Latest Property News

August 22 2017, 16:53

Arabtec bounces back as earnings top expectations

Arabtec announced its second consecutive profitable quarter on Wednesday, as falling costs offset a slight decline in revenues.

The construction firm, which has undergone a recapitalisation programme following heavy losses in 2016, posted a net income of Dh40 million for the quarter, compared with a loss of Dh186m for the same period last year, and a Dh18m profit for the first three months of this year.

Net profit for the quarter came in well ahead of a forecast of Dh23m from NBAD Securities.

The firm’s revenue however slipped 6 per cent year-on-year to Dh2.06 billion during the second quarter, coming in below analyst expectations.

Arabtec completed its recapitalisation in June, raising Dh1.5bn via a rights issue to extinguish nearly Dh5bn worth of accumulated losses.

“The recapitalisation programme was the key deliverable for us in phase one of our strategic roadmap, which we successfully concluded in June, leaving us to focus on risk management and business transformation,” said Arabtec’s group chief executive Hamish Tyrwhitt.

“We will also remain on track to optimise the delivery of our Dh17.4bn backlog and continue to work on turning risks into opportunities through the resolution of legacy claims and collecting receivables.”

9 Aug 2017

Tax in the UAE: Everything you need to know about VAT and a little bit more

Tax; such a small, unassuming word – with the power to strike fear into the hearts of everyone who hears it. But what’s the reason behind the madness? Many people loathe the word because they don’t understand it – or have never dared try. So we’re going to do it for you.

The Tax Procedures Law issued this week laid down the foundation for the planned UAE tax system, regulating the collection of taxes and defining the role of the Federal Tax Authority.

It paves the way for the collection of taxes, mainly VAT, which will be introduced at a rate of 5 per cent on January 1 next year and excise taxes, which will be brought in, in the fourth quarter of this year. The formal tax document plus executive regulations setting out exactly what will be taxable and exempt is expected in the coming months. The UAE introducing VAT (albeit in a very small increment) is a turning point in the country’s glory years of completely tax-free living.

But what exactly does it mean for you, the future taxpayer living and buying things here? Let us tell you…

What is VAT?

Value-added tax (known in some countries as goods and services tax, or GST). This is a consumption tax imposed on a product at each stage of production, before the final sale. Take, for instance a computer manufacturer: the company is taxed on all the supplies it purchased to make and produce the computer before it reaches the shelf. Then you, the customer pays the VAT (the tax the company had been liable for during the production process) as a percentage of the total price. VAT is not usually an extra or add-on to the sale price. In the UAE, the tax will be calculated as a percentage of the retail sale price of a product.

What is excise tax?

While commonly referred to as a tax, excise is for all intents and purposes, a levy. It’s imposed on the manufacturer, not the customer, during the creation of a product. It often comes in the form of customs duties (if goods needed to produce the product cross a border). But as with VAT, the manufacturer again passes the buck on to the consumer by including it in the product’s price. Aside from that, the main differentiating factor that sets excise tax apart from VAT is that it’s only imposed on certain goods. In fact, it’s sometimes dubbed the “sin tax”, because it’s generally placed on products deemed ‘bad for society’ – such as tobacco, alcohol, confectionery, soft drinks and fast food. It explains why those commodities cost so much in other countries (one cigarette in Australia is said to cost around Dh4).

What will be taxed?

Non-essential consumer items. Namely, anything other than basic food and essential commodities, such as medicines or hospital and school bills. There is a list of just under 100 items or categories of goods and services that will not be subject to tax. Planning on buying a brand-new television Dh8000? That will be another Dh400.

Experts said this could lead to some items being withdrawn from the market or altered, to substitute the products for similar but untaxed products.

When will it come into effect?

VAT: January 1 2018 in the UAE. Businesses can register for VAT three months before the launch date (October 1, 2017).

Excise tax: The fourth quarter of 2017.

Who will be taxed?

Companies: Businesses which provide taxable goods or services with annual revenue of more than Dh375,000 will be required to register for VAT. Businesses with tax­able supplies below Dh375,000 but over Dh187,500 will have the option to register for it. Companies that provide health and education services can reclaim value added tax from the Government

Consumers: If you’re buying any non-essential commodity, you’re going to pay more – but at 5 per cent, you might not notice it so much. However, if you’re a regular customer of sugary drinks, soft drinks, or tobacco, you’ll inevitably feel the pinch – with these being subject to the highest price hikes.

Homebuyers: Property developers and the first sale of new homes will not be taxed. This means property developers will be able to claim back any VAT they have to pay from the Government.

Tenants: Residential tenants’ leases will not be taxed, but commercial tenants can expect to pay VAT. Offices, shops and other commercial property will be subject to it.

Home sellers: All sales of commercial property by VAT payers will attract VAT at a standard rate.

Importers/ re-exporters: As the GCC is a customs union, duties are only paid once at the point of entry to the area. As long as the goods are moved to their final destination within a defined period of time, duties are not payable. But this is where things get tricky. If goods are imported into the UAE, and set for re-exportation (with paperwork to prove it), they would be subject to customs duties in the UAE, but only attract VAT in their final destination. But, if the goods coming into the UAE have an uncertain final destination, VAT is also payable in the UAE. This is supposed to be reclaimable.

What exactly is the tax law?

Well, we don’t actually know yet. The draft UAE VAT Law is yet to be published, together with the Executive Regulations that are expected to accompany it. The Tax Procedures Law will also have its own Executive Regulations, to be issued by the UAE Cabinet within six months of the issuance of the Law. Experts are warning people to study up on all of them.

Why is the UAE bringing in tax? Why now?

The UAE, along with the other five Arabian Gulf states, agreed to slap VAT and excise taxes GCC-wide as part of measures aimed at shoring up government income, diversifying government revenues as economies adjust to lower oil prices and ensuring more efficiency in the economy. The IMF said in October 2015 that the Gulf states would have a combined fiscal deficit of between 2015 and 2019 that would exceed US$700 billion if they did not undertake reforms.

VAT is expected to yield Dh12bn in the first year of its implementation and up to Dh20bn during the second year.

Will my income be taxed?

Not yet, at least there’s been no indication to the contrary. The was no reference made to personal income tax in the Tax Procedures Law, and government officials have previously said there are no plans to tax individuals on their earnings.

VAT could generate Dh12billion in its first year and Dh20bn in its second year, according to Sultan Al Mansouri, the Minister of Economy. Mona Al Marzooqi/ The National

The arguments:

The for:

While VAT means more cash out of certain people’s pockets, plenty of residents in the UAE believe it’s a good idea – and one that’s been a long time coming.

More than two-thirds of senior business figures in the UAE believe reforms such as cutting fuel subsidies and the introduction of duties such as VAT are necessary to boost development in the region.

