Dubai Real Estate Report
Damac Properties, a pioneering property developer in the Mideast has recorded a net profit of USD240mn for the first quarter of this year, marking net margins of 45 percent.
Additionally, the developer posted profits of Dh1.95bn, with gross profit margins of 54percent amid the period, whereas total assets grew by 6.3 percent to Dh26.17bn.
In the ame period, cash and bank balances reached Dh9.11bn; development properties reached Dh10.22bn unchanged against Dec 2016.
The firm completed a further 550 units in Damac Hills master development, which represent almost 20 percent of its whole year 2017 guidance of 2.800 units.
Dubais Most Expensive Penthouse
A 14,000 square feet full-floor penthouse at Bvlgari Resorts & Residences on Jumeira Bay set a record as the most expensive penthouse in Dubai when it was sold for Dh60 million.
Luxhabitat, a high-end real estate company, which sold the iconic property, said the penthouse is currently being developed by Meraas and is due for completion by the end of 2017.
The luxury development will host a 1.7 million sqft complex and will be framed landscaped gardens. With 100 rooms and suites, 20 residential villas and a marina, the residents will be additionally pampered with a full range of luxury amenities.
According to Reidin’s historical statistics, this penthouse is the most expensive penthouse transaction to date, only followed by a penthouse on Fairmont the Palm that sold at Dh42 million in December 2012.
Luxury sales director, Alexander Von Sayn Wittgenstein, who brokered the deal said, the penthouse is very special because it has 270 degree views of Downtown Dubai and the sea.
“It is the largest penthouse I have ever come across for a branded deveopment in Dubai,” he said.
Other branded developments that host penthouses include Armani Residences, Kempinski Hotels & Resorts, The Fairmont Palm Residences and Palazzo Versace.
Branded developments can demand up to a 46 per cent premium in terms of prices per square feet, according to a Luxhabitat analysis in 2015. It was also found that these branded residences have an inelastic price and higher investment returns. Oriol Font, CEO of Luxhabitat, said the transaction of such a magnitude further underlined his company’s presence as the experts in Dubai’s luxury real estate market.
Dubai Airport Show
Airport Show opens in Dubai with over 7,500 industry experts from more than 50 countries More than 300 companies vying for a share of the 100 billion (Dh367 billion) Middle East aviation infrastructure project market were present with their innovative products and services at the Airport show 2017 which opened on Monday at the Dubai World Trade Centre.
Over 7,500 aviation industry professionals joined exhibitors from more than 50 countries at the three-day show inaugurated by Sheikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman of Dubai Airports, Chairman of Emirates airline and Chief Executive of the Emirates Group. He toured the world’s second-biggest airport B2B event spread over 15,000 sqm.
“The aviation industry expansion in the Middle East continues to surpass average global growth rates. Future projections are equally promising and are behind the ongoing and considerable investment in aircraft, technology and infrastructure,” said Sheikh Ahmed.
The Airport Show brings together solution providers from around the world giving them the opportunity to explore the latest trends and bring forward innovative products and services designed to support ongoing industry growth and service enhancements, he said.
Sheikh Ahmed met with the exhibitors, who explained about their latest technology products and services being offered for the aviation sector. Among the stalls that Sheikh Ahmed visited were emaratech, which described its latest baggage handling system being showcased at the Airport Show; the General Directorate of Residency and Foreigners Affairs in Dubai, which is displaying the latest smart technologies being used to enhance customer experience; the General Authority of Civil Aviation Saudi Arabia, which explained the latest facilities and expansion of airports in the kingdom; Dubai Police, which described the latest training programme and security centres; #Oman Airports Management Company, which is showcasing their unique virtual reality applications; and Huawei, which is showcasing a range of its latest smart solutions including the smart modular data centre and aviation cloud solution, as well as TAM Europe, the #Denmark pavilion, Aaqius Switzerland, Nuctech Company and others. Billed as the world’s most dynamic airport event, the Middle East’s aviation industry showcase features a wide line up of innovative technology products and services from over 50 countries, including Germany, China, Switzerland, France, the UK and Denmark, which have set up dedicated pavilions.
Sheikh Ahmed also visited the World Travel Catering and Onboard Services Expo Middle East co-located with the Airport Show, where he visited stands of Emirates Flight Catering, Pinar from Turkey, Unilever and Pearl’s. He also met with the representatives of Women in Aviation Middle East, which hosted its second general assembly at the Airport Show.
Daniyal Qureshi, group exhibitions director at Reed Exhibitions Middle East, organizers of the show, said: “We have experienced a much larger interest in Middle East aviation developments and the Airport Show in particular over the last year, signaling the growing confidence of international suppliers in the region’s expansion programmes. We have experienced an almost 10 per cent growth in exhibitors this year.”
