Dubai Constructions Update by Imre Solt: June 2009

Tuesday, June 30, 2009

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Danube unveils AED 20 million expansion plan for ‘DANUBE BUILDMART’ in the UAE

Danube unveils AED 20 million expansion plan for ‘DANUBE BUILDMART’ in the UAE

Two new retail stores to open in Ibn Battuta Mall and Dubai Festival City

June 30, 2009

Danube Building Materials, the leader in construction, building materials and shop fitting industries, has announced an AED 20 million expansion plan for its retail complex chain ‘DANUBE BUILDMART', with new branches expected to open in two leading shopping malls in Dubai - Ibn Battuta Mall and Dubai Festival City. The stores will offer a wide range of reasonably-priced interior fixtures to cater to the requirements of individual homeowners and designers. Company officials also revealed that the Ibn Battuta Mall and Dubai Festival City branches would be inaugurated by September and December 2009, respectively.

‘DANUBE BUILDMART’ offers a personalised retail store experience with excellent service, design assistance, and inspiration to help people redecorate their homes. With a combined area of 15,000 sq. ft, both retail complexes are set to offer 15,000 different products ranging from chandeliers, wall paper collections, luxury sanitary ware, Venetian blinds, carpets and curtains, among others. In addition to a vast array of products on display, the new ‘DANUBE BUILDMART’ branches will also have ‘Design Centres’, where customers can acquire consultation and after sales services from Danube’s interior design experts.

“Merely a month after the launch of the first two independent ‘BUILDMART Boutique’ branches in Dubai and Abu Dhabi, we are proud to announce that we are gearing up for the opening of our first in-mall stores within two of the most prominent shopping destinations in the UAE,” said Rizwan Sajan, Chairman, Danube Building Materials. “The success of our ‘DANUBE BUILDMART’ concept stems from the exceptional amount of market research we have conducted to be in touch with the needs and requirements of customers for interior fixtures, and we are expecting that this will hold the momentum of continuous growth for the ‘DANUBE BUILDMART’ brand across the UAE and the rest of the GCC in the future.”

Spanning 7500 sq. ft. each, the first two ‘BUILDMART Boutique’ showrooms are located in Dubai (Salauddin Road, Deira) and in Abu Dhabi (near Al Falah Plaza), and offer more than 15,000 different products. As part of its extensive expansion initiative, Danube also launched ‘BUILDMART’ earlier this year, a massive retail complex that incorporates a 20,000 sq. feet showroom, a 40,000 sq. ft. warehousing section, and a huge open area for additional shops and parking. Located along Zaid Road in Ras Al Khaimah, the facility is benefiting all contractors, joineries and architects in and outside the emirate by offering a complete selection of home interiors and building materials under one roof and design options that cater to varying budgets.

“As evident in our efforts to grow our recently inaugurated operations in Bahrain and cultivate opportunities in the impending launch of our KSA operations, the rapid expansion of the ‘BUILDMART’ brand, not only in the UAE but across the region as well, is an indication of the effectiveness of our business strategy. This also reflects the continuous constriction activities in the region amidst the recession, and as a market leader in the region, we are intensifying our efforts to fuel growth within the industry and in effect, the Middle East economy,” concluded Sajan.

Stabilising property prices to usher in first signs of growth in fourth quarter of 2009

Stabilising property prices to usher in first signs of growth in fourth quarter of 2009

Sherwoods urges stakeholders of Dubai's property market to focus on 'positive attributes of global recession'

June 30, 2009
Sherwoods Independent Property Consultants has announced that it has noted a steady shift of property prices in Dubai towards more reasonable levels, as the real estate market enters a new phase that will serve as a springboard to recovery. Sherwoods further expects to see concrete signs of growth in terms of property prices and real estate investments starting in the fourth quarter of 2009, even as it predicts 2010 to be a year of stabilisation and new direction for the real estate industry.

Sherwoods attributed the impressive performance of the property market in the heat of the global economic downturn to Dubai's decision to enhance infrastructure development in the emirate. Sherwoods likewise credited key industry players for quickly adjusting to the dramatic changes in the market environment, while urging them to focus on the "positive attributes of the global recession."

Iseeb Rehman, Managing Director, Sherwoods Independent Property Consultants, said: "I would say that the prices have been corrected to reasonable levels, which has created more value offerings to buyers and investors. The positive signs we are seeing should result in more tangible proof of growth around the fourth quarter of 2009, during which property prices will further stabilise and we can also expect a marked increase in property investment."

"Furthermore, 2010 should be a year of stabilisation and direction as Dubai transitions into a more stable and robust market for property investments. I would like to point out that the prices available today are conducive for long-term investment and should make good profit in the long term. I would therefore not advise anyone to enter the market for short-term investments at this point of time," he added.

