Gulf property september issue by Gulf Property

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VOL. 9, NO. 12 SEPTEMBER, 2017

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SPECIAL FEATURES Wasl fast expands freehold landscape

GCC project value exceeds Dh8.8 trillion COVER INTERVIEW Sudhakar R. Rao Gemini Property Developers

Danube Properties in delivery mode Land deal value exceeds Dh390 bn in 18 months EXCLUSIVE INTERVIEW Hesham Al Qassim, Wasl Ismail Al Hammadi Al Ruwad Real Estate

Sudhakar Rao: Re-writing the rules in real estate

Energized for Tomorrow

GULF GULF PROPERTY PROPERTY

GULF PROPERTY

Visit Yardi at Cityscape Global 11 – 13 September 2017 Dubai World Trade Center, UAE Stand S3C01

GULF GULF PROPERTY PROPERTY SEPTEMBER 2017

GULF PROPERTY

+ 971-4-4322679 Yardi.com/ae

SEPTEMBER 2017

Centralise your property data to minimise risk and deliver key performance metrics, while using mobile technology to revolutionise interaction with prospects and tenants.

LIVE PARKSIDE WHERE NATURE IS YOUR PRIVATE COURTYARD

Introducing wasl1, an iconic parkside freehold community, on Zabeel Park, in the heart of Dubai.

SEPTEMBER 2017

As a gateway between old and new Dubai, wasl1 keeps you connected to every end of the city, with direct access to main roads and key destinations around Dubai. What’s more, your dream of owning an urban-inspired and centrally-located apartment in one of the luxurious residential towers, nestled amidst Zabeel Park, can be a reality with wasl properties. Register your interest on wasl1.ae Developer name: Park 1 LLC

Developer number: 1203

Project name: Park Gate Residences

RERA No.: 17046

Energized for Tomorrow

GULF GULF PROPERTY PROPERTY

GULF PROPERTY

Visit Yardi at Cityscape Global 11 – 13 September 2017 Dubai World Trade Center, UAE Stand S3C01

GULF GULF PROPERTY PROPERTY SEPTEMBER 2017

GULF PROPERTY

+ 971-4-4322679 Yardi.com/ae

SEPTEMBER 2017

Centralise your property data to minimise risk and deliver key performance metrics, while using mobile technology to revolutionise interaction with prospects and tenants.

LIVE PARKSIDE WHERE NATURE IS YOUR PRIVATE COURTYARD

Introducing wasl1, an iconic parkside freehold community, on Zabeel Park, in the heart of Dubai.

SEPTEMBER 2017

Developer number: 1203

Project name: Park Gate Residences

RERA No.: 17046

Gulf Property Go

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VOL. 9, NO. 12 SEPTEMBER, 2017

bli

EAR S

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

sin ce 2

SPECIAL FEATURES Wasl fast expands freehold landscape

GCC project value exceeds Dh8.8 trillion COVER INTERVIEW Sudhakar R. Rao Gemini Property Developers

Danube Properties in delivery mode Land deal value exceeds Dh390 bn in 18 months EXCLUSIVE INTERVIEW Hesham Al Qassim, Wasl Ismail Al Hammadi Al Ruwad Real Estate

Sudhakar Rao: Re-writing the rules in real estate

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EDITORIAL

Dubai Realty Market Ready for Growth?

The recent reports by Dubai Land Department provides encouraging signs of growth in the real estate market, three years after it had started to slow down

here are ample reasons to believe that Dubai’s real estate market might get a jump-start with the Cityscape Global exhibition that takes place at the World Trade Centre this month. Like every year, the Cityscape works like a barometer for us to guage the industry mood and trend. However, this year, the exhibition takes off with a lot of positive signs at the backdrop. The latest half-yearly land and property transaction report by Dubai Land Department (DLD) shows that the overall land and property transaction value grew 16.8 per cent to Dh132 billion in the first half of 2017, compared to the corresponding period last year. The total number of sales, mortgages and other transactions reached 35,571 from January 1 to June 30, 2017. This includes 25,864 sales transactions worth over Dh63 billion and 7,893 mortgage transactions worth Dh60 billion, while 1,814 other types of transaction brought in Dh9 billion. The other encouraging news happens to be a 680 per cent jump in projects registration to 68 real estate projects, worth Dh21 billion in the first six months of the year. The flurry of project registration and building permit activities was so intense that prompted the government to create a one-stop shop for project registration and obtaining building permits within the shortest possible time. The total value of real estate transactions in Dubai exceeded Dh390 billion across 95,000 transactions in 18 months (1 Jan 2016 – 31 July 2017), DLD said. This is higher than the nominal GDP of 150 countries in the world. This is the most authentic reflection of the current market activities in Dubai’s real estate, that further demonstrates the level of buying and selling activities in the emirate. The latest report is also very significant – as much as Dh113.6 billion or 75.23 per cent of Dh151 billion investment in Dubai’s real estate were concluded by foreigners in 18 months from January 2016 till June 2017, while the rest or Dh37.4 billion or 24.77 per cent pumped in by the UAE nationals, Dubai Land Department says. UAE nationals topped the overall list of investors registering Dh37.4 billion investment, followed by Indian nationals investing Dh20.4 billion, while Pakistani investors injected Dh7 billion. Gulf Property completes its 9th year of uninterrupted publication in what could be best described as the most challenging times in the history of real estate in Dubai. Despite the hardship, Gulf Property did not close or stop publishing regular issues. We continued our journey through the thick and thin. Our gratitude to our readers, advertisers and our well-wishers! I take this opportunity to congratulate and thank our small, but efficient team!

– T. Akhtar

COVERSTORY

CONTENTS

INTERVIEWS

Hesham Al Qassim, CEO of Wasl, elaborates his company’s project development 58

Are developers over-building in Dubai, asks Ismail Al Hammadi, MD of Al Ruwad Real Estate 66

EXECUTIVEOPINION

Christine Lagarde/IMF 32 Noorul Asif/Schon 33 Dhiren Gupta/Mortgage 4C 35

FOCALPOINT

PROJECTNEWS

Danube starts delivering projects

NEWSUPDATE

Real estate sector shows vibrancy with 16.8% growth 36 Dubai economy braces for stronger growth 42

COVERSTORY

Gemini changes the property buying and selling game with game-changing plans 48

INTERVIEW

GCC construction project value exceeds Dh8.8 trillion 76

REGULARFEATURES Realty Bytes

GULF PROPERTY

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

EDITORIAL

EDITOR T. Akhtar editor@panasian1.com

EDITORIAL COORDINATOR Zeba Malik z.malik@panasian1.com

PUBLISHER

T. Akhtar Pan Asian Media MFZ LLC

LICENCE

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

EDITORIAL AND COMMERCIAL ADDRESS

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Gulf Property

REALTYBYTES

Fire damages Torch Tower, again

ire broke out on the 86-storeyed Torch Tower at 2am on Friday, August 4, 2017, and destroyed 38 apartments, forcing most of the residents to run for their lives six years after they had moved into their dream homes that turned out to be more of a nightmare – twice within two and a half years – following the first fire incident taking place in February 2015. Residents ran for their lives at the wee hours on Friday, soon after the fire broke out, social media footage showed as flames spread up much of building and burning debris falling down. The fire is believed to have started on the ninth floor before ascending towards the top stories. Residents were safely evacuated without any major casualties. Dubai Civil Defence reported that 475 people had been successfully evacuated with no casualties. An investigation is now under way into the cause of the fire, which started on the 26th floor of the building. Authorities said the fire had damaged 38 apartments over 64 floors, up to the 85th. The 86-story skyscraper opened in 2011, and it was the world's tallest residential building at its opening The Torch Tower, developed by Select Group, is said to be the 32nd tallest building in the world, according to the Skyscraper Centre. It has 676 apartments. g

Gulf Property

Consumer spend to hit $261 bn by 2021 At A Glance

$75.7 billion

worth of spending in housing sector expected in the UAE by 2021

$24.8 billion worth of spending in F&B sector expected by 2021

Housing sector to drive consumption in the UAE

onsumer spending in the UAE that reached $183 billion in 2016, is forecast to rise at a compound annual growth rate (CAGR) of 7.5 per cent over the next five years to exceed $261 billion in 2021, Dubai Chamber of Commerce and Industry said in a report. The report, based on recent data from Euromonitor International, revealed that consumer expenditure per household during 2016 was highest in the UAE when compared to other GCC countries, amounting to around $103,000, followed by Bahrain ($96,000). Housing was identified as the top spending category for UAE consumers with $75.7 billion recorded for 2016, accounting for 41 per cent of total consumer expenditure during the year. Food and beverages was the secondlargest category with $24.8 billion spending during the same year, followed by transport, worth $16.7 billion.

“The UAE‘s consumer market is largely being driven by a fast-growing population with relatively high incomes, which are key economic fundamentals that support a robust long-term outlook for spending growth in the country,” Hamad Buamim, President and CEO of Dubai Chamber, said. He said, the UAE’s predominantly young and diverse population is attracting the interest of international brands and a growing number of e-commerce companies that are targeting tech-savvy consumers. The country’s booming tourism market continues to drive consumer spending, especially within the retail, hospitality and transport sectors. Several new mega developments are expected to be completed over the next four years in the UAE, which should enhance and diversify the country’s mix of retail and entertainment offerings, and further capitalise on the expected growth in consumer

$16.7 billion

worth of spending in transport expected by 2021

spending, he added. Communication is the fastest-growing category for UAE consumer spending with a CAGR of 10.2 per cent expected through 2021. This trend is likely be supported by the high penetration of smartphones. The growing popularity of mobile applications, and Dubai’s adoption of smart city solutions are also expected to boost spending in this area. Health goods and medical services is the second fastest-growing category for spending with a CAGR of 8.2 per cent over the same period, followed by hotels and catering. Education and leisure are projected to grow at 8.0 per cent and 7.7 per cent, respectively. The analysis showed that consumer spending accounted on average for about 45 per cent of the UAE’s GDP, compared to a 39 per cent average for the GCC region, 45 per cent for developing Asia, 56 per cent for the EU, and 68 per cent for the United States. g

REALTYBYTES At A Glance

Dh327 billion

value of Dubai’s non-oil trade recorded in Q1 of 2017

Dh201 billion value of Dubai’s non-oil imports in Q1 of 2017

Dubai non-oil trade hits $89.1 bn in Q1

ubai’s non-oil foreign trade grew 2.7 per cent to US$89.1 billion (Dh327 billion) in the first quarter of 2017 compared to Dh318 billion in the same quarter of 2016, according to data published by Dubai Customs. Crown Prince of Dubai and Chairman of the Dubai Executive Council, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, said, “Dubai has been able to offset the impact of key challenges including major currency fluctuations and slower global economic growth, and increase its nonoil foreign trade as well as cement its position as a regional and global business hub. We seek to enhance the UAE’s competiveness by developing commercial and customs services that bring significant financial benefits for all those that choose Dubai as a hub for their oper-

ations.” Imports accounted for the lion’s share of non-oil foreign trade at Dh201 billion (3% growth) while exports accounted for Dh35 billion and re-exports Dh91 billion (5% growth). The volume of Dubai’s external non-oil trade reached 24 million tonnes, while imports reached 15.84 million tonnes, re-exports 4.24 million tonnes, and exports 3.84 million tonnes. Direct trade grew 3.5% to Dh209 billion in the first quarter of 2017, while Free Zone trade accounted for Dh108.5 billion. Meanwhile, Dubai’s non-oil foreign trade conducted through land transportation grew 14.7 per cent to reach Dh61 billion in the first quarter while sea trade accounted for Dh118 billion, and air trade reached Dh147.3 growing 1.1 per cent. DP World Group Chairman and CEO and Chairman of Ports, Customs and Free

Zone Corporation, Sultan Ahmed bin Sulayem said, “We won the first place on the happiness index last year scoring 96.2 per cent, and this is evident in the volume and results of 2.329 million declarations carried out during the first three months of 2017 and 9.1 million declarations done in 2016.” Asia topped the list of markets that conduct non-oil trade with Dubai, accounting for business worth Dh208 billion in Q1 2017. Europe came second with Dh54 billion, Africa third at Dh32 billion, North America fourth at Dh25 billion, South America fifth at Dh4 billion, and Oceania including Australia sixth at Dh3 billion. China maintained its position as Dubai’s biggest partner in Q1 2017 with Dh44.15 billion worth of trade or 13.5 per cent of the total value, followed by India with Dh25.4 billion representing 7.8 per cent of Dubai’s total non-oil

Dh91 billion

value of Dubai’s non-oil reexports in Q1 of 2017

Dh208 billion

value of Dubai’s non-oil trade with Asia in Q1 of 2017

Dh45 billion

worth of cell phones were imported and re-exported in the first quarter of 2017

foreign trade, while the USA came third with a total Dh22 billion or 6.7 per cent of total trade. Saudi Arabia is Dubai’s leading business partner among GCC and Arab countries, and its fourth biggest trade partner, with business worth Dh15.22 billion, representing 4.7 per cent of Dubai’s total trade. Mobile phones topped the list of high-value commodities in Dubai’s foreign trade, in the first three months of 2017, with Dh45 billion (14% of total trade). This supports Dubai’s transformation into the world’s smartest city and its growth as a major regional and global trading hub for ICT products. Next on the list was gold with Dh39 billion (12% of total trade), followed by diamonds at Dh26 billion (8% of total trade). Vehicles came fourth at Dh18 billion (5% of total trade), followed by jewellery at Dh15 billion (5% of total trade). g Gulf Property

REALTYBYTES

Shuaa buys 8% of Amwal

huaa Capital, the UAE’s premier integrated financial services firm, said, it has acquired 8 per cent stake in in Kuwait-based Amwal International Investment with 14,491,378 shares. Furthermore Gulf Finance Corporation, a Shuaa Capital subsidiary, owns circa 3 per ent of Amwal. Amwal is a Kuwait-listed investment firm whose primary investment includes a 51 per cent stake in Noor Capital Markets, an online trading platform providing access to clients seeking to invest in CFDs (Contracts for Difference), Futures, Metals and Currencies. Commenting on the investment, Fawad TariqKhan, General Manager of Shuaa Capital said: “This is one of several strategic investments that build upon SHUAA’s evolution strategy, and helps take the region’s financial services landscape to a new level. We see potential for great value in Amwal and synergies between our capital markets offering and access to Noor Capital Markets trading platform.” Shuaa Capital has been expanding its capital markets platform through acquisition of Integrated Securities and Integrated Capital as well as expanding its offerings to clients. Shuaa is the most active Market Maker in the UAE and recently announced its support of the Nasdaq Dubai Futures Market which recorded a 76 per cent jump in trade. g

Gulf Property

Dubai records 8 mn hotel guests in H1 UAE’s financial buffers and robust policy responses facilitate adjustment to market realities

record total of 8.06 million international overnight tourists arrived in Dubai during the first six months of 2017, reflecting a stellar 10.6 per cent increase over the same period last year, says Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism). India continued to top the list of traffic generators, for the first time crossing the 1 million mark over a six-month period with 1,051,000 Indians visiting the city between January and June, up 21 per cent over the same period last year. Saudi Arabia and the UK retained their spots as the second and third largest feeder markets respectively, with the former rallying to stabilise in June despite facing economic challenges in 2017. “Almost all of Dubai’s top 20 inbound visitor source markets saw positive or near stable year-on-year performances in H1 2017, with five of the top 10 delivering stand-

out double-digit growth,” Dubai Tourism said. “The strategic impetus of recent regulatory changes granting citizens from China and Russia free visa-on-arrival access to the UAE was evident in the continued growth peaks being delivered from these markets as they topped the charts with 55 per cent and 97 per cent increases respectively over the first six months of 2016. “As a result, China delivered 413,000 visitors to end H1 2017 in fifth place, and Russia cemented its return to the top 10 with 233,000 visitors. The USA continued its resurgence to end mid-year up 6 per cent in sixth place, followed by Pakistan up 11 per cent in seventh, Iran up 27 per cent in eighth, and Germany up 6 per cent in ninth spots respectively.” From a regional perspective, Western Europe contributed 21 per cent of the overnight visitor volumes, maintaining its pole position from earlier in the year, re-

flective of Dubai Tourism’s strong international destination marketing efforts aimed at driving consideration from a wider spectrum of European market segments. South Asia, meanwhile, delivered a robust 18 per cent share, making it the number three regional contributor, followed by the MENA region in fourth place with a stable 12 per cent share. Rounding off the regional mix and reflecting the continued diversity of Dubai’s visitation base, the Americas contributed 6 per cent in volumes, Africa 4 per cent and Australasia the final 2 per cent for the period from January to June 2017, largely similar to their proportions in 2016. Spread across a total of 676 establishments, Dubai’s hotel room inventory stood at 104,138 at the end of June 2017, up 5 per cent compared to the same time last year. Occupied room nights were also up, totalling 14.53 million compared to 13.77 million in H1 2016. g

Abu Dhabi to build affordable homes

ow-income families and bachelors in Abu Dhabi will have access to cheaper accommodation under an initiative from Abu Dhabi Municipality. Abu Dhabi Government’s Department of Municipal Affairs and Transport announced the development of high-quality and affordable accommodations for low-income groups at rents ranging from Dh917 ($250) to Dh1,563 ($425) per month. The initiative also offers an investment opportunity for commercial property developers in the city to construct new buildings or convert their existing properties into residential units for low-income residents. The housing scheme is expected to eliminate congested bachelors’ accommodation with Abu Dhabi Municipality targeting two categories of occupants. The first is low-income segment earning a monthly income of Dh4,000 to Dh6,000

Dh917

lowest monthly rents planned in Abu Dhabi whose rents will range between Dh1,400 and Dh2,100 per month. So individuals with an annual income ranging from Dh48,000 to Dh72,000 will be offered annual rent ranging from Dh16,800 to Dh25,000. The second category is bachelors with fixed incomes. Those earning Dh2,00 to Dh4,000 a month will pay rents from Dh700 to Dh1,400 per month. Their annual rent will vary from Dh8,400 to Dh16,800 for those whose annual income is in the range

of Dh24,000 to Dh48,000. The rental value is calculated at a rate not exceeding 35 per cent of the individual’s total income; with consideration given to the number of occupants, according to statement from Abu Dhabi Municipality. Musabbah Al Murar, Acting General Manager of Abu Dhabi Municipality, said, “This initiative aims to provide proper and legal options of residential units befitting the financial means of low-income individuals and at the same time open an investment opportunity to owners of commercial properties in Abu Dhabi emirate. “The initiative is in line with the vision of Abu Dhabi Government aimed to provide all means of decent and stable living for all spectrums of the community. It will also offer support to fixed income groups by availing them accommodation at affordable rents that commensurate with their annual income levels.” g

REALTYBYTES

Abu Dhabi grants Dh2.4bn housing loan

he Abu Dhabi government has announced plans to issue new batch of housing loans worth Dh2.4 billion ($653 million) to 1,250 beneficiaries in the emirate as part of its initiative to provide all the necessities of a dignified living and appropriate housing to its citizens, said a report. The new batch of loans will cover the needs and demands of citizens to build their homes or to rebuild in different areas of Abu Dhabi, reported state news agency Wam. The confirmed batch will include 600 loans in new areas, with 400 loans for completing buildings in existing areas, 150 for the purpose of tearing down and rebuilding, 80 for maintenance and expansion, and 20 for maintenance only, it stated. In another development, a total of 625 beneficiaries have been selected to receive housing assistance worth Dh417 million under the Sheikh Zayed Housing Programme. Dr Abdullah bin Mohammed Belhaif Al Nuaimi, Minister of Infrastructure Development and chairman of the programme, said, "This underscores the leadership's commitment to bring joy to citizens on the happy occasion and the government's persistent efforts to improve the quality of life for citizens," he added. g Gulf Property

REALTYBYTES

DEWA awards Dh129m contracts for transformers

ubai Electricity and Water Authority (DEWA) has awarded contracts to design, manufacture, test and supply 1,570 cast resin distribution transformers, with capacities of 11/0.4kV, and 1,000 and 1,500 kVA equipped with low-voltage smart meters, to a number of leading specialist international institutions. This is part of Dewa’s ongoing efforts to meet various requirements to expand the electricity distribution network, and provide its services reliably, efficiently and availably to world-class standards. The contracts are worth approximately Dh129.55 million. In a statement, Saeed M. Al Tayer, Managing Director and CEO of Dewa, said that the authority is implementing vital projects. “Dewa focuses on availability, reliability and efficiency in all its services, and is proactively developing and improving all its processes to achieve excellence in everything it does,” he said. “These transformers will increase the capacity, efficiency and reliability of the electricity distribution network in Dubai, to ensure a continuous and stable supply of power to all stakeholders. All the transformers will be delivered by April 2018,” Al Tayer concluded. g

Gulf Property

Dubai records 275m public transport trips

ubai’s p u b l i c transport service providers recorded 275.77 million trips during the first half of 2017, up from 273.45 million recorded for the corresponding period last year, a statement by the emirate’s Roads and Transport Authority (RTA), said. On an average, more than 1.5 million passengers used public transport per day, RTA said. Public transport services in Dubai includes metro rail, tram, public buses, marine transit modes (abra, ferry, water taxi, water bus) and taxicabs (Dubai Taxi and franchise companies). Dubai Metro led the public transport service, serving 36.4 per cent of the public transport passengers, followed by taxicab services with 31.7 per cent ahead of public buses finished third with 28 per cent.

