Developers have been slow to write down the loss of value of their land holdings.
Developers have been slow to write down the loss of value of their land holdings.

Falling land prices in Dubai and Abu Dhabi hit developers



DUBAI // Land banks held by developers have lost as much as 30 per cent of their value from their peak last year, as projects across the Emirates fall victim to the global property downturn. Developers have been slow to write down the losses, meaning that the real value of land on the books of publicly traded developers may be overstated, according to analysts.
"I have seen nobody take a negative impairment charge on land," said Bobby Sarkar, a property analyst at Al Mal Capital. "None of these guys put their land banks through some kind of stress test every quarter." Land values have fallen by up to 30 per cent in Dubai and up to 20 per cent in Abu Dhabi, according to CB Richard Ellis, the world's largest commercial property consultant. However, even greater falls in land values have been seen on specific developments such as Dubai Waterfront, owned by Nakheel, Tatweer's Dubailand and Business Bay, owned by Dubai Properties.
Noura Yassin, the head of valuation and consultancy at CB Richard Ellis, said establishing a fair value for development land was complicated by uncertainty over whether developments would go ahead. "Almost 80 per cent of developers are reviewing their projects and raw land to see if they make sense," she said. Property companies with large partially developed masterplans, such as the Waterfront and Palm Deira, are expected to be most affected by declines in land values, while Emaar Properties is predicted to suffer least because most of its local projects are under construction.
The property company Colliers International estimates that some projects have suffered even larger falls in the valuations of underlying land. Land within the Dubailand leisure and theme park development peaked at between Dh400 (US$108.90] and Dh450 per square foot last August, but has since fallen to between Dh100 and Dh150, according to Ian Albert, a regional director at Colliers. Business Bay land was valued at between Dh500 and Dh700 last August, but has since fallen back to between Dh175 and Dh250. The biggest falls were at the Waterfront project, priced at between Dh450 and Dh600 per sq ft at the peak and now available for between Dh70 and Dh80 per sq ft.
"While these are the value ranges, it's very difficult to pin them down right now because there are so few transactions," Mr Albert said. Analysts say some developers whose shares are publicly traded may now be overstating their land bank values. "Theoretically land must be valued to reflect any fair value change every quarter, but it is a very flexible environment and companies are typically aware of the potential of incurring a loss," said Roy Cherry, a property analyst at Shuaa Capital.
Smaller privately owned developers that acquired their land on the open market, rather than having it allocated to them free of charge, may be in a worse position. "It would definitely be helpful to have more detail or a better breakdown of the land value on property companies' books," Mr Sarkar said. "They have so much land on their books but essentially nobody knows what that value is." Analysts say that this may change dramatically once property developers start writing down stalled projects in their accounts, or face handing over finished projects but find that buyers have defaulted.
"Give this six months," Mr Sarkar said. "The real test comes when developers are ready to hand over property but their buyers have defaulted, or when projects get called off. Then we may see more hits on their books." This may have implications for publicly traded property developers such as Aldar, Deyaar and Union Properties, which write up their land banks at fair value once they allocate it for an investment, develop a master plan or start building infrastructure.
Emaar and Sorouh, in contrast, book their land at cost. According to its annual report, Emaar's land was worth Dh10.1 billion at cost and Dh42.3bn at fair value at the end of last year. Emaar said in a statement in April that its global land bank stood at 516 million squares metres and was valued at Dh79bn. The nominal value of land tends to be extremely low for many developers who received it from the Government for free. Israr Liaqat, the financial controller at Aldar, said: "Everything of the 50 million square metres we own is given to us by the Government."
Regular revaluations of land banks would have an impact on developers who report the fair value of their books and pay market prices for their land, such as Deyaar or Union Properties. "For them it is far harder to realise gains and easier to realise potential losses," Mr Cherry said. Aldar Properties, the largest developer in Abu Dhabi, realises fair-value gains on a quarterly basis, writing up land values in its books when it starts developing projects. It wrote up about Dh1.5bn in fair-value gains last year and Dh920 million in the first quarter of this year alone.
But it has never written down land values. "That is extremely difficult to understand in a market where prices have plummeted about 40 per cent," Mr Sarkar said.
uharnischfeger@thenational.ae
agiuffrida@thenational.ae

Results

2pm: Handicap Dh 90,000 1,800m; Winner: Majestic Thunder, Tadhg O’Shea (jockey), Satish Seemar (trainer).

