Dubai's residential property prices likely to recover by 2011, says Memon Investments

Dubai's residential property prices likely to recover by 2011, says Memon Investments

Developer boasts of portfolio consisting of high profile residential development projects valued at AED 1.34 billion

January 18, 2011

Residential property prices in Dubai are likely to recover by 2011 as the market witnesses continued signs of improved lending from 2009, which is expected to continue until 2011, said Memon Investments, a leading Dubai-based property developer and part of the multibillion dollar international business conglomerate, the Shaikhani Group. Strategically positioned to leverage the healthy market prices the developer is expediting construction on its on-going residential projects, which consist of luxury buildings collectively valued at AED 1.34 billion.

Encouraged by the relatively lower costs of construction, the developer further reiterated its commitment to ensure timely delivery of its residential developments, which include the ‘Frankfurt Sports Tower’ and the ‘Champions Tower’ series. As more banks inject liquidity into the mortgage market, Memon Investments is confident that its projects, which are located in several high profile master developments, is providing buyers a wide range of investment options that offers excellent return potential. Furthermore, the developer also revealed that it has already awarded important contracts to some of the UAE’s top contractors and MEP companies.

“Amidst reports that a major percentage of 100 off-plan projects in Dubai that were put on hold are now picking up where they left off, we are focusing on gaining an advantageous position as consumer confidence continues to grow,” said Ahmed Shaikhani, Managing Director, Memon Investments. “We continue to capitalise on our strategic partnerships and the uniqueness of our projects, as we work towards the prompt completion of our existing projects and the realisation of our vision of growth as one of the major developers in the region.”

Memon Investments announced that it has passed more than the halfway mark on the construction of two of its prime residential developments in ‘Dubai Sports City’ - ‘Champions Tower II’ (CT II) and ‘Champions Tower III’ (CT III). The developer also revealed the completion of the superstructure of the AED 80 million ‘Cambridge Business Centre’ (CBC) in Dubai Silicon Oasis, keeping the construction on track to be completed by the second quarter of 2011.

“Our strategy revolves around managing the construction progress in our projects and building-up the confidence of customers and investors. This, in addition to the improving situation in the UAE residential property market, is giving us the necessary leverage to maintain our robust operations in United Arab Emirates, and we are confident that the entire market is poised for an upward trend in the near future,” concluded Shaikhani.

About Memon Investments LLC
Founded as the property development arm of the international business conglomerate, the Memon Group of Companies, Memon Investments has grown to become a leading property player in the region offering a diversified portfolio of premium property projects. Guided by a tradition of excellence, the developer’s intense focus lies within its core competencies, specifically acquisition, design and development, consultancy, leasing and management of properties. Leveraging the Memon Group’s extensive real estate development experience, Memon Investments’ UAE portfolio comprises of prestigious residential projects including ‘Champions Towers I, II, III, and IV’ and ‘Frankfurt Sports Tower I’ in Dubai Sports City; ‘Gardenia I & II’ in Jumeirah Village, and its inaugural commercial venture - ‘Cambridge Business Centre’ in Dubai Silicon Oasis, all of which embody the developer’s trademark top-notch quality and uniqueness.

Having delivered over 30,000 units across the globe with a presence in 90 countries spread across Asia, Africa, Middle East and Europe, the Memon Group of Companies is presently commemorating its 30th year of delivering unique offerings and services to its global customers. In addition to its extensive expertise in the real estate market, the Group has also built a strong reputation for its unwavering support for various causes such as poverty alleviation, environmental conservation and academic development. As a socially-aware international corporation, the Group has devoted 19 years in support of the Rabia Charitable Foundation and the Rabia Relief Fund.

Asteco Dubai Q4 Report 2010

Asteco Dubai Q4 Report 2010.pdf

Dubai tenants in ‘flight to quality’

Dubai tenants in ‘flight to quality’

Increased supply of high quality stock at affordable rates moves tenants – apartment rents record lowest Q-on-Q fall in 2010 indicating signs of stability says Asteco Q4 2010 report

According to the latest report by leading Dubai-based property management company Asteco, an increased supply of high quality, affordable accommodation, particularly in the apartment sector provided the catalyst for considerable tenant movement across Dubai in Q4 2010. In addition apartment rental rates declined by just 3% during the same period, the lowest quarter-on-quarter fall during the year, an indication that the market is showing signs of stabilisation.

“The real estate market is characterised by a large supply of high quality stock at affordable rates, leading to a flight-to-quality trend currently seen across Dubai. Apartment rates have dropped 17% on average during 2010 and this has brought a number of upscale developments within the reach of mid-income budgets,” commented Elaine Jones, CEO, Asteco Property Management.

Indeed although apartment rental rates fell last year, it was still less than the 24% rents fell in 2009, further indication that market prices are stabilising. According to the report, International City has seen the largest drop due to tenants migrating to better quality developments in more desirable locations. Overall studios experienced the lowest decline and one-bedroom apartments suffered the largest fall.

“Rents are expected to continue their downward trend in 2011, albeit at a lower rate as more supply enters the market, providing prospective tenants with even greater choice,” added Jones.

Villa rental rates fared better than apartments in Q4 2010, falling by just 1% over the three month period, primarily due to the limited availability in central areas. Quality communities such as Palm Jumeirah and Jumeirah Islands performed better than more mature developments such as The Springs and The Meadows.

Unsurprisingly, office rental rates fell by 8% in Q4 2010. DIFC set the tone by reducing their rates per square foot from AED370 in the first quarter of 2010 to AED230 in Q4 (a fall of 22%) in an attempt to compete more favourably with quality developments on Sheikh Zayed Road such as Rolex Tower and Sama Tower.

Continued delivery of new stock in JLT and Tecom sent rents down by 20% and 12% respectively. Although transaction activity has picked up due to the improving economy, continued oversupply will no doubt put further downward pressure on rental rates. In contrast office sales prices only declined by 6% in Q4 and just 8% during the whole of 2010, predominantly due to weak transaction activity. Prices will remain subdued due to a lack of investor confidence.

Apartment sales prices slipped by only 2% on average suggesting a slowdown in the rate of decline. Continuous delivery has seen average sales prices in Dubai drop by AED100 to AED850 over the past year, while prices in International City and Discovery Gardens have fallen to AED350 and AED450 per square foot respectively. Sales prices on Palm Jumeirah were flat in Q4 but still command one of the highest prices at around AED1,500 per square foot.

Villa sales prices in Q4 meanwhile were relatively stable with only the Springs experiencing a 4% fall. Overall market prices fell just 8% in 2010, with downward pressure more predominant in developments with a large inventory, such as The Springs and the Arabian Ranches. Market demand continues for smaller units, driven by affordability.

For more details, please visit www.asteco.com

About Asteco
Asteco, a major regional and international real estate services firm and the largest property services company in the United Arab Emirates, was founded in Dubai in 1985. Asteco offers independent market analysis, design development consultancy and valuation services, sales and leasing services, as well as asset and property management services.