Big Project ME October 2017

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139

OCTOBER 2017 meconstructionnews.com

THE BUSINESS OF CONSTRUCTION

at home on the BaY

an exclusive first look at how the floating homes came to marasi business bay

© 2017 LACASA Architects & Engineering Consultants All Rights Reserved

AssistAnt Project MAnAger I’m Lubna El Orfaly and I am an

www.lacasa.ae

The key to successful project management lies in translating a client’s needs into the language used within the design. By working as a team across the different disciplines, we ensure that the requirements are communicated consistently at every step of the project.

From concept to detailing, every aspect of the design reflects the client’s vision as well as LACASA’s standard of quality.

Lubna El Orfaly

Assistant Project Manager

LACASA is committed to providing quality-driven designs within a multidisciplinary environment.

Established in 2006, the firm has grown significantly over the past eleven years. Today, LACASA boasts a diverse portfolio encompassing all types of developments and across the entire MENA region.

While it is said that perfection doesn’t exist, we believe that perfecting design can be achieved by cultivating extraordinary talent.

Contents

Issue 138 October 2017 08

16

20

28

38

46

16 A new way to resolution

42 All the small things

06 ME Construction News.com OnlIne

The biggest stories from Big Project Middle East’s home on the web

news analysIs

Mark Beer explains how the new TCD will help resolve disputes quicker and better

08 ARADA unveils Aljada district 20 Ziad Makhzoumi The bIg pIcTure

In prOfIle

$6.5bn urban megaproject to attract residents, investors and tourists to Sharjah

Gavin Davids speaks to Ziad Makhzoumi, the strategic advisor plotting DSI’s revival

12 GFH Capital sells US property

28 Journey to the Bay

InTernaTIOnal news

Atlanta-based Class A residential property sold for $43.45 million

14 Dubai office review Q2 2017 MarkeT repOrT

Knight Frank report finds that Dubai’s office rents dropped in the year to the Q2 2017, as a fragmented market performance continued

sITe VIsIT

Big Project ME gets an exclusive first look at the floating homes at Marasi Business Bay

38 Building from the Hart DeVelOpers

PNC Menon chats with Big Project ME about his plans for Sobha Group

sMarT buIlDIng MaTerIals

Nick Constantine looks at how advancements in building technology are changing the fundamentals of construction

46 Pragmatic planning MarkeT OVerVIew

Big Project ME looks at the growth sectors of Bahrain’s real estate market

52 Top Tenders TenDers

Big Project ME lists the Middle East’s biggest construction tenders for October 2017

56 Ready for VAT lasT wOrD

Neeraja Kalyanasundaram outlines how companies can prepare for VAT October 2017 3

Introduction

Business at the canal

L

ast year, during the judging process for the Middle East Consultant Awards (our sister magazine), one particular entry caught my eye. Submitted in the Urban Landscaping Project of the Year category by U+A, the renderings and drawings of Marasi Business Bay were a visual feast and showcased an imaginative and distinctive take on a waterfront destination.

It came as no surprise to me that it ended up being picked as the winner by the judges, and its success was met with almost universal acclaim on the night, as several other members of the industry commented on how impressive the project was.

Therefore, it was only natural that I kept an eye on the project as it developed over the last year, and my ears certainly pricked up when I heard about the floating homes concept being announced for it. Ever since I’ve been a young boy, I’ve been fascinated by the idea of living on a houseboat, so to see how Dubai would put its own spin on the concept was always going to be interesting!

As luck would have it, I didn’t have to wonder for too long, as Dubai Properties invited me down for an exclusive first look at the floating homes as they arrived from Port Rashid. Of course, I accepted with no hesitation, and it was quite the treat to hear how the men tasked with delivering the floating homes to

PUBLISHING DIrector RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 eDItorIAL DIrector VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5472 Supported by

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Middle East Solar Industry Association

Empowering Solar across the Middle East

4 October 2017

eDItorIAL eDItor gAVIN DAVIDS gavin.davids@cpimediagroup.com +971 4 375 5480 oNLINe eDItor BEN FLANAgAN ben.flanagan@cpimediagroup.com SUB eDItor AELRED DOYLE aelred.doyle@cpimediagroup.com

Marasi Business Bay achieved their objective, ahead of schedule to boot.

In the other big feature for this month’s issue, I had the chance to speak to Ziad Makhzoumi, the strategic consultant brought on board to pilot Drake and Scull International’s restructuring and return to the big time. While I was sad to see Wael Allan move on from the contractor, as I’ve known him for many years and respect him greatly, it was a pleasure to meet Ziad and hear how he plans to resolve the significant challenges he’s facing. I wish him and the team at DSI all the best and look forward to seeing DSI thrive.

Finally, the clock’s ticking ever closer to the submission deadline for the Big Project ME Awards. The trickle of awards is slowly starting to turn into a torrent. It’s a busy time of year for us, but as Marasi Business Bay proves, there are always some gems to uncover!

Gavin Davids editor gavin.davids@cpimediagroup.com @MecN_Gavin

PHotoGrAPHY MAkSYM PORIECHkIN

FoUNDer DOMINIC DE SOUSA (1959-2015) PrINteD BY PRINtwELL PRINtINg PRESS LLC

MArKetING MArKetING MANAGer SHEENA SAPSFORD sheena.sapsford@cpimediagroup.com +971 4 375 5498

ADVertISING coMMercIAL DIrector JUDE SLANN jude.slann@cpimediagroup.com +971 4 375 5714 SALeS execUtIVe tOM BROMLEY tom.bromley@cpimediagroup.com +971 4 375 5496

cIrcULAtIoN & ProDUctIoN DIStrIBUtIoN MANAGer SUNIL kUMAR sunil.kumar@cpimediagroup.com +971 4 375 5476 ProDUctIoN MANAGer VIPIN V. VIJAY vipin.vijay@cpimediagroup.com +971 4 375 5713

DeSIGN Art DIrector SIMON COBON simon.cobon@cpimediagroup.com

WeB DeVeLoPMeNt MOHAMMAD AwAIS SADIq SIDDIqUI

PUBLISHeD BY

Licensed by tECOM to registered company, CPI trade Publishing FZ LLC whose registered office is 207 – 209, Building 3, Dubai Studio City, Dubai, UAE www.cpitrademedia.com © Copyright 2017 CPI. All rights reserved while the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

Online

MOST POPULAR

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READERS’ COMMENTS

CONSTRUCTION

TIME fOR A REACTION

Kleindienst ‘to unveil Dubai mega project worth $680m’

CONSTRUCTION

Six Construct wins contract for Masdar City project

In pictures: first floating homes on way to Dubai’s Marasi Business Bay

INTERVIEWS

Arcon: Building concrete relationships in the UAE

CONSTRUCTION

Majid Al Futtaim in talks over ‘flagship’ Dubai project

MACHINERY

Doosan to merge divisions for EMEA expansion 6 October 2017

Video: JLL explores ‘what makes Dubai so ambitious’

I’m glad that this is finally being addressed (“Move to replace Dubai building facades after series of fires”, September 24).

After the Torch tower catching fire twice, one begins to think why they didn’t react the first time round? Fire-proof cladding is a good start, albeit a late one. Developers need to stop being cheap, and start valuing the lives of the people that live in these majestic buildings that make up the stunning skyline of Dubai.

If something as small as a cigarette butt can set off a fire large enough to engulf a skyscraper, someone cheaped out somewhere. Perhaps future property buyers should try lighting a match when they’re called for snagging.

Otherwise, quite literally, they’re letting their money go up in flames. Fun times for the insurers, who will now try and make the most of this opportunity to sell home insurance to property buyers.

I’d like to know what further steps will be taken by the government to curb these issues.

Name supplied, via email

The Big Picture

ARADA unveils $6.5bn Aljada urban district Mega project expected to attract residents, investors and tourists to Sharjah

Attractive opportunity The Aljada development will be an attractive opportunity for investors that “perfectly captures the essence of Sharjah”.

ARADA has announced the largest ever mixed-use development in Sharjah. The 2.2sqkm Aljada master-planned urban district is expected to house 70,000 residents once completed.

Aljada will be built in what is said to be the last major plot of undeveloped land in the heart of the emirate. The mega project is expected to spread over an area of 224 hectares and will be 2.2km long and 1km wide. The developer says the project has been zoned to create an integrated community where people can live an active lifestyle. According to ARADA, an extensive cycle network, running paths, parks and F&B options have been planned.

The development will also feature an entertainment and leisure precinct known as the Central Hub, which will be anchored by a musical fountain display and will pack in cafés and restaurants. Additionally, the precinct is set to feature the largest children’s adventure and discovery complex in the Northern Emirates, in addition to skate parks, an extreme sports centre and other indoor/ outdoor entertainment options.

Speaking about the launch, ARADA chairman HE Sheikh Sultan bin Ahmed Al Qasimi said, “Aljada reflects ARADA’s unwavering commitment to contribute to the Sharjah

leadership’s vision by creating unique urban communities with ample green spaces. We want to offer residents and investors up-scale living experiences.”

“We are confident that this development will raise interest in Sharjah even further, while strengthening its position as a secure and sought-after investment destination. Aljada also seeks to attract businesses looking to establish their base out of Sharjah, the UAE’s newest booming economic hub and a thriving businessfriendly environment.”

With regard to real estate, Aljada will offer stand-alone villas, semi-detached villas, townhouses,

lofts and apartments. The development is also said to boast generous open spaces and facilities including F&B outlets, schools, healthcare clinics and mosques.

ARADA says a significant portion of the master plan is dedicated to green spaces and community facilities, in an effort to create an attractive opportunity for investors that “perfectly captures the essence of Sharjah”.

A phased delivery schedule has been planned for the project, with the first batch of deliveries expected to begin in 2019. Construction on Aljada is set to begin in the first quarter of 2018 and is expected to be completed by 2025.

“Aljada reflects ARADA’s unwavering commitment to contribute to the Sharjah leadership’s vision by creating unique urban communities” October 2017 9

The Big Picture

Recognising the shortfall MENA governments have recognised the shortfall in healthcare provision and have begun investing in the sector, the JLL report said.

Opportunities in MENA healthcare sector Region is lagging behind other developed economies in healthcare spending Jones Lang LaSalle (JLL)’s Healthy Returns report finds that the MENA region is lagging behind other developed economies with regard to percapita spending on healthcare and the provision of hospital beds. The report notes that this shortfall will create opportunities for investors and other real estate players in the healthcare market over the next five years.

The report forecasts that the number of people over 65 in the MENA region will increase by 4.4% pa over the next five years, and will hit 26 million by 2020. In line with these figures, the report states that an additional 10,500 hospital beds (approximately 70 hospitals) will be needed over the next five years in cities such as Dubai, Abu Dhabi, Riyadh, Jeddah and Cairo.

