Abu Dhabi property prices down 15% in 2010 so far, new real estate index shows

Residential property prices in Abu Dhabi have fallen by 15% in the first three quarters of 2010 compared to the same period last year, according to a new property index being launched in the emirate.

The new Reidin.com data is the first in Abu Dhabi to be based on the valuations and listings of property and follows a successful launch in neighbouring Dubai.

According to property professionals it represents a new era and shows how the emerging real estate markets in the Middle East are maturing as they provide accurate and frequent data that can be relied on.

Apartment prices fell by 2.435 while villa prices dropped by 2.4%, the Reidin.com index shows. However, the company said there was a sense of optimism as prices of smaller and larger apartments rose moderately during the month.

Prices for apartments of 50 square meters and under rose by 0.77% last month compared to August but they are down 13.37% year on year. Meanwhile, apartments of 151 square meters or more rose by 0.86% month on month but are still down 5.74% year on year.

(C) Property Wire

Dubai in pursuit of counterfeit goods: Investigators in a bid to trick fake-goods traders into revealing where they keep their stock

DUBAI // A civilian network of mystery shoppers is trawling the markets of Dubai in pursuit of counterfeit goods, and passing on their tips to the police.

As many as 40 such investigators walk the streets daily in a bid to trick fake-goods traders into revealing where they keep their stock. They represent United Trademarks and Patent Services, an anti-counterfeit organisation hired by luxury brands to battle the rising tide of fake goods.

Makers of fake goods can erode an established brand's bottom-line performance. The global trade in counterfeit goods is worth $600 billion (Dh2.2 trillion) and accounts for as much as 7 per cent of the world economy, according to figures from the International Anti-Counterfeiting Coalition.

"Dubai is a major transit hub because of the purchasing power and the number of tourists," said Imad Nazmi el Badawi, the United Trademarks director. "That makes it attractive to these people."

His company, used by labels such as Louis Vuitton and Montblanc, is among a handful of brand protection groups investigating copyright infringements. The information they provide has helped anti-counterfeiting specialists at the Dubai Police Criminal Investigation Department in conducting inquiries and carrying out raids.

"Once we receive the complaint we start our own investigation and, if it proves correct, we raid the location, arrest the people and seize the counterfeit products," said Major Salah bu Se'aba, who heads the police anti-economic crime department. "On average we investigate about 10 cases a week."

United's team comes from a variety of backgrounds and includes people with an expert knowledge of car parts, information technology and luxury accessories. By posing as tourists, they convince shop owners to take them to large apartments used as warehouses for storing counterfeit goods.

"Three years ago the retailers would show us everything," said Mr el Badawi. "Now they hide their fakes in hidden rooms. We have scared them.

Some companies don't stop their involvement once the police are called. Montblanc employs its own legal team that goes into action once a major fake-goods case involving the firm goes to court, said Joe Nahhas, its UAE brand director.

"It is something that we take very seriously," he said. "It's difficult to stop it entirely but we've certainly made inroads with it."

Mr. Nahas declined to disclose how much the company loses from the trade in counterfeit products.

The United team meets every Sunday morning to discuss which brand to focus on for the week and what targets they need to reach. Each staffer's weekly goal is to record the location of at least two apartments used for storage of fake goods. Consistently meeting the quota pays off in year-end bonuses, Mr el Badawi said.

Though wise in spotting fake goods, the mystery shoppers are schooled in the tricks of the trade before being sent onto the streets, said Sarmad Hasan Manto, a lawyer and office manager at United.

"You have to convince the guy that you don't like the quantity which they are showing you," said Mr Manto. "He will take you to an apartment. There's a psychological game involved. You can't just go to Karama and shout about how you want fake goods."

Using shopping tips provided by United, a reporter from The National, posing as a tourist, was able get a firsthand look at a storage apartment for counterfeit goods. In an area near a dozen Karama shops, the reporter was taken to four or five different outlets by a sales agent before being brought to an apartment in a nearby residential building.

