dubai real times june 2009
DESCRIPTION
The official magazine of Dubai Real Estate Regulatory Agency (RERA. Published by Sterling Publications, DubaiTRANSCRIPT
MANAGING EDITOR K Raveendran [email protected]
MANAGING DIRECTOR Sankaranarayanan [email protected]
GENERAL MANAGER Radhika Natu [email protected]
EDITOR Linda Benbow [email protected]
CONTRIBuTING EDITORS Vanit Sethi [email protected] Ramanan [email protected]
CREATIVE DIRECTORHarikumar PB [email protected]
Designerujwala Ranade [email protected]
SALES AND MARKETING
Product Manager Vijayan G [email protected]
Accounts & Administration Biju Varghese [email protected]
Circulation Supervisors Ibrahim A. HameedSaleem K u
PrintingAsiatic Printing Press L.L.C., PB 3522, Ajman, UAE. Tel. 06 743 4221, www.asiaticpress.com, email: [email protected]
Distribution: Tawseel PB No 500666 Dubai, UAE. Tel: (+971 4) 342 1512
Sultanate of Oman: Al-Atta’a Distribution Est., Kuwait: The Kuwaiti Group for Publishing & Distribution Co.Bahrain: Al Hilal Corporation, Qatar: Dar Al-Thaqafah, Saudi Arabia: Saudi Distribution Company
Sterling Publications FZ LLC Loft Office 2, G 01, Dubai Media CityP.O. Box 500595, Dubai, UAE. Tel. +971 4 3678061 + 971 4 367 2245, Fax +971 4 367 8613 Website: www.sterlingp.ae Email: [email protected] Offices: India: Anand Vardhan, DII/89, Pandara Road, New Delhi, 110003. Tel: 0091 1 26517981Bahrain: Sunliz Publications W.L.L, PO BOX 2114, Manama, Kingdom of Bahrain. Tel: 00973 17276682
Message f r om t he CEO
Eng. Marwan Bin GhalitaCEO, Real Estate Regulatory Agency
OFFICIAL MAGAZINE OF REAL ESTATE REGULATORY AGENCY
RERA neither takes responsibility nor accredits any studies, research or statistics that are not issued by it.
For the past three months, I have been meeting with all type of clients, investors, developers, and agents. Each one of them has their own issues and complaints. However, all of them have two things in common which keep coming up in their speeches: “trust”
and “listening”.
Investors have always said that they invested with a developer because “we trust him”. The developer, as well, maintains that he started developing a project because of trust for the master developer. The agents rely on their trust for developers and investors to pay their commission. So, it is all about “trust”. This was at the beginning.
Today, the tone has shifted and investors are saying that the developer is “not listening to us” and “he is not communicating with us”. The developer, on the other hand, is accusing the master developer of the same. The developer says the investors are lacking trust and not listening to the situations they are facing during these bad times. The agent has the same story with their clients; they say clients aren’t listening to what we are struggling through. This at the end. This is today’s situation.
These small words, “trust” and “listening” have a great effect on peoples relations. To survive the storm, we should start listening to each other, keep trusting each other, and never ever lose trust in this great city whose soil we’ve gathered together on.
Trust and Listen
DU
BA
I RE
AL
TIM
ES
2
31 Dubai Focus Auctions
32 Community Events Cricket, diet and awards
34 Events Architecture awards
35 Launches Dubai Pearl’s hotels
36 Under Construction Digging the dirt
41 Infrastructure Plumbing new depths
44 Environment Painting a clean picture
45 Appointments Restructuring top management
46 Law & Regulations Questions & Answers, Law 9
11 Market Trends & Analysis payment schemes and mortgages
3 Open Day Meeting the public4 Project Indicator Progress photos are on website 6 Valuations Regulating the Valuers9 Affiliations RERA joins global associations11 Statistics Figures for the month of May
8 PERSONALITY MAHMOUD HESHAM AL BURAI
CONTENTS
DU
BA
I RE
AL
TIM
ES
3
To improve communication with customers RERA launches ‘Open Day’R
ERA (The Real Estate Regu-latory Agency)’s Guarantee Account Department has launched ‘Open Day’ to
better serve its clients. This is the first of many moves to enhance transparency and facilitate custom-er service. Marwan bin Ghalita, CEO of RERA said, “In an effort to apply transparency in customer relations, RERA is widening the arena of com-munication between our staff and customers. These Open Days will be an entirely new form of commu-nication. There will be Open Days for each department in the agency. We began with the Guarantee Ac-count Department to answer all of the questions of investors, develop-ers and banks.”
Essa al Mansouri, Head of Trust Account Section said, “With the di-rections from Marwan bin Ghalita,
our CEO, in his pursuit of transpar-ency, easing transactions of all stakeholders in the real estate sec-tor, guaranteeing customer satis-faction, and listening to all different points of views of companies in the real estate sector, the Guarantee account department has worked to provide the sector with distin-guished customer service. We ap-ply best practices, are aiming to help clients solve their problems, and to give good consultations for customers who are the heart and soul of RERA.”
Al Mansouri added, “Every Tues-day the Department will meet cli-ents (developers, banks, investors). There is a special counter for this service to offer privacy in business transactions. Moreover, we have increased the number of counters from are to there in order to expe-
dite service.” He confirmed that the number
of customers on Open Day, so far, has increased to a total of 443, This policy has eased the pressure of customer service on other days of the week, and has had a positive effect on customers because of the speed of communication and the ability to have all enquiries an-swered by RERA’s staff.
Khalid Obaid Al Mutaiwei Senior Director, Real Estate Development Trust Account Dept. said, “The pol-icy of Open Day has opened a new and direct communication channel with customers. This service pro-vides a new source of information about RERA services and eases en-quiries. Furthermore, RERA has im-plemented technological tools to increase the amount of time saved by customers.”
“Every Tuesday the Department will meet clients (developers, banks, investors). There is a special counter for this service to offer privacy in business transactions. Moreover, we have increased the number of counters from are to there in order to expedite service”
OPEN DAY
DU
BA
I RE
AL
TIM
ES
4
T he on-line Project Indica-tor was established at the beginning of this year, in January 2009. We carry out
technical audits on all registered projects and follow up with these projects every three months. There is a technical team who is out in the field, physically visiting the sites,
Progress (Masaar) on websiteIf you want to know how a construction project is progressing look on the RERA website, www.rpdubai.com, as the Agency has been busy checking documents, inspecting sites and uploading photos onto the Project Indicator section for investors and other interested parties to look at. Essa Al Mansoori, Head of Trust Account explained it all to Linda Benbow
85.3% of projects are still •progressing
2.7% of projects are being •completed
10% of projects are on hold – •the developer is undecided
31.8% of projects are •progressing but not yet on site
What we have found so far - market statistics:
There are currently approximately 400 projects already uploaded on the website, with information on how far their construction has progressed. We have now inspected over 1000 villas and 350 towers.
PROJECT INDICATOR
DU
BA
I RE
AL
TIM
ES
5
Essa Al Mansoori, Trust Account – Head of Auditing & Follow-Up
“We receive a lot of queries from people about transactions conducted before RERA was set up, before the necessity of Guarantee accounts. They want to know whether the monies for the project have now been deposited into a Guarantee account.
We tell them that their money has been adjusted. We have looked at expenses, have consolidated all the money and the difference, if any, should have been deposited in the Guarantee account. If there is a deficit, then it means that the developer has recovered his costs.
We are communicating with the listed Account trustees (banks), sending forms for them to complete, have audited by independent auditors and then return to RERA by the end of July. These will be available for inspection” explained Essa Al Mansoori about future plans and regulations.
meeting with Consultants, check-ing contracts, agreements, build-ing schedules and other docu-ments. The team takes photos of the site, they ask how the work is progressing – whether there are any problems or reasons for on-time/late work. Also, the devel-oper provides RERA with informa-tion, and we check this to make sure that it is still correct. When all the information (‘masaar’ in Arabic) is collected the website is updated within 24 hours.
We are currently aiming to au-dit 150-200 projects per month. These will be reviewed every three months in order to keep the infor-mation topical. We hope to have all registered projects audited and on the website by the end of July. Then there will be a rotation, and we will start again with the updat-ing.
There are currently approximate-ly 400 projects already uploaded on the website, with information on how far their construction has progressed. We have now inspect-ed over 1000 villas and 350 towers. The information is there for all to see. Just log onto the website to find out whatever information you
TheRERAProgressIndicator
ProgressBar
Barsindicatethegeneralstagesofconstruction
asfollows:
• Acompletelyblueindicatorbarshows
thattheprojecthasnotstartedonsite.
• Asinglebarshowsthatworkshave
startedonsite,usuallyenablingworks.
• Twobarsshowthatworkshave
progressedintothemaincontract.
• Threebarsshowthatmainstructure
worksarebeingcarriedout.
• Fourbarsshowthatstructureisnearing
completionandotherexternaland
internalworksarebeingundertaken.
• Fivebarsshowthatexternalworksare
mostlycompletedandinternaland
completionworksarebeingundertaken.
GreenArrow: Worksareprogressinggenerallyinaccordancewiththeprojectsoriginalschedule.
AmberArrow: Worksareprogressinggenerallyinaccordancewitharevisedschedule.
RedArrow: Worksareprogressingbutaredelayedorhavesignificantlyfallenbehindschedule.
BlackCircle: Projectisonholdandnotprogressing.
GreenDiamond: Projectissubstantiallycompletedsubjecttofinalcertificationsandcompletioncertificates.
BlueTick: Projectissubstantiallycomplete.
Barsindicatethegeneralstagesofconstruction
Acompletelyblueindicatorbarshows
thattheprojecthasnotstartedonsite.
showsthatworkshave
startedonsite,usuallyenablingworks.
Twobarsshowthatworkshave
progressedintothemaincontract.
Threebarsshowthatmainstructure
Fourbarsshowthatstructureisnearing
externaland
want. There is a key to explain what
the various colours on the icon mean. We have used traffic light colours to simplify things, as there are so many nationalities who have bought and are willing to buy in Dubai. Red means that the proj-ect is delayed. Amber, or orange, means that the project is progress-ing according to a revised sched-ule, while green means that the project is progressing on schedule. A black circle with a diagonal line through it means that the project is on hold and not progressing.
There is a choice to either view the whole list of projects, or type in the name of the project you are interested in and to see more de-tails, i.e. the developer’s name, the master developer, Trust account number and the name of the Bank it is held at.
If there is anything wrong with the project, we flag it, mark the project on the website, so that in-vestors can look into the matter. We provide the information so that others are aware of what is hap-pening and they can deal with the information as they want to. This is a very transparent way of working and we intend to keep it up.
Some companies have an ad-vanced webcam system to show their own investors progress of their own projects. We, RERA, take our own photos for our own website.
Here at RERA we have ‘Open Tuesdays’ when members of the public can come to the offices at Land Department to discuss their property problems. Many of them have already complimented us on the website information, and say that it has meant that they have made fewer trips to the heavily congested area, not to mention clearing up possible problems and arguments before they became major issues. Usually, individual investors cannot go onto building sites, due to safety regulations, to check on their investments, and they appreciate a government entity doing the work for them. If there are any queries, I am happy to receive and reply to emails as a first step.
DU
BA
I RE
AL
TIM
ES
6
VALUATIONS
TaqyeemBy Linda Benbow
Born and bred in Dubai, educated in UK, Mohamad Khodr Al Dah, has been the Head of Taqyeem (mean-
ing ‘Valuation’ in English) at the Real Estate Appraisal Centre for a few months. In London, UK, he was a structural engineer designing build-ings after gaining his degree at Ox-ford. He openly admits that he is not a qualified Valuer, but stresses that his engineering exerience has helped him a lot in his new role.
“Our job is to make sure that professional Valuers in Dubai get licensed and that they undertake their work in a professional man-ner within a regulatory framework, which we will provide. We have drafted new laws which are cur-rently going through the procedure of acceptance, including getting le-gal comments and responses from various specialists in the real estate market.
Simply speaking, we have speci-fied valuation Do’s and Don’ts, a code of ethics along with a descrip-tion of who can register as a valua-tion company and as a Valuer. There will be two types of registrations: (1) a company (to ensure they have an office to work from, insurance etc.) and (b) individual Valuers (working professionals).
We will be organising courses to inform companies of the new laws. We will also be organising other courses for under-graduates, young people who want to enter the trade, those who want to change careers, etc. It will aim at giving people the appropriate qualifications and li-censing.
We already have applications
“My work experience has been in the private sector, and I am looking to run this government department the way a private company would be run” says Mohamad Khodr Al Dah, Head of Taqyeem, Real Estate Appraisal Centre
from companies in the market who were approached for their opinions before drafting the laws. We have the support of major companies in this field. There was recently a sign-ing of an MoU (Memorandum of Understanding) with RICS (Royal In-stitute of Chartered Surveyors), UK’s professional and well respected in-stitute, who is providing us with as-sistance on various fronts.
My previous work experience has been in the private sector, and I am looking to run this government department the way a private com-pany would be run. We are happy to see people and listen to their views. No-one is absolutely right, nor ab-solutely wrong. Patience is key at the moment. Lots of companies are excited about this and want to reg-ister now, but we are not ready to accept them yet. We will let them know when the doors are open.
When the laws are passed we may organise a conference to tell the property professionals about them, and the publications we are currently working, i.e. Valuation methods, Codes of conduct and other technical books.
It is interesting to see a bigger picture. We are all small cogs within a big wheel. My previous job was to liaise with engineers, architects, contractors and clients at the first and second phases of building. Now, I am seeing things at a third stage, when the building has been completed; and we are trying to regulate those who must put a val-ue on it. It’s a different stage of the procedure.
I have worked for a long time abroad and am quite used to a regulatory, rigorous and systematic way of carrying out procedures, es-
DU
BA
I RE
AL
TIM
ES
7
Real estate valuation Real estate valuation is the cornerstone of the real estate sector as property is one of the most important factors that affect the lives of individuals as well as the economy. The rates of lending, borrowing, buying, selling, investment and acquisition decisions depends directly on the process of transforming the property into money.
The concept of real estate: Real estate is everything that is related to land, building or both. Real estate law has been based on everything that is present on land, fixed or otherwise and cannot be transported without damage or change to the structure. So the law covers not only the soil surface but also the horizontal or vertical structures above or below the surface except water which is governed by other laws. The ownership, according to the theory of the inverted pyramid or the carrot, contains not only the surface, but extending from the centre of the land surface to the specified limits and signs, with the exception of the natural deposits such as oil, gold, other valuable minerals etc., and with some limita-tions in relation to height of structures.
The concept of the price: The price is the standard defined by the value of money. Capitalist economy is based on the principle of the price, meaning that there is a price for everything and there is no economic activity without a price. Price of capital is assessed the way things are distributed, for example, the number of houses in the world is not enough for the entire popu-
pecially in the building trade. That ethos and mentality has helped me do the job that I am doing now. As well as drafting new application forms, I have also drafted a com-plaints form as I know that both will
be needed, especially in the early days of our work.
We have been in touch with an international institute with the aim of providing accredited qualifica-tions to those who attend our cours-
es which will explain our laws and our regulations. These will be inter-national qualifications which can be carried from country to country.
Hopefully this will prove our good intentions to those who may
think that we just provide courses to make money. This is not so. We wish to follow good, well thought out laws in a transparent manner. And that is exactly what we, and those who work in this country, will do.”
lation, so the price of a house varies depending on many factors. The basis of a real estate valuation process is to convert the property value to a price, in terms of money, and establish the value of the capital which is the main engine of the process of economic development.
Real estate evaluation:Real estate evaluation forms the basis for all activities on the surface of land, one of the mainstays of the real estate market, as well as survey, registration, use of land on the basis of an integrated legal system. This includes the value of land, building and construction costs. The opinion of an independent expert who follows the principles on pro-fessional and scientific foundations and methods of regular and var-ied access to the assessment of the property, whether the property or plots of land is occupied by any type of construction such as housing, commercial, industrial, etc., is of utmost importance.
The real estate value depends on various factors such as area, lo-cation, type, use of property, title of ownership, size, condition, legal status in terms of transfer of ownership, market conditions, supply, de-mand and many other data for an accurate appraisal of the property.
Failure or mistakes in accurate assessment or appraisal of the real estate valuation can result in serious risks. The fact is that a real estate valuation, in the absence of oversight by competent authorities, may make people turn to non-specialists whose wrong appraisal methods can result in wrong prices to cause random turbulence in property markets that can ultimately affect the global economy. The service of professional real estate appraisers shall limit such anomalies in real es-tate market.
DU
BA
I RE
AL
TIM
ES
8
PROFILE//RERA PERSONALITY
It doesn't take much time to realise how ambitious and mo-tivated Mahmoud Al Burai is. Just by looking at this record of
achievements you quickly get the impression that this man who is still in his twenties is continuously a step ahead with regard to achieving his vision for Dubai. Moreover, he will clearly stay in the forefront even if faced with a tornado of challenges.
Mahmoud al Burai is one of the pioneering leaders who joined RERA, which is full of many young, promising thinkers. He landed the position of Director of Real Estate Sector Development. Mahmoud's department is considered the core that RERA relies on to make impor-tant decisions related to regulating the real estate sector, especially dur-ing these critical times. His depart-ment is also the most trusted source for developing the knowledge and expertise of real estate experts in Dubai.
Mahmoud graduated from the American University in Dubai, ob-taining his bachelor's degree in Electrical Engineering. Immediately after graduation, Mahmoud worked for Dubai Holdings as a Real Estate Development Associate, then was promoted to a Senior Strategic Ana-lyst. His passion for the real estate industry motivated him to continue his studies and earn a Masters De-gree in Real Estate Science from the National University of Singapore. Mahmoud is currently pursuing his MBA at the American University of Dubai. His passion became study-ing the strengths and challenges in
The core of the matterBy Amal Abdul Rahim Al Sahlawi
the market, and monitoring what Dubai can continue to do in order to become the number One refer-ence for real estate globally. By joining RERA as the Director of Real Estate Sector Development, Mah-moud felt that it was time to apply all he has learned in his studies and help create a stable real estate mar-ket that offers fair opportunities for all the stakeholders in this sector.
By joining the pioneers of real estate regulation, Mahmoud start-ed the initiative for strategic part-nerships with many international real estate associations, taking RERA global. He became a member of a number of these associations, such as ARELLO and truly represented Dubai well at their last conference in the USA. The way he views RERA is a combination of admiration, op-timism, and faith that this organisa-tion will successfully balance the modern day needs of the real estate sector while maintaining market ethics and its traditional values.
