Construction and Property Corner ::: 25 August 2023

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Construction and Property  Corner ::: 25 August 2023 

 


 

 

	
 


 

 


 

ü  Multifamily construction pipeline slows

ü  Construction inflation moderates but remains high

ü  Metroc raises €2M to bring clarity to construction projects using AI

ü  Agreement brings promise of construction work for trio of First Nations

ü  Bechtel starts construction on NASA’s $1.5B Florida launch site

ü  There is light at the end of the tunnel for sa reits

ü  Radisson opens eighth property in Morocco

ü  Iraqi launches tourism project by Qatari firm

ü  Dubai real estate’s growth momentum likely to continue by year-end - Sobha Realty Co-Chairman

ü  UK’s Foster + Partners unveils designs of Equinox Resort Amaala

ü  Chinese investors turning to UAE property market for value appreciation

ü  Foreign investors drive property boom

ü  Sharp rise in number of properties listed for sale

 


 

 


 <https://www.willdale.co.zw/> Multifamily construction pipeline slows

Permits for apartments of more than five units have plummeted 32% since last year, and starts have stayed flat, according to a new report.

 

Dive Brief:

Starts for buildings with five or more units came in at a seasonally adjusted rate of 460,000 in July, nudging up only 0.4% from a year earlier, according to the most recent starts data report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The July building permit numbers slightly outpaced starts numbers for buildings with five or more units, coming in at a seasonally adjusted rate of 464,000 in July, a 32% year-over-year decline. Developers completed 297,000 apartments in the month, 23% less than a year earlier.

Overall housing starts rose 5.9% YOY to 1.5 million. Permits fell 13% to 1.4 million, while completions dropped 5.4% to 1.3 million.

 

Dive Insight:

Despite July’s starts numbers staying flat, apartment executives have seen a dropoff in appetite for new, large projects, which showed up in July’s starts numbers. The culprit is higher interest rates, which have increased borrowing costs for developers.

 

“We continue to expect the rate of multifamily starts to slow throughout the year as national rent growth is sluggish and banks tighten lending conditions,” said Mark Palim, deputy chief economist at Fannie Mae, in a press statement. 

 

Even well-funded REITs are cutting back. Arlington, Virginia-based AvalonBay Communities’ Chief Investment Officer Matt Birenbaum said the firm was reducing guidance for the number of projects it is starting in 2023. 

 

“We have raised our required returns on new development starts given our increased cost to capital and focus on maintaining 100 to 150 basis points of spread between underlying market cap rates and our projected development,” Birenbaum said on the company’s most recent earnings call.

 

Construction costs aren’t falling

Even with those declines, developers aren’t seeing tangible price savings yet.

 

“There’s not a lot of motivated land sellers, and a 30% decline in land costs with a construction cost that has stayed flat but not gone up still is very, very hard to pencil,” said Houston-based Camden Property Trust CEO Ric Campo on the company’s second-quarter earnings call.

 

A lot of contractors are still building out projects. Once those jobs are finished, those firms may be looking for jobs and willing to negotiate on price.

 

“When contractors start looking out into the future and they don’t see a pipeline, they’re going to have to be more competitive and start tightening their margins and thinking about how they have to compete to get the next job in 2025 or 2026,” Campo said. “So we could see some cost reductions next year toward the end of the year. But the pipeline is full right now, and contractors are still printing money.”

 

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Construction inflation moderates but remains high

Tender prices for commercial construction projects rose by 2.4% during the first half of the year.

 

That's down from 3.7% during the second six months of 2022, according to the Society of Chartered Surveyors Ireland (SCSI).

 

It means the annual rate of commercial construction tender price inflation between July of last year and June of this year was 6.2%.

 

That compares with 11.5% in the 12-months from January to December.

 

"Material price inflation is still an issue, but it is becoming less of a driver as supply chains and the cost of energy in manufacturing materials have stabilised compared to the immediate post Covid period," said Donal Hennessy, Chair of the Quantity Surveying Professional Group in the SCSI.

 

"Right now, the availability of labour is becoming the dominant concern for the sector with rising labour costs, driven by skilled labour shortages and wage demands applying significant pressure to tender price inflation."

 

Mechanical and electrical services are where the shortage in skills is particularly acute, Mr Hennessy added.

 

This is because the pharma and commercial sectors are soaking up supply, he said.

 

 

"While we welcome the 'Careers in Construction Action Plan’ launched earlier this week by the Government, it’s clear this is an area which needs to be prioritised and which will require continual focus for the foreseeable future," he stated.

 

SCSI said materials such as reinforced steel, insulation and fuel are settling in price, other inputs like concrete are still rising in cost.

 

"This is a real concern for the sector particularly given the Government plans to introduce a ‘concrete levy’ in Q3," said Karen Brady, Chartered Quantity Surveyor.

 

"Looking at the national picture, costs continue to be driven by high construction demand due to economic growth and population expansion."

 

"However, barring any major economic shocks, we expect to see a continuation of low single digit growth figures in the medium term."

 

"And while the overall trend is positive for the sector as far as a levelling off of this Index is concerned, capacity pressures as well as the high interest rate environment will continue to put pressure on the financing of projects, leading to significant uncertainty in the market."

