Property Times April 2015 by Media Lab Publishers

///// Issue 29 - April 2015

Pg16

Can you resist this offer?

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UAE SHINING

MANOJ PRASAD QUE CAPITAL

Safeer Tower 2 in Business Bay boasts an unbeatable payment plan of 40%-60%

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COMMUNITY TIMES

MOTOR CITY & GREENS

Pg37

Magazine

Awards

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OUR TEAM BINESH Panicker

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Editor-in-Chief & Co-Founder

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Accounts Executive ali@propertyonline.ae

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E-magazine support kiran@propertyonline.ae

MORE PROJECT LAUNCHES Despite all the talks and speculations about the slowdown in the market, Dubai’s developers are going ahead with their plans to launch new projects. The second quarter of this year has just started and we have already witnessed a grand launch by Cayan Group, which comprises projects in Dubai and Riyadh with a total value of AED3.1 billion. Al Safeer Group has forayed into property development with the successful launch of Safeer Tower 1 and their second project Safeer Tower 2 in Business Bay is currently underway. These launches clearly indicate that the developers are extremely confident about the long term prospects of Dubai real estate market. Some experts I spoke to recently said that the market will start witnessing increased demand thanks to Expo2020 from end of 2016 or early 2017 onwards and all the projects that are being launched now will have enough takers when they are ready. While it’s still too early to speculate the real impact of Expo2020 on the

real estate market, it will be safe to say that Dubai real estate market will certainly get a boost closer to the expo. In this issue of Property Times, Jerry Parks of Taylor Wessing tells us what we should do to be prepared in case of fire in our building. He takes us through various significant steps we, as residents, have to take such as home content insurance, special clauses in tenancy contracts, etc. This issue also features a number of interesting articles on mortgage market, budget hotel segment, community updates, etc. Last but not the least, Property Times People’s Choice Real Estate Awards 2015 will be given away at a glittering ceremony on 12th of May 2015 at The Address Hotel, Dubai Marina. See you all at the event!

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E-magazine support srikanth@propertyonline.ae

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Executive Assistant to Editor in Chief grace@medialabpublishers.com

CONTRIBUTOR Nicole Walter

Freelance Writer

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FROM THE EDITOR

MILLENNIUM C O L L E C T I O N

Meydan - Dubai

Estimated Completion - Dec 2015

Estimated Completion - Jan 2017

Delivering The Promise

Millennium Estates | Type A

Actual Villa

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Millennium Estates: The first community nearing completion in Meydan

FEW UNITS AVAILABLE

FOR RESALE

Millennium Collection Starting At

AED 4.5 Million Millennium Estates | Type C

Actual Villa

5 Bedrooms G+1 Villa, BUA 5,221 SQFT, Living rooms + Maid’s room + Driver’s room. Starting at AED 6,950,000/-

5 Bedroom G+1 Villa, BUA 7,371 SQFT, 2 Living rooms + Maid’s room + Driver’s room. Starting at AED 9,100,000/-

5 Bedrooms G+1 Villa, BUA 6,993 SQFT, 2 Living rooms + Maid’s room + Driver’s room. Starting at AED 8,575,000/-

Grand Views | Villa

Grand Views | Town house

6 Bedrooms G+2 Villa - BUA 6,044 SQFT Living room + Maid’s + Driver’s, 3 Storey, Private Elevator + Usable Terrace Area. Starting at AED 8,200,000/-

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IPS 2015

PROJECT LAUNCH by Cayan Group

REIDIN.com

INTERVIEW: Wouter Molman, Director, Cityscape Group

MORTGAGE EXPERT:

Feyisesan Ekundare, MortgageMe

Better times for mortgages

Q2 2015 OVERVIEW by Paula Enander, Stockholm Real Estate

BUDGET HOTELS ON THE RISE

COMMUNITY TIMES:

FM Expo 2015

NEW USUFRUCT LAW: Column by Jitheesh Thilak

STRAIGHT TALK BY MP: Manoj Prasad, Que Capital Limited

Exclusive property listings

Column by the Wolf of Real Estate

Be prepared: Jerry Parks, Taylor Wessing

Safeer Tower 2 : Cover story

Community Times

Project Watch

April 2015 Issue -29 /// 7

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NEWS & ANALYSIS

INTERNATIONAL PROPERTY SHOW 2015 BOOSTS DUBAI'S POSITION AS AN INTERNATIONAL HUB FOR REAL ESTATE INVESTMENT "Dubai's uniqueness of boasting 200 nationalities living in it was reflected in the deals done at the show"

xhibitors at the International Property Show 2015 that concluded on 1st of April, 2015 in Dubai said that many deals were done during the show locally and internationally involving plots and residential units in the UAE and overseas. The three-day show highlighted that the uniqueness of Dubai more than 200 nationalities living in it- was reflected in the amount of deals done at the show. Real estate experts said that the diverse property offers that came from many countries as well as from the UAE have boosted Dubai's position as

April 2015 Issue -29 /// 8

a global hub for property investment. It further strengthened the Emirate's position as the ideal location to organize property exhibitions and generate investment deals. Organizers of the show announced plans to double the exhibition area for the next edition based on the overwhelming participations and number of visitors seen this year. Participants in the exhibition represented countries like USA, UK, Turkey, Jordan, KSA, China, and many other European and African countries as well as leading

developers from the UAE were present, such as Dubai Properties, the exclusive strategic partner of the show with an impressive portfolio of projects in many areas of Dubai and Damac, the Silver Sponsor, that reported significant footfall at its stand where it showcased a bouquet of luxurious projects as well as Union Properties and Palm Star, among others. Haider Ali Khan, CEO of Bayut. com, the official online property portal partner of the show said: â&#x20AC;&#x153;International Property Show proves

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NEWS & ANALYSIS

how UAE is a great place to showcase and market your projects regardless of where in the world they are. This market understands real estate really well and is always interested if there are quality real estate products available in the market.â&#x20AC;? Nick Jaffray, Managing Director of Palm Star said: "The International Property Show has been a success for our company. We offer a personal and discreet service to our clients, which involves travelling to the UAE on a regular basis. We are currently in talks with a business partner to open an office in Dubai to serve our clients in the region. The show has enabled us to keep in touch with our clients and our partners and to introduce our company to new long term clients who are looking for a private and professional service for London property." He added: "We charge our clients a retainer for private property acquisition and all the advice they require to make informed decisions. At the show, we offered 4 handpicked projects across London which we feel offer good capital appreciation. This is an introductory offer where we have not charged new clients, and we hope they are happy with the new property and our service. We have had strong interest from selected new clients and we took deposits for new property purchases. We look forward to returning to the UAE again very soon." The show has seen an increasing influx of end buyers who were willing to purchase real estate units in Dubai, according to exhibition participants. Offers during the expo were not limited to residential units, but included various real estate products like apartments, villas, land, buildings, shops and others. On the first day of the show, the Real Estate Forum was launched by The Dubai Land Department (DLD) and the Royal Institution of Chartered Surveyors (RICS). The Forum updated investors and property professionals on latest property trends and initiatives impacting the sector both regionally and internationally by bringing together world-class speakers and content covering many aspects of the real estate industry. April 2015 Issue -29 /// 9

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NEWS & ANALYSIS Springs

THE ETERNAL FAVOURITES Springs and Meadows have always been in demand since its launch thanks to the master developer Emaar Propertiesâ&#x20AC;&#x2122;s superior build quality standards and management.

What are the gross rental yields for Springs and Meadows? Gross rental yields of The Springs and Meadows are right at the top of the villa gross yield rates. When compared to apartment yields, itâ&#x20AC;&#x2122;s still lower but clearly above the average cost of finance. Are there any notable changes in the sales and rental prices or is there a chance for a change in the following months? Sales prices are on the positive but on a slower pace compared to the last two years. As an established community, these communities offer a more stable appreciation in prices in comparison with other rather new communities.

April 2015 Issue -29 /// 10

AHMET KAYHAN CEO, REIDIN.com

2 Bedroom 1,211

Mar-13

Sep-13

Mar-14

Sep-14

Mar-15

2 Bedroom Min Max 130K 150K

The Springs & The Meadows

1% -1%

-3%

Arabian Ranches

0% -2%-3% Palm Jumeirah

-2%-2% -9% Victory Heights

-1% -3%

-1%

-3% -6%

Jumeirah Islands

Jumeirah Park

Dubai All Villas

Last 3 Months Last 6 Months Last 1 Year

GROSS RENTAL YIELDS 6.2%

4 Bedroom Min Max 200K 250K

THE SP

RETURN ON INVESTMENT IN YEARS 4%

3%3% 2%

3 Bedroom Min Max 160K 250K

3 Bedroom (AED) 4 Bedroom (AED) 5 Bedroom(AED) 6 Bedroom(AED) Min Max Min Max Min Max Min Max 230K 250K 240K 300K 250K 360K 300K 450K

13%

6.2%

5.7%

20 19 18 17 16 15 14 13 12 Mar-12

2 Bedroom 1,211

THE ME 3 Bedroom 1,459

Sep-12

Mar-13

Sep-13

Dubai All Villas 5.7%

3.9%

Mar-14

Sep-14

Mar-15

3 Bedroom (AED Min Max 230K 250

SALES PRICE CHANGE IN VILLA COMMUNITIES

20%

3.6%

13%

10% 5% Arabian Ranches

Palm Jumeirah

Victory Heights

Jumeirah Islands

Jumeirah Park

Dubai All Villas

-10% -15%

RENT PRICE CHANGE IN VILLA COMMUNITIES

1% -1%

-5% The Springs & The Meadows

3%3% 2%

-3%

Arabian Ranches

0% -2%-3% Palm Jumeirah

-2%-2% -9% Victory Heights

-1% -3%

-1%

-3% -6%

Jumeirah Islands

Jumeirah Park

Dubai All Villas

Last 3 Months Last 6 Months Last 1 Year

14%

15% 10% 5%

5% 0%

0% -2%-2%

The Springs & The Meadows

0% 0%

Arabian Ranches

Meadows 2% 1% 0% 0% 1%

-2% Palm Jumeirah

Victory Heights

Jumeirah Islands

Jumeirah Park

Dubai All Villas

Why is it that investors and buyers to prefer these two Last 3continue Months Last 6 Months Last 1 Year communities? Obviously due to their location, quality of construction and being among the most settled communities. Is it a good time to invest in these communities given the current situation in the market? It’s always good to invest in a property where the rental income is way above the cost of finance especially if you are living in it and the future prospects look positive.

8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

GROSS RENTAL YIELDS 6.2%

20%

6.2%

5.7% 3.9%

The Springs & The Meadows

Arabian Ranches

Palm Jumeirah

5.6%

Jumeirah Park

Dubai All Villas

3.6%

Victory Heights

Jumeirah Islands

14%

15%

5% 0%

0% -5%

5.7%

RENT PRICE CHANGE IN VILLA COMMUNITIES

10%

-2%-2% The Springs & The Meadows

0% 0%

5% 1% 2%

0% 0% 1%

-2%

Arabian Ranches

Palm Jumeirah

Victory Heights

Jumeirah Islands

Jumeirah Park

Dubai All Villas

Last 3 Months Last 6 Months Last 1 Year Source : REIDIN.com

2 Bedroom Min 130K

The Springs and The Meadows

5.6%

15%

The Springs & The Meadows

-5%

6 Bedroom 1,680

THE MEADOWS RENTALS

The Springs and The Meadows

SALES PRICE CHANGE IN VILLA COMMUNITIES

-5%

20%

5 Bedroom 1,545

NEWS & ANALYSIS

Sep-12

10%

8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

4 Bedroom 1,455

THE SPRINGS RENTALS

15%

-15%

4 Bedroom 1,202

THE MEADOWS SALES PRICES (AED/SQF)

20%

-10%

3 Bedroom 1,248

3 Bedroom 1,459

Dubai All Villas

propertyonline.ae

THE SPRINGS SALES PRICES (AED/SQF)

RETURN ON INVESTMENT IN YEARS 20 19 18 17 16 15 14 13 12 Mar-12

REIDIN.com is widely used by real estate agents and investors for reliable, well-researched information on the country’s real estate sector. REIDIN.com, founded in 2007, is a leading real estate information company focusing on UAE, Turkey and other emerging countries. REIDIN.com helps professionals and individuals easily access the real estate information they need to make more informed investment, purchase, sales, rent, mortgage, finance, development and management decisions. REIDIN.com ‘Data & Research Team’ together with a global network of information partners endeavours to provide high-end analysis and research support to its clients.

