Oil prices dive $2 on fears of Asian pandemic, possible U.S. rate hikes | Reuters
Oil prices dropped over $2 a barrel on Wednesday to their lowest in three weeks, on worries that surging COVID-19 cases in Asia would dent demand for crude and that U.S. inflation fears could prompt the Federal Reserve to slow economic growth with interest rate hikes.
Traders also cited rumors that the Iran nuclear talks were making progress, which could boost global crude supplies and depress prices. read more
Brent futures fell $2.05, or 3.0%, to settle at $66.66 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.13, or 3.3%, to settle at $63.36. Earlier in the day, WTI was down more than 5%.
That was the lowest close for both benchmarks since April 27.
On Tuesday, Brent rose to a 10-week high over $70 a barrel in intraday trade on optimism oil demand would surge with the reopening of U.S. and European economies. It retreated on fears of slowing fuel demand in Asia where surging COVID-19 cases prompted new restrictions in India, Taiwan, Vietnam and Thailand.
Wednesday, 19 May 2021
#Iran to Start Oil Exports From Port Skirting Troubled Strait - Bloomberg
Iran to Start Oil Exports From Port Skirting Troubled Strait - Bloomberg
Iran said it will soon export oil from a new port that allows it to bypass the Strait of Hormuz, as nuclear talks between Tehran and other world powers show signs of progress.
State-controlled National Iranian Oil Co. will start shipping crude from the Jask terminal on the Gulf of Oman coast next month, according to a statement. NIOC is already pumping oil into a 1,000-kilometer (620-mile) pipeline connecting Jask with the southwestern energy hub of Goreh, Managing Director Masoud Karbasian said.
The pipeline will be officially opened by President Hassan Rouhani in the near future, Karbasian said, without giving a timeframe or stating how much oil will initially be exported.
Iran said it will soon export oil from a new port that allows it to bypass the Strait of Hormuz, as nuclear talks between Tehran and other world powers show signs of progress.
State-controlled National Iranian Oil Co. will start shipping crude from the Jask terminal on the Gulf of Oman coast next month, according to a statement. NIOC is already pumping oil into a 1,000-kilometer (620-mile) pipeline connecting Jask with the southwestern energy hub of Goreh, Managing Director Masoud Karbasian said.
The pipeline will be officially opened by President Hassan Rouhani in the near future, Karbasian said, without giving a timeframe or stating how much oil will initially be exported.
MIDEAST STOCKS Most major Gulf markets track lower oil prices; #Dubai gains | Reuters
MIDEAST STOCKS Most major Gulf markets track lower oil prices; Dubai gains | Reuters
Major Gulf markets ended lower on Wednesday, mirroring weak oil prices, while Dubai extended gains from the previous session following an upbeat assessment of its property shares by Morgan Stanley.
Brent crude futures fell $1.4, or 2% to $67.31 a barrel at 1215 GMT, on renewed demand concerns as coronavirus cases in Asia rise and on fears rising inflation might lead the U.S. Federal Reserve to raise interest rates, which could limit economic growth.
The movement in oil prices is a key catalyst for the Gulf region's financial markets.
Saudi Arabia's benchmark index (.TASI) finished 0.5% lower, hit by 1% fall in Al Rajhi Bank (1120.SE) and a 0.6% decrease in Saudi National Bank (1180.SE), the country's largest lender.
Dubai's main share index (.DFMGI) gained 0.2%, with blue-chip developer Emaar Properties (EMAR.DU) rising 1.8%, while its shopping centre unit Emaar Malls (EMAA.DU) closed 3.2% higher.
The emirate's property prices are rising for the first time in six years, Morgan Stanley (MS.N) said in a research note, amid higher demand and a slowdown of project launches since 2017.
Meanwhile, Dubai expects to attract more than 5.5 million overseas visitors this year, hopeful that new markets can help to make up for the loss of visitors from key places where travel is restricted due to the coronavirus pandemic. read more
Elsewhere, Damac Properties (DAMAC.DU) advanced 1.6%.
In Abu Dhabi, the index (.ADI) fell 0.2%, weighed down by a 1.5% fall in aquaculture company International Holding (IHC.AD).
Abu Dhabi Ship Building ADSB.AD surged 15%, building on gains in the previous session, after the United Arab Emirates signed a 3.5 billion dirham ($952.95 million) contract with the company to manufacture new patrol vessels for the Gulf Arab state's navy. read more
The Qatari benchmark (.QSI) fell 0.7%, as most of the stocks on the index were in negative territory including Industries Qatar (IQCD.QA), which retreated 2.2%.
Outside the Gulf, Egypt's blue-chip index (.EGX30) added 0.2%, helped by a 2% rise in investment bank EFG Hermes (HRHO.CA).
