Gulf Property March 2015 issue by Gulf Property

Gulf Property

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

A peep into the Empty Quarter

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VOL. 7, NO. 6 MARCH 2015

YEA

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Dr N.S. Anand Dubai to start Dh30bn Desert Rose project

EXCLUSIVE INTERVIEW Ajay Rajendran, Sobha Ashish Chaturvedy, Ducab Santosh Shetty, Expat Group Ahid Shaikh, Dejavu Oriol Font, Luxhabitat

The meteoric rise of a tycoon

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EDITORIAL

A costly realty check for UAE property market as prices come down to more realistic level

Property prices and rents are expected to decline further to a level that the market fundamentals can support

hen the market took off well in the first quarter of last year, very few people in the industry thought that the prices and rents will start to decline within six months. As a result, we have seen the return of many familiar faces at the Cityscape Global last year, especially some of those developers who had left the market with unfinished properties when the market had crashed in 200809. It was interesting to see them put up stalls and promote the new ‘artist’s impressions’ to property buyers with colourful brochures and new sales team.

Last year some of the developers had brought international celebrities to relaunch some of the unsold projects after rebranding them with new identity. The euphoria lasted about a year from the last quarter of 2013 to the third quarter of last year till the property prices began to crumble from the fourth quarter of 2014.

However, despite the current market situation, we believe there is still real demand for properties. There are real buyers, if there are time-tested real developers and real properties. That’s why, properties launched by Emaar Properties, Nakheel, Damac Properties and Danube Properties are sold out at launch. This means, if the buyers and investors can trust a developer, then there is no shortage of buyers.

Take the example of Danube Properties. This famous building materials supplier did not have a history of property development when it launched projects. Yet, investors snapped up their properties on two occasions within a gap of six months. It is due to the public trust and perception that the developer will deliver. Within six months of its launch, the company started construction of its villa project Dreamz by Danube. The same goes to G&Co on their Meydan project – which was sold out. The company will deliver the project in a few months. So, credibility is the main issue. Those who lack credibility, will find it difficult to sell properties – even at the cheapest prices.

With this issue, Gulf Property continues its difficult journey towards serving the region’s real estate fraternity with increased market penetration. I am pleased to announce that your favourite publication is gaining grounds amongs the property developers, brokers and industry observers. With this edition, we strengthen our journey well into the seventh year with renewed confidence despite challenging market conditions.

At this critical juncture in our history, I am glad to announce that we are maintaining our print run of 20,000 copies to reach a wider audience as we move from a business-to-business magazine towards a business-to-consumer publication.

– T. Akhtar

COVERSTORY

CONTENTS

NEWSUPDATE

Dubai to kick-start the Dh30 billion Desert Rose project 42 Sobha expands network 48 GCC countries award Dh248bn worth of projects in 2014 54

EXECUTIVEOPINION

Parag Shah/Goldline Group 16 Masood Ahmed/IMF 17 R. Seetharaman/Doha Bank 18 Abdallah Massaad/RAK Ceramics 19 Hafeez Abdullah/H Holding 20 Dev Maitra/Indigo Properties 22

INDIAHOUSE

Expat Group to deliver 10,000 homes in India 58

EXCLUSIVE

COVERSTORY

Dr Navjit Singh Anand: The rise of a tycoon 24

NEWSANALYSIS

Analysing the performance of the real estate developers and contractors in the UAE 34

INTERVIEW

BURNINGISSUE

Lack of adequate fire safety measures is a burning issue 62 UAE cities happier in 2014 66

COMPANYNEWS

Dejavu Properties Azizi Development Shoumous Properties Luxhabitat Properties

GULFTOURISM

68 70 71 72

A peep into the Empty Quarter through Liwa Desert Oasis 76

REGULARFEATURES GULF PROPERTY

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

EDITORIAL

Editor T. Akhtar editor@panasian1.com Senior Reporter Paromita Dey p.dey@panasian1.com Senior Reporter/Sub-Editor Indrajit Sen i.sen@panasian1.com

SALES AND DISTRIBUTION Ruby Leah r.leah@panasian1.com

PUBLISHER

T. Akhtar Pan Asian Media MFZ LLC

Realty Bytes Spotlight

LICENCE

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Licenced by RAK Media City, authorised by the National Media Council. Gulf Property is a publication of Pan Asian Media MFZ-LLC EDITORIAL AND COMMERCIAL ADDRESS Pan Asian Media MFZ-LLC P.O. Box No.: 39865. Dubai, UAE Tel : (9714) 2281021 Fax : (9714) 2281051 E-mail gulfproperty@ymail.com editor@panasian1.com Web www.gulfpropertyme.com

CIRCULATION 20,000 copies

Gulf Property 9

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REALTYBYTES

Knight Frank expands team

night Frank, the privately owned global property agency and consultancy, recently announced that it has hired a new property asset management expert to strengthen the service line. Simon Nash joins Knight Frank as a Partner to head up the Property Asset Management team. He brings more than 14 years of experience, including having worked in the Middle East for 7 years, providing clients with advisory and operational asset management services on commercial, residential and retail schemes. g

Cayan Group to open famed spa in GCC

ayan Group, the Dubai-based real estate developer, has entered into a strategic partnership with Swedish company Raison d’Etre, a creator, owner and manager of luxury spas for prestigious international hotels. The two companies have ventured to develop the upscale LivNordic Spa by Raison d’Etre at the landmark Cayan Tower in Dubai Marina. As per the deal, Cayan Group will own the LivNordic Spa being constructed inside Cayan Tower, while Raison d’Etre will manage and run the spa brand. The spa centre is expected to be completed by Q3 2015. g

Gulf Property

Harbor Real Estate books Dh2.8b worth of contracts in 2014

arbor Real Estate, a UAE-based integrated real estate service provider said, it concluded service contracts and transactions exceeding Dh2.8 billion during the 2014 fiscal year. The company’s results reflect a buoyant market condition prevailing in 2014, especially within the completed property market. Harbor’s growing number of clients include: National Bonds Corporation, Al Mazaya Holding, Investment Corporation of Dubai, Al Thani Investments, Daman Investment, Tadhamon Islamic Bank, Global Investment and Development, Amlak Finance and ASGC Investments. Mohanad Alwadiya, Managing Director of Harbor Real Estate said, “We have capitalised on Dubai’s success in promoting itself as a lucrative global investment destination and coupled this with our exceptional customer service and tailormade property solutions. This winning formula helped us become the most

sought-after service provider when it comes to managing institutional client portfolios. “From crises emerge companies that are more resilient, innovative and determined to succeed. Harbor Real Estate is one of those very few companies within the real estate sector that managed to evolve and capture the benefits of the infamous economic crisis of 2008. “We are now reaping the

benefits of our hard work and innovative approach with an exclusive portfolio that is worth over Dh15 billion and covering 6,000 mixed-use properties all over Dubai,” Alwadiya said. Harbor’s services cover: research, valuation and advisory, real estate brokerage, property asset management, marketing sales and rental, customer relationship management, handover and project management services. g

Armani Hotel Dubai unveils 3 terraces

rmani Hotel Dubai, located in Burj Khalifa, recently opened three landscaped outdoor balconies that add muchneeded al fresco space to the hotel’s popular dining venues. The three terraces extend the hotel’s outdoor dining facilities with dedicated balcony seating for diners choosing to experience a variety of Italian and Mediterranean cuisines. g

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Buroj to start work on Dh10bn ‘Ozon’ in Bosnia

ubai-based developer Buroj Property Development said, it is on track to begin work at the Buroj Ozon project in Bosnia – to be built at a cost of around Dh10 billion. It will feature villas, shopping centres and hotels, the project will be in partnership with the Bosnian government, a company statement said. It will be constructed in four phases, the first of which begins during the third quarter of this year, with completion expected in 2022. Ismael Ahmed, Chairman and CEO of Buroj Property Development, said, his company will finance the project and has already started preparations for the project which is the largest foreign

investment in the East European country by investors from the UAE. Ahmed added that the project will include a large shopping centre named Zayed Mall, which will be the largest of its kind in Bosnia, covering an area of 600,000 square feet. The Buroj Ozon will be located in the Trnovo and Igman zone over an area of 13 million square feet and consists of villas, hotel apartments and hotels, in addition to the shopping centre. It will become the largest mixeduse tourism project in Eastern Europe. He affirmed that the project reflects the strength of the UAE foreign investment. It will also serve as an opportunity for Arabs and foreigners who want to buy a house in

Bosnia. Ahmed said that the beginning of Fly Dubai’s air services to the Bosnian capital Sarajevo is expected to double the flow of tourists to the city and therefore increase investment opportunities. Lack of direct flights from the Arab World to Bosnia was considered to be the main obstacle to increasing the number of tourists, businesses as well as investment. Ebro Pirlo, the Mayor of Trnovo said that this investment was the largest foreign investment in Bosnia. He noted that there are many investment opportunities in the city, which has an attractive investment climate, for all parties to achieve economic benefits. g

REALTYBYTES

Al Habtoor looks to invest in Egypt

l Habtoor Group is likely to invest in Egypt as it studies potential business opportunities there. Khalaf Ahmad Al Habtoor, chairman of the group, said he is conducting feasibility studies in the automotive, real estate and hospitality sectors. “It is my hope to build Al Habtoor City in Cairo,” he said. “This will be of great benefit to the country’s economy, and will also provide thousands of jobs.” Al Habtoor City, currently under construction in Dubai, employs around 8,000 people. Once complete, it will also provide a further 3,000 jobs. g

Kansai Paint opens largest store in Dubai

ansai Paint has opened its largest retail centre in Umm Sequim, Dubai. It features a creative colour room, which helps customers visualise colours in reality. The center spans over an expanse of 225 square meters. The expansion is a part of Kansai’s aim to increase its foothold in the region. As a 360 degree service store, Kansai Paint also provides customers with the concept of supplyand-apply services delivered by a team of professional experts that deliver the task of painting walls to perfection. g Gulf Property 11

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REALTYBYTES

RAK Ceramics launches new GCC tiles range

AK Ceramics recently announced the launch of the largest ceramic tile in the GCC region. Maximus Mega Slab in Gres Porcellanato is produced using Continua Technology and will be the largest single pressed ceramic tile in the region, measuring 1.5 x 3 metres. The product was launched at Cevisama Exhibition, one of the largest expos in the ceramic tiles, sanitaryware and natural stones industry, which took place in Spain from February 913, 2015. This tile can be used on walls, floors or to create surfaces. g

Living Legends to deliver 150 villas in Q2 ‘15

iving Legends, the Dubai-based property developments, is set to deliver its first 150 villas in Q2 2015, under the leadership of Delta International Real Estate. With more than 4,000 workers on-site every day, the project promises luxury villas and apartment towers across 14.44 million square feet of prime Dubai real estate, located near The Downtown. Following the 2008 recession, the project suffered delays along with much of the Dubai market. Today, under the new management of Tanmiyat Global, Living Legends is committed to finishing the project as per schedule. g

Gulf Property

Damac awards Dh1.2bn worth of contracts in 2015

amac Properties has awarded five major construction contracts worth a total of Dh1.2 billion so far in 2015. Signifying the developer’s firm belief in the Dubai real estate market, Damac Properties has appointed five contractors for additional work on its two luxury master developments, Akoya by Damac and Akoya Oxygen, in addition to main works packages on three of its serviced hotel apartment’s projects, Privé by Damac, Celestia and Vantage. “Over the past year there has been significant investment from buyers all over the world in our luxury living concepts – particularly our serviced hotel apartment units and both of our stunning golf communities,” said Niall McLoughlin, Senior Vice President, Damac. Damac Properties has awarded Ghantoot the construction contract for the first 981 villas at its new 55 million square feet master de-

velopment, Akoya Oxygen. SEIDCO has won the main contract to build Privé by Damac, a two-tower hotel apartments project overlooking the canal in Business Bay. The company has also been awarded the contract to build the clubhouse which will serve as the Trump International Golf Club, at the heart of Akoya by Damac. Civilco will be the main contractor of Celestia, a

hotel apartments development at the heart of Expo 2020 and Al Maktoum International Airport. Reem Capital will build Vantage, another hotel apartments project, in Jumeirah Village. “Damac only works with the most established and trusted partners to deliver its projects and we are pleased to bring on board some of Dubai’s most reliable contractors for our projects,” McLoughlin said. g

90% of Burj Mohammed Bin Rashid leased

Aldar Properties said, it has successfully leased 90 per cent of the residential units in the Burj Mohammed Bin Rashid since its launch in November 2014. Standing at 382 metres, the Burj Mohammed Bin Rashid is the tallest tower in Abu Dhabi and is now home to 426 families and a total of 852 residents, reflecting a strong market response. g

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Danube starts building ‘Dreamz’ and ‘Glitz’

anube Properties recently started construction work of its first two projects, Dreamz at Al Furjan and Glitz at Dubai Studio City following a sell-out launch of the projects. Rizwan Sajan, Founder and Chairman of Danube Group broke ground at both the sites, accompanied by Atif

Dubai Parks and Resorts raises Dh6.7bn

ubai Parks and Resorts, part of Meraas Holding, has announced its preliminary unaudited financial results for 2014. As of December 31, 2014, the company had not started its commercial operations; consequently there is no operating revenue during the period. The company successfully executed significant financing initiatives to fund the de-

Rahman, Head of Property Development, as well as other senior members of his team. Also present with them were Shakeel Imam, Managing Director of EDMAC Engineering Consultant, Jamal Muwahid, Deputy General Manager from UNEC representing the main contractor for Dreamz. Besides, Abdulrahman Solanki, velopment of the Middle East’s largest multi-themed leisure and entertainment destination. They include the Dh4.2 billion Goldman Sachs’ led syndicated finance facility November 2014, and Dh2.5 billion equity raised via Dubai Financial Market listing December 2014. The total money raised from the market amounts to Dh6.7 billion. Raed Al Nuami, CEO, Dubai Parks and Resorts, commented, “Our project is well underway and making good progress. We have signed agreements with

Chairman of Atlas Foundations, which has been appointed as the earthworks contractor for Glitz, was also present at the site. “We are delighted to officially start construction on our first two realty ventures for the division. Both our projects are currently on track as per our initial plan. Designed to cater to the growing needs of the end-users, the projects offer a smart environment that delivers comfort, convenience and functionality for its owners. We will always strive to deliver unmatched value for our buyers,” Sajan commented. He said the completion of Dreamz is expected by September 2016 and Glitz by July 2017, which fits exactly within the committed deadline. “At Danube, it has always been our commitment to provide a range of innovative, value-added services for our customers.” he said. g

some of the world’s leading leisure and entertainment brands.” Construction works have started with site preparations within the project. “We will have considerable opportunity to capture value through ticketing, hotels, retail and sophisticated destination management by our experienced team of leisure park management experts. Projected revenue in the first full year of operation is estimated at Dh2.4 billion with over 5000 jobs generated across the sector,” Nuami said. g

REALTYBYTES

Mohammed Bin Rashid Housing joins DSG’s eJob site

Dubai Smart Government Department (DSG) recently announced that Mohammed Bin Rashid Housing Establishment (MRHE) has joined the Department’s Dubai Government eJob portal which allows nationals, residents and non-UAE-based users to search and find vacancies in 16 government entities. A team of specialists at DSG has already completed all necessary procedures to include MRHE within the other government entities participating in eJob, allowing it to post vacancies online and automate all recruitment procedures, in addition to benefitting from the many other features of the portal. g

HMG lures GCC buyers towards US property

HMG Properties unveiled in Dubai in February yet another of its residential projects – this time in Kissimmee City in the central American state of Florida’s Osceola County. Located at just a few minutes’ drive from the Disney World and the Universal Orlando Resort, Sunshine Lakes Resort is a gated community which features a clubhouse equipped with a restaurant, fitness club, and an attractive sun terrace that overlooks the popular Lake Toho. g

Gulf Property 13

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REALTYBYTES

Mark Warner Property offers Swiss estates

Mark Warner Property, one of UK’s leading ski property specialists, is offering a range of luxury residential properties upwards from CHF 587,000 in Grimentz, Switzerland, for GCC buyers. With Skiin, Ski-out facilities, concierge and extensive spa and wellness facilities, the properties are representative of the level of quality demanded by the GCC investors. Switzerland is currently the only European country where banks will lend to UAEbased buyers and also offer the cheapest interest rates in the world. g

Cityscape AD expects to grow by 15%

he current stability within the market bodes well for property developers who are set to participate in the 9th Cityscape Abu Dhabi, which takes place from April 21-23, 2015, at the Abu Dhabi National Exhibition Centre. Wouter Molman, Director of Cityscape Group at Informa Exhibitions, the organisers, said, “In 2014 we saw 17,000 attendees over the three days; a 15 per cent yearon-year increase. This year, we are forecasted to grow by over 15 per cent again, as we have seen an increase in registered exhibitors, prompting us to add another hall to the venue.” g

14 10

Gulf Property

Jumeirah to operate Saadiyat Island resort in Abu Dhabi

umeirah Group, the hospitality arm of Dubai Holding, has signed an agreement with Sheikh Suroor bin Mohammed Al Nahyan, to operate a luxury Jumeirah resort on Sa’adiyat Island, Abu Dhabi. Set on the north eastern coast of Saadiyat Island, the property will be a luxurious five-star resort in Abu Dhabi. Expected to open in 2017, the hotel will comprise 294 guest rooms, including spa suites, presidential suites and private high-end villas. The food and beverage outlets will include an all-day dining venue, two restau-

rants, a lobby lounge and bar, a pool and beach bars, retail shops and outdoor beach and pool areas. The architecture, interior design, landscape and master planning will be completed by DBI Design Corporation, the firm that also designed Jumeirah at Etihad Towers, Abu Dhabi. Once complete, the island will be made up of seven districts which will house and service a population of 150,000 people. The districts will include The Louvre and The Guggenheim museums, a Performing Arts Centre, nine kilometres of beaches, six luxury hotels

asweek Real Estate Marketing and Development, an advisor and solutions provider serving property markets, has announced the preparation of a new $55 million mixeduse project, including health, residential, retails and tourism in the city of Agadir, Morocco. It is the second project for the company in the North

African nation after the successful project of the 160bed private hospital as part of the Marrakech Healthcare City development in the country’s third largest city. Masood Al Awar, CEO of the company, said, “The launch of the new mixed-use development in Morocco reaffirms Tasweek’s commitment to strengthen bilateral relations between the two countries. g

and resorts, a golf course with luxury apartments, the Monte Carlo Beach Club, a promenade, a marina and the Saadiyat Retreat where the Jumeirah Saadiyat Island Resort will be located. “We have invited Jumeirah to offer their warm, consistently superior service in style. Original architecture and interior design with special touches and attention to detail makes us all feel good. We welcome guests to relax on one of the best beaches in Abu Dhabi,” Sheikh Suroor said. A further 26 hotels are in the pipeline of Jumeirah Group worldwide. g

Tasweek unveils $55m Morocco project

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REALTYBYTES

Meraas launches third urban lifestyle destination ‘Boxpark’

eraas, a Dubaibased holding company with operations and assets in the UAE and overseas, announced the launch of its allnew outdoor urban lifestyle concept, Boxpark. The theme is inspired by functional design and urban renewal projects that combine the finest in modern architecture through the aesthetics of warehouse containers. Boxpark is Meraas’ third concept in less than two years, following its other two innovative lifestyle developments - The Beach and City Walk. Breathing new life into the city, Boxpark is an urban lifestyle destination in Dubai offering a selection of unique retail experiences and quirky dining concepts from around the world in a dashing setting to appeal to the city’s eclectic community. For residents, tourists, Boxpark offers visitors a space to shop at leisure. With the launch of Boxpark, Meraas is cementing its commitment to creating unique retail and lifestyle options in Dubai and bringing new life into one of Dubai’s important high-street districts in Al Wasl and Jumeirah. The development features 44 retail, restaurant, cafe, and entertainment brands, blending the best of local and international concepts appealing to the national and expatriate community in the UAE. There will be several retail

brands that will open doors to the public in the launch week. Concepts opening doors to public in the launch week include: Dri Dri, Polliwalks, • Rundholz, Urbanist, Typo, The Zoo, Toms, LIV by Giant, Nike and Adidas Original, among others. Also due to open in the coming weeks are several shops and restaurants expected to make their debut at Boxpark which includes a range of retail outlets. Boxpark is strategically located between Al Safa Park and Emirates Post Office on Al Wasl Road. The development can be accessed from Sheikh Zayed Road, via Safa Park exit towards Jumeirah, and is well connected by Dubai RTA buses. g

ADMRI sets up brokerage unit in Dubai

bu Dhabi Marina Real Estate Investments (ADMRI) PJSC, has recently set up its real estate brokerage subsidiary ADMRI Real Estate Brokers in Dubai to tap the growing opportunities in the real estate market. ADMRI, set up with a paid-up capital of Dh150 million in 2009, is active in the UAE and Egypt. The company, which has recently opened it headquarters in Dubai, said, it will open eight branches in the next five years. The opening ceremony of its Dubai head office was at-

tended by ADMRI Board of Directors, led by Chairman Adel Ahmed Al Zarouni, Vice-Chairman Faisal Abdul Aziz Al Nassar and General Manager Mohamed Abu Zid, among other guests. “ADMRI has been a natural evolution of real estate experience and success,” Faisal Abdul Aziz Al Nassar, Vice-Chairman of ADMRI, said in a statement. “We have recently opened our brand in Abu Dhabi and the opening of the Dubai Headquarters is part of that commitment. After a much improved industry in 2014, Dubai’s solid economic outlook has positioned it as a city of choice for global corporate and companies who want to tap the Middle East market.” g Gulf Property 15

OPINION

PARAG SHAH

Chief Financial Officer Goldline Group

he real-estate market in UAE is currently going through a period of corrections. This is an indication of any maturing market, where it goes on a path of small uphill and downfalls. So these current fluctuations caused by the declining oil prices, is not one to be concerned about. It will not be affecting the market more than taking it through a process of adjustments and corrections. Moreover, being strongly supported, directed, and funded by the UAE government with well laid out plans on infrastructure development for 2020, we should expect the market to rebound by Q3 2015 where on

Gulf Property

Market flux vs cash flow

it would take on a positive trajectory. Unlike the exponential market growth during the period that preceded the 200809 recession, where growth was more like a bubble expansion that was meant to burst, the market will currently grow in a process of learning, more methodically. There will perhaps be no steep inclines or declines, but on an average the evolution would be towards a greener pasture for the realestate segment. Contrary to the larger belief it is not correct that the banks have left the option of loaning money for this sector, it is just that they have taken appropriate measures to safeguard themselves. They have learned it the hard way during the recession time when UAE real-estate market boomed and then burst. Now they follow a process for stringent due diligence by assessing the project plan and development in each phase, and evaluating the property developer’s financial backing and competencies, before moving ahead on any project. After all, the major business for banks and financial institutions is lending funds and they would not leave a potential opportunity. Goldline Properties on the other hand has an added edge over its counterparts in the same segment. Though managing the cash flows is a tough job, having its reserves, possessing its own

Unlike the exponential market growth during the period that preceded the 2008-09 recession, where growth was more like a bubble expansion that was meant to burst, the market will currently grow in a process of learning, more methodically.

