Emaar: India, one of the most attractive investment destination

Mohamed Bin Ali Alabbar, chairman of Dubai-based real estate major Emaar, finds India as one of the most attractive markets and would continue to invest in the country through its joint venture company Emaar MGF. Emaar, which is a listed company with 68% public holding and the rest with the Dubai government, has invested around $1 billion in India so far. Alabbar said that the continued growth even during the period when the global economy was facing one of the worst financial turmoils proves the strength of the Indian economy.

Besides United Arab Emirates, Emaar is operating in 16 countries including US, UK, France In Canada. Its JV company Emaar MGF is presently planning to tap the capital market in India. Alabbar said that the exercise is mainly aimed at listing the company on Indian stock exchanges, which will bring in more transparency in the company’s operations and thereby help in instilling confidence among the various stakeholders including customers in the company. Talking about the financial crisis, he hoped that it is now over and things will improve. The recently reported financial crisis of Dubai World is manageable and will be contained, he said. “All sectors of the country are performing well,” he said.
Talking about India, he said he was pleasantly surprised as the country has returned to high growth radar. He said that Emaar MGF is doing exceptionally well. In fact, he is so confident that he refused to change the company’s strategy to delve into the affordable housing segment as most of other real estate companies in the country followed to beat the slowdown in the sector. “In order to protect its brand, Emaar MGF will continue to build houses for middle and upper-middle segments,” he said. He said that his group brings in certain quality and specification with its brand, which is not possible in the pure affordable segment. However, he added that it will provide value for money to its customers.
Even during the slowdown period, he said that his company ensured that no project is delayed. In India, he said that all the projects are on schedule. Despite problems and slowdown, the company is ready to deliver all the 1168 apartments of the Commonwealth Games village. He said all the works have been completed and the delivery is being given to the authority. 

UAE's new property regulations to offer more protection to home buyers

Two new real estate laws in the United Arab Emirates will improve protection for buyers, investors and landlords.

A new decree by the Dubai Executive Council will provide more protection to home buyers as well as increasing the Land Department's role as mediator in property disputes.

The decree, due to be published in the Official Gazette shortly, will mean that a buyer can request the courts to cancel a contract if the developer 'significantly changes' the agreed specifications, or refuses to deliver the unit without any 'justifiable reason'.

Buyers can also seek legal action if developers do not bind payments to construction based milestones approved by the DLD, or the unit is proved unstable due to major structural defects.

'The regulations whilst providing some much needed clarity over many issues also throws up some interesting characteristics such as reinforcing the wide degree of power and discretion the DLD holds in respect of projects,' said a spokesman for lawyers Hadef & Partners.

Under the regulations, which govern off plan property sales in Dubai, the DLD is able to cancel a project if the developer does not begin construction without 'justifiable cause' or because of 'gross negligence'. If the developer is 'not serious' about the project or declares itself bankrupt the DLD can also cancel the project.

The regulations also prevent developers from selling off plan units before taking possession, which includes actual control of the land. 'It is also still not clear how the DLD will approach situations where a purported termination of a purchaser is met with resistance and/or whether the DLD will remove an interest in the interim register without a court order where a legitimate dispute has arisen,' the law firm also said.

'Further clarity may also be needed where a bankruptcy event occurs as to how exactly the interim registered interests will be treated as far as priority is concerned in the bankruptcy situation,' it added.

Meanwhile new real estate legislation in Abu Dhabi will make it easier for landlords to evict low paying tenants. Under the new law, due to come into force in November, judges will settle rent disputes under the umbrella of the Ministry of Justice.

Although the current 5% rent cap will remain, the legislation will allow landlords to evict tenants at the end of the lease period after giving two months' notice for residential property and three months for commercial property.

The new law removes the automatic right of tenants to renew leases for five years with a maximum 5% rent increase each year.

Luxury houses tempt buyers with lower tags

LONDON: Luxury homes became more affordable last year, as the financial crisis eroded prices from Monaco to Barbados, according to Knight Frank. 

Prime real-estate values at 56 locations declined by an average of 5.5%, the London-based property broker said in a report published on Tuesday. Monaco was the most expensive market for the second year in a row, followed by London and Paris. 

Wealthy individuals put off making purchases in 2009 because of concern about the economy, Knight Frank said. 

Prices of properties in the countryside, coastal locations and ski resorts, often bought as second homes, fell by at least 12%. The biggest declines were in Dubai, in the western part of Portugal’s Algarve, in Palma on the Spanish island of Mallorca and in Dublin. Values in each of those markets fell at least 22%. 

