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

90% of IREIS 2009 space reserved by real estate companies

Real estate giants from the UAE and other countries will gather in Abu Dhabi in January for a major property show and organizers said nearly 90 per cent of the exhibition’s area has already been booked.

Dome Exhibitions will organize the January 27-29 Abu Dhabi Real Estate and Investment Show - IREIS 2009, to be held under the patronage of H.H Dr. Sheikh Sultan bin Khalifa bin Zayed Al Nahyan.

“Property companies from the UAE and other countries of the region are now vying to grab the remaining area of the exhibition,” Dome Exhibitions said.

“The fifth IREIS edition, which coincides with a construction upsurge in the UAE in general and Abu Dhabi in particular, will be a chance for major real estate developers from the region and the whole world to view the latest investment opportunities in this sector.” The Show will attract such major property companies as Tameer; the platinum sponsor of this event, Sorouh, Aldar, Al Qudra and Hydra.

According to real estate sources, property projects worth nearly Dh1.2 trillion are being carried out in the UAE, including Dh300 billion in Abu Dhabi alone.

They noted that the real estate sector has become a major contributor to the country’s gross domestic product given its rapid growth over the past years.

The sources expected sustained growth in demand for housing units in Abu Dhabi and other UAE emirates in the light of the economic and social boom through which the country is passing.

“The 2009 edition of the exhibition will be an opportunity to view the major projects being carried out or planned in the UAE and the region given the wide participation by major property companies as well as finance firms, banks and real estate brokers. This means this show will be a significant platform to finalize large deals in this sector,” Dome Exhibitions said.

It said many real estate companies from the UAE and other Gulf countries have confirmed their participation and booked large spaces in the exhibition, adding that this demonstrates their strong interest in the event.

Besides showcasing their products, the participating companies will present their current projects and future investments.

“This means the event will present an important opportunity to national and expatriate investors to see those projects and future plans in this sector,” Dome Exhibitions said.

“There is a strong interest from many investors and companies to take part in this event as is evident from their planned participation in national pavilions that will constitute an umbrella for companies from the same country, including those from Egypt, Morocco and India.” “We are confident that this event will be a good chance for all exhibitors and investors to present their projects and this in turn will contribute to further expansion in this sector and achieve the interests of all concerned parties.”

WAM/MMYS

Abu Dhabi United Group buys Manchester City

Abu Dhabi United Group for Development and Investment (ADUG) has bought the English football club Manchester City, Dr Sulaiman Al Fahim, chief executive officer of Abu Dhabi-based real estate developer Hydra Properties, told Gulf News on Monday.

“The amount paid for the acquisition of the club cannot be disclosed. The acquisition will help the Abu Dhabi brand name and allow talented UAE players to play in the premier league and get access to all the world class opportunities that exist,” said Al Fahim by telephone.

Al Fahim, a member of the Abu Dhabi United Group board, was the architect of the deal. Former Thailand Prime Minister Thaksin Shinawatra was the previous owner of Manchester City, one of the oldest English clubs founded in 1880.

Formal approval

Thaksin had been looking to sell City for several weeks after his assets were frozen as a result of corruption and fraud charges in Thailand.

On its website Manchester City said: “Manchester City can confirm that a Memorandum of Understanding has been signed between the Abu Dhabi United Group (ADUG) and Manchester City Football Club Limited.

“A period of due diligence for all parties, including the FA Premier League has now been entered. A further statement will be released by the Club in due course.”

“Within a month, we expect to get a formal approval from the authorities in the UK for our acquisition of the club, said Al Fahim.

A statement by Hydra Properties said Abu Dhabi United Group had been in a series of negotiations with Thaksin to purchase the club, until it successfully signed the agreement of purchase.

The purchase agreement gives ADUG all management rights, and Thaksin will be honourary president of the club without administrative responsibilities.

ADUG will also solve all the club’s problems and clear any pending payments, and will comprehensively support the club.

Gulfnews

Hydra Executive Towers underway

Hydra Properties, the leading UAE-based international property developer, today announced the completion of 60% of excavation work for the magnificent Hydra Executive Towers located at Al Reem Island in Abu Dhabi.