Research conducted exclusively for The National by Borderless Access found that 69 per cent of respondents in the UAE felt that subsidy cuts and the introduction of VAT would help regional development.

Mathias Angonin, lead analyst for the UAE at Moody’s, said the ratings agency views both moves as “credit positive”.

“The UAE is a pretty mature economy but you have informal businesses existing and the informal sector is still sizeable,” said Jeremy Cape, a London-based tax and public policy partner at law firm Squire Patton Boggs.
“More businesses will now have to operate above the radar rather than below it.”
Gurdeep Randhay, the head of tax and VAT in the UAE at advisory Grant Thornton said: “Businesses will be required to provide essential information to the FTA, as part of the compliance audit procedure, additionally, it will be essential to maintain financial and accounting details for five years.”

The against:

The most common arguments against the introduction of VAT are consumers worried about an increase in their expenses. In a story by The National from earlier this year, consumers voiced their concerns over already-high living expenses in the UAE.

“My worry is that my monthly grocery bill should not go up,” said Carla Stephenson, a housewife.

“School fees are already expensive and rents have not come down by much so if other prices move up, of course it will affect people.

“I understand that basic food will not be taxed but will cheese, cake, ice creams and juice cost more? That will affect families.”

Others have responded with an air of nonchalance, or hopefulness the extra cost will be able to be managed. Some businesses admitted they have yet to look at the issue, but are aware it is looming.

What is the Tax Procedures Law? Here are some key points:

– Take records: anyone conducting any business must keep accounting records and commercial books of their business.

– Learn Arabic (or make friends with someone who does): any material related to tax must be submitted to the FTA in Arabic. It’s not a catch all rule – the FTA can accept material in any language but they can request a translation.

– Learn the definition for “taxable persons”: there’s no specific definition yet, but this will be a crucial one to learn. The same goes for Legal Representatives and Tax Agents. The latter must be listed in a Register and licensed for the purpose.

– Be wary of Tax Audits: the Law allows the FTA to perform an audit on anyone to see how well they are complying with the Federal Tax Legislation. More details will follow on what exactly this audit will entail, but you are expected to fully co-operate.

– Penalties can and will be imposed: tax evasion, not paying tax, or an unentitled refund of tax will be taken seriously. Expect a prison sentence and a monetary penalty not exceeding five times the amount of tax evaded.

– You can challenge a decision of the FTA (within reason): You can ask for an internal FTA administrative review, and if you’re still unhappy, you can escalate it to a Tax Disputes Resolution Committee. However, you’ll have to pay whatever tax you’re disputing first, because the Committee cannot accept an objection “if the Tax and Penalties subject of the objection have not been settled”. If the sum in dispute is less than Dh100,000 – that’s the end of the road. If it’s more than that, you can then challenge the decision before the federal court within whose jurisdiction the FTA’s head office or relevant branch is located. There are strict time-limits for taking these steps.

Money-VAT-SaudiFemale shoppers browse watches at a luxury concession stand inside the Kingdom Centre shopping mall in Riyadh, Saudi Arabia. The kingdom will introduce value-added tax on January 1, 2018. Simon Dawson/Bloomberg

What is the GCC UVAT?

The Unified Agreement for Value Added Tax, known as GCC/UVAT, is an agreement signed by the six GCC members to ensure the arrival of VAT at a flat rate of five per cent by 2018.

VAT elsewhere in the world:

The UK became a pioneer in income tax as long ago as 1799, to raise money to fight against France. The US introduced income tax in 1861, to pay for its civil war against secessionist southern states. Canada’s was born in 1917. In some areas of the world, governments charge more than 20 per cent for VAT. Saudi Arabia is the first of the five GCC countries to implement VAT. It’s quite the turnaround for the country who attempted to bring it in in 1988, before swiftly cancelling it sixteen days before its launch.

How often do business-owners have to file VAT returns?

For most businesses, every three months and it can be done online.

Where can I get more information?

The Ministry of Finance (MoF) has a dedicated section on its website which explains VAT and provides practical guidance on how it applies. The MoF has also begun to roll out a VAT and Excise Awareness Campaign. Phase 1 of that campaign, involving an extensive series of workshops, ended in mid-May.

Or, you can attend a VAT training course. However, these aren’t cheap – a couple of days will set you back up to US$2,000.

Saudi Arabia recently published its draft VAT legislation and it is being seen as setting precedence.

7 Aug 2017

What are a tenant’s rights after a residential fire?

“Although there was no loss of human lives, the property damage by the fires cannot be disregarded,” says the legal team at BSA Ahmad Bin Hezeem & Associates of the spate of tower fires in Dubai in the past few years – from Tamweel Tower in JLT to The Torch in February 2015 and then again just this week (pictured above).

“The reason for the rapid spread of each fire was the non-fire retardant cladding that was used in Dubai and in the rest of UAE for a long period, but which has been restricted from use for buildings exceeding 15 metres in height since 2013.”

They point out that most tenants only look into compensation and liability after an accident has occurred – and so here’s some legal advice from them that you’ll need if your apartment’s been struck by a fire (or if you just want to know where you stand in case it does happen to you)…

DAMAGES COMPENSATION

After the fire, questions regarding liability for damages caused by the fire to tenants’ possessions will arise, regarding the possibility to receive compensation for the said damages.

In the UAE, the responsibilities of the property owner and the property developer are mostly poorly understood, and the tenants expect to be covered by the insurance policy held by either the property owner or of the property developer. Generally, the property developer and the owner’s association, which represents the property owner, remain responsible for the areas in the property over which they maintain control, such as public areas. In most events, the property owner’s insurance policy will cover only the property itself and will not extend to tenant’s furniture or personal possessions. Therefore, in order to provide adequate cover, a tenant should take out his own insurance policy with individual cover.

According to a survey commissioned by Zurich insurance company in 2013, only 6 per cent of UAE residents had adequate home insurance cover. As a result, in an event of a fire, storm or flood most tenants will have to bear the costs for any incurred damages.

“The UAE Civil Transaction Law, issued by way of Federal Law No. 5 of 1985 (“Civil Code”) regulates fire insurance coverage and the duties and liabilities of the insurance provider. According to the law, the insurer shall cover all damages caused by the fire notwithstanding the reason of the fire, provided that the damages are a direct result of the fire and have not been caused by deliberate or fraudulent actions of the insured or the beneficiary. The scope of insurance and therefore the compensation will vary, depending on the policy and the insurance company.”

THE COST OF EMERGENCY ACCOMMODATION

Many people from the Torch Tower have been put up in hotels in Dubai over the past few nights and are not having to pay for it (the developer has covered it), however…

There is no legal obligation for the property owner or the property developer to provide the tenant with emergency accommodation in the event of fire or to compensate the costs for such accommodation. Generally, the costs for emergency accommodation shall be covered by the fire insurance. However, the level of the cover will depend on the type of the insurance policy taken out and the insurance company.

