Professional Documents
Culture Documents
MANAGING EDITOR
K Raveendran ravi@sterlingp.ae Message from the CEO
MANAGING DIRECTOR
Sankaranarayanan
EDITOR
sankar@sterlingp.ae
A Sharing Society
Linda Benbow linda@sterlingp.ae “Sell, sell, sell.”
“Sell the biggest.”
Contributing Editors
“Become the richest.”
Vanit Sethi vanit@sterlingp.ae
“Offer the most spacious unit with the best view and get finance
Manju Ramanan manju@sterlingp.ae
in only one hour.”
Creative Director
Harikumar PB harikumarpb@gmail.com This is exactly how some of Dubai sector stake holders were acting.
Designer For the past few years Dubai’s real estate market boomed and witnessed un-
Ujwala Ranade ujjwalaranade@yahoo.com precedented returns on investment. The buzz words “most spacious”, “sea
view” and “most luxurious” were heard around town as individuals strove to
Sales and Marketing earn the most money and flip properties as quickly as possible for as much
General Manager (Sales & Marketing) profit as possible. The market was moving quickly, yes, - and upward, - however
Radhika Natu radhika@sterlingp.ae not in a sustainable fashion.
Product Manager
Since RERA was established the focus has been on fostering sustainable growth
Vijayan G vijay@sterlingp.ae
and development in the market, based on demand, transparency and trust.
Whereas previously the industry witnessed great selfishness, where individuals
Accounts & Administration isolated themselves from others, honoured hidden agendas and intentionally
Biju Varghese biju@sterlingp.ae concealed useful information from colleagues, all the while RERA has been en-
couraging a market based on team work and sharing.
Office Co-ordinator
Daisy Cartagena Orfrecio daisy@sterlingp.ae
As today’s market is going through tough times, I do not believe any person
Circulation Supervisors will succeed working alone. I am confident that all of the stakeholders in the
Ibrahim A. Hameed real estate sector must work together, to share information and experiences so
Saleem K U 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 effec-
Printing tive tools to accomplish the same goals, and as an industry I urge us to work
Asiatic Printing Press L.L.C., PB 3522, Ajman, UAE. Tel. 06 743 4221, together, be creative and pro-active to embrace such initiatives.
www.asiaticpress.com,
email: asiatic@eim.ae
Distribution:
Eng. Marwan Bin Ghalita
CEO, Real Estate Regulatory Agency
Tawseel PB No 500666
DUBAI REAL TIMES
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responsibility nor accredits any P.O. Box 500595, Dubai, UAE. Tel. +971 4 3678061 + 971 4 367 2245, Fax +971 4 367 8613
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C
O
N
4 COVER STORY
T
CLEARING E
THE AIR N
T
S
14 PERSONALITY
Essa Saeed Ahmed Al Mansoori
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
3
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
I
n a move to help the Dubai real with a scheme to help buyers stay on RERA’s website www.rpdubai. scheduled, and
estate market get back on its abreast with monthly progress on com and includes the latest on-site • projects that are on the verge of
feet, the Real Estate Regulatory their purchased property. This has photographs of the status of various completion.
Agency (RERA) has come out been done through an online report developments. The monthly reports RERA engineers are visiting the
are available to buyers all over the building sites of various develop-
globe. ment projects in the Dubai and are
For this purpose, the regulator doing a spot check to bring in the
has classified real-estate projects un- up-to-date information required.
der various categories, including: “Six hundred and ninety five
• projects that have not been projects with escrow accounts, out
launched of the total 875 registered with RERA
• projects that have been launched will be covered under this scheme,”
but construction is yet to com- informs Marwan bin Ghalita, CEO of
mence RERA. The move has been necessi-
• projects under construction but tated after reports stated that over
whose delivery has been re- 50 per cent of the projects have
DUBAI REAL TIMES
able to deliver sold projects on time meeting their clients and are agree- Beginning new projects will not developers as well; RERA says “there
and whether buyers will be able to ing on cancellation among them- be a cake-walk for developers. They will be a consolidation of several
finally get what they’ve paid for. To selves. There are cases where clients will now have to own the land 100 projects”. For that, the regulator is
lay these doubts to rest, RERA simul- have got the money immediately af- per cent before beginning construc- involving the master developer and
taneously conducting financial au- ter they reached an amicable settle- tion. Developers also need to show the sub developer of various proj-
diting on all projects registered with ment for claims. Others are settling that they have the finances to carry ects in a dialogue to “co-operate to
it, in co-ordination with developers for a scheduled payment,” states out 20 per cent of the construction meet the expected challenges in
and managers of various escrow ac- Eng. bin Ghalita of the new project before they are the market”.
counts. While this year will see a nearly 20 given approval for off-plan selling. This, Eng. bin Ghalita says in- 5
“In a booming market, everyone per cent drop in the supply figures, To eliminate scenarios where cludes, “rescheduling land pay-
but a global one. There has defi-
nitely been a slump especially in
the sales volume but value of the
property has more or less remained
unchanged,” states Eng. bin Gha-
lita.
RERA says it has seen a dip of
45 per cent in sales while compar-
ing 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 regula-
tor is confident that Dubai’s sale-
ability has not been hit and with
the $20 billion bond programme
announced by the Dubai govern-
ment, “the sentiment is up”.
“We are confident about manag-
ing our financial affairs. Mega proj-
ects are moving, but a few might be
rescheduled. That however is not a
cause of worry since we will ensure
ments, merging some land plots, that they are completed,” says Eng.
transferring some paid amounts to A new online scheme in Dubai will help property bin Ghalita.
the developed land accounts and “Another reason to be confident
facilitating the completion of infra-
buyers determine whether the construction of the resilience of the Dubai mar-
structure for projects.” of their homes has been cancelled, delayed ket is news of the registration of a
Consolidation of projects is need- or is on schedule. The Independent Progress Dh 200 million project on Al Wasl
ed in cases where developers who Road,” says Mohammed Sultan
began two projects at a given time Monitoring Report will be compiled by Thani, Assitant Director-General of
wish to move people from one proj- government assigned engineers who will tour the Dubai Land Department.
ect to the other to minimise expen-
Dubai's housing construction sites to check that Generally a start-up is not the
issue; it is sustaining things that
diture. RERA gives a green signal to
such requests but on condition that progress is being made and assess the stage have become difficult. With banks
the investor approves this move and that the work has reached. Some reports are becoming choosy while lending
the property is registered with the especially to the real estate sector,
Land Department.
already available on the RERA website. sustaining investor confidence will
“We have not received reports of be a challenge.
a single abandoned project so far. “Banks cannot stop lending since
We are not denying the fact that if a tor since January 2008, while 505 secure his/her rights,” adds Eng. bin they will be out of business. Some
person comes with a hidden inten- complaints within a short span be- Ghalita. people say that the market will start
tion to cheat, then he will achieve ginning August 2008 have been re- RERA is working side-by-side picking up by April. Let the market
what he wants to. But reports of ceived on their website. So what is with the master developers to en- be and it will correct itself,” opines
abandoned projects are untrue,” the nature of those complaints? sure that investor confidence in the Eng. bin Ghalita.
Eng. bin Ghalita clarifies. “Mainly the non-availability of Dubai real estate sector remains RERA says it is taking its role as
What is true is the increasing the sale and purchase contracts, intact. mediator much more seriously than
number of complaints regarding non-commencement or delay of Another concern that the regu- ever before since the global finan-
claims that RERA is receiving. “Ev- construction works, delay in deliver- lator has been trying to address is cial crisis has thrown up an unprec-
eryone is now saying, give my mon- ing units, and receiving funds out- the unsustainable rents across the edented situation. “We are the me-
DUBAI REAL TIMES
ey back. What we want to know is side the escrow account,” informs emirate. A new rental index will diators for an amicable settlement
where they were when they bought Eng. bin Ghalita. be out in April and according to in disputes. The responsibility of ar-
the property three years ago? They How is RERA then addressing trends, rents are likely to reduce de- bitration is with the Dubai Real Es-
did not bother to register the units the complaints? “The law gives pending upon the location in the tate Court. Our effort to include de-
in their name at that time, and now anyone the right to register his/her emirate. The new rental index will velopers, contractors and investors
when disputes are erupting, they property by approaching the Land be based on new contracts as well in this latest initiative is to increase
don’t have the proof to reclaim Department. Even in cases where as existing contracts that have not transparency and eliminate losses
money,” says Eng. bin Ghalita. the master developer of a property expired. in the sector that has been hit the
6 A total of 525 written complaints has not registered the property, the “The slump in the real estate most by the economic crisis,” says
have been received by the regula- onus is on the investor to do so and sector is not a local phenomenon, RERA’s Chief Executive Officer.
Facts & Figures
RESIDENTIAL SUPPLY Types of received complaints
• The non-availability of sale & purchase contracts
No. of residential units entered the market in 2008 29,319 • The non-commencement or delay of construction works
• The delay in delivering units
No. of residential units to enter the market in 2009 31,003 • Receiving funds outside the escrow account
• The non-compliance of real estate brokers with applicable laws and stan-
No. of residential units to enter the market in 2010 43,880 dards, mainly Law No. 8.
• The share of main developers, Emaar, Nakheel, Dubai Holdings is 62.122 Mohammed Sultan Thani, Assistant Director-General
residential units) during the period from 2008 – 2011. of Dubai Land Department – Excellence & Corporate
• RERA's Studies & Research Section identified that 20 per cent of residential Governance Affairs Stated:
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.
T he total value of transactions recorded by Dubai Land Department
during 2008 reached Dh280 billion, corresponding to a growth rate
VITAL STATISTICS 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 total No. of developers registered in RERA 427 the following:
• 5,783 sales transactions of land registered in the department during
The total No. of projects registered in RERA 87 2008 with an estimated value of Dh70 billion.
• 11,908 sales transactions of flats registered by the department in 2008
The total No. of developers that have been deleted from Developers’ 27 with an estimated value of Dh12 billion.
Register, on their wish • 2,292 sales transactions of residential villas registered by the depart-
ment in 2008 with an estimated value of Dh2 billion.
The total No. of projects that have escrow accounts 695 (The value of transactions in 2006 reached Dh62 billion approximately,
and the number of transactions recorded in Dubai Land Department
The total available amount in the escrow accounts after RERA has were 5048. In the meantime, the value of transactions in 2007 reached
supervised and agreed to issue payments from these accounts to cover Dh176 billion and DL recorded 16,037 transactions).
construction works in the projects, as per the law which links between Dh 8 billion There were 22,925 buyers in 2008.
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 The number of land buyers reached 6053 and the proportions of
escrow accounts from RERA nationalities were as the followings:
Real estate management company registered in Ejari Program 209 29% UAE
The registered lease contract in Ejari Programme by the approved real 2.822 27% Asia
estate management companies
19% EU
Real estate brokers registered with RERA belonging to 104 5.974
nationalities 9% Middle East
Trainees who passed the real estate training course organised by RERA
Top nationalities for purchasing residential apartments in 2008
in collaboration with Dubai Properties Faculty and Administration & 6.671
Real Estate Academy The number of apartment buyers reached 14060 and the proportions of
nationalities were as the followings:
DUBAI REAL TIMES
Mortgage Transactions
Total No. of Units Total Value (in billion dirham) Total Area (Sqf)
Lands 1,265 26 78,409,112
Flats 1,335 2 2,280,981
Villas 1,030 2 3,150,889
Value of Sales
10 9
8
6
6 5
4 3 3 3 3 3 3
2
2
0
Sheikh Palm A Jadaf Emirates Al Warsan Ranches Nad Al Jebel Ali Jebel Ali
Zayed Jumeirah Hills Rawyah First Shiba Industrial
Road Third
No. of Sales
1000 914
816 786
DUBAI REAL TIMES
800
613
600
400
246 195 194 183 169 151
200
0
Al Palm Ranches Emirates Al Jebel Ali Warsan Emirates Emirates Mirdiff
Rawyah Jumeirah Hills Jadaf First Hills Hills
8
Cumulative No. of Units Supplied From
Master & 3rd Party Developers
Number of Purchasers of Lands in 2008 = 6053
n UAE
28,664 n ASIA
3.666 9,750 n EUROPEAN UNION
25,653 n MIDDLE EAST
21,253 15,216
n GCC
n NORTHERN AMERICA
n EUROPE
2008 2009 2010 n NORTHERN AFRICA
n OCEANIA
n Master n 3rd Party
n SOUTHERN AFRICA
28% EU
5% North America
Female 23%
Number of Purchasers of Flats in 2008 = 14,060 The percentage of land buyers by gender:
75% Male
n ASIA
25% Female
n EUROPEAN UNION
n MIDDLE EAST
n UAE Males haves exceeded females in purchasing residential villas in 2008
DUBAI REAL TIMES
n NORTHERN AMERICA
n EUROPE
The number of male buyers of villas 2002
n GCC
n NORTHERN AFRICA The number of female buyers of villas 810
n OCEANIA
n EASTERN AFRICA
n WESTERN AFRICA The percentage of villa buyers by gender
n SOUTHERN AFRICA
were as follows:
n MIDDLE AFRICA
n SOUTH AMERICA 71% Male
29% Female 9
OWNERS ASSOCIATIONS
measures relating to
first General Assembly of the Own-
ers’ Association at which time they
must present a proper budget for
consideration by owners.