The number on the door of the third-floor apartment was scratched out and, inside, the living room was sparsely furnished. A bookshelf was then pushed open, revealing a huge stash of what appeared to be ersatz Louis Vuitton bags. Closed-circuit television cameras covered every angle of the hidden room.

(c)thenational

Education in Dubai: "accounting forensics" course on how to detect and prevent financial crimes before they happen

In an effort to combat fraud, an Australian university's Dubai campus has introduced a special "accounting forensics" course to train government and law enforcement officials on how to detect and prevent financial crimes before they happen.

Raymi van der Spek, the vice president of administration at the University of Wollongong in Dubai (UOWD), said enrolment in the course was booming and the school's focus on addressing a specific local problem had generated considerable interest.

"We were approached about a year ago by [Dubai's Financial Audit Department] to do a course to train their staff to be better trained and well equipped to deal with the issue of corporate and accounting fraud," Mr van der Spek said.

Mr van der Spek said UOWD's main campus in Australia already had a full Master's programme in accounting forensics. In Dubai, it had so far established an intensive course with two modules equal to half the full Master's requirement.

But interest is so great among recent graduates that several members of the inaugural class have relocated to Australia to pursue the full degree.

"The post-graduate certificate in accounting forensics we offer here is equivalent to half the Master's programme, but some of the graduates wanted more and they went to Australia to finish the course," Mr van der Spek said.

The accounting forensics course has proved a significant benefit to the Australian institution.

Binod Shankar, a chartered financial analyst who specialises in financial training at the Genesis Institute, a think tank dedicated to social responsibility in business, says specific training to tackle local issues such as accountancy fraud is needed to help attract students.

"There is little formal training on this subject and most people who do forensic accounting work don't have a formal qualification," Mr Shankar said.

Several financial crimes have been uncovered in recent years after the Government brought in tough measures to address corruption and a number of arrests and convictions have been secured.

The accounting forensics course at UOWD, Mr van de Spek said, was part of a greater push to detect financial crimes.

"Training may not prevent fraud. However, it may better equip auditors and management to detect fraud," he said.

(C) thenational.ae

Burj Khalifa sees a further drop in apartment rents

Dubai:  Rents for apartments in the world's tallest tower are dropping further, a quick search in property offers by Dubai's agents shows.

Costs of renting a studio of around 560 square feet in the tower are down to Dh90,000 a year, according to property broker Better Homes.

The asking price for a one-bedroom apartment is at Dh120,000, while two bedrooms are advertised for Dh220,000. Similar offers can be found at Bayut or Propertyfinder.

According to Better Homes sales adviser Laura Adams, about 825 of 900 apartments in the Burj Khalifa are still empty, some nine months after the tower's launch.

Rents have dropped about 40 per cent since Gulf News exclusively reported the first offers for the Burj apartments, which stood at Dh140.000 for a studio at the beginning of June.

Lower than expected

One-bedroom units ranged between Dh180,000 and Dh260,000, and two-bedroom apartments started at Dh300,000. This means that rental yields for apartment owners are at much lower levels than expected.

Assuming an owner rents out a average one bedroom apartment of 986 square feet for Dh120,000, and has to pay Dh52.77 per square foot annual service charge for community service, chilled and hot water, as announced by tower builder Emaar in June, he will lose one third of the rental income on the charges alone.

Only if the owner managed to buy the apartment at launch prices (in this case around Dh900,000), can he earn a yield of around 7.5 per cent. Others who bought later at a higher price will face significantly lower yields.

Emaar sold 90 per cent of the homes in the tower before the January opening. The building also has 144 Armani-branded residences, 37 floors of office space and 160 hotel rooms. It houses Armani's first hotel and an observation deck on the 124th floor.

Sales prices in the Burj Khalifa are down to around Dh3,000 per square foot, as opposed to the peak in 2008 when some apartments had a price tag of up to Dh10,000 per square foot.

Sales prices decline in September

Dubai Reidin.com, a real estate information company covering emerging markets, yesterday announced its September 2010 Sales Price Index for Dubai (SPID), an online database of proprietary real estate indices for the UAE designed to accurately track price fluctuations in the residential real estate market.

