Wednesday, January 15, 2014

New Etihad-Jet service on Abu Dhabi-New York route

Etihad Airways on Wednesday announced the introduction of a new daily flight between Abu Dhabi and New York City from March 1. It will provide additional one-stop links to the US for Indian travellers and an easy, new option for travel from US to India.
Commencing March 1, Etihad Airways flight EY103 will depart Abu Dhabi at 1.45 am and arrive at New York’s John F Kennedy Airport at 7.45 am the same day. The return flight, EY102, will leave New York at 11.35 am, arriving in Abu Dhabi at 9.20 am the following day. These flights will complement the existing Etihad Airways Boeing 777-300ER service, EY101, which departs Abu Dhabi at 10.30 am, arriving in New York at 4.30 pm the same day, and EY100, which leaves New York at 9.40 pm and arrives in Abu Dhabi the next day at 7.25 pm.
The new flights will be operated by Etihad Airways with two tri-class Boeing 777-300ER aircraft, to be leased from Jet Airways. From May 1, 2014 Jet Airways will operate these flights. Chief Executive Officer of Etihad Airways, James Hogan said New York was one of the airline’s most popular destinations, not only for guests flying from Abu Dhabi but also for travellers from a wide range of connecting destinations, including many in India. “These services will provide not only greater access to New York but also evidence of Abu Dhabi’s growing importance as a global air transport hub,’’ he remarked.
The new Abu Dhabi-New York flight has been scheduled to connect with evening services by Etihad Airways, Jet Airways or both carriers arriving from four Indian cities -- Mumbai, Delhi, Cochin and Chennai. Flights arriving back from New York will also connect from Abu Dhabi to these cities.

Abu Dhabi to buy Time Warner Headquarters in Singapore

When Related Cos. needed financing for its $1.3 billion bid for Manhattan's Time Warner Center,  it turned to a ready source of money: foreign buyers.

It found willing backers in sovereign-wealth funds from Abu Dhabi and Singapore, which agreed to finance more than 80% of the purchase, according to people with knowledge of discussions.

The Related-led group and Time Warner Inc., which owns the building, are now close to a deal and an agreement could be announced as soon as Thursday, the people said.

The transaction would be one of the biggest in a surge of deals involving foreign investors in U.S. commercial real estate. Increased demand from overseas has helped drive U.S. commercial property values to record levels, particularly in major cities favored by global firms.

Foreign buyers are seeking out the U.S. as a place to spend their growing piles of cash, particularly as other markets such as Europe remain anemic. Non-U.S. buyers purchased more than $46 billion of property 2013, up from $35 billion in 2012 and the most since 2007, according to real-estate data firm Real Capital Analytics Inc.

Deals included Singapore-based OUE Ltd's purchase of the U.S. Bank Tower in Los Angeles, the tallest tower on the West Coast, and Canadian investor Ivanhoe Cambridge Inc.'s $390 million acquisition of the Wells Fargo Center in Seattle.

Foreign investment in U.S. real estate accounted for 11.9% of total purchases in 2013, also a postcrisis high, according to Real Capital's numbers, which are preliminary and don't include foreign investments through private-equity funds. The figure was 9.8% in 2012.

"Probably 50% of our interest came from foreigners," says Douglas Harmon, a senior managing director at real-estate services firm Eastdil Secured LLC who represented Time Warner on the sale.

While the Abu Dhabi Investment Authority and the Government of Singapore Investment Corp. will own most of the joint venture, Related will manage the tower on the corner of Central Park, the people said.

As part of the deal, Time Warner would move to a new tower that Related plans to develop in its sprawling Hudson Yards project on Manhattan's far West Side. Related hasn't completed financing for that building.

Time Warner spent about $520 million to construct its current headquarters about a decade ago. The company is using profits from the current sale to consolidate many of its New York operations, including Home Box Office Inc. and Turner Broadcasting, under one roof.

Other sellers also have enjoyed large profits due to interest from overseas. In October, for example, Boston Properties sold a 45% stake in the office tower at 7 Times Square for $684 million to the Norwegian Government Pension Fund Global, the largest sovereign-wealth fund in the world. Boston Properties reported a $386 million profit on the sale.

Some foreign investors have been buyers in the country for years, including the Abu Dhabi and Singapore funds. Canada last year accounted for more U.S. investment than any other country, with $14 billion, according to Real Capital.