Mahmoud quickly realised that the amount of responsibility RERA employees take on makes them always cooperate, stick together to face the challenges of the real es-tate sector.
As a leader in RERA, I asked Mah-moud about the elements that each leader should have. He com-mented that there is a huge differ-ence between a manager and a leader. While a manager may have authority, he cannot force people
to achieve his vision. The leader has a quality that makes him natu-rally influential over others, and holds such a vision that he may be a leader even if without a title. A true leader doesn't have anything to do with position or scholastic achieve-ments. This mentality is reiterated by His Highness Shaikh Moham-med bin Rashid al Maktoum, Ruler of Dubai, who has given many dif-ferent distinguished meanings to a ‘leader’. HH Shaikh Mohammed has revolutionised and changed the way people typically think of a leader and what constitutes good government management.
Upon mentioning HH Shaikh Mohammed, one can easily see how Mahmoud has been influenced by His Highness' journey. He is proud to be one of the generations raised by the beautiful thoughts and ideas His Highness has brought into so-ciety. This has always made Mah-moud a better achiever and a real member in Dubai's development. Mahmoud always quotes HH Shai-kh Mohammed, "the successful team who can make 1 +1 = 11 not 2".
Because each success has chal-lenges, I asked him about these. He said that the first enemy of success is fear. Sometimes, when people fear your success and talents, it makes them stop giving you more opportunities because they know you will succeed/arrive there but they hope they can pull you back as much as they can – out of jealousy.
About his weaknesses, Mah-moud claims his faults are hasti-ness and the contradictions which is so typical for anybody in their 20's. And he is really proud that he doesn't recognise the impossible, he trusts his abilities and he cares about people around him. He is always moving forward, he doesn't look back except for trying to learn a lesson from the past. He always quotes HH Shaikh Mohammed, "in the day there are 86,400 seconds. If you cannot invest every second then you should leave the place for some-body else". His ambitions make him sleepless but he always tries to find time for friendships, watching mov-ies and reading. He loves poetry and thinks he has good taste in lit-erature. Mahmoud is also a skilled Arabic hand writer.
On another level, Mahmoud cher-ishes his gift of reading and know-ing people well. At the moment he is studying for his MBA with a strong focus on Finance. I asked him what words he feels can best explain him. He said ‘”a vision for the future". His ambition makes him want to always look to the future and look for the best in tomorrow.
Family is the chief reason for the successful, wonderful personality that he has. He was raised in a home where no one settles for the norm. He says that in life if you please God, if you work for your country, make your leaders proud of you, and make your parents pleased, then you have heaven on earth.
What does Mahmoud dream of? He said that he will be a student forever. That he will always listen to and learn from life's experiences. He will always have a young heart and that this will keep him one step ahead. Achieving the vision of RERA and Dubai will be Mahmoud's dream that he is devoting his time and effort right now to accomplish. He is not ready to give up on this one yet.
Mahmoud al Burai
DU
BA
I RE
AL
TIM
ES
9
AFFILIATIONS
In recent months it has teamed up with the five core organisa-tions responsible for regulating real estate affairs around the
world and it is shortly to announce the launch of the Middle East and North Africa real Estate Society (ME-NARES). RERA is now part of the In-ternational Real estate federation (FIABCI), the World Association of Valuation Organisation (WAVO), the Royal Institute of Chartered Sur-veyors (RICS), the Asian Public Real estate Association (APREA), and the Urban Land Institute (ULI).
Its affiliation with ARELLO was confirmed during a meeting in the US recently when it became the only ARELLO member from the re-gion and it will spearhead initiatives such as the District 6 meeting, which with members from the UK, Austra-lia, Singapore, Hong Kong, South Af-rica and others, gather for a forum in Dubai later this year.
Announcing the move, Marwan
Going global
Dubai’s Real Estate Regulatory Agency (RERA) has joined the sector’s leading standard setter and global regulator the Association of Real Estate Law License Officials (ARELLO). The move effectively completes a multi-phase process of turning RERA into an international agency and a key player in the global regulation of the sector.
Bin Ghalita, Chief Executive Officer of RERA, said: "As a result of our part-nership with these international en-tities, we are able to announce the biggest umbrella regulatory agency operating in the region. This is only the beginning. We are also in the final stage of establishing MENARES to foster links between real estate experts, professionals and govern-ment agencies across the MENA region. RERA is at the heart of the actions which will provide a sound, effective and comprehensive regu-latory framework. It will underpin this by providing the necessary in-frastructure which will ensure the region acts in concert with regula-tory authorities to apply global best practices and set the benchmark for the region. We intend to progress from being the most transparent real estate market in MENA to becoming one of the most transparent and rig-orously regulated in the world."
RERA is on the board of FIABCI,
“We want to build the best standards for us. We also want to build a mutually beneficiary relationship with the rest of the regulatory authorities across the world,” said Mahmoud Hesham Al Burai, Director of the Real Estate Sector Development Department
DU
BA
I RE
AL
TIM
ES
10
which integrates it into the certified international real estate profession-als' community in addition to real estate courses offered by FIABIC University.
Association of Real Estate Law License Officials (ARELLO)Headquartered in Colorado, in the United States, ARELLO is without doubt the most comprehensive and influential association of real estate regulators across the world. ARELLO's chief members include government regulators from the US, Latin and South America, the Caribbean, Asia, Australia, Europe, Africa, and now with Dubai as its newest member, the Middle East. To complement its efforts to rally together all entities associated with real estate regulation, legislation and licensing, ARELLO additionally boasts members from the private sector including industry trade as-sociations, exam providers, educa-tion content providers and training institutions, as well as affiliate orga-nizations from real estate and allied fields. Because ARELLO's member-ship is very global, the organisation has divided its members into six districts to facilitate conferences and communication. Each District hosts an annual conference and ARELLO as the mother organisation hosts both a Mid-Year as well as an Annual Conference. The mission of ARELLO is to foster communication between government regulators, as well as the private sector, on a very global scale to create fruitful discussions, find solutions to chal-lenges, create licensing and legal reciprocity agreements that span international borders, and create uniform best practices for the in-dustry that are adopted on a global
scale.
Asian Public Real Estate Asso-ciation (APREA)APREA is the trade association and representative body for the Asian real estate sector. Its membership has expanded to include neigh-bouring regions, including the Gulf. APREA is a non-profit organisation focused on promoting real estate to foreign investors, creating a unified real estate industry that embraces best practices and the highest stan-dards of excellence, and act as the comprehensive voice of the real es-tate sector. APREA members enjoy access to the most up-to-date data and research, reports on various as-pects of real estate across the Asia Pacific region, networking oppor-tunities amongst industry experts, educational and training courses, as well as annual conferences.
Royal Institute of Chartered Surveyors (RICS)RICS' brand is the ‘mark of property professionalism worldwide’, and its mission is to train, license and cer-tify surveyors and valuers in the property profession by maintain-ing the highest possible standards of excellence. RICS members work in 146 countries and work in prop-erty, construction, land and envi-ronmental sectors. RICS provides research, data, consultative services and training to its members. RICS is frequently used as the benchmark for excellence in surveying and valuation, and its chief publication The Red Book is globally accepted as the defining guide to survey and valuation. Members enjoy access to RICS resource library and database of RICS' certified experts located around the world. RERA is strategi-
cally aligned with the MENEA chap-ter of RICS based in Dubai.
International Real Estate Soci-ety (IRES) / Middle East North Africa Real Estate Society (ME-NARES)
IRES is a federation of regional real estate societies including the American Real Estate Society, Eu-ropean Real Estate Society, African Real Estate Society, Latin American Real Estate Society, Asian Real Es-tate Society, and Pacific Rim Real Estate Society. Each society acts independently, but yet enjoys the international cooperation of each other through the umbrella organi-
sation, IRES. IRES aims to encourage communication and cooperation regarding real estate education and research, encourage further devel-opment of education and training globally, facilitate academic faculty exchanges and support research projects in real estate on an interna-tional level.
RERA is in the final stages of es-tablishing the Middle East North Af-rica Real Estate Society (MENARES) with the mission of rallying real estate academics and profession-als in both the public and private sector across the MENA region to foster communication, further aca-demic programmes and academic research.
RERA ties up with global association to become a key player in the international realty sector regulation
DU
BA
I RE
AL
TIM
ES
11
The total value of land trans-actions in Dubai during 29 May to 4 June peaked at Dh1.82 billion, of which sales
exceeded Dh1.20 billion. The total value of mortgages during the pe-riod was Dh623.12 m, according to the Land Department.
A total of 52 sale transactions were registered with the Depart-ment by the end of the week, the most valuable of which was a plot in Sheikh Zayed Road that was sold
Land transactions on 4 June
STATISTICS
for Dh88.897m. The next two most prominent sales saw a second plot in Emirates Hills Third acquired for the sum of Dh20m and another in Jumeirah First for Dh18m
The Emirates Hills Third area was the most active in terms of the week's sales, with some 10 transac-tions. Arabian Ranches followed it with eight sales.
During the period, Sheikh Zayed Road recorded the highest turnover by value, at Dh88.9m, followed by the
Emirates Hills Third area, Dh49.18m, and Palm Jumeirah area, Dh44.5m.
The biggest area sold was the 65,849 square feet in the Sheikh Zayed Road area, which went for Dh88.9m. A 52,366 square feet plot in the Mirdif area was acquired for Dh13m, while 38,068 square feet of Al Khabeesi was disposed of for Dh17.13m.
During the period under review 62 mortgages worth Dh417.66 m were registered, the most signifi-
cant of which was the Dh193.48m for an area at Sheikh Zayed Road. There was another for Dh40 m on an area in Jebal Ali
Apartments and villas in free-hold areas witnessed the registration of 683 sales transaction out of which 647 were for apartments for a total of Dh653.50m; and 36 for villas at a total sum of Dh88.48 m.
A total of 79 mortgages for Dh115.22m were registered on villas and apartments
Transactions on 11/06/2009
Property Type Transactions Value (Dh)
ExistingBuilding 8 63,138,638
Open Plot 1 697,000
Villas 19 43,531,075
A total of 52 sale transactions were registered with the Land Department by the end of the week ending 4 June, the most valuable of which was a plot in Sheikh Zayed Road that was sold for Dh88.897 million
The Emirates Hills Third area was the most active in terms of the week's sales, with some 10 transactions
DU
BA
I RE
AL
TIM
ES
12
STATISTICS
Transactions and sales during May 2009Information provided by Real Estate Sector Development, Data Section
Total Transaction for the month of May/2009 was Dh16b
Land Flat Villa
Total number of transaction.
814 1966 145
Total value (AED) 14,186 M 1,750 M 840 M
Total area (sq.ft) 17,692 thousand 2,053 thousand 439 thousand
Note: total transactions are represented by sales, mortgage, evaluation …list of services
Land sales transaction Total number of sales transactions within the districts was 590 with a to-• tal value of transactions at Dh12.690million for 13,208 thousand square feet.Jebel Ali had the highest number of sales transactions with 268 sales.• The highest value of sales was achieved by Jebel Ali district with • Dh6,899million.The highest area size was in Jebel Ali district with 7,239 thousand square • feet.
Total number of land sales transaction - Top 10
Total value of land sales transaction (Dh m) Top 10
Total number of land mortgage transactions was 205 with a total value • of transactions at Dh1,141million for 3,272 thousand square feet.Al Khawaneej First Districts had the highest number of mortgages with • 19 mortgage transactions.The highest value of mortgages was achieved by Sheikh Zayed Road • district with Dh299million.The highest area size was in Sheikh Zayed Road district with 368 • thousand square feet.
Land mortgage transactions
Total value of land mortgage transactions (Dh m) Top 10
DU
BA
I RE
AL
TIM
ES
13
Total No. Of
Sales
Value Total Area
Sales
590
12.690 M
13,208 thousand
Mortgage
205
1,141 M
3,272 thousand
Land Transaction Summary
Flat sales transactionsTotal number of sales transactions within the districts was 1,697 with a • total value of Dh1,454 for 1,725 thousands square feet.Warsan First had the highest number of sales with 535 sale • transactions.The highest value of sales was achieved by Dubai Marina district with • Dh386million.The highest area size was in Dubai Marina district with 467 thousand • square feet.
Total value of flat sales transaction (Dh m)
Flat mortgage transactions Total number of mortgage transactions of the districts was 122 with a • total value of transactions at Dh173million for 98,685 thousand square feet.Sheikh Zayed Road had the highest number of mortgages with 31 • mortgage transactions.The highest value of mortgages was achieved by Sheikh.Zayed Road • district with Dh49.538 thousand.The highest area size was in Motor City district with 81,000 thousand • square feet.
Total value of flat mortgages transaction (Dh thousands)
Villa sales transactionsTotal number of mortgage transactions of the districts was 93 with a • total value of Dh143million 331 thousand square feet.Emirates Hill 3rd had the highest number of sales which with 56 sales • transactions.The highest value of sales was achieved by Emirates Hill 3rd district with • Dh69million.The highest area size was in Emirates Hill 3rd district with 171 thousand • square feet.
Total value of villa sales transaction (Dh m)
Villa mortgage transactionsTotal number of villa mortgage transactions of the districts was 40 • with a total value of Dh143million for 331 thousand square feet.Emirates Hill 3rd had the highest number of mortgages with 20 • mortgage transactions.The highest value of mortgage was achieved by Dubai Marina district • with Dh77million.The highest area size was in Dubai Marina district with 208 thousands • square feet.
Total number of villa mortgages transaction
Total value of mortgage transactions (Dh million)
Flats transactions summary Total No. Of Sales Value Value/Sq.ft
Sales
1,697
1,454 M
1,725 thousand
Mortgage
122
173 M
99 M
Villa transactions summary Total No. Of Sales Value Value/Sq.ft
Sales
93
148 M
293 thousand
Mortgage 40 143 M 208 thousand
DU
BA
I RE
AL
TIM
ES
14
//MARKET TRENDS & ANALYSIS RESIDENTIAL
In early May, Landmark Advisory released its free Q209 Dubai & Abu Dhabi Residential Real Es-tate Report. The independent
report analyses multi-source trans-action data and other statistical trends, with a focus on master de-velopers.
“Public research helps the mar-ket by allowing all stakeholders to compare free information,” said Jesse Downs, Director of Research & Advisory Services at Landmark Advi-sory. She added that “access to mul-tiple sources improves objectivity.” For example, Ms. Downs explained, “since mortgage activity is low, cash buys constitute a significant portion of transactions. Therefore, to accu-rately assess price trends, it’s critical to have access to datasets contain-ing both transaction types.”
Buyers and renters are show-ing renewed willingness to pay for better units and better locations. “Falling prices create excellent op-portunities that boost demand. In April, we observed strong leasing and higher sales volumes,” said Ms. Downs.
In Dubai, Emaar is faring best in terms of demand and pricing. Ac-cording to Ms. Downs, “with a flight to quality clearly underway, end-user preferences are differentiating prices in favour of quality develop-ers like Emaar and preferred loca-tions like Dubai Marina.”
In Q109, Emaar master develop-
Residential report
website: http://www.landmark-advi-sory.com.
New online calculators to assist prospective buyersResponding to the changing needs of prospective home buyers and investors in the Middle East market, Landmark Properties has announced a set of new online calculators de-signed to help create scenarios that answer many questions arising today regarding real estate needs. Ques-tions include the mortgages they can afford, whether to rent or buy a home, and potential returns on in-vestment on properties available in the UAE.
Charles Neil, Chief Financial Of-ficer, Landmark Properties, explains how the new suite of tools – includ-ing a ‘Rent vs. Buying Calculator’ and ‘Buy-to-Let’ Calculator – empower clients with the tools to feel com-fortable with any property decision they may choose to make. “Our new
online calculators feature an easy-to-use system that give the tools di-rectly to the buyers to work out what kind of home they can afford based on their monthly budget and create various scenarios to decide whether now is the right time to invest.“
Having developed the software for the new calculators in-house and trained the company’s team of con-sultants extensively on how to use them, Neil continued, “Landmark Properties is investing in both the market and also our staff at a time that the industry is undergoing a corrective change. We want our clients to feel 100 per cent comfort-able with any purchase they transact with us, and we felt that by offering them these new media tools, they are in a stronger position to decide if the opportunity is in their best inter-est. Traditional real estate practices are not enough in this market - cli-ents need access to greater market intelligence and we have enabled our consultants to provide more informed and scientific insight to them.”
In addition to having a tradi-tional mortgage calculator publicly available on its website, Landmark Properties has also created a reverse version which enables users to in-put their own monthly budget and calculate what price of home they can afford based on mortgage pay-ments, terms and interest rates.
A second set of more complex online calculators are available through a meeting with any Proper-ty Consultant at Landmark Properties who underwent rigorous training on the use and outcomes of the calcula-tors. Prospective buyers are guided through the different calculators to understand the analysis on whether to rent or buy a home, as well as a forecasted return on investment (ROI) for a ‘buy-to-let’ flat or villa.
ments accounted for approximately two-thirds of sales and 57 per cent of new leases. More specifically, units developed directly by Emaar represented over half of sales and 39 per cent of new rentals. “Residents in Dubai see Emaar as a source of quality, not only for master-planned communities, but also for individual buildings,” said Ms. Downs.
Dubai Marina was the most pop-ular area among renters, capturing 30 per cent of all new annual leas-ing contracts. Emirates Living came in second, at 16 per cent. Isolating apartments, Dubai Marina scored 30 per cent of all new apartment contracts. For villas, Emirates Living dominated, with 40 per cent of new villa rentals, followed by Mirdiff and Jumeirah/Umm Sequim.
Landmark Advisory’s Q209 Dubai & Abu Dhabi Real Estate Report is available for download on their
Charles Neil
“Our new online calculators feature an easy-to-use system that give the tools directly to the buyers to work out what kind of home they can afford based on their monthly budget and create various scenarios to decide whether now is the right time to invest”
DU
BA
I RE
AL
TIM
ES
15
MARKET TRENDS & ANALYSIS // FINANCIAL ROUNDUP
“Current market condi-tions call for more at-tention to customer needs and expecta-
tions, which has become our primary concern as we enter into the ratio-nalisation phase following the start of the credit crunch. We have to be more flexible as Dubai streamlines its property business in anticipation of a steady industry rebound towards the end of the year. Times have changed and developers simply cannot prior-itise the project over the client any-more,” said Iseeb Rehman, Managing Director, Sherwoods Independent Property Consultants.
