Markets and Currencies Worldwide Rise As Dubai Fears Subside

According to a flurry of press accounts published late last week, you would have thought Dubai was poised to sink the world's major economies. Talk about wild speculation. Here are only a few of hundreds of stories illustrating that the fear mongering was wildly exaggerated.

NEW ZEALAND


source The Wall Street Journal

Westpac Bank markets strategist Imre Speizer said calming words from various officials in the United Arab Emirates, including in Abu Dhabi and the U.A.E. central bank, that they will support debt-ridden Dubai soothed markets. Dubai last week announced a standstill on servicing US$59 billion of debt chalked up by its flagship company, Dubai World.

Fear of a domino effect on Middle Eastern banks also subsided, leading to a general move toward risk-sensitive assets such as equities and the New Zealand dollar, Speizer said.

There have also been indications from China that it will be prepared to support Dubai in exchange for oil.

"All risk markets have rallied back and given back some of the panic selling. That's been the story of the Kiwi today."

The Kiwi, which traded down to US$0.7025, it's lowest level since mid-September, in New York trading Friday, bounced back to US$0.7211 in late local trading Monday and could easily march on to US$0.7300, Speizer said.

The currency also received support from strong October building permits data. Statistics New Zealand said permits rose a seasonally adjusted 11.7% from September.

Economists said the data could reinforce market expectations that the Reserve Bank of New Zealand may have to abandon its commitment not to raise its Official Cash Rate before the second half of next year.

"We see the surge in dwelling consents as adding to the likelihood that the RBNZ will start lifting the OCR prior to their previously stated second half of 2010," said UBS Senior Economist Robin Clements.

"We don't see any action on the OCR on Dec. 10, but we do expect the RBNZ to water down, if not drop, the commitment to keep the OCR at 2.5% until 2H10 and discuss the options/issues related to their 'exit strategy'."

The building data helped push swap rates up and bonds fell, although the main driver was the Australian market paring back some of last week's moves, a Wellington trader said.

He said, however, the market was thin and the main focus is on Tuesday's Reserve Bank of Australia rate decision, adding that a 25 basis point hike is almost fully priced in.


INDIA

source RTT News

Better-than-expected GDP data for the second quarter and realization that Dubai's debt crisis would have only a limited impact on local companies and banks helped the Indian market bounce back sharply on Monday.

The weakening of the dollar against other major currencies and a sharp rebound across Asia also improved sentiment. The major Asian markets rose by 2-3% on Monday, led by financials.

According to government data released on Monday, the Indian economy grew at a faster-than-expected rate of 7.9% in the second quarter of this fiscal year versus 6.1% in the previous quarter and 7.7% in the corresponding quarter last year, helped by government's stimulus and a boost in manufacturing and services. For the first -half of this year, GDP growth stood at 7% versus 7.8% in the year-ago period.

The benchmark BSE Sensex opened gap-up and rose to a high of 17,027 by mid-session. Since then, the benchmark pared some intra-day gains amid apprehensions that lower agricultural growth may hit third-quarter GDP growth. A negative trend in the European markets and volatile Dow futures also led to some profit taking in late trading.

The BSE Sensex closed at 16,926, up 294 points or 1.77% and the S&P CNX Nifty rose 91 points or 1.84% to 5,033.


SOUTH KOREA

source Wall Street Journal

SEOUL (Dow Jones)--South Korean shares recouped some of Friday's massive loss Monday as investors took heart from the rebound in European stocks and the limited decline in U.S. stocks Friday.

The Korea Composite Stock Price Index, or Kospi, rose 31.10 points, or 2%, to end at 1555.60 after falling 4.7% Friday.

Continued efforts by governments around the world to reassure financial markets helped ease jitters, said analysts.

The United Arab Emirates central bank said over the weekend that it stands behind its banks and branches of foreign banks.

Also South Korea's finance ministry reassured investors again Monday that the impact of Dubai's debt woes on domestic financial markets will be limited. It added that the government will monitor the situation on a daily basis and take action if needed.

"But the Kospi failed to recover above the 120-day moving average (around 1560) today, indicating investors' sentiment hasn't fully recovered yet. I'd rather describe today's rise as a mere technical one," said Min Sang-il, an analyst at E*Trade Securities.

"Foreigners bought back only about half of what they sold Friday, indicating they still lack confidence about the sustainability of today's rise. Investors want to check how Middle Eastern markets will react to the Dubai problems (after last week's holidays) and how this issue will develop," added Min.

Foreigners and local retail investors were net buyers of shares worth KRW128.5 billion and KRW160.7 billion, respectively. Domestic institutions sold a net KRW294.4 billion.

Investors will also watch closely how European and U.S. stocks perform tonight.

"Investors need to confirm if European stocks can extend their gains after Friday's rebound and see how U.S. stocks react to retail sales results after Black Friday," said Lee Kyoung-min, an analyst at Woori Investment & Securities. Black Friday, the day after the Thanksgiving holiday in the U.S., is traditionally marked with big discounts by retailers.

Financial and construction stocks recovered from Friday's sharp falls on fading fears that European banks may be badly hit by their exposure to Dubai debt, and trigger the kind of global systemic financial meltdown that accompanied Lehman Brothers' collapse last year.

KB Finance Group ended 2.8% higher at KRW58,000, and Shinhan Financial Group finished up 3.2% at KRW45,550.

Woori Finance Holdings jumped 9.4% to KRW14,550 after falling 11.6% Friday.

Among builders, Samsung C&T Corp advanced 5% to KRW45,600, Hyundai Engineering & Construction climbed 3.9% to KRW66,300, and GS Engineering & Construction rose 3.3% to KRW109,000.

Car makers regained strength after they lagged other sectors since September, said Min.

Hyundai Motor added 4.7% to KRW99,000, and Kia Motors advanced 4.6% to KRW17,150.


CHINA

source Wall Street Journal


SHANGHAI (Dow Jones)--The dollar's decline against major currencies because of fading concerns over the Dubai debt issue pushed the U.S. unit lower against China's yuan late Monday.

On the over-the-counter market, the dollar was at CNY6.8271 at 0930 GMT, down from Friday's close of CNY6.8284. It traded between CNY6.8270 and CNY6.8282.

The dollar-yuan central parity rate was set at 6.8272, largely unchanged from 6.8269 Friday.

Analysts said Beijing's pledge to maintain policies to support growth through 2010 shows it won't change the stable yuan policy in the short term.

The ruling Politburo of China's Communist Party met Friday to discuss economic policy for next year, and decided it will continue its proactive fiscal policy and loose monetary policy, according to a statement carried by state television.

Dealers said the dollar's fall in global markets Monday was due to the decision by the United Arab Emirates central bank to provide extra liquidity for banks in Dubai. The decision has restored confidence after Dubai World's debt restructuring plans roiled markets last week.

"The dollar is resuming its bearish trend against the euro and yen on the fading Dubai fears," said a Shanghai-based trader at a local bank.

Around 0930 GMT, the euro was at $1.5042, up from $1.4955 late Friday in New York, and the dollar was at Y86.11, down from Y86.75.