A tenant will however be entitled to a reduction in the rental for the period that the property is unable to be occupied, if so declared by the relevant authorities, which is dealt with below…

CANCELLATION OF THE LEASE

One of the most important things the tenant will have to deal with when the apartment has been damaged by fire is the possibility to cancel the lease agreement and to claim back the post-dated cheques, or already paid rent and security deposit.

In the event that the occupancy of the apartment has been affected by the damages, the Civil Code refers to the affected occupancy as a partial or permanent loss of enjoyment. One of the challenges for the tenant will be determination of the degree of loss and the definition of the loss as being of either a partial or permanent nature in order to determine their rights to cancel the lease.

In the event of total demolition, and therefore inhabitancy of the property, the proof of permanent loss of enjoyment shall be easy and the tenant shall be able to execute his right to cancel the lease agreement. However, in the event of partial loss of enjoyment it is important to determine the range of destruction and the level of the loss of “intended enjoyment”, which can range between partial inhabitancy of the unit to a defective satellite dish. In the event of the latter, the tenant will hardly be able to cancel the lease agreement on the grounds of the loss of enjoyment.

Where there is a total loss of enjoyment, the tenant shall not be liable to pay rent from the date of when the total loss has occurred, and shall be entitled to cancel the lease agreement, provided that the tenant’s situation falls within the scope of the provisions of the Civil Code. Generally, the cancellation of the lease agreement in UAE shall take place by a mutual agreement between the landlord (property owner) and the tenant or by a court order.

Provided the requirements for cancellation of the lease agreement are met, the cancellation shall be made in writing by a cancellation letter addressed to the landlord and include the following details: A description of the situation which has occurred; the grounds for cancellation and the date of the loss of enjoyment; a request for the return of all post-dated cheques and refund of prepaid rent from the date of the loss and a request for the return of the security deposit. Furthermore, the cancellation letter should include an undertaking clause containing acceptance of the listed conditions, to be signed by the landlord and returned to the tenant.

If the landlord refuses to comply or does not respond to the cancellation letter, the tenant may approach the court and ask for cancellation of the lease agreement. The rules and procedures are established by the Dubai Rental Dispute Settlement Centre, also known as Dubai Rental Committee, which has the authority of the Dubai Courts regarding all tenancy issues. The Dubai Rental committee may be approached directly by the tenant in order to cancel the lease agreement or to resolve any tenancy matter.

The tenant may file a complaint with the Dubai Rental Committee, which shall include a request for the landlord to pay the costs incurred by the tenant and the costs of the proceedings. Should the landlord remedy the loss, the lease agreement will not be cancelled and the tenant can only claim for compensation, such as rent reduction, for the period of the loss of enjoyment.

After filing the complaint by the tenant, the Committee will try to obtain an amicable resolution. If this is not possible, the Committee will render a judgement which will state the decision, stipulate the terms of the cancellation such as repayments, return of the post-dated cheques and any further costs awarded. The judgement will be subject to an appeal within 15 days and will become final and executable thereafter.

CONCLUSION

It is advisable for the tenant to deal with insurance cover as early as possible, especially if the apartment is located in one of the towers completed prior to 2013. When the tenant does not have sufficient insurance cover, he might end up bearing the costs for all damages in addition to continuous rent and the costs for emergency accommodation. Irrespective of any self-assessment of the tenant’s situation, it is always advisable to get advice from a lawyer in order to proceed with the situation efficiently and on legally safe ground.

12 Aug 2017

These ultra-luxurious underwater homes are being built in Dubai

In the clear-blue waters off the coast of Dubai lies a chain of islands known as The Heart of Europe. They’re manmade reconstructions of actual European nations, just on a smaller scale — part of an even larger chain of islands known as “The World.”

Richard Branson, fittingly, owns the island representing Great Britain.

The Heart of Europe rolled out its first $2.8 million floating home, the aptly named “Floating Seahorse,” in early 2016. Since then, development firm Kleindienst has been rolling out even larger homes that will cost roughly $3.3 million.

Keep scrolling to see the gorgeous renderings.

The $2.8 million Floating Seahorse is the product of more than 5,000 hours of research and 13,000 hours of design and engineering, according to design firm Kleindienst Group.

The first models went on sale in 2015, before any Seahorses were even completed. Kleindienst told Business Insider it sold approximately 60 Seahorses in 2015.

The underwater portion, composed of a master bedroom and bathroom, will make up approximately 270 square feet on the interior. Just outside the walls is a 500-square-foot coral garden.

From the home, residents will be able to see actual seahorses dance through the Arabian Gulf — the animal’s natural habitat.

The floating homes will have a massive floating bed as well as an observation deck above water.

If you want to take a swim, a convenient step-ladder offers a safe entry and exit. Or you could just dive right in.

Since the structures are located about two and a half miles from Dubai’s shores, inhabitants can reach their Seahorse via boat or seaplane.

It’s not exactly the most accessible way to get to and from home, but once they’re out there, they can cross between the islands via floating jetties.

The company says it hopes the structure can set a new standard for what it means to live lavishly.

Kleindienst also hopes it can make some headway in restoring the endangered seahorse population in the area.

“We will create an artificial coral reef beneath the luxury retreats which will be a protected area in which seahorses can safely live and breed,” Kleindienst said at an unveiling even in May 2015.

The firm completed the rollout of its Signature Edition line of villas in fall of 2016. At 4,000 square feet and $3.3 million, they are a major upgrade from the original model.

The Signature Edition will have four designated bedrooms and several rooms that can transform into sleeping quarters, meaning the Seahorse can accommodate up to eight adults and eight children, according to Kleindienst.

These bigger structures will feature complete smart home automation, even down to the blinds.

underwater-homes-03

The underwater views are just as impressive, with marine life on full display in the master bedroom.

Below the water’s surface there are actually two bedrooms, one bathroom, and a viewing area for the coral garden.

There will be nearly 900 square feet of living space and 600 square feet on the outside of the Seahorse for the garden.

Kleindienst said it has already sold out of its first three editions, the most recent being the Tzar Edition for the island being built in the St. Petersburg portion of The World.

More than 200 designers, engineers, and architects from 25 countries have been working to make the underwater fantasy a reality.

Once the homes hit the water, they’ll be a breathtaking sight to behold — for humans and marine life alike.

 

7 Aug 2017

The Magical Gardens of Dubai

I’ve recently read a lot of stories about Dubai. People who lived there and had wonderful experiences in this magical city, people who consider that Dubai is a cold (pun intended) and materialistic place, and tourists mesmerized by its beauty. I’ve been in the city a couple of nights in the last year, and I am in love with it. Yes, it’s hot and has different rules, yes, it’s demanding, and yes, it’s powerful, diverse, abundant, and beautiful.

