Gulf Property September 2015 by Gulf Property

Gulf Property

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VOL. 7, NO. 12 SEPTEMBER 2015

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Faizal E. Kottikollon KEF Holdings

Dubai issues law to regulate property survey and valuation

KEF Holdings Dubai property deals hit Dh129 bn in H1 2015

Buying is now a better option than renting a home

EXCLUSIVE INTERVIEW Wouter Molman, Cityscape Pawan Dhawan, Noor Bank Said Haidar, Yardi Solutions

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VOL. MARC 7, NO. 6 H 2015

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EDITORIAL

A revolutionary move that will change the construction industry and have buildings ‘made easy’...

KEF Holding’s new technology will reduce construction cost, time and wastage as well as reduce labour engagement

n our current issue of Gulf Property, we bring to our readers a game-changing new technological innovation that will revolutionise the construction industry. The offsite construction industry that literally ‘manufactures’ buildings from concept, design to manufacturing components and transport onsite for assembly and construction of buildings with minimum human interaction, is going to change the way buildings are constructed in future.

The good thing is, the company KEF Holdings, that is developing this industry has its roots in Dubai and India – where the offsite construction batching and manufacturing plant – has been set up. The man behind this game-changing move is none other than a non-resident Indian entrepreneur Faizal Kottikollon – an industrial engineer – who built his business in the UAE and currently taking it to a global stage. His technology will drastically reduce cost, construction time, waste and is more environment-friendly.

The new development comes at a time when governments are pushing for affordable homes. KEF Holding’s new technology will help developers deliver affordable homes and participate in government’s vision. The technology reduces costs by 25-30 per cent while it reduces construction time by at least 40 per cent. We welcome Dubai Executive Council’s new law aimed at regulating property survey and valuation services. The objective of the Law No 37 of 2015 is to create governing standards for surveyors and property valuers, that is expected to further boost transparency and investor confidence in the emirate’s real estate sector. The new law will require people who assess property to possess certain qualifications and be registered with Dubai’s Real Estate Regulatory Agency (RERA). Despite the odds, Dubai Land Department has recorded Dh129 billion worth of land, property and mortgage transactions during the first half of the year – which reflects the level of maturity of the sector and its resilience.

In this issue, Gulf Property has reflected on the mortgage market. Our findings show that, if a family buys a ready-to-move-in home, they can own a home by paying less than their current rent. In other words, their equated monthly installment could be lower than the rents – if calculated on the monthly basis. So, why rent, when you can buy and protect from rent-related inflation? In the meantime, Gulf Property completes seven years of difficult journey this month. We take this opportunity to thank all our readers, advertisers and well-wishers.

– T. Akhtar

CONTENTS

COVERSTORY

New Yardi-sticks in asset management comes

HOMEFINANCE

Home buying has become easy with low mortgage rate 52 Home buyers in the UAE are in ‘wait and see’ mode 58

EXECUTIVEOPINION

Mohanad Alwadiya/Harbor 22 Richard Sweetman/RICS 23

HOMEFINANCE

COVERSTORY

KEF Holdings brings revolutionary technology in construction industry

NEWSUPDATE

Land deals worth Dh129 billion concluded in Dubai in the first half of 2015 38

MEGAPROJECTS

Meydan One to add a new feather in Dubai’s cap

INTERVIEW

Cityscape to be 30 per cent bigger this year 46

INTERVIEW

TALLTOWERS

About 18 of world’s tallest 100 towers are located in Dubai 60

NEWSUPDATE

Dubai issues Property Valuers’ Registration Law 67 Damac makes major foray in London with luxury project 68

INDIAPROPERTY

India to build 110 million homes in 7 years 71 UAE’s $75 billion to boost Indian realty 72 Tata Housing enters GCC 74

REGULARFEATURES Realty Bytes Spotlight

GULF PROPERTY

LICENCE

EDITORIAL

EDITORIAL AND COMMERCIAL ADDRESS Pan Asian Media MFZ-LLC P.O. Box No.: 39865. Dubai, UAE Tel : (9714) 2281021 Fax : (9714) 2281051 E-mail editor@panasian1.com Web www.gulfpropertyme.com

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

Editor T. Akhtar editor@panasian1.com

Senior Reporter/Sub-Editor Indrajit Sen i.sen@panasian1.com

PUBLISHER

T. Akhtar Pan Asian Media MFZ LLC

12 78

Licenced by RAK Media City, authorised by the National Media Council. Gulf Property is a publication of Pan Asian Media MFZ-LLC

CIRCULATION 20,000 copies

Gulf Property

12-21 Realty Bytes_Layout 1 27/08/2015 16:31 Page 1

REALTYBYTES

TECOM, Amlak launch off-plan financing for Villa Lantana

ECOM Investments has signed an agreement with UAE-based real estate finance provider Amlak Finance, to offer Shari’a compliant financing options via its ‘Amlak Tatweer’ scheme to all buyers of Villa Lantana homes. Amlak will offer financing of up to 50 per cent of the property value prior to project handover, with the option to re-finance up to 75 per cent upon completion for tenures of up to 25 years at ‘highly competitive rates’. The Villa Lantana development is located in Dubai’s Al Barsha and offers 440 freehold villas.

Arcapita buys Saadiyat complex from Mubadala

rcapita, the Dubaibased investment firm, said it has acquired phase one of Saadiyat Beach Residences on Abu Dhabi’s Saadiyat Island, from Mubadala Real Estate Development Company. The transaction was partly funded by a Sharia’ahcompliant financing facility provided by the Abu Dhabi Commercial Bank (ADCB).The residential complex, that comprises three low-rise buildings within a gated community, holds 285 one to threebedroom apartments.

Gulf Property

wasl opens 2nd Hyatt Place hotel in Dubai

asl Hospitality and Leisure, the subsidiary of wasl Asset Management Group, said, it has opened Hyatt Place Dubai in Baniyas Square in Dubai. The new facility is the second Hyatt Place hotel in Dubai and marks wasl and the Hyatt Ho-

tels Corporation’s extension of the mid-range hospitality brand in Dubai. wasl Hospitality and Leisure previously launched the Hyatt Place Dubai, Al Rigga in May 2014, bringing the brand to the Middle East for the first time. The inaugural Hyatt Place hotel in the region formed part of the wasl

trio project and was successful in recording over 80 per cent occupancy rate in its first year of operations, wasl claims in a statement. Hyatt Place Dubai/Baniyas Square is located in the old part of the city and is just about 12 minutes from Dubai International Airport and a minute’s walk from the Baniyas Square metro station. Popular tourist attractions within the vicinity include the Dubai Museum, the Dubai Creek and Deira’s gold, spice and textile souks. Hyatt Place Dubai/Baniyas Square’s facilities and services include 126 rooms. Guests are also able to use the hotel’s free shuttle service to access Dubai’s leading shopping malls and the Mamzar Beach Park. Hesham Al Qassim, CEO of wasl says that his company plans to open another Hyatt Place by the end of 2016 as part of the wasl district project in Deira.

Construction of Marina Bloom over: ASGC

l Shafar General Contracting Co. LLC has announced that it has completed structural works for the Marina Bloom development at Abu Dhabi Marina. The mixed-use project is being developed by Bloom Properties in Al Bateen area of the UAE capital. The development features a 5-star hotel, 57 serviced apartments and waterfront retail areas, besides offering views of the Arabian Gulf and the city’s skyline.

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Naresco bags Danube contract for Glitz I & II

anube Properties has awarded the main construction contract for their upcoming residential projects Glitz 1 and Glitz 2 to UAE-based Naresco General Contracting. Construction on both sites of the Dh300 million project is four months ahead of the schedule and a workforce of over 500 people are expected to be on site during peak season.

HMG expands USA portfolio; launches student property

ubai-based real estate enterprise HMG Properties has announced the launch of its first student accommodation project in the USA. Located in Gaffney, South Carolina state, the project is located minutes away from major

Moreover, Danube has also awarded Atlas Foundation Co. LLC the earthworks contract for the latest Glitz 3 project. Shoring and excavation work on the Glitz 3 development is scheduled to commence in September. “When investors make financial commitment in an offplan property, it is very important that they are kept thoroughly informed about the progress being made on colleges and universities such as the University of South Carolina, Limestone College, Gardner Webb University, among others. Academic Square Carolina offers 1- and 2-bedroom units for local and international students. With a built-up area of 49 square meters or 65 square meters, the units are equipped with basic facilities and roundthe-clock security. The developer ‘aims to capture a large chunk of the growing student accommodation market’. Currently more than 20 million stu-

their property,” Rizwan Sajan, Founder and Chairman of Danube Group, was quoted as saying. The developer says, it has fully sold out Glitz 1 and 2, while Phases 1 and 2 of the Glitz 3 project (launched in June) have been sold. Currently, Danube maintains a book value of Dh1.2 billionworth of projects, with over 1.7 million square feet under construction. dents are enrolled in US colleges and universities, and the overall college enrolment growth in the United States is projected to grow to 24 million by 2020. “The sector’s (student accommodation in the US) rent growth and occupancy figures have outperformed traditional multi-family apartments during the recent downturn, encouraging the current investor demand for student housing property,” Raed Bourjass, CEO of HMG Properties, was quoted as saying in a press release.

REALTYBYTES

Al Hamra to expand Manar Mall in RAK

l Hamra Real Estate Development has announced an expansion project to add a waterfront retail promenade and an entertainment centre, worth Dh230 million, for its flagship Manar Mall in Ras Al Khaimah. The developer said construction work on the redevelopment plan began in mid-April. The expansion plan for Manar Mall has been designed by Cadiz International, a shopping mall architectural firm, with Shankland Cox Ltd appointed as lead consultants. Completion of is scheduled for Q3 2016 and will double the mall’s Net Leasable Area.

Depa signs contracts worth Dh719 million in Dubai

nteriors contracting company Depa Limited said, it has signed new contracts worth over Dh719 million in H1 2015. Depa Interiors won contracts worth Dh87 million, including projects such as Emaar’s Dubai Opera in Downtown, the Madinat Jumeirah Extension and FF&E packages for the new Nikki Beach Resort, being developed by Meraas. Depa Albarakah has also won a Dh16 million bid for the supply and installation of dry wall partition works at IMG’s Theme Park site. Gulf Property

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REALTYBYTES

Abu Dhabi approves Reem Mall development

he Abu Dhabi Urban Planning Council (UPC) has approved the development plans of Reem Mall, weeks after it gave the go-ahead for the Reem Island Integrated Concept Masterplan. The $1 billion Reem Mall - set to complete Abu Dhabi’s Reem Island - will eventually house 210,000 residents. Once completed, Reem Mall, developed by the National Real Estate Company (NREC) in partnership with United Projects for Aviation Services Company (UPAC), is set to deliver 2 million square feet of retail, leisure, and dining and entertainment choices with some 450 stores including 85 food and beverage outlets.

R Hotels names contractors for Palm property

Hotels has appointed ANC Contracting LLC as the main contractor and Erga Progress Engineering Consultancy as project consultant, for the second phase of construction of its new resort and spa on Dubai’s Palm Jumeirah. R Hotels’ new Dh500 million-worth resort and spa will include 253 rooms, a wellness centre, two restaurants and recreational facilities. It is tipped to be the first 4-star and sharia-compliant hotel on the Palm.

Gulf Property

Emaar Properties’ H1 2015 profit grows 12% to Dh2.2bn

maar Properties, developer of the world’s tallest tower Burj Khalifa, reported a 12 per cent increase in its net profit reaching Dh2.2 billion during the first six months of 2015 compared to Dh1.97 billion recorded in H1 2014. Total revenue grew 13 per cent to Dh6.49 billion in H1 2015, compared to Dh5.73 billion recorded in the corresponding period last year. The company’s rise in profits were powered by shopping malls, retail and hospitality businesses, which together contributed Dh2.9 billion during H1 2015, accounting for 45 per cent of the total revenue. The recurring revenue from these ventures was 10 per cent higher than the H1 2014 revenue of Dh2.64 billion. Emaar’s international revenues during H1 2015 stood at Dh1.17 billion ($319 million), represent-

ing 18 per cent of the total revenue. International revenues during H1 2015 were 36 per cent higher than the same period last year. During the Q2 2015 (April to June), Emaar recorded a net profit of Dh1.179 billion ($321 mil-

lion). This is 16 per cent higher than the same period last year and 15 per cent higher than Q1 2015 (January to March). Revenue for Q2 2015 was recorded at Dh3.484 billion ($949 million); 16 per cent higher than Q1 2015.

Emaar Malls earns net profit of Dh845m in H1

maar Malls, the shopping malls subsidiary of Emaar Properties, recorded a 37 per cent growth in net profit during H1 2015 (January to June) to Dh845 million ($230 million), compared to the same period in 2014. Revenue for H1 2015 was Dh1.46 billion ($398 million), 16 per cent higher compared to the same period last year. Tenant sales across all Emaar Malls assets were recorded at Dh9.6 billion

($2.6 billion). Emaar Malls welcomed over 62 million visitors during the first six months of 2015, 11 per cent higher than during the same period last year. Base rent renewal rates recorded an increase of 30 per cent for leases renewed during H1 2015 across all its malls and retail assets. Total GLA (gross leasable area) occupancy across Emaar Malls assets increased to 96 per cent.

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Dubai World Central gets new name – Dubai South

he Dubai Government has renamed its 145square kilometres aerotropolis ¬ Dubai World Central – as ‘Dubai South’, which will host the world’s largest greenfield airport development, Al Maktoum International and the World Expo 2020. The project is expected to be home to more than one million people, where Emirates Airline is expected to shift its base when complete. Al Maktoum International Airport has a design capacity to serve 160 million passengers annually. “Pursuant to Law No. 11 of 2015 issued by His Highness Sheikh Mohammad Bin Rashid Al Maktoum, VicePresident and Prime Minister of the UAE, in his capacity as Ruler of Dubai, which established Dubai World Central as a subsidiary of Dubai Aviation City Corporation, Dubai World Central has named its 145 square kilometre masterplanned city ‘Dubai South’,” a statement said. Announcing the new name, Sheikh Ahmed Bin Saeed Al Maktoum, Chairman, Dubai Aviation City Corporation,

said, “Over the decades, Dubai’s leadership and its people have worked together to transform the emirate into one of the world’s most desirable destinations. A vibrant economy, excellent roads, landmark buildings, and attractive recreational facilities are outstanding accomplishments we are proud of – but they are simply the means to a higher end, which is to facilitate the happiness of people. The Government of Dubai has been working to build a new destination – which we are naming today ‘Dubai South’ – where individuals can empower themselves to achieve their legitimate aspirations to the greater good of society. The name is iconic, and will become instantly recognizable for years to come. Dubai South is the emirate’s flagship urban project that will set benchmarks for the rest of the emirate in terms of manifesting the themes of happiness as set out in Dubai Plan 2021.” As a city basing itself on the happiness of the individual, Dubai South aims to change

the fundamental concept around how a community is built and what it stands for. The city’s ecosystem is expected to generate over half a million jobs and sustain a total population twice that number. Dubai South’s two essential urban dimensions of living and commerce are reflected in its logo, whose colour is a mixture of green and blue. Green represents living, and is also symbolic of rebirth, growth and sustainability. Commerce and industry is universally represented by blue. Dubai South hosts the nowoperational Al Maktoum International Airport, which will become the world’s largest once complete. The airport will have capacity to fly 220 million passengers and 16 million tonnes of cargo per year, and will play a decisive role as a major contributor to the emirate’s GDP and employment. Adding to the development’s prestige are the several key events that Dubai South hosts, such as the World Expo 2020 and the Dubai Airshow.

REALTYBYTES

Meydan Sobha markets ‘MBR City District One’ in UK

ubai-based developer Meydan Sobha began its marketing campaign for its Dh10 billion project ‘Mohammed Bin Rashid Al Maktoum City – District One’ in the UK in August. The developer hosted a sales event at The Dorchester Hotel in London, the first in a series being hosted across the UK, Europe and Asia, and was attended by ‘over 200 UK and European investors, along with visiting guests from around the world’, a statement says. The developers promoted ‘The Mansions at District One’, the high-end residences ranging from 1,650 to 3,250 square metres, with prices starting at Dh50 million.

Jumeirah to operate hotel, residences in Kuala Lumpur

umeirah Group has signed management agreements with Oxley Malaysia to operate a 190room Jumeirah hotel and to brand 273 residences in the Malaysian capital Kuala Lumpur. Jumeirah Kuala Lumpur hotel and Jumeirah Living Kuala Lumpur residences will be set within one of the three towers which would make up a mixed-use project located in the Kuala Lumpur City Centre precinct. Gulf Property

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REALTYBYTES 80% of MAG 5 Boulevard Phase 1 sold

AG 5 Property Development, a realestate company formed jointly by MAG Property Development and MBM Holding, said it has sold out 80 per cent of Phase 1 of its affordable housing project ‘MAG 5 Boulevard’. Located at the now renamed Dubai World Central’s residential district area, MAG 5 Boulevard opened to buyers on the day of the launch. Handover of the Phase 1 is scheduled to commence in Q1 2018. Phase 2 is to be launched during Cityscape Global in September.

Gulf Related awards main contract for Al Maryah Central

ulf Related has appointed Brookfield Multiplex as the main contractor for completion of the $1 billion worth Al Maryah Central. Vertical construction of the 2.3 million square feet retail offering on Al Maryah Island in Abu Dhabi, commenced in August. Ground breaking happened in November 2014, with the site excavation and foundation building complete. Brookfield’s $425 million contract covers the remaining construction of the mall, set to open in March 2018.

Gulf Property

Aldar’s Q2 2015 net profit rises by 18% to Dh601 million

bu Dhabi’s largest property developer Aldar Properties said, it has recorded a net profit of Dh601 million in Q2 2015, a growth of 18 per cent from its Q2 2014 figure of Dh509 million. Revenues for Q2 2015 were recorded at Dh1.1 billion compared to Dh2,19 billion in the Q2 2014. Also

in Q2 2015, the gross profit margin was 45 per cent, up from 15 per cent in Q2 2014. Development revenues were registered at Dh318 million. During the quarter Aldar repaid a further Dh1.1 billion of loans from excess cash in the business, reducing gross debt further to Dh7.1 billion. Earlier, Aldar also announced strong sales performance in H1 2015 with

Dh1.9 billion committed in sales for land plots on Nareel Island, Al Merief and unit sales at Meera at Shams Abu Dhabi. Aldar’s cash position marginally increased to Dh5.3 billion as at the end of Q2 2015, following the receipt of Dh1.2 billion in government infrastructure receivables, offset by the debt repayments.

Dh2.65bn

net profit earned by Damac Properties in H1 2015, 50% higher than H1 2014. Revenues earned were Dh4.74 billion

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Nakheel earns Dh2.8bn net profit in H1 2015

akheel recently reported a 53 per cent jump in net profit to Dh2.83 billion in the first six months of 2015, up from the H1 2014 profit of Dh1.85 billion. The Dubai-based developer attributed this ‘sharp increase’ in profits mainly due to continued strong performance by Nakheel’s development business’, with ongoing handovers of properties to customers. The company’s retail, leasing and leisure businesses also contributed to the overall financial results for H1 2015, said Nakheel. Nakheel continues to focus on completing various projects, as well as expanding its retail, hospitality and residential leasing projects. “We have achieved a significant increase in our net profit for the first half of 2015 compared to the same period in 2014. We will build on these results during the second half of this year, and remain committed to playing a key role in contributing positively to Dubai’s real estate sector,” Nakheel Chairman Ali Rashid Lootah said.

Contracts awarded for Al Farjan mosque, retail centre

akheel has appointed Dubai-based Al Sakher Contracting LLC to build a mosque and a second retail centre at its 560 hectare Al Furjan community in Dubai. The contract value is Dh38 million. The 8,000 square feet mosque – the first in Al Furjan – will accommodate 500 worshippers and be built beside a 90,000 square feet Nakheel Pavilion retail centre, with more than 35 shops, cafes’ restaurants and services including a nursery, gym and supermarket. Leasing is already underway.

Nakheel has appointed Al Sakher Contracting LLC to construct the project, which is scheduled to open in 2017. The new complex, to be built on the western side of Al Furjan, is the second Nakheel Pavilion at the community. The first, under construction at Al Furjan South, spans more than 100,000 square feet and has a swimming pool and sports courts as well as retail facilities. It is already fully leased, and is due to open in mid-2016. Construction of another mosque at Al Furjan South will also begin soon.

REALTYBYTES

Nakheel, Al Tayer Group sign deal to expand Al Khail Avenue

akheel has inked a deal with Al Tayer Group to bring more brands to Al Khail Avenue mall at Jumeirah Village. Under the agreement, some of Al Tayer Group’s lifestyle and hospitality brands – including Gap, Mamas and Papas, Armani Exchange, Banana Republic, Areej, Caffe Nero, and Ocean Basket – join Al Khail Avenue’s list of shops, cafes and restaurants. Al Tayer Group stores will occupy more than 54,000 square feet at the new mall. Al Khail Avenue, to be constructed alongside Dubai’s Al Khail Road on the eastern edge of Nakheel’s Jumeirah Village Triangle community, will have 1.2 million square feet of retail space accommodating 350 shops, a multi-screen cinema and a diverse range of cafes – some with outdoor dining areas. There will also be a multi-storey car park with 4,400 spaces. The mall is due to open in 2018. Almost 60 per cent of Al Khail Avenue has been booked, with more deals currently being finalised. Confirmed tenants in addition to Al Tayer Group brands include a 14screen movie complex from Reel Cinemas, Waitrose, Home Centre, Emax, Centrepoint, Sports One and many more. Gulf Property

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REALTYBYTES

Al Habtoor City to create thousands of jobs: AHG

l Habtoor City, the vertical residential and hospitality development under construction in Dubai, will employ thousands of people, its developer said. The Dubai-based business conglomerate Al Habtoor Group (AHG) has said that its recruitment teams are hiring locally and abroad to ensure a diverse mix of nationalities and skillsets. The AHG Chairman Khalaf Ahmad Al Habtoor, who built his first hotel on the plot in 1979, said Al Habtoor City – set to open later this year - will be a major boost to the local economy. The AHG also said, it will open three hotels within the Al Habtoor City in the fourth quarter of 2015. The St. Regis Dubai, the first hotel due to open, features multiple event venues, including an 800 square metre-ballroom named ‘Astor’ that can host up to 725 guests. W Dubai – Al Habtoor City will feature a 726 square metre ‘Great Room’ for around 660 guests. In addition, there are five other studios ranging from 34 square metres to 90 square metres, as well as an entertainment area in the foyer. The Westin Dubai, Al Habtoor City offers options including The Westin Grand Ballroom, at 1427 metres, which can be divided into three separate banquet spaces.

