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Kuwaiti developer launches 4-tower Al Reem Island project
Kuwait-based National Real Estate Co has unveiled plans to develop a Dhs1.2bn four-tower residential project on Najmat Abu Dhabi on Al Reem Island. Standing at 22 stories each, the four residential towers are located at the entry to Reem Island approximately 300 metres from Abu Dhabi Island. The project covers a built-up area of 156,800 square metres, offering a variety of units including one, two, and 3 bedroom apartments; two and three bedroom duplex penthouse apartments; and eight water villas.
Buyers still keen on Gulf homes despite risks
Two-thirds of would-be home buyers see value in the Gulf real estate market and intend to purchase property in the region in the future despite being more aware of the risks involved, according to a new study released on Tuesday.
Despite growing concerns about trust among investors following the impact of the global economic crisis, the FutureBrand Gulf Real Estate Study offers some hope for regional developers.
According to the research, respondents - all of whom were recent or prospective home purchasers in Saudi Arabia, Qatar and the UAE - said they were 70 percent more likely to see value in investing right now than they were to feel less likely to buy in the region ever again.
Sixty-nine percent of people said they believed that the region's property prices, which have fallen by more than 50 percent in some parts of Dubai in the past year, offered good value for money.
Sixty-three percent said they were likely to invest in real estate in the Gulf while only 15 percent said they were unlikely to do so. Similarly, only 16 percent of respondents said they didn't believe the Gulf offered good value homes at the moment.
The confidence shown in the region's real estate market came despite the FutureBrand research showing that the principal impact of the global downturn was a lack of trust home buyers have in developers.
"Heightened awareness of risk, the potential for monetary loss, loopholes and corruption all speak to a weakening of homebuyer confidence," the report said.
"Perhaps most interesting is that this new wariness does not seem to affect homebuyer attitudes towards purchase," it added.
Nearly 57 percent of respondents said they were more aware of risk now, following the real estate downturn in 2009.
Almost 50 percent said they were now more aware of loopholes and corruption while about 53 percent of people said they believed property prices would decline further.
A further 38.6 percent of respondents said they had less trust in the developers to deliver what they promise.
Trust seen as major real estate factor in 2010
Trust will be a key focus in the Gulf region's real estate market in 2010 as developers aim to restore confidence among investors.
The FutureBrand Gulf Real Estate Study, released on Tuesday, said that the reputation of some high profile developers had been hit hard amid the global downturn.
Nakheel, the developer of The Palm and The World, continued to decline as a brand, the report said.
While it is still the second most recognised developer in the Gulf region, it has fallen to seventh in both reputation and developer preference, FutureBrand added.
Damac Properties, described in the report as the ultimate challenger brand in the region, rose dramatically over the past few years, the report said, but 2009 saw its brand take a hit.
Tied in 2008 as the second most recognisable real estate brand in the Gulf, the company has fallen to seventh in the 2009 rankings.
In 2008, Damac was second in both overall rating rating and developer preference but it fell to ninth out of nine for the two measures in 2009, FutureBrand added.
Emaar Properties remained the top developer brand in the Gulf although its lead over its rivals dropped compared to 2008.
In 2009, it still led the way for developer recognition, reputation and preference.
In fact, out of more than 20 categories ranking local developers, Emaar was only beaten in one.
The study also ranked developers on future prospects and asked respondents to say which company they saw faring best in the current economic slowdown.
Emaar again came out on top, taking 50 percent of the vote, with Aldar (10 percent) and Nakheel (7 percent) completed the top three. However Nakheel also featured in third place when people were asked which developers would fare the worst.
Jae Hwang, executive director at FutureBrand in Dubai, said: "Trust is going to be the main focus this year and beyond. After a series of delays, cancellations and poorly communicated messages, developers are going to have to overcome and manage a large degree of skepticism.
"They will have to focus on aligning their promises with their offerings and measurable results.
"Companies who can best protect and leverage their brand during these challenging times will be those best positioned to capitalise on an upturn."
Arabtec scraps plan to sell stake to Aabar
UAE-based construction company Arabtec Holding and government-controlled Aabar Investments have decided to end a plan in which Aabar would buy a 70% stake in Arabtec. 'The parties have agreed that they will no longer purse the original transaction and will terminate the acquisition documents' as of today, Arabtec and Aabar said in separate statements posted on local bourse Web sites today. 'The parties have agreed that they will continue to work together in good faith towards future cooperation and forming a strategic partnership in Abu Dhabi in the future.'
UAE's Aldar to shift focus to mid-range properties
Abu Dhabi's state-controlled Aldar Properties said on Monday it would rethink future projects as an oil-fuelled property boom slows and would place new emphasis on mid-range properties.
The biggest developer in the United Arab Emirates capital will go ahead with most projects it has already committed to but would shift its focus away from high-end housing for projects still on the drawing board, Sami Asad, chief operating officer, said.
"Most of our projects are going ahead but on other projects we are rethinking whether this serves today's market or not," Asad said at a construction conference organised by MEED.
"We see some change in supply and demand and we still see demand in Abu Dhabi for mid-class housing. This is one of the opportunities we are looking at in the market."
The UAE property sector is going through a sharp price correction that was triggered in the autumn by the global financial crisis, which has dried up credit markets and made banks cautious about extending new mortgage loans.
Research firm Proleads said last week some $582 billion worth of construction projects had been put on hold in the UAE as the government and private investors contend with a global crisis that brought to an end a regional economic boom.
Most selling pressure has focused on properties in the emirate of Dubai, where average residential real estate prices have fallen by at least a quarter, according to some analysts.
Even in Abu Dhabi, where Aldar is leading the government's drive to develop new residential and leisure districts, house prices have fallen an average of 20 percent since a peak last summer, Morgan Stanley said this month.
