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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The Middle East’s largest independent full service real estate company has received global recognition as the company is crowned Best Property Consultancy in Marketing at the International Property Awards 2017
Asteco has been recognised as the ‘World’s Best’ at the International Property Awards 2017 during a gala awards ceremony at the internationally renowned Savoy Hotel, London, earlier this week.
Beating off stiff competition from Europe, Canada, the Caribbean, USA, Central & South America, the UK, Asia Pacific, including submissions from Colliers International and German real estate powerhouse, Rubina Real Estate GmbH, Asteco was awarded the Best International Property Consultancy – Marketing, for the work the company has undertaken for The Residences at St Regis, Abu Dhabi.
John Stevens, Managing Director of Asteco said: “It is a tremendous honour to be recognised as the best in the world. Asteco has once again validated the skills and expertise to deliver international standards and demonstrate the attributes needed to win on the global stage.”
The International Property Awards are open to residential and commercial property professionals from around the globe, and recognise the highest levels of achievement by companies operating in all sectors of the property and real estate industry.
Early this year Asteco was successful in the Africa & Arabia Property Awards winning the top award for the categories; Best Property Consultancy for Abu Dhabi, Best Lettings Agency, Best Property Consultancy in Dubai and the Best Property Consulting Marketing in Abu Dhabi. Asteco represented the Middle East for the last three categories in London.
“Asteco has once again proven why we are one of the top property management teams in the UAE’s highly competitive real estate industry. The team has worked incredibly hard this year and these awards, both at an international and regional level, are testament to what we have achieved. As a team we’re extremely proud to round 2017 off at the very pinnacle of the real estate industry,” added Stevens.
Minister of Housing for KSA, HE Majed Al-Hogail welcomed to the Asteco stand by Ahmed Albader, General Manager of Asteco KSA
Asteco Saudi Arabia, the first and only Asteco franchisee in the Kingdom, and the main real estate division of the Rabiah & Nasser Group (RANCO), a leader in the Saudi construction, industrial and real estate industry, attended their inaugural Restatex Cityscape exhibition in Riyadh International Convention & Exhibition Centre recently.
John Stevens, Managing Director, Asteco, said: "Restatex Cityscape Riyadh is the largest and most prominent real estate exhibition held in the Kingdom. The event provided Asteco KSA with the perfect platform to showcase our latest project in Dubai; The Address Residences Jumeirah Resort & Spa. The response we had to this development was incredibly positive."
The real estate exhibition and urban forum in Riyadh brings together investors, developers, government officials, financial institutions and real estate professionals from KSA and the wider Gulf region, all under one roof.
The show was officially opened by the Minister of Housing for KSA, HE Majed Al-Hogail, who spent time at the Asteco KSA stand – the only non-Saudi stand he visited – where he was welcomed by Ahmed Albader, General Manager of Asteco KSA.
Albader said: "We are extremely proud to bring the Asteco brand to the Kingdom, our extensive experience and solid reputation in the region is perfectly aligned with Asteco, creating a mutually beneficial partnership. Attending our first Cityscape under the Asteco banner not only underscores our commitment but also sends out a clear message that we’re here to do business and make our mark in the Saudi real estate market."
RANCO is recognised as one of the key driving forces behind Saudi Arabia’s positive urban development. Projects developed include residential and compound properties in Riyadh and Al Khobar, as well as commercial office complexes in Riyadh, Al Khobar and Jeddah.
Currently, Asteco has many franchises across three different countries in the GCC, including Property Concierge, Haxxon Real Estate and Savana Homes Real Estate in Dubai, as well as Jordan based Astra Plaza. All franchisees benefit from more than three decades of real estate experience earned by Asteco. Franchisees can also capitalise on a tailored set-up support service, free regular professional training and regional brand visibility while tapping into an enviable Residential and Commercial, Sales and Leasing portfolio.
To find out more about franchise opportunities with Asteco, please call +971 600 547773 or visit www.asteco.com
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Abu Dhabi continues to experience negative growth across all property types due to weakness in the job market and reduced housing allowances, according to the Q3 Abu Dhabi Real Estate report by leading real estate consultancy Asteco.