10 October 2017

“With the current shortage of hospitals, clinics and other healthcare facilities, an ageing population and the rise of medical tourism, there is a pressing need for additional healthcare facilities in the region over the coming years. To merely keep pace with the forecast population growth will require investment in around 70 new hospitals in the five major cities across the region,” said Craig Plumb, head of research, MENA – JLL. The report finds that per capita spending on healthcare in the UAE is only 17% of that in other countries, such as Switzerland.

Additionally, an average of 1.9 beds per 1,000 people was found to be the norm in the MENA region, in contrast to an OECD average of 4.8 per 1,000.

Plumb added, “Given current

1.9

Hospital beds per 1,000 people in MENA

4.8

Hospital beds per 1,000 people is the global average

3,130

New hospitals required to be developed by 2022 to be in line with global standards

and future constraints in government spending, it is widely recognised that the ambitious plans to improve healthcare provision in the region will depend upon attracting greater private sector investment.”

Per the report, MENA governments have recognised the shortfall in healthcare provision. The study further states that in order to achieve the same provision of hospital beds as in OECD countries by 2022, the MENA region would need an additional 470,000 beds, equivalent to 3,130 new hospitals.

The JLL report says developers of large planned communities in the region have recognised the need for more healthcare provision and are incorporating clinics and other non-specialist facilities in their developments.

The Big Picture

Second cruise terminal for Dubai Harbour Meraas project will serve 1.2 million passengers annually when completed Meraas has announced that Dubai Harbour will have a second cruise terminal in addition to the one already announced in January 2017, making it the first cruise destination to build two terminals simultaneously.

When completed, they will accommodate 1.2 million passengers annually.

The second terminal intends to build on Dubai’s reputation as a leading tourism destination while also capitalising on the strong growth of the cruise industry globally, the developer said in a statement.

Industry data shows that more than 40 million people will travel by cruise annually by

2030, an increase of 40% from the 24 million recorded in 2017.

“Dubai Harbour connects some of Dubai’s most vibrant neighbourhoods,” said HE Abdulla Al Habbai, Meraas group chairman.

“The project also reaffirms our commitment to expanding on Dubai’s rich maritime heritage and tourism profile, while supporting the continued diversification of the national economy.”

“By creating a world-class destination that appeals to people around the globe, Dubai Harbour represents an opportunity to achieve economies of scale and drive growth in the maritime tourism sector. It will also help maintain Dubai’s status among the

world’s top tourism destinations.”

Each terminal will be approximately 14,000sqm in size with one 900m single apron, the developer said. In addition to serving the cruise ship industry, Dubai Harbour will also have the largest marina in the MENA region. Once complete, it will have 1,100 berths and be capable of accommodating some of the world’s biggest private yachts.

Dubai Harbour was officially unveiled by His Highness Sheikh Mohammed bin Rashid Al Maktoum in January 2017, and will be developed by Meraas.

The master plan for the waterfront destination extends over 20 million square feet and

includes an 875,000sqft shopping mall, an events arena, luxury residences, restaurants, cafés, hotels and a yacht club. It will also feature the Dubai Lighthouse, which stretches 135m into the sky with an observation deck offering panoramic views.

Dubai Harbour will also integrate Skydive Dubai, Dubai International Marine Club (DIMC) and Logo Island into a single integrated community. Ground has been broken, and 130,000sqm of land has been reclaimed.

The contractor for the cruise terminal will be appointed once the land for the terminal is ready, with Dubai Harbour being constructed in phases.

A single integrated community Dubai Harbour will integrate Skydive Dubai, Dubai International Marine Club and Logo Island into a single community, Meraas said.

14,000

Size of each cruise terminal at Dubai Harbour, in sqm October 2017 11

The Big Picture

1. GFH Capital sells Us property For $43m GFH Capital, a subsidiary of Bahrain-based GFH Financial Group, said it has completed the sale of a property in its US residential portfolio in Atlanta for $43.45 million. In a statement, the company said the portfolio had been acquired three years ago, and added that the asset is listed as a class A property. It comprises 19 three-storey luxury residential buildings with 306 units.

The sale was completed through an open market bidding process, with the portfolio attracting strong investor interest and demand. The asset’s location near Atlanta-Hartsfield International Airport and proximity to a range of community, shopping and entertainment facilities supported the sale, GFH said in a statement.

“GFH have kept a close eye on the market since our acquisition in 2014 in order to ensure capitalising on the most opportune time to exit,” said senior executive officer Luay Ahmadi.

“Over the last three years, GFH has proven its ability to effectively source unique transactions and exit transactions, delivering promised returns to our investors.”

12 October 2017

95%

1

95% of all contractors surveyed this summer expect revenues to grow or remain stable over the next 12 months 2

2. Dp WorlD breaks GroUnD on $1bn projeCt in eCUaDor DP World has broken ground on a greenfield multi-purpose port project in Posorja, Ecuador.

The Dubai-based global marine terminal operator said the port facility will boast a 750,000 TEU capacity and is likely to open for business in July 2019.

The announcement follows a 50-year concession that

DP World won in 2016 from the government of Ecuador to build the facility, in order to boost the country’s economic growth and better connect it with foreign markets.

Around $500m will be invested into phase one of the project, covering the purchase of land, dredging a new access channel, a 20km access road and a 400m berth designed to handle cargo.

The project is expected to add thousands of new jobs.

“The port has been designed to serve the growing needs of global markets, something we’ve been able to witness first-hand with our 78 terminals around the world, and will dramatically improve the global competitiveness of Ecuadorian exporters,” said Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World.

The Big Picture

31

China has ordered 31 people to be placed under “coercive measures” for a construction site collapse last year that killed 73 people

3 4

140MW India’s Adani Group has received the green light to build a 140MW solar farm in southern Australia

3. arab ContraCtors proGresses in eGypt parliament projeCt Egyptian construction firm Arab Contractors said it has poured the concrete foundation of the new parliament headquarters in the country’s anticipated administrative capital city. Covering a total area of 148,000sqm, the new headquarters is in the ministerial district, which

will also include ministries, government agencies and the president’s office.

The new headquarters consists of an eight-storey main building with two domes spanning more than 18,000sqm, chairman Mohsen Salah said in a report by Amwal Alghad.

“Our volume of businesses in the new administrative capital city is worth more than $567.1 million, as it involves

utilities works, 78 residential buildings, roads and some major facilities in the ministerial district,” he explained.

In 2015, Egypt announced plans to construct a new metropolis 45km east of Cairo.

The project is one of several announced by President Abdel Fattah al-Sisi to help develop the economy and create jobs for a growing population of 91 million people.

4. Cb&i-saipem ConsortiUm Wins epC ContraCt on oman reFinery projeCt A consortium consisting of CB&I and Saipem has been awarded an engineering, procurement and construction (EPC) contract for the Duqm refinery project in Oman.

The EPC Package 3 contract was awarded by the DRPIC, a joint venture between Oman Oil Company and Kuwait Petroleum International.

The consortium’s scope of work includes the EPC of a product export terminal at Duqm Port, a crude tank farm at Ras Markaz and an 80km crude oil pipeline. The company will perform all the EPC works for storage tanks at the export terminal and crude tank farm, while Saipem – the leader of Package 3 – will perform the balance of the works.

“This award creates more work opportunities for Omanis, which is one of the goals of the Duqm project. We have decades of experience in Oman, including the supply of tanks and pressure spheres for Oman Oil Company at their refineries in Sohar and Muscat,” said Luke V. Scorsone, executive VP of CB&I’s Fabrication Services.

CB&I said its portion of the contract is valued at approximately $140m.

October 2017 13

Market Report

DUBAI OFFICE REVIEW Q2 2017

Knight Frank report finds that Dubai’s office rents dropped in the year to the second quarter of 2017, as a fragmented market performance continued A pick-up in activity The latter half of the year is expected to see an increase in commercial market activity, the Knight Frank Report said.

Dubai’s GDP increased by 2.9% in 2016, down from 4.1% in 2015. Lower oil prices, higher interest rates and a strong US dollar have underpinned the slowdown in GDP growth. As the economy adjusts to the new norm in oil prices and diversifies in line with Dubai Plan 2021, the slowdown in GDP growth is expected to bottom out in 2017 and begin to strengthen in 2018.

Employment is forecast

to grow 1.63% in both 2017 and 2018. Business sentiment remains upbeat with the Purchasing Managers Index remaining positive at 55.

Market Review

Dubai’s commercial occupier market saw lacklustre performance in 2016 as a result of slower economic growth.

The strong US dollar since May 2014 has proven to be a strong headwind for Dubai’s economy.

However, despite interest rate hikes by the Federal Reserve, the US dollar depreciated rapidly in the first seven months of 2017 (6%), registering the longest period of deprecation since 2010.

Given Dubai’s reliance on foreign consumer spending, this is likely to provide a boost to economic growth and may encourage firms to resume capital expenditure. This in turn may lead to increased employment, which would

translate into additional demand for commercial offices. Market activity has remained relatively subdued in the first half of the year. On average office rents across Dubai fell 4.5% in the year to Q2 2017, with the performance of prime and secondary markets continuing to diverge over the same period.

Prime rental performance remained relatively stable, with average rents shifting 1.3% higher in the three months to

“The commercial market activity is expected to pick up in the latter half of the year, with rental trends likely to continue their currently trajectory, given the embedded supply dynamics in place”

14 October 2017

Source: Knight Frank Research

Macroeconomic Overview

Market Report

“Prime rental performance remained relatively stable, with average rents shifting 1.3% higher in the three months to June 2017.

Demand in these locations remains high due to limited new supply” Dubai office rents (AED/sqft pa) Prime

Composite

Grade A

Citywide

300 250 200 150 100

Q1 2017

Q2 2017

Q3 2016

Q4 2016

Q1 2016

Q2 2016

Q3 2015

Q4 2015

Q1 2015

Q2 2015

Q3 2014

Q4 2014

Q1 2014

Q2 2014

Q3 2013

Q4 2013

Q1 2013

Q2 2013

Q3 2012

Q4 2012

Q1 2012

Q2 2012

Q4 2011

Q2 2011

50 Q3 2011

June 2017. Demand in these locations remains high due to limited new supply, freezone status, international regulatory standards and the quality of local infrastructure.

Vacancies in DIFC remain low, with DIFC phase I registering vacancy at 1% as of Q2 2017.

However, even within these prime locations, for periphery offerings (DIFC Phase II) absorption rates remain low, although as the master plan is finalised we expect this absorption rate to steadily increase as the core expands.

This trend may be further heightened with the move towards mixed-use developments which encourage urban living by linking business, cultural and lifestyle environments.

Grade A office market rents, which includes Downtown Burj Dubai, Sheikh Zayed Road and the Trade Centre District, fell 4.4% year-on-year and 2% over the last three months.

Increased levels of supply and lower levels of demand have contributed to the fall in rental values, either via concessions or headline rates.

In the city-wide market, the spectrum in quality of product has led to varying rates of both market performance and occupancy levels.

On average rents fell 7.5% in the citywide market in the year to June 2017 and 0.7% over the last three months.

