Dubai Real Times by Sterling Publications

OFFICIAL MAGAZINE OF REAL ESTATE REGULATORY AGENCY

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DUBAI REAL TIMES

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Message from the CEO

A Sharing Society “Sell, sell, sell.” “Sell the biggest.” “Become the richest.” “Offer the most spacious unit with the best view and get finance in only one hour.” This is exactly how some of Dubai sector stake holders were acting. For the past few years Dubai’s real estate market boomed and witnessed unprecedented returns on investment. The buzz words “most spacious”, “sea view” and “most luxurious” were heard around town as individuals strove to earn the most money and flip properties as quickly as possible for as much profit as possible. The market was moving quickly, yes, - and upward, - however not in a sustainable fashion. Since RERA was established the focus has been on fostering sustainable growth and development in the market, based on demand, transparency and trust. Whereas previously the industry witnessed great selfishness, where individuals isolated themselves from others, honoured hidden agendas and intentionally concealed useful information from colleagues, all the while RERA has been encouraging a market based on team work and sharing. As today’s market is going through tough times, I do not believe any person will succeed working alone. I am confident that all of the stakeholders in the real estate sector must work together, to share information and experiences so that as an industry we may emerge successfully from this situation. I encourage initiatives such as regular focus group meetings to share thoughts, exchange information and set action plans for the future. There are many other effective tools to accomplish the same goals, and as an industry I urge us to work together, be creative and pro-active to embrace such initiatives.

Eng. Marwan Bin Ghalita CEO, Real Estate Regulatory Agency

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4 COVER STORY

CLEARING THE AIR

C O N T E N T S

PERSONALITY

Essa Saeed Ahmed Al Mansoori

11 OWNERS ASSOCIATIONS

Interim measures 12 NEWS

Transactions in first 45 days 16 DEVELOPERS

Current list

45 LAUNCHES

Commercial tower and hotel apartments

46 UNDER CONSTRUCTION

Payment schemes, buildings on schedule

49 INFRASTRUCTURE

The first pultrusion factory in Dubai

20 MARKET TRENDS & ANALYSIS Make me an offer Dubai is too big to fail Growing divergence in office rentals

28 COMMENTS

Time to get it right

Mergers – tread with caution Living in a connected world Property players vs property investors The changing face of real estate When cash was king

53 Law & Regulations Questions & Answers 54 Law & Regulations Law 27 DUBAI REAL TIMES

From ‘greed to need’

COVER STORY

CLEARING THE AIR By Ambily Vijaykumar

RERA’s new initiative to create transparency regarding status of projects across Dubai Monthly report on all projects registered with RERA on its website New Rental Index to be out in April Rents across Dubai likely to drop by as much as 50 per cent depending on location

»» »» »» »»

with a scheme to help buyers stay abreast with monthly progress on their purchased property. This has been done through an online report

DUBAI REAL TIMES

n a move to help the Dubai real estate market get back on its feet, the Real Estate Regulatory Agency (RERA) has come out

Eng. Marwan Bin Ghalita, CEO of RERA being interviewed by Mike Bridge for a local radio show

on RERA’s website www.rpdubai. com and includes the latest on-site photographs of the status of various developments. The monthly reports are available to buyers all over the globe. For this purpose, the regulator has classified real-estate projects under various categories, including: • projects that have not been launched • projects that have been launched but construction is yet to commence • projects under construction but whose delivery has been re-

scheduled, and • projects that are on the verge of completion. RERA engineers are visiting the building sites of various development projects in the Dubai and are doing a spot check to bring in the up-to-date information required. “Six hundred and ninety five projects with escrow accounts, out of the total 875 registered with RERA will be covered under this scheme,” informs Marwan bin Ghalita, CEO of RERA. The move has been necessitated after reports stated that over 50 per cent of the projects have

“The law gives anyone the right to register his/her property by approaching the Land Department. Even in cases where the master developer has not registered the property, the onus is on the investor to do so and secure his/her rights.”

Lack of funds available in the market has also raised questions on whether or not developers will be able to deliver sold projects on time and whether buyers will be able to finally get what they’ve paid for it could well touch 30 per cent in 2010 reveals Bin Ghalita; a move that would leave room only for developers who are in for a long-haul. RERA does not think that the

Mohammed Sultan Thani, Assitant Director-General of the Dubai Land Department

number of cancelled projects will reflect poorly on Dubai’s real-estate story. “Investors still have the confidence in Dubai and we are only consolidating it,” informs Eng. bin Ghalita. Proof of three Indian investors who are beginning new projects in Dubai. Eng. bin Ghalita says that the investors believe that this is the right time to start a new project since land has become affordable and with RERA regulating the real estate market, the investors have the aspect of law compliance dealt with. Beginning new projects will not be a cake-walk for developers. They will now have to own the land 100 per cent before beginning construction. Developers also need to show that they have the finances to carry out 20 per cent of the construction of the new project before they are given approval for off-plan selling. To eliminate scenarios where

wanting by investing in properties they can’t consistently finance. “Previously, people looked for property and then looked for financing options. Now, they will not get a property without having their financial source in place,” informs Marwan. Considering that banks have become choosy in their lending business, especially to the real-estate sector, this step will help eliminate rising number of defaults. Since the financial crisis has thrown up an unprecedented situation, finances are a concern for developers as well; RERA says “there will be a consolidation of several projects”. For that, the regulator is involving the master developer and the sub developer of various projects in a dialogue to “co-operate to meet the expected challenges in the market”. This, Eng. bin Ghalita says includes, “rescheduling land pay-

DUBAI REAL TIMES

been stalled as a result of the global economic slowdown. The regulator has divided approved projects into two categories. Property rights on projects that have reached 60 per cent or more of completion has been documented with RERA and the regulator has obtained assurances from the developers concerned that these projects will be competed on schedule. The remaining projects that have not reached the 60 per cent completion mark have opened escrow accounts. Financial auditing and other necessary settlements to deposit buyers’ paid amounts in the escrow account for each project have both been done. Besides updating buyers, the regulator is also collecting information on the size of various real estate development companies, the number of registered projects, and classifying them by nationality. Lack of funds available in the market has also raised questions on whether or not developers will be able to deliver sold projects on time and whether buyers will be able to finally get what they’ve paid for. To lay these doubts to rest, RERA simultaneously conducting financial auditing on all projects registered with it, in co-ordination with developers and managers of various escrow accounts. “In a booming market, everyone

makes mistakes. We can’t allow mistakes to be repeated,” says Marwan bin Ghalita. “Financial auditing is to make sure that there is enough cash flow for the projects that are under construction,” he adds. RERA has, in the process of retaining only reliable developers in the Dubai market, brought down the number of approved developers to a little under half of its original number when the regulator was established two years ago. From a total of nearly 870 developers, it now stands at 427. Has the financial auditing then been able to separate the wheat from the chaff? After all, fly-by-night developers overcrowded the real estate market and contributed to the slowdown in Dubai. “People need to co-operate and some people need to sacrifice,” says Eng. bin Ghalita . “These steps are being initiated for the sake of the healthy and stable growth of the real estate market. We have at the moment cancelled two projects but there were no customers on board,” informs Eng. bin Ghalita. Add 27 more projects to that list since RERA set its eye on them. “They need to be cancelled,” says Eng. bin Ghalita. Cancellation is not an easy process though. Apart from the formalities of going through RERA and seeking their approval, there has to be a 10-day advertising campaign in the media. But not all cancellations are a loud affair. “Some developers are meeting their clients and are agreeing on cancellation among themselves. There are cases where clients have got the money immediately after they reached an amicable settlement for claims. Others are settling for a scheduled payment,” states Eng. bin Ghalita While this year will see a nearly 20 per cent drop in the supply figures,

buyers have paid up to 70 per cent of the value of the property without construction commencing, the real-estate watchdog has now linked payment to construction. So you pay only for what amount of work has been done. RERA will soon introduce a clause where investors will also be given a 15 day ‘cool-off’ period to study the property contract before inking it. This move is to ensure that developers and contractors pull up their socks. But there have also been cases where buyers have been found

DUBAI REAL TIMES

ments, merging some land plots, transferring some paid amounts to the developed land accounts and facilitating the completion of infrastructure for projects.” Consolidation of projects is needed in cases where developers who began two projects at a given time wish to move people from one project to the other to minimise expenditure. RERA gives a green signal to such requests but on condition that the investor approves this move and the property is registered with the Land Department. “We have not received reports of a single abandoned project so far. We are not denying the fact that if a person comes with a hidden intention to cheat, then he will achieve what he wants to. But reports of abandoned projects are untrue,” Eng. bin Ghalita clarifies. What is true is the increasing number of complaints regarding claims that RERA is receiving. “Everyone is now saying, give my money back. What we want to know is where they were when they bought the property three years ago? They did not bother to register the units in their name at that time, and now when disputes are erupting, they don’t have the proof to reclaim money,” says Eng. bin Ghalita. A total of 525 written complaints have been received by the regula-

A new online scheme in Dubai will help property buyers determine whether the construction of their homes has been cancelled, delayed or is on schedule. The Independent Progress Monitoring Report will be compiled by government assigned engineers who will tour Dubai's housing construction sites to check that progress is being made and assess the stage that the work has reached. Some reports are already available on the RERA website. tor since January 2008, while 505 complaints within a short span beginning August 2008 have been received on their website. So what is the nature of those complaints? “Mainly the non-availability of the sale and purchase contracts, non-commencement or delay of construction works, delay in delivering units, and receiving funds outside the escrow account,” informs Eng. bin Ghalita. How is RERA then addressing the complaints? “The law gives anyone the right to register his/her property by approaching the Land Department. Even in cases where the master developer of a property has not registered the property, the onus is on the investor to do so and

secure his/her rights,” adds Eng. bin Ghalita. RERA is working side-by-side with the master developers to ensure that investor confidence in the Dubai real estate sector remains intact. Another concern that the regulator has been trying to address is the unsustainable rents across the emirate. A new rental index will be out in April and according to trends, rents are likely to reduce depending upon the location in the emirate. The new rental index will be based on new contracts as well as existing contracts that have not expired. “The slump in the real estate sector is not a local phenomenon,

but a global one. There has definitely been a slump especially in the sales volume but value of the property has more or less remained unchanged,” states Eng. bin Ghalita. RERA says it has seen a dip of 45 per cent in sales while comparing figures of the first part of 2008 with the first few months of this year. There have been a total of 5,400 transactions so far this year with unit apartment sales taking up a major bulk of it. The regulator is confident that Dubai’s saleability has not been hit and with the $20 billion bond programme announced by the Dubai government, “the sentiment is up”. “We are confident about managing our financial affairs. Mega projects are moving, but a few might be rescheduled. That however is not a cause of worry since we will ensure that they are completed,” says Eng. bin Ghalita. “Another reason to be confident of the resilience of the Dubai market is news of the registration of a Dh 200 million project on Al Wasl Road,” says Mohammed Sultan Thani, Assitant Director-General of the Dubai Land Department. Generally a start-up is not the issue; it is sustaining things that have become difficult. With banks becoming choosy while lending especially to the real estate sector, sustaining investor confidence will be a challenge. “Banks cannot stop lending since they will be out of business. Some people say that the market will start picking up by April. Let the market be and it will correct itself,” opines Eng. bin Ghalita. RERA says it is taking its role as mediator much more seriously than ever before since the global financial crisis has thrown up an unprecedented situation. “We are the mediators for an amicable settlement in disputes. The responsibility of arbitration is with the Dubai Real Estate Court. Our effort to include developers, contractors and investors in this latest initiative is to increase transparency and eliminate losses in the sector that has been hit the most by the economic crisis,” says RERA’s Chief Executive Officer.

Facts & Figures RESIDENTIAL SUPPLY 29,319

No. of residential units to enter the market in 2009

31,003

No. of residential units to enter the market in 2010

43,880

• The share of main developers, Emaar, Nakheel, Dubai Holdings is 62.122 residential units) during the period from 2008 – 2011. • RERA's Studies & Research Section identified that 20 per cent of residential units in 2009 may not enter the market on time on the basis of available data, while 40 per cent of 2010 residential units may be delayed as well.

VITAL STATISTICS The total No. of developers registered in RERA

427

The total No. of projects registered in RERA

The total No. of developers that have been deleted from Developers’ 27 Register, on their wish The total No. of projects that have escrow accounts

695

The non-availability of sale & purchase contracts The non-commencement or delay of construction works The delay in delivering units Receiving funds outside the escrow account The non-compliance of real estate brokers with applicable laws and standards, mainly Law No. 8.

Mohammed Sultan Thani, Assistant Director-General of Dubai Land Department – Excellence & Corporate Governance Affairs Stated:

he total value of transactions recorded by Dubai Land Department during 2008 reached Dh280 billion, corresponding to a growth rate of 59 per cent compared to 2007, which witnessed 184 per cent growth in comparison to 2006. In 2008, DLD registered 19.983 transactions as per the following: • 5,783 sales transactions of land registered in the department during 2008 with an estimated value of Dh70 billion. • 11,908 sales transactions of flats registered by the department in 2008 with an estimated value of Dh12 billion. • 2,292 sales transactions of residential villas registered by the department in 2008 with an estimated value of Dh2 billion. (The value of transactions in 2006 reached Dh62 billion approximately, and the number of transactions recorded in Dubai Land Department were 5048. In the meantime, the value of transactions in 2007 reached Dh176 billion and DL recorded 16,037 transactions). There were 22,925 buyers in 2008.

The total available amount in the escrow accounts after RERA has supervised and agreed to issue payments from these accounts to cover construction works in the projects, as per the law which links between Dh 8 billion the payments from the escrow accounts and the ratio of project completion.

Top Nationalities for purchasing lands in 2008

Active and accredited banks and financial institutions as trustees of 26 escrow accounts from RERA

The number of land buyers reached 6053 and the proportions of nationalities were as the followings:

Real estate management company registered in Ejari Program

209

The registered lease contract in Ejari Programme by the approved real 2.822 estate management companies

29%

UAE

27%

Asia

19%

Real estate brokers registered with RERA belonging to 104 5.974 nationalities

Middle East

Real estate office registered at RERA

GCC

1.839

Trainees who passed the real estate training course organised by RERA in collaboration with Dubai Properties Faculty and Administration & 6.671 Real Estate Academy The proportion of UAE citizens, the highest among brokers

38%

The proportion of male brokers

73%

The proportion of female brokers

Top nationalities for purchasing residential apartments in 2008 The number of apartment buyers reached 14060 and the proportions of nationalities were as the followings: 33%

Asia

27%

15%

Middle East

UAE

North America

27%

Real estate disputes submitted to RERA from the various categories in 1.030 the market From January 2008, RERA has received 525 written complaints, while the website: www.rpdubai.com has received 505 complaints since August 2008.

DUBAI REAL TIMES

No. of residential units entered the market in 2008

Types of received complaints • • • • •

Transactions Sales Transactions Lands

Total No. of Units

Total Value (in billion dirham)

Total Area (Sq.ft)

3,887

56,695,682

Flats

11,885

13,363,451

Villas

2,324

3,233,392

Mortgage Transactions Total No. of Units

Total Value (in billion dirham)

Total Area (Sqf)

Lands

1,265

78,409,112

Flats

1,335

2,280,981

Villas

1,030

3,150,889

Value of transactions (in billion dirham) 300

59%

250

No. of transactions

280

50,000

103 %

40,000

200

184%

30,000

176

150

218 %

20,000 10,000

100 62 2007

2006

2008

5,048

16,036

32,596

2006

2007

2008

Top 10 areas based on Value of Sales, 2008 Value of Sales 10

Al Rawyah

Warsan First

Ranches

Nad Al Shiba

Jebel Ali Industrial

0 Sheikh Zayed Road

Palm Jumeirah

A Jadaf

Emirates Hills Third

Jebel Ali

Value Billion AED

No. of Sales DUBAI REAL TIMES

1000

914

800

816

786 613

600 400

246

195

194

183

169

151

Al Jadaf

Jebel Ali

Warsan First

Emirates Hills

Mirdiff

200 0 Al Rawyah

Palm Jumeirah

Ranches

Emirates Hills

Cumulative No. of Units Supplied From Master & 3rd Party Developers

Number of Purchasers of Lands in 2008 = 6053 n UAE 28,664

n ASIA

9,750

3.666

n EUROPEAN UNION

25,653

n MIDDLE EAST

15,216

21,253

n GCC n NORTHERN AMERICA

2008

2009 n Master

n EUROPE

2010

n NORTHERN AFRICA n OCEANIA

n 3rd Party

n SOUTHERN AFRICA

Top nationalities for purchasing residential villas in 2008

n EASTERN AFRICA

The number of apartment buyers reached 2.812 and the proportion of nationalities were as the followings

n WESTERN AFRICA

n CENTRAL AMERICA n THE CARIBBEAN n SOUTH AMERICA

36%

Asia

28%

13%

Middle East

United Arab Emirates

North America

Males have exceeded females in purchasing land in 2008 The number of male land buyers The number of female land buyers

4687 1366

The percentage of land buyers by gender: Male

77%

Female

23%

Males haves exceeded females in purchasing residential units in 2008 The number of residential units (male buyers)

10.510

The number of residential units (female buyers)

3.550

Number of Purchasers of Flats in 2008 = 14,060 n ASIA n EUROPEAN UNION

The percentage of land buyers by gender: 75%

Male

25%

Female

n UAE n NORTHERN AMERICA n EUROPE

Males haves exceeded females in purchasing residential villas in 2008 The number of male buyers of villas

2002

The number of female buyers of villas

810

n GCC n NORTHERN AFRICA n OCEANIA n EASTERN AFRICA n WESTERN AFRICA n SOUTHERN AFRICA n MIDDLE AFRICA

The percentage of villa buyers by gender were as follows:

n SOUTH AMERICA

71%

Male

29%

Female

DUBAI REAL TIMES

n MIDDLE EAST

OWNERS ASSOCIATIONS

Regulations and interim measures relating to service charges those developers keen to progress their registrations to prepare the necessary documentation and information. In addition to regulating registrations, the regulations introduce international standards governing the management and operation of Owners Associations in Dubai. The owners of apartments or villas in a registered Jointly Owned Property development will become members of an Owners’ Association which will be responsible for administering and maintaining the common areas in their building or villa community and will be governed by a Board elected by the owners. Owners will be empowered to view the financial statements of the Owners Association and to approve their budgets for the expenses that will be incurred in managing and maintaining the common areas on an annual basis. Accordingly, Mr. Eng. Marwan bin Ghalita, CEO of RERA has announced

the following clarifications to the freeze on service charges announced recently: Service charges for existing buildings, (i.e. buildings that have been handed over) will be frozen at the rates that were applicable in 2008 unless the 2009 rates are for a lesser amount or have been approved by RERA. The freeze will

What is an Owners Association? • • •

Owners’ Association is made up of owners in apartments or villas in a registered jointly owned property. The Owners’ Association is responsible for administering and maintaining common areas of their building or villa community. Owners will be able to look at financial statements of the Owners’ Association and check expenses.

last until the first General Assembly of the Owners Association (which will need to be held within three months of registration). Service charges for buildings that

sued, the Dubai Land Department and RERA will be holding information sessions for developers, interested owners and professionals in the real estate sector in Dubai.