“Cities tend to perform better because they are necessity driven, whereas resorts and country pads are more discretionary purchases,” said Liam Bailey, Knight Frank’s head of residential research. 

Luxury apartments and houses in cities appreciated by an average of 0.4%, led by a jump in values in China, Hong Kong, Singapore and Jakarta, the broker said. 

“Boosted by China’s quick recovery from the global recession, the price of prime properties in Shanghai, Beijing and Hong Kong rose at a phenomenal rate last year,” Bailey said. Shanghai Booms Shanghai had the biggest increases, with property prices averaging $500 to $700 a square foot, or 52% more than a year earlier, the survey showed. It was the 13th most expensive luxury-home location among cities. There were 8,438 properties sold there last year for more than $735,000, making it China’s largest prime residential market. 

Luxury-home prices in Beijing rose 47%. Hong Kong values increased 41% to average $2,000 to $2,500 a square foot, making it the fourth most-expensive city in the study. China is already taking steps to rein in the real-estate market as price increases accelerate. The government in January reimposed a sales tax on homes sold within five years of their purchase and the People’s Bank of China raised the proportion of deposits banks must set aside as reserves to reduce lending. 

Property prices in China rose 10.7% in February, the most in almost two years, prompting the World Bank to urge the central bank to lift interest rates to prevent a bubble. While government measures may damp demand, “strong economic growth and limited stock should keep prices stable” this year, said Xavier Wong, Knight Frank’s head of research for greater China and Hong Kong. 

In Monaco, where residents include Formula One champion Jenson Button and billionaire Philip Green, prices fell by about 15% last year. The average cost of a luxury apartment or house in the low-tax state on the Riviera ranged from $4,300 to $5,900 a square foot at the end of 2009, Knight Frank said. 

L ondon’s luxury-homes market was the best performer in Europe as the pound’s weakness and a yearlong slump in values encouraged investors to

compete for a shrinking number of homes for sale. In the US and Canada, luxury home values fell by an average 7.7%, led by San Francisco, while in the Caribbean they decreased 13%. 

Knight Frank’s report was accompanied by a survey on Citigroup Inc’s private bank, which showed that 91% of its customers expect their net wealth to be either unchanged or to increase “slightly” this year. Half of the respondents in the Citi Private Bank survey said they expected better returns from residential real estate this year than from other types of property. Real estate accounted for about a third of the assets owned by the bank’s clients, more than stocks and other investments. 

Property is expected to be the third-best performing asset class in 2010, after stocks and hedge funds, the survey showed. “Although relatively few respondents were planning to purchase a new primary residence this year, a significant proportion do see buying opportunities in the current market,” said David Poole, head of the UK arm of Citi Private Bank. Source: ET

Gulf NRIs send more money home

22 Mar 2010, 0400 hrs IST, Gayatri Nayak, ET Bureau

MUMBAI: The Indian Diaspora from the Gulf region is remitting more money home than their counterparts in the rest of the world. The region has increased its share of inward remittances even as the region is slowly witnessing a slow reverse migration. With global oil prices set to harden further, inflows from the region is expected to go up further. 

A study on invisibles by RBI in the balance of payments comprising income from transaction in services and overseas investments, besides permanent transfers such as remittances by the Diaspora, has said the Gulf has accounted for 27% of the total remittances. 

The central bank has quoted a survey on remittances by overseas Indians which it conducted in November 2009 (The other findings of the survey are, however, not in public domain). The last time, when RBI had done a similar survey published in November 2006, the Gulf region had accounted for 24% of the remittances inflows, while North America and Europe accounted for 44% and 13%, respectively. While the share of North America has now dipped to 38%, that of Europe has risen to 18%. 

India is the largest recipient of remittances by its Diaspora. The World Bank has estimated that it has received close to $47 billion as remittances in 2009. These include money sent by relatives abroad for the maintenance of their families back home as well as money parked in various NRI deposits that is used locally and not repatriated or used for local investments. The sharp increase in remittances started with the oil boom in the Gulf, resulting in the surge in migrant labour to the region and later in the 90s the technology boom resulted in an immigration surge of skilled IT professionals in North America and Europe. 

Bankers attribute the current rise in remittances from the Gulf to a slew of initiatives to tap the low-end market in the Gulf region. Many state-owned and new private banks have either set up branches or representative offices eyeing the potential in this segment and have devised many customer-friendly products an also tied up with exchange houses in the region. Besides, money transfer companies such as Times of Money and Western Union also have successively reached the Diaspora in the region. These initiatives have helped the flow of funds through official channels from the unofficial ‘hawala’ route earlier. 

