Look Back 2012 The property sector careered through bad news to start the year but a generally positive outlook won the day, strengthening prices and spurring a return of headline-grabbing projects in the Emirates.
Roller coaster UAE property sector pulls out of its dive
Dipping and climbing faster than a roller coaster at one of Dubai’s five proposed theme parks, the property market in the UAE is seldom dull. But what were the 12 overriding themes that got The National readers gasping in 2012?
12 Sales to the government
The year started badly for the property sector with the markets reeling from the news that Aldar, Abu Dhabi’s largest listed developer, was selling off Dh16.8 billion (US$4.57bn) of assets to the Abu Dhabi Government in a deal that included its Central Market scheme and hundreds of homes on Al Raha Beach. The move came less than 12 months after the company signed an initial deal to sell its Yas Island properties, including the Ferrari World theme park and Dh5.5bn worth of homes and land to the Government.
11 Service charge spats
In the first half of the year, Dubai’s biggest state-owned developer Nakheel was embroiled in conflict with residents at The Palm Jumeirah. The dispute first flared in December last year when Nakheel began to bar residents with unpaid service fees from using communal facilities. The ban also hit tenants who had paid their rent but whose owners were in arrears. In May, dozens of residents of the Golden Mile apartments on The Palm were banned from entering the complex, and by June, Nakheel was refusing to maintain facilities. Pools at the upmarket residences were finally refilled a few weeks later after Nakheel said it had collected some of the Dh15 million it was owed.
10 Arabtec ownership
In March, shares in Arabtec, Dubai’s largest listed contractor, surged 15 per cent to the market limit after Abu Dhabi’s Aabar Investments raised its stake in the company to more than 10 per cent. Later that month, Arabtec nominated the chief executive and three other directors of Aabar to join its board. In May, shares fell on speculation that Arabtec could delist from the Dubai Financial Market after Aabar increased its stake to 53 per cent and Khadem Al Qubaisi, the Aabar chairman, was appointed chairman of Arabtec. The company has remained listed and last month bought almost a quarter of the share capital of the interiors specialist Depa.
9 Material worlds
It’s been a tough couple of years for the country’s building materials manufacturers. But this year seemed to show an improvement for profits and productivity for many as work began again on some stalled projects. In September, the steel manufacturer United Steel Industries announced it was resuming work on what will be the largest steel mill in the country, in Fujairah, while Emirates Steel said it increased production during the first nine months by a third.
8 Abu Dhabi decree
An Executive Council decision in September that all Abu Dhabi state employees must move to the capital within a year was thought by many as likely to stop the slide in the capital’s rents, but raised many questions from those who own homes in other emirates or who have children at school outside the emirate.
As to what effect, if any, the decree will really have, the verdict remains open.
7 Merger mania
Will they? Won’t they? When, in March, Abu Dhabi’s two largest developers announced they were weighing a $15bn merger in what would be the biggest consolidation of listed property assets ever seen in the capital, the prospect seemed like a foregone conclusion.
The companies spent most of the year making more statements about the prospect.
Yet, nine months later, the market is still waiting for the final nod. Watch out for more news next year.
6 Ghost buildings
Yes, prices might be rocketing in some parts of Dubai, and yes, a slew of new announcements have been made about future projects. But for many investors who bought during the previous property boom, the nightmare is far from over.
The skeletons of stalled tower projects and vacant plots of land in Dubai’s Business Bay, Abu Dhabi’s Reem Island and elsewhere across the UAE continue to be testament to the millions of dirhams spent on swanky apartments and villas that were never built.
Caveat emptor as Latin speakers would have it – let the buyer beware.
5 Grabbing headlines again
At Cityscape Global in October, the world was suddenly reporting again about Dubai’s wacky property schemes.
Top of the billing was the Indian developer Link Global Group, which is hoping to build Taj Arabia, a huge replica of the Taj Mahal, in its Falconcity of Wonders scheme, as well as an Eiffel Tower, Hanging Gardens of Babylon, the Great Wall of China and the pyramids of Egypt.
The project, which was previously announced during the Dubai property boom, is part of the 3.8 million square metre Falconcity project proposed to be developed across the Emirates Road in Dubai.
4 Government projects
In January, market confidence was boosted in the capital when the Abu Dhabi Executive Council announced an unprecedented swathe of new projects and expansions to existing ones. Projects included reconfirming plans for developments on Saadiyat Island and Khalifa Port and the planned Midfield terminal at Abu Dhabi International Airport.
3 Return of mega-projects
It felt like Dubai’s boom times had returned last month when Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, announced a slew of new projects for Dubai over the course of just one week.
Not only will Emaar and Dubai Holding press ahead with plans for another biggest shopping centre in the world, 100 new hotels and a Universal Studios theme park at Sheikh Mohammed bin Rashid City, plans were also announced to build five theme parks in Jebel Ali and Dh4bn worth of projects, such as an expansion of the Madinat Jumeirah resort and a footbridge across the Dubai Creek.
Real or manufactured, the sight of hundreds of investors waiting in line to get their hands on off-plan property has been splashed across newspapers in the UAE at the end of this year. Most memorable was Emaar’s launch of 542 serviced apartments at The Address The BLVD in Downtown Dubai which sold out quicker than Justin Bieber tickets as investors braved 40°C heat to get their hands on the flats in the 63-storey tower.
1 The ‘R’ word
The value of land in Dubai has risen over the past year as the emirate’s property market stabilises. Figures released in the summer by Dubai’s Land Department showed values increased over the first half of the year by about 10 per cent. Agents said that in some areas, prices were back to their pre-downturn heights. And this month, Knight Frank reported the Dubai property market was set to be one of the world’s best performing next year – albeit after a big correction. But will it continue next year? Only time will tell.