Sunday, March 30, 2014

There are more 'reasonable' ways to survive the UAE's vicious rental market (By Michael Lahyani)


In a perfect world, landlords and tenants will work together, doing their bit to keep each other happy. However, in reality, landlord-tenant relationships are most often than not characterised by conflict of interest, bitter conversations and, sometimes, legal battles.
With rising rents across the UAE and tenants feeling the crunch, the old cliché of the rocky landlord-tenant relationship has been all the more reinforced. However, today, it’s not just high rents that tenants have to worry about. Some landlords also cash in on renters’ situation to find an affordable property to live in, by evicting them in the pretext of needing apartments for personal use or renovation in order to rent them out at a higher price.
The key thing to remember is that there are laws in place today to protect the interests of both parties. The market is maturing and whilst there are challenges, we’ve also the introduction of new real estate laws to provide regulation, transparency and clarity. As I mentioned in my last column, your landlord cannot increase your rent by a ridiculous number. Today, whether or not a landlord can increase the rent is not governed by a two-year stay, but by the RERA rent calculator, which is found on the dubailand.gov.ae website. As a tenant, you should be given a 90-day notice period should your landlord wish to impose an increase to the existing rent value.
However, if a landlord has asked you to evict the property due to him or his immediate next of kin moving in, then for a period of two years from the date of the eviction, he cannot re-let the property. If you discover that he has re-let the property during this two-year period, you can open a case at the rent committee and will be entitled to compensation as per the law. Also, a landlord has every right to sell his property and in doing so, has to give you 12 months’ written notice. However, if the landlord fails to sell the property, then the 12 months’ notice becomes void and you will not have to move out.
For those of you renting in Abu Dhabi, it’s good to keep in mind that the laws of Abu Dhabi are different to those of Dubai. In Abu Dhabi, the landlord can give a two months’ eviction notice to the tenant as long as the latter has been in the property for four years. Sharjah tenants are protected against rental increases for three years as a landlord is not allowed to raise the rent during this time. However, rental increases are allowed in the fourth and every subsequent year hence.

Also, whilst landlords can run checks on potential tenants, tenants don’t get to do the same. However, I see nothing to stop would-be renters from doing some conscientious research such as checking if the landlord actually owns the property at the Land Department or asking for a copy of the evidence of the landlord’s ownership of the apartment/villa.
However, we also need to look at the wider picture and keep in mind that ultimately all landlords want tenants who pay their rent on time, take care of their property and keep noise levels down. After all, he is entrusting you with an asset worth hundreds of thousands of dirhams whilst incurring annual costs for its upkeep. Also, given that the years since the downturn saw a dramatic decline in rental values, landlords have the right to pick up fair value market rents, now that the market is recovering.
The key thing to remember is that the market is driving the rent, not the landlords themselves. Hence, tenants and landlords need to be aware of their rights and responsibilities and work together to reduce the stress involved with renting. The property market today is driven by strong market fundamentals and property owners have a role to play in preserving its sustainability. Ultimately, the economy will determine the wider picture of the market and how situations develop with respect to price.

By: Michael Lahyani - The CEO and founder of propertyfinder.ae.
dubai landlords, dubai rentals, rentals, tenancy,

Article Source: Al Bawaba http://bit.ly/1fETLXH


Saturday, March 29, 2014

International Tenants Fueling Dubai's Office Markets

International occupiers of office and industrial space have demonstrated renewed confidence in Dubai, where an increase of new entrants into the region is being added to by current international occupiers that are now looking to expand their commercial space to support business growth. 

Retail has continued to be the star performer across the commercial sectors with rental growth set to exceed that of the mainstream office and industrial markets in Q1 2014. This confidence in the sector has brought a number of new retailers into the UAE market and this has been matched by multiple announcements of new malls planned for development over the next two years.  These include a new collaboration between Tecom Investments and Majid Al Futtaim to build a one million sq ft mall at the International Media Production Zone (IMPZ). 