Key locations where demand from occupiers is centred, such as Internet City, Media City and Knowledge Park, have

maintained low vacancy rates ranging 2-3% and therefore rents have remained relatively stable.

In Business Bay, where supply continues to rise, there is a downward trend in rental rates which has led to increased demand for space in strata-titled buildings.

For the single ownership buildings in Business Bay, we are witnessing increasing demand which has helped underpin price stability over the last year.

Outlook

Dubai office stock, in square metres (millions) 9.5

9.0

8.5

8.0

7.5

2012

2013

2014

2015

2016

2017

AED’s performance against key currencies 125 120 115

6% depreciation

110 105 100 95 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Commercial market activity is expected to pick up in the latter half of the year, with rental trends likely to continue their currently trajectory, given the embedded supply dynamics in place.

High occupancy in prime markets will continue to support rents, which supports our view that prime rents will rise further this year.

The delivery of additional Grade A stock will off-set any potential upside in rental values.

In the citywide sector, we expect pockets of out-performance to be sustained due to limited availability of good quality stock in preferred locations, but average rental value is expected to continue to fall marginally.

Lastly, while Dubai’s economy is not as dramatically impacted by swings in oil prices, it is still positive news for the region that prices have recently settled at around $50 per barrel, up from the lows of $27 per barrel that the industry saw back in January 2016.

October 2017 15

Analysis

A new wAy to resolution Big Project ME speaks to Mark Beer, chief executive of the DIFC Dispute Resolution Authority, to understand how the new DIFC Technology and Construction Division will change how construction disputes are handled in the UAE and beyond

Last month, the Dubai International Financial Courts (DIFC) announced that the region’s technology and construction companies can now choose to have their most complex commercial disputes resolved by a newly created special division.

The Technology and Construction Division (TCD) will draw on specialist judges and a new set of industry-specific rules to fasttrack dispute resolution and provide greater certainty to businesses in court, a DIFC statement said.

The division will only hear technically complex cases, it added.

Examples in the construction sector would include complicated engineering disputes or claims arising out of fires. Technologyrelated cases would include liability for cybercrime incidents, disputes over the ownership and 16 October 2017

new ways to resolve disputes The Technology and Construction Division will draw on specialist judges and a new set of industry-specific rules to fast-track dispute resolutions.

Analysis

use of data, and issues relating to emerging technologies such as AI or connected cars.

Parties located anywhere in the world are able to opt in to DIFC jurisdiction, if both parties agree in writing. However, requests to have claims heard by the TCD have to be made as part of the initial filing, with the Court’s decision based on the written evidence provided.

“The TCD has been designed around the particular characteristics of highly complex technology and construction disputes, which can be resolved much more speedily and efficiently with the oversight of specialist judicial expertise,” says Michael Hwang, chief justice, DIFC. “This new division is another foundation stone in our work to build the courts of the future, and an important new service for businesses operating in two key sectors of the UAE economy.”

Mark Beer, chief executive at the DIFC Dispute Resolution Authority, explains that the TCD came about after he conducted an analysis of how other countries manage their construction disputes and realised there was a need to do things differently.

“I noticed these big hoardings going up around DIFC – the development of ICD Brookfield and the build-out of the Gate Avenue project. These were major pieces of construction going on in the DIFC, and it made me start thinking, as a service, as a court, whether we are equipped to handle complex construction disputes,” he tells Big Project ME during an interview at his DIFC offices.

“The answer is, of course we are. We have judges capable of doing it. But why is it that other countries have chosen to apply slightly different rules to construction disputes? We looked into that and realised that within construction disputes there is a need to do things differently. The

“Why is it that other countries have chosen to apply slightly different rules to construction disputes? We looked into that and realised that within construction disputes there is a need to do things differently. The disputes are of a different nature” disputes are of a different nature.

“When we started doing more and understanding the extent of the Expo 2020 development, it made us realise that the need for a specialist dispute resolution service that can make sure that projects are delivered on time is another need for the community,” he adds.

In order to achieve this, the TCD was established following a month-long consultation with the region’s legal community.

October 2017 17

Analysis

Their feedback and suggestions are reflected in the division’s rules, which are scheduled to go live on October 1.

“We worked internally with lawyers around the world to pull together a concept of a technology and construction court,” Beer says, revealing that the TCD is modelled on the Technology and Construction Court in London.

Having put together a body of rules that worked for Dubai and the types of projects being built in the emirate, Beer and his team at the DIFC Dispute Resolution Authority then went out to the local legal community for further consultation and to receive feedback. “[Following that], we then went with our court users committee, our rules subcommittee, our general counsel forum and the legal community, and we helped to refine, develop and produce a set of rules and framework for the division that will deal with complex technical and construction disputes.”

With construction a crucial sector of the local and regional economies, the establishment of the TCD is an important addition to the UAE’s dispute resolution infrastructure. A recent BMI study found that the total value of building and construction contracts in the MENA region will touch $300 billion by 2019.

“The opportunity to help projects around the region is really significant,” says Beer.

“What the world has seen with construction disputes is that it’s really important to understand the nature of the dispute as soon as you can, and to get everybody focused as soon as you can.”

Despite the DIFC being one of the most efficient commercial courts, he asserts that construction disputes need a court that is even 18 October 2017

An opportunity to help the construction industry Mark Beer says the establishment of the TCD is a significant addition to the UAE’s dispute resolution infrastructure.

“The Technology and Construction Division will give a solid framework.

What I think you’ll then start to see in the future is the adjuncts that you see in other markets, like the Dispute Avoidance Boards (DAB) and the Dispute Resolution Boards (DRB)”

more front-ended, which is how the TCD will operate.

“As soon as the claim is filed, the parties are expected to come to court to identify what the issue is and see if there’s a way to solving it that doesn’t delay the project, and see if it can be worked out in such a way that the project can continue while the dispute is being resolved.”

While the TCD will be headed by Justice Sir Richard Field, a veteran of 20 years handling complex disputes in London courts, Mark Beer says there is tremendous scope to expand the reach and efficiency of the division.

“I think this is a big opportunity, and it’s something that hasn’t caught on yet, which is the dispute resolution board, or what’s called TAP over in the UK. There the concept is the parties agree at the very beginning that if there’s a problem, then they will go to experts that are either pre-appointed or appointed at the time. These experts then tell the parties what the answer is at that point, and they agree to

wait to fight it out until after the project is completed. For super time-sensitive projects, that tends to work out well,” he explains.

“As the market gets more sophisticated, you put the building blocks in to support the process. At the moment, we’ve got the Technology and Construction Division, which will give a solid framework for efficiently resolving the dispute. What I think you’ll then start to see in the future is the adjuncts that you see in other markets, like the Dispute Avoidance Board (DAB) and the Dispute Resolution Board (DRB).

I think they’ll start to come in.”

A major concern of a DAB or DRB is that when experts are appointed early on, employers on construction projects will then have to bear the costs of retaining experts that they might never need. For a mega project like Expo 2020 this can lead to complications, as various situations can arise which may be outside the expertise of even the appointed panel of experts, meaning more have to be hired. “[It’s because of this] that the concept hasn’t caught on here as much as people had expected.

But now, with flexible DABs – which is when you agree to go to a Dispute Advisory Panel which is yet to be appointed – you have another body appoint the panel, based on the dispute. You start to build out the infrastructure for solving complex technology and construction disputes.

“But the starting point has to be the specialist technology and construction court, with a specialist judge running it.

Sir Richard Field has sat on TCD courts in London and is a specialist judge who knows about and has been involved in some of the most complex disputes involving technology and arbitration for construction disputes,” Beer concludes.

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In Profile

“this is a company that has a history and a future, and it can be turned around, while also ensuring that whatever went wrong will never happen again�

Gavin Davids sits down for an exclusive interview with Ziad Makhzoumi, the strategic consultant tasked with guiding Drake and Scull International through a troubled transition and back to the top

20 October 2017

In Profile

October 2017 21

In Profile

m

idway through August this year, Drake and Scull International released its financial results for the second quarter of 2017, which showed that it had reduced its net losses by 12% to $54.1 million, compared to the $61.5 million posted during the same period in 2016. Meanwhile, revenues for the quarter stood at $179.6 million compared to the $219.4 million recorded for the same period last year, a statement released by the company said.

In addition, the contractor added that its capital restructuring programme was “steaming ahead on schedule, and is set to be concluded by the end of Q3 2017”, with Feras Kalthoum, acting CFO at DSI, pointing out that the results of the quarter should be viewed in context of the company’s turnaround plan and the capital restructuring programme.

“Our efforts to complete the capital and debt restructuring of the group, coupled with continued balancing of our portfolio to mitigate any contingent exposure that may impact our future profitability, will soon reflect positively on our financial performance and top-line targets,” he explains.

“The year 2017 will continue to be a transitional year for DSI as we proceed with the execution of our turnaround plan. Our efforts to streamline our operations and restore our financial position will enable us to set a solid foundation for sustainable growth,” adds Mohammed Atatreh, the new managing director of DSI. 22 October 2017

extensive experience Ziad Makhzoumi is the CEO of Prime Strategy Consulting Group, and has previously served as Arabtec’s CFO. His role is to be a key advisor in the formulation of DSI’s future strategy.

One surprising consequence of this transition and mitigation focus was the removal of Wael Allan as CEO of DSI. Having spent less than a year in the post, the announcement of his departure came in the midst of a reshuffle of the board, with several board members – including executive vice chairman Khaldoun Al Tabari – resigning from their posts.

These developments came in the wake of Tabarak Investment coming on board to inject new capital into the business, with the firm acquiring a majority stake in DSI while also extending an interest-free loan of up to $27.2 million.

As a result, Abdulla Atatreh, the vice chairman and managing director of Tabarak Investment, was appointed as chairman of the DSI board, while Ahmed Saeed Al Hamiri and Abdulla Fareed Algurg were elected as vice chairman and board member respectively. At

“We will not be adventurous and go into markets and take on projects just for the sake of doing so. We are going to be professionally cautious and commercially astute as to which markets and sectors we want to be in”

the executive level, Mohammed Atatreh was appointed as DSI’s new managing director, along with a host of other appointments.

While there has been a sea change in management at board and executive level, the primary objectives of the company have not changed, with the emphasis very much on the restructuring of the company and the recovery of its financial position.

To achieve those aims, the board has brought in Ziad Makhzoumi, CEO of Prime Strategy Consulting Group, to serve as a key advisor in the formulation of the company’s strategy going forward, and the restructuring process. As part of his role, Makhzoumi will work with the entire management team of DSI to assess, evaluate and drive the company forward.

“I’ll work with the whole team to assess what is there, what is missing and what is needed to take it forward,” he tells Big Project ME in an exclusive interview at DSI’s offices in Dubai Production City. “Restructuring of this scale, of a company the size of DSI, will be a transition process. For each phase, you need different skill sets. We are putting together a team of internal and external resources that are highly qualified, passionate, open-minded and cooperative.”