Dubai Metro lifted 100.55 million customers in the first half of this year, compared with 96.48 million served in the first half of 2016. The Red Line was used by 64.37 million passengers, and the Green Line was used by 36.18 million commuters. Dubai Tram has lifted 3.08 million people compared with 2.53 million during the same period last year. The public buses have served 77.69 million commuters during the first half of this year, compared with 69.92 million passengers during the same period last year. Marine transit modes, comprising abra, water bus, water taxi and ferry, have lifted 6.63 million people. Taxis (Dubai Taxi, Hala Taxi and Franchise companies taxis) have lifted 87.79 million passengers in the first half of

2017, compared with 85.19 million passengers served during the same period of 2016. public “The transport means have now become the backbone of people mobility in various parts of Dubai, and the preferred transit option for a huge segment of Dubai residents and visitors,” Mattar Al Al Tayer, Director-General and Chairman of the Board of Executive Directors of RTA, said.. “The huge and diverse projects undertaken by the RTA have contributed to the sustained increase in public transport ridership that has leapfrogged from 6 per cent in 2006 to 16 per cent in 2016, and if we add taxis, the share would shoot to as high as 24 per cent. RTA is endeavouring to push the share of public transport (metro, tram, buses, and water transport) to 20 per cent by 2020, and 30 per cent by 2030,” explained Al Tayer. g

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RTA spends Dh1 bn on infrastructure

ubai Governmentâ&#x20AC;&#x2122;s Roads and Transport Authority (RTA) has completed 85 per cent of Parallel Roads Improvement Project - Phase 1 (Godolphin District). The two bridges crossing over the Dubai Water Canal had been accomplished and all construction works under this Phase would be completed in the final quarter of 2017. The project, which comprises two phases, costs about Dh1 billion. Mattar Al Tayer, DirectorGeneral and Chairman of the Board of Executive Directors of RTA, says, "The objective of the project is to mitigate the traffic density on the Sheikh Zayed Road (between Interchange 1 and 2) by 15 per cent. It provides additional entry/exit points to the Business Bay and Burj Khalifa District with a capacity to handle 20,000 vehicles per hour in both directions. It

would also step up the capacity of the Meydan Road, and cut down the journey time between the Sheikh Zayed Road and Al Khail Road from 12 minutes to about 2.5 minutes," Mattar Al Tayer, Director-General and Chairman of the Board of Executive Directors of RTA, said following an inspection of the progress of the road works.â&#x20AC;? Phase 1 of the project, which costs about Dh578 million, encompasses the construction of a 3.5 km-long flyover comprising 3 lanes in each direction crossing over the Dubai Water Canal. The number of lanes increases to 5 in each direction above Godolphin Stables and Al Meydan Road up to Al Quoz Industrial Area. It also includes upgrading the existing junction of Al Meydan Road and Al Khail Road where flyovers will be constructed to provide left turns and ease the existing overlapping of

traffic movement, which would reduce the congestion at the junction during peak hours. The project also includes the construction of a 2-lane bridge to serve the traffic inbound from Al Khail Road in the direction of Sharjah to Al Asayel Road up to the junction with Oud Metha Road. It also includes providing entry and exit points for Meydan Development Project. The project also includes the construction of 4 tunnels extending 1,150 meters. It also includes improving and shifting the utility lines in the area as well as carrying out lighting and signage works. In the second quarter of 2016, RTA started construction works in the Parallel Roads Project - Phase 2 at an estimated cost of Dh336 million. This Phase encompasses the improvement of the western part of the Parallel Roads between Al Meydan and the Financial Centre

Roads across the Business Bay district. Lane capacity will range from 3 to 4 lanes in each direction. The project includes the construction of a 240-meter flyover at the intersection of Al Saada and Burj Khalifa Boulevard Roads, and a 535-meter tunnel at the intersection of Al Saada and Business Bay Roads. Works include a 500-meter bridge at the extension of Al Saada Road crossing over the Dubai Water Canal (completed with the opening of the Dubai Water Canal). It also includes the construction of a 420-meter bridge at the intersection of Al Meydan and First Al Khail Roads, a 420-meter tunnel to ensure leftward turn from Al Saada Road to Al Meydan Road, and a 340-meter underpass for horses crossing at Dubai Stables. The project works include improving and shifting utility lines as well as lighting and signage works. Works in Phase 2 of the project are set for completion in mid of 2018. The Parallel Roads Project is one of the vital projects currently undertaken by the RTA to ease the congestion on Sheikh Zayed Road. This traffic corridor, which comprises 3 lanes in each direction, extends 108 kilometres from Sheikh Rashid Road in the north up to the entrance of Abu Dhabi. The project covers the construction of bridges and at-grade junctions at the intersections of parallel roads with the crossing roads extending 42 kilometres. The entire project constitutes a traffic hub supporting the Sheikh Zayed Road and Al Khail Road, and upon completion of all phases, it would ease the traffic movement in the area parallel to the Sheikh Zayed Road to the East. g Gulf Property

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Araco to build affordable homes in Abu Dhabi

bdul Rahim Architectural Consultants (Araco), a leading engineering consultant in design and project management in the UAE, has been selected from more than 40 firms to provide design and consultancy services for Abu Dhabi Housing Authority’s (ADHA) Bayti initiative, which streamlines the process of building homes for Emirati nationals. Launched in late 2016, the Bayti initiative reduces the time taken for Emiratis to design and approve a house from 3 months to only three weeks. Houses are constructed in 58 architecturally and structurally pre-approved exteriors – of which Araco designed 12 – with modular interiors adaptable to the needs and size of each individual family. Full construction of each house can be completed within two years, with the process reducing consultant’s fees to 3 per cent, instead of 4 per cent or higher. The designs are approved by authorities, including municipalities, to make the process of construction smoother and more convenient for Emiratis granted a loan for housing in the emirate of Abu Dhabi. Up to 3,000 loans are approved each year and houses are permitted for construction in Abu Dhabi city, Al Ain and the Western Region. g

Gulf Property

One-stop shop for building permits

ubai Government is planning to create a ‘one-stop shop’ to speed up building permits and reduce project delivery time for developers – as the emirate sees a strong interest in property developers ahead of the World Expo 2020. Dubai Land Department has registered 68 real estate projects in the first six months of 2017 – compared to 20 in the 12 months of 2016 – recording a 680 per cent growth. This necessitates a fast-track permission and registration process by reducing red-tape. His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai, has approved the new strategy for building permit procedures development in Dubai, which will ensure speeding up the process of building permits from concerned government

entities according to the Emirates News Agency (WAM). The new strategy, set up by Dubai’s Committee for Building Permit Procedures Development, aims to enhance Dubai’s prominent positioning as a city where the active building and construction sector plays an important role as key component of the economic development. The strategy is built upon three pillars, first developing and streamlining building permit procedures, then unifying systems while the last one provides a ‘one-stop shop’ where all the procedures and building permits processes in Dubai can be completed. Daoud Abdul Rahman Al Hajri, Assistant Director-General of Dubai Municipality, said that the new strategy reflects the vision of Sheikh Mohammed bin Rashid Al Maktoum, aiming to enhance customers’ happiness and save them time and efforts to

create a stimulating environment that promotes Dubai’s infamous investment climate. As for the strategy preparation process, Al Hajri noted that since its formation in February 2017, the committee held several meetings and workshops with the concerned stakeholders to discuss the various details of acquiring building permits. The committee has simplified the procedure to just five steps to be done within three days through smart services through one window and on the phone, where customers (consultants, contractors, owners and developers) could follow up on the status of their permit request, pay fees and insurance and book appointments. The one stop shop will be linked to Dubai Building Permit System, which will include the requirements of all the authorities involved in the permitting process in Dubai. g

Tecom to develop Dh5bn business park

ecom Group, a member of Dubai Holding, said, it will develop and operate a Dh5 billion Emirates Towers Business Park. The Group has appointed Fareed Abdulrahman Al Janahi as Chief Executive Officer of the development. Tecom Group's announcement follows Dubai Holding's recent launch of Emirates Towers Business Park after the project’s model and its main components were presented to His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. Tecom Group will develop and manage the project that is located in close proximity to Emirates Towers, in collaboration with DIFC, which will provide a legislative environment with international standards of governance and transparency. The new business hub will offer a wide range of office space for in-

ternational companies looking to move or expand their business in the region. The business park will also include three luxury five-star hotels, retail areas featuring a range of international brands and F&B options, a dedicated arena for events and ancillary facilities to support corporates. Dr Amina Al Rustamani, Chief Executive Officer of Tecom Group, said: “The launch of the project comes at an opportunistic time when the real estate market in Dubai is witnessing a clear growth in demand for premium commercial and office space. “Reports indicate that this growth will continue to increase in the following years. Premium commercial space accounts for 20 per cent of the total business space currently available in Dubai, with an occupancy rate of 92 per cent. The growing demand for distinguished business space is evidence that Dubai remains a preferred destina-

tion for key international and regional companies, given the Emirate's strategic location and business-friendly environment.” Tecom Group is a strategic supporter of business and contributes to the realization of Dubai’s economic aspirations by developing and operating specialized business communities, as well as providing smart and innovative solutions that enhance the growth and success of its partners. Tecom Group's business communities support Dubai's position as a global business and trade hub, attracting a select group of qualified companies from around the world. It is a regional hub for more than 5,400 organisations, including international companies such as Google, CNN, Dell, and Unilever. Communities of Tecom Group are home to workforce estimated at 86,300 creatives and professionals. g

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UAE’s FM market to hit $12.5b in 2017

AE’s facilities management (FM) market size rose to US$12.49 billion in 2017, a latest research report says. The market will continue to grow due to the growing supply of freehold properties. The sector will grow further due to a number of factors including new home deliveries that are expected to see an increased number of families moving in to their freehold homes – that will require facilities management services as well as increased office space supplies. Overall, the $629 billion worth of UAE based construction contracts will help the sector to grow further every year. Expected to be completed by 2021, these projects will call the facilities management industry into widespread action and push its value beyond $17 billion by 2021. The news comes ahead of the biggest dedicated FM show in the region, FM EXPO 2017 will be held from 25-27 September at the Dubai World Trade Centre. Both local and international exhibitors will showcase the latest products and solutions. “The FM industry really has a great opportunity to gain momentum on the back of mounting construction projects in the UAE,” says Alexis Wheatley, FM EXPO Event Director. g Gulf Property

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Majid Al Futtaim’s H1 profits up 4% to Dh2 bn

ajid Al Futtaim, the leading shopping mall, communities, retail and leisure pioneer across the Middle East, Africa and Asia, reported a 4 per cent growth in its earnings before interest, tax, debts and amortisation (EBITDA) to Dh2.0 billion during the first six months of 2017 with overall group revenue expanding by 4 per cent to Dh15.7 billion. “At constant FX rates, overall group revenue would have grown by 12 per cent and EBITDA by 9 per cent. The difference can be largely attributed to the EGP devaluation that occurred in the last quarter of 2016. The company continues to maintain a strong balance sheet with total assets valued at around Dh56.1 billion and a net debt of around Dh9.6 billion,” a company statement said. The company invested in Fetchr, a last mile delivery start-up that allows customers to drop off their purchases at designated points and have them delivered to their home. Majid Al Futtaim’s acquisition of Retail Arabia is a major milestone – one that further cements Carrefour’s position as the largest grocery retailer in the region. Through both organic and inorganic growth, the company continues to pursue acquisitions in line with its strategy. g

Gulf Property

Sohar to get RO45m shopping mall

The secondary market is not recovering due to large amount of existing stock, the report says

ajid Al Futtaim — the Dubai-based shopping mall, communities, retail and leisure project developer and operator – said it will develop City Centre Sohar with an investment of 45 million Omani Riyals. The mall, located in the Northern Governorate’s historic capital Sohar, is due to open in late 2018. "As part of Majid Al Futtaim’s growth strategy, we aim to be at the forefront of Oman’s rapid development in the retail industry and bring the best shopping, food & beverage and entertainment experiences to Sohar with this contemporary urban project,” said Ghaith Shocair, Chief Executive Officer Shopping Malls, Majid Al Futtaim Properties. “By introducing our renowned City Centre brand to Sohar, we will be enhanc-

ing the city’s retail landscape with more than 130 diverse stores, a 8,400 square metres Carrefour Hypermarket, a nine-screen VOX Cinemas, in addition to an array of dining and entertainment options.” With an investment of OR45 million, City Centre Sohar, conveniently located on Batinah Highway, will add 40,000m2 of gross leasable area to the Sultanate’s booming retail sector. Sohar, a port city and major industrial hub, has seen substantial economic growth in recent years, which Majid Al Futtaim is keen to contribute to. The construction contract for City Centre Sohar has been awarded to the Omanbased company Al Turki Enterprise and the work will commence in November 2017. City Centre Sohar has set a target to achieve LEED

Gold status – the coveted energy-efficient design certification – within three months of opening. This will include implementing sustainable building best practice with enhanced insulation, LED lighting and solar panels that will contribute to the centre’s energy requirements. Furthermore, condensation from air-conditioning and ventilation systems will be used for irrigation. In addition to City Centre Sohar, Majid Al Futtaim owns and operates the newly upgraded City Centre Qurum, as well as City Centre Muscat, which recently underwent an OR27 million expansion. Another mall My City Centre Sur is also in the pipeline, as is Mall of Oman, set to be the Sultanate’s biggest shopping centre, representing an investment of OR275 million. g

Emaar Malls report Dh1 bn profits in H1

maar Malls said it recorded a net profit of Dh1.021 billion in the first half of 2017, reflecting an increase of three per cent over the corresponding period last year. In a statement, the shopping malls and retail business majority owned by Emaar Properties reported Dh1.624 billion revenue during the January-June 2017 period compared to Dh1.618 billion in the same period last year. Emaar Malls' net profit during the second quarter (April to June) of 2017 rose five per cent to Dh482 million from Dh458 million in the same quarter last year. Emaar Mall assets - The Dubai Mall, Dubai Marina Mall, Souk Al Bahar, Gold & Diamond Park and community shopping centres - welcomed over 65 million visitors during the first six months of the year, an in-

crease of seven per cent over H1 last year at 61 million. The Dubai Mall, the flagship asset of Emaar Malls, recorded a visitor footfall of 39 million in H1 2017. With a gross leasable area (GLA) of six million sqft, GLA occupancy levels across Emaar Malls' assets averaged 95 per cent during the first half of 2017. Mohamed Alabbar, chairman of Emaar Malls and Emaar Properties, said retail is a key contributor to the national economy, and with the fast-evolving changes in the sector. "We are marking strategic expansions and investments to create sustained value for our stakeholders. The strong performance of Emaar Malls is highlighted by the diversity of retail choices and leisure attractions at our malls,â&#x20AC;? he said. The company distributed 10 per cent of its share capi-

tal, equivalent to Dh1.30 billion, as cash dividend to its shareholders earlier this year. Emaar Malls entered an agreement to acquire 51 per cent stake in Namshi, an online fashion retailer in the Middle East, and formed a partnership with fashion ecommerce platform Global Fashion Group to accelerate Namshi's development in the region. Emaar Malls will support the company to access additional fashion brands, develop its logistics infrastructure and expand its geographical footprint. In key growth initiatives, the expansion of Fashion Avenue in The Dubai Mall, which will have another one million sqft of built-up area delivering over 600,000 square feet GLA, is in the final stages. This will add over 150 international brands, F&B and leisure outlets to The Dubai Mall. g

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Dubai Mall to link to new Vida hotel

maar Hospitality Group, the hospitality and leisure subsidiary of Emaar Properties, announced Vida Dubai Mall, a new hotel project linked directly to The Dubai Mall. Opening to direct views of the iconic Burj Khalifa, Vida Dubai Mall is a twotower development with the 195-room Vida Dubai Mall hotel and 614 serviced residences under Vida Residences Dubai Mall. The hotel and 380 serviced residences form part of a 55-storey tower, while the rest of the serviced residences are located in a second tower, 38 storeys high. The two towers are linked by a 7-storey podium with a wide range of amenities including restaurants, retail and leisure attractions. The podium-level amenities include a swimming pool, sunbathing deck and events spaces. This marks the tenth upcoming hotel project â&#x20AC;&#x201C; in the UAE and international markets by Vida Hotels and Resorts, a refreshingly different upscale lifestyle hotel and serviced residences brand for the new generation of business executives, entrepreneurs and leisure travellers. Vida Hotels and Resorts already has two operational hotels in Dubai with seven upcoming projects, including Vida Dubai Mall, in the UAE and three in Saudi Arabia, Bahrain and Egypt. g Gulf Property

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Manazel H1 profits jump 81% to Dh56m

anazel Real Estate, an Abu Dhabi-based property developer, reported an 81 per cent jump in net profits to Dh56.5 million in the first six months of 2017, compared to Dh31.2 million in H1 2016. Consolidated revenues for the period were up 54 per cent to Dh412 million, compared to Dh267 million in H1 2016. During 2017 the company focused on its Al Reef 2 project, which consists of 860 villas located in Samha, near Kizad and Khalifa Port in Abu Dhabi. The construction of the Al Reef 2 project has been accelerated and Manazel expects to deliver the first phase of this development in Q4 2017. Manazel continued its strategy of diversifying into high growth sectors which is highlighted by its undertaking of unique projects, such as the Ghantoot Waterfront Project, and its entry into the healthcare market with its project The Manazel Medical City Complex that is spread over approximately 73,000 square meters and is a fully integrated medical city. The complex will comprise of a range of specialsed healthcare facilities. Manazel has also been successful in growing recurring income which comes from its malls, retail units and district cooling assets generating stable and recurring revenue streams. g

Gulf Property

Accounting error wipes out Dh2.8bn! Motor City

he new board of Union Properties, developer of Dubai’s Motor City, has ordered a forensic investigation on possible accounting errors that wiped out Dh2.8 billion in property valuation and resulted in a US$624 million (Dh2.3 billion) net loss for the second quarter of 2017, compared to $19.53 million (Dh71.7 million) net profits recorded in the corresponding period last year. “Following a thorough accounting review and in the long-term interests of the company, UP’s new management team has taken the decision to book provisions totalling Dh2.8 billion,” the company said in a statement. “The provisions reflect the new management team’s prudent approach to risk and in its treatment of unbuilt or floating Gross Floor Area

(GFA) from an accounting standpoint. The provisions have resulted in a net loss of Dh2.3 billion for the three months to June 30, 2017.” The move has been approved by the company’s board of directors, that took over in May 2017 and communicated to the regulator and UP shareholders. Following the appointment of UP’s new board and senior management in May 2017, an in-depth investigation of accounting practices within the company dating back to 2013 was initiated. As part of this process an external forensic investigation was commissioned in August 2017. The investigation examined the validity of the Dh503 million fair value gain applied to the unbuilt gross floor area (Unbuilt GFA) on a plot of land in Motor City, where UP was the master developer. The gain was recognised in

the audited financial statements for the year ended 31 December 2015, the statement said. The plot of land which included a partially built hotel was sold to another real estate developer in 2013 and derecognised in the company’s 2013 audited financial statements. In 2014, the management of UP reassessed the land bank and available GFA and concluded it still held the rights to approximately 156,000 square metres (1.68 million square feet) of Unbuilt GFA. In 2015 UP’s Board approved the recognition of a fair valuation gain of Dh503 million in the audited 2015 financial statements. At the time the ownership of the full GFA for the plot was under dispute and unresolved. The board has launched a thorough investigation on the alleged irregularities. g

Drake & Scull fires CEO, reduces loss to Dh199m

rake & Scull International, the Dubaibased mechanical, electrical and plumbing (MEP) contractor, has fired its Chief Executive Office Wael Allan while reporting a 12 per cent reduction in net losses to Dh199 million in the second quarter of 2017, down from Dh226 million recorded in the second quarter of 2016, as the Tabarak Holdings take control with a bail-out package to rescue the troubled company. “The group’s Board in its meeting to review and approve the financial results, also resolved to terminate the services of the CEO Wael Allan. The board also approved the resignations of several Board members including that of former Exeutive Vice Chairman Khaldoun Al Tabari,” a company statement said. Tabarak Investment, which threw a Dh500 million lifeline to rescue the company, reaffirmed its commitment, acquires majority stake from former CEO Khaldoun Rashid Tabari and extends an interest-free ‘Qard Hasan’ loan of up to Dh100 million to the Group. The company also reported an 18.11 per cent decline in revenues to Dh660 million in the second quarter of 2017, down from Dh806 million recorded for the same period last year. The revenue achieved for the quarter is consistent with the parameters of the financial targets set forth by the Group at the outset of the fiscal year and is reflective of a sustained performance in key markets mainly the UAE.