For a detailed update on Dubai and Abu Dhabi real estate markets, grab a copy of REIDIN Market Update published in association with Property Times.

April 2015 Issue -29 /// 11

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EXPERT ADVICE

with mortgage expert Looking for a mortgage? Our expert answers your queries about securing a mortgage in Dubai.

I am planning to start a new business and I would like to mortgage multiple properties. What are the rates and procedures for it? There are over 300 mortgage products in the UAE with a variety of fixed period stipulations and insurance premiums. As such, trying to ascertain the best rate will require a detailed assessment of your lending profile and future plans. When it comes to using your existing properties to finance a new business, I see only one hitch. Lendersâ&#x20AC;&#x2122; conduct their due diligence both retrospectively and prospectively. Your past and current financial position will more or less be used in ascertaining your future ability to repay a mortgage loan. As such, projected earnings from the new business will more than likely not be considered in their credit appraisal process. That being said, it is possible to execute a mortgage equity release on multiple properties. The Loan to Value, depending on which lender you use, can be as high as 75% for the first property (assuming you have zero mortgage obligations outstanding) and 60% on subsequent properties.

Feyisesan Ekundare MortgageMe.ae Business Development Middle East/Africa M: +971 050 4168 548

My property has been on mortgage for the past one year, I would like to swap my existing property with another one. Is it possible and what are the conditions? Please advice.

Please guide me about the procedure to buy a business with assets that are mortgaged. Is it advisable to have a consultant present during the proceedings?

Yes, it is possible, but there are certain variables that will determine how the transaction is treated. Will you be selling off the old property or retaining and renting it out? Will your financial profile meet the criteria required for a particular transaction model? The idea is to ensure that the most efficient transaction dynamics are utilized.

Yes, it is advisable to have a financial consultant present. Better to be safe than sorry. No? Unfortunately, more information about the business purchase will be required for me to be able to provide a detailed counsel. There are several outstanding questions.

Basically, you should be looking at a model that ensures that your Loan to Value on this new mortgage purchase is the maximum applicable (75%/80% for nonresident/resident). Also you should want a transaction model that ensures that the process employed saves you the most amounts of time and money.

Towards what end would you need a mortgage consultant? Are you planning on refinancing said properties? Are there reservations on the stated value of these properties? Do you need a mortgage/real estate financing consultant to determine the optimum utility of said properties? Do call on the number above and I will be more than happy to assist.

Dubai Skyline

If you have any mortgage related queries, please email at editor@propertyonline.ae

April 2015 Issue -29 /// 12

WHY IS YOUR EQUITY JUST SITTING THERE DOING NOTHING?

Take advantage of the current low mortgage rates and put your money towards a better use.

2.99%

WE CAN MAKE YOUR HOME EQUITY WORK FOR YOU! Investme Financial Services LLC, 608, Dusseldorf Business Point, Al Barsha 1, Dubai

+971 (0) 4 453 4400 info@mortgageme.ae

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EXPERT ADVICE

BE PREPARED The fire at the Tamweel Tower in Jumeirah Lakes Towers in 2012 and the more recent one at The Torch in Dubai Marina have prompted much discussion among Dubai’s residents. And rightly so – both were major incidents, with potentially tragic consequences for all concerned. In this article we take a look at the positions of those parties primarily affected by such incidents, setting out what they can and should do to mitigate risks. By Jerry Parks, Partner, Taylor Wessing

1. Tenants Tenants occupying units in the Torch which have suffered severe physical damage will have lost their personal possessions and a place to live. As regards personal possessions, tenants should have taken out home contents insurance, although this is not obligatory. In fact, statistics suggest that only some 5% of UAE residents actually have home contents insurance. In the absence of such insurance, tenants will be required to foot the bill for replacing their possessions. It is unlikely that the building insurance or the landlord’s insurance will extend to a tenant’s possessions. As for losing a place to live, tenants can seek alternative premises to rent. But financially this may be difficult where rent has been paid in advance for the damaged unit. As we know, in Dubai it is not uncommon for rents to be paid 12 months in advance, which in some circumstances could therefore see tenants significantly out of pocket. Are these tenants entitled to a refund of rent from the landlord in these circumstances? The answer is not entirely clear, as the Landlord and Tenant Law does not expressly deal with this situation. It may be specifically addressed in the lease document, but this is unlikely. If both the law and the lease are silent on the point, then

April 2015 Issue -29 /// 14

it would appear to be right as a matter of legal principle that the landlord refunds the tenant the rent on a pro rata basis. Essentially, if the landlord is not able to provide the tenant with the accommodation that has been paid for, then it should be incumbent on the landlord to refund the tenant for any advance rent paid. Of course some landlords may be more cooperative than others when it comes to offering such a refund. But our view is that where the matter to be referred to the Rental Dispute Centre, then it would find in favour of tenants in these circumstances. So the best position for tenants would be to claim on your contents insurance, claim a rent refund and find a new place to live.

2. Landlords The structure of the building, and the units in it, should be insured by the Owners Association for the full reinstatement value. After incidents of this nature, the Landlord will, in respect of severely damaged units, suffer a loss of rental income (assuming the unit was being leased or was capable of being leased) for the period during which the building is reinstated. In these circumstances, the landlord should look to the building insurance taken out by the Owners Association,

to see if it covers this loss of rental income for the time it will take for the reconstruction works to be completed. Some insurance policies will include a provision under which loss of rent is covered for landlords in this position (as, we understand, was the case with the insurance policy in relation to the Torch). Some insurance policies will not however extend this far, and even those that do will usually contain restrictions on the level of rent that will be recoverable or the period of time for which recovery can be made. While building insurance is mandatory for Owners Associations to take out, in practice we have seen that it does not always provide an ideal solution to an Owner’s problems. In the case of the Tamweel Tower fire in Jumeriah Lake Towers in 2013, the Owners Association had taken out building insurance, but two years on re-construction work has still not been commenced. Some commentators have suggested that the delay has been due to the fact that the Tamweel Tower Owners Association was not registered with RERA at the time of the incident. A consequence of this non-registration was that the insurance company was unable to make payment because the insured entity, the Owners Association, did not have a separate legal identity or indeed a bank account. The Tamweel Tower Owners Association was

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3. Owner Occupiers Where the unit is owned by an individual who also occupies the premises, we have a combination of the scenarios set out in relation to Tenants and Landlords above. The owner should insure their own possessions, and must rely on the Owners Association building insurance to pay out and cover the cost of reconstruction of the building and the units in it. Once again, however, there is the issue of renting alternative living accommodation for the (possibly) extended period during which the premises are reconstructed. That is something that could be covered under the Owners Association building insurance, but not necessarily so. It is important therefore that all owners check their Owners Association building insurance cover carefully to understand whether it does cover payment of rent for alternative premises or not.

4. Owners Associations Owners Associations are formed when one or more units are sold in a multi unit building, such as The Torch. The Law requires such Owners Associations to be registered with RERA, although it appears that RERA is still not processing such applications for registration at the moment. As mentioned above, this

has caused delays in dealing with payment of insurance proceeds in circumstances where insurance companies have been reluctant to make payment to interim Owners Associations which are not technically separate legal entities and often do not therefore have their own bank accounts. Owners Associations, whether interim or registered, are obliged to insure the building to cover circumstances such as fire, flood, hurricanes, etc. Owners Associations may, with the approval of the unit owners, extend insurance cover to include loss of rental income or to cover rental payments required to be made during the period of time over which the building is reconstructed following an insurable event. These additional cover options are not however obligatory, and all owners should check with their Owners Association to ascertain the extent of cover in each particular case. If the Owners Association has failed to take out building insurance cover, then it may be that a claim would lie against the individual Board Members of the Owners Association for the cost of reinstatement of the building. In reality, itâ&#x20AC;&#x2122;s difficult to see how those Board Members would be able to discharge such a liability, unless they were themselves insured against such an oversight. Another concern is the possibility of insurance cover being rendered void by virtue of the Owners Associationâ&#x20AC;&#x2122;s failure to comply with health and safety regulations. If, for example, the insurance company were to ascertain that the Owners Association had failed to install smoke detectors, maintain fire doors, maintain fire alarm systems, carry out practice fire evacuations etc., then it could argue that it should not be obliged to respond to any claim under that insurance policy. Again in these circumstances an action may lie against the individual Board Members of the Owners Association, with the same concerns regarding the ability of those Board Members to discharge that liability financially.

5. Developer Once the Developer hands over the first unit of the building to a purchaser, then the Owners Association comes into existence (the interim Owners Association in the absence of RERA registration). At that point, responsibility for the building, and therefore for insuring the building, passes from the Developer to the Owners Association and the Developer effectively steps out of the picture. There may however be certain exceptional circumstances in which the Developer remains liable. These might include, for example, where the Developer has acted negligently in supervising the construction of the building. It may be that ultimate liability for such default would rest with the contractors, but the Developer could face a primary liability claim from owners in such circumstances. There are lessons to be learnt from the Tamweel Tower fire and the more recent incident at The Torch. All occupiers should consider taking out contents insurance. All Owners should ensure their Owners Association has put in place adequate building insurance cover and should check whether that cover includes loss of rent or reimbursement of rent payable pending reconstruction of the building. If such cover is not included, those Owners should consider taking out that cover privately. And finally, the authorities need to put in place a system which enables insurance companies to pay out under insurance policies notwithstanding the lack of registration of most Owners Associations with RERA. In that regard we welcome the announcement made by Sultan Butti Bin Mejren, Director General of the Land Department, who said on 24th of February 2015 that the Dubai Land Department is studying new measures for real estate insurance in Dubai with the aim of more clearly identifying the responsibilities of the various parties involved and of expediting payments and settlement of receivables in the event of incidents of this nature.

April 2015 Issue -29 /// 15

EXPERT ADVICE

subsequently registered by RERA. All well and good, until you realise that the vast majority of Owners Associations have not been registered with RERA, and hence the same delays could occur where this to happen again. We see therefore that in practice, notwithstanding the building insurance being in place, actual payment of the proceeds of insurance cover, and therefore eventual reconstruction of the building, can take many years. In the circumstances it is important for unit owners to check that they have insurance covering loss of rent throughout this period.

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COVER STORY

BUY AN APARTMENT IN AFFORDABLE MONTHLY INSTALLMENTS… Al Seeb Real Estate Development’s (a part of Al Safeer Group) latest offering Safeer Tower 2 in Business Bay offers apartments starting from AED 11,488/- per month with a 40%-60% payment plan in place. By Binesh Panicker

April 2015 Issue -29 /// 16

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COVER STORY

ubai’s real estate market is currently going through a phase of stability without any drastic movement in prices or rents. The industry members look at it as signs of a maturing market and the increasing number of new developments launched recently further substantiates this view. The latest entrant into Dubai’s freehold market is the Al Safeer Group, well known for its mall developments. SafeerTower 2, located in Business Bay, is the group’s second freehold development after Safeer Tower 1, which received an overwhelming response from investors and end users. While the location of the project is undoubtedly one of the best in Dubai, the developer’s strategy of introducing a unique payment plan is turning out to be the biggest attraction for buyers and investors.

