Dubai’s affordable housing subdues demand in the Northern Emirates
- Average apartment rents in Sharjah, Ajman and RAK drop by 3%, 2% and 1% respectively year-on-year
- Apartment rents in master planned communities experience 2% average annual increase
The increase in affordable housing in Dubai is having a negative effect on rents in the Northern Emirates, according to the latest report from real estate consultancy Asteco.
The Northern Emirates Real Estate Report Q4 2016 revealed average rent levels declined marginally during Q4 2016 in the Northern Emirates, with Sharjah, Ajman and Fujairah witnessing decreases of 1% on average.
John Stevens, Managing Director, Asteco, said: “We could see further declines in 2017 if the supply of affordable property, continues to stifle demand in the Northern Emirates. Sharjah and Ajman are expected to experience more downward pressure on rates in comparison to Ras Al Khaimah and Umm Al Quwain.”
Over the year (2016), apartment rents in Sharjah fell 3%, on average, with a typical one-bedroom apartment renting for around AED31,000 per annum. This was not helped by the Sharjah Municipality’s decision in Q3 2016, to increase the rent attestation fee from 2% to 4% of the annual rent, which resulted in a reduced number of tenant relocations and upgrades within the Emirate.
“However, to arrest the slide landlords in Sharjah have offered rent-free periods and more flexible payment plans (six to 12 cheques) in order to retain existing tenants and attract new ones. For example, the newly completed Sahara Tower offered rent-free periods in order to increase occupancy levels,” added Stevens.
Apartment rates in Ras Al Khaimah fell, on average, by a nominal 1% year-on-year, although there was a 2% increase in master planned communities such as Al Hamra Village and Mina Al Arab, which outperformed mature apartment units due to enhanced product offerings and facilities.
On a cautionary note, Stevens said: “With the handover of more than 1,400 apartment units on Al Marjan Island, rental rates are expected to decline as better quality options will become available to tenants.”
Apartment rents in Ajman, on average, fell by 2% year-on-year, with a typical one-bedroom property now renting at AED31,000 per annum. Rents in Umm Al Quwain were unchanged year-on-year from 2015.
Meanwhile, the commercial sector in Sharjah remained flat throughout 2016 due to a lack of demand for office space. Rental rates in the newly handed over Al Marzouqi Tower decreased from AED65 per ft2 to AED55 per ft2. This was in addition to rent-free periods of up to three months offered by the landlord to encourage take-up.
Stevens said: “The Sharjah commercial market is expected to remain stable or, in some areas, show marginal rate declines during 2017 due to new supply combined with lacklustre demand for office space.
“On the other hand, the retail market in Sharjah and Ajman is expected to witness improvements with the handover of new supply such as Ajman City Centre, various retail outlets at Al Majaz Waterfront, and Zero 6 Mall.”
For more details, please visit www.asteco.com
Please click here for the copy of Asteco Northern Emirates Q4 report.
DLD announces work on building classification project
Dubai Land Department (DLD) has announced that its work on Dubai’s Building Classification project is now being carried out at an accelerated pace, with the organisation expecting to complete its survey of all buildings across the Emirate this year.
The announcement came following Dubai Land Department achieving a 50 per cent classification rate for all Dubai properties, with all buildings in the Deira district surveyed in 2016 and completion of the Emirate’s older areas now exceeding 70 per cent.
Sultan Butti Bin Mejren, director general of Dubai Land Department said: “We are proud that our Building Classification project is achieving success all across the Emirate, which aims to register all units and buildings including old properties located outside freehold areas. This initiative helps DLD to gain accurate and reliable information, to help the organisation document all properties within its database and respond to customer requirements quickly and easily.”
The project includes a comprehensive survey for all land plots, villas, commercial and residential buildings, factories, and shopping centres, with every building type in Dubai registered. This will contribute towards facilitating better procedures for property rentals, in addition to the classification of each property in Dubai reaching the utmost precision.
The Dubai Land Department in Dubai has previously taken steps to outline how owners need to cooperate with field engineers to facilitate their work, and to ensure success for this project with great importance for urban planning, according to Tradearabia news report.
