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An increasing number of tenants are relocating from their villas on Abu Dhabi island as prices in the third quarter of 2010 averaged 35 per cent more than some communities on the mainland, said a report.

Al Reef is becoming a popular location thanks to improved road access and affordable prices and as more stock is released over the coming months prices are expected to fall further, according to the Asteco Abu Dhabi Q3 2010 Report, published today by leading UAE property management company Asteco.

“With increasingly more supply delivered on the mainland, we are starting to see a population shift from the traditional areas of the Abu Dhabi main island towards the mainland that offers better value for money options, especially in terms of villa developments,” said Elaine Jones, CEO of Asteco Property Management.

There were mixed fortunes for apartments, reflecting the spread of quality on offer. Landlords of prime buildings are still able to command high rental prices, but Asteco reports that overall prices have weakened slightly; “prime” buildings saw rents fall 7 per cent with lower quality buildings dropping 10 per cent in Q3 – a trend Asteco expects to continue.

“This suggests the start of a flight to quality that is widely predicted to continue and accelerate as further new better quality supply is delivered to the market over the coming months,” said the report.

“But in a falling market negotiating strength is leaning towards tenants [and] it is becoming increasingly important for landlords to recognise this.”

On the sales side, the continued delay in handover of apartments within the Investment Areas on Reem Island and at Al Raha Beach has resulted in transactional sales activity remaining weak over the last 3 months and prices coming under pressure.

“Most of the transactional activity over the last three months has been concentrated at Al Reef due to the continued hand over of properties by the developer increasing the availability of ready to move in stock,” the report said.

“Prices have however continued their downward trend with the larger four- and five-bedroom townhouses dropping by between 5 per cent to 8 per cent and five-bedroom villas with a swimming pool under the Dh2 million ($544,500) mark.  Some are selling at close to their original price.”

With some developers sitting on unsold inventory, Asteco predicts the market may witness the introduction of lease-to-own schemes, allowing tenants to convert a percentage of their rental to a down-payment to make projects more appealing.

“In terms of the office market rental rates have dropped significantly this quarter with the highest decline (44 per cent) seen within new shell and core buildings, reflecting landlords desire to achieve good levels of long term sustainable occupancy as opposed to an initial high headline rent,” said the report.

Meanwhile, Al Ain is leading the way on the commercial front with rents jumping 10 per cent and 13 per cent in the office and retail sectors respectively, which contrasts sharply with the capital where rents have contracted. This, however, is encouraging smaller companies to upgrade their office space.

“The rental rate reduction has been most noticeable for the larger residential units, both villas and apartments, as new-comers to the city are mainly singles, couples or workers who are seeking smaller residential units,” the report said.

“This phenomenon is further accentuated by the fact that companies that previously secured housing for their staff are now paying out housing allowances, and that staff often prefer moving into smaller residential units in order to keep the remainder of their allowance for themselves,” it added. – TradeArabia News Service

Dubai’s Emaar Properties, builder of the world’s tallest tower, said on Wednesday its board has agreed to issue a convertible bond worth $375 million.

Analysts said the note was likely to help Emaar, the UAE’s   largest listed property firm, refinance short-term debt obligations.

The firm will issue the bond through a special purpose vehicle which will lend the funds on to Emaar, it said in a statement on its website after an Emaar board meeting on Wednesday.   

The convertible bond, which has an increase option of $125 million and matures in December 2015, has a coupon of 7.25 percent to 8.25 percent, a banker familiar with the deal said.

JPMorgan, Royal Bank of Scotland and Standard Chartered are joint bookrunners. Books are to close later on Wednesday, the banker added.   

“This is a pretty landmark transaction. It wasn’t so long ago that real estate and Dubai equalled a ‘no-go’,” said the banker, who asked not to be named.

Emaar’s plans come after the Dubai government returned to bond markets on Wednesday with a $1.25 billion bond, its first sovereign issue since the 2009 debt crisis. Order books suggested strong investor appetite.

“(Emaar’s) objective is to term out short term debt and deleverage their balance sheet,” the banker added. “The issue has already been pre-marketed to international investors to test appetite. The main demand is from convertible and hedge fund investors in Europe, then Asia and then the region.”     

Among Emaar’s high-profile assets is Dubai mall, the world’s largest shopping centre.
 The developer also has a joint venture with Italian fashion house Georgio Armani to develop luxury hotels globally and has said it will focus on expanding in the Middle East, North Africa and South Asia in 2010. – Reuters

Dohaland will be showcasing its flagship project Musheireb, an innovative approach to downtown regeneration, for the first time at an upcoming real estate exhibition in Munich, Germany.

Expo Real, running from October 4 to 6, is considered the largest trade fair for commercial real estate in Europe, with over 1,500 exhibitors from across the globe expected to showcase their real estate product portfolios.

“Qatar has been named the fastest growing economy in the world by the IMF, and Musheireb adds a new ‘architectural’ dimension to a series of Qatari achievements as the nation continues to take huge strides forward, both economically and socially,” said Dohaland’s CEO Issa M Al Mohannadi.

“As a national developer we are proud to have our own architectural identity and we want to share that with the world,” he added.

