Eco Towers launched

Connection Real Estate, an Abu Dhabi-based property development company, yesterday launched a Dh1 billion mix-use environmentally-friendly project in the capital - Eco Towers - comprising luxury apartments and commercial property.

Chairman of the board of directors of Connection Real Estate, Abed Al Zeera said at a news conference in Abu Dhabi that the levelling work on their two plots where the project is to be built, will start within the next four weeks.

The gross floor area of the two plots is 787,000 square feet and it’s located on the Airport Road.

Talks with banks

“The two towers are expected to be ready for use in the first quarter of 2011,” said Al Zeera, adding that the project’s debt-to-equity ratio is targeted at 70:30. “We are currently in talks with a number of banks for financing the project. The project will be 70 per cent financed by regional banks from the Gulf states,” Al Zeera added. He didn’t elaborate further on the subject.

Al Zeera didn’t disclose the price-per-square feet for buyers, saying it will be announced later. Al Zeera said their project is being launched at a time when there’s a real shortage of residential and commercial property in Abu Dhabi and there’s a big demand from end users.

“We are doing it at the right time,”

he added. “Eco Towers addresses environmental challenges while ensuring great and long-term rewards for stakeholders,” claimed Al Zeera.

Another senior executive associated with the project, Khalifa Yousef Khouri, said in a statement that “Eco Towers advocate the rapidly emerging consensus that green buildings are fundamentally better - more healthy, less expensive to run, more appealing to occupiers and the public, and ultimately, more profitable.”

Gulfnews

Developers see challenges ahead

Despite tight credit weighing down on prices of property purchased in the secondary market, developers say a combination of continued strong demand and limited supply will sustain prices in the long term.

Prices have dipped in the past few days after dramatic growth in the first half of the year as property speculators found the supply of ready buyers drying up, while terms for financing home ownership have become more stringent.

“The severity of the global situation will bring challenges. Our real estate sector may see some short-term margin compression, mostly affecting the smaller developers, but overall the fundamentals have not changed and it [the sector] will prosper over the coming years,”

said Abubaker al Khouri, the managing director of Sorouh, in a speech today in London.

“At the heart of that future growth lie the fundamentals of strong demand and as yet limited supply,” he said, adding that he saw Abu Dhabi as the best property market worldwide. Earlier this month, the Chamber of Commerce forecast a shortage of at least 28,000 units this year.

Developers have not reduced their prices for new properties, but they are shifting their focus from speculative buyers to end-users.

“What we have seen in the last six months is more-informed buyers, because now the market is approaching what we call the end-user market,”

said Zaid Ghoul, the chief financial officer of the Dubai-based developer Union Properties.

“So they will be more interested in hooking themselves up with a developer that has reputation and that is large enough to deliver. We are raising prices as we go along because we are releasing a product that is almost complete. We are targeting the end-user market.”

Prices of phase five in the developer’s Uptown project in Motor City are ranging between Dh1,450 (US$395) and Dh1,550 per square foot, compared with Dh700 and Dh800 last year for similar types of units in previous phases. Given the current shortage of supply, developers whose projects are near completion focus on their near-term availability. Profile group is advertising Marina Heights, two towers in Abu Dhabi, as “the first project to be completed on Al Reem Island”. Units are on offer at no less than Dh2,950 per sq ft. Hydra Properties’s average residential price on Al Reem Island is about Dh3,000 per sq ft, with office space going for Dh3,700.

The only middle-income freehold area in Abu Dhabi remains Al Reef, from Manazel Real Estate, where units are changing hands at Dh1,100 per sq ft. “Although prices have recently dropped from what some may say were unrealistic prices, it is important to note that they have risen fast over the last months and people are still making profits,” said Michael Wilde, the general manager of Manazel. “Our Al Reef units are still, even in these difficult times, selling at 70 per cent to 80 per cent above their original values, and are expected to increase in value once the market realises there is still a fundamental demand for quality completed product as they come on stream.”

In Dubai, prices for off-plan homes have also fallen by about 10 per cent on the resale market but some segments are still in strong demand, according to developers. Mr Ghoul noted that “the villa type hasn’t yet been fully saturated” nor has office space, or middle- to low-income housing in low-rise buildings comprising apartments of three bedrooms or less.

