Asteco Property Management

Asteco Property Services focuses on providing Property Management, Sales, Leasing, Investment and a host of other services including consultancy and valuation.

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United Arab Emirates - a premium logistics hub

The UAE is considered a premium logistics hub of the Middle East given its strategic location between East and West, offering world class logistic infrastructure facilities including free zones and non-free zone/investment areas. 

  The UAE industrial market is characterised by a two tier market - lower quality warehouse facilities built on a speculative basis and purpose-built high quality logistics and distribution facilities, of which the supply of the latter is rare.

  The most prominent industrial area in Dubai is JAFZA (Jebel Ali Free Zone Authority) with direct access to Jebel Ali Port and warehouse/industrial units built to international standards. Until recently, the Abu Dhabi industrial market predominantly comprised low quality stock in established areas such as Mussafah Industrial Area, but this changed with the delivery of phase 1 of Al Markaz.

  Rental rates in Dubai vary significantly and range from AED 180 per square metre in Dubai Industrial City up to AED 600 per square metre in JAFZA. Rents in Abu Dhabi are higher due to the limited supply and vary from AED 400 per square metre in Al Markaz to AED 600 per square metre at the Abu Dhabi Airport and Logistics Hub. 

  The Northern Emirates are also contributing with industrial free zone developments in Sharjah, Ajman, Ras Al Khaimah and Fujairah.

  Although the industrial market experienced declines in rates and occupancy as a result of the global financial crisis, the sector is expected to see steady growth in line with an increase in the manufacturing sector, one of the key contributors to the economy.

  By Jenny Weidling

Senior Research Analyst

Published in Gulf News 18 June 2012

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Residential Market Transformation

The residential market in Abu Dhabi is going through a period of transformation. An array of new supply is progressively entering the market with a number of projects offering a significant improvement in quality at increasingly affordable rents representing good value for money. 

  Projects such as St Regis Residences & Etihad Towers are offering high-end lifestyle living with residents benefitting from high quality facilities and amenities with prices broadly in line with similar top quality projects in Dubai (One Beds from AED 100,000, Two Beds from AED 145,000 and 3 Beds from AED 190,000).

  A number of other projects are due to enter this segment of the market include Rihan Heights situated in Zayed Sports City offering views of the Grand Mosque and Nation Towers occupying a prime water front position on the Corniche.  In addition, 8 of the 13 residential towers at Marina Square on Reem Island have now been handed over and are available for occupation, which together with Al Zeina and Al Muneera at Raha Beach have added in excess of 4,500 units to the market.

  Inevitably, the significant volume of supply is continuing to see rental decline Some projects with large quantities of stock have seen rents for some unit types decline by as much as 15% since the beginning of the year.  Conversley, some projects priced well and effectively marketed have seen rents hold due to strong demand.  Whilst we expect market rents in overall terms to remain under downward pressure throughout the rest of the year, we expect the rate of decline to slow and rents start to stablise as they reach acceptable levels in line with housing allowances and budgets.

  By Paul Maisfield

Associate Director

General Manager - Abu Dhabi

Published in Gulf News on 10 June 2012

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Flight-to-quality: a current trend in Dubai

Dubai’s apartment sales prices and rental rates have experienced declines in excess of 50% since peaking in Q3 2008. However, some established areas and quality buildings have started to stabilise whilst low quality developments surrounded by ongoing construction will continue to see a drop in rates.

Some of these established areas such as Downtown Dubai, Dubai Marina and Jumeirah Beach Residences are filled with retail, entertainment and leisure facilities. A studio would cost you AED40,000 in Dubai Marina, AED50,000 in Downtown and AED55,000 in JBR per annum in rent. At its peak, these studios would set you back (if you were lucky enough to get one) at AED82,500 in Dubai Marina and Downtown and AED90,000 in JBR.

At the other end of the scale, developments that have minimal facilities, ongoing construction, out of town locations etc will see little improvement. Developments such as International City, IMPZ and Jumeirah Village, which command rental rates of AED15,000, AED18,000 and AED23,000 per annum for a studio would need to markedly improve on facilities, landscaping, proper building management, quality of product, security etc to stimulate a positive movement in rental rates or even sales prices. In Q2 2008, the most affordable apartments in Dubai was International City with studios at AED52,500 per annum.

Although Dubai is unlikely to witness rental rates escalate to such proportions seen in 2008, prices will recover in most areas while the amount of supply available will lead tenants and home owners to a flight-to-quality; a trend currently seen across Dubai.