– Parag Shah

construction company, and being able to diversify funds if required from its other business segments, puts Goldline Properties in a comfortable position with regard to the income sources. This also plays a crucial part in getting financial loans. The financial institutions are assured of the company’s commitment towards a project, because the company would have a lot of strategic business units to put at stake by going back on its promise of building a property. So the risk factor from a financial institution’s point of

view is minimal. Moreover financial institutions now have different modes of funding, they may fund partially (say 75 per cent or so), may look to a phased approach providing loans only for a current phase and wait for its completion before moving to the next, may finance as a single entity or as a consortium of financial institutions to share their risk, or in case of Goldline they can choose to fund its construction and contracting arm. With stringent legal laws to support them, financial institutions are more inclined towards lending the support. From a company point of view, Goldline Properties does its business with caution and undergoes itself to a lot of processes for due diligence before taking up a project. So no matter what the market scenario, the company would have taken its precautions for the worst and arranged for its actions. For that reason, market flux is not something that might shake its balance. It has its cash flows and liquidity well managed to not let it fall off at the dawn of an unfathomable market situation. Thus effective management of cash reserves, having a backward integrated business model, and possessing a diversified business portfolio, are all key factors for any company who intends to retain its balance with adequate cash flows during market flux. g

The boon and bane of cheaper oil

he steep decline in oil prices presents new economic realities for countries in the MENA region. Global oil prices have declined by more than half from their peak last summer, to levels not seen since a short period in 2009. The combination of unexpectedly higher oil production from unconventional sources, weak global demand, and the decision of OPEC to maintain their production levels has led to both a sharp price decrease and uncertainty about how long the current trend will last. Where prices will eventually settle is, of course, uncertain, making it hard for policymakers to gauge how much of the shock is temporary in nature and what share of it they should expect to last. What is clear, however, is that lower oil prices present economic challenges for oil exporters in the region, while benefits for oil importers remain contained. MENA oil exporters are now faced with large export and government revenue losses. In our upcoming Regional Economic Outlook Update, we estimate that in the countries of the Gulf Cooperation Council alone, oil and gas export losses will amount to around $300 billion this year. And all oil exporters in the region, with the exception of Kuwait, will now have to dip into their accumulated savings or borrow to finance deficits in their government budgets for this year. Fortunately, most oil ex-

“MENA oil exporters are now faced with large export and government revenue losses. We estimate that in the countries of the Gulf Cooperation Council alone, oil and gas export losses will amount to around $300 billion this year,”

– Masood Ahmed

porter governments have the resources to avoid a steep reduction in their spending plans for this year, and it is likely that they will choose to do so, thus limiting the immediate impact on growth and living standards for their populations. But foreign asset buffers are exhaustible and many MENA oil exporting countries will empty their buffers within a few years if policies remain unchanged and if oil prices stay low. Therefore, the time is right for these countries to re-assess their medium-term spending plans and target a gradual but decisive adjustment to lower oil prices. Reducing capital expenditure in a phased manner will probably be unavoidable given the magnitude of the task, but preference should generally be given to reining in recurrent expenditures and reducing generalised energy subsidies, which remain large in many countries even

with the new lower oil prices. In addition, lower oil prices could present incentives to craft new plans, or rekindle longstanding existing ones, to raise non-oil revenue collection. With a more constrained fiscal outlook over the next few years, growth models of the past decade that were anchored in rising government spending may no longer be sufficient. Instead, the challenge will be to enable the private sector to become a much more self-sufficient engine of growth. This will require reorienting incentives toward export-driven production of goods and services, for instance by reducing barriers to competition and stepping up trade facilitation and export promotion policies. Similarly, in many countries it will be important to enable nationals to participate more in the private sector labor market to avoid pressures on governments to play the role of employer of first and last resort, a role they will find much harder to maintain in a world of lower oil prices. In contrast to the oil exporting countries, the fall in oil prices provides welcome relief to the region’s oil importers. Their energy import bills are reduced, pressures on government budgets will ease to reflect the lower cost of energy subsidies and, where lower energy costs are passed on to companies and consumers, they lower production costs and raise disposable income. However, in most oil-importing countries, gains from

OPINION

MASOOD AHMED

Director for Middle East and Central Asia Department International Monetary Fund

lower oil prices are being offset by other factors. A deteriorating outlook for demand in the euro area and the GCC, along with the drop of prices for non-oil commodities which some countries export, will erode some of the windfalls from lower oil import bills. Even so, growth prospects for MENAP (the Middle East, North Africa, Afghanistan and Pakistan) oil importers in 2015 are expected to show a significant improvement over 2014 (nearly 4 per cent compared with 3 per cent last year), and their budget and balance of payment positions will also show some improvement. Welcome though the relief from lower oil prices is, it is important to recognize that the future course of oil prices remains highly uncertain. Thus, countries would be well-advised to avoid entering into spending commitments that would be hard to reverse if oil prices returned to higher levels or in the face of other adverse developments. The key is to use this period of lower oil prices to step up the reform efforts that would support faster and more inclusive growth and create better jobs for the population. g Gulf Property

OPINION

R. SEETHARAMAN

Chief Executive Officer Doha Bank

espite the fall in Oil prices globally the UAE economy is expected to have registered a GDP growth of 4.7 per cent in 2014. The economy is expected to grow at 4.5 per cent in 2015 on account of expanding non – oil sector, especially tourism, retail sales, trade and real estate. The non-oil sector is expected to remain above 5 per cent for 2015 – 16 on account of increased foreign investment inflows. The rise of Dubai's growing residential real estate market will peak in 2015. The property sector has stabilised in recent months, moving to realistic and tradable price levels. Real estate developers have shifted their approach to budget segment homes which were earlier neglected and where a strong demand still exists. Developers have also realised that budget homes are low on both construction and maintenance cost which can be traded to offer good quality housing to meet client expectations. In Abu Dhabi UAE nationals find rent as a steady income apart from the salary they earn. In 2008 while Dubai launched hundreds of

Gulf Property

Reforms help stabilise Dubai property market

projects Abu Dhabi was cautious and the moment there were feelers of recession. So, no new projects were announced and the developers started focusing on completion of the already announced projects and through the last six years most of the projects have been handed over. There has been a few reasons for the rise in demand for properties in Abu Dhabi. The new rule passed by the Abu Dhabi government that the employees will be paid house rent allowances only if they stay in Abu Dhabi has tilted the balance with people who were staying in Dubai moving to Abu Dhabi. The 5 per cent cap on rent increase was removed which has made the landlords increasing rent by 30-40 per cent. This has encouraged investors to buy and rent out property and renters to buy their own property. Compared to the demand there are not as many freehold or UAE national properties available this has made the spillover of demand to Dubai properties with many Abu Dhabi residents buying the properties in Dubai not for speculating but to use as long term investment with returns in form of rental. The Dubai real estate market in particular has enjoyed a tremendous recovery over the recent years. The rapid pace of the recovery has prompted the UAE Central Bank to introduce a mortgage cap to slow down price increases to more sustainable levels. The regulations for granting mortgage loans changed significantly following the introduction of the

The regulations for granting mortgage loans changed significantly following the introduction of the UAE Central Bank Mortgage Cap.

– R. Seetharaman

UAE Central Bank Mortgage Cap. Expatriates buying a property for under Dh5 million must now produce a minimum deposit of 25 per cent, rising to 35 per cent for properties above Dh5 million. For second properties, the minimum deposit is 40 per cent. Emiratis have to pay less in comparison to expats, but they still need a 20 per cent deposit for homes under Dh5 million, rising to 30 per cent for homes over Dh5 million, and 30 per cent for any subsequent properties. Non-resident lending is starting to open and we now have approximately banks willing to lend to overseas investors, up to a maximum level of 75 per cent loan-tovalue (LTV). The new mortgage regulations go further than just capping maximum LTV ratios. There are clear guidelines for banks regarding greater transparency and maximum exit fees they can charge clients. It has been more than five years since the major central banks around the world slashed interest rates to record lows, and at times it has seemed like the rates

would stay low forever. Unlike years gone by, there is now a whole range of UAE mortgages available at reducing rates of under 4 per cent. Competitive rate in the market has given buyers opportunity to avail mortgage loan at cheaper rates. Banks are coming up with innovative rate structure mostly linked with Emirates Inter Bank Offered Rate (EIBOR). This encourages customer for mortgage loan, as such rate are not expected to increase abruptly. Another factor that could filter property buyers accessing a mortgage is the UAE’s new credit bureau. By the end of year 2014, the Al Etihad Credit Bureau started issuing consumer credit reports to banks and financial institutions that have subscribed to access its credit reporting system. The credit bureau should ultimately help banks to better regulate their lending risks and reward those who do not default on debts with better interest rates. Those applying for a mortgage will have their financial records vetted more effectively by participating banks. The mortgage caps and higher transaction fees made borrowing more expensive for some, the banks marketed new products and technological advancements to ease access to mortgage lending. Banks are also trying to lure customers through home equity mortgages, which provide customers with large equity or little debt against their property the opportunity to release some of the collateral in return for a monthly repayment. g

From functional to fashionable

he story started in 1991, when RAK Ceramics was established by H.H. Sheikh Saud Bin Saqr Al Qasimi, Ruler of Ras Al Khaimah and UAEâ&#x20AC;&#x2122;s Supreme Council Member. Now under the vision and leadership of Sheikh Mohammed Bin Saud Al Qasimi, Crown Prince of Ras Al Khaimah and the Chairman of RAK Ceramics, the Ras Al Khaimah-based company has enjoyed rapid growth to become one of the worldâ&#x20AC;&#x2122;s largest ceramics manufacturers, with a massive distribution network that spans 160 countries. From the beginning, RAK Ceramics has focused on investing in technology and innovation in all of its factories and across all of its product lines which include tiles, sanitaryware, tableware and taps and faucets. In June 2014, Samena Capital bought a 30.6 per cent stake of the business. A value creation plan has been adopted and RAK Ceramics has a very clear strategy fo-

cusing on its four core verticals of tiles, sanitaryware, porcelain and taps and faucets. RAK Ceramics has also commenced its strategy of exiting the non-core businesses in which it had interests in order to strengthen the profitability of the company, this will strengthen the brand and help RAK Ceramics to evolve into a comprehensive producer of quality, lifestyle solutions. We have continuously strived to ensure we have the best machinery and latest technology which will allow us to produce only the best products. Ceramics has evolved from being a product used in bathrooms and kitchens to being a high fashion and lifestyle commodity. We never wanted to be just another ceramics company producing tiles and sanitaryware; we wanted to be known for producing lifestyle solutions. We wanted people to look at our products and know that they are RAK Ceramics. RAK Ceramics is a pioneer in introducing hi-tech innova-

Ceramics has evolved from being a product used in bathrooms and kitchens to being a high fashion and lifestyle commodity. We never wanted to be just another ceramics company producing tiles and sanitaryware; we wanted to be known for producing lifestyle solutions...

â&#x20AC;&#x201C; Abdallah Massaad

tions that are a breakthrough in the industry. From digital technology, slabs, anti-bacterial, glow in the dark, double charge, Continua and water jet designs, to robotic glazing techniques, wide body products and high pressure casting with sanitaryware, RAK Ceramics constantly invests in the latest technologies to ensure it stays an industry leader. In keeping with this dedication to innovation, RAK Ceramics was the first company to produce antimicrobial and luminous tiles which glow in the dark. In 2005, RAK produced the largest porcelain slabs available at that time at 1.2 x 1.8 metres. Another very important innovation that will redefine the world of tiling is the introduction of Maximus Mega Slab,

OPINION

ABDALLAH MASSAAD

Chief Executive Officer RAK Ceramics

a gigantic 1.5x3 metres Gres Porcellanato tile, produced using Continua Technology this is the largest tile that is manufactured in the region. This striking tile can be used on walls, floors or to create surfaces. The large size of Maximus Mega Slab reduces the need for multiple joins and grouting on floors or walls and can provide an alternative to traditional stone or granite surfaces used in kitchens and bathrooms. RAK Ceramics uses more than 8,000 production models, with new designs being added every week to its portfolio. With ceramics undergoing enormous changes and shifting from being a practical functional product, to a design-led commodity product, we make sure to closely follow what is in fashion to meet the needs of an increasingly demanding client base. Constantly developing new designs is crucial to staying ahead of the competition. We work closely with specifiers, architects, interior designers and construction companies to ensure that they can rely on RAK Ceramics to provide bespoke ceramics solutions for their projects. g Gulf Property

OPINION

HAFEEZ ABDULLAH

Chairman The H Holding Enterprise

he years 2013 and 2014 were two positive years for the realty market in the UAE in general and Dubai in particular. The sector has generated higher demand for properties across many locations. The question asked here: Will this prosperity continue? or even it could be: Is Dubai heading for a second property crash? For the second question, the short-sighted pessimists would answer ‘Yes’, but in reality it is a ‘No’. I think it is a big ‘NO’, because as everyone in the real estate industry knows, real estate is brick and mortar business, and that is why it is called real estate. Even if we are talking about offplan properties, investors and end-users alike are more cautious before putting money down. Also, banks are playing a bigger and controlling role in financing those end-users, thus acting to some point as consultants and not just lenders; in addition, the governments have put in place measures to regulate the industry. Add to that the accumulative experiences of the real estate developers in the emirate. Also, investors play a role

Gulf Property

Is Dubai heading for a 2nd property crash?

in the growth and immunity of any sector. When talking about real estate, regional and international investments are the drivers of the UAE real estate industry, aided by the maturity of the market, and all this will contribute to further growth of the sector. The latest annual report of Global Property Guide, reveals that the price of 100 square metres of luxury apartments in the UAE is equal to 6.02 times the GDP per capita, compared with 29.19 in Jordan, 28.44 in Egypt and 34.29 in Lebanon. This proves that the residential apartments in the UAE are highly valued compared to other cities in the world and it depicts the high spending powers of property buyers in the country. The UAE is steadily lining up new real estate projects catering to residents as well as investors and the projects are supported by world-class infrastructure. All of this shows that every stakeholder in the realty market is contributing in the robustness of the sector. When Jumeirah Lake Towers (JLT) was launched early 2004, I remember the chief operating officer of Nakheel at a presentation saying that it would have as many towers as Sheikh Zayed Road. Skeptics at the time questioned the rationale behind such a project? Where on earth will the demand come from? But subsequent developments have shown that JLT was only a drop in the ocean of what Dubai had to offer the world. From the economic point of

I firmly believe that real estate will remain the hottest investment in the UAE for the coming decade. Real estate is widely regarded as a sound investment...

– Hafeez Abdullah

view, the economy is growing at 4.6 per cent on average between 2012 and 2015, more than twice as fast as in the previous four years. Dubai’s population is growing at a rapid pace, so the demand for housing is rising. Moreover, unprecedented legislations have been put together ensuring that Dubai's property market does not head towards another crash. Efforts to educate investors and end users are taking a priority in Dubai. The Dubai Land Department (DLD) is spreading awareness and understanding of the real estate legalities and assisting all parties involved in investment in the sector as they believe that this sector is a two way street and the more all stake holders understand it, the less vulnerable they would be to any crashes. As real estate generally moves in cycles of ups and downs, made up decades, I think Dubai is in the “decade” zone of comfort for the com-

ing ten years, backed by an unprecedented hands-on strategy. We are definite that it is more than enough to give Dubai a sustainable growth, rather than a bubble. Also, we shouldn’t ignore the great correlation between real estate and UAE financial markets, as despite the fact that tensions in some parts of the world are causing major problems for emerging markets, it seems that the Dubai stock market is currently immune from this, with real estate shares remaining in demand. This is significant, because the bulk of stock market growth is associated with property companies. Another key factor on the prosperity of the realty market in Dubai is the strong interconnection between real estate and hospitality industry as many key players are leveraging on the inter-dependence between the real estate sector and the hospitality industry to provide tailored services to the hotel industry as well as endusers. We see promising signs in the hospitality sector in Dubai at a time when the Emirate plans to attract 20 million tourists by 2020. To sum up, I firmly believe that real estate will remain the hottest investment in the UAE for the coming decade. Real estate is widely regarded as a sound investment. I foresee increased regional demand for UAE realty thanks to the understanding attained over years by investors as well as the further expertise of the real estate developers and the regulatory measures of the DLD. g

Tips to consider when buying a villa in Dubai OPINION

By Dev Maitra

Special to Gulf Property

ubai is a melting pot of cultures, offering a comfortable living experience of a high quality. Constantly soaring to new heights and offering a plethora of options in all aspects from housing and education, to recreation and dining, Dubai is undoubtedly the finest place to make home. There is plenty of choice of accommodation in Dubai but villa community living is definitely a preference, offering space, privacy and comfort. Although, once you make

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up your mind to buy a villa, it is easy to get lost in the multitude of factors that must be considered. One of UAE’s premier property developers Indigo Properties helps make this process much easier by outlining 10 important features to consider when buying a villa in Dubai.

1. Location and neighbourhood

Location is key, as it will remain constant until the end of time. Consider the proximity of public transportation such as the Dubai Metro. Perhaps a Tram station is in walking distance? If you have children, research the

closest nursery’s and schools. If you’re a newly married couple do the same, as a home is permanent and long-term factors should be taken into consideration. Locate the closest supermarket, pharmacy, clinic, shopping center, petrol station and all other amenities that you will require. Selfcontained living communities make for an ideal home. Study the neighbourhood: income levels and age distribution. If it’s an off-plan development, the reputation of the developer,property prices and the quality of construction should give you a considerable idea.

2. Credentials of developer

What is the quality of the developers’ previous projects? Do they deliver excellence? Do they meet or surpass what they have promised? Based on personal or friends’ past experiences, are they trustworthy? What is their track record for after-sale care and maintenance? A genuine property developer won’t just sell you a property and end the relationship there; they’ll cater to your needs and ensure that your decision is best for you. Do some first-hand research; attain referrals for passionate, sincere developers with

3. Quality of property

What sets apart a genuine property-developer from others is the quality of the property offered. While some properties come as shell and core units, others, for the same price per square foot, offer wall fittings, marble flooring, stateof-the-art kitchen appliances, smart home systems and more, with the developers absorbing extra quality projects.

4. Size

Most people when looking for a house do not factor in the long term and how demands might change. You might be a young couple and hence you need little space, however, in a few years you might have a couple of little ones to take care of, relatives visiting often or parents living with you. Factor these possibilities in and look for a place with a minimum of three or four bedrooms. Large, spacious townhouses or villas contribute to a more comfortable living. Enormous windows allowing bright sunlight to flood in would accentuate the spaciousness of the rooms.

5. View

Imagine gazing out your window at the twinkling lights and magnificent skyline of this remarkably beautiful city as you savour your candlelit dinner. Although the view may not seem as most important, a view of water and greenery adds some sparks and wonder to one’s daily routine and melts the stress away.

