Month: December 2009

Residential prices to stabilise on long-term buying

Residential real estate prices are likely to stabilise in 2010, with buyers investing for the long term, according to property agents.

“Prices across villas and apartments will stabilise in 2010. Moreover, buyers investing in residences in Dubai will enter on a long-term basis, indicating a less speculative interest in the emirate,” said Mohanad Alwadiya, Managing Director of Harbor Real Estate.

However, challenges to the real estate sector continue to remain. Alwadiya said: “While mortgage financing is easing, it is still limited in availability. Banks are lending but only to people with certain fixed profiles and according to rigid criteria. For example, people working in the real estate sector find it hard to source funding because of the risk associated to their job. Also, infrastructure in many developments needs to keep pace with the progress of the development.”

Vineet Kumar, Head of Sales at Asteco, said: “The buying trend has been towards ready properties, and mortgage finance is available for most projects from leading mortgage providers. Interest rates are in the range of 6.5 per cent to 10 per cent. Occupancy levels in developments handed over are generally in excess of 70 per cent. Locations such as Dubai Marina and Downtown Burj Dubai are being preferred by young families, while larger families have a preference for large villas in locations such as Emirates Hills and Jumeirah Islands.”

Just ahead of the new year, Emirates Business picked 12 residential projects in Dubai that received interest from potential property owners and tenants in the past 12 months. Some of these projects saw increased sales and rental transactions while some projects, such as Burj Dubai by Emaar Properties and the Villa Project in Dubailand by Al Mazaya Real Estate, are gathering a lot of interest just ahead of their handover.

Other major factors noted have been population shifts from other emirates and other developments in Dubai’s Discovery Gardens and International City projects.

“The reason for this is the attractive rental prices within these developments. In fact, recently, large corporates have looked to lease multiple units for their mid-level staff in International City,” said Alwadiya.

“The Motor City development, too, has witnessed an increase in occupancy rates from end-users and tenants seeking affordable and value-for-money residential units. Influx of people from neighbouring emirates, such as Sharjah, Ajman and Abu Dhabi, has further fuelled growth in occupancy rates within the development.”

دبي: النمو السكاني المحرك الرئيسي للإيجار

تباينت توقعات المراقبين في السوق العقاري في السوق المحلي بدبي حول حركة منحنى أسعار إيجارات الوحدات السكنية بناء على الموقع وتميز

الخدمات، حيث توقعوا أن تشهد أسعار إيجارات الوحدات السكنية الجاهزة للمشاريع المطورة التي تتميز من ناحية الموقع والخدمات، استقراراً نسبياً يعقبه نمو هامشي مع نهاية العام الحالي وبداية العام المقبل . كما توقعوا أن تشهد معدلات الإيجار في مناطق أخرى في دبي المزيد من الانخفاض التدريجي بنحو 10-15% لنهاية العام الحالي وبداية العام المقبل. وهذا الانخفاض متوقع أن يكون ذا أثر أكبر في المناطق التي تتوافق أسعارها مع ميزانيات الأفراد ذوي الدخل المتوسط.

أشار المراقبون إلى أن الربع الثالث من العام 2009 كان واعدا أكثر من الربعين الأول والثاني من العام نفسه، مؤكدين أن المحرك الرئيسي لأداء معدلات التأجير العقاري هو النمو السكاني الذي يتولد عن نشاط صحي في القطاعات التجارية المختلفة، وقامت الحكومة والجهات المختصة بتنفيذ عدد من المبادرات البناءة لتثبت أن دبي لاتزال الموقع المثالي لعقد الصفقات والأعمال .

ولا يزال قطاع إيجارات المساكن يترقب انتهاء مرحلة التنقلات والهجرة الداخلية بين مناطق الامارة نفسها ومن الامارات الأخرى القريبة اليها لصياغة معادلة السوق الجديد وتحديد نقطة الاستقرار وما ترتكز عليه من حيث القيمة السعرية والمناطق الأكثر اقبالاً .

وفي الوقت ذاته، عولت مصادر عقارية على عامل التأخر في تسليم الوحدات السكنية في كثير من الشركات لاستقرار السوق وتماسك الأسعار، الا أن ظواهر السوق تؤكد حجم الفجوة بين طرفي العرض والطلب خاصة في مناطق التملك الحر بدبي، وهذا سيلجم أي قفزات سعرية غير مبررة لفترة زمنية معقولة .

وشهد السوق خلال الفترة التصحيحية التي بدأت منذ أكثر من عام، تغيرا جذريا في توجه الكثير من المستأجرين خاصة في ظل المستويات السعرية المشجعة على الشراء الذين باتوا يفضلونه ويعطونه الأولوية على حساب الاستئجار تحسبا لأي مفاجآت في هذا المجال مستقبلا .

وأوضح مهند الوادية، المدير الإداري لشركة “هاربور” للوساطة العقارية، أن حركة أسعار الإيجارات للفترة المقبلة حتى نهاية العام وبداية العام المقبل ستشهد تبايناً بين المناطق بناء على أمرين أساسيين هما الموقع والخدمات، حيث يتوقع أن تشهد أسعار إيجارات الوحدات السكنية الجاهزة للمشاريع المطورة التي تتميز من ناحية الموقع والخدمات استقراراً نسبياً يعقبه نمو هامشي مع نهاية العام الحالي وبداية العام المقبل، مثل مشروع مرسى دبي، ونخلة الجميرا، ووسط مدينة برج دبي، وتلال الإمارات .

وأوضح الوادية أن المحرك الرئيسي لأداء معدلات التأجير العقاري هو النمو السكاني الذي يتولد عن نشاط صحي في القطاعات التجارية المختلفة . وقد قامت الحكومة والجهات المختصة بتنفذ عدد من المبادرات البناءة لتثبت أن دبي لاتزال الموقع المثالي لعقد الصفقات والأعمال .

وأكد المدير الإداري في “هاربور” للوساطة العقارية أهمية عامل معدل النمو السكاني في دبي من أجل تلبية العرض المتوقع وملء العقارات الشاغرة التي سلمت خلال الأشهر ال 12 الماضية . وقد قدرت مصادر مختلفة أن انخفاض عدد السكان بسبب الركود الاقتصادي سيصل إلى نسبة تتراوح بين 8% أو 20% بين سنة 2009 و2010 .

وكانت غرفة دبي للتجارة قد قامت بالمبادرة الثانية، بحيث طرحت فكرة إلغاء النظام الحالي بضرورة وجود كفيل للشركات الأجنبية الراغبة في إقامة شركات في دبي . وإذا وافق المجلس التنفيذي على هذه الرؤية الطموحة فإن مكانة دبي وثقة المستثمرين ستتعززان .

وقالت شركة لاندمارك الاستشارية إنها لاحظت ظهور مؤشرات مبكرة على استقرار سوق الإيجارات في بعض المناطق في دبي في حين تستمر الإيجارات بالارتفاع في مناطق أخرى .