The State Bank of India, which is estimated to have a share of 24% in the market is working towards increasing this share to 50% globally over the next few years. Among other things, it has envisaged geography-specific and clientele-specific products. For the Gulf region, it is targeting the low-end remittances market, which among other things includes tie-ups with exchange houses and also offering door-to-door services, said a senior SBI official requesting anonymity. 

According to the RBI study, the recent increase in global oil prices is likely to support remittances from Indian workers in the Gulf region. 

The declining share of North America is largely attributed to the slowdown in the region, resulting in job losses and hence, lower funds at their disposal to send back home, pointed an economist with a public sector bank.

11-year-old boy buys property worth $44 mn in Dubai

In an incredible shopping extravaganza, an 11-year-old boy from Azerbaijan bought nine waterfront mansions in Dubai, worth almost $44 million, in just two weeks early last year.

The total price tag is roughly 10,000 years’ worth of salary for the average citizen of Azerbaijan. But the preteen who owns a big chunk of some of Dubai’s priciest real estate seems to be anything but average.

The boy’s name, according to Dubai Land Department records, is Heydar Aliyev, which happens to be the same name as that of the son of Azerbaijan’s president, Ilham Aliyev. The owner’s date of birth, listed in property records, is also the same as that of Aliyev’s son.

Aliyev’s spokesmen declined to comment on how the president’s son or his namesake managed to came to own mansions on Palm Jumeirah, a luxury real estate development popular with multimillionaire British soccer stars and rich people.

“I have no comment on anything. I am stopping this talk. Goodbye,” the Washington Post quoted spokesman Azer Gasimov, as saying.

Ilham Aliyev’s annual salary as president is the equivalent of $228,000, far short of what is needed to buy even the smallest Palm property. Azerbaijan, a former Soviet republic blessed with plentiful oil and gas reserves, has long had a reputation for corruption.

In addition to recording nine properties owned by Heydar Aliyev, the now-12-year-old schoolboy, Dubai’s Land Department also has files in the names of Leyla and Arzu Aliyeva. President Aliyev has two daughters with the same names and roughly the same ages.

Their exact dates of birth could not be established, but various reports indicate Leyla’s birthday is the same as that of the Azerbaijani woman who figures in the Land Department records.In all, Azerbaijanis with the same names as the president’s three children own real estate in Dubai worth about $75 million.

HCC To Buy 66% Stake In Swiss Firm

March 15 2010, 11:17:20 IST | TEAM VCC

HCC is expecting to close the deal in the first quarter of FY 2010-11.

Hindustan Construction Company Ltd (HCC), a Mumbai-based construction firm, is acquiring a controlling stake in Karl Steiner AG (KSAG), a realty firm in Switzerland. The board of directors of the company has approved the acquisition plan, it said in a statement.

The transaction is subject to regulatory approvals. HCC is expecting to close the deal in the first quarter of FY 2010-11. KSAG is claimed to be the second largest operator in the Swiss real estate market.  

HCC is acquiring around 66% stake in KSAG for CHF 35 million ($33 million). KSAG plans to utilise the fund to strengthen its Swiss operation, and also look for growth opportunities in residential and commercial construction market in India. KSAG will issue fresh shares to HCC against the transaction, added the statement. 

The statement further added that Peter Steiner, the owner of KSAG, will sell his remaining 34% stake in the company in 2014. KSAG specialises in turnkey developments of new buildings and other refurbishment activities. It is headquartered in Zurich and has operations in Basel, Bern, Geneva, Lausanne and St. Gallen.

HCC has been quite active in strategic tieups with domestic and overseas majors in recent times for expanding its business in construction space. Apart from investing in other’s project, it has also been raising funds for its own projects. In January, HCC has raised Rs 250 crore from ICICI Bank Ltd through quasi-equity instruments for Lavasa project, a hill township being developed by the company near Pune. The fund has been raised through its subsidiary, Lavasa Corporation Ltd, which plans to invest Rs 50,000 crore in the project. 

The shares of HCC were traded at Rs 142.75, down by Rs 0.05 or 0.04%. Net sales and net profit of the company in 2009-10 were Rs 3,560.31 crore and Rs 99.53 crore, respectively. Source: VCCircle.com

NAR Defends Broker Price Opinions for HAFA Valuations

by by AUSTIN KILGORE

Monday, March 15th, 2010, 1:50 pm

The National Association of Realtors (NAR) is contesting claims, made by the Appraisal Institute last week, against the use of broker price opinions (BPOs) in the upcoming Make Home Affordable Foreclosure Alternatives (HAFA) short sale program. NAR asserts that when it comes to short sale valuations, BPOs are the best option out there.