6. Service

costs for your benefit. These developers work with the very best partners at every stage, from engineers to architects, from master developers to contractors, ensuring the best quality of design and construction, and develop to deliver outstanding properties, reducing any potential problems that may exist such as structural issues and damage. A high quality, well-structured property will surely prevent you from facing major expenses.

charges

Recurring monthly or yearly costs must be taken into consideration, including electricity and service charges. Keep in mind that certain reoccurring expenses will take place post-purchase for maintaining the community. Set some cash aside for these minor expenses. Contrary to popular belief, villas’ service charges are usually much lower on a per square foot basis than apartments.

7. Maintenance standards \

When contemplating buying the right house, ensure that the villa complex uses a reputable maintenance agency. Imagine how tedious it would be trying to find a suitable maintenance person to come fix a faucet that decided to burst at 5am. Find out about their availability and clean services provided; how often and well are community areas cleaned? More importantly, ensure that your safety is a priority – find out if smart home technology is offered in villas and townhouses, and what security systems are in place in apartment buildings. How much is being done to keep your community living safe

OPINION

Dev Maitra

and clean?

8. Amenities

Is the community self-contained? Does the building offer basic amenities? Having to drive 20 minutes to go to the gym each day would be quite a demotivating factor. How much easier would it be if all gym facilities, perhaps even group classes and personal trainers, were available just a street away? Get a thorough understanding of all amenities available. Is it a safely guarded gated community for children to play in? Is there a shared gym and swimming pool? These are just some amenities to consider, your list of desired amenities depends on what factors are important to you.

9. Garden Space

If you have young kids, you do not want them cooped up in a room. Lush landscaping or garden spaces allow children to run about in the fresh air and be close to nature. As for you, what is a better way to spend a weekend than to be lazing in the tranquility of your garden, reading a good book?

What is the quality of the developers’ projects? Do they meet or surpass what they have promised? What is their track record for after-sale care and maintenance? A genuine property developer won’t just sell you a property and end the relationship; they’ll cater to your needs and ensure that your decision is best for you. Do some firsthand research; attain referrals for passionate, sincere developers with quality projects.

10. Re-sale value

While moving homes is a lifestyle change and usually more permanent, you may make different decisions in the future such as taking on a new job in another country or shifting elsewhere – a home with more bedrooms, a newer location. You may not wish to keep your property due to requiring finances to make the change, so upon purchase of a property it is helpful to consider what the re-sale value would be after a specific time period. I hope these factors will bring about some clarity, making you more confident with your ultimate purchase decision. g ............................................. Dev Maitra is the Chief Executive Officer of Indigo Properties, a real estate developer based in Dubai.

Gulf Property

COVERSTORY

Dr Navjit Singh Anand, Chairman of Goldline Group announcing a Dh3.67 billion foray in Dubaiâ&#x20AC;&#x2122;s real estate

Goldline Group injects $1 bn in real estate 24

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COVERSTORY

Dr Anand receives Entrepreneur of the Year award

Gulf Property Exclusive

ubai-based diversified conglomerate Goldline Group is making a major foray in the real estate sector that is expected to increase its annual turnover from $680 million (Dh2.5 billion) to $1 billion (Dh3.67 billion) in three years, a top official said. The company has recently acquired 13 plots of land to develop residential and commercial real estate – in what

is going to be a major development for the group that has a strong presence in construction, education, shipping and logistics, trading, oil and gas sectors, among others. “Although trading is still our biggest portfolio, the new developments will push our turnover to $1 billion in the next three years from the current $680 million,” Dr Navjit Singh Anand, Chairman of Goldline Group, told Gulf Property in an exclusive interview. “We have already spent Dh180 million in acquiring the 13 plots where we are

planning to build apartment complexes.” It is investing up to $1 billion (Dh3.67 billion) in the real estate sector, including Dh180 million in acquiring the 13 plots and the rest in project construction and development. A physician by profession, Dr Anand – one of the most successful non-resident Indian businessmen in the Gulf – established Goldline Group in 1991 at a small yard in Sharjah primarily dealing in scrap metals and plastics business, following a successful career in healthcare in New York.

His initial success in business had encouraged him to expand into other areas and he then ventured into mechanical, electrical and plumbing (MEP) construction, general construction, oil and gas, shipping and logistics, trading and education. His latest foray in real estate is a natural progression that will help him to maximise benefits from the group’s core competencies in construction and complete the value chain. So, his company will now be able to plan, design, construct, develop the group’s own projects from concept to Gulf Property

COVERSTORY

completion – all under one roof – without having to rely on third-party expertise. This gives him the complete control over the group’s own projects. “Currently we are constructing our first school, Springdales – which will have some of the best facilities for students studying in Indian curriculumn,” he said. “I am passionate in what I do and education is not business to me – it’s a passion and we are putting our all efforts to make it a best educational institution in the country.” In an exclusive interview

Gulf Property

with the Gulf Property, Dr Anand elaborated his views on a number of issues. Excerpts:

Gulf Property: You have acquired 13 plots of land in Dubai in quick succession. It appears that you have suddenly become quite aggressive in developing real estate in Dubai. What are the reasons behind this rush? Dr Navjit Singh Anand: Dubai is the only oasis of peace in the whole of Middle East, if not the whole world. This place is poised to grow, and yet that would be

such an understatement to make. Starting from West Africa all the way to far east, if there is one place which is peaceful, calm, and safe, it is Dubai. That is why Dubai becomes such an enticing place for people to come, stay, invest and settle. Dubai has always been the right place for Goldline and we were just being patient for the right opportunity. If people are going to continually swarm into Dubai, they will need residential buildings, commercial complexes and industrial facilities. All these developments that take place will fortify our

business model that is spread across the construction sectors – residential, commercial, and industrial. The wheel of economy will grow these sectors, enrich itself and flourish this market. We have been contractors for the past 12 years and I always believed that if we are going to construct for others, why we should not make it for ourselves. So the rush has always been there, it is just that now is the right moment. Seizing the opportunity, we acquired 13 properties from Dheeraj and East Coast and in addition we have another six

COVERSTORY

At A Glance Dh680 m

total investment in 13 new real estate projects by Goldline Group

Dh3.67 billion total investment of Goldline Group in real estate

Dr Navjit Singh Anand, Chairman of Goldline Group with wife Jasmine Kaur Anand and daughters Sehej Anand and Saakhi Anand

plots. And this is only a beginning.

How much have you invested in acquiring these assets â&#x20AC;&#x201C; including the under-construction projects bought over from Dheeraj and East Coast (DEC)? Although the real estate market has plenty of opportunities for amassing huge gains, buying and owning real estate is a lot more complicated than investing in stocks and bonds. If you invest in a rental property, there are many responsibilities that come

along with it. Properties require the right amount of time and management to make them smart investments. We are already working on the acquired properties and have invested close to Dh180 million in these projects.

What is the development time-frame for all these projects? Real estate development is a granular process requiring design, planning, regulatory compliance, supplier negotiations, scheduling, administration, build-out, opening and facilities management. We will be starting the review

Dh180 million

invested in acquiring 13 plots of land in Dubai

Dh3.67 billion

of the projects we have at hand, from this year all the way up to 2016 end â&#x20AC;&#x201C; 2017 start. Every project is unique and the services are tailored to meet each project. Once the review gets completed, we should have the projects ready in a span of 10 to 36 calendar months from then, depending on the size and stage of development the different construction projects. Once completed, what would be the development value of these projects? In every project, we are able to apply over a decade of our

expected turnover of Goldline Group in 3 years

3,000

number of employees under Goldline Group payroll

1,500

people are expected to be recruited this year by Goldline Group

$680 million current annual turnover of Goldline Group

Dh1.4 billion construction order book value of Goldline in 2014 Gulf Property

COVERSTORY Dr Navjit Singh Anand, Chairman of Goldline Group, who has left the profession of treating patients in New York has come a long way in establishing a major business conglomerate in the UAE. He is one man who knows how to face challenges head on

development experience to coordinate and execute a total real estate solution. We have the expertise to actively transform properties into high yielding real estate. We estimate the projects to have a value close to a billion dollar upon completion.

How much are you investing in developing these projects? The properties that we bought over from Dheeraj and East Coast, had many number of its units already sold out without upfront returns. However, once we fund these projects with an initial investment in construction and a considerable percentage of the construction gets done, we will be able to gain back the trust of the buyers. This will in return attract more people to start purchasing these properties, which simultaneously triggers an influx of money back into them. As of date, we have invested close to Dh180 million in these projects. In addition, we intend to put another Dh500 million of our money to this. In total, considering these newly acquired properties and the previous that we already possessed, we will be invest-

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“Today we are at a very exciting place, engaged in businesses that constructively and sustainably nurture the economy. We operate at the nexus of a diversified array of industries ranging from metal commodities trading, recycling of plastic and lead, civil construction, infrastructure, demolition and earthworks, shipping and logistics, and education...”

– Dr Navjit Singh Anand

ing close to a billion dirhams; post which these investments in itself will start pumping money back into itself requiredfor future developments.

You have a very strong Construction, MEP and Piling division. Would the same divisions construct these projects – or would you tender them out to the suitable contractors? Most definitely we will be inviting tenders from every contractor. We have an independent external consultant who handles the tendering process with total profes-

sional integrity. As a matter of fact, we had tendered out the first two projects, and fortunately for us Goldline Contracting produced the least tender value and we won the bid. For one of the buildings that had been under construction when we purchased it from Dheeraj and East Coast, the contract for building and construction had been won by us beforehand, so we continue to deliver the same. For the piling jobs, we have currently invited tenders and the company which produces the best quote will win the project. For the same

the external consultant will make sure that we have a fair tendering process.

Your construction arm – Goldline Construction – has already been awarded a number of projects. How many construction projects are at hand, currently? Before we started our own development company, we had been contractors for 12 years. We always entered into tenders for projects, and now we cannot go back on our commitment for the ones we have already tendered. We have a commitment to-

COVERSTORY

wards our existing clients, many of whom we have worked over a long period of time to gain their trust, loyalty and confidence. So we will not fail them and will continue to complete the projects that are already in our bucket with full earnestness and would continue working with them. What is the total construction order book value of the projects being constructed by Goldline Construction? We have had a transformational year in 2014 with a significant increase in sales and

profitability owing to the increasing order book value. We had sales booking to the order of Dh1.4 billion coming from around 16 projects in varied sectors of the real estate market.

You are entering the market at a time when the real estate market has softened a bit following the 2013/14 price rally built along the Expo 2020 hype. Will you slow down the development projects and maybe phase them beyond 2020? We have a commitment to RERA and the land department. We also have a com-

mitment to our buyers. We are here, not for these 20 projects, we are here for the long run. A company who is here for longtime cannot play gimmicks in this market and expect to get away with it. Moreover, Goldline Properties is not the only company under Goldline, we operate in varied business verticals. So we cannot go slow and risk the reputation of the whole group by tainting the image of one. As a matter of fact, the slowdown does not mean that customers have stopped coming to the market, and

Today Dubai is the only oasis of peace in the whole world. Geographically, financially, politically, Dubai has positioned itself like Switzerland in Europe in the late 40s. When World War II affected every part of the world, Switzerland remained peaceful. It is the same with Dubai, no matter what the turmoil, Dubai remains peaceful. And because Dubai is safe, we will always find a continuous inflow of people to Dubai. That is why the properties will never cease to have a demand here and the reason why we are content to be in Dubai...â&#x20AC;?

â&#x20AC;&#x201C; Dr Navjit Singh Anand, Chairman, Goldline Group

Gulf Property

COVERSTORY

Dr Navjit Singh Anand, Chairman of Goldline Group and wife Yasmine Kaur Anand has built a solid partnership based on trust and dedication

that they have stopped buying apartments. It is just that, now the property market is maturing and customer shave become more conscious, cautious and demanding. They check the facts and check on the developer with the land department before they enter into any investments in the real estate. This over again fortifies the reason why we will continue to deliver with the same zeal. We have to live up to the expectation of the market, and we have to keep the trust of the people who kept their trust in us. If we con-

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tinue when the market is mellow we will gain a competitive edge when the market blooms.

How are you funding the real estate projects? All the projects are selffunded by Goldline. We know that Banks have had to face harsh times in past from the real estate market, and are now more cautious, a bit more protocol than before but they providing their complete support. And we have a good advantage as we are a diversified group so the comfort level of the banks is good with us.

What are your plans beyond the UAE borders â&#x20AC;&#x201C; such as the GCC and India? Today Dubai is the only oasis of peace in the whole world. Geographically, financially, politically, Dubai has positioned itself like Switzerland in Europe in the late 40s. When World War II affected every part of the world, Switzerland remained peaceful. It is the same with Dubai, no matter what the turmoil, Dubai remains peaceful. And because Dubai is safe, we will always find a continuous inflow of people to Dubai. That is why

the properties will never cease to have a demand here and the reason why we are content to be in Dubai. In addition to this we have been receiving tremendous support from Sultan Butti Al Merjen, Essa Saeed AlMansoori, Khawla Mohammad, Sharaf Ali Alshami and many other prominent officers of RERA and Dubai Land Department. I have personally met them and they have all been very helpful and very encouraging. They realise that we are taking over a troubled company and acknowledge our intentions are righteous. All

COVERSTORY

The man behind Dr Anand

leviate the pressures that come with running a global enterprise. His greatest regret is the limited amount of time he has spent with his kids. He is now trying to change that, by taking exotic annual vacations and impromptu short breaks with the family. Dr. Anand, nominated Ambassador of Madagascar in the UAE and Chairman of Goldline Group is indeed a hard man to pin down for a tete a-tete. Getting an appointment was easy enough, but receiving his undivided attention for an interview isanother matter altogether. Dr. Anand, believing in an open door policy, personally attended to the stream of employees, bankers, consultants and business associates, stopping by his offices, to discuss possible business opportunities and new ventures, or to reinforce commitments for current and on-going projects. In recent months, he has made the biggest foray in the UAE’s real estate market with an investment to the tune of Dh3.67 billion ($1 billion) in 13 projects. g

man with a never say die attitude, rising three times from the ashes and now contributing his might, to nurture the world’s greatest asset – the next generation – listening to his journey, learning about his achievements, seeing his work ethos and insatiable drive, it would seem that the completion ofany project he sets his mind to, is an automatic foregone conclusion. Dr. Navjit Singh Anand is 54 years and lives in Dubai with his wife Jasmine Anand. A family man, he is the proud father of two daughters. His eldest daughter Sehej is 17 years and attends North-Eastern University, Boston, Massachusetts, while his younger daughter Saakhi is 11 years and studies at the American School in Dubai. Dr Anand loves his music and regularly escapes to the movies with his family, to althe people from Land development and RERA have helped and cooperated whole heartedly. I see the confidence they have gained from our financial stability, and our project management and delivery capabilities, for they now have let us have full control. It is this support and the very fertile market that Dubai presents us with, which leads to presently not focus on any other market but Dubai.

Will you venture into hotel development as well and perhaps operate them? The government wishes us

to develop three star hotels or hotel apartments. We will be exploring these possibilities and will grab an opportunity if an interesting project comes up. But we intend to limit ourselves to be developers and contractors and will not want to extend our arms to hotel operations. We are also looking forward to working with the Government of Dubai for low cost housing for expats.

What is your view on the current state of the UAE's real estate market? UAE’s real estate market has a long way to go. I see it cur-

rently as the most underpriced market in comparison to any of its near counterparts– be it India, Singapore, London or NewYork. Any of these top countriesare at the least 1½ to 4 times more expensive than Dubai and in fact most of the things in Dubai is far undervalued. So Dubai is yet to reach its prime. How is the outlook for the UAE's real estate market? UAE’s real estate market is very strong and is bound to flourish. This market is not merely residential. When people come, stay, and relax,

they will need houses, offices, schools, amenities, supermarkets, hotels, and commercial complexes. As people more and more relish these facilities, they will begin to invest and build businesses here, for which they will require offices, factories, ware houses and industrial facilities. Subsequently they will bring in people for support, who in turn will need these very same facilities at different levels; so you see how the cycle will simply get bigger and bigger; it takes on a virtuous cycle of growth and development. g Gulf Property

COVERSTORY Goldline Business Tower

Garden Heights

Goldline Group to roll out massive projects

he multinational, blue-chip organisation, Goldline is a conglomerate of diverse business groups that spans across a wide range of industries like education, properties, contracting, metal recycling, shipping and logistics, oil and gas and building demolition. Incorporated in 1991, Goldline is promoted by Dr. Navjit Singh Anand and his wife Jasmeen Kaur Anand. Starting with a business in recycling metals, Goldlineâ&#x20AC;&#x2122;s pioneering and entrepreneurial spirit helped it flourish and embrace varied indus-

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tries and geographies to evolve into an organisation with its present annual turnover of over $680 million (Dh2.5 billion), growing steadily at 11 per cent annually. Currently employing more than 3,000 people from over 23 nationalities across its business units, Goldline has established physical presence in over 14 nations across the four continents. Aspiring to create enduring value for the communities and stakeholders it serves, Goldline rests its foundations over its institutional strengths derived from customer-centricity, research and develop-

ment, product differentiation, innovation, brand-building, entrepreneurship, trustworthiness, world-class manufacturing infrastructure, dedicated human resources and its value-driven business operations. â&#x20AC;&#x153;Today we are at a very exciting place, engaged in businesses that constructively and sustainably nurture the economy. We operate at the nexus of a diversified array of industries ranging from metal commodities trading, recycling of plastic and lead, civil construction, infrastructure, demolition and earthworks, shipping and logistics,

and education,â&#x20AC;? says Dr Anand. Delivering business value for its customers by giving them the best economic proposition for their businesses, Goldline provides them with products, services and solutions with the best quality. Leveraging internal synergies residing across its diverse businesses, Goldline lends a unique source of competitive advantage to its products and services. With a carefully planned and actively implemented entrepreneurial and diversification strategy, Goldline intends to capitalise on

COVERSTORY

The Estate

Dr Anand with his key team members

favourable economic conditions and governmental support, to harness new and promising opportunities for building more multinational businesses to help fulfil the aspirations of its stakeholders and demands of the marketplace. “Our constant quest to be extraordinary has established Goldline as the first choice for our customers in the ventures we undertake. We adopt a business model that combines technology and information with on-theground service and training to deliver lasting relationships with our customers. By

always remaining connected to our customers with intimate knowledge on their operations, we are able to bring informed insights to our offerings,” Dr Anand says. “Goldline might have come a long way in these 20 years, but we still embody the fervour of a start-up – in our energy level, in our creative approach towards problem solving, in our excitement while attaining targets, and in the flexibility to mould ourselves as per the needs of the industry. In this journey many a lessons have been learnt, initiatives taken and benchmarks established.

With a thrust on innovation, we always consider how each solution reduces cost, increases efficiency, minimises use of natural resources and improves human and environmental safety – through sourcing, manufacturing, transportation and delivery, use, disposal and recycling. “Our work for our customers has naturally led us to collaboration within industries and across sectors to address global challenges. We know that our customers are counting on us to help them succeed and grow, and meet their own ambitious

sustainability goals. Our growing global team is eager to exceed their expectations.” Goldline recognises its responsibility as a corporate and are committed to bring a positive impact to its partners, shareholders, employees, customers and community by delivering growth and sustainable value. Goldline’s business principles have been governed through formal guidelines that uphold its code for business conduct. These guidelines lay the foundation for the expectations we place for the directors, management team and employees while conducting business operations. Goldline’s corporate governance guideline provides – the framework for setting objectives, the means for attaining targets, and the measures for monitoring performance. Goldline attributes true development of the community to the strengthening of its pillars – the children. Pursuing our aim for investing in the future generation, we build facilities that provide children with affordable, quality and endearing learning experiences. g Gulf Property

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UAE realtors cash in on Expo 2020 hype in 2014

Indrajit Sen Senior Reporter

scalating property prices and rents helped property developers to book hefty profits last year, banking on the hype created right after UAE’s historic win of the World Expo 2020 bid in November 2013. This happened after years of struggling that resulted in cost cutting meas-

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ures such as job losses, salary cuts and putting projects on hold since 2008-09 when the global financial crisis hit the Gulf’s real estate markets. Emaar Properties recorded a 30 per cent increase in its net operating profits to Dh3.35 billion last year, up from Dh2.58 billion recorded in 2013. Nakheel reported a 46 per cent jump in net profits to Dh3.68 billion, up from Dh2.57 billion while Deyaar reported an 82 per cent jump

in net profits to Dh281 million in 2014 compared to Dh154 million in 2013. Damac Properties, which listed its shares in London Stock Exchange and Dubai Financial Market in recent months, reported a 46 per cent increase in net profits to Dh3.44 billion, up from Dh2.35 billion reported in 2013. However, the biggest gainer in terms of jump in profitability is Union Properties which recorded 171 per

cent increase in net profits to Dh833 million, up from Dh307 million reported in 2013. In terms of growth rate, Abu Dhabi-based Aldar Properties reported the slowest growth in profitability – just 2 per cent to Dh2.27 billion in 2014, rising marginally from Dh2.23 billion in 2013. However as the market slides from the artificial hike to a more realistic level that the economic fundamentals could support, outlook for this year’s performance does not

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UAE developers’ performance 2014 Developers

Emaar Properties Nakheel

Aldar Properties

Damac Properties

Deyaar Development

Union Properties (9M)

appear that rosy, if popular opinion is to be believed. “This rate of growth is clearly unsustainable and since the middle of last year, the markets have has seen a welcome stabilisation – with little or no change in either prices or rents in the residential sector over the past six months,” Craig Plumb, Head of Research at Jones Lang LaSalle, told Gulf Property in an exclusive interaction on the performance of the real estate companies.

