sampat, Director of SPF Realty said, “The project offers the most competitive pricing for the customers in the Meydan Community, starting at Dh 1,250 per square feet., which is almost 30 to 40% less than the pricing of other projects in the same location. The success of G&Co projects, marketed exclusively by SPF Realty, reflects the increasing demand for housing properties in Dubai as more investors from different parts of the world are coming to this market.” g Gulf Property

REALTYBYTES

DP delivers villas in Dubailand

eading real estate developer Dubai Properties (DP), expands its project portfolio offering and delivering additional ready-to-move family homes in its community The Villa in DUBAILAND. Additional limited units are now available in the ‘Valencia’ and ‘Mallorca’ types of villas, comprising five and six bedroom Spanish-style courtyard villas. The units are completed and ready for handover by the end of January 2015. The Villa caters to families in the UAE looking for a peaceful yet convenient life away from Dubai’s busy city life and already hosts a wide range of facilities for both parents and children to indulge in as they would in a modern, metropolitan city. These include a mosque, a

fully equipped nursery, play areas for children and tennis courts. Adding further value to The Villa’s family lifestyle offering, a new GEMS Firstpoint School has opened earlier this year providing residents with the best schooling options for their children while plans for a community centre are currently progressing. Mohammed Al Habbai, Chief Officer for Urban Planning and Infrastructure at D PG, said, “The Villa has established itself as one of the more attractive and popular investment options for both investors and families delivering ready to move spacious units in a popular community with ample facilities. Our ongoing investment in this sector will continue to support the provision of homes for the increasing

population of Dubai while meeting the needs of the market and we look forward to seeing The Villa community continue to grow and become home to more families in the Emirate.” DP has successfully deliv-

ered some of Dubai’s most popular residential and mixed-use developments including JBR and Layan in DUBAILAND, as well as The Executive Towers, Vision Tower and Bay Square projects in Business Bay.. g

Holding Enterprise has launched Omega Real Estate, a company specialised in real estate development, asset management and related services in the Middle East. Unveiling the new company Hafeez Abdullah, Chairman of the H Holding Enterprise, said Omega Real Estate is targeting to establish a real estate portfolio of Dh500 million by end of 2015. He commented, “We strongly believe that real estate will remain the

hottest investment in the UAE for the coming decade, and that is why we decided to invest in this new venture. We foresee increased regional demand for UAE realty as the understanding and knowledge attained over years by investors go hand in hand with the expertise of the real estate developers and the regulatory measures of the Dubai Land Department.” Announcing the appointment of Nahid Dabirchian as General Manager of Omega, Abdullah said: “We welcome Nahid on board and we believe that her strong back-

ground as a senior professional at leading UAE real estate companies will be a key factor in helping us achieve our goal of becoming one of the leading real estate companies in the Arab world and beyond, driven by the proven expertise of The H Holding Enterprise. Dabirchian commented: “I am very pleased to head Omega Real Estate in the Middle East. I believe there is huge potential for the company to take a front seat in the property industry in the region. We have tremendous experience from the top of the pyramid represented by

the experience of our chairman, Hafeez Abdullah, to the bottom. This combined expertise and experience will certainly drive the company forward at a rapid pace.” She added: “2014 was a positive year for the UAE market in general and Dubai in particular. The sector has generated higher demand for properties across many new locations. We know that our investors have strong belief in what the UAE has to offer in the coming decade as far as real estate is concerned.” g

H Holding Enterprise starts Omega Real Estate

Gulf Property

Chairman Khalaf Ahmad Al Habtoor cuts the ceremonial cake marked ‘45’ during the party. Seen behind him are members of a choir comprising 60 employees from various Al Habtoor Group divisions, who put up a musical performance as part of the celebration

REALTYBYTES

Al Habtoor Group celebrates 45 years with pomp and show

halaf Ahmad Al Habtoor, Chairman of Al Habtoor Group hosted around 600 guests at a glittering event to celebrate the organisation’s 45th anniversary on January 13. The grand party, which was also attended by journalists from Gulf Property, was organised at Al Habtoor City, the Group’s project, currently under construction, on Sheikh Zayed Road, Dubai. Speaking at the ceremony Khalaf Al Habtoor said, “Today we are marking Al Habtoor Group’s 45th anniversary - 45 years of ex-

cellence, of success, of strong partnerships. I started my company in 1970 with Al Habtoor Engineering. Little did I know then what I would achieve.” The Chairman also honoured 19 institutions, including the Dubai Municipality, Dubai Police, RTA, media houses, banks and automobile companies, that have supported the Al Habtoor Group over the years. He said, “Al Habtoor Group is growing with the UAE, and we are proud of it. We are a living proof to the potential that exists in my country.” g

Known to be a tennis enthusiast, Khalaf Ahmad Al Habtoor receives a gold-plated tennis racquet as a gift from famous UAE tennis commentator Khalid Al Ali, during the ceremony Gulf Property

Emaar and Nakheel record profits in 2014 NEWSUPDATE

eading UAE real estate developers Emaar and Nakheel recently declared their net profits for the full year 2014. While Emaar Malls, the shopping malls and retail business majority-owned by global property developer Emaar Properties, recorded a net profit of Dh1,351 million for 2014, an increase 23 per cent as compared to last year, Nakheel, on the other hand declared a net profit of Dh3.68 billion for 2014, an increase of 43 per cent against 2013. Continued investor trust, support from the Government of Dubai and a sustainable real estate market are some of the few reasons that led both the developers to gain impressive profits in FY2014, as mentioned in the financial disclosures for the year ended December 31, 2014, listed on the Dubai Financial Market (DFM). The details are given as follows:

Emaar Malls mark 23% growth in 2014

Emaar Malls (DFM: EMAARMALLS), the shopping malls and retail business majority-owned by global property developer Emaar Properties, has recorded a net profit of Dh1,351 million for the year 2014, 23 per cent higher than the net profit of Dh1.09

Gulf Property

billion during FY2013. Emaar Malls achieved a revenue of Dh2.708 billion in 2014, which is 13 per cent higher than the revenue of Dh2.395 billion in 2013. Revenue from The Dubai Mall accounted for about 82 per cent of the total at Dh2.225 billion, an increase of 12 per cent compared to FY2013. Tenant sales across Emaar Malls portfolio was over Dh18 billion in 2014, an increase of 14 per cent compared to 2013. The total tenant sales in The Dubai Mall was Dh16 billion in 2014, accounting for nearly 5 per cent of Dubai’s gross domestic product in 2013, and 14 per cent higher than the 2013 sales of Dh14 billion. Emaar Malls has a total gross leasable area (GLA) of about 6 million square feet and recorded a GLA occupancy rate of 95 per cent for FY2014. Mohamed Alabbar, Chairman of Emaar Malls and Emaar Properties, said, “The strong revenue growth recorded by Emaar Malls, highlights Dubai’s clear emergence as the world’s premier shopping and leisure destination. The positive growth reflects the successful strategy outlined by His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, to establish the city as a global hub and yearround destination for busi-

Revenue from The Dubai Mall accounted for about 82 per cent of the total at Dh2.225bn, an increase of 12 per cent compared to 2013

ness, tourism and fashion.” He added, “In addition to contributing about 5 per cent of Dubai’s GDP through retail sales at The Dubai Mall, our shopping mall assets created sustained positive economic impact by attracting international retail investments, creating thousands of new jobs and supporting the city’s hospitality and aviation sectors. We will continue to focus on delivering innovative retail

and leisure experiences to our visitors, adding consistent value to our existing shareholders.” Underlining the success of its IPO and listing with orders for its IPO of over Dh172 billion, Emaar Malls won the ICAEW Middle East Accountancy and Finance Excellence Award in the ‘Corporate Finance Deal of the Year’ category in 2014. Emaar Malls is currently

expanding The Dubai Mall’s Fashion Avenue, which brings the largest number of high-end international fashion brands under one roof, by one million square feet built up area to welcome a larger assortment of leading fashion brands. Emaar Malls’ properties include some of the most iconic malls, entertainment and community integrated retail centres in the Middle East, including The Dubai Mall, its flagship asset, which has been the most visited shopping and entertainment mall worldwide in each of the last four years. Emaar Malls also owns and manages Souk Al Bahar, an Arabesque style dining and entertainment development in Downtown Dubai, Dubai Marina Mall, a lifestyle shopping mall for residents and visitors of the Dubai Marina community and Gold & Diamond Park, a shopping destination dedicated to gold and jewellery.

Nakheel’s profits rise by 43% in 2014

Nakheel recorded a net profit of Dh3.68 billion for the year 2014, representing a 43 per cent increase from last year’s net profit of Dh2.57 billion. The strong financial performance in 2014, driven mostly by the continued delivery of residential units and plot sales, underpins investors’ trust and confidence in Nakheel and Dubai’s real estate sector, and is a testament to the support of the Government of Dubai, Nakheel’s Board of Directors and other stakeholders, the company said. Nakheel handed over 1,117 units to customers in

NEWSUPDATE

2014, including 132 homes at Palma Residences and Palm Views on Palm Jumeirah, the first new projects to be launched by Nakheel post-restructuring. Other handovers took place at Al Furjan, International City, Jumeirah Village, Jumeirah Park and Jumeirah Heights. Nakheel has now delivered 8,837 units to customers since its restructuring began in 2010. Nakheel Chairman Ali Rashid Lootah said, “2014 was our biggest year yet in terms of financial performance and achievements. Not only did we clear all Dh7.9 billion of our outstanding bank debt four years ahead of time, we also completed and delivered our first new project – Palma Residences – since restructuring.” Lootah went on to say, “Our results for 2014 are further evidence of the ongoing support from the Government of Dubai and Nakheel’s Board of Directors to implement a sustainable and realistic long-term business strategy. They also highlight continued growth in investor trust in Nakheel and Dubai’s real estate market.” Interest in Nakheel’s expanding number of retail projects increased in 2014, with almost 7,000 units at

Deira Islands Night Souk and Warsan Souk pre-leased within a week of their launch. There was also a large appetite for space at Nakheel Mall and The Pointe at Palm Jumeirah and at various other retail projects launched by Nakheel last year. Lootah added, “We are looking to maintain the same pace, at least, of growth in 2015 as we saw last year. We will continue to build on the success of 2014 by releasing more units for lease, both on the residential and retail side. Our aim is to reach Dh7.5 billion in recurrent rental income, via a portfolio of 10 million square feet of retail space and 30,000 residential units, within around three years.” Nakheel expects to award around Dh7 billion worth of construction contracts in 2015. Projects include Deira Islands Mall, The Circle Mall and Al Khail Avenue at Jumeirah Village, The Palm Tower, Ibn Battuta expansion and several other residential, retail projects and hospitality projects across Dubai. Nakheel has already launched 1.5 million square feet of shopping, dining and entertainment space at Al Khail Avenue, the latest project in the company’s growing

“2014 was our biggest year yet in terms of financial performance and achievements. Not only did we clear all Dh7.9 billion of our outstanding bank debt four years ahead of time, we also completed and delivered our first new project – Palma Residences – since restructuring”

– Ali Rashid Lootah, Chairman, Nakheel

retail portfolio, from January 18, 2015. Nakheel's current portfolio of developments in Dubai include some of the major names like Palm Jumeirah, The World, Deira Islands, Jumeirah Islands, Jumeirah Village, Jumeirah Park, Jumeirah Heights, The Gardens, Discovery Gardens, Al Furjan, Warsan Village, International City and 1,000 villas at Nad Al Sheba. Together these developments span over more than 14,000 hectares and provide homes for over 200,000 people in Dubai. g Gulf Property

Rents remain stable in Dubai

REALTYCHECK

Despite the falling rent caps, tenants are still burdened with high rents at the time of renewal of contracts. However, residents hoped rental rates in the new year would come down now with the market slowing down off late. Gulf Property offers a rental snapshot of Dubai that could help them know their correct rent, as opposed to the prevalent market rates.... JUMEIRAH BEACH RES

DUBAI MARINA

Studio Dh90,000 1BR Apt Dh140,000 2BR Apt Dh200,000

JUMEIRAH VILLAGE GREEN COMMUNITY

3BR Villa Dh230,000 4BR Villa Dh250,000 5BR Villa Dh260,000

Average Apartment Rental Rates in Dubai Neighbourhood

Deira Discovery Grdns Downtown Dubai Dubai Marina International City JBR JLT Jumeirah Village Palm Jumeirah Sk Zayed Road

Studio Min Max

38 45 75 70 33 75 60 45 ---75

* Rates are in Dh’000 per annum * % change

Gulf Property

55 52 90 85 38 90 75 55 ---85

Min

55 60 100 90 44 90 80 60 130 100

1 BR

Max

80 72 130 120 48 140 100 80 160 120

Min

80 80 150 135 62 125 120 90 160 125

2 BR

Max

110 90 190 185 68 200 150 120 230 170

Studio Dh85,000 1BR Apt Dh120,000 2BR Apt Dh185,000

JUMEIRAH VILLAGE

Studio Dh55,000 1BR Apt Dh80,000 2BR Apt Dh120,000

3BR Villa Dh180,000 4BR Villa Dh210,000

DISCOVERY GARDENS

FURJAN

Studio Dh52,000 1BR Apt Dh72,000 2BR Apt Dh90,000

3BR Villa Dh200,000 4BR Villa Dh220,000 5BR Villa Dh260,000

Min

100 n/a 210 150 n/a 160 150 115 230 160

3 BR

Max

150 n/a 290 270 n/a 240 190 150 290 220

Q2-Q3 2014

-1 -7 0 -2 -7 -1 0 -2 3 -1

Q3 2013 Q3 2014

35 23 25 36 40 34 42 28 21 21

Source: Asteco

REALTYCHECK

Average Villa Rental Rates in Dubai Neighbourhood

Al Furjan Arabian Ranches Victory Heights Green Comm. Jumeirah Jumeirah Islands Jumeirah Village Meadows Mirdif Palm Jumeirah Springs

2 BR Min Max

----150 ----------------135 ------------125

* Rates are in Dh’000 per annum * % change

----185 ----------------165 ------------135

Min

165 170 195 210 175 ----145 220 115 260 180

3 BR

Max

200 260 200 230 230 ----180 260 155 380 205

Min

190 270 200 230 220 300 160 250 135 400 -----

4 BR

Max

220 350 280 250 330 360 210 300 180 525 -----

Min

240 280 260 230 270 330 ----270 160 500 -----

5 BR

Max

260 420 360 260 450 410 ----350 200 950 -----

Q2-Q3 2014

0 -5 1 -3 -3 0 -4 1 -5 -3 -8

Q3 2013 Q3 2014

7 13 4 -1 35 4 12 5 12 9 14

Source: Asteco

PALM JUMEIRAH

3BR Villa Dh380,000 4BR Villa Dh525,000 5BR Villa Dh950,000

JUMEIRAH LAKE TOWERS Studio Dh75,000 1BR Apt Dh100,000 2BR Apt Dh150,000

MEADOWS

JUMEIRAH

3BR Villa Dh230,000 4BR Villa Dh330,000 5BR Villa Dh450,000

SHEIKH ZAYED ROAD Studio Dh85,000 1BR Apt Dh120,000 2BR Apt Dh170,000

DOWNTOWN DUBAI

Studio Dh90,000 1BR Apt Dh130,000 2BR Apt Dh190,000

DEIRA

Studio Dh55,000 1BR Apt Dh80,000 2BR Apt Dh110,000

3BR Villa Dh260,000 4BR Villa Dh300,000 5BR Villa Dh350,000

VICTORY HEIGHTS

3BR Villa Dh200,000 4BR Villa Dh280,000 5BR Villa Dh360,000

MIRDIF

3BR Villa Dh155,000 4BR Villa Dh180,000 5BR Villa Dh200,000

ARABIAN RANCHES

3BR Villa Dh260,000 4BR Villa Dh350,000 5BR Villa Dh420,000

INTERNATIONAL CITY Studio Dh38,000 1BR Apt Dh48,000 2BR Apt Dh68,000

SOURCES: Asteco, Cluttons, Jones Lang LaSalle and Reidin

Gulf Property

UAE mortgage market: Competition heats up SPECIALFEATURE

Gulf Property Exclusive

he real estate market in Dubai has been slowing down since the past few months. Sales volumes have gone down, while rentals are on the rise. Although certain

Gulf Property

locations in Dubai have witnessed healthy demand for residential units, the market overall has remained calm since the start of 2015. Some experts have cheered this trend as a sign of the marketâ&#x20AC;&#x2122;s maturity and opined that periodic corrections are only welcome as they prevent the market from overheating. Yet there are others who are concerned

about the supply for residential units, especially in the high-end areas of Dubai, outstripping demand. They seem equally concerned by the unchecked growth of rental rates across Dubai, which have forced people to migrate to other emirates. The real estate marketâ&#x20AC;&#x2122;s behaviour has a direct impact on the mortgage market, with banks keenly

watching the sectorâ&#x20AC;&#x2122;s trends. In such a tight scenario, when transactions have gone down and people are borrowing less, banks who have simple yet attractive loan schemes are the ones who will stand to gain. Not just banks, but also NBFCs, whose core business is to profit from lending money, will have to come out with convenient schemes.

For understanding how the mortgage market reacts to variations in the real estate sector, it is interesting to know what the scenario is in the two crucial property markets of the UAE: Abu Dhabi and Dubai.

