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EMAAR… THE BUILDER OF ICONS

By: Mohanad Alwadiya
Published: Property Times
Dated: May 2016

Since 1997, Emaar Properties has been pioneering the development of Dubai real estate by continually and consistently conceptualizing, designing and constructing quality master-planned communities across the emirate.

So integral has Emaar Properties been to the growth and development of Dubai that its own growth and emergence as one of the world’s most valuable and respected real estate development companies has been virtually synchronous with the emergence of Dubai as one of the world’s great cities.

By delivering established communities such as Arabian Ranches, Emirates Living, and Dubai Marina, Emaar has played a major role in establishing the bedrock for supporting the lifestyle that Dubai offers today. But all that was eclipsed when it delivered its flagship development, Downtown Dubai, home to the iconic Burj Khalifa, The Dubai Mall and The Dubai Fountain. Not only did it provide what is now the world’s leading lifestyle destination, but it also reshaped Dubai’s skyline forever, and gave it a profile which is recognized around the world.

And that skyline is about to change significantly, once again, with the announcement of the construction of a stunning new architectural icon, the latest exciting development by Emaar.

The icon will simply be known as “The Tower” and its design was chosen by His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, a design which draws inspiration from the lily and evokes the image of a minaret, which is a common feature and distinctive aspect of Islamic culture and architecture.

The location of The Tower is an important reminder of Dubai’s past as it will be constructed on the Dubai Creek, the cradle of Dubai’s history and culture. This astute choice of location will forever mark the origin of Dubai and remind all of the humble beginnings of what has now become a remarkable story of vision and growth, amply demonstrated by the 6 square kilometers of world-class master-planned development that will have The Tower as its centerpiece.

Not only is the site historically significant, but it is also located in close proximity to the Ras Al Khor National Wildlife Sanctuary, protected under the UNESCO Ramsar Convention, and home to over 67 species of water birds.

And, as with all great icons, The Tower has a reason for being, and is envisioned to be of symbolic significance to, not only Dubai and the UAE, but also to global visitors hailing from all across the world.

Mohamed Alabbar, Chairman of Emaar Properties, said: “The Tower in Dubai Creek Harbour is our tribute to the positivity, energy and optimism that Dubai and the UAE celebrate, led by a leadership committed to all-round progress. A shining beacon of hope for the world, celebrating diversity and human achievements, this new iconic landmark further highlights the country’s ambition and futuristic vision, and enhances our nation’s pride. It will be the destination for the world to visit, enjoy and celebrate life, as Dubai prepares to host the Expo 2020.”

He also added: “It integrates, not just design excellence but also strong environmental and smart-tech considerations. With The Tower, we are delivering a compelling destination that will add long-term economic value to Dubai and the UAE. It will also position Dubai Creek Harbour as one of the most desired residential, leisure and touristic attractions, providing visitors and residents with a modern, luxurious and sustainable environment in which to live, work, learn and entertain.”

As an iconic structure, The Tower will provide a clear and bold symbol of a people’s culture, aspirations and ambitions. It will be representative of a vision of progress that has global relevance and benefit demonstrated through innovation, growth and development.

Every nation or great city has some symbolic architectural icon which helps to define either the history, vision, cultural values or characteristics of the people that inhabit it… whether it be the Statue of Liberty, The Eiffel Tower, The Shard in London, The Sydney Opera House, or even St. Basil’s Cathedral in Moscow… they are all symbols, and all of us have grown to accept those structures to be symbolic, in some way, of the cultures that they uniquely represent.

In my mind, I believe The Tower will represent the pride of a nation, an unmistakable reminder of what has and can be achieved regardless of how humble the beginning… of how people, corporations and governments, united by a shared vision, can play a role, share the burden and eventually mutually benefit from progress, and the desire to improve and achieve.

And it comes as no surprise to me that Emaar, with its pioneering spirit and continued significant contribution to the development of this amazing city of Dubai, should be the driving force behind this wonderful initiative, for it is Emaar, as an organization, that harbors and exhibits all the qualities that The Tower has been designed to symbolize.

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Ask the agent

Mohanad Alwadiya
Published: Gulf News Free Hold
Dated: 14th May, 2016

Question: I have an apartment I wish to rent out. Which would be a more practical approach, getting a rental agent or a property manager? I heard that property managers usually charge more, why is that?

If you are going to engage the services of a realtor, you would enter a leasing agreement assigning the real estate agency to locate suitable tenants for your apartments, facilitate the signing of the tenancy agreement, and leaving you to assume the responsibility and devote your time to managing the tenant and all aspects of the property thereafter. A property management agreement includes a lot more.

A competent property manager will provide an assessment, strategy and activity plan designed to harness the true financial potential of your property. Considerations include history, current market factors and risk factors, whether they be global, regional or local in nature requiring a good understanding of economic factors, industry knowledge extending to policy and regulation, finance and market dynamics.

An activity plan will be provided covering pricing and marketing, customer relationship management, tenant management and policy, cost management, maintenance supervision, communications and review schedules, status reporting, financial reporting and resourcing. All of these activities will be performed by the property manager under a property management agreement.

A professional property manager will make your investment work harder for you and the additional returns you receive will outweigh any fees he/she might charge, which means less headaches for you.

Question: I am 52 and planning for my retirement with Dubai in mind as a future part-time retirement destination. Right now, I want to invest in a property I can rent out, then use personally in the future during retirement. Is this a good strategy?

Including property as part of your retirement plan is a sound investment decision and a safe bet to ensure you maximize whatever you savings or wealth you possess at this time. The key to choosing your property is determining the right balance between the amount to be invested, the returns you require in the interim period before you retire, and what type of property you want to enjoy in your retirement.

As the property will eventually be for your own use, you need to determine what you will enjoy in your retirement. The good news is, your tastes are likely to be shared by your tenants in the interim so renting should not be a problem.

Quality properties are available starting from AED 700 per sq.ft., but if you want to purchase in the prime areas of Dubai such as Downtown Burj Khalifa, somewhere close to the beach or with a golf course view, you can easily double or triple that amount. The choices are varied, and getting what works for you is certainly achievable.