وتصف لاندمارك هذه الزيادة الهامشية في أسعار الإيجارات وهي ناجمة عن العدد الكبير من العقود المنتهية بالزيادة ب”غير المستدامة”، إذ إن هذا الكم الكبير من عقود الإيجارات المنتهية خلال الفترة الماضية سيؤدي إلى اضطراب وتشويه مؤقت في المعروض بعد فترة من الطلب القوي .

وكانت الإيجارات في دبي قد انخفضت بشكل كبير على مر الأشهر الخمسة الماضية، إلا أنه وعلى الرغم من ذلك، كان هناك بعض الاستثناءات لهذا التوجه، إذ تشهد بعض أنواع الوحدات العقارية في المشاريع العقارية المميزة والمفضلة أداء جيداً .

وازدادت أسعار الإيجار الخاصة بالشقق ذات النوعية الجيدة في منطقة دبي مارينا (مرسى دبي) بنسبة 11% للشقق المؤلفة من غرفة النوم الواحدة، وبنسبة 6 في المائة للشقق المؤلفة من غرفتي نوم، في حين عادت أسعار الإيجار الخاصة بالفلل ذات الثلاث وأربع غرف في منطقة المرابع العربية والفلل المؤلفة من ثلاثة غرف نوم في نخلة الجميرا لأسعار شهر مارس ،2009 أو ازدادت بشكل هامشي في بعض الحالات .

وتتوقع “لاندمارك” أن تشهد كافة المناطق السكنية في دبي المزيد من التقلبات، خصوصاً مع زيادة المعروض من الوحدات السكنية على مر الأشهر ال 12 إلى ال24 شهراً القادمة .

وقالت إنه في حال انخفضت الإيجارات أكثر في هذه المناطق فإنه يتوقع المزيد من الطلب على الانتقال من مناطق إلى مناطق أخرى بهدف التحديث بالإضافة إلى اعتماد الملاك لاستراتيجيات تسعير جديدة . وبالطبع فإن هذا الطلب على الانتقال سيساعد في التخفيف من حدة أية انخفاضات إضافية في الإيجارات .

العرض المتوفر بنهاية 2009

توقعت شركة “هاربور” للوساطة العقارية، أن يدخل السوق العقاري في دبي نحو 30% من أصل حوالي 000 .36 وحدة كان متوقعا أن يتم تسليمها بحلول نهاية عام ،2009 وذلك بدافع الظروف الاقتصادية الحالية التي أدت إلى نقص في السيولة لدعم برامج تطوير المشاريع وإلى مبيعات أقل، أو شبه معدومة، عندما يتعلق الأمر ببيع العقارات عن الخارطة .

كما يتوقع أن يكون العرض الفائض على الوحدات السكنية والمساحات المكتبية أكثر المواضيع سخونة في عام ،2010 بغض النظر عن توقيت عملية الانتعاش؛ حيث يقدر وصول عدد الوحدات السكنية إلى 60،000 وحدة، بحلول نهاية 2011 .

ويشير البحث الذي أجرته شركة “هاربور” للوساطة العقارية إلى أنه خلال العامين القادمين سيتم تسليم حوالي 10،200 وحدة في مشروعي أبراج بحيرات جميرا “جميرا ليك تاورز” ومرسى دبي “دبي مارينا” .

ويتوقع زيادة العرض أيضا عند تسليم المزيد من الوحدات في مناطق أخرى “مدينة دبي الرياضية”، و”موتور سيتي”، و”جميرا فيليج ساوث”، و”النخلة جميرا”، و”الخليج التجاري” بالإضافة إلى انتهاء برج دبي في الفصل الأول لعام 2010 .

مـالكو شقق يـشكون المبالغة في رسوم الصيـا

مـالكو شقق يـشكون المبالغة في رسوم الصيـانـة

المجمعات السكنية المطورة من قبل مطورين رئيسين تشمل تكاليف عديدة يصعب أحياناً تحديد المسؤول عنها.
اشتكى مالكو شقق وعقارات في دبي من مبالغة شركات تطوير عقاري في فرض رسوم الصيانة على عقاراتهم، موضحين أن انخفاض أسعار مواد البناء والتضخم بشكل عام خلال العام الجاري لم ينعكس على تسعيرة تلك الرسوم.

وطالبوا بمعيار حكومي يحد من الارتفاعات المبالغ فيها لأسعار الصيانة ، وإلزام المطورين بإطلاع الملاك على الفواتير الحقيقية لعمليات الصيانة.

إلى ذلك، طالب تقرير عقاري حديث بسرعة تطبيق قانون الملكية المشتركة على المشروعات العقارية في دبي، مشيراً إلى أهمية معالجة عنصري جمعية الملاك واحتساب مصروفات الخدمات اللذين يمثلان أحد أهم المشكلات التي يواجهها ملاك العقارات في الإمارة. ودعا إلى ضرورة أن توضح عقود الشراء أو صكوك الملكية رسوم الخدمة السنوية عند عملية الشراء المبدئية لتجنب أي انتكاسات في عملية الانتعاش في سوق دبي العقارية مستقبلاً.

تقييم حكومي

وتفصيلاً، قالت المالكة في إحدى بنايات منطقة مرسى دبي، فرح إبراهيم، إنها تضطر لدفع ما يصل إلى 11.8 درهماً للقدم المربعة مصروفات للصيانة للشركة المطورة للمشروع، موضحة أن «هذا المبلغ يمكن اعتباره منطقياً في ظل أسعار التضخم التي شهدتها البلاد بين عامي 2006 و،2007 لكن مع تراجع معدلات التضخم وهبوط أسعار مواد البناء خلال العام الجاري، فإن أسعار الصيانة أيضاً انخفضت، وهو ما يعني ضرورة خفض مصروفات الخدمات ووضع معيار لتقييمها من قبل دائرة الأراضي والأملاك في دبي».

وأضافت أن «بعض البنايات المجاورة لبنايتنا يبلغ سعر خدمات الصيانة فيها نحو 15 درهماً للقدم المربعة، وهو رقم مرتفع»، واستطردت «لابد أن تتدخل دائرة الأراضي لتصنيف المباني وفرض مصروفات الصيانة وفقاً للتصنيف، كما أن هناك ضرورة لوضع سقف لزيادة تلك المصروفات، وإلزام المطورين بإطلاع الملاك على الفواتير الحقيقية لأعمال الصيانة في المشروعات».

من جهته، قال المالك في منطقة «ديسكفري غاردنز» توفيق عزاوي، إنه اشترى استوديو في تلك المنطقة بتمويل يصل إلى 60 ألفاً سنوياً، ومع تراجع أسعار الإيجارات قام بتأجيره مفروشاً بنحو 60 ألف درهم سنوياً، لكنه يضطر لدفع مصروفات صيانة للشركة المطورة بنحو 18.8 درهماً للقدم المربعة في الاستوديو البالغة مساحته الإجمالية 637 قدماً مربعة، ما يجعل خسارته السنوية تصل إلى 12 ألف درهم جراء استثماره في هذا الاستوديو».