 

So, every time I land in Dubai, I am ready to discover more and more. Last month, I was astonished by some out-of-this-world gardens – something that I haven’t believed to be possible in the fiery Dubai.

It was late when my plane landed and a car was waiting for us at the arrivals. I felt blessed, because the weather in the mid-July is torrid. And to see the shiny city from a luxury ride is magnificent!

After 15 minutes, we have entered a magical space. Everything was soft pink, with candles and diffuse lights, and everyone was smiling and welcoming us after the long flight. The check-in is fast, and here I am – in my beautiful club room, with a balcony over the gardens.

In the distance, I can gaze at the tranquil sea and I can smell the divine scent of the frangipani flowers.

The bed is magical, soft and comfortable, and I can sleep in here forever. The last cigarette in my balcony made me dream of this amazing part of the world, a city rich in possibilities, lights, and bold architecture.

In the next two days, I went out just for 10 minutes, because the city is boiling and the streets are empty and wrapped in a silver light. Everything in Dubai’s summer is like a story from One Thousand and One Nights – smoke and mirrors, soft gaze, and translucent air. And the heat is like a thick blanket that protects you and carries you on its arms.

I was blown away by the beauty of the surroundings: flowers and water, fires on the beach, restaurants in the sand, transcendental spa scents, candles and Oriental lanterns on the hallways, delicious food, smiles, a pink beach in the twilight, restaurants with wooden ceilings, crystal chandeliers and piano music, an intimate club with people from all over the world, and soft conversations in English, French, German and Arabic.

How can you not fall in love with this city?!

If I could take with me just one experience, one memory, it would be the magical inside & outside gardens. And I let the pictures tell you this story!

 

I will always love Dubai. I understand its power and beauty. I met amazing people in here, who really appreciate the possibilities, the diversity and the magic of this city. Yes, you have to play by its rules, but they are fair, futuristic and abundant rules. I think this city will be The Future one day. It deserves to be!

If you want to have unforgettable memories in Dubai, I recommend you with all my heart The Ritz-Carlton Universe:

* the magical gardens

* the Plam Grill on the beach

* the beds!!

* the club and the delicious dishes served with champagne and prosecco

* the lights and the flowers

* the spa

* the people from all over the world

* the nights full of dreams.

And if you want to see more pictures, you can follow me on Instagram 🙂 Thank you!

30 Jul 2017

More on ‘Meydan One’ – Dubai’s most ambitious project ever?

At Cityscape this week Meydan released more info on the mega mall that will be part of the project. Here’s what we know…
Dubai doesn’t do small. It’s a place that likes things bigger and bolder.

Already home to the world’s largest dancing fountain; tallest building (Burj Khalifa); largest artificial islands (the Palm Islands); and biggest natural flower garden (the Miracle Garden), then there’s Meydan One, which features even more superlatives and is arguably the emirate’s most ambitious project ever planned.

Developer Meydan has announced the launch of Meydan One featuring a 711m-high residential tower, a huge new mall complete with a retractable roof, the world’s largest indoor ski slope, a 25,000 sq metres indoor sports facility, the biggest dancing fountains in the world, and a beach.

Located between the Meydan Hotel and Al Khail Road, the project is scheduled to be completed “before 2020”, according to statement from the developer.

The mall will be made up of 30,000 square metres of indoor and outdoor space – with 529 retail stores, including two major department stores.

The huge shopping centre will have a retractable roof (as will the new and improved Ibn Battuta) that will be opened in the winter months to create an alfresco space. In fact, there’s a sample model of the roof at Cityscape this week if you want to check it out.

mall

There will also be 25,000 square metres of indoor sports facilities with sports fields and courts for football, basketball, volleyball, squash, racquetball, paddle ball, table tennis, badminton, indoor cricket, mixed martial arts, boxing, jogging, softball and baseball (so basically everything).

There will also be a golf driving range and the chance to ski and snowboard on the one-kilometre-long ski slope, which you can see in the picture above. It will be the world’s longest too: Ski Dubai is 400-metres-long.

Outside there will be football pitches, mountain biking trials (fake mountains we’re guessing?) and running tracks. There will also be a skateboard park, a BMX spot and what looks like a kayakable lake:

Oh, and the mall will be home to the world’s largest dancing water fountain, which will be 400 metres wide and 100 metres high (Dubai Fountain shoots water 152 metres into the air but is only 275 metres wide).

Meydan-One-Mall-Fountain

The Mall will also have 90 food outlets, a 20-screen cinema and a 400-metre Central Canyon (we’re not sure exactly what that is but we’re imagining it’s a trough of some sort) flanked by luxury stores.

WHAT ELSE YOU’LL FIND THERE

Tallest residential tower

The Dubai One, expected to be the world’s tallest residential tower, and its connected podium will include almost 900 residential apartments and a five-star hotel.

Sports and leisure

There will also be a yacht club and an indoor multi-purpose sport facility with a 5.3 kilometes of bicycle and jogging trails. Meanwhile outdoors, you’ll find tennis, football, basketball, volleyball, a baseball batting cage, lacrosse, and hockey facilities.

City beach

There’s even plans for a beach in the heart of the city. The 300m long beach will offer visitors swimming, paddle boats, sea kayaking, beach volleyball as well as direct access to a new waterpark.

“This development is a forward thinking, interactive enterprise geared towards the Dubai of tomorrow. The encouragement and support we have received in the past from our trusted partners will now help the Meydan One development come to life. The first phase will be completed as Dubai prepares to host the World Expo 2020,” said Saeed Humaid Al Tayer, Meydan’s Chairman.

7 Sep 2016

Will This Become Dubai’s Coolest New Mall?

Another day, another new shopping destination announced for the city… gosh, isn’t living in Dubai just so tough?

However Meydan One isn’t going to be your average mall – not by a long shot.

In a city that likes to go big, this mega-development aims to go even bigger, and is set to feature the world’s longest indoor ski slope and the world’s largest dancing fountain.

What’s more, the sprawling shopping paradise is also going to include a nifty retractable roof, so you can peruse al fresco in the cooler months but be encased in delicious air conditioning come summer. It’s literally the best of both worlds.

Covering more than 30,000 square metres, Meydan One Mall will be made up of indoor and outdoor multipurpose space, with 529 shops, 90 eateries, two major department stores, and a huge hypermarket.

It’ll also become your new workout hotspot thanks to a 25,000-square-metre sports facility being built on-site.

Yep, that’s right – not only will you be able to pick up a new wardrobe and meet friends for a coffee, at Meydan One you’ll be able to have a knockabout on one of its many multi-purpose courts.

Activities catered for include football, basketball, volleyball, squash, table tennis, badminton, indoor cricket, mixed martial arts, skateboarding, mountain biking, boxing, jogging, softball, and a golf driving range (phew, we’re tired just reading about it).

