Oman will be launching a new long-term residence-by-investment visa scheme, according to reports. At the time of the announcement, Oman also awarded 22 expat investors with the new visa.

Citing the Ministry of Commerce, Industry and Investment Promotion, local reports suggest that the country will soon be unveiling a residence-by-investment scheme. The scheme will offer residency visas for a term of five to 10 years for non-citizens investing in the country.

Other incentives and benefits will also be part of the programme, but details are yet to be revealed. Further, indicators have been developed to assess the effectiveness, and financial and economic impact, of the new scheme.

For instance, it will monitor how many new foreign investment companies will be setting up shop in Oman, how much foreign investment it brings in, and what new employment opportunities arise out of the move.

The decision is one of many initiatives the country is taking to boost the economic environment. These include introducing value added tax at 5% this year, and allowing usufruct rights to non-citizens in certain areas of Muscat last year. The country also introduced a number of initiatives to enhance the attractiveness of its tourism sector.

All this is aimed at supporting economic growth. Oman is predicted to see a relatively higher growth rate compared to other GCC economies this year, at 2.5%. During 2022-23, this is expected to climb to 5.3%.

OTHER RESIDENCE-BY-INVESTMENT PROGRAMMES IN THE MEA REGION

In the Middle East, the UAE also provides residence-by-investment options for non-citizens. In fact, Dubai was recently named the world’s 11th best city for residence-by-investment, particularly for taxation benefits and COVID safety measures. The emirate introduced its residence by investment programme in August last year.

Port Louis was also highlighted in the report as one of the top cities by residence-by-investment. Dubai and Port Louis were the only two cities to be featured from the MEA region.

These programmes are largely seen as a means of bringing in foreign capital. In the wake of the pandemic last year, several countries updated their residence-by-investment schemes and launched online application portals.

However, these initiatives have also faced flak. They remain unpopular with EU authorities on account of security concerns, tax evasion, money laundering, and on a deeper level, the very nature of citizenship.

_{Photo credit: www.thenationalnews.com/business/economy/2021/09/29/oman-to-offer-long-term-residency-visas-to-attract-foreign-investment/}

 

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A new QAR 634 million (USD 174 million) 5-star healthcare facility and adjoining British private school is being planned for Qatar’s real estate market, at Qetaifan Island North, according to a statement.

The project is being developed in Qetaifan Island North, a new waterfront leisure destination in Lusail city, towards the north of Doha.

Government-backed developer Qetaifan Projects has partnered with UK-based real estate developer Fenton Whelan and investment and development firm Aplomado Investments for the project. Qetaifan Projects is fully owned by hotel chain operator Katara Hospitality.

International Hospitals Group is providing advisory service to identify an operator for the healthcare facility, the statement said. Construction of both projects is scheduled to start in Q1 next year, with a 24-month long construction schedule.

THE PROJECTS ARE AIMED AT BOOSTING QATAR'S REAL ESTATE

The healthcare facility will be spread across 8,500 square metres, whereas the private school will have a built-up area of 17,000 square metres in a 30,245 square metre-wide campus.

The school will feature a science and technology building, as well as a sports hall, apart from regular school facilities such as classrooms, a campus library, and a canteen.

It will also have playing fields, tennis courts and grounds, and faces the island’s salt canal for competitive rowing and riverboat punting.

“We do not consider the medical centre and the school as just an addition to the residents of Qetaifan Island North, but we treat this type of facility as an addition to the whole local real estate development market,” Sheikh Nasser bin Abdul Rahman Al-Thani, Managing Director of Qetaifan Projects.

Al-Thani noted that this would increase investment opportunities, improve the quality of projects, and allow developers to focus on the investor.

This would “positively affect the value of the investment plots and will encourage entering into more partnerships, whether local, regional or international,” he continued.

