Now officially the emirate’s largest free zone – with over 7,300 registered companies – DMCC have contracted Brookfield Multiplex to design and construct ‘One JLT’, a glass-box style building. On completion, this impressive world-class building will cover 23.4k sq mt and be located in the middle of the 65 mixed-use residential and commercial tower JLT development. Maybe it is not beyond the realms of possibility to visualise the world’s tallest tower being built there in the not too distant future.
One unnamed landlord is taking advantage of the current boom in real estate prices by releasing 300 apartments in JBR. With apartment prices in Shams 1 ranging from US$ 327k to US$ 872k – 34% up on last year – and a growing demand for beachfront property, these apartments will be sold quickly.
A few more than usual potential buyers will be trying to seal deals this week, with news that the property transfer fee is set to double to 4%, effective from 06 October. The reason for this surprise move is to curtail the practice of flipping which was prevalent in the halcyon days of 2008, resulting in an asset bubble that spectacularly burst bringing Dubai to its economic knees.
Yet another hotel is planned for the Dubai Marina area with the TAJ RP International Limited has signing an agreement with the Intercontinental Hotels Group. The 280-room property is slated for completion by 2016 and will be the fourth Crowne Plaza in Dubai.
As part of its US$ 409 million investment strategy, R Hotels is planning to open its second Dubai hotel, in JBR, in Q4 2013. The company has also reportedly started work on another property on Palm Jumeirah.
Meanwhile, the Palazzo Versace is now expected to open by the end of 2014 – five years later than originally planned. The US$ 626 million project is being developed by Enshaa Services Group that initially had a JV with the Australian-based Sunland Group. However, a 2011 swap deal saw Enshaa take 100% in exchange for the Versace Hotel on the Australian Gold Coast.
A recent survey shows that Dubai’s waterfront hotels had the best profitability rates in the Middle East. Occupancy rates have risen by 3.7% to 84.0% whilst ADR has surged 4.85% to a creditable US$ 389.00.
With Emirates planning to start phasing out their current fleet of 120 777s in 2017, Boeing are hoping that their largest customer will shortly place a new order for the new long-range 777-9X. Some expect a major announcement to be made at November’s Dubai Air Show – whether this will surpass the Emirates’ US$ 18 billion order last time round, two years ago, remains to be seen.
Within a year, Emirates SkyCargo will move its operations to the new terminal at Al Maktoum International Airport. On completion, the fully automated facility, at the world’s first purpose-built aerotropolis, will be able to handle up to 1 million tonnes of cargo.
Although year on year August monthly cargo figures actually contracted by 3.1% to 185k tonnes, YTD returns are 8.1% higher at 1.59 million tonnes. Passenger traffic for August was up by 23.8% to just shy of 6 million whilst YTD is 16.4% up at almost 44 million.
Another indicator of the confidence in the local economy is that 2013 vehicle sales are expected to top the all-time high of 346k units, reached in 2008.
It was no surprise to see Lindner Depa Interiors file a US$ 245 million arbitration claim against New Doha International Airport. The company – a JV between Germany’s Linder AG and Dubai’s Depa Limited – had its contract terminated in June for their refusal to accept new terms and conditions.
Despite the global slowdown in trade, the UAE continues to expand with 2012 imports of US$ 273.5 billion – accounting for 26.8% of all the region’s imports, of US$ 1,022 billion, and even surpassing Saudi Arabia with its US$ 211 billion total. However its exports of US$ 314 billion (or 21.7% of the total) were less than Saudi’s US$ 410 billion. The extent of the country’s impressive growth can be seen from the fact that over the past five years, exports have grown in excess of 27% annually and imports by 24%.
The Dubai Financial Market has had a turbulent September so far starting the month at 2523 points and closing on Thursday 8.5% up at 2737. However, the past four weeks have witnessed a 7.4% fall to 2337, followed by an 8.6 gain to 2538, a 5.0% rise to 2666 followed this week by a modest (by Dubai standards) increase of 2.7%.
Gold continues to lose its shine and is hovering around the US$1,320 per oz mark; it is already down 5% in September, 20% YTD and 25% over the past year. The fact that the Federal Reserve decided to maintain its US$ 85 billion monthly stimulus package has probably stopped the precious metal from testing the US$ 1,250 level or lower.
Next week, the USA will finally exceed its legal borrowing limit, set at US$ 16.7 trillion, and will balance on the edge of another financial cliff. If no further action is forthcoming, then the country will run out of cash by the end of October, resulting in cuts, job losses and potential loan defaults, with serious repercussions for the country’s economy. So much for the world’s leading democracy in action!
Whilst most of the global economies seem to be struggling, Dubai is still full steam ahead with a simple message – Don’t Stop Me Now!