Several Dubailand Projects were Handed Over to the Investors in 2009

Dubailand, Dubai’s iconic entertainment and leisure destination and a member of Dubai Properties, handed over several of its projects to its investors in 2009. As per Dubailand, for several projects, commercial, retail and residential units were handed over to its investors. This took place in Al Barari Villas, The Villa, Dubai Properties Group's Leyan and Motor City. In addition, 320 villas were handed over in Victory Heights in Dubai Sports City, Dubailand. Further, 1300 commercial, retail and residential units were handed over in Motor City.

Mohammed Al Habbai, CEO, Dubailand, said: "In spite of the challenging global economic environment, it was an exciting year for Dubailand with a number of important milestones for our investors.

"Our approach has always been to drive local, regional and international visitors to Dubailand

attractions. This year, we have focused on developing inherent demand from within the UAE by building critical residential mass. Dubailand now has exclusive pockets of residential communities such as the Arabian Ranches, Motor City, Leyan Community, The Villa and Al Barari, making the destination an attractive place to live, work and play."

Dubai Properties Group revealed the ready-to-lease residential units like apartments and villas at the Leyan Communities (Mediterranean-themed) located right in the heart of Dubailand.

Dubailand’s development was unveiled by two key highlights. Out of which one was the opening of Dubai Sports City's Butch Harmon School of Golf at The Els Club and he agreement with Royal Caribbean International. The other highlight was the launch of Dubai International Cricket stadium with 25000 seats.

With several such Dubai attractions within the Dubailand is expected a flow of tourists over the 8 million mark it this holiday destination already has.

Dubai Property Prices Could Fall: Banks Become Aggressive In Pursuing Repossessions

From the current levels, the property prices in Dubai could fall by another 30 percent. According to the analysts by the end of the 2011, somewhere around 150,000 homes could be lying empty. The UBS has forecasted that there will be a blow to the emirate’s property market with the prices down by up to 50 percent. It is also reported that Palm Jumeirah which is one of the most iconic developments in Dubai has seen its first repossession.

An analyst Saud Masud said, “We reiterate our view that by end of 2011 Dubai property oversupply on residential and commercial properties may reach roughly 40 to 50% and house prices may decline another 30% from current levels.” He further added, “We estimate total Dubai housing supply by the end of 2011 to be roughly 360,000 with oversupply potentially at 150,000 residential units.” Property investors in the UAE may find it cheaper in the auction market up to 40 percent as higher default risks ignite to more bank repossessions.

The bank sold the apartments in the exclusive man made island Palm Jumeirah for AED745 per sq ft which became a symbol in Dubai real estate market. Last week the owner’s bank took over the three bedroom apartment in Al Shala on the prestigious development. It was taken back after he failed to resolve the Dhs1.7 million of outstanding debt. Quickly the bank moved to shift the property. A number of repossession orders on properties in Dubai have been won by the UK based Barclays and now the banks won’t hesitate in order to follow the suit.

According to a banking analyst at an investor service, Antoine Yacoub banks will now become aggressive in practicing a legal action. They were trying to restructure most of their loans, however, once a precedent has been set, more cases will be encouraged to put through.

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.

Prices of Dubai Marina Apartments Fly High

Dubai Marina Apartments have gone high by18 to 38% during this year according to a real estate company in Dubai. The Head of Sales of Asteco, Vineet Kumar told, “Single bedroom apartments at Dubai Marina are currently selling at Dh.1300 per square feet, an increase of 18 percent from Dh.100 per square feet sold during the beginning of the year. The double bedroom apartments are now being sold at Dh.1250 per square feet, an increase from Dh.900 per square feet in January, while the triple bedrooms are sold at Dh.1250 per square foot, an increase from Dh.950 in January. Single bedrooms measuring 850 to 900 square feet at Elite Residence and Dorrabay are now priced at Dh.1.2million. In January 2009 this type of property was quoted as Dh.900,000, while similar apartments were priced at Dh.1.35mn in July 2008.”