QETAIFAN ISLAND NORTH IS SCHEDULED FOR COMPLETION THIS YEAR

Qetaifan Island North is a 1.3 million square metre waterfront development. Attractions include a waterfront shopping and restaurants promenade, a linear park, a 1.2-kilometre salt canal, a water park, and more.

Further, it will also have a 5-star hotel with 335 keys and 10 chalets, and mixed-use residential buildings, including 107 villas and about 3,650 apartments and penthouses.

The project has already exceeded QAR 1 billion in sales, according to an earlier statement by Qetaifan Projects. Phase one of the Qetaifan Island North project is planned to be completed by November 2021.

_{Photo credit: www.qetaifanprojects.com/residential/, www.qetaifanprojects.com/qetaifan-projects-and-admares-sign-a-memorandum-of-understanding-to-operate-floating-hotels-in-qetaifan-island-north/}

 

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Middle East residential investors are more keen to purchase holiday homes than their global counterparts, according to the 2021 Knight Frank Global Buyer Survey.

A total of 14% of surveyed Middle East residential investors noted that they would like to purchase a holiday home, compared to a global average of just 6%.

Further, the survey showed that 23% of respondents in the Middle would be motivated to make their next purchase in order to upgrade their primary residence. However, this is lower than the global average of 35%.

Globally, 33% of buyers are more likely to purchase a second home due to the global pandemic, a growth of 7% from last year. Of these, 23% said that the pandemic had an impact on where they decided to purchase a second home, whereas 22% noted that their purchasing plans were delayed because of the pandemic.

Interestingly, the report found that 95% of Middle East respondents lived in cities, as compared to a global 68%.

“Unlike mature cities across the world, which often have very defined cores and sprawling suburbs, cities in the Gulf are still in expansion mode, which means there are multiple focus communities, where the majority of people live,” Faisal Durrani, Partner – Head of Middle East Research at Knight Frank, said.

The 2021 Knight Frank Global Buyer Survey covers 900 Knight Frank clients across 49 global markets, including the Middle East.

ESG IS POPULAR AMONGST MIDDLE EAST RESIDENTIAL INVESTORS

The report noted that certain ESG factors were more important to Middle East residential investors than elsewhere in the world.

Energy efficiency was high on the priority list, with 50% of the survey’s respondents noting energy efficiency of their next home was a ‘very important’ consideration. This was slightly north of the global average, which stood at 42%.

Further, proximity to green space and good air quality was more important to Middle East residential investors than global buyers, topping the list of location criteria. Other criteria that were also important included proximity to good schools and access to healthcare.

“This should send a very strong signal to developers and planners around the region about how important ‘being greener’ will be in driving the success of new projects,” Durrani said. “Furthermore, the November Climate Change Conference (COP 26) in Glasgow will help to cement 2021 as the Year of the Green Re-awakening for real estate and the green drumbeat is only going to grow louder as investors and buyers zero in on this all-important issue.”

 

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Buyer behaviour and appetite for residential real estate in the UAE and Saudi Arabia is looking optimistic, according to Alexander Luke Davies and Giles Hannah.

Davies, CCO at Dubai Holding Real Estate, and Hannah, Residential Executive Director at The Red Sea Development Company (TRSDC), were speaking at the Cityscape GCC Summit 2021.

They outlined a number of local factors leading to the current uptick in residential real estate in the UAE and Saudi Arabia.

RESIDENTIAL REAL ESTATE IN THE UAE

The residential sector in the UAE has been seeing “accelerated growth,” with transactions amounting to USD 88 billion as of the end of August, Davies said.

The market is performing better than predicted, while home ownership through mortgage-backed transactions are seeing increasing interest, Davies added. New visa options are enhancing the attractiveness of the country from a residential standpoint, he said.

Further, with the shift to home ownership, buyers are also looking at bigger spaces, luxury homes, community spaces and properties with facilities, he also said.

However, with the economy picking up, behaviour is once again shifting, with wider spaces in areas that may be away from the city centre now being weighed against daily commute considerations.