Brent crude futures fell $1.4, or 2% to $67.31 a barrel at 1215 GMT, on renewed demand concerns as coronavirus cases in Asia rise and on fears rising inflation might lead the U.S. Federal Reserve to raise interest rates, which could limit economic growth.
The movement in oil prices is a key catalyst for the Gulf region's financial markets.
Saudi Arabia's benchmark index (.TASI) finished 0.5% lower, hit by 1% fall in Al Rajhi Bank (1120.SE) and a 0.6% decrease in Saudi National Bank (1180.SE), the country's largest lender.
Dubai's main share index (.DFMGI) gained 0.2%, with blue-chip developer Emaar Properties (EMAR.DU) rising 1.8%, while its shopping centre unit Emaar Malls (EMAA.DU) closed 3.2% higher.
The emirate's property prices are rising for the first time in six years, Morgan Stanley (MS.N) said in a research note, amid higher demand and a slowdown of project launches since 2017.
Meanwhile, Dubai expects to attract more than 5.5 million overseas visitors this year, hopeful that new markets can help to make up for the loss of visitors from key places where travel is restricted due to the coronavirus pandemic. read more
Elsewhere, Damac Properties (DAMAC.DU) advanced 1.6%.
In Abu Dhabi, the index (.ADI) fell 0.2%, weighed down by a 1.5% fall in aquaculture company International Holding (IHC.AD).
Abu Dhabi Ship Building ADSB.AD surged 15%, building on gains in the previous session, after the United Arab Emirates signed a 3.5 billion dirham ($952.95 million) contract with the company to manufacture new patrol vessels for the Gulf Arab state's navy. read more
The Qatari benchmark (.QSI) fell 0.7%, as most of the stocks on the index were in negative territory including Industries Qatar (IQCD.QA), which retreated 2.2%.
Outside the Gulf, Egypt's blue-chip index (.EGX30) added 0.2%, helped by a 2% rise in investment bank EFG Hermes (HRHO.CA).
Creditor group to counter #Dubai real estate fund's sukuk offer -sources | Reuters
Creditor group to counter Dubai real estate fund's sukuk offer -sources | Reuters
A group of creditors plans to oppose the terms of an offer by Dubai-listed Emirates REIT to exchange $400 million in Islamic bonds for new instruments, four sources told Reuters.
Emirates REIT on Tuesday offered to exchange unsecured sukuk for secured ones as part of a revamp aimed at bolstering the sharia-compliant real estate investment trust’s balance sheet, which has been hit by the coronavirus crisis.
The plan envisages extending the bonds’ maturity to 2024 from 2022, as well as a deferral of coupon payments for a year.
Creditors will be given instead first-ranking mortgage security over certain assets in Dubai and its financial centre with an aggregate value of about $280 million.
But some creditors plan a counter proposal to Emirates REIT soon, four sources familiar with the matter said.
“A sizeable contingent of sukuk holders has been organized on an ad-hoc basis for some time with advisors in place,” one said, adding:
“Whereas we welcome the offer as a step in the right direction and an acknowledgment of the problems at hand, there are fundamental concerns concerning the continuing operations and governance of the REIT which need to be addressed.”
The 2022 sukuk, which declined sharply last year, rallied on Wednesday, one of the sources and a trader said.
Three of the sources said some sukuk holders have been in talks with advisory firm Rothschild, which declined to comment.
Emirates REIT last year appointed Houlihan Lokey to advise it on a strategic review.
Houlihan Lokey managing director Arun Reddy told Reuters on Wednesday that the exchange proposal would likely generate more secondary interest for the new sukuk than the existing ones.
Sylvain Vieujot, chief executive of Equitativa, which manages Emirates REIT, said the offer on the table was “the most investor-friendly option we could envision.”
The move comes after years of sluggish performance of Dubai real estate, exacerbated by the COVID-19 pandemic.
Emirates REIT’s portfolio stood at $690 million at the end of 2020, while its net property income decreased by 11% year-on-year to $52 million.
A group of creditors plans to oppose the terms of an offer by Dubai-listed Emirates REIT to exchange $400 million in Islamic bonds for new instruments, four sources told Reuters.
Emirates REIT on Tuesday offered to exchange unsecured sukuk for secured ones as part of a revamp aimed at bolstering the sharia-compliant real estate investment trust’s balance sheet, which has been hit by the coronavirus crisis.
The plan envisages extending the bonds’ maturity to 2024 from 2022, as well as a deferral of coupon payments for a year.
Creditors will be given instead first-ranking mortgage security over certain assets in Dubai and its financial centre with an aggregate value of about $280 million.
But some creditors plan a counter proposal to Emirates REIT soon, four sources familiar with the matter said.
“A sizeable contingent of sukuk holders has been organized on an ad-hoc basis for some time with advisors in place,” one said, adding:
“Whereas we welcome the offer as a step in the right direction and an acknowledgment of the problems at hand, there are fundamental concerns concerning the continuing operations and governance of the REIT which need to be addressed.”