THE SAFEER GROUP The group was founded in 1985 and the growth since then has been tremendous. J.P. Kalwani, Chairman & CEO of Al Safeer Group says, “From an austere 6,000 sq. ft. outlet in 1985 to a diversified conglomerate in more than two decades, with presence spanning in GCC markets like UAE, Oman and Qatar, Al Safeer Group is fuelled by a team of over 3,500 dedicated people under the Group-abled leadership.” Today, the company has a wide range of business interests including mall development (Century Mall in Dubai and Fujairah and Safeer Mall in Ajman, Ras Al Khaimah and in Sohar, Oman.) The Group also manufactures divan bed and mattresses (Sleepezze), nails, etc. “We have taken another mall in Abu Dhabi, which is under construction, on long term lease and is likely to start by end of 2016. We always keep looking for new options at prime/good location matching our concept,” says Kalwani, adding,

April 2015 Issue -29 /// 17

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COVER STORY “Our latest project is the residential building Safeer Tower 2 in Business Bay. We are extremely happy with the favorable response from investors for Safeer Tower 1. Indeed, this is a true indication that the market is very good if you offer the right product, right location, right price and payment terms.” The group has plans to launch more projects in Business Bay, Dubai Land and Culture Village.

SAFEER TOWER 2 This residential development boasts a number of attractions ranging from location to high quality finishes to a unique payment plan. “Safeer Tower 2 is situated at a great location in Business Bay, i.e. near to Downtown and well connected to other parts of Dubai. From the buyers’ point of view, apart from the payment plan, location, affordability of a luxury apartment; the quality and price are the other main considerations.,” explains Kalwani. The project features 176 residential

April 2015 Issue -29 /// 18

units including 102 studios, 54 onebedroom apartments and 20 twobedroom apartments. The prices for studios range from AED689,278 to AED889,959, while one-bedroom units are available from AED1,141,974 to AED1,560, 212 and the prices for two-bedroom apartments are from AED1,926,308 to AED2,250,645.

SAFEER TOWER 2 IS SITUATED AT A GREAT LOCATION IN BUSINESS BAY, I.E. NEAR TO DOWNTOWN AND WELL CONNECTED TO OTHER PARTS OF DUBAI. FROM THE BUYERS’ POINT OF VIEW, APART FROM THE PAYMENT PLAN, LOCATION, AFFORDABILITY OF A LUXURY APARTMENT; THE QUALITY AND PRICE ARE THE OTHER MAIN CONSIDERATIONS.

PAYMENT PLANS The developer, sensing the pulse of the current market situation and sentiment, has introduced a unique payment system to make the project extremely affordable to investors and end users alike. “There is tough competition in the market. One of the most important aspects to compete and sell our units is to introduce an easy payment plan that is simply irresistible to buyers, easy for nonresidents to purchase and maintain the property. The majority of our buyers are from other GCC countries and UK. They do not have access to financing and investment. We are offering a great payment plan wherein buyers will pay only 40% till possession and 60% after possession in three years. The net installment is approximately AED6,000 per month, if netted out with rental income (assumed approximately AED5,800 per month),” explains Kalwani, adding that they have very high expectations

“We are confident that Safeer Tower 2 will receive a great response from buyers, considering the response we got for the first project as well as our reputation as a group coupled with the payment plan on offer. Our prospective customers are already showing a keen interest in this new development. We are targeting end users, however, this project will attract investors as well because of the payment plan, quality and location,” he says.

CURRENT SCENARIO IN DUBAI MARKET Al Seeb Real Estate Development has timed the launch of its projects well and the response of its projects received so far is a testimony to that fact. The new regulations by the government bodies have managed to keep the speculators away from the market and it has given the developers of Al Seeb Real Estate Development to launch their projects at the right price. “The mortgage cap rule by the Central Bank and the increased registration fee by the Dubai Land Department have curbed

WE ARE EXTREMELY HAPPY WITH THE FAVORABLE RESPONSE FROM INVESTORS FOR SAFEER TOWER 1. INDEED, THIS IS A TRUE INDICATION THAT THE MARKET IS VERY GOOD IF YOU OFFER THE RIGHT PRODUCT, RIGHT LOCATION, RIGHT PRICE AND PAYMENT TERMS.

AL SAFEER GROUP’S FUTURE PROJECTS the menace of speculation to a great extent. Also, the current control measures have given the investors more security since all the projects are first registered in the Dubai Land Department and the funds are received in an Escrow account instead of developers’ accounts. Offplan projects do not get mortgage finance for more than 50%, which has forced buyers to put in more equity. However, we feel this should be reconsidered for first time buyers,” says Kalwani, adding, “Moreover, we are more comfortable in this kind of market, wherein, only developers who have done their homework on financial aspects can remain in the market for long term. Now the market is relatively stable and we expect the market to continue to be stable throughout the year.” Kalwani believes that this is the right time for developers to enter the mid-income housing market and also he believes end-users should consider buying

• Hotel in Fujairah (200 rooms) which may start operation from 3rd Quarter of this year • Hotel in Jaddaf (354 rooms) is under construction • Hotel in IMPZ (128 rooms) area Dubai • Hotel in IMPZ (99 rooms) area Dubai • Safeer Residences 2 in Dubai Land Residence • Safeer Residences 3 Dubai Land Residence • Residence Complex B+G+41 Dubai Land Residence • Hotel in Cultural Village – Boutique Hotel • Residential Building in Cultural Village 3B+G+8 • Residential Building in Arjan

SAFEER TOWER 2 PRICES Type

Lowest

Highest

Studio AED689,278 1 Bed AED1,141,974 2 Beds AED1,926,308

AED889,959 AED1,560,212 AED2,250,645

April 2015 Issue -29 /// 19

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properties now rather than waiting for the prices to come down further. “It is an excellent time to buy now since developers are offering at good prices and attractive payment plans. Also, majority of the market is under the mid-income segment. And so far, they have not yet taken a reasonable share in the current market so it is high time that developers should target this mid-income segment.”

COVER STORY

from this project. “We are not an aggressive developer and would like to ensure the buyers the safety and best value for their money along with personalized service, without compromising on quality,” he says. The building is 55% complete and the construction is going on at a fast pace. The expected completion date for the project is the end of the June 2016.

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MARKET Sheikh zayed Road, Dubai

BETTER TIMES FOR MORTGAGES With sales prices entering a more reasonable territory, it’s a great opportunity for buyers to secure a mortgage and own their dream home. By Nicole Walter/freelance writer

roperty prices haven’t suddenly tumbled, yet analyst predictions that sales values will soften this year have started to ring true, while rents are still holding up in many areas. This may indicate that it’s a good time to get a mortgage in place and buy. Indeed, quite a few potential buyers seem to be taking a liking to the idea. “Property prices are lower since the mortgage cap was introduced in December 2013; mortgage sales slowed last year continuing at the start of 2015. However, we have seen an increase in mortgage applications in February and March, as bargain hunters return, mostly expats looking to put down roots, and clients wishing for refinance existing loans,” remarks Jean-Luc Desbois, Managing Director at mortgage consultants Home Matters. According to CBRE’s

Dubai Market View Q1 2015, sales transaction have been on the rise comparing last year’s quarter and the first three months of this year, whilst year-on-year values have declined by 20%. “The average sale rate for residential properties dipped by 2% quarter-on-quarter and is expected see further drops during the course of the year,” remarks Mat Green, Head of Research & Consultancy UAE at CBRE Middle East. “The leasing market is expected to witness increased landlord incentives in the form of rent-free period and other allowances, whilst rental declines are also likely in some areas,” he adds. Asteco’s Managing Director, John Stevens, would concur that prices have flattened and significant market growth was unlikely, due to the upcoming additional supply and ongoing macro-

economic challenges, highlighting that a variety of mortgage products suiting different customer profiles were available.

WHAT’S ON OFFER? A closer look reveals banks and Islamic finance institutions are clearly competing for clients. Most demand a minimum salary of AED10,000 (some AED7,000 up to AED20,000), with interest rates starting as low as 1.65% (flat rate) and 3.29% (reducing) to 4.99% (flat) and 8.98% (reducing). While flat rates look more enticing at first sight, they are however, not necessarily the best deal. “Flat rates lack transparency, and although reducing balance rates seem higher, they generally are better value. Always ask for a comparison,” April 2015 Issue -29 /// 21

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MARKET PROPERTY PRICES ARE LOWER SINCE THE MORTGAGE CAP WAS INTRODUCED IN DECEMBER 2013; MORTGAGE SALES SLOWED LAST YEAR CONTINUING AT THE START OF 2015. HOWEVER, WE HAVE SEEN AN INCREASE IN MORTGAGE APPLICATIONS IN FEBRUARY AND MARCH, AS BARGAIN HUNTERS RETURN, MOSTLY EXPATS LOOKING TO PUT DOWN ROOTS, AND CLIENTS WISHING FOR REFINANCE EXISTING LOANS. JEAN-LUC DESBOIS, MANAGING DIRECTOR, HOME MATTERS.

Dubai Marina

recommends Jean-Luc. A good deal may allow for a one million dirham property to be financed for as low as AED3,600, and a AED2 million property for around AED6,200 monthly. However, in Desbois’s experience, most of his clients earn AED20,000 plus a month, and a mortgage of one million dirham costs around AED4,462 a month. Considering that banks can only finance 75% of a property under AED5 million, a one million dirham mortgage could cover a property worth AED1.25 million, or of course higher, but one would need a minimum of AED250,000 to start with. At the same time, a property of above AED5 million can only be financed April 2015 Issue -29 /// 22

by up to 65%, and a second property demands a deposit of 40%.

WHERE TO LOOK? According to CBRE, buyers targeted Dubai Marina/JBR, where recorded deals averaged AED2.11 million, and Palm Jumeirah where transaction deals were averaging AED5.62 million. Other favourites were Emirates Living and Downtown Dubai. If one were after strong rental yields, areas like IMPZ, Motorcity, Liwan, Jumeirah Village and The Villa experienced slight drops, whilst JLT and Discovery Gardens gained slightly. In addition, smaller

townhouses make for better deals in terms of garnering a good rent, whilst three to five bedrooms declined, and larger ones remained stable, according to CBRE.

OFF-PLAN OPTIONS While banks can only finance half of the purchase price of off-plan properties, things have started to become interesting in this arena. “End-user financing is available in the market at good interest rates, so it has become more reasonable and affordable to buy rather than rent,” says Ammar Sweis, CEO at Ishraqah Investments. Townhouses are being launched for as little as

just under AED1 million, such as at Nshama’s Town Square, where deals have been struck with Noor Bank, First Gulf Bank and ADIB to provide home financing. “Obviously potential buyers are considering the advantages, such as discounts, of purchasing in these kind of developments compared to completed developments, especially beneficial in well-established areas, attractive financing offers help to reduce buyers’ financial burden, and regulations protect these investments,” remarks John. Other tempting options are those close to completion, and with payment plans of 30% during construction and 70% on handover. Developer GGICO even spreads the latter payment over three years. “Banks are not giving big mortgages as they used to, but if you’re at a stage where you only need 50% you can borrow to do it, and use your salary, or bits of savings, to keep going for the few years,” remarks Andrew Chambers CEO at GGICO Properties. While Home Matters has mortgage available starting at 2.99% for properties under construction by developer Emaar, Jean-Luc advises to take special caution when looking at taking those up.