2014

Revenues 2013

2014

Net Profits 2013

Change

9.89 bn 10.3 bn –4%

3.35 bn 2.56 bn 30%

6.55 bn 5.38 bn 22%

2.27 bn 2.23 bn 2%

1.04 bn 722 m

281.9 m 154.5 M 82%

N/A

7.38 bn 4.49 bn 64% 45%

1.73 bn 2.13 bn –19%

3.68 bn 2.57 bn 43%

3.44 bn 2.35 bn 46% 833.8 m 307 m

Looking Back: Growth in 2014

The real estate market experienced a rapid rate of growth from 2012 to 2014, backed by a number of positive factors. All sectors of the market saw some growth in prices and rentals during this time, with the most rapid increase in the residential sector (where average house prices increased by 56 per cent between mid-2012 and

171%

mid-2014), says Plumb. “In a market upturn, not only are there more sales, but the level of prices and rentals are increasing, both of which have had a positive impact on the performance of developers in Dubai,” he says. Experts also believe that some residential developers registered revenue growth based on unit sales through 2014 as well as payments made for units sold in 2013. “Anecdotally, the 2014

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growth is probably primarily due to strong sales in the first half of 2014; transaction volumes seemed to slow for the completed and off plan markets in the second half of the year, particularly in Q4,” says Jesse Downs, Managing Director, Phidar Advisory. Some real estate developers concentrated on building income-generating assets in 2014 and the revenues contributed significantly towards their net profits. Hotel apartments proved to be a high-income generating asset, as the steady flow of tourists kept occupancy rates high in Dubai, and revenues continued to rise. Damac diversified its portfolio by raising its hotel and serviced apartment portfolio and it seemed to have paid off well for the developer. “In some cases, lower profit margins can be mitigated by aligning a project with a reputable brand to generate premiums,” says Harmen De Jong, Partner Development Consultancy and Research, Knight Frank. “Damac is one of the developers which is known for having done so. In this context we foresee continued demand from developers for 5-star brands in Dubai. This primarily applies to developers of mixed-use projects who acknowledge the value add of a premium (hospitality) brand. For instance, residential real estate commands higher premiums and absorption levels if it’s part of a mixeduse complex anchored by a reputable hospitality brand. Because prospective buyers will only see the value add if the brand represents a desirable lifestyle, we expect premium hospitality brands to remain in demand.” Plumb agrees saying, “Many developers have Gulf Property

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Deliveries push Nakheel profit 43%

akheel recorded a net profit of Dh3.68 billion, representing a 43 per cent increase on last year’s net profit of Dh2.57 billion on higher sales and deliveries. The strong financial performance in 2014, driven by the continued delivery of residential units and plot sales, underpins investors’ confidence in Nakheel, the company said. Nakheel handed over 1,117 units to customers in 2014. Nakheel has now delivered 8,837 units to customers since its restructuring began in 2010. Nakheel Chairman Ali Rashid Lootah said, “[The year] 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.” Interest in Nakheel’s expanding number of retail projects swelled in 2014, with almost 7,000 units at Deira Islands Night Souk and Warsan Souk preleased 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 last year. “We will continue to build on the success of 2014 by releasing more units for lease,” Lootah said. g

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recognised the attraction of holding securely leased income producing properties, rather than selling units to developers. This applies to both the residential sector, where Nakheel have announced major new projects for rental in the Jebel Ali area, and also in the office market where tenants prefer single owned space rather than that sold on a strata title basis.” We have seen multiple developers turn to the hotel/serviced apartment sector. From an individual developers perspective it can seem sensible because these assets theoretically allow developers and investors to mitigate risk by appealing to two distinct demand groups,

namely, visitors and residents. However, there are a number of assumptions embedded in this equation, according to Downs. The quality of a typical residential building depends largely on development basics like location, layouts, and design implementation, she says. Furnished apartments add a completely new layer of risk comprised of both the quality and suitability of furnishing. A beloved luxury brand may market well, but may not be suitable for home décor or may not suit local demand. Adding servicing to a furnished apartment adds yet another layer of risk on a project and expands the risk profile from fixed assets to

operations. So the system now has moving parts and the risk equation includes both static risk and dynamic risk. Of course, if the developer ties up with an international operator with a long track record of delivering reliable service, then the risk for investors is often mitigated. However, this is often not the case with developers creating new brands with little or no track record. Of course, there are also home grown success stories, like the Address brand created by Emaar, but this brand was created through significant investment in human capital and well located and well design physical assets, she believes.

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Income from hospitality, retail powers Emaar profit

maar Properties, developer of the world’s tallest tower Burj Khalifa, recorded a robust year when it shelled out Dh17.12 billion dividends to shareholders. However, its profits were powered by rental income from retail, hospitality and shopping malls that fetched Dh5.36 billion, or 54 per cent of the total revenue. At Dh5.36 billion, it is 12 per cent higher than the Dh4.8 billion generated in the previous year. The company’s international operations also recorded robust growth with FY 2014 revenue at Dh1.89 billion, totalling 19 per cent of the total revenue. This marks a growth of 63 per cent compared to Dh1.16 billion in FY 2013. Mohamed Alabbar, Chairman of Emaar Properties, Perhaps more concerning are the developers without a substantive track record of achieving development basics now trying to manage these multiple layers of risk. Time will tell whether they will succeed, but, for now, investors should be aware of these risks. The bottom line is that the demand risk may be mitigated, but the development and operational risks are often higher. So can developers mitigate their risks by expanding their incoming-generating assets, as well as rental portfolio? “They could but it really depends on the objectives of these developers in general and on their investment horizons in particular. In some cases, lower profit margins

can be mitigated by aligning a project with a reputable brand to generate premiums. Damac is one of the developers who is known for having done so,” De Jong says. “A portfolio of income producing residential real estate has an entirely different return profile compared to a business which is geared towards building and selling off-plan. Moreover, a developer who is skilled at building and selling off-plan such as Emaar and Damac will need to institutionalise a whole different skillset if it wants to focus on retaining its residential assets. Property management and asset management become critical in such a case.” The residential segment

said, “[The year] 2014 was a robust year for Emaar as we recorded positive growth across each of our three core businesses – property, shopping malls and hospitality – as well as in our international markets. We created long-term value for our stakeholders through our record results, buoyed by the upbeat performance of Dubai’s growing economy.” Alabbar said that Dubai is now firmly positioned as the centre of international trade flow and a global hub for business, leisure, retail, hospitality and fashion. “With Dubai International clinching the honour as the world’s busiest airport for international passengers welcoming 70.4 million people and The Dubai Mall continuing to be the world’s mostvisited retail destination recording around 80 million visitors in 2014, the city’s positive growth will continue to energise our operations across all business sectors in the coming years,” he said. g experienced a period of relative stability during the second half of 2014, with rental rates remaining broadly flat. Over the year, modest growth of around 7 per cent was recorded, compared with 24 per cent during 2013, according to global property consulting firm CBRE’s yearend 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, CBRE predicts. “Over the past 12 months the sales segment has comprehensively outperformed the rental market, recording an 18 per cent growth yearon-year as compared to 30

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“This rate of growth is clearly unsustainable and since the middle of last year, the markets have has seen a welcome stabilisation – with little or no change in either prices or rents in the residential sector over the past six months.”

– Craig Plumb, Head of Research, Jones Lang LaSalle

Gulf Property

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“A portfolio of income producing residential real estate has an entirely different return profile compared to a business which is geared towards building and selling offplan. Moreover, a developer who is skilled at building and selling off-plan such as Emaar and Damac will need to institutionalise a whole different skillset if it wants to focus on retaining its residential assets. Property and asset management become critical”

– Harmen De Jong, Partner, Knight Frank

Gulf Property

Jones Lang LaSalle expects average residential prices in Dubai to fall by up to 10 per cent in 2015, with downward pressure also on hotel performances as the market becomes more competitive...

per cent 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, Mat 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 per cent 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 further said. However, despite the market stabilising and sales volumes declining in the final months of 2014, annual financial results declared by the major players recently show that they have recorded strong profits for the year, far better than 2013.

Looking Ahead: 2015 – A Year of Challenges

As prices and rents are under pressure, sales volumes continue to fall and the market begins to cool down, one wonders how the property developers will fair this year. Some of the developers have already begun to take precautions against possible losses. Some have started to cut down the marketing budgets while others started to slash workforce. Some are mulling project delays. However, Nakheel Chairman Ali Rashid Lootah allays

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Akoya powers Damac profit

the fear, saying, “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.” Jones Lang LaSalle expects average residential prices in Dubai to fall by up to 10 per cent in 2015, with downward pressure also on hotel performances as the market becomes more competitive. While some are call-

ing the current market trend as clear signs of a slump, most others are confident it is a necessary correction, which happens in all other mature property markets. But how much of a challenge will 2015 be for the major names? “The recent decline we have seen in residential prices, albeit moderate, will have a knock-on effect on off-plan sales. There may be scope for further negative growth in 2015, especially where it involves villas and townhouses located further inland. This doesn’t necessarily mean that revenues will decline as lower price points may make property purchase more attractive for

buyers. However, margins especially where they pertain to residential sales, are likely to come under pressure,” De Jong says. But experts suggest there are alternatives to overcome these challenges of lower revenues and profits. One option is to focus on developing a small number of niche products backed by a sales model incorporating only a small proportion of off-plan sales, recommends Downs. “Some developers already base feasibilities on this structure. It creates more sustainable projects less likely to encounter stalls or delays due because the financing is secured,” she says.

rivate sector developer Damac recognised revenues grew by 64 per cent to Dh7.38 billion in the twelve months to December 2014, comprising development income attributed to the delivery of 3,553 units across eight projects; alongside land sales at flagship developments Akoya by Damac and Akoya Oxygen, which generated revenues of Dh3.2 billion, accounting for 43 per cent of total revenues. Net profit for FY 2014 increased by 46 per cent to Dh3.44 billion, up from Dh2.35 billion in 2013; driven by the growth in revenues. “The strong increase in recognised revenues during the year highlights the successful delivery and sale of land and units across a number of projects, as well as the appeal of our diverse product base to customers around the world,” Hussain Sajwani, Executive Chairman and Chief Executive Officer of Damac said. “The launch of Akoya Oxygen in 2014, coupled with the ongoing development of our extremely popular Akoya by Damac development, has supported and bolstered these higher revenues. Our growing hospitality arm and retail offering through The Drive at Akoya complement this residential focus and add another dimension to the exciting, modern lifestyle we are trying to create for our customers,” he further said. g Gulf Property

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RAK Properties profits touch Dh155.74 m on asset value

AK Properties PJSC achieved net profits of Dh155.74 million in 2014, which demonstrates the company’s strong performance, particularly across the last quarter of the previous year that led to reaching revenues worth Dh297.82 million. However, the company did not reveal the comparative profit growth rate. Mohammed Sultan Al Qadi, Managing Director and CEO, RAK Properties, stated that the strong performance recorded in 2014 reflects positively on the current value of its assets, estimated to be worth Dh4.7 billion. “[The year] 2014 has seen an impressive growth in our business portfolio, in conjunction with the allocation of a budget of Dh1 billion to develop and expand the Mina Al Arab development project and the completion of new facilities that include an environmental hotel and a set of residential villas as part of projects that are being implemented during the current year,” Qadi said. “The results of Q4 2014 also reflect the increased level of investments being made in Ras Al Khaimah as it continues to attract regional and international investors to take advantage of its many potential opportunities,” he further said. g

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While some are calling the current market trend as clear signs of a slump, most others are confident it is a necessary correction, which happens in all other mature property markets. But how much of a challenge will 2015 be for the major names?

“Investors should be aware of this issue and the risks of buying into a project where the financing is highly dependent on off-plan sales. The market definitely needs new supply, but primarily in specific income brackets. Less reliance of off-plan sales, reduces the noise from speculation and allows banks and private investors to play a more prominent role in vetting new projects,” she further explains.

Plumb is however optimistic of the current market slowdown and predicts that these ‘more stable market conditions’ will prevail for the next 1 to 2 years. “This is regarded as a welcome sign of market maturity and should help Dubai retain its position as a competitive city in which to live and work,” he believes. Call it stabilisation or slowdown, there are others who believe that this period is

going to continue for a while longer, till 2018 at least. Downs feels that any market rebound will depend on a ‘confluence of exogenous and endogenous factors’. She explains, “While the US dollar remains strong, demand for Dubai real estate is likely to remain tempered and yields should continue to guide market trends. As supply expands, rents are expected to soften. Since there’s also upward pressure

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DSI reports modest profit

ven construction companies registered good profit margins, as they bagged multiple contracts from real estate developers in Dubai. Drake & Scull International PJSC (DSI) reported a net profit of Dh110 million in 2014, while their revenues rose to Dh4.83 billion. Revenues recorded for the fiscal year were flat compared to last year and were primarily generated by the Saudi Arabia and UAE markets, each contributing 43 per cent and 26 per cent respectively. The general contracting and engineering businesses generated 40 per cent and 51 per cent of the cumulative revenues achieved in fiscal 2014. Profitability for the fiscal year was impacted by the delays in the KSA market in the General Contracting sector and the UAE receivables provisions which affected the overall operating and net margins of the group. The Oil & Gas business delivered solid margins and consistent results throughout the fiscal year contributing 50 per cent of the consolidate bottom line on yield, property prices should decrease at a faster rate than rents. This is all assuming property and facilities management fees remain constant. An increase in those fees will amplify sale price downside risk. Since the US dollar and therefore dirham are expected to remain strong in the near term, then this trend will continue.” “In two to three years, the price of oil has the potential

to hit Dubai’s economy, so, if oil prices stay low, then Dubai’s economic growth could potentially slump in late 2016 and 2017, until the additional boost of Expo job growth starts in 2018. It difficult to accurately predict all elements that potentially influence the market, expect the slump to continue through 2015. Thereafter, we’ll probably experience some volatility until the market stabilises in 2018,” she

in 2014. DSI managed to win Dh5.34 billion worth of new projects in 2014. The UAE market and particularly Dubai witnessed accelerated growth for DSI as total project awards in its home market reached Dh1.4 billion in fiscal 2014. The order backlog reached a record high of Dh14.4 billion representing a year on year increase of 20 per cent. KSA and the UAE markets remain the largest contributors to the backlog accounting for 34 per cent and 18 per cent respectively as of December 31, 2014. Commenting on the results Khaldoun Tabari, CEO of DSI said, “The economic scenario in our region underwent a rapid change in the last few months which has had an impact on the regional construction industry.” “A cautious sentiment in the real estate sector has led developers to become more price conscious, which has lengthened the project development cycle in all our key markets. This has resulted in delays in our collections which created a slowdown in our revenue generation. The impact of this also affected our profitability margins,” he further said. g predicts. However, despite the odds, some developers are going ahead with their projects. Wasl and Danube have recently held sales meetings where two freehold projects have been sold out at launch in December 2014 and January 2015 – within a gap of just a few weeks. This also proves that if developers remain committed to delivering quality, there won’t be any shortage of buyers. g

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“In two to three years, the price of oil has the potential to hit Dubai’s economy, so, if oil prices stay low, then Dubai’s economic growth could potentially slump in late 2016 and 2017, until the additional boost of Expo job growth starts in 2018. It difficult to accurately predict all elements that potentially influence the market, expect the slump to continue through 2015. Thereafter, we’ll probably experience some volatility until the market stabilises in 2018.”

– Jesse Downs, Managing Director, Phidar Advisory

Gulf Property

Dh30bn Desert Rose project takes off GOGREEN

Gulf Property Exclusive ubai Municipality is finalising a tender for detail designs for a Dh30 billion mixed-used development on Dubai-Al Ain road – called Desert Rose – that might change the emirate’s real estate sector. The project is expected to host 160,000 people when completed by 2020, a top Dubai government official told delegates at a recent

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conference in Dubai. “We expect to award the first tender within a month while infrastructure works will start later this year,” Abdulla Mohammed Rafia, Assistant Director-General for Engineering and Planning Sector ay Dubai Municipality, said at the Destination Dubai 2020 Conference organised by MEED Events. “It will be a sustainable city covering 4,000 hectare of land and offering affordable living for expatriates. The city’s population and their lives will be powered by a 200 megawatt solar power

plant and will have a green belt.” At the centre of the development will be a large community centre and a shopping mall that will be connected through a light rail line for the residents to shop for their regular groceries, pharmacies and clinics for healthcare services. The light rail line will connect the project with the future extension of the Dubai Metro and Union Railway – which is currently under construction. “Desert Rose will have facilities for eco-walk and cy-

cling with the walkways will be covered with adequate shades from trees,” Rafia said. “It will have an environmentally-friendly infrastructure. It’s carbon footprint will be reduced by 300 tonnes a year due to its sustainable living. Every homes will have solar panels on their rooftops that will generate power. There will be enough plantation to provide adequate shading on the walkways and create a green environment. Overall, the project will have a climateresponsive architecture and

GOGREEN An artist’s impression of the central avenue of Desert Rose project. A light rail will connect the locality with the Dubai Metro’s extension and the Union Railway

At A Glance

Dh30 billion

development value of Desert Rose project

30,000

homes are expected to be built at the project

160,000

people are expected to live within Desert Rose community when completed

10,000

affordable homes are to be built within Desert Rose

93,000

hectares covered by Dubai’s urban development

25,000

hectares to be developed in Dubai to meet the future population demand

2.8 million

Dubai’s population expected in the year 2020

4.5%

growth in Dubai’s economy expected year-on-year within the next few years

4,000

hectares will be covered by the Desert Rose project Gulf Property

GOGREEN

A desert rose

the project will have a natural setting. “We are going to use and re-use recycled sewage water for irrigation. It will have zero emission and will consume zero energy from outside supply. All its energy needs will be met by the solar power generated by the panels on the rooftops and the solar power plant. “Desert Rose will also have a large-scale housing for UAE nationals with villa neighbourhoods designed like the Desert Roses.” The project’s concept design has been completed, followed by detailed designs.

