The Bahraini real estate market will extend growth on healthy local demand but at more moderate rates than those seen in the past two years, according to an executive at a major developer. The country has seen a higher proportion of local and regional investors – rather than expatriate buyers – in its property market in comparison to neighbouring markets. « That [local] demand will always be there, » said Mohammed Khalil Alsayed, Chief Executive of Ithmaar Bank and Ithmaar Development. « The prices here never heated up as in Dubai or other neighbouring countries, » he added, speaking at the Bipex 2008 property fair in Manama. Ithmaar Development predicts that it is still possible to attain between 15 per cent and 20 per cent returns on investment in high-end developments but it will not be at the red-hot pace seen in recent years. By Reuters
The current lull in the global property and construction market is pushing several industry players, especially contracting companies, to enter the GCC, and the UAE in particular, in search of better opportunities. According to industry experts, more than a hundred new companies from Europe and the United States are currently looking for opportunities to either start operations or tie-up with business partners in the UAE. « Dubai has enough work for the next five years and in Abu Dhabi things are just beginning to take off. We were not present in a major way in the UAE market until now. But even now we feel it is not too late, » said a representative of ANMOPYC, the Spanish Manufacturers’ Association of Construction and Mining Equipment. Participation in forthcoming industry exhibitions such as Big 5 PMV will be an indicator of interest and opportunities in the Gulf. If this year’s attendance at Big 5 PMV is any indication, the number of international participants has more than doubled compared to 2007. Meanwhile about 30 senior executives from Irish construction companies met in Dubai last week as part of an Enterprise Ireland initiative to help them internationalise their businesses. Construction industry in the US and most of Europe has significantly slowed down. South Korea last week said it would spend about $4 billion (Dh14.69bn) to prop up its construction industry. The UAE has so far managed to avoid any major signs of slowdown being witnessed in other parts of the world and companies are hoping that the boom in the construction industry would continue unaffected. Several exhibitors during the recently concluded Conmex 2008 in Sharjah told Emirates Business that for the next 10 years the construction industry in the UAE would continue to grow unaffected. According to them the UAE is expected to withstand the current liquidity crunch. Participants at the Enterprise Ireland initiative included Tom Costello, Managing Director of contracting firm John Sisk & Son, and Finn Lyden, Chief Executive of Siac Construction, besides several heads of architectural, engineering, surveying and interiors companies. According to reports, Liam O’Donohoe, head of leadership development at Enterprise Ireland, said the scheme was designed to help companies expand their business outside Ireland and to enable them to work together to secure projects. According to Nick Webb, Director of Streamline Marketing Group, organiser of Big 5 PMV, of the 300 global and 53 local firms participating in this year’s exhibition, 241 are attending for the first time. « A lot of these companies are looking for new opportunities here, wanting to do business, » he said. More exhibitors from the concrete production sector at Big 5 PMV is an indication of growing construction activity in the region. According to Webb countries such as Spain never looked to enter overseas markets as the local industry was performing well. « They are not happy any more and are now keen on overseas expansion. Although the actual number of Spanish companies participating in Big 5 PMV is less compared to other European countries, with 89 per cent Spain stands first, » he added. The number of Italian companies has increased from 38 in 2007 to 81 in 2008 while Chinese participation rose from 24 to 82. According to the French Trade Commission, there is a growing tendency for local real estate developers and contractors to award design and build contracts to French companies, enticing many firms to increase their presence in the UAE. Pascal Roger of the French Trade Commission said: « While French equipment and building material suppliers have been present in the UAE for some time, there is a large influx of French contractors coming now. This is due to changing market conditions in France as a result of increased tax rates and the effects of the economic slowdown. French construction groups are keen to work in the UAE and the region. » By Joseph George business24-7.ae
A state-of-the-art Children’s Public Library, the first ever is to be constructed in the Sultanate of Oman, as part of the government’s vision to create a knowledgeable and well-balanced society. The Philadelphia based company, VITETTA a renowned library developers, have been appointed as the project consultants. The company is at the forefront of library design and planning and have developed similar projects in the United States, Europe and South America. Sayyida Dr Muna Fahad Al Said, Honourary Chair, announced the construction of the Children’s Public Library which will be situated adjacent to the Children’s Museum and the Museum of Natural History on land generously designated by Sayyid Haitham bin Tariq Al Said, Minister of Heritage and Culture. This declaration is set to bring enormous advantages and opportunities to the youth of Oman – now and in the future – and will promote the Sultanate as a forward-looking Gulf country committed to education and innovation, said Dr Muna. The plans integrate Omani architecture, culture and heritage with contemporary designs and state-of-the-art learning and educational technology. The new building will be organised in four distinct levels to serve the different learning stages of children. Novel and imaginative use of light, space and glass will provide a welcoming and creative feel and promote participation in educational and recreational activities. “I am delighted to be part of this pioneering initiative. By creating Oman’s first Children’s Public Library we are investing in tomorrow, today. We welcome more supporters to join us in this important initiative and together we can help shape the next generation,” said Dr. Muna. khaleejtimes.com