Gulf Property

DPR makes Dh29m loss in Q2 2015

ubai Parks and Resorts PJSC (DPR), the multi-themed leisure and entertainment destination, has reported a loss of Dh29 million in Q2 2015. While total assets stood at Dh7 billion, the cumulative project expenditure, including land acquired, amounted to Dh3.8 billion, an increase from Dh3 billion in the previous quarter. The management has projected revenues in the first full year of operation at Dh2.4 billion and hopes DPR will create over 5,000 jobs. “Our second quarter 2015 financial results are in line with our plans. There were no operating revenues and the loss was Dh29 million for the period ended 30 June 2015. The first revenues are expected towards the end of 2016 following the opening of the parks to the public,” Raed Al Nuami, Chief Executive Officer, Dubai Parks and Resorts, said. As reported by Gulf Property earlier, the park is expected to open doors in

October 2016. The project infrastructure is 57 per cent complete as at the end of second quarter, up from 43 per cent in the first quarter. Ride engineering and manufacturing is 52 per cent complete and 80 per cent of procurement has been completed. Dubai Parks and Resorts also signed two partnerships in Q2 2015. In April, the management announced its first revenue generating deal with Picsolve International to create a photography complex,

which is expected to generate over Dh100 million over a five year period. DPR also signed a Memorandum of Understanding with dnata to be the preferred travel partner. Dubai’s Roads and Transport Authority has recently awarded a Dh244 million contract to the China State Construction Engineering Corporation Middle East to construct, over the next 14 months, dedicated access roads from Sheikh Zayed Road to the theme park.

ubai-based Deyaar Development has reported a consolidated net profit of Dh85.8 million for the second quarter ended June 30, 2015, up by 37.5 per cent from Dh62.4 million registered in the same period last year. “The first-half results reflect Deyaar’s commitment towards our various stakeholders. The positive num-

bers also indicate Deyaar’s success in achieving healthy results,” Saeed Al Qatami, CEO Deyaar, said. “Safeguarding the interests

of our customers and maximising value for our shareholders remain at the heart of our business strategy,” he added.

Deyaar Q2 2015 profits rise by 37.5%

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RAK Ceramics profit eases 5.7% to Dh86m in Q2 2015

AK Ceramics, the global ceramics manufacturer, reported a 2.4 per cent decline in its net profits to Dh146.4 million during the first half of 2015, although the Ras Al Khaimah-based manufacturer’s second quarter profit declined 5.7 per cent to Dh85.9 million, a company statement said. The company’s overall revenues declined by 1.1 per

cent reaching Dh803.8 million in Q2 2015, same level as in H1 2015 of Dh1.55 billion. Non-core revenues increased in Q2 2015 by 11 per cent to Dh137.3 million (20.9 per cent increase in H1 2015 to Dh255.2 million) and core tiles and sanitary activities in the core focus markets also witnessed strong growth. The UAE local market tiles sales recorded a 9.5 per cent increase and reached

Dh121.8 million in Q2 2015 (9.5 per cent increase in H1 2015 to Dh242.1 million) and sanitaryware local UAE sales increased by 6.7 per cent to Dh36.4 million (5.2 per cent increase in H1 2015 to Dh69.0 million). Sales in Saudi Arabia have also rebounded as tiles sales increased by 5.0 per cent to Dh88.9 million compared to the first quarter of 2015. During the period, RAK Ceramics strengthened operational efficiencies through controlling operating costs and enhancing technology. Savings from non-core operations turn-around and raw material, procurement and freight savings allowed the company to increase blended gross margins to 27.7 per cent in Q2 2015 (28.3 per cent in H1 2015) and core gross margins to 30.6 per cent in Q2 2015 (30.4 per cent in H1 2015). In Q2 2015, RAK Ceramics sold RAK Gypsum and Al Hamra Aluminium and 15 townhouses in Al Hamra Village for Dh25.2 million.

Dubai to build world’s first 3D office

ubai will build the world’s first 3D printed building. The 2,000 square feet ‘office’ will be printed layer-by-layer using a 20-foot tall 3D printer, then assembled on site in just a few weeks. All furniture, detailing and structural components will also be built using 3D technology. It will feature a digital fabrication facility and a 3D printing exhibition space.

REALTYBYTES

G&Co, SPF Realty join hands for MBR City project

ubai-based real estate developer G&Co has collaborated with Dubai brokerage firm SPF Realty for their third project in the emirate. The freehold project titled ‘Jade at the Fields’ - having an estimated value of Dh1 billion – is to be located in the District 11 of Mohammed Bin Rashid Al Maktoum City. The project is to be a gated residential community consisting of 360 townhouses of contemporary style. G&Co has appointed SPF Realty as sales agent for the Jade at the Fields project after receiving a profitable response for two of its previous projects.

DIP attracts 436 companies in 5 months of 2015

he Dubai Investments Park (DIP) has told the media that it has attracted 436 new companies in the first five months of 2015, taking the total number of companies within the 2,300-hectare development to nearly 4,500. During the period, the new companies leased warehouses, distribution centres, offices and light industrial units across a total area of 580,000 square feet. The sub-tenants include brands such as Splash Gulf LLC and Majan Food Industries, among others. Gulf Property

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REALTYBYTES

Sharjah’s Tilal City reserves plots for green spaces

ilal Properties recently said, 45 per cent of the land within its flagship Dh2.4 billion-worth Tilal City development in the emirate of Sharjah will be dedicated to community facilities such as green spaces, jogging and bicycle tracks and six mosques, as well as education, retail and leisure areas. Tilal Properties, the joint venture between Sharjah Asset Management and Eskan Real Estate Development, revealed that there will be a total of 11 education facilities including schools and early development centres for children. In addition there will be a number of mixeduse facilities such as leisure centres, healthcare facilities and civil defence stations. According to the masterplan, designed by UAEbased architects Khatib & Alami, the heart of the city will be occupied by a shopping mall, surrounded by a central garden connecting the whole development and providing green public spaces lined with shops, restaurants and cafes. Meanwhile, Tilal Properties has launched sales for Tilal City in Muscat, Oman. Cluttons, the marketing and sales agent for Tilal City, will market the development through its offices in Oman.

Gulf Property

Emirates REIT invests in Dubailand school

mirates REIT (CEIC) Limited recently announced that it has acquired a freehold land plot and will fund the development of a new school in the ‘Akoya’ development in Dubailand. Emirates REIT has entered into an Istisna agreement (in Islamic finance, a contract to build a house or other structure according to exact specifications and a fixed timeline) with Jebel Ali School, one of the oldest schools in the UAE, to build and maintain the latter’s new school facility for a 26-year lease period. The UAE-based Shari'a compliant real estate investment trust acquired the freehold land plot from Damac Crescent Properties for Dh98.5 million (including acquisition costs), and immedi-

Emirates REIT income rises by 6.4% in H1 2015

mirates REIT has announced that in H1 2015 its net income rose by 6.4 per cent to Dh 164 million, and net profit was up by 2.8 per cent to Dh129 million. The REIT started to realise significant capital appreciation on Index Tower, reflecting a positive start to leasing the asset. This contributed to increasing total assets by 5.3 per cent in the ately leased it to Jebel Ali School, providing an initial net income in excess of 10 per cent of the acquisition costs of the plot.

last six months to Dh2.3 billion. Emirates REIT paid shareholders a total dividend of Dh88 million for 2014, equivalent to Dh0.29 per ordinary share. This was an increase of 60 per cent over the dividend relating to 2013. For the first half of 2015, the annualised total return of the REIT was 16.4 per cent. The construction of the school facilities is estimated to cost Dh109.8 million, bringing the total invested to Dh208.3 million.

DEWA launches smart grids

he Dubai Electricity and Water Authority (DEWA) launched three smart initiatives, namely the ‘Shams Dubai’ initiative to connect solar power to houses and buildings,

‘Smart Applications’ initiative through smart meters and grids, and the ‘Green Charger’ initiative to develop infrastructure and electric vehicles stations. Within the first phase,

DEWA is currently installing 200,000 smart meters which will be operational in January 2016. Subsequently, over a million smart meters will be installed by 2020 covering the whole of Dubai.

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Number of projects in Abu Dhabi triples

he total floor area of developments given the green light more than tripled in the second quarter of the year, according to figures released today by the Abu Dhabi Urban Planning Council (UPC). The UPC announced that 26 development projects spanning a total gross floor area (GFA) of 2,327,073

square metres were approved during Q2, compared with 708,999 square metres in the previous quarter. The number of projects given the go-ahead was up by just under 25% from the 21 approved in Q1. On Abu Dhabi Island, a mixed-use tower development in a prime location facing the Abu Dhabi Corniche was approved. The develop-

ment has been designed with a distinct lower fivestorey podium that has three 24-storey towers emerging over it. Located on the Abu Dhabi Corniche, close to the Corniche Hospital, the Saraya residential tower, comprising 49 storeys and three basement floors for underground parking, was also approved. On Abu Dhabi Mainland, the Burjeel Medical City project in Mohammed Bin Zayed City, a 300-bed speciality hospital covering a GFA of almost 82,000 square metres, was approved. To date, the UPC’s Urban Development has delivered 440 projects and master plans with a total GFA of 73.6 million square metres. Since the Estidama Pearl Rating System was launched four years ago, the Estidama team has reviewed many projects – a total of 11,878 villas and 1,004 buildings have been awarded a Pearl Rating.

DSI records Dh34mn in profits in H1

rake and Scull International PJSC (DSI) has reported Dh34 million net profits on total revenues of Dh2.39 billion during the first half of 2015. The company achieved a 2 per cent Y-o-Y growth in revenue in H1 2015. About 37 per cent of the consolidated group revenue was generated in Saudi Arabia which remained the largest market for DSI in H1 2015. Operations in the UAE

picked up momentum and contributed 28 per cent of the group revenue; up by 7 per cent as compared to the same period in 2014. Operations in Qatar improved and contributed 16 per cent of the group revenue for the period, up by 8 per cent compared to last year. Operating profit for H1 2015 was Dh58 million down by 27 per cent as compared to the same period in 2014. The decline in

the operating margins is attributed to delays and cost overruns on projects across several markets. Meanwhile, Drake and Scull Engineering Kuwait (DSE) has secured an MEP contract worth Dh218 million for an educational institution which is scheduled to be completed in 2018. The Dh218 million contract also boosts up DSI’s total project awards in 2015 year to date to Dh1.57 billion in value.

REALTYBYTES

Manazel records 179% profit boost in H1 2015

bu Dhabi-based developer Manazel Real Estate recorded a net profit of Dh45 million during H1 2015, up by 179% from Dh16.1 million in H1 2014, ‘largely driven by improved margins from sale of properties and reduction in financing costs’. Revenues stood at Dh262.8 million, compared to Dh284.5 million, as the handover of Al Reef Downtown was completed in 2014. EBITDA during the period was Dh77.9 million, up by 39 per cent from Dh56.1 million. ‘This is attributable to Manazel’s cost management program, which also included renegotiations with existing banks to reduce financing costs’, a statement said.

DP, Starwood sign contract for four hotels

ubai Properties and Starwood Hotels and Resorts Worldwide Inc. have announced an agreement to open four new hotels in Dubai under Starwood’s Aloft and Element brand flags. This deal takes Starwood’s mid-range portfolio to 11 this year, representing nearly 50 per cent of its Middle East pipeline. Set to open in 2018, the four Aloft hotels and Element hotel will introduce 816 rooms in Dubai while. Gulf Property

22 Mohanad_Layout 1 27/08/2015 15:23 Page 1

OPINION

MOHANNAD ALWADIYA

Managing Director of Harbor Real Estate, Instructor and Advisor at the Dubai Real Estate Institute

ven though some buyers continue to maintain a ‘wait and see’ approach as property prices continue to soften, if you have invested in Dubai property, especially in key growth areas, then hold on to your portfolio. In fact, we would advise you to, if possible, add to your portfolio. Dubai’s economy is still doing very well although the IMF forecast for UAE economic growth this year is down to 3 per cent compared to last year’s 4.6 per cent, which is quite understandable considering the after-effects of the recent oil price slump on economy. Having gradually weaned the country away from overdependence on oil, the UAE remains in a good fiscal position as it proceeds with economic diversification. The UAE economy is being driven by tourism and trade, and a slew of successful new projects that will complement these important revenuegenerating economic segments which continue to be a primary feature of Dubai’s growth outlook. In 2014, Dubai welcomed over 12 million visitors, continuing a

Gulf Property

Right time to grow portfolio growth trend of approximately 9 percent per annum since 2010, a statistic which is the envy of many nations. The ‘soft landing’ of the UAE economy is by no means bad news as it is simply indicative of more gradual sustainable growth overall which, in turn, is supported by the following factors: g The market is in a healthy state of revaluation and consolidation, not recession. The reduction in growth rates is necessary to ensure the type of sustainable, profitable growth that long-term investors seek becomes a recognised characteristic of the Dubai market. The market has demonstrated its maturity and resilience by recovering post-global financial crisis and is now adjusting to more sustainable value appreciation levels. g Strong demand for property. When you are investing in real estate, you are actually investing in the economy, and the effect of the 2020 Expo on the UAE economy cannot be underrated in terms of generating demand for real estate assets. Hosting the World Expo will provide additional impetus for the industry to enjoy continued growth, and the predictable surge in demand for accommodation and commercial space of all types, from labor camps to offices to warehouses to apartments to executive villas, is sure to have a significant effect on property values. g Investor appetite and confidence remain for off-

plan and under-construction projects especially for those launched by reputable developers. Outside of tier one developer-led schemes, there has been strong performance in recent launches outside of prime locations and emerging areas. g The low mortgage rates of today are unprecedented and, notwithstanding possible interest rate rises in the US later this year as the dollar continues to strengthen, will still be affordable in the ensuing five years. We should remember that affordable finance and demand for real estate assets are inseparable. g The market is approaching maturity. The ongoing development of the industry’s regulatory framework and the implementation of laws to safeguard both consumer and investor interests, and the overall industry and economy at large from rampant and irresponsible speculative, predatory or unethical practices, reveal a mature and balanced approach to shaping an industry which will exhibit sustainable growth over the long term. g If it’s superior yield with minimal capital outlay that you are after, Dubai real estate is still hard to beat unlike older established cities like Hong Kong and Singapore which currently suffer from high costs of housing, especially the former where only 50 percent of residents own their homes. Affordable properties have all benefitted

from Dubai’s recovering economy. Investors in these areas can reasonably expect rental returns of at least 7 per cent per annum on top of annual capital appreciation. Given the relatively low cost of entry, even with the overall economic slowdown predicted to continue well into the coming year, buyers in growth areas such as Dubailand will see greater financial rewards for their astuteness and patience in due course. g There is definitely a shortage of affordable housing in Dubai. The number of developments that will be supplying housing affordable to the middle and lower income segments is definitely on the increase, more so in the run up to the 2020 World Expo. Historically, the established developments that were most associated with filling the affordable housing gap were International City, Discovery Gardens and, to a lesser extent, MotorCity. But there have been more recent additions that have provided realistic alternatives to these older developments, and several more to come. Still, as both buyers and sellers are sticking to their negotiating positions with more determination and a greater propensity to walk away from the negotiating table if not satisfied, the real estate cycle will continue on its course. Prices may continue to soften, but what is more important is that the market does not go down on a steep fall, and keeps to its current sustainable path. g

23 Richard_Layout 1 27/08/2015 15:27 Page 1

Banking on valuation

he UAE market and Dubai in particular, has historically lacked transparency in common with all other regional property markets. The past five years however, have seen substantial improvements in market transparency and the adoption of what can widely be considered best practice. As a professional valuer I believe there are areas with room for further improvement. With that in mind I recently undertook a survey among retail bank credit risk professionals, who commission the majority of real estate valuations. The majority of valuation work is undertaken for loan security purposes in the form of mortgage valuations for retail banks. In these cases, the valuer’s professional duty of care is firmly with the bank, regardless of whoever pays the valuation fee. It is therefore necessary that the banks ensure the valuation report is completed by a suitably qualified valuer who is following appropriate standard methods of valuation. The challenge is: How do banks differentiate between a professional and well qualified valuer and one who is not? The requirement for Valuer Registration became compulsory for Royal Institute of Chartered Surveyors (RICS) members in the UAE in March 2014, although one or two valuation firms adopted this extra requirement voluntarily as early as 2011. Surprisingly however, less than 30 per cent of Retail

Bank Credit Risk professionals surveyed were aware what VR meant, and how this would help mitigate significant risk during the valuation process. As most Valuers’ Professional Indemnity Insurance policies carry a clause to the effect that only suitably qualified and experienced personnel are covered; breach of this clause would undoubtedly leave the bank exposed in the event of a foreclosure and a subsequent loss, if the valuation was found to be undertaken by inappropriate staff. The second aspect of improvement and risk mitigation is the new International Property Measurement Standards (IPMS). How IPMS will affect the UAE market is currently a matter for discussion. I have acted as Expert Witness for individuals who have taken over their new UAE properties to find that the size of the property falls short of their expectations of developer’s contractual obligations. A common theme throughout has been a failure to read the small print in the Sales Purchase Agreement, where the developer has been free to define their own interpretation of Net Area, Gross Area, ‘Carpet Area’, Internal Area without reference to a clear recognised standard. Sometimes the difference between expectation and delivery can be as much as 20 per cent. As an example some authorities have taken the view that the delivered area re-

OPINION

ferred to on the title plan would include the thickness of external walls, half the thickness of party walls, any risers, structural supports and internal walls. Generally this methodology is useful for construction professionals and building control, but it is not helpful to the end user who wants to know how much space they have to live in. IPMS will, for the first time, provide a standard means of identifying areas in a way that is appropriate to the context. As the Dubai Government was the first Governmental body in the world to support and commit to the new IPMS, it will be interesting to see how the adoption of the new definitions will be applied in practical terms. From a sales perspective, it would be inappropriate for apartments to be advertised on a AED per square foot basis unless the relevant IMPS standard is quoted which informs all parties the consistent floor space or size of the property. For the first time, all parties will be ‘talking the same language’ and be able to compare ‘apples with apples’. This could be challenging for some sales agents! From a valuation perspective it would seem appropriate to measure the internal space and report only the usable space, instead of merely relying upon areas and CAD plans supplied from partisan sources, such as developers. This is another reason for ensuring that only experienced val-

RICHARD SWEETMAN

Managing Partner British Arabian Asset Valuers

uers attend property inspections, carrying a laser-measuring tool; a case of back to basics for some. Our same survey of Retail Bank Credit Risk professionals also asked about knowledge of the new International Property Measurement Standards, and only 23 per cent of Credit Risk professionals were aware. It is particularly important that Credit Risk departments in banks are mindful of the latest improvements to best practice and it is clear that many are not. To ensure a consistent and comprehensive valuation for all parties, and to mitigate risk in the market place; I strongly suggest that Credit Risk departments familiarise themselves with the valuation and measurement standards above and seek to only use professionals who are regulated against such standards by organisations such as RICS. g Gulf Property

24-37 KEF Construction_Layout 1 29/08/2015 13:39 Page 1

COVERSTORY

Gulf Property

24-37 KEF Construction_Layout 1 29/08/2015 13:39 Page 2

A game-changer in construction COVERSTORY

Gulf Property Exclusive

EF Holdings, a major diversified conglomerate based in the UAE with roots in India, has invested Dh650 million in two off-site pre-cast concrete and building factories at Krishnagiri in Tamil Nadu, India, and at Jebel Ali Free Zone in Dubai, UAE – that is set to be a game-changer in the region’s growing construction and real estate sector. The factory literally designs buildings, deconstructs the designs into components and manufactures them – pillars, beams, floors, roofs, walls, windows, doors, pan-

els, etc. – part-by-part in a state-of-the-art manufacturing unit using robotic technology with least human intervention. Then these are transported to the construction site for installation and fixing as per design, using the latest technology to complete the project. The technology allows the factory to design and custombuilt, assemble and construct buildings with a few people on ground. This helps the factory to complete project construction with less cost and less time and change the way people construct buildings. “We have invested $150 million (Dh550 million) in the pre-cast factory at Krishnagiri in India and a further Dh100 million in Jebel Ali – that will help us to fast-track the construction of any building with 25 per cent less cost and 50 per cent less time,” Faizal Kottikoll o n ,

Faizal E. Kottikollon, Chairman of KEF Holdings

Chairman of the KEF Holdings, told Gulf Property in an exclusive interview. “We have already booked orders worth Rs45 billion (Dh2.5 billion) in India that will keep our industry busy for a year and a further Dh2 billion worth of business interests from clients in the UAE. This is the beginning of an interesting journey in our corporate history that will see our company contributing in the construction industry in a very positive way.” The first phase of the company’s Jebel Ali factory is being built on a 125,000 square metres plot of land, which will be ready by December this year, while the factory complex at Krishnagiri, which has already been commissioned, will be formally inaugurated within the next few weeks. Housing in India varies significantly and can reflect the socio-economic mix of its vast population. In the last decade, there has been tremendous growth in the country’s housing sector, along with demographic changes, rise in income, growth in the number of nuclear families, and urbanisation. Indian gove r n m e n t seeks to develop 110 m i l l i o n

“KEF’s vision for a developed India is very much aligned with Prime Minister Modi’s ideals of technology in infrastructure driving powerful change. This is the reason we bring the most advanced technological developments from across the globe, and leverage it to reinforce the foundation of our public infrastructure, housing, educational and healthcare system. We believe this will change the construction landscape in India...”

