If you thought Dubai property was expensive (at US$ 6,653 per sq mt), then consider Monaco where prices are seven times higher, according to global property firm Savills. On average, the emirate’s villa prices have surged 94% in the past decade but there is a wide variance between locations including Jumeirah Palm and Emirates Hills both up 238% and 45% respectively, whilst Burj Khalifa has seen prices off by 12% since its 2010 opening. The report indicates that Dubai is the tenth most expensive city, with Hong Kong, Tokyo, London and New York joining the principality in the top five locations.
Much of the same from the latest Asteco property report indicating that average apartment rentals fell 3% in Q1 and are 8% lower over the past twelve months; however, the upper end of the market suffered as exemplified by Palm Jumeirah where rents have fallen 7% last quarter and 14% since April 2016. The company estimates that 3.6k new apartments have been added in Q1, with the annual figure by December to reach 17k. Average villa rentals followed the same path as apartments, with the consultancy expecting 4k new villas to be handed over in 2017. Sale prices in both villas and apartments were lower – both down 1% in Q1, with villas flat for the year whilst apartment prices dipped by 3%.
According to Reidin-GCP, there has been a 20% increase in the number of ready units being sold in the first four months of 2017, as numbers reach 4.33k. The main locations with impressive growth numbers were Discovery Gardens up 72% to 244 and Jumeirah Palm 58% higher at 196 homes.
With the Mandarin Oriental Jumeirah Beach due to open late next year, the hotel group will have a second property ready for Expo 2020. Located in Downtown, and also owned and developed by wasl Asset Management, the 257-key hotel will anchor a 63-storey new-build mixed-use building on SZR. There will also be 144 ‘Residences at Mandarin Oriental’ on the tower’s upper floors.
Hilton has signed an agreement with Nakheel to manage two new properties under its DoubleTree by Hilton brand – a 254-key hotel in Jumeirah Village Triangle and a twin tower complex, with 250 hotel rooms and 200 serviced apartments, on Deira Islands.
This week witnessed Dubai’s biggest residential land sale, for the year so far, as Falcon Group chairman, Kamel Al Zarka sold a plot in Meydan for US$ 16 million. The unnamed Emirati buyer is planning to build three family custom-designed mansions on the 120k sq ft site.
“Dubai Font” has been created making the emirate the first location in the world for a Microsoft font to be named after it. The development includes 23 languages and helps to combine both Arabic and Latin scripts seamlessly. All government agencies will be encouraged to use the new font whenever practicable.
Noting that the country is currently well served when it comes to both military and economic power, HH Sheikh Mohammed bin Rashid Al Maktoum has now launched the UAE Soft Power Council, reporting directly to the federal cabinet. The development of soft power strategy will cover various sectors including cultural, humanitarian, scientific and technology, with the aim of enhancing UAE’s position and reputation on the global stage.
Although marginally lower, April’s UAE Purchasing Managers’ Index still provided comforting reading as growth in new orders and output helped the index reach 56.1 – just one notch lower than the March return which was then at a 19-month high. The only drag factors appear to be a tepid environment for new jobs and higher market prices. The non-oil sector is performing better than expected and it is hoped that this recent momentum can be carried forward into the summer months.
Following a decrease in April, UAE pump prices headed north again for May. Special 95 will now retail at US$ 0.518 per litre – up 3.3% on the month – as diesel nudges 1.0% higher to US$ 0.531.
The DIFC had a strong 2016 with increases in three main indicators – gross operating profit, 4% higher at US$ 149 million, employment 9% up at 21.6k and the number of registered entities increasing by 13% to 1.65k. Occupancy figures in the investment park topped an impressive 98%.
Deyaar posted a 37.3% slump in Q1 profits to US$ 9 million, despite revenue surging 137% to US$ 39 million, driven by strong figures from its The Atria and Mont Rose projects.
Arabtec Holding has approved the launch of a US$ 409 million rights issue – at US$ 0.272 per share – with the subscription date of 28 May 2017; this will increase the developer’s capital from US$ 1.26 billion to US$ 1.67 billion which will dilute non-participating shares by up to 24.53%. However, there was some good news of sorts for investors as it turned in its first quarterly profit – since Q3 2014 – posting a US$ 5 million surplus on an 11% hike in revenue to US$ 599 million.
