Dubai developers Cirrus and Kaizen disappear – Investors worried

original source Construction Week Online Dubai, 14 November 2009

Confusion has broken out over the whereabouts of international real estate firms Cirrus Developments and Kaizen Developments.

Both developers are responsible for hundreds of millions of dollars worth of developments in Dubai and across the region, including Cirrus’ Aquarius Gate in the Waterfront area, and Kaizen’s Equinox Residences at Palm Jebel Ali.

Websites for the companies are no longer active, while phone numbers listed on their brochures have not connected.

Cirrus Developments had been developing Celestial Heights – a mixed-use project of three towers, in the Downtown Jebel Ali master development, but the project is now being looked after by a firm called Catalyst Project Consultants, Construction Week has learned.

“Cirrus was part of phase one of Celestial Heights, then the owners appointed Catalyst,” Catalyst Project Consultants’ director Israr Ahmed told CW.

“Cirrus have downsized and moved offices, but they handed over all work related to the project over a two month period.”

Ahmed also said that Catalyst was “not at all” related to Cirrus Developments but it did have links to Kaizen Developments whose logo featured on early Celestial Heights marketing materials.

The last number he had for Cirrus could not be connected.

Dubai’s Real Estate Regulatory Agency (Rera) confirmed to CW that a developer by the name of Kaizen One Investment Limited was an approved developer, but the phone number it had registered for Kaizen now belongs to a general trading company.

Significantly, the registered website that Rera had for Kaizen One Investment Limited was www.cirrusdevelopments.com, which is now defunct.

Construction Week eventually managed to reach Cirrus Developments’ brokerage number where a receptionist said: “Due to the [financial] crisis, we have suspended the brokerage”, but insisted that despite not appearing on Rera’s list of approved developers, the development side of the company was still in operation.

Both public relations firms which represented Kaizen and Cirrus in the past confirmed that they were no longer their clients.

Kaizen Developments is unreachable.

Do you work for Kaizen or Cirrus? Have you invested in their projects or have you worked on their projects? Please contact constructionweek online

Dubai`s off-plan buyers cash at high risk – Delayed Projects axed

source  MaktoobBusiness

DUBAI – Many real estate projects claimed to be on hold due to the collapse of the UAE’s property market have actually been cancelled, but developers do not want to admit this because then they will have to return investors’ money, industry observers say.

Observers also question some developers’ ability to repay investors when projects are finally cancelled, with the prospect of buyers losing millions of dollars.

“In the 18 months before the downturn a number of projects were announced that were not financially viable and therefore unlikely to see completion,” said Tahir Akhtar, chairman of Dubai Business Advisors, who has invested in projects across the UAE.

“Developers do not want to admit this because then they will have to return the funds.”

Billions of dollars worth of developments were launched during the UAE’s real estate boom, which had seen property prices close to double by mid-2008 from the start of 2007.

The boom was driven by speculation and easy credit, with developers funding the construction of projects through off-plan sales.

When the global financial crisis gripped the country’s real estate market prices plummeted as financing and demand dried up, leaving developers unable to fund construction.

UNDER REVIEW

Many developers have put projects on hold or have said they are reviewing projects, but few have come out and outright cancelled projects.

“If they (developers) say it’s cancelled they will have to repay the money to clients. Probably for that reason they are saying it is still on hold,” said Charles Neil, CEO of property consulting firm Landmark Advisory.

Michael Shvo, a well-known luxury real estate marketer from New York, said a developer told him privately a project that is “officially” delayed is actually cancelled, declining to name the developer.
 
“A developer told me that officially the project is on hold, but it is actually cancelled,” Shvo told a conference at Cityscape Dubai earlier this month, prompting him to call for greater transparency.

The number of real estate projects cancelled or on hold stood at around $408 billion in September, up 18 percent from $346 billion in April, according to the Kuwait Financial Centre.

The Centre, also known as Markaz, said it expects cancellations to rise further in Dubai due to the continued lack of financing and uncertain economic outlook.

UAE real estate regulations vary from emirate to emirate, but currently there are no laws governing how long a project can be on hold before a developer must refund investors’ money.

In Dubai, the UAE’s most developed real estate market, authorities are in the process assessing which projects are unviable and should be cancelled, with the findings due out before the end of the year, according to the Real Estate Regulatory Agency (RERA)

Developers are not allowed to cancel projects in Dubai without the approval of RERA and the Dubai Land Department, RERA said, adding that if a developer does get approval to cancel a project it would have to reimburse investors. 

“It will vary from project to project as which ones will go ahead. Some will end up with half-completed buildings and some may not start (at all),” Landmark’s Neil said.

INVESTOR CONCERN

Investors have become increasingly vocal in voicing their concerns about delayed projects, calling on developers to transfer their investment to another project or refund their money.

Larger companies such as Emaar Properties and Nakheel have set up schemes that allow buyers to swap their investments between projects, but smaller developers lack the project portfolio to offer an alternative, analysts say, leaving investors at risk of losing their money.

Dubai Business Advisors’ Akhtar said a group of investors he belonged to stood to lose around 150 million dirhams ($40.8 million) from projects in the UAE emirate of Ajman that now look like they may not go ahead.

“Not a lot has been done to protect investors,” he said.

Dubai brought an escrow account law into force in mid-2007 in an effort to better protect investors – requiring developers to hold buyers’ money in a special bank account until the completion of a project – but many projects had been launched prior to the law, and other emirates were even later in introducing similar regulations.

“Most projects that fall under the escrow provisions of RERA have an established level of comfort and protection. Those projects that are not covered by escrow are a different situation,” said Blair Hagkull, regional managing director of Jones Lang LaSalle.

Test Case for RERA Dubai – Investors file case with RERA over Dubai project delays

source ArabianBusiness
 A group of around 30 investors has filed an official complaint at the Real Estate Regulatory Agency (Rera) over ongoing delays and specification changes at the Vue de Lac and Vista del Lago developments in Dubai.

Investors on the Al Attar project at Jumeirah Lake Towers accused the developer of unreasonable delays and changes being made to apartments without the consent of owners, Construction Week Online reported.

“We have been promised the project since then end of 2007. It was then pushed to 2008, then the end of 2008, and now he’s saying 2011 – which will never happen, because up to date they’ve only finished the piling,” investor Makram Mohamed told the website.

Many asserted that apartment specifications have changed so drastically that they no longer wish to purchase property in the project and want a full refund.

Investors are unhappy at what was described in a letter from Al Attar as “some small changes”, where two-bedroom apartments have been changed to one-bedroom ones.

Al Attar had revised the prices of the apartments in line with the reduction in apartment size, but investors said that they had bought two-bedroom apartments specifically and a smaller alternative was not acceptable.

“Because of the change of designation and all of this delay, we don’t want this property any more. The majority of people investing were buying to live in this property. Ninety per cent of our group wanted to live in this. Now they’ve changed the designation, we don’t need it. I bought a two-bedroom; you can’t give me a one-bed plus study,” said investor Shailendra Sainani.

“The majority of us need our money refunded and the costs absorbed. [Al Attar] needs to resell the project from the beginning.”

In addition to changes in designation, many investors are also concerned that delays to the project will result in a huge interest bill arising from finance agreements that can only be concluded following apartment handover.

Some investors took out finance agreements in 2006 under the impression that the project would be handed over in 2008. They are now facing the prospect of paying five years’ worth of interest on finance agreements, should the project be delivered according to a new completion date of 2011.

Some investors also query Al Attar’s ability to deliver the project on time.

“Can we still believe Al Attar can deliver in 2011, if they couldn’t even start construction in the last three years?” said one investor.

The group has filed a case with Rera because they say that Al Attar Properties is refusing to communicate with them except through a lawyer.

No-one from Al Attar was able to comment on the case or development.

The case has now been filed with Rera, who said a decision on the steps it would take would be forthcoming in the next few days.

RERA chief Marwan bin Ghalita denies petition from worried investors

the-petition-to-rera-dubaihttp://www.arabianbusiness.com/546550-rera-chief-denies-petition-from-worried-investors

Arabian Business 12. February 2009

Dubai’s real estate watchdog on Thursday denied reports it had received a letter signed by 300 real estate investors voicing their concern over the fate of their investment.

It was claimed that the Dubai Property Investors Group, made up of more than 300 local and international investors, lawyers and real estate developers, had delivered a petition to the Real Estate Regulatory Authority (RERA).

It reportedly urged the watchdog to clamp down on “fly-by-night developers” who were unable to deliver projects amid tightening liquidity and project financing, even though they’ve taken down payments from investors.

But Marwan bin Ghalita, CEO of RERA, branded the petition story, published earlier this week by newswire Zawya Dow Jones, as “absolutely untrue”.

“Personally, I did neither receive a letter of this kind nor any call from the said news website or other,” he said in comments published by news agency WAM.

He added: “Maintaining a well-regulated market that provides protection to all stakeholders is one of our top priorities.”

He claimed that RERA had, since its creation about one year ago, been taking tremendous efforts to regulate the real estate sector by issuing flexible regulations with the highest possible level of transparency.

“Loss of investor’s rights is a red line…it has not happened and it will never happen in Dubai real estate market…RERA has completed registration of developers and brokers at its records to preserve their rights,” he added.

“We understand the feelings of worry resulted from the impact of the global financial crisis but we are against the unjustifiable panic, exaggeration and hitting under the belt by some for the sake of making illegitimate ends.”

He appealed to investors not to hesitate in calling RERA to know the update of any project and stressed that RERA would never allow developers to breach real estate laws, especially the escrow account system.

___________________________________________________________

For our readers:

Links to the Group who started the  Pettion in January 2009

http://groups.google.com/group/dubai-property-investors/browse_thread/thread/8efbb7983955fc97?hl=en

The Letter of the Petition to Marwan bin Ghalita RERA Dubai

http://dubai-property-investors.googlegroups.com/web/The+Petition144.pdf?hl=en&gda=bIHji0UAAABCDKK3M95qOHhW6MrAvHpOfz2RH571rD459OcQ3HKxoj-z-44yj33cbUGq43XpXhMcn8WIbWh5zqeDKtDBmq67Gu1iLHeqhw4ZZRj3RjJ_-A

 

 

 

 

An Example of : The differenence between PR and Reality – 5 Towers Jumeirah Business Centres will be delivered in September 2009 ?????

Jumeirah Business Centre 1 , Developer Al Fajer Properties  was launched Dezember 2005. Sold within a few weeks after the launch, said by the company. The completion of this Office Tower was announced first for end 2007 , after this end 2008 and now end….. of year ……… ???

The History between PR and Reality show this pictures:

Happy going ? …. 2006  

 

 

 

 

 

 

 

Construction Status of Jumeirah Business Centre 1,launched in December 2005,  Plot G2, Jumeirah Lake Towers, Al Fajer Properties 

 

 

Jumeirah Business Centre  1 by Al Fajer Properties Construction Status in May 2007

 

 

 

Panorama of February 2009 shows that the Towers around Jumeirah Business  Centre 1( those Towers around also launched in 2005) are still ready.

The completion of the Jumeirah Business Centre 1, the first ever launched Tower of Al Fajer Properties is…………. ??????????

Latest interview , February 2009,with the project Manager , construction company, for Al Fajer Properties:

o3. Feb. 2009 7days.ae  

 http://www.7days.ae/storydetails.php?id=73328%20%20%20%20&page=local%20news&title=Riding%20out

………“[The atmosphere in construction] is a bit depressed, but I think Dubai and the UAE in general is much better off in general than the rest of the world,” said Andre van Schalkwyk of Al Ahmadiah Contracting and Trading (AAC), who is site manager of Al Fajer Properties’ Jumeirah Business Centre.

He added however, that his workers are more confident of their position, as he believes AAC will outlive the downturn.

“The workers are not anxious, AAC has a very stable working environment and we tend not to over extend ourselves, which makes it much easier to get through downturns, particularly of this magnitude. I think we’re a lot better off than a lot of other companies,” he said.
Van Schalkwyk has been working in construction in Dubai for six years and has always found it challenging.
“[Challenges] are very simple – usually time and Dubai has a knack for changing things very suddenly!”
“It’s the changing environment that is your biggest challenge in the whole construction industry,” he said.

His current development with Al Fajer Properties is the largest he has been involved with since coming to Dubai, although he has been part of big projects such as Ibn Battuta Mall.
Jumeirah Business Centre is a group of five high-rise office buildings in the Jumeirah Lakes Towers development, which are scheduled to be delivered this September.

“The biggest challenge [with this project] is having to do five towers running exactly on the same timeframe, while not being located on the same plot. They’re in the same area but not on the same plot, that is a serious challenge, because projects are usually phased,” van Schalkwyk said.
Back when the centre got started, he also had to deal with the cement shortage, which he said affected them “quite seriously”.However, he is “fairly confident” of reaching the September deadline for the new development.
“After His Highness Sheikh Maktoum bin Hasher Al Maktoum came on board, it changed the whole management structure of the Al Fajer Group and we’re now managing to accelerate the project quite dramatically. We’re actually doing very well – we’re running slabs at around six, sometimes five, working days cycles,” he said.
When Sheikh Maktoum became president of Al Fajer Properties (AFP) in March last year, workers were working days and knocking off at night, but now construction takes place round the clock with the workers doing shiftwork in order to meet the delivery date.

In fact, a lot of changes have taken place at AFP so that it can streamline its business and meet its obligations.
Joseph Paul, finance manager at AFP, told 7DAYS that a “planning and financial restructuring” had taken place last March, which resulted in the entire land bank of the company being disposed of by the middle of last year.
“[This] has turned out to be an excellent decision, keeping in view the current drastic devaluation of land,” he said.
“Because of apt and timely decisions, AFP is still in a robust position to operate with zero debt, even in this worst scenario of world economic recession.”

Van Schalkwyk also sees the upside of downturn, particularly for real estate and construction.
“I think there will be a lot more stability and sense in the market. My personal belief is that the downturn at the moment is a bit of a blessing in disguise – it will stabilise the market and I believe we will get a much more healthy growth afterwards,” he said.

And despite the myriad announcements of job cuts in the sector, he feels construction won’t stay down for long.
“I think in the next two to three years, the workforce will shrink overall – but then it will grow again,” he said.

Investors in a dilemma – Aspire Real Estate is handing over his company`s project Jehaan to a third party

http://www.zawya.com/story.cfm/sidGN_31012009_10280558/UAE%3A%20Investors%20In%20Dilemma%20As%20Jehaan%20Project%20Changes%20Hands

Saturday, Jan 31, 2009

Gulf News

 

Dubai: Owner and chairman of property developer Aspire Real Estate , Harry Kantaria, is handing over his company’s Dh530 million Jehaan project to a third party.

Kantaria told investors that he has sold the Jehaan project, which has been beset with problems.

He owes an undisclosed sum to investors in refunds, according to people who bought units in the project.

“One investor heard that Harry has sold the project to a third party investor. So I texted Harry and he confirmed the same to me,” one investor told Gulf News. Kantaria later confirmed this to Gulf News on Thursday.

“The project is in the process of being handed over to another party who has shown keen interest and has also met the land department regarding the same,” Kantaria said in an email.

While the details have yet to be ironed out, the handover will hopefully spell good news for the project’s patient investors who have been battling with Kantaria for months over promised refunds.

They have been requesting refunds for Jehaan in Jumeirah Village South which was supposed to be ready by January 2009 but construction hasn’t even started. Some investors have even paid in full and yet received no contract. And genuine refunds have been scarce, investors said.

However, those who did receive their money back found that the cheques bounced and one investor said she was informed by Kantaria’s bank that there is no money in his account.

“The man at the bank told me that his account exists but there is no money,” the investor said.

Kantaria told Gulf News back in December that the project’s escrow account was set to be in place by January.

Calls made to the Aspire  offices went unanswered.

original published GulfNews

Business Partner of Al Fajer Properties – Chairman Dynasty Zarooni arrested in Dubai

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The interview mysteriously disappeared from Arabian Business December 13 2008

found in a comment:

http://www.revu.nl/12737 and http://www.skyscrapercity.com/showthread.php?p=29679964

Interwiew can be read here:

http://fraudconstructions.wordpress.com/about/

 

Taking over Niki Lauda
by Jamie Stewart

Saturday, 13 December 2008

 

The Niki Lauda Twin Towers project in Business Bay has run into problems that have resulted in claims and counter-claims from developers
ACI Real Estate and Define Properties, The Real Estate Regulatory Agency (RERA), and anxious investors. With Define Properties unavailable for
response despite repeated attempts to get in touch, ACI projects director Joerg Grunwald talks about the future of the project to Jamie Stewart in an exclusive interview.

Can you make clear the roles of ACI and Define Properties with regard to the Niki Lauda project?It’s a development from Define Properties. ACI had bought the entire project – the land – and sold it. The responsibility for construction lied on Define. But we saw that Define was struggling in the process of doing the construction and the site had been idle for more than two months. This is what concerned us and our investors. They wanted to know the situation. Until now we have had to refer back to Define as they were the developers but now we have been forced to involve ourselves more.

 

There’s a completely new reorganisation taking place as we speak. Define will be in combination with ACI together. ACI will be the vendor, and will be involved in the construction and the development itself.

What was the nature of the problems that Define ran into?

Financial problems. They could no longer afford to pay contractors.

When did you realise Define was in trouble?

It became clear two weeks ago. That’s when we decided to take action.

So what is the current construction status of the project?

In the previous plans the foundation used a traditional piling system which has now been changed to a raft foundation. Define has produced a third party survey as is obligatory for the approvals for a raft foundation. That has been done and the results were positive so a raft foundation will take place in due course.

ACI has identified the construction company for the same (to be named in mid-December) which will also do not only the construction but also the raft. The contracts will be signed in due course. Mid-December will be very exciting for us and also for our investors.

International Foundation Group (IFG) says it is owed US $680,000 (AED2.5 million). Will ACI or Define be paying this?

That and all open invoices that have been accrued over the last month will be settled either through Define or ACI or a newly formed company which I cannot disclose details of as yet.

Will this new company be a joint venture between yourselves and Define?

Most probably yes.

Investors have expressed concern about the whereabouts of monies paid to date. Is the money being held in an ESCROW account in line with RERA Law 8 2007 (concerning guarantee accounts of real estate developments in Dubai)?

Yes.

100% of it?

One hundred percent of our obligations for the entire building of Nikki Lauda is. That is clearly in our existing contract with Define Properties with the approvals from RERA with the certain conditions of this contract also fully approved by RERA. So the investor’s money is safe in the ESCROW accounts.

To reiterate, 100% of it?

I cannot comment on how many funds have fully gone to the ESCROW accounts. I believe some percentages were taken out for advertisement, for admin and as such but all that goes along with the regulations of RERA law no 8.

RERA Law 8 says that the money has to be used to pay the construction costs, such as the money owed to IFG. So if the money is there, why can’t IFG be paid out of that account?

This is a subject that we must clear up. Why have they not been paid? Money has been paid into the ESCROW account from our side. This is clearly recoverable. Why they have not been paid so far is under investigation but nevertheless, whatever it takes, all debts to third parties within the field of the construction will be paid off in full.

A lawyer representing the investors has said there is a clause in the contract between ACI and Define that says ACI is entitled to 40% of all investor’s money and that Define retains the other 60%, and that ACI have a letter from RERA which confirms and allows this agreement, and allows it to withdraw its premium at any time. Is that accurate?

Yes that is correct. Whatever contractual terms we agreed on with Define have all been approved by RERA.

Is this agreement in violation of RERA Law 8 2007?

RERA’s Law 8 has been changed various times over the last month. With amendments, new clauses and so forth. We just took advantage of the possibilities of a contract that we entered with Define Properties which are in line with the regulations.

Have the regulations changed since you signed the contract?

In various aspects yes. With the retention of monies; with the amount of monies to be withdrawn from the ESCROW account for certain purposes; and others with the termination clauses and so forth. Many times. But we are always in line with those.

But whatever it takes and whatever clauses are to be obeyed and followed we saw that the construction stalled and this is not acceptable for us because it is our reputation. Our name and our brand stands behind it. We take it seriously and that is the reason why we have now initiated this transition of Define Properties in combination with ACI to continue the construction immediately.

Did ACI and Define approach RERA to have this share clause put into the contract?

Frankly speaking the percentages of what has been withdrawn or was legally allowed to be withdrawn I cannot comment on. I am not in the finance department – I am director of projects and my concern is to keep things going.

Will ACI cancel any projects?

No.

Have you taken over all of Define’s projects, such as Define Essence?

That will be revealed in a press release in mid-December.

Can you estimate the new construction timetable for Niki Lauda Twin Towers?

As a rough calculation, raft foundations will commence very soon and take about four months, then basements and super construction will take around 15 months. So 19 months in total. Detailed figures will be given once we have signed the contracts with the new company.

Do you have a message for those who have invested in the Niki Lauda Twin Towers?
We are doing our best to raise the trust and confidence of our investors despite these difficult times. We see massive lay offs from other developers, other mergers, and so forth. We are propagating confidence and we will show that we fulfill and deliver what we promise.

We have not been able to get in touch with Define Properties. Have all the staff been told to go home until this has cleared up?

Yes that is true. Rest assured that things will commence in a professional way now. We will do our best to safeguard the interests of other Define clients as well. From those Define projects which are proceeding and where sales have already commenced and clients are to be honoured with their contracts we will also honour that. Later this month – the picture will be clear

Update – Niki Lauda Tower Define Properties – ACI Real Estate Dubai

http://fraudconstructions.wordpress.com/about/

original translated by google:

http://translate.google.com/translate?sourceid=navclient&hl=en&u=http%3a%2f%2fwww%2erevu%2enl%2f12737%2eProjectontwikkelaar%5fwankelt%5fna%5fvertrek%5fMalika

from

http://www.revu.nl/12737.Projectontwikkelaar_wankelt_na_vertrek_Malika

 

Ex-spionne Malika K has not yet gone to Define Properties of Dubai from the developer is in heavy financial weather brings.
                                               The German developer ACI Real Estate has taken over Define the activities of the contractor company IFG can not pay and built together with the Niki Lauda Twin Towers, an office complex named after the racing legend. 

 

 

 

 

 

 

Three investors who have money in the project have put a lawyer on ACI.

Farzad Farshidmehr suspect that there is no more money in the trust account Define state, so he told Arabian Business.

According to ACI’s financial situation is unclear.

Supervisor Real Estate Regulatory Agency (Rera) launched an inquiry into the company because the regulations would be implemented with feet.

ACI was the original owner of the project, but did the activities of Niki Lauda Towers Properties, the holding Define Properties Dubai of Tarek Kandil.

Even in July claimed the company had a working capital of 500 million Dirham purpose, and would have purchased land for construction valued at 1.7 billion Dirham. almost all funds governed by an Egyptian dealer who they already knew. Malika was suspended several months ago and ultimately, if left in each case her boss know by email, fired.

For example, the construction of Palm Deira, the third raised island in the shape of a palm tree off the coast of Dubai, suspended. Projectontwikkelaar Nakheel heeft vijfhonderd mensen op straat gezet. Property developer Nakheel has put five hundred people on the street.

In the matter around her child Malika has also this week won an important battle.

The multiple family of the Court in Amsterdam has ruled that the Malika monarchical authority will carry on her son. The father, Mohammed B., is a trace since he escaped the country after an alleged robbery at his reiswinkel.

The childprotection in May had the authority granted to him.

In the documents parents are strongly, with serious accusation on both sides. For the court is “the accuracy of their statements not to fix.”

Jan Libbenga

The Times of Flipper over ? Ouf! That’s pretty gloomy

Reassuring investors during disputes is paramount

http://www.arabianbusiness.com/540868-reassuring-investors-during-disputes-is-paramount

………And it’s during these uncertain times that one would hope that established authorities and regulatory bodies are there for support and guidance.

The Government of Dubai has done a sterling job in guaranteeing bank deposits across the Emirate, and government-controlled developer Emaar Properties has been pro-active in attempting to stimulate the stuttering residential sales market.

In fact, rather than behaving like a skittish kitten in a roomful of barking dogs, government agencies in the Emirates have demonstrated remarkable aggressiveness to deal with the problem.

But legal wrangles, such as that what is brewing between prominent developers ACI Real Estate and Define Properties and Dubai’s Real Estate Regulatory Agency (Rera), has left a bitter aftertaste in the mouths of would-be investors in the Niki Lauda Twin Towers dispute.
…………………….

http://www.arabianbusiness.com/540868-reassuring-investors-during-disputes-is-paramount

The Times of Flippers are over ?

Once ACI Robin Lohman said in an interview:

“It is simple. We develop and we flip. We make people money”

http://www.arabianbusiness.com/505737-the-brand-master

comments about ACI:

http://www.skyscrapercity.com/showthread.php?t=538159&page=4

German Developer ACI Real Estate Dubai under investigation from RERA Dubai

Sunday, December 14, 2008
ACI Real Estate Projects Schumacher and Boris Becker delayed as contractor seeks bankruptcy protection – Construction & Industry – ArabianBusiness.com

Also under investigation from RERA Dubai: Niki Lauda Towers – German Developer ACI Real Estate Dubai

http://www.arabianbusiness.com/540840-aci-steps-in-to-save-niki-lauda-twin-towers-project
ACI Real Estate Projects delayed as contractor seeks bankruptcy protection – Construction & Industry – ArabianBusiness.com

The Michael Schumacher Business Avenue and Boris Becker Business Tower projects have been pushed back as the South Korean firm hired to build them has filed for protection from bankruptcy, Construction Week has learned.Shinsung Engineering and Construction, the South Korea-based contractor building the developments, requested court protection to avoid bankruptcy in South Korea earlier this month.As a result, Michael Schumacher Business Avenue will be delayed by 150 days, and the Boris Becker Business Tower will be delayed by 60 days, according to Joerg Grunwald, director of projects at ACI, developer of both projectshttp://www.arabianbusiness.com/505737-the-brand-master

 

and

http://dubai7stars.blogspot.com/2008/09/new-property-law-number-13-of-2008.html

and

ACI steps in to save Niki Lauda Twin Towers project

http://www.arabianbusiness.com/540840-aci-steps-in-to-save-niki-lauda-twin-towers-project

What is Law No. 8 Dubai Lands Department Government of Dubai

http://www.dubailand.gov.ae/ld_website/pdfs/trust_law_eng.pdf

UAE: Delayed, Downsized or Scrapped!

UAE: Delayed, Downsized or Scrapped!

05 December 2008Dubai -

Several major construction projects in Dubai have been delayed while others could be cancelled altogether, as the credit crisis forces developers to reconsider budgets.

Announcements that Nakheel Trump International Hotel and Tower and Meraas’ Jumeirah Gardens project are to be postponed come after months of speculation about what effects the global recession would have on the construction industry.
“I think a number of development projects have been put on hold rather than cancelled altogether,” said Ronald Hinchey, resident partner at property consultants Cluttons.

“I think the authorities will take steps to inject liquidity into the market, which is what this problem has been caused by in the first place.”

Hinchley added that off-plan residential developments, especially in areas such as Jumeirah Lake Towers and the Marina, were especially vulnerable to cancellation.

Those which were in the process of being built stood a much greater chance of being completed, he pointed out. A government seminar will be hosted by Minister of Public Works Shaikh Hamdan bin Mubarak Al Nahyan on December 24 to discuss the implications of the financial crisis on the construction sector.

The industry accounts for 20 per cent of the UAE economy and represents the major thrust of the initiative to diversify the economy away from oil.

However, according to a report by Al Mal Capital, growth in the industry will slow from 20 per cent to 15 per cent next year, and 13 per cent by 2010.
But these problems may not have been unforeseen.

Shortly after the announcement of the Dh350 billion Jumeirah Gardens at Cityscape in October, investment bank EFG Hermes wrote in a briefing note: “While these projects received a lot of attention due to their scale, we believe their timing cannot be considered to be ideal given the reduced appetite for new projects as a result of the global crisis.

“Moreover, the tighter liquidity picture raises the question of funding, which was not particularly addressed.”

Khaleej Times took a closer look at a few of the major projects here which have been delayed, downsized or could be cancelled amid the new climate.
Construction Company Could Lay Off 5,000 Workers

DUBAI – Up to 5,000 jobs could be cut in a Dubai-based construction firm, a senior source in the company said.

In addition, at least three major projects run by the company have been cancelled, as well as a number of other smaller projects. The job cut would reflect a 10 per cent cut in the companyís staff which, as one of the Middle Eastís largest construction companies, has nearly 50,000 workers.

The senior official, who spoke on condition of anonymity, said that uncertainty had gripped the workforce.

Up to 150 jobs have already been lost in one project, and the work force is also being reduced in the other projects, the source said.
A new wave of job cuts was expected around December 10, he added.
“I’ve been working for the company for less than a year and it could be a case of last in, first out”, he said, adding that both senior and lower levels of the workforce were being affected.

“Banks are tightening lending, so some developers are unable to pay for the construction costs and jobs are being cancelled,” he said.

An official spokesman for the company was unavailable for comment at the time of going to the Press.

Jumeirah Gardens Announced at September’s Cityscape exhibition, Jumeirah Gardens promised to be one of the largest developments in Dubai’s history with a cost-estimate of Dh350 billion.
The timing of the development, which covers residential districts as well as the kilometre-high ‘One Dubai’ tower, was questioned shortly after its announcement.
Despite doing away with some of the streets in Satwa, unconfirmed reports suggest that the project may have already been scrapped.
Several senior staff at project developer Meraas have been laid off.

“In a worldwide economic downturn, any corporate must analyse the market and ensure that its business strategy is aligned to make the most of new opportunities,” an official spokesman for the company said.

Porto Dubai It was announced as a residential offshore development that would offer direct views of the Burj Al Arab from the villas built on ‘tiers’ cut into the island. However, the current design of Porto Dubai is already a smaller one from that originally conceived by consultants two years ago.
Asteco Property Management acted as an adviser on the initial stage of the project but stopped work after it ‘changed size and shape’, a source said.

Industry insiders claim that construction at the site may have halted altogether and that 200 staff have been cut from the parent group.

However, the CEO of Zabeel Properties, Robert Norton, who spoke to Khaleej Times denied both accusations, adding that views of construction site have just been obscured by a huge mound of sand.The Palms Nakheel’s Palm Deira is the largest of the three Palm developments and is expected to house one million people. However last month, the developer announced that dredging work was to be scaled back on the project.

Frank Jeuniaux, area manager, of Belgium-based Dredging International, said he expects contracts to be much less readily available in future.

Infrastructural work on parts of Palm Jebel Ali which are not due to be populated until 2011 and 2012 will also be scaled back.

Delays would also occur on Palm Jumeirah at Frond N villas and Gateway Towers.
A spokeswoman for Nakheel said: “Work on Palm Deira is currently being directed to complete reclamation in areas closest to the shore, so that once these areas are complete we can undertake progressive land sales and development.”Trump International Hotel and Towers Located on the trunk of the Palm Jumeirah, the 62-floor, split tower development was expected to offer access to a private beach and yacht club. However last week officials announced that the joint project between the Trump Organisation and Nakheelhad been delayed.

Bloomberg reported on Monday that Nakheel had promised to cover all costs for the Al Habtoor Leighton , whose subsidiary Al Habtoor Engineering is building the project.

“Nakheel is delaying long-dated infrastructure work on some of our projects in order to ensure that our business model is aligned to meet market demand,” a spokesman for the company said. “We have the responsibility to adjust our short term business plans to accommodate the current global environment.”

Hydropolis Originally billed to be completed in 2009, the Jules Verne-inspired underwater hotel was about being as extravagant as they come.
The architectural marvel included a giant retracting roof that would enable open sky events to take place in the main ballroom.

The project, which is the brainchild of developer Crescent Hydropolis, was several years ago valued at Dh1.6 billion and construction began in the summer of 2005.
However, a source at SIBC Industrial Building Consultants, who were initially charge of managing the project, said that the company had not heard anything from the developer for a while.
“I’m pretty sure it won’t be completed by 2009,” he said.

CEO of Crescent Hydropolis, Uwe Hohmann said: “I cannot disclose anything at present. We will meet with our shareholders next week and a decision will be made then.”Arabian Canal Billed as the world’s longest man-made canal, the Limitless project is anticipated to stretch 80km from Dubai Marina to Palm Jebel Ali and includes a variety of residential and commercial developments.

However, the Dubai World company announced that it was reviewing the pace of development of the project with respect to market conditions. The project is a two-stage development expected to be completed by 2025, and a spokeswoman for the company said the first stage is continuing at a ‘torrid’ pace.
It is believed that any delay would be over when subsequent stages would be completed.

Reports have suggested that the company had put on hold the selling of property that would come as a result of the development, but a spokeswoman denied that anything had been formally put up for sale.

martin@khaleejtimes.com

By Martin Croucher
© Khaleej Times 2008

Dubai Property poker

original published:

ArabianBusiness

http://www.arabianbusiness.com/540596-property-poker

by Rob Corder This email address is being protected from spam bots, you need Javascript enabled to view it  on Tuesday, 09 December 2008

For what some might call semi-professional property speculators and others might call amateur gamblers, the game is up.

Flipping properties – the business of buying villas and apartments off-plan and then selling them before they are built – has made millions for the professionals, but is about to cost the amateurs their shirts.

The problem, as with most gambling, is that it becomes addictive and destructive. The value of money changes as you win it. The descent into dangerous addiction for many of these flippers has gone something like this:

They took a punt on their first property around three-four years ago. The earliest property pioneers, who might have bought a luxury apartment off-plan on Palm Island for less than the price of a granny flat in their home country, watched the value of their investment double, treble, quadruple over the first two years.

These were typically high net worth individuals with diversified portfolios who were well-judged in taking a punt on embryonic real estate laws and a visionary development.

Word spread that easy money was being made and the amateurs poured into the market. Conditions were perfect: the market was rising fast; disposable incomes were high thanks to relatively cheap living costs at the time (yes, they really were low four years ago); and banks were ready to lend money to anybody with a reasonable salary certificate.

A gambler would probably have started relatively small, perhaps a modest apartment in Jumeirah Beach Residence. But when that property doubled in value before the tower’s foundations were laid they borrowed again from the bank using the paper profits from their first apartment as collateral.

The banks were even more willing to lend because the punter had a tangible asset as security. Now the player could double-up.

A year or two later, nerves began to set in about the Dubai property market. There was a lot of talk of bubbles bursting and it seemed a good time to cash in those chips. A lot of this profit taking went on at the beginning of 2008, heralding the first signs of a correction.

But the gambler was now hooked. The original investment of 500,000 dirhams had been turned into five million dirhams, and the money was burning a hole in his pocket.

The Dubai market looked like cooling a little, but Abu Dhabi was still red hot. The time for the big play had arrived. Five million dirhams used as a down payment on off-plan property in Abu Dhabi meant the same trick he pulled a few years earlier in Dubai could be repeated in the UAE capital.

If Abu Dhabi followed the same trajectory as Dubai, reasoned the gambler, five million could be turned into 20 million or more.

Then September hit. With hindsight we might now call it the Ramadan Rout. Credit markets seized, making it impossible for property developers to find finance for future projects and individuals unable to borrow money for a mortgage or even a rent cheque.

Confidence evaporated overnight. It was impossible to track the rate property prices were falling because no transactions were taking place. Worst affected was the off-plan market because nobody wanted to buy property that might be worth less when built than it was on paper.

The loss of confidence was not contained to Dubai. Abu Dhabi was hit too. The gambler was suddenly in a cold sweat. When the developer building his properties completes the construction, he will have to find a mortgage to cover the outstanding balance of the price he paid.

But the banks are no longer lending. The properties could already be worth less than he paid for them and the banks do not want to take the risk of lending against a depreciating asset.

If he can’t secure a mortgage, the gambler is sunk and the properties will be repossessed by the developer. The only remaining hope is to sell at a fire sale price before the building is completed.

This is the picture that is being repeated across half-built real estate developments throughout the GCC, and it explains why prices have fallen so far and so fast. Thousands of speculators have to dump their properties before they are completed.

There is no short term fix that will reverse the trend. There is only a hope that prices will eventually fall so far that bottom-feeding investors return to snap up bargains.

The irony is that the same professional property dealers that made a killing on the first off-plan developments will be back to make another killing at the end.

Between times, the amateur gamblers have been on an exhilarating ride, but now many are left to rue one big bet too many.

 

 

Dubai Immobilien – Krise heilt die Scheichs vom Goessenwahn

original published: http://www.spiegel.de/ Germany

09. Dezember 2008, 11:02 Uhr
ENDE DES IMMOBILIENBOOMS

Krise heilt die Scheichs vom Größenwahn

Von Bernhard Zand

Aus die Sause: In nur zehn Jahren hat sich Dubai von einer kleinen Hafenstadt zur Immobilienmetropole gewandelt. Doch damit ist jetzt Schluss – die Finanzkrise erreicht auch die Scheichs und zerstört ihre Träume von Wolkenkratzern und Kunstinseln.