Recent developments such as the introduction of a domestic rental in-dex by the Real Estate Regulatory Agency (RERA) are already creating greater market stability and optimism. Sherwoods expects other trends such as increased developer mergers and acquisitions and further reductions in construction costs to expedite market recovery in the last two quarters of the year. Sherwoods intends to capitalise on the opportunities being opened up by the current transition period through several strategic operational initiatives as well as attractive offers for its clients.
HSBC Bank Middle East Limited, which had drastically cut back on mortgage lending due to the credit crunch, has raised its loan-to-value ratio for financing upto 75 per cent on completed villas, 70 per cent on
Adjusting payment schemes to fit market conditionsSherwoods will be providing more flexible services and packages to complement current industry initiatives to adjust pricing and payment strategies which better reflect market expectations and conditions
completed apartments and 50 per cent on off-plan units. Abdulfattah Sharaf, CEO of Personal Financial Services, HSBC Middle East, said the offer is mostly aimed at “end-users who have recently faced acute diffi-culties getting affordable mortgage finance.”
Dubai home financing will return once property values reach the me-dian level of affordability, according to Barmak Besharaty, Managing Di-rector of Almas Capital. “In terms of mortgage finance, banks are looking at values coming down and they don't want to be stuck with an asset that's declining in value,” he explained.
Besharaty defined the median national affordability level as the bar at which middle income fami-lies could get on the property lad-der: “When defining the median I'm saying that you have to take out the labourers, who are transient and the top-end luxury group. What is hap-pening is good for Dubai but very painful. A lot of developers were offering luxury lifestyles that were beyond what residents could afford, income was nowhere near property averages. Luxury developers will see their projects turned into affordable units, not because of government initiatives, but because this is the law of economics.”
“We all knew that there was go-ing to be a downturn in 2009/2010, but the thing that took everyone by
surprise was the speed with which it hit us,” said Stephen Ashford, Se-nior Director, Development at Om-niyat Properties. “Ultimately, it's a good thing, and it is forcing people to rethink business models. This is because the type of market that we had, which centred around off-plan sales, requires a large amount of debt. This is a market where every-thing is about cash flow. A developer can't complete if customers renege on cash flow. The problem in this market is there's no debt to be had, no financing available.”
But things have been changing quickly from one week to the next. Days after this discussion group met, a successful loan was established to finance the extension of a major shopping, commercial and residen-tial complex in the city.
Badr Al Islami, the Islamic Bank-ing Division of Mashreq, and Stan-dard Chartered Saadiq along with Abu Dhabi Islamic Bank PJSC, Dubai Islamic Bank, Emirates NBD and First Gulf Bank, Ajman Bank
and Arab African International Bank successfully arranged a $347 million Dual Currency Syndicated Is-lamic Finance Facility for Al Ghurair Centre LLC. Proceeds of the facility will be used to finance the expan-sion of Al Ghurair City.
Mubashar Khokhar, CEO of Badr Al Islami, praised the excellent coor-dination shown between the bank group and the client in a tight market to bring this deal to a successful clo-sure, highlighting the return of con-fidence to the market, despite an in-ternational financial crisis. The strong support by the banking community for this Islamic deal is based on pure merits and he would encourage oth-ers to tap into Islamic financing.
Steve Perry, the Regional Head of Syndications, Mena, Standard Chartered, also echoed these sen-timents and added that “The suc-cessful closure of this transaction is a clear demonstration that there is still credit appetite available for well-established and robust businesses operating with the UAE.”
DU
BA
I RE
AL
TIM
ES
16
COMMENTS
The Government of Dubai published Law No. (9) of 2009, amending some provi-sions of Law No. (13) of 2008
Regulating the Interim Real Estate Register (“Law No. (9) of 2009”) in the Official Gazette on 30th April 2009. The main purpose of Law No. (9) of 2009 is to amend Article 11 of Law No. (13) of 2008 Regulating the Inter-im Real Estate Register (“Law No. (13) of 2008”) in relation to a developer’s right to terminate a contract to sell a real estate unit in circumstances where the purchaser is in default of his obligations under the contract.
Background
Law No. (13) of 2008 was published on 31 August 2008. Article 11 of Law No. (13) of 2008 applies if a purchaser is in default of his obligations under the contract he entered with the developer in relation to the sale and purchase of a real estate unit.
Article 11(1) requires the purchaser to be given 30 days notice of the de-fault from the Land Department be-fore the developer can terminate the contract. Before Law No. (9) of 2009 was published, Article 11(2) stated that if a purchaser failed to remedy his breach within the 30-day notice period, the developer was entitled to cancel the contract and retain not more than 30 per cent of the amount paid by the purchaser towards the purchase price at the date of termi-nation. The developer was required to refund the remaining 70% to the purchaser.
Developers’ rights clarified under new Law No. (9) of 2009By Al Tamimi & Company
This Article 11(2) caused signifi-cant concern among developers who claimed that 30 per cent of the amount paid by a purchaser towards the purchase price would not be sufficient to compensate them for their loss caused by the purchaser’s breach. For example, if a purchaser had only paid a deposit of 5% or 10% of the purchase price at the time the contract was cancelled, an entitle-ment to retain 30% of that amount may not cover the developer’s out-of-pocket marketing and agent’s fees in relation to the sale of the unit. The developer would either have to bear the balance of its loss or take court action against the purchaser to recover the balance.
On 10 November 2008, the Land Department issued an Administrative
Circular to clarify Article 11, including the 30% rule under Article 11(2). The Administrative Circular stated that the developer could retain 30% of the contract’s value (the purchase price) plus 30% of the amount paid by the purchaser towards the pur-chase price which exceeded 30% of the contract’s value. The Admin-istrative Circular also stated that a developer who cancelled a contract could retain all money paid by the purchaser until the developer resold the property.
The Administrative Circular stated that Article 11 only applied to con-tracts executed after the enactment of Law No. (13) of 2008, and that ter-mination of any contract executed prior to enactment of Law No. (13) of 2008 is governed by the terms of the
contract.While the Administrative Circu-
lar was more beneficial to develop-ers than Article 11, the issuing of the Administrative Circular caused confusion among developers and purchasers, as it was not a formal amendment to Law No. (13) of 2008. This meant that a purchaser could challenge a developer’s reliance on the Administrative Circular in court.
Therefore, a law was required to be enacted to legally amend Article 11.
Amendments to Article 11 ef-fected by Law No. (9) of 2009Application of Article 11New Article 11(6) clarifies that Ar-ticle 11 does not apply to plot sale contracts where off-plan sales in the
DU
BA
I RE
AL
TIM
ES
17
plot have not commenced. In such cases, termination of the contract must be conducted in accordance with the terms of the contract.
Apart from these plot sale con-tracts, new Article 11(7) states that the provisions of Article 11 apply to all other contracts, regardless of whether they were entered before or after the law came into effect. Therefore, all real estate unit con-tract terminations from the date of publication of Law No. (9) of 2009 must be conducted in accordance with Article 11.
Purchaser’s default provisions
Law No. (9) of 2009 introduces a new
method for calculating how much a developer can retain under Article 11(2) if a purchaser defaults in his obligations under a contract for the sale and purchase of a real estate unit.
Under the amended Article 11(2), the amount which a developer can retain if a purchaser does not rem-edy his breach within the 30-day notice period given by the Land De-partment under Article 11(1) (which remains unchanged) depends on how much of the development has been constructed. The relevant categories of construction and the amounts which the developer can retain are:
(a) If the developer has completed not less than 80% of the devel-opment, the developer may re-tain all of the amounts paid by the purchaser and may request the purchaser to pay the unpaid amount of the purchase price stated in the contract. If the pur-chaser does not pay the remain-ing amount, the developer can request the sale of the real estate unit at public auction to obtain the remaining amount.
(b) If the developer has completed not less than 60% of the develop-ment, the developer may termi-nate the contract and retain not more than 40% of the purchase
price stated in the contract.(c) If construction of the develop-
ment has commenced but has not yet reached 60%, the devel-oper may terminate the contract and retain not more than 25% of the purchase price stated in the contract.
(d) If construction of the develop-ment has not yet commenced for reasons outside the developer’s control and without any neglect by the developer, the developer may terminate the contract and retain not more than 30% of the amount paid by the purchaser towards the purchase price. “Construction” in paragraphs (c)
and (d) above means that the devel-oper has taken possession of the de-velopment site and has commenced construction works in accordance with the designs authorised by the competent authorities.
In relation to the timeframe for re-funding any balance amount to the purchaser, new Article 11(4) states that the developer must refund this amount within the earlier of one year from the date of termination or 60 days from the date that the devel-oper resells the real estate unit. Cancellation of ProjectNew Article 11(5) gives the Real Es-tate Regulatory Agency (“RERA”) the power to cancel a real estate project. If this occurs, the developer must return all amounts collected from purchasers in accordance with the procedures stated in Law No. (8) of 2007 Concerning Guarantee Ac-counts of Real Estate Developments in the Emirate of Dubai.
This Article states that RERA must produce a report in relation to the cancellation, however it does not specify the criteria which RERA must apply when deciding whether to cancel a real estate project.
Conclusion
The amendments to Law No. (13) of 2008 contained in Law No. (9) of 2009 strike a balance between the rights of developers to recover their losses on termination of a contract following a purchaser’s default and the protection of purchasers, and we anticipate that the amendments will be well-received in the real es-tate sector.
DU
BA
I RE
AL
TIM
ES
18
COMMENTS
The real estate and construc-tion industry is currently fo-cusing on possible savings and managing efficiencies
– especially with, and through, facili-ties management. The continuous growth of facilities management was also the topic of FM Expo held in May. Sustainable planning, construc-tion and management are more im-portant than ever. Why these topics are relevant, is explained by Uwe Forgber, Conject’s Director in Dubai, a pioneer in providing software for the real estate and construction in-dustries.
“We have been assisting clients with facilities management for years. In Germany, it has been a classic top-ic for numerous years, while in Dubai it is still under developed. Previously project developers only had their sights set on the planning and con-struction phases, now the effects of this shortsightedness has hit them full force. Many buildings are still being realised – but who will be op-erating them and how?” comments Forgber. “For this reason a transfor-mation is underway. Especially in times of crisis it is now vital to learn from mistakes made in the past.”
conject developed a web-based software platform supporting all core processes of real estate projects and existing buildings - from con-struction planning and building to operating (Facilities Management), selling and marketing. With its FM-software the company concentrates on all relevant processes needed
Technology can save millions of dirhamsThe real estate and construction Industry is looking for best practices to face the future
to optimise the management of a building. For example when cities have to manage millions of square metres of office space, it is unimag-inable to do this without techni-cal support. The perfect example is Berlin, the capital of Germany, which saved more than 160 million Euros (Dh784 million) in three years by deploying the new technology. State owned areas could be used and managed more efficiently. Not only large office complexes were part of the optimisation plan, but also buildings divided into small sections, as well as specialised properties such as police and fire stations, schools and court houses were included. Restoration, main-tenance and service, as well as sup-
port and contract management are important factors for the conserva-tion of value in property and real estate.
Together with conject, private companies as well as public admin-istration can manage their proper-ties and real estate projects com-petently, based on clear and up to date information. Investments, for example for maintenance or energy savings in buildings, can thus be structured efficiently and controlled object by object.
Uwe Forgber believes what happened in Berlin can be easily achieved in the Middle East: “In a short time frame Berlin achieved the entire implementation of the sys-tem. Today Berlin is well positioned
commercially and also enforces strict cost management policies. With conject you choose a system displaying exactly those processes which real estate experts urgently need to carry out in their daily busi-ness; tracking of measures (property inspection, construction project control) or area management (con-tract management, concentrated use of space, CAD) and portfolio management (strategic area man-agement, benchmarking).”
What is needed in Germany is also in demand in Dubai and the entire region. Managers are able to reconstruct an exact evaluation of surface area utilisation: how much space is available and where? Which areas can be combined or even sold? Basically which areas can be brokered?
“The company makes all of this information available conveniently and concentrated into one plat-form”, states Dr. Uwe Forgber. He fur-ther adds: “All you need is an internet connection.”
Conject is an internationally operating
German software house, with over 25
years of experience providing business
process management solutions for the
real estate and construction industries.
Since its establishment, over 3,000 cor-
porate customers and 60,000 users
rely on it with an increasing number
of flagship projects for major corpora-
tions such as Dubai World Central, Mil-
lennium Development International
and Adidas Middle East.
Uwe Forgber
DU
BA
I RE
AL
TIM
ES
19
There has been much debate in recent weeks on whether the property market and the economy of Dubai have
bottomed out or even started a re-covery. This debate was fuelled by a report by HSBC indicating that banks have started to relax their lending terms; and buyers and sellers of prop-erty are reaching closer agreement on what represents a correct price. The number of property listings has decreased, suggesting that many potential sellers have decided to re-tain their property until the market improves and most of the distressed sale bargains have been taken up by those with cash or lucky enough to qualify for a mortgage. Transaction volumes remain very low though, and I believe it is still too early to say with any confidence that the worst is over. We have the traditionally quiet months of summer and Ramadan to come, and the general consensus is that we will only really see some movement in the market in the last quarter of this year or the first quar-ter of 2010.
Provided that the fundamentals of the Dubai and UAE economies remain strong, and the recent rise in the oil price is a positive sign, we should come through this crisis in-tact. It should even make us stronger and more competitive on the global scene as we learn from the lessons of the worst global economic melt-down since the Great Depression. My optimism in this is based on signs that in many areas of the economy we are getting back to basics and away from the unsustainable behav-iour that was so prevalent during the boom times.
The legal framework relating to real estate is gradually coming into place and this is a fundamental re-
Back to basicsBy Chris Dommett, CEO of John Charcol Dubai
quirement for sustainable future growth and investor confidence. Developers are also being forced to adopt the business models of more mature markets whereby they do not rely solely on off-plan sales and continuous stage payments from buyers to fund construction. Off-plan sales have completely dried up and the emphasis is moving to good quality, well located, finished prop-erties being purchased by people who intend to live in them. These buyers will typically require a mort-gage to buy the property and banks prefer this type of applicant to those looking purely to invest. Owner oc-
cupiers with a single property fare much better when seeking a mort-gage than the investor with mul-tiple properties in various stages of construction.
Banks are also getting back to basics in their lending, with conser-vative loan to value ratios and an emphasis on the borrower’s ability to repay the mortgage from his or her salary or business income. Gone is the assumption that the value of the property will continue to rise and security of the mortgage is now regarded as a distant second-ary source of repayment after the borrower’s regular income. A quiet-
er and more stable property market will mean borrowers will keep their mortgage for longer, and while this might deprive the banks of fee in-come in the short term, it compen-sates for this by offering longer term, sustainable interest revenue and a more established relationship with their customer.
The mortgage products them-selves have so far been basic vanilla offerings, whether in conventional or Islamic form, and this is likely to continue until banks have regained their confidence. A more stable mar-ket and a sounder legal infrastruc-ture should give them the opportu-nity to innovate on their products, meaning greater choice for the con-sumer, and a closer match between the products and the real needs of the borrowers. In the meantime however, what the market needs is the greater availability of basic mortgages to allow people living and working in Dubai to own their own home at an affordable rate. This gives them a longer term stake in the future of the city, with their property regarded primarily as a home.
For many in Dubai, the correc-tion in the property market and the subsequent return to basics has been very costly. They purchased at, or close to, the peak and are now saddled with negative equity and a mortgage they can scarcely afford. However, having decided to stick around and weather the storm, their best hope to recover their invest-ment while enjoying a good quality of life is for the market to stabilise and then grow in a well regulated and sustainable fashion. The best way for this to happen is for every-one involved to get back to basics and to remember these basic values for the future.
Banks are also getting back to basics in their lending, with conservative loan to value ratios and an emphasis on the borrower’s ability to repay the mortgage from his or her salary or business income
Chris Dommett,
DU
BA
I RE
AL
TIM
ES
20
COMMENTS
A brief scan of any recent newspaper, magazine, journal, blog or podcast will reveal that there is only
one subject on the minds of writers and journalists around the world: the current economic crisis. Type the word ‘economy’ into a google news search and you’ll quickly be directed to related searches such as ‘reces-sion’, ‘inflation’ and ‘unemployment’. Scholars, journalists, political pundits and bloggers have all been putting forth their opinions on the subject- a myriad of arguments and discussions giving explanations of how the crisis has been allowed to occur, who is to blame and what impact the crisis is having upon companies, industries and individuals.
Although the arguments as to what exact combination of factors precipitated the economic crisis will likely still be under discussion for years to come, the impact of these factors on the economy has been far less debatable. Lack of liquid-
The power of rental in an economic downturnBy Phil Burns, MD Aggreko, Middle East
ity, reduced cash flow and inabil-ity to finance are problems facing companies of all sizes and in all industries around the world. In ad-dition, many companies are facing general uncertainty in the market, with many projects being put on hold or cancelled. These factors are causing many companies to re-evaluate their purchasing policies and to look at the benefits of using rental providers, particularly when it comes to heavy equipment and machinery.
For many companies, the sudden lack of liquidity in the market initially came as something of a shock after years of readily available funding and loans. Now, almost a year into the economic crisis, financing of major projects is still a challenge for many companies, particularly those operating in regions which have been hardest hit by banking scan-dals. For those companies which re-quire large equipment, whether for projects or to run their production
facilities, this lack of available funds creates two fundamental problems. First, can the company justify a large down-payment which will further re-duce their capital base? And second, is the company able to find a bank which is willing to finance the large down-payment on terms which are not exorbitant?
The past year has revealed a large shift in the way that compa-nies manage their books; whereas in early 2008 many companies were happy to continue following the ad-vice of market economists urging them to leverage their assets wher-ever possible, the approach in 2009 is for cost-cutting and reduction of large capital expenditures wherever possible.
In order to do this, many compa-nies are choosing to rent rather than purchase equipment, especially when it comes to large equipment such as power stations. In recent years, with the economy booming and industry growing, one of the
most common reasons for a compa-ny choosing a power rentals energy solution has been timing. During an economic up-turn, the lead-time for the purchase of generation equip-ment can be anywhere up to two years, meaning that companies which need power urgently will find a rental option very attractive, due to the ‘fast-track’ aspect of rentals. However, the current financial tur-moil is encouraging companies to consider rental for different reasons, such as how to better utilise work-ing capital and to ensure that it is not tied up in large capital purchases for items such as power plants.