Marka shareholders have agreed to sell their 60% stake in Cheeky Monkeys, a local children’s indoor play area operator. The loss-making Dubai-listed retail company acquired its share for US$ 8 million in April 2015.
With trading stopped on Thursday before resuming on Sunday, Union Properties have voted in a new chairman, Nasser Butti Umar bin Yousuf, and vice-chairman, Hamad Abdulla Mohamed Abdulla Al Mass, replacing Khalid Jassim Bin Kalban and Mohamed Saif Darwish Ahmed Al Ketbi.
Although Q1 revenue was 6.8% higher at US$ 300 million, Aramex posted a 5.3% fall in profit to US$ 24 million, driven lower by an 8.5% hike in the value of the provision related to the company’s incentive scheme; this reduced the logistics firm’s profit by US$ 4 million.
The DFM opened Sunday at 3417 and, having shed 110 points over the previous fortnight, traded flat this week – gaining 3 points – to end on Thursday (04 May) at 3420. Volumes nudged higher, closing on Thursday at 308 million shares, valued at US$ 121 million, (cf 256 million shares for US$ 94 million, the previous Thursday). Emaar Properties gained US$ 0.02 to US$ 1.98, whilst struggling Arabtec closed US$ 0.01 lower at US$ 0.23. For the month, the index fell 1.9% from its April opening of 3480 to close on Sunday (30 April) at 3415. Emaar Properties slipped US$ 0.03 to US$ 1.98, whilst Arabtec’s demise continued, down 4.4% to US$ 0.23.
By Thursday, Brent Crude, having lost almost 8% the previous fortnight, tanked again this week losing 6.0% (US$ 3.08) to close on US$ 48.38, with gold also lower (US$ 37) at US$ 1,229 by 04 May 2017. For the month, Brent shed 2.8% (US$ 1.48), whilst gold ended April US$ 16 higher at US$ 1,268.
The oil prices are at a five-month low driven by the fact that the US has seen production levels rise 10%, pumping out 9.3 million bpd, and this despite the November oil quota cut of 1.8 million bpd largely holding.
BP has managed to turn around a US$ 485 million loss last year to a Q1 profit of US$ 1.1 billion, on the replacement cost measure, driven by oil price rises. At the same time, operating cash flow was up to US$ 4.4 billion, compared to US$ 3.0 billion a year earlier. Royal Dutch Shell also had impressive quarterly returns with profits, on a current cost of supply measure, more than trebling to US$ 3.4 billion (from US$ 1.0 billion a year earlier). Other majors – including Chevron, Exxon and Total – have reported better than expected results, helped by oil prices plateauing in the mid-US$ 50s range for most of the quarter. It will be interesting to see Q2 results with the recent fall in prices.
Alitalia is set to close down after employees rejected a fresh round of job and wage cuts. The troubled Italian flagship airline, 49% owned by Etihad, was privatised in 2008 and since then has racked up losses of over US$ 980 million; furthermore, it has never made a profit since 2002! The only government assistance could be a short-term bridging loan of up to US$ 200 million to keep the airline running in the forlorn hope of a possible external buyer.
Barclays surprised the market by a bigger than expected Q1 profit, up 121% to US$ 2.1 billion – and this despite a one – off goodwill impairment charge of US$ 1.1 billion on the bank’s stake in Barclays Africa Group.
Europe’s biggest bank, HSBC, posted an 18.0% fall in Q1 profit to 5.0 billion, as revenue dipped 13% to US$ 13.0 billion.
Even RBS returned a Q1 pre-tax profit of US$ 326 million (compared to a US$ 1.2 billion deficit in the same period last year). However, its total losses, since the 2008 government bailout, stand at US$ 73.1 billion, including US$ 8.8 billion last year.
ANZ posted a 23% increase in H1 cash profits to US$ 2.62 billion, with NAB reporting a 2.3% profit improvement to US$ 2.54 billion, driven lower by its bad debt impairment costs rising 5.1% to US$ 300 million. Australian banks are considered by some to be the most profitable in the world when measured by their profit share as a percentage of GDP. This is estimated at 2.9% with China (2.8%) and Sweden (2.6%) close behind but well ahead of the likes of the US – 1.9% – and the UK’s 0.9%.