Meydan One’s also looking to steal the Mall of the Emirates’ crown with its indoor ski slope, building a one-kilometre-long icy stretch to dwarf Ski Dubai’s longest run of 400 metres.

The mall, touted to open at the end of 2019, will also house a 20-screen cinema, a food court, 12,000 car parking spaces, and a 100-metre tall dancing water fountain.

However the project isn’t just about a mall – it’s actually just one part of an even bigger vision.

The Meydan One mega development was launched in August 2015 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

Located in the area between the Meydan Hotel and Al Khail Road, the integrated city will include a 711m-high residential tower and a 300-metre-long beach.

“This development is a forward thinking, interactive enterprise geared towards the Dubai of tomorrow. The encouragement and support we have received in the past from our trusted partners will now help the Meydan One development come to life. The first phase will be completed as Dubai prepares to host the World Expo 2020,” said Saeed Humaid Al Tayer, Meydan’s Chairman.

8 Sep 2016

Dubai tops best beaches near airports’ list

Dubai’s beaches rank top among the 10 best beaches near airports in the world, according to a list published by CNN Money.

“Dubai offers beaches for all tastes and budgets and, depending on the length of your layover, most are within reach of the airport,” CNN Money reports.

“The sparkling waters of the Arabian Gulf are closest at Al Mamzar Beach Park, a series of sandy horseshoe coves a few miles north of Dubai’s airport.

There, you’ll find warm water, shady umbrellas, and a selection of eateries and green spaces. It’s worth bearing in mind Mondays and Wednesdays are for women only. “South of the airport the closest option is Jumeirah Open Beach, a wide sandy shore open to the public. Further down the strip are Jumeirah Beach Park and Kite Beach, a kitesurfers’ haven near the Burj Al Arab,” the report adds.

15 Jul 2017

Dubai developer offers incentives to lure summer buyers

Deyaar Development has launched a summer promotion to provide would-be home-owners and investors with special offers on a range of off-plan and ready properties across Dubai.

The developer said the campaign includes perks such as down payments from just 5 percent and up to 100 percent Dubai Land Department registration fee covered by Deyaar.

Properties included in this offer range between off-plan, under construction and ready properties such as Midtown, The Atria, and Mont Rose, As well as Clayton, Mayfair Tower and Mayfair Residency in Business Bay, and Ruby Residences in Dubai Silicon Oasis.

Nasser Amer, sales vice president, Deyaar, said: “There’s no time better than now to purchase a Deyaar property with such incredible offers. This summer, we want to make home ownership and property investment accessible to all, and we’re pleased to provide residents in the UAE with these special, limited-time offers.”

The offer includes properties in Afnan and Dania, two districts in Deyaar’s Midtown development. During the special summer promotion, off-plan properties in these districts can be purchased with a 5 percent down payment while Deyaar will also cover 50 percent of the Dubai Land Department registration fees.

Limited stock in The Atria residential tower located in Business Bay will also be available as part of this offer. The project which will be handed over end of this year, can be purchased through the summer offer with 10 percent down payment, with 100 percent of Dubai Land Department registration fees covered by Deyaar.

New releases in Mont Rose Residences Tower A and B, located in Dubai Science Park and scheduled for delivery in Q3 2017 are also available with 20 percent down payment, with 50 percent of the Dubai Land Department registration fee covered by Deyaar and up to AED25,000 furniture voucher is made available to all buyers.

Ready units in Deyaar’s Business Bay properties – Clayton, Mayfair Tower and Mayfair Residency – are available during the summer promotion with a 5 percent down payment, and Deyaar will cover up to 100 per cent of Dubai Land Department.

15 Jul 2017

Property investors expect UAE market to remain flat, worsen

Nearly three-quarters (74 percent) of investment professionals expect that the UAE’s residential and commercial real estate market will either stay flat or deteriorate over the next 12 months, according to a survey.

The poll by CFA Society Emirates also showed that in terms of the commercial real estate outlook for the UAE, 70 percent said they feel that the market will either stay flat or deteriorate.

The survey also revealed that while 45 percent of members believed that GCC’s real estate market is mature enough for REITS to flourish, another 43 percent believed that it is not.

It said investor sentiment and lack of understanding, along with a weak regulatory environment, are the biggest challenges for the growth of real estate investment trust (REITs) in the Middle East.

The poll revealed that the majority of members ranked expected returns from a REIT portfolio higher than cash equivalents and bonds, and said that they intend to invest in REITs.

However, they added that they believe that the returns from REITs would be lower than stocks, private equity and real estate.

Amer Abdul Aziz Khansaheb, president of CFA Society Emirates, said: “With the UAE’s real estate market having the highest demand in the GCC amongst regional and international investors, a less volatile asset class, such as REITs, is expected to become more attractive, as investors seek to reduce portfolio risk given the current macroeconomic environment.

“However, our survey shows that it is important for investment professionals to increase investor understanding about REITs and gain their trust through prudent and ethical investment strategies which put investor interests first. This, along with creating a more robust regulatory environment to gain investor confidence, is significantly important for the growth of REITs in the region.”

The CFA Society Emirates Society is an association of local investment professionals consisting of portfolio managers, investment advisors, educators and other financial professionals.

15 Jul 2017

Dubai Opens Floodgates to Waterfront Living in City Centre

Dubai Marina has long claimed some of the best waterfront views in the emirate, but a vast canal in the heart of the city is starting to turn the heads of new investors.

The AED 2.7 billion (US$735 million) Dubai Water Canal, which opened in October, was one of the most ambitious projects launched before the city’s property bubble burst in late 2008. An extension of the ancient trading waterway known as the Creek, it is a liquid timeline linking old and new Dubai.

dubai-business-bay

At one end, battered old timber boats called “abras” still ferry people across the water to the gold and spice souks for an inflation-defying fare of one dirham (US$0.27), that has remained the same for decades. At the other, shiny, new air conditioned water taxis glide beneath the shadows of the gleaming new skyscrapers of Business Bay, the city’s modern commercial heartland.

“It is very much a bridge between old and new Dubai,” said Faisal Durrani, the head of research at Cluttons, who explained that its location is its biggest advantage, offering easy access to the commercial hub of the city around Dubai International Financial Centre as well as the old residential neighborhoods in Jumeirah and Umm Suqeim.

The district that almost wasn’t

The canal very nearly became a casualty of the Dubai property crash of 2008 when it had reached almost as far the city’s main highway as construction projects stalled across the city. There it remained for another five years until the project was revived and the remaining few kilometers was dug to the sea—effectively turning old Dubai into an island and adding thousands of acres of development land with water views.

