A crowd of at least 120 people queued up outside Nakheel's Dubai sales office, some through the night, to get their hands on one of 360 new villas the developer is building.
Nakheel staff handed out bottles of water to the crowds of people standing in the heat, many of whom were paid a couple of hundred dirhams by investors to keep their places in the line.
Despite the heat and the long queue, the atmosphere was calm and orderly as potential buyers waited to try to purchase one of the Dh4 million and Dh5m four and five-bedroom villas set to be developed at Nakheel's 3.5 square kilometre Jumeirah Park scheme in Dubai over the next three years.
"Without doubt we are seeing a recovery across all Nakheel schemes," said Ali Rashid Lootah, the Nakheel chairman. "The market is strongly recovering. Prices are improving; volumes are improving but we haven't really quantified the figures. But I can tell you it's much better than previous years.We are launching new projects. We have no supply of properties. All the existing property in the pipeline is already pre-booked."
Local agents said by mid-afternoon all of the prime five-bedroom properties located close to the lake at Jumeirah Park had been sold for about Dh4.7m each and some were being marketed to new purchasers at a 25 per cent premium. However, they reported some villas in the scheme remained available and unsold at the end of the day.
"You have to bear in mind that sellers might well be asking for a 25 per cent premium but that doesn't mean buyers will pay that amount," said Mario Volpi, a sales and leasing manager at Cluttons, an estate agent. "At the end of the day it's like water. It will find its own price."
The scenes at the sales office came just as the property agent Jones Lang LaSalle published its market report for the three months to the end of last month, revealing prices for villas in Dubai rose so rapidly over the period they now cost 14 per cent more than they did in early 2008. It said villa prices in the city rose by 23 per cent over the past 12 months alone as demand began to return to the property sector.
Apartments in the city also rose in value over the year, according to the report, recording a 4 per cent increase in sales values. However, they still cost 18 per cent less than they did during the market peak four years ago.
The report found house prices in Dubai rose by an average of 14 per cent over the 12 months to August this year and rents increased by 7 per cent as the emirate's property market further recovered.
The number of homes in Dubai increased by about 2,000 in the third quarter of this year to reach a total of 349,000.
However, in Abu Dhabi it is a completely different picture.
Average asking prices for homes in the city's investment areas dropped by a further 3 per cent in the quarter, to Dh10,200 per square metre, representing a total fall of 53 per cent from the market peak of Dh21,500 sq metres at the end of 2008.
With up to 6,000 units scheduled for completion in the fourth quarter, the agent said the total stock could reach 208,000 units by the end of the year, although further delays were expected.
But Jones Lang LaSalle said the sales market in Abu Dhabi had shown signs of increased activity in the third quarter with interest primarily from Emirati purchasers.
"Market sentiment is definitely improving and both Dubai and Abu Dhabi remain major drivers in the regional real estate market. But we are continuing to move away from one holistic model," said Alan Robertson, the chief executive of Jones Lang LaSalle, Middle East & North Africa.
"As the market continues to mature we will see more divergence. Well managed, high-quality assets in prime locations will continue to perform while those in secondary locations will need to be ever more creative to attract and retain tenants who now have ever more choice and are moving with their feet to source and find the best deals available.
"In terms of market specifics, it's a very fragmented picture. Dubai is generally ahead of the curve as rents are finally starting to pick up while indicators suggest Abu Dhabi has yet to bottom out."
lbarnard@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
FIGHT CARD
Welterweight Mostafa Radi (PAL) v Tohir Zhuraev (TJK)
Catchweight 75kg Leandro Martins (BRA) v Anas Siraj Mounir (MAR)
Flyweight Corinne Laframboise (CAN) v Manon Fiorot (FRA)
Featherweight Ahmed Al Darmaki (UAE) v Bogdan Kirilenko (UZB)
Lightweight Izzedine Al Derabani (JOR) v Atabek Abdimitalipov (KYG)
Featherweight Yousef Al Housani (UAE) v Mohamed Arsharq Ali (SLA)
Catchweight 69kg Jung Han-gook (KOR) v Elias Boudegzdame (ALG)
Catchweight 71kg Usman Nurmagomedov (RUS) v Jerry Kvarnstrom (FIN)
Featherweight title Lee Do-gyeom (KOR) v Alexandru Chitoran (ROU)
Lightweight title Bruno Machado (BRA) v Mike Santiago (USA)
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
World Cricket League Division 2
In Windhoek, Namibia - Top two teams qualify for the World Cup Qualifier in Zimbabwe, which starts on March 4.
UAE fixtures
Thursday February 8, v Kenya; Friday February 9, v Canada; Sunday February 11, v Nepal; Monday February 12, v Oman; Wednesday February 14, v Namibia; Thursday February 15, final