THE AVERAGE SALE RATE FOR RESIDENTIAL PROPERTIES DIPPED BY 2% QUARTER-ONQUARTER AND IS EXPECTED SEE FURTHER DROPS DURING THE COURSE OF THE YEAR. MAT GREEN, HEAD OF RESEARCH & CONSULTANCY UAE, CBRE MIDDLE EAST.

“Banks are still generally bearish on new off-plan financing, unless it is Emaar of course. The risk of buying off-plan without finance being in place is if your situation changes later down the line. For example, if you pay 50% of an off-plan property on a payment plan and change jobs just before the next payment is due. This will prevent most banks from lending the final 50 percent until after probation has been completed,” he points out. In the view of Talal Gaddah, MAG Property Development’s CEO, affordable off-plan schemes shouldn’t require a mortgage. The developer is looking at launching developments, where properties could be financed with AED120,000 in-hand and monthly payments of AED4,900 spread over 60 months. However, these deals are unlikely to take away the allure of taking out a mortgage, says Jean-Luc. “Developer payment plans are usually for maximum periods of three years, which requires a significant monthly payment. Mortgages can be up to 25 years tenors, which is a less aggressive/demanding way to pay for a property,” he argues.

SNS

PROPERTIES

Where Perception Meets Reality www.snsprop.com M: +971 55 948 0495 | +971 56 144 9976 T: +971 4 3957593 | F: +971 4 3942533 DED Lic. No. 647941 | ORN 2576 OWN AN APARTMENT FOR AED 349,988

ZAHRA TOWN SQUARE

Studio, 1, 2, 3 BEDROOM APARTMENTS Studio 1 Bedroom 2 Bedroom 3 Bedroom

340 sq. ft 516 - 610 sq. ft. 825 - 968 sq. ft. 1,196 - 1,400 sq. ft.

Town Square is situated at the intersection of Al Qudra Road and Emirates Road, just south of Arabian Ranches. Located opposite to Emaar Mira Townhouses. Enjoy views of surrounding greenery from your living room, relax at the pool or go for a workout in the gym. Life at Zahra Apartments provides you plenty of choices while being only a short walk from the heart of Town Square.

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Price Starting from AED 7.7 million BUA: 6,300 PLOT: 9,000 - 15,000 sq. ft. UNIQUE FEATURES 4 bedroom units, Majestic skyline views Light and shading optimisation, Luxury finishing Private pool, Outdoor entertainment area Landscaped gardens

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The Nest collection totals 99 exquisite villas offering an unparalleled blend of community and lush living. With its inspired architecture and its bold take on the quintessential family home, the contemporary collection will provide breathtaking views of the nature reserve, the gardens and the city skyline.

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COMM CO

COMMUNITY TIMES DUBAI MOTOR CITY

AG E N T S

DUBAI MOTOR CITY

RASHA MADANAT AGENT- GREEN COMMUNITY

+971 56 11 45 552 rasha.m@prohomes.ae RERA NO: 26820

Tel +971 4 44 33 585 www.prohomes.ae ORN: 11918

GREEN COMMUNITY, MOTOR CITY BUNGALOW, 4 BEDROOM + MAIDS BUA: 4,300, PLOT SIZE: 10,000 LAKE VIEW  AED 5,600,000 GREEN COMMUNITY, MOTOR CITY TOWNHOUSE, 3 BEDROOMS + MAIDS BUA: 4,600 PLOT SIZE: 4,500 COMMUNITY VIEW  AED 4,700,000 GREEN COMMUNITY, MOTOR CITY TERRACED APARTMENTS, 3 BEDS + MAIDS BUA:3326 LAKE VIEW  AED 3,100,000 GREEN COMMUNITY, MOTOR CITY FAMILY VILLA, 4 BEDROOMS + MAIDS BUA: 5,700, PLOT 8,900 COMMUNITY VIEW  AED 7,800,000 NORTON COURT - UPTOWN MOTOR CITY APARTMENT, 1 BEDROOM SQ.FT.: 943 PARK VIEW  AED 950,000

Rushiraj Mehta AGENT DUBAI MOTOR CITY +971 55 22 32 340

Dubai Motor City is Union Properties’ most distinguished development project, with a sui generis twist on modern living inspired by motor sports. Union Properties designed the city not only to please the thrill seekers but also with a range of entertainment offerings for families and residents of all age groups. The most extraordinary attraction of Motor city is the Dubai Autodrome, with a 5.39 Km FIA certified track, that is the dream of every motor sports enthuse. This community also includes the Green Community which is the residential development and the Business Park which consist of office towers and retail spaces.

AREA 3 sq.km AED 987/SQ.FT. (SALES PRICE) AED 6.7/SQ.FT. RENT/ MONTH COMMUNITY

94.14% Occupancy

3 3

HOTELS

SCHOOLS

100

RETAIL OUTLETS

MINS TO PARK

Restaurants / Fashion brands / Super markets

JOGGING TRACK / YOGA CENTERS

CONNECTIVITY

20 30 15 MINS

TO CITY CENTER

MINS

TO AIRPORT

MINS

TO METRO STATION

OMMUNITY MUNITY TIMT GREENS

Developed and launched by Emaar in 2012, Greens consists of 3,500 residential units and four office buildings. Greens has some great affordable mid- rise apartments which offer a beautiful view of the gardens and pools nearby. Wellfurnished apartments and lushes greenery give this community a feeling of peace away for the bustle of the busy city life. Greens offers all the necessary amenities at the door step. Even though away from the busy city, the community is in close proximity to all major roads, making it easily accessible.

AG E N T S GREENS

UMAR BIN FAROOQ Agent – Greens +971 55 10 10 888

umar@ottomansuae.com RERA: 25889

T: +971 4 346 99 33 W: www.ottomansuae.com

AED 1,452/SQ.FT. (SALES PRICE) AED 9.1/SQ.FT. RENT/ MONTH COMMUNITY

93.58% Occupancy

3 3

GREENS- AL DHAFRA 1 BED AREA SQ.FT.: 820  AED:1,150,000.00 THE VIEWS- FAIRWAYS WEST 1 BED AREA SQ.FT.: 928 AED: 1,550,000.00 THE VIEWS- MOSELA 2 BEDS AREA SQ.FT.: 1438 AED: 2,550,000.00

HOTELS

THE HILLS- THE HILLS 4 BEDSAREA SQ.FT.: 3403 AED: 6,700,000.00 THE VIEWS- LINKS WEST 2 BEDSAREA SQ.FT.: 1400 AED: 2,450,000.00

SCHOOLS

100

RETAIL OUTLETS

Restaurants / Fashion brands / Super markets

TO CITY CENTER

TO PARK

JOGGING TRACK / YOGA CENTERS

CONNECTIVITY

MINS

20 14 MINS

TO AIRPORT

MINS

TO METRO STATION

MUKARRAM SHABHI AGENT- GREENS

+971 55 9544 368 shabhi@alraea.com BRN 23146

Tel +971 4 362 38 56 www.alraea.com JAL NAKHEEL GREENS 1 BED + STUDY  SQ FT 958 AED 1,300,000/- AED 100,000/- (RENTED) AL DHAFRAH III 1 BEDROOM  SQ FT 758 AED 1,000,000/FAIRWAYS TOWER HIGHER FLOOR - GOLF COURSE VIEW  SQ. FT. 1450 VACANT ON TRANSFER  AED 2,300,000/- NEGOTIABLE TRAVO 2 BED WITH COURTYARD  SQ. FT. 1450 AED 2,100,000/TURIA 2 BEDS + STUDY  SQ. FT. 1350 VACANT ON TRANSFER AED 1,700,000/-

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COMM CO

COMMUNITY

COMMUNITY TIMES

BUILDING A STRONGER GCC FACILITIES MANAGEMENT SECTOR The UAE’s facilities management industry is poised to reach AED20 billion in 2015, while the KSA’s USD100-billion FM sector offers infinite possibilities for expansion.

mong the telltale signs of economic prosperity in the GCC region is the influx of impressively designed, ubiquitous skyscrapers and largescale infrastructure developments. Reports show that 16 skyscrapers standing at a height of more than 300 meters - nine of which are in the UAE - were among the region’s mega construction projects in 2014. The UAE is still leading in terms of the number of tall buildings

April 2015 Issue -29 /// 26

but its neighbor, Saudi Arabia, is closely behind. The GCC makes heavy investments in fundamental construction projects to accelerate its economic growth. In the UAE, the construction sector contributed 7.89% to the country’s gross domestic product (GDP) in the first half of 2014. It is poised for further growth as its GDP share is projected to reach between 11 and 11.5% from 2015 to 2021. Building projects worth over USD66.89 billion were

completed in Qatar in 2014, giving the state’s vibrant construction sector a huge boost. Similarly, Saudi Arabia’s USD52.8 billion worth of construction contracts have bolstered an already flourishing local sector. The rise in construction projects presents enormous value for facilities managers. The UAE’s facilities management industry is poised to reach AED20 billion in 2015, while the KSA’s USD100 billion FM sector offers infinite possibilities

COMMUNITY

propertyonline.ae

OMMUNITY MUNITY TIMT SEEING THE NEED TO SUSTAIN GROWTH AND ADDRESS INDUSTRY NEEDS, FM EXPO WAS ESTABLISHED AS AN ANNUAL EVENT THAT DRIVES OPPORTUNITIES. THE MIDDLE EAST’S ONLY DEDICATED FM EXHIBITION IS A MEETING PLACE FOR ALL PROFESSIONALS INVOLVED IN FM, BUILDING MAINTENANCE, HYGIENE, HEALTH AND SAFETY, ENERGY AND ENVIRONMENT INDUSTRIES UNDER ONE ROOF.

for expansion. Qatar, meanwhile, is experiencing a year-on-year FM growth rate of almost 75%. Seeing the need to sustain growth and address industry needs, FM EXPO was established as an annual event that drives opportunities. The Middle East’s only dedicated FM exhibition converges all professionals involved in FM, building maintenance, hygiene, health and safety, energy and environment industries under one roof.

FM EXPO 2015 For this year, the show happening from May 18 to 20, 2015 at the Dubai World Trade Centre will gather over 150 regional and international exhibitors to display an array of services, including access control, building management systems, energy management and environmental solutions. Furthermore, three co-located events, namely Middle East Waste & Recycling, Commercial Cleaning & Hygiene,

and Elevators & Access Control, will ensure that every key segment of the industry and related sectors is covered. A dedicated Innovation Zone, meanwhile, will showcase smart FM technologies. The sector, as the visitors and participants of FM EXPO 2015 will witness, is poised to remain robust in the coming years, offering opportunities that will help advance the GCC’s buoyant economy even further.

April 2015 Issue -29 /// 27

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PROJ PR

MARKET

PROJECT WATCH

LOOTAH

he Lootah Real Estate Development is the property development arm off the famous Lootah Group with over five decades of history under its belt. The latest development of Lootah is called the Shamal Community which consists of Shamal Terraces and Shamal Residences. The company aims to create a great quality lifestyle. Situated in Jumeirah Village Circle, Shamal is a hot investment option for investors. The terrace has 30 villas and the entire community is over 147,000 square feet. Every villa and apartment in this community is spacious. Lootah Group also offers great mortgage options for the project for its buyers.