 

 

 

 

Metroc raises €2M to bring clarity to construction projects using AI

Finnish construction tech company, Metroc, has developed a SaaS tool to assist construction firms as they seek out project opportunities. It combines public information from thousands of data sources breaking down the accessibility and value for its customers. It uses AI and has spent two years training the language model specifically for needs within the construction industry.

 

Through a collaboration with the Finnish Criminal Sanctions Office, Metroc has been using the assistance of inmates, in four of the country's prisons, to train the AI algorithms through document processing work at workstations supplied by the firm. Through it, teaching prisoners digital skills needed for study and working life, as well as for integration into society. Prisoners also learn a basic grasp of the construction industry.

 

The tasks include interpreting the text content and answering questions about the construction industry, such as "Is this document an approved building permit" or "Is this document the contractor selected for the project". Training artificial intelligence is done by repetitions and answering questions.

 

“For a long time, construction industry market data has been incomplete, out of date, and scattered across various platforms, resulting in construction companies being unable to find suitable projects, customers, and partners at the right time – leading to uncertainty for both businesses and end-customers,” says Jussi Virnala, CEO and founder of Metroc. “The platform provides construction companies with a comprehensive overview of upcoming projects, empowering them to navigate smoothly in this challenging environment."

 

The SaaS firm has raised a €2 million Seed funding round, which was led by Lifeline Ventures, along with support from angel investors. Funds will help the company push beyond the current borders of Finland and Sweden, where it already serves over 300 customers, as it eyes a European expansion. It will also bring fresh talent to its tech, sales and marketing teams.

 

"Metroc is a bootstrapped company with immense promise, as witnessed by their great traction and strong growth numbers. Metroc is leading the digital transformation of a traditionally conservative industry, harnessing the full potential of AI. Lifeline Ventures was deeply impressed by their ambition, technical capabilities and successful execution, making it an easy decision to invest in their future growth,” says Petteri Koponen, Founding Partner at Lifeline Ventures. 

 

 

 

 

Agreement brings promise of construction work for trio of First Nations

A new road construction partnership holds the promise of employment and long-term contract work for a trio of First Nation communities in northeastern Ontario.

 

Shwe Miikaan — a construction company owned by Shawanaga, Magnetawan and Henvey Inlet First Nations — has struck a teaming agreement with SNC-Lavalin in anticipation of the upcoming final leg of four-laning on Highway 69/400.

 

The company made the announcement on Aug. 9.

 

“As we strive to capture local benefit from the Highway 69/400 twinning project, we remain committed to training and hiring from surrounding First Nations, thus enhancing the potential of our vibrant communities,” Adam Good, Shwe Miikaan’s president, said in a news release.

 

“SNC-Lavalin, having a rich history in delivering multiple highway and road expansions globally, will be an invaluable partner in realizing our vision for the development of our territories. We hope this will stimulate a ripple effect of beneficial partnerships between Indigenous entities and large, industry-leading companies.”

 

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The four-laning of Highway 69/400 — a vital transportation link that connects Northern Ontario to the southern part of the province — has been ongoing for more than two decades.

 

In the early 2000s, the provincial government committed to four-laning the entirety of the highway by 2017, but that target came and went without the road being finished.

 

The last segment of four-laning to be completed, in 2021, stretches between French River and Grundy Provincial Park.

 

Now, a final 52 kilometres is left of the multi-year project. That portion, located between French River and Parry Sound, is where Shwe Miikaan and SNC-Lavalin come in.

 

In an interview, Good said the partnership has been in the works for a few months.

 

Shwe Miikaan, which translates to ‘Three Roads” in Anishinabemowin, was formed in 2015 in an effort by the three communities to capture some of the road-building contracts along the highway, which runs through the territories of all three First Nations.

 

“The first time Highway 69 went through, the three First Nations didn’t get anything from it,” Good said. “It just went right through, it bypassed us, and there were no benefits towards the communities.”

 

But he’s optimistic this time will be different, and says the company is open and ready for business.

 

“We’re hoping and anticipating that we can build the whole remaining 52 kilometres of the highway,” Good said.

 

“Realistically, we’re not sure if that’ll happen, but in a perfect world, that’s our scope.”

 

shwe_miikaan1

 

That includes everything from bridge work to design and construction, culvert replacement to building animal crossings, ditching, blasting and more.

 

Shwe Miikaan recognized early on it wouldn’t be able to take on such a huge project alone, which is when they approached SNC-Lavalin about a partnership.

 

The Montréal-based company is world-renowned for its engineering and construction expertise across industries.

 

Their longstanding global expertise combined with Shwe Miikaan’s experience and local knowledge is what the partners believe will make a winning combination.

 

“Shwe Miikaan brings highly valued expertise in construction and community engagement along the corridor of work on Highway 69 to the table,” said Ben Almond, SNC-Lavalin’s CEO of engineering services for Canada, in the news release.

 

“A partnership would allow us to draw from each other’s strengths, enabling us to accomplish more than either of us could alone — an overall net benefit to the community.”

 

Landing the four-laning contract would mean employment for the participating communities, and Shwe Miikaan’s goal is to have a minimum of 51 per cent Indigenous employment on the project.

