GCC Investors show Powerful Stance in the Property Community Across the World

In a survey by global market research company YouGov, the UAE and Dubai real estate property sector’s position is stronger than ever. The survey showed that 60% of investors are expecting the dubai’s real estate market to become even more vibrant in the next 12 months.

The same survey also indicated that half of home buyers (54%) are eager with regards to the Dubai real estate industry’s growth, or three-fifths (58%) thinks that there will be an increase in sales and rental prices over the next year. These numbers indicate towards a buoyancy in the UAE and Dubai real estate market.

These numbers emerge as an anticipation to an influx of thousands of real estate property investors for the Cityscape Global, one of Middle East’s largest real estate property event.  The event will be held in Dubai World Trade Centre from 8 – 10 September, where over a hundred local developers will participate in the 14th edition of the event to showcase their latest projects.

YouGov’s survey reveals just how location is an important factor for investors in choosing real estate properties to purchase in the Emirates. With a sample size of 861 UAE residents, the survey showed that the most attractive and in-demand real estate are the ones near public transportation (56%), the ones close to grocery stores (44%), shopping malls (41%), and then Mosques (37%).

Mounted specifically for Informa, the organizers of Cityscape Global, the study went on to reveal that studios and one-bedroom apartments are becoming the most preferred type when choosing what property to buy. This lead investors into diversifying their developments to offer smaller, more affordable residential options.

Emirates NBD, together with Abu Dhabi Commercial Bank, First Gulf Bank, Commercial Bank of Dubai and National Bank of Abu Dhabi will offer competitive mortgage rates and professional advice at Cityscape Global.

Lara Al Barazi, YouGov’s Head of Real Estate Research said: “The study highlights positive sentiment across the board. Investors, potential home buyers as well as real estate professionals are expecting growth to continue in the Dubai real estate market in the coming year. The most positive news is the extent of trust investors place in the residential property market, which reveals the high potential this sector has and the importance of understanding what appeals most amongst prospective buyers.”

With more than 300 exhibitors to showcase from around the world, Cityscape Global had to get two additional exhibition halls – 4 more halls since 2013 – beefing up its total exhibition space to 40,00sqm.

Also, this year’s Cityscape Global takes on a new format, where the conference will be staged a day before the exhibition at Conrad Hotel Dubai.

YouGove will exclusively present their findings from a study made with 1,500 UAE Real Estate Market Sentiment, putting its vision at the future or investors, real estate professionals, and potential home buyers at the morning conference.

The new format will now facilitate more than 800 senior real estate professionals and government officials. They will look at more opportunities and find key solutions to challenges that may hamper the industry’s growth.

The Cityscape Awards for Emerging Markets will also run parallel with the exhibition, where the programme will attract hundreds of award entries from developers and architects behind such developments across emerging markets throughout the world. The winners will be declared at an elaborate ceremony at Conrad Hotel on 8 September.

Cityscape Global 2015 returns with support from Dubai Land Department and Foundation Partners: Emaar Properties, Dubai Properties and Nakheel; Gold Sponsors: Arma Properties; Garanti Koza and Al Marjan Island; Silver Sponsor Sobha LLC; District Operator Sponsor: Ejadah Asset Management; Project Marketing Sponsor: Aqua Properties and Property Registration Trustee Partner: Tamleek Property Transfer.

Dubai Properties Will Unveil Lavish “1/JBR” at Cityscape Global 2015

A new luxury tower will be gracing the Jumeirah Beach Residence skyline: The 1/JBR. This new property will offer high end living with unrivalled sea views. Located at the entrance of Jumeirah Beach Residence (JBR), the iconic tower development offers unparalleled luxury and indulgent living with every apartment offering panoramic sea views.

Dubai Properties (DP), leading Dubai real estate master developer and asset manager known for renowned destinations across the Emirate, announced today that it will unveil its new luxurious development, 1/JBR, at Cityscape Global 2015, which will be held 8-10 September 2015, at the Dubai World Trade Centre.