The 2022 sukuk, which declined sharply last year, rallied on Wednesday, one of the sources and a trader said.
Three of the sources said some sukuk holders have been in talks with advisory firm Rothschild, which declined to comment.
Emirates REIT last year appointed Houlihan Lokey to advise it on a strategic review.
Houlihan Lokey managing director Arun Reddy told Reuters on Wednesday that the exchange proposal would likely generate more secondary interest for the new sukuk than the existing ones.
Sylvain Vieujot, chief executive of Equitativa, which manages Emirates REIT, said the offer on the table was “the most investor-friendly option we could envision.”
The move comes after years of sluggish performance of Dubai real estate, exacerbated by the COVID-19 pandemic.
Emirates REIT’s portfolio stood at $690 million at the end of 2020, while its net property income decreased by 11% year-on-year to $52 million.
Emirates REIT proposes amending terms of $400 million sukuk | Reuters
Emirates REIT proposes amending terms of $400 million sukuk | Reuters
Dubai-listed Emirates REIT, a sharia-compliant real estate investment trust, has offered holders of its $400 million sukuk, or Islamic bonds, to exchange their notes for a new instrument, its chief executive said on Tuesday.
Under the proposal, unsecured sukuk would be exchanged for secured ones. The company is also looking to extend its credit maturity to improve its balance sheet after the impact of the COVID-19 pandemic on its operations.
The existing sukuk mature in 2022 and the new instrument would mature in 2024.
The company last year appointed Houlihan Lokey to advise its board on a strategic review of the fund.
“Our strategic review observed that the sukuk traded at a 35-65% discount to par over the last year due to global market uncertainty around commercial real estate, structural issues with the sukuk being unsecured and prospect of impaired recovery in a default,” Arun Reddy, managing director at Houlihan Lokey, told Reuters.
“The proposal allows the company to address a number of these issues and support its important sukuk holders by providing security while also allowing sukuk holders to maintain the 5.125% rate”.
Dubai’s real estate sector has been sluggish for years due to chronic oversupply coupled with weak economic growth, a problem that has been exacerbated by the coronavirus crisis.
Morgan Stanley said in a research note on Monday that property prices are rising for the first time in six years.
“Robust demand, peaking supply growth and long lead times for new projects could lead to a tighter-than-expected market over the next several years,” it said.
Holders of the new secured sukuk will be given first-ranking mortgage security over certain assets in Dubai and its financial centre with an aggregate value of about $280 million.
“The latest value of the portfolio is $690 million versus a sukuk value of $400 million. The LTV (loan-to-value) is 61% and the additional security provided should give sukuk holders great comfort and improve significantly the tradability of the sukuk,” said Sylvain Vieujot, chief executive officer of Equitativa, the manager of Emirates REIT.
Emirates REIT continues to assess delisting because of low trading liquidity and what it considers an undervalued share price.
The fund constituted 100% of trading activity on the Nasdaq Dubai on Tuesday, data on the exchange’s website showed.
Dubai-listed Emirates REIT, a sharia-compliant real estate investment trust, has offered holders of its $400 million sukuk, or Islamic bonds, to exchange their notes for a new instrument, its chief executive said on Tuesday.
Under the proposal, unsecured sukuk would be exchanged for secured ones. The company is also looking to extend its credit maturity to improve its balance sheet after the impact of the COVID-19 pandemic on its operations.
The existing sukuk mature in 2022 and the new instrument would mature in 2024.
The company last year appointed Houlihan Lokey to advise its board on a strategic review of the fund.
“Our strategic review observed that the sukuk traded at a 35-65% discount to par over the last year due to global market uncertainty around commercial real estate, structural issues with the sukuk being unsecured and prospect of impaired recovery in a default,” Arun Reddy, managing director at Houlihan Lokey, told Reuters.
“The proposal allows the company to address a number of these issues and support its important sukuk holders by providing security while also allowing sukuk holders to maintain the 5.125% rate”.
Dubai’s real estate sector has been sluggish for years due to chronic oversupply coupled with weak economic growth, a problem that has been exacerbated by the coronavirus crisis.
Morgan Stanley said in a research note on Monday that property prices are rising for the first time in six years.
“Robust demand, peaking supply growth and long lead times for new projects could lead to a tighter-than-expected market over the next several years,” it said.
Holders of the new secured sukuk will be given first-ranking mortgage security over certain assets in Dubai and its financial centre with an aggregate value of about $280 million.
“The latest value of the portfolio is $690 million versus a sukuk value of $400 million. The LTV (loan-to-value) is 61% and the additional security provided should give sukuk holders great comfort and improve significantly the tradability of the sukuk,” said Sylvain Vieujot, chief executive officer of Equitativa, the manager of Emirates REIT.
