Leasing of Single Business Tower in Dubai Announced by DIP

One of the leading developers in the UAE, DIP- The Dubai Investment Properties, has announced the beginning of the leasing process of their latest commercial development called Single Business Tower.

The company is to lease 248 office units and 7 retail units at their new tower on Sheikh Zayed Road.

According to Anj Viadi, the Property Manager of Single Business Tower, the tower has been completed much ahead of the scheduled date. The tower has been given its central location, elegant façade and the modernized interior serving as an ideal business location for various companies seeking brand recognition.

He added, “The building incorporates energy efficient and self-sustaining features, with 248 modern offices and retail spaces spread across its 45 storeys. The green building guidelines have been followed to ensure energy efficiency, the big French windows help in capitalizing natural lights, while glass panels help divert heat and minimizes A/C consumption. The Single Business Tower also has advanced security and fire protection systems that ensure security of tenants at all times.”

Apart from all this, the offices within the business tower are designed in a way that they ensure maximum space efficiency and functionality. There are a several amenities and service outlets have been added to compliment a functional business environment.

This will make the Single Business Tower an attractive option for the business seeking to establish their main branch offices offering round the clock management services, ample parking space propinquity to the Business Bay metro station and the awesome views of Arabian Sea and Burj Dubai.

Along with the first class office retail spaces, the tower also offers reception and concierge services to tenants, a conference room which is fully furnished, business lounge, separate gymnasium for men and women both, a multi-level car park for tenants, business services and other management facilities.

Dubai World Episode Gives Boost to Investor’s Confidence

According to investment bankers at Shuaa Capital, the confidence in the air has built up amongst the investors around the Gulf region. They optimistically predict the region’s economic condition would take its stride towards the rising end in the next six months. One of the leading investment bank in UAE, Shauaa Capital submitted its December GCC investor sentiment report which reflected the fall in investors confidence due the reconstruction of the debt on 25^th Nov’09 by Dubai World. But, positivity has returned after reimbursement of $4.1 billion by Sukuk by Nakheel, PJSC. It is observed, since then there has been a turn around in the market sentiment since the debt announcement of Dubai World was made in November.

Dubai World and its creditors have met to reconstruct the maturing liabilities worth $22 billion, where the final plan would be submitted, in early January, to the lender. There was a speculation over Government’s support to help the distressed firms. Shuaa Capital conducted couple of surveys. One was before Nakheel Sukuk’s repayment and one was after the dues were settled. The Shuaa report revealed progress in GCC economic conditions over the next 6 months after Nakheel’s repayment. The polls show more investors are expected to invest in GCC market and BRIC in the next six months. It is estimated the regional stock market would generate gains in the coming 6 months, where the biggest rise is expected in Abu Dhabi which was projected by 35.5% of investors, 12.9% for Dubai and 13.1% for Nasdaq Dubai.

Burj Dubai: World’s Tallest Tower’s Height is Still a Secret

Burj Dubai, the pride of Dubai’s growing role in this changing world is due to open on 4^th Jan’10. This masterpiece is the flagship development in Downtown Burj Dubai property within Dubai. The exact height of this stunning piece of architecture is known only to few. The tower’s structural engineer, William Baker of Skidmore, Owings and Merrill LLP, said in an interview: “Its still a secret. The client (Emaar Properties) will only let us say it's more than 800 metres (2,625 feet) tall. It's part of the mystique of the project.”

According to Baker, if the tower’s height is measured by measuring its shadow then it would leave the current record holder building, Taipei 101, to the second position. Amongst 10 tallest towers, 7 are in Asia and have been built in the last 13 years.

However, Jan Klerks belonging to Council of Tall Buildings have expressed their interest in knowing the exact height of the tower. One of Klerks’ email said : “We have expressed this a number of times, but if there are reasons not to disclose it, then I guess we have to do without an official number. We also do not know why they chose not to disclose the number. The only thing we are sure of is that it is the tallest building in the world, and that it is at least 800 metres.”

As Baker has mentioned, the recent global financial slum has not hit the sales of the 1100, one to three bedroom residential apartments. The tower has some of the fastest elevators running up to the speed of 25 miles per hour. The steel and exterior glass of the building could be spread across 17 soccer fields, which would take 6 – 8 weeks to clean. In published reports, the tower’s cost has been at approximately $1.5 billion.

