Veil lifted on Saudi Arabia’s new super-luxury airport
The design for a new airport on Saudi Arabia’s northwestern coast has been unveiled, with the concept derived from the optical illusion of a mirage.
Foster + Partners of the UK came out the terminal and control tower design, while the airport masterplan was from Egis.
The airport, due for completion in 2023, is to be a key attraction of the destination-in-the-making,
“Amaala” on the Red Sea shores. It will accommodate one million travellers per year.
“Visitors will be greeted by personalised experiences from the moment they step off the plane,” said Nicholas Naples, CEO of Amaala. “From design to personalisation, this will be no ordinary airport.
“This will be a unique space that personifies luxury and marks the start of memorable experiences for the world’s most discerning guests.”
On approaching the airport, travellers will see “land art” from the air. Entering the terminal, they will be greeted with a sleek mirrored edifice. The structure takes its inspiration from the surrounding environment, resulting in the mirage effect. A courtyard will anchor the terminal.
The airport will have climate-controlled hangars for private jets as well as a ground transfer service that is accessible from inside the arrival area.
According to Gerard Evenden, Senior Executive Partner of Foster + Partners,
“Responding to the surrounding landscape, the terminal building will form an exclusive gateway to the Amaala resort. The passenger experience through the entire building will be akin to a private members club – luxurious and relaxing.”
UAE new car sales could drop by 50-60pc this year as COVID-19 bites deep
The UAE’s new car sales could be hit by a 50-60 percent drop this year, and will have to wait until next year’s Expo before a recovery. That’s according to forecasts by leading dealerships in Dubai.
Even secondhand car sales will not offer much of a lift– volumes could be off by 15-30 percent from a year ago. “Dumping by car rental companies (de-fleeting) is expected as these firms face utilization challenges,” states the findings by the automotive group.
In fact, there will not be one single category that dealerships can fall back upon, with the COVID-19 wrecking demand. Parts and service centre revenues are estimated to also drop 15-30 percent. That dent will be quite severe as revenues from this had provided some boost in the last four years.
The dealership group says that short-term sops from the government could help them out of an extremely difficult situation. This could include a reduction in VAT and custom duty, which can help push new car sales.
“Additional support in terms of government purchases can drive revenue generation,” the report adds.
“Due to the severe situation (caused by COVID-19), companies are not in a position to purchase new vehicles as their requirements have also dropped in line with the market,’ said Michel Ayat, CEO of Arabian Automobiles Co. and Chairman of Dubai Car Dealer Business Group.
“The only opportunity is in the segment of delivery vans where there is a slightly bigger demand than other vehicles.”
UAE shoppers are back to selling their gold as prices cross dh200 a gram
For the second time in two months, residents in the UAE are heading back to gold and jewellery stores– to sell rather than buy. This comes after the official Dubai gold rate went past Dh200 a gram for the first time since 2012.
Early on Thursday, the price for 22K was at Dh201.25 a gram. On May 18, it had touched Dh200 a gram before dropping, but not before seeing a sharp increase in selling activity by consumers rather than retailers. (The peak for Dubai gold price was on September 6, 2011 when it touched Dh215 a gram. Not many expect gold to push to those levels, at least for now.)
“It seems the Dh200 a gram level is the trigger for UAE residents to start selling some of their gold,” said Cyriac Varghese, General Manager at Sky Jewellery. “Last month, some of the selling had to do with Indian expats wanting to raise cash for the repatriation flights to India, which had just launched. There was a bit of desperation too because many who wanted to board the flights were short of funds.
“This time too, the selling is happening because many expats are trying to stock up their ready funds – and selling gold when prices are this high seems the best way to do it. On thursday, gold’s proving to be the only asset they can sell and get a premium on what they bought for.”
What UAE needs is a giant shipping line
The COVID-19 has highlighted our fundamental dependence on transport infrastructures, with an unprecedented demand for logistics during the crisis.
According to analysis by Dubai Chamber, the UAE’s maritime freight connectivity was a major factor in ensuring vital supplies reach global markets even as air transit channels – especially passenger airplanes which carried cargo – were restricted after countries halted flights.
But as the UAE’s logistics sector continues to play a key role in efforts to fight the pandemic, it also points to an area of opportunity we have yet to tap into. The shipping industry handles close to 90 percent of global trade, and while we enjoy the world-class infrastructure of Dubai Ports World and Jebel Ali’s role as the Middle East’s biggest transshipment hub, we are missing the presence of a homegrown global leader in shipping.
Shipping is somewhat countercyclical to oil prices. Since fuel is an important component of operating cost, low oil prices now mean lower operational expenditure and higher profitability – a trend that is clearly reflected in the recent run-up in various shipping companies.
Following the International Maritime Organisation (IMO) marine fuel standards change early this year (IMO 2020), the Very Low Sulphur Fuel Oil (VLSFO) costs have dropped from the peak of $800/MT to $300/MT in the last four months, providing tailwinds to the shipping industry through lower vessel operating costs.
When oil prices are in contango – when contrary to normal times, future prices are higher than spot prices – demand for tankers also increases as oil importing nations and commodity traders line up tankers to purchase cheap oil in the spot market and sell forward contracts to lock in gains. This usually leads to higher vessel chartering rates and, recently, Very Large Crude Carrier (VLCC) rates went as high as $300,000 per day from just $15,000 only a year ago.
