Lack of prime office space said to be holding back Saudi market

A lack of prime office stock in Saudi Arabia is holding the market back as firms struggle to find accommodation for their expansion plans, according to a new report.

Knight Frank’s Saudi Arabia Office Market Review 2018 said that there have been a number of notable commercial office transactions throughout this year, as key occupiers both from the public and private sector look to expand or move to upgraded premises.

But it added that the market continues to be dominated by a lack of Grade A stock and a large supply pipeline.

In terms of performance, market wide rents and occupancy levels have been under pressure since 2016, with the trend continuing into 2018 amid increasing levels of supply and subdued occupier demand, Knight Frank said.

It noted that key prime areas continued to perform better than the market average as a result of a lack of high quality stock.

“However a major headwind is that a large portion of upcoming supply falls within this category, which could put pressure on performance in this segment. Against the backdrop of a highly elastic supply dynamic, we see rents for Grade B assets softening further in the short term where buildings that suffer from poor accessibility and parking arrangements will struggle for occupancy,” the real estate consultancy said in the report.

“Although we have seen an improvement in business sentiment in 2018, we believe that any increase in demand will remain subdued in the short term, with rents and occupancy likely to remain under pressure as increased demand will be met with new supply. Vacancy rates can therefore be expected to rise placing downward pressure on rents,” it added.

Knight Frank said it expects landlords to continue offering incentives in order to maintain occupancy levels amid an increasingly competitive market.

Longer term, Knight Franks said it sees demand for office space picking up from current levels as economic reforms under the National Transformation Plan (NTP) and Vision 2030 start feeding through the wider economy, translating into an acceleration of growth in the non-oil private sector.

Saud Sulaymani, partner at Knight Frank Saudi Arabia, said: “Going forward, the implementation of various urban regeneration programs, mixed use communities, and large scale infrastructure projects is expected to act as a catalyst for the real estate market in the kingdom.”

For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Dubai home buyers to be offered more tools to seal best deals

House buyers in Dubai will soon have more detailed data at their fingertips to help them make the best decision on location and type of property.

UAE-based Property Finder has announced a new product – Pricing Report –  that will allow real estate brokers in the city to be armed with that crucial insider knowledge to get investors the best deal.

As the UAE property industry continues to navigate a subdued real estate market, Property Finder said the new product will allow agents to give “truly accurate and up-to-the-minute pricing advice to house sellers, reassuring and empowering them to get faster sales, while also boosting the local market”.

Pricing Report is a tool that allows agents to display a range of crucial data, enabling sellers to clearly see current facts, statistics and trends relevant to their home.

This data is sourced from both the latest government transactions and Property Finder statistics.

The information includes recent transactions in the chosen area, or even tower; price trends over a set period; and details on the broker’s current standing, such as whether they’re in the top 5 percent of performers in their area.

“Selling a property is a big financial and emotional decision, so it is important for homeowners to find the right agent to guide them through this process and ensure the property is sold at the right price,” said Alex Miauton, chief product officer at Property Finder.

He added: “Being able to view data on actual transactions and agent performance in a given area empowers sellers in this decision and gives them the transparency needed to form trusted relationships between sellers and agents.”

For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Oman’s airports chief hails passenger, revenue growth

Passenger numbers using airports in Oman have risen by 7 percent over the past year and revenues have been boosted by the opening of the new Muscat International Airport, a senior official has said.

In an interview with Bloomberg, Sheikh Aimen bin Ahmed Al Hosni, CEO, Oman Airports, said performance has been “very positive”.

“We are performing better than many other airports in the Middle East, especially during these challenging times in the region,” he said, adding that a 15 percent increase in transfer passengers has been seen in Muscat.

He said the opening of the new Muscat International Airport in March has helped the company achieve an increase in revenue.

Al Hosni also said Salalah Airport is also performing very well and experienced a record breaking Khareef season this year, with over 630,000 tourists visiting the region, compared to around 470,000 in the same period in 2017. 

He added that there has been steady cargo growth in Muscat over the last 12 months, helped by the opening of a new cargo facility in March with a capacity of up to 380,000 tonnes.

