ABU DHABI // At Cityscape Dubai last October, the property market was beginning to feel the tremors of a serious crisis.
Lehman Brothers had collapsed just two weeks earlier and wordssuch as "default" and "insolvency" were slowly creeping into a lexicon previously dominated by superlatives.
All the same, two Dubai Government-controlled companies used Cityscape to announce their grandest projects yet. The Nakheel Tower, at more than 1km in height, would dwarf the Burj Dubai by some 200 metres. The Jumeira Gardens development by Meraas would rank as one of the emirate's most costly, at Dh350 billion (US$95.29bn), equivalent to double the nation's annual revenue from oil exports.
One year later, images of these extravagant projects have faded. Neither has made any progress. What is more, Dubai's largest developers decided to attend this year's conference only at the last minute, reversing their earlier decisions to stay away. Emaar Properties, the largest developer in the region, and Nakheel initially said they would not participate in this year's conference, arguing they needed to focus on project delivery.
While last year, developers were making a last-ditch attempt to jump-start the economy with phantasmagorical images of the buildings they had planned, this Cityscape is likely to be dominated by the same companies trying to prove to past buyers that they are still operating and trying to find ways to get their towers built.
"It's more about instilling a sense of confidence in people who have already bought than to entice new buyers," said Chet Riley, an analyst at Nomura Securities. "It's a theme of reassurance at a time when private developers are being squeezed to the point of collapse."
This year's discussion panels have titles such as "Hotel Investment in Dubai: Is The Bonanza Over?" and "Emerging Markets Amid Recession: Have They Lost Their Shine?"
The speakers will try to answer questions about when investment will return to the economy and when banks will resume lending.
Donald Trump is scheduled to give the keynote address, while the plot of land where the Trump International Hotel and Tower was going to be built is covered in sand and used as a car park.
Rohan Marwaha, group director of Cityscape, said the focus had changed dramatically from last year. "Completion and delivery are really the themes of the event now," he said. "It's an opportunity for real estate professionals and major investors to really take stock of what's happened in the last 12 months and adapt to these changing dynamics."
The conference halls will not resemble a ghost town, but with as many as 60 per cent of developers seeing their businesses stall and one third of projects on hold or cancelled, the atmosphere will have changed, Mr Marwaha said. Cityscape organisers are expecting a decline in exhibitors and visitors of between 25 and 30 per cent.
However, the room could look emptier than that because many exhibitors have chosen to share a stand with another company to save costs.
Where there were roughly 800 stands last year, there will be fewer than 500 this year.
"It would be unrealistic for anybody to assume we could attract the same number of exhibitors," Mr Marwaha said.
The two largest stands at this year's exhibition will be a company from Abu Dhabi, Aldar Properties, and a company from Dubai, Meydan City, something that is indicative of the changes in the industry.
Last year, Meraas Development, a property developer owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, had the largest stand. In the months since, it has quietly reduced operations and is working on a new masterplan for its project, according to people familiar with the company.
Michael Atwell, the head of the regional office of the property consultancy Cushman and Wakefield said investors and businesses were not coming to be stunned with fantastic designs this year. "Cityscape is a good reflection of the market," he said. "People will go there, see what people are saying, talk to the big developers? They will be interested in where the market is." In particular, because solid data on the property market and wider economic trends is scarce, it takes a meeting of all stake holders to get a true opinion of the market, Mr Atwell said.
Vincent Easton, the director of sales at the property company Engel and Voelkers, said the key message of the conference as a whole should be progress. "From the whole economic perspective, it needs to be seen that progress is still being made even though there has been a setback," he said. "Existing investors want to come down and meet their developer and find out what's happening. International investors will want to get a sense of where the market is going."
One likely refrain at Cityscape will be that Dubai's property prices have hit bottom, Mr Easton said. Property prices have started increasing in some areas and distressed asset funds are circling some projects, which are both clear signs of a possible recovery on the horizon.
With development companies facing a shortage of cash and the off-plan business model completely upended, dramatic restructurings are under way. At the forefront of this process is Nakheel, the ambitious government-owned company that built the World archipelago and the Palm islands off the coast of Dubai. The company has to pay back a $3.5bn Islamic bond by the end of the year.
Olivier Laroche, a manager at the strategic consultancy AT Kearney in Dubai, said the crisis was testing every company and would reveal over time the most solid businesses. "If you look at the lessons learnt from the Asian crisis in 1997, you can see how these companies changed," he said. "To be a global player in real estate, a company needs to diversify revenue and become an asset manager rather than focus on development, which is an activity with huge ups and downs."
Mr Laroche said the sector had yet to see the necessary consolidation. There were hundreds of developers officially registered with the Real Estate Regulatory Agency, but this number was likely to fall substantially, he said.
bhope@thenational.ae
COMPANY%20PROFILE
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Expert input
If you had all the money in the world, what’s the one sneaker you would buy or create?
“There are a few shoes that have ‘grail’ status for me. But the one I have always wanted is the Nike x Patta x Parra Air Max 1 - Cherrywood. To get a pair in my size brand new is would cost me between Dh8,000 and Dh 10,000.” Jack Brett
“If I had all the money, I would approach Nike and ask them to do my own Air Force 1, that’s one of my dreams.” Yaseen Benchouche
“There’s nothing out there yet that I’d pay an insane amount for, but I’d love to create my own shoe with Tinker Hatfield and Jordan.” Joshua Cox
“I think I’d buy a defunct footwear brand; I’d like the challenge of reinterpreting a brand’s history and changing options.” Kris Balerite
“I’d stir up a creative collaboration with designers Martin Margiela of the mixed patchwork sneakers, and Yohji Yamamoto.” Hussain Moloobhoy
“If I had all the money in the world, I’d live somewhere where I’d never have to wear shoes again.” Raj Malhotra
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Anxiety and work stress major factors
Anxiety, work stress and social isolation are all factors in the recogised rise in mental health problems.