Emirates REIT continues to assess delisting because of low trading liquidity and what it considers an undervalued share price.
The fund constituted 100% of trading activity on the Nasdaq Dubai on Tuesday, data on the exchange’s website showed.
#UAE to allow 100% foreign ownership of companies in June - WAM | Reuters
UAE to allow 100% foreign ownership of companies in June - WAM | Reuters
Foreigners opening a company in the United Arab Emirates will no longer need an Emirati shareholder or agent under changes to UAE company law that will go into effect on June 1, state news agency WAM reported on Wednesday.
"The amended Commercial Companies Law aims at boosting the country's competitive edge and is a part of UAE government efforts to facilitate doing business," Minister of Economy Abdulla bin Touq Al Marri was quoted as saying.
The UAE announced the law allowing 100% foreign ownership of companies last year - one of several steps aimed at attracting investment and foreigners into the Gulf state, which was badly hurt by the coronavirus crisis.
A previous foreign investment law in 2018 allowed foreigners to own up to 100% of some businesses, and foreigners could already own up to 100% of those registered in designated business parks known as "free zones".
Foreigners opening a company in the United Arab Emirates will no longer need an Emirati shareholder or agent under changes to UAE company law that will go into effect on June 1, state news agency WAM reported on Wednesday.
"The amended Commercial Companies Law aims at boosting the country's competitive edge and is a part of UAE government efforts to facilitate doing business," Minister of Economy Abdulla bin Touq Al Marri was quoted as saying.
The UAE announced the law allowing 100% foreign ownership of companies last year - one of several steps aimed at attracting investment and foreigners into the Gulf state, which was badly hurt by the coronavirus crisis.
A previous foreign investment law in 2018 allowed foreigners to own up to 100% of some businesses, and foreigners could already own up to 100% of those registered in designated business parks known as "free zones".
Indian refiners set to curb spot buying to make room for Iranian oil | Reuters
Indian refiners set to curb spot buying to make room for Iranian oil | Reuters
Indian refiners, anticipating a lifting of U.S. sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year, company officials told Reuters.
The world's third largest oil consumer and importer halted imports from Tehran in 2019 after former U.S. President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.
U.S. President Joe Biden's administration and Iran have been involved in indirect talks to revive the pact for Tehran to curb its nuclear activities in exchange for a lifting of sanctions. read more
Analysts expect Iran to ramp up crude exports to 1.5 million barrels per day in the fourth quarter when sanctions are lifted.
Indian refiners, anticipating a lifting of U.S. sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year, company officials told Reuters.
The world's third largest oil consumer and importer halted imports from Tehran in 2019 after former U.S. President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.
U.S. President Joe Biden's administration and Iran have been involved in indirect talks to revive the pact for Tehran to curb its nuclear activities in exchange for a lifting of sanctions. read more
Analysts expect Iran to ramp up crude exports to 1.5 million barrels per day in the fourth quarter when sanctions are lifted.
Oil Market Gets a Boost as Top Asian Refiners Scoop Up Cargoes - Bloomberg
Oil Market Gets a Boost as Top Asian Refiners Scoop Up Cargoes - Bloomberg
A wave of strong oil buying by processors in China and Japan -- underpinned by one mega-refiner’s massive spree -- has lifted spot premiums in Asia’s physical market, adding to signs of rising global demand.
Spot premiums for crude grades favored by Chinese and Japanese refiners, such as Russia’s ESPO and Qatar’s Al-Shaheen, have surged to multi-month highs, according to traders who asked not to be identified. Dubai crude’s prompt timespreads went deeper into backwardation -- a bullish market indicator -- with the differential more than doubling from last week.
Oil processors and traders are weighing mixed signals from Asia’s market as the coronavirus pandemic leaves an uneven imprint. While key crude importer India has been hit hard by a brutal Covid-19 wave, other nations, especially China, have continued to do well. Those signs of progress add to evidence of recoveries in Europe and U.S. demand, underpinning gains in futures markets.
On Tuesday, China’s Rongsheng Petrochemical Co. purchased 12 million barrels of Middle Eastern varieties from Abu Dhabi, Oman and Iraq -- the biggest volume in about seven months. The purchases come after the Chinese government announced on new tax on imports of three oil-related items from next month, a move expected to spur Chinese buying of heavy crudes.
Russia’s Surgutneftegas PJSC sold multiple cargoes of ESPO crude for July loading at premiums that are at the highest since December, data compiled by Bloomberg show. Japanese oil companies also picked up at least five cargoes of Qatar’s Al-Shaheen crude at the widest premiums so far this year.
Spot buying activities for mostly July cargoes are likely to remain active throughout this week, with a flurry of import tenders for Middle Eastern crude issued by Japan’s Fuji Oil Co., Thailand’s PTT Pcl and Indian Oil Corp. that are due later this week.
