Insulating houses and villa can increase property prices in Dubai

Dubai is known for its humid and hot climate. The city receives fair amount of sunshine for almost ten months which is no surprise since it’s located within the northern desert belt. Throughout the year the weather remains quite hot but during the months of summer. With the daily average temperate of over 40 degree Celsius, the city can be an inferno. Even during the short lived winters, the temperature does not fall below 24 degrees Celsius.

It’s a matter of common sense that the regions which are too cold or too hot have low real estate values but for Dubai this does not hold true. Despite the hot weather, Dubai is a hotspot for tourists and Dubai property business is the major driver of its economy. The abysmal conditions of Dubai real estate right now are due to the global economic crunch the heat of the desert had its role in keeping away the investors from the colder parts of the world.

To combat this shortcoming, many developers are now considering remolding of their houses to make them well sealed, insulated and properly ventilated. Just like serviced apartments attract more buyers, well insulated properties are also expected to raise the demand of Dubai real estate. Though insulated houses are bit expensive yet they are energy efficient and cost effective in the longer run.

Where to install insulation?

Real estate developers in Dubai should know well where they can install insulations as it helps them to pick the best solutions. Following insulations make the most popular choices.

1) Wall cavity insulation: This insulation prevents 70% reduction in heat as compared to un-insulated walls and blocks rapid temperature changes taking place outside.

2) Loft insulation: This insulation prevents 25% of reduction in heat as compared to un-insulated attic. Consider insulating attic to R-30 level.

3) Window shading insulation: This insulation uses solar controlled window films in the glass of the doors and windows because it saves 5 to 10% exposure to UV rays.

4) Duct insulation: This insulation blocks all the leaks and prevents heat from coming into the house. Before installation of central ACs, ducts should be inspected carefully.

With the advancement in technology, many new techniques of insulation have been introduced including blown insulation, rolls or blankets insulation, rock wool insulation, synthetic insulation, fiberglass insulation, cellulose insulation, spray insulation and many others that drastically prevent heat from turning homes into ovens under the Dubai sun.

Dubai developers if concentrate on installation of insulations along with home staging, the property prices can experience immediate recovery. This is because astute investors are now returning to Dubai properties market with the aim of buying quality and cost effective properties. The insulated properties are the best opportunities for them to save their utility expenses in the longer run.

Real Estate Investor Protection Law is likely to be unveiled this year in Dubai

Law may empower investors to cancel contracts and get refunds

The Real Estate Investor Protection Law is likely to be unveiled this year, which will empower investors to seek cancellation of contracts if the developer fails to fulfill his contractual obligations, Director-General of Dubai Land Department has said.

In an article published in Al Bayan, Sultan Butti bin Mijrin said: “The new law consists of approximately 30 articles, all in the interest of the investors, providing them a complete and comprehensive legal support to protect their purchases of properties.

The law is due for release this year.”In January, Emirates 24/7 had reported that the law was due for release this year.

The law will address grounds for cancellation such as a developer's refusal to link payments to construction milestones, or if he makes material changes to specifications.

It will also deal with refund or replacement issues in the event of a material defect and financial penalties for delay in delivery.

Mijrin said: “The law will provide the grounds that give the investor the right to resort to cancel the sales and purchase contract with the developer and even recover dues in full.”

Although the Land Department has created a mediation committee that offers remedy only if the developer and the investor agree to settle their issues amicably. In case of disagreement, the issue is to be resolved through the court.

According to Ludmila Yamalova, Managing Partner of HPL Yamalova & Plewka, filing a formal case is an expensive and time-consuming proposition.

The overall cost includes court fee of 7.5 per cent of the value of the case or a maximum of Dh30,000, per contract, which is to be paid before filing of the case; translation costs as every document submitted to the court has to be translated into Arabic and, finally, the attorney cost, which varies greatly, but is required to be paid up front.

“Most of the time, the minimum expense of litigating a case is Dh150,000,” she added.

A number of investors have been aggressively forming groups and have been petitioning Real Estate Regulatory Agency (Rera) to take action against erring developers. Rera has said it has cancelled 202 projects and expects the number to rise this year.