A Shenzhen-based trader at a local bank said: "The market has reached the consensus that the Dubai debt issue isn't big enough to trigger a systemic failure in global financial markets."

Demand for the U.S. unit from local importers helped limit the dollar's downside against the yuan, the trader added.

Offshore, one-year dollar-yuan nondeliverable forwards were at 6.6280/6.6320, down from 6.6330/6.6430 late Friday afternoon.


UNITED STATES

source Wall Street Journal

NEW YORK (Dow Jones)--Treasury prices slipped Monday, losing some of Friday's flight to safety run-up, as worries subsided a bit about Dubai's debt situation.

U.S. government bond prices fell, with longer maturity Treasurys hit harder. The United Arab Emirates' Central Bank stressed Sunday that it "stands behind" the country's lenders, who face potentially heavy losses from their exposure to Dubai World, which is currently struggling with about $60 billion in liabilities. Comments from a Dubai financial official indicating the government would not guarantee the Dubai World debt briefly pushed Treasury prices higher early Monday, but the rally faded as New York trading picked up.

"The general consensus seems to be that broader contagion will be limited mostly to the Gulf region," said analysts at RBC Capital Markets in New York.

Friday, the two-year yield, which moves inversely to its price, fell as low as 0.613%, a year-low. Monday the two-year Treasury was flat at 0.70%. The 10-year yield fell Friday to as low as 3.154%, a level it last hit in May. It was down 8/32 to yield 3.24% Monday. The 30-year Treasury was off 11/32 to yield 4.23% in recent trade.

Two Treasury bills maturing in January were being offered at a negative rate Monday, at around -0.01%, said Ian Lyngen, senior government bond strategist at CRT Capital Group LLC in New York. T-bill rates turned negative late this month as investors began to stock up on the safest securities heading into the end of the year at a time when bills are in shorter supply. When investors buy T-bills at negative rates they are essentially paying the government to keep their money safe.

Meantime Monday, Treasurys responded calmly to early reports of a lackluster beginning to the holiday shopping season. While U.S. shoppers were out in full force over the Thanksgiving weekend, they spent less in almost all regions of the country.

Some 195 million consumers visited stores and Web sites from Thursday through Sunday, the National Retail Federation said, compared with 172 million over the same period last year. Average spending this year though was $343.31, down from $372.57.

Overall, Treasury market participants expect demand for government debt to continue into the end of the year as investors park money made in riskier assets in the safer Treasurys market. Short-term, demand should pick up some Monday, the final day of November, amid month-end buying needs. Treasurys should benefit as investors need to buy bonds to match the monthly adjustment in benchmark indexes. Such month-end buying is more heavy in Treasury quarterly the refunding months of February, May, August and November. The Treasury index gains 0.11 years this month, strong compared to an average month, but a bit tame for November refundings, according to CRT Capital Group.

Data-wise Monday, market participants get a peek into regional manufacturing in the U.S. Data showed New York City business activity posted a fourth consecutive month of expansion in November. Still to come are reports on manufacturing in the Chicago area and in Texas, at 9:45 a.m. EST and 10:30 EST, respectively.

RERA projects construction updates in Dubai

source Go Wealthy

Almost three quarters of property developments in Dubai have made construction progress despite the economic slowdown, according to preliminary data from the industry's regulator. Of 552 projects, more than 72 per cent showed some construction progress, while 17 per cent were "stalled" and 11 per cent were "delayed", according to the latest data from the Dubai-based Real Estate Regulatory Agency (RERA), which is undertaking a study to map construction progress across the emirate.

The RERA launched a review of 1,108 off-plan developments in the emirate in February to try to increase transparency and trust in the property market. It has already completed reviews of about half of the total, according to its website.

The survey would help the RERA decide which projects fitted into which category,. Under the review, called the independent progress monitoring report, each project is rated from 0 to 5 for its construction progress, with 5 being complete. The RERA website displays a coloured arrow for the speed at which a project is moving along. A green arrow denotes the project is progressing according to schedule, while an orange arrow means the project is advancing according to a new schedule approved by the RERA. A red arrow means it is delayed and a black symbol means the project is stalled.

Factors affecting real estate recovery detailed in latest edition of The Harbor Report

source AME Info

The findings of the Harbor Report indicate that activity in the second quarter improved significantly over the previous period with the residential market in the UAE being driven by a flight to affordable assets.

Harbor Real Estate Brokerage, an integrated real estate service provider in Dubai, has announced the release of the latest edition of The Harbor Report.

The quarterly report covers a range of the hottest Real Estate topics, including a special feature on the recovery of the real estate market.

In addition it will give an objective assessment of where Dubai's Real Estate industry is at present and what are the latest trends in the industry that was highly affected by the economic crisis.

Sales transactions, especially in the latter part of the second quarter, increased when compared to rental transactions with middle to middle-lower income earners taking advantage of the new levels of affordability.

Managing Director, of Harbor Real Estate Brokerage, Mohanad Alwadiya said:
'This quarter, the Harbor Report will be focusing on the local market recovery. We look at factors that are likely to drive the recovery and the influence of the global economic recovery as it impacts the local scene here in Dubai. Harbor's results for the second quarter were promising. Not only did we see a 55% increase in the number of viewings but we also saw sales transaction double.'

Since April 2009 when the first Harbor Report was issued, it has already become well known for its ability to accurately portray industry developments. With in-depth analysis, insider views and trends, the report has already received positive feedback from industry professionals.

Although the report is primarily aimed at professionals in the real estate industry, it also provides valuable information for developers and contractors who want to keep abreast with the latest industry developments.

'In our first Harbor Report, which was issued in April 09, the contents and subjects discussed included credit notes, mortgages and the impact of the global recession on Dubai. This quarter however, the report is focusing more on the initial stabilization and eventual recovery of the real estate market,' added Alwadiya.

Analysts see right cues for holistic recovery

source Emirates Business 24/7

The UAE will be at the forefront of an economic recovery in the region as it gradually recovers from the fallout of the global recession, according to financial analysts who spoke to Emirates Business.

They added that the recovery will cover all sectors, primarily real estate, through increasing confidence of local and foreign investors. Strong indicators are already available to confirm a recovery in the UAE's economy, especially with the continuing good performance by banks and several companies in other sectors. To add to this, oil prices are rising as well, they said.

Profits of most banks and companies are expected to be substantial at the end of this year, which will give greater impetus to the stock markets, completing the recovery of the national economy, the experts added.

Nabil Farhat, Managing Director of Al Fajer Securities, said the financial markets have already started to recover in a clear and promising manner, especially after the price of oil increased and stabilised at the $70 per barrel mark.

Also, companies disclosed better-than-expected profits in the second quarter of this year, despite there being a drop in the profits compared to the same period last year. This also made the share prices of the listed companies more attractive, said Farhat.

He said an expected drop in the dirham's value, as a result of a corresponding drop in the dollar's value in comparison with the world's major currencies, will improve the attractiveness of the UAE assets in the future, especially in the real estate sector.