Bin Mejren concluded: “We encourage everyone to be thoroughly cooperative with the project team to allow them to achieve their desired results. The resulting information will support transparency and data accuracy to serve customers in the real estate industry, spanning from government entities to the private sector.”
Dubai Land Department has trained the engineering team to only photograph real estate, and can confirm that there will be no filming of any personal or private areas. This initiative will respect everyone’s privacy by focusing only upon project-related data.
Damac officially opens Trump International Golf Club Dubai
Damac Properties, a leading developer of luxury properties in the UAE, has officially opened the Trump International Golf Club Dubai at its key property Damac Hills in Dubai, UAE.
To mark the launch, Damac Properties led a golf course tour, with guests of honour including Eric Trump, the executive vice president of The Trump Organization and Donald Trump Jr.
The 7,205-yard, par-71 Trump International Golf Club Dubai is located ten minutes from Sheikh Zayed Road and sits at the heart of the 42-million sq ft Damac Hills master development, said a statement from the company.
Damac pointed out that the new golf course exceeds all expectations. It has been designed by world-renowned golf course architect Gil Hanse, who also designed the course for the 2016 Olympics.
Damac Hills consists of over 4,000 luxury villas and 7,500 condominiums, in addition to hospitality, luxury shopping, spa and wellness, and leisure facilities, along with food and beverage components.
This unique collection of villas and apartments is now complemented by one of the most exclusive golf club settings in the emirate – the Trump International Golf Club Dubai, said the statement.
Speaking at the launch, Hussain Sajwani, the chairman of Damac Properties, said: “It is an international golf course that just joined the league of the most premium golf courses in the world. This achievement is one that certainly transforms the golfing scene in Dubai and across the region, reaffirming the emirate’s position as a global destination for world-class developments.”
“It is another landmark representing an addition to the many exceptional attractions Dubai offers to its citizens, residents and visitors alike,” he noted.
On the new venture, Trump said: “We are thrilled to be a part of this momentous occasion in Dubai and to witness the opening of this latest offering in our portfolio of Trump golf courses – the first in the Middle East. Trump International Golf Club Dubai is an incredible addition to our portfolio of 18 prestigious golf clubs and will join the stable of our golf courses around the world.”
“We are very proud of our collaboration with Damac Properties and look forward to bringing a new level of challenge and luxury to Dubai at this truly spectacular property,” he added, according to Tradearabia news report.
Sajwani pointed out that over the past three years, Damac had worked tirelessly and closely with The Trump Organization, the premier world-class golf course operator, and Eric, in order to deliver such an astounding project offering for golfing enthusiasts.
“We look forward to announcing the delivery of luxury villas and mansions that overlook the golf course as well as other clusters in Damac Hills in the near future,” he added.
Egypt to launch Phase 1 of new US$ 45 bn Capital City
Egypt said preparations were underway for the launch of the first phase of the new $45 billion Capital City which will boast several key amenities such as a business and finance centre, an exhibition fair city and residential units on 10,500 acres of land in Cairo.
Dubbed as Egypt’s administrative capital, the Capital City development is one of President Abdel Fattah Al Sisi’s mega-projects that aims to kick-start Egypt’s economy. On completion, it is expected to grow from 18 to 40 million people by 2050.
The project will be built over 700 sq km east of Cairo between Greater Cairo and the Red Sea and will be executed within five to seven years at a cost of $45 billion.
The government laid out several conditions to the real estate developers and investors keen to develop the first phase of the New Capital City, reported Al Ahram.
These include a downpayment of 20 per cent of the value of the land up to 150 acres and 15 per cent if the area is larger, stated the report.
Also the developers and the investors must pay insurance worth E£15 million ($974,349) for spaces up to 60 acres, E£25 million for spaces up to 200 acres, and E£40 million for larger spaces, according to Tradearabia news report.
The conditions also stipulate that all companies bidding for the project should not include a government official as a founder and that projects and units should be executed in a period of between three and five years depending on the size of land under development, stated the report.
The first phase also includes some residential units on which the work is nearing completion and will be handed over to citizens starting from April, it added.
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Saint-Gobain to develop positive-energy home in Masdar City
Saint-Gobain has announced plans to develop a positive-energy home in Masdar City, Abu Dhabi.