“This is definitely a targeted growth area for Oman Airports over the coming years, and we will be working closely with our national stakeholders and international partners to continue to improve and manage the cargo market in Oman,” he told Bloomberg.

The last few years has seen growth in the aviation sector in Oman with three airports opening in three years, with the start of operations at the new Salalah Airport in June 2015, the opening of the new Muscat International Airport in March 2018 and the opening of the new Duqm airport in September 2018.

“The scale of the projects to build and open the new airports is unprecedented in Oman in terms of investment, profile and prestige. 10 years in the planning, the new Muscat International Airport terminal cost $1.8 billion and the Salalah terminal cost $950 million, with further investment in ancillary infrastructure, including roads,” he added.

For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Abu Dhabi’s Yas Waterworld named world’s best

Yas Waterworld Abu Dhabi has been named the world’s leading waterpark at the World Travel Awards.

The waterpark on Yas Island racked up more votes than its fellow nominees, which included Orlando’s Typhoon Lagoon, and Spain’s Siam Park.

Bianca Sammut, general manager of Yas Waterworld, who accepted the award at a ceremony in Lisbon, Portugal, said: “We love this park, and to have that love reciprocated by fans around the world means everything to us.

“Since the day we opened Yas Waterworld’s doors, we’ve been on a mission to provide one-of-a-kind experiences to families from across the globe, and this award is recognition of that mission bearing fruit.

“We are committed to continuously upgrading the park, keeping it at the forefront of entertainment and leisure innovation, and creating special water adventures and memories that last a lifetime.”

Yas Waterworld Abu Dhabi features more than 40 rides, slides, and attractions and this year introduced Cinesplash, the region’s first 5D water adventure.

Yas Waterworld is managed and operated by Farah Experiences.

For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Kuwait’s ALAFCO inks deal to lease A320s to Scandinavian airline

Kuwait-based Aviation Lease and Finance Company, better known as ALAFCO, has signed an agreement with Scandinavian Airline Systems (SAS) for the lease of five new A320neo aircraft.

The aircraft will be leased for a period of 10 years, with the first aircraft scheduled to be delivered in April 2019, a statement said.

Niklas Hardange, vice president SAS Fleet Management, said: “We are very pleased to have ALAFCO as a partner. The agreement gives SAS a strong cost-effective platform in a competitive market. As always, we seek long term relationships with solution-oriented partners, such as ALAFCO, that understands the complex and demanding aviation business.”

Ahmad A Alzabin, ALAFCO’s vice chairman and CEO, added: “This agreement signifies the start of a long term strategic partnership with SAS, a globally recognized operator. The lease of the five A320neo aircraft is another example of ALAFCO’s continued efforts to source new customers and deepen our relationships across the industry.

“Going forward, I firmly believe that the A320neo aircraft will continue to support the growth plans and future needs of the aviation sector given the efficiencies attributed to this aircraft.”

The portfolio of ALAFCO, which is listed on the Kuwait Stock Exchange, consists of 62 Airbus and Boeing aircraft, leased to 20 airlines in 13 countries. Its remaining order book comprises 87 new aircraft from Airbus and Boeing including 43 A320neo, 10 A321neo and 34 B737 MAX.

Deliveries are scheduled to take place between 2018 and 2023.

For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Emirates Institute for Banking launches online research portal

The Emirates Institute for Banking and Financial Studies (EIBFS) has launched a new online research portal designed to allow bankers, finance professional and students access industry and economic reports, the EIBFS announced on Monday.

The research portal will also include training and educational aspects, according to the EIBFS.

Additionally, the EIBFS’s 2019 annual training plan includes the launch of four new mobile apps. One of the apps, EIBFS research, contains all the features of the research portal.

The portal and app will also include an “ask an expert” feature, which will allow industry professionals to clarify queries or doubts in any area of banking, including risk and compliance, banking technology, law, strategy, finance, accounting and operations management.

In June, EIBFS announced the launch of its new FinTech training lab.