At A Glance

Dh500 million capital injection committed by Tabarak Investment

Dh226 million net loss reported in the second quaeter of 2016

Wael Allan, former CEO of Drake & Scull International

Dh6.6b value of Drake and Scull’s total order backlog as of July 2017

The company’s total order backlog stands at Dh6.6 billion as of 30th June 2017 mainly in the MEP sector. The group advanced with the disposal of its non-core assets and has also finalized negotiations for the release of the remaining funds from the sale of its One Palm investment in Dubai in Q3 2017. The funds along with the fresh equity infusion from Tabarak Investment will help restore the liquidity of the group, enabling DSI to suc-

Dh199 million net loss reported in the second quarter of 2017

Dh806 million revenues recorded in the second quarter of 2016

Dh660 million revenues recorded in the second quarter of 2017

cessfully execute its projects backlog and improve productivity across all operating segments. Feras Kalthoum, Acting CFO, Drake and Scull International, said: “The results of the quarter should be viewed within the context of our turnaround plan and the capital restructuring programme and are consistent with our financial targets set out at the outset of the fiscal year. Our efforts to complete the Capital and Debt Restructuring of the Group coupled with continued balancing of our portfolio to mitigate any contingent exposure that may impact our future profitability will soon reflect positively on our financial performance and top line targets.” g

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DSI to start Dh233m MEP job in Abu Dhabi

rake & Scull International said, it will proceed with the Mechanical, Electrical and Plumbing (MEP) works for the Fairmont Abu Dhabi Hotel and Serviced Apartments under a Dh233 million contract. Strategically located adjacent to the landmark Marina Mall in Abu Dhabi, the Fairmont Abu Dhabi Hotel and Apartments Towers are owned by Abu Dhabibased National Investment Corporation. The Dh1 billion development is a 39-floor Arabian themed arched structure located near Marina Mall in Abu Dhabi. It occupies an overall area of 178,000 square metres with an extensive water frontage. The project's scope of work consists of the 39storey tower comprising of 563 rooms in the five-star hotel and 249 serviced apartments. The project features a network of canals where guests can travel in specially designed boats. The project is scheduled for completion and handover in 2018. Mohammad Atatreh, Board Member of DSI, said: “This reflects the high confidence in our services and capabilities within the local and regional property and tourism sectors, particularly in terms of hospitality development and MEP execution. lifestyle destination.” g Gulf Property

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Nakheel in Dh430m contracts

akheel, developer of the palmshaped islands, has awarded four contracts – collectively worth more than US$117 million (Dh430 million) – for Deira Islands, its new, 15.3 square kilometre waterfront city currently under construction in Dubai. The contracts, covering islands A and B of the four-island development, are for a sewage treatment plant, a district cooling plant, a substation and piling work for an 800room resort. Nakheel has now invested nearly US$2.04 billion (Dh7.5 billion) in infrastructure and construction contracts for Deira Islands so far. More are due soon. The latest contracts awards include a Dh228.3 million contract to VWS Emirates LLC/ Butec S.A.L under a joint venture for the design, construction and 10 years’ operation and maintenance of a sewage treatment plant; a nearly Dh100 million to Emirates District Cooling (Emicool) to build a district cooling plant for at Deira Islands, with 10 years’ operation and maintenance; a Dh90.5 million for a substation to AG Power, covering the south island. Three other substations are already construction. Deira Islands will have eight substations in total; a Dh14.5 million to Delta Foundations for piling works for the 800-room RIU beach front resort. g

Gulf Property

Nakheel gets Dh900 m bid for Dragon City

ubai-based master developer Nakheel, developer of the two palm-shaped islands off the coast of Dubai, is assessing five proposals, with bids starting at just under Dh900 million, for the construction of Dragon Towers, its twinbuilding residential complex at the rapidly-expanding Dragon City community in Dubai. Dragon Towers comprises 1,140 one and two bedroom apartments across two buildings directly linked to the world-famous Dragon Mart retail and trading hub. The complex will have two retail floors, four parking floors and a podium level swimming pool, restaurant and gym. Nakheel expects to award the contract by the end of 2017, with construction completion in 2020. Dragon Towers is a key element of Dragon City, Nakheel’s 11 million square feet mixed-use

21,000 Nakheel’s pipeline of homes

master development, currently best known for Dragon Mart, the world’s largest Chinese trading hub outside mainland China. The Dragon City transformation began in 2012 with the construction of Dragon Mart 2, which opened in 2015, doubling the size of the original Dragon Mart to more than 3.5 million square feet. Dragon City also includes two hotels – a 251-room ibis Styles that opened in February 2016 and a 304-room Premier Inn under construction – and a 375,000 square feet showroom complex and car park, also under con-

struction. Nakheel’s master developments include Palm Jumeirah, The World, Deira Islands, Jumeirah Islands, Jumeirah Village, Jumeirah Park, Jumeirah Heights, Gardens, Discovery Gardens, Al Furjan, Warsan Village, Dragon City, International City and Nad Al Sheba. Together, these span more than 15,000 hectares and currently provide homes for over 270,000 people. Nakheel has more than 21,000 residential units under construction or in the pipeline. Its current and future retail project portfolio covers nearly 17 million square feet of leasable space that include Ibn Battuta Mall, Dragon City, Golden Mile Galleria, Nakheel Mall, The Pointe, Deira Mall, Deira Islands Night Souk, Warsan Souk, Al Khail Avenue, Circle Mall and Nad Al Sheba Mall, as well as expansion of Dragon City and Ibn Battuta Mall. g

Damac H1 profit fall 15.7% to Dh1.6 bn

amac Properties reported a 15.7 per cent decline in net profits to Dh1.6 billion in the first half of 2017, compared to Dh1.9 billion reported for the corresponding period last year. Its half-yearly revenue grew 6.06 per cent to, Dh3.5 billion, up from Dh3.3 billion in the first half of 2016. As of 30 June 2017, Damac’s booked sales for H1 stood at Dh4 billion, and delivered 1,071 units in Damac Hills, Dubai. Total cash and bank balances stood at Dh8.6 billion, while earnings per share for H1 came to Dh0.26. Gross debt stood at Dh5.4 billion as at 30 June 2017. “The property market in Dubai continues to demonstrate further stabilisation, and our medium to long term outlook remains positive as Damac continues to develop innovative products that appeal to both end users and investors,” said Hussain Sajwani, Chairman of Damac Properties. “Damac’s strong

H1 sales performance can be attributed to continued demand for a number of our projects including Aykon City, Damac Hills and Akoya Oxygen.” An additional 1,071 units were delivered at its Damac Hills in H1 2017, bringing the total number of delivered units there to over 3,100. In February, Damac celebrated its flagship golf development with the opening of the Trump International Golf Club Dubai, the first of its kind in the Middle East, offering world-class golfing on an 18-hole championship course and exquisite leisure, dining and entertainment experiences. Construction continues on circa 5,000 villas at its Akoya Oxygen master community in Dubailand, with a further 1,300 villas scheduled to begin construction in September 2017. Akoya Oxygen includes contemporary residential properties of various sizes surrounding an 18-hole championship golf course, along with an organic pro-

duce market, hydroponic café, luxury wellness centre, outdoor yoga enclave and retail outlets featuring wellknown brands. Construction is almost complete on the Damac Towers by Paramount Hotels and Resorts, a four-tower, 250meter high development consisting over 2,000 units, and includes a luxury hotel and serviced branded residences in Business Bay. Progress on the award-winning Damac Heights, an 86-floor tower with uninterrupted views of the sea and Palm Jumeirah is also nearing completion. “Dubai continues to show economic growth in spite of the turbulence seen in 2016 with the drop in oil prices and sluggish global trade. GDP growth continues to remain positive at 2.85 percent in 2016 and Dubai remains one of the most popular destinations for global travelers, attracting over 8 million visitors in H1 2017, compared to 7.3 million for the same period last year, according to DTCM,” said Sajwani. g

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Arabtec to build 1,296 Damac villas for $171 m

amac Properties said, it has awarded Arabtec Construction LLC with a US$171 million (Dh628 million) contract to develop 1,296 villas at Damac’s Akoya Oxygen master development. Arabtec will begin construction in Q3 2017 at the 55-million-square-foot green development in Dubailand, and is expected to complete the project within 24 months. Akoya Oxygen offers a tranquil environment with lush, green surroundings in a secluded, familyfriendly community. Energy-efficient homes are surrounded by beautiful landscaping and cascading water features. Located off the Umm Suqeim Road extension and approximately 15 minutes from Damac Hills, Akoya Oxygen will include contemporary residential properties of various sizes surrounding an 18-hole championship golf course, along with an organic produce market, hydroponic café, luxury wellness centre, outdoor yoga enclave and retail outlets featuring well-known brands. Damac Properties has delivered 18,500 homes. The company has a development portfolio of over 44,000 units at various stages of progress and planning, comprising more than 13,000 hotel rooms, serviced apartments and hotel villas. g Gulf Property

REALTYBYTES At A Glance $32 billion

value of projects that are being tendered out in 2017

$50.9 billion

total value of construction contracts expected in 2017

$65.6 billion

total value of construction contracts expected in 2018

Dh34.8 billion value of construction contracts awarded in the second quarter of 2017

Dh26. trillion

total value of 25,324 live construction projects in the Middle Est and North Africa

s many as 801 construction projects with a combined estimated value of US$32 billion (Dh117.44 billion) are currently in tendering state in the GCC's urban construction sector which will serve as a strong pipeline of projects to be awarded in the near future, according to BNC Network, the largest and most comprehensive project research and intelligence provider in the Middle East and North Africa (MENA) region. By the end of the year 2017, the combined total value of urban construction contracts is estimated to reach US$50.9 billion (Dh186.8 billion). While this is lower than the peaks seen in prior years, the volume of construction contracts is still

Gulf Property

801 projects worth Dh117bn go on tender As many as 801 urban construction projects will go into tendering stage in 2017

tremendous, making Dubai one of the most active construction markets in the region. BNC forecasting model suggests that there would be an increase of 29 per cent in the total value of contract awards to US$65.6 billion (Dh 246.46 billion) in the urban construction sector in the GCC in 2018 followed by another 1 per cent growth to reach US$66 billion in 2019. The latest BNC Intelligence report shows 292 contracts with a combined estimated value of US$9.5 billion (Dh34.87 billion) were awarded in the second quarter of 2017, within the GCC's urban construction sector that includes commercial and residential buildings, hospitality, healthcare, retail, education, religious buildings, leisure and recreation and

mega urban developments. Some major contract awards in the second quarter of 2017 includes Deira Islands Mall project in Deira Island, Dubai, City Centre - Al Zahia in Sharjah, Yas Acres (Phase 1) in Yas Island, Abu Dhabi and Danat Al Lawzi in Bahrain. Danube Properties will tender out the Dh450 million Bayz residential tower at Business Bay. The urban construction contracts constitute 80 per cent of the contracts awarded for all sectors in GCC and in dollar terms this translates to 49 per cent of the total contracts awarded. “Events like Dubai Expo 2020 along with stabilisation of the oil price and the drive of the various GCC countries to achieve economic diversification and increase in the living standards will play a

vital role in the construction industry contract awards,” Avin Gidwani, Chief Executive Officer of BNC Network, says. “As the economic growth is expected to pick up pace next year, we expect an increased construction activity across the board in 2018. New project announcements by major developers that have taken place from 2016 till now – will go into tender next year and trigger increased construction activities across the GCC.” BNC, the largest project intelligence provider in the MENA region, tracks 25,324 live construction projects with a value exceeding $7.2 trillion (Dh26.4 trillion). It publishes more than 250 project updates that are distributed amongst 73,000 executives and professionals every day. g

DLD extends links with government bodies

ubai Land Department (DLD) has strengthened its partnerships with a number of government entities as part of its ongoing efforts to integrate Dubai’s various institutions, improve government performance, achieve the highest standards of excellence and ensure customer satisfaction. It is now possible for customers to register lease contracts and complete transactions with several government entities in one go, including the Department of Economic Development and others. Customers can also renew commercial licenses and complete the new licensing requirements via user-friendly smart applications, as long as they have a registered lease. The Ejari smart application launched by DLD is one of the most commonly used channels for registering leases, as it facilitates the process and also offers a variety of other services. It gives users the authority to

register leases at any time and from anywhere in the world, and to access information including personal data, lease conditions, property statuses, rent indicators, maintenance reports, and more. Hamdan Hamad Al Madhani, Director of Rental Relationship Regulation Department at DLD, said: "As a result of the enhanced cooperation between government entities, we are now working with a number of entities including Dubai Electricity and Water Authority (DEWA). To achieve the desired level of integration, a workshop was organised where representatives from real estate companies as well as real estate service trustees could present proposals, share observations, and state their opinions regarding lease contracts registered in Ejari system and DEWA’s requirements. “DEWA service transactions will be easier to accomplish than ever before, as customers will no longer need to review and submit

documents multiple times. This is part of a wider integration of government services that aim to save customers both time and effort.” The application is currently being developed in phases to transfer also services to smart formats. An announcement will be made once technical requirements such as legal notices, filing, financial follow-up, collection and other services are completed. To fully integrate its lease registration system, DLD has established partnerships with nine government entities including DEWA, Department of Economic Development, Ports, Customs and Free Zone Corporation, General Directorate of Residency and Foreigners Affairs, RTA; Dubai Municipality; Awqaf and Minors Affairs; Dubai Tourism and the Emirates Identity Authority. The department also partners with real estate companies with the leading property leasing and management systems. g

REALTYBYTES

DEWA’s Dh210 million water pipeline ready

ubai Electricity and Water Authority (DEWA) said, it has completed the construction of the 109 kilometres of the Dh210 million water distribution project to supply, extend and commission water distribution networks. As much as 67.3 per cent of the project completed so far in different parts of Dubai, that is being constructed at a total cost of Dh210 million. “The main objective of the project is to develop water distribution networks in Al Khawaneej 2, TechnoPark, and other new areas in Dubai, to improve operational efficiencies and increase the flow of water to meet the rapid growth in water in various parts of Dubai,” Saeed Mohammed Al Tayer, Managing Director and Chief Executive Officer of DEWA, said in a statement. "The project includes 450- and 100-millimetrediameter extensions of Glass-Reinforced Epoxy (GRE) main water pipelines to provide continuous and stable water supplies that are reliable, efficient, and always available, to achieve the happiness of customers and stakeholders. "The implementation of the project is going according to plan, and is expected to be complete by the end of 2017,” concluded Al Tayer. g Gulf Property

REALTYBYTES Multiplex gets P240 m contract for Aykon One

ine Elms Property Ltd, a whollyowned subsidiary of leading luxury real estate developer Damac International, has awarded a GBP240 million contract to global contractor Multiplex for the construction of its property Aykon London One. The luxury branded residential tower is set to become a new icon on the London city skyline, and will be the first in Europe to be designed in partnership with famous Italian fashion house, Versace Home. The 50-storey tower, located in one of London’s most prestigious residential addresses, will comprise of studios, one, two and three bedroom apartments, complemented by premium finishings, and feature special ‘winter gardens’ that offer panoramic views of the city. “Aykon London One is our premiere international development outside of the Middle East and a landmark project for the UK’s capital,” said Hussain Sajwani, Chairman of Damac. Multiplex is a leading international contractor with a presence in Europe, Canada, the Middle East, Australia and India, delivering property and infrastructure assets. Established in 1962, the company’s work to date comprises more than 935 projects with a combined value of $71 billion. g

Gulf Property

Dubai Hills Mall to offer opportunities

Dubai Hills Mall will widen the consumers’ choice of shopping in a new destination

maar Properties, developer of the world’s tallest tower Burj Khalifa, on Sunday, announced the launch of Dubai Hills Mall, a family retail district located in the heart of Dubai Hills Estate, the 11 million square metres master-planned green oasis set in easy proximity to Al Maktoum International Airport and Downtown Dubai. A regional retail and leisure destination scheduled to open late-2019, Dubai Hills Mall will have a gross leasable area (GLA) of over 2 million square feet (187,500 square metres). It will be home to more than 750 outlets including a range of ‘fast fashion’ retail and food and beverage choices featuring a wide array of restaurants and cafes. In terms of relative size, it is more than half of the size of Dubai Mall – which has a

GLA of 3.77 million square feet and slightly smaller than the Mall of the Emirates that has a GLA of 2.4 million square feet.. The developer did not disclose the investment outlay of the project. Dubai Hills Mall will also feature four major family entertainment and leisure centres including a cineplex, a 65,000 square feet hypermarket, seven anchor retail experience stores, and dedicated parking spaces for over 7,000 vehicles. The mall will add to the lifestyle choice of residents in Dubai Hills Estate, featuring several residential communities including golf-course villas, townhouses and apartments. Abdulla Al Habbai, Group Chairman of Meraas, said: “With the retail and trade sector contributing to about 30 per cent of Dubai’s GDP, it is important to ensure its sustained competitiveness

through such lifestyle destinations that welcome visitors from around the world in addition to serving the local community.” Dubai Hills Mall will be a centerpiece of Dubai Hills Estate, one of the largest master-planned communities in the city developed by Emaar Properties as a joint venture with Meraas. It will feature a total green area of over 23 million square feet that includes a championship golf course, and a central park spreading over an area of about 1.9 million square feet. The golf course overlooks the Downtown Dubai skyline. Set around the golf course are over 4,400 villas and townhouses, and 22,000 apartments. Emaar has launched exclusive residential neighbourhoods in Dubai Hills Estate that have gained strong investor response. g

Gulf Sotheby’s buys stake in SPF Realty

PF Realty – a name to reckon with in Dubai’s real estate market – will soon disappear, just two years after a major re-branding exercise following its acquisition. Gulf Sotheby’s International Realty – the international luxury real estate firm – said, it has acquired a majority stake in SPF Realty – a leading property brokerage, based in Dubai. Under the deal, SPF Realty will rebrand and operate under the Gulf Sotheby's International Realty brand. This is a first of its kind merger making Gulf Sotheby’s International Realty the UAE’s largest real estate company in the market; integrating its Western and Arab clientele with SPF Realty’s large South Asian customer base. The merger will see a 50 per cent increase in Gulf Sotheby’s current broker count and will also embrace two dominant nationalities in the UAE, making it the largest multicultural company totalling over

100 brokers. George Azar, Chairman of Gulf Sotheby’s International Realty said: “The integration with SPF Realty’s team will enable us to extend our offerings to the Indian subcontinent’s prime property buyers, led by a team with a noteworthy track-record and incredible expertise. The merger creates a multicultural company leading in size and strength offering a wide range of services to a multitude of markets in the UAE. “This merge further solidifies Sotheby’s International Realty’s position in the market as a true global leader. This is the strength we hold as an international firm working across 68 different countries.” SPF Realty in 2013, hit target of Dh1.2 billion. Ranjeet Chavan, CEO of SPF Realty said: “We are very excited to formally be a part of the world renowned Sotheby's brand as we move to upgrade and expand our Dubai realty experience of over 35 years to reach new

markets and new segments. This is an incredible opportunity as the combination will push the boundaries for UAE real estate market, when it comes to offering solutions to a larger customer base.” Kalpesh Sampat, COO of SPF Realty added: “Over the past decade, we have built the SPF brand to be a market leader in this region. This next step of merging with the Gulf Sotheby’s International Realty will prove to be a game changer for the UAE real estate industry. The complementary strengths and synergies of two well established entities will bring in a new dimension in the real estate industry as a whole.” Gulf Sotheby’s International Realty has over 90 global property consultants and connects buyers to sellers globally. The real estate firm represents exclusive properties, luxury homes, and a multitude of prestigious projects in the UAE recently closing the largest deal in Emirates Hills worth Dh100m, last month. g

REALTYBYTES

GTCC gets Dh175m West Bay contract

ulf Technical Construction Co. (GTCC), a subsidiary of Drake and Scull International, said it has been awarded a Dh175 million contract by Orion Real Estate Development. to build the latter’s latest project, the West Bay residential tower located at Dubai’s Business Bay. The scope of work includes construction, civil engineering, and mechanical, electrical and plumbing (MEP) works scheduled for completion within 33 months. The West Bay tower is located in Business Bay, which is being developed as a commercial, residential and business cluster spanning a 5.9 million square metres area on Sheikh Zayed Road. Once completed, the 34-storey West Bay residential tower will feature 252 residential apartments. Mohammad Atatreh, Board Member, Drake and Scull International, said: “This deal is an excellent addition to the growing portfolio of our civil contracting subsidiary GTCC which has emerged as a preferred general contracting partner in the UAE.” GTCC is involved in several high-profile UAE projects and is currently executing The Pointe project, a new retail and entertainment complex at the Palm Jumeirah in addition to Maliha Hospital and Al Reef Residences Tower in Dubai. g Gulf Property

REALTYBYTES

Marriott to open two hotels in JVC

S hospitality group Marriott International has announced an agreement with Khamas Group of Investment to open two new mid-market hotels in Dubai’s Jumeirah Village Circle development. Scheduled to open in 2020, the two hotels combined will add 250 rooms to Marriott’s portfolio in the UAE and further strengthen the company’s regional presence in the mid-market segment. The Courtyard and Residence Inn branded properties will have 150 rooms and 100 rooms respectively and share facilities including food and beverage outlets, a health and leisure club, a swimming pool and meetings spaces. Marriott International is the largest hotel operator in the UAE with 50 operational properties. With a robust pipeline, the company is on track to strengthen its portfolio in the country to over 80 hotels and more than 20,000 rooms in the next five years. WSW Architects has been appointed to lead the project and WA International will manage the interior design. The project pipeline includes an additional 12 properties under the Courtyard brand, adding to the six already operational, and 11 new properties under Residence Inn, from three currently open. g