HAFA begins April 5 and provides monetary incentives for borrowers, servicers and lenders to complete a short sale under the program’s terms. In a letter Friday to Treasury Secretary Timothy Geithner and Housing and Urban Development (HUD) Secretary Shaun Donovan, NAR president Vicki Cox Golder said BPOs are a cost-effective alternative to other valuation methods and a better choice to determine values in certain transactions, like short sales through the HAFA incentive program.

“BPOs are completed by licensed real estate agents with a detailed knowledge and understanding of real estate pricing and local market trends developed through active participation in the listing, negotiation and sale of properties,” Golder wrote. “This perspective offers a unique viewpoint that supports sound real estate decisions with accurate estimates of the value of real estate.”

Last week, the Appraisal Institute wrote Geithner a letter calling for an end to the use of BPOs for Making Home Affordable modifications and refinancings, as well as amending the rules for the upcoming HAFA program to require appraisals to determine value for government-incentivized short sales.

“Generally speaking, real estate agents and brokers are not independent or properly trained valuation specialists. They have an inherent bias towards quick results and action which produces a fee for themselves irrespective of whether the lender/services/investor/property owner/borrower gets a fair return on the short sale,” the Appraisal Institute said in its letter.

Golder contested those allegations, and said there is no evidence to support the claim that appraisers are more or less likely to engage in mortgage fraud than real estate agents, adding NAR members that perform BPOs must adhere to the association’s ethics code.

“While misconceptions in the industry persist, there is no evidence that a BPO exacerbates mortgage fraud or abuse,” Golder wrote.

NAR is the second group to publicly challenge the Appraisal Institute’s claims. Last week, the Real Estate Valuation Advocacy Association (REVAA), a year-old trade group representing firms and professionals in the valuations industry, sent Geithner a letter arguing that flexibility in the business helps to reduce costs and make appraisal reports faster. Source: HousingWire.com

Countrywide Acquires U.K. Franchise for Sotheby's International Realty Brand

Sotheby's International Realty Affiliates LLC today announced the signing of an exclusive 25-year licensing agreement for the United Kingdom with Countrywide, the U.K.'s largest estate agency and property services group.

Under the agreement, Countrywide has the exclusive license to the Sotheby's International Realty® brand across the United Kingdom and Channel Islands. Countrywide will create a new subsidiary called United Kingdom Sotheby's International Realty to operate its new luxury brokerage business in those regions. As part of the transaction, Countrywide acquired the Sotheby's International Realty - London office in Mayfair, previously owned and managed by NRT LLC, the largest owner and operator of real estate brokerages in the United States. The office will be renamed London Sotheby's International Realty.

"This is a major step forward in our worldwide growth plan," said Michael R. Good, president and chief executive officer, Sotheby's International Realty Affiliates LLC. "This agreement will enable the Sotheby's International Realty brand to expand significantly in London and throughout the United Kingdom. The leadership of Countrywide is very talented and committed to growing our presence steadily over the next several years."

The Sotheby's International Realty network has approximately 500 offices in 38 countries and territories worldwide. Franchise affiliates benefit from an association with the world-renowned Sotheby's Auction House, established in 1744. “Countrywide moves more people than any other agent in the United Kingdom through a network of 1,200 offices with 41 leading estate agency brands,” said Grenville Turner, Countrywide Group Chief Executive.  “We plan to expand the presence of theSotheby’s International Realty brand in central London and across the United Kingdom and to capitalize on the renewed sense of confidence we see in the property market.  While this new business will be run separately from our other brands, we intend to leverage the support of our existing business structure. We also look forward to collaborating closely with the Sotheby’s Auction House in London as we develop our strategies.”

Countrywide has seen growth in its U.K. market share over the last year, and believes this agreement provides the platform for additional expansion.  “The Sotheby’s International Realty brand is iconic and offers a huge potential for quality growth,” said Robert Scarff, managing director, Countrywide Estate Agents.  “The strength of the U.K. property market for foreign investors makes this an ideal situation for us.”

According to Charlie Smith, managing director, United Kingdom  Sotheby’s International Realty, the agreement offers the opportunity to be part of a larger network of offices across the United Kingdom.  “I’m thrilled with this news as Countrywide is the biggest player in the market with the energy and power to help us grow a U.K.-wide network,” said Smith, whose tenure with the Sotheby’s International Realty brand surpasses 10 years.  “This offers potential to grow across prime locations and signals a new and exciting chapter in our history.”

