The ‘UAE Real Estate Report Q1 2018’ by Asteco has recorded an annual decline in villa and apartment sales and rental rates across the country. The quarterly report also highlights key market trends, major project announcements and outlook for the remainder of the year across Abu Dhabi, Al Ain, Dubai and Northern Emirates.
John Stevens, Managing Director of Asteco, said: “Tenants are increasingly taking advantage of the declining rents across the board, and choose to upgrade from apartments to villas or to better-quality and larger units. However, many remain cautious due to economic uncertainties or are waiting for further reductions. People are also moving from older to newer buildings, as these often include parking and other facilities that are non-existent or come at an extra charge in mature buildings.”
In Abu Dhabi, approximately 1,600 residential units were delivered in Q1 2018, with over 75% located within the city’s investment zones including Yas Island, Al Reem Island and Al Raha Beach. More than 7,300 residential units and 100,000 square metres of office space are earmarked for completion before end-2018. However, previous delivery patterns suggest a number of these are likely to be delayed, spilling over to 2019.
Among the key projects handed over in Abu Dhabi in Q1 2018 were Ansam on Yas Island, Al Hadeel in Al Raha Beach and Al Muhaimat Tower on Al Reem Island, in addition to several stand-alone buildings in various locations. The most noteworthy announcement was Saadiyat Grove by Aldar and Emaar that falls within the framework of a strategic alliance between the two companies to develop local and international projects worth AED30 billion.
Apartment and villa rental rates declined on average by 3% and 2% since Q4 2017, while recording annual decreases of 11% and 9% respectively. Apartment sales prices remained broadly unchanged over the quarter, except for Marina Square (-5%), Al Reef Downtown (-6%) and Sun & Sky Towers (-6%). Villa sales prices were stagnant throughout the first quarter, with a slight decrease in Al Reef (-2%). Annually, the highest decline in sales prices was recorded in Hydra Village (-8%), followed by Al Reef villas (-5%) and Raha Gardens (-4%).
Stevens said: “The changes reported in these areas are a result of increased competition from new off-plan developments offered at attractive rates and favorable payment plans. Although healthy demand for high-quality, off-plan and newly delivered projects continued, lower-end residential units remained under pressure.”
In Al Ain, although apartment rental rates remained broadly stable, villa rents decreased by an average of 2% since Q4 2017 and 5% annually. Annually, rental rates in Al Ain dropped the most in mature buildings (-7%), followed by prime compounds (-5%) and new buildings (-3%).
Several buildings in the Town Centre and Asharej areas are planned for completion in Q2 2018. In addition, around 8,000 square metres of office space were handed over in the Senaya area, while no significant amount of residential supply was delivered in Q1 2018.
Stevens said: “Al Ain saw an increase in vacancies in the residential and office segments, mainly due to the reduction in staff housing allowances. This first occurred in 2016 and continues to have an adverse effect on the real estate market in the region.”
Following a period of relative stability (despite the overall subdued market sentiment), Al Ain’s retail rental rates have finally come under pressure due to reduced consumer spending, and limited business and employment growth, recording an average decline of 5% in Q1 2018.
Speaking on the market outlook in Dubai, Stevens said: “In 2018, we anticipate the delivery of approximately 30,000 residential units, however, as with Abu Dhabi, past evidence has shown that the actual completion rate is often significantly lower due to delays. Only 3,650 properties (12%) have so far been handed over in the first quarter of the year.”
Most of the recent inventory is concentrated in the new investment areas along the Sheikh Mohammed Bin Zayed Road (E311) and Emirates Road (E611) corridors. Among established communities, Dubai Marina also recorded additional supply with the completion of the first of three residential towers at The Residences at Marina Gate.
New additions to the office market included the handover of The Exchange at Dubai International Financial Centre (DIFC) and one building within the One Central project in the neighboring Trade Centre district. This marks an important development for Grade A office supply, which had previously been undersupplied.