The advantages of renting power are also strong in an eco-nomic down-turn: renting power generation equipment eliminates the need for capital expenditure on equipment. It incurs no large down payments or interest costs and pre-serves borrowing capacity. In addi-tion, power rental guarantees fixed and regular payment schedules
DU
BA
I RE
AL
TIM
ES
21
over an agreed term with options to extend the rental period if required which improves cash flow and al-lows for more accurate budgeting.
When making the decision between purchasing and renting equipment, it is important for a company to evaluate the decision in the light of the many hidden costs that are incurred when equipment is purchased; insurance is one item which is often overlooked by com-panies seeking to purchase large equipment. In addition, for equip-ment such as generators, there are many spare parts and ancillary items that need to be purchased regularly to ensure that the equip-ment is able to operate. Not only do items such as spare parts need to be purchased, but they also require storage space to house them. With a rental solution, all spares and an-cillary items are the provision of the rental provider, enabling the cus-tomer to budget more effectively.
Refuelling is an additional cost which is often forgotten when the decision is made to buy equipment. Refuelling one generator is a time-consuming task; a project site with 30 to 40 generators on it will require the contractor to purchase trucks and staff simply a for refuelling. Therefore, the use of rental special-ist who includes refuelling in the rental package can be an attractive option.
Another factor in the rental ver-sus purchase argument that be-comes even more prominent in an economic downturn is the ele-ment of human capital. All major equipment purchases will require a company to staff the new equip-ment, either by allocating existing staff to the project, or by hiring new employees. If a company does not have employees available with the technical knowledge to run the equipment they may be forced to hire new staff, however, hiring freez-es across the board are often the norm in an economic downturn. This means that the use of a com-pany which provides turn-key rental services can be invaluable to a com-pany which requires equipment but simply doesn’t have the skilled and experienced staff to operate it.
At times, it is tempting for com-
The advantages of renting power are also strong in an economic downturn: renting power generation equipment eliminates the need for capital expenditure on equipment
panies trying to save money to min-imise the number of staff they re-quire for operating the equipment. However, this short-term solution often leads to greater problems in the long-run. Heavy equipment such as generators require regular servicing and maintenance in or-der ensure that they are operating at peak efficiency; a poorly main-tained generator will have greater fuel consumption, higher emissions and may even break down entirely, negating any cost benefits that may have come from reducing the number of technicians working on a project site. Through a rental pro-vider, all service and maintenance is included in the rental package, en-suring that the equipment is always running at peak efficiency.
Projecting the power demand of projects also becomes a problem for companies in a financial down-turn. Purchased generators are often ei-ther under or over-utilised since the power need on a construction site tends to follow a specific pattern of ramping up and then falling away, meaning that a contractor who pur-chases enough equipment to meet peak demand on site will find that the generators are underutilised and
burn fuel less efficiently for most of the project.
The answer to why rental power is an attractive service to construc-tion companies lies in one word: flexibility. Renting power generation equipment allows the contractor to increase or decrease their capacity depending on the demand of their specific projects. Equipment capac-ity can be increased as the power demand on a project increases, en-suring that equipment is always run-ning at maximum efficiency.
The past year has seen much construction work come to a grind-ing halt as projects are re-evaluated for viability. Although most partially completed projects appear to be go-ing ahead, the number of projects in the design phases which have been put on hold is staggering. One of the greatest advantages of the rental option is the cushioning effect this has on companies which are uncer-tain about the long-term future of their projects. By renting equipment, companies can ensure that they will not be left with equipment which will sit unutilised; if a company is told that one of its projects has been put on hold, the financial damage incurred by having purchased large
amounts of heavy equipment can be a major blow for a company with-out large cash reserves. Ultimately, renting equipment means that be-cause ownership lies with the rental company, all risks do as well.
Analysts are divided as to their opinions of when the economic climate will begin to improve, with some saying late 2009 and others pointing to early 2011 before any real recovery will occur. However, it seems unavoidable that there will be some fundamental changes to the way that people think about in-vestment and financing, and to how companies handle their asset man-agement. Cash reserves may very well regain their old popularity; cer-tainly, it seems unlikely that compa-nies will be willing to leverage their assets to the degree that has been the norm in the past decade.
With a greater emphasis on keep-ing capital available and with rental providing benefits such as lowered capital expenditure, flexibility and risk management, the option of renting as opposed to purchasing
equipment will likely remain an attractive one even as the world economy eventually strengthens and the world enters another posi-tive growth period. And although the question, ‘Is it better to buy or to rent’, will continue to be asked by companies contemplating large equipment purchases, many com-panies will likely find themselves deciding that during this period of economic uncertainty, ownership may not be worth the hassle.
is an attractive service to construc-tion companies lies in one word: flexibility. Renting power generation equipment allows the contractor to increase or decrease their capacity depending on the demand of their specific projects. Equipment capac-ity can be increased as the power demand on a project increases, en-suring that equipment is always run-
The past year has seen much construction work come to a grind-ing halt as projects are re-evaluated for viability. Although most partially
DU
BA
I RE
AL
TIM
ES
22
Construction industry showing signs of defianceThe UAE construction industry
is showing signs of defiance in the wake of the global eco-
nomic crisis, with over 200 projects to be completed in the first half of this year, more than the total for the whole of 2008. Research by indus-try analysts Proleads has revealed that only 2.4 per cent of 1,289 UAE construction projects that were un-der way at the start of the year have been cancelled.
Approximately 135 projects were on schedule to be completed in the first quarter of 2009, with another 70 to be finished in the second quarter, compared with a total of 184 overall last year.
The figures were highlighted re-cently as development plans were released for the Big 5, trade show for the construction industry and associated suppliers, when it takes place for the 30th year in Dubai in November. A new purpose-built temporary structure and outdoor exhibit area is being constructed at the Dubai World Trade Centre to ac-commodate the Big 5 PMV, the spe-cialised focal point of the exhibition for manufacturers and suppliers of construction plant, machinery, ve-hicles and equipment.
Simon Mellor, Vice-President, Construction at Dmg World Media, organisers of the Big 5, said: “This
investment by DWTC underlines the confidence they share with us in the ability of the region’s construction industry as a whole to survive the current economic downturn and prosper in the longer term.”
Peter Sutton, Vice President – Venues at DWTC said: “Building on the success of the decision to relo-cate the Big 5 PMV to Dubai World Trade Centre last year, which led to a 29 per cent increase in visitors over 2007, Car Park C site is undergoing significant re-development. The en-tire site is being leveled and surfaced with a grid network laid throughout for electricals and drainage and the PMV Indoor Area will be a fully functional purpose built temporary structure.”
Despite negative effects of the recession on the construction sector, companies like Al Nawi Group, UAE representatives of Finnish manufac-turers Scanclimber, see a silver lining for the construction equipment busi-ness and the industry as a whole.
“The construction industry is witnessing a slowdown at the mo-ment, but I believe that if the right measures are taken by governments, things will start picking up again by the end of the year,” said Aamer Hammoudi, General Manager, Al Nawi Group, which sells Scanclimber climbing work platforms, hoists and
access platforms in the Middle East.Hammoudi said the economic
crisis has led to the company focus-ing its resources on serving its exist-ing top five customers who gener-ate 80 per cent of sales in the Middle East.
“We know these customers have projects that will take us through the downturn. At the same time, we are streamlining our operations to cut all unnecessary overheads. We are carefully applying our resources into areas that are productive and gener-ating business. Now is not the right time to expand. However, there will be a time again, when expansionary strategies need to be taken in order to secure market share. It is hard to predict when we are in clear waters but I believe things will start looking better by the end of the year if the right measures are taken.”
Nick Webb, Director of Stream-line Marketing Group, organisers of the Big 5 PMV, said: “With several
construction projects still under way and a huge amount of development to be reinstated when the current climate eases, it is very clear that this region needs a plant, machinery and vehicles show. While construction activity may have slowed across the region, Dubai remains the gateway to the Middle East and with the new initiatives to give the exhibition a purpose built home, we’re confident of delivering an exceptional event this year that will deliver a significant return on investment for exhibitors in difficult times.”
Humaid Salem, General Manager of the Contractors’ Association said: “This is an important event for the construction industry, as it provides a dedicated arena for manufactur-ers and suppliers of plant, machinery and vehicles to meet construction professionals from across the region and beyond. The event brings the in-dustry together, which is particularly important at this time.”
The Big 5 PMVwill be staged at the Dubai International Convention and Exhibi-tion Centre alongside the Big 5, from 23-26 November, 2009.
COMMENTS
DU
BA
I RE
AL
TIM
ES
23
“It was the best of times and it was the worst of times, it was the age of wisdom, it was the age of foolish-
ness….” Charles Dickens could not have been more accurate in the Tale of Two Cities back in 1859. Indeed he could have been writing about the present financial crisis that has grabbed the world’s attention at ev-ery level or, even more specifically, he could have even been writing about the real estate sector here in UAE and the wider region.
No doubt the challenges that the property developers are facing now are cyclical, and, as we move through 2009 things will begin to
Why PR makes sense … right now!By Louay Al Samarrai
to hear right now are ideas of how to spend their money or about market-ing advice that requires an invest-ment of scarce financial resources, but the simple truth is, this advice could deliver the best possible return on their investment than the typical forms of marketing that the sector as a whole has been employing almost to the detriment of all the others.
What am I talking about I hear you all shout!
Well I am talking about public relations – yes, the practice of talk-ing with your key target audiences – through consistent, managed and relevant communications, and here is the secret…yes lean in close…
ment or projects as well as being the best tool to manage the perceptions that are being built up in the market right now about your company, your sector and the future.
How does the average property developer - who is still standing, still doing business and who still has a very realistic and measured perspec-tive of the real estate markets here in the UAE and across the region, keep on communicating?
How are they going to get the message out that, while the best of times may be over for some, it is not the worst of times for those that had solid business plans and did not sell too much ‘off plan’ to be stuck be-tween a rock (the speculators) and a hard place (the bank) now?
How are these property develop-ers going to tell key audiences that they have been prudent, that they are solid, that letting people go is a sad but necessary reaction to the market dynamics and that this has been done as humanely as possible, that they have researched and are studying the market and what this research is telling them..?
Property developers are a re-
feel and look more positive. However with the recent news of property prices being affected downwards and jobs being trimmed at several of the leading developers the one thing is certain – there will be good news and bad news and it is always going to be the key to manage this news consistently, coherently and most importantly of all - effectively.
What is also true is that the last thing that property developers want
because I am about to tell you why public relations could be your best kept secret weapon: Not only is pub-lic relations effective when properly practised, but it delivers a real return on your investment and, for the en-tire year, costs the same as taking two full colour pages of any of the local daily newspapers.
What it also delivers is 10 times the investment in coverage and publicity for your company, develop-
sourceful bunch so they will have a number of ideas. There are a few that want to go outside of the box, who don’t want the perception to be that they have run for cover! These are the ones that have plans! These are the ones with foresight to see that, when the worst of times is over, they can be well positioned ahead of the curve.
We are consulting with a select few of these people and they are recognising a very real and mea-surable return on their investment. When we talk about PR delivering this very attractive ROI what we are talking about is strategic, managed public relations.
Let us all hope that things change and that we can all then say - “It was the best of times and we have man-aged our messaging and commu-nicated through the worst of times and now….it is now the age of wis-dom, the age of foolishness is past us….” – Sorry Mr Dickens!
The writer is one of the Managing Direc-tors of Active Public Relations and Mar-keting Communications Consultancy.
No doubt the challenges that the property developers are facing now are cyclical, and, as we move through 2009 things will begin to feel and look more positive
Louay Al Samarrai
DU
BA
I RE
AL
TIM
ES
24
The analyses expressed in this article are personal observations on the Dubai Real Estate market and should not be considered as a bench mark to make decisions. The author does not take responsibility and is not liable and/or legally responsible for any decision taken by any individuals and/or institutions based on the observations in this article.
2Comparative Market Valuations
-5.0010.0015.0020.0025.0030.0035.0040.00
5 BR familyVilla
3 Br + maids 3 Br + maids 3 Br + maids 2 BR 4 BR 5-6 BRsignature villa
GreensCommunity
West
DowntownBurj
JumeriahBeach
Residences
Springs Springs JumeriahIslands
EmiratesHills
Last Years Peak AED (in Millions)Rock Bottom AED (in Millions)Current Prices AED (in Millions)
Even with the sharp drop in rental values and a large supply of residential units being delivered in Motor City, Discovery Garden, Jumeirah Lake Towers and Dubai Land (Victory Heights villa�s), most developed area�s in Dubai like the Marina and JBR still give you an amazing 7-9% rental yield (maybe even 10% in certain cases) if you were to buy today or if you own something that was bought on realistic values of 2006 or early 2007. Compared to the rest of the world, it�s still one the top locations as far as rental yields are concerned. Approximate Rental Yield�s
Area Type Value Now Expected Rental Yield
Expected Rental Yield
AED AED %Greens Community West 5 BR family Villa 3,350,000.00 250,000.00 7%
Downtown Burj 3 Br + maids 3,200,000.00 250,000.00 8% Jumeirah Beach Residences 3 Br + maids 1,750,000.00 155,000.00 9%
Springs 3 Br + maids 1,850,000.00 135,000.00 7% Springs 2 BR 1,150,000.00 100,000.00 9%
Jumeirah Islands 4 BR 4,300,000.00 390,000.00 9%
Secondly, a few banks have started mortgage lending again. We�ve received an email from a mortgage broker at Noor Islamic Back saying that they have now started lending up to 85% of the assessed value of the property. Likewise, a couple of foreign banks have also started accepting mortgage applications. Although they are offering lower LTV�s but it�s a start.
COMMENTS
This is a brief outlook/sum-mary of what we’ve expe-rienced in the Dubai real estate market over the
past four to six weeks. The current situation is loved by all who haven’t bought in Dubai as yet and of course hated by everyone who bought in 2nd/3rd quarter 2008.
Although the ‘crash’ of real estate prices in Dubai was eminent due to the global financial conditions, there were other local factors that were di-rectly and/or indirectly related to the market conditions here. The financial crisis brought a halt to inter bank lending and consumer mortgage loans. Stocks crashed globally. Lever-aged institutions took the big hits. Sales (of everything) dropped, that brought about layoffs in hefty num-bers in many small, large and even multinational companies. Anyone (especially speculators) with liquidity pulled out of the markets and sat on the sidelines, waiting for the market to hit rock bottom before they act.
Everyone knows times and cir-cumstances never remain the same. What we all experienced in Dubai for the last few months was a real roller coaster ride. And anyone who’s been a roller coaster knows that the thrill begins when you are on your way up the track but the real test of nerves is when it’s on its way down…the heart
Time to take the plungeBy Ali Haider Zaidi, CEO of Centurion Real Estate
stops or beats faster - depending on how one reacts to the freefall.
Similar has been the case for Dubai. I’d be a multi millionaire if I were to get a dollar every time someone argued that the Dubai bubble is about to burst, and even a billionaire if I got a dollar to hear the opposite, that prices are not going to drop so soon and this is just the start of what is coming.
Reality is that what goes up must come down and vice versa…although going back up is usually at a measured and more realistic pace. In my opinion, the second part of the equation i.e. the going up part is around the corner. I say this because of what we, as a company, have ex-perienced in the last 3-4 weeks. To give you a couple of examples, we had a family villa listed in Green Community West for Dh3.2 million but we actually ended up selling it for Dh3.4 million. I have just heard that another family villa, built on a slightly smaller plot than the one we sold went last week for Dh3.35 million. Keep in mind that Family Villa’s in GCW had bottomed out at Dh2.8m just a few weeks ago; there-fore, Dh3.4 is a jump of 15 per cent to 20 per cent but still an excellent buy at Dh579 per square foot.
Similarly, Burj Dubai area is now finally taking shape with the foun-
tains entertaining all and the roads opening up. There has been a good amount of activity in this neighbour-hood as well. The mere fact we’ve had some sellers actually de-listing their assets, sticking to their ask-ing price or in a couple of instances even increasing their prices by five per cent or more is an encouraging sign.
Secondly, a few banks have start-ed mortgage lending again. We’ve received an email from a mortgage broker at Noor Islamic Back saying that they have now started lending up to 85 per cent of the assessed value of the property. Likewise, a couple of foreign banks have also started accepting mortgage appli-cations. Although they are offering lower LTV’s it’s a start. Thirdly and
has been an unexpected increase in activity. All the agents have 3-4 showings lined up every day. How many of these showings will actu-ally turn into transactions remains to be seen but comparing to the ac-tivity levels we saw in Jan & Feb, it’s up by extraordinary levels. So if you are a potential buyer, I say this is the time to take a decision and take the plunge while prices are still attrac-tive. For the sellers, well, accept the first realistic offer that you get and use the proceeds to upgrade while you still can. In the words of Warren Buffet, “The investor of today does not profit from yesterday’s growth”
The analyses expressed in this ar-ticle are personal observations on the Dubai Real Estate market.
Comparative Market Valuations
-5.00
10.0015.0020.0025.0030.0035.0040.00
5 BR familyVilla
3 Br + maids 3 Br + maids 3 Br + maids 2 BR 4 BR 5-6 BRsignature villa
GreensCommunity
West
DowntownBurj
JumeriahBeach
Residences
Springs Springs JumeriahIslands
EmiratesHills
Last Years Peak AED (in Millions)
Rock Bottom AED (in Millions)
Current Prices AED (in Millions)
most importantly, prices are now at fabulously attractive levels. I don’t in any way imagine that this slow surge will turn into a tidal wave and the at prices will jump 30 per cent a month like they used to in the past, but I strongly believe that the slow swell will help the market head north, but at a rational rate. Lastly, for us as a company, there
Comparative Market Valuations
Approximate Rental Yields
DU
BA
I RE
AL
TIM
ES
25
Ongoing corrective mea-sures have transformed the UAE’s property trade into an end-user market,
observes The Specialists, a com-plete real estate solutions provider with over 20 years of experience in the Gulf region. It notes that more real estate developers and owners are shifting their sales strategies away from speculators and towards end-users, focusing on meeting the needs of prospective owners.
A noteworthy rise in foreign investments in recent months is further sustaining the momentum being enjoyed by the industry, with improved lending conditions across domestic banks adding to the posi-tive trend. Another welcome de-velopment is the resilience of the industrial property segment, with Dubai alone still significantly bene-fitting from its reported 50 per cent increase in industrial rents in 2008.