Hotel JAL Tower to Open Its Doors in Spring 2010

The JAL Hotels, the first Japanese Luxury Hotel in Dubai, will soon add the second jewel in the luxurious hospitality sector of the emirate. The hotel will be known as the JAL Tower Dubai and the five- star luxury icon is scheduled to open its doors in April 2010. The hotel stands on a 57 storey Glass tower on the prestigious Sheikh Zayed Road aligning with other renowned luxury hotels in the industry.

While commenting on the expansion of the brand projects, the Executive Officer and Project Director, Mr. Chiyuki Fujimoto said, “Expanding the footprint of JAL Hotels brand in the market has always been one of our objectives and certainly Dubai has proven to be the destination with the highest potential. We would like to thank ACICO Industries (K.S.C) not only for their continuous trust in the brand, but also for a great architectural masterpiece and an outstanding address in Dubai for a luxury hotel to be.”

Adding to it he also said: “With Hotel JAL Tower Dubai', the brand is further developing its presence in the Middle East Region.”

Offering the panoramic views of Jumeirah Coastline, this enthralling 270 meters high standing tower will offer admirable Japanese services full of comfort and genuine luxury along with an elegance and ecstasy of the decors at every level as one enters the 57 storey building. Hotel JAL Tower Dubai features 471 well equipped rooms, suits as well as luxury apartments. A number of elite dining, leisure, recreational and business facilities add to the memorable experience of its patrons.

The hotel comprises of 7 idiosyncratic restaurants and bars offering special gourmet delights and authentic dining. “Benkay” serving Japanese cuisine and “Icho” as a Teppan Grill restaurant give the best of all feeling to the diners. The hotel does not miss to offer the recreational ecstasies like a modern gym, a spa, a swimming pool on terrace and a salon.

Frame Structure of Ocean Heights Completed

DAMAC Properties, the provider of luxury lifestyle and the pillar behind several other projects, announced the completion of the concrete frame of the tallest tower in Dubai Marina along with its development at Ocean Heights standing high at 84 floors.

Ocean Heights is the flagship of DAMAC and is expected to become one of the most iconic buildings of the area. With its twisted architecture, it already is being visible above all others in the surrounding area.

The Chairman of the main contractors Arabtec, Mr. Sajwani said, “This is a significant day for DAMAC Properties - the structural completion of our flagship building is a source of great pride and an occasion that we are glad we have been able to mark with the support of RERA, Arabtec and so many of the staff who have worked on site for the past three years. To think that this magnificent building has been constructed in a little less than two and a half years is a testament to their efforts and I pay tribute to their hard work and accomplishments. This has been a turbulent 12 months for everyone involved in real estate and it is therefore all the more impressive that everyone involved has remained so focused and dedicated to the task at hand. We are delighted to be literally ending this year on a high by finishing our tallest building.”

He added, “As a contractor we are always proud to be associated with quality projects and it is pleasing to be here to commemorate this milestone event for DAMAC Properties as we finish the main construction of Ocean Heights,' he said."A large part of our philosophy at Arabtec is to work hard with developers to build a relationship and to work together as one team on challenging projects like this. In the light of some of the recent negative news and speculation, I believe it is even more important that we recognize the efforts and achievements of everyone involved in the construction of Ocean Heights and celebrate how significant they are. Once completed in 2010 Ocean Heights will eventually offer 680 apartments ranging from one to three bedrooms. In addition the building will feature DAMAC Properties' Signature Series penthouse range - ultimate luxury apartments with the latest in hi-tech gadgetry and luxurious home comforts.”

Dubai Lifestyle City is Expected to Open Its Doors By the End of 2011 or Q1 of 2012

As per the ETA Star Group, the network of infrastructures of Dubai Lifestyle City has been completed presently which includes roads, water drainage systems, irrigation facilities, telecommunication networks, sewage system, street lighting, portable water system and fire-extinguishing system.

The project raised its curtains in 2006 thereby promoting an exclusive concept of haute living of which luxury, digital facilities, recreational opportunities, sports, fashion, world-class restaurants, theatre and shopping are the part of.