DUBAI REAL TIMES

oon four regulations relating to Jointly Owned Property developments in Dubai will be issued (the “Regulations”). These regulations will create the legal framework enabling developers, and in certain instances, owners to apply for the registration of an Owners Association with RERA. Developers will have six months from the date the regulations are issued to register Owners Associations for their developments, and if they do not move promptly, owners will themselves be able to register the Owners Association at the developer’s expense. RERA has developed an on-line system for the registration of Owners Associations. Developers wishing to use the on-line system will need to undertake a short training programme, after which they will be given a user name and password to access the system. The system will be available for use on March 15 this should allow sufficient time for

are about to be handed over, or are in the process of being handed over, will be subject to the approval of RERA and after approval will apply until the first General Assembly of the Owners Association. Owners in both categories of buildings will be required to pay the relevant service charges until the owners approve, with or without amendment, the service charges at the first General Assembly of the Owners’ Association. Service charges which have already been paid by owners for the 2009 year will be adjusted accordingly after the Owners Association approves the service charges. Developers or managers currently managing Jointly Owned Properties (such as buildings or villa communities) must continue to manage such properties until the first General Assembly of the Owners’ Association at which time they must present a proper budget for consideration by owners. Owners Associations will be required to appoint an Owners’ Association manager (“General Manager”) who will be responsible for the administrative, secretarial and financial affairs of the association. The general manager will need to obtain a license from RERA and to do so will need to show that they are qualified to manage Owners’ Associations, attend the necessary training course and have the appropriate professional indemnity insurance in place. As soon as the Regulations are is-

RERA NEWS

Transactions in first 45 days

H.H. Sheikh Mohammed bin Khalifa Al Maktoum, Chairman, Dubai Land Department opened the International Property Show (IPS) Dubai 2009

h11.3 billion in land transactions was recorded during the first 45 days of this year,

said Sultan Butti Bin Mejrin, Director General of Dubai’s Land Department. In 2008, total transactions

reached Dh70.2 billion. The most activity was seen last May, with Dh11.6 billion done in total. With just Dh1.9 billion done in December, the amount recorded in the first 45 days this year is a strong sign that the market is already improving, he said. "It is a good figure, very positive. About Dh6 billion of this is from selling and mortgages. It means the market is not like how it was a year ago. Today the market is like it was in 2007, a little slow but still people are registering properties,” he commented on the opening day of the International Property Show (IPS) Dubai 2009. "There are fewer buyers today as people are afraid but, for real estate, you don't invest for one year only." To give potential buyers more confidence and comfort, RERA con-

trolled the exhibitors at IPS. All local exhibitors had to be approved by them and all international exhibitors had to provide proof of registration from their home country. The Agency has increased the level of transparency and regulations in the market so far this year, which will give investors further signs of a maturing market. "The sentiment will take time to change. These new rules and regulations are not reactive, they are for the future. If anything needs to be done, then we will do it," Mohammad Sultan Thani, Assistant Director of Dubai Land Department, stated recently. "What we are seeing more and more is that people are registering now but with smaller values. It is rare to get the Dh200 million or Dh300 million transactions that occurred before," Sultan Thani added.

Clean up your act

DUBAI REAL TIMES

ubai’s property regulator is planning to get tough on developers who fail to meet standards on issues such as delivery schedules and quality. It will soon ‘name and shame’ those developers who break promises to investors, fail to live up to promised delivery schedules and quality assurances, as it endeavours to clean up the sector to facilitate investment. Eng.Marwan Bin Ghalita told property developers at a briefing recently that they would be allowed to retain 30 per cent of the value of the property (as per the contract) if investors sought to pull out of projects - a move aimed at protecting and helping developers overcome the current slump. “However, we’ll be flexible. Exceptions may be made if the investor is unable to continue to pay due to genuine reasons such as loss of pay, job loss, etc, which we

from left to right, Rob Lovett, Mohammed Sultan Thani, Tony Ciochetti, Kerrie Alder

will have to consider. These will have to be approved by RERA and will be handled case-by-case.” RERA has been particularly active in recent months as it strives to restore investor confidence. It recently issued a circular outlining the policies that would govern service charges in the context of freehold properties. Bin Ghalita also told the meeting, organised by Badr Al Islami - the

Islamic banking arm of Mashreq that discussions on the issue of visas linked to freehold ownership were in the final stages and an announcement to this effect would be made soon. Dubai’s master developers Emaar, Nakheel and Dubai Properties - had been facilitating freehold visas for property buyers till last year when the government stepped in after noticing that some developers had be-

gun exploiting potential buyers. The UAE federal government has now finalised a six-month freehold visa for investors - which will be announced in a few weeks time. Delays and complaints of serious construction defects in some projects have also not escaped RERA ‘s attention. Developers needed to be flexible and work with investors during the current real estate slowdown, they encourage. The general consensus of the meeting of master developers was that they were pleased that RERA has been in talks with them. Certain proposals are in the pipeline looking at ways to assist customers. Also, there are indications of a real estate committee being formed by professionals from within this sector serving as a platform for consultation prior to issuing of new regulations and guidelines.

Back to school for Dubai developers

“Around 20 per cent of residential units in Dubai may not come on to the market as expected in 2009 because of market conditions, according to officials at the Dubai Land Department. About 31,003 units were anticipated to hit the market this year, compared to 29,319 units in 2008.” Marwan Bin Ghalita said “Residential rents in Dubai could fall up to 50 per cent by the end of this year in certain neighbourhoods. ‘The rents have already begun to come down. Depending on the locations, this could range from 10, 20 to up to 50 per cent by the end of the year.” “The Independent Progress Monitoring Report will be compiled by government engineers who will tour Dubai’s housing construction sites to check that progress is being made and assess the stage that work has reached,” RERA’s CEO said. “The reports will be available on the website, www.rpdubai.com from next week, with photographic evidence of building work and details of the stage reached and pending works.” Marwan Bin Ghalita, CEO of RERA, said “The revised rental index will be completed once all the new tenancy contracts have been signed for the current year and registered on RERA website. The first rental index was released at the end of last year and caused controversy as it was based on last year’s rents, thus not taking into account the financial crisis and the subsequent drop in rents. We hope to publish an updated index soon, maybe in April.”

ket, the number of projects and the added value they give to the community. So, before people invest in a project, they will see what the rating of the developer is and will be able to base their decision on that.” As well as attempting to boost confidence, the new system is also aiming to reduce the number of developers which are currently saturat-

ing the market. RERA believes they need to be reduced to a more manageable level. “There are too many developers. We need to make the number smaller so we can control them more and they can serve the market better,” he added. Keen to improve the overall image of development properties in Dubai and to make it a transparent

industry, RERA also has further regulation introductions in the pipeline. One will require each developer attempting to register off plan projects to fully own the land first. Another new regulation will ban freelance property agents from operating in the emirate and all brokers will have to take a RERA training course and be certified by the Dubai Police.

Discussing new leadership paradigm with young leaders

ohammed bin Rashid Programme for Leadership Development (MBRPLD), an innovative leadership programme designed to develop national leaders capable of promoting the sustainable development of the UAE, conducted a new session of ‘The Book Summary Review’ with participants of the Young Leaders level examining the new leadership paradigm in Dean Williams’ “Real Leadership: Helping People and Organisations Face Their Toughest Challenges.” The session provided topical discussion points as Williams’ book offered a new approach that redefines the proper function and purpose of leadership. Mr. Marwan Bin Ghalita, CEO of the Real Estate Regulatory Agency, served as the reading session’s special guest speaker. The Book Summary Review has been created as one of the periodic activities of the Young Leaders Programme, a level of MBRPLD that seeks to qualify young leaders through training programmes and workshops in line with the strategic plans and aspirations of Dubai. Adel Al Shared, Executive Chairman of MBRPLD said: “The ongoing challenges being faced by the entire society underscore the critical importance of effective leadership. We believe that leaders must be able to rally their people to help in nation building regardless of the circumstances. Dean Williams’ book provides

a detailed discussion of this important concept and we are pleased that the participants were able to appreciate the merits of this new leadership paradigm.” Marwan Bin Ghalita, said: “MBRPLD is part of Dubai’s vision to establish a sustainable society as the participants of today will be responsible in providing continuity to the development initiatives of the emirate. I am pleased with the direction it has taken in terms of teaching the participants to self manage themselves and to positively influence others to be more productive citizens, particularly in these times of global economic difficulties. As leaders, the participants need to be responsive to any unexpected turn of events in the future and I believe that MBRPLD is providing the right training to enable them to successfully handle such situations.” Real Leadership argues that the true task of the leader is to get people to face the reality of any situation themselves and develop strategies to deal with problems or take advantage of opportunities. Williams points out that any leadership that lets people sidestep the sometimes harsh truth of reality is irresponsible and ultimately ineffective. The Book Summary Review sessions aim to cultivate analytical, communication, comprehension and social skills through interaction and discussions of highly informative and thoughtprovoking books.

DUBAI REAL TIMES

n an attempt to rebuild investor confidence in the property sector, a new system which grades developers in Dubai is being introduced. Eng. Marwan bin Ghalita, CEO of RERA, said, “We are evaluating all the developers in Dubai. They will be graded according to their financial liquidity, their experience in the mar-

RERA PERSONALITY // PROFILE

Always an achiever

istinguished, foresighted and a strong supporter and contender for change, Essa Saeed Ahmed Al Mansouri, Head of the Auditing and Follow Up section within the Trust Account department, has proved his ability to emerge as a winner. This can be seen from his continuous optimistic talks of the future of Dubai, his enthusiasm towards work and his meticulous preparation for the unprecedented challenges that could arise in the future, with all the opportunities and possibilities that brings. Since his youth, Mansouri has been an achiever. Employed in the Public Prosecutions Department for a period of one year, he moved to the Guard in 1995 working in Human Resources. He continued his studies while still employed and graduated from the Higher Colleges of Technology in 2003 with a Diploma in Accounting. Academic excellence and an aspiration for better prospects inspired him to join the Abu Dhabi Health Authority as an accountant. His ambition led to the completion of his studies, and a degree in 2007 from Griffith University, Australia. Do you know what the next step towards his future was – this man who wanted a break in routine, while looking forward to tomorrow? He accepted an employment offer at RERA. The importance of this institution and its ability to impact positively on the real estate sector, the very heart of Dubai, impressed him, and he wanted to be part of it.

Essa Saeed Ahmed Al Mansoori

Any man in the prime of his life can write his own story here, since Dubai is a place of good faith and can accommodate all

His job at RERA requires him to work with guarantee accounts; development of policies, regulations and systems of the accounts for real estate management organisation. The department also develops laws and regulations governing the activity of banking institutions and ensures banking activities appropriate for the conduct of the special real estate accounts registered with them, monitoring their performance according to the law. All of this needs a lot of follow-up, auditing and professional communication with the secretaries of the guarantee account and developers. Essa Al Mansouri believes that the establishment of the guarantee

account has come a bit late for the discipline and organisation of the market, he wishes it had been set up earlier, but its presence is what is important now. The real estate market is a source of income for the emirate and we need to focus on and benefit from it. Industry leaders benefit in terms of knowledge, opportunities, services, laws and legislation, some of which are the first of their kind in this part of the world – the principle of guarantee accounts has set a precedent in the Middle East. Talking about career development, he refers to the difficulties of existing opportunities for young people, which were not there when he was younger. Dubai is proud of

its achievements. Any man in the prime of life can create a good future here since Dubai is a place of good fortune and open to all. HH Sheikh Mohammed bin Rashid Al Maktoum always says “Give me knowledgeable and dedicated people and I will give you the great glory.” Following his example Essa tries always to be committed to his duty and his role in the real estate sector believing that his knowledge and dedication is the best way to success. Away from his professional environment and work pressure, Essa Al Mansouri’s favourite hobby is camping trips and he considers himself an expert. He also believes in the power of the future. Memories of old things remain ‘yesterday’ in effect, no matter how beautiful our future progress and development is. His close friend is his father who is a lot of fun. Al Mansouri credits him for his perseverance in the struggle to achieve what he did and the humility to return to the way in which he established everything. “He saw to it that his first priority, the secret of his success, is his small family. He is filled with wisdom and dedication – an ideal atmosphere for progress and development.” Al Mansouri also expresses his admiration for the great achievements of women and his love for his four young children – they are his first motivation to make the world a better place to live in. As a person who embraces an optimistic view of things and loathes the dark, Al Mansouri is motivated by his drive to succeed.

DUBAI REAL TIMES

By Amal Abdul Rahim Al Sahlawi

MARKET TRENDS & ANALYSIS // PROPERTY PRICES DEVELOPERS

LIST OF DEVELOPERS

DUBAI REAL TIMES

registered with RERA up to, 19th February 2009

Alfajer Properties L L C

770

Alfaraâ&#x20AC;&#x2122;a Homes 6 (Jvs) Ltd

Alfaraa Properties

304

Alfattan Properties (L.L.C)

463

Alghanem Real Estate Llc

Almadar Investment (L.L.C)

817

Almasah Middle East Investment Limited

411

Alosaimi Real Estate Investments Co L.L.C

Alrashid Investments

299

Alshafar Development (L.L.C)

Altajir Real Estate L.L.C

448

Amesco Tower Jlt

468

Anil Adinath Bastawade

183

Anis Property Investments Ltd

NAME OF DEVELOPER

594

A.C.Holdings Limited

132

Antonia Resources Ltd

514

Aa Global Limited

309

Arabia Group Development Limited

Aaa Auctions Organizing & Management

310

Arabia Group Investment Limited

Aakar Developers Ltd

378

Arabian Investments Limited

255

Ab Properties Limited

239

Aristocrat Star Investment L.L.C

646

Abdul Salam Mohd Rafi Mohhd

525

Arra Limted

568

Abdulrazzq Ali Almadani

279

Aryene Plus Property Developers Limited

Abyaar Real Estate Development Ksc

532

Aryene Property Developers Limited

Aci Real Estate Llc

696

Asadollah Hosseinali Kikha

414

Acw Holding Ltd

597

Ashai Tower Jvs Limited

720

Adel Mohammad Saleh Ali Naqi Al Zarooni

Aswan Developers Inc

506

Ahmad Abdulla Ahmad & Ayesha Ahmad Abdulla & Amir Badkoubeh & Armin Niasar

Aswan Investments Ltd O.F

830

Aurora Limited

392

Avanti Holding Limited

131

Avetona Global Ltd

595

Avon Developers&investments Limited

317

Axon Development (Fzc)

235

Azizi Invesments (L.L.C)

391

B & M Fzco

308

Bando Engineering & Construction Co Ltd

281

Bangash Builders &developers Limited

Bangash Investments Limited

141

Bavaria Gulf Sandoval Ltd

148

Bay Central Developments Limited

360

Bay View Investments Limited

134

Beliza Resources Limited

829

Blue Sky And Nawaab Holdings Limited

268

Ahmed Abdul Rahim Alattar Properties

574

Ahmed Thani Almuhairi&ezzaldin Ibrahim Al-yousef

328

Al Duaa Holdings Fzc

826

Al Faraa Investments Limited

199

Al Jawi Investment L.L.C

Al Manal Development

784

Al Mazaya Holding Company

Al Sayyah & Sons Investments(L.L.C)

194

Al Shafar General Contracting Co Llc

812

Al Tafany Properties Limited

290

Al Tamimi Investments Limited

799

Al Zahra Properties

704

Albenaa Real Estate Investment-pjsc

479

Alduaa Residence Limited

320

Bonnington Land Limited

650

Escan Real Estate Pjs

374

Bonyan Emirates Properties

218

Essa Bin Nasser Bin Abdullatif Al Serkal

257

Bonyan International Investment Group L.L.C

Eta Star Property Developers (L.L.C)

795

Bosphorus Investments Limited

662

Evergreen Signature Investment Limited

296

Brighton Holdings Limited

250

Fabson Import Export Limited

323

Brookes Corporation

536

Fahed Hamad Saif Bin Fahad And Abdulla Ali Obaid

449

Bukhatir International Realty Development & Investment Llc

688

Fahiman Bhatish & Nania Nagpaul

357

Burj Alalam Holdings Limited

314

Fakhruddin Properties Limited

263

Burj Alduaâ&#x20AC;&#x2122;a Limited

Falcon City Of Wonders(L.L.C)

401

Byblos Real Estate Broker

First Homes Ltd O.F

731

C7d1 Limited

541

Flamingo Investments Limited

298

Capital Trust Gulf Limited

Fortis Group Ltd F.Z.C

130

Cenita Global Ltd

466

Fortune Dxb Ltd

337

Chapal World Llc

556

Fortune Homes Investment Limited

723

City-d Investments Limited

208

Fortune Investment Group(L.L.C)

358

Cliff Dwellings Enterprises Ltd

406

Fourtune Avenue Investment Limited

431

Comfort Homes Ltd

407

Fourtune Bay Investment Limited

312

Condor Properties Limited

405

Fourtune Serene Limited

794

Cornica Tradings Assets Limited

234

Freej Development Limited

356

Credo Investments Fze

499

G&g Partners Limited

801

Credo Investments Fze

577

211

Crown One Holding Ltd

Gholamreza Abadi & Shahrokh Nariman&yadollah Nariman&behnam Keivan

588

D10 Awf Investment Limited

146

Global Group Holding Ltd O.F, Nour Khan (Owner) /

192

Damac Development L L C

260

Damac Properties Co.(L L C)

190

Global Group International Limited

624

Das Real Estate

510

Global King Technologies Ltd

179

Define Properties L Lc-fzc

151

Global Procurment Fzc

805

Define Properties Plot 8 Limited

253

Gold Vision Development Ltd

318

Desert Dream Investments Llc

248

Golden Beach Properties Limited

313

Desert Home Fzco

271

Gpd Investments Spv One Limited

Deyaar Development Pjsc

845

Grace Property Developer Limited

158

Dheeraj & East Coast L L C

Green Desert Ventures Inc

Diamond Developers Co.Limited

Gulf Developers Fzc

Diamond Arch Ltd

135

Gulf Investments (Fzc)

741

Dja414 Investment Limited

755

Gulf Line International Ltd

Dsec Corporation F.Z.C -rak

305

Gulf Shores Inc

Dubai Golf City (L.L.C)

195

Haji Haroon Haji Hussain

Dubai Guernsey Property Investment Limited

324

Halcon Real Estates (L.L.C)

Dubai Life Style City L.L.C

809

Hampstead & Mayfair Development Limited

160

Dubai Property Ring Ltd

394

Hamza Namera International Fzc

200

Dubai Sports City ( L.L.C )

768

Heman R.E.D. & General Trading Limited

307

Dujon Properties Ltd (Developer)/eden Blue Tower (Project)

Her Ltd

417

Dunes Village

High Rise Properties(L.L.C)

742

Durar Al Emarat Properties Llc

386

Hma Exec Limited

288

Earth Developers (L.L.C)

243

Horizon Infrastructure F Z C

719

Edmonton Admire Properties Limited

343

Hydra Properties (L.L.C)

540

Elan Investment Limited

703

I.R.Investments Holding Company Limited

398

Emirates Sunland D1 Limited

372

Ilyas & Mustafa Galadari Management Investment &

399

Emirates Sunland Pv Dubai Limited

231

Esca Properties Llc

Development (L.L.C) 815

Infinity Emirates Investments Llc

DUBAI REAL TIMES

Select Group

DUBAI REAL TIMES

MARKET TRENDS & ANALYSIS // PROPERTY PRICES

609

Innovvarc Holding (L.L.C)

447

Mohammad Aqil Ali & Ahmad Ali Alzarooni

471

International Merchnant House Llc

379

Mohd. Hussain & Bros

306

Investments House Co.(L.L.C)

458

Mohd. Hussain & Bros

Ishra Ali

519

Mre Global Investment Group Fzc

470

Jab Developments Inc

Mrg Ltd

511

Jab Mosaistone Developments Inc

240

Muhammad Nabeel Joz

Jad23 Investment Limited

716

Muhammad Nasir Muhammad Iqbal & Safia Nasir

Jad24 Investment Limited

486

Nadeem Mohammed Zafar

Jad25 Investment Limited

Ncc Urban Infrastructure

475

Jalal Ebrahimi

840

Neel Properties Limited

496

Jamal Mohammed Alhassan & Bachar Bakri Almradi

319

Neo Solutions Limited

440

Jasmine Garden Limited

226

Neptune Properties Investment Ltd

K M Properties (L.L.C)

355

New World Investment Ltd

238

Kamil Khan

128

Oakgrove Global Ltd

722

Kensington Global Investments Ing

311

Oasis Group Ventures Ltd

490

Khaled Ahmad Elsayed Heikal& Hesham Ahmed Elsayed Heikal& Suaad Mohammed & Ahmad Mohd

388

Olive Ponit Limited

393

Omniyat Properties Development Corporation

242

Khalifa Majid Alabbar

709

Opulence Holdings Limited

Khuyool Investment L.L.C

724

Orbit Holdings Ltd

663

Kleindienst Properties

P&p Properties Ltd L.L.C -rak

500

La Ploma Limited

553

Palm Hotel And Resort Fzc

489

Liquid Assets Limited

367

Paramount Real Estate Llc

303

Lokhandwala Builders International Ltd

369

Parshwa Holdings Limited

Lootah Real Estate Development Est

219

Pearl Dubai Fz- L L C

429

Lux Real Estate

209

Pearl Properties

743

Luxor Investment Limited

727

Petrochem Realty Fzc

796

Lyra International Limited

797

Petrokaz Limited

660

M E Development Llc

Plus Internatinal Two Limited

520

Maadhad Saleh Mezar Alromaitihi

Plus International One Limlted

Madain Properties Co. (Madaâ&#x20AC;&#x2122;in) (P.J.S.C)