Creating waterfront development land has been the kernel of the Dubai real estate phenomenon ever since the dredgers started to scoop up sand from the seabed to make the first palm island. It continues to drive the market, and the Dubai Water Canal is the latest gift to developers seeking to sell spectacular views.

Lessons learned from the Marina

The 3.2 kilometer waterway extends from the old Creek through Business Bay and is between 80 meters and 120 meters wide.

The new waterway reaches the coast in the Jumeirah district, about 20 kilometers north of Dubai Marina and about 12 kilometers south of the mouth of the Creek.

But unlike the Marina, which today boasts a population of more than 100,000 and quickly became a victim of its own success in generating traffic congestion, the canal district is being developed with infrastructure planning taking the lead.

Even before large-scale residential construction has commenced and before any significant numbers of people have begun moving into the district, there are already 1,600 parking spaces in place and five water taxi stations. There is also a 3 kilometer running track and a 12-kilometer cycling path.

“The Canal can learn the lessons of the Marina,” said Simon Townsend, a veteran of the Dubai property scene who heads the strategic valuation advisory business of CBRE in the city. “They are learning from the Marina in terms of infrastructure, the movement of people and putting the lifestyle in first.”

“The first launches in the Marina were residential, but the first launches in the Canal have been hotels,” Mr. Townsend said. “They are trying to make sure the service offering is there. The Marina played catch up, but the Canal is leading with the facilities so that the residential will go in when the location already has a value.”

More than 960 hotel rooms and 5,000 homes are planned for the immediate area around the development, which as yet is largely uninhabited, in three districts known as Gate Towers, Jumeirah and Peninsula.

This last element is being developed at the end of the Canal and extend to what was the old Jumeirah Beach Park by adding about one kilometer of new beachfront.

Despite the proximity of several existing major shopping malls, the development plan also includes a three-level mall extending across 300,000 square meters with 400 retail outlets and a park on its roof.

Luxury hotels including the St. Regis, the W Hotel and the Marriott Marquis are already operating in the district, while Damac, one of the city’s biggest developers has kickstarted the construction of luxury residential units in its $2 billion Aykon City development, which will include at least six towers and is targeted for completion in 2021.

An integrated community

Mr. Durrani sees the Canal district as being better integrated into the surrounding city than Dubai Marina, which he describes as a “parachute” development, albeit a hugely successful one.

The Dubai Marina “has two metro stations, ferry stations, and a vibrant thriving community. You can probably count the available plots left on one hand,” Mr. Durrani said. “It will soon have the world’s largest ferris wheel, it is the world’s largest manmade marina and so it has got a lot of firsts and a lot of reasons why people want to live there.”

“The Dubai Canal on the other hand is more of a city-type development,” Mr. Durrani continued “It won’t have the same density from what we understand, and in terms of location, it is much closer to all of central Dubai. There will also be a lot of green space which the Marina doesn’t have.”

The potential that the location holds is already visible during weekends, when it attracts large crowds of people strolling and jogging along its banks even before large-scale construction of new homes has begun.

Mr. Townsend said he was surprised to discover that the Canal area already has the feel of a more established district even though the canal itself was only opened in October.

“I took my family there a few months ago and we couldn’t get in the first few water taxis that stopped. They were full, and not just of people taking photographs but of people there for a purpose,” he said. “Its lever is that it is basically connected to everything and from an investment point of view, it is an area that people are talking about.”

9 Jul 2017

Generation Start-up: Propertyfinder chief a pioneer of online real estate

There was some debate with Propertyfinder’s founder and chief executive, Michael Lahyani, as to whether he should be a representative for Generation Start-up – The National’s new series profiling some of the region’s best start-ups and entrepreneurial ventures.

Firstly, as he points out, it has been a long time since his business could have been considered a start-up.

“We try to keep the start-up culture, definitely, because the start-up culture is fun, agile and reactive,” Mr Lahyani explains. “But a start-up business usually has reduced funding, is unprofitable and I think we’ve grown out of that phase, thankfully.”

Yet Mr Lahyani possibly has more relevant knowledge and experience to impart to entrepreneurial companies in the UAE than most of his competitors. He went through his first funding deal when his business was only a couple of years old, bought out this investor two years later in the midst of a major slump and then subsequently went through two more funding rounds. The last one, which took place 18 months ago, valued his business at US$200 million.

Mr Lahyani launched Propertyfinder in 2005 because he said it was “solving a pain”.

When it came to searching for properties either to rent or buy, he says “there was no good destination to go to”.

“There were supplements of newspapers but there was nothing online.”

He says that when the business started, online penetration “was below 50 per cent” for the real estate market. His firm initially published a property listings magazine that was distributed for free across the city.

The move to go online was triggered by the realisation that “we were never going to win the print war”, says Mr Lahyani, especially as some competitors were offering big discounts to advertisers who signed exclusivity contracts.

The firm moved to an online-only model in 2007, but Mr Lahyani says the switch was not an easy one to make. “I don’t think the traffic was there when we did the change, but the minute you start working with online, thinking about online, that’s when it starts coming.”

Momentum was only gained among its property broker clients after the global financial crisis and the subsequent slump in Dubai property.

“When markets are booming, the real estate industry is not looking for new ways of marketing,” says Mr Lahyani.

“As real estate agents started feeling the pain, they were more open to change.”

The company had initially gained an investment from REA – an Australian subsidiary of News Corp – in 2007, but after the hit Dubai property took in 2009, Mr Lahyani bought this stake back and he says the business turned around within six to 12 months.

He continued to fund the business from his own resources until raising funds again – initially with Beco Capital in 2013 and 2014, and then with Vostok New Ventures in 2015. The latter bought a 10 per cent stake for $20m.

Propertyfinder had enjoyed a five-year run with revenue growth rates of between 80 to 100 per cent per year, Mr Lahyani says, before consolidating last year when it grew at about 30 per cent.

This was necessary, he says, for it to embed the proper systems and controls that a bigger company requires.

“Suddenly, you’ve gone from being a one or two-location company to a seven-location company with different regulations and taxes. And you want to be able to issue audited accounts on time.

“You want to have HR policies across the board that are working, you want to have unified tools … to have visibility throughout all your markets.

Propertyfinder now employs 260 people – about 140 in its main base in the UAE and the rest are in six other markets where it has a presence, including Saudi Arabia, Egypt and Qatar.

Mr Lahyani says all technology and product development is done in-house in Dubai.

“I think, when you’re a tech business, outsourcing your tech is a bit like if you are a restaurant and you’re outsourcing your kitchen. By the time the food comes, it will be cold and not what the customer ordered.”

He says products from other markets cannot really be imported. Propertyfinder tried to export its UAE model into Saudi Arabia and Egypt, for instance, but found that did not work.

“Search habits are different in Saudi Arabia than they are here. People here will have been exposed to internet products before they arrived in Dubai. In Saudi Arabia, less so. Therefore, the user experience needs to be a lot simpler and you don’t want to drown them with too many functionalities.”

