Investors who missed investing in Dubai during its early days...will they try out Abu Dhabi?

With the recent success of Cityscape Abu Dhabi, it is said that the emirate plans to invest Dhs1 trillion, or $270 billion, in new construction projects.

Abu Dhabi, which is just a 2 hrs drive from Dubai, which is the capital of the United Arab Emirates and the richest city in the world. The emirate's 420,000 citizens, who sit on one-tenth of the planet's oil and have almost $1 trillion invested abroad, are worth about $17 million apiece. (A million foreign workers don't share in the wealth) .

Abu Dhabi has been relatively slow in joining the global real estate boom, but now, with great investor interest and good public appetite for owning properties in the region, it is seen as one of the most upcoming investment destinations in the middle east.

The development pattern in Abu Dhabi is noticably similar to the inch to Dubai it is seen to follow the pattern of growth similar to that of Dubai by many. Attractive financing schemes are being offered to investors but yet, one thing that could decide the fate of investments in Abu Dhabi is that in the initial days, Dubai properties were priced on the lower side. Slowly when Dubai became a global hub for investments, coupled with a great government and infrastructural support, now Dubai properties are reasonably on the higher side. In contrast, for example, launched with prices from $2.2 million upwards which might be considered on the high side, although in a new real estate market this could be cheap for a luxury, Maldives-style location.

Currently, where Dubai properies are not really selling on a premium anymore, the growth of a similar opportunity Real Estate market right in the beighbourhood is more seeming like unwelcome competition for Dubai. Since both the emirates belong to UAE and with the growth of tremendous real estate in both these areas, which in Dubai's case have not only been successful in getting investors from Europe and accross the world but people have moved there to make it their home, it probably will do some good to Dubai too in the long run.

Now, it is yet to be seen if Abu Dhabi is able to attract similar interest from investors accross the globe and if investors who put their money comparing it to Dubai actually can makeup for the money they could create at some point by investing in Dubai. Only time will tell!

Contributed By : Pankaj Thukral

Al Qudra sells entire tower in 30 minutes at Cityscape Abu Dhabi

ABU DHABI – Al Qudra Real Estate (AQRE) sold out its Amber Tower within 30 minutes at the official sales launch at Cityscape Abu Dhabi. Amber Tower is the first high-rise building within the Shades development at Shams Abu Dhabi.

“Amber Tower is Al Qudra Real Estate’s first development targeting both UAE and expatriate endusers and investors,” said Claus Peter Rees, AQRE acting CEO. “Cityscape Abu Dhabi represents the perfect platform for a sales launch,” he added.

The Shades Project, which is strategically situated next to Shams Abu Dhabi’s central park and water canals, encompasses five residential towers. Amber Tower consists of 34 floors with studio, one, and twobedroom apartments.

The development will include many modern-day facilities, including fitness and entertainment areas, a day-care centre, a beauty salon and landscaped terraces, as well as a rooftop swimming pool and underground parking area.

The project was designed by one of Canada’s largest design and construction firms, the NORRGroup, and by the architects behind Dubai’s renowned Jumeirah Emirates Towers.
“Our focus lies in delivering premium services while ensuring that our investors receive a maximum return on their investments,” concluded Rees.

Jones Lang LaSalle acquisition of Kemper’s Group is finalised

Creating the leading retail real estate advisor in Germany

London, 19th May 2008 – Jones Lang LaSalle today announced the closure of its acquisition of Kemper’s Group in Germany, following the completion of all regulatory approvals. The acquisition of Germany’s leading retail property advisor makes Kemper’s Jones Lang LaSalle Retail Group (a wholly owned division of Jones Lang LaSalle Germany) the retail property market leader in Germany. The projected sales of the Kemper’s Jones Lang LaSalle Retail organisation for the full calendar year 2008 will amount to approximately 56 million Euros.
The Kemper’s Jones Lang LaSalle Retail Group has 220 employees in nine German locations operating across four business sectors: Retail Leasing, Retail Investment, Retail Management and Retail Advisory. The executive board of the Kemper’s Jones Lang LaSalle Retail Group will comprise Gerhard Kemper, Rüdiger Thräne and Jörg Ritter. Gerhard Kemper will also become the fourth member of the Management Board of Jones Lang LaSalle Germany.

Christian Ulbrich, CEO Jones Lang LaSalle Germany, commented: “Our acquisition of Kemper’s reflects the increasing globalisation of the real estate markets. Consolidation in the marketplace reflects the changing demands of the client base of occupiers, developers and investors, all of whom have an increasingly international outlook. Clients frequently require integrated ‘one-stop shop’ services from real estate consultancies and the Kemper’s Jones Lang LaSalle Retail Group is very well placed to provide these integrated services.”