JBR is renowned for its stunning beachfront setting. With a promenade that stretches 1.7 km overlooking the Arabian Gulf, JBR is a hugely popular tourist destination welcoming over 12 million visitors in 2014.

Abdullatif AlMulla, Group CEO of Dubai Properties Group, said: “Dubai Properties is introducing 1/JBR, a unique, urban residence concept, set to become the crème de la crème of high-end residences. It offers the bespoke 5-star luxury amenities Dubai is known for, at one of the most sought after destinations in the country.”

“1/JBR will appeal to discerning local, regional and international investors, who are looking for the highest specification residences in one of the most vibrant destinations in the country. 1/JBR redefines the concept of elegant living.”

1/JBR fuses both contemporary and classic architectural and design features in a modern, understated and elegant manner. 2-to 4-bedroom apartments and 5-bedroom penthouses have exquisitely crafted interiors. All residences within 1/JBR have a unique glass façade and wide sundecks to further amplify the distinctive tower location on the Arabian shores with panoramic sea views. The tower enjoys private access, with no more than three to four residences per elevator lobby, and penthouses on the top two levels. Selected residences include provision upgrades for private pools.

The completion and delivery of this unique project is set for early 2019. Interested buyers are invited to register at Dubai Properties’ stand at Cityscape Global 2015.

What the Law States about Real Estate Brokerage in Dubai

The real estate brokerage process now occupies an important sector, in which major companies with highly specialized technology, connections, and manpower has been in full effect. With an influence ever increasing, real estate brokerage cannot be helped but be put under the limelight in order to be governed by specific laws and regulations, especially with some bad ire directed on them recently.

The has always been a provision under the law that deals with the Dubai real estate brokerage business. Before 2006, real estate brokerage was organized by the provisions of the Federal Commercial Transactions Law No. (8) of 1984 under Brokerage Contract Chapter. Such provisions are still the referenced in cases not stipulated by private law. However, after 2006, the executive regulation No. 85 of 2006 on the organization of real estate brokers register in the Emirate of Dubai was issued to govern Law No. 7 of 2006 regarding real estate registration in the Emirate of Dubai, and organize a special register for licensed real estate brokers.

This move has been put into place to update the previous provision and at the same time keep up with the changing atmosphere of business in Dubai: the freehold.

This regulation has done well in cutting down unwanted non- licensed brokers from conducting any real estate brokering (Article 3 the Executive of Regulation). Therefore, it uplifted such a vital sector, to a point that it received an increased level of confidence from investors.

Below are the most important duties and obligations of the broker (Articles (14 to 25):

I. General obligations of the broker (Supervisory entity: The department of property and land)

• Commitment to the ethics of the profession (Article 14)
• Commitment to the maintenance of a special register of all transactions held by him (Article 15)
• The broker’s commitment to maintain documents related to sales (Article 15)
• The broker’s commitment to submit all information and documents requested from him (Article 16)
• The broker’s commitment, in case of selling on map, to keep a copy thereof (Article 15)
• The broker’s commitment not to mediate in a transaction in contradiction with law or regulations in force in the Emirate of Dubai deal (Article 18)

II: The broker’s commitments towards the parties of the transaction:

