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Old October 14th, 2008, 08:15 AM   #41
makerian
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Quote:
Originally Posted by Smokeey View Post
Dont know anything about Hydra Executive Towers but have you checked out Addax Tower? There are resales for commercial units going for as little as AED1800 with 30/70 payment plans, which I think is very good. Although I think its only leasehold and I'm not sure if its in a freezone, which could have a big effect on demand. Maybe someone with more knowledge than me will be able to confirm?
Dont know anything about Hydra Executive Towers but have you checked out Addax Tower? There are resales for commercial units going for as little as AED1800 with 30/70 payment plans, which I think is very good. Although I think its only leasehold and I'm not sure if its in a freezone, which could have a big effect on demand. Maybe someone with more knowledge than me will be able to confirm?[/QUOTE]

I don't believe there has been any information about Reem Island being a freezone. I think that has been only a Dubai special so far.

Docc, I haven't done extensive research on offices in Reem Island but I think that Addax will probably be a better investment if you planning on holding it till completion. I'm not a fan of Hydra. They've thrown out a lot of projects and I get skeptical when that happens (think Damac).

Also look at the offices in Sky Tower. They'll be expensive but its well under construction (look at the sky tower page) and it's Sorouh's first project which should to top notch. It'll also be an iconic structure within Reem Island and has the potential to achieve ridiculous prices relative to other projects, in the next wave of prices shooting up in AD (whenever that is). I'm very bullish on this project and own residential there.
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Old October 14th, 2008, 10:06 AM   #42
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I've seen Addax Port tower going for 1550 AED per Sq FT
Absolute bargain
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Old October 14th, 2008, 10:09 AM   #43
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I wouldn't touch Hydra with a barge pole, not after what happened with Hydra village
They seem more intent on marketing themselves with TV programmes and Football clubs etc than actually delivering a decent product!
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Old October 14th, 2008, 06:10 PM   #44
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Mortgage Financing

The banks have reduced loan to value ratio and thus the financing with most banks have dipped to between 60% to 85%. This is going to have a huge impact as the purchasing power of people would dip, unless people are sitting with at least 500,000 dirhams to put down. The potential of default is on the rise and Dubai's infusion of 70 million dirhams into the system is clear indication that market is lot serious that it seems.

Though the biggest advantage for UAE is that major developers are backed by government and the construction would be completed as planned. Hydra and Damac have certainly lost investor confidence and it is best to stay away from them till they provide more clarity.

As Government is well involved in every process, it could be a well planned strategy to reduce the number of low middle income earners and also to shift them towards Mussafah. I don't see rents coming down in the near future and rent freeze will not impact the market. I personally expect lot of defaults as the resale dips and there will be lesser takers of property in the market. The developers will continue to laugh their way into banks as they will get the 10% deposit and also the property.

These sure are times for informed investors, who do their homework and have a back up plan, if they fail to sell the property.

I certainly believe the landmark projects like Sun, Sky and Tameer will do well. Lot of other towers will struggle to command the premium as International investors will look at Michael Schumacher Tower and Sorouh projects, including Gate.

Another interesting aspect that emerged during cityscape was the towers launched with smaller agents struggled to sell at the launch price and dropped 20-25% below the price. Even after that the agent's are offering further discount. Even a tower like Empire Island is being sold since eternity, but is still in the market. On the other hand Sky was sold out, even though it has more apartments than Empire.

Last edited by whizkid01; October 15th, 2008 at 06:37 AM.
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Old October 14th, 2008, 08:22 PM   #45
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The banks have reduced loan to value ratio and thus the financing with most banks have dipped to between 60% to 85%. This is going to have a huge impact as the purchasing power of people would dip,

These sure are times for informed investors, who do their homework and have a back up plan, if they fail to sell the property.