Gulf Property

Abdulla Mohammed Rafia, Assistant Director-General for Engineering and Planning Sector at Dubai Municipality

Dubai government has already given a go-ahead to the project. It will have an eco-park to generate energy from waste. “We are identifying a consultant for the development of the project,” Rafia said. The project will host 10,000 affordable homes for expatriates that will be located at the heart of the development close to the city centre. In addition to these, there will be 20,000 plots for the development of luxury homes for the UAE nationals. Rafia said, following the infrastructure contract, his organisation will built the

GOGREEN

An artist’s impression of the luxury homes to be built for UAE nationals at the Desert Rose project that will be clustered in a design format that would look like desert rose flowers – to reflect on the local heritage. Each block of villas will form the shape of the desert rose flower.

community facilities and a few clusters of affordable homes – to make it a sustainable development. “We have adequate funds to execute the project,” he said. We do not need bank or external funding. However, building the community facilities will attract the residents to shift to the project as it will be located at a distance from downtown Dubai,” Rafia said. “Besides, it will help us manage the development of Desert Rose more efficiently as the retail units and community centre outlets will start fetching rental returns

along with the initial residential units.” Rafia said, his organisation could deliver the project even before 2020. “We have, in our development plan, built in flexibility. We could fasttrack and deliver it 18 months before the intended delivery date,” he said. The project will be a major showpiece for Dubai just as it prepares for the Expo 2020 mega event that could attract up to 25 million visitors during the six months of its duration. The project, once developed, will also plug a major development gap Dubai has

witnessed – affordable housing. “For years, Dubai has been focussing on luxury and super luxury properties that made the city almost unlivable for the middle income groups,” said a property analyst. “Due to high rent and inflationary pressures, the middle income groups have been marginalised over the years. You can not built an economy of a state by alienating the middle class and push them to Sharjah or Ajman. “Desert Rose will fulfill a major development hole in Dubai’s overall economic development and make it a

more sustainable economy in the long run.” Dubai government had built a series of affordable homes for government employees spread across Hor Al Anz and Gusais in Deira, Bur Dubai, Karama, Satwa and a few other places. In these areas low-lying buildings were built in close proximity that looked more like colonies where Dubai Municipality, employees at the hospitals and other offices used to live. Rents used to be almost negligible that helped them retain a family life with families living with the breadwinners even with a low income. However, since the real estate boom started right after the opening of Dubai’s lands to expatriates on a freehold basis in 2002, developers have systematically overlooked the important segment – middle income group and affordable housing. Every developer was trying to outshine the other in promoting luxury living. Desert Rose will fulfill that important gap and help Dubai host a larger pool of consumers who will work Gulf Property

GOGREEN

and live in Dubai. Meanwhile, Najib Mohammed Saleh, the head of Dubai Urban Plan 2020 at the Dubai Municipality, had said at an earlier conference that community facilities and affordable housing areas shall be addressed with policies and guidelines, and detailed land use plan in the upcoming Phase-5 of the Urban Master Plan. “A successful, livable city functions as its own ecosystem. It balances its social, economic and environmental needs through smart urban planning,” he said in

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his presentation. “The total urban area in Dubai now is 93,000 hectares. By 2020, we need another 25,000 hectares for different type of land use, residential commercial and industrial. We also have a target of keeping eight to 10 per cent of total land as conservation area and there will be provisions for a lot of open spaces and water bodies,” he later told Khaleej Times. Saleh said the revised plan for 2020 in the context of the Expo win has adopted a population projection of

2.8 million with a medium growth rate of 4.5 per cent per year. “We are also prepared to handle a high growth rate that is expected to see a population of 3.4 million by 2020.” While there would be developments all over Dubai, the maximum growth is expected around the Al Maktoum International Airport and DubaiLand. The plan also aims to limit the urban growth within the confines of Emirates Road, formerly known as the Dubai Bypass Road. “Dubai has crafted its eco-

nomic vision 2020, and to now fulfill that goal of being a global business hub and economic centre, our strategy is to prioritise the needs of its citizens and build on these whilst being socially equitable and environmentally sustainable, as well as being economically driven. To ensure the continued growth of the emirate, we are setting out to construct a livable city that is totally modeled around the needs of the people that inhabit it through intelligent urban mapping and efficient design.” g

GOGREEN There will be enough trees at the Desert Rose to provide natural shade to for people to walk or jog and to protect from direct sunlight

Gulf Property

INTERVIEW

Ajay Rajendran, Vice-Chairman of Sobha LLC, who is spearheading the companyâ&#x20AC;&#x2122;s growth in the UAE

Gulf Property

Sobha scales up activities in Dubai INTERVIEW

Gulf Property Exclusive

obha LLC, part of the Indian real estate developer Sobha Group, last month announced investments in expansion of its footprint regionally and globally. The company is in the process of opening five sales offices in London, Singapore, Riyadh, Doha and Kuwait City by July 2015 to tap into the growing demand for its developments in the

UAE, its officials said at a press briefing last month. “We have decided to open these sales centres to tap the global investors to promote our projects covering the international investor base,” Ajay Rajendran, ViceChairman of Sobha LLC – the Middle East arm of Sobha Group, told the media at the briefing. “This is to tap a wider investor base globally who see Dubai as a major centre for real estate investment. Dubai with its world-class infrastructure and connectivity is a magnet for attracting in-

ternational investment and our overseas centres will help attract investment to Dubai.” Rajendran said, construction activities at the company’s flagship mixed-use project Sobha Hartland has already commenced as the company has been on the ground for nearly a year now. “I’m glad to inform you that we have completed all the necessary paperworks to kick-start the infrastructure,” he said. “We have already started construction of the first of the two schools

planned within Sobha Hartland project, which will be ready in four months ahead of the academic calender in September this year. This will be followed by the construction of the hospitality and retail component that we intend to deliver by April 2017, so that the community facilities will be ready by the time residents starts to move in by 2017.” The whole idea is to first develop the community facilities before hand over of residential units, he explained. “This way, the residents will have all the facilities Gulf Property

INTERVIEW

within the neighbourhood fully ready and functional, as and when the start moving in,” he said. Sobha Hartland is a Dh14.6 billion (US$4 billion) development that is being built by Sobha LLC at Meydan City, on Al Khail Road. It is the closest freehold villa community next to Burj Khalifa – just three kilometres away from Downtown Burj Khalifa. Al Khail Road gives the project instant access to the major highways and roads network. Located three kilometers from the Burj Khalifa, the development is set to achieve a key milestone in September 2015 with the inauguration of the Group’s first international curriculum school, Hartland International School. The company plans to break ground on its signature villas and apartments, and its high quality infrastructure in Q2 2015. On the infrastructure development front, tenders for roads and utilities have been floated and bids received. Sobha has already delivered four projects in Dubai during the worst recession – from 2009-2012. The company, owned by visionary In-

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dian businessman, PNC Menon, Chairman of Sobha Group, was one of the first investor in Dubai’s real estate during the recession. He purchased the land from Meydan in 2012 to develop Sobha Hartland. “No one sees the top while at the bottom,” Menon said when he announced the project. “It is important to see the long-term potential of an economy. Real estate is a long-term business and investors should take a longterm view on assets, rather than be affected by short term situations. “I am a believer of Dubai economy’s long-term sustainability. Between London and Singapore, you will not a better place to invest.” With nearly four decades of experience in creating interiors of palaces and masterpieces in the Middle East, PNC Menon founded Sobha Limited in India in 1994 with a clear vision to transform the way people perceive quality in the real estate sector in India and the Middle East. Since its inception in 1976 (as Services and Trade Company) it has always strived for benchmark quality, a customer centric ap-

“It’s not a villa or an apartment – we are delivering lifestyle and experience – and that’s what is the most important thing for us and the buyers...”

– Ajay Rajendran

proach, robust engineering, in-house research, uncompromising business ethics, timeless values and transparency in all spheres of business conduct. Sobha Group has credentials of delivering 75 million square feet, with 38 million square feet of development under progress an annual turnover of Dh2.2 billion, employing over 28,000 people and a land holding of around 240 million square feet. These numbers, however, do not include the two significant developments in Dubai, viz., Mohammed Bin Rashid Al Maktoum City – District

One and Sobha Hartland. Following the delivery of buildings that were built during recession, Menon planned to take a bigger step – to develop mixed-use neighbourhood projects. Sobha Hartland will have 280 well-appointed villas, 1,800 apartments, retail outlets, water features – such as lakes and gardens, jogging tracks, schools, community centres, health clubs, spas, hospitality segment and a good infrastructure that connects various components of the development and gives easy access to residents and visitors. Ajay Rajendran said, “Sobha has been in the region for the last 40 years in the construction vertical and has been closely involved in the UAE real estate sector over the last decade. We strongly believe that the economic fundamentals for Dubai are stronger than ever and, therefore, the initiative to open overseas sales offices strengthens our commitment to Dubai’s longer term real estate growth.” Sobha’s phased release of the Hartland portfolio in the UAE in September 2014 received an immediate uptake. The high-end community

INTERVIEW

Ajay Rajendran, ViceChairman of Sobha LLC speaks to the media

“For investors in Sobha Hartland, payment plan is not the issue, it is the facilities, amenities, hand-over and other issues are of prime importance. We have not come across buyers seeking a more structured payment terms. This is a luxury develpment where price comes with premium. It is the closest freehold villa and mixed-use community from Burj Khalifa...”

– Ajay Rajendran

which will feature two international schools, a state of the art spa, hotels and cafes will be delivered in phases beginning in the first quarter of 2017. The development is resonating across geographies and nationalities, because of its contemporary aesthetics, elaborate open areas and close proximity to Downtown Dubai, creating a community, where people can live, work, play and visit. In an interview with Gulf property, Rajendran – who is spearheading the growth of Sobha LLC in the UAE and the Gulf – gave views on a wide-ranging aspects of the project and on the overall situation in the real estate sector. Excerpts:

Gulf Property: What is your view on the current situation in the UAE’s real

estate sector? Ajay Rajendran: There is no doubt that the real estate sector has softened. Reports suggest that prices are going to decline by 5 to 10 per cent this year. Ups and downs are part of the economic cycles in any business. However, one has to remember that this decline is at the backdrop of a 50-60 per cent jump in prices last year. So, the five to 10 per cent decline on a 50-60 per cent jump in last year still puts the prices on the higher scale. If we would have witnessed another 50 per cent jump in prices, I would have worried. Are we worried with the decline? Of course not. The current trend in real estate price is healthy for the market as it will drive investors back to the market. One thing is for sure – the

market will not see the repeat of 2008-09 scenario. The current range of price fluctuation is broadly in line with the market expectation and due to the strong regulatory environment.

How is Sobha Hartland sales activities going on and how is the market response? We are happy with the current market response to our sales activities. It is broadly in line with our sales expectation. However, we are mindful of the current market situation. As I said, real estate is a long-term business and one has to have a long-term view. We are here for the long run as we consider ourselves part of the Dubai economy and its growth story. Your decision to open

sales offices in key international markets comes at a time when sales at the domestic market appears to have declined and amid declining prices. Is that why you decided to tap international investors? Sobha is a regional company. Hartland is one of our many projects. We have a major footprint in India and other markets. Since we have such a huge range of properties spread across such a large geographical stretch, we have made a conscious effort to tap global investor base. These offices will promote sale of properties belonging to all our projects. So, the decision to open these offices are part of the group’s long-term strategy to tap international buyers and not prompted by sudden market conditions. We beGulf Property

INTERVIEW At A Glance

Dh48 billion

Sobha City in Thrissur, Kerala state, India

worth of projects are being developed by Sobha LLC in the city of Dubai

Dh14.6 billion value of Sobha Hartland project currently being developed in phases

1,800

apartments are being built at Sobha Hartland project

Dh2.2 billion annual turnover of Sobha Group

28,000

people currently working for Sobha Group

$760 million market capitalisation of Sobha Ltd in India

240 million

square feet of landholding owned by Sobha Group

75 million

square feet of projects delivered by Sobha Group

lieve, as a company, you act local and think global. This reflects our corporate growth objectives broadly in line with our long-term strategy.

Who are your buyers? We have a wider mix of nationalities. However, about 80 per cent of our buyers are end-users.

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They are expected to make Sobha Hartland as their home, once they receive their keys.

What is the price per square feet? It all varies from apartment to apartment and villas to villas based on location, size and specifications. However, broadly, it’s Dh1,600 per square feet for apartments and Dh2,050 per square feet for villas. You will see that the prices are very reasonable and comfortable for end-users.

What about the payment plan for buyers? Do you have an extended payment plan for the buyers? For investors in Sobha Hartland, payment plan is not the issue. For the buyers, it is the facilities, amenities, handover and other issues are of prime importance. We have not come across buyers seeking a more structured payment terms. You need to remember, this is a luxury develpment where prices comes with premium. It is the closest freehold villa and mixed-use community from Burj Khalifa.

For buyers of such properties, payment is not the issue. There are other aspects of their needs which is what we are determined to deliver. It’s not a villa or an apartment – we are delivering lifestyle and experience – and that’s what is the most important thing for us and the buyers.

Who is going to build the project? Have you identified a contractor? Sobha is an integrated developer and contractor. We have the entire value chain of real estate development under one roof. We have a strong design team, structural engineering team, construction arm and mechanical, electrical and plumbing team that will develop, construct and handover the project. So, for the construction and development, we have all in-house, including interiors, fit-out and finishing.

What is the delivery timeframe you have in mind? As we explained earlier, the first deliveries would be in April 2017 while the entire project is slated for comple-

tion for 2020. However, we could complete the project and deliver it 18 months beforehand, should there be a need.

Are you worried about the building material cost – in case the price fuctuates? I do not see that an issue. In any case, with the lower oil price, I do not see prices of building materials escalating for the time being. In fact, due to these factors, prices are going to be lower for a while. However, as developer and contractor, we have taken all these factors while putting the pricing mechanism in place.

What about financing the construction? Are you seeking bank finance? In such a large-scale project, you would expect a certain amount of debt and equity involved. However, when it comes to source debt, we are a very conservative company. Most of the finances are from the company’s own resources and we are comfortable with the current level of cashflows. g

Projects Galore

obha is one of the fastest growing and fully backward integrated real estate players which means unlike other developers Sobha LLC is involved in all areas of Sobha Hartland development from master planning, architecture, interior design, construction and even landscaping. This is quite unique and ensures complete control over timely deliver, cost and of course exceptional quality. The company has been creating innovative residential, contractual and commercial property solutions since 1976. Sobha Limited, listed in India, has a market capitalisation of $760 million. Sobha India has over 56,000 shareholders, 3,200 direct employees and over 15,000 indirect employees. It has completed 98 real estate projects worldwide, including India, the Middle East, Brunei and France. Sobha Group has completed 351 contractual projects across the Middle East, India and other countries. It has delivered 32 million square feet in residential projects across India and the Middle East. It has delivered more than 651 villas and townhouses and 8,823 apartments in India. The company has delivered 43 million square feet in commercial projects across India and the Middle East. It has delivered the Sultan Qaboos Grand Mosque, covering 4.47 million square feet, in 2001.It has built the Royal Palace of Oman. In India, Sobha served a large number of prestigious clients that include Infosys,

INTERVIEW Wipro, Taj Group, Dell, HP, Timken, Biocon, Institute of Public Enterprises (IPE), Bosch, and Hotel Leela Ventures. It has delivered the Global Education Centre for Infosys Technologies (1 millionsquare feet), the largest corporate training centre in the world, in 2009. Delivered the Infosys Leadership Institute (0.16 million square feet) in 2000.

clude Anantara Qasr Al Sarab Desert Resort, Kempinski, Yacht Club in Dubai Marina, Manipal University, Capital Golden Tower, IT Plaza and Sobha Sapphire. In Oman, commercial projects across a range of sectors include the Sultan Qaboos Grand Mosque, Al Bustan Palace Hotel, Crown Plaza, VVIP Louge in Muscat International Airport.

The company has 49 ongoing residential projects in the Middle East and India, aggregating to 84 million square feet of developable area. In India, residential projects are being developed in 24 cities and 13 states covering 29.4 million square feet. For its 35 ongoing contractual projects, the developer is using area aggregating to 11 million square feet. In the UAE, this includes two mammoth mixed use urban community projects worth $13 billion in Mohammed bin Rashid Al Maktoum City in the heart of Dubai, aggregating to 55 million square feet. The $4 billion Sobha Hartland, one of the largest mixed use developments in Dubai covering 8 million square feet of area (183 acres) Mohammed Bin Rashid Al Maktoum City: District One is valued at $9 billion. Both the projects are on prime Dubai land, which are just 3 kilometres from Burj Khalifa, the world’s tallest tower. Expected to be completed in 2020. In the UAE, handled commercial projects across a broad range of sectors in-

Sobha Hartland, Phase I, has launched 73 villas and 79 apartments. It has sold significant number in the past four months. It will break ground in first quarter 2015 for mock up villas and apartments. School construction is in full swing and will start the first academic session in September 2015. Tenders for roads and utilities are already floated and bids have been received. The 132 KV substation contract has already been awarded to Danway.

Current Projects

Sobha Hartland

Hospitality

It has more than 20 years’ experience and in hospitality (hotels) sector in India, Middle East, Brunei. The company has ompleted the interiors of various hospitality projects in India including Taj, Hotel Leela. It has renovated the interiors of Palais de la Mediterranean; the elegant, luxurious hotel was built in the early 1930s.

Education

Sobha entered the education sphere, building the first of the two premium schools

scheduled to open in Dubai in 2015. It is a firm believer in backward integration model. It is one of the key competitive strengths of Sobha, India. This literally means that the company has all the competencies and in-house resources to deliver a project from conceptualisation to completion. It has set up Sobha Training Academy, a training centre that offers world-class training in building construction with state-of-the-art facilities.

CSR

As part of its Corporate Social Responsibilities (CSR) activities, established Sobha Hermitage, a unique senior citizens’ home with worldclass amenities. g Young mothers’ homes for young mothers and their children. g Sobha Health Care, a primary health centre with high quality amenities for medical treatment. g Sobha Academy, an educational institution with most modern facilities, exclusively for the underprivileged children. g Sobha Icon, another educational initiative to improve the standards of government school students in higher classes. g Sobha Vocational Training Centre, which trains to develop skilled tradesmen from the economically weaker sections of the society. g Social rehabilitation scheme for the deprived people of the locality. g The facilities are spread over a land area of over 25 acres. g All facilities are completely free of cost to the beneficiaries. g Gulf Property

CONTRACTING

GCC completes Dh248bn worth of projects in 2014

Gulf Property Exclusive

he year 2014 witnessed a strong performance in the construction sector in the Gulf with the value of the completed construction projects touching Dh248 billion (US$67.6 billion) in the GCC countries last year, according to a report by Ventures Middle East, a research consultancy. Construction contracts worth Dh312 billion have

Gulf Property

also been awarded across the GCC last year – that might be hard to match in the coming years if oil prices remain as low as it is now (between $50-$60) – nearly half of the level it was a year ago (between $100-$115) per barrel. Residential projects worth $28 billion representing 41.5 per cent, dominated the overall construction sector’s performance while construction of commercial projects were worth $11.46 billion, representing 16.97 per cent and education sector worth $7.13 billion, representing 10.6 per cent of the total.

“Initial market indicators suggest sustained growth in 2015 with an estimated 21 per cent increase in construction projects awarded across the GCC,” the report said. The research also looked into 2015 and estimates projects for $72 billion, up 6.5 per cent from last year to be completed and $103 billion, up 21.2 per cent to be awarded across the year. Hospitality, medical and retail buildings were also completed – with total values of $4.4 billion, $3.72 billion and $854 million respectively. The top markets across all

sectors bar retail were Saudi Arabia and the UAE, with Qatar ranking top with completed retail projects worth $362 million.

GCC interiors market

The value of the GCC interior contracting and fit-out market in 2014 was $7.35 billion – with Saudi Arabia and the UAE showing the highest market share within the industry. Saudi Arabia was the highest ranking market with a 43 per cent share ($3.4 billion)

At A Glance

Dh312 billion

CONTRACTING

worth of contracts awarded in the Gulf in 2014

Dh248 billion

worth of projects were delivered in the GCC in 2014

$103 billion

worth of projects are to be awarded in 2015

$72 billion

value of projects expected to be completed in 2015

$28 billion

value of completed residential projects in 2014

$11 billion

value of completed commercial projects in 2014

$7.35 billion

value of land interior projects in the Gulf in 2014

$2.87 trillion

followed by the UAE valued at $2.3 bililon and representing a 31 per cent market share. For the second year running the residential sector accounted for almost half of the overall 2014 market with a market share of 41.95 per cent ($3.09 billion). The commercial sector followed with a 17.15 per cent share corresponding to a value of $1.26 billion and the hospitality sector with 13.51 per cent share and a value of $993 million – largely unchanged when compared to those completed in the respective sectors in 2013.

Construction sector in 2015

Looking ahead to 2015 projects, Ventures ME report project that the total value of completed projects would close at $72 billion with a further awarding of $103 billion worth of projects while the interiors market is also likely to grow by 9 per cent. “Real estate, construction and manufacturing sectors are expected to lead Dubai’s economic growth in 2015. They collectively represent 58 per cent of Dubai’s GDP,” Dr. Mohamad Lahouel, Chief

value of projects in the development stage in GCC

Economist of the Department of Economic Development, Government of Dubai, said at a conference in Dubai last month. However, the impact of the falling oil prices on the overall economy and the real estate sector remains to be studied carefully. The decrease in crude oil prices had affected the region’s stock markets badly in December and had wiped out the gains of the entire year in a few week’s time. “Lower oil prices are leading many in the GCC to wonder about the possible implications for real estate. In

the near-term, weaker sentiment and its impact on the residential property sector is the principal downside risk. Commercial property however should be able to shrug off such concerns as the region’s medium to long-term prospects remain strong,” global research firm Knight Frank said in its latest report. After hitting nearly US$108/barrel in June, the average Organisation of Petroleum Exporting Countries (OPEC) reference price fell to just under US$76/ barrel in December. Despite the sharp fall though, OPEC decided to leave its output ceiling at 30 million barrels per day(b/d) at the meeting in Vienna in December, a notable departure from its traditional stance of cutting production in order to prevent prices from sliding further. “There has been no shortage of animal spirits in the Middle East, particularly in the oil-rich GCC countries, Marios Maratheftis,” Head of Macro Research at Standard Chartered Bank, said. “These economies boomed in 2014 on the back of increased spending on infrastructure projects. Although GCC economies are taking active steps to diversify, government revenues are still highly dependent on hydrocarbon proceeds. The drop in oil prices in 2014 raises the question of whether GCC governments can keep raising government spending year after year without facing fiscal pressures,” Maratheftis said. Despite the pitfalls of lower oil price, companies remain confident on strong outlook. Gulf Property

CONTRACTING “Despite the recent decline in oil prices which has created a cautious economic environment in the Middle East and North Africa (MENA) region, we remain confident in our ability to refine our efficiencies and deliver improved profitability in 2015,” Khaldoun Rashid Tabari, Chief Executive Officer of Drake and Scull, a major contractor, said. “Our strategy of service diversification and integration, as well as our geographic footprint will help our versatile business model to ride through the current cycle of economic downturn in our region. “We continue to see the KSA and the UAE as the main drivers of the region’s economic development and expect to derive a large share of our business from these two vital markets. We also hope to see an upswing in Qatar’s real estate as the World Cup preparations gather momentum, while we anticipate Kuwait to continue its current levels of investment and development of infrastructure.” Danube Properties started construction works of its first two projects, Dreamz by Danube and Glitz by Danube. The launch of the projects marked the entry of the group into the real estate industry as a developer committed to deliver its promises. Danube Properties a wholly-owned subsidiary of the country’s biggest building materials supplier, announced its plan of making a gallant entry into the property market last year with their maiden project Dreamz by Danube – Dh500 million project of 171 luxury town-

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houses. Danube Properties awarded a construction contract to United Engineering Construction Co (UNEC) for the project last year. Rizwan Sajan, Founder and Chairman of Danube Group commented, “Both our projects are currently on track as per our initial plan. We expect the completion of our maiden project Dreamz by September 2016 and Glitz by July 2017 which fits exactly within the committed deadline. At Danube, it has always been our commitment to provide a range of innovative, value-added

services for our customers to foster mutual success and growth.” Following the success of the Dreamz by Danube project sell out within the first day of sale, the group launched their next project worth Dh300 million Glitz by Danube, which is now under construction at Dubai Studio City. The cluster of apartment buildings will redefine urban lifestyles with 300 luxury apartment units available in a mix of studio, one, two and three bedroom apartments close to the proposed Village Centre. However, Damac Proper-

ties has started the year with a flurry of construction contracts. It has awarded five major construction contracts worth a total of Dh1.2 billion within 45 days in 2015. These include a constrction contract for the first 981 villas at its new 55 million square feet master development, Akoya Oxygen, to Ghantoot Contracting and the main cnstruction contract to build Privé a two-tower serviced hotel apartment’s project overlooking the canal in the Business Bay area of Dubai to Seidco. The company has also been awarded the building of

Sustainability

CC countries are increasingly looking to sustainable and environmentally responsible developments as the region’s construction sector booms on the back of social infrastructure spending, according to industry experts. Overall, as much as $2.87 trillion worth of projects are in the design, bid or construction stage in the GCC up to 2025, according to Zawya Projects data, with $1.53 trillion worth of realestate projects under construction. GCC governments have acted swiftly in the past three years to embrace sustainable construction through education and legislation, creating business demand for ‘green’ development. Increased spending on social infrastructure and efforts to improve living standards and use outdoor space more

the iconic clubhouse which will serve the Trump International Golf Club, Dubai at the heart of Akoya. Civilco will be the main contractor of Celestia, a luxury hotel apartment’s development at the heart of Expo 2020 and Al Maktoum International Airport and Reem Capital will build Damac Properties’ luxury hotel apartment’s project, Vantage, in Jumeirah Village. Niall McLoughlin, Senior Vice President of Damac Properties, said “We have a strong belief in Dubai’s fundamentals and by making such a high level of invest-

ment in these construction contracts, we are demonstrating our commitment to owners to deliver high quality living experiences in good time.”