A wave of strong oil buying by processors in China and Japan -- underpinned by one mega-refiner’s massive spree -- has lifted spot premiums in Asia’s physical market, adding to signs of rising global demand.
Spot premiums for crude grades favored by Chinese and Japanese refiners, such as Russia’s ESPO and Qatar’s Al-Shaheen, have surged to multi-month highs, according to traders who asked not to be identified. Dubai crude’s prompt timespreads went deeper into backwardation -- a bullish market indicator -- with the differential more than doubling from last week.
Oil processors and traders are weighing mixed signals from Asia’s market as the coronavirus pandemic leaves an uneven imprint. While key crude importer India has been hit hard by a brutal Covid-19 wave, other nations, especially China, have continued to do well. Those signs of progress add to evidence of recoveries in Europe and U.S. demand, underpinning gains in futures markets.
On Tuesday, China’s Rongsheng Petrochemical Co. purchased 12 million barrels of Middle Eastern varieties from Abu Dhabi, Oman and Iraq -- the biggest volume in about seven months. The purchases come after the Chinese government announced on new tax on imports of three oil-related items from next month, a move expected to spur Chinese buying of heavy crudes.
Russia’s Surgutneftegas PJSC sold multiple cargoes of ESPO crude for July loading at premiums that are at the highest since December, data compiled by Bloomberg show. Japanese oil companies also picked up at least five cargoes of Qatar’s Al-Shaheen crude at the widest premiums so far this year.
Spot buying activities for mostly July cargoes are likely to remain active throughout this week, with a flurry of import tenders for Middle Eastern crude issued by Japan’s Fuji Oil Co., Thailand’s PTT Pcl and Indian Oil Corp. that are due later this week.
QIA Is Said to Mull Injecting HSBC Headquarters Into REIT - Bloomberg
QIA Is Said to Mull Injecting HSBC Headquarters Into REIT - Bloomberg
Qatar Investment Authority is in talks to inject HSBC Holdings Plc’s London headquarters building into a planned property trust being listed by City Developments Ltd., people with knowledge of the matter said.
The potential deal would boost the value of the real estate investment trust portfolio to 1.8 billion pounds ($2.6 billion) from 600 million pounds, said the people, who asked not to be identified as the information is private.
The Gulf sovereign wealth fund and the Singaporean homebuilder aim to raise 500 million pounds from an initial public offering of the sterling-denominated REIT, the people said. The IPO could take place in the city-state as soon as the third quarter, they said.
Deliberations are ongoing and there is no certainty that a deal will proceed, said the people. A representative for City Developments declined to comment. A representative for QIA did not immediately respond to requests for comment.
The IPO denominated in sterling would be only the second such offering in Singapore, after Elite Commercial REIT’s first-time share sale raised about 135 million pounds last year. City Developments has been working with DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. on the planned REIT IPO, Bloomberg News reported last year.
City Developments has constructed more than 46,000 homes and owns over 24 million square feet of properties in 29 countries and regions, according to its website. Its portfolio includes residences, offices, hotels and shopping malls.
Shares in City Developments slipped about 1% in early trading in Singapore on Wednesday, giving the company a market value of about $5.1 billion.
QIA manages about $300 billion of assets and ranks as the world’s 11th-largest wealth fund, according to the Sovereign Wealth Fund Institute. It bought 8 Canada Square, the building in London’s Canary Wharf financial district that houses HSBC’s head office, in 2014 from South Korea’s National Pension Service for an undisclosed amount.
Sheikh Mohammed bin Abdulrahman Al Thani, QIA’s chairman and Qatar’s foreign affairs minister, told Bloomberg TV in January that the fund is looking to Asia for deals in an effort to diversify an investment portfolio heavily weighted toward North America and Europe.
Qatar Investment Authority is in talks to inject HSBC Holdings Plc’s London headquarters building into a planned property trust being listed by City Developments Ltd., people with knowledge of the matter said.
The potential deal would boost the value of the real estate investment trust portfolio to 1.8 billion pounds ($2.6 billion) from 600 million pounds, said the people, who asked not to be identified as the information is private.
The Gulf sovereign wealth fund and the Singaporean homebuilder aim to raise 500 million pounds from an initial public offering of the sterling-denominated REIT, the people said. The IPO could take place in the city-state as soon as the third quarter, they said.
Deliberations are ongoing and there is no certainty that a deal will proceed, said the people. A representative for City Developments declined to comment. A representative for QIA did not immediately respond to requests for comment.
The IPO denominated in sterling would be only the second such offering in Singapore, after Elite Commercial REIT’s first-time share sale raised about 135 million pounds last year. City Developments has been working with DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp. on the planned REIT IPO, Bloomberg News reported last year.
City Developments has constructed more than 46,000 homes and owns over 24 million square feet of properties in 29 countries and regions, according to its website. Its portfolio includes residences, offices, hotels and shopping malls.