I certainly believe the landmark projects like Sun, Sky and Tameer will do well. Lot of other towers will struggle to command the premium as International investors will look at Michael Schumacher Tower and Sorouh projects, including Gate.
Good points whizkid
We definitely have some softening in the off-plan market including premium projects like Sky. I know for a fact that this Tower traded at 2200+ in July and now you could get it for 2000 like you pointed out.
I think that if this softening continues, it'll be a great opportunity to buy in the landmark projects in AD
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Old October 14th, 2008, 10:58 PM   #46
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Quote:
Originally Posted by whizkid01 View Post
The banks have reduced loan to value ratio and thus the financing with most banks have dipped to between 60% to 85%. This is going to have a huge impact as the purchasing power of people would dip, unless people are sitting with at least 500,000 dirhams to put down. The potential of default is on the rise and Dubai's infusion of 70 million dirhams into the system is clear indication that market is lot serious that it seems.

Though the biggest advantage for UAE is that major developers are backed by government and the construction would be completed as planned. Hydra and Damac have certainly lost investor confidence and it is best to stay away from them till they provide more clarity.

As Government is well involved in every process, it could be a well planned strategy to reduce the number of low middle income earners and also to shift them towards Mussafah. I don't see rents coming down in the near future and rent freeze will not impact the market. I personally expect lot of defaults as the resale dips and there will be lesser takers of property in the market. The developers will continue to laugh their way into banks as they will get the 10% deposit and also the property.

These sure are times for informed investors, who do their homework and have a back up plan, if they fail to sell the property.

I certainly believe the landmark projects like Sun, Sky and Tameer will do well. Lot of other towers will struggle to command the premium as International investors will look at Michael Schumacher Tower and Sorouh projects, including Gate.

Another interesting aspect that emerged during cityscape was the towers launched with smaller agents struggled to sell at the launch price and dropped 20-25% below the price. Even after that they agent's are offering further discount. Even a tower like Empire Island is being sold since eternity, but is still in the market. On the other hand Sky was sold out, even though it has more apartments than Empire.
How difficult is it for non-UAE residents to qualify for financing for studios, 1br in Reem Island?
Which banks provide financing, and what percentage, also is it based on historic or actual values?
I am interested in purchasing a studio or 1br in an iconic tower on the island... which will be completed within the next 2yrs approximately.

Thanks.
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Old October 14th, 2008, 11:27 PM   #47
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I think that the Sky tower is a great one. Is it freehold? And are resales at good prices available?

Thanks
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Old October 15th, 2008, 01:02 AM   #48
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Quote:
Originally Posted by Palm-Host View Post
I've seen Addax Port tower going for 1550 AED per Sq FT
Absolute bargain
Where did you see that? I saw Addax offices today for 1570psf in Gulf News but that was for 5 units in bulk only and seller wouldn't split them
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Old October 15th, 2008, 06:52 AM   #49
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Nothing in Abu Dhabi is freehold yet. There have been talks, but nothing has been announced. Everything is available at 50 years lease, extendable to 49 years. Personally I am investing in UK now as I follow a simple investment principle, invest when the market is down rather than when you feel its peaking. I see this as an opportunity to exit the market and take my profits else where.

Abu Dhabi seems to be peaking currently and I see a fair amount of desperate sales creeping into the market. If you get in landmark projects at anything below 1,800, its an opportunity not to be missed. Just for the information, there were a few sellers who sold Sky Towers at 1,400/sq/ft. in Sept. I just missed it at that price and still miss a few minutes sleep every night.

As for financing, it is more difficult for residents not staying in UAE. Though, on the whole you would be lucky to get a loan above 70%. I had a long session with most of the banks yesterday and my question was simple.
Do you not see the value at that price? They didn't have an answer, but the look in their eyes said it all. The bank's decision has got me worried about the health of the market.

My other concern that has started to build is rising rents which are forcing people to return back or even decide against coming here. Thus, the quality of people coming here would get lesser and lesser. Currently the population numbers look good, but if you divide them, it shows that about 52% are labourers. Another 17% are below AED 5,000 / month. Certainly I am only looking at expats. The major investments in UAE has been by GCC, followed by Indians, British and Australian. I see lesser investments from GCC and Indians in particular as their home markets are looking more attractive than ever before.

Wish I had magic wand to see the future, but only time will tell whether I was right in exiting Abu Dhabi and investing in good projects in Europe, where I can get rent from the 1st month itself.
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Old October 15th, 2008, 09:57 AM   #50
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Quote:
Originally Posted by whizkid01 View Post
Nothing in Abu Dhabi is freehold yet. There have been talks, but nothing has been announced.
Contracts issued by Sorouh for Sky were initially Leasehold and then converted to Freehold. Tala Tower was also marketed by Sorouh as Freehold.

