Weekly Dubai real estate news digest. Issue 38

23.03.2014
Renewed vigour in realty sector
Welcome to the thirty-eighth issue of Market Insight, your weekly guide to what's happening in the Dubai real estate market.
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MARKET INSIGHT. Weekly guide to Dubai's property scene
Issue 38 |  March 23, 2014

Renewed vigour in realty sector

With the property market soaring and experts asserting that residents should feel safe to be optimistic about the sector, developers have kicked off mega projects to cater to an ever-increasing demand. 

Nakheel has awarded contracts worth AED563 million for construction projects at two of its delayed mega communities - Al Furjan and International City. Meanwhile Diamond Developers has commenced work on its AED1.1 billion Dubai Sustainable City project in Dubailand, aiming to deliver the first 100 units by the end of the year. Construction work has also commenced on The Pentominium, billed to be the world's tallest tower. 

In addition to picking up where they left off prior to the recession, realtors have also announced new projects in development in addition to those that are ready for the market. Deyaar Development recently announced the selling-out of all residential units at The Atria in the Business Bay district. A sales event held on Sheikh Zayed Road registered AED500 million within hours of opening. Meanwhile, Emaar Properties has announced plans to launch BLVD Crescent, a twin tower development in Downtown Dubai, which will offer views of Burj Khalifa, the Dubai Fountain and the Opera District.

Overall, the future of Dubai's realty sector looks positive, especially with Dubai's $20 billion refinancing agreement with Abu Dhabi and the UAE Central Bank.

"The refinancing deal is a welcome move, clearly indicating that the UAE's economy is back on track," said Joe Tabet, CEO and chairman of the UAE-based Pragma Group which runs Cavalli Club and Cirque Le Soir in Dubai. 

The refinancing deal with specifically improve confidence in Dubai's property market, according to Mat Green, head of research and consultancy, CBRE Middle East. "The deal would further give impetus to UAE's growing economy, positively impacting all real estate assets. The emirate is expected to fast track infrastructure and facilities, ranging from real estate and retail to transport links as part of its plans for Expo 2020."

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Most of the UAE's realty experts seem to agree that Dubai's refinancing agreement deal is bound to result in an upturn in projects and a rise in optimism. We will be following up on developments in the sector and be sure to keep our readers updated on the surge in new projects that are bound to be the result.

Sincerely,

Pashma Manglani

Editor


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'Dubai's $20b debt refinancing deal will boost market' 

Dubai's $20 billion refinancing agreement with Abu Dhabi and the UAE Central Bank will improve the emirate's economy, particularly boosting its real estate sector, say experts.

The Abu Dhabi government will be rolling back $10 billion of Dubai's debt maturing this year with the central bank rediscounting a loan of the same value, also due in 2014. The amount was extended to the Dubai government as emergency aid following the global financial crisis in 2009 when the emirate's property market crashed. The new debts are now renewable after five years, according to the official news agency WAM. 

 

Read more on Gulf Business

Property prices up 35%

Dubai property prices rose by almost 35% rather than 22%, according to a new report.

In its latest (Q4 2013) Global House Price Index report, the UK-based consultancy said prices jumped by 34.8% during the 12-month period, adding that mainstream prices still remained 25% below their 2008 peak.

"Dubai recorded the largest annual rise in mainstream property prices with prices rising 15.3% in the six-month period (Q2 to Q4 2013)," the report said. 

In February, JLL said prices were 15% below the 2008 peak and could reach the peak in the coming 10 to 17 months. "In some locations, we are witnessing that prices have reached the 2008 level, but overall we see that prices will reach that level in the next 10 to 18 months," said Craig Plumb, head of research, JLL MENA. 


Read more on Emirates 24/7

Emaar value jumps AED3b 

The value of Emaar Properties jumped by almost AED3 billion as investors scrambled to be part of the sale of its retail unit, which includes The Dubai Mall. 

A share-buying frenzy boosted Emaar's market capitalisation to AED59.23 billion. Investors rushed to buy holdings in the developer that owns one of the biggest shopping malls in the world, sending the stock to a six-month high after it announced intentions to spin off its retail unit. It also proposed a 15% dividend as well as 10% bonus shares. 

Meanwhile, Emaar Properties said revenues from apartment and villa sales rose by more than 40% last year to top AED4.9 billion, overtaking revenues from the company's hospitality and leasing operations. Emaar reported that revenue from apartment sales rose 44% to AED3.6 billion while revenue from villa sales rose 41% to AED1.3 billion. 

 
Read more on The National

Sustainable City in top gear
 

Diamond Developers has commenced work on its AED1.1 billion Dubai Sustainable City in Dubailand and aims to hand over the first 100 units by year-end, the company chairman has revealed. 

"Work has started the first, second and third villa clusters and we aim to commence construction on the fourth and fifth cluster by April and May, respectively," Faris Saeed said. Each of these villa clusters consist of 100 units. "We have between 500 and 600 workers onsite every day. We plan to complete 90 villas in three months, which means we will build one villa in a day."

Sustainable City is expected to be completed by mid-2016. Solar farms will cover 600,000 square feet, while 50% of the cooling energy in the city will be generated through solar power. The city will have 10 MW peak solar production, 2,700 residents and a daily population of 6,000.


Read more on Emirates 24/7

Nakheel allocates AED563m for mega communities
 

The Dubai developer Nakheel has awarded contracts worth AED563 million for construction projects at two of its delayed Dubai mega communities.

In a statement, Nakheel said it had awarded three contracts to builders for new construction in its Al Furjan and International City projects in Dubai.

Ginco General Contracting was awarded an AED310.6 million contract to build 249 homes at Al Furjan while United Engineering Construction had won an AED215.4 million contract to build another 152 homes at the scheme. Under both contracts, construction is due for completion in 18 months. 

Nakheel started selling 400 off-plan homes in the new phase of Al Furjan in October with terraced homes going for around AED2.85m and villas selling for AED4.56m.

The developer also awarded a contract for AED36.8m to Metac General Contracting to build a 79,000 square foot community shopping centre. Construction is scheduled to take 12 months. 

 

Read more on The National

Work begins on tallest residential tower
 

Trident International Holdings, a Dubai-based developer, will be restarting work on the 516-metre Pentominium, billed as the world's tallest tower, by the third quarter.

The tower, located in Dubai Marina, was scheduled for completion in 2013, but work was suspended in August 2011, following the global financial crisis and customer default. When completed, the tower will have 122 floors above ground and house 172 luxury penthouses designed by Italian fashion designer Salvatore Ferragamo. 

 

Read more on Emirates 24/7

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