You can expect a minimum net rental return of around 5% to 7% which, given the cheap financing available at the moment, makes for a solid investment in preparation for outright ownership and retirement. But be careful with fluctuations in exchange rates.

Factors such as location, the developer’s track record, building quality, service fees, building management and the existence of a functioning owner’s association will require a reputable local real estate professional to help you minimize any risks with your investment, whether during the procurement stage or managing your investment until you are ready to assume occupancy during retirement.

Question: What property characteristics should I, as a buyer, pay close attention to in order minimize any risks associated with my investment decision?

An old adage in real estate says “location, location, location” – as it is the first factor to consider and can drive up to 90% of any property’s value. The more established and prestigious locations such as The Palm, Downtown, Dubai Marina and JBR fared extremely well in the post-GFC period, and secondary, more affordable areas such as JLT, The Greens, Sports City, Discovery Gardens and International City followed suit.

But there are other factors as well. The quality of the end-product and maintenance services, and the extent of completion and quality of infrastructure should also be part of any investment consideration. With so much upcoming supply, buyers can demand, seek out and purchase the best of what is on offer.

Value for money and superior ROI must be considered very closely especially if you are an investment buyer. In the post-recession era, the chase for yield along with an increase in the level of critical assessment of true values has meant that properties that offer more in way of physical product and potential rental returns are attracting the greatest attention.

Current and future supply levels of various asset types need to be examined so consulting a reputable property broker to assist you is a must. For example, villas as an asset type, across-the-board, have outperformed other asset types because of supply shortages. However, when looking at the inventory pipeline, this may not be the case always as more affordable properties are likely to be in higher demand – a trend we are already experiencing.

But one thing is certain, it is the fundamental drivers of market values which remain, i.e. location, product features and benefits, product quality and demand and supply.

QUESTION: Can you please share some information on Dubai property management fees?

Like most services, property management fees would vary depending on the service provider. It may be anywhere between 3% and 6% of the rental receipts, and some will charge an administrative fee as well.

You need to know and understand what you can expect from your property manager as the depth and breadth of services provided by them in Dubai can vary greatly.

You can negotiate a fee structure based upon your actual requirements. We have had many clients who went with the cheapest on offer, with an ill-defined scope of services and, sadly but almost predictably, had very poor experience, resulting in all sorts of tenant problems, maintenance deficiencies, missed revenue, and generally poor advice with regard to marketing and obtaining the best returns from their property.

A competent property manager will provide an assessment, strategy and activity plan designed to harness the true financial potential of your property.

Depending on the size and complexity of your portfolio, you should have, as a minimum, a rolling 5-year activity plan which covers pricing and marketing, tenant management and policy, cost management and maintenance schedules. A competent property manager will also provide you with communications and review schedules, status reporting formats and regular financial reporting.

Ask for referrals and make sure you follow up with some existing clients to get an appreciation of levels of efficiency and professionalism.

Question: What would be the consequences if we hire a property manager who does not have the relevant property management license?

The property management practice has risen in importance since the last GFC made it harder for real estate brokerages to generate revenue from transactional services alone. In addition, demand for property management expertise grew rapidly as investors started to realise that investing in property is not a “set and forget” proposition, and requires constant attention as factors influencing its performance as an investment are as broad as they are complex.

You need professional help to manage your property investment, particularly during times when yield is harder to generate. Your property manager must ensure that you maximize returns from your property portfolio while operating within the law.

Your property manager should be licensed, experienced and have a strong history of successfully managing properties. If you knowingly engage a person or organization who does not possess the correct license to manage properties, you are essentially aiding that person or organization to operate outside the law which places you in an awkward position should something go wrong.

In addition, if you have a legal dispute of any kind regarding your investment properties, any involvement of the non-licensed party that you have managed to manage your property will place your legal position in jeopardy.

It takes only a little effort to check on the licensing status of any organisation by referring your query to RERA, the regulatory authority for real estate professionals in Dubai. Remember, it is better to be certain than shoot arrows in the dark – especially when it involves investing your trust and hard-earned money in any business venture.

A towering vision

By Mohanad Alwadiya,
Published: Gulf Property

Dubai’s dynamic, ever-changing landscape, a constant in the continuously developing emirate, is a characteristic of the city well-known the world over. From the opulent halls of the Burj Al Arab and the graceful fronds of the Palm Jumeirah, to the tallest skyscraper that is Burj Khalifa, the architectural and engineering feats Dubai is famous for seem to have no limits.

Such achievements in the field of architecture and engineering prove how important property development is to real estate, and to the general economy. Emaar Properties, one of the UAE’s most respected property developers, has been pioneering the development of Dubai real estate since 1997, by continually and consistently conceptualizing, designing and constructing quality master-planned communities across the emirate.

And that skyline is about to change significantly, once again, with the announcement of the construction of a stunning new architectural icon, the latest exciting development by Emaar.

The Tower is set to become a landmark representing the pride of a nation, an unmistakable reminder of what has and can be achieved when people, corporations and governments, united by a shared vision, move together, inspired by the desire to move forward and march into the future.

And it comes as no surprise, then, that Emaar, with its pioneering spirit and continued significant contributions to the development of this amazing city, should be the driving force behind this wonderful initiative, while it continues, as a company, to help develop and reshape the face of Dubai.

عقاريون اعتبروه انتقائياً ويركّز على مساحات صغيرة ومتوسطة في مراكز تسوّق قائمة ووجهات جديدة طلب قوي يدعم ارتفاع إيجارات مساحات التجزئة خلال 2016

أكد عقاريون وجود طلب قوي على مساحات التجزئة في دبي، ما حافظ على استقرار الأسعار في القطاع، مقابل تراجع بقية الفئات الإيجارية، من وحدات سكنية ومكاتب تجارية.