813

Plus International Three Limited

280

Madison Holding Fzco

787

Plus Properties Llc

Mag Group Fze

453

Pnd Investments Ltd

548

Mahdi Amrollahi (Partner) Antar Marzooq (Owner)

149

Point Development Ltd

254

Mahmoud Reza Azizi

504

Premier Group Properties Inc

732

Maison Limited

835

Premiers Property Developers Limited

Makaseb Properties

203

Prescott Holdings Limited

513

Mammut Group Fzco

125

Prescott Investments Ltd

282

Mandate International Limited

437

Profile Residence Limited

164

Manhattan Real Estate Holdings F.Z.C

575

Profile Zero Five Five Limited

542

Marina Arcade Real Estate Llc

322

Qureshi Faisal Abdul Aziz

352

Marina Breeze Limited

383

R.K.M Real Estate (Llc)

750

Marina Crown Real Estate (L.L.C)

524

Raam Limited

351

Marina Exclusive Limited

173

Ramada Real Estate L.L.C

329

Marina Star Limited

Ramadan Mousa Mishmish

Matex Estate Ltd

Rani International Development (L.L.C)

420

Memon Developments (Fzc)

428

Rashed Mohamed Mahran Al Bloyshi

765

Mena Capital Investment Llc

137

Rayan Adnan Iabduljabbar

353

Mera Home Ltd

264

Real Estate Bank

236

Merwess Abdulaziz

Reef Real Estate Investment Co (L.Lc)

129

Mirgana Resources Ltd

515

Reliance Estate Developmant

Remah Holding Limited (Offshore)

800

Spain Select Limited

359

Rescom Holdings Limited

622

Stallion Developments Ltd

362

Riviera Holdings Limited

159

Star Surveing & Evaluation

Rmg Ltd

193

Sum Sum Developers Fzc

444

Romeo & Juliet Tower Limited

368

Sun Valley Holdings Limited

163

Romil Investments Ltd

Sungwon F.Z.E

126

Rose Homes Investment L L C

614

Sunland Nur (Joc) Limited

789

Royal Holdings Limited

836

Sunland Waterfront (Bvi) Limited

Rufi Century Tower Ltd

214

Swiss Tower L L C

Rufi Down Town Res Ltd

188

Syann Palm Ltd

161

Rufi Gardens Ltd

186

Syann Park 1 Limited

162

Rufi Gulf Greens Ltd

637

Syndicate Sealine Limited

336

Rufi Park View Limited

T F G Real Estate Broker

533

Rufi Rose Gardens Limited

170

Taisir Limited

433

Rufi Royal Crest Ltd

756

Takmeel Investment Limited

335

Rufi Twin Towers Limited

Tameer Holding Investment (L.L.C)

295

Rufi Water Front Residency Limited

287

Tanmiyat Real Estate Development (L.L.C)

811

S.P. Oasis Limited

679

445

Sahara Livings Limited

Tarek Hussein & Tarek Shukry & Ahmed Youssef & Hesham Abdelkerim & Anil Bastawade

495

Sameer Mahmoud Al Ali

689

Tarek Hussein & Tarek Shukry & Emad El Sherbini &

Sameet Prakash Dhamecha

184

Sanali Holding Fze

498

Test Contarcting Co (L.L.C)

554

Sarhank Kader

The Onyx For Development Limited

Sariin S.R.O

457

The Pavillion Holding Limite

204

Satnam Singh

581

Tiger Properties

636

Sayed Amjad Husain

424

Tima Holdings Ltd

384

Schon Investments Limited

527

Time Properties

452

Seasif Group Fzco

147

Torch Selet Ltd O.F, Nour Khan (Owner) / Select Group

Season Development

266

Town Center Management Limited

810

Sebco Limited

292

Trend Capital Gmbh & Co. Dubai Sport City Kg

361

Seracom Holding Limited

Trident International Holdings Fzco

596

Sevanam Holdings Limited

165

Trinity Developers

237

Shaikh Holdings Limited

205

Triplanet International F.Z.C

538

Shanti Builders & Developers Limited

207

Triveni Builders & Promoters Ltd

171

Sheffield Real Estate

560

Uae Waterfront Group Limited

Sheth Estate (International) Limited

508

Uk-cig Developments Jvs

642

Sidra Holding Limited

301

Universal Developers (Fzc)

Sidra Ltd/alaa Arafa / Real Estate Solutions

127

V Resorts Ltd Fouad Barbar(Owner) / Bsa(Developer)

Sienna Lakes Ltd

474

Vascon Trading Ltd

327

Silicon Gate General Trading (L.L.C)

465

Venus Properties Investment Ltd

373

Silver Star Tower Limited

261

Victory Heights Golf And Residential Development Llc

Sky Estate(O.F) Hani Abu Auida(Owner) Mag Group

259

Vision Avenue Homes (Fzc)

Smart Home Properties

823

Volcano Investment Properties Limited

491

Smart Investment Limited

808

West Avenue Limited

819

Sobha International Limited

Westar Properties Ltd

Sobha Investments Limited

773

York Shire Corporation Limited

283

Sobha Properties Limited

507

Yra Enterprises Limited

Sobha Ventures Ltd

567

Zahair H .Sh. Khalil

215

Sokook Investment Group

814

Zenith Real Estate Development Llc

244

Souq Residences Fzco

228

Zero Five Zero Limited

DUBAI REAL TIMES

Mohammed Swati & Ghaleb Jaber

MARKET TRENDS & ANALYSIS //

2009: Transition from

â&#x20AC;&#x2DC;greed to needâ&#x20AC;&#x2122; Landmark report sees the market rewarding developers who deliver quality as consumer preferences, access to capital and income levels reshape demand patterns

DUBAI REAL TIMES

he year 2009 will be characterised by the transition from a supply-driven property market to a demanddriven one and more succinctly from greed to need, says Landmark Advisoryâ&#x20AC;&#x2122;s real estate report for the first quarter of 2009. Prices are no longer dictated by developers facing rapidly rising construction costs and frenzied speculators willing to buy at any price. In the year ahead, consumer preferences, access to capital, and income levels will reshape demand patterns and ultimately redefine the real estate market, it says. The report points out that as new supply encounters slowing demand, the market will reward developers that deliver on the quality they promised and punish those who do not. When faced with the prospect of falling into the excess supply gap, developers of new projects will have to adapt and innovate. Many

recently completed projects (and those nearing completion) were conceived in a seller-driven market where developers failed to prioritise consumer preferences and properly consider aggregate supply. Now faced with an oversupply in certain segments, developers may have to compensate with strategies like refurbishment and creative financing, it says. According to Landmark analysts, there is still some liquidity in the market and interest in opportunistic real estate investments, but the majority of capital is waiting for a price floor, which is likely to emerge once financing has resumed. As the effects of the global financial crisis continue to absorb locally, the real housing price could fall an additional 30 per cent, they feel. They further point out that obstructed financing caused by

There is still some liquidity in the market and interest in opportunistic real estate investments, but the majority of capital is waiting for a price floor, which is likely to emerge only once financing has resumed

selective lending will worsen the growing local crisis and recovery in the property market will largely be a function of credit availability, lending rates, and overall global

and local economic performance. According to the report, as the UAE real estate sector adopts the fundamentals of a demand-driven market, investors, end-users, and

rehabilitating real estate transaction volumes. If financing remains scarce and the government offers no new initiatives during 2009, then Dubai faces a population decrease of three to five per cent by 2010. Persistent corporate downsizing and widespread hiring freezes will require newly redundant employees to leave the country if they are unable to find work. Furthermore, all else being constant, the UAE’s population growth should be revised downward to growth-neutral. Lower inflationary pressure has also led to interest rate cuts, which should help stimulate the economy and are likely to coincide with the emergence of a price floor. It is,

however, too early to say if this will improve banking confidence; the UAE may need to implement policies aimed at guaranteeing assets and protecting banks from losses. The analysts feel that the fiscal policy measures announced over the past month are likely to provide additional stimulus. Both the federal government and Dubai have increased public spending by 21 per cent (Dh7.3 billion) and 42 per cent (Dh11.2 billion) respectively; combined, these increases amount to approximately two per cent of the UAE’s GDP in 2008. The report points out in the light of mounting concerns about Dubai’s property values, that average annual prices show a continual,

The rebound of Dubai’s property market rests largely on the recovery of investor confidence and, more importantly,banking confidence increase, with strong year-on-year growth of 15 per cent for apartments, 23 per cent for villas, and 35 per cent for offices. Compared to the same period last year, the fourth quarter of 2008 registered growth at 26 per cent

for apartments, 31 per cent for villas, and a decline of five per cent for offices. Landmark Advisory’s transactional data shows that average residential sale prices rose by over seven per cent between the 3rd and 4th quarters of 2008. During the same period, average apartment prices increased three per cent, with demand skewed toward smaller units. One-bedroom apartments constituted 50 per cent of all apartment sales and 35 per cent of all residential transactions. At four per cent, average price growth for one bedroom apartments was marginally higher than for larger units. Fourth quarter villa sales showed a bias for higher quality completed units, which drove average prices up by 14 per cent. However, isolating a more representative pool of villas and controlling for outliers and quality across quarterly sales reveals that average prices per square foot rose by only four per cent.

DUBAI REAL TIMES

tenants will benefit not only from lower prices, but also from more favorable terms. For example, monthly rent payment schedules are now more common and will eventually become standard for both residential and commercial leasing, it points out. The rebound of Dubai’s property market rests largely on the recovery of investor confidence and, more importantly, banking confidence. Despite special access to government funds, banks have reverted to austere lending practices that restrict the availability of muchneeded capital. Now that inflation is less of a concern, the availability of financing will be the critical factor for boosting the economy and

DUBAI REAL TIMES

While the fourth quarter data showed an increase in residential prices, the transactional data for offices revealed that sale prices declined by 30 per cent between the third and fourth quarters of 2008. An increase in office supply coincided with a shift in sales from prime office space to standard products. The report points out that since Q2-Q3 2008, a performance gap has emerged between off-plan and completed properties. As early as the second quarter of 2008, offplan sales began to experience low absorption rates and sometimes a total inability to sell off-plan, with surplus units reverting back to the developer. Inflated land and commodity values caused off-plan prices to surge exponentially. At the same time, consumers started to realise that there was no secondary market for off-plan sales. This realisation led to a rapid decline in new launches in the third quarter and to a rise in project cancellations in the third and fourth quarters. But the report stresses that analyzing fourth quarter total price averages alone, however, obscures an important trend: residential prices peaked in October, fell through to December, and continue to fall. Between late October and December 2008, both apartments and villas declined on an average by seven percent–good news for people waiting for a price floor to materialise. As the global economic crisis deepens a new era is opening in the UAE’s property market, the report says. The new phase might

see prices continuing to decline by an additional 20-30 per cent. The report cites an analysis of previous financial crises in both developed and emerging markets, which shows that local housing prices dropped by an average of 35.5 per cent from peak to floor. Landmark’s data indicates that average residential property prices have already peaked at Dh1,556 per square foot. Assuming that the current downturn will affect prices in line with the historical average, then Dubai’s average price floor will be Dh1,000 per square foot. “The question remains: is Dubai and/or the UAE in a full financial crisis? The previous downturns that Landmark studied have many fea-

tures in common with the current crisis: declining housing and stock market prices, falling output and employment, and rising government debt. Today, Dubai’s property prices are falling and the Dubai Financial Market’s Index fell by 53 per cent over the past three months. Since expatriates form such a large part of Dubai’s workforce, the unemployment rate is less relevant than the aggregate number of jobs. The most recent UAE GDP growth forecasts are at 2-2.7 per cent even after Dubai announced a 42 per cent public spending increase. Stalled growth combined with thousands of job cuts over the last quarter, frozen recruitment, and the likely continuation of corporate downsizing

elevates the probability of negative job and population growth. Finally, fiscal spending is on the rise across the UAE, and Dubai is expected to register a budget deficit for the first time on record,” the report notes. The report says the government may be able to mitigate the severity of the financial crisis by implementing fiscal and monetary policies that encourage spending and lending. Fiscal stimulus packages have already been approved at the federal and emirate levels. Despite the government’s provision of liquidity, however, lending occurs only on a selective basis and is not likely to resume fully until the second or third quarter of 2009, it says.

MARKET//TRENDS & ANALYSIS PROPERTY PRICES

Make me an offer Better Homes has launched a web-driven campaign to build interaction with its clients, inviting them to take control of the current market downturn and submit a price they are willing to pay for both residential and commercial real estate

etter Homes has launched a web-driven campaign to build interaction with its clients, inviting them to take control of the current market downturn and submit a price they are willing to pay for both residential and commercial real estate. The campaign, ‘Make an Offer’, is part of a long-term strategy to evolve the Better Homes’ online platform to provide a more interactive approach to real estate, taking advantage of the current buyer’s market. Ryan Mahoney, Managing Director of Better Homes, said “Make an Offer demonstrates innovation in client interaction. It puts buyers in the driving seat to suggest to us what they are willing to pay for a particular unit; a 180-degree turn of traditional sales methods. It is in our interest to adapt to the current economic climate, and Make an Offer presents an opportunity for buyers to potentially achieve extremely competitive prices for desired units.” Dubai Real Times asked Mr Mahoney to explain the system in more detail: Does the offer go to the seller or the agent? The offer goes to the seller via the agent. Company policy dictates that the Better Homes agent must present all offers above a certain amount to the seller. The role of the agent is to manage the communication between the buyer and the seller and ensure that the offer process is handled professionally.

Am I bound by the offer? The offers made through our website are not legally binding. However we would expect that buyers carefully consider offers before they make them because offers will be taken seriously by the seller and will involve the time of both the agent and the seller to review the offer and respond to it in a professional manner.

What documents do I need to make an offer? None. You just need to fill out a simple registration form online that includes your personal details and

Who is going to respond to me and how will I hear and from whom? Our agent that represents the seller will respond to the relevant offer within 24 hours. of the offer being made. Initially

make the offer. If the seller is interested in moving forward with the offer, then all of the necessary paper work, property viewings and due diligence will be conducted before the purchase of the property is finalised.

the agent will just make contact with the buyer who has made the offer to introduce himself or herself and explain the next steps. Then the agent will present the offer to the seller and once a response is made, the agent will contact the buyer to move forward.

DUBAI REAL TIMES

By Ryan Mahoney

MARKET TRENDS & ANALYSIS // PROPERTY PRICES

Dubai is too big to fail, says Nomura Global financial services group sees liquidity creeping back into the market, although slowly

DUBAI REAL TIMES

ubai is too big to fail and liquidity will creep, albeit slowly, back into the market, according to global financial services group Nomura International said in a report on the UAE real estate sector. “The papers remain optimistic and the property blogs negative – the truth lies somewhere in the middle, in our opinion. We believe that Dubai is too big to fail and the government entities that effectively control the respective real estate markets know this. There is no cash and there will be more deleveraging, but we believe that liquidity will creep, albeit slowly, back into the market. In the main, the current tranche of developments are likely to be completed before developers call time out. We think the key is to back the developers that have a strategy at the end of the time out period,” the Nomura report said. The report points out that the master developers have been vested by government interests to con-

trol the real estate supply in their area of core operations. Nakheel, Emaar and Dubai Holdings collectively control around 70 per cent of all supply coming to the market. They are granted large land tracts (free or heavily subsidised) and in return they bridge the funding gap between the government and the sub-developer and ultimately the end user, it said. According to Nomura, the speculators, now stuck with property assets they intended to sell, are forced-sellers of shares to fund real estate instalments. Similarly, share investors receiving margin calls are forced sellers of property, which in itself creates a circular reference with a downward spiral. The leading financial services group feels that headline-grabbing 70 per cent discount ‘fire-sales’ on the Palm Jumeirah probably misrepresent the real market, which should stabilise once the forced sellers have been forced out. “Until this occurs and the finance

market and the resale market can reset themselves, we do not see a recovery in share prices. We think share price falls now look overdone on the downside and should begin to stabilise. However, the headwinds have not petered out yet and we think that it is too early to be aggressively buying the sector as we are probably mid-cycle through the deleveraging process,” the report says. Nomura analysts say there are two questions that need to be addressed to kick start the sector: one relates to the timing of liquidity return and the other is about sector consolidation. They believe a government-inspired merger of some of the players is probably inevitable. The report notes that during the run-up in property prices over the past three years, the trend has been towards over-development, coupled with increased sales competition that created favourable payment terms for purchasers, but developers are now being caught

in a liquidity trap. Contractors require payment on completed work certificates (which are already being held up) and purchasers can’t raise the bank finance to service the outstanding instalment payments. So developers must focus on the ‘stringent control’ of their receivables and payables, with payables on a shorter duration than receivables, it says. “Different payment plans have been structured by companies and by developments. When banks were falling all over themselves to lend money, a 20 per cent down payment and 80 per cent final instalment structure was appealing. The market was rising and for a low capital outlay, speculators could flip the property and make a healthy profit. Less desirable developments could be made more attractive by the payment plan, but these are now the ones probably most at risk.” The report terms the fall in input prices as a positive development for the sector. Mid-way through 2008, there was a ‘steel shock’, which

The report points out that most ongoing developments were probably agreed to under fixed price contracts (ironically to mitigate the risk of rising prices). The emerging trend is to shelve developments and then retender. Contractors who were previously accepting 20 per cent are returning to the margins of around 5 per cent. Nomura estimates that those developers who can pause and re-tender for developments not yet in construction can expect to save at least Dh100 million in material costs on a standard tower development. The analysts also believe that the developers will now try to squeeze concessions out of contractors — with the alternative being to cancel the contract. The report cites one of the downsides of the real estate boom as the reallocation of resources from public infrastructure activities. Logistics, road networks, utilities, sewage and electricity hubs are required to service the new built accommodation, yet these essential services appear to have been subordinated to real estate activities. Now, one of the reasons buildings remain unoccupied is that they cannot be fully serviced, it points out. So, it is a good time to redirect activities towards infrastructure and utilities using the current development hiatus as an enforced ‘catch up’ period.

During the peak in August, per square foot construction costs were being quoted at Dh1,200; in Dubai they now average around Dh475 to Dh500, with some developments being quoted at Dh350. This represents a fall of 60 per cent in just six months The report further says that Dubai, which first opened the doors to foreign investment, has led the way in terms of real estate regulation and other Emirates are now following the lead. “Abu Dhabi and Ajman have both announced the formation of separate Real Estate Regulatory Authorities (RERAs) which will run in parallel with the Dubai RERA (currently the only formal regulatory body in the UAE). This is the first stage of ‘regulatory harmonisation’ and a key step towards developing a de-facto UAE regulatory system, which is required if the UAE is to attract, or more importantly retain, foreign real estate investors”. Nomura explains how these regulatory frameworks are designed to protect parties on both sides of the real estate transaction (sales and leasing) with policies framed to further regulate development activities (and obligations), mortgage and tenancy registration, escrow

accounts to ring fence development proceeds and so forth. The aim is to add transparency to an opaque market and will generally include the monitoring of developments, the provision of rental indices, adjudication and dispute resolution and the monitoring of media advertising (i.e. sales of developments). Nomura analysts believe that increasing the regulatory system and transparency will ultimately shore up market credibility and confidence around securing the purchase of property rights. “However, sustainable coordination is required in our view – this is coming, but the UAE is not there yet. Until such time, regulatory arbitrage risk remains, where the regulatory burden on one emirate (Dubai) is greater than the rest and too much regulation, too soon, in the current climate may add to an already weak outlook”.

DUBAI REAL TIMES

cramped the extremely tight supply chains further and the price of steel peaked at Dh5,500. This is when a number of construction contracts were priced and basic materials were trading at multiples of current prices. With land prices and basic materials then selling at premiums, sub-developers were at the mercy of the off-plan market. Similarly, six months ago there was an acute shortage of labour, with contractors competing to recruit and develop resources to cope with project backlogs and escalating order books. The labour shortages have now evaporated and now there are redundancies and repatriations of workers across the entire real estate, construction and consultancy spectrum. Rents on heavy equipment have also dropped by 30 per cent in the past two months. There is now an oversupply of heavy equipment as private developments falter and public infrastructure projects (such as the Dubai Metro, Dubai Airport, etc) cannot absorb additional capacity. During the peak in August, per square foot construction costs were being quoted at Dh1,200 in Dubai they now average around Dh475 to Dh500, with some developments being quoted at Dh350. This represents a fall of 60 per cent in just six months.