Demand rises in Abu Dhabi

The latest quarterly report issued by the real estate consultancy arm of Abu Dhabi Islamic Bank (ADIB) MPM Properties highlights value growth across all sectors of Abu Dhabi’s real estate market during 2014. Government initiatives to stimulate job growth and enhance market sentiment, fuelled in part by a knock on effect from Dubai’s Expo 2020 win, provided healthy demand across all asset classes. During the year the Abu Dhabi residential sector saw the launch of the first off-plan projects for over 6 years, with major property developer Aldar launching three projects (Hadeel, Ansam & Nareel) totalling approximately Dh5 billion, and comprising over 900 units. Tourism Development and Investment Company (TDIC) launched its first residential development within the Cultural District (Mamsha Al Saadiyat) comprising 461

units. All projects generated significant demand with all inventory released being sold, and the expectation of new projects being launched during 2015. Residential apartment values within the designated Investment Areas demonstrated strong capital appreciation during 2014. MPM Properties research

tions due to the widening gap between asking and offer prices, with sale prices showing no increases in the last 3 to 4 months. Data analysed by MPM shows that sales volumes during November and December of 2014 were at a 20 month low, impacted by the lower Loan-to-Value (LTV) ratio introduced by the UAE Central Bank, to check t h e

shows capital value growth ranging from 11% to 35% with an overall average increase of 21.6%. Villa values also experienced strong growth ranging from 5% to 30%, with an overall average increase of 15%. In Q4 2014 the residential sales market witnessed a marked slowdown in transac-

mortgage market. The Abu Dhabi market continues to be dominated by individual investors, with sale prices increasing faster than rents, eroding yields which have dampened investor demand. This trend will continue until sellers agree on lower prices or rents rise to help investors achieve net

SPECIALFEATURE

yields within a range of 5.5% to 6%. Meanwhile the residential leasing market saw significant activity during the course of 2014 following the removal of the rent cap in November 2013. Despite concerns of potentially huge rental increases, MPM data shows that the market is selfregulating with normal market forces of supply and demand allowing rental rates to be negotiated and fixed. This is healthy for the longterm growth of the sector. In terms of the ADIB Rental Index, an increase of between 0% to 5% continued to be the common trend in Q4 2014. During the fourth quarter Zones A, B and C witnessed average r e n t a l growth of 7.5% to 10% as residential units with water views or access to facilities and amenities within these zones were in high demand . “The current market is effectively a three-tier market,” said Paul Maisfield, MPM chief executive. “The mid-tier properties, which takes up most of our portfolio, are seeing a stability in rents with an average 5% increase, reflecting the fact there is a ready supply of such properties and thus landlords are mindful not to push rents too high and risk occupancy levels falling.” “At the top end of the residential market there is a shortage in supply, and occupancy levels are high within Gulf Property

SPECIALFEATURE

the most popular developments and communities, and with the limited choice tenants now have rental increases of 15 to 20 % are common at lease renewal,” Maisfield stated. “At the bottom end of the market with the older properties there is also a shortage of supply which is pushing up rents and in percentage terms these have been hit the hardest” he added. The key new projects launched during Q4 2014 were Yas Mall (retail), Burj Mohammed Bin Rashid Tower (residential) and Courtyard by Marriott hotel (hospitality). In 2015 multiple other residential and commercial projects are e x -

pected to be completed on Al Reem Island, Corniche, Danet Abu Dhabi and Capital Center. MPM Properties expects the real estate market to continue to grow steadily during 2015 with anticipation that the market will witness the introduction of new real estate regulations. The launch of the Abu Dhabi Global Market Financial Free-zone; The Louvre Museum and the ongoing infrastructure developments will help fuel demand for the residential and office sectors and support continued growth across the retail and hospitality sectors.

Housing rents surge in Dubai

The residential segment has

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experienced a period of relative stability during H2 2014, with rental rates remaining broadly flat. Over the course of the year, modest growth of around 7% was recorded, compared with 24% during 2013, according to global property consulting firm CBRE’s year-end market update. Over 20,000 new units are expected to enter the market during the course of the next 12 months which could have a deflationary impact on sales and rental

rates. “Over the past 12 months the sales segment has comprehensively outperformed the rental market, recording an 18% growth year-on-year as compared to 30% in 2013. This disconnect is highlighted as a potential area of concern for the market, with mounting pressures on rental yields as a result. However, despite the slowdown, the market continues to see

strong occupier and investment demand for well located, good quality residential apartment buildings, a fact backed up by recent transaction numbers in the established community locations,” said Matthew Green, Head of Research and

Consultancy UAE, CBRE Middle East. “Over the course of the year, the residential market has progressively slowed with transaction volumes well down on 2013 performance. Whilst values have grown steadily during the period, the growth is just a fraction of the 30% growth achieved last year. A similar story has also been evident in the residential leasing market, wherein rentals suffered a first quarterly decline since the last downturn in 2008,” Green stated. Despite a rise in new stock and high vacancy ratios, of-

fice lease rates have surged across the prime and secondary locations. Solid economic growth and improved business confidence has paved the way for the entry of new SMEs, while existing firms are solidifying by way of expansion/consolidation, culminating in a strengthening of lease rates. Single held quality office assets across prime and secondary areas have benefitted the most, recording rising lease and occupancy rates. “Overall, we expect the scheduled pipeline of offices to help constrain rental inflation and add more balance to the market in the c o m i n g quarters. As of end of 2014, the total office stock stands at close to 8.1 million square metres rising from 7.7 million square metres as of the end of 2013. This reflects an addition of 0.4 million square metres and an increase of 6% year on year,” Green elaborates. According to the CBRE annual market update, the retail sector remained buoyant during the year, with major retail centres recording occupancy rates of over 95% and with strengthening lease rates. “Whist all sectors have performed well, perhaps two of the most promising have been the retail and hospitality sectors which have seen rising demand amidst increasing visitors to the emirate,” further added Green.

SPECIALFEATURE

A positive economic outlook and an increase in tourist numbers, combined with a rise in per capita income and changing consumer behaviour are currently acting as a growth catalyst for the sector. Dubai remains the principal regional draw as an established ‘retail tourism market’ which is further reflected by the continuous rise in new brands and in footfall figures reported by the malls. “Total retail stock in Dubai has now reached nearly 2.3 million square metres, rising 3.0% from the same period last year. Recent growth has been a result of a number of factors, including rising visitor numbers, an increasing population, and a strong brand affiliation. This has been underpinned by the development of mega sized destination malls, which are

anchored with large-scale leisure attractions, with entertainment forming an increasingly important part of the retail mix,” commented Green. Rising tourist numbers along with planned festive activities should see another strong year for the retail sector. However, with no new major retail space expected to enter in 2015, the quandary of retailers is likely to continue. With strong fundamentals, the sector is expected to see further growth with addition of new retail brands waiting to enter the market. By the end of 2017, over 27,000 new hotel keys and hotel apartments could be delivered, adding capacity for close to 10.0 million room nights a year to Dubai’s annual room inventory. Whilst 2015 is set to see

significant new supply with over 5,500 new hotel keys, 2016 and 2017 are the real growth years with close to 15,000 new hotel keys in these two years alone. Over the next 12 months there will also be 1,500 new hotels keys delivered in the Dubai Marina, Jumeirah Beach Residences (JBR), Jumeirah Beach and Palm Jumeirah sub-markets, although the main focus of supply in the short term is very much business focused. Commenting on the outlook for the market, Green concluded, “With a solid economic outlook, Dubai’s position as the headquarter city of choice for global corporates in the Middle Eastern region looks set to continue. However, with limited good quality and efficient office properties available in the market, it is likely that this

segment of the market could see a growing demand and supply imbalance in the coming quarters.” Depending upon how the Abu Dhabi and Dubai property markets perform in 2015, the mortgage market in the UAE will transform accordingly. While in Abu Dhabi where high demand for housing will make it easier for banks and NBFCs to conduct their mortgage business, a slump in residential transactions in Dubai would only intensify competition among loan-providers. Gulf Property asked few industry experts for their opinion on various aspects of the mortgage market, such as the market’s present state, government regulations, competition between banks and NBFCs, and future performance. Here’s what they had to say: Gulf Property

SPECIALFEATURE

What is your opinion about the mortgage market in the UAE? How do you find the mortgage sector performing presently?

“The mortgage market of the UAE has witnessed significant development over time as many banks are coming up with some attractive Upendra Balchandani, offerings. Head of Product Development & The Central Marketing, Personal Banking Group, Commercial Bank of Dubai Bank’s regulations have helped in ensuring that buyers put in the required equity which results in a healthy book build-up. To add to this, the low interest rate environment has made many end-users consider the option of offsetting rising rents with mortgage instalments.”

Dona Spencer and Chris Allen, Complete Finance

“The mortgage cap has impacted the industry and has resulted in property prices softening, which was the desired result due to speculation following the announcement of Expo 2020. The market has matured since the crash and is now putting necessary steps in place to become a sustainable market.”

Gulf Property

Victoria Garrett, Associate Partner, Residential Sales, Knight Frank

Cooling measures were brought in at the end of 2013 with the doubling of transfer fees from 2-4 per cent and the mortgage caps which have meant for expat buyers that they need a 25 per cent deposit if they are buying below Dh5 million or a 35% deposit if they are looking to buy above Dh5 million and a 40% deposit for second properties. For Emirates they need 20% deposit below Dh5 million and a 30% deposit for properties worth over Dh5 million and for second properties a 30% deposit. This understandably had an effect on the property market and mortgages with Q4 of 2014 seeing a price drop of 5.2% across the board. So with the market cooling and the volumes of transactions falling we are seeing lenders trying to entice customers with low rates. However there is talk of rates, which have been relatively low currently around the 4% mark since the global property crash over five years ago, potentially starting to move up but this remains to be seen so far. With the introduction of the Credit Bureau we could start to see banks tightening lending further on who they will lend to.”

SPECIALFEATURE

Do you think there is enough legislation in place to control the UAE mortgage market? How tightly does the government and central bank regulate activities in the mortgage sector?

As we know, during the boom we saw in the UAE real estate market from 2003-08, there were hardly any legislations and regulations in place to control the mortgage market, which led to misuse of mortgage facilities from banks by speculators and flippers. During that period, banks witnessed significant write-offs of mortgage loans in their balance sheets. However having learnt its Mayank Sawhney, Former lessons from these mistakes, the banking Director, Transaction sector in the UAE is operating in a highly Advisory Services - MENA, regulated mortgage finance environment Ernst & Young post-October 2008. A testimony to this is the fact that the UAE Central Bank towards the end of 2013 has increased the equity contribution limits significantly for end-users looking to obtain mortgage finance. Therefore, in my view, the UAE Government and Central Bank are taking the right steps to make the mortgage market regulated. But there is still a long way to go before we see the mortgage market in the UAE being strongly regulated, as it is in most of the developed economies of the world. “The regulations are actually one of the most stringent in this region. The Central Bank carries continuous audits of underwriting departments to ensure they are following the rules. The lending policy places quite a few limitations on lending and type of customers to lend to. Even though banks are sitting on a lot of liquidity, they are finding it challenging to Sam Wani, General lend to all applicants. This is the main reason Manager, Independent behind the correction. The positive impact of Finance this policy has been a low-risk mortgage book for clients. Since the risk-premium has fallen, the cost of funds has fallen as well. This is why the lenders have been able to offer such lowrate mortgages.”

Victoria Garrett

“The government took the right steps to control the market with the Central Bank’s mortgage caps being put into place at the end of 2013. The crash in 2008 was partly due to investors flipping properties. But now with the mortgage caps and transfer fees being doubled, it has made it far less attractive for investors to be able to do this. These caps not only encourage responsible borrowing but also responsible lending.” Gulf Property

SPECIALFEATURE

What is your take about the competition between banks and NBFCs in the market? From a buyer’s perspective, which is more profitable: Taking a home loan from a bank or an NBFC? “Conventional Banks and NBFC's have a stringent competition, amongst them in the field of mortgage finance, like they have in other areas of finance. Both banks and NBFC’s have their own pros and cons when it comes to providing mortgage finance. Conventional banks have a very stringent criteria and pre-approval processes, which have to be followed for getting a mortgage finance approval. This can Mayank Sawhney be a very lengthy and time consuming process. On the other hand, most of the NBFCs provide a very quick, easy and flexible mortgage approval process. However, in terms of borrowing costs, NBFC's generally are more expensive than conventional banks, for consumers availing mortgage finance. Therefore, a buyer should thoroughly weigh these pros and cons of both, before deciding on what works in his/her interests, given one’s own individual set of preferences. For some borrowers, conventional banks may fit the bill, whereas for others NBFC's may be more suitable.”

Upendra Balchandani

“As a buyer, he or she is more interested in the proposition and service. It’s all about getting the best deal in the most transparent way with ease of application.” 30

Gulf Property

“In the current real estate market, the NBFCs are very niche and unique lenders who lend to people, mostly either entrepreneurs or SMEs, and people who are struggling to get loans from normal routes. They are not Richard Paul, really preferred for Head of Residential major property loans, Valuations, Cluttons since majority of the people do not prefer borrowing from NBFCs. I wouldn’t really put them in the bank category.”

Sam Wani

“Both have their advantages and disadvantages. NBFCs are lean and more efficient. The long-term service levels from NBFCs would be better. They will provide products that a highstreet bank may not be able to provide. However banks provide the scale and scope of product diversification. You could have your mortgage, car loan, credit card and a current account being managed from a single relationship.”

SPECIALFEATURE

Residential sales have been going down in Dubai, with many predicting that the market will slump in 2015. How do you see such a trend affecting the mortgage market’s performance?

“Q4 2014 saw a drop of 5.2 per cent across the board with property prices in Dubai and we are predicting at least a 10 per cent drop in the market, which are properties with Dh10 million plus and potentially even greater downward pressure in the mainstream market, with 25,000 new units due to come online this year. This drop in prices is not a surprise given the cooling measures that were brought in the end of 2013 to have this effect on the market, after Dubai global record growth in 2013 of 35 per cent in some Victoria Garrett areas. If the market continued on this trajectory it would not have been sustainable. Given the drop in volumes of transaction due to it being harder to be able to buy, there will as a result be a slowdown in mortgages being taken out in the current climate. If the lending criteria stays the same and prices don’t fall too far, I don’t see this situation changing, in fact if interest rates do potentially increase it will only slow things down further.”

Sam Wani

“With more budget property and low rate mortgages, endusers end up reducing their housing cost to a large degree. We expect this segment to grow in coming months and years.”

“With oil prices declining to significantly low levels, it is very likely that this slowdown in the Dubai property market, we have been seeing for the past few months, is going to persist over Mayank Sawhney the short term. Adding to this is the fact that the UAE property market is a highly sentiment driven market and till the time we see return of the positive and buoyant sentiment amongst end-users, it is quite likely that the mortgage market's performance is also going to remain quite sluggish.”

Richard Paul

“If a market is softening, then there will be less demand for property. There will be hardly any new mortgages. Banks can still do better if they stick to their customer service. But ultimately yes, if you have a softening market with less transactions, there will be less mortgages. That said, 2015 and next year, we are going to see a plateau in prices and in the softening, prices will come back. The lenders will benefit from there on.” Gulf Property

SPECIALFEATURE

Danube takes market in Dubai by storm with unique payment plan s challenges in the mortgage market mount with falling volumes of residential sales in Dubai, it is not just banks and NBFCs who are facing the heat and competing against each other. Realising that people are buying less today, Dubaibased real estate developer Danube Properties has introduced a probably unprecedented instalment payment plan for their second project named ‘Glitz’, which almost removes the buyer’s need to avail a bank home loan. Across the length and breadth of Dubai, one is sure to find large ad hoardings of ‘Glitz by Danube’ screaming ‘Pay 1% every month’ and own your apartment. Astonishing isn’t it! Rizwan Sajan, Founder and Chairman of Danube Group, explains this unique payment scheme: “Making this sale more attractive is the payment plan being offered by Danube to long-term investors and endusers, which requires the

buyer to pay 10% down payment followed by 15% in 60 days. The balance amount is to be paid in 75 equal monthly instalments of only 1% each.” The Dh300 million worth project is being constructed at the prime location of Dubai Studio City, close to the proposed Village Centre. The cluster of buildings comprises 300 luxury apartment units available in a mix of studio, 1, 2 and 3 bedroom apartments. The spacious homes range in housing areas from 470 to 1,645 square feet in each apartment block of eight levels. Danube has promised to deliver ‘Glitz’ within the next 30 months or by mid-2017. Danube’s maiden project ‘Dreamz’, with 171 luxury townhouses, was sold out on the first day of the sales launch. ‘Glitz’ received far better response, with Danube claiming that all units were sold out within the first two hours of the sales launch. The sales meet saw

Investors and brokers thronged the Baniyas Ballroom of Grand Hyatt Hotel in Dubai for the sales launch of ‘Glitz’ on January 9

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Legendary Indian cricketer and Danube’s brand ambassador Sunil Gavaskar (centre) with Rizwan Sajan, Founder and Chairman of Danube Group (second from left) and other senior executives at the launch of ‘Glitz’ in Dubai on December 23, 2014

an overwhelming number of buyers, investors and brokers purchasing apartments that were offered on a firstcome-first-serve basis. “We are very pleased with today’s response to our second project and it has further cemented our reputation as a developer of people’s choice. Danube Properties was launched to make available luxury homes at affordable prices in the market and we have successfully managed to do so with both our projects. Our overall product offering creates a great opportunity for both end-users

and investors who could reap good dividends within a few months as we prepare to construct the project,” Sajan said at the sales launch. Thanks to an attractive payment scheme and an aggressive advertisement campaign on TV, radio and hoardings across the emirate, Danube has achieved quick success with ‘Glitz’. Danube has also proved how a developer can gain from offering a tempting instalment plan, that makes it convenient for buyers to pay directly, rather than making them take a bank loan. Talking about his selling strategy, Sajan said, “Everybody has their own way of selling properties. I am not stealing away any competition from anyone. Our target audience has always been the mid-income segment, we will always continue to target that. Everybody will have their share, there are lot of developments happening. We try to make something unique that will make us successful in the long-run.” People have had mixed opinions about the payment structure. Read what experts say are the pros and cons of the plan and how it will impact the mortgage market:

SPECIALFEATURE

Don’t you think such a pricing structure by Danube diminishes the banks’ role in the mortgage market? If other developers follow suit wouldn’t banks and NBFCs face stiff competition? “It is absolutely right that if a developer offers payment plan such as the one offered by Danube for their ‘Glitz’ project, it significantly reduces the buyer's need to avail home loan from a bank. Although, the kind of payment plan that Danube has offered may be new to the UAE, but real estate developers in other parts of the world have quite often launched such Mayank Sawhney aggressive payment plans to make their projects attractive to the consumers. The overall real estate market in any part of the world needs the strong life support of the mortgage finance provided by banks. Therefore, given the fact that it is not practical for all developers to be able to provide such long payment plans for all their projects, I am of the view that the developer's payment plans and the bank's mortgage finance are bound to co-exist and flourish together in any growing real estate market. It should also be remembered that the developer offered payment plans which at the most extend for 5 to 6 years, and will still not be able to replace the mortgage finance needs of a consumer who is looking for a 15 to 20 years loan tenure, which generally only banks can provide.”