وأوضحوا، لـ«الإمارات اليوم»، أن الطلب على مساحات التجزئة بدبي انتقائي بحسب النشاط التجاري، ويركز على المساحات الصغيرة والمتوسطة في مراكز تسوق ووجهات قائمة، فضلاً عن وجهات جديدة مثل «سيتي ووك»، لافتين إلى أن قوائم الانتظار أسهمت في تحفيز كبار المطورين على إضافة توسعات للمراكز التجارية والمولات، وضخ مزيد من الاستثمارات. وتوقعوا إمكانية ارتفاع الأسعار في الفترة المقبلة، على الرغم من المساحات الجديدة التي تدخل السوق، مؤكدين أن الطلب الكبير على مساحات التجزئة، في العديد من الوجهات الجديدة في دبي، يحافظ على استقرار الإيجارات، ويدفع بها نحو الارتفاع مجدداً.

طلب قوي

وتفصيلاً، قال المدير التنفيذي لشركة «الرواد» للاستشارات العقارية، إسماعيل الحمادي، إن عقارات قطاع التجزئة شهدت استقراراً في معدلات أسعار التأجير، خلال عام 2015، متوقعاً ارتفاع الأسعار خلال العام الجاري، مدعومة بطلب قوي على العديد من مساحات التجزئة في مراكز التسوق الكبيرة.

ولفت إلى أن قوائم الانتظار أسهمت في تحفيز كبار المطورين على إضافة توسعات للمراكز التجارية والمولات. وأكد الحمادي أن مركز التسوق الجيد يؤسس مجتمعاً عمرانياً من حوله، ويرفع قيمة العقارات في نطاق منطقته المقام فيها، مستشهداً على ذلك بمركز تسوق «سيتي سنتر معيصم».

وأضاف أن المطورين العقاريين أصبحوا مدركين أن التصميم الجيد لمركز التسوق، يمكن أن يعود بالنفع على بقية العقارات، التي تطورها الشركة ذاتها في محيط المركز.

وأشار الحمادي إلى عوامل عدة، تركت أثراً إيجابياً في قطاع التجزئة، منها الأداء الاقتصادي الجيد للإمارة، وزيادة عدد السكان، وازدهار السياحة، مبيناً أنه على الرغم من دخول مساحات كبيرة للتجزئة، فإن النشاط الاقتصادي الذي تشهده دبي استوعبها.

وذكر أن الطلب الكبير على مساحات التجزئة، في العديد من الوجهات الجديدة في دبي، مثل المرحلة الثانية من «سيتي ووك»، سيحافظ على استقرار الإيجارات، بلويدفع بها نحو الارتفاع مجدداً.

استقرار الأسعار

بدوره، رأى المدير الإداري في شركة «هاربور» العقارية، مهند الوادية، أن الطلب القوي على مساحات التجزئة في دبي، حافظ على استقرار الأسعار في القطاع، مقابل تراجع بقية الفئات الإيجارية، في الفترة الأخيرة، من وحدات سكنية ومكاتب تجارية.

وتوقع الوادية إمكانية ارتفاع الأسعار في الفترة المقبلة، على الرغم من المساحات الجديدة التي تدخل السوق، لاسيما في مراكز التسوق، التي شهدت العديد من التوسعات، أخيراً، بالتزامن مع ازدياد أعداد الشركات الراغبة في الاستئجار على قوائم الانتظار.

نشاط اقتصادي

وتابع الوادية: «هناك وفرة معروض عقاري في قطاع التجزئة، وعلى الرغم من ذلك فإن النشاط الاقتصادي الذي تشهده دبي قادر على استيعاب هذه الزيادة، خصوصاً ما يتعلق بمساحات التجزئة الصغيرة والمتوسطة»، لافتاً إلى وجود طلب كبير على مساحات التجزئة، في مناطق مثل «جميرا بيتش ريزدينس»، إذ أصبحت المحال التجارية ذات العدد المحدود من الطاولات، هي الأكثر طلباً في هذه المناطق، لتحل مكان المحال والمطاعم الكبيرة، وظهر مفهوم جديدة يسمى «ريتيل ميكس»، وهو يجمع أنواع التسوق كافة في منطقة عمرانية محددة، تخدم المحيط السكاني الخاص بهذه المنطقة.

طلب انتقائي

وقال الوادية إن الطلب على مساحات التجزئة في دبي انتقائي، بحسب النشاط التجاري والمساحة، إذ ازدادت الطلبات الإيجارية الواردة من محال تجارية تستهدف شرائح كبيرة من السكان، وخفت في المقابل طلبات مستثمرين، يعملون في تجارة السلع الفاخرة. وأوضح أن الطلب على قطاع التجزئة تركز على المساحات الصغيرة والمتوسطة دون الكبيرة، مشيراً إلى أن هذا واضح جداً في المشروعات التي تطورها شركتا «مراس» و«وصل»، والتي تستهدف إنشاء مجمعات سكنية صغيرة متكاملة مع وفرة مناطق التسوق بها، ما يجعل سلاسل المتاجر تتنافس للوجود في هذه المناطق، منها «كارفور» و«شويترام» و«سبينس».

مزيد من الاستثمارات

من جانبه، قال الرئيس التنفيذي لشركة «ستاندرد» لإدارة العقارات، عبدالكريم الملا، إن «الطلب على قطاع التجزئة تركز على المساحات الصغيرة والمتوسطة، التي تستهدف النشاطات ذات الشعبية، خصوصاً في مراكز التسوق، إذ ازداد الطلب من قبل مستأجري هذه الأماكن، مقارنةبتراجع في الطلب من قبل الذين يعملون في السلع الفاخرة على سبيل المثال، ما عوّض التراجع في هذه الفئة». وأكد أن زيادة الطلب أسهمت في زيادة ضخ المطورين العقاريين مزيداً من الاستثمارات في مراكز التسوق الكبيرة.

link: http://www.emaratalyoum.com/business/local/2016-05-07-1.894508

The race for the sky is not over in Dubai

By Mohanad Alwadiya
Published in Gulf News Freehold

It is the beauty, grandeur and special significance of landmarks and monuments that continue to withstand the ravages of time – characteristics which make them timeless in appeal, and transform them into global icons.

Not to be missed, of course, are the socio-cultural impact and economic benefits of having monuments and landmarks in a place, city or country. After all, their building or restoration already spurs economic activity and, with the end product, can lead to some form of socio-cultural revitalization.