New visa rules may not be enough to absorb oversupply, analysts say

The UAE federal government’s decision to extend visas for real estate investors from six months to three years will boost demand for property but is unlikely to cover the massive oversupply that still exists in the market, analysts told Arabian Business.

According to a report on newswire WAM, the decision was taken during a cabinet meeting on Tuesday chaired by vice president and prime minister of the UAE and ruler of Dubai HH Sheikh Mohammed Bin Rashid Al Maktoum.

The move has been universally welcomed by the industry as a positive move for the beleaguered real estate sector.

“We believe this could significantly boost demand in the UAE’s residential real estate sector, particularly in Dubai, as the promise of a long-term residency visa was a major driver of second-home purchases during the real estate boom prior to mid-2008,” said Farouk Soussa, a Dubai-based economic analyst at Citigroup.
The real estate sector in Dubai was one of the biggest markets bit by the global financial crisis and impact of the credit crunch and lack of finance led to property prices tumbling by up to 60 percent and nearly half of projects being canceled or stalled.

The slowdown also led to a major oversupply problem in the emirate as demand dried up. A report by Jones Lang LaSalle estimated over 50,000 new residential units will be completed in Dubai between now and the end of 2013, raising the current stock of homes by some 15 percent.

According to Soussa , the industry needs to be realistic about the impact the new visa rule will have as the “overall impact on the property market will likely be somewhat muted by oversupply issues that are being exacerbated by the ongoing completion of new properties.”

At the height of the real estate crisis, confusion over the visa regulations for non-residents led to Federal authorities announcing in mid-2009 that real estate investor visas were only for six months, which had to renewed at a cost of around AED2,000 ($544).

The u-turn by authorities has been welcomed by real estate agents, with Richard Paul, head of residential valuations at the Cluttons agency describing the move as “all good news.”

“It was a learning curve reducing it to six months and everyone disagreed with that and they have now reverted back to the three years... Talking to banks and clients it was something that needed to be done.

“If you are trying to market your property market as an international hub for investors you have to make it as easy as possible from them and that wasn’t the case with the reverting to six months,” Paul said.
Qatar changed its visa regulations for investors earlier this year and Paul believed this may have been the catalyst for the UAE to follow suit.

John Davis, CEO Middle East of real estate consultancy Colliers International welcomed the move and said it “will certainly have a positive effect on the market” but some investors will take a wait-and-see approach as to what the terms of the new regulations will entail.

“Several investors were historically promised “foreign investor status” type visas which didn’t materialise,” he said, adding some investors will be cautious to see what the terms of the regulations will be.

One drawback is the current visa rules are only open to investors with a property valued at over AED1m ($272,257). Davis said it will be interesting to watch whether this minimum figure will be revised
Once the full terms and conditions are announced, Thomas Bunker, an investment sales consultant at real estate agency Better Homes added it will be vital to know if there are any restrictions on some nationalities availing of the new three-year residency visa or whether the rule will be widespread.

“I must add that this new visa term may not be as significant as the market hopes if it does not extend to all of the nationals who in the past have shown a strong interest in the UAE market. If the visa rules do not apply equally to all nationals, the effect of the new visa term will be lessened,” observed Bunker.

While the change in visa regulations is unlikely to have any immediate impact on prices, Jesse Downs, director of management consulting at Jones Lang LaSalle, said it would help to reinforce Dubai and UAE’s image as a safe haven for international investors.

“This is definitely positive news because this will help to restore market confidence… When combined with the regional events surrounding the Arab Spring, this solidifies the UAE’s position as a business and investment hub in the region.”

Dubai Pearl construction under progress

Dubai is the best place to live. The soaring number of immigrants every year is the proof for it. It is a hub of most modern lifestyle and accommodation. Dubai real estate prospers, even though there was a surge in the property market during the past two years due to recession.The tax free status of Dubai is  a big attraction, which will get bigger when other countries are levying more taxes on high income people. Then you will find world class living facilities that are envy to many. Which destination in the world has so much more to offer in such bulks? It is not easy to scrap Dubai’s potential for a recession that is world spread. We should also look at the fact that in spite of Dubai’s internal problems and liquidity crunch it has been one of the least affected countries from recession.one of the best example is Dubai Pearl.Dubai Pearl is a world class, mixed-use, 20 million sq ft integrated development being implemented by Pearl Dubai FZ LLC. Overlooking the Palm Jumeirah Island in the heart of the Dubai Technology and Media Free Zone, the development sets a new benchmark for sustainable urban communities in Dubai. Dubai Pearl’s prime location will offer an unparalleled combination of free-hold in the convenience of a free zone with luxury, energy efficient sustainability and state-of-the-art technology.