Acknowledging that the present circumstances are difficult for the company, Makhzoumi points out that with Tabarak Investment as a majority shareholder, he remains confident that the overall vision and strategy of the board will show results in quick time.

“We are a public company, and hence we have a higher level of disclosure as we’re accountable to our shareholders. We are in the process of ensuring we get our balance sheet, compliance and governance right. That

In Profile

minimising risk is a priority Makhzoumi says that minimising operational risk on the business side is crucial in obtaining the right results for DSI.

means having the right strategy, financing, marketing and project selection in place. The operational risk on the business side must be minimised, and there are numerous aspects that we need to consider in order to obtain the correct result,” he stresses.

“The strategy going forward is to focus on what makes sense in the short term, while also preparing for what makes sense in the medium and long term, such as defining what we need in terms of resources – whether it’s people, strategy, skills, funding, etc.

“We went into this company knowing that it faced substantial financial issues, but we also believe that this is a company that has a lot of value and potential.

We believe that we’re the right team together, both internally and externally. We have a lot of talent inside the company, and we have a lot of talent outside as well. I’m one of the people leading the change, advising how to do it in an integrated manner. We believe that, probably by next year, we’ll be able to turn the company around,” Makhzoumi asserts.

To enact that change and turn the company around, Makhzoumi will be able to draw on his considerable experience and knowledge.

This isn’t the first time he has

had to step into a challenging situation and take control.

In 2008, he was asked to go in and restructure Arabtec. The contracting giant was in a bad state back then as it reeled from the impact of the global market collapse. With banks going bellyup, construction in dire straits, developers disappearing and a stalled market, Makhzoumi faced an incredible challenge, one that he thinks was more complicated and severe than the one facing him at DSI.

“These situations are like being at war. You have to start your own war room, and you’re at war internally and externally because people are panicking, resources aren’t available and there is zero certainty, so you don’t know what will happen next,” he says.

“We sat down in 2008 with the then board at Arabtec and said, ‘We’re at war. Things are going to get substantially worse, so we need to define what each of us can do very quickly.’ The aim was to define the damage,

“Restructuring of this scale, of a company the size of DSI, will be a transition process. For each phase, you need different skill sets. We are putting together a team of internal and external resources that are highly qualified, passionate, open-minded and cooperative”

a company of value Despite DSI’s substantial financial issues, Makhzoumi says that it remains a company that has a lot of value and potential.

October 2017 23

In Profile

contain it, repair it and move forwards,” he recollects.

“We had to start by defining what resources were missing from financial, managerial, systems and processes. When things are very good, you can probably get away with not having everything calibrated completely. When things are bad, you have to be more careful as to how you integrate things and ensure you don’t miss anything.

“In 2008, from a financial point of view, the emphasis was on the balance sheet and not

on the P&L. We knew that the market was bad, that the margins were eroding and that the banks were not lending. But in the case of DSI, it was an MEP company that ventured into other areas it probably should not have entered.

“However, as with any business of this magnitude, the focus needs to be on the balance sheet rather than the P&L. We know the margins are not there. We need to make the company fit and healthy once again. The first step in treating someone that is not well is to make them healthier,

and only then can you make them fit,” he asserts bullishly.

To that end, Makhzoumi says his first priority is to get everyone at DSI pulling together in the right direction, formulating a clear and focused strategy built around the company’s strengths and capabilities.

“The whole company, in my view, did not have a clear strategy.

It was not managing its business very well, and that was reflected in the financial results. This is public knowledge. There are lots of theories as to why it happened,

but to me this is a company that has a history and a future, and it can be turned around, while also ensuring that whatever went wrong will never happen again.

“There is a construction arm and there is an MEP arm [of DSI].

If you look at the future of MEP, I think that specialist contractors are now coming more into play.

You are either an expert or a general contractor. If you look at big companies such as Bechtel and Parsons, they outsource and manage. It is the same with Apple – it’s design and integration.

“The strategy going forward is to focus on what makes sense in the short term, while also preparing for what makes sense in the medium and long term, such as defining what we need in terms of resources – whether it’s people, strategy, skills, funding, etc” focus on the balance sheet Given the magnitude of DSI’s business, Makhzoumi asserts that the focus must be on the balance sheet rather than the P&L.

24 October 2017

In Profile

potential for integration Given DSI’s presence in a number of areas, Makhzoumi says there are many commonalities with the potential for integration for its services.

“Therefore, the role of the specialist contractor is becoming more and more important. There aren’t many good MEP players in the market. The question is: How do you take the business model we have developed into new areas? We are in residential, civil and social infrastructure, and oil & gas. How can you go into other areas where you can build on your expertise?

“In the process of looking at everything we do well, we need to focus on this aspect and do it better and more profitably as a specialist company.”

Since DSI already has a presence in many areas, there are many commonalities with the potential for integration, says Makhzoumi. Looking at the geographical areas DSI operates in, he pinpoints Saudi

Arabia as a market with a lot of potential, both in the MEP sector and in general contracting.

With the Kingdom undergoing considerable social and economic restructuring, he predicts that decision-makers will become more open-minded and appreciative of quality work, rather than just the bottom line.

“I don’t think we can compete on the scale of the major local contractors like Bin Laden or CCC, but we will definitely bid for what makes sense. We will take a commercial, long-term view. In the short term, the focus remains on the balance sheet,” he says.

Furthermore, Makhzoumi points out that the UAE offers tremendous opportunities for contractors willing to explore their options, with Dubai itself offering major

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In Profile

looking at 2018 DSI’s leadership and management believe that the firm will see better results in the coming year, Makhzoumi says.

opportunities thanks to mega events such as the Expo 2020.

“Just go around any street in Dubai, Abu Dhabi or Sharjah, there’s construction everywhere.

Somebody must go in and fit those projects out. You can’t just get a small contractor to do it, you need somebody who is qualified, certified and capable on these projects.

“And then we have projects that are specifically pressed for time, like for Expo 2020. If you look at all the projects in Dubai South, in the 2020 area, they’re all projects that somebody has to do and the advantage is that they’re restricted in terms of time. We should be one of the contractors [on those projects], and we’re getting work from that,” he points out.

“Having said that, we see more immediate work coming up in the UAE. However, we will not be adventurous and go into markets and take on projects just for the sake of doing so. We are going to be professionally cautious and commercially astute as to which markets and sectors we want to be in.”

As the interview wraps up, Makhzoumi returns to the challenge ahead, reasserting that the focus has to be on positioning the company for 26 October 2017

future success, while also restructuring its balance sheet.

“Those run hand in hand,” he insists. “It is not an option to first do one and then the other, because there is insufficient time. I hope, and we believe, that we will see better results next year. Again, it’s a function of a lot of things happening in the ongoing process of getting the organisation healthy again.”

“At the end of the day it is a matter of service, and it’s about service both internally

and externally. If you look at many companies, there is a lack of communication and commonality, and a lack of buy-in. This is not a good thing for a company with projects in many disciplines.

“If you look at any operation, there needs to be clarity and accountability. This is more so when you are a public company, governed by strict rules and regulations. We are accountable to every shareholder,” he states emphatically.

accountability to shareholders As a public company governed by strict rules and regulations, DSI is accountable to every shareholder, Makhzoumi avows.

If you look at all the projects in Dubai South, in the 2020 area, they’re all projects that somebody has to do and the advantage is that they’re restricted in terms of time.

We should be one of the contractors [on those projects], and we’re getting work from that”

Site Visit

28 October 2017

Site Visit

Journey to the Bay

With the first floating homes now installed at Marasi Business Bay, Big Project ME’s Gavin Davids talks to the team behind the scenes to find out how this landmark project became a reality

October 2017 29

Site Visit

e

arly in September 2017, sharpeyed residents and commuters living and working along the Dubai Water Canal might have been surprised by the sight of a fully-fledged double-storey home floating past them as they rushed into their offices or sipped on their morning coffee.

Rather than taking the day off to have their eyes tested, these onlookers would have known that the strange sight was the final stage of a remarkable journey that started in Finland and ended at Marasi Business Bay. arrival at Port rashid After a month-long journey from Finland, the floating homes arrive at Port Rashid in Dubai.

30 October 2017

Developed as a master development along the Dubai Water Canal, Marasi Business Bay is a $272.2m project by Dubai Properties and its parent company, Dubai Holding.

Launched in May 2016, the project spans 12km of waterfront, and the aim is to turn it into a new landmark for Dubai.

As such, several distinctive aspects have been planned for the project, including floating restaurants and high-end retail and leisure facilities. Chief among these attractions are the homes on water, or floating homes, several of which have now been berthed along the canal.

Designed as luxury destinations, the 10 floating homes currently installed are part of the first phase of the development of Marasi Business Bay. Once complete, the project

“While it’s easy to do some renderings of ideas and throw them at engineers and tell them to solve it, the issue we had here is that we’re building a ship – or half a ship – under the standards of Europe”

will eventually have space for up to 200 water homes spread along different parts of the canal, a marina with 1,250 berths, onshore boutiques and a range of leisure and development facilities, in addition to extensive multi-level mechanical parking.

Work on phase one began in Q4 2016, with completion scheduled for Q4 2017.

Meanwhile, overall completion of the project is scheduled for 2023, the developer says, adding that the turnkey project will soon see the floating homes surrounded by floating restaurants.

“Dubai Properties has delivered phase one – it is a key component of the bigger vision that we have for one of our key destinations, Business Bay,” says a spokesman from Dubai Properties, who declined to be named for the interview.

Site Visit

Final works take place Once the floating homes arrive at port, the project team undertake final works on the structures, in preparation for the move to Marasi Business Bay.

“With the water homes, we have anchored the Marasi brand as part of a mixed-use development that will revive the district at the heart of the city and activate one of the latest landmarks – the Dubai Water Canal, which is now home to the region’s first floating real estate. This development marks Dubai Properties’ next milestone achievement in transforming the bustling commercial hub of Business Bay into a truly urban lifestyle destination. This is what we’re trying to do,” he asserts.

The components of phase one will include the Marina, which will eventually comprise 800 berths adjacent to the water homes, which come with pools, the park and the pier, all of which will stretch along the canal, making it the first purpose-built yachting club at the heart of the city.

“As part of phase one, we will see 10 water homes, ranging from two, three and four bedrooms, a floating yacht club and two floating restaurants. In addition, there are onshore facilities, including the building we’re sitting in today, that will serve as a reception centre for the water homes and restaurants.

A similar one will be there on the opposite side to serve as the Marina’s operations centre.

These are the main components of phase one of the development.

“Next, we will introduce other hubs scattered along Business Bay, all linked to the main spine – which is Dubai Canal. This is the overall idea of the project.”

The floating homes, restaurants and yacht club will be built exclusively by Admares at its purpose-built facilities in Rauma, Finland. From there the homes make a month-long journey in the holds or on the decks of cargo ships, travelling

to Port Rashid in Dubai for some final works and installations, before making their way up the canal and to their berths.

