Transparency pays off for MAG Group after handover of AED450 million tower in Dubai Marina proves property development in Dubai can work

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg85ucpkerLHhEeVW9ZJpT6efjc-ZpfpznN2R3fGorTz2IZuc5Ge8A4fV3XP0iMO8g5mM8Sb6QatrzhTkbIGbnEJymRS_q4EMceG6dmW6Rcu5gS2Uq20hZ_FzxEqcFlvxpQJk4BCcmdJN4/s1600/Mohammed+Nimer.JPG"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5532680030861226754" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg85ucpkerLHhEeVW9ZJpT6efjc-ZpfpznN2R3fGorTz2IZuc5Ge8A4fV3XP0iMO8g5mM8Sb6QatrzhTkbIGbnEJymRS_q4EMceG6dmW6Rcu5gS2Uq20hZ_FzxEqcFlvxpQJk4BCcmdJN4/s400/Mohammed+Nimer.JPG" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 400px; height: 398px;" /></a><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSfcEM0EQ8cG8uniZ17uNWk1yyz2m6cws0HrCPrejN7Hz_4R00s52FwHnwXtmvfeCgXfQ_1k88EXFJ2c1qYwmFKy6lhUECuwLC_Tpd0yi3Cem7928f7Xt055q3AMLMFgnwmY5Yzx_XWnc/s1600/MAG+218.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5532680022109234770" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSfcEM0EQ8cG8uniZ17uNWk1yyz2m6cws0HrCPrejN7Hz_4R00s52FwHnwXtmvfeCgXfQ_1k88EXFJ2c1qYwmFKy6lhUECuwLC_Tpd0yi3Cem7928f7Xt055q3AMLMFgnwmY5Yzx_XWnc/s400/MAG+218.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 283px; height: 400px;" /></a><br /><br /><strong>Honesty is best policy says expert<br /><br />Transparency pays off for MAG Group after handover of AED450 million tower in Dubai Marina proves property development in Dubai can work </strong><br /><br />A consistent vision, open and transparent communication and a commitment to quality has helped Dubai-based property developer MAG Group Properties, to deliver what some real estate analysts have described as a model development.<br /><br />MAG 218 a residential tower in Dubai Marina, was built at a cost of approximately AED450 million consisting of 555 apartments spread over 66 floors. The building was officially handed-over to investors earlier this year on 15 May. To date 530 apartments are occupied with nothing for sale or lease at present.<br /><br />Commenting Mohammed Nimer, CEO of MAG Group Properties, said: “We stood firm by our strategy. From the outset we wanted to be totally transparent and deliver our promise of a quality development, to specification and on budget. This has paid off handsomely, not only for MAG Group but for the investors as well.”<br /><br />First of all to enable MAG Group to build a quality mid-priced development it needed to keep its budget under control, choosing to self finance the project, rather than paying interest on a bank loan, which helped to keep the costs down. <br /><br />Even when MAG Group had some issues regarding late payments from some investors they decided to carry on irrespective, taking the view that the priority was to protect the majority and complete the project. <br /> <br />MAG Group sent the investors detailed and regular updates with fresh images so that they could chart the progress of the development. Results were also posted onto the MAG Group website. <br /><br />“When milestone payments became due, we had few problems collecting that money. The owners could see the progress we were making and it generated a great deal of trust between us, at a time when investor confidence in many regional projects was beginning to wane. This proves that honesty is the right policy and furthermore quality at the right price can work in Dubai,” added Nimer. <br /><br />MAG 218 is a highly desirable residential building, not just because of its location and quality of finish but the highly competitive service charges which underscore the overall technical engineering excellence of the design and build.<br /><br />“Service fees in Jumiera Lakes Towers average AED15 per square foot, the Marina itself averages around AED13 but MAG 218 charges less than AED9.5 per square foot, a very attractive proposition to owners and end users alike,” said Mazen Falhout, General Manager of MAGme Property Solutions, a division of MAG Group.<br /><br />Currently a one-bedroom apartment leases for around AED70,000 per annum while a two-bedroom flat currently achieves annual rental income of about AED110,000. <br /><br />As such the owners in MAG 218 are feeling the benefits of such economical service charges, according to Camilla Van Der Merwe, Head of Sales and Leasing at Asteco Property Management. <br /><br />“This gives <a href="http://www.ocfree.co.uk/real-estate/">apartment</a> owners a distinct advantage in a very competitive market sector. Owners of a one-bedroom apartment, could be paying as much as AED5,000 less than landlords from other developments pay annually,” said Van Der Merwe. <br /><br />“For investors, end-users and or tenants, it is also comforting to know that the tower is well built and maintained, protecting investment and keeping fees to a minimum. In many ways MAG 218 could be described as a model development,” added Van Der Merwe.<br /><br />Almost 90% of MAG 218 tower was sold out within months of its 2006 launch, with many investors initially paying an average of AED700 – 800 per square foot. Today, despite falling prices over the past two years, the <a href="http://www.ocfree.co.uk">apartments</a> have still appreciated on average by at least 10%, especially for those investors who bought at or close to the launch price. <br /><br />Photo-caption: <br /><br />1. MAG 218 tower in Dubai Marina – a model development.<br /><br />2. Mohammed Nimer, CEO, MAG Group Property – “Honesty is the best policy...”<br /><br />About the MAG Group <br /><br />The Dubai-based Moafaq Al Gaddah Group of Companies (the MAG Group) was established in 1978 and has grown into a multinational organisation with 18 offices in eight countries throughout Europe, the Middle East and Asia.<br /><br />In the past five years the MAG Group Properties has invested in 12 properties at various stages of development across the residential, commercial and industrial sectors. The company focuses on projects that provide long-term benefits to investors and customers.<br /><em></em>

Transparency pays off for MAG Group after handover of AED450 million tower in Dubai Marina proves property development in Dubai can work

Honesty is best policy says expert Transparency pays off for MAG Group after handover of AED450 million tower in Dubai Marina proves propert...