The expectation of landlords across all sectors in the lead up and subsequent success in winning the hosting rights for the 2020 World Expo, undoubtedly fuelled further momentum across the Dubai real estate market where some commercial landlords quite literally increased their quoted rental rates overnight. This resulted in a limited number of deals stalling and is unlikely to have any significant impact on occupier activity. In fact, it has encouraged some occupiers to take more immediate action in expansion, or relocation to try and insulate themselves from further rent increases in the short term.

International occupiers new to the region, however often continue to apply "Western" mindsets and business expectations to the Dubai market. Managing their expectations in terms of timing, quality of information, leases, rent negotiation levels, municipality approvals, trade license processes, etc. is a large part of every transaction. These occupiers are often based in more landlord-led markets such as those in Europe, India and the US, where transactional fees are not met by tenants.

An increasing number of non-financial businesses are now interested in registering within the Dubai International Financial Centre (DIFC), which is due in part to the efforts by the freezone to encourage a wider range of business types to register within the freezone precinct that sits in the centre of Dubai.  Current occupancy in DIFC owned buildings within the Gate Village and precinct has reached almost 100%. This is forcing occupiers to consider strata-owned space within the zone, which is translating into rising rents, although occupancy rates in some of these buildings remains relatively low. In contrast, the TECOM freezones of Dubai Media City and Dubai Internet City are operating at near 100% capacity across both its own buildings and privately owned stock.  This is presenting a problem for established occupiers who need more space but don't wish to change location or freezone license.

Other areas that fall under the administration of Dubai's Department of Economic Development (DED) such as Business Bay and the older buildings on Sheikh Zayed Road remain popular for smaller, local occupiers due to the smaller floor plates. Business Bay was the added attraction of strata ownership.



dubai commercial, dubai office, dubai office market,


Article source: http://bit.ly/1gwjoyW

Tuesday, March 25, 2014

Dubai Land Department Announces the Issuance of Unified Real Estate Contracts

In line with its stated aim to create a transparent and professional real estate market with clear and measurable standards, Dubai Land Department ( DLD ) has announced the launch of unified real estate contracts. The new agreements have been designed to regulate the relationship between the parties involved in property transactions and to avoid problems that arise from misinterpretation with documents. The contracts will become a mandatory requirement starting May 1, 2014.

The unified real estate contracts will be accessed via the Dubai government E-mart website (www.emart.gov.ae), where it will provide customers with three models of unified contracts; a contract between seller and buyer, a contract between seller and broker and a contract between buyer and broker. The documents can be downloaded immediately from the site and be filled with the required data for each transaction before being signed by the relevant parties. The contract becomes formal and completed after it has been recorded and documented at DLD .

In its announcement, DLD stressed that its unified real estate contracts will be used officially from the beginning of May 2014 in all transactions that relate to the buying and selling of property. The department is currently providing models of the new contracts on the Dubai smart property marketplace, E-mart.

Dubai Land Department, Dubai real estate buyers, real estate contracts, tenancy contracts,

Article source: http://bit.ly/QaAVCf

Tuesday, March 18, 2014

Dubai and Abu Dhabi trail in skyscrapers investment list

Skyscrapers in Dubai and Abu Dhabi are trailing far behind the leading cities in a list of the world's priciest high-rise real estate.
The two UAE cities were placed 16th and 18th respectively in the global ranking, according to findings by Knight Frank.
Hong Kong and Tokyo staved off all challengers to claim the top spots. New York’s Manhattan was ranked third.
The consultancy listed Dubai’s “prime capital value” at Dubai’s priciest skyscraper as commanding $6,896 (Dh25,308) per square metre, while Abu Dhabi’s is estimated at $6,251. However, the costliest piece of skyscraper real estate in Hong Kong is estimated at a substantial $69,222, Tokyo’s at $42,283 and Manhattan’s at $25,740.