The annual rental declines in Dubai have been consistent in each quarter over the past year, averaging 10% for both apartments and villas. Areas where apartment rental rates recorded the highest decline since Q1 2017 include Jumeirah Beach Residence (-15%), Downtown Dubai, Dubai Marina and Deira (-14%), followed by The Greens and Dubai Sports City (-13%). Similarly, villa locations that recorded highest drop in rental rates include Jumeirah Village (-15%), Jumeirah Park (-13%) and Arabian Ranches (-11%).
The Emirate’s real estate market is becoming increasingly fragmented, resulting in a considerable widening of the rental rate ranges. Incentives such as multiple cheques, rent-free periods, and the absorption of utility, maintenance or agent fees are becoming the norm.
While on the whole, the residential sector has witnessed only a minimal quarter-on-quarter decline at 1%, newly handed-over lower-end buildings in areas with significant supply potential have struggled with occupancy, particularly where rates and incentives were not aligned with the market.
Similarly, the average apartment and villa sales prices softened by around 1% in Q1 2018. While the annual decline for villas (6%) was less pronounced than for apartments (9%), particularly large villas with high price points generated limited interest, mainly due to the lower investment yields attached to this type of unit.
Stevens said: “We recorded a moderate increase in enquiries and transactions for high-end residential units, suggesting that albeit at a conservative level, there is still appetite for this product.”
Affordable housing options remained at the forefront of buyers’ interest, with the majority of banks and developers stipulating a minimum monthly salary of AED15,000 in order to purchase property in the Emirate.
Stevens said: “Despite the boost in luxury project launches, we believe developers will continue to focus on affordable and mid-market housing because there remains a substantial supply gap. Other factors bolstering the trend include the growing young population (over 60% are aged 25 to 44) and the rising popularity of home ownership (investment or owner occupation.”
Although enquiry levels for office space have remained low for the overall market, an interest in Grade A stock in established office locations such as DIFC was recorded.
In the Northern Emirates, infrastructure development remained on top of the list for governments. In addition, large-scale developments have started to materialise, including three projects worth AED 2.7 billion, initially announced in 2016 by Eagle Hills and the Sharjah Investment and Development Authority (Shurooq), a strategic alliance to develop Sharjah’s real estate market and attract investment to the Emirate. Construction on the master plan is expected to start later in 2018, and the first units are earmarked for handover by end-2019.
The project comprises Maryam Island in Sharjah – a mixed-use destination featuring 1,890 freehold residences as well as a hotel component, Palace Al Khan – a luxury waterfront resort with 87 rooms, and Kalba Waterfront – a master-planned retail development within the Kalba Eco-Tourism Project with 183,000 square feet of gross leasable area.
While no major residential and office supply was delivered in Q1 2018, Sharjah expects additional residential stock on completion of Nasma Residences Phase 1 and Al Zahia Residences, both due for handover by the end of the year.
Apartment rental rates in the Northern Emirates declined by 1% on average since Q4 2017, while recording an annual decrease of 11%. Further downward pressure is expected, as the delivery of supply in Dubai directly affects the recovery of rates in the other Emirates. Office demand in Sharjah continued to drop, with quarter-on-quarter rates declining by 2% on average.Summarising Asteco’s outlook on real estate developments in the Northern Emirates, Stevens said: “The recently implemented legislation that allows non-Arab nationals without a UAE residency visa to purchase properties in Sharjah on a 100-year renewable lease is expected to stimulate demand and ultimately increase foreign investment in the real estate market.”
Asteco’s Northern Emirates Real Estate Report Q1 2018 has shown an annual decline in rental rates of 11% on average, with the most significant drop recorded in the Rolla area in Sharjah and for high-end units in Ajman.
Apartment rental rates across the Northern Emirates witnessed an average decrease of 1% since Q4 2017. Studios to three-bedroom apartments in Sharjah and Umm Al Quwain reported a decline of 1% over the quarter, while over the course of the year, rentals dipped by 10% to 13% and 11% to 12% respectively.