Through the use of high-performance materials and construction methods, the French manufacturer’s Multi-Comfort House will produce more energy than it consumes.
The project, which is scheduled to complete by 2019, was announced during the signing of a memorandum of understanding (MoU) between Masdar and Saint-Gobain.
Yousef Baselaib, Masdar’s executive director of sustainable real estate, commented: “Masdar City is a hub for innovation and sustainability, and a natural home for Saint-Gobain to showcase its state-of-the-art capabilities in sustainable living.”
Hady Nassif, general delegate of Saint-Gobain in the Middle East, added: “For 350 years, Saint-Gobain has consistently demonstrated its ability to invent products that improve quality of life. We share Masdar’s commitment to creating a more sustainable future for the generations to come, and our Multi-Comfort House is proof of that commitment.”
The Masdar City unit will be the first of its kind to be developed by Saint-Gobain in the Middle East. The house will be fully adapted to the arid conditions of the UAE, according to its developer, according to Constructionweekonline news report.
Saint-Gobain’s Multi-Comfort House concept covers all aspects of comfortable home living, and extends to tertiary amenities such as offices, shops, and public buildings.
The company has built a total of 18 Multi-Comfort House projects around the world since it developed the concept in 2004.
RAK Properties reports 9.38% increase in net profits for 2016
Ras Al Khaimah property developer, RAK Properties, has reported a 9.38% increase in its net profits for 2016 compared to the previous year, and a 5.98% increase in its revenue across the same period.
The developer stated that it achieved revenues in excess of $106m (AED390m) in 2016, a year-on-year increase of 5.98% on the 2015 revenues of $100m (AED368m).
The reported 2016 results reveal a 9.38% increase in net operating profits compared to the 2015 – up $47.65m (AED175m) from $43.56m (AED160m) in 2015.
As of December 31 2016, RAK Properties’ total assets were valued at $1.36bn (AED4.99bn), an increase of 5.05% on the $1.3bn (4.75bn) of total assets reported in 2015.
Managing director and CEO, Mohammed Sultan Al Qadi, said: “Last year presented a number of achievements for RAK Properties, including the announcement of further developments within Mina Al Arab.
We have already started this year on a strong footing with further hand overs and launches expected, 2017 promises greater success for RAK Properties, with a long term plan to launch projects worth $1.36bn (AED5bn) until 2021.”
RAK Properties formally handed over Phase 2 of Flamingo Villas in October 2016, two months ahead of schedule, according to Tradearabia news report.
The new year began with the commencement of the enabling works at the 306-key Anantara Mina Al Arab, Ras Al Khaimah, as well as the enabling works contract for the 350-key InterContinental Ras Al Khaimah Mina Al Arab Resort being awarded.
Throughout 2017, RAK Properties is expected to announce additional residential, hospitality and retail projects.
URC-Jordan to develop new health spa at Al-Adnani’s Abdali Mall
URC-Jordan, a subsidiary of Kuwait’s real estate development company, United Real Estate Company (URC), has announced the signing of an agreement with Al-Adnani Group.
URC-Jordan will develop a new health spa at Al-Adnani’s Abdali Mall, in Amman, Jordan, according to Constructionweekonline news report.
The 929m2 women only spa will operate under the seven-star Gaia Cocoon Spa brand.
Located in Amman’s inner city, Abdali Mall is the first development of its kind in the country with a mix of more than 111 tenancies including indoor-outdoor restaurants, alfresco food courts, a multi-cinema complex, and a supermarket.
In November 2013, the Kuwaiti developer completed work on its first Oman project, a mixed-use development comprising the first mall in Salalah.
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Dubai residents opt for environmentally-friendly and affordable propert
Dubai residents will continue to opt for more environmentally-friendly and affordable property in the next couple of years to 2020, a new report by property consultant Cavendish Maxwell revealed.
According to the “Dubai Goes Green” report, as of December, prices in Dubai declined by over 15% on average since highs seen in Q2 2014.
Key contributing factors of the decline include increasing job redundancies, limited liquidity in the market due to rising costs and oversupply in the market.
