Syrian mall project stuck in indefinite pipeline
United Arab Emirates-based developers Majid Al Futtaim (MAF) says the long-term outlook for the Syrian economy and the Syrian consumer keeps them committed to the $1 billion Khams Shamat project outside of Damascus, but Iyad Malas, the group’s chief executive, conceded in a recent interview with CNN that it is nigh impossible to carry on with orderly planning of the project amid the nation’s upheaval. “We hope that things settle so that we can start construction. In reality, today it is very difficult to get contractors to even talk to you about potentially building [in Syria]”, Malas told CNN’s Marketplace Middle East program in early August, coming exactly one year after MAF had announced that it was starting to pour foundations at Khams Shamat. Plans for the mixed-use project, located on a one million square-meters plot just off the Beirut-Damascus International Highway, are to comprise vacation apartments and business spaces anchored by a 300-store shopping mall, which is to be the Levant region’s largest according to MAF.
Strutting like a German on the Dora Highway
Mercedes-Benz dealer T. Gargour & Fils (TGF) last month broke ground on a new 1,500 square meters (sqm) showroom right next to its main location on the northern gates of Beirut, providing a drop of commercial real estate development news. Announcing the expansion at a media roundtable, TGF Chief Executive Cesar Aoun said that the new showroom, which is slated to open in 2013, will have space to exhibit 30 vehicles of the Mercedes-Benz and Smart brands. The new facility will also include 4,800 sqm on two underground levels that can be developed into service centers. Aoun refused to say how much TGF is investing in the new showroom. TGF, the Lebanese distribution partner of Germany’s Daimler AG, has in recent years invested substantially into developing its presence in Syria but currently faces the specter of poor returns in the embattled country. Besides building a new showroom in Beirut, the company is undertaking non-real estate investments this year by beefing up its customer care systems and its networks in Jordan and Palestine.
BDL’s green roof growing slowly
If you are waiting to see the green roof on top of Banque du Liban, Lebanon’s central bank, you’ll have to have just a little more patience. The country’s first high-profile public sector project for an intensive green installation is on course, despite a delay due to changes in the terms of reference, said Hassan Harajli, project manager at Cedro-United Nations Development Program, to Executive. The UNDP energy efficiency program for Lebanon is spearheading the project, which will provide insights on new ways to use green technology for environmentally compatible cooling of buildings in Lebanon’s climate (see Executive’s May 2012 issue). Tenders were supposed to be awarded by midyear but the prequalified bidding companies asked for additional information on the project terms, according to Jamil Corbani, chief executive of bidder Green Studios. “All three companies, including us, asked for more details in the terms of reference and the deadline for the tender was extended twice,” he said. According to Harajli, the procurement process is 90 percent complete. The contract is now scheduled to be awarded within the next month. “Implementation will begin in October and by March of next year, the project should be completed,” said Harajli.
UAE property under the e-hammer
Dubai-based Asteco, one of the United Arab Emirates’ leading companies for real estate and property management, has signed a partnership agreement with a United States-based realty group for a new real-estate auction website. Its partnership is with LFC International Real Estate Brokerage, a Dubai-based unit of the LFC Group of Companies headquartered in California. In entering the partnership, Asteco aims to attract interest from institutional and private investors that are based overseas, said Elaine Jones, chief executive of Asteco. In addition to a commercial agreement, property owners who want to use the online auction channel will have to set a minimum bid price and agree to an auction period during which their property will be featured on the auction site Freedom Realty Exchange (fre.com). LFC Group acts as a real estate auction marketing company which, according to its website, has been operating online property auction sites starting in 2004. LFC said in April of 2012 that it was organizing an online auction for a corporate floor in Dubai’s Burj Khalifa, the world’s tallest building, with a reserve price of $5.4 million. The auction period closed at the end of June but LFC declined to comment on the outcome when contacted by Arabian Business, according to the publication.
U.A.E. developers see big shines and small smears
Several United Arab Emirates-based companies in real estate development and construction beat expectations with their second-quarter profit disclosures. Winners in Abu Dhabi and Dubai were the respective largest sector companies. Pundits viewed the results as indicators for the recovery of the UAE real estate market but the sector also saw losses at two listed companies. Abu Dhabi-based Aldar announced $113.8 million net profit for the quarter, representing a jump of 228 percent on a 500 percent increase in revenues. Sorouh also showed an improvement, albeit smaller, in reporting $45.4 million net that signified a 33 percent gain. The two companies, already siblings by their state affiliations, are in negotiations for a full merger. RAK Properties, the Ras Al Khaimah developer traded on the Abu Dhabi Securities Exchange (ADX), reported that its profits dropped 30.5 percent to $6.3 million. Newcomer Eshraq Properties, also listed on the ADX, disclosed a net loss of $779,000. The company, which went public last autumn, had written a $2.9 million net profit in the first quarter. Emaar, the largest developer listed on the Dubai Financial Market, disclosed $167 million in net profits. The result represented a 245.6 percent improvement from $68 million in the second quarter of 2011 when the company took an impairment charge on its $46.8 million investment in Dubai Bank. Year-on-year profits at Deyaar were up 2.8 percent in the second quarter, but Union Properties swung to a profit of $22.8 million from a loss of $141.8 million, according to calculations by Reuters. Dubai state-owned Nakheel Properties reported first-half net results of $208.8 million, up 36.5 percent from $153 million in first half 2011. Arabtec, the top UAE construction company by market value, surprised negatively with a $3.2 million second quarter net loss, down from a $7.9 million net profit a year ago.
Sign of cement life in Abdali
The Abdali project in Amman — touted as the Jordanian equivalent to Beirut’s central district — has stirred with reports of activity. A Dubai-based company, Al Waleed Real Estate, announced at the end of July its completion of a six-story office building with “investment cost of up to AED 50 million” ($13.6 million). The company said that its Al Waleed Atrium Building provides retail space on the ground floor and office space on the upper floors with 6,700 square meters of gross floor area. “We see that the general situation in Jordan is very good and very encouraging to invest and take advantage of the opportunities available in many economic sectors,” said the chief executive of Al Waleed Real Estate, Mohammed Abdul Razak al-Mutawa. The statement also said that Jordan was one of the few countries “not affected by Arab spring” and that residents are expected to start moving into Abdali by end of 2012.
