New real estate Dubai launches are few and far between these days. The new law escrow account controls the funds for the development during the construction process, exploding construction costs and stricter conditions for lending to finance the project, have all contributed to the slowdown. But still strong demand and off-plan has focused on the sale of the northern Emirates.
In fact, Dubai's decision last summer to the developer to break through the introduction of an escrow system - as typically required by law in many global real estate markets - has been a boon for developers in Ras Al Khaimah, Umm Al Quwain and Ajman.
Some developers have opted for the start of the next off-plan properties in the Northern Emirates on the back of their successful (sold out) projects in Dubai. But any decision to invest in these markets should be aware that they do not enjoy the protection of Dubai escrow account law and the developers have full access to their funds during the construction process.
It is undoubtedly true that even spiral building material prices are dissuading them from developers, more projects in Dubai. The cost of steel reinforcing steel, for example, an important material for all the reinforced concrete building is not less than 30 percent in the past two months.
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UAE still in business with Iran despite sanctions (13th February 2008)
Thousands of Iranian firms are still doing business in the country's top trading partner, the United Arab Emirates, although a US tries to stifle Iranian economy over its controversial nuclear program. But US banking sanctions are also beginning to get going. Iranian businesses have not had any problem with local banks because we are considered UAE companies under local rules requiring at least 51 per cent of a business to be owned by an Emirati national, said Nasser Hashempour, executive deputy president of the Dubai-based Iranian Business Council. The same goes for fully Iranian-owned companies operating out of free zones because they are registered in the UAE and their sponsor is the free zone, which would pull their licenses if they flouted the rules, he said.
Dubai-based Emaar Properties on Tuesday proposed a dividend of Dh0.20 ($0.054) per share from its 2007 profit. The divedent amount didn’t changed compared with previous one when the payout disappointed investors.
The saved profit will go to reserves, the largest Arab real estate developer by market value said on the Dubai bourse website.
Earnings per share for the year increased to Dh1.08 per share, compared with Dh1.05 the year before.
"Local retail investors would not take it positively because the stock is perceived as a proxy for the whole market and these investors are yield-driven," said real estate analyst at Deutsche Bank in Dubai.
The stock is down about 24 per cent this year, the worst performance in the Dubai index.
Emaar beat most analysts' forecasts last month with a record fourth-quarter profit of Dh1.74 billion ($473.9 million).
Investment bank EFG-Hermes in January cut its fair value target for Emaar after the developer said profit growth this year would stagnate on higher construction costs for its malls and hotels.
The Egyptian bank lowered its long-term target for Emaar shares to Dh18.50 each from Dh20.04, and its earnings-per-share outlook to Dh1.23 from Dh1.63 following a conference call with Emaar officials.
Best Western plans expansion (13th February 2008)
US-based hotel chain Best Western International said it plans to have 20 properties in the Gulf by 2015 as part of its expansion across Asia.
Best Western yesterday signed an agreement with Dubai-based Zainal Mohebi Group's investment arm to develop mid-priced hotels in the Gulf Cooperation Council (GCC) countries.
Mohammad Mohebi, CEO of Mohebi Investments, said projected investment in 20 hotels will be about Dh2 billion and his company will work with other investors to develop these properties.
The Mohebi Group will fully own some properties in the UAE. The first hotel is now under construction in Burj Dubai. The 220-room Best Western Residences is expected to open in February 2009.
Officials said Best Western has been drawn to the region because of rapid tourism growth, with Dubai alone looking to receive 15 million visitors by 2015.
"There is a particular need for three- and four-star hotels in the Gulf region. This is a major segment of the market that has not been properly catered to by international hotel chains," Mohebi said, adding that the development strategy will involve setting up multiple properties in key cities.
Best Western has 90 operating hotels in Asia and 30 are under development, a company spokeswoman said. The target is to have 200 hotels in Asia by 2010.
Best Western, which is headquartered in Arizona, operates about 4,200 hotels in 80 countries, but its portfolio is heavily dominated by operations in the United States.
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