This has seen more residents moving to more affordable and sustainable locations in new developments across Dubai Investments Park, Dubailand and Jumeirah Village Triangle.
Zarah Evans, Managing Partner of Exclusive Links Real Estate in Dubai, said: “As the consumer is becoming more environmentally responsible, projects and communities geared towards sustainability are becoming more popular and are in line with Dubai’s focus on creating a more green economy.”
The property consultant predicts a rise in prices during 2017 and particularly more towards 2020 in more affordable areas like Al Furjan, Discovery Gardens and Silicon Oasis, added Evans.
Manika Dhama, Senior Consultant at Cavendish Maxwell, said: “In the ﬁrst half of this year signiﬁcant supply is expected in areas such as Dubailand, Business Bay and Sports City and this will continue to put pressure on prices in coming months.
“While price declines have promoted increasing interest from ﬁrst time buyers, the deposit requirements and equity contribution on the overall purchase are still prohibitive for most,” she said, according to Constructionweekonline news report.
Dhama added that improved activity from owner-occupiers is a sign of a maturing market and that growth in activity from this segment in Dubai residential property will be based on factors such as expat job growth and the “lending parameters that especially cater to them”.
UAE real estate sector to face another difficult year
The UAE real estate sector will face another difficult year after a correction in 2016, S&P Global Ratings said in a report on Thursday.
According to the ratings agency’s report, “Another Tough Year For UAE Real Estate Market Amid Currency Woes”, Dubai will continue to see residential prices and rents fall by another 5-10% in 2017.
“For 2017, we see no signs of market improvement for the UAE real estate sector, despite housing affordability improving from the current price environment,” said the report.
“With the fallout from low oil prices and continued currency woes, it is no surprise that 2016 was a tough year for the real estate market.
“Dubai’s residential prices dropped by 8%-11% on average and rent fell by 6%, according to REDIN.com, with most areas of the city affected,” it added.
S&P expects to see no major negative movements in real estate ratings in the next 12-18 months however, as developers will be able to absorb the fall in house prices due to low debt burdens and strong balance sheets, according to Constructionweekonline news report.
Last month, property developer Cavendish Maxwell said that rent prices in UAE cities will remain unchanged throughout 2017, reporting a 0.3% decline in apartment rents during Q4 2016.
Prices declined an average 3% over the last 12 months in Dubai last year as a result of residential demand being primarily driven by job growth for expats and redundancies in high income jobs, the property consultant reported.
90% of projects awarded related to 2022 FIFA World Cup in all sectors
The State Cabinet’s meeting was told that about 90% of projects related to the 2022 FIFA World Cup in all sectors were awarded.
Also, about 65% of the road projects currently underway are planned to be completed this year and next year, QIB reported.
Last week the Prime Minister and Interior Minister H E Sheikh Abdullah bin Nasser bin Khalifa Al Thani chaired the cabinet’s regular weekly meeting at its Emiri Diwan premises.
HE Ali Sherif Al Emadi, the Minister of Finance and chairman of the ministerial group for coordination and follow-up of major projects (of strategic importance), gave an in-depth presentation on the execution of existing and future projects in vital sectors, and the measures taken to implement them.
He said that about 65% of road projects will be completed during 2017 and 2018 and added that the majority of the projects are likely to be finished during the period between the end of 2019 and mid-2020.
The minister outlined that more than 50% of the rail project has been completed, with 100% of the drilling tunnel operations and 45% of the stations completed.
The minister highlighted the achievements within the health sector in 2016, including the opening of the Communicable Disease Centre, three health centres and two workers health centres.
2017 would also see the opening of four hospitals and four health centres.
Regarding electricity and water, the first phase of Umm Al Houl plant is expected to be completed by the end of 2017 and 50% of the biggest water reservoirs projects has also been implemented, according to Constructionweekonline news report.
A programme for infrastructure projects to more than 10,400 residential plots of land for citizens over the next three years was also approved, he said.
The minister added that several projects in the education sector were underway, with the most important being the expansion of educational buildings at Qatar University and new schools across the country.
The Prime Minister urged for commitment from competent authorities for the implementation of the projects according to their plans and deadlines and the allocated budget.