Gulf Property

Dubai Investments to build Dh1bn tower

Dh450

ubai Investments, a major investor in industrial park and real estate projects, said, it will commence construction of its first US$272.48 million (Dh1 billion) skyscraper before the end of this year, according to its chief executive officer. The 70-story freehold residential tower will come up on Sheikh Zayed Road, next to Al Habtoor City and Damac’s Aykon City. The mixed-use residential building, designed by Dar Consult. Construction is due to start before the end of 2017. As of July 2017 there are ten residential towers of 70 or more floors in Dubai; Princess Tower, 23 Marina, Elite Residence, The Torch, Blue Tower, Ocean Heights, Cayan Tower, Sulafa Tower, Marina Pinnacle and D1 Tower. Khalid bin Kalban, Managing Director and Chief Executive Officer of Dubai Investments, said the construction tenders would be issued soon. “We have got all the government approvals

and now we will proceed upon issuing of the tender documents. We expect to break ground by year-end and complete the tower in the next three years.” The company purchased the land plot in full in 2016. It has also pledged the requisite 20 percent of the project value as a deposit with the Real Estate Regulatory Agency. Kalban said the company

plans to raise bank finances of between US$109 million (Dh400 million) and US$123 million (Dh450 million) for the development of the project. He added that the firm is planning “to approach banks in the coming weeks.” Kalban remains confident of Dubai’s real estate market, particularly for their new iconic project; he said the high-rise will allow it to join the “prestigious skyscrapers club” in Dubai and the world. The company, which has a real-estate development portfolio of US$1.77 billion (Dh6.5 billion), plans to gradually launch more high-rise towers on the land banks it owns across the emirate, Kalban shared. g

ubai-based private equity investment firm, Shuaa Capital said, its real estate asset management division will be managing the development of a new Dh1.5 billion mixed-use skyscraper on Sheikh Zayed Road, Dubai. The project is intended to serve the ever-growing demand in the UAE’s residen-

tial, tourism and hospitality sectors. Shuaa’s real estate specialized asset management division currently manages assets in excess of Dh3 billion spread across both the UAE and Saudi markets. Talking briefly on the occasion, Fawad Tariq-Khan, General Manager of SHUAA Capital said, “SHUAA’s real estate business line has proven expertise and a

strong track record in developing projects, managing funds, and forming business alliances, both in the UAE and Saudi markets. We intend to utilise this strength to the fullest as we continue to roll-out our expansion plans. This project is set to complement Sheikh Zayed Road’s picturesque skyline, and we look forward to the official unveiling at Cityscape.” g

million bank finance could be sought

The new tower will join the list of the skyscrapers on Sheikh Zayed Road, Dubai

Shuaa to manage Dh1.5bn tower

IGO plans to invest in projects worth Dh2bn

nvest Group Overseas (IGO), a Dubai-based developer, said it will invest in projects valued at more than Dh2 billion leading up to 2020, starting with a Dh500 million residential tower – IGO 101 – to be developed at the Jumeirah Lake Towers. With construction to begin in December 2017, IGO 101 is scheduled for completion in Q4 2020. “With an investment of Dh500 million, the 195-meter tall residential tower that will include G+39 floors, promises to up the style quotient across Jumeirah Lakes Towers’ (JLT) already impressive skyline,” the company said. “As a privately-held creator of community-style developments, IGO is committed to delivering end-user focused products with high-ROIs, within committed time frames, at prime locations in the city’s most prominent areas.” Dr Anas A Kozbari, Managing Partner and CEO of IGO, said: “IGO has been a part of the UAE’s story of growth and expansion for well over a decade, and we firmly believe that the growth trend is poised to continue. Testament to the vision of the leadership, Dubai is not just a city, it’s a brand, and we look forward to adding further value for citizens and residents through our upcoming projects, beginning with the launch of IGO 101. “Aimed at creating residential solutions tailored for the end-user, IGO 101, JLT’s newest landmark, will redefine the affordable luxury segment. We intend to in-

IGO 101 will be another feather in Jumeirah Lake Towers’ cap

crease the inventory and plug a much-desired gap in the market for premium homes at affordable prices.” In line with best-in-class quality codes that are a hallmark of every IGO project, IGO 101 will provide a suite of lifestyle and functionality services for discerning residents and investors in a premium and fashionable living space. Located in JLT, near Sheikh Zayed Road, IGO 101 will comprise 449, one-, two-, and three-bedroom apartments. Each well-appointed apartment will boast high quality finishes, and fea-

ture a lounge, dining area, modern kitchen, and bedrooms with attached bathrooms. Larger units will also include a powder room and laundry closet as well as a maid’s room. With a portfolio of projects across Dubai to its credit, including the Polo Residences and the Polo Townhouses in Meydan, IGO’s developments are notable for their superior built quality and strategic locations. Focused on providing end-user specific residential solutions, IGO has delivered projects valued at Dh4.5 billion in the last five years. g

REALTYBYTES

Eagle Hills get Dh300m NBF facility for resort

agle Hills, an Abu Dhabi-based private real estate investment and development company, has signed a Dh300 million facility with the National Bank of Fujairah (NBF) to finance the ongoing construction of The Address Fujairah Resort + Spa, a luxury hotel and residential development in Fujairah. Located in Sharm in Fujairah, famous for its breathtaking landscape of mountains and uninterrupted sea views, the project comprises The Address Hotel with a range of five-star amenities and four residential buildings that include 170 branded apartments, five beach villas and five garden villas. The development also features a 500-metre promenade, beach access, and a unique plaza. The facility agreement endorses Eagle Hills’ luxury development as a sound investment for customers, while demonstrating the company’s commitment to collaborating with key local insitutions and organisations in Fujairah. The agreement also ensures a smooth mortgage model for customers and investors looking to purchase the luxury properties, and who wish to finance their purchases through the National Bank of Fujairah. g Gulf Property

OPINION

CHRISTINE LAGARDE

Managing Director International Monetary Fund

mpowering women is not just the right moral choice; it is also the right macroeconomic choice. That is why many of us care — including the IMF. Helping women participate in the economy boosts growth, diversifies economies, reduces income inequality, and mitigates demographic change. These factors are relevant across the globe — but especially here in Korea. Think, in particular, about growth. For the last five years, the working-age population increased by 200,000 every year, boosting growth by 0.7 percentage points. Over the next five years, the workforce will shrink by 100,000 a year, subtracting 0.2 percentage points from growth. Enabling more women to work can dramatically alleviate the adverse effects of demographic change. There has never been a more critical time for Korea to invest in women. This challenge is the focus of my remarks. First, despite progress, further actions are needed —

Gulf Property

Women empowerment by government and society — to help women participate in the economy; Second, from the corporate perspective, more ambitious steps are required to harness the substantial dividends from having more women in senior positions. Let me start with Korea’s progress. The proportion of women in the workforce — the female labour force participation rate — has increased from 46 per cent in 1980 to 58 per cent in 2016. Between 1990 and 2010, the share of women in regular jobs rose from 20 to 40 percent. On the global stage, many Korean women are shining — figure-skaters; musicians and golfers. Yet, Korea still has one of the lowest rates of female labour force participation in the OECD — 20 percentage points below the best performers. Women are paid about 37 per cent less than men. Females take up just 2 per cent of senior management positions — compared to the OECD average of 20 per cent. With many women leaving the workforce in their 30s to have families, they typically miss a decade or more of prime working life. Re-entering the workforce is a challenge. For those who do, opportunities can be limited. Many take non-regular jobs, or never reach the next rung on the career ladder. The good news is that steps are being taken to remove these barriers. Korea has had legallycompulsory gender budgeting for over a decade. It is one of only a few countries that collect and analyze gender-disaggregated data to assess the effectiveness of its approach.

Building on this, parental leave provisions have been expanded, and investments made in childcare. Steps have been taken to help mothers return to work after an absence, alongside efforts to make workplaces more family-friendly. These priorities have been part of the IMF’s discussions with the government for several years. Another country facing demographic change — Japan — has shown that the likelihood of having a second child increases if men are more active in the household. This brings me to the role of fathers. Despite progress, take-up of paternity leave only recently exceeded 5 percent. Many fathers do not take it because they fear ramifications at work. If men are to play a more active role in family life, corporate culture needs to change. It also needs to change for the sake of women, which brings me to my second point—how to empower women to lead in the corporate sector. Let me begin with an IMF study of 2 million firms in 34 European countries. It found that adding one more woman onto the corporate board can help increase the return on assets by between 8 and 13 basis points. In creative and hi-tech sectors, the return on assets can be as much as 30 basis points. With the Pangyo Creative Economy Valley under development, this finding should resonate. Beyond profits, gender-diverse boards can also improve corporate governance. Forthcoming IMF staff research also finds that a greater share of women on bank and banking supervi-

sion boards could be associated with greater bank stability. In particular, banks with a higher share of women are associated with higher capital buffers and lower nonperforming loan (NPL) ratios. So how can we get more women onto corporate boards in a country like Korea—where just 14 of the 100 largest listed companies have a female director? I used to think that quotas were unnecessary. Then I realized that, without them, it would take 5 generations until 30 per cent of partners at my law firm were women. So I was converted to quotas, at least as a short-term solution. In recent years, we have seen several countries adopt corporate quotas. India did so in 2010, and the share of women on boards rose from 5 to 13 percent. In Malaysia, quotas helped double the proportion of female board members at the largest companies. Mandatory legal quotas have also been introduced in parts of Europe. In Norway, over five years they supported a fourfold increase in the proportion of women on boards. We must also acknowledge that international experience with mandated corporate quotas has not been universally successful. Some quotas have been poorly implemented, lacked incentives, or had insufficient buy-in. Quotas cannot be viewed in isolation, but only as part of a wider package of measures. In sum, the IMF will continue to bring women’s empowerment into the economic mainstream, because unleashing the potential of women is a global priority. g

Dubai leads the way in realty transparency

he latest reports issued by Dubai Land Department are very encouraging for all of us engaged in the emirate’s real estate sector. First of all, a 16.8 per cent jump in the value of transactions to Dh132 billion during the first six months of the year is very encouraging. The half-yearly land and property transaction value of Dh132 billion (US$36 billion) itself is higher than many country’s gross domestic product (GDP). The second report, that shows that Dh113.6 billion or 75.23 per cent of Dh151 billion investment in Dubai’s real estate were done by foreigners in 18 months from January 2016 till June 2017, Dubai Land Department’s latest report shows, while the rest or Dh37.4 billion or 24.77 per cent pumped in by the UAE nationals. UAE nationals topped the overall list of investors registering Dh37.4 billion investment through 12,000 transactions. Saudi Arabians led the Gulf nations with 5,366 transactions worth Dh12.5 billion. Indian nationals topped the list of foreign investors in Dubai’s real estate market investing Dh20.4 billion (US$5.55 billion) through 10,628 transactions in 18 months, while Pakistani investors injected Dh7 billion through 5,398 real estate transactions. Investors from Egypt, China, Jordan, Lebanon and America placing in sixth to tenth places respectively through 2,439 transactions worth over Dh4 billion. Egyptians came in sixth place, fol-

lowed by Jordanians who made 2,235 transactions worth Dh4.2 billion. Chinese investors ranked in eighth place after concluding 2,177 transactions worth Dh3.1 billion, while Lebanese nationals came in ninth place with 1,313 transactions worth Dh2.6 billion and Americans ranked tenth with 1,119 transactions worth close to Dh2.9 billion. Combined, all of the other nationalities registered in the DLD’s database made a total of 23,318 transactions amounting to a total value of Dh48.66 billion. The other significant report was that Dubai Land Department (DLD) registered 68 real estate projects worth Dh21 billion in the first six months of 2017, about 680 per cent jump in the number of project registration compared to 20 in the 12 months of 2016. The first half of this year also witnessed the completion of 24 projects that had been initiated in previous years. Dubai has 713 registered property developers alongside a total of 483 projects. Since the establishment of the Real Estate Regulatory Agency (RERA) ten years ago, 535 projects of various sizes have been completed. DLD said, developers launched 88 real estate projects in 18 months from January 2016 till June 2017, it said. This means, developers registered only 20 projects in the full year of 2016, compared to 68 in the first six months of 2017. The flurry of project registration has encouraged Dubai Government to create

a ‘one-stop shop’ to speed up building permits and reduce project delivery time for developers – as the emirate sees a strong interest in property developers ahead of the World Expo 2020. According to reports, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai, has approved the new strategy for building permit procedures development in Dubai, UAE. The strategy will ensure speeding up the process of acquiring building permits from concerned government entities to assist investors in the real estate sector. The new strategy, set up by Dubai’s Committee for Building Permit Procedures Development, aims to enhance Dubai’s prominent positioning as a city where the active building and construction sector plays an important role as key component of the economic development. The strategy is built upon three pillars, first developing and streamlining building permit procedures, then unifying systems and requirement, while the last one provides a ‘one-stop shop’ where all the procedures and building permits processes in Dubai can be completed. The three pillars represent a comprehensive scheme that will ensure speeding the process of acquiring permits in all its stages. If one reads these reports one after the other, one would realise why Dubai is leading the way in real estate transparency, accountability that is resulting in increased investment into the emirate’s

OPINION

NOORUL ASIF

Chief Operating Officer Schon Properties

real estate market. Sound regulatory environment, backed up by a transparent process and an ease in doing business goes a long way in attracting investment as investors need clarity of the legal framework, the rights of the investors and an assured return on investment. Dubai has been very proactive in systematically cleaning up the system and create a fool-proof system where investors can feel safe with their hard-earned wealth. The increase in the number of building permit registration has prompted the government to create a committee to look into reducing the redtape and offer a one-stopshop for building permits – which will help developers fast-track projects. This level of pro-activity is unprecedented and that’s why foreign investors love to invest in the emirates. g Gulf Property

Making mortgage more affordable!

ith so much drive in the Dubai real estate market, the existing owners are compelled to look around for better or affordable mortgage options in the market which are contributing at large to todayâ&#x20AC;&#x2122;s mortgage transaction within the banking industry. With the lower interest rate and leeway in transferring the existing loan exposure by minimal withdrawal cost, indeed, gives an opportunity to existing mortgage buyers to recalculate the profit margin, to ease the monthly budget. Moreover, the mortgagor has an option to restructure their prevailing home loan or move the loan to other lenders with a better rate and saving terms. Currently, mortgage refinance could be a wise way out to long-term savings for many home owners, who have accumulated good appraisal on their total asset value. As compared to the year 2007-2008 the rate of interest has changed immensely, it dropped around 50 per cent, which gives a good motion for the mortgagor to appraise the existing value with better and revised terms. To encourage the market, few years back the UAE Central Bank introduces a cap on exit fee or early settlement fee from a mortgage buyer. Now every bank has consistent exit fee, and allowed to charge 1 per cent or Dh10,000 whichever is lower, of the outstanding principal amount to exit the

loan, which is certainly in favour of mortgagors to settle the amount early or move it to another bank with minimal cost. Through these regulated guidelines and with the prevailing mortgage interest rates, the refinance cost homeowners, less than 2 per cent of the current loan principal amount while moving the loan to another bank. To attract the buyer the banks are creatively enhancing their approach, bringing the innovative and competitive product in the market. At present mortgage buyers have greater flexibility, as banks are more liberal on giving sustainable rates for existing loan borrowers, moreover, the cost of transaction narrowed down, especially where bank processing fee and bank application fee costs waive out alongside, some are even giving promotional free or discounted property valuation fee, to entice the borrower by sinking undue moving cost. Using refinance as a UAE national, one can obtain up to 80 per cent of the property value amount however as an expat, up to 75 per cent, depending on the loan requirement and the annual income.

Due Diligence

Mortgage refinance could be the right move if the calculation done properly, so whenever, you look for change do proper home work. Furthermore, itâ&#x20AC;&#x2122;s very important to study competitive market offer to decide the best in the long-term, as

some offer fixed rate for one year but some banks have a competitive rate for the longer fixed period (2-3 years). Certainly, an expert or individual mortgage consultant could be the best advisor to guide the finest product which precisely fit into the requirement. However, you can negotiate the term with the existing bank first, before exploring the market, as some bank restructure the rate and term to retain the customers. Or if the fixed period is concluding you can avail the option to re-fix it for certain period if the bank has such term structure. Furthermore, read the fine print before signing the mortgage offer letter, the mortgage terms and conditions and look for miscellaneous hidden fees and forfeits. Comprehend the full operating costs and withdrawal fees. To reduce the future price fluctuations, go with the bank product which links all their future rates to the Emirates Inter Bank Offered Rate (EIBOR) if selecting variable rate option, it will give you more secure way in the long run and can help to keep the refinancing cost low. To maintain the financial future with an informed choice, always armed up with enough knowledge to discuss different options with banks and cautiously select which would be the best that suffices the long-term mortgage commitments. Along with the mortgage buyout, equity release refinance or also referred as

OPINION

DHIREN GUPTA

Managing Director 4C Mortgage Consultancy

cash out mortgage could also be a vital option for full cash purchased home owners to utilize the low-interest rate cost and capitalize the amount with further investment. For instance, with extra cash from existing asset, they can either invest in some other project or can consolidate debts with some balloon payment.

Refinance Procedure

To initiate the refinance process, the mortgage borrower needs to update the bank with the required personal bank statement, liability details, property documents and income details. The process and time are almost the same as the new mortgage. The bank consultant will review the existing loan offer letter, loan repayment statement and once reviewed all the essential documents, the bank will identify the potential pay-out figure. The complete process takes around 3-4 weeksâ&#x20AC;&#x2122; time to transfer the loan.. g Gulf Property

FOCUS

Real estate sector gains momentum

Gulf Property Exclusive

egistration of real estate projects jumped 680 per cent to 68 with a combined value of Dh21 billion during the first six months of 2017, compared to 20 project registrations during 12 months in 2016, according to Dubai Land Department. Dubai Land Department (DLD), the emirate’s land and property registrar, said, it has registered 68 real estate

Gulf Property

projects worth Dh21 billion in the first six months of 2017. Property developers launched 88 real estate projects in 18 months from January 2016 till June 2017, it said. This means, developers registered only 20 projects in the full year of 2016, compared to 68 in the first six months of 2017. The first half of this year also witnessed the completion of 24 projects that had been initiated in previous years. “The sales market has witnessed an improvement in transaction numbers during 2017, with off-plan properties

remaining favourable amongst investors, underlining the speculative nature of the local market,” said Mat Green, Head of Research and Consulting UAE, CBRE Middle East. Dubai’s residential market witnessed a very minor contraction during the second quarter of 2017 with both sales and rental rates seeing modest declines. This is driving the progression of a tenant-led market and ultimately handing bargaining power to new tenants, according to the Q2 2017 Dubai MarketView by global real estate consultancy firm CBRE.

