A fire burns on the Address Downtown skyscraper in Dubai, United Arab Emirates on Friday, Jan. 1, 2016. The blaze began Thursday night before Dubai's annual New Year's Eve fireworks show at the Burj Khalifa, the world's tallest building which sits nearby. (AP Photo/Sunday Alamba)
A fire burns on the Address Downtown skyscraper in Dubai, United Arab Emirates on Friday, Jan. 1, 2016. The blaze began Thursday night before Dubai's annual New Year's Eve fireworks show at the Burj KShow more

Experts query quality of cladding on Dubai buildings



DUBAI // The fires that have erupted in Dubai landmarks have raised concerns about the quality of material used to clad the emirate’s buildings.

After a fire at The Torch in February last year, experts believed that a majority of Dubai's approximately 250 high-rises use cladding panels with a thermoplastic core for insulation, to improve rigidity and for cosmetic purposes.

Flammable cladding materials, comprising plastic or polyurethane fillings – called a thermoplastic core – sandwiched between aluminium panels, have been blamed for spreading fires at both the Al Baker Tower 4 and the Al Tayer Tower in Sharjah in 2012.

“On some fires that we’ve seen, clearly the facade itself contributed to the way that the flames have spread. But I don’t know if that’s the case with Thursday night’s incident,” said Andy Dean, head of facade engineering for consultancy firm WSP yesterday.

“The design process starts with a fire-safety strategy and just needs to be implemented properly and maintained.”

His comments followed a blaze in The Address in Downtown Dubai hours before the New Year’s Eve fireworks at Burj Khalifa.

Mr Dean, who has more than 25 years experience in the field of building and construction, said it was too early to speculate about the cause of the blaze and the reasons why it spread quickly.

“Any fire from an ignition source will propagate fuel and that fuel can be anything that will burn so that’s just applying the obvious,” he said. “Let information come out first, and let’s not speculate.”

In the first half of last year, Dubai Civil Defence responded to 193 incidents, an increase from 158 in the same period in 2014, director Maj Gen Rashid Thani Al Matroushi said in September.

Eighty-two of those incidents took place in homes, he said.

Of the 193 incidents, 34 were caused by short circuits, 10 were from cigarettes, nine from unattended candles and five from burning incense.

On November 23, more than 100 people were forced out of their homes by a blaze in an apartment building on Salahuddin Road. The rush-hour incident caused chaos for many as strong winds fuelled the flames, forcing an evacuation of the adjacent Movenpick hotel.

The cause of the blaze hass yet to be determined.

Two days later, a fire erupted on the balcony of the 26th floor of the 32-storey Regal Tower on Business Bay. It spread to the 28th floor but did not affect the building’s interior. Again, the cause of the fire was still under investigation.

Other notable fires include The Torch, one of the tallest residential towers in the world at 86 storeys, that left more than 100 apartments severely damaged.

In 2012, a large fire gutted the 34-storey Tamweel Tower in JLT after a cigarette was dropped in a pile of rubbish.

In June, Dubai Civil Defence said more than 40,000 buildings across the emirate had connected to the Dubai Life Safety Dashboard. This allowed the authority, government departments, building owners and residents to see on smart devices whether sprinkler systems were working correctly.

rruiz@thenational.ae

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”