Meanwhile, disruptions in the supply chain concerning labour and recruitment at all stages of construction, as well as availability of construction materials, is a challenge for residential real estate in the UAE, Davies said. It has impacted some deliveries, he noted.

RESIDENTIAL REAL ESTATE IN SAUDI ARABIA

In Saudi Arabia, major new developments are on the way in the background of low supply of prime and super prime residential units, Hannah said. The market is leaning towards state-of the art technology, sustainability considerations and contemporary design, he added.

Further, with 60% of the population under 30 years old, financial initiatives are underway to incentives purchasing vs renting.

According to a TRSDC study on purchase decisions, 65% of people want proximity to healthcare, and 45% are willing to pay more for branded residences.

Meanwhile, Saudi Arabia’s moves to open up tourism in the country is yielding results. Hannah noted that tourism is expected to grow 70-80% over the next five to seven years.

“We’re seeing phenomenal interest from the international market, both for purchasers interested in owning a second home [or] a luxury residence. We’re also seeing some of the world’s leading hotel groups looking to invest here for the first time to really grow that hotel portfolio as tourism grows,” Hannah said.

 

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A healthy school building leads to increased productivity, healthier staff and students, and better indoor air quality. This is according to Navin Mohan Valrani, CEO of Dubai’s Arcadia Education.

Valrani was speaking on sustainability in schools alongside Jason Burnside, Partner at Middle East-based architecture firm Godwin Austen Johnson, at the Cityscape GCC Summit 2021.

By building sustainable school buildings, operators can not only improve energy efficiency within the buildings, but also benefit from an operational point of view, Valrani noted.

Meanwhile, Burnside said that the sustainable design approach needs to be matched by a client who understands the costs related to these systems.

Associated costs should be treated as an investment, Valrani also said. Embracing sustainability in schools at the build stage has an impact not only on operational costs, but also on future valuations of the school building.

Valuations are “significantly higher” for school buildings that are sustainable, Valrani noted.

SUSTAINABILITY IN SCHOOLS: ARCADIA'S EXAMPLE

Arcadia schools are LEED silver rated for their primary school, and LEED gold rated for their secondary school.

Apart from a fresh air unit, Arcadia schools also have an efficient air conditioning solution built with Godwin Austen Johnson, Valrani said. The system is optimised for energy efficiency. Further, the schools are also built using sustainable materials sourced locally, he added.

“We’re in a region that has got a very clever vernacular architecture, and they’ve learnt to deal with these harsh environments over many centuries, and refine it in a very low-tech way,” Burnside said. “Through all the projects with Arcadia, understanding the site, maximising the return in terms of the built up footprint, but also looking at a very low tech solution to how the building is designed, can then be made better by looking at the systems that keep it efficient.”

Further, Burnside also said that there is increasing interest in sustainability in schools in the region. This, he said, was presumably because students and their parents have growing expectations for school buildings to be healthy.

Valrani echoed this thought, noting that “the international parent that’s relocating to Dubai” is now paying more attention to climate change, looking for schools that have sustainability values and commitments.

Retrofitting is also gaining interest and has benefits in terms of thermal capacities and running costs, Burnside said. The challenge, as Burnside notes, is that while demolition and reconstruction have a bigger carbon footprint, it may not always be possible to fully refurbish a building from a costs and feasibility standpoint.

_{Photo credit: www.nora.com/sweden/en/project-references/education/ae/dubai_arcadia-preparatory-school}

 

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The area covered by The Red Sea Project and Amaala now extends to 20,000 square kilometres after The Red Sea Development Company (TRSDC) and Amaala’s merger announcement. It now includes the area covered by Amaala, Russell Brainard, Chief Environment Officer for the Red Sea Project at TRSDC, said.

Brainard was speaking at the Cityscape GCC Summit 2021.

He noted that The Red Sea Project aims to be “the world’s most ambitious luxury tourism and hospitality” project based on the natural setting of the environment and pioneering new sustainable standards.

