The venue is owned by Dubai World Trade Centre, which also owns Airport Expo Dubai.

Dubai World Trade Centre board chairman Sheikh Hamdan bin Rashid Al Maktoum, who is deputy ruler of Dubai, said the number of companies exhibiting at DICEC was up 2.5%.

He said Dubai World Trade Centre has effectively positioned Dubai as a world-class business destination, and the partnership between government, private entities and associations combined with expertise and modern infrastructure had helped the destination attract ten major global congresses that will bring more than 70,000 delegates to Dubai over the next 18 months. [Read More]

“The problem is that the delivery schedule by 2012 I think there is another 20 to 30 million square feet of offices coming into the market,” said Nick MacLean, managing director of CB Richard Ellis said on Monday at the Second Arabian Business Conference in Dubai.[Read More]

As the supply in the residential sector nears its peak, rentals continued to decline in the second quarter of this year, particularly for luxury and high-end villas and apartments.

“Rents have fallen the most in the upmarket areas such as Downtown and Marina. There’s been a bit of movement of people shopping around for a good price as they look to save money,” Craig Plumb, head of research for the MENA region at Jones Lang Lasalle, told Gulf News.

According to Jones Lang Lasalle’s recent report, average apartment rents saw a year-on-year decrease of 10 per cent and 4 per cent quarter on quarter with the greatest decline in the high-end sector.

Average villa rents year on year fell about 23 per cent and 11 per cent quarter on quarter with the greatest decline also seen in the high- end sector.

Attractive terms

“The continued rental decline is attached to the overall economic situation. The amount people are willing to pay for rent is directly connected to their jobs and salaries. People are getting what they can afford,” Laura Martoramo, CEO of Leo Sterling, told Gulf News.

According to Martoramo, landlords are continuing to offer more attractive terms such as payment by more cheques to attract customers. Another trend is the shift of residents from Sharjah to affordable housing in Dubai.[Read More]

The paper quotes the latest report from Jones Lang Lasalle, “Dubai Real Estate Market Overview for the second quarter of 2010.”

“Although asking prices have marginally declined since the first quarter of 2010, achieved prices increased by one per cent to around Dh867 per square foot. While apartment prices remained stable, villa prices on the other hand, increased marginally during the quarter,” said the report.

But this news appeared to put positive spin on otherwise disappointing results. “The value of residential transactions increased by 50 per cent over the last quarter, although this still represents a decrease of seven per cent over a one-year period,” admits the report.

On the plus side, rents are falling. Rents decreased by four percent from the first quarter of 2010 to the second quarter. Year on year they fell by 10 percent from the second quarter of 2009 to the second quarter of 2010. [Read More]

Retail vacancies have increased to between 8% and 10% as competition intensifies and retailers have closed poorer performing stores. This is resulting in a flight to quality and increasing problems (broken tooth phenomenon) in poorer quality centres. The more enlightened centre managers are responding to changing circumstances by seeking to proactively engage and offer more attractive and flexible terms to their tenants.

Supply in the residential sector continues to complete, with fewer delays being experienced than in the office market. While sales activity has increased and average prices have remained relatively stable, rentals have continued to decline significantly across Q2, particularly in respect of luxury / high end villa and apartment projects. [Read More]

In department figures for the first five months of this year, 3,642 land sales were registered, worth a total Dh25 billion.

The sales comprised a combined area of 62,815 square feet, the department said.

The Reidin.com website’s Dubai Focus section said there were 4,961 residential sales transacted in all of 2009.

The Land Department figures also revealed that in the first five months of this year 3,750 mortgages were registered worth Dh32 billion. The mortgages applied to a total of 95,460 square feet.

The department’s assistant director-general Mohammad Sultan Thani said: “While we may see less value there are many more transactions on a daily basis compared to last year.”

In other figures compiled by the Reidin.com website’s Dubai Focus section, sales of residential properties numbered 3,169 from the beginning of January through May. Slightly more than 10 per cent of these transactions were mortgaged.