Building construction

The healthcare sector is expected to grow by 91.12 per cent from a value of $3.72 billion registered in 2014, to an estimated value of $7.11 billion in 2015. Qatar in particular will be the country with the majority of healthcare buildings completed worth a total value of $2.43 billion – followed by Saudi Arabia with $2.15 billion and the UAE $1.82 billion. Despite the huge increase in the healthcare sector, the

effectively are also driving the construction market and boosting outdoor projects, according to regional experts. “Sustainability is becoming more and more important to the Saudi market, we are seeing dramatic changes in how developers approach the market and how outdoor space is used,” said Robb Marinko, Landscape Architecture Manager at Dar Al Riyadh – Architecture and Design Services. “We are trying to create outdoor environments that are comfortable for people to visit, places where people are comfortable to sit, children are free to play and where you have given a reason for people to come and use that public space.” Environmental sustainability has also become a key issue for Qatar. Social infrastructure projects have been given significant allocations in the country's budgets to ensure that Qatar upgrades in every sphere to raise the building construction market will still be led by the residential and commercial sectors that together will account for over half of the market share concentrated particularly in Saudi Arabia, the UAE and Qatar.

Interior fit-out market

Out of an overall estimated market value of $7.35 billion, the residential sector will account for 41.95 per cent and $3.09 billion in value, followed by the commercial Sector at 17.15 per cent and $1.26 billion of value and the hospitality sector with 13.51 per cent and $99 million in value. When compared to 2014 figures, the healthcare sector will see the biggest growth

CONTRACTING

standards of living of its citizens in accordance with its Vision 2030. Strong environmental foundations have also been built in by adopting green codes of construction and environmentally friendly technology in the construction of stadia and other infrastructure to host the World Cup 2022 event. “GCC countries are increasingly embracing sustainable and green building development as they look to build long-term economic growth and improve social infrastructure,” said Nicholas Webb, Managing Partner of Streamline Marketing Group, the organisers of the Outdoor Design and Build Show 2015. “As governments look to further diversify their economies and cater to growing populations, we can expect this sector to become increasingly important in the future.” g with a huge 91.6 per cent increase and reaching a value of $569 million. The education sector is expected to see the biggest drop in value by 13.72 per cent from $571 million to $492 million. Frederique Maurell, Group Event Director for INDEX, the leading interiors exhibition, said: “[The year] 2013 was a strong year for the GCC building construction market with almost all sectors showing significant growth. For 2014 we’ve seen continued growth with Saudi Arabia, the UAE and Qatar doing particularly well. “Looking ahead to 2015 the forecast for both awarded and completed projects shows further increases again with particularly exciting times ahead for the residential and commercial sectors.” g Gulf Property

Expat Group plans to deliver 10,000 homes INDIAHOUSE

Gulf Property Exclusive

ith a whopping 200 million Indians moving from rural areas to cities within the next fifteen years, India is expected to see a massive pressure in urbanisation by 2030. India, as it stands today, is on the trajectory of becoming the world’s 3rd largest economy by 2020. Real estate continues to form a key ingredient for the success of

Gulf Property

India’s rising economy. With a population of 1.3 billion – 65 per cent in the working age category – India offers a huge market for real estate developers. As many as 377 million – or less than a third of India’s 1.3 billion population are currently living in towns and cities spread across its vast landscape. “More than 71 million people have moved from villages to cities over the last ten years and it is going to jump nearly seven folds to 500 million in the next fifteen years – that’s where the eco-

nomic challenges of urbanisation lies,” Santosh Shetty, Chairman and Managing Director of Expat Group – a major real estate developer and large contracting firm – told Gulf Property in an exclusive interview. “This also reflects the extent of future demand and where the opportunities lie for Indian real estate developers and contractors. So, while there might be temporary lull period here and there, the Indian real estate sector will have to grow due to simple factors related to demographics and urbanisation.”

With more than 10 million people being added to urban areas every year, India’s urban population is expected to reach about 810 million by 2050. Furthermore, over 2012-50, the pace of urbanisation is likely to increase at a CAGR of 2.1 per cent – double that of China. Housing shortage is related to urbanisation. The housing shortage in India has touched 18.78 million units. Often emphasis is laid on, 95 per cent of the shortage being in the economically weaker section (EWS) and low income group (LIG).

INDIAHOUSE

“More than 71 million people have moved from villages to cities over the last ten years and it is going to jump nearly seven folds to 500 million in the next fifteen years – that’s where the economic challenges of urbanisation lies...”

– Santosh Shetty

In this context, the Government of India acknowledging the importance of the housing issue, launched a mammoth goal that promises to provide housing for all its citizens by 2022. “The need to recognise urbanisation arises out of its sheer magnitude. The population of India stood at 1.2 billion in 2011, growing by 180 million over a decade since 2001,” said a report published by Confederation of Real Estate Developers’ Associations in India (Credai). The urban population grew more than the rural population, for the first time in Indian history. The rate of rural population growth has even plummeted in many Indian states. The transitioning of rural areas to urban centres is evident from the fact that more than 2,500 settlements that were previously defined as villages have been reclassified as towns as per the latest 2011 census. Cumulative commercial real estate loans has tripled to reach Rs1.42 billion in the

last six years up to November 2013, whereas individual housing loans doubled to reach Rs5.18 billion during the same period. Urbanisation is an essential condition for economic growth of any nation. “One of India’s biggest advantages is its potential demographic dividend – a rapidly growing population of young people in the working age bracket,” says Anuj Puri, Chairman and Country Head of Jones Lang LaSalle (JLL) India. “This young population will gravitate unerringly to the country’s urban areas to fulfill their own dreams and potential as the country’s renewed economic growth creates more and more jobs in its cities.” As at the fourth quarter of 2013, the total value of under-construction real estate in India stood at $234 billion. This value has been growing at a compounded annualised growth rate (CAGR) of 32 per cent over the last three years since end-2010, according to JLL

research. The value of real estate then stood at $101 billion. Indian real estate market had witnessed its worst phase during mid-2010 owing to weakness in business sentiment. This significant growth in the value of under-construction real estate in India was primarily led by the residential sector, which grew at 42 per cent CAGR during the last three years. The residential sector’s value as of the fourth quarter of 2013 stood at $191 billion, and it accounts for more than 80 per cent of the total value of under-construction real estate in India. This sector accounts for similar proportions in almost all leading cities of India (except Hyderabad and Kolkata). Three years back, the residential sector accounted for only a 66 per cent share of the total value. “This clearly reflects the shift in focus of developers over the last three years toward the housing market as business sentiment weak-

ened,” JLL report suggests. “A widespread slowdown in economic activity on one hand and an inherent demand-supply gap in housing on the other forced developers to focus their activity on the residential sector in the last few years.” The top seven cities in India-NCR-Delhi, Mumbai, Bangalore, Chennai, Pune, Hyderabad and Kolkata-account for more than 80 per cent of the total value of panIndia under-construction real estate. Delhi has the highest concentration of under-construction real estate value of 33 per cent of the total panIndia. The relatively large residential and retail sectors makes Delhi the leading contributor in value proposition. Mumbai has the second largest share in total real estate value, although it has a dominant share of the office market. The percentage of the population living in urban areas in 2001 was estimated to be at 28 per cent. “Despite the explosive growth of cities like Mumbai, Delhi, Bangalore and Pune, the percentage of people moving to the urban centres did not cross 31 per cent mark in 2011. Nevertheless, there is a rising anticipation across the nation that in the next decade or so, the rate of urbanization will rise massively in India,” Puri points out. “Studies tell us that from 1991 to 2011, India’s urban population rose to a whopping 377 million. In fact, India is poised on the brink of an unprecedented urban expansion boom – by 2031, the country’s urban population is estimated to increase by more than 200 million. “Thereafter, it will take only half that time triple. To facilitate economic growth and global competitiveness, and also to meet increasing deGulf Property

INDIAHOUSE

“The weekend gateway home market is estimated to be in the range of $15 – $20 billion in top Indian cities and we see great opportunities in this sector. We are also looking at weekend gateway homes in Dubai where there is a sizeable market that is growing fast...” – Santosh Shetty Chairman and Managing Director The Expat Group mand for urban areas, India will have to add many more cities within its boundaries.” If it manages to do so, and to do it efficiently, the benefits from urbanisation are immense, he argues. “Job generation and thriving new real estate markets are just the beginning. With every new city, India will unlock a new source of growth drivers such as education, healthcare, infrastructure, transportation and recreation,” Puri says. However, in order to house 500 million people including the 200 million new urban population, in the next

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decade and a half, India will need to fast-track the development of new urban centres, townships and, most importantly – affordable housing. The government would soon roll out a programme to build 30 million houses by 2022, mostly for the economically weaker sections and low income groups through public-private-partnership, interest subsidy and increased flow of resources to housing sector. An investment of about Rs50 trillion would be required over the next few years for various initiatives

like Housing for All (Rs22.5 trillion), urban infrastructure development (Rs16.5 trillion), urban sanitation (Rs 620 billion) and building smart cities. We expect that about 85 to 90 per cent of the total investments in Housing for All would be required for developing urban housing, where development costs are high due to factors such as land prices, construction cost, fees, and taxes. Within urban housing, it is the affordable housing (houses for EWS/LIG households) which require attention on priority basis. “Indian government and

state governments cannot solve this mammoth task. Private sector developers will have to play their role in this transformation and for that, the government should incentivise low-cost housing for the middle income groups, such as tax breaks, free land or land at a cheap price to make the properties affordable,” Shetty says. Expat Group traces its history back to Dubai in 1994 when a Dubai-based youngman Santosh Shetty, a nonresident Indian entrepreneur, looked back at his motherland and saw tremendous opportunities there.

At A Glance 377 million

INDIAHOUSE

India’s urban population

500 million

India’s urban population expected to reach in 2030

810 million

India’s urban population expected to reach in 2050

$234 billion

value of under-construction projects in Indian in 2013

Santosh Shetty, Chairman and Managing Director of the Expat Group

people are expected to move to cities in 15 years

Lonere (Pune) and Dharmapuri (Bangalore). Nestled conveniently a short distance away from the city center, the three projects are collectively spread over 400 acres and will offer approximately 350 rooms. The resorts are the first step towards creating an integrated community of weekend getaways and provide happy memories for busy, upwardly mobile families with a full range of services like golf courses, adventure sports, sports clinics, wellness centers, assisted living and residential schools. Pricing for these residential gems is set between Rs18 to Rs25 lakh. Home owners, corporate houses and real estate investors can benefit from a steady revenue stream from their investments. “The weekend gateway home market is estimated to be in the range of $15 billion to $20 billion in top Indian cities and we see great opportunities in this sector,” Shetty says. “We are also looking at weekend gateway homes in Dubai where there is a sizeable market that is growing fast.” g

200 million

India needs 30 million more homes by 2022 with an investment of Rs22.5 trillion to make Housing for All programme a success. Affordable homes are key to the success of this nation-wide initiative

10 million

people are added every year to India’s urban population

30 million

will be built in India by 2022

Rs50 trillion

will be needed to make Housing for All programme a success by 2022

So, instead of starting his business here in Dubai, he forged a partnership with some like-minded youngmen and launched the Expat Group to support the economic growth of India. It was a time when PV Narsimha Rao started the economic reforms with Dr Manmohan Singh as his finance minister. The private sector started to play a bigger role than it was allowed before. In India, the Expat Group found a land of opportunity to work and generate wealth. Currently the Expat Group has an annual turnover around $100 million coming

from five industrial verticals including real estate and construction, engineering, hospitality and leisure, investment and media. The company has delivered about 2,000 residential units. In the 2014-15 financial year, it will have handled $500-$600 million worth of projects. “So far real estate is the main vertical with 75 per cent of our topline revenues coming from the real estate sector,” Shetty says. “We have two large-scale projects with 4,000 units currently in different stages of construction and development, worth

Rs15 billion (Dh1 billion).” He said, the company’s current land bank of 1,500 acres is valued at Rs8 billion in India. “We are planning to deliver 10,000 units in the next ten years in India,” he said. The company last year announced a partnership with Wyndham Hotel Group, the world's largest hotel company with over 7,540 hotels and a part of Wyndham Worldwide Corporation, for their brand Ramada, to develop a set of three, top-ofthe-line resorts, at their weekend home projects located at Pali (Mumbai),

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SAFELIVING

The latest fire incidents that set one of the tallest buildings in Dubai and the world alight, as well as the incident in Abu Dhabi’s Musaffah Industrial Area that took the lives of 10 workers – makes a mockery of development works in the country. Life is more important than money. Do we need to remind businesses of this fundamental issue? Public life and safety that has been short-changed for money and substandard wire, gives a costly wake-up call. Developers and building owners as well as contractors need to be held responsible for giving this wonderful country a bad name due to their negligence and failure to adhere to basic standards... Gulf Property Exclusive 62

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Safety first W

hen the 70th floor of the world’s tallest glass tower caught fire during the inauguration gala celebration party, in San Francisco, the civil defence team jumped in to contain the fire and rescue the partying celebrities and socialites. The party had then just begun with soft music as the who’s who’s of San Francisco had just joined the party of the year that fateful night. As part of the inauguration ceremony, the building was set alight ten floors at a time amid huge applause from the public watching the historic moment in the city. The building, according to Richard Martin Stern’s book The Fire, was a 138-

storeyed glass tower that had just been completed. What happened in the end, had nicely been portrayed in the mid-70s blockbuster movie – The Towering Inferno – starring Steve McQueen, Paul Newman, William Holden, Richard Chamberlain and Faye Dunaway. We do not want to spoil the fun for the readers by narrating the thriller here. However, what is important and still relevant to all of us here in the Gulf is what caused the fire. We all live in concrete buildings that are fully wired to ensure sufficient electricity supply to power our lives. We all take safety for granted and never think what goes in those wires that protect us day and night. The fire that broke out in

the building was due to a short circuit in one of the power cables at the 70th floor. What caused the short circuit was a spark in the substandard cable. At the beginning of the movie, the building’s chief architect Paul Newman is seen to confront Richard Chamberlain – the son-inlaw of the developer of the project, for violating his instructions on the cable and procure sub-standard cable that eventually caused the fire. What happened in the movie is something we would like to leave it for the readers to watch and find out. However, what is relevant here is the use of substandard cable. Not so long ago, we have seen the newspaper reports of families sleeping in the

SAFELIVING

Ashish Chaturvedy, Marketing Manager of Ducab, makes a strong point on safety issues

open garden under the sun after being evacuated following fire incidents in Sharjah. The images of fire flaring up from two towers at the Jumeirah Lake Towers in Dubai is still fresh in public memory. Most people spend their life savings in real estate. A home is a family’s biggest investment in life. However, the dream home could turn into a living nightmare – if quality building materials, especially cables are not used. “It’s like having a great car with a defective tire – that could cause accident and threaten one’s life and that of others. Life should not be shortchanged for money or convenience,” said an analyst, requesting anomymity. Ducab – the largest cable manufacturer in the Gulf, recently held a seminar of cable and wire safety and the consequences due to the lack of quality and safety. As the number of civil structures grow faster than human beings and most ‘civilised’ people are now ‘caged’ in

‘concrete jungles’ called cities, any small incidents could cause massive casualties. In an exclusive interview with Gulf Property, Ashish Chaturvedy, Marketing Manager of Ducab, elaborates his views on the critical issue. Excepts:

Gulf Property: How important is safety to Ducab? Could you kindly tell us Ducab’s activities to create awareness among the public? Ashish Chaturvedy: Safety is, of course, paramount in everything that we do, from our products to our daily operations and the area we work in. As a UAE corporate citizen, we consider it to be our responsibility to educate our customers, as well as the wider public, on the importance of safety. A recent example of our activity towards this end are the seminars that are part of our ‘PowerOverFire’ initiative, which we launched in 2013, with a mobile road-

show in a custom-branded 40-foot truck that travelled the country and distributed information to general public, dealers and retailers in the electrical product supply chain. The truck also featured touch-screen kiosks and a classroom for seminars to raise fire safety awareness with all the visitors. This campaign was in association with the General Directorate of Dubai Civil Defence, UAE Ministry of Interior and aimed to target contractors, retailers and the general public as well. In January and February 2015 Ducab extended this initiative to the professionals in the electrical industry by conducting CPD certified technical seminars for over 350 engineers and project managers with well-known consultants and contractors. Through this initiative we are sharing our expertise with members of the GCC community, creating local experts who can further spread the message about fire safety.

Our certification sessions also help to establish global standards with regional relevance, which we do in association with the Institute of Fire Safety Officers. It is our hope to see a strong chapter of this Institute open in the Gulf, soon.

Is there an industry-wide move to enforce fire-retardant cables and ban substandard cables? There has always been high awareness of the importance of fire safety standards in buildings, but now there are even higher attempts being made to ensure that the highest standards are met. Emirates Authority for Standardisation and Metrology (ESMA) regulates the cable and associated products, quality and certification, which has banned the import, sale and use of substandard low-voltage cables in the UAE. The ESMA regulation is proof to the growing significance that the local regulators attach with the initiative. Gulf Property

SAFELIVING “According to Dubai Statistics Centre, out of 380 fires in Dubai in 2013, 71 were identified as being caused by ‘electric sparks’. Electric sparks are also stated as responsible for 79 of 395 fires in 2012, and for 84 of 290 fires in 2011. Statistics are not available as of yet for 2014, but you can see from these figures that as awareness grows of proper cabling safety requirements, there has been a slight decline in the number of fires caused by substandard cabling...”

– Ashish Chaturvedy

Through the campaign, Ducab and the stakeholders aim to caution the wrong doers assertively that “knowing procuring, promoting and supplying non-compliant electrical wires and cables to the UAE consumers is unlawful and could attract strict legal action”. Stricter building regulations require that contractors must look for suitable products for their projects, and our FlamBICC specialist range of fire-resistant and fire-retardant cables adhere to the stringent standards set and adopted by the civil defence and standardisation authorities the world over.

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Substandard cables do not compare when put to the test in fire conditions, and are frequently the cause of building fires. We therefore strongly discourage using substandard/unapproved cables and encourage contractors to seek wires and cables, as well as other materials, that are certified by local and international bodies in order to ensure the highest level of safety.

We have seen fire incidents due to short circuits at residential buildings as well as warehouses in the UAE in

the past. How many of them were due to defective cables? Substandard electrical cables that do not meet required safety standards are one of the main causes of fire in the UAE, and in fact world over. According to Dubai Statistics Centre, in 2013 in Dubai there were 210 fires in buildings either completed or under construction. A leading cause of these was slated stated as ‘electric sparks’. With non-fire-retardant cables, an electric spark can cause wiring to melt, thereby leading to a fire.