Farhat also said liquidity was gradually improving, and the drop in shares prices will sooner or later boost the performance of the UAE bourses. International reports about a low-interest environment continuing globally until the end of 2010 will also reflect positively on the local economy.

Agreeing with Farhat was Dr Humam Al Shamma, Economic Advisor to Al Fajer Securities. He said foreign establishments were continuing to enter the UAE's stock markets and the markets themselves were sending out strong indications of de-coupling from the global markets and showing their own independent behaviour. This means the markets will only improve from here on, Al Shamma said.

The objective and psychological reasons behind the current strong link between local and world markets will disappear once the liquidity crisis is over, and the markets will go back to performing in accordance with the forces of the local markets and the companies listed in them, he said.

Al Shamma said there were strong signs of recovery in the UAE economy, which has been confirmed by recent reports and studies – the latest being a report by the Abu Dhabi Chamber of Commerce and Industry (ADCCI) predicting a rise of seven per cent in the gross domestic product, excluding oil, in 2009 to Dh565.7 billion compared to Dh528.7bn last year.

Many companies that disclosed their financial results recently reported an improvement in their performance in the second quarter of this year compared to the first, said Al Shamma, and added that these include – significantly – many real estate companies.

He said performances were positive in the banking sector, too, with profits growing by more than seven per cent in the first half of this year in comparison with the same period last year.

Al Shamma said: "I believe the ability of the country's economy to recover will be greater after the UAE has shaken off the impact of the crisis through strong government support of the financial system and the rapid measures taken by the Central Bank – the latest of which was finding a reference interest rate for the dirham."

Also, improvements will cover the real estate sector, which will be supported by the population growth mentioned in the ADCCI report. It expected the population to grow to 6.040 million in 2009 from 5.716 million last year, Al Shamma said.

Mohammed Ali Yasin, CEO of Shuaa Securities, said the economy was witnessing considerable growth, and the amount of bank loans had also gone up.

He added that the stock markets were showing positive and strong cohesion day after day, supported by an increase in local and foreign investment, which have been balanced in the Dubai and Abu Dhabi bourses.

Also, the second quarter results have mostly shown positive trends and point to an overall profitable year for this financial year.

The rate of completion in current real estate projects has also gone up, he said, showing that real estate companies were no longer facing major obstacles.

Dubai developer Deyaar appoints new chairman

original source Reuters

Dubai developer Deyaar said it appointed Abdulla Al Hamli as the company's new chairman, replacing Nasser Al Shaikh who resigned last month.

In a meeting of the board of directors, Deyaar decided to accept the resignations of Al Shaikh and board member Khaled Al Mass, a statement posted on the bourse website said.

The company also elected and appointed Fahd bin Fahd and Mohammed al-Nahdi as board members, replacing two members who have also resigned.

Related: Deyaar Properties chairman resigns

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Al Hamli is chief executive of Dubai Islamic Bank, which has a 41 percent stake in Deyaar.

Shaikh resigned earlier this month from several government-linked positions, including Dubai Islamic Bank, just a month after he was replaced as head of the emirate's finances. (Reuters)

Prices of residential property at the top end of Dubai's real estate market have bottomed out

source Zawya

Prices of residential property at the top end of Dubai's real estate market have bottomed out and are now witnessing increases of between 20 and 40 per cent, a roundtable discussion between realtors and developers organised by Emirates Business has shown.

"Iconic" locations such as The Palm Jumeirah and Downtown Burj Dubai are at the forefront of this revival, they said.

"We are seeing increased activity from potential buyers who want to buy luxury properties, since prices are currently hitting bottom," said Mohanad Al Wadiya, Managing Director, Harbor Real Estate.

"Last week we sold a one-bedroom apartment in Downtown Burj Dubai with a Burj view for Dh2.1 million, which was going for about Dh1.7m to Dh1.8m in December 2008."

Average prices for signature villas on The Palm Jumeirah were in the range of Dh9 million to Dh17m in Dec-ember last year, but now are up in the range of Dh12.5m to Dh19m, according to Wadiya

Jose I Murcia, Associate Director, Group Seven Properties, said luxury residential prices have stopped declining, but luxury commercial properties are continuing to see a drop in prices. "Locations such as Down-town Burj Dubai and The Palm Jumeirah are iconic and with the prices falling it does make an attractive proposition for buyers," he said.

Mohammed Zaal, Chief Operating Officer, Al Barari, said prices have fallen in the luxury segment, but not significantly. "Our prices reduced by as little as 20 per cent from their peak last year, since most of the demand for our properties is from the end-users.

"People who are willing to put money into high-end, or luxury properties are long-term investors who want

to remain invested even during recession. These individuals do not need financial backing and are willing to put forward whatever is needed if it means that they will get the level of quality they are looking for in their homes."

Dubai real estate on road to recovery

source Zawya

Although cash and confidence issues still prevail, Dubai's property market will witness the first green shoots of recovery sometime between the end of 2009 and the second quarter of 2010, according to a panel of industry experts speaking here today (Tuesday 2 June) at the third 'not for profit' Cityscape Connect business breakfast,

Attended by more than 100 property executives, legal advisors and investors, the industry forums were initiated to stimulate networking, transparency and open debate on the key issues affecting the Dubai real estate industry which although experiencing a dramatic reversal of fortunes, is now showing signs that the market is stabilising and prices are beginning to bottom-out.

Elaine Jones, CEO of Dubai-based real estate agency Asteco echoed the sentiment of the panel: "It's about cash & confidence. For example, we need to reduce interest rates, relax lending criteria and address the residency visa issue. This will at least start to bring back much needed confidence to the market and begin to stimulate growth."

Indeed investor confidence was debated at length, examining numerous issues such as defaults, incomplete projects, late payments and fraud. "Trust is strained," stated Sunil Gomes, of Guru Real Estate. "Credibility is king, if we lose that we have nothing. Projects must be completed and investors better protected."

Steven Henderson, Partner in legal firm Clifford Chance, agreed that trust was paramount but added that the law had previously been struggling to keep up with the rapid growth of the market and that an over regulated market might have an adverse effect and stifle growth.

"Dubai has introduced Escrow accounts and the Strata law, but a federal law for real estate would also help to restore confidence. Banks also have a role to play here especially when developers experience credit or cash flow problems" he said.

Difficulties in the banking sector have been widely reported, however, the panel agreed that although credit was available for exceptionally low risk customers, besides rates and approval ratings, the sector needed consistency.

"Historically, the region has practiced 'relationship lending' but now with the credit crunch, banks are more cautious and have raised their minimum lending criteria especially for real estate projects. They can no longer just use the project as security they often also require ring-fenced assets independent to the project as security."

However despite industry issues the panel was optimistically cautious about the timescale for recovery. Asked when Dubai could expect a market recovery, the general consensus was sometime between the end of 2009 and the second quarter of 2010.