The index registered an overall decline in the rates for apartments and villas, according to the index, leading to a dip in both month-on-month and year-on-year levels.

According to the September data, the Sales Price Index Dubai-All Residential fell 2.30 per cent from the previous month.

The index level also represents a year-on-year decrease of 4.86 per cent against September 2009.

Most affected

Apartment prices dropped 2.43 per cent while villas were cheaper by 2.40 per cent in September compared to August.

Reidin found the biggest quarter-on-quarter decline in Jumeirah Beach Residences (down 3.83 per cent), followed by The Springs and The Meadows (down 3.78 per cent).

Only two of Dubai's 17 residential districts showed positive trends. All other districts registered declines.

(C) Bloomberg, Gulf News

Dubai residency department on Facebook

The public can now contact the Dubai General Department for Residency and Foreigners Affairs (GDRFA) by Facebook or by following it on Twitter.

Facebook - http://www.facebook.com/pages/Dubai-United-Arab-Emirates/General-Directorate-of-Residency-and-Foreigners-Affairs-Dubai-GDRFA/106383936049294?ref=ts
Twitter - http://twitter.com/gdrfadubai

GDRFA's Facebook and Twitter will receive questions or inquiry from public and we are ready to listen to their point of views about our services or any of public complaint. Public can also post on the Facebook wall of GDRFA.

Dubai is a destination for people from all over the world and they can now get information about the residency department through the Facebook.

(C) Gulf News

Jointly Owned properties' regulation in Dubai

Each development in Dubai comprises not only a number of units, but also common parts designed for common use by unit owners and occupants.

Dubai's Jointly Owned Property Law (Law No. 27 of 2007) establishes a framework for the development and sub-division of developments into such units and common parts, with the sub-division known as ‘jointly owned property'.

Regulations have been introduced to enforce the law, and among other things, they provide that an association of all the unit owners is responsible for the management, operation and maintenance of the common areas.

For each development, the developer must file a "jointly owned property declaration" with the Land Department. Where a development was constructed and occupied as of April 13, the Declaration must be filed by the earlier of (a) October 13 and (b) the date which is 30 days after receipt of a notice from three or more unit owners.

In relation to any other development, the task must be completed when there is an application for registration of the first sale of a unit in the jointly owned property. If the developer does not comply with this timetable, unit owners may take steps to register their own Declaration. The developer would not be able to unregister this document and register his own version in its place. He would also be responsible for the unit owners' costs in this regard. The Declaration binds and benefits all unit owners and occupants as if all such persons had personally signed that document, agreeing to perform its terms. It sets out all the information relating to the jointly owned property, include a plan showing the common areas, a list of all unit numbers, and arrangements for the delivery and use of utilities and details of easements or covenants that burden or benefit the common areas.

Entitlement

Each unit is allocated an "entitlement", this being its share of the ownership of the jointly owned property. Entitlement is important in relation to decision-making by the owners association. It determines the weight of each unit owner's vote at the general assembly. It also determines the proportional share of the service charge each unit owner must pay.

The Declaration will contain a statement of the criteria used for allocating entitlements among the units.

The standard position would be that entitlement is determined by unit area.                                                

On the other hand, if entitlement is determined by reference to the extent to which the respective units draw on the financial resources of the owners association, the Declaration must contain an explanation of how the allocations were determined.

The approval of the Real Estate Regulatory Agency will be required for this non-standard method of calculation of entitlement.

Community rules

The Declaration will contain a set of community rules that apply to the entire development. Among other things, these will include restrictions on use of the units, the common areas and alterations to both.

The rules can be changed by a vote passed by simple majority at a vote of owners held during an association's general assembly. In relation to the Declaration, a simple majority may mean either (a) a majority of the owners present and entitled to vote at the general assembly or (b) a majority of the total value of the entitlements of unit owners who voted.

In contrast, where the Declaration states that a given matter is to be decided by "special resolution", this means two-thirds of all entitlements in the jointly owned property. It does not mean two-thirds of votes cast or two-thirds of the entitlements of unit owners present at the meeting.