Every nation or great city has some symbolic architectural icon which helps define either the history, vision, cultural values or characteristics of the people that inhabit it… whether it be the Statue of Liberty in New York, The Eiffel Tower in Paris, The Shard in London, The Sydney Opera House, or even St. Basil’s Cathedral in Moscow… they are all symbols, and all of us have grown to accept those structures to be symbolic, in some way, of the cultures that they uniquely represent.

Dubai’s dynamic, ever-changing landscape, a constant in the continuously developing emirate, is a characteristic of the city known the world over. From the opulent halls of the Burj Al Arab and the graceful fronds of the Palm Jumeirah, to the tallest skyscraper that is Burj Khalifa, the architectural and engineering feats Dubai is famous for seem to have no limits. Areas which were once all desert and sand are now teeming with people, businesses, and bustling with tourists.

Such achievements in the field of architecture and engineering prove how important property development is to real estate, and to the general economy. Emaar Properties, one of the UAE’s most respected property developers, after delivering established communities such as Arabian Ranches, Emirates Living, and Dubai Marina, has played a significant role in establishing the bedrock for supporting the lifestyle that Dubai offers today. But all that was eclipsed when it delivered its flagship development, Downtown Dubai, home to the iconic Burj Khalifa, The Dubai Mall and The Dubai Fountain. Not only did it provide what is now the world’s leading lifestyle destination, but it also reshaped Dubai’s skyline forever, and gave it a profile which is recognized around the world. And that skyline is about to change significantly, once again, with the recent announcement of the construction of a stunning new architectural icon, their latest exciting development.

The icon will simply be known as “The Tower” and its design was chosen by His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, and Prime Minister and Ruler of Dubai, a design which draws inspiration from the lily and evokes the image of a minaret, which is a common feature and distinctive aspect of Islamic culture and architecture.

And, as with all great icons, The Tower has a reason for being, and is envisioned to be of symbolic significance to, not only Dubai and the UAE, but to global visitors hailing from all across the world. Once The Tower is finished and unveiled in time for Expo 2020, taking inspiration from the Eiffel Tower which was built for the 1889 Paris Expo, it is envisioned to become another global landmark surpassing the boundaries time and culture.

Big shift to affordability – Property Weekly

Mohanad Alwadiya is the CEO of Harbor Real Estate, senior advisor and instructor at the Dubai Real Estate Institute – the official training and certification arm of the Dubai Land Department, and presenter/content producer of Memaar – the first-ever property reality TV program in the Middle East. He is also among the Top 10 best performing brokers in Dubai, and is considered one of the most celebrated and influential industry commentators today.

COMPANY

Tell us about your company.

Harbor Real Estate is an integrated real estate service provider offering holistic real estate services to individual and institutional clients

Harbor represents the new breed of passionate real estate professionals that develop innovative strategies derived from conclusions based on rigorous fact-based analyses tailored to deliver tangible results through the adoption and implementation of global best practices

With decades of experience, the Harbor team is truly exceptional, and has intensified its focus on what has delivered success to Harbor since its inception: absolute client satisfaction

Having built a team that is passionate while pragmatic,, creative while logical, and aggressive while accountable, the strength of Harbor Real Estate lies in its ability to create innovative solutions, and to work in partnership with clients as a trusted advisor and reliable executor of wealth-generating strategies.

Harbor aims to consistently set new industry benchmarks. With ISO 9001:2008 certification for its operational guidelines and processes, Harbor continually strives to set the highest standards of customer service

In 2015, Harbor Real Estate won the title of “Best Property Management Firm” in the UAE, and this was a great testament to our aspirations of being the leading property management firm focused on developing and growing institutional real estate funds. Our current portfolio is worth AED 14.8B.

What’s the best property deal you have had in the past one year?

Obtaining the exclusive property management rights for Emaar Business Park Building Nos. 2 & 4 which I have always considered as among the most iconic corporate addresses in Dubai.

How many new agents has your firm hired in the past year?

Our brokerage division is always growing, and we have hired over 20 new brokers in the last 12 months. We always have room for and actively seek experienced agents and property managers.

INDUSTRY

What is your outlook for the UAE property sector for 2016?

Dubai real estate has been undergoing a correction for some time now. We feel that the decline in values associated with that correction has halted or virtually halted in all market segments. In Q1 of 2016, we have already witnessed significant growth in investor activity and strong land sales. Both are leading indicators that the market is heading into its next cyclical phase. We at Harbor believe that by the end of 2016, the market will have entered its next phase of growth which is expected to accelerate as we draw ever closer to the Dubai World Expo in 2020.

What types of property are selling most in the market under the current circumstances?

The market has definitely shifted towards the affordable segment. We have witnessed a strong increase in demand for affordable properties from both end-users and investors as the value story is compelling. Gross rental yields of between 8% and 10% are still achievable in some areas.

What are some of the challenges unique to this market?

There are a few major challenges which are totally unique to the Dubai market. Real estate markets globally are feeling the effects of a general decline in global economic growth, and the ongoing issues associated with geo-political upheavals which exist on virtually every continent. The world is still, after some 8 years, trying to shake off the effects of the global financial crisis, and while some economies such as the US have fared reasonably, other major economies in Europe and Asia are still struggling with systemic issues. The resulting headlines affect consumer and investor confidence negatively, and we all know that confidence is a key prerequisite for growth in the industry.

What are the biggest mistakes you see buyers making when purchasing in the market that offers them good entry points such as the present Dubai property sector?

Being impatient and diverting from the 5 fundamentals of sound real estate investing.

1: Know why you want to invest in / own a property.

2: Set your objectives carefully as success in property investment or ownership can only be attained when (and if) those objectives of the investor have been realized. It’s as simple as that.

3: Think long term for your greatest success and happiness.

4: Know your stuff… engage others to help you, but do be prepared to assess their performance.

5: Eliminate risks by planning conservatively.

ADVICE

What would you advise people who want to buy? What would you advise people who want to sell?

For buyers, the affordable segment is still providing very good value.

For sellers… it’s a buyer’s market, so don’t sell unless you have a compelling reason to do so. Selling because of a market correction which is part of a normal cycle is both short-sighted and wasteful.

What is your advice to agents who are struggling to close deals in the current market? What is your success strategy to lock in deals even in difficult times?

