Weekly Dubai real estate news digest. Issue 70

02.11.2014
Dubai on its way up
Welcome to the seventieth issue of Market Insight, your weekly guide to what's happening in the Dubai real estate market.
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MARKET INSIGHT. Weekly guide to Dubai's property scene
Issue 70 |  November 2, 2014

Dubai on its way up

Dubai's real estate sector is making wave globally and not just because of its headline-making new projects. The emirate is back on the list of top cities for investment, according to a Cushman & Wakefield report. Ranking 186th in the previous list, the emirate is now number 39 among 50 cities with investments up on an annual basis to $3.68 billion. 

Focusing in on investor demand, Dubai has announced news that has come as relief for investors in the emirate's real estate sector, reviving several projects where development had been halted during the financial crisis. The six projects were part of the Best Homes portfolio and will now be managed by Q Developments. 

Increased investor attention might be one sign that the market is on its way up, but another clear indicator is the performance by some of the market's leading developers. Emaar Properties has recorded a profit of $678 million, 37% higher than what was recorded in the year before. Mohammad Alabbar, chairman, Emaar Properties, said: "This has been a record nine-month performance for Emaar as we delivered on our promise of strengthening shareholder value. We set an industry milestone by announcing a total dividend of AED17.12 billion this year through our strategic growth initiatives including the distributions approved by the shareholders at the beginning of this year and the dividends proposed for distribution before the end of this year."


While the focus on the end-user is clearly evident, Dubai has always managed to stay in the news as a result of his record-breaking feats with real estate. The emirate has its eyes on another 'tallest tower,' announcing plans to build the world's largest twin towers - the Dubai Twin Towers - which will be located at the Dubai Creek.

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Earlier in the year, experts were concerned about Dubai heading towards a property bubble similar to the one in 2008. However, it has become increasingly apparent that the emirate has learnt its lessons, responding to the needs of investors and buyers. While prices may have skyrocketed over the past year, the market has responded quickly towards the needs of the end-users with rents falling in many key residential areas. With new developments in the pipeline, the market is bound to regulate itself, stablising as a result of increased supply. 


Sincerely,

Pashma Manglani

Editor


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Rents fall in Greens, Marina, Arabian Ranches

Rents are falling in Dubai's prime areas as tenant demand diverts to other not-so-posh locations of the emirate, Emirates 24/7 reported.
 
Downtown Dubai, Jumeirah Beach Residence (JBR), Greens Community, Meadows, Springs and Arabian Ranches witnessed a decline in rental prices. 

However, Dubai International Financial Centre (DIFC), Jumeirah Islands and Mirdif witnessed a rise in rental prices in the last quarter.

Rents in the Greens community registered the maximum decline in the third quarter, falling 15% compared to the second quarter 2014, a new report reveals.

Meanwhile, in the villa segment, rentals in the Springs, Meadows and Arabian Ranches – each of the communities saw a decline of four per cent, data released by MPM Properties, the real estate subsidiary of Abu Dhabi Islamic Bank (ADIB), shows.

 

Read more on Emirates 24/7

Investors relieved as projects are revived

Six property projects in Dubai, stalled since the global financial crisis, are to be revived, providing relief for investors, The National said. 

The projects, which were part of the former Best Homes development portfolio, have been taken over by Empire Arabia which has signed an MOU with Q Developments, part of the Dubai-based Q Group of companies. Q Developments is to manage and deliver the projects, it said in a statement.
 
The developments include two in Sports City - Global Golf Residences 2 and Rescom Tower. Two more of the developments are located in International City - Global Green Views 2, where work has reached the third floor, and Global Green Views 3. In Business Bay, Global Bay View has been designed as an office tower but is subject to a change of use and redesign, the statement from Q Group said. The final project is a 19-storey residential tower in Jumeirah Village Triangle.

 

Read more on The National

Increased attention on affordable housing

An associate company of Emaar Properties will soon launch an affordable housing project in the UAE, the company chairman told Emirates 24|7.
 
“There is an internal discussion on Dawahi Development. We have an associate company that may be taking on that responsibility and I think they might be announcing something soon in the UAE,” said Mohamed Alabbar, chairman, Emaar Properties.

"It is going to take care of that level of market (middle income market),” he stated without giving any price range for the products.

 

Read more on Emirates 24/7

Emaar sees 37% hike in profits

Emaar Properties has reported a net profit of $678mn for the first nine months of 2014 – 37% higher than the corresponding period last year, Construction Week Online reported.
 
The Dubai-based developer, in which the government has a 31.2% stake, also revealed a 21% rise in third quarter net profit of $206mn.

Mohamed Alabbar, chairman of Emaar Properties, said: “This has been a record nine-month performance for Emaar as we delivered on our promise of strengthening shareholder value. We have set an industry milestone by announcing a total dividend of AED17.12bn ($4.66bn) this year through our strategic growth initiatives including the distributions approved by the shareholders at the beginning of this year and the dividends proposed for distribution before the end of this year."

 

Read more on Construction Week Online

Another 'tallest tower' in Dubai 

Dubai is aiming for another notch in the “tallest” stakes by building what would be the world’s tallest twin towers, Gulf News reported.

The Dubai Twin Towers will be located at The Lagoons, the master-development taking shape near the Creek. Apart from the images, more details of the project are to be revealed in due course.

Before that, on November 1, the first off-plan properties at The Lagoons go on sale in Dubai and Abu Dhabi, as well as in London and Moscow. These are for the units at the 40-storey Dubai Creek Residences, itself part of the 6-million square feet (1,482 acres) Dubai Creek Harbour cluster. It will form part of a six-tower structure within the ‘Island District’.

 

Read more on Gulf News

Builders faced with late payments, low margins 

With the Expo 2020 just around the corner, the UAE has been announcing new projects like there is no tomorrow, but according to Arabian Business, all is not well on the construction front.
 
Builders in the UAE are finding themselves buried under massive amounts of work but profit margins are squeezed and developers are slow to pay bills. That could mean some of Dubai's mega projects may fall behind schedule. 

"The biggest challenge contractors face is that the margins are still going down. It's getting more competitive, and a tough market to survive," said Philippe Dessouy, managing director at Belgian construction firm BESIX.

One regional industry expert, who did not want to be identified because of the sensitivity of his comments, said profits at UAE construction companies would be weak this year despite the massive volume of business. "The contracting business is going through a rough phase. Payments are coming in late, which is impacting builders, and they are now faced with liquidity issues. This would of course have an impact on the projects," he added.


Read more on Arabian Business

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