However, tenants on existing leases are generally not finding the same level of flexibility from landlords, although rental increases are becoming less prevalent. Residential sales prices fell by close to 1 per cent during Q2 2017, with the sector slowly edging towards the bottom of the market, with just a 2 per cent drop recorded year-on-year. Future supply levels continue to grow at a rapid rate, which is a longer-term concern for the market, with a significant pipeline of new properties set to be completed in the build- up to

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At A Glance

Dh132 billion value of land transactions during the first half of 2017

Dh63 billion

value of sales transactions during the first half of 2017

Dh60 billion

value of morgage deals during the first half of 2017

Dh21 billion

value of the real estate projects registered during the first half of 2017

Dh390 billion value of land transactions in 18 months from January 2016 to June 2017

expo 2020, with annual deliveries rising already well above the five-year average. Dubai has 713 registered property developers alongside a total of 483 projects. Since the establishment of the Real Estate Regulatory Agency (RERA) ten years ago, 535 projects of various sizes have been completed. “This is a significant jump in property launch and reflects developers’ growing confidence in the emirate’s real estate sector,” said a real estate analyst, requesting anonymity. “The new project registrations are driven by the most active

players, such as Emaar Properties, Damac Properties, Azizi Developments and Danube Properties – who have been driving the growth of the industry in recent years.” Analysts believe, some developers are fast-tracking projects to be completed ahead of the World Expo 2020 – to cash in on the expected property boom from 2019. “It’s a very good time to invest in projects – as the land prices are relatively low,” said another property expert. “So, when the project is ready for delivery post 2019, developers could ben-

efit from the higher prices at that time and that helps to make extra profit from each square feet.” Dubai Land Department had earlier reported a 16.8 per cent increase in the number of land, property and mortgage transactions, exceeding US$36 billion (Dh132 billion) in the first half of 2017. The total number of sales, mortgages and other transactions reached 35,571 from January 1 to June 30, 2017. This includes 25,864 sales transactions worth over Dh63 billion and 7,893 mortgage transactions worth Dh60 billion, while 1,814

Sultan Butti Bin Mejren, Director-General of Dubai Land Department

other types of transaction brought in Dh9 billion. Land represented Dh91 billion from approximately 8,000 transactions, while building sales accomplished 3,887 transactions with a total value of Dh10 billion and unit sales crossed the Dh31 billion mark from 24 transactions. UAE nationals tops the list of investors in Dubai’s real estate, investing Dh15 billion (US$4.1 billion) with 4,510 transactions, according to the DLD. The total value generated by GCC investors increased by 16 per cent compared to the same period last year, with 7,665 transactions worth Dh21.7 billion. Saudi nationals ranks second place with a total of 1,936 transactions worth Dh4 billion. Among the Arab investors, Egyptians and Jordanians Gulf Property

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took first and second places respectively. The total value of Arab investments reached Dh8 billion, representing a 25.5 per cent increase compared to the same period last year, generated by 4,654 Arab investors, a 40 per cent increase compared to the same period. Among foreign investors, Indian, Pakistani, British, Chinese and Canadian nationals took the first five places, with 15,062 investors generating a total value of Dh28.6 billion. These figures represent a 35 per cent increase in investor numbers and a 34 per cent increase in

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value compared to the first six months of 2016. The report also sheds light on the top ten areas in Dubai for both number and value of transactions. Dubai Marina took first place with 2,529 transactions, followed by Business Bay with 2,146 transactions, Al Barsha South 4 with 2,001 transactions, Jebel Ali 1 with 1,931 transactions, and in fifth place Al Thaniya 5 with 1,501 transactions. In terms of value, Palm Jumeirah topped the chart with transactions worth Dh9.5 billion, followed by Dh6.5 billion for Business

Bay, Dh5.8 billion for both the Burj Khalifa and Dubai Marina areas, and Dh5.6 billion for Al Wasl area. In the first half of 2016, the total value of land and property transactions in Dubai reached Dh54,78 billion, through 12,568 transactions. Sales crossed the 8,440 transaction with a total value of Dh21.68 billion, while mortgages crossed 3,213 with a total value of Dh24.90 billion. In other categories, 915 transactions with a total value of Dh8.19 billion were also recorded. Sales and mortgages related to land transactions

recorded more than Dh42.72 billion with 3,676 transactions, while the commercial lands acquired the lionâ&#x20AC;&#x2122;s share. Looking at the value of transactions by the buildings and units, transactions exceeded 8,722, while 1,796 commercial units were acquired along with 1,535 building units, with a total value of Dh12.05 billion through 8,892 transactions. Sultan Butti bin Mejren, Director General of DLD, commented: â&#x20AC;&#x153;Dubai is currently witnessing increasing interest from international investors, which has reinforced

Source: Dubai Land Department

confidence in our real estate sector and its future prospects.” The figures reaffirm the momentum and sustainability of Dubai’s real estate market, which is following an upward growth trajectory. Contributing local factors include the development of ambitious infrastructure projects, and the atmosphere of security and tranquillity that continues to define Dubai and the wider UAE, he said. The total value of real estate transactions in Dubai exceeded Dh390 billion across 95,000 transactions in 18 months (1 Jan 2016 – 31

July 2017), according to Dubai Land Department. This is higher than the nominal gross domestic product of 150 countries in the world. A considerable number of sales through 67,409 transactions for land, buildings and units worth Dh165.73 billion. For the same period, mortgages were registered at a value of Dh188.51 billion, achieved through 22,353 transactions, while other transactions saw a total value of Dh36 billion through 6,077 transactions. The report illustrates that unit transactions have topped the real estate scene

in terms of number, and were recorded at a value of Dh86 billion, achieved through 63,903 transactions, while land transactions recorded the highest ranked in terms of value through 24,000 transactions worth more than Dh283 billion. As for buildings, transactions reached 8,000 - worth Dh21 billion. The report shows that the real estate market saw a considerable number of sales through 67,409 transactions for land, buildings and units worth Dh165.73 billion. For the same period, mortgages were registered at a value of Dh188.51 bil-

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DLD reviews Rent Law

ubai Land Department (DLD) recently met with the legal community to review and discuss the articles of Law (26) for the year 2007 regarding rental laws. During the meeting, participants presented their views on the articles of the law. They were also given the chance to offer proposals for the improvement of the current rental law, and strategies for better serving parties to rental agreements. Mohamed Ahmed Yahya, of DLD, says, “This is part of DLD’s ongoing cooperation with the Emirate’s law firms. We are constantly updating our employees on the latest legal developments relating to different types of property. Such meetings allow us to discuss developments that may improve market performance, and generate solutions for potential issues.” g lion, achieved through 22,353 transactions, while other transactions saw a total value of Dh36 billion through 6,077 transactions. The report illustrates that unit transactions have topped the real estate scene in terms of number, and were recorded at a value of Dh86 billion, achieved through 63,903 transactions, while land transactions recorded the highest ranked in terms of value through 24,000 transactions worth more than Dh283 billion. As for buildings, transactions reached 8,000 – worth Dh21 billion. g Gulf Property

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Foreigners invest $31 bn in Dubai realty in 18 mts

Gulf Property Exclusive

s much as Dh113.6 billion ($31 billion) or 75.23 per cent of Dh151 billion ($41 billion) investment in Dubai’s real estate were done by foreigners in 18 months from January 2016 till June 2017, Dubai Land Department’s latest report shows, while the rest or Dh37.4 billion or 24.77 per cent pumped in by the UAE nationals. Sultan Butti bin Mejren, Director General of Dubai Land Department, commented: "As many as 217 nationalities have invested a total of Dh151 billion in Dubai’s real

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estate market. This demonstrates the confidence that the world has in our real estate environment, which is characterised by a strong regulatory system that provides safety and security for all parties. “This list has been unveiled at a time when our real estate market is preparing for a new phase of growth in the run-up to Expo 2020. We are pleased to have witnessed such a high level of interest from global citizens in Dubai, who have invested over Dh151 billion across 71,000 real estate transactions in just 18 months.” This is the highest ratio of foreign investment in the real estate market of any economy in the world – that reflects Dubai’s attractiveness

in foreign investment. Dubai still remains one of the most lucrative markets for real estate investment. With the market witnessing the lowest possible price due to lack of demand and over supply in the market, this is perhaps the best time to buy property in Dubai and the message is getting across to foreign investors. “In less than 40 years, Dubai has transformed from a local trading community into one of the most inspirational, exciting and successful cities in the world. It continues to make global headlines as an immensely attractive destination for tourists, investors and businesses alike,” said Sanjay Sachdev, Managing Director of Sobha LLC, a major real

estate developer in the UAE and India. “With recent economic changes in India and the lack of incentivised benefits for investments, especially in the real estate sector, Indian investors are looking for alternate means to achieve higher returns on investments from different avenues. As such, they are setting their sights on Dubai.”

Brokers earn $223 million in six months

Real estate brokers have earned Dh820 million ($223 million) in the first six months of the year, according to Dubai Land Department (DLD), the emirate’s land

Indians inject Top Investors in Dubai Realty Dh20.4 bn in Rank Country Investment 1. UAE Dh 37.4 billion Dubai in 18 mts 2. India Dh 20.4 billion ndian nationals topped the list of foreign investors in Dubai’s real estate market investing Dh20.4 billion (US$5.55 billion) through 10,628 transactions in 18 months, starting from January 2016 till June 2017, according to Dubai Land Department. This is on top of the Dh20 billion invested by Indian nationals in to Dubai’s real estate market in 2015 – and reflects the fact that Indians consider Dubai as the safest market for investment when it comes to real estate. UK citizens took poll position among the European nationalities with 4,188 transactions worth Dh9 billion while Pakistani investors injected Dh7 billion through 5,398 real estate transactions. UAE nationals topped the overall list of investors registering Dh37.4 billion investment through 12,000 and property registry. There are now 5,856 active brokers and 2,340 offices registered in its database, who earn commissions anywhere between 1-3 per cent, although the standard rate is 2 per cent per transaction. Brokers support DLD’s vision by driving real estate transactions and helping to position Dubai as the world's premier real estate destination and a byword for innovation, trust and happiness. However, beyond the registered real estate brokers, there are unregistered ‘influencers’ who bring customers to the sales centre and receive part of the commission – or over and above the brokerage commission. Some of them command as high as 35 per cent of the deal, mean-

3. 4. 5. 6. 7. 8. 9. 10.

Saudi Arabia United Kingdom Pakistan Jordan Egypt China United States Lebanon

Dh 12.5 billion Dh 9 billion Dh 7 billion Dh 4.2 billion Dh 4 billion Dh 3.14 billion Dh 2.87 billion Dh 2.66 billion

transactions. Saudi Arabians led the Gulf nations with 5,366 transactions worth Dh12.5 billion. Which means, the bulk of the investment, or Dh113.6 billion came from foreign countries. This translates to 75.23 per cent foreign investment in Dubai’s real estate, compared to 24.77 per cent local investment. Investors from Egypt, China, Jordan, Lebanon and America placing in sixth to tenth places respectively through 2,439 transactions worth over Dh4 billion. Egyptians came in sixth place, fol-

Yousuf Al Hashmi, Deputy Executive Director of Real Estate Regulatory Agency

ing that the overall cost of sale could be between 2-6 per cent of the property value – just as brokerage commission. Yousuf Al Hashimi, Deputy Executive Director of RERA – the regulatory arm of DLD – commented: "Brokers play an essential role in our sec-

lowed by Jordanians who made 2,235 transactions worth Dh4.2 billion. Chinese investors ranked in eighth place after concluding 2,177 transactions worth Dh3.1 billion, while Lebanese nationals came in ninth place with 1,313 transactions worth Dh2.6 billion and Americans ranked tenth with 1,119 transactions worth close to Dh2.9 billion. Combined, all of the other nationalities registered in the DLD’s database made a total of 23,318 transactions amounting to a total value of Dh48.66 billion. g tor, representing the forefront of real estate activity, acting as a very important link between sellers and buyers, and also offering a wide range of services for investors. Our brokers come from a variety of different nationalities, so they have the ability to provide a true picture of the global investment environment that characterises Dubai. As part of their rights, there is a set of laws that defines and regulates their commissions.” In recognition of their importance, DLD has launched an awareness campaign about the ‘Dubai Brokers’ application, which is the first of its kind in the world and one of the most important applications issued by the department. It provides accurate

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At A Glance

Dh20.4 billion invested by Indian nationals in Dubai real estate from January 2016 to June 2017

Dh37.4 billion

invested by UAE nationals in Dubai real estate from January 2016 to June 2017

Dh12.5 billion invested by Saudi nationals in Dubai real estate from January 2016 to June 2017

Dh113 billion

invested by foreign nationals in Dubai real estate from January 2016 to June 2017

Dh820 million brokerage commission generated during the first half of 2017

and up-to-date information on licensed Dubai real estate brokers and companies that are approved by DLD. The application is designed to reach a large number of beneficiaries including Landlords and real estate investors. It allows investors to verify whether a real estate broker is registered with DLD, protects the rights of customers, enhances speed and confidence, and means that properties can be purchased and sold both smartly and securely. DLD encourages all individuals involved in brokerage services to download the application for a quick and easy way to identify the best real estate brokers according to their performance indicators and efficiency. g Gulf Property

Investment to spur 3.1% economic growth FOCUS

Gulf Property Exclusive

ubai’s economy is expected to expand further over the next two years after having outperformed global economic growth and defied downward trends that prevailed worldwide in 2016, a top government official said. The results of Dubai Plan 2021 Annual Report ‘Dubai Pulse’ highlight that the economic performance of the emirate is better than other

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economies in the region, and that Dubai’s stable macroeconomic environment, its diversification and sustainability policies, growth strategies and infrastructure initiatives continue to fuel outstanding economic performance even when the global economy faces headwind. “Diversification, resilience and sustainability are enshrined in every project, policy and strategy that Dubai adopts, including, for example, the Dubai Plan 2021, Dubai Industrial Strategy 2030, and Expo 2020. The oil sector now makes up for

less than one per cent of Dubai’s GDP, while varied initiatives have opened up unprecedented opportunities for global businesses in several non-oil sectors,” Sheikh Ahmed bin Saeed Al Maktoum, Second Deputy Chairman of The Executive Council and Chairman of Economic Development Committee, said in a statement. Opinion polls point to strong consumer confidence in Dubai's economy, with Dubai's Consumer Confidence Index reaching 138 points in 2016, similar to the previous year. About 80 per

cent of the respondents rated Dubai's economy positively during the current period. This is also in line with the respondents' positive assessment of current job opportunities. The Consumer Confidence Index measures consumer perceptions of the economy, their personal financial position, the desire to purchase in the local market as well as assessment of available employment opportunities. If the Consumer Confidence Index exceeds 100 points (the level of public neutrality), it means that consumer expectations are positive and there is an

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increase in optimism about the economic situation. “Continuous improvements in the routes, capacity, frequency, quality of service, and competitiveness of air and sea access brought 15 million overnight visitors to Dubai during 2016, up 5 per cent compared to 2015. This growth is especially good compared to the 4 per cent growth in global tourism, and the decline of 4 per cent in the Middle East tourism sector, according to the World Tourism Organisation. Large investments in travel, tourism, leisure and hospitality sectors will continue to at-

tract more visitors, in line with our strategy to welcome 20 million visitors by 2020,” said Sheikh Ahmed. The GCC, India, UK and Germany, the traditional source markets, account for 40 per cent of Dubai's total visitors. Average spending per visitor increased to Dh8,658 in 2016 from Dh8,252 in 2015. Total spending grew by 7.6 per cent reaching Dh126 billion, while the average length of stay per visitor was 7 days. “Nearly 47 contracts worth over Dh11 billion are set to be awarded in 2017 for projects at the Expo 2020 site

alone. The Public-Private Partnership Law passed in 2015 has further stimulated greater private sector involvement in Dubai’s construction market,” Sheikh Ahmed said.

Economic Sectors

Sector-wise, Trade accounted for 28 per cent of Dubai’s GDP in 2016 followed by Transportation and Logistics at 12 per cent and Financial Services at 11 per cent. The local tourism sector

grew by 11 per cent in 2016, and is expected to record further growth in the coming years, growing at 5 and 5.1 per cent in 2017 and 2018, respectively, said Sheikh Ahmed. The real estate sector is projected to grow by 4.3 per cent and 3.8 per cent respectively in 2017 and 2018, while the manufacturing sector is anticipated to grow by 3.3 per cent and 4.1 per cent this year and next, underpinned by the Dubai Industrial Strategy. “Dubai is playing a major and increasingly sophisticated role in regional and Gulf Property

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global value chains through transport, distribution, marketing services and research and development (R&D),” said Sheikh Ahmed. The transportation sector will also be a key driver of construction sector growth as large investment projects are moving forward including the Etihad Rail project, the Dubai Metro extension project and the expansion of the container port in Jebel Ali capitalising on Dubai’s role as a major logistics hub between three continents and its geographical location that links major trade routes. The UAE climbed 13

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places in the World Bank Doing Business report between 2014 and 2017 and now stands at 26 among 190 economies and 1st in the Arab region. The Global Entrepreneurship Index, which measures the health of the entrepreneurship ecosystems in 137 countries annually, placed the UAE 19th in the world and again, first in the Arab world.

Stability and Transparency

Sami Al Qamzi, Director General of Dubai Economy,

said the stable, transparent and healthy macroeconomic environment, highly developed infrastructure and strong institutions continue to provide the bedrock for a higher, more diversified and sustainable growth path for Dubai. “We are well under way to achieving the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, of transforming Dubai into a city of happy, creative and empowered people. We seek to reach the number one rank in Doing

Business by 2021 and be in the top 10 most competitive countries in the world in the next four years,” said Al Qamzi. “We are applying an innovative vision and strategy - of facilitating business, improving service efficiencies, creating new investment opportunities, and encouraging entrepreneurship. Dubai is building strong foundations of a globally competitive and sustainable economy and society,” added Al Qamzi. While the domestic trade sector was the chief driver of the emirate’s impressive GDP growth in 2016,

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tourism, real estate and manufacturing will dominate economic activity in the years ahead, Al Qamzi said referring to the latest economic outlook published by Dubai Economy. “The economy of Dubai grew by 2.85 per cent in real terms in 2016 when global GDP growth stood at 2.4 per cent. More importantly, Dubai has emerged as a major player in the world economy and enjoys a stronger position as a global hub and one of the top five international centres for trade, transport, finance and tourism. Looking ahead, real

economic growth in Dubai is expected to reach 3.1 per cent in 2017 and 3.6 per cent in 2018, accelerating Dubai’s transformation into a knowledge economy,” Al Qamzi concluded. Robust growth momentum of the non-oil private sector in Dubai was maintained in July, according to a new report. The seasonally adjusted Emirates NBD Dubai Economy Tracker Index slipped slightly to 56.3 in July but remained above the long-run trend (55.2). By sector, the wholesale and retail industry (index at 57.9) was the best perform-

ing category, followed by travel & tourism (56.3) and the construction sector (54.8). A reading of above 50.0 indicates that the nonoil private sector economy is generally expanding. Khatija Haque, head of MENA Research at Emirates NBD, said: “While the headline index continues to reflect strong growth in the non-oil economy in July, firms’ margins continue to be squeezed as they lower selling prices, particularly in the trade and hospitality sectors. Employment growth remains soft overall.” The positive overall trend

“Diversification, resilience and sustainability are enshrined in every project, policy and strategy that Dubai adopts, including, the Dubai Plan 2021, Dubai Industrial Strategy 2030, and Expo 2020. The oil sector now makes up for less than one per cent of Dubai’s GDP, while varied initiatives have opened up unprecedented opportunities for global businesses in several non-oil sectors...”

– Sheikh Ahmed bin Saeed Al Maktoum

for business conditions was supported by a sharp increase in output, despite growth easing to a slightly slower pace. The rise in business activity was attributed by panellists to favourable economic conditions and more projects, the survey showed. g Gulf Property

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UAE consumer spend to hit $261 bn by 2021

Gulf Property Exclusive

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household during 2016 was highest in the UAE when compared to other GCC countries, amounting to around $103,000, followed by Bahrain ($96,000). Housing was identified as the top spending category for UAE consumers with $75.7 billion recorded for 2016, accounting for 41 per cent of total consumer expenditure during the year. Food and non-alcoholic beverages was the second-largest category with $24.8 billion worth of spending during the same year, followed by transport, worth $16.7 billion. “The UAE‘s consumer mar-

ket is largely being driven by a fast-growing population with relatively high incomes, which are key economic fundamentals that support a robust long-term outlook for spending growth in the country,” Hamad Buamim, President and CEO of Dubai Chamber, said in a statement. Buamim pointed out that the UAE’s predominantly young and diverse population is attracting the interest of international brands and a growing number of e-commerce companies that are targeting tech-savvy consumers. He noted that the

country’s booming tourism market continues to drive consumer spending, especially within the retail, tourism, hospitality, and transport sectors. Several new mega developments are expected to be completed over the next four years in the UAE, which should enhance and diversify the country’s mix of retail and entertainment offerings, and further capitalise on the expected growth in consumer spending, he added. Communication was identified in the analysis as the fastest-growing category for UAE consumer spending

Over 350,000 companies to register for VAT

ore than 350,000 registered companies active in the UAE are expected to register for Value-Added Tax (VAT) as the economies of the six Gulf states enters into a direct tax environment. VAT will be implemented at 5 per cent on selected goods and services from January 1, 2018, according to a latest Federal Decree No. 8, issued by His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE. Federal law sets the general rules for the implementation of the new tax and includes some details on the goods and services subjected to VAT, as well as those that will receive special treatment. With one of the lowest rates in the world, the 5 per cent tax is set to be imposed on the import and supply of goods and services at each stage of production and distribution including what is deemed to be a supply. “The Federal Law is the bedrock of the UAE’s planned tax system, which was designed to meet the most stringent of standards and best practices,” said Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Fiwith a CAGR of 10.2 per cent expected through 2021. This trend will likely be supported by the country’s high penetration of Smartphones and other digital devices. The growing popularity of mobile applications, and Dubai’s

nance and Chairman of the Federal Tax Authority. “The Value-Added Tax, which is set to be implemented across all GCC countries over the next two years, will bring a new revenue stream for the national economy and GDP. This, in turn, will ensure consistency in the high quality of government services, to mirror the UAE’s advanced position on several global competitiveness indexes. “The new tax system will provide extra support for the Government to implement the vision of the UAE leadership and build a diversified and productive knowledge economy.” The law provides that all supplies of goods and services are subject to VAT at a standard rate of 5 per cent with the exception of specific supplies subject to the zero rate and what is exempted as specified in the Decreelaw. Tax imposed shall be the responsibility of a Taxable Person who makes taxable supplies or what is deemed to be a supply or on import. According to the details of the law released on Sunday, some goods and services will be subject to a zero rate of VAT, which allows suppliers to claim back VAT paid on business costs. Recentlybuilt residential properties will also be subject to VAT at a zero rate for the first three years after a property’s completion, to allow developers to recover VAT on construction costs. Some services and sectors related to eduadoption of smart city solutions are also expected to boost spending in this area. Health goods and medical services was named as the second fastest-growing category for spending with an expected CAGR of 8.2 per cent

cation and health care will also be zero-rated, including schools and universities that are funded or owned by the federal government. The regulatory framework will include more details about the tax implementation on the two sectors. According to the law, a supply of goods includes the transfer of ownership of the goods or the right to use them as an owner from one Person to another and an entry into a contract between two parties triggering the transfer of goods at a later time. A supply of service is any supply that is not considered a supply of goods. The law made two exceptions as to what constitutes a supply: the issuance or sale of any voucher unless the received consideration exceeds its declared monetary value; and the transfer of whole or an independent part of a business from a Person to a Taxable Person for the purposes of continuing such business that was transferred. A government entity is regarded as making a supply if said entity was not performing activities in sovereign capacity or if its activities are in competition with the private sector. The Cabinet – upon the suggestion of the Minister – issues a decision determining specific government entities whose activities are considered as “activities in sovereign capacity” and instances where these activities are considered not in competition with the private sector. g over the same period, followed by hotels and catering (CAGR of 8.1%). Education and leisure were also included among the fastestgrowing categories, with projected CAGRs of 8.0 per cent and 7.7 per cent, re-

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At A Glance

$183 billion

value consumer spend in the UAE in 2016

$261 billion

value of consumer spending in the UAE expected to reach in 2021

$75.7 billion

value of housing spend in the UAE in 2016

15 million

overnight visitors stayed in Dubai’s hotels in 2016

spectively. Going forward, high incomes, changing lifestyles, and increased health consciousness are expected to fuel consumer demand for goods and services in familyfocused spending categories, such as education, and transport, as well as premium household products and services. In addition, the analysis showed that consumer spending accounted on average for about 45 per cent of the UAE’s GDP, compared to a 39 per cent average for the GCC region, 45 per cent for developing Asia, 56 per cent for the EU, and 68 per cent for the United States. g Gulf Property

COVERSTORY

Sudhakar R.â&#x20AC;&#x2C6;Rao, Managing Director of Gemini Property Developers

Sudhakar R. Rao: A Game-Changer 48

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Gemini Property Developers

emini Property Developers is the real estate division of Gemini Energy Group, one of the well-known business groups in the Middle East and India.

