Dubai real estate recovery could take 12-24 months: DAMAC chairman

Dubai real estate recovery could take 12-24 months: DAMAC chairman
The Dubai real estate market could take up to 24 months to fully recover from the impact of the coronavirus pandemic, the chairman of Dubai’s DAMAC Properties said. (File/AFP)
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Updated 14 February 2021

Dubai real estate recovery could take 12-24 months: DAMAC chairman

Dubai real estate recovery could take 12-24 months: DAMAC chairman
  • “2020 was a very tough year for all the property developers in the UAE and DAMAC felt the negative impact just the same,” Sajwani said
  • “I anticipate it will take at least 12 to 24 months to see a substantial recovery,” he said

DUBAI: The Dubai real estate market could take up to 24 months to fully recover from the impact of the coronavirus pandemic, the chairman of Dubai’s DAMAC Properties said as the company announced a loss of AED1.039 billion ($282.91 million) for 2020.
“2020 was a very tough year for all the property developers in the UAE and DAMAC felt the negative impact just the same,” Hussain Sajwani said in a statement on Sunday to the Dubai Financial Market (DFM).
“However, I anticipate it will take at least 12 to 24 months to see a substantial recovery. We must remain patient and adopt smart and innovative solutions going forward,” he said.
The developer reported revenue for 2020 of AED4.7 billion, down from AED4.4 billion in 2019. At the same time, total real estate sales were down 25.8 percent to AED2.3 billion, compared to AED3.1 billion in 2019. As a result, the company recorded a net loss of AED1.039 billion, compared to a loss of AED37 million in 2019.
The company, which has partnered with former US President Donald Trump’s Trump Organization on a series of Trump-branded golf courses, saw its total assets decline from AED23.8 billion in 2019 to AED21.1 billion last year.
Throughout 2020, DAMAC delivered 2,945 units, compared to 4,700 in 2019.
“With COVID-19 still prevailing across the world, tourism has dramatically fallen, which has been a critical force that drives Dubai’s economy and boosts its property market,” Sajwani said.
Despite the DAMAC chairman’s prediction, figures from online platform Property Finder showed the Dubai real estate sector got off to a positive footing in January.
Last month, the platform reported 3,300 transactions worth AED 6.74 billion, a 15.5 percent increase in terms of volume and 37 percent increase in value, compared with January 2020.


California theme parks, stadiums to reopen soon

California theme parks, stadiums to reopen soon
Updated 07 March 2021

California theme parks, stadiums to reopen soon

California theme parks, stadiums to reopen soon
  • Parks initially will be open only to state residents amid safety precautions

LOS ANGELES: California health officials on Friday gave Walt Disney Co.’s Disneyland and other theme parks the go-ahead to reopen at limited capacity from April 1, after a closure of almost a year due to the coronavirus disease (COVID-19) pandemic.

Capacity will be limited to between 15 percent and 35 percent, the California Department of Health said in an update. Masks and other safety measures will be required and the parks initially will be open only to state residents.

Outdoor stadiums and ball parks will also be allowed to reopen at reduced capacity, starting April 1.

Ken Potrock, president of the Disneyland Resort, said in a statement that the decision meant “getting thousands of people back to work and greatly helping neighboring businesses and our entire community.”

“With responsible Disney safety protocols already implemented around the world, we can’t wait to welcome our guests back,” Potrock said.

He did not give a date for the reopening of Disneyland in the southern California city of Anaheim.

Disney shares were trading at $195.10 after hours, after closing at $189.99.

Disney in September said it was furloughing some 28,000 workers, mostly across its US theme parks in California and Florida. Walt Disney World in Florida reopened in July last year, with limited capacity.

Friday’s announcement follows a decline in coronavirus disease (COVID-19) cases in California and the rollout of vaccines. A parking lot at Disneyland is currently being used as a mass vaccination site.

Theme parks like Disneyland, Universal Studios, Legoland and Knott’s Berry Farm protested strongly last October when California health officials ruled out any quick reopening of their attractions.

The California Attractions and Parks Association called Friday’s announcement “encouraging news.”

“Parks now have a framework to safely and responsibly reopen ... putting people safely back to work and reinvigorating local economies,” the association said in a statement.


US economy likely to grow between 5-6% in 2021

US economy likely to grow between 5-6% in 2021
Updated 07 March 2021

US economy likely to grow between 5-6% in 2021

US economy likely to grow between 5-6% in 2021
  • The US economy could grow between 5 percent and 6 percent this year

ATLANTA: The US economy could grow between 5 percent and 6 percent this year, Atlanta Fed President Raphael Bostic said on Friday.

He said the economy is still under “considerable distress” and the Federal Reserve will continue to provide support until the labor market is stronger and average inflation is on track to meet the US central bank’s long-term target.