 

Because they haven’t yet secured a contract, Good couldn’t say what jobs will need to be filled or how many workers will be needed.

 

But Shwe Miikaan has been proactive in taking an inventory of skilled workers from communities across the Robinson-Huron Treaty area, so they know where their strengths are and where they need more capacity.

 

Once they get the go-ahead for the work, community members that are interested in working on the project will be provided with training for the job. That could be anything from heavy equipment operation to carpentry to general construction.

 

“We’re really trying to get involved as much as we can and really have the Indigenous communities really benefit,” Good said.

 

Looking ahead to when the project is completed, Good said the company is hopeful of securing maintenance contracts for the highway.

 

That might include projects like repaving, culvert work, or bridge upgrades.

 

“We want to put ourselves in a position where we can last longer than just this one project for Highway 69,” Good said.

 

Currently, the project remains in the engineering and design phase, and the start time for construction remains unknown, he said. That decision lies with the Ontario government.

 

“The three communities, we're open for business and we're just waiting on the Ontario government to get the ball rolling,” Good said. “So, really, the ball's in their court and we're eager to make a safer and quicker highway for everyone in Ontario.”

 

 

 

 

Bechtel starts construction on NASA’s $1.5B Florida launch site

Reston, Virginia-based contractor Bechtel began construction of NASA’s Mobile Launcher 2, a rocket launch pad that is key to putting people back on the moon for the first time since 1972, and will support the agency’s plans to send humans to Mars, the contractor announced on Aug. 16. 

 

The project, located at the Kennedy Space Center in Cape Canaveral, Florida, may cost up to $1.5 billion to build, according to Space News.

 

The new launcher will rise more than 390 feet and withstand a launch environment of greater than 2,200 degrees Fahrenheit, blast pressures of more than 130 pounds per square inch and more than 8.9 million pounds of thrust, according to the release. Bechtel will design, build and test the launcher as part of its duties.

 

“I look forward to continuing safe progress on the mobile launcher as we work from bolting to liftoff,” said Felice Presti, a project manager for Bechtel, in the release.

 

The project is a part of NASA’s Artemis program, which aims to establish a sustainable presence on the moon to prepare for missions to Mars, according to the space agency. The agency has prioritized finding technology partners in recent months, especially as the government gears up to build permanent fixtures on the moon and prepare to travel to Mars.

 

While the launcher will aid the agency’s mission, it hasn’t been without challenges. The cost-plus contract for the project was originally valued at $383 million, Space News reported, but delays and cost escalations resulted in the current$1.5 billion estimate.

 

Bechtel did not immediately address Construction Dive’s queries about the reported cost overruns. The contractor told Space News in a statement that it remained committed to the project and supporting NASA.

 

The launch pad’s first rocket is slated to blast off in the fall of 2028, Space News reported.

 

 

 

 

THERE IS LIGHT AT THE END OF THE TUNNEL FOR SA REITS

SA REIT Association Chairman and CEO of Growthpoint Properties SA, Estienne de Klerk.

The performance of South Africa’s REIT sector improved during Q2 2023 to deliver a better-than-expected total return of 0.7%, although its performance for H1 2023 was flat, according to the SA REIT Association.

 

Its chairman, and CEO of Growthpoint Properties SA, Estienne de Klerk, says that he is optimistic about the resilience of the sector even though the second half of the year will remain tough.

 

De Klerk points out that leasing has picked up in the office sector, although it still lags behind other commercial property sectors owing to some businesses consolidating space, adding to an over-supply of the market.

 

“Businesses that previously gave up offices are returning to the market. Office vacancies in Cape Town and Durban have reduced remarkably and letting activity has increased significantly in Gauteng,” he says.

 

This is acknowledged by SA REIT Association CEO Joanne Solomon, who is optimistic about the rental market and demand for office space in particular: “The rental market is showing signs of gradual recovery, despite challenges posed by municipal rates and utility increases in metropolitan areas. The industry is working together to try and reduce the impact in the future of municipal increases.”

 

De Klerk notes that the logistics and healthcare property sectors are performing well, with the former showing strong results despite some fluctuations in key metrics. Supply and demand in the logistics sector have become more evenly balanced as new development has slowed due to high construction costs linked to higher inflation.

 

Even though there are good investment opportunities in the market, disposal and acquisition activity in the sector is subdued due to the higher cost of funding and constrained balance sheets, with many companies focusing on managing their loan-to-value (LTV) ratios.

 

“Liquidity remains limited and there are not many buyers in this market. Buyers are generally owner-occupiers or small investors assembling portfolios. In certain cases, vendor finance is required, and this is not attractive to many sellers.”

 

Keillen Ndlovu, an independent property analyst, says the strategy that various REITs have adopted to dispose of assets to help reduce debt is likely to remain in place.

 

“Dividend reinvestment options or scrip dividends will continue to be a source of funding. Given the massive divergence between listed property prices and physical property values, we may see further consolidation and delistings.”

 

He also says that although the sector is cheap, prospects will further improve once South Africa sees a decrease in load shedding, lower interest rates and a more optimistic economic growth forecast.