– Faizal Kottikollon Chairman KEF Holdings

Gulf Property

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COVERSTORY

The KEF Industrial Park at Krishnagiri, Tamil Nadu

homes as part of its vision to provide housing for all by 2022 – when the country celebrates 75 years of independence. India needs $2 trillion or about $250 to 260 billion annual investment in housing sector until 2022, according to a research by global accounting firm KPMG. “The focus should be on affordable urban houses, which is 70 per cent of the total urban housing requirement. About 1.7 to 2.0 lakh hectare of land is expected to be required to fulfil urban housing need by 2022,” KPMG said in its report.

Gulf Property

“About 85 to 90 per cent of the total investments 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 50 million affordable housing which require attention on priority basis, as it alone would require about half of the total investments and 70 per cent of urban housing needs envisaged. “These investments need to be complemented with additional investments of about $1.5 trillion in urban infra-

structure and commercial real estate. Thus, a total investment of over $3.5 trillion may be required for urban housing and supporting infrastructure,” the KPMG report says. Indian Prime Minister Narendra Modi has secured $75 billion commitment for India’s infrastructure development from the UAE during his recent visit last month. During his meeting with Non-Resident Indian (NRI) entrepreneurs in the UAE, Narendra Modi said that infrastructure and real estate development are key ingredients to India’s progress. He

also remarked that entrepreneurs like Faizal Kottikollon possessed the technology and strategy to help make this vision a reality, and to deliver speedy results without compromising on quality and strength. Modi expressed his desire to visit the manufacturing unit to explore the benefits of this innovative technology which he believes would help India build 50 million affordable homes by 2022. “We have to develop 50 million affordable homes by 2022. Imagine the scope of works. It can happen with technological innovations,

24-37 KEF Construction_Layout 1 29/08/2015 13:39 Page 4

“We have to develop 50 million affordable homes by 2022. Imagine the scope of works. It can happen with technological innovations, something that Faizal [Kottikollon] is bringing to India. Faizal told me that his factory can fast-track construction of low-cost homes. I would definitely visit your factory...”

– Narendra Modi, Prime Minister of India

something that Faizal is bringing to India,” Narendra Modi told investors at an investors’ meeting at Masdar City in Abu Dhabi. “Faizal told me that his factory can fast-track construction of low-cost homes. I would definitely visit your factory [KEF Holdings],” he told Faizal at the meeting. Commenting on his meeting with the Indian Prime Minister, Faizal Kottikollon, said: “KEF’s vision for a developed India is very much aligned with Prime Minister Modi’s ideals of technology in infrastructure driving powerful change.

“This is the reason we bring the most advanced technological developments from across the globe, and leverage it to reinforce the foundation of our public infrastructure, housing, educational and healthcare system. “For me personally, it has been a privilege to share the KEF vision with my country’s dynamic leader, and a rare honor to receive his support. The Prime Minister’s vision for a new India is ambitious, but definitely achievable through collaboration and shared expertise. “We believe this will

At A Glance $2 trillion

investment needed in India to provide housing for all

110 million homes will be built in India by 2022

Dh650 m

invested by the KEF Holdings in 2 industries

377 million

India’s urban population

590 million

India’s urban population to reach by 2030

810 million

India’s urban population to reach by 2050

15.76 million

people on an average move to cities every year in India

$260 billion

investment needed in India’s housing sector every year

change the construction landscape in India. By implementing technology and manufacturing into the infrastructure sector we will see incremental benefits in skill, speed and scale.” Though, housing deficit is much wider in rural areas compared to urban, it requires only a small portion of total investments, which can be meted out without much difficulty. “In our view, the central government with participation from state governments, drafting a plan of delivering three crore houses in rural areas with an investment of

COVERSTORY INR3.45 lakh crore ($58 billion) by 2022 is a good start,” KPMG says. The KEF Holdings has integrated a number of technologies under one roof that helps it to conceptualise, design, construct and develop any types of concrete civil structures, buildings and facilities with 25-35 per cent less cost and within less than half the construction time, that is going to change the way people build homes, buildings, offices, shopping malls, educational institutions and theatres. “We are using smart building information modelling (BIM) systems that cover every aspects of civil engineering and construction activities, namely concrete, woodworks, aluminium, mechanical, electrical and plumbing (MEP), joinery, interiors, HVAC, etc. We have the in-house capability covering all aspects of the development of a construction project – starting from concept design to delivering the building – all under one roof through a one-stop service. “So, what we do is, design and manufacture all the components of a building and its interiors off site and transport everything to assemble and erect the building on-site. We do everything under one roof. It’s like manufacturing a building at the factory and installing it on-site. “All these are done by the efficient use of computeraided design (CAD), computer-aided manufacturing (CAM) technology with minimum human intervention. Almost all the works are done by robotic technology that requires the least human intervention. “This way, the client doesn’t have to deal with so many contractors, sub-contractors and suppliers. We do Gulf Property

24-37 KEF Construction_Layout 1 29/08/2015 13:39 Page 5

COVERSTORY

Indian Prime Minister Narendra Modi praises efforts by Faizal Kottikollon, Chairman of KEF Holdings, and expressed his keen interest to visit the factory in Krishnagiri

everything in-house and deliver as per desire and design and with 25 per cent less cost and with at least 50 per cent less time.” Pre-cast concrete technology has been in existence for a few decades. However, Kottikollon, a visionary Indian social entrepreneur, has taken it to the next level, by incorporating the CAD, CAM and robotic technology and integrating everything under a new BIM system to reduce costs, time, wastage and money. “This is one of a kind in the world solution to a highly labour intensive and unorganised industry that thrives on greater labour exploitation and human misery. The new robotic technology and precast concrete factory will drastically reduce the need of labour, make it more organised and reduce waste, and make it a more green and environmentally sustainable industry,” he says. “We have a strong research and development facility that is working constantly to improve efficiency and take this to the next level. We are currently developing prototypes of studio, one-bedroom, two-bedroom, three-bedroom apartments in different settings. Customers can choose their choice of apartments, place order, make payment online and we could deliver the apartment of a small villa within a few month. “So, a small-time wageearner can book his dream home from our catalogue and get it delivered in the shortest possible time, without going through the has-

Gulf Property

sles and pains of constructing the home himself or by a contractor.” Kottikollon says, once running, the Jebel Ali factory is expected to generate Dh540 million annual turnover. “However, we also have massive expansion plan of the factory in Jebel Ali where we want to expand the capacity as per future market growth,” he says. As per the company’s plans, the Jebel Ali factory will assemble components of the building, once pre-cast materials such as concrete walls, floors, doors and interiors are shipped from the factory in India. Then the assembled rooms, bathrooms will be transported like boxes onsite for final fixing as per the pre-engineered design

and the building will be erected in a few months. “This way, we could fix a number of rooms of a hotel or an apartment complex in a day and erect the entire building in a matter of a few months. Later, once we have enough orders, we will expand the Jebel Ali factory with backward integration and create a complete building manufacturing plant where everything will be designed, manufactured, assembled and delivered – all under one roof through a one-stop shop,” Kottikollon explained. Faizal’s new construction technology eliminates separate tendering process for sub-contracting and mechanical, electrical and plumbing as well as deliver-

ing interiors. In this process, the client deals with just one company to deliver the complete project from concept to completion. “From an engineering point of view, we have deconstructed the engineering and building construction system to piece-by-piece components and then developed a system to efficiently construct the building – using available technology worldwide. The technology was available in various parts in different forms,” Faizal says. “We have brought all these separate technologies for concrete, wood works, joinery, MEP and interiors and integrated them under a larger building information modelling system that reduces the use of labour,

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COVERSTORY

Faizal Kottikollon, Chairman of KEF Holdings and Shabana Faizal, Vice-Chairman of KEF Holdings â&#x20AC;&#x201C; partners in progress Gulf Property

24-37 KEF Construction_Layout 1 29/08/2015 13:39 Page 7

COVERSTORY Premium Medical Healthcare Providers (PMHP) – the new 500-bed modern hospital being built by KEF Holdings using the new technology

time, cost and wastage. “In this process, we have eliminated inefficiency in the construction process. Under the existing traditional construction process, you have large wastage, greater use of manpower and all these add up to costs. By deconstructing the process, we were able to identify the loopholes in the construction system and reduced all of that by the efficient use of technology. “The entire construction process is done through robotic technology, CAD and CAM that eliminate the use of labour. All the components of the buildings are manufac-

Gulf Property

tured off site at the factory without human touch – all by machines, robots and computers. This is a gamechanger for the construction industry.”

Affordable Housing

Faizal Kottikollon’s revolutionary move comes just in time as the governments, property developers, building authorities and urban planners are shifting focussing on affordable homes – in which cost of the construction and price of the property plays a

key role in attracting middleincome end-users. Dubai has witnessed a string of affordable home projects that have gone off the ground while Dubai Municipality is making it mandatory for developers to reserve 20 per cent of the projects for affordable homes. Abu Dhabi’s Urban Planning Council (UPC) is also making provisions to reserve 20 per cent of all future development projects for affordable segments. Private real estate developers such as Nshama, Danube, MAG Group, have already rolled out a number of affordable homes projects

that are gaining wider customer and investor interest.

Urbanisation in Indian States

Urban expansion in India will happen at a speed quite unlike anything the country or the world has seen before. It took nearly 40 years for India’s urban population to rise by nearly 230 million; it will take only half that time to add the next 250 million, according to a report by McKinsey and Company. An Indian citizen moves to the country’s urban areas in

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every 2 seconds or 30 per minute for a better life. This translates to a migration rate of 1,800 per hour, or 43,200 per day from rural areas to urban. On an average 15.76 million people migrate from rural to urban areas every year – putting a huge pressure on infrastructure, housing and civic services. The population of India stood at 1.2 billion in 2011, growing by 180 million over a decade since 2001, according to the government census. “The urban population grew more than the rural, for the first time in Indian history

in 2011. 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,” it said. India’s current urban population of 377 million is much bigger than the combined population of United States and Canada. The country currently hosts the world’s second biggest urban population which will cross 590 million in 2030 and is ex-

pected to more than double the current population to 810 million by 2050. “This implies that India has to create two and a half Americas in four decades,” Amitabh Kant, Secretary, Department of Industrial Policy and Promotion (DIPP), Government of India, spoke at the launch of the concrete batching plant at Krishnagiri, Tamil Nadu. He said, urbanisation will be the defining feature of India’s growth. “India needs to create several new-generation, green field cities that are planned, financed, developed, oper-

ated and managed more efficiently. “In the next few decades, India will build much more than India has built in the last 5,000 years. In the next 5 years, you will see at least 30, the demand for 30-40 such factories across India and in about 10 years’ time you will see the same company having 100’s of factories. At least minimum 100 factories [will be needed] across India.” The rapid migration of people from the rural areas to cities is going to multiply problems in the coming years as the government has to first fix the infrastructure bottlenecks in the existing facilities while making sure they can take the additional pressure. “To mitigate the strains that will develop as cities expand, and to maximise the potential economic opportunity that well-managed cities can offer, India urgently needs a fresh, proactive approach to addressing the challenges of urbanisation. A $1.1 trillion capital investment in India’s cities is necessary to meet projected demand for urban services,” McKinsey and Company said in its report. Identifying options for accommodating urban expansion is gaining importance in India’s policy discourse as its cities are projected to be home to another 250 million people by 2030, said a World Bank report, titled, Urbanisation Beyond Boundaries. “The challenge — as well as the potential opportunity — is that population densities in and around the largest metropolitan areas are extremely high. They are on average 2,450 persons per square kilometre in the 50 kilometres vicinity of the seven largest metropolitan areas (with populations Gulf Property

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COVERSTORY above 4 million in 2001), and a third of India’s new towns were ‘born’ in a 50 kilometres neighbourhood of existing cities with more than 1 million people,” it said. However, none in India possess an Aladdin’s magic lamp that could create 110 million homes in less than seven years. It is the new proprietary integrated technology solution developed by Faizal Kottikollon’s KEF Holdings that maximises the economies of scale when it comes to ‘manufacturing’ buildings – that could be seen as a panacea to the growing needs of urbanisation in India. Although the factory in Krishnagiri can manufacture a building fast enough, it has a capacity constraint that will never be enough to meet India’s needs. As Amitabh Kant predicts, India will need at least a hundred such construction factories to meet the growing demand for residential, commercial and leisure buildings. “This is just the beginning. Once things move, we might have to multiply the number of factories with greater output to meet the growing needs of urbanisation in India and the demand for housing in the Middle East,” Faizal says. “From here, the sky is the limit and from here there is no looking back.” In an exclusive interview with Gulf Property, Faizal Kottikollon, Chairman of the KEF Holdings, elaborated his thoughts. Excerpts: Gulf Property: What is the potential for growth for pre-cast civil structures in the UAE and the GCC – where the climate is very harsh? How suitable are these construction technologies for the region?

Gulf Property

At a Glance

g KEF has invested over Rs6.5 billion to set up the world’s largest integrated manufacturing facility for offsite construction at Krishnagiri, Tamil Nadu. g KEF’s integrated offsite construction technology brings speed, skill and scale for projects in every sector: education, healthcare, housing and urban infrastructure.

g KEF has the capability to support Govt. of India projects such as Smart Cities with its technology that can fast-track massive low-cost housing and urban development schemes. g The industrial park will open in November 2015 with 10 different units under manufacturing components for buildings and infrastructure. These include hollow Faizal Kottikollon: The potential for the growth of the pre-cast buildings is huge, even in extreme climatic conditions. We do not have proper studies, however, if the potential value of 24,460 live construction projects in the Middle East is worth $3.15 trillion (Dh11.55 trillion), then majority of these projects could be executed with precast robotic technology using BIM, CAD and CAM processes that we have integrated. These construction technologies are very suitable for this region. These buildings come with a guaranteed building life of at least 100 years. They are shock-proof and can withstand a certain degree of seismic and earth-

core slabs, pre-stressed beams, automated wall panel production, steel mesh plant, wooden joinery, aluminium glazing, stone processing, pre-fabricated bathrooms and modular MEP, and assembly.

g Three more integrated industrial parks are planned by KEF across India in the very near future and we are focused on skill development by investing in R&D and training both academically at the operational level within our manufacturing and engineering facilities. g KEF Holdings has an ongoing investment in India of Rs11 billion across infrastructure, healthcare and education sectors and has a firm commitment for a total investment of Rs40 billion in the next five years. g quake jolts.

What is the potential value of the market for pre-fabricated off-site construction system? As I said, there is not much study on the pre-cast construction market, as it is new in this part of the world. There is absolutely no civil structures that this technology can’t deliver. So, if the value of construction projects in the Middle East stands at Dh11.55 trillion, I would say that’s the potential market value. However, since most clients are used to the traditional construction methods, they might opt for the same. If we create greater awareness of the benefits and strengths of our technology-

driven construction process, many clients will opt for the new construction technology delivered by us. It’s just a matter of time when people sees the opportunities created by us. How did you come up with this concept – to deliver a factory integrating various pre-engineering technology that might change the construction industry? We consider ourselves as social entrepreneurs. We want to develop business that will address and solve social problems. We want to be able to change things around to make the world a better place to live and work. We want to be a catalyst for change.

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The KEF Industrial Park at Krishnagiri, Tamil Nadu

I come from an engineering background. When I look at the construction industry, I see lots of workers toiling under extreme summer heat, sweating out their lives for a few dollars more. This industry thrives on exploiting labour force. It is labour intensive, thus becomes costly. It is unorganised and the whole process thrives on manual labours and processes. So, when I was looking closely at the construction industry, I could see a lot of loopholes. I could see a great opportunity in the technological transformation of the construction sector. First of all, I felt that if the extent of manpower, manual labour, wastage, costs and delivery time could be drastically re-

duced if the products and processes are automated. And this could only be done by deploying the available technologies. We already knew of the pre-cast technology and have seen its benefits. However, we have also seen the pre-engineered doors, windows and interiors. I realised that the entire building could be ‘manufactured’ offsite at a factory, by integrating technology and the building could be assembled on site with a much lower cost. So, we started working on the idea and we soon found out that these technologies are available in bits and pieces in different parts of the world. As we looked at various aspects and worked on the in-

dustry, we found that all these could be done through computer software, CAD, CAM, BIM and robotic technologies with minimum human intervention. This is how it evolved. It reduces the engagement of labourers – thus offers a huge cost savings on workers’ wages.

Has this been approved by the building permit authorities, such as Dubai Municipality and other bodies? You do not need a separate permission for such technology. Civic bodies issue building permits for projects after verifying the environmental impact, design, structural and other aspects. However, construction is a process to build a structure. How efficiently we build it, is

something that everyone would appreciate. Civic bodies, such as Dubai Municipality looks at certain parameters of the structure – not the process of construction – as long as it is done properly with regards to load, wind pressure, environment and other aspects. Pre-cast construction technology is not new. It has been there in practice for a good few decades. However, the way we integrated all the aspects of it – from concept, designing to complete delivery – is totally new. It’s a whole new process and whole new experience. It’s the way we are going to manufacture a building offsite, transport components, assemble and erect it – is going to be unique. For all stakeholders including urban planners at the civic authorities, building owners, designers, consultants and inhabitants of the city – the new technology brings a whole range of benefits to which, I’m sure none will object. Firstly, this ensures minimum labour requirement, it saves cost, it reduces construction delivery time by 50 per cent, it generates almost zero waste, it’s green construction and the technology makes it a perfect process. With such a high level of efficiency and benefit, I do not think anyone would object to this technologically advanced and game-changing construction process. I believe, a building could be erected in weeks or months, depending on the size and shape. However, could you give some indications on the time savings on comparable structures in buildings of Gulf Property

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The KEF Industrial Park at Krishnagiri,â&#x20AC;&#x2C6;Tamil Nadu. Concrete slabs are being manufactured at the off-site concrete batching plant - which will form the structure of the PMHP hospital currently under construction in India

different sizes and usages, such as residential, commercial, retail, entertainment complexes, such as cinema halls? On an average pre-cast and pre-engineered construction guarantees between 25 to 35 per cent cost savings and about 50 per cent delivery time saving. So, we could deliver a building in half the time compared to the delivery time needed in traditional construction method. However, the biggest saving is in the man hours. Whatever the size of the building and the magnitude of the scope of

Gulf Property

work might be, it will require the minimum number of people on site even at its peak. Due to the less usage of manpower and almost zero manual intervention, construction process saves a lot of money on the workersâ&#x20AC;&#x2122; wages. In terms of wastage, traditional construction process generates around 15-20 per cent waste, be it rebars, cement, concrete and other building materials. However, wastage in the pre-cast technology is almost zero to 1 per cent, due to the efficient use of technology that ensures greater control over the

process and inventory management. Depending on the usage and the complexities of the structures, these factors vary. For example, a building with a 1.5 million square feet built-up area will need 1,800 workers on site at its peak and might need two and a half years to build. We could deliver the same with 150 workers and technician on ground at its peak construction activity and within 12 months. With considerable cost savings, pre-cast off-site construction system ap-

pears to be ideally suited for mass affordable or budget housing. Now that the developers in Dubai have shifted their focus on affordable homes, how do you see this being accepted by developers? Pre-cast concrete and preengineered building technologies are ideal solutions for affordable homes and large-scale mass housing schemes, due to the fast, accurate, highly efficient and cost-effective process. Itâ&#x20AC;&#x2122;s like building structures in factories. This technology maximises the efficiency, thus delivers projects fast

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KEF Holdings

and at less cost. With greater awareness, all the developers should and in due course would use the pre-cast construction technology that will offer greater cost savings and other benefits to contractors and developers. However, since we are yet to commission our factory in Jebel Ali, we assume it is going to take some time before this process becomes huge. Have you started talking to developers of residential complexes, commercial towers? In the UAE, we have just

started our marketing activities for delivering hospitals. Although our approach was quite casual, this has generated business interest to the tune of Dh2 billion in two months. We expect to sign our first deal in a few week’s time.

Indian Government has announced plans to provide housing for all by 2022. Your technology and products offer a great solution for India. Are you talking to the Indian government to develop large-scale affordable homes, colonies, budget home settlements?