Dubai – Plötzlich waren sie da. Von ihren teuren Villen aus konnten die Bewohner von Jumeirah Beach die acht Baggerschiffe sehen, die Tag und Nacht buddelten, Felsbrocken im Meer versenkten und Sandfontänen in den Himmel steigen ließen. Und das, obwohl die Kunst-Archipele “The Palm”, “The World” und “The Universe” alle weitab vom vornehmen Jumeirah liegen. Was also wurde hier nun wieder aufgeschüttet?

Auf einer Immobilienmesse Anfang Oktober ließ der Scheich von Dubai das Geheimnis lüften: Ein neuer Stadtteil entstehe, genannt Jumeirah Gardens, ein “Venedig am Golf”, eine Fantasiestadt aus Inseln, Wolkenkratzern, Parks und künstlichen Kanälen. Halb an Land, halb ins Meer hinaus gebaut. 70 Milliarden Euro teuer.

Was waren Anfang Oktober schon 70 Milliarden Euro in Dubai?

Anfang November verschwanden die Bagger-Schiffe so plötzlich, wie sie gekommen waren. Wieder rätselten die Strandbewohner – bis vorige Woche die staatliche Entwicklungsfirma Meraas mit einem Geständnis herausrückte, das in Dubai noch von keinem Bauherrn zu hören war: Die Jumeirah Gardens werden “einer Revision unterzogen”, Teile des Projektes wohl “verschoben”. Mit einem erst im Oktober angekündigten 1000-Meter-Wolkenkratzer, einem zusammen mit dem US-Tycoon Donald Trump zu errichtenden Hotelkomplex und einem ganzen Areal von Luxusvillen auf der Palmeninsel werde es vorläufig nichts, gab der Entwickler Nakheel zu. Und kündigte sogleich 500 seiner 3300 Angestellten.

Wolkenkratzer aus Petrodollars

Tatsächlich geht in Dubai ein Immobilienboom zu Ende, wie ihn die Welt noch nicht gesehen hat. In gut zehn Jahren ist aus einer kleinen Stadt, die neben einem Hafen und ein paar Fünf-Sterne-Hotels lediglich einen geschäftigen Flughafen aufweisen konnte, eine Monster-Kommune geworden, die sich mit amerikanischen Millionenstädten messen kann. Die Scheichs bauten und ließen bauen, als ginge jeden Augenblick der Weltvorrat an Zement, Stahl und Glas zu Ende.

Jetzt aber ist es der Weltvorrat an Geld, der zu Ende geht: Dubai ist hoch verschuldet, und die Finanzkrise trifft das Emirat mit einer Wucht, die vor ein paar Wochen noch keiner wahrhaben wollte.

Denn die Wolkenkratzer von Dubai sind mit Petrodollars gewachsen. Nicht mit denen, die das kleine Emirat für die paar tausend Barrel bekommt, die es selbst fördert. Sondern mit den Milliarden, die im Nachbar-Emirat Abu Dhabi, in Riad und sonst am Golf eingenommen, dort aber nicht angelegt wurden. Dubai hatte, im Gegensatz zu diesen Städten, eine Vision zu bieten, in die reiche Araber gern investierten: ein modernes, schrilles und überdrehtes Touristen-, Bank- und Handelszentrum, das es an Prestige und Lebensqualität mit Hongkong, Singapur und den großen europäischen Touristenstädten aufnehmen kann.

Deshalb die Sucht nach Superlativen, daher die klimatisierten Swimmingpools, die Ski- und Eislaufhallen in der Wüste – und daher auch die Schadenfreude, mit der mancher nun der Stadt das Totenglöckchen läutet: “Die Party ist vorbei”, titelte vorige Woche die “Sunday Times” – nach er rauschenden Eröffnungsfeier für das Hotel “Atlantis”, bei der 20 Millionen Dollar verpulvert wurden, unter anderem für ein gigantisches Feuerwerk.

Dabei haben die Immobilienhändler von Dubai nur das getan, was die Scheichs aus Rücksicht auf islamisches Recht bis heute nicht erlauben: Sie haben aus dem Markt ein riesiges Spielcasino gemacht. Wer noch im Oktober auf der Baumesse “Cityscape Dubai” nach einer einzelnen Wohnung fragte, die er selbst kaufen, finanzieren und bewohnen wollte, der wurde lächelnd an einen jüngeren Kollegen weitergereicht.

Die Meister ihrer Branche verkauften lieber etagen-, türme-, wohnanlagenweise – und zwar Gebäude, die nur auf dem Papier bestanden. Ihre Kundschaft waren Spekulanten, die sich im sogenannten Quick-Flip übten: Fünf oder zehn Prozent Anzahlung zur Grundsteinlegung, und dann so schnell und profitabel wie möglich raus aus dem Vertrag. Das Problem: Der Bau-Entwickler verließ sich vielfach auf das Geld der Spekulanten, die wiederum hatten sich ihr Geld oft billig geliehen – ebenso wie die zweiten, dritten und vierten Käufer in diesem Pyramidenspiel, die alle auf den Letzten in der Reihe hofften, der Dubai so unwiderstehlich findet, dass er am Ende jede Miete zahlt.

Banken verschenkten zuletzt Kredite

Die Profite, die damit erzielt wurden, waren beträchtlich: Wer 2003 etwa 500.000 Euro für eine Villa auf der Palmeninsel zahlte, wurde sie diesen Sommer für drei Millionen los. Die Mieten, stets ein Jahr im Voraus bezahlt, waren astronomisch. Seit Oktober aber gehen die Preise drastisch zurück: Mehr als zwei Millionen Euro, sagt der Immobilienhändler Josef Kleindienst, seien die Palmen-Villen im Moment nicht wert. Eine Prognose, wie tief es noch bergab gehen könnte, wagt er nicht. Und wer wie tief in der Kreide steht, weiß keiner – denn eine Kreditaufsicht, die ihren Namen verdient, nimmt dieser Tage erst ihre Arbeit auf.

Dasselbe gilt auch für die Banken, die Kredite zuletzt geradezu verschenkten – bei einer Inflation von zwölf Prozent und Zinsen von etwa neun Prozent. Inzwischen aber sind sie furchtbar knauserig: Wer früher zehn Prozent auf eine Wohnung anzahlte und sich den Rest pumpte, zahlt heute 50 Prozent an und kriegt, wenn er Glück hat, den Rest finanziert.

Vor allem aber wusste bis vor kurzem keiner, wie viele Schulden sich bei der Regierung selbst angehäuft hatten – was zu wildesten Gerüchten führte: Das Hotel Burj al-Arab, das Wahrzeichen Dubais, sei längst versilbert. Der Hafenbetreiber Dubai Ports World, ja selbst die Fluggesellschaft Emirates Airlines stehe vor dem Verkauf. Bis vor zwei Wochen Mohammed al-Abbar, Vertrauter des Scheichs und Chef des halbstaatlichen Immobiliengiganten Emaar, vor die Presse trat und, zur Überraschung seines Publikums, konkrete Zahlen nannte.

Die Regierung sei mit zehn Milliarden Dollar verschuldet, die von ihr kontrollierten Unternehmen mit noch einmal 70 Milliarden. Dem aber stünden Vermögenswerte von zusammen 350 Milliarden Dollar gegenüber, weshalb zur Beunruhigung kein Anlass sei. Die Geschäftsleute am Dubai Creek hörten die Botschaft wohl – was diese Zahlen aber wert sind, kann im Moment noch keiner sagen. Es wäre schließlich das erste Mal, dass die Scheichs sich wirklich in die Bankauszüge schauen lassen.

Aber tatsächlich könnte es dem Emirat gelingen, die Weltfinanzkrise zur längst überfälligen Bereinigung seines Immobilienmarktes zu nutzen. Denn vieles spricht noch immer für den Standort am Golf – trotz der geplatzten Blase.

Da sind zunächst die sechs anderen Emirate, mit denen Dubai in einem Staat verbunden ist. Vor allem mit Abu Dhabi hat Dubai eine grundsätzlich sinnvolle Arbeitsteilung: Dubai ist das Dienstleistungszentrum, über das Länder wie der Irak, Iran und Saudi-Arabien noch immer einen großen Teil ihres Handels und ihrer Finanzgeschäfte abwickeln – während das Nachbar-Emirat auf Ölreserven sitzt, die größer als die von Russland oder Venezuela sind. “Abu Dhabi hat kein Interesse daran, dass Dubai untergeht”, sagt denn auch Eckart Woertz vom Gulf Research Centre.

Davon abgesehen ist in den Jahren, in denen Dubai aufstieg und sich – wenn auch auf Pump – als Wirtschaftshauptstadt etablierte, in der gesamten Region so viel Geld verdient worden, dass die Golf-Araber der Weltfinanzkrise noch relativ gelassen ins Auge blicken können. “Wohin mit unseren Ersparnissen?” fragte, deutlich abweichend von den Trends in Europa und den USA, vor drei Wochen das Wirtschaftsmagazin “Arabian Business”. Auf dem Titelbild war ein Bett zu sehen, aus dessen Matratze die Dollarbündel quollen.

“Am Ende läuft in Dubai alles auf eine Frage hinaus”, sagt der Immobilienhändler Kleindienst: “Brauchen wir die Häuser, die wir gebaut haben, oder brauchen wir sie nicht?”

Eine gute Frage. Die 1,6-Millionen-Einwohner-Stadt Dubai, hat die Rating-Agentur Colliers ermittelt, wird 2009 weitere 5,6 Millionen Quadratmeter Bürofläche zur Verfügung haben – genauso viel Shanghai mit seinen 18 Millionen Einwohnern. Allerdings wachsen auch die Emirate: Laut den ersten öffentlichen Zahlen lebten 2004 noch 3,8 Millionen Menschen in dem Golfstaat, heute sind es 6,5 Millionen.

Die meisten Zuwanderer sind nach Dubai gekommen – und brauchen Häuser.

Nakheel cuts staff, delays projects – The National Newspaper

Nakheel cuts staff, delays projects – The National Newspaper

Nakheel has made 500 of its staff redundant as it delays work on major projects including the Trump International Tower and Hotel on Palm Jumeirah, Waterfront, Palm Jebel Ali and The Universe, the company said yesterday.

The decision is another sign of the global economic slowdown affecting the property sector. Banks have tightened lending, prices have dropped and sales have slowed, forcing developers to review their expansion plans.

The job losses make up 15 per cent of Nakheel’s workforce, which now stands at 3,000, and follow at least four years of breakneck hiring.

Nakheel said in a statement that the layoffs were “a responsible action in light of the current global market conditions”.“The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand.”

In another statement, Nakheel said it was delaying long-term infrastructure work on some of its projects.The projects include Frond N villas, Gateway Towers and Trump International Hotel and Tower on Palm Jumeirah.At Waterfront, work on Madinat Al Arab, Venetto, Badra and Canal District is continuing as planned, but other phases will be delayed.

The company has already slowed reclamation work on parts of Palm Deira, the largest of the Palm island trilogy, while the pace of construction on components of Palm Jebel Ali is expected to slow.

Work on The Universe, a collection of reclaimed islands planned to be built between Palm Jumeirah and Palm Deira and launched in January this year, will also be restricted to preliminary engineering studies.

The statement said: “Nakheel is delaying long-dated infrastructure work on some of our projects in order to ensure that our business model is aligned to meet market demand. We have the responsibility to adjust our short-term business plans to accommodate the current global environment.

Work on all other Nakheel projects is ongoing as planned.”

Reclamation on The Universe was intended to begin by the end of this year and negotiations were under way with at least three contractors. The contractors now expect the project to be awarded much later. “We are in talks, but I think the contract will be awarded much later than December,” said one contractor. In the past month, almost 1,000 job losses have been confirmed by developers in Dubai.Damac Properties, the emirate’s largest private developer, laid off 200 of its 8,000-strong workforce, while 180 out of 350 staff at Tameer Holding, another Dubai developer, were told they would lose their jobs by the end of this month. Omniyat Properties also confirmed 69 redundancies from its workforce of 350.“It’s not unusual for companies to downsize during a recession,” said Peter Walichnowski, the chief executive of Omniyat Properties. “Also, if the skill-sets are not required it’s best for people to find other jobs that want and need them at that point in time.”Still, Omniyat plans to boost staff numbers in its customer care and facilities management divisions in time for the completion of projects, three of which will be handed over early next year.“We need to allocate resources into areas of the company that are more appropriate,” said Alex Andarakis, the company’s director of sales and marketing.Recruitment experts said that while there has been a slowdown in Abu Dhabi, redundancies have so far only hit Dubai, but are now trickling down to construction consultancy firms and contractors. According to Duncan Murray, a consultant at Duneden Recruitment, the situation has led to “too many people looking for too few jobs”. “Companies in Dubai are culling people left, right and centre,” he said. “It’s now a case of people not knowing each day whether they’re going to have a job or not.”And as developers and construction firms freeze hiring, recruitment companies are aggressively looking to place applicants in jobs elsewhere in the GCC.“People will just have to go to places like Qatar and Saudi Arabia if they want to work,” said Mr Murray.“It will be a lot harder for families, but people can’t afford to be fussy and they will also need to be more flexible and accept pay cuts.”Mr Murray predicted that it could be early 2010 before companies think about recruiting again.“It will be a difficult 12 months ahead,” he said.agiuffrida@thenational.aebhope@thenational.ae

Builders struggle to get payments – The National Newspaper

Builders struggle to get payments – The National Newspaper

Construction firms in Dubai are struggling to get payments from some developers as major projects stall and further doubt is cast over the feasibility of others.

Meraas Development, a company controlled by the Dubai government, became the latest to announce a review of a major development, the Dh350 billion (US$95.3bn) Jumeirah Gardens City project, in light of the global economic downturn.

It followed an announcement by Nakheel on Sunday that it was delaying work on projects including the Trump International Tower and Hotel on Palm Jumeirah, Waterfront, Palm Jebel Ali and The Universe.

The Jumeirah Gardens City project, which will raze the district of Satwa in Dubai to make way for a number of tall towers, a park and a canal system, was only launched at Dubai’s Cityscape in October.

“We are simply reviewing our business strategy, as well as the phasing and rollout of the Jumeirah Gardens project, to make sure the development proceeds in the most opportune way to meet changing investor needs,” Meraas said.The company said there would be more clarity on the project by the beginning of next year.Contractors including Dutco Balfour Beatty, Samsung Engineering and Construction, Al Habtoor Leighton Group and Murray & Roberts are among those working on Nakheel’s projects.

“We’re still reviewing things at the moment to see where we stand,” said Grahame McCaig, the general manager of Dutco Balfour Beatty. “Getting payment is worse than usual; we’ve really struggled to get paid by a lot of people.

At the moment, the cash issue is far bigger than the workload one.”

Al Habtoor Leighton Group, a joint venture between Australia’s Leighton International and Dubai’s Al Habtoor Engineering, had been working on the Dh2.9bn contract to build the Trump International Hotel and Tower in partnership with Murray & Roberts, a South African construction firm, since July.

The company is trying to recover costs now that the project has been suspended, but said last week’s Dh8.85bn contract win to build Dubai Pearl would help to cushion the blow. It is not yet known when work on Trump Tower will resume. “This is something we’re in discussions about,” said Chris Gordon, the general manager of corporate affairs and strategy at Leighton International. “We’ve been fortunate in that we’ve secured work on other projects, so that should cover things, and we can move staff on to those.”

Mr McCaig added that developers were legally obliged to reimburse contractors for costs incurred, should a contract be cancelled. “They either cover the costs incurred to date, or agree [on] a reasonable cost. It’s an important part of the termination process.”While Samsung Engineering & Construction, a South Korean firm, has not had any of its deals with Nakheel stalled, the company has been experiencing delays in payments on certain jobs.

“We’re getting delays in payment by about two to three weeks now,” said Beejay Kim, a senior manager with Samsung Engineering, which is also building Emaar’s Burj Dubai with Arabtec and BESIX Group.

Samsung Engineering is one of five companies that have been invited to bid for the construction of the kilometre-high tower, which will form part of the Dh140bn Nakheel Harbour & Tower development in Dubai, also launched at Cityscape in October.

Groundwork started earlier this year and is among Nakheel’s projects that are expected to go ahead. agiuffrida@thenational.ae

Negative equity, defaults ‘now a Dubai reality’ – Real Estate – ArabianBusiness.com

Negative equity, defaults ‘now a Dubai reality’ – Real Estate – ArabianBusiness.com

Negative equity and widespread mortgage default is already happening in Dubai, with repossessions also likely, property experts have said.

Banks ramping up interest rates on home loans coupled with falling real estate prices have hit buyers of off-plan property hard as the market cools in the face of dwindling demand due to the global financial crisis.

“The problems of negative equity and mortgage default are now realities in Dubai,” said Matthew Hooton, head of real estate in the Middle East for law firm Ashurst.

Speculators who bought off plan – property yet to be completed – during Dubai’s six year real estate boom are now faced with spiralling mortgage costs as lenders grow increasingly fearful over customers defaulting on payments.

Official figures from HSBC bank published earlier this month showed that the price of top-end apartments fell by as much as 30 percent in Dubai’s downtown DIFC district during October. Experts believe if growing numbers of homeowners fall into negative equity, there will be a rush to sell real estate.

“Where you get real problems in the mortgage market is when you get the double whammy high interest rates making mortgages unaffordable and dropping house prices,” warned Chris Dommett, CEO of mortgage broker John Charcoal’s Dubai office.“That would be exacerbated here because most of the population are not from here. “The incentive to cut and run is greater.

If somebody can’t afford to repay their mortgage and house is worth less than is owed, it is a double incentive to walk away because that person is not walking away from any equity,” he added.

Negative equity – a term synonymous with Britain’s housing crash in the 1990s – is when the value of the property is worth less than the mortgage. Banks in the region are also under fire from leading industry figures over hiking mortgage rates way above the interbank rate or eibor, currently at 4.31 percent, for three months.

Arabian Business revealed last week that banks including HSBC and the UAE’s largest home loan lender Amlak, have hiked interest rates on new mortgages by up to 2 percent and are now charging customers up to 9.75 percent monthly interest.

Ian Albert, regional director at real estate broker Colliers International in Dubai said:

“I object to banks racking up interest rates. It’s excessive. You’ve got this problem where the banks are almost self-defeating themselves. “If I borrow at 8 percent I need to lease my property at 12 percent, the greater my yield increases, the greater the property value is depressed.” Albert predicted that although repossessions will happen it was unclear how banks in the UAE are set up to deal with such a scenario.

Direct gov’t action called for to support property market – Real Estate – ArabianBusiness.com

Direct gov’t action called for to support property market – Real Estate – ArabianBusiness.com

RichVille, a real estate asset management firm, on Wednesday accused authorities in Dubai of not doing enough to support the faltering real estate market.The company, part of Dubai-based conglomerate Tharaa Holding, said in a report that authorities needed to take direct action to revive the market, which saw real estate prices fall four percent between September and October, according to HSBC.

The global financial crisis has hit demand for real estate in Dubai from foreign investors, which make up a large percentage of buyers, while tightening liquidity has made home financing more difficult.

RichVille blamed the downturn in the market on banks, which have tightened lending conditions in recent months despite the UAE central bank making 120 billion dirhams ($32.7 billion) available to the banking sector boost liquidity.“

The report held the banks in Dubai responsible for the inactivity of the real estate market, even though the central bank has taken measures to support the banking sector and the economy, no direct actions have been taken towards the real estate sector…”
RichVille said in a statement.RichVille said Dubai’s Real Estate Regulatory Agency (RERA) had to play a more active role in developing a rescue plan for the market.“

The report… suggested a rescue plan for RERA to play a much needed leading role that surpasses regulating and documenting, to cooperating with the master developers, government bodies, and main investors to develop a rescue plan…,” the firm said.RichVille called on master developers to delay any upcoming payments by six months to avoid default and “panic in the market”.

The Dubai government last week set up a committee to recommend ways to tackle the impact of the financial crisis on the emirate’s economy, including real estate and banks.Mohamed Ali Alabbar, chairman of Emaar Properties and of the new committee, said on Monday Dubai would pull back on its building spree in light of the financial crisis.

Property developers reassessing sales strategies

Property developers reassessing sales strategies

Dubai-based developers are putting sales of their properties on hold until the situation improves in the emirate’s real estate market, prominent developers said yesterday.”We will definitely reassess sales strategies in the light of the current market conditions. Everything is under review now and we have no new plans for the near future,” said Ali Mansour, Project Director, for Nakheel’s Palm Jebel Ali.

“There are no sales on Palm Jebel Ali happening as of now.

The only sales that happened were in the year 2003–2004,” said Mansour.Palm Jebel Ali is the second of the Palm trilogy being developed by Nakheel.

It is located right in the heart of Jebel Ali, close to the Al Maktoum International Airport and the Dubai Waterfront development. So far, Nakheel has sold 52 plots of land in the Crescent A, 504 units of waterhomes and 1,300 villas at development.According to Nakheel, Palm Jebel Ali will feature signature villas, garden villas and also a wide range of luxury apartments, town homes and penthouses.It is expected that around 300,000 people will live on the development.”Palm Jebel Ali has an advantageous location in a totally virgin area of Dubai.
By the time it is completed, the Al Maktoum International Airport would already have become operational.

Three phases of extension at the Jebel Ali Harbour would also be complete when the Palm Jebel Ali is delivered.

There will be some high-end and luxurious components at the Palm Jebel Ali, but the project will also have other components catering to various market segments,” said Mansour.Limitless, too, has not launched the sales of its Arabian Canal project. Ian Rainelan Raine,

Limitless’ Project Director for the Arabian Canal, said: “We will judge when the time is right to start selling. We have registered a huge amount of interest in the Arabian Canal project but we are not registering sales at the moment.”The Arabian Canal will be one of the longest man-made canals. The excavation of the canal will start near the Dubai Marina area and it will flow inland around the planned Al Maktoum International Airport. It will then meet the sea at the outer end of the Palm Jebel Ali.

Dubai Waterfront will be the first phase of the larger Arabian Canal effort. The developer said financing for the first stage of the project has been completed.

Policy review Rufi Real Estate, Dubai-based real estate developer, is revisiting its strategies and has deferred launch of some of its realty projects until the second quarter of 2009.”We were supposed to launch two residential towers in Meydaan and projects in The World, where we have bought three islands. But we have postponed all that for now,” Mehrooz Manzoor Rufi, Director, Rufi Real Estate, told Emirates Business.Rufi is optimistic about real estate prices picking up by the middle of 2009 in the emirate.Pre-sales take care of 40 to 50 per cent of construction cost and so the company need not look for external borrowing options, said Rufi

Dubai reassures creditors amid crisis – The National Newspaper

Dubai reassures creditors amid crisis – The National Newspaper

DUBAI //

As the world enters what appears to be the most formidable downturn since the Great Depression, with tremors being felt in the Gulf, the Dubai Government is reassuring its creditors and introducing measures aimed at supporting the property and financial sectors.
Mohammed Ali Alabbar, a member of the Dubai Executive Council, told an audience at the Dubai International Financial Centre that it was time to address the new economic reality.“We are rationalising our expenditures and consolidating our activities,” he said, adding that the country’s property industry would “see more consolidation, especially with third-party developers, who may be facing some lending difficulties”.

Mr Alabbar, who is also chairman of the emirate’s largest developer, Emaar Properties, said Dubai would be able to handle its debt.“The government can and will meet all obligations going forward,” he said, adding that the emirate had debts of US$10 billion (Dh36.73bn), plus a further $70bn with Dubai-affiliated companies balanced by Government assets of $90bn and assets belonging to state-backed companies of $260bn.
He added that a special advisory council had been established to look at each sector of the economy, in particular the property market. The committee is making recommendations to the rulers and will manage the “current and future supply of new projects on to the market” in a bid to slow the decline of prices. The moves this week to reassure the markets have come after large declines in the stock exchanges, a softening of prices of new homes and a first round of layoffs at many property developers — all developments that would have been unthinkable just six months ago at the height of the property boom.

The most dramatic development for the property market came earlier this week with the announcement by the Government that it would merge two banks and the country’s two largest home finance providers into a rescue vehicle called Emirates Development Bank. The new bank would receive funds from the federal government and become the largest provider of home loans in the country, Mr Alabbar said. A source close to the new bank said the move was the Government’s most comprehensive attempt yet to fight the crisis.

“This is the Government’s message,” the source said.

“We are providing full support to the key businesses.”In the past three months, the Government has pledged Dh120 billion to help banks fill the funding gap created when foreign investors began withdrawing their money from the region this summer. However, bankers have expressed reluctance to re-lend the emergency money to home-loan companies or real estate developers, for fear of exposing themselves further to a rapidly declining property market.
Amlak Finance especially showed signs of strain last week when it announced it would issue no new home loans until it had reviewed its credit policy. Other mortgage lenders have either stopped lending or cut their loan-to-value ratios dramatically, making it difficult for both buyers and speculators — now without any choice but to hold on to their purchases — to get financing. Cash flow at property development companies has all but stopped and distressed buyers have started offering discounts of as much as a third on the resale market.

The impact is already being felt at the biggest companies.

Emaar, whose shares fell 9.5 per cent in trading yesterday, has seen its share price drop by 83.4 per cent since the beginning of the year. Amlak and Tamweel, which have had their shares suspending from trading pending details of the merger, have lost 80.1 and 85.6 per cent since the beginning of the year, respectively.The decision to merge Amlak and Tamweel with Real Estate Bank and Emirates Industrial Bank into Emirates Development Bank is widely seen by analysts as a move to reverse the slide of the property sector by restoring financing for would-be buyers and speculators. However, both the Dubai Financial Market and the Abu Dhabi Index fell yesterday, 5.3 per cent and 3.4 respectively, with the property and finance sectors worst hit, indicating that investors remain sceptical of how effective such measures will be.

The new institution will “really be a strong entity”, Mr Alabbar said. “It means that this country is serious about consolidation during interesting times. This structure will facilitate the lending and move liquidity into sectors needed, especially in real estate.”He added the Government would be “cautious going forward, but will increase flexibility of real estate funding”.This is likely to be just the first in a number of takeovers, with a dramatic restructuring of the market still on the horizon, analysts said.
Sofia el Boury, a banking analyst at Shuaa Capital, said a wave of consolidations was likely in the market.

During downturns, “weak companies become ideal targets for acquisitions by profitable, highly liquid and well-capitalised institutions”, she said.
There is also a growing sense that a push to strengthen the federal union has been sped up in response to the credit crunch. However, Mr Alabbar rejected the suggestion that Abu Dhabi was preparing to bail out Dubai.

“It is not true,” said Mr Alabbar. “Dubai has received no offer either directly or indirectly from Abu Dhabi or any other party on earth,” he said when asked if Dubai’s assets were for sale.*

additional reporting by

Travis Pantinmailto:Pantinbhope@thenational.ae
shamdan@thenational.ae
afoxwell@thenational.ae

Property investors rally to the cause. – The National Newspaper

Property investors rally to the cause. – The National Newspaper

An amendment to a property law in Dubai has brought together a group of angry off-plan buyers who are fearful of losing a third of their investment to developers they believe may not even proceed with construction. According to the new amendment, off-plan buyers wishing to halt their payments have to cancel their contract and forfeit 30 per cent of the total value of the property, instead of only 30 per cent of the money they have paid.

The investors, who formed their group after an online forum on the issue, have yet to see evidence of construction on their projects and fear losing more of their money to developers in the current global slowdown if they continue their payments – but under the new amendment they could lose a third of their properties’ value if they do not. The new administrative circular was issued by the Dubai Land Department on Nov 10 concerning amended Law 13 on the pre-registration of off-plan properties, which was issued in August.

“Many investors have already paid 20 per cent to 50 per cent in projects which haven’t even started, hence they stopped payments in order to avoid further losses caused by possible bankruptcy of the developer,” said Tommy Carlsson, one of the organisers of the Dubai Property Investors group.

“Developers are misusing this interpretation of the law to terminate as many contracts as possible and forfeit our funds instead of finding solutions together with investors.”

Investors fear that developers who already know they cannot proceed with a project will keep the 30 per cent and then later on cancel the project without needing to refund buyers.

The group, which met for the second time on Sunday and is planning to hire a lawyer to represent them, is asking for two things. It suggests that before allowing a developer to cancel contracts, the developer must first submit the audit of its escrow to the Land Department. According to Law 8, developers must audit their accounts, but many of them have not done this yet. “We want developers to prove they have the ability to build,” said Nigel Knight, a co-founder of the group.

Second, contract cancellations should be put on hold if the client has already paid 20 per cent and construction has not started, with the payment plan proceeding only when construction actually starts.“We see that as the responsibility of the Government to make investigations about the developers and find out whom we can trust and who is not OK. We only ask the Government to protect us,” Mr Mohammed said. “We got e-mails from a developer saying we were not allowed to form a group. Somebody even tried to hack [into] our e-mail account.”

Among the developers that investors are concerned about is Schön Properties.

“Some people paid over 60 per cent of [Schön’s] Dubai Lagoon,” said Mr Mohammed, the co-founder of the investors group who did not wish to give his family name. “People ask why they should continue to pay. The developer hasn’t even started construction of their units. The developer is saying that if they don’t continue [to pay] they will cancel the contract and forfeit their money.”

Amlak and Tamweel to sign on the dotted line – The National Newspaper

Amlak and Tamweel to sign on the dotted line – The National Newspaper

Back-door nationalisation.

A sign of distress in the banking sector. A prop to spur further lending for home buyers.

These are just some of the varied reactions to the news that the country’s two largest home finance providers will merge under the umbrella of a federal bank. Analysts are also saying that this is the first major government intervention to prevent the worsening property economy from sliding further as a result of the global credit crisis – and a welcome move at that.

“The whole landscape is changing,” said Chris Dommett, the chief executive at the regional office of mortgage advisory John Charcol. “This makes a lot of sense right now. It shows the emirates are thinking on a countrywide level.”

Amlak Finance and Tamweel, two companies with roughly Dh25 billion (US$6.8bn) in assets between them, will merge and become part of Real Estate Bank, a relatively unknown entity with offices in Abu Dhabi and Dubai, wholly owned by the Ministry of Finance and Industry, the state news agency WAM reported on Saturday.

The result would be a new home finance provider that would “serve as the cornerstone of the mortgage market”, said one government official, according to WAM. However, one senior international Dubai-based banker said it was still not clear whether the two institutions’ main problems had been addressed. “In theory, it is a good idea. But how do you turn two institutions that are in a mess into one combined entity that works well? You just end up with one giant mess.

Both Amlak and Tamweel need to merge with a major bank because what they lack is funds, and banks have that from their depositors.

However, hardly anybody had heard of the Real Estate Bank until now. Is it well capitalised?

Nobody seems to know.”

Some observers credit the authorities with trying to do something, even if the outcome may still be uncertain. The move comes as the credit pressures on property developers and home finance companies have become especially acute.

Amlak announced last week it would stop issuing new home loans as it reviewed its credit policy. Prices have begun softening across the country and once vibrant salesrooms for new towers are patronised by only a trickle of would-be buyers. This has led to a first round of layoffs at property developers and delays of projects that have yet to begin construction.While speculators have been busy trying to get out of the market because price growth has slowed, many regular end-users are still out to buy a home. But without access to affordable loans, they too have been frozen out of the market.

“The business model of Amlak and Tamweel has collapsed,” said Mohieddine Kronfol, the managing director of asset management at Algebra Capital. “As mortgage companies, their business models relied on wholesale funding, interbank borrowing and syndicated loans. All those channels of funding have been compromised by the credit crunch.”Mr Kronfol said the new national home finance provider could begin offering more attractive home loans because it would probably have access to government funds.

The new entity might also have the ability to collect deposits, allowing it another way to keep financing going during down cycles. Amlak and Tamweel are not licensed to collect deposits.

The announcement will push the relatively unknown Real Estate Bank into the spotlight as a leading financial institution in the property industry.
The bank was set up in 1981 and made operational in 1999 to provide loans to Emiratis and government-controlled companies. According to its website, it has only 7,000 customers and was started with Dh2bn in capital. Amlak and Tamweel, meanwhile, have combined assets of Dh25bn and tens of thousands of customers. Combined, they promise to be the largest property finance firm in the Middle East. The problem is neither of them have any money to lend to home buyers.

Mahmood al Mahmood, the chief executive of Al Qudra Holding, hinted last week that Real Estate Bank could take an even larger role in the property economy by also lending to distressed property developers.“We have had this entity for years, but it has not taken a large role,” Mr Mahmood said. “Today, we have an urgent need for it… There are discussions to bring it on track to take part in financing some of the mortgage companies and real estate developers. It would extend facilities whenever needed.”

Still, the announcement appeared to raise as many questions as it answered. No details were given about the structure of the new-look Real Estate Bank or what would happen to Amlak and Tamweel during the merger.Raj Madha, an analyst at EFG Hermes, said the announcement was “extremely positive” for improving the operations of the two companies, but “the main question is what will happen to shareholders”. Like many such mergers, the devil will be in the detail.
Eric Milne, the head of banking and finance for the region at Simmons and Simmons Dubai, said “there isn’t much precedent” for this type of merger. He suspected the merger would need majority shareholder approval.The two main possibilities for shareholders is that they will either be bought out by the Government and the shares will be delisted from the stock exchange, or the shares will be converted into shares in the new company. Either way, the Government is likely to take a controlling interest.

The companies involved provided no further details of the merger. Wasif Saifi, the chief executive of Tamweel, said the company “had been given the details” of the merger under Real Estate Bank and “are just looking at all the aspects of it”.The merger marks the beginning of what is likely to be a series of consolidations in the property industry, analysts said.“We are still on the cusp of a downturn in the UAE,” said John McGaw, the chief executive of the regional office of Killik & Co. “This merger will create a stronger entity. It’s something that needed to be done.”
His optimism will be greeted with relief by government officials, but last night home buyers were demanding the answer to one question: when will the home finance market resume? “This is the one million dollar question,” said the governor of the Central Bank, Sultan Nasser al Suwaidi, said over the weekend.bhope@thenational.aetpantin@thenational.ae

First came a boom, then fireworks, but is Dubai’s property market in trouble? – Times Online

First came a boom, then fireworks, but is Dubai’s property market in trouble? – Times Online

For a few hours, the glitz and the glamour, the red carpet and, above all, the astonishing fireworks disguised the reality that is dawning over Dubai – but only for those few hours. Not even the £13.5 million extravaganza that launched the £1 billion Atlantis Resort could hide the fact that Dubai’s property boom, which has fuelled double-digit growth for five years, is showing signs of turning to bust.
“It’s been ten times worse than expected.

The liquidity is absolutely frozen. There’s no money. It’s just gone.

If the Government doesn’t act really quickly, we’ll slip into an Indonesian-style bust,” said one of Dubai’s leading bankers, who did not want to be named. He was echoing a growing consensus in the region. “These last six weeks have changed the face of the Earth,” he said.

Dubai’s property boom was fuelled largely by investors who bought properties off-plan. Most had no intention of ever living in the buildings, intending, instead, to sell them on and collect a tidy profit. Most also used borrowed money to finance their payments, according to analysts, intending to use a cut of their profits to pay back their loans.

But in recent weeks credit has virtually evaporated, with international and local banks tightening credit. International investors have grown nervous as local economists have downgraded Dubai’s economic outlook. And demand for properties has fallen into a slump, with job losses and the cancellations of new developments adding up.

A striking example of Dubai’s old and new realities was apparent last Thursday. As celebrity guests were whisked away by private helicopters from the Atlantis resort, residents on The Palm Jumeirah, the artificial island that is home to the hotel, were left to digest bad news. The value of their properties has fallen as much as 40 per cent since September, according to estate agents, as buyers struggle to secure mortgages. When the development, built by the state-owned Nakheel, went on to the market seven years ago, its luxury villas were snapped up by the likes David Beckham and Michael Schumacher for up to £5 million.
Today Nakheel estimates that British buyers own nearly a quarter of the villas on the Palm.

Last week Amlak, the country’s largest lender, said that it would suspend new loans completely because of a lack of funds, a move unprecedented in this market. Yesterday the Government merged Amlak and Tamweel, the country’s other top lender, into the federally owned Real Estate Bank in an effort to loosen lending by pooling resources.

“People have really begun to fear a crash in the market,” Chris Dommett, chief executive of John Charcol Dubai, a mortgage advisory firm, said. “Banks aren’t suspending loans because of a lack of demand, they’re doing it because they don’t have any liquidity. Transactions have just stopped and everybody is holding their breath, waiting to see what will happen.”

