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The Magazine Cityscape March 2013


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A Middle East perspective on global real estate
Issue March 2013

Published in: Real Estate
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The Magazine Cityscape March 2013

  1. 1. AD 6
  2. 2. ADVERTORIAL MAXIM HOLDING – PIONEERING DEVELOPERS AND INVESTORS SINCE 1980 Transforming the way you live, work and experience life through innovative projects, products and services. For over two decades, Maxim Holding has focused on different dynamic business ventures as per market needs as well as the establishment and development of luxury residential, commercial, entertainment and leisure projects. As one of Egypt’s first entrepreneurs and avid expert developers, we aim to contribute to the quality of life by seizing every potential opportunity in various sectors of the marketplace across countries, providing exceptional quality projects, products and services to the community, all whilst ensuring optimum customer satisfaction and return on investments. What began in 1980 with the construction of Egypt’s first high-end fully-finished apartments and luxury residential buildings has evolved into a holding company that prides itself in developing an all-encompassing plan for all its projects, products and services, transforming the way people live, work and enjoy life. Our subsidiaries are: • Maxim Real Estate Investment Specialized in developing high-end residential towers and communities. • Maxim Commercial Centre Aims to bring memorable shopping and leisure experiences to the market, proudly introducing Maxim Mall, our flagship commercial project. • Royal Maxim for Tourism Invests in building luxury hotels to serve our prestigious clients with a memorable experience. • Maxim Tourism Establishment Showcases a range of various leisure and entertainment projects such as mini shopping malls, family entertainment destinations, bowling centers, restaurants and country clubs. • Maxim Construction Industry Our own ready mix concrete plant, an aluminum panels factory and a cement blocks factory. • Maxim Media Production Caters to intellectual and political programs as well as to documentaries that aim to raise awareness as well as enhance the general cultural standards of the Egyptian audience. • Maxim Classics Focused on finding exquisite, different and unique collectable antiques such as vintage cars with plans to establish Egypt’s first private vintage automobile museum. CURRENT REAL ESTATE PROJECTS landscaped gardens. Maxim Mall – An exceptional shopping destination Located in New Cairo, in front of the American University of Cairo, Maxim Mall offers a hyper market, food court, international cafes and restaurants, a designer court featuring premium international brands, stores of various activities and movie theaters as well as the biggest kids and youth entertainment arcade in Egypt. Retail spaces range from 40m2 to 300 m2. sauna, pool, Jacuzzi, steam rooms as well other SPA facilities. In addition, guests can enjoy outstanding meeting and conference facilities and an exquisite selection of restaurants. Maxim Residence Maxim Residence includes 116 stand alone residential villas and twin houses, a commercial area and a mosque in addition to landscaped gardens. The project is spread over a total area of over 136,000 square meters. Royal Maxim New Cairo Built over a total area of nearly 76,000 square meters, Royal Maxim New Cairo includes 42 stand alone residential villas set around the exclusive Kempinski hotel. Kempinski Hotel Situated in a prime location in New Cairo, the luxurious Kempinski hotel encompasses over 200 guestrooms, 18 cabanas, 6 executive suites, 14 suites, 1 wedding suite and two lavish presidential suites. The hotel also includes rejuvenating beauty and fitness centers with Maxim Country Club Encompassing a total area of over 312,000 square meters, Maxim Country Club offers 304 stand alone residential villas, a mall, club house and an administrative building as well as beautifully MARCH 2013 I CITYSCAPE I 5
  3. 3. CONTENTS 54 COVER STORY SUB-SAHARAN AFRICA LATEST NEWS 8 Regional news 26 Asia news 40 Europe news 48 Americas news MIDDLE EAST INSIGHT 14 Jordan – A small country with great potential 18 Iraq – Strengthening the national housing sector 22 Morocco – North Africa’s gateway to Europe ASIA INSIGHT 28 Azerbaijan – A country reinvents itself 32 Malaysia – South East Asia’s hotspot 36 Hong Kong – Temporary cooling for the world’s ‘hottest’ property market 22 6 I CITYSCAPE I MARCH 2013 EUROPE INSIGHT 43 European real estate in times of crisis – a special feature AMERICAS INSIGHT 50 Argentina – Opportunity despite crisis? SPECIAL FOCUS 54 Sub-Saharan Africa – A continent on the rise INDUSTRY PAGES 70 Industry comment: Ryan Mahoney on the UAE mortgage cap 71 A day in the life of…a retail leasing expert 72 Movers & Shakers 73 Cityscape Events 60 REGULAR FEATURES 60 Architecture: Infinity Tower, Dubai Marina 64 Sustainability: KAPSARC, Riyadh, Saudi Arabia 68 Retail: Retail real estate in today’s multichannel world 32
  4. 4. EDITOR’S LETTER W elcome to our first quarterly edition of the year. 2013 is going to be a big year for Cityscape media. Not only have we restructured our format to be more comprehensive and inclusive this year, but we are also in the process of launching our new Cityscape magazine online portal which will act as an exciting addition to our print and online versions and keep you up-to-date with regular industry news, pungent short stories while offering exciting interactive features. As it becomes clear how global economic challenges are reshaping the world’s investment climate and real estate environment, international investor focus is increasingly directed to emerging economies due to their immense growth potential. Hence, we have dedicated this issue’s cover story to sub-Saharan Africa, a region which has shown impressive growth since the turn of the millennium. Despite several inherent challenges, many sub-Saharan countries display the attributes of stability and global resources which offer good returns to investors. For our special report, we have selected the markets of Ghana, Nigeria, Kenya, Tanzania and Botswana and highlight some of the most lucrative opportunities these countries have to offer. Turning to the Middle East, we take a look at Morocco, a Kingdom where an improved business climate and increased consumer demand are currently boosting the high-end real estate market. Further spurred by the government’s tourism expansion strategy, Morocco’s real estate market is set for extensive development over the coming years. In Asia, Malaysia is coming to prominence among real estate investors, particularly to those from the Middle Eastern region. Steady real estate price growth, political stability, pro-business government policies and a well developed infrastructure all contribute to the emerging attractiveness of the South East Asian country. In other global regions, governmental restrictions on the acquisition of US dollars in Argentina have caused a slowdown in the country’s traditionally healthy property market. However, new alternatives with regards to property purchases are being found which might bring about a paradigmatic change in the country’s real estate market. Over the past year and a half, Europe has of course been in the news constantly, mainly for its inability to find a way out of the lingering sovereign debt crisis. Logically, the continent’s real estate markets have been affected by the economic circumstances. But who has weathered the storm best, and why? Our special Europe feature on page 43 reveals some interesting insights. In the retail world, so-called ‘multichannel retailing’ has become increasingly common and is revolutionising the way consumers shop. While this has raised concerns over the future demand and provision of real estate for retail use, experts say there is no need for concern as multichannel will complement and not compete with ‘bricks and mortar’ retailing over the next few years. Last year has without doubt been an exciting year for Cityscape. With the local real estate market having shown strong signs of recovery and confidence returning to the market, we particularly look forward to our next four events. Cityscape Jeddah will take place from 2-4 March at the Jeddah Centre for Forums and Events, Saudi Arabia, bringing together key industry decision makers and real estate professionals from Saudi Arabia and beyond. On 28 March, Cityscape Egypt will open its doors for the second time in the Cairo International Convention Centre. With a growing local as well as international presence, the 4 day event is expected to be an even greater success than last year’s show. Cityscape Abu Dhabi will be held from 16-18 April at the Abu Dhabi National Exhibition Centre, co-located with the ecoConstruct Expo 2013, the only event focusing on sustainable building solutions in the UAE. For details about all four events, please refer to the show previews towards the back of this issue. Thank you for being part of our community. Anna Amin Editor Project Director Simon Cole Editor Anna Amin Design Davis Mathai Advertising Adam Fox Although every effort is made to ensure the accuracy of information contained in this magazine is correct, Cityscape cannot be held responsible for any errors or inaccuracies contained within the publication. All information contained in the magazine is under copyright to Cityscape and cannot be reproduced or transmitted in any form without first obtaining written permission from the publisher. Partnership Enquiries: Advertising Enquiries: Editorial Enquiries: Simon Cole Tel: +971 (0) 4407 2640 Adam Fox Tel: +971 (0) 4408 2801 Anna Amin Tel: +971 (0) 4408 2898 Email: Email: Email: Cityscape Media, Informa Exhibitions, P.O. Box 28943, Dubai, UAE Published by: Nicholas Publishing International FZ LLC Front cover design: LUCKY YOU! design® DECEMBER 2013 I CITYSCAPE I 7 MARCH 2012
  5. 5. REGIONAL NEWS Jones Lang LaSalle unveils ‘2013 Top Trends for UAE Real Estate’ Real estate investment and advisory firm Jones Lang LaSalle recently announced its ‘2013 Top Trends for UAE Real Estate’. Being published for the sixth consecutive year, this keynote research assesses and forecasts the major trends which could impact and shape the UAE real estate sector over the next twelve months. Introducing the report Mr. Alan Robertson, CEO, Jones Lang LaSalle MENA, said: “With an increase of 65% in the number of transactions in 2012, the Dubai real estate sector will continue to shift up a gear in 2013, experiencing a broader based recovery on the back of continued economic growth. Abu Dhabi remains 18 to 24 months behind Dubai and the market is not expected to experience an upturn in 2013. The foundations are however being laid for a recovery from 2014, with a number of major infrastructure projects scheduled to start later this year.” He added: “We also expect the real estate in both markets to benefit from increased economic activity between the UAE and East Asia, specifically China and South Korea, as well as sub Saharan Africa and Australia. We also look forward to the Expo 2020 announcement in November. Success will be a significant boost to the domestic real estate market, hence our continued support as an official bid supporter.” In the 2013 report, Jones Lang LaSalle outlines the below key trends affecting the UAE real estate market this year: 1. Return of confidence to the Dubai market: Factors like the UAE’s economic growth, increased employment, Dubai’s safe haven status and improved price/rental performance have led to continued market confidence. With many real estate project announcements over the past six months, this increased market confidence has become more pronounced. The government is keen to create a more stable market environment as illustrated by the new mortgage caps from the UAE Central Bank. 2. Funding real estate development in 2013: Funding constraints will apply a natural brake on the pace of new development. Usual real estate financing routes such as off plan sales, IPO/bond issues or bank lending are already challenged. LTV ratio caps might also act as a deterrent as it will limit availability of mortgage finance to end users. In 2013, new development funding is likely to come from overseas cash purchasers and private money from other businesses. 3. Increased involvement from East Asia and the Global South: Increased real estate investment is expected from China and South Korea due to greater business cooperation with the UAE. Chinese involvement is particularly pronounced in the retail sector and is likely to continue in 2013 along with possible investments in the hotel and tourism sectors. There is also increasing interest from Sub Saharan Africa, particularly from oil rich countries like Angola and Nigeria. 8 I CITYSCAPE I MARCH 2013 4. Increased choice as supply levels remain significant: Buyers and tenants will have a multitude of choices in some sectors in 2013, with significant levels of new supply acting as a constraint on the overall performance of the UAE real estate sector, possibly offsetting the positive impact of improved market sentiment. 5. Operational and financial management: In 2013, there will be greater awareness of the importance of both the operational and financial aspects of property management. Operational issues are getting increased attention due to various factors like health/ safety considerations, demanding occupiers, stringent legislations and adoption of best practices. On the other hand, financial issues are also becoming increasingly important as more focus is given towards greater transparency of operating costs. Best value approaches are likely to be more widely applied, rather than lowest cost options. 