“What we’ve done here is a first for Dubai, and the quality and standard that these villas have been delivered to is also a world first. Floating real estate as a concept is nothing new – you have a lot of companies and architects coming up with all sorts of very fancy concepts, but the issue has been that there hasn’t really been a company

that can really deliver on those ideas and concepts,” says Mikko Lahtonen, executive vice president, Middle East and Africa for Admares.

A Finnish company with a strong heritage in cruise ship building, Admares has established itself in the development of alternative real estate through the use of construction methods that combine marine, land and modular construction techniques.

“We have the engineering and technical know-how, and the facilities to build quality products that can be certified by the classification societies that do ships as well,” continues Lahtonen. “You need to be able to give the market a product that you know is solid and verified by a third party to be on the water. It’s very different to be on the water, as you have a lot more risk and things to consider as compared to when you build traditionally on land.”

As these floating homes are built entirely differently to traditional land-based

First of many WIth 10 homes currently planned for the first phase of the project, there is scope for around 200 homes to be installed along the Dubai Water Canal.

October 2017 31

Site Visit

construction, the certification process was a completely different challenge for the project team. Each villa, starting from the design, has to be certified by DNV GL, the largest classification society for all ships that are built.

This means that the villas are all certified from scratch – every piece of steel used for the hull has been x-rayed, every welding seam has been inspected. Every single safety aspect is scrutinised just as it would be for a ship or boat, Lahtonen explains.

“For their purpose – in that they sit in very calm canal waters – I can say that these villas are very much overcertified. There’s no class for floating real estate, but we’re working with DNV GL for that.”

Dr Ralf Heron, principal at Homeport, a UAE project management and advisory firm that specialises in marinas and associated facilities, says the biggest challenge encountered with the floating homes and the development of the surrounding marina facilities

a new type of challenge One of the major challenges for the installation of the homes at Marasi Business Bay was the distinctive curved shape of the marina, which forced Seaflex to develop new methods and systems to anchor the homes.

was the lack of previous regulations and rules to follow.

“While it’s easy to do some renderings and drawings of ideas and throw them at engineers and tell them to solve it, the issue we had here is that we’re building a ship – or half a ship – under the standards of Europe. They have all these regulations and authorities over there, and it was extremely challenging for Admares to fulfil all these very specific requests and certifications.

“So they build half a ship, then we come and say that we want to put a villa on top of it.

Which means that we then have to go on to the building codes of Dubai. So now we have a ship code, a building code, and then everything underneath the homes is under the Marina code! Now you try and go to an authority and explain what we’re trying to do? That’s where the real challenge is,” he laughs, speaking to Big Project ME at the floating homes site.

Gently up the stream The logistics of manoeuvring the homes up the canal were carefully calculated and planned between the project team and Dubai authorities.

32 October 2017

“We were creating something completely new.

We needed to create plots on the water, and people needed to be able to purchase them.

This obviously hasn’t been done before in Dubai, and it means that they become a permanent structure, so you can’t just moor them like a boat.

If you want to sell it and issue a title deed for it, then it needs to be a permanent structure”

Site Visit

Mikko Lahtonen is quick to agree, pointing out that while the design and construction aspect of the project was challenging, it wasn’t the biggest issue the team faced.

“We were creating something completely new. We needed to create plots on the water, and people needed to be able to purchase them. This obviously hasn’t been done before in Dubai, and it means that they become a permanent structure, so you can’t just moor them like a boat.

If you want to sell it and issue a title deed for it, then it needs to be a permanent structure.

This is something where we’re having workshops with the authorities on how to do that.”

As daunting as this may seem, Heron is effusive in his praise for Dubai’s authorities, who provided tremendous assistance and cooperation.

“We’ve received help from day one. They’ve said, ‘Yes, we have no regulations for this, but we see that this is the future, so we have

ScheDule of arrival 10 august: Arrival of villas at Port Rashid 13 august – 4 September: Work done on villas while sitting at Port Rashid (some villas done earlier, but 4 Sep is the last day for the last villa, number 8) 31 august – 1 September: Towing and installation of Villas 2 & 7 1-2 September: Towing and installation of Villas 1 & 9 2-3 September: Towing and installation of Villas 3 & 4 3-4 September: Towing and installation of Villas 5 & 6 4-6 September: Towing and installation of Villas 8

to deal with it.’ We’ve sat for days and weeks with the authorities – there’s the RTA regulations, the Dubai Municipality regulations, the coastal regulations – we had to sit with all these authorities and create something that wasn’t there.

“But because Dubai is Dubai, we managed to do it. I’m glad I didn’t do this project in Europe, because it would have taken 25 years to do it! In Dubai, we sat down, solved the issues and got things done. That is amazing and exciting – if you’re a developer or a master-planner, that’s an exciting journey to take,” Heron continues.

“I cannot stress this enough.

We started with a blank piece of paper, with no ideas, in October 2015. This is the brief we had, what can we do with it? And here we are today! That’s Dubai, that’s Dubai Properties – they helped us all the way to go for this.

Without the client, the journey would have been impossible. I can assure you that the client

had to stretch themselves to deliver this as promised on time.

It was announced a year ago, and they made a big commitment.”

The Dubai Properties spokesman is quick to return the compliment, praising the way the team worked together and highlighting how everyone involved went above and beyond to facilitate the delivery and satisfy the commitment made – that before the end of 2017, the project would be ready.

“There were a lot of issues to jump over. One of them was transportation,” the spokesman says. “How to plan out the moving of these structures, taking into consideration all the different aspects of the journey – from harsh weather and sea conditions, through to several options enroute to Marasi, including the numerous canal bridges and new regulations such as the height and speed limitations.”

“There were a bunch of challenges for everybody.

We had to secure a specialist

Working in tandem All the members of the project team praised Dubai’s authorities for the cooperation and assistance they have extended throughout the project.

October 2017 33

Site Visit

“Without the client, the journey would have been impossible. I can assure you that the client had to stretch themselves to deliver this as promised on time. It was announced a year ago, and they made a big commitment” for every single activity.

We needed a specialist in transportation, a specialist in foundation, a specialist for the marina. Everyone has played their role professionally and to the highest level.”

One of those specialists hired was Lars Brandt, CEO of Seaflex, the company appointed to find a way to secure the floating homes in their positions. Over the last 40 years, it has developed mooring systems that replace traditional methods like piles or chains.

“Our input is obviously based

on our experience on how to do these things. The calculations and all that. Adaptation to this place was important. Every site is unique – we looked at the bottom structure of the canal and, as you know, this was all dredged.

Normally, in a traditional, natural cove, it’s up and down, but here was nice and flat. So that obviously made things much easier, the positioning of the anchors and all. But there’s a lot of detail that goes into the calculation and coordination with Admares as well, for the

houses, the walkways and for the effects of Mother Nature!”

That meant Seaflex had to look into specific data, such as what kind of wind forces are around the site environment.

While the floating homes aren’t out in the open ocean with big waves, there’s still wind speed to deal with. Furthermore, the Seaflex team needed to be on the same page with everyone else to calculate the forces and how those forces are transferred into the mooring systems, Brandt says.

“Then there’s obviously the

different codes that are always hanging around, that people are trying to put together. This is all new territory, especially in an area like this that is definitely new to floating houses. Obviously, in places like America and Holland, they have adapted their technologies or calculation methods to that. I think that it’s always like this at every site, but obviously for new developments like this, you’re more focused on the challenges.”

Another engineering challenge Seaflex encountered

Dealing with natural forces The Seaflex team had to deal with a variety of issues, ranging from the wind factor around the site all the way through to the currents and flow of the water in the canal, when it came to designing and installing the mooring systems for the floating homes.

34 October 2017

Site Visit

was the linked walkway that runs around the marina. As Brandt explains, the style and shape – curving along the canal – was quite different to the traditional square designs most marinas employ.

“This gives it a flow together with the canal, and obviously we needed to come as close as possible, to do that, we had to develop new anchors. No one will ever see them, but it’s a new style of anchor that’s installed at the bottom which will allow the floating villas to be close, but still deal with the forces. We’ve used different angles on the mooring systems to adapt to that.

“Another thing with the walkway is that while traditional pontoons are straight, the ones here curve. That’s obviously also challenging for us to know

how to adapt to that curvature and transfer the loads from the winds and the houses into the dock system pontoons, and then into the mooring systems.

“We needed to see that everything worked in harmony, and many hours have gone into that!”

Lahtonen adds that one issue Admares worked on with the RTA was the area around the floating structures.

“The water area is very clearly defined. Wherever you have traffic moving back and forth, that area and that safety parameter has been set by the RTA. They’ve cleared that so that there’s enough space for the water buses to go back and forth, but also includes space for the safe manoeuvring of those.

We’re very pleased with that.”

One of the other major challenges faced by the floating homes project team was very unusual for Dubai – getting the affectation plans for the structures on the water. The Dubai Properties spokesman explains that this was a very challenging issue for the authorities, as it was a case of who would issue the permits and approvals.

“It’s not Dubai Municipality alone. It was a case of having a complete blank sheet and creating every single item from scratch, ensuring that we got the authorities on board as well as their approvals and NOCs, confirming that they have no objections to us building on water in this area and so on.

“DEWA, RTA, Dubai Municipality, DEWA Water,

DEWA Power, Dubai Coastal Department, Dubai Municipality Building Department, Dubai Municipality Planning Department, Dubai Municipality Land Department… every one of them had to stamp and say “Yes, we have no objections.”

“It was challenging, but we had a great team from Dubai Properties coordination management team. Everybody was able to clarify and explain the targets and objectives.

Without the support of these authorities, I don’t think we’d be sitting on this area now.

They were very cooperative and supportive. This project is part of the vision for Dubai 2020 – to be on multiple channels: on water, at the Expo and so on. This is part of a big puzzle for Dubai,” he concludes.

October 2017 35

Developers

“We expect to be a very serious player in this market.

If we are able to give consistent quality of product at a fair price, then we’ll have no reason to fear.

Wherever I’ve done business, I’ve been successful.

Dubai is not going to be an exception to this rule”

38 October 2017

Developers

Building from the hart

Big Project ME sits down for a quick chat with PNC Menon, the founder and chairman of Sobha Group, to discuss his plans for the Dubai-based luxury developer This September, Sobha Group, a high-end real estate developer, announced the launch of Hartland Gardenia Villas, the latest addition of luxury villas to the Sobha Hartland development, at a press conference at the development.

Styled as an elite resort-style luxury project, Sobha Hartland is a 743,224sqm freehold community in Mohammed bin Rashid Al Maktoum City. The Gardenia Villas will comprise 404sqm properties that contain four bedrooms spread across two levels, with Dubai Canal views. Both investors and end users will have the option of having outdoor space, which comprises a garden and a terrace.

Consisting of 22 units, Hartland Gardenia is scheduled to be completed by August 2019, and will have a range of amenities including two international schools, nurseries, healthcare facilities, swimming pools, gyms and sports facilities, along with parks and playgrounds.