وقال إن «الشركة المطورة فرضت علي دفع مصروفات التبريد لمدخل الاستوديو، كما أن مصروفات الصيانة لم تكن مذكورة في عقد الشراء، ولم أتسلم بعد عقد الملكية النهائي على الرغم من حصول المطور على مصروفات التسجيل لدى دائرة الأراضي».

تحديد المسؤولية

إلى ذلك، قال تقرير فصلي صادر عن شركة «هاربور» العقارية إن «المجمعات السكنية المطورة من قبل مطورين رئيسين تشمل تكاليف عديدة يصعب أحياناً تحديد من المسؤول عنها، مثل الرسوم المتعلقة بالمرافق المحيطة، وتبريد المناطق».

وتساءل التقرير «هل يتوقع من ملاك الوحدات السكنية دفع الرسوم المتعلقة بمحال التجزئة المتضمنة في المشروع؟».

ودعا إلى ضرورة أن توضح عقود الشراء أو صكوك الملكية رسوم الخدمة السنوية عند عملية الشراء المبدئية ومعالجة تلك المسألة بطريقة سريعة وبناءة لتجنب أي انتكاسات في عملية الانتعاش في سوق دبي العقاري.

وكانت دائرة الأراضي والأملاك في دبي كشفت في وقت سابق عن اعتماد السلطات المختصة في الإمارة لقانون الملكية المشتركة للشقق السكنية والطبقات بهدف تنظيم السوق العقارية، وترسيخ ثقة المستثمرين بها، ووضع تعاملاتها كافة في إطار قانوني يحفظ حقوق جميع الأطراف، ويسهم في نضج السوق وجذب الاستثمارات.

ولم يتسن لـ«الإمارات اليوم» الحصول على رد من الدائرة بشأن إصدار اللوائح التنظيمية لقانون الملكية المشتركة.

وقال تقرير «هاربور» إنه «للقضاء على أي شك يحيط بموضوع صيانة الممتلكات يجب تطبيق قانون الملكية العقارية المشتركة في السوق العقارية في أقرب وقت ممكن». ولفت إلى أنه «عند تنفيذ القانون، فإنه سيحمل الملاك مسؤولية صيانة البناء، عن طريق إنشاء «جمعية الملاك»، التي من خلالها لا يعد المطور مسؤولاً عن تقديم هذه الخدمات إلا إذا قررت جمعية الملاك توظيف المطور للقيام بها».

وأكد أنه «على الرغم من تأثير رسوم الخدمات السنوي في القيمة المضافة على رأس المال وعوائد الإيجار السنوية، فمن المدهش أن بعض أصحاب المصالح الأساسيين في سوق العقارات يتجنبون التعامل مع هذا الموضوع الحرج وحل الغموض المحيط به»، ولفت إلى أن «معظم مطوري المشروعات العقارية التي لاتزال قيد الإنشاء لن يوفروا تفاصيل كافية عن رسوم الخدمات المتوقعة للقدم المربعة الواحدة حتى اكتمال المشروع.

كما ان معظم المشترين والبائعين، وحتى السماسرة، لا يطرحون هذا الموضوع إلا عند المراحل النهائية من عملية التفاوض». وكشف أنه «في الوقت الذي يخضع فيه المستثمرون والمالكون للضغط بسبب التباطؤ الاقتصادي العالمي، ازداد اهتمامهم بتأثير رسوم الخدمات السنوية على ممتلكاتهم وثرواتهم الشخصية».

رسوم كبيرة

ووفقاً لدراسة حديثة أجراها فريق البحوث الخاص لدى «هاربور»، تبين أن معدل رسوم الخدمات السنوية يبلغ نحو 16 درهماً للقدم المربعة الواحدة في دبي، وبذلك فإن مالك شقة مؤلفة من غرفتي نوم مساحتها تقدر بنحو 1800 قدم مربعة سيدفع 28.8 ألف درهم سنوياً، مع الوضع في الاعتبار أنه لن تطبق أي زيادة نسبية سنوية على رسوم الخدمات.

وقال التقرير إن «المعدلات لا تعكس الواقع، فمن العقارات التي شملتها الدراسة، وصلت أعلى رسوم خدمات للقدم المربعة إلى 22 درهماً في المشروعات الراقية في جميع أنحاء دبي، بما في ذلك وسط مدينة برج دبي»، ما يعني أن مالك الشقة التي تصل مساحتها إلى 1800 قدم مربعة في منطقة راقية سيصل مبلغ رسوم الخدمات السنوي المترتب عليه إلى 39.6 ألف درهم سنوياً».وأشار إلى أن «أدنى رسوم تم رصدها كانت في منطقة «ذا غرينز» الروضة، إذ بلغ متوسطها 11 درهماً للقدم المربعة». وكانت مجموعة دبي للعقارات، خفضت أسعار الخدمات لملاك مشروع «جميرا بيتش ريزيدنس» من 21.5 درهماً للقدم المربعة لتصل إلى 15.3 درهماً في الربع الثاني من العام الجاري، وقال تقرير (هاربور) «حتى مع تثبيت السعر الجديد لم يُسرّ العديد من سكان المنطقة، خصوصاً عند مقارنتها بالسعر الأساسي الذي كان 9.5 دراهم».

خدمات الفلل

وفي السياق ذاته، بلــغ متوسـط رســوم الخدمات للفلل داخــل المجمعــات 2.5 درهم للقدم المربعة، والذي يحسب بناء على المساحة الكلية للأرض.

ويعد مشروع «نخلة جميرا» الأعلى من حيث رسوم الخدمات، التي تتراوح بين أربعة وخمسة دراهم للقدم المربعة، فيما يعد مجمع السهول «ذا ميدوز» الأدنى سعراً إذ يبلغ 1.16 درهم للقدم المربعة لبعض الفلل. وقال التقرير «يبدو هذا المبلغ منخفضاً جداً لبعض الفلل في مجمع البحيرات «ذا ليكس» مثلا، الذي يطالب بأكثر من ضعف هذا المبلغ وهو 2.6 درهم». وأكد أن «القضايا المحيطة برسوم الخدمات لا تتوقف فقط على الرسوم ذاتها، فانعدام الشفافية في الكشف عن تفاصيل النفقات، ومستوى ونوعية الخدمات المقدمة، والإرباك الناتج عن الغموض حول ما تغطيه الرسوم، أدى إلى سخط الكثيرين».
مشروعات الخريطة

قال المدير العام لشركة هاربور للاستشارات العقارية، مهند الوادية، إن «مشروعات عدة بيعت على الخريطة من قبل الشركات المطورة من دون أن تشمل رسوم الخدمات عند البيع، ما خلف مئات المستثمرين الذين يجهلون مقدارالرسوم، وجعل عملية تحديد العائدات على الاستثمارات المحتملة مهمة صعبة عليهم».

وأضاف «يعد ذلك عنصر شك جديداً في بيئة يسيطر عليها عدم الاستقرار، فعند النظر في شراء العقارات، يفضل المستثمر شراء الوحدات السكنية الجاهزة واضحة الرسوم على شراء العقارات من على الخريطة».