Yes. We have already been approached by the Indian central government, governments of Karnataka and Tamil Nadu to work on largescale housing schemes for the middle income group. However, these are early stage of talks and nothing has materialised yet as we are still in the early stage of development. What we have achieved is that, we are almost in the process of rebuilding 100 public schools in Kerala, in collaboration with the government of Kerala. Last year, we rebuilt a school in 95 days with the pre-cast tech-

stablished in 2007, KEF Holdings is a new era social enterprise. Founded by Faizal E. Kottikollon, the company operates across India, the Middle East and Singapore. It has six business verticals – KEF Infra, KEF Health, KEF Education, KEF Agri, KEF Metals and KEF Investments – that focus on the infrastructure, healthcare, education, agriculture, metals and investment respectively. KEF’s industrial forte lies in its ability to create integrated business processes and deliver cutting-edge off-site construction technology and solutions, including precast, prefabricated bathrooms, joinery and aluminium glazing. The company applies this expertise to the creation and upgrades for essential infrastructure, such as educational, healthcare, commercial and residential facilities. KEF Holdings is guided by the philanthropic vision of its Founder and Chairman Faizal E. Kottikollon and his wife Shabana Faizal, Vice Chairperson. The company, in close collaboration with stakeholders actively drives, funds and supports high-impact social activities undertaken by the Faizal and Shabana Foundation. KEF Holdings does this through providing innovative technologies, products and processes designed to create shared value by increasing productivity, quality and sustainability. g Gulf Property

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nology during summer vacation period. This was completely funded by the KEF Holdings as part of the KEF Foundationâ&#x20AC;&#x2122;s philanthropic and corporate social responsibility (CSR) initiative. The success of the project helped us to motivate all other stakeholders to consider rebuilding 100 public schools that lack proper facilities, with poor conditions that does not help the teaching staffs as well as students motivated enough to give their best. So far, the government of Kerala has granted Rs600 million while we have committed Rs100 million in the 100 school redevelopment project. We need to raise another Rs700 million to be able to deliver these. We will soon start fund-raising activities to deliver them. How environmentallyfriendly are these? Pre-cast technology is more environmentally friendly construction as it eliminates waste and is more durable than buildings constructed with conventional method.

Are these technologies suitable for high-rise buildings as well? Yes, absolutely. We could build high-rise towers with more strength and durability. Although we pre-cast and pre-manufacture the component and assemble them to erect the buildings, the technology enables us to connect each component with others very efficiently. This is as good as the structures build with conventional method, in fact in some cases, these are even better.

Gulf Property

How do these pre-cast concrete buildings respond to earthquake situations? Can they withstand mild tremors? How would you rate them on earthquake shocks when compared to structures built in traditional construction process? These buildings can withstand mild earthquakes. In most cases, they respond better than the structures constructed though conventional method. You have tied up with an Australian technology provider to build hospitals

and healthcare facilities. Why is that? Can't you build them on your own? Yes, we could. However, if could offer a better product by tying up with a foreign technology provider, then why not? At the end of the day, our objective is to deliver the best and in a very cost-effective method that is fast and super-efficient. Thatâ&#x20AC;&#x2122;s why we have tied up with Australiaâ&#x20AC;&#x2122;s Total Alliance Health Partners International (TAHPI). Our entire factory at Krishnagiri deploys some of the best technologies sourced

from different parts of the world. We just integrated them under one roof to provide a one-stop shop for the entire process.

For other types of buildings and civil structures, such as residential, commercial, retail, entertainment complexes and educational institutions, would you need such international collaboration? I do not think so, unless we find better solutions. If it makes better economic sense, then why not? What is your game plan to

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cast concrete and other products.

How much investment has been made in the factory so far? How much investment would be needed to bring it up to full capacity? We have invested Dh550 million in Krishnagiri factory and Dh100 million in Jebel Ali factory. Cost of future expansion will depend on the magnitude of the expansion.

How many people are currently working at the factory? How many more would you hire to run it in full capacity? Only 25 people at the moment. The growth in activities will determine if we will need more people in future.

The concrete slabs are being readied at the offsite concrete batching plant – for shipment to the construction site

market the new technology to developers and consultants? We just keep on creating awareness and showcase our products and services. The rest will happen automatically. Because if one sees the benefits, one will opt for our construction solution.

Since you have launched this a few months ago in the UAE, how has the response been in the market so far? As I have mentioned earlier, we have generated business interest to the tune of Dh2

billion in six months – much of which will be converted into contracts in the next few weeks. This is a completely new development in construction technology and it will take some time for the industry stakeholders to see the full benefits of the technology.

Do you want to expand the company's reach beyond India and the UAE? When and where? Yes, of course. The world is our playground. However, only time will tell where we expand and when.

How big is the factory in Jebel Ali? What would be the production capacity of concrete/slabs in terms of square metre? The first phase of the factory in Jebel Ali is being built on a 125,000 square metres plot of land. However, this will be expanded as and when the demand picks up for us to justify the expansion. The factory will be initially assemble rooms, bathrooms, toilets, etc like big boxes with pre-cast concrete panels, doors, windows coming from the factory in India. Later, we plan to backward integrate the factory to produce pre-

What’s in store for the future? We have invested in setting up a strong research and development facility that will constant look up and develop new technology to further simplify the process. We are soon going to launch a number of model apartments and villas with different configurations like an online product catalogue with pricing, so that people can look at various options and price structure. Once they like the home that they want built, they could place an order online, sign the contract and make payment. The home will be manufactured off-site and assembled onsite for delivery. This way, an end-user could have his home built in a few months without him knocking hundreds of doors for construction, sourcing materials and go through the pains of building a home. g Gulf Property

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Dubai land deals hit Dh129bn in H1 2015

Gulf Property Report

he total value of the land deals hit Dh129 billion ($35.14 billion) through 23,000 transactions during the first half of 2015, according to the Dubai Land Department. Sale transactions represented Dh53 billion, while the mortgages accounted for more than Dh65 billion, with other deals valued at Dh10 billion, it said. Sales and mortgages transactions on land recorded more than Dh106 billion, with 8,240 transactions. The commercial lands acquired the lion share in terms of value for the type of land with 47 per cent in total, while other lands include agricultural land devoted to the development of industrial

Gulf Property

projects, exhibitions, hotels and residences, and other uses. Buildings and units transactions exceeded 15,355 transactions with a total value of Dh20 billion during H1 of 2015. “The Dubai real estate market continues to face downward pressure during the second quarter of the year. The residential rental index has remained relatively flat while sale prices have dropped an average of 8 per cent since June 2014,” Craig Plumb, Head of Research at global real estate advisory Jones Lang LaSalle MENA, said. “This comes as records from the Dubai Land Department show a 69 per cent decline in the number of residential transactions in the first half of the year compared to the same period in 2014. This single digit price correction is in sharp con-

trast to declines we witnessed in 2008/2009 and is a clear indication that the market is maturing. We expect transaction volumes, and subsequently sale prices, to drop further in the second half of the year. ” Al Yafra 2 area of Dubai was the most attractive for transactions, in terms of land value sales, with the value of its transactions reaching Dh2 billion, as for mortgages of lands, Al Barsha South 1 came in first through 348 transaction worth of Dh360 million. Business Bay area came in first with the value of its transactions reaching Dh2.5 billion. As for mortgages of units, Dubai Marina came in first with transactions value reaching Dh1 billion. As for buildings, Al Thunaya 4 topped all areas in terms of building sales, with the value of its transac-

tions reaching Dh377 million through 158 sale transaction, as well as for mortgages of buildings with a total amount of Dh246 million. Sultan Butti Bin Mejren, Director-General of Dubai Land Department, said: “The real estate sector in Dubai is heading towards sustainable growth. This can be ascertained from the continual increases from one quarter to the next, which have been a feature of the market over the last two years. In light of the report’s findings, investors and developers can have realistic expectations and can formulate effective strategies to meet the needs of the sector. The reliable data in the report is in sharp contrast to fallacious information about the market that certain parties are trying to broadcast in order to achieve personal gain.” g

UAE investors top in H1 2015 A

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s many as 2,130 UAE investors pumped in Dh11.49 billion ($3.13 billion) in Dubai’s real estate during the first half of the year, a report by Dubai Land Department issued last month. However, Indian investors injected Dh7.8 billion ($2.16 billion) in 3,017 transactions while British investors ranked third with Dh4.7 billion during the same period. As many as 19,848 investors from 142 countries injected Dh53 billion ($14.5 billion) in Dubai’s real estate during the first half of the year, Land Department said. Gulf investors were involved in the lion’s share of the deals, worth Dh17 billion ($4.7 billion), whereas nonArab expatriates injected the lion’s share of Dh30 billion ($8.9 billion), it said. Among the GCC investors, Saudi nationals bought properties worth Dh3.17 billion, in 999 deals. “The figures are enough to show us that Dubai’s real estate sector is now enjoying sustainable growth. Based on the strong performance of the market, we fully anticipate that the momentum will be continued throughout the next five years as we lead up to Expo 2020, the biggest marketing event in the world,” said Sultan Butti Bin Mejren, Director General of DLD. “The diversity in investors’ nationalities revealed by the report shows that the Dubai market is international and that investor confidence is in-

Indian investors outranked all other expatriate groups in the overall property transactions, second to only the UAE national investors.

creasingly being cemented.” DLD’s report showed that 2,756 investors from 16 Arab nations concluded deals worth more than Dh6 billion in the first half of 2015. Jordanians made transactions to the value of Dh1.4 billion, while Lebanese nationals were second on the list of Arab investors having conducted Dh1.2 billion worth of transactions. Investors from Egypt came in at third place followed by those from Iraq, Yemen, Sudan, Algeria, Palestine and Morocco. “DLD’s list included the amount of real estate transactions conducted by foreign nationals in H1, with 13,166 investors from India, Pakistan, Britain, Canada, Russia, China, USA, France and Afghanistan involved in deals worth a total of Dh30 billion,” the report said. Nationals from India were ranked first for foreign investment, having made a total of 3,017 transactions worth

Dh7.8 billion. British investors were in second place having conducted deals worth Dh4.7 billion, followed by Pakistani investors with transactions worth Dh3.3 billion. Canadian investors came in at fourth place with transactions worth Dh1.8 billion. The list also included citizens from Iran, Russia, United States, China, France and Afghanistan, it showed. “The various financial rating agencies from around the world are very optimistic about the economic indicators of the United Arab Emirates in general and Dubai in particular, where all sectors show excellent growth rates year-on-year. This confirms the success of the emirate’s diversification policy. The policy has meant that the drop in oil prices in global markets has not had a major negative impact on the nation’s economic performance,” Bin Mejren says. “The Dubai real estate market is evidence of this success, with its ability to attract buyers from around the world. They have confidence in the future stability of the market and faith in the assurances provided in terms of a rewarding return on investment,” concluded Bin Mejren. The Land Department report shows that the value of mortgage of Dh65 billion has overshadowed the total value of the sales value of Dh53 billion, perhaps for the first time in the emirate’s land transaction history – that indicates a clear shift in property transactions trend. g

FOCUS

At A Glance

Dh11.4 billion value of investment in Dubai’s real estate by UAE nationals in H1 2015

Dh7.8 billion

invested in Dubai’s property sector by Indians in H1 2015

Dh4.7 billion invested in Dubai’s real estate sector by British citizens in H1 2015

Dh53 billion

invested in Dubai’s property sector by investors from 142 countries in H1 2015

Dh17 billion

invested in Dubai’s property sector by Gulf investors in the first half of 2015

Dh30 billion

invested in Dubai’s property sector by non-Arab expatriates in H1 2015

Dh3.17 billion

invested in Dubai’s property sector by Saudi Arabian investors in H1 2015

Dh3.3 billion

invested in Dubai’s property sector by Pakistani investors in the first half of 2015

Dh1.8 billion

invested in Dubai’s property sector by Canadian investors in the first half of 2015

Dh6 billion

invested in Dubai’s property sector by Arabs in H1 2015 Gulf Property

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Meydan One expands Dubai’s cityscape MEGAPROJECT

The latest project by Meydan City Corporation, Meydan One – a 3.67 million mixed-use master-planned development, will add new feathers to Dubai’s growing crown. It will not only expand the city’s increasing urban landscape, but also add a few new world records in urban development. More importantly, the project will attract increased number of tourists to a city that never sleeps. Gulf Property Report

Gulf Property

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His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, is being briefed on the overall project, flanked by Saeed Al Tayer, Chairman of Meydan City Corporation

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MEGAPROJECT

eydan City Corporation, a major developer of freehold mixeduse master developments surrounding Dubai’s flagship horse race circuit under the same name, last month unveiled Meydan One, a 3.67 million square metre mixed-use development which, would feature some of record-breaking facilities including the longest indoor

Gulf Property

ski slope, the largest dancing fountain as well as the highest residential tower in the world. The first phase of the development, located between Meydan and Al Khail Road, is scheduled for completion before 2020, when Dubai’s population is forecasted to hit 3.4 million. It is to include the tower, the mall, the civic plaza, the dancing water feature, a four-kilometre canal, and the marina to be created

in the middle of a desert landscape along the Al Khail Road that will be connected with multiple rail and road networks and complement the flagship Meydan Racecourse. His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on August 3, launched the massive new scheme that will feature a 711-meter tower, a

new mall, the world’s largest indoor ski slope, a 25,000square-meter indoor sports facility, one of the largest fountains in the world, a beach, and a civic plaza capable of hosting up to 60,000 people. “In a city which never stops innovating, today’s announcement is significant for the future of Dubai and the UAE,” Saeed Al Tayer, Chairman of Meydan City Corporation, said in a state-

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An artist’s impression of Meydan One project, part of the Meydan City, next to the Meydan Racecourse and the Grandstand

ment. “Our efforts in creating world-class indoor and outdoor sporting facilities reinforce the role we are playing in the community to create sustainable, sought after services that will contribute to the health of our nation. These are exciting times at the Meydan City Corporation and the hard work starts now to ensure Meydan One is Dubai’s No. 1 leisure, hospitality and residential district.” The development has al-

ready been approved by Sheikh Mohammed bin Rashid. The project is to have a total built area of five million square meters and be home to 78,300 residents. It is to contain a five-star hotel with 350 rooms, a conference center, the world’s tallest 360-degree observation deck at 655 meters, the world’s highest sky restaurant at 675 meters, 885 apartments, and a marina yacht club.

“This development is a forward thinking, interactive enterprise geared towards the Dubai of tomorrow. The encouragement and support we have received in the past from our trusted partners will now help the Meydan One development come to life. The first phase will be completed as Dubai prepares to host the World Expo 2020,” Al Tayer says. The Meydan One Mall will be a never before seen con-

MEGAPROJECT

cept, featuring a 150m x 80m retractable roof which will be opened in the cooler, winter months to create an alfresco shopping and dining atmosphere. With more than 300 restaurants, cafes and kiosks offering fine dining and fast food options, the mall will also attract flagship retailers, luxury stand-alone outlets and nightlife. Set to become Dubai’s No. 1 leisure destination with a gross floor area of 5 million Gulf Property

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MEGAPROJECT

square metres, it will feature the world’s longest indoor ski slope at 1.2 kilometres, a 25,000 square metres indoor multi-purpose sport facility, over 5.3 kilometres bicycle and jogging trails, a 9 kilometres boardwalk, the largest dancing fountain in the world reaching over 420 metres long, a 300 metres long beach, a civic plaza to host up to 60,000 people and a one of a kind heritage village. Al Tayer said: “We have committed to developing a multi-use destination which

Gulf Property

goes beyond expectations and will cater to every kind of person living and working here, as well as those who travel from around the world to visit.” Meydan Arena is located at the base of the ski slope structure and with a seating capacity of 8,000 will play host to sporting events, live concerts and theatrical shows. Outdoor sports options will include football pitches, mountain biking, walking and running trails, a skateboard park and a BMX

park. The 420 metres long jet fountain displays will be the world largest and will include light laser shows choreographed with digital screens. Any kind of event will be possible, from civic gatherings, concerts, UAE National Day celebrations, film, art and food festivals, sport and fashion shows. The 300 metres long beach, sitting adjacent to the aqua marine Crystal Lagoons, will offer visitors swimming, paddle boats, sea

kayaking, beach volleyball and night time light displays, as well as direct access to a new Water Park, beach bar and restaurants. The world’s tallest residential tower, The Dubai One and its integrated podium incorporate 350,000 square metres of gross floor area, 885 residential apartments, a 5-star hotel with 350 hotel keys, a conference centre, a 360-degree observation deck at 655 metres high (world record), a sky restaurant at 675m high (world

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MEGAPROJECT

An artist’s impression of the new retail facility at Meydan One project

record), a plaza view restaurant and terrace as well as the Meydan One Marina Yacht Club. Meydan’s vision began with the completion of the Grandstand in 2010 and was underlined by the Group’s role in the development of Mohammed Bin Rashid Al Maktoum City, specifically District One, a collection of premium villas within the heart of new Dubai. The construction of Meydan One will complete the company’s commitment to

helping create the future of Dubai through the development of attractive, family oriented residential and lifestyle projects. The project has been unveiled at a time when the real estate market has witnessed a slowdown. However, analysts feel that the launch came at a very opportune time as the lower prices of land and property could attract investors to Meydan One due to its location – close proximity to Burj Khalifa and the new Central Busi-

ness District around Al Khail Road and Sheikh Zayed Road – it’s strong connectivity with major highways and future rail connections. Besides, property prices are expected to pick up around 2017-19 when Meydan One development would be at its peak in terms of marketing and construction – that is expected to drive its price and value up. That will give the Meydan team a good two years for preparation and doing the ground works. g

Gulf Property

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INTERVIEW Wouter Molman, Director of Cityscape Group, speaks exclusively to Gulf Property

Cityscape grows amid tight reality R

Gulf Property Exclusive

esidential transactions registered with the Dubai Land Department show a 66 per cent decline in aggregate value and a 69 per cent decline in the number of transactions in the first half of the year compared to the same period in 2014, according to reports. “The first half of 2015 saw a total of 7,400 deals transacted (compared to 23,800 in H1 2014), with a total

Gulf Property

value of Dh12.7 billion,” said a latest report by Jones Lang LaSalle (JLL), the global real estate advisory. “These figures come as no surprise given Dubai’s residential market was booming over the first half of 2014, and units in the primary and secondary market were overpriced, so any Y-o-Y figures would be reflective of that. These levels of decline in transaction activity have resulted in a single digit decline in sale prices, contrary to the major declines seen in 2008/2009, reflecting signs that Dubai’s market is matur-

ing.” With 16,000 new housing supplies during the second half of the year, the total stock of housing units in Dubai is expected to reach 395,000 units, up from 379,000 units at the end of the second quarter of 2015, according to JLL report. The residential market in Dubai continues to face downward pressure as rents and sale prices registered Qo-Q declines and annual declines vs. Q2 2014, it says. While the general REIDIN rental index remained flat Yo-Y in June 2015, the sales

index dropped 8 per cent for the same period, with declines in apartment sale prices exceeding that of villa prices. The market is expected to continue to see a downward trend in prices over the second half of the year and into 2016. “In terms of supply, an additional 1,200 units were handed over in Q2 2015, increasing the total supply to 379,000 units. A further 16,000 units are due for completion over the remainder of the year, however with the market expected to face further declines, we may see

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INTERVIEW Cityscape Global – the largest meeting point of the Middle East’s real estate fraternity

this year. Fortunately and on the back of the highly successful edition of Cityscape Global in 2014, we haven’t noticed any reduced impact in the participation in Cityscape Global this year. In fact, the event has once again grown substantially this year. Many developers have launched large scale projects in recent years, and Cityscape continuous to offer them vital platforms across the region for real estate companies to promote their projects and services.

projects delayed into 2016 and beyond,” it said. The continued confidence in Dubai’s maturing real estate market has been underlined by a 30 per cent increase in exhibitors at the Middle East’s largest property showcase, Cityscape Global. While the 14th edition of the event prepares to host more than 300 exhibitors in a significantly expanded exhibition arena, global property experts, JLL’s report predicts an additional 13,000 units are expected to enter the market by the end of 2016 and 10,000 units in 2017, reinforcing the sentiment that the UAE’s real estate sector is continuing to grow at a sustainable rate as the demand for housing rises.

According to JLL, a combination of governmental regulatory changes implemented in the last year across the region has ensured market conditions in the residential sector remain stable. Cityscape Global, which takes place from 8-10 September at the Dubai World Trade Centre, has been extended by two additional exhibition halls – four more halls since the 2013 event – covering more than 40,000 square metres of exhibition space. In an exclusive interview with Gulf Property, Wouter Molman, Director of Cityscape Group, elaborates his thoughts of the current market situation. Excerpts:

Gulf Property: The real es-

tate market in Dubai has slowed down, according to industry reports and experts. What is your view on the market, based on the response you have received from participants at the Cityscape Global. Wouter Molman: There has indeed been a much welcomed slow down to Dubai’s real estate market in the first half of this year. Dubai government’s measures against market overheating, a strengthening dollar, Russian crisis and sanctions, lower oil prices and the continues uncertainty in the Eurozone are some factors that have contributed to the recent slowdown, with estimated property sales prices drop between 5 and 10 per cent

With lower oil price, governments are reducing their spending on development, unless it’s very important. In this scenario, what is the outlook for the sector going forward. Whilst there have been talks about governments reducing their spending, there is little evidence that this has actually happened in the UAE in recent months. UAE’s non-oil sector grew by 8.1 per cent in 2014, representing close to 70 per cent of the economy with plans in place to push this over 80 per cent by 2021. The impact of oil prices is therefore not the dominant factor affecting the real estate market, as it is naturally adjusting following 2 years of sharp increases in property prices. When do you think the market will pick up? I will leave predictions on real estate market fluctuations to the H1 market reports that will be coming out this time of the year. Market fluctuations are a fact of life however that Gulf Property

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INTERVIEW

Cityscape Global

he Cityscape Global exhibition opens its doors on Tuesday 8 September to Thursday 10 September from 10am to 7pm daily at the Dubai World Trade Centre. However, Cityscape Conference would take place from Monday, September 7, 2015 at the Conrad Dubai Hotel

all real estate developers factor into their business plans. The good news is Dubai’s real estate market is much less volatile than it was in the previous up and downturn. With Dubai’s non-oil GDP expected to grow at 3.5 per cent this year, the continuous rise in the emirate's population, its status as a top tourist resort, its world-class leisure and hospitality facilities, and its importance as the leading regional business hub, it is only a matter of time for the marker to once again enter a growth trajectory.