 

In response to the shrinking base of the listed property sector, which has fewer counters on the JSE and a market cap of around 48% less than its peak in December 2017, de Klerk notes the current situation is common for this business cycle and may reverse in more favourable market conditions.

 

Commenting on listed property companies with offshore exposures, de Klerk says they have not been immune to the high interest rates and inflation which have affected the global real estate sector.

 

“South African companies that have invested offshore generally adhere to the same conservative principles and disciplines for managing their offshore debt as they do in the more volatile South African environment. As a result of this prudent approach, they have performed better than many other investors in these international markets,” he says.

 

Looking ahead to the future prospects of South African REITs, de Klerk says property remains a long-term investment game and those investors prepared to invest now will reap the rewards when the interest rate cycle improves.

 

“In the short term, however, most REITs’ distributions will be negatively impacted by higher interest rates on their variable debt. This will reverse when rates start reducing. Several SA REITs are trading at significant discounts to their stated NAVs and offer strong long-term value.”

 

 

 

Radisson opens eighth property in Morocco

Radisson Hotel Group has expanded its presence in Morocco with the opening of Radisson Blu Residences, Saidia.

 

Its eighth hotel in the country, the property is located in the seaside destination in northern Morocco.

 

The latest opening also raises the group’s number of hotels in Saidia alone to three.

 

The hotel has 13 units made up of suites, studios, and apartments with views of the Mediterranean Sea.

 

Each unit is fully equipped with appliances and amenities, and has a sperate living area and kitchen.

 

The hotel has two large pools, while guests can also make their way to the nearby beach known as the ‘Blue Pearl’.

 

Additional leisure amenities include a spa and traditional Moroccan hammam available at the adjacent Radisson Blu Resort, Saidia Beach.

 

F&B options at the hotel include two à la carte restaurants. Le Perle Bleue has live show kitchens and is open from breakfast through to dinner, while La Table has a menu featuring a fusion of international and Mediterranean flavours.

 

Bar Azure features live music in the evenings, while the hotel also has an Afternoon Tea Lounge and Wet Bar which is located poolside.

 

Other leisure amenities in close proximity include golf sessions at the nearby golf course as well as Aquaparks Alpamare Saidia water park for children and adults and the Marina where a range of water activities are held close to the property.

 

“We are delighted to open the doors to our eighth hotel in Morocco and continue our steady growth in the country which remains one of our key focus markets in Africa. Radisson Blu Residences Saidia perfectly complements our two existing Radisson Blu resorts in Saidia, and provided the ideal accommodation for travellers such as long stay guests and families seeking additional space and facilities,” said Tim Cordon, chief operating officer of the Middle East and Africa at Radisson Hotel Group.

 

Across the EMEA region in H1 2023, Radisson Hotel Group added more than 8,000 keys through signings and openings across several of its brands.

 

 

 

Iraqi launches tourism project by Qatari firm

Iraq has kicked off a project to be executed by a Qatari investment company in the capital Baghdad for the construction of a tourism village, the local media said on Friday.

 

Prime Minister Mohammed Al-Sudani on Thursday laid the ground stone for ‘Rixos Baghdad’ tourism village that will be built by Estithmar Holding, a publicly listed Qatari group with a diverse portfolio of 51 companies.

 

“Rixos Baghdad is the first tourism project in the framework of cooperation between Iraq and Qatar…We believe that Qatar has experienced companies and pioneering investment initiatives,” Sudani said in his statements, published by Shafaq News and other Iraqi publications.

 

The report said the 47,000-sq-metre project in central Baghdad comprises a luxury hotel, a housing complex, a chain of international restaurants and other facilities.

 

In June 2023, Estithmar Holding announced the signing of three memorandums of understanding worth $7 billion with Iraq’s National Investment Commission to develop new cities, 5-star hotels and manage and operate several hospitals in Iraq.

 

 

 

Dubai real estate’s growth momentum likely to continue by year-end - Sobha Realty Co-Chairman

The growth momentum in Dubai’s real estate sector will persist for the rest of 2023, with market consolidation projected for next year, Ravi Menon, Co-Chairman of Sobha Realty, told Zawya Projects.

 

“At present, in the first half of 2023, the market is already at 30-40 percent growth over the first half of last year, and we expect this momentum to continue for the rest of 2023 as well,” he stated, adding the emirate is well-positioned to address future challenges and maintain its upward trend going forward.

 

Menon affirmed that the company has achieved its sales and financial targets for the first half of 2023 without disclosing specific financial numbers.

 

In 2022, Sobha Realty took a proactive step to release its first environment, social, and governance (ESG) report as per the guidelines set by the Global Reporting Initiative (GRI).

 

“Work is currently underway on the second report,” Menon stated.

 

Excerpts from the interview:

 

As the Co-Chairman of Sobha Realty, what are your priorities in the first year of taking on the new role?

 

The conception of a robust growth strategy for the company’s existing business and the identification of new growth opportunities continues to be our top priorities. We aim to evaluate and improve the company’s operations to ensure efficiency and quality across all facets of the business, including project management, construction, marketing, and customer service.