6. Sustainability: With continued progress in 2012, sustainability is expected to move into even greater focus in 2013. With Masdar and Estidama regulations, Abu Dhabi will continue to take the lead. Most sustainability initiatives in 2013 are likely to be micro and small scale as there is a general reluctance among owners to accept green leases. Evidence from overseas suggests sustainability is unlikely to be fully embraced until either government regulations force change or there is shift in local market perceptions about the financial viability of green buildings. 7. Government initiatives: The government will remain a major player influencing the UAE real estate market in 2013. Initiatives such as the UAE Central Bank mortgage cap, approval of the Dubai Urban Planning Framework and consolidation of real estate players in Abu Dhabi will better regulate or tighten control on market conditions. While initiatives such as regulation on housing allowances for Abu Dhabi government employees, announcement of major government back projects and AED 330 billion stimulus package in Abu Dhabi will stimulate demand and market performance. Craig Plumb, Head of Research, Jones Lang LaSalle MENA commented: “2013 will see an increase in confidence and sentiment in the Dubai market generally. The market will experience a broader based recovery, with all sectors seeing some pockets of rental growth in 2013. Rents for selected prime office buildings are likely to increase for the first time since 2008, but this will not be true of all office properties in every location. Further analysis suggests that Dubai has passed through the peak of its construction cycle so increased demand will continue to reduce over supply. A number of major projects have been announced in Dubai recently but these will take some time to come to fruition. In the meantime we would urge cautious optimism. Good projects with secure funding and tenant commitments will succeed, but we must avoid the over exuberance and oversupply seen before the global financial crisis.” He concluded: “The relationship between landlords and tenants will continue to mature with the market seeing increased transparency in terms of operating costs and service charges. Both Dubai and Abu Dhabi Governments are also introducing initiates to better regulate or control market fluctuations which we generally welcome. Sustainability, property management, liquidity and reduction in the oversupply of inappropriate buildings will continue to drive and dominate the 2013 agenda.”
  6. 6. REGIONAL NEWS African property markets poised for strong growth Demand for high quality commercial and residential property continues to grow across Africa on the back of the continent’s sustained strong economic growth and rising wealth, according to Knight Frank’s newly released Africa Report 2013. Africa is in the midst of a period of dynamic economic expansion, having averaged GDP growth of more than 5% per annum over the last decade. This strong growth is expected to continue and is creating wealthier populations, particularly in the largest and most rapidly growing urban centres. Africa’s ‘mega-cities’ such as Lagos, Nairobi, Accra, Lusaka and Dar es Salaam are increasingly becoming the drivers of its economic growth and, as a result, are attracting growing interest from occupiers, developers and investors. In the retail sector, the increasing wealth and sophistication of African consumers is leading to rising demand for modern retail formats and western-style shopping centres. Countries such as Zambia, Ghana, Kenya and Nigeria have seen a wave of retail construction activity in recent years which has delivered the first generation of modern shopping malls to many major cities. The construction of further, and larger, shopping centres can be expected, as developers seek to meet the demand for high quality retail space from increased numbers of international retailers entering Sub-Saharan markets and major South African chains pursuing expansion plans elsewhere in the continent. In the office sector, many key African cities have severe shortages of high quality space built to the specifications expected by international companies. This scarcity of supply has led to extremely high rents in some cities, particularly where there is strong demand for office space from international occupiers from the oil and gas sector. Indeed, prime office rents in Luanda and Lagos are amongst the highest in the world. In Luanda, recent construction completions have eased some of the pressure on the market and rents have become more affordable over the last twelve months but, even so, at USD 150 per sqm per month, prime rents remain well above the levels seen in leading global office markets such as London, New York and Hong Kong. Oil companies and the banking sector are established sources of demand for office space in Africa, but it is also noteworthy that African economies are diversifying and non- traditional sectors are emerging. The growth of mobile technology in Africa has been a particularly prominent phenomenon over the last decade. Africa’s technology boom is generating new sources of office market demand and the continent is now home to a number of growing technology clusters, such as ‘Silicon Savannah’ in Nairobi and ‘Silicon Lagoon’ in Lagos. In the residential sector, the need for greater volumes of good quality housing is reflected in a number of ambitious new suburbs that are either under construction or planned by private property developers on the outskirts of existing large cities. Examples include the Eko Atlantic scheme on Victoria Island in Lagos, Tatu City in Nairobi and La Cité du Fleuve in Kinshasa. While all of these projects remain at very early stages, they may herald a wave of new large scale urban developments across Africa. The demand from offshore buyers for high quality residential accommodation has continued to increase in countries including Morocco, Kenya and South Africa. Matthew Colbourne, Associate, Commercial Research, said: “Africa’s impressive economic progress is generating a growing need for the construction of good quality property in major cities across the continent. The rising wealth of Africa’s middle class is leading to demand for increasingly sophisticated retail formats and better quality residential property. Meanwhile, as overseas companies seek to expand into Africa’s growing markets, and as African-based companies grow themselves, there is a need for investment in the construction of high quality office buildings, which are currently in short supply in many African cities.” Peter Welborn, Head of Africa, commented: “Property investors and developers looking for emerging market opportunities are increasing external investment in Africa, particularly as the growth markets of the last decade such as Asia Pacific and Central & Eastern Europe mature and the level of returns they offer begins to diminish. Many African countries remain challenging places in which to do business, but for those able to steer their way through African property markets, there is the promise of high returns and significant growth potential. Knight Frank continues to help investors navigate the rapids in over 40 of the continent’s most challenging environments.” MARCH 2013 I CITYSCAPE I 9
  7. 7. REGIONAL NEWS Anantara set to launch in Dubai on the Palm in partnership with Seven Tides Anantara Hotels, Resorts & Spas, a leading developer and operator of luxury hotels, resorts and spas, has announced the expansion of its presence in the United Arab Emirates with the launch of its first hotel in Dubai. The Anantara Dubai Palm Jumeirah Resort & Spa is a five star resort on the crescent of Dubai’s iconic Palm Jumeirah, and will open in September 2013. Partnering with Dubai-based owning company Seven Tides, the progressive hospitality and real estate developer, the luxurious new property is designed to reflect the brand’s Asian heritage and will bring Anantara’s experience and discovery-lead hospitality to the vibrant and continually expanding Dubai market. Set amidst lush landscaping, the new resort and spa will offer a total of 293 guest rooms and suites clustered in units of four to eight to maximise privacy, with 130 guest rooms featuring direct access to 11,000 square metres of lagoon pools. The 12 Beach Villas, 18 Over Water Villas and three highly exclusive Royal Beach Villas give the resort an indulgent and exotic feel. Facilities will include a private beach, three natural lagoons, water sports, a shoreline infinity pool, an Anantara Spa sanctuary with 12 treatment rooms, a fitness studio and two tennis courts. An elaborate entertainment area will be accompanied by meeting rooms with state-of-the-art audiovisual equipment. A ballroom accommodating 300 people and the private beach will provide inspirational venues for events and weddings. Six themed restaurants and bars include an all-day dining restaurant serving classic Middle Eastern and international cuisine, an Australian inspired grill, an Asian themed specialty restaurant, a beachfront Mediterranean restaurant, a lobby lounge with a dedicated shisha deck, and poolside refreshments. For the ultimate in tailored private dining, Anantara’s signature ‘Dining by Design’ concept will invite guests to dine in a dream setting with a private chef and butler. When it opens, Anantara Dubai Palm Jumeirah Resort & Spa will be a great complement to Anantara’s three existing properties in Abu Dhabi – Qasr Al Sarab Desert Resort by Anantara, which is positioned in the world’s largest uninterrupted sand desert, Desert Islands Resort & Spa by Anantara, located on Sir Bani Yas Island, and Eastern Mangroves Hotel & Spa in Abu Dhabi City. The new resort promotes the brand’s distinctive reputation for luxury discovery in the region, and also creates a landmark presence with such a strategic base in Dubai. William E. Heinecke, Chairman and CEO of Minor International, the owning company of Anantara, commented: “We are excited to announce our first Anantara property in Dubai which is a significant milestone for Minor. This new resort strengthens our footprint in the key strategic market of the UAE and I am confident it will greatly contribute to our success there.” Cluttons in the Middle East reports optimistic signs of growth in the Abu Dhabi residential market According to a recently issued report by Cluttons, certain areas of Abu Dhabi are defying the overall trend of declining rent prices and performing at an encouraging level. Areas which have benefited from the recent development of good quality residential communities, such as Raha Beach, Raha Gardens, Al Reem Island, Saadiyat and Al Reef, have all demonstrated rental price increases over the last six months which appear set to continue throughout 2013. The increases are linked to general market demand. This is being driven by an influx of people moving to Abu Dhabi from both Dubai and outside the region, as well as relocating within the city from older buildings, which lack equivalent facilities to the modern developments. The general standard of living and quality of build has improved in Abu Dhabi, which has also encouraged movement within the marketplace. The recent decree that all government employees, as well as those who work for government-affiliated companies, must live within Abu Dhabi has helped fuel residential property demand. The Dubai to Abu Dhabi migration is expected to continue throughout 2013 as existing leases in Dubai expire. Indications are that tenants working across various sectors including the airline, construction, energy and professional services industries are moving to Abu Dhabi. Average rents in Abu Dhabi have also become more affordable whilst Dubai rents have begun to rise, bringing the most soughtafter areas of both cities closer together. For example, the 10 I CITYSCAPE I MARCH 2013 average rent of a two bedroom apartment in Dubai Marina is AED 125,000 (USD 34,000) per annum, while the average two bedroom apartment rent in Al Reem, Raha Beach and Saadiyat range from AED 105,000 – 145,000, dependent on quality. This has helped to encourage people to relocate to the capital. Recent announcements on future developments, investment into infrastructure and real estate, and the Sorouh/Aldar merger have also helped bring confidence to the marketplace. There are many positive signs that, as long as Abu Dhabi continues to offer enough jobs and improved lifestyle, people will continue moving to the city. Whilst further stock is expected to be brought to the market throughout 2013, Cluttons believes that high quality developments with good facilities will continue to be in high demand and experience rental increases. The average two bed rent in older buildings on the island is currently AED 95,000 per annum, a 10% decrease over the past 12 months. The increased supply of new apartments is expected to put downward pressure on rents across the island as people choose to relocate to newer buildings. Landlords in older buildings will be forced to further lower rents as vacancy increases, in order to secure a return on their investment. The redevelopment of older buildings will also be crucial to protect rents and reduce vacancy levels, if they are to compete with new stock entering the marketplace.