Too bad you missed sky at that prices. Would have been a steal.

Last edited by makerian; October 15th, 2008 at 07:14 PM.
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Old October 15th, 2008, 10:12 AM   #51
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Yup, They were converted to leasehold, but might get converted again to freehold. I presume, that's what you meant.
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Old October 15th, 2008, 04:02 PM   #52
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Yup, They were converted to leasehold, but might get converted again to freehold. I presume, that's what you meant.
I am pretty sure that Tameer Towers for example is freehold... right?
My understanding is that everything inside of Reem Island is freehold
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Old October 15th, 2008, 04:03 PM   #53
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Originally Posted by whizkid01 View Post
Nothing in Abu Dhabi is freehold yet. There have been talks, but nothing has been announced. Everything is available at 50 years lease, extendable to 49 years. Personally I am investing in UK now as I follow a simple investment principle, invest when the market is down rather than when you feel its peaking. I see this as an opportunity to exit the market and take my profits else where.

Abu Dhabi seems to be peaking currently and I see a fair amount of desperate sales creeping into the market. If you get in landmark projects at anything below 1,800, its an opportunity not to be missed. Just for the information, there were a few sellers who sold Sky Towers at 1,400/sq/ft. in Sept. I just missed it at that price and still miss a few minutes sleep every night.

As for financing, it is more difficult for residents not staying in UAE. Though, on the whole you would be lucky to get a loan above 70%. I had a long session with most of the banks yesterday and my question was simple.
Do you not see the value at that price? They didn't have an answer, but the look in their eyes said it all. The bank's decision has got me worried about the health of the market.

My other concern that has started to build is rising rents which are forcing people to return back or even decide against coming here. Thus, the quality of people coming here would get lesser and lesser. Currently the population numbers look good, but if you divide them, it shows that about 52% are labourers. Another 17% are below AED 5,000 / month. Certainly I am only looking at expats. The major investments in UAE has been by GCC, followed by Indians, British and Australian. I see lesser investments from GCC and Indians in particular as their home markets are looking more attractive than ever before.

Wish I had magic wand to see the future, but only time will tell whether I was right in exiting Abu Dhabi and investing in good projects in Europe, where I can get rent from the 1st month itself.
Thanks for insight. I guess one shouldnt depend on local UAE banks in that case...Too bad you missed sky... would indeed have been a steal.
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Old October 15th, 2008, 06:00 PM   #54
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I am pretty sure that Tameer Towers for example is freehold... right?
My understanding is that everything inside of Reem Island is freehold
Nope, as per my knowledge its all lease hold. I have seen the contracts and they clearly state that they are leasehold. Its certainly being proposed and from what I have heard, they might do a few towers, but there is no clarity yet. Though, laws can change here by the hour, thus never be assured of anything till Petro dollars rule.
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Old October 15th, 2008, 07:22 PM   #55
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Yup, They were converted to leasehold, but might get converted again to freehold. I presume, that's what you meant.
Sorry, I meant that they were leasehold initially and then they were converted to freehold. But let's expand on that.

The contract (PSA) states that the Seller (Sorouh) has freehold title to the land and has agreed to sell to the Buyer the unit. Apart from this the contract does not mention freehold or leasehold.

Sorouh however is calling this a freehold contract.
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Old October 16th, 2008, 09:15 AM   #56
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that's the problem. bad communication starting from the top of the food chain
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in the land of the blind the one eyed man is king
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Old October 19th, 2008, 07:11 AM   #57
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This is from Sorouh "Currently it is a 99-year lease. We have the freehold drafts ready but we are still waiting for the Authorities of Abu Dhabi to give us the go ahead."

There is no update after this. I do expect some measures in the next couple of months. I presume the market has slowed down considerably as expected. Its the best time to look out for distressed sales as people would want to exit at times because of lack of funds and also because of some panic setting in.

Apparently some of the developers are down sizing and others have slowed on their recuirtment. I just hope the projects are not too far delayed because of this and Sorouh and Tamouh insure that projects are not delayed by more than 6 months.

