Archive for the ‘Overseas Property’ Category
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In most property markets around the world – both old and new – the concept of buying off-market properties directly from developers is an appealing one. This too is the case in Abu Dhabi, but there are circumstances here that make this city unique among emerging markets.
Nowhere else has witnessed the rates of growth we are currently seeing. It is because of the pace of this growth that new circumstances have arisen whereby buying a property from a previous owner is as appealing (sometimes more so) than if you bought it directly from the developer.
Typically, many properties there are sold literally within minutes of the launch of a new development. Whilst on many occasions it is a tremendous achievement to secure these properties at this stage (due to the huge levels of demand at launch parties etc), there are other considerations to bear in mind.
Because the increase in property prices can be witnessed on almost a monthly level, you can often find properties that were purchased several months previously from a developer trading at prices much lower than current releases on different floors in the same tower from the same developer. The owner will have applied a ‘premium’ to his property, and this is passed on transparently to the new buyer.
In some cases – if the property was bought, say, 6 months ago direct from a developer – the savings can be significant. The original owner has seen a solid capital appreciation on his investment, and is prepared to sell prior to completion. The property is still very much off-plan as it is 18 months plus from completion (in this example). Furthermore, it will see yet more growth and greater capital appreciation as it nears completion. This is good news for those who wish to hold onto their new property and rent it out or live in it.
As a rule, those looking for a “quick flip” need to source properties closer to original launches. Those looking for a longer term hold will generally find better deals looking at properties that have been on the market for some time. Prospective investors should not be put off if a property has changed hands a number of times even. This demonstrates a healthy demand for properties of that nature by that developer. The graph below demonstrates how some locations fall out of vogue while others show much more steady performance. Most interestingly from our point of view, searches for Abu Dhabi property is clearly on the up suggesting that investors are now starting to take notice of the incredible growth in the UAE’s capital.
The estimated demand for hotel rooms in Abu Dhabi by 2012 has been upped by 4 000 to an estimated 25 000, according to the Abu Dhabi Tourism Authority (ADTA).
The rise is the result of the capital’s booming tourism industry, with a predicted 2.7m visitors staying in hotels by 2012. This is a full 12.5% more than originally predicted in 2004. The plan for development will see 13 000 new rooms being built over the next five years.
Focus on the tourism sector is an important part of the emirate’s strategy to diversify its economy away from hydrocarbons over the coming years.
According to the World Tourism Council, the industry was worth $8 trillion in 2007, and is projected to cross the $15 trn threshold in the next decade. The annual growth in the industry is at 4.4%, with the Middle East region outstripping this at 5.2% annually over the next few years.
According to previous reports, the value of tourism projects in Abu Dhabi crossed the Dhs 305 billion mark at the end of last year.
Mubarak Al Muhairi, ADTA Director General, stated that while revolutionary, the five year plan to implement this is based on the overriding principle of managed growth.
The Executive Council of Abu Dhabi gave the go ahead in a meeting of 17 April for what was described as a “new approach to government”. It follows months of negotiations with senior officials aimed at reforming everything from healthcare and education to policing and the environment.
Each of the 26 government departments will make public their long term planning strategies over the next two months. This includes numerous action plans for the next five years. It is the latest in a series of 110 laws and 75 decrees passed since 2005 that pave the way for sweeping reforms.
Addressing a meeting of Heads of Departments attended by the Crown Prince of Abu Dhabi, Sheikh Mohammed Bin Zayed, Mr. Mohammed Ahmad al Bowardi, Secretary General of the Executive Council, said the departments would adopt “the principle of accountability as a road map towards developing performance”.
“We will monitor delivery and, where necessary, we will intervene with support designed to ensure our government goals are achieved,” said Abdullah al Ahbabi, head of the Council’s performance management division.
The changes introduce the concept of key performance indicators to measure the quality of government services. It is this approach to the serious side of governance that marks Abu Dhabi apart from its regional competitors, and one of the reasons that Emiratis here believe theirs will be the “best city in the world” by 2030.
Offshore Properties has re-launched an exciting new website with hundreds of properties from some of the world’s most active markets. The new website is the product of substantial user testing and research to make for a simple and efficient user experience. Further articles and investment resources will be added over the coming months, though the Offshore Team is always on hand to answer any questions or queries. Offshore properties specialise in assisting first time buyers or seasoned property investors seek out and purchase the best properties tailored to their exact requirements. The team can help with every single aspect of the purchase from legal, tax and currency matters to invaluable practical experience. This year’s hottest investment locations according Edward Newton, Offshore Properties’ Managing Director include Sofia, Bansko, Abu Dhabi and Morocco. This blog will pick up on all these locations throughout the year but will start with some background to Abu Dhabi. Commenting on Abu Dhabi Edward notes, ‘I believe that over the coming year and well into 2009, Abu Dhabi will emerge as one of the most active property markets in the world. Already, developers are witnessing incredible demand amongst locals as entire towers are sold out within hours of launch. To a considerable extent this is why international investors have been unable to gain access.’ Last year land prices in the region rose by 75%, a statistic which mirrors the soaring property prices. Offshore Properties are in the process of obtaining stock from Abu Dhabi’s leading developers and have now placed a team in Dubai to deal with the forecast demand. At the present time bulk purchases of floors are more easily negotiated though we are asking all of our visitors to specify their requirements in detail so we can contact you with suitable stock once available. Follow the link to visit Offshore Properties website. Riverland ski and leisure resort will soon be launching a superb range of 820 luxury apartments in Bulgaria’s up and coming Borovets resort. Riverland is being developed by BLD, the Bulgarian property developer and AIM listed company. The project has been in the offing for some time, though now the Super Borovets project has broken ground things are likely to move at a considerable pace. Riverland Ski and Leisure is set to become one of Borovet’s signature developments strategically placed within easy reach of golf and spa facilties, in addition to the planned gondola station. The development will include substantial leisure, business and retail facilities and is certain to attract huge attention from international press. Offplan investors in Borovets would be well advised to get in as early as possible as steep price rises are expected as construction progresses, and in line with Borovets’ improving infrastructure and desirability. Click here to find out more about the Riverland Ski and Leisure Resort. Buying property in an emerging market is all about trying to predicting the future value of your investment. A very significant factor in this forecast is identifying how a region’s infrastructure will develop. For those investing into Morocco’s property market, advances over the last 5 years and steps to build a ‘chunnel’ linking Spain over the straights of Gibraltar must be viewed in a very positive light. Although the project is an enormous undertaking costing anywhere between €3 - €10bn, both sides seem determined to move forward amidst an incredible level of other infrastructure projects. Much of this infrastructure planning is underway to support the dramatic increase in tourist numbers engineered by the King’s Plan Azur and collaboration from numerous other countries demonstrates a substantial level of confidence in Morocco’s future. Road Morocco’s road system is receiving an enormous overhaul from gigantic new highways to a comprehensive upgrade to its rural road system. In a recent agreement with the Kuwait Fund for Arab Economic Development (KFAED) a £30m deal will modernize over 500 km of roads.