Shares in City Developments slipped about 1% in early trading in Singapore on Wednesday, giving the company a market value of about $5.1 billion.
QIA manages about $300 billion of assets and ranks as the world’s 11th-largest wealth fund, according to the Sovereign Wealth Fund Institute. It bought 8 Canada Square, the building in London’s Canary Wharf financial district that houses HSBC’s head office, in 2014 from South Korea’s National Pension Service for an undisclosed amount.
Sheikh Mohammed bin Abdulrahman Al Thani, QIA’s chairman and Qatar’s foreign affairs minister, told Bloomberg TV in January that the fund is looking to Asia for deals in an effort to diversify an investment portfolio heavily weighted toward North America and Europe.
#Dubai's prime office rents fall to lowest level in nearly 9 years | ZAWYA MENA Edition
Dubai's prime office rents fall to lowest level in nearly 9 years | ZAWYA MENA Edition
As the practice of remote working carried on into another year, prime office rents in Dubai continued to fall in the first quarter of the year, hitting the lowest level recorded since around nine years ago, new figures from Knight Frank showed.
Average rents of prime offices across the emirate stood at just over 200 dirhams ($54.45) per square foot, which is 4.2 percent lower than a year ago and the lowest since the third quarter of 2012. Citywide, average rates fell by 7.7 percent year-on-year.
Millions of workers worldwide were sent home at the start of the COVID-19 outbreak last year and since then, many have not returned to the workplace.
According to Faisal Durrani, Knight Frank’s head of Middle East research, the office market is still feeling the impact of the coronavirus pandemic, although “there are pockets of activity emerging”, particularly in the technology-media-telecoms sector.
“The increased level of activity stems from rising nationwide business confidence, driven by the world-leading vaccine rollout programme that is allowing a semblance of normality to return,” said Durrani.
“Still, this doesn’t take away from the fact that the pandemic has fundamentally altered occupier mindsets, with occupational strategies still under review, with a view to factoring greater remote working going forward.”
This week, Dubai eased some of its COVID-19 restrictions, allowing social gatherings such as weddings, concerts and other events to resume with less stringent requirements.
Abu Dhabi market
In Abu Dhabi, the office market is expected to remain subdued.
Market-wide vacancy stood at 21.7 percent at the end of the first quarter, down slightly from 21.9 percent in the fourth quarter of 2020. Vacancy rate at prime offices also averaged 25.6 percent, down from almost 29 percent in the first quarter of 2020.
“Activity in Abu Dhabi’s occupier market is expected to remain subdued with new take-up likely to continue being driven by public sector entities and smaller domestic businesses. The latter are looking to capitalise on the weaker conditions by consolidating operations, or upgrading offices, where possible, but average space requirements remain relatively small among this cost-conscious cohort,” said Durrani.
Restrictions are expected to ease further as the UAE attempts to speed up the economic recovery from the pandemic. Daily COVID-19 infection rate in the UAE has just started to ease, averaging below 2,000 new cases since the beginning of the month.
Home to some 9.7 million residents, the UAE has so far recorded 547,000 cases since the pandemic began, with a death toll of 1,633.
As the practice of remote working carried on into another year, prime office rents in Dubai continued to fall in the first quarter of the year, hitting the lowest level recorded since around nine years ago, new figures from Knight Frank showed.
Average rents of prime offices across the emirate stood at just over 200 dirhams ($54.45) per square foot, which is 4.2 percent lower than a year ago and the lowest since the third quarter of 2012. Citywide, average rates fell by 7.7 percent year-on-year.
Millions of workers worldwide were sent home at the start of the COVID-19 outbreak last year and since then, many have not returned to the workplace.
According to Faisal Durrani, Knight Frank’s head of Middle East research, the office market is still feeling the impact of the coronavirus pandemic, although “there are pockets of activity emerging”, particularly in the technology-media-telecoms sector.
“The increased level of activity stems from rising nationwide business confidence, driven by the world-leading vaccine rollout programme that is allowing a semblance of normality to return,” said Durrani.
“Still, this doesn’t take away from the fact that the pandemic has fundamentally altered occupier mindsets, with occupational strategies still under review, with a view to factoring greater remote working going forward.”
This week, Dubai eased some of its COVID-19 restrictions, allowing social gatherings such as weddings, concerts and other events to resume with less stringent requirements.
Abu Dhabi market
In Abu Dhabi, the office market is expected to remain subdued.
Market-wide vacancy stood at 21.7 percent at the end of the first quarter, down slightly from 21.9 percent in the fourth quarter of 2020. Vacancy rate at prime offices also averaged 25.6 percent, down from almost 29 percent in the first quarter of 2020.