In Ajman, rents for affordable housing units fell by 1% in Q1 2018 and by 12% year on year. High-end inventory saw a drop of 3% over the quarter and 11% between Q1 2017 and Q1 2018. Studios to three-bedroom apartments in Ras Al Khaimah and Fujairah recorded declines of 1% over the quarter, and over the course of the year, rentals dipped by 10% and 13% respectively for affordable housing units. Meanwhile, high-end units reported an annual decrease of 8% in Ras Al Khaimah and 10% in Fujairah.
John Stevens, Managing Director of Asteco, said: “We expect a further pressure on apartment rental rates, as recovery rates in the Northern Emirates are directly impacted by the delivery of supply in Dubai.”
In the Northern Emirates, government priorities remained geared towards infrastructure development. In addition, more master plan and/or large-scale developments are starting to materialise including three projects worth AED 2.7 billion dirhams including Maryam Island, initially announced in 2016 by Eagle Hills and Shurooq, a strategic alliance to develop Sharjah’s real estate market and drive investment.
Stevens added: “The launch of residential developments is on the rise in the Northern Emirates, with projects spanning a total of over 100 million square feet of land area scheduled for completion by 2025 in Sharjah alone.”
Sharjah apartment rental rates across various locations decreased by 1% on average in Q1 2018 and by 12% year-on-year. The most significant drop of 4% was recorded in Rolla, whilst rates remained unchanged over the quarter in areas such as Abu Shagara, Al Butina, Al Yarmook and Al Wahda. Annually, records show rental rates fell by 14% in Al Wahda, 13% in Abu Shagara, 9% in both Rolla and Al Yarmook, and 7% in Al Butina.
Meanwhile, office rental rates continued to fall by 2% on average. Rents were stagnant in Q1 2018 in areas such as Buhaira Corniche, Al Qasimia, Clock Tower Roundabout, Al Yarmook and Industrial Area, while Al Taawun and Al Wahda reported a drop by 5% and 2% respectively.
Whilst no major residential and office projects were delivered in Q1 2018, Sharjah expects additional residential supply on completion of Nasma Residences Phase 1 and Al Zahia Residences, both due for handover by end-2018.
Summarizing Asteco’s outlook on real estate developments, Stevens said: “The recently implemented legislation that allows non-Arab nationals without a UAE residency visa to purchase properties in Sharjah on a 100-year renewable lease is expected to stimulate demand and ultimately increase foreign investment in the real estate market. In addition, continued efforts to develop the private sector and emphasis on diversification strategies are anticipated to strengthen the economy and shape a favorable environment for job creation, business growth and investment.”For more details, please visit www.asteco.com
We are proudly announcing a strategic alliance between Asteco, a regional powerhouse and Gulf Sotheby’s International Realty, a global luxury real estate brand.
This alliance of Asteco’s extensive local expertise and Gulf Sotheby’s International Realty’s global reach will transform the off-plan sales business in the Middle East.
Through this unique partnership both companies are looking to contribute to the UAE ‘s global standing as a leading real estate destination by being the leader in the off-plan real estate segment, as well as establishing a strong position in other GCC markets with fast-growing demand such as the Kingdom of Saudi Arabia and Jordan.
Elaine Jones, Executive Chairman of Asteco, said “Asteco is thrilled to have been at the forefront of the positive evolution of the off-plan market segment. We represent a significant number of the region’s top property owners, developers and investors and have developed a deep expertise in off-plan and project sales since 2001 when the market was opened for expatriates to invest in real estate. Our strong regional footprint – encompassing six offices in the UAE and other major regional real estate markets – perfectly complements Gulf Sotheby’s international network, making us a force to be reckoned with across the Middle East. This partnership comes at an opportune time, following the recent amendments of Dubai’s off-plan property purchase law facilitating a clearer procedure for the enforcement of developers’ rights and protection of buyers’ investments.”
George Azar, Chairman and CEO of Gulf Sotheby’s, added: “We are extremely proud to join forces with a premium brand like Asteco. What was of utmost interest to us is their deep and unsurpassed positioning in the off-plan market. With the regional Our values and sales propositions are perfectly aligned with Asteco’s, creating a partnership with high added value for both sides. We want to send out a clear message to the regional markets that we’re ready to set ourselves apart from the competition in the off-plan and project sales sector, aiming to take the prime position in all countries we are active in.”