“The double bedroom apartments at Marina Promenade measuring 1280 square foot is currently priced at Dh.1.6mn, while it as Dh.1.15mn in January. A triple bedroom apartment in proximity to Jumeirah Beach Residence costs about Dh.2.37mn at present, while the same property was priced Dh.1.8mn in January. However, four bedroom apartments have not seen much improvement in prices at present, and stand at Dh.975 per square foot, an increase from Dh.850 per square feet in January this year”, as reported by Asteco.

“Demand for four and five bedroom apartments at Dubai Marina is much lower than that for triple, double and single bedroom apartments, as families have the affordable option of purchasing four or five bedrooms at villa communities. The increased demand for smaller units at the Marina implies that such units command higher prices per sq. ft. than larger ones. The larger the size of an apartment, the lower is the price per sq. ft.,” said Kumar.

Although, the value of Marina has dropped by 15 to 60% since July 2008 as revealed by the figures but still certain towers in the Marina are maintaining their values because of the demand from investors and end-users. However the growth values in the rates of few other real estate units in Dubai are slow. This is depicted by the fact that the prices offered in the market for the Marina have a diversified and huge range from Dh850 to Dh2000 per Sq ft.

Recovery of Off-plan Ventures Unlikely for Two Years.

The developers in Dubai need to think over quality and winning back investors smashed confidence in order to recover the off-plan real estate Dubai market which is unlikely to pick up before 2011 even after this move. The investors who have been deferred by the cancellations or delays also need to be won by the developers with tying pricing strategies.

Sana Kapadia who is the Vice President of Equity Research at EFG-Hermes said, “Investors have been holding back payments because construction is not starting and developers can’t move forward because investors are not paying, that is the reality of the current situation. The recovery of the off-plan market in the United Arab Emirates will happen only from early 2011.”

However some also think that it might take longer. According to Chet Riley, Vice President of Real Estate Equities Research at Nomura International believes it will be early 2012.

‘The over supply of residential units in the property market needs to be absorbed in the next two to three years. It is unlikely that the off-plan recovery will happen before 2012,’ he said.

The new investors need to be won by the developers with far more than mere promises as their confidence is being highly smashed.

According to experts, the tie-ups with mortgage companies and banks may help to ensure optimum funding in place and finally avoid the present ferocious state. They also emphasize on working more strongly with regulatory authorities to ensure the interests of the investors and to build their confidence once again.

“Aspects such as construction-linked payment plan will help to alleviate the financial burden of holding real estate if the project is delayed beyond the proposed completion date,” said Jones.

Kapadia also revealed that the blame for fuelling the assumption and spinning that led to the downfall of the off plan market goes to the developers themselves.

“Developers must avoid the trap of speculative payment plans that is 2 to 5% initial deposit versus the bulk at completion.” He said.

Dubai Villa Stock Welcomes the New Handovers

According to Dubai Properties Group, the leader in Dubai real estate market, the handover of entities in The Villa and Al Waha Villas is expected to take place in December.

Al Waha is a fully sold-out development with 260 villas out of which 50 are three bedrooms and 50 are four bedrooms. One can choose from the rooftop view or the garden level preference if looking for two bedroom location.

Apartments for lease at 558 Community
Of the 558 Community, 134 are of the four-bedroom type, 102 are three-bedroom and 180 are two-bedroom entities.. There are also 48 two-bedroom and 96 three-bedroom apartments to accommodate 558 residences. All villas are spacious and have an upstairs sitting room to boot.

The 558 Community also houses a block of three-storey apartments in its centre and features a large pool. These residences are being leased for Dubai Properties by Salwan Property Management and are not for sale. “We will offer our services to third parties in Al Waha and are managing phases 1 and 2 of The Villa project,” says Saeed Bushalat, CEO of Salwan Property Management. One- and two-year rental contracts are on offer, which come with the provision that there will be no value increases for the first two years.

Mirdif versus 558 community
Dubai Properties’ Shorooq community which includes 668 villas in Phase One, has 353 units ready for tenants to move into. According to Salwan, the rents for a two-bedroom villa here would amount to Dh170,000 compared with the 558 Community’s rates of Dh130,000 a year before summer.

However, after summer DPG stated that introductory promotional packages would be offered during the initial stage of leasing. This makes perfect sense as the market price for many areas in Dubai find themselves in a state of fluctuation this year.