Would you lobby to ban the import of substandard cables in to the UAE? I believe that any responsible company should advocate for the use of approved safety-certified equipment to be used in all instances, whether for cabling or otherwise. We are constantly seeking joint efforts from all stakeholders – government bodies, cable and wire manufacturers, electrical distributors and other stockists – to source, stock and promote only certified and approved cables, those that comply with international standards and their origin can be traced.

e a-

e or rn -

g e kd ps

SAFELIVING

Ashish Chaturvedy, Marketing Manager of Ducab, speaks at a safety seminar

Cable industry on a roll

he GCC consumption of wires and cables reached 1.3 million gross cable tonnes in 2013, an increase of 69 per cent compared to 400,000 tonnes in How much of the fire incidents occur due to substandard cable and defective cabling? According to Dubai Statistics Centre, out of 380 fires in Dubai in 2013, 71 were identified as being caused by ‘electric sparks’. Electric sparks are also stated as responsible for 79 of 395 fires in 2012, and for 84 of 290 fires in 2011. Statistics are not available as of yet for 2014, but you can see from these figures that as awareness grows of proper cabling safety requirements, there has been a slight decline in the number of fires caused by substandard cabling. The UAE authorities, with Civil Defence in particular have been doing a splendid job in keeping the number of

2003, driven mainly by the utility and communications network in the UAE and the wider Gulf. “The cable industry in this region has undergone significant changes of late, making business intelligence and analysis more critical than ever,” Ashish Chaturvedy, Marketing Man-

ager, Ducab, says. “Our region is seen as one the most dynamic infrastructure investment markets for regional and global investors. The UAE, Qatar, and Saudi Arabia all scored in the top third of the new index of ARCADIS Global Infrastructure Investment due to their strong business

such fatal fires relatively low as compared to many other parts of the world.

which harm and attack electrical circuits /discs causing disproportionate business losses.

How many people die every year due to defective cabling? The Health Authority – Abu Dhabi claims that only 4 per cent of all deaths in 2013 were due to fire or flame burns, and just 1 per cent of deaths was due to electricity. Generally, in case of fire, the following have been observed : n Toxic smoke and acid gas inhalation are a major cause of fatalities. (Poisoning and pulmonary oedema in fire conditions) n Smoke emission obscures escape routes, thus the EXIT signs are not visible to run for safety. n PVC emits acid fumes

How would you rate the UAE in terms of fire safety standards on a global scale? The UAE’s fire safety standards are relatively quite high – amongst the highest in the world, especially in Dubai and Abu Dhabi. Contractors and companies much adhere to stringent regulations, which are equal or higher than counterparts elsewhere in the world. Risks are always associated with the construction boon in any developing economy, and UAE is no different. As professionals, our challenge is to constantly keep

environment, healthy development work and growing economies, in addition to the mega projects that are scheduled in the pipeline for the coming three years which will represent billions of dollars of investments and opportunity for our industry.” His company Ducab has remained at the forefront of the public awareness campaign against the use of substandard cables and defective wiring. “As Dubai looks to cement its super-hub status with $32 billion investment through the expansion of Al Maktoum International Airport at Dubai World Central (DWC), Qatar earmarks $140 billion for infrastructure development. Saudi Arabia and Kuwait alike are joining the parade with mammoth investments. All these projects are seen as promising growth opportunities, not only for Ducab, but for our industry,” he added. g

educating the specifiers and the users both about the merits of following best practices to ensure safer built environments.

What steps are you taking to strengthen the public awareness campaign? Our Ducab ‘PowerOverFire’ campaign certification seminars are planned to be held in all major GCC markets, with the first leg including Muscat, Dubai, Doha, and Bahrain. All attendees receive a Continuing Professional Development certificate which is recognised by IFPO. Sessions meant for professionals from the electrical industry are ‘by invitation’ only, and we encourage interested parties to get in touch with us. g Gulf Property

Dubai, Abu Dhabi: Most sustainable MENA cities NEWSUPDATE

1. Frankfurt

11. Sydney

21. Houston

31. Sao Paulo

41. Doha

23. Tokyo

33. Dubai

43. Jeddah

2. London

12. Toronto

22. Philadelphia

4. Amsterdam

14. Manchester

24. Rome

6. Berlin

16. Paris

3. Copenhagen 5. Rotterdam 7. Seoul

8. Hong Kong 9. Madrid

10. Singapore

13. Brussels

15. Boston

17. Melbourne

20. New York

Gulf Property Exclusive

ubai is the most sustainable city in the region, followed by Abu Dhabi and Doha, respectively, according to the inaugural Sustainable Cities Index from ARCADIS, the leading global natural and build asset design and consultancy firm. The Index, which was conducted by the Center for Economics and Business Research (CEBR) explores the three demands of social (People), environmental (Planet) and economic (Profit) to develop an indicative ranking of 50 of the world’s leading cities. The 2015 report finds that no utopian city exists, with city leaders having to manage a complex balancing act be-

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26. Kuala Lumpur

18. Birmingham 19. Chicago

25. Washington

27. San Francisco 28. Los Angeles 29. Dallas

30. Santiago

32. Mexico City 34. Abu Dhabi 35. Shanghai 36. Istanbul

37. Johannesburg 38. Buenos Aires 39. Beijing

40. Rio De Janeiro

“Dubai and Doha have scored much lower on environmental factors than economic ones. Cities in the Middle East have seen the highest real term population growth over the past five years, with Doha, Dubai and Abu Dhabi experiencing a rise of over 30 per cent, putting a strain on infrastructure.”

-- Terry Tommason, Doha City Executive of Big Urban Clients at ARCADIS

tween the three pillars of sustainability. Across the world, cities are performing better for being sustainable for Profit and Planet purposes than they are for People factors. Many of the world’s economic powerhouses are becoming less affordable for their citizens, with the cost of property in New York, London, Paris,

Tokyo and Hong Kong penalising their rankings. There is also a trade-off globally between strong education and poor work-life balance, particularly demonstrated in Hong Kong. “The trade-off between Planet and Profit is most starkly seen in the Middle East where Dubai and Doha score much lower on envi-

42. Moscow 44. Riyadh 45. Jakarta 46. Manila

47. Mumbai 48. Wuhan

49. New Delhi 50. Nairobi

ronmental factors than economic ones,” said Terry Tommason, Doha City Executive of Big Urban Clients at ARCADIS. “Cities in the Middle East have seen the highest real term population growth over the past five years, with Doha, Dubai and Abu Dhabi experiencing a rise of over 30 per cent, putting a strain on city infrastructure.” Dubai leads in the Middle East at 33rd, followed by Abu Dhabi at 34th, Doha at 41st, Jeddah at 43rd and Riyadh at 44th. Dubai also takes first place in the region on the Profit sub-index at 27th, followed by Doha at 30th. Abu Dhabi tops the Middle East People sub-index at 25th due to success in dependency ratio and income inequality. Meanwhile two cities in Saudi Arabia – Jeddah at 39th and Riyadh at 40th – lead the region’s way on Planet factors, scoring

NEWSUPDATE

Dubai sits at 13 in 2015 City Momentum Index

ones Lang LaSalle, the world's leading real estate investment and advisory firm, today released its second annual City Momentum Index (CMI), ranking global cities on real estate and socio-economic factors. The list of top 20 cities reveals major trends and changes driving global momentum: Dubai remains in the Top 20, although its rank has dropped as growth in commercial real estate prices moderates to sustainable levels. Momentum is expected to continue with activity bolstered by major project spending related to Dubai hosting the Expo 2020. Several of the world’s most techrich cities maintained a position in the top 20, including London (1), San Jose (2), Boston (7) and San Francisco (9). Newcomers to the top 20, thanks to the technology sector, include Sydney (11), Dublin (14), Melbourne (15), Bangalore (12) and Nairobi (15). Sub-Saharan Africa makes its debut in the Top 20, represented by Nairobi.

q q q

particularly well for drinking water and sanitation and low levels of air pollution. “City Leaders need to find ways to balance the demands of generating strong financial returns, being an attractive place for people to live and work in, whilst also limiting damage to our envi-

As a regional base for global corporations expanding into Africa and as the continent’s top technology city (‘Silicon Savannah’), Nairobi is witnessing high levels of property construction, its rental markets are buoyant and real estate transparency is improving. The city has also emerged as a key hub for the continent’s rapidly growing air transport network. Bangalore provides India’s first appearance in the Top 20. Robust demand for commercial space from the technology sector and associated IT-enabled services is boosting office rents. Commenting on the CMI 2015, Craig Plumb, Head of Research, JLL MENA, said: “Dubai remains in the Top 20 global cities in terms of dynamism and pace of change, although its rank has dropped as growth in residential prices moderates to more sustainable levels. We have witnessed some new cities such as Nairobi and Bangalore making their debut to the top 20. Both are experiencing high levels of construction, its rental markets are buoyant and real estate transparency is improving.” g

ronment,” said Hisham Malaika, Jeddah City Executive at ARCADIS. “To truly understand how sustainable a city is, we must understand how it ranks in People, Planet and Profit. Then we can act to assess priorities and the pathway to urban sustainability – for the good

of all.” The research was conducted by the Centre for Economics and Business Research and examines 50 cities from 31 countries ranking them across a range of indicators to estimate the sustainability of each city. The cities included within this

report were selected to provide an overview of the planet’s cities, providing not only wide-ranging geographical coverage, but also a variety of levels of economic development, expectations of future growth and an assortment of sustainability challenges. g Gulf Property

BROKERAGE

Dejavu handles Dh1.4b worth of properties Downtown Dubai has provided good revenues to Dejavu Real Estate

Indrajit Sen Senior Reporter

ith a compact team of 45 and operating out of a buzzing office in Dubai’s Al Barsha district, Dejavu Properties today is one of the leading property brokerage firms in the city. The company, being managed by Director Ahid Shaikh is doing commendable business and trades in every major property destination in Dubai. “And we do not claim to

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have done well, it is the Dubai Land Department which has lauded us,” Shaikh says. “We were awarded by DLD in 2014 as one of the top 10 brokers. We were also recognised for having sold over Dh1.4 billion worth of properties.” Moreover, the firm has completed 7,000 transactions so far, including 11 in the last 10 days, Shaikh mentions. There are a range of services that Dejavu , which he formed in 2007 with his brother Akif Shaikh, the Managing Director of sister company Hammer and Nail, offers. They include: Buying,

selling, renting, managing corporate portfolio, connecting clients to mortgage advisors and consultation on overall market, including international markets.

So what sets them apart?

“Fortunately or unfortunately for us there are not many real estate brokers (in Dubai) doing anything beyond buying and selling,” Shaikh remarks. “There are only a few international names like Better Homes that are very professionally run. So having

firm faith in Dubai we would like to branch out. We believe that if the real estate market here continues to perform the same way, whether you call it quiet or aggressive, we will reap the benefits.” Shaikh feels the Dubai market is not getting congested by the mushrooming of brokerage firms and instead reiterates ‘competition is always good and healthy’. He goes on to say, “It (competition) benefits the customer in the end. I don’t see this as ‘congestion’. We have always seen that the players here in Dubai are very short-

BROKERAGE

“Fortunately or unfortunately for us there are not many brokers (in Dubai) doing anything beyond buying and selling. So having firm faith in Dubai we would like to branch out. If the market continues to perform the same way, whether you call it quiet or aggressive, we will reap the benefits.”

always do well. Dubai Sports City is another good location. The upcoming products in JVC will also do well. These locations will get excellent investments for their products are value-driven. Of course, districts like the Downtown are established areas, so they are secure in terms of investments.”

Expansion plan

– Ahid Shaikh, Director, Dejavu

sighted. Whenever the market does well, you will see hundreds of brokers coming in. After 3 years if/when the market doesn’t do so well, you will see hundreds of them going out. So they just take advantage of the good performance. Actually it is good if we have a stable market, for that will allow the big companies to do well. So when there is competition you come to know who is doing better than you.” So, along with delivering a property, Dejavu also gives clients ‘a complete property maintenance solution’ through Hammer and Nail (which specialises in offering services such as repair, plumbing and electrical, décor, etc). “In real estate it is very important that when a customer comes you make sure that you offer him everything and offer a complete solution to his needs,” Shaikh states. As part of offering mortgage solutions, Shaikh reveals, “We have gone ahead and made agreements with some of the national and

local banks. We have tied up with banks including ADCB, Noor Bank, Mashreq, about to sign a contract with Standard Chartered . We have various teams looking into different areas and clients. It helps our customers take a decision, rather than worrying and having to go around for financing.” Dejavu sells properties from across all property hotspots in Dubai. Trading in freehold properties has been profitable for the firm and hence it remains a key focus of business, Shaikh reveals. Moreover, the sales team has been divided to focus on specific locations to offer better deals. “So there is a Downtown team, there is a Palm Jumeirah team, there is a JVC (Jumeirah Village Circle) team, there is an Emirates Living team, to name some,” he says. Dejavu has also been trading in products of all reputed developers and have gained much from people’s faith in those big brands. “Majority of our sales have come through

Emaar, because we always like to give our customers quickly-ready, quickly handed-over good products. And that is why we also sell (products of) Nakheel, Dubai Properties and other good developers, for we believe they have that capacity to deliver quality,” Shaikh remarks. Advising clients on what and where to buy is a crucial aspect of any broker’s business and Shaikh says his team takes extra care to satisfy the clients’ needs. “If the customer’s budget is Dh2 million, I wouldn’t be telling him ‘let’s buy in Downtown’,” he says frankly. However he says that buyers stand to gain much from investing in the property hotspots or upcoming locations of Dubai. He explains: “In terms of hotspots, since the market is undergoing correction now, I would say products that cater to the mid-income segment will do well. The mid-segment will always do well, irrespective of how the market behaves. So let’s say The Greens will

Besides the traditional brokerage services of buying, selling and renting, Shaikh says he wants to guide Dejavu into another key, yet unattended avenue of the property sector: Valuation services. That will include solutions regarding forming wills, power of attorney papers, attestation, legal documentation, etc. “Our next plan is to have a team for valuation services. I think we will set that up in the next 6 months,” he says. Even within the UAE, Dejavu plans to do more business in Abu Dhabi. “In the UAE, I think after Dubai the market which can have great opportunities is Abu Dhabi. Yes we have plans, but we are looking at around 2016 to set up an office for Abu Dhabi,” Shaikh states. Boosted by their good business in Dubai, Dejavu now plans to also explore other markets and avenues. The company has got engaged in promotional activities in the GCC in the form of organising roadshows and participating in property exhibitions in Riyadh and Kuwait. Shaikh plans to open branches in Saudi Arabia soon, as it has a developing real estate sector with a lot of potential. Dejavu is also contemplating on setting up a base in Singapore as it is a global financial hub with a growing real estate market. g Gulf Property

NEWSUPDATE

An artist’s impression of Azizi Liatris

Azizi invests Dh4.5bn in 5 projects in Dubai

zizi Developments, a Dubai-based property developer, said, it has invested Dh4.5 billion into Dubai’s real estate sector till now driven by robust local demand for affordable luxury and value homes. The company launched five large-scale residential projects in 2014, including Azizi Iris, a luxury property. Around 70 per cent of the rest of its developments, namely Azizi Liatris, Azizi Orchid, Azizi Yasamine and Azizi Feirouz, have also been sold. Construction works for all five properties, which commenced in May 2014, are proceeding as scheduled.

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Mohsen Kamel, the company’s chief executive, said, “[The year] 2014 was a great year for our company as we experienced a substantial sales increase, key department expansions, and a strong marketing push. One of the significant growth drivers is the market’s robust appetite for upscale property projects as high net-worth individuals continuously view Dubai as a secure place for their investments.” Azizi Developments has bounced back strongly from the 2008 financial slowdown after cancelling its previous projects in order to help clients, that were facing financial difficulties failing to continue the payments of the

already invested projects. During that time, the company as a concerned developer first surveyed its clients to know their sentiments in order to extend the appropriate response and assistance. The top management then decided to hold off sales and construction, meet with all clients and fully refund their payments. A system was established to accelerate the refunding process and all funds were paid back from the developer’s own account as to refund from the escrow account back in 2013. The cancelled properties – one of which was called Feirouz 1, 2, 3, were located in Al Furjan, but are different from the

current Azizi Developments projects, in particular the current Azizi Feirouz residential development which is well underway for construction and will be handed over by this year end. This 2015, Azizi Developments is expected to sustain its upward trajectory as it plans to launch more new luxury residential and hotel projects and develop elite hotel apartments across Dubai. The company is also looking at opening more sales centers, joining various major property exhibitions, and launching new marketing initiatives to easily reach out to its customer base and attract potential clients. g

Shoumous launches plots worth Dh550m in Sharjah

NEWSUPDATE

houmous Properties has announced the launch of the Shoumous Residential Complex in Sharjah, the UAE’s first ever fully serviced plot facility for new homes. The exclusive Shoumous Residential Complex built at a cost of Dh550 million is an offering from Shoumous Properties – a partnership between UAE’s Albatha Real Estate Group and the Moafaq Al Gaddah (MAG) Group. This unique offering marks a new era for property development in the UAE. “For the first time ever, customers can purchase a premium plot of land in a fully serviced complex that allows them the freedom to plan and build their dream homes according to their own living concept and style,” said Dr. Hani S. Abu Auida, Chief Executive Officer of Shoumous Properties and Vice Chairman of the Moafaq Al Gaddah (MAG) Group. “This is a unique proposition that we are offering and one not seen before in the country. We are providing customers with all the facilities and amenities they would expect of a premium real estate development,” he added. Spread over 6.8 million square feet with 220 residential plots, Shoumous Residential Complex will offer six different sizes of plots, ranging from 18,442 to 39,297 square feet. All have car parking and boundary walls.

“This is a great opportunity to invest in property in Sharjah. We established that there exists a strong demand from the Arabs for personalised property options and set out to fulfill this demand – we are confident of a strong take-up with the sale of plots in this unique real estate development...”

– Dr. Hani S. Abu Auida Chief Executive Officer Shoumous Properties

The complex will be a fullservice integrated gated facility situated in the Al Tai district of Sharjah, with easy access to Sharjah Downtown and Sharjah Airport, whilst its proximity to Emirates Road means that Dubai is just 15 minutes away. The development is registered with Sharjah Real Estate Department. The complex will offer a multitude of services that will transform it into a self-contained community, with its extensive array of facilities including a commercial center, three parks, two mosques and a hypermarket. The landscaped development also features a sewage treatment plant with odour-

control and storm water drainage. Facility Management will provide security, cleaning and maintenance, with a state-of-the-art telecommunications network. re“We extensively searched the needs of a premium buyer and found that there was demand from niche buyers who place a prime value on individuality as well as exclusivity. This is a great opportunity to invest in property in Sharjah,” said Auida. Shoumous Residential Complex will be freehold for Arab nationals with UAE residency, enabling this segment of society to be able to buy and resell within the complex after receiving

clearance from the Sharjah Real Estate Department. The development is expected to provide a significant boost to Sharjah’s real estate market once plots go on sale. The handover will be by the end of 2015. The Shoumous Residential Complex will provide a superior standard of living in a concept that is set apart from any other offering in the market. “We established that there exists a strong demand from the Arab community for personalized property options and set out to fulfill this demand – we are confident of a strong take-up with the sale of plots in this unique real estate development,” he added. g Gulf Property

INTERVIEW

A Dh55 million-worth plush villa in Al Barari community that Luxhabitat is selling

Luxury has a new name: Luxhabitat

By Indrajit Sen Senior Reporter

hen CEO Oriol Font launched ‘Luxhabitat’ a brokerage firm trading in luxury properties in Dubai, people questioned why. It was mid2009 when he started the business and the global economic recession which befell Dubai in late 2008, was grinding the real estate sector with all its might. At a time when people were quitting the market, Font, a Catalan entrepreneur from Barcelona, living in Dubai, started Luxhabitat out of a plush office in Dubai Media City. It comprises an efficient team of 25, out of which 15 are sales agents. But initially generating business was difficult, he admits.

The hurdles

Besides the financial crash that had pounded the Dubai real estate market, there was another significant challenge that Font faced. Luxhabitat was trying to introduce the concept of boutique luxury properties, something that was unprecedented not just in Dubai, but also in the entire region. Although the luxury category is an established mar-

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ket in many Western nations, none in the Middle East and North Africa (MENA) region had yet traded exclusively in the high-end sector, as Luxhabitat did, according to Font. Thus Luxhabitat’s first couple of years after launch were consumed in trying to explain to people what it was all about and the type of services it was providing to its clientele. The company was precisely educating the market, trying to explain the difference between Luxhabitat and ‘any other mass-market real estate company’. “In the beginning it was quite difficult. Depending on the nationalities of the clients we had to explain to them what we do, because they were not used to companies focussing on high-end residential properties,” Font explains. “Clients from mature real estate markets such as Europe and the US are used to it, because there are companies focused on this niche market. But here in the region the concept did not exist, so obviously we had to spend some time with clients from the GCC, India and Pakistan, and also from Africa. We explained our

“In the beginning it was quite difficult. Depending on the nationalities of the clients we had to explain to them what we do, because they were not used to companies focussing on high-end residential properties...”