How mergers could save the property and financial sectors

Mohanad Al Wadiya, Managing Director of Harbor Real Estate Brokerage, shares his thoughts on upcoming mergers

For many players in the local market, mergers and acquisitions appear to be a logical solution to stay afloat during the global financial crisis. Opinion is divided as to whether these mergers and acquisitions will have a positive or negative impact in the short and medium terms, and it is too early at this stage to predict success or failure. Nevertheless, it seems clear that without these actions, the result would be a freeze in financing facilities and diminishing activity in the property sector, which would have an adverse effect on the overall economy.

Within the financial sector, these kinds of mergers really started as early as last year. It all began when Amlak and Tamweel announced a merger to create Emirates Development Bank in November 2008. The new bank will have access to federal funds and hopes to strengthen the UAE’s home finance sector. The merger news gained considerable media attention and created veryhigh expectations.

In terms of property development, we have seen similar mergers within the last year. Dubai World, the major property and ports conglomerate, recently consolidated its management and property operations of Leisurecorp, Dubai Maritime City, and the Dubai Multi Commodities Centre, all of which it owns. The property divisions of these companies will now be run by Nakheel, another property arm of Dubai World.

There is also continued discussion of a merger between Deyaar Development and Union Properties, with news about the latter having liquidity problems and losing its long-time chief executive recently.

While these developments are important for the sector, the most significant merger in the region is currently being discussed between Dubai Holdings’ ‘Big 3’ companies and Emaar, a most popular developer in the Middle East. Dubai Properties, Tatweer, and Sama Dubai—collectively known as ‘The Big 3’—are fully-owned subsidiariesof Dubai Holding Commercial Operations, a holding company of Dubai Holding Group with total assets of Dh126bn at the end of 2008, as quotes by Emaar.

There is a growing consensus among the officials involved that allowing healthy businesses to acquire companies in jeopardy of failing could stabilise the economy by bolstering confidence in both the financial and property sectors. For some of these companies, merging with a partner that has a strong balance sheet is a pressing and essential step in preventing dissolution. Other benefits include leveraging economies of scale and having stronger negotiation positions with regard to suppliers and contractors. The mergers will allow companies to work together to achieve long-term, strategic benefits by uniting complementary businesses into a single, sufficient and more successful operation. For the property sector, these mergers will also allow consolidated companies to have better control of the overall supply introduced into the marketplace and the quality of the products and services offered. This will definitely have a positive impact on the market in the long run.

On the other hand, there are concerns that these mergers will place heavy burdens on the stronger companies
involved. These partners are not just taking over assets, but may also be inheriting large liabilities and debts. Furthermore, these mergers are likely to generate a lot of uncertainty among the investors and shareholders involved. Investors might have to accept further delays until these mergers are finalised, and will then have to evaluate the impact of the mergers on their investment.

Whatever the impact, the number of mergers involving financial and property organisations is increasing. For these new companies, the ability to provide prompt, transparent, and practical information that guide all stakeholders through the merger process and expected outcomes could make the difference between success and failure from the public’s point of view.

Meadows, Jumeirah Islands top sales transactions

Villlas in The Meadows, Jumeirah Islands and Arabian Ranches have seen increased sales transactions in the past one month. Among apartment buildings, Dubai Marina, Jumeirah Beach Residence (JBR), Downtown Burj Dubai and Jumeirah Lake Towers (JLT) have recorded the maximum number of sales transactions.

“Among villas, Meadows, Jumeirah Islands, Arabian ranches recorded the highest transactions, while from an apartment perspective, Dubai Marina, JBR, Downtown Burj Dubai and JLT have recorded the highest transaction,” Peter Penhall, Chief Executive, Gowealthy.

Gowealthy recorded 20 per cent incremental growth in transactions for November, from October figures.

Vineet Kumar, Head of Sales, Asteco Property Management, said: “The top three residential areas, which have witnessed the most transactional activity in the month of November for apartments sales, have been The Palm Jumeirah, Dubai Marina and Downtown Burj Dubai areas. “The locations which witnessed the most transactional activity in the month of November for villa sales are The Emirates Living Area, Arabian Ranches and The Green Community.”

Kumar said the total number of transactions Asteco supported in the month of November was 48 individual sales. However, some of these transactions were single investors purchasing multiple units so the overall unit numbers were higher than this.”

Liz O’Connor, Director-Residential Sales and Leasing, said: “From a sales perspective, among the villas, Springs/Meadows, Jumeirah Village, Jumeirah Islands stood apart and in the apartments category, it were Downtown Burj Dubai, Jumeirah Beach Residence and Dubai Marina.

“From a rental perspective, Emirates Living [Springs, Meadows, JLT, Discovery Gardens, Jumeirah Village], Marina [JBR, Marina], Dubai Land [Arabian Ranches, Motor City, Sports City] have recorded high number of transactions.”

The sales were about 40 and leases are about 250, according to Better Homes.

According to Mohanad Alwadiya, Managing Director, Harbor Real Estate, Emirates Hills Third and Palm Jumeirah are the areas that have recorded maximum transactions.

According to Penhall, predominantly South Asian (Indians, followed by Pakistanis) have invested into these areas. The GCC nationals form the next largest set, followed by South East Asians/Chinese. “Most of them were end users and finance buyers,” he added.

According to Kumar, the buyer profile has been predominantly the end user. However, there were a few buyers based overseas who have bought properties for rental income purposes with a view to holding their real estate assets for the mid-term (5-7 years). “The buyers on these projects were mixture of individuals from the GCC countries, Russia, India, Pakistan and Western Europe,” he said.

O’Connor said these areas have mostly seen end-users, pre-qualified for a mortgage but those who have access to additional funds to cover the difference if the evaluation of the property was less. We deal with many cash buyers who are looking for the best priced properties in today’s market.”

With respect to price floor in these areas, Penhall said that for a higher trading areas such as well-located villas in Meadows and apartments in certain towers at Marina, expectations are being met to a large extent due to the relatively higher availability and demand parameters. “The selling prices are neither too far out of present reach-market getting more matured, buyers and sellers are getting quite pragmatic on their price expectation factors.”

He added that however, the point to be noted here is that currently, price factors are an indication of distress levels of individual sellers and should not necessarily be construed as a market price index for a particular type of property in a particular community.

Kumar said the sales activity on these projects have tended to revolve around the owners and sellers of properties who have purchased them in the years prior 2008. “Typically these properties can be sold in today’s market with some expectation of premium,” said Kumar.

Alwadiya said mixed nationalities of end-users and investors have invested into these areas. “In general, buyers are more demanding and careful nowadays compared to last year and the previous years and hence they do enough due diligence before purchasing any properties.”

According to Better Homes, the buyer is always looking for the best priced property/value for money.

“We have not seen major prices changes sine the last three month – prices have stabilized in certain areas and you can always find very well priced properties in all areas of Dubai,” she said.