Apartments represented 2,927 of these transactions, of which around 10 per cent were mortgaged.

Villas comprised 241 sales, of which about a quarter were mortgaged.

“There are more transactions than last year, the numbers show a bottoming out of the market and a flat trend,” said Reidin.com CEO Ahmet Kayhan.

Residential units

However residential sales figures for this year were not expected to reach the 10,845 of 2007 or the 7,638 of 2008.

Real estate industry experts also said while transactions might be higher, prices were not.
[read more]

Candy’s CPC property developer sued the real estate firm over the withdrawal of plans for the now infamous Chelsea barrack in London, claiming breach of contract. CPC claimed that Prince Charles has personally intervened in the project, expressing his dislike of the 3 billion pound development to the Emir of Qatar.

In his ruling, the judge described the intervention by Prince Charles as “unexpected and unwelcome.”

Mr Justice Vos ruled that QD and CPC were faced with a “very difficult position” once the Prince intervened in March 2009. He added that QD had withdrawn the planning application in breach of the existing agreement but that it was “not obliged” to make a £68.5m payment to CPC, says the paper. Candy can now seek a further hearing on damages.

The Royal Institute of British Architects said the case highlighted “the inappropriate behind-the-scenes methods used by The Prince of Wales” to object to the scheme.
[read more]

The Dow Jones Citigroup Sukuk Index, which measures the performance of Islamic bonds globally, closed at 120.53 yesterday, the highest since Nov. 30 and leaving it 3.8 percent short of the record set Nov. 25. The index has climbed 6.3 percent from its low in December, helped by Dubai World’s May 20 agreement to restructure part of its $23.5 billion of debt.

“That was a big boost for the global sukuk market,” said Zeid Ayer, who helps manage $1.6 billion of Shariah-compliant equities and bonds in Kuala Lumpur for Principal Global Investors and Malaysia’s CIMB Group Holdings Bhd., which have an asset management joint venture. “Restructuring deals help to bring a lot more clarity to the situation.”

Shariah-compliant bonds have weathered the European debt crisis better than notes in emerging markets. Islamic bonds returned 6 percent so far this year, according to the HSBC/NASDAQ Dubai Listed US Dollar Sukuk Index, while regular debt in developing markets gained 5.45 percent, JPMorgan Chase & Co.’s EMBI Global Diversified Index shows.

The World Bank predicted this month that economic growth in the Middle East and North Africa will accelerate to 4 percent in 2010 from an estimated 3.2 percent growth last year as oil prices rebound. Malaysia, the world’s largest sukuk market, is forecast by the government to grow 6 percent this year after shrinking 1.7 percent in 2009.

Malaysia Sukuk

The yield on Malaysia’s 3.928 percent Islamic notes due June 2015 fell six basis points this week to 3.61 percent, the second-lowest level since the bonds were sold on May 27, according to prices from HSBC Holdings Plc. The difference over similar-maturity U.S. Treasuries has narrowed five basis points to 175 since then.

The spread between the average yield for emerging-market sukuk and the London interbank offered rate narrowed 37 basis points, or 0.37 percentage point, to 431 so far this year, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index.

The difference between the average developing-nation yield and Libor narrowed 49 basis points to 586 basis points, based on the EMBI+ index from JPMorgan Chase & Co. That is 156 basis points more than the average spread for sukuk.

Pakistan Sukuk

Transactions in the $1 trillion Islamic finance industry are based on the exchange of assets rather than interest to comply with Shariah principles. Global sales of Islamic bonds have fallen 24 percent to $6.5 billion so far in 2010 from the same period last year, according to data compiled by Bloomberg. Sukuk issuances rose to a record in 2007.

Pakistan may sell sukuk in the domestic market for the first time in two years to fund its budget deficit, Syed Wasimuddin, a central bank spokesman, said June 23. Indonesia plans to sell $650 million of global Islamic bonds in October, according to Dahlan Siamat, the finance ministry’s head of Islamic financing unit.