Sherwoods revealed that at the height of the economic downturn during the first half of 2009, Dubai's property sector has been able to stay in relatively good condition because of the significant reduction in the number of speculators in the market, a major positive development that has been remarkably attributed to the downturn. Sherwoods also pointed out that the recession gave Dubai an opportunity to consolidate its real estate regulations and legal framework, while delivering equilibrium in the demand and supply levels of the market.

"The property market has managed to use the positive attributes of the global recession to its advantage, which has resulted among others, in the decline of speculators in the market. It has also brought more clarity on regulations and helped better define the legal framework regarding real estate issues. Nonetheless, the past half year was indeed a challenging period, and one that has not been tackled by the market before. On the other hand, it has allowed us to expand our understanding of market dynamics, which will lead to better judgement in the future," said Rehman.

Sherwoods also credited Dubai's commitment to aggressively pursue key infrastructure projects such as the Dubai Metro amid the searing global economic difficulties as important steps that helped sustain international interest and attention on Dubai.

Puniet Singh, Chief Executive Officer - India Operations, Sherwoods Independent Property Consultants, said: "Dubai’s focus on continuous investment in infrastructure is its main strength in dealing with the economic slowdown. The icing on the cake is the mobilisation of the Dubai Metro and opening up of the Burj (Downtown), which should attract the world's attention again towards Dubai."

Sherwoods also described as "extremely positive" the initiatives undertaken by RERA to protect Dubai's property market, although it noted that there is still a lot of work waiting ahead. Sherwoods disclosed that RERA will have a critical role in boosting the confidence of consumers and investors, who now have high expectations in the next few months as they look forward to reenergised lending and financing facilities, stabilised market prices, and better performance by developers particularly in terms of prompt delivery of projects.

"I think the effort put in by RERA has been extremely positive, but the challenge is to continue to carve out and enhance the regulatory framework and to ensure adherence of the same from all segments of the industry. Also, I think they now have to focus on sending positive signals into the market and make sure that the interest of every segment of the real estate industry is taken care off," Rehman added.

"I also strongly believe that brokers and developers must fulfil their basic responsibilities as they also play a crucial part in the process of market rehabilitation. Brokers must make sure to conduct due diligence on all real estate projects before they market any property. The developers, on the other hand, have a massive social responsibility of delivering what their investors have purchased and to safeguard their investments," concluded Rehman.

Founded in 1988 in the UK by Iseeb Rehman, Sherwoods has grown to become one of the leading international real estate companies. Sherwoods has established several international branch offices in the UAE, UK, France, and soon in other key locations around the world. The company offers a diverse range of services, including search & acquisition of properties; development consultancy, land appraisals and valuation; sales & lettings of residential/commercial property; new home sales; residential & commercial property management services; legal, tax and insurance services; and mortgage & remortgage.

Monday, June 29, 2009

View from The Torch Tower, Dubai Marina photos, June 2009

View from The Torch Tower, Dubai Marina photos, June 2009

Dubai will rediscover its basic business appeal without the glitz, to lead the real estate sector to a sustainable recovery says expert

Once we get there – then what?

Dubai will rediscover its basic business appeal without the glitz, to lead the real estate sector to a sustainable recovery says expert

Many industry commentators have now agreed that Dubai will soon start to see the green shoots of recovery. During a recent Cityscape Connect forum, a panel covering the industry spectrum from investors to real estate agents agreed that Dubai’s property market would start to sprout green shoots sometime between January and June next year.

However the big question now is what shape will the recovery take and even more importantly, how will we know that it is sustainable?

According to Mohammed Nimer, CEO of mid market property development company MAG Group Properties which is involved in AED3 billion worth of projects in the UAE, “The fact that there is a general consensus regarding the end of the downturn is important, but we should now be looking ahead and asking ourselves, how do we make the recovery sustainable, indeed what will sustainable look like?”

Much has been made about the shape of the recovery, V shape, U shape, L shape, W shape or perhaps even a square root shape.

“A V shape recovery would be a disaster - straight back to boom and bust. The others are really a variation on how quickly we pick up, but as always it will be the fundamentals that lead us to sustainable recovery,” added Nimer.

According to Nimer, the key economic indicators are still positive and improving as we move into the second half of the year. The IMF is forecasting UAE economic growth of around 3%. The gap between loans and deposits at UAE banks narrowed in May to AED31 billion, a decrease of nearly AED5 billion since April. The figure had stood at AED90 billion at the start of 2009.

UAE bank lending grew for the first time in May since December 2008, when loans increased to AED207 billion from AED201 billion a month earlier, an increase of 2.9%, despite concerns over AED2 billion outstanding on credit cards 10% of which may default.

“The oil price has doubled since the turn of the year and seems to have stabilised at around $70 a barrel, even though the summer is traditionally a time for weaker prices with less demand for heating oil in the west,” said Nimer.

However concerns remain with population and unemployment which are inextricably linked in the UAE. It is a hot topic at the moment - how many expatriates will not return after the summer break, or may return alone without their families?