Developers see the recent price drop and slowdown in sales as linked to negative sentiment about the global economy, rather than as tied to fundamentals of supply and demand.

“People are panicking. They need more information. Abu Dhabi is one of the healthiest markets in the world,”

said Sulaiman al Fahim, the chief executive of Hydra Properties. “There is no oversupply”.

In any case, the current crisis will not leave developers unaffected, according to analysts. “Some smaller developers that don’t have much cash will have problems, as some banks have already stopped backing them,” the head of sales at one property broker said. “I have quite a few plots of land to sell and can’t do so because those who will have to develop them are thinking twice before buying.”

Mr Khouri from Sorouh predicted a “rush to quality” by consumers and banks, both of which would look for solid real estate developers and developments to invest in. The larger and well capitalised companies such as Sorouh, which has projects worth more than Dh70 billion under development, would benefit from this, he suggested.

As sales slow, some developers are finding ways to make their projects more attractive to investors and buyers. The developers behind Eco Towers, a pair of environmentally sustainable buildings within the Danet Abu Dhabi project, are requiring buyers to only pay a 2.5 per cent booking fee and are offering a more relaxed payment plan, executives said at a launch event today.

Luis Loureiro, the national head of sales and leasing services for Colliers International, said that most developers were waiting until early next year to make decisions about easing payment plans, but since Eco Towers was already 30 per cent financed by developers, they were able to act earlier.

Others focus on “education”. “Starting in mid-November,” Mr Fahim said, “I will stop travelling to do a full campaign… I will myself be talking to the investors, telling them how to re-sell and how not to be greedy, and how they should wait to the long term. It is more about education.”

The National

Connection Real Estate announces 1st LEED Platinum mixed-use towers in the Middle East at Cityscape Dubai 2008

Connection Real Estate and their exclusive sales agent, Colliers International, plan to launch the landmark Eco Towers at Cityscape Dubai 2008.

During their participation they will reveal details about the 23-storey twin towers which are strategically located in the prestigious community of Dhanet Abu Dhabi. The Abu Dhabi-based property development company is set to build the first mixed-used towers in the Middle East with LEED Platinum certification.

The Eco Towers, named for their eco-friendly positioning, will provide retail space, modern facilities and luxurious Grade-A quality finishing while adhering to environmentally sensitive standards. Costing an estimated Dhs900m, this unique residential and commercial property also personifies the compatibility between value driven principles and a multi-facted approach to green construction.

HE Khalifah Khoury, Vice President of Connection Real Estate said:

“We are extremely excited about launching the Eco Towers at this year’s Cityscape Dubai as it will highlight our company’s plans to play a dedicated role in promoting the UAE’s vision of green building. By offering construction solutions that create the lease impact on the environment, we hope to serve as a sustainable benchmark for the region.”

The Leadership in Energy and Environmental Design (LEED) is an international green building rating system that sets environmentally sustainable construction criteria. It aims to establish a common standard of building designs that minimize risks on the environment and raise awareness among consumers of the benefits of green construction. and Platinum is the highest level.

Fadi Al Qassim, Projects Manager of Connection Real Estate said:’ While striving to achieve the highest LEED certification in the extreme conditions of the desert for the Eco Towers, we look forward to the transformative effect of adopting environmentally friendly practices in the building industry. Building for the future has never been more exciting or imperative,’ Al Qassim continued ‘We have selected the US Green Building Council to grant us with the Leed Certification as they have a thorough understanding of what our local market requirements need as they experience similar conditions to those we have in our market.

The commercial tower will offer 36,485 square meters of office space while the residential tower will provide 36,685 square meters of space for healthy living. Eco Towers’ living and working spaces will be more cost-effective, safer for the environment, healthier to live and work in. Air purification systems, renewable energy, toxic-free materials, dual glaze windows, water efficiency and waste reduction are just some of the eco-friendly features incorporated into the development. Perched on a podium, the towers’ amenities include Smart Home Technology, linked underground car park and proximity to the Holiday Inn in Dhanet Abu Dhabi.

Connection Real Estate and Colliers International will showcase the Eco Towers at stand number 7E40, Hall 7 at the Dubai International Exhibition Centre. Expressions of interest for sales will be accepted at Cityscape Dubai 2008.

AME Info/Press release