The liquidity crunch in the United Arab Emirates banking sector is stabilising but the Gulf state’s central bank is ready to do more if needed, UAE Central Bank Governor Sultan Nasser ALl Suweidi said on Monday. « Things are getting better and stabilising, » Suweidi told reporters when asked whether the central bank had done enough to cushion the banking sector from the credit crisis. « If there is a need we will do more, » he said. Suweidi added that the second-largest Arab economy could face a real estate price correction. « A real estate correction could happen but UAE banks are well-cushioned and we could still go to lower levels, » he said. Agencies
International Airport is to be equipped with a public prosecution office to handle smuggling, illegal immigration and drugs cases, a senior government lawyer announced yesterday. Mohammed Ali Rustom, the chief prosecutor for Bur Dubai second district, also outlined procedures to deport travellers caught with small amounts of illegal drugs instead of prosecuting them in a court case. Mr Rustom said the “fully functional” prosecution office would be provided by the Dubai Civil Aviation Authority at the International Airport’s administration building. It would be the base for three full-time prosecutors, including an assistant chief prosecutor. “The decision to open the office was taken one month ago by Sheikh Ahmad bin Saeed Al Maktoum, president of the Dubai Civil Aviation Authority,” Mr Rustom said. DIA already has a prosecutor on duty 24 hours a day, seven days a week to ensure the speed and efficiency of procedures. Mr Rustom said the number of drug smuggling and possession cases originating from the airport had risen slightly in the first six months of 2008 compared with the same period last year. “This year we registered a total of 381 drug- related cases from January to June, compared to the same period last year when we only registered 336 cases.” However, Mr Rustom pointed out that this was not a major increase when compared to the dramatic rise in the number of visitors to Dubai in 2008 from the previous year. The assistant chief prosecutor for Bur Dubai second district, Mohammed al Nuaimi, recently said 98 per cent of drug cases originating at the airport involved narcotics, mostly heroin, swallowed in capsules by smugglers, a method he said was typically used by visitors from Asia. “Most of these are individual initiatives, people who try to make Dubai a transit point for the transport of illegal narcotics, but there are no organised drug smuggling gangs involved,” Mr Nuaimi said. He said although no formal guidelines were in place, visitors arrested at the airport with small quantities of drugs in their possession would often be sent straight home rather than face prosecution here. “While there is no formal order to this effect, we follow the Dubai Attorney General’s instructions in cases of possession of small quantities of drugs,” he said. In such cases, “we recommend deportation to the technical office at the Public Prosecution Department which is the body that takes the decision”. Under UAE law, anyone convicted of possession of drugs or drug abuse faces a four-year prison term. Mr Rustom said decisions on whether travellers involved in minor possession should be referred to the courts or deported without proceedings would be taken on a case-by-case basis, adding that there were no fixed criteria. The Pakistani cricketer Mohammed Asef was detained at Dubai International Airport in June after customs inspectors discovered 0.24 grams of opium in his wallet. He was deported after two weeks in custody. Mr Rustom said most minor possession cases usually involved people visiting the country for the first time. Only last week, the Dubai Criminal Court of First Instance heard three new cases of narcotics smuggling via Dubai International Airport. All three suspects were men, two of them African and the third Asian, and all had carried the drugs inside their bodies. A Nigerian man was attempting to smuggle 1,113.07 grams of cocaine stuffed inside 77 capsules, the court heard. The man, detained on July 23, admitted he had swallowed the capsules and that he was told to deliver the drugs to a man he did not know at a hotel in Dubai. In another case, the court heard that a Ghanaian man was caught at the airport on Sept 4 with 715 grams of cocaine hidden inside 60 capsules concealed inside his body. The man told prosecutors he was asked by a compatriot in Ghana to deliver his consignment to an Italian man at a Dubai hotel. Mr Rustom said the conviction rate for drug cases in general was close to 95 per cent. The total number of cases prosecuted by Bur Dubai second district, whose jurisdiction includes the airport, ports and Rifaa area of Dubai, was 3,452 in the first six months of this year, an increase of 218 cases compared to the same period in 2007. The total number of cases prosecuted from the airport actually decreased from 752 cases in the first six months of 2007, to 682 cases in the same period this year. Hani Bhatihish thenational.ae