  8. 8. REGIONAL NEWS Emaar Properties signs USD 500 million financing facility to develop ‘Emaar Square’ in Turkey Global property developer Emaar Properties PJSC has signed a new financing facility amounting to USD 500 million (approximately AED 1.835 billion) with a consortium of banks including Standard Chartered Bank, Emirates NBD Capital Limited and HSBC Bank PLC. Underlining the financial strength and commitment of the company to undertake large scale projects, the new financing facility will be used for the development of Emaar Square, the second mixed-use development by Emaar in Turkey. The facility will be repaid in seven years. Mohamed Alabbar, Chairman of Emaar Properties PJSC, said: “Having recorded strong financial performance in 2012, Emaar is focused on the on-schedule completion of our master-planned projects in key emerging markets and in Dubai. The new financing facility highlights Emaar’s ability to raise long-term finance and reiterates the strong market confidence in our development competencies and our ability to successfully deliver projects.” He added: “With the current positive growth outlook of Emaar in all its key markets, we are exploring new opportunities to strengthen our project portfolio and create long term value for our stakeholders. Turkey is one of our key markets, where we have successfully handed over homes in the first phase of our first integrated community, Tuscan Valley, and we are now developing Emaar Square in Istanbul that will further contribute to the country’s socioeconomic growth.” Emaar Square spans 73,000 square metres and offers luxury living in a stunning new urban neighbourhood. The development comprises over 1,000 luxury homes, a 180-room five star hotel, a wide range of leisure facilities, offices, and a world class shopping mall, the largest in Turkey. The Emaar Square Shopping Mall, a trophy asset within the development, will offer city dwellers a world class shopping and leisure destination. Located in Büyükçekmece, Tuscan Valley introduced the concept of master planned communities to Istanbul, featuring villas, and the Tuscan Shopping Arcade, with 25 stores and approximately 3,700 square metres of rentable commercial space. Jordan property makes modest gains in 2012 Rental rates in Jordan were mostly unchanged year-on-year during 2012, compared with 2011, according to the recently released Q4 2012 report by property management company Asteco. During 2012, apartment rental rates for one and two bedroom apartments remained unchanged whereas increased demand for three-bedroom units in areas such as Abdoun, Um-Othainah, AlRabiah, Der Ghabar and 4th Circle resulted in an average increase of 2%. 4th Circle remained the most sought after area, with a threebedroom apartment costing JOD 16,500 (USD 23,300) per annum. “The demand was predominantly coming from local residents as well as some expatriates looking for medium to large sized apartments in the range of 250 to 350 square metres,” said Hussein Safadi, General Manager, Asteco. The government announced a new policy for energy sources including gas, solar, oil and electricity which caused increases in sectors such as transportation, construction and raw materials. This had a direct effect on developers who were forced to review their pricing strategy which in turn resulted in apartment sales prices to increase by 10 and 11% in areas such as Der Ghabar and 4th Circle, while the rest of the market gained 5 to 7% on average, year-on-year to the end of 2012. Average sales prices per square metre in Abdoun and 4th Circle were the most expensive at JOD 1,100, while Al-Rabiah remained the most economic at JOD 850 per square metre. Low demand coupled with increasing supply has resulted in decreasing average office rental rates of 3% compared to the previous quarter. Although there is some interest from local companies the annual average rate of decline in most areas ranged between 2 and 5%. The exceptions were Um-Othainah which saw average rental prices go up by 2% and Medina Monawarah where rents slipped 11% during 2012. A stagnant office sales market has resulted in no change for sales prices, with the exception of Wadi Saqrah which witnessed an average sales price increase of 3% during 2012. MARCH 2013 I CITYSCAPE I 11
  9. 9. Welcome to Aqaba Aqaba is a fusion of history, nature, and city life surrounded by picturesque mountains and blue sea. Enjoying year-round sunshine, Aqaba invites you to relax on its beaches, partake in the exhilaration of its water sports and to explore the coral reefs of the Red Sea with its stunningly colourful marine life. Around its quiet streets and between its modern structures, Aqaba holds special monuments with a rich history dating back to the Iron Age, continuing across ancient civilizations, from the Edomites, Nabateans, Romans and Byzantines to Muslims. A blend of cultures and traditions and a long history as a trading center are reflected in the warm welcome the city extends to all visitors. But that is not all; the striking desert landscape of Wadi Rum and the Nabatean city of Petra, one of the Seven World Wonders, are only a short drive away. Aqaba, with its excellent accommodation and entertainment options, is an ideal hub from which to explore these sites. perpetually moving sand dunes are just some of the elements of Wadi Rum’s splendour. Get a taste of desert life. Stare at a dazzling panoply of stars in the desert night, ride a camel through winding canyons, climb mountains, sand surf on golden dunes or simply marvel at the stunning landscape in front of you. Petra Aqaba – Red Sea Aqaba offers sun-seekers and water sports lovers the perfect beach holiday and a great deal more. Small and friendly, Aqaba is easy to get around and has a rich mix of history, culture, shopping and good food. It invites its visitors to relax, to take their time to explore, enjoy its ancient past and modern facilities, its lively night life and quiet corners. Aqaba’s accommodation ranges from luxury five-star to simple hotel and camping option, catering to every imaginable taste and budget. Archaeological excavations are bringing to light ever more of Aqaba’s rich history, which can be tracked back as far as the Iron Age. Traces of the once extensive Byzantine town of Ayla, built about 400 A.D., still remain. However, some of Aqaba’s biggest attractions are without doubt the beautiful coral reefs. Underwater life features some of the world›s most amazing scenery with a marine ecosystem of more than 140 species of corals and countless varieties of brightly coloured fish, some unique to the region. Wadi Rum A forty minute drive takes you to the magical desert landscape and majestic mountains of Wadi Rum. Colour-shifting landforms, giant sandstone mountains, towering plateaus, steep canyons, mushroom rocks and Petra is to Jordan what the Pyramids are to Egypt – a startling testament to man’s engineering prowess. Petra, also known as the Rose City, is a must-see attraction of awe inspiring beauty. It is by far the most visited site in Jordan, and the only way to appreciate why is to see it for yourself. Petra’s history goes back to prehistoric times, but it is most known for the Nabatean civilization that built it and flourished in its rock-cleft alleys around 500 BC. Nabateans, an ancient Arab people, established Petra as their capital around the 6th century BC. Petra soon became a center for spice, silk, and incense trades, controlling the routes that ran from southern Arabia on to Palmyra in the Syrian Desert. Today, Nabatean monuments reflect a cultural and artistic diversity that is owed to the times when Petra was an international trading hub.