I just hope that government does something to control rent, which will ensure that economic growth is not slowed. If its not, I expect Abu Dhabi to slow down on recuritment and thus the population will not grow as exoected by 2013 and henceforth.
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Old October 21st, 2008, 06:31 PM   #58
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Some interesting facts: -

1) Major banks will fund Sorouh and Aldar projects, thus for rest of the projects it would get tougher to get mortgage.

2) Majority of the teachers have turned down jobs. It would be interesting to see who would teach the Abu Dhabi kids.

3) Most of the debt raised will not be renewed by foreign banks, thus the sub developers on Shams would have an interesting time completing projects, if they have not secured the financing already. (hmmm ... completing projects, they need to start first ... ooops)

4) People who bought properties above AED 2,000/sq.ft. are now selling at 0% premium and still struggling to sell.

5) Off plan properties would get tougher to sell now. Expats have been knocked out by rising rents and thus the spare cash is missing to pick properties for actually staying there.

6) Plan 2030 could change drastically, if the rents are not controlled.

7) Its possible to get properties in Europe and USA with 8% to 9% yields. Thus, why invest in Abu Dhabi where there is no gurantee of projects completing. Hydra Village a prime example of how developers can change specs even after they have sold. Anywhere else in the world, the developer would have been sued.

8) Dubai has more debt than its GDP. If the defaults start to creep in ... will Abu Dhabi bail out Dubai or maybe buy it out. Next six months would provide us with the answer.

9) Its positive to note though, that short term lending rates have eased. This should help liquidity in the market. Hopefully it will allow the mortgage to pick up again.

10) The impact of various banks merging has still not been felt in UAE. This will be felt though in coming months, thus expect the prices to drop further. I am keeping a close eye, if there might be a distress sale at negative premium in Abu Dhabi.

11) Massive job cuts in the West would bring talent at cheaper price to UAE. It will be interesting to see if companies actually use this opportunity to get rid of some of the existing staff at higher cost to get better talent at cheaper price. Hold on to your horses tightly.

Hope to get others thoughts on this.
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Old October 22nd, 2008, 07:03 PM   #59
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Not sure if these are facts, more "crystal ball" predictions, but they are in line with current view on the situation. Do not forget, 6 Months ago, people were predicting a complete other view, so who knows, in 6 Months time, your list of "facts" might have changed again. So, unless we get access to real information (like how many villas and apartments are really get sold, off-plan and re-sale) this "crystal ball" excersize is just fun, but not much value.
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Old October 22nd, 2008, 09:14 PM   #60
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Not sure if these are facts, more "crystal ball" predictions, but they are in line with current view on the situation. Do not forget, 6 Months ago, people were predicting a complete other view, so who knows, in 6 Months time, your list of "facts" might have changed again. So, unless we get access to real information (like how many villas and apartments are really get sold, off-plan and re-sale) this "crystal ball" excersize is just fun, but not much value.
Most of these facts, but I would clarify further. In addition, most of my friends including me exited the Abu Dhabi market a good time ago with good returns and investing heavily in UK market as there are some great properties giving 9% to 11% yield. We are also now buying shares in Abu Dhabi and Dubai stock markets, but slowly. We are a bunch of guys from various nationalities using the reach to grow our company. Last 4 years we have grown at 200%. I am not using this to prove my point, but just want to advise everybody. Enter when markets are down and exit when it starts to run too fast.

Facts - Points 1 to 5.

Point 6 - I know for sure though, that government is working on various steps to address rising rent and ensuring that population numbers are not impacted.

Point 8 - A fact. Some people are mentioning up to 5 times the GDP, but the numbers that I have show 1.2 times the GDP.

Point 9, 10 and 11 are facts and logic.

Will we enter property market. Off course, but if you get rent yielding properties in UK, would you buy in UAE. A simple question with a simple answer. Also read the article published by Warren Buffet. He is shifting his investments to US in rock solid companies.

Another fact, people who bought properties do not have funds secured to give the next payments, which is above 15%. As the financing is tougher now, the impact is very clear and obvious. Hopefully we could create Berkshire Hathway over time by investing across nations by bringing in professionals from various nations as partners. Talk about wishful thinking, but then dreams are made into realities the same way.
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