Gerhard Kemper, of Kemper’s Jones Lang LaSalle Retail Group, added: “The merger has created even more competence, expertise and professional know-how than the two companies were able to provide individually. The combined forces of both companies mean we are now able to execute transactions of any scale in the retail sector in Germany.”

Following this acquisition, Jones Lang LaSalle Germany has a total headcount of over 750 employees. Europe-wide Jones Lang LaSalle has a total of 3,900 employees, 500 of them within the retail sector.

Contributed By : Arun Chitnis

Indiabulls Property Trust (IPIT) all set to list in Singapore

Real Estate trusts listed in Singapore have seen unfavorable markets during the past few months, following significant falls in share prices and hence companies opting for Initial Public Offers have rightly stayed away from the declining market. Surprisingly enough, Indiabulls Properties Investment Trust (IPIT) looks like it is set to launch an offering of about S$260 million ($190 million) within the next couple of weeks, following the start of pre-marketing at the end of last week, which means a saving grace for IPOs looking at the Singapore market in the near future.The listing vehicle for this IPO is sponsored Indiabulls Real Estate (IBRE), which is by India’s third largest property developer in terms of market capitalization, will be structured largely as a real estate investment trust (REIT) but will be listed as a business trust to give it greater flexibility with regard to how much of its portfolio can be made up of properties still under development. The initial portfolio will consist of two commercial property developments in the up-and-coming business & commercial district of Lower Parel in Mumbai, which was a former industrial region that used to house numerous textile mills like Pheonix Mills & Jupiter Mills, but is now a micro-market with high-end commercial and residential developments. All Residential as well as Commercial developments in the Lower Parel area, are premium because of lack of availability of good commercial space in Mumbai, high rental values and quality tenants, including banks, financial institutions and large corporations.


Indiabulls Properties Investment Trust (IPIT)’s developments – One Indiabulls Centre (which was formerly known as Jupiter Mills) and Elphinstone Mills are located within two IT parks in the area. When finished, the two combined will have 2.97 million square foot of lettable office space, 438,000 sq ft of retail space and 119,000 sq ft of residential housing. If successfully listed, IPIT will become only the second property trust in Singapore to be backed by Indian assets after Ascendas India Trust (a-iTrust) that listed in July last year, beating DLF and Unitech to the punch. DLF, Unitech and Indiabulls were all considering spinning off part of their property assets through the REIT route or business trust in Singapore around Feb this year, but the plans were postponed as the selling pressure on global equities intensified. At the time, DLF and Unitech were both aiming for significantly larger IPOs at up to $1.5 billion and $700 million, respectively.

It is a logical decision for IndiaBulls Real Estate to vouch for the early mover advantage in being the first to take on the still challenging market. Considering that a-iTrust is still down 30% from its highs from November, this move could prove to be both risky & smart, since the Singapore market is showing signs of recovering.

It is also said that Billionaire Lakshmi Mittal, the world's richest Indian, has committed to buy units equivalent to a 3.9 per cent stake in IPIT, which is in process of listing in Singapore.



Contributed By : Shivang Prabhakar

Mumbai to get Cybertecture office building says James Law

James Law Cybertecture revealed the plan to yet again innovate with his design and architectural skills, but this time, the venue is Mumbai. Yes, Mumbaikars, you are about to get an office building in the shape of an egg, right in the heart of Mumbai's central business district.

The project is a cybertecture office building that is aiming to bring together iconic architecture, environmental design, intelligent systems and new engineering, to create “the most innovative building for the city of Mumbai and for India in the 21st century,” according to the company’s founder James Law.
Law’s inspiration for the project comes from looking at the earth itself, and translating that into a sustainable ecosystem derived from an integrated and seamless application of cybertecture that evolves to give a building’s inhabitants the very best space to work in.

The symbolic ‘planet’ form is further stretched to cater for 15 levels of accommodation, housed in the egg-shaped building which is orientated and skewed at an angle to create both a strong visual language as well as to alleviate the solar gain of the building.

By using the egg shape, as opposed to a conventional building, there is up to 20 percent less surface area, with the unique design allowing for up to 30 metre spans of column-less floors.

Source: Cityscape Abu Dhabi Newsletter
For more information, please log on to http://www.cityscapeabudhabi.com.