service charges
Owners Associations will be re-
quired to appoint an Owners’ As-
sociation manager (“General Man-
ager”) who will be responsible for
the administrative, secretarial and
S
oon four regulations relating those developers keen to progress the following clarifications to the financial affairs of the association.
to Jointly Owned Property their registrations to prepare the freeze on service charges an- The general manager will need to
developments in Dubai will necessary documentation and infor- nounced recently: obtain a license from RERA and to
be issued (the “Regulations”). mation. Service charges for existing do so will need to show that they
These regulations will create the legal In addition to regulating regis- buildings, (i.e. buildings that have are qualified to manage Owners’
framework enabling developers, and trations, the regulations introduce been handed over) will be frozen Associations, attend the necessary
in certain instances, owners to ap- international standards governing at the rates that were applicable training course and have the appro-
ply for the registration of an Owners the management and operation of in 2008 unless the 2009 rates are priate professional indemnity insur-
Association with RERA. Developers Owners Associations in Dubai. The for a lesser amount or have been ance in place.
will have six months from the date owners of apartments or villas in a approved by RERA. The freeze will As soon as the Regulations are is-
the regulations are issued to register registered Jointly Owned Property
Owners Associations for their devel- development will become members
opments, and if they do not move of an Owners’ Association which will What is an Owners Association?
promptly, owners will themselves be be responsible for administering • Owners’ Association is made up of owners in apartments or
able to register the Owners Associa- and maintaining the common areas villas in a registered jointly owned property.
tion at the developer’s expense. in their building or villa community • The Owners’ Association is responsible for administering
DUBAI REAL TIMES
RERA has developed an on-line and will be governed by a Board and maintaining common areas of their building or villa
system for the registration of Own- elected by the owners. Owners will community.
ers Associations. Developers wish- be empowered to view the financial • Owners will be able to look at financial statements of the
ing to use the on-line system will statements of the Owners Associa- Owners’ Association and check expenses.
need to undertake a short training tion and to approve their budgets for
programme, after which they will be the expenses that will be incurred in last until the first General Assembly sued, the Dubai Land Department
given a user name and password to managing and maintaining the com- of the Owners Association (which and RERA will be holding informa-
access the system. The system will mon areas on an annual basis. will need to be held within three tion sessions for developers, inter-
be available for use on March 15 - Accordingly, Mr. Eng. Marwan bin months of registration). ested owners and professionals in 11
this should allow sufficient time for Ghalita, CEO of RERA has announced Service charges for buildings that the real estate sector in Dubai.
RERA NEWS
D
h11.3 billion in land transac- said Sultan Butti Bin Mejrin, Direc- one year only." It is rare to get the Dh200 million or
tions was recorded during tor General of Dubai’s Land Depart- To give potential buyers more Dh300 million transactions that oc-
the first 45 days of this year, ment. In 2008, total transactions confidence and comfort, RERA con- curred before," Sultan Thani added.
to retain 30 per cent of the value of handled case-by-case.” linked to freehold ownership were that they were pleased that RERA has
the property (as per the contract) if RERA has been particularly ac- in the final stages and an announce- been in talks with them. Certain pro-
investors sought to pull out of proj- tive in recent months as it strives ment to this effect would be made posals are in the pipeline looking at
ects - a move aimed at protecting to restore investor confidence. It re- soon. ways to assist customers. Also, there
and helping developers overcome cently issued a circular outlining the Dubai’s master developers - are indications of a real estate com-
the current slump. “However, we’ll policies that would govern service Emaar, Nakheel and Dubai Properties mittee being formed by profession-
be flexible. Exceptions may be made charges in the context of freehold - had been facilitating freehold visas als from within this sector serving
if the investor is unable to continue properties. for property buyers till last year when as a platform for consultation prior
12 to pay due to genuine reasons such Bin Ghalita also told the meet- the government stepped in after no- to issuing of new regulations and
as loss of pay, job loss, etc, which we ing, organised by Badr Al Islami - the ticing that some developers had be- guidelines.
Back to school for Dubai developers
I
n an attempt to rebuild investor ket, the number of projects and the ing the market. RERA believes they industry, RERA also has further regu-
confidence in the property sec- added value they give to the com- need to be reduced to a more man- lation introductions in the pipeline.
tor, a new system which grades munity. So, before people invest in a ageable level. “There are too many One will require each developer at-
developers in Dubai is being intro- project, they will see what the rating developers. We need to make the tempting to register off plan projects
duced. of the developer is and will be able number smaller so we can control to fully own the land first. Another
Eng. Marwan bin Ghalita, CEO of to base their decision on that.” them more and they can serve the new regulation will ban freelance
RERA, said, “We are evaluating all the As well as attempting to boost market better,” he added. property agents from operating in
developers in Dubai. They will be confidence, the new system is also Keen to improve the overall im- the emirate and all brokers will have
graded according to their financial aiming to reduce the number of de- age of development properties in to take a RERA training course and
liquidity, their experience in the mar- velopers which are currently saturat- Dubai and to make it a transparent be certified by the Dubai Police.
Discussing new
“Around 20 per cent of residential units in Dubai
leadership paradigm with
young leaders
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
M
this year, compared to 29,319 units in 2008.” ohammed bin Rashid Programme for a detailed discussion of this important concept
Leadership Development (MBRPLD), and we are pleased that the participants were
Marwan Bin Ghalita said “Residential rents in
an innovative leadership programme able to appreciate the merits of this new leader-
Dubai could fall up to 50 per cent by the end of
designed to develop national leaders capable ship paradigm.”
this year in certain neighbourhoods. ‘The rents
of promoting the sustainable development Marwan Bin Ghalita, said: “MBRPLD is part of
have already begun to come down. Depending
of the UAE, conducted a new session of ‘The Dubai’s vision to establish a sustainable society
on the locations, this could range from 10, 20 to
Book Summary Review’ with participants of as the participants of today will be responsible
up to 50 per cent by the end of the year.”
the Young Leaders level examining the new in providing continuity to the development ini-
“The Independent Progress Monitoring Report leadership paradigm in Dean Williams’ “Real tiatives of the emirate. I am pleased with the
will be compiled by government engineers who Leadership: Helping People and Organisations direction it has taken in terms of teaching the
will tour Dubai’s housing construction sites to Face Their Toughest Challenges.” The session participants to self manage themselves and to
check that progress is being made and assess the provided topical discussion points as Williams’ positively influence others to be more produc-
stage that work has reached,” RERA’s CEO said. book offered a new approach that redefines tive citizens, particularly in these times of global
“The reports will be available on the website, the proper function and purpose of leader- economic difficulties. As leaders, the participants
www.rpdubai.com from next week, with ship. need to be responsive to any unexpected turn of
photographic evidence of building work and Mr. Marwan Bin Ghalita, CEO of the Real Es- events in the future and I believe that MBRPLD
details of the stage reached and pending works.” tate Regulatory Agency, served as the reading is providing the right training to enable them to
session’s special guest speaker. The Book Sum- successfully handle such situations.”
Marwan Bin Ghalita, CEO of RERA, said “The mary Review has been created as one of the Real Leadership argues that the true task of
revised rental index will be completed once all periodic activities of the Young Leaders Pro- the leader is to get people to face the reality of
the new tenancy contracts have been signed for gramme, a level of MBRPLD that seeks to quali- any situation themselves and develop strate-
the current year and registered on RERA website. fy young leaders through training programmes gies to deal with problems or take advantage
The first rental index was released at the end of and workshops in line with the strategic plans of opportunities. Williams points out that any
last year and caused controversy as it was based and aspirations of Dubai. leadership that lets people sidestep the some-
DUBAI REAL TIMES
on last year’s rents, thus not taking into account Adel Al Shared, Executive Chairman of MBR- times harsh truth of reality is irresponsible and
the financial crisis and the subsequent drop in PLD said: “The ongoing challenges being faced ultimately ineffective.
rents. We hope to publish an updated index by the entire society underscore the critical The Book Summary Review sessions aim to
soon, maybe in April.” importance of effective leadership. We believe cultivate analytical, communication, compre-
that leaders must be able to rally their people hension and social skills through interaction and
to help in nation building regardless of the discussions of highly informative and thought-
circumstances. Dean Williams’ book provides provoking books.
13
RERA PERSONALITY // PROFILE
Always an achiever
By Amal Abdul Rahim Al Sahlawi
D
istinguished, foresight- its achievements. Any man in the
ed and a strong sup- prime of life can create a good fu-
porter and contender ture here since Dubai is a place of
for change, Essa Saeed good fortune and open to all. HH
Ahmed Al Mansouri, Head of the Au- Sheikh Mohammed bin Rashid Al
diting and Follow Up section within Maktoum always says “Give me
the Trust Account department, has knowledgeable and dedicated
proved his ability to emerge as a people and I will give you the great
winner. This can be seen from his glory.” Following his example Essa
continuous optimistic talks of the tries always to be committed to his
future of Dubai, his enthusiasm duty and his role in the real estate
towards work and his meticulous sector believing that his knowledge
preparation for the unprecedented and dedication is the best way to
challenges that could arise in the fu- success.
ture, with all the opportunities and Away from his professional envi-
possibilities that brings. ronment and work pressure, Essa Al
Since his youth, Mansouri has Essa Saeed Ahmed Al Mansoori Mansouri’s favourite hobby is camp-
been an achiever. Employed in the ing trips and he considers himself
Public Prosecutions Department for
a period of one year, he moved to
Any man in the prime of his life can write his an expert. He also believes in the
power of the future. Memories of
the Guard in 1995 working in Hu- own story here, since Dubai is a place of good old things remain ‘yesterday’ in ef-
man Resources. He continued his faith and can accommodate all fect, no matter how beautiful our
studies while still employed and future progress and development
graduated from the Higher Col- is. His close friend is his father who is
leges of Technology in 2003 with a a lot of fun. Al Mansouri credits him
Diploma in Accounting. His job at RERA requires him to account has come a bit late for the for his perseverance in the struggle
Academic excellence and an work with guarantee accounts; de- discipline and organisation of the to achieve what he did and the hu-
aspiration for better prospects in- velopment of policies, regulations market, he wishes it had been set up mility to return to the way in which
spired him to join the Abu Dhabi and systems of the accounts for earlier, but its presence is what is im- he established everything.
Health Authority as an accountant. real estate management organisa- portant now. The real estate market “He saw to it that his first priority,
His ambition led to the completion tion. The department also develops is a source of income for the emirate the secret of his success, is his small
of his studies, and a degree in 2007 laws and regulations governing the and we need to focus on and benefit family. He is filled with wisdom and
from Griffith University, Australia. activity of banking institutions and from it. Industry leaders benefit in dedication – an ideal atmosphere
Do you know what the next ensures banking activities appropri- terms of knowledge, opportunities, for progress and development.”
DUBAI REAL TIMES
step towards his future was – this ate for the conduct of the special services, laws and legislation, some Al Mansouri also expresses his
man who wanted a break in rou- real estate accounts registered with of which are the first of their kind in admiration for the great achieve-
tine, while looking forward to to- them, monitoring their performance this part of the world – the principle ments of women and his love for his
morrow? He accepted an employ- according to the law. All of this needs of guarantee accounts has set a prec- four young children – they are his
ment offer at RERA. The importance a lot of follow-up, auditing and pro- edent in the Middle East. first motivation to make the world a
of this institution and its ability to fessional communication with the Talking about career develop- better place to live in.
impact positively on the real estate secretaries of the guarantee account ment, he refers to the difficulties of As a person who embraces
sector, the very heart of Dubai, im- and developers. existing opportunities for young an optimistic view of things and
pressed him, and he wanted to be Essa Al Mansouri believes that people, which were not there when loathes the dark, Al Mansouri is mo- 15
part of it. the establishment of the guarantee he was younger. Dubai is proud of tivated by his drive to succeed.
