Nakheel Credit Notes are being traded again at the Nakheel head office. They were suspended for a while and we believe they have re started to allow people to consolidate their credit into different projects as of last week.
The credit notes have been trading ever since the Credit Crunch hit Dubai in October 2008. All the major developers have been allowing people to trade out of stalled projects into other stock.
It used to be that you could transfer your credit into any other property and even a property that was not in your name. Recently the Developers, and especially Nakheel, have only allowed people to transfer funds into a property they already own. This has slowed the consolidation market down considerably ,as it is effectively forcing people to buy another property ( and introduce more cash) before they can transfer their credit.
Some people are looking to buy credit from those people that have it and they are purchasing at a discounted rate in the region of 40%. The sellers of credit are obviously taking a huge hit on their ‘asset’ but after nearly two years of little improvement in the market, sellers have become pragmatic about the situation and many are deciding to cash in and place the reduced balance into other assets.
Throughout 2010 Credit Notes have been the mainstay of the Dubai property market with these transfers far outstripping legitimate house sales. In the short term this trend is likely to remain as people organize their portfolios the best way they can.
20 June, 2010
14 June, 2010
Abu Dhabi moves into Leisure
This weekend Aldar Properties, Abu Dhabi's largest developer, has announced it is to build a huge water park at Al Yass Island nearby to Ferrari World.
This area, Yass Island, is slowly becoming a very nice spot for all year round entertainment. It currently hosts the Grand Prix and has now got two magnificent golf courses in Saadiyat Island and Yass Links. With a world class water park to be added you can see that this area will become an very popular place for UAE residents to visit and holidaymakers looking for a great day out.The water park will need at least one day to to see everything and Ferrari World is just enormous .
It is easy to get to, as the governement have put amazing infrastructure in place and ongoing investment is apparent as you drive down the new 10 lane highway which connects the old motorway with Al Reem Island in the city. It also boasts some great new hotels with two new beach fronted developments being halfway complete.
We have also sold a couple of properties last week in AD, on the Yass Island site, which I believe will be a great investment for the buyer.
All in all this is exactly what the region needs and although they are bound to build a huge mall at some stage, it is good to see that creative thought is going into how to maximise this soon to be talked about leisure destination.
03 June, 2010
Palm Jumeirah Rentals
Over the past few weeks there have been a few reports out from the Advisory companies such as Colliers and Landmark suggesting that rents in Dubai and Abu Dhabi are set to fall further. I thought I would look into this a little and see what impact it might have on the Palm.
As you all know we are the only company dealing exclusively with the Palm so we should be able to give a good upto date commentary on what is happening with Palm apartments and villas.
The last month, from a rental perspective, has seen enquiries for both types increase from the previous month. There has been a healthy amount of closed deals and May 2010 was our best month to date for rentals on the Palm.
I think the most important things to analyse are:
The first three questions above can all be answered in a positive manner which would enable a normal market to thrive. The biggest is problem is the amount of new properties coming to the market.
On the Palm Jumeirah we have 400 more Oceana's to be handed over in the next few weeks, The Fairmont Residence in the next month, and 3 buildings at the Golden Mile. That's a lot of new stock which you can add another 500 Marina Residences to.
It really is all about the new inventory and what i have just described for the Palm can be duplicated across all the major developments of Dubai.
A year ago, when Tiara was launched, rental prices for this development held quite firm and actually increased over the first 6 months of launch. It is a quality product and only 300 units were released for rent and the demand was high enough to keep them bouyant.
A year on and Oceana, which is virtually the same product, is now seeing its rental prices drop. A one bed Oceana was rented by us 4 weeks ago for 140k per annum and now you can find them for 120k. This is a big drop and suggests that the landlords are trying to beat the market and ensure they get a tenant before there is so much stock that prices reduce again.
The reports from the advisory firms do have substance and it is true that apartment prices, even on the Palm, are seeing a pressure downwards. In contrast, there are no new villas being built and prices here are very stable. I don't think they have dropped in the past 12 months and because tenants stay for around 3 years in villas stock levels are limited.
The Palm will fair much better than the rest of Dubai over the next 2 years and i predict that occupancy levels will be high, and significantly higher than the rest of Dubai. This is because people do want to live on the Palm and as prices ease existing Dubai tenants will be able to move onto the Palm and benefit from better pricing.Due to the fact that there are 40,000 units to be handed over before Xmas I am sorry to say that this trend has started and Landlords are going to see this affect their revenue streams. This must continue for atleast 2 more years and my advice to all landlords is to offer a well maintained property and look after your tenant to the point where they want to renew for a second year.
The Palm is settling down very well and as Nakheel slowly gets back on track The Palm will still be the palce to be and live. I hope the maintenace of the Shorelines and Clubhouses can be improved soon as it this kind of service that will help maintain the rental levels.
It is going to be a rocky couple of years in Dubai and the rest of the World but quality will prevail at the end of the day.
As you all know we are the only company dealing exclusively with the Palm so we should be able to give a good upto date commentary on what is happening with Palm apartments and villas.
The last month, from a rental perspective, has seen enquiries for both types increase from the previous month. There has been a healthy amount of closed deals and May 2010 was our best month to date for rentals on the Palm.
I think the most important things to analyse are:
- How many deals are being done?
- What percentage of lets are fresh tenants versus "house hoppers"
- What level of rent is being achieved and its percentage gain or drop.
- How much new inventory is being added to the register. - This one is critical
The first three questions above can all be answered in a positive manner which would enable a normal market to thrive. The biggest is problem is the amount of new properties coming to the market.
On the Palm Jumeirah we have 400 more Oceana's to be handed over in the next few weeks, The Fairmont Residence in the next month, and 3 buildings at the Golden Mile. That's a lot of new stock which you can add another 500 Marina Residences to.
It really is all about the new inventory and what i have just described for the Palm can be duplicated across all the major developments of Dubai.
A year ago, when Tiara was launched, rental prices for this development held quite firm and actually increased over the first 6 months of launch. It is a quality product and only 300 units were released for rent and the demand was high enough to keep them bouyant.
A year on and Oceana, which is virtually the same product, is now seeing its rental prices drop. A one bed Oceana was rented by us 4 weeks ago for 140k per annum and now you can find them for 120k. This is a big drop and suggests that the landlords are trying to beat the market and ensure they get a tenant before there is so much stock that prices reduce again.
The reports from the advisory firms do have substance and it is true that apartment prices, even on the Palm, are seeing a pressure downwards. In contrast, there are no new villas being built and prices here are very stable. I don't think they have dropped in the past 12 months and because tenants stay for around 3 years in villas stock levels are limited.
The Palm will fair much better than the rest of Dubai over the next 2 years and i predict that occupancy levels will be high, and significantly higher than the rest of Dubai. This is because people do want to live on the Palm and as prices ease existing Dubai tenants will be able to move onto the Palm and benefit from better pricing.Due to the fact that there are 40,000 units to be handed over before Xmas I am sorry to say that this trend has started and Landlords are going to see this affect their revenue streams. This must continue for atleast 2 more years and my advice to all landlords is to offer a well maintained property and look after your tenant to the point where they want to renew for a second year.
The Palm is settling down very well and as Nakheel slowly gets back on track The Palm will still be the palce to be and live. I hope the maintenace of the Shorelines and Clubhouses can be improved soon as it this kind of service that will help maintain the rental levels.
It is going to be a rocky couple of years in Dubai and the rest of the World but quality will prevail at the end of the day.
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