According to new data from HSBC, property prices fell last month by 4 per cent in Dubai and 5 per cent in neigh-bouring Abu Dhabi. The credit squeeze is having a devastating effect on existing buyers, who no longer are able to meet payments on their existing investment properties. “Anybody who’s bought into this market to flip property and make a quick profit – they’re all getting crucified,” another banker said, adding that several of his clients were trying to “wriggle out” of their contracts with developers for properties that they had bought off-plan.

Brokers are reporting a sharp increase in panic-selling. Last week the Dubai-based Elysian Real Estate sent a text message to up to 40,000 mobile phones advertising distressed property sales. The text offered a luxury six-bedroom, six-bathroom villa in Dubailand, a multibillion-dollar luxury theme park on the outskirts of the city-state, at an advertised cost of about £3.86 million – about half its original price. Robert Macnair, Elysian’s sales director, told The Times: “We have had a sharp increase in clients who are looking to sell because the market has done what it’s done. There is a new urgency to these sales.

“The market has slowed dramatically.

On a number of occasions, these investors or speculators actually can’t afford to make the next payment.”

Developers are also feeling the pressure. Damac, one of Dubai’s leading developers, cut 200 jobs last week. Nakheel has also said that it will scale back construction plans for its next man-made island, the Palm Deira.

Dubai is considering stronger measures to restore lending, but analysts say the market lacks the maturity to embrace them. Banks, for example, have been unwilling so far to tap into billions of dollars of emergency funding made available by the Government in recent months as the international economy heads for global recession.
Economists say that the Government needs to take a tougher stance. If credit does loosen, some predict a quick rebound.

Simon Williams, HSBC’s Middle East economist, said: “Real estate markets anywhere in the world are volatile . . . but they tend to work themselves out as the real economy tends to perform well, as it does in the Gulf.

“I still see very low vacancy rates across the UAE and rents are high. Those two key variables suggest that the property market will endure.”

Ratings agency puts ETA Group on credit watch – Real Estate – ArabianBusiness.com

Ratings agency puts ETA Group on credit watch – Real Estate – ArabianBusiness.com

Ratings agency Standard & Poor’s put Dubai-based ETA Group on negative watch on Thursday with a view to downgrading its credit rating due to concerns over the construction and property-dominated firm’s increased leverage.

Standard & Poor’s placed the firm, whose property division has a $10 billion portfolio, on CreditWatch with negative implications with long-term BBB- corporate credit rating, the ratings agency said in a statement.It also put a ‘BBB-’ debt rating on a $300 million senior unsecured bank loan due 2012 issued by subsidiaries Emirates Trading Agency, ETA Star Holdings, and Associated Construction and Investments Co.

The potential downgrade to junk rating is the latest indication Dubai-based companies are feeling the squeeze from tighter lending conditions, a fall in property prices and a collapse in investor confidence as the global credit crunch begins to sweep across the Gulf Arab region’s trading hub.”These actions are due to concerns over increasing financial leverage, the likely adverse effect of the continuing global economic slowdown on ETA’s cyclical activities, and low levels of headroom under financial covenants,” said Standard & Poor’s credit analyst Stuart Clements.ETA’s construction unit is the sixth largest UAE contractor, according to a survey by London-based MEED magazine.

Its real estate arm ETA Star Properties said in October it planned to sell Islamic bonds worth up to $200 million in the first quarter of next year to fund expansion in North Africa and Europe and was planning to develop residential and office towers in the Russian capital Moscow with a value of $600 million next year.”

ETA’s debt levels have risen significantly in recent years to meet increasing working capital demands from both higher commodity prices and the company’s rapid growth in revenue,” S&P said.The group also operates in mechanical engineering, car trading and shipping – all sectors “considered to be highly sensitive to economic conditions”.”The recent collapse in prices in the dry bulk shipping market (81 percent of ETA’s fleet), of about 90 percent from the 2008 peak, may put pressure on some of its time charter counterparties and lead to some renegotiations,” S&P said.S&P will conclude the CreditWatch within 90 days.

ETA Star executive director Abid Junaid could not immediately be reached for comment. (Reuters)

Property Scandal -Dubai developer demands up to 88% increase on price to pay construction costs | Dubai Property

Dubai developer demands up to 88% increase on price to pay construction costs Dubai Property

original published: AME info
http://www.ameinfo.com/176241.html

The company behind the Prodigy development in Dubai’s Jumeirah Village, MiNC, has sent a letter to investors asking for extra capital to cover construction costs after cash flow shortages caused by the withdrawal of project financing by the two funding banks.

The letter from MiNC’s CEO explains the company’s financial situation to investors. MiNC says that despite the land purchase being finalised in October 2006, Nakheel only actually delivered the land for construction in May 2008. This has led to: ‘
A significant negative impact on the project; a doubling of construction-related professional fees and a large increase in government imposed costs.’ In addition: ‘The arrival of the global financial crisis has had a severe impact on the monies MiNC has available to build Prodigy 1.
We are no longer able to subsidise construction of the project; the project needs to be self-funded as originally intended.’

MiNC faces two further problems. New regulations introduced by the Dubai government have meant that the company’s original economic blueprint of using finances from the whole project to fund construction on Prodigy 1 is no longer legal. This has then been compounded by the withdrawal of project financing by two local banks.

Difficult financial situation’We are in an extremely difficult situation,’ Simon Everest, Director of Operations at MiNC told AME Info. ‘Banks have pulled all the finance, so we have the choice of either sitting, doing nothing and waiting it out, like some of our competitors are doing, or we need to find another solution.’ The problems have meant that though most of the units in the seven towers have been sold, and the company’s escrow accounts are up to date, the project is no longer financially viable. MiNC claims that it would make a ’significant and material loss if it were to build this project’ and it ‘can no longer afford to subsidise this loss’, according to the letter sent to investors. As an example, MiNC is asking buyers to pay an additional Dhs326,000 on units originally sold to them for Dhs370,000, a mark-up of 88% on the original price.

The developer also asks that investors pay the increase up front, with the remaining instalments as per the original terms.
The charge will then go to pay for construction costs. In return for this the company is trying to mitigate buyer displeasure by guaranteeing 8% rental returns on the increased purchase price. MiNC is also playing on the fact that, at Dhs1,000 per square foot, the units are still below market rate. ‘The market is short of new buyers at the moment and as they cannot sell at a higher price, they are in effect re-selling the same apartments back to the original owners at an increased price!’ an investor in the project told AME Info.

‘When we spoke with their London office, and contacted their Dubai office, the only options were – give us the money we have asked for or lose your apartment and 30%.
MiNC are saying that per the new law they will be able to retain 30% of the purchase price, even though we are not in default of payment.‘
Responding to this comment MiNC said: ‘We do not intend to confiscate all or part of clients’ deposits, and have not in any way threatened our clients in this regard.’

Permanent suspension of workThe letter continues: ‘The current economic climate and the impact on the property sector are unique… Events outside our control have forced us to make difficult decisions. We believe that our proposed course of action will help us meet this target [of delivery in June 2010]. Failing this, we fear that the project will be suspended, possibly permanently.’ The response from investors contacted has been understandably negative so far, with many refusing the terms: ‘If I wanted to buy an apartment at Dhs1000 per square foot back in November 2006, I could have put a little more in and bought in the Marina. As an investor in this company, I feel like I have been robbed of my savings and profit.

I have looked at the market and apartments in Jumeirah Village are selling for under Dhs1000 in the current market.’ If the response by even a large minority of investors is negative then MiNC will not have the funds necessary to begin construction and those who have advanced the extra money will have their funds returned and the company will wait for bank funding to resume. ‘We initiated a meeting with the Land Department to get them to intercede on our behalf with the banks,’ said Everest, ‘and they put pressure on them but we’ve had no joy. Our next move if the buyers don’t accept the deal is to return the money, sit it out and wait for financing. But it is our intention to build every single one of the units.’

UPDATE: Subsequent to the publication of this article MiNC has issued a statement to AME Info stating: ‘We have taken steps to reduce the premium requested from clients to a maximum of 30% or Dhs200,000 (whatever is the lower), as a handful of purchasers that bought at pre-launch prices (less than Dhs600 per square foot) have rightly pointed out that the premium requested of them was excessive.’

Dubai developers are in denial

Dubai developers are in denial

Some of Dubai companies are in “denial” about the viability of projects in light of the global financial crisis, according to the CEO of Depa “
We are at the denial stage where lots of developers know for a fact that their projects should be cancelled and they’re either not announcing it or they’re saying it’s going to be delayed,” said Mohannad Sweid, speaking on future Dubai growth at the Nasdaq OMX Investor Conference.

“We cannot deny the effect [the crisis] has been having, we are a part of this world and I believe it’s just not right to say we haven’t seen any impact,” he added.In its capacity as an interior contractor in the Gulf region, Sweid said Depa had seen a lot of project announcements that had not necessarily been fully researched and he expected these to stop as the crisis takes hold.”

What we have had in the GCC in the last three years is the difference between reality and non-reality.

“Our market research showed there will be 280 new hotels built over four years within the GCC. That was advertised all the time… If we look at the reality – how many hotels have been delivered – it’s hardly more than five or six hotels a year,” he said.

In terms of risk to his own firm, Sweid was confident that infrastructure projects would still go ahead.”In this region, a lot of infrastructure is not developed yet and these elements of infrastructure have to be developed – it’s not a choice,” he said, citing Dubai’s new metro system as an example.He added that DepaDepa was still on track for growth for next year, but the “fears” were for 2010 and 2011.
© 7Days 2008

Dubai Property Court – Most disputes involve payment defaults

original published http://www.business24-7.ae/

Most disputes involve payment defaults

Disputes involving payment defaults resulting from construction delays form the largest category of cases registered so far with Dubai’s new Property Court.

Seventy-one cases have been registered with the court, which began to deliver judgments earlier this month. All the cases so far have been filed by buyers but officials expect developers will start to launch legal actions too.

The number of cases before the court exceeds 500, as hundreds have been pas-sed to it by the Real Estate Regulatory Agency (Rera).”

The court started considering cases this month and has so far passed judgment on four cases,” Chief Judge Mohammed Yousuf Sulaiman, Deputy Director of Dubai Courts and Cassation Court’s Senior Judge, told Emirates Business.”

Two have gone in favour of the defendant and two against,” he added.Judge Abdul Qadir Moosa, Chief of the Court of First Instance (Properties Court), said: “We can only proceed with cases if the parties involved come to the court and register their contact details. Many people are aware their cases are pending but have yet to come to us. We will go ahead once they do.”The court is currently seeking the advice of real estate experts holding high positions in the government and members of the Ruler’s Court to assist the judges in the decision-making process while passing judgment on cases. The experts who are brought in will have to be approved by Dubai Courts and will have to swear that they will pass on any advice in an unbiased and fair manner.”

The time between the registration of a case and the judgment will on average be 52 days, say officials.
Chief Judge Sulaiman added: “The process is that after registration we notify the parties involved about the case and ask them to register their contact details with us. Then they have a consultation with our team members and we arrive at a decision.

The 52-day timeframe is a record compared with the length of time taken in courts abroad.

Dubai Courts arrive at decisions much more quickly than other courts in the region.”The time is needed because we have to follow the procedures set out by the law but once the decision is made then passing judgment does not take long.”The court has not so far recruited any extra judges but will do so depending on the number of cases that are registered.

Officials are also considering publishing a property guide that will include details of Dubai’s freehold regulations.

Limitless to delay selling Arabian Canal plots – The National Newspaper

Limitless to delay selling Arabian Canal plots – The National Newspaper

Limitless, a developer owned by Dubai World, will hold back on selling plots of land surrounding its Arabian Canal project to sub-developers until market conditions improve.The company had originally intended to start selling land for development in June this year.

“Everything is ready to sell, we’re just judging the best time to start selling,” said Ian Raine, the project’s director on the sidelines of Meed’s coastal development conference today.

“We haven’t set a definite date yet, but obviously we need to take into account what’s going on. But there’s been a lot of interest from developers in the project.”Mr Raine added that the company had not changed its targets for completing the project, which will cost Dh40.4 billion (US$11bn) to build.“We haven’t made any changes but we do have to take into account market conditions, and if those conditions mean we have to react, then we will.”

The earthworks on the project are now underway after Tristar Transport and Contracting, an Abu Dhabi company, was awarded the job in September.Ten contractors have been invited to bid for the second phase.mailto:phase.aguiffrida@thenational.ae

Construction on Palm Jebel Ali to slow – The National Newspaper

Construction on Palm Jebel Ali to slow – The National Newspaper

Infrastructure work on parts of Nakheel’s Palm Jebel Ali may be slowed in light of current economic conditions, according to Ali Mansour, the project’s director.

A number of bridges are already under construction on the man-made island, and infrastructure work on the lower and left quadrants, along with the spine and lower fronds, is progressing. But construction contracts that were scheduled to be awarded in the latter part of next year and early 2010 will most likely be put back.“

We might slow down the launching of contracts for infrastructure work on the components of the island that are not scheduled to be populated until after 2011 or 2012,” said Mr Mansour on the sidelines of Meed’s coastal development conference today.“It’s very reasonable to do so.
The island’s quite big, so for those districts that are far from being occupied in the near future, we might slow down infrastructure work.”

Palm Jebel Ali is the second island in the Palm trilogy, located in Waterfront. It will feature luxury hotels and homes built on stilts over the water, which together spell a poem written by His Highness Sheikh Mohammed bin Rashid al Maktoum.

Mr Mansour added that the areas which could be affected are the upper right and left quadrants of the development
mailto:development.aguiffrida@thenational.ae

Construction on Palm Jebel Ali to slow – The National Newspaper

Construction on Palm Jebel Ali to slow – The National Newspaper

Infrastructure work on parts of Nakheel’s Palm Jebel Ali may be slowed in light of current economic conditions, according to Ali Mansour, the project’s director.

A number of bridges are already under construction on the man-made island, and infrastructure work on the lower and left quadrants, along with the spine and lower fronds, is progressing. But construction contracts that were scheduled to be awarded in the latter part of next year and early 2010 will most likely be put back.“

We might slow down the launching of contracts for infrastructure work on the components of the island that are not scheduled to be populated until after 2011 or 2012,” said Mr Mansour on the sidelines of Meed’s coastal development conference today.“It’s very reasonable to do so.
The island’s quite big, so for those districts that are far from being occupied in the near future, we might slow down infrastructure work.”

Palm Jebel Ali is the second island in the Palm trilogy, located in Waterfront. It will feature luxury hotels and homes built on stilts over the water, which together spell a poem written by His Highness Sheikh Mohammed bin Rashid al Maktoum.

Mr Mansour added that the areas which could be affected are the upper right and left quadrants of the development
mailto:development.aguiffrida@thenational.ae

Dubai Developers say they will scale back activity – The National Newspaper

Developers say they will scale back activity – The National Newspaper

Dubai’s largest property developers say they are cutting back on activity and reviewing the project timetables in response to the worsening economic climate.The admissions, made yesterday, were the clearest sign yet that developers now consider the lack of credit and slowdown of sales as serious impediments to growth in the months to come.“

There is a recession hitting the whole world and some projects in Dubai are being delayed and some are being cancelled,” said Imad al Jamal, the vice chairman of the UAE Contractors Association. “We are having to curtail expenses and regroup resources.

”Nakheel, the property developer behind the iconic island developments that are becoming synonymous with Dubai, also said it would be “scaling back” some projects.
“We are witnessing a global negative economic movement, and while we believe that the economic fundamentals of Dubai have not changed, we also believe that we have a responsibility to aid this market maintain healthy momentum,” a spokesman said. “

This involves reassessing our immediate business objectives to accommodate the current economic climate. The next few months will see a scaling back of activity around some of our projects.”Nakheel would not identify projects that could be delayed, but in recent weeks it has said activity on Palm Deira and Palm Jebel Ali had shifted to the areas closest to the existing shoreline to allow for progressive sales launches.Analysts said projects likely to be affected included the island developments that have yet to begin, such as The Universe – a planned archipelago abutting the 300 islands of The World.

Union Properties, the developer behind the towering Index building and MotorCity in Dubai, said it had eased the payment plans for some developments and would not announce “any new project until we are clear on the status of the credit market and the appetite of banks to go back into lending”, according to Zaid Ghoul, the chief financial officer.
He said the company had completed 85 per cent of its projects and was focusing on expanding its rental portfolio to Dh5 billion (US$1.36bn) from Dh2.2bn – a move that would secure the company between Dh400 million and Dh500m in annual income.Mr Ghoul also said the company was planning payment schemes such as “rent to own” – where a potential buyer could choose to contribute their rent toward buying the home if they decided within a certain period of time.“
We have always been innovative in coming up with ideas to deal with difficult market circumstances,” he said.Developers with a large portion of their sales in the off-plan category are beginning to appear especially vulnerable in the market.

Damac Properties said it had awarded 60 contracts in the first nine months of this year for construction of projects, but a review of its website shows six buildings finished or nearly finished, 24 in the early and middle phases of construction and 44 projects without significant progress.
Earlier this week, Damac announced 200 layoffs, or about 2.5 per cent of its workforce.
Peter Riddoch, the chief executive of Damac, said the company had “undertaken a review of its construction timetable with a view to rescheduling some of its later projects”.
“
This does not mean that Damac Properties is postponing any projects,” he said. “

We, along with every other company across the world, are simply taking an overall view of our business and prioritising accordingly. It makes good business sense for us to prioritise at those construction sites where we have more advanced status and we have communicated our intentions to our customers.”

Emaar Properties, which announced new payment plans on Wednesday to boost sales, said yesterday it was reviewing its recruitment strategy as part of plans to “reorient our growth strategies and align our business model to tackle new realities”.“
While Emaar continues to be one of the largest employment providers and has been instrumental in creating several hundred new job opportunities – directly and indirectly – it is now crucial that we use efficiency and maximise productivity, which includes revisiting our recruitment policies, and optimising human resources,” a spokesman said.Limitless, which is building a Dh11bn canal that eventually will, be the centre of a city with an estimated 1.5 million people, said it was reviewing the pace of development “on a continuous basis” and would adjust to “reflect market conditions”.

Major Abu Dhabi developers, including Aldar Properties and Sorouh Real Estate, said they were still reviewing the economic situation and had not decided whether to ease payment plans to help buyers.

Adel Lootah, the executive director of the Dubai Property Society, said transparency was the key to restoring confidence during this period.“We need a little bit more communication from the government, the main players and the financial institutions,” he said. “This is a difficult time.”mailto:time.”bhope@thenational.ae

Dubai Developers say they will scale back activity – The National Newspaper

Developers say they will scale back activity – The National Newspaper

Dubai’s largest property developers say they are cutting back on activity and reviewing the project timetables in response to the worsening economic climate.The admissions, made yesterday, were the clearest sign yet that developers now consider the lack of credit and slowdown of sales as serious impediments to growth in the months to come.“

There is a recession hitting the whole world and some projects in Dubai are being delayed and some are being cancelled,” said Imad al Jamal, the vice chairman of the UAE Contractors Association. “We are having to curtail expenses and regroup resources.

”Nakheel, the property developer behind the iconic island developments that are becoming synonymous with Dubai, also said it would be “scaling back” some projects.
“We are witnessing a global negative economic movement, and while we believe that the economic fundamentals of Dubai have not changed, we also believe that we have a responsibility to aid this market maintain healthy momentum,” a spokesman said. “

This involves reassessing our immediate business objectives to accommodate the current economic climate. The next few months will see a scaling back of activity around some of our projects.”Nakheel would not identify projects that could be delayed, but in recent weeks it has said activity on Palm Deira and Palm Jebel Ali had shifted to the areas closest to the existing shoreline to allow for progressive sales launches.Analysts said projects likely to be affected included the island developments that have yet to begin, such as The Universe – a planned archipelago abutting the 300 islands of The World.

Union Properties, the developer behind the towering Index building and MotorCity in Dubai, said it had eased the payment plans for some developments and would not announce “any new project until we are clear on the status of the credit market and the appetite of banks to go back into lending”, according to Zaid Ghoul, the chief financial officer.
He said the company had completed 85 per cent of its projects and was focusing on expanding its rental portfolio to Dh5 billion (US$1.36bn) from Dh2.2bn – a move that would secure the company between Dh400 million and Dh500m in annual income.Mr Ghoul also said the company was planning payment schemes such as “rent to own” – where a potential buyer could choose to contribute their rent toward buying the home if they decided within a certain period of time.“
We have always been innovative in coming up with ideas to deal with difficult market circumstances,” he said.Developers with a large portion of their sales in the off-plan category are beginning to appear especially vulnerable in the market.

Damac Properties said it had awarded 60 contracts in the first nine months of this year for construction of projects, but a review of its website shows six buildings finished or nearly finished, 24 in the early and middle phases of construction and 44 projects without significant progress.
Earlier this week, Damac announced 200 layoffs, or about 2.5 per cent of its workforce.
Peter Riddoch, the chief executive of Damac, said the company had “undertaken a review of its construction timetable with a view to rescheduling some of its later projects”.
“
This does not mean that Damac Properties is postponing any projects,” he said. “

We, along with every other company across the world, are simply taking an overall view of our business and prioritising accordingly. It makes good business sense for us to prioritise at those construction sites where we have more advanced status and we have communicated our intentions to our customers.”

Emaar Properties, which announced new payment plans on Wednesday to boost sales, said yesterday it was reviewing its recruitment strategy as part of plans to “reorient our growth strategies and align our business model to tackle new realities”.“
While Emaar continues to be one of the largest employment providers and has been instrumental in creating several hundred new job opportunities – directly and indirectly – it is now crucial that we use efficiency and maximise productivity, which includes revisiting our recruitment policies, and optimising human resources,” a spokesman said.Limitless, which is building a Dh11bn canal that eventually will, be the centre of a city with an estimated 1.5 million people, said it was reviewing the pace of development “on a continuous basis” and would adjust to “reflect market conditions”.

Major Abu Dhabi developers, including Aldar Properties and Sorouh Real Estate, said they were still reviewing the economic situation and had not decided whether to ease payment plans to help buyers.

Adel Lootah, the executive director of the Dubai Property Society, said transparency was the key to restoring confidence during this period.“We need a little bit more communication from the government, the main players and the financial institutions,” he said. “This is a difficult time.”mailto:time.”bhope@thenational.ae

Gulfnews: Aspire draws ire of property investors

Gulfnews: Aspire draws ire of property investors

By Suzanne Fenton, Staff ReporterPublished: November 12, 2008, 23:42
Dubai:

Investors are increasingly concerned about their investments in all developments of Aspire Real Estate, including Elements and Jehaan in Jumeirah Village South.

Investors are worried that their money has been used for personal use by the manager of Aspire, as they have been left with no money and no apartments.
The manager was recently sentenced to three years in jail for bounced cheques according to records from Dubai courts.

However, the case has now been taken to the appeal court and the next hearing is due on November 18.

The manager denied he had a case against him when speaking to Gulf News on Tuesday.
“There is one court case, but it is something we filed against High Rise Real Estate as they didn’t pay us what was due (Dh200 million),” the manager said.

Furious investors bought their apartments in Aspire’s Jehaan development in Jumeirah Village South since 2007.
Most of the investors have paid at least a 10 per cent deposit (Dh80,000), with one paying around 33 per cent, despite not having a contract. Investors were told Jehaan would be ready by January 2009 but construction hasn’t even started.
It also transpires that when Aspire was selling the units, they did not legally own the land.
The manager said originally the land was owned by offshore company Noorzak Investments, but one of the directors of Noorzak “went into his set of problems”.
Transfer process

“When we went to transfer the land, we realised that Noorzak had some problems with Nakheel with two other plots which they owned in JVS and hence Nakheel refused to make any transfer until the issue was sorted out,” the manager said in a statement online.

By the time this happened, an extra 25 per cent payment on the land was due and the transfer process was further delayed, the manager added. At this time, Rera and therefore the escrow account law were not yet in place in Dubai.

When investors contacted Dubai’s Real Estate Regulatory Authority (Rera) in April this year, senior legal officer Khowla Madani replied that Rera would look into the matter.
“I was informed that the plot has never been transferred to their name and as I can see from their email, there is too much misleading information.”

“If the same were confirmed, strict legal action shall be taken against Aspire Real Estate and this email shall be forwarded to management of Rera to decide the proper action,” Madani writes.
The manager told Gulf News the project “is definitely going ahead” and when asked if investors would get refunds if requested, he replied, “Yes, 100 per cent.”

Property cloud nine now looks stormy – The National Newspaper

Property cloud nine now looks stormy – The National Newspaper

If you’ve bought property in the UAE these past few years, you have enjoyed a thrilling ride. While no official data on prices exist, reports suggest they have skyrocketed since at least 2006, notching high double-digit returns and beating even some of the world’s best performing assets.And according to a recent HSBC report, the sector may still be booming. Prices in Dubai jumped 17 per cent in September alone, it said, after registering gains of 2 per cent and 3 per cent during the summer.

In recent weeks, however, the argument for buying property has become less convincing. One report last month suggested that prices were rising at a slower pace. Meanwhile, some developers have tried to curb speculation, banning investors who were buying apartments off-plan and then selling them in a matter of weeks, sometimes at more than double the price. And in the past few weeks, stories have emerged of cash-strapped buyers unable to meet their monthly payments and builders having trouble selling their units. Deposits on mortgages have gone up, too, because banks and mortgage lenders are finding it harder to borrow money as the global credit crunch stretches into the Middle East.

While discouraging speculation is doubtless a prudent measure in the long run, none of this news bodes well for property buyers. Perhaps even more troubling, though, is the havoc the financial crisis could wreak on property in the Middle East. Most of the demand for property comes from people living outside the UAE – in places such as India, Pakistan and the UK. According to a recent Citibank report, only 24 per cent of those who bought properties from Emaar, the region’s largest developer, are UAE citizens. Most come from Asia and Europe.

These investors have seen the value of their global stock portfolios decline dramatically in the wake of the financial crisis. Already, foreign investors on the Dubai Financial Market have been net sellers of local stocks, helping to wipe billions off the value of listed companies. When global markets go belly-up, international investors have less money to throw around on property. At best, that translates into slower sales in booming markets like ours. At worst, it could lead to declines.

So, is the UAE still a good place in which to buy?

The answer depends largely on your circumstances – if you are looking for a quick profit by speculating on off-plan property, it’s a resounding no. As the Government works to bring a measure of sanity into what had looked like the beginnings of a bubble market – one in which off-plan properties were selling at the same prices as those already completed – speculators will doubtless feel the pinch. A drying up of demand in off-plan units resulting from the Government’s actions has already left many speculators stuck with properties they never intended to keep.

“The speculative off-plan end is going quiet, and people who put down 5 per cent deposits and expected to get out quickly are now left with properties they can’t sell and can’t finance and don’t have the cash to make payments on,” says Chris Dommett, the chief executive of the property consultancy John Charcol Dubai. “There’s going to be a huge oversupply of property in the off-plan market for the next few months. Developers are going to find a lot of product returned to them.”

However, Mr Dommett says it makes sense if you are buying because you need a place to live, especially a completed villa or apartment. There is a downside, though: Because of the recent financial turmoil, a lot of banks are asking for a much bigger down payment. Amlak and Tamweel, the UAE’s two big mortgage providers, recently raised their minimum down payments to about 25 per cent, and many banks have followed suit. These days, the least you will be able to put down on an apartment or villa is about 15 per cent.

In the end, that is a good thing, because it forces you to start off with enough equity to cushion a possible downturn in property prices. For buyers who are just coming to the country, though, coming up with the necessary cash may be a big issue.If a down payment is what is preventing you from buying, don’t worry. Conditions in the lending markets are likely to improve in the next year or so as global credit conditions slowly improve and banks become less hesitant to lend to each other.

Despite the problems that have arisen in the past few weeks, the demographics of the UAE support the argument that you won’t lose if you buy property and keep it for a decade or so.
The population is steadily ballooning as foreign workers stream in, and those people need a place to live. If anything, the financial crisis may mean more migration because of dimmer job prospects elsewhere.“If you look at the fundamentals and ignore the off-plan speculation, the population is increasing as people arrive here and there’s still a shortage of finished product,” Mr Dommett says.

“The alternative is renting, and rents are not coming down. Although things are quiet at the moment and people will be taking a wait-and-see attitude for the next couple of months, demand for properties to live in is going to be strong, which implies prices will firm up again. The market will have some of the heat taken out of it because you won’t see the same amount of speculation as before. But it will still be a good investment.”
mailto:investment.”afitch@thenational.ae

Property cloud nine now looks stormy – The National Newspaper

Property cloud nine now looks stormy – The National Newspaper

If you’ve bought property in the UAE these past few years, you have enjoyed a thrilling ride. While no official data on prices exist, reports suggest they have skyrocketed since at least 2006, notching high double-digit returns and beating even some of the world’s best performing assets.And according to a recent HSBC report, the sector may still be booming. Prices in Dubai jumped 17 per cent in September alone, it said, after registering gains of 2 per cent and 3 per cent during the summer.

In recent weeks, however, the argument for buying property has become less convincing. One report last month suggested that prices were rising at a slower pace. Meanwhile, some developers have tried to curb speculation, banning investors who were buying apartments off-plan and then selling them in a matter of weeks, sometimes at more than double the price. And in the past few weeks, stories have emerged of cash-strapped buyers unable to meet their monthly payments and builders having trouble selling their units. Deposits on mortgages have gone up, too, because banks and mortgage lenders are finding it harder to borrow money as the global credit crunch stretches into the Middle East.

While discouraging speculation is doubtless a prudent measure in the long run, none of this news bodes well for property buyers. Perhaps even more troubling, though, is the havoc the financial crisis could wreak on property in the Middle East. Most of the demand for property comes from people living outside the UAE – in places such as India, Pakistan and the UK. According to a recent Citibank report, only 24 per cent of those who bought properties from Emaar, the region’s largest developer, are UAE citizens. Most come from Asia and Europe.

These investors have seen the value of their global stock portfolios decline dramatically in the wake of the financial crisis. Already, foreign investors on the Dubai Financial Market have been net sellers of local stocks, helping to wipe billions off the value of listed companies. When global markets go belly-up, international investors have less money to throw around on property. At best, that translates into slower sales in booming markets like ours. At worst, it could lead to declines.

So, is the UAE still a good place in which to buy?

The answer depends largely on your circumstances – if you are looking for a quick profit by speculating on off-plan property, it’s a resounding no. As the Government works to bring a measure of sanity into what had looked like the beginnings of a bubble market – one in which off-plan properties were selling at the same prices as those already completed – speculators will doubtless feel the pinch. A drying up of demand in off-plan units resulting from the Government’s actions has already left many speculators stuck with properties they never intended to keep.

“The speculative off-plan end is going quiet, and people who put down 5 per cent deposits and expected to get out quickly are now left with properties they can’t sell and can’t finance and don’t have the cash to make payments on,” says Chris Dommett, the chief executive of the property consultancy John Charcol Dubai. “There’s going to be a huge oversupply of property in the off-plan market for the next few months. Developers are going to find a lot of product returned to them.”

However, Mr Dommett says it makes sense if you are buying because you need a place to live, especially a completed villa or apartment. There is a downside, though: Because of the recent financial turmoil, a lot of banks are asking for a much bigger down payment. Amlak and Tamweel, the UAE’s two big mortgage providers, recently raised their minimum down payments to about 25 per cent, and many banks have followed suit. These days, the least you will be able to put down on an apartment or villa is about 15 per cent.

In the end, that is a good thing, because it forces you to start off with enough equity to cushion a possible downturn in property prices. For buyers who are just coming to the country, though, coming up with the necessary cash may be a big issue.If a down payment is what is preventing you from buying, don’t worry. Conditions in the lending markets are likely to improve in the next year or so as global credit conditions slowly improve and banks become less hesitant to lend to each other.

Despite the problems that have arisen in the past few weeks, the demographics of the UAE support the argument that you won’t lose if you buy property and keep it for a decade or so.
The population is steadily ballooning as foreign workers stream in, and those people need a place to live. If anything, the financial crisis may mean more migration because of dimmer job prospects elsewhere.“If you look at the fundamentals and ignore the off-plan speculation, the population is increasing as people arrive here and there’s still a shortage of finished product,” Mr Dommett says.

“The alternative is renting, and rents are not coming down. Although things are quiet at the moment and people will be taking a wait-and-see attitude for the next couple of months, demand for properties to live in is going to be strong, which implies prices will firm up again. The market will have some of the heat taken out of it because you won’t see the same amount of speculation as before. But it will still be a good investment.”
mailto:investment.”afitch@thenational.ae

Property prices on Palm Jebel Ali fall by up to 40% – Real Estate – ArabianBusiness.com

Property prices on Palm Jebel Ali fall by up to 40% – Real Estate – ArabianBusiness.com

House prices on the Palm Jebel Ali, second largest of Nakheel’s palm-shaped islands, have fallen by as much as 40 percent in the last two months as the global financial crisis sees foreign investors move to liquidate assets in Dubai, according to three Dubai-based real estate agents.

“I never expected [prices on the Palm Jebel Ali] would have come back so quickly and by so much,” said Jeroen Van Der Geer, partner at AA Properties in Dubai. “

We are back to a level of one and a half to two years ago.”The global financial crisis has hit demand from foreign investors, which make up a large percentage of property buyers in Dubai, while tightening liquidity has made home financing more difficult, agents said.

Local mortgage providers have slashed home financing from 90 percent to as little as 60 percent in recent weeks.The price of five and six bedroom signature villas, the most expensive properties on Palm Jebel Ali, have dropped from around 16 million dirhams ($4.35 million) to 9 million dirhams since the beginning of September, according to figures from AA Properties.

But that still represents a premium of between 70 percent to 80 percent on the original launch prices.A four-bed garden home has fallen from around 7.4 million dirhams to 4.1 million dirhams, according to the figures, with the premium dropping from around 160 percent to 45 percent.The figures show a three-bed water home, the cheaper of the Palm Jebel Ali properties, is now selling for around 3.8 million dirhams, when at the beginning of September it was selling for 6.2 million dirhams, with the premium falling from about 210 percent to 90 percent.Jodie Smith, managing director of Elysian Real Estate, said garden homes were currently selling at around 4.5 million dirhams, compared to 8.6 million at the beginning of September, while water homes had come down to around 4 million dirhams from 6.5 million dirhams.
David Rowland, sales consultant at Dubai’s Smith & Ken Real Estate, said he had seen premiums on signature villas drop from 200-210 percent in July/August to 75-80 percent currently.Rowland said he had also seen garden homes selling at a 35-40 percent premium, compared to 130-160 percent in July/August.
He described the drop as “quite alarming”.
Rowland said sales had not completely dried up on the Palm Jebel Ali, but investors were having to accept premiums of around 35-40 percent to make a sale.Rowland said premiums could go as low as 20 percent before property prices rebound.“I think we will see a rebound.

Palm Jebel Ali may go down to as low as 20 percent [premium]. When it does we will see people start to come back to the market, maybe in December,” he said.
Van Der Geer said he expected demand for properties on Palm Jebel Ali return before Christmas as global financial markets stabilise and investor confidence begins to return.“It is a good opportunity for investors now and I believe the [long-term] picture is good. Prices will go back up,” he said.

Smith said she had already seen sales pick up this week, with investors taking advantage of bargain prices to snap up properties that just a few months ago were out of their price range.Nakheel said in a statement that it welcomed “all proposals and discussions by all industry-related partners aimed at maintaining a healthy market movement under the current circumstances”.“

Nakheel realises that it does not work in isolation and has a great number of partners and third parties whose interests are intertwined with its own. This approach is a very responsible approach in line with current global economic conditions,” the developer said.

Real Estate Agents: Dubai Boom Is Ending

http://blogs.wsj.com/economics/2008/10/27/real-estate-agents-dubai-boom-is-ending/

Stefania Bianchi, Mirna Sleiman and Stefania Bianchi report from Dubai for Zawya Dow Jones.

A six-year real estate boom in Dubai that spurred a $475 billion building frenzy has ended, according to agents who say sales are collapsing amid fears that the global economic downturn will hit the sheikdom.

“Last month was a real disaster and worse is coming I guess,” Mehdi Zoghbi, an agent at Middle East Real Estate Consultants, told Zawya Dow Jones Sunday.

Zoghbi says that desperate sellers are now offering off-plan properties on the secondary market for a zero premium, effectively accepting a loss on their investment in order to offload quickly. Dubai, the first Gulf sheikdom to allow foreigners rights to buy homes, may also be the first to see a crash in property prices.

“Our commissions have fallen by up to 70% recently,” said Khaled Daji, an agent at Al Jabal Real Estate. “The most hit are the projects under development and those luxurious high end. We plan to survive for another six months to see how this crisis unfolds.”