Investors hunt for bargains

Investors hunt for bargains after debt scare

Property sales enquiries have picked up, despite Dubai World’s request to creditors for an extension of debt repayments for its subsidiaries, Nakheel and Limitless, say real estate agents.

Mohanad Alwadiya, managing director of Harbor Real Estate, believes the hike in interest is a result of the debt crisis. “Since the Dubai World announcement, we have recorded a noticeable increase in the number of queries from private and institutional investors who are interested in taking advantage of the impact that the announcement may have on the overall prices of property in Dubai and in Nakheel developments in specific.”

Aditya Awtani, of Fine and Country UAE, has also witnessed a surge in investor interest. “We have already noticed in the last few days that vulture investors are pooling together, forming informal/quasi funds, in order to take advantage of the so-called distress situation.”

Although the Dubai World request caused global markets to plunge and attracted criticism in the international press, Alwadiya feels the situation has been overblown. However, he feels the incident has affected investor confidence. “Since the beginning of the economic crisis, consumers and investors have been extremely cautious. Whether we like it or not, they are fragile. The old adage of ‘once bitten twice shy’ will never be as apt as in the next few months. It is as much understandable as it is unavoidable. Simply put, many people have been hurt by the Dubai real estate crash and they don’t want to be hurt again. In effect, they have lost confidence and trust in the industry and have developed a risk aversion which will take some time to overcome. The recent request by Dubai World for an extension on debt repayment timings, resulting in speculative press coverage around the world regarding Dubai’s ability to avoid defaulting on its debts, will further erode confidence in the emirate. We definitely feel that the international media is blowing this news out of proportion but unfortunately, perception is reality and a major effort will be required to reverse world opinion.”

Aditya says investors with the means should shop around, “It’s a great time if you are a cash buyer, because banks are anticipated to get more tight-fisted, as they will come under pressure in a bid to keep a safety net due to their exposure to Dubai World.”

Myles Bush, managing director, PowerHouse Properties, thinks the debt issue is unlikely to stop the market from rebounding. “I believe in Dubai and am very confident about its property market in the long term.”

Secret Agents

Fania Telyaeva
Company: Asteco Property Management
First job: An accountant at a contracting company
Number of years in real estate: Three
First sale: A two bedroom flat in the Ajman 1 project.
Most difficult sale: During the crisis when everything was working against us.
Hottest property in the UAE: Palm Jumeirah and Downtown Burj Dubai.
Key to success: Positive attitude, persistence and learning from past mistakes.

Mohanad Alwadiya
Company: Harbor Real Estate
First job: Communications director at Leo Burnett
Number of years in real estate: Five
First sale: A two bedroom with study unit at The Greens in 2005.
Most difficult sale: Selling 41 units to an institutional investor during August-September 2009, the peak of the global financial storm
Hottest property in the UAE: The Address Hotel in Downtown Burj Dubai
Key to your success: A passion for perfection.

Andrew Covill
Company: LLJ Property
First job: Doing sales and rentals at a UK real estate company
Number of years in real estate: 20
First sale: A client in the UK turned up at the last minute and loved the property so much we agreed on a deal instantly.
Most difficult sale: A substantial bulk development purchase in London which took me all across the country before finalising the deal with the client.
Hottest property in the UAE: Marina Square, Sky Tower, Al Bandar, Al Muneera and Al Reef Villas, all in Abu Dhabi.
Key to your success: An open approach, professionalism, a determination to see deals through and a desire to have satisfied clients

Livia Anzaldo
Company: Fine & Country
First job: Sales director
Number of years in real estate: Almost three
First sale: October 2008, Jumeirah Village South apartment during Cityscape. Although it was a very small sale, during the downturn and I had been in the city for only one month.
Most difficult sale: A commercial unit in JLT. It was my first commercial sale and I was unaware of the rules attached to a sale of this kind.
Hottest property in the UAE: Victory Heights
Key to your success: A genuine passion for real estate, matching clients’ requirements, getting positive feedback from sellers and buyers, being able to listen to clients’ needs and creating trust.

Dawn Draper
Company: The Oryx Corporation
First job: With my father’s property development company
Number of years in real estate: 30
First sale: An off-plan apartment near Canary Wharf. I’d gone to meet the client to talk about a new design of a staircase. But he liked the area so much he decided to buy.
Most difficult sale: A property in the UK where the solicitor failed to spot a dispute between the developer and the council. It took over a year to get the sale through.
Hottest property in the UAE: Victory Heights villas and Emirates Hills
Key to your success: Build trust with your clients and never forget it’s their money you are spending.

Julie Morgan
Company: Ocean View Real Estate
First job: Leasing consultant for a UK-based company
Number of years in real estate: Four
First sale: A signature villa on Palm Jumeirah for Dh22 million in April 2008
Most difficult sale: I had a difficult time selling a Shoreline Apartment this year due to both the buyer and seller being in and out of Dubai on business.
Hottest property in the UAE: Arabian Ranches, Victory Heights and Palm Jumeirah.
Key to your success: Strong communication with my clients.

Sam Hussain
Company: Sherwoods Independent Property Consultants
First job: At Wind Property Developers
Number of years in real estate: Three
First sale: 38 units in the Mogul cluster in Discovery Gardens.
Most difficult sale: Selling the 51st floor in Lilac Tower at Al Qudra. I eventually sold it for Dh26 million.
Hottest property in the UAE: The one-bedroom units at Burj Views, and the apartments in Marina Quays.
Key to your success: Hard work, determination and mentorship from my managing director
Iseeb Rehman.

Susan Brand
Company: Better Homes
First job: Lecturer in physical education, University of Pretoria, South Africa
Number of years in real estate: Four
First sale: A studio in International City
Most difficult sale: While standing in for another agent a deal on a Green Community villa
was linked with a chain of three transactions. After much stress, we finally closed what had become the most stressful sale in the history of my career.
Hottest property in the UAE: Palm Jumeirah.
Key to your success: Work seven days a week, 24 hours a day. I want my clients to feel they have been given the best service and deal of their lives

Hesham El Far
Company: Coldwell Banker UAE
First job: At Nile Investments, now known as Naeem Holding
Number of years in real estate: Eight
First sale: A three bedroom apartment in Nasr City, Cairo.
Most difficult sale: Selling the hotel in the Onyx development in Dubai.
Hottest property in the UAE: Emaar towers in Dubai Marina.
Key to your success: Willpower

Claire Collier
Company: In Style Real Estate
First job: Junior reporter for a UK newspaper
Number of years in real estate:Ten
First sale: A one bedroom apartment in Hampstead, London, for £350,000 (Dh2.1million).
Most difficult sale: It once took me over a year to agree, exchange and complete on a repossessed studio apartment in Primrose Hill, North London.
Hottest property in the UAE: Tiara Residence on Palm Jumeirah and the Burj Dubai.
Key to success: Honesty, integrity, transparency, having a good network in the UAE and having experienced and seasoned directors as mentors are all invaluable

Making owners pay service charges a major challenge

A lack of transparency over the cost of maintaining a building, low quality standards and services and confusion over what is covered by service charges have angered owners and led to many refusing to pay the charges, say industry sources.