The ecotourism project includes coral reefs, island beaches, desert canyons and other similar experiences integrated with the natural habitat.

“We’re trying to make a better natural environment for a better tomorrow. That makes economic sense as well,” Brainard said.

"The draw for our visitors and residents is the natural beauty and the wildlife. We want to make sure those are intact or more abundant over time.”

Phase 1 of The Red Sea Project, which includes 16 hotels with 3000 rooms and about 400 residential units (not inclusive of Amaala), is expected to be ready by 2023.

The overall project is expected to be completed by 2030, in line with Vision 2030. It will include 22 developed islands, 6 inland sites, about 1000 residential units, and 50 hotels capped at 8000 keys to limit overdevelopment. The project expects a million visitors after completion.

ENVIRONMENTAL GOALS OF THE RED SEA PROJECT

The cap on the total number of hotel keys was established based on a marine spatial planning study published by peer-reviewed environmental journal Frontiers in Marine Science, Brainard said.

The project aims to grow biodiversity in the region by 30% over the next two decades, he also noted. Further, nine islands will serve as conservation islands.

The no-take marine protected area (MPA) established by the project spans nearly 7,000 square kilometres, the largest such no-take MPA across Saudi Arabia, the Red Sea and the Middle East, Brainard noted.

Further, The Red Sea Project aims to restore endangered habitats, such as new corals across “tens of kilometres.” Other habits include mangoes, seagrasses, and native land vegetation.

To achieve this restoration effort, TRSDC is using high-resolution habitat maps for planning and development, baseline marine assessments for monitoring, as well as protected species and crypto biota biodiversity assessments.

The Red Sea Project is also being built using low-carbon green concrete and has 60-70% of manufacturing off-site to control the environmental footprint of the project.

_{Photo credit: www.abouther.com/node/38611/lifestyle/, www.aasarchitecture.com/2021/03/, www.dezeen.com/2021/02/21/foster-partners-saudi-arabia-red-sea-project-ummahat-alshaykh-hotel-12/}

 

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Since 2014, real estate in the UAE has been a bear market yet recent months have seen an uptick in the sale of town houses and villas. What were the driving factors of this?

From 2011 to 2014 oil prices averaged over $100 a barrel. This meant that governments in the region were able to save significantly and run large fiscal surpluses, while also investing in diversifying the economy.

At the end of 2014, the oil bull market came to end and prices, roughly speaking, halved. This put fiscal constraints on governments in the region; and fiscal controls lowered aggregate demand growth rates. In turn, this slowed down the rate of population growth, resulting in insufficient demand for real estate.

During the pandemic, Dubai’s young population, abundant health services, and successful vaccination programme allowed the city to stay generally open to business and travel. At the high-end, this caused a spike in interest in people coming to the region, which has boosted the real estate market.

The UAE real estate market has traditionally attracted high levels of foreign capital. What are the main drivers of foreign investment in the region?

Dubai has established itself as a regional hub and has implemented favourable visa, lifestyle, and foreign ownership reforms, which have allowed the UAE to stay ahead of the curve regarding foreign capital investment.

Yet it’s important to note that foreign investment in real estate remains focussed on the residential sector.

In the wake of the pandemic, what is going to drive recovery in the UAE real estate industry?

Investment is certainly a key driver, especially in Dubai where over 85% of the population are expats. Post-COVID-19, a great number of people are seeing Dubai as an attractive place to buy property. There is anecdotal evidence suggesting that the emirate has become a ‘covid bolthole’, with entrepreneurs and business owners viewing Dubai as a desirable location to live to see out the pandemic.

There is a very strong correlation between economic recovery and population growth and fundamentally, that’s the key driver here.

Despite the recent market decline, over 46% of real estate professionals forecast growth for the GCC property market over the next year, Cityscape survey data shows.  In which sectors and locations do you see the greatest potential for growth?