But the city’s biggest developers like Emaar Properties PJSC and Nakheel are adamant that sales remain robust. Mohammed Alabbar, Emaar’s chairman and one of the architects of Dubai’s real estate boom, said in the company’s third-quarter statement that “we are very confident of our company’s fundamentals and future growth.”

That hasn’t stopped investors dropping the company’s shares. Emaar’s stock has fallen 62% since the beginning of the year, that’s more than the 48% fall in the Dubai Financial Market’s main index over the same period, according to Zawya.com data. Earlier this month, Colliers International said the growth of property prices in Dubai slowed to 16% in the second quarter of 2008 from 42% in the first quarter. Morgan Stanley warned in August that property hotspot Dubai could see a 10% fall in prices by 2010.

A collapse in real estate prices will add to pressure on Dubai’s economy, which doesn’t benefit from the vast oil income enjoyed by neighboring Abu Dhabi. Property and construction are estimated to account for about 30% of the emirate’s economy.

Meanwhile, the nerve – and wallets – of Dubai’s shoppers will be tested this week when, against a tide of global economic woe, the region’s largest shopping mall opens. Covering an area of more than 50 soccer fields, Dubai Mall will have more than 1,200 shops; one of the world’s largest indoor gaming arcades; an Olympic-size ice rink; the world’s largest indoor Gold Souk; and one of the world’s biggest aquariums, which will be home to more than 33,000 types of sea life, including over 400 sharks.

Comments

Report offensive comments to blogsadmin@wsj.com

Global recession resulted global oil, housing, commodities asset prices bubbles burst, plunge more than 50 % will be spread into oil consuming and oil producing countries
details on
www.osawh.com/mortdefa.htm
www.osawh.com/GCaptbj.html

Comment by Warren Huang – October 27, 2008 at 7:19 pm

cool article

Comment by hue g. rection – October 27, 2008 at 8:06 pm

Stefania and Mirna, thanks for this article. Interesting to see how other people are living and investing.

Comment by tom a taxpayer – October 27, 2008 at 11:08 pm

A fall in prices may actually benefit Dubai in the long term.

The escalation in cost of living in Dubai, driven by property and rent prices, has become unsustainable.

And speculation will end leading to more realistic valuation of assets.It has clearly been a speculative market when a

down payment of 20 per cent provides a 100 to 150% per cent in a less than a year from property flipping.

Comment by Dave Stern – October 28, 2008 at 12:35 am

As someone who lives “on the ground” here in Abu Dhabi, I can tell you that Dave Stern’s comment is incorrect:

the locals have been taking out personal bank loans to cover just 2 to 3 month’s mortgage payments and then

flipping properties within that time (not a year!).

They were buying up to six properties at a time in this manner.

These purchases were all “off plan”, the properties were not even under construction.

This is why the real estate market was, ultimately, unsustainable.

Comment by Jan Newton – October 28, 2008 at 1:02 am

I have been a doomsayer of the Indian real estate market when I predicted the fall in February 2008 -

 http://www.eclectic-investor.blogspot.com
The Arabic leverage is up to 100 times capital. I have personally know of business center receptionist

doubling up as a “real estate flipper” and now has overleveraged and stuck in properties that are not even

under construction. It is normal for authorities to blow their trumpets, but expect their sounds to end in a

Big Blowup in their faces.
A cataclysmic disaster and perhaps the start of Dubai’s fall like Beirut before and Aden even before that.

Comment by Cataclysmic Collapse of Dubai Expected – October 28, 2008 at 2:26 am

Castles in the sand?

Comment by tom a taxpayer – October 28, 2008 at 2:50 am

Currently panic is ruling the markets all over the world irrationally.

There is no exception, however, the Arabian Gulf have strong economic fundamentals and the recovery

will be much faster than in the West. As a matter of fact, the Q3 financial results of the biggest market players

for the are better than the Q3 results in 2007.
From the position of commercial property broker in Dubai, I can assure you that corporate end-users are good

clients at the moment. We have sold office floors in Business Bay during the last month and recently preparing t

he transactions of commercial properties in Jumeirah Lake Towers.

In times of crisis there are losers and winners.

Comment by Gergana Mineva – October 28, 2008 at 4:33 am

When junk emails started arriving in one of my “special” email boxes – promising pie-in-the-sky

pre-construction deals in Dubai – went Short Oil and Emerging Markets ETFs (Thank you, Goldman oil analysts!!!)

Comment by Federales – October 28, 2008 at 6:23 am

Mr. Gergana Mineva!
It is Persian Gulf not Arabic.
Please use always the correct name in the future.
Thank you!

Comment by Farhad – October 28, 2008 at 7:21 am

Farhad, Dubai is essentially ruled under Shirah Law, a cruel brand of despotic fascism that harms

women and children and is antithetical to freedom. Dubai though more “progressive”

than most repressive regimes in Sand Land, hates Jews and will not allow the

practice of such a “heinous” religion as Judaism. Yet you are worried about words and nomenclature.

Words are meaningless, actions are all that matter.

Comment by Kafka – October 28, 2008 at 8:32 am

OPEC’s manipulation of oil prices and speculators caused this current recession by increasing oil prices to historic levels.

Comment by Blame OPEC – October 28, 2008 at 11:16 am

Market is certainly undergoing a correction but to predict doom is a little foolhearty.

There is TREMENDOUS liquidity in the market and the reserves built up during the period of

high gas prices will certainly be deployed to stablize the realestate market which is the cornerstone of ‘

New’Dubai. Also, Dubai is NOT ruled by shariah law. In fact, it is one of the most modern states

in the gulf and is known for its liberal political/social environment (recent stories about sex on the beach

 not withstanding). There are a number of very successful american jews in the city so the anti-semetic

claim is just rubbish. There is no law against practise of ANY religion.

Visit the region before speaking

Comment by DubaiDreamer – October 28, 2008 at 1:33 pm

The smart money has begun the pull out already. Bank lending is drying up.

The only ones who continue to believe that the real estate market will go up are real estate agents

and speculators who have not been able to off load so far. The secondary market for off-plan properties is in a free fall.

And no amount of deliberate project delays and throwing people out of villas is going to prevent the serious

correction that Dubai property so badly needs. It has been the most speculative, unregulated and unprotected

market the past 6 years.

Comment by Kingsley – October 28, 2008 at 1:55 pm

couldn’t have happened to a nicer group of people…

Comment by charlie – October 28, 2008 at 2:13 pm

Gee, I guess the Arabs are poor for a reason = incompetence.

High oil prices masks the basic incompetence for awhile. But stupid is as stupid does.

Comment by CaliPOWER – October 28, 2008 at 2:17 pm

Cry Out Loud and you all say what you want about dubai …BUT The truth is: We Are All Loooosing!!

The whole world is sinking…

Comment by The True Man – October 28, 2008 at 8:44 pm

Kingsley makes some good points, Dubai is in need of regulation.

Prices may be predicted to fall, but it isn’t happening yet in the rental market.

Buyers have bought up so much of the properties and now are holding them until they can get

their desired selling price (usually expected 20% increases from sale to sale)…leaving the rentail market

struggling. Landloards can demand rents starting at $25,000/yr in ONE payment upfront for 450 sf studios…in empty,

 construction sites of buildings! Dubai is leaving no room for renters & the middle class.

Rents are still exorbitant and there are few regulations in place to support the renter.

Comment by MRODubai – October 28, 2008 at 11:40 pm

As someone who lives and breathes real estate since its first days here in Dubai,

I feel it is necessary to see the cause of the boom and only then we may be able to make some

calculated estimates of the future market condition.
1. Dubai real esate growth was based on a promise of freehold, residence permit, tax free benefits

for nationalities who have certain restrictions in their countries and saw dubai as a safe secure investment opportunity.
2. Government of dubai removed the residence permit guarantee by buying a property.

So automatically no tax free status, coz if you are not a resident of Dubai you can not open

bank account & you are still liable for taxes in your country.

Comment by real estate expert – October 29, 2008 at 12:21 am

3.Nakheel/emaar/dubai holding factor: All these companies hate each other and therefore fight for the

attention of sheikh mohammed, which means the greed and ego overtake logic and feasibility!!! result:

Excessive lands/properties/ mega projects without proper planning & infrastructure in place.
4. Universal law supply Vs. Demand: nobody realises that the already anounced projects in dubai will need

about an extra 6 million people to live in it!!!! (From Lagoons, meydan, dubailand, tatweer, mizin,

industrial projects, emaar, bawadi, the world, the universe, palm deira, port rashid, waterfront, arabian canal,

dubai world central….)Excuse me thats almost double the UAE population.

Comment by real estate expert – October 29, 2008 at 12:29 am

5. Loose the Confidence You loose everything: The investors/buyers are wakening up to the reality & there is

absolutely no confidence in the market not only because of the global financial crisis but mainly because of the

over supply & fear of the crash.

6. Genius Government policies: dubai government is its own worst enemy, at times like this what does dubai do?

They launch new mega projects & new development companies like meraas with ambitious projects that will only

further dampen market confidence.
7. Investor’s security: Dubai’s judicial system is as good as any underdeveloped country with selective rights

depending who the complaint is against.

Comment by real estate expert – October 29, 2008 at 12:35 am

8. No human rights when it comes to dubai police. infact torture and enforced disappearance has become

common in dubai under the umberella of the state security they can attach anything to anyone to reach their

commercial targets.
9. Everybody owns 20% of several properties: Paying a few installments does not make you theowner so when the next installments come due and there is no quick sales like the good old days, what happens? Sell below the price or lose your deposit with the developers…. results in what we call “stress sell”

Comment by real estate expert – October 29, 2008 at 12:40 am

10. Oil prices & Inflation: ofcourse oil prices doubled so did the cost of steel & cement & food & labor

accomodation… result abnormaly increase in construction prices on a weekly basis!!!… so an increase

in property prices due to rising cost….
11. Decrease in Oil prices: Sudden decrease in everything from food prices, to raw materials…..

creating sudden panic as properties are cheaper to build and a fear of further reduction is iminent.
12. There are too many chefs in the tiny real estate kitchen of dubai, have you noticed there aren’t any

happy faces in the media anymore!!! what happened to the so called international anouncements about their acquisitions…

Comment by real estate expert – October 29, 2008 at 12:45 am

13.The Sheikh factor: when the ruling family is desperately getting into everythng from real estate,

to owning or managing coffeshops and bakeries, landries…. then the opportunities for the public is becoming less

and less which means a lot of unhappy UAE nationals and residents…. which everyone know will not help the already

unstable state of dubai.
14. Big brother factor: let there be no doubt Abu Dhabi will eventually overtake dubai for the right reasons.

 money is not an issue thanks to oil & there is no rush to sell everything just to raise funds for the previously

anounced project like in dubai. Dubai’s power in UAE will be reduced due to lack of funds, money talks!!!

Comment by real estate expert – October 29, 2008 at 12:51 am

15. regulatory body with no teeth: RERA is supposed to ensure that developers/real estate agents

/ landlords/ follow the rules and regulations… what happens if a developer or an agent does not follow the law?

 NOTHING… just a 100,000 fine… comparing to the hundreds of millions at stake its a drop in the ocean.
16. Public Prosecution & Corruption: Everything in public prosecution is relative & variable…. there are

cases of misrepresentation by nakheel, for example selling thousands of villas

 and after 2 years just cancelling the project…. nobody can make a complaint.

Likewise several private developers & real estae agents operating in a fraudulent manner are let go off the hook.

Comment by real estate expert – October 29, 2008 at 1:54 am

Take away the speculation and in the end it comes back to fundamentals. Rental yields on finished

properties are currently 2-5%. Interest rates on property loans are 8-9%. Deposits on property

purchase are 30% minimum. If you want to buy a 2 bedroom apartment in a decent location you

would need to be earning US$200k to meet the lending criteria. The stock market in the Gulf has

fallen 25% in th elast 30 days and real estate stocks by 60% in 9 months.

Look for similar movement in property values.

Comment by steve – October 29, 2008 at 5:20 am

Main reason dubai eco will collapse is the RUSSIAN factor.

Comment by GB Bajaj – October 30, 2008 at 1:58 pm

The comments entered by the real estate are very impressive/ Truly an expert.

Comment by Admirer – October 30, 2008 at 4:08 pm

Great comments by the real estate expert as i call dubai an artificial market. There is onemore important point

that expert forgot is what will happen after Sheikh Muhammad as UAE history says e.g.Sharjah.

Advice to all expat go back to your homeland and serve for your country as Dubaidoes not have a

nation like Oman, Bahrain , Kuwait or KSA.

Comment by Fact Finder – October 31, 2008 at 7:18 pm

Well it seems everyone here is pretty sure that Dubai Property Market is done and huge Crash is in Pipeline

(or is already there). Well no matter how much we want it but it’s not entirely Ture. The Factors Mentioned

by “Experts” here does not have much impact on property market. Property Market depends on

three important factors. 1) Creations of new Jobs and thus Movement of New People to area

2) Amounts of loan banks willing to give 3) Pricing of the property
In Case of Dubai, Companies are still very much eager to open up an office here which saves them 30% to 40%

in direct Tax fromtheir own Country. That Means new companies, new Jobs, new demand.

Comment by Real Estate Investor – November 1, 2008 at 8:56 am

it is easier to open an Office in Dubai than Buying BMW in U.K. It Still Costs AED 10,000/-

and every employee gets residence visa (AED 8000 per employee for three year) hence TaxFree status.

Dubai Government investing in own companies E.G opening up Hotels, Telecome, Café and everthing

else is also very Good for Dubai. Since 30% to 40% of Dubai’s Expat population

work in these Companies shows how serious Dubai Government is in bringing people to Dubai.

The 2nd factor is the bank Finance and that’s a problem right now. Due to Global Crisis Gulf Banks have huge

Liquidity problem and that’s the reason they have Stopped Finance,(Yes Stopped) Most Banks have Already

Reached their Yearly tar

Comment by Real Estate investor – November 1, 2008 at 8:57 am

Most Banks have Already Reached their Yearly targets of cash outflow and Simply don’t have cash for mortgage.

Hence the finance buyer which is about 60 to 70% of market cannot buy. BUT from Jan next year Banks

will have fresh cash and hence finance will be back on track. Since Finance will be back the property market

will tend to rise again.

The 3rd Factor Pricing – Yes Dubai prices had increased on massive pace and yes things were gone

up really fast but still prices were not par will other countries (similar metropolitan cities) and now

with the correction in property prices due to the Financial problem the prices are even more attractive.

Comment by Real Estate investor – November 1, 2008 at 8:58 am

No place in the world can sustain to grow above 40% annually but prices only crash only when the demand dries up. Like in U.S and U.K where most citizen already own a home and new migration is only 1 or 2% of population where as in Dubai its at 28% to 40% every year and most people here still live in rented houses. Now with that kind of new people market will not crash but yes the growth can slow to 10% to 15% will is more realistic level.

But everything’s not that great also, Dubai Needs to a lot more to keep growing and attracting

more expats E.G Allow more foreign ownership in local companies, give more Rights to expats,

and introduce permanent residency with work permit.

Please let me know if some one thinks the other way

Comment by Real estate Investor – November 1, 2008 at 8:59 am

The UAE is now a ‘Buyers’s Market’ and I hope developers improve incentives such as back-loaded payments plans etc.

Real Estate Dubai

Comment by Andrew – November 1, 2008 at 1:32 pm

in dubai…reality is, the dubai govt thinks just like any other govt in the world i.e. india, usa, uk, japan etc.

nothing is done in dubai unless its severely needed [i.e. metro] and then its splashed with every god

damn adv from lipstick to lingerie to condoms to repay the loans taken for it. Y?

coz dubai govt HATES HATES HATES to pay for it from its pockets.

Comment by analyst expat – November 1, 2008 at 3:45 pm

To the “Real estate Investor” who does not have a clue of what this place is like: re-read the comments

by the “real estate expert” and by “Fact Finder” and then get rid of your investment as fast as you can and while you can.

Yes, you would be safer if you were in Kuwait for instance, but not here. Get out of your circle and talk

to others and get to know the real picture. Does “Pirate Coast” mean anything to you?

Comment by Yet another fact finder – November 2, 2008 at 1:01 am

Dubai has been trying to imitate the West for a long time now.The current situation is a predicted end to its Western dreams

Comment by Shaiju Janardhanan – November 2, 2008 at 6:10 am

excellent article… it’s so nice to read objective and realistic articles (and comments) about dubai and

their real estate market. i’m absolutely sick of reading blatent property (or any other) propaganda in Dubai’s “Newspapers”.

Comment by michael – November 2, 2008 at 6:55 am

i have read your article. wish to know few details regarding the Rental Index on Residential & commercial Properties.

There is a situation which were i have (a tenant) is going through tough time in Dubai

i have rented a Shop inside a Shopping Mall from past 4 years which was running in losses.

From 10 months the customers have raised and he was doing the Breakeven.

Suddenly the Mall is sold and New Landlord is asking for New RENT 40% increase and he is showing a

document of RERA stating landlord can increase the Rent to Market Rates.
i have put all his money in the business and may go bankrupt incase the situations goes out of hand
NEW LAND LORD IS AWROSTAMANI REAL ESTATE

Comment by Qurashi – November 5, 2008 at 7:26 am

Hi guys, am glad some of the readers find my comments useful. I just would like to add that god forbid if

anything actualy happens to our “super man sheikh” (Sheikh Mohammed) the entire wolves surrounding

him will start eating each other as history has shown in the gulf.
HSBC & lloyds TSB have stoped giving out mortgages to apartments in dubai what does that tell you?

PROPERTY CRASH is inevitable but the question is how hard it will hurt the government who has nothing in the account.
I hope I am wrong, but rumor says sheikh mohammed has had a stroke and an operation.

God help all those who still continue to dream and believe the wonderful animations of dubailand and nakheel!!

Comment by Real Estate Expert – November 11, 2008 at 10:44 am

The real estate market in dubai has crashed already. I bought a few floors from Dynasty zarooni’s sheffield project in dubai waterfront at 2700 dhs per square feet, today i can not sell it 30% below the purchase price. Why because Dynasty Zarooni does not even own the land & they don’t even have an escrow acount, yet people have paid over 20% to their acount and there is no construction on site. RERA knows about it but does nothing.

Comment by Dubai Resident – November 12, 2008 at 2:54 am

Really impress with your knowledge Real Estate Expert. Keep us updated to whats happening in Dubai Real Estate and when it will be a good time to buy probably an year from now.

I am based in Canada real estate here is doing reasonably well small 5% correction which is normal and acceptable.

no major job losses or recession predicted yet Canada has a sound economy.

Comment by Real Estate Crashing – November 15, 2008 at 4:03 am

The nightmare is here…Great analysis by Mr. “Real Estate Expert”

Comment by Dubai Nightmare – November 16, 2008 at 6:50 am

It’s time that speculators lose something. Earning hunderds millions was not normal.
I never believed Dubai, never, it was bluff, very well supported by propaganda. Crisis will clean it up.

Comment by Azizi – November 19, 2008 at 8:11 pm

I wish real estate expert had published these comments in dubai dailies… thousands of small investors

like myself would not havebeen trapped in unrealistic promises.

Today my property is worth 40% less than what I bought it 4 months ago.

I blame the government for bringing so many projects into the market and killing the confidence.

Why are they quiet. Real estate expert how can I get in touch with you for some advice… email?

Comment by Silvia – November 20, 2008 at 3:35 pm

In the 1980s and 1990s, Dubai used to be such a fun place to live in. Good medical, good salaries, good savings.

Today, expats are lucky to save even 5% of their income and stress levels have gone through the roof.

Traffic jams 24 hours a day, near impossible to get street parking, a 45 minute wait to get a taxi.

Indirect taxes in the form of extremely high rent and huge fees on everything related to living in Dubai.

Before, people treated you for who you are. Now they treat you based on what you drive, where you live

and how much you earn. Dubai is no fun to live in anymore, rather it is a materialistic society amidst an ugly

 poorly planned concrete jungle where the rule is eat or be eaten

Comment by Ex-Dubai Expat – November 21, 2008 at 6:35 am

Fortunately avoided the market here as I read the contracts and evaluated the risk given the emerging legal infrastructure.
Very little sympathy for those that bought, as they knew that the potentially high returns came with equally high risk.

Unfair to blame the Gov’t they have been putting the right regulatory structure in place, but this usually takes years.

The region needs a Dubai and I have no doubts it will be a regional powerhouse.
In the short run I expect an 80% drop in values, much like Singapores correction in the late 90’s.

Comment by sulli – November 21, 2008 at 6:40 am

Been in UAE since 1994 but lost the bull market due to over protectiveness any way nothing to cry for,

can see one more coming in the near future as I have seen these happening in the past, unlike India from

where I come from, Dubai is not seen as a permanent residenence for most of the expatriate community

residing here, Most of us especially Indians are phobic of the locals and have been taken undue advantage

by the local youths and some most of the GCC expatriates and in my personal experience worst among these

are the Palestinians who seeems to have no respect to another human being now saying that, since no expatriate sees

UAE as his future home but a stop gap arrangement to make a

Comment by Lost Bull – November 24, 2008 at 2:26 pm

quick buck, which attracted the soldiers of fortune around the world, and persons with questionable past and

 present but with a huge wallet even though there were some sort of regulation put in regarding the money transfers,

there seems to be money flowing in from every were, Now in India we have a huge population and we have absolute

need for housing even it is rare to see such an mega project as in Dubai even with some of the worlds richest persons residing

there, Anyway before coming over to Dubai I used to travel around the world and it surprised me in 1994 why

Dubai did not have MRT which was very much common even in small countries such as Singapore,

And it surprising and at the same

Comment by Lost Bull – November 24, 2008 at 2:44 pm

extremely frustrating that you cannot travel back in the same taxi of other emirate unless you have engaged

 it for a round trip, about just 2-3 years back an inter emirate buses started plying the roads.

Once the real estate market started selling there were lots of people rushing in to buy assuming that they can forsee

a stable future with permanent residence visa status if they bought a free hold property which did not materialise,

again the only option that was left for all to make a quick buck when the boom lasted, Extremely well marketing tools

 were used to attract people from all over the world with a promise of living on beach life style, and compared the

prices to the major cities

Comment by Lost Bull – November 24, 2008 at 3:00 pm

found it to be cheap minus the infrastructure to support such a rapid developement, due to all projects going on simultaneously,companies ,man power, machinery and materials started flowing in and competitiveness within the developers started pushing the price upwards, speculators started rushing in prices went beyond the reach of genuine end user, any product which becomes unaffordable to the end user shall not sustain its existence so the crash in the market was inevitable, But even in this period there are plenty of genuine buyers if the prices are affordable and without high maintenance charges for the upkeep it is upto the developers to recognise, presently there are lots of projects

Comment by Anonymous – November 24, 2008 at 3:15 pm

being shelved, scaled down and going for a rebiding ( face saving tactics), speculators immediately stated off loading their stocks , few with sustaining power shall hold untill they cannot afford to pay their mortgages any more, companies have already started retrenching, rents in Dubai started droping,bank interest rates have incresed, come March ( end of academic year)2009 we will see an exodus of families saying goodbye to UAE since it is not worth for them to be live here any more, and then the real crash starts…….. Advice time : 1. Do not panic this is not a end of the world 2. If you cash start investing in the shares 3. force banks to reduce the interest rates and extend the

Comment by Lost Bull – November 24, 2008 at 3:31 pm

repayment period. 4.Hunt for good bargains in the real estate property market start buying hagle with the developers,5.

This is good news as there is very sustainable future ahead for those who weathers this strom 6.

Live life comfortably as you will not take anything when you are dead anyway 7.

Pray for a good health during this stressful period ……… May God Bless U.A.E and its Rulers

Comment by Lost Bull – November 24, 2008 at 3:41 pm

Looking for real estate in Dubai? Property Portal connects you to hundreds of sales and investment opportunities

in the world’s hottest real estate market.

Comment by server Baig – November 25, 2008 at 5:29 am

money-grubbing pigs deserve to wallow in their own filth

Comment by rich man poor man – December 1, 2008 at 6:54 am

well dune dubai dream..!!

Comment by ignorent – December 6, 2008 at 4:08 pm

to all Dubai haters i say “moral indignation is jealousy with a halo”……

Comment by Wells.H.G – December 11, 2008 at 1:36 am

i believe that rich man poor man’s comment is logically directed towards the party that created this

worldwide financial crisis, which naturally is not Dubai…..see what i mean !?

Comment by Wells.H.G – December 16, 2008 at 3:01 am

 

Dubai, Abu Dhabi property sales at near standstill – Real Estate – ArabianBusiness.com

Dubai, Abu Dhabi property sales at near standstill – Real Estate – ArabianBusiness.com:

Property sales in Dubai and Abu Dhabi have ground to a near standstill and resale prices have dropped for the first time due to the global financial crisis, agents have said. Off-plan sales have been the hardest hit as speculators struggle to sell on their properties because potential buyers are finding it more difficult to secure financing, UAE daily The National reported on Sunday.

Speculators then face problems meeting instalments plans, forcing them to lower prices in an effort to make a quick sale, the newspaper said.

“It has been going on for a week now. I have seen prices going down about 10 percent everywhere, even in Dubai Marina and Downtown Burj Dubai,” Khaled Elqassim, the sales manager at Dubai-based property broker AAA, was quoted as saying.“Pretty much all the secondary market is trading at less than it was before the financial crisis,” Karen Lay, the marketing manager at LLJ Properties in Abu Dhabi, was quoted as saying

READERS’ COMMENTS
View all comments (9)

Have your say
REAL ESTATE PRICES
Posted by Padmanabhan, Dubai, United Arab Emirates on Sunday 26 October 2008 at 17:05 UAE time

Honestly, a sigh of relief! The Real Estate SEctor was giving a hard time to the residents of the UAE using monopolistics and hoarding practices. You will find advertisements coming in the paper claiming that 90% SOLD!!! That is how they maintained these hype pricing so far. Now that the world financial support system is crembling a highly geared state like Dubai can not do much. A country who is putting an national budget of 60 Bn but announcing projects with trillions does not make sense… there was something wrong somewhere and this testing times will get it all fixed… The time of living on credit cards and borrowed money seems to be coming to an end..good bye speculators and gamblers!!!. At least honest people can lead a calm life after this potential turmoil, I hope!

Inevitable
Posted by Rahul, Dubai, UAE on Sunday 26 October 2008 at 16:13 UAE time
This was bound to happen.In my case, I was denied the loan even though the combined amount of me and my brother was in the amount of AED 20,000.UAE has a sound domestic demand for housing.However, the banks look at the age and the income of the individual when it should be looking at the credit rating.To add salt to the wound the speculators raise the prices to almost 45% of the actual price and expect people to buy.With America already going down,it will be a matter of time that the speculators will start to suffer once this vicious circle of greed completes itself. Personally I think it is time for market regulations to be put in shape and sound laws implemented.The speculators are getting what they have sown all this time.

Property Prices
Posted by Maxim, Dubai, UAE on Sunday 26 October 2008 at 15:43 UAE time

This is the beginning of your end dear speculators/real estate agents. You guys deserve that, you guys earned exorbitant amount by squeezing end users. Just imagine, till recently an end user could not buy a apartment/villa directly from a well known developer such as Emaar/Nakheel. Every unit from these developers had been gobbled up by so called speculators with in hours. (I would say greedy fly by night business men). When a real buyer/end user wants to buy Prices of flat/villa shoots up in few hours after the sale.

Real Estate prices Dubai
Posted by Investor, Dubai, United Arab Emirates on Sunday 26 October 2008 at 15:37 UAE timeI fully agree with the article, the issue as i see it is that Banks and Financial institutions have dropped their financing percentage to 60% and 65% , not only they are giving an indication to the market that the expected correction in the real estate sector could be in the range of 40% to 45% but also they are making it really difficult to buy a house in Dubai, which will lead to an inevitable correctionI don’t understand the contradicting position between Government officials and banks, either that UAE has a strong real estate sector as per the Government officials or it does not as per the Banks financing position. If banks do not have the financing ability then they should not push away investors by putting unreasonable financing conditions.

Property Prices Down

Posted by Robert Parker, Dubai, UAE on Sunday 26 October 2008 at 15:32 UAE timeThe inevitability of prices coming down in Dubai (and Abu Dhabi) has long been foretold it was never IF it was always WHEN. The question now is how much – the report of 10% drops is insignificant with the rises seen even this year in the UAE – my belief is that we are about to see significantly higher drops as the word gets out and speculators try to offload.
In some areas 50% drops are possible but I would suggest 30%-35% will be the norm.
OK if you bought a couple or more years ago – tough if you bought in the last few months!

Secondary market is cheaper now
Posted by Vision, Dubai on Sunday 26 October 2008 at 14:59 UAE timeThe secondary market for Downtown Burj is 20- 30 % less than what Emaar is offering directly to its buyers. It looks like there is an opportunity for interested investors if they look at Burj Downtown.

Property prices
Posted by angelo, Dubai, UAE on Sunday 26 October 2008 at 14:35 UAE time
It was commented by more learned persons than I over a year ago that the speculative buying of properties would implode on itself – this was also when the leaders of the comunity started to implement controls hopeing that real estate compnies would start self regulation. Maybe this will bring properties to their real value

Its Finally Arrived
Posted by Uzair waheed on Sunday 26 October 2008 at 14:12 UAE time
Its finally arrived – the much anticipated dip in Dubai property prices. If prices have been slashed by 10% in a week, what can we expect in the next six months.?
prices headed down

Posted by Mermer, dubai, uae on Sunday 26 October 2008 at 10:46 UAE time
As long as dollar gains value. Property prices is going down further. Just think if you have house purchased for 600k(~70k GBP gpb/usd=2.05) dirham 1 year ago. and if it cost now 1M dirham (~175 GBP gbp/usd=1.6) . now compare it 70k GBP to 175k GPB. :) Wouldn’t you like to sell the house here and buy one in London where prices already headed down.

Now E-Complaint System RERA Dubai

E Complaint System via RERA Dubai Wesite

Link:

http://www.rpdubai.com/rpdubai/home.jsp?lang=0

From the Official Dubai Real Estate (RERA) WEbpage – Property Buyer of Dubai be carefull

original published RERA Dubai:
Link:
http://www.rpdubai.com/rpdubai/jsp/template.jsp?pageID=40004&&lang=0

Two very simple and powerful words for Buyers who want to buy privately?? Buyers Beware!
Never pass money to anyone if you do not have absolute proof of their ownership, authority to do the transaction and if you have any doubts. When you get a “sick” feeling in your stomach when handing monies over, this is usually to forewarn you of danger in what your doing. This is your intuition speaking to you, so listen to it please.

Do not deal with an unregistered broker or agent, always ask for their Brokers Registration card. When speaking with a Seller, ask for the documents to prove that they own the property. Ask for a copy of their passport and match the signatures. If the property is in two or more names, all of these parties must sign the sale agreement in full.

Buyers should use a Buyer’s Agent. Please refer to this section in the Brokers web pages, these are a list of the Registered Brokers. DO have your finance fully “pre-approved: before you commence looking for a property.

When buying “off-the-plan” only pay into a RERA approved trust account.

The cheque and receipt must read in the name of the project. If you pay your monies into the developer, agent, or any other account, the person or company you are dealing with is breaking the law.
Approved projects are listed on this website.

Do protect yourself and use a lawyer before you sign anything.
It is not as easy as you think.

Dubai SchonProperties announces final schedule for Lagoon project

Gulfnews: Schon announces final schedule for Lagoon project

original published Guld News October 19, 2008

http://archive.gulfnews.com/business/Development/10252897.html

Dubai Property PR – Stars the Painkiller – it will only work in the short term-Left with stars in their eyes – The National Newspaper

Left with stars in their eyes – The National Newspaper:

……Sports stars were also out in force during Cityscape 2008.

The British boxer Amir Khan became the brand ambassador for the Tejarah Executive, a residential tower to be built in Ajman, while the seven-time Formula One winner Michael Schumacher launched the Michael Schumacher World Champion Tower on Abu Dhabi’s Reem Island, in partnership with Marasi Real Estate Fund.

This is the second project that Mr Schumacher has lent his name to in the UAE. He also tied up with the developer ACI earlier this year to work on Michael Schumacher Business Avenue in Dubai.

read more:

Left with stars in their eyes – The National Newspaper:

Kippreport – Arrested development

Kippreport » Cover Story The Work marketing » Arrested development

October 9, 2008

The branding fallout of Dubai’s anti-corruption drive has, unfortunately, been coupled with the lack of proper crisis management, says experts.

Summer is usually a quiet time for business news in the Middle East. Offices empty as employees look to escape the heat and it becomes even harder than usual to schedule a meeting. Slow-news days turn into slow-news weeks.

That wasn’t the case in Dubai this summer, however. Almost every week of the last few months has brought fresh revelations of high-level executives – particularly in the finance and real-estate markets – being arrested or questioned by authorities as part of Dubai government’s crackdown on corrupt business practices.

A former CEO of Deyaar Development (along with other staff members), a senior executive at Nakheel, an Etisalat employee, a former vice-president of Dubai Islamic Bank, two former executives of Tamweel (working for Istithmar World at the time they were questioned), the CEO of the Lagoons project, and four Sama Dubai execs have all made the headlines of regional – and international – media since April. And all for the wrong reasons.

Dubai must continue to deliver on its promise of zero tolerance. “The next couple of months are going to be crucial,” he says. “It’s going to be very interesting to watch.”

READ More:

http://www.kippreport.com/kipp/2008/10/09/arrested-development/

Consolidation on the cards – Real Estate – ArabianBusiness.com

Consolidation on the cards – Real Estate – ArabianBusiness.com: “Consolidation on the cards”

Thursday, 09 October 2008 by Andrew White
original published Arabina Business

There was an air of unreality at last week’s Cityscape event. No change there, you might think — we have long got used to the fantastical models of contorted towers, billion-dollar figures tossed around like confetti, and outlandish announcements in which every project is declared ‘unique’ and ‘iconic’.

Yet while everybody was busy looking at the sky, craning their necks upward to the tip of Nakheel’s new mega-tower, the markets on which the Gulf’s economic foundations are set were dropping through the floor.

Over the course of a week intended to celebrate the strength of the Gulf real estate market and reassure investors spooked by the collapse of housing markets in the US and Europe, hundreds of millions of dollars was instead wiped off the market capitalisations of the region’s property players.

By the end of trading on Wednesday, shares in Emaar, the Middle East’s largest real estate company by market capitalisation, had dropped 29 percent so far that week, and 63 percent year-to-date.

In Saudi Arabia, Dar Al Arkan Real Estate was down 23 percent that week and 50 percent year-to-date, while Qatar’s Ezdan Real Estate finished down 56 percent from its early May high.

The Gulf’s five biggest publicly-traded real estate firms were down an average of 40 percent in 2008, and Cityscape week — the supposed highlight of the Gulf real estate calendar — ended up as one of the bloodiest on record.

It was reported last week that some of the scale models used at shows such as Cityscape cost real estate clients as much at $272,000 a pop.
As the markets continued to tank, the suspicion dawned that some of those scale models might actually represent a better long term investment than the towers they are meant to symbolise.

Looking forward, we may be on the cusp of a new wave of consolidation in the Gulf property market. In any other region, the Gulf’s real estate giants would be prime targets for a takeover, yet the Gulf’s strict foreign ownership rules eliminate that possibility.

Rumours of a merger between two of the UAE’s largest real estate developers surfaced last Monday and have not died away despite noncommittal shrugs from the two parties. And nor will they as long as the Gulf’s real estate titans continue to shed weight so dramatically.

In these uncertain times, investors are looking for a clear sign that such a critical sector is able to adapt to the shifting global economic climate. Even Gulf developers will be unable to reach for the sky, without first planting their feet firmly on the ground.

Andrew White is the deputy editor of Arabian Business English.

UAE warned over banks’ real estate exposure – Banking & Finance – ArabianBusiness.com

original published Arabian Business Octobe 08. 2008

http://www.arabianbusiness.com/533552-uae-warned-over-banks-real-estate-exposure

Morgan Stanley on Wednesday cautioned UAE lenders over their exposure to the real estate sector and said the central bank may have to reconsider allowing lenders to set up real estate subsidiaries.

As the real estate market in the UAE matures over the next two years “it may be necessary to evaluate the extent of the banks’ exposure to this sector”, the US bank said in a report on the UAE economy.

“The supervisory authorities may need to rethink the current rules governing the exposure of banks to the real estate sector,” it also said.

Morgan Stanley said the central bank may have to reconsider “the merits of the March 2007 Central Bank resolution that allowed UAE banks to establish real estate subsidiaries”, and establish “clear guidelines for the classification of loans exposed to the real estate sector”.