“Mirdif and 558 Community are two totally different projects,” explains Saeed Bushalat of Salwan Property Management. “The unit sizes are bigger in Mirdif. Our rents correspond to the going market prices in the area. It is close to the centre of town and the shopping centers. The 558 Community has not got that yet.”

DPG also started handover of over 2,000 residential and commercial units at its Executive Towers in Business Bay in September. “Handover should be complete by the year-end. We have sold most units in the towers, but kept retail, hotel and some of the apartments to be leased by Salwan,” commented Khalid Al Malik, DPG Group’s CEO.

Palm Jumeirah Crosses 70% Construction

According to Nakheel, the developer behind Palm Jumeirah, 70% of its construction has been finished. A senior official said that the master plan is also being visited.

Marwan Al Qamzi, Group Managing Director of Nakheel Development Projects told, "We have finished construction on nearly 70 per cent of Palm Jumeirah. On our part, we sold a couple of fronds on the project but they still have not been built. It is part of the plan to keep them until we come up with some unique designs compared to what you have seen so far. You cannot freeze the master planning. You have to update it as you go. You have to update to meet market demands and customers requirements.”

The Kingdom of Sheba and Ottoman Palace are the inclusions of this waterfront project. Ottoman Palace is almost complete according to Qamzi. He added, “Both will finish by early April to June next year. The Kempinski Hotel is 85 per cent complete.” Work of Marina Residence started in March 2007 after Shimizu Corporation was awarded the contract in 2006 to construct superstructures, basement, architectural works, landscaping of the project and interior finishing.

Regarding rampant payment issues in the market, Qamzi said the developer was addressing the situation. "We are in discussions with all contractors about delays in payment since there are areas where we need to sit and discuss," he said. The Marina Residences did not benefit from the fall in prices of building materials. "With the change in prices, we have negotiated prices on projects that were led at the peak and at the beginning of the phases. However, this was not possible with the contractor at the finishing stages on the Marina project," said Qamzi.

"This is the last one under construction for the time being from our end," he said.
The final touches on the West side of the project are still going on. "Meanwhile, the East side near the Anchor Marina, which comprises a green area with a clubhouse, will be finished in two months," said Qamzi.The Anchor Marina is expected to berth more than 700 vessels, according to an earlier statement from the company. "The residents of Palm Jumeirah will be accorded priority in berthing," said Qamzi.

The developer confidently remarked that Palm Jumeirah project will witness the island emerging as one of the pioneers in resorts in the coming five to six years.

Nikken Sekkei to Display Latest Sustainable Projects

Nikken Sekkei will be presenting a range of selected green designs from its extensive international and regional portfolio at Cityscape Dubai which is one of the largest real estate investment and business-2-business show. Nikken Sekkei is the global leader and top architectural practice in sustainable design. This Cityscape Dubai event is the largest show showcasing real estate in Dubai and other emirates and is going to take place at the Dubai World Trade Centre starting from October 5-8, 2009. In previous years, Nikken Sekkei uncovered the Cool City and ECO Towers real estate projects using advanced energy and market-tested solutions. This time it is highlighting the innovative and exclusive ideas of sustainable architecture and what it will look line in 2020.

The Chairman, Mitsuo Nakamura of Nikken Sekkei, said: “The general public is more environmentally aware than ever before and carbon emissions are a contentious issue. Developers are now insisting on structural designs that comply with LEED standards and the use of environmentally friendly materials and coatings. Building owners are now also more commercially aware of the benefits of embracing sustainable design, in relation to maintenance and management costs over the lifetime of the building. So once again, Cityscape Dubai will provide us with an appropriate platform to demonstrate our sustainable design excellence capable of delivering substantial energy savings.”

This year in Cityscape Dubai, various technically advanced projects are to be showcased including Tokyo Midtow, Mode-Gakuen Spiral Towers, Shibuya New Cultural District Development Project, Pola Museum of Art, Toho Gakuen School of Music Annex, Guangzhou New Library and various other local projects such as Jumeira Gardens Techonopreneur City and Burj Al Alam etc. These are some of the top real estate projects that are to be showcased in this year’s grand property event.