  10. 10. ADVERTORIAL ASEZA’s vision for Aqaba as a prime tourist destination Since the establishment of Aqaba Economic Zone (ASEZ) in 2001, there has been strong emphasis on realising Aqaba’s international tourism potential. To facilitate this, 50% of planned investments have been geared towards tourism. ASEZ currently has several major tourism related real estate projects under construction which will add more than 5,000 hotels rooms as well as new tourism services such as golf courses, premium entertainment and MICE facilities to the zone. Between 2005 and 2012, Aqaba has shown steady growth in overnight visitor numbers. It has achieved this by focusing its marketing on specific markets with charter tourism and cruise ships potentials. As a direct result, Aqaba received 1,100 charter flights for the year 2012 and 156 cruise ships since the last quarter of 2012 to date. Bed nights increased from 820 thousand nights in 2008 and reached more than 1 million in 2012. At the same time, the number of tourist arrivals to Aqaba increased significantly, both from the MENA region and further afield, mainly from Scandinavia, UK, USA, France, Belgium, Holland Italy and Russia. Some of ASEZ’s tourism projects include: Marsa Zayed Covering an area of 3.2 million square metres, Marsa Zayed is a mega mixed-use project, including a 2 kilometre waterfront and contains high-rise residential towers, retail, recreational, entertainment, business and financial districts as well as several hotels. Several marinas will add to the current berthing capacity which will transform Aqaba into a premier yachting destination; in addition to a state-of-the-art cruise ship terminal, which will become one of Jordan›s touristic landmarks and a welcoming gateway to Aqaba. Ayla Oasis The Ayla Oasis development aims to create 17 kilometres of new coastline by developing a series of man-made lagoons open to the Gulf of Aqaba. Once completed, Ayla Oasis will feature a variety of hotels, residential communities, Jordan’s first international standard golf course and a town centre encompassing a marina, retail units, cafes, entertainment and recreational facilities. Aseza partners with Turkish Airlines As part of ASEZA’s continuous efforts to promote Aqaba as a world class leisure destination, an agreement has been reached with Turkish Airlines who will begin operating 3 regular weekly flights from Istanbul Ataturk to King Hussein International Airport from April 2013. The route will link Aqaba with Turkish Airlines’ extensive flight network of 96 destinations, which is now the 5th largest in the world and includes more countries than any other global airline. Saraya Aqaba Saraya Aqaba is located on the western side of the city of Aqaba and built around a man-made lagoon. The USD 1 billion development will include five 5-star and 2 boutique hotels, a variety of residential offerings, a water and sports park in addition to numerous other entertainment options. Tala Bay Tala Bay was developed in a distinctive architectural style that blends Jordanian and regional architecture in a modern and friendly atmosphere. Another distinguishing feature of this single community resort is its 2-kilometre private sandy beach on the Red Sea, which offers wide selection of activities for the entire family. At the heart of Tala Bay is the Marina Town, consisting of villas, apartments, duplexes, swimming pools, commercial centres, restaurants and more. Tala Bay also features a private Beach Club and four international hotels. Madaen Al Aqaba Located Yamaniah Heights area in the southern beach of Aqaba, Madaen Al Aqaba consists of the Seascape Residents and the Seastar Residents. Seascape Residents is a group of 74 luxurious villas, nestled comfortably in a secure residential area between Aqaba’s magnificent mountain range and the blue waters of the red sea. Seastar Residents is an exclusive gated community, consisting of town houses and apartments, most of which enjoy stunning sea views. The finest amenities include swimming pools, a gym, spa and a high-end retail area.
  11. 11. JORDAN A SMALL COUNTRY WITH GREAT POTENTIAL I nter nation a l i n t e re st i n J o rd an i s g ro wi n g wi th m an y G C C inv es to r s t u r n i n g t o t h e Ki n g do m as a pro m i s i n g ne w real es t a t e m a r k e t , re c o gn i s i n g th e po ten ti al cap ital gain s t o b e m a d e . F rom th e co as tal to wn o f Aqa b a to th e c a p i t a l A m m a n , th e Ki n g do m h as s everal la r ge s cale re a l e st a t e p ro j e c t s u n der devel o pm en t. J ordan’s economy continues to grow at a steady pace, recording a GDP increase of 2.6% in the third quarter of 2012, says the Jordanian Department of Statistics (DOS). Most sectors have shown positive growth during Q3 2012, compared with the third quarter of 2011. According to DOS, the wholesale and retail industries, as well as the restaurants and hotel sector have achieved the highest growth rate by 8.2% in the third quarter of 2012, compared with the same period of 2011. As an emerging market with promising growth potential, Jordan enjoys the third freest economy in west Asia and North Africa, and the 32nd freest worldwide (2013 Index of Economic Freedom, Wall Street Journal/Heritage Foundation). The Kingdom has more free trade agreements than any other Arab country which are part of a series of significant economic reforms implemented by King Abdullah to attract foreign investment 14 I CITYSCAPE I MARCH 2013 and spur job creation. King Abdullah also embarked on an aggressive campaign to turn Jordan into a regional hub for information and communications technology (ICT), as well as a prominent tourism destination. In 2000, Jordan became a member of the World Trade Organisation. Hussein Safadi, General Manager at Asteco Jordan, pointed out that over the last couple of years, Jordan has made significant efforts to attract foreign investors, particularly from the GCC region. “The government has worked very hard over the last two years to attract GCC investors into the country’s economy, particularly into the power and oil resources sector, which is considered as the most important challenge to the country,” he said. Commenting on the current state of Jordan’s real estate market, Safadi said: “On the back of an improving political situation and good business environment, we expect this year to be better than 2012. In addition, some of the major developers have recently corrected their financial models and are planning to re-mobilise. Generally, the Jordanian real estate market is in a positive mood. Jordan has also proved to be the most stable country in the region recently given the surrounded circumstances.” Tourism Tourism is one of the most important sectors in the Jordanian economy. In 2010, it is estimated that tourism and services accounted for approximately 66% of the country’s GDP, real estate services firm CBRE says. According to Jones Lang LaSalle, the Jordanian government is implementing a new tourism strategy that aims to attract tourists not just from the GCC but also from Turkey, Greece and the Scandinavian countries, as sources indicate that these segments represent high potential for
  12. 12. JORDAN Marsa Zayed Cruise -Ship Treminal Jordan’s tourism sector. Furthermore, the government has been aggressively promoting the historical site of Petra after it was voted one of the new Seven World Wonders along with activities of the Dead Sea, enhancing the branding of the Jordanian territory not just within the region but also globally. According to the Jordan Tourism Board, tourism revenues rose by 22% to USD 3.3 billion in the first six months of 2012 compared to USD 2.7 billion in the same period of 2011, highlighting the continued growth of the country. Aqaba Special Economic Zone (ASEZ) With a mission to create a sound and attractive business environment in Aqaba that will provide an operational base for firms seeking to expand markets, in 2001, the Aqaba Special Economic Zone (ASEZ) was launched. ASEZ is a dutyfree, low tax multi-sector development zone encompassing the total Jordanian coastline of 27 kilometres, the sea ports of Jordan, an international airport and the city of Aqaba with its current population of 115,000 people. The zone encompasses an area of 375 square kilometres and offers global investment opportunities ranging from tourism, recreational and professional services to multi-modal logistics, value added industries and manufacturing. With tourism at its centrefold, ASEZ has currently several large scale real estate developments under its belt. The Aqaba Special Economic Zone Authority (ASEZA), the institution responsible for the management and development of ASEZ, says no less than 50% of the masterplan’s investment will take place in the tourism sector. ASEZA’s vision was to attract USD 6 billion of investments by 2020. By 2008, ASEZ had already attracted 18 billion of committed investments, ASEZA said. Within ASEZ, the Marsa Zayed development is the Kingdom’s largest ever tourism and real estate project. Master developer is Al Maabar Jordan Investments Company, a subsidiary of UAE-based Al Maabar which is formed by Abu Dhabi’s largest real estate developers and investment vehicles Mubadala, Aldar Properties, Sorouh Real Estate, Al Qudra Holding, Reem Investments and Reem International. Covering an area of 3.2 million square metres, Marsa Zayed is a mega mixed-use project, including a 2 kilometre waterfront with several marinas and contains highrise residential towers, retail, recreational, entertainment, business and financial districts as well as several hotels. Phase 1 is expected to be completed by 2014. Another mixed-use project within ASEZ is Saraya Aqaba, located on the western side of the city of Aqaba and built around a man-made lagoon. The USD 1 billion development will include a set of luxury hotels, a variety of residential offerings and a waterpark. MARCH 2013 I CITYSCAPE I 15
  13. 13. JORDAN “We are optimistic to see more new developments in the future because Jordan’s economy is distinguished by a healthy environment and good potentials. ” Saraya Aqaba The Ayla Oasis development aims to create 17 kilometres of new coastline by developing a series of man-made lagoons open to the Gulf of Aqaba. Once completed, Ayla Oasis will feature a variety of hotels, residential communities, Jordan’s first international standard golf course and a town centre encompassing a marina, retail units, cafes, entertainment and recreational facilities. Phase 1 of the project will be completed in 2014. Other tourism related projects in ASEZ include Tala Bay, which will be home to a variety of luxury hotels, various residences, a marina, golf club and retail outlets. Amman However, current real estate development is not limited to Jordan’s Red Sea coast. Amman, the largest city and capital of Jordan, also regarded as the business capital of the Levant, has several large scale construction projects underway such as the Al Abdali Urban Regeneration project, Amman’s new downtown, the Jordan Gate Towers and Taj Mall. In December last year, UAE-based property developer DAMAC Properties has topped out its first development in Jordan. Located in the heart of Al Abdali, The Heights is a luxury 36-storey residential tower and will be the highest in the country when it is delivered later this year. DAMAC is also working alongside The Heights to deliver two other buildings; The Lofts is already passed the sixth floor and The Courtyard is past the fifth. “We have experienced very strong interest from Jordanians, both in Amman and working abroad, as well as the international market. Only a very small number of apartments remain and we expect The Heights to have sold out before the end of the year,” commented Niall McLoughlin, Senior Vice President of DAMAC 16 I CITYSCAPE I MARCH 2013 Properties. Aqaba DAMAC added that many GCC investors are now turning to Jordan as a promising new real estate market, recognising the potential capital gains to be made. Looking ahead, Asteco believes Jordan’s real estate market is on the right track to diversify its product further. “We are optimistic to see more new developments in the future because Jordan’s economy is distinguished by a healthy environment and good potentials. Once the mega projects currently under construction are completed, this will positively reflected on the Jordanian economy in different sectors and also help to address the unemployment problem in the country,” Safadi concluded l
  14. 14. IRAQ STRENGTHENING THE NATIONAL HOUSING SECTOR Fourteen months after the end of the American occupation of Iraq, the country is in a rebuilding phase with construction having become a major driver of the local economy. Supported by the stabilisation of the political situation and an improving security level, the country is a safe place to invest for the next two decades, the Gover nment says. 18 I CITYSCAPE I MARCH 2013