Average apartment rental rates dropped by 3% over the quarter and by 10% over the last 12 months, with the highest declines recorded for mid-end properties and large units within prime and high-end projects.
In the high-end segment, the highest year-on-year (YoY) declines were recorded at Abu Dhabi Corniche (down 15%), while mid-end and low-end areas evidenced the largest declines, including Al Reef Downtown, Khalifa and MBZ City.
Sales prices for apartments declined 3% quarter-on-quarter (QoQ) and 10% YoY. The most significant YoY declines in sales price were recorded in Al Muneera and Reef Downtown, both down 12%, with the highest QoQ declines reported in City of Lights, down 8%, and Sun & Sky Towers, down 6%. Both Al Bandar and Saadiyat Beach Residence showed resilience, being unchanged for the quarter.
Approximately 2,750 apartments have been completed across the emirate since the beginning of 2017, compared with 1,350 for the 2016 calendar year. In addition to the 800 units delivered in Q3, a further 1,500 apartments are due to handover before the end of 2017.
"We are experiencing a weak labour market with reduced employment opportunities and a tightening of housing allowances. This, together with additional supply since 2016 has led to increased vacancy rates which we expect to continue into 2018. Landlords are discounting rents and offering flexible payment terms, (up to 12 cheques) to retain existing tenants and secure new leases," said John Stevens, Managing Director, Asteco.
Villa rental rates decreased by 3% QoQ and by 6% YoY. Al Raha Gardens, Hydra Village and the larger units within Saadiyat Beach Villas recorded a more pronounced drop with rents softening by 7%, 4% and 5% respectively.
The highest YoY decline in villa sales was recorded in Hydra Village, at 9%, with QoQ results showing a decline of 3%, the same as Raha Gardens.
Only a small number of villas were delivered in 2016, however approximately 550 villas have been completed in 2017 and a further 250 villas are due for delivery before the end of Q4.
Stevens said: "Rising vacancy rates have been experienced in many villa communities as tenants opted to downsize to smaller or more affordable properties, whilst some even transitioned to apartment units to reduce their accommodation expenses."
He added: "Despite a marginal decrease in sales prices for completed villas, demand for prime and high-end off-plan projects, particularly those located on Yas Island and Saadiyat Islands, remained strong."
Similar trends echoed throughout the office market due to a subdued economy, despite a modest recovery in the oil price since the start of the year. Office accommodation is evidencing low occupancy rates with approximately 170,000 sq.m. of office space having been delivered over 2016 and 2017.
Stevens said: "Office rents were broadly unchanged over the quarter; however, evidence indicates declines of 5% to 10% on contract renewals within several Grade A and B office buildings. Landlords have actively sought to reconfigure accommodation into smaller units and offer rent free incentives to retain existing tenants and secure new tenants".
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The Q3 Dubai Real Estate Report from leading real estate consultancy Asteco has highlighted no movement in apartment sales prices q-on-q, the y-on-y figures however showed a more pronounced decline, averaging 4%, with Business Bay and Dubai Marina both posting an 8% drop, followed by Dubai Sports City, International City and Jumeirah Village, each recording a fall of 7%. Only The Greens and DIFC remained on par with Q3 2016.
Apartment rental rates over the quarter fell 4%, while y-on-y rates showed a marked drop of 12%. Dubai Marina posted the highest decline in rental rates at 19%, compared to Q3 2016, followed by Downtown Dubai (18%), Dubai Sports City (16%) and Bur Dubai (16%).
In the first three quarters of the year 10,200 apartments were delivered and a further 3,500 units are due for completion before the end of 2017. In 2016, the total supply was only 8,750 apartments.
"There has been a steady rise in new projects reaching completion. However, Asteco believes a significant amount of the supply previously forecasted for handover in Q4 2017 will spill over into 2018. These delays are likely to result from both intentional phasing considerations and unplanned construction delays/financial issues," said John Stevens, Managing Director, Asteco.