PRICES STARTING FROM AVAILABLE ON REQUEST

AREA: JUMEIRAH VILLAGE CIRCLE

COMPLETION DATE: PHASE ONE COMPLETED

PROJECT: SHAMAL COMMUNITY

April 2015 Issue -29 /// 28

SCHOOL

HOSPITAL

6.9 KM 6.5 KM

RESTAURANT

300 M

SEVEN TIDES

even Tides International is back in development with yet another development project in partnership with DUKES Oceana. Seven Tides is an international holding and development company that was founded in 2004. The DUKES Oceana, spread over 240,000 square feet, brings the famous English charm and style to the Palm Jumeirah trunk and combines it with cosmopolitan luxury to create an opulent residential and hotel development at the heart of Dubaiâ&#x20AC;&#x2122;s most enticing island community. The apartment consists of 227 units that offer a guaranteed return on investments of (ROI) of 10%, according to the developer. The elegant DUKES design ensures spacious and luxurious living for every resident. The developer wants to create world class living by using smart home technology and custom designed kitchen equipment.

PRICES STARTING FROM AED760,000

AREA: PALM JUMEIRAH

COMPLETION DATE: FIRST QUARTER OF 2016

SCHOOL

9.9 KM

HOSPITAL

9.7 KM

RESTAURANT PROJECT: DUKES OCEANA

1.8 KM

April 2015 Issue -29 /// 29

MARKET

propertyonline.ae

ROJECT JECT WATCH WA

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COLUMN

STRAIGHT TALK BY MP

Manoj Prasad, Executive Vice Chairman & CEO, Que Capital Limited (DIFC) Investment Banking

ADVANTAGE UAE & THE BENEFITS OF POOL INVESTMENT Dubai has implemented an "open arm policy" not only for big corporates of the world but also for anyone who has a dream and a vision to contribute to the dynamism of rapidly growing Dubai and its skyline.

here are so many positive things happening in the country right now that will attract many new investors and it also gives me a lot of confidence about this market. Dubai is going to host World Expo in 2020, which has also helped investors gain confidence in the Dubai’s hospitality sector. The growing number of tourists will bring immense potential growth, which investors have already started to experience. According to my assessments, more stable growth outlook is expected. Construction activity has already picked up the pace again and will continue for at least next five years. Soon we will be seeing cultural centres like the new Opera House in Dubai and Guggenheim Museum in Saadiyat Island. In 2013-2014, foreign direct investment accounted for roughly half of the $30.7 billion in real estate sales, according to a study. India and UK were the top two foreign markets for the U.A.E. real estate. Dubai has been the traditional second home for rich Indian investors and now that trend is accelerating with Dubai offering some good bargains following the real estate slump and the growing

April 2015 Issue -29 /// 30

corruption in India. I think there is a huge demand for both residential and commercial space, so the concept of oversupply is no longer a concern to me. Yes, there will be some correction in certain areas, which are considered overpriced but at the same time there will be some areas that will continue to witness growth. Studies show that until the last quarter of 2014, Dubai Marina was the most popular location for buying in Dubai, followed by Downtown Dubai, Jumeirah Lake Towers (JLT), Dubailand and Dubai Sports City, in that order. This was primarily because Dubailand is still an off-plan development with lower prices, which naturally attracts investors looking for a deal. The World Economic Forum (WEF) named the UAE, the 12th most competitive nation globally for 20142015, a jump of seven ranks from last year. This ranking puts UAE ahead of countries such as Canada, Denmark and South Korea. The nation also leads all the Middle East and North African (MENA) countries. The UAE ranks first when it comes to the absence

of inflation and crime, second in the effectiveness of government spending and third in the absence of government bureaucracy. It is also rated highly for having the third best infrastructure in the world. The UAE ranked third globally on indicators such as citizens and residents’ confidence in government and leadership, the absence of government bureaucracy, the quality of ports, efficiency of customs procedures and attracting technology through foreign direct investment. Significantly, for the knowledge economy, UAE is ranked 3rd globally for attracting professional talent. It is ranked 2nd, up from 4th, in Basic Requirements, which measures the readiness of regulations and institutions, infrastructure, health and primary education. His Highness Shaikh Mohammad Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, said in a statement: “The UAE, under the leadership of President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, is advancing steadily

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individual shareholders hold shares of the company, which entitles them to a proportionate share of any capital gains made or any rental yields received. I suggest you take your lawyer’s help in structuring this.

Shaikh Mohammad also added that the UAE government is constantly monitoring these global indicators issued by reputable international organisations. “Retreating is not an option in our government.” According to the report, the UAE has made a remarkable progress in 78 sub-indicators during just one year.

This would be the most suitable structure for a group of “aligned” investors, who are able to act jointly and in coherence and make common choices. This then allows for sharing of capital, risk and upside. In order to further mitigate risks associated with individual circumstances and the unfortunate and unexpected demise of any of the members of the investment/ shareholder group, investors may also wish to seize the opportunity to register their English language, common law Wills in the soon-tobe-launched (expected 30th April, 2015) DIFC Wills & Probate Registry (DWPR). The DWPR provides a new set of rules relating to succession and inheritance matters for nonMuslims with immovable assets in Dubai.

The 5th Annual Investment Meeting (AIM) Exhibition 2015 was a huge success featuring in its three-day event all the different industry projects and services catered for the investment growth of various participating developing regions. AIM was focused on showcasing Dubai Government Achievements Exhibition (DGAE). This was also focused on promoting Foreign Direct Investments (FDIs) and effective ways to attract investors to various economy sectors in the U.A.E. and the Gulf region. At the 2015 event, there were more than 500 Exhibitors from 140 countries that showcased products, services and projects from the different sectors.

POOL INTERMENT IDEA IS IDEAL

Therefore, one of the options available to such investors is to pool investments and share the risk. This would allow individual investors to invest smaller sums and share the upside and any risk with others, distributing capital and risk. ''This amazing thought was shared by a dear friend of mine. The structure to do this is simple. A group of investors needs to first set up a company in one of the Free Zones in the UAE (depending on which property they are buying) as investors and shareholders. They must execute a shareholders’ agreement amongst themselves in order to document and agree on the sharing of the upside, risks and cost. The shareholders must also agree on and sign a Memorandum of Association of the company that lays out the objectives and the business and the mechanism for the management of the company.

Real estate investments play an important role in helping investors achieve their investment objectives. To achieve the most out of the opportunities available, you not only require a broad market access but a good understanding of the market as well and have to have patience. All individual investors may or may not have the risk appetite for the current scenario in the real estate sector in Dubai.

This company would then open a bank account in the UAE and the individual investors would pay money in order to purchase shares of the company. The shareholders would also form a Board of Directors of the company that would then agree on and approve an investment and authorise one or more amongst them to execute all necessary steps to make the investment. The

The UAE is ranked first among Arab nations and is at 22nd position globally in the Global Investment Indicator, which covers the period from June 1, 2013 to June 30, 2014.

Under the rules of the DWPR, individuals with assets in Dubai now will have the ability to register in English language that creates legal certainty for the inheritance of their assets after death. It is a simple and efficient mechanism to pass on their estates according to their wishes.Finally I feel very confident about Dubai real estate market and in the long-term I can only see the market registering significant growth.

April 2015 Issue -29 /// 31

COLUMN

and dramatically across development indicators, reflecting the areas where our economy is progressing ... notably, security and stability indicators are among the best in the world... and the welfare of our citizens is our first priority.”

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MARKET

YIELDS â&#x20AC;Ś TIME FOR SOME ANALYSIS Mohanad Alwadiya, MD of Harbor Real Estate & Instructor at the Dubai Real Estate Institute, the official training & certification arm of the Dubai Land Department

ubaiâ&#x20AC;&#x2122;s rental yields have always been strong, particularly when compared to countries where rental income is taxed at high marginal tax rates. With a market that boasts an Average Gross Yield of around 6.5%, it stands as a beacon for those who are not hindered by borders and who appreciate the significant structural and regulatory development that the Dubai market has undertaken. There are a number of factors, which will influence gross yields and not all of them are that obvious.

No market is homogenous across segments. In a perfect economic scenario, where equilibrium between supply and demand has been achieved in the industry, Gross Yields will be determined by market forces. However, as we all know, the industry in Dubai today is not in equilibrium in that the relationship between supply and demand differs greatly across segments and asset types. For example, the wellchronicled dearth of affordable housing for small families in Dubai has seen Gross Yields surge in the more affordable developments while the same increases have not been witnessed in the, perhaps, overly abundant luxury developments. In developments such as Skycourts, Q Point, Discovery Gardens and International City, Gross Yields of anywhere up to 10% have been achievable in the past 24 months. This level of Gross Yield is virtually impossible to achieve in the luxury segment of the market while the middle or mid-upper segments comprised of developments such as Arabian Ranches, the Villa Project, Emirates Living or The Greens are all seeing average Gross Yields of 6.5-7%. The reasons for such variances in gross yield are many. Factors such as socio economics, microeconomics, real estate cycles, work force mobility, net migration and federal, state and local fiscal, monetary and development policies all have a significant bearing on the supply and demand equation in real estate. The

April 2015 Issue -29 /// 32

ebb and flow of population migration (and there fore demand) between Dubai and its neighboring Emirates and even between areas and developments within Dubai itself resulting from volatility in rental rates driven by economically induced industry imbalances over the past 7 years merely reflected the type of market gyrations that become symptomatic of these causal factors. Of course, one of the inhibitors to the Dubai market operating in total freedom was the introduction of legislation governing rental increases in the Emirate. Notwithstanding its likely effect in limiting Average Gross Yield growth, the introduction of the legislation was necessary from a broader economic point of view to ensure that Dubai does not price itself out of an increasingly competitive global market. Ironically, the legislation will actually assist in support Average Gross Yield levels in the long term by ensuring that the costs of living and doing business in Dubai is globally competitive, conducive and supportive to ongoing economic expansion and population growth. This should be considered a prerequisite for the industry to flourish. But while gross yields are typically determined by what the market is willing to pay and/or afford, there are supply side factors that will have a bearing, particularly where supply is tight or costs to bring assets to the market are inefficient. A close look at Gross Yields can reveal a number of insights. It can provide a retrospective view or learning opportunity by revealing how accurately market factors were comprehended, analyzed, forecasted and modelled when planning a particular development; it can highlight inefficient and costly construction methods and techniques; it can highlight future price/revenue adjustment opportunities, new segment or geographic concentration opportunities; it can reveal superior (or inferior) sales, branding and marketing techniques or superior product attributes; it can highlight impending revenue and eventual margin

pressure where yields appear a little too extravagant when compared to the market or even highlight where an industry is with regards to its cycle. Gross Yields can also highlight inefficiencies because inefficiencies, unless corrected, must be eventually supported by either Gross Yield or margin reduction. Every investor is concerned with what eventually can be put into his wallet and expectations of Net Yield will always pressure Gross Yield and the cost of resources required to generate that Gross Yield. In times of tight supply, inefficiencies in construction, administration, maintenance and operating methodologies are hidden because elevated Gross Yields driven by excessive market demand are more likely to drive acceptable Net Yields for investors. However, the real test as to effective Yield management is when supply exceeds demand. For example, the Gross Yield on a two-bedroom apartment in the Dubai Marina would be about 7.5% and, assuming a service charge rate of AED15 per sq.ft. and normal maintenance requirements are met, Net Yield would not be less than 6.0% or a 20% reduction from the Average Gross Yield. When considering that 20% of the Average Gross Yield is being sunk into what are effectively operating costs, efficiencies can be called into question it becomes apparent that Gross Yield that is being pressured by excess supply will be quickly eroded by excessive Facility Management / Service Charges or inefficient Facility Management or Service and Maintenance operations. Something has to give and usually Net Yields are the first to suffer. No doubt, once more Owners Associations are established, operational and assume legal status, the opportunities for generating greater efficiencies will develop as Owners Associations become more adept and empowered in managing properties and, as a result, more efficient and effective service providers are appointed to provide more cost effective building maintenance. Just one more step in the maturation process.

