UAE - Mubasher: The crippling property sector in the UAE is putting the state’s banks at risk of deteriorating asset quality, with real estate prices falling by 20% from their 2014 peak, according to a press release by Fitch Ratings.

Despite being mainly driven by asset quality, viability ratings (VRs) of the UAE banks, which average ‘bbb-‘, are not under immediate threat, the American agency indicated.

The New York-based rating agency has rated 17 banks in the UAE with an average issuer default ratings (IDRs) at A+.

The real estate prices within the GCC country have been declining since early 2015, “mainly due to oversupply and weaker consumer sentiment linked to lower oil prices and a less supportive economic environment,” Fitch Ratings highlighted.

Accordingly, potential buyers postponed their purchases, the agency indicated, adding that UAE dirham appreciation, geopolitical tensions, and lack of confidence in the UAE made foreigners hinder from buying.

“Some real estate projects that began before prices started falling face significant delays and loans are increasingly being restructured, mostly through term extensions, while some developers have suspended payments to contractors,” Fitch said.

Rental prices in the UAE’s property sector are not expected to improve in the near term as oversupply is likely to carry on until after Expo 2020 Dubai.

The measures recently taken by the government to bolster the sector, including a new residency law and property ownership rules for foreigners in Abu Dhabi, are unlikely to significantly impact the real estate sector in the medium term, Fitch projected.

The agency further noted that the UAE’s bank have not been fully recovered from the real estate crisis that hit Dubai in 2010.

Stage 2 and Stage 3 loans at UAE banks' are projected to rise, while Stage 3 loan ratios are likely to see more real estate restructuring in the coming 12 to 18 months, the agency said.

“A significant proportion of the %23 billion loans to Dubai government-related entities due to mature by end-2021 may be restructured again,” Fitch noted.

Dubai – Mubasher: Real estate transactions closed in the Emirates of Dubai surged 134% since the creation of the emirate’s new Higher Committee of Real Estate at the beginning of September, the Dubai Land Department's (DLD)showed on Tuesday.

The committee was established by Sheikh Mohammed bin Rashid Al Maktoum, vice president, prime minister and ruler of Dubai and chaired by Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, deputy ruler of Dubai, according to the Emirates News Agency (WAM).

"The real estate market indicators show the maturity of an increasingly balanced sector. We have achieved a total value of more than AED 1.4 trillion through 715,000 accumulative investments and 374,000 accumulative investors,” CEO of promotion & real estate investment management sector at DLD, Majida Ali Rashid, revealed.

Year-to-date, the value of investments pumped into the Dubaian real estate sector exceeded AED 56 billion, Rashid added.

By: Mahmoud Gamal

Dubai – Mubasher: Damac Properties, the leading Dubai-based real estate developer, is looking forward to continuing its operations and projects delivery in 2020 despite the challenges facing the real estate sector, in terms of the witnessed decline in prices, the Emirati billionaire and chairman of Damac Hussain Sajwani said.

In an interview with Mubasher, Hussain Sajwani highlighted that the company will focus on handing over the units as well as the completion of all the projects that have been launched over the past years.

Damac is aware of the market’s future needs, Sajwani said, pointing out that the company sets its strategic plans to meet the current and future demands in Dubai.

“In line with the ongoing development in Dubai and with the expats choosing the city to be their long-term settlement place, the company focuses on building multi-use residential communities that enable residents to live and work while enjoying social and recreational activities,” the chairman told Mubasher.

The Emirati mogul stressed that Damac’s vision complies with Dubai’s expectations, noting that the company will carry on its vital role in the development process in Dubai.

Investments

Despite challenges over the past years, the real estate sector has been a profitable addition to the portfolio of wealthy investors, Sajwani said.

The Emirate succeeded in achieving a great progress over the past years, making it an attractive option for investors from across the globe, he indicated.

Damac’s chairman added, “Due to the advanced lifestyle, integrated infrastructure, and comfort it provides to residents, Dubai has become one of the most appealing cities in the world for investment.”

Adaptability

Sajwani projected the real estate sector to go through different situations, in terms of the intensity of supply and demand, pointing out that investors and buyers always prefer the flexible market that offers adaptation and prompt response to its different states.

The long-term forecasts for the real estate market in Dubai are still positive, backed by the recent government initiatives that will boost the market, he noted.

These initiatives include the recently announced laws by the UAE government regarding the long-term residency visas for expats and the 100% ownership for foreigners.