MARKET TRENDS & ANALYSIS // PROPERTY PRICES
DEVELOPERS
LIST OF DEVELOPERS
registered with RERA up to, 19th February 2009
3 Alfajer Properties L L C
770 Alfara’a Homes 6 (Jvs) Ltd
78 Alfaraa Properties
304 Alfattan Properties (L.L.C)
463 Alghanem Real Estate Llc
79 Almadar Investment (L.L.C)
817 Almasah Middle East Investment Limited
411 Alosaimi Real Estate Investments Co L.L.C
18 Alrashid Investments
299 Alshafar Development (L.L.C)
86 Altajir Real Estate L.L.C
448 Amesco Tower Jlt
468 Anil Adinath Bastawade
ID NAME OF DEVELOPER 183 Anis Property Investments Ltd
594 A.C.Holdings Limited 132 Antonia Resources Ltd
514 Aa Global Limited 309 Arabia Group Development Limited
16 Aaa Auctions Organizing & Management 310 Arabia Group Investment Limited
49 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
46 Abyaar Real Estate Development Ksc 532 Aryene Property Developers Limited
31 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 36 Aswan Developers Inc
506 Ahmad Abdulla Ahmad & Ayesha Ahmad Abdulla & Amir Badk- 23 Aswan Investments Ltd O.F
oubeh & Armin Niasar
830 Aurora Limited
268 Ahmed Abdul Rahim Alattar Properties
392 Avanti Holding Limited
574 Ahmed Thani Almuhairi&ezzaldin Ibrahim Al-yousef
131 Avetona Global Ltd
328 Al Duaa Holdings Fzc
595 Avon Developers&investments Limited
826 Al Faraa Investments Limited
317 Axon Development (Fzc)
199 Al Jawi Investment L.L.C
235 Azizi Invesments (L.L.C)
4 Al Manal Development
391 B & M Fzco
DUBAI REAL TIMES
588 D10 Awf Investment Limited 146 Global Group Holding Ltd O.F, Nour Khan (Owner) /
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
73 Dubai Guernsey Property Investment Limited 324 Halcon Real Estates (L.L.C)
35 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) 53 Her Ltd
DUBAI REAL TIMES
398 Emirates Sunland D1 Limited 372 Ilyas & Mustafa Galadari Management Investment &
T
he year 2009 will be char- recently completed projects (and
acterised by the transition those nearing completion) were
from a supply-driven prop- conceived in a seller-driven market
erty market to a demand- where developers failed to prior-
driven one and more succinctly from itise consumer preferences and
greed to need, says Landmark Advi- properly consider aggregate sup-
sory’s real estate report for the first ply. Now faced with an oversupply
quarter of 2009. in certain segments, developers
Prices are no longer dictated by may have to compensate with
developers facing rapidly rising con- strategies like refurbishment
struction costs and frenzied specula- and creative financing, it
tors willing to buy at any price. In the says.
year ahead, consumer preferences, According to Land-
access to capital, and income levels mark analysts, there is still
will reshape demand patterns and some liquidity in the market
ultimately redefine the real estate and interest in opportunistic real
market, it says. estate investments, but the major-
The report points out that as new ity of capital is waiting for a price
supply encounters slowing demand, floor, which is likely to emerge
the market will reward develop- once financing has resumed. As
ers that deliver on the quality they the effects of the global financial
promised and punish those who crisis continue to absorb locally,
do not. When faced with the pros- the real housing price could fall an
pect of falling into the excess supply additional 30 per cent, they feel.
gap, developers of new projects will They further point out that
have to adapt and innovate. Many obstructed financing caused by
DUBAI REAL TIMES
22
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
By Ryan Mahoney
B
etter Homes has launched What documents do I need to make Who is going to respond to me and
a web-driven campaign to an offer? how will I hear and from whom?
build interaction with its None. You just need to fill out a Our agent that represents the seller will
clients, inviting them to simple registration form online that respond to the relevant offer within 24
take control of the current market includes your personal details and hours. of the offer being made. Initially
downturn and submit a price they
are willing to pay for both residen-
tial 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 ap-
proach to real estate, taking advan-
tage of the current buyer’s market.
Ryan Mahoney, Managing Direc-
tor 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 Am I bound by the offer?
of traditional sales methods. It is The offers made through our web-
in our interest to adapt to the cur- site are not legally binding. How-
rent economic climate, and Make ever we would expect that buyers
an Offer presents an opportunity carefully consider offers before they make the offer. If the seller is inter- the agent will just make contact with
for buyers to potentially achieve make them because offers will be ested in moving forward with the the buyer who has made the offer to
extremely competitive prices for taken seriously by the seller and will offer, then all of the necessary pa- introduce himself or herself and explain
desired units.” involve the time of both the agent per work, property viewings and the next steps. Then the agent will
Dubai Real Times asked Mr Ma- and the seller to review the offer due diligence will be conducted present the offer to the seller and once
honey to explain the system in and respond to it in a professional before the purchase of the prop- a response is made, the agent will con-
more detail: manner. erty is finalised. tact the buyer to move forward.
DUBAI REAL TIMES
D
ubai is too big to fail trol the real estate supply in their market and the resale market can in a liquidity trap. Contractors re-
and liquidity will creep, area of core operations. Nakheel, reset themselves, we do not see a quire payment on completed work
albeit slowly, back into Emaar and Dubai Holdings collec- recovery in share prices. We think certificates (which are already being
the market, according to tively control around 70 per cent share price falls now look overdone held up) and purchasers can’t raise
global financial services group No- of all supply coming to the market. on the downside and should begin the bank finance to service the out-
mura International said in a report They are granted large land tracts to stabilise. However, the head- standing instalment payments. So
on the UAE real estate sector. (free or heavily subsidised) and in winds have not petered out yet and developers must focus on the ‘strin-
“The papers remain optimistic return they bridge the funding gap we think that it is too early to be ag- gent control’ of their receivables and
and the property blogs negative between the government and the gressively buying the sector as we payables, with payables on a shorter
– the truth lies somewhere in the sub-developer and ultimately the are probably mid-cycle through the duration than receivables, it says.
middle, in our opinion. We believe end user, it said. deleveraging process,” the report “Different payment plans have
that Dubai is too big to fail and the According to Nomura, the says. been structured by companies and
government entities that effectively speculators, now stuck with prop- Nomura analysts say there are by developments. When banks
control the respective real estate erty assets they intended to sell, are two questions that need to be ad- were falling all over themselves to
markets know this. There is no cash forced-sellers of shares to fund real dressed to kick start the sector: one lend money, a 20 per cent down
and there will be more deleverag- estate instalments. Similarly, share relates to the timing of liquidity re- payment and 80 per cent final instal-
ing, but we believe that liquidity investors receiving margin calls are turn and the other is about sector ment structure was appealing. The
will creep, albeit slowly, back into forced sellers of property, which consolidation. They believe a gov- market was rising and for a low capi-
DUBAI REAL TIMES
the market. In the main, the current in itself creates a circular reference ernment-inspired merger of some tal outlay, speculators could flip the
tranche of developments are likely with a downward spiral. of the players is probably inevitable. property and make a healthy profit.
to be completed before develop- The leading financial services The report notes that during Less desirable developments could
ers call time out. We think the key is group feels that headline-grabbing the run-up in property prices over be made more attractive by the
to back the developers that have a 70 per cent discount ‘fire-sales’ on the past three years, the trend has payment plan, but these are now
strategy at the end of the time out the Palm Jumeirah probably mis- been towards over-development, the ones probably most at risk.”
period,” the Nomura report said. represent the real market, which coupled with increased sales com- The report terms the fall in input
The report points out that the should stabilise once the forced petition that created favourable prices as a positive development for
24 master developers have been vest- sellers have been forced out. payment terms for purchasers, but the sector. Mid-way through 2008,
ed by government interests to con- “Until this occurs and the finance developers are now being caught there was a ‘steel shock’, which
cramped the extremely tight supply The report points out that most
chains further and the price of steel ongoing developments were prob-
During the peak in August, per square foot
peaked at Dh5,500. This is when a ably agreed to under fixed price con-
number of construction contracts tracts (ironically to mitigate the risk construction costs were being quoted at
were priced and basic materials of rising prices). The emerging trend Dh1,200; in Dubai they now average around
were trading at multiples of current is to shelve developments and then
prices. With land prices and basic retender. Contractors who were
Dh475 to Dh500, with some developments
materials then selling at premiums, previously accepting 20 per cent are being quoted at Dh350. This represents a fall of
sub-developers were at the mercy returning to the margins of around 60 per cent in just six months
of the off-plan market. 5 per cent. Nomura estimates that
Similarly, six months ago there those developers who can pause
was an acute shortage of labour, and re-tender for developments The report further says that accounts to ring fence develop-
with contractors competing to not yet in construction can expect Dubai, which first opened the doors ment proceeds and so forth. The
recruit and develop resources to to save at least Dh100 million in to foreign investment, has led the aim is to add transparency to an
cope with project backlogs and material costs on a standard tower way in terms of real estate regulation opaque market and will generally
escalating order books. The labour development. The analysts also be- and other Emirates are now follow- include the monitoring of devel-
shortages have now evaporated lieve that the developers will now ing the lead. “Abu Dhabi and Ajman opments, the provision of rental
and now there are redundancies try to squeeze concessions out of have both announced the forma- indices, adjudication and dispute
and repatriations of workers across contractors — with the alternative tion of separate Real Estate Regula- resolution and the monitoring of
the entire real estate, construction being to cancel the contract. tory Authorities (RERAs) which will media advertising (i.e. sales of de-
and consultancy spectrum. Rents The report cites one of the down- run in parallel with the Dubai RERA velopments).
on heavy equipment have also sides of the real estate boom as the (currently the only formal regulato- Nomura analysts believe that
dropped by 30 per cent in the past reallocation of resources from pub- ry body in the UAE). This is the first increasing the regulatory system
two months. There is now an over- lic infrastructure activities. Logistics, stage of ‘regulatory harmonisation’ and transparency will ultimately
supply of heavy equipment as pri- road networks, utilities, sewage and and a key step towards developing shore up market credibility and
vate developments falter and pub- electricity hubs are required to ser- a de-facto UAE regulatory system, confidence around securing the
lic infrastructure projects (such as vice the new built accommodation, which is required if the UAE is to purchase of property rights. “How-
DUBAI REAL TIMES
the Dubai Metro, Dubai Airport, etc) yet these essential services appear attract, or more importantly retain, ever, sustainable coordination is re-
cannot absorb additional capacity. to have been subordinated to real foreign real estate investors”. quired in our view – this is coming,
During the peak in August, per estate activities. Now, one of the Nomura explains how these reg- but the UAE is not there yet. Until
square foot construction costs were reasons buildings remain unoccu- ulatory frameworks are designed such time, regulatory arbitrage
being quoted at Dh1,200 in Dubai pied is that they cannot be fully ser- to protect parties on both sides of risk remains, where the regulatory
they now average around Dh475 to viced, it points out. So, it is a good the real estate transaction (sales burden on one emirate (Dubai) is
Dh500, with some developments time to redirect activities towards and leasing) with policies framed to greater than the rest and too much
being quoted at Dh350. This repre- infrastructure and utilities using the further regulate development ac- regulation, too soon, in the current
sents a fall of 60 per cent in just six current development hiatus as an tivities (and obligations), mortgage climate may add to an already weak 25
months. enforced ‘catch up’ period. and tenancy registration, escrow outlook”.
MARKET TRENDS & ANALYSIS
Growing
divergence in
office rentals
market
JLL report says gap between asking and actual prices widening
T
here has been a growing per sq.ft. However, the quarterly in- continued into 2009. all vacancy rate across the Dubai
divergence in office market crease from Q3 to Q4 was minimal Active demand for new office market has doubled from seven per
rentals between prime and at roughly five per cent. JLL says space has weakened over the past cent in July to around 16 per cent at
secondary locations over landlords have become much more six months. Many companies have the end of 2008, JLL estimated. This
the past six months, with the aver- flexible in negotiating transacting delayed previously announced ex- headline figure does not, however,
age prime net rents in the Central prices, with the gap between ask- pansion plans, while others have reveal the full story, it says.
Business District (CBD) recording an ing and actual prices widening to reduced the size of their existing The review notes that because of
increase of approximately 10 per around 30 per cent to 40 per cent. operations. the barriers to entry into free zones,
cent and the comparable rent in the As a result, actual prices for prime With the completion of an addi- there are pockets of higher vacancy
secondary locations such as Tecom, office space declined over the sec- tional 4.7 million sq.ft of office space in areas such as Tecom and JLT/
Jumeirah Lake Towers and Jebel Ali ond half of 2008 and this trend has in the second half of 2008, the over- DMCC. While demand has definitely
decreasing by approximately 20 per
cent, Jones Lang LaSalle said in its
Dubai real estate review for Febru-
Estimated and Announced Future Supply
ary.
The average rent of Dh550 per
sq.ft per annum for prime office 95,000,000
space in the CBD increase was re-
80,000,000
corded mainly in the third quarter
Office GLA Sq.Ft
sential industry-related services. As improving infrastructure via roads ity. However, the nation’s long-term plummeted, there is no better time
the most established regulatory and and transportation, as well as utili- economic interest may require shift- for the country to develop what it
advisory body, the real estate market ties and tertiary concerns like build- ing the current transient working needs to be on par with international
will primarily take its cue from RERA ing schools, parks and recreation, all population to one that is more resil- standards. When ailing economies
in Dubai alongside the Land Depart- of which enhances the quality of life ient in times of economic hardship or do make their turnaround (and they
ment, as to what particular improve- for residents, and therefore, directly otherwise. will), the UAE will be more attractive
ments in this area are achieved. affects the vitality of the property We should take comfort in know- and better-equipped to handle the
Having set up the main frame- sector. It has become apparent that ing that Dubai has already taken demand.