MARKET TRENDS & ANALYSIS

Growing divergence in office rentals market JLL report says gap between asking and actual prices widening

continued into 2009. Active demand for new office space has weakened over the past six months. Many companies have delayed previously announced expansion plans, while others have reduced the size of their existing operations. With the completion of an additional 4.7 million sq.ft of office space in the second half of 2008, the over-

per sq.ft. However, the quarterly increase from Q3 to Q4 was minimal at roughly five per cent. JLL says landlords have become much more flexible in negotiating transacting prices, with the gap between asking and actual prices widening to around 30 per cent to 40 per cent. As a result, actual prices for prime office space declined over the second half of 2008 and this trend has

all vacancy rate across the Dubai market has doubled from seven per cent in July to around 16 per cent at the end of 2008, JLL estimated. This headline figure does not, however, reveal the full story, it says. The review notes that because of the barriers to entry into free zones, there are pockets of higher vacancy in areas such as Tecom and JLT/ DMCC. While demand has definitely

Estimated and Announced Future Supply 95,000,000 Office GLA Sq.Ft

DUBAI REAL TIMES

here has been a growing divergence in office market rentals between prime and secondary locations over the past six months, with the average prime net rents in the Central Business District (CBD) recording an increase of approximately 10 per cent and the comparable rent in the secondary locations such as Tecom, Jumeirah Lake Towers and Jebel Ali decreasing by approximately 20 per cent, Jones Lang LaSalle said in its Dubai real estate review for February. The average rent of Dh550 per sq.ft per annum for prime office space in the CBD increase was recorded mainly in the third quarter with a minimal change in the final quarter, the report said. Conversely, average rents for Grade A space in secondary locations, such as Tecom, Jumeirah Lake Towers and Jebel Ali decreased by approximately 20 per cent over the second half of 2008. The average asking price for prime freehold office property increased over the past six months by around 32 per cent to Dh 4,900

80,000,000 65,000,000 50,000,000 35,000,000 20,000,000 5,000,000 2008 Completed

Source: Jones Lang LaSalle

2009

2010

JLL Estimate

Market Announced

2011

slowed, there were a number of notable leasing transactions completed with the Boston Consulting Group (BCG) occupying around 25,000 sq.ft within The Office Park at TECOM and Areva leasing 75,000 sq.ft within the Acico Business Park in Garhoud, over the past six months. The review says that an additional 4.7 million sq.ft of office space was released into the market in the second half of 2008, bringing the total stock to approximately 29.5 million sq.ft; an increase of almost 20 per cent over six months. Projects completed within this period include The Galleries at Jebel Ali, Cayan Business Centre, Executive Heights, and Grosvenor Business Tower within TECOM, and the Reef, HDS, Tamweel and Silver Towers at Jumeirah Lake Towers (JLT).

The review notes that there has been a major correction in future supply levels over the second half of 2008, with approximately 50 per cent of the proposed supply for 2009-2011, now considered unlikely to come forward over this period. “As a result, we have reduced our estimate of total additional supply over the next three years from 70 million sq.ft to around 34.6 million sq.ft.,” JLL said. Projects announced as recently as October 2008 (e.g: Meraas’s Jumeirah Gardens and Nakheel’s Tall Tower) have already been scaled back, delayed or phased over a much longer period in view of the prevailing market conditions. Similarly, work on many developments already under construction in projects such as Jumeirah Lake Towers and Business Bay has been placed on hold, and a few projects, where construction is not already underway are unlikely to commence in the current environment.

According to JLL, the market dynamics will continue to shift in favor of tenants as more new stock enters the market in 2009.

OUTLOOK

• • • •

Rents are likely to decline in most locations over the first half of 2009. While future supply will continue to decline, completions are likely to exceed demand in 2009, resulting in a further increase in vacancies, particularly in poorer quality buildings and those in secondary locations. Rising vacancies are likely to result in the emergence of rent free periods and other leasing incentives, with a resulting gap between face and effective rentals. Reduced demand from speculative buyers will result in a fall in both transaction levels and sale prices.

DUBAI REAL TIMES

The average asking price for prime freehold office property increased over the past six months by around 32 per cent to Dh4,900 per sq.ft. However, the quarterly increase from Q3 to Q4 was minimal at roughly five per cent.

COMMENTS

Dubai: Time to get it right

DUBAI REAL TIMES

eading into 2009, leading economies across the globe are undergoing a period of contraction. Several financial institutions who have taken the lead to revise their global growth forecasts have painted a less than cheery picture for 2009. However, the general consensus emerging is that of some gloom, but no doom for the UAE. Albeit at a much reduced pace, most financial institutions are still predicting growth in the UAE for 2009. But, whether it is nominal growth or contraction, one thing is assured, the UAE must pushon with developing infrastructure within a realistic framework and with the aim of long-term sustainability. Infrastructure by way of regulatory institutions is foundational for any healthy real estate market. By clearly defining property rights and procedures, these institutions underpin the whole mechanism of the real estate market. Furthermore, the quality of the institution will determine how efficiently the market functions. Due to the rapid speed at which the market had been accelerating over the past few years, these institutions have had little time to develop properly. Their role has been primarily reactionary and not proactive while attempting to keep pace with the market’s momentum. However, as the sector has now begun to slow, this is the time to make qualitative steps towards improving existing property laws, procedures, as well as other essential industry-related services. As the most established regulatory and advisory body, the real estate market will primarily take its cue from RERA in Dubai alongside the Land Department, as to what particular improvements in this area are achieved. Having set up the main framework for defining the contractual obligations between brokers and cli-

ents, as well as, landlords and tenants, RERA has taken some practical steps towards introducing more transparency into the market. This includes required licensing for all practicing real estate brokers, the introduction and enforcement of Strata Law, and RERA’s new tool a rental index based on registered leases in Dubai. The latter of which, depending on the quality, precision and timeliness of the information published, could finally put an end to the need of a rental cap, which has not only distorted prices but to an unmeasured extent has aggravated rental supply, as many investors have shied away from becoming landlords. With that in mind, however, the Rental Index, in its current form, relegates itself to obsolescence due to the intended infrequency of publication, as well as, the outdated information published. In order for its full potential to be realised, the Rental Index would have to keep pace with changing market rates, and in this current economic climate it would require frequent updating and expedient publication, which is why a new version will be released in April 2009. With further revision and improvement, we hope RERA can aid the market by bringing the sector’s reputation to the level of maturity, which is embodied by transparency and international best practice. Working in tandem with improving regulation, the real estate market within the UAE looks forward to improving infrastructure via roads and transportation, as well as utilities and tertiary concerns like building schools, parks and recreation, all of which enhances the quality of life for residents, and therefore, directly affects the vitality of the property sector. It has become apparent that in the real estate downturn, the needs of actual residents and future

residents were sidelined in favour of the short-term visitor/tourists and the minority that would have been able to afford some of the more grandiose and novelty schemes put forth for development in Dubai. Furthermore, the situation has been compounded by the rise of the US-Dollar pegged dirham, which has taken the UAE from an expensive travel destination for Europeans and other nationalities to an extravagant level. A long-term, diversified and sustainable economy should consider the needs of those actively participating and adding value to the economy, which at present includes a substantial, transient working population of expatriates, as all official population figures indicate. In order to prevent outflows of skilled and unskilled workers in times of economic and political hardship, a certain amount of loyalty must be fostered in this particular group by catering to the needs of their lifestyle, which includes expatriates’ financial considerations, as well as, the needs of their respective families, specifically: the availability of affordable housing (not just high-end) in the vicinity of good schools and retail/grocery shopping, green spaces, parks and recreation, good roads and transport, as well as, quality customer service across all sectors of the economy, private and public. The UAE has made itself into a successful and attractive, but relatively short-term working destination for expatriates, which has served the nation in times of economic prosperity. However, the nation’s long-term economic interest may require shifting the current transient working population to one that is more resilient in times of economic hardship or otherwise. We should take comfort in knowing that Dubai has already taken some initiative to address the infrastructure gap. The emirate has

set aside a significant number of its budget towards that end, which is intended to increase infrastructurespend by 20 per cent over 2008. Continuing construction on the roads, including the Metro, bus stations and pedestrian bridges-are still on-going and apparent. Tangentially, for those of us in need of reliable government statistics, the IMF has been working in conjunction with the UAE for the past couple of years and promises new and methodologically sound figures in 2009 relating to GDP, population, inflation, income distribution, etc. As demand has placed such a strain on utilities throughout Dubai and has even constrained growth in the Northern Emirates, there will now be time to build and provide water and power in an efficient and strategic way, readying the sector for the economic upturn. Time is a valuable but easily overlooked asset in this current economic climate, prior to which, it was in aggravatingly short supply in the UAE. Infrastructure will be the key for those developing economies in the current downturn, and for the UAE this infrastructure must serve the current and future residents. Getting the infrastructure up to international standards will add value to property and to the quality of life, generally, for the UAE. Having achieved many years of budget surpluses coupled with fiscal responsibility, the country is in a good position to now spend those savings wisely. As construction costs have plummeted, there is no better time for the country to develop what it needs to be on par with international standards. When ailing economies do make their turnaround (and they will), the UAE will be more attractive and better-equipped to handle the demand. Article from the Research Department of Cluttons LLC, www.cluttons.com/dubai.

COMMENTS

Mergers:

tread with caution Operational excellence is key By Dr. Dirk Buchta, Partner and Managing Director at A.T. Kearney, Middle East

Dr. Dirk Buchta

do merge successfully, only 29 per cent achieve increased profitability. If developers are to merge, they need to ensure their company is on sound ground and research their prospective partner carefully before deciding this is the best solution. Mergers in the real estate sector typically fall into two categories; merging of similar companies, or merging of complementary companies. The reasons to merge two similar companies are often to achieve synergies and operational excellence or balance risks and diversify. While mergers focusing on achievement of operational excellence have not been common in the region, mergers focusing on balancing of risks are especially pertinent for master developers with Dubai interests, who are driven by project portfolio rationale. The other option is for companies to ride out the current economic climate, using diversification along

the value chain. Mergers between complementary players aiming to integrate the chain both up and downstream have occurred in the region. Emaar is such an example. They have acquired or developed joint ventures with construction companies such as The Turner Corporation, real estate agents such as Hamptons and facilities management companies such as Emrill together with Carillion. Most successful large Western developers including Hochtief and Bouygues Group, have in the past followed this diversification path through mergers, joint ventures and organic growth. When merging construction companies, there are several synergies possible affecting both the top and bottomlines. Our experience has found that the main synergies in the top-line are sales and special market segments. In sales, some construction companies achieved synergy when staying with a multi-brand strategy. Alternatively, if one company is a

significantly better positioned brand, this brand can be used for the whole business; thereby helping the other part increase its position. The size of the business is equally important, particularly if bank guarantees are required. Financing lines can be increased and used to further growth and additional projects. Key synergies include procurement and overhead costs, especially if the company has not already reached critical mass. For example, procurement is enhanced due to economies of scale; and overhead costs can be cut by merging branch and headquarter operations such as sales and marketing. Furthermore, the utilisation of specialist equipment can be increased and the equipment department itself reduced in size. However, whether it is a wellexecuted merger or service diversification, in these troubled times companies would be well-advised to first look inwards and maximise value from their core operations.

DUBAI REAL TIMES

CC construction and development companies must work towards operational excellence during this economic crisis. We are currently seeing an unprecedented wave of mergers across all sectors as companies seek to secure their positions, balance their portfolio and risks, while seeking synergies in their operations. Our advice, however, is to tread with caution since mergers are rarely the answer, particularly those borne from stress situations. Rather than helping companies achieve operational excellence and create more profitable and stronger operations, mergers often destroy value and weaken the merger candidates. Initial key factors to consider for a successful merger are the thorough assessment of the potentials of the takeover; a clear strategy for the newly merged company; sound change management and a post-merger integration process. Development and construction companies have different business models, cost structures and risk profiles and therefore may have different reasons to consider mergers. Planning for a merger is paramount. Almost 70 per cent of mergers fail, often due to such basics as lack of preparation, communication, unclear strategies or poor execution. For example, in Spain recently, poor timing and planning of a merger between two major developers failed, resulting in bankruptcy for the new company within six months of the merger. Of those companies that

COMMENTS

Living in a connected world The Collateral Damage report presents The Boston Consulting Group (BCG)’s latest thinking on the status and future implications of the global financial and economic crisis and its implications for the GCC, especially UAE. BCG has examined the different ways in which GCC companies stand to potentially benefit from the opportunities presented by the downturn. By Linda Benbow

he group of experts sat at the top table and faced their audience of journalists, business editors and financial savvy guests. They spoke about the report that was being launched, squared their shoulders and waited for questions to be fired at them. Why are there so many ‘experts’ around now, after the financial crisis has hit us? “Well, actually, we were here before, explained Kamel Maamria, Partner & Managing Director, Dubai. We saw what was happening and advised our clients to get ready for the storm. They took our advice and are weathering the ups and downs of the situation as predicted.” We live in a connected world, explained David Rhodes, Senior

DUBAI REAL TIMES

(from left) Martin Manetti, Sven-Olaf Varthje, Klaus Kessler, David Rhodes, Kamel Maamria

Partner & Managing Director, London. “The USA had a bad Christmas period with a drastic downturn in sales. This affected manufacturers in China where 60 per cent of factories closed. This in turn led to less machinery being produced in Germany” (where many Chinese companies buy their equipment from). A similar domino effect was felt in India when a three-day week was introduced in the auto industry.

“This is a most unprecedented global recession, the worst since The Great Depression in the early part of the last century, stated Dr. Sven-Olaf Varthje, Partner & Managing Director, Dubai. “ It is also a time of future planning; now is the time to re-furbish existing infrastructure instead of starting new projects. Improve roads, put in pipes and cables for sewage, electricity and other services. Build roads, plant parks, plan where to construct shops, clinics, schools and other facilities for the residents of this country, current and future. Draft laws and revise regulations if necessary. This is a good time to plan for the future. “Now is the time for advertisers to continue marketing their goods because if they don’t they will lose their customers. And it is very difficult to get a customer to return to you. Once you have lost him to another product he realizes that he has other choices that are almost, or just as good.” Sven admitted that the global property crisis has reached the Middle East. “The real estate industry is a cyclical one. Many real estate companies in the UAE have entered the crisis from a position of some financial strength, although they will have to work harder for their share of the market now.” Recessions usually force people to think and devise ways to go forward. It is a time of innovations and changes. The teutonic plates of industry are shifting to make new business.

Dr. Sven-Olaf Vathje is the partner and managing director in BCG’s Frankfurt and Dubai offices. In 2006, Sven-Olaf was a founding member of the Gulf offices. He is a core member of BCG’s insurance and financial institutions practice areas, and has worked with banking and insurance clients, across a broad range of topics from business build and strategy development, to organisational redesign and implementation support. In this context, Sven-Olaf has developed an in-depth understanding of the real estate industry in Europe and the Middle East. The world’s leading multinationals are facing an unprecedented competitive challenge from a new group of fast-globalising companies based in rapidly developing economies (RDEs), according to the report. Entitled The 2009 BCG 100 New Global Challengers: How Companies from Rapidly Developing Economies Are Contending for Global Leadership, the report has identified 100 such challenger companies, with combined 2007 revenues of $1.5 trillion, that are either catching up with or have already overtaken their longer-established rivals in the United States, Europe, Japan, and elsewhere. And if any of these companies stumble and fall during the global economic crisis, there are many others ready to take their places. In all, 14 countries are represented in the list; China (36), India (20), Brazil (14), Mexico (7), and Russia (6). The Middle East is represented for the first time with four companies from the United Arab Emirates and one from Kuwait. Etisalat, Emirates Airline, Emaar Properties and Dubai World are the blue-chip powerhouses joining the ranks from the UAE. Mr Maamria commented, “Having five companies from the Middle East in the list attests to the rapid growth of this region, its speed of economic diversification and the successful de-

velopment of policies supportive of business. It is also an indication that while the current global downturn poses significant challenges, the Middle East has the potential to become a significant player on the international stage.” Thomas Bradtke, co-author of the report and a BCG partner based in Dubai, said, “Global challenger companies share a number of characteristics that have propelled them onto the global stage, including early advantages in their development, ambitious leadership, and willingness to reach outside the company to achieve rapid growth. But these companies are not immune to the damaging effects of the global downturn. Last year, the crisis took its toll on their formerly soaring stock prices. Nonetheless, the challengers have been adept at changing, learning fast, and adapting their businesses to the new economic environment.” As challengers chart their courses for the future, BCG suggests that they observe six guidelines: don’t concede the innovation high ground, find opportunities in turbulent times, protect core RDE markets, make productivity improvements a top priority, manage risks to the business, and develop globally recognised brands.

COMMENTS

Property players vs. property investors A guide to selling your property

or almost a decade, Dubai’s property market has been comparable to a bullish stock market. Due to the numerous short-term buyers profiting in a world of high stakes, a market had been created that seemed to defy the odds. The off-plan market was for the most part dominated by two types of buyers; the high stakes ‘player’ and the prudent and reliable long term ‘investor’. The players were the individuals or organisations counting on incremental growth in the market. They would purchase off-plan property, usually paying 5-10 per cent of the contract value and source new buyers be-

fore the next payment was due, in the process earning themselves a healthy premium. Speculating within the off- plan market followed the same rule as any other speculation high risk and high reward. Therefore, players who purchased at the peak of the market, in terms of price, have suffered the greatest losses. Unfortunately, if they are unable to continue paying according to their contract, there is little advice that can be given to them. Investors, the second type of buyer, are in a different situation. They were not overexposed and took a medium to long-term view on their property investment portfolio and were planning to follow the payment

plan through to completion. The best way forward for this group is to continue as per the developers’ payment plan since selling off-plan property has become extremely difficult in this market. For long-term investors, they can be comforted by the fact that the fundamentals of the UAE economy still remain strong. For RERA, it is important to protect the interests of customers as well as developers and ensure the market remains healthy in the long term. If and when a rescue package is established, the availability of end user finance will ease this pressure. An important negative factor in the Dubai real estate market currently is the lack of end-user finance. The global credit crisis has led banks to minimise their exposure. This has left only cash buyers and a handful of executives who have financing preapprovals. This small segment knows they are well placed to negotiate even further bargains. For those looking at the rentals market, the news is more optimistic, since yields are in the order of 10-15 per cent due to a decline in prices. This is causing many sellers to rethink their decision since rental incomes are becoming more appealing by comparison. Those who are not desperate to sell are holding onto their properties to benefit from the rental yields available. Gradually, this will limit the supply of property at low prices and help stabilise the situation.

fered six months ago. Regardless of how much you paid for it, we are currently in a market where only the most competitively priced properties are sold. Take your agents’ advice; remember they want to sell this property as much as you do. Appearance - Keep all furnishings neutral; magnolia or white walls are good to stick to. Have your property cleaned. If the view is a selling point, ensure the windows are washed. Equally, if your property boasts a spacious living room, ensure it is not cluttered. Today’s market is increasingly end-user oriented. Viewings - Viewings are a necessity for selling your property. Ensure a set of keys are kept with either the agent or building security for ease of access. If the property is tenanted, ensure a method of viewing has been discussed and agreed with the tenant. Too many good properties are not being sold due to lack of access for viewings. The right agent - Do your research and select one or two agents with a strong presence in your area. Pick out a few based on professionalism and reputation. Choosing the right agent is increasingly important as he or she will be fighting your battle to close a deal as well as advising you with regards to your property. Be wary of unprofessional agents. Some unscrupulous types have been advertising lower prices than agreed with the sellers. Most importantly, choose an agent you can trust. So what advice can we give to Flexibility - One has to remember sellers determined to sell? that we are currently in a buyers’ marRealistic pricing - Be realistic about ket. If you receive an offer, it is best the price of your property. Do not to try to accommodate the buyer, compare with prices you were of- within reason.

DUBAI REAL TIMES

By Martin Ashkuri, Sales Director, Cirrus Real Estate Brokerage

COMMENTS

The changing face of real estate What should the focus be for real estate agents looking to succeed in the months ahead? Here Cecilia Reinaldo, Managing Director of Fine & Country UAE, outlines the core skills and specialisms that will see agents and agencies rise to meet the current challenge, and go some way to restoring confidence in local and global markets.