 

Sobha Realty’s financial performance will also be evaluated to maximise revenues, profitability, liquidity, and long-term stability. By developing financial strategies to optimise revenue generation, cost control, and risk management, we look forward to streamlining financial decisions and thus driving sustained growth for the future.

 

Do you intend to change or retain the same growth and development strategy in the UAE and the GCC?

 

Growth and development strategies may be modified or retained depending on several external factors, such as market conditions, competitive landscape, economic outlook, and specific corporate goals.

 

Market analysis is crucial as it helps assess market conditions by considering factors such as supply and demand dynamics, pricing trends, consumer preferences, and the regulatory environment.

 

Businesses must determine whether their current strategy is in line with market realities and pinpoint areas where it needs to be adjusted or improved. Similarly, we must also consider the overall economic climate and future projections for the market.

 

This requires careful consideration of GDP growth, government spending, infrastructure development, and other sector-specific indicators.

 

When you state that Dubai is primed for significant real estate growth, what kind of growth are you estimating in the real estate sector for the rest of 2023 and 2024?

 

In recent years, Dubai has become a hub for real estate investments, with numerous ambitious projects and initiatives fuelling growth in the sector.

 

This is supported by a strong emphasis on infrastructure development. Projects like Dubai Metro and the expansion of Al Maktoum International Airport further improve connectivity and accessibility, making Dubai an appealing location for real estate growth.

 

Dubai’s tourism and hospitality sectors are also important in driving this growth, as the city is known for its luxury and world-class hospitality, attracting both leisure and business travellers. These factors, along with the emirate’s favourable business environment and laws that permit foreign ownership of properties, are why we believe the emirate’s growth will continue and demand for residential real estate will be on the rise.

 

At present, in the first half, the market is already at 30- 40 percent growth over the first half of last year, and we expect this momentum to continue for the rest of 2023 as well. Given a strong market run in the last two years, we expect the market to consolidate the gains in 2024.

 

Have you met your 2023 targets in terms of new project launches and construction timelines for your existing projects?

 

We have successfully met our sales and financial targets for the first half of 2023. We completed our Waves project at the waterfront district in the Sobha Hartland community, which received its building completion certificate earlier than scheduled.

 

Similarly, we handed over our latest residential tower, One Park Avenue, and Tower B of our Creek Vistas project in Sobha Hartland, Mohammed Bin Rashid Al Maktoum City (MBR City).

 

Using our backward integration model, we were able to complete and deliver these premium projects on time, upholding the highest standards in quality.

 

What factors motivated you to launch Sobha Hartland II in MBR City and Sobha SeaHaven in Dubai Harbour?

 

These projects were motivated by a variety of factors, especially market demand, which developers typically gauge for residential or commercial properties in a specific area. Likewise, the location of a project is critical to its success.

 

We were strongly influenced to pursue Sobha Hartland II inspired by the phenomenal success of Sobha Hartland and its ideal location near Downtown Dubai. Besides that, we aimed to establish a strong presence in MBR City, which is a flagship location of the emirate.

 

The Sobha Seahaven project also benefited from its waterfront location at Dubai Harbour, a prime locale in Dubai. With its unparalleled architecture and spectacular views of the Palm and Ain Dubai, we were confident it would be a sought-after project amongst our discerning clientele.

 

Who is the architect of these two projects?

 

As part of our backward integration model, we have our own architectural firm – PNC Architects, that makes us entirely self-reliant, enabling us to design iconic landmarks and control quality and deliveries, thus upholding customer confidence in Sobha Realty. In terms of design, architectural excellence has been one of our key priorities.

 

Sobha Hartland II’s distinct USP is luxurious resort-style amenities and an unrivalled residential experience. The community is located a few minutes from Downtown Dubai and has a business district and mall surrounded by lush, green landscape and crystal blue waterscapes.

 

As for the Sobha SeaHaven development, its architectural style is inspired by the graceful forms and dynamic profiles of super yachts. This is evident in the project’s fluid lines, sharp angles, and floor-to-ceiling windows, which replicate the expansive views from a yacht’s deck. The open-concept layouts of the project enable a seamless transition between indoor and outdoor living, evoking the spaciousness and freedom observed in a luxury yacht.

 

What are the sustainable elements in your projects?

 

Our operations have always prioritised sustainability. As developers, we aim to optimise energy consumption and lower our carbon footprint by incorporating energy-efficient design components such as insulation, double-glazed windows, efficient HVAC systems with suitable VFD and energy recovery system, LED lighting with motion sensors, centralised hot water system with partial solar back up, water-efficient fixtures, use of condensate drain for irrigation, and smart home automation.

 

Incorporation of solar panels in projects has aided us in producing clean energy and lessening reliance on fossil fuels. Advanced environmental monitoring systems including intelligent building management, energy monitoring, and air quality sensors enhance resource optimisation.

 

Notably, Sobha Realty’s new developments are built in accordance with green building codes to offer residents a built environment that is robust and sustainable. Our landscaping incorporates a mix of local and adaptive species and employs high-efficiency drip irrigation techniques using treated water.

 

Our internal facilities management division also makes sure that all buildings are operated effectively by utilising cutting-edge technology, ensuring real-time monitoring, and minimising waste.