Hydra Executive Towers consists of three towers and two of them will rise up to 30 stories each and function as offices. The third tower is planned with 24-stories and will offer serviced apartments.

The towers are coming up along a waterfront promenade and will be interlinked by lush landscaped plazas with signature clusters of date palms. World class shopping and dining establishments will line the waterfront which will offer an array of water based activities and sports.

Commenting on the swift progress of the much sought after project, Dr. Sulaiman Al Fahim, Chief Executive Officer, Hydra Properties, said:

“Hydra Executive Towers will go a long way to fulfill the long felt need for sleek business towers in Abu Dhabi. Executive Towers will empower decision makers by offering them unique business spaces and facilities that will play an intrinsic role in their growth and in formulating a vision for the future. I have no doubt that Hydra Executive Towers will act as an excellent launching pad for many a successful business venture in Abu Dhabi.”

Giving an update on the project, Eng. Jonathan Ing, Project Manager, Hydra Properties, said:

“Hydra Properties has employed its logistics muscle in a fruitful manner to speed up the enabling work. The initial phase of the project is going ahead of schedule and 60% of excavation work has been completed.”

The project is expected to be finished by September 2011, and is executed by Tafseer Contracting Company while National Engineering Bureau acts as the engineering consultancy.

Hydra Executive Towers will also have business lounges, high-speed internet services, tranquil landscaped areas, refreshing greenery, pedestrian walkways, ample basement car parking and a drop off area for important employees and clients.

The interior of the Towers is designed to offer new levels of civilized refinement not previously found in the region. The serviced apartments in the towers will employ state-of-the-art smart home technology to provide residents an unmatched living experience. The apartments, to be managed by a leading luxury hotel group, are available for outright sale.

AME Info/Press release

Hydra Properties completes excavation work for Corporate Towers at Al Reem Island

Hydra Properties, the leading UAE-based international property developer, announced the completion of excavation work for iconic Hydra Corporate Towers located at Al Reem Island in Abu Dhabi.

Reaffirming his commitment to remain as a real estate trendsetter, Dr. Sulaiman Al Fahim, Chief Executive Officer, Hydra Properties, said:

“Hydra Corporate Towers will bring hitherto unheard of class and elegance to business towers in Abu Dhabi. This project is especially meant for decision makers and the spaces are planned in such a way that ideas and strategies will flourish in a conducive atmosphere for innovative thinking. I’m confident that the Hydra Corporate Towers will inspire a new business ethos in Abu Dhabi and contribute in ample measure towards the growth of the nation.”

Giving a micro view of the project, Eng. Jonathan Ing, Project Manager, Hydra Properties, said:

“Hydra Properties has made much headway in the initial phase of the project and is going ahead of schedule to complete the towers. Excavation has been completed in a smooth manner and now men and materials are ready for the next stage.”

The project is expected to be completed by September 2011, and is executed by Tafseer Contracting Company while National Engineering Bureau acts as the engineering consultancy.

Corporate Towers include two office towers and offer scintillating views of Arabian Gulf and easy access to the centre of Abu Dhabi.

The interior is designed to make optimum use of space and light and every detail has been carefully planned and worked out, from its high-speed elevators and multi level car parks, to its world-class leisure facilities.

The tower will also have a number of serviced apartments where the finest values in design and technology meet to provide an unmatched ambience. The apartments, to be managed by a leading luxury hotel group, are available for outright sale.

Hydra Properties has blazed a new trail by raising landmark projects across the continents, stretching from Hydra Waves in Mexico to Al Aqeeq Marina in Kuwait.

Hydra Properties’ major ventures in the UAE include Hydra Village Abu Dhabi, Hydra Avenue Towers, Hydra 55, Marina Spirit, Abu Dhabi Golf Walk, Hydra Corporate Towers, Hydra Heights, Hydra Downtown Towers Dubai, Hydra Towers Business Bay Dubai and Hydra Twin Towers, Jumeirah Village, Dubai.

Hydra Properties completes foundation work of Hydra Avenue Towers at Al Reem Island

Hydra Properties, the leading UAE-based international property developer, today said that it has fast tracked its prestigious Hydra Avenue Towers project, located at Al Reem Island in Abu Dhabi, by completing the foundation work for the project ahead of the schedule.

