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"Residence Law" is a lead factor on the level of Emirate properties' demand

Al Mazaya Holding Company's annual report urges UAE Authorities on the level of federal or local to rush to issue the law concerning organizing residence visas' issue for properties' purchasers of non locals, in order to set legal frame that allows properties' purchasers and investors to visit their properties, take care of it; consequently, maintaining demand of properties. Report has said, local Emirate's laws do not put obstacles in front of selling properties for different nationalities, but they put terms for residence. This means that investment and buying house or properties is a thing and obtaining residence is considered as a different thing altogether.

Report has indicated to the anticipations to issue a law organizes relationship between properties' developers and investors. It shall tackle previous conflict results, which previous exercises have been emanated by properties' developers. Before months, Organizing Properties' Establishment had revealed that there was a recommendation to grant properties' investors visit visa to enable them to enter and exit to and fro Dubai for supervising their investment interests in real estate market. Whereas, a committee composed of Dubai Land and Properties Dept., Dubai Residence and Naturalization Administration and Dubai General Police H.Q. filed a proposal to the concerned authorities "to grant properties' owner special entry visit resembling visas issued by other countries, which shall be terminated upon investor expiry of properties or selling the same.

Major companies like Emaar Properties have been granted some exceptions to give purchasers of their properties permanent residence visa along with every sold property. This mechanism depends on granting residence visa for properties purchasers, whereas properties' developer is his sponsor but not properties itself due to the absence of law stipulates the same whether explicitly or implicitly. As per Dubai Residence and Naturalization Administration sayings," there is no clear clause or article within the law stipulates on proprietors' ownership gives purchaser the right to obtain residence visa. Therefore, there is no connection between residence and properties' ownership.

Report has said, " although the said, but properties development companies set on purpose the advantage of permanent residence for properties' owners for attracting them to purchase these properties. This advantage has resulted in attracting many of properties' purchasers to Emirate of Dubai and other Emirates that have followed Dubai and give the same.

After recommendation of Organizing Properties' Establishment in Dubai with regulation residence for properties' owners; it warns properties' developers not to promote their properties in this way. Establishment has recommended purchasers not to go behind these advertisements that promote to sell flats against obtaining the residence, because it is not matched with law.

Mazaya's report has said that promises of properties' development companies to grant properties' purchasers and their families the residence are considered as an effective factor activating properties' demand. Therefore, several properties' developers and selling and marketing agents have seized and utilized the chance of obtaining residence visa upon ownership of the properties, and using this as means of propaganda and promoting for marketing these properties. Moreover, some people have declared that owners of properties have the right to get residence visa as long as they have owned properties in UAE.

On the contrary, the matter is not the same altogether. Whereas, purchasing and own of properties do not necessitate obtaining the right of residence; mainly, when this is utilized for promoting and marketing of properties.

Dubai has witnessed real estate flourish, since government has allowed foreigners in 2002 to invest in properties. In 2006, Dubai Emirate has stipulated real estate law allowing foreigners to hold and own freely, in some areas.

Report has said that properties registration law in Dubai no. (7) of the year 2006 has allowed locals, GCC citizens to own and hold freely concerning any properties within Dubai Emirate. In addition, law allows foreigners to own on the basis of free hold and ownership or determined period of ownership within specific areas in Dubai.

Before two years, upon issuing this report, Director General of Residence and Naturalization Administration asserted that "there were no other laws to change the status and fact of residence permits. Residence visa was not granted upon investors' holding of properties". He added , foreigners' obtaining residence after ownership of properties had come under properties development companies' sponsorship, where having residence visa did not require the right to get work permits automatically; because this issue was lying upon the shoulders of development companies that had promised to secure residence visas for its purchasers, then to settle problems that had come due to these promises, meanwhile they did not have the right to settle the same in favour of their purchasers' customers.

Report has clarified that officials' declarations indicate that this new law of visas shall apply retroactively concerning individuals who have already obtained residence visas. This means that visas shall be modified in order to match with new law. Law states that holding properties in Dubai does not require residence for purchasers. But obtaining valid residence is a must to obtain the services of land line telephone, DEAW, having bank account and Driving licence etc…….

Recently, press news have mentioned that some main developers in Dubai have cancelled the condition of providing investors with residence visas upon purchasing properties from sale contracts.

As per what have been said by the developers, Emaar Properties has informed sub-developers with the necessity to stop issuing residence visa until sine die. Also, Union Properties has asserted that obtaining residence visas is not connected to properties' purchasing; clarifying that sole responsible authority for issuing residence is Administration of Naturalization and Residence.