“While Hong Kong and Tokyo are too far ahead to lose first and second place, I see some competition amongst Manhattan, London and Singapore in the coming year,” said James Roberts, head of commercial research at Knight Frank. (The Knight Frank Skyscraper Index bases the commercial value on an analysis of the capital value of upper-storey floor space.)
Local market sources say that Burj Khalifa is not the runaway winner when it comes to skyscraper values in Dubai.
 “New launches in Downtown have been taking place in the range of Dh2,000-2,800 a square foot for off-plan properties and certain units in Residences — especially two- and three-beds facing Burj Khalifa and the Fountain — are already at Dh3,500-4,000 per square foot,” said Niraj Masand, partner at Banke M.E. “Burj Khalifa units are available in the secondary market at between Dh3,800-4,200 a square foot.”



Good upswing
During the absolute peak of Dubai’s property market prior to late 2008, Burj Khalifa residential units were quoting in the range of Dh 8,000 a square foot. (The project itself was completed in late 2009 and the handovers started from early 2010.)
“While the rest of the market has seen a good upswing, the best of Burj Khalifa is still to come,” Masand said. “Over the last six months there has been a resurgence in demand for apartments in Burj Khalifa. Typically, trophy towers gain demand when there is a resurgence of confidence in the markets and this is a prime example.”
In Abu Dhabi, the Sun and Sky towers on Al Reem Island lord it over the emirate’s skyscrapers, with values in the Dh1,500 a square foot and over range depending on the floor level, etc, according to Robin The, country manager for the UAE at Chesterton International.
As to what this year holds for global skyscrapers and their investors, Roberts said: “In London there is renewed confidence thanks to better than expected economic growth and rising rents in the office market and I suspect London could overtake Singapore.
“Given the economic uncertainty in emerging markets, in 2014 we will probably see some of the Asian cities slide down the table, and more western cities on the rise.”



Article source: http://bit.ly/1hf7Dt1

Global Property Investment Volumes to Hit $1.3 Trillion in 2014!

The global property investment market delivered  $1.2 trillion of transactions in  2013, a 22.6 percent increase from 2012 and the highest total since 2007, according to Cushman & Wakefield’s latest International Investment Atlas report.
Global real estate investment owes this rebirth to market activity and values picking up in 2013 as recessions came to an end and business sentiment resurged, ergo increased liquidity affected most global markets.
Now looking ahead into 2014, the commercial real estate services firm is forecasting a 13 percent increase in investment globally to $1.3 trillion, with the United States and Western Europe seen as the major drivers of the increase in activity.
 “The uplift will be driven by an even stronger weight of capital but critical to the growth is a modest increase in supply from profit taking, the start of new development, a move up the risk curve and notably in Europe, as distressed assets are sold be restructuring banks,” David Hutchings, head of  EMEA investment strategy, and the lead analyst on the C&W report, told Commercial Property Executive. “The increased demand meanwhile stems from rising pension and institutional allocations as well as individual demand for a real asset, which offers a relative real yield but an ability to see that grow over time as economies recover.”

In the report, Hutchings added that core markets continue to be in high demand, but a search for stock, for yield and for performance has rapidly led investors to look further afield, in such emerging markets as Asia and second-tier U.S. cities along with Southern Europe, promoting a deeper recovery this year. He concluded that if investors can see past the politics, the U.S. market  must be strongly placed to outperform in 2014. All fundamentals point to good growth and the U.S. market will be increasingly a target for international capital.

Read the full report here: http://bit.ly/1g5nfTw
Article source: http://bit.ly/1fU9ebe

Thursday, March 13, 2014

UAE investors in Dubai realty surpasses those from 7 other nations combined in 2013

According to a recent official report, transactions by UAE investors in Dubai real estate in 2013 surpassed the combined transactions made by seven major foreign investing countries including Pakistan, China, Iran, US, Canada, France and Germany.

A total of 5,424 UAE investors accounted for a total investment of Dh24,727 billion, while the total transactions from seven overseas counties amounted to Dh23,157bn, split among the following countries: Pakistan (Dh8,635bn), China (Dh1,345bn), Iran (Dh5,529bn), USA (Dh2,194bn), Canada (Dh2,934bn), France (Dh1,397bn) and Germany (Dh1,123bn).