“Not at all. If you actually analyse the payment plan that Danube is offering, the buyer still has to come up with 25 per cent deposit. There are other projects in Dubai offering similar sort of payment plans. If we use Danube as an example and you are buying a unit for a million dirhams, first you pay the 25 per cent initial and then you have to pay another Dh750,000 over 75 months, which shows that you will be paying Dh120,000 in a year for a 1BHK. It is a Richard Paul hefty amount; it is definitely attractive but it doesn’t make it easy to pay for everybody. Lot of people would still go down the traditional lending route.Buying off-plan is slightly risky; ultimately the property is not ready yet.”

Sam Wani

“Developers being innovative will help more end-users to own rather than to opt for rental. Some clients however may prefer to buy a completed property than opt for an offplan. A 3BR off-plan costing Dh1.6mn would require a wait of 2 to 3 years before the property is handed over. Rent incurred meanwhile should be added to the property’s cost. They will also add the opportunity-cost payments made to the developer while the property is under construction.” Gulf Property

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Gulf Property Exclusive hen a boat sinks, its passengers try to grab onto the last piece of wood to survive. When a tiger attacks a village for his ‘meal of the day’ – each villager tries to outrun the other in his ‘run for life’. If only he could outrun one person, then he would have a chance to live – because the tiger would need just one villager for that day.

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Mohanad Alwadiya:

The Godfather of real estate strikes back None of them have the luxury to think of others’ welfare. Where survival of the fittest is the name of the game, one would hardly have the time, resource or inclination to think of others’ welfare. However, there are exceptions to the rule. Mohanad Alwadiya, Managing Director of Harbor Real Estate, is perhaps one rare exception who did exactly that. When the global financial crisis hit the UAE’s real estate and construction sectors in 2008-09, the scenario was somewhat close to that

of the ‘survival of the fittest’ in its worst form. Surviving a day was an achievement. However, some people and companies survived the crisis that continued for four years – from October 2008 till September 2012. It was a hell of an achievement. Mohanad is one of them. He is not only a survivor, but he survived the crisis in style — by helping his clients in dire straits. “Our approach has always been ‘what more could I

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“Instead of seeing this apparent slackening in the market as a negative economic indicator, I see it as an excellent sign of the Dubai property market’s continuing maturation and stabilisation.”

– Mohanad Alwadiya Managing Director, Harbor Real Estate

Mohanad Alwadiya, Managing Director of Harbor Real Estate – the man who is helping reshape the industry

do for you’ – as opposed to – ‘what could you do for me’,” Mohanad Alwadiya, Managing Director of Harbor Real Estate, tells Gulf Property in an exclusive interview. “This has been the key of our success – by extending a helping hand to clients.” This attitude has led Harbor Real Estate reach new heights and gain mar-

ket trust. So, it helped the company not only expand its scope of operations and offer end-to-end property and asset management solutions, but also helped pioneer the business and gain new clients. “It was a learning curve and we learned the hard way. But we remained focused and honest to our clients and so clients stayed with us. In fact, our reputation helped generate more leads through our clientele and others came to us to serve them,” Mohanad says. “Today, we do Gulf Property

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Mohanad Alwadiya in action

not have to chase clients. They find us.” He is one man who constantly finds ways to maximise the wealth of their institutional clients – in the thick and thin and even during the height of financial crisis. Mohannad stormed to fame by turning around Harbor’s then-flagging fortunes by shifting their business from a mere real estate brokerage firm to a complete end-to-end property and asset management solutions provider at the height of the financial crisis in 2008-09 – when clients wanted to ‘get

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more for less’ for their properties. Today Harbor Real Estate has more than 6,000 units valued at more than Dh14.8 billion worth of real assets under management, providing all types of facilities and asset management services for institutional clients. Mohanad has acquired the industry intelligence by dint of his knowledge, experience, wisdom, vision and his insights. There is one more thing about Mohanad that makes him stand out. Unlike many business leaders who do not

want to share their ‘trade secrets’ or the keys to their success, Mohanad is very happy and very vocal to share his industry knowledge, insights and intelligence — to improve the business practices and upgrade the business environment, especially in the real estate sector. Mohanad has been called ‘Mr Fix-It’ or ‘The Oracle of Real Estate’ and other similar titles, but his achievements and influence in shaping up the property management sector can only be summed under one title: ‘The Godfather of Asset

Management’. He is an industry thought leader, a trainer, an expert in real estate and asset management in his own right. Gulf Property spoke to Mohanad Alwadiya on wideranging issues related to real estate and the current market scenario including lower oil price and its impact on the sector – for our readers. Excerpts:

Gulf Property: How do you evaluate the decline in oil price and its impact on the real estate market? Mohanad Alwadiya: It

Mohanad Alwadiya

he scope of Mohanad’s professional experience is both far-reaching and varied. Aside from being a member of the Advisory Board of the Department of Communication in the American University in Dubai (AUD), Mohanad has been a speaker of Citiscape Global and the SME Global Summit, acted as the moderator during the panel discussion regarding ‘Affordable Housing’ at the first ever MENARES conference held in Dubai, and a judge at the International Business Excellence Awards 2015. He has also been serving as an advisor and instructor at the Dubai Real Estate Institute (DREI) – the official training and certification arm of the Dubai Land Department (DLD). Prior to Harbor Real Estate, Mohanad was the Head of the Projects Research, Marketing and Sales Division for the global real

seems everyone is panicking with the news of oil price decline. As oil price increase has a mixed effects on oil exporters and importers, similarly oil price decline has mixed effects. Obviously oil exporters will lose revenue that is like a huge national savings for oil importing countries as they now shell out less than half for the same amount of oil. They will now have more disposable income that they could spend on development works. However, oil price decline is not a bad thing. It will actually help make the market

The Man

Designation: Managing Director, Harbor Real Estate and Instructor at the Dubai Real Estate Institute, the training and certification arm of the Dubai Land Department Nationality: Seychelles and Canada with Palestinian origins In Dubai: Since 1985 Education: BBA in Marketing and Communications and a Diploma in Construction Material Management Career: Prior to joining Harbor, Mohanad worked with several companies such as Leo Burnett and Dubai Holding in senior management positions Role in the Organisation: Leading the firm’s strategic growth and operational plans. g estate arm of Dubai Holding, and the most-awarded Communications Director at Leo Burnett – one of the top 5 multinational marketing services group of companies based in Chicago, Illinois, with offices throughout the Middle East, for over seven more mature. The market needs to run on non-oil macro-economic fundamentals. This will make the market more resilient and less dependent on oil prices and other external shocks. For the short term, I do not see major implications on the region’s real estate sector as most Gulf governments are cash-rich anyway, and they will continue to spend heavily on infrastructure and housing – that will continue to drive demand. Besides, a huge young population getting into employment would need new homes to raise families – so

years. As a notable industry influencer, Mohanad has been the recipient of a number of certificates and awards including: • A certificate of appreciation granted by Sultan Butti Bin Mejren, Director General of the Dubai Land Department (DLD) in March 2014 for Mohanad’s remarkable contributions in the category of ‘Distinguished Management Initiative’ in the Government Treasures of Excellence program for the year 2013-2014. • The ‘Best Performing Faculty Member in 2013’ award given to Mohanad in 2014 by the Dubai Real Estate Institute (DREI) – the official training and certification arm of the Dubai Land Department • A ‘Trophy of Appreciation’ in 2014 from The Real Estate Registration Department (RERD) of Sharjah for Mohanad’s support in setting up and teaching the Official Training and Certification Property Management course which is a new mandate for all property management firms in Sharjah. g the demand will continue to grow, thus, we would see increased development activities.

A lot of people have observed that 2014 ended slow, somehow ushering in an apparently sluggish start for 2015, but what are your own projections for this year? People are right in saying there has been a general slowdown in real estate activity during the close of 2014, and which has also continued well into this year. However, instead of seeing this apparent slackening in

FOCUS At A Glance Dh14.8 bn

worth assets currently under Harbor Real Estate’s management

6,000

residential and commercial units under management of Harbor Real Estate

4.5%

Dubai’s economic growth recorded in 2014

the market as a negative economic indicator, I see it as an excellent sign of the Dubai property market’s continuing maturation and stabilisation. My thoughts on 2015 are as follows: First… As the broader economy continues to grow, the market will continue to benefit from current demand. The Dubai economy has been doing quite well, and economic growth is strong at around 4.5 per cent, with independent bodies such as the International Monetary Fund (IMF) forecasting 5%+ economic growth every year through to the end of the decade. With oil representing only about 4 per cent of the GDP, the economy is being driven by non-oil economic fundamentals such as tourism and trade, and a slew of new projects to grow these important revenuegenerating economic segments. Second… Investing in real estate means you are investing in the economy, and the effect of the upcoming Expo Gulf Property

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Even in economic downturn, Mohanad Alwadiya, keeps looking up in hope

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Andalusia 3

09. This time banks are unable to lend much, although they have ample liquidity. They are finding it hard to convince end-users to apply for mortgage, even though the mortgage rates have come to the historic lowest level. Banks are competing against each other by lowering mortgage rates, which has come down to 2.99 per cent level. However, buyers are also equally cautious. No one wants to go back to the 2008-09 situation. 2020 on the UAE economy cannot be understated in terms of generating demand for real estate assets. Dubai hosting the World Expo will provide additional impetus for the industry to enjoy continued growth, and the predictable surge in demand for accommodation and commercial space of all types – from labour camps to offices to warehouses to apartments to executive villas – will certainly have a significant effect on real estate values. Third… Financing is more affordable than ever, but the low mortgage rates of today will probably not be available in 2 or 3 years’ time. The likelihood of interest rate rises in the United States will make financing UAE mortgages increasingly more costly due, primarily to the AED being pegged to the USD. So if one is to take advantage of the current mortgage scenario, there is no better time than now. Fourth… The industry itself is undergoing structural changes that will enable a greater degree of stability and better support, and will contribute ongoing economic growth. For example, reviews and recommendations

have been completed and provided to ensure that Dubai’s economic growth is not inhibited by a shortage in affordable housing. This demonstrates a desire to ensure that the industry is in a state of equilibrium, and can efficiently meet the demands of a burgeoning population that will be characterized by rapidly expanding lower to middle income segments. The opportunities in satisfying this growing need are immediate and significant. Fifth… Being mindful of the lessons learned from the recent past, there has been and continues to be an unprecedented level of governance, oversight and scrutiny that the industry is being subjected to. Ongoing developments in the industry’s regulatory framework and the implementation of laws and regulations to safeguard both consumer and investor interests, the overall industry and the economy at large from rampant and irresponsible speculative, predatory and unethical practices, reveal a mature and balanced approach to shaping an industry which will continue to exhibit sustainable growth over the long

term. The industry is much more resilient in 2015, and investor, not speculator, confidence has made a big comeback. Finally, if you are after superior yield with minimal capital outlay, Dubai real estate is still hard to beat. Affordable properties in developments such as Queue Point, Skycourts, International City, Dubai Sports City, Discovery Gardens and JLT are all benefitting from the stabilizing economy.

How do you evaluate the current market scenario? Have you observed any remarkable changes? I expect the market to slow down further in a responsible manner – unlike what we all witnessed in 2008-09 when prices fell like anything. This time around it will be soft landing as opposed to steep fall – more like the matured and developed markets. In fact, I like what’s happening in the market now. There is a new set of speculators in the market who are cash rich. They have hard cash to invest and they are here with real money. So, they are not bank-rolled, unlike the speculators of 2007-

Let’s talk about some hard facts that our readers will find practicable in the arena of property investment especially now that more off-plan projects are being launched, albeit with stricter measures. How do you gauge the investment potential of unfinished or off-plan projects? The fundamentals still apply. First of all, make sure that an off-plan purchase is consistent with your property portfolio strategy. If so, then proceed as there are some great opportunities to be had. Location is critical and cannot be underestimated because it is a prime determinant of a property’s value. The value of a particular location is usually derived from the levels of lifestyle convenience, pleasure, harmony, security, future economic value or even status that can be derived from the property. Whether it be an outstanding view or proximity to dining, entertainment and business districts, or access to schools, hospitals or public transport, or being neighbourly with some celebrity types, the perceived benefits that a location may bring to a prospective buyer accounts for a big chunk of a propGulf Property

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Sulafa 2

Skycourts 2

ertyâ&#x20AC;&#x2122;s total value. The asset type is also important. What type of asset will be in demand in the future? Will it be affordable apartments? Townhouses for the middle income earners? Villas for the wealthy? Be smart about the â&#x20AC;&#x2DC;productâ&#x20AC;&#x2122; that you buy into. Look for certain property types complete with amenities and facilities in locations which you believe will be keenly sought in the future. Do not assume that all property types in all locations will improve their values homogeneously. No market

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works this way. Remember that it will be future demand which will determine the value of your property. You need to do some careful financial analysis which will enable you to determine the value of the discount that you anticipate receiving by buying off-plan versus buying a completed property. You should sit down with your broker and determine the net advantage to you by buying off-plan. Many projects are being sold with easy payment plans which can be of tremendous value to you in minimizing your capital ex-

posure before completion of construction. You need to be conversant with financial concepts such as net present value (NPV) and internal rate of return (IRR) to guide you in your decision-making when assessing your alternatives.

How would you differentiate long-term gainers from those who ultimately fail? Of all my clients, those who have had the greatest success possess the ability to think long term, make rational, well-researched and carefully thought out deci-

sions with the end objectives in mind, and they also understand that every real estate industry globally will go through cycles of growth and contraction. They do not get duped into making short-term decisions based on inevitable market fluctuations, and they treat disturbing headlines as the catalyst for gaining a greater understanding of the underlying events that are shaping the industry, and if any opportunities may conceivably arise. This is what I like to describe as proactive investing.

FOCUS including offering strategic and investment advisory and help them gain maximum revenues. It’s more than a one-stopshop service. We give strategic advisory and long-term forward directions – more as consultants, in addition to taking care of their assets and ensuring a continuous increase in shareholder value. For example, if the inflation rate is around 4 per cent and your zakat is at 2.5 per cent, you need to grow at more than 6.5 per cent rate. So, we advise clients to invest in assets that will fetch more than 6.5 per cent per annum in terms of ongoing yields and capital appreciation. So, that’s where we make a big difference in the services we provide our clients.

You have been teaching brokers at the Dubai Real Estate Institute (DREI) to strengthen professionalism in real estate business. How do you evaluate the success of Dubai in setting up the rules and regulations for the real estate sector. Dubai has now become a benchmark for real estate business and practice in the Middle East. It has set a beautiful example that other neighbouring states and governments are pursuing to achieve. I have been asked to share

the Dubai knowhow in real estate sector and help governments to create a similar regulatory regime so that they remain better prepared for crises. Dubai has come a long way in developing the rules and regulations for the real estate sector within such a short time. It has gone through a very exciting as well as a very painful experience – which has taught all of us some important lessons. What Dubai has achieved in the last few years, others would have taken a few

decades to do the same.