  15. 15. IRAQ “There is no doubt that the Iraqi real estate market is tempting and developing dramatically, it has been expanded and grown in the last 4 years on the base of a sense of stability, both politically and economically. The achievement in the security situation that was made in the past few years helped the market to attract local and international investors to launch major projects in the country.” N early nine years after the start of the Second Gulf War in Iraq, the U.S. military ended its operations there in mid-December 2011. Over recent years, the country has been working hard to regain stability and boost the local economy. According to the World Bank, an improving security environment and foreign investment into Iraq are helping to spur economic activity, particularly in the energy, construction, and retail sectors. As the country is in a rebuilding phase in the wake of the U.S. occupation, construction is now a major driver of the economy. Still, Iraq’s largely state-run economy is dominated by the oil sector, which provides more than 90% of government revenue. For 2013, the World Bank has forecast a GDP growth rate of 12 percent, the highest in the region. On the back of increasing oil production, GDP is expected to further grow over the next few years. When visiting Cityscape Global in Dubai in October last year, Muhammed Al Darraji, Iraqi Minister of Construction and Housing, said that Iraqi oil production is projected to more than double its share of global production by 2020. Real estate According to UN-HABITAT, the United Nations agency for human settlements, the Iraqi housing sector suffers from major deficiencies including widespread housing shortages, particularly in urban areas where over 70 percent of the population lives. Furthermore, acute infrastructure problems alongside deteriorating housing conditions have created the slum-like conditions experienced by nearly 58% of urban residents, says UN-HABITAT. There is currently a shortfall of 2 million housing units for Iraq’s population, says the Housing Minister. In an effort to address these issues, in 2011, the Iraqi Government implemented the Iraq National Housing Policy, which outlines objectives for building new homes, offers opportunities to international developers over the coming years and covers areas such as land management, housing production, housing finance, infrastructure for housing, housing management & maintenance, housing construction materials and informal housing. At the end of last year, the government had 60,000 housing units under construction and is set to launch twelve further housing projects this year, Al Darraji stated. The lack of available housing offers great opportunities to investors while more stable economic conditions and an improving security level are having a positive effect on the real estate market, experts say. Ahmad Al-Emara, Operations Manager at Sama Al-Iraq Investment, an Iraqi investment company focusing on real estate, banking and construction, commented: “There is no doubt that the Iraqi real estate market is tempting and developing dramatically, it has been expanded and grown in the last 4 years on the base of a sense of stability, both politically and economically. The achievement in the security situation that was made in the past few years helped the market to attract local and international investors to launch major projects in the country.” Demonstrating their confidence in the Iraqi real estate market, Dubai-based global property developer Emaar Properties has signed a Memorandum of Understanding with the Iraqi Ministry MARCH 2013 I CITYSCAPE I 19
  16. 16. IRAQ “I do expect that the country will become a more and more vital environment for [attracting major] projects which Iraq hasn’t seen for three decades now, based on the increase of the national income of Iraq and the high demand in the market.” of Construction & Housing during Cityscape Global last year, to jointly develop residential, commercial and tourism development projects in Iraq. Ahmad Al Matrooshi, Managing Director of Emaar Properties, said the company will develop housing and commercial projects in Iraq to help address the growing demand for housing, office space and retail real estate in the country. “These in turn will meet the goals of the Iraqi National Development Plan to create new jobs and strengthen ancillary industries. Iraq is one of the promising emerging markets in the Middle East region, and our partnership with the Ministry of Construction & Housing complements our strategic goal to expand to key international markets,” Al Matrooshi said. The joint projects to be developed by the Ministry and Emaar will be decided in due course based on the National Development Goal of Iraq. Challenges With the economy projected to grow at 12 per cent this year, the Ministry has great confidence in Iraq as a strong investment platform for projects in several key sectors including housing and infrastructure development. While sharing this view, Al-Emara pointed out that current development should be accompanied by legislative changes that organise and facilitate the work of local and international companies in Iraq. “We still need more packages of laws and governmental services that enable developers to start bigger, more sophisticated projects with international partners to face the demand in different sectors. 20 I CITYSCAPE I MARCH 2013 [We also need] a healthier banking system and above of all that corruption inside the state departments [ceases],” he said. Al-Emara also identified the absence of new technologies and facilities alongside with an outdated banking system as major challenges that hinder the inflow of additional foreign direct investment and thus impede on Iraq’s growth. “I can add one more challenge which is the difficulties that companies face in attracting professional and qualified human resources from outside Iraq,” he added. According to the World Bank, other obstacles Iraq faces include a tenuous political system and concerns about security and societal stability, an outdated infrastructure and high unemployment. “Unemployment remains a problem throughout the country. Encouraging private enterprise through deregulation would make it easier for both Iraqi citizens and foreign investors to start new businesses,” the World Bank stated. Analysts say that if Iraq can overcome these challenges, it looms as one of the region’s most vibrant construction markets in the next decade. Prospects for the future Given the government’s efforts to boost the country’s real estate sector and the fact that an increasing number of international developers are looking to launch projects in the country, Al-Emara is positive about the further development of Iraq’s real estate market. “I do expect that the country will become a more and more vital environment for [attracting major] projects which Iraq hasn’t seen for three decades now, based on the increase of the national income of Iraq and the high demand in the market,” he concluded l
  17. 17. advertorial Developments for the Future In a time marked by shifting political and economic circumstances, investors and project owners face several challenges, both on a regional as well as on a global level. Orascom Development and Management (ODM), a subsidiary of the industry leader Orascom Development Holding AG (ODH), was created to carry the burden of responsibility towards the real estate development industry through transferring ODH’s 20 years of knowledge and experience as reliable investors. The desire to maintain a highly competitive par within this demanding industry has made it imperative for ODM to extend its comprehensive services. As Orascom Development Holding AG’s extended arm in development and management, ODM’s primary purpose is to comprehensively manage real estate development projects across the globe on behalf of credible investors in order to accomplish successful business operations. ODM’s models provide various services and real estate solutions that accommodate different project types. The business model is based on a close analysis and study of each and every project on file; the goal is to determine a proper business plan that will effectively and quickly achieve success. Upon this study, ODM exposes the project or the investor to the needed field of expertise inherited from Orascom Development Holding AG. Thus it opens the gate for our business partners to access a diversified resource of international expertise, qualifications, and best practices around the globe. This ultimately ensures an unquestionable added business value. ODM follows an explicit, very well defined workflow process that is only determined once the project in hand is fully examined. Every step in the process holds enough flexibility to accommodate various types of projects as well as different clients’ requirements. This may include different segments such as hospitality, residential, commercial and administrative among others as well as various end consumer categories. The overall flexibility of the business model permits cooperation in projects that require specific elements out of the whole business model chain. In other words, Orascom Development & Management acts not only as developing masters but also as professional consultants in all aspects related to real estate development and building living communities. This business model has proven successful over the past few years in Makadi, a project located in the heart of Makadi Bay, 28 kilometers from Hurghada on the Red Sea. Makadi is a leading integrated, self-sustained, gated community, designed throughout phases over a total area of 3,750,000 square metres. 80% of the land is to be developed as vast green areas. Developed by ODM and owned by Roaya for Tourist and Real Estate Development, Makadi‘s mission is to provide its residents a real opportunity to own a luxurious house with affordable prices and to create a marvelous community and atmosphere for every member of the family to enjoy all year long. While multiple projects are in the pipeline, the ODM business model prides itself with another success story: Sawari, the coming destination at Sahl Hasheesh, Red Sea, owned by Egyptian Resorts Company. ODM welcomes investors and businesses to benefit from its solid commitment, distinguished pool of talents and accumulated experience driven from ODH. Whether it is a new project or one that is being halted to financial, technical, and/or operational difficulties, working hand in hand with ODM will significantly enhance the project’s state and subsequently yield a rewarded return on investment. For more information about ODM visit our website: or call 02-24616199, +2-01281669935 , +2-01223326443
  18. 18. MOROCCO NORTH AFRICA’S GATEWAY TO EUROPE In the wake of the global financial crisis and political turmoil that has shaken the Arab region since 2011, Morocco’s real estate market is holding up well. An improved business climate and increased consumer demand for high-end real estate are boosting the market while the government pursues an aggressive tourism expansion strategy. Bab al Bahar, Rabat 22 I CITYSCAPE I MARCH 2013
  19. 19. MOROCCO Bab al Bahar, Rabat I n spite of the uncertainties raised by the Arab Spring, Morocco showed resilient growth over the last two years, a trend expected to continue in 2013. According to Jones Lang LaSalle, Morocco’s strengths lie in several facts which include its strategic geographical location not far from Europe, its young and relatively diversely well trained population and its strong GDP and economic growth with a population that has access to financing. Morocco also has strong banking and finance services less exposed to financial risks, the firm says. Additionally, the country has a well-developed communication network and improving transport connections such as ONCF’s (Organisation National des Chemins de Fers) projects that improve train stations and permit the use of high speed trains, a first for Africa (JLL). The Moroccan Government is also encouraging FDI through incentives such as a modified company taxation system (exemption for VAT and corporate tax for 5 years or more) in specific areas of Morocco for different economy sectors, JLL says. Real estate In the wake of the global financial crisis and political turmoil that has shaken the Arab region since 2011, Morocco’s real estate market is holding up relatively well. “Morocco’s real estate market is slowly recovering and government initiatives to attract foreign direct investments (FDI) to grow its tourism sector, combined with an improved business climate and increased consumer demand for high-end real estate are setting a fairly positive mood within the Moroccan real estate market,” commented Yousef Al Nowais, Managing Director of AL Maabar, a UAE-based developer who is currently constructing of a major mixed-use development in Rabat. According to Al Nowais, continued economic growth, combined with the ease of doing business in a country filled with a rich culture and attractive duty free system, increasingly draws foreign investors, developers and operators to Morocco’s real estate market, especially to the tourism related sector. “Real estate and tourism go hand in hand in Morocco as the tourism sector is the second largest contributor to the country’s overall GDP. The increased attractiveness of Moroccan real estate as an investment is further supported by the government’s Vision 2020, which aims to double the country’s tourism sector, making Morocco one of the world’s top 20 tourism destinations in order to draw 20 million annual visitors to the country by 2020, while elevating the market positioning of its tourist market as a worldclass destination that features internationally recognised brands,” Al Nowais further commented. The positive mood is also reflected in the country’s housing market which has seen residential property prices rise by 1% during the year to Q2 2012, according to the real estate price indexes (REPI) constructed by Bank Al-Maghrib and the National Land Registry Office. Gross rental yields in Morocco remain attractive based on a late 2011 report by real estate investment site Global Property Guide’s report. In Casablanca, apartments had an average yield of 7.7%, higher than the previous year’s 7.3% while apartments’ gross rental yields ranged from 6.8% to 8.6%. Bab al Bahar Developed by Bab Al Bahr Development Company (BBDC), a joint venture between the UAE’s Al Maabar International Investment and Morocco’s Bouregreg Agency, Bab Al Bahr is major mixed-use development in Morocco’s capital Rabat, consisting of residential complexes, hotels, leisure areas, office spaces, shops and art galleries, Said to compare to the likes of the Solidere project in Lebanon, Bab al Bahar is anticipated to set a new benchmark for the country’s mixed-use developments as it is expected to become the trendiest new downtown of Morocco. “Bab Al Bahr was designed with the vision of building an MARCH 2013 I CITYSCAPE I 23
