Apartment and villa rents in Dubai rise 1% - villa sales prices increase 4% - Abu Dhabi apartment and villa rents on average decline 5% - residential

A tale of two cities for UAE property market in Q1 2012

Apartment and villa rents in Dubai rise 1% - villa sales prices increase 4% - Abu Dhabi apartment and villa rents on average decline 5% - residential property prices to fall further, says latest Asteco report

The UAE’s residential property market witnessed mixed results in the first quarter of this year as Dubai remained steady building on last year’s trend of stability while Abu Dhabi saw significant declines as improved quality supply was handed over, according to the Q1 2012 report from leading UAE property management company Asteco.

“We are seeing further signs that confidence is returning in Dubai as the residential market continues to recover. Rents in some areas have risen as quality developments slowly reach full occupancy,” said Elaine Jones, CEO, Asteco Property Management.

In Dubai rental rates for apartments and villas rose by 1% compared to Q4 2011, while sales prices for villas increased by 4% during the same period, driven by the increasing numbers of owner-occupiers in areas such as Arabian Ranches, Emirates Living and Jumeirah Village.

The average yearly rent for a one-bedroom apartment in Downtown Dubai was AED70,000 during the first three months of the year, up 5% from the previous quarter while the average rent for a one-bedroom apartment in Jumeirah Lakes Towers rose by 3% to AED45,000.

In the Meadows the average yearly rent for a four-bedroom villa increased by 3% to AED210,000 in the first quarter while a four-bedroom villa in Arabian Ranches were leasing for AED175,000, up 2% from the fourth quarter of 2011.
In terms of sales prices for apartments, Discovery Gardens saw further declines due to the large amount of supply but prices were stable to slightly higher overall.
The average yearly sales price for an apartment on Palm Jumeirah rose by 9% to AED12,900 per square metre during the first quarter while in the Greens prices increased by 3% to AED8,600 per square metre. Both areas are popular with executives and families.

In Abu Dhabi, apartment and villa rents decline 5%. Increased project handover are underway with some 3,000 residential units being delivered at Al Muneera and Al Zeina at Al Raha Beach as well as 1,455 units which are now ready for occupation at Marina Square, Reem Island. The remaining 2,030 units at Marina Square are expected to enter the market over the next six months.
The increase in supply in the higher-end segment of the apartment rental market in Abu Dhabi is likely to result in further downward pressure on rents,” commented Jones.

The average annual rent for a two bedroom prime apartment on the Corniche ranged between AED120,000 and AED160,000, off 6% from the previous quarter.
Rents for a two bedroom apartment on Al Raha Beach fell by 14% quarter-on-quarter to between AED105,000 and AED150,000 as a result of the large amounts of new supply handed over simultaneously in the area.

Villas witnessed similar declines with rents falling by as much as 13% in MBZ and Mussafah as large amounts of average to low quality stock was handed back to landlords. Sales prices for villas in Al Raha Gardens, Golf Gardens and Al Reef Villas were largely unchanged however, once again highlighting that good quality villa communities are still in demand.

In the commercial market, rental rates across Dubai’s office market eased by 1% on average despite healthy enquiry and transaction levels as pending and upcoming supply continued to weigh. Rents in Bur Dubai eased by 6% but popular business districts with limited commercial space fared better and achieved higher occupancy rates.

Office sales prices saw marginal declines of 2% on average as a result of low transaction activity. Biggest declines were seen in Business Bay and DIFC where prices fell by 7% and 6% respectively.

Activity in Abu Dhabi’s office sector has slowed compared to the previous quarter as companies continue to take a cautious approach towards expansion or relocation plans. Landlords of older buildings are becoming more competitive in their asking rents, which has led some firms to review their plans to relocate.
In Al Ain, the recent handover of several villa and apartment compounds has resulted in a wider range of accommodation options for residents, and therefore an increasing flight to quality. Overall residential rents have remained relatively stable in the first quarter. However office rents in Al Ain fell by 10% compared to the previous quarter, due largely to limited enquiry levels and a lack of quality supply enticing existing companies to move.