The report highlighted marginal changes across all property types in Q3, with sales in the office and apartment segments remaining flat, and in the villa segment showing a decrease of 1%.
The figures are a minimal improvement on Q2 results, where price declines for apartments, villas and offices were recorded at approximately 3%, 2% and 2%, respectively.
"The Q3 results clearly showed a rise in transactions across the market, as owners and tenants continued to secure the best deal possible. However, while the market remained flat or witnessed marginal decreases, some areas did show more pronounced drops, particularly year on year," added Stevens.
Similar patterns were recorded in the villa segment, with a nominal q-on-q sales price drop of 1% and a decrease of 3% y-on-y. Jumeirah Village posted the most significant decline y-on-y, at 9%, followed by Dubai Sports City at 6%.
Villa rental rates echoed the apartment market, with 3% q-on-q and 10% y-on-y drops. The Springs showed the highest decline compared to Q3 2016, at 18%. This was followed by Arabian Ranches (15%), Palm Jumeirah (15%), Dubai Sports City (14%) and Jumeirah Village (14%).
In reaction, rental rates for different unit types within the same community are now blurring. For example, within a rental rate range of AED110,000 to AED140,000 tenants can currently choose between a two, three, four or five-bedroom townhouse in Jumeirah Village.
The price disparity emerged despite supply in the villa market remaining consistently lower than that of the apartment market, with a total of 2,325 villas delivered in the first three quarters and an additional 1,300 units expected for completion in 2017. That compared to the 5,000 delivered in 2016.
Stevens commented: “The rise in new finance options for off-plan residential projects, including increased incentives and post-completion payment plans, has opened the market for buyers with more limited equity. These developments now demand a larger share of the sales volumes compared to completed units, with rates continuing to decline as a result.
"Compounding the issue, despite increased government spending on infrastructure, hospitality and retail in the run-up to the Expo 2020, is that market sentiment remains low. This is largely due to weak employment growth and the bearish outlook in terms of oil prices and global economic outlook," he continued.
The most challenging asset class this year, according to the report, is the commercial market. Sales prices and rental rates remained flat in Q3, compared to Q2, with a y-on-y decline of 6% for sales and a marginal 2% for rentals.
While the overall trend is due to limited demand in an oversupplied market, the reluctance of landlords to lower rates in certain areas, is causing the market to flatten. Landlords need become more proactive and offer incentives to tenants to increase take-up.
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The Middle East's largest independent full service real estate company named overall Arabia regional winner in three categories, with five stars for Best Lettings Agency and Best Property Consultancy in Dubai and Best Property Consulting in Marketing in Abu Dhabi
Asteco was recognised at the Africa & Arabia Property Awards during a glittering gala ceremony at the JW Marriott Marquis recently as the UAE's leading real estate firm won the top award for the categories Best Lettings Agency and Best Property Consultancy in Dubai and Best Property Consulting Marketing in Abu Dhabi.
Asteco was also successful in the Best Property Consultancy category for Abu Dhabi.
The company, nominated as Arabia’s best, will now represent the Middle East on the global stage in London on the 4th December, competing with other winning entries from Europe, Canada, the Caribbean, USA, Central & South America, the UK and Asia Pacific for the title of the 'World’s Best'.
“Asteco has once again demonstrated why we are one of the leading lights in the UAE’s real estate industry. In only the second year of participation, we have been recognised in three categories as the market leaders beating stiff competition from the best of the UAE's real estate industry and we are now looking forward to representing the Middle East on the global stage later this year” said John Stevens, Managing Director, Asteco.
In 30 years Asteco has amassed a total sales value of over US$13 billion with a total of 13.8 million sqft sold, the equivalent of 216 soccer pitches! The company has also let 11,363 units totalling 16.4 million sqft and currently manages 13,000 units. The company has also expanded in the last three years with the addition of nine franchisees with a total of 98 staff.
"We've built an incredible team at Asteco based on market-leading experience, innovation and embracing new technologies. These professional skills are essential to our ability to plan for the future. We look forward to competing with our international peers in London and being the standard bearer for real estate professionalism throughout the GCC," added Stevens.