 

The unique backward integrated ecosystem has significantly helped generate value and sustainability during design, construction, operations and further on to provide excellent service and comfort to the occupants.

 

How have you approached ESG?

 

Sobha Realty is committed to incorporating sustainable practices into its business operations, promoting environmental stewardship, and upholding its teams’ welfare through a robust, responsible, and ethical governance framework.

 

Our ESG strategy has been developed in accordance with the UN sustainable development goals, UAE net zero strategy 2050, UNGC’s principles for responsible business, Task Force on Climate-Related Financial Disclosures (TCFD) recommendations, ILO’s international labour standards, and the Paris climate agreement.

 

In 2022, Sobha Realty voluntarily released its first ESG report, which followed the GRI guidelines, and work is currently underway on the second report.

 

Likewise, we joined the TCFD in 2022, making us the third company in the real estate segment and the eighth company in the UAE to do so.

 

Sobha Realty’s forward-looking reporting strategies are expected to articulate our ESG credentials and climate ambitions transparently and clearly to a diverse group of stakeholders, including policymakers, authorities, governments, ministries, financial institutions, and buyers.

 

What will be the sector’s biggest challenges in the coming years and how are you planning to overcome them?

 

Consumer preferences are changing, focusing more on wellness, technology integration, and community engagement. The real estate sector is rapidly evolving due to technology, potentially changing traditional business models. To stay competitive, companies need to adopt digital transformation, innovative marketing, and customer engagement strategies.

 

However, it is undeniable that Dubai has transformed and experienced remarkable success over the years, owing to the astute leadership of Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. His vision has transformed the emirate into a global hub for business, tourism, innovation, and culture.

 

This growth also comprises the city’s outstanding infrastructure, urban planning, and innovative architecture, all of which have transformed the city’s landscape and solidified its position as one of the world’s most futuristic and aesthetically appealing destinations. This positions Dubai well to tackle future challenges and sustain its growth.

 

 

 

 

UK’s Foster + Partners unveils designs of Equinox Resort Amaala

London-based Foster + Partners has revealed the designs of Equinox Resort Amaala, a hotel on Saudi Arabia’s Red Sea coast.

 

The hotel is located in the new Marina Village at Amaala, which houses a collection of luxury hotels, villas and condominiums, the company said in a statement.

 

When complete, the village will form an integral part of Red Sea Global’s wider Triple Bay development.

 

Gerard Evenden, Head of Studio, Foster + Partners, said: “The hotel is designed around four shaded green courtyards, inspired by the traditional architecture of the region, which naturally cools the air to create a comfortable and restorative environment.”

 

Arrivals and departures by boat or electric car are framed by a spectacular floating canopy that creates a shaded drop-off zone at the hotel’s main entrance, he added.

 

With a focus on sports, fitness and lifestyle, the hotel comprises 128 rooms, including two luxury penthouses.  

 

 

 

 

Chinese investors turning to UAE property market for value appreciation

With China dropping its Zero-COVID policy and permitting its citizens to travel and invest overseas, Chinese investors seeking value appreciation find the UAE property market an excellent avenue to park their money.

 

Farhad Azizi, CEO of Azizi Developments, told Zawya Projects that Chinese investors were major buyers of Dubai real estate in the first quarter.

 

"Chinese investors accounted for 12 percent of all Dubai property transactions [in the first quarter], which marks a significant rise from eight percent recorded during the same period last year," he said.

 

"We are seeing this surge in interest firsthand in our property sales, with a similar figure being reflected in our transactions," he said, adding that the company is selling substantially more units per day than it did in the peak year of 2019.

 

In the first quarter of 2023, real estate sales transactions in Dubai grew 50 percent year-on-year (YOY) in volume to touch 30,852 units. In terms of value, the growth was 60 percent YOY to touch 88.56 billion UAE dirhams ($24 billion), according to Dubai Land Department (DLD) data.

 

Developers upbeat

 

Azizi's sentiment reverberates with developers and consultants across the sector. "There are over AED1 billion worth of real estate transactions per day. It is the first time in Dubai that the figure has crossed AED1 billion; it has not come down since. I expect a further rise in the appetite of Chinese investors soon," said Empire Developments CEO Kamran Ghani.

 

Driven Properties Founder and CEO Abdullah Alajaji said investments into UAE real estate by Chinese non-residents have expanded five-fold between the first quarter of 2022 and the first quarter of 2023.

 

He described first quarter 2023 activity as "green shoots of recovery" towards the 2019 level.

 

Knight Frank's Partner and Head of Middle East Research, Faisal Durrani, said there is an element of 'revenge spending' following the lifting of the pandemic restrictions.

 

Durrani said that Chinese buyers accounted for 23 percent of all Knight Frank's purchases in 2022 and figured routinely among the top five nationalities purchasing Dubai residential properties before the pandemic, adding he expected them to return to the league table rapidly.

 

In 2019, buyers from mainland China accounted for just two percent of all super-prime sales for Knight Frank. In the last 12 months, they have jumped to 17 percent, leaving London trailing at 14 percent, according to Christine Li, Head of Research, Asia Pacific at Knight Frank. 

 

"Dubai is moving up the ranks of global destinations for Chinese buyers," she said.