For more details, please visit www.asteco.com

To view the full Asteco Q1 reports please visit www.astecoreports.com


Asteco, a major regional and international real estate services firm and the largest property services company in the United Arab Emirates, was founded in Dubai in 1985. Asteco offers independent market analysis, design development consultancy and valuation services, sales and leasing services, as well as asset and property management services.

Asteco:Affordable homes gain traction in Dubai

Affordable homes gain traction in Dubai

Asteco Q3 report finds lower-end stability across the city but high-end property sales and rents nudged down 4% and 6% respectively – office tenants defer decisions

Sale prices in a number of freehold communities across Dubai remained stable in Q3 this year compared to the previous three months, according to the latest report by leading Dubai-based property management company Asteco.

The Asteco Dubai Q3 Report 2010 published today (2 October 2010), revealed that, although further price adjustments are expected in the near future, affordable apartment developments, such as Discovery Gardens and Jumeirah Lake Towers (JLT) remained at AED 500 and AED 750 per sq ft respectively for the three months to the end of September.

“Asteco has recorded an average drop of 6% for [apartments]. This is mainly attributed to the increasing supply of apartments. However, we have also seen increased sales activity, predominantly due to owners who are expected to take handover of their unit but are unable to make the final payment, which often constitutes a large percentage of the overall sales price,” said the report.

This trend was also mirrored within Downtown Burj Dubai, which despite being at the opposite end of the price spectrum still commanded AED 1,300 per sq ft throughout the same period.

Despite demand for townhouses and smaller villas picking up speed – a trend Asteco expects to continue in the short-to-medium term – during Q3 it was properties in Emirates Hills, Jumeirah Islands and the Green Community that remained unchanged price-wise at AED 1,600, AED 950 and AED 700 per sq ft respectively.

“There has been a change in focus in the real estate sector as maximising rental yields and long-term capital appreciation takes precedence over short-term sale profits, with pro-active property management being a key factor,” said Elaine Jones, CEO, Asteco Property Management.

The rental market in Dubai has followed much the same pattern as the sales sector with price shifts favouring tenants.

Despite an overall apartment rental contraction of 6%, units in JLT slid just 2% with 3% adjustments in Discovery Gardens and Downtown Burj Dubai.

“The number of transactions, which are generally at their lowest during the summer and Ramadan, has been surprisingly active with a number of people taking advantage of the quiet months to look for value for money accommodation. Therefore, the drop in rents has proved to be less significant than in Q2. Although further declines across the board cannot be ruled out, the drop in [Discovery Gardens and JLT] is expected to be less noteworthy due to the already lower rents,” explained the report.

The villa rental market fared slightly better with average declines of just 4% over Q2 on the back on increased stock coming on the market in out-of-town developments in Dubailand and Dubai Silicon Oasis. Despite this, rates in the Green Community and on Palm Jumeirah remained unchanged with the market expected to gain momentum in the coming months as tenants look to upgrade from apartments.

“With an increase in activity over the summer, we expect this momentum to continue in Q4 2010 with expected demand predominantly coming from tenants looking to move from apartments to villas as rental levels continue to adjust. Villa rental rates seem to be more robust compared with apartments, which in part has to do with the fact that the current and future supply of villas is marginal compared to apartments,” said the report.

Meanwhile, the office market completed a relatively positive quarter in Dubai with average contractions of just 3% in the rental sector. But while small businesses have moved out of Dubai Internet and Media cities over the past three months, others are deferring decisions until Q4 as long-term downward pressure is likely within the planned supply.

“Long-term anchor tenants are expected to renegotiate lower rental rates whilst minimal relocation demand exists, however this will be tested as new supply enters the market and companies take advantage of better locations and facilities,” added the report.

For more details, please visit www.asteco.com

About Asteco
Asteco, a major regional and international real estate services firm and the largest property services company in the United Arab Emirates, was founded in Dubai in 1985. Asteco offers independent market analysis, design development consultancy and valuation services, sales and leasing services, as well as asset and property management services.

Dubai real estate to benefit from higher tax rates in UK as chancellor seeks to narrow £178 billion deficit

UAE real estate to benefit from UK tax hike

Dubai real estate to benefit from higher tax rates in UK as chancellor seeks to narrow £178 billion deficit

Real estate professionals in Dubai are waiting for a potential exodus of UK residents desperate to escape UK Prime Minister Gordon Brown’s new 50% tax rate for individuals earning over £150,000 (AED 900,000) which will come in to force in April 2010 affecting tens of thousands of UK professionals.