Following the launch of the project, Big Project ME got the opportunity to speak with PNC Menon, founder and chairman of Sobha Group, about Dubai’s real estate market, his plans for the developer in the coming years, and the impact a changing economic landscape will have on developers and the real estate market.

What are your views on the current state of the Dubai real estate market, and what are your plans for Sobha Group, looking at how the market is shaping up?

The market has picked up and we’re in a positive cycle. We’ve done okay, and the second half of the year is coming along nicely.

The first two months of the second half have been good for us, and I think we’ll do well over the remaining four months.

We expect to be a very serious player in this market. If we are able to give consistent quality of product at a fair price, then we’ll have no reason to fear. Wherever I’ve done business, I’ve been successful. Dubai is not going to be an exception to this rule.

Real estate is going to be a very serious economic fundamental for the economy of Dubai. There are various fundamentals for Dubai – the government is giving a lot of emphasis to tourism, financial management, education and healthcare. Without real estate, you cannot do any of that.

When you look at the number of tourists in the country, there are about 10 million tourists yearly, and it’s progressively growing. That’s one of the very strong verticals for the country.

Every country has to plan, and this country has planned four or five fundamental requirements for it to succeed.

The rulers of Dubai have a

very clear vision, and there are only two people I’ve seen in my life, Sheikh Mohammed bin Rashid Al Maktoum and Lee Kuan Yew, who have been able to give that kind of guidance and delivery [to their people].

I’ve not seen a third leader who’s been able to give the kind of guidance and delivery. It’s not just the vision that’s important, it’s also the delivery as well.

Looking at the future, what are your plans for Sobha Group? Are diversification plans on the horizon?

We do have diversification plans in place as well. I came from the furniture industry originally, doing interiors and the like.

We’re planning on setting up a huge furniture factory; the land has already been taken and the designs are being made ready.

Hopefully, by the end of the year or at the latest by the middle of 2019, we should have a beautiful factory ready to make furniture for this part of the world.

We’re a completely backwards integrated real estate business, so I feel that we should only look into whatever technology comes with that. Within the industry, we always look for technology and innovation, and look to adopt what is most relevant. We keep researching the latest technologies when it comes to construction

October 2017 39

Developers

“Real estate is going to be a very serious economic fundamental for the economy of Dubai. There are various fundamentals for Dubai – the government is giving a lot of emphasis to tourism, financial management, education and healthcare. Without real estate, you cannot do any of that” itself and what we can offer additionally to customers.

When it comes to automation, we work with system providers – home automation is almost part of all our buildings, and we’re able to go to the next level if the customer requires it.

There is always a quest within the company to improve.

[Referring to a project in the works in Oman] The project in Oman is not going to be very different to our offerings in Dubai.

It’s going to be an integrated development. We’ll have houses, apartments, shopping and so on. But at the moment, we have no clarity on it. In principle it’s there already, but between the cup and the lip, there is a gap. I Variety in the gardenia The Gardenia Villas project consists of 22 units and a wide variety of amenities like schools, nursuries, playgrounds, healthcare and sports facilities.

40 October 2017

expect that by the end of the year, we’ll definitely know whether we’re going to be there or not.

We also have a project in Umm Al Quwain. The design is more or less ready and we should be able to launch for sale by the first or second quarter of 2018.

What other market opportunities are you eyeing for Sobha Group?

Affordable housing – individual units that are less than a million dirhams – is already there in Dubai today. Any market has the bottom of the pyramid, and we would also like to play a role in it. The question there will be about the cost. The cost will be very important, because the price should not be more than AED

1,000 per square foot. That’s the benchmark for this market.

We expect, with our capabilities and knowledge, to definitely be able to be in that segment. The only challenge is size. I don’t want to take up a small project and just do it. I’m just waiting for the right opportunity.

Finally, what are your thoughts on the introduction of VAT? Do you think it will have an impact on the real estate market and the way developers build projects?

The government also needs money, it needs to diversify its income. For me, VAT is a very good move. It’s necessary, as it gives the government a lot of money to spend. How can the

government provide facilities for the people living here, unless they have a certain monetary value?

This 5% VAT is going to ensure that. It’ll be useful for the people who live here, and I welcome it.

The initial reaction to anything new being introduced is going to be challenging. If you increase the petrol prices, for two or three days you’ll see people who don’t want to drive! But after that, you’ll see people getting used to it. A 5% tax is nothing at all. We don’t pay income tax here, so some kind of taxation is needed, especially for Dubai, for us to get the best benefits of the country. I think taxation is very critical towards maintaining the quality of the country.

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Smart Building Materials

Cost-saving technology The study of nanotechnology is leading to the creation of coatings that are scratch-resistant and capable of self-cleaning, creating huge cost savings for buildings in the region.

All the smAll things

Nick Constantine, senior surveyor at Cavendish Maxwell, looks at how advancements in building material technology are changing how we view the fundamentals of construction

42 October 2017

As many of the world’s leading technological hubs maintain focus on transforming into smart cities that use information communication technology (ICT) and the internet of things (IoT) to integrate city-wide infrastructure, the buildings we live and work in are also evolving to become smarter and more intuitive to the user’s requirements.

The spotlight is, and has been for a number of years, firmly set on how smart building systems can enhance the user experience and increase energy efficiency.

Building management systems

(BMS) are widely used in the UAE, with varying levels of integration, enabling monitoring and control of a building’s mechanical and electrical installations even from a remote location, using the cloud.

Automation systems provide even greater control than BMS systems, providing the user with control over almost all aspects of the building. These developments include being able to operate the lights on the property remotely to ensure it is illuminated prior to arrival, or the ability to run yourself a bath ahead of

Smart Building Materials

time while travelling home.

While automated building systems receive much of the media attention due to the direct connection they have with our everyday lives, considerably less attention is given to the advancements in building materials that form the very structures within which the smart systems are installed.

Advancements in building materials do tend to develop and be adopted much more slowly in comparison to technological advancements in building systems. This is for

good reason, as there is much less risk of harm being caused as a result of a building system malfunctioning or ultimately failing. The same cannot be said for defective building materials, which at the very least can present a risk of injury and at worst have life safety implications with often grave outcomes.

While this does seem to impede the application of these materials within buildings on a wider scale, it has not prevented the research and development (R&D) of advanced building materials.

Traditional material components are constantly undergoing modification to improve the performance of buildings.

Significant advancements are being made as material scientists examine materials in microscopic detail, quite literally.

Nanotechnology presents one of the greatest potentials for building material improvements in the future. A nanometre is one billionth of a metre, and by examining materials on this scale and altering, manipulating or combining them at this level, it enables enhancement of the material’s properties, while avoiding the usual accompanying undesirable characteristics.

For example, materials which are high in strength are also typically heavy; this could potentially be overcome by using nanostructured materials.

The study of nanotechnology has produced carbon nanotubes, nanocomposite coatings with increased resistance to scratching, and even superhydrophobic materials which repel liquids while collecting dirt from the surfaces, providing a self-cleaning surface. Self-cleaning glass technology could present huge operational cost savings in this region, where glass facades are

“There is a requirement for huge investment in R&D of the product itself, and the new materials also require the development of new manufacturing methods, new machinery and retraining in the industry�

highly used. The Burj Khalifa has over 25,000 glass panels, requiring specialist equipment to clean and taking approximately three months to complete a single cleaning cycle, all of which could be avoided with this technology.

While the properties of materials are being improved in this manner, materials are also being developed which react to environmental conditions without intervention, giving rise to smart building materials.

Thermochromic coatings and glazing systems have been available on the market for some time now, and these products react to heat from direct sunlight, changing colour in coatings and tinting glass according to the intensity of sunlight on their surfaces. Thermochromic glazing can provide an effective means of reducing thermal gains on internal spaces and

slow and steady Nick Constantine says that although advancements in building materials are adopted much more slowly in comparison to technological advancements in building systems, significant steps are being made.

October 2017 43

Smart Building Materials

alleviating demand for cooling.

The technology is expensive in comparison to traditional low-emissivity glazing, and in situations where the glazing does not receive enough direct light, the material may not respond as required and result in potential issues with internal glare.

Increasing longevity of building materials is one of the largest drivers for innovation in the construction industry.

Concrete, the main construction material used in GCC structures, is prone to cracking over time.

Once cracks establish in the surface of concrete, it can lead to further deterioration, accelerated by carbonation or chloride attack.

Depending upon how widespread the problem becomes, it can be incredibly difficult and expensive to remediate and may lead to structural integrity being weakened to an extent that failure of structural members is possible.

Nanopolymer aggregates incorporated within concrete mixtures have been engineered to activate when the PH of the concrete becomes too acidic,

“The study of nanotechnology has produced carbon nanotubes, nanocomposite coatings with increased resistance to scratching, and even superhydrophobic materials which repel liquids while collecting dirt from the surfaces, providing a selfcleaning surface�

increasing longevity Finding ways to increase the life-span of building materials is a major driver of innovation in the construction industry.

returning the concrete to a more neutral PH state and reducing the potential for reinforcement corrosion and concrete deterioration. In the Netherlands, there has been a further step taken with the development of bioconcrete. This material is currently being tested

Developing bioconcrete Researchers in the Netherlands have developed bioconcrete that will prevent deterioration in buildings by repairing itself.

44 October 2017

in a number of scenarios, and has already drawn a lot of attention for its potential. The bioconcrete mix has added bacteria and calcium lactate dispersed throughout it, which can then lie dormant in the finished material for up to 200 years.

Once the material cracks and the bacteria is exposed to moisture, it is activated and begins to form limestone, infilling the cracks and preventing further moisture ingress and deterioration.

While material innovations are presenting credible options for the improvement of buildings in the future, it is not only risk of injury which hampers the development of a new smart building material. There is a requirement for huge investment in R&D of the product itself, and the new materials potentially also require the development of new manufacturing methods, new machinery and retraining in the industry. The difficulty therefore is knowing which technologies will make it over these hurdles and be adopted – and which will end up in the skip.

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Market Overview

Pragmatic Planning

Big Project ME examines the growth sectors of the Bahrain real estate market as the Kingdom steps up development plans across a number of sectors

Bahrain’s real estate sector is in the midst of a rapid expansion due to a surge in demand for residential and retail development, a recently released report from the Bahrain Economic Development Board (EBD) finds.

The economic quarterly report reveals that growth in the real estate sector reached 4.5% in the first quarter of 2017, contributing $1.7 billion to the economy, while real estate transactions in Bahrain grew by 15.2% in the same time period, reaching a total value of $770 million. This represents an 8.1% jump compared to the same quarter in 2016.

The retail and hospitality sectors also witnessed significant growth, while the hotels and restaurants sector emerged as the fastest growing sector during the first quarter of this year, recording a 12.3% year-onyear real rate of expansion.

46 October 2017

According to the H1 2017 Bahrain MarketView developed

by CBRE, retail and F&B developments continue to be popular investment choices for Bahrain, though experiential and entertainment-focused retail concepts are also beginning to influence shopping centre designs.