Foreigners form more than 80 % of UAE inhabitants, where most of 4.1 Million live in UAE are from Semi Indian Peninsula, Iran and Arab countries. Many authorities see that residence item has formed major attraction factor to UAE properties. In the same context, Dutch E N G for Financial Services has said that purchasing of properties by foreigners in Dubai may be retreated after "Organizing Properties Establishment" has declared that houses' owners of foreigners are not qualified to obtain the rights of long residence automatically. ENG has said that existence of such properties that are purchased by foreigners in Dubai is considered as the key factor in pushing demand. Any decision by organizing authorities concerning reviewing the status of permits of current houses' owners shall create "Legal minefield" and may contribute to harm the rank of this Emirate.

Mazaya report has shown that Dubai government's adopting the proposal of Organizing Properties Establishment concerning regulation of granting residence visas for foreigners' purchasers and properties' owners in Dubai will lead to real verification test for request forms and its sizes in Dubai.

Abu Dhabi's Rents increase 25% - 50 % Al Mazaya Holding Company's real estate weekly report has seen that raise in Abu Dhabi Rents forms permanent source of anxiety to official authorities and commercial, investment, and national sectors; where it forms overload concerning high inflation range in the Capital. Report has said that houses' rents in Abu Dhabi have raised about 25 % during the first half of the year in several areas and reached 50% in other areas comparing to 2007, in the wake of increasing ranges of demand and numbers' stability of available displayed residential units. Lately, a report has been issued by Department of Planning and Economy in Abu Dhabi has estimated percentage of rents' increase during the first quarter of current year with 18 %. In addition, it indicates that housing costs take 50 % of families' incomes and percentage variations due to income level of every family.

Report has said that strong active request and raise of building material's prices have led, in the wake of limit numbers of available residential units whether built or under processing ones, to push rents into high levels comparing to previous years. This matter has led to create a crisis between lessees and lessors, which puts pressure on the government to terminate rent increases and to stop inflation. Abu Dhabi witnesses strong request for residential properties. Lately, as per a study that has issued by Abu Dhabi Chamber of Commerce and Industry, Capital immediate needs of new residential units are estimated as 20.000 Units, which is contributed in increasing rents unnaturally. Besides, other reasons relating to high costs of building, inflation and retreat of exchange rate of US Dollar.

Economic reports indicate that properties' investments value in Abu Dhabi is expected to exceed 640 Billion AED by the advent of 2012. The value of projects that had been announced, last year, was almost 100 Billion AED as per a report had been issued by Mazaya Holding in previous time.

For controlling rents' raise, Mohammad Rashed AL Hamili, Deputy Director of Abu Dhabi Council for Economic Development and Head of Rent Arbitration Committee has revealed determination of Government of Abu Dhabi to build thousands of residential units of economic housing level in areas surrounding the capital as a strenuous effort to alleviate housing crisis and to reduce rents' prices, which have reached standard levels within the Emirate.

Mazaya report sees that Abu Dhabi has enacted legislations determining rent increase within 5% during the year. There are predictions stating that there are more amendments to this law, which regulates rent increase with the possibility to freeze rent increase or reducing consecutive increase to become for every two years as per what is currently applied in Dubai. Report has said that there are some reports have been mentioned by local newspapers indicate to the possibility of making more probable amendments, which may be put into force and required in Abu Dhabi rent market. It includes restricting consecutive rent increase, providing governmental incentives granted to developers to offer houses with low costs, meanwhile, law no. (20) of the year 2006 has restricted rent raise in Abu Dhabi before 12 months.

Law no. (20) of the year 2006 tackles renting and leasing commitments concerning properties used for residential, industrial and commercial purposes and professional or crafts activities in Abu Dhabi. This law is not applied on agricultural lands and related property, lands and properties owned by government that rented for residential purposes, rented properties for practicing tourism and hotels activities and flats including flats and labour accommodation.

Report has said that restrictions and limits imposed on annual rent increase consider as one of the main features of this law, it has special importance for lessees on one side and for authorities on the other side as for its concern about high increase in rents, which are requested by landlords, who are trying to consume differentiation between displayed units and demand of properties in Abu Dhabi.

Consequently, law determines maximum percentage of allowed increase annually to the rent, incase of leased properties for 3 years or less; this percentage is determined as of 7%, but this percentage has been deducted upon annual reviewing of the year 2008 to become 5%. Maximum increase does not match to rent only but also it is applied in case of tenancy contract renewal to current lessee or on new lessee for these properties.

Report has said that Law no. (20) of the year 2006 has offered comprehensive revision for the system of tenancy contracts applied in Abu Dhabi. Also, law has mentioned the commitments of both lessor and lessee. Rent arbitration committee, which is concerned with landlords and lessees, has been established as per the provisions of law and executive council resolution no. (41) of the year 2006.

Companies' News: In Kuwait, Dubai First Company for Properties' Development, one of owned companies by Mazaya Holding Company has achieved great success during the process of subscription coverage in increasing the capital from 22 Million KD to 94 Million KD during fortnights. In this way, it has achieved its plan to buy First Water Façade Company, whereas company has intended to integrate its increasing plan to achieve 100 Million KD within the first week of October.