The venture is to feature 68 villas with Tuscan theme and 120 apartments. Approximately 60% of the property has been sold till date. Construction of the units has already been initiated by Saleh Constructions.

DLC has also aligned with Microsoft, JW Marriot, Cisco and IMG Academics.

Mohammad Al Habbai, the senior Vice President of Dubailand said, “DLC offers luxury within a gated community and that its renowned world-class brands such as JW Marriott hotel further strengthens its position as a luxury development.”

JW Marriott is to develop the first branded JW Marriott for the residential purpose in the entire world. Apart from JW Marriott, the community in Dubai will run three distinctive accommodation amenities to meet the requirements of the visitors of the city.

The visitors will be delighted to watch the JW Marriott Hotel with 170 rooms, Marriott Executive Apartments comprising of 46 units in all and a Courtyard with 156 rooms.

The construction of the project was formerly started on 1^st December. The multi sport corporation called IMG Academics is also to open its first ever branch outside United States including Tennis Academy by Nick Bollettieri and Golf Academy by David Leadbetter.

Seddigi also said, “Dubai has always remained an attractive destination for tourists and residents alike, offering wonderful packages to visitors and lucrative opportunities for investors”

Development of Facilities by Landmark in UAE

A property and facilities management solutions in order to safeguard the investment of freehold buyers has been developed by Landmark Properties, one of the leading property brokerage firms and consultancy in the UAE.

The firm offers solutions to real estate clients all over the world and delivers authoritative, comprehensive as well as independent advice. The affiliates of Landmark include Landmark Advisory and Amlak Finance PJSC which are recognized as the top level real estate companies of the Gulf.

Landmark Properties has developed a property and facilities management solutions to safeguard investment of freehold buyers.

The Head of Property Management of Landmark Properties, Donna Newman said, “A robust property management strategy is key for both overseas and UAE-based property owners as we deliver a range of cost-saving options, from identifying snags in new properties being handed over, to managing the rental relations with tenants on their behalf.

"The potential cost savings for proprietors using Landmark's Property Management (LPM) services, and homeowners using facility management services, far outweigh the service repair costs, in addition to minimizing potential future problems that can occur in a freehold property." He said.

The cost of Landmark Properties' Property Management solutions begins at five per cent of a property's rental value, with the minimum set at Dh3, 000.

Newman also said, "A landlord requiring property management for their unit will find that the preventative costs of our packages may be minor to the actual cost of potential problems in this apartment."

He added, "For instance, the rectification of ceiling defects would cost approximately Dh2, 000 for owners to fix. Common bathroom snags, including leaking toilets and showers or shower heads snapping off are on average Dh400-600 per visit by plumbers to rectify. Looking at these snags, this is already a considerable cost without taking into consideration anything else that may happen throughout the year."

Global Crisis to Come to an End Due to US Recovery

According to the Foreign Minister, Sheikh Abdullah bin Zayed Al Nahyan, “The recovery in the economy of US which is the world’s largest economy, will bring the global financial crises to an end and is expected to help economies of the countries to leap back including UAE.”

He also added that the problems of the emirate of Dubai regarding debt have been taken care of depicting that the country is united not only politically but also economically and the leadership is committed to deal with all the negative impacts of the global crisis. This will help recover through the crisis in real estate of Dubai as well.

He told, “I believe the (global) crisis will be behind us once the United States recovers and we believe the United States is recovering, which will reflect on other countries.”

According to The Commerce Department report on retail sales, “It is a key to renewed economic growth, was much stronger than analyst expectations for a 0.6 percent rise. Investors also took heart from the University of Michigan consumer confidence index, which registered a rise in December that beat analyst expectations at 73.4.”

“The economic crisis in Dubai is over,” Sheikh Abdullah said, adding that the UAE government was “committed to dealing with the effects of the global crisis” for all member emirates. He said support from the federal government “is proof that the UAE is united politically and economically. It is also proof that UAE remains committed towards local government to deal with effects of the global economic crisis.”

The Government of Dubai last Monday announced that it would pay off $4.1 billion in debt repayments due on an Islamic bond of property developer Nakheel. It said that the Government of Abu Dhabi has agreed to provide $10 billion to support its plans to manage the debt of its flagship conglomerate Dubai World. Financial markets in the UAE and across the world cheered the move. Concerns over Dubai’s debt have since eased.

