An appreciating pound looks set to cap 2017 on a high, but savvy Gulf investors can still look for opportunities to negotiate better financing options, says international mortgage brokerage Enness.
“With interest rates still comparably lower than years gone by it makes sense to refinance onto a lower rate, and free up liquidity for other investments,” says Toby Johncox, Principal Representative at Enness.
The pound has appreciated approximately 12 percent over the UAE Dirham this year, but is well off the higher rates it used to trade at before the UK voted to leave the European Union in June 2016.
Eness is working with a number of clients to raise cash and invest in higher yielding markets such as, property in other UK cities or Europe, commercial developments, and other more lucrative investment opportunities, says Johncox.
The independent brokerage opened its fourth global office in Dubai last year.
Opening new offices in a region with a sizeable proportion of HNWs makes sense for the independent brokerage that has access to 250 banks worldwide.
“We’ve seen a 31 percent increase in GCC-based clients looking for financing solutions in the UK and Europe,” he says.
However, the London property market still holds value, according to Johncox. “Despite there being much doom and gloom reported in the London property market, high net worth (HNW) investors are still savvy in seeking opportunities,” he says.
Property prices have stagnated, but coupled with a weaker sterling, buyers can look to flexibility in terms of asking prices, according to Johncox. “We’re currently working with a client who is making a £500,000 saving on a property they planned to buy last year. Having waited, the property is now being sold for £2.3million, rather than the £2.8million price tag it originally held,” he says.
Banks also have the appetite to dry lend, says Johncox, where customers need not place any assets under the bank’s management or liquidity to secure a load. “It’s a further emample of opportunity in the London property market,” he says.
Dubai Investments PJSC has announced a 36 percent increase in sub-leasing contracts in is wholly owned subsidiary, Dubai Investment Park in the first nine months of 2017 compared to the previous year.
According to Dubai Investments, nearly 68 percent of contracts pertained to existing sub-tenants, with a 26 percent rise in new sub-tenants. Of these, 46 percent are in warehousing, 35 percent in staff accommodation, 14 percent in offices and 5 percent in ther commercial activity.
“The sharp increase in DIP sub-leasing in the first nine months of 2017 period reflects the surging optimism in the regional business environment, coupled with the growing reputation of DIP as the preferred business destination,” said Omar Al Mesmar, General Manager of DIP. “There has been a strong demand for warehouses in DIP, as a result of its proximity to the Expo 2020 site and Dubai South.”
DIP includes over 12,000 residential units, 90,000 residents, 20 million square feet of office space, 18 showrooms, six schools, five operational hotels, besides 20 residential buildings and a large of staff accommodation.
Al Mesmar added that DIP has consistently developed its road network [and] upgraded its infrastructure and facilities” which, in turn, has attracted new tenants.
DIP has spent over AED 4 billion ($ 1.08 billion) in enhancing and improving infrastructure to international standards, including 140-kilometres of internal road network as well as hospitals, educational institutions, hotel, retail outlets and supermarkets.
Dubai-based Audacia Capital has completed the acquisition of two built-to-suit headquarter office properties with a combined purchase price of $ 108 million under construction near to Schiphol Airport in the Netherlands.
The ASICS EMEA and Benelux headquarters are due for completion in October 2018, while the new Danone Netherlands Global headquarters will be completed in March the following year.
The adjoining properties, developed by architecture firm Powerhouse Company and currently being developed by Red Company, have a strong focus on sustainability and health. They are designed to become an attractive ad cost efficient workplace, with LEED sustainability and WELL health and well-being assessments having been completed.
“This acquisition heralds Audacia Capital’s entry into the European real estate investment market and provides our partners with an exciting opportunity to be part of a ground-breaking development project. We will continue to develop in this sector, always striving to select and ensure solid, quality returns working alongside trusted partners,” said Audacia Founder and CEO Emad Mansour.
“Our strategic aim is to continue to develop Audacia Capital to become a multi-asset class manager,” he added. “European real estate is an important asset class to our clients thus we will continue to focus on sourcing exciting deals to help our clients achieve their investment objectives.”
New data from dubizzle Property suggests an increased demand for the mid-market segment and highlights a gap between actual transaction prices and advertised amounts.
By comparing advertised sales prices in mid-market communities advertised on the dubizzle platform with transaction prices recorded by the Dubai Land Department’s public data, dubizzle property found that, on average, properties were priced about six percent higher than the price they were transacted at.