But new foreign investors are making their American debuts. After years of looking at the U.S., Chinese investors last year spent more than $4.3 billion in the U.S., more than the total for the previous decade, according to Real Capital.

Shanghai-based Fosun International Ltd. 0656.HK +5.57%  , paid $725 million in December for One Chase Manhattan Plaza after looking for four years.

Now it is on the hunt for more deals, targeting locations including New York and San Francisco. "We're really confident about the recovery of the American economy," Guo Guangchang, Fosun's chairman, said in a December interview.

Other new investors include Norway's sovereign-wealth fund, which in the past year bought large stakes in properties with a total value of over $5 billion.

"If we're going to be a long-term investor and be diversified, we'll never get away from the U.S.," said Karsten Kallevig, chief investment officer at Norges Bank Investment Management, manager of the $800 billion fund.

The high prices paid by overseas investors have chased some U.S. buyers to the sidelines. Michael Franco, executive vice president at Vornado Realty Trust, cited high prices as a reason that Vornado was missing out on some deals. "I think it will continue to be tough to buy high-quality assets," he said on a November conference call.

Still, rising prices can mean bigger losses if the economy turns. Japanese investors bought landmarks such as Rockefeller Center in the late 1980s and early 1990s, just before the property market crashed.

For now, the buyers of Time Warner's headquarters have a strong tenant. Time Warner plans to lease its current space for five years, people familiar with the transaction said.

But filling the building after that could be difficult. The new owners likely will need to charge more than $100 a square foot to make a profit given a sale price of more than $1.3 billion, said bidders who looked at the property.

Average rents for top-quality office space in Midtown are $74.12 a square foot, according to statistics released Tuesday by Cushman & Wakefield Inc. That is up 2.2% from a year earlier.

Friday, January 3, 2014

UAE hotel room rates set to rise despite raft of new openings

UAE will have about 109 new hotels that would add 31,000 rooms to the total stock, according to the latest STR Global data available through November.

Almost half of the new hotels are planned for Dubai, accounting for more than 16,600 rooms. Abu Dhabi is expected to attract 27 openings with more than 7,000 rooms.

The hotels are confident of increased revenue despite the newcomers.

“The rates have stabilised in the UAE market in general and there might be a slight increase in the leisure business moving forward,” said Omer Kaddouri, the executive vice president and chief operating officer of Rotana.

“We are talking about 10 per cent as an average [increase in room rate] and this is due to the very high demand in both markets, specifically in Dubai.”

The Abu Dhabi-based hotel operator, which manages 32 properties across the country, expects to reach an average occupancy of 82 per cent, with an average room rate of Dh800, across the Emirates for the next year.

“The demand is increasing but we will focus our resources on increasing our market share rather than increasing the room rate,” Mr Kaddouri said.

In Abu Dhabi, the revenue per available room rose 10.4 per cent to US$171.70 last month, compared with the same period last year, according to STR Global.

While this month’s rates are not yet available, the rates at the end of the year in Abu Dhabi have gone down for the past couple of years. Last year, room rates for December were $130.60, a fall from $153.20, according to the Dubai-based HotStats Mena as more hotels were completed.

On average, the room rates in the capital last year hovered around $142.90, down from $158.40 in 2011 even though occupancy rates stood around the 70 per cent mark.

A rate recovery is unlikely next year, said Rashid Aboobacker, the senior consultant at TRI Mideast in Dubai. “In Abu Dhabi, although hotel room rates have continued to fall this year, the rate of decline has certainly slowed significantly,” Mr Aboobacker said. “The average room rate fell 5.8 per cent during the 11 months compared to 12.5 per cent drop during the same period last year.”

Expansion of routes by Etihad Airways, strong economic growth and a rise in visitors opting for packages, including Abu Dhabi, will be the main drivers for the hospitality industry in the capital, he said.

UAE hotels are also banking on corporate and tourism events besides Arabian Gulf and Russian school holidays to fill their rooms.

“We expect to see an increase in room rates between 10 and 12 per cent and occupancy rates between 5 and 10 per cent between this year and next,” said Arun Kumar, the resident manager at Dubai’s Al Bustan Centre and Residence.