DUBAI REAL TIMES

s we collectively stand back and watch the deflating of the ‘global bubble’, there are very few companies or industries that are unaffected, and the real estate sector is no exception. Alongside the financial sector - and as a result of the strength of the bonds between the two industries - it is us who are bearing the brunt of the global downturn. Having entered the year in a down market in the UAE – and even a second year in many other international markets - the industry is facing challenging times. But for every person who sees a challenge as a problem, there is another who views it as an opportunity. I like to include myself in the second camp. The current status of the market gives us the potential to develop new products and new strategies to reinforce the services offered by the real estate sector - decreasing the pressure currently experienced by many home buyers and sellers. In order to meet each client’s unique needs, a combined effort of action, energy, key people and the control of overheads play a pivotal role in any agency’s success. It is through the development of specialist skills and the deployment of the latest technology that market leaders – including Fine & Country – will blaze a trail to restore confidence

important indicator of success – and the outside world means the people who make things happen and a comprehensive knowledge of the locations and properties on your books. Some companies, including Fine & Country, have built a tremendous sphere of influence across some of the most dynamic and established property markets in the world, and as a result, members of the group(s) are able to reap the benefits.

In order to meet each client’s unique needs, a combined effort of action, energy, key people and the control of overheads plays a pivotal role in any agency’s success and trust in the market.

Key people The treasure in our business is to be found in knowing and being known by key people. The traditional estate agent who used to rely on doing little more than showing a client an off-plan brochure is a dying breed. Getting to know the outside world will become an increasingly

Technology While we are not advocating tweeting about a new property as soon as it comes online just yet, there can be no doubt that the face of real estate marketing here in the UAE is changing. The majority of us consume online media daily and increasingly use it as part of our purchasing choices – with property being no exception. But it is not just user-friendly websites or digital media strategies that will contribute to an estate agency’s success or otherwise, it is critical to harness technology to streamline and integrate the back-end of your business. Using data capture, intelligent databases and content management system will not only help you to get a know your clients and potential clients better, but also free up your staff and help control overheads – giving greater breadth

of exposure to a wider audience in a more cost-effective way.

Skills and energy As some of our ranks leave to pursue other less challenging lines of work, it is evident that the skills and energy to compete will have a significant impact on an agency’s business. Committed agents who are prepared to work long hours and also acquire the skills to enable them to use technology and other aids are the people that will give the real estate sector a new lease of life and longevity. That said, driving a business and servicing clients with dedication will be challenging in a market where it

can sometimes seem that only the bargain hunters are buying, and only the distressed are selling. It remains for each and every member of the industry to pull together and focus on exceptional customer care – something that left many behind in the boom times.

COMMENTS

Market to bounce back within next eight to twelve months

emon Investments, a Dubai-based property developer and part of the international business conglomerate, the Memon Group of Companies, has projected that the UAE real estate market will bounce back within the next eight to 12 months. The developer has based its optimistic forecast on recent industry findings, which reflect a decline in the construction cost per square foot within the Emirates by an average of 30 per cent since the onset of the economic crisis. The developer has also committed to continue fostering its strong relationships with leading construction companies, in line with its goals to hit the delivery targets for its projects - starting with the Dh75 million ‘Champions Tower I’, which is due for delivery by the end of 2009. Industry experts point to the massive drop in the prices of steel, as well as that of other materials including aluminium, wood, glass and diesel. The declining cost of labour and supervision due to recent redundancies and terminations has also contributed to the dip in construction expenditures, which are now pegged between Dh400 to Dh900 per square feet in Dubai and Abu Dhabi, and to as low as Dh170 and Dh200 per square feet in Ajman. Amid speculations of further decrease in construction costs in the coming months due to plunging oil prices, building material costs and transportation prices, Memon Investments is focusing all its resources towards hitting the delivery deadline set for all its announced projects. “In lieu of the massive correction in the prices of basic construction

Ahmed Shaikhani, Managing Director, Memon Investments

“In lieu of the massive correction in the prices of basic construction materials, we are now focusing our strategy on the implications of this development, particularly with regards to the construction and delivery of our launched projects” materials, we are now focusing our strategy on the implications of this development, particularly with regards to the construction and delivery of our launched projects,” said Ahmed Shaikhani, Managing Director, Memon Investments. “Our strategic planning and consolidation efforts are being driven by our strong resolve to stay true to our promises to our customers in the face of this economic crisis, and we are proud that our actions are paying off with the steady progress we are witnessing in all our projects.” “The current adjustments we are seeing in the price of construction indicate that the industry is becom-

ing healthier, which spells more opportunity in the long-term for those who can withstand these truly challenging times that the market is currently facing. It is our goal that by the time the real estate market regains its former vigour; we will be among the few developers to have endured the challenges and remained stable. We plan to accomplish this by working hand in hand with our construction partners as we determine the best course of action to be taken during this unique period in the history of real estate,” concluded Shaikhani. The company currently has a portfolio of projects valued at close

to Dh1.34 billion, which includes the high profile residential 'Champions Towers' series, the luxurious ‘'Gardenia I & II’, the ‘Frankfurt Sports Tower I’ and the 'Cambridge Business Centre'. The developer also announced that it has identified major master developments in Dubai, including Jumeirah Village South, Mizin and Downtown Jebel Ali as locations for its new projects, which will include luxury residential, commercial and mixed-use developments. Among the leading construction companies with whom Memon Investments has signed strategic partnerships are Stromek Emirates Foundation, Majed Hilal Contracting, Al Sarh Contracting and Cairo Contracting Company. Additionally, the developer has also partnered with leading UAE-based construction suppliers, including Shanghai & Arabian Electromechanical LLC (SAE), HI-TECH Electro Mechanical Contracting Est, ETA MELCO and WIN GATE Electromechanical Services. Having delivered over 30,000 units across the globe with a presence in 90 countries spread across Asia, Africa, Middle East and Europe, the Memon Group of Companies is presently commemorating its 30th year of delivering unique offerings and services to its global customers. In addition to its extensive expertise in the real estate market, the Group has also built a strong reputation for its unwavering support for various causes such as poverty alleviation, environmental conservation and academic development. As a sociallyaware international corporation, the group has devoted 19 years in support of the Rabia Charitable Foundation and the Rabia Relief Fund.

DUBAI REAL TIMES

Construction cost per square foot in the Emirates falls by an average of 30 per cent

COMMENTS

PROPERTY PRICES

A bright spot

amidst the overall economic news By Eric Gummers many instances where families and friends share the use and enjoyment of second properties often as a holiday home. Such arrangements are often arranged on an informal basis.

The growth of fractionals

Eric Gummers

mong all the depressing negative economic news around the globe, there seems to be one area where there is continued interest and activity: Fractions and shared ownership. This article seeks to examine some of the reasons for the attraction of fractionals.

DUBAI REAL TIMES

One statistic

In one day in January 2009, Fractional Life www.fractionallife.com, a consumer facing website which focuses entirely on the fractional space, received 65,759 hits on their web site. I find that an extraordinary statistic and anticipate that readers may also be surprised by this.

Nothing New under the Sun There are very few concepts which are truly new. There are, of course,

Using the figures from Ragatz Associates for 2007, annual sales in the US for fractionals, private residence clubs and destination clubs were USD $2.3bn with 50,000 households participating. The figures for 2008 will be released next month. We have been advising a number of developers over the past decade who have very successfully added a fractional offering to their whole ownership real estate sales. This has enabled those developers to increase their completed sales by making additional fractional sales to consumers who do not wish to make the commitment of purchasing whole ownership.

Some warning words The fractional approach will never be the solution for property where there is limited consumer attraction to the particular development and its location. Bluntly phrased, shared ownership will not rescue a poor development concept. The successful fractional requires considerable thought and planning for the implementation of services and management - it is more com-

plex than making a one-time sale.

5 key upsides There is a logic for many potential buyers that in purchasing a fraction they will be able to enjoy the use of a second property that they really need and they will accept paying a reasonable premium for this Offering a fraction creates buyer interest; and a number of potential buyers who consider buying a fraction eventually acquire a whole unit Fractional purchasers recommend and bring other buyers which is very cost effective marketing Fractions bring use and occupancy year round to a project which can enhance value. Ongoing management brings ancillary long term income.

Some points from the lawyer’s perspective Correctly structuring a fractional product requires a commitment to investing the time and energy to create a suitable structure that is robust throughout the life of the project. As such a fractional structure is inherently more complex than a build and sell model. However for those prepared to invest the effort, fractions may well prove to be one of the winning ways to do well in turbulent economic times. Eric Gummers, a corporate lawyer and partner at Howard Kennedy dealing with complex commercial contracts and business relationships internationally, is a recognised expert on structuring of mixed use and hospitality projects worldwide. He has worked on some of the first fractional projects in Dubai and the region.

COMMENTS

Transparency and affordability will restore rent market

herwoods Independent Property Consultants has announced that it has recently deployed new strategic initiatives to capitalise on an expected upswing in real estate business activities within the last two quarters of 2009, as the global financial downturn gives way to more positive changes in Dubai’s property rental market. Furthermore, the company revealed that it expects the rental index introduced recently by the Real Estate Regulatory Agency (RERA) to further consolidate and stabilise the rental market in the long term, as it creates a highly transparent system that promotes investor confidence and helps control rates from once again escalating to unreasonable levels. With rents becoming more affordable, partly as a result of the global financial downturn, Sherwoods pointed out that the situation will ultimately deliver longterm benefits to Dubai’s property sector as businesses will feel less pressure in subsidising housing allowances for their workers, while more people will be encouraged to relocate in the emirate. It further noted that a more stabilised rental market combined with the adoption of a credible rental index system will likewise drive investor confidence as rental yields will be much more predictable and easier to calculate. “Two key issues will impact

lise during the last two quarters of 2009,” said Iseeb Rehman, Managing Director, Sherwoods Independent Property Consultants. “The sharp acceleration of rents over the last couple of years has put enormous pressure on employers who were subsidising housing allowances, negatively impacting the growth of a number of business establishments. With the emerging trend of more affordable rents, the long-term prospects become a lot more encouraging as it helps

Sherwoods expects transparency and affordability to help restore has Dubai rent market’s stability in the second half of 2009

Dubai’s rental rates: employment and the supply of property in the market. Further job losses could erode demand, while the supply of inventory into the market needs to be controlled to avoid oversupply issues. However, as affordable accommodation remains a key driver to the Dubai economy, we have seen a positive trend in terms of proactive government intervention and the rent market’s resilience, which we believe will eventually help rents to level off and stabi-

encourage both businesses and people to relocate here. Accordingly, the company has devised new strategies to help clients identify and take advantage of the gainful opportunities that have evolved in this transition period in Dubai’s rental market,” added Rehman. He also noted that some of the issues raised against the rental index are likely short-term problems, which can be settled once the values reflected on the rental index are updated for 2009, providing a

more accurate depiction of the current market situation. Furthermore, as it considers the rental index a more viable long-term solution to resolve issues in Dubai’s rental market, Sherwoods expects RERA to update the index figures on a regular basis and subsequently have a more clear-cut policy on the index’s role in the rental market. “To obtain credibility the index has to be updated by RERA on a regular basis to correctly reflect market rents. There also needs to be a clear message from RERA; currently they say the index is only a guide, but if it is to replace the rent cap then it will need to be adhered to as law. The index could prove revolutionary in meeting the needs of both landlords and tenants and if the mechanism is used correctly, it will provide a very transparent system to evaluate rental yields and help control rates escalating again to unaffordable levels,” concluded Rehman. Founded in 1988 in the UK by Iseeb Rehman, Sherwoods has grown and expanded to five branch offices all over the UAE with regional offices in the UK, France, and soon in other key locations around the world. The company offers a diverse range of services, including search and acquisition of properties, offshore company information, selling of properties, mortgage services, valuation and appraisal, legal and tax services, and lettings and management.

DUBAI REAL TIMES

Newly introduced rental index drives back investor confidence as financial crunch helps bring rents to more reasonable levels

DUBAI FOCUS // NAKHEEL

On a sound footing Master developer Nakheel says it is concentrating on delivering projects that have been sold; and finances are in place to see it through the crisis and beyond By Ambily Vijaykumar for the media last month to announce that these projects are going on as per schedule. Hand-over of homes at Jumeirah Village has already begun; while at Jumeirah Park, Nakheel is targeting the end of the year for the process to begin. As for Al Furjan, the handover is scheduled for the latter part of 2010. Joe Barr, the Managing Director of Nakheel’s Development Projects is confident that despite the financial crisis, the developer will be able to deliver the projects on time. We asked him whether Nakheel has the finances to keep the projects on track. “I think we are in good shape with our general finances. What we have done is adjust our overall spend plan so that we do not over-commit ourselves. That was an important step to take back in November-December last year. And we are concentrating on delivering the products that are being sold,” he said. The first step that the developer has taken towards not ‘over-com-

DUBAI REAL TIMES

Joe Barr

ith the real-estate sector in the UAE, and especially in Dubai, facing the music of the global financial crisis, one of the leading developers, Nakheel, has merged three of its island projects Palm Deira, Mina Rashid and The World under one umbrella. This, the developer says has been

done to “readjust its current business objectives to match supply and demand in the most effective way.” The mergers of its various businesses have come at a time when Nakheel has also gone on a PR overdrive to promote its developments A tour of its show-case villas and apartments at Al Furjan, Jumeirah Park and Jumeirah Village was held

mitting’ is to delay work on many of its high profile projects. These include the Trump International

“Our contractors have been long-term partners of Nakheel. What we have done is to lay out our long-term business plan with them. We have also discussed the financial situation and are working with them to tide through the situation. And that has helped us in bringing down the overall expenditure”

is right to start selling again since the demand seems right, we will do that. That will obviously generate the income for the next few phases,” he explains. Cash-flow however is the biggest problem facing the market. Considering that currently banks are holding back on lending and have reduced loan to value ratios considerably, customers might be finding it difficult to finance the property they’ve purchased. Is Nakheel facing a similar situation on its current projects? “Our customers have basically been engaged in a constant

dialogue with us on their ability to finance the product they have purchased. We, on our part, have set up a mechanism to assist them. We put them in touch with a mortgage broker who works independent of us and they help the customer out with the financial needs. So far, that has been working,” Barr says. Another entity to be hit by the cash crunch has been contractors. There have been reports of many of them abandoning unfinished projects because they don’t have the money. How is Nakheel faring with its contractors for various projects? “Our contractors have been

Al Furjan show home fies, “over the long-term, we will deliver all of those, because we are still seeing that the fundamentals for demand in all areas of Dubai is enormous.” These long-term plans will materialise only if the current projects generate profit. Nakheel is confident that all its projects are profitable ventures. “We are absolutely sure that the present projects will be able to generate revenue for future projects. The present projects are all about delivering on customer demand and when the market gets to a position where we feel it Jumeirah Park villa

long-term partners of Nakheel. What we have done is to lay out our long-term business plan with them. We have also discussed the financial situation and are working with them to tide through the situation. And that has helped us in bringing down the overall expenditure,” says Barr. Part of that expense cutting has also been the 500 staff sacked in December last year. The developer however, says that since then there have been no redundancies. But does that mean no future lay-offs as well? “We do not see any further layoffs on our existing projects,” states Barr. That confidence is also reflected in the developer’s outlook for 2009. “We are more optimistic for the current year, especially the latter part of it. Each of our projects now has a specific plan and a specific target. So we are focusing on achieving them,” he adds. Even reports of a population dip in Dubai in 2009 do not seem to worry Nakheel. “If we concentrate on our short-term sold projects, the people who have bought them are committed to the market and to Dubai for a long-term. So if you have a long-term view, I think your short-term view will catch up with that. We believe there is an overwhelming confidence in Dubai as a place to do business and a place that has the infrastructure and the necessary services. The confidence in Dubai is very high,” he states. And so is Nakheel’s confidence in its financial soundness which it believes will see it through 2009, 2010 and beyond.

DUBAI REAL TIMES

Tower, The Universe, Waterfront and Palm Jebel Ali among others. So have these projects been shelved? “All these projects are five-to-ten year projects. So the things that we have deferred, in terms of decisions to move on, are things that are in the master-planning phases. So if we have got developments over a 10-year period that we might have developed, obviously we are now not looking at accelerating those developments,” informs Mr Barr. On being pressed further to specifically answer whether the projects have been shelved, he clari-

DUBAI FOCUS

Advertising plan for 2009

n the wake of the global financial crisis, real estate companies especially are using various means, such as preventative budgets, to reduce their expenditure and maintain their business through the coming months. While some are halting expansion plans and slowing work on current projects, others are cutting salaries or discharging employees. In addition, most companies are reducing their marketing and advertising budgets for 2009, or cancelling them altogether. Al Mazaya Holding understands that while it is necessary for companies to find preventative means through which to protect them-

selves, it does not mean that budgets need to be reduced to almost nothing. The key lies in redistributing any available funds, taking into account that promotional campaigns will be reduced drastically due to the absence of new project plans currently entering the market. Said Eng. Salwa Malhas, Executive Vice President of Al Mazaya Holding: “Considering that our projects for 2009 are different in nature to those in previous years, we are currently focusing on the promotional campaigns for our profitable projects, where around 50 per cent completion is required before launching any marketing and promotional ac-

Eng. Salwa Malhas, Executive Vice President of Al Mazaya Holding tivities. This means that marketing campaigns will not be as drawn out

as those of property developments where marketing coincides with the beginning of plot sales, before development works commence.” Malhas continued by saying that Al Mazaya’s expenditure on publicity will this year include company advertisements in many GCC newspapers throughout Kuwait, Dubai, KSA and Qatar, as well as promotional billboards, communication-related activities such as interviews, reports and news, as well as Al Mazaya’s periodic industry reports and studies. She concluded by saying that 2009’s budget will also include large televised promotional campaigns for profitable projects.

More swimming New leasing programme for pools in sports clubs Golden Mile, Palm Jumeirah

Swimming pool in Al Shabab Club

DUBAI REAL TIMES

ubai Municipality has set up training swimming pools in a number of sports clubs in Dubai at a cost of Dh47 million. Eng. Hussain Nasser Lootah, Director General of Dubai Municipality, said the world-class project, which was implemented in Al Nasr, Al Wasl and Al Shabab clubs, is considered to be among the most specialised and pioneering projects. They will help bring up a young generation knowledgeable in international practices in sporting competitions. The project includes closed and air-conditioned swimming facilities, stretching at a land area of 9,500 metres each. They were designed as per Olympic standards. The swimming pools also include grandstands for capacity crowds of 300 spectators, as well as administrative and service offices, cafeterias, toilets for men and women, changing rooms, gymnasiums, sauna and steam baths, jacuzzis, massage rooms, parking lots and other facilities.

new leasing programme for the residential component of the Golden Mile, Palm Jumeirah project in Dubai, has recently been introduced. Golden Mile is located on the western portion of the Palm’s trunk and has a total of 10 buildings consisting of 860 residential units, offices and retail outlets. The residential component will be managed by Fairmont Palm Hotel & Resort and includes one, two and three-

bedroom apartments, townhouses and penthouses with sea and park views. Tenants can move into their new residences from this month onwards. “We are committed to delivering superior services and quality residential properties to our customers. This leasing service gives Dubai residents an affordable option to enjoy a luxurious island lifestyle and the spaciousness of these new apartments, which are 50 per cent

Dubai Holding to consolidate back-office operations Dubai Properties Group, Sama Dubai and Mizin to align support services ubai Holding has announced that it will merge the back-office operations of three of its real estate entities, Dubai Properties Group, Sama Dubai and Mizin (a member of Tatweer) under one consolidated operation. While the ownership and core activities of the three companies will not change, this will lead to closer working relationships, by realising efficiencies through the consolidation of their back-office operations. This will not impact the legal relationship that the companies have with their current partners including their suppliers, contractors and their investors.