A number of festival waterfront and neighbourhood retail projects are opening or are currently under construction, the CBRE report says, highlighting projects like the Avenues, scheduled to open in late 2017 with 33,000sqm GLA, and The Oasis, a large regional shopping centre opposite the grand mosque in Juffair, which will open in 2018.

“Retail and leisure are seen as the main drivers of tourism in the country, and international retail operators, including The Avenues and Alshaya Group, continue to work with the local market to evolve the offering,”

says Heather Longden, associate director of CBRE Bahrain.

Yazan Haddad, CEO of Bahrain Marina Development Company, the developer building Bahrain Marina, a 310,000sqm mixed-use development project in the heart of Manama, agrees that there has been a notable shift in the way projects are being designed and built in the Kingdom.

He tells Big Project ME that as a developer, Bahrain Marina Development Company has been careful to keep in mind the bigger picture while designing and building its massive mixed-use project.

“Every project has its own unique niche, but they all tie into an overall development. It’s this pragmatic plan that the Kingdom itself is embarking on, for the Year 2030 Vision. It’s an ambitious plan, and we’re part of it. It aims to help develop the country and

bring more investment into the Bahraini market, from different sectors. We are just one of many sectors – be it entertainment, education or healthcare, there are many projects in the pipeline that go into different sectors.

“We have seen that the pragmatic development plans of the Kingdom have contributed to the boom that we’ve seen recently in the Kingdom, across all sectors.

As you drive the streets of Bahrain, you see the number of cranes that are part of the development of such mega projects. There’s a good plan in place to develop the country, to increase investment and to increase the potential for investment within the real estate sector,” Haddad asserts, pointing out that the real estate sector is a driver of many other sectors and industries across the country.

“By developing a mixeduse development like Bahrain

Market Overview

Marina, we will be contributing to, and be a part of, this pragmatic plan to actually generate such developments within the country.

Bahrain is a small country, so any project of a decent size can actually influence and make a dent in any market it’s positioned in.

“Our ultimate aim as a company with such a development is to create the ultimate destination for entertainment and leisure within the country. We want to have a new offering for entertainment, and what we’re trying to do is put a development on the map for the touristic and entertainment sectors of Bahrain,” Haddad adds.

He points out that the variety on offer at the Bahrain Marina development will definitely add it to the list of destinations Bahrain has. He explains that the target behind this, and the other major projects underway in the country, is to create a sense of destination

within Bahrain where visitors flock to the country to see particular developments or attractions.

“We’re looking at close to 250,000 visitors coming over the causeway every month into Bahrain. Everybody is going to compete for the same number of people coming into and out of Bahrain. What you need to do is differentiate yourself by giving an extra offering. It’s this offering that lets you attract visitors into Bahrain, while also making sure that your local market is being satisfied and catered for.

“Take any destination in the world. When you go to Disney World, you go there for Disney.

You spend time and money there. We want to put a place in Bahrain where people think, ‘Okay, if I go to Bahrain, then I definitely need to go there.’ This is what we’re trying to do.”

However, this is not the only

burgeoning sector for the Bahraini real estate market, with both the Economic Development Board of Bahrain report and the CBRE report highlighting the growth and potential of the residential sector.

Citing statistics published by the Ministry of Housing, the EDB report says the number of residential applications pending allocation of units currently stands at 55,000 and is estimated to grow by 5,000 each year, driving the high demand for residential units in the Kingdom.

Additionally, the number of housing developments, both social and private, has increased in recent years, with more than 17 housing projects underway, including some private projects.

“In terms of the residential market, we see the highest growth potential in the affordable housing market. Right now, in terms of demand numbers, there’s a deficit

of about 55,000 applicants just waiting for units, which increases by 5,000 applicants on a yearly basis,” says Ali Ghulam Murtaza, director – Real Estate, Tourism & Leisure Business Development for the Economic Development Board.

“With all the supply that’s coming in, we’re probably going to hit 15,000 to 20,000 of those units, so there’s a lot of need for more affordable housing units. In the mid- to upper sector, demand remains constant. The supply that’s coming in is being taken on, albeit at a slower rate than affordable housing, but that’s because demand numbers are also lower.

“However, in the long run, what’s happening also is that regional investors are looking at Bahrain for a second home, a weekend retreat or even units that put up for yield generating purposes.”

According to the CBRE report,

October 2017 47

Market Overview

the residential sector in Bahrain has been under-supplied for over 25 years, with a housing shortage of approximately 75,000 units estimated in 2017.

The majority of the shortage is in the low- to middle-income segment, catering to the needs of Bahraini families, backing up the findings of the EDB report.

The current demand in 2017 is for 290,000 units, based on population statistics and typical household sizes, while there are only 216,000 completed units across all property types in the market.

In order to rectify this imbalance, the government is leading an intensive strategy to close the supply-demand gap, with 40,000 units scheduled to be introduced under the housing plan by 2020.

“Areas popular with expatriates for both apartment rental and sales continue to be Juffair, Seef , Amwaj and Reef Island. One of the most active districts of Bahrain for new residential development is Juffair, where there are a number of large-scale residential tower projects under construction and planned for completion in 2017 and 2018,” says James Lynn, director of CBRE Bahrain.

“This is anticipated to lead to a significant increase in freehold

“We’re looking at close to 250,000 visitors coming over the causeway every month into Bahrain. What you need to do is differentiate yourself by giving an extra offering. It’s this offering that lets you attract visitors into Bahrain, while also making sure that your local market is being satisfied and catered for”

supply over the next two years in this area of Bahrain. In 2016, the micro market comprised 2,800 freehold units and this is expected to rise to over 5,000 units by 2018, which is almost 79% growth within a short two-year period.”

Finally, another major growth area for Bahrain is the infrastructure projects sector, where EDB estimates the value of the Kingdom’s pipeline of large-scale infrastructure projects across a wide range of sectors to be $32 billion. These projects will support growth within the real estate market and help maintain robust economic growth throughout the Kingdom.

In addition to developing the necessary hard infrastructure, the report adds that Bahrain is also implementing soft infrastructure, such as smart legislation which will enable investors to realise value from their capital. One example is a new regulation developed in consultation with the private sector to specifically support growth in the Kingdom’s real estate sector.

“Infrastructure is being invested in heavily,” says Jerad Bachar, executive director – Tourism & Leisure Business Development for the Economic Development Board. “Bahrain is a country that’s

fortunate to have a long-standing diverse economy. Less than 20% of the economy is dependent on oil & gas. With real estate, in the first quarter of the year real estate reached 4.5% of the economy, equivalent to $1.7 billion. So it’s a big driver within our economy, and it’s a growing part of the economy.”

“Investment in infrastructure is across the gamut. Infrastructure related to road works is a big part of that $32 billion pipeline, while $1 billion of that is invested in Bahrain International Airport, along with everything supporting the airport.

“Telecommunications upgrades and so forth are a big part of that as well, along with healthcare facilities. That $32 billion is quite diversified, as is the source of financing. Some of that is coming from the GCC fund, some is coming from the government of Bahrain itself, and then a good part of that is coming from the private sector developing everything around their projects and helping support them from an infrastructure standpoint.

“The goal is really to continue to drive diversification within the economy. These development projects that are coming into the market now are all part of that diversification growth,” he concludes.

Developing infrastructure The Kingdom’s pipeline of large-scale infrastructure projects across various sectors is valued at $32bn.

48 October 2017

Events

CITYSCape global 2017

Developers confirm host of real estate sales amidst a surge of transactions Dubai, 13 September, 2017: Boosted by a year-on-year increase of 25% for visitors during its first two days, Cityscape Global has been the catalyst for a 186% increase in registered Dubai Land Department transactions of off-plan units, while big-name developers have recorded overwhelmingly positive sentiment from investors driven by on-site sales.

The region’s largest real estate and investment show, which concluded on September 13, 2017 at the Dubai World Trade Centre, hosted hundreds of prominent local and international companies offering an array of exclusive deals on projects being built within the UAE.

bump in numbers Cityscape Global registered a 25% increase in visitors on the first two days.

Tom Rhodes, exhibition director for Cityscape Global. said: “We’re seeing a new wave of investors, end users and homeowners attending this year, and with 25% more visitors than

2016’s edition, developers’ stands have been busy with activity. The atmosphere on the show floor has been great this year, and it’s encouraging to see investors eager to capitalise on attractive pricing by

developers during the exhibition.”

In addition to transactions on-site, up to 40 new project launches were announced during the show from developers such as Aldar Properties, Deyaar, Dubai Properties, Jumeirah Golf Estates, Nakheel and Meydan.

Cityscape Global 2017 returned with support from Foundation Partners Dubai Properties and Nakheel PJSC; Platinum Sponsors Al Marjan Island, Binghatti Developers and Union Properties PJSC; Gold Sponsor Tamleek Real Estate Registration Trustee; Silver Sponsor Maryapi Real Estate Development; Project Marketing Sponsor Aqua Properties; and Strategic Partner Dubai Land Department.

downTown dubaI growS

Show runs from 14 to 17 November and will host 150 brands from 25 countries The 2017 edition of Downtown Design, the anchor event for Dubai Design Week, will be the largest and most significant to date, celebrating five years as the leading design trade fair for highquality design in the Middle East.

Taking place in partnership with Dubai Design District (d3) and the Dubai Culture & Arts Authority (DCAA), the show is set to enhance its position as the Middle East’s essential contemporary design event, providing industry and public audiences with new products, trends and inspiration.

Downtown Design will present talent across 26 product categories, including furniture and lighting, textiles and accessories, and the 50 October 2017

Five years of downtown dubai The fifth anniversary of the anchor event of Dubai Design Week will see a show that is double the size of previous editions.

latest in kitchen and bathroom technology. The show will feature world-famous brand names and showcase eight emerging regional design brands for the first time.

Rue Kothari, show director of Downtown Design, says, “We’re delighted to be marking five years of Downtown Design with a show double the size of previous editions. Not only does this reflect the strength of the exhibition and its reputation, but also the growth in high-demand sectors of lighting, furniture and textiles. The show continues its rise, while focusing on connecting exhibitors to the region’s leading architects and interior designers. Helping brands and buyers to unlock the potential of the Middle East design market is

at the heart of Downtown Design.”

Downtown Design maintains its renowned approach to detail, quality and relevance in selecting brands to exhibit. The 2017 edition sees an increase in the number of brands across all categories, with an outstanding 90% retention of key brands, each returning with fresh concepts for the market.

Downtown Design’s commitment to its exhibitors includes bespoke marketing and public relations tailored to support each brand, and a dedicated buyers programme which matches commercial objectives with buyer profiles.

The result is a trade audience unparalleled in terms of both quality and relevance. Pre-register on www.downtowndesign.com.