Co-located with Airport Show, the fifth Global Airport Leaders’ Forum opened with more than 36 aviation industry leaders and experts discussing the global airports outlook 2026, airport capacity, how airports can most effectively respond to the requirements of airlines, onboard retail, the latest technology trends and other highly relevant aviation industry issues.
With the Middle East on track to see a two-fold growth in air traffic within years, the airport show assumes greater importance for the global industry players. The value of 152 active aviation-related projects in the region rose to Dh211 billion in April 2017 regardless of a huge drop in oil revenues while more than 100 billion worth of airport projects are underway and planned across the Middle East.
These projects are intended to address a capacity gap as airport passenger volumes across the Middle East has outstripped capacity by 11 per cent last year.
With these, an additional capacity of 400 million passengers a year can be accommodated across the region’s airports over the next 10 to 20 years, according to aviation industry experts.
Climate Change Affects On Dubai Real Estate
Direct consequences of climate change will significantly impact the construction and real estate markets in the UAE, according to a recently released study by the Emirates Wildlife Society and World Wildlife Fund (EWS-WWF).
UAE’s infrastructure is currently the most advanced in the GCC region with ‘well-integrated transport systems and assembly of iconic structures’, according to a report by Research and Markets titled #UAE Construction Industry Outlook to 2020.
The #UAE also improved by one place to ranking 16th globally in this year’s World Economic Forum’s Global Competitiveness report, on the grounds of ‘top notch infrastructure’ and offering ‘the most attractive destination from an investment standpoint’ in the region.
However, according to EWS-WWF’s study, #UAE Climate Change: Risks and Resilience, the increasing physical risks induced by extreme weather events as well as slow onset phenomena like the sea level rise may put some of the areas of the country’s real estate and construction market at risk in the years to come.
The #UAE has taken strides forward on climate change mitigation in recent years that are reflected by the establishment of the federal ministry of climate change, it’s commitment to develop a national climate change plan, and its ratification to the Paris Agreement in 2015, which pledged not to just keep warming ‘well below 2C’, but also to ‘pursue efforts’ to limit warming to 1.5C by 2018.
“Climate experts project that an increase of 2C in global temperatures will increase the sea levels by 50cm compared to 40cm if temperatures increase by 1.5C, by the turn of the century,” writes Roz Pidcock, deputy editor and science editor, of Carbon Brief.
“Amongst other things, this difference of just half a degree will, in fact, make a very significant difference to how much the sea levels rise by and as a result impact the real estate and construction values of coastal areas.”
Today, coastal areas host approximately 85 per cent of the population of the #UAE including many hotels, resorts, and other real estate developments located in low-lying zones.
In Dubai, the urban area has almost tripled in less than two decades, with the artificial expansion of the city surface by the Palm Islands and the World archipelago projects while Abu Dhabi’s major developments and industrial infrastructure are also built along the emirate’s islands.
“Coastal cities are likely to be at increasing risk from sea level rise, storm surgesand associated flooding,” the report adds. “Although the implications for the #UAE (and elsewhere) are still very uncertain, climate change is likely to affect the growth of the housing and real estate market by making the coast a less safe and more expensive place.”
Real estate values have already declined in certain geographic areas in some of the world’s most attractive holiday locations such as the Bahamas, as property insurers withdraw due to weather related risks.
And its not just direct impacts on investments and growth of the market – climate change will also further negatively impact construction causing longer building time and potentially higher costs, according to the study.
The hotter, more humid weather may reduce the productivity of outdoor workers and the anticipation of heavy precipitation events may make flood protection, slope stabilisation, and other such structures necessary.
“Construction is already a sector of concern – tall buildings in the #UAE generate huge water and electricity bills to cope with overheating under the current weather conditions, becoming significant sources of GHG emissions,” adds EWS-WWF.
The United Nations Environment Programme reports that the building sector accounts for 30 to 40 per cent of global energy use but in Abu Dhabi, however, for example, buildings consume approximately 50 to 60 per cent of electricity generated.
The report elaborates that this is primarily because most of the new buildings developed in recent years were built with a selection of materials based on aesthetics inspired by designs in less extreme climates rather than environmental performances that suit the region.
Consequently, a significant increase in climate could further impact the thermal performance of buildings and increase their consumption of water and electricity to even more worrisome extents.
“In order to have a chance to stay below the temperature goal [1.5C], peaking of GHG emissions should be reached ‘as soon as possible’ and net zero emissions should be achieved in the second half of this century,” the report adds.
Abu Dhabi’s Estidama initiative and Dubai’s Green Building Codes are, however, gradually implementing appropriate building codes and regulations for energy and water efficiency to combat this.
Rabiya Shabeeh is a freelance journalist based in Dubai. Views expressed are her own and do not reflect the newspaper’s policy.