“Just recently the UAE Minister of Economy stated that the coun-try has managed to overcome the crucial stages of the financial crisis, and that significant economic gains could be expected in the second half of this year. This has greatly stimulated market-correcting activi-ties which are raising the appeal of properties and moving emphasis towards end-users” said Dr. Sobhi Suleiman Agha, General Manager, The Specialists.
Meanwhile, banks across the Emirates are gradually increasing
Property sector gaining momentum amidst steady market correctionThe Specialists observes the country’s transformation into an end-user market
lending and mortgage activities, although they are exercising more caution in the form of rigorous background checks. Also, the UAE Central Bank and the Ministry of Finance have been implementing several measures to improve liquidi-ty in the financial sector and restore market confidence. A senior official of the Central Bank has affirmed that they will concentrate on liquid-ity and asset quality towards 2010.
The banking authority will spe-cifically monitor the effects of the property trade on the financial sec-tor.
“Today’s evolving markets have Dr. Sobhi Suleiman Agha
actually opened several oppor-tunities to foresighted property firms. The key is for developers and owners to keep close track of trends and corrections and create tailored packages for both their ex-isting and prospective clients. The UAE remains one of the world’s top property destinations, so banks will definitely continue to extend mort-gage facilities to investors, albeit with a little more caution. A little creativity and patience can still lead to highly-profitable returns for real estate businesses,” concluded Agha.
The Specialists itself constantly monitors local and regional trends to make sure that it develops and delivers high-quality and timely services. The company delivers a comprehensive range of services to cover all types of property transac-tions within both the commercial and residential markets, for lease and for sale. It currently conducts its operations in the UAE, Jordan, Lebanon and Syria.
The banking authority will specifically monitor the effects of the property trade on the financial sector
COMMENTS
DU
BA
I RE
AL
TIM
ES
27
The global business market has reportedly been expe-riencing a growing number of privately held companies
making the shift to being publicly traded entities. The new trend, which has been explained by analysts and financial experts as a quick fix solu-tion to ride out the current financial crisis, has enticed more than a hand-ful of business entities in the Middle East region to follow suit. The shift to public eye however poses many challenges for organisations whose growth and operations depend on the number of projects they under-take. One of these challenges would include the need to report on cur-rent financial standings. Despite the region’s adoption of a streamlined set of guidelines in declaring finan-cial standings, these newly shifted companies might fall short, or expe-rience difficulties, in trying to com-ply with this requirement.
The stock value of a project-driven organisation would usually depend on three key elements; the number of projects they already have; the efficiency in handling these projects and the projects they expect to acquire in the future. The volume of projects that an organisa-tion can undertake also depends on a number of factors including but not limited to being competitive, reputation, track record, experience, size, financial capacity, capability and business development efforts. These factors, in turn, are heavily depen-dent on the overall market growth, number of projects currently being offered and market stability.
The ability to acquire new proj-ects and maintain a healthy pipeline
Shifting Gears: The challenges of publicly-traded, project-driven organisationsBy Bassam Al Samman, PMP, PSP, EVP/CEO & Founder of Collaboration, Management & Control Solutions (CMCS)
of future projects is a challenge that these project-driven organisations currently face which also poses to have great impact on its stock value. Usually, organisations address this by adopting initiatives that will focus on increasing their market share, ex-panding into newer regions, winning repeated clients and forging new strategic partnerships.
Nevertheless, a greater challenge for these organisations lies within projects that must be delivered with-in a fixed budget and a set deadline. One of the tools currently being used to help find out if a project goes over the budget or behind schedule is Earned Value Management System, which proves to be very helpful in providing essential information and facts on project current status and expected future progress trends. However, the Middle East region still has to catch up with this trend and utilise this method to their advan-tage.
For instance, recent surveys in the information technology (IT) sec-tor have shown that less than 17 per cent of projects undertaken are com-pleted on time and on budget. It also highlighted that projects are exceed-ing their planned budgets by almost 90 per cent and their schedule by 120 per cent. Consequently, 51 per cent of all IT projects are over budget and 30 per cent of them have been can-celled.
Other sectors are no better, with surveys showing that oil and gas proj-ects have schedule overruns of 82 per cent resulting in 85,000 less qualified workers in 2009 and the foreseen difficulties in completing these proj-ects.
These figures also answer key in-vestment related queries that include promised benefits, better returns and future stock value.
The reasons why projects are bur-dened with such unfavourable indi-cators are actually reflective of an or-
ganisation’s undertaking of projects without proper assessment of risks associated with delivering those proj-ects. These projects can be exposed to many threats, including wrong budgeting and budget forecasting, improper allocation of expenses, im-proper revenue recognition during implementation, improper quantifi-cation of project benefits, improper project management practices, risks, issues, improper control of changes and failing to deliver what is expect-ed from them when they were initi-ated.
The recent scandals of Enron, WorldCom, Philip Holtzman and oth-ers are examples of how apparently successful project-driven organisa-tions have ceased to exist. These cases have led the US Government to require publicly traded companies to comply with what is known as the Sarbanes-Oxley (SOX) law. This law requires organisations to adopt prac-tices that will require effective perfor-mance control, rapid performance reporting, maintaining updated proj-ect records and documenting proj-ect processes.
The Middle East region bears no difference from its global counter-parts as an unprecedented number of projects undertaken have failed to adopt these preventive measures, and would most likely lead to misrep-resenting the true value of a project-driven organisation.
Although not too alarmingly late, a sound solution in the offing is the move to adopt these proven prac-tices and help minimise the threats of project delays and overspending, and consequently maximising the opportunities they bring.
Bassam Al Samman
COMMENTS
DU
BA
I RE
AL
TIM
ES
28
Looking down the wrong end of the telescope?In recent years, we witnessed Dubai emerge as the world’s most talked about, mind-blowing real estate market in the world. However as the market matures, consumer perception evolves and selling becomes more of an art, what skills does an agent need now to attract that sought after client? Cecilia Reinaldo, Managing Director of Fine & Country, explains a few simple rules about gaining a more profound understanding of the industry.
If there was anywhere in the world to sell property right now, you could not be better placed than Dubai. If you don’t agree
with the statement I would argue you are looking down the wrong end of the telescope and don’t yet see the bigger picture.
Naturally, our job is not easy, and most agents will have a stock of an-swers as to why success isn’t always possible. However for you to see the bigger picture as an agent or consul-tant one of the most important steps is making sure all of your processes are in place.
First and foremost, know what you’re talking about. It sounds simple, but it’s amazing how many agents don’t bother to learn about their trade, or keep up with news and trends. Your clients and poten-tial clients have worked hard for their money and whilst they may have a wider belief in the Dubai property market generally, they need the confidence of knowing that you, the person they are dealing with, really understands your business.
Take responsibility to get busy ‘working on you’ as opposed to ‘working on the market’ –knowledge is power, after all. Challenge yourself to dedicate at least two hours each week to reading a local business pa-per and a property magazine from cover to cover. Within a month you will have expanded your knowledge and I can confidently predict you will know more about the Dubai, UAE, Middle East and global property markets than 95 per cent of other practitioners ‘playing at it’. That first step will quickly translate into you having a more rounded knowledge, clients will trust you, and that trust will translate into them buying prop-erty through you.
Good sales consultants under-stand that their manager wants a weekly helping of ‘fish and chips’ – rather than inaccurate, unquantifi-able, speculative, under the surface ‘whale’ deals. In other words, deliver regularly and realistically and never
over-promise. Get real with the hard facts and give your boss what to expect in commission income for the week. Sure enough it is unpre-dictable knowing what will happen any day, particularly in this market, but savvy consultants should have a constant stream of quality business as an effect of implementing good practice principles.
There’s no reason why you shouldn’t go one stage further. First thing every Sunday morning, pres-ent your ‘production pledge’ for the week to your boss - break it down into activities, like the number of meetings you have scheduled. Not only have you made a commitment to deliver, but now your boss has a better understanding of how you do business and although this ‘winning formula’ will not always translate into sales, most weeks you’re likely to succeed because you documented your goals with focus.
Are you the type of person who is running around ‘day and night’ or are you ‘busy but controlled’? It is easy to lose control and become a victim to one of the biggest poten-tial drawbacks of doing business in this part of the world - timekeeping, or more to the point, the lack of it. In an environment where running late to an appointment is customary and you grow used to responses of ‘I will be there in 15 minutes’. Smart agents know that time is money and will initiate a ‘won’t happen again’ procedure. Think about it, ‘I don’t care who you are, if you are late for the meeting, there is no meeting, if you cannot respect my time, your chance has gone to someone else’. Powerful, but with limited hours in a day, act big and do not be afraid - wait for no one, there will always be another deal round the corner; oth-erwise, you may find you’re waiting forever.
Having secured a meeting, its success will come down to prepa-ration. That means identifying the purpose of the meeting and what chain of events do you need to
happen to achieve the desired out-come. Remember to think in terms of your language and questioning technique, in other words take the conversation to where you want it to be. Surely there is no better way than to have prepared an agenda for the meeting. Busy people want so-
lutions presented with researched, accurate information so that they are able to make balanced and quick decisions. Even super wealthy clients don’t expect to get it right every time (because no one can) but their decisions are founded on a ‘gut feel-ing’ about the people they are deal-ing with, who in turn demonstrate superior knowledge by going that extra mile. So get organised, focus, deliver and control that next meet-ing like no other before.
Successful people know where they want to be and plan with a de-termination to get there. So if you’re on ‘the focus wagon’, how many times a year have you committed to ringing your top 10 customers, prospects, developers, fellow indus-try professionals? Make sure from here on in, it’s at least once a month. Because if you don’t, someone else will.
Cecilia Reinaldo
COMMENTS
DU
BA
I RE
AL
TIM
ES
29
Self-funded real estate companies more likely to hurdle financial crisisStudy expects real estate sector to recover within the next six to eight months
A study conducted by Avanti Holding, a self-funded in-ternational property devel-
opment and investment company, affirms that companies adopting self-funding, particularly those in-volved in the property markets, are less affected by the ongoing global economic crisis. Such organisations are more capable of venturing into projects with potentially high re-turns and rapidly adjusting to fluc-tuating industry conditions.
“What continues to make com-panies like Avanti buoyant, despite the credit crunch, is the ability to fund itself rather than rely on banks or other companies. This robust financial foundation allows com-panies to venture into more proj-ects, particularly in the uniquely vibrant Dubai market. We see huge demand in Dubai despite a signifi-cant percentage of construction projects being postponed, mean-ing that in this part of the world it’s more of apprehension rather than a poor market. I believe that this will be corrected over a period of six to eight months by then, we can expect a slow and steady process of recovery,” said Dr. Issam Daoud, Chairman, Avanti Holding.
According to the study, the sec-ond half of 2009 would be a good
time to buy property in Dubai, as it expects prices to increase signifi-cantly before the end of next sum-mer. “For cash-rich investors, the latter half of this year would be the best time to buy property in Dubai, since we expect the prices of prop-erty to shoot up by around Novem-ber 2009,” said Daoud
“Looking ahead, we are con-fident of at least a five per cent economic growth for 2010, due to the bottoming out of the market, a growing number of customers
started to show interest to invest in our projects and others. We will continue to actively engage with our clients and make sure that we positively act on their opinions and feelings. This atmosphere of inter-action and trust is, and will always be, above all the core of our suc-cessful partnerships,” he added.
Avanti Holding is a part of Issam Daoud Group of Companies that manages various interests, includ-ing real estate development and investment companies, real estate
brokerage firms, management consultancies, oil and gas compa-nies, and diverse businesses like construction materials, and jewel-lery trading. It is renowned for its international standards and quality of service, and its emphasis on en-riching the lives of its clients. The property specialist is also compli-ant with the requirements and mandates of Dubai’s Real Estate Regulatory Authority, thus making it a key player in Dubai’s property market.
Dr. Issam Daoud
“For cash-rich investors, the latter half of this year would be the best time to buy property in Dubai, since we expect the prices of property to shoot up by around November 2009”
COMMENTS
DU
BA
I RE
AL
TIM
ES
31
The Al Yasat grand ball-room was filled with over 120 people all eager to watch four properties go
under the hammer. In charge of the event was Raymond Kuceli, Chief Executive Officer of Madania Real Estate and a licensed auction-eer with over 20 years' industry experience.
The four properties auctioned included three villas in Arabian Ranches and one penthouse apartment in Jumeirah Beach Res-idence. Although bidders did not reach the reserve price for any of the properties, the auction event marked a new step in the matur-ing of the Dubai market. Buyer sentiment during the evening confirmed recent analysts' reports of a current divergence in buyer and seller expectations around the true value for property in the emirate.
The first property, a villa in Palm-era in Arabian Ranches, opened at Dh2 million and was contested between two bidders up to Dh2.3 million before being passed in by the auctioneer for private nego-tiations, as the final bid did not reach the reserve price. The sec-ond property, a villa in Al Mahra in Arabian Ranches, opened at Dh2 million and was passed in by the auctioneer at Dh3.5 million. The third and fourth properties, a penthouse in Jumeirah Beach
Going, going, gone - maybe next timeBy Linda Benbow
Residences and another villa in Al Mahra did not find an opening bid. The properties will now pass into the third phase of the process where interested parties negoti-ate privately with the sellers.
What made you think of auction-ing these properties? Madania aims to bring innovative and creative solutions to market problems. In the case of the prop-erty auction programme, we can see that the lack of clarity over the true market value means a drop in transactions as buyers and sell-ers disagree on what a property is worth – the auction process helps define what is market value and therefore helps buyers and sellers agree for a sale, and for the indus-
try, hopefully boost transactions.
Did you get the expected results?We would have liked to mark the first event with a sale, but I think that otherwise the event went well. We had a very good turnout, over 120 people, and because this is an innovative method we are bringing to market, it was a great achieve-ment to hold the first event.
The process has three phases, of which the auction event is the second phase so, we still have in-terested parties in the properties and we would expect to generate a sale during phase 3.
Perhaps some of the bidders on the night were a bit over-awed by the environment but we believe that it is a learning curve for us
and the general public, and as the process is better understood, the number of sales will increase.
Is this a diversification role for the company? Madania Real Estate is a brokerage firm offering a full range of real es-tate services with competencies in selling, buying, leasing, and ad-visory services, as well as deferred payment plans. The property auc-tioneering programme is just one part of the services we offer.
Can we expect more auctions?Yes we will certainly be continu-ing with the auctioneering sales method, and as I mentioned, over time we expect the process to be better understood and seen as another way for sellers to market their properties.
What other plans does the com-pany have for the future?We are constantly working to en-hance all the services we provide and will continue to do so in the future. In terms of expanding our offering, we will be looking at pro-viding Building Management Ser-vices and we will also commence building a portfolio of individual properties which require manage-ment. Another area we are look-ing at is helping developers sell their properties that are close to completion.
Raymond Kuceli
FOCUS
DU
BA
I RE
AL
TIM
ES
32
Cricket’s Chapal Cup
Chapal, a leading developer within Northern Emirates and Dubai, speaks on its first successive sponsorship of grand slam ODI series of the year between Pakistan and Australia and Twenty 20 match which took place from 22nd April to 7th of May 2009 in Dubai and Abu Dhabi.
Mohammed Amin Chapal, Chairman for Chapal Group said: “Our partnership with Pakistan Cricket Board for this remarkable event gave us this excellent opportunity to be part of the sports history here in United Arab Emirates. With the opening of the new cricket stadium in Dubai Sports City and excellent arrangements of Abu Dhabi Cricket Board in Sheikh Zayed Stadium, and with such an exciting game - we watched, both the teams play wonderfully. We were happy to represent an important element of the tournament – to build awareness of the cricket sport throughout the multinational community in this region. Chapal’s ability to engage spectators through its sponsorship demonstrates its commitment to quality and fun. We are delighted and will carry on injecting excitement into the next cricket events too."
Jawad Chapal, Executive Director for Chapal Group said: “We are happy to be connected with the local public, especially young-
Cricket, diet and awardsCorporate social responsibility is emerging as a memorable and entertaining tool, for enjoyment by both recipients and organisers. Property development companies are reaching out to the public in unexpected ways, bringing good cheer and smiles to many. Some organise a cricket match, others hire dieticians to teach and inform. Looking after others is catching on, as witnessed by the variety of awards being presented for deserving causes
at-heart fans by sponsoring this cricket grand slam cricket series and give them something back. Unlike the majority of the companies, especially from property sector, that have stopped their marketing activities due to hard-hitting times, we continue to drive our business forward and execute corporate social responsibility events, commercial activities to complete the construction for started projects and increase sales returns.”
Ahmed Chapal, Executive Director for Chapal Group, said: “The Australian team won the series, though Pakistan players were the winners for Twenty20 match. We have watched amazing talents. I consider this game as an opportunity for the Pakistan team, as they played so well against a strong opponent. We will be waiting for their coming back to
this UAE stadium soon again.”
Details on Chapal Cup: The Chapal series closed score on •Sunday, 3rd of May.Pakistan team won the Twenty20 •match on 7th of May 2009.
The Chapal trophies: “Man of the Match” (each match •of ODI, and T20 match); “Man of the Series” (last match of •ODI only); “Runners-Up Trophy” (T20 •match); “Winners Trophy” (final of ODI •series and T20 match).“Chapal Appreciation Souvenirs” •to the match umpires, TV umpire and match referee.
Cash Prizes by Chapal: $1,500 to “Man of the Match” •winner (each match of ODI series);$3,000 to “Man of the Series” •winner (final match of ODI series);$2,500 to winning team (each •match of ODI series);$5,000 for Twenty20 Match •winning team (final match);$5,000 for ODI Series winning •team (final match).Chapal rewarded 78 lucky •winners to attend matches complimentary throughout radio campaign in UAE.
CHAPAL believes that success is achieved by listening to and meeting client’s needs in all aspects of real estate. For more than 40 years, it has developed building concepts of superior and lasting integrity. An important priority for the company is to push the boundaries of modern architectural design to create projects that will sustain as iconic landmarks. Chapal The Destiny, based in Dubai Sports City, was launched in 2006 by the developer. It is known to investors as the fastest selling project in the company’s history with over 90 per cent of its apartments sold out due to its distinctive location, proximity to blooming business districts, as well as affordable payment plans. Being build on 913,000 sq.ft., this twin tower and 26 storey architectural structure, with spacious studios and 1,2 and 3 bedroom units will offer a variety of amenities such as swimming pool, health clubs and spa, shopping centre, family entertainment facilities, a golf course, and canal side views.