• The broker’s commitment to deliver a carbon copy of the sale documents to contract parties when so requested by any (Article 15)
• The broker’s commitment to inform his client of all details of the negotiations, the stages of mediation and any other necessary information (Article 17)
• The broker’s commitment to inform the other party of all material matters relating to the agreement and which are necessary to deny ignorance, and to inform the two parties of all the circumstances he knows and be responsible before them for any fraud or mistake on his side (Article 17) and Article (19)
• The broker shall be liable for any loss or damage incurred by any of the parties as a result of his work through fraud, deception, without taking into account the norms to be followed or violation of the requirements of the code of conduct (Article 22)
• The broker shall not be entitled to claim commission or to be reimbursed the expenses incurred (if he works for the benefit of the other contracting party in violation of its commitments to his representative, or if he accepts from the other party a promise to obtain a benefit, in circumstances in which the rules of good faith and the code of honor prevent accepting such promise) (Article 23) and this article shall be deemed an application a code of honor.
• If he authorized many brokers to be jointly liable for its work, unless permits them to work individually, (Article 24)
• If he authorizes many people to work as one broker in a joint action, so as to be jointly liable for the implementation of this authorization, unless otherwise agreed, (Article 25)
• The broker’s commitment to be honest with regard to any payments, securities or other things given to him by any of the parties to keep or to deliver to one of the parties, and must execute or deliver according to what is agreed upon and the rules of the Secretariat shall apply to the broker with regard to these matters.This article is important as it relates to the provisions, particularly Article 404 of the Penal Code No. 3 of 1987, which reads: ((Anybody who embezzles or squanders funds, bonds or any other movable money, in a way that causes harm to the rightful owner, when it was handed to him as a deposit, lease, mortgage, borrow, use or agency, shall be punished by imprisonment, fine or both.
• The broker’s commitment not to establish himself as a party to the contract made through it (as he may not be an agent) even if authorized by a contract party, and the penalty resulting from the conclusion of the contract itself shall be depriving him of the commission in spite of being authorized by the party directed him to conclude the brokerage contract (Article 20)This article should be read deliberately and should draw the attention of every real estate broker, as it is among the guarantees granted by the Regulation to the investor, it denies the real estate broker’s right to commission when violating his duties, and prevents the broker to conclude a contract as a party to the contract.As the real estate broker in this case shall not be entitled to any commission, and the clear purpose of the text is a confirmation of restriction being adopted by the legislature in commercial transactions Act, which deprived the broker of taxi brokering whilst being a party to the contract in accordance with the provisions of Article (263) of the Federal Commercial Transactions Law.

Broker Wage

Included in the provisions of articles (26 up to 33), which include the provisions determining the rights and wages of real estate broker set out in the Federal Commercial Transactions Law, the most important of which are:

• For the broker to be entitled to his commission the contract should be in writing, registered and indicates the conditions and the contract shall be referred to in the real estate register (Article 26)
• The broker’s wage shall be determined through agreement, otherwise the norms shall be prevailed (Article 27)
• The broker shall not be entitled to his brokerage fees unless it led to the conclusion of a contract between the two parties, such entitlement shall be based on the conclusion of the contract of sale and registration thereof in the department, unless otherwise provided in the agreement. In case the sale contract is suspended on an agreed upon condition, the real estate broker shall only be entitled to the contract when the condition is achieved (Article 28)
• In case the brokerage contract is terminated, the broker may claim his fees in accordance with the agreement, unless fraud or fatal mistake is proved (Article 29)
• If the broker’s instructions or negotiations did not lead to agreement of the parties, he shall not be entitled to any compensation, expenses or costs incurred, unless the Brokerage contract stipulates otherwise (Article 30)
• If more than one broker is involved in mediation or negotiation for one party, they all share as if one broker and payment shall be divided in accordance with the terms of the contract (Article 31)
• If a party contracted with many brokers independently on one subject, and one of them succeeded to complete the process, he shall be entitled to full payment apart from others (Article 32)
• The broker shall be entitled to fees from the party that authorized him, and if both parties were separately liable for the payment of wages owed to him even if those two parties have agreed – with each other – that one party shall bears the full payment, because their agreement is not an argument as it is from a third party (Adapted from article 33)

Governed by the provisions of articles (34 up to 41) and confined to two parties:

I. The quartet committee formed by the Chairman of Dubai department of territory

(In case of previous or subsequent amicable agreement to resolve the dispute through the committee) in accordance with the provisions of Articles 34 and onwards of the above mentioned Regulations.