"This clearly shows that industry sentiment has moved into positive territory and it is equally important that Cityscape through the Connect series of events continues to provide a platform for open debate. As the largest real estate event brand of its kind in the world, it is crucial in these times of economic uncertainty that Cityscape remains a trusted brand, giving back to the industry that it supports," said Rohan Marwaha, Managing Director of the Cityscape

Moderated by Bob Hird, Senior Director and Head of Investments at CB Richard Ellis, other industry experts on the panel included, David Macadam, Director of Commercial Division at Better Homes and Shahram Shamsaee, SVP Shopping Malls, Majid Al Futtaim Company.

Cityscape Connect is an initiative of Cityscape, the real estate service brand that has achieved international recognition and success. Cityscape events are held in Dubai, Singapore, Abu Dhabi, New York, Mumbai, Moscow, Saudi Arabia and Latin America. Cityscape events attract key industry figures such as international investors, property developers, governmental and development authorities, leading architects, designers, consultants and senior professionals involved in the property industry. Furthermore Cityscape has also established Cityscape Intelligence, an online subscription based service for real estate professionals, Cityscape Datamonitor, a real estate research consultancy, and the Cityscape magazine.

Dubai sees residential sales double in Feb

source Arabian Business

Residential sales in Dubai picked up in February, with the number of properties changing hands doubling that seen at the start for the year, according to a new report from Jones Lang LaSalle.

April’s edition of Global Market Perspective says that almost $520m of mainly residential sales were recorded in Dubai in the second month of the year – twice the value seen in January.

Opportunistic investors from the local region and overseas were starting to regain interest in the sector, in part as a result of increased regulation and transparency, the report says.

Related: Dubai house prices fell 41% in Q1 - Colliers

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The trend should “translate into increased commercial real estate transactions in the fourth quarter of 2009”, it adds.

The report goes on to predict that the market will stabalise in 2010, ahead of a full price recovery in 2011.

However, although capital was being redirected in the Middle East the region would see a net outflow as sovereign and private investors take advantage of overseas markets.

"While the regions’ property markets have adjusted much more quickly than other regions, 2009 will be a year of correction,” Jones Lang LaSalle analysts said.

The refinancing of banks had helped boost liquidity in the real estate sector, and investor interest had been renewed by the lowering of prices.

Plans for new office and residential space in Dubai for 2012 is now half the 2008 figure, the report points out.

The Middle East is one of the few global regions tipped to see positive economic growth this year, with the International Monetary Fund estimating 2.5 percent growth.

Ocean Heights real estate project in Dubai Marina reaches 50-storey mark

source Go Wealthy

DAMAC Properties, Dubai-based luxury lifestyle provider, has announced the completion of the 50th floor of its flagship real estate project - Ocean Heights at Dubai Marina. Gearing to become one of the tallest buildings in Dubai Marina, 84-floor tower is being completed at the rate of a floor a week.

DAMAC Properties, Chairman & Founder, Hussain Sajwani, said, "This is a significant day for Ocean Heights and also for DAMAC Properties. At a time when all the talk is of construction slowing down and projects being cancelled, we are pleased to announce that we are going full steam ahead on Ocean Heights."

Construction of Ocean Heights commenced in 2007 and completion is expected in the summer of 2010. The real estate development will offer 680 apartments ranging from 1 to 3 bedrooms. In addition, several floors of the building will feature DAMAC Properties' Signature Series penthouse range. It will offer variety of leisure amenities apart from being well connected with Dubai Metro.

Real estate gains lift gloom enveloping Dubai market

source Go Wealthy

Dubai stock market jumps over 1 per cent in early trading, postulated by Dubai-based realtor, Emaar Properties, benfiting1.94 per cent. Another Dubai-based real estate giant to gain was Deyaar with 4.17 per cent.

In Abu Dhabi, the region's best-performing market this year, the benchmark rises 0.41 per cent as shares in First Gulf Bank soar 9.94 per cent.

Abu Dhabi National Energy Co fell by 0.58 per cent, firm said it had revised its 2008 earnings downward compared to previously reported figures due to falling energy prices and impairments on US and Canadian investments. Markets in the United Arab Emirates are seen edging higher, tracking a rally in Saudi Arabia in the previous session and as speculation about possible moves to stimulate the economy whets risk appetite in Dubai.

UAE real estate market 'set to bounce back'

source Gulf Daily News

DUBAI: The UAE real estate market will bounce back within the next eight to 12 months, says a leading Dubai-based real estate developer.

Memon Investments, has based its optimistic forecast on recent industry findings, which reflect a decline in the construction cost per square foot within the emirates by an average of 30 per cent since the onset of the economic crisis.

The developer has also committed to continue fostering its strong relationships with leading construction companies, in line with its goals to hit the delivery targets for its projects ¼ starting with the 75 million UAE dirhams 'Champions Tower I', which is due for delivery by the end of this year.

Industry experts point to the massive drop in the prices of steel, as well as that of other materials including aluminium, wood, glass and diesel.

The declining cost of labour and supervision due to recent redundancies and terminations has also contributed to the dip in construction expenditures, which are now pegged between 400 to 900 dirhams per sq/ft in Dubai and Abu Dhabi, and to as low as 170 and 200 dirhams per sq/ft in Ajman.

Amidst speculations of further decrease in construction costs in the coming months due to plunging oil prices, building materials costs and transportation prices, Memon Investments is focusing all its resources towards hitting the delivery deadline set for all its announced projects.

"In lieu of the massive correction in the prices of basic construction materials, we are now focusing our strategy on the implications of this development, particularly with regards to the construction and delivery of our launched projects," said Memon Investments managing director Ahmed Shaikhani.

"Our strategic planning and consolidation efforts are being driven by our strong resolve to stay true to our promises to our customers in the face of this economic crisis, and we are proud that our actions are paying off with the steady progress we are witnessing in all our projects."

Memon Investments currently has a portfolio of projects valued at close to 1.34 billion dirhams, which includes the high profile residential 'Champions Towers' series, the luxurious 'Gardenia I & II', the 'Frankfurt Sports Tower I' and the 'Cambridge Business Centre'.

The developer also announced that it has identified major master developments in Dubai, including Jumeirah Village South, MIZIN and Downtown Jebel Ali as locations for its new projects, which will include luxury residential, commercial and mixed-use developments.

Dubai real estate on road to recovery

source Al Bawaba

Although cash and confidence issues still prevail, Dubai’s property market will witness the first green shoots of recovery sometime between the end of 2009 and the second quarter of 2010, according to a panel of industry experts speaking here today (Tuesday 2 June) at the third ‘not for profit’ Cityscape Connect business breakfast,

Attended by more than 100 property executives, legal advisors and investors, the industry forums were initiated to stimulate networking, transparency and open debate on the key issues affecting the Dubai real estate industry which although experiencing a dramatic reversal of fortunes, is now showing signs that the market is stabilising and prices are beginning to bottom-out.

Elaine Jones, CEO of Dubai-based real estate agency Asteco echoed the sentiment of the panel: “It’s about cash & confidence. For example, we need to reduce interest rates, relax lending criteria and address the residency visa issue. This will at least start to bring back much needed confidence to the market and begin to stimulate growth.”

Indeed investor confidence was debated at length, examining numerous issues such as defaults, incomplete projects, late payments and fraud. “Trust is strained,” stated Sunil Gomes, of Guru Real Estate. “Credibility is king, if we lose that we have nothing. Projects must be completed and investors better protected.”