The development will ultimately provide a home for 9,000 people and a workplace for 12,000. Dubai Pearl is expected to be completed in 2013,

It is envisaged as a world class, mixed-use, 20 million square foot integrated development under the ownership and management of Pearl Dubai FZ LLC, a consortium of investors led by the UAE’s Al Fahim Group. The group’s portfolio also includes oil field support, automotive and industrial development, hospitality, travel and tourism, and it is already recognised as one of the leading real estate developers in the region.

Pearl Dubai  headed by leading UAE businessman Abdul Majeed Ismail Al Fahim, who is chairman. Prior to Pearl Dubai, Al Fahim was executive director of the Private Office for a member of the Abu Dhabi ruling family. He has also held key positions at a number of leading financial institutions in the Middle East including the National Bank of Abu Dhabi, the Islamic Financial Consultancy (Bahrain) and the Abu Dhabi Investment Company.

Pearl Dubai’s president and CEO is Santhosh Joseph, a highly experienced investor who has worked for many years in the real estate sector. Joseph sees the development as a ground-breaking project that will set a new international benchmark, bringing together luxury, sustainability and state-of-the-art technology in a way that has never been attempted before in the region.

He points out that the retail component of the development will be unique in offering a cluster of so many leading global brands in a single location. Baccarat, Bellagio, MGM and Quintessentially are among the array of glittering brands that have already pledged a presence within the 1.8 million square foot mixed-used destination.

When completed, the development will set a new quality standard for sustainable urban living in Dubai—a 24 hour community where people can work, visit, live and play in style.

“We have set out to create a unique destination and community. We conceived and planned Dubai Pearl as an international quality landmark that will reinforce Dubai as a global city of excellence. Arguably the best location in Dubai deserves nothing less,” Joseph stated at a recent press conference.

Schweger Associated Architects of Germany are the lead architects and master planners of Dubai Pearl. Their design has focused on column-free living and working space that will allow flexibility of use and capture unobstructed views of the beautiful surroundings. The column-free design of the development is a pioneering approach that will create 20 per cent more usable space than is the norm within the region. At street level, the development will give the impression of a low rise city centre that will interact harmoniously with the symbolic tower and landscape to give a very special aesthetic character and sense of place to the development.

Impressively, the development has already achieved LEED Gold pre-certification status. LEED is an internationally recognised green building certification system developed by the US Green Building Council, which provides a comprehensive framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions.

Saudi Arabia Real Estate Sector – Initiation of Coverage

• Saudi real estate equities are trading at a 55% discount to TASI on PBx basis versus a 4-year average discount of 48%

• Strong fundamentals owing to attractive demographics coupled with large undersupply of residential units, but financing is the key constraint

• Strong Buy - DAAR - TP:SAR11.37, Hold - EEC - TP:SAR7.20, Strong Buy - Akaria - TP:SAR30.40

Saudi real estate equities trading at a 55% PBx discount to TASI

As of March 2011, TASI is trading at 2.0x PBx versus 0.9x for real estate equities at a 55% discount. Real estate average PBx needs to trade at a target of 1.1x to be inline with the historical 48% discount to TASI between 1Q07 and 4Q10. The PBx discount of Saudi real estate equities can be justified by investors preference of real asset ownership and the sector’s low RoE and RoA. The market, however, is missing on the large premiums to land value reported at cost in the books of listed equities compared to their realizable fair values

Attractive fundamentals, but sluggish project financing strains developments

The Saudi residential market suffers from a large supply shortage, especially in the low-mid income segment. We estimate that a current shortage of 0.7mn units exist in the market and an additional 1.2mn new units will be needed by 2014, offering attractive potential for Saudi realtors. Off-plan sales are largely restricted leading to financing bottlenecks for developers who are forced to fully finance projects prior to realizing cash inflows from unit sales. Moreover, the dry credit market for real estate developers in 2009-10 has further substantiated the funding quandary and led to execution delays.