Currently, the rates at the property start at Dh1,000, and are expected to hold through the Chinese and Iranian new years, and the school holidays before falling to Dh550 for the slowest months around June, he said.

“The overall tourist arrivals and corporate build-up are the main drivers and that will remain the trend,” he added.

The hotel, which has 640 suites, has an occupancy rate of 65 per cent on average year round with almost 70 per cent of the tourists coming from the leisure sector.

The corporate sector comprises the rest. At Arabian Courtyard Hotel & Spa, the average room rates are expected to be around Dh550, which represents an 8 per cent increase, and a four per cent rise in occupancy rate for the next year, said Habib Khan, the hotel’s general manager and chief executive of the hospitality division of Planet Group , which operates the hotel. The hotel had 88 per cent occupancy this year.

“There are a lot of positive indicators such as increase in real estate prices and influx of new residents in the country,” he said.

In Dubai, the hotel room rates grew 7.2 per cent in the first 11 months and occupancy levels stayed at 81.4, Mr Aboobacker said.

“We believe the trend will continue next year, supported by a stronger real estate and construction sector, and the gradual improvement in the economic situations in the main tourism feeder markets such as Europe.”

In Dubai, room rates rose 9.9 per cent to $290.68 in November with the revenue per available room going up by 12.7 per cent to $254, according to STR Global.

Last year, the December rates were $322.90, up from $308.40, HotStats said.

On average, the room rates in Dubai last year hovered around $272, up from $205.50 in the previous year with occupancy of about 80 per cent.

Abu Dhabi islands to be big tourism draw for 2014

The capital’s 149 hotels and hotel apartments took in 2.53 million guests in the first 11 months, according to Abu Dhabi Tourism and Culture Authority (TCA Abu Dhabi) – a jump of 17 per cent on the same period last year. The hotels and hotel apartments sector reported a 3.14-night average length of stay, up 8 per cent.

During the year, 12 properties with almost 2,500 new rooms came on stream.

“There is more awareness about the destination now. And we didn’t focus on Abu Dhabi city alone but also on Western Region, which is close to the Gulf countries and the coastline, and Al Ain, which is a cultural destination,” said Mohammed Al Dhaheri the director of strategy and policy of TCA Abu Dhabi. “A forecast is difficult [on tourist numbers and hotel room rates] but we try to maintain a healthy balance.”

Next year, the agency plans to promote experiences from the cultural aspects of Saadiyat Island to the appeal of beaches and the attractions of Yas Island.

“The Abu Dhabi Government has made huge investments on infrastructure and it is time to showcase these,” Mr Al Dhaheri said.

Occupancy rate year to date is 70 per cent, up 9 per cent on 2012, and that generated Dh5 billion, up 11 per cent, in hotel revenues. Of this, food and beverage income contributed Dh1.9bn, a rise of 19 per cent.

The average room rate is running at Dh477.22, a slight decline of 1 per cent on the year.

The emirates has also caught on with the domestic travelers, with 865,966 guests travelling from within the UAE borders. That represents a rise of about 6 per cent over the year.

The Abu Dhabi properties last month reported a 26 per cent rise in the number of guests year on year as 260,810 guests checked in. November occupancy levels rose to 83 per cent and total revenues surged 19 per cent from the year-earlier month to Dh669 million.

The tourism authority attributed the rise to a series of high profile events in the capital such as the Grand Prix, the Abu Dhabi Film Festival, the Fifa Under 17 World Cup and Abu Dhabi Art.

The length of stay also went up for November, with guests having spent 3.3 nights in the emirate.

India, followed by the United Kingdom, remained the top source markets. More than 157,000 guests from India visited the emirate this year, reporting a 26 per cent rise on 2012, and stayed on average 3.94 nights.

The number of British tourists, at a little more than 147,800 arrivals for the year, represented a 14 per cent increase. They were followed by the visitors from Germany with 107,264 arrivals.

There is potential for growth, too, as Etihad Airways goes ahead with route expansion. “With more air access uplift promised in 2014, with Etihad Airways planning daily flights from Rome, Zurich, Perth, Medina, Los Angeles and Jaipur, four weekly flights from Yerevan in Armenia and a thrice-weekly flight from Dallas Fort Worth, new business opportunities abound,” said Jasem Al Darmaki, the deputy director general of TCA Abu Dhabi.