What is your key to success? Or in other words what are your unique selling points (USPs)? We offer a holistic approach. We not only maximise the rents or take care of day-today maintenance. We maximise the wealth and value of the asset for our clients. We engage with the client on a long-term basis and try to understand their needs and draw up plans accordingly. When it comes to property and asset management, we do everything for them,

How do you see the UAE real estate market going forward? We see a 5-7 per cent increase in rents – a very high yield in addition to 6-9 per cent capital appreciation till Expo 2020. One good thing is that the market will continue to behave like that of a matured market. No room for cowboys. It’s more structured and there are no hidden surprises. I think, that’s really good for the Dubai market. The regulatory environment in Dubai is almost airtight – not much room is left for foul play. It’s a fair playground for all stakeholders and would help everyone make money in a responsible way. So, those who are looking for easy and quick bucks – Dubai might not be your playground anymore. You have to play by the rules, and here, Dubai rules. g Gulf Property

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Land deals top Dh218bn, Indians buy most in 2014

Gulf Property Exclusive

ubai Land Department (DLD) recently released reports on real estate transactions recorded in the emirate in 2014. The total amount of real estate transactions exceeded Dh218 bil-

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lion in 2014, whereas the sum of real estate investment transactions for 2014 exceeded Dh109 billion. Emiratis, with transactions worth Dh22.771 billion, topped the list of investors from the GCC followed by Saudis and Kuwaitis. Among the Arab investors, Jordanians, with investments of Dh2.513 billion, bagged the top spot, followed by Egyp-

tians and Lebanese investors in the second and third places respectively. Indians invested Dh18.12 billion and remained as the top expatriate community making the highest foreign investment in Dubai properties, followed by Pakistani and British nationals. The mega projects in UAE by well known developers that were either put on hold,

significantly slowed down or were not initiated during the financial crisis, are becoming a reality again because of growing confidence in the UAE’s real estate market. With developers like Danube launching ‘Glitz’ in Dubai Sports City, Cayan announcing projects worth Dh1.2 billion and Reef Real Estate launching ‘Reef Residences’ in Jumeirah Village Circle,

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“The real estate market in Dubai has shown a clear ability to gain momentum from year to year, in addition to maintaining sustainable growth, as well as the trend towards maturity. This would help the Dubai Land Department in achieving the emirate’s mission to be a global real estate leader in attracting investments from different sources....” -- Sultan Butti Bin Mejren Director General, Dubai Land Department

the market definitely looks promising for stabilised growth in the time to come. On the other hand, property prices in Dubai have continued their recovery, albeit at a slower pace. Factors behind this slow rate include tighter government regulations and an increasing mismatch between buyer and seller expectations, as suggested by various reports on the Dubai real estate market by leading advisory firms. But sentiments in the market remain positive. Developers are of the opinion that every growing market has its fair share of ups and downs, and a certain amount of cooling off in property prices is required for a market like Dubai. If we take large developments like Dubai World Central, which includes the Expo 2020 site and Al Maktoum International Airport, and also master-planned

communities like Dubai Canal and Mohammad bin Rashid City into consideration, the market is definitely in for some major changes. Going forward, the property market in Dubai is expected to stabilise in 2015 and the following few years, although there are fears among investors that speculations in off-plan projects could lead to unprecedented price growth in Dubai.

Dh218bn worth trade in 2014

DLD recently announced that the total amount of real estate transactions recorded in the emirate in 2014 exceeded Dh218 billion, through 53871 transactions. The same report by the Real Estate Research and Studies Department in DLD showed that last year’s transactions were diversified and were all

over Dubai. Commenting on the results, Sultan Butti Bin Mejren, Director General of DLD, said, "The real estate market has shown a clear ability to gain momentum from year to year, in addition to maintaining sustainable growth, as well as the trend towards maturity. This would help DLD in achieving Dubai’s mission to be a global real estate leader in attracting investments.” The report revealed that the sales accounted the total value of transactions at 51%, and it acquired the maximum share from the other categories, while the share mortgages accounted 44%, leaving all remaining operations at only 5%. The total number of transactions in term sales reached 38,113 transactions with the value exceeding Dh112 billion. The market recorded 12,511 mortgage transaction ex-

ceeding Dh97 billion, while the remaining operations accounted 3,227 transaction with a total value of Dh10 billion. Sales and mortgages related to land transactions recorded more than Dh157 billion from the total real estate figure for 2014, with the total of 14,939 transaction. The commercial lands (already built on) acquired the maximum share in terms of value for the type of land with 38% in total. Looking at the value of transactions by the kind of property, the buildings and units transactions exceeded 38,932 transactions with a total value of Dh60 billion during 2014. Al Thenaya Al Thaletha areas of Dubai were revealed to be the most attractive for investors, with the value of its transactions from sales of lands reaching Dh4.71 billion through 1,427 sale transactions. This was Gulf Property

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followed by Al Thenaya, Al Khamesa with a total of 1,016 sale transactions worth of Dh4.29 billion, where Al Barsha South 4 took the third place with 910 transactions worth Dh4.58 billion. Business Bay took first place in apartment sales, with 4,315 transactions with the value of Dh7.20 billion, followed by Dubai Marina with 4,121 transactions with the value of Dh9.17 billion, while Al Thenaya Al Khamesa came in at third with 2,615 transactions with the value of Dh3.40 billion With regards to buildings, Al Thenaya Al Rabe’a were the most prominent among all districts through their generation of sales with total of 396 transaction with the value of Dh988 million, followed by Wadi Al Safa 6 sales with total of 237 transactions with the value of Dh656 million, while Al Barsha South 4 came in third with total of 166 transactions with the value of Dh359 million. Looking at the top five areas in terms of mortgages transactions for the year 2014, “Al Thunaya Al Khamesa” topped the list with 513 mortgage transactions with total value of Dh1.68 billion, followed by “Al Barsha South 1” with 255 mortgage transactions with total value of Dh260 million, while “Al Barsha South 5” came in third with 197 mortgage transactions with total value of Dh384 million.

Investors buy properties worth Dh109bn

The sum of real estate investment transactions for 2014 exceeded Dh109 billion, through 41,715 in-

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Investors at the Indian Property Show, a popular exhibition showcasing properties from across India, held every year in Dubai

vestors, as per the report issued by Real Estate Research and Studies Department in DLD. Commenting on the results, Mejren said, "The Dubai real estate market proves many facts, including Dubai is the ideal investment location in the Middle East, and it is also competing with top investment cities in Asia and Europe. The report clearly shows the sustainable growth of the upcoming years towards the launch of Expo2020.” The DLD investment re-

port, which tracks the department’s real estate transaction activities over the course of the year, revealed that citizens of Gulf Cooperation Council (GCC) states contributed Dh32 billion from 7,186 investors in 2014. Emirati investment formed the maximum share of this figure with total transactions of Dh22.771 billion amounted from 4,452 transactions, while citizens of Saudi Arabia came in at second place after making transactions worth Dh5.207 billion amounted from 1,745 trans-

actions, followed by Kuwaiti nationals after making 426 transactions worth of Dh1.271 billion. Following them are Qatari nationals after making 221 transactions worth of Dh1.969 billion, and Bahraini nationals after making transactions worth of Dh483 million through 187 transactions. Finally investors from Oman invested Dh613 million through 119 transactions. Arab investors contributed significantly to Dubai real estate activity last year, with their total value of 5,431

Residential market quiet, hotels peak in Dubai: JLL

ones Lang LaSalle, the real estate advisory firm, released its fourth quarter 2014, Dubai Real Estate Market Overview report, which provides the consultancy’s perspective on the latest trends in the office, residential, retail and hotel sectors. Commenting on the report, Craig Plumb, Head of Research at JLL MENA, said, “Dubai’s real estate sector ended the year on a quiet note as nearly all segments of the market witnessed subdued growth levels in Q4. Average prices and rentals in the residential sector appear to have stabilized over recent months, with some locations registering marginal declines. While cheaper oil prices are likely to dampen investment sentiment in the short term, Dubai’s success at diversifying its economy and expanding its global reach makes it less vulnerable to oil price fluctuations. With the government’s 2015 budget announcement, which saw planned spending and revenues increase 9%

transactions, amounting to more than Dh12 billion. DLD’s report revealed that Jordanian investors ranked highest in terms of number of transactions with total 1,028 transactions at nearly Dh2.513 billion worth of deals. They were followed by citizens of Egypt with 874 transactions and a total of Dh1.768 billion, followed by Lebanese investors with a

NEWSUPDATE and 11% respectively, the next 12 months are expected to see a boost in business activity. We will unveil our 2015 market forecast at our Annual Top Trends event next week." Sector summary highlights are as follows: Office: Q4 saw the addition of 8,200 square metres of office space in Business Bay. An additional 1.2 million square metres of office space is expected to enter the market in 2015, however we remain cautious of the delivery of some of these projects within the projected timeframe. As demand remains strong for single owned buildings in established locations, rental rates and vacancy levels are expected to remain stable in the short term. However as new space enters the market, average rents are likely to face further downward pressure as tenants seek to optimize their space requirements, and consolidate their operations in one location. Vacancy levels across the CBD are expected to increase as more Grade A stock enters the market by the end of 2015. Residential: The second half of 2014 saw Dubai’s residential market stabilise as average rents and sale prices remained relatively flat, with marginal declines

over the last quarter. On an annual basis, the REIDIN rental index showed growth levels dropping from 18 in 2013 to 15% in 2014. Similarly, the sales market saw some cooling down as the REIDIN sales index points to a decline in growth levels from 23% in 2013 to 20% in 2014. This comes as the number and value of transactions dropped 30% & 14% respectively in 2014, as data from DLD reveals. The residential sector is likely to remain subdued over the next 12 months as the market is expected to absorb 25,000 additional units in 2015. We remain cautious of the delivery of some of these projects within the timeframe. Retail: The Dubai retail market is expected to witness the delivery of approximately 267,000 square

total of 785 transactions and a total amount of Dh2.068 billion, Iraqi nationals came in fifth place with 650 transactions and a total amount of Dh1.631 billion. They were followed by Yemen, Sudan, Palestine and Morocco. "The report reveals the attractiveness of Dubai real estate market, specifically as in one year the market was able to attract this amount of

investors from around the world, and it majorly reveals investors trust in the market” said Bin Mejren. The total value of non-Arab investment in the Dubai real estate market for 2014 amounted to more than Dh64 billion through 29,098 transactions. Indian nationals were ranked the highest value foreign investors, making 7,353 transactions with a

Craig Plumb, Head of Research, JLL MENA

metres of retail space over the next 12 months, of which 118,000 square metres is due for completion in Q1. This largely includes Phase II of Dragon Mart and three neighbourhood centers including The Box Park by Meraas. While average rents continued to be high on an annual basis, they remained stable over the last quarter. No rental growth is forecast over the next 12 months as the retail supply expands significantly. Vacancy rates are expected to remain stable as demand from retailers and new brands entering the market continues to be strong. Hotel: Q4 saw the delivery of major properties such as the Four Seasons, Sheraton on Sheikh Zayed Road and Pullman JLT, increasing the total supply to 64,200 keys by year end. Partly as a result of this increase in supply, hotel occupancy in Dubai dipped marginally in the year to November to register 79 per cent. This decrease, coupled with a 1 per cent decline in ADR’s for the same period resulted in a marginal drop in RevPar to reach US$187 YT November. With an additional 4,700 keys due for completion in 2015, the hotel sector is expected to witness subdued growth rates as operators face strong competition. g total of Dh18.123 billion worth of transactions. Investors from Pakistan came in second with 5,079 transactions and a total of Dh7.588 billion worth of property transactions. British investment came in third at Dh9.318 billion. They were followed by investors from Iran and Canada with total of Dh4.5 billion and Dh3.157 billion respectively. g Gulf Property

INTERVIEW

Cayan rolls out Dh1.2bn worth projects in 2015 46

Gulf Property

By Paromita Dey Senior Reporter

hen you are strolling along Dubai Marina or enjoying a relaxing boat ride across the waters, it is almost impossible to miss the famous twisted tower that completely looks like geometrical helix. Yes, you are right, it’s the Cayan Tower. Another jewel in Dubai’s skyline, the Cayan Tower has been officially declared by the Guinness World Records as the globe’s tallest twisted tower standing at 307 metres (1,007 feet) high. The developer of such an iconic project, Cayan Group, is a leading international property developer and real estate investment group with offices in Riyadh, Saudi Arabia and Dubai, UAE. The company’s development portfolio includes residential complexes, commercial towers, hospitality projects and multi-purpose gated communities. The company’s growing client base includes more than 2,000 customers from all over the world. Since its inception in 2004, major developments by Cayan Group has received various awards from all around the globe. The financial crisis in 2008 in Dubai forced the company to slow down their construction in the emirate, but that also didn’t deter them in completing their projects. One such project is Cayan Tower, which was handed over in 2013. With 75 floors housing 495 apartments, Cayan Tower is twisted at a 90 degree angle from bottom to top, with each floor rotated by 1.2 degrees. It took seven years and US$272 million to

build this epitome of modern engineering. The tower’s construction started in 2006 but had to stop due to major flooding in basement and then the financial crisis in 2008 forced the delay. But finally the tower was completed in June 2013. Cayan Group has several other major projects in their kitty, most of which is located in Dubai Marina. The first one, Silverene has 34 floors in Tower A and 26 floors in Tower B, completed and handed over in 2011. The next one is Jewels, 20storeys twin towers located at a strategic location in Dubai Marina and within a walking distance from The Walk at Jumeirah Beach Residence (JBR). Dorrabay is a 22-storey residential tower strategically located to overlook the beach and the marina, offering a range of panoramic views of the Arabian Gulf, Marina or boat harbours. The tower's curved design and location at the end of the crossroad between the beach and the marina optimises the view for all its apartments. The next one, La Residencia Del Mar, located in Dubai Marina, is a fusion of refined lifestyles, inspired designs and unmatched amenities. With only 14 floors and only 3 apartments per floor, residents enjoy total privacy and exclusivity. Last but not the least, Cayan Business Center (CBC) is a 12-storey building designed by leading architects, Schuster Pechtold. CBC offers 12 floors of commercial freehold space located in the heart of the Dubai Technology, Electronic-Commerce and Media Free Zone (TECOM) district on Sheikh Zayed Road. The company’s portfolio

INTERVIEW Cayan Tower, which was handed over in 2013, is twisted at 90 degree angle from bottom to top, with each floor rotated by 1.2 degrees

also extends to Saudi Arabia with projects like Layaly Compound, a residential development comprising of 60 villas and Samaya, a mixeduse development. Both the projects are under construction, the second one is in the final design phase. Also worth mentioning is the developer’s recent acquisition of the Broumana Lands in Lebanon, a plot of 144,000 square metres, lo-

cated among the hills at 750 square metres above sea level. Broumana is 17km away from Beirut. The project is currently in its final design and permitting stage. The company recently announced that it is developing Dh1.2 billion worth mega projects in Dubai and Riyadh in 2015. In Riyadh, Cayan Group acquired a prime commercial plot along King Fahed Road, where a stateGulf Property

INTERVIEW

“We are quite excited about 2015, we have been restructuring the company from last year itself. We decided that 2015 will be the year where we kick off all our activities in the region as well as in Dubai, where Expo 2020 will be happening, four years later. I do not know how much share we actually command in the market, but we consider ourselves to be one of the leading developers in the region. We do not develop on any random plot, we are very particular about the products that we deliver. We have a good position in the market and our clients have immense confidence in us.” --- Ahmed Al Hatti, Chairman, Cayan Group

of-the-art office building will soon be built. The company also acquired two lands on Umm Suqeim road in Dubai, for the location of its planned upscale residential and hotel apartment towers. The project will cater to the increasing demand for residential properties in the area. Ahmed Al Hatti, President and Chairman of Cayan Group, said, “The strategic land purchases as well as our upcoming landmark projects in Dubai and Riyadh form part of our comprehensive plans for 2015. Our new undertakings at the start of

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the year are fully aligned with the booming hospitality, residential and office sectors in both cities. Similar to our previous property ventures in the region, our property developments will demonstrate excellence and craftsmanship that we are known for, as we aim once again to set new benchmarks across regional and global industries. Furthermore, we hope to meet the rising demand from various sectors, especially from the residential segment, by offering prime properties that meet the highest international standards.”

In an exclusive interview with Gulf Property, Hatti talks about their comprehensive plans for 2015 and their new undertakings around the region. Excerpts:

Gulf Property: Give us a brief overview of Cayan Group. What do you think of the company’s current position in the UAE market as a real estate developer? Ahmed Al Hatti: In spite of being a Saudi company, we have chosen to enter the UAE market and start the company 10 years ago in Dubai. During this decade

we launched and handed over several iconic projects in both UAE and KSA. During the recent economic gridlock, we focused on completing our projects and delivering on our promises, we still had two mega projects under construction in Dubai during that time which were finally delivered in 2011. Currently, we are quite excited about 2015--we have been restructuring the company from last year and have decided that this will be the year where we kick off all our activities in the region as well

INTERVIEW Silverene, located in Dubai Marina, has 34 floors in Tower A and 26 floors in Tower B, completed and handed over in 2011

as in Dubai, where Expo 2020 will be happening. As for the shares that we command in the market, we consider Cayan to be one of the leading developers in the region. We do not develop on any random plots and we are very particular about the products that we deliver. Cayan have a good position in the market and its clients have immense confidence in its projects.

What and where will your focus of the company in the coming year 2015? What plans do you have to

strengthen the company? We have learnt a lot from the financial crisis. We believe in developing our projects in a good location and then selling it. Now, we are more focussed on diversifying our productsâ&#x20AC;&#x201D;concentrating on prime residential developments, on the hospitality and retail side and the move towards tapping into newer destinations. In Dubai most of our projects are in Dubai Marina. For 2015, we are branching out to a new area, Umm Suqeim Road in Dubai, as we believe that there is good growth op-

portunity in it. We are also studying some other areas in Dubai, which will be announced over time. As a regional company, we have also announced office buildings in Saudi Arabia. In Cayan Group, we focus on smart iconic designs for our buildings, since we want our developments to stand out. We have a very good efficiency rate and we give a great attention to the satisfaction of our clients.