Be realistic when valuing a property; no false promises just to get the business
Hold firm to realistic values
Carefully assess the financial impact of every offer and counter-offer as an offer can, at face value, seem unreasonable, but further analysis can dispel any doubts
Be innovative in seeking solutions
Create competition. Market the property aggressively to generate competing bids

TRAINING

What type of training is mandatory for new agents?

The Real Estate Regulatory Agency and the Dubai Real Estate Institute have set a mandatory certification program for new and experienced agents who wish to work in a real estate brokerage in Dubai. The Dubai Real Estate Institute also organizes license renewal courses and exams along with a very rich variety of career development programs that will help elevate the standards of professionalism and effectiveness of brokers in Dubai.

Does your firm have a designated trainer, perhaps the broker or another experienced agent who acts as a mentor for new agents?

Harbor has always been big on training and we know it pays a huge dividend. Every one of our agents and property managers receives extensive and tailor-made training. Our rigorous internal training program includes industry, soft skills and specialized training courses that help our employees attain mastery in all the macro and micro aspects of their profession. We offer over 30 training courses every year, and each consultant receives a customized training plan that will help enrich his or her knowledge and skills. All our senior directors, including myself, are involved in this dedication to training, and it is part of our annual KPIs and targets.

PERSONAL

What motivated you to pursue a career in real estate? How long have you been in Dubai and why did you choose to open a business here?

I have always been passionate about real estate, and I am thankful that Dubai has allowed me to utilise my entrepreneurial skills to pursue my dream of establishing a world-class organisation to thrive in such a wonderful industry. I am immensely proud of what we at Harbor have created.

I have been blessed to have been in Dubai for over 30 years. I am of a generation that has been extremely fortunate to have witnessed and been part of the amazing growth and development that Dubai is now famous for. Any entrepreneur would be short-sighted not to participate in this economic marvel if he had the chance!

How has the industry changed through the years? Which significant events in the industry have left an indelible impression on you?

The most significant changes have been made in the structural area, and these changes have mostly occurred after the last Global Financial Crisis.

The increasing levels of governance, oversight and scrutiny that the industry has undergone has been instrumental in driving confidence back into the industry. The ongoing development of the industry’s regulatory framework and implementation of laws and regulations to safeguard both consumer and investor interests, the overall industry and the economy at large from rampant and irresponsible speculative, predatory or unethical practices, reveals a mature and balanced approach to shaping an industry which exhibits sustainable growth over the long term. The “free for all” days of the past are long gone and investor, not speculator, confidence underpins the market performance.

The Global Financial Crisis taught the industry a lot. Looking back, many real estate companies were not structured to deal with the crisis and had operated during a period when selling property in Dubai required little or no effort, and even less business acumen or professionalism. It was a sellers’ market of a magnitude that has rarely been seen before, and is unlikely to be seen again.

The recession achieved what recessions typically do… reveal the flaws and weaknesses of those organizations that had been conducting business with a limited vision or a short-term perspective. While the short-term gains may have been exhilarating, it typically came at the expense of long-term survival.

Harbor survived because we quickly realized that everybody was in the same boat, and we needed to develop a competitive edge. After all, that is what a recession is all about… survival of the fittest. It was tough, and there were many sleepless nights during this period.

Obviously, we needed to adapt to survive. This required a brutally honest assessment of our capabilities as individuals, and the capability of Harbor to continue to provide the services that clients required, but within a totally new business context emanating from what was essentially economic turmoil on a global scale.

We needed to make sense of the chaos, and we determined that the market required new solutions to meet new challenges, and I think this is the greatest lesson that we learnt at Harbor. Innovation relevant to circumstance will always prevail regardless of the circumstances. If the market is hot or cold, innovation will always provide the competitive edge.

Ask the agent

Question: I have been in the UAE for a long time, and accumulated a portfolio of 17 apartments and a couple of villas located all over Dubai. Everyone knows that the market is on a slowdown so is there still a way to make any profit during this period?

There are too many investors who are under the illusion that investing in property is almost a “set and forget” proposition, but nothing could be further from the truth. The property industry is incredibly dynamic and requires constant attention as factors influencing its performance as an investment are as broad as they are complex.

Investing in property is no different to investing in any other asset. Its purpose is to create wealth but, in order to do that, it needs to be nurtured, maintained and managed just like any other investment. Ask yourself a question: Would you create a share portfolio without monitoring and managing its health and performance? Of course not, and having a property portfolio is no different.

With a portfolio this large, you need professional help to manage your property investment, particularly during times when yield is harder to generate. It requires careful thinking about what the true earnings potential of the portfolio really is, and what is the most efficient and effective way to go about realizing that potential. You need a good property manager who will ensure that you maximize returns from your property portfolio and enable your long term portfolio strategy to be realized.

Essentially your property manager should be capable of managing your business which just so happens to be a property portfolio. Remember, it’s your investment, and you need to ensure it’s in good hands providing you with the returns you expect with as little hassle as possible.

Choose wisely as once you appoint a property manager, your ultimate return on investment is largely in his hands.

QUESTION: I have a well-maintained 1-bedroom apartment in Queue Point, Liwan. When I purchased it, the selling rate was at AED 550 per sq.ft. Should I continue to rent it out or sell it now?

Properties located in non-prime areas such as Dubailand have been doing very well even in the current market scenario. Even in the recent past, we have witnessed the more affordable properties in the market, including those in Dubailand, doing quite well in terms of significant value growth and ongoing sales activity as there remains a supply gap in the truly “affordable” property segment.

As mid to upmarket property in prime locations have become unaffordable for some homebuyers and investors, people have turned to more reasonably-priced projects like Remraam, Skycourts, Queue Point, etc., which promise capital appreciation even in the current market climate. These developments are still young, and more growth and infrastructure development is still in the offing.

There is no doubt that you would still make some profit if you sold today; however, we expect values to still improve, especially as the infrastructure and landscaping around the development gets completed. I suggest you retain the apartment for at least the next 5 years as you will continue to benefit from superior capital growth and enjoy at least 8 percent net annual rental returns in the meantime.