Cityscape Extends To Friday By Royal Appointment

Release Date: Wednesday, May 14, 2008

In an unprecedented decision in the history of Cityscape exhibitions, the Government of Abu Dhabi has requested that the premier real estate development and investment event be extended by one day. Cityscape Abu Dhabi will remain open for an extra day, now concluding on the evening of Friday May 16th.

The exhibition was opened today at the Abu Dhabi National Exhibition Centre by HH Sheikh Mohammed bin Zayed Al Nayhan Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.

Mark Goodchild, Project Manager, Cityscape Abu Dhabi said: “We received a formal request from the Abu Dhabi government that they would like us to extend the event by one more day. This is unprecedented for Cityscape, but considering the massive interest on the first day, it is hardly surprising. We’re delighted that the government should grant us such exceptional support and also that they recognise the importance of Cityscape for the development of Abu Dhabi and for many of the region’s exciting projects.”

To underscore the importance of the event as a showcase for the capital’s intricate planning, sustainable projects and investment transparency, His Highness General Sheikh Mohammed bin Zayed Al Nahyan Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces agreed to be patron of Cityscape Abu Dhabi for a second successive year.

In terms of ‘home-grown’ support, the Abu Dhabi government and locally-based real estate heavyweights have shown full support for the industry showcase. Major local developers such as Mubadala, Sorouh Real Estate, ALDAR Properties and Al Qudra Real Estate all have a significant presence.

Organisers IIR Middle East said that the show was sold out some months ago, with over 300 confirmed exhibitors covering more than 30,000 square metres of exhibition space.

Platinum sponsors of Cityscape Abu Dhabi include Mubadala, Aldar, Sorouh, Al Qudra, The Land Holding Company and Escan. Gold sponsors include Dubai World Central, Tameer and Saudi Oger, with Future Brand and East & West Properties taking silver status. The Department of Municipal Affairs of Abu Dhabi is associate sponsor, Urban Planning Council of Abu Dhabi is Strategic Planning Partner while HSBC is investment sponsor.

For more information, please log on to http://www.cityscapeabudhabi.com.

For more information, please contact:

Nathalie Visele
Director
Shamal Marketing Communications
Dubai, United Arab Emirates
Tel.: +9715 0457 6525
E-mail: nathalie@theshamalgroup.com

Destination of the Future for Mumbai Realty

With Booming commercial property development on LBS Marg and Neighboring locations like Ghatkopar, Vidyavihar, Powai / Connectivity to all suburbs, BKC, Eastern Express Highway, LBS MARG is becoming an hot destination for commercial property development. Since LBS Marg is centrally located and connected to all suburbs, it is becoming a more preferable destination for most of the corporates. It has got connectivity to major destinations like Bandra Kurla Complex, CST Road, Kalina, Eastern Express Highway, Jogeshwari Vikroli Link Road which helps people to drive down from Eastern Suburbs to Western suburbs, Powai - Sakivihar road which connects to Andheri and from Eastern Express Highway people can easily drive down to Airoli, Vashi, Ghatkopar, Chembur, Sion and towards town. Also, the first proposed METRO RAIL coming up from Versova-Ghatkopar Belt is one of the reasons for the major development. All the railway stations like Ghatkopar, Vikroli, Kanjurmarg, Bhandup, Mulund are at a walking distance near to LBS MARG.

• Demands from corporate sector mainly from IT, ITES, BPO’s / demand - supply position in the commercial property :-- Considering all the above factors, sectors like IT/ITES/BPO’s / FINANCE and BANKING/RESEARCH firms and even premium hotel players are eyeing the LBS Marg belt from Ghatkopar To Thane. Already players like WNS, Accenure, CapGemini, Wipro Spectramind, Prudential, Colgate Palmolive, HCC, CIPLA, Johnson and Johnson are located in this area and demand is still coming up for office space requirements from corporates. However, one of the major factor which attracts the demand at LBS Marg are the rates that are quite lower compared to Bandra Kurla Complex, where the lease rates are approximately Rs.300-400 per sq. ft. Those who are not able to match their requirement considering the availability of supply and rate factor at BKC, they switch over to LBS MARG where the rates are in the range of Rs. 60 to Rs.180 per sq. ft, which is still at the lower side compared to Bandra Kurla Complex. Currently there is a demand of more than 20 lakh sq. ft for office premises ranging from 5000 sq. ft till 2,00, 000 sq. ft each. However, there is a scarcity of commercial office premises for ready possession. Most of the constructions coming up are under construction phase. Total construction of around 60 lakh sq. ft is coming up at LBS MARG and connected to areas like Powai, Ghatkopar (East), Ghatkopar (West), Vidyavihar, Chembur.
  