The Arabian Property Awards are part of the long established International Property Awards, recognised as one of the prestigious accolades in the residential and commercial property industry. Following a stringent judging process, held in London, involving a panel of over 80 international experts, Asteco was awarded five-stars in both categories and progressing to the global stage of proceedings.
Dawn Draper, Director, MENA region for the International Property Awards, said: "Asteco have once again demonstrated their commitment to excellence and customer service and have been recognised by an international panel of professional, pre-eminent judges, with three out of four entries receiving a nomination for the Best Arabia titles. Asteco are a great example of what the International Property Awards are all about. Commitment, credibility and influential, reinforcing their strength and position in what is one of the most competitive industries, in one of the most competitive regions in the world."
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Situated in the heart of Dubai’s business district, the mixed-use tower boasts over 650 modern and high-end apartments
Asteco, one of the region’s leading real estate firms, has been appointed exclusive leasing agent for Duja Tower, a unique building owned by Nasser Lootah Real Estate in the very heart of Dubai’s business district.
Prominently located along Sheikh Zayed Road, opposite Emirates Towers and Dubai World Trade Centre, Duja Tower (Duja meaning 'just before dawn') is a G+52 mixed-use tower made up of nine retail units on the ground floor, 11 offices on the first floor, and over 650 modern and high-class apartments.
Kieran Burley, Head of Commercial & Project Leasing, Asteco, said: "The property is ideally located right in the centre of Dubai’s business district, within easy reach of DIFC, Downtown Dubai and Business Bay. It also ensures easy access to the popular recreational destinations within the city, including beautiful parks, pristine beaches and the world class Dubai Mall and Burj Khalifa."
"Apartments boast high ceilings and huge glass windows with balconies providing a light and refreshing environment, while offering breath-taking urban views."
Tenants can choose from a range of spacious one to three-bedroom apartments, starting at AED90,000 per annum for a 1,060 sqft one-bedroom; AED125,000 for a 1,361 sqft two-bedroom; or AED170,000 for a 2,351 sqft three-bedroom apartment. Already, 25 of the properties have been leased by Asteco.
Amenities include a prestigious health club located on the 51st floor, which enjoys spectacular views across the Dubai landscape; as well as an infinity pool, separate spas for men and women, a children’s play area, gym and 24-hour concierge and security services.
Retail Stores are located on the ground floor, while there is also parking spaces for approximately 700 vehicles in a separate 11-storey building to the rear of the tower. Metro stations, World Trade Centre and Emirates Towers, are also within easy access.
Riyadh Davids, General Manager, Nasser Lootah Real Estate, owner of the building,
said: "Duja Tower is a residential address of distinction, with attractive rental rates, matching the average for this area of the town. Extending some 191 metres high, the tower is marked at quarter points along the vertical elevation by luxurious sky lobbies, which provide cascading points of interest leading to a glazed dome at its top symbolising the clear dawn skies of its desert setting."
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The partnership was announced on Tuesday 12th September at City Scape 2017.
Lootah Real Estate Development, one of the region’s prominent luxury real estate developers, has appointed Asteco, a leading real estate consultancy and property management firm, as the exclusive sales agent for its residential property “The Waves”. Asteco will oversee the marketing and sales demand for the 175,905-sq. ft. modern, luxurious project.
Located at Jumeirah Village Circle, “The Waves” features Studios, one bedroom and one bedroom loft apartments ranging from areas of 485 Sq. ft. to 2,000 Sq.ft. The property is designed to cater to a specific residential lifestyle with beautifully proportioned units finished to the very highest of standards.
Comprising of two elegantly designed state-of-the-art buildings, the project is conveniently located in Al Barsha South and will offer 135 units in total. The towers are planned to maximize views and community interaction without compromising on personal space and privacy
Saleh Abdullah Lootah, Executive Director of Lootah Real Estate Development said: “We’ve launched “The Waves” based on an understanding of modern trends and the requirements of communities in Dubai. We are committed to the highest quality standards in every aspect of the project and are confident that the Asteco team will communicate and market this successfully.”