Where a unit owner has failed to pay his allocated service charge, he or she is not entitled to exercise his vote. The high level of votes required to change the Declaration highlights the importance for developers and unit owners to get the document right the first time.

(C) Gulf News

Property || UAE: Mortgage providers focus on completed or viable projects

Dubai : With retail lending still no more than a trickle, whatever mortgage offers are available seem to be exclusively directed at completed properties or those projects that show clear proof of imminent completion.

Any development that does not meet these guidelines is given short shrift by mortgage providers.

"There has to be a clear line of sight as to when construction would be complete," said Jean-Luc Dubois, managing director of Home Matters, a mortgage consultancy. "It's the stance all the leading mortgage providers active in the market have adopted, and there aren't that many of them."

Thus, the onus is now entirely on the developer to get mortgage tie-ins for their projects. It's also a stark reminder to developers not to indulge in cost-cutting exercises that would tell on the final build quality. This will only risk putting off buyers in a market where there are plenty of options available.

"The quality of what's being built has to speak for itself, and it's the responsibility of the developer to convince the homeowner and the mortgage company this is indeed the case," said Sundar Parthasarathy, executive vice-president and head of consumer assets at Abu Dhabi Commercial Bank.

With more providers in the fray, prospective buyers could hope for some competitive mortgage rates being offered. "The majority of the offers could end up between 5.75 to 6.5 per cent, but there will be other factors that will also dictate this — the client's credentials, the development and other factors," said Parthasarathy. "On the whole, this particular rate band should be palatable to property buyers."

Even now, the loan-to-values available in the marketplace have nudged past the 80 per cent level, again dependent to a great extent on the client's track record and incentives such as having the salary transfer done to the lending bank.

However, Dubois suggested that as far as rates are concerned there's still a sharp variance. "While in some instances they have gone below 5.99 per cent, there are quite a few where rates are between 8 and 10 per cent," he said. "But going forward, there will be more uniformity in lending rates."

For that to happen, there needs to be some rationalising on the retail base rates in the local banking sector. This is the rate at which an individual banks sources funds for its own requirements. ... The prevailing interest rates are quite conducive to buyers who are seriously considering taking mortgage loans.

 Trend in housing

These days "rent-to-own" is what mortgage providers want to hear. It's not hard to understand why.

"Mortgage providers are more willing to associate with clients who want to acquire their rental property into an owned one," said Sundar Parthasarathy of Abu Dhabi Commercial Bank. "For the lender, there's a history that can be tracked of the client with the property, and that's a very comfortable situation to be in.

"There are no major numbers of those moving from rental to owned accommodation, but it's a trend that will slowly build up. We are starting to see a steady flow of applications related to such purchases."

Established communities benefit from this trend. Lenders in the region will be more cautious and selective in their financing of real estate projects in six months time, and will better analyse their viability, bankers and executives said. Real estate projects in the region have been affected by the global slowdown with Dubai's once-booming property sector hit particularly hard, with house prices slumping some 60 per cent from their peaks and lending all but drying up.

Developers in the region have been rethinking and redesigning their projects as a result of the economic downturn, scaling down from building high end properties to focus more on the mid-income sector. Graham Hallett, general manager at Abu Dhabi National Property Company and a subsidiary of National Bank of Abu Dhabi, said he saw opportunities to invest in infrastructure, health care, and telecommunications.

(C) Gulf News

Dubai Property || Rental Contracts: Information on rental contracts must be entered into Ejari portal