At an institutional level, there’s excellent value and potential to be found in the logistics and infrastructure space, such as distribution centre logistics, commercial, and database space. Traditionally in this region, we have not seen a large proportion of e-commerce transactions in comparison to markets elsewhere. So that’s a potential growth area.

“More broadly, we see value emerging in segments of the office market; but a pick-up in transaction volumes will require realism from both buyers and sellers as to where the market is right now.”

Recovery, growth, decline, stability, volatility? What do you think the next 5 years holds for the UAE’s real estate industry?

Post-COVID recovery certainly, but I’d like to see a move from recovery to stability.

The UAE has seen a lot of volatility over the past 15-20 years. Greater stability would provide a solid backdrop to investors and lay the groundwork for long-term price strength in the market.

Across the broader real estate market, we don’t necessarily foresee boom conditions as countries in the Gulf are still focussed on fiscal stability.

Chris, please can you provide some insight into you career journey to date and outline the core responsibilities of your current role?

My career trajectory has always been guided by my desire to learn. Learning new things allows me to keep my interest levels high and remain motivated.

For the past two years, I have held the position of Chief Economist at Peninsula Real Estate, focussing mainly on research and strategy. A lot of my time is spent looking at investment opportunities, analysing the macro-economic environment in the Gulf, and providing quantitative risk/return profiles and assessments of MENA countries and sectors.

When I moved to the Gulf seven years ago, I worked as the Head of Research at the Kuwait Institute of Banking Studies and after that worked as the Chief Economic Advisor to the governor of the DIFC.

Prior to that I undertook various roles at large companies including PWC, JP Morgan and Bloomberg, in London and Washington DC. I also took time out from my career to study for a PHD.

Despite the past six years of negative growth in the Dubai rental market, the six months to June 2021 have shown signs of a rapid recovery for this sector. As the market continues to expand, Knight Frank forecasts that the next year will see ‘historic levels’ of supply with residential units in Dubai predicted to increase by approx. 47,000 from 2020.

So, the question remains: has the rental market in Dubai reached a turning point?

In the first six months of 2021, rental prices across Dubai rose by 5%, according to a recent Savills report. One fifth of this growth was accounted for by an increase in villa rentals, as renters opted for more spacious and isolated living conditions in the wake of the COVID-19 pandemic.  

The report, which analysed the rental values and yields for residential real estate markets in 30 key locations worldwide, saw Dubai place among the top three cities globally to record the highest levels of rental growth in the six months from January to June of this year.

This hike in rental prices represents a tenfold increase on the average growth of 0.5% across all 30 cities included in the index. It follows a mean decline of -1.8% in 2020, a consequence of the fallout of the current global pandemic.

GLOBAL REAL ESTATE INVESTMENT ON THE RISE

Globally, real estate investment underwent a transformation this year as the multifamily residential sector emerged as the largest, leapfrogging the commercial sector for the first time since records began in 2007, Savills found.

The first half of the year recorded around $136 billion investment in residential real estate globally, a 35% increase on H1 of 2020.

As per the change in transaction volumes in H1 2021 versus H1 2019, Dubai ranked 4^th out of 30 cities after Singapore, Seoul, and Beijing, surging just shy of 50%.

A SERIES OF INFLUENTIAL EVENTS  

The COVID-19 pandemic undoubtedly impacted Dubai’s real estate market by increasing volatility and minimising levels of tourism and immigration to the city.

Yet as restrictions on freedoms and movement continue to ease, short-term lets are recovering well as people prioritise the heightened levels of flexibility, space, and hygiene, that come with apartments, villas, and town houses. Many are opting for hotel apartments, with occupancy levels reaching up to 95% at times, Ayman Ashor, general manager, Al Bandar Rotana and Al Bandar Arjaan said.

The surge in demand for hotel rooms, apartments and rental properties is also accountable to Expo 2020, which will attract millions of visitors to the city over the next six  months.