Question: Am I right in thinking that rental rates are not as affected by the market slowdown as sale prices? I was expecting a big reduction in my rent but our landlord told us it will remain the same.

Yes, you are partly right. The current industry climate has affected sale prices more although rents have also fallen in certain areas which only means the market slowdown has varying effects on different areas and property types. Regarding your rent, what will determine whether the landlord can raise your rent or not is how your rental levels compare with the new and updated index.

You should familiarize yourself with Law 43 which was issued on 22/12/2013 and replaced Decree # 2 of 2011. It introduced certain restrictions with regard to the calculation and implementation of legally allowable rental increases.

Having said that, it does not set out to control the rental value of new contracts and where a property is to be let for the first time or to a new tenant, it is up to the owner and prospective tenant to agree as to how much rent should be charged for the property.

However, for your peace of mind, you can compare your rental rate to the current market rate by using the RERA rental increase calculator online by visiting: http://www.dubailand.gov.ae/English/Pages/Rental-Increase-calculator.aspx

While it has its limitations, it is a useful tool that is also being used by landlords as a reference point for determining rental rates.

Question: I have just received an offer from a bank representative to refinance my property. Is this an opportunity I should avail of or not?

Very easily, I can say the answer is YES, but only if it makes financial sense! In short, you need to make some quick but careful calculations.

There are some very attractive mortgage products in the marketplace with a few mortgage providers offering rates as low as 3.99% or even 3.49% which signals that competition among UAE banks for higher market share of the mortgage market is getting pretty intense.

There are a number of things you need to consider such as, is there an early payment penalty for your current mortgage? It may well be that you will need to pay a hefty fee to exit the existing contract.

While 3.99% is an attractive rate, how long are you guaranteed this attractive rate? Interest rates will eventually rise and this eventuality needs to be understood by mortgagors as the attractive 3.99% interest rate enjoyed today will, in all probability, be replaced with a significantly higher rate in 2 years’ time, requiring increased mortgage payments to cover the interest rate hike. You need to factor this into your financial planning.

Will you need to pay any establishment fees for your new mortgage contract? With the mortgage market becoming so competitive, you should be able to have any fees waived.

Finally, make sure you can pay out your new mortgage contract at a future point in time without any penalty. This is an unnecessary expense that you should not be burdened with.

Additional:

Question: I am coming from overseas and looking to rent a home. I heard about this thing called “district cooling.” What, exactly, does it mean?

District cooling for the provision of chilled water has emerged globally as a way to provide cooling to buildings in a more environmentally sensitive way. It is considered to provide great benefits in the long run and, in addition, helps in saving on the costs of electricity which will be reflected in lower DEWA bills of tenants.

You will find that most of the units which are serviced by chilled water district cooling are offered at slightly lower rental rates. However, you should enquire as to how your cooling charges will be calculated and enquire as to all the charges which are included in the cost. You may even ask existing tenants how much they are paying currently before you commit to a tenancy contract.

With regard to consumption charges, I am assuming you will have a BTU meter installed in your future apartment? If so, you will be billed directly by the cooling services provider based upon what you actually consume in terms of cooling. The more you use, the more you pay.

Having said that, the DEWA savings will be offset somewhat as you may incur an additional utility charge as some owners of units that are equipped with chilled water district cooling will be passed on the slightly higher utility charges that they incur which involves the remuneration of the capital costs of providing the infrastructure that delivers the chilled water to the unit. This charge will, in all likelihood, be calculated as a pro-rata of the actual consumption charges.

Nevertheless, in most cases, developers have managed to offer better value for money while helping protect the environment.

By Mohanad Alwadiya
CEO, Harbor Real Estate
Advisor & Instructor, Dubai Real Estate Institute (DREI)
Published in Freehold – Gulf News
Dated: 30 April, 2016

Ask the agent

ask the agent

By Mohanad Alwadiya
CEO, Harbor Real Estate
Advisor & Instructor, Dubai Real Estate Institute (DREI)
Published in Freehold – Gulf News
Dated: 9 April, 2016

Question: We’re a successful startup company and currently looking for office space with the best value? Should we rent or buy?

Congratulations on your successful venture! AT this stage, however, you would still be looking at keeping costs to a minimum until such time you become fully established in the market.

As you may very well know, the old cliché of “location, location, location” is critical. It’s all about proximity and the convenience and prestige that a well-chosen location can bring to your potential customers, staff and business associates. Currently, you will find great value, very affordable and well-constructed office space in Business Bay, which will cost you anywhere between AED 70 and AED 120 per square foot (higher for fully fitted space), but it will be pointless if the location is a hindrance to conducting your business. You need to choose your preferred location first, and work from there.

Think about purchasing your premises. It’s in your best interest to do a complete analysis to see if this option will work for you. We at Harbor have always advocated that, cash flow permitting, businesses acquire their own premises. If you are a business committed to operating long term in Dubai, it makes sense to own your office space, particularly if it is a well-negotiated purchase. There is no tax advantage in leasing in Dubai and, as long as your office space is appreciating, your balance sheet will look a whole lot better and grow stronger over time.

If you decide to lease your premises, try to get the best deal possible and lock it in for at least 3 to 5 years. Lease rates in Dubai will be on the increase, going forward, so make sure you take advantage of current rates.

Question: I came to the UAE with an objective to join real estate as I have several years of experience overseas under my sleeve. Can you advise me on how I can land myself a realtor’s job in a reputable company?

It is good to know that you plan on joining the local real estate sector with some experience. Nevertheless, each real estate environment is unique so I suggest you join a company that will enable you to fast track your learning.

Look for a full service company so you gain a greater understanding of what the UAE real estate business is all about, beyond the buying and selling of property.

The company you choose should value you as an individual and remunerate you appropriately. But they should also be prepared to invest in you by providing the types of learning experiences that come with formal training (mandatory to become a licensed agent in Dubai), and also in-house training. This may involve being assigned a mentor, be placed on an internal rotation scheme to enable a broader knowledge of the business to be developed or be given special projects that will facilitate your learning by encouraging you to seek answers and solutions yourself to enable you to complete the task at hand. Those companies that invest in hi-potential people, typically are those that succeed.