Highest Sales Transactions Reached in Meadows, Jumeirah Islands

According to sources, “Among villas of real estate in Dubai, Meadows, Jumeirah Islands, Arabian Ranches recorded the highest transactions, while from an apartment perspective, Dubai Marina, JBR, Downtown Burj Dubai and JLT have recorded the highest transaction."

The Head of Sales of Asteco Property Management, Mr, Vineet Kumar said, “The top three residential areas, which have witnessed the most transactional activity in the month of November for apartments sales, have been The Palm Jumeirah, Dubai Marina and Downtown Burj Dubai areas. "The locations which witnessed the most transactional activity in the month of November for villa sales are The Emirates Living Area, Arabian Ranches and The Green Community."

The Director-Residential Sales and Leasing, Liz O'Connor, said: "From a sales perspective, among the villas, Springs/Meadows, Jumeirah Village, Jumeirah Islands stood apart and in the apartment’s category, it were Downtown Burj Dubai, Jumeirah Beach Residence and Dubai Marina.

Kumar also said that the profile of the buyer has been observed to be the end user primarily. However, there were some buyers who have bought property in Dubai for rental purposes focusing on holding the property assets for 5-7 years. He said, “The buyers on these projects were mixture of individuals from the GCC countries, Russia, India, Pakistan and Western Europe”

He said, “the sales activity on these projects have tended to revolve around the owners and sellers of properties who have purchased them in the years prior 2008.Typically these properties can be sold in today's market with some expectation of premium.”

Alwadiya said that mixed nationalities of end-users and investors have invested into these areas. "In general, buyers are more demanding and careful nowadays compared to last year and the previous years and hence they do enough due diligence before purchasing any properties. We have not seen major prices changes since the last three month - prices have stabilized in certain areas and you can always find very well priced properties in all areas of Dubai," she said.

Long-Term Dubai Investors Still Gain From Property Investments in Dubai

According to the owner of a Dubai based brokerage firm, the investors who had purchased real estate in Dubai even less than two years ago, still stand to earn profit despite the current low prices.

“People who are suffering the most are those who purchased properties last year on mortgage, as the prices of properties then were very high and mortgage rates were also high. But, people who purchased before 2007 also have not lost. Even if they sell, they still get to make a profit,” said the CEO of Leo Sterling, Laura Martorano.

The recent Dubai World restructuring discussions have not really affected the property prices in Dubai, agreed Martorano and also added that due to the competition, the prices in the ready market are not prone to change.

She also added, “In a ready market, about 60 percent of purchases are cash purchases. Therefore, people may not necessarily be so desperate as opposed to 40 percent, who have bank loans and mortgages”

The transactions in the real estate in Dubai have gone down in November as per the official data. The toll of property sales had fallen by 11% from 208 in October to 186 in November and the value of the deals had fallen by 47% from that of Dhs1.84bn to Dhs.970mn in the same period.

The data by Dubai Land Department depicted that the sales of the villas have gone high by 24% from 88 to 109. However, there was a decline of 41% in value which went down from Dhs.290mn to Dhs.170mn in November.

The positive indicators were shown in the month of October with average monthly market index posting 11.25% rise whereas the trade increased by 10% in volume and 9% in value as per Dubai certificates of origin.

Despite the negative economic indicators, Martorano is confident that Dubai will continue to hold a bright future.

Significant Progress on Tamani Hotel Business Bay

Dubai Properties newly appointed CEO, Mr. Abdul Wahab Halabi visited the progress of Tamani Hotel at Parklane tower. The impressive iconic development in Business Bay by KM properties has reached the 17^th to 18^th level core walls.

Business Bay, after its full development will become the same as Manhattan or Ginza, the business center of New York or Tokyo. The first phase of Dubai’s incredible revolution into a international hub began with the scouring of the Creek in the 1970s. It is expected that the new extension of the Creek will strengthen the entry of Dubai into the international business cities’ league. Added to its splendor, Tamani Hotel will contribute a lot for the cause.