How is this year's Cityscape Global shaping up — in terms of participation?

Gulf Property

Following the major success of our 2014 edition, Cityscape Global 2015 is in very good shape. We are expecting to welcome over 300 exhibitors this year, covering more than 40,000 square meter of exhibition space. This represents a growth of 30 per cent, mainly down to returning exhibitors requiring larger exhibition stands to showcase their latest new developments and progress. All of the market’s leading developers including Emaar, Dubai Properties, Nakheel, Damac, Meydan, Deyaar, Union Properties and many others have returned, while several new names from Dubai and overseas will also be showcasing their latest projects.

How is this year’s Cityscape different from the previous episodes? We have made some significant improvements to the event this year. The exhibition, first of all, has been completely reconfigured, now taking place in all Saeed Halls, Arena and Halls 1-4. Not only did this allow for the aforementioned substantial growth of the event, it also facilitates a more convenient layout as two sections of exhibition halls will be located in parallel, connected by a central concourse with several convenient amenities, such as F&B outlets, meetings rooms, VIP Lounges, etc. All exhibitors are now within a few minutes’ walk from each

other, which will be a benefit to both exhibitors and visitors as they navigate through the exhibition halls. Our conferences have also seen a major restructuring. Affordable housing, the growing demand for quality facility management and the need to improve broker knowledge of Dubai regulations are the three themes scheduled for discussions at this new one-day conference, taking place on September 7 at the Conrad Hotel, Dubai, ahead of the leading exhibition which runs from 8-10 September at the Dubai World Trade Centre. As these conferences will be free to attend but by invitation only, we are expecting a significant increase in dele-

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UAE Real Estate heads south: IMF

he International Monetary Fund (IMF) said, new housing supplies is expected to increase downward pressure on the UAE’s real estate sector which is heading down south. “The real estate market in the UAE has cooled down after expanding strongly in 2013 and the first half of 2014. By end-2014, sales price increases moderated in Dubai and Abu Dhabi, and in March 2015, growth in residential sales prices turned slightly negative in both Emirates, in year-onyear terms,” the IMF said in its latest country report on the UAE. “These developments are taking place amid increased supply, particularly in Dubai, and reduced demand associated with lower oil prices and appreciating US dollar, and following the introduction of mortgage regulations

gate numbers this year.

Could you shed some lights on the foreign investment in the UAE's real estate sector — both for Dubai and Abu Dhabi and for institutional and individual investors? Where is the money coming from? We are awaiting Q2 figures for 2015 to be released by Dubai Land Department. For Q1, figures are available however and are showing a largely similar pattern to previous years, with Indian, UK, Pakistani, Iranian and Russian investors topping the list of non-Arab investors, and most Arab investments coming from Saudi Arabia, Jordan, Qatar, Lebanon and Kuwait, followed by Egypt,

based on loan-to-value ratios and an increase in the property transfer fee in late 2013. With the additional new supply in the market, Dubai’s sales’ prices are expected to further decline over the course of the year, while constrained supply through 2017 will support prices in Abu Dhabi.” The pace of rent increases, based on new contracts only, slowed in Q1 2015. The rent component in the CPI basket, based on both existing and new contracts, has been a major driver of inflation since September 2014. “Price-to-rent ratios have declined since mid-2014 in both metropolitan areas, indicating a healthy correction in the UAE’s likely overpriced housing market. Correspondingly, gross rental yields have risen since mid2014 (see charts below), registering a 6 percent yearon-year increase in March 2015,” the report said. Other segments of the real estate market have also slowed down. The hotel market was buoyant in Bahrain and Oman. Emiratis continue to be the largest investors in the market however, representing a total of Dh5.8 billion, or nearly 10 per cent of total real estate investments in Q1 2015.

What is the general return on investing in the UAE's real estate. Although it varies from location to location and properties’ size, could you give us some indications on ROI in properties in Dubai and Abu Dhabi? Recent reports estimate the rental returns on residential properties to be around 5-7 per cent, with return in some areas of Dubai actually still growing despite the recent

Dubai in 2014, supported by a large number of tourists, but the fall in oil prices and the appreciation of the US dollar are expected to weigh on the performance of this market in 2015. Vacancy rates remain high in the office market (23 and 25 percent in Dubai and Abu Dhabi, respectively), while new additions to supply this year are expected to put downward pressure on office rents in Dubai. Retail market rents rose rapidly in Dubai until mid-2014, but growth slowed down in late2014. Forthcoming supply is expected to slow price growth further in 2015. Craig Plumb, Head of Research at Jones Lang LaSalle MENA, says, “Faced with new supply and a limited increase in net absorption, the commercial sector is stable and should remain so in the short to medium term given the 1.2 million square metres of Gross Leasable Area expected to enter the market over the next couple of years.” market slowdown. This puts Dubai in a highly competitive position in the global market place, still offering an attractive long-term proposition to investors.

What do you think the government do to jump-start the real estate sector? Reducing regulatory bindings, reduction in fee — would these help? I don’t believe introducing regulations to jump-start the market are required in this stage. Dubai government takes a long-term approach to regulating the market, increasing transparency and protecting investors. Market forces ultimately determine how the market fluctuates, and the

INTERVIEW current correction in the market is a welcome and healthy sign that Dubai is a maturing market place. All underlying economic fundamentals of the Dubai and the UAE remain positive, which gives the real estate market a solid foundation to return to growth in the near future. Do you anticipate major announcements at the Cityscape Global this year? What will be the major highlight/focus of this year's Cityscape? Cityscape Global always plays hosts to some major announcements, some of which we are aware of, some of which we only find out about ourselves shortly before the event. As always though, developers prefer to keep this kind of information close to their chest, to be released at or shortly before the exhibition. There will certainly be a lot to look forward to again this edition.

Since all major government-owned developers have recovered from 200809 crisis, how do see their project announcements drive the growth in the real estate sector? Dubai’s government owned developers play a vital role in growing Dubai’s role as the region’s leading business and tourism hub. Developments like Downtown Dubai by Emaar, Meraas’ theme parks and Blue Waters projects, Dubai World Central, Palm Jumeirah’s array of luxury holiday resorts are just some examples of developments that are will continue to play a major part in achieving Dubai’s (tourism) growth targets leading up to 2020. Gulf Property

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INTERVIEW

Said Haidar, Regional Director for the Middle East, Yardi Systems

Gulf Property Exclusive

ardi, a Californiabased asset and property management solutions provider, has made a strong foray in the UAE markets with its flagship products that is making a difference in the way its clients manage assets and facilities. The facilities management market is expected to be in the range of Dh20 billion in the UAE, while the global market is estimated to reach $394.69 billion by 2017, according to Global Industry Analysts. Software solutions make the complex asset and facilities management much simple and easy to manage while reduces costs. Yardi Solutions, a major player in the global asset management, has managed to simplify asset management operations and helped operators to cut costs, thus reduced the cost burden of service charges on the residents and occupiers of the assets. The Santa Barbara, California-based company now claims 20,000 clients representing some 7 million residential units and 8 billion square feet of commercial space, and continues to add integrated features—including e-procurement, check scanning, utility billing, and electronic funds transfer, among others—to its original core accounting and lease management systems In an exclusive interview with Gulf Property, Said Haidar, Regional Director for the Middle East at Yardi, elaborates. Excerpts:

Gulf Property

New Yardi-stick in asset management

Gulf Property: How do you position Yardi in the real estate management? Said Haidar: Yardi is a privately held company established in 1984 in Santa Barbara, California, and has been dedicated all over the 30+ years to the design, development, and support of real estate investment management and property management software.

Please tell us about Yardi flagship product, the Voyager® 7S platform. How does it help? Voyager is an end-to-end property and financial management platform for office, retail, and residential real estate, automating processes with role-based dashboards, workflows, critical date notifi-

cations, and analytics. Enabling faster and more efficient execution of property operation strategies, Voyager helps drive improved analysis and decision-making and delivers maximum transparency across your business. The Voyager suite solutions also include sales CRM, commercial leasing pad, advanced budgeting & forecasting, facilities management, procure to pay, and portals.

Could you talk about Yardi Commercial LeasingPad, and how does it work? Yardi Commercial LeasingPad is an easy-to-use, tabletbased solution that leverages the Yardi Voyager platform and Microsoft Out-

look to provide property managers and leasing agents with mobile access to real-time prospect, tenant, and property information. Yardi Commercial LeasingPad eliminates duplicate data entry by automating the leasing process from lead generation through proposal creation and lease execution, and delivers a 360° view into all leasing and property management activities. Yardi Commercial LeasingPad would help our clients shorten the leasing lifecycle and drive greater efficiency with a fully mobile solution that combines contact and prospect management with portfolio health analytics and business intelligence. What type of clients does

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Yardi Solutions

ardi Solutions was born out of a need that has made the entire asset management to the next

level. In 1982, Anant Yardi recognised the need for an integrated accounting and property management software for the residential marketplace. As the director of systems development for Burroughs Corporation (now Unisys) and with 14 years of programming experience, he knew he had the background to design such a product. In 1984, “Basic Property Management” was created for the Apple II computer and was sold to first customer, Sabaco Realtors. Since that time, Anant has directed the company through over 30 years of steady growth, remaining Yardi have in the area, and what type of real estate do they manage or hold? Our clients range from family offices, private equity, asset and property service companies, government linked companies and some of the largest owners and developers of shopping centres in the Middle East. Clients use Voyager to manage real estate assets across the Middle East and North Africa including in: United Arab Emirates, Qatar, Egypt, Oman, Lebanon, Jordan, Kuwait, and Saudi Arabia.

Are there any technology needs unique to the region that Yardi is providing solutions for? Each country often poses unique challenges, and the countries in the Middle East are no different. This includes language

Anant Yardi

the President and sole owner as Yardi became a leader in real estate asset and property management solutions. The Santa Barbara, California-based company now claims 20,000 clients representing some 7 million residential units and 8 billion square feet of commercial space. Today, Anant continues to serve as President of Yardi Systems, and his vision is the driving force behind the (Arabic and English), the use of Post Dated Cheques (PDCs), communication to investors, owners, tenants and consumers, financial reporting, and others. As part of our investment of people and infrastructure in the Middle East, we have also evolved the functionality of Yardi Voyager to be able to cater to the needs of clients in the Middle East.

TDIC is a master developer of tourism resources in Abu Dhabi, is among the entities chosen Yardi in the Middle East. What were their reasons for selecting your software? I think our clients can also provide the best feedback as to why they have chosen to partner with Yardi. Matar Al Qamzi, Chief Information Officer at TDIC, said – TDIC’s IT vision is to automate the business oper-

development of effective and innovative software solutions for global real estate portfolio management. He has been recognised as one of the early pioneers in the commercial real estate automation industry, a “visionary in respect to automation systems and the resultant benefits in property operations,” according to Realcomm, when they honoured him with the 2004 “Digie” award. He was inducted into the Multi-Housing News “Hall of Fame” that same year, and his company continues to receive industry accolades. Anant has an M.A. in Engineering from the University of California at Berkeley, and worked for 14 years developing programming methodologies and directing systems development at Burroughs Corporation prior to establishing Yardi Systems. g ations by implementing latest tools and technology. As part of that strategic initiative, we partnered with Yardi for our Asset Management business systems. We find this a common theme with our prospects and clients that are looking to partner with company that is a real estate domain expert, rather than a broad based ERP software. Yardi’s 30 years of focus in real estate software really helps set us apart. Tell us about some of the clients who have chosen Yardi as their technology partner for property and asset management in the region? Our clients in the region include Emaar Malls Group, Majid Al Futtaim Properties, Meraas Holding, Jumeirah Group, Dubai Design District, Abu Dhabi National Property

INTERVIEW

Company, Dalma Mall, SDIC, Lulu Group International, Dubai Select Group, Etihad Towers, Cluttons, Jones Lang LaSalle, CBRE, Better Homes, H&H Investment and Development, Zidan Management Group, Place Vendome Qatar, Mall of Qatar, Hyatt Plaza Shopping Centre, Capstone Property Management Services, Waseef, Tanween, MASIC, and many others. What features of Yardi’s software are especially attractive to the Middle East clients in comparison to that of our competitors? Yardi has spent a lot of time working with real estate companies operating in the Middle East to understand the unique regional requirements. Yardi in turn has taken these requirements and built them into Voyager as core functionality. The Yardi Voyager platform provides our clients with a localised leasing process and controls, tenancy contracts and renewal notices per the local law, enhanced Post-DatedCheques Controls, credit control mechanisms (Inclusive of un-cleared PDC’s) and many others. Market response to the Yardi Cloud and offering Voyager through a Software as a Service (SaaS) model has been very position. This enables our clients to focus on their core business rather than worrying about managing applications and IT infrastructure. The Yardi Cloud in turn reduces their overhead and capital costs. g Gulf Property

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HOMEFINANCE

Buying a home now makes more economic sense than renting to fixed income families due to the fact that the monthly mortgage installments are lower than rent in most cases. Falling property prices and low mortgage rates makes the environment ideal for buying property as opposed to rent Gulf Property Exclusive

ith property prices declining in the UAE, home buying has become less of a burden on fixed-income families compared to rents, especially with a low mortgage environment. In most cases, the monthly mortgage installment appears to be less than the monthly rents of a one-bedroom to three-bedroom apartments. Besides, with the development of affordable homes, home-buying is expected be preferred by families and well-paid professionals as opposed to rents.

Gulf Property

Buying is a better option than renting Although investment in property is perhaps the biggest in oneâ&#x20AC;&#x2122;s life, the current depressed property market provides the best opportunity for fixed-income families to purchase and move into their own freehold apartments by just converting their rental payments into equated monthly installments (EMI). In most cases, the EMI is expected to be lower than the rent, which means additional savings by families, while owning their own home. A couple with Dh12,000 or a family with Dh15,000 monthly income can now buy

a one-bedroom apartment and save themselves from rent-related inflation, going forward. Mortgage, or home finance, makes it easy for fixed-income families to buy properties and live there without having the means to complete fund the purchase by themselves. Although mortgage and Islamic home finance has been in the country for decades, most consumers are perhaps not aware of how easy or difficult to avail mortgage and walk into oneâ&#x20AC;&#x2122;s dream home. In the UAE, majority of the

50 odd lenders offer home finance under different packages as per UAE Central Bank regulations to UAE nationals and expatriates. With a 25 per cent downpayment, any salaried professional with a minimum monthly household income of Dh15,000-Dh20,000 can now avail home finance with interest rates of 2.99 levied on the finance amount for upto 25 years. Some banks even offer mortgages to customers with a minimum salary of Dh10,000 per month. So, for a home valued at Dh1 million, the buyer will

52-57 Mortgage_Layout 1 27/08/2015 18:02 Page 2

HOMEFINANCE nancial health check-up is crucial for the home buyer before planning to buy.

Know Before You Buy

For our readership, Gulf Property tries to answer some of the key questions to help them make informed choice. Following is a set of questions and answers to help new home buyers.

Gulf Property: What is a Mortgage? A mortgage is a long-term loan usually used for purchasing a domestic or commercial property. The Lender, normally a bank, will then take monthly payments (installments) to recover the loan amount from the borrower. A mortgage is paid in installments that include both interest and a payment on the principle amount that has been borrowed.

have to invest at least Dh250,000 as part of the 25 per cent downpayment. So, on the balance property value of Dh750,000, banks would finance at, say 3 per cent per year for 25 years which would add up to Dh562,500. With interest and the principal amount, the total payable amount for the home buyer would reach Dh1312,500, which would be divided into 12X25=300 equal monthly installments. This translates to an EMI of Dh4,375. And if the home is ready to move in, then the home buyer is saved from paying for his rent, which

could be lower than his monthly rent for a one- or two-bedroom apartment.

Rent Vs Buy

With a good mortgage package, home ownership could reduce the burden of high rents in Dubai â&#x20AC;&#x201C; on a monthly basis, if one calculates the rents vs EMI. This makes EMI cheaper than the rents. However, the home buyers will have to think of the annual service charge as an additional burden on their shoulders. With the current market situation, an ordinary salaried

professional with a household income of Dh15,000, can think of buying a twobedroom apartment. In Dubai, there are plenty of two-bedroom apartments available that are priced below Dh1 million. This could make EMI lower than the Dh4,000 mark. However, the biggest challenge for the home buyer would be to arrange the 25 per cent down payment. The second cost factor one needs to think about is the service and maintenance charge per annum. But first things first: A complete self assessment, or a fi-

What are the main types of mortgages? The most common mortgages are fixed- and adjustable-rate mortgages. Fixed-rate mortgages offer the stability of regular monthly payments over a given length of time, or term. Many people feel these are ideal because they make it easy to budget family finances and there is no rate risk. Variable or adjustable-rate mortgage (ARM) programmes offer the home buyer the flexibility of an initial interest rate and payment lower than a standard fixedrate mortgage. ARM mortgages may also be a great option for home buyers who do not plan to stay in their current home for a long period of time. Gulf Property

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HOMEFINANCE

Who can apply? Persons who are employed, self-employed and people who are interested from abroad (non-residents) with the ability to repay the installments. What would be one’s first action in planning to buy? First, the possible home buyer needs to assess his financial abilities and monthly budget for installments and then conduct a survey, visit properties and find out the prices. Then, s/he needs to speak to mortgage advisors on the overall pricing, interest rates, hidden charges, processing fees, property registration fees and the monthly installments. Then the buyer needs to evaluate his/her ability to pay the 25 per cent downpayment and the EMIs. If yes, then s/he should start seriously looking into buying a suitable home for purchase with the target price that the buyer has set for himself.

Gulf Property

How much is the borrowing limit? The buyer’s borrowing limit depends on his current income and existing liabilities. This may vary from bank to bank. However there is an extensive array of plans and products and mortgage advisors can help the buyer select the best plan for his needs.

How high could the homebuyer’s loan be, in comparison to the value loan available? This may vary depending on the buyer’s nationality. In the UAE, nationals can get up to 80 per cent whereas expatriates can get up to 75 per cent for their first purchases for properties less than Dh5,000,000. Some banks offer upto Dh15 million.

What is the loan-to-valueratio? The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an

asset purchased. The term represent the ratio of the first mortgage lien as a percentage of the total appraised value of real property. For example, if the borrowing amount is Dh750,000 to purchase a Dh1,000,000 property. The LTV ratio yields a value of about 75 per cent. What are the mortage rates in the UAE? Mortgage rates vary depending on a number of factors. This could be linked to the credit rating and risk assessment of the buyer and other issues. However, typical rates are between 2.99 per cent to 9.5 per cent.

How is one’s home loans application evaluated? A home loan application will be evaluated on the following criteria: Home buyer’s income stream; employment history and job stability; applicant’s ability to handle current obligations as well as new ones; the value of the

property being purchased or refinanced; value of assets to assess the applicant’s ability to meet down payment.

How much is the home finance going to cost? Again, this varies from bank to bank and from property to property and other factors. For Example: Bank arrangement fee varies from 0.0 to 1 per cent of the loan amount . Then there is a valuation fee that ranges from Dh2,500 – 3,500 per valuation. Dubai Land Department property transfer fee – 4 per cent of the property sale price is factored in the selling price (borne by the buyer in most cases). Dubai Land Department mortgage registration fee which is 0.25 per cent of the mortgage amount and its document fees of Dh375.00 also needs to be considered. Can non-residents avail financing in the UAE This is exclusive to certain

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Comparative Mortage Rate Card Mortgage Type/Product

Bank/Financer

Home Finance 1 Year Fixed Rate Mortgages HSBC Home Finance 2 Year Fixed Rate Mortgages Essence 1 Year Fixed Rate Balance Transfer 2 year Fixed 3 Year Fixed Home Finance Balance Transfer 1 Year Fixed Balance Transfer Home Mortgage 3 Year Fixed Rate Mortgages Mortgage Home Loans ADCB Mortgage Easy Buy Financing Home Refinance Switch Over Home Financing Home Finance for Expatriates Manzili Variable Home Finance Home Loans for Expatriates Home Suite Bundle Account Saadiq Home Finance 1 Year Fixed Rate Home Finance Essence Variable Rate 1 Year Fixed Rate Home Loan 1 Year Fixed Rate Home Loan Al Islami Home Finance Amal Home Finance Essence 3 Year Fixed Rate 2 Year Fixed Rate Home Loan 2 Year Fixed Rate Home Loan 2 Year Fixed Rate Home Finance 3 Year Fixed Rate Home Loan Refinance / Equity Release 3 Year Fixed Rate Home Finance 5 Year Fixed Rate Home Loan Essence 5 Year Fixed Rate Manzili Fixed Rate Home Finance Mortgage Finance Compass Non-Resident Mortgage

Abu Dhabi Islamic Bank First Gulf Bank HSBC First Gulf Bank Abu Dhabi Finance United Arab Bank United Arab Bank United Arab Bank Standard Chartered Union National Bank First Gulf Bank RAK Bank ADCB Al Hilal Bank Al Hilal Bank Al Hilal Bank Al Wifaq Emirates Islamic Mashreq Bank Standard Chartered Standard Chartered United Arab Bank Abu Dhabi Finance Emirates NBD Commercial Bank Int’l Dubai Islamic Bank RAK Bank Abu Dhabi Finance Commercial Bank Int’l Emirates NBD United Arab Bank Emirates NBD RAK Bank United Arab Bank Emirates NBD Abu Dhabi Finance Emirates Islamic ADNIF Abu Dhabi Finance

developments, with an increased rate. But generally, most commercial banks offer mortgage to foreign nationals.