Steven Henderson, Partner in legal firm Clifford Chance, agreed that trust was paramount but added that the law had previously been struggling to keep up with the rapid growth of the market and that an over regulated market might have an adverse effect and stifle growth.

“Dubai has introduced Escrow accounts and the Strata law, but a federal law for real estate would also help to restore confidence. Banks also have a role to play here especially when developers experience credit or cash flow problems” he said.

Difficulties in the banking sector have been widely reported, however, the panel agreed that although credit was available for exceptionally low risk customers, besides rates and approval ratings, the sector needed consistency.

“Historically, the region has practiced ‘relationship lending’ but now with the credit crunch, banks are more cautious and have raised their minimum lending criteria especially for real estate projects. They can no longer just use the project as security they often also require ring-fenced assets independent to the project as security.”

However despite industry issues the panel was optimistically cautious about the timescale for recovery. Asked when Dubai could expect a market recovery, the general consensus was sometime between the end of 2009 and the second quarter of 2010.

“This clearly shows that industry sentiment has moved into positive territory and it is equally important that Cityscape through the Connect series of events continues to provide a platform for open debate. As the largest real estate event brand of its kind in the world, it is crucial in these times of economic uncertainty that Cityscape remains a trusted brand, giving back to the industry that it supports,“ said Rohan Marwaha, Managing Director of the Cityscape

Moderated by Bob Hird, Senior Director and Head of Investments at CB Richard Ellis, other industry experts on the panel included, David Macadam, Director of Commercial Division at Better Homes and Shahram Shamsaee, SVP Shopping Malls, Majid Al Futtaim Company.

Cityscape Connect is an initiative of Cityscape, the real estate service brand that has achieved international recognition and success. Cityscape events are held in Dubai, Singapore, Abu Dhabi, New York, Mumbai, Moscow, Saudi Arabia and Latin America. Cityscape events attract key industry figures such as international investors, property developers, governmental and development authorities, leading architects, designers, consultants and senior professionals involved in the property industry. Furthermore Cityscape has also established Cityscape Intelligence, an online subscription based service for real estate professionals, Cityscape Datamonitor, a real estate research consultancy, and the Cityscape magazine.

Bargain hunters steal the show

source The National

Despite a more subdued atmosphere at the opening of Dubai’s International Property Show, brokers and professionals nevertheless remained on the lookout for a good deal.

“As the first show of the year, this is a good barometer for the market,” said Vincent Easton, the sales director for Sherwoods Independent Property Consultants. “It’s slower, yes, but we have seen that some of the smart investors are starting to come to Dubai. They are looking at the medium-term to long-term. They know there are some good offers out there.”

At similar conferences before the market turned last summer, investors would queue for the chance to buy an apartment that was often well out of their price range. With the general slowdown in sales and a decline in prices, many of those amateur investors appear to have abandoned the market.

Mr Easton said he was seeing mainly professional investors with clear business models in mind for their purchases and end-users who had been waiting for the market to subside.

“In many ways this is a good thing,” he said. “Prices were rising so quickly before that it was becoming borderline unaffordable to live here... Population growth is key to the real estate sector here.”

One of the most popular areas during the first day of the three-day show was the pristine white stall of the Real Estate Regulatory Authority (RERA) and the Land Department where people were keen for information on the changing regulatory environment.

Khalid Obaid al Mutaiwei, the senior director of the real estate development trust account department at RERA, said he and his colleagues had dealt with many disputes between buyers and developers since the market began to slow. Where possible, they play the role of mediator. But in some other situations they could only direct the offended person to the Property Court to file a case, he said.

“It’s a slowdown, but it’s not a recession,” Mr al Mutaiwei said. “Prices are returning to what they were before. Personally, I like it better now. When everything was quick, that’s when we started having problems.”

He said his role was to get developers to ensure that each project had its own escrow account, whereas, previously, developers sometimes put all project money into a central account. He said that there were now about 670 escrow accounts set up by 500 registered developers.

“The key now is complete transparency,” Mr al Mutaiwei said. “We are all in the same boat.”

Several developers put on a confident face with costly stalls, including Bonyan International Investment Group and Falconcity of Wonders.

Salem al Moosa, the chairman and chief executive of Falconcity, said his enormous project in Dubailand was going ahead as scheduled. About 360 villas in the first phase were expected to be delivered soon, he said.

“I would love to see Falconcity go as planned and it is currently ongoing,” he said. “Unless there is a force majeure, like the mortgage market crashes or an earthquake, I don’t think there is any hindrance to going forward. We are confident, especially because the Government is supporting infrastructure, market development, the banking system and new regulations.

“We can’t have a loose market in the UAE. People were trying to make a quick buck. That is over now.”

Mr al Moosa’s thoughts echoed the upbeat remarks of Sheikh Mohammed bin Khalifa, the head of the Land Department, earlier in the day. Sheikh Mohammed said at the opening of the show: “Dubai will be the fastest city to recover from the impact of the ongoing credit crunch, and the emirate’s real estate sector will once again witness a period of long-term boom. However, developers need to remain focused on their goal of continuing with the projects that they have already started and ensure that these projects are delivered on time.”

There were pockets of genuine gloom too. In one corner, a British salesman was trying to sell distressed property in Florida to distressed owners in the Emirates without much success.

No Busch Gardens, SeaWorld for Dubai

original source Orlando Sentinel

Busch Entertainment Corp., owner of SeaWorld and other theme parks, has shelved plans to build four parks in Dubai, making the project the Middle Eastern state's latest casualty amid the international credit freeze.

Worlds of Discovery was announced just a year ago with a media spectacle that included performing killer whales and renderings of the parks on a man-made island shaped like SeaWorld's signature Shamu. Busch Entertainment President Jim Atchison touted it as a "momentous occasion" and a chance to put the Busch brands on a "true global stage."

The setback is one in a string of recent stall-outs for Dubai, often held up as Orlando's chief rival for tourism and as an emerging health-care hub with a development set to outpace Orlando's attempt to establish its own "medical city."

Busch and partner Nakheel PJSC, a state-backed real-estate company and leading developer in Dubai, agreed last month to suspend work because of worsening financial conditions. The two companies will reassess the project sometime this summer.

"As successful as they [Nakheel] are, there's certainly a limit to how far they can extend themselves," said Busch spokesman Fred Jacobs. "It's just a difficult time to start a new project."

The emirate's troubles are being blamed on a combination of downward-spiraling oil prices and real-estate values along with the related credit crisis.

Busch recently reassigned the handful of executives who were working on the Dubai parks and moved them back to its headquarters on John Young Parkway from a nearby satellite office.

The first two parks -- SeaWorld and Aquatica -- were scheduled to open in December 2012. Busch Gardens and Discovery Cove were to follow in 2015.

The parks were to sit on a 440-acre island, part of a cluster of man-made islands by Nakheel. Plans for the other islands connected to the parks called for as many as 56 hotels, shopping and housing for as many as 280,000 people.