While inspecting the construction of Tamani, Mr. Abdul Wahab Al Halabi was quite impressed both with the progress of the tower and with the commitment of KM Properties in fulfilling its role in the development of Dubai’s Business Bay. Mr. Abdul Wahab Al Halibi was also keyed up by the status of the project and conveyed his enthusiasm to the team of KM Properties.

The five - star deluxe hotel, Tamani Hotel at Parklane Tower comprises of thirty three storeys. The modern hotel includes commercial offices as well with leisure facilities which offer splendid views of Shiekh Zyed Road’s beautiful and impressive skyline and the new creek area of Ras Al Khor. The world renowned designer Carlos Ott has successfully designed Tamani Hotel and the major construction contractor of the project is Al Rostamani Pegel. The official interior designer who has been appointed by KM Properties is LW Design Group.

According to Mr. Sanjeet Joher, the Group Chief Operating Officer of KM Properties, “We at KM Properties are proud to announce that the project is progressing well. We are moving ahead despite the current economic climate and we are very much ready to create the developments that will form an integral part of Dubai's future Business District which is the Business Bay."

Dubai Developer Nakheel Bailed Out by Abu Dhabi

The struggling Dubai based developer Nakheel, property arm of Dubai World and the back behind master projects like Palm Jumeirah, The World, Jumeirah Islands, Discovery Gardens etc.; has been bailed out finally by Abu Dhabi by enabling it to pay off a $4.1 billion sukuk bond.

The Chairman of the Dubai Supreme Fiscal Committee, Sheikh Ahmad Bin Saeed Al Maktoum, said, “The Government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World.”

He further added, “As a first action for the new fund, the Government of Dubai has authorized $4.1 billion to be used to pay the sukuk obligations that are due today.  The remaining funds would also provide for interest expenses and company working capital through April 30, 2010 - conditioned on the company being successful in negotiating a standstill as previously announced. In addition, the Government of Dubai is particularly focused on addressing the concerns of Dubai World trade creditors within the Emirate of Dubai.  To help address these concerns, today the Government of Dubai is announcing that the remainder of the funds provided will be used for the satisfaction of obligations to existing trade creditors and contractors. Discussions with affected contractors will begin in short order.”

The total debt of the Dubai government and its state-run companies is a minimum of $80 billion and some experts believe it could run into $100 billion plus. Today’s cash is not the first bail out from neighbouring Abu Dhabi. Two Abu Dhabi controlled banks subscribed last month to a $5 billion bonds package issued by the government of Dubai and the UAE central bank provided a $10 billion bond in February earmarked to help Dubai sort its debt problems.

Dubai Pearl Expected to Conclude by 2013

Abdul Majeed Esmail Al Fahim, Chairman of Pearl Dubai, announced the completion of Dubai Pearl, which is to be the mixed-use luxury development by Pearl Dubai FZ LLC, by 2013. The project will prove to be another magnum opus in Dubai real estate.

Dubai Pearl was supposed to be completed in 2007 originally but had been delayed due to lack of funds. The project will be handed over in almost three phases. First handover will take place in 2011 with the whole development expected to be completed in 2013.

According to the Chairman, the project has adapted to the financial environment in order to reach the completion. With the purpose of adapting to the economic state of affairs, major areas are being prioritized for completion. The focus is observed through the steady development and delivery of the project, payment plans offered to the investors which are flexible enough and tailor-made, to have transparent relations with the partners and campaign to enhance awareness on all the components of the project is planned efficiently.

This $4 billion project is located at the Dubai Technology and Media Free Zone. It is a business huddle operated by Tecom Investments and is considered to be the home to global IT and other media companies. The aim of the development is to become a luxury free zone as well as a freehold development with an easy access to transport links.

The associated structures of this development by Pearl Dubai are its four distinctive towers which are linked together from the top. The skyscraper includes residences, hotels, entertainment facilities and other global names like Baccarat, MGM, Sky lofts and many more.

The partnerships of Pearl with these brands aim at the long-term returns for the stakeholders of the development.

There are approximately 1440 residential units and 618 apartments which make 40% of the project. The hospitality sector comprises of about 16% and commercial sector that of 33%. Rest of the space is occupied by retail and leisure.

Over 900 residents are expected to be accommodated by Dubai Pearl and about 12000 employees are expected to be employed by the commercial sector. Dubai Pearl is also aiming at receiving Golf LEED Certification.