This strategic partnership is a natural one, given the synergies in operational styles and business models of both companies. Over 300 highly experienced professionals with expansive market understanding will join under this alliance to lead the off-plan luxury real estate segment in the GCC region.
Asteco’s Dubai Real Estate Report Q1 2018 has recorded an annual decline in villa and apartment sales of 6% and 9% respectively, with large villas at high price points generating limited interest, mainly due to the lower investment yields associated with this type of product.
Affordable housing options remain at the forefront of buyers’ interest, with many banks and developers stipulating a minimum monthly salary of AED15,000 in order to purchase property in the emirate.
John Stevens, Managing Director of Asteco, said: “We have seen a moderate increase in enquiries and transactions for high-end residential units, suggesting that albeit at a conservative level, there is still appetite for such accommodation.”
The annual rental decline, for both apartments and villas, has averaged approximately 10%, whilst incentives such as multiple cheques, rent-free periods, and the absorption of utility, maintenance and/or agent fees have become the norm.
Some of Dubai’s popular communities have witnessed the sharpest decline in rents. These included Jumeirah Beach Residence recording a 15% drop since 2017, while Downtown Dubai, Dubai Marina and Deira come in a close second with a 14% decrease. Other areas that have demonstrated a significant decline in rents are: Palm Jumeirah, Business Bay, Greens and Dubai Sports City among others.
Villa rentals in Jumeirah Village and Jumeirah Park have seen a decrease of 15% and 13% respectively, while Arabian Ranches, Palm Jumeirah and Springs are also proving cheaper to rent compared to 2017 rates.
Stevens added: “While on the whole, the residential sector has witnessed only a minimal decline of 1% quarter-on-quarter, it is important to note that newly handed-over, lower-end buildings in areas with significant supply potential have struggled with occupancy, particularly where rates and incentives were not aligned with the market.”
Approximately 3,625 residential units were handed over in Q1 2018, with a total of 30,000 potentially to be delivered by Q4 2018. Most of the recent inventory is located in the new investment areas along the Sheikh Mohammed Bin Zayed Road (E311) and Emirates Road (E611) corridors. Among the established communities, Dubai Marina also recorded additional supply with the completion of the first of three residential towers at The Residences at Marina Gate.
Meanwhile, new additions to the office market included The Exchange at Dubai International Financial Centre (DIFC) and one building within the One Central project in the neighbouring Central Business District. This marks an important development for Grade A offices that were previously undersupplied.
Q1 2018 also saw the launch of several new residential projects, including The Grand by Emaar at Dubai Creek Harbour and Reva Residences by Damac at Business Bay.For more details, please visit www.asteco.com
Apartment and villa rental rates recorded decreases of 3% and 2% respectively in the first quarter of 2018 and an annual drop of 11% and 9%, according to Asteco’s Abu Dhabi Q1 Real Estate Report.
Studios to three bedroom apartments reported declines of 1% to 5% over the quarter and 4%-17% over the course of the year, the dip in villa rentals was less pronounced, ranging from 6% to 11%.
John Stevens, Managing Director, Asteco said “As a result of the delivery of new supply during a period of restrained economic growth and subdued market sentiment, we have seen an increase in vacancy rates across all residential unit types.”
Approximately 1,600 residential units were delivered in Q1 2018 with the bulk (more than 75%) located within Investment Zones, including, Yas Island, Al Reem Island and Al Raha Beach.
Apartment sales prices remained broadly unchanged over the quarter in the majority of locations, with the exception of Marina Square (-5%), Reef Downtown (-6%) and Sun & Sky Towers (-6%), which faced increased competition from new off-plan developments offered at attractive rates and favourable payment plans. Al Reef was the only community recording a drop in villa sales prices at an average rate of 2%.
Stevens added; “Although healthy demand for high-quality, off-plan and newly delivered projects continued, lower-end residential units remained under pressure throughout the first quarter of 2018”
Q1 2018 saw the launch of several new projects such as the Al Fahid Island Master Development by Al Nahdha Investment and the Reflection Towers on Reem Island by Aldar.