A study UAE Ministry of Health researchers published in the summer also cited struggles with weight and illnesses as major contributors.
Its authors analysed a dozen separate UAE studies between 2007 and 2017. Prevalence was often higher in university students, women and in people on low incomes.
One showed 28 per cent of female students at a Dubai university reported symptoms linked to depression. Another in Al Ain found 22.2 per cent of students had depressive symptoms - five times the global average.
It said the country has made strides to address mental health problems but said: “Our review highlights the overall prevalence of depressive symptoms and depression, which may long have been overlooked."
Prof Samir Al Adawi, of the department of behavioural medicine at Sultan Qaboos University in Oman, who was not involved in the study but is a recognised expert in the Gulf, said how mental health is discussed varies significantly between cultures and nationalities.
“The problem we have in the Gulf is the cross-cultural differences and how people articulate emotional distress," said Prof Al Adawi.
“Someone will say that I have physical complaints rather than emotional complaints. This is the major problem with any discussion around depression."
Daniel Bardsley
COMPANY%20PROFILE
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NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
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
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
A Long Way Home by Peter Carey
Faber & Faber
Omar Yabroudi's factfile
Born: October 20, 1989, Sharjah
Education: Bachelor of Science and Football, Liverpool John Moores University
2010: Accrington Stanley FC, internship
2010-2012: Crystal Palace, performance analyst with U-18 academy
2012-2015: Barnet FC, first-team performance analyst/head of recruitment
2015-2017: Nottingham Forest, head of recruitment
2018-present: Crystal Palace, player recruitment manager
Company profile
Name: Dukkantek
Started: January 2021
Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani
Based: UAE
Number of employees: 140
Sector: B2B Vertical SaaS(software as a service)
Investment: $5.2 million
Funding stage: Seed round
Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office
Schedule for show courts
Centre Court - from 4pm UAE time
Johanna Konta (6) v Donna Vekic
Andy Murray (1) v Dustin Brown
Rafael Nadal (4) v Donald Young
Court 1 - from 4pm UAE time
Kei Nishikori (9) v Sergiy Stakhovsky
Qiang Wang v Venus Williams (10)
Beatriz Haddad Maia v Simona Halep (2)
Court 2 - from 2.30pm
Heather Watson v Anastasija Sevastova (18)
Jo-Wilfried Tsonga (12) v Simone Bolelli
Florian Mayer v Marin Cilic (7)
The%20specs
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The%20specs
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MATCH INFO
Manchester United 1 (Fernandes pen 2') Tottenham Hotspur 6 (Ndombele 4', Son 7' & 37' Kane (30' & pen 79, Aurier 51')
Man of the match Son Heung-min (Tottenham)
RESULTS
%3Cp%3E%0D5pm%3A%20Al%20Maha%20Stables%20%E2%80%93%20Maiden%20(PA)%20Dh80%2C000%20(Turf)%201%2C400m%0D%3Cbr%3EWinner%3A%20AF%20Alfahem%2C%20Tadhg%20O%E2%80%99Shea%20(jockey)%2C%20Ernst%20Oetrel%20(trainer)%0D%3Cbr%3E5.30pm%3A%20Al%20Anoud%20Stables%20%E2%80%93%20Handicap%20(PA)%20Dh80%2C000%20(T)%201%2C200m%0D%3Cbr%3EWinner%3A%20AF%20Musannef%2C%20Tadhg%20O%E2%80%99Shea%2C%20Ernst%20Oertel%0D%3Cbr%3E6pm%3A%20Wathba%20Stallions%20Cup%20%E2%80%93%20Handicap%20(PA)%20Dh70%2C000%20(T)%201%2C400m%0D%3Cbr%3EWinner%3A%20AF%20Rasam%2C%20Tadhg%20O%E2%80%99Shea%2C%20Ernst%20Oertel%0D%3Cbr%3E6.30pm%3A%20Arabian%20Triple%20Crown%20Round%202%20%E2%80%93%20Group%203%20(PA)%20Dh%20300%2C000%20(T)%202%2C200m%0D%3Cbr%3EWinner%3A%20Joe%20Star%2C%20Tadhg%20O%E2%80%99Shea%2C%20Helal%20Al%20Alawi%0D%3Cbr%3E7pm%3A%20Liwa%20Oasis%20%E2%80%93%20Group%202%20(PA)%20Dh300%2C000%20(T)%201%2C400m%0D%3Cbr%3EWinner%3A%20AF%20Alajaj%2C%20Tadhg%20O%E2%80%99Shea%2C%20Ernst%20Oertel%0D%3Cbr%3E7.30pm%3A%20Dames%20Stables%20%E2%80%93%20Handicap%20(TB)%20Dh80%2C000%20(T)%201%2C400m%0D%3Cbr%3EWinner%3A%20Silent%20Defense%2C%20Oscar%20Chavez%2C%20Rashed%20Bouresly%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
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.”
Company Profile
Name: JustClean
Based: Kuwait with offices in other GCC countries
Launch year: 2016
Number of employees: 130
Sector: online laundry service
Funding: $12.9m from Kuwait-based Faith Capital Holding