“The web-based research portal is an is an exciting new additional to our programme offerings and showcases EIBFS’s focus on constantly coming up with innovative learning tools,” said Jamal Al Jasmi, general manager of EIBFS. “Such a tool with an ‘ask an expert’ feature makes it a powerful platform that combines flexibility with a real intent to provide knowledge.”

Noura Abbas Ahmad, the director of training at EIBFS, added that “it was evident there was a need of an advanced infrastructure in the online learning environment.”

“With remove learning increasing in demand, we are glad that have been able to offer a solution that meets the highest standards in training and development of professionals that will immensely benefit the sector as a whole,” she added.

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Al Hilal Bank executes world’s first Blockchain Sukuk transactions

Al Hilal Bank has become the world’s first Islamic bank to use Blockchain technology for the resale and settlement of an Islamic Sukuk (Sharia-compliant bond). It was used to transact a secondary market deal in Al Hilal Bank’s $500m Senior Sukuk maturing in September 2023.

Al Hilal Bank’s CEO, Alex Coelho, said that the technology will improve the security of similar transactions, paving the way for further digitised “Smart” Islamic Sukuks:  “The advantages of using smart contracts range from safer transactions with robust Shariah compliance, to the unlocking of new opportunities.”

The initiative is the result of the collaboration of Al Hilal Bank Digital Transformation team with Jibrel Network, a UAE-based FinTech. The collaboration was made possible thanks to the support of Abu Dhabi Global Markets’ (ADGM) FinTech platforms that foster an interactive, collaborative and vibrant ecosystem for innovation to take root in Abu Dhabi and the region.

Islamic Sukuk have been one of the fastest growing asset classes in recent years with $97.9bn worth of Sukuks issued in 2017 – a 50 percent increase from 2016. Smart Sukuks could provide transactional efficiencies and significantly reduce the overheads associated with issuing and settling Islamic Sukuks.

ADGM CEO, Richard Teng commented: “As an international financial centre and FinTech thought leader, ADGM is proud to play an instrumental role in fostering an ecosystem for cutting-edge technology providers to collaborate with innovative local financial institutions in delivering value across financial markets.”

Jibrel Co-Founder, Talal Tabbaa, added: “We are firm believers that by combining Jibrel’s tried and tested smart contract solutions with the world class industry expertise held by Al Hilal Bank’s Digital Transformation Team, we will be able to provide Islamic financiers with the necessary tools to facilitate Islamic agreements with the same speed, volume and efficiency experienced in conventional finance, and potentially develop new digital asset classes that were previously unimaginable.”

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Conventional bank assets reach AED 2.26tr in UAE

The assets of UAE conventional banks stood at AED 2.268 trillion at the end of October 2018, accounting for 80 percent of total banking assets in the country, according to recently released statistics from the Central Bank of the UAE on the activity of conventional and Sharia-compliant banks.

According to the statistics, total CB assets went up by AED 125 billion in the first 10 months of 2018, while Islamic banks’ assets stood at AED 573 billion at the end of October, representing 20 percent of total banking assets, which were recorded at AED 2.841 trillion at the end of the month.

Total loans provided by conventional bans rose to AED 1.274 trillion at the end of October, constituting 77.3 percent of total loans provided by banks in the UAE.

Approximately AED 374 billion in loans was provided by Islamic banks, representing 22.7 percent of the total.

Deposits at conventional banks were valued at approximately AED 1.321 trillion, or 77 percent of total deposits in UAE-based banks.

Meanwhile, deposits at Islamic banks totalled AED 400 billion, or 23 percent of total banking assets.

Central Bank figures show that there are currently 60 banks operating in the country, of which 52 are commercial and eight are Sharia-compliant.

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Emaar Hospitality to divest five hotel assets

Emaar Hospitality Group and Abu Dhabi National Hotels (ADNH) have penned an agreement that will see Emaar divest its entire interest in a portfolio of five hotels in Dubai, Emaar Properties announced on Tuesday.

The portfolio of five hotels includes Address Dubai Mall, Address Boulevard, Address Dubai Marina, Vida Downtown and Manzil Downtown, together with about 1,000 hotel rooms.