  20. 20. MOROCCO Bab al Bahar, Rabat integrated city that combines innovatively designed residential, commercial, hospitality and retail properties with the rich culture and history of Arabian-Andalusian architecture in the heart of the country’s capital,” Al Maabar’s MD commented. “Strategically located where the Atlantic Ocean meets the Bouregreg River, Bab Al Bahr not only joins the two ancient cities of Rabat and Salé paying homage to historical heritage and contemporary glamour, but will also serve as the connecting ground for the residents, businesses and visitors of the new community that is continuing to flourish each day, bringing about the Renaissance or revival of Rabat,” Al Nowais further said. The project spreads across 292,200 square meters, has a builtup area of 512,00 square metres and includes seven districts – Jewel, Cultural, Salé Wall, Arts, Service, Marina and Riverfront Districts – all built around the Central District that houses a library, office, residential buildings and a public park. Morocco’s first tramway runs through the development which also showcases museums, art galleries, boutiques and the future Rabat Grand Theatre, which is being designed by Zaha Hadid, the internationally acclaimed London-based Iraqi architect who designed The Aquatic Centre to host the London Olympics 2012 and Dubai Opera House. Bab al Bahr is expected to be completed by 2016. Demand for top-end holiday accommodation rises With Bab al Bahr, BBDC is introducing a new luxury lifestyle to Morocco; the development will contain the country’s first Rotana hotel. Recently, there seems to be an increasing demand for highend properties in Morocco, both tourism and residential related. “Through our collaborative efforts with the Moroccan government, we are seeing increasing demand for high-end holiday accommodations in Rabat. Tourism has clearly been 24 I CITYSCAPE I MARCH 2013 designated as a national priority with the launch of Vision 2020 as Morocco strives to make its tourism sector a model of long-term sustainability,” Al Nowais said. Al Maabar’s manager also mentioned that the increased demand for prestigious properties is a growing trend in Morocco, supported by the rapid sales of the company’s Marina and Riverfront properties. “The Bab Al Bahr properties are attracting high-net worth individuals from Morocco as well as from across the Middle East and Africa who are seeking second homes and we are confident that demand for high-end holiday accommodations in Rabat will only continue to grow in the upcoming years as this port city has historically been a world-class cultural destination,” he explained. Retail However, it is not just Morocco’s tourism and prime residential sector that currently offers attractive opportunities to investors. According to Knight Frank’s 2011 Africa Report, Morocco’s retail market remains significantly undersupplied given the recent rise in consumer spending, thus offering numerous opportunities to investors looking to tap into the country’s promising retail potential. “One of the more dynamic real estate markets in the MENA region, Morocco has been experiencing a surge of activity in both the real estate and retail real estate industries. The emergence of a middle class favours the development of modern retail markets such as the Morocco Mall, Mega Mall and Rabat Centre,” Al Nowais commented. Opened in early December last year, the Morocco Mall, built on a 2 hectare site, is one of the largest shopping centres in North Africa and has over 280 retail stores. According to JLL, the successful opening generated over 1 million of visitors in 2 weeks and created jobs for around 6,000 people l
  21. 21. This is what a fountain actually is. A way to deeply involve with the spectator through the most fundamental and fascinating substance on earth. This is what we do, and we love it. Chances are that you have admired our work. Your child has probably played in a fountain we have created and it is very possible too that you have played in one when you were a child. In our 42-year long history we have designed & manufactured thousands of fountains across all continents of the world. Some are awe-inspiring, some are made to stimulate every sense of the spectator while others are made to breathe life into architectural marvels. Each and every part of our fountains is made of the highest quality materials — mainly Stainless Steel, by cutting-edge machines like laser cutters and some of the most talented fountain engineers in the world. And everything is controlled by ingenious, state-of-theart control systems, developed to make your fountain work safely, efficiently and most primarily reliably. Day-in, Day-out. For decades. The unparalleled quality is only a fraction of Fontana-made fountains. Fountain Systems Water Features Equipment Special Water Effects Underwater LED Lights Swimming Pool Lights Dancing Fountains Fountain Design Concept Development Consulting Services Custom Fountain Equipment It is the experience, the imagination, the knowledge and the flexibility behind every fountain you see out there. We spent the most part of the last 5 years as an RnD lab, we upgraded our production line with the addition of some amazing machines to deliver even better fountain equipment, even faster and we literally invented technologies that enhance performance while reduce operating costs. For example our LED lights range is a true revolution in underwater illumination. We also simplified fountains. It used to be a complex set of components, pipes, light fixtures, wires, control panels, etc. Now the majority of our fountains are delivered pre-assembled, pre-wired and pre-tested, minimizing installation time & cost. Plus everything is US & EU origin and TUV Rheinland has certified our QMS according to ISO 9001. We can assist you in every phase; from concept design & visualizations, to engineering, to manufacturing custom parts and design mesmerizing fountain choreographies & light shows. Visit our new website at to see more of what we do and don’t hesitate to contact us in order to discuss about your fountain project.
  22. 22. ASIA NEWS India real estate forecast for 2013 Anuj Puri, Chairman & Country Head of Jones Lang LaSalle India, shares his view on Indian real estate for 2013. THE ECONOMY IN 2013 India’s GDP was revised downward consistently in the last three quarters of 2012. In 2013, this trend will prevail – though the quantum of revision will be lower. The country’s economic environment will certainly improve in 2013, with a corresponding (though lagging) gain in momentum for real estate. The most tangible benefits of economic improvements on the Indian real estate space will be seen in the second half of 2013. The average inflation rate (based on the wholesale price index, or WPI) moderated to 7.4% in Q3 2012. This can be seen as sensibly low when compared with the average CPI, which remained at 10.2%. As a result of the slight moderation in WPI inflation, the Reserve Bank of India started softening its cash reserve ratio to improve the credit situation. Further easing of liquidity with the prime objective of reviving the GDP is expected in the first half of 2013. RESIDENTIAL REAL ESTATE IN 2013 Residential property prices have breached affordability limits in cities like Mumbai. Nevertheless, developers will have to factor in the ground realities of the business while debating the lowering of prices to catalyse sales in 2013. Obtaining the 57-odd permissions to begin construction of a project can take as much as two years. During this time, the cost of acquisition or even just holding the land for a project rises. Builders are already beset with the increased costs of license costs and cost of construction. However, it became evident in 2012 that homes are not selling at the current price points, and developers do need to re-calibrate their bottom lines while still remaining viable as businesses. It is extremely doubtful that the previously offered freebies and other such incentives will prove to be much of a booster in the current environment. Since the only way to catalyse healthier sales at this point is offering buyers tangible financial relief, we are likely to see drastic trimming of frills in projects to make them more marketable from a pricing point of view, and innovative payment schemes. Developers will also offer buyers attractive pre-launch benefits in a bid to accelerate sales momentum in the initial months following a launch. Developers with large-scale projects with a greater share of unsold inventory will be under greater pressure to offer discounts than those with smaller projects and limited inventories. Although most of the cities of India will see an increase in residential launches in 2013, the southern cities of Bangalore and Chennai will witness a decline in launches as compared to 2012 YTD. It is important to note that these two cities recorded a historical high in terms of the number of launches during 2012. To illustrate - Pune has recorded an average of close to 6,000 units per quarter over the past three years (2010–2012 YTD). This is more than twice the average quarterly launches recorded during the period 2007-2009. As a market that has grown too fast in such a short time, launches in Pune will be moderate in the near term. COMMERCIAL REAL ESTATE IN 2013 The fact that the major cities of Mumbai, NCR-Delhi, Bangalore and Chennai saw 72.5% of the total commercial space absorption in 2012 is a telling one, and indicates the forward path. These cities will grab the lion’s share of contribution in total commercial space absorption in 2013, certainly within the range of 74-76%. In terms of commercial real estate investment potential, Mumbai, Bangalore and Delhi NCR will continue to be of highest interest to 26 I CITYSCAPE I MARCH 2013 big ticket investors focused on real estate in 2013. We also expect investor-driven demand to remain upbeat in Chennai, Hyderabad and Pune. Mumbai will see the highest share of commercial corporate property transactions from companies focused on their own occupancy needs. The Delhi NCR region will be more popular with high net-worth and institutional investors. We expect 2013 to bring a larger-than-usual number of NRI investors into the commercial space arena. This is because NRIs are currently enthused by the prevailing exchange rate benefits and the fact that commercial real estate capital values are still 1525% under their 2007-08 peak levels. RETAIL REAL ESTATE IN 2013 In 2013, new organised retail project completions will increase significantly (by 109% y-o-y). Chennai, Hyderabad, Kolkata and Pune will be among the major contributors to this increase, with a 53% share of the country’s overall mall supply for 2013. The primary reason is that a sizable amount of supply that was expected to reach completion in 2012 has been being pushed to 2013. Altogether, India’s major cities like Mumbai, NCR-Delhi, Bangalore, Chennai, Pune, Hyderabad and Kolkata will see the addition of close to 9.5 million square feet of mall space in 2013. Mumbai, NCRDelhi, Bangalore and Chennai will together contribute 70% of the total retail space absorption. Other cities like Pune, Hyderabad and Kolkata will account for the remaining 30%. The Government’s nod to FDI in multi-brand retail will be a major driving factor for increased activity in 2013. Since the policy opens the portals to major MNC retail brands in India, the organised retail sector will see a major transformation in terms of its overall contribution in the mid-term. This, in turn, will positively impact the absorption of retail space over the next 12–24 months. The absorption is forecast to touch 6.8 million square feet and 7.1 million square feet in 2013 and 2014 respectively. That said, the benefits of the much-awaited FDI decision will not become fully evident in 2013, as it will take mall developers at least two years to incorporate the design elements and dimensions required to meet global standards. Mall developers are expecting a massive increase in demand for their projects in 2013; however, those whose shopping centres do not meet the requirements of international brands in terms of location, overall size, design, professionally managed operations will fail to see any action.