All should be revealed by October, but certainly for those who do return, they will be welcomed by more affordable housing. According to Landmark Advisory, rental prices are coming down and Q3 this year will witness falls of up to 25% as more new-build supply comes onto the market.

“I don’t subscribe to the view that people will upgrade their accommodation necessarily, but where I do see pent up demand is from mid management professionals who in the past have had to share accommodation. The size of that potential market must be considerable,” said Nimer.

It has also been widely reported that those expatriates that have lost their jobs and return home may be unwilling to ‘forgive’ Dubai and try again to resume their careers here? Nimer disagrees.

“Some may have no alternative, with their home economies still sluggish with high unemployment. Dubai will by default rediscover its basic appeal but without the glitz – a safe and secure, tax free environment with an advanced infrastructure. That will be too much for expatriate entrepreneurs and business professionals to resist and I firmly believe that they will return.”

In summary, Nimer added, “The recovery will be gradual and sustainable. If I had to put a shape to it, it’s probably a square root, the fundamentals are sound, property is becoming more affordable through basic supply and demand, which in turn cuts business costs whether its commercial rent or employee housing allowance.”

Photo caption: Mohammed Nimer, CEO of MAG Group Property Development

About the MAG Group

The Dubai-based Moafaq Al Gaddah Group of Companies (the MAG Group) was established in 1978 and has grown into a multinational organisation with 18 offices in eight countries throughout Europe, the Middle East and Asia.

In the last five years the MAG Group Properties has invested in 12 properties at various stages of development across the residential, commercial and industrial sectors. The company focuses on projects that provide long-term benefits to investors and customers.

In total MAG has a property portfolio in excess of AED3 billion and was one of the first developers to create Escrow accounts for all of its projects, long before the Dubai Government introduced Law number 8. In October last year, MAG Property Development was awarded ISO 9001 certification by risk management company Det Norske Veritas (DNV). MAG still remains one of the few developers in the region to be accredited to that standard.

RAK Ceramics conferred SuperBrand status in the UAE

RAK Ceramics conferred SuperBrand status in the UAE

Recognised by the SuperBrand Council for its premium-quality product line and trend-setting designs

June 29, 2009
RAK Ceramics, the largest ceramic tiles & sanitaryware manufacturing company, has announced that it has been voted by the SuperBrand Council, the world's largest independent brand arbiter, as one of the UAE's SuperBrands for 2009. RAK Ceramics was presented an award during the SuperBrand Tribute event that was held yesterday (June 28, 2009) at the Al Ras Ballroom, Intercontinental Hotel, Dubai Festival City. The company will also be featured in an exclusive publication that will include all SuperBrands of 2009.

RAK Ceramics has been recognised for being one of the world's leading producers of a comprehensive line of premium-quality ceramic products. The company offers one of the industry's widest selection of colours, textures and finishes as well as an extensive array of coordinating trim and angle pieces, in line with RAK Ceramics' core values of excellence, fashion and trend-setting designs.

Dr. Khater Massaad, CEO, RAK Ceramics said: "Being named a SuperBrand is a very important milestone for RAK Ceramics, validating our company's genuine commitment to deliver high-quality and trend-setting ceramic products. This distinction has definitely inspired us to further raise the bar of excellence and consolidate our position as a global leader in the ceramics industry."

RAK Ceramics has firmly established itself as a premier ceramics brand within a short span of a little over 10 years. The company's top-quality products include world-class ceramic wall and floor tiles, Gres Porcellanato, and sanitary ware. With its latest distinction, RAK Ceramics joins the elite ranks of iconic brands such as IBM and Starbucks, which have all been conferred SuperBrand status in the UAE.

The SuperBrand Council consists of eminent personalities in the world of branding and seeks to pay tribute to established brands all over the world. The SuperBrand Council also produces various publications featuring the world's SuperBrands. Being voted a SuperBrand serves as a powerful endorsement and evidence for existing and potential customers, media, suppliers, investors and employees of a brand's exceptional status.

RAK Ceramics is a USD 800 million global conglomerate in the ceramic industry that exports its products to over 135 countries, targeting architects, project developers and retail customers. The company offers a perfect blend of technical finesse and aesthetics through thousands of designs in ceramic tiles, Gres Porcellanato, and several models in sanitary ware. RAK Ceramics has an installed capacity of 325,000 square meters per day for tiles and 12,000 pieces per day for sanitary wares globally. At its headquarters in Ras Al Khaimah it has 10 modern tile plants and two sanitaryware plants. The company has manufacturing subsidiaries in Bangladesh, Sudan, India and Iran, along with subsidiaries in Italy, Germany, Georgia, France, UK, Australia and Saudi Arabia. It has diversified into making products such as Adhesives & Grouts (Laticrete-RAK), Faucets (Kludi RAK), High end tableware (RAK Porcelain), Paints (RAK Paints) and a few other ventures.