After last week’s announcement it was to invest US$ 8.2 billion on local real estate, Majid Al Futtaim Properties has confirmed that part of the money would be spent on a mixed-use development, adjacent to Global Village. Encompassing 750k sq mt, the project will include 2k residential units, a 1.2 million sq ft regional mall and hotels.
The Ramada Hotel, built in 1982 and famous for its 41mt high and 9 mt wide stained glass mural, is to be demolished, to be replaced by a 5-star hotel along with a mall and residences. What will happen to the world’s tallest stained glass structure, designed by John Lawson, remains to be seen.
It is reported that The Corintha at Meydan Beach, adjacent to the Hilton JBR, will open in 2019. The 55-storey tower, designed by the American firm AE7, will house 300 keys and 60 luxury apartments.
As the result of the success of phase 1 – with all 100 apartments selling out the same day – Dubai Properties has brought forward the immediate launch of the second phase of its Bellevue Towers development in Business Bay. The project is slated for a 2019 completion.
Union Properties has secured financing of US$ 79 million to help with the construction of its US$ 123 million Oia Residence in MotorCity. The main construction contract, for the building of 271 residential units, was awarded last month to China State Construction Engineering Corporation Middle East; completion date is set for late 2017.
The Sheikh Zayed Housing Programme has signed a US$ 53 million contract with Dubco Construction for its159-villa complex in Al Qoz. Work at the 900k sq mt site has already started and is expected to take 20 months until handover.
It has been confirmed that the upcoming US$ 1 billion, Santiago Calatrava-designed The Tower at Dubai Creek Harbour will be at least 100 mt higher than the 828 mt Burj Khalifa. It will comprise both residential and leisure facilities, as well as observation decks, but most of the structure will be as a traditional tower. It will be the focal point of the 6 sq km Dubai Creek Harbour, located near to the Ras Al Khor National Wildlife Sanctuary, and will be completed before the start of Expo 2020.
Damac has launched a 60-strorey residential tower in its US$ 1.3 billion Aykon City development, near to Dubai Canal. Starting prices for apartments, which go on sale this Saturday, will be at US$ 463k, with a 2021 completion date. (The property developer announced a 14.6% fall in Q1 profit to US$ 286 million, as revenue sank 33.3% to US$ 441 million).
With the sell-out of its latest project – the US$ 82 million 418 apartment Glamz – Danube Properties has now sold its entire six-project stock, totalling US$ 490 million. The company expects to launch a further two developments this year.
As the US$ 163 million Jumeirah 1-located Union Museum takes shape, approval has been given for specified permanent collections. The facility, operated by Dubai Culture and Arts Authority, will relate the story of the country’s history and development and will also restore the Union House to its original state.
Although occupancy rates are among the highest in the world, at 87%, Dubai YTD hotel rates and revenue continue to head southwards; average room rates have fallen by 9.6% and RevPAR (revenue per available room) is down 10.5% to US$ 258. Although TrevPAR has slowed at a lower rate, 6.6%, profit per room for the first 4 months has fallen 11.4%.
The new US$ 572 million Abu Dhabi – Dubai motorway is due for completion by the end of the year. The 4-lane, 62km highway – an option to the busy E11 – will ease congestion between the cities and will have a capacity of 8k vehicles an hour.
The country’s largest Sharia-compliant lender, Dubai Islamic Bank, will have a US$ 861 million rights issue opening next week, as it seeks to expand its capital base. The 988.4 million shares on offer are priced at US$ 0.87 – on Thursday, the share closed the week on US$ 1.39.
DP World has won a 50-year concession to develop a new Ecuadorian port project in Posorja. 50% of the US$ 1 billion investment will be spent on phase 1, including land purchase, channel dredging and infrastructure over the next two years. The Dubai port operator already has a South American presence in Argentina, Brazil, Peru and Suriname. Indeed it is also planning to expand its port and cruise operations in Buenos Aires which has a capacity of 600 TEUs and 300k passengers. Over the past 20 years, DP World has invested US$ 250 million.
IBM has signed a 10-year, US$ 300 million contract with Emirates to fully manage the airline’s IBM mainframe and storage. Since the airline’s inception, its ticketing and reservations system has been IBM-related.
DEWA has awarded a contract to China’s Harbin Electric and Saudi Arabia’s ACWA Power to build and operate a 1.2k MW clean coal power plant. This development is the first phase of the authority’s US$ 1.8 billion Hassyan project and should be on line by 2023. DEWEA will maintain a 51% share in the new arrangement.
Dubai Investments, in partnership with Al Mal Capital, is planning to invest 10% seed capital in each of two funds, targeting the burgeoning healthcare and education sectors. Both funds will be in the region of US$ 272 million each, with an expected 8% cash yield.
There was a welcome improvement in the UAE’s PMI reading with a monthly rise in May from 52.8 to 54.0, mainly driven by the output index posting 59.9. The good news was somewhat offset by the jobs growth reading of 50.4 – slightly above the neutral point of 50.0 – and weaker purchasing activity. However, the country’s non-oil private sector is moving in the right direct, albeit at a slow rate.