How long is the processing time for a mortgage approval? This depends on the buyers’ occupation. Salaried candidates will usually have to endure 3 to 4 weeks until approval, whereas self-employed candidates may have

to endure a longer period.

How does one obtain a life insurance for the value of the mortgage? Banks will always insist on a life insurance for the value of the mortgage, which tends to be expensive.

How does a buyer protects his asset? Protection of asset is very crucial and this can be done by having a Will or register-

HOMEFINANCE Tenure Down Min. Reducing Payment Salary Rate

25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25

25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25%

15,000 15,000 15,000 15,000 10,000 20,000 20,000 20,000 10,000 15,000 15,000 15,000 15,000 20,000 20,000 20,000 15,000 20,000 15,000 10,000 10,000 20,000 10,000 20,000 15,000 15,000 15,000 10,000 15,000 10,000 20,000 10,000 15,000 20,000 10,000 10,000 20,000 20,000 20,000

3.75% Variable 2.99% 3.24% Variable 3.25% 3.29% 3.29% 3.29% 3.29% 3.49% 3.49% 3.75% 3.75% 3.99% 3.99% Variable 3.99% Variable 3.99% Variable 3.99% 2-yr fixed 3.99% Variable 3.99% 1-yr fixed 3.99% 1-yr fixed 3.99% 1-yr fixed 3.99% 4.17% Variable 4.24% 4.25% 4.25% Variable 4.25% Variable 4.29% 4.45% 4.49% 4.49% 4.74% 4.99% Variable 4.99% 5.24% 5.29% 5.99% 5-yr fixed 6.16% 1-yr fixed 5.42% Variable

ing the asset under an offshore company.

What is meant by ‘Agreement in Principle’ when enquiring for a mortgage? This term indicates that the applicant has been accepted for a mortgage or loan provided that the personal financial circumstances and information supplied are confirmed. Further satisfactory criteria and elements are required

Flat Rate

2.17% 1.68% 1.84% 1.85% 1.87% 1.87% 1.87% 1.87% 2.00% 2.00% 2.17% 2.17% 2.33% 2.33% 2.33% 2.33% 2.33% 2.33% 2.33% 2.33% 2.33% 2.33% 2.45% 2.49% 2.50% 2.50% 2.50% 2.53% 2.64% 2.66% 2.66% 2.83% 3.01% 3.01% 3.18% 3.22% 3.72% 3.85% 3.92%

for a successful application, such as employment status and credit scoring.

Why should a buyer choose Dubai to buy property? Property in Dubai is still a sure-fire way to make money; the market is growing steadily and some offplan developments have been known to sell out within 48 hours of release, with profits of 100 per cent prior to Gulf Property

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HOMEFINANCE

completion. Besides, Dubai’s real estate market is the most regulated one in the Middle East. It’s more matured and structured well. With some of the world’s most awe-inspiring constructions underway, this emirate is in a league of its own and in the space of only one decade, this once modest desert sheikdom has risen to become a world economic player. With demand still outstripping supply for quality villas and apartments to accommodate a boom in foreign workers and visitors to

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Dubai, the real estate market is set to remain buoyant and highly profitable for the foreseeable future. Many experts even suggest that the Dubai property market has only just started to take off, indicating that prices can only go up with current demand levels. What’s the difference between Islamic Shari’a compliant home finance and mortgages? Although both Islamic home finance and mortgages fulfill the same role (providing money to a borrower) Islamic finance do not charge interest – they are based on the

Islamic principals of profitsharing and partnership. Islamic home finance products are similar to hire/purchase agreements in that the title of the asset stays with the lender of the money, until the final loan payment is made – and the title is then transferred unencumbered to the buyer. For a mortgage, the title is always with the buyer, but a “registered interest” of the bank stays on that title until the last payment is made – and the registered interest is then removed.

Why is the registration of

the title so important? Registration of a person’s interest on the title of a property provides conclusive evidence of his ownership. Article 22 of the new Law provides that the Land Department shall issue a title deed of real property rights in accordance with the current records in the Real Property Registers. Article 24 goes further to say that the title deed referred to under Article 22 shall have absolute power of evidence to establish real property rights. What is the process for title registration?

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Documentation

ocumentation is very important to process mortgage application. Although these are essential documents which a home buyer would have anyway, it is important to keep them ready for approval and loan processing. Documents needed for salaried employees Application form Passport copy with valid visa Salary certificate Bank statements Liability letter from the bank addressed to

the lender Photocopy of purchase contract Proof of down payment

For Self-employed Individuals Application form Passport copy with valid visa Bank statements – personal and company Liability letter from the bank Memorandum and articles of association of the company Financial statements of last 2 years Trade license copy Copy of Chamber of Commerce Registration Business profile on company letterhead Photocopy of purchase contract Proof of down payments (receipts). g

HOMEFINANCE

quests.

What is a refinance package and do banks offer refinancing products? Refinance allows a home buyer to liquidate the cash value of property, available to all residents, expatriates and UAE nationals. Does local banks cover resale transactions? Yes, most of them does. Banks also offer the following products Full Payment: Where the first purchaser has made 100 per cent payments to the developer and is selling the property to a new client. Here the payments would be made to the first purchaser.

Both buyer and seller have to submit papers to Dubai Land Department through a broker and pay for the registration fee. Once a property is completed and handed over to the purchaser, the home buyer can then advise the developer to register the title of the property in the name of the purchaser in the Real Property Register at the Land Department. The Sale and Purchase Agreement (SPA) as well as the accompanying scheme documentation will possibly need to be translated into Arabic (which should be un-

dertaken by the developer). The purchaser will then be asked to sign the Land Department standard transfer form, for the internal use of the Land Department. This form will provide the details of the parties, the property, the purchase price etc.

How is the property registration fee structured? Both the seller and the purchaser will be asked to pay the Land Department’s fees at the time of title registration. These currently amount to 4 per cent of the purchase price, which is divided into 3

per cent payable by the purchaser and 1 per cent payable by the seller. However, it should be noted that developers commonly require the purchaser to pay the full 4 per cent.

How would the Land Department know the “market value” of the property for the purpose of ascertaining what amount the 4% fee is to be levied on? Dubai Land Department employs its own expert valuers who verify a property value and provide a valuation for a prospective purchaser, if the prospective purchaser so re-

Part Payment: Where the first purchaser has only paid the down payment and the balance is yet to be made to the developer. Here, the down payment would need to be paid by the new buyer to the seller and the balance be made to the developer.

Can I swap my existing property with another one? What are the conditions? All property swaps are subject to the bank’s approval. A swap can be initiated due to delay in construction (confirmed by the developer) in which case the swapped unit must be from the same developer; an NOC to swap (from the developer) must be presented to the bank. If a swap is desired on property where construction is not delayed (as confirmed by the developer), then the swap process is chargeable at a fee. g Gulf Property

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HOMEFINANCE

Gulf Property Exclusive

he UAE’s mortgage/ home finance market is stabilising as buyers are cautiously taking a ‘wait and watch’ approach, according to a top industry official. “Although retail market has started to pick up slowly, buyers are taking a ‘wait and watch’ approach which could go on till 6-8 months,” Pawan Dhawan, Head of Home Finance at Noor Bank, says. “Of the Dh162 billion, the residential home finance market would be somewhere between Dh85 – Dh90 billion.” According to Dubai Land Department, mortgage transactions rose to Dh65 billion during the first half of 2015 in Dubai, while the sales transactions reached Dh53 billion in the same period. Mortgage outranked sales transactions for the first time – reflecting a new trend in the emirate’s real estate market and the level of its maturity. “Dubai’s residential transactions through banks and financial institutions average between Dh1.5 billion to Dh1.7 billion per month, or roughly Dh20 billion a year,” Dhawan says. “During the last 12 months, transaction level at the secondary markets has declined slightly. Since January this year, we have seen a 4-5 per cent correction in Dubai’s real estate market and I anticipate a further 4-5 per cent decline till the end of the year.” The market has come a long way since the opening

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It’s ‘wait and see’ time in UAE “Dubai’s residential transactions through banks and financial institutions average between Dh1.5 billion to Dh1.7 billion per month, or roughly Dh20 billion a year...”

– Pawan Dhawan Head of Home Finance Noor Bank

Pawan Dhawan Head of Home Finance Noor Bank

of the real estate market to foreign investment, especially in the freehold areas in 2002, he said. “It has matured from a toddlers’ market to a more matured market within the span of just 12-13 years,” he stressed. Noor Bank, established in 2008, has a sizable home finance portfolio. It is amongst the top three home finance lenders in terms of monthon-month acquisition in Dubai.

In an interview with Gulf Property, Dhawan elaborated his views on mortgage and Islamic home finance. Excerpts:

Gulf Property: With the real estate market on the decline, how is the mortage/home finance market performing? Pawan Dhawan: The residential market will remain soft for a while due to the slowdown in the real estate

sector. I anticipate property prices to decline between 810 per cent this year. So, buyers are naturally taking a ‘wait and watch’ approach which could continue for a further 6-8 months. Although population of Dubai is growing with new professionals and families moving in, the supply of 15,000 – 16,000 new supplies may have a further softening effect on the market. However as the gap between the asking price and offer price narrows, retail transactions will pick up slowly, although I do not see a major movement for a while. It will remain stable till the first quarter of the next year.

Is it a bad time to buy property in the UAE? There is never a bad time

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Islamic Home Finance

here has been some misunderstanding and confusion amongst home buyers when thinking on Islamic home finance. How does an Islamic home finance work for different types of purchases? Islamic finance is based on the principle of partnership in which two parties agree to financing based on assets, purchase and lease. Leasing: Buyer chooses property, agree price Bank undertakes survey, buys property and leases it to the buyer at an amount at the

when it comes to buying a property – a real asset. Whatever happens in the market, if one holds on to the asset, one would get proper value. Investment in real estate is a long term involvement. The current prices of properties are quite low – 12-13 per cent lower compared to even the 2013 level. However, it could go down a bit further. That’s why investors are waiting to see how far it goes down.

How do you evaluate the current real estate market? The real estate market has come a long way during the last 12-13 years since the opening of the freehold property market to foreign investors in 2002. It initially grew from a less regulated to a more regulated environment. Dubai’s real estate market has matured a lot – from being a ‘toddler’s market’ a few years ago. The new regulations have helped the market to become more structured and more regulated. The market is under constant watch by the emirate’s real estate regulator which has done a brilliant job to transform it into a well-regulated market in the region. Due to these factors, a lot of expatriates have begun to

end of the tenor, in return for payments spread over a fixed period of 15-25 years The customer pays monthly rentals to the bank- assessed annually in line with market trends.

Replacing a conventional mortgage with a Sharia’h compliant one: Bank buys property from the buyer at current market value The price is used to pay off buyer’s interestbased mortgage Banks lease the property to the buyer at an amount assessed annually in line with market trends over a fixed period of 15-25 years The buyer pays the bank in equal monthly instalments. g

“Although retail market has started to pick up slowly, buyers are taking a ‘wait and watch’ approach which could go on till 6-8 months...”

– Pawan Dhawan

consider the UAE their home – which was not the case earlier. Now buyers know their rights and obligations, while the sellers also know of their obligations. So, Dubai’s market will see structured growth and decline as part of the economic cycle. However, it won’t crash, the way it did in 2008-09. There are lots of checks and balances introduced to reduce speculation that will also protect the market from overheating.

With mortgage interest and profit rates remaining at a historic low, shouldn’t the end-users move to buy property now and benefit from the low rates? Yes, they might consider it – and that’s why the retail home financing has slightly

picked up in some projects. However, buyers might wait to see how far the prices decline – to take further advantage from the low prices as well as low mortgage/profit rates. So, most buyers – old and new – are taking a ‘wait and watch’ approach. Although some financers are offering 2.99 per cent, the current average finance rate is going at between 3.5 – 4.5 per cent – which is very attractive for buyers. What is the difference between conventional mortgage and Islamic home finance schemes? From an end-user perspective, how does it affect the new home buyer? The structure of Shari’a-compliant home finance is quite different from conventional mortgage, however, from an end-user perspective, he or she will have to shell out the equated monthly instalment (EMI) in both the scenarios. The fundamental difference is in the way the product is structured. Under the Shari’a-compliant home finance (Ijarah Structure), the lender purchases the property and leases it out to the customer for a specified tenor where the customer makes monthly rental payments. At the end of the

HOMEFINANCE tenor, the ownership of the asset is transferred to the customer. In a conventional structure the customer remains the owner of the property, and the property is mortgaged to the lender. The customer makes monthly payments as per agreed terms, and upon completion of the tenor the mortgage is released by the lender. The structure and the terminology are different. But from a monthly cash flow perspective the home buyer has pay to pay monthly EMI’s in both scenarios.

With affordable homes coming in the market, how do you see the mortgage market change? Yes, the affordable homes will change the market to a certain extent. Over the last 12-18 months a number of affordable homes projects have been launched. I assume the number of transactions might go up. However, with a lower ticket price, the overall value of finance transactions might not have a significant impact. Even then, it’s good for the market, as a large number of people from the middle-income group will start buying homes that might trigger a growth in both the property as well as finance transactions.

When do you see the market picking up? The upside depends on the various factors, such as economic growth, infrastructure spending, stabilised oil prices, liquidity, absorption of the new real estate supply and market sentiment. But I believe we should see some traction by 2017. The real growth will be seen with the run up to the World Expo 2020. g Gulf Property

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TALLTOWERS

Dubai hosts 18 of the tallest 100 towers

Gulf Property Exclusive

s many as 21 of the world’s tallest 100 completed towers are currently located in the UAE, including 18 in Dubai and three in Abu Dhabi, according to the Council on Tall Buildings and Urban Habitat (CTBUH), the global authority on skyscrapers. The UAE follows China which hosts 36 of the world’s tallest 100 skyscrapers, statistics show, but stands

Gulf Property

ahead of the United States – the country that once dominated the global list of tall buildings – with 18. However, Dubai dwarfs all the global cities for hosting 18 of the world’s tallest 100 towers. Last year, 97 buildings of 200 meters’ height or greater were completed around the world – a new record, CTBUH said in its latest findings. The 97 buildings completed in 2014 beat every previous year on record, including the previous record high of 81 completions in 2011. A total of 11 supertalls

(buildings of 300 meters or higher) completed in 2014 – the highest annual total on record. Since 2010, 46 supertalls have been completed, representing 54 per cent of the supertalls that currently exist (85). The number of 200-meter-plus buildings in existence has hit 935, a 352 per cent increase from 2000, when only 266 existed. This was the “tallest year ever” by another measure, says CTBUH, such as – The sum of heights of all 200meter-plus buildings completed across the globe in 2014 was 23,333 meters –

setting another all-time record and breaking 2011’s previous record of 19,852 meters. “Asia’s dominance of the tall-building industry increased yet again in 2014. Seventy-four of the 97 buildings completed in 2014, or 76 per cent, were in Asia,” the report said. Once again, for the seventh year in a row, China completed 58 towers – or the most 200-meter-plus buildings. This represents 60 per cent of the global 2014 total, and a 61 per cent increase over its previous record of 36 in 2013.

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TALLTOWERS

An artist’s impression of Burj 2020 at the backdrop of the Jumeirah Lake Towers

within one meters’ height of each other, just barely making the cutoff at 200 meters. Besides the World Trade Center - The Residences in Abu Dhabi, the other supertall to complete in the Middle East was in Riyadh, Saudi Arabia’s Burj Rafal, clocking in at 308 meters. Kuwait’s 240-meter Crystal Tower also completed. But how should one see this surge in skyscraper race? “It could very well be that pent-up demand has returned to real-estate markets after a lull during the recession. Now that six years have passed since the global economic crisis/recession began in 2008, and given the long gestation and construction periods common to tall buildings, we are almost certainly seeing a post-recessionary recovery,” a CTBUH spokesperson said.

“In 2014, the number of buildings entering the world’s 100 tallest list was 13, one more than in 2013. The shortest building on the 100 tallest list in 2013 was the Columbia Center, Seattle, at 284.4 meters,” CTBUH said the report. “In 2014, the shortest building became the 291.6-meter SEG Plaza in Shenzhen, having moved down the rung from number 87 to number 100. “The average height of buildings in the 100 tallest list has thus increased to 350 meters in 2014 from 344 meters in 2013 – the figure in

2000 was 285 meters.” The Middle East had 11 completions in 2014, or 11 per cent of the global total, down from a record 23 in 2011, or 28 per cent of the global total, the report shows. “The typical leaders of the Middle Eastern pack, the UAE’s dueling municipalities Abu Dhabi and Dubai, flagged somewhat in 2014. Each had two completions, including Abu Dhabi’s 381meter World Trade Centre Abu Dhabi – The Residences, which was the second-tallest building to complete worldwide in 2014,”

CTBUH said. The other UAE building to complete in 2014, the 278meter World Trade Center Abu Dhabi – The Offices, entered the charts at number 17. “The UAE’s two-year run of having three of the world’s five tallest buildings completed in a given year was broken in 2014 by the incursion of that “other” World Trade Center in New York, and the persistence of construction in China,” it said. Qatar delivered four of the 11 completions in the Middle East, all of which were in Doha, and all of which were

Tall Buildings in 2015

If anything, 2015 promises to be more active than 2014 and indeed, any year previous, CTBUH report says. It currently projects the completion of between 105 and 130 buildings of 200 meters’ height or greater, eight to 15 of which will be supertalls, and one of which will be a megatall – Shanghai Tower. “Once again, China is expected to lead by a wide margin. China is on track to complete or top out 106 buildings of 200 meters or greater – that’s 86 per cent of the low-range estimate of 105 and 72 per cent of the high end estimate of 130 towers,” it said. Gulf Property

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The Dubai Factor

The long-planned Burj 2020 is back in action, according to CTBUH insiders. In late 2014, shortlisted architecture and engineering teams were being interviewed, making the claimed start of construction in 2015 seem plausible. If the 660-meter tower’s developers want to keep its original plan to have the highest observation deck, it will have to top the Burj Khalifa’s 555.7-meter perch. Tall building specialist Adrian Smith + Gordon Gill

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Architecture (AS+GG) has been chosen by the master developer of Dubai’s Jumeirah Lakes Towers (JLT) district to design the Burj 2020 tower – set to be the world’s tallest office tower. AS+GG has also designed Saudi Arabia’s Kingdom Tower – the one-kilometerhigh tower being built by Jeddah Economic Company that is set to be the world’s tallest when it completes in 2019. Its founders also worked on the design of Dubai’s Burj Khalifa while based at Chicago practice Skidmore, Owings & Merrill (SOM).

JLT’s master developer, DMCC, has also appointed WATG to create the master plan for the surrounding Burj 2020 district. It has worked on projects including The Atlantis, The Palm, and Abu Dhabi’s Emirates Palace, as well as the Grand Hyatt in Kuala Lumpur. “AS+GG and WATG come with a wealth of global destination and tower design expertise,” said DMCC Executive Chairman Ahmed Bin Sulayem. “Designing a world-class destination of this scale will set new levels of efficiency and urban sustainability and

we are confident that our partners, in delivering the Burj 2020 District and tower, will create a new address for the global business community of the future, right here in Dubai.” WATG’s master plan for the surrounding district will encompass around 1.3 million square meters of buildings, including commercial, retail, and hotel space. DMCC has previously said that a 360-degree observation deck at the top of the Burj 2020 is planned, making it the highest observation deck in the world. However, the latest an-

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Cities with the most skyscrapers

This list showcases the cities with the most skyscrapers. No City No of Towers 1 Hong Kong 1,268 2 New York City 677 3 Tokyo 411 4 Chicago 299 5 Shanghai 256 6 Dubai 248 7 Toronto 228 8 Guangzhou 183 9 Singapore 171 10 Shenzhen 160 11 Seoul 157 12 Osaka 151 13 Moscow 143 14 Chongqing 139 15 Bangkok 126 16 Busan 115 17 Istanbul 108 18 Sydney 105 19 Tianjin 104 20 Jakarta 103 21 Chengdu 99 22 Panama City 95 23 Kuala Lumpur 94 24 Mumbai 91 25 Shenyang 88 26 Beijing 85 27 Miami 85 28 Houston 83 29 Melbourne 82 30 Mexico City 81 31 São Paulo 75 32 San Francisco 72 33 Hangzhou 68 34 Xiamen 67 35 Nanjing 67 36 Incheon 66 37 Hanoi 62 38 Honolulu 62 39 Makati 61 40 Dalian 59 41 Los Angeles 57 42 Ho Chi Minh City 56 43 Atlanta 56 44 Abu Dhabi 54 45 Calgary 53 46 Tel Aviv - Yaffo 53 47 Rio de Janeiro 53 nouncement made by master developer Meydan, on the launch of a massive new scheme known as Meydan One featuring a 711-meter

No 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100

City Brisbane Las Vegas London Vancouver Philadelphia Boston Seattle Suzhou Buenos Aires Goiânia Ankara Macau Gold Coast City Dallas Kaohsiung City Changsha Kobe Yokohama Wuxi Caracas Doha Denver Montréal Daegu Shijiazhuang Frankfurt San Diego Cairo Recife Wuhan Minneapolis Kunming Taipei Paris Pittsburgh Benidorm Detroit Qingdao Manila Nagoya Mississauga Nanchang Harbin Hefei Jinan Courbevoie Guiyang Mandaluyong New Orleans Kyiv Baltimore Sharjah Chiba

tower, a new mall, the world’s largest indoor ski slope, a 25,000-square-meter indoor sports facility, one of the largest fountains in the world,

No of Towers 52 51 51 50 49 47 45 43 43 43 42 41 41 41 40 40 39 37 36 35 34 33 32 31 30 29 29 29 28 28 27 27 27 27 26 26 26 25 24 24 23 23 23 23 22 22 21 21 20 19 19 19 19

has once again surprised the industry observers that reflects the determination of the UAE’s commercial hub to push ahead with more super-

TALLTOWERS

tall buildings to remain on top. “In a city which never stops innovating, today’s announcement is significant for the future of Dubai and the UAE,” Meydan City Corporation Chairman Saeed Al Tayer, said at its launch last month. The project is to have a total built area of five million square meters and be home to 78,300 residents. It is to contain a five-star hotel with 350 rooms, a conference center, the world’s tallest 360-degree observation deck at 655 meters, the world’s highest sky restaurant at 675 meters, 885 apartments, and a marina yacht club.