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MARKET Alain Robert climbs up Cayan Tower

GRAND LAUNCH BY CAYAN Cayan Group launches projects worth AED3.1 billion amidst a thrilling event that witnessed ‘Spiderman’ make a record-breaking climb up the twisted Cayan Tower.

ayan Group, the Middle East’s premier Property Developer and Real Estate Investment group, announced the launch of its new projects worth AED3.1 billion in both Dubai and Riyadh. The projects portfolio varies from branded residences to hotel apartments and commercial towers. One of the most iconic developments that Cayan Group launched in collaboration with the UAE-based financial investment company, Shuaa Capital is Cayan Cantara, which is located in Dubai along the strategic Umm Suqeim Road and comprises branded residence and hotel apartments featuring unique design and facilities. Other projects launched were Samaya, a unique one million square meter masterplan in Riyadh and CM1, a commercial luxurious building along King Fahed Road in Riyadh. Coinciding with the press conference was the thrilling, recordbreaking feat carried out by French climber Alain Robert, popularly known

April 2015 Issue -29 /// 34

as ‘Spiderman,’ who conquered the twisted Cayan Tower a landmark officially declared by the Guinness Book of World Records in 2015 as the globe’s tallest twisted tower. Held at the Grosvenor House Dubai Marina, the press conference was attended by VIP guests and elite media and featured speakers from Cayan Group (President and Chairman Ahmed Al Hatti) and Shuaa Capital (CEO – Investment Banking, Karim Schoeib). The press conference was followed by a grand gala dinner infused with enjoyable performances. Starting by welcoming guests to the gala dinner, Ahmed Al Hatti said: “We are extremely pleased to launch our upcoming projects, Cayan Cantara in Dubai and CM1 and Samaya in Riyadh and look forward to strengthening our partnerships with Shuaa Capital. With the development of world-class residential and commercial projects in the Middle East, we aim to reaffirm our commitment to providing our

clients with superlative office and housing options in preferred strategic locations in the two cities.” The highlight of the event was Alain Robert’s electrifying climb up Cayan Tower. Guests at the press conference were treated to an uninterrupted view of Alain scaling the meandering building through cameras and TVs live broadcasting his stunt along with a huge spotlight deployed on him. Additionally, the hour long ascent was open to public as well who assembled at the foot of the massive Tower to watch the daunting task which was even tougher than usual given the twisted design of the building. Visibly pleased after his conquest, Alain Robert said, “I am thrilled that I managed to complete this climb. As the building design was different, ascending this building was more challenging but nothing pleases me more than completing a challenge

PROPERTY FEATURES 4 ENSUITE BEDROOMS + MAID’S OPEN KITCHEN CONCEPT SPACIOUS PRIVATE BASEMENT ROOFTOP POOL AND BBQ AREA

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MARKET like the Cayan Tower. Finally, I would like to thank Cayan Group for their cooperation and for granting me the opportunity to make this climb happen.â&#x20AC;?

comfort they crave. Various facilities within Cayan Cantara are connected through a marvellously designed bridge, a signature touch enabling residents to enjoy a magnificent view.

LAUNCHED PROJECTS CAYAN CANTARA

CM1

Located in Dubai and consisting of two towers; branded residences and hotel apartments, Cayan Cantara has been designed by one of the world's most renowned architects and boasts of several main, recreational, and comfort facilities and services. These include retail shops, restaurants, luxurious world-renowned spa, a hanging glass-walled swimming pool, a fitness center, the highest outdoor screen and a conference hall, among many others. All were constructed within an exceptional, environmentfriendly residential area that preserves energy while giving residents the

Located on the King Fahd Road in Riyadh, CM1 will be the upcoming headquarter of Cayan Group. CM1 is a sophisticated business center that presents a perfect model of a distinct, multi-use integrated commercial complex, which supports the business with its modern and highend facilities and services including luxury offices, swimming pool and high tech fitness center in addition to a multipurpose hall and a restaurant. A well-developed infrastructure and retail shops, plus 10 floors for rental and ownership purposes of corporate administrative upscale offices equipped with the latest technologies. CM1 building is an

approach that considers the overall environmental impact of a building as well the health and well-being of its occupants.

SAMAYA SAMAYA is a remarkable master development located in a prime area in North Western Riyadh. The development area is almost triangular shape with the west ring road on its Eastern boundaries, in addition to the access through King Abdullah road. Samaya occupies more than 1M m2, providing fanciful people with a great opportunity to own a land or build a home. The project will be developed with top quality infrastructure and amenities, and will feature mosques, parks, retail area and walking tracks around the community. All amenities comprised in the development shall provide residents an unmatched living and recreational experience.

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MARKET

CITYSCAPE ABU DHABI 2015: BIGGER AND BETTER Exclusive interview with Wouter Molman, Director, Cityscape Group By Binesh Panicker

What is your take on the current scenario in Abu Dhabi’s property market? The current stability within the Abu Dhabi market bodes well for developers, investors and home buyers. Latest research and statistics coming from Abu Dhabi indicate that there is a renewed confidence in the property sector with construction visibly moving. Following a 10% increase in 2014, rental rates are expected to continue to rise at a steady pace throughout 2015, though at single digit levels. The demand for housing continues to increase due to the low availability across the board, in particular for quality stock on the secondary market. Popular communities like Saadiyat Island, Raha Beach and Reem Island are performing particularly well.

How do you compare Abu Dhabi market with Dubai market? The Dubai and Abu Dhabi market, though linked due to their proximity, are still two quite distinct market places with their own regulations, trends and supply and demand fundamentals. A frequently heard comment to compare both markets is that Abu Dhabi typically follows Dubai market sentiment with some delay, which could explain why the Abu Dhabi market is still witnessing continued growth, and the Dubai market has been more stable in recent months. An interesting difference between both markets at the moment is that Abu Dhabi’s property market is mainly driven by luxurious developments in prime locations, while in Dubai the trend seems to be moving more towards

affordable housing schemes. Developers including Emaar, Nshama, Danube and DAMAC have all, reportedly successfully, launched more affordable townhouses and apartments recently, targeting home buyers that previously have not been able to get on the property ladder.

What are your expectations for this year’s Cityscape in Abu Dhabi? Cityscape Abu Dhabi is in a great shape, having grown by double digit numbers for the second year in a row, with more exhibitors and an additional exhibition hall to accommodate the growth in exhibition space. Last year, the event turned a corner following several

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MARKET challenging years since 2009, when the event grew 15% to welcome 120 exhibitors. This trend will continue into 2015, as we are expecting more than 130 companies to showcase their real estate projects and services on 21st-23rd of April at the Abu Dhabi National Exhibition Centre (ADNEC). In terms of attendance, we welcomed a little over 17,000 visitors last year, representing a 15% y-o-y increase. We can expect to see a similar growth trend this year with the majority of our visitors coming from not only Abu Dhabi but the rest of the GCC as well.

Please tell us a little about the special attractions and events in Abu Dhabi Cityscape Several of our exhibitors have informed us about new project launches and announcements that are preparing for the event. We are unable to disclose any information on April 2015 Issue -29 /// 38

these in this stage, but there certainly will be a lot to look forward to. One of the highlights of the event include the Abu Dhabi Market Overview & Luncheon which, in conjunction with JLL, will draw attention to the Emirateâ&#x20AC;&#x2122;s latest projects and initiatives including the anticipated new real estate regulations. The main focus of this forum will be on supporting differentiation and creating sustainable economic growth in the capital. Some of the key speakers include Fergal Harris, Global Head of Real Estate and Family Conglomerates at National Bank of Abu Dhabi, Talal Al Dhiyebi, Chief Development Officer at Aldar Properties and David Dudley, Regional Director & Head of Abu Dhabi Office of JLL. There will also be a series of networking events including the annual Networking Reception which offers a platform for influential decision makers, international investors, developers,

architects and consultants to meet and exchange ideas.

Which are the major clients participating at this year's event? All of Abu Dhabiâ&#x20AC;&#x2122;s key real estate companies will once again come out in full force. In addition to developers and banks including Aldar, Mubadala, Al Qudra, Manazel, Wahat al Zaweya, Eshraq, National Bank of Abu Dhabi and Masdar, the event will also see new participants such as Eagle Hills participating, as well as returning companies including TDIC, Al Forsan and Reem Developers. The Abu Dhabi Government will be represented by Strategic Partner Abu Dhabi Department of Municipal Affairs, as well as Urban Planning Council, who will be present to update the public on the latest progress made with Vision 2030. Participation from Turkey and Jordan is set to grow significantly as well.

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MARKET

Downtown, Dubai

DUBAI RESIDENTIAL MARKET: Q2 2015 Paula Enander, Partner, Stockholm Real Estate, shares her views on what the residential market in Dubai can expect in the second quarter of this year.

April 2015 Issue -29 /// 41

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MARKET

Sheikh Zayed Road, Dubai

here is no doubt in stating that the Dubai residential market has been one of the hottest real estate markets on the planet, with residential buildings rapidly being built in response to the huge demand generated due to Dubaiâ&#x20AC;&#x2122;s cosmopolitan atmosphere that has attracted millions of foreigners. However, like any global hotspot that is thriving to become the capital of the world, a calming, and perhaps a soothing, phase was bound to happen. We have seen a minor downturn in Dubaiâ&#x20AC;&#x2122;s residential property market in the first quarter of 2015, with apartment and villa prices falling approximately 1.86%, values are still up year by year according to the latest index from REIDIN, showing an increase of 6.7% compared to 12 months ago. We believe that there will be a further decline. Existing properties may also suffer as they could be April 2015 Issue -29 /// 42

Furthermore, looking at the world market trends in the real estate sector, we have seen that it has stabilized with some countries seeing a price increase again. There we think the central banks have played a big role by decreasing the interest rates and therefore making it more lucrative for end users to buy instead of renting. Paula Enander Partner Stockholm Real Estate

seen as outdated buildings when compared to the newly-built areas. However, in the already established and prime parts of the city such as Downtown Dubai and Dubai Marina, prices are projected to hold up better as these popular locations have an already established reputation while newly emerging locations could be exposed to price falls as they have yet to establish a solid foundation.

We hope to see that the UAE Central Bank will follow this trend, especially as it is very lucrative for people to buy rather than paying high rents, and with a decrease in interest rates I believe many will be willing to take the step of buying their own home. From a business perspective, Stockholm Real Estate projects that in the next year we will see an increase in business activity, which has been highlighted by the governmentâ&#x20AC;&#x2122;s 2015 budget announcement, presenting a revenue increase of 11%.

AWARDS NIGHT

12th of May 2015 at The Address hotel, Marina, Dubai For more enquiries contact: awards@propertyonline.ae / 04 33 86 724

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HOSPITALITY

Park Inn by Radisson Dubai Motor City

LODGING GUESTS COMFORTABLY AT REASONABLE PRICES IN DUBAI Affordable quality offering in the neighbourhood for visiting friends and family, or business partners are on the rise. By Nicole Walter/freelance writer

mpressive luxury properties may dominate Dubai’s skyline but affordable quality offering in the neighbourhood for visiting friends and family, or business partners are on the rise. Today options remain far and few between, but with good reason, according to John

April 2015 Issue -29 /// 44

Podaras, Managing Partner at Hotel Development Resources (HDR), arguing that visiting friends and relatives (VFR) may not receive the credit they are due as a demand driver during the season, yet alone don’t fill a hotel. “The VFR segment is often lost within the FIT/leisure segment

in market assessments. However, they aren’t really large enough to support the financial viability of any hotel,” he says, ''adding that general leisure and corporate demand filled the gap, particularly during the soft summer period. Guesthouses and motels, typically run by families and

Therefore, economy hotels have taken over the ‘affordable’ role with rates starting at AED195 and going up to AED450, depending on brand and area. “Branded three-star hotels have grown in popularity, thanks to Accor’s ibis paving the way, breaking the ‘most expensive hotels in the world’ myth surrounding Dubai,” John remarks. Land prices are pushing some of these brands further out of town, a positive side effect for residents, even if their guests don’t take over the hotels. The Premier Inn at Dubai Investments Park (DIP) and Dubai Silicon Oasis (DSO), attract around 45% leisure guests. Darroch Crawford, the MD at Premier Inn MENA, estimates only one eighth of them are VFR, making it clear why this segment of the market cannot be relied upon alone, despite being ideal for visiting families. “Premier Inn is extremely popular with both, business and leisure travellers, alike, because of the value for money we offer. In addition our rooms can all comfortably sleep two adults and two children for the same price as a single room,” Darroch says.

