Gulf Construction Online

Real Estate

News in brief

01 July 2020

UAE developers adopt ‘wait and watch’ approach

Nearly 90 per cent of residential projects in the UAE that were under construction before the Covid-19 pandemic are still proceeding.

However, construction contracts may see delays in completion due to the developer induced postponements or interruptions in logistics of both labour as well as construction materials, said a recent survey conducted by Knight Frank, the leading property agency and consultancy company.

Knight Frank found that developers were largely taking a ‘wait and watch’ approach when it came to projects that were under planning, with an overwhelming majority of projects being either put on hold (50 per cent) or proceeding with expected delays (37.5 per cent).

A summary of the key findings from the survey’s as well as their market outlook on the different sectors revealed that the residential market had just started to show tentative signs of entering into a growth phase prior to the lockdown.

Some of the residential/mixed-use developers are now showing weakened confidence in the market reverting to the growth phase in the short term as evidenced by the shift in their debt strategy to longer term holds.

From a buyer perspective, the market has seen a drop in off-plan sales with at least a quarter of the respondents seeing a drop of over 50 per cent in transaction volumes as compared to Q1 of this year.

According to the survey, around 53.5 per cent of office leasing deals in the UAE under negotiation at the start of the pandemic face delays and 30.8 per cent are on hold, signalling the fluid demands of businesses as they try to adapt to market conditions.

Bayut, Dubizzle merge to set up $1bn company in Dubai

UAE-based Emerging Markets Property Group (EMPG) and OLX Group, owners of home grown technology firms Bayut and Dubizzle, have announced the merger of their Mena and South Asia operations to set up a Dh3.6 billion ($1 billion) unicorn company in Dubai.

The agreement includes a Dh550 million investment round, led by existing EMPG shareholders and OLX group. With this merger, OLX has become EMPG’s largest single shareholder with 39 per cent stake.

Under this merger deal, both Dubizzle and Bayut will be operated by EMPG in the UAE.

Global presence for EMPG other than the UAE includes Pakistan with Zameen, Bangladesh with Bproperty, Morocco and Tunisia with Mubawab, and Thailand with Kaidee, with all assets under EMPG ownership.

In addition to Dubizzle, the merger brings OLX entities in Egypt, Lebanon, Pakistan and several GCC countries into EMPG’s fold as well.

Ammar Al Malik, Managing Director of Dubai Internet City, where Bayut and Dubizzle were launched, says: “Even in these exceptional times, Dubai has demonstrated its attractiveness as an international investment destination. The success of Dubizzle and Bayut shows once again that the UAE’s technology sector is growing, thanks to the vision of our leaders to create a knowledge-based, innovation-driven economy.”

The aggregated value of properties sold in the UAE, Egypt, Lebanon and Pakistan is estimated at Dh330 billion, providing a commission pool for real estate agencies of over Dh7 billion per annum, he adds.

Luxhabitat, Gulf Sotheby’s to create luxury realty platform

Luxhabitat, a pioneer in Dubai’s high-end residential property market and one of the strongest homegrown real estate brands, has announced a long-term strategic alliance with Gulf Sotheby’s International Realty – the global luxury real estate firm, – which will result in the creation of a unified real estate platform moving forward.

The partnership will see Gulf Sotheby’s powerful sales engine with record-breaking deals and global reach combine forces with Luxhabitat’s strong marketing and technology platform to create the most influential luxury real estate firm in the region supported by the world’s largest global realty brand, Sotheby’s International Realty.

The partnership will result in a merger of the sales and operations teams from both companies and a 10-year partnership agreement in design, branding, marketing, and technology.

The new platform will also be co-branded to combine the market strengths of both companies and increase brand awareness, market share, and customer loyalty, it states.

The Dubai-based brokerage arm of the business will be spearheaded by George Azar as the Chairman and Chris Whitehead as Managing Partner leading the sales and operations teams.

Oriol Font will remain the CEO at Luxhabitat, which will serve as the technology and marketing partner for the new co-branded platform, while simultaneously leading the global expansion of the proptech business.

The partnership will consolidate the market share of the two firms to create a combined force of 75+ sales brokers, a specialised range of local and global technology and marketing tools, and represent the largest digital share of voice in Dubai’s real estate market, which has been led by Luxhabitat for several years.

With this deal, Luxhabitat will now be focused on supporting established real estate players in the technology and marketing space, that will prove to be a gamechanger for the traditional real estate brokerage model.