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UAE president amends provisions in Abu Dhabi real estate law

In his capacity as Ruler of Abu Dhabi, the President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, has issued a law amending provisions of Law No. 19 of 2005 concerning real estate sector in Abu Dhabi.

The new law stipulates amendments to Articles 3 and 4 of the ‘Real Property Law’.

Article 3 (i) stipulates the rights to own property are limited to three categories the first being Emirati citizens, natural or legal persons, the second includes public holding companies with ownership not exceeding 49 per cent non-nationals, or the third as any person to whom a decision is issued by the Abu Dhabi Crown Prince or the President of the Executive Council. While Article 3 (ii) stipulates that non-UAE nationals, natural or legal persons, shall have the right to own and acquire all original and in-kind rights in real estate properties located within investment areas.

As for Article 4, the amendment stipulates that the holders of a ‘usufruct’ or ‘musataha’ for more than ten years shall have the right, without the consent of the landlord to dispose of the property, including the right of mortgage, however the landlord may not mortgage the property except with the consent of the usufruct or musataha holder. In both cases, the parties may agree otherwise.

His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, directed Sheikh Khalid bin Mohamed bin Zayed Al Nahyan, Chairman of the Executive Committee and Member of the Abu Dhabi Executive Council, to review the emirate’s real estate sector development in line with international trends and standards.

The Abu Dhabi Executive Committee raised a proposal to update the Real Property Law, following a study on the emirate’s real estate sector, and the holding of a series of meetings with stakeholders, investors and real estate developers, to identify means to develop the sector, and consolidate the status of Abu Dhabi as an investment destination.

Sheikh Khalid bin Mohamed said: “Updating the Real Property Law reflects the leadership’s support and vision to develop the emirate’s economy, with the guidance of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and monitoring of H.H. Sheikh Hazza bin Zayed Al Nahyan, Deputy Chairman of Abu Dhabi Executive Council, who have both stressed the importance of updating legislation to accelerate economic growth and the development landscape of Abu Dhabi.”

His Highness noted that the amendments will have a positive effect on the real estate sector, and will encourage investors to acquire land in designated investment zones within the Emirate of Abu Dhabi, with ample room for development opportunities.

Developers must ensure supply-demand balance

Real estate developers in Abu Dhabi need to be ‘careful’ not to affect the demand-supply balance otherwise everyone will stand to lose, a top official from Mubadala Investment Company said.

“A developer should ensure a right balance between supply and demand. At the end of day, an oversupply will affect the pricing and all of us will lose. So, we have to coordinate among ourselves on right products that come into the market and complement each other,” Ali Eid Al Mheiri, executive director of Real Estate and Infrastructure at Mubadala, said on the sidelines of Cityscape Abu Dhabi. The three-day event will conclude.

He noted developers in Abu Dhabi have enough work to finish for next 5 to 10 years rather than expanding into newer areas.

“Now with market being very tight and everyone conscious about cost efficiencies. Instead of opening new areas of venture, there is enough work in Abu Dhabi and surrounding areas for developers to finish the development for next 5-10 years.”

Mubadala is promoting four residential developments – Lamar at Al Raha Beach, The Wave and Al Durrah Tower on Al Reem Island, The Views at Saraya on the Corniche, and new developments on Al Maryah Island. However, Al Mheiri said projects other than Lamar were developed 3 to 4 years ago and part of existing stock.

“We target mid-income sgment through majority of our offerings. The Views is scaled towards high-end and Al Maryah Island is mixed between both,” he said.

Al Mheiri noted that developers have shifted focus from high-end user to low- and mid-income groups in past 3-5 years. “In the past, developers didn’t get the right mixture. If you look at demand in Abu Dhabi, high-end segment comprise 10 per cent of residential units and the majority are low- to mid-income group. Today, as there is so much pressure on pricing, there isn’t much difference between low- and mid-income groups. To me, the low-income group belongs to those who live in the shared accommodations. But with the current pricing in Abu Dhabi low and mid segments are already merged into one category.”

Al Mheiri said developers should attract buyers, who are mostly belong to mid-income group, with not just right price but amenities too.

“Today what differentiates developments is the kind of amenities you have within your building. The buyer or the tenant has lot of variety. One can live in Al Reem, Al Raha Beach, Downtown Abu Dhabi, Khalifa or Hamdan Street. One can rent a 1 BHK in Khalifa Street but get one for same price in Al Reem where you have amenities – grocery store, gym, coffee shops etc. This is what differentiates developments in Abu Dhabi,” Al Mheiri added.

Sheikh khAlifa amends Abu Dhabi real estate law

In his capacity as Ruler of Abu Dhabi, President His Highness Sheikh Khalifa bin Zayed Al Nahyan, has issued a law amending provisions of Law No. 19 of 2005 concerning real estate sector in Abu Dhabi.

The new law stipulates amendments to Articles 3 and 4 of the ‘Real Property Law’.

Article 3 (i) stipulates the rights to own property are limited to three categories the first being Emirati citizens, natural or legal persons, the second includes public holding companies with ownership not exceeding 49 per cent non-nationals, or the third as any person to whom a decision is issued by the Abu Dhabi Crown Prince or the President of the Executive Council. While Article 3 (ii) stipulates that non-UAE nationals, natural or legal persons, shall have the right to own and acquire all original and in-kind rights in real estate properties located within investment areas.

As for Article 4, the amendment stipulates that the holders of a ‘usufruct’ or ‘musataha’ for more than ten years shall have the right, without the consent of the landlord to dispose of the property, including the right of mortgage, however the landlord may not mortgage the property except with the consent of the usufruct or musataha holder. In both cases, the parties may agree otherwise.

