The Dubai Land Department has sold eight foreclosed properties at auction in the first bulk sale of repossessed homes in the emirate.
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The sale may clear the way for lenders to offload millions of dirhams in repossessed property. The homes sold between Dh740,000 (US$201,450) and Dh6 million, well above the minimum prices.
"It was good news to see the [foreclosure] process start to work like other jurisdictions," said Jody Glenn Waugh, a partner with Al Tamimi, a law firm.
Hundreds of properties are in the foreclosure process in Dubai but they have been slow to come up for auction, where sales are controlled by the Land Department. In May the department auctioned a repossessed villa in The Springs for Dh1.22m, the first and only sale of a foreclosed home under provisions of a mortgage law approved in 2008.
The sale came more than a year after the British bank Barclays won a court order to repossess the property. "Judgements have been flowing for some time now, but there have been delays getting the property to auction," Mr Waugh said.
Dubai's 2008 Mortgage Law No 14, was designed to speed up the foreclosure process, giving lenders a chance to recoup their losses on defaulted property.
Instead of going through civil court, under the new law lenders could execute a foreclosure through a simple hearing before a judge, after giving the client proper notification.
After the judge's order is issued, the property would be auctioned by the Land Department.
But the system has been slow to develop, industry executives say. In addition to the process for obtaining judgements, there were issues establishing values for property.
Some officials were concerned about flooding the market with low-priced homes at a time when prices are already 50 per cent below peak levels in some places, industry experts say.
The Land Department had previously tried to auction a handful of other properties, but they did not sell.
"Initially reserve prices were just too high and now they are far more realistic and as a result they are attracting buyers," said Richard Paul, the head of valuations for Cluttons.
Land Department officials could not be reached for comment.
The auction may prompt lenders to start more foreclosure proceedings. Banks and mortgage companies have been focusing more on renegotiating deals and using foreclosure as a last resort, industry analysts say.
"Ultimately [the auction] provides banks with more confidence that if the buyer defaults, they can go through the process," Mr Paul said.
Long-term, the auction process may also prod mortgage providers to provide more home loans in Dubai, where lenders are still wary.
"As the [foreclosure] system becomes more streamlined it will give lenders greater comfort to be more aggressive in lending," said Jean-Luc Desbois, the managing director of Home Matters Mortgage Consultants.
The Land Department staged three auctions last week with 19 properties for sale, including homes in non-freehold areas. The bulk of the eight repossessed properties sold were villas in the Al Thnnyah and Wadi Al Safa areas, plus two apartments in Dubai Marina, according to a sale brochure.
All the properties sold for more than the reserve price, with bidding brisk, said people who attended the auction. A villa in the Al Thnnyah neighbourhood listed at Dh3.5m sold for Dh5.6m.
"It was well attended," Mr Desbois said. "The place was full." But auctions are still rare in the UAE, he noted.
"Investors and buyers are becoming more aware of the ability to purchase property under auction," Mr Desbois said.
"It is a very new concept for the UAE."
kbrass@thenational.ae
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UAE currency: the story behind the money in your pockets
Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
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.”
Ways to control drones
Countries have been coming up with ways to restrict and monitor the use of non-commercial drones to keep them from trespassing on controlled areas such as airports.
"Drones vary in size and some can be as big as a small city car - so imagine the impact of one hitting an airplane. It's a huge risk, especially when commercial airliners are not designed to make or take sudden evasive manoeuvres like drones can" says Saj Ahmed, chief analyst at London-based StrategicAero Research.
New measures have now been taken to monitor drone activity, Geo-fencing technology is one.
It's a method designed to prevent drones from drifting into banned areas. The technology uses GPS location signals to stop its machines flying close to airports and other restricted zones.
The European commission has recently announced a blueprint to make drone use in low-level airspace safe, secure and environmentally friendly. This process is called “U-Space” – it covers altitudes of up to 150 metres. It is also noteworthy that that UK Civil Aviation Authority recommends drones to be flown at no higher than 400ft. “U-Space” technology will be governed by a system similar to air traffic control management, which will be automated using tools like geo-fencing.
The UAE has drawn serious measures to ensure users register their devices under strict new laws. Authorities have urged that users must obtain approval in advance before flying the drones, non registered drone use in Dubai will result in a fine of up to twenty thousand dirhams under a new resolution approved by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai.
Mr Ahmad suggest that "Hefty fines running into hundreds of thousands of dollars need to compensate for the cost of airport disruption and flight diversions to lengthy jail spells, confiscation of travel rights and use of drones for a lengthy period" must be enforced in order to reduce airport intrusion.
The Cockroach
(Vintage)
Ian McEwan