Rail Airports Sea Conclusion
There are numerous reasons for saying ‘yes’ to this, though so far the take up in the UK has been slow with sales activity spread on a local and international basis rather than coming purely from UK property speculators. Abu Dhabi’s PR machine, The Abu Dhabi Tourism Authority, was set up in 2004 to promote the Emirate’s image overseas, develop tourism and economic diversification, a campaign which is now beginning to make its presence felt in Europe. We are now seeing London taxi cabs with Abu Dhabi liveries, bill boards and more recently sponsorship of major rallies such as the Race of Champions and Ford. The ADTA’s approach has been far more considered than some of Dubai’s promotional strategies, namely selling as much as possible as quickly as possible, and is committed to developing a world-class up-scale sporting, cultural and leisure destination, aimed at discerning visitors. Again unlike Dubai, infrastructure has been allowed to develop in line with the property market and strict controls on build density and public spaces as dictated by the 2030 Master Plan (see previous posting) are being enforced. Very recently, Shaikh Mohammed bin Zayed al-Nahyan, Crown Prince of Abu Dhabi has mandated a population reduction in the planned collection of high rise towers in order to achieve a less congested environment demonstrating that Abu Dhabi’s objectives are not simply to create a property boom. All of this should be good news for those looking for a medium to long term or buy to let investment. Depsite this more measured approach property prices are going through the roof with land in 2007 up by 75%. Furthermore a recent report by HSBC Middle East on Abu Dhabi’s real estate sector quotes a price rise of 18% last year while rental rates jumped to 22%.
In a general sense Abu Dhabi’s property market benefits from a unique backdrop of incredible state and developer wealth allowing airlines and iconic superstructures to be created without really needing to rely on market forces. Investing in Abu Dhabi property will undoubtedly become the ‘next big thing’, and is already being picked up by journalists in the overseas property press buoyed by increased presence from the big developers, such as Aldar, at last year’s London property shows. It is likely that further deregulation will boost this interest in late 2008 and so as ever it is the early adopters that will prosper.
The number of tourists heading to Abu Dhabi is expected to reach three million p.a. by 2015. This will mean a 300% rise from the current level of one million in 2007, according to His Highness Khaldoon Mubarak, Chairman of the Abu Dhabi Executive Authority. Speaking at a recent conference in the capital, Mubarak said the emirate’s hotels are currently at 95% occupancy, and in order to meet expected to demand, it is planning to increase the number of hotel rooms to 25,000 by 2015, up from about 9,000 at present. He said Abu Dhabi is focusing on high-end, luxury property and business tourism. Source: http//:www.ameinfo.com
Buying a property in Bansko or visiting the resort on holiday offers a cheap alternative to more expensive European resorts and if you are purchasing an apartment, provides a viable medium to long term investment vehicle. So long as you don’t have unrealistic expectations expecting Bansko to have transformed itself from ancient little town to world class ski facility in 5 years, then you will not be disappointed. Those who have already invested or are looking to invest in Bansko should also bare this in mind – look at your investment as a long term strategy. The town has a long way to go in all sorts of ways and there is a great deal of newly built property on the market. This means that (as with any emerging market) a resale market is a long way off, in that the market must reach a stage where there is no longer any new stock available and the old stock is desirable enough to purchase. So if you are thinking about buying rather than just holidaying, this should be a main concern: ‘Will anyone really want to buy my apartment in Bansko in 15 years time should I wish to sell it’. If you’ve bought the right apartment in the right location then that answer should be yes. Be realistic – if you are visiting Bansko you are doing so because it is cheap or are making an investment decision based on the fact that it is currently inexpensive and looks set to rise. Like most things in life there is a reason why it is cheap so expect things to be developing or pretty much undeveloped. Bansko as we know it today has emerged from an extremely impoverished background and now has great ambitions for the future. Bansko’s relentless expansion and infrastructure improvements may gradually lead to a resort which could make this comparison more realistic. For example, the nightlife in Bansko is starting to improve dramatically from my first experiences (i.e. one or two bad bars) with the addition of some slick looking new premises, cocktail bars and restaurants. I’m not suggesting that by the singular addition of a cocktail bar Bansko will transform itself into Mirabel, more that it suggests a nod in the right direction and a desire to improve. What I’m talking about is a general enthusiasm to raise the standard of service. For more information on Bansko refer to my previous post which I give my view of the best locations to buy in Bansko. |