Gemini Group has around 30 years of successful business experience in various fields, including oil and gas, Testing and Inspection services, Trading and allied fields. Founded in 1986 by Sudhakar Raghvendra Rao, the group was originally started as Sievert Group, specialising in technical Testing and Inspection before recently divesting that business to a

Game-Changing Payment Plan

Payment During On Plan Construction Delivery Option 1 25% 75% Option 2 35% 25% Option 3 35% 15% Option 4 35% 25% Option 5 35% 15% Option 6 35% 25% Option 7 35% 15%

Gulf Property Exclusive

udhakar R. Rao might be a new kid on the block, but he is a game-changer. As he prepares to deliver his first real estate project, the new developer announced a game-changing initiative that will overhaul the way people sell and purchase properties in the UAE and elsewhere. He is yet to deliver his company’s first project – Splendor at MBR City – a stylish development of 134 residential units located almost equidistance from Burj Khalifa – the world’s tallest building and The Tower – the future skyscraper – to be located near Ras Al Khor sanctuary. Two major highways – Al Khail Road and Dubai-Al Ain Road passes

French multinational giant. Gemini group has plans to develop state-of-the-art yet affordable luxury properties across the region, adhering to highest standards of quality in design, technology and materials. It strives to build a reputation based on quality, efficiency, meticulous planning, top quality amenities, practical designs, timely handover of projects. g

Post Handover Nil 40% in 2 years 50% in 2 years 40% in 3 years 50% in 3 years 40% in 5 years 50% in 5 years

by the Splendor at MBR City. The project will be connected to two new rail lines – the Union Rail and a future line of Dubai Metro. It is located at the Sobha Hartland community, within the Mohammed Bin Rashid City and sits next to Meydan Grandstand and Meydan One as well as Business Bay across Al Khail Road. So, the project has ample unique selling points for property buyers to consider from when purchasing. However, the current economic slowdown calls for out-ofthe-box thinking when it comes to attract buyers. While other developers have been scratching their heads, the management of Gemini Property Developers had other ideas. Call it sales innovation, Sudhakar R. Rao, Managing Director of Gemini Property Developers – through his preferred sales agent SPF

Realty – has launched a seven-tier payment plan that allows maximum freedom to a property buyer and allows him/her to make the payment within five years after hand-over almost ‘as per the customer’s wish and ability’. “It is an industry-first and a game-changing payment scheme that frees up the property buyer from a very rigid payment regime to a more customer-friendly payment model,” he says, as he launched the sales campaign for his maiden project, the Dh280 million Splendor at Mohammed Bin Rashid (MBR) City. Developer of Splendor at MBR City preparing to deliver its maiden project in Q1, 2018, officially launches firsttime customer focused payment plan extending up to five-years after handover – to help property buyers and free them up from the cost of home finance burden

COVERSTORY “It is an industryfirst and a game-changing payment scheme that frees up the property buyer from a very rigid payment regime to a more customerfriendly payment model...” – Sudhakar Rao Managing Director Gemini Property Developers

Under the innovative set of payment schemes, property buyers have the options to choose from an extended payment plan after paying 50 per cent upon handover and the balance payment on easy instalments at their convenience, choice and freedom. This will encourage and help the fixed-income end-users to enter into their dream freehold homes and pay at their ease without undertaking the bank finance cost. “The new payment plan in reality removes the burden of payment under stress and allows them to pay as per their convenience and thus eases the pressure on the property buyer,” Sudhakar R. Rao says. “The aim is to reduce the pains of the customers and make sure they remain happy throughout the acquisition phase, while as a developer, we share the burden Gulf Property

COVERSTORY

of the customer’s payment. We want to give them the freedom to pay at their ease, choice and convenience. “Once the buyer moves in to Splendor at MBR City upon paying 50 per cent, it frees up the rents – that could be converted into monthly instalments for five years – or as low as 0.83 per cent per month that could be paid in quarterly instalments – and property buyers can enjoy the benefits of living in their own freehold homes at Sobha Hartland within the Mohammed Bin Rashid City (MBR City) and its central location within the city of

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Dubai.” Splendor at MBR City is a stylish, synchronised and elegantly designed collection of 134 modern homes for the upwardly mobile families, who prefer to live at the heart of the city – yet within a sanctuary. Disconnect from the frantic, bustling city life while staying completely interconnected within one’s serene abode. Splendor takes the convenience of modern technology to a new level with its fully automated smart homes fitted into all the units within the building. This state-of-the-art technology allows seamless and

wireless control over several of the high-quality home amenities such as the curtains, lights, air-conditioning, media and much more to form a large, interconnected web. “As a customer-centric developer, we are always on the lookout for customer happiness and convenience – quality of finishing, timely delivery as well as ease in handover process. Customised payment plan is an extension of our customercentric approach in which, we are absorbing the risks of an extended payment plan by offering the customers the

convenience and freeing them up having to seek bank finance that comes with high cost,” Sudhakar Rao adds. “We believe, buying a property is a major decision in one’s life and involves significant investment. For most families, buying a home is the biggest investment and that’s why it needs to fit in to the lifestyle, convenience, and finances of the modern families. The move is aimed at encouraging more people to shift from rental homes to their own home without undergoing the pains of having to pay for both rents and

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property instalments for offplan properties. Prabhakar R. Rao, Joint Managing Director of Gemini Property Developers, says, “Usually, the customer has to comply with the payment plan designed by the developer and has to align his/her finances according to the developer’s plan. Also, some developers are offering posthandover payment plan which is a popular thing, whereas some customer may not want to go for it since he/she can avail bank mortgage. Gemini for the first time is offering the customer, the freedom to customise

Prabhakar R. Rao, Joint Managing Director of Gemini Property Developers

Sailesh Jatania, Chief Executive Officer of Gemini Property Developers

his/her payment plan according his/her financial situation. “Any buyer signing a Sales and Purchase Agreement (SPA) with us, can make arrangements to pay 50 per cent till he moves in to the freehold home by early next year, and pay the balance amount freed up from his rental expenditure. Which means, a buyer can own a home at Splendor at MBR City by paying 50 per cent of the price of the project.” Research reports show, Dubai’s real estate market that has matured over the years, has now become more of a buyers’ market. Gulf Property

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Splendor at MBR City is located close to the new heartland of Dubai _ Sobha Hartland at Mohammed Bin Rashid City, Dubai, UAE

Splendor at MBR City – the maiden property development project of Gemini Property Developers, will be completed in January 2018. An industry-first customised payment plan will help property investors to benefit from it attractive location, superior finishing and quality of property as well as ease in payment plan

The trend is to offer more convenient payment options to attract property buyers. Sailesh Jatania, Chief Executive Officer of Gemini Property Developers, said the new payment scheme comes just in time as Dubai’s real estate market is witnessing signs of upturn. “The new customised payment plan comes at a time when new investment is pushing sales in Dubai’s property market so much so that it has witnessed Dh132 billion worth of transactions in the first six months of 2017, about 16.8 per cent higher than the performance

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in the corresponding period last year. We believe this is the right time to stretch our hands to the end-users. “The customer can choose from customised payment plan for his apartment as per his convenience from a host of options made available by Gemini. Firstly, the customer can choose whether he/she wants a post-handover payment plan or not because we don’t want to push the posthandover plan if the customer does not want the same or he/she has mortgage loan available. “Secondly, he/she can choose how much percent-

age is desired to be paid post-handover (40% or 50%) and in how many years he/she wants to pay this (2, 3 or 5 years). As a developer, we not only offer excellent quality homes, but also take care of the financial needs of the customer in best possible manner.” Splendor at MBR City, the G+8-storey luxury residential building is being built at Sobha Hartland within the Mohammed Bin Rashid City, Dubai, and is scheduled for completion in January 2018. The project with a built-up area of over 320,000 square feet will include 134 stylishly

designed and elegant residential units comprising spacious one, two and three-bedroom apartments, penthouses and townhouses equipped with state-of-theart amenities. Apartment units range from 780 square feet to 3,400 square feet. The community will also have retail, shopping and entertainment facilities, along with much-needed green spaces. The new innovative payment plan is the result of a careful research and meticulous planning and reflects the deeper understanding of end-user need gap in the

COVERSTORY “Buying a property is a major decision in one’s life and involves significant investment. For most families, buying a home is the biggest investment and that’s why it needs to fit in to the lifestyle, convenience, and finances of the modern families...”

– Sudhakar R. Rao

market, insights of SPF Realty and the commitment and care of Gemini as the developer that have led to the creation of the game-changing price strategy where the property buyer dictates how s/he would pay for the property. Ranjit Chavan, Chief Executive Officer of SPF Realty, says, “This payment plan so far beats every other in the market and will encourage tenants to consider buying a home at Splendor at MBR City. This will free them up from the rent-related inflation and have their own peace of mind.

“Gemini Property Developers have entered the market with a different approach. For the last two years, they have focused on the development and construction of the project rather than sales and marketing activities. Now that the project is getting ready for delivery, we came on board to help sell and market the residential units.” Gemini Property Developers has completed the full structure of the project Splendor at MBR City, the company’s first luxury residential project at Sobha Hartland – a few months ago and currently preparing for the

completion of the project by the end of the year. The project is located at the center of Sobha Hartland – a new mixed-use development located between Al Khail Road and Meydan – and is close to the downtown of the future – the massive mixed-use project that has become a major destination. The project will border Meydan One on one side, MBR city – District One on the other and Meydan Grandstand at the backdrop. Kalpesh Sampat, Chief Operating Officer of SPF Realty, says, “This reflects a different property development

mindset and shows that developers are shifting focus on development and delivery rather than branding and marketing first. The new game-changing trend-setting payment plan is an extension of the developers’ vision to help the most important aspect of the development value chain – the home buyer – and their happiness. “As their sales and marketing partner, SPF Realty shares the same passion and customer-centric approach. This is going to create a new trend in the market and we encourage tenants and other customers to benefit from this attractive payment plan. You can’t really have anything better than this.” Splendor at MBR City is conceptualised by renowned consultants, Aedas which is one of the five largest international architectural firms, while detailed designs were carried out by Dubai Consultants. The project, once comGulf Property

COVERSTORY

pleted, will offer excellent views of the Dubai skyline via two Expressways as well as nearby Ras Al Khor bird sanctuary. The project is self-financed by the group as well as funded by banks and the construction of the project is not linked to off-plan sale of the units. Enabling works had earlier been carried out by National Piling before Global Green Bridge Contracting LLC came on board as the main contractor in August 2016. The company had already registered the project with the Real Estate Regulatory Authority (RERA) with an Escrow account as per the Trust Account Law. Global Green Bridge Contracting is currently carrying on external and internal finishes for completion. Synonymous with trust and credibility, Gemini Property Developers is building on the strong legacy by set by Gemini Group that has around 30 years of successful business operations in various fields, including Testing, Inspection and Certification (TIC) services, trading and allied fields for the energy sector. Founded in 1986 by Sudhakar Rao, the group has an established presence in India and Middle East. Dubai’s Roads and Transport Authority (RTA) has already planned a new purple metro line running under the ground at Hartland. But another rail line has been planned to run near the project. Sobha Hartland is the only luxury community development located on the Dubai Water Canal. In an exclusive interview with Gulf Property, Sudhakar

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Sudhakar R. Rao, Managing Director of Gemini Property Developers

R. Rao, elaborated thoughts. Excerpts:

his

Gulf Property: How confident are you on the prospects of the real estate market in the UAE? Sudhakar R. Rao: We are very confident about the future prospects of the real estate and construction sectors and we believe the growth will be driven by the government’s Vision 2020 and Vision 2030 – that will drive the economic growth. So every business will have something to look forward to. For example, the knock-on effect of the Expo 2020 – we

all can see and feel. How many new roads, metro works and interchanges are being executed? We could see government investing billions of US dollars. Recently, the government has secured US$3 billion funding for the Al Maktoum International Airport – the largest aviation hub in the world. There will be business for everyone and it will come due to the government’s vision – that has surprising elements for all of us. And we are talking about pleasant surprises! What happens after the

Expo 2020? It is a one-off event. There will be many more surprises that we do not know about. As Dubai prepares for the next phase of growth, it will bring many international events – be it the Olympics, Asian Games or other international events – that will bring enough businesses for all and help support jobs and create additional employment. Besides, more than 20 million hotel guests annually will continue to fuel consumption, in addition to the affluent consumers living in the UAE.

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Splendor at MBR City will be completed in January 2018

“As a customercentric developer, we are always on the lookout for customer happiness and convenience – quality of finishing, timely delivery as well as ease in handover process. Customised payment plan is an extension of our customer-centric approach in which, we are absorbing the risks of an extended payment plan by offering the customers the convenience and freeing them up from finance cost...”

– Sudhakar R. Rao

Don’t you think the market might be suffering from oversupply? Economies go through cycles. Sometimes you have a situation of low supply and high demand – when developers start undertaking new projects and then you see the market flooded with supplies while the demand might be subdued – when prices suffer. However, the latest Dubai Land Department report shows, land and property transactions jumped 16.8 per cent to US$36 billion (Dh132 billion) – higher than some countries’ GDP.

This shows that the market is not suffering from oversupply. While the economy picks up next year, so will the real estate market and all these units will be snapped up. That’s one of the reasons why we are not promoting sales aggressively – rather focusing on construction and delivery. By the time we deliver, all units will be sold out. And guess what – they will command a higher price than the current market price. Could you kindly elaborate the customised payment plan?

It is a known fact that property buying is a major decision in one’s life and involves significant investment. For the first time in history, Gemini as a developer is giving the customer the freedom to select the payment plan most suited to him based on his financial situation. He can choose from a host of options offered by Gemini.

So, if a property buyer wants to pay the balance payment as a monthly instalment – for 60 months – will you allow? Yes, he can pay in 60

months from handover if chooses so. As far as instalments are concerned, we have designed quarterly instalments as against monthly instalments to keep it simpler. On the payment at handover – how flexible are you on the 50 per cent payment on handover? If a customer could pay only 30-40 per cent during handover, will you accept the buyer? The payment to be done during construction is 35 per cent and on handover it is 15 per cent. The customer can pay balance 50 per cent post-handover. Gulf Property

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Will there be penalty if a buyer fails to make the payment by a few days or weeks? The customer will be required to issue post-dated cheques for all the instalments in advance including post-handover instalments. Dishonour of cheques on due dates will be considered as default. However, the customer can make good the default in 7 days of being notified and no penalty will be applicable in such a case.

How many units have been sold out so far? So far, more than 35 per cent

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of units are sold out and sales are continuing at brisk speed.

Do you expect the project to be sold out by December? Why do you say that? Our show apartment has been made ready recently and we are experiencing greater speed in sales after this. This makes us more confident that the project will be sold out soon.

What is your expectation from the Cityscape â&#x20AC;&#x201C; as you will be allowed to sell the property onsite at the

exhibition? We have big hopes on Cityscape and expect to achieve significant transactions since this is the first time after so many years that DLD has allowed onsite sales.

Will you compensate the buyers if there is a delay in delivery? Yes, as per our Sale and Purchase Agreement, in case of default by Gemini beyond the agreed delivery timeline, the buyer shall be compensated at the rate of 3 per cent per annum. If certain units remain un-

sold, what will you do? Will you put them in rental/lease? Of course, it will be our endeavour to sell all units on or before completion. In the unlikely scenario of some units remaining unsold, it can always be put on rent.

Do you think the current regulation on mortgage is too tight? Do you think relaxing mortgage regulations will help you sell faster? We donâ&#x20AC;&#x2122;t think that the current mortgage rules are too tight. Offering 75 per cent maximum mortgage is a good proposition.

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Inset: Gemini management, including Sudhakar R. Rao, Managing Director, Prabhakar R. Rao, Joint Managing Director and Sailesh Jatania, Chief Executive Officer, speaking at a recent press conference to announce the company’s new customised payment plan

We have designed the post-handover plans to help those buyers who are not eligible for mortgage loan in UAE due to various reasons.

Have you fixed the service charges? What would be the service charge? Service charges are not yet fixed and will be as per RERA approval on completion. However, they will vary in the range of Dh14 to 15 per square feet based on our experience.

You are referring to it as a game-changing move. How? Can you explain? So far in history of UAE real estate goes, no developer has shown this initiative which has the potential to attract property buyers in a big way. The idea of customer choosing his own payment plan was unthinkable so far. Many prospective buyers were not the fence due to being forced a particular pay-

ment plan and could not buy since it may conflict with their financial needs. Now, here is a developer which gives him freedom to choose his own payment plan and decide on his own terms. This is definitely a game-changer.

You call it an industry first. Is it so? How? As explained, there has been no instance of a developer in UAE, giving the customer a customised payment plan.

How is Dubai’s real estate market? Most reports say that the market is still declining. The facts are however different. In first half of 2017, the transactions increased significantly (almost 17%) compared to last year first half, as per DLD records. The decline in prices has also been arrested as per latest trends. Why has Gemini embarked on this payment scheme?

Are you finding it difficult to sell property? Gemini’s aim is to create happy homes for happy families. The current announcement is just a further step in this direction. This is also in line with current market trend but we are going a step further in offering affordability and choice to customer.

In view of the current market situation, are you revising your selling price downwards? We are not revising prices downwards as we are comfortable with our pricing which is in line with our quality and facilities being offered. What are the prices of various units? Could you give us a breakdown? Splendor has prices for one bedroom apartment starting as low as Dh1 million with prices of penthouses / town-

houses going up to Dh5.5 million. We also have a choice of 2 and 3 bed units.

What is the price per square foot? The price of an apartment has been fixed considering its floor, view etc. and so there is no fixed price per sq ft. On an average, the prices are in the range of Dh1,300 to Dh1,450 per square feet.

What is the development value of the project How are you financing the project? The project is funded from promoters’ own funds and project funding from banks. The development value can be put as Dh280 million Is it going to be completed as you are saying – by the end of 2017? The project will be completed by January 2018 and handover expected to begin in March 2018. This is in line with our earlier committed dates. g Gulf Property

INTERVIEW wasl1 – a new freehold community in the making

wasl changes Dubai’s property landscape

Gulf Property Exclusive

ubai Government’s largest asset management arm, wasl Asset Management Group is gradually changing the real estate landscape of Dubai by introducing game-changing properties across different locations in the emirate that has strategic significance. wasl Asset Management Group’s latest project – wasl1 – is going to change the game in the emirate’s

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freehold property landscape – as it is being developed next to Zabeel Park, next to Karama, Mankhool and the Dubai World Trade Centre and will be connected to the Dubai Metro. The strategic location of the new project will help residents to relocate close to Dubai’s main commercial districts around Sheikh Zayed Road, starting from the Dubai World Trade Centre and Dubai International Financial District. The move comes three years after Wasl announced its foray into freehold market, after years of asset management expertise

in leasehold market, with more than 35,000 units under management. Wasl said, it is forging ahead at Wasl1 – the company’s iconic parkside freehold master development in the heart of Dubai. Enabling works are now underway following the appointment of Kele Contracting for Phase 1 of the project. Hills and Fort Construction LLC is also on site managing the infrastructure for the entire development, which is taking shape as part of Wasl’s growing freehold portfolio. Hesham Al Qassim, CEO of wasl Asset Management

Group, commented: “Wasl1 is the latest milestone in our mission to provide Dubai with community living spaces that blend the best of city living with a lifestyle surrounded by bliss. “We are especially proud of this project, which is our first master development and reflects Dubai’s vision for the freehold sector. It promises residents a peaceful island in the middle of the city, creating a sophisticated synergy between urban offerings and holistic balance that resonates with the modern-day buyer.” Phase 1 of the project –

INTERVIEW “[wasl1 is our first master development and reflects Dubai’s vision for the freehold sector. It promises residents a peaceful island in the middle of the city, creating a sophisticated synergy between urban offerings and holistic balance that resonates with the modern-day buyer...”