Sites also need to be simpler in Egypt as a result of a slower mobile network.

“That has an effect on how the product appears,” Mr Lahyani says.“ For us, speed is everything – before design. A nicely designed website on your mobile, if it’s slow, doesn’t serve its purpose.”

He says in terms of traffic, the site is growing at about 100 per cent year-on-year and that the biggest opportunities for growth are in some of those markets that are not as well developed.

“The amount of people that are online coming to search for real estate is really at the beginning of that ‘hockey stick’ in the Middle East. That sounds crazy here in the UAE where everybody is online but we are digitalising information that has never been digitalised before.”

In Saudi Arabia, for instance, he says although there are estate agents for expensive properties, a lot of the listings that are moving online are details that “people either have on pen and paper or in their head but it’s never been put down with a description, a title, an image, a contact number and made available online”.

It is the potential of these markets that provided part of the appeal for Vostok New Ventures to buy its stake in the firm, says Bjorn von Sivers, the head of investor relations at the venture capital firm and a member of its investment committee.

Vostok New Ventures is a specialist venture capital (VC) firm with a niche in investing in online classifieds and marketplace sites in emerging economies. Its most successful investment has been in the Russian classifieds site Avito.ru – a business in which Naspers bought a majority stake in 2015 for $1.2 billion.

Mr von Sivers says Stockholm-based Vostok first became aware of Propertyfinder when broadening its geographical scope for investment outside Russia and on to the Middle East.

“We looked at a number of businesses within this niche in many markets, and then we came across Michael and we really liked Propertyfinder and how far he has taken the company.”

Mr von Sivers says both Saudi Arabia and Egypt are obvious countries for development, stating that although Egypt has the lowest GDP, it is the biggest market.

“There’s no company yet that has really taken [either market].

“There’s a big opportunity if you invest there. If you put in a lot of focus you can become the winner.”

Alex Nicholas, the co-founder of the competitor JRD Group, which owns the Justproperty.com brand, agrees. His company raised Series A funding from iMena Group in August 2015 and is also looking to expand into Saudi Arabia and Egypt. In fact, he says, it agreed the investment from iMena because of its influential Middle East backers.

“We’d been approached by a few US VCs and in my opinion they didn’t really seem to provide much, other than just the money. iMena had the regional connections.”

Its funding is partly to grow its portal regionally but also its Propspace CRM software for brokers. However, Mr Nicholas agrees that most markets outside the UAE are up for grabs.

“None of the portals have really taken any of those markets, I think it would be fair to say,” he says. “If you speak to people on the ground in Saudi Arabia, they haven’t really heard of any of the portals that are big in the UAE.”

Mr Lahyani has plenty of firepower and an experienced team around him that he hopes will be able to help it become the major player. He says it has a network of international investors “some Silicon Valley, in Asia, in Turkey, in Europe” that have been real cheerleaders for its brand.

He says raising VC funding does not become easier for the second round, as a different set of characterstics are required – investors want a clearer plan for deliverability to justify any increase in valuation and expect a more defined vision.

But his most important piece of advice for entrepreneurs thinking of raising capital is to wait as long as they possibly can before bringing in external funding.

“When I bought out REA in 2009 and Beco invested in 2013, that was a long few years on my own where I wanted to raise money.

“In hindsight, I’m so glad that I didn’t because I would have diluted myself much earlier.

“I always say to entrepreneurs when they say they are trying to raise [VC funding], ‘do you think you can get through the next 18 months without raising?’

“If the answer is yes, put your head down and keep pushing.”

10 Jul 2017

The thrill of investing in boring companies

Too many people see investing as a way to get rich quick, but they actually have it the wrong way around.

Investing is about getting rich slowly, but surely, year after year.

The best things in life take time, and if you try to build a portfolio too rapidly you are likely to come unstuck.

Putting your money into whizzy growth stocks may sound exciting, but you can lose money as rapidly as you gain it. In the longer run, boring businesses can be much more rewarding.

So forget shoot-the-lights out oil explorers, junior mining companies or technology start-ups, and think keep-the-lights on stocks such as water and electricity suppliers, household goods suppliers and tin can makers.

Investment legend Warren Buffett learnt this investing strategy long ago; he loves “boring” businesses like utilities, soft drinks, toothpaste, bricks and carpet manufacturers. Here is guide to investing in these lucrative dullards:

Bunzl of fun

The chances are you have never heard of London-listed packaging company Bunzl, even if you hail from the United Kingdom.

This multinational outsourcer has a low profile because its job is to help other companies manage their everyday functions, by supplying napkins and disposable cutlery to restaurants, plastic bags to supermarkets, and janitorial products to hospitals.

Fallen asleep yet? Here is the exciting bit. Over the last 10 years, the shares are up 206 per cent, against a rise of just 11 per cent on the UK’s FTSE 100 index. With dividends re-invested, the total return is 306 per cent, according to online trading platform AJ Bell, whose investment director Russ Mould says: “Bunzl shows that boring can be best.”

Too many investors focus on share price growth and overlook dividends, which are the key to making money in the longer run. They could ultimately account for as much as three quarters of your total returns, provided you invest them back into the stock for future growth. Dull was never so much fun.

No thrills

Sam Instone, the chief executive of AES International, says established companies with stable cash flows and dividends may bore thrill-seekers but can ultimately deliver while the latest hot new tech stock or cryptocurrency briefly dazzles then falls by the wayside. We are talking tortoise and hare here.

Beverage maker The Coca-Cola Company, US telecommunications major AT&T and US retailing firm Walmart Stores show that slow but sure still wins the investment race. “They fall into the category of mature and stable, and are therefore, probably boring for some people,” says Mr Instone.

The key is to give them time to prove their worth. Mr Buffett bought his first shares in Coca-Cola in 1988 for just US$2.45. At time of writing they trade at just over $44, almost 18 times as much. They also yield 3.33 per cent a year, so with dividends reinvested Mr Buffett’s total return will be far, far higher.

The secret to making a success of investing in boring companies is to hold them for the long-term and let the growth and dividend income compound.

Mr Buffett’s investment vehicle Berkshire Hathaway’s top 10 holdings contains a series of less-than-exciting companies, including credit rating agency Moody’s, US banks Wells Fargo and Bancorp, personal and household product supplier Procter & Gamble, technology company IBM, American Express and of course Walmart and Coca-Cola.

Mr Instone says these “bread and butter” stocks are low-risk but highly rewarding. “Investing isn’t speculating, it shouldn’t be a thrill-seeking gamble. Done right, investing is as boring as watching paint dry and grass grow.”

If you do not want to buy individual stocks he says you can take the slow and steady route to wealth by building a well-diversified, low-cost portfolio of exchange traded funds (ETFs), which track performance of the major global stock markets. “Invest as soon as you have the money available and hold for the long-term, ignoring short-term market volatility and noise.”