Adrian Quinn, Chairman of Dubai-based strata management firm Essential Community Management, said that if a building has service fee arrears of 40 per cent, it would not be possible to continue maintaining it internally or externally.

The available funds would have to be used to make payments to the Dubai Electricity and Water Authority, insurance companies, master developers and district cooling suppliers.

Essential Community provide strata management services to more than 40 developers in Dubai and has worked with master developers Emaar and Nakheel.

Quinn said the major challenge for the strata sector in Dubai is making owners pay the building service fees.

“The delay in the enforcement of the strata law is allowing many owners to avoid paying their strata service fees,” he added. “This is due to many developers not wanting to – or not knowing how to – recover the outstanding service fees via the terms and conditions of their contracts of sale.

“Most contracts allow for the developer to sell the apartment or villa in the event of non-payment and also recover all the legal costs and penalties.”

According to a recent survey by Dubai-based real estate broker Harbor Real Estate, the average annual service charges for buildings across Dubai are Dh16 per square foot.

“The highest service charges recorded were in and around Downtown Burj Dubai at about Dh22 per sq ft, while the lowest were in the Greens at Dh11 per sq ft,” said Harbor Managing Director, Mohanad Alwadiya.

“Consumers are no longer able to ignore the pinch of the economic downturn and investors and owner-occupiers alike are starting to evaluate very carefully the impact of service charges on the financial performance of their property and their own personal wealth.”

The survey, shared exclusively with Emirate Business, reveals that the overall average charge for villa communities is Dh2.5 per sq ft calculated on the overall plot size. Charges for villas are highest on The Palm Jumeirah, where the highest are between Dh4 and Dh5 per sq ft. “The lowest price is about Dh1.16 per sq ft for some of the villas in the Meadows community. This is broken down into Dh1.03 per sq ft for the general fund, Dh0.05 per sq ft for the capital reserve fund and Dh0.08 per sq ft for the master community levy,” said Alwadiya.

He said many developers who sold off-plan properties had not calculated the service charges at the time of sale, leaving many investors not knowing what the fees would be until the buildings were handed over.

“This makes it difficult for investors to determine the yield estimates on potential investments and adds a further element of uncertainty in an already uncertain environment. When buyers are considering purchasing properties, a unit that is complete with fees already apparent is more appealing than an off-plan transaction,” said Alwadiya.

“The majority of developers of projects that are still under construction do not provide service charge figures until the building is completed. On the other hand, most buyers and sellers, and even brokers, will not mention this important subject until the final stages of the negotiation process.”

Walid Jaafar, a partner at the Dubai-based Fichte & Co Legal Consultancy, said the official gazette announcement of Law No27 of 2007 on Ownership of Jointly Owned Properties in Dubai – the strata law – was published on December 31, 2007. Article 33 of the law says the legislation will come into effect within three months of the date of publication – ie on April 1, 2008.

“However, the law has still to be implemented,” said Jaafar. “The law does not address the issue of tenants. The law is intended to regularise the relationship between the owners of units in a specific development.

“This matter is usually left to the owner and the tenant to agree on. However, in practice, unless agreed otherwise between the parties in a tenancy agreement, the service fees should be covered by the owner.”

Fichte & Co has not yet seen any cases involving disputes over unpaid service fees, but does not exclude the possibility that a few are being reviewed by courts.

“In the absence of a regulatory law and the absence of any owners’ associations, the only possibility to file such cases lies in the hands of the master-developers or the sub-developers,” said Jaafar. “The claims in such a case would be based on the sale and purchase agreements and the master declarations attached to them.”

Quinn said that, once implemented, the strata law would create more transparency within owners’ associations. “If a building does not use all the budgeted funds in a year, the owners at the annual general assembly would have the right to decrease the next year’s budget or transfer the funds into the sinking fund,” he added.

The law makes it mandatory for every strata to have a 10-year sinking fund to ensure that money is set aside to pay for long-term capital expenditure.

“We at Essential Community automatically create a 20- or 25-year sinking fund to ensure all major plant and equipment are properly budgeted for on normal lifecycle cost structures.”

A strata general manager is appointed by the landlords of the building to create a draft budget, which is then reviewed by a board.

“After it has been approved by the board it is sent to all owners before the annual general assembly and is then approved there,” said Quinn. “After the meeting has approved all the agenda items it is then up to the strata general manager to enact all the motions and ensure they are carried out.”

Quinn said the most important duties of a strata manager are to oversee the facilities management companies to ensure they and their sub-contractors carry out the jobs they are contracted to do.

“There is a major conflict of interest if a strata management company has its own facilities management company,” he added.

Landlords will control what the owners’ association does and how it spends funds through the elected board.

“This means that the individual landlords will have some power in what the service fees will be and be able to rectify things. The enforcement of the strata law will make it possible to split buildings into multiple cost structures,” said Quinn.

“The first is the master cost structure, which would pay the master community service fees, buildings insurance, essential service costs, the managers’ fees, the facilities managers’ fees, district cooling charges, etc.

“The second cost structure would be the residential component of the building, so it would pay all the costs for the specifically residential component, for example lifts, foyers, gyms, pools and car parks. The third cost structure could be then the commercial portion of the building and cover all the commercial areas.”

Jaafar said: “When the owners have control of their buildings they will, through their board, review complaints of tenants and issues to ensure a good relationship is maintained.

“At present a tenant may have problems and issues with the building he is in, but the developer does not want to know about it or does not understand what they need to do to rectify them. There are some developers that are doing a good job in running their buildings, but everyone still has problems with conflicts of interest issues on maintenance items.”

Jaafar said according to Article 25 (2) of the strata law, if a unit owner fails to pay the service fees, the manager of the owner’s association would take action against the owner three months after notifying him through the notary public, enforceable by the execution judge in any competent court.

“However, the unit owner may object to this decision within the three-month period. In such a case, the execution shall be withheld until a decision in the subject of the objection has been reached.” Meanwhile, analysts called for the strata law to be enforced as soon as possible.

Nicole Betts, Senior Manager of Asteco Association Management, said that while Dubai awaited the regulations that supported the jointly-owned property law, Asteco had been working for several years with a number of high-profile clients well ahead of the implementation of the law.

“We have been helping companies establish informal owner associations, set up service charge and budgeting models, set community rules as well as facility management and service provider selection procedures based on best international practices,” she said.

“Some companies are actively encouraging owners to take control for themselves – albeit at this stage this has to be done under the developer’s name.

“A good example is the MAG Group which is dedicated to transparency. We have worked with them from conception of their MAG 214 Jumeirah Lakes Towers project through to delivering onsite management services to an informal owners’ association. Our team works closely with the owners’ management board to assist them to preserve, maintain and enhance the tower.”

Mohammed Nimer, Chief Executive Officer of MAG Group Property Development, said: “We have always operated in an environment of transparency, so it was natural for our company to introduce best practice in property management to enable owners to truly run their own buildings.”