28 work for defining the contractual in the real estate downturn, the some initiative to address the in- Article from the Research Department of
obligations between brokers and cli- needs of actual residents and future frastructure gap. The emirate has 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
G
CC construction and de- the value chain. Mergers between significantly better positioned brand,
velopment companies complementary players aiming to in- this brand can be used for the whole
must work towards oper- tegrate the chain both up and down- business; thereby helping the other
ational excellence during stream have occurred in the region. part increase its position. The size
this economic crisis. We are currently Emaar is such an example. They have of the business is equally important,
seeing an unprecedented wave of acquired or developed joint ventures particularly if bank guarantees are
mergers across all sectors as com- with construction companies such as required. Financing lines can be in-
panies seek to secure their positions, The Turner Corporation, real estate creased and used to further growth
balance their portfolio and risks, while agents such as Hamptons and facili- and additional projects.
seeking synergies in their operations. ties management companies such as Key synergies include procure-
Our advice, however, is to tread with Emrill together with Carillion. Most ment and overhead costs, espe-
caution since mergers are rarely the successful large Western developers cially if the company has not already
answer, particularly those borne from including Hochtief and Bouygues reached critical mass. For example,
stress situations. Rather than helping Group, have in the past followed this procurement is enhanced due to
companies achieve operational ex- diversification path through mergers, economies of scale; and overhead
Dr. Dirk Buchta
cellence and create more profitable joint ventures and organic growth. costs can be cut by merging branch
and stronger operations, mergers do merge successfully, only 29 per When merging construction and headquarter operations such as
often destroy value and weaken the cent achieve increased profitability. If companies, there are several syner- sales and marketing. Furthermore,
merger candidates. developers are to merge, they need gies possible affecting both the top the utilisation of specialist equipment
Initial key factors to consider for a to ensure their company is on sound and bottomlines. Our experience has can be increased and the equipment
successful merger are the thorough ground and research their prospec- found that the main synergies in the department itself reduced in size.
assessment of the potentials of the tive partner carefully before deciding top-line are sales and special market However, whether it is a well-
takeover; a clear strategy for the new- this is the best solution. segments. executed merger or service diver-
ly merged company; sound change Mergers in the real estate sec- In sales, some construction com- sification, in these troubled times
management and a post-merger in- tor typically fall into two categories; panies achieved synergy when stay- companies would be well-advised to
tegration process. Development and merging of similar companies, or ing with a multi-brand strategy. first look inwards and maximise value
construction companies have differ- merging of complementary compa- Alternatively, if one company is a from their core operations.
ent business models, cost structures nies.
and risk profiles and therefore may The reasons to merge two similar
have different reasons to consider companies are often to achieve syn-
mergers. ergies and operational excellence
Planning for a merger is para- or balance risks and diversify. While
DUBAI REAL TIMES
T
he group of experts sat at “This is a most unprecedented Dr. Sven-Olaf Vathje is the partner and managing director in BCG’s Frankfurt and Dubai offices.
the top table and faced their global recession, the worst since In 2006, Sven-Olaf was a founding member of the Gulf offices. He is a core member of BCG’s
audience of journalists, busi- The Great Depression in the early insurance and financial institutions practice areas, and has worked with banking and insurance
ness editors and financial part of the last century, stated Dr. clients, across a broad range of topics from business build and strategy development, to
savvy guests. They spoke about Sven-Olaf Varthje, Partner & Manag- organisational redesign and implementation support. In this context, Sven-Olaf has developed
the report that was being launched, ing Director, Dubai. “ It is also a time an in-depth understanding of the real estate industry in Europe and the Middle East.
squared their shoulders and waited of future planning; now is the time The world’s leading multination- velopment of policies supportive of
for questions to be fired at them. to re-furbish existing infrastructure als are facing an unprecedented business. It is also an indication that
Why are there so many ‘experts’ instead of starting new projects. Im- competitive challenge from a new while the current global downturn
around now, after the financial crisis prove roads, put in pipes and cables group of fast-globalising companies poses significant challenges, the
has hit us? for sewage, electricity and other ser- based in rapidly developing econo- Middle East has the potential to
“Well, actually, we were here vices. Build roads, plant parks, plan mies (RDEs), according to the report. become a significant player on the
before, explained Kamel Maamria, where to construct shops, clinics, Entitled The 2009 BCG 100 New Global international stage.”
Partner & Managing Director, Dubai. schools and other facilities for the Challengers: How Companies from Thomas Bradtke, co-author of
We saw what was happening and residents of this country, current and Rapidly Developing Economies Are the report and a BCG partner based
advised our clients to get ready for future. Draft laws and revise regu- Contending for Global Leadership, the in Dubai, said, “Global challenger
the storm. They took our advice and lations if necessary. This is a good report has identified 100 such chal- companies share a number of char-
are weathering the ups and downs time to plan for the future. lenger companies, with combined acteristics that have propelled them
of the situation as predicted.” “Now is the time for advertisers 2007 revenues of $1.5 trillion, that onto the global stage, including
We live in a connected world, to continue marketing their goods are either catching up with or have early advantages in their develop-
explained David Rhodes, Senior because if they don’t they will lose already overtaken their longer-es- ment, ambitious leadership, and
their customers. And it is very dif- tablished rivals in the United States, willingness to reach outside the
ficult to get a customer to return Europe, Japan, and elsewhere. And company to achieve rapid growth.
to you. Once you have lost him to if any of these companies stumble But these companies are not im-
another product he realizes that he and fall during the global economic mune to the damaging effects of
has other choices that are almost, or crisis, there are many others ready to the global downturn. Last year, the
just as good.” take their places. crisis took its toll on their formerly
Sven admitted that the global In all, 14 countries are represented soaring stock prices. Nonetheless,
(from left) Martin Manetti, Sven-Olaf Varthje, property crisis has reached the Mid- in the list; China (36), India (20), Brazil the challengers have been adept at
Klaus Kessler, David Rhodes, Kamel Maamria
dle East. “The real estate industry is (14), Mexico (7), and Russia (6). The changing, learning fast, and adapt-
Partner & Managing Director, Lon- a cyclical one. Many real estate com- Middle East is represented for the ing their businesses to the new eco-
don. “The USA had a bad Christmas panies in the UAE have entered the first time with four companies from nomic environment.”
DUBAI REAL TIMES
period with a drastic downturn in crisis from a position of some finan- the United Arab Emirates and one As challengers chart their cours-
sales. This affected manufacturers cial strength, although they will have from Kuwait. Etisalat, Emirates Airline, es for the future, BCG suggests
in China where 60 per cent of fac- to work harder for their share of the Emaar Properties and Dubai World that they observe six guidelines:
tories closed. This in turn led to less market now.” are the blue-chip powerhouses join- don’t concede the innovation high
machinery being produced in Ger- Recessions usually force people ing the ranks from the UAE. ground, find opportunities in tur-
many” (where many Chinese com- to think and devise ways to go for- Mr Maamria commented, “Having bulent times, protect core RDE mar-
panies buy their equipment from). ward. It is a time of innovations and five companies from the Middle East kets, make productivity improve-
A similar domino effect was felt changes. The teutonic plates of in the list attests to the rapid growth ments a top priority, manage risks to
30 in India when a three-day week was industry are shifting to make new of this region, its speed of economic the business, and develop globally
introduced in the auto industry. business. diversification and the successful de- recognised brands.
COMMENTS
F
or almost a decade, Dubai’s fore the next payment was due, in plan through to completion. The best fered six months ago. Regardless
property market has been the process earning themselves a way forward for this group is to con- of how much you paid for it, we are
comparable to a bullish stock healthy premium. Speculating with- tinue as per the developers’ payment currently in a market where only the
market. Due to the numer- in the off- plan market followed the plan since selling off-plan property most competitively priced properties
ous short-term buyers profiting in a same rule as any other speculation - has become extremely difficult in this are sold. Take your agents’ advice; re-
world of high stakes, a market had high risk and high reward. Therefore, market. For long-term investors, they member they want to sell this prop-
been created that seemed to defy players who purchased at the peak can be comforted by the fact that the erty as much as you do.
the odds. of the market, in terms of price, have fundamentals of the UAE economy Appearance - Keep all furnishings
The off-plan market was for the suffered the greatest losses. Unfortu- still remain strong. neutral; magnolia or white walls are
most part dominated by two types nately, if they are unable to continue For RERA, it is important to protect
good to stick to. Have your property
of buyers; the high stakes ‘player’ and paying according to their contract, the interests of customers as well as cleaned. If the view is a selling point,
the prudent and reliable long term there is little advice that can be given developers and ensure the market re- ensure the windows are washed.
‘investor’. to them. mains healthy in the long term. If and Equally, if your property boasts a spa-
The players were the individuals or Investors, the second type of buy- when a rescue package is established, cious living room, ensure it is not clut-
organisations counting on incremen- er, are in a different situation. They the availability of end user finance will
tered. Today’s market is increasingly
tal growth in the market. They would were not overexposed and took a ease this pressure. end-user oriented.
purchase off-plan property, usually medium to long-term view on their An important negative factor in Viewings - Viewings are a neces-
paying 5-10 per cent of the contract property investment portfolio and the Dubai real estate market cur- sity for selling your property. Ensure
value and source new buyers be- were planning to follow the payment rently is the lack of end-user finance.a set of keys are kept with either the
The global credit crisis has led banks agent or building security for ease of
to minimise their exposure. This has access. If the property is tenanted, en-
left only cash buyers and a handful of sure a method of viewing has been
executives who have financing pre- discussed and agreed with the ten-
approvals. This small segment knows ant. Too many good properties are
they are well placed to negotiate not being sold due to lack of access
even further bargains. for viewings.
For those looking at the rentals The right agent - Do your re-
market, the news is more optimistic, search and select one or two agents
since yields are in the order of 10-15 with a strong presence in your area.
per cent due to a decline in prices. Pick out a few based on profession-
This is causing many sellers to rethinkalism and reputation. Choosing the
their decision since rental incomes areright agent is increasingly important
becoming more appealing by com- as he or she will be fighting your bat-
parison. Those who are not desperate tle to close a deal as well as advising
to sell are holding onto their proper- you with regards to your property. Be
DUBAI REAL TIMES
ties to benefit from the rental yields wary of unprofessional agents. Some
available. Gradually, this will limit the
unscrupulous types have been adver-
supply of property at low prices and tising lower prices than agreed with
help stabilise the situation. 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’ mar-
Realistic 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, 31
compare with prices you were of- within reason.
COMMENTS
A
s we collectively stand important indicator of success – of exposure to a wider audience in a
back and watch the de- and the outside world means the more cost-effective way.
flating of the ‘global people who make things happen
bubble’, there are very and a comprehensive knowledge Skills and energy
few companies or industries that are of the locations and properties on As some of our ranks leave to pursue
unaffected, and the real estate sec- your books. Some companies, in- other less challenging lines of work,
tor is no exception. Alongside the fi- cluding Fine & Country, have built it is evident that the skills and energy
nancial sector - and as a result of the a tremendous sphere of influence to compete will have a significant im-
strength of the bonds between the across some of the most dynamic pact on an agency’s business. Com-
two industries - it is us who are bear- and established property markets in mitted agents who are prepared to
ing the brunt of the global down- the world, and as a result, members work long hours and also acquire the
turn. Having entered the year in a of the group(s) are able to reap the skills to enable them to use technol-
down market in the UAE – and even benefits. ogy and other aids are the people
a second year in many other interna- that will give the real estate sector a
tional markets - the industry is facing In order to meet each Technology new lease of life and longevity.
challenging times.
client’s unique needs, While we are not advocating tweet- That said, driving a business and
But for every person who sees a ing about a new property as soon as servicing clients with dedication will
challenge as a problem, there is an- a combined effort of it comes online just yet, there can be be challenging in a market where it
other who views it as an opportunity. action, energy, key no doubt that the face of real estate
I like to include myself in the second marketing here in the UAE is chang-
camp. The current status of the mar-
people and the control ing. The majority of us consume on-
ket gives us the potential to develop of overheads plays line media daily and increasingly use
new products and new strategies to a pivotal role in any it as part of our purchasing choices
reinforce the services offered by the – with property being no exception.