Give us a brief overview of the projects, that Cayan group is currently develop-

At A Glance

Dh1.2 billion

worth projects in Dubai and Riyadh announced

60 villas

in Layaly Compound, located in Riyadh, Saudi Arabia

144,000 sqm land acquired by Cayan Group in Broumana, Lebanon

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INTERVIEW Jewels comprises 20-storeys twin towers located in Dubai Marina and within a short distance from The Walk at JBR

ing across the region? 2014 was more about restructuring the company and focusing on the manpower we had and preparing ourselves for 2015, whereby now we have started announcing our new projects. Our iconic project in Dubai Marina, Cayan Tower, was handed over in 2013, though we faced a lot of challenges for that project. All of our projects are self-financed. In 2015, we will be developing Dh1.2 billion worth of mega property projects in Dubai, UAE and Riyadh, Saudi Arabia. We have also acquired two lands on Umm Suqeim road for the location of our planned upscale residential and hotel apartment towers. It will be a mixed use community, which will mainly

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have three components-hotel, residential and retail. We have also acquired a prime commercial plot along King Fahed Road in Riyadh, where we plan to set up a state-of-the-art office building. In addition, we also secured a good property in Broumana, Lebanon, where we are developing a master planned community.

There are multiple foreign builders, from India, Turkey and many other nations, who are increasingly doing business in the UAE. What is your opinion about them? Has this stiff competition in the UAE market affected/affecting your business? Competition is always healthy, the more the compe-

tition, the more the developers will stand out with their projects. We look at Dubai market now and compare it with the market from 10 years ago. At that time, any individual was able to announce himself a developer without strict regulations. The situation is now different as there are strict regulations recently implemented by RERA, which we are extremely happy about. Previously, Dubai was more of a speculative market, now we have a normal mix. The more we are in a stable market without any surprises, the more the market will be qualified and safe for everyone. Dubai is not a place where you only come as a tourist. It

is a hub where people from various countries usually stay and do business. Investors believe, that still after the financial crisis, Dubai has grown to be much stronger and consider it a place to retain their investment.

Is Cayan Group catering to only high-end buyers through luxury projects or is affordable housing also on the cards? We are definitely high-end, but we can say that Cayan projects are unique and iconic. This is how we want to define ourselves and this is how we want to stand out. The products that we bring to the market are really special. High-end development does not mean that the project has to be the most expensive in

INTERVIEW An artistâ&#x20AC;&#x2122;s impression of Layaly Compound in Riyadh, Saudi Arabia

the market. We believe, our projects are unique and smart and can be still afforded by people looking for high quality. The Dubai market has become quite matured over the years, which is reflected in the presence of different developers specialising in different areas of development, as our target is the uppermid segment. Since everybody is willing to invest in Dubai, clients always look for smart building where there is proper value for money. We believe in providing them with that.

How much landbanks does Cayan possess in the region? Any plans for developing them soon? Most of our landbanks are in

Dubai, Saudi Arabia and Lebanon. Some of our mega projects that we are currently constructing, are in joint ventures with other companies. But I cannot disclose any names now. We are studying a new mixed use commercial project in Dubai, where it will consist of office spaces along with a retail shopping area. For the recently announced hotel apartment in Dubai, we havenâ&#x20AC;&#x2122;t finalised the operator yet, but we do not have any intentions of being the hotel operator ourselves. We will soon be inviting the hotel operators for the bidding.

Overall, real estate still remains a lucrative sector in

the UAE. How viable would you say it is? There was noticeable growth in the Dubai real estate market in 2014. Currently it is a stable market, which is the kind of a market we believe in. It is the best time now that we can plan our strategies for the future. The market has its share of ups and downs, but we also believe that there are now good opportunities for smart developers. I keep on hearing that sales volumes have gone down and the market has softened but I canâ&#x20AC;&#x2122;t rely on that. We believe that as long as we bring in quality products, this market will support the developers who knows what and how to develop. Also, the position we have with our

branch in Saudi Arabia give us an edge over others.

Any other plans of expanding overseas? Most of our projects are located in Dubai, where we focused on residential first, then we branched out to commercial buildings with Cayan Business Centre. Later we expanded with several commercial projects in Saudi Arabia. Dubai is one of the markets that we completely believe in, hence we are expanding with more than one project in Dubai. We have also been offered some opportunities in London, which we are currently studying. Wherever there is an opportunity, we study it, evaluate it and then we kick it off. g Gulf Property

INTERVIEW

Grand Properties raises portfolio value to Dh1.1bn 52

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INTERVIEW

Hamad Ali Lootah, Chairman of Grand Properties, and his colleagues at the Cityscape Global exhibition in Dubai in September 2014

Gulf Property Exclusive

rand Properties LLC, a Dubai-based property developer, is increasing its real estate portfolio value more than 60% to Dh1.15 billion, up from the existing Dh700 million as it fast-tracks the construction of two on-going projects, scheduled for delivery this year, a top official said. The company, which has already delivered four proj-

ects including three residential and one commercial buildings has 310 residential units under its management, collectively valued at Dh700 million. “We have an apartment project with 204 units at Al Furjan area that we expect to start site mobilisation around the middle of this year, valued at Dh300 million,” Hamad Ali Lootah, Chairman of Grand Properties told Gulf Property in an exclusive interview. “This is our first freehold project. This is in addition to another project with 112 apartments that we will be

able to hand over by the end of this year, valued at Dh150 million. We are also looking at projects in Abu Dhabi emirate.” Grand Properties is part of Al Jazeera Group of companies that includes a construction company, a rent-a-car business, a ready-mix construction company. It employs 4,500 people including 3,000 working for the construction company. He said, the company is not aggressive in its business. “We plan properly and will build projects with our money, without being de-

pendent on the sales proceeds. So, even if the market goes down, our projects will not be affected,” he says. “Our strategy for each building is clear and decision made for sale or rent before we launch the project that generate healthy cashflow for the company. “So, we want to make our business more sustainable first. This way, we will not be reliant on market demand and supply situation. However, the demand for homes will always be there in the rental market.” Refering to the current market situation as healthy, Gulf Property

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â&#x20AC;&#x153;We plan properly and build projects with our money, without being dependent on the sales proceeds. So, even if the market goes down, our projects will not be affected.â&#x20AC;?

â&#x20AC;&#x201C; Hamad Ali Lootah, Chairman, Grand Properties

he said that the market will stabilise in 2015 and start to grow in 2016 and beyond. In an exclusive interview, Hamad Ali Lootah elaborated his views on a wide-ranging areas. Excerpts:

Gulf Property: How do you see the freehold properties in UAE? Hamad Ali Lootah: The market overall in 2014 was good and remained stable, and I guess the same would be carried out for 2015. Buyers are becoming more mature on how, where and when to spend, which increases the level of competition to deliver the best quality for the end user. Market is currently at a healthy stage

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and prices are within manageable limits for everyone.

What are your marketing or promotional strategies for international customers? We are targeting mid to high level people for both residences and non-residences, investors are always welcomed to explore investment opportunities with us. Our strategy is to start constructions, let the customer see and touch what they are getting before they purchase, this would increase level of honesty and having a valuable assets for future investments. How many residential and

commercial do you have and how many are developing for deliver? We are currently developing 4 projects and there are more to come in the near future: Al Mezan: already delivered since 2010 and fully leased out. Al Jaddaf Plaza: under construction, building shall be completed and delivered by end of this year 2015, early registration for leasing out units will be offered within this year. Topaz Residences: residential off-plan project in Al Furjan, modern design with high finishing project. Jumeirah Park luxury villas: Concept design has been

signed off, constructions to start soon. These villas are one of its kind at Jumeirah Park due to its location and luxury layout.

How do you keep up with the slowdown in the market, and make business sustainable? One of the key success in the market being as a developer, is being sustainable. We do carry out our feasibility study from all aspects to consider all current and future scenarios, of course each stage depends on the supply and demand and that would vary for projects. Our slogan is: Built on quality, honesty, and integrity, Service you deserve.

INTERVIEW The Mezan office building developed by Grand Properties

The success is not to sell only, but also to keep providing services to your own customers and save their investments during the drop down.

Are you planning to deal with brokers to bring international customers? Brokers are important to deal with in the market, plans vary for each projectâ&#x20AC;&#x2122;s requirements and that is subject to discussion at a later stage.

Many international investors from the emerging markets are willing to invest in Dubaiâ&#x20AC;&#x2122;s real estate, what is the strategy to attract these investors? Our projects is a real attrac-

tions by itself due to their locations and high finishing. Strategies are conducted on each project before the launch date which again depends on the market situation and overall vision.

Are you planning to leaseout the un-sold units, if any? In each and every project, when we carry out its feasibility study, we do offer part for lease out and part for sale. In Dubai, we do have projects for leasing out only as mentioned earlier, to satisfy the end-users and midlevel income customers who still wants to enjoy living in Dubai but at affordable prices.

Will your company venture into hotels and serviced apartments? Being in the market for a very long time as contractor, consultant and developer have definitely given us strength in developing and shaking hands with partners. We did in the past venture in similar projects and we do welcome the same opportunities which brings win-win situation for all parties involved.

Being in the market for a decade, your company seems to be very conservative and not aggressive. Is this a part of your business strategy? We always believe that good projects, talks by itself about

its own. As mentioned earlier, our strategy is to build and then sell/ lease out through having a mockup or show unit to present to people. This gives the customer real value of the property and feeling and level of expectations would be controllable for us as a developer.

How many units have been delivered by the company so far? In Dubai, we have delivered many projects in the past and we will continue to construct and meet our commitments. So far 300 units have been completed and delivered. We would continue to deliver more in the future as we progress. g Gulf Property

Select Group considers Dubai Marina its bastion INTERVIEW

By Indrajit Sen Senior Reporter

t is their deep faith in the property market of Dubai that motivated luxury real estate developer Select Group to continue developing projects during the worst period of the financial crisis. Although the founder and CEO Rahail Aslam is from the United Kingdom, he chose to form the company in Dubai in 2002. “This was at a time when freehold property had not been announced, but real estate trading had started,” says Mustafa Pooya, Chief Commercial Officer, Select Group. “Initially the group entered the Dubai real estate industry through its investments portfolio before launching its real estate development operations in 2005.” Since then the developer has delivered eight landmark projects in the Dubai Marina district, an area it claims as its stronghold. “Our focus has always been on being a prime location developer, which makes Dubai Marina quite a logical choice. While there are developers that focus on multiple areas in a city, we decided to retain our emphasis on developing projects in one prime community. This has worked quite well for us in terms of providing infrastructure sup-

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An artist’s impression of ‘Marina Gate’ in Dubai Marina

INTERVIEW

pline and conservatism, and that has paid off,” Pooya states.

“2009-12 saw a number of developers being driven out of the market. In such challenging economic circumstances, we delivered 2,300 apartment units within the Dubai Marina master development.”

Array of projects in the Marina

– Mustafa Pooya, CCO, Select Group

port enabling us to deliver projects we launched in a timely manner,” Pooya states. Majority of the property developers depend on a range of sources for financing their projects; from banks to equity partners to raising money from the capital markets. However, since its inception, the primary source of financing for Select Group has been profits from their project sales. Pooya explains: “It is a business that has grown over the years. So you have the delivery of eight projects in Dubai Marina, and obviously each one of these will generate a certain amount of profit. We are a private entity and do not have investors who underwrite our projects.”

March during recession

Between 2005-07, when the property market in Dubai was experiencing an unprecedented boom, Select

Group launched seven projects in the Marina district. It delivered all of these projects between 2009-12, which essentially means that there were no delays in construction during the time when the property market was suffering from the adverse impact of the global economic crisis. “These years were the worst period of the financial crisis, which saw a number of real estate developers being driven out of the market. In such challenging economic circumstances, we delivered 2,300 apartment units within the Dubai Marina master development,” Pooya adds. He goes on to say, “We always have taken a long-term view on the opportunity in Dubai Marina and on the overall proposition of Dubai. I firmly believe Dubai is a great place which can only get better. The leadership in Dubai continued to build the social and physical infrastructure even during the recession.” Before the recession struck Dubai in 2008, the market

was driven primarily by speculation where buyers did not diligence the developer’s credibility. “There was a time in Dubai when a developer could purchase a land from the master developer on an instalment plan. Let’s say the master developer gives the developer two years to pay the amount. So you could launch your project, sell offplan, collect your proceeds from the investors and use that to fund the construction and to pay for your land,” Pooya recalls. When the property market in Dubai crashed in 2008, those real estate developers who did not have their financial management in order took the worst hit. “We were driven by fiscal prudence and always had sufficient funds in place and that’s how we survived during the financial meltdown. How else do you think we could deliver 2,300 apartments in Dubai at a time when our competitors were being forced out of the market? You do that by demonstrating financial disci-

In November 2012, when the property market in Dubai had started to recover from the recession yet investors’ confidence was at a plateau, Select Group launched a project in Dubai Marina, named ‘West Avenue’. The builder began selling the project only after they had built the entire superstructure of the building and put show apartments on the fourth floor for buyers. Pooya claims the response was quite good as people never doubted the developer’s credentials. By 2012, Select Group had completed a decade of existence in Dubai and they continued launching successive projects. “As far as West Avenue was concerned, buyers were not concerned about the developer, because it was unusual for developers not to sell off-plan. We launched the project only when the superstructure had been built and we delivered the project in two years. This was our eighth residential project.” In January 2014, Select Group launched a project named ‘No 9’ in Dubai Marina. It was the developer’s ninth residential project and incidentally even the plot on which it would be built was No. 9, thus the name of the project. Business was great and the property market in Dubai had rebounded by 2014. Encouraged by market sentiment, Select Group launched their flagship project named ‘The Residences at Marina Gate’. Being their largest project to date, the developer has directed its entire effort Gulf Property

INTERVIEW

and focus on ‘Marina Gate’. The landmark project is a trio of three towers of which two towers have already been launched. There are 399 apartments in Marina Gate I and the 519 apartments in Marina Gate II. The three towers complete the Marina walk, as the project site is the last marina-facing plot of land. Marina Gate is a massive development with more than 1,400 apartments in three towers. “Typically a tower in the Marina has 100-200 apartments. Our smallest tower has 399 apartments and the largest has 519. In terms of retail, we have more than 50 outlets on the ground, mezzanine and podium levels. In our view, this project is likely to add tremendous value to the Marina,” Pooya elaborates. Marina Gate has a built-up area in excess of 3.8 million square feet. “So even though it is composed of 3 towers, in reality it is the size of 8 or 9 regular projects. It is built over a huge area. The shortest tower in Marina Gate is 51 storeys and the tallest is 65 storeys,” Pooya explains. Besides developing projects, Select Group has also diversified by establishing two more verticals. Property development is of course the mainstay of the developer’s business, which it intends to strengthen by launching more projects in future. Unlike most other real estate developers in the UAE who develop both residential and commercial properties, Select Group is focused exclusively on developing luxury projects, which has delivered impressive returns. “Our prime focus is residential and it has worked well for us. So why to re-invent the wheel? I think for every developer it is important to find

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An artist’s impression of an apartment’s bedroom in ‘Marina Gate’

a niche. Only when you have mastered that would you then look at other avenues. For us, instead of looking at commercial we looked at developing hotels.” Select Group develops projects to maintain as fixed assets for the purpose of generating revenue. “There are certain assets which we look to hold on for a while, such as, the InterContinental Dubai Marina, which is set to open by the end of Q2 2015. We are the developer and the InterContinental is the operator. It is an income-generating asset for us and we do not plan to sell it. We are not looking to build hotels to sell and our hospitality ventures are based on our longterm vision. The third vertical is acquisitions and investment management. Select Group has developed the investment arm over the years and acquired projects as and when a good opportunity presented itself. Pooya explains: “While we were building and delivering we were also ac-

quiring. For example, we bought a building in 2013 from Emaar named ‘Marina Tower’. It has 197 apartments, 5 retail outlets. We bought that entire building, carried out the requisite refurbishments and sold it to individual investors.” In addition, Select Group has made a number of acquisitions in the United Kingdom also.

Overseas ventures

Apart from developing its core property development business in Dubai, Select Group has also been on the lookout for investment opportunities in the UK and Europe. “The UK is more of a home-based investment for us, because we have our roots there. The CEO Rahail Aslam is from the UK. We have always had certain investments there.” Pooya reveals. There was one such opportunity in Nottingham, where a developer had gone bank-

rupt due to the financial crisis and the project remained incomplete. Select Group bought the mixed-use development in the summer of 2012, named it ‘Nottingham One’, completed it and sold it out. The developer made similar investments in the UK; it bought a hotel in Birmingham recently, which Pooya terms as ‘a troubled asset’. In addition, the developer also acquired four more buildings in other parts of the UK, including in Scotland and Liverpool. “The UK is both an investment opportunity and as a base where we can expand as developers,” Pooya comments. However, Select Group made an interesting investment in a European country, whose real estate market was unknown and unexplored: Croatia. The company is developing a mixed-use tourist resort project, which will include apartments, villas, hotel, leisure and commercial facilities. The project will be located in

INTERVIEW An artist’s impression of Select Group’s ‘Nottingham One’ project in the UK

the southern region of Croatia, on the island of Ciovo on the Adriatic Sea, where Select Group has bought about 8 hectares of coastal land. When asked about this, Pooya says, “Croatia was an investment we made several years ago, and we plan to develop that. We see potential in the region. It is just a diversification strategy, and as a part of it, you tend to identify developing markets and look for opportunities.”