By Judy Lam

Regional Research Manager

Published in Gulf News on 5 June 2012

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Metamorphosis of an Owners Association

Considering that jointly owned property is a relatively new concept in the UAE, owners have been readily embracing information like gypsum soaks up condensation. There are visible stages which owners and especially elected board members experience once they obtain insight. The initial pupae stage is usually fairly abrasive as there is a lack of trust and transparency inherent in the UAE development industry, which is why the regulation has been implemented.

However, as the owners start to understand the difficulties faced by developers coping with a regulation being placed on top of an existing industry and they are seeing that in the main the developer has maintained standards and bank balances verified through audit, there is a sudden lowering of arms or shall we say opening of wings.

Some Boards unwittingly remain in the chrysalis concentrating on arguments but due to little leverage make little progress. There is a point in time when it is realized the leaf is bare or has been squeezed sufficiently, a mature OA can table the past misdemeanors and seek satisfaction through the regulation should the OA decide it is worthwhile upon registration. The next stage concentrates itself on the important issue of how the OA fends for itself and how it gets the best from their investment.

All the above stages the determining factor of how well an Association fares is the selection of an experienced and well resourced Association Management Company. The selection of the right Association Manager is the most important decision an Owner or Developer can make in order to coordinate the transition.

The final metamorphosis of an OA is illustrated by the Owners’ transition from debating perceived high service charges to asking if their reserve funds can be increased to achieve more financial safety and investment value for the future. It will not be long before the buyer of a property looks first at the property’s funds rather than the fake butterflies in the reception.

By Nick White

Association Manager

Published in Gulf News on 4 June 2012

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Amazed? Want to live on Palm Jumierah?

Contact Asteco now!!!

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  Elaine Jones CEO,Asteco Property Management

"Property remains an asset class of choice for most investors. The focus on secure acquisitions in well regulated markets which are income generating and projected to see capital appreciation remain a priority.

Asteco has been established in Dubai and the Emirates for 26 years and has been involved in the release of property in various other Gulf States. We have a Client base from all over the world and in these interesting times we have witnessed changes in the approach of our Clients toward investment. To this end and so as to service our Clients better we have partnered with IP Global who have a proven track record in identifying secure and sound property investments in mature markets.

IP Global takes active participation in each venture that they bring to the market and it is, in part, this commitment that further strengthens our confidence that they will provide property solutions that meet the requirements of our clients in the most transparent way.

Each of the markets that IP Global have entered offer different factors and advantages to appeal to discerning investors. We will work with IP Global to bring you the most useful information to support you in taking a decision as to where to make your best property investments."

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-rent/buy a property in dubai

- includes both commercial and residential properties

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  Interview in Insead Knowledge

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Rate of rent decline eases in Abu Dhabi

There was a noticeable drop in the rate of decline of rental values in Abu Dhabi during the three months ended September, with those for apartments down 6 per cent compared with the 8 and 9 per cent during the previous two quarters.

In comparison, villa rents in the third quarter were relatively static for the second consecutive quarter; however, villas in off-island locations such as Mohammad Bin Zayed City and Khalifa City continued to slide 5 per cent on average," the report added.

The most significant new supply into the market was at the Al Zeina project at Raha Beach, which comprises 952 apartments, 26 penthouses, 119 town houses and 124 villas. Meanwhile, at Marina Square on Reem Island, despite receiving completion certificates for Zone A in March, uncertainty surrounds the handover dates to individual investors in Zones B, C and D, the report added.

"The strong rental demand we are witnessing is being driven by existing residents' desire to upgrade and secure better value for money accommodation," said Elaine Jones, Asteco's chief executive. "This trend is set to continue as improved quality accommodation is handed over in the coming months.

However, David Dudley, regional director at Jones Lang LaSalle, said that over the last quarter residential and commercial rents in Abu Dhabi have seen a "soft decline." In the coming 12 months, with more new supply coming in, residential and office rents are set to get cheaper.

Dudley, however, predicted the decline in residential rents would be far greater than for the offices, which have already seen a marked decline in recent months.

Stimulating sales

Asteco also said to try and stimulate sales activity in the market, Aldar has announced a rent-to-own scheme on unsold properties at Al Zeina and Al Bandar. "Tenants will pay a fixed rent for two years with 100 per cent of the first year's rent and 90 per cent of the second year's rent converted into a deposit towards purchase at the current sales price, although no further details have been released so far," it added.

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How much should one be spending on property?

The straight answer is: It depends.