His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, directed Sheikh Khalid bin Mohamed bin Zayed Al Nahyan, Chairman of the Executive Committee and Member of the Abu Dhabi Executive Council, to review the emirate’s real estate sector development in line with international trends and standards.

The Abu Dhabi Executive Committee raised a proposal to update the Real Property Law, following a study on the emirate’s real estate sector, and the holding of a series of meetings with stakeholders, investors and real estate developers, to identify means to develop the sector, and consolidate the status of Abu Dhabi as an investment destination.

Sheikh Khalid bin Mohamed said, “Updating the Real Property Law reflects the leadership’s support and vision to develop the emirate’s economy, with the guidance of His Higness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and monitoring of Sheikh Hazza bin Zayed Al Nahyan, Deputy Chairman of Abu Dhabi Executive Council, who have both stressed on the importance of updating legislation to accelerate economic growth and the development landscape of Abu Dhabi.”

Sheikh Mohamed also noted that the amendments will have a positive effect on the real estate sector, and will encourage investors to acquire land in designated investment zones within the Emirate of Abu Dhabi, with ample room for development opportunities.

 

Aldar properties’ Lea has sold out

Aldar Properties’ latest development, Lea, located on the northern shores of Yas Island has sold out during Cityscape Abu Dhabi generating over Dh400 million in sales.

Offering land plots starting at Dh990,000 and sizes ranging from 405sqm – 1,800sqm, and available for purchase by all nationalities, Lea features 238 residential plots in a prime location adjacent to Aldar’s flagship Yas Acres project. Lea boasts parks, promenades, and waterside walkways. In addition to this, residents benefit from all of the amenities within Yas Acres – parks, swimming pools, play areas, bbq and picnic areas, schools, mosques and the Yas Acres full length nine hole golf course.

This most recent sell out follows the successful launch of Alreeman, a land plot masterplan located close to Abu Dhabi Airport, which generated Dh1.6 billion in sales.

Talal Al Dhiyebi, chief executive officer, Aldar Properties, said: “Selling over Dh400 million of real estate is a ringing endorsement of what we do best – understanding what our customers need and then creating the right product to fulfill their requirements. We are off to a flying start this year, and we are seeing really strong demand for land opportunities within well though out, master planned communities. Generating over Dh2 billion from our two most recent developments – Al Reeman and Lea, shows how market sentiment is moving in a positive direction.”

Maan Al Awlaqi, executive director – Commercial, Aldar Properties, said: “We are delighted with the response we received for Lea from both investors and homeowners of various nationalities. This is further evidence of the strong demand for land plots, following our launch of Alreeman. This is also our first development launch since we opened our inaugural experience centre in Dubai earlier this year, and we are seeing how this new demand channel from further afield is being reflected in transactions.”

Non-oil sector key growth driver for UAE, GCC

The UAE and Gulf economies are expected to strengthen this year, helped by elevated levels of government spending, Dh50-billion stimulus plans, reform measures for ease doing of business in the UAE and higher oil production, said a new study released on Wednesday.

The Institute of Chartered Accountants in England and Wales’ (ICAEW) Economic Insight for Q1 2019 sees the UAE’s GDP to grow 2.2 per cent this year as compared to 1.9 per cent last year. But the real estate sector will remain weak and job creation to be modest.

“Both the oil and non-oil sectors are expected to be supportive of growth this year. The oil sector, which makes up around 30 per cent of GDP, is expected to grow by 2.5 per cent, while the non-oil sector is set to accelerate from an estimated 1.3 per cent in 2018 to 2.1 per cent in 2019,” said Michael Armstrong, director for the Middle East, Africa and South Asia (MEASA), at ICAEW.

According to the UAE Central Bank’s quarterly, the UAE’s GDP will expand 3.5 per cent in 2019 compared to 2.8 per cent in 2018, mainly due to a Dh50 billion stimulus package announced last year and host of measures taken for the ease of doing business in each emirate across the country.

The apex bank sees non-oil GDP growth will grow at 3.4 per cent in 2019 against 2.6 per cent last year while oil GDP will expand at 3.7 per cent this year versus 3 per cent.

“We expect large-scale projects in preparation for Expo 2020 and new visa rules to continue boosting tourist arrivals in UAE, helping Dubai to maintain its status as a major global tourist and FDI destination,” said Michael Armstrong.

The report expects GCC to post economic growth of 2.3 per cent in 2019, a marginal improvement on the previous year of 0.3 percentage points.

In the GCC region, the non-oil sector in the GCC is expected to be the primary engine of growth in 2019, which is as 3.1 per cent, said ICAEW’s Economic Insight report.

“This should be supported by higher government spending, notably in the UAE and Saudi Arabia, continued reforms and project spending like Qatar’s 2022 World Cup and the UAE’s Expo 2020, as well as stimulus plans geared to support the private sector,” the report said.

ICAEW sees 2.3 per cent GDP growth for the Gulf region for 2019 as compared to 2.0 per cent for 2018.

It noted that the GCC economy will be weighed down by renewed Opec-plus oil production cuts and lower oil prices, with the main source of growth coming from the non-oil sector.

The oil sector will also be dampened by lower prices, forecast at $64 a barrel in 2019, down by $7 a barrel from the average in 2018. The oil price trajectory suggests many GCC countries will struggle to balance their budgets in 2019, as the price needed to cover their expenses is well above the current forecast, notably in Bahrain and Saudi Arabia, which need average oil prices of $110 a barrel and $78 per barrel, respectively in 2019.

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