Article source: http://bit.ly/1gscaqz
Pic courtesy of: www.mid-east.info

Wednesday, March 12, 2014

Law No 26 of 2007 issued to regulate eviction of tenants

Articles 25 (2) and 26 of Dubai Law No 26 of 2007 which regulate the relationship between landlords and tenants in the emirate of Dubai state that landlords may demand eviction of tenants prior to expiry of tenancy period in the following cases:
a. If development requirements in the emirate requires demolition and reconstruction of the property in accordance with government authorities’ instructions.
b. If the property requires renovation or comprehensive maintenance which cannot be executed while tenant occupies the property, provided that a technical report attested by Dubai Municipality is submitted to this effect.
c. If landlord wishes to demolish the property for reconstruction or to add new constructions that prevent tenant from benefiting from the leased property, provided that necessary licenses are obtained.
d. If landlord wishes to recover the property for use by him personally or by his children.

 Article (26): If, upon expiry of the tenancy period, the landlord demands recovery of the property for his own use, or use by his children, and the committee approves the same, then the landlord shall not rent the property to others before one year from date of recovery of the property, otherwise the tenant shall have the right to request the committee to order proper compensation to him.

Article source: http://bit.ly/1iA8Nop

Wednesday, March 5, 2014

What can $1 million buy in the property market in Dubai and elsewhere?

Dubai’s prime luxury property market continues to remain affordable in comparison to key global cities despite prices rising by 17 per cent in 2013, Knight Frank’s Wealth Report 2014 reveals.


The UK-based real estate consultancy states that in Dubai one can buy 146 square metres of prime property for US1 million (Dh3.67 million) compared to only 15 square metres in Monaco, 20.6 square metres in Hong Kong, 32.6 square metres in Singapore and 25.2 square metres in London. 



For US$1 million, one can buy 41.2 square metres in Sydney, 41.7 square metres in Paris, 43 square metres in Moscow, 46.2 square metres in Shanghai and 95.7 square metres in Mumbai.
 
Among the 20 cities surveyed, Dubai is placed 19th on the list with Cape Town taking the last slot; US $1 million can buy 215.1 square metres there.

In terms of price growth tracked by Knight Frank, Dubai was placed seventh among the list of 10 global cities surveyed. Abu Dhabi took the eighth slot on the list.



As indicted above, Dubai saw a 17 per cent price increase, while Abu Dhabi registered a 15 per cent rise in 2013. The two emirates were the only ones from the Middle East to find place in the list of top 10 real estate markets.
 Jakarta was placed first with a price increase of 37.7 per cent followed by Auckland 28.8 per cent and Bali, placed third, with a price rise of 22 per cent in 2013. The consultancy pointed out that average property prices in Dubai were still below the pre-crisis highs, indicating there were no fears of bubble emerging.

Article source: http://bit.ly/1kxt4uQ


Monday, March 3, 2014

Business Bay Making a Comeback

Business Bay can be considered as one of the areas in Dubai that was hit hard by the global financial crisis. It was born in 2003 and was envisioned to be the central business district of the Middle East similar to Canary Ward in London Docklands.

Walking alongside the Dubai Mall you will be faced with piles of sand , half finished structures and concrete skeletons which is what the crisis has left behind. However, the recovery in the Dubai real estate market and a new wave of optimism hitting the city, things appear to be finally looking up for Business Bay. And as it regenerates, the area is altering its identity – with the emphasis shifting from office towers, giving greater weight to residential and leisure, rather like Downtown Dubai.

The 0-14 Tower, or Swiss Cheese Tower; the world’s tallest hotel, JW Marriott Marquis; and Blue Bay Tower albeit  looming over empty plots of sand and construction sites are now complete. Work continues at Damac’s 22-storey Bay’s Edge tower, what will be a huge gold-coloured, D-shaped block of 220 furnished apartments. Bay’s Edge is just one of five stalled office projects in Business Bay that Damac is in the process of converting into serviced apartments, some of which had already started construction.

Work has also  restarted at Omniyat’s The Pad development, a 24-storey reclining block designed to look like a classic early 2000s media player. When they were initially launched, both projects were described by their developers as being in Business Bay. However, when they were launched the second time they were marketed as being in Downtown or the Burj Area.


Article source: http://bit.ly/1fkJ1SR