Morgan Stanley said this might be necessary because of the difficulty in assessing banks’ claims on quasi-public companies that are heavily involved in the real estate market “given the lack of transparency on the magnitude of this exposure”.

However, it stressed the potential risks to banks from a mild correction in the real estate sector should not be overstated.

Morgan Stanley said much of the concern in the market about the affect of a correction in the real estate sector could be put to rest “through the provision of more timely, consistent and comprehensive data on the monetary and banking sector”.

“…the need for greater market transparency on the part of market participants and regulators cannot be overemphasised at a time of considerable uncertainty in global financial markets,” it said.

Emaar may take over Lagoons project – Real Estate – ArabianBusiness.com

Emaar may take over Lagoons project – Real Estate – ArabianBusiness.com

Emaar Properties may take over Sama Dubai’s $17.7 billion Lagoons development in the wake of delays to the project and the arrest of several senior Sama Dubai executives.

Sama Dubai, part of state-owned conglomerate Dubai Holding, is currently in talks with Emaar over “transferring some of the development responsibilities” for its flagship development,

UAE daily The National reported on Wednesday, citing three sources familiar with the talks.The Lagoons consists of seven manmade islands in Dubai Creek.

Four senior executives of Sama Dubai, including CEO of the Lagoons project Abdulsalam Almarri, were arrested in August over allegations of bribery and mistrust, newswire Zawya Dow Jones reported, the latest in a string of executives caught up in the Dubai government’s crackdown on corporate corruption

70% ‘are being priced out of Dubai property market’

70% ‘are being priced out of Dubai property market’

by Soren Billing Tuesday, 30 September 2008

A correction in Dubai’s real estate market could be exacerbated by a mismatch between demand and supply, with the bulk of demand being for more affordable properties than the ones that are coming on stream.

“Currently the supply is geared more towards the high end segment in an environment where prices have appreciated rapidly, so it’s like a double whammy,” Shuaa Capital real estate analyst Roy Cherry said.“

Seventy percent of Dubai’s population has been priced out and there are very few products that do target the low and mid income segment, which is effectively where the bulk of demand is.”

The city will continue to offer opportunities for developers who are able to target those income brackets.“
Not everyone in Dubai can afford a four million dirham property,” he said.Shuaa Capital is forecasting a correction in Dubai property prices, beginning in 2009 and continuing into 2010.Cherry distinguishes between the Dubai and Abu Dhabi market, with the former being “more complicated” due to the mismatch in supply and demand and project delays that have helped inflate prices.Abu Dhabi is currently a more predictable play: demand is soaring and is likely to outstrip supply over the next three to four years, although negative sentiment in Dubai could have a contagion effect.

Both markets have seen a lot of speculative activity in recent years, but with less supply coming on stream, the impact of a correction will be smaller in the capital.The emirate is also making significant investments in affordable housing.

The Abu Dhabi government has recently granted Aldar over 10 million square metres of land for low income housing projects.“I think overall the Abu Dhabi market is a healthy market…and I think Abu Dhabi companies will continue to do well. Not only because of the excess demand, but also because companies like Aldar Properties are already initiating work on low income housing projects with government encouragement,” Cherry said.

Update :Buyers are still angry – Just another Blog about Ebony and Ivory Tower Dynasty Zarooni – Al Fajer Properties

Advertisement for Ebony and Ivory Towers September 2008 -

Jumeirah Road Dubai – Dynasty Zarooni / Al Fajer Properties

Picture 7starsDubai Spetember 2008

original published:
http://reradubai.wordpress.com/2008/09/22/dynasty-zarooni-fails-to-trick-rera-case-critical/

DYNASTY ZAROONI FAILS TO TRICK RERA. CASE CRITICAL

Dynasty Zarooni is trying to cover its loose ends but to no avail. The real estate company still has not come up with a decent explanation for its disgusting trick to misquote facts about the ebony and ivory project. Their fake pictures issue still hasnt been addressed by them, insted they go ahead and make these videos and post some insipid articles to make themselves look better.

They’d rather just give out the truth about their misrepresenting tactics to avoid all of the negative publicity.

They really do think the investors are stupid to forget about it.
Please give out an explanation

Investors, please confirm videos. In the meantime, they are releasing such positive made up thing about themselves:

These articles are such a preliminary hoax that even someone with a limited IQ can see right through them:

http://www.mumbaimirror.com/net/mmpaper.aspx?page=article&sectid=5&contentid=20080917200809170312369856aecaf73

http://archive.gulfnews.com/business/General/10240118.html

This is a shameful act

___________________________________

Brief Background:

A few days ago, a number of comments and questions were posted on various Dubai real estate blogs regarding some of the activities of Dynasty Zarooni for the sale of the Ebony and Ivory
Towers that are being developed by Al Fajer Properties.

Dynasty Zarooni deemed this a smear campaign and issued a strong statement through Gulf News about getting a clearance from RERA, however the initial questions remained unanswered by them.

I conducted an independant but simple and unbiased investigation of the case. The following is a factual representation of my alarming findings.

The questions raised here need to be answered in order to safe guard investor rights and protect Dubai’s reputation.

Violations of RERA Laws Committed by Dynasty ZarooniMisrepresentation in the Promotional CampaignUnauthorized Activity (Not in accordance with the commercial license Real Estate Brokerage)

1. Misrepresentation in the Promotional Campaign

Under RERA Laws, an Agent/Broker violates the law by giving misleading/fabricated information or using false images and creating misrepresentation for an Off Plan Sales Promotion Campaign – a criminal offence in U.A.E.

read more: http://www.zaroonidynasty.wordpress.com/

http://zaroonidynasty.wordpress.com/2008/09/15/biggest-dubai-property-scandal-revealed/#comments

or: http://www.dynastyzarooniivory.wordpress.com/
http://dynastyzarooniivory.wordpress.com/

or in Blogs below: original published:
http://reradubai.wordpress.com/footage/

FOR FURTHER INFORMATION, PLEASE VISIT SOME OF THE UNDER MENTIONED BLOGS:

http://dynastyzaroonifraud.wordpress.com/

http://dynastyzarooniscam.wordpress.com/

http://dynastyzarooniscandal.wordpress.com/

http://zaroonidynasty.wordpress.com/

http://zaroonidynastyfiasco.wordpress.com/

http://zaroonidynastyscam.wordpress.com/

http://dubaiscams.wordpress.com/

http://dubaiscandals.wordpress.com/

http://kabirmulchandani.wordpress.com/

http://masterofscams.wordpress.com/

http://uaefraud.wordpress.com/

http://dynastycom.wordpress.com/

http://dynastyinfo.wordpress.com/

http://dynastyzaroonirealestate.wordpress.com/

http://dynastyzaroonijumeirah.wordpress.com/

http://dynastyzarooniivory.wordpress.com/

http://dynastyzarooni.blogspot.com/

Kippreport » Cover Story Real Estate The Work » Dubai Boomtown no more?

Kippreport » Cover Story Real Estate The Work » Boomtown no more?

September 24 , 2008

Yet another company has come forth and said the Gulf building boom is threatened by rising construction costs. ESI International, a project management and training company, says soaring salaries for technical professionals is threatening projects in the Gulf region worth $2.4trn.
Previously, most of the hand-wringing about the sustainability of the region’s building boom has resulted from the rising cost of raw materials, in particular steel and cement, or from concerns that prices would undergo a correction as an oversupply comes onto the market.
Yet cost pressure on the steel and cement front seems to have eased since the start of this year. Gulf

News reported today that the price of steel in the UAE, after rising from Dh3,000 ($817) per tonne early this year to Dh 6,000 ($1635) over the summer, had dropped again back to a more moderate Dh3,500 ($954).

The ESI report is part of a string of warnings about the sustainability of the region’s building boom. In January, Saudi-owned developer Rakaa Properties grabbed headlines with a report that some 40 per cent of the current Dh1.5 trillion ($400 billion) worth of real-estate projects in Dubai had been “temporarily suspended” because contractors and developers could not afford to pay for raw materials, the cost of which had shot up in preceding months.
While steel and cement have come down, concern about costs obviously remains.

ESI is now saying that it’s not just the cost of raw materials that is threatening the boom, but the rising salaries of professionals such as engineers and project managers. Perhaps the statement can be taken with a grain of salt, as it appears to be part of a prepared statement by the company – in other words, a press release.

Business Intelligence Middle East carries the press release in its entirety, noting that ESI International is “the leading provider of project management training and business analysis” and Haddad is “an expert on the attraction and retention of key personnel.”

Still, the fact that companies feel emboldened enough to promote themselves by warning of a slowdown in Dubai’s much-vaunted boom speaks of the obvious strain on resources, both material and human, that is being exacted by growth pressure and rising costs.
If projects’ completion is truly threatened, it complicates efforts to forecast future movements of the property market. Dubai in particular is increasingly talked about as a potential real estate bubble, with regional investment bank EFG-Hermes recently predicting a 20 percent fall in housing prices by 2011 after a peak in the first half of 2009.

Morgan Stanley has mentioned a Singapore-style meltdown, following the model of the Southeast Asian statelet in the 1990s, as a possible worst-case scenario for Dubai.
Yet it’s difficult to imagine that happening if development stalls and builders can’t afford to build fast enough to keep up with rising demand, be it due to rising salaries or soaring raw materials costs.

What is a contract ?

Contracts are promises that the law will enforce. The law provides remedies if such a promise is violated, and recognises the performance of that promise as a duty. Contracts arise when a duty does or may come into existence, because of a promise made by one of the parties.

In order to be a legally binding contract, a promise must be exchanged for adequate ‘consideration’. Adequate consideration is a benefit or detriment a party receives, which reasonably and fairly induces them to make the promise.

An example of this would be purchasing an off-plan apartment from a property developer. The developer and the buyer come together to discuss the terms of the exchange (in all likelihood, the purchase is outlined in a written agreement). Thus, they have fulfilled the first requirement of consideration. To meet the second requirement, there must be a mutual exchange. In this case, the property developer (if one of the main developers in Dubai) provides ownership if the apartment is in a freehold area of Dubai, while the buyer provides payment. Third, the bargain terms must be of value. The apartment is worth what the buyer hands over. Therefore, this contract has met its consideration requirement, because it fits all elements of consideration.

The UAE is essentially a Civil Law jurisdiction heavily influenced by French, Egyptian, Roman and Islamic law. The increasing presence of international commercial contracts has resulted in the application of English common law practices, further influencing the UAE legal system.

The law relating to contracts in common law specifies that the agreement must consist of an offer and acceptance, and also consideration for a contract to exist. It is important that buyers learn to recognise these elements in contracts they plan to sign.

An offer is an indication by one person to another of their willingness to contract on certain terms without further negotiations.

A contract is then formed if there is express or implied agreement. A contract is said to come into existence when acceptance of an offer has been communicated to the one making the offer.

Another important element to understand is misrepresentation. Misrepresentation is a false statement of fact made by one party to another party and has the effect of inducing that party into the contract.

For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation.

In the UK, a finding of misrepresentation by a court of law allows for a remedy of rescission (termination of the contract), and sometimes damages depending on the type of misrepresentation found to have taken place. However, common law principles are not explicitly recognised under UAE law.

Despite the differences between legal systems, lawyers like Carol Alderson in Dubai, who has been practicing in the UK and the UAE for the last 25 years, vows to bring about more robust protection for property investors.

“The way sales agreements are drafted in Dubai is very one-sided in favour of developers, and unless customers are aware of their legal rights, they will not know how to protect themselves from becoming unfairly disadvantaged,” said Alderson, who is a senior partner at Samial Al Midfa Advocacy and Legal Consultants in Dubai.

“If we get a precedent ruling in a Dubai court against a developer for construction delays, then it will deter future developers from making promises that they cannot keep and will change the way sales and purchase agreements are drafted here,” she explained.

Adopting previous court judgment is another principle of a common law practice that is not recognised in the UAE. However, such precedents may in Dubai be presented to the court for persuasion purposes.

.

Huge Delay – DMCCA – Jumeirah Lake Towers master developer encounters some ground realities

JLT master developer encounters some ground realities
By Nicole Walter, Senior Features Writer

original Published:

http://www.propertyweekly.ae/articles/this_issue/20009436.html

Caught between a ‘lake’ and a hard place is DMCCA, the master developer of Jumeirah Lakes Towers. It is a situation that DMCC is trying to get out off as it tries to find enough space available for construction activity to take place, but without hampering the movements of those residents at the completed towers.

“Any time you mix construction traffic with personal traffic it’s a challenge,” states Bryan Wilson, DMCC’s Executive Director Property Development. “It’s great to be the first person in, but means a lot of time having to compromise on living conditions until construction is completed.”

DMCC had earlier allowed construction vehicles access to the sites where the four ‘lakes’ would be as a way of keeping them off the roads and clogging up traffic. But now, they are driving on the boundary roads.

“Maybe with a different master-plan you could have done something different, but we have the lakes in the middle,” adds Wilson. “The owners feel it is time to focus on the landscaping as people have moved in — so we had to move people out of the lakes.”

This has increased the chance of residents crossing paths with construction vehicles. “We’ve assessed the situation after hearing some complaints and decided to put in temporary lighting to make it safer, as safety is our number one priority for construction workers and residents,” Wilson comments.
The four lakes
There are four lakes in JLT: Almas East & West, Elucio and Allure, each supplied by seawater via a sophisticated circulation system. The Elucio will be completed by year-end.

JLT towers come in trios set around the lakes. “We need a cluster of three to be out of the ground to a certain extent to begin the work around them,” Wilson informs. “The closing of the landscaping tender package is imminent and what follows will change the feel and look of JLT from a construction site to actually becoming a liveable community.

“There are 14 towers with approval at different stages of occupation. We’re now transitioning from around half a construction site and a quarter community to a community by end 2010 when all towers are completed.”

There are to be 79 towers in JLT proper and another eight on its embankment. Master planned by Nakheel and taken over by DMCC two-and-a-half years ago, JLT’s completion cannot come fast enough as far as Ahmed Bin Sulayem, DMCC’s Executive Chairman, is concerned.

“Completion within three years would have been the best scenario for me but each developer faces his own challenges in the construction market,” Bin Sulayem notes. “They may have several towers in JLT that they have to manage, so we are putting pressure on them to complete construction as soon as possible.

“We get all kinds of excuses and I can’t accept them, especially that we have now moved into our building (Almas). JLT is a prime location, they are not going to find another plot on Shaikh Zayed Road within the next six years — this is the heart of New Dubai where everyone wants to be.”

Infrastructure issues

Half of the roads circling Jumeirah Lakes Towers are part of the western-perimeter network project, which is undertaken by the RTA.

“That’s out of our control, they have awarded the contract but have one-and-a-half years to finish the roads,” says Bryan Wilson of DMCC. “We can’t wait for them to finish, so we put up our own temporary measures in the interim.”

As regards Internet connectivity for the cluster’s residents, DMCC is intent on offering residents a choice, a first in Dubai. “I want practicality for our end-users. I believe that is what Dubai, like Palm Deira is also looking at,” says Ahmed Bin Sulayem. “They manage in other countries, so there is no reason why they can’t manage here.”

Du was supposed to be the sole provider. “We have Etisalat and Du now in one room pressuring them to execute and agreement to share the infrastructure within JLT,” affirms Wilson.

Gulf property market: a never ending boom? – The National Newspaper – Sent Using Google Toolbar

Gulf property market: a never ending boom? – The National Newspaper

The sub-prime mortgage market crash was the first salvo in a global jitter concerning the health of the property market. Economies that had registered record property price rises are now reporting successive monthly falls, adding to general unease and uncertainty.

In the UK, where more prudent mortgage lending practices were supposed to be in operation, the news on the property front is grim. Over the past six months, UK house prices have dropped at an annual rate of 11.4 per cent, and over the past three months at an alarming 16.1 per cent. The spectre of the crash in the early 1990s looms and even Alistair Darling, the chancellor of the exchequer, has forecast a 30 per cent fall in house prices before things get better.

What has gone wrong? Are markets in different geographic locations and going through different economic cycles, immune from real estate price tremors in other parts of the world? The key is a perception on whether a particular real estate market has reached a critical asset price “bubble”. Bubbles burst at some stage, but it is the exact point of the impact that is uncertain, as well as the consequent speed of a fall in prices.

In the Gulf, there is no sign yet that real estate prices have fallen, but there are also signs that the massive infrastructure and housing construction boom is beginning to face supply bottlenecks. With steel and cement prices rocketing, some projects are being quietly delayed, while others in the drawing stage are being shelved. While each of the Gulf countries has its own real estate market cycle, a reversal in the fortune of one Gulf market might have a knock-on effect on others.

There is some merit for a pause in any upward march in real estate prices. In the western economies, a gentle collapse in the housing market bubble can be socially beneficial. When prices were rising sharply, it was the younger and generally poorer people in society who were left out of the property ownership ladder, while older and richer people, who already owned houses, became better off. In the Gulf, a similar phenomenon was beginning to emerge but, unlike the West, it was based on resource allocation to different real estate projects.

Younger Gulf nationals wishing to buy their first homes were suddenly being outbid by rising prices, as construction resources were channelled to more lucrative penthouses, second homes or cost-plus government infrastructure projects.

In the West, the housing market began to feel some strain when the ratio of earnings to house prices deteriorated. In the final analysis, it is the share of a household’s income that is taken up paying off the mortgages – even at low interest rates – and the ability of young first-time buyers to get such mortgages, that determines purchasing-power ability. When house prices are rising more than 30 per cent a year, this makes buying a home out of reach to many. What saves some markets is the infusion of liquidity from external sources. London property, for example, was boosted by different waves of buying from Americans, Arabs, Asians and east Europeans.

Similarly in the Gulf, one cannot talk about a homogeneous market. For whom are the different real estate projects being built? Construction in some Gulf states is trying to attract buyers from other Gulf states which have either more purchasing power or a shortage of supply. As such, if economic circumstances change in these countries, or their own construction sector starts to generate enough supply, then these states will be left with a massive over capacity and the beginning of a price-bubble burst.

Demographics is a key factor regarding which Gulf property market will flourish and which will ease off. For countries such as Saudi Arabia and Oman, with larger and a younger growing population, there is a genuine need for affordable first-time homes, rather than luxury second homes or penthouses. For such countries, natural demand exists and it is up to imaginative and cost-conscious construction companies to meet this viable long-term demand. Other Gulf countries with smaller population bases seem to construct real estate projects and then create demand after the fact through slick marketing and an appeal to different “lifestyles”.

There is a limit to this type of demand creation, though. At some stage supply will outpace demand and prices will ease unless a new round of external investors and “new” demand is generated to take up the slack of “older” demand.

Again, for some Gulf countries, the marketing of a lifestyle, with free sunshine all year round thrown in, has tapped non-Gulf expatriates, ranging from movie stars to football players, but the supply of these VIPs is limited, unlike the less glamorous but larger home-grown population demand of other Gulf countries. Should expatriates also begin to feel the chill of economic recession back home, and declining property values, then prospects of a second home in the Gulf becomes less attractive.

Economic globalisation has a price.

The Gulf is helped by government-led infrastructure projects, with Saudi Arabia taking the lion’s share in the form of various economic mega cities. Such initiatives will take up the slack from private sector projects, and reduce the effects of a slowdown.

In the long run, even such mega projects are at the mercy of oil price fortunes and government budget surpluses. Should such factors coalesce – foreign purchases slowing, high commodity prices, high inflation and a higher cost of borrowing – then the Gulf property boom will start to ease back.

Dr. Mohamed Ramady is a former banker and Visiting Associate Professor, Finance and Economics Dept. at King Fahd University of Petroleum and Minerals, Saudi Arabia.

Sold short by the developers of Dubai – The National Newspaper – Sent Using Google Toolbar

Sold short by the developers – The National Newspaper

It sounded like the kind of home most people dream about. With a private beach on the doorstep, perfectly landscaped courtyards and a choice of seven gyms, Jumeirah Beach Residences (JBR) was set to become the epitome of lavish beachside living.

Set along the north shore of Dubai Marina, and with the Palm Jumeirah close by, the 36-tower project was going to offer “a year-round beach resort lifestyle” to its anticipated population of 25,000, according to the sales pitch used to attract investors to the Dubai Properties development.

Buyers began moving in to their new homes last year and looked forward to the day when their dream would be made complete with access to their own private beach park and gym complexes. But that day never came. In June, they were horrified to learn that a significant part of that beach would be used as a car park, while only two of the seven community gyms would be built.

“This is a massive part of the lifestyle that was sold to us,” said Wassim Islam, who bought a three-bedroom apartment at JBR. “It’s changed my perception of a development from something that was desirable to something that is just a residential estate. While the value of my property has gone up, I would not be able to afford the lifestyle sold to me now.”

This is just one of countless stories that have prompted a change in the way Dubai’s property market is regulated, aimed at making sure investors get what they paid for.

Residents of JBR can at least take comfort in the fact that their homes were built and are now worth about three times the purchase price.

The same cannot be said for those who have ploughed thousands of dirhams into projects that have either been delayed or cancelled. These people were not necessarily pining for the high life. All they wanted was a home they could afford, and in a location that was likely to increase in value.

In early 2006, Lorenza Gazzola, a Dubai resident, bought an off-the-plan apartment in Dubai Lagoon, a development by Schön Properties, a Pakistani company. Attracted by the project’s location away from the hustle and bustle of central Dubai, and even more so by the price of Dh600 (US$163) per square foot, Ms Gazzola thought it would be the perfect investment. An attractive payment plan also alleviated the need for a mortgage, which few banks were offering at the time.

“When I first saw the Dubai Lagoon project, I was impressed by the number of buildings, the lagoons and the greenery. It felt like a perfect family community, with a friendly and quiet environment,” she said. “It wasn’t marketed as a luxury development, but I was happy that finally someone with a limited income like me could purchase something affordable, and without having to pay high interest rates to the bank.”

Two years on, Ms Gazzola has nothing to show for her investment. After a series of delays over the project’s design, construction finally began at the end of last year. But progress stalled in May, when the contractor ran into difficulties because of the surge in construction costs.

Pressure from angry investors and the Dubai Real Estate Regulatory Authority (Rera) has forced Schön to resume construction on the first two zones of the seven-zone project, while an additional contractor has been appointed to build zones three and six. Another contractor is expected to be appointed for the remaining zones and the project has now been marked for completion in 2011.

“My dream of buying a home has turned into a nightmare,” Ms Gazzola said. “I was looking forward to moving in this year. I have so far spent the majority of my savings on a modest property that hasn’t yet materialised.”

Dubai is not the only emirate to have felt the brunt of property scandals.

Earlier this year Tameer Holding, a company based in Sharjah, decided to put its Dh30 billion AlSalaam City development on hold because of problems with power and water supplies.

Those who had made payments towards their property in the past three years have since been left in limbo while awaiting the development’s fate.

Although Tameer has offered them a refund with interest, or the chance to transfer their investment to another project, many are reluctant to accept.

Martin Nield, an investor from the UK, bought 10 townhouses in the project at Dh600 per sq ft. He has so far paid Dh2 million. “I don’t think it’s acceptable just to be offered your money back. Some people have been making investments for the last three years and have paid around 70 per cent,” he said. “But how long can it continue to be on hold for? The land was graded two years ago, but all that’s been built are eight show houses.”

The common thread between all of these projects is that they were launched between 2004 and 2005, a time when big project announcements were all the rage, but legal protection was limited. Risks were taken on the premise that huge returns on investment could be reaped. For some, the gamble paid off.

“Many have made huge profits on property here,” said Niall O’Toole, a partner at the law firm Clyde & Co. “But others have been naive and haven’t accurately calculated their risk.”

Dubai’s legal structure, although improving, has had to play catch-up with the market. The arrival of Rera last year came as a relief to many. All developers now have to be approved by the authority and have an escrow account, into which all money paid by investors goes and is used solely for the development’s construction.

But while Rera has instilled some confidence in the market, many of the problems faced by investors today stem from projects launched before it was set up, at a time when there was no protection via escrow accounts.

“Contractually, these investors are not without rights, but how effective are they? If the developer is broke and the contractor is broke, what can they do?” said Mr O’Toole.

But better legal remedies are on the way. Foreign investors in Dubai will now be able to take their grievances to the Property Court, which begins this month and is expected to speed up the process of hearings.

“A crucial part of the evolution of Dubai is the appreciation that property and construction breed disputes, and so there must be appropriate ways to resolve or determine those disputes,” said Nick Carnell, a partner at the law firm Kennedys.

“But it’s also fundamental that the court gets off to a good start.

Without an effective means to deal with such disputes, confidence will be eroded very quickly.”

Also in the pipeline is a consumer protection law, which will better protect off-the-plan buyers from misleading marketing by developers and will make it more difficult for developers not to honour their promises.

“These changes, if introduced, will impact how developers market their projects and will hopefully assist in preventing some of the problems that have occurred recently,” said Stephen Kelly, an associate with Clyde & Co.

Still, these changes will go a long way towards avoiding the kind of problems experienced by some investors. Abu Dhabi is still a little behind Dubai in terms of getting its property law in place, although plans are in the pipeline to adopt a similar strategy to Dubai’s. “I believe the Abu Dhabi Government has hired an Australian consulting firm to help devise a Strata Law in Abu Dhabi,” said Mr O’Toole. “There is currently more protection in Dubai than the Abu Dhabi. For example, Dubai has the escrow account in place.”

Mr O’Toole said the best remedy was doing your homework before buying.

“Be careful, do your research and look at the strength of the developers. The big ones have huge asset banks, while the smaller ones are more exposed to risk. Human nature is such that we talk about learning from other people’s mistakes, but we very rarely do. This is a crazy market and I don’t think people will learn their lessons until there are major failures.“

agiuffrida@thenational.ae

Gulf property market: a never ending boom? – The National Newspaper – Sent Using Google Toolbar

Gulf property market: a never ending boom? – The National Newspaper

The sub-prime mortgage market crash was the first salvo in a global jitter concerning the health of the property market. Economies that had registered record property price rises are now reporting successive monthly falls, adding to general unease and uncertainty.

In the UK, where more prudent mortgage lending practices were supposed to be in operation, the news on the property front is grim. Over the past six months, UK house prices have dropped at an annual rate of 11.4 per cent, and over the past three months at an alarming 16.1 per cent. The spectre of the crash in the early 1990s looms and even Alistair Darling, the chancellor of the exchequer, has forecast a 30 per cent fall in house prices before things get better.

What has gone wrong? Are markets in different geographic locations and going through different economic cycles, immune from real estate price tremors in other parts of the world? The key is a perception on whether a particular real estate market has reached a critical asset price “bubble”. Bubbles burst at some stage, but it is the exact point of the impact that is uncertain, as well as the consequent speed of a fall in prices.

In the Gulf, there is no sign yet that real estate prices have fallen, but there are also signs that the massive infrastructure and housing construction boom is beginning to face supply bottlenecks. With steel and cement prices rocketing, some projects are being quietly delayed, while others in the drawing stage are being shelved. While each of the Gulf countries has its own real estate market cycle, a reversal in the fortune of one Gulf market might have a knock-on effect on others.

There is some merit for a pause in any upward march in real estate prices. In the western economies, a gentle collapse in the housing market bubble can be socially beneficial. When prices were rising sharply, it was the younger and generally poorer people in society who were left out of the property ownership ladder, while older and richer people, who already owned houses, became better off. In the Gulf, a similar phenomenon was beginning to emerge but, unlike the West, it was based on resource allocation to different real estate projects.

Younger Gulf nationals wishing to buy their first homes were suddenly being outbid by rising prices, as construction resources were channelled to more lucrative penthouses, second homes or cost-plus government infrastructure projects.

In the West, the housing market began to feel some strain when the ratio of earnings to house prices deteriorated. In the final analysis, it is the share of a household’s income that is taken up paying off the mortgages – even at low interest rates – and the ability of young first-time buyers to get such mortgages, that determines purchasing-power ability. When house prices are rising more than 30 per cent a year, this makes buying a home out of reach to many. What saves some markets is the infusion of liquidity from external sources. London property, for example, was boosted by different waves of buying from Americans, Arabs, Asians and east Europeans.

Similarly in the Gulf, one cannot talk about a homogeneous market. For whom are the different real estate projects being built? Construction in some Gulf states is trying to attract buyers from other Gulf states which have either more purchasing power or a shortage of supply. As such, if economic circumstances change in these countries, or their own construction sector starts to generate enough supply, then these states will be left with a massive over capacity and the beginning of a price-bubble burst.

Demographics is a key factor regarding which Gulf property market will flourish and which will ease off. For countries such as Saudi Arabia and Oman, with larger and a younger growing population, there is a genuine need for affordable first-time homes, rather than luxury second homes or penthouses. For such countries, natural demand exists and it is up to imaginative and cost-conscious construction companies to meet this viable long-term demand. Other Gulf countries with smaller population bases seem to construct real estate projects and then create demand after the fact through slick marketing and an appeal to different “lifestyles”.

There is a limit to this type of demand creation, though. At some stage supply will outpace demand and prices will ease unless a new round of external investors and “new” demand is generated to take up the slack of “older” demand.

Again, for some Gulf countries, the marketing of a lifestyle, with free sunshine all year round thrown in, has tapped non-Gulf expatriates, ranging from movie stars to football players, but the supply of these VIPs is limited, unlike the less glamorous but larger home-grown population demand of other Gulf countries. Should expatriates also begin to feel the chill of economic recession back home, and declining property values, then prospects of a second home in the Gulf becomes less attractive.

Economic globalisation has a price.

The Gulf is helped by government-led infrastructure projects, with Saudi Arabia taking the lion’s share in the form of various economic mega cities. Such initiatives will take up the slack from private sector projects, and reduce the effects of a slowdown.

In the long run, even such mega projects are at the mercy of oil price fortunes and government budget surpluses. Should such factors coalesce – foreign purchases slowing, high commodity prices, high inflation and a higher cost of borrowing – then the Gulf property boom will start to ease back.

Dr. Mohamed Ramady is a former banker and Visiting Associate Professor, Finance and Economics Dept. at King Fahd University of Petroleum and Minerals, Saudi Arabia.

New Property law number 13 of 2008 comes into effect this week

Dubai 04.September 2008

Law number 13 of 2008, governing off plan property sales in Dubai is set to come into effect this week.

The law will introduce a mandatory system of pre-registration for sales contracts at the emirate’s Land Department.

Any off plan sales regarding real estate units in the city that are not registered will be legally invalid.

The registration system is the next stage in the government of Dubai’s efforts to increase the levels of transparency in the local real estate market, along with the introduction of a specific arbitration agency, the Real Estate Regulatory Authority (Rera), and legislative measures such as the escrow law.

These initiatives come at a time when investor confidence in both upcoming and existing projects has been shaken following a series of scandals in the local industry.

Although the system will initially be undertaken by the Land Department, the duty will eventually pass to master developers, who will be obliged to register all purchases by sub-developers.

According to an explanatory report authored by Chloe English and Alexis Waller from legal firm Clyde & Co’s Real Estate department, the registration system is already up and running and will work in tandem with the current project registration system in place at Rera following the introduction of Law number 8, the escrow law. Law number 8 declared that all developers had to be approved by Rera and have an escrow account, which all monies from investors would be paid into and would be used solely for the construction of the development.

The system also paves the way for easing in the emirate’s Law number 14 of 2008, regarding mortgages, allowing investors to register against off plan projects.

Contract and purchase fees Developers will still be obliged to pay a fee of Dhs370 per off plan unit contract when registering their site plan.

The developer will not need to have taken possession of the land before registering off plan sales, registration of the concluded purchase agreement at the Land Department will be enough. There will also be an additional 2% registration fee, payable at the split of 1% by the seller and 1% by the buyer, on all third party sales prior to the beginning of construction.

The good news for buyers is that developers will no longer be able to charge transfer fees on off plan sales. Administrative charges will still be payable but the exact amount is currently being determined by the department. The Clyde & Co report estimates the figure at Dhs5,000 for off plan transfers and Dhs500 for completed properties.

Breach of contract ( attention buyers !!!!!!!!!)

Under the new law, if buyers default on a sales contract it becomes the developer’s responsibility to report the breach to the Land Department.
They will then issue a notice granting the buyer 30 days grace to comply with contractual obligations.
If the issue is not resolved within the period the developer can cancel the contract and return all money paid, minus 30%, which they are allowed to keep.
The new law means that the 30% is now a value of money paid by the buyer, rather than 30% of the value of the project.

In a further boost to buyers, developers will also no longer be able to claim additional money if a project is larger once completed than set out in the original contract.

If the project is smaller than specified, however, the buyer must be compensated (the size difference has yet to be specified but the report anticipates a threshold of 5% and over from the advertised area).

Restrictions on property ‘flipping’

The new law is also part of the government’s efforts to help curb the market speculation that has seen prices rise at fever pitch levels, and ensure that all transactions are monitored by the government rather than by individual companies.

Unfortunately, for many of the investors currently undergoing problematic handovers, the law will not retroactively govern projects that are already underway or completed – although all developments still in the off plan stage only have 60 days to register sale contracts with the Land Department.

Although some of Dubai’s major developers, including powerhouses Nakheel and Emaar have set their own restrictions on the resale of off plan units, placing a hold on sales until either a set period of time has elapsed or a percentage of the contractual value has been paid, the new law does not make these restrictions mandatory across the board.

Investor: ‘Lagoon problems are far from over’ – Real Estate – ArabianBusiness.com – Sent Using Google Toolbar

Investor: ‘Lagoon problems are far from over’ – Real Estate – ArabianBusiness.com

A Dubai Lagoon investor insisted on Tuesday that there were still a lot of people who felt let down by developer Schon Properties, despite what company bosses claim.

UK-based Sheraz Bhatti told Arabian Business that the Lagoon project was his first sortee into the Dubai property market and his experience had deterred him from making further investments.

He was responding to comments by vice-president Danial Schon on Monday when he said the problems with delays had been “beyond the company’s control”.

Schon Properties said it has conducted a meeting with all investors and the issue was solved, resulting in most investors choosing not to refund their money.

But Bhatti, who has been refused any refund, said there were still a lot of investors who were angry with the developers.

He told Arabian Business: “Schon had an open forum where investors were invited to attend. Unfortunately, I do not believe any overseas investors would have attended due to the short notice – one day. Most of the attendants were local investors.

“Furthermore, Schon have not communicated the responses to me or other investors,” he said.

Bhatti added that he was not convinced investors left the meeting satisfied “as the refund issue remains outstanding and payment plans are not being revised to link it with construction”.

The developer told Arabian Business on Monday that problems were behind them and the project would now be finished by the second half of 2011.

They added that difficulties including cancelled contracts and work permit freezes were beyond their control.

Schon added that the majority of investors who have been offered refunds because of the delays have chosen to stick with the project.

After long delays and angry protests from disgruntled investors, the developer has agreed to grant refunds to investors who were sold plots in 2005 with a completion date of the end of 2007.

“They [Schon] mentioned this in a forum but I do not think many investors who do not belong to this group are happy about it,” said Bhatti.

“RERA says that all investors are eligible for refund. I am a phase 2 investor and a recent e-mail from Schon says that they are looking into my case, but they have been looking into it for the last three months!”

Bhatti is still hoping to get a refund for the money he’s invested in Dubai Lagoon. All he wants at this stage is to exit the project.

“We investors have been cheated,” he said.

Additionally, Bhatti claimed he had not been informed of any changes in the project’s layout, which Schon explained had to be implemented due to unavoidable road works decided unexpectedly by the government.

“No formal communication from Schon regarding this was made. Schon’s management team does not know how to manage its communication with investors. Communication is almost non-existent,” added Bhatti.

He added that investors continued to pay their installments when construction is yet to commence.

“I, along with many other investors, am dissatisfied but our requests for full refunds have been turned down.

“This is my first investment in Dubai’s real estate, which I hoped would be a very profitable and lucrative proposition. This project is turning out far from that,” he added.

Schon said it had suffered very high costs due to delays. The Dubai Lagoon project, which was initially estimated at a cost of $272 million, has today bumped its value to $598 million.

Lagoon boss: ‘Delays were beyond our control’
EXCLUSIVE: Schon Properties VP explains all over much-delayed Dubai project.

Gulfnews: Property Scandal – 3,458 complaints against Dubai ‘developer’ Al Boom

Gulfnews: 3,458 complaints against ‘developer’:

By Bassam Za’za’, Senior ReporterPublished: August 27, 2008, 23:40
Dubai:
A total of 3,458 complaints have been filed against Emirati businessman Abed Al Boom, owner of Abed Al Boom Management and Development Properties, for reportedly swindling depositors of an estimated Dh847 million.

Chief Public Prosecutor Yousuf Foulaz, Head of First Public Prosecution in Deira, announced this yesterday, and said: “The number of complainants might increase.