Finally, surround yourself with people who are passionate about the industry because passion is contagious, and it’s what sets the successful ones apart.

Question: How do I know for sure my property consultant is giving me the right advice?

In any relationship, whether it be personal or professional, trust is key. So if you have a nagging feeling that your property consultant is not representing your interests, have a meeting with him and request a justification and rationale for his recommendations and advice. To ascertain whether his justifications and rationale make sense, you should do some research yourself so you can verify the veracity of his claims and assertions. If you remain doubtful, seek an alternative as there are plenty of property consultants out there hungry for your business.

Getting a new consultant is not always the solution and you may want to rethink your criteria in choosing one so you develop rapport and trust in the long run.

Look for experience and passion – people who really enjoy what they are doing. The best way to find such professionals is to ask around. Seek out friends or peers who have recently conducted a real estate transaction and ask. Seek out the positive stories as well as the negative ones.

Find a consultant or agency that exhibits a breadth and depth of industry knowledge and expertise. When conducting initial meetings, make sure you assess how much the agency or its brokers actually know.

Look for longevity. Those that survived the recent recession must be good!

Look for a strong network of corporate, government and industry contacts. The consultant or agency that has good relationships with key industry stakeholders such as the major developers or authorities such as the Dubai Land Department, RERA, DEWA or Economic Department will be able to operate more efficiently and effectively.

And finally, look for an agency that has received some form of industry or peer recognition as they lend credence to the name and reputation of the realtor in question.

Question: We purchased a villa in Dubai back in 2009. However, instead of continuing to rent it out, my husband and I have decided that we want to go ahead and sell our property soon. How do we find a good seller’s agent?

There is a large number of licensed real estate brokers in Dubai, and the whole of UAE of course. But finding the right agent to sell your property is something you need to pay close attention to because getting the best person to represent you and your property out there is crucial to how quickly you can make a sale without compromising on your agreed-upon expectations.

Factors such as years of experience in the UAE property market, track record of success, an in-depth understanding of market trends, area expertise (especially in the neighborhood where your unit is located), client testimonials, level of commitment, passion, dedication, professionalism and honesty are important, not to mention the fact that he/she should also be a duly licensed RERA-certified real estate broker. Before committing to any realtor, make a list of all the questions you want answered first and see how they respond as doing so will help you gauge whether or not giving him/her your business is the best thing for you and your husband, and your property.

Question of the Week: I have been looking at Dubai (or the UAE) as a possible part-time destination during my retirement. Hence, I would like to purchase a property here, rent it out initially and later use the property myself during my retirement. Do you have any advice?

Including property acquisition as a part of your retirement plan is a good move, but you must choose wisely. The key to choosing your property is determining the right balance between the amount to be invested, the returns you require in the interim period before you retire, and what type of property you want to enjoy during your retirement. The good news here is your tastes are likely to be shared by your tenants in the interim so renting it out should not be a problem.

Quality properties are available starting from AED 700 per square foot; however if you want to purchase in the prime areas of Dubai, either in Downtown Dubai, or somewhere close to the beach, or with a golf course view, you can easily double or triple that amount.

You can expect a minimum net rental return of around 5 percent to 7 percent which, given the cheap financing available at the moment, makes for a solid investment in preparation for outright ownership and retirement. Be careful with fluctuations in exchange rates.

Factors such as location, the developer’s record and reputation, quality, service fees, building management and the existence of a functioning owner’s association will require a reputable local real estate professional to help you minimize any risks with your investment, whether during the procurement stage or managing your investment until you are ready to assume occupancy once you will have retired.

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Dubai`s appeal to Indian investors

By Mohanad Alwadiya
Expert Eye – Gulf News

A lot of Indian investors are expected to flock to the International Property Show which will be held at the Dubai World Trade Centre from April 11-13. Being the top Dubai property investor segment based on nationality, investing more than AED 20 billion in 2015, the Indian expat community has had a longstanding relationship with the emirate (and the rest of the UAE) in terms of business and real estate.

But why is Dubai property so popular with the Indian people? The reasons offered are not really surprising, and essentially summarize why investing in Dubai property has had significant appeal for, not just Indian investors, but for investors from every corner of the world.

Ease and efficiency

Compared to most countries in the world, investing in the real estate sector of Dubai is relatively easy. Enlist a reputable brokerage, select your desired property, negotiate a price, write the necessary checks and the property will be yours. Bureaucracy, which makes investing in other countries in the world such a pain, is virtually non-existent and, as long as you follow procedural requirements, your property transaction will be processed efficiently and without undue delays.

Superior value

When compared to the major Indian cities, or major cities round the world, Dubai offers increasingly better value. A modern infrastructure that is continually being developed, a renewed focus on affordable housing, and world-leading rental yields, the value that is inherent in Dubai property is hard to beat in India, or any other country in the world for that matter.

Tax-free rental yields

Put simply, there are not many real estate markets in the world where an investor can enjoy an average 7% yield without paying any local taxes. So, net of service charges, maintenance costs and property management fees, the rent that you charge your tenants goes straight into your wallet without the taxman taking his share. And with the cost of finance remaining reasonably low, the interest charge on any borrowings you may have will be easily covered by the rent that is being yielded by your property leaving more free cash flow to pay down your principal.

Absence of capital gains tax

In addition, capital gains are not taxed upon disposal of the asset which makes investing in Dubai property a very lucrative addition to any investment portfolio as, when taken with a long-term view, investing in Dubai property will provide handsome returns on investment. So, from a total returns point of view, there are few better real estate investments than Dubai property.

World-class infrastructure and security

Many times, investments that provide such lucrative returns are normally associated with excessive risks or poor infrastructure. This is not the case in Dubai. Dubai’s focus has been on developing a world-leading infrastructure for the benefit of commerce, trade, tourism and habitation. The remarkable progress that has been made in opening Dubai up for business, implementing the physical, digital and logistical infrastructures, legal framework and economic policies in the post-recession period has been pretty impressive.

Strong global brand

Dubai as a real estate and commercial hub has captured the imagination of the world, and there is no better barometer of this that the burgeoning tourism industry. Investments in economic revenue generating sectors such as the entertainment and hospitality sectors have ensured that Dubai is increasingly being included in the bucket lists of travelers from all over the world.