Dubai : Property management companies and landlords must register their rental contracts immediately, otherwise it could lead to penalties and severance of utility connections.
The aim is to ensure all lease contracts and the parties to such agreements are registered and the details recorded. This will lead to the Dubai rental market becoming one of the most transparent and accountable anywhere and, at the end of the day, one of the best regulated... At a different level, full implementation of Ejari registration will enable the authorities to construct a full and accurate picture of Dubai's rental market."
First unveiled more than two years ago, Dubai's Real Estate Regulatory Agency (Rera) enforced its online-portal registration system Ejari from March 14 this year. Firms face penalties for failure to register with regulator.
http://www.ejari.ae/
http://www.ejari.ae/PublicPages/faq.aspx
Ejari is a system that is governed by RERA to make registration of rental / lease agreements easy and accessible to Owners and Real Estate Management Companies of various categories. The Ejari system provides a full portfolio of services beyond registering the initial lease agreement. Renewals, cancellations, transfers and terminations can all be logged.
Why Ejari: At a different level, full implementation of Ejari registration will enable the authorities to construct a full and accurate picture of Dubai's rental market which will play a crucial role in its planning for the future of the sector and its ability to influence such factors as the supply side of the market and ultimately the level of prices.
Anyone who belongs to the following category can register for Ejari Accounts.
1. Landlords
2. Property management company and its employees
3. Landlord representative  
Ejari account is absolutely free of charge.
One need to print the Rent approval request from the Ejari system and visit RERA for approval. Your management contract has to be approved prior to creating tenancy contract.
once your property or contract is approved you cannot modify the information.
Benefits of EJari: Ejari will ensure rental agreements are fair and transparent to the parties involved and that their terms and conditions are given full weight. The launch of Ejari shall bring the Dubai's rental sector to be one of the best regulated rental market in the world and best practice in the norm across Dubai's rental sector.
For property management companies it is a straightforward process. A one-day training course for Dh500 gives them exposure to the Ejari software and a password to subsequently use for the system to register properties that they manage, at Dh160 a unit.
For individual landlords who prefer to rent out their property without the assistance of a company, the process seems less enticing. Although a one-off Dh500 isn't unreasonable, some may not have the time to go through a full-day training course or simply not be around to do it.
Tenants also face an uphill struggle if their landlord refuses to use the system, as they can't register. For one, should a dispute arise, the Rental Committee may not consider unregistered contracts.
Furthermore as per Dubai Law No. 26 of 2007, regulating the relationship between landlords and tenants, not registering through Ejari could mean tenants will be unable to get Dewa, telephone connections.
Landlords and tenants must understand that the Ejari service supports both.

Average prices

The system also helps determine average rental prices for Rera's rental index. However, landlords shying away from attending the course have no choice but to engage a property management company.

In the case of Landmark Properties it means signing the property to be managed on an annual basis and then the Dh660 would be included in the package, or as a one-off registration the landlord could save the Dh160 Ejari tenancy approval fee.

For any help or support, one  can contact RERA (for Ejari) by dialing 04-203-0544 or send an email to support@eres.ae

UAE Real Estate: Snagging reports can be used as court evidence against developer

Snagging reports issued by professionals can be used as evidence to bring a case against a property developer, according to experts.

"Our report could be used as evidence for an owner to bring a case against the developer where necessary. However, our reports do not comment on any design issues of structural faults in the building in general. Our report will only cover defects within the individual units," Cluttons Director Lesley Preston told Emirates 24|7.

Youcef Betraoui, Managing Director, Land Sterling - Mena added that the reports are prepared in line with local and international standards and have been used as evidence in courts in the past.

"We have professional indemnity insurance which covers our services and thus raises confidence with the client that the service provided is of the highest standard and quality. We do request that our clients contact us prior to submitting the inspection report to the court to ensure that no conflict of interest has taken place and assist our clients with additional documents which can support them in court."

Although Christiane Murray, Head of Property Management, Landmark Property Management believes that the report being independent can be used as evidence, she has not so far heard anything to the contrary.

"So far we are only aware that they have been uses in arbitration and disputes handled by Real Estate Regulatory Agency," she added.

(C) Emirates 24|7

UAE opens naval base to guard oil exports on its east coast

The United Arab Emirates has opened a naval base on its east coast as part of efforts to secure its ability to export oil in the event Iran closes the strategic Strait of Hormuz, local media said on Thursday.
Almost all oil exports from OPEC's fourth-largest producer now go through Gulf waters and the narrow strait which separates the UAE from Iran before reaching the Arabian Sea and the Indian Ocean.

The opening ceremony for the new base, in the emirate of Fujairah on the Arabian Sea, was held on Wednesday.