Jacobs emphasized that Busch and Nakheel remained committed to the project and would move forward "when economic conditions permit."

Busch's end of the deal involved licensing its brand as well as planning and managing the parks. InBev's 2008 takeover of Anheuser-Busch, the theme-park group's parent company, did not affect the decision, he said.

"We don't have any idea what the future holds," Jacobs told me, and he indicated a scaled-back version of Worlds of Discovery was not under consideration.

The announcement comes as a number of projects planned for Dubai appear to be halted, though a Universal Parks & Resorts spokesman said Universal's Dubailand park is still a go and scheduled to open in 2012, two years later than the opening targeted when the park was announced in 2007.

In addition to the delayed opening of Dubai's second airport and other deferred ventures, Moody's Investors Service said this week that it may cut its credit rating for some of Dubai's top state-backed companies.

That all adds up to bad timing for the Metro Orlando Economic Development Commission, taking a group of nine local business people led by Orange County Mayor Rich Crotty on a seven-day trip to Dubai on Thursday.

The price tag for the trip is $79,195, a mix of private and taxpayer dollars, and the goal is to promote Orlando as a business destination as well as introduce local businesses to potential opportunities in Dubai.

On the agenda, in fact, is "Nakheel Day." The group, which includes Florida Hospital Chief Executive Lars Houmann, Florida's Blood Centers Chief Executive Anne Chinoda and Crotty chief of staff George Rodon, among others, is to hear a presentation at Nakheel's sales center and take a boat trip to Palm Jumeirah.

It's possible that during the excursion to the palm-tree-shaped cluster of islands, the group will catch a view of Palm Jebel Ali, the island that was to be carved into a killer whale for the Busch parks.

For now, it remains an artificial swath of desert jetting into the Persian Gulf.

Back to basics

source Arabian Business

Mishal Kanoo, the Kanoo Group's outspoken deputy chairman, points to short-termism as the cause of current economic ills. But will the downturn prompt more firms to adopt his cautious approach?

Mishal Kanoo is holding up an issue of Gulf News with an exasperated look on his face.

The daily's front page is gloomy - more falls on the UAE stock markets, led by the Emirates' real estate sector. But what really concerns the deputy chairman of Kanoo Group is on the back - an advert from a supposedly ethical property firm declaring "What downturn?" and imploring the paper's readers to go out and buy homes.
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He is incredulous. "Have you seen this?" he asks. "How can you give people this type of false hope? Why would you have done that if you were an ethical company? If this is not unethical, I don't know what is."

Sitting in Kanoo's office, it's easy to grasp his sense of frustration with some of the business practices of other firms in the region. Situated in the heart of Bur Dubai, the group's headquarters has an old-world Gulf feel, rather than the clinical, minimalist style of newer commercial developments.

It is filled with paraphernalia associated with his outside interests, including rugby tournament souvenirs and a multitude of paintings; a passion that also sees Kanoo help run Dubai art gallery Meem.

Kanoo points to the "very conservative outlook" of the family firm, whose net worth, including interests in travel, hospitality, manufacturing and energy, is estimated at over US$6billion.

"As a company, we don't tend to take risky positions," he says. "We are 119 years old. I don't want turnover - I want consistency. It's a tortoise and hare type-of-thing. The tortoise doesn't make the big jumps, but it doesn't make the big falls either. The downturn isn't hurting us as much but it doesn't matter how good your business is, sometimes you get smacked with everybody else and you have to find ways to adjust."

While Kanoo says he avoided the temptation to over-invest during Dubai's boom years, and has long-since shifted the group onto a regional footing, he concedes that it is not immune to a downturn that some analysts expect to see the UAE's economic growth to slow to just over 3% this year.

He is critical of companies' tendency to over-extend themselves during the good times, as well as for the "knee-jerk reaction" of cutting staff costs now that things are more challenging.

He can't remember the last time he fired an employee. "It's been a while," he says. "I think it was two years ago, but even when we fire someone, we don't fire them like others do. We don't like the idea of firing people unless we really have to. We will find another position for them. We give them an opportunity to resign, which is better for them financially. Unless a person has stolen or done some sort of criminal act - leaked information or something - we try to give them the benefit of the doubt."

"Firing people, cutting advertising, cutting IT, cutting travel, and cutting training are the usual consequences of a downturn. But like most Islamic businesses, a person has to show us a significant reason to fire them, or their job has to become so redundant that there is no other option. It is not something we aspire to. It takes a long time to build people up to your standards and to understand the culture of your company. I would rather spend a bit more on training a person than hiring someone. With this person, you know what you have."

Despite this, Kanoo concedes he did have difficulties keeping a tight rein on staff costs during the past few years in Dubai, when competition between firms for talent grew alongside its economic expansion.

"We try to be careful with recruitment," he says. "Unfortunately, the last few years have been weird - because of inflation, you were hiring people at a higher rate. I kept mentioning to my managers not to do that as these people become really expensive. It becomes last in first out, and I really don't want to do that."

He continues: "Prior to this collapse, from mid-2006 onwards, [companies'] main concern was to have bodies on the ground. They were not looking long term. People would come in and say ‘I want a raise', but I resisted because when things turn down, they will be the first one on my list to say ‘Bye bye'. The young ones, especially, over-believe the hype. They think that if I don't give them a raise, someone will hire them, but they will hire them only for a short time. I am not going to compete with you if you want to go to ‘bank x' or ‘bank y', or a publicly-listed company. I can't compete with them because I don't generate the income they do, but at the same time I am not going to fire you as quickly as them."

Although Kanoo says his priority is now consolidating the group "from within", he says it is looking for takeover opportunities in the sectors in which it operates.

But he adds that external acquisitions carry significant risks: "This is an opportunity for those companies that have the access to finance to consolidate. We are definitely looking for companies to purchase within our fields."

"The problem is there are too many people hurting at the current time. You don't know what you are buying. We are a very conservative company and we don't jump in and take risks. I don't want to be burdened with someone else's baggage. It takes a long time to do proper due diligence on a company. While we are looking to buy, it's not something we will be looking at as a knee-jerk reaction."
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Although Kanoo says he is "extremely optimistic", and welcomes the difficulties now facing less scrupulous businesses, he concedes that the region could be in for an extended period of pain. Barring "any substantial global change", he points to the price of oil as the over-riding factor in any recovery: "How deep is this recession? I don't know. We will find out. Assuming no firecrackers it should start to recover somewhat in six months. This is based on the assumption that three things happen. The first is that monetary policy takes effect and banks start to trust each other. The second, more important factor, is that stimulus packages in Europe and Russia start to kick in."

"The third and most important aspect is the US economy. They are the main drivers, no matter what people say. No one will be taking the US' place for a while. For us, the region usually has a lag of three to six months, so whatever happens globally will take that amount of time to be reflected here."

Beyond that, Kanoo says the main variable in the regional economy continues to be the price of its main export: "You can argue about it till the cows come home, but let's face it, we are an oil industry. Our main export is oil and it is the main driver for economies here. If the price of oil tends towards the teens, and the recession is as bad as people are saying, then everyone comes to a shutdown and this recession becomes not a depression, but you will find a lot of people who are depressed."