Selling of Dubai Assets to Help Dubai World Turned Down

A top Dubai Government official confirmed that Dubai is not going to sell any of its assets to bail out Dubai World. He also added that the group will be able to overcome the situation by restructuring its debts and selling its own assets.

Abdul Rahman Al Saleh, the Director-General of Dubai Department of Finance said that part of financing Dubai World will be through the means of the sales of the asset as these are the company assets and not the government assets.

He said adding to it , “The motive behind restructuring of Dubai World is to ensure continuation of its operation as a viable commercial entity. The future of the company is most important than liquidity. It is in the company's interest to inject liquidity or restructure it, to ensure that it remains sustainable in the long-term.”
Al Saleh said that the Dubai World as well as the problem that of Nakheel, the developer of Palm Jumeirah and other real estate in Dubai, has originated from short-term lending on long-term projects, which doesn't generally work in a volatile market situation. Majority of Dubai World and Nakheel projects are long-term projects with strategic importance. These cannot be developed through short-term lending.
Al Saleh also said, “Dubai Financial Support Fund, established in July this year, can offer support to Dubai World, if needed.” He reiterated the government's stand on the state guarantee for Dubai World's debts.
Al-Saleh also pointed out that the legal documents signed at the time of company establishment do not carry any clause on the government's guarantee. The clauses clearly specify that the government will not guarantee the liabilities of the company.

Dubai Villa Prices Gush by 20% on Return of Growing Demand

A gush of 20% in the price was experienced by the villas in Victory Heights Dubai Sports City in the Q3 of this year. The prices had fallen by 50% in the Q1 of the year due to the global economic recession.

It was observed that the main reason of the push in the prices was the growing demand for family homes in Dubai. The trend is expected to persist if recent prophecies of a villa shortage in 2010 works.

Yasser Abdulrahman Al Raee, the General Manager at Victory Heights said, “The fall in the price of villas seems to have bottomed out, and we are starting to see prices rise again. Since July prices for villas in Victory Heights have risen by about 20 percent, and we expect to see prices stay around the same figure to the end of the year."

He added,"Despite the recession families still are looking to find spacious homes, with quality finishing, in developments that have a community spirit - and that's what we offer at Victory Heights. Families are moving here from other developments in Dubai because they get like being away from the bustle of the city, and just a stone's throw from the all the sporting facilities of Dubai Sports City."
The potential shortage of villas on offer in Dubai in the next few years was highlighted by Landmark Properties CEO, Charles Neil, in an interview with Emirates Business on 29 November.

According to Charles Neil, CEO of Landmark Properties, “the number of units coming online in 2010 will jump to 50,000 - of which 20 percent will be villas, and the rest apartments. In 2011 the number of new villas will drop to five percent, and to three percent in 2012.”

Authentic Spanish Andalusian, Mediterranean and classic European style are the three styles in which villas at Victory Heights are designed. Many of these enjoy the views of the Els’ Club course. The developer promises to foster a strong community spirit by holding regular community events like BBQs.

Dubai Strives to Fulfill its Commitments

A senior official of Dubai Government declared that the Government of Dubai is capable of honoring and meeting its commitments internally as well as externally.

The Director-General of Dubai Finance Department, Abdul Rahman A Saleh expressed the restructuring of Dubai World as a natural phenomenon which can occur in many countries and companies.

Al Saleh also said: “Articles of association of Dubai World stipulate that the emirate’s government shall not guarantee its debts,” he said, noting that a distinction should be made between the Government of Dubai and the group which is made up of several companies – including Nakheel and Limitless World – operating in various sectors.

“The media has blown the issue of restructuring part of the group’s debts including the delay of repaying Nakheel’s debts out of proportion,” he said, affirming that restructuring of companies is a frequent practice worldwide.

“The aim of restructuring is to allow the group to steam ahead with a new shape and keep abreast of changes.”

Al Saleh when asked to comment on the putting off ventures undertaken by the group, he said: “It is better and wise to delay projects that have not been executed yet.” He did not rule out selling of some assets in Dubai or abroad, saying: “Selling of some assets is a natural act in order to bolster the financial situation of the group in such circumstances.”

He added Dubai World is active in many sectors but it was only the real estate sector that was impacted by the international financial crisis.