Kingdom Tower

The 167-floor, 1,000-meter Kingdom Tower broke ground in June 2013 and reached up to ground level by late April 2014. The first 10 floors had risen by December 2014 – a rate of about 1.25 floors per month. At that rate, by the end of 2015, the 25th floor should be completed. If the building is to complete on schedule in 2019, however, it will have to speed up. At the current pace, Kingdom would just make 85 floors by then. Gulf Property

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TALLTOWERS

Waterfront City to add 200 towers in Sharjah Al Nujoom Islands, renamed Sharjah Waterfront City by Sharjah Oasis Real Estate Development

new developer, Sharjah Oasis Real Estate Development Co. will redevelop Al Nujoom Island project under a new branding, Sharjah Waterfront City, that will host 200,000 residents living and working in 200 mixed-use towers, 95 apartment towers, 1,100 villas – all to be built at a cost of Dh18.3 billion ($5 billion), the developer said. Sharjah Waterfront City will be spread across 36 kilometers of coastal land on the northeastern coast of the emirate between Hamriyah Free Zone and the borders of

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Umm Al Quwain with a pristine beachfront area. The city will have a marina, marine clubs; a shopping mall; two entertainment centers; mosques, schools, banks, stores, coffee shops, restaurants and all other community facilties. “We have commenced work on the infrastructure after securing the required approvals from the government authorities,” said Hayssam El Masri, president, Sharjah Oasis Real Estate Development Company. The first phase of the project will be spread across a plot area of 3.05 million

square feet (283,000 square meters) with a total construction area of 15.22 million square feet (1.4 million square meters). El Masri said, the second phase is expected to be completed by 2020–2021. “The project will be developed in multiple phases, keeping in mind the market dynamics,” he added. On completion, Sharjah Waterfront City will have a total area of around 60 million square feet (5.5 million square meters) – becoming one of the biggest real estate developments in the emirate. Overall, the project is expected to become a major

tourist destination and support Sharjah Tourism Vision 2021, the strategic plan developed by Sharjah Commerce and Tourism Development Authority that aims to attract 10 million tourists by the year 2021. Initially launched by Saudi developer Al Hanoo Investment LLC as Al Nujoom Island, the community will host more than 3,000 villas, and commercial buildings, 6 hotels and 2 resorts. The project’s initial cost was estimated at Dh18 billion and the whole project was expected to be completed in 2016.

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Skyline Ranking

his listing ranks cities by the visual impact of their skylines. It is drawn from statistics in Emporis database, and reflects only completed high-rise buildings as defined by the Emporis Standards Committee (ESC). This calculation does not include TV towers or masts etc. About the formula. each building is assigned points based on its floor count. The point total for each city is calculated automatically and displayed. Dubai currently ranks the top Arab city while it’s current global ranking of 6th position is expected to increase once some of the projects are completed. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

City

Hong Kong New York City Singapore Moscow Seoul Dubai Chicago Shanghai São Paulo Bangkok Tokyo Guangzhou Busan Toronto Shenzhen Incheon Chongqing Mumbai Panama City Kuala Lumpur Istanbul Jakarta Beijing Osaka Macau Rio de Janeiro Melbourne Ulsan Abu Dhabi Buenos Aires Miami Recife Sydney Wuhan Dalian Tianjin Shenyang Kyiv Makati Vancouver St. Petersburg Xiamen Harbin London Chengdu Nanjing Houston Honolulu Daegu Gold Coast City

Population

7,061,200 8,336,697 5,312,400 11,503,501 10,581,728 2,104,895 2,714,856 17,836,133 11,316,149 8,280,925 8,967,665 6,560,500 3,614,950 2,615,060 3,538,275 2,710,579 6,300,000 12,478,447 880,691 1,627,172 10,121,565 10,187,595 7,746,519 2,871,680 568,700 6,323,037 4,169,103 1,145,096 921,000 2,891,082 413,892 1,555,039 4,627,345 6,434,373 2,980,513 6,825,105 8,106,171 2,797,553 529,039 603,502 4,879,566 1,861,289 3,433,629 8,173,194 7,677,100 8,109,100 2,160,821 345,610 2,446,418 527,828

Area Size

1,053 km² 800 km² 710 km² 1,080 km² 616 km² 3,885 km² 589 km² 6,638 km² 1,523 km² 1,568 km² 620 km² 7,434 km² 527 km² 629 km² 2,020 km² 1,029 km² 82,403 km² 621 km² 2,560 km² 243 km² 1,991 km² 661 km² 16,807 km² 220 km² 21 km² 1,182 km² 7,694 km² 1,056 km² 67 km² 200 km² 92 km² 218 km² 12,144 km² 8,494 km² 13,238 km² 11,920 km² 12,942 km² 800 km² 21 km² 114 km² 1,431 km² 1,565 km² 7,086 km² 1,579 km² 12,300 km² 6,516 km² 1,398 km² 265 km² 885 km² 1,402 km²

No of Buildings Points

7,794 6,092 4,563 11,168 3,048 686 1,162 1,121 5,789 923 2,771 547 378 2,040 477 689 574 1,674 241 609 2,313 453 942 1,490 583 2,595 581 1,363 182 1,714 312 1,108 861 492 192 321 253 1,890 230 670 2,474 332 266 1,613 199 129 368 445 130 290

133,531 43,130 22,400 21,915 21,783 20,642 20,333 18,451 18,442 15,586 15,001 13,920 13,132 12,934 12,542 11,288 10,270 9,114 9,008 8,102 7,096 7,044 6,366 5,948 5,943 5,846 5,318 5,311 5,167 5,111 5,027 4,966 4,759 4,653 4,573 4,459 4,334 4,327 4,171 4,052 4,045 3,941 3,888 3,871 3,861 3,861 3,819 3,719 3,715 3,618

TALLTOWERS

At A Glance 23,333

metres – the sum total of all the 97 skyscrapers completed in 2014

248

skyscrapers completed in Dubai at the end of 2014

of the world’s tallest 100 skyscrapers are in the UAE

686

number of towers in Dubai

The project ran into difficulty in 2008-09 when the global financial crisis had begun to severly impact the UAE’s real estate market, forcing the developer to delay the mega project. Al Hanoo Investment later started to revive the project by offering investors plots, villas and apartments in 2013, when the real estate market had begun to pick up.Al Hanoo then started to sell plots and flats. However, the slowdown since last year might have affected the project’s development second time within six years. The latest announcement by Sharjah Oasis Real Estate Development Company reflects a takeover of the project and its redevelopment by the company. Once developed, it will help boost tourism sector of Sharjah as well as the neighbouring emirates of Ajman and Umm Al Quwain that needs such an high-end destination. Gulf Property

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Dubai issues law to regulate valuation

Gulf Property Exclusive

ubai Executive Council has passed a resolution to create a law governing standards for surveyors and property valuers, that is expected to further boost transparency and investor confidence in the emirate’s real estate sector. The new Law No.37 for the year 2015 will mean that people who assess property values will need to possess

certain qualifications and be registered with Dubai’s Real Estate Regulatory Agency (RERA). “The UAE market and Dubai in particular, has historically lacked transparency in common with all other regional property markets. The past five years however, have seen substantial improvements in market transparency and the adoption of what can widely be considered best practice,” says Richard Sweetman MRICS is Managing Partner of British Arabian Asset Valuers and Chartered Surveyors.

“As a professional valuer I believe there are areas with room for further improvement. With that in mind I recently undertook a survey among Retail Bank Credit Risk professionals, who commission the majority of real estate valuations.” Qualified practitioners will need at least two years’ worth of valuation experience, although trainees can also be registered, subject to passing certain qualifications. RERA will be given the power to decide whether surveyors are allowed on to the

NEWSUPDATE register and what existing licences should be renewed. It will also look into complaints against property valuers. The move is aimed at preventing unlicensed and underqualified professionals from valuing properties. Assessors will only be able to act for one party when completing a valuation – be it a bank or a property client. Any breaches of RERA’s rules will lead to fines, which will be doubled if offences are repeated. RERA will also be able to suspend, or even revoke, permits for those who continue to breach its rules. Sultan Butti Bin Mejren Director General of Dubai Land Department, welcoming the decision, said the resolution will contribute to enhancing the transparency and credibility of the real estate market in Dubai and the UAE in general, as it will determine the qualified entities and groups for the exercise of this important work in the emirate, while prohibits unauthorised issuing reports for the purpose of real estate valuation, especially as there will be a formal record of the residents of real estate in the emirate. He stressed on the importance of this decision, because it puts the basic rules for the work of the parties authorized to practice real estate evaluation, especially since they will be governed by Emirates Evaluation Book which is compatible with the international standards. The decision will serve the banking sector, where landlords and banks will be able to ask for real estate evaluation accredited residents depending on the exact conditions set by formal decision. g Gulf Property

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NEWSUPDATE

By Indrajit Sen Senior Reporter

Dubai-based property developer is building a £500 million (Dh2.8 billion) 50-storeyed luxury residential tower Aykon Nine Elms that will benefit UAE’s wealthy British expatriates who want to buy their retirement homes at a posh central London neighbourhood overlooking the Thames river, with the money made in the UAE. The two-tower 360-apartment project is also expected to attract UAE nationals who might want to buy a second home in London where they spend part of the year. London was the top investment destination of capital flow from the Middle East, representing $4.44 billion of the $14.1 billion capital outflow in the real estate sector from the Middle East to the rest of the world, according to a research by CB Richard Ellis. “Described often as the ‘Eighth Emirate,’ London is one of the most desirable cities for investors from the UAE and the wider GCC region,” Andrew Phillips, Regional Sales Director at Hamptons International, said in a statement earlier. The project, which is expected to be completed by

Gulf Property

Damac enters UK with £500m project

2020, is one of many properties Damac wants to build, the company’s chairman told the media, following the announcement on July 20, this year. “There is a huge appetite from our current global customer base for luxury property investments in London,” Hussain Sajwani, Chairman of Damac, said in a statement. “Aykon Nine Elms presents an unrivalled opportunity for them to access the stable and established London market. “It also presents prospective buyers with an unrivalled opportunity to own a luxuri-

ous central London home, in close proximity to the luxury shopping destinations of Knightsbridge and Mayfair, Chelsea and the planned Linear Park,” he added. DICO UK Property Holdings Ltd, a wholly-owned subsidiary of Damac International Limited, has tied up with fashion design brand Versace Home to launch Aykon Nine Elms, prices of which starts at £690,000 for a of studio apartment. The project management is being handled by Turner and Townsend while Kohn Pedersen Fox Associates is the consultant architect. DP9 is

offering the planning consultancy and WSP has been appointed as the structural engineering consultant. The developer plans to break ground on Aykon Nine Elms in Q2 2016 and finish construction by 2020. The project is being funded by Damac’s sales proceeds and project finances. The sales campaign for the project – which has been launched in London, the GCC, Hong Kong and Singapore has thus far been ‘positive’ for the developer. “We have been very encouraged by the interest. We were confident that we will have a

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Utico gets Dh719m for desal plant

tico Middle East, a private utility provider, and Spanish energy giant Grupo Cobra have announced their joint venture partnership to construct a Dh719 million water desalination plant in Ras Al Khaimah. The joint venture, to be called Al Hamra Water Company, is 60:40 partnership between the two companies and will oversee the development of the privately financed independent desalination company. The facility will be located in Al Hamra Jazeerah area of Ras Al Khaimah and will be an environment-friendly desalination plant. good response due to Aykon Nine Elms’ location and it being a unique product in the city of London,” Niall McLoughlin, Senior Vice President – Corporate Communications and Investor Relations, told Gulf Property. The developer is also planning to offer a retail component at the ground floor of the tower - reportedly spanning 8,000 square feet. The retail space – which is in the design stages and has not been released to the market will ‘enhance the area for the community’, according to McLoughlin. “This is the first tower of this scale to be fashionbranded in London. There are a few small things like the Bvlgari Hotel in Knightsbridge, but that is just 80 odd rooms. There is nothing like this in London. This is the first foray into fashion residences by an international fashion brand,” McLoughlin

Once completed in 2017, the Al Hamra Water Company will generate 22 million gallons of water per day (MGD) to serve the needs of Ras Al Khaimah and surrounding regions. The project will create 300 jobs during the construction phase and 80 permanent positions once operational. About 20 to 25 per cent of these jobs will be offered to Emirati nationals after training them for a year. Rashid Al Baloushi, Chairman of Utico, said, “The project is a path-breaking development and comes at the right time especially when governments are removing subsidies for fuel and services.” Richard Menezes, Utico’s Managing Director, also said that the facility will be a state-of-the-art facility, being the most technologically advanced, and having one of the lowest power consumpclaims. “This is truly London’s first!” London continues to be one of the most sustainable real estate markets in the world, with solid year-onyear price growth circa 6 per cent according to real estate advisory firm, Jones Lang LaSalle. Analysts expect house price inflation in the region of 5-7 per cent in the coming years. “Versace is synonymous with fashion and luxury and its participation in the real estate business provides the opportunity to fully experience the Versace lifestyle. In recent years, the private residential projects have become a strategic part of the Versace world,” Gian Giacomo Ferraris, CEO of Versace said. With the Central London property market opening up, real estate developers and investors are racing to grab parcels of available land. In

tion levels in the region, as well as water re-use saving at least 33,280 tons of CO2 per year. These factors will help the facility to reduce impact on climate change as well as provide quality water to all consumers. Established in 1944, Grupo Cobra is part of the ACS Group, a 59 billion Euro annual turnover company, and develops, builds and operates industrial infrastructures. The company has over 30,000 employees located in 45 countries. Miguel Guevara Fernandez, CEO of Grupo Cobra (Water), said that the group’s investment is a vote of confidence in the UAE’s growth and in the project. He added that the company has built several facilities from Algeria to Australia and was confident that the Ras Al Khaimah plant will be one of the most advanced in the world. g future one might see other GCC-based developers building projects in London or even other British cities. “GCC-based buyers are currently looking at 8 to 10 per cent currency advantage due to the strength of the US Dollar. And with our forecasts showing house price growth of almost 18 per cent over the next five years, the historic capital value growth appeal of London will continue driving inward investment. In fact, net inward institutional commercial property investment into the UK during Q1 was almost 150 per cent up during Q1 2014 and was led chiefly by dollar based funds, which accounted for 40 per cent of the total, according to Property Data,” Faisal Durrani, Cluttons’ International Research Manager, explained. Damac too intends to develop projects in London in future through DICO UK. g

NEWSUPDATE

IREIS to offer best realty in 2015 edition

he seventh edition of the International Real Estate and Investment Show (IREIS) will showcase a diverse array of property investment opportunities within the UAE and worldwide, organisers Dome Exhibitions said. To run from 29 to 31 October at the Abu Dhabi National Exhibition Centre, IREIS is a dedicated real estate event that targets investors and end-users rather than trade visitors. The event is expected to attract an excellent mix of exhibitors and investors from the region. IREIS 2015 will particularly spotlight the opportunities in the bludgeoning real estate markets across the Middle East, Europe and the Asia Pacific region through providing investors and visitors an ideal platform to meet with leading realtors, open up new business opportunities, and facilitate potential deals. IREIS 2014 attracted 84 exhibitors from 22 countries and 4,306 visitors from over 75 countries. Additionally, the event facilitated close to Dh400 million worth of deals during the exhibition. Antoine Georges, Managing Director of Dome Exhibitions, said: “IREIS will convene at an ideal time for investors to enter the real estate market with the continuing shift in property prices working in favour of the buyer.” g Gulf Property

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INDIACORNER

UAE’s $75bn to power India’s urban growth

Gulf Property Report Exclusive

he UAE’s $75 billion investment into India’s infrastructure will help the Indian Government to speed up its infrastructure, interstate connectivity and urban development including a massive housing scheme of 110 million homes and help fast-track the development of 100 smart cities planned as part of Vision 2022 – a year when India celebrates 75th year of independence from the British rule.

Gulf Property

Under Prime Minister Modi’s Vision 2022, India also plans to ensure a financial inclusion programme for all while drive the country’s manufacturing sector under the ‘Make in India’ – which will create demand for 50 million affordable homes to house the workers and lowincome households. During Modi’s state visit to the UAE last month, both the countries announced the creation of an infrastructure fund to the tune of $75 billion to power India’s growth. An Indian citizen moves to the country’s urban areas in every 2 seconds or 30 per minute for a better life. This

translates to a migration rate of 1,800 per hour, or 43,200 per day from rural areas to urban. On an average 15.76 million people migrate from rural to urban areas every year – putting a huge pressure on infrastructure, housing and civic services. The population of India stood at 1.2 billion in 2011, growing by 180 million over a decade since 2001, according to the government census. “The urban population grew more than the rural, for the first time in Indian history in 2011. 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,” it said. India’s current urban population of 377 million is much bigger than the combined population of United States and Canada. The country currently hosts the world’s second biggest urban population which will cross 810 million by 2050. The rapid migration of people from the rural areas to cities is going to multiply problems in the coming years as the government has

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Smart Cities

he concept of smart cities emanates from the need to create efficient urban facilities that can house new urban upwardly mobile professional middle class and provide employment opportunities for a large number of residents. Cities can develop based on core competence in specific economic areas and promote that aggressively. Also, develop adequate institutional, physical, social and economic infrastructure to attract professionals and investors. Indian government in its budget 2014-15, had announced a project to develop 100 Smart Cities as satellite towns of larger cities by modernising the existing

to first fix the infrastructure bottlenecks in the existing facilities while making sure they can take the additional pressure. The $75 billion investment by the UAE makes the Arab country India’s biggest development partner which also hosts 2.6 million non-resident Indians (NRIs) who collectively remit more than $12.63 billion personal remittance a year to India. The investment pledge by the UAE also demonstrates Modi’s ability to convince investors and command trust and respect, based on his strong credentials. The investment will help Modi to accelerate his infrastructure development programmes that will help Indian economy to deliver 8-10 per cent growth, double than the 4.5 per cent his government inherited while coming to power in May 2014. The new push for infrastructure will help accelerate urban development, housing and real estate sectors as

mid-sized cities in the country. Initially, Rs70.6 billion has been allocated for the project. To implement the project, the government has devised a clear strategy in which each state to identify qualifying cities for central funds based on a proposal. Once shortlisted, cities would receive a grant of Rs100 crore per year for five years. The state government’s contribution and resources from the private sector will be garnered for additional funding. The government has a target to identify 20 cities by end-2015, 40 by 2016 and the remaining 40 by 2017. Bloomberg Philanthropes, a smart city agency, is helping the Indian government conduct the Smart City Challenge. The Bureau of Indian well as associated industrial developments that India needed. “This is a marked turnaround by the UAE that historically shied away from making large-scale investments into India due to slow pace of growth,” Dr Kushal Jain, an Indian economist, said. “However, Modi government’s decisiveness, business-friendly approach and firm commitment to development activities have encouraged UAE to commit such a large investment.” According to a report by global accounting firm KPMG, housing shortage in India is about 60 million units. Current annual investments in the housing sector is about $110 to 120 billion while the sector is growing at an average rate of 5 to 6 per cent. The good thing is that the Indian government is mindful of the situation and has already started taking actions. That’s why it has announced a vision to provide housing for all by 2022. As a

Standards is already working on setting standards for smart cities. Smart Cities Council India has been formed to promote the development of smart cities in the country. The government has increased budget allocation from Rs70 billion ($1.14 billion) to Rs480 billion ($7.86 billion). So far, expression of interest for participating in investments received from the European Union, Japan, Germany, France, Qatar, Singapore, Australia and Sweden. Once these smart cities projects get off the ground, both real estate and construction sectors will witness heightened activities – that will drive the growth of the Indian economy to beyond the government’s target of 8 per cent. result, it is planning to develop 500 cities including upgrading 100 to smart cities. By 2022, India needs to develop about 110 million housing units to come closer to realise this dream and this requires investments of more than $2 trillion or about $250 to 260 billion annual investment until 2022. “Investments will need to grow at a CAGR of 12 to 13 per cent till 2022 while 70 per cent of the housing needs till 2022 should be concentrated in nine states,” KPMG says. Urban housing is to account for about 85 to 90 per cent of the total investments; the focus should be on affordable urban houses, which is 70 per cent of the total urban housing requirement. The Indian real estate market size is expected to touch $180 billion by 2020. The housing sector alone contributes 5-6 per cent to the country's gross domestic product (GDP). Also, in the period FY08-20, the market size of this sector is ex-

