Dubai’s real estate slump to last until 2020 — S&P

People watch the sunset in Dubai, where years of rampant development have put downward pressure on prices. (Reuters)
Updated 20 February 2018
0

Dubai’s real estate slump to last until 2020 — S&P

DUBAI: Property prices in Dubai could decline by 10 to 15 percent over the next two years, hit by new supply, geopolitical risks and the introduction of value added-tax in the UAE, S&P Global Ratings’ analysts said on Tuesday.
The grim prediction came after Dubai residential prices fell by 5 to 10 percent in 2017, and the weak property market has also begun to hurt earnings of the emirate’s top property developers.
“We believe this correction will continue at least for this year and next, before prices stabilize in 2020 at the earliest,” said Sapna Jagtiani, S&P’s credit analyst for corporate and real estate ratings.
Rents in both residential and retail markets will also remain under pressure, and hotels will be forced to accept lower average daily room rates to maintain occupancy levels, S&P said.
Property prices are down 16-19 percent from their peaks of over three years ago, National Bank of Kuwait said in a report this month.
Jagtiani told reporters that Dubai’s Expo 2020 could benefit the property market due to the potential increase in economic activity on the back of the expected arrival of 25 million visitors and new residents.
However, she cautioned the property sector ran the risk of “overbuild,” the effects of which would be felt beyond 2020.
Property consultancy Jones Lang LaSalle’s 2017 report suggested the planned residential supply in Dubai would grow by 9 percent in 2018 and 7 percent in 2019.
Emaar Properties reported a 16 percent slide in fourth-quarter net profit on Feb. 14, as costs weighted on Dubai’s largest listed developer.
It followed results from fellow developer DAMAC Properties that showed a nearly 47 percent plunge in net profit for the quarter.
Jagtiani said geopolitical risks, such as the standoff between Qatar and some of its powerful Gulf neighbors, would weigh on sentiment, even though Qatari investors were not among the top 10 property investors in Dubai.
Jagtiani said the real estate downturn would not be as severe as that experienced in 2009 due to prudence among lenders and tighter regulation of the property market.
House prices in Dubai in 2009-2010 plunged more than 50 percent from their peaks, pushing Dubai close to a debt default.


Huawei warns US patent curbs would hurt global tech

Updated 27 June 2019
0

Huawei warns US patent curbs would hurt global tech

  • US senator’s proposal comes amid mounting American action against Huawei
  • Huawei’s US sales of network gear evaporated after a congressional panel labeled the company a security threat in 2012

SHENZHEN, China: Chinese tech giant Huawei warned Thursday a US senator’s proposal to block the company from pursuing damages in patent courts would be a “catastrophe for global innovation.”
The proposal comes amid mounting US action against Huawei, the biggest maker of switching gear for phone carriers, amid tension over Beijing’s technology ambitions. The company has been devastated by the Trump administration’s decision to impose restrictions on its access to American chips for smartphones and other components and technology.
Disrupting Huawei’s access to US patent courts would threaten the intellectual property system that supports technology development, said Song Liping, the company’s chief legal officer.
The proposal by Sen. Marco Rubio, a Republican from Florida, followed reports Huawei Technologies Ltd. is asking for $1 billion from American phone carrier Verizon for use of the Chinese company’s patents.
“If such a legislative proposal were to be passed, it would be a catastrophe for global innovation. It would have terrible consequences,” Song said at a news conference. He said it would “break the foundation of IP protection.”
American officials accuse Huawei of facilitating Chinese spying, a charge the company denies, and see it as a growing competitive threat to US technology industries.
Huawei’s founder, Ren Zhengfei, said this month it has cut its project sales by $30 billion over the next two years due to curbs on access to American chips and other components. He said smartphone sales outside China will fall 40 percent.
Huawei’s US sales of network gear evaporated after a congressional panel labeled the company a security threat in 2012 and told phone carriers to avoid it. But the Chinese company has a patent portfolio it licenses to manufacturers and carriers.
Song gave no confirmation of how much Huawei wants from Verizon or the basis of its claims.
“Intellectual property litigations are matters that should be heard and ruled on by courts. They should not be politicized,” he said.
Huawei, founded in 1986, has China’s biggest corporate research and development budget at $15 billion in 2018. The company is a leader in developing next-generation telecoms technology.
On Wednesday, a US federal court jury in Texas ruled Huawei stole trade secrets from a Silicon Valley company but awarded no damages, saying the Chinese company didn’t benefit.
The jury rejected Huawei’s claims that Cnex Labs Inc. co-founder Yiren Huang stole its technology while he worked at a Huawei subsidiary.
Huawei’s head of intellectual property, Jason Ding, said the company was studying the verdict and deciding what to do next.
Asked about a report by Bloomberg News that some Huawei researchers had published papers with Chinese military personnel over the past decade, Song said the company wasn’t aware of its employees publishing research as private individuals.
“We don’t customize products or do research for the military,” said Song. “We are not aware of employees publishing papers. We don’t have projects of that kind.”