“We’re ready and able … to support the recovery as long and as strongly as necessary,” Bostic said during a virtual event organized by Stanford University.

The US economy could grow between 5 percent and 6 percent this year, Bostic said. But he cautioned that the labor market could face structural changes as a result of the pandemic that may require some laid-off service-sector workers to train for jobs in new industries.

A decline in business travel and increased use of automation could mean that some of the jobs lost during the pandemic will not return, Bostic said.

“We need to do all we can to minimize the long-term damage from the pandemic crisis and to make sure that the recovery is as broad-based and as inclusive
as possible.”

Asked if he thought the Fed needs to take action to respond to rising bond yields, which could be a sign that investors are raising their inflation expectations, Bostic said high inflation is not a concern right now.

“Inflation has not been a real stress point in terms of the economic performance for quite a long time,” Bostic said, adding that the Fed will continue to monitor for signs of stronger price growth.


How can Saudi firms move on from COVID-19 survival mode?

How can Saudi firms move on from COVID-19 survival mode?
Updated 06 March 2021

How can Saudi firms move on from COVID-19 survival mode?

How can Saudi firms move on from COVID-19 survival mode?
  • Alvarez and Marsal has been advising companies in the Kingdom on how best to pivot out of the tough times

JEDDAH: Alvarez and Marsal (A&M) is a New York-headquartered global professional services firm known in the industry as “the turnaround guys.” Legend has it that co-founder Bryan Marsal was one of the first people called when Lehman Brothers looked set to become the first major casualty of the global financial crisis in 2008.

A&M was founded in 1983 and now has representatives in 25 countries, including Dubai, from where it is now attempting to help Middle Eastern clients restructure their businesses after the challenges of 2020. As demand for its services grows, the company is aiming to increase its staff in the Middle East to 150 over the next five years, from 10 in 2015.

According to Paul Gilbert, head of A&M’s Turnaround and Restructuring practice in the Middle East, two of the most important steps management can take to overcome crises are to take total control over cash flow and to put in place a 12-month contingency plan to help the business stay afloat. Gilbert is currently working on the restructuring of Abu Dhabi’s NMC Health and has previously advised on rescue proceedings for South African Airways.

“Continue with cash preservation and cost control. Talk to your suppliers and landlords — those guys are suffering too, but they still want your business to come out of the other end,” Gilbert told Arab News. “These guys want to talk to you because they want to know that you’re going to be around at the end of it to help them rebuild their own businesses.”

According to Dr. Saeeda Jaffar, managing director and head of the Middle East at A&M, the pandemic has impacted companies in three major ways. There were companies that understood what was going on immediately and took “advantage of discontinuity” to find ways to succeed. Those companies already had a digital business model that supported their shift to digital, or had reacted nimbly to acquire a digital solution, so the transition was not as drastic as it has been for others.

The second group went into what Jaffar calls “hibernation mode,” by opting to minimize losses by decreasing costs, conserving cash, restricting loans and balances and generally steering away from bold decisions until the uncertainty passes.

The companies in the third group, Jaffar said, had weak business models and were unattractive to investors, so were bound to face difficulties.

One of the sectors that has suffered most has been retailers, according to Gilbert. “We’ve helped them across Europe with negotiations with landlords, with other creditors and helped them pivot from bricks-and-mortar stores to digital, and concentrated on helping them retain their customer base for when they come out,” he said. “Many of them are coming out of that period with a balance sheet that is either extremely stretched or has been restructured in a way that a number of lenders have now had to take equity back.”

Other sectors, including travel, tourism, aviation and real estate, have suffered tremendous losses during the pandemic as well.

In Saudi Arabia, Jaffar said that domestic tourism numbers exceeded expectations at the end of 2020.

“I think that’s a trend that will continue. That’s very much in line with the Vision 2030. We continuously see that there is a lot of development happening in the Kingdom, new resorts, new places, new developments that help continue to grow the tourism sector,” she said.

Jaffar believes it will take longer for aviation to recover than many industries, perhaps three to four years, she said.

On the other hand, technology — which Jaffar said has been the “backbone” for many other sectors — and healthcare — which has witnessed considerable investment in pharma consumables — have both prospered during the pandemic, a trend that Jaffar expects to continue in the near future.

Both A&M consultants suggest that as companies emerge from the pandemic, many will be looking at potential consolidation. Therefore, they said, mergers and acquisition activity will see a spike in 2021.

“There are a lot of strategic investors from the region that have learned over the last few cycles that investing now, when the valuations are more affordable, is probably a good time in terms of financial attractiveness,” said Jaffar.