Downtown people mover Limitless has invited bids for the design and construction of its Downtown Jebel Ali people mover, with the contract due to be awarded by mid-2009. The people mover – a quiet, convenient and environmentally friendly alternative to the car – will carry residents and visitors around each of the four zones that will make up the 200 hectare Downtown Jebel Ali development. Designed to cut car use and reduce congestion, it underpins Limitless’ commitment to sustainability by moving people, not just cars, in all of its large-scale developments. Salah Ameen, Project Director, Downtown Jebel Ali, said: “Downtown Jebel Ali will be a sustainable, transport-rich development where people can live, work and visit without owning a car. The area is designed around using two legs

Offices in the first four commercial buildings at Downtown Jebel Ali are now available for lease instead of four wheels, with a number of transport options – metro links, people movers and areas where people can walk or cycle – to reduce car dependency and our collective impact on the environment.” Limitless is also working with the Dubai Roads and Transport Authority to build three of the four Dubai Metro stations that will be located in Downtown Jebel Ali. The four zones within the development will each have a Metro station along-

side a distinctive, mixed-use central plaza building, providing easy transport links to other zones and to the rest of Dubai. Downtown Jebel Ali, under construction along an 11 km stretch of Sheikh Zayed Road in Dubai, will house 200,000 people in 326 buildings, 237 of which will be residential towers. Offices, from 3,500 to 15,000 square feet, are now available for lease in zone one: to find out more, visit www.downtownjebelali.com

LEED floor coverings Sustainability leader aims for LEED Gold certification and hopes to support other Middle East firms with green building projects nterfaceFLOR, a worldwide leader in the manufacture of environmentally responsible modular floor coverings is expanding its presence in the region and aiming for LEED (Leadership in Energy and Environmental Design) Gold certification for its new regional office in Dubai. The company, which produces innovative, fashionable and sustainable carpet tiles, will be using its enhanced presence in the region and its green building rating systems knowledge to support customers with their own green buildings, helping them to become more sustainable and save money in the process. The LEED recognition, which the retailer has also earned for other premises throughout the world including America, Thailand, China, and India, will add to InterfaceFLOR’s

impressive commitment to Sustainability and Mission Zero - its ambitious bid to achieve a zero environmental footprint by 2020. As a founding member of Emirates Green Building Council and leader in the sustainability field, the company is able to assist clients in choosing the most sustainable carpet tile from their wide product portfolio and meet the criteria

in different Green Building Rating Systems, such as LEED or Estidama – both consensus-based standards for developing high-performance, sustainable buildings. Globally, six out of eight platinum commercial interior LEED projects already use InterfaceFLOR carpets and the company intends to extend that figure, as the number of projects in the region increases exponentially.

DUBAI REAL TIMES

larger than comparable Dubai apartments,” said Piaras Moriarty, Vice President of Sales & Marketing for IFA Hotels & Resorts, developers of Golden Mile, Palm Jumeirah. Residents in Golden Mile, Palm Jumeirah, where apartments are 50 per cent larger than comparable Dubai apartments, will enjoy services similar to those offered in a five star hotel. A range of concierge services will be provided with an option to purchase additional ‘a la carte’ services including child-care, housekeeping, grocery shopping and more. Residents will also experience the convenience of having cafes, shops and boutiques within the development, as well as various pools and wellequipped gyms.

// PROPERTY PRICES

IN FOCUS

Parking for sewage water tankers Al Nahda Pond Park 2

A Parking lots for sewage water tankers at Sewage Treatment Plant in Al Warsan

he General Maintenance Department of Dubai Municipality recently completed setting up parking lots for sewage water tankers that come to the sewage treatment plant in Al Warsan, at a total cost of Dh12.7 million, with the aim of assembling and organising the entry and exit of these tankers to and from the plant. This was announced by Juma Khalifa Al Fuqae, Director of General Maintenance Department, who added that this is an important and major step to solve the problem of traffic jams of waste water tankers on the roads in Al Aweer. The area has been arranged and planned in a way that ensures the safe and orderly entry of the tankers that come to the treatment plant and a smooth exit without affecting the traffic around the main streets. Al Fuqae added that the project was designed taking into account the provision of basic services for the drivers of the tankers such as prayer area, cafeteria, toilets, and other things.

DUBAI REAL TIMES

Electricity costs soar 66 per cent in one year

Energy saving initiatives to play leading role at Facilities Management Expo as companies seek cost cuts in a tight market HE Dr. Hanif Hassan Al Qassimi, Minister of Education officially opened The Office Exhibition

ommercial and residential property owners and tenants in Dubai who failed to take energy saving measures a year ago will have seen their electricity bills soar by up to 66 per cent in the past 12 months, according to a survey carried out by Farnek Avireal, the

UAE company which advises building owners on how to dramatically cut utility bills-for property and facilities management event F M Expo. FM Expo takes place from 24-26 May 2009 at the Dubai International Exhibition and Convention Centre. On March 1, 2008 ,Dubai Electric-

s part of the activities during Plantation Week, which is being celebrated by the municipalities of the country to mark the first ‘Municipalities Month’, Dubai Municipality announced the completion of the gardening work at Al Nahda Pond Park 2, which is scheduled to open soon to the public. It is one of the new recreational parks established to provide entertainment, recreation and Al Nahda Pond Park sporting services for residents. The park has green spaces and recreational facilities, games for children, jogging tracks, bicycle tracks, sports grounds and places to sit. It has children’s play areas, a 1.4 kilometre cycling track, a 1.35 kilometre jogging track and a 4,444 square metre area for practising different sports. The centre of the park is occupied by a two chamber pond to collect groundwater and rain water; one chamber for the water to be pumped out and the other to drain the water from the pond when the need arises. The pond is provided with a pump to raise the water and two pumps to operate the fountains which ensure circulation and prevent the water from becoming stagnant. The design of the pond allows water to flow out when the level rises due to rain; this also prevents growth of bacteria.

ity and Water Authority (DEWA) introduced a new tariff structure known as the slab system. It was aimed at encouraging energy consumers to use less by paying more. Average individual electricity usage at the time was said by DEWA to be 20,000 kilowatt hours per annum and 130 gallons of water daily, placing Dubai among cities with the highest consumption per person in the world. However, consumers, whether commercial, educational or residential who did not introduce measures to reduce consumption after the introduction of the slab tariff will have seen electricity bills in some cases soar in the past full year by over a million dirhams. Farnek Avireal say the cost of its Energy Saving Module – which reduces electricity consumption from air conditioning and refrigeration systems by up to 25 per cent – can be paid back in savings within 12 to 18 months.

Strong demand for world-class office solutions Strong demand for high-end office solutions and international interest in the Middle East market was highlighted at the region’s largest office showcase, The Office Exhibition, which was officially opened by HE Dr. Hanif Hassan Al Qassimi, Minister of Education. With large amounts of construction projects now reaching completion and the commercial sector still expanding, companies are in need of bigger workspaces. Growth in the public sector has shown a steep rise in fitouts and refurbishments across the region, including schools, hospitals and universities. Running alongside the exhibition was the brand new Office Talks seminar with industry experts addressing key topics such as sustainability, workplace health and productivity and facilities management.

IN FOCUS

A ‘real’ opportunity Investment company Gowealthy Capital Limited to launch funds worth $325 million this year By Ambily Vijaykumar

Peter Penhall, Senior Executive Officer, Gowealthy

mate, isn’t zeroing in on the asset a bit of a challenge? “We are able to leverage the knowledge and connections of the Gowealthy group. Hence we are able to identify opportunities up front often before they hit the general market and are able to secure offerings that the general public would not even know are available. We then structure the fund around that asset. For instance, I could be looking at bringing a fund to the market that focuses on distribution facility. Dubai is pitching itself as a major distribution hub within the region and there is an opportunity for a fund to cater to that sector,” explains Mr. Penhall. Though he refused to divulge names, Peter says the company has been entrusted with the responsibility of launching the residential funds on behalf of “two significant” developers. “One of them is a listed entity and the other is a master developer of one of Dubai’s most dynamic projects,” he informs. Considering that investor confidence in real estate is at an all-time low, convincing them to enter the

market is a definite challenge. Penhall explains that though there is nothing like a safe investment, “the diversification of the fund will ensure that the risk is spread. If someone puts the money into a single property, and if that property crashes, then all is lost. That is not the case in a property fund.” The investors for these new funds will be professional clients who are investor savvy and have a net asset worth of over a million US dollars. Another aspect of the

ent to exit. The next method is to hold on until the maturity of that fund and the last one is during consolidation of certain funds. Penhall underlines the need for high net worth individuals to enter the market at this time rather than employ a wait and watch policy. “We would want to offer them a small entry point into the market so that they are not too exposed to the risks. Investors don’t have to put in five million dollars, they can begin at a hundred thousand instead. Because if they wait, they will miss out on being a part of the action,” he informs. Gowealthy is confident that with the spike of 2008 having been erased and with most of the 2007 price in the real estate market having been eliminated, the market is back into the 2006 pricing structures. “Had this not been the case, the opportunity for further growth on the back of the 2008 phenomenal move would have been that much more limited,” Penhall says. With unregulated operations of the real estate market bringing

“The government has invested a lot of money in infrastructure which is the most crucial aspect. What is seen to happen is that without the infrastructure in place, most major developments fail to deliver to expectations” property fund is “its three-fold exit strategy”. Gowealthy says they can introduce new clients into the fund and in that way can allow an existing cli-

about massive losses it has endured, Gowealthy says its decision to be registered at the DIFC and be regulated by the DFSA “should give investors a lot of confidence.”

DUBAI REAL TIMES

t a time when everyone is turning away from the real estate market there is someone who believes this is the best time to enter the market. Investment company Gowealthy Capital Limited, a subsidiary of Gowealthy Holding will be launching three property investment funds in the second quarter of this year with a net worth of $325 million. Each fund that will be denominated in dollars will have a separate structure and a minimum number of investors in it with the fund required at the entry level for each individual being $250,000-500,000. The focus of the funds will mainly be assets in Dubai for the moment, though Gowealthy Capital is also keen on tapping into the wider GCC markets at a later stage. The funds will be of five-year duration as “investment in property should either be a medium or a long term venture,” says Peter Penhall, Senior Executive Officer, Gowealthy Capital. “What was happening in the past was that there were lots of short-term players of speculative nature in the Dubai real estate market. They have all burnt their fingers,” he adds. But the question that comes to mind is “why now?” “The fundamentals within the GCC are sound. In Dubai, the government has invested a lot of money in infrastructure which is the most crucial aspect. What is seen to happen is that without the infrastructure in place most major developments fail to deliver to expectations,” says Peter. Since it is a property investment fund, considering the current cli-

APPOINTMENTS

Arady announces new CEO

Jassem Saleh Busaibe

rady PJSC, one of the UAE’s real estate investment companies, has appointed Jassem Saleh Busaibe as its Chief Executive Officer to take over the day-to-day running of the company. Busaibe, a UAE National, previously held the position of Chief Investment Officer. Prior to joining Arady in October 2008 , Busaibe was Senior Vice President in the Private Equity Department for Abu Dhabi Investment Company where he also

served on its Investment Committee. Busaibe started his career in ADIA as Portfolio Manager at its London Office. Throughout his career, Busaibe has positioned himself as a leader with acute business acumen and a thorough working knowledge of capital markets. He commented on his appointment: “It is clear that Arady’s prospects are bright despite the turbulence affecting our markets in the immediate future. The not inconsiderable achievements of this young company provide a solid foundation for us all to build on. Arady’s core assets, however, are its people, and I feel confident that this high calibre team will work tirelessly towards a bright and prosperous future.” HE Sheikh Hamdan bin Mubarak Al Nahyan, Chairman of Arady, added: “With his extensive investment experience and strategic real estate expertise, I’m confident that Jassem will continue to contribute to Arady’s growth and successs.”

Dubai Group and Dubai International Capital to align Soud Ba’alawy and Sameer Al Ansari appointed Co-Chairs of DHIG

DUBAI REAL TIMES

rake & Scull International (DSI) PJSC , an end-to-end, UAE service provider of mechanical, electrical and plumbing (MEP) contracting, infrastructure, water and power (IWP) and civil contracting, assembled a formidable executive team in preparation for its

listing on the Dubai Financial Market (DFM). Since the IPO in July 2008, four powerful industry leaders have been recruited to ensure DSI has an extremely experienced executive team available to lead the company into the future as a public company. This remarkable and highly experienced team consists of Charles Lever as General Manager & Director of MEP, Michael Salmon as Chief Commercial Officer, Zeina Tabari as Chief Corporate Affairs Officer and Kamil Daniel as Chief Investment Officer. DSI’s IPO, which was 101 times oversubscribed, attracted around 45,600 applicants who invested funds of approximately Dh124 billion into the company. These funds will be used for three purposes: organic growth, the development of exist-

ing business and pursuing strategic acquisitions. DSI will be the first specialist MEP contracting Company to list on the Dubai Financial Market. Fellow of the Chartered Institute of Building Service Engineers, Charles Lever’s role encompasses the development and implementation of effective business strategies. Michael Salmon has over forty years experience in the engineering and construction industry. His chief objective will be to introduce and implement the systems and controls to take effect as a result of DSI’s IPO. Prior to DSI, Salmon was with Drake & Scull, UK, for 15 years working on major projects such as the London Underground’s Jubilee line extension. Zeina Tabari has the task of managing communication at all levels between DSI, the financial community, and other stakeholders. Kamil Daniel joins DSI as Chief Investment Officer where he draws on his experience at Standard & Poor and as an adviser to the Economic Planning Unit of the Malaysian Prime Minister’s Department to direct the overall investment programme and provide oversight of externally managed investments. Daniel will also undertake the research and implementation of the merger and acquisitions programme.

New CEO appointed for TPM Sameer Al Ansari

Soud Ba’alawy

Drake & Scull assembles a formidable team

ubai Holding has announced that Soud Ba’alawy, Executive Chairman of Dubai Group and Sameer Al Ansari, Executive Chairman of Dubai International Capital will take on the roles of Chairmen of Dubai Holding Investment Group. In addition to his current role as CEO of Dubai Group, Tom Volpe will become the CEO of Dubai Holding Investment Group and Acting CEO of Dubai International Capital. While the ownership and core ac-

Tom Volpe

tivities of Dubai International Capital and Dubai Group will not change, both companies are to forge a closer working relationship to realise efficiencies through the consolidation of their back-office operations.

PM, a Dubai-based project management consultancy, has appointed Dr. Adel Karem Jemah as its new CEO. Prior to his appointment as CEO of TPM Construction Consultancy, Dr. Jemah was the Vice-President for Dubai Operations at Hill International, where he was directly responsible for the oversight and management of multiple high-profile projects in the region. Dr. Jemah holds a PhD in Structural Engineering from the University of Wales, College of Cardiff, where he worked as a lecturer for several years. Among the projects, TPM is currently managing are: (1) Living Legends development with 500 villas, 12 residential buildings and 12 multi-storey car parking, three commercial buildings, golf course, golf club and hotel, community facilities, including a primary school, kindergarten, nursery and a shopping mall; (2) Ajman Marina development composed of 30 towers of mixed use, quay wall and yacht club; (3) three commercial towers at Business Bay, and; and (4) An iconic mixed use high rise tower at the DIFC

HANDOVERS

Delivery of luxury villas at Victory Heights begins

Realty at the Els Club

Villa at Victory Heights

Residential component follows Els Club Course opening in 2008

elivery of the first villas of the Victory Heights luxury development, an exclusive com-

munity of 964 townhouses and villas sitting on 25 million square feet of sporting paradise, started recently.

The Els Club, a championship golf course designed by the three-time major winner from South Africa, Er-

nie Els, which forms the centrepiece of the Victory Heights community, was opened in April 2008. As was the case with the opening of the Club, the President of Dubai Sports City, Khalid Al Zarooni, believes that progress made in delivering the first of the Victory Heights properties is a key moment in the unfolding story of this master development which was launched in 2004. Zarooni stated that Bureau Veritas, the international quality assessor, had dutifully monitored build quality from the project’s start to finish and can attest to the tremendous attention shown by developers to these residential offerings.

800 residential units at Apartments in Lake View Tower Lake Jumeriah

DUBAI REAL TIMES

l Mazaya Holding The Icon 1 has handed over 800 residential units at the Icon 1 and Icon 2 projects, the first projects to be sold out completely at Jumeriah Lake. As the Dubai market prepares to receive 70,000 residential units during 2009 and 2010, Al Mazaya has worked extremely hard to ensure delivery of these properties to their owners early in 2009, with the delivery of other projects expected during the coming two years. Said Eng. Fathi Dhamiri, SVP Projects, Mazaya Dubai: “Al Mazaya is also developing three commercial towers, called Business Avenue for the business sector in the same area. This is 50 per cent complete, with handover due to take place towards the end of 2010.” Dhamiri went on to say that the company is keen to comply with laws in terms of the management of special services at real estate projects. Thus, services management at the Icon Towers was awarded to an expert special service company called Spectrum, a subsidiary of Al Mazaya.

uxury lifestyle provider Damac Properties has completed its Lake View Tower - the second of the company’s projects to be completed at Jumeirah Lake Towers. The final completion certificate was awarded to Damac Properties recently and customers have started to move into the 40-storey tower. The final completion of the 536 apartments and retail outlets at Lake View marks the end of a significant year for Damac Properties (2008) in the UAE, where the company has fulfilled its promise of delivering around 2,000 units into the market. Less than ten apartments are left at the Lake View development and the company is currently offering special incentives for these ready-to-occupy units. Damac Holding Chairman, Hussain Sajwani said: “Completing this development is a superb way for us to start the first quarter of 2009. There is no doubt that the second half of last year saw a big shift in terms of the affect of the global economic crisis on the property market in Dubai. We firmly believe that the market will continue to reward those companies that deliver on the quality they promised. We are pleased to see our first customers now able to move into Lake View and enjoy an area that is becoming more and more popular with the recent opening of Dubai Marina Mall and with the new metro due to open later this year, which will have stations close by.” Aside from the significance of finishing several other towers in 2008, Damac Properties is continuing to make impressive progress at other key developments across Dubai. At Ocean Heights, the company’s flagship building at Dubai Marina, construction has already reached the 39th floor with one floor being completed every week. Meanwhile at Tecom, Damac Properties’ Executive Heights building is completed and at Smart Heights, the building has reached the eleventh floor. At the company’s only project at DIFC, Park Towers, the twin tower development is now taking shape on the landscape and is rising at a floor every six days. Hussain Sajwani concluded, “This is a new era for the UAE property market. While it was reported by Colliers that property prices fell in Dubai by eight per cent in the last quarter of 2008, overall prices were up 59 per cent on the previous year - something worth keeping in perspective. We are fully aware that the market conditions will remain tough in the UAE during 2009, but believe that by staying focused and continuing the way we have, we will be in a strong position when the market starts to recover. Construction is continuing steadily across our developments and we look forward to reporting more progress in the coming months.”

LAUNCHES

Reef Commercial Tower Completed project bolsters commercial offering in JLT district

eef Commercial Tower, developed by Reef Real Estate Investment, has recently finished construction and is ready for occupancy in the Jumeirah Lake Towers (JLT) district. The G + 32 tower provides attractive office solutions for businesses seeking accessible commercial space and a stable investment opportunity. Supporting the growth of JLT, this tower offers Grade A freehold office space. The tower will house a luxury spa operated by WTS International – the renowned global spa management specialist that also manages spas in the Trump International Hotel and Towers and the MGM Grand Detroit. Commenting on the launch of the project Craig Johnson, Managing Director of Richmond Realty, the exclusive agent for the project said:

“The current property market is suffering due to the global economic crisis and many projects are on hold. In particular off-plan properties are grinding to a halt so being able to offer a finished project is a real coup. Now more than ever businesses

need to consider strategic office locations that provide a solid return on investment over the long term. Given the location of Reef Commercial Tower and the flexible business opportunities offered by the JLT free zone, this property presents a very attractive proposition to investors.” According to industry analysts, the Dubai property market is experiencing a notable shift away from the short-term speculative investor to owner-occupier long-term investors, making completed projects in good locations the prized pickings. The 200 hectare JLT free zone is quickly establishing itself as an international commercial hub positioned on the main artery through Dubai, the Sheikh Zayed Road, and the new Metro system. It provides strategic business solutions that can be secured by any company after the

approval of a business plan by the Dubai Multi Commodities Authority (DMCC). “As long as a company has a clear business model as part of its initial proposal and can prove that the offices will be a genuine working space, the DMCC Authority will consider granting an operating licence. Commercial businesses do not have to match free zone specifications as is widely thought, and it is necessary for this to be clarified now. The DMCC has simply implemented measures to stop ghost offices from being set up and left empty in its Jumeirah Lake Towers development. “Reef Commercial Tower provides a solid commercial property opportunity and the DMCC offers businesses seeking offices an ideal gateway into the UAE’s commercial property market,” added Johnson.