Chapal the destiny
COMMUNITY
DU
BA
I RE
AL
TIM
ES
33
Limitless has launched a series of interactive community ini-tiatives for office tenants at
Downtown Jebel Ali, kicking off with a health and nutrition networking event, led by Dubai-based dieticians Nathalie Haddad and Nadine Tayara. Before sampling a range of low fat, energy boosting food, delegates discovered how the food they eat af-fects their health, and, with a good diet, they can cut the risk of obesity, diabetes, high blood pressure and other medical complications. At the same time, they met and mingled with fellow tenants who have set up offices in the 200-hectare develop-ment.
Around 1,000 people are cur-rently based at Downtown Jebel Ali’s four newly-completed office towers – part of an eight-building complex known as The Galleries – with more moving in shortly.
Salah Ameen, Downtown Jebel Ali Project Director, said: “This is more than a place to live or work. It’s also a place for healthy lifestyles in a community setting. At the Galleries, our A-grade offices are filling up fast with local firms and global compa-nies who have chosen Dubai as their regional hub. Our community initia-tives will enhance The Galleries as a choice location, where friendships blossom and business relationships are created.”
Nutritionist Nathalie Haddad said: “Hectic lifestyles and busy schedules can mean that a healthy diet goes by the wayside. Despite an increase in the availability of low fat products, the UAE still has a high rate of obe-sity. By following a balanced diet and eating small meals regularly, people will feel healthier, reduce the risk of
Tenants get a taste of community life – at work
illness and improve their mood, pro-ductivity and energy levels.”
Businesses can lease areas from 3,500 to 15,000 square feet – and take multiple floors – in The Galler-ies, where four additional towers offering apartments, retail, recre-ational and more offices are due for completion this year. The Galleries’ landscaped grounds will include water features, open spaces, plazas and shaded rooftop gardens.
Nakheel has celebrated the completion of 12 million man hours with-out loss due to injury at Marina Residences, Palm Jumeirah. The de-veloper’s exemplary health and safety record is a result of a number
of measures introduced across the development. The company’s dedicated health and safety team worked on a project-specific safety plan with con-tractors, with safety meetings on the project taking place every week for more than 30 months, and additional meetings held to raise and resolve specific workplace safety and protection issues.
Johann Schumacher, Managing Director, Palm Jumeirah, Nakheel, com-ments: “It is our goal for the entire sector to embrace best practices in health and safety on our projects and to improve all workers’ skills to ensure the highest safety standards. This is an approach that leads to improved pro-ductivity, increased efficiency and higher standards of build quality. The specialist safety plan developed for the project alongside regular meetings with workers and managers ensured that the health and safety culture was widespread and at the forefront of everyone’s mind. The results of this focus, enthusiasm and teamwork are highlighted today.”
Nakheel places health and safety at the core of its business and cham-pions high standards in the region. The company has an in-house team of professionals working across the entire organisation’s developments, which monitors and supports project management teams to ensure that these high standards are met across its projects. In January 2009, Nakheel became the first developer in the region to formally endorse the ‘Build Safe UAE’ programme, the construction sector’s own health and safety initiative.
Marina Residences is a residential complex located at the tip of the trunk on Palm Jumeirah, one of the world’s largest man-made islands. The high-end, high-rise development consists of six residential towers that rest on landscaped podiums faced with marinas. The handover of more than 900 homes on the development will commence later this year.
Downtown Jebel Ali will stretch for 11 kilometres along Sheikh Zayed Road between the Jebel Ali Free Zone and Techno Park. It will have 326 buildings, including 237 residential towers. The project will consist of four zones, each with three distinct districts: The Urban Centre, The Trellis and The Medina, creating a blend of business, residential, shopping, and dining and entertainment facilities. Each zone will have a Dubai Metro station, its own internal people mover system, and road access from new interchanges on Sheikh Zayed Road
Coral Deira Dubai has been awarded a certificate of appreciation from Dubai Electricity & Water Authority (DEWA) for its distinguished ef-forts in saving water and electricity throughout 2008. The certificate
was awarded to recognise the significant contribution the hotel made to the reduction of electricity and water consumption; an area which the property earmarks as a highly important issue.
General Manager of Coral Deira Dubai, Pieter Stapel, said: “We’re extreme-ly pleased to have our dedication in this area recognised as it is something we have worked hard for.
Water and energy conservation is a big issue and one we recognise we can do something about if we adopt new practices and change certain ways in which we work,” he explained.
“We offer the same great level of service to our guests that they have come to expect, but we are pushing to do things in a green and environ-mentally friendly way - with awards like this, it shows we are moving in the right direction but there is always more that can be done.”
The award was presented to 10 Dubai hotels at a special award ceremony at the InterContinental Festival City.
Coral Deira Dubai receives Green Award
Health and safety success at Palm’s Marina Residences development
Limitless DJA offices
DU
BA
I RE
AL
TIM
ES
34
EVENTS
ThyssenKrupp architecture awardsSheikh Saeed Bin Mohammed Bin Rashid Al Maktoum
recently distributed the 11th ThyssenKrupp Elevator Architecture Awards at a ceremony held at the Raffles
Hotel, Dubai.Fernando Donis from Netherlands, who won the first prize
for his entry ‘Dubai Frame’, was awarded $100,000, following an international jury selecting 926 design proposals for a Tall Emblematic Structure for Dubai.
The awards were distributed in the presence of Mr. Sultan bin Saeed Al Mansouri, UAE Minister of Economy, Eng. Hus-sain Nasser Lootah, Director General of Dubai Municipality, Mr. Javier Del Pozo, CEO of ThyssenKrupp Elevator Southern Europe, Africa and Middle East and Dr. Olaf Berlien, CEO of ThyssenKrupp Technologies.
The competition, held under the auspices of the Inter-national Union of Architects, saw 4,900 architects from 108 countries participate to design the new emblem structure for Dubai.
The $50,000 second prize was awarded to Luo Siwei from China for the “Magic Mirror” proposal and three teams were awarded $20,000 each as the third prize winners. In third place were teams led by Alejandro Rios of Spain who proposed ‘The Mirage’, a team, led by Ferran Yusta of the Netherlands and Marta Pozo of France, which presented the ‘Big Beam’ and Ca-nadian Hongbo Lu, residing in China, who proposed a struc-ture entitled ‘The Flying Colours of Dubai’.
ThyssenKrupp Elevator is one of the leading elevator companies in the world and represented at over 800 locations in more than 60 countries. Its capabilities include passenger and freight elevators, escalators and moving walks, stair and platform lifts, passenger boarding bridges as well as quality service for all products
His Highness Sheikh Saeed bin Mohammed Bin Rashid Al Maktoum reviews the 2009 ThyssenKrupp Elevator Architecture Award winners with Eng. Hussain Lootah, Director General of Dubai Municipality explaining the finer points of the winning projects.
Sheikh Saeed Bin Mohammed Bin Rashid Al Maktoum presents the First Prize award to Fernando Donis of the Netherlands for the ‘Dubai Frame’ proposal. (Left to right) Mr. Hussain Lootah, Director General of Dubai Municipality, His Excellency Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, His Highness Sheikh Saeed Bin Mohammed Bin Rashid Al Maktoum, Fernando Donis, Dr. Olaf Berlien, CEO of ThyssenKrupp Technologies and Mr. Javier Del Pozo, CEO of ThyssenKrupp Elevator Southern Europe, Africa and Middle East
(left to right) Marta Pozo , Luo Siwei, Mr. Hussain Lootah, Director General of Dubai Municipality, His Excellency Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, His Highness Sheikh Saeed bin Mohammed Bin Rashid Al Maktoum, Fernando Donis, Ferran Yusta, Dr. Olaf Berlien, CEO of ThyssenKrupp Technologies, Mr. Javier Del Pozo, CEO of ThyssenKrupp Elevator Southern Europe, Africa and Middle East, Hongbo Lu and Alejandro Rios
DU
BA
I RE
AL
TIM
ES
35
LAUNCHES
Hotels for Dubai PearlP
earl Dubai FZ LLC and MGM MIRAGE (NYSE:MGM) have plans to develop Bellagio, MGM Grand, and Skyloft
hotels, as well as branded residenc-es at Dubai Pearl, the $4 billion (Dh15 billion) world-class, fully integrat-ed luxury development in Dubai, United Arab Emirates. Pearl Dubai FZ LLC will own and finance the 250-room Bellagio hotel, 350-room MGM Grand Hotel, and 30-suite Skylofts hotel, while MGM MIRAGE Hospitality will manage and provide technical services for the three new ventures.
The agreement includes the development of Bellagio branded luxury residences, in addition to featuring world-renowned dining, entertainment, spa and convention that complement the luxury offer-ing of the hotels.
Abdul Majeed Ismail Al Fahim, Chairman of Pearl Dubai FZ LLC, said: “Our alliance with MGM MIRAGE re-flects our commitment to forging world-class partnerships with pre-mium brands that are renowned for their operational excellence. The project’s entertainment elements will help complete the vision of mak-ing the Dubai Pearl a true landmark that will deliver an unforgettable experience through its diverse com-ponents and unmatched services.”
The association between the two companies will see the Dubai Pearl project getting Dubai’s first hotel and residences brands under the MGM MIRAGE portfolio.
Located opposite the Palm Jumeirah island in the heart of the Dubai Technology and Media Free Zone, Dubai Pearl is a landmark desti-nation designed to offer spectacular views of the Arabian Gulf. Through integrating first-class facilities, it will shape a pedestrian-friendly, 24-hour
living city with a spectrum of com-mercial, retail, residential, hospitality and leisure components. It will also have a 2,000-seat performing arts theatre aimed at meeting the needs of Dubai’s growing cultural calendar and complementing the project’s entertainment offering.
Featuring an active business dis-trict with a quality urban lifestyle,
the development will be host to the world’s top brands and include sky palaces with private pools and land-scaped gardens, luxury branded apartments and condominiums.
Al Habtoor Business Tower - Fulfilling the long standing de-mand for world-class office spaces
in the Dubai Marina area, Al Habtoor Group has unveiled the first com-plete commercial 5-star business tower in Dubai Marina. Forty floors of opulence, breathtaking views from three sides, and unrivalled settings are just the few attractions of this imposing tower facing the serene Arabian Gulf. Managed by Al Habtoor Properties, the tower is the new vantage point awaiting the business world of Dubai.
With 35 leasable commercial floors ready for occupation, a con-siderable number of these floors have already been leased to multi-national and other companies, the Al Habtoor Business Tower presents choices of leasing a complete floor or split into two spaces with a mini-mum size of around 3,250 square feet. Every floor has a carpet area of approximately 6,500 square feet, and has fully fitted floors and ceil-ings. There is a luxurious VIP Lounge on the 38th floor with direct access to the helipad – the only one in the area. Plus, tenants have access to covered parking, 24 hour security and access card entry control sys-tem.
Being a prestigious property from the Al Habtoor Group, the building adds exclusive value to the property by offering Privilege Ben-efits to every tenant.
“We believe in making our prop-erty distinct to make our tenants feel unique. Every tenant at this magnificent tower will enjoy Privi-lege Packages at Habtoor Grand Resort & Spa, besides enjoying ex-ceptional rates at Al Habtoor Mo-tors, Diamondlease, hotels and restaurants under Habtoor Hotels, Dubai National Insurance and Emir-ates International Schools,” says Mr. Mohammed Al Habtoor, CEO, Al Habtoor Group.
Abdul Majeed Ismail Al Fahim, Chairman, Pearl Dubai FZ LLC and Jim Murren, Chairman and Chief Executive Officer, MGM Mirage
Being a prestigious property from the Al Habtoor Group, the building adds exclusive value to the property by offering Privilege Benefits to every tenant
DU
BA
I RE
AL
TIM
ES
36
UNDER CONSTRUCTION
Not all the cranes have stopped moving. There are quite a few projects still being built, and de-
velopers are eager to share their progress photos to prove it. Some have connected web cams to their websites while others regularly place updated progress photos on theirs. Many concerned with the building trade are keen to spread the word about their successful continuation of work, and grateful buyers wait to see the outcome of their signed agreements.
Bonyan International Invest-ment Group (Holding) LLC has announced its plans to deliver over 1,000 property units by the end of the second quarter of 2009. In line with this, the developer also revealed that three of its projects - Dubai Gate 1, ABBCO Tower and Sharjah Gate Tower - have already been sold out to investors. At pres-ent, all projects are undergoing the final stages of completion, with the developer finalising the legalities for the first two buildings to be de-clared as completed projects, while Sharjah Gate Tower is at the home-stretch of its construction phase.
Strategically situated in the heart of Dubai, ‘Dubai Gate 1’ is a 35-storey tower, which will house comfortable and stylish one-, two- and three-bedroom apartments.
“We are looking forward to the delivery of 1,000 property units within our project portfolio, espe-cially now when most developers are facing daunting challenges in terms of completing their own developments,” said Anas Ata-treh, Vice Chairman of the Board, Bonyan International Investment Group (Holding) LLC. “Our custom-ers have a strong appreciation of
Digging the dirt
our resources and quality of projects; therefore, we strive to remain true to our commitments in meeting high standards.”
In compliance with RERA, Bonyan has registered under the number 257/2007.
The Dubai Government’s single largest urban land development project, Dubai World Central (DWC) – the 140 square kilometre Urban Aviation City under construc-tion in south west Dubai – will go live in its first phase of operation when DWC-Al Maktoum Interna-tional Airport opens in June 2010, said His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman, Dubai Aviation City Corporation.
His statement came prior to this year’s edition of the Airport Show held during May.
“Our vision for Dubai is to be an unparalleled global commercial, trade and transportation hub with a unique integrated multi-modal logistics platform in DWC which will change all known air, land and sea transportation parameters,” said HH
Sheikh Ahmed. “At the core of this airport city will be the world’s larg-est airport which, once operational next year, will not only draw busi-ness and trade to it but also create huge residential and commercial opportunities.
While we have extended the opening date of the project to ac-commodate all related construction, licensing and regulatory standards, we have not lost sight of the long-term vision of Dubai’s most stra-tegically important infrastructure development which is designed to support its aviation, tourism, com-mercial and logistics requirements until 2050 and beyond.”
Dubai Aviation City Corporation incorporates both Dubai World Cen-tral and Dubai Airports Company.
Meanwhile, Dubai Logistics City (DLC), a core component of DWC’s multi-modal proposition, has be-gun licensing completed warehous-es and logistics offices and handing over facilities to tenants to com-mence operations on-site.
At the airport, the construction of the first of its 16 cargo terminals has been completed, well on its way to achieving the project’s ultimate goal of having an annual cargo ca-pacity of 12 million tonnes. With a capacity of 200,000 tonnes and spread over 41,000 square metres of built up area, the terminal’s capacity can be expanded to 600,000 tonnes, if required.
“The completion of Dubai World Central’s first cargo terminal is a sig-nificant milestone in the project’s history,” said HH Sheikh Ahmed. “Dubai’s forward looking govern-ment continues to support DWC’s thrust towards building a facil-ity which will not only enable trade and commerce to continue in these
Dubai Logistics City (DLC), a core component of DWC’s multi-modal proposition, has begun licensing completed warehouses and logistics offices and handing over facilities to tenants to commence operations on-site
troubled economic times, but also look positively at how DWC can sup-port the future of business in the Middle East.”
The first passenger terminal too is 80 per cent complete with MEP works ongoing. This terminal will
DU
BA
I RE
AL
TIM
ES
37
have an eventual capacity of seven million passengers with the airport’s ultimate capacity being 160 million annually.
“Construction on all related infra-structure works is continuing with all our stakeholders recognising the fact that Dubai World Central is a committed Dubai government proj-ect; and once the global economic recession tides out its cycle, work towards its final master plan will re-sume at its original pace,” explained HH Sheikh Ahmed.
Another major achievement is the construction of the Middle East’s tallest free standing Air Traffic Control (ATC) tower which has been completed. Currently, the tower is being fitted with all navigational aids. Standing at 91 metres, the ATC facility also includes a separate tech-nical block of 6,000 square metres which will house offices, operations, technical rooms, flight simulators and a meteor observation cabin. In addition, the facility has an airside / landside interface with secured access to airside, offering air traf-fic controllers the ability to handle multiple airborne airplanes as well as on-ground aircraft.
“The completion of construction of the ATC tower at Dubai World Central is a giant step forward for the region’s aviation sector which has constantly seen growth every year,” said HH Sheikh Ahmed. “The completion of these facilities indi-cates the progress we are making towards the opening of the airport next year and eventually of the en-tire development across its several components.”
Besides DWC-Al Maktoum In-ternational Airport, Dubai World Central comprises DLC and DWC Aviation City, surrounded by its real estate offerings - DWC Residential City, DWC Commercial City and DWC Golf City.
Jacques Stern, Senior Executive Vice President of Accor recently vis-ited the site of the Group’s first Pull-man hotel in the Middle East, the Majid Al Futtaim Group’s Mall of the Emirates. The the two companies signed an agreement to bring the prestigious Pullman brand to the region to fill a gap in the upscale business hotel market. The Pullman will be the second hotel on the site of the Majid Al Futtaim Group’s flag-ship retail and leisure destination which is undergoing a multi-million dollar expansion.
Mr. Stern visited the site to check the progress of the hotel develop-ment which is due to open in the
“The completion of construction of the ATC tower at Dubai World Central is a giant step forward for the region’s aviation sector which has constantly seen growth every year”
From left to right: Jean-Luc Motot, Managing Director Middle East and Africa; MAF Properties; David Vély, Head of Development - Hospitality, MAF Properties; Christophe Landais - Managing Director Middle East, Accor; Richard Reid - SVP - Development, MAF Properties; Jacques Stern - Deputy CEO and Group CFO Accor; Dr. Najib Al Khaja - SVP - Hospitality, MAF Propoerties; Philippe Baretaud , Director of Development Middle East, Accor; Christian Karaoglanian- Chief Development Officer, Accor; Brian Pirie, VP-Asset Management, MAF Properties; Mazen Amini, Vice President–Project Management, MAF Properties.
Silicon Information Technology tower
DU
BA
I RE
AL
TIM
ES
38
second half of 2010.Construction work is now un-
derway on one of the first projects at Nakheel’s Madinat Al Arab district at Waterfront. Plus Properties, the Dubai-based regional real estate company, has begun work on two of its residential beachfront devel-opments - Pixel Tower and Wave Residence.