“Through Asteco we aim to communicate the variety of flexible payment plans available for Investors and potential buyers and highlight the lucrative proposition for home buyers. “he added.
John Stevens, Managing Director, Asteco said: “Modern design and innovation are integral to The Waves market appeal. The cool urban feel, a host of amenities and the short distance to Jebel Ali Free Zone, Dubai Media City, Al Maktoum International Airport and the Expo 2020 site, will undoubtedly appeal to a host of young professionals. Investors can expect high occupancy rates for their property while end-users have the advantage of an affordable property in a central location.”
The project broke ground on September last year and has successfully completed close to one third of the project. More information about Lootah Real Estate Development can be found at www.lootahdev.com.
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Asteco’s Jordan franchise selected to sell 175 villas in exclusive gated community, Andalucía, developed by Jordan Kuwait Bank; Asteco to reinvigorate stalled sales as exclusive agent for the mixed-use development
Asteco Jordan, a franchise of the UAE’s largest real estate firm, has been appointed as exclusive sales agent for the 175-villa Jordanian development Andalucía, near the country’s capital, Amman.
Located on the Airport Road, just 20km from Amman, and developed by Jordan Kuwait Bank, Andalucía (named after the Muslim Kingdom of Andalucia in Spain), is the first gated community to be launched in Jordan and consists of a range of villa configurations including spacious 3, 4, 5 and 6-bedrooms units. Prices start from JOD 275,000.
A total of 588 villas in the development will have access to a host of amenities including a health club, shopping centres, restaurants, coffee shops, parks, clinics, as well as indoor and outdoor swimming pools.
Hussein Safadi, General Manager of Asteco Jordan, said: “Andalucía is one of the premier residential addresses in Amman. Each property is built to the highest specifications with unrivalled build quality, further distinguishing it from other developments in the region. We fully expect Andalucía to be popular with investors, end-users and tenants.
“In 2016 the market went through a difficult period and transaction levels were subdued, however sales were still taking place. All indications this year point to improvement in the market as the economy continues to grow and strengthen. Developments, such as Andalucía, create further depth resulting in a more bearish real estate market.”
The partnership with Jordan Kuwait Bank will see Asteco Jordan utilise one of the bank’s branches to set up a sales centre while also increasing staff numbers to deal with the increased enquiries. An advertising campaign will also run throughout Dubai as the company targets expat Jordanians.
John Stevens, Managing Director, Asteco, said: “Our franchise model was launched in 2014 to offer real estate companies, independent realtors and regional entrepreneurs looking to diversify their existing businesses, or launch a start-up, access to Asteco’s 30-year brand pedigree and its successful business model. The licensing division has allowed us to further propagate the strength of the Asteco brand, image and reputation in new markets through our trusted and capable partners.
“Such has been the success of our 14 franchisees, this year from January to July franchisee profits were up 47% compared to the same period last year to over AED 2 million. The team at Asteco Jordan have done exceptionally well to secure this appointment and already H2 profits look well on target to better last year’s results.”
Asteco’s franchisees will be exhibiting a range of secondary sales and leasing market opportunities at this year’s Cityscape Dubai, taking place at the Dubai World Trade Centre from 11-13 September. The team will be showcasing opportunities in residential areas including Dubai Silicon Oasis, Sheikh Zayed Road, Jumeirah Beach Road, Saadiyat Island in Abu Dhabi and Andalucía in Jordan with various apartment and villa configurations available on a ‘shop window’-style stand.
Asteco is the only locally established, full service real estate business in the region offering a bespoke franchise opportunity. As the largest real estate franchise company in the Middle East, Asteco currently has 14 franchises in Jordan, Dubai and Saudi Arabia. Combined, the franchisees employ over 140 brokers and 20 administration staff, while the company also has a training academy as part of its value add to the franchises.
Asteco will be exhibiting at Cityscape Global on Stand S2B30.
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