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Thursday, October 4, 2012

Dubai's property sector treading on recovery path

DUBAI: Dubai's property sector, which went into free fall when the global financial crisis hit, looks like it might be on a path to recovery, with prices starting to bottom out and a few developers daring to roll out new projects.

At the annual Cityscape Global show, which served over years of property frenzy as a launchpad for grandiose projects, a handful of developers displayed scale models for seaside and desert developments to test the appetite of the market.

The three-day international show began on Tuesday.

"We have seen demand increasing since the beginning of 2012," said Mohammed al-Khayat, commercial director at Meydan Group, owned by Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum, as he unveiled proposed new projects.

"The market is picking up... There is a heavy traffic of tourists. Many from Saudi Arabia," he said, adding that many tourists with time decide to buy secondary property in Dubai.

Property prices in the glitzy emirate took severe beating when the crisis hit, shedding more than half of their peak values registered in mid- 2008 after five years of breakneck-speed growth fuelled by speculative investments.

But investors are back on the look and have pulled prices up in different areas.

"We do see a recovery. It is a selective or partial recovery and certainly not across the market," said Craig Plumb, head of Middle East and North Africa research at Jones Lang LaSalle property services firm.

"There is always a room for new projects, but we are a bit concerned that people are getting carried away. There is still a lot of supply in the system and it is still coming on. I think a new project has to be well targeted at a particular niche," he said.


UEM to sell Time by year-end

KUALA LUMPUR: UEM Group Bhd expects to sell its 45.03 per cent subsidiary Time Engineering Bhd, an information communication technology service provider, by year-end.

Government-linked UEM has been mulling over divesting its Time Engineering stake since 2010, which it sees as a non-core asset.

UEM has four core business divisions - expressways, township and property development, engineering and construction, and asset and facility management.

UEM Group managing director and chief executive officer Datuk Izzaddin Idris said the diversified group is currently in talks with local suitors and hopes to complete the sale by year-end.

"We have been trying to sell Time since day one and have been trying to find the right mechanism.

"Once the board of directors meets and approves the sale, we will call you (the media) in due course," Izzaddin told reporters at UEM headquarters here yesterday.

It was earlier reported that a few parties had expressed interest in taking over Time Engineering, but the group said it wanted to grow the business first before selling it.

Time Engineering previously owned a 24.74 per cent stake in Internet service provider Time dotCom Bhd before disposing of it for RM287 million in 2011.

As at 2011, its price tag was said to be at least RM166 million.

UEM chairman Tan Sri Dr Ahmad Tajuddin Ali said the sale is consequential and, once the mechanism is in place, will come into effect.

"Time is just not our core business ... just like Pharmaniaga, which was a very good business. But we sold it off because UEM is not involved in healthcare," said Ahmad Tajuddin.

As at December 2011, the no-longer listed UEM, which is the owner of the cash-cow PLUS highway, owned assets totalling RM26.3 billion with shareholders' fund of RM7.6 billion.

Employing 16,000 workers, UEM is currently busy with the Nusajaya project in Johor, Second Penang Bridge, KLIA2, the 116km Cikampek-Palimanan toll highway in West Java and the Brunei national housing scheme project, which involves the design and construction of 4,000 houses over four years.

By Business Times

AZRB to redevelop Bangunan MAS

KUALA LUMPUR: Ahmad Zaki Resources Bhd (AZRB) has won a RM673 million job to redevelop Bangunan MAS in Jalan Sultan Ismail here.

The contract was awarded by Permodalan Nasional Bhd (PNB), Ahmad Zaki said in a statement to Bursa Malaysia yesterday.

PNB bought the 35-storey building from national carrier Malaysia Airlines about five years ago for RM130 million.

Ahmad Zaki will demolish an existing podium at the 35-storey building, build a 50-storey hotel and upgrade the existing 35-storey office building.

The hotel will also have six-storey basements for car park and mechanical and electrical service area.

Construction is expected to be completed by October 2017, the company said.

By Business Times