Office complexes set to open in Abu Dhabi and Dubai over the next two years will be seeking occupants in an oversaturated commercial real estate market and 150,000 workers to staff those businesses from a declining population, analysts say.
The Japanese bank Nomura Holdings predicted some 20 million square feet (1.9 million square metres) of commercial space will be completed in Dubai by 2011 along with 10 million sq ft in Abu Dhabi.
"We estimate around 100,000 white-collar jobs at least would need to be created in Dubai and 50,000 in Abu Dhabi alone to satisfy oncoming supply," said Chet Riley, a Dubai-based analyst at Nomura. "This is in an environment where jobs are being cut."
The warning comes as brokers predict a decline in Dubai's expatriate population as people return to their home countries after losing their jobs. The emirate could experience as much as a 10 per cent decline in population this year, said the real estate firm Jones Lang LaSalle. The UAE's overall population could contract by 5.5 per cent according to estimates from EFG-Hermes Holding. There are no official forecasts available.
About a quarter of Dubai's office space is currently empty compared with less than 5 per cent in Abu Dhabi, according to Nomura. The vacancy rate is expected to rise over the next two years as projects that are already under construction reach completion. Brokers predict that half of Dubai's offices may be empty by 2011 as new supply doubles existing stock.
Dubai home prices have tumbled by about 50 per cent from their peak and may drop a further 20 per cent this year, Deutsche Bank said in June. The market's collapse followed a construction boom that created thousands of homes just as demand began to evaporate.
"We see 65,000 additional residential units entering the Dubai market and 15,000 in Abu Dhabi," said Mr Riley.
The 11 executive towers in Dubai's Business Bay development will by itself contribute 2,150 units to the glut. The analyst also predicted a further 10 per cent decline in rents.
The residential market is just as bleak. As many as 70,000 surplus new homes could be delivered next year, said the property consultancy Landmark Advisory, which would account for about 20 per cent of the total supply in Dubai.
"Over the next 10 years prices will be coming back only to about 70 per cent of the 2008 levels," said Charles Neil, the chief executive at Landmark. "This is what happened in Hong Kong and Singapore, for instance, and they are similar cities in many ways to Dubai."
Meanwhile, developers are struggling with a rising number of defaults from investors who hold property worth less than the mortgage as more unsold homes are completed and prices decline.
"Two years ago, developers were initiating fanciful developments at the peak of the market, which they are now delivering into the trough," said Mr Riley. "This has increased the likelihood of defaults and smaller developers do not have the luxury of consolidating development pipelines."
Nomura estimates the default rate could be a high as 60 per cent on new developments in Dubai and about half that in Abu Dhabi. That is attracting so-called 'vulture funds' targeting distressed properties across the country.
A number of funds with ready capital are waiting on the sidelines with about Dh6 billion (US$1.63bn) already committed, an amount unlikely to be enough to absorb surplus apartments.
"We still forecast an oversupply situation in both residential and commercial space, which may further depress pricing into 2010," said Mr Riley.
@Email:ngillet@thenational.ae
COMPANY%20PROFILE
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Sheer grandeur
The Owo building is 14 storeys high, seven of which are below ground, with the 30,000 square feet of amenities located subterranean, including a 16-seat private cinema, seven lounges, a gym, games room, treatment suites and bicycle storage.
A clear distinction between the residences and the Raffles hotel with the amenities operated separately.
COMPANY%20PROFILE
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The view from The National
Company%20Profile
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Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
The biog
Name: Marie Byrne
Nationality: Irish
Favourite film: The Shawshank Redemption
Book: Seagull by Jonathan Livingston
Life lesson: A person is not old until regret takes the place of their dreams
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
The Transfiguration
Director: Michael O’Shea
Starring: Eric Ruffin, Chloe Levine
Three stars
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
UAE squad
Humaira Tasneem (c), Chamani Senevirathne (vc), Subha Srinivasan, NIsha Ali, Udeni Kuruppuarachchi, Chaya Mughal, Roopa Nagraj, Esha Oza, Ishani Senevirathne, Heena Hotchandani, Keveesha Kumari, Judith Cleetus, Chavi Bhatt, Namita D’Souza.
The%20specs
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Match info
Premier League
Manchester United 2 (Martial 30', Lingard 69')
Arsenal 2 (Mustafi 26', Rojo 68' OG)
RedCrow Intelligence Company Profile
Started: 2016
Founders: Hussein Nasser Eddin, Laila Akel, Tayeb Akel
Based: Ramallah, Palestine
Sector: Technology, Security
# of staff: 13
Investment: $745,000
Investors: Palestine’s Ibtikar Fund, Abu Dhabi’s Gothams and angel investors
Five healthy carbs and how to eat them
Brown rice: consume an amount that fits in the palm of your hand
Non-starchy vegetables, such as broccoli: consume raw or at low temperatures, and don’t reheat
Oatmeal: look out for pure whole oat grains or kernels, which are locally grown and packaged; avoid those that have travelled from afar
Fruit: a medium bowl a day and no more, and never fruit juices
Lentils and lentil pasta: soak these well and cook them at a low temperature; refrain from eating highly processed pasta variants
Courtesy Roma Megchiani, functional nutritionist at Dubai’s 77 Veggie Boutique
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COMPANY%20PROFILE%20
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