real estate sector - decreasing the
agency’s success But it is not just user-friendly web-
pressure currently experienced by sites or digital media strategies that
many home buyers and sellers. and trust in the market. will contribute to an estate agency’s
DUBAI REAL TIMES
M
emon Investments, a to Dh1.34 billion, which includes the
Dubai-based property high profile residential 'Champions
developer and part Towers' series, the luxurious ‘'Garde-
of the international nia I & II’, the ‘Frankfurt Sports Tower
business conglomerate, the Memon I’ and the 'Cambridge Business Cen-
Group of Companies, has projected tre'. The developer also announced
that the UAE real estate market will that it has identified major master
bounce back within the next eight developments in Dubai, including
to 12 months. The developer has Jumeirah Village South, Mizin and
based its optimistic forecast on re- Downtown Jebel Ali as locations
cent industry findings, which reflect for its new projects, which will in-
a decline in the construction cost clude luxury residential, commer-
per square foot within the Emirates cial and mixed-use developments.
by an average of 30 per cent since Among the leading construction
the onset of the economic crisis. companies with whom Memon
The developer has also committed Investments has signed strategic
to continue fostering its strong rela- Ahmed Shaikhani, Managing Director, Memon Investments partnerships are Stromek Emirates
tionships with leading construction Foundation, Majed Hilal Contract-
companies, in line with its goals to ing, Al Sarh Contracting and Cairo
hit the delivery targets for its proj- “In lieu of the massive correction in the Contracting Company. Additionally,
ects - starting with the Dh75 million
prices of basic construction materials, the developer has also partnered
‘Champions Tower I’, which is due with leading UAE-based construc-
for delivery by the end of 2009. we are now focusing our strategy on the tion suppliers, including Shanghai
Industry experts point to the implications of this development, particularly & Arabian Electromechanical LLC
massive drop in the prices of steel, (SAE), HI-TECH Electro Mechanical
as well as that of other materials
with regards to the construction and delivery Contracting Est, ETA MELCO and
including aluminium, wood, glass of our launched projects” WIN GATE Electromechanical Ser-
and diesel. The declining cost of la- vices.
bour and supervision due to recent Having delivered over 30,000
redundancies and terminations has materials, we are now focusing our ing healthier, which spells more op- units across the globe with a pres-
also contributed to the dip in con- strategy on the implications of this portunity in the long-term for those ence in 90 countries spread across
struction expenditures, which are development, particularly with re- who can withstand these truly chal- Asia, Africa, Middle East and Europe,
now pegged between Dh400 to gards to the construction and de- lenging times that the market is the Memon Group of Companies is
Dh900 per square feet in Dubai and livery of our launched projects,” said currently facing. It is our goal that presently commemorating its 30th
Abu Dhabi, and to as low as Dh170 Ahmed Shaikhani, Managing Direc- by the time the real estate market year of delivering unique offerings
and Dh200 per square feet in Aj- tor, Memon Investments. “Our stra- regains its former vigour; we will and services to its global customers.
man. Amid speculations of further tegic planning and consolidation ef- be among the few developers to In addition to its extensive expertise
DUBAI REAL TIMES
decrease in construction costs in forts are being driven by our strong have endured the challenges and in the real estate market, the Group
the coming months due to plung- resolve to stay true to our promises remained stable. We plan to accom- has also built a strong reputation for
ing oil prices, building material costs to our customers in the face of this plish this by working hand in hand its unwavering support for various
and transportation prices, Memon economic crisis, and we are proud with our construction partners as causes such as poverty alleviation,
Investments is focusing all its re- that our actions are paying off with we determine the best course of ac- environmental conservation and ac-
sources towards hitting the delivery the steady progress we are witness- tion to be taken during this unique ademic development. As a socially-
deadline set for all its announced ing in all our projects.” period in the history of real estate,” aware international corporation, the
projects. “The current adjustments we are concluded Shaikhani. group has devoted 19 years in sup-
“In lieu of the massive correction seeing in the price of construction The company currently has a port of the Rabia Charitable Foun- 33
in the prices of basic construction indicate that the industry is becom- portfolio of projects valued at close dation and the Rabia Relief Fund.
COMMENTS PROPERTY PRICES
A bright spot
amidst the overall economic news
By Eric Gummers
many instances where families and plex than making a one-time sale.
friends share the use and enjoy-
ment of second properties often 5 key upsides
as a holiday home. Such arrange- There is a logic for many potential
ments are often arranged on an buyers that in purchasing a fraction
informal basis. they will be able to enjoy the use of
a second property that they really
The growth of need and they will accept paying a
fractionals reasonable premium for this
Using the figures from Ragatz Asso- Offering a fraction creates buyer
ciates for 2007, annual sales in the interest; and a number of poten-
US for fractionals, private residence tial buyers who consider buying a
clubs and destination clubs were fraction eventually acquire a whole
Eric Gummers USD $2.3bn with 50,000 households unit
participating. The figures for 2008 Fractional purchasers recom-
A
mong all the depressing will be released next month. mend and bring other buyers which
negative economic news We have been advising a num- is very cost effective marketing
around the globe, there ber of developers over the past Fractions bring use and occu-
seems to be one area decade who have very successfully pancy year round to a project which
where there is continued interest added a fractional offering to their can enhance value.
and activity: Fractions and shared whole ownership real estate sales. Ongoing management brings
ownership. This article seeks to ex- This has enabled those developers ancillary long term income.
amine some of the reasons for the to increase their completed sales by
attraction of fractionals. making additional fractional sales
to consumers who do not wish to
One statistic make the commitment of purchas- Some points from the lawyer’s perspective
In one day in January 2009, Frac- ing whole ownership. Correctly structuring a fractional product requires a commitment to
tional Life www.fractionallife.com, investing the time and energy to create a suitable structure that is ro-
a consumer facing website which Some warning words bust throughout the life of the project. As such a fractional structure
focuses entirely on the fractional The fractional approach will never is inherently more complex than a build and sell model. However for
DUBAI REAL TIMES
space, received 65,759 hits on their be the solution for property where those prepared to invest the effort, fractions may well prove to be one
web site. there is limited consumer attraction of the winning ways to do well in turbulent economic times.
I find that an extraordinary sta- to the particular development and Eric Gummers, a corporate lawyer and partner at Howard Kennedy
tistic and anticipate that readers its location. Bluntly phrased, shared dealing with complex commercial contracts and business relation-
may also be surprised by this. ownership will not rescue a poor ships internationally, is a recognised expert on structuring of mixed
development concept. use and hospitality projects worldwide.
Nothing New under the The successful fractional requires He has worked on some of the first fractional projects in Dubai
Sun considerable thought and planning and the region.
34 There are very few concepts which for the implementation of services
are truly new. There are, of course, and management - it is more com-
COMMENTS
S
herwoods Independent lise during the last two quarters of more accurate depiction of the cur-
Property Consultants has 2009,” said Iseeb Rehman, Manag- rent market situation. Furthermore,
announced that it has re- ing Director, Sherwoods Indepen- as it considers the rental index a
cently deployed new stra- dent Property Consultants. more viable long-term solution to
tegic initiatives to capitalise on an “The sharp acceleration of rents resolve issues in Dubai’s rental mar-
expected upswing in real estate over the last couple of years has ket, Sherwoods expects RERA to up-
business activities within the last put enormous pressure on employ- date the index figures on a regular
two quarters of 2009, as the global ers who were subsidising housing basis and subsequently have a more
financial downturn gives way to allowances, negatively impacting clear-cut policy on the index’s role
more positive changes in Dubai’s the growth of a number of business in the rental market.
property rental market. Further- establishments. With the emerg- “To obtain credibility the index
more, the company revealed that it ing trend of more affordable rents, has to be updated by RERA on a reg-
expects the rental index introduced the long-term prospects become ular basis to correctly reflect market
recently by the Real Estate Regu- a lot more encouraging as it helps rents. There also needs to be a clear
latory Agency (RERA) to further message from RERA; currently they
consolidate and stabilise the rental say the index is only a guide, but if it
market in the long term, as it creates is to replace the rent cap then it will
a highly transparent system that need to be adhered to as law. The
promotes investor confidence and
Sherwoods expects transparency and index could prove revolutionary in
helps control rates from once again affordability to help restore has Dubai meeting the needs of both land-
escalating to unreasonable levels. rent market’s stability in the second lords and tenants and if the mecha-
With rents becoming more af- nism is used correctly, it will provide
fordable, partly as a result of the half of 2009 a very transparent system to evalu-
global financial downturn, Sher- ate rental yields and help control
woods pointed out that the situ- rates escalating again to unafford-
ation will ultimately deliver long- able levels,” concluded Rehman.
term benefits to Dubai’s property Dubai’s rental rates: employment encourage both businesses and Founded in 1988 in the UK by
sector as businesses will feel less and the supply of property in the people to relocate here. According- Iseeb Rehman, Sherwoods has
pressure in subsidising housing al- market. Further job losses could ly, the company has devised new grown and expanded to five branch
lowances for their workers, while erode demand, while the supply of strategies to help clients identify offices all over the UAE with re-
DUBAI REAL TIMES
more people will be encouraged inventory into the market needs to and take advantage of the gainful gional offices in the UK, France, and
to relocate in the emirate. It fur- be controlled to avoid oversupply opportunities that have evolved soon in other key locations around
ther noted that a more stabilised issues. However, as affordable ac- in this transition period in Dubai’s the world. The company offers a
rental market combined with the commodation remains a key driver rental market,” added Rehman. diverse range of services, including
adoption of a credible rental index to the Dubai economy, we have He also noted that some of the search and acquisition of proper-
system will likewise drive investor seen a positive trend in terms of issues raised against the rental in- ties, offshore company information,
confidence as rental yields will be proactive government intervention dex are likely short-term problems, selling of properties, mortgage ser-
much more predictable and easier and the rent market’s resilience, which can be settled once the val- vices, valuation and appraisal, legal
to calculate. which we believe will eventually ues reflected on the rental index and tax services, and lettings and 35
“Two key issues will impact help rents to level off and stabi- are updated for 2009, providing a management.
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 an-
nounce that these projects are go-
ing 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 sched-
uled for the latter part of 2010.
Joe Barr, the Managing Director
of Nakheel’s Development Projects
is confident that despite the finan-
cial 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 over-
all 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 deliv-
ering the products that are being
sold,” he said. mitting’ is to delay work on many
The first step that the developer of its high profile projects. These
has taken towards not ‘over-com- include the Trump International
Joe Barr
“Our contractors have been long-term partners
W
DUBAI REAL TIMES
ith the real-estate done to “readjust its current busi- of Nakheel. What we have done is to lay out our
sector in the UAE, ness objectives to match supply and
and especially in demand in the most effective way.”
long-term business plan with them. We have
Dubai, facing the The mergers of its various busi- also discussed the financial situation and are
music of the global financial crisis, nesses have come at a time when working with them to tide through the situation.
one of the leading developers, Na- Nakheel has also gone on a PR over-
kheel, has merged three of its island drive to promote its developments
And that has helped us in bringing down the
projects Palm Deira, Mina Rashid A tour of its show-case villas and overall expenditure”
36 and The World under one umbrella. apartments at Al Furjan, Jumeirah
This, the developer says has been Park and Jumeirah Village was held
Tower, The Universe, Waterfront is right to start selling again since dialogue with us on their ability to long-term partners of Nakheel.
and Palm Jebel Ali among oth- the demand seems right, we will finance the product they have pur- What we have done is to lay out our
ers. So have these projects been do that. That will obviously gen- chased. We, on our part, have set long-term business plan with them.
shelved? erate the income for the next few up a mechanism to assist them. We We have also discussed the financial
“All these projects are five-to-ten phases,” he explains. put them in touch with a mortgage situation and are working with them
year projects. So the things that we Cash-flow however is the big- broker who works independent of to tide through the situation. And
have deferred, in terms of decisions gest problem facing the market. us and they help the customer out that has helped us in bringing down
to move on, are things that are in Considering that currently banks with the financial needs. So far, that the overall expenditure,” says Barr.
the master-planning phases. So if are holding back on lending and has been working,” Barr says. Part of that expense cutting has
we have got developments over a have reduced loan to value ratios Another entity to be hit by the also been the 500 staff sacked in
10-year period that we might have considerably, customers might be cash crunch has been contractors. December last year. The developer
developed, obviously we are now finding it difficult to finance the There have been reports of many of however, says that since then there
not looking at accelerating those property they’ve purchased. Is Na- them abandoning unfinished proj- have been no redundancies. But
developments,” informs Mr Barr. kheel facing a similar situation on ects because they don’t have the does that mean no future lay-offs as
On being pressed further to spe- its current projects? money. How is Nakheel faring with well? “We do not see any further lay-
cifically answer whether the proj- “Our customers have basi- its contractors for various projects? offs on our existing projects,” states
ects have been shelved, he clari- cally been engaged in a constant “Our contractors have been Barr.
That confidence is also reflected
in the developer’s outlook for 2009.
“We are more optimistic for the cur-
rent 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 commit-
ted 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 be-
lieves will see it through 2009, 2010
Al Furjan show home and beyond.