Marwan Al Qamzi, Executive Managing Director, Nakheel South-ern Projects - a portfolio which in-cludes Waterfront, said: “We would like to congratulate Plus Properties on the start of construction work on two residential developments at Madinat Al Arab - a step that we welcome as the master developer. Across the heart of Waterfront, in-cluding Madinat Al Arab, Badrah and Veneto, construction and infra-structure development is progress-ing well, with the first residents at Waterfront set to take occupancy in 2010.”
Pixel Tower comprises 18 floors with a variety of spacious and luxurious apartments, private vil-las and duplex penthouses. Wave Residence-1, located on the beach, takes its name from its shape and has been designed to offer tenants the elegance, comfort and ambi-ence worthy of a 7-star beachfront residence. The project will have nine floors and will feature studio, one, two and three bedroom apart-ments as well as exclusive garden apartments with private pools or outdoor Jacuzzis. Both develop-ments embrace sustainable design guidelines, are energy-efficient and eco-friendly, and aim for LEED Gold Certification.
Waterfront is being designed as an exemplar sustainable city founded on resource efficiency, so-cial equity, and economic prosper-ity. Minimising ecological impact is considered in every decision of the city's design, construction and operation. Energy and water con-servation are achieved through integration of utilities in dedicated centres, where process streams are interlinked and waste is trans-formed into energy to power the city. Simulation is used in building design to ensure tough energy ef-ficiency targets are achieved.
Deyaar Development PJSC, a regional real estate company dedi-cated to innovation, customer care and long-term sustainable growth, has announced that preparation and substructure works on its Fla-mingo Creek development are un-derway. All units within the Dh1 bil-lion real estate venture are sold, and the project is scheduled for delivery in 2011.
Strategically located adjacent to the arterial Ras Al Khor canal and of-fering spectacular views of the Ras Al Khor Nature Reserve, Flamingo Creek is a unique low-density free-hold project comprising 244 villa-style apartments and townhouses, spread over 500,000 square feet.
“As the first residential communi-ty in The Lagoons, the commence-ment of construction at Flamingo
Creek marks an exciting step for-ward for the company,” said Markus Giebel, Chief Executive of Deyaar.
Flamingo Creek has been de-signed for a premium contemporary lifestyle, where residents will enjoy
such amenities as, health clubs, a school district, public facilities and quick access to the proposed Dubai Opera House. Each apartment has high-quality finishes, marble floors, high quality utilities and access to swimming pools. The development is also in close proximity to all major transport corridors.
Mr. Mohammed Nasir Falak & Associates proudly announce that over 50 per cent of the develop-ment and construction of Silicon Information Technology tower (SIT) is complete, despite the recent eco-nomic downturn, resulting from the global financial crises. Strategically
“As the first residential community in The Lagoons, the commencement of construction at Flamingo Creek marks an exciting step forward for the company”
Georges Chehwane and Marwan Al Qazmi
Flemingo Creek
DU
BA
I RE
AL
TIM
ES
39
located in Dubai Silicon Oasis, on Emirates Road, SIT tower, a high tech commercial complex, will comprise of three basements plus ground floor and twenty five floors featur-ing State of art fitness centre with gym, cafes, restaurants, shops, ex-clusively designed spacious lobby, high-speed and panoramic eleva-tors etc.
The commercial complex will take advantage of a thriving urban community with a master planned residential environment nearby.
Beijing Emirates main contrac-tor of the SIT tower has completed over 50 per cent of the construc-
tion within record time of less than a year through its team of dedicated and professional engineers, project managers, site supervisors, quantity surveyors and construction work-ers that have been assigned to the project, under the professional su-pervision of Consultant M/S Adnan Saffrini.
Mr. Mohammed Nasir Falak said,’ At an advance stage of construction SIT tower offers an ideal opportunity for all sections of corporate entities and we are pleased to see our latest project get underway successfully before the delivery date’.
Ishraqah has announced that it
has awarded a Dh200 million con-tract to Bin Shafar Contracting for the construction of the first phase of its ‘Seasons Community’ residen-tial project. Located in new Dubai’s Jumeirah Village Circle, Seasons Community consists of four low-rise clusters representing the four differ-ent seasons of nature. The develop-ment features 1,400 units of Garden apartments and townhouses and will incorporate retail and other commercial and lifestyle elements. The first phase of the project is scheduled for completion in the fourth quarter of 2010.
Abdullah bin Mattar Al Falasi, CEO, Ishraqah, stated: “We have col-laborated with Bin Shafar for the creation of an efficient manage-ment plan that fully supports the project, in order to expedite mobili-sation and construction. We want to ensure that Seasons Community is completed within the shortest pos-sible time in accordance with the needs of its future residents. The new management strategy comple-ments the property sector’s current period of correction and is intended to help Ishraqah strategically posi-tion itself in the market and fulfil our commitment to our buyers. Our fresh management approach com-bined with recovering market con-ditions will maximise the appeal of both our residential and commercial projects.”
Seasons Community is being developed as a ‘green’ community in alignment with Dubai’s Green Buildings initiative. This commit-ment provides customers with more comfortable homes that cost less to operate, reduce electrical and water
Waterfront is being designed as an exemplar sustainable city founded on resource efficiency, social equity, and economic prosperity
consumption, increase air-condi-tioning efficiency, improve air and water quality, and meet stringent environmental standards.
“We aim to deliver quality envi-ronmentally friendly properties to our customers at no extra cost as an affirmation of our sustainable stew-ardship and social responsibility. In fact, we hired an independent en-vironmental consultant for Seasons Community, despite the fact that this meant delaying commencement of our original construction plan and additional costs. The associated 7 to 10 per cent increase in construction costs due to environmental consid-erations will not prevent us from pursuing our sustainability agenda,” added Al Falasi.
Site enabling and shoring works for the second phase of the project are currently underway, while the main building tender package will be launched shortly. In addition, several qualified bidders have lined up for the construction of the town-houses in the first two phases of the project. Ishraqah is presently coordi-nating with Masharea Project Man-agement on the analysis and evalu-ation of these bids and the selection of the successful bidder will be an-nounced in the upcoming weeks.
Ishraqah is also overseeing the development of a commercial com-plex on Sheikh Zayed Road beside Emaar Business Park called The Onyx. The project features two office towers, a business hotel, and dining and retail facilities. The Onyx covers a total construction area of around 2.3 million square feet and includes a five-level car park with slots for ap-proximately 2,000 cars.
Seasons Community
(from Left to Right): Amgad O Gira, Director of Masharea; Walid Al Bagoury, Managing Director of Bin Shafar; Abdullah Bin Mattar Al Falasi, CEO of Ishraqah and Ammar Sweis, Group CFO of Ishraqah.
DU
BA
I RE
AL
TIM
ES
40
UNDER CONSTRUCTION
City of Arabia shows shape of things to comeNew images highlight spectacular nature of development - future home for 40,000 people - as construction work enters a new phase
New images released re-cently of City of Arabia highlight the spectacular nature of the $5 billion
retail, residential, commercial and entertainment development taking shape in Dubai.
With round-the-clock construc-tion work entering a new phase, City of Arabia owners, the Ilyas and Mus-tafa Galadari Group, commissioned a new range of artist’s impressions which put the project and each of its four main elements into perspec-tive.
City of Arabia will have a phased opening starting towards the end of 2010, beginning with Mall of Arabia, one of the world’s largest shopping destinations, which will have a gross leasable area (GLA) of 10 million square feet over two phases.
With workers on site casting ap-proximately 60 pile caps per week on the 20 million square foot site beside the Emirates Road, the mall is rapidly taking shape. Construction work is also moving quickly ahead on Wadi Walk, the projects waterfront com-munity characterised by stylish apartments, outdoor cafes and at-
Group also has interests in real estate, agencies for overseas companies, gems and jewellery, automobiles and transport and food distribution, as well as an expanding luxury yacht division, Sunseeker Middle East, which enjoyed a highly successful appearance at the recent Dubai In-ternational Boat Show.
City of Arabia, which will become home for 40,000 people, will be a vibrant, self-contained urban com-munity, with business and admin-istrative offices, schools and clinics, supported by luxury apartments, shops, galleries, restaurants and unique attractions.
tractive retail outlets set beside a meandering eight kilometre canal.
Construction work has now com-menced on I&M Tower, Metro Tower and Wadi Tower, the first three of the high-rise commercial and residential buildings which will create a dramat-ic skyline here.
Mall of Arabia will offer more than 1,400 diverse retail outlets, and the first phase is already 89 per cent contracted and reserved. It will also feature a rooftop hotel, waterfront alfresco dining and entertainment for all the family, as well as the re-markable Restless Planet theme park and earth science museum.
Housing the world’s largest and most lifelike collection of anima-tronic dinosaurs, Restless Planet will make visitors think they’ve wandered onto the set of a Steven Spielberg Jurassic Park blockbuster. One design team member, Dr. Jack Horner, served as a scientific consul-tant to Spielberg on three Jurassic Park movies; and Restless Planet will take visitors a 100 million years back in time on a dramatic theme ride into the prehistoric world.
“With each of the four main ele-
ments of City of Arabia now reach-ing important stages, we wanted to give all our stakeholders a detailed picture of what they can expect when the project is completed, and the new images do that perfectly,” said Ilyas Galadari, Chairman of Ilyas & Mustafa Galadari Group.
Mustafa Galadari, the Group’s Vice Chairman and Managing Di-rector, added: “Construction work is continuing to go full steam ahead, and major visible progress is now particularly evident at Mall of Arabia, which is a very exciting develop-ment in its own right.”
The Ilyas and Mustafa Galadari
City of Arabia Mall of Arabia The Restless Planet theme park and earth science museum
Wadi Walk waterfront community
DU
BA
I RE
AL
TIM
ES
41
INFRASTRUCTURE
Contracts are being award-ed to worthy companies, mainly based locally, for pipework, design, MEP,
AC and other infrastructure needs. On the whole, the trend seems to be to use established companies with proven track records for good work. Those who have done it the old fashioned way, i.e. by consistent-ly working well in the past, are now reaping the benefits of good busi-ness attitudes and practices.Drake & Scull International PJSC (DSI) has been awarded the Dh226 million Mechanical, Electrical & Plumbing (MEP) contract for the Kingdom of Sheba development on Palm Jumeirah. With this contract, DSI is now working on six separate projects, covering a total built up area of 1.2 million square metres, on the Palm Jumeirah, making it the largest MEP contractor on the island.
Plumbing new depths
Kingdom of Sheba is a mixed-use residential and leisure luxury resort located on the crescent of the palm. The resort is the largest resort IFA Hotels & Resorts is developing. DSI have been awarded the contract for the first phase of the development which consists of the residential component (Balqis Residence) and the Private Residence Club (Fair-mont Heritage Place, Kingdom of Sheba).
DSI Vice Chairman and CEO Khal-doun Tabari added that his com-pany is in a unique position at the moment. “There are still a lot of opportunities in the construction industry in the UAE, and the com-pany is well equipped and has the capabilities and resources to take on mega projects, and deliver as per the client’s requirements of time, cost and quality. The expertise we gained in the UAE in over 40 years as a specialist MEP contracting com-
pany, combined with our cash rich position ensures we will continue to meet all our projects’ requirements.”
DSI’s contract with Kingdom of Sheba incorporates the supply, in-stallation, testing and commissioning of complete MEP works including: air conditioning, ventilation, plumbing and drainage, building management system, fire fighting, power, tele-phone and data, fire alarm system, intercom system, central emergency lighting, CCTV, access control secu-rity systems, PA/BGM system and lighting control system.
The company is a leading UAE-based end-to-end service provider of MEP contracting, infrastructure, water and power (IWP) and civil contracting services. On March 16 2009, DSI became the first specialist contracting company to list on the Dubai Financial Market (DFM) and is
The resort is the largest resort IFA Hotels & Resorts is developing. DSI has been awarded the contract for the first phase of the development which consists of the residential component (Balqis Residence) and the Private Residence Club (Fairmont Heritage Place, Kingdom of Sheba)
Kingdom of Sheba
(from left to right) Eng. Isam Abdullah Edyak, Managing Director of Anwar Al Aqsa and Rizwan Shaikhani, Joint Managing Director, Memon Investments
DU
BA
I RE
AL
TIM
ES
42
currently working on projects across the MENA region with a total value reaching approximately Dh6 billion.
Memon Investments has award-ed a Dh19.5 million MEP contract to Anwar Al Aqsa, a leading UAE-based company. The MEP contrac-tor will manage the electrical, fire alarm, plumbing, and fire fighting works within ‘Champions Tower II’ and ‘Champions Tower III’ projects, located in Dubai Sports City. With construction progressing on the two towers the developer most recently awarded a Dh1.96 million elevator contract to ETA MELCO for the installation of six high-speed, state-of-the-art Mitsubishi elevators within the 14-storey Champions Tower II and the 16-storey Champi-ons Tower III.Memon Investments has revealed that its decision to award the con-tract to Anwar Al Aqsa was based on the company’s experience within the engineering, owner, vendor and trade contractor communities, which has enriched its capacity to provide the greatest value to a proj-ect. Specifically, the company will be utilising its expertise in HVAC sys-tems installation, building electrical works, generator installation, interior and exterior plumbing, fire protec-tion systems installation and exterior
lighting for Memon Investments’ luxury residential developments. The contract with Anwar Al Aqsa follows previous deals with other top companies, including a Dh55.5 million deal with Al Sarh Contract-ing and a Dh82 million agreement with Cairo Contracting Company for the construction of Champions Tower II and Champions Tower III respectively.
Having worked with a wide vari-ety of projects across the UAE - from villas to mid-rise buildings to high-rise towers - Anwar Al Aqsa has de-veloped a distinctive quality in its workmanship and has impressed various local authorities, includ-ing the UAE Ministry of Electricity and Water, as well as a number of
high profile developers. With offices in Dubai, Sharjah and Ajman, the company comprises qualified elec-tricians, plumbers and technicians who leverage its good infrastructure, material resources and equipment to execute major projects. Anwar Al Aqsa’s extensive expertise across various levels of MEP engineering, in addition to its operations involving the design, manufacturing and as-sembly of distribution boards, were key factors that helped the contrac-tor clinch the deal.
Memon Investments currently has a portfolio of projects valued at Dh1.34 billion, which includes the high profile residential 'Champions Towers' series, the luxurious ‘'Garde-nia I & II’, ‘Frankfurt Sports Tower I’
and 'Cambridge Business Centre'. The Escrow accounts for all the projects are already in place with the Com-mercial Bank of Dubai, in compliance with the requirements of RERA and Dubai Land Department. Palm Utilities (PU), the water and district cooling utility service pro-vider established by government-owned investment firm Istithmar, has announced that Palm District Cool-ing (PDC) has recently renewed its partnership with Barrel Energy LLC, a Dubai-based fuel supply manage-ment and lubricants service com-pany. The move underscores PDC's strong commitment to support the Mohammed Bin Rashid Establish-ment for Young Business Leaders, a government programme that fa-cilitates the development of business and entrepreneurial activity among UAE nationals, of which Barrel Energy is a member.
Barrel Energy has supplied over Dh100 million or nearly seven million IG (imperial gallons) of fuel to PDC and has also delivered logistics man-agement services to PDC's district cooling station since 2007, support-ing the temporary cooling service provided to customers. At its peak, Barrel Energy delivered up to one million IG of fuel a month to PDC; the company has also served most of its project sites including Palm Jumei-rah, Discovery Gardens, and Jumeira Lake Towers, and has also been a key supplier of other government and non-government entities.
Mohammed Abulhoul, Founder and Managing Director, Barrel En-ergy LLC said: "Barrel Energy is fully committed to support Palm District Cooling in its growing business ven-tures across the UAE market by main-taining the highest quality standards in the delivery of our products and services."
PDC currently provides district cooling services to several presti-gious mega developments in the UAE, including the Gardens Residen-tial Complex, Jumeirah Islands, Dis-covery Gardens and Palm Jumeirah Trunk. PDC is also renowned for be-ing a socially responsible company and a leading innovator in the district cooling industry.
Palm Utilities, through PDC and Palm Water (PW), has been estab-
Memon Investments currently has a portfolio of projects valued at Dh1.34 billion, which includes the high profile residential ‘Champions Towers’ series, the luxurious ‘‘Gardenia I & II’, ‘Frankfurt Sports Tower I’ and ‘Cambridge Business Centre’
(from right to left) Mohammed Abulhoul, Founder and Managing Director, Barrel Energy LLC and Shafiq Khoori, Managing Director, Palm District Cooling
DU
BA
I RE
AL
TIM
ES
43
lished to address the region's unique requirements in the distinctly critical areas of district cooling, and waste-water treatment. PU has revealed that it is exploring possible joint venture initiatives for other util-ity projects in the Middle East, India and across Asia as part of its growth strategy for 2009.
Work on the interiors of Burj Dubai, the world’s tallest building developed by Emaar Properties, is progressing alongside the tower’s exterior cladding. Currently, over 800 metres (2,624.7 feet) high, the tow-er’s interiors are an aesthetic con-fluence of the best of architectural influences from around the world and the region. Complementing the external architecture of the tower that is inspired by the geometries of the desert flower Hymenocalis and regional patterning systems, the interior design of Burj Dubai was conceptualised and led by award-winning designer Ms Nada Andric of Chicago-based Skidmore, Owings & Merrill LLP (SOM).
Mr Mohamed Alabbar, Chairman, Emaar Properties, said: “Burj Dubai is a once in a lifetime architectural accomplishment and is the Arab world’s tribute to the art and science of modern engineering and design. A global icon that draws on interna-
tional engineering expertise, Burj Dubai will symbolise the aesthetic unison of many cultures – from Arabia and the rest of the world.”
He added: “The interiors place a special focus on the region’s heri-tage and geographical location in its design approach and selection of materials. The design emphasis-es on the best results in space plan-ning and utilisation alongside the finest detailing, to give residents and visitors an unprecedented life-style experience.”
A globally acknowledged and award-winning interior designer credited with several projects and large-scale architecture, Ms An-dric’s design approach was not to take literal, stereotypical transla-tions for the region’s cultural influ-ences but to turn to scholarship to develop the vocabulary inspired by the region’s history, cultural under-standing of the heritage of the Arab world and its interpretation into spatial elements, the right selection of materials and a concerted effort to blend the traditional motifs and patterns with modernity.