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HOSPITALITY

LATEST TRENDS

BRANDED THREE-STAR HOTELS HAVE GROWN IN POPULARITY, THANKS TO ACCOR’S IBIS PAVING THE WAY, BREAKING THE ‘MOST EXPENSIVE HOTELS IN THE WORLD’ MYTH SURROUNDING DUBAI.” JOHN PODARAS, MANAGING PARTNER, HOTEL DEVELOPMENT RESOURCES (HDR)

NEW PROPERTIES

casual labour in Europe, aren’t really an option simply because they are difficult to replicate here. ‘Tripadvisor’ seems to prove the point, only listing a handful in operation around Dubai today,'' says John. “Residential communities are the ideal location for VFR demand,” he concurs, but explains that getting licenses, work permits and land tends to be expensive for smaller properties, in particular in non-freehold areas. ‘La Maison d'Hôtes’ in Jumeirah, closed in 2010 despite demand for it still apparent today. “We inherited their phone number and still get two to three calls every week for rooms,” John remarks.

The upcoming Premier Inns at Al Maktoum International Airport, Al Jadaf and Ibn Battuta Mall, expect to attract 35%, 50% and 55% leisure respectively, the remainder corporate. However, Park Inn by Radisson will add to the VFR menu, with one opening in Motorcity by mid 2017, and one in Jumeirah Village Circle (JVC) by end 2017. The two properties are part of the Dubai inland expansion plan towards developing Dubai World Central and Jebel Ali, according to Elie Milky, Senior Director Business Development, MEA at the Rezidor Hotel Group. “The Park Inn by Radisson in Motor City will be connected to a mall and located on the Autodrome, thus creating a solid unique selling proposition,” Elie justifies a market extending beyond VFR. Similarly, the serviced apartments at its JVC property will in addition benefit from corporate and leisure demand from the International Media Production

Zone (IMPZ) across the road. “Park Inn by Radisson is the right brand to open in a developing submarket and secondary locations as it carries relatively lower development and operational risk. Such a product capitalises on this kind of opportunity as we see such up-and-coming locations to have great potential in our expansion strategy,” Elie explains. Rates for these properties haven’t been set yet, as a guideline the Al Barsha Park in charges around AED450 a night. International City, meanwhile will be served by the ibis Styles, opening at Dragonmart this year. This happy feel family-friendly lifestyle April 2015 Issue -29 /// 45

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HOSPITALITY

PREMIER INN IS EXTREMELY POPULAR WITH BOTH, BUSINESS AND LEISURE TRAVELLERS, ALIKE, BECAUSE OF THE VALUE FOR MONEY WE OFFER. IN ADDITION OUR ROOMS CAN ALL COMFORTABLY SLEEP TWO ADULTS AND TWO CHILDREN FOR THE SAME PRICE AS A SINGLE ROOM.” DARROCH CRAWFORD, MD, PREMIER INN MENA

Yotel,Business Bay, Dubai

brand comes in a trendy design with all-inclusive rates. “In terms of pricing ibis versus ibis Styles, the latter shall be more pricey, depending on location, demand and room size, they usually will be larger,” says Olivier Hick, VP Operations Midscale & Economic Brands HotelServices Gulf and Levant at Accor. An entirely new option to Dubai, the YOTEL with 483 cabins and 127 serviced apartments and club lounge, will open in Business Bay in 2018, the concept affiliated to IFA Hotels & Resorts promises to deliver essential

April 2015 Issue -29 /// 46

luxuries squeezed into smartly designed spaces. “Only steps away from the metro station and the new Dubai Water Canal, this is an exceptional location for our brand’s ability to deliver more rooms in less space,” remarks Hubert Viriot, CEO of YOTEL. Rates are likely to be a little dearer than other economy hotels. “It’s too early to point out a specific room rate but the property will follow our affordable luxury positioning, close to a four-star hotels range,” Hubert reveals. Inspired by premium airline cabins, techno walls,

smart beds glide into couch-work or sleep mode, with soundtrack ‘Yawn’ engineered to induce dreamland, the first YOTEL’s emerged at LGW, LHR and AMS airports. “Naturally, our first properties were located within airport environments, targeting busy international travellers,” says Hubert. Yet, in 2011 a city hotel opened in Manhattan.“Our cabins simply had to be redesigned to allow for longer stays. The hotel has been a resounding success, trading at 90% occupancy since opening,” he remarks.

Visit: by appointement Dubai, JLT Cluster N, Jbc 4 Tower 1302 P.O Box 309130 JLT Dubai, U.A.E Showroom Mob: 050 4537375 Tel: +971 44286688, Fax: +971 44278833 E-mail: helen@designmobl.com www.designmobl.com Follow us on: Design Mobl

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HOSPITALITY

Column

Jitheesh Thilak BA, LLB (Hons). LLM (Int. Economic Law) Solicitor (England & Wales) Advocate (Supreme Court of India) E: jthilak@gmail.com

NEW USUFRUCT LAW: A CATALYST IN THE HOSPITALITY DEVELOPMENT IN SHARJAH

n 16th of November 2014, H.H. Sultan bin Mohammed Al Qasimi, the Crown Prince in the Emirate of Sharjah, issued Executive Council Resolution No. 26 of 2014 Concerning the Usufruct of Real Estate Properties in the Emirate of Sharjah (the “Resolution”). The Resolution allows foreign nationals and companies owned by foreign nationals to own usufruct rights over vacant plots of land for a period of 100 years in Sharjah, and to register such usufruct right with the Sharjah Real Estate Registration Department. The Resolution also permits foreign developers to register projects and sell usufruct rights to investors subject to obtaining a special approval from the Ruler of Sharjah. The earlier position was that foreign nationals or companies owned by foreign nationals were not permitted to own real estate in Sharjah. With the introduction of the Resolution, the foreign nationals are not permitted to obtain freehold ownership of real estate in Sharjah (unless special exemption is obtained from the Ruler), however, they will now be permitted to purchase real estate pursuant to the grant of a usufruct property right for a maximum period of 100 years. Article 6 of the Resolution states that foreign nationals will be permitted to own

April 2015 Issue -29 /// 48

a usufruct right over vacant land in Sharjah subject to the following preconditions, namely: · For foreign natural persons, they must hold a valid residency in the UAE; and · For foreign corporate entities, they must hold a valid commercial license in the UAE. Furthermore, foreign investors under the Resolution shall have the right to assign the usufruct right to a third party provided that such assignment does not exceed the original usufruct period registered at Sharjah Real Estate Registration Department and subject to prior approval from Sharjah Real Estate Registration Department. The usufruct right holder shall be entitled to all natural, industrial and civil benefits of the property subject to the usufruct, namely: · To personally enjoy the property without any limitations, · To lease the property to any third party and to assign his usufructory rights over the real estate property to third parties. However, the assignment to the usufructory rights shall terminate upon the termination of the assigned usufruct right; and · To make useful improvements

or expenses for further benefits as the usufruct right holder deems fit (but without the right to radically change the structure or destroy it). The Resolution was issued to augment investment in hotel and hotel apartments in Sharjah, by offering foreign nationals the opportunity to obtain usufruct rights which can extend up to 100 years. This is a welcome step to the foreign investors who wish to legally acquire or develop hotels in the Emirate of Sharjah. The total number of hotel facilities in Sharjah stands at 106 (50 hotels and 56 hotel apartments). The number of hotel rooms has touched 10,000. The Emirate has been making efforts to boost and expand the hotel industry capacity by encouraging international investors and hotel groups to invest in the hospitality sector in order to raise the number of hotel rooms to at least 14,000 in near future. Growth in hotel rooms shows renewed confidence by investors in Sharjah's tourism industry.The Resolution would not only build the confidence of international hotel owners, investors, operators, franchisees, but also would act as a comfort to increasing hotel financing trends. The Resolution would clearly be a catalyst in the upcoming growth of the hospitality industry in Sharjah.

LISTINGS

COMMUNITY SPECIALIST

04 4308902 www.castlesplaza.com

MARINA PLAZA PLAZA TOP TOP VIEW VIEW MARINA

VIEW FROM OFFICE

Shell & Core | Oﬃce Unit Sheikh Zayed Road View SP: AED 6,800,000/-

Enlist you Proper es for Sale/ Rent More Details Call 050 62 55 710

Tel +971 4 3396222 | www.spfrealty.com

S P E C I A L I S T

EXECUTIVE TOWER B  2 BEDS +LAUNDRY  AREASQFT: 1606  UNOBSTRUCTED SEA VIEW SELLING PRICE: 2.250 MILLION | RENTED EXECUTIVE TOWER K  1 BED  AREASQFT: 1050  POOL VIEW SELLING PRICE: 1.45 MILLION | VACANT EXECUTIVE TOWER H | HOT DEAL  4 BEDS + MAIDS  AREASQFT: 2744  BUSINESS BAY LAKE VIEW  VACANT ON TRANSFER SELLING PRICE: 4.3 MILLION EXECUTIVE TOWER M  2 BEDS + LAUNDRY  AREASQFT: 1580  BURJ KHALIFA AND SEA VIEW SELLING PRICE: 2.2 MILLION | VACANT EXECUTIVE TOWER B  2 BEDS + LAUNDRY  AREASQFT: 1606  UNOBSTRUCTED BURJ KHALIFA & FOUNTAIN VIEW  VACANT; HI FLOOR SELLING PRICE:2.55 MILLION EXECUTIVE TOWER H  3 BEDS + MAIDS  AREASQFT: 2200  SEA VIEW SELLING PRICE: 3.2 MILLION | RENTED EXECUTIVE TOWER L  4 BEDS + MAIDS  AREASQFT: 3400  SEA AND BB VIEW  RENTED @ 195 TILL AUG SELLING PRICE : 4.6 MILLION EXECUTIVE TOWER J  VERY HIGH FLOOR CANAL VIEW, BIZ BAY & SZR VIEW.  SEA VIEW  RENTED AT 250K TILL SEP 2015 SELLING PRICE : 5.7 MILLION

Imran j (Brn: 12258) - Senior property consultant +971 50 4289220 im@spfrealty.com

COMMUNITY SPECIALIST

BUSINESS BAY

COMMUNITY SPECIALIST

PALM JUMEIRAH

S P E C I A L I S T

Tel +971 4 3882220 | www.aquaproperties.com

J U M E I R A H Z A B E E L S A R AY 4 & 5 B E D V I L L A S  A R E A S Q F T 6 , 3 4 7 - 7, 0 8 7  F U L LY F U R N I S H E D | S E A V I E W S TA R T I N G F R O M A E D 2 6 , 0 0 0 , 0 0 0 BALQIS RESIDENCE B E D A PA R T M E N T A R E A S Q F T 1 2 , 4 9 0  SEA VI EW AED 25,000,000 4