Aldar's fourth-quarter profit tumbled 85 percent due to lower sales in poor market conditions.
The UAE capital, which holds more than 90 percent of the UAE's oil reserves, allows foreigners to invest in properties at some developments on a long term-lease basis. (Reuters)
Rera to review 27 projects in Dubai
CANCELLATION DECISION BY END OF MAY
By SUZANNE FENTON Staff Reporter
Dubai A total of 27 real esstate projects are up for posssible cancellation in Dubai as the Land department reeview the status of them.
The ultimate decision to cancel will come by the end of this month, said Marwan Bin Galita, chief executive of the Real Estate Regulaatory Authority (Rera).
Bin Galita had said earliier that he expected around 25 per cent of projects in Dubai would be cancelled, a figure he said is now "allmost the same".
"Law No 9 gives Rera the power to cancel. We are studying 27 projects in the committee but no decision has been taken," Bin Galita said during an event to cellebrate the department winnning an award for best cusstomer service satisfaction.
A committee is now studying the feasibility of these 27 projects which are all third party projects, ruling out any chance that master-developed projects could go.
The committee comprisses three people for trust accounts, a legal advisor and a financial advisor.
A project can be canncelled by Rera, the develloper can request a project be cancelled if the invesstors are paid or there are no investors. A project can also be cancelled if enough investors complain.
"I have one project now where 70 per cent say they are not continuing ... They can demand the project be cancelled," Bin Galita said.
Law
Law NO.9 of 2009 came into force recently. It is deesigned to ensure that invesstors who put their money into projects which were subsequently cancelled by Dubai government, would get ftill refunds.
Refulld.s will be based on
.~~ Law No 9 gives Rera the power to _ canceL We are studying 27 projects in the committee but no decision has been taken."
Marwan Bin Galita Chief executive of the Real Estate Regulatory Authority
CLAUSES
REFUNDS
-If the developer has completed 80 per cent of the project, and the buyer defaults, the buyer must forfeit 100 per cent of the money paid.
-If the developer has completed 60 "per cent, and the buyer defaults, the developer may retain 40 per cent of the purchase price.
- But if a developer has completed less than 60 per cent, they may only keep 25 per cent.
- Where the developer has not started construction, the buyer must forfeit 30 per cent of the purchase price.
is at the time of cancellaation.
If the developer has completed 80 per cent complete, and the buyer defaults, the buyer must forfeit 100 per cent of the money paid.
If the developer has commpleted 60 per cent, and the buyer defaults, the develloper may retain 40 per cent of the purchase price.
But if a developer has completed less than 60 per cent, they may only keep 25 per cent.
Where the developer has not started construction, the buyer must forfeit 30 per cent of the purchase price.
And if a project is offiicially cancelled by Rera, the buyer will be refunded all money paid.
, ." However, the retroactive law will not become legally
binding until it is published in Dubai's official gazette.
Many developers have been having a tough year and finding it hard to atttract investors. Investors too, are also feeling the crunch and some are tryying to get out of contracts as cashflow remains a huge issue.
Three new regulations soon to be added to Law NO.9 are designed to make the issue even clearer.
Firstly, the developer will not be able to cancel a conntract without a Land Deepartment letter. Without this, the cancelled contract will have no value in court, Bin Galita stressed.
Safeguards
Secondly, the Land Deepartment must attach with the letter a technical report from the site.
And thirdly, while at the moment, investors wishhing to cancel must do so in court, the Investors Group have expressed a wish to be able to cancel in the Land Department, which is being studied.
Trust accounts are also to be opened for agents to safeguard investments.
"People should not write a cheque to the agent. A cheque should be given to this [new] trust account or to the landlord directly," Bin Galita said.
There are also plans to create a Credit Rating Agency within the Land Department, which will set criteria for both new and existing developers. Each developer will be ranked according to the criteria.
Deutsche Bank forms Shariah-compliant home financing firm
Deutsche Bank has announced the formation of a joint venture Shariah-compliant home financing company with a group of Saudi-based investors, led by Fahad Abdullah Abdulaziz Al Rajhi. The 40-60 JV, Deutsche Gulf Finance, has an initial capitalization of approximately $110m, and will initially provide Islamic home financing for properties located in Saudi Arabia, with plans to expand its operations into Bahrain, Qatar and Kuwait in the future. Deutsche Bank Research projects Saudi Arabia will need 1.2 million additional housing units by 2015.
Choueri to set up Dubai real estate fund
Dubai-based real estate broker firm, Choueri Real Estate has announced plans to launch a real estate fund, Emirates Business has reported. The company is working with real estate fund managers to put together in excess of $100m (Dhs367m) for investing into the residential, commercial and hospitality sectors in the UAE, with a special focus on Dubai, Laura Choueri, CEO of Choueri Real Estate told the newspaper.
Deyaar offers 90% financing
Dubai-based Deyaar Development has announced continued partnerships with leading banks to offer financing options exclusively to Deyaar customers, including up to 90% financing and repayment periods of up to 25 years. Deyaar customers, subject to meeting the bank's credit approval requirements, will be able to obtain special financing schemes and favourable repayment terms and quicker approvals, the bank said.
Sharjah Al Nujoom Island project 'to go ahead'
Salah Butti Obaid bin Butti, director general of the Sharjah Planning and Survey Department has said that the emirate's government has not cancelled nor suspended the Al Nujoom Island project at Al Hamriya, Emirates Business has reported. "We are going ahead with it and the plans for the first 1,000 villas were approved by the department and will be finished in 18 months," he said. The project features Andalusian-style architecture and comprises residential, commercial, retail and hospitality facilities including parks facing the Gulf.
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