  23. 23. ASIA NEWS Demand drives mainland China luxury residential prices and rents up Luxury residential markets in major Mainland cities performed well during the fourth quarter of 2012, with both prices and rents rising steadily, according to Knight Frank’s recently released Greater China Property Market Report. Sales volumes in Beijing and Shanghai dropped from the highs of previous quarters, while developers in Guangzhou and Shanghai were active in launching new luxury homes. Shanghai In Shanghai, luxury prices increased 10.3% quarter-on-quarter, while growth in luxury monthly rents slowed to 0.2%. Again, luxury sales are expected to decline in the first quarter of 2013. Luxury homes in prime areas launched in the second half of 2012 were well favoured by buyers. Due to sustained demand in prime areas, luxury prices will maintain moderate growth in 2013. Beijing The price of luxury homes in Beijing grew 2.1% quarter-onquarter, while monthly rents also posted steady increases, at 2.5%. As a result of the overall market recovery during 2012, home prices could continue to grow moderately with steady investment returns in 2013, the report says. However, despite an expected increase in prices, a seasonal drop in sales in the first quarter of the year is forecast. Guangzhou Since the second half of 2012, Guangzhou›s luxury property market has experienced a market upturn in both sales volume and prices. During the fourth quarter in 2012, luxury residential prices increased 9.4% compared to Q3, the biggest rise since 2011. The average luxury residential monthly rent grew a further 0.5% from the previous quarter, the highest level of the past three years. Hong Kong retail rent projected to increase 9% in 2013 Improved local consumer sentiment and continuous mainland Chinese visitors’ spending kept the Hong Kong retail property buoyant in Q4 2012, according to the recently released Colliers International Retail Market Research & Forecast Report. From September to November 2012, Hong Kong Tourism Board’s statistics showed that there were a total of 12.2 million inbound visitors which represented a growth of 16.3% year-on-year (YoY), with 73% of the total coming from mainland China. This subsequently correlated to Hong Kong’s retail sales growth which remained vibrant, rising by 9.5% YoY in November 2012. The report also highlighted that despite the global economic uncertainties, international retailers continued their expansion plans, albeit with a more cautious approach. Many new overseas brands remained keen on securing prime locations in Hong Kong to set up their flagship stores before continuing with expansion in China or the greater Asia in long run. Case in point is the recent announcement of iconic brand Topshop’s opening in Hong Kong - a much awaited arrival – in Central. Even amid surging retail rents, the decision by the UK fashion brand to set shop in Hong Kong is a clear indication of the international retailer’s belief in Hong Kong’s potential in the long term. In Hong Kong, Topshop will partner with LAB Concept, the new contemporary retail subsidiary of Lane Crawford. The highly anticipated store will occupy a prestigious corner site within Asia Standard Tower in Queen’s Road Central. With the expected opening in May 2013, the store will span two floors, including ground-floor level, of over 12,000 sq ft in total and enjoys prominent street frontage with international fashion labels in the neighborhood. Helen Mak, Senior Director of Retail Services at Colliers International Hong Kong, who assisted Lane Crawford in securing this site, said: “Prime retail spaces in Hong Kong with such spacious size and significant street frontage is highly favoured by international retailers as they serve as a channel for image building in the local market as well as amongst visitors from the Asia region including mainland China who have substantial spending power.” “Although there has been talks on a slowdown by the world’s biggest high-end goods consumer, China is still very much a dominant player when it comes to luxury spending. Hong Kong is the perfect stepping stone for brands to establish themselves before venturing further to China,” she said. With sustained demand from international retailers and the extreme lack of leasing retail property stock at prime shopping locations, retail rents continued to increase at the end of 2012. According to Colliers’ research, the average retail rent of streetlevel-shops on key street segments increased 1.4% quarter-onquarter in Q4 2012, albeit at a milder rate than the previous quarter. Simon Lo, Executive Director of Research & Advisory, Asia commented that retail property owners were less aggressive in their rental demands as the slower retail sales growth throughout 2012 curtailed retailers’ business profits and hindered their ability to pay soaring rents. As the Hong Kong government’s restriction measures are in place in the residential market, a number of investors have changed to park their money in the commercial sector, which buoyed the sales activity of retail properties at the end of 2012. The overall number of investment sales of retail units, which each valued HKD 10 million (USD 1.3 million) or above, surged by 105% QoQ in Q4 2012. Lo said that investors focused on second- and third-tier streets in core shopping areas, or looked for investment opportunities in non-core districts in Q4 2012, given the limited stock available for sale in prime shopping locations. Looking ahead, Hong Kong’s retail market continues to see further growth potential with the support of the strong tourism performance, sustained demand from overseas retailers, an extreme lack of prime retail space, increasing household incoming and rising inflation. However, the uninspiring global economic conditions are likely to cause downside impact on the retail market. Thus, the average retail rent in Hong Kong is projected to increase 9% over the next 12 months, which is milder than the double-digit growth in 2012. MARCH 2013 I CITYSCAPE I 27
  24. 24. AZERBAIJAN Baku White City BETWEEN HISTORY AND MODERNITY, A COUNTRY REINVENTS ITSELF Ha v ing w itn e ss e d re m a r k a b l e eco n o m i c g ro wth between 2 0 0 6 and 2 008, A z er b a i j a n t o d a y i s p o si ti o n i n g i ts el f as an o u tward l o o ki ng c ou n tr y, p la c i n g h i g h i m p o r t a n ce o n real es tate devel o pm en t. 28 I CITYSCAPE I MARCH 2013
  25. 25. AZERBAIJAN Baku White City W ith the completion of the Baku-Tbilisi-Ceyhan Pipeline in 2005, the region’s second largest crude oil pipeline that runs from Azerbaijan to Turkey via Georgia (1,768 kilometres), Azerbaijan has completed its post-Soviet transition into a major oil based economy. Between 2006 and 2008, the country witnessed extremely high economic growth, mainly due to large and growing oil exports but also because of the growth in other non-export sectors such as construction, banking and real estate. Due to reduced oil output, in 2012 Azerbaijan’s economy grew at a low rate of 3.0% and is forecast to grow at 3.5% in 2013, says the Asian Development Bank (ADB). However, in the first half of 2012, growth in services, construction, and agriculture drove the nonoil economy up by 11.3%. Intensive construction in the first half of 2012 helped that subsector soar by 29.5% over the same period of 2011 (ADB). According to global architecture and design firm Broadway Maylan, which has recently opened a permanent base in Baku, Azerbaijan’s construction sector has increased in size seven fold over the past decade, with significant increases in new housing provision, two major roads being built and the reconstruction and construction of the Black City under the Baku White City project. Baku White City Baku White City represents the largest urban development in the Caucasus region; it is spread over an area of 221 hectares, will contain up to 18,000 commercial and residential units and will be able to accommodate about 50,000 people. The masterplan has been developed by renowned design firm Atkins while Foster + Partners and F+A Architects are also involved in the project. The development’s masterplan aims to transform the former Black City into a brand new, high quality urban quarter, acting as a catalyst for the regeneration of the city and the wider region (the Black City is an urban development from the first oil boom and has played a major role in the oil industry, performing activities of refining, storage and transportation of ‘black gold’). The project’s vision for Baku White City is to create a cohesive, carefully planned sustainable urban environment, offering a high quality of life for its residents as well as the opportunity to attract and promote investment, generate jobs and strengthen the city’s economy. “Architectural diversity, ecological compatibility and a considered integration of the new development into the existing urban context of the city were identified as major themes in the forming of the project concept. The result is a project with fascinating architecture and investment opportunities that stimulates land restoration and construction activity, along with creating an attractive environment and infrastructure,” the project’s Press Service said. Sustainability is paramount to Baku White City. The buildings, such as the Baku White City Office, are made using environmentally MARCH 2013 I CITYSCAPE I 29
  26. 26. AZERBAIJAN friendly materials, while alternative energy solutions are also being employed. “Construction of one of the project’s iconic office buildings has already begun. Designed by Atkins, Baku White City Office Building is a landmark, seen as an entrance to the project territory from the Nobel Avenue, forming a gateway of Baku White City. A development of international level, Baku White City Office Building features offices and other commercial areas. A beautiful plaza is planned in front of the building where the foundation stone of Baku White City is situated, and which will become a beginning of a vibrant promenade along the Nobel Avenue,” the Press Service commented. The 10-storey building occupies a total area of 20,000 square meters, has 9 high-speed elevators and includes underground and guest parking for up to 365 cars. At its initial design stage, Baku White City Office Building became well known among architects on the international arena and was repeatedly nominated as ‘the Best Project of the Future’ at various international exhibitions. Baku White City Office Building is the last in line of five buildings along the Street in the Green Hill District, which are currently being developed by local and foreign investors. Baku White City is oriented towards attracting both local and foreign investments, and offers various opportunities in the residential, offices, retail, tourism, education and health sectors. Other developments The construction of high-end residential developments is also currently advancing in the Azerbaijani capital. Later this year, Pasha Construction, in conjunction with Broadway Maylan and Mace International, will deliver the first tower of its Port Baku Residences scheme, one of the largest developments in the country. The major mixed-use scheme involves a total built-up area of 375,000 square metres comprising three 32-floor towers with 872 high-end residential apartments, three floors of 30,000 square metre commercial retail space and 2,000 car parking spaces over three levels of basement. With a vision to design an iconic building that transforms Baku’s skyline and promotes the city’s historic identity, Azinko Development has asked HOK to design the Flame Towers, which are set to become the tallest skyscrapers in the country. Consisting of Grade A commercial office space as well as residential, hotel and retail offerings, Flame Towers covers an area of 243,500 square metres and is expected to be completed shortly. As infrastructure plays a crucial part in real estate development, Azerbaijan is currently building a new terminal at the Heydar Aliyev International Airport, designed for the annual maintenance of about three million passengers, tripling the capacity of the airport. The country is also currently considering of building a 14 kilometre long bridge over Baku Bay, connecting both sides of Baku’s natural harbour. UAE & Azerbaijan Azerbaijan is one of Dubai’s largest trade partners. According to Hamad Buamim, Director General of the Dubai Chamber of Commerce and Industry, in 2011, Dubai’s non-oil trade with Azerbaijan was valued at AED 1.62 billion, almost doubling the trade between the two countries compared to 2010. 