D
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 specia-
A
lised and pioneering projects. They will help bring up a new leasing programme for the bedroom apartments, townhouses and
DUBAI REAL TIMES
young generation knowledgeable in international practices residential component of the penthouses with sea and park views. Ten-
in sporting competitions. Golden Mile, Palm Jumeirah ants can move into their new residences
The project includes closed and air-conditioned swim- project in Dubai, has recently been in- from this month onwards.
ming facilities, stretching at a land area of 9,500 metres troduced. Golden Mile is located on the “We are committed to delivering su-
each. They were designed as per Olympic standards. The western portion of the Palm’s trunk and perior services and quality residential
swimming pools also include grandstands for capacity has a total of 10 buildings consisting of properties to our customers. This leasing
crowds of 300 spectators, as well as administrative and ser- 860 residential units, offices and retail service gives Dubai residents an afford-
vice offices, cafeterias, toilets for men and women, chang- outlets. The residential component will able option to enjoy a luxurious island
38 ing rooms, gymnasiums, sauna and steam baths, jacuzzis, be managed by Fairmont Palm Hotel & lifestyle and the spaciousness of these
massage rooms, parking lots and other facilities. Resort and includes one, two and three- new apartments, which are 50 per cent
// PROPERTY PRICES
larger than comparable Dubai
apartments,” said Piaras Moriarty, Downtown
people mover
Vice President of Sales & Marketing
for IFA Hotels & Resorts, develop-
ers of Golden Mile, Palm Jumeirah.
Residents in Golden Mile, Palm Limitless has invited bids for the de-
Jumeirah, where apartments are sign and construction of its Down-
50 per cent larger than compa- town Jebel Ali people mover, with
rable Dubai apartments, will enjoy the contract due to be awarded
services similar to those offered in by mid-2009. The people mover
a five star hotel. A range of con- – a quiet, convenient and environ-
cierge services will be provided mentally friendly alternative to the
with an option to purchase addi- car – will carry residents and visi- Offices in the first four commercial buildings at
Downtown Jebel Ali are now available for lease
tional ‘a la carte’ services including tors around each of the four zones
child-care, housekeeping, grocery that will make up the 200 hectare instead of four wheels, with a num- side a distinctive, mixed-use cen-
shopping and more. Residents will Downtown Jebel Ali development. ber of transport options – metro tral plaza building, providing easy
also experience the convenience Designed to cut car use and reduce links, people movers and areas transport links to other zones and
of having cafes, shops and bou- congestion, it underpins Limitless’ where people can walk or cycle – to the rest of Dubai.
tiques within the development, commitment to sustainability by to reduce car dependency and our Downtown Jebel Ali, under con-
as well as various pools and well- moving people, not just cars, in all collective impact on the environ- struction along an 11 km stretch of
equipped gyms. of its large-scale developments. ment.” Sheikh Zayed Road in Dubai, will
Salah Ameen, Project Director, Limitless is also working with the house 200,000 people in 326 build-
Downtown Jebel Ali, said: “Down- Dubai Roads and Transport Author- ings, 237 of which will be residential
town Jebel Ali will be a sustain- ity to build three of the four Dubai towers. Offices, from 3,500 to 15,000
Dubai
able, transport-rich development Metro stations that will be located square feet, are now available for
where people can live, work and in Downtown Jebel Ali. The four lease in zone one: to find out more,
visit without owning a car. The area zones within the development will visit www.downtownjebelali.com
Holding to
is designed around using two legs each have a Metro station along-
I
nterfaceFLOR, a worldwide leader As a founding member of Emir- sustainable buildings.
Dubai Properties Group, Sama in the manufacture of environ- ates Green Building Council and Globally, six out of eight platinum
Dubai and Mizin to align sup- mentally responsible modular leader in the sustainability field, the commercial interior LEED projects al-
port services floor coverings is expanding its company is able to assist clients ready use InterfaceFLOR carpets and
D
ubai Holding has an- presence in the region and aim- in choosing the most sustainable the company intends to extend that
nounced that it will merge ing for LEED (Leadership in Energy carpet tile from their wide prod- figure, as the number of projects in
the back-office operations and Environmental Design) Gold uct portfolio and meet the criteria the region increases exponentially.
of three of its real estate entities, certification for its new regional of-
Dubai Properties Group, Sama fice in Dubai. The company, which
Dubai and Mizin (a member of produces innovative, fashionable
Tatweer) under one consolidated and sustainable carpet tiles, will be
operation. While the ownership using its enhanced presence in the
and core activities of the three region and its green building rating
DUBAI REAL TIMES
companies will not change, this will systems knowledge to support cus-
lead to closer working relationships, tomers with their own green build-
by realising efficiencies through the ings, helping them to become more
consolidation of their back-office sustainable and save money in the
operations. process.
This will not impact the legal re- The LEED recognition, which the
lationship that the companies have retailer has also earned for other
with their current partners includ- premises throughout the world in-
ing their suppliers, contractors and cluding America, Thailand, China, 39
their investors. and India, will add to InterfaceFLOR’s
IN FOCUS
A
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 Mu-
nicipality 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
Parking lots for sewage water tankers at Sewage Treat- the new recreational
ment Plant in Al Warsan parks established to
T
he General Maintenance Department of Dubai Municipality recently provide entertain-
completed setting up parking lots for sewage water tankers that ment, recreation and Al Nahda Pond Park
come to the sewage treatment plant in Al Warsan, at a total cost of sporting services for
Dh12.7 million, with the aim of assembling and organising the entry and residents. The park has green spaces and recreational facilities, games for
exit of these tankers to and from the plant. This was announced by Juma children, jogging tracks, bicycle tracks, sports grounds and places to sit. It
Khalifa Al Fuqae, Director of General Maintenance Department, who added has children’s play areas, a 1.4 kilometre cycling track, a 1.35 kilometre jog-
that this is an important and major step to solve the problem of traffic jams ging track and a 4,444 square metre area for practising different sports.
of waste water tankers on the roads in Al Aweer. The area has been ar- The centre of the park is occupied by a two chamber pond to collect
ranged and planned in a way that ensures the safe and orderly entry of the groundwater and rain water; one chamber for the water to be pumped
tankers that come to the treatment plant and a smooth exit without affect- out and the other to drain the water from the pond when the need arises.
ing the traffic around the main streets. The pond is provided with a pump to raise the water and two pumps
Al Fuqae added that the project was designed taking into account the to operate the fountains which ensure circulation and prevent the water
provision of basic services for the drivers of the tankers such as prayer area, from becoming stagnant. The design of the pond allows water to flow
cafeteria, toilets, and other things. out when the level rises due to rain; this also prevents growth of bacteria.
Strong demand
for world-class
Electricity costs soar 66
ity and Water Authority (DEWA) intro-
duced a new tariff structure known office solutions
as the slab system. It was aimed at
per cent in one year encouraging energy consumers to
use less by paying more. Average in-
Strong demand for high-end office
solutions and international interest
in the Middle East market was
Energy saving dividual electricity usage at the time highlighted at the region’s largest
was said by DEWA to be 20,000 kilo- office showcase, The Office Exhibition,
initiatives to
watt hours per annum and 130 gallons which was officially opened by HE Dr.
play leading Hanif Hassan Al Qassimi, Minister of
of water daily, placing Dubai among
role at Facilities cities with the highest consumption Education.
Management Expo per person in the world. However,
With large amounts of construction
as companies seek projects now reaching completion and
consumers, whether commercial, the commercial sector still expanding,
cost cuts in a tight educational or residential who did not companies are in need of bigger
market introduce measures to reduce con- workspaces. Growth in the public
DUBAI REAL TIMES
HE Dr. Hanif Hassan Al Qassimi, Minister of sumption after the introduction of the sector has shown a steep rise in fit-
Education officially opened The Office Exhibition outs and refurbishments across the
slab tariff will have seen electricity bills
C
ommercial and residential UAE company which advises build- in some cases soar in the past full year region, including schools, hospitals
property owners and ten- ing owners on how to dramatically by over a million dirhams. and universities.
Running alongside the exhibition was
ants in Dubai who failed to cut utility bills-for property and fa- Farnek Avireal say the cost of its En-
the brand new Office Talks seminar
take energy saving measures a year cilities management event F M Expo. ergy Saving Module – which reduces with industry experts addressing key
ago will have seen their electricity FM Expo takes place from 24-26 May electricity consumption from air con- topics such as sustainability, workplace
bills soar by up to 66 per cent in the 2009 at the Dubai International Exhi- ditioning and refrigeration systems by health and productivity and facilities
40 past 12 months, according to a sur- bition and Convention Centre. up to 25 per cent – can be paid back in management.
vey carried out by Farnek Avireal, the On March 1, 2008 ,Dubai Electric- savings within 12 to 18 months.
IN FOCUS
A ‘real’ opportunity
Investment company Gowealthy Capital Limited to launch funds worth $325 million this year
By Ambily Vijaykumar
A
t a time when everyone ent to exit. The next method is to
is turning away from the hold on until the maturity of that
real estate market there fund and the last one is during con-
is someone who believes solidation of certain funds.
this is the best time to enter the mar- Penhall underlines the need for
ket. Investment company Gowealthy high net worth individuals to enter
Capital Limited, a subsidiary of the market at this time rather than
Gowealthy Holding will be launch- employ a wait and watch policy.
ing three property investment funds “We would want to offer them a
in the second quarter of this year small entry point into the market
with a net worth of $325 million. so that they are not too exposed to
Each fund that will be denomi- the risks. Investors don’t have to put
nated in dollars will have a separate in five million dollars, they can be-
structure and a minimum number of gin at a hundred thousand instead.
investors in it with the fund required Because if they wait, they will miss
Peter Penhall, Senior Executive Officer, Gowealthy
at the entry level for each individual out on being a part of the action,”
being $250,000-500,000. The focus mate, isn’t zeroing in on the asset a market is a definite challenge. Pen- he informs.
of the funds will mainly be assets bit of a challenge? hall explains that though there is Gowealthy is confident that
in Dubai for the moment, though “We are able to leverage the nothing like a safe investment, “the with the spike of 2008 having been
Gowealthy Capital is also keen on knowledge and connections of the diversification of the fund will ensure erased and with most of the 2007
tapping into the wider GCC markets Gowealthy group. Hence we are able that the risk is spread. If someone price in the real estate market hav-
at a later stage. to identify opportunities up front of- puts the money into a single prop- ing been eliminated, the market is
The funds will be of five-year ten before they hit the general mar- erty, and if that property crashes, back into the 2006 pricing struc-
duration as “investment in property ket and are able to secure offerings then all is lost. That is not the case in tures. “Had this not been the case,
should either be a medium or a long that the general public would not a property fund.” the opportunity for further growth
term venture,” says Peter Penhall, even know are available. We then The investors for these new on the back of the 2008 phenom-
Senior Executive Officer, Gowealthy structure the fund around that as- funds will be professional clients enal move would have been that
Capital. “What was happening in set. For instance, I could be looking who are investor savvy and have much more limited,” Penhall says.
the past was that there were lots of at bringing a fund to the market that a net asset worth of over a million With unregulated operations
short-term players of speculative na- focuses on distribution facility. Dubai US dollars. Another aspect of the of the real estate market bringing
ture in the Dubai real estate market. is pitching itself as a major distribu-
They have all burnt their fingers,” he tion hub within the region and there
adds. is an opportunity for a fund to cater
But the question that comes to to that sector,” explains Mr. Penhall. “The government has invested a lot of money
mind is “why now?” Though he refused to divulge in infrastructure which is the most crucial
“The fundamentals within the names, Peter says the company has
aspect. What is seen to happen is that without
DUBAI REAL TIMES
GCC are sound. In Dubai, the govern- been entrusted with the responsibil-
ment has invested a lot of money in ity of launching the residential funds the infrastructure in place, most major
infrastructure which is the most cru- on behalf of “two significant” devel- developments fail to deliver to expectations”
cial aspect. What is seen to happen opers. “One of them is a listed entity
is that without the infrastructure in and the other is a master developer
place most major developments of one of Dubai’s most dynamic property fund is “its three-fold exit about massive losses it has endured,
fail to deliver to expectations,” says projects,” he informs. strategy”. Gowealthy says its decision to be
Peter. Considering that investor confi- Gowealthy says they can intro- registered at the DIFC and be regu-
Since it is a property investment dence in real estate is at an all-time duce new clients into the fund and lated by the DFSA “should give in- 41
fund, considering the current cli- low, convincing them to enter the in that way can allow an existing cli- vestors a lot of confidence.”
APPOINTMENTS
Sameer Al Ansari, Executive Chair- region. Dr. Jemah holds a PhD in Structural Engineering from the Univer-
man of Dubai International Capital sity of Wales, College of Cardiff, where he worked as a lecturer for several
will take on the roles of Chairmen of years.