Musheireb, Dohaland’s flagship project that will regenerate a 35 hectare site in the heart of Doha, is set to transform the capital into the vibrant, cohesive and culturally alive city centre it once was. It will do so while simultaneously addressing issues of congestion, sustainability, and maintaining the aesthetic and social individuality of Qatar.

“Dohaland believes that sustainable, culturally sensitive and environmentally responsible developments, particularly in metropolitan areas, can provide the answers that an increasingly urbanized, energy-hungry world needs,” Al Mohannadi added.

“The DNA of our Qatari architectural language can be applied to developments anywhere in the world. The key is to learn from the past, when people lived in harmony with the environment because they felt their dependence on it firsthand.”

“Embracing modern technology should never come at the cost of totally discarding the cumulative knowledge of millennia – particularly in construction and real estate,” he concluded. – TradeArabia News Service

Bahrain is planning to build a new state-of-the-art international airport in Muharraq.

The ambitious scheme was unveiled yesterday marking His Majesty King Hamad's landmark visit to Arad.

Feasibility studies on the planned development have already started,' Finance Minister and Mumtalakat chairman Shaikh Ahmed bin Mohammed Al Khalifa said.

The new milestone, he explained, will integrate the latest standards characterising international airports to serve as a facade epitomising the new Bahrain and consolidate its long-standing reputation as a transit hub for transport and trade.

Bahrain International Airport and the seaports sector are to undergo a major revamp.

'The aim is to ensure world-standard quality services and bolster the economic and social development march in Bahrain.' Shaikh Ahmed said.

Bahrain Airport Company will be in charge of upgrading the airport infrastructure and other integrated facilities.

The firm will also embark on a campaign to attract leading regional and international companies in all fields.

Shaikh Ahmed highlighted the valued-added one-square-kilometre Bahrain Logistics Zone (BLZ).

'Located 3km away from the Khalifa Bin Salman Port, the BLZ is the region's first boutique logistics area offering a high-quality environment to companies that meet its tenancy requirements,' he said.

He described the zone establishing Bahrain as a logistics hub for the Northern Gulf.

He also stressed the importance of the Khalifa Bin Salman Port and its adjacent service area, boasting offices, restaurants, retail facilities, warehouses and a petrol station, in addition to a multi-storey parking for cars intended to be re-exported.

'Work on new 1,380-metre-long jetty is expected to be completed later this year to boost the capacity of Asry even further,' Shaikh Ahmed said.-TradeArabia News Service

Abu Dhabi Tourism Authority (ADTA), which manages the emirate’s tourism industry, has begun piloting its green hotel guidelines across four properties which are in the early design stage.

When the trial is complete and assessed, by the middle of next year, the authority will absorb its green hotel standards into its world-class hotel classification system.

“This is the first government green hotel design guidelines for new hotels and is based on Abu Dhabi’s Estidama Pearl Rating Scheme, which is a green building rating system for all new buildings in the emirate,” explained Nasser Al Reyami, Tourism Standards director, ADTA.

“By the middle of 2011, Abu Dhabi’s hotels and hotel apartments will have a green rating included in their star rating.”

Al Reyami outlined the news as he delivered the keynote address at the inaugural Great GM Debate, hosted by Hotelier Middle East magazine in Dubai.

Al Reyami said the guidelines are being piloted across two, four-star and two, five-star hotels representing a mix of resorts and down-town urban properties.

Al Reyami said ADTA’s Green Hotels Programme will be the world’s largest with more than 120 properties involved.

ADTA has already developed an Environmental, Health & Safety Management System (EHSMS) for the emirate’s tourism industry – the only one in the world to cover an entire tourism sector.

Al Reyami said ADTA believes that greening the emirate’s hotels is good for the environment and makes keen business sense.

“The fact of the matter is that going green makes dollar sense. Our regional and international customers are becoming increasingly interested in staying in environmentally-friendly hotels. Online booking sites, such as tripadvisor and Expedia, now have sections specifically for the green traveller. Other booking services, such as gogreentraveltreen.com or responsibletourism.co.uk are becoming very popular. As we target international travellers, we need to meet their green expectations.”-TradeArabia News Service

Yokogawa has won an order from Hanwha Engineering to supply control systems for boilers, turbines, and auxiliary facilities of units 5 and 6 (2 x 275 MW)  at the Marafiq thermal power plant in Saudi Arabia.

Marafiq, which was established in 2003 as the first private utility company in Saudi Arabia, supplies electric power and water to the country’s industrial cities. Units 5 and 6 of the Marafiq thermal power plant will be powered by fuel oil and are being constructed in the Yanbu industrial city. The plant is scheduled to start operation in 2012.

For this thermal power plant, Yokogawa will be supplying Centum VP series integrated production control systems, ProSafe-RS safety instrumented systems, PRM integrated device management software packages for remote monitoring and diagnosis of plant equipment, and Exaquantum plant information management systems.

Yokogawa Electric Korea and Yokogawa Middle East will work together on the provision of delivery, engineering, installation, and commissioning services.

In addition, Yokogawa will supply a plant operation training simulator that will be used to train operators under complex simulated plant operating conditions.-TradeArabia News Service