"If it stays in the US$30s or US$40s [per barrel], some unnecessary projects will come to a standstill but the desalination and power plants will continue. If the price of oil tends to the US$50s or US$60s you won't have a boom, but you will have growth back again."

Kanoo says there are some sectors in the regional economy that "might never recover". "One is property," he says.

"Forget it. You will not see a boom like that for a long, long time. Banks are not willing to lend and unlike some people, they do have a long memory. The high-end luxury items will also start to tend lower and you will see that here as well. Go down to the second hand car market and look at the super luxury cars on sale. Another is advertising. There will always be people that advertise but the boom that happened on the back of the property boom will never happen again. You are never going to see people spending money that way."

However, he says things are unlikely to come to a complete standstill: "The industries that are going to be slightly affected, rather than majorly affected, are things to do with infrastructure, industry, manufacturing - heavy duty industries. Infrastructure needs to continue no matter what. I still need to build roads, but I don't need to build homes anymore because I have an abundance of homes coming up. I still need to construct warehouses. Dubai has not come to a standstill, despite all of this. There might be some pressures on freight forwarding companies, for example, because of over-capacity. But is Dubai going to stop becoming a logistics centre between Europe and the Far East? I doubt it."

So will the economic situation now encourage more caution among firms in the long term? Kanoo has his doubts: "My economics professor always told me that investors are rational. Really? Do you remember 2000? It was the last major crash. If you take the average age of a stockbroker on Wall Street as 30, they were at university when it happened. So as far as they are concerned it didn't exist."

Dubai property prices will stabilise Q3 - expert

source Arabian Business

Property prices in Dubai will hit rock bottom in the third quarter of this year, according to an industry expert.

Iseeb Rehman, managing director of independent property consultant Sherwoods, said at a recent meeting of the Dubai Property Society: "I think you will see prices leveling off around the third quarter of 2009.

That is when you will see the bottom of it.There will then be a period when prices start to hold up for at least 12 months before we start to see them move upwards again," Rehman added, according to Construction Week.
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Jones Lang Laselle, managing director Blair Hagkull, agreed. "2009 is a period of transition. In a year we will start to see some improvement in specific sectors. Ultimately, by 2011 we will be back on track," he said.

But property consultancy Cluttons resident partner Ronald Hinchey warned that it may take much longer before property prices return to 2008 levels.

"The Hong Kong market was quite similar to Dubai. It went up steeply for seven or eight years. When it corrected in 1997, it corrected by 40%-60%. Here we are 11 years later and prices there still haven't got back to where they were."

La Fontana real estate development breaks ground in Dubai

source Go Wealthy

Triveni Builders and Promoters Ltd (TBPL), a Dubai-based real estate developer wholly-owned by the Triveni Trading Group, has broken ground on its Dh100 million worth residential building, La Fontana. La Fontana is a 6-storey low-rise building located in the Arjan Master Community in Dubailand. Strategically located within close driving distance to the Mall of the Emirates, the Gold and Diamond Park and the Global Village, La Fontana offers prices from Dh498,600 for studios to Dh1,315,900 for 2-bedroom apartments.

Ashok J. Galgotia, CEO, Triveni Builders and Promoters Limited, said, "We are very pleased to have genuine end users as our buyers who look at La Fontana as a sound and a long-term investment. The construction has begun and we shall work continuously to ensure timely completion of the project by mid of 2010 despite the current slowdown in the real estate market."

La Fontana is part of the Arjan Master Community that includes residences, schools, parks, hotels, offices, retail and community spaces designed for leisure pursuits. The real estate development offers a range of finance options to individual buyers and investors in cooperation with Mashreq Bank and HSBC, for conventional financing, and Badr Al-Islami Bank, for Islamic financing.

Too Big to Fail

source Newsweek

The emirate can do better than survive. Vision got it to where it is, and now vision will carry it through.

The recent gala opening of the Atlantis hotel on Dubai's Palm island gave one a strong sense the emirate's elite were fiddling while Rome burned. The sheets had hardly been stripped from the beds of the departing guests when the hotel's developer, the government-owned Nakheel Properties, announced that it was cutting 15 percent of its workforce. Dubai's economy, fueled by high oil prices and easy credit, has been hit hard by the same global contraction that has already hurt much of the world. But reports of Dubai's demise are premature, and those primed to write its obituary should hold fire.

First off, Dubai is just too big to fail. It is the second-largest economy in the United Arab Emirates and retains the backing of the largest, Abu Dhabi, which holds massive oil reserves of nearly 100 billion barrels and has a sovereign wealth fund in excess of $1 trillion. It's never been clear exactly how much of the boom in Dubai, which has no oil of its own, was subsidized by Abu Dhabi. Dubai officials insisted they did it all on their own. Whatever the truth, it's fair to say that Dubai is too important to the U.A.E. for its leaders to let it fall.

Until a few months ago, Dubai was well on its way to achieving its goal of $108 billion in GDP by 2015. Now it's embroiled in the global credit crisis, which has threatened the main source of its growth: construction and real estate. Dubai relied on easy financing to build the world's tallest building, its largest mall and any number of other grandiose projects. Then came the credit crunch and demands that payments be made on a multibillion credit facility. Dubai has been forced to turn to Abu Dhabi for help.

But that's something its big brother can provide. When oil was at $147 a barrel, Abu Dhabi's production of 2.7 million barrels a day earned it cash at a rate of $140 billion a year—not bad for a U.A.E. population of slightly more than a million. Now that oil's hovering below $50 a barrel, the revenue might fall to $45 billion a year—but that's still not bad for a population of slightly more than a million. Abu Dhabi's budget for 2009 predicts oil at $67 a barrel. Even at that rate, the government would reap a substantial surplus, and most experts predict that the price will actually be much higher by the end of next year.

All this means Abu Dhabi can well afford to support Dubai. Though no one has said so publicly, many believe that the ruler of Abu Dhabi promised to backstop Dubai's obligations for up to five years. That matters, but so does the fact that compared with many other parts of the world, and contrary to some reports, Dubai is not exactly overleveraged. With estimates of $80 billion in debt against $350 billion in real estate, even if the value of the property drops sharply, Dubai will never approach the levels of debt relative to assets that now afflict the United States and parts of Europe. Direct government debt in Dubai is about $10 billion on a GDP of about $65 billion. That's much lower than that of the United States, most of Europe or Japan. And most of Dubai's debt is owed by the corporate sector, which, though linked to the government, is nonetheless legally distinct.

It's not just Abu Dhabi's money that supports Dubai; so does that of much of the non-Western world, which has looked to Dubai as a haven from, and alternative to, the U.S. banking system. Dubai is also buoyed by commerce from parts of the globe that don't have an easy time dealing with the West, ranging from countries like Pakistan to Malaysia to the Philippines.

Still, Dubai's need to turn to its oil-rich neighbor has led to a crisis of confidence in what was, until recently, a swaggering society, and there's now plenty of fear that all those dreams and plans will end in tears. The risk is less that Dubai's finances will fail than that its bold vision will get lost in the same fog of anxiety that's blanketed so much of the world.