• Projects coming up from well known developers:-- Considering the demands coming from all above players, most of the developers are coming up with development of commercial office space with state of the art amenities and malls on LBS MARG belt. Developers Like Runwal, K Raheja Construction, Hiranandani, Kohinoor Group, Nirmal and other private developers from Ghatkopar are coming up with large floor plates of commercial office premises / IT PARK / Malls to meet demand for these corporates.

Following are few of the projects coming up :

• Rates / Appreciation of property values in last 2 years and future prospect:- Rates in these location are ranging from Rs. 7500 per sq. ft to Rs. 18000 per sq. ft (Capital Value) and for lease it ranges from Rs.60 per sq. ft till Rs. 180 per sq. ft. There has been an appreciation in the capital value of property in last 2 years by more than 100%. Rates in same areas were around Rs. 4000 per sq. ft two years back. Analyzing the current growth scenario and demands coming up, prices are expected to rise further; we can see more and more companies having their corporate offices in LBS MARG and connected areas like Powai, Ghatkopar, Vidyavihar, Chembur.

Contributed By : Mehul Ved

JLLM - Anuj Puri's take on the Real Estate Sector

Anuj Puri, Chairman & Country Head, Jones Lang Lasalle Meghraj

What is the current situation in real estate markets?

There is overheating of prices in certain Northern regions, reduced liquidity among developers because of the credit crunch and a watch-and-wait stance among property buyers as they anticipate a blanket correction in the sector. The credit crunch and the US recession are not the only factors involved here. Interest rates have shot unrealistically high begin with. However, the current market dynamics notwithstanding, the property market in India will continue to thrive – albeit at a more realistic rate. Prices are stagnating, and we can reasonably expect a correction in certain areas over the next twelve months - depending on specific location sector and property typology. Meanwhile, demand for property in certain locations will continue undiminished due to the existing and upcoming market drivers there.

What are the opportunities and challenges for the Indian real estate sector now?

We do have a challenge situation on our hands, but it is one brought about by lack of faith and information. The origin of the challenge does not lie in foreign markets, but our own. Nor is the challenge anywhere as big as its is being made out to be. India is nowhere as vulnerable to fallout of the US recession as its is being fashionably assumed. The international credit rating agency Standard and Poor’s has clearly stated that India and China are in the category of ‘not vulnerable’ countries.

India is still among the biggest growth drivers. Foreign players will continue to invest in India and go slower on low-priority markets, especially the developed ones where investments take longer to pay off. There are, for instance, immense opportunities in Indian retail. The segment of India’s more affluent shoppers is 6 million strong – a segment that spends approximately $28.36 billion annually. India still maintains its ranking as the 5th most attractive of all emerging retail markets in the world.

Has the slowdown in market affected the real estate industry in terms of property sales?

There has been a slowdown in domestic transactions and we are indeed witnessing a correction, but this is brought on by the sharp 200-300% rise in property rates seen over the last two years. It is perfectly natural and expected that there would be an adjustment of such irrational growth. The sales volumes previously predicted for 2008 now need to be second-guessed. However, lack of growth does not equal a setback – only a period of stagnancy. Indian real estate continues to be a good risk diversifier that generates excellent risk-adjusted returns.

What are the issues the sector is currently facing in India?

Lack of infrastructure, lack of transparency and unrealistic rate inflations brought on by speculation in many geographies across all sectors come readily to mind. Thankfully, the Government has taken various proactive steps to curb inflation and to drive out speculative investment. Regulators and progressive incentivization schemes for townships and SEZs will help steer the boom in more constructive directions. We are also on the verge of seeing the introduction of REIT-style investment routes to funnel in additional and sustained foreign funds into the sector.

How could one express the current scenario in figures, and what do they mean?

There is an existing shortage of 25 million residential units. The residential sector will continue to be the driving force. Almost 91% of all real estate investments are in the residential sector. Approximtaley two million residential units admeasuring an average of 1,200 square feet will be constructed annually.

In the commercial sector, each year sees the development of approximately 60 million sq ft of office space. There has been a slowdown in absorption but no sign of increasing vacancies. In the retail context, over 300 shopping malls are under construction and will be operational by the end of 2008. Each year sees the development of approximately 25 million sq ft of retail space.

How can the sector be strengthened?

There is a clear need for schemes specifically designed to put in much-required infrastructure, and further incentivization of affordable housing projects to encourage developers to address the monumental demand for residential space from the middle class. The sector also needs the benefit of single-window clearance provisions for progress-oriented projects.


Contributed By : Arun Chitnis