Asteco has also been working with another developer for the V3 Tower, also located at Jumeirah Lakes, where handover to owners commenced recently.

“Our role is to administer day-to-day operations and assist in the formation of an informal owners’ association and a management board,” added Betts.

استقرار نسبي في أسعار العقارات

محللون: سوق دبي لاتزال جاذبة وتحمل كثيراً من الفرص

استقرار نسبي في أسعار العقارات
المصدر: سامح عوض الله – دبي
التاريخ: الإثنين, ديسمبر 07, 2009
جريدة الإمارات اليوم
أكد عقاريون أن أسعار العقارات في دبي شهدت استقراراً نسبياً خلال الشهرين الماضيين، إذ تذبذبت بشكل طفيف في نطاق 5٪ ارتفاعاً وانخفاضاً. وطالبوا المطوّرين في الإمارة بمزيد من المرونة، وإجراء خفض طوعي لأسعار العقارات.

وقال المدير التنفيذي لشركة «الفوائد العقارية»، وليد الزرعوني، إن «أسعار العقارات في إمارة دبي شهدت تذبذباً سعرياً في نطاق 5٪ انخفاضاً وارتفاعاً». ودعا الشركات العقارية إلى خفض أسعارها حتى تعيد الثقة بينها وبين المستثمرين»، معتبراً أن «قاعدة العرض والطلب لا تحكم السوق في مجملها، فهناك بعض العقارات زادت أسعارها على معدلات ما بعد حدوث الأزمة المالية العالمية، مثل أسعار الفلل في (نخلة جميرا) ذات الأربع غرف التي تراجعت إلى أربعة ملايين درهم في بداية الأزمة، ثم ارتدّت مرة أخرى إلى سبعة ملايين درهم في الوقت الراهن»، لكنه أكد أن «السوق العقارية في دبي لاتزال تحمل كثيراً من الفرص».

من جانبه، أفاد المدير التنفيذي لشركة الاستشارات العقارية «سي بي ريتشارد أليس»، نيكولاس ماكلين، بأن «الدعاية السلبية التي قامت بها وسائل إعلام غربية ضد دبي، خلال الأيام الماضية، على خلفية قيام شركة (دبي العالمية) بتأجيل سداد استحقاقات سندات لها، ليس لها أي تأثير مباشر في أسعار العقارات على المدى القصير». وتوقع أن تشهد السوق العقارية في الإمارة تراجعاً جديداً في أسعار العقارات السكنية، أما العقارات التجارية فسيكون التأثير فيها طفيفاً جداً.

ولفت إلى أن «العرض والطلب لايزالان العاملين الأساسيين المحددين للأسعار في السوق العقارية، خصوصاً في العقارات السكنية التي يزيد الطلب عليها مع زيادة تأسيس الشركات في دبي، التي تكون مضطرة للشراء أو الاستئجار لتسكين موظفيها». وأوضح أن «الطلب الآن يعبّر عن الطلب الحقيقي، فالمستثمرون المضاربون الذين حركوا السوق في الأعوام الماضية، اختفوا وبقي الآن المستثمرون الفعليون الذين يريدون الاستثمار في مشروعات جاهزة». وذكر ماكلين أن «أسعار العقارات السكنية مرشحة لمزيد من الهبوط على المدى القصير، أما على المدى الطويل، فمازالت دبي سوقاً جاذبة لكل من العقارات السكنية والتجارية».

إلى ذلك، توقّع الرئيس التنفيذي لشركة «هاربور» العقارية، مهند الوادية، أن يتواصل الاستقرار الذي شهدته نهاية الربع الأخير، خصوصاً في المشروعات المكتملة، لكنه رجّح من جهة أخرى انخفاضاً مرحلياً في أسعار العقارات التي سيتم تسليمها قريباً، وأرجع السبب في ذلك إلى «عدم توافر السيولة لدى بعض المُلاك لإتمام الدفعات المستحقة عند التسليم».

وأضاف أن «معادلة الطلب والعرض لها تأثير مباشر في حركة السوق على مستوى الأفراد والقطاعات، لكن هنالك عوامل أخرى لها تأثير في أداء سوق العقارات، ومنها: توافر السيولة، والشفافية بين جميع الأطراف في السوق، وقوة البنية التحتية القانونية».

وأوضح أن «خفض الشركات العقارية الأسعار بطريقة عشوائية ليس حلاً مضموناً لزيادة الطلب، إلا أنه يجب على شركات التطوير أن تعيد النظر في أسعارها الحالية والاستراتيجيات المتبعة لوضع تلك الأسعار بما يتناسب مع الوضع الحالي للسوق، مع الأخذ في الاعتبار مستويات ربح منطقية، وتوفير عوامل جذب للمستثمرين، وتوفير خدمة للزبائن (قبل وبعد البيع) باحترافية».

Burj Dubai units to see stable long-term growth

Long-term prospects for investors in the Burj Dubai tower are relatively solid if they have paid a fair price, with expected appreciation of 10 to 15 per cent per annum over the time, believe realty experts.

In a survey conducted by Emirates Business, Mike Atwell, Head of Middle East Operations, Cushman & Wakefield; Matthew Green, Associate Director, CB Richard Ellis (CBRE), Middle East; Adel Hamaizia, Sales and Marketing Director, RE/MAX Abu Dhabi, Mohanad Alwadiya, Managing Director, Harbor Real Estate; Chet Riley, Equity Research, Middle East, Nomura International, and Venkateshwaran Ramadoss, Senior Research Analyst, Real Estate Department, Kuwait Financial Centre, said iconic buildings are attractive to both investors and occupiers, but the building’s success depends on the supply and demand dynamics in the market.

Emaar Chairman Mohammed Alabbar has said Burj Dubai will open on January 4, 2010 to coincide with the four-year anniversary of accession to power by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

Experts said returns on quality assets have always been there. However, investors have to take a long-term view on property and move away from the speculative model that has evolved in Dubai.

Is buying commercial or residential units in Burj Dubai a wise choice today since prices have bottomed out?

Atwell: Although the property market within Dubai has witnessed a significant price correction this year, we believe it is still too early to say whether prices have bottomed out. A degree of uncertainty remains in the market, caused by a number of factors including lack of available debt financing, potential over-supply and quantifying end-user demand.

Green: If we look in isolation at current prices over 2008 levels, then it certainly looks an attractive investment. However, we must remember that the market has changed significantly over the last 12 months and investors can no longer assume double-digit annual growth rates. During the period demand has weakened substantially, pushing vacancy rates higher and adding to the risk of unit voids. Investment decisions within the current market climate will thus vary, dependant on the overriding driver. Those looking for buy-to-let properties are likely to be more cautious considering weaker demand levels, while those looking at owner occupier assets are likely to be more bullish.

Hamaizia: Yes, as the saying goes “what goes up must come down”, and in this context vice-versa. Major cities of the world (mostly now mature) have all seen cycles of which crazy, semi or mini booms witnessed crazy prices that came down substantially. For example, half or less/50 per cent down –London in the early 90s, Singapore more recently… but subsequently observed a stable recovery, typically reaching at least 75-85 per cent of peak times.