While the rates have now stabilized to around $50,000, they are still higher than last year’s average.
Dubai homeowners find it’s not easy changing property managers
Property owners in Dubai are finding it’s not easy to change their property management firms… and especially those ones owned by the project’s developers.
“Developers have created a separate company to operate as OA (owners association) management companies,” said Rishi Tayal, an investor in multiple projects in Dubai, including those owned by Emaar and Damac. “But these are principally 100 percent owned and managed by them.
“Actual property owners have very little say in it. So far, there is no mechanism for the owners to set up their own OAs and have a say in the decisions made. Most of the service charges for this year were not even brought up for proper discussion at OA meetings for review and were sent to RERA without owners’ inputs.”
This was not how it was meant to be, especially after an amended JOP (Jointly Owned Property) Law came into effect late last year, and which clearly limited the role of developers in setting the agenda for OAs once the project has been handed over. (Only in the case of master-developments were the developers involved in the OA process.)
As per the Law, each development would have its own homeowners association, and which would have the rights to appoint the OA management company to set and collect the service charges and be directly responsible for the upkeep of the project. The OA management companies would also liaise closely with RERA (Real Estate Regulatory Authority) on the auditing of the annual budgets.
Recently, tempers have flared between homeowners and developer-owned property management companies at some of the prestige projects in town. Notices were issued to homeowners implicitly warning them not to get involved in trying to get property management companies of their own choice.
“We would like to highlight and warn owners to refrain from indulging or actively participating in such a group either in forms of meetings or digital participation,” says an excerpt from a notice sent to property owners at one upscale high-rise development.
A “few property management companies and individuals have approached owners… with the intention of managing their units and changing the aesthetics of the units and the building to suit their business needs. These companies and individuals are also persuading and encouraging owners to mobilize against the building management demanding the ceasing of services on the pretense of mismanagement.”
Khalifa Al Hammadi is new chairman at Dubai developer union properties
Union Properties gets a new Chairman in Khalifa Hasan Ali Saleh Al Hammadi, marking an elevation from his earlier status as vice-chairman and CEO since December last. He replaces Butti Omair Bin Yousuf Al Mheiri, who had taken over the top role in 2017.
Al Hammadi is also chairman of Gulfa Mineral Water and Manufacturing Industries Co..
Union Properties now also has a reconstituted board of directors, six of whom are new entrants. This includes Fathi Ben Abdul Sattar Ben Grira, the new Vice-Chairman elected by majority through secret voting.
Union Properties recently filed a Dh1.5 billion claim against a contractor related to a 2009 project. It had also spoken about plans to bring in a Chinese investor in one of its ongoing projects.
Dubai, Abu Dhabi stock markets should consider merger, says FNC member
The Abu Dhabi and Dubai stock markets should consider a merger to better the UAE’s competitiveness regionally and globally, according to a member participating in the Federal National Council deliberations.
The statement will revive speculation that the two exchanges are headed towards an eventual merger. There had been such talk for years now, before subsiding over the last two years. Now, it’s picking up steam again.
The merger talk was raised by Obaid Khalfan Al Salami, a member of the House, and related to a discussion on precautionary measures taken by the UAE Securities and Commodities Authority to stem the sharp decline in market value amid the COVID-19 pandemic.
“Stock markets in the UAE over-reacted negatively to global markets changes,” Al Salami said. “The UAE stock market needs to be developed to operate efficiently and effectively in a competitive stock market environment.”
The UAE Minister of Economy, Sultan Bin Saeed Al Mansouri, said, that the stock markets regulator had taken measures to combat recent movements. It has set a maximum 5 percent daily limit on stock prices moving in either direction from the previous day’s closing.
“The limit could be increased to 7 percent for select stocks based on criteria that will need to be approved by the Securities and Commodities Authority,” he said Stocks were allowed a daily 10 percent maximum drop earlier.
UAE banks set for more job cuts, profit decline
A week away from reporting of the first half 2020 results, many UAE banks are headed towards implementing drastic cost-cutting measures to arrest decline in profits resulting from sharp decline in revenues and a potential spike in non-performing assets.
“Although some banks have been shedding jobs in small numbers quietly since the COVID-19 outbreak began; now it is obvious that more drastic measures are required to cut losses and make businesses viable,” said an industry source
Emirates NBD, the Dubai’s largest bank, on Tuesday laid off 800 employees across various sections. Banking sector sources have confirmed more banks are likely to lay-off workers in the next few weeks. The banking sector across the GCC is expected to witness similar trends.
Financial regulators across the GCC announced a number of policy measures during Q2-2020 to deal with the COVID-19 crisis that were marred by lockdowns. A significant element of these efforts involved the banking sector in the region that had to postpone installments, waive numerous charges and support the vital SME sector. Business activities have came to a halt due to the lockdowns that affected project activity and loan offtake and repayments by businesses.
To offset the impact, governments announced numerous monetary and cash-flow measures. Central banks in the region rolled out a number of policy measures starting with rate cuts to encourage borrowing, efforts that focused on continued lending by banks to support businesses and eased the burden of loan payments. In addition, liquidity support was offered through interest free funding and relaxation of requlatory capital requirements.