INDIACORNER pected to increase at a compound annual growth rate (CAGR) of 11.2 per cent. “India needs to create several new-generation, green field cities that are planned, financed, developed, operated and managed more efficiently,” Amitabh Kant, India’s Secretary of Industrial Policy and Promotion, told at a business event last year. “We’ve just liberalised the barrier to foreign investment in construction, recently. What we have allowed is completely easy entry into the construction sector. We want foreign direct investments (FDI) in construction. We used to get about $6 billion foreign investment in the construction sector.” Analysts feel, the onus is now on the Indian government to deliver on the promises and UAE government will see the pace of India’s economic development as well as the return on their investment. For the UAE, which is sitting on more than $1 trillion in several Sovereign Wealth Funds (SWFs), Europe is no longer a viable market for investment, while the United States is also not offering the kind of return they would want to get from their investment. That way, India offers the best investment option. If India can deliver results, the country could bank on even greater investment flow into the country. Other cashrich governments in the GCC will be closely watching Modi Government and make their moves after evaluating performance. However, if things go as planned by Prime Minister Modi, India will see the beginning of a new chapter in its history that will help it become a major economic superpower. Gulf Property

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INDIACORNER

Tata Housing camps in Dubai with projects

By Indrajit Sen Senior Reporter

ata Housing, owned by Tata Sons – India’s largest private business conglomerate, is currently developing more than 15 million square feet of projects across multiple Indian cities. The developer recently opened a representative office in Dubai, its third overseas office after Sri Lanka and the Maldives, to reach out to GCC-based NRIs with its portfolio. In an exclusive interview to Gulf Property, Brotin Banerjee, CEO and Managing Director of Tata Housing, talks about how the developer

Gulf Property

makes it a point to cater to both the high-end and affordable housing segments, its focus on sustainability and how important GCC NRIs are to its international sales campaign. Excerpts:

Gulf Property: How big is Tata Housing’s project pipeline? Brotin Banerjee: Established in 1984, Tata Housing is a closely held public limited company and a subsidiary of Tata Sons Limited. Tata Sons Limited holds 99.90 per cent of equity share capital of the company. Since its revival in 2006, the company has grown exponentially to establish itself as one of the fastest growing real estate developers in India. Tata Housing has

stood out in the industry with quality construction, ethical and transparent business practices, rapidly acquiring an image as a Quality Conscious and Reliable Developer. Today, Tata Housing is developing large townships and differentiated theme based projects in major and mini metros. As a comprehensive real estate developer of choice, Tata Housing straddles all consumer segments from value to luxury housing, by offering products ranging from ₹12 lakhs (₹1.2 million; Dh66,745; $18,170) to ₹14 crores (₹140 million; Dh7.78 million; $2.10 million). All projects developed by Tata Housing are certified sustainable green developments, designed by top internation-

ally renowned architects. With strength of over 700 employees, and presence in Mumbai, Lonavala, Talegaon, Pune, Ahmedabad Goa, Gurgaon, Chandigarh, Bengaluru, Chennai, Kolkata and Bhubaneswar; the company is now in the process of expanding its footprints to other parts of India, across the Tier I and II cities. The company has also ventured into foreign markets such as Maldives and is actively exploring other markets including Sri Lanka and other South Asian countries. Tata Housing has been receiving various industry recognitions and accolades, both on domestic and international platforms. How many projects have

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INDIACORNER is spread over a land of nearly 8 acres with five majestic towers. Phase I of Eden Court consists of three towers of G+19 floors, having affordable 2BHK and 3BHK apartments. The new two are of G+23 floors having 3BHK premium apartments. The other options available in these two towers are 3BHK with Study and 3BHK with study and servant's room. The high rise towers provide the beautiful views of surroundings and internal gardens Shubh Griha Boisar is part of Tata Value Homes iconic township in Boisar which is home to 3000 families. Apartments are sold out at the project and the company has launched its second project in Boisar under the .New Haven. brand.

Brotin Banerjee, Managing Director and Chief Executive Officer of Tata Housing, talking to Gulf Property

you delivered till date? What is the total combined value of development and space currently under construction now? Tata Housing now maintains a balanced portfolio of value and premium homes. The company has a steady pipeline of over 15 million square feet for new projects. It will devote at least 8-9 million square feet of the new projects under Tata Value Homes, priced around ₹12 lakhs (₹1.2 million; Dh66,745; $18,170) to ₹50 lakhs (₹5 million; Dh277,960; $75,668). The rest will go into projects under the Tata Housing brand, to build homes for ₹75 lakh (₹7.5 million; Dh416,900; $113,500) to ₹10 crore (₹100 million; Dh5.55 million; $1.15 million)

and above. Over the past few years, Tata Value Homes (a 100 per cent subsidiary of Tata Housing) has delivered over 5,000 apartments in the price range of ₹5 lakhs (₹500,000; Dh27,784; $7,564) to ₹30 lakhs (₹3 million; Dh166,665; $45,382) across various townships.

Your company has delivered multiple residential projects across multiple Indian cities including Mumbai, Gurgaon and Kolkata. Could you talk about some of these projects? Tata Housing enjoys a presence in the aforementioned markets of Mumbai, Gurgaon and Kolkata. Amongst our flagship properties deliv-

ered to customers are ‘Raisina Residency’ in Gurgaon, ‘Shubh Griha Boisar’ in Mumbai, Prive in Lonavala, Aquila Heights in Bangalore and Eden Court in Kolkata. Set along Gurgaon’s most sought after address – Golf Course Road Extension, Sector 59, Raisina offers views of the Aravalli Hills on one end and the city’s skyline on the other. The project boasts 2 apartments on each floor across all floors while also offering 5BHK duplex apartments and top floor penthouses Eden Court is in close proximity to the airport and Salt Lake, and situated closest to the Central Business District in Kolkata's new IT hub: Rajarhat. The complex

What are the USPs of Tata Housing’s projects? Tata Housing has pioneered the concept of property development and has stood out in the industry for its ethical business practices, rapidly acquiring a public image as a quality conscious and reliable developer. The company straddles all consumer segments from value to luxury housing and has been developing large townships and differentiated theme based projects in major and mini metros. The company has pioneered the concept of energy efficient and environmentally sustainable buildings and townships at a time when the awareness for such projects was very low. As a frontrunner, Tata Housing has always offered unique projects to its customers, which are not only luxurious but exclusive and are customised to the needs and requirements of the consumers. Gulf Property

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INDIACORNER

Tata Housing has a different way of doing things. It delivers lifestyle in a style...

Could you give us some idea about the current residential projects across the various cities that Tata Housing is developing? Today, Tata Housing is India’s fastest growing real estate development company across the consumer segment, with its presence varying from value to luxury housing. The company is developing large townships and differentiated theme based projects in major and mini metros. Tata Housing’s Prive project in Lonavala is architecturally distinct from its surroundings, built on a slope, Privé takes advantage of its amphitheatric position to enhance a strong indoor/ outdoor relationship and frame beautifully the wide

Gulf Property

views of North Point and the Khandala Valley. Avezza in Mulund, Mumbai includes 950 unit options ranging from 2 to 4 bedroom to 4 & 5 BHK duplexes, triplex and penthouses. Amantra is an affordable luxury residential township with 14, 24, 29 and 34 storied towers. The project is spread over 22 acres of sprawling land. Amantra is one of the tallest residential structure in Kalyan offering amenities like an elevated jogging track on the 14th floor, Infinity pool and clubhouse with over 25,000 square feet. Arabella by Tata Housing is inspired by the Aravallis and has been aesthetically designed as an extension to the lush green surroundings. It is

built across approximately 35 acres and offers 3, 4 and 5 BHK villas right in the heart of Gurgaon – Sohna Road. Designed with the theme of Aravalli ridge and view of the ridges, Arabella is a Villa development with around 150 villas of typologies. Gurgaon Gateway is situated at the doorstep of Delhi and marks the entry of Gurgaon. The project has transformed the skyline of Gurgaon by giving each tower at Gurgaon Gateway a unique gradient. When do you expect to finish construction of these current projects and deliver it to customers? Possession of majority Tata Housing projects under construction will begin in late

2016 and will continue in phases. However we intend to deliver these projects in the coming two – three years.

Do you have any tie-ups with banks to offer mortgage to customers? Any attractive/ special payment structure for buyers, especially NRIs? Our projects are pre-approved by all the major financial institutions in India making it easy for our prospective customers to buy their dream houses. Can you shed some lights about the proposed Indian real estate law? The Real Estate (Regulation and Development) bill, was introduced with the sole of in-

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INDIACORNER

The GCC market has witnessed rapid strides in the past decade with the Gulf residents contributing more than 50 per cent of our international sales. Opening of our office in Dubai is in line with our efforts to provide the best in class service to our prospective consumers.

tention of bringing about a uniform regulatory environment in order to protect consumer interests, help speedy adjudication of disputes and ensure orderly growth of the real estate sector. The bill in its current form has addressed these issues through clearly outlining procedures such as the prior registration of the projects with the Real Estate Regulatory Authority, which will be the nodal agency for conducting the necessary back ground checks and verifying the credibility of the developer and the project. Mandatory registration for projects, only after having received all approvals from development/municipal authorities will boost investor confidence and also protect buyer

interests.

So what prompted you to enter the GCC market? Has the Dubai representative office started functioning? The GCC region has experienced historic growth that has contributed to the overall prosperity of the region and Non-resident Indians (NRIs) constitute 30 per cent of the population. Its importance is gauged by the fact that the GCC region now contributes more than 50 per cent to our international sales. The share of overseas in our total sales pie is also increasing. Currently, NRIs contribute between 15 to 20 per cent of our total sales and this has been increasing since the last few years. We

expect this to increase to 25 to 30 per cent in the next 3 to 4 years. Therefore it is important for us to stay connected to the GCC market. Which category of NRIs is buying more: The investor or the end-user? We have received an overwhelming response from both investors and end users How much does international sales contribute to Tata Housing’s annual revenues? How much of international sales does Dubai/UAE account for? With the opening of our Dubai office, the company will reach out to NRIs who constitute more than 30 per cent of the population in UAE.

Do you have special marketing strategies to cater to this NRIs? The company had recently announced a limited period offer ‘Happy Returns’ to celebrate the opening of its international office for NRIs. Under the scheme, the customer was entitled to get 72,000 – 1000,000 Jet Privilege Miles on the purchase of a home across the Tata Housing projects in India. This offer was applicable to any customer living outside of India with a valid non-resident Indian status including Indian passport holders, those having valid work permits outside India and green card holders. The free miles will be credited to the customer’s Jet Privilege account post realization of 20 per cent payment by the customer. In case, the customer does not have a JP Account, then a new account will be created using the customer’s name and email id and these miles will be credited to him. How has been the response so far for your projects, both back home in India and here in Dubai? We have received an overwhelming response for all our projects from both Indians and NRIs based across the globe. Gulf Property

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SPOTLIGHT

Dubai Holding reshuffles Dubai Properties Group leadership

ubai Holding has recently reshuffled the top brass of its real estate arm Dubai Properties Group. Abdullatif AlMulla has been appointed Group CEO of Dubai Properties Group (DPG), bringing with him over two decades of experience in strategic leadership. AlMulla will oversee Dubai Properties Group’s diverse portfolio and will offer leadership and advisory to the team. AlMulla was Group CEO at TECOM Investments, part of Dubai Holding, where he

Abdullatif AlMulla

helped in the growth of the 11 business communities of TECOM Investments. He was previously CEO of Smart City, which oversees the development and man-

EGBC Chairman Saeed Al Abbar appointed to World Green Building Council

aeed Al Abbar, Chairman of the Emirates Green Building Council (EmiratesGBC) has been appointed to the Board of the World Green Building Council (WorldGBC), a network of national green building councils in over 90 nations. Al Abbar succeeds Adnan Sharafi, who held the post for the past two years as the first Emirati to serve on the Board; and assumed his two-year tenure on July 1, 2015. In his new capacity as board member of WorldGBC, he

Gulf Property

will actively work in promoting the advancement of sustainable buildings in the UAE and MENA region across a global platform. Al Abbar has contributed to projects including masterplanned developments, high rise buildings, housing developments and infrastructure. Al Abbar holds a First Class Masters degree with honours in Mechanical Engineering from the University of Bath and is a Certified Energy Manager, LEED Accredited Professional and Estidama Pearl Qualified Professional.

Naaman Atallah

agement of knowledge clusters and business townships across the globe. He has also served as the General Manager of Microsoft Gulf. Naaman Atallah has been

appointed as the CEO for Dubai Properties (DP). Atallah has over 23 years of experience within the real estate industry. Prior to joining DP, he held the position of Chief Operating Officer for Qatari Diar in Doha, where he managed a portfolio of over 30 projects globally. Commenting on the appointments, Fadel Al Ali, CEO of Dubai Holding, said,“These strategic appointments of industry experts come in line with the business growth plans of DPG, and strengthen its leadership position.”

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SPOTLIGHT

Emaar’s Alabbar launches real estate educational institute

ohamed Alabbar, Chairman of Emaar Properties, recently unveiled plans for the region’s first not-for-profit real estate educational institute to provide world class training for developing a talented pool of senior managers and professionals in the real estate sector. ‘The centre of excellence, to be fully funded by Alabbar, will provide comprehensive training and educational programmes through an integrated approach that covers theoretical and practical training by drawing on realworld case studies’, a statement says. Alabbar seeks to put his knowledge and experience of leading Emaar to serve the UAE real estate sector ‘by mentoring the new gener-

ation of professionals’. In addition to visiting professors from global universities as well as industry experts, Alabbar will personally conduct lectures on a wide range of specialised topics. The institute will target all real estate professionals from across the region including those who work in property development companies and financial entities. It also plans to focus on entrepreneurs as well as professionals from regulatory and governmental entities active in real estate and infrastructure development. In the first phase, the institute will offer short-term training courses covering a wide spectrum of real estate development including sectors such as residential and commercial real estate, retail and hospitality projects.

into the equestrian world. Naamani was previously the Managing Director, Asia Pacific at Pragma Group and Pragma Lifestyle. He possesses more than 25 years of experience in the hospitality industry. He was responsible for the development and expansion of Cavalli-branded properties to develop the Robert Cavalli lifestyle brands and Cavalli Square boutique hotels, and other F&B brands throughout Asia Pacific.

Kamal Naamani

Al Habtoor Group names new hospitality head

l Habtoor Group has appointed Kamal Naamani as Group Director of Operations for its Hospitality and Leisure projects. Naamani, who took up his post in early June, is responsible for overseeing the operations of the company’s portfolio of new developments, including the Group’s multi-use flagship development Al Habtoor City, which will see its first hotel open to the public

later this year. Al Habtoor City will comprise three five-star Starwood-branded hotels (St. Regis, W, Westin), alongside a purpose-built permanent Dragone theatrical production and multiple outlets. Development is also underway for two further projects in Dubai, including the Metropolitan Sheikh Zayed Road, a four-star hotel due for completion in 2016, as well as the St. Regis Dubai Al Habtoor Polo Resort & Club, the Group’s first foray

Gulf Property

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SPOTLIGHT

Jumeirah Golf Estates names new MD for Club Operations

umeirah Golf Estates has announced the appointment of Julian Small as Managing Director, Club Operations. He is to assume responsibilities from September 27. Having an industry experience of over 30 years, Small will be in charge of Jumeirah Golf Estates’ hospitality and leisure offering. During his early career, Small was Banqueting Manager at the London hotel, The Savoy, before he joined Stanhope Properties, a London-based property company, where he led the hospitality, leisure and estate management elements in the regeneration projects in the City of London and Stockley Park, Heathrow. In 1996, Small was appointed as Chief Executive of Wentworth Club. During his tenure, Wentworth hosted over 40 golf tournaments on the European Tour.

Gulf Property

Salem Almoosa honoured

alconcity of Wonders said, the Architectural Heritage Society of UAE has presented its Honorary Membership to Salem Ahmad Al Moosa, Chairman and General Manager of Falconcity, in recognition of his continuous support and efforts in preserving the cultural heritage of the UAE. A delegation from the board of directors of the Architectural Heritage Society of UAE headed by Rashad Bukhash, Chairman of the Architectural Heritage Society, has visited Almoosa at his Ramadan Majlis on June 28, as an appreciation for his efforts in sponsoring cultural heritage events. Apart from the certificate, Almoosa was also presented the latest issues of the Society’s heritage books, thus increasing the number of Honorary Members to 26 including; Prince Charles, the Prince of Wales and heir apparent of British Queen Elizabeth II, and Sheikh Hamdan Bin Mubarak Al Nahyan, UAE Minister of Higher Education and Scientific Research.

Falconcity of Wonders launches advertisement campaign on Dubai Tram

n a bid to promote its residential communities, the management of Falconcity of Wonders have been advertising its products in spots like roadside ad hoardings and gas stations. It has recently tied up with Dubai-based marketing agency Venture Communications to launch an advertising campaign on the Dubai Tram, apparently becoming the first real estate

company to advertise on the public transport system. Venture Communications is promoting Falconcity of Wonders’ ‘Western Residence’ featuring the Aegean, Santa Fe Villa and New World villa communities. The outdoor campaign includes branding on the entire tram, promoting the 10 per cent down payment and owning a home in the Western Residence offer.

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DEWA gets UK accreditation he Dubai Electricity and Water Authority (DEWA) Academy has received a final accreditation for the technical major from the Business and Technology Education Council (Pearson BTEC) in UK. The council has over 21 million students from 46 countries, including the UAE, registered for the academic year 2014-15. “DEWA collaborated with BTEC, a global vocational training organisation, in 2013 to launch the ‘DEWA Academy’ It aims to prepare young female and male Emiratis through theoretical and practical training. DEWA grants graduate students who have completed years of study in its Academy a degree from BTEC,” Saeed Mohammed Al Tayer, Managing Director and Chief Executive Officer of DEWA, said. State-owned DEWA is the sole power and water supplier in Dubai

aeed Al Tayer, recently met Haifaa Al Haddad, an employee from the Marketing and Communication Department at DEWA to emphasise DEWA’s social

he Dubai Land Department (DLD) has concluded the first phase of its Corporate Innovation and Creativity Diploma and the launch of its second phase. DLD has made its Corporate Innovation and Creativity Diploma available to all its employees and has also opened it for colleagues from other Dubai Government departments. Its syllabus is based on training and rehabilitation to recognise the importance of creativity and innovation in the develop-

ment of institutional work. The second phase of the Diploma takes the form of a ‘Creative Laboratory,’ which DLD says is intended to de-

DEWA supports people with special needs

responsibilities and commitment to community development all segments of community, especially people with special needs. DEWA has also won the Princess Haya Award for Special Education (PHASE) for the Outstanding Special Needs Supporter in the Public Sector category.

DLD concludes first phase of corporate diploma programme

fine the orientations of future government operations and highlight how government members can actively participate in the way forward.

SPOTLIGHT

JLL appoints MENA Head of Integrated Facilities Management

eal estate advisory firm Jones Lang LaSalle (JLL) has announced the appointment of Phil Batty as the new Head of Integrated Facilities Management (IFM) for Middle East and North Africa (MENA). Based in Dubai, Batty will be responsible for strategy, operations and new business development for the regional IFM business. Batty possesses nearly 40 years of experience, having held senior operational positions with many of the industry’s leading companies, including Emaar Properties, Knightsbridge Chemicals, Abu Dhabi General Services, Dawn Foods, Johnson Controls and Nestlé. He has managed major assets including Burj Khalifa, the Dubai Mall and the Dubai Fountain. Gulf Property

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SPOTLIGHT

EIPS names new Laban as new GM

loom Holding, the property and lifestyle development arm of Abu Dhabi-based National Holding, has appointed Mohamad Abou Laban as General Manager of Emirates International Property Services (EIPS). In this capacity, Abou Laban is expected to help EIPS grow and expand its operations and services in facilities management, as well as exploring new opportunities and markets. Laban brings over 15 years of experience in business development and project management, with a focus on facilities management in the UAE and Saudi Arabia.

Noor Bank appoints new HR head

oor Bank has announced the appointment of Hind Al Attar as its Head of Human Resources. In her new role, Attar will manage all strategic HR support for Noor Bank. Attar holds 12 years of experience in the field of human resources, with more than seven years at Noor Bank. A UAE national, she has helped recruit and develop financial and related talent of the Islamic bank.Attar has completed varied stints in HR Operations, HR Business Partnership, Emiratisation, Employee Relations and Service Delivery – all within Noor Bank.

Gulf Property

Damac’s FM arm accredited for applying ISO standards

amac’s facilities management arm Luxury Owner Association Management Services LLC (LOAMS), the Association Management firm for all Damac Properties’ buildings, has been accredited by British Standard Institution (BSI) Middle East and Africa for successfully implementing ISO Standard related to Quality Management (ISO 9001: 2008). The quality certification covers main aspects related to management and administration of jointly-owned properties and governance of the owners associations. Luxury Owner Association Management Services

(LOAMS) is the Owners Association Manager for several Damac buildings including Ocean Heights, Park Towers, Marina Terrace, the Waves. “LOAMS joins the handful

of certified association management firms in the region to have a Quality Management System,” Niall McLoughlin, Senior Vice President - Damac Properties said.

Khaleej Palace Hotel, subsequently climbing the career ladder and moving into sales with key positions at a number of hotels in Dubai. Kamal Abou Fares joins as Marketing & Communications Director. Currently

studying for his Masters in Strategic Marketing, Fares is a business graduate of the American University of Beirut and has worked for hospitality chains Radisson and Millennium Hotels in Abu Dhabi and Dubai.

Time Hotels hires executives to boost commercial growth

AE-based hospitality company Time Hotels Management, has announced the appointment of two new senior executives. The hospitality firm presently operates a total of 10 hotels, resorts and hotel apartments in three countries, which it plans to raise to 14 by 2017. Ghassan Farhat joins the Time Ruby Hotel Apartments Sharjah team as Hotel Manager. Farhat, a Lebanese national, has an experience of 23 years in the Dubai hospitality industry. He began his career in the UAE in 1992 as front office manager at Al

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