Unwavering faith in the Dubai market

Irrespective of wherever they invest and develop projects in the world, Dubai will always be at the core of Select Group’s business. Pooya has immense confidence in the property market in Dubai and based on that the developer has plans of increasing its land bank as well as acquiring other projects. “We did the same thing during the downturn, so you can imagine what we must be doing now when the market has gained momentum,”Pooya states. Mid and low-income groups in the UAE are ex-

panding and will continue to expand, given the steady flow of expatriate workers. These groups comprise people who will naturally invest in low-cost housing projects. Besides, high property prices and rentals in Dubai have forced people to migrate to other emirates. Thus affordable housing has gained immense importance and popularity in Dubai, and builders developing low-cost projects have also earned healthy profits from them. Considering the changing dynamics of Dubai’s property market, is developing luxury projects for high-end buyers still the overwhelming trend of the market today? Or are builders stressing equally on affordable housing? “I think recently there has been a push talking about more affordable housing,” agrees Pooya. “People are now questioning the need to have something for them to afford. That’s the issue; things are becoming expensive, rents have spiralled out of control and people have been forced back into the neighbouring emirates, as was the case in 2008. You want to make sure you cater to everybody.” However, he says that there is a popular miscon-

ception about the luxury real estate sector in Dubai. “The world ‘luxury’ in Dubai is used very loosely,” says Pooya. “Everyone seems to be developing something ‘luxury’. I think for a project to qualify as ‘luxury’, the location makes a difference. For us when we talk about luxury real estate, we talk about prime areas, such as, Marina Gate. If you take a look at this project of ours you will understand the point I am stressing on.” Pooya also believes that given the smart city Dubai has been transformed into it deserves more global recognition. “In our opinion Dubai is still undervalued, when compared to other global cities, such as, New York or London or Hong Kong. I mean where in the world will you find infrastructure of this quality? There are no taxes levied here. Yes it is an expensive city, but there are no taxes,” he says. He also lauds the government for being so generous and understanding the needs of the community. “The tram transport system that has been recently installed, we didn’t pay taxes for it. The government comes and puts a tram for you and we as developers, as inhabi-

tants get to benefit from it. As a developer I can charge money from you for the tram access. Anywhere else in the world the people end up paying 40% in the form of taxes.” But is the property market’s growth in Dubai just boosted by the EXPO 2020 hype? Pooya believes the EXPO is just a nominal factor and there are concrete plans devised by the emirate’s visionary leadership that are driving the market’s growth. “I would like to say that Dubai has put EXPO on the map,” he says. “EXPOs have been going on for years. One of the biggest so far has been the one in Shanghai. The EXPO has been marketed very well in Dubai. But I think Dubai has a lot more than the EXPO. Yes, the EXPO does add a certain amount of value and help the Dubai economy develop. But there are also signs on the roads about ‘Dubai Vision 2021’. That’s a comprehensive plan by the leadership to take Dubai to new heights. By 2020 we are talking about getting 20 million tourists annually into Dubai, regardless of the EXPO. We already have the right ingredients. And every step that the government takes just helps to improve this city.” g Gulf Property

TALLTOWERS ‘One World Trade Centre’ – the tallest tower completed in 2014 – that stands on the same ground where the Twin Towers once graced the New York City skyline

Global metropolises are racing against each other to create the tallest skylines. Every year, developers build tall towers to grace the skylines that also reflect a shift in the global economy. While developed economies are reeling from successive recessions, developing countries are raising the bar in urban development. Gulf Property takes a look at the latest developments with regards to the development of skyscrapers

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TALLTOWERS ‘4 World Trade Center’ is a 298 metre skyscraper that is part of the new World Trade Center complex in New York City

Racing for the sky

Gulf Property Exclusive

he year 2014 passed by quietly – although with an enviable record of 97 tall towers measuring more than 200 metres in height being completed. About 74 of the tallest 97 buildings measuring 200 metres and above or 76 per cent of the total tall buildings completed in 2014 have been built in Asia, according to the Council on Tall Buildings and Urban Habitat (CTBUH), the global authority on tall building research. At 541 meters, One World Trade Center was the tallest

building to be completed in 2014 and is now the world’s third-tallest building. As a country, China continued to dominate the global race to build tall buildings. “Once again, for the seventh year in a row, China completed 58 – or the most 200meter-plus buildings. This represents 60 per cent of the global 2014 total, and a 61 per cent increase over its previous record of 36 in 2013,” CTBUH said in its annual report issued recently. These buildings were spread throughout 29 cities, including some that were not on the list last year, such as Beijing (two completions in 2014), Shenyang (two), Wuhan, and Wuxi (four, respectively). Tianjin held the title of most skyscraper com-

pletions (six) in China, Asia, and indeed the world, up from two in 2013. “What can be made of this skyscraper surge? It could very well be that pent-up demand has returned to realestate markets after a lull during the recession,” says Danial Safarik, spokesperson of the Chicago-based CTBUH said in a statement. “Now that six years have passed since the global economic crisis/ recession began in 2008, and given the long gestation and construction periods common to tall buildings, we are almost certainly seeing a post-recessionary recovery.” The tallest building to complete in China was The Wharf Times Square 1 in Wuxi, a 339-meter hotel/of-

fice complex. It was also Asia’s tallest building and the third-tallest building in the world to complete in 2014. “Clearly, the Chinese juggernaut has not yet run out of steam. The country continues to see new 200-meterplus completions in cities that previously had few or no such buildings, indicating that the massive plan to urbanize the country – requiring the urban relocation of some 250 million people – is underway,” Safarik says. “Its effects have begun to percolate into smaller regional cities beyond the first tier of Beijing, Shanghai, Guangzhou, Shenzhen, and Hong Kong. It is tempting, but dangerous, to take this as an undiluted sign of economic health, as the Chinese Gulf Property

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national and regional governments are principal stakeholders in many of these projects, and the “cause and effect” of the situation is not always clear. Is the government subsidising tall buildings in order to attract businesses, and in anticipation of future masses, or are business and population needs organically driving growth?”, he asks. The 97 buildings completed in 2014 beat every previous year on record, including the previous record high of 81 completions in 2011.

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‘Wangjing SOHO’ is a skyscraper in Wangjing, a suburb of Beijing, China

The Philippines took second place with five completions, the UAE and Qatar share position three with four completions, and the United States, Japan, Indonesia and Canada tie for fourth, with three completions each. Japan marked its first entry into the supertall stakes with the completion of the 300meter Abeno Harukas in Osaka, becoming the country’s tallest building. A total of 11 supertalls (buildings of 300 meters or higher) completed in 2014 – the highest annual total on record. Since 2010, 46 su-

pertalls have been completed, representing 54 per cent of the supertalls that currently exist (85). The number of 200-meter-plus buildings in existence has hit 935, a 352 per cent increase from 2000, when only 266 existed. “This was the “tallest year ever” by another measure: The sum of heights of all 200-meter-plus buildings completed across the globe in 2014 was 23,333 meters – setting another all-time record and breaking 2011’s previous record of 19,852 meters,” the report said.

“2014 showed further shifts towards Asia, and also surprising developments in building functions and structural materials.” South America also welcomed its first supertall, the 300-meter Torre Costanera of Santiago, Chile, which was also the only building of 200 meters or greater to complete on the continent in 2014. Tianjin, China, was the city that completed the most 200meter-plus buildings, with six. Chongqing, Wuhan, and Wuxi, China, along with Doha, Qatar, all tied for sec-

Abenobashi Terminal Building is a multipurpose commercial facility in Abenosuji Itchome, Abeno-ku, Osaka, Japan. At 300 meters with 62 floors, is the tallest building in Japan

ond place with four completions each.

Middle East and Africa

The Middle East recorded 11 completions in 2014, or 11 per cent of the global total, down from a record 23 in 2011, or 28 per cent of the global total. “The typical leaders of the Middle Eastern pack, the UAE’s dueling municipalities Abu Dhabi and Dubai, flagged somewhat in 2014. Each had two completions,

including Abu Dhabi’s 381meter World Trade Center Abu Dhabi – The Residences, which was the second-tallest building to complete worldwide in 2014,” CTBUH report said. “The other building in the World Trade Center Abu Dhabi Complex to complete in 2014, the 278-meter World Trade Center Abu Dhabi – The Offices, entered the charts at number 17. The UAE’s two-year run of having three of the world’s five tallest buildings completed in a given year was broken in 2014 by the incursion of that

“other” World Trade Center in New York, and the persistence of construction in China. Qatar delivered four of the 11 completions in the Middle East, all of which were in Doha, and all of which were within one meters’ height of each other, just barely making the cutoff at 200 meters. Besides the World Trade Center - The Residences in Abu Dhabi, the other supertall to complete in the Middle East was in Riyadh, Saudi Arabia’s Burj Rafal, clocking in at 308 meters. Kuwait’s 240-meter Crystal Tower

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North America

This was a triumphant year for the United States, and particularly for New York. At 541 meters, One World Trade Center, New York, was the tallest building to complete in 2014 and is now the world’s third-tallest. The last time the United States completed a tallest building worldwide was in 2009, when Chicago’s 423meter Trump International Hotel & Tower debuted. Its 298-meter New York neighbour, 4 World Trade Center, also joined the ranks as the 12th-tallest building to complete in 2014. The completions of these two structures are important milestones in a long and often tortuous rebuilding process after the attacks of Sept. 11, 2001. Meanwhile, midtown New York marked the completion of One57, a 306-meter residential tower. All of these completions point toward a resurgent skyscraper city in New York.

South America

South America welcomed its first supertall, the Torre Costanera of Santiago, Chile, which was also the only building of 200 meters or greater to complete on the continent in 2014. In 2013, Panama City, technically in Central America, completed two buildings of 200 meters or greater, and in 2011 was the global record-holder, with 10 completions, but rested in 2014. The World’s 100 Tallest Buildings: Impact of 2014 In 2014, the number of buildings entering the World’s 100 Tallest list was 13, one more than in 2013. The shortest building on the Gulf Property

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100 Tallest list in 2013 was the Columbia Center, Seattle, at 284.4 meters. In 2014, the shortest building became the 291.6m SEG Plaza in Shenzhen, having moved down the rung from number 87 to number 100. The average height of buildings in the 100 Tallest list has thus increased to 350 meters in 2014 from 344 meters in 2013, the figure in 2000 was 285 meters. The number of office towers in the 100 Tallest ranking continues to decline, with 39 all-office buildings, down from 42 in 2013. In context,

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The Gran Torre Santiago is a 64-storey tall skyscraper in Santiago, Chile

as recently as 2000, 85 of the world’s 100 tallest buildings were office buildings. 39 buildings were composite construction, vs. 36 in 2013. Despite the somewhat surprising increase in 2014, all-steel continued its decline as a primary structural material, comprising only five of 2014’s completions and 13 of the world’s 100 tallest buildings in the rankings.

Completions by Function

The decline in the number of

all-office buildings completed in each successive year since 1970 appears to have reversed a little in 2014. In 2014, 47 all-office buildings of 200-plus meters’ height were completed, versus 23 in 2013. “The other major trend that would seem to justify further analysis is the increase in the number of office buildings, something that has not happened since the previous record year of 200-meterplus completions across the board that occurred in 2011. The use of all-steel structures also increased slightly,

which is counter to the overall trend of a steep decline since 2000. These 2014 figures are likely correlated,” said Daniel Safarik. “The reason most office skyscrapers were historically made of steel is due to the spanning capabilities that steel affords the large, column-free spaces office tenants desired. But in the past decade, the use of composite construction, such as outriggers, braced mega frames and concrete-encased steel – most often working in conjunction with a concrete core -- has risen with the increas-

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ing number of mixed-use buildings, and has provided the flexibility needed to accommodate all kinds of uses in one building. On its face, then, the small uptick in allsteel use this year seems somewhat anomalous.” The number, though not the proportion, of mixed-use buildings to complete in 2014 also increased, to 26 (27 per cent of the total), up from 22 (31 per cent of the total) in 2013. All-residential buildings made up 20 per cent of completions in 2014, at 19 total.

Materials

composition

A majority of 2014 completions used composite construction as the primary structural system – 52 out of 97 or 54 per cent, as compared to 24 out of 71 or 34 per cent in 2013. The number of buildings whose predominant structural material is concrete dropped to 38 per cent in 2014, from 61 per cent in 2013. All-steel continued its decline as a primary structural material, comprising only 5 per cent of 2014’s 200-

meter-plus completions and 13 per cent of the world’s 100 tallest buildings, though it showed a slight uptick from 3 per cent in 2013.

Thoughts on 2015

If anything, 2015 promises to be more active than 2014 and indeed, any year previous. We currently project the completion of between 105 and 130 buildings of 200 meters’ height or greater, eight to 15 of which will be supertalls, and one of which will be

a megatall – Shanghai Tower. Once again, China is expected to lead by a wide margin. China is on track to complete or top out 106 buildings of 200 meters or greater – that’s 86% of the low-range estimate (105) and 72% of the high end estimate (130). Here are some of the other developments we’ll be watching closely in 2015: New York: Construction of the B2 modular tower at Pacific Park, Brooklyn, stalled in September 2014 due to a legal dispute between contractor Skanska and develGulf Property

The Infinity Tower is a 249-metre skyscraper by Meriton recently constructed in Brisbane, Australia

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oper Forest City Ratner as the team struggled with a methodology custom-developed for the project. Dubai: The long-planned Burj 2020 is back in action, according to CTBUH insiders. In late 2014, shortlisted architecture engineering teams were being interviewed, making the claimed start of construction in 2015 seem plausible. If the 660meter tower’s developers want to keep its original plan to have the highest observation deck, it will have to top the Burj Khalifa’s 555.7meter perch. London: Late in 2014, the beleaguered Pinnacle, a

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mere “stump” since 2011 due to the recession, was promised another lease on life under PLP Architecture and new owners Axa / Lipton Rogers. By April, we expect to see revealed a “fundamental redesign” of the 64story tower, that provides a larger amount of public space, and will likely eliminate the spiralling shape that Londoners called “the Helter Skelter.” Jeddah: The 167-floor, 1,000-meter Kingdom Tower broke ground in June 2013 and reached up to ground level by late April 2014. The first 10 floors had risen by December 2014 – a rate

of about 1.25 floors per month. At that rate, by the end of 2015, the 25th floor should be completed. If the building is to complete on schedule in 2019, however, it will have to speed up. At the current pace, Kingdom would just make 85 floors by then. Las Vegas: The erstwhile Harmon Hotel, a planned 47story building, was stopped in 2008, having completed only 26 stories, after it was determined to be structurally unsound due to construction defects. The deconstruction began in June of 2014, and should complete in June 2015. The traditional Vegasstyle implosion was es-

chewed due to its proximity to the surrounding $8.5 billion CityCenter. Shanghai: The 632-meter Shanghai Tower will complete in the first half of the year, becoming the tallest building in China and the world’s second-tallest building. The project is also highly anticipated due to its extensive use of double-skin façades and skygardens. Shenzhen: The 660-meter Ping An Finance Center, set to become China’s tallest, and the world’s secondtallest building on completion in 2016, will likely “top out” at its ultimate height by mid2015, our inside sources say.

TALLTOWERS World Trade Centre Abu Dhabi – the tallest tower in Abu Dhabi was completed in 2014. At 381 metres, it equals the height of New York City’s Empire State Building – once the tallest tower on Earth

The construction schedule has remained largely intact, in spite of the unexpected delays, such as a 2013 investigation into possible inferior concrete in its supply chain. Moscow: The burgeoning Moscow-City complex has begun to pick up pace, after the several economy-related delays that happened over a period of time and not to mention, at least one fire incident. The Vostok Tower, at 373 meters, the higher of the two Federation Towers, will also become the tallest building in Europe, once after it is constructed. g

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INTERVIEW

Select Property’s Vita Student a hit in UK, GCC

By Indrajit Sen Senior Reporter

ew real estate companies have such a fine diversified business strategy as Select Property. The company is equally focussed on trading in properties in both the UK, its home market, and in Dubai, besides also covering the CIS countries. Select

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Property is hence reaping the benefits of selling unique projects, such as student properties, in the UK, and of selling luxury properties in Dubai Marina. Adam Price, Managing Director Middle East, says Select Property is still a UK-leaning realtor as more than half of the revenues are generated from trading at home. However, he reveals that the firm has “a nice blend of UK and Dubai prod-

ucts. The UK products are giving us more stability because that is a market which has been established since hundreds of years.” Even if one were to consider nationalities, Select Property’s major buyers happen to be Saudis, Kuwaitis and Russians; and the firm’s plush office in the upscale Dubai Marina is testimony of the fact that they are strengthening their overseas business by catering to many national-

ities from Dubai. “We are not kind of a property shop, we don’t want to do that,” Price explains. “What we do is two-fold: One, we have a strong presence in Dubai Marina; that’s our bread and butter really which is reselling our clients’ property off-plan. That’s how our business has grown, in fact 50% of it. The second area we specialise in is development of luxury brands in the UK.”