Economic entrepreneurialism

Dubai excels in the area of “economic entrepreneurialism.” Already well-known for conducting globally attended exhibitions, there is no greater example than the upcoming Global Expo which Dubai will be hosting in 2020 – an event that the emirate is preparing for with great care.

Multicultural and cosmopolitan society

Once considered just a pit stop for expats that fulfilled employment contracts of limited duration, more and more people have decided to settle down and call Dubai “home.” This change in outlook has had a dramatic effect on the stability of the property market and the development of a society that, while incredibly diverse, is also less transient and more committed to the development of the emirate as a long-term lifestyle solution.

As one looks around the city, one sees many faces hailing from the four corners of the world, and words, both familiar and unfamiliar, echo in the streets and byways. And while there has always been a vibrant and strong Indian community, other communities representing other nationalities are developing rapidly, making it easier for new expats to make the decision to make Dubai their new home.

History has proven that strong nations were built upon such diversity. Armed with this knowledge and the resources the emirate has been so richly endowed, Dubai continues to forge onward with a vision of better things to come.erektionsmittel rezeptfrei

Property portfolio resilience through diversification

By Mohanad Alwadiya
CEO, Harbor Real Estate
Advisor & Instructor, Dubai Real Estate Institute (DREI)
Published in Property Weekly

It’s true, when people say “the world keeps getting smaller every day.”

Communication and information sharing across great distances and involving large amounts of data take place in a matter of seconds, and the devices we use and ways by which we transmit data keep evolving as we speak. Indeed, many human activities have become highly mechanized and are being performed at supersonic speed; though sadly, life is no less complicated. And economics, no less.

Even with the development of sophisticated software intended to calculate risk, analyze data or predict the impact of policies and economic decisions, e.g. ADePT, Minsky, PI+, SAS/ETS, etc., mankind is still at the mercy of structural or systemic shifts that continue to shape and reshape the global geo-political and economic ecosystems.

So, even with all scientific and technological innovations on hand, we continue to face uncertainty. How, then, does real estate investment – a major economic sector affected by such changes – figure? How do investors protect themselves from financial obscurity when the trade winds start to blow in a less-than-favorable direction?

The answer – portfolio diversification.

The advantages of diversifying your investment portfolio across a variety of asset classes such as stocks, bonds, property and cash has been well-chronicled. What most investors don’t understand that diversification within each asset class can also provide significant benefits.

The majority of my clients are comfortable with investing in residential property because most have rented or bought a property for their own use and therefore understand what that experience entails. However, very few have actually had a similar experience with commercial property and, therefore are a little less confident in investing in this potentially lucrative segment of the market.

So, why consider investing in commercial property?

Commercial property can add diversification to a property portfolio. Segments within the Real Estate market rarely move in tandem and a mixture of residential and commercial property can make an overall portfolio more resilient to inevitable market cycles.

All things being equal, commercial properties generally produce an ROI at least double that of residential properties. This is mainly due to lower per-square-foot capital cost but also reflects the higher levels of risk associated with owning commercial property.

Managing tenants in a commercial property is also more straightforward. You will have a business-to-business relationship with your tenant and many of the emotional issues which can complicate residential leasing arrangements won’t exist. It’s easier to keep interactions professional and focused and relationships are built over time with the opportunity to attract a ‘blue chip’ tenant and are likely to rent your property for a long period of time and less likely to default on rental payments. In many cases, commercial tenants and property owner interests are aligned. The tenant wants an efficient operation which presents a favorable impression to his customers, business associates or peers and, in this way, is more likely to assist the owner maintain or even improve the property.

Establishing a true value of the investment is often easier with commercial property. Reviewing the current owners’ income statement and existing lease details will provide a good indication of the likely future cash-flows and help to establish an accurate valuation. Residential properties are often subject to more emotional pricing or developer inefficiency and cost recovery considerations.

Lease variations abound with commercial properties. The requirements of a tenant operating a high turnover major regional distribution and logistics center for non-perishable goods will be vastly different of those of a tenant who requires refrigerated goods storage to supply local retail outlets in shopping malls. In addition to lease rates and periods, negotiations can include such items as maintenance, implementation of storage and logistical systems, provision of office fit-outs, insurance, lease-to-buy provisions and options – the list goes on.

However, there are some possible downsides that the investor should consider.

Let’s use a warehouse as an example. As most commercial leases are of a duration exceeding two years, with many being of five years duration with options for an additional term of five years, it could take some time to find a new tenant for the warehouse. Additionally, your current tenant may vacate due to tough economic conditions. Residential property can be resilient when it comes to economic factors over the long term and finding new tenants is not as difficult.

As the lease for each commercial facility can be negotiated with flexibility only limited by law, owning a portfolio with numerous commercial properties can be time-consuming and complicated. You will need professional help if just to handle issues such as maintenance and emergencies. Remember, your clients are in the business to make money and will be relying upon you to address any issues that arise with your property immediately. They, like you, do not want to forgo any revenues or incur any costs because of a problem with the property or premises that you provide.

Purchasing a commercial property of a size that can generate significant cash flow will typically require more capital upfront than a residential investment. Also, as the scale or size of the premises can be huge, unexpected repairs or major maintenance items can also be very expensive. This requires careful provisioning for expenses and emergencies when calculating lease rates and free cash flows for re-investment.

There is a greater array of physical and safety risks associated with commercial properties. Warehouses, for example, are often frequented by trucks, forklifts or other heavy machinery which means damage can be substantial from accidents. Having proper insurance is a must, not only for damage to premises and systems, but also in the event of personal injury or death where you, as the owner, can be held liable. Remember, your investment is actually operating as a commercial venture and can receive high volumes of people traffic.

As usual, greater returns will attract greater risks, however, as part of an overall balanced investment portfolio, there is no doubt that commercial space can be very lucrative indeed.

Portfolio diversification is a time-tested way of recession-proofing your investments by ensuring that not all of your wealth is invested in the exact same asset types, as cyclical economic shifts impact different asset types in varying degrees.