– Oriol Font CEO, Luxhabitat

concept, how we were different from our competitors, the way we approach the business, how do we market our properties and also how do we service our buyers and sellers.” But Font held on despite the odds and the vagaries of the market. Pre-2008, he explains, the Dubai market was primarily investor-driven. “Typically investors before the recession did not pay much attention to a crucial aspect of our business: quality. They didn’t pay attention to the layout, the materials used, the design and the de-

velopment the facilities; because they were interested in just buying and selling the property as quickly as possible. So they did not care much about the essential concepts of property that are central to an end-user’s decision,” Font recollects. The economic bust forced out many speculators and investors playing in the market for making a quick buck. Such elements were replaced by the end-users, which Font considered a highly positive transformation. “So we saw the market changing from an investorfocussed market to one where the end-users would start to play a much bigger role. We saw a significant change in the market and that is when we decided to launch Luxhabitat, where we focus on the luxury high-end residential market. And our clients are mostly endusers,” he justifies.

Going strong

The patience and resilience paid off. After the worst of the economic recession got over, Dubai began to re-emerge post-2010. Authorities began working round the clock to boost market sentiments,

INTERVIEW

Oriol Font, CEO of Luxhabitat

safeguard the economy from a similar crash in future and introduced measures to regain the confidence of global investors. High Net Worth Individuals (HNWIs) responded with warmth and started returning to Dubai with their wealth and businesses. And their numbers have been growing ever since. “That’s why we feel our approach (to cater to the highend market) is right. The fact that we are focussed on high-end residential drives the way we sell our properties. How we present our products reflects upon the profile of our sales team, because as I said we are dealing with HNWIs and that requires a suitable profile,” Font states. Luxhabitat began receiving global clients, when the Dubai market rebounded with great resolve in the aftermath of the recession. “We are having clients coming from major established markets like London, and they expect products to be of very high quality. The expectation is also high because Dubai has done a good job marketing the city internationally and branding it as a luxury desti-

At A Glance 484

luxury products in their portfolio currently

Dh5 million

price cap above which the company sells properties

Dh14 million

worth the average property transaction for the company in 2014

nation. So Dubai has done a good job in several sectors such in hospitality where you have several hotels that are international benchmarks but in the residential real estate market the quality that demand HNWIs is still not there. We clearly believe there is room for improvement, and the opportunity is substantial for those real estate developers that are willing to cover this gap” Font opines. In the past 5 years, “we have had many clients coming from other international hubs expecting the find bet-

ter quality properties in Dubai. As I said before, the quality in the residential real estate sector is not good enough for a good number of them. For that reason, we launched an in-house highend interior design service to upgrade the properties to their standards. We provide a bespoke service taking care of the entire process and we have assembled a very professional team that is able to deliver exceptional properties’. Presently, Luxhabitat concentrates on properties in a few ‘high-quality residential areas’, where they are confident of bagging good products; they have 484 luxury products in their portfolio currently. For villas, the firm concentrates on areas such as Emirates Hills, Palm Jumeirah, Al Barari, Jumeirah Golf Estates, and then also sources the best upgraded properties in areas such as Meadows, Arabian Ranches, among others. For penthouses and apartments, they focus on districts such as the Downtown, DIFC and Dubai Marina, as Font feels several projects in these locations ‘has the right quality for our clients’. Even in these earmarked locations, Lux-

“We saw the market changing from an investor-focussed market to one where the end-users would start to play a much bigger role. We saw a significant change in the market and that is when we decided to launch Luxhabitat, where we focus on the luxury high-end residential market. And our clients are mostly end-users...”

– Oriol Font CEO, Luxhabitat

habitat does ‘business only in pockets’ and ‘in certain handpicked buildings’; for example Le Reve Tower in Dubai Marina, which Font reveals is one of their core buildings. Given their emphasis on high-end residential property, Font reveals that Luxhabitat mostly sells properties which are above Dh5 million only. “The real focus is on quality. Few times we also do sell properties below Dh5 million, but it has to be of good quality and in a good location. The average property transaction in 2014 was Dh14 million,” he says. g Gulf Property

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GULFTOURISM

A spine-chilling drive through Empty Quarter

Gulf Property Exclusive

hen we started our journey from Dubai to Liwa, we did not know what to expect. It was a Friday in January this year. We started at 9 am and drove past Sahama and Mafraq in Abu Dhabi to take the Abu Dhabi-Ghweifat highway towards the Western Region of Abu Dhabi. It was a pleasant winter morning and the drive was

Gulf Property

smooth almost all the way to our destination. We were heading to Tilal Liwa Hotel, located between Madinat Zayed and Liwa towns – the places I have never visited. Although the road from Mafraq to Ghweifat passes through a vast landmass of desert, it does not feel bad or monotonous as the surrounding areas around the road shows some patches of greenery and swamp. We drove near a hundred kilometres after Mafraq to find our exit at Tarif towards Madinat Zayed city. This

road again passes through the desert and some important oil pipelines. After 50 kilometres of drive, we see signs of life and some oil installations. The first phase of the Union Railway is also visible along the way. As we drive through the oasis town of Madinat Zayed, we discover a nice but quiet small town. As it was a weekend, it was still sleepy. We pass through the town to come to a turning point on the Madinat Zayed-Liwa highway near Shams 1 solar

power plant and take a left to reach the hotel nine kilometres across the desert. The hotel, more of a desert resort and a brilliant retreat is located at the end of the paved road and tucked in the sand dunes. After we settled in and following having lunch, we drove towards Liwa to discover this oasis – to the Moreeb Dune or Tal Mireb. Some of the UAE’s bestkept secret lies in Liwa – the desert oasis town in Abu Dhabi located close to the famous Empty Quarter or Rubb Al Khali.

GULFTOURISM

Breathtaking views from Tilal Liwa Hotel

Empty Quarter

Empty Quarter is the largest sand desert in the world, encompassing most of the southern third of the Arabian Peninsula. The desert covers some 650,000 square kilometres (250,000 square miles) including parts of Saudi Arabia, Oman, the United Arab Emirates, and Yemen. It is part of the larger Arabian Desert. The desert is 1,000 kilometres (620 miles) long, and 500 kilometres (310 miles) wide. Its surface elevation varies from 800 metres

(2,600 feet) in the southwest to around sea level in the northeast. The terrain is covered with sand dunes with heights up to 250 metres (820 feet), interspersed with gravel and gypsum plains. The sand is a reddish-orange color due to the presence of feldspar. A number of attempts were made to cross the Empty Quarter, most remaining quite unsuccessful. The first documented journeys by non-resident explorers were made by British explorers Bertram Thomas in 1931 and St. John Philby in 1932. Be-

tween 1946 and 1950 Sir Wilfred Thesiger crossed the area several times and mapped large parts of the Empty Quarter including the mountains of Oman. In June 1950, a US Air Force expedition crossed the Rub' al Khali from Dhahran, Saudi Arabia, to central Yemen and back in trucks to collect specimens for the Smithsonian Institution and to test desert survival procedures. In 1999 Jamie Clarke became the first Westerner to cross the Empty Quarter of Arabia in fifty years. His team

of six, including three Bedouin, spent 40 days crossing the desert with a caravan of 13 camels. On 25 February 2006, a scientific excursion organized by the Saudi Geological Survey began to explore the Empty Quarter. The expedition consisted of 89 environmentalists, geologists and scientists from Saudi Arabia and abroad. Various types of fossilized creatures as well as meteorites were discovered in the desert. The expedition discovered 31 new plant species and plant varieties, as well as 24 species of birds that inhabit the region, which fascinated scientists as to how they have survived under the harsh conditions of the Empty Quarter. In 2012, Alastair Humphreys and Leon McCarron pulled a specially designed cart from Salalah to Dubai. They produced a documentary film about their journey and how it compared to those of Wilfred Thesiger. In 2013 from 18 February to 28 March, South Korean explorer YoungHo Nam led a team on a crossing through the Empty Quarter on foot from Salalah, Oman, to Liwa Oasis, UAE. Emirate of Abu Dhabi recognised it as the world's first on-foot crossing of the Empty Quarter. The most exciting part of our tip to Liwa was a 25 kilometre drive from Liwa and a good 20 kilometre drive in between sand dunes â&#x20AC;&#x201C; that appears more of sand mountains where layers of sand placed on to layers to create a wonderful view toqwards Moreeb Dunes. Gulf Property

GULFTOURISM

View from Tilal Liwa Hotel

Moreeb Dunes (Al Moreb Hill) is a place for organised drag races. With a reported 50 degree slipface, and height of 120 metres, it is a perfect place for sand drags. Moreeb Hill is supposedly the tallest dune in the UAE, and one of the largest hill climbs in the world. Its altitude is about 120 metres (206 metres above sea level) with slope of 50 degrees. The dune is 1600 meters long. Because of its steep slopes it has been given this name (Moreeb Dune – Scary Mountain). While driving past the solitary strip, one would feel scared as there is no public settlement within the vicinity. It’s more of a spine-chilling experience for even the most brave driver. In case of emergency, it would be difficult to get help. As we drove past each turn we did not

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know what lied ahead or beneath. The road navigates through the slopes and turns amid beautiful sand dunes. We drove the full length of the road till we hit a dead end where tourists seek thrill with dune bashing and driving from the 50-metre high hills to the ground on dune buggies. It’s scary and thrilling, but safe. After a few rounds of photography, we returned to liwa for a drive around the oasis – while lies at a high altitude with a road network connecting all the hills that hosts hotels, palaces and settlements. After a tour of the city, we returned to Tillal Liwa hotel a brilliant property that serves a growing number of tourists every week. Tillal Liwa has remained a very comfortable desert hideout for foreigners who want to explore the beauty of the

desert and also want to stay out of the hustle and bustle of the busy city life. The hotel boasts of 111 well appointed rooms including suits, managed by a team of 132 employees. Khaled Sharabassy, General Manager, Tilal Liwa Hotel, tells more about the property and the attractions in an exclusive interview with Gulf Property. Excerpts: Gulf Property: How was the room occupancy in 2014? Khaled Sharabassy: In 2014 we achieved Year-todate 86 per cent occupancy compared to 2013 year 74 per cent. Compared to previous year’s, the occupancy and business mix was different and opposite. The hotel has more business on the weekend occupancy than on weekdays.

This is due to the attractive step-in price and added values offered to guest for our attractive packages.

What is your hotel's unique selling points? The unique location and hotel activities.

What are the attractions around Liwa that visitors could explore? Among the nearby attractions, Liwa Oasis, one of the largest oasis in Arabia, is birthplace of the Abu Dhabi Ruling family, home to the Bedouin society and traditional Liwa Forts built in the nineteenth century. Rub Al Khali (The Empty Quarter) is the largest uninterrupted desert landscape in the world, more than 225,000 square miles. Tal Moreeb, UAE’s tallest sand dune over 300 meters

GULFTOURISM “We have the following tag line ‘Discover the true spirit of Arabia at the majestic Desert Resort’ and the resort guarantees an unforgettable Arabian experience with culture and adventure...”

– Khaled Sarabassy General Manager Tilal Liwa Hotel

high and 50 degrees incline to the top. A visit to Tal Moreeb gives visitors the roughness as well as the beauty of the Empty Quarter which is a must-see place.

What is your average room rate? Best available room rate starts from Dh750 (excluding 10 per cent service charge and 6 per cent tourism) room rate only. Rates may change depending on the availability.

Who are the visitors – local, regional or international? The nationalities are from UAE and Middle East, UK and others from European and Asian countries. The main feeder market is from the UAE residents and leisure travelers from the German and Chinese markets.

How is the demand for hotel rooms growing in Liwa oasis? We are getting high demands from corporate bookings and leisure especially from Chinese and German markets who wanted to explore the desert property and experience the hotel activities. What are your plans to promote the hotel this year? We are currently promoting lots of unique offers with very attractive packages and added values combined with activities for family, couples and groups which are available throughout the year, Danat Weekend Escape and Danat Fabulous Choice

Are you participating at the Arabian Travel Market? Yes, for sure Danat can’t

miss such important event

What is your message to our readers who might not have visited Liwa or your hotel? We have the following tag line ‘Discover the true spirit of Arabia at the majestic Desert Resort’ and the resort guarantees an unforgettable Arabian experience with culture and adventure the camels, desert walks to the Oasis, desert dune bashing, desert quad biking etc. Come visit and stay at the majestic Tilal Liwa Hotel.

Will the management invest in expanding the hotel to accommodate more guests? Expanding the hotel accommodation with additional 100 keys was already planned to accommodate more guests. In addition, the hotel in this

Khaled Sharabassy General Manager Tilal Liwa Hotel

season is preparing more adventure activities to offer for the guests like archery, desert walk to the oasis, group teambuilding activities etc. The main areas which will focus on are the weekend, overseas leisure market and groups segments looking out for teambuilding / workshop /regional offsite meeting / product / vehicle promo launch etc. g Gulf Property

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SPOTLIGHT

DLD partners with London’s Dubai Property Show

he Dubai Land Department (DLD) was a strategic partner to the ‘Dubai Property Show’, a major real estate exhibition in the UK, which took place in London from February 27 until March 1, 2015. Organised in conjunction with DLD’s Investment Management and Promotion Centre, the three day event was aimed at boosting and reinforcing cooperation among all parties in Dubai’s property sector, as well as attracting local and foreign investments to Dubai. g

DP awards brokers

ubai Properties (DP) recently held a special ceremony to honour its partner real estate brokers for their valuable contributions towards the promotion and sales of commercial, residential and mixed-use DP projects during 2014. Abdulla Abushabieb, Executive Director for Sales and Customer Service at Dubai Properties, handed over the

‘Best Broker of the Year’ award to Property Networks in recognition of their success in posting the highest sales in terms of value and number of units. DP also awarded certificates of appreciation to FAM and Noor Al Fajr Real Estate Broker which placed them second and third, respectively. Abushabieb explained that the awarding ceremony is in line with DP’s efforts to forge

Palm Jumeirah wins another accolade

akheel’s world-famous Palm Jumeirah island in Dubai has been named a ‘must-see architectural wonder’ by travel website Expedia. Palm Jumeirah, Nakheel’s flagship project, is among the world's top places that travellers should visit, according to Expedia’s list of essential sights, which was compiled in collaboration with architecture news website Arch Daily. The website describes Nakheel’s manmade islands as ‘combining both structural and artistic genius with their elaborate palm tree shape’. A Nakheel spokesman said, “Palm Jumeirah is a proof of Dubai’s growth, en-

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ergy and ambition, and this accolade is a great honour for the island, Dubai and Nakheel. “Palm Jumeirah has long been recognised as a landmark engineering achievement that helped to put

Dubai on the world map. This endorsement further highlights how The Palm is not only a vibrant community and attraction for people living in Dubai, but a magnet for the tourists who visit the emirate each year.” g

strong relationships with real estate brokers who are considered genuine partners in the company’s pursuit of excellence and leadership in Dubai’s real estate sector. “Last year, Dubai Properties made remarkable progress in enhancing its market presence as reflected in the strong sales we enjoyed due to our collaboration with our network of real estate brokers,” he said. g

Luxury Lifestyle Awards to honour best in Middle East

uxury Lifestyle Awards is inviting companies from across 10 countries of the Middle East to take part in their 8th annual Luxury Lifestyle Awards, which will be held for the first time in the UAE on May 21 at The RitzCarlton Hotel and will gather 300 guests. The coveted luxury award is an international mark of excellence granted to the companies in the luxury segment for their initiatives and outstanding achievements for the year. g

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JLL MENA gets new head of strategic consulting

LL, the world's leading real estate investment and advisory firm, has announced the appointment of Michael Heitmann as its new Head of Strategic Consulting team for the Middle East and North Africa. Michael has over 17 years of experience in the real estate industry having worked extensively in the GCC, Levant, North Africa and SubSaharan Africa. He joined JLL in 2007 to develop its advisory business in the MENA region. Michael’s consulting capabilities include real estate developments, undertaking feasibility studies, highest and best use studies,

Aldar appoints new Chief Development Officer

risk analyses, and valuations and transactions of real estate developments. He has an in-depth knowledge on mixed use developments, airports, metro networks, leisure and entertainment, affordable housing, retail, hospitality, healthcare etc. g

ldar Properties PJSC, Abu Dhabi's leading listed property development, investment, and management company, recently announced changes to its executive leadership team. Talal Al Dhiyebi, currently Executive Director of Asset Management at Aldar is taking on the role as Chief Development Officer at Aldar, effective immediately. Talal will remain in charge of Asset Management and continue to report directly to the CEO. Talal is replacing Gurjit Singh, who has de-

than 500 clients across the region. Commenting on the occasion, Nick Maclean, Managing Director, CBRE Middle East, said, “We are extremely proud of our achievements in the Middle East and we are delighted to be involved in this exhibition as a way to pay tribute to the dynamism and imagination of the region. Huna Al Emarat is one of the few exhibitions in the region to showcase works predominately from Emirati artists and designers.” Talking about CBRE’s growth plans, Maclean added, “As the global economy improves, we will continue to benefit from the strength of our Global Corporate Services business,

which provides a range of support in respect of corporate occupational footprint. We also see a trend developing amongst corporates to expand the usual Middle East parameters to include

SPOTLIGHT cided to step down from the role to pursue other interests. Mohammed Al Mubarak, Chief Executive Officer of Aldar, said, “Since joining the company Talal has been a driving force behind a number of Aldar’s key developments, including Yas Mall which launched in November 2014. We have a strong development pipeline and under Talal’s leadership, we will bring a number of these to market in 2015. I would like to thank Gurjit for his tremendous contribution to our business. Under his leadership, we have launched a number of prime developments across the retail, residential and commercial sector that have played a transformative role in the development of Abu Dhabi.” g

CBRE celebrates 10 years in MENA

BRE, the global real estate consultancy firm, marked its 10th anniversary in the region with the opening of Huna Al Emarat: 2005 – 2015, a group art exhibition reflecting the evolution of the UAE during the past decade. Supporting the local arts scene, the exhibition features works across a range of media including painting, photography, sculpture and video by a diverse collection of locally-based artists. CBRE, a global business of more than 50,000 employees, has provided real estate consultancy across the Middle East since 2005, and participated in close to 1,000 transactions in its ten years in the region, servicing more

the geographies of the Indian subcontinent and the continent of Africa to create a super-regional operating envelope. Clearly, these represent exciting times for our business.” g Gulf Property

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SPOTLIGHT

Hope is new Dubai Opera CEO

maar Properties has appointed Jasper Hope, an accomplished international professional with deep insights in the management of high-end cultural venues and events, as the Chief Executive of the iconic Dubai Opera, the centrepiece of The Opera District development in Downtown Dubai, set to commence operations in 2016.

Hope, earlier the Chief Operating Officer of Royal Albert Hall in London, one of the world’s leading cultural and entertainment facilities in the world, assumed charge in January 2015 bringing his expertise in promoting highend cultural destinations. As Chief Executive of Dubai Opera, he will serve as its lead officer and international advocate focused on setting its artistic direction and driving global stakeholder relationships. Dubai Opera is a 2,000seat multi-format venue for opera, theatre, concerts, art exhibitions, orchestra, film, sports events, and seasonal programmes. Hope, who has extensive experience in creating, directing and promoting global events, is mandated with ensuring the

commercial success of Dubai Opera and developing its profile internationally. Ahmad Al Matrooshi, Managing Director of Emaar Properties, said, “We are delighted to welcome Jasper Hope on board our prestigious cultural icon. His deep expertise in managing internationally renowned venues and tremendous industry insights will be a great asset in establishing Dubai Opera as one of the world’s most prestigious and important cultural destinations. With Dubai Opera, we aim to further define Dubai’s cultural richness and create a dynamic platform for intercultural exchange. Hope’s proven track-record in identifying and motivating talent will be a strong resource in achieving our goals.” g

ATDD awards the Ajman Palace Hotel

n the occasion of annual ceremony of Ajman Tourism Development Department (ATDD), The Ajman Palace Hotel received a special award from ATDD in recognition of its dedicated efforts and support to the organisation during 2014. The Ajman Palace Hotel became the only hotel to receive this special recognition. Expressing ATDD's sincere appreciation for the hotel's contribution in promoting the destination, Sheikh Abdulaziz Bin Humaid Al Nuaimi, Chairman of ATDD presented the prestigious certificate to Ferghal Purcell, General Manager of The Ajman Palace Hotel. g

Jumeirah Golf Estates now becomes official partner of the European Tour

umeirah Golf Estates and The European Tour announced that the premium residential golf community in Dubai has become an Official Partner to The European Tour. The agreement will see JGE promoted through The European Tour’s multi-platform network, including yearround presence on europeantour.com, extensive TV exposure and Official Partner presence at multiple European Tour tournaments internationally. g

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