Alwadiya: Investment recommendations are unique for each client and are directly linked to the structure of returns that an investor is seeking in a project. In reality, those clients who paid extremely high prices for Burj properties in 2008 will not enjoy initial healthy return on investment (RoI) per annum – as rental prices continue to drop as a result of the global economic crisis. Some may receive as little as two per cent return on investment in their first year or two. However, those investors who are instead seeking the benefits of long-term capital appreciation and are able to wait for 10 years, enduring lower RoI per annum, will be handsomely rewarded for their patience. I personally believe the price of the Burj will continue to grow at a promising rate over the next 10 years making it an extremely worthwhile investment over other projects.

We were against the investment in the Burj last year due to the rapid price escalation that was seen in the project in 2008 but we will definitely recommend investing currently to capitalise on the excellent prices that are currently on offer and the expected capital appreciation that will be generated as soon as the tower is launched.

Riley: The Burj Dubai is already, and will remain, an iconic building and the focal point for the downtown area. As such residential space should normally have additional intrinsic value and demand but we still believe any investment in real estate should be undertaken for the long term. The choice to buy (or lease) commercial space has to be made considering a number of different variables depending on use. For example, rental levels and potential yields, service charges, tenant demand and expected occupancy, which all ultimately drive capital values. We believe in the long-term prospects of Dubai considering the positioning and infrastructure spend to date. This gives the emirate a lead over regional counterparts, so we believe there will always be a long-term demand for high quality property.

Ramadoss: An analysis of Colliers International’s Q3 2009 foreign ownership house price index suggests prices for properties under construction in Downtown Burj Dubai increased by 15 per cent, while excluding this, the index contracts. This is essentially the premium assigned to the development approaching completion which got captured. While prices appeared to have bottomed out in general, these are not clear signals of a complete turnaround as prices could track down should there be a market- wide contraction. Hence, it would be appropriate to buy if the intention is to have a stable income potential or to bet on the extent of premium that is still left to be priced.

Do you believe the tower offers a good investment proposition for long-term inventors?

Atwell: The Burj Dubai is well located, being within close proximity of the existing and future key CBD areas – DIFC, Sheikh Zayed Road and Business Bay. It is also well serviced by other amenities, including surrounding hotels, Souk Al Bahar and Dubai Mall. The Burj Dubai is an iconic building and will be the tallest man-made structure ever built. It is in a prime location and forms the centrepiece of Downtown Dubai, a large-scale masterplan development that will include more than 30,000 residential units, Dubai Mall, nine hotels and commercial space. The building itself will contain 175-key Armani hotel plus Armani Apartments, an additional 700 apartments and office space, although how much remains unclear. Iconic buildings are attractive to both investors and occupiers. However, the building’s success will ultimately depend on the supply and demand dynamics in the market, pricing and the underlying property fundamentals. Other key factors will include the operational efficiency of the building, which is dependent on but not limited to the building management system, lifts, parking, accessibility, public transport and how the strata management company is run.

Green: Returns on quality assets are there to be had, but investors need to start taking a more long-term view on property and move away from the speculative model that has evolved in Dubai. When choosing an asset to invest in, it is important to select a product that has a genuine lasting prospect for returns. The Burj Dubai will offer a prestigious address within the world’s tallest tower, a superior product quality, world-class facilities, and, importantly, it should also be well managed. All these factors would suggest the long-term prospects for investors are relatively solid, assuming a fair price is paid.

Hamaizia: Prices of property situated in proximity to, or that are a part of any signature or world famous building tend to hold value (long term) or are semi-immune to economics or exogenous shocks… be it London, Paris, New York or Dubai for that matter (due to views, footfall/tourism, shopping or financial districts or interest in that structure from an arts or architectural perspective).

Alwadiya: The Burj Dubai tower has all the factors that will set it for success: iconic design, excellent location, exceptional finishes, first-rate facilities, fantastic mix of assets. Any investment in a tower of this calibre is viable now and will continue to be well into the future.

Riley: Investors with long-term investment horizons have generally done well from property across most international markets, but as we have recently seen both residential and commercial property markets are subject to cycles, which can have some large swings. As the market becomes more established in Dubai, cycles should start to stretch longer and become less volatile. Previously speculative gains were driving the market, but we expect to see investment returns at much lower levels than those seen during the construction phase. One of the core tenets of property investment is its lower risk nature, but ultimately this equates to lower returns. Good quality property should deliver stable investment income with some capital appreciation, which is what long-term investors are generally looking for.

Ramadoss: Such towers often get a prestige value attached to them and would be a low-risk/low-return investment option as they tend to be pricey. The advantage is in its lower volatility as prices tend to contract at a smaller multiple relative to the market, as is the case with a typical ultra high-end developments. However, one needs to assess the extent of premium by comparing it with peer developments across the globe as in the current scenario, it could attract speculative interests as well.

What kind of appreciation can one expect in the long term, say five to 10 years?

Atwell: Capital growth is dependent on both rents and yields, which are in turn affected by numerous other factors. We cannot forecast anticipated appreciation over the long term. However, we would anticipate yields will sharpen from the double digit expected returns that we see today.

Green: If we consider the rapid change in Dubai over the last five years, then you can see the pitfalls of predicting the future in such an un-transparent environment. The Dubai market needs a period of stability so that investors can start to regain some of the confidence lost as a result of the downturn. Only after this is achieved can we really start to look for any level of price growth.

Hamaizia: As aforementioned, real estate history of the New Yorks, Singapores and Londons of this world, have always seen a stable recovery (back to at least 75-85 per cent of peak times within five years), when infrastructure, employment, investment and other city value-adding activities are taking place, supporting or present.

Alwadiya: The Burj is by far one of the best investments currently available for those investors who are able to wait for capital growth as opposed to initial return on investment per annum. It is likely that we will see a significant increase in the amount of unit trading following the tower launch in January. The Burj will continue to retain its value after its launch, and will increase its financial value/appreciate over time with an estimated rate of 10-15 per cent per annum. If you compare its price to the different towers around the world that once held the title of “the tallest”, you will see that they still today command an average price of over Dh10,000 per square foot. This is a far cry from what we are experiencing in today’s market where we are seeing the Burj command a price of less than half that amount.

Riley: We expect the level of capital appreciation to be relatively moderate in the short term. Over a five to 10 year horizon, we would normally expect moderate capital appreciation of perhaps five per cent per annum for this type of property, but this also depends on economic factors and conditions such as inflation. Generally speaking, Dubai’s residential and commercial properties are both linked to the economic cycle, perhaps more so than established markets, because the population base is more transitory. So this is a consideration for investors. Ultimately the ‘buy to let’ investor group will determine the market value so rents should establish the valuation floor.

Ramadoss: Longer-term price appreciation would tend to reflect the market level price appreciation. However, the price behaviour would be similar to the performance of a low beta stock comparedto the market average price change.