ME BIM Summit 2017

The future of BIM in the GCC 1 November 2017 HABTOOR GRAND HOTel DuBAi, uAe mebimsummit.com

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Tenders

Top tenders Al DibDibAh PhotovoltAic SolAr Project budget $1,200,000,000 Project Number MPP2429-K territory Kuwait client Kuwait National Petroleum Company (KNPC) Address Imad Commercial Centre city Safat 13001 Phone (+965) 2244 7477 Fax (+965) 2244 7492 / 2240 2269 Website www.knpc.com.kw Description Construction of a photovoltaic (PV) solar energy plant with capacity of 1GW Period 2020 Status New Tender tender categories Power & Energy tender Products Photovoltaic Plants, Solar Energy

city ceNtre SohAr Project budget $115,000,000 Project Number WPR1711-O territory Oman client Majid Al Futtaim Investments (Oman) city Muscat PC 11 Phone (+968) 2453 7788 Fax (+968) 2454 5320 email inquiry@mafgroup.ae Website www.majidalfuttaim.com Description Construction of a shopping mall comprising 100 new retail outlets Period 2018 Status Current Project tender categories Construction & Contracting, Leisure & Entertainment tender Products Retail Developments

NAjD MAll Project – Al NArjiS budget $72,000,000 Project Number WPR2278-SA territory Saudi Arabia client Arabian Centres Co – Fawaz Al Hoakair Group (Saudi Arabia) city Riyadh 12394 - 7808 Phone (+966-11) 825 2222 Fax (+966-11) 825 2323 email info@arabiancentres.com Website www.arabiancentres.com Description Construction of a shopping mall Period 2019 Status New Tender tender categories Construction & Contracting, Leisure & Entertainment tender Products Retail Developments

roAD & iNFrAStructure WorkS Project – PAckAge 2 – WADi Al QAWr

Project Number WPR2325-U territory Northern Emirates client Ministry of Infrastructure Development (Dubai) Address Formerly Ministry of Public Works, Al Nahda Street, opposite Al Nahda Metro Station city Dubai Phone (+971-4) 261 0001 / 212 5555 Fax (+971-4) 212 5544 Website www.moid.gov.ae Description Construction of a road and infrastructure Period 2020 Status New Tender tender categories Power & Alternative Energy, Roads, Bridges & Infrastructure, Sewerage & Drainage, Water Works tender Products Infrastructure, Roads Construction

reSiDeNtiAl toWer rr2-c19 Project – reeM iSlAND

budget $35,000,000 budget $25,000,000 Project Number WPR2348-U territory Abu Dhabi client Reem Developers (Abu Dhabi) Address Reem Investments HQ Bldg, Muroor Road, Al Nahyan Camp Area, Al Ramlah Street, Bldg No. 32 city Abu Dhabi Phone (+971-2) 443 8900 Fax (+971-2) 443 8125 email info@reemi.ae Website www.reemdevelopers.com Description Construction of a residential tower comprising a ground floor and 24 floors Period 2019 Status New Tender tender categories Prestige Buildings tender Products Residential Buildings

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52 October 2017

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the ADDreSS MixeD-uSe DeveloPMeNt Project

MAtAl coMPlex Project – Al khobAr

Project Number MPP2979-U territory Northern Emirates client Emaar Properties PJSC (Dubai) Address Emaar Business Park, Bldg No. 3, Near Interchange No. 5, Shaikh Zayed Road city Dubai Phone (+971-4) 367 3333 Fax (+971-4) 367 3000 email customercare@emaar.ae Website www.emaar.com Description Development of a mixed-use scheme comprising serviced apartment buildings, a hotel and residential apartments Status New Tender Main consultant SSH International Consultant (Dubai) Project Manager Mirage Mille Leisure & Development (Dubai) tender categories Leisure & Entertainment, Construction & Contracting, Hotels tender Products Hotel Construction, Residential Buildings, Retail Developments

Project Number WPR2341-SA territory Saudi Arabia client Jannat Real Estate Investment (Saudi Arabia) Address Unit No. 1, Dhahran 34258 - 6243 country Saudi Arabia Phone (+966-13) 899 7055 Fax (+966-13) 893 5046 email info@jannat.com.sa Website http://jannat.com.sa Description Construction of a complex of high-end restaurants and cafés with direct views of the sea and at zero distance from the Gulf waters and terraces Period 2018 Status Current Project Main consultant Abdullah Battyour Consulting Company (Saudi Arabia) Design consultant Vision Architectural Design Office – VADO (Saudi Arabia) Main contractor Othman Saleh Al Ghamdi Contracting Est (Saudi Arabia) tender categories Construction & Contracting, Hotels tender Products Hotel Construction

AMericAN uNiverSity oF ShArjAh (AuS) eNterPriSe heADQuArterS builDiNg Project Project Number WPR2294-U territory Sharjah client American University of Sharjah (Sharjah)

Address University City city Sharjah Phone (+971-6) 515 5555 Fax (+971-6) 515 2200 Website www.aus.edu Description Construction of a headquarter building comprising a ground floor and 4 additional floors Period 2019 Status Current Project

Design consultant Khatib & Alami Engineering Consultants (Sharjah) Main contractor Darwish Engineering Emirates LLC (Sharjah) tender categories Construction & Contracting, Education & Training tender Products Educational Developments

Bahrain hASAbi WAterFroNt DeveloPMeNt Project Project Number WPR2157-B territory Bahrain

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54 October 2017

Tenders

client Manara Developments Company BSC (Bahrain) Address BWTC, 23rd floor, East Tower city Manama Phone (+973) 1751 8667 Fax (+973) 1713 1074 email info@manara.bh Website www.manara.bh Description Development of a mixed-use scheme comprising villas and commercial spaces, in addition to beach facilities and residential buildings Status New Tender Main consultant SSH International Consultants (Bahrain) tender categories Leisure & Entertainment, Marine Eng Works & Seaports, Construction & Contracting tender Products Commercial Buildings, Marina Development, Mixed-use Developments, Residential Buildings

tender Products Substations Construction

Lebanon SAiNt jAcQueS PlAzA Project – burj hAMMouD city Project Number WPR1853-LE territory Lebanon client Municipality of Burj Hammoud Address Armenia Street, Burj Hammoud city Beirut Phone (+961-1) 260 155 Fax (+961-1) 260 156 email info@bourjhammoud.com Website www.burjhammoud.gov.lb Description Construction of three residential buildings, shops and a multi-level parking facility Period 2019 Status Current Project Main consultant Vazken

Chekijian Architect (Lebanon) Main contractor Kfoury Engineering & Contracting sarl (Lebanon) tender categories Construction & Contracting, Leisure & Entertainment tender Products Residential Buildings, Retail Developments

Jordan rAPiD trANSit route coNStructioN – AMMAN buS rAPiD trANSit budget $7,000,000 Project Number MPR1548-J territory Jordan client Greater Amman Municipality city Amman Phone (+962-6) 463 6111 / 463 5111 Fax (+962-6) 464 9420 email info@ammancity.gov.jo Website www.ammancity.gov.jo Description Construction of

a bus rapid transit route Status Current Project Main contractor Haddadin Engineering Company (Jordan) tender categories Public Transportation Projects tender Products Roadways

Egypt ShoPPiNg MAll Project – 6 october city Project Number MPP2656-E territory Egypt client Name Amaar Group (Egypt) city Cairo Description Construction of a new shopping mall Status New Tender tender categories Construction & Contracting, Leisure & Entertainment tender Products Retail Developments

Oman MuASkAr Al MurtAFAA SubStAtioN Project budget $6,000,000 Project Number WPR2329-O territory Oman client Ministry of Electricity & Water (Oman) Address PC 112 city Ruwi Phone (+968) 2460 3906 / 2461 1100 Fax (+968) 2460 3977 / 2461 1133 Description Design, supply and construction of a new substation Period 2018 Status Current Project Main contractor Galfar Engineering & Contracting Company SAOG (Oman) tender categories Power & Alternative Energy

INTEGRATED ESTIMATING, PROJECT CONTROL AND ERP SOLUTION FOR CONTRACTORS www.ccsgulf.com | Tel: +971 4 346 6456 | info@ccsgulf.com

October 2017 55

Last Word

Speed up your VAT readiness Neeraja Kalyanasundaram, senior tax consultant at ePROMIS Middle East & Africa, outlines steps companies in the UAE can take to be prepared for the introduction of VAT The long-awaited introduction of a valueadded tax (VAT) is set to become reality in the GCC member countries from January 1, 2018.

As per UAE ministry of finance rulings, any business that has taxable supplies or imports of over AED 375,000 must register for VAT. But according to a recent survey by EY, more than half of the businesses in the GCC have not yet initiated preparations for the 2018 VAT implementation deadline.

Although VAT is not intended to be a tax on business – rather, on the consumer – operating cost of companies is likely to go up while implementing VAT. This could be due to VAT compliance requirements, consultations and documentations, employee training and upgrading the enterprise resource planning system.

It is nearly impossible to maintain VAT returns manually. To be VAT-

56 October 2017

compliant, companies need to upgrade their business management software systems. It also requires shareholder awareness to easily handle the operations of tax.

Companies operating in the Middle East should consider taking a few vital steps well in advance of VAT introduction to keep up with their tax obligations. At ePROMIS, we have identified some critical matters that require your immediate attention.

Identifying and Predicting

It is essential to discover the scope of the modification needed for successful VAT compliance. Make an effort to understand the impact of VAT on demand for your goods and services, and what actions your competitors are taking in that regard. Keep up with news and articles on VAT implementation, including the government websites for VAT-related updates and FAQs.

Planning and Resourcing

Make sure all relevant books and records are well maintained, and plan even the most minute change you are required to perform.

From changing the invoice formats to add a column for VAT, to intercompany transactions and cash-flow management, there are many critical changes you should plan at the earliest.

Allocating enough information technology as well as human resources to make the VAT transition smooth is of high priority. You should form a steering committee of senior managers to supervise the whole transition.

Additionally, you may also need to obtain technical and legal advice from experts and consultants.

Your Supplier/Customer Relationship:

Apart from the changes involved in IT systems and business processes,

you should consider your relationships with external parties such as customers, suppliers and subcontractors. They may find it uncomfortable if you are not prepared for the introduction of VAT. For example, you may have existing contracts which run past 1 January.

Perform a careful and persistent analysis on your current contracts to find out whether you should negotiate with the other party to revise any contractual obligations. When making new contracts, ensure the provisions reflect the imposition of VAT, for example with price inclusive or exclusive of VAT in the price quotes.

According to experts, there will be specific VAT rules for goods and service supply from one GCC country to other. This will affect your global trading activities by adding an extra layer to existing customs, regulations and trade compliance.

Updating Business Management Systems

Business systems or enterprise resource planning software normally includes standard taxation functionalities. But in the Middle Eastern market, since tax compliance was not in the minds of people as a business requirement, the taxation functionalities were either disabled or never included when implementing enterprises’ software solutions. Regarding inhouse or fully customised systems, taxation may not even be considered during the production or customisation phases.

VAT will have an impact on your entire business process, from point of sales to invoicing, accounting and reporting.

Whether your enterprise resource planning is an in-house system or globally renowned software, it will need to be enhanced and modified to incorporate all aspects of VAT implementation.

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