– Hesham Al Qassim Chief Executive Officer, wasl

Hesham Al Qassim, Chief Executive Officer of wasl Asset Management Group

Park Gate Residences – is located adjacent to Zabeel Park, where tenants will find contemporary apartments in four luxurious residential towers on two podiums. The 746 units offer tenants the option of one, two and three bedroom apartments as well as podium townhouses and penthouses, all of which overlook the lush green gardens of Zabeel Park — making nature their private courtyard. Located just a stone’s throw from Sheikh Zayed Road and the Jafiliya metro station at the gateway between Old and New Dubai,

Park Gate Residences will keep residents connected with every end of the city while also providing a fully integrated set of lifestyle choices right at their doorstep. In the nearby serenity of Zabeel Park, residents will find exceptional amenities including lawn areas, a swimming pool and water features. Park Gate Residences will feature children’s play areas on the podium roofs; a fully equipped gymnasium with changing rooms, a multi-purpose hall and another children’s play area; and an entire landscaped

area between the podiums with water features and a terrace with cafés and restaurants. Offering every convenience and practicality, Park Gate Residences will also provide tenants with 1,000 parking spaces in two basement and four podium level car parks. While supplying the residential market with hundreds of new must-have apartments that promise to unlock an extraordinary lifestyle, the project also encompasses 25,000 square feet of leasable retail area that will mean there is never a dull moment at Park Gate Resi-

dences. The company looks forward to the completion of the first residential units at wasl1, which will be a stunning addition to wasl’s growing freehold property portfolio. Hesham Al Qassim, CEO of wasl Asset Management Group, elaborated his thoughts on his company’s strategic move into the freehold market and his views on the overall real estate market. Excerpts:

In 2014, wasl announced a major foray in the freehold property development business. Can you give an overview of your freehold developments? Hesham Al Qassim: Our first entry into the freehold property development business came in 2014 with the announcement of a complete Gulf Property

INTERVIEW

project – Hyatt Regency Dubai Creek Heights – which represents our vision for modern residential living. We have since then built on this vision by bringing three further freehold developments to Dubai’s property sector including wasl1, wasl Gate and Nad Al Hammar Gardens, which were launched in 2015. Work is well underway at these projects and each will bring a unique offering to Dubai’s real estate sector. At wasl1 – our iconic parkside freehold master development in the heart of Dubai – we will be providing resi-

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dents with luxurious apartments and state-of-the-art amenities at the gateway between Old and New Dubai, keeping them connected with every end of the city as well as the serenity of nearby Zabeel Park. Enabling works are progressing and Kele Contracting and Hills and Fort Construction LLC have been appointed as the contractors for phase one. wasl Gate is situated at the entry to Dubai from Abu Dhabi near Jebel Ali, and will provide residents with 256 townhouses and a community centre as part of phase one, as well as 1,440 hillside

apartments as part of phase two, and a lifestyle-oriented hospitality and entertainment offering. Amana Contracting has commenced site work for phase one. Nad Al Hammar Gardens is a huge development that will cover approximately 6 million square feet of residential, mixed-use, school and showroom plots. Nad Al Hammar is an upcoming area and we are pleased to be adding value to it by introducing one of the first freehold developments in this part of the city, where residents will benefit from exceptional community fea-

tures and excellent connectivity to all parts of Dubai via Mohammed bin Zayed Road.

You have already delivered the Hyatt Regency Dubai Creek Heights project, being operated by Hyatt Hotels Corporation. How has your experience been in selling the residential part of the project? How much of it is sold out? Hyatt Regency Dubai Creek Heights is fully serviced by Hyatt and located at the heart of the city in Dubai Creek – a location that offers a unique contrast between the modern Downtown area

INTERVIEW wasl1 will change the freehold landscape of Dubai, as it brings freehold ownership to closer to Dubai’s traditional downtown

planned with a metro station already linked to it, and it will support the financial centre by providing more commercial and residential space in this important area of this city. Enhancing Dubai’s infrastructure is fundamental to everything we do.

Do you plan to develop freehold projects even closer to the traditional downtown of Deira and Bur Dubai? At wasl, our projects are determined by what Dubai needs, how much sustainable value they will add to the city, and whether or not they make good business sense. This strategy has informed our expansion into new areas of the city, and with wasl1 and Nad Al Hammar Gardens in addition to wasl Gate we are pleased to be rejuvenating more traditional parts of Dubai. Going forward, we will be following the same strategy and above all providing what our city needs – it is exciting to imagine where this may take us next. and the historic Bur Dubai and Deira districts. This makes it a very unique and strategically situated project, and as a result it has attracted a high level of interest. We have sold all of the residential units that we set out to, while also continuing our strategy of investing in our own projects and building up our leasing portfolio by retaining some units.

Your latest announcement to build wasl 1 brings the freehold community close to the downtown, Karama and Dubai World Trade Centre. Could you share

some more details – such as construction time line and completion. Do you think the project will put additional pressure on the infrastructure? Work at wasl1 is on track and as mentioned above, we have appointed contractors for phase one – Park Gate Residences – which is located adjacent to Zabeel Park and will include 746 units housed in four luxurious residential towers. These will be complemented by a comprehensive range of amenities including lawn areas, a swimming pool, a fully equipped gym-

nasium with changing rooms, a multi-purpose hall, and an entire landscaped area with water features and a terrace with cafés and restaurants. While supplying the residential market with hundreds of new must-have apartments, the project also encompasses 25,000 square feet of leasable retail area. As an investment arm of the Dubai government, it is important to highlight that all of wasl’s projects are preplanned to carefully meet the needs of the city and not only support but also add to its existing infrastructure. Our wasl1 project was

Since then, wasl has announced a number of new and mega projects on the freehold space. What are the major freehold projects undertaken by Wasl so far? As mentioned above, we have completed one freehold development – Hyatt Regency Dubai Creek Heights – and are currently developing three more including wasl1, wasl Gate and Nad Al Hammar Gardens. wasl conducts continuous research to identify demand in the freehold sector and meet it with projects that are unique, strategically located and underpinned by our viGulf Property

INTERVIEW

sion for modern residential living. With this strategy in mind, we always have more projects in the pipeline.

Could you give us some development updates of your key freehold projects? At wasl Gate, Amana contracting has commenced site work for phase one, while at wasl1, enabling works are progressing and Kele Contracting and Hills & Fort Construction LLC have been appointed as the contractors for phase one. At Nad Al Hammar Gardens, we are on track and

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the project is progressing as per the set timeline. We have also launched wasl Tower, which is not a freehold development but represents one of our landmark projects. Arabtec has begun site work on this ambitious project, which combines a unique blend of residential, commercial and hospitality elements. The tower will contain not only 148 luxurious residential apartments and a full suite of sports facilities, retail outlets, restaurants, cafés and other services, but also Dubai’s second five-star Mandarin

Oriental hotel with a further 257 rooms. wasl Tower will incorporate ceramic façades with photovoltaic solar panels to help regulate its interior temperature and reduce ambient noise, while its vertical garden will support sustainability and help to significantly reduce the tower’s carbon footprint. The development will provide a fully integrated residential offering and is being developed as a commanding addition to the city’s skyline.

What is your view of the UAE and GCC economies – in view of the low oil

price environment? Has the UAE adjusted to the new low-oil price environment? Do you see this as a challenge for Dubai? I don’t see this as a challenge – in fact, Dubai challenges itself by setting new goals and benchmarks for national development. For this reason, Dubai has followed a strong diversification strategy that has successfully shielded the economy from the impact of low oil prices. I am highly optimistic about the UAE and GCC economies, and particularly Dubai’s, because our government has a proven

wasl Gate

INTERVIEW tional identity of the city.

track record in achieving its long-term visions.

Could you also give us an update on some of your leasehold projects, such as wasl District in Deira? When do you plan to complete the project? How much has been invested in the project? I am pleased to confirm that wasl District is now complete, bringing residents an authentic blend of traditional Emirati architecture with a range of modern amenities and facilities in the Naif area of Deira. We are very proud of this

project, which is underpinned by our deep respect and appreciation for our country’s heritage, and our efforts to preserve and share it by revitalising older areas of Dubai. The completion of the final phase, which incorporates residential, commercial and office components, follows the launch of wasl District Souq in 2015, which is now a fully-fledged retail and shopping environment. At wasl District, tenants will find meticulously finished residential apartments as well as 15 food and beverage units and 23 retail units

on the ground floor. All of these are fully equipped to meet a wide variety of retail business needs and benefit from high footfall. wasl District also features four floors of modern, commercial office spaces that range from 689 to 1,356 square feet in size. This project is the ideal address for residents and professionals who want to live and work in the heart of the city – both physically and culturally. It is also an exquisite destination for the anticipated millions of visitors who are expected to visit Dubai for Expo 2020, enabling them to discover the tradi-

wasl has been looking at re-developing parts of the ‘Old Dubai’ to recreate the age-old charm of the emirate by its urban regeneration programmes. Could you elaborate further if you are planning to develop more projects such as wasl district – that strengthens the traditional look and feel of Dubai and reinforces the traditional Arabic architecture for tourist attractions? We are very pleased with wasl district because at this culturally-inspired project we are offering tenants the perfect mix of old and new. By blending traditional architecture with modern amenities in the Deira area, we are proud to be rejuvenating an older part of the city and celebrating our heritage. Our dar wasl project similarly combines traditional Islamic design and modern amenities to offer a charming fusion of tradition and modernity. These are unique developments but I believe that when you survey Dubai’s skyline and urban fabric, it is clear that wasl has made a distinctive mark with all of its projects. This is thanks to our exceptional design and development teams, who translate our overall aim to drive the growth and development of Dubai with distinguished projects that bear the wasl signature. wasl has been at the forefront of the affordable community development. Could you give us an overview of your affordable home development programme? A few years ago we conducted in depth research that Gulf Property

INTERVIEW

revealed a growing demand for affordable housing, which we have since responded to by launching four major projects in this segment: Al Qusais Development, Port Views, Ras Al Khor and Warsan. Al Qusais Development in Qusais 5 consists of 62 buildings that are home to 6,200 residential units as well as high-end facilities including a hypermarket, a clinic, a gym, schools and kindergartens. DX has been appointed as the infrastructure contractor, work is underway and the project will be completed in two phases by March 2022. Port Views includes two mixed-use developments, four residential developments and one infrastructure development. The infrastructure development is due for completion by the end of the year and the rest will follow in 2018 and 2019. It is a highly ambitious development that

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“Dubai is a safe haven for investment, so while I would say that the residential market is wellsupplied, I would also highlight that there is still immense potential for growth...”

– Hesham Al Qassim

will bring thousands of units to the market. Our Ras Al Khor project has been launched to provide 2,516 residential units housed in 42 buildings, with health clubs, a school, a mosque, retail shops, and green gardens with water fountains. Infrastructure works are complete, enabling works are underway for phase one, and phase two and phase three are in the preparatory stage. The project is expected to be released onto Dubai’s leasing market at the end of 2020. Meanwhile in Warsan, we are developing 26 buildings

that will provide hospitality employees with 3,866 residential units and numerous recreational facilities including green lawns, swimming pools, a health club, and sports stadiums. This is an important part of our Expo 2020 preparations and infrastructure works are in progress. Rents have begun to decline across Dubai. Since you have a strong leasing portfolio – that generates a healthy guaranteed cash flow – do you anticipate a slowdown of your ongoing project develop-

ment? Our leasing portfolio is very healthy, our occupancy rates are almost 100 per cent, all of our projects have been leased out successfully, and work is on track across our developments, so I do not anticipate any kind of slowdown in our ongoing project development.

wasl has a strong hotel portfolio with more than 5,000 guest rooms and hotel apartments under management. How many new hotels, guestrooms and hotel apartments will be added by 2020? By 2020, wasl will have added a further 4,500 rooms to its hospitality portfolio with the addition of 15 new hotels that are currently in the pipeline. Reflecting our efforts to cater to all segments of the market, these projects range from mid-range hotels to some of the world’s leading

INTERVIEW

five-star destinations. We have recently launched mega hospitality projects with some of the world’s top hotel operators, including a first-of-its-kind destination with MGM Resorts International. This will see us bringing the internationally renowned MGM Grand and Bellagio hotels to Dubai, which will be situated in one of the city’s most popular spots. The hotels are due for completion in 2021 and will be home to 1,000 rooms and hotel apartments, as well as 10 private villas and an unrivalled entertainment, leisure and accommodation offering. We have also recently launched Dubai’s first Hyatt Centric The Palm and the city’s second luxury Mandarin Oriental hotel in wasl Tower. At the same time, we have continued to address the growing demand in the midrange market by completing

“Around 5,400 completed residential projects have been sold in the first five months of 2017, and a further 78,000 residential units are under construction and due for completion by 2020,”

– Hesham Al Qassim

five hotels in this segment. These include two Hyatt Place hotels, two Hilton Garden Inns, and Le Meridien Fairway, which encompass a total of 753 hotel rooms. This has proven to be a successful strategy, as these hotels are consistently achieving occupancy in excess of 85 per cent.

Are you planning to launch new projects this year? wasl continues to monitor the rhythm of the market and we are continuously planning for the future. We always have new projects on the drawing board

and this year has already seen the launch of many exceptional projects.

Will you call the current residential market as ‘oversupplied’, or ‘well-supplied’? In today’s competitive marketplace, developers are taking more care than ever before to meet specific needs and conduct proper research before launching new projects. Thanks to this approach, Dubai continues to maintain its attractiveness as an investment destination. This is confirmed by Dubai

Land Department’s latest research, which reveals that real estate transactions for the first half of 2017 rose by 16.8 per cent compared to the same period last year. They represent a total value of Dh132 billion, which was generated from 36,000 transactions – a 26 per cent increase over the first half of 2016. In addition, 5,400 completed residential projects have been sold in the first five months of 2017, and a further 78,000 residential units are under construction and due for completion by 2020 – a very important year for Dubai. Dubai is considered a safe haven for investment, so while I would say that the residential market is wellsupplied, I would also highlight that there is still immense potential for growth as we continue to strengthen our reputation on the global stage. g Gulf Property

INTERVIEW

Over-building a key challenge: Ismail

Gulf Property Exclusive

evelopers in the Gulf countries are ‘overbuilding’ projects as high as up to 10 times of the actual demand, which, a top industry analyst, termed as ‘scary’. “The GCC countries are overbuilding realty on an epic scale. The value of the projects under development in 2016 equates about 10 years’ worth of work,” Ismail Al Hammadi, Managing Di-

Gulf Property

rector of Al Ruwad Real Estate, said. In an exclusive interview with the Gulf Property, Ismail Al Hammadi, Managing Director of Al Ruwad Real Estate, elaborates his thoughts. Excerpts:

Gulf Property: How do you view of the current situation in Dubai’ real estate sector? Ismail Al Hammadi: A slowing rate of decline across all sectors of the Dubai real estate market suggests increasing stability and the expectation of the market ‘bottoming out’ before the

end of 2017. The first quarter of 2017 has hardly seen any changes in rents or prices in the apartments or villa segments, while last year registered a 7.9 per cent decline in villas and 2.9 per cent in apartments. This suggests that the market is poised to recover and that the residential sector is close to the bottom of its cycle. The only question remains the timing of this recovery, as there are several internal and external factors that the real estate market is not immune to, such as global uncertainty, oil prices, regional

geopolitical and economic factors which are likely to play a role in the current downturn. Many people think the current market situation offers the best time to buy a property. Do you agree? Why? If you ever dreamed of owning your own place in Dubai, 2017 may be the year for you. Buying off-plan has made a huge come back in the past years, with tighter regulations in place to keep customers’ money safe. Since the crash in 2008, off-plan buying has become

INTERVIEW “If you ever dreamed of owning your own place in Dubai, 2017 may be the year for you. Buying off-plan has made a huge come back in the past years, with tighter regulations in place to keep customers’ money safe...”

– Ismail Al Hammadi Managing Director Al Ruwad Real Estate

Ismail Al Hammadi Managing Director Al Ruwad Real Estate

a little bit of a ‘dirty word’. However, off-plan investment nowadays is viewed as a viable solution by many, as developers are offering generous payments plans for their projects. While the UAE Central Bank’s regulations define the eligibility of various categories of borrowers based on a loan-to-property value ratio (LTV), the key developers in the market have come up with their own payment plans being driven by the goal to attract interest in off-plan investment, allowing would-be buyers a 30-70 per cent ratio, or even as low as 10

per cent. Major developers like Emaar, Damac or Ishraqah, have all secured mortgage lending for their off-plan projects, making buyers feel safer and more confident to invest in these types of projects.

There is a genuine concern among many industry observers of an oversupply situation in the market. Do you share the same concern? Why? There are 35,000 units currently scheduled for completion this year, which would bring the number of residen-

tial units on the market to 502,000. As in past years, though, it may happen that the actual number of deliveries, to be lower than expected, with deliveries in recent years typically equating to about 35 per cent per cent of forecasted numbers. The hospitality sector, however, led by the Dubai Tourism Vision and Expo 2020, has witnessed a concern of oversupply, with more than 5,500 rooms added since 2016 and 1,100 only in the first quarter of 2017, equating a total number of 79,000 keys.

Nonetheless, the top developers in the industry have dismissed such concerns and vowed to go ahead moving full steam with new hotel projects, as Damac has revealed its plans to cover 10 per cent of hotel supply by 2021. Even though the hotel room demand has increased with 5 per cent, the highest escalation since 2013, the revenue per available room, a key performance indicator for hotels, has declined to 9 per cent due to a rapid growth in supply.

What needs to be done to stimulate the market? ReGulf Property

INTERVIEW

duce property registration and other fees? The government of Dubai has continuously worked towards growth and stability, and thoroughly efforts were made to boost the market, as 47 new Expo 2020 construction contracts worth Dh11 billion have been awarded this year only, with the sole purpose to make Dubai a worthwhile investment choice. Infrastructure development has a direct correlation with real estate and economic expansion and it is meant to foster to an increase of property prices over the next years, which will encourage buyers to invest sooner than later. Other factors came into play as well, as UAE has opened its borders to Russian and Chinese citizens, who now can enter the country with visa on-arrival. China was among top 10 nationalities investing in the UAE, with Dh1.74 billion invested in 2016, and the country has witnessed a 20 per cent increase in tourism activity since the new visa policy has been amended.

Gulf Property

Affordable Homes

hat do you think could help spearhead affordable homes – now that the market has become more real with real developers, real buyers on the ground? Dubai, a city where the luxury and ultra-luxury constituent has been the main focus since the establishment of the freehold market in 2002, has received a wakeup call in its diverse social structure’s needs: the lack of affordable housing. The property registration fee, although perceived high by many, has been implemented as a necessary step in order to avoid quick transactions, which are unhealthy for the market and may result in sudden price increases. On the other hand, the Dubai property registration fee is lower than in more than 120 countries, with UK for exam-

Communities without affordable housing quickly become segregated by income and family background. Well-placed affordable housing developments allow communities to welcome a wide range of families and to create a vibrant, diverse, group of residents. Dubai has picked up a pace in the ever-growing affordable housing issue, with more than 20,000 units expected to be delivered in 2017 in outskirts areas like Dubai Silicon Oasis, Dubai Sports City, with Dubailand leading the way. We foresee that this trend will continue, as developers are attempting to address the needs of ple ranging from 4 to 10 per cent, France 8 per cent, or India 7.3 per cent.

What is your view on service charges? Do you think this is an issue, especially within the affordable home communities? The purpose of investing into a property is to create an asset that will increase over

cost-conscious young consumers who prefer modern, well-planned community living, attractively priced. The government of Dubai has already taken the first action steps towards the diversification of the market, requiring the renovation of some of Dubai's older areas, to cater to the needs of lower-income residents who are working in key sectors and have supported the economy and whose housing expenses cannot exceed 30-35 per cent of the household income. This policy targets residents with a monthly income varying from Dh3,000 to Dh10,000. g years. However there are certain hidden fees and recurring costs that can add considerably to the cost a property, making it less appealing as a long-term investment. In my opinion, service charges, even though they are considered the “bad boys” anywhere in the world, not only in Dubai, they are a

INTERVIEW

Ismail Al Hammadi Managing Director Al Ruwad Real Estate

“necessary evil”. Since the introduction of the freehold property in Dubai in 2002, investors from more than 150 countries have been pouring billions into the real estate market and hundreds of towers have been built. But as these towers are aging, owners are facing the consequences of failing to prepare for inevitable upgrades. Service charges can be regarded as fees or as contribution, depends on the perspective. Service charges benefit all occupiers by tending to the common areas of a building or a community including indoor and outdoor elements like corridors, elevators, landscaping, security, swimming pools, etc. Failing to fix and upgrade them can result in serious risks of safety hazards for occupiers, diminishing building value, and resale price. Thus, creating such compulsory funds may cause some irritation among the owners, but they are imperative in a

Value-Added Tax (VAT)

Overbuilding

o you think the developers are ‘over-building’ homes? According to a report conducted by AT Kearny, titled “The perfect storm”, the GCC countries are overbuilding realty on an epic scale. The value of the projects under development in 2016 equates about 10 years’ worth of work. Each year between 2016 and 2020, 7 to 10 times more project value will be

long-term scheme.

Should developers diversify portfolio by adding hospitality, retail and commercial assets? Yes, definitely. With the government’s efforts to improve the educational standards across the region, this segment has lured an increased number of investors and developers seeking to diversify

delivered than in the boom years 2006-2008. This sounds scary, especially that IMF predicted a 3 per cent economic growth in the GCC in 2017, compared to an 8 per cent in 2008. Nevertheless, Dubai has built a sturdy foundation on its projects’ outlay, as the city will be hosting Expo 2020, and the investors will be multiplying. There is a less likely risk of oversupply and overcapacity in Dubai, than in other GCC regions. g their portfolio, same goes for hospitality, retail and commercial assets. Part of sound portfolio management is diversifying investments so that if one type of investment is performing poorly, another may be doing well. Returns on some alternative investments are based on factors unique to a specific investment.

hat do you think the introduction of ValueAdded Tax (VAT) would have on the real estate sector, if at all? The construction and supply of commercial, industrial and retail properties, in addition to the construction of infrastructure, is treated as subject to VAT at standard rate – i.e. 5 per cent as expected in the GCC, while the residential property (sales and leases) will be exempt from VAT. It is expected that the VAT imposed on commercial properties to have as a repercussion an increase in prices over mid to long term, however there will be some landlords who may decide to place their property attractively and absorb the increase in the short term. However, the new VAT law exempted real estate for the first three years. Application of VAT to the property development and construction industry is a far more complicated challenge than first meets the eye. g An alternative asset's lack of correlation with other types of investments gives it potential to increase or stabilize a portfolio's return. As a result, alternative assets can provide an additional layer of diversification for money that is not part of the initial core portfolio, though diversification cannot guarantee a profit or ensure against a loss. Gulf Property

INTERVIEW “Growing uncertainty in the Gulf region may have an impact deterring investors from entering the market, while simultaneously encouraging other investors to exit, prompting reductions in sales prices...”