“Under the new UK tax rules, somebody with a personal income in excess of £200,000 (AED 1.2 million) will have to pay £5,000 (AED 30,000) more per year in tax. That’s a very strong incentive to relocate to lower or tax-free environments such as the UAE,” said Mohammed Nimer, CEO of MAG Group Property Development.

The tax ceiling rate has been raised as the UK tries to manage its burgeoning deficit of £178 billion. According to a poll by international law firm Withers, 75% of respondents, made up of high net-worth individuals in the banking, insurance, recruitment and accountancy sectors, confirmed that it would be likely for them to move abroad within the coming year. In addition, seven out of ten said they would move their family and their business overseas.

“Although the survey only took in 116 delegates at the conference, it is representative of the professional white collar ‘City’ worker in London. These people are highly educated, highly paid and more importantly highly fluid. They have the sort of job or business that are technologically driven and therefore can easily be adapted to another country,” said Nimer.

The survey was carried out by Withers during a conference on the comparative tax and lifestyle advantages of staying in the UK or moving abroad. Of potential countries to relocate to, Switzerland was by far the most popular with 63% of respondents. The Channel Islands pulled 13% of the vote with Hong Kong, Monaco, Singapore and the United Arab Emirates also mentioned as potential

“Obviously all of these countries have low tax regimes with the exception of the UAE which obviously has a zero income tax rate. Residential and commercial real estate in places such as Dubai will benefit from this. With deficits almost out of control in Portugal, Ireland, Greece and Spain (PIGS) the Euro has come under increasing pressure of late and the UK exodus might just be the thin end of the wedge if tax rates rise significantly across the Eurozone,” said Nimer.

In summary, Nimer added, “Although huge tax savings can be a massive incentive to relocate to the UAE, it has much more appeal, not least of all its safety and security, top private education and beautiful winter climate.”

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.

Real estate got less negative coverage in Q3, says new media intelligence report

Real estate got less negative coverage in Q3, says new media intelligence report

Signs of recovery were reflected in positive share of voice for real estate developers, with projects getting back on track


Dubai, UAE, 22nd November, 2009:

The Mediastow Q3 report on the real estate industry has revealed that negative coverage of the property sector has decreased considerably in the third quarter, compared to the same period last year.

The report, the fifth in the series, analyzed the media coverage of the UAE real estate sector, with a focus on Al Qudra Real Estate, Aldar, Emaar, Sorouh, Dubai Properties, Nakheel, Sama Dubai and Damac.

The 34-page report assessed the success of the PR campaigns of the eight real estate developers, as well as threw light on how their media coverage fluctuated and how it compared with each other.

The head of Mediastow, Mohamed Elzubeir, said: “As for coverage, Damac and Emaar had their amount of coverage peaks in July 2009, while Al Qudra Real Estate, Sama Dubai and Sorouh had their peak in August 2009. Finally, the coverage of Aldar Properties, Dubai Properties and Nakheel peaked in September.”

Emaar, followed by Sorouh and Aldar, figured in the top 3 in terms of newspaper coverage size, measured in column centimeters (cc), in July and August 2009. September saw Nakheel in the lead, followed by Emaar and Aldar.

A total of 3,962 articles from 168 publications were monitored between July and September 2009 for the report. Also, stocks movements of Emaar, Aldar Properties and Sorouh were evaluated and correlated with media coverage.

A comparison of the facets of coverage, penetrations and content analysis are featured in this report. The report also contains the real estate sector highlights to put the performance in perspective of the current market issues.

Compared to the 3rd Quarter of 2008, there was a general drop in numbers, with some experiencing a bigger drop than others. Al Qudra, Emaar and Nakheel experienced significant decreases in the 3rd Quarter of 2009 , compared to the same period in 2008, in terms of volume of coverage.

In summary, the three property developers, Emaar, Aldar Properties and Sorouh, experienced an upward trend in the third Quarter of 2009. Aldar enjoyed a decent gap in terms of share prices throughout the quarter and inched further towards the latter middle part of September 2009.