2.30pm: Handicap Dh120,000 1,950m; Winner: Just A Penny, Sam Hitchcott, Doug Watson.

3pm: Handicap Dh105,000 1,600m; Winner: Native Appeal, Pat Dobbs, Doug Watson.

3.30pm: Jebel Ali Classic Conditions Dh300,000 1,400m; Winner: Thegreatcollection, Adrie de Vries, Doug Watson.

4pm: Maiden Dh75,000 1,600m; Winner: Oktalgano, Xavier Ziani, Salem bin Ghadayer.

4.30pm: Conditions Dh250,000 1,400m; Winner: Madame Ellingtina, Richard Mullen, Satish Seemar.

5pm: Maiden Dh75,000 1,600m; Winner: Mystery Land, Fabrice Veron, Helal Al Alawi.

5.30pm: Handicap Dh85,000 1,000m; Winner: Shanaghai City, Jesus Rosales, Rashed Bouresly.

Other promotions
  • Deliveroo will team up with Pineapple Express to offer customers near JLT a special treat: free banana caramel dessert with all orders on January 26
  • Jones the Grocer will have their limited edition Australia Day menu available until the end of the month (January 31)
  • Australian Vet in Abu Dhabi (with locations in Khalifa City A and Reem Island) will have a 15 per cent off all store items (excluding medications) 
The specs

Engine: Dual 180kW and 300kW front and rear motors

Power: 480kW

Torque: 850Nm

Transmission: Single-speed automatic

Price: From Dh359,900 ($98,000)

On sale: Now

The specs

Engine: 1.5-litre turbo

Power: 181hp

Torque: 230Nm

Transmission: 6-speed automatic

Starting price: Dh79,000

On sale: Now

COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Jigra
Director: Vasan Bala
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Rated: 3.5/5
VEZEETA PROFILE

Date started: 2012

Founder: Amir Barsoum

Based: Dubai, UAE

Sector: HealthTech / MedTech

Size: 300 employees

Funding: $22.6 million (as of September 2018)

Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC

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COMPANY%20PROFILE%20
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Joker: Folie a Deux

Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson

Director: Todd Phillips 

Rating: 2/5

Ticket prices

General admission Dh295 (under-three free)

Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free

Buy tickets at: wbworldabudhabi.com/en/tickets

The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Power: 268bhp / 536bhp
Torque: 343Nm / 686Nm
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
On sale: Later this year
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
'Laal Kaptaan'

Director: Navdeep Singh

Stars: Saif Ali Khan, Manav Vij, Deepak Dobriyal, Zoya Hussain

Rating: 2/5

De De Pyaar De

Produced: Luv Films, YRF Films
Directed: Akiv Ali
Cast: Ajay Devgn, Tabu, Rakul Preet Singh, Jimmy Sheirgill, Jaaved Jaffrey
Rating: 3.5/5 stars

TRAP

Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue

Director: M Night Shyamalan

Rating: 3/5

'Saand Ki Aankh'

Produced by: Reliance Entertainment with Chalk and Cheese Films
Director: Tushar Hiranandani
Cast: Taapsee Pannu, Bhumi Pednekar, Prakash Jha, Vineet Singh
Rating: 3.5/5 stars

Company%20profile
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Racecard

6.35pm: American Business Council – Maiden (PA) Dh80,000 (Dirt) 1,600m 

7.10pm: British Business Group – Maiden (TB) Dh82,500 (D) 1,200m 

7.45pm: CCI France UAE – Handicap (TB) Dh87,500 (D) 1,400m 

8.20pm: Czech Business Council – Rated Conditions (TB) Dh105,000 (D) 1,400m 

8.55pm: Netherlands Business Council – Rated Conditions (TB) Dh95,000 (D) 1,600m 

9.30pm: Indian Business and Professional Council – Handicap (TB) Dh95,000 (D) 1,200m  

The%20specs%3A%20Taycan%20Turbo%20GT
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Company%20Profile
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UAE%20FIXTURES
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SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%204-cylinder%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20101hp%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20135Nm%3Cbr%3E%3Cstrong%3ETransmission%3C%2Fstrong%3E%3A%20Six-speed%20auto%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh79%2C900%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
AUSTRALIA SQUAD

Steve Smith (capt), David Warner, Cameron Bancroft, Jackson Bird, Pat Cummins, Peter Handscomb, Josh Hazlewood, Usman Khawaja, Nathan Lyon, Shaun Marsh, Tim Paine, Chadd Sayers, Mitchell Starc.

UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

Company%20Profile
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Bawaal%20
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Nitesh%20Tiwari%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Varun%20Dhawan%2C%20Janhvi%20Kapoor%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%201%2F5%3C%2Fp%3E%0A
Stormy seas

Weather warnings show that Storm Eunice is soon to make landfall. The videographer and I are scrambling to return to the other side of the Channel before it does. As we race to the port of Calais, I see miles of wire fencing topped with barbed wire all around it, a silent ‘Keep Out’ sign for those who, unlike us, aren’t lucky enough to have the right to move freely and safely across borders.

We set sail on a giant ferry whose length dwarfs the dinghies migrants use by nearly a 100 times. Despite the windy rain lashing at the portholes, we arrive safely in Dover; grateful but acutely aware of the miserable conditions the people we’ve left behind are in and of the privilege of choice. 

Tree of Hell

Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla

Director: Raed Zeno

Rating: 4/5

Call of Duty: Black Ops 6

Developer: Treyarch, Raven Software
Publisher:  Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5

The Year Earth Changed

Directed by:Tom Beard

Narrated by: Sir David Attenborough

Stars: 4

RESULTS

6.30pm Maiden (TB) Dh82.500 (Dirt) 1,400m

Winner Meshakel, Royston Ffrench (jockey), Salem bin Ghadayer (trainer)

7.05pm Handicap (TB) Dh87,500 (D) 1,400m

Winner Gervais, Connor Beasley, Ali Rashid Al Raihe.

7.40pm Handicap (TB) Dh92,500 (Turf) 2,410m

Winner Global Heat, Pat Cosgrave, Saeed bin Suroor.

8.15pm Handicap (TB) Dh105,000 (D) 1,900m

Winner Firnas, Royston Ffrench, Salem bin Ghadayer.

8.50pm UAE 2000 Guineas Trial (TB) Conditions Dh183,650 (D) 1,600m

Winner Rebel’s Romance, William Buick, Charlie Appleby

9.25pm Dubai Trophy (TB) Conditions Dh183,650 (T) 1,200m

Winner Topper Bill, Richard Mullen, Satish Seemar

10pm Handicap (TB) Dh102,500 (T) 1,400m

Winner Wasim, Mickael Barzalona, Ismail Mohammed.

SPECS

Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now

Name: Brendalle Belaza

From: Crossing Rubber, Philippines

Arrived in the UAE: 2007

Favourite place in Abu Dhabi: NYUAD campus

Favourite photography style: Street photography

Favourite book: Harry Potter

COMPANY PROFILE

Company: Bidzi

● Started: 2024

● Founders: Akshay Dosaj and Asif Rashid

● Based: Dubai, UAE

● Industry: M&A

● Funding size: Bootstrapped

● No of employees: Nine

Company%20Profile
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COMPANY%20PROFILE
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West Asia rugby, season 2017/18 - Roll of Honour

Western Clubs Champions League - Winners: Abu Dhabi Harlequins; Runners up: Bahrain

Dubai Rugby Sevens - Winners: Dubai Exiles; Runners up: Jebel Ali Dragons

West Asia Premiership - Winners: Jebel Ali Dragons; Runners up: Abu Dhabi Harlequins

UAE Premiership Cup - Winners: Abu Dhabi Harlequins; Runners up: Dubai Exiles

UAE Premiership - Winners: Dubai Exiles; Runners up: Abu Dhabi Harlequins

What are the GCSE grade equivalents?
 
  • Grade 9 = above an A*
  • Grade 8 = between grades A* and A
  • Grade 7 = grade A
  • Grade 6 = just above a grade B
  • Grade 5 = between grades B and C
  • Grade 4 = grade C
  • Grade 3 = between grades D and E
  • Grade 2 = between grades E and F
  • Grade 1 = between grades F and G

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