GAR DEN HOMES B ED VI LLA  AR EA SQ FT 6 , 0 0 0  SEA VI EW AED 1 3, 500,000 & UP 5

FAIRMONT RESIDENCE  3 BED + M A I D A P A R T M E N T  AREA SQ FT 3 , 0 2 2  SEA VIEW AED 6,900,000 MAR I NA R ESI DEN CE B E D A PA R T M E N T A R E A S Q F T 2 , 5 4 0 S E A V I E W AED 4,500,000 3

TIARA AQUAMARINE 1 B E D A PA R T M E N T A R E A S Q F T 1 , 3 5 9 | T Y P E F P O O L V I E W AED 2,301,555 PA L M V I E WS W E ST S T U D I O A PA R T M E N T S A R E A S Q F T 5 0 6 S E A & P O O L V I E W AED 1,250,000  M U LT I P L E

O C E A N A AT L A N T I C B E D A PA R T M E N T  AREA SQ FT 7, 6 8 3 CO M M U N I T Y V I E W AED 2,400,000 1

Dorothy Biro

+971 56 1053655 Dorothy@aquaproperties.com BRN : 29200

Antonina Turdalieva +971 55 4226575 Antonina@aquaproperties.com BRN : 28442

S P E C I A L I S T

Tel +971 4 395 7593 | www.snsprop.com ORN - 2576

Deepak Arora

Azas Tabi Judith

+971 55 47 21 400 deepak@snsprop.com

+971 55 33 68 286 tabi@snsprop.com

SALE PRICE

BUILDING

BEDROOM

BURJ AL NUJOOM

STUDIO

500

985,000

8 BOULEVARD WALK

STUDIO

500

1,200,000

STANDPOINT

STUDIO

460

1,250,000

29 BOULEVARD

STUDIO

527

1,380,000

BURJ VIEWS

1 BED

910

1,350,000

LOFT CENTRAL

1 BED

820

1,450,000

SOUTHRIDGE

1 BED

936

1,650,000

29 BOULEVARD

1 BED + STUDY

1,030

2,100,000

SQ.FT

(ONWARDS)

BURJ VIEWS

2 BEDS

1,350

2,050,000

29 BOULEVARD

2 BEDS

1,200

2,600,000

BOULEVARD CENTRAL

2 BEDS

1,560

3,100,000

BURJ KHALIFA

2 BEDS

1,450

5,500,000

29 BOULEVARD

3 BEDS

1,578

4,088,888

CLAREN TOWER

3 BEDS

1,424

4,900,000

RESIDENCE

3 BEDS + MAID 3 BEDS

1,838

5,600,000

2,333

7,700,000

BURJ KHALIFA

THE ADDRESS SERVICED APARTMENTS ADDRESS BLVD/ADDRESS FOUNTAIN VIEWS/ADDRESS SKY VIEWS Address Blvd

1 Bedroom

1,750,000 ++

Address Fountain View

2 Bedroom

3,130,000 ++

Address Skyview

2 Bedroom

2,700,000 ++

Address Blvd

3 Bedroom

5,500,000 ++

Address Blvd

4 Bedroom

8,840,000 ++

THE ADDRESS DUBAI MALL Address Dubai Mall Studio

1,900,000

Address Dubai Mall

1 Bedroom

2,300,000

Address Dubai Mall

2 Bedroom

6,800,000

Address Dubai Mall

3 Bedroom

10,500,000

COMMUNITY SPECIALIST

DOWNTOWN

RERA # 203

04 4308902 www.castlesplaza.com

MARINA RESIDENCE

SP : AED 25,000,000/-

Type H | 5 B/R Penthouse + Triplex with Private Elevator Size : 13,095.47 sq. . Rented Panoramic Sea, Palm, Atlan s, Marina View

Call: Geetu | BRN 25209 | Mob 055 1126979

ALBARARI

PRIME MEADOWS

6 Bedrooms + Study with En-Suite 1 + Maid’s

Type 14 | 4 Bedroom + Maid’s

SP: AED 13,500,000 Call: Oksana | BRN 11556 | Mob 050 42 52 031

SP: AED 6,099,000/Call: Aman | BRN 6621 | Mob 050 46 99 519

DUBAI MARINA WHARF

SPORTS CITY

SP: AED 1,100,000/SP: AED1,650,00/SP: AED 832,000/SP: AED 1,352,700/SP: AED 1,201,536/-

Call: Pavi | BRN 9821 |Mob 050 30 66 767

2 Bedrooms | BUA 1,493.83 Sea View | High Floor Sea and Marina view | Vacant

SP: AED 2,000,000 Call: Rajeev Rajeev| |BRN BRN24907 24907| |Mob Mob0508106767 050 81 06 767

BULK DEALS AVAILABLE FOR OFF PLAN PROJECTS IN CULTURAL VILLAGE | JVC | JVT | SPORTS CITY

Enlist you Proper es for Sale/ Rent More Details Call 050 62 55 710

aquaproperties.com C O N O TI C SS U E R R ST OG PR

FREEHOLD APARTMENTS FOR SALE 1,2,3 & 4 BEDROOMS SIMPLEX & DUPLEX STARTING FROM AED 1,300,000/-

STUNNING VIEWS PALM JUMEIRAH ARABIAN GULF BURJ AL ARAB

UNRIVALED PAYMENT PLAN

10% BOOKING CONSTRUCTION LINKED MILESTONES 40% PAYABLE 2 YEARS AFTER POSSESSION ESCROW NO. : 001582348323101

PROJECT NO : 138

PL N

JUMEIRAH PARK

EC SP

DUBAI MARINA

U ST

DUBAI MARINA

DEVELOPER : ABYAAR REAL ESTATE DEVELOPMENT

MAG 218

PRINCESS TOWER

LEGACY LARGE

2 BED, 3 BATH, 1,558 SQ.FT.

1 BED, 2 BATH, 862 SQ.FT.

5 BED, 5 BATH, 8,800 SQ.FT. WITH BIG PLOT SIZE,

PARTIAL SEA & MARINA VIEW

AMAZING SEA AND MARINA VIEWS

COMMUNITY VIEW,

MULTIPLE UNITS AVAILABLE!

MORE OPTIONS TO CHOOSE FROM SHAHID (BRN 31414)

HIGH FLOOR

SOFIENE (BRN 31373) 056 7559188

AED 2,195,000/-

4 BED, 4 BATH, 3,885 SQ.FT.

JOHNNY (BRN 31388) 056 6967268

AED 5,600,000/-

BAHIA 2 RESIDENCE

SPACIOUS 2 BED,

MULTIPLE 1 & 2 BEDS,

COMMUNITY VIEW

AED 3,250,000/-

1,228 SQ.FT. - 1,663 SQ.FT. RENT : STARTING @AED 120,000/-

KHUSRO (BRN 27523) 055 8992429

LA U

IN ! E V AY O M OD T

JVC

HAROON (BRN 28643) SALE : STARTING @AED 1,658,000/055 8992430

E SP

G N N ZI A TIO M A CA LO

SPORTS CITY

D Y TE NIT U M M

ALVORADA 3 - TYPE B1

ZANZABEEL 2 1,340 SQ.FT.

AED 8,900,000/-

6 BED, 6 BATH, 5,230 SQ.FT. GOLF COURSE VIEW,

AL SUFOUH

056 4649194 G

MIRADOR LA COLECCION - TYPE 13

AED 6,250,000/-

E IM ION PR AT C LO

OLD TOWN

ARABIAN RANCHES

AED 1,700,000/-

SHAHID (BRN 31414) 056 4649194

CANAL RESIDENCE

SEASONS COMMUNITY

NOORA RESIDENCE

1 BED, 1 BATH,

1 BED, 1.5 BATH, SUMMER CLUSTER

STUDIO, 1 BATH,

768 SQ.FT.

717 SQ.FT.

500 SQ.FT.

POOL VIEW, EUROPEAN STYLE

POOL VIEW

COMMUNITY VIEW

FAHD (BRN 27522) ATIF (BRN 29715) AMJAD (BRN 29136) AED 500,000/your interest in AED our650,000/upcoming projects developments@aquaproperties.com 055 2519878 050 3895677 056 4036954

Suite 1601, Boulevard Plaza Tower 1, Burj Khalifa District, Dubai

facebook.com/aquaproperties

GENERAL LISTINGS

+971 4 3882220

GENERAL LISTINGS

050 888 9510 admin@lacapitaledubai.com www.lacapitaledubai.com REAL SOLUTIONS TO REAL ESTATE

SOLUTIONS BEYOND REAL ESTATE

iu m

Ref: 53977

OP 1,938,888

Hills, BLDG A1 2 BR + Balconey, 1780sq. ft., JLT View, More Units are Avilable Ref: 53906

Dubai Land, Queue Point

JVC, Diamond Views 3

Shah

1 BR + Balcony, 895 sq. ft. Full Burj Khalifa View AED 1,893,888

Downtown, BLVD Crescent 1

Kunal

1 BR + Balcony, 909 sq. ft., Full Blvd & Partial Burj View O.P. AED 1,580,888

Ref: 53837 Pr

Hills, BLDG C2 1 BR + Balcony, 873 sq. ft. Meadows View O.P. AED

Nick

1,085,888

5% Ref: 53747 Pr em iu m

Stans

Vivian

Ref: 53845

1BR + Balcony, 737sq. ft. Community View AED 750,000

1 BR + Balcony, 591 sq. ft. Community View AED 510,000

Downtown, Burj Vista 1

Ref: 53477

Nick

4% Ref: XXXX Pr em iu m

Downtown, Burj Vista 1

Stans 2 BR + Balcony, 1390 sq. ft. AED Full Sea View 2,399,888

EMAAR GOLD & DIAMOND PARK, BUILDING 3 (GROUND FLOOR) OFFICE 3007, DUBAI, UAE

NEED HELP IN VOT

E & WIN

A HO LIDAY TRIP

Wants to process for JAFZA Company Investors visa process in 6 weeks

CALL 050 888 9510

iu m

Ref: 52956

OP 1,538,888

Mira, Phase 4 3 BR + Maid, 2385 sq. ft., Type 2M, Close to Pool and Park Ac Ref: 53749 tu al Vi ew

Springs, Springs 10

Dubailand, Mudon

O.P. 2,380,000

Ref: 53989 va

Pankaj

2BR + Balcony, 978 sq. ft., lake & sheikh zayed View AED 1,225,000

Kunal

4 BR+ Maid, 3786 sq. ft., Type B SINGLE RAW VIEW O.P. AED 3,050,000

Ac Ref: 53142 tu al Vi ew

JLT, Goldcrest Views 2

3 BR + Family + Maid, 2,458 sq. ft. Kunal AED Single row view

2 BR + Study, 1800 sq. ft., Type 4E AED Full Lake View 1,999,000

0% Ref: 53668 Pr em iu m

Ref: 53881

Al Barsha, Villa Lantana

Vivian

Ravish

The Views, Tanaro

Ravish

Specious 2 BR + Laundry + Store Room, 1414 sq. ft., AED Golf Course View 2,200,000

Ref: 53884

tiv

Downtown, Vida

2 BR+ Study, 1650 sq. ft., Full BLVD View, Nick 04 Series O.P. AED 4,088,888

BRN 12509, 25799, 25854, 25970, 27809, 28162, 28163, 29161, 30070,30010 & 30662

Commercial | Residential | Investment

Current Status

85% Completed

“THE ONLY 4 - STAR HOTEL” OF THE YEAR 2015 IN BUSINESS BAY STARTING FROM AED 699,000 ONLY.

BOOK

NOW

800 25287665

TOLL FREE 800 - ALBUROOJ

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