Chelsea Gardens Hotel Apartments

helsea Group has launched a new upscale, full-service hotel apartment chain, named Chelsea Gardens Hotel Apartments, that is aimed at luxury travellers, business travellers, families and holiday makers. It is located next to the Ibn Battuta Shopping Mall, Jebel Ali. The deluxe hotel comprises of 348 apartments in two buildings that are furnished in style. It includes 20 suites, two restaurants, a coffee shop, business centre, four board rooms, two spacious banqueting halls and stateof-the-art facilities and amenities. There are 169 well appointed rooms in each building, out of which 53 are one bedroom apartments and 116 studio apartments. All are crafted with a singular purpose in mind – to

enable guests to experience tranquility. Located across nine floors, each of the guestrooms is equipped with kitchens fitted with all modern appliances. Other essential amenities include satellite television, DVD players, CD players, high-speed Internet access and direct-dial phones that give one the comfort of a home. With services that include airport transfers (on request), 24-hour concierge, 24-hour security, business centre, conference rooms, 24 hour room service, safe deposit box in each apartment, LCD televisions, fully equipped Nautilus gym, satellite/cable television, housekeeping, laundry service and a travel desk, the tower provides all the facilities one requires.

The Gardens Hotel and apartments opened in December 2008, has two well designed and inviting restaurants providing a wide and varied menu and private dining options. Wharf is an elegant restaurant and offers a wide variety of European

and Asian specialties; themed dinners are popular with house guests. The second restaurant is the Asian restaurant Zen Gardens that caters to an array of authentic Thai and Chinese dishes from Schezuan and the Hunan provinces of China.

DUBAI REAL TIMES

Chelsea Group Hospitality launched Chelsea Gardens Hotel Apartments Dubai with a fresh approach to extending affordable luxury to corporate and leisure travellers.

UNDER CONSTRUCTION

New payment scheme for Aquarius Gate customers

irrus Developments LLC has reacted positively to the needs of its customers by implementing a payment, plan that is linked to the construction development of one of its major projects - Aquarius Gate. The new plan means that for all future payments customers will only need to make them once certain construction milestones have been met. The announcement comes on the back of Cirrus Developments’ discussions with its existing purchasers who they have been meeting with on a one-on-one basis to

listen closely to their needs and expectations. The move has been approved by the Real Estate Regulatory Agency (RERA) and follows a proactive approach by the company to have the new payment plan for Aquarius Gate, located within Nakheel’s Waterfront project, reviewed and supported by RERA. Aquarius Gate, a Dh3 billion project, was revealed to great acclaim in the investor pre-launch phase. The development comprises two towers – one residential and one commercial – and is located in Madinat Al Arab.

Aquarius Gate

A tour of building sites

ubai Properties has announced that work is progressing as scheduled within the Dh110 billion Business Bay master development and several projects including Vision Tower and Aspect Tower are on course to nearing completion. Addressing members of the media after a site tour of the 64 million square feet Business Bay master development, Mohamed Binbrek, Group CEO of Dubai Properties Group, said: “We have ensured work has continuously progressed at a steady pace. As you have witnessed today, around the entire master development, the towers are at various stages of completion. We intend to continue the pace of work towards completion of all developments with Business Bay and other projects as well.”

Vision Tower

Dubai Properties’ first project in Business Bay, the Dh3 billion Executive Towers, markedly visible from the arterial Sheikh Zayed Road and Al Khail Road, is currently 92 per cent complete with work proceeding si-

multaneously on all 11 buildings of the project. While 10 of them are residential (from studio-to fourbedroom), others include one office tower (with 187 office suites), 60 villas located at the plaza level, eight boutique office villas and a three-level podium that offers parking bays for 4,500 vehicles. The structure of the Executive Towers is complete, with the facade nearing completion and commissioning is well underway. The Dh1.2 billion Vision Tower at the Business Bay will release more than 500,000 square feet of commercial office space when all the 67 floors will by handed over by the second quarter of 2009. Construction is over 78 per cent completed and remaining work is progressing as scheduled. As the gateway to Business Bay, the bent glass facade of the

Executive Towers

tower with its high-tech transparent glazing is set to become a signature element of the entire development. It will be internally lit to create a luminous beacon at nighttime.

DUBAI REAL TIMES

Shoring up Celestial Heights

Downtown Jebel Ali development on track

irrus Developments LLC, the first third party developer to begin construction at Downtown Jebel Ali, has completed the enabling, piling and shoring package for its Celestial Heights project. The development is now moving into the second phase of construction.

Behnam Eshragh, Chairman and CEO of Cirrus Developments, said: “By working closely with Limitless, the master developer, and other authorities, we managed to start construction before anyone else.” Muwafaq Kharbat, Projects Director of Cirrus Developments, added: “The construction team has been

working very hard to ensure we complete the first package on schedule. In doing so, we have in the first package used 5,700 cubic metres of concrete, 715 tones of reinforced steel and excavated 93,000 cubic metres. We now have a de-watering system running which is discharging 840 cubic metres of water per day”.

Celestial Heights itself is located in the Trellis District of Zone One, Downtown Jebel Ali, which comprises mid-rise towers, shaded walkways and beautiful parks. The development offers residential, commercial and retail units, and will be made up of three towers - Capella, Orion and Polaris.

Emaar unveils ready-to-live-in

‘Open Home’ in The Old Town

maar Properties has unveiled a ready-to-live-in ‘Open Home’ that highlights the lifestyle amenities and design elegance of residences within The Old Town in Downtown Burj Dubai. The Open Home, which is a fully furnished model home, is open for viewing by customers who can register their interest online at www.emaar.com, or call, or visit Emaar Square Sales Centre from 9am to 6pm, Saturday to Thursday. Emaar is also currently finalising various open homes for other communities within Downtown Burj Dubai. Potential customers can opt to rent or purchase residences within The Old Town through the de-

The Old Town at Downtown Burj Dubai

veloper’s ‘Rent to Own’ or ‘Plan to Own’ schemes. The schemes will enable customers to own property under more affordable terms within Emaar’s world-class master-planned

communities in Dubai. As per the ‘Plan to Own’ programme, Emaar will help potential home-owners and commercial customers who can qualify for a mort-

gage through a bank, to bridge the gap by extending their payment plans. With the ‘Rent to Own’ programme, tenants can adjust 100 per cent of the first year’s rents as home finance if they decide to purchase the property within ten months of living in the home. Featuring low-rise, three-storey apartments, The Old Town has 1,560 residential units in six quarters – Yansoon, Zaafaran, Reehan, Zanzebeel, Kamoon and Miska. The terraces, balconies, recesses and niches are reminiscent of the old world Arab architectural splendour, and make for a comfortable outdoor lifestyle. Amenities include children’s play areas and pool facilities.

The Tiger Woods Dubai commences grassing at Al Ruwaya Golf Club Unique grassing technique utilised for the first time in the region

Grass at Tiger Woods Dubai

ing to see my first ever golf course design coming to life. My vision, and the work of my design company are being realized.” This will be the first course in the region to grass all its fairways and rough areas by sod transplanting. The process involves transplanting turves of grass from the nursery to the golf course. The turf nursery at Al Ruwaya covers an area of 60 acres. A sod cutter is used to remove strips of grass and earth, 42 inch wide and approximately 30 metres long. The rolls of grass are transported from the nursery to the golf course, and subsequently laid onto the fairways and precisely positioned within the appropriate areas. This process produces fairways and primary rough of a very high quality in a short period of time. The teeing areas and greens will be grown through the conventional process of sprigging.

“It’s exciting to see my first ever golf course design coming to life. My vision, and the work of my design company are being realised.”

Al Ruwaya is making significant progress, with the completion of detailed shaping on 10 holes, whilse eight holes remain roughly shaped. Trees are being planted at a rate of 50 per day, with a total of 2,000 of the 11,000 required for the course already been planted.

DUBAI REAL TIMES

he Tiger Woods Dubai, an exclusive 55 million square foot golf community development and a member of Tatweer Dubai, has commenced grassing work on the 7,800 yard, par 72, 18hole championship Al Ruwaya Golf Course, the world’s first golf course to be designed by Tiger Woods Design. The golf course will feature three different varieties of grass. Tifway 419 will be used in the fairways and rough, TifEagle on the greens and tees, and Tifdwarf on the approaches and expanded collars. All three strains have been procured from Atlanta, Georgia, USA. The grassing is underway under the supervision of IMG Golf Course Management, the company mandated to operate and manage the Al Ruwaya Golf Club. Tiger Woods, the world’s number one golfer and Chairman of Tiger Woods Design, said: “It’s excit-

Breaking ground on ‘Champions Tower IV’ and ‘Frankfurt Sports Tower I’ Stromek Emirates Foundation bags shoring and excavation contracts for the two towers

emon Investments has broken ground on two of its latest projects located in Dubai Sports City - ‘Champions Tower IV’ (CT IV) and ‘Frankfurt Sports Tower I’ (FST I). The foundation works on the two high profile projects will be undertaken by Stromek Emirates Foundation (SEF), a subsidiary of M`sharie - the private equity arm of Dubai Investments. The contracts awarded to SEF underline the company’s strong partnership with Memon Investments, who had earlier entrusted the contractor to undertake the initial ground work for two of its previous projects, namely ‘Champions Tower II’ and ‘Champions Tower III’. Furthermore, the groundbreaking of the towers has followed the successful launch of both towers only a few months ago. The company is focused towards hitting the deadline set for the projects’ excavation, shoring and foundation works, in line with the developer’s commitment to its investors for the timely delivery of both the luxury residential towers. The AED 450 million ‘Champions Tower IV’ is a 20-storey tower, which will offer 114 studios, 113 one-bedroom and 19 two-bedroom apartments. The exclusive freehold residential development, which has been designed by Eng. Adnan Saffarini Office, will offer tenants views of the golf course, garden and canal, a state-of-the-art surveillance and intercom system, 24-hour manned security and in-house maintenance, and other luxurious amenities.

Champions Tower IV

Set to provide world-class luxury living, ‘Frankfurt Sports Tower I’ has been designed by Al Hatmy Engineering & Consultancy to emanate a Germaninspired ambience. The tower, which was launched by the developer in partnership with Sumsum Developers, will comprise 224 units, including 140 studios, 56 one-bedrooms and 28 two-bedroom apartments within a total built-up area of 177,378 square feet. It will feature two levels of basement parking, covered parking on the ground floor and the convenience of state-of-the-art amenities.

Infinity Tower on track

DUBAI REAL TIMES

nfinity Tower, the winner of several world-class awards, is on the path to becoming a new landmark for Dubai; a project that will come to be viewed as the epitome of 21st century architecture due to its unique spiral twisting shape. It is a 73–storey residential tower with a dynamic twisting shape and waterfront views. It is the first structure of its kind will be more than 300 metres high and is the dominant feature on Dubai Marina’s landscape. It will also be the world’s tallest tower to feature a 90–degree twist. The structural system for the tower is high strength concrete core with a reinforced concrete column superstructure that rotates with the twisting shape. In addition, each floor will accommodate a 1.08–degree twist to achieve the full 90–degree spiral. The tower will be clad in metal panels with staggered glass and screens to maximise the penetration of daylight to the apartments, creating something that will shimmer in the bright sunlight in a mixture of different reflective materials. Six high-speed lifts shall be installed with a speed of eight metres per second. As of January, the project construction was ahead of schedule and the central core wall reached Level 10 and the six basement floors, ground floor and mezzanine floor have been completed.

i-Rise project on schedule

I-Rise

ealty Capital has announced that construction on its centerpiece i-Rise business tower project remains on schedule and will finish on time for the tower’s announced mid2010 completion date. The casting of the tower’s fifth podium floor slab is underway and will be completed soon. Mechanical, electrical and plumbing installations as well as block-works are also ongoing at the basement and podium levels. “We take pride in handling one of the most awaited projects in Dubai, which has been able to proceed despite today’s challenging business conditions. We assure our clients and partners that work on i-Rise is going smoothly and that we shall continue to anticipate and effectively manage all potential challenges,” said Marwan Mansour, CEO, Realty Capital. Strategically located at Tecom Site-C, Dubai’s Technology and Media Free Zone, the business tower will feature a specially treated podium façade; modern executive and corporate offices; 19 high-speed elevators, dining establishments; commercial space; a fitness centre; a helipad; and a multi-storey car park.

INFRASTRUCTURE

Dubai Industrial City gets its first power substation

ubai Industrial City (DIC), a member of Tatweer Dubai, has announced that Dubai Electricity and Water Authority (DEWA) has supplied the first of three 132 kVA substations that are currently under construction to meet the growing demand for energy from its various manufacturing units. Saeed Mohammed Al Tayer, Managing Director and Chief Executive Officer of DEWA, has pointed out that the authority realises the importance of the industrial sector and considers DIC as an essential pillar of the economy. Keeping this in mind, it aims to supply these areas with the right capacity at agreed pre-specified timings. Rashed Al Ansari, Vice-President of Dubai Industrial City, said: “The supply and operation of the first substation reflects our strong commitment to securing the energy needs of our investors. This has become even more vital with the rising number of investors currently engaged in the construction of various manufacturing facilities/units and factories.” Thanking DEWA for its support, Al Ansari added: “Because of DEWA’s excellent support, our headquarters, Phase 1 of labour residences, four office buildings and three million square feet of warehouses are already functional and completely fitted out with utilities connections, enabling tenants to take occupancy.”

Construction safety course for DM engineers

ubai Municipality, in cooperation with Mirdif Security & Safety Consultants, recently organised a course for its engineers as part of the series of training courses aimed at enhancing their level of competence, field supervision and work inspection in construction sites. All fifty engineers in the Engineering Supervision Section were trained on safety conditions and the new additions in the manual that conforms to the latest and advanced in the field of safety science in the advanced countries. The course coincides with the Buildings Department issuing safety manual for construction sites in Arabic and English, which is considered to be one of the major reference materials on safety in construction sites in the emirate of Dubai. Contractors and consultants can get a copy of the manual from the concerned counters in the Municipality.

Environment Minister briefed on waste management projects

Dubai Municipality delegation visited Mr. Rashid bin Fahd, Minister of Environment and Water at his office and briefed him on the accomplishments, projects and activities of the Waste Management Department in the Municipality. The minister was briefed about the high standard the civic body has reached in waste management, as well as the latest equipment, technology and systems that are being used by the department for storing and transporting waste and treating different types of wastes. The Municipality delegation also invited the minister to participate in the Waste Management Summit, to be hosted by Dubai in May. This event, to be attended by a number of government bodies and private sector establishments, will take up different issues related to waste management and recycling and the latest development in the field.

The first pultrusion factory in Dubai

Wayne Mikkelsen, NZTE’s Dubai-based Trade Commissioner and Dr. Salwan Al-Assafi, General Manager of Pultron Composites Middle East

“Next year is predicted to be slower than originally forecast because of the economic downturn, but Pultron is continuing to invest in the Middle East because there will continue to be underlying growth in our specific sector …”

ew Zealand based Pultron Composites has started building the first pultrusion factory in Dubai at the Jebel Ali Free Zone as part of its expansion plans in the region. The company serves the construction industry through world class pultrusion technology which transforms fibre and specialty resins into reinforced materials with high strength, light weight, corrosive and electrical resistant properties for use in harsh environments where corrosion can dramatically limit the lifespan of steel. Pultron’s purpose built factory in Dubai is part of the company’s strategy to better serve its customer base in UAE, KSA, Qatar, Bahrain and Oman. Its General Manager Dr Salwan AlAssafi says the company has increased its staff in the region

in the past two years and expects to make significant staff increases in the coming year. This includes specialist sales engineers with industry specific knowledge. “Next year is predicted to be slower than originally forecast because of the economic downturn but Pultron is continuing to invest in the Middle East because there will continue to be underlying growth in our specific sector and the corrosion problems will not go away,” says Dr. Al-Assafi. Recently the company won a grant for $1.2 million from the New Zealand Government’s Foundation for Research, Science and Technology. The funding will deliver a new platform of technologies providing greater intellectual capability and technical know how that can be applied across its entire business.

DUBAI REAL TIMES

More than Dh400 million invested to build a series of 132 KVA substations

FACILITIES & SERVICES

Omniyat Asset Management launched

mniyat Holdings has launched Omniyat Asset Management (OAM), a full service management company offering strata, facilities, property management and investment services focused on providing customers with a convenient and efficient way to capture and enhance the value of their property investments. OAM comprises of Omniyat Strata Management, Omniyat Facilities Management and Omniyat Property Services. Omniyat Strata Management has been established to provide strata management services to the Owners Associations. It will provide efficient and comprehensive strata management support to both individual occupants and the common areas and assets. This includes strata levy billing; accounting; insurance; current and future maintenance and repair,

to provide transparency in the way their buildings are managed and operated, as well as to ensure the building as a whole is maintained well into

Peter Walichnowski, CEO of Omniyat

the future. Omniyat Facilities Management ensures the collective needs of the

investor, tenants and the property itself are addressed in a prompt manner. Using state-of-the-art software to improve asset life-cycle and reduce maintenance costs. Staff manage a wide range of variables required to maintain a property. This includes meeting current specifications and international standards, setting a maintenance strategy, concierge and reception services, plus energy and car park management. Omniyat Property Services offers key functions, which are essential to the ongoing management of one’s assets, to add considerable value and sustainability to the investment. These services are tailored to residential and commercial premises. Features include property management; leasing, turnkey fit-out, sales brokerage and other value add services, such as mortgage and valua-

Imdaad to provide FM to Dubai World Corporate Services

Sungwon OBO at Michigan State University Dubai

DUBAI REAL TIMES

mdaad has signed a 10-year contract with Dubai World Corporate Services under which it will undertake maintenance including MEP Services, Civil Engineering, and Infrastructure maintenance at all Dubai World Corporate Services premises. Speaking about the agreement, Jamal Abdulla Lootah, CEO of Imdaad said: “Imdaad has gained vast experience in the field of total facilities management. Our agreement with Dubai World Corporate Services constitutes an added value to our business portfolio which includes various top real estate, financial, services, and industrial companies in Dubai.” Speaking on behalf of Dubai World Corporate Services, Saeed AlQaizi, Director of Group Procurement, Contracts, Statistics and General Admin, said: “Imdaad has successfully established itself as a key player in the growing facilities management industry by keeping pace with advanced technology and services. The company has consistently met our requirements in the past, and continues to do so.” The company offers consultations for facility management from the conception to the completion of projects, transition and operations and delivers long-term services. Some of the major projects it has undertaken include Palm Jumeirah, The Gardens, Atlantis, International City, Jebel Ali Port and Free Zone, Ibn Batuta Mall, Dubai Maritime City and Wasl-DREC

tion services. Peter Walichnowski, CEO of Omniyat Properties said: “Omniyat is committed to providing our customers with outstanding buildings, services and management solutions throughout the lifecycle of their relationship with our properties, which will maximise the return on their investment. Omniyat Asset Management has been established to support our customers with an integrated range of services which otherwise they would find difficult to get from a single service provider. Our aim is to establish a long-term relationship with our customers that continue after we deliver the physical buildings to ensure that the Omniyat experience continues through the investment phase so as to deliver superior returns and to eliminate the problems associated with managing their property investments.”

Eric Raes, CEO of Sungwon OBO

FM solutions specialist is tapped to maintain the excellent condition of MSU Dubai’s new headquarters in Dubai International Academic City

ungwon OBO, a member of Makateb Holding, the first Office Building Operator Company in the world, has signed a one-year renewable contract to provide exclusive facilities management (FM) services to Michigan State University (MSU) Dubai. The company has revealed that it is now finalising a specially developed strategy to optimise the lifecycle of MSU’s facilities. “Appointing Sungwon OBO to provide exclusive facilities management services for its brand new facilities in Dubai International Academic City manifests a high level of confidence in our expertise and capability to satisfy the university’s strict quality standards,” said Eric Raes, CEO of Sungwon OBO. This pioneering facility management company from South Korea, the Facilities Management Division of Makateb Holding, delivers a full range of integrated services, including mechanical and electrical maintenance, cleaning, security, FM consultancy and energy management.