 

Interestingly, Chinese investment interest in the UAE is not restricted to Dubai alone.

 

According to Durrani, 77 percent of East Asian HNWIs [High Net Worth Individuals] who have shown significant interest in purchasing real estate properties are keenly considering the rest of the UAE, particularly Abu Dhabi.

 

>From among the HNWI interested in investing in UAE, 70 percent of the East Asian HNWI, as compared to 45 percent of global HNWI, found Abu Dhabi attractive as a complementary hub to Dubai, he said.

 

Drawing HNWI, UHNWI 

 

The UAE recorded its highest Foreign Direct Investment (FDI) inflow of nearly $23 billion in 2022, according to the World Investment Report 2023 published by the UNCTAD in July.

 

Azizi pointed out that while HNWIs and UHNWIs [Ultra-High Net Worth Individuals] are buying Dubai's luxurious properties for end-use purposes and snapping up smaller units for investment reasons, they are also buying into Dubai's solid reputation as a safe, growth-inclined, tourism and business-conducive metropolis.

 

He referred to Knight Frank's finding that affluent investors are set to invest $2.5 billion into Dubai's property market in the coming year.

 

Azizi said that over a fifth of these HNWIs have expressed willingness to allocate between $5 million and $10 million to their real estate portfolio in the emirate.

 

"In an even more striking display of their confidence in the city's property market, eight percent of these investors are set to invest more than $80 million," he underlined. 

 

"Dubai has undoubtedly solidified its position as a global hub for Ultra High Net Worth Individuals, and Dubai's property market remains a favoured destination for them," said Adham Younis, Group CEO at D&B Properties.

 

>From among these global HNWIs and UHNWIs interested in Dubai properties, East Asian investors constitute 55 percent, he said.

 

"Chinese investors have shown keen interest in actively participating in Dubai's flourishing market, as observed during D&B Properties' recent roadshow hosted in Guangzhou," noted Younis.

 

Weak domestic market   

 

Meanwhile, the performance of the Chinese property market has been mixed, with Tier 1 cities remaining healthy while many smaller cities are struggling, according to Juwai IQI Co-Founder and Group CEO Kashif Ansari.

 

"Some smaller cities suffer from surplus stocks, mortgage repayment strikes, failing prices and financially weak developers," he said.

 

Chinese investors have adjusted their expectations about price growth in the domestic market and are seeking property investment opportunities to mitigate the impact of an ageing population and slow economic growth on future income.

 

Fadi Moussalli, Executive Director of International Capital Coverage at JLL, pointed out that with the zero-Covid policy junked, he expects to see more Chinese nationals investing in the UAE's residential real estate sector.

 

"However, investment will remain moderate and more focused on the value sector, which is more cash-driven. Chinese nationals invest in the UAE as a diversification play and are usually not relying on bank mortgage financing," he observed. 

 

With appreciation of their wealth in 2023 as their primary goal, investors from mainland China are attracted by the 44 percent YOY increase in Dubai's prime residential prices in the first quarter of 2023, opined JLL's Christine Li.

 

Other factors driving Chinese investors to Dubai include residential real estate becoming the most preferred asset class among the global HNWI and Dubai becoming a second home investment destination for East Asian investors due to the relative affordability of prime real estate.

 

"A $1 million secures prime residential real estate that is 3-4 times that of London, New York or Singapore," said Knight Frank's Durrani.

 

He said the UAE's real estate sector also has a wide range of residential visa options in addition to the emirate's reputation for safety and security, business-friendly climate, and rule of law.

 

The emirate's connectivity to the rest of the world makes it an enticing place to settle, added Moussalli.

 

Juwai IQI's Kashif pointed out that Chinese higher-income households amassed $886 billion of excess household savings during the pandemic.

 

"Having more money than ever before, they are spending tens of billions of dollars per year buying international property worldwide," he said.

 

He said Dubai would be one of the key markets where property buying by the Chinese will increase faster this year due to the emirate's stature as an apolitical haven for expats, lifestyle, and upward-trending property prices.

 

In residential properties, Chinese buyers are looking beyond just the rent.

 

"Investors are seeking something they can occupy part-time and want a place they can retire to one day."

 

"Families looking to occupy are looking for good suburbs with good schools or private schools nearby, and they like to be close to areas with Chinese shops and services," said Ansari.

 

"Across the board, every real estate segment in Dubai will benefit from the re-emergence of Chinese investors," said Imran Farooq, CEO of Samana Developers.

 

Apart from super luxury properties in Dubai, they invest in high-rental income properties, said Farooq. He pointed out that the commercial sector is showing a significant recovery in rental returns.

 

"Rents are up by almost 50 percent in Dubai's Business Bay area," he underlined.

 

Kamran Ghani of Empire Developments, Dubai, added, "Along with residential apartments, villas, and townhouses, commercial properties such as offices and retail spaces are in demand. Chinese investors are also interested in hotel properties driven by their appeal for the tourism and hospitality sector."

 

However, Abdullah Alajaji of Driven Properties noticed a preference for apartments over villas, predominantly smaller units such as studios and one-bedroom in central communities.