The base will "provide a quick response to natural and man-made disasters that may occur at sea, in addition to... ensuring safe and quick passage for its oil exports," the official WAM news agency said.

The emirate of Abu Dhabi, which holds more than 90 percent of UAE crude reserves, is reportedly building a huge oil export facility and an oil storage terminal in Fujairah, and an oil pipeline to it.

Having "a naval base in Fujairah would give the UAE more capabilities to protect its economic zone and its strategic facility, the port down there, which will be a major point of export for oil and gas," Riad Kahwaji, founder of the Institute for Near East and Gulf Military Analysis in Dubai, told AFP.

Kahwaji said that two pipelines from Abu Dhabi to Fujairah -- one for oil and another for gas -- have been announced.

"There's an oil pipeline from Abu Dhabi to Fujairah port, and there's the Dolphin project, which is a gas pipeline between Qatar, Abu Dhabi, then Fujairah and then on to Oman," he said.

Iran has repeatedly threatened to block navigation through the Strait of Hormuz, through which about 60 percent of the world's oil supplies pass, if it is ever attacked by the United States or Israel.

Many Western states believe Iran's nuclear programme may be a covert bid to make a nuclear bomb, a charge Tehran denies. The United States and Israel have not ruled out the possibility of a strike against Iranian nuclear facilities.

"We've heard over the news for the past few years the threats directly and indirectly from Iran of closing the Strait of Hormuz if it was attacked," Kahwaji said.

"Countries like Qatar, the UAE, Kuwait and Bahrain and Iraq... are really blocked in if the Strait of Hormuz is closed," he said.

"It is natural to see these countries come up with contingency plans that coincide with heightened threat perceptions" so "they would continue to be able to export their products and even import as well," even if the strait was closed.

The UAE, a federation of seven emirates with Abu Dhabi as its capital, has good relations with Western countries, but also maintains close trade ties with Iran.

(C) AFP 

Europeans are the biggest earners in Dubai

European expatriates top the annual income survey in Dubai followed by Emiratis and Arab households.

The average annual income of Europeans is Dh172,000 and the monthly average is Dh14,003, according to a household expenditure and income survey by Dubai Statistics Centre.

Emiratis come in second with an annual income of Dh133,000 and a monthly average of Dh11,800, while Arabs are placed third on the list with an annual income of Dh102,000 and a monthly average of Dh8,005.

The annual income of Asians is Dh76,000, with a monthly average of Dh6,003, the survey showed.

Most European expatriates work in senior positions and companies consider the exchange rates of currencies of their home countries, said Arif Obaid Al Muhairi, Chief Executive of Dubai Statistics Centre, explaining the reason for their high income.

Meanwhile, the average annual income of Emirati households is far higher compared with non-Emirati households in Dubai.

According to the survey conducted in 2009, the average household income of Emiratis is Dh665,000 a year with a monthly average Dh55,000.

The European household follows with an annual income of Dh460,000 and a monthly average of Dh38,000.

Arab households come third on the list with an average annual income of Dh280,000 and a monthly average Dh23,000.

And the average annual income of Asian households is Dh211,000 with a monthly average of Dh18,000.

Al Muhairi attributed the high income of UAE citizens to the increase in salaries of Federal Government staff beginning end-2008, combined with other commercial sources of income.

The survey showed the per capita income of Europeans fell to Dh172,000 in 2009 from Dh175,000 in 2008, while the average income of a national increased to Dh133,000 in 2009 compared to Dh112,000 in 2008.

The per capita average income of Arabs fell from Dh102,000 to Dh70,000, and that of Asian expatriate declined from Dh76,000 to Dh71,000 during the same period.

Al Muhairi said the decline in incomes of expatriates in Dubai was due to decline  in the nominal rather than the real, where some of those are working as investors. 

For instance, if they are trading in cars and due to the decline in the prices of their investments in cars, the prices fell by almost 10 per cent, their revenue declined and such a decline is nominal and not real.