Emphasis on student housing

In 2011, Select Property took up a project in a segment of the UK market, which was untouched, yet had very high demand: Student Property. Price explains: “If you look at typical student accommodation in the UK, it is of very poor quality. Most places where students live are out of town and they appear like rows of industrial house. Typically up to five people will share one space, making it cramped up. So we acknowledged the fact that there is a real undersupply in this sector. And if you couple that with the fact that the number of international students is rising every year, there is a massive opportunity for investors.” Select Property therefore launched its flagship product on student property named ‘Vita Student’. So far, the company has launched 9 projects under the Vita Student brand; 3 in Liverpool and one each in Manchester, Bristol, Southampton, Exeter, Sheffield and the latest launch in Westgate, Newcastle. Of these 9 projects, 6 have already been handed over and they are all enjoying 100% occupancy. The remaining three are set to be handed over in 2015-16. So what is in it for investors, how much will be the returns? Price says Select Property is offering a unique model whereby the buyer is guaranteed a fixed return. “We guarantee investors a net return of 7% after operating costs. How we do that: We have the Select Property group as the umbrella, and below that you have the ‘Vita Student’ brand. It is a vertically inte-

INTERVIEW Select Property selling projects on behalf of their partners in Dubai Marina

grated company; so below the development arm you have the sales arm, then the marketing arm, followed by the rentals and property management arm. It is all done in-house. We fully manage the project, so if you buy one of our student properties, effectively we lease it back from you and we manage that for 5 years. And that’s how we guarantee the 7% return. Because if we have total control of that we can ensure that the quality is maintained. We can also ensure that the rentals have 100% occupancy,” Price elaborates. He further explains: “What we also say is 7% is the minimum return. If we achieve more than 7%, we give this to the investor. It is a nice model, it works well.” The Vita Student brand has become quite popular and has earned healthy revenues for Select Property. The company has sold around 1,300 Vita Student units in 3 years. Out of the 9 projects, 8 are

now sold, with the latest launch in Westgate, Newcastle also being 80% sold. With regards to the breakup of the sales pie, Price says Europe accounts for 50%, 25% to the Far East and 25% to the GCC. “A lot of our buyers are from the GCC, from Kuwait, the UAE, Saudi Arabia, and the CIS countries (mainly Russia). These are our main markets,” he mentions. According to Price, the concept has been well received in the GCC, from where a lot of students migrate each year to the UK for higher studies. Select Property has been engaged in marketing activities in Kuwait and Saudi Arabia, where they recently organised around 3 to 4 promotional shows for properties in the United Kingdom. The strategy seemed to have worked well for the company, as in Kuwait alone it sold 100 units. The fantastic sales response has encouraged Select Property to

open up a small office in Kuwait by Q2 2015 to ‘explore the market further’, Price reveals. He is hopeful of a similar response in Riyadh. So what success mantra has Select Property adopted for the GCC? “We have our distribution channels in the GCC. So we have an office here in Dubai Marina, an office in Manchester, London, Toronto and a satellite office in Singapore. And now we are also operating in Kuwait and Riyadh. We want to be sure that when we roll out a product it reaches all our customers. So it is nice for us because it reduces the risk of reliance on the market.” So how has the response been for Vita Student in Dubai? “It has been very good. With regards to GCC, a lot of our buyers in Dubai aren’t just from Dubai alone; they come from Moscow, Riyadh, Kuwait or Bahrain. So locally it has been very well accepted. So between March 2013 and now, we Gulf Property

INTERVIEW “In Dubai, the property market has been apparent only since the rules were relaxed in 2001. I do believe that the Dubai Land Department has put in the required mechanisms in place now to increase stability. It has reduced speculation. There is good regulation now on the off-plan projects which limit investors selling until they have paid up to 50% of the price.I have full confidence in the Government of Dubai that they will ensure that the right mechanisms are in place, to ensure stability.”

- Adam Price, Managing Director-Middle East, Select Property

have sold just under 150 Vita units in Dubai, which I think is a pleasing number,” Price smiles out of satisfaction.

City Suites: A unique idea

Select Property doesn’t seem to be contended with their success with Vita Students. Parallel to developing the vita Student brand, they are working on another unique concept, a luxury residential project called ‘City Suites’. Price explains the idea behind it: “It is a concept that has been developed basically after looking at the gap in the market. If you look at a young professional travelling on business, who wants to stay in a 5-star hotel but also wants the benefits of a serviced-apartment, City Suites offers him that. It combines the best parts of a 5-star

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hotel and a serviced apartment. This means you will have concierge, 24 hour-security, gym, pool, and a very nice living space. But it won’t be just like a hotel room, because you will have a separate kitchen, a dining space and the bed separate from the other areas.” But isn’t there enough of such projects/units in Dubai? Price disagrees saying, “The reason why we are going after this project is because we feel in Dubai there is nothing that matches this. There are a lot of hotels and serviced apartments, but there isn’t a concept like City Suites.” Select Property is presently working on its first City Suite project in a central location of Manchester. However, they have begun marketing the project in the United Kingdom and in Dubai recently and have already sold 34 units so far.

A busy year ahead

The year 2015 will keep Select Property ‘really busy’ with a lot of projects, Price says. The company has land banks in the UK on which they have plans for developing three or four more Vita Student projects in Glasgow, York, Manchester and one in Dubai, also potentially one in Toronto, Canada. “In terms of Vita Students, that will keep us occupied for the next 24 months”, he says. Besides, the realtor is trying to develop a City Suite project in Dubai, for which they are looking at purchasing a plot of land in Dubai Media City. Price feels there has been a resurgence of the primary locations in Dubai over the past two to three years. So Dubai Marina, Downtown and the Palm Jumeirah are currently the

hotspots. “I think what is becoming more evident now is that there are certain areas, where the price per square foot represents good value for money. For example the Jumeirah Village Circle (JVC) or Jumeirah Village Triangle (JVT), these are the secondary/tertiary locations which are becoming more and more popular for investors now. We are actually looking at doing a City Suites in the JVC area, because we think once the development and landscaping of the area is completed, it will become a very popular area,” Price states. Price also talked about another classic resort project Select Property is jointly developing with partner Select Group in the emirate of Ras Al Khaimah called ‘Pacific’. The project is on a sea horse-shaped man-made island called Al Marjan Island. “It basically is RAK’s version

of the Palm Jumeirah. We have 1,400 units being developed on this island. The projects is approximately 75% sold, because the market in RAK is quite vibrant. So we are going to re-launch the project in Q1 2015. We have around 250 units remaining and we will go to market with that at a rate of Dh1,000 to 1,200/ square feet,” he mentions. “So quite honestly we are busy right now. We have the Dubai Marina sales (that they are doing for their partner Select Group), the Vita Student and the City Suites,” he gasps.

Predictions about Dubai market

Price seems to have good faith in the Dubai real estate market and he sees it performing quite well in the days to come, as there are geopolitical factors that are having an impact on the market. “I think from the strong fundamentals you have here, there is no doubt that is a becoming a popular investment destination on a global scale. I think the medium to longterm prospects are very good. I think it is a safe haven in the Middle East and because of political disturbances in the region, we have seen a lot of investments from Syria and Egypt in Dubai in the past 12 to 24 months.” However, there have been reports in the news media about the market softening and the sales volumes for residential and commercial units going down significantly. Price believes there is no reason to be alarmed. “I think with the EXPO 2020 in the not too distant future, this kind of price correction to the

tune of just 2 to 4% over the past 6 months, is only temporary. I think there are more and more investments coming in. With the world-class infrastructure in place, with EXPO 2020 and with the desire of the government to really establish Dubai as the No.1 tourist destination of the world, the market can only go from strength to strength,” he assures. Much has been talked about the difference between the property markets in London and Dubai. Most realtors and brokers from the UK doing business here tell you that the London market is mature and that Dubai is not. While property transactions in London happen after the buyer has made a well-researched decision to invest, property trading in Dubai was fuelled mostly by speculation up until the recent past, the popular word is. Price carefully distinguishes the two markets: “The London market will always be popular. So if you look at the prices, they are quite high, whereas the yields are quite low. There is no doubt that it is an established market, it has had fantastic capital appreciation over the past two and a half years; I think it was 13% last year (2013). But now there will be a slowdown in London. That is because if you look at the demographics, there are a lot of Russian investors in London now who are looking to sell their property there, due to the falling value of the Rouble (Russian currency).” “In Dubai, the property market has been apparent only since the rules were relaxed in 2001. Yes it is a relatively immature market. However I do believe that the Dubai Land Department has put in the required mecha-

INTERVIEW The gap in the real estate market in Dubai presents a great opportunity for developers to offer affordable housing in the secondary and tertiary markets

nisms in place now to increase stability. It has reduced speculation. I think there is good regulation now on the off-plan projects which limit investors selling until they have paid up to 50% of the price. I have full confidence in the Government of Dubai that they will ensure that the right mechanisms are in place, to ensure that stability prevails.” Mid and low-income groups in the UAE are expanding and will continue to expand, given the steady flow of expatriate workers. These groups comprise people who will naturally invest in low-cost housing projects. Thus affordable housing has gained immense importance and popularity in the UAE, and builders developing lowcost projects have also earned healthy profits from them. Considering the changing dynamics of Dubai/UAE’s property mar-

ket are developers only focussing on luxury projects or are they also building affordable projects? “There is an emerging middle class here in Dubai and not everyone can afford to live in Dubai Marina or the Palm or Downtown,” Price frankly says. He thinks there is a real gap in the market and it presents a great opportunity for developers to offer affordable housing in the secondary and tertiary markets. Price feels, “If you look at the bigger developers out there, like Emaar and Damac, they too are focussing on the secondary locations. Like I said, there is an emergence of a middle class or mid income segment. For developers there is gain in developing a high quality product in secondary locations and selling that at a realistic price, which pleases them and the buyer. g Gulf Property

INTERVIEW An artist’s impression of the main lobby in Hyatt Regency Creek Heights

Hyatt Regency promises unrivalled luxury, service

By Paromita Dey Senior Reporter

henever we think of a luxury stay, fantastic service and mouth-watering cuisines, the first name that comes to our mind is Hyatt. Few hotels can match up to the quality that Hyatt offers its customers, and this is one thing that even Mathieu Greppo, General Manager,

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Hyatt Regency Dubai Creek Heights, told me, when I went for a hard hat tour of the hotel, developed by wasl. Situated in a prime location on the Dubai Creek, the hotel is just 10 minutes from both the old areas of the city and from its more modern Downtown, Burj Khalifa, and the Dubai International Financial Centre (DIFC). It is also very close to Dubai International Airport and the Creek Park. As the hotel was gearing up for its launch on March 1, 2015, we stood in the lobby, which will also be serving as

the reception desk, Greppo explained that the one of the main USPs of the lobby would be the green areas. “One of the main attractions of the hotel are the green walls all around. Our guests should have a piece of nature along with them everywhere.” As the tour proceeded, I was greeted with warm smiles from the housekeeping staff, proof of the kind of service that Greppo is very proud of. “Service is the main point for us. Dubai is a very competitive market, every-

body is targeting more or less the same clients. So to make a difference, we need to nail the service.”

Luxury that will pamper guests

The 5-star hotel boasts of 443 premium rooms and facilities that include four restaurants, two lounges, a spa, three gyms, one of which is female only, and two pools. As soon as we enter the king-size standard room, it offered everything a guest

would want from a 5-star hotel stay. An impeccablydecorated, spacious bathroom, a large double bed, with a view of the scenic Creek Park, gave a real sense of the luxury associated with the ‘Hyatt’ brand. Features such as huge windows and 52-inch LED TVs adorned by art deco wall lamps, create a relaxing and interesting atmosphere. “We have 252 king-size rooms, out of which are 100 standard rooms. Average room rates depend on the seasons; during summer, the rates will be attractive due to our summer promotions,” he said. The next stop of the tour was the deluxe king rooms, an area ranging from 42 square meters to 68 square meters. The larger bedroom offer a beautiful view of the Burj Khalifa and a panoramic view of the city. Next in line came an array of suites, all suited to match the tastes of the luxury-lover. Greppo mentioned that the hotel will have 76 suites, ranging from 78 square metres to 1200 square metres. As we checked into the ‘regency suite’, which covered about 81 square metres, the first thing that I noticed was the bedroom area. Greppo explained: “Previously the trend was having a large bathroom and smaller bedrooms and living rooms, but now the trend has changed to smaller bathrooms and larger bedrooms. We are being quite generous with the bedroom area.” Greppo also pointed out to me the media hub, a feature present in all the rooms. “One of the feature of our rooms is the media hub where you can connect your USBs, iPods, iPhones, smartphones tablets, laptops and Bluetooth devices and

INTERVIEW An artist’s impression of a bedroom in Hyatt Regency Creek Heights

access it through the TV,” he said. And being a music lover myself, I really appreciated it! Another highlight was that all the suites were connected to a twin room, and as per Greppo, a one bedroom suite will become a two bedroom suite and a two bedroom suite will become a three bedroom suite. Further ahead on the tour, we had a walk around the ‘emerald suite’, ranging from 112 square metres to 130 square metres, and the ‘prince suite’ ranging from 150 square metres to 193

square metres. The hotel will have 2 ‘royal suites’, starting from 1200 square metres on floors 33, 34 and 35. “The royal suites will occupy the whole floor and will have an outdoor terrace, offering a 360-degree view of the entire city,” said Greppo. Corporate clients will be in for a treat, since they are the hotel’s target clients. But Greppo mentions, “Everyone will be our target clients. Of course we will also have the leisure business, but the bulk will come from corporate and meetings, incentives, confer-

ences and (MICE).”

exhibitions

A realm of comfort

Then, down the elevator, we reach the second floor, an area as huge as 220,000 square metres, and wholly dedicated to fitness and wellbeing. The hotel has a spa, a thermal zone and 2 pools, one of which will be a kids pool, an ‘infinity pool’ and also a pool bar. All of it will have specialised and dediGulf Property

INTERVIEW

“Service is the main point for us in Hyatt. Dubai is a very competitive market for hospitality, everybody is targeting more or less the same clients. So to make a difference, we need to nail the service. There is still place for improvement when it comes to service. The pace with which the hospitality sector is growing, is quite fast. However, there is a lack of qualified manpower in the market, and it is very difficult to find adequate manpower. But we are trying our best to look into different ways of hiring people.” -- Mathieu Greppo, General Manager, Hyatt Regency Creek Heights

cated staff. The female only gym comes along with the steam room, the sauna, a female only lounge and an amazing view of the Creek Park. What a great way to lose some calories! Next I was escorted to the ‘thermal zone’, which turned out to be an absolute delight. There are 3 different types of plunge pools: Vitality pool, tepidarium (warm bath) and frigidarium (cold bath), all set at different temperatures. Then the next stop was the ‘mud room’. Greppo said that the mud will be coming from the Dead Sea, known worldwide for improving skin's natural processes, easing rheumatic pains, relaxing muscles and providing inner calmness. The ‘ice fountain’ was an-

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other addition, where guests can take the joy of applying crushed ice all over their body as a part of a treatment. “The hammam experience with us is quite a unique one, the scrub room offering various treatments. As a female, you will have all the amazing facilities. These things are also there for the males, but at different timings,” mentioned Greppo. The hotel will have a unisex beauty salon, covering 160 square metres. There will be 8 treatment rooms, out of which 2 rooms will be for couples, and 6 rooms for singles. The treatment rooms will have ample natural daylight for the clients to enjoy the massage and Jacuzzi. “An average of 1.5 employees will be dedicated to each

room. More than 60 nationalities will be employed in the hotel,” he said. Retail will also form a main component of the hotel. The management is currently reviewing different options, and something not there in Dubai as of yet, is soon going to be there in the neighbourhood, Greppo revealed. However, all these exquisite facilities made me think how a mid-income person could even think of affording a standard room in this luxury hotel? Greppo allayed my concern by stating that luxury can also come at affordable prices. “It is undoubtedly a luxury hotel, but it also offers a good value for money. I believe that it is always possible to experience luxury in an affordable way.”

Satiate the taste buds

Next came the most important part of my tour, the dining experience. The hotel will comprise 4 restaurants: ‘Market24’, open 24 hours, ‘Sufra’, which will also remain open all day, third a Mexican restaurant, which will open in May or June and fourth, a gastro pub opening in the last quarter of 2015. “We want to go slowly, every outlet that we open, we want to open it in the best way. We are trying to hire qualified staff for our restaurants, we will have a training centre for the staff, and based on the training, we will be allocating the staff to a particular restaurant. The Mexican

INTERVIEW An artist’s impression of ‘Sufra’, an all day dining restaurant, in Hyatt Regency Creek Heights

restaurant will open with Mexican crew. Our main idea is that everything remains authentic and uncomplicated so that we can retain the customer,” said Greppo. As the tour was coming to an end, I was quite intrigued by the long-standing relationship between wasl and Hyatt. Greppo mentioned that the two organisations have done business for more than 30 years now, and naturally, both the parties completely trust each other. “Wasl is always quite glad to be associated with Hyatt. We have been in business with them for more than 30 years. There is a big trust since the first hotel came up in Deira in the late 70’s, as wasl is committed to develop more and more properties and hotels

before Expo 2020. I think it is a natural decision to go ahead and associate this tower with Hyatt.” He also expects that both parties work on more such ventures in the future. “There is more to come. It’s coming up soon.” Later, we stood in the lobby, from where I began the tour, discussing about the current scenario of the hospitality market in Dubai. Greppo, without any hesitation, said that the hospitality market in Dubai is dynamic and competitive. He compared Dubai with Europe and mentioned that Dubai is going through the same process that Europe went through many years ago, with regards to hospitality. “The amount of inbound pas-

sengers coming to Dubai has increased, so there is a fair share of customers for every hotel to take in. Competition is very healthy, we are very happy to compete with other hotels.” But he also adds that there is still place for improvement when it comes to service. “The pace with which the hospitality sector is growing, is quite fast. A lot of hotels opening up before Expo 2020. However, there is a lack of qualified manpower in the market, and it is very difficult to find adequate manpower. But we are trying our best to look into different ways of hiring people.” I was also informed that the management is very selective about their future strategy, as they do not want to

launch everything together. “We want to go slowly and gradually. So we want to make sure that the first phase that we are opening in March, starts running smoothly before we open up our second phase,” Greppo mentioned. He also added that there will be another Hyatt Place opening in Baniyas Street soon, with more others to follow. As I was escorted outside, through the partially constructed entrance, I was extremely confident of the fact that another good, affordable and luxury hotel by Hyatt was about to open. For those connoisseurs who have already witnessed the service of Hyatt’s existing hotels in Dubai, they are surely in for another grand treat. g Gulf Property

INTERVIEW

Jericho Gate: A leisure zone for Palestinians

By Indrajit Sen Senior Reporter

developer in the West Bank is offering to Palestinians a leisure destination, where they can not only have fun, but can also choose to live. Located deep into the Palestinian heartland, where the clouds of conflict with Israel do not loom, ‘Jericho Gate’ is an unprecedented residential cum tourism project that comprises entertainment facilities including villas, hotels, resorts, a sports city, amusement and water parks and shopping malls, among others. Jericho Gate is a collaborative venture between leading Palestinian real estate devel-

Gulf Property

opers PADICO Holding and PRICO, and tourism company PALTEL. For more than two decades, these trusted names built the Palestinian economy through strategic investments in key sectors guided by a far-reaching vision for growth and sustainability. Besides offering a leisure destination to funstarved Palestinians, the developers of Jericho Gate also hope to boost the economy through job creation and expansion of infrastructure. In an exclusive interview with Gulf Property, Dr. Samir Hulileh, CEO of Padico Holding reveals details about the project, the importance of Jericho and how he hopes Jericho Gate will change lives:

Gulf Property: Please give me a brief overview of your

company. Samir Hulileh: Jericho Gate Company was established in 2011 by PADICO Holding and PALTEL with an initial capital of JOD35 million. The Jericho Gate project is being developed on a 3,000 dunum (300 hectares) plot of land bordering the city of Jericho. The land has been acquired to construct a mix of residential villas, commercial real estate areas, recreational and sports attractions, lakes and gardens.

