Deyaar plans to deliver five properties in Dubai's Business Bay in the first quarter of next year, the company said yesterday.
The five projects scheduled for delivery in the first quarter include Hamilton Residency, Mayfair Tower, Mayfair Residency, Metropolis offices and Clayton Residency. Handovers in the 16-storey Hamilton Residency should begin by Thursday, the company said.
The total sales value is Dh1.2 billion (US$326.7 million), but the company expects to receive only about Dh600m when the buildings are handed over, representing "50 per cent of the total sales value of the sold units", the company said.
The five projects include a total of 1,092 residential units, including 177 units in Hamilton, 218 units in Mayfair Tower, 213 units in Mayfair Residency, 320 units in Metropolis and 164 units in Clayton Residency.
The new towers will enter a market already saturated with residential units, said Billy Rautenbach, the managing director of the Property Store, an estate agent.
"There is a lot of competition there [in Business Bay]," said Ms Rautenbach. "It is a sought-after place and people want to live there, but only if rentals are low."
Selling units will be even more difficult in the current market, she said. "Nobody is buying unless they are selling at a really low cost," she said.
Deyaar will also face other obstacles in Business Bay. Much of the infrastructure still has not been completed. And once the buildings are handed over, the developer will be responsible for its share of the maintenance costs, under the new homeowners association laws.
"All these conditions are working against them," Ms Rautenbach said.
Deyaar officials could not be reached for comment.
The handover of the Business Bay projects will come at a key time for the company. In the third quarter, Deyaar reported a net loss of Dh145m on gross revenue of Dh63.45m. As of September 30, the company said its total equity was Dh6.23bn.
At the time the company said it remained committed to a "consolidation and project completion strategy, including the handover of five Deyaar projects in the Business Bay area in 2010".
Business Bay is an 8 million-square-foot development planned to include more than 200 towers and house more than 190,000 residents in a business district that promoters compare to Tokyo's Ginza district or Manhattan's Midtown.
But it has been slowed by market conditions and the financial woes of the master developer, Dubai Properties, a subsidiary of Dubai Holding.
The development is a key focus for Deyaar. Last month the company announced it had finished Windsor Manor, a 24-storey residential tower with 338 residential units in Business Bay.
At the time the company said about half of the units in the tower had been sold.
kbrass@thenational.ae
Company%20Profile
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Wicked
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COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
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From Zero
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Rating: 4/5
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Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
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About Okadoc
Date started: Okadoc, 2018
Founder/CEO: Fodhil Benturquia
Based: Dubai, UAE
Sector: Healthcare
Size: (employees/revenue) 40 staff; undisclosed revenues recording “double-digit” monthly growth
Funding stage: Series B fundraising round to conclude in February
Investors: Undisclosed
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Engine: 2.7-litre 4-cylinder Turbomax
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Indika
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COMPANY PROFILE
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COMPANY%20PROFILE
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