Until August 20, the Public Prosecution recorded 3,458 complaints from individuals and the total financial claims against Al Boom are around Dh847,266,000. His frozen assets cover about 15 per cent of the total claims.”

Foulaz said Al Boom has been given a cell-phone and access to his lawyers to enable him to recover funds that he claimed he has abroad. Investigation started on July 6.

Al Boom’s case gained public and media interest and was surrounded by different rumours …

Our main legal responsibility is to recover the claimants’ money. Most of the depositors have a limited income,” Foulaz told a media gathering at the Public Prosecution office.

Responding to Gulf News’ question whether media reports and rumours had an influence on the

Al Boom case, he preferred not to comment and replied: “I will remain optimistic. We aim to recover the claimants’ money.”

Dubai’s Attorney General, Eisam Eisa Al Humaidan, ordered the freezing of transactions of shares owned by Al Boom and his associates and the halting of all business transactions concerning their property, assets and bonds.

“The investigation continues and a committee of financial experts from the Rulers Court is currently examining the case,” added Foulaz.

Al Boom’s lawyer, Salim Al Sha’ali earlier told Gulf News: “My client didn’t have any intention of swindling any of the depositors. He has been trying to return the depositors’ money by selling his projects.”

Al Boom and eight alleged associates have been charged with swindling and conning dozens of victims by running a bogus investment portfolio.

$463mn deal to ease Schon Properties Dubai Lagoon delays

$463mn deal to ease Dubai Lagoon delays

Dubai-based developer Schon Properties has signed a $463 million contract with Belhasa Engineering and Contracting Company to speed up the delivery of its delayed Dubai Lagoon development.

Investors in the $816.4 million residential project in Dubai Investment Park have been complaining about delays for months.Earlier this month Schon Properties announced it would be giving full refunds to investors who had purchased units which were scheduled for completion by December 2007.

The statement came a day after Dubai’s real estate agency said the project had not been cancelled.

Schon Properties has blamed the delays on infrastructure alterations and the rising cost of construction costs which has forced the developer to renegotiate its original agreement with Thai contractor, Powerline Gulf.

Belhasa is expected to start on site in October and completion is expected at the end of 2010 or early 2011 said Schon Properties

Update: Dynasty Zarooni Jumeirah Lake Towers Plot H3 – G3 – Al Fajer Properties – original Comment at Skyscrapercity

original published: Skyscrapercity

http://www.skyscrapercity.com/showthread.php?p=24219792

FOR THE ATTENTION OF JUNIOR MEMBER : rohitd (aka: Rohit Dadakar)
The nature of the blog comments which you have posted regarding our company have been brought to my attention and I would like to very clearly, formally respond and clarify for the record each of your points to this audience.
The points you have made with reference to the Dynasty Zarooni Inc “Ebony & Ivory” development project located in Jumeriah Lake Towers, Dubai;UAE are incorrectly stated and for that matter I would like to clarify the actual facts pertaining to this project.

1. The “Ebony & Ivory” buildings were purchased by Dynasty Zarooni Inc from Al Fajer Properties LLC. The reference details of these projects are as follows:
Ivory 1 : Also known as Jumeriah Business Center – Plot G3-JBC8
Ivory2 : Also known as Jumeriah Business Center – Plot H1-JBC7
Ebony 1 : Also known as Jumeriah Business Center – Plot H3-JBC9

2. A 20% payment has been made to Al Fajer Properties LLC.

3. The project is Escrow compliant

4. This project has been sold onto Dynasty Zarooni Inc purchasers, who in turn, were assisted by Dynasty Zarooni Inc in the capacity of providing them with a 6 months time period to pay this 20% payment, without charge of any interest. Dynasty Zarooni Inc has already signed unit SPA’s (Sale & Purchase Agreement) with Al Fajer Properties LLC for every unit in the above aforementioned Towers. On receipt of this 20% payment, Dynasty Zarooni shall assign the unit SPA’s to the purchaser of the relevant unit.

5. With reference to the point relating to Area Differentials, it is clearly stated on the Dynasty Zarooni Inc Receipts’ provided to all purchasers, that a typical floor within this aforementioned Tower has the following clearly defined area designation:
Gross Area : 14,690 sq ft
Net Area : 11,314 sq ft
Thus, no purchaser of the Ebony1 (Project: H3-JBC9) will be surprised by this information as it remains entirely transparent to the purchaser throughout the purchase process.

Our records indicate that the blogger (rohitd – Member aka. Mr Rohit Dadakar.) is NOT a purchaser of any Ebony 1 unit in his own name (also known as Jumeriah Business Center – H3-JBC9 ) and thus the blog statement made by this person is wholly unfounded. We would ask Mr Rohit Dadakar to communicate his complete contact details, including passport details, correspondence information so that our Lawyers may take up this matter directly.

We would appreciate that any such queries regarding our companies projects be directed to us in the first instance and we would to happy to address any such genuine queries in order to avoid any misrepresentation in future being aired on the Internet in such blog channels, which are wholly incorrect in fact and furthermore clarify our companies’ standpoint. In future we would kindly request that the Moderator or Active Member within this on-line community, kindly verify that all facts are clearly confirmed in order to avoid future instances of erroneous statements.

N. Vishram
CEO
Dynasty Al Zarooni Real Estate LLC
Dubai; UAE

20th August 2008.

It’s going to be an uncomfortable summer for those without a clear conscience

original published Arabian Business
http://www.arabianbusiness.com/index.php?option=com_content&view=article&id=528460&newsletter=1

White-collar crime rarely captures the imagination as easily as its garden-variety counterparts.It seems you have to bring down a bank, hide billion-dollar losses or at least plunder a pension plan in order to secure column inches alongside the murder du jour.

Part of the reason is in the telling – after all, it’s unfortunately far easier to picture a grisly death, than it is to follow how the judicious use of special purpose entities might scupper a $111bn energy giant, or how one city whiz-kid with delusions of grandeur could blindside a 144 year-old Swiss bank with an alleged $75bn in unauthorised trades.

However, the summer of 2008 will be keenly remembered for a string of high-profile investigations into alleged financial irregularities by senior executives at both Dubai Government-owned and private entities.

If the public prosecutor’s suspicions are proved accurate, then His Highness Sheikh Mohammed Bin Rashid Al Maktoum’s drive for transparency – which is to be applauded – will have claimed its first scalps.

The summer of summonses began in April, and the announcement of probes into the activities of individuals at Dubai Islamic Bank (DIB) and its affiliate Deyaar.DIB’s former vice president for finance structure, Rifaat Othmani, was arrested as part of a fraud investigation on June 5. He and several other former members of DIB staff are being investigated, while the probe also led to the arrest of JPMorgan Chase’s senior country officer for the UAE, Omair Mooraj.At development firm Deyaar, meanwhile, four people have been arrested as part of a police investigation into alleged embezzlement.

Those hauled in include Deyaar’s former CEO, Zack Shahin, who has since maintained his innocence.Ever since the DIB and Deyaar investigations were made public, rumours have run rife that a host of other high-profile figures were also in the firing line. It has been a summer of ‘when’, not ‘if’, and so it came as no surprise when more arrests were announced last week.

First to be named was Adel Al Shirawi, the former CEO of mortgage giant Tamweel, and now vice chairman of state-owned Istithmar World PJSC. His former head of investments Feras Kalthoum is under the microscope too.

Down the road at Dubai Government-owned developer Nakheel, general manager of sales Walid Al Jaziri and former Nakheel executive Karim Masaad have also been arrested.

We can be sure that the public prosecutor’s office is not done yet. Amid tales of tender-rigging, bribery and profit skimming, the government is steadily making its way down a list of names, and circling those unable to balance the books or account for their lavish lifestyles.

This week, sources told Arabian Business that the CEOs of at least two other Dubai development majors – between them responsible for a completed project portfolio worth over $100bn – are currently the subject of CID probes.

It’s going to be an uncomfortable summer for those without a clear conscience.

Andrew White is the deputy editor of Arabian Business English

Whats going on with Projects Al Fajer Properties Jumeriah Lake Towers – Scandal ? – Dynasty Zarooni

posted to 7starsDubai by:

Rohit said…
I have recently bought an office in the ebony tower through dynasty zarooni.

They have been advertising heavily in Gulf News recently.

I want to warn all my fellow investors to beware of the contract that they are signing with DZ. If you check the website of Al fajer Properties, floor plans of their typical floors does not exceed 11,300 square feet, as per the spreadsheet attached to the MOU of sales between Dynasty & Al fajer where clearly sellable area has been mentioned. however Dynasty without any legal grounds and any such permission is adding 30% to the area and are currently selling and advertising even on the web for the floor area to be 14,664 sqft.

So on handover of the property the buyers will be in for a shock and dynasty is no where to take responsibility because they take their premiums out of the contract long before.

I have made enquiries neither the developer Al Fajer Properties nor DZ has an escrow account, please advise what legal action can I take at this stage?

Rohit said…
I recently booked an office with Dynasty Zarouni in the highly advertised Ebony Tower.

I have been baffled ever since I bought it because my office space as per my contract is 14,664 sq ft and I came across a shocking document of MoU signed between DZ and Al Fajer Properties along with the spreadsheet of sales and floor plans which clearly states the floor size to be 11,300 sq ft. This difference roughly amounts to be 30% and is an indigestible difference.

Transparent calculations have shown that DZ has already or in some cases is currently receiving premiums from the contract.

The part that sends a shiver down my spine is that DZ does not have an escrow account

With the kind of scams going around these days, I have a series of questions starting….1)

What happens if Al Fajer is telling the truth about the floor space and DZ isn’t2)

How do we get re imbursed… blah blah… especially if there is no escrow3)

Who is Hilal Zarouni and Kabir Moolchandani4)

Why is Gulf News mis representing the facts. Isnt it a very credible news source? 5)

What is the procedure for taking legal action! Alot of things don’t make sense here and I hope I can find some answersThere is a big “IF” attached to my presumably new office set up i.e if DZ is not a total hoaxIn one case, I m losing quite alot and in the second one I stand to lose everything.

Confusion!

13 August, 2008 10:38

read more:
http://dynastyzarooni.blogspot.com/

Another Post to 7starsDubai 21.August 2008

Comment:
Please check dynasty zarroni for me….I booked a masive office with them and all they do is make me run around…

I have paid my agent to get the story straight.
They published fake pictures in gulf news.

Please check my company’s blog listed below:

http://www.dynastyzarooniscam.wordpress.com/

I need help.

More informations also here:

http://www.skyscrapercity.com/showthread.php?t=290912&page=13

http://www.skyscrapercity.com/showthread.php?t=138300&page=3

http://www.skyscrapercity.com/showthread.php?t=139716&page=2

http://www.skyscrapercity.com/showthread.php?t=567903

 

Gulfnews: Dubai building rule violators will be punished

Gulfnews: Dubai building rule violators will be punished:

By Alice Johnson, Staff ReporterPublished: August 23, 2008, 23:47

Dubai: Every year, 2.3 million people die in occupational accidents or from work-related diseases worldwide. Approximately 60,000, or 2.3 per cent, of these deaths are in the construction industry.
There are approximately 270 million occupational accidents per year, and 160 million cases of occupational disease, according to statistics from the International Labour Organisation.
Dubai is no exception, the emirate recorded 249 accidents on construction sites last year, 47.8 per cent of which involved labourers falling from heights.

Falls from 2004 to 2007 constituted 45 per cent of a total 865 accidents, according to statistics from Dubai Municipality.
Other types of accidents included collapses at work sites, 23 per cent; crane and other machinery accidents, 14 per cent; and incidents involving fires and electric shocks, 7 per cent.

The issue was highlighted recently, when the municipality published a new manual for contractors and construction companies, stipulating health and safety regulations for workers in the industry.
Currently, the Building Department Inspection Section visits 150 construction sites per day, which is to increase to between 400 and 500 in the near future.

Breaching construction site safety regulations can result in fines and even closure of the site itself.
Fawzi Mohammad Al Shehi, Acting Director, Building Department, said: “There are many violations a day, but most of them are rectified quickly. Fines range from zero to Dh50,000, because some violations are very small.” Construction site safety breaches include not wearing the correct safety wear, such as a hard hat.

Total fines issued in June were Dh1.5 million.

Eisa Al Maidour, Assistant Director General, Dubai Municipality Planning and Building Affairs, said: “Safety is the contractors’ responsibility. We cannot prevent all accidents. The aim is not to fine, the aim is to correct the situation and prevent further violations.”
According to exhibition organisers Epoc Messe Frankfurt, site accidents occur because of the increasing number of projects underway. The company will be organising the Intersec trade fair in Dubai, which includes “construction safety” as a theme, in January 2009.

Eckhard Pruy, CEO of the company, said: “The rapid increase in the number of construction projects in the UAE and other Gulf countries has caused an alarming number of accidents at construction sites. According to research, construction projects in excess of $2.4 trillion (Dh8.8 trillion) are underway, with the majority of developments being carried out in Saudi Arabia and the UAE.”
Projects in Dubai include the Waterfront Project (Dh183 billion) and the Burj Dubai development (Dh73 billion).

“High investments in infrastructure and the construction industry do often stand in opposition to required safety standards. A variety of safety standards has been implemented by the government, but the biggest challenge is to make companies adhere to these regulations by imposing fines and sanctions against those who break the rules,” Pruy said.

Dubai: Annual statistics
865 accidents from 2004-2007
45 per cent of accidents were falling from heights
23 per cent of accidents were collapses
14 per cent of accidents involved cranes and machinery
7 per cent of accidents were electric shocks
249 accidents in 2007
47.8 per cent of accidents in 2007 were falling from heights

It’s going to be an uncomfortable summer for those without a clear conscience

original published Arabian Business
http://www.arabianbusiness.com/index.php?option=com_content&view=article&id=528460&newsletter=1

White-collar crime rarely captures the imagination as easily as its garden-variety counterparts.It seems you have to bring down a bank, hide billion-dollar losses or at least plunder a pension plan in order to secure column inches alongside the murder du jour.

Part of the reason is in the telling – after all, it’s unfortunately far easier to picture a grisly death, than it is to follow how the judicious use of special purpose entities might scupper a $111bn energy giant, or how one city whiz-kid with delusions of grandeur could blindside a 144 year-old Swiss bank with an alleged $75bn in unauthorised trades.

However, the summer of 2008 will be keenly remembered for a string of high-profile investigations into alleged financial irregularities by senior executives at both Dubai Government-owned and private entities.

If the public prosecutor’s suspicions are proved accurate, then His Highness Sheikh Mohammed Bin Rashid Al Maktoum’s drive for transparency – which is to be applauded – will have claimed its first scalps.

The summer of summonses began in April, and the announcement of probes into the activities of individuals at Dubai Islamic Bank (DIB) and its affiliate Deyaar.DIB’s former vice president for finance structure, Rifaat Othmani, was arrested as part of a fraud investigation on June 5. He and several other former members of DIB staff are being investigated, while the probe also led to the arrest of JPMorgan Chase’s senior country officer for the UAE, Omair Mooraj.At development firm Deyaar, meanwhile, four people have been arrested as part of a police investigation into alleged embezzlement.

Those hauled in include Deyaar’s former CEO, Zack Shahin, who has since maintained his innocence.Ever since the DIB and Deyaar investigations were made public, rumours have run rife that a host of other high-profile figures were also in the firing line. It has been a summer of ‘when’, not ‘if’, and so it came as no surprise when more arrests were announced last week.

First to be named was Adel Al Shirawi, the former CEO of mortgage giant Tamweel, and now vice chairman of state-owned Istithmar World PJSC. His former head of investments Feras Kalthoum is under the microscope too.

Down the road at Dubai Government-owned developer Nakheel, general manager of sales Walid Al Jaziri and former Nakheel executive Karim Masaad have also been arrested.

We can be sure that the public prosecutor’s office is not done yet. Amid tales of tender-rigging, bribery and profit skimming, the government is steadily making its way down a list of names, and circling those unable to balance the books or account for their lavish lifestyles.

This week, sources told Arabian Business that the CEOs of at least two other Dubai development majors – between them responsible for a completed project portfolio worth over $100bn – are currently the subject of CID probes.

It’s going to be an uncomfortable summer for those without a clear conscience.

Andrew White is the deputy editor of Arabian Business English

Gulfnews: Dubai building rule violators will be punished

Gulfnews: Dubai building rule violators will be punished:

By Alice Johnson, Staff ReporterPublished: August 23, 2008, 23:47

Dubai: Every year, 2.3 million people die in occupational accidents or from work-related diseases worldwide. Approximately 60,000, or 2.3 per cent, of these deaths are in the construction industry.
There are approximately 270 million occupational accidents per year, and 160 million cases of occupational disease, according to statistics from the International Labour Organisation.
Dubai is no exception, the emirate recorded 249 accidents on construction sites last year, 47.8 per cent of which involved labourers falling from heights.

Falls from 2004 to 2007 constituted 45 per cent of a total 865 accidents, according to statistics from Dubai Municipality.
Other types of accidents included collapses at work sites, 23 per cent; crane and other machinery accidents, 14 per cent; and incidents involving fires and electric shocks, 7 per cent.

The issue was highlighted recently, when the municipality published a new manual for contractors and construction companies, stipulating health and safety regulations for workers in the industry.
Currently, the Building Department Inspection Section visits 150 construction sites per day, which is to increase to between 400 and 500 in the near future.

Breaching construction site safety regulations can result in fines and even closure of the site itself.
Fawzi Mohammad Al Shehi, Acting Director, Building Department, said: “There are many violations a day, but most of them are rectified quickly. Fines range from zero to Dh50,000, because some violations are very small.” Construction site safety breaches include not wearing the correct safety wear, such as a hard hat.

Total fines issued in June were Dh1.5 million.

Eisa Al Maidour, Assistant Director General, Dubai Municipality Planning and Building Affairs, said: “Safety is the contractors’ responsibility. We cannot prevent all accidents. The aim is not to fine, the aim is to correct the situation and prevent further violations.”
According to exhibition organisers Epoc Messe Frankfurt, site accidents occur because of the increasing number of projects underway. The company will be organising the Intersec trade fair in Dubai, which includes “construction safety” as a theme, in January 2009.

Eckhard Pruy, CEO of the company, said: “The rapid increase in the number of construction projects in the UAE and other Gulf countries has caused an alarming number of accidents at construction sites. According to research, construction projects in excess of $2.4 trillion (Dh8.8 trillion) are underway, with the majority of developments being carried out in Saudi Arabia and the UAE.”
Projects in Dubai include the Waterfront Project (Dh183 billion) and the Burj Dubai development (Dh73 billion).

“High investments in infrastructure and the construction industry do often stand in opposition to required safety standards. A variety of safety standards has been implemented by the government, but the biggest challenge is to make companies adhere to these regulations by imposing fines and sanctions against those who break the rules,” Pruy said.

Dubai: Annual statistics
865 accidents from 2004-2007
45 per cent of accidents were falling from heights
23 per cent of accidents were collapses
14 per cent of accidents involved cranes and machinery
7 per cent of accidents were electric shocks
249 accidents in 2007
47.8 per cent of accidents in 2007 were falling from heights

Properties Scandal Schon Dubai Lagoon – Just Refund ! ? – Dubai Lagoon buyers offered full refunds

original published 7days.ae 21. August 2008
http://www.7days.ae/showstory.php?id=77845

Schon Properties, developer of the dhs3 billion Dubai Lagoon project, has confirmed full refunds will be given to all investors who bought units scheduled for completion by December 2007.

Delays to Dubai Lagoon were the direct result of “unanticipated civic and transportation infrastructure alterations, which have set back construction and produced scheduling issues”, Schon said.

Investors who bought units with a completion date of December 2007, are eligible for a full refund but should apply before September 15.Schon also confirmed the agreement with contractor, Powerline Gulf, has been renegotiated to include the first two zones of the project with construction due to resume in the “coming weeks”.

The first zone is now set for completion within 13 months and the second zone is set for completion within 18 months. “We are aiming to deliver the project in the timeliest manner given the unforeseen circumstances,” Nasir Husain, co-chairman of Schon Properties, said.

Properties Scandal Schon Dubai Lagoon – Just Refund ! ? – Dubai Lagoon buyers offered full refunds

original published 7days.ae 21. August 2008
http://www.7days.ae/showstory.php?id=77845

Schon Properties, developer of the dhs3 billion Dubai Lagoon project, has confirmed full refunds will be given to all investors who bought units scheduled for completion by December 2007.

Delays to Dubai Lagoon were the direct result of “unanticipated civic and transportation infrastructure alterations, which have set back construction and produced scheduling issues”, Schon said.

Investors who bought units with a completion date of December 2007, are eligible for a full refund but should apply before September 15.Schon also confirmed the agreement with contractor, Powerline Gulf, has been renegotiated to include the first two zones of the project with construction due to resume in the “coming weeks”.

The first zone is now set for completion within 13 months and the second zone is set for completion within 18 months. “We are aiming to deliver the project in the timeliest manner given the unforeseen circumstances,” Nasir Husain, co-chairman of Schon Properties, said.

Sama Dubai – Lagoons CEO Abdul Salam Al Marri faces corruption probe

21 August 2008Dubai:

Abdul Salam Al Marri, chief executive of the Lagoons – a project by Sama Dubai

Sama Dubai, a Dubai Government owned real estate developer, is facing probe, Gulf News has learnt.

“We just came to know that he has come under investigation,” a source close to Sama DubaiSama Dubai, said.

Sama DubaiSama Dubai’s flagship project, the Lagoons – on Dubai Creek has been delayed. The project is expected to house Dubai Towers, Dubai – the four towers at the core of its development.

The news comes amid a government crackdown on bribery and corruption – mostly in the real estate sector.

Police began the probe on three government officials on corruption. Market sources hinted that many more heads are expected to roll.

Dubai government, in a recent statement, has announced zero tolerence against corruption.
“The Government of Dubai will take strict and prompt action against all acts of corruption and bribery wherever they occur in the emirate, whether in the public of private sectors,” Dubai’s Public Prosecutor said in a recent statement.

By Saifur Rahman

Call for new laws to fight corruption – Sent Using Google Toolbar

Call for new laws to fight corruption

By Shuchita Kapur on Thursday, August 21, 2008 Financial experts are calling for stricter laws and regulatory policies to fight corruption following allegations of misconduct in Dubai property market. On Tuesday developer Nakheel confirmed a former employee was being questioned by the authorities over bribery claims. The statement followed media reports Karim Masaad, international sales manager for Nakheel, was being questioned by Dubai Public Prosecution as part of an anti-corruption crackdown. Last week Nakheel said one of its employees was being questioned on suspicion of taking bribes. This followed a report that Walid Al Jaziri, general manager for sales, was being investigated for financial irregularities. Laws are already in place to tackle corruption but more needs to be done, leading analysts told Emirates Business. And one analyst said adopting strict international standards would be a major first step. “I feel we should adopt international financial reporting Standards,” said Dr Nasser Al Saidi, chief economist at the Dubai International Financial Centre (DIFC). “This should be the standard for both listed and non-listed companies. It should be the rule for the corporate world. “In addition we should strengthen the listing requirements at stock exchanges – and this should apply not only to new entrants but to those already listed as well.” Niall O’Toole, a partner at the international law firm Clyde & Co, said a new law was needed. “There have been major scandals in the United States and throughout Europe and these led to changes in legislation and procedures,” he said. “The private sector in the UAE deserves a new companies law written to an international standard that would establish enhanced standards of corporate governance. “Insider trading is already against Emirates Securities and Commodities Authority [ESCA] regulations and we have seen examples of exchanges reversing trades. I would expect the three stock exchanges in the UAE to be very vigilant on this point and if changes are required to the regulations then I would expect these to be forthcoming,” he added. Dr Saidi said insider trading involving companies listed on the country’s bourses should be made a criminal offence. “There should be a criminal law for insider trading just as there is in developed markets,” he said. Dr Saidi said the ESCA had sufficient powers in terms of the current laws and regulations as well as the full support of the minister of economy. “Enforcement of the corporate governance code is very important. This was announced by the ESCA in 2006 and we should move towards it as early as possible to avoid such cases in the future.” A recent report on the way businesses are run said the ESCA should be more proactive in introducing new rules to strengthen corporate governance practices – a view shared by many experts. O’Toole said: “The UAE has no option but to continue to improve corporate governance standards. Both the ESCA and the Dubai Financial Services Authority have issued minimum codes of corporate governance for listed companies. “These need to be enforced both by regulators and by shareholders, particularly institutional investors. Consideration should also be given to adopting similar codes for private companies.” Sarmad Hasan Manto, Legal Consultant, United Trademark & Patent Services (UTPS), said: “It is necessary to promulgate laws and closely monitor activities through regulatory intervention. In addition the companies should also play a vital role through implementing the required levels of checks and balances.” Experts believe that a lack of transparency is a major issue in Dubai. The say regulatory intervention and compliance are needed to make sure the levels of disclosure are up to international standards. Amer Halawi, Head of Research at the National Investor, told Emirates Business: “The family structure of businesses in the UAE and the short history of the stock markets create a sense of secrecy. This results in companies communicating very little with their shareholders. “A case in point is the land deal that was struck by Emaar last year. It was advertised as an absolute winner by the company but very few valuation details were given. As a result shareholders were not able to gauge the importance of the deal and the stock went down on the news. “The deal eventually had to be cancelled. Since then Emaar has decided to appoint an investor relations officer to manage such situations better in the future. “One of the very first things UAE Inc should do is to impose a strict set of regulations to improve disclosure and transparency. Another important step would be to harmonise regulations across the emirates, particularly when it comes to listed companies,” Halawi added. Dr Saidi said: “Transparency and disclosure should be high on the agenda of a company. In most developed markets companies announce the date when they will publish their results in advance. However, within the region 90 per cent of the companies here do not do that. “This is important as the company will be obliged to stick to the deadlines. All companies should also have an investor relations department,” he said. Halawi said: “Everybody talks about the current allegations but no one really knows what is happening. This is a good example of poor communication. The market is wondering and, in the absence of answers, investors sell the stock. Crisis situations require excessive transparency.” However a spokesman for Nakheel told Emirates Business that transparency was at the heart of the company. “As has previously been advised Nakheel regularly conducts internal audits as part of its commitment to open and transparent corporate governance process,” he said. “As a result of this internal audit process the company can confirm that a former member of staff is also being interviewed by the authorities in relation to acceptance of inducements from third parties. No other staff members are being interviewed and it would be inappropriate to comment further on this issue.” Transparency will become even more important as Dubai develops further and more foreign money is invested in the emirate. Manto said: “In order to maintain and increase the volume of foreign investment it is essential that transparency and legal security is provided to stakeholders and their confidence is regained.” But O’Toole said transparency was just one of a number of factors and there was no single solution to the problem of corruption. “Transparency is certainly an important part of good corporate governance,” he said. “However, it is dangerous to think that there is a single or simple solution. Other elements of a potential solution would include an international standard companies law, continuously evolving codes of conduct, shareholder activism, suitable training for directors and officers and stiff penalties for breaches,” he added. Dubai move positive The declaration by Dubai of a zero-tolerance policy towards corruption has won the backing of financial experts. Public Prosecutor Esam Al Humaidan said: “Dubai Government follows a clear policy. There are strict directions to have zero tolerance towards all aspects of corruption, bribery and taking advantage of official positions.” Niall O’Toole, a partner at law firm Clyde & Co, said: “Corruption and scandals are a fact of life wherever you go. To suggest that the UAE is immune to this aspect of human nature would not be credible. The important thing is that the authorities do not overreact but rather react appropriately. Dubai Government making clear it has a zero-tolerance attitude to corruption is the right response.” Halawi said: “The fact that the government is talking about zero tolerance means there is a strong will to do things correctly. These situations are accidents along the way to economic growth and they have to be managed. The UAE has done a pretty good job so far.” Dr Nasser Al Saidi, chief economist at DIFC, believes the allegations will ultimately be good for business. “Even though it looks negative, it is good. People have faith in the system. The judiciary is holding people accountable for their actions. This will lead to an increase in investor confidence.” Sarmad Hasan Manto, legal consultant at UTPS, said: “The zero-tolerance policy is highly appreciated and has played an important role in building confidence among stakeholders.”

Sama Dubai – Lagoons CEO Abdul Salam Al Marri faces corruption probe

21 August 2008Dubai:

Abdul Salam Al Marri, chief executive of the Lagoons – a project by Sama Dubai

Sama Dubai, a Dubai Government owned real estate developer, is facing probe, Gulf News has learnt.

“We just came to know that he has come under investigation,” a source close to Sama DubaiSama Dubai, said.

Sama DubaiSama Dubai’s flagship project, the Lagoons – on Dubai Creek has been delayed. The project is expected to house Dubai Towers, Dubai – the four towers at the core of its development.

The news comes amid a government crackdown on bribery and corruption – mostly in the real estate sector.

Police began the probe on three government officials on corruption. Market sources hinted that many more heads are expected to roll.

Dubai government, in a recent statement, has announced zero tolerence against corruption.
“The Government of Dubai will take strict and prompt action against all acts of corruption and bribery wherever they occur in the emirate, whether in the public of private sectors,” Dubai’s Public Prosecutor said in a recent statement.

By Saifur Rahman

Casa del Mar Dubai Marina Property scandal

Crisis in perspective: RERA

Investors in the Casa del Mar development in Dubai Marina have been told by the new owner, Al Mashraf Bank, that once completed, the project will be sold to new investors, rending the current contracts void.

The original owner of the development, Obaid Bin Jarsh, marketed Casa del Mar through Deyaar. He then sold it to Al Mashraf “due to liquidity problems”, in a letter to investors dated July 11, 2007.

Bin Jarsh had also promised to return 10 per cent of all investments.

However, with one investor paying Dh720 per square foot for six units three years ago, 10 per cent is not an adequate refund.

It is not clear how many investors will be affected by this latest turn of events.

In April this year, the director-general of the Dubai Land Department wrote in a letter to one investor, “Bin Jarsh’s offer to return the original amount is unacceptable.”

The letter also said that Bin Jarsh’s act of selling the project before any settlement had been agreed was a “violation of Dubai property regulations”.

However, despite this letter, nothing has since been done to solve the situation.
“Nobody listens to us investors. If you’re lucky they build it,” said one investor to Gulf News.
As the 30-storey project nears completion, investors are worried that Al Mashraf Bank will sell it on, disregarding previous contracts.

Galal Al Dimeery, real estate manager at Al Mashraf, said once Casa del Mar is complete, it will be launched again under a new name and then sold on to new investors.

Al Dimeery also said that when Al Mashraf bought the project, it was “empty”.

Dubai’s Real Estate Regulatory Authority’s (Rera) plans to create a new property court cannot come quickly enough, as more and more developments lack the transparency and confidence of more mature markets.

Rera is overwhelmed with complaints from investors ranging from issues such as project delays to money disputes.

“Rera is not a court. It’s just a way to regulate the market,” Marwan Bin Galita, chief executive of Rera said.

Both Obaid Bin Jarsh and officials at Deyaar were unavailable for comment.

98% call for more transparency in real estate – Real Estate – ArabianBusiness.com

98% call for more transparency in real estate – Real Estate – ArabianBusiness.com:

“Last month, a report by Jones Lang Lasalle claimed Dubai was now the most transparent market in the Middle East.

The study showed that the city registered the greatest improvement in real estate transparency globally over the last two years.

But Arabian Business readers disagreed. As well as 86 percent calling for urgent action, another 12 percent thought that, while the situation had improved, there was still a long way to go.

Just two percent of respondents said they were happy with the state of the region’s real estate market and would be happy to do business.

Asked whether their recent real estate dealings had been ‘open and honest’, no-one in our poll said yes.

Dubai rated ‘most improved real estate market’
Transparency report says emirate has made great strides over past two years.”

The UAE Real Estate "FLIPPERS" – Aldar clamps down on property ‘flipping’ – Real Estate – ArabianBusiness.com

Aldar clamps down on property ‘flipping’ – Real Estate – ArabianBusiness.com: “

Abu Dhabi’s largest real estate company is to become the latest developer to clamp down on the practice of ‘flipping’ by placing restrictions on the resale of its properties.

Aldar Properties CEO Ronald Barrott said in comments published on Tuesday that the developer will impose new rules on resales in its next phase of its properties coming online in October and November.

Barrott said these rules governing resale of its properties will become standard for all future projects.”

A degree of speculation can be good, but it needs to be tempered…

You can’t let the market get out of control, otherwise you have what is going on in Dubai,” Barrott told UAE daily The National.

“That is not a criticism, but there is overheating there. What you want is a market that moves quickly, but is sustainable.” Barrott would not reveal what measures Aldar plans to impose to dampen speculation other than that they will be “quite a new way of dealing with this issue”.

The announcement follows a similar move by Dubai-owned developer Nakheel, which said earlier this month that it was taking action to stop speculation on its Trump International Hotel & Tower, already the second most expensive in Dubai behind the Burj Dubai.The developer said investors in the Trump tower have to sign a purchase sale agreement banning them from on-selling the property for one year, adding that the clause could be extended to other projects in the future.

The practice of “flipping”, where investors buy property and then quickly sell it on at a higher price, has been blamed in part for the soaring price of real estate in the UAE.

House prices in Abu Dhabi rocketed by 61 percent between the fourth quarter of 2007 and the second quarter of this year, while in Dubai prices jumped 37 percent over the same period, HSBC said in a report in July.

98% call for more transparency in real estate – Real Estate – ArabianBusiness.com

98% call for more transparency in real estate – Real Estate – ArabianBusiness.com:

“Last month, a report by Jones Lang Lasalle claimed Dubai was now the most transparent market in the Middle East.

The study showed that the city registered the greatest improvement in real estate transparency globally over the last two years.

But Arabian Business readers disagreed. As well as 86 percent calling for urgent action, another 12 percent thought that, while the situation had improved, there was still a long way to go.

Just two percent of respondents said they were happy with the state of the region’s real estate market and would be happy to do business.

Asked whether their recent real estate dealings had been ‘open and honest’, no-one in our poll said yes.

Dubai rated ‘most improved real estate market’
Transparency report says emirate has made great strides over past two years.”

Dark days ahead? – Energy – ArabianBusiness.com – Sent Using Google Toolbar

Dark days ahead? – Energy – ArabianBusiness.com

The energy-rich Gulf faces a power shortage of unprecedented proportions, as rapid growth in consumption has left producers unable to keep up with demand.

When proposals for a large retail development in Ajman were scrapped earlier this summer, property consultant Ritu Chopra was left counting the heavy cost of cancellation.

The manager of retail leasing at Colliers International was forced to break the bad news to developer clients – that the new project could not be hooked up to the emirate’s power grid due to insufficient capacity.

The aborted Ajman project cost Chopra’s firm months of lost revenue, and she is now worried that other schemes she works on in the future may be wrecked by power shortages.

“I have already heard of other projects that have been put on hold because of this problem,” she says. “Power shortages could become a real issue, and it’s something we are getting more and more concerned about.”

As the Gulf’s power grids buckle under the pressure of soaring demand caused by high population growth, industrial expansion and a thriving construction sector, a scarcity of electricity could become a severe problem and even inhibit economic development across the region.

Economic forecasting company Global Insight predicts that while power consumption is expected to rise by 50 percent in the Gulf over the next five years, power generation will only increase by 30 percent over the same period.

In Dubai, rows of gleaming new high-rise towers have been left unoccupied for anything up to a year after construction was completed, because of insufficient electricity supply.

“There’s a lot of construction happening where they are not very well connected with Dubai Electricity and Water Authority (DEWA),” says one well-placed source within the emirate’s building industry. “There are high-rise towers ready and the power infrastructure is not there from a period of a few months to up to a year.”

“In new areas it may become very common to see whole areas of new buildings not inhabited because of this,” he adds. “Personally it is a concern and from a construction point of view when you have finished a job and could be away, it’s frustrating when the power is not in place.”

Even Saudi Basic Industries Corporation (SABIC), one of the Middle East’s biggest manufacturers, has not been immune to the problem, with power outages caused by interruptions to the electricity supply forcing the temporary shutdown of the petrochemical giant’s polyethylene and polypropylene plants in Al-Jubail, Saudi Arabia last month.

High consumption rates and sizzling summer temperatures were blamed by the Saudi government for the recent blackouts across the country, with deputy minister of electricity for Electricity Affairs Dr Saleh Al-Awaji admitting last week: “Despite everything we do, power outages are inevitable.”

Further signs of a worsening power crunch have come from Kuwait, where hospitals were among energy consumers hit by blackouts this summer. Meanwhile in Oman, industrial projects have had to be shelved because of gas shortages.

Analysts warn that if the issue of unreliable energy supplies is not addressed soon, the problem could start to hold back the pace of development in the region.

Vicente Raurich, head of Group Business Development at Siemens Building Technologies, says that despite massive investment in energy capacity there is already a “five or six year” divide between the growth in power generation and consumption – and the gap may widen.