In certain areas, rents for hotel apartments have more than doubled in the run-up to Expo and are set to continue rising as the event progresses. Longer-term, Expo 2020 could likely trigger a turnaround of the UAE’s real estate sector and create opportunities for developers to profit from a decade of phenomenal growth, Bruno Wehbe, Vice President at Booz Allen Hamilton predicts.

VARYING LEVELS OF PRICE AND DEMAND

As is to be expected by the high number of luxury hotels and apartments, the locations bordering the beachfront and marina areas such as Dubai Marina, Palm Jumeirah, Bluewaters, and Jumeirah Beach Residence are the most popular with tourists and leisure guests to the city.

Where corporate and commercial visitors are concerned, accommodation is most sought after in the Downtown, Business Bay and DIFC areas.

As of September 2021, Palm Jumeirah is the community with the highest median rent at AED 617, 650 per garden home, as compared to Discovery Gardens, the area with the lowest rent at AED 24, 779 per apartment.

As visitors more commonly seek private and secluded areas of the city, demand in villa communities including Victory Heights, Jumeirah Golf Estates and Emirates Living is also rising, Property Monitor data shows.

When it comes to villas, Jumeirah Islands has the highest median rent (AED 324, 000) versus Falcon City of Wonders (AED 105, 850), which is the lowest.

Finally, considering average gross investment yields, at 7.87% Remraam tops the list, closely followed by Dubai Studio City (7.80%) and International City (7.79%).

 

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Demand within healthcare in the GCC will largely stem from the need for specialised services, Mansoor Ahmed, Director Research and Advisory, Healthcare, Education & PPP MENA Region, Colliers, said.

Ahmed was speaking at the Cityscape GCC Summit 2021.

The main driving force for healthcare in the GCC is the population, Ahmed noted. The population of roughly 55 million in the GCC as of 2020, is projected to grow to 73-75 million over the next 10 years, he said.

The composition of the population will have an effect on healthcare in the GCC, he continued.  Growing life expectancies, reduced infant, child and adult mortalities, and decreased fertility rates indicate an improvement in the population.

Further, individuals aged 0-25 years represent around 25% of the population, and are expected to drive demand for maternity and childcare services (over 20 million babies are expected to be born in the GCC), Ahmed said.

Those aged 18-44 years currently represent about 52% of the population and are critical to existing and future disease patterns and health expenditure.

Those aged 45-64 years, representing 20% of the population, are predicted to be responsible for a sharp rise in healthcare demand – nearly 80% of individual healthcare requirements tend to occur with those aged 40-50 years, especially in Saudi Arabia, UAE and Egypt.

OPPORTUNITIES FOR HEALTHCARE IN THE GCC

Demand for total beds is expected to increase in 2030, led mainly by Saudi Arabia (which will need about 30,000 new beds) and Egypt (over 161,000 new beds).

Further, GCC has the highest rates of diabetes, obesity and hypertension worldwide. Therefore, the focus will be on creating more specialised hospitals and centres of excellence, versus tertiary care or general hospitals. These include cosmetic surgeries, IVF, cardiology, ophthalmology, and oncology.

Long-term and rehab facilities, day-care surgical centres, beauty and cosmetic services, health-focused wellness retreats and nutrition clinics are also looking at optimistic market potential, as are day-care surgical centres.

GCC governments, especially in Saudi Arabia, the UAE, Kuwait and Oman, are looking to secure public-private partnerships to boost healthcare in the GCC, Ahmed noted.

Further, he added that international healthcare investors looking to invest in healthcare in the GCC can do so through lease models (if they would like to steer away from being involved in real estate aspects), management agreements with international operators, and joint ventures with operators.

 

For more insights and discussion around the MENA real estate market and to catch-up on Mansoor Ahmed’s session, attend the Cityscape GCC Summit live from 5-6^th October or on-demand throughout October and November 2021. Sign up for free here.