Elzubeir added: "The overall volume of coverage has dropped compared to the golden era of the early 2008, but strong signs of recovery are evident. Negative coverage is now confined to the tumbling stocks, and positive coverage is increasing with projects getting back on track.”



About Mediastow

Mediastow is the Middle East and North Africa (MENA) leader in media monitoring and evaluation. Mediastow monitor print (newspapers and magazines), broadcast (tv and radio) and online (news sources, blogs, social media, forums) covering the globe. Mediastow also specializes in reputation analysis, media measurement and measuring relationships with stakeholders.

Established in 2005, Mediastow was the first Middle East-based company to join AMEC and the first to win an AMEC Award. Mediastow continues to maintain the same high level of excellence and innovation that keeps its clients ahead of the game.

Dubai real estate on road to recovery

Dubai real estate on road to recovery

Despite industry issues, market expected to see first signs of growth within 6 – 12 months say experts at Cityscape Connect forum

Although cash and confidence issues still prevail, Dubai’s property market will witness the first green shoots of recovery sometime between the end of 2009 and the second quarter of 2010, according to a panel of industry experts speaking here today (Tuesday 2 June) at the third ‘not for profit’ Cityscape Connect business breakfast,

Attended by more than 100 property executives, legal advisors and investors, the industry forums were initiated to stimulate networking, transparency and open debate on the key issues affecting the Dubai real estate industry which although experiencing a dramatic reversal of fortunes, is now showing signs that the market is stabilising and prices are beginning to bottom-out.

Elaine Jones, CEO of Dubai-based real estate agency Asteco echoed the sentiment of the panel: “It’s about cash & confidence. For example, we need to reduce interest rates, relax lending criteria and address the residency visa issue. This will at least start to bring back much needed confidence to the market and begin to stimulate growth.”

Indeed investor confidence was debated at length, examining numerous issues such as defaults, incomplete projects, late payments and fraud. “Trust is strained,” stated Sunil Gomes, of Guru Real Estate. “Credibility is king, if we lose that we have nothing. Projects must be completed and investors better protected.”

Steven Henderson, Partner in legal firm Clifford Chance, agreed that trust was paramount but added that the law had previously been struggling to keep up with the rapid growth of the market and that an over regulated market might have an adverse effect and stifle growth.

“Dubai has introduced Escrow accounts and the Strata law, but a federal law for real estate would also help to restore confidence. Banks also have a role to play here especially when developers experience credit or cash flow problems” he said.

Difficulties in the banking sector have been widely reported, however, the panel agreed that although credit was available for exceptionally low risk customers, besides rates and approval ratings, the sector needed consistency.

“Historically, the region has practiced ‘relationship lending’ but now with the credit crunch, banks are more cautious and have raised their minimum lending criteria especially for real estate projects. They can no longer just use the project as security they often also require ring-fenced assets independent to the project as security.”

However despite industry issues the panel was optimistically cautious about the timescale for recovery. Asked when Dubai could expect a market recovery, the general consensus was sometime between the end of 2009 and the second quarter of 2010.

“This clearly shows that industry sentiment has moved into positive territory and it is equally important that Cityscape through the Connect series of events continues to provide a platform for open debate. As the largest real estate event brand of its kind in the world, it is crucial in these times of economic uncertainty that Cityscape remains a trusted brand, giving back to the industry that it supports,“ said Rohan Marwaha, Managing Director of the Cityscape

Moderated by Bob Hird, Senior Director and Head of Investments at CB Richard Ellis, other industry experts on the panel included, David Macadam, Director of Commercial Division at Better Homes and Shahram Shamsaee, SVP Shopping Malls, Majid Al Futtaim Company.

Cityscape Connect is an initiative of Cityscape, the real estate service brand that has achieved international recognition and success. Cityscape events are held in Dubai, Singapore, Abu Dhabi, New York, Mumbai, Moscow, Saudi Arabia and Latin America. Cityscape events attract key industry figures such as international investors, property developers, governmental and development authorities, leading architects, designers, consultants and senior professionals involved in the property industry. Furthermore Cityscape has also established Cityscape Intelligence, an online subscription based service for real estate professionals, Cityscape Datamonitor, a real estate research consultancy, and the Cityscape magazine.