ENVIRONMENT

How will LEED help to ‘green’ Dubai? By David Ball more readily available. This is not to say that Dubai is not aware of the problem. Dubai Municipality is currently developing a new rating system specifically for the emirate. Surely though, with access to many technological advances, research and resources such as the Emirates Green Building Council, developers should be taking the initiative to start thinking of more sustainable designs. At Hydroturf we have been working on energy-saving solutions for a number of years. We are the distributors for many leading, globally recognised companies and choose our partners carefully, ensuring that they share our values. One such partner is Scofield; the number one global brand in concrete colouring and a member of the US Green Building Council (USGBC). All Scofield products contribute to LEED credits across many of the sections including ‘Recycled Content’, ‘Sustainable Sites’, ‘Indoor Environmental Quality’, ‘Regional Materials’ and many more. Another example is SolarDrive who manufacture solar panels that

can be mounted onto the roof of golf carts. As golf carts are common in many of Dubai’s hotels, golf clubs and now even residences such as the Jumeriah Golf Estates, this simple energy saving feature can contribute to saving up to 90 per cent energy over regular golf carts and reducing CO2 emissions by 100 per cent. We are proud to be considered market leaders and hope that others will follow our example. Some ten years ago you could forgive companies for being ignorant to the plight of green initiatives, but as scientific developments are made and education is furthered, individual companies should be focusing on what they are doing to benefit our environment and the prospect of future

generations. David Ball is the General Manager, Landscaping Division, Hydroturf International

Environmentally friendly floors

s Dubai continues to make steps in the direction of change, Hydroturf and L.M. Scofield Company introduce environmentally friendly flooring. The newest product introduced to the Middle Eastern market is the Scofield formula One Lithium Densifier & Finish Coat System, making ground and polished concrete floors low VOC, low maintenance and environmentally friendly. The new line of liquid densifiers is designed to provide a wide range of solutions to the processed concrete market, commonly referred to as grind and polish. Made of a high-quality lithium silicate formulation that is VOC-compliant and cost-effective, the densifiers prolong the nominal service life of concrete floors and reduce floor maintenance costs. The system was engineered to deliver beautiful, durable ground and polished architectural concrete floors where deeper penetration, increased surface hardness and faster shine development are desired. It has many benefits such as increased abrasion resistance, high compressive strength, rapid shine development, and non-dusting. The product produces a rapid chemical reaction that penetrates and densifies the upper layer of the concrete surface much quicker than sodium silicate or potassium silicate formulas. It results in a beautiful and durable surface that is non-toxic and environmentally sound. Once treated, the surface only requires periodic cleaning with a neutral or alkaline cleaner and water.

DUBAI REAL TIMES

H Sheikh Mohammed bin Rashid Al Maktoum’s green initiative has made many companies operating in Dubai realise the effects their products are having on the environment. Adopting a system like LEED, BREEAM, or Greenstar is one responsible step in the right direction of positive change. But is this enough? Most developers have now begun to implement the LEED system on their projects, and although this is a system that works very well in America can it be implemented in Dubai? If we look at the LEED ratings for existing buildings; one of the requirements is that a building must be fully occupied for at least 12 months prior to applying for accreditation. With the unprecedented number of buildings in Dubai at 50 per cent occupancy or less, it seems there are very few that would even be able to apply. Due to the climate and landscape in Dubai, water efficiency would also need to play a much bigger role. While LEED ratings do address water conservation, again this is based on a US standard where water is much

UPDATES // LAWS & REGULATIONS

Q&A Your questions answered by Jacqueline Latham, DLA Piper Middle East LLP Q) Units have been sold at our development and we are constantly being approached by purchasers about the establishment of an Owners Association. As far as we are aware, the draft regulations to the Strata Law are yet to be implemented. What is the position?

Q) I am a developer and one of my developments has completed. We have been providing management services to the development and want to issue service charge bills to all the owners. However, I have heard that there is a freeze on service charges. Is this true?

A) It is anticipated that the regulations to Law 27 of 2007 (“Strata Law”) will be issued in early March and that the regulations will enable an Owners Association to be registered with RERA. It is expected that a developer will have six months from the date of issuance of the regulations to register the Owners Association in respect of their development, so once the Strata regulations are published, you should discuss the implications of them on your business with your legal advisors.

A) It is expected that service charges for buildings that have been handed over will remain at the rates applicable in 2008, unless the 2009 rates are either less than the 2008 rates or approved by RERA. Where service charges for 2009 have already been paid by owners, the sum should be adjusted to reflect the service charges approved by the Owners Association once formed.

Q) We currently provide management services in a residential tower and have heard that the Strata Law regulations are soon to come into effect. Will our business be impacted by these regulations?

Jacqueline Latham is a Legal Consultant (England and Wales qualified), Real Estate at DLA Piper Middle East LLP, Dubai Answers supplied by DLA Piper do not necessarily reflect RERA’s point of view

Q) I work as a real estate agent and am being asked about cancellation fees in respect of off-plan sales; however I am uncertain of the effect of the Land Department Circular interpreting Article 11 of Law 13 of 2008? A) It is understood that the circular may not be legally enforceable. As such, where there is a default under a contract entered into prior to 31 August 2008, the default provisions of the contract apply and where a contract has been entered into after 31 August 2008, Article 11 of Law 13 of 2008 should apply and the developer may retain no more than 30 per cent of the monies paid to date by the purchaser.

DUBAI REAL TIMES

A) While Owners Associations will be required to appoint a manager for their administrative, secretarial and financial affairs, it is understood that the manager will need a licence from RERA to perform these duties. To obtain the licence, you would need to demonstrate that you are qualified to manage an Owners Association, attend any requisite training courses and be appropriately insured.

MARKET TRENDS UPDATES & REGULATIONS ANALYSIS // // LAWS &

Translation and views supplied by Al Tamimi & Company; they do not necessarily reflect RERA’s point of view.

H. H. THE RULER’S COURT GOVERNMENT OF DUBAI

LAW NO. (27) OF 2007 On Ownership of Jointly Owned Properties in the Emirate of Dubai We, Mohamed bin Rashid Al Maktoum, Ruler of the Emirate of Dubai Taking cognizance of:– Federal Law No. 5 of 1985 regarding civil transactions and its amendments; And Law No. 7 of 2006 regarding property registration in the Emirate of Dubai; And Regulation No. 3 of 2006 regarding determining designated areas where non-citizens can own property in the Emirate of Dubai, Issue the following Law:

CHAPTER ONE

Definitions and General Provisions Article (1) This Law shall be called “Law No. (27) of 2007 regarding Ownership of Jointly Owned Property in the Emirate of Dubai”.

DUBAI REAL TIMES

Article (2)

The following words and expressions meanings: Emirate: Department: Chairman: Registry: Master Developer: Sub-Developer: Jointly Owned Property: Unit: Common Areas: Site Plan: Owner:

unless the context otherwise dictates shall have the following Emirate of Dubai Land Department Chairman of the Department The property registry maintained at the Department Whoever is licensed to engage in the property development and sale of Units in the Emirate under the terms of a Master Community Declaration. Whoever is licensed to engage in the property development and sale of Units and acquired the right from a Master Devel oper to develop part of a development project in accordance with the terms of the Master Community Declaration applying to that project. The whole or part of a building or land, or both, divided into Units intended for separate ownership where part of such building or land has been designated as Common Areas. Any flat, floor, a part of land or house (villa) connected or not connected with another house being part of Jointly Owned Property. Those common parts of property designated for common use by Unit Owners and Occupiers and shown on the Site Plan. A plan registered in the Register showing the Units and the Common Areas. Whoever is registered as an owner of a Unit in the Register, in cluding persons with a long term lease or usufruct right for lim ited period and also the Master Developer or the Sub-Develop

Law No. (27) of 2007

er in regard to unsold Units. The terms and conditions governing the development and op eration of Jointly Owned Property. A document complying with relevant regulations and regis tered on the Register that sets out arrangements for maintenance and cost sharing relating to Common Areas and facilities, and including equipment and services in any part of another building which is subject to this Law. An association constituted in accordance with article 17 of this Law. The rules and regulations that govern the Owners’ Association, which shall be issued in accordance with this Law. Whoever leases a Unit (other than a long term lease) and any visitor of a Unit Owner. Any of the following services: – water reticulation or supply; gas reticulation or supply; electricity supply; air conditioning; telephone service; computer data or television service; a sewer system; drainage; a system for the removal or disposal of garbage or waste; a system for the delivery of mail, parcels or goods; any other system or service designed to enhance the Utilities of Units or Common Areas.

Article (3) Lands owned by Developers and used as Jointly Owned Properties (and the Units sold by said Developers) shall be registered with the Department. Where a Unit in an existing Jointly Owned Property is used by the Owners of another Jointly Owned Property, the Owners Association for the second Jointly Owned Property becomes a member of the Owners Association for the first Jointly Owned Property.

Article (4) The Department shall prepare and maintain special registers for the Jointly Owned Properties and their Owners and shall issue appropriate title deeds and regulate the sale, mortgage (or any other disposal) of said Jointly Owned Properties and the registration of long term lease contracts and usufruct rights related to these Jointly Owned Properties. Access to those registers shall be provided to all interested parties.

Article (5) Article (4) of Law No (7) of 2006 concerning property registration in the Emirate of Dubai shall apply to ownership of Jointly Owned Property.

CHAPTER TWO

Ownership of Jointly Owned Properties Article (6) The Site Plan and the Master Community Declaration and the Association Constitution form part of the title deed of Jointly Owned Property and shall be attached thereto, and the Department shall keep an original copy of the Master Community Declaration at all times. Each Unit Owner has an obligation in favour of other Unit Owners, Occupiers and the Owners’ Association

DUBAI REAL TIMES

Law No. (27) of 2007

Master Community Declaration: Building Management Statement: Owners’ Association: Association Constitution: Occupier: Utility Service:

to comply with the Master Community Declaration and the Association Constitution. Each Occupier has an obligation in favour of other Unit Owners, Occupiers and the Ownersâ&#x20AC;&#x2122; Association to comply with the Master Community Declaration and the Association Constitution, to the extent to which their provisions apply to an Occupier.

Article (7) Unless otherwise indicated on the Site Plan, the Common Areas of Jointly Owned Property include, without limitation: Structural elements of Jointly Owned Property including the main supports, foundations, columns, beams, structural walls, steps, ceilings, ceiling joists, hallways, staircases, stairwells, emergency exits, entrances, windows located on exterior walls, facades and roofs; Parking areas, watchman rooms, recreational facilities and equipment, swimming pools, gardens, storage facilities, places designated for use by the Ownersâ&#x20AC;&#x2122; Association or whomever it assigns or contracts to manage the Jointly Owned Property; Main utility equipment and systems including electricity generators, lighting systems, gas systems and equipment, water systems, heating and cooling systems, air conditioning systems and waste storage and treatment facilities; Lifts, tanks, pipes, generators, suction fans, air compressor units, mechanical ventilation systems; Water mains, sewer pipes, ventilation shafts, gas pipes and flues and electrical wiring and conduits serving more than one Unit; All fittings, connections, equipment and facilities used by more than one Unit Owner; Any device for measuring the reticulation or supply of utilities;

DUBAI REAL TIMES

All other parts which are not located within the boundaries of a Unit, that are necessary and required for the existence, maintenance or safety of the property. 2

Unless otherwise indicated on the Site Plan, the Common Areas of Jointly Owned Property comprising land, other than a building or part of a building, include, without limitation:

roads, roundabouts, intersections, pathways, pavement sides, drainage ways curbs, gutters, median strips, bridges, viaducts,

lakes, ponds, canals, promenades, fountains, water features and other waterways, including all equipment associated with them;

Landscaping, open space areas and playgrounds.;

wires, cables, pipes, sewers, drains, ducts, devices and equipment by which Units or Com mon Areas are supplied with Utility Services; and

measuring or Utility Service supply devices designated for common use by the Owners and Occupiers of the Units.

Article (8) Unless otherwise indicated on the Site Plan, each Unit situated in a building or part of a building shall include, without limitation, the following: Floors, floor materials and components down to the base of the joists and other structures supporting

Law No. (27) of 2007

the floor of the Unit; Plaster ceilings and all other types of ceilings, additions that form part of the internal area of the Unit and spaces between the ceilings, ceilings above the support walls and structures inside the Unit and walls separating the Unit from the rest of the Jointly Owned Property and any adjacent Units or Common Areas; All non-load bearing walls and non-support walls inside the Unit; Windows, glass and fixtures that form part of the interior windows, lighting systems for the Unit, doors, door frames and all equipment and fixtures serving the Unit; All internal connections serving the Unit; All fixtures and fittings installed by the Unit Owner or Occupier; All additions, modifications and improvements made to the Unit from time to time, and for the purpose of this paragraph the Unit does not include the Utility Service situated in the Unit that services the Common Areas or another Unit.

Article (9) Unit Owners and Developers with respect to unsold Units own an undivided share of the Common Areas in the proportions indicated in the Master Community Declaration unless agreed otherwise. For the purpose of this paragraph the proportions are to be determined on the basis of the Unit area out of the total area of the Jointly Owned Property.

CHAPTER THREE

Disposal of Units of Jointly Owned Property Article (10) A Unit Owner may sell or dispose of his Unit by any kind of disposal and also is entitled to mortgage his Unit in favour of a bank or financial institution provided that the disposition conveys the whole of his interest in the Unit and Common Areas.

Article (11) A Unit co-owned by two or more persons may not be divided among the co-owners unless the Departmentâ&#x20AC;&#x2122;s approval is obtained.

Article (12) Each co-owner of a Unit has a right of first refusal to purchase another co-ownerâ&#x20AC;&#x2122;s share in a Unit offered for sale to a non owner. If more than one co-owner possesses this right, then they shall be entitled to purchase proportionally to their existing interests. The right of first refusal does not apply to any sale between spouses, lineal ascendants, lineal descendants, brothers or sisters or their descendants.

Article (13) The right of first refusal cannot be divided, so it cannot be used or abandoned unless in whole, and in case of multiple owners of this right each shall use his right according to his share, and if one or some of them abandon his right then this right shall be transferred proportionally to their existing interest.

DUBAI REAL TIMES

Law No. (27) of 2007

Unless otherwise indicated on the Site Plan, each Unit associated with Jointly Owned Property comprising of land, other than a building or part of a building, shall include, without limitation, everything situated within the boundaries of the Unit, other than the Utility Service that services the Common Areas or another Unit. Each Unit is entitled to appropriate support and shelter from the other Units and the Common Areas. Dividing walls between adjoining Units shall be shared by both Owners if they are part of the Common Areas.

The right of first refusal shall lapse should the selling co-owner notify the other co-owners, through a Notary Public, of the name and address of the third party purchaser and the conditions of sale, and the co-owners fail to agree to said conditions within a period of 1 month after receiving said notice. In the event a co-owner agrees to buy, he must notify the selling co-owner through the Notary Public of said intention within 15 days of receiving notice of the sale and complete the sale procedures at the Department within 10 working days from the end of this period. If it is proved that the sale to the purchaser was completed on better terms than the terms in the notification sent to the co-owners; they have the right to claim for compensation for the damage suffered to them before the competent court.

Article (14) Jointly Owned Properties registered according to this Law are not subject to the provisions of Preemption mentioned in the Federal Law No. (5) of 1985 regarding civil transactions.

Article (15) A Unit Owner may lease his Unit on condition that the Unit Owner and tenant remain obliged to comply with the Association Constitution and the Master Community Declaration towards the other Unit Owners, Occupiers and the Owners’ Association.

Article (16) Under no circumstances can Common Areas be divided. Common Areas may not be disposed of, in whole or in part, separately from the Units to which they appertain.

CHAPTER FOUR

Owners’ Association Article (17) An Owners’ Association shall be legally formed upon the registration of the first sale of a Unit in a Jointly Owned Property in the Register. The Association shall comprise the Unit Owners of the Jointly Owned Property and the Master or Sub Developer with respect to unsold Units. A Unit Owner’s membership in the Association shall commence upon registration as the Owner of the Unit and shall lapse upon the expiry of his registration as the Owner of the Unit.

Article (18) The Owners’ Association is a legal entity not for profit and has a separate legal existence from its members, has the right to sue in this capacity and to own movable assets. The Owners’ Association shall be subject to the provisions and terms of this Law, the provisions of the Master Community Declaration and the Association Constitution and shall be represented before the Courts or other authorities by its Manager.

Article (19)

DUBAI REAL TIMES

Each Unit Owner and the Developer with respect to unsold Units have the right to attend and vote at meetings of the general assembly of the Owners’ Association in accordance with the Association Constitution. Each Unit Owner has a number of votes in proportion to his share of ownership in the Jointly Owned Property as indicated in the Master Community Declaration.

Article (20) Each Owners’ Association must mention “Owners Association” in its name, and number and name of the Jointly Owned Property, if any.

Article (21) The Owners’ Association is responsible for the management, operation and maintenance of the Common Areas and for that purpose must obtain an appropriate license from the Department.

Law No. (27) of 2007

The Owners’ Association may delegate all or some of its powers to a person or company it appoints at such remuneration and on such terms as agreed by the parties.

Article (22) Each Unit Owner shall pay the Owners’ Association his share of the annual service fee to cover the cost of management, operation, maintenance and repair of the Common Areas. Such fee must be calculated in proportion to the Unit area out of the total area of the Jointly Owned Property. The Master or Sub Developer shall pay his share of the fee with respect to unsold Units. A Unit Owner may not relinquish his share in the Common Areas in order to avoid paying his share of the annual service fee.

Article (23) Save as authorized by the Owners’ Association or permitted by the Master Community Declaration, a Unit Owner may not make any alterations or modifications to the structure or external appearance of his Unit or any part of the Jointly Owned Property that would materially affect the Unit or Jointly Owned Property or its external appearance. A Unit Owner who contravenes any of the provisions of paragraph (1) shall be liable to repair the resulting damage at his own expense and in the manner requested by the Owners’ Association. If the Unit Owner fails to comply with this requirement, the Owners’ Association shall repair the damage and recover the repair costs from the Owner.

Common Areas Article (24) Subject to the Association Constitution, Unit Owners and Occupiers and their guests must use the Common Areas as designated for and in a way that does not compromise the rights of others to use those areas or disturb others or put their safety or the safety of the Jointly Owned Property at risk.

Article (25) The Owners’ Association shall have a lien on every Unit for unpaid service fees and any other obligations levied against the Unit Owner in accordance with the provisions of this Law or the Association Constitution. This right shall exist even when ownership of the Unit has been transferred to a new Owner. If the Unit Owner does not pay his share of service fees or defaults on any of his obligations, the decision the Manager of the Association takes against the Unit Owner shall be, after three months of being notified to him through the Notary Public, enforceable by the Execution Judge at any Competent Court, and in all cases the affected person may object to this decision within that period at the Competent Court, and the execution must be withheld until a decision in the subject of the objection is made.

CHAPTER SIX

Obligations of The Property Developer Article (26) In compliance with the construction contract provisions in Federal Law No. (5) of 1985 regarding civil transactions the Developer remains liable for 10 years from the date of completion certificate of the building to repair and cure any defects in the structural elements of the Jointly Owned Property notified to him by the Owners’ Association or a Unit Owner. The Developer, in respect of a development or part of a development undertaken by him, remains liable for one year from the date of completion certificate of the building to repair or replace defective installations in the Jointly Owned Property which, for the purpose of this Article, include mechanical and electrical works, sanitary and plumbing installations and the like. Subject to the provisions of paragraphs (1) and (2) above, nothing in this Law shall in any way affect

DUBAI REAL TIMES

Law No. (27) of 2007

CHAPTER FIVE

or impair any rights or warranties which a Unit Owner may be entitled to assert against the Master Developer or the Sub-Developer under any other law. The provisions of any agreement entered into after this Law takes effect and inconsistent with this Article shall be absolutely null and void.

Article (27) If a project involving Jointly Owned Property is to be developed in stages, the Master Community Declaration must disclose the arrangements for staging the project If the Jointly Owned Property is only part of any other property project and the Building Management Statement did not explain the way of managing this building then the Building Management Statement must be registered at the Register.

CHAPTER SEVEN

Jointly Owned Property Insurance Article (28) An Owners’ Association must maintain comprehensive insurance in an amount equal to the repair or replacement value of the Jointly Owned Property in the event of its destruction for any reason and the Owners’ Association shall be the beneficiary of the said insurance.

Article (29) The Owners’ Association shall procure insurance against liability for damage to property or bodily injury to Owners and Occupiers.

Article (30) The insurance premiums payable by each Unit Owner shall be covered by the annual service fees paid to the Owners’ Association according to the provisions of Article (22) of this Law.

CHAPTER EIGHT

Closing Provisions Article (31) In accordance with Article (18) of this Law, the Owners’ Association may, in its own name and on behalf of its members, sue others including other Unit Owners, Occupiers and any other person occupying the Jointly Owned Property for breach of this Law or the Association Constitution. Article (32) The Chairman shall issue regulations and decisions required to enforce this Law. Article (33) This Law shall be published in the Official Gazette and shall take effect three months from the date of publication.

Mohamed bin Rashid Al Maktoum Ruler of Dubai DUBAI REAL TIMES

Issued in Dubai on: 10 December 2007 Corresponding to: 30 Thu Al Qeada 1428 AH

Law No. (27) of 2007

RERA REGISTRATION NO 153