The most noteworthy announcement was the Saadiyat Grove Development by Aldar and Emaar, which falls within the framework of a strategic alliance between the two companies to develop local and international projects.
Stevens said “While more than 7,300 units are earmarked for handover before the end of 2018, based on previous delivery patterns, a number of these are likely to be delayed, spilling over to 2019.
Over 2,500 units on Al Reem Island, 1,800 on Yas and Saadiyat Islands, including West Yas, Jawaher Al Saadiyat and Maamsha Al Saadiyat, and more than 1,650 units on the Abu Dhabi Mainland are among the key developments. With regard to offices, demand remained low resulting in a 2% average quarter on quarter drop in rental rates. No major office buildings were delivered in Q1, with the anticipated Omega Towers on Al Reem Island and the ADIB HQ on Airport Road due for handover before the end of the year.For more details, please visit www.asteco.com
To VAT or not to VAT,
This is the question facing Owners Associations (OA) in the new age of UAE VAT.
Owners Associations find themselves in a somewhat tricky position since the introduction of UAE-wide VAT from January 1st this year. Like many organisations, clarity on the exact rules and regulations remain murky, at best.
At the heart of this confusion lies the simple question of whether OA’s are tax exempt or not. Nobody seems able to give a proven answer on this subject, thus opening OA’s up to falling foul of their own inactivity.
The catch 22 position revolves around whether OA’s are deemed taxable entities or whether they fall outside of this domain, like many service providers such as schools. If an OA fails to register they may be hit with a AED20,000 fine for non-registration however, if they do undertake to pay VAT but are subsequently judged to be exempt, they have to go about trying to recover paid taxes.
If OA’s are found to be taxable entities this will add further costs to all OA’s in addition to the 5% increase in fees. The individual associations will have to increase their internal costs to Owners to cover the admin, budgeting and auditing fees associated with administering such a system.
Neither RERA nor the Federal Tax Authority (FTA) has committed either way at this stage, therefore Asteco has tried to solicit clarity on this subject with both parties, with no concrete answer forthcoming.
As taxation falls outside Asteco’s area of expertise they are unable to offer specific help or advice on this subject however, have taken it upon themselves to share the facts, as they currently stand, in order for all OA’s to arrive at a well-informed decision.
“As Manager’s with insight and expertise in our field we have a duty of due diligence on behalf of the OAs to protect the industry to be treated equitably in terms of VAT. We are asking authorities for consultation and to provide substantiation of any decisions regarding OAs and VAT.” – Nicholas White, Associate Director, Asteco Owners Association
It is recommended that all OA’s take it upon themselves to seek professional advice from a taxation or legal specialist to be able to embark on the best course of action for the OA.
For more details, please visit www.asteco.com
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In response to ongoing regional and global economic uncertainties, the UAE Real Estate market has proven itself resilient by adapting and evolving over the years.
This report looks back at the changes that have occurred throughout the UAE since 2008, and provides Asteco’s opinion on the prospects for 2018 and beyond.
Following the Global Financial crisis in 2008, which subsequently resulted in the bursting of the Real Estate bubble in the UAE, we recorded drastic declines in sales prices and rental rates across all sectors. Apartment rental rates in Dubai for example decreased by approximately 35% since the peak. The fallout was even more pronounced in Abu Dhabi with a drop of close to 50% as the Capital recorded the highest rental rates across the UAE pre-crisis, mainly due to the lack of supply.
Although prices continued to soften over the next 24 months, the rate of decline slowed as the UAE was still considered a ‘safe’ haven and good investment option in the midst of the Arab Spring and Euro Crisis.
During the period of June 2011 – March 2013 apartment rental rates in each Emirate bottomed out with Dubai initiating the start of this new Real Estate cycle and Sharjah falling in line last.
Whilst the Northern Emirates, Abu Dhabi and Al Ain had yet to reach their market low, Dubai recorded steady increases throughout 2012, which were amplified in late 2013 with the announcement of Expo 2020.
