Dubai launches new Dh5 billion business district

Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE and Ruler of Dubai, looks at a scale model of the Dh5 billion (SR5.1 billion) Emirates Towers Business Park project. (WAM)
Updated 05 July 2017
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Dubai launches new Dh5 billion business district

DUBAI: Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE and Ruler of Dubai, on Tuesday launched plans for the Dh5 billion (SR5.1 billion) Emirates Towers Business Park project.
Construction will start by the end of 2017 and upon its completion in four years the project will become an integrated business district within the Dubai International Financial Center (DIFC), a statement from the Government of Dubai’s Media Office said.
Dubai Holding will develop the project in partnership with the DIFC.
“Emirates Towers Business Park will meet the increasing demand for Grade A office space through hi- and low-rise office towers catering to a range of requirements” the statement added.
The development, located between Sheikh Zayed Road and Happiness Street close to DIFC, will have three five-star hotels, retail spaces for international brands, food and beverage locations, corporate facilities as well as 13,000 new parking spaces.
It will also have public parks, green spaces and two covered pedestrian bridges that link directly to the DIFC.
Abdulla Al Habbai, chairman of Dubai Holding, said: “This new development reflects the wise and ambitious vision of our leadership and is in line with Dubai’s strategy of developing futuristic projects to meet the growing demand for integrated business districts and advanced legal infrastructure built on international standards of governance and transparency.
“Emirates Towers Business Park demonstrates Dubai Holding’s commitment to the economic diversification of Dubai and strengthening its attractiveness as a preferred destination for regional and international corporates looking to leverage the wealth of opportunities for growth and expansion.”
Essa Kazim, governor of Dubai International Financial Center, added: “DIFC continues to deliver on its ambitious plans to support the growth strategy of Dubai and the ongoing economic development of the UAE.
“Our collaboration with Dubai Holding is a perfect example of this strategy in action. By extending DIFC’s jurisdiction, the member companies of Emirates Towers Business Park will benefit from the Center’s robust legal and regulatory framework as well as its world-class infrastructure that supports business growth throughout the MEASA region.”


Dubai real estate market recovery to be seen as of 2022: S&P

Updated 20 February 2019
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Dubai real estate market recovery to be seen as of 2022: S&P

  • The outlook on property was part of a challenging assessment of the credit-worthiness of the emirate
  • S&P was generally comfortable with the credit ratings of the emirate’s banking system

DUBAI: S&P Global, the ratings agency, painted a grim picture for the real estate sector in Dubai, with a meaningful recovery in property prices expected only after 2022.
At a presentation to journalists in the Dubai International Financial Center, S&P analyst Sapna Jagtiani said that under the firm’s “base case scenario,” the Dubai real estate market would fall by between 5 and 10 percent this year, roughly the same as the fall in 2018, which would bring property prices to the levels seen at the bottom of the last cycle in 2010, in the aftermath of the global financial crisis.
“On the real estate side we continue to have a very grim view of the market. While we expect prices to broadly stabilize in 2020, we don’t see a meaningful recovery in 2021. Relative to the previous recovery cycle, we believe it will take longer time for prices to display a meaningful recovery,” she said.
S&P’s verdict adds to several recent pessimistic assessments of the Dubai real estate market. Jagtiani said that conditions in the other big UAE property market, in Abu Dhabi, were not as negative, because “Abu Dhabi never did ramp up as much in 2014 and 2015 as Dubai.” S&P does not rate developers in the capital.
She added that a “stress scenario” could arise if government and royal family related developers — such as Emaar Properties, Meraas, Dubai Properties and Nakheel — which have attractive land banks and economies of scale, continue to launch new developments.
“In such a scenario, we think residential real estate prices could decline by 10-15 percent in 2019 and a further 5-10 percent in 2020. In this case, we expect no upside for Dubai residential real estate prices in 2021, as we expect it will take a while for the market to absorb oversupply,” she said.
S&P recently downgraded Damac, one of the biggest Dubai-based developers, to BB- rating, on weak market prospects.
However, Jagtiani said that, despite the “significant oversupply” from existing projects, several factors should held stabilize the market: Few, if any, major product launches; improved affordability and “bargain hunting” by bulk buyers; and a resurgence of Asian, especially Chinese, investor interest in the market.
Jagtiani also said that government measures such as new ownership and visa regulations and reduction in government fees could help prevent prices falling more sharply, as well as “increased economic activity related to Dubai Expo 2020, which is expected to attract about 25 million visitors to the emirate.”
The outlook on property was part of a challenging assessment of the credit-worthiness of the emirate. “In our view, credit conditions deteriorated in Dubai in 2018, reducing the government’s ability to provide extraordinary financial support to its government related entities (GREs) if needed,” S&P said in a report. “The negative outlook on Dubai Electricity and Water
Authority (DEWA) partly reflects our concern that a real estate downturn beyond our base case could out increased pressure on government finances,” the report said.
It pointed out that about 70 percent of government revenues come from non-tax sources, including land transfer and mortgage registration fees, as well as charges for housing and municipality liabilities, as well as dividends from real estate developers it controls, like Emaar and Nakheel.
S&P was generally comfortable with the credit ratings of the emirate’s banking system, which has an estimated 20 percent exposure to real estate. “Banks in the UAE tend to generally display a good level of profitability and capitalization, giving them a good margin to absorb a moderate increase in risks,” the report said.