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Property owners may get that ‘sinking’ feeling over fees

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcqwQXeVhDF63vSj6mPyTvmjgEEtxYNIH8AYIP10EEhyphenhyphendNWOsodvBgeuYbwWi7RP3rwmML3UxoVx2mTyyNc3QaDtGtoTsTX9IdFrdiXAlVMaJarnUMqdEcJVToimgeI0OuEjq0S7ox3-aq/s1600/Photo+1.JPG"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5490051581521100690" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcqwQXeVhDF63vSj6mPyTvmjgEEtxYNIH8AYIP10EEhyphenhyphendNWOsodvBgeuYbwWi7RP3rwmML3UxoVx2mTyyNc3QaDtGtoTsTX9IdFrdiXAlVMaJarnUMqdEcJVToimgeI0OuEjq0S7ox3-aq/s400/Photo+1.JPG" style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 285px;" /></a><br /><br /><em><strong>Property owners may get that ‘sinking’ feeling over fees</strong></em><br /><br /><strong>MAG Me Property Solution advises owners on ‘hidden’ depreciation costs of mechanical, electrical and plumbing (MEP) equipment</strong><br /><br />Owners of properties in the freehold areas of Dubai could be hit by major maintenance charges which should have been identified prior to purchase, according to the property management arm of a leading real estate developer.<br /><br />“Some owners are jeopardising the return on their investments by not adequately accounting for depreciation on MEP equipment,” said Mazen Falhout, General Manager, MAGme Property Solutions, a division of the MAG Group.<br /><br />Dubai property owners now have the opportunity to play an active role in the management of their properties as the new owners’ association management regulations, implemented by Dubai’s Real Estate Regulatory Authority (RERA) come into effect.<br /><br />Full implementation of the regulations means that as well as routine maintenance and upkeep charges, owners will have to pay premiums to cover complete building insurance as well as an emergency reserve or ‘sinking’ fund to take care of larger maintenance work or replacement of essential equipment.<br /><br />‘Sinking’ funds are essential to accumulate a reserve fund over time which helps to enhance not only the value of property for the current owner, but makes it more attractive for prospective buyers and the secondary market. It is also important that buyers verify whether such allocations have been made in the service fee budget before deciding to buy.<br /><br />“When considering a real estate investment, prospective owners should always seek advice from professionals who can evaluate all potential operational costs, as well calculating depreciation or the appropriate deposits for a ‘sinking’ fund,” said Falhout.<br /><br />“For example to replace a chiller in an average tower building costs around AED2-3 million, that amount must be built-in over ten years when it reaches the end of its working life. If there is no ‘sinking’ fund, owners have to foot the entire bill at that point of time which could be substantial,” he added.<br /><br />As there is no conformity with common areas, each building or community must be assessed on a case by case basis, by professionals who understand maintenance of the complex engineering in these developments.<br /><br />“In tower buildings it could be something as simple as electricity supply for lifts, air conditioning, pool chillers, lighting and even car park barriers. With rents falling at least 40% over the last 12 months, many owners are now faced with fees that they cannot simply pass on to tenants if they want to remain competitive in the market,” said Falhout.<br /><br />“What might seem on the surface to be a good sales price may not be cost-effective over time, when the so called hidden capital and their respective operational expenses have been factored in.<br /><br />“Prior to June 2008, investors did not care too much about service charges or operational costs, many were only speculating on the rising price. Now that party is over and owners now have to be responsible for their investments,” <br />added Falhout. <br /><br />MAGme was specifically set up to provide an array of real estate management services from sales and marketing to property management and owners’ association management. <br /><br />“Originally we were predominantly instructed to manage, promote and market the developed projects of our sister company, MAG Group Properties. However as we created business relationships with other developers we began to manage their buildings as well as advising investors,” said Falhout.<br /><br />With so much stock to be completed over the next five years, Falhout believes that the property management sector will grow substantially over that period.<br /><br />“It’s only natural. The cycle begins with design and investment, through to development, marketing and sales and then handover. Once that occurs owners must manage their property, irrespective of which way the market price is headed,” he added. <br /><br />Although the macro economic factors such as the dollar-euro and dollar-sterling exchange rates are putting Dubai at a disadvantage at the moment, many Russians, Iranians, Indians and other Arab nationals are entering the market.<br /><br />“Many overseas buyers are now looking for bargains, they are not concerned about market liquidity, they either have substantial deposits or the means to buy outright,” said Falhout.<br /><br />Apart from falling prices, another reason for this confidence in Dubai according to Falhout is that Dubai is still way ahead of all other GCC real estate markets in terms of maturity, sophistication and regulation. “Any freehold property even comes complete with a complimentary world-class infrastructure,” he said. <br /><br />Photo caption: For example to replace a chiller in an average tower building costs around AED2-3 million, that amount must be built-in over ten years when it reaches the end of its working life. If there is no ‘sinking’ fund, the owner has to foot the entire bill - Mazen Falhout, General Manager, MAGme property solutions, a division of the MAG Group.<br /><em></em>

Property owners may get that ‘sinking’ feeling over fees

Property owners may get that ‘sinking’ feeling over fees MAG Me Property Solution advises owners on ‘hidden’ depreciation costs of mechanica...

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