Apple posted a 4.9% increase in Q1 profit to US$ 11.0 billion in line with a 4.6% rise in revenue to US$ 52.9 billion. Its i-Phone sales dipped to 50.8 million units and weaker sales of iPads and Mac computers were reported; revenue from other products such as AirPods wireless ear pieces and Apple Watch posted a 31% jump. Amazingly, the company now has a record level of cash holdings at US$ 256.8 billion.
With Q1 revenue increasing by 49% to US$ 8.03 billion, Facebook posted an impressive 76% surge in profit to US$ 3.06 billion, as user number jumped 17% to reach 1.94 billion. There were warnings that there will be increased pressure on future profit as the revenue stream may slow and expenses will rise.
In Q1, Adidas posted a 16% jump in revenue, as its profit climbed 30.0% to US$ 480 million. With global unit sales up 31%, it has completely outpaced its rival, Nike who managed only a 3% quarterly improvement.
IATA announced that March global air freight (measured by freight tonne kilometres) was 14.0% higher, year on year, as ME carriers posted a 16.4% hike – a sure sign that global trade is on the upturn. Q1 freight capacity rose by 3.7% as demand rose at a quicker pace of 11.0%. On the back of lower fares and an improving economic environment, global demand for air travel has shown a 6.8% quarterly improvement; however this figure for the ME came in lower at 4.9%.
Driven by upsurges in both purchasing activity and new export orders, Japan’s manufacturing PMI continued its upward trend in April – up 3 notches to 52.7. Further to a 20.3% March increase, April saw another impressive jump in Japan’s monetary base up 19.8% year on year to US$ 4.1 trillion.
Although still heading north, China’s PMI dipped six notches in April to 51.2 indicating a slower pace than in the previous month. The country’s GDP growth has shown improvement in Q1, driven by a rebound in retail spending.
As widely expected, the Federal Reserve maintained its benchmark interest rate at 0.75% – 1.0%, with a distinct possibility of a further hike before summer despite recent economic data. There have been two 0.25% rate rises in the past six months with a further two possible before the end of 2017. The Committee expects the recent economic growth to continue as the labour market improves and inflation settles around the 2% target level. Latest economic data shows a tightening of the labour market, with unemployment levels hitting 17-year lows; on the flip side, productivity levels continue to disappoint, with only a 0.6% annual average hike over the past five years.
Prime Minister, Alexis Tsipras, is keen to ensure a speedy end to the deal that will see Greece receive more funds from its US$ 94 billion IMF/EU rescue package. Negotiations are continuing over the country’s post-bailout targets with Greece, not surprisingly, indicating that it has already carried out all its commitments and are waiting for the other parties to move at a quicker pace.
Eurozone’s factory PMI grew at its fastest pace in six years as April data came in five notches, month on month, to 56.7 which equates to an annual rate in excess of 4.0%. Individual countries within the bloc recorded different results – Germany was actually down one point to 58.2 whilst France and Italy both improved by 1.8 to 55.1 and by 0.5 to 56.2 respectively.
The UK’s Markit/CIPS PMI posted a 3.1 jump to 57.3 in April – a sure indicator that the country’s manufacturing sector is weathering the post-Brexit storm. There is no doubt that the fall in sterling has helped, especially with exports, but it has had a negative impact on consumer confidence, as imported goods become more expensive, and ramps up inflation just as wage growth is flat. Whether the improvement in the global economy and the UK’s export competitiveness are enough to stimulate the country’s growth remains to be seen, at a time when Q1 growth fell from 0.7% to a disappointing 0.3% quarter on quarter, driven by weak retail sales figures. Meanwhile, the PMI for the services sector, which accounts for 75% of the UK economy, rose to 55.8
In November 2012, the 34-storey Tamweel Tower was damaged by a fire and it took until June 2016 for repair work to be completed. At the end of last year, Dubai Civil Defense requested incorporation of updated safety measures prior to granting a completion certificate. This has now been reportedly carried out and the official document has been handed over to the DCD. Now it seems that approvals are required from DMCC and Dubai Municipality before residents can return. Not before time, but Welcome Home!