But the region, if not the world, still needs Dubai. Until a few months ago, the emirate was heralded as a shining example of the new Middle East, a turbocharged entrepreneurial place that offered a sharp contrast to the chaos and religious sectarianism of Iraq and the corrupt crony statism of Egypt. Backed by oil or not, Dubai sees itself as a bastion of the free market and a city of modern laws and modern mores in a region where those are in short supply.

Its boom may have been built largely on real estate—offices, golf courses and condos, mainly for foreigners, mostly from Arab states. But Dubai started its growth with a vision to became a global commercial center. That attracted capital and immigrants. Alongside Dubai's 200,000 citizens live 1 million expats, and for the foreseeable future, they have no better haven anywhere in the Middle East.

Unless Dubai and its endlessly innovative ruler, entrepreneurs and developers adjust their vision and once again approach their challenges as problems to be solved rather than absolute impediments, they may well sink into a prolonged period of stagnation. The fact that it can draw on the surrounding wealth of an oilrich world will probably insulate the emirate from the worst. But Dubai can do better than survive. Vision is what got Dubai to where it is, and vision is what will carry it through.

Sustained demand will drive Dubai real estate sector growth, says Alabbar

source Emirates News Agency
Domestic demand for real estate in Dubai continues to outstrip supply and has positively shifted towards an end-user market, said Mr Mohamed Alabbar, Member of the Dubai Executive Council; Chairman, Emaar Properties and Co-Chairman of the World Economic Forum's Global Agenda Summit.

Alabbar was addressing the closing plenary of the Summit, co-hosted by the Government of Dubai to deliberate on nearly 70 issues of global significance.

He said that the Dubai Government is keenly monitoring the property market and a high-level committee has been exploring several initiatives to boost market confidence.

"His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister of the UAE and Ruler of Dubai, inspires us to see opportunities in the face of crisis. The UAE has been one of the most alert economies in the region, and one of the first movers to address the crisis. We did not adopt a wait-and-watch attitude. We faced the challenge with an alert mind and open heart." ''The Government is committed to creating stronger transparency and confidence building measures. This will also prompt us to revisit our development pipeline to ensure that demand remains robust," he added.

In response to the global financial sector turmoil, the UAE Government is injecting AED120 billion into the country's financial system to bolster liquidity and strengthen the financial system, Alabbar said, adding that the Government has also announced guarantees on customer bank deposits.

He said that the real estate sector's growth was Dubai's answer to the demand created by traditional sectors such as re-exports and trading; tourism and retail; transportation and logistics; manufacturing and the free zones. "A majority of the investments in real estate is equity or cash-driven, unlike other markets, which are predominantly mortgage-driven. This takes out a lot of risk from the system." Allaying speculations on the debt situation of Dubai, Alabbar said that Dubai's asset base outstrips the debt several fold and that it is further addressing the debt position by also focusing on a central debt management system both for the Government and state-owned entities. "The Dubai Government borrowings were for Government institutions or State-owned entities that have been generating positive cash flows and long-term value, as opposed to supporting consumption." He said that the Government of Dubai is fully covered to service its debt for the next seven quarters. "Our debt services our long-term, risk-free infrastructure development programmes. We believe that a solid infrastructure is the runway for strong, future growth." He indicated that the Global Agenda Summit will pave the way to create a new socio-economic agenda for the world. "The participants in this Summit come from over 68 countries and all continents - a testament to Dubai's position as a global city and a meeting point for a variety of opinions. The participants proposed insightful, actionable ideas. Ideas that can change the way governments function, businesses operate and families live." The Summit, co-chaired by Professor Klaus Schwab, Founder and Executive Chairman of World Economic Forum, evaluated nearly 70 issues that the world faces today - from the financial sector turmoil to climate change, poverty eradication and sustainable development.

"From the farmer in Vietnam, to the school boy in Kenya to the bright university student in Cairo - every cross-section of the society, all over the globe, stand to gain from the global agenda this Summit will set," said Alabbar.

The recommendations of the Summit will be presented at the World Economic Forum in Davos next year. Dubai has been chosen to be the venue for the Annual Global Agenda Summit for the next several years.

Real estate chiefs dismiss 'correction' reports

source Arabian Business

Dubai-based real estate chiefs have dismissed claims that the region's property markets are about to suffer a downturn in fortunes.

Recently, reports from companies such as US-based Morgan Stanley have predicted that prices will see a correction after years of massive increases.

But Ali Hussein Al Rahma, CEO of Eqarat.com, accused the reports of causing the current negative sentiment in the market.
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“I was the first to alert that someone has entered our market to instill fear. These are mostly, unfortunately US companies. Why are they doing this? To encourage investment in the United States. We have seen this with our own eyes,” he said.

Al Rahma heads one of the region’s largest property sales companies, with offices in the UAE, Oman, Kuwait and Jordan. The company is also expanding to Saudi Arabia, UK, Morocco and India and has sold properties in landmark projects such as Burj Dubai, Dubai Waterfront and Infinity Tower.

“I am on the ground and I can sense the market. There is fear on the higher level but once you go down to buying and selling there are enormous transactions happening on the ground,” said Al Rahma.

He said he is angered at suggestions indicating negative effects of the credit crunch on the Dubai market, saying the statements are far from reality.

A report published late September by EFG-Hermes had suggested that house prices in Dubai were set to decline by up to 20 per cent by 2011. It further said prices will hit their peaks in the first half of 2009 before declining in the second half of the same year.

The impact of the credit crisis on US and European markets is for the benefit of Dubai, noted Al Rahma. He added that investors who have entered Dubai years ago have grown with the growth of the markets and still continue to do so.

Al Rahma remained convinced there are plenty of investors in Dubai who will continue to put their cash into the market.

“They said they’ve found stability here in the UAE. They cannot buy anywhere else in Europe and the States,” he said.

There is a very slight slowdown in the market, admitted Al Rahma, but explained it was insignificant and for a “very limited period” of time, affecting only the financial institutions, not real estate directly.

“We expect to see stability in the market for the coming six to eight months. This is a healthy transition. The Dubai market is like a speed horse. It’s time for the horse to take a breathing period, for him to be able to run again at the same speed, if not at a higher speed,” said Al Rahma.

Al Rahma's comments come at the same time that Al Mazaya Holding expressed its satisfaction at the performance of real estate and investment activities in the Gulf area in general, and in the UAE in particular.

The company stated on Sunday that Dubai's property market will always be an investment destination, due to the numerous factors that enable the market so appealing, in spite of the existing international crisis.

Khalid Esbaitah, managing director and CEO, said: "There are three factors that form the major constituents that any successful investment relies on; firstly population growth, individual income second, and third, and most importantly, the solidity of the country's economy to achieve economical growth, liquidity flow and income diversity. UAE has all these three factors."

He added: "It is important to remember that annual real estate profits in the UAE range between 8 to 14%, as compared to 4% in other markets, meaning that this market will continue to attract investments for many years to come."