“In the Gulf, increasingly in Qatar, Saudi Arabia and UAE and Bahrain the economic growth is huge and although there is a massive investment in capacity, that’s still outperformed by economic growth and demand for power,” he warns.

Peter Barker-Homek, CEO of Abu Dhabi National Energy Co (TAQA), says that although the UAE has typically maintained a 15 to 20 percent reserve margin in power supply to avoid interruptions, Dubai is lagging behind in building its supply because of the sheer pace of growth in the emirate.

“Central planning around energy intensity is as much art as it is science, and given the rapid development of structures around here, each of which has thousands of people that each have equipment, it is going to be lumpy as you bring power on,” he warns.

“I don’t know that it is necessarily anything wrong with Dubai’s central planning, I just think that when you are in a rapid environment where petty much everything is growing in double digits, all you need is one delay and it starts to throw your reserve margins out.”

Dark days ahead? – Energy – ArabianBusiness.com – Sent Using Google Toolbar

Dark days ahead? – Energy – ArabianBusiness.com

The energy-rich Gulf faces a power shortage of unprecedented proportions, as rapid growth in consumption has left producers unable to keep up with demand.

When proposals for a large retail development in Ajman were scrapped earlier this summer, property consultant Ritu Chopra was left counting the heavy cost of cancellation.

The manager of retail leasing at Colliers International was forced to break the bad news to developer clients – that the new project could not be hooked up to the emirate’s power grid due to insufficient capacity.

The aborted Ajman project cost Chopra’s firm months of lost revenue, and she is now worried that other schemes she works on in the future may be wrecked by power shortages.

“I have already heard of other projects that have been put on hold because of this problem,” she says. “Power shortages could become a real issue, and it’s something we are getting more and more concerned about.”

As the Gulf’s power grids buckle under the pressure of soaring demand caused by high population growth, industrial expansion and a thriving construction sector, a scarcity of electricity could become a severe problem and even inhibit economic development across the region.

Economic forecasting company Global Insight predicts that while power consumption is expected to rise by 50 percent in the Gulf over the next five years, power generation will only increase by 30 percent over the same period.

In Dubai, rows of gleaming new high-rise towers have been left unoccupied for anything up to a year after construction was completed, because of insufficient electricity supply.

“There’s a lot of construction happening where they are not very well connected with Dubai Electricity and Water Authority (DEWA),” says one well-placed source within the emirate’s building industry. “There are high-rise towers ready and the power infrastructure is not there from a period of a few months to up to a year.”

“In new areas it may become very common to see whole areas of new buildings not inhabited because of this,” he adds. “Personally it is a concern and from a construction point of view when you have finished a job and could be away, it’s frustrating when the power is not in place.”

Even Saudi Basic Industries Corporation (SABIC), one of the Middle East’s biggest manufacturers, has not been immune to the problem, with power outages caused by interruptions to the electricity supply forcing the temporary shutdown of the petrochemical giant’s polyethylene and polypropylene plants in Al-Jubail, Saudi Arabia last month.

High consumption rates and sizzling summer temperatures were blamed by the Saudi government for the recent blackouts across the country, with deputy minister of electricity for Electricity Affairs Dr Saleh Al-Awaji admitting last week: “Despite everything we do, power outages are inevitable.”

Further signs of a worsening power crunch have come from Kuwait, where hospitals were among energy consumers hit by blackouts this summer. Meanwhile in Oman, industrial projects have had to be shelved because of gas shortages.

Analysts warn that if the issue of unreliable energy supplies is not addressed soon, the problem could start to hold back the pace of development in the region.

Vicente Raurich, head of Group Business Development at Siemens Building Technologies, says that despite massive investment in energy capacity there is already a “five or six year” divide between the growth in power generation and consumption – and the gap may widen.

“In the Gulf, increasingly in Qatar, Saudi Arabia and UAE and Bahrain the economic growth is huge and although there is a massive investment in capacity, that’s still outperformed by economic growth and demand for power,” he warns.

Peter Barker-Homek, CEO of Abu Dhabi National Energy Co (TAQA), says that although the UAE has typically maintained a 15 to 20 percent reserve margin in power supply to avoid interruptions, Dubai is lagging behind in building its supply because of the sheer pace of growth in the emirate.

“Central planning around energy intensity is as much art as it is science, and given the rapid development of structures around here, each of which has thousands of people that each have equipment, it is going to be lumpy as you bring power on,” he warns.

“I don’t know that it is necessarily anything wrong with Dubai’s central planning, I just think that when you are in a rapid environment where petty much everything is growing in double digits, all you need is one delay and it starts to throw your reserve margins out.”

Flip mentality Dubai Property Market – Dubai Property Prices – the truth – Real Estate – ArabianBusiness.com – Sent Using Google Toolbar

Dubai Property Prices – the truth – Real Estate – ArabianBusiness.com

Property Prices Graph
Posted by Maureen, Dubai, UAE on 11 August 2008 at 09:16 UAE time

Well written article – thoroughly enjoyed it!

My own thoughts are that that we are probably at stage 4, but sometimes I even have disbelief of my own beliefs, (i.e. don’t buy in an upmarket). This because of the sheer numbers of people flocking to Dubai (The Gold Rush Syndrome ?).

But on the back of that I see huge numbers leaving and even more colleagues disenchanted because they cannot even afford the standard of accommodation they took for granted back home and now they wonder what it’s all about.

They came here to have a change in lifestyle, make some money and make a difference, but that fairytale is changing.

The only people to truly benefit truly either the people who bought 3 years ago (lucky them for having had both the money and the foresight), and/or the people who are worried about the future of their own unsettled countries and are setting themselves up “just in case” . They are the lucky ones (or maybe not).

The main question I ask myself constantly is, when did the world become so concerned with property, wealth, and greed. Suddenly (and I do mean suddenly), we seem to be on a world stage where the world has gone quite mad about property.

When did it change from being a roof over our heads with maybe another small investment on the side(i.e. holiday cottage), to this monster making enormous capital gains for speculators.

The question has to be asked, is it driven like oil by speculation. I think the answer quite simply yes. Will it last? I don’t think so. When will it end? Certainly not until the appetites are satisfied.

Is it wrong to speculate on property, probably not. Our forefathers never had the chance to “get rich quick without any effort”, so why not get it if you can I hear everyone say.

The real problem arises however with the “Flip” mentality here in the middle east, and that is something which may catch a lot of people out because they will get in at stage 5 and fall victim to the failings in the system.

Check out the wealthy VIP’s invited to these “salubrious property launches”, they put down deposits on say 10 units, hand over their cheque, go down to the hall where the masses wait clutching passports and cheque books (there will never be another building built in Dubai you would think !). He onsells on first come first serve to these poor suckers, who eagerly pay him a 10% premium just to get the right to jump the queue and buy this rare commodity. He then pops back to the seller, gives them ten cheques and takes back his own!

It’s a joke. I have seen it happen, and its wrong, but can we ever stop it, and who cares, certainly not the flippers.

But that’s Dubai, and it is that greed that just might kill the goose in the end, but when will that be, and where are we on the hraph. Well maybe number 4 or 5, but then again maybe it’s number 2. It is going to be a very interesting scenario as it plays out.

One thing for sure however, the rich get richer and the poor struggle to survive and that will never change, only the degrees of wealth changes at the upper end.

Property court to open in Dubai next month – Middle East News

Friday, Aug 08, 2008
Gulf News

Dubai:

Dubai’s Real Estate Regulatory Authority (Rera) will shortly create a property court with operations starting in September.

Currently, most people with disputes contact Rera in the hope a solution will be found.
The majority of cases do not make it to the civil court as investors are put off by a waiting period of anywhere between 18 months and three years.

However, with the new court, investors, end-users, tenants, contractors and developers will be able to have disputes heard in a much shorter time-frame.

“Rera has a huge amount of work to do already. Once the court is in place, it will have a better market understanding than the civil courts,” said Michael Kortbawi, partner at Bin Shabib law firm.

Real estate is playing a large role in generating revenues for the Dubai government.

© Gulf News 2008. All rights reserved.

Deadline set for Ivory Towers explanation – RERA Dubai also warned other developers

Deadline set for Ivory Towers explanation – Real Estate – ArabianBusiness.com: “

Dubai’s real estate regulator (Rera) has given Saudi developer Sokook until next Tuesday to explain why investors in its Ivory Tower project were told to stop payments, leading to the termination of contracts.

Hundreds of investors had purchased off-plan units in the 20-storey residential unit launched in 2005, according to Gulf News.

Last month Sokook promised Rera that construction of Ivory Tower would finally begin on November 1 after a dispute over a bank guarantee with Tecom – master developer of International Media Production Zone (IMPZ) – is resolved.”

Sokook is still cancelling investor contracts, blaming investors for not paying their monthly installments.However, in letters to investors dated on about February 19, Sokook wrote that until construction began, “all payments in the meantime are still postponed”, contradicting itself.Furious investors in the project have now set up an ‘investors group’ which they hope will force

Sokook to reinstate their contracts or refund investments at current market values.There are currently about 30 investors in the group and they have appointed a lawyer.

Investors have said that they want their contracts reinstated or accept refunds on their investments at the current market value.“They are offering 10 per cent at best and our money back. The price for IMPZ per square foot has tripled since we bought into the project,” one investor told the newspaper.

Rera has also warned other master developers and sub developers that it will take action if they fail to fulfill contractual obligations.“

A developer who feels a project has been held up due to delays in the handover of plots by the master developer should contact us,” Marwan bin Ghalita, CEO of Rera, said on Monday.“

We will then mediate between the two parties and come to a solution.

We will talk to the master developer and try to find out why the project has been delayed.

We will certainly take action to regulate the market,” he added.

Rera has sent notices to developers instructing them not to cancel agreements or force investors to accept cancellation terms. “

No developer has yet come back to us informing about any cancellations.”

Real estate database to cover all emirates – Middle East News – Sent Using Google Toolbar

Real estate database to cover all emirates – Middle East News

27 July 2008
The Dubai Land DepartmentDubai Land Department

Dubai Land Department

DLD

UAE Government

News Profile Officers

is in the preliminary stages of establishing a unified real estate database covering whole of the UAE.

In a recent meeting at the department – the first of co-ordinators for corporate partnerships between the UAE’s land and municipality departments – discussions centred around setting up such as database, which would have all available data on real estate, land and properties, as well as the laws and legislations currently in force in all emirates. It would be a unified service for the entire country and would serve all nationals, investors and real estate developers.

The meeting discussed methods of collecting data, conducting research and compiling statistical reports on land affairs in each emirate, and ultimately coming up with a unified and integrated database on all land and property in the country.

Other topics discussed were corporate relations based on transparency with partners, working towards strategic national goals, and unifying legislations and systems in various government departments.

Jumaa bin Humaidan, Assistant Director-General of the Dubai Land DepartmentDubai Land Department

Dubai Land Department

DLD

UAE Government

News Profile Officers

, said the meeting’s aim was to bring about a sense of co-operation and partnership between all the land and municipality departments in the UAE. It also sought to foster the exchange of data related to land and property among various departments in the country in addition to sharing information on laws and legislations. The main aim behind the initiative was integration rather than competition, said bin Humaidan.

Marwan bin Ghalita, Chairman of the Real Estate Regulatory Authority, said one of the aims of corporate partnership was to centralise data and to benefit from the research and expertise acquired by each land department by developing and unifying them through an electronic link and establishing a database to serve all parties.

Abdul Bari bin Souqat, Director of Corporate Partnership at the department, spoke of the several stages of the initiative. The first, he said, was the electronic link between all land and municipality departments, as well as other establishments related to land and property.

The next step was co-ordination and consultation on laws and legislations in force in each emirate to come up with unified laws that would guarantee the continuation of the real estate leap in the country and serve the interests of all parties.

Bin Souqat said meetings of the co-ordinators will take place periodically at all land and municipality departments. The dates for further meetings will be announced in October, he added.

© WAM (Emirates News Agency) 2008

Worrying signs in realty market – Middle East News – Sent Using Google Toolbar

Worrying signs in realty market – Middle East News

Friday, Jul 25, 2008

Gulf News

Dubai: Real estate speculators need to be rooted out of Dubai’s housing market, and introducing a 50 per cent capital gains tax on properties bought and sold within a period of 12 months could be the best way to discourage short-term speculators, Standard Chartered Bank said yesterday.

Curbs against speculators will reduce house prices and improve the stability of the market, the bank noted in a research paper.

“It is a hot topic and having a huge impact on the economy. We need to get speculators out of the market,” said Marios Mara-theftis, the bank’s regional head of research for Middle East, North Africa and Pakistan.

He said there are “worrying signs” of speculative activity in Dubai’s real estate market, which is “destabilising, dangerous and unsustainable.” He said speculation in Dubai has reached “excessive levels.”

The introduction of a capital gains tax would encourage long-term investors and end-users to buy property, he said.

The bank’s report said that due to the increasing population, 44,000 housing units have to be released on to the market each year in order to keep up with demand.

The report also shows there is a premium of Dh1,950 per square foot for villas and for apartments, the price increases around Dh70 per square foot the higher the floor.

There are also significant premiums for the Palm Jumeirah at Dh1,110 per square foot and Burj Dubai at Dh3,965.

Standard Chartered had forecast back in March that there would be a 15 per cent premium in 2008 in the housing market.

“Well, it wasn’t 15 per cent in one year, it was 42 per cent in three months,” Maratheftis said. He said it is the short-term investors, looking to make money, who are hurting the market.

© Gulf News 2008. All rights reserved.

Schon Properties Massive Problems – Schon seeks "help" for Dubai Lagoons

original published GulfNews

By Suzanne Fenton, Staff Reporter

Published: July 29, 2008, 00:05

Dubai:

Developer, Schon Properties is in talks to appoint two more major contractors to speed up progress on their Dh3 billion project, Dubai Lagoons located in Dubai Investment Park (DIP).

Phase one of the project, launched in 2005, was meant to be complete by December this year. However, Nasser Hussain, co-chairman of Schon Properties, said “as the construction progress is slow by the present Thai contractor”, they are looking to other contractors for help.
Speaking to Gulf News on Sunday, Hussain said that they were in talks with a leading contractor already.

Hussain said the delay in Dubai Lagoons began last year when the Roads and Transport Authority (RTA) froze development activity so they could plan a major highway through DIP, directly next to the Lagoons.

There have also been discussions between contractor, Powerline Gulf and Schon Properties over the amount paid to the contractor.

Schon Properties have already paid over Dh107 million to Powerline Gulf, but due to the rising construction costs that sprang up over the long delay, Hussain said they are now having to pay a total of just over Dh613 million for phases one and two.

Hussain said construction costs alone for the entire project could cost up to Dh2.2 billion.

This news comes after concerned investors held a meeting on Sunday to discuss ways to stop their payments or receive refunds back on their investments in the Lagoons project.

One investor said, “We see a lot of delays in the market but they [projects] all get done, they all have a plan to finish. Here, there is no plan.”

Investors are annoyed that they have not been offered full refunds or compensation while they have waited three years already since the launch.

On July 14, Hussain wrote an e-mail to Dubai Land Department, saying, “We, as the developer of Dubai Lagoon, are ready to refund full monies to every customer who bought in Dubai Lagoon and are not satisfied.”

Real estate database to cover all emirates – Middle East News – Sent Using Google Toolbar

Real estate database to cover all emirates – Middle East News

27 July 2008
The Dubai Land DepartmentDubai Land Department

Dubai Land Department

DLD

UAE Government

News Profile Officers

is in the preliminary stages of establishing a unified real estate database covering whole of the UAE.

In a recent meeting at the department – the first of co-ordinators for corporate partnerships between the UAE’s land and municipality departments – discussions centred around setting up such as database, which would have all available data on real estate, land and properties, as well as the laws and legislations currently in force in all emirates. It would be a unified service for the entire country and would serve all nationals, investors and real estate developers.

The meeting discussed methods of collecting data, conducting research and compiling statistical reports on land affairs in each emirate, and ultimately coming up with a unified and integrated database on all land and property in the country.

Other topics discussed were corporate relations based on transparency with partners, working towards strategic national goals, and unifying legislations and systems in various government departments.

Jumaa bin Humaidan, Assistant Director-General of the Dubai Land DepartmentDubai Land Department

Dubai Land Department

DLD

UAE Government

News Profile Officers

, said the meeting’s aim was to bring about a sense of co-operation and partnership between all the land and municipality departments in the UAE. It also sought to foster the exchange of data related to land and property among various departments in the country in addition to sharing information on laws and legislations. The main aim behind the initiative was integration rather than competition, said bin Humaidan.

Marwan bin Ghalita, Chairman of the Real Estate Regulatory Authority, said one of the aims of corporate partnership was to centralise data and to benefit from the research and expertise acquired by each land department by developing and unifying them through an electronic link and establishing a database to serve all parties.

Abdul Bari bin Souqat, Director of Corporate Partnership at the department, spoke of the several stages of the initiative. The first, he said, was the electronic link between all land and municipality departments, as well as other establishments related to land and property.

The next step was co-ordination and consultation on laws and legislations in force in each emirate to come up with unified laws that would guarantee the continuation of the real estate leap in the country and serve the interests of all parties.

Bin Souqat said meetings of the co-ordinators will take place periodically at all land and municipality departments. The dates for further meetings will be announced in October, he added.

© WAM (Emirates News Agency) 2008

Worrying signs in realty market – Middle East News – Sent Using Google Toolbar

Worrying signs in realty market – Middle East News

Friday, Jul 25, 2008

Gulf News

Dubai: Real estate speculators need to be rooted out of Dubai’s housing market, and introducing a 50 per cent capital gains tax on properties bought and sold within a period of 12 months could be the best way to discourage short-term speculators, Standard Chartered Bank said yesterday.

Curbs against speculators will reduce house prices and improve the stability of the market, the bank noted in a research paper.

“It is a hot topic and having a huge impact on the economy. We need to get speculators out of the market,” said Marios Mara-theftis, the bank’s regional head of research for Middle East, North Africa and Pakistan.

He said there are “worrying signs” of speculative activity in Dubai’s real estate market, which is “destabilising, dangerous and unsustainable.” He said speculation in Dubai has reached “excessive levels.”

The introduction of a capital gains tax would encourage long-term investors and end-users to buy property, he said.

The bank’s report said that due to the increasing population, 44,000 housing units have to be released on to the market each year in order to keep up with demand.

The report also shows there is a premium of Dh1,950 per square foot for villas and for apartments, the price increases around Dh70 per square foot the higher the floor.

There are also significant premiums for the Palm Jumeirah at Dh1,110 per square foot and Burj Dubai at Dh3,965.

Standard Chartered had forecast back in March that there would be a 15 per cent premium in 2008 in the housing market.

“Well, it wasn’t 15 per cent in one year, it was 42 per cent in three months,” Maratheftis said. He said it is the short-term investors, looking to make money, who are hurting the market.

© Gulf News 2008. All rights reserved.

Kippreport » Article Real Estate The Work » Ivory Tower developer scaring investors with threat of financial collapse

Kippreport » Article Real Estate The Work » Ivory Tower developer scaring investors with threat of financial collapse

28, July 2008

Less than a month after finally nailing a construction start date for its delayed-by-two-years Ivory Tower, Sokook Investment Group is again threatening investors with a cancellation of contracts.

Several investors have contacted Kipp claiming Sokook has told them it will cancel contracts if the original payment schedules had not been kept. Investors say the investment schedule was in tatters as construction work has yet to start on the 20-storey Dubai tower, and they have confirmation new schedules had been agreed.

Sales kicked off in 2006, with all 770 apartments sold out by mid-2007; work was expected to be complete by mid-2008. After much wrangling with RERA, The National reported a new start date of November 1. Presumably they mean 2008.

At the time RERA said it was aware Sokook was offering to buy out investors, but as it wasn’t forcing them it wasn’t illegal.

“We received confirmation from Sokook that they never forced the ‘buyback’ option on their clients – it was given to them as an option. So it was not illegal, as it was never forced,” said Khawla Madani, a senior legal officer at RERA.

Sokook is now telling investors it will buy back the contracts, with a maximum 10 per cent premium on what investors have already paid. Investors are being told that if Sokook files for bankruptcy they will get nothing back.

Properties in the area (International Media Production Zone) are currently selling at Dh1,400 per sq ft, Sokook are offering the original price (Dh550 per sq ft), plus 10 per cent.

“I was put on to a negotiator who would not give me a start date for construction only that there has been a major delay,” says one. “They are trying to scare as many investors into selling the units back.”
Investor groups are now threatening legal action, and, with no feedback from Sokook, are contacting the media to raise the issue. Several investors claim RERA has told them, off-the-record, it can’t do anything to solve this, and the best option is to go legal.

The protest group says Sokook has said before that construction will start imminently, but that is “a smoke screen for them to have more time to figure out what to do next”.

Who are the people behind Schon Properties ?

Pakistans Rich List of 2008 Teeth Maestro: “

6 – Nasir Schon & family U.A.E/Pakistan
Ranking: 6 (tied at 6) Worth: £500m ($1billion) Industry: Businessman

Nasir Schon is a prominent business leader of Pakistan and the CEO of Schon Group.

Nasir Schon is the son of Captain Ather Schon Hussain, an ex-pilot of PIA.

The Schon family is one of the few striving Muhajir Urdu business families in Pakistan. Starting off in Singapore in 1982, the peek of Schon group was in 1995 when they owned National Fibres, Schon Bank, Schon Textiles and Pak-China Fertizilers. Famous for the trend-setting roundabout, Schon Circle, Nasir Schon is also known to be one of the first people to have a Rolls-Royce in Pakistan.

Directors of Schon group flew to Dubai in 1997 in exile after the dismissal of ex-Prime Minister Benazir Bhutto.

The directors of Schon group were known to have close contacts with the husband of former Prime Minister, Asif Zardari. Many assets of the Schon group were auctioned by the Nawaz Sharif government. Schon Group is the only group in Pakistan who has paid the government over 3 billion rupees ($65m) in order to return from exile.

Living in Dubai gave Nasir Schon an opportunity to start businesses there. Currently working on an $830 million real estate project known as Dubai lagoon, Schon group is also fighting to get back the assets they once lost.

Currently, the Schon group operates a pilot training center in Pakistan known as Schon Air.”

Bank issues warning on ‘destabilising’ property speculators – Real Estate – ArabianBusiness.com

Bank issues warning on ‘destabilising’ property speculators – Real Estate – ArabianBusiness.com: ArabianBusiness.com

by Amy Glass on Thursday, 24 July 2008

QUICK GAINS: Standard Chartered says short-term speculators looking to are damaging Dubai’s property market. (Getty Images)The Dubai government should take action immediately to stop rampant speculative activity across the emirates’ property market, Standard Chartered warned on Thursday.

Speaking on the sidelines of a press conference, Marios Maratheftis, regional head of research at Standard Chartered, told Arabian Business the government must act “as soon as possible” to rid the real estate market of destabilising short-term buyers.

According to Colliers International, property prices in Dubai rose 42 percent in the first three months of 2008, well beyond Standard Chartered’s forecast of 15 percent for the entire year.

The bank’s research revealed prices were being inflated by short-term buyers who were on-selling their properties, even before their first installments were due, with the sole intention of making a quick profit.”

Maratheftis said the situation was so urgent, the government should impose a capital-gains tax of at least 50 percent on profits from properties purchased and sold within a 12 month period.

Buyers who held onto their property for longer should be exempt, he added.Real estate developers should also require a higher deposit figure than the standard 10 percent for a property, such as 20 percent of the property’s value.

Buyers should be also be forced to provide proof they can afford the remaining payments.

Off-plan properties are currently suffering from the most speculation, with the cost of these properties often the same as for completed units, Maratheftis said.Property prices in Dubai have soared since foreigners were given the right to own real estate in limited areas in 2002, with demand surging past supply on rapid population growth.

Bank issues warning on ‘destabilising’ property speculators – Real Estate – ArabianBusiness.com

Bank issues warning on ‘destabilising’ property speculators – Real Estate – ArabianBusiness.com: ArabianBusiness.com

by Amy Glass on Thursday, 24 July 2008

QUICK GAINS: Standard Chartered says short-term speculators looking to are damaging Dubai’s property market. (Getty Images)The Dubai government should take action immediately to stop rampant speculative activity across the emirates’ property market, Standard Chartered warned on Thursday.

Speaking on the sidelines of a press conference, Marios Maratheftis, regional head of research at Standard Chartered, told Arabian Business the government must act “as soon as possible” to rid the real estate market of destabilising short-term buyers.

According to Colliers International, property prices in Dubai rose 42 percent in the first three months of 2008, well beyond Standard Chartered’s forecast of 15 percent for the entire year.

The bank’s research revealed prices were being inflated by short-term buyers who were on-selling their properties, even before their first installments were due, with the sole intention of making a quick profit.”

Maratheftis said the situation was so urgent, the government should impose a capital-gains tax of at least 50 percent on profits from properties purchased and sold within a 12 month period.

Buyers who held onto their property for longer should be exempt, he added.Real estate developers should also require a higher deposit figure than the standard 10 percent for a property, such as 20 percent of the property’s value.

Buyers should be also be forced to provide proof they can afford the remaining payments.

Off-plan properties are currently suffering from the most speculation, with the cost of these properties often the same as for completed units, Maratheftis said.Property prices in Dubai have soared since foreigners were given the right to own real estate in limited areas in 2002, with demand surging past supply on rapid population growth.

Schon Properties – Well planned Property Scandal at Dubai Investment Park

posted 20. July 2008 – to Dubai7Stars.blogspot.com

written by frustrated Investors of Schon Properties

Any project whether it is residential or commercial launched by Schon properties to my and overseas investor’s experience is regarded as too risky not only in Dubai but also elsewhere, since the company has fully failed to deliver their first and foremost ambitious project, as they say; the Dubai Lagoon project located within the Dubai Investment Park.

Currently they have following featured projects:

· Dubai Lagoon which was launched in 2005 for 51 buildings, but still sticking to the sand byTown Center Management.

· The Quartet at Dubai Lagoon in the same location but launched in 2007.

· Schön Business Park by Schon Investment Limited

· Schön Residences by YRA Enterprises Limited

· The Signet and the most recent one Libertas, a commercial property located between Dubai

and Abu Dhabi (legal entities not known to me at this point).

Anyone who wants to invest in these projects, first please go to the Schon properties old website www.dubailagoon.com.

Since they had a very bad publicity, they were compelled to change their corporate logo and switched to another website: www.schonproperties.com.

It is interesting to see that their first website have published newsletters for the investors which does not show much achieved whatever they have promised there.

When I write this blog as of 20^th of July 2008, the construction is not even 10% ahead.

The photographs taken in the month of July 2008, the latest.

Remember total 51 buildings and over 4000 apartments to complete and see the pathetic progress made by this developer!

No doubt for me, Schon Properties Limited is one of the most crooked, illegal, untrustworthy developers in Dubai.

Why and how they have been allowed to do business in Dubai and elsewhere in the UAE is a big question.

Not only do they mislead the public by illegally using Schon as their name.. their real name is Husain.. may be they do not want the public to know of their Pakistani background by giving a touch of German word – Schon with 2 dots (umlaut) over the “O”

When I saw the advertisement in 2006, I thought this was a serious company.

They also illegally misled us for buying their property on the condition that we were entitied for a residence visa automatically upon purchase of Dubai Lagoon which was not true.

This out of the blue promise recently came out as false after RERA Audit.

The company does not adhere to global universal business standards and have been stealing from the public with their off plan scams, again and again in front of Dubai Government officials.

Morever, My apartment was purchased in 2006 through another property broker under Name 3D Venture Real Estate and again, Pakistani businessmen who are doing business with Schon in collussion.

When I have asked for a fair settlement through a refund on my problems, it has recently been revealed that they have not disclosed any brokerage fee to us while signing the official contract with Town Center Managerment hence, no transparency on our deal.

We have already involved RERA but still correspondence are going on.

In addition, we have informed Dubai Police, General Manager of Dubai Investment Park Mr. Omar Al Mesmar, UAE Mission for which I I I I am waiting for an answer from them.

A normal refund which we have asked is still in pipeline and is for sure, deliberately being dragged on and on inspite of RERA’s green signal to Schon Properties showing no objection of releasing the refund to us.

Beneficial owners of these firms (you can see all of them personally smiling on their company website while investors are having sleepless nights!) should be legally punished. These are the types of individuals who make Dubai and for that matter UAE in dark shadows which this great land of possibilities is not entitled to.

I am hoping that the UAE Government officials act and bring justice for all the overseas and domestic investors they have damaged and hurt.

BUYERS BEWARE.!!!!..

To all individuals who have received fake excuses from this developer for those horrific year after year delay, do not trust Schon Properties any more.!!

Instead take collective action against these unscrupulous, inexperienced developers now!! Do not go for individual solutions which is not effective.

Just a quick advice for those who are taking action againtst SP.

You can also write a complaint against SP to Ministery of Justice; they have big influece on the Courts and government departments. You can get their details from the internet.

This is one of the messages we have received from another Dubai Lagoon Investor and this is what she/he has to say

Quote

To all Dubai lagoon investors;

I would like to share some infomation that might interest you….

I also have a flat in Dubai Lagoon phase-1. I am currently in court proceedings with Schon Properties to get my refund.

I have been told by my lawyer that Schon Properties previously known as TCM
(Town Center Management) had no legal right to sell any appartment to any individuals back in the end of 2005 which they have done.

What I mean is that the Governmental Authority had not given them the rigtht to sell these appartments when they did and therefore, they have broken the Duabi law. Schon properties are carrying out illegal activities and they do not respect anyone even RERA. I do not think that RERA has a huge influence on getting your rights from Schon and I therefore, advice you to get a Lawyer that will properly dig the secrets of schon properties and what is behind the lies that they all telling their investors. Dubai Courts will give your rights from Schon properties..

I hope this helped..
XXXXXX (Name not disclosed)
Unquote

Thats all for now.

More stories to follow as and when more updates we get. For further information, you may visit :

· Dubai Lagoon Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?t=292680&page=84

· The Signet, Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?p=22861392

· Schon Residence Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?p=22411850

A Overseas Victim of Dubai Lagoon Project !

Schon Properties – Well planned Property Scandal at Dubai Investment Park

posted 20. July 2008 – to Dubai7Stars.blogspot.com

written by frustrated Investors of Schon Properties

Any project whether it is residential or commercial launched by Schon properties to my and overseas investor’s experience is regarded as too risky not only in Dubai but also elsewhere, since the company has fully failed to deliver their first and foremost ambitious project, as they say; the Dubai Lagoon project located within the Dubai Investment Park.

Currently they have following featured projects:

· Dubai Lagoon which was launched in 2005 for 51 buildings, but still sticking to the sand byTown Center Management.

· The Quartet at Dubai Lagoon in the same location but launched in 2007.

· Schön Business Park by Schon Investment Limited

· Schön Residences by YRA Enterprises Limited

· The Signet and the most recent one Libertas, a commercial property located between Dubai

and Abu Dhabi (legal entities not known to me at this point).

Anyone who wants to invest in these projects, first please go to the Schon properties old website www.dubailagoon.com.

Since they had a very bad publicity, they were compelled to change their corporate logo and switched to another website: www.schonproperties.com.

It is interesting to see that their first website have published newsletters for the investors which does not show much achieved whatever they have promised there.

When I write this blog as of 20^th of July 2008, the construction is not even 10% ahead.

The photographs taken in the month of July 2008, the latest.

Remember total 51 buildings and over 4000 apartments to complete and see the pathetic progress made by this developer!

No doubt for me, Schon Properties Limited is one of the most crooked, illegal, untrustworthy developers in Dubai.

Why and how they have been allowed to do business in Dubai and elsewhere in the UAE is a big question.

Not only do they mislead the public by illegally using Schon as their name.. their real name is Husain.. may be they do not want the public to know of their Pakistani background by giving a touch of German word – Schon with 2 dots (umlaut) over the “O”

When I saw the advertisement in 2006, I thought this was a serious company.

They also illegally misled us for buying their property on the condition that we were entitied for a residence visa automatically upon purchase of Dubai Lagoon which was not true.

This out of the blue promise recently came out as false after RERA Audit.

The company does not adhere to global universal business standards and have been stealing from the public with their off plan scams, again and again in front of Dubai Government officials.

Morever, My apartment was purchased in 2006 through another property broker under Name 3D Venture Real Estate and again, Pakistani businessmen who are doing business with Schon in collussion.

When I have asked for a fair settlement through a refund on my problems, it has recently been revealed that they have not disclosed any brokerage fee to us while signing the official contract with Town Center Managerment hence, no transparency on our deal.

We have already involved RERA but still correspondence are going on.

In addition, we have informed Dubai Police, General Manager of Dubai Investment Park Mr. Omar Al Mesmar, UAE Mission for which I I I I am waiting for an answer from them.

A normal refund which we have asked is still in pipeline and is for sure, deliberately being dragged on and on inspite of RERA’s green signal to Schon Properties showing no objection of releasing the refund to us.

Beneficial owners of these firms (you can see all of them personally smiling on their company website while investors are having sleepless nights!) should be legally punished. These are the types of individuals who make Dubai and for that matter UAE in dark shadows which this great land of possibilities is not entitled to.

I am hoping that the UAE Government officials act and bring justice for all the overseas and domestic investors they have damaged and hurt.

BUYERS BEWARE.!!!!..

To all individuals who have received fake excuses from this developer for those horrific year after year delay, do not trust Schon Properties any more.!!

Instead take collective action against these unscrupulous, inexperienced developers now!! Do not go for individual solutions which is not effective.

Just a quick advice for those who are taking action againtst SP.

You can also write a complaint against SP to Ministery of Justice; they have big influece on the Courts and government departments. You can get their details from the internet.

This is one of the messages we have received from another Dubai Lagoon Investor and this is what she/he has to say

Quote

To all Dubai lagoon investors;

I would like to share some infomation that might interest you….

I also have a flat in Dubai Lagoon phase-1. I am currently in court proceedings with Schon Properties to get my refund.

I have been told by my lawyer that Schon Properties previously known as TCM
(Town Center Management) had no legal right to sell any appartment to any individuals back in the end of 2005 which they have done.

What I mean is that the Governmental Authority had not given them the rigtht to sell these appartments when they did and therefore, they have broken the Duabi law. Schon properties are carrying out illegal activities and they do not respect anyone even RERA. I do not think that RERA has a huge influence on getting your rights from Schon and I therefore, advice you to get a Lawyer that will properly dig the secrets of schon properties and what is behind the lies that they all telling their investors. Dubai Courts will give your rights from Schon properties..

I hope this helped..
XXXXXX (Name not disclosed)
Unquote

Thats all for now.

More stories to follow as and when more updates we get. For further information, you may visit :

· Dubai Lagoon Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?t=292680&page=84

· The Signet, Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?p=22861392

· Schon Residence Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?p=22411850

A Overseas Victim of Dubai Lagoon Project !

Protection Law planned for property buyer in Dubai

original published TheNational.ae
http://www.thenational.ae/article/20080619/BUSINESS/979078495/1041/ART
Angela Giuffrida
Last Updated: June 19. 2008 9:13PM UAE / June 19. 2008 5:13PM GMT

The proposed property law would also give home buyers the right to seek compensation against developers who make changes to a project’s design halfway through construction. Ryan Carter / The National

People who buy property off developers’ plans will be better protected from misleading marketing by developers if a new consumer protection law is passed by the Dubai Land Department (DLD).The proposed property law would also give home buyers the right to seek compensation against developers who make changes to a project’s design halfway through construction.Under the regulation, developers would have to give buyers a “disclosure statement” before signing a contract.

The statement must include full disclosure about a development, such as how many buildings it will include, the facilities it will provide and where it will be located. It would also include the estimated service and maintenance charges for the development and a date of completion.The regulation is also expected to contain a “statutory warranty” from the developer, meaning that home buyers will be entitled to seek compensation if changes are made to a development or the final product differs from its description in the disclosure document.

The aim of the regulation is to crack down on developers who sell properties off-plan and then fail to deliver on their promises.”This is going to be huge if they bring it in,” said Stephen Kelly, an associate with Clyde & Company legal consultants.”It will mean developers warranting that the information in their disclosure is correct and not incomplete. If a developer makes changes to the development later, for example they ­decide the development is only going to have five gyms as ­opposed to the original 20, then a buyer can seek compensation if they suffer loss from the changes.”

The National recently highlighted complaints raised by residents at Jumeirah Beach Residence after the developer, Dubai Properties, decided to cancel five of the gyms originally planned for the project and build a 500-vehicle car park where a beach park had been planned.In 2005, Emaar Properties came under similar pressure from residents at its gated community projects, the Meadows and the Springs. Owners complained that the developer had failed to deliver some of the facilities it had promised, and was also charging for amenities initially sold to them as free of charge.