“Working with a landlord to bring their property to the market at the right price level is perhaps the agent’s most important job,” said Paul Kelly, Operations Director at Allsopp & Allsopp real estate agency. “It has to be at the right level to attract interest whilst at the same time leaving themselves some room to negotiate a deal and most importantly, ensuring that they can sell their property in a good time frame and for the maximum sales price that is achievable in the market.”
Of the areas analysed, Discovery Gardens was found to have the largest price gap, with properties selling at 20 percent lower than their advertised sales price. Coming in second was Jumeirah Village Circle, which recorded an 8 percent gap, and Dubai Sports City, with a gap of 2 percent.
“We always encourage our users to be aware of the average price for each area and provide them with as many tools and information as possible to make well-informed decisions. The knowledge of the price discrepancy in advertised versus actual price will empower our users and equip them with the negotiating power that is essential in the final stages of purchasing a property,” noted Ann Boothello, Head of Marketing at dubizzle.
Other areas analysed include Barsha Heights, Dubai Festival City, and Jumeirah Lakes Towers, which witnessed gaps of 15 percent, 7 percent and 8 percent respectively.
“I believe this is healthy gap that allows buyers bargaining power and allows sellers room to reach a more realistic print point to transact at,” explained Mahmoud Hesham El Burai, CEO of the Dubai Real Estate Institute.
Dubai property owners are paying as much as three times more than their neighbours living nearby to live in popular luxury high-rises, according to new statistics from Propertyfinder Group.
In Dubai Marina, which Propertyfinder says is Dubai’s most popular area ‘by far’, residents pay a median price of AED 1,570 ($ 427) per square foot, according to Propertyfinder data through the end of 2017.
Residents of the La Reve or Silverine towers, however, pay 150 percent more than the median, with prices up AED 4,000 ($ 1,089) per square foot.
In Downtown Dubai, which is the third most popular community by search volume on propertyfinder.ae, the median price per square foot stands at AED 2,132 ($ 580). The median asking price in the Burj Khalifa, on the other hand, is almost twice that, at between AED 3,000 ($ 816) and AED 4,000 ($ 1,089) per square foot.
One of the areas which didn’t display this trend is Jumeirah Village Circle, where the median asking price for apartments is AED 925 ($ 252), compared to AED 1,000 ($ 272) in the area’s top luxury area, Milano by Giovanni Boutique Suite.
Propertyfinder notes that a number of luxury real estate projects are in development, meaning that the prices of existing luxury apartments are up for adjustment.
London-based ultra-prime developer Northacre has appointed JLL as the Middle East agent for their latest scheme, The Broadway.
Northcare, a developer 70 percent owned by Abu Dhabi Financial Group, is set to complete the 1.72 acre residential and commercial development in Westminster by 2021.
The Broadway, located at the former New Scotland Yard headquarters in London, spans more than 1 million sq ft.
The London luxury real estate market continues to attract significant Middle East investment, according to JLL. Nearly half a billion pounds ($ 600m) was invested into London from the region in 2016. JLL MENA said it expects to continue to see strong demand from Middle East buyers for prime London properties.
“We are looking forward to marketing one of the most exciting and significant new schemes set to launch in London in recent years,” said Andrew Frost, head of residential, EMEA at JLL.
“Buyers are always seeking the best and most fashionable addresses and Westminster is currently re-defining the residential preferences of London buyers. We predict strong price growth of 15% in this borough between 2017 and 2021, supported by landmark schemes such as The Broadway.”
A piece of original art in a room can make a statement and command attention like nothing else in that space can.
‘Brand art’ works in the same way, but is applied specifically to the business environment, to enhance a brand and communicate a company message.
Given the impact of brand art – and then taking it a step further – the region’s largest, and arguably most influential, real estate event, Cityscape Global, has incorporated its specially-commissioned brand art as the main component of its Cityscape re-branding for this year’s event, and in doing so, is aiming to set a record for the largest indoor space in the Middle East to employ brand art.
Explaining the reasoning behind the decision to use original art to re-brand this year’s event, Ian O’Malley, Cityscape Marketing Director said: “We believe that innovation is truly the cog that keeps a company churning, but all too often we see the same tedious stock images used for various brands and campaigns and this does not reflect our aim of positioning Cityscape as a premier brand and setting ourselves apart.
“Using original artwork enables us to establish a strong brand identity, connect with a wider audience and illustrates our dedication to our brand, our visitors and our exhibitors.”