(C) emirates247.com

UAE | Traffic and Transport

Here are a few driving tips that everyone should follow to avoid accidents in this foggy weather:

• Ask yourself if your journey is really necessary before driving in thick fog. Avoid travelling in a car if you can.
• Make sure the headlights and the front windows of the car are clean before starting the journey.
• Reduce speed, leave enough space between vehicles and avoid overtaking.
• Do not change lanes unless necessary.
• Turn on headlights (but low beams only).
• Avoid turning on hazard lights, except in emergency cases. Using hazard lights all the time prevents a motorist from alerting other motorists to an emergency.
• Turn on the appropriate fog lights when driving.
• Make sure the window wipers work properly to constantly clean the window and have clear visibility.
• Be aware at all times for danger such as a vehicle suddenly braking in the front or another vehicle entering from a side entrance. This means not using mobile phones when driving, for example.
• Allow more time to complete a journey, especially during low visibility.

(C) Gulfnews.com

World's tallest tower to be built in Saudi Arabia

Saudi-based Kingdom Holding is to launch a mega real estate project in Jeddah that will include the construction of the world's tallest skyscraper, pan-Arab Asharq Al Awsat daily has reported, citing Kingdom's Chairman Prince Alwaleed bin Talal. The Saudi billionaire told the newspaper that the company will officially announce the project at a press conference in three weeks. The mile-high tower overlooking the Red Sea will be built on an area of 3.5 million square metres in the Obhur Gulf, 20 kilometres north of the Jeddah city centre and not far away from Jeddah's King Abdulaziz International Airport.

Its plan to build a 1.6-kilometre-high tower in the Red Sea port city of Jeddah, an official source has said.

The tallest tower in the world when completed, already informally dubbed the mile-high tower, will be double the height of Dubai's Burj Khalifa, which is currently the world's tallest man-made structure.

According to official information issued by the company, a city to be constructed around the tower will sprawl over an area of 23 million square metres at a total investment of SR100 billion ($26.6 billion). The city will have the capacity to accommodate 80,000 people in addition to shopping and entertainment facilities. It will have hospitality facilities catering for up to a million visitors.

Kingdom Tower Jeddah will have retail facilities and conference halls at the top besides a five-star hotel, offices and deluxe residential units. It was first announced by Kingdom Holding in February 2008.

Last year, reports had suggested the project was either on hold or scaled back. Kingdom was quick to refute these reports.

UAE Telecoms battle over non-traditional telecommunications services

Etisalat and du are competing over non-traditional telecommunications services including online content and eBooks to counter the slowdown in mobile subscriber numbers.

Etisalat this week reported a 23 per cent decline in third-quarter earnings, compared with the same period last year, caused primarily by fierce competition brought on by its main rival du.

The UAE's largest telecoms operator added only 10,000 mobile subscribers to its business as its share of the domestic market fell below the two thirds mark.

"We believe that the UAE's mobile voice market is nearing full penetration and, in the absence of special promotional offers, both operators will find it difficult to add mobile subscribers in the numbers they historically have done," said Irfan Ellam, a telecoms analyst with Al Mal Capital.

"Both operators will need to start stimulating usage rather than headline subscriber growth."

To offset the decline in profits brought on by the saturated market, Etisalat plans to launch as many as 350 consumer and business services by the end next year, including video calling, mobile stock trading and on-demand TV.

Abdulla Hashim, the senior vice president of business solutions at Etisalat, estimated non-traditional telecoms services could generate as much as half of the company's revenues by 2013.

"The roadmap is full of services," Mr Hashim said. "If we don't do it, we'll be eaten alive. At the end of the day, we want to keep the ownership and relationship with the customers."

Etisalat has targeted nine sectors for which it will provide services in the future including health, financial and banking services, and education.

"It's in line with our strategy to push more mobile data," Mr Hashim said. "We have noticed that voice revenues are declining so we are pushing more mobile data. Voice will not disappear but as a service it will not be an accommodating service."

Etisalat's main rival, du, is opting for a more web-oriented approach. It will try to attract online users across the Arab world through its website Anayou and provide music, videos, gaming, news and a social network similar to Facebook.