“These changes, if introduced, will impact how developers market their projects and will hopefully assist in preventing some of the problems that have occurred recently, with developers not completing their developments as they have been represented to purchasers,” said Mr Kelly.

The Real Estate Regulatory Authority (RERA) was set up by the Dubai Government last year to regulate the emirate’s property market and stamp out malpractice among developers.

All developers now have to register with the RERA, and any money made from off-plan sales has to be placed in a specially managed account, known as an escrow.The escrow account must be opened with an approved bank, but before this can happen, developers must provide all details about a project to the DLD, such as the title deed of the plot, the designs and layout. Money made from off-plan sales is then placed in the account and used only to fund the construction of the project.

The system is also expected to ensure that construction firms are paid on time.

“You’re no longer going to see property developers collecting money at the launch and then just using it to buy another plot,” said Alexis Waller, a partner at Clyde & Company.”

The developer now has to work with the approved bank, RERA and the DLD to develop a cash flow system, so it’s clear how the development is running and what the money is being spent on. The bank will also have to approve the money being paid to contractors, and when.

It’s really about cracking down on those developers who take the money but then don’t do the work.”

Strata law – legal principles that lay out rules in freehold condominium and apartment developments – took effect in April in Dubai. However, the law is currently under revision and changes may be made.
The law also places the management of a development’s common areas – such as lifts, pools, gyms and parks – in the hands of the home owners, who will be entitled to set up a home owners association.

A spokesman for the RERA, who wished not to be named, said the authority was close to finalising the revisions of the law.
Walid Abdel Latif, the director of sales and marketing at Define Properties, which recently launched in Dubai with a planned portfolio of properties worth Dh8 billion (US$2.1bn), said the fresh regulations would weed out the poor quality developers in the market. “It’s a very healthy move,” he said.

“Through this, we will be able to provide the right services to buyers, will know how much those services will be and how good the actual quality of the building will be. Although we’re a new company, it’s good for us to start from scratch – so we’re building the right way from the start.”

agiuffrida@thenational.ae

Peter Riddoch, CEO Damac Properties, Pt 3/3 | Face to Face

Peter Riddoch, CEO Damac Properties, Pt 3/3 Face to Face

In the final part of our interview with Peter Riddoch, CEO Damac Properties, he discusses why so many real estate developments miss their deadlines, whether the Dubai property boom is a bubble waiting to burst and how the market has changed over the past few years.”

7DAYS General and Local News | Dubai Abu Dhabi | UAE | Property market ‘balanced by 2010’

7DAYS General and Local News Dubai Abu Dhabi UAE Property market ‘balanced by 2010’:

“The booming property markets in Dubai and the Northern Emirates are expected to achieve a more sustainable balance between investors and property owners by 2010, a developer said yesterday. “The construction boom in buildings is about to peak in 2009, with three billion dollars’ worth of real estate either on the drawing board or under construction,” said said Mohammed Nimer, chief executive officer of MAG Group Property Development.

“From there, the value of the market will fall back to 2007 levels of around one billion dollars as more units are delivered. That will hopefully subdue rising market prices.”
Nimer said actual homeowners currently account for just 30 per cent of the properties sold at launch, as real estate sales are still being dominated by short-term investors and not end-users. The result is inflated prices, since units are sold-on with a premium numerous times prior to completion. Nimer pointed to the database held by research firm Proleads, which shows a “dramatic decline in announced new or planned construction” of residential blocks budgeted at up to $100 million next year and in 2010 as dozens of projects reach completion.
“Most projects are still under construction and the next wave of supply will be coming in 2009-2010, which may help bring some stability to the market,” Nimer said. “However, this may not provide major relief from rising prices as much of the problem is also due to the ever-increasing costs of land, labour and materials – something not likely to change in the short term.””

7DAYS General and Local News | Dubai Abu Dhabi | UAE | Property market ‘balanced by 2010’

7DAYS General and Local News Dubai Abu Dhabi UAE Property market ‘balanced by 2010’:

“The booming property markets in Dubai and the Northern Emirates are expected to achieve a more sustainable balance between investors and property owners by 2010, a developer said yesterday. “The construction boom in buildings is about to peak in 2009, with three billion dollars’ worth of real estate either on the drawing board or under construction,” said said Mohammed Nimer, chief executive officer of MAG Group Property Development.

“From there, the value of the market will fall back to 2007 levels of around one billion dollars as more units are delivered. That will hopefully subdue rising market prices.”
Nimer said actual homeowners currently account for just 30 per cent of the properties sold at launch, as real estate sales are still being dominated by short-term investors and not end-users. The result is inflated prices, since units are sold-on with a premium numerous times prior to completion. Nimer pointed to the database held by research firm Proleads, which shows a “dramatic decline in announced new or planned construction” of residential blocks budgeted at up to $100 million next year and in 2010 as dozens of projects reach completion.
“Most projects are still under construction and the next wave of supply will be coming in 2009-2010, which may help bring some stability to the market,” Nimer said. “However, this may not provide major relief from rising prices as much of the problem is also due to the ever-increasing costs of land, labour and materials – something not likely to change in the short term.””

Dubai – Simply no rights for investors ‘Unclear law is threat to realty’ – The 100 % investor risk Dubai property market

‘Unclear law is threat to realty’: Al Mulla

original published Emirates Business 24/7 Hamed Al Sewerky on Thursday, June 19, 2008 Legal expert Dr Habib Al Mulla says Dubai’s real estate market could suffer because of what he describes as “judicial vacuum”. He believes there is conflict between the roles of a number of organisations responsible for the sector. And he says many aspects of the real estate law are unclear and out of step with developments in the sector in Dubai. In an exclusive interview with Emirates Business, Dr Al Mulla – founder and Managing Partner of a Dubai-based law firm that bears his name – calls on those responsible for the sector to end the confusion. —How would you describe the legislation that applies to Dubai’s real estate sector? —The problem with legislation in the real estate market is similar to the problem with legislation in the UAE in general. Legislation is enacted after a period of economic activity or growth and is designed to rectify the situation that has developed. Dubai experienced a real estate boom without full legislation being in place leaving a judicial vacuum in place. Although the period passed off peacefully there was a risk of disasters in the absence of adequate legal procedures and regulations. But now we are entering a stage where there is more organisation and we have seen the introduction of escrow accounts. I wish such accounts had existed at the beginning of the period of real estate growth because they are the only guarantee for investors in the sector. —What do you mean by judicial vacuum? —Development of projects starts with construction. During this phase, disagreements between developers and contractors arise and are referred to the courts. Then comes the completion phase of the project – this is when the property is delivered to the secondary developer and client. Disagreements can arise even at this stage between the developer and the first or second beneficiary. Recently a proposal to set up a committee to settle real estate disputes was put forward and it was followed by the idea of setting up a property court. The first idea is good, but the responsibilities of the committee are still unclear plus the committee has not yet been established even though its launch was announced in December. What is surprising is that after the decision to set up the committee was issued the courts refused to hear real estate cases, even though the committee had not yet been formed. Courts should not refuse cases before the committee is set up. —But the Real Estate Regulatory Agency (Rera) deals with these kinds of complaints and disagreements. —Yes, Rera was dealing with these disputes. Then the property court was established. But there is a question mark here, because a specialised court means federal legislation. Legislation in the real estate field should be federal according to the constitution. The civil procedures law is applied in all kinds of courts, and the real estate court would not be allowed to introduce special measures. —Are we heading for a legislation or a litigation crisis? —The legislative reality of the property sector is like a fireball thrown by one responsible body to another without taking into consideration the requirements of justice. The setting up of the property court ignores the rights of people to resort to [general] courts to settle disputes as it gave the property court the right to look into arbitration decisions. —How is Rera’s complaints procedure working out? —Complaints are registered at Rera only on certain days and this is not practical. In addition not all complaints are accepted and receipts indicating that the complaints have been received are not given to clients. —How would you resolve this crisis? —If we are not able to set up specialised courts without federal legislation then let us leave it to the normal courts. General law is enough and we can add to it and develop it instead of robbing the legal system of the ability to handle issues in a comprehensive and thorough manner. —What can investors in real estate sector, especially small ones, do? —I have not found a solution and have failed to resolve some clients’ cases because I do not know where to go. I went to the executive council, as it is the party that will form the committee, without success. As for normal courts, they rejected the cases. So I went to Rera, where I was told that such disputes were not their area of responsibility. In fact there is no solution. All means have been blocked and what is left is resorting to the media to raise this issue. —Why are all deals in the real estate sector contracts of submission? Legally speaking, contracts in the real estate sector, especially those between developers and buyers, are not contracts of submission. But realistically speaking they are since the buyer has no right to negotiate and has no other option but to accept the conditions as they are. And I see this as a real crisis that requires urgent intervention by officials as this could negatively affect Dubai’s real estate growth. In more developed countries there are laws to protect the consumer. Legislators here should intervene in the real estate sector to set general rules protecting consumer rights. —But does repeated intervention by legislators not conflict with the principles of a free economy? —A free economy does not mean non-intervention by legislators. It means parties having the freedom to enter into contracts in a way that does not harm their interests. And what is happening now is that there is a large group of consumers who are suffering injustice at the hands of developers because of the absence of a legislative tool. —Do some of these practices amount to criminal acts? —These practices are not criminal as crimes have to be defined in law, and as long as there is no legal text defining certain acts in this way they are not crimes. But they can be called negative practices or violations. —What are the most significant negative practices that your firm comes across? —Some developers are not sticking to contracts in terms of finishings, space and the positions of properties – and the buyer can do nothing. Suing can cost the buyer more than the return on the investment. Some developers annul their contracts with buyers and issue new contracts at higher prices – this happens with both small and large developers. —Where can real estate legislative reform start? —Clarity is the best solution. Vagueness threatens the sector, whether it is related to laws, procedures or the acceptance or rejection of complaints. All this cannot be left to personal opinions. —Do you prefer local or federal legislation? —The constitution stipulates that legislation on real estate ownership should be federal. But federal legislation can be flexible by giving freedom to the emirates to establish procedures and execute the law in accordance with their own special circumstances. PROFILE: Dr Habib Al Mulla, Founder and Managing Partner of Habib Al Mulla and Company Dr Habib Al Mulla has a PhD from Cambridge in the United Kingdom, an LLM from Harvard and a BA in Shariah, civil and criminal law from the UAE University. He is licensed to appear in all courts in the UAE and specialises in commercial and corporate transactions, internet technology, intellectual property rights and banking. Al Mulla is a member of the Federal National Council and former Chairman of the Dubai Financial Services Authority. He founded Habib Al Mulla and Company in 1984 and the firm has become one of the largest of its kind in Dubai.

RERA Dubai Property Law – Strata Law unclear about rights of building owners

Strata Law unclear about rights of building owners

originial published Emirates Business 24/7 Anjana Kumar on Sunday, June 29, 2008 The new Strata Law is unclear about the rights of building owners and communities, according to a legal expert. “The law was drawn up to establish the ownership of individual apartments and office spaces in a development and give legal status to homeowners’ associations. But it does not cover the election of association office bearers and how resolutions are adopted and implemented,” said Ali Al Haddad, owner and Senior Lawyer at Al Haddad & Associates. “Also there is no mention about the accounts and balance sheet of the homeowners’ associations,” he added. The Strata Law came into effect through Law No27 of 2007, which contains 33 Articles with no mention of any penalty clauses. Also, Law No7 of 2006 concerning property registration in Dubai also does not contain any penalty clauses. “Considerable rights were given to the master developers regarding the constitutions of homeowners’ associations, but they should be given powers to amend their constitutions. According to the law, master developers make the constitution, rules and regulations for the homeowners’ association. If the master developer prepares the initial constitution, the association must have powers to amend it when it is fully set up. A senior official of another Dubai-based law firm says the rights of buyers and sellers will remain in a state of transition until the Strata Law is finalised by the Real Estate Regulatory Agency. “One cannot really decide what rights people have or don’t have without the regulations of the Strata Law being finalised,” said DLA Piper Middle East’s Real Estate Practice chief Tom O’Grady. The Strata Law is very dependent on the regulations, which are still at the draft phase. Hence, the law will not have much of an effect on the market, he added. “However, there will certainly be more sense of an involvement by the community in decision making in terms of how budgets are struck for developments. More involvement by owners will imply empowerment of people who will feel more involved in their development.” O’Grady suggested the legislation should not be viewed in terms of owners versus buyers, or developers versus buyers but as a partnership between residents and developers. “The law is not about control. You can’t really have a system of freehold ownership of horizontal property without creating a strata law. In most common-law jurisdictions, you either have a landlord and tenant relationship or you create some sort of a condominium and strata law ownership. “Any mature jurisdiction has seen hundreds of years of an active property market, but for a nascent property market such as the UAE to come up with rules and regulations is going to be a little complicated affair. I think if you looked at the building level the strata law could work but at the community level it could get more difficult. “In more mature jurisdictions such as Australia and the US which have had condominium laws for years you tend to have different layers of control. “So if you take somewhere in Dubai like the Meadows or the Greens you have a management company managing the community and all basic infrastructure such as the roads and district cooling. “Right now, the owners’ associations are concentrating on individual blocks rather than the larger community level. “Thus, the complexity of the strata law is heightened because of competing interests in communities in the UAE.”

Property Scandal UAE Al Salam City – Stressed Investors of AL SALAM CITY setup Website

AL SALAM CITY – The developer of Al Salam City have put the project on hold. This happened in March 2008 but was not communicated to the buyers

Wecome to http://www.alsalamcity.biz/ this site has been created by a group of extremely unhappy investors and is for anyone who has purchased a property in Al Salam City and is wondering what happens next.

The developer of Al Salam City have put the project “on hold”. This happened in March 2008 but was not communicated to the buyers, it was only the people who contacted Tameer who were told of the options. Now as time is ticking by, we need to know what exactly is happening to our investments.

We are looking for people to unite as one big entity to make our opinions and losses understood and compensated.

Please feel free to register as a user and use the blog site, its totally free and we are looking for like minded people who have suffered.

The blog site is an excellent medium for any news, sharing stories and also for us to agree on what our action plan will be.

Who am I? Well I am an investor in Al Salam City who has come to the end of a very long road of bad customer service. Someone who has been ignored, not called back, not replied to and basically lied to throughout the whole process. I feel the need to take action, for myself and my family. What has happened is not acceptable and now is the time to do something about it.

If you would like to contact me or my team click the ‘contact us’ link

RERA Dubai Property Law – Strata Law unclear about rights of building owners

Strata Law unclear about rights of building owners

originial published Emirates Business 24/7 Anjana Kumar on Sunday, June 29, 2008 The new Strata Law is unclear about the rights of building owners and communities, according to a legal expert. “The law was drawn up to establish the ownership of individual apartments and office spaces in a development and give legal status to homeowners’ associations. But it does not cover the election of association office bearers and how resolutions are adopted and implemented,” said Ali Al Haddad, owner and Senior Lawyer at Al Haddad & Associates. “Also there is no mention about the accounts and balance sheet of the homeowners’ associations,” he added. The Strata Law came into effect through Law No27 of 2007, which contains 33 Articles with no mention of any penalty clauses. Also, Law No7 of 2006 concerning property registration in Dubai also does not contain any penalty clauses. “Considerable rights were given to the master developers regarding the constitutions of homeowners’ associations, but they should be given powers to amend their constitutions. According to the law, master developers make the constitution, rules and regulations for the homeowners’ association. If the master developer prepares the initial constitution, the association must have powers to amend it when it is fully set up. A senior official of another Dubai-based law firm says the rights of buyers and sellers will remain in a state of transition until the Strata Law is finalised by the Real Estate Regulatory Agency. “One cannot really decide what rights people have or don’t have without the regulations of the Strata Law being finalised,” said DLA Piper Middle East’s Real Estate Practice chief Tom O’Grady. The Strata Law is very dependent on the regulations, which are still at the draft phase. Hence, the law will not have much of an effect on the market, he added. “However, there will certainly be more sense of an involvement by the community in decision making in terms of how budgets are struck for developments. More involvement by owners will imply empowerment of people who will feel more involved in their development.” O’Grady suggested the legislation should not be viewed in terms of owners versus buyers, or developers versus buyers but as a partnership between residents and developers. “The law is not about control. You can’t really have a system of freehold ownership of horizontal property without creating a strata law. In most common-law jurisdictions, you either have a landlord and tenant relationship or you create some sort of a condominium and strata law ownership. “Any mature jurisdiction has seen hundreds of years of an active property market, but for a nascent property market such as the UAE to come up with rules and regulations is going to be a little complicated affair. I think if you looked at the building level the strata law could work but at the community level it could get more difficult. “In more mature jurisdictions such as Australia and the US which have had condominium laws for years you tend to have different layers of control. “So if you take somewhere in Dubai like the Meadows or the Greens you have a management company managing the community and all basic infrastructure such as the roads and district cooling. “Right now, the owners’ associations are concentrating on individual blocks rather than the larger community level. “Thus, the complexity of the strata law is heightened because of competing interests in communities in the UAE.”

Property Scandal UAE Al Salam City – Stressed Investors of AL SALAM CITY setup Website

AL SALAM CITY – The developer of Al Salam City have put the project on hold. This happened in March 2008 but was not communicated to the buyers

Wecome to http://www.alsalamcity.biz/ this site has been created by a group of extremely unhappy investors and is for anyone who has purchased a property in Al Salam City and is wondering what happens next.

The developer of Al Salam City have put the project “on hold”. This happened in March 2008 but was not communicated to the buyers, it was only the people who contacted Tameer who were told of the options. Now as time is ticking by, we need to know what exactly is happening to our investments.

We are looking for people to unite as one big entity to make our opinions and losses understood and compensated.

Please feel free to register as a user and use the blog site, its totally free and we are looking for like minded people who have suffered.

The blog site is an excellent medium for any news, sharing stories and also for us to agree on what our action plan will be.

Who am I? Well I am an investor in Al Salam City who has come to the end of a very long road of bad customer service. Someone who has been ignored, not called back, not replied to and basically lied to throughout the whole process. I feel the need to take action, for myself and my family. What has happened is not acceptable and now is the time to do something about it.

If you would like to contact me or my team click the ‘contact us’ link

Dubai – Just 28% of real estate agencies are registered

Just 28% of real estate agencies are registered

original published Emirates Business 24/7 By Anjana Kumar on Thursday, June 26, 2008 Only 28 per cent of the 6,000 real estate agencies registered with the Dubai Economic Department have so far registered with Real Estate Regulatory Agency (Rera), Emirates Business has learnt. According to Rera statistics, 1,670 brokerage companies have registered. In addition to this, 3,403 individual agents have registered since the agency was formed last year in July. Those who have not registered however, still have time. The Rera official confirmed that the regulator will not be setting an immediate deadline to register all the companies until it expands its working team. Currently there is a team of seven people working on completing the registration process of brokerage companies. The agency plans to expand the team in August. “We are giving existing firms time to adjust to the new regulation and by introducing the second step, of using electronic forums, all non-compliance agents (freelancers) will not be able to operate in this market.” Rera has given a pre-approval for 150 companies who are waiting to be registered. “Their license will be processed once they finish their training requirement,” the official said. As regards penalties for errant brokers, he said: “It is not about making money through penalties. We are market regulators and would like to help everybody do their job in a professional way.” Law No 85 of 2006, regarding the regulation of real estate brokers, has provisions included as regards “settlement of disputes” and “disciplinary penalties” and “cancellation of brokerage.” “In time we will evaluate all of these new companies to ensure they are complying with the new practices,” the official said. The minimum educational qualification requirement for owners of real estate brokerage firms will be a diploma certificate, while for managers the minimum educational qualification requirement is a bachelor’s degree. “No minimum educational qualification is required for real estate agents in Dubai,” he added. Rera has so far conducted 13 training sessions for 650 estate agents in Dubai since May. Dubai Real Estate Institute has trained 500 estate agents so far with another 1,500 waiting to be enrolled. Michael Grant, Partner, Cluttons, said, “Any training will be a huge step in the right direction. In the UK, agents can undergo training with the National Association of Estate Agents or Royal Institute of Chartered Surveyors, who have a branch in UAE. We have in-house training and have enrolled our team for the Rera training.” These measures have been introduced by Dubai authorities to regulate and ensure that the property sector – what many experts consider the backbone of the economic boom the emirate is seeing – is in line with international best practices and that developer and customer are ensured quality service.

Dubai – Just 28% of real estate agencies are registered

Just 28% of real estate agencies are registered

original published Emirates Business 24/7 By Anjana Kumar on Thursday, June 26, 2008 Only 28 per cent of the 6,000 real estate agencies registered with the Dubai Economic Department have so far registered with Real Estate Regulatory Agency (Rera), Emirates Business has learnt. According to Rera statistics, 1,670 brokerage companies have registered. In addition to this, 3,403 individual agents have registered since the agency was formed last year in July. Those who have not registered however, still have time. The Rera official confirmed that the regulator will not be setting an immediate deadline to register all the companies until it expands its working team. Currently there is a team of seven people working on completing the registration process of brokerage companies. The agency plans to expand the team in August. “We are giving existing firms time to adjust to the new regulation and by introducing the second step, of using electronic forums, all non-compliance agents (freelancers) will not be able to operate in this market.” Rera has given a pre-approval for 150 companies who are waiting to be registered. “Their license will be processed once they finish their training requirement,” the official said. As regards penalties for errant brokers, he said: “It is not about making money through penalties. We are market regulators and would like to help everybody do their job in a professional way.” Law No 85 of 2006, regarding the regulation of real estate brokers, has provisions included as regards “settlement of disputes” and “disciplinary penalties” and “cancellation of brokerage.” “In time we will evaluate all of these new companies to ensure they are complying with the new practices,” the official said. The minimum educational qualification requirement for owners of real estate brokerage firms will be a diploma certificate, while for managers the minimum educational qualification requirement is a bachelor’s degree. “No minimum educational qualification is required for real estate agents in Dubai,” he added. Rera has so far conducted 13 training sessions for 650 estate agents in Dubai since May. Dubai Real Estate Institute has trained 500 estate agents so far with another 1,500 waiting to be enrolled. Michael Grant, Partner, Cluttons, said, “Any training will be a huge step in the right direction. In the UK, agents can undergo training with the National Association of Estate Agents or Royal Institute of Chartered Surveyors, who have a branch in UAE. We have in-house training and have enrolled our team for the Rera training.” These measures have been introduced by Dubai authorities to regulate and ensure that the property sector – what many experts consider the backbone of the economic boom the emirate is seeing – is in line with international best practices and that developer and customer are ensured quality service.

Gulfnews: Ajman cancels PKN Princess Resort project

Gulfnews: Ajman cancels PKN Princess Resort project

original published Gulfnews

By Bassma Al Jandaly Staff Reporter Published: June 22, 2008, 23:54

Dubai: The Ajman Government has cancelled the Dh2.3 billion PKN Princess Resort project and on Sunday urged investors to make their claims directly to the developer. According to an official statement from the Ajman Government those who have purchased properties must make their claims before noon on June 30. The project’s trade licence, commercial registration and membership with Ajman Chamber of Commerce and Industry have been cancelled. The statement said that PKN will be solely liable for any claims from property buyers. According to the statement from the Ajman government, the project located in Al Manama area was cancelled on June 15. The Government of Ajman and PKN Procurement jointly decided to end their relationship in the project.

A reality check for realty boom – Sent Using Google Toolbar

A reality check for realty boom

original By Saifur RahmanBusiness Editor Gulfnews Published: June 20, 2008, 00:08

Dubai: Lack of coordination between government bodies could threaten the growth of the real estate sector in the Northern Emirates, industry officials cautioned on Thursday. More than 300 towers are in various stages of development on both sides of the Emirates Road in Ajman, Umm Al Quwain and Ras Al Khaimah that might be completed but will not see “light” years after completion. Some billions of dirhams have been committed by small investors that could go wrong if government authorities do not collaborate to ensure utilities, officials say. A senior federal government official has accused local governments in the Northern Emirates of “unplanned” developments that could lead to a major crisis relating to power and water supplies, or lack of it. “The abrupt development in the construction field now seen in Northern Emirates is unplanned,” Hassan Abdullah Al Ghasyah, executive director of Supply at the Federal Electricity and Water Authority (Fewa), said in a statement, responding to queries from Gulf News. “Local government authorities have not coordinated on precise water and power requirement with Fewa. However, according to the Cabinet decision, Fewa is committed to a minimum 8 per cent annual growth in power and water demand.” Private sector officials estimate the GDP growth of emirates such as Ajman at 27 per cent and population growth at 18 per cent. Real estate investors who are lining up to buy freehold homes in Ajman might have to wait for an indefinitie period for utilities, industry sources said. Saleh Amer Al Katheeri, chairman of High Sky Properties, which launched Triple Towers hosting 1,160 apartments in Ajman, told Gulf News: “Yes, electricity and water supply remain a concern for us. We have been assured by the government of a steady supply. But if there’s a shortage, we will use our own generator to power these buildings.” Issues related to utilities have forced the construction of Al Salam City – valued at Dh30 billion – to be postponed. Umm Al Quwain last month accused developers Tameer Holding for ignoring the issue, which has largely been under government control. Fewa is meeting the current demand by operating its own plants and importing water and power from Abu Dhabi Electricity and Water Authority, Al Ghasyah said. “In the future, the plan is to increase this import,” he said. Despite rising concerns, small-time investors are scrambling for apartments in new “freehold” areas in the Northern Emirates to make a quick profit. Property prices have also been rising fast due to strong demand. Apartment prices in Ajman have jumped to Dh500 per square foot, up from Dh400 in a matter of months, sources said. Power supply: New plants to be built Shaikh Abdul Aziz Bin Humaid Bin Rashid Al Nuaimi, chairman of Ajman Planning and Property Department, has openly expressed concern about the city. “I believe infrastructure development in Ajman is not coping with the rapid developments in real estate … this could cause problems,” he said. “The sewage project is delaying the infrastructure development, though we are pushing for its completion to go ahead with the infrastructure development. The Ministry of Energy will also build a new electricity and water plant.” - By Bassma Al Jandaly/, Staff Reporter Would you buy property to live or as an investment? Would higher returns on investment encourage you to buy property despite a lack of infrastructure?

A reality check for realty boom – Sent Using Google Toolbar

A reality check for realty boom

original By Saifur RahmanBusiness Editor Gulfnews Published: June 20, 2008, 00:08

Dubai: Lack of coordination between government bodies could threaten the growth of the real estate sector in the Northern Emirates, industry officials cautioned on Thursday. More than 300 towers are in various stages of development on both sides of the Emirates Road in Ajman, Umm Al Quwain and Ras Al Khaimah that might be completed but will not see “light” years after completion. Some billions of dirhams have been committed by small investors that could go wrong if government authorities do not collaborate to ensure utilities, officials say. A senior federal government official has accused local governments in the Northern Emirates of “unplanned” developments that could lead to a major crisis relating to power and water supplies, or lack of it. “The abrupt development in the construction field now seen in Northern Emirates is unplanned,” Hassan Abdullah Al Ghasyah, executive director of Supply at the Federal Electricity and Water Authority (Fewa), said in a statement, responding to queries from Gulf News. “Local government authorities have not coordinated on precise water and power requirement with Fewa. However, according to the Cabinet decision, Fewa is committed to a minimum 8 per cent annual growth in power and water demand.” Private sector officials estimate the GDP growth of emirates such as Ajman at 27 per cent and population growth at 18 per cent. Real estate investors who are lining up to buy freehold homes in Ajman might have to wait for an indefinitie period for utilities, industry sources said. Saleh Amer Al Katheeri, chairman of High Sky Properties, which launched Triple Towers hosting 1,160 apartments in Ajman, told Gulf News: “Yes, electricity and water supply remain a concern for us. We have been assured by the government of a steady supply. But if there’s a shortage, we will use our own generator to power these buildings.” Issues related to utilities have forced the construction of Al Salam City – valued at Dh30 billion – to be postponed. Umm Al Quwain last month accused developers Tameer Holding for ignoring the issue, which has largely been under government control. Fewa is meeting the current demand by operating its own plants and importing water and power from Abu Dhabi Electricity and Water Authority, Al Ghasyah said. “In the future, the plan is to increase this import,” he said. Despite rising concerns, small-time investors are scrambling for apartments in new “freehold” areas in the Northern Emirates to make a quick profit. Property prices have also been rising fast due to strong demand. Apartment prices in Ajman have jumped to Dh500 per square foot, up from Dh400 in a matter of months, sources said. Power supply: New plants to be built Shaikh Abdul Aziz Bin Humaid Bin Rashid Al Nuaimi, chairman of Ajman Planning and Property Department, has openly expressed concern about the city. “I believe infrastructure development in Ajman is not coping with the rapid developments in real estate … this could cause problems,” he said. “The sewage project is delaying the infrastructure development, though we are pushing for its completion to go ahead with the infrastructure development. The Ministry of Energy will also build a new electricity and water plant.” - By Bassma Al Jandaly/, Staff Reporter Would you buy property to live or as an investment? Would higher returns on investment encourage you to buy property despite a lack of infrastructure?

Dubai – A new court set up to deal with property cases

original published EmiratesBusiness 24-7
By Muna Ahmad on Thursday, May 29, 2008

http://www.business24-7.ae/Articles/2008/5/Pages/05292008_4329042711af419fa7130f59c7886811.aspx

By
Muna Ahmad on Thursday, May 29, 2008 will sit for the first time next Monday, a senior official has revealed.

The Property Court will operate under new regulations that differ from those that apply to the existing civil courts, Ahmad bin Hazim, Director-General of Dubai Courts, told Emirates Business.

The court has been established in response to the rapid growth and development that Dubai is experiencing.
It will handle all types of property cases and is one of six specialist courts being set up following an order earlier this month by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

Once the court starts functioning it will develop in stages,” said Bin Hazim.

It will start with all the traditional property cases, which are currently being handled by Dubai Courts.

The court president is going to define new procedures and laws that relate to property cases.

Two sets of laws will be followed.
The first, the Substantive Laws, regulate the sector and are defined by the Land Department. The second, the Procedures Laws, will be drawn up by the court. For example, currently the time between hearings is about one month.

We are going to reduce this gap to about a week.

The Property Court will have its own premises and budget. We have three possible locations but the final site has not yet been decided.

Dubai – A new court set up to deal with property cases

original published EmiratesBusiness 24-7
By Muna Ahmad on Thursday, May 29, 2008

http://www.business24-7.ae/Articles/2008/5/Pages/05292008_4329042711af419fa7130f59c7886811.aspx

By
Muna Ahmad on Thursday, May 29, 2008 will sit for the first time next Monday, a senior official has revealed.

The Property Court will operate under new regulations that differ from those that apply to the existing civil courts, Ahmad bin Hazim, Director-General of Dubai Courts, told Emirates Business.

The court has been established in response to the rapid growth and development that Dubai is experiencing.
It will handle all types of property cases and is one of six specialist courts being set up following an order earlier this month by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

Once the court starts functioning it will develop in stages,” said Bin Hazim.

It will start with all the traditional property cases, which are currently being handled by Dubai Courts.

The court president is going to define new procedures and laws that relate to property cases.

Two sets of laws will be followed.
The first, the Substantive Laws, regulate the sector and are defined by the Land Department. The second, the Procedures Laws, will be drawn up by the court. For example, currently the time between hearings is about one month.

We are going to reduce this gap to about a week.

The Property Court will have its own premises and budget. We have three possible locations but the final site has not yet been decided.

Dubai – Property Right Law isn`t well-developed in UAE

original published The National

The booming UAE property market looks like a can’t-lose investment. Should you bite?

If you’ve seen the eye-popping figures for property prices in the UAE in recent years, and have salivated over the seemingly endless stream of mega-projects planned for Abu Dhabi and Dubai, you’ve probably thought about getting in on the action ­yourself.
And who could blame you?

Estimates for the market in 2008 project an overall price increase of between 10 and 20 per cent.

Tales abound of investors who have flipped properties for a much bigger profit, in some cases doubling their money within months.

And analysts expect demand for housing to outstrip supply for at least a few more years as construction delays continue and new housing projects slowly come on-line.
An excess of demand and a shortage of supply generally means prices go up.

That recipe has investors licking their chops, buying up flats and villas in hopes of cashing in quickly on the boom.

At Cityscape Abu Dhabi, a massive property showcase held recently, the excitement was palpable.

The thing that excites us is that the need is there,” one Austrian couple told me, looking over an enormous model of developments on Reem Island, where they had bought two properties.

The population is growing rapidly, so there is a real need for housing.

That may be so. Yet with the glitz and uniqueness of these projects, not to mention their unprecedented scale, it’s easy to get lost in all the hype.
It’s also tempting to accept the argument that you could easily double or triple your money in a couple of years.

But while buying may turn out to be a smart move, there’s also good reason not to follow the UAE’s property-mad herd.

The first is that the property market looks and acts like a bubble.

Prices have been surging at a clip of 20 per cent a year over the past five years.

At the same time, investors and speculators make up a large share of buyers, which calls into question whether there is enough fundamental demand to justify current prices. As growth in supply eats away at excess demand in the next five or 10 years, the speculators could flee the market, driving prices down ­signficantly.

Abu Dhabi’s Department of Planning and Economy recently warned of just such a boom-and-bust scenario, calling property speculation a “risky business” that “may result in a sharp drop in the value of new units.”

Buying property is an especially risky proposition for expatriates because property rights law isn’t well-developed in the UAE.

If you are arrested and deported after having been found at fault in, say, a traffic accident, there is a chance you could lose your property.

Property investment also involves tremendous political risk. The Government could decide unilaterally to change laws or steer development in a way that negatively affects the value of your investment.

It’s like buying penny stocks in China,” one financial advisor told me. “Go ahead and do it, but be prepared to lose every last cent.”

All this talk about housing is fun, but it ignores one condition under which none of it matters: if you plan to settle down permanently – or at least for the next five years.
That gives you enough time to build up equity to offset the costs of taking on a mortgage and absorb any market swings.

The bigger your down payment, the more insurance you have; 15 to 20 per cent of the purchase price is a solid start.

Of course, you want to be confident that the value of the flat you’re about to shell out millions of dirhams for isn’t going to lose all its value tomorrow.

If you’re just looking for a good place to live, however, most of the predictions are just noise.

Until recent years, nobody aside from a few specialists viewed residential property as an asset to invest in. Houses were places to live and mortgages were forced savings plans that built up equity in a physical asset over decades.

The real estate craze in the US changed all that, as single-family home prices nearly tripled between 1990 and the height of the boom in the summer of 2006, according to the leading US home price index.

It wasn’t until 2000 that the Yale economics professor Robert Shiller put it all into sobering context, showing in his book Irrational Exuberance – which predicted the end of the tech-stock bubble in the US – that home prices had risen at just above the pace of inflation for the prior 100 years. He showed that the US market looked like a bubble and was due for a reversion to its historical mean, but few people believed him until things went south.

Which goes to show that it’s not necessarily smart to think about the house you plan to live in as an investment.
Nobody knows which way the prices are going to go, and most of us need a roof over our heads more than a ticket to vast wealth.

If you can afford to speculate in the UAE’s property boom, do it by all means, but don’t expect to double your money.

One thing I kept hearing from investors at Cityscape recently was that the Abu Dhabi property boom was different, unprecedented, and a unique investment opportunity. It happened in the US stock market in the 1990s. It happened again in the 1990s and 2000s in the US property market. Every bubble is different, but bubbles do have at least one thing in common: they burst.

@Email:Have your own tale of property success or woe? Share it at afitch@thenational.ae

DUBAI – Delays hit building projects – Only one in five construction projects is likely to finish on time

original published The National

Last Updated: May 24. 2008 10:51PM UAE / May 24. 2008 6:51PM GMT

DUBAI // Only one in five construction projects is likely to finish on time, as shortages of materials and skilled workers – and an overabundance of red tape – take their toll.

Industry experts said few of the 4,000 or so projects currently under way would be handed over to clients on the scheduled date. The emirate is currently undergoing a construction frenzy and as the pace of building quickens, so do the risks of delays.

Residential and commercial developments along with road, bridge and utilities projects are all competing for the same resources, compounding the problem.

The same issues could crop up in Abu Dhabi and the northern emirates of Ras al Khaimah and Ajman, as they launch their own large-scale development plans.

The problem is also beginning to manifest in other Gulf states.Qatar, for example, has had to introduce price escalation clauses into contracts to stem the impact of higher building materials prices.

As a result of the delays, the relationship between builders and clients is starting to sour.

In Dubai, only a handful of projects are being completed to the satisfaction of all parties involved, said Kez Taylor, the managing director of Alec, a local