How big is the workforce? Do you operate just from Ramallah or do you have branches; if yes where? Through our stakeholders, we have solid representation networking channels in Jordan and Palestine. Our company is a projects’ company

owned by PADICO Holding & PALTEL.

‘Jericho Gate’ is not just a real estate project but a planned city, with special amenities. Can you elaborate on the salient features of this project? The project will consist of a group of zones. Reference will be made to the unique architecture of the area in the design of the project. The zones will include: a) Residential Zone - Approximately 1,500 villas to be built in phases. Villas will range between 2 to 4 bedrooms. The residential zone will have communal space (mini entertainment and recreation zone for residents) such as a market, multiple green spaces, and communal spaces for kids’ activities.

INTERVIEW “The entertainment feature in Jericho Gate is a Unique Selling Point (USP) for our investment, as Jericho and Palestine in general are underserved in the entertainment and leisure sector. There is a strong local demand for active leisure facilities.”

-- Dr Samir Hulileh, Chief Executive Officer, Padico Holding

b) Touristic Zone - A cluster of four different hotels ranging from pilgrim budget hotels, 3 stars and 4 stars accommodation, a chalet community will all be included in this zone to cater towards the tourism sector. c) Cultural Zone - It will be the focal point of the project. It includes a museum, gallery and fountain like public spacing. Art activities will cover painting, sculpting, photography classes, embroidery, weaving and other artistic related activities. Guest artists will offer workshops on periodic basis. Sound and light will also be part of this zone, along with other performances at the amphitheatre. d) Retail and Entertainment Zone – This will include the souk, retail market centre, restaurants, an artificial lake and waterfront land. The concept is to have a walkway area around the lake and restaurants. The restaurants will embrace the walkway around the lake. The souk and market centre will be an indoor/outdoor piazza. e) Nature Zone – This will focus on nature parks, spa and Bedouin tents. f) Recreation Zone – It will be the centre of activities and sports. It will include a diverse arena, water Park, kart

racing, cabanas and barbecue areas. A variety of activities will be offered such as hiking, horseback riding, camel trekking.

For developing a mix-used community of this magnitude, it is obvious that huge amount of money has been invested. So what is the total value of investment for this project? What has been the source of finances? Has Jericho Gate taken a bank loan? Our company will invest around US$150 million in building the infrastructure. However, more developers will be welcomed to invest in the project, reaching a total of US$2.5-3 billion.

What is the pricing structure of housing units in Jericho Gate? How would you rate living in Jericho Gate as: Affordable or expensive? Residential Homes in Jericho Gate is rated as affordable luxury. Prices typically can range from US$85,000 – 220,000 for housing in Jericho Gate, depending upon its size and amenities which are included within the villas. Which hotel, retail and cin-

ema unit will Jericho Gate house? Sales for retail investment opportunities in Jericho Gate have just recently opened. We have received several portfolios of interested investor candidates and are seeking more. For those who are interested, they can directly contact our offices and they can set a meeting with our sales team accordingly.

The entertainment arenas at Jericho Gate is a rare development in Palestine. Kindly elaborate on this feature of the project. How popular do you think the waterpark, museum, etc will be? The entertainment feature in Jericho Gate is a Unique Selling Point (USP) for our investment, as Jericho and Palestine in general are underserved in the entertainment and leisure sector. There is a strong local demand for active leisure facilities, and most outdoor entertainment activities require large flat land which is both available and inexpensive in Jericho Gate. In addition, the temperate climate in Jericho year-round encourages entertainment activities specially those outdoor (such as the water park).

Has construction begun on the project? When do you expect to finish and hand over possession of the residential units to the buyers/investors? When will the entertainment zone be ready for visitors? This vision is becoming a reality. The company has finalised the concept design and the master plan for the land. We have started working on the infrastructure. Jericho Gate is attracting investors to be part of the project’s spirit of a glorious past and a brighter future.

What is your marketing strategy for the project in the UAE and other GCC countries? How has been the response so far? Are investors from Dubai and the GCC pooling money in from Jericho Gate? We are targeting local and international investors and our invitation to come and invest in Jericho Gate has had a great response from several GCC investors, especially Palestinian expats investors.

Are you receiving support from the Palestinian government for Jericho Gate? The project is located in area A and it has the assistance of local authorities. g Gulf Property

Reef Residence: First high-rise tower in JVC PROJECTUPDATE

Gulf Property Exclusive

eef Real Estate, one of Dubai’s prominent private developers recently announced the launch of Reef Residence, one of the first high-rise residential development in Jumeirah Village Circle (JVC). The 38-storey tower will be located on the periphery of the master community, adjacent to the Els Club Golf

Gulf Property

An artist’s impression of the exterior view of ‘Reef Residence’ in Jumeirah Village Circle

Course at Dubai Sports City. The tower comprises 378 homes, a combination of studio, 1 and 2 bedroom apartments in addition to 7 retail units, that face the Sheikh Mohammed Bin Zayed Road. Lifestyle amenities include a large, landscaped leisure deck with BBQ areas, a playground, 2 swimming pools and a state-of-the-art gym. The project will be strategically located within the proximity of key attractions and destinations in addition to being within less than 25

minutes to both the Dubai International Airport and Al Maktoum International Airport. Nearby, major shopping malls are being developed by Majid Al Futtaim and Nakheel. “The growing demand for good quality, affordable residential properties in Dubai is what prompted us to conceptualise Reef Residence,”said Ahmed Al Mansoori, CEO, Reef Real Estate. “The tower is designed with the up-andcoming address in Dubai in mind and will appeal to investors from around the

world looking for a stable investment.” The company claims that the building itself will be modern and elegantly understated, efficiently designed to make sure the space is maximised and well laid out so that one can benefit from the optimal amount of natural light. The full height glazing and a clear ceiling height of 3.1 metres means the views are expansive and most units have outdoor terraces. “At Reef, we are committed to the realisation of well-considered, solid, dependable

Reef Residence is a well-priced project: CEO

An artist’s impression of the living room in Reef Residence

Paromita Dey Senior Reporter

investments. Never satisfied with our achievements, Reef Real Estate is now entering a new era, further raising our standards and pushing the boundaries of what we plan, design and deliver at various price points for investors and end-users alike,” Mansoori commented. The tentative date for completion of the project is Q4 2016. Engineering consultants for the project is National Engineering Bureau, and project management consultants is ARCAN. The project’s main contractor is Gulf Technical Construction Company, a subsidiary of Drake & Scull International PJSC. The project’s sales agent is Asteco and the project is financed by the Abu Dhabi Commercial Bank (ADCB). “Whether it’s the location, design, facilities, apartment layouts, construction standards, or the affordability, all of these aspects contribute to the project being a solid investment of the calibre Reef

is respected for,” added Mansoori. Reef Real Estate is a UAEbased company started in 2004 with a diverse range of activities including real estate, investment, property management and property development. Reef’s portfolio of completed projects includes the Madina Tower, a 33-storey residential project and the Reef Tower office building in Jumeirah Lake Towers (JLT), along with Crystal Towers in Business Bay. “Our 3 existing towers, Reef Tower and Madina Tower in JLT and Crystal Tower on Sheikh Zayed Road are a testament to our constant endeavour to deliver exceptional construction standards and it’s the success of these projects that have defined us to date,” said Mansoori. Madina Tower is a 33storey building offering 1, 2 and 3 bedroom apartments in Jumeirah Lake Towers. It is directly opposite Dubai

eveloper Reef Real Estate recently announced their ambitious project ‘Reef Residence’ in Jumeirah Village Circle. By launching this 38storey tower, the developer aims to fulfill the growing demand for good quality, affordable housing in Dubai. In an exclusive interview with Gulf Property, Ahmed Al Mansoori, CEO of Reef Real Estate talks about the project and their future endeavours. Excerpts:

Gulf Property: You have termed ‘Reef Residence’ as an affordable housing project. How well do you think the market will respond to it? Ahmed Al Mansoori: We believe the market shall respond exceptionally well to the project as we have al-

Marina and adjacent to Jumeirah Islands. Reef Tower is a commercial free hold property, located at Gate No.2 in JLT, between the Interchanges 5 & 6 of Sheikh Zayed Road. It is directly opposite Dubai Marina and adjacent to Jumeirah Islands. The 32storey tower comprises ample parking of 3 levels below the ground level, The Gym, The Salons, The café & The Spa. Crystal Tower is a 30storey building with 5 levels of basement parking and fa-

PROJECTUPDATE ready received great interest in the project since we first showcased it at Cityscape Global, Dubai in September, 2014.

What is your source of finance? Any land banks that you are currently having in UAE? The project is being financed by Abu Dhabi Commercial Bank (ADCB). We do have sufficient land bank in different strategically chosen areas of Dubai.

Do you think it is the correct time to announce a new project, when the sales volumes have been going down and the market has softened? This is a well-priced project in a sought after master community development by a developer with a proven track record and, therefore, shall always attract buyers.

What is the company’s strategy for 2015? Any other projects in the pipeline? We will be considering developing another project and when the time is right we will notify the market of the details. g cilities of coffee shop, restaurants, health club and business centre, retail shops, swimming pools, out door restaurants and café. Lately, big developers in Dubai have been coming up with the sales launch for their off-plan projects, Danube being the first in line to launch ‘Glitz’ in Dubai Studio City and now Reef Real Estate launching ‘Reef Residence’. This has shown growing investor confidence in the market, despite the popular notion of the Dubai market softening. g Gulf Property

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SPOTLIGHT

DP receives award at London forum

eading real estate developer Dubai Properties (DP) has been granted the ‘Best Commercial Real Estate Developer in the UAE’ award during the 11th International Real Estate Forum (IREF) Gala Dinner Awards, on December 16, 2014, at Jumeirah Carlton Tower, Knightsbridge, London. Abdullah Abushabieb, Senior Executive Director of Sales and Customer Service at DP accepted the award on behalf of the company, during the ceremony attended by representatives of major real estate, financial and corporate institutions from across the world. Commenting on the news, Abushabieb said, “Receiving the award for Best Commercial Real Estate Devel-

oper is a great privilege for DP. We are honoured to be recognised by such a reputable and leading institution

benchmarking us against some of the top global real estate companies.” “On behalf of DP, I would

like to express my gratitude to the organisers of this event, as well as the judges who have trusted DP’s capabilities in delivering world class developments and commercial solutions. We will continue working hard to serve Dubai’s real estate industry in the best way possible,” he added. IREF is a leading conference brand in the real estate and related financial services industry specialising in the latest developments in both conventional and Islamic real estate and financing products. DP overseas a varied development portfolio of residential, commercial, retail and hospitality projects across Dubai, creating opportunities for real estate investors and residents. g

maar Hospitality Group, the hospitality and leisure subsidiary of Emaar Properties, has officially opened the doors of ‘Manzil Downtown Dubai’, a new upscale lifestyle boutique hotel that celebrates the warmth of Arabian hospitality in a culturally stimulating, techsavvy setting. Managed by Vida Hotels and Resorts, the lifestyle hotel brand for new generation business executives, entrepreneurs and leisure travellers, Manzil Downtown Dubai defines a distinctive niche in Dubai’s hospitality sector by serving as an in-

ternational referral point for an ever-evolving and authentic Arab hospitality experience. Manzil Downtown Dubai is located centrally on Mo-

hammed Bin Rashid Boulevard, the thoroughfare in Emaar’s mega-development, which is described as ‘The Centre of Now.’ Overlooking Souk Al Bahar, the

hotel is in walking distance to Burj Khalifa, the world’s tallest building, and The Dubai Mall, the world’s largest retail and entertainment destination. g

Emaar launches Arabic theme hotel

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Gulf Property

80-82 Spotlight_Layout 1 01/02/2015 14:17 Page 2

The Gate Towers by Aldar in Abu Dhabi

Aldar awarded ‘Business Finance Team of the Year 2014’ by ICAEW

ldar Properties, Abu Dhabi's leading listed property development, investment and management company, announced that its finance team has been named ‘Business Finance Team of the Year 2014’ at the fourth annual Institute of Chartered Accountants in England and Wales (ICAEW) Middle East Accountancy & Finance Excellence Awards 2014. The awards ceremony took place on December 10, 2014 in Dubai under the patronage of HE Sheikh Nahyan bin Mubarak Al

SPOTLIGHT Nahyan, Minister of Culture, Youth and Community Development for UAE This is the second award that the Aldar finance team has won in 2014. In October, they were also named ‘Finance Team of the Year 2014’ at the 8th Annual MENA CFO Strategies Forum. Mohammed Al Mubarak, Chief Executive Officer at Aldar Properties, said, “These awards are testament to the high performance culture that we have instilled at Aldar and the solid team that was formed following the merger. Since that time, our finance team has worked hard to establish an effective operating platform that directly benefit our shareholders.” In 2014, Aldar delivered a number of key and successful projects, including The Gate Towers and Yas Mall in Abu Dhabi. g

SPF Realty wins Property Awards

PF Realty, the leading real estate broker in the UAE’s freehold property sector, has won the International Property Awards 2014 in three categories in the Arabian region. The three categories include, firstly Highly commended Real Estate Agency, Highly commended Real Estate Agency Marketing (for Grand Views – Meydan) and Highly commended Real Estate Agency Website. The International Property Awards are open to residential and commercial property business from around the globe. They celebrate the highest levels of achievement

by companies operating in all sectors of the property and real estate industry. Mahendra Pratap Singh, Managing Director of SPF Realty, commented, “We are extremely pleased to receive the prestigious International Property Awards, which is a world-renowned mark of excellence. These three awards acknowledge our reputation as one of the most reliable realty service providers in the regional market. It reflects the strong growth that SPF Realty showcased in the market, driven by our projects of unparalleled quality and value for the investors’ money.” Singh emphasized that the

Mahendra Pratap Singh

success of his company lies in its teamwork, “This is a reflection of the trust of the investors and developers in our service standards. It is the collective effort of the SPF

team. We offer our clients a complete and customized service advisory package that assures appreciation and return on investment, the company said in a statement.” The Dubai-headquartered SPF Realty offers solutions to all property-related requirements. The company mainly focuses on real estate sale brokerage and real estate lease brokerage services. gies targeting investors from across the world. The company has always been a winner of several awards and recognitions for its achievements and services in the region’s real estate sector. g Gulf Property

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SPOTLIGHT

Developers offer great support to UAE #ShowCompassion campaign

AE real estate developers donated large sums of money to the UAE Show Compassion (Tarahamu) campaign, to support thousands of refugees hit by the ‘Huda’ snow storm in the Levant region. DAMAC Properties donated Dh1 million to the campaign, whereas Nakheel joined the campaign with a donation for Dh2 million to the UAE Red Crescent. The UAE Show Compassion campaign, an initiative of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, has raised more than Dh208 million since it was launched earlier in January. These funds are assisting

Abdulla Ali Bin Zayed (centre), Managing Director, Nakheel Corporate Services presents the donation to the UAE Red Crescent

refugees and others in the Levant and helping them to survive extreme and harsh winter conditions.

Hussain Sajwani (left), Chairman of Damac donating to the UAE Red Crescent

Gulf Property

Abdulla Ali Bin Zayed, Managing Director, Nakheel Corporate Services said, “It is wonderful that the UAE Show Compassion campaign has seen such an overwhelming response from government entities, businesses and individuals across the country. Assisting the refugees is everybody’s responsibility, and Nakheel is delighted to have contributed to this worthy cause in support of these people and the difficulties they face in winter.” The #UAECompassion campaign has already seen an overwhelming response from every area of society throughout the UAE, highlighting the kindness in the hearts of everyone. “It is our humanitarian duty to do whatever we

can for our brothers facing an unthinkable freezing cold winter away from their homes,” said Hussain Sajwani, Chairman, DAMAC. “As a UAE-based company, we are keen to support the philanthropic efforts of H H Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, and His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai as they guide us to become a global leader in international support and aid.” The UN High Commissioner for Refugees said that officials had so far received 89,000 blankets from the Emirates as part of the Compassion campaign.The aid will be delivered in coordination with Emirates Red Crescent. g

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