– Ismail Al Hammadi Managing Director Al Ruwad Real Estate

With the addition of many Real Estate Investment Trusts (REITs) who would be looking at snapping up chunks of ready-to-movein properties, how do you see the market shaping up in 2018? There is room for 10-20 REITs in Dubai, and their presence started to become known since 2014 only, with the launch of Emirates Reit on Nasdaq Dubai. For the UAE’s real estate market, REITs are a good omen and could represent a significant growth, as per Singapore’s model, where 32 REITs and six stapled trusts

Gulf Property

are operating as instruments that offer investors the opportunity to invest in a professionally managed portfolio of real estate, through the purchase of a publicly-traded investment product. We can say that, at the moment, the Dubai market is under resourced in terms of investment grade products, and that REITs could be an attractive prospect for investors seeking other opportunities to subsidise their capital. The strong US Dollar represents one of the biggest impediment of the Dubai real

estate recovery. However it is expected that the additional investment around the Expo 2020 site and the shaping up of few new leisure and entertainment projects to gradually start to impact the market in 2018.

Looking at how things are shaping up in the geo-political and economic situation in the Gulf, do you see external factors affecting the growth of the real estate market in the UAE? There are several internal and external factors that the real estate market is not immune to, such as global un-

certainty, oil prices, regional geopolitical and economic factors which are likely to play a role in the current downturn. Growing uncertainty in the Gulf region may have an impact deterring investors from entering the market, while simultaneously encouraging other investors to exit, prompting reductions in sales prices. However, for the first time since 2008, the real estate market may observe a reduced impact in the magnitude of decline in prices caused by macroeconomic and political conditions, as

INTERVIEW

Ismail Al Hammadi Managing Director Al Ruwad Real Estate

the market has become more resilient since then with the introduction of regulatory measures designed to reduce the influence of any market disruptions and speculative behaviour and attract stable capital, creating an environment less susceptible to large scale volatility.

Dubai real estate market moved from almost no regulation to a very well-regulated market â&#x20AC;&#x201C; some feel to a situation of over-regulation. What is your view? The Great Recession of 2007 saw the US witnessed a financial loss of more than

$14 trillion and loss of more than 20 million jobs. This has taught us a harsh lesson of what damage a real estate sector can cause if it goes out of control. In Dubai, where real estate accounts for 20 per cent of the GDP, compared to only 7 per cent in other countries, it is important for the government to consider the regulation of the real estate market, in order to create transparency, resilience, and a healthy crisis-proof environment, while still leaving room for creativity and innovation. Continuous monitoring of the real estate market and its

cycles represents a crucial step to create an anti-fragile system that avoids market calamities and benefits the economy.

Do you think the public sector investment to drive the growth of the real estate and construction sectors? After oil and trade, the construction industry in UAE stands as the third largest income supplier, as the UAE Ministry of Economy expects the countryâ&#x20AC;&#x2122;s GDP to grow around 3 per cent in 2017. As Dubai approaches the finish line for Expo 2020, the

construction sector is expected to witness a 4 per cent growth compared to 2016. Major government investments, continuous population growth, and the relentless effort made by the developers to correlate supply and demand and feasibility, has open the road for large projects in healthcare, hospitality and residential sectors, thus creating a more competitive and aggressive market than the previous years. New locations are being developed within and around the city in a continuous fluid expansion, with off-plan projects taking a stance. g Gulf Property

PROJECTNEWS

Danube starts delivering homes D

Gulf Property Exclusive anube Properties, which launched eight projects in three years with a combined development value exceeding Dh3 billion, announces the completion of the Dh350 million – Glitz Residence I and II projects – within two years of the sales launch. This reflects a strong commitment by the developer to complete and handover projects in time and with the first delivery, Danube Properties has demonstrated its character as a developer. Owners of all the 302 soldout units will soon start taking deliveries of their units as Danube prepares to welcome its customers – happy homeowners. Since making its foray in real estate market in 2014, Danube Properties has launched 3,217 units (Including 3,165 Residential units and 52 Retail units)

Gulf Property

split in to eight projects, of which 302 units are ready for handover while the rest are in various stages of construction and development. Danube Properties, the real estate development arm of Danube Group – the largest building and home furnishing products suppliers in the Middle East, is scheduled to deliver a total of 831 units – worth Dh1 billion – this year, once approved by various government bodies. The company, which sold nearly a Dh1 billion worth of projects last year under what is perceived to be a very difficult time for the real estate market, continues to defy the odds as it strengthens its real estate portfolio – currently its biggest – in addition to building materials, interiors and home furniture, fashion, retail, food and beverage. The company has launched two major projects – the Dh300 million Resortz and the Dh450 million Bayz – in quick succession earlier this year. Construction of Resortz has already started

At A Glance Dh3 billion

value of Danube Group’s property portfolio

Dh350 m

value of Glitz I and II that is being handed over

Dh1 billion

worth of properties will be delivered by Danube in 2017

3,165 units

are being developed by Danube Properties

while Bayz is undergoing tendering phase. These two projects, worth Dh750 million are part of the 68 real estate projects registered with the Dubai Land Department, with a combined development value of Dh21 billion, during the first half of 2017. All its existing projects are

expected to be delivered by the end of 2019, as per the development plan. Rizwan Sajan, Chairman of Danube Group, says, “The most important aspect of property development business is to be able to deliver projects on time, on budget and with the best quality within that price range to happy customers. Today, I am happy to welcome home owners and families to their freehold homes – developed by Danube. “For us, this is not the beginning of the end – but the end of the beginning as we prepare to deliver our promises – 831 homes worth Dh1 billion – this year, subject to government approval. In terms of portfolio value, this represents a third of the Dh3 billion worth of homes – within the first three years of entering the real estate development business. “The ultimate goal of any builder is to design excellent project, construct them using the best methods and materials and deliver it to the

PROJECTNEWS “The most important aspect of property development business is to be able to deliver projects on time, on budget and with the best quality within that price range to happy customers...”

– Rizwan Sajan, Chairman of Danube Group

Rizwan Sajan urges tenants to start consider buying homes as properties are becoming more affordable and with 1% monthly payment plan, a middleincome family can now afford to purchase a home in Dubai

Gulf Property

PROJECTNEWS

property buyers. It not only gives us a sense of achievement, it also helps us define our benchmark of construction quality. The project delivery will help us further reinforce our construction business. “This reflects the seriousness that we attach to our business and our customers, regardless of the market conditions and external factors. This also reflects the level of commitment and the strength of the company’s character and the level of dedication by all the members of the Danube team. “On this occasion, I con-

Gulf Property

gratulate all the members of my team, the consultant, contractor, sub-contractors and suppliers in delivering the project on time, on budget and with the best quality. “At Danube, timely delivery of projects will be a key performance factor against which we benchmark our success and customer happiness.” Naresco General Contracting was the main contractor of Glitz Residence I and II projects. The developer’s move comes at a time, when its parent company Danube

Group enters its 25th year of operations. The group, credited for supplying the largest quantity of building materials to the Gulf’s construction and real estate sectors that has gone through a number of rapid growth cycles that helped Danube Group to fund its expansion and diversify its portfolio in to different sectors. Since 2015, Danube has championed a game-changing payment plan that allows property buyers to pay 1 per cent of the value of the property value in 75 instalments – after paying 25 per cent down payment.

“This helped us to attract the end-users – who have been living in rented homes. The whole idea behind launching our unique payment plan was to help buyers acquire the property with lower equity investment and ease of paying through economical instalments spread over a longer span,” Rizwan Sajan explains. “This payment plan is helping the fixed-income households to buy and move in to their dream homes. In many ways – this is more convenient then the ‘rent-to-own’ or ‘hire-purchase’ schemes, where the property buyers

PROJECTNEWS

Danube Projects Projects Dreamz Glitz I and II Glitz III Starz Glamz Miraclz Resortz Bayz

Residential Units 175 Townhouses 302 Apartments 352 Apartments 452 Apartments 418 Apartments 591 Apartments 419 Apartments 456 Apartments

Total 8 Projects 3,165 Residential Units

can move into their homes after approximately paying 50 per cent during construction period and the balance payment like a rent cheque per month. “This helps the end-users to insulate them from the hassles of mortgage finance and interest rates as well as the rent-related inflationary pressure.” As per the current regulations, property buyers have to invest 25 per cent downpayment in addition to four per cent registration fee and two per cent brokers’ commission. So, for a Dh1 million home, a buyer has to have a

Project Value Dh550 million Dh350 million Dh350 million Dh300 million Dh300 million Dh400 million Dh300 million Dh450 million Dh3 billion

reserve cash-flow of Dh310,000, in addition to other fees. Then they are qualified for a mortgage finance from the banks. So, the balance Dh750,000 that could be financed for a period of 15 years, on a 4 per cent interest could cost Dh6,666 per month installment, or Dh80,000 yearly mortgage payment - which is almost equivalent to the existing rents the family might be paying. So, on a ready-to-move-in home, it makes a lot more sense for a tenant to buy a property, if the buyer can manage to spend Dh310,000

Status Awaiting Power Supply Handover Stage Delivery in 2017 Under Construction Under Construction Under Construction Under Construction Tendering Stage

Development & Delivery

that includes Dh250,000 down payment of 25 per cent. However, most tenants are still shy of buying a home in Dubai as most foreigners remain unsure of their longterm stay in the UAE. On the occasion of the completion of the project, Sajan made a passionate appeal to the end-users to start thinking of owning their homes as opposed to renting apartments. “With our low pricing and an attractive payment plan with one per cent payment per month, the middle income households can own

an apartment in Dubai,” he said. “We have now changed the game in favour of the endusers who can actually buy an apartment with their limited monthly income.” Danube Properties, part of the Danube Group, made its foray in to the real estate market in June 2014, by launching the Dh550 million 175 townhouses under Miraclz at Al Furjan. Since then, it continued to expand its development by portfolio launching Glitz Residence I, II, III, Starz, Glamz, Miraclz, Resortz and Bayz projects. The company currently has a development portfolio of 3,217 units, including 3,165 residential units with a combined value exceeding Dh3 billion. It is delivering about 831 units in 2017, with a combined sales value of Dh1 billion – or a third of its portfolio value. Danube Group traces its origin through Danube Building Materials. Established in 1993, the company provides more than 25,000 products in stock and in-house value added services in all of its multiple set of showrooms across the Middle East region and India. The company operates from its head offices in Jebel Ali with logistics facilities across the region which amounts to 5.5 million square feet and includes kiln drying facility, factory and warehouses of the group. From a small trading firm, Danube has grown into one of the largest building materials company in the region, with its diversified branches worldwide including UAE, Oman, Bahrain, Saudi Arabia, Qatar and India, in addition to procurement offices in China and Canada. Danube has a team of 1,800 plus people working across strategic locations across the GCC and India. g Gulf Property

Gulf project value exceeds Dh8.8 bn CONSTRUCTION

Gulf Property Exclusive he total value of 21,893 active construction projects in the GCC reached US$2.4 trillion (Dh8.8 billion) at the beginning of September 2017, according to according to BNC Network, the largest and most comprehensive project research and intelligence provider in the Middle East and North Africa (MENA) region. In terms of value this is

Gulf Property

higher than the gross domestic product (GDP) of the world’s 205 out of 211 countries, according to the United Nations. The Gulf’s $2.4 billion construction project value is lower than the GDP of the world’s top six countries. India’s nominal GDP of $2.2 billion is way lower than the combined project value of the six GCC countries, BNC statistics show. These are live projects that are at various stages of planning development and implementation, the latest BNC Intelligence report that

tracks 25,324 live projects across the Middle East and North Africa region. Of these, the total value of urban construction projects reached $1.18 trillion (Dh4.34 trillion) in September 2017, BNC Construction Intelligence report shows – reflecting the buoyancy of the project market and the fact that the governments of the six Gulf countries are determined to carry out the important infrastructure projects. The urban construction contracts constitute 80 per cent of the contracts

awarded for all sectors in GCC and in dollar terms this translates to 49 per cent of the total contracts awarded. “The governments and the private sector developers of the GCC region appears to be unmoved by the slowdown in the global economy and the lower oil price environment. Our latest GCC Construction Intelligence report shows that the projects are going ahead despite the challenging global economic situation," Avin Gidwani, Chief Executive Officer of BNC Network, says. “This is very good news for

CONSTRUCTION “The continuation of these projects, worth Dh8.8 trillion, will keep many businesses, especially the subcontractors, suppliers remain in business and help save millions of jobs across the region. If these projects continues as planned, the region will not only be saved from a possible recession and job losses, but also these will ensure stronger economic growth across the region...”

– Avin Gidwani, CEO, BNC Network

the businesses considering the overall global economy where countries are trying to push the economic growth rate to a slightly higher level. “The continuation of these projects, worth Dh8.8 trillion, will keep many businesses, especially the sub-contractors, suppliers remain in business and help save millions of jobs across the region. If these projects continues as planned, the region will not only be saved from a possible recession and job losses, but also these will ensure stronger economic growth across the

region,” he added. The GCC constitutes 85 per cent of all active projects in the MENA and in dollar terms, these projects account for 68 per cent of the total estimated value. The report, released on the eve of the Cityscape Global exhibition that takes place at Dubai World Trade Centre from September 11-13, is expected to see a flurry of new project announcements. “Over the last few days, we have seen a number of new projects being announced, including a Dh24 billion mixed-use master-planned

project in Sharjah, in addition to a Dh3 billion new neighbourhood near the University City at Juraina in Sharjah as well as a Dh1.5 billion tower to be managed by Shuaa Capital,” Avin Gidwani says. “Earlier, Wasl Asset Management Group has announced Wasl 1 – a new mixed-use freehold community next to Dubai World Trade Centre – that expands the freehold areas into the traditional downtown of Dubai. These are exciting times for all those living in the GCC and the UAE – where most of the economic

development activities are happening and we are passing through an exciting time.” Value of the energy projects in the oil-rich Gulf region has reached $331 billion (Dh1.21 trillion), while the total value of utility project in the Gulf reached $302 billion (Dh1.1 trillion) in September 2017, the report shows. Total value of industrial projects reach $181 billion (Dh666.47 billion), according to BNC Network, which will help the region to become self-reliant and less dependent on imported products – as the completion of the inGulf Property

CONSTRUCTION

dustrial projects mean they will produce value-added products. “Events like Dubai Expo 2020 along with stabilisation of the oil price and the drive of the various GCC countries to achieve economic diversification and increase in the living standards will play a vital role in the construction industry contract awards,” Gidwani says. “As the economic growth is expected to pick up pace next year, we expect an increased construction activity across the board in 2018. New project announcements by major developers that have taken

Gulf Property

place from 2016 till now – will go into tender next year and trigger increased construction activities across the GCC.”

August, 2017

In August, the number of active projects in the GCC increased by 2 per cent as compared to July, 2017 and the total estimated value of these projects increased by 1 per cent. “These are a reflection of the ground realities of the GCC economy – and shows that the Gulf countries are investing their wealth more

carefully and intelligently, to build a brighter future and more sustainable economies,” Gidwani says. A total of 142 active projects with a combined estimated value of $14 billion moved to construction during the month. The largest project to be awarded in August was Phase 1 of Duqm Oil Refinery located in Oman worth $2.75 billion. A total of 596 active projects with a combined estimated value of $13 billion were completed during the month. The largest project to be completed in August was the Presidential Palace proj-

ect located in Abu Dhabi. In August, 90 active projects with a combined estimated value of $15.6 billion were put on hold in the GCC. The largest project to be put on hold was Section 1 of Phase 1 of Makkah Mass Rail Transit System located in Makkah, Saudi Arabia. BNC, the largest project intelligence provider in the MENA region, tracks 25,324 live construction projects with a value exceeding $7.2 trillion (Dh26.4 trillion). It publishes more than 250 project reports that are distributed amongst 73,000 professionals every day. g

CONSTRUCTION

Building projects value hits Dh836 bn

he total value of 7,878 active projects in the UAE’s building industry reached US$227.9 billion (Dh836 billion) at the beginning of September 2017, according to according to BNC Network, the largest and most comprehensive project research and intelligence provider in the Middle East and North Africa (MENA) region. BNC Network’s latest report comes a few weeks after Dubai Land Department announced 680 per cent jump in the number of projects registration during the first half of 2017 to 68 projects with a combined value of Dh21 billion, that has prompted the government to create a ‘one-stop shop’ to speed up building permits and reduce project delivery time for developers – as the emirate sees a strong interest in property developers ahead of the World Expo 2020. In August, the number of building projects in the UAE increased by 2 per cent as compared to July, 2017, but in dollar terms, there has been no significant movement, BNC project intelligence report shows. “Our findings clearly shows that the buildings projects are going ahead as planned due to anticipated rise in demand in the coming years with the run up to the historic Expo 2020,” Avin Gidwani, Chief Executive Officer of BNC Network, says. “Most project owners, developers are looking at completing their building projects before October 2020 when Dubai expects to receive 20 million hotel guests as well

At A Glance

Dh4.3 trillion

value of urban construction projects in the GCC

Dh1.2 trillion value of the oil and gas projects in the GCC

Dh1.1 trillion

value of the utility projects in the GCC

Dh666 billion

value of the total active industrial projects in the GCC region

Avin Gidwani, CEO of BNC Network

as 25 million visitors to the Expo site.” The building industry constitutes 83 per cent of all active projects in the UAE's urban construction sector and in dollar terms these projects account for 44 per cent of the total estimated value. A total of 48 building projects with a combined estimated value of US$2.5 billion moved to construction from other stages during the month. The largest building project in dollar terms to be awarded in the month of August was the 729-villa complex project which is a part of Sheikh Zayed housing program located in Al Montezi in Ajman worth US$272 million. “The report clearly reflects strong building project activities across the UAE, despite a low-oil price environment

that could have negatively impacted the building projects and construction sectors. However, we see no let-up in building and construction activities in the UAE – that reflects the resilience of the country’s economic activities and development – that are sustainable in the long run,” Gidwani says. “Most building projects are being gradually occupied by buyers and end-users, despite the change in pace in economic activities – and that’s what make the industry more sustainable.” A total of 228 building projects with a combined estimated value of $4 billion were completed during the month. The largest project to be completed in August was the Presidential Palace project located in Abu Dhabi worth $1.6 billion. g

BNC Network

NC, the largest project intelligence provider in the MENA region, tracks 25,324 live construction projects with a value exceeding $7.2 trillion (Dh26.4 trillion). It publishes more than 250 project updates that are distributed amongst 73,000 executives and professionals every day. It is used by thousands of business leaders and construction industry professionals around the world to track developments, gain insight on projects and do business in the construction industry. BNC covers construction projects, across all sectors including urban construction, mega developments, transportation, utilities, industrial developments and oil and gas and publishes over 2,000 construction analytics annually based on extensive research and analysis. g Gulf Property

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Meet thousands of investors and key trade buyers from the GCC and MENA region and secure new business opportunities for the future.

Praveen Kumar, Sales Director +971 2 234 8434 | p.kumar@turretme.com

FREE TO ATTEND

For general enquiries, please contact:

Enjoy free entry to the incredible diversity of exhibitors and attendees, which, coupled with the networking opportunities that the Expo will provide, will ensure that you are able to connect with your future business partners.

Qaboos Khalid, Event Director, +971 2 234 8414 | q.khalid@turretme.com

www.indiatradeexpouae.com Strategic Partner:

Supporters:

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VOL. 9, NO. 12 SEPTEMBER, 2017

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

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SPECIAL FEATURES Wasl fast expands freehold landscape

GCC project value exceeds Dh8.8 trillion COVER INTERVIEW Sudhakar R. Rao Gemini Property Developers

Danube Properties in delivery mode Land deal value exceeds Dh390 bn in 18 months EXCLUSIVE INTERVIEW Hesham Al Qassim, Wasl Ismail Al Hammadi Al Ruwad Real Estate

Sudhakar Rao: Re-writing the rules in real estate

Energized for Tomorrow

GULF GULF PROPERTY PROPERTY

GULF PROPERTY

Visit Yardi at Cityscape Global 11 – 13 September 2017 Dubai World Trade Center, UAE Stand S3C01

GULF GULF PROPERTY PROPERTY SEPTEMBER 2017

GULF PROPERTY

+ 971-4-4322679 Yardi.com/ae

SEPTEMBER 2017

Centralise your property data to minimise risk and deliver key performance metrics, while using mobile technology to revolutionise interaction with prospects and tenants.

LIVE PARKSIDE WHERE NATURE IS YOUR PRIVATE COURTYARD

Introducing wasl1, an iconic parkside freehold community, on Zabeel Park, in the heart of Dubai.

SEPTEMBER 2017

Developer number: 1203

Project name: Park Gate Residences

RERA No.: 17046