On its side, Al Shahed (the Witness) Company and Madakhel (Entrances) Properties' Company have signed a contract for architectural designing with International consultant office (ATKINS) to construct "the Dancing Tower", which contains 60 floors in Kuwait City. This tower will contain investment offices with international designs, besides, 5 stars hotel.

Report has said that this project considers as architectural remarkable token concerning towers lying in the city of Kuwait. Dancer tower contains two towers in Sharq Area; first tower's altitude is 63 floors, second tower is 50 floors, each floor is 700 Sq. m. approximately, both towers are constructed on a total area 5600 sq. m., cost of every tower is 160 Million KD and it is expected to complete during 4 years. Before short time, Kuwaiti Company for Investment has started to market major logistic project in India of total amount 430 Million US Dollars. Whereas, company will market a part of this project for its customers within Kuwaiti market in collaboration with Gulf commercial bank, manager of the project. Currently, Athman Investment Company is marketing this project besides Kuwaiti Company for Investment. While Emirates bank has undertaken to market a part of this project for the customers in UAE markets. This project shall be integrated logistic city in Bombay city, at remarkable strategic location about 15 km. near to the largest seaport in India. In addition, it is near to one of the vital airports there.

In UAE, DHAMAN Company has announced that selling all units of residential tower and offices complex in "DAMAN Buildings" located in DIFC. This project includes 3.3 Million sq. ft. of constructed areas and the biggest area contains open offices in Dubai provides 48.000 sq. ft. of office areas that has not concrete columns approximately. Residential Towers' altitude is up to 65 floors from main platform of this project. This building includes 6 ground floors, apart from five stars hotel and automatic vehicles' park at the level of courtyard.

Al Dar Properties determines modifying drawing plans of commercial and residential project "Nour El Ain" "Eye's Glamour", which company executes in Al Ain city, where its cost has amounted up to two Billion AED as per ex-drawing plan of the project. Company has declared that these modifications come due to the vision of Abu Dhabi Council for Zoning in order to develop Al Ain city, which has been set by the council in consultation with Properties' development companies. Noor Al Ain Modified project includes establishing multiuse complex in Al Ain city, involving several residential buildings, shopping mall, a hotel, offices and group of entertainment facilities. Reduction the altitude shall be executed as per new directions set by Abu Dhabi Council for Zoning along with "Al Dar Properties", which aims to protect architectural features that recognize Al Ain City.

On the other side, Al Dar and Millennium for development have announced that they will direct development of Eskander Financial area in the Far South of Malaysia parallel to Singapore costing several Billions of US Dollars upon authorization of Global Capital, which is an investment company represents outstanding investors in GCC countries and Malaysia. Global Capital as the main investor; which contains investment complex involves Mubadalah and Al Dar companies in Abu Dhabi Emirate, " Malaysia Ventures" member in Saraya Holding Company, Unity Capital, Malaysian Eskendar Investment Bearhad Company, is abiding by investing over 848 Million US Dollar (equivalent to 2.9 Billion MR.). This amount shall be spent in purchasing plot and developing infrastructure in Malaysian "Eskander City". Besides it role as main investment in the project, Al Dar company has been appointed to become representative of the owner and main developer by investment ally, while Millennium international development company has been appointed in Malaysia ; it is one of Saraya Holding Company as development manager. Eskander City area is about 103.8 Million sq. ft., where the project of financial area occupies about 150 Million sq. ft of it, and the total built area of it is 42.1 Million sq. ft.

Dubai Global for Security has concluded an agreement with Nakhil Company; where Dubai Global for security displays Aqua protection services for the project of "the World"; utilizing all abilities it has, trained persons, developed equipments in order to guarantee to prevail safety and security in the community where it will become vivid and flourish in forthcoming future on these islands. In addition, Sun Land Group Company has given a letter of nomination for Arabtech constructions, one of the companies of Arabtech Holding Group to construct its project Dubai Water Front Atrium in Arab New City located in Al Nakhil project area in Jebel Ali Water Front. Value of this project is amounted up to 2.4 Billion AED contains: Constructive works, civil works, electromechanical works, external preparations, and delivery. It is anticipated to finish this project at the end of 2013. Residential project contains 3 ground floors and 68 repeated typical floors, the total area is 273.000 sq. m. or about 3 Million sq. ft.

Hydra Properties has announced that it has completed excavation works concerning Hawa

Astico Company for Properties' Management has announced its winning with sales contract of units of "Central Park" project, which is considered as on of the recent residential projects in Abu Dhabi. Central Park project, which its investments exceed 2 Billion AED, involves two towers provide with 640 varied residential units composed of one room, two rooms and three rooms.

"Al Fari

In addition, Diyar for Development has announced that it will unveil all its new projects of its residential complexes during participation in exhibition of "Cityscape Dubai 2008". Due to company strategic modification from residential and commercial towers' developer into a specialized company in developing integrated residential complexes; Diyar for Development is going to inform investors with number of projects of residential complexes, which it will launch before the end of 2008.