“Hydra Avenue Towers is all set to add majesty and grandeur to Al Reem Island. Avenue Towers is rising fast to fill a void in the property market in Abu Dhabi and is the answer to the prayers of investors and those who seek serene and luxurious living spaces. We, at Hydra Properties, are devoting all our energy and expertise to the successful completion of the project,” Dr. Sulaiman Al Fahim, Chief Executive Officer, Hydra Properties, who was recently bestowed with the Outstanding Achiever - 2008 Arabian Property Award, said in a comment on the swift progress of the project.

Offering a brass-tacks view of the project, Eng. Mohammad Fawzy, Head of Engineering Division, Hydra Properties, said the project had gained momentum with the completion of foundation work which took us three months. “The focus now is on finishing the pillar work as early as possible. The logistics for the rest of the tower is being chalked out and we are confident of meeting our rigorous standards of excellence,” he added.

The Hydra Avenue Towers Project is expected to be completed by 2011. The project is carried out by Tafsir Contracting Co while Prime Engineering Consultancy is the engineering consultants for the project.

The Hydra Avenue Towers Project comprises six towers, rising up to 29 stories, and will go a long way to deepen the dazzle of the City of Lights at Al Reem Island in Abu Dhabi.

These six skyscrapers are classified into a group of three each and will stand as a brotherhood of buildings at the City of Lights. Hydra Avenue Towers are designed to triumph over a podium that stretches over five floors.

Hydra Avenue Towers are specially conceived to provide solace for the residential needs of men and women on the move. And to provide the residents a holistic living environment, thinkers at the Hydra Properties have included retail towers at the Hydra Avenue Towers.

Throughout the towers, reflecting the spirit of the times we live in, futuristic smart home technology will be deployed to ensure the residents a ceaseless flow of comfort and convenience.

Hydra Properties never forgets its core philosophy of sustainable development and is determined to adhere to global standards in eco-friendly space management at Hydra Avenue Towers.

Reaffirming Hydra Properties’ philosophy that has helped the Abu Dhabi-based company to reap a rich harvest in the global realty market, Dr. Al Fahim, said: “Hydra’s philosophy goes beyond brick and mortar. Hydra’s each project is designed to be a living organism, blending in with ecology and breathing nature’s pristine energy, so that you don’t feel trapped inside the steely and concrete claws of your apartments. Each day, Hydra strives to make its spaces radiate with positive energy so that you get more from life.” Hydra Properties has blazed a new trail by raising landmark projects across the continents, stretching from Hydra Waves in Mexico to Al Aqeeq Marina in Kuwait. Hydra Properties’ major ventures in the UAE include Hydra Village Abu Dhabi, Hydra Avenue Towers, Hydra 55, Marina Spirit, Abu Dhabi Golf Walk, Hydra Corporate Towers, Hydra Heights, Hydra Downtown Towers Dubai, Hydra Towers Business Bay Dubai and Hydra Twin Towers, Jumeirah Village, Dubai.

WAM/SA

Hydra Properties completes 65% of excavation work for Eve’s Tower at Business Bay

Hydra Properties, the leading UAE-based international property developer, announced the completion of 65 per cent of the excavation and land leveling work for Eves Tower, the worlds first exclusive tower for women entrepreneurs, located at Downtown in Dubais Business Bay.

Giving a micro view of the project, Eng. Mahmoud Saad, the Construction Manager, Hydra Properties, said: “Hydra Properties has made much headway in the initial phase of the project and is going ahead of schedule to complete the excavation work. Already, guide walls for the six basements floors have been laid.” Eng. Saad added: “The excavation work is expected to finish by the end of July, 2008. Once that objective is met, work will start on pillars for all towers and is expected to be completed in two months. The next stage, then, will be set for the construction to commence.”

The project is expected to be completed by 2010, and is executed by Middle East Foundations Company while National Engineering Bureau acts as the engineering consultancy. Eves Tower is part of the iconic Hydra Towers Project that comprises five uniquely shaped, high-rise towers that will be at the core of the largest commercial hub in the Middle East, Dubais Business Bay. Read more