 

"The majority of investment into properties in Dubai came into areas such as Dubai Creek Harbour, City Walk, Downtown, and Business Bay. They are particularly drawn to apartments over AED750,000 in value due to the residency incentives," he said.

 

According to Farhad Azizi, upscale properties, be it in terms of location-based prestige, views, finishing, or amenities, are the most sought-after by Chinese investors.

 

"Buyers from China are displaying a great affinity and taste for the finer things in life and are assigning weighty importance to it. Luxury, status and eminence play a key role in their purchase decision-making processes," he noted.

 

D&B Properties found Chinese investors to be mainly interested in centrally located apartments for convenience and business purposes rather than focusing solely on luxurious waterfront properties, said CEO Younis.

 

"Moreover, the UAE's strategic location, stable political and economic environment, favourable regulatory framework, and robust infrastructure make it an enticing destination for Chinese investors seeking real estate investment prospects," he concluded.

 

 

 

 

Foreign investors drive property boom

Property transactions are thriving, as official data show, and real estate professionals say that a great part of the growth is driven by foreign investors.

 

By August 10, with not quite two-thirds of the year gone, there have been 112,000 property transaction, while in the whole of 2022 139,000 sale contracts had been signed, up from about 105,000 in 2021 and 75,000 in 2020.

 

Notaries are certain that the 2022 number, which represented a 10-year high, will be eclipsed this year, as, at the moment, about a 1,000 property transfers take place daily. And we are taking about transfers being conducted through the online MyProperty platform. This doesn’t include property outside city limits or farmland.

 

Already, the state has received some €301 million in taxes, way higher than in the whole for 2022, as increased demand has driven property prices up.

 

Foreigners seeking a golden visa spent over €1 billion buying property in the first half of 2023, almost triple than what they spent during the same period last year (€361 million).

 

The minimum amount that must invested to get a golden visa has been doubled to €500,000 for the most sought-after destinations, such as much of the Attica region, the northern city of Thessaloniki and the islands of Mykonos and Santorini. And, unlike what was in force until recently, prospective investors cannot acquire several cheaper properties to get over the €500,000 threshold.

 

The gap between imputed values – the estimated values assigned to properties by the state for taxation purposes – and market values is widening, especially in the toniest central Athens districts and in the northern and southern suburbs.

 

 

 

 

Sharp rise in number of properties listed for sale

The number of properties advertised for sale in Scotland has increased by 83% in parts of Scotland, according to DJ Alexander Ltd.

 

The estate agency found that the number of properties advertised for sale has increased by 83% in Inverness in the period between August 2022 and August 2023; up 81% in Dundee; 45% higher in Edinburgh; 22% greater in Perth; 17% up in Glasgow; and 5% down in Aberdeen.

 

The greatest increase in the central belt is in the number of detached and semi-detached homes for sale. In Edinburgh detached and semi-detached homes advertised for sale were 99% and 116% higher and in Glasgow they were up 74% and 34% respectively. The picture across Scotland’s other cities was more evenly spread across different property types although Dundee had an increase of 128% in the number of detached homes for sale.

 

David Alexander, chief executive of DJ Alexander Ltd, explained: “Despite interest rates increasing 14 times since December 2021 the number of properties advertised for sale in Scotland continues to rise. Year-on-year our major cities are reporting double digit growth and, in the case of Inverness and Dundee, just shy of 100% more properties for sale than one year ago.”

 

“With an interest rate policy designed to slow down inflation by reducing demand in sectors like housing we are still seeing an overwhelming desire on the part of Scottish homeowners to keep on buying and selling.”

 

Alexander continued: “To put this in context the August figure is in the top four by volume of any month of the last 30 months. There still seems to be an enormous, growing desire to move home at a time when many felt the market would be much quieter.”

 

“Indeed, the biggest story remains in the detached and semi-detached types of property where the number of properties advertised is more than double the level it was a year ago. Edinburgh remains a hotspot with triple digit growth in volumes and prices continuing to rise across the city and specifically among larger homes. In Dundee, the figure for detached homes is 128% higher from a smaller base of sales while Glasgow is up substantially as well in this property type.”

 

He added: “There is little doubt that prices are softening across the whole market but by a small margin compared to the large increases experienced over the last three and a half years. That the number of properties advertised for sale remains so positive is testament to the faith of homebuyers in Scotland who clearly believe that any downturn in the market will be temporary, and it is not acting as a hindrance to their purchasing desires.

 

“There must be a calmer period in the housing market at some point but with strong employment levels, very high wage rises filtering through the economy, and an underlying faith in the strength of the housing market it seems unlikely that Scotland will experience any kind of substantial fall in the next year or so.”

 

 

 

 

 

 

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2023

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


zIMBABWE

 

2023 harmonised elections

August 23

 


Companies under Cautionary

 

 

 


 

 

 

 


CBZH

GetBucks

EcoCash

 


Padenga

Econet

RTG

 


Fidelity

TSL

FMHL

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from s believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and d from third parties.

 


 

 


(c) 2023 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:  <mailto:info at bulls.co.zw> bulls at bullszimbabwe.com Tel: +263 4 2927658 Cell: +263 77 344 1674

 


 

 

 

 

 

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