Photo-caption: Panel of experts address challenges facing the real estate industry at Cityscape Connect Dubai

Total value of real estate projects under construction in the GCC is more than USD 2.39 trillion

Total value of real estate projects under construction in the GCC is more than USD 2.39 trillion

DubaiFocus offers comprehensive and up-to-date information on property investment deals within Dubai real estate market
February 23, 2009

The total value of real estate projects under construction in the GCC is more than USD 2.39 trillion, reports FutureBrand - a REIDIN.com Information Partner. In addition, investments from across the GCC into the Dubai real estate market have crossed AED 5 billion in 2008, thereby underlining the emirate’s strong pull among regional real estate players and its role in driving the UAE’s position in global land sales rankings, where it currently holds the fourth highest spot. A comprehensive collection of reports and data on real estate deals and transactions within Dubai is being offered by REIDIN.com, the world’s first and leading global online information services provider, through its product ‘DUBAIFocus’, the first exclusive online information product that tracks real estate deals and transactions in Dubai.

In 2008, the UAE has accounted for 5.8 per cent of worldwide land sales, which also reflected an increase of 1.348 per cent since 2007, according to FutureBrand. The highest total GCC investment into Dubai came from the Saudi Arabian investors, who pumped over AED 2 billion into the market, followed by Kuwaiti investors, who have shelled out more than AED 1 billion. Although a distant third, Omani investments into the Dubai real estate sector have topped AED 818 million, which is followed by Bahraini and Qatari investors, who have injected AED 615 million and AED 117 million respectively into the emirate’s property market. Despite a projected slowdown on the UAE economy’s growth from an expected 7.7 per cent in 2008 to 1.5 per cent in 2009, real estate investments are still continuously being funnelled from various GCC countries, which indicate strong consumer trust in the market.

With an ever-growing repute as one of the top destinations for multibillion dollar developments, Dubai plays a pivotal role in the growth of the real estate market within the GCC. Although there are speculations of a drop on the GCC’s gross domestic product (GDP) in 2009 from 6 per cent to a minimal 2.8 per cent, continuous activity within Dubai’s real estate sector can still be expected due to the government’s efforts to soften the impact of the credit crunch by ensuring liquidity and supporting major developments.

According to information cited by REIDIN.com, the Dubai Government has spent about 33 per cent of its budget or USD 12 billion on infrastructure, with aims to cater to the emirate’s rapidly growing population, which welcomes a total of 25,000 people per month or 33 people per hour. With a comprehensive database dating back to 1973, ‘DubaiFocus’ provides daily information on all types of land, villa and flat deals, including sales, mortgage, lease, grant, inheritance that transpire within the emirate, with aims of addressing the unique requirements of real estate market professionals. As a testament to the credibility of its information, REIDIN.com’s exclusive partner and primary data source for this first-of-its-kind information service includes the Real Estate Regulatory Authority (RERA) and the Dubai Land Department.

“The real estate market is facing unique challenges today, with issues on liquidity and investor confidence posing significant threats to development progress and investment return promised by development companies to their customers. However, based on the trends, which we have established by looking into the extensive bank of market information at our disposal, we are positive that the Dubai property market will still be the busiest, as transactions and investments will remain comparatively high. With the USA and Europe reeling over the repercussions of the economic crisis, we predict a considerable rise in foreign investments who will be heading towards more stable regions such as the GCC, especially Dubai,” said Ahmet Kayhan, CEO, REIDIN.com.

In addition to DUBAIFocus, REIDIN.com's current products in the region include ‘INDEXFocus’ and ‘REBIS’ (Real Estate Business Information Service). As the world’s first and leading global online information services provider, REIDIN.com has entered into strategic partnership agreements with more than 70 major firms including CB Richard Ellis, Deutsche Bank Research, Pramerica Real Estate, NAI Global, ImpressMedia, ASSAP Media, EuropaProperty, HVS International, AMEinfo.com, AII, Xinhua Finance, Global Investment House, AT Kearney and the UNCTAD, to create a one-of-a-kind database that will be regarded as the most trusted source for information about the real estate sector in the emerging markets. For further information please visit: www.reidin.com.