“Activity in Abu Dhabi’s occupier market is expected to remain subdued with new take-up likely to continue being driven by public sector entities and smaller domestic businesses. The latter are looking to capitalise on the weaker conditions by consolidating operations, or upgrading offices, where possible, but average space requirements remain relatively small among this cost-conscious cohort,” said Durrani.
Restrictions are expected to ease further as the UAE attempts to speed up the economic recovery from the pandemic. Daily COVID-19 infection rate in the UAE has just started to ease, averaging below 2,000 new cases since the beginning of the month.
Home to some 9.7 million residents, the UAE has so far recorded 547,000 cases since the pandemic began, with a death toll of 1,633.
#Qatar is well-positioned for post-pandemic rebound: IIF | ZAWYA MENA Edition
Qatar is well-positioned for post-pandemic rebound: IIF | ZAWYA MENA Edition
Gas-rich Qatar has seen limited health impacts from the pandemic due to its relatively young population and containment measures. The vaccine program, strengthening of energy prices and end of the rift with other Gulf Cooperation Council (GCC) countries will support the recovery, said Institute of International Finance (IIF) in a report Tuesday.
“We expect modest economic recovery in 2021 with real GDP growing by 3.2 percent, following a contraction of 3.7 percent in 2020,” Garbis Iradian, chief MENA economist, said.
Beyond 2021 growth will be supported by the projected significant increase in natural gas production, the report said. In 2022, growth will accelerate to 4.0 percent, supported by further significant increase in gas production and the projected substantial increase in tourist receipts for the FIFA World Cup (scheduled for November 21-December 18, 2022).
Qatar is seeking to cement its position as the world’s second-largest gas exporter and the largest exporter of LNG given its massive reserves and surging global demand, IIF said.
Early this year, Saudi Arabia, Bahrain, the United Arab Emirates (UAE), and Egypt ended their three-and-a-half-year blockade of Qatar. This has led to the resumption of travel and trade between Qatar and its GCC neighbors.
Elsewhere, the banking system has remained relatively resilient with high-quality assets, strong capitalization and adequate liquidity.
“We expect the current account and fiscal balances to shift to sizeable surpluses in 2021 and 2022. Given the spare capacity and large financial buffers, fiscal policy is expected to support the recovery in the short term. Additional structural reforms are needed to support diversification and raise potential growth over the medium-term,” Iradian said.
The institute also said Qatar needs to implement a broad range of policies to encourage diversification away from hydrocarbons and to achieve a competitive knowledge-driven economy. Such reforms will increase productivity growth and boost the supply of highly qualified labor, which is needed to raise potential growth.
Gas-rich Qatar has seen limited health impacts from the pandemic due to its relatively young population and containment measures. The vaccine program, strengthening of energy prices and end of the rift with other Gulf Cooperation Council (GCC) countries will support the recovery, said Institute of International Finance (IIF) in a report Tuesday.
“We expect modest economic recovery in 2021 with real GDP growing by 3.2 percent, following a contraction of 3.7 percent in 2020,” Garbis Iradian, chief MENA economist, said.
Beyond 2021 growth will be supported by the projected significant increase in natural gas production, the report said. In 2022, growth will accelerate to 4.0 percent, supported by further significant increase in gas production and the projected substantial increase in tourist receipts for the FIFA World Cup (scheduled for November 21-December 18, 2022).
Qatar is seeking to cement its position as the world’s second-largest gas exporter and the largest exporter of LNG given its massive reserves and surging global demand, IIF said.
Early this year, Saudi Arabia, Bahrain, the United Arab Emirates (UAE), and Egypt ended their three-and-a-half-year blockade of Qatar. This has led to the resumption of travel and trade between Qatar and its GCC neighbors.
Elsewhere, the banking system has remained relatively resilient with high-quality assets, strong capitalization and adequate liquidity.
“We expect the current account and fiscal balances to shift to sizeable surpluses in 2021 and 2022. Given the spare capacity and large financial buffers, fiscal policy is expected to support the recovery in the short term. Additional structural reforms are needed to support diversification and raise potential growth over the medium-term,” Iradian said.
The institute also said Qatar needs to implement a broad range of policies to encourage diversification away from hydrocarbons and to achieve a competitive knowledge-driven economy. Such reforms will increase productivity growth and boost the supply of highly qualified labor, which is needed to raise potential growth.
#AbuDhabi's Reem Investments to raise $1.6bln debt, fresh equity | ZAWYA MENA Edition
Abu Dhabi's Reem Investments to raise $1.6bln debt, fresh equity | ZAWYA MENA Edition
UAE-listed Reem Investments is looking to raise 6 billion dirhams ($1.6 billion) in debt and fresh equity to fund new real estate developments, according to a bourse filing on Wednesday.
The company’s real estate arm, Reem Developments, currently has two mega projects, a 16-million-square-foot township in Najmat and another mixed-use project in Rawdhat which will target more than 18,000 residential and commercial tenants.