Over the next 2 years rates in the different Emirates grew steadily and began peaking in late 2014 until early 2016, during and after which they more or less stabilised.
Low oil prices, global political tensions (Brexit, Trump, Qatar Diplomatic Crisis) and growing real estate supply resulted in a downward trend for apartment rental rates in 2016 and 2017.
Interestingly, Sharjah recorded the shortest growth cycle of only 18 months compared with Dubai’s 3 ½ years. This is mainly due to the lack of quality supply and the large percentage of Commuter-Residents in the Emirate, who are often influenced by the supply/demand dynamics and market sentiment in Dubai.
Another intriguing observation is the fact that rental rates in both Sharjah and Al Ain bottomed out after their neighbours Dubai and Abu Dhabi, yet reached the top before them.
It is important to note that the drivers behind any changes in the Real Estate market vary in each Emirate and are not necessarily correlated to events in the neighbouring, more prominent Emirate but depend on internal as well as external factors.
Throughout 2017, Asteco noted the emergence of a number of new Real Estate market trends in the UAE, including the shift in demand from high-end-luxury properties to affordable mid-market units, off-plan sales preferred over completed units due to flexible payment plans and the market becoming Tenant/Investor - driven due to continuously increasing supply.
Looking at the year ahead, although the outlook for global economic recovery is positive, the knock-on effect may not be felt until later this year or early 2019.
“2018 is expected to follow similar trends as compared with the previous year, although the number of new project launches is likely to ease off as the market finds a new equilibrium.” said John Stevens, Managing Director, Asteco.
Diversification strategies in various areas are being implemented with a focus on promoting long-term economic sustainability and reduced reliance on oil, which is expected to stimulate employment and business growth.
Asteco expects a surge in property deliveries over the next few years as construction-linked, post-completion payment plans encourage developers to finish projects within the stipulated timeframes. Sales prices and rental rates are expected to progressively stabilise in the medium-to long-term.
“Whilst new inventory continues to increase in the UAE, it is also adding new leisure attractions and business opportunities, which will expand the market’s range of potential Residents, businesses and visitors, and help drive Real Estate demand.” Stevens concluded.
For more details, please visit www.asteco.com
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Rental rates and sales prices are expected to follow a similar path to 2017 with further moderate declines for Abu Dhabi due to the continuous delivery of new supply, according to the Q4 Abu Dhabi Real Estate Report from Asteco.
Whilst rental rates for one bedroom apartments decreased by an average of AED 10,000 per annum, the larger two- and three bedroom units dropped by an average of AED 16,500.
Reductions in villa rental rates and sales prices were less pronounced with quarterly changes varying between 0% and 3% over the course of the year.
“Approximately 9,000 residential units, including 6,200 apartments and 2,800 villas and townhouses are anticipated for completion this year, predominantly within the districts of Reem Island, Al Raha Beach and Yas Island.” said John Stevens, Managing Director, Asteco.
“Based on previous years, the delivery of some of this inventory may be postponed until 2019 such as the delayed office buildings Omega Towers on Reem Island and the ADIB HQ on Airport Road, which were due for delivery in 2017 but are now expected for handover in 2018.” Stevens continued.
Whilst transaction activity for completed properties slowed compared with previous years, newly launched off-plan quality projects with attractive payment plans and discounts will continue to benefit from good levels of demand and ultimately increase investment in the Real Estate sector for 2018.
In regard to offices, vacancy rates are likely to increase as companies continue to downsize and relocate to smaller units. The overall outlook for the office market is expected to be subdued, with further rental declines projected across all quality grades.
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2018 is set to be another favourable year for Tenants with rental rates predicted to incur a marked drop as a result of the sheer amount of supply projected for delivery this year, according to the latest report from leading Real Estate Consultancy Asteco.
Apartment rental rates softened steadily throughout the year with decreases ranging from 2% to 4% per quarter, on average. Drops in sales prices were slightly less prominent with variations of 0% to 4%. The villa market fared similarly with average quarterly declines in sales prices and rental rates of 2% and 3%, respectively.