“Dubai World was to meet its main creditors to discuss its request to delay repayment of $26 billion (Dh95bn) debt,” bankers told.

The bankers, who declined to be identified as the talks are private, said the meeting would take place in the afternoon without being more specific. A Dubai World spokesman declined to comment.

Dubai Office Rent: Still Among the Top Ten Places

Dubai has been observed as the eighth most expensive place on the globe to rent office in Dubai despite the crash in the property rates in Dubai. This was revealed by the latest report given by CB Richard Ellis.

Since the fall is universal, Dubai stands still among the top 10 priciest places to have an office despite of the drop of 27.3 % in office rents.

The office space presently costs $108.91 per square foot. However, Dubai is still far behind the West End of London which fetches rents worth $184.85. Dubai is fine ahead though, of its immediate neighbour Abu Dhabi where rents have gone down by 38.6 % touching $84.4 per year. It also stands ahead of London City market at the ninth place globally.

The best performing market was Aberdeen in Scotland, which suffered a 12-month decline of 12.3percent, touching $65.62.

The report confirmed that the “financial crisis has made an impact on the world's office markets and the US dollar, has been particularly weak in 2009. Europe, Middle East and Africa continue to have the largest number of markets and are on the top 50 list while London's West End is still the world's most expensive market. Other markets in the region ranking high on the list are Paris, Moscow, Dubai and London City.”

Meanwhile, the real estate broker Knight Frank LLP said that 40 percent of Dubai's office space is currently empty after the emirate's construction pace surpassed demand, Bloomberg had reported.

“Vacant office space in Dubai totals to 10mn square feet at present. However, if developers meet the current completion dates, total office space will double to touch six million square meters by end of 2011,” reported the research by broker Colliers International, which also placed vacancy rate at 40 percent.

Property Investors Can Be Protected from Aftermath of Crisis- New Real Estate Laws

A new law is being worked upon by The Real Estate Regulatory Agency in Dubai which will give new rights to property investors. The law has not been revealed but according to a spokesperson, it is going to be comprehensive and seek to protect the investors.

‘Along with the Dubai Land Department we are studying a new law to protect the rights of real estate investors. Our ultimate goal is ensure justice and set up proper rules and regulations to regulate the relationship between developers and investors,’ the spokesman said. He also added that a draft will be ready to be sent to the Executive Office in order to get the approval by the first quarter of 2010.

The new law is expected to recollect the confidence among the investors of the Emirate followed by the exposure that the owners of developers Nakheel, Dubai World, has huge debts of $59 billion and is attempting to restructure some of it.

It is expected that the real estate industry will welcome more transparencies further.

According to Jason Manolopoulos, managing partner of boutique investment firm Dromeus Capital, the current crisis has raised concerns over corporate governance and transparency to a much higher level.

‘Investors should have been wary about the fundamentals of Nakheel. Everyone was fully aware of the overcapacity on Dubai real estate

I think 2009 will be remembered as the year when the idea that an implicit guarantee should be priced only slightly wider than an explicit guarantee was relegated to history,’ he explained.

‘Investors will have to differentiate, and the selling of companies on the basis of their connections and strategic importance will no longer work,’ he added.

‘It's clear there will be job cuts but it's too early to know the extent of it,’ Raj Madha, an analyst at regional investment bank EFG-Hermes said.

Realty Disputes to Be Sorted By Professional Mediation

The Royal Institution of Chartered Surveyors has declared a new attributed Mediation Training Programme in Dubai in order to help meet the rising demand for mediators in real estate related disputes. The downturns in economy have led to increase in commercial disputes and consequently a surge in litigation and mediation further leading to increased levels of interest and use of arbitration in the UAE especially in the construction sector.

According to Andrew Goodman, Director, Rics Accredited Mediator Training, mediation is a voluntary, non-binding, and private dispute resolution process in which a trained neutral person - the mediator- helps parties to a dispute, or other impasse between them, try to reach a negotiated settlement for themselves, with or without the assistance of their own professional advisers.

"Mediation is both Sharia compliant in its philosophy and well regarded as an established international dispute resolution process," says Andrew Goodman. "Mediation is also truly voluntary, as entering the process does not bind the parties to reach settlement. In most cases mediation cannot take place unless all the parties agree to enter the process, and will cease if one party leaves the process, which they are generally free to do at any time."