The mortgage law is an initial step in the right direction, but not the sole solution

The proposed mortgage law is critical to unlock part of the pent up demand for real estate in Saudi but it’s capacity to deliver an efficient solution to the sector vulnerabilities remains feeble. Our view is devised given low base effect and limited reach owing to the disparity between the strict financial requirements expected from lenders and the wide base of inadequate borrowers. We prefer saying more credit extended to developers, which should yield better results in the short to medium term.

Initiate coverage on Saudi real estate

Initiate on Dar Alarkan (DAAR) with a Strong Buy recommendation and a target price of SAR11.37, Emaar Economic City (EEC) with a Hold recommendation and a target price of SAR7.20 and Saudi Real Estate Company (Akaria) with a Strong Buy recommendation and a target price of SAR30.40.

New defence vehicles, satellite technology and advanced geospatial mapping among highlights of the UAE’s IDEX defence offering

Abu Dhabi, 22 February 2011: The 10th International Defence Exhibition and Conference (IDEX) and inaugural Naval Defence Exhibition (NAVDEX) are proving a prime forum for the UAE’s growing defence industry to highlight new technology. The 169 UAE companies exhibiting are central examples of advanced research, development and manufacturing capabilities from across the emirates.

UAE companies occupy more than 12,000sqm of space at IDEX 2011 with 169 exhibitors including Tawazun Holding, Mubadala Development Company, and the Telecommunications Regulatory Authority.

A number of UAE companies are also exhibiting in the First Time Exhibitors Zone, benefiting from the exclusive location and visibility the zone offers.

“IDEX has historically been a major forum for UAE companies to exhibit their advancements and technological prowess,” says Mohamed Al Mashgouni, IDEX 2011 Show Director. “Each year, the UAE contribution to IDEX grows and the evolving nature of our country’s defence and security industry becomes more apparent. This year, with a more than 50 percent increase in the number of UAE participants compared to ’09, the technologies we see exhibited are becoming a major force in the local and global defence industry.”

Notable UAE companies exhibiting new technology at this week’s exhibition include Tawazun subsidiaries Caracal and NIMR, as well as Yahsat and Bayanat, both Mubadala subsidiaries.

Caracal International is the first arms manufacturer in the country and is exhibiting its line of innovative defence products. Notable additions this year include the Caracal H type - a high performance single action pistol aimed primarily at the sporting market and developed by Caracal’s in-house design team. Caracal is also exhibiting its first line of rifles with both hunting and defence applications.

Exhibiting for the first time at IDEX as a Tawazun subsidiary is NIMR Automotive, the first UAE defence manufacturer to produce a range of land vehicles specifically designed for active military applications. NIMR’s vehicles range from 6x6 armoured personnel carriers and armoured patrol vehicles, to heavily and lightly armoured 4x4 command and recon vehicles – all built for high endurance in demanding desert terrain and extreme weather conditions. Their 6x6 short wheel base platform vehicle, launched yesterday by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President & Prime Minister of the UAE and Ruler of Dubai, is the first defence vehicle platform designed and manufactured in the UAE.

Exhibiting for the first time at IDEX is Bayanat, the UAE’s premier and leading geospatial service provider. As a trusted partner and strategic provider of the UAE armed forces, Bayanat processes and distributes up-to-the-minute topographical, hydrographic and aeronautical information across the UAE. Beyond the government, these services are now available to public sector agencies and institutions.

Yahsat is Abu Dhabi’s first satellite company. Once launched this quarter, their first satellite will provide ultra secure Ka band coverage for the region. This coverage will facilitate governmental and civilian communications in areas including secure networking, mission critical applications, border control, disaster recovery and backup for key data networks.

Celebrating its 10th edition in 2011, IDEX is considered to be the ideal platform within the region for the defence industry to showcase emerging technology, equipment, trends and strategy. In total, more than 1,060 exhibitors representing over 50 countries are participating in the show.

Held under the patronage of His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, IDEX will continue through February 24th at the Abu Dhabi National Exhibition Centre (ADNEC).