Everyday pleasures

There are plenty more dull but surprisingly exciting stocks to choose from, including utility firms such as American Waterworks Company, DTE Energy, whose share prices have all more than doubled in five years, as has US insurer Cincinnati Financial. Medical suppliers Becton Dickinson and CR Bard have seen their share prices triple in five years.

Chris Beauchamp, a senior market analyst at online trading platform IG, picks out the Colgate-Palmolive Company and pharmaceutical medical devices company Johnson & Johnson as his favourite non-glamour stocks. “They combine steady earnings growth with an attractive dividend income, yielding 2.18 per cent and 2.54 per cent respectively, with a progressive dividend policy,” he says.

Both sell everyday products that people still buy regardless of how the economy is doing, such as toothpaste, soap, kitchen sprays, pet food, shampoo, disposable contact lenses, and cold and allergy treatments.

Mr Beauchamp also picks out US manufacturer Crown Holdings, which makes aerosol, food and soft drinks cans, and celebrates its 125th anniversary this year.

Soft soap

Laith Khalaf, a senior analyst at UK wealth managers Hargreaves Lansdown, names UK-listed global consumer goods giant Unilever as a classic dull and defensive stock. “Its roll call of brands includes Jif, Domestos, Dove soap, Knorr, Lipton, Lux, Signal toothpaste, Sunsilk, Vaseline and it has delivered consistent earnings growth for year after year.”

Unilever is exciting enough to have recently attracted a $143 billion acquisition bid from Kraft-Heinz, which it fought off, and the chief executive Paul Polman is now focusing on boosting investor returns. “For a company which already enjoys an impressive track record for dividend growth, that’s quite an attractive commitment,” Mr Khalaf says.

British water utility Pennon is another humdrum company to consider, he adds. It yields an attractive 4.45 per cent a year and plans to increase that by the UK inflation rate plus 4 per cent a year until at least 2020. “It does have a slightly more racy division which offers more growth potential, although a household waste recycling business called Viridor will not set too many pulses racing.”

Global credit analytics agency Experian is also one to watch, as it supplies data to help banks and retailers credit score customers and make lending and marketing decisions. “Experian has pretty unique products, good pricing power and margins, strong cash generation and controlled debts. It has paid regular, growing dividends for years and also returned surplus capital through share buy-backs, boosting overall shareholder returns,” says Mr Khalaf.

Mr Khalaf adds that getting rich slow is the key to building a decent nest egg and dull companies often do this the best. “Providing customers with water or cleaning products may not be the most glamorous of activities, but it can pay dividends for shareholders if steady growth can be compounded over the long term.”

Innovative, disruptive, ground-breaking companies still have a place in your investment portfolio, but sometimes boring is best.

Think dull.

9 Jul 2017

Beware of special offers on off-plan purchases

Novice property buyers hunting for bargains on Dubai’s off-plan residential market are being duped by misleading offers, a UAE real-estate expert has warned.

Firas Al Msaddi, the chief executive of fäm Properties, said yesterday that properties in prime areas are often advertised by developers as having “the best” or “the lowest” price – something that lures in investors focused on price rather than the liveability of the home.

“The ads are misleading,” said Mr Al Msaddi, “because they are implying that they are the cheapest; but ask a property agent to evaluate the offer for you and they will tell you otherwise.”

Mr Al Msaddi said inexperienced investors can be caught out by the low sale price for the unit in comparison to other properties in the area, and forget to assess the price per square foot.

“The ad will claim these are the lowest prices in Business Bay, for example, but they are only the lowest because the units are squeezed. When you look at the price per square foot it is actually higher than the average for the area.”

“If someone has been buying and selling for the last five years, they would figure it out, but the inexperienced investors don’t pay attention to this.”

Mr Al Msaddi says his brokerage has heard from many people selling at a loss because they fell for the offers and then could not let out the space at the rate they wanted.

He said this is particularly the case in prime areas like Downtown Dubai, where the vast majority of end users are GCC citizens, other Arabs and Indians who demand spacious two, three and four-bedroom homes.

“They buy off-plan and when it’s complete the whole evaluation shifts from being something on paper to the real thing,” he said, adding that purchase decisions in prime locations should be based on what end users see when they visit ready properties.

Mr Al Msaddi said he has seen off-plan two bedroom apartments in the area priced as low as Dh1.6 million to Dh1.8m – in comparison to the average for the area of between Dh2.5m and Dh2.8m.

“The brochures are nice and colourful, but the buyer does not visualise how small the apartment is until it’s too late. Once the property is handed over, no one cares about the price you purchased at, it’s all about whether it’s attractive to end users or not.”

The warning comes amid a boom in Dubai residential off-plan sales. Properfinder.ae, a listings portal, said off-plan sales are expected to continue until the end of the year as low-deposit speculators take advantage of increasingly generous payment plans and a greater choice of projects.

The firm said that cheaper homes and lower deposit requirements were driving investors towards off-plan deals. Despite median prices for home falling by 20 per cent between November 2015 and April 2017, the lower prices have not affected developers’ off-plan sales, said propertyfinder.ae.

Simon Kennedy, managing director of the property broker Edwards & Towers, said his firm had not experienced any mis-selling by developers – particularly since the Land Department tightened regulations governing off-plan sales.

“I haven’t seen any evidence of misleading offers,” he said. Instead he said off-plan buyers have better options.

“Select properties has just relaunched a few units in Marine Gate 1 in Dubai Marina where the investor pays 10 per cent now, 30 per cent on completion and 60 per cent on a two-year quarterly payment post-completion,” he said.

“If you are exposing a lot of money during the construction, that’s when the risk starts to pile up, but [if] you are only exposing 30 per cent then you are quite de-risked.”

However, for those that are misled by agents, Mr Kennedy said buyers must fully research pricing by cross-checking what the developers are offering with what’s listed on the resale market through portals such as dubizzle and propertyfinder.ae.

Mr Al Msaddi said investors should adopt a two-step process when considering a purchase to protect their investment.

“First look at the price per square foot and at the tag price – both have to within the average for that area,” he said. “Next, look at the liveability of the apartment and the size of the rooms.

“There’s a lesson here for both investors and end users who need to evaluate a property in the context of expected end user demand once the project is completed. This can be measured in terms of the property’s liveability offering – the amount of space and comfort – combined with the individuality and unique nature of the development and the overall market supply factor.”

Both Emaar properties and Damac Properties have reported higher sales in the first quarter of 2017 – Emaar booked deals worth Dh6.05 billion in the first quarter – a 44 per cent year-on-year increase while Damac sold properties worth Dh2.2bn – up 11 per cent year-on-year.

6 Jul 2017
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