“2017 recorded discernible contractions across all asset classes. However, this had and will continue to have a positive effect on tenants and investors with opportunities and value to be realised in 2018.” said John Stevens, Managing Director, Asteco.
There are 23,000 apartments and 8,500 villas scheduled for handover throughout Dubai in 2018 resulting in continual growth of supply and therefore more negotiating power in the hands of Tenants/Investors.
One bedroom apartments across the board have seen rental rates drop between AED5,000 to AED20,000 showcasing a further 13% decrease on 2016. Units in Downtown Dubai are now available for AED95,000, The Greens AED75,000, Dubai Marina AED70,000 and International City reports AED40,000, on average.
Rental rates for one to three bedroom apartments have shown an average decrease of 13% compared with Q4 2016 and 18% since the last market peak in 2014, which has led to owners/landlords offering a number of incentives including rent-free periods and increased payments (up to 12 cheques) to retain tenants and/or improve occupancy.
“These conditions have put the bargaining power firmly in the hands of Tenants who enjoyed a wider choice of properties, discounted rates and increased incentives. New properties and areas of the city are also becoming more accessible to a wider tenant pool.” Stevens added.
Average villa rents fell by 11% with four bedroom units in Arabian Ranches for example priced at AED190,000 versus AED235,000 in 2016.
Sales prices were affected the least with an average decrease of 6%, although it is important to note that demand for villas with high ticket prices remained subdued in 2017.
Stevens said, “Investors will continue to be more sensitive to the price point of properties in 2018 as opposed to the price per square foot, meaning units that were previously advertised below the AED 1,000 per sq.ft. mark will be marketed for instance at below AED 500,000 for studios or AED 1 million for one bedroom apartments to entice take-up.”
Demand for offices, on the other hand, was limited and resulted in subdued transaction activity in the market.
“Despite recording only marginal quarterly drops in sales prices and rental rates, the office sector has arguably proven the most challenging asset class in 2017 underpinned by a bearish market sentiment, low oil prices and limited business growth. However, Asteco expects healthy appetite for quality Grade A commercial properties moving into 2018.” he added.
Following the 5% VAT introduction, which is applicable to the commercial sector, there has been concern amongst the market on how this will affect both Tenants and Investors. Despite the fact that it is expected to dampen market sentiment in the short-term, Asteco believes that in the long-term it will ultimately boost the economy.
In regards to the residential market, which is generally exempt, the tax is anticipated to have a minimal fallout as it is only applicable indirectly to items such as maintenance, utility and agency fees, with some or all of these charges expected to be initially absorbed by Owners/Landlords.
“Whilst VAT affects all of us, the impact for Tenants will be negligible. The commercial market will adjust accordingly as we see the system successfully implemented nationwide,” John Stevens, Managing Director, Asteco.
For more details, please visit www.asteco.com
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KEO International Consultants, a leading design, engineering and project management firm, joined hands with Seddiqi Holding and Asteco Property Management to organize a blood donation drive in conjunction with Dubai Health Authority. The event, which took place at Rolex Tower on Sheikh Zayed Road in Dubai, attracted a large number of donors from companies with offices in Rolex Tower as well as local businesses in the area participated in the "Give Blood, Recycle Yourself" campaign.
Alyssa Sultan, Deputy Vice President Human Resources Corporate Services and Managing Director of Facility Management & Administration at KEO International Consultants said: "Our partnership with Seddiqi Holding and Asteco Property Management has helped create more awareness of the importance of blood donation. We want to thank not only the DHA staff and those who donated blood, but also the volunteers who worked hard to make this event happen. In KEO, we believe our purpose goes far beyond helping our Clients to deliver the most iconic projects in the region - we want to try to make a difference in the community. The tremendous response to this initiative further strengthens our commitment to corporate social responsibility. We sincerely hope it will inspire others to give the gift of life by donating blood in the future."
KEO has organized several blood donation drives across the GCC as part of the Firm’s program to support employee health and wellbeing and promote the culture of giving back to the community.
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