II. Dubai Commercial Court of first instance

If there is no such agreement (the previous or subsequent amicable agreement to resolve the dispute by the committee formed at Property and Land Department in Dubai) the exclusive jurisdiction of the Commercial Court of First Instance at Dubai Courts, that has general authority to address the issue in the light of evidence presented, shall remain.

Final Words

It is important to refer to these articles of law, whether you are a real estate broker, an investor, or a developer. This is to ensure that everything done is under the blessing of the law, and the proceeding steps will be done smoothly as possible. We wish these can help shine a light for everyone in need of answers in terms of legal concepts around real estate brokerage.

The Dubai Real Estate Q2 2015 Report

The real estate sector was a major player in the continuing expansion of the economy last year, accounting for 13.3% of GDP—good for third, thanks in part to the Government of Dubai, which strongly contributes to the expansion of many areas that are connected with the real estate sector. Now that we’re more than halfway through this 2015, let’s take a look at the Dubai real estate market for the second quarter of 2015.

Apartments

The Dubai property market for apartments slowed down on the second quarter of 2015, with average apartment sales prices across the city dropping to the same level as in the first quarter of 2014.

The market price “correction” didn’t come as a blindsided surprise to industry experts. When analyzing the volume of transactions, the prices did not keep pace with the expected sales price growth but instead rose at a slower rate. Demand declined slightly in the first quarter and rather more steeply in the second quarter of this year.

However, there were some spots that are still going strong. Average sales prices in Business Bay have actually risen, albeit in a gradual rate over the past few years even though demand has remained constant. The district currently has more than 40 developments currently under construction by various developers, the majority of which are expected to be finished and handed over in 2016 and 2017. Additional developments are currently on the pipeline.

In Downtown Dubai, prices were 19% lower than at the 2014 peak. During the second quarter of this year, demand has been steady and at a healthy level.

Contrary to the two situations above, sales prices in Dubai Marina and Jumeirah Beach Residence (JBR) are declining which causes buyers’ interest to pick up. The same goes with Palm Jumeirah. Sales prices are 12.5% lower than at 2014 peak. There are 20 projects currently are under development on the island with more at planning stage.

Villas

Sales prices of villas have been falling for the third quarter in a row, since late 2014 to date. However, buyers’ sentiment has picked up due to the continued fall of prices. As a result, the number of transactions recorded in the villa segment has started to rise again.

Following the general trend across the emirate, the volume of transactions of prime villas in high-end developments within the Jumeirah Park, Jumeirah Islands, Emirates Hills and Arabian Ranches communities has kept increasing since late 2014. Prices in the first three areas declined in the second quarter, while sales prices at Arabian Ranches’ rose by 5%.

Among these prime communities, Arabian Ranches supply is the highest with more than 4,000 villas. The community is also the fastest growing. By 2018 Emaar, the developer will deliver nearly 2,500 new homes including the Mira Oasis, Lila, Azalea and Samara Rosa, and Rasha Villas sites.

SOURCE: Roots Land Real Estate

Was the Forecast for the 2015 Real Estate Market Correct?

The real estate market in Abu Dhabi has experienced an optimistic recovery from the worldwide economic downturn. For the past two years, the reports have yielded positive numbers, indicating a maturing health in the Abu Dhabi real estate sector. Last year, sales growth in real estate has seen a double digit rate increase. Villa sales prices rose by 16% and apartments up 15%. Rent rates increased by 10%, and 9% for apartments, villas respectively—a trend expected to continue until 2015.

Were they right?

In the latest real estate performance reports, the second quarter of 2015 saw an encore performance across all asset classes, although it wasn’t a repeat. The growth of demand has slowed down this year due to the sluggish performance oil sector, UAE’s primary trade commodity. This has lead to a reduction in government spending and sentiment, which affected the real estate market and others. While short term supply and demand remains above the line, the continuing growth of this particular sector depends on the government spending plans.

For the Residential Sales market, while prices have remained stable over 2015, there has been a slide in transaction volumes, although developers are still generally successful with new product launches. Residential Rents have remained stable this quarter due to limited demand.