"How much to spend is purely down to the individual or married couple [which again contain many factors to consider]," said Rupert Connor, senior consultant, at Acuma Wealth Management. "Many are prepared to put in their life savings towards their home, not wanting high mortgage payments throughout their life and leaving them with more disposable income."

The key to any investment is whether it is affordable. As experience the world over has shown, many have overstretched themselves on property purchases. "Thirty per cent outgoing towards a home is probably about right as a percentage of the monthly income," said Sarah Lord, wealth planning director at Killik and Co. In deciding to invest in a property, one should have a clear budget identified both for how much can be spent on the property at the outset and how much it will cost on an ongoing basis. Acquisition costs include the moving costs (if buying as a home), legal and registration fees.

Then it is also important to consider the ongoing costs. Even if the intention is to rent the property out, there are likely to be periods where there is no tenancy. Ongoing costs include, maintenance charges and mortgage payments and utility bills. For investment purposes it really does depend on one's overall wealth, said Lord. "It also depends on the individual's other assets and committed regular expenditure."

If one is buying a property as an investment, the annual rental yield has to be considered. In the current economic climate, Lord says, a net yield of four to five per cent per annum would be reasonable.

As a general rule, whether it is for buying a home or for investment, Connor advocates putting down a 30 per cent deposit. "The higher the deposit you can put down the lower your monthly mortgage payment will be," he said. "Budgeting is important here as one may already be paying into pension and savings vehicles."

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British companies keen to rebuild presence in Gulf

British construction companies behind some of Dubai's most famous landmarks are again winning orders in the Gulf.

The turnaround comes three years after the financial crisis stopped thousands of projects in their tracks.

But this time the contracts are coming from elsewhere in the region as countries such as Qatar and Saudi Arabia spend billions of dollars of oil and gas revenues on major infrastructure projects.

Carillion and WS Atkins, both listed on the London Stock Exchange, this week talked up the Middle East and lauded the number of infrastructure projects available for tender.

"It's still a very attractive place for us to do business," said Richard Adam, the finance director for Carillion. "Historically we have benefited from high margins in the Middle East in the 8 to 9 per cent bracket."

Carillion has a pipeline of potential opportunities worth £11.8 billion (Dh66.99bn) and hopes to double its revenues in the region to £1bn in the near future.

Of the potential opportunities, Carillion believes it can win one in five contracts in the region.

"Over the next three years we expect that margin to come down towards 6 per cent and it's still a very good margin for us, one of the best margins worldwide," said Mr Adam.

In the past few years, many construction and infrastructure consultants had to write down hundreds of millions of pounds on their work in Dubai and other parts of the Middle East as they tried to recover monies owed.

Many companies stopped investing in the Middle East and focused instead on their home markets.

Carillion has developed a strong presence in the Middle East over 40 years and helped design and build Dubai Marina, the Yas Island Hotel and the Grand Mosque and the Opera House in Oman.

Al-Futtaim Carillion, a joint venture between the UK company and Al-Futtaim, was awarded the contract last year to design and build the Abu Dhabi campus of New York University, due for completion in 2013.

"On the back of the Abu Dhabi plan we think we can be successful in building hospitals, industrial projects and education and transportation," said Richard Howson, the chief operating officer at Carillion. He said this year the company would report double-digit revenue growth in its Middle East markets of the UAE, Saudi Arabia, Qatar and Oman.

In a presentation to analysts this week, WS Atkins, an international engineering consultancy, said revenues grew 3 per cent to £140 million in the Middle East in its last financial year to the end of March, compared with a year earlier, and that profit margins were 16.9 per cent.

The company, which designed the Burj Al Arab Hotel, believes it can earn up to US$25bn (Dh91.83bn) in fees in the Middle East over the next five years as rising populations and improving living standards create infrastructure demand.

It is hoping to win contracts in social infrastructure, such as schools and education, rail and aviation programmes, as well as defence projects in the Middle East.

Atkins aims to diversify away from property projects to focus more on Saudi Arabia and transportation contracts.

The company helped build the Bahrain World Trade Centre and Dubai's Metro system.

Atkins' strong performance in recovering debts and a move into infrastructure work helped increase profits by 70 per cent for the Middle East operations in the year to March over the previous year.

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Asteco Property Services focuses on providing Property Management, Sales, Leasing, Investment and a host of other services including consultancy and valuation.

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Asteco Property Services focuses on providing Property Management, Sales, Leasing, Investment and a host of other services including consultancy and valuation.