Dubai Holding Investment Group. In Tom Volpe Among the projects, TPM is currently managing are: (1) Living Legends
addition to his current role as CEO tivities of Dubai International Capital development with 500 villas, 12 residential buildings and 12 multi-storey
of Dubai Group, Tom Volpe will be- and Dubai Group will not change, car parking, three commercial buildings, golf course, golf club and hotel,
come the CEO of Dubai Holding In- both companies are to forge a closer community facilities, including a primary school, kindergarten, nursery and
vestment Group and Acting CEO of working relationship to realise effi- a shopping mall; (2) Ajman Marina development composed of 30 towers of
42 Dubai International Capital. ciencies through the consolidation mixed use, quay wall and yacht club; (3) three commercial towers at Busi-
While the ownership and core ac- of their back-office operations. ness Bay, and; and (4) An iconic mixed use high rise tower at the DIFC
HANDOVERS
D
elivery of the first villas of the munity of 964 townhouses and villas The Els Club, a championship golf can attest to the tremendous atten-
Victory Heights luxury devel- sitting on 25 million square feet of course designed by the three-time tion shown by developers to these
opment, an exclusive com- sporting paradise, started recently. major winner from South Africa, Er- residential offerings.
A
The Icon 1
l Mazaya Holding tomers have started to move into the 40-storey tower.
has handed over The final completion of the 536 apartments and retail outlets at Lake View marks the
800 residential end of a significant year for Damac Properties (2008) in the UAE, where the company
units at the Icon 1 and has fulfilled its promise of delivering around 2,000 units into the market. Less than ten
Icon 2 projects, the first apartments are left at the Lake View development and the company is currently offering
projects to be sold out special incentives for these ready-to-occupy units.
completely at Jumeriah Damac Holding Chairman, Hussain Sajwani said: “Completing this development is a
Lake. As the Dubai market superb way for us to start the first quarter of 2009. There is no doubt that the second
prepares to receive 70,000 half of last year saw a big shift in terms of the affect of the global economic crisis on the
residential units during property market in Dubai. We firmly believe that the market will continue to reward
2009 and 2010, Al Mazaya those companies that deliver on the quality they promised. We are pleased to see our
has worked extremely first customers now able to move into Lake View and enjoy an area that is becoming
hard to ensure delivery of more and more popular with the recent opening of Dubai Marina Mall and with the new
these properties to their metro due to open later this year, which will have stations close by.”
owners early in 2009, with Aside from the significance of finishing several other towers in 2008, Damac Proper-
the delivery of other proj- ties is continuing to make impressive progress at other key developments across Dubai.
ects expected during the At Ocean Heights, the company’s flagship building at Dubai Marina, construction has
coming two years. already reached the 39th floor with one floor being completed every week. Meanwhile
Said Eng. Fathi Dhamiri, at Tecom, Damac Properties’ Executive Heights building is completed and at Smart
SVP Projects, Mazaya Heights, the building has reached the eleventh floor. At the company’s only project at
DUBAI REAL TIMES
Dubai: “Al Mazaya is also DIFC, Park Towers, the twin tower development is now taking shape on the landscape
developing three com- and is rising at a floor every six days.
mercial towers, called Business Avenue for the business sector Hussain Sajwani concluded, “This is a new era for the UAE property market. While it
in the same area. This is 50 per cent complete, with handover was reported by Colliers that property prices fell in Dubai by eight per cent in the last
due to take place towards the end of 2010.” quarter of 2008, overall prices were up 59 per cent on the previous year - something
Dhamiri went on to say that the company is keen to com- worth keeping in perspective. We are fully aware that the market conditions will remain
ply with laws in terms of the management of special services tough in the UAE during 2009, but believe that by staying focused and continuing the
at real estate projects. Thus, services management at the Icon way we have, we will be in a strong position when the market starts to recover. Construc-
44 Towers was awarded to an expert special service company tion is continuing steadily across our developments and we look forward to reporting
called Spectrum, a subsidiary of Al Mazaya. more progress in the coming months.”
LAUNCHES
R
eef Commercial Tower, de- need to consider strategic office approval of a business plan by the
veloped by Reef Real Estate locations that provide a solid return Dubai Multi Commodities Authority
Investment, has recently fin- on investment over the long term. (DMCC).
ished construction and is ready for Given the location of Reef Commer- “As long as a company has a clear
occupancy in the Jumeirah Lake cial Tower and the flexible business business model as part of its initial
Towers (JLT) district. The G + 32 opportunities offered by the JLT free proposal and can prove that the
tower provides attractive office so- zone, this property presents a very offices will be a genuine working
lutions for businesses seeking acces- attractive proposition to investors.” space, the DMCC Authority will con-
sible commercial space and a stable According to industry analysts, sider granting an operating licence.
investment opportunity. Support- the Dubai property market is expe- Commercial businesses do not have
ing the growth of JLT, this tower of- riencing a notable shift away from to match free zone specifications as
fers Grade A freehold office space. the short-term speculative investor is widely thought, and it is necessary
The tower will house a luxury spa to owner-occupier long-term inves- for this to be clarified now. The DMCC
operated by WTS International – the tors, making completed projects in has simply implemented measures
renowned global spa management good locations the prized pickings. to stop ghost offices from being set
specialist that also manages spas in The 200 hectare JLT free zone is up and left empty in its Jumeirah
the Trump International Hotel and “The current property market is suf- quickly establishing itself as an inter- Lake Towers development.
Towers and the MGM Grand De- fering due to the global economic national commercial hub positioned “Reef Commercial Tower pro-
troit. crisis and many projects are on hold. on the main artery through Dubai, vides a solid commercial property
Commenting on the launch of In particular off-plan properties are the Sheikh Zayed Road, and the opportunity and the DMCC offers
the project Craig Johnson, Manag- grinding to a halt so being able to new Metro system. It provides stra- businesses seeking offices an ideal
ing Director of Richmond Realty, the offer a finished project is a real coup. tegic business solutions that can be gateway into the UAE’s commercial
exclusive agent for the project said: Now more than ever businesses secured by any company after the property market,” added Johnson.
C
helsea Group has launched a enable guests to experience tran-
new upscale, full-service ho- quility. Located across nine floors,
tel apartment chain, named each of the guestrooms is equipped
Chelsea Gardens Hotel Apartments, with kitchens fitted with all modern
that is aimed at luxury travellers, busi- appliances. Other essential amenities
ness travellers, families and holiday include satellite television, DVD play-
makers. It is located next to the Ibn ers, CD players, high-speed Internet
Battuta Shopping Mall, Jebel Ali. The access and direct-dial phones that
deluxe hotel comprises of 348 apart- give one the comfort of a home.
ments in two buildings that are fur- With services that include air-
DUBAI REAL TIMES
C
irrus Developments LLC, the Behnam Eshragh, Chairman and working very hard to ensure we com- Celestial Heights itself is located
first third party developer CEO of Cirrus Developments, said: plete the first package on schedule. in the Trellis District of Zone One,
to begin construction at “By working closely with Limitless, In doing so, we have in the first pack- Downtown Jebel Ali, which compris-
Downtown Jebel Ali, has complet- the master developer, and other au- age used 5,700 cubic metres of con- es mid-rise towers, shaded walkways
ed the enabling, piling and shoring thorities, we managed to start con- crete, 715 tones of reinforced steel and beautiful parks. The develop-
package for its Celestial Heights struction before anyone else.” and excavated 93,000 cubic metres. ment offers residential, commercial
project. The development is now Muwafaq Kharbat, Projects Direc- We now have a de-watering system and retail units, and will be made up
46 moving into the second phase of tor of Cirrus Developments, added: running which is discharging 840 cu- of three towers - Capella, Orion and
construction. “The construction team has been bic metres of water per day”. Polaris.
Emaar unveils ready-to-live-in
‘Open Home’ in The Old Town
E
maar Properties has unveiled a gage through a bank, to bridge the
ready-to-live-in ‘Open Home’ gap by extending their payment
that highlights the lifestyle plans. With the ‘Rent to Own’ pro-
amenities and design elegance of gramme, tenants can adjust 100 per
residences within The Old Town in cent of the first year’s rents as home
Downtown Burj Dubai. The Open finance if they decide to purchase
Home, which is a fully furnished the property within ten months of
model home, is open for viewing living in the home.
by customers who can register their Featuring low-rise, three-storey
interest online at www.emaar.com, apartments, The Old Town has 1,560
or call, or visit Emaar Square Sales residential units in six quarters – Yan-
Centre from 9am to 6pm, Saturday soon, Zaafaran, Reehan, Zanzebeel,
to Thursday. Emaar is also currently Kamoon and Miska. The terraces,
finalising various open homes for The Old Town at Downtown Burj Dubai balconies, recesses and niches are
other communities within Down- veloper’s ‘Rent to Own’ or ‘Plan to communities in Dubai. reminiscent of the old world Arab
town Burj Dubai. Own’ schemes. The schemes will As per the ‘Plan to Own’ pro- architectural splendour, and make
Potential customers can opt to enable customers to own property gramme, Emaar will help potential for a comfortable outdoor lifestyle.
rent or purchase residences within under more affordable terms within home-owners and commercial cus- Amenities include children’s play ar-
The Old Town through the de- Emaar’s world-class master-planned tomers who can qualify for a mort- eas and pool facilities.
T
he Tiger Woods Dubai, an ing to see my first ever golf course
exclusive 55 million square design coming to life. My vision, and
foot golf community devel- the work of my design company are
opment and a member of Tatweer being realized.”
Dubai, has commenced grassing This will be the first course in the
“It’s exciting to
work on the 7,800 yard, par 72, 18- region to grass all its fairways and see my first ever
hole championship Al Ruwaya Golf rough areas by sod transplanting. golf course design
Course, the world’s first golf course The process involves transplant-
to be designed by Tiger Woods De- ing turves of grass from the nursery
coming to life. My
sign. The golf course will feature to the golf course. The turf nursery at vision, and the
three different varieties of grass. Tif- Al Ruwaya covers an area of 60 acres. work of my design
way 419 will be used in the fairways A sod cutter is used to remove strips
and rough, TifEagle on the greens of grass and earth, 42 inch wide and company are being
and tees, and Tifdwarf on the ap- approximately 30 metres long. The realised.”
proaches and expanded collars. All rolls of grass are transported from
DUBAI REAL TIMES
three strains have been procured the nursery to the golf course, and
from Atlanta, Georgia, USA. The subsequently laid onto the fairways
grassing is underway under the su- and precisely positioned within the Al Ruwaya is making significant
pervision of IMG Golf Course Man- appropriate areas. This process pro- progress, with the completion of
agement, the company mandated duces fairways and primary rough of detailed shaping on 10 holes, whilse
to operate and manage the Al Ru- a very high quality in a short period eight holes remain roughly shaped.
waya Golf Club. of time. Trees are being planted at a rate of
Tiger Woods, the world’s num- The teeing areas and greens will 50 per day, with a total of 2,000 of
ber one golfer and Chairman of be grown through the conventional the 11,000 required for the course 47
Grass at Tiger Woods Dubai Tiger Woods Design, said: “It’s excit- process of sprigging. already been planted.
Breaking ground on ‘Champions Tower IV’ and
‘Frankfurt Sports Tower I’
Stromek Emirates Foundation bags shoring and excavation contracts for the two towers
M
emon Investments has broken ground on two of its latest proj-
ects 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 Founda-
tion (SEF), a subsidiary of M`sharie - the private equity arm of Dubai Invest-
ments.
The contracts awarded to SEF underline the company’s strong partner-
ship 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 ground-
breaking of the towers has followed the successful launch of both towers
only a few months ago. The company is focused towards hitting the dead-
Champions Tower IV
line set for the projects’ excavation, shoring and foundation works, in line
with the developer’s commitment to its investors for the timely delivery of Set to provide world-class luxury living, ‘Frankfurt Sports Tower I’ has been
both the luxury residential towers. designed by Al Hatmy Engineering & Consultancy to emanate a German-
The AED 450 million ‘Champions Tower IV’ is a 20-storey tower, which inspired ambience. The tower, which was launched by the developer in
will offer 114 studios, 113 one-bedroom and 19 two-bedroom apartments. partnership with Sumsum Developers, will comprise 224 units, including
The exclusive freehold residential development, which has been designed 140 studios, 56 one-bedrooms and 28 two-bedroom apartments within a
by Eng. Adnan Saffarini Office, will offer tenants views of the golf course, gar- total built-up area of 177,378 square feet. It will feature two levels of base-
den and canal, a state-of-the-art surveillance and intercom system, 24-hour ment parking, covered parking on the ground floor and the convenience of
manned security and in-house maintenance, and other luxurious amenities. state-of-the-art amenities.
i-Rise
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 Ma-
rina’s landscape. It will also be the world’s tallest tower
to feature a 90–degree twist.
project on
The structural system for the tower is high strength
concrete core with a reinforced concrete column su- schedule I-Rise
R
perstructure that rotates with the twisting shape. In ealty Capital has announced that construction on its centerpiece i-Rise business tower
addition, each floor will accommodate a 1.08–degree project remains on schedule and will finish on time for the tower’s announced mid-
twist to achieve the full 90–degree spiral. The tower 2010 completion date. The casting of the tower’s fifth podium floor slab is underway
will be clad in metal panels with staggered glass and and will be completed soon. Mechanical, electrical and plumbing installations as well as
DUBAI REAL TIMES
screens to maximise the penetration of daylight to the block-works are also ongoing at the basement and podium levels.
apartments, creating something that will shimmer in “We take pride in handling one of the most awaited projects in Dubai, which has been
the bright sunlight in a mixture of different reflective able to proceed despite today’s challenging business conditions. We assure our clients and
materials. partners that work on i-Rise is going smoothly and that we shall continue to anticipate and
Six high-speed lifts shall be installed with a speed of effectively manage all potential challenges,” said Marwan Mansour, CEO, Realty Capital.
eight metres per second. Strategically located at Tecom Site-C, Dubai’s Technology and Media Free Zone, the busi-
As of January, the project construction was ahead of ness tower will feature a specially treated podium façade; modern executive and corporate
schedule and the central core wall reached Level 10 and offices; 19 high-speed elevators, dining establishments; commercial space; a fitness centre; a
48 the six basement floors, ground floor and mezzanine helipad; and a multi-storey car park.
floor have been completed.