Office space demand remains stagnant, again due to the slowdown in the oil sector and government infrastructure investment. In spite of this, Grade A office rentals have remained stable due to minimal vacancies in quality projects. However, office completions in tow throughout the year are expected to increase the market-wide vacancy rate.

Retail rentals remains stable this quarter and this is expected to continue in the short-term. A number of Super Regional malls are set to enter the market on 2018, which will partly be supported by new population and tourism growth.

The Hospitality market witnessed solid growth in hotel guests above 2014 levels driven by wide ranging initiatives to grow the tourism sector. ADRs have also registered an increase of 4% in YT May compared to the same period in 2014. Hotel occupancies registered 77% in YT May reaching the same levels as 2014.

SOURCE: Roots Land Real Estate

Dubai Real Estate Development Legal Requirements

These are what you need to know about Dubai Real Estate Development Legal Requirements.

Real Estate Licenses 

Licenses are needed in order to proceed with a real estate development project. This is the first rule in real estate development before any developer can proceed with even making a property available for sale.

Article (3) of Real Estate Development Escrow Account Act (8) of 2007 stipulates that the provisions of this law apply to those who sell units off-plan and receive payments from purchasers. Further, Article (4) emphasizes that no developer may engage in such business, advertise in local or foreign media or participate in exhibition for promoting real estate units or properties sold off-plan unless it is registered in and licensed by the Land Department in Dubai represented by its director general.

Article (7) of the Act stipulates in relation to the real estate escrow account that any developer who wishes to sell units off-plan must submit a request to open an Escrow Account and attach the following documents:

(1) A certificate of membership in the Dubai Chamber of Commerce and Industry;

(2) Trade license;

(3) Title deed of the plot to be developed;

(4) A copy of the contract concluded between the master developer and the sub-developer;

(5) The initial architectural designs and engineering drawings approved by the Competent Entities and the master developer;

(6) A financial statement of the estimated cost and revenues of the project approved by a certified chartered auditor;

(7) An undertaking by the sub-developer to start the construction works of the project upon having obtained the approval of the master developer for off-plan sale, or an undertaking by the master developer if there is no sub-developer; and

(8) A standard sale contract between the Developer and the purchaser.

Without these opening the escrow account that shall be accompanied by an agreement made in writing between the real estate developer and the escrow (the bank in which the payments made by purchasers of units sold off-plan or by the financiers of the project are deposited) is impossible.

Real Estate Developer’s Obligation

Real estate developers need to be able to deliver the property they applied a license for, especially with the investor’s money on the line. But any delays in the performance of their obligations to complete the project, while an inconvenience, is very understandable and an expected risk. One cause of delay is the fulfillment of requirements. These include the approvals to be obtained from governmental bodies and the duties of the developer, the main contractor, and subcontractors.

The review of the real estate law indicates the cases where the real estate developer is deemed in default in the completion of the project, Article (21) of the Executive Council Resolution No (6) of 2010 approving the Executive Regulations of Law No (13) of 2008 Regulating the Interim Real Estate Register in Dubai expressly states the reasons deemed beyond the reasonable control of the real estate developer, as follows:

(1) If the plot where the project is to be constructed is expropriated.

(2) If a government body has frozen the project for re-planning reasons.

(3) If a building remains or manuscripts are discovered within the site of the project.

(4) If the Master Developer makes alterations to the project site entailing the alteration of the project boundaries and area in a manner affecting the performance of the sub-developer’s obligations.

(5) Any other grounds to be estimated by the Agency. 