“In light of renewed optimism in the real estate market, the company will be undertaking new developments in Najmat, Reem Island. For financing these developments, the company would be seeking a mix of debt and fresh equity in the order of 4.5 billion dirhams and 1.5 billion dirhams, respectively,” the company told the Abu Dhabi Securities Exchange (ADX), on which its shares trade.
Reem also said that it will be launching serviced land plots for sale in Najmat.
The UAE’s property market has recently seen an increase in demand for homes, with buyers snapping up completed and off-plan residential units. Last month, Aldar sold out the villas at its newly launched project on Yas Island in just 48 hours.
UAE-listed Reem Investments is looking to raise 6 billion dirhams ($1.6 billion) in debt and fresh equity to fund new real estate developments, according to a bourse filing on Wednesday.
The company’s real estate arm, Reem Developments, currently has two mega projects, a 16-million-square-foot township in Najmat and another mixed-use project in Rawdhat which will target more than 18,000 residential and commercial tenants.
“In light of renewed optimism in the real estate market, the company will be undertaking new developments in Najmat, Reem Island. For financing these developments, the company would be seeking a mix of debt and fresh equity in the order of 4.5 billion dirhams and 1.5 billion dirhams, respectively,” the company told the Abu Dhabi Securities Exchange (ADX), on which its shares trade.
Reem also said that it will be launching serviced land plots for sale in Najmat.
The UAE’s property market has recently seen an increase in demand for homes, with buyers snapping up completed and off-plan residential units. Last month, Aldar sold out the villas at its newly launched project on Yas Island in just 48 hours.
MIDEAST STOCKS Property shares buoy #Dubai; major Gulf markets dip | Reuters
MIDEAST STOCKS Property shares buoy Dubai; major Gulf markets dip | Reuters
Most major stock markets in the Gulf eased in early trade on Wednesday, but the Dubai index was on course to extend gains from the previous session following an upbeat assessment of its property shares by Morgan Stanley.
Dubai's main share index (.DFMGI) gained 0.4%, with blue-chip developer Emaar Properties (EMAR.DU) rising 2.1%, while its shopping centre unit Emaar Malls (EMAA.DU) advanced over 5%.
The emirate's property prices are rising for the first time in six years, Morgan Stanley (MS.N) said in a research note, amid higher demand and a slowdown of project launches since 2017.
Meanwhile, Dubai expects to attract over 5.5 million overseas visitors this year, hopeful that new markets can help make up for the loss of visitors from key places where travel is restricted due to the coronavirus pandemic. read more
Saudi Arabia's benchmark index (.TASI) fell 0.1%. Al Rajhi Bank (1120.SE) lost 0.2%, while petrochemical firm Saudi Basic Industries (2010.SE) was down 0.3%.
In Abu Dhabi, the index (.ADI) eased 0.2%, hit by a 1.4% fall in aquaculture firm International Holding (IHC.AD).
However, Abu Dhabi Ship Building (ADSB.AD) surged 15%, building on gains in the previous session, after the United Arab Emirates signed a 3.5 billion dirham ($952.95 million) contract with the firm to manufacture new patrol vessels for the Gulf Arab state's navy. read more
The Qatari benchmark (.QSI) dropped 0.4%, weighed down by a 1% fall in petrochemical firm Industries Qatar (IQCD.QA).
Most major stock markets in the Gulf eased in early trade on Wednesday, but the Dubai index was on course to extend gains from the previous session following an upbeat assessment of its property shares by Morgan Stanley.
Dubai's main share index (.DFMGI) gained 0.4%, with blue-chip developer Emaar Properties (EMAR.DU) rising 2.1%, while its shopping centre unit Emaar Malls (EMAA.DU) advanced over 5%.
The emirate's property prices are rising for the first time in six years, Morgan Stanley (MS.N) said in a research note, amid higher demand and a slowdown of project launches since 2017.
Meanwhile, Dubai expects to attract over 5.5 million overseas visitors this year, hopeful that new markets can help make up for the loss of visitors from key places where travel is restricted due to the coronavirus pandemic. read more
Saudi Arabia's benchmark index (.TASI) fell 0.1%. Al Rajhi Bank (1120.SE) lost 0.2%, while petrochemical firm Saudi Basic Industries (2010.SE) was down 0.3%.
In Abu Dhabi, the index (.ADI) eased 0.2%, hit by a 1.4% fall in aquaculture firm International Holding (IHC.AD).
However, Abu Dhabi Ship Building (ADSB.AD) surged 15%, building on gains in the previous session, after the United Arab Emirates signed a 3.5 billion dirham ($952.95 million) contract with the firm to manufacture new patrol vessels for the Gulf Arab state's navy. read more
The Qatari benchmark (.QSI) dropped 0.4%, weighed down by a 1% fall in petrochemical firm Industries Qatar (IQCD.QA).
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