Saudi Arabia reforms for women boost economic growth

Saudi Arabia reforms for women boost economic growth
Issam Abousleiman, World Bank regional director of the GCC countries. (Supplied)
Updated 06 March 2021

Saudi Arabia reforms for women boost economic growth

Saudi Arabia reforms for women boost economic growth
  • Abousleiman said the Kingdom is well on its way to achieving its goals and that new reforms usually take between 3-5 years to have a full impact

JEDDAH: Saudi Arabia has implemented a number of ambitious reforms to enhance women’s economic inclusion, which has resulted in women gaining more access to education and employment options.
According to a Global Entrepreneurship Monitor report in 2020, the highest rates of women’s entrepreneurial intentions were reported in the Middle East and North Africa region at 36.6 percent as Saudi female entrepreneurs were responsible for driving this trend.
Issam Abousleiman, the World Bank regional director of the GCC countries, told Arab News that women have played a fundamental role in boosting economic growth in the Kingdom.
“Saudi Arabia has made a lot of reforms related to the business environment, along with those laws that are measured by the Women, Business and the Law (WBL) index that we have,” he said, adding that these laws have increased the number of women entrepreneurs in the Kingdom.
Abousleiman said the number of Saudi women entrepreneurs increased by 50 percent between 2018 and 2019, particularly in the consumer service sector.
The World Bank’s annual WBL report also stated that Saudi Arabia made significant progress, scoring 80 out of 100.
Reforms in the Kingdom have provided funding to projects and initiatives, which have created opportunities for women in government and the private sector. These reforms have played an integral part in creating safe work environments to foster growth and innovation.
“These new businesses are generating new jobs and providing livelihoods for many in Saudi Arabia,” Abousleiman said.

Reforms usually take time to get to that potential. With patience, perseverance and staying on course, these reforms will benefit society and the economy over time.

Issam Abousleiman, World Bank regional director of the GCC countries

“They are giving women a platform for entrepreneurship, leadership and self-realization that we have not seen in the past. They are also helping drive diversification in the Saudi economy.”
Abousleiman said the Kingdom is well on its way to achieving its goals and that new reforms usually take between 3-5 years to have a full impact. According to Saudi employment figures, women have outpaced men over the past few quarters, which is “well above the target set by Saudi Arabia’s 2030 Vision.”
He added that the Saudi government’s gender-neutral policies have encouraged more women to participate in economic activities with various strategies and action plans. Employment policies, cash benefits for the most vulnerable, support for the disabled, and pensions are among the programs that have benefited most from more female inclusion.
“Women’s participation in the labor force in Saudi Arabia started with very low numbers,” Abousleiman said. “If we go back to 2017, women’s participation in the labor force was at 15 percent. By the end of 2020, we estimate that it has gone up to almost 31 percent.”
He added that the new strategies and plans implemented have targeted some of the most vulnerable members of society and provided more productivity within the system.
“Reforms usually take time to get to that potential,” Abousleiman said. “With patience, perseverance and staying on course, these reforms will benefit society and the economy over time.”


Malaysia’s AirAsia Group plans air taxi, drone delivery service

Malaysia’s AirAsia Group plans air taxi, drone delivery service
Updated 06 March 2021

Malaysia’s AirAsia Group plans air taxi, drone delivery service

Malaysia’s AirAsia Group plans air taxi, drone delivery service
  • The service is likely to start operations in about 18 months

KUALA LUMPUR: Malaysia’s AirAsia Group Bhd plans to launch an air taxi service and the country’s first drone delivery service as the budget carrier seeks to diversify amid the coronavirus disease (COVID-19) pandemic, the company’s CEO said on Saturday.

As part of the group’s diversification push, it also aims to launch a ride-hailing service next month as COVID-19 continues to hit air travel.

“The air taxi will have a pilot and four seats. At the moment, we have our team working on this upcoming service by AirAsia,” Chief Executive Tony Fernandes said at the Youth Economic Forum 2021, state news agency Bernama reported on Saturday.

The service should start operating in about 18 months, Fernandes was quoted as saying.

He also announced that the airline’s logistics unit Teleport, which is currently testing an urban drone delivery service with state-backed firm Malaysian Global Innovation and Creativity Centre (MaGIC), would conduct its first commercial delivery by the end of this year.

“(The) idea was brought up three weeks ago and now it’s reality,” he wrote on Instagram.

Fernandes said the group was recovering from the impact of the pandemic and had used the opportunity to accelerate its digital transformation, Bernama reported.

The struggling airline, which reported a fifth straight quarterly loss in November, has been seeking to raise 2.5 billion ringgit ($613.95 million) from loans and investors.

Last month, it said its 33 percent owned Japanese unit, which ceased operations last October, had begun bankruptcy proceedings.