Strict Penalties for Violations

Accordingly, the lawmaker has ensured the proper guarantees for both investors and banks. In this regard, Article (16) of the Real Estate Development Escrow Account Act (8) of 2007 stipulates that without prejudice to any penalties stipulated by any other legislation, an imprisonment sentence and a fine of at least one hundred thousand Dirhams (AED 100,000), or either penalty, shall be imposed on those who:

(1) Engage in Real Estate Development activity in the Emirate without a license;

(2) Provide the Competent Entities with incorrect documentation or information in order to obtain a license to practice the Real Estate Development activity;

(3) Knowingly offer for sale Units in fraudulent Real Estate Development projects;

(4) Steal, appropriate, or forfeit any amounts of money delivered to them for the purpose of implementing Real Estate Development projects;

(5)As for auditors, deliberately preparing a fraudulent report upon auditing the financial standing of the Developer or deliberately failing to disclose material facts in their report;

(6) In the case of consultants, knowingly certifying fraudulent reports on a Real Estate Development project; or

(7) In the case of Developers, dealing with a real estate broker who is not registered on the Real Estate Brokers Register maintained by the Department in accordance with Bylaw No. (85) of 2006 concerning the Real Estate Brokers Register in the Emirate of Dubai.

Furthermore, Article (17) stipulates that the real estate developer shall be de-registered and punished with penalties set forth in Article (16) in the cases where:

(1) It is declared bankrupt;

(2) It fails, without an acceptable reason, to commence construction works after the lapse of six (6) months from the date on which he was granted permission to sell Units off-plan (as may be estimated by the Land Department in Dubai);

(3) The license granted to the Developer by the licensing entity is revoked;

(4) It commits any of the violations stipulated in items 2, 3, 4 and 5 of Article (16) of this Act; or

(5) It violates any of the laws and bylaws regulating the activity of Real Estate Development in the Emirate.

Source: Roots Land Real Estate

Dubai Property Market Update - Dubai Properties

The Dubai real estate sector and the UAE have experienced progress during the last few years, and we have seen this continue to 2014. The industry has developed in terms of best practice, regulations and laws to protect investors and developers. Improvements on the mortgage regulations have made a positive contribution to ensuring a controlled and sustainable market growth.
      
The latest industry reports have seen a gradual pace in price growth, which means that these developments are effective and have positively impacted the market behaviour.

From the perspective of Dubai Properties, the market has been in a favorable position and strategies have allowed them to experience sustainable growth across their portfolio in 2014.

They have seen strong demand from investors for the new residential project, Dubai Wharf, that was launched at Cityscape. In addition, other Dubai Property developments have sold-out and prompted the release of further units such as in Mudon and Remraam. 

They believe that 2014 will be remembered as a successful year for the real estate market, and for Dubai Properties in particular. Their strong sales has been a clear indication of the positive market conditions, and successful strategy to develop practical, high quality, and sustainable projects in every segment and area of Dubai that offer essential amenities and facilities to enrich the lives of residents and end users.

Dubai Property has already made over 36,000 residential units, 2.8 million sq. ft. of office space and over 1.2 million sq. ft. of retail space across key areas of Dubai. The main projects we have launched in 2014 include: Mudon, Remraam, Manazel AlKhor, and Dubai Wharf, some of which experienced successes.

Dubai Properties will continue to develop a growing portfolio of retail, commercial, residential, hospitality and mixed-use projects, and they have a strong pipeline of projects across all sectors that are tailored to meet the needs of real estate investors in the region. They will continue to align their business with the current market demand by launching new projects that provide strong investment opportunities.

Collectively, the real estate in Dubai is continuously experiencing strong growth with investors looking for ‘value for money’ projects across the city with completed infrastructure, accessibility and quality building and finishing. Our projects will continue to meet this market demand in line with Dubai’s growth across the residential, commercial & retail sectors while continuing with the strategy to develop projects in prime locations of Dubai.

Winning the Expo 2020 presents a huge opportunity for Dubai real estate industry, and as a leading developer with a wide range of projects in every segment and area of Dubai, we are well placed to capitalize on the increasing requirements which this will bring. 

Going forwards, we plan to launch more projects that cater to the increasing population expected in Dubai over the coming years, from affordable apartments to villas and townhouses and high-end luxury accommodation across key areas of Dubai.

Source: Roots Land Real Estate