Weekly Dubai real estate news digest. Issue 44

04.05.2014
Shifting scene for office realty
Welcome to the forty-fourth 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 44 |  May 4, 2014

Shifting scene for office realty

Dubai's commercial sector has seen a strong start this year with the number of leasing transactions up significantly in both annual and quarterly terms in the first three months of 2014.

However, the value of transactions was down markedly on the previous quarter, according to the latest update report from international real estate consultants Knight Frank. The report highlights that these results are not surprising, given that high value leasing contracts were signed by corporates before the end of last year and that owners of strata commercial space have increasingly been expressing an interest in purchasing accommodation in freehold locations.

Knight Frank expects that quality offices in prime locations will see rents rise 20% this year and 10% in 2014. It also points out the recent completion of projects along Sheikh Zayed Road, Business Bay and Al Barsha - highlighting that the increased level of office supply in these areas provides greater tenant choice and helps stabilise rents.

This growth in the sector is significant at a time when experts have stressed the need for UAE to be concerned about property flipping. "Speculation in the market will always be there and it cannot be eliminated," said Gurjit Singh, chief development office, Aldar Properties. For major developers, the key is in implementing new measures to prevent the practice whenever possible. Emaar Properties does not allow investors to sell properties in the secondary market until they have paid 40% o the purchase price. According to Chairman Mohamed Alabbar, "We are trying to control flipping. We have a mainframe system that is incredible - if you buy and you flip within 30 days, the system will never allow you to come and buy with us again."

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. There are clearly significant changes occurring in Dubai's real estate sector - whether it be in the area of residential or commercial property. One thing is certain, developers across the country are taking news reports seriously and are working hard to ensure that they avoid the mistakes of the 2008 recession. To follow up on the newest trends to hit the market, be sure to read through our latest observations in our weekly publication.
 

Sincerely,

Pashma Manglani

Editor


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'UAE should be concerned about property flipping' 

The chairman of leading developer Emaar has warned about off-plan sales as the government and other developers take steps to reduce speculation on property prices.

According to Mohammed Alabbar, "We need to learn from the mistakes of the past. We need to  be concerned about flipping."

The flipping of property has long been cited as the reason for the 2008 housing market crisis when speculators bought unfinished properties and sold them on to third parties within a short time frame, inflating housing prices. 

 

Read more on The National

Home buyers can now jump the queue 

Emaar Properties is offering anyone who pays 30% down on a new home the chance to skip the queue and register early. However, to curb property flipping, the catch is that they must hold on to the house until it is completed.

Buyers who make a 30% down payment on the total value of off-plan homes and commit to maintaining ownership of the property until handover can now avoid waiting in the regular queues for property purchases or early registrations.

According to Emaar, the new promotion is aimed at "strengthening investor confidence" in Dubai's off-plan sales market, which was hit hard by the global financial downturn. 

 

Read more on The National

Firms mull owning commercial property

A subtle shift seems to be happening in Dubai's office realty market within the freehold zones - some of the occupiers are veering over to the idea of actually owning the space. If this holds up, it could just be the right prescription for the office property market to play catch up with the residential boom.

"The rationale appears to be that, not only will they be able to build equity over time, but also potentially benefit from capital value gains in the medium term, as well as rental savings," says a new Knight Frank report on Dubai's office realty in the first quarter.

 

Read more on Gulf News

High demand for labour housing

Dubai Investments Park (DIP) is witnessing huge demand for its labour and staff accommodation facilities due to the heightened construction activity in the emirate.

DIP's proximity to the Expo 2020 site is also fuelling demand for its labour and staff accommodation complex, built as per international standards.

The DIP labour accommodation zone, which currently has a total of 225 plots for staff accommodations - from apartments to labour camps, accommodates over 90,000 people.


Read more on Emirates 24/7

Better access drives up JLT prices

Improvements to roads and community facilities in Jumeirah Lakes Towers has made the development one of the most attractive areas in Dubai to live, according to new statistics.

Rents for one-bedroom apartments in the high-rise development rose by 29% in the first quarter of this year, compared with the same period last year, according to figures released by the classifieds website Dubizzle. Sale prices for one-bedroom flats have also gone up by 47%.

"JLT is an area that has faced problems, particularly with bottlenecks leading in and out of the area," said Ann Boothello, a property analyst at Dubizzle. "Now that work has finished, there is better infrastructure, better facilities (such as restaurants and cafes) and it is now enjoying its time in the spotlight."

 

Read more on The National

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