30 I CITYSCAPE I MARCH 2013 “We think this significant jump is the result of bilateral relations, improvements to the ease of doing business in Azerbaijan and enhanced trade flows between Dubai and Azerbaijan. Trade, agriculture and food processing, transportation and logistics, construction and infrastructure, tourism and hospitality, financial services and information and communication technology are important sectors for bilateral cooperation,” Buamim said. During a meeting of the UAE-Azerbaijan Joint Economic Committee in December last year, the two countries signed a Memorandum of Understanding (MoU) to establish a joint Business Council while discussing the potential for extension of mutual trade and economic relations. UAE Minister of Economy, Sultan Bin Saeed Al Mansoori, commented: “The ties between our businesses and other organisations have created the ideal foundation for a fruitful commercial and trade relationship. We are moving together on a path of growth and prosperity. The UAE is keen to uphold the appropriate institutional framework to enhance economic ties with Azerbaijan through the Joint Economic Committee meetings which can help both sides understand the real requirements of investors.” Economic challenges Although openness to global trade, recent tax reforms, and some improvements in regulatory efficiency have aided Azerbaijan’s transition to a more market-based system, the country faces several challenges which impede on its economic growth and thus on the development of a more favourable real estate investment climate, analysts believe. According to the 2013 Index of Economic Freedom, published by the Wall Street Journal and the Heritage Foundation, despite some improvement, property rights in the country are weak while the level of corruption continues to be substantial. Government regulations add to the costs of foreign investment, and monetary instability adds to uncertainty, the report states. Analysts say that long-term prospects will depend on world oil prices, the location of new oil and gas pipelines in the region, and Azerbaijan›s ability to manage its energy wealth to promote sustainable growth in non-energy sectors of the economy and spur employment. RETAIL IN AZERBAIJAN: A WINDOW OF OPPORTUNITY New to AT Kearney’s Global Retail Development Index (GRDI) in 2013, Azerbaijan (ranked 17th) has low market saturation, high fragmentation, and few strong national players, making it a favourable environment for international players. Since 2007, the country has had 5 percent yearover-year real GDP growth. Consumer spending remains moderate, with roughly three-quarters of spending going to food; credit offerings and improved banking are leaving a positive impact on the retail sector. Source: AT Kearney, GRDI 2013
  27. 27. MALAYSIA SOUTH EAST ASIA’S HOTSPOT Kuala Lumpur On th e b ack o f s t e a d y re a l e s tate pri ce g ro wth , a wel l devel o ped i nf r as tr u cture a n d a d y n a m i c bu s i n es s l an ds cape, M al ays i a i s c urren tly p ro v i n g v e r y a t t r a c t ive to f o rei g n i n ves to rs , es peci al l y t o th os e fro m t h e M i d d l e E a ster n reg i o n . Bl es s ed wi th s tu n n i n g natu r al beau t y, t h e c o u n t r y i s s ai d to o ff er pro f i tabl e o ppo rtu n i ti e s, par ticular ly i n t h e h i g h - e n d t ou ri s m s ecto r. 32 I CITYSCAPE I MARCH 2013
  28. 28. MALAYSIA W hen Malaysia became member of the Association of South East Asian Nations (ASEAN) in 1967, an organisation which aims to promote economic growth, social progress and cultural development among its members, the country moved away from a predominantly mining and agricultural-based economy and began a transition towards a more multi-sector economy. Consequently, since the 1980s, Malaysia has experienced rapid industrial growth and was increasingly regarded as a solid industrial base with high development potential by international firms. In the late 1990s, Malaysia’s property market was hard hit by the Asian Financial Crisis that plunged many countries into deep recession. However, Malaysia’s economy recovered from the crisis sooner than neighbouring countries and real estate prices have climbed steadily since then, according to the Malaysian Institute of Estate Agents. Today, the country’s real estate market is in a positive overall mood, despite global economic concerns and the upcoming general elections later this year, says Nabeel Hussain, Senior Vice President at CBRE Malaysia. Investment In line with strong economic and real estate price growth, Malaysia’s property market currently proves attractive to overseas investors, particularly to those from the Middle Eastern region. According to property investment company IP Global, Malaysia’s popularity with Middle Eastern investors has grown exponentially over the last two decades, due to proximity to the Middle East and the strong cultural and religious ties with the region. Kuala Lumpur also happens to be the global centre for Islamic finance, with 78% of Islamic bonds issued in 2011 underwritten by Malaysian banks, IP Global says. “Malaysia offers an attractive combination of a friendly investment and foreign ownership regime, affordable property values, high standard of living, pleasant climate, and a diverse racial and social mix; that it is also predominantly Muslim is an added plus for Middle East investors,” Hussain of CBRE added. Masood Al Awar, CEO of UAE-based real estate development and marketing company Tasweek, commented: “For starters, Malaysia offers a strategic location right at the heart of South East Asia. Its market-oriented economy thrives off pro-business Government policies, political stability, and a well developed infrastructure. It also has a productive workforce which is young and educated and is considered the country’s greatest asset. The dynamic business landscape has transformed Malaysia into one of the world’s top investment destinations for offshore manufacturing operations. More than 5,000 foreign companies from over 40 countries have set up operations in the country, with a number expanding and diversifying their operations, showing confidence in Malaysia’s business potential. Overall, Malaysia offers investors a buoyant business environment that has the right elements in place to spur growth and profitability.” Al Awar also added that Malaysia is one of the most technologically developed countries amongst the ASEAN region’s industrialising nations, providing an excellent hub for investors to shape their future. Demand for high-end properties high According to the November 2012 Kuala Lumpur market report by CBRE, out of the nearly 58,189 condominiums and serviced residences in the capital valued at or above MYR 350 per square foot (USD 115), about 21% are considered ‘luxury.’ “Demand at the very top end of the market appears to still be strong, as evidenced by sales at projects such as Banyan Tree Signatures and St Regis Residences,” Hussain commented. Newly launched or previewed high-end residential projects during Q3 2012 included the 335-unit Horizon Residences in Jalan Tun Razak, priced at USD 490 per square foot, and the 121-unit Serai in Bansgar, priced at USD 330 per square foot. As a response to increasing demand for top-end residential property, Tasweek is currently constructing The Haven Lakeside Residences, a luxurious condominium development in Ipoh, a historic city located 200 kilometres north of Kuala Lumpur. “Ipoh is a peaceful city with good infrastructure and a friendly community. Its property landscape is underdeveloped though; the condo lifestyle has not yet taken firm roots, for example. We wanted to be the first Middle Eastern real estate player to thoroughly explore this market,” Al Awar said. The AED 220 million (USD 60 million) urban complex covers 13.8 acres of land with 497 units of luxury housing in addition to another 10 acres of private virgin land in Ipoh City. The entire project is expected to be finished this year. Tourism In an effort to diversify the economy and make it less dependent on exported goods, the Malaysian Government has pushed to The Havean Lakeside Residences, Ipoh MARCH 2013 I CITYSCAPE I 33
  29. 29. MALAYSIA The Havean Lakeside Residences, Ipoh “Gulf and Asian countries continue to be drawn to Malaysia’s superb tourism perks, which include affordable living and entertainment pricing and other unique features such as rich music and arts, savoury cuisine, and rainforest climate. Malaysia’s dramatic landscape framed by rugged mountains, slopes sweeping down to floodplains alive with forest flora and fauna, sandy beaches and scenic mangroves is a must see for the intrepid adventurer. The country has different geographies in 11 states and 2 federal territories that offer diversity and unlimited exploration,” Al Awar added. increase tourism to the country. As a result, tourism has become one of Malaysia’s largest sources of income. Tourist arrivals have grown steadily over recent years; for 2011, Malaysia recorded 24.7 million tourist arrivals as opposed to just 5.5 million arrivals in 1998 (Tourist Development Corporation of Malaysia). This scenario demonstrates an excellent base for tourism related real estate development and investment, Al Awar believes. In October last year, Tasweek entered into a joint venture with Casabrina Vacation Villas to develop, own, operate and market the luxury resort’s properties in the country’s western state of Pahang. “After the Asian downturn, Malaysia’s real estate industry focused intensely on steady and firm growth. The country put in place strong fundamentals and a robust legislative framework to protect the sector and its investors. [On top of that], Malaysia has been able to successfully maintain a multi-ethnic, multicultural, and multilingual society that makes for an excellent tourism destination,” he commented. 34 I CITYSCAPE I MARCH 2013 Looking to a positive future According to Paul Preston, Regional Director of IP Global, the population growth and the government’s investment in the capital are what make Kuala Lumpur particularly interesting as a property investment option. Throughout last year, the government was committed to spending USD 500 million on Kuala Lumpur development projects and is also looking to attract more multinationals to the city. According to IP Global, Malaysia’s population has increased 34% since 2000 and the Government aims to bring in 500,000 foreign white-collar workers to the capital by 2020. CBRE also sees positive prospects for the Malaysian property market. “Most sectors are still primarily driven by domestic demand, making them less susceptible to fluctuations in foreign demand; furthermore, Malaysia’s value proposition of a high quality of life, combined with reasonable operating costs and taxation rates, safety and security as well as developed educational/medical systems, make it an attractive location for expatriates,” Hussain concluded l
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