HE Mubarak Rashid Al Mansouri, the UAE Central Bank governor, indicated that the dollar peg (at Dhs 3.6725) would be maintained and any US rate hikes would be mirrored in the local banking sector. He also considered that recent volatility in the market had been contained and the sector is improving, following a difficult Q1.
The DFM opened on Sunday at 3263 and returned to positive territory, with a 3.3% increase in thin trading to close on 3371 by Thursday (09 June 2016). Trading volumes on Thursday were at 410 million shares, valued at US$ 158 million, changing hands, (cf 446 million shares for US$ 114 million, the previous Thursday). Bellwether stocks, Emaar Properties and Arabtec, both moved up -by US$ 0.08 to US$ 1.76 and US$ 0.02 to US$ 0.39 respectively.
Brent crude sailed past the US$ 50 mark – up US$ 2.78 to US$ 51.95, whilst gold continued returned to positive territory – up US$ 60 to US$ 1,273 by the Thursday (09 June 2016) close. It is to be noted here that this blog had forecast at the beginning of the year that Brent would be at US$ 52 by June!
Over the next five years, Kuwait is planning to invest US$ 115 billion in oil projects, US$ 30 billion of which will be for three downstream ventures. The aim of the exercise is to lift production capacity by 33% to 4 million bpd by 2020. Meanwhile, Saudi Arabia reports that it has maintained its capacity at 12 million bpd, despite the low oil prices. Last year, the Kingdom pumped an average 10.2 million bpd – a record – with almost 70% destined for the export market.
According to Airbus, only 319 A380s have been ordered, with Emirates its largest customer by far, with a total of 142. The main worry for the local airline is that the French plane-maker may pull the jumbo and concentrate on its more saleable product lines such as the A320. Sales of the 380 have been disappointing, as many large airlines have only bought relatively low numbers, and any chance of the A380Neo being brought on line is remote.
It has been confirmed that BHS will disappear from the UK’s high street resulting in the loss of 11k jobs and the closure of 163 shops. The former retail giant fell into administration in April with a pension black hole of US$ 830 million. Former owner, Sir Philip Green, is facing mounting criticism for his role in selling the company last year to little-known consortium Retail Acquisitions, whose Dominic Chappell had a history of bankruptcy and little retail experience.
Johnson and Johnson has acquired private hair care company Vogue International for a reported US$ 3.3 billion. The US company has markets in its home country and 38 others.
New York-based Ralph Lauren is planning to close 50 of its global stores (10% of its total outlets) and retrench 6.7% of its 15k staff in a bid to cut costs by US$ 180 million. The fashion house is to concentrate on its three main lines – Ralph Lauren, Lauren and Polo – and will overhaul its production processes. Over the past year, its shares have fallen by 30%.
It was no surprise to see that the World Bank has done what it is good at – amending yet again its global growth forecast to 2.4%, compared to its 2.9% January prediction. Both eurozone (at 1.6%) and China (6.7%) remain the same but the US sees its growth cut to 1.9% – from 2.4% – whilst Japan is slashed from 1.3% to 0.5%.
The US Labor Department reported the worst employment figures in almost six years, with only 38k new jobs recorded in May, as the jobless rate fell to 4.7%; this was due to people dropping out of the labour force and no longer considered “unemployed”. This will inevitably lead to the Fed Reserve putting any interest rate on hold until at least September.
Recent blogs have highlighted the problems that local financial institutions have been facing with regard to non-performing loans. In the same vein, Australian banks have suffered because of their over exposure in the commodity sector, whilst the US has still not seen the full impact of the fracking slowdown and the inevitable write down of US$ billions. Now the OECD has put the spotlight on the growing problem of bad debts in the eurozone and the high level of debt.
Moody’s has warned Australia of its growing government debt, which it is set to rise to US$ 443 billion from just US$ 37 billion in 2008. The country – one of only ten in the world with a AAA credit rating – is set to see a widening deficit as Treasurer Scott Morrison is keen to introduce up to US$ 40 billion in tax cuts over the coming years and any spending cuts, particularly with regard to welfare, will be modest. Whichever party wins the 02 July election will have to bite the bullet and start to rein in public spending.
South Africa just managed to hold on to its investment grade credit rating, BBB-, but is still on negative outlook by S&P. Any fall would see the country given junk bond status that, in turn, makes borrowing more expensive. This would be a blow for an economy that has a budget deficit of 3.2% to GDP and has seen growth fall from 1.3% last year to 0.7%.
With Saturday’s death of Muhammad Ali, the world lost a true champion. The following is a snippet from a 1974 David Frost interview and what an epitaph 42 years later.
David Frost: What would you like people to think about you when you’ve gone?
Muhammad Ali: I’d like for them to say:
He took a few cups of love.
He took one tablespoon of patience,
One teaspoon of generosity,
One pint of kindness.
He took one quart of laughter,
One pinch of concern.
And then, he mixed willingness with happiness.
He added lots of faith,
And he stirred it up well.
Then he spread it over a span of a lifetime,
And he served it to each and every deserving person he met.
Speaking Words Of Wisdom, Let It Be!