Taking brand art to the outdoors
Cityscape Global has also scored a first this year by taking its brand art to the outdoors. Commissioned by Dubai-based brand art firm, ‘Propriartary,’ themselves the innovators behind the brand art concept, some of Dubai’s largest advertising billboards and hoardings are prominently displaying Cityscape’s proprietary art in its advertising within the UAE.
Phil Davis, CEO of Propriartary commented: “The original art we create is proprietary to each company or brand. This means that, for the first time, a piece of art is associated with a brand and communicates something about the company.
“This is a very significant innovation in the concept of branding, because there is something about original art that shows quality of thinking, attention to detail and a very real desire to provide a best-in-class offering. Cityscape is making a clear statement through its use of art that these elements are at the heart of what they stand for.
“I am delighted that this world-class brand will be setting another record for the UAE in using original art to brand to celebrate the city’s iconic architecture its event at Dubai’s World Trade Centre.”
UAE developer Majid Al Futtaim has announced plans to build a new mixed-use community in Dubai.
It said it was working with global and regional contractors to draw up a masterplan to be unveiled in the first half of 2018.
A spokesperson for Majid Al Futtaim told Arabian Business the size, value and exact location of the scheme could not yet be revealed.
However, the spokesperson said that a parcel of land had been acquired in a “strategically located, key residential growth corridor in the emirate”.
The development is expected to comprise premium homes across a string of new neighbourhoods, with greenery and public spaces.
The scheme is also expected to feature Majid Al Futtaim’s full range of retail, leisure and entertainment facilities to cater to residents’ needs and wishes.
The project is expected to be funded “in line with the company’s prudent financial management and consistent with its BBB credit rating levels”, the developer added.
Hawazen Esber, CEO of Majid Al Futtaim – Communities, said: “We are excited to announce plans for a flagship mixed-use community that is set to redefine the living experience in Dubai’s evolving and highly competitive real estate market.
“As is with all our projects, the latest community will feature best in class offerings from across the Majid Al Futtaim integrated portfolio and will deliver on the highest standards of planning, design and quality to create a unique destination.”
‘Loose’ payment plans offered by developers could end up hurting the Dubai real estate market, according to Damac Properties’ senior spokesperson, Niall McLoughlin.
Speaking to Arabian Business at real estate show Cityscape Global, McLoughlin, senior vice president, marketing and corporate communications at Damac, said some developers in Dubai propose payment plans that are “too good to be true.”
“What worries me? Payment plans. I look around and you have big developers in Dubai that have big balances, corporate funds and access to capital. These developers can offer payment plans that are very attractive, but I read something the other day that had 10 percent deposit, and [the other] 90 percent due 10 years after delivery. How can that thing be built?” he said, adding construction costs are 60 percent of total costs.
“So if it’s AED100 to build, you need AED60 to construct. If you sell all of them and collect 10 percent, you only have 10 percent. Where is the other 50 percent coming from? And we’re seeing payment plans three years after delivery, four years after delivery. It worries us, because we as one of the main players, who have AED10 billion in escrow, we could do that, because we have good money to fund it.
“But when we look at the market, we’re just very concerned that loose payment plans may result in a point where a lot of projects need to go to banks looking for big checks that may not be forthcoming. We could end up in a situation where big buildings with customers defaulting and that would not be good for the real estate market,” he said.
McLoughlin advised customers to do their research before buying property, including checking the title deed and mortgage fee on the land. Consumers should also make sure the developer has paid for the land in full, appointed a main contractor and has 20 percent in escrow before they start selling.
“If it’s too good to be true, it’s probably not true. We tell every customer, before you buy property, ask for proof of all of this. And after that, look at payment plans. If it’s 90 percent after 10 years, ask yourself, how are they going to build this? Who’s going to pay to build this? And we encourage smart consumers to ask developer the difficult questions. Don’t just take it in face value; that it’ll be built and everything is rosy. Due diligence, due diligence, due diligence,” he said.
Damac Properties’ Just Cavalli villas, designed by the Italian luxury fashion house and located in its mega project Akoya Oxygen
Damac Properties launched its own attractive payment plan in September with its Just Cavalli villas, designed by the Italian luxury fashion house and located in its mega project Akoya Oxygen. Prices for a three bedroom villa start at AED1.3m, payable over three years.
The company has seen over AED4bn in sales in the first half of 2017 and expects to exceed the AED7bn mark it hit last year by the end of the year, according to McLoughlin.
“We talk the talk and we walk the walk. Nothing proves customer sentiment like our sales figures,” he said.