Apart from glass, stainless steel and polished dark stones, the inte-riors of Burj Dubai also feature Silver Travertine flooring, Venetian stucco walls, handmade rugs, stone floor-
ing and dark, intricate Brazilian Santos Rosewood to reflect shelter, comfort, and above all, restrained luxury. Surfaces on the upper floors will be advanced in finishes of sil-ver metallic lacquers to provide a sense of brightness and enlighten-ment. Commissioned local and international fine art pieces will be thoughtfully integrated across the interiors of tower to complete the atmosphere of ultimate refinement.
Ms Andric explained: “Burj Dubai’s interiors are mindful of the building’s prominent international address and its true purpose as home to a number of people, while being inspired by the fascinating local culture and the challenge of enhancing the value of a global landmark. This unique approach is reflected in all aspects from careful planning of all the public areas, the subliminal reference to free flowing Arabic script, colours and materials and the implementation with an aim to showcase global technology and human achievement.”
She added: “For the interiors, the highly edited colour and material palette is inspired by the region’s fine sand and the tradition of pearl harvesting, which are offset by the indigenous dark hues of wood. The layouts for the common areas
of the tower have been inspired by cursive Arabic writing as rooms flow elegantly in an intelligent interplay of light and shadow.”
A mixed-use tower, featuring the world’s first Armani Hotel Dubai and Armani Residences, alongside cor-porate suites, residences, retail and leisure facilities, Burj Dubai is at the centre of Downtown Burj Dubai, a 500-acre mega-development by Emaar Properties. Among an array of lifestyle amenities, the tower will have a public observatory deck on level 124.
Downtown Burj Dubai encom-passes The Dubai Mall, one of the world’s largest shopping and en-tertainment destinations; several hotels; offices and homes. A stellar attraction within the community is The Dubai Fountain, the world’s tall-est performing fountain.
Burj Dubai has already achieved the distinction of being the world's tallest structure, surpassing the KV-LY-TV mast (628.8 metres; 2,063 feet) in North Dakota, USA. The tower is taller than Taipei 101 in Taiwan, which at 508 metres (1,667 feet) has held the tallest-building-in-the-world title since it opened in 2004. Burj Dubai also surpassed the 31-year-old record of CN Tower, which at 553.33 metres (1,815.5 feet) has been the world’s tallest free-standing struc-ture on land since 1976.
Designed by SOM, Burj Dubai is constructed by high-rise experts South Korea’s Samsung Corporation. Turner Construction International is the project and construction man-ager. The tower employs the latest in wind engineering, structural en-gineering, structural systems, con-struction materials and construction methods.
The external architecture of the tower is inspired by the geometries of the desert flower Hymenocalis and regional patterning systems
Burj Dubai elevator lobby
DU
BA
I RE
AL
TIM
ES
44
ENVIRONMENT
New technology in the UAE paint industry is helping to drastically reduce the environmental impact of
volatile organic compounds (VOC) in the coatings. VOCs can release low-level toxin emissions into the envi-ronment for years following their application, but scientific research supported by the research and de-velopment laboratories at Al Gurg Paints (AGP) is helping to drasti-cally reduce the impact. Working closely with UK-based ICI Dulux, AGP has developed advanced practices which limit the amount of VOC in paints and coatings currently being used on many projects throughout the UAE.
“Reducing the impact we have on the environment is our number one goal,” said Sunil Gudur, Chief Manager, Al Gurg Paints. “This latest technology helps us to manufac-ture products low in VOC while still being able to offer total protection solutions for construction projects throughout the UAE. These develop-ments will see the biggest change to the paint industry in years.”
AGP is the first paint company in the UAE to become members of the US Green Building Council, and all ICI Dulux products are supplied exclusively in the UAE through AGP, employs LEED (Leadership in Energy and Environmental Design) stan-dards in all its paints.
The company is working with leading consultants in the region to draw up LEED compliant paint spec-ifications for their building projects. These will help buildings aquire LEED compliance in various categories.
Painting a clean pictureWhile some want to clean up the air, others want to clean up the earth. Here are two different companies doing two totally different types of cleaning.
For decorative, water-based paints, the limit of VOCs is currently set at no more than 50 grams per litre, while for industrial coatings the limit is set at 150 gram per litre.
AGP is also more than 75 per cent of the way towards reaching targets laid down for 2010 to further reduce the VOCs in its coatings. It has now implemented changes to manufac-ture better and more environmen-tally-friendly paints and coatings through water and solvent based products.
Dulsco, the region's largest Waste Management Service (WMS) compa-ny, has announced the introduction of a toll-free number 800 – WASTE (92783) dedicated to waste manage-ment, making it the first waste man-agement specialist in the Middle East to do so. The new number is already operational and is manned 24/7, which means customers and in-dividuals can speak to a waste man-agement specialist any time and get advice on all aspects concerning the
efficient management of waste. “Through the introduction of
this toll-free number, the company has once again demonstrated its firm commitment to environmental conservation,” said Prakash Parab, Director – Dulsco Waste Manage-ment Services. “Any queries related to sales, operations or any other as-pect of WMS are attended to on this number. Basically it’s a single hotline for people to contact us at any time for anything related to the manage-ment of both solid and liquid waste. It is part of the Dulsco corporate vision to continually enhance cus-tomer service at no cost to them. Until now we had a number that was also operational around-the-clock but was not a dedicated hotl-ine and was not toll-free. A number like 800 – WASTE (92783) is both easy to remember and to access.”
Ranjit Jose, Senior Manager – Commercial, Dulsco, said, “All exist-ing Dulsco customers have been informed of this convenient new
number and we hope that the num-ber will also promote Dulsco WMS’ presence and activities in a very positive manner across the UAE. We would like all companies and individuals in the UAE to be aware of and practice efficient waste man-agement by recycling and segregat-ing their waste at source. We hope the 800 – WASTE (92783) number will create greater awareness and lead to more people disposing waste in the most environment friendly manner.”
Dulsco’s Waste Management Services (WMS) is strongly commit-ted to protecting the environment. The division collects and disposes hazardous and non-hazardous solid and liquid waste to landfills and treatment facilities in compli-ance with the laws and regulations of the Municipality Environment and Safety Section. WMS is the first waste management company in the UAE to be ISO 9001: 2008 and ISO 14001:2004 certified..
Al Gurg paint is on the bridge to Palm Jumeirah
DU
BA
I RE
AL
TIM
ES
45
Al Gurg paint is on the bridge to Palm Jumeirah
APPOINTMENTS
Tanmiyat Group, a Middle East developer and investment com-pany, has appointed Dr. Marwan Ibrahim Alahmadi as the new Chief Executive Officer of the group.
The Chairman of Tanmiyat Group, Sheikh Sulyman bin Ab-dulaziz Al Majed said, “He brings a wealth of experience to us from his
Restructuring top managementC
asamia Star Real Estate Broker LLC has announced a complete restructuring in its top management
team as part of its efforts to further boost its regional client base. Its for-mer CEO Mr. Hendrik Hommel, who continues to hold his previous re-sponsibility, will spearhead the new
team. The company also announced the appointment of Mr. Khaled Kadik as the new Managing Director and Mr. Merzak Gaci as the new General Manager.
Announcing the new team, Mr. Hommel said: “The Board of Direc-tors decided to announce a new team to spearhead the growth
trajectory of the company in the changed global economic and re-gional real estate landscape. We are in extraordinarily challenging times that require innovative solutions, and aggressive, unprecedented ac-tions. We have identified, evaluated and debated a variety of different business models and strategies to
realise our economic potential. The new management team is a pivotal step in this direction.”
Mr. Kadik and Mr. Merzak’s exten-sive knowledge about the real es-tate industry will play a pivotal role in driving Casamia Star L.L.C’s initia-tives and help achieve its objectives, he added.
Casamia Star LLC is a merger between two leading German names, real estate expert Casamia Star LLC and world renowned architectural firm Gesamtplanungsbuero. Established by renowned architect Hendrik A. Hommel, included the project nicknamed ‘Largihaus’ building designed by Mr. Hommel and was featured in the Guinness Book of World Records 1989 (and years to follow) as Europe’s largest office building with surface area of 87,000 square metres. The company has eminent architectural experts specialising in Project Management, Architectural Design, Investing, Buying, Selling, Renting and Property Management.
years spent in the region’s leading organisations where he held a port-folio of senior executive responsi-bilities, and we look forward to his bringing that record of expertise to Tanmiyat."
The former CEO of KSA-based Zain and the top executive respon-sible for heading the teams that launched its operations, Dr. Alah-madi is a renowned business and technical expert in the telecommu-nications sector.
“I am delighted to be taking on this role at such a fast-growing and prominent company with a portfo-lio of projects in KSA, UAE, Turkey, and Jordan. There are numerous op-portunities that currently allow the company to continue its expansion, and I am keen on building upon the company’s successful model and unique approach," said Dr. Alahmadi who will be responsible for manag-ing the Tanmiyat Group investments globally.
National Paints has announced that its Chairman, Salim Sayegh has been appointed as the President of the Building Materials Division of the Arab Union for Real Estate Develop-ment (AURED). Eighteen countries recently joined together to form this first ever umbrella organisation for the region’s property market. The announcement was made during a three-day conference on the estab-lishment of the union held in Cairo, Egypt, attended by representatives from all Arab countries.
This latest development reflects the important position of the real estate market in the Arab world. The industry provides employment
opportunities for about four million Arab nationals. It also contributes 18 per cent of the total Arab economy
Salim Sayegh said: “This confer-ence marks the first step towards establishing strong cooperation be-tween Arab real estate companies and organisations. We will work ef-fectively to lay the right foundations and to explore the best opportuni-ties that will allow us to fully lever-age available resources. We aim to meet the requirements of all busi-ness activities related to the sector, and firmly believe that this initiative will have a positive impact on the development and support of Arab real estate activities. We shall pro-mote the exchange of experiences and unified efforts to overcome the challenges faced by this sector.”
Jess Stoffer, President of the World Conglomerate of Interna-tional Real Estate Unions, delivered a speech in which he confirmed the approval of the inclusion of the Arab Union in the international group. He invited attendees to participate in international conferences to be held in Madrid and San Diego.
Dr. Marwan Ibrahim Alahmadi
Salim Sayegh
DU
BA
I RE
AL
TIM
ES
46
MARKET TRENDS & ANALYSIS //
Q & A Your questions answered by Jacqueline Latham, DLA Piper Middle East LLP
Q. My tenancy agreement is due to expire in a month. I have been in negotiations with my landlord about renewing the lease at a cheaper rent. My landlord has come back to me and now says that I must leave because he wants to live in the property. Is this possible?
In the event that a landlord (or his "first degree" relative) wants to move into a property that already has a tenant in place, the general position is that the landlord must give the tenant notice, by way of a Notary Public or registered mail, 12 months' prior to the tenancy contract expiring. If the tenant is evicted at the end of the tenancy contract on the grounds that the landlord wishes to use the property himself or for a first degree relative, the landlord may not lease the property to another tenant for at least two years for residential properties, and three years for non-residential proper-ties, both periods commencing from the date of recovering the property, unless the relevant judicial committee decides a shorter period is appro-priate. Q. I work in the sales department of a development company and we have been selling units off-plan for some time. However, lately some purchasers have defaulted on their obligations under their SPAs. I have heard that new measures have been introduced concerning off-plan sales and I would like to know if these will affect refunds to purchasers.
Yes. Law No. 9 of 2009 was recently issued and it amends Article 11 of Law No. 13 of 2008, which essentially dealt with the monies a developer can retain in the event of a purchaser's default in respect of an off-plan pur-chase. The new Law gears the amount that a developer can retain against a percentage-based construction milestone. For example, if 60% - 79% of a development has been completed, the developer can retain 40% of the purchase price, as specified in the sale and purchase agreement. Law 9 of 2009 also provides that the Real Estate Regulatory Authority (RERA) may cancel a project upon consideration of a ground-based report. In such an event, a purchaser will receive a full refund in accordance with Law No. 8 of 2007 concerning escrow accounts of real estate developments in the Emirate of Dubai. Therefore, it is important to be familiar with the project completion bands and how it will affect the monies that a developer can retain if a purchaser defaults.
Q. We developed a property 18 months ago and have received some complaints from several purchasers about cracks appearing in their
LAWS & REGULATIONS//UPDATES
walls. We are being told by these purchasers that we must rectify the defects but as the developer, is this really our responsibility 18 months down the line?
A developer can be held accountable because Article 26 of Law No. 27 of 2007 concerning the ownership of joint properties (condominiums) in the Emirate of Dubai, places an obligation on developers in respect of struc-tural defects for a period of 10 years and installed defects for a period of one year, both periods commencing from the date the completion state-ment has been obtained. However, you may take some comfort from the fact that Article 880 of the Civil Code (Law No. 5 of 1985) provides that an engineer and a contractor working under the engineer, will both be liable to their client (presumably developers) for structural and installed defects for a period of 10 years commencing from the time of delivery of the work. Q. I am a French national, currently based in KSA, and I was visiting Dubai with my family earlier this year. We really enjoyed our trip and as a result, we have been considering purchasing a property in Dubai. We were taken by some of the villas we drove past in Jumeirah but a friend told us that there could be some restrictions on where we can buy. Is this true?Yes. The areas designated for foreign ownership in Dubai are set out in Regulation No. 3 of 2006 concerning the determination of areas where non-locals can acquire properties in the Emirate of Dubai, which pre-scribes a list of areas where non-nationals can acquire absolute ownership (essentially, freehold) or usufructs of up to 99 years: for example, there are plots on Palm Jumeirah and at Dubai Marina, which are designated areas. It is useful to obtain the actual plot reference, as per the title deed of the property in question, and check the reference against the areas listed in the regulation. There are, however, areas in Dubai which are commonly thought to be designated areas but these have not in fact been legally designated as such, and therefore, a developer cannot validly claim that it has been. It may be the case that these areas will be designated as areas permitting foreign ownership in the future, but this is a risk which you may or may not wish to take.
Jacqueline Latham is a Legal Consultant (England and Wales qualified), Real Estate at DLA Piper Middle East LLP, Dubai, www.dlapiper.com
DU
BA
I RE
AL
TIM
ES
47
LAWS & REGULATIONSUPDATES //
Law No. (9) of 2009
Law No. (9) of 2009 amending some provisions of Law No. (13) of 2008 Regulating the Interim Real Estate Register in the Emirate of DubaiWe, Mohammed bin Rashid Al Maktoum, Ruler of Dubai
After taking into consideration Law No. (8) of 2007 Concerning Guarantee Accounts of Real Estate Developments in the Emirate of Dubai;
Law No. (16) of 2007 establishing the Real Estate Regulatory Agency;
Law No. (13) of 2008 Regulating the Interim Real Estate Register in the Emirate of Dubai (hereinafter referred to as the “Original Law”).
Issue the following Law:
Article (1)Articles 2 and 11 of the Original Law shall be replaced with the following text:Article (2)The following words and expressions shall have the meanings set out opposite them unless the context otherwise requires:
Emirate : Emirate of Dubai.Department : Department of Lands & Properties.Establishment : The Real Estate Regulatory AgencyReal Estate Register : The Real Estate Register maintained by the Department.Interim Real Estate Register : A set of documents kept in written or electronic form in the electronic register at the Department in which all contracts for the sale of real estate and other dispositions off plan are recorded before being transferred to the Real Estate Register.Real Estate : Land and permanent structures erected on it.Real Estate Unit : The subdivided part of the real estate including any subdivisions off plan.Off Plan Sale : Sale of subdivided real estate units off plan or not yet completed.Master Developer: A person licensed to develop real estate and sell its units in the Emirate.Sub-Developer : A person who develops part of a real estate project of a Master Developer under an agreement between them.Broker : A person engaged in real estate brokerage activities pursuant to Regulation No. 85 of 2006 regulating the Register of Real Estate Brokers in the Emirate of Dubai.Competent Authorities : The authorities concerned with licensing and registering real estate projects in the Emirate.
Article (11)1. In the event that a purchaser defaults on any term of the contract he made with the Developer
for the sale of a Real Estate Unit, the Developer should notify the Department accordingly and the Department will then give the purchaser 30 days notice to fulfill his contractual obligations, by hand, registered post or email.
Translation and views supplied by Al Tamimi & Company and do not necessarily reflect RERA’s point of view
DU
BA
I RE
AL
TIM
ES
48
Law No. (9) of 2009
2. If at the end of the period referred to in sub-clause 1 of this Article the purchaser has not fulfilled his contractual obligations, the following provisions should apply:
a. If the Developer has finished not less than 80% of the real estate project then the Developer may retain all amounts paid and request the purchaser to pay the outstanding amounts of the contract value. If this not possible the Developer may request the sale of the real estate at a public auction to obtain the outstanding amount.
b. If the Developer has finished not less than 60% of the real estate project then he may terminate the contract and forfeit not more than 40% of the real estate unit value as mentioned in the contract.
c. If construction of real estate projects has commenced but has not reached 60% the Developer may terminate the contract and forfeit not more than 25% of the real estate unit value as mentioned in the contract.
d. In projects where construction has not commenced for reasons outside the Developer’s control and without any neglect from his side the Developer may terminate the contract and forfeit not more than 30% of the amounts paid by the purchaser.
3. For the purpose of paragraphs c and d of sub-clause (2) “construction” means that the Developer has taken possession of the real estate project site and has commenced construction works as per the designs authorised by the Competent Authorities.
4. For the purpose of paragraphs b, c and d of sub-clause (2) the Developer must return the due amounts to the purchaser within one year from the date of termination or within 60 days from the date of resale of the real estate unit whichever first occurs.
5. Notwithstanding what is mentioned in sub-clauses 1 and 2 of this Article the Establishment pursuant to a report may decide to cancel the real estate project and in this case the Developer should return all amounts collected from purchasers as per the procedures and provisions stated in Law No. 8 of 2007 concerning guarantee accounts of real estate developments in the Emirate of Dubai.
6. The provisions mentioned in this Article do not apply to plot sale contracts where off-plan sales in the plot have not commenced as in such case it remains subject to the terms mentioned in the contract entered between the two parties.
7. The provisions of this Article apply to all contracts entered into before this Law came into effect.
Article (3)This Law shall be published in the Official Gazette and shall take effect from its date of publication.
MOHAMMED BIN RASHID AL MAKTOUM RULER OF DUBAI
Issued in Dubai on 12 April 2009.