The venture will generate revenue mainly through online advertising and other revenue-sharing agreements.

Mario Pino, the director for business development and strategy at Etisalat, said the new services would start to be introduced in December.

One of the services includes high-quality voice calls, said Mr Pino

"We're coming out with advanced voice … the voice quality will be amazing," he said. "We're going to take the whole telephone line and make it a little more exciting."

Other features will be centred around "digital home" technology, where electronic devices are linked by Wi-Fi around the home.

This could include internet-connect television, as well as linking radio and digital cameras, Mr Pino said.

Part of Etisalat's role would be "enabling" and "providing the hardware in the home", he said.

Video calling may be another new service. "The digital home is everything connected through the gateway … the service could be a video call." The operator also plans to launch a "video on demand" (VOD) function by the end of the year.

"The new generation platform is coming up. That will definitely have a video-on-demand component," said Mr Pino.

The new VOD service, which he said would launch "by the end of this year, in December this year at the latest", will include subscription and pay-per-view options.

It will also include a personal video recorder service.

"For sure you'll see the catch-up [service], which means you can go back seven days and watch something you've missed," Mr Pino said.

@thenational.ae

Burj Al Arab in Dubai to get a Second Life

DUBAI // Some of Dubai's biggest and most famous structures will be turned into pixels in a computer game aimed at promoting the emirate.

A virtual island containing replicas of structures including the Burj Al Arab and Madinat Jumeirah, are part of a marketing proposal submitted by a German firm to the luxury hotelier Jumeirah Group. They hope the simulation, to appear on the virtual-world computer game Second Life, will drive more tourists to Jumeirah's hotels in particular, as well as the Emirates as a whole.

The project is the brainchild of Angela Gelenbe, who has been a travel agent in Leipzig for 20 years and has run a virtual holiday firm in Second Life for the past three. She already owns a hotel in the game with a similar design to the Burj Al Arab which has proved popular among players.

"Lots of people see the Burj here and then go and visit the real-world Burj Al Arab," said Ms Gelenbe of the virtual version. "I thought that perhaps there was a market here for Jumeirah to exploit." Ms Gelenbe, whose in-game persona is named Angie Ling, said her virtual tourism business has helped to drive customers to her real-life company.

Second Life, launched in 2003 by Linden Lab, is an online game where individuals create images of themselves called avatars and interact with each other in electronic worlds. Users can create their own buildings, which can be purchased in Linden dollars, an in-world currency that can be converted directly into US dollars through an exchange.

Among a list of possible game strategies is to create an island called "Dubai" with virtual replicas of well-known hotels. Real-world tour operators such as Thomas Cook and TUI can then be invited to rent out the rooms to virtual residents while at the same time marketing their own tours to Dubai.

Currently, Ms Gelenbe rents out suites in her own 10-room Burj hotel for a minimal rate of 200 Linden dollars a week, or Dh2.8 at current exchange rates. While her virtual profit is minimal, the exposure helps her actual business gain clients, she said.

Second Life captured the popular imagination when the developer Anshe Chung became the first person to become a real-world millionaire through selling virtual property on the game in 2006. At the peak of its popularity, brands as varied as IBM and Adidas set up a presence in Second Life and Reuters established a news bureau with a beat reporter.

Hoteliers also got into the act, with Starwood Hotels establishing its first Aloft branded hotel in the game to get user feedback on the design. Many corporations have since withdrawn and some experts say the game's commercial appeal has waned.

Nick Abrahams, a corporate lawyer for Norton Rose in Sydney, said: "Two or three years ago I was doing a lot of work for corporates who were interested in Second Life. The corporates who were involved with it have since pulled back. The problem is that there doesn't seem to be the right kind of people, nor a critical mass of people, to make it work."

However, the success of any in-game marketing campaign is largely dependent on how it is pitched and corporate defections in recent years may actually represent an opportunity, said Kimberly Rufer-Bach, the owner of a Second Life marketing firm called The Magicians.

She said its success depends on the "exact market targeted and the approach taken."

@thenational.ae