The UAE will play host to an international donors’ meeting in the first week of November discussing how to bailout Pakistan from bankruptcy and economic turbulence. The meeting of the Friends of Pakistan group will be held in Abu Dhabi with the participation of 25 countries, IMF, World Bank and other international financial institutions. The group held a meeting in New York earlier this year during the visit of President Asif Ali Zardari, who then sought $100 billion to help his country’s economy. Since then, with hectic negotiations with friendly countries and international financial institutions, Pakistan has already secured a pledge of $4bn from the international community to help the country avoid bankruptcy. « The second formal meeting of the Friends of Pakistan group is being hosted by the Government of UAE here in Abu Dhabi. It will be held in the beginning of the next month, but the exact date, venue and the agenda is yet to be decided, » Khursheed Ahmed Junejo, Pakistan’s Ambassador to the UAE, told Emirates Business. « We expect all the group countries to attend the meeting, which will be chaired by the UAE and attended by President Zardari. We are expecting 25 countries, including the US, Britain, China and Germany, in addition to international financial institutions. » The ambassador, a prominent politician in the ruling Pakistan Peoples Party who took charge about two months ago, said expectations are very high from donors in the group to support Pakistan financially. « Pakistan is fighting a war against terrorism on behalf of the whole world on its soil; therefore we need financial assistance from the world community. I’m optimistic the outcome will be positive with group members pledging a good amount of money to support our economy, » he said when asked if Zardari’s approach of seeking $100bn will be achieved in the meeting. Referring to the current global financial crisis, Junejo said the crisis – coupled with the country’s war on terrorism and the law and order situation – has badly affected the country. « At present, Pakistan, in fact the whole world is facing financial and economic crises. The rupee value has declined against the US dollar, which has lead to a drop in our remittances from here this year compared to years before, » he said. However, the ambassador said under the leadership of President Zardari, Pakistan is now drawing up a new economic roadmap that is set to bring positive changes in the country within a year. He said the president went to the US and China immediately after assuming his office to attract foreign investment and was successful in re-organising the Friends of Pakistan group, which includes the G8 and Middle East countries and China. « The UAE is the biggest foreign investor in Pakistan with the existing investment of $5 billion in different areas, including a refinery. Investment from UAE was extremely good until 2005, but now it has declined by 28 per cent, » he said, adding a complex of the recent global crisis has resulted in a massive flight of capital from Pakistan. « By end of this year, we expect things to return to normalcy and re-attract investment from the UAE and other countries, » he said. The ambassador invited UAE companies to invest in Pakistan’s various sectors, particularly in power plants, agriculture, real estate and exploration of mineral resources. By Nissar Hoath business24-7.ae
The insurance sector in Bahrain posted strongest annual growth in 2007 with gross premiums surging 21 per cent to BD135.6 million (Dh1,321m) against BD112.4m in 2006, the Central Bank of Bahrain said (CBB). Life insurance contributed the lion’s share of growth, soaring by nearly 67 per cent, with medical and the traditionally strong motor business also growing by 39 per cent and 16 per cent respectively. Life premiums amounted to BD38.8m, an increase of 67 per cent over the 2006 figure of BD23m. The life market accounted for 29 per cent of the premiums generated during 2007. The profitability of insurance firms rose by 56 per cent, while their total assets grew by 42 per cent. The number of insurance firms operating in Bahrain market during 2007 totalled 163, of whom 22 were locally-incorporated firms, 11 were branches of foreign firms and the others insurance ancillary services and organisations. The country hosts insurance major such as Hannover Re, Allianz, Axa and ACE Group, which will help expand and advance the industry further. business24-7.ae
International bank HSBC has raised 4.6 billion Qatari riyals ($1.3 billion) for Qatar’s Al Wa’ab City – a mixed-use development in Qatar – using a variety of sources including debt, mezzanine and equity funding sources. HSBC was appointed as Financial Advisor by the $3.2bn (Dh11.7bn) Al Wa’ab City. Kapil Chadda, Head of Investment Banking in Qatar for HSBC, said: “This financing stands out due to the raising of such a large amount of capital, for a green-field real estate project in Qatar. The innovation stems from a unique combination of financing sources which are both conventional and Islamic and with a range of international, regional and local banks and investors”. The company has raised QAR3.6bn in senior debt on a fully underwritten basis which represents almost a third of the total value of the project. “This is a remarkable feat in the challenging times and is a testament to the quality of the sponsors [Nasser Bin Khalid Group], the credit profile of Qatar in the GCC and the project itself,” added Chadda. The remaining two thirds of the financing is coming from a mixture of equity and mezzanine finance. HSBC assisted the company in charting the way to raise financing, arranging a bridge loan and structuring, underwriting, book running and holding the senior loan. Sheikha Hanadi Al Thani, CEO of Al Wa’ab City, said: “We very much appreciate the extraordinary efforts of HSBC as our financial advisor to organise this transaction in such difficult times. The financing of this project is ground-breaking for the Middle East. “It is the first time that senior debt and mezzanine finance, let alone one that is Shariah compliant, have been combined for a regional borrower with equity investors, and the first time that this group of local, regional and global banks, sponsors and investors have come together in this way, all on the same day.” business24-7.ae