INFRASTRUCTURE
Dubai Industrial City gets
its first power substation
More than Dh400 million invested to build a series
of 132 KVA substations The first pultrusion
D factory in Dubai
ubai Industrial City (DIC), a member of Tatweer Dubai, has an-
nounced that Dubai Electricity and Water Authority (DEWA) has
supplied the first of three 132 kVA substations that are currently un-
der construction to meet the growing demand for energy from its various
manufacturing units.
Saeed Mohammed Al Tayer, Managing Director and Chief Executive Of-
ficer 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 sup-
ply 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 construc-
tion of various manufacturing facilities/units and factories.”
Thanking DEWA for its support, Al Ansari added: “Because of DEWA’s ex-
cellent support, our headquarters, Phase 1 of labour residences, four office Wayne Mikkelsen, NZTE’s Dubai-based Trade Commissioner and Dr. Salwan
Al-Assafi, General Manager of Pultron Composites Middle East
buildings and three million square feet of warehouses are already functional
and completely fitted out with utilities connections, enabling tenants to
take occupancy.”
“Next year is predicted to be slower than
originally forecast because of the economic
Construction safety course for DM engineers
downturn, but Pultron is continuing to
D ubai Municipality, in cooperation with Mirdif Security & Safety Consul-
tants, recently organised a course for its engineers as part of the series invest in the Middle East because there will
of training courses aimed at enhancing their level of competence, field su- continue to be underlying growth in our
pervision and work inspection in construction sites. All fifty engineers in the
Engineering Supervision Section were trained on safety conditions and the
specific sector …”
new additions in the manual that conforms to the latest and advanced in the
N
field of safety science in the advanced countries. ew Zealand based Pultron in the past two years and expects
The course coincides with the Buildings Department issuing safety man- Composites has started to make significant staff increases
ual for construction sites in Arabic and English, which is considered to be building the first pultrusion in the coming year. This includes
one of the major reference materials on safety in construction sites in the factory in Dubai at the Jebel Ali specialist sales engineers with in-
emirate of Dubai. Contractors and consultants can get a copy of the manual Free Zone as part of its expansion dustry specific knowledge.
from the concerned counters in the Municipality. plans in the region. The company “Next year is predicted to be
serves the construction industry slower than originally forecast be-
through world class pultrusion cause of the economic downturn
Environment Minister briefed on technology which transforms fibre but Pultron is continuing to invest
ments, projects and activities of the Waste Management Department in the environments where corrosion can away,” says Dr. Al-Assafi.
Municipality. The minister was briefed about the high standard the civic dramatically limit the lifespan of Recently the company won a
body has reached in waste management, as well as the latest equipment, steel. grant for $1.2 million from the New
technology and systems that are being used by the department for storing Pultron’s purpose built factory Zealand Government’s Foundation
and transporting waste and treating different types of wastes. in Dubai is part of the company’s for Research, Science and Technol-
The Municipality delegation also invited the minister to participate in the strategy to better serve its custom- ogy. The funding will deliver a new
Waste Management Summit, to be hosted by Dubai in May. This event, to be er base in UAE, KSA, Qatar, Bahrain platform of technologies providing
attended by a number of government bodies and private sector establish- and Oman. Its General Manager Dr greater intellectual capability and
ments, will take up different issues related to waste management and recy- Salwan AlAssafi says the company technical know how that can be 49
cling and the latest development in the field. has increased its staff in the region applied across its entire business.
FACILITIES & SERVICES
S
companies in Dubai.” ungwon OBO, a member of Makateb Holding, the first Office Building
Speaking on behalf of Dubai World Corporate Services, Saeed Operator Company in the world, has signed a one-year renewable con-
AlQaizi, Director of Group Procurement, Contracts, Statistics and tract to provide exclusive facilities management (FM) services to Michigan
General Admin, said: “Imdaad has successfully established itself as a key State University (MSU) Dubai. The company has revealed that it is now finalis-
DUBAI REAL TIMES
player in the growing facilities management industry by keeping pace ing a specially developed strategy to optimise the lifecycle of MSU’s facilities.
with advanced technology and services. The company has consistently “Appointing Sungwon OBO to provide exclusive facilities management ser-
met our requirements in the past, and continues to do so.” vices for its brand new facilities in Dubai International Academic City manifests
The company offers consultations for facility management from a high level of confidence in our expertise and capability to satisfy the univer-
the conception to the completion of projects, transition and operations sity’s strict quality standards,” said Eric Raes, CEO of Sungwon OBO.
and delivers long-term services. Some of the major projects it has This pioneering facility management company from South Korea, the Fa-
undertaken include Palm Jumeirah, The Gardens, Atlantis, International cilities Management Division of Makateb Holding, delivers a full range of in-
City, Jebel Ali Port and Free Zone, Ibn Batuta Mall, Dubai Maritime City tegrated services, including mechanical and electrical maintenance, cleaning,
50 and Wasl-DREC security, FM consultancy and energy management.
ENVIRONMENT
H
H Sheikh Mohammed more readily available. can be mounted onto the roof of
bin Rashid Al Maktoum’s This is not to say that Dubai is not golf carts. As golf carts are common
green initiative has made aware of the problem. Dubai Munic- in many of Dubai’s hotels, golf clubs
many companies operat- ipality is currently developing a new and now even residences such as
ing in Dubai realise the effects their rating system specifically for the the Jumeriah Golf Estates, this sim-
products are having on the environ- emirate. Surely though, with access ple energy saving feature can con-
ment. Adopting a system like LEED, to many technological advances, tribute to saving up to 90 per cent
BREEAM, or Greenstar is one respon- research and resources such as the energy over regular golf carts and
sible step in the right direction of Emirates Green Building Council, reducing CO2 emissions by 100 per
positive change. But is this enough? developers should be taking the cent.
Most developers have now begun to initiative to start thinking of more We are proud to be considered
implement the LEED system on their sustainable designs. market leaders and hope that others
projects, and although this is a sys- At Hydroturf we have been work- will follow our example. Some ten
tem that works very well in America ing on energy-saving solutions for years ago you could forgive compa-
can it be implemented in Dubai? a number of years. We are the dis- nies for being ignorant to the plight
If we look at the LEED ratings tributors for many leading, globally of green initiatives, but as scientific
for existing buildings; one of the recognised companies and choose developments are made and edu-
requirements is that a building our partners carefully, ensuring that cation is furthered, individual com- generations.
must be fully occupied for at least they share our values. panies should be focusing on what David Ball is the General Manager,
12 months prior to applying for ac- One such partner is Scofield; they are doing to benefit our envi- Landscaping Division, Hydroturf
creditation. With the unprecedented the number one global brand in ronment and the prospect of future International
number of buildings in Dubai at 50 concrete colouring and a member
per cent occupancy or less, it seems
there are very few that would even
of the US Green Building Council
(USGBC). All Scofield products con- Environmentally friendly floors
A
be able to apply. tribute to LEED credits across many s Dubai continues to make steps in the direction of change, Hydro-
Due to the climate and landscape of the sections including ‘Recycled turf and L.M. Scofield Company introduce environmentally friendly
in Dubai, water efficiency would also Content’, ‘Sustainable Sites’, ‘Indoor flooring. The newest product introduced to the Middle Eastern
need to play a much bigger role. Environmental Quality’, ‘Regional market is the Scofield formula One Lithium Densifier & Finish Coat System,
While LEED ratings do address water Materials’ and many more. making ground and polished concrete floors low VOC, low maintenance
conservation, again this is based on Another example is SolarDrive and environmentally friendly.
a US standard where water is much who manufacture solar panels that 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, in-
DUBAI REAL TIMES
creased 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 so-
dium silicate or potassium silicate formulas. It results in a beautiful and
durable surface that is non-toxic and environmentally sound. Once treat-
ed, the surface only requires periodic cleaning with a neutral or alkaline
cleaner and water. 51
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 Q) I am a developer and one of my developments has completed. We have
approached by purchasers about the establishment of an Owners Asso- been providing management services to the development and want to
ciation. As far as we are aware, the draft regulations to the Strata Law issue service charge bills to all the owners. However, I have heard that
are yet to be implemented. What is the position? 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 A) It is expected that service charges for buildings that have been handed
issued in early March and that the regulations will enable an Owners Associa- over will remain at the rates applicable in 2008, unless the 2009 rates are ei-
tion to be registered with RERA. It is expected that a developer will have six ther less than the 2008 rates or approved by RERA. Where service charges for
months from the date of issuance of the regulations to register the Owners 2009 have already been paid by owners, the sum should be adjusted to re-
Association in respect of their development, so once the Strata regulations flect the service charges approved by the Owners Association once formed.
are published, you should discuss the implications of them on your business
with your legal advisors. Jacqueline Latham is a Legal Consultant (England and Wales qualified),
Real Estate at DLA Piper Middle East LLP, Dubai
Q) We currently provide management services in a residential tower and
have heard that the Strata Law regulations are soon to come into effect. Answers supplied by DLA Piper do not necessarily reflect RERA’s point
Will our business be impacted by these regulations? of view
CHAPTER ONE
Definitions and General Provisions Law No. (27) of 2007
Article (1)
This Law shall be called “Law No. (27) of 2007 regarding Ownership of Jointly Owned Property in the
Emirate of Dubai”.
Article (2)
The following words and expressions unless the context otherwise dictates shall have the following
meanings:
Emirate: Emirate of Dubai
Department: Land Department
Chairman: Chairman of the Department
Registry: The property registry maintained at the Department
Master Developer: Whoever is licensed to engage in the property development
and sale of Units in the Emirate under the terms of a Master
Community Declaration.
Sub-Developer: 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.
Jointly Owned Property: 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.
Unit: Any flat, floor, a part of land or house (villa) connected or not
connected with another house being part of Jointly Owned
DUBAI REAL TIMES
Property.
Common Areas: Those common parts of property designated for common use
by Unit Owners and Occupiers and shown on the Site Plan.
Site Plan: A plan registered in the Register showing the Units and the
Common Areas.
Owner: 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
54
er in regard to unsold Units.
Master Community Declaration: The terms and conditions governing the development and op
eration of Jointly Owned Property.
Building Management Statement: 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.
Owners’ Association: An association constituted in accordance with article 17 of this
Law.
Association Constitution: The rules and regulations that govern the Owners’ Association,
which shall be issued in accordance with this Law.
Occupier: Whoever leases a Unit (other than a long term lease) and any
visitor of a Unit Owner.
Utility Service: 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;
Law No. (27) of 2007 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
DUBAI REAL TIMES
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
55
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 Owners’ 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 Owners’ 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; Law No. (27) of 2007
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;
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:
a) roads, roundabouts, intersections, pathways, pavement sides, drainage ways curbs, gutters,
median strips, bridges, viaducts,
a) lakes, ponds, canals, promenades, fountains, water features and other waterways, including
all equipment associated with them;
d) wires, cables, pipes, sewers, drains, ducts, devices and equipment by which Units or Com
mon Areas are supplied with Utility Services; and
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e) 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
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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 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.
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.
Law No. (27) of 2007 Dividing walls between adjoining Units shall be shared by both Owners if they are part of the Common
Areas.
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
Department’s approval is obtained.
Article (12)
Each co-owner of a Unit has a right of first refusal to purchase another co-owner’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.
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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.
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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.
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)
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.
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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.
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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.
CHAPTER FIVE
Law No. (27) of 2007 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
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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
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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. Law No. (27) of 2007
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.
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RERA REGISTRATION NO 153