As part of the transaction, ADNH will enter into long-term management agreements with Emaar Hospitality to continue operating the assets under the Address and Vida brands.

“Emaar’s hospitality business has recorded robust growth since its inception in 2007 and moving to an asset-light model will enable the business to unlock its true potential,” Emaar Properties chairman Mohammed Alabbar said.

Sheikh Ahmed Mohammed Sultan Suroor Al Dhaheri, ADNH vice chairman, said that the transaction “will strengthen our presence in Dubai and expand our currently luxury portfolio.”

ADNH’s current portfolio includes the Ritz Carlton Abu Dhabi Grand Canal, The Park Hyatt in Saadiyat Island and Sofitel JBR, as well as Le Meridien, Sheraton and the two Hiltons in Abu Dhabi. Additionally, the company holds stakes in resort properties in Morocco and Egypt.

“With a legacy of over four decades, we are constantly exploring ways to grow and increase value to our shareholders. We are confident that the partnership between ADNH and Emaar Hospitality Group will help drive both companies in their next phase of growth,” he added.

According to the companies, the transaction is subject to meeting various conditions and is expected to occur in late 2018 or early 2019.

For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Saudi Aramco to seek more acquisitions beyond Sabic deal, says CEO

Saudi Aramco will seek more acquisitions to speed its expansion in refining and petrochemicals as Saudi Arabia pushes ahead with plans to diversify its economy from reliance on sales of crude.

The purchases will be in addition to Aramco’s planned purchase of government-controlled chemicals producer Saudi Basic Industries Corp., Aramco Chief Executive Officer Amin Nasser said Tuesday in a speech in Dubai. The deal to buy the chemicals producer, known as Sabic, from the Saudi sovereign wealth fund could be valued at about $70 billion.

“Saudi Aramco will make the most of those prospects with global investments in the chemicals space of roughly 100 billion dollars over the next 10 years — in addition to prospective acquisitions,” Nasser said.

Aramco, the world’s biggest oil exporter, plays a key role in Saudi efforts to develop new industries and sources of income. Crown Prince Mohammed bin Salman is championing a plan to diversify the economy and create jobs. The Sabic deal will help fund that project by shifting funds from Aramco to the wealth fund. The plan necessitated a delay in Aramco’s initial public offering, a cornerstone of the diversification plan, until 2020 or 2021, Prince Mohammed said in an interview in October.

“The talk now is about 2021, more or less,” as Aramco needs Sabic on its books for at least one year before it can IPO, Nasser said.

Overseas Markets

To tap into growth for fuels and chemicals, Aramco, known formally as Saudi Arabian Oil Co., wants to more than double its refining capacity by the middle of the next decade. It also wants to transform as much as 3 million barrels of crude a day — about 30 percent of its output — into chemicals. Demand for petrochemicals will rise faster than for any other segment of the oil industry, according to the International Energy Agency.

“We are expanding this business both in Saudi Arabia and in fast-growing overseas markets,with the aim of converting two to three million barrels per day of crude oil into petrochemicals,” Nasser told an industry conference in Dubai.

Aramco will invest half a trillion dollars over the next ten years in oil, natural gas, chemicals and refining projects, Nasser said in an interview on Sunday at company headquarters in Dhahran, Saudi Arabia.

Unconventional Gas

It’s seeking to boost domestic gas output to power the country while freeing crude for export and to supply a burgeoning demand for chemicals. Aramco targets boosting gas production to 23 billion standard cubic feet a day and capacity to 25 billion within the next 10 years compared with the current level of 14 billion cubic feet a day, Nasser said Tuesday.

Aramco is developing so-called unconventional resources that are harder to develop than typical fields in the north and east of the country. The company has 16 rigs currently drilling for unconventional gas and has completed more than 70 wells this year, he said.

The company will more than triple unconventional gas output to 190 million standard cubic feet per day by the end of the year, it said last week. Aramco began commercial production of unconventional gas from the North Arabia field near the Wa’ad Al Shamal industrial site at 55 million standard cubic feet per day in May.

For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.