The sector is likely to be stable in 2020. However, the market is expected to witness a significant increase in prices.

Supply and demand

Sajwani said that volatile supply and demand in dynamic markets, such as the real estate market, are healthy and help boost innovation,.

Although the real estate market experiences these swings occasionally, it is sometimes pushed by the supply while in other times the demand is the controller, Damac’s chairman explained, adding that the supply in the property market is currently higher than the demand; therefore, the market is witnessing purchasers in the current time.

Investors that are aware of the market will take advantage of this point to guarantee benefit once the state of demand arises, he noted.

Higher Real Estate Committee

The Emirati tycoon remarked that it is a positive step to form a Higher Real Estate Planning Committee headed by Vice President and Prime Minister of the UAE and Ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum.

This move reflects the UAE’s leadership strategy in establishing a strong economy, not relying only on crude oil and also able to compete globally, Sajwani highlighted.

The Real Estate Planning Committee will help leading developers to communicate effectively and set the proper future plans for the real estate economy, he clarified.

This committee will also help developers avoid repetition in real estate projects, in addition to setting an integrated strategy for all the large-scale projects to be launched in Dubai within the next ten years, he noted.

New hopes

The real estate sector is expected to leap after it has witnessed a slight slowdown in 2018, Hussain Sajwani told Mubasher.

Damac’s chairman emphasised that Dubai’s leadership has directed the economy towards economic growth and progress.

Aiming to shift Dubai and the UAE towards the knowledge economy, Sheikh Mohammed bin Rashid Al Maktoum’s long-term vision has boosted investors’ confidence in the real estate market in Dubai, Sajwani added.

Expats now tend to settle in the UAE for long terms after it was previously considered as a destination for transit, Sajwani highlighted, pointing out that this change has remarkably impacted the property sector by turning tenants into owners.

 

Translated by: Mai Ezz El-Din

By: Enas Bahgat

Dubai – Mubasher: Emaar Properties’ stock, listed on the Dubai Financial Market (DFM), has fallen to its lowest level since July 2019 during Thursday’s trading session.

By 12:30 pm UAE time, the stock shed by 2.32% to AED 4.63 after seeing a trading volume of 9.04 million shares that were exchanged at a turnover of AED 42.334 million through 446 transactions.

This came on the sidelines on the 18th edition of Cityscape Global 2019 being held at Dubai World Trade Centre from 25 to 27 September.

UAE - Mubasher: Nikken Sekkei, Japan-based architectural, engineering, and urban design firm, on Thursday unveiled plans to lift the world’s longest cantilever, The Link, on One Za’abeel, an iconic mixed-use development in Dubai, UAE.

The Link will be hoisted into place in early 2020, according to a press release.

The cantilever, which will measure 230 metres in length and weigh over 8,000 tonnes, will connect the towers of One Za’abeel, the Japanese company noted.

“Designing the world’s longest occupied building cantilever was an ambitious challenge in itself, however, designing an offset cantilever between two towers, 100 metres above a busy highway, was a challenge of ingenuity and imagination that we thrived on,” Nikken’s Executive Officer, Principal responsible for MENA, CIS, India, Australia and Europe regions Fadi Jabri said.

The active highway will be closed to traffic during the construction phase, the release indicated.

In addition to the structure, One Za’abeel, which is being developed by Nikken and Ithra Dubai, features a residential tower, high-end five-star hotel, commercial tower, and retail destination - The Gallery.

Dubai Land Department has signed nine agreements and memoranda of understanding with a group of Emirati and foreign entities at Cityscape Global 2019, according to the Emirates News Agency (WAM).

An MoU was signed with Saudi Arabia’s Amaco Media Group to promote the real estate market, organise, and hold a real estate exhibition in the kingdom.

The land department also inked an MoU with Crayon, a globally leading company in machine-learning technology, for cooperation in the field of artificial intelligence-based consulting services, digital transformation, and cloud services.

Moreover, two protocols were signed with Emirates Islamic Bank and Commercial Bank of Dubai to “structure and develop the parties’ relationship and promote their common interests to achieve integration and promote close cooperation and coordination between them.”

The UAE’s land department signed MoUs with the University of Manchester Middle East Centre, Mashreq Bank, Coldwell Banker Richard Ellis, BSA Ahmad Bin Hezeem & Associates, and Royal Institute of British Architects.

Held in Dubai World Trade Centre, Cityscape Global is the largest and most influential real estate investment and development event for emerging markets globally offering access to exclusive offers, networking opportunities, and educational sessions.