Dubai World, one of the United Arab Emirates three main state-owned business groups, announced in November a plan to restructure $23.5 billion of debt. It reached an agreement with its main creditor group last month.

Dar Al Arkan Real Estate Development Co., Saudi Arabia’s biggest property company by market value, said on June 23 it agreed with creditors to cut the cost of a $450 million sukuk sold in February. Investment Dar Co., the Kuwait-based owner of half of Aston Martin Lagonda Ltd., and its creditors agreed to most commercial aspects of restructuring its debt, the company’s creditors committee said June 14.

Restructuring Pacts
[read more]

Ahmad al-Tayer, a former finance minister who has gained influence as Dubai seeks to revive its economy, said the tax-free Dubai International Financial Centre was to restructure to boost competitiveness.

This process , moulded by a report from McKinsey, the consultants, has included dozens of redundancies as the DIFC tries to keep costs down. But it will be complemented by attempts to attract financial institutions by pledges of a more competitive leasing structure.

Dubai, the Gulf’s business services hub, has been affected by a real estate crash and a towering debt pile estimated at more than $110bn. But officials hope the city’s attractiveness to foreign groups, thanks to stellar infrastructure and cheaper prices, will result in a resurgence. Mr Tayer, 59, a critic of the emirate’s boom-time extravagance, is to launch these changes to prevent a re-run of the excesses that characterised the six-year boom that ended in late 2008.

“There has been a global crisis – the biggest perhaps since the 30s,” he said. “Of course there is an impact. In these cases, you don’t stand still – you review your plans and strategies.”

DIFC Investments , whose interests include Dubai real estate projects and a luxury retailer, has had to book impairments of about $560m.

“Today no one is talking about outside investment, given market conditions. We want to improve our assets, but our main focus is on our core business,” said Mr Tayer.

The DIFC will seek to take advantage of rising taxes on banks and the wealthy in other financial cities, Mr Tayer, added. He is also chairman of the United Arab Emirates’ biggest bank, Emirates NBD. It will also offer more competitive rents, especially to tenants with substantial staff numbers.

The DIFC has not witnessed a mass exodus, despite the stronger growth rates in competing economies, notably Abu Dhabi, Saudi Arabia and Qatar. But many banks have been trimming staff.

“People are looking for a competitive place, people are moving, there is beauty in the centre and it being in Dubai, we are a centre for tourism, logistics, trade,” said Mr Tayer. “We have infrastructure for communications, transport, aviation, port, airport; this takes us 20 years into the future. We want to take advantage of the infrastructure.”

Mr Tayer pointed out that Dubai continued to witness growth in sectors such as aviation and tourism. Emirates Airlines, for example, continues to expand rapidly as it links Asia with Africa, Europe and the Americas. And the DIFC, said its governor, is being increasingly used by Chinese groups to service Africa. “We’re a centre that brings together east and west,” he said.

Mr Tayer has become a trusted aide to the ruler, Sheikh Mohammed bin Rashid al-Maktoum. He took over the DIFC after last year’s removal of Omar bin Sulaiman, who has since been detained and released after repaying Dh50m ($14m) in bonuses.

The move against Mr bin Sulaiman formed part of a broader purge of former officials that raised concerns. Critics said it spread fear and paralysed decision-making by state-linked companies.

Mr Tayer said there would be no impact from the scandal around his predecessor, a younger, flashier figure who has come to represent the ancien regime in Dubai. He insisted the investigation of former officials was healthy and would boost the emirate’s credibility.

Government-related authorities and companies are to introduce stronger forms of oversight, including more experienced boards, he said. “This is public money. And if there was abuse or waste of public money, it’s like taxpayers’ money, and there is justice, there is transparency . . . This is a healthy phenomenon and it gives credibility to Dubai and its institutions.
[read more]