About Sotheby’s International Realty Affiliates LLC

Founded in 1976 to provide independent brokerages with a powerful marketing and referral program for luxury listings, the Sotheby’s International Realty network was designed to connect the finest independent real estate companies to the most prestigious clientele in the world. In February 2004, Realogy Corporation, a global provider of real estate and relocation services, entered into a long-term strategic alliance with Sotheby’s, the operator of the auction house.  The agreement provided for the licensing of the Sotheby’s International Realty name and the development of a full franchise system by Realogy’s subsidiary, Sotheby’s International Realty Affiliates LLC. Affiliations in the system are granted only to brokerages and individuals meeting strict qualifications. Sotheby’s International Realty Affiliates LLC supports its affiliates with a host of operational, marketing, recruiting, educational and business development resources. Franchise affiliates also benefit from an association with the venerable Sotheby’s auction house, established in 1744. For more information, visit www.sothebysrealty.com.

About Countrywide

Countrywide is the UK's largest and most successful estate agency and property services Group, operating more than 1,200 associated branches across England, Scotland and Wales.

Countrywide’s network of expertise helps more people move than any other business in the UK and is a leading provider of estate agency, lettings, mortgage services, land and new homes, franchising, auctions, surveying, conveyancing and corporate property management services.

Countrywide’s award-winning service has earned the business 29 high-profile industry awards in the last two years, which include Best Estate Agency, Best Letting Agency and Best Land & New Homes Agent of the Year at the 2009 Negotiator Awards, and Best Surveyor & Valuer at the 2009 Mortgage Strategy Awards. Customers also voted Countrywide Best Estate Agent at the 2009 Estate Agent & Letting Agent of the Year Awards.  For more information, visit www.countrywide.co.uk. Source: BNET

The Property Virgins Show by Sandra Rinomato

Property Virgins premiered on HGTV Canada in March 2006 and expanded to HGTV in the U.S. during season two. Now in season three, this show's popularity continues. 

Buying a home can be a stressful experience because of deciding what home meets a budget yet meets the needs and tastes of the buyer. Many buyers want to buy the home of their dreams and live in a specific neighborhood but when it comes down to affordability, there could be a big disappointment in store.

Buyers either give up hope or buy a house that is beyond their means. Sandra Rinomato, host of Property Virgins, guides first time buyers through the entire process of choosing a home and clinching the deal.

About the Property Virgins Show

The show opens with real estate agent Sandra Rinomato interviewing the buyers and asking how much they can afford and what they want in a home; such as number of bedrooms, proximity to transportation, preferred locations and extras such as fireplace or swimming pool.

Sandra and the buyers take a walk in a neighborhood where the buyers would like to live and Sandra asks which houses they like. In response, Sandra tells them the price of the house. Most times, the house is out of their price range. This is where reality sets in.

Sandra proceeds with selecting homes within their price range and tells the audience about the neighborhood and how the house meets the needs of the buyers. When Sandra and the buyers arrive at the house, she lets them view the house while she waits outside. The audience sees the buyer’s tour the house and listens to their comments.

When they meet Sandra outside again, she gets their feedback and also asks them to guess the price. Sandra then goes back in the house with the buyers and highlights the good points of the house and the hidden potential that they may have missed.

Then they all move on to view several other homes. After the tour, Sandra asks which houses they would like to see again in order to decide on which one they would like to present an offer to the seller.

Sandra then presents the offer and gets back to the buyers with the outcome. In some episodes, the buyers need to present a revised offer and other times their offer is accepted. Sometimes the buyers lose out and other times a deal is signed and the buyers become homeowners. Not every show has a happy ending but in the end, first time buyers are better educated in the real estate game.

About Sandra Rinomato

A property expert in the Toronto area for over 12 years,Property Virgins host, Sandra Rinomato, has focused her career on achieving the best possible outcome for her clients. Whether buying or selling a home, setting the stage for an outstanding performance is Sandra's specialty. There is a formula for success in selling real estate, and she uses it! With her upfront honesty and "go-that-extra-mile" attitude, her effective negotiating skills combined with her expertise and professionalism are a true "value-add" for all real estate transactions.Sandra is a certified real estate broker manager at a large international real estate company in Toronto Ontario. She has earned a prestigious award for achieving sales within the top 5% of her company world wide.

• In 2007, Sandra Rinomato received the coveted Stevie Award for the Best Canadian Entrepreneur.
• Sandra has written her first book Realty Check: The Real Scoop on Real Estate which is due for release soon.
• At the HGTV website, Sandra has a blog where she contributes articles on real estate.
• Sandra is involved with fund raising for charities such as Breast Cancer Research, Coats for Kids and Baskets for Women’s Shelters.

In addition to her busy schedule of filming Property Virgins, Sandra works as a manager and coach for other realtors within her company.

Sources:

• HGTV Canada and U.S.
• Stevie Awards
• Suite 101