Mediator will have no authority to make obligatory determination and therefore, a mediated resolution can come out solely on the authority of the parties concerned. The agreed terms will form part of an enforceable contract once the settlement is reached. Mediation promises not only the client’s but also the professional satisfaction in terms of cost, speed, flexibility of conclusion and confidentiality.

"The role of the mediator and the confidential nature of mediation negotiations helps parties to focus on and realize their true needs and interests which may be far removed from what a court, an adjudicator or an arbitrator might ordinarily have jurisdiction to order," Goodman added.

Rent Decline Extends in Dubai

The rental scenario is taking an extended break in Dubai with the unchanged commercial and residential rents.

According to a survey, people are postponing the move until the holidays and consequently the moving to other flats has slowed down. The enquiries related to tenancy are mainly focusing on the areas which are less congested and where the best possible prices can be obtained.

The landlords have continued to be flexible as well as negotiations of rental rates and payment terms due to the uninspiring property market. The average annual rental rates have become constant since September.

The survey found , “In November, a studio at the  Dubai Marina Marina Promenade, Emaar Six Towers, Downturn Burj Dubai, Palm Jumeirah, Sheikh Zayed Road and World Trade Center areas, ranged from Dh50,000 to Dh60,000. Rents for one-bedroom units were static at Dh85,000 to Dh120,000. A two-bedroom flat was priced at Dh120,000 to Dh160,000, while a three-bedroom unit was at Dh160,000 to Dh210,000.”

“In the mid-tier neighbourhoods of Bur Dubai, Al Barsha, the Greens, Jumeirah Beach Residence and Dubai Marina, a studio in November ranged from  Dh35,000 to Dh50,000, a one-bedroom flat ranged from Dh55,000 to Dh75,000, a two-bedroom flat at Dh70,000 to Dh100,000, and three-bedroom units from Dh90,000 to Dh120,000.”

“Average annual rents continued to be cheaper in International City, Discovery Gardens , Deira, Jumeirah Lakes Towers and some parts of Dubai Marina. A studio in these areas was priced at Dh26,000 to Dh40,000, and a one-bedroom unit at Dh38,000 to Dh65,000. A two-bedroom flat ranged from Dh60,000 to Dh85,000, while a three-bedroom unit went for Dh90,000 to Dh110,000.”

“However, at  Jumeirah Lake Towers, new supply brought down rents, with the lower end of the range cheaper by Dh5 at Dh55 per square foot. The higher end of the range in Bur Dubai, Tecom, Downtown Jebel Ali and Festival City, remained at Dh170 per square foot per annum. In Deira, Dubai Silicon Oasis and Dubai Sports City, office rents still ranged from Dh50 to Dh100 per square foot per annum in November.”

Dubai Real Estate to See 50,000 units in 2010 - Industry Analyst

As per the statement of Charles Neil, the new CEO of Landmark properties, merely half of the units out of the 50,000 units will be available for rent.

Neilsaid, “In 2008 and 2009 the delivery has been pretty steady at about 30,000 units a year. In 2010, it looks as though it will jump to 50,000 units, of which villas will be 20 per cent."

After 2011, fewer villas will start coming on to the market and after 2012, Landmark may see scarcities. He added, “If you're looking at villa prices, they actually went up a bit during the third quarter because there was no finance available. Now that finance has eased, prices and rents in places such as The Palms, Springs and Meadows went up between eight and five per cent, respectively."

Neil commented on the future by telling the sources, “The big issue for next year is what's happening with supply. In 2008 and 2009 the delivery of supply has been pretty steady at about 30,000 units a year. In 2010, it looks as though it will jump to 50,000 units, of which villas will be 20 per cent. And then in 2011, the number of villas drops to five per cent and in 2012 to three per cent, so there are very little villas coming on. You can see a shortage in the villa market."

"With apartments there will be a big surplus next year. The question is how much of that will translate into inventory. Today, the housing stock is about 330,000 units, which will go up to 380,000 in 2010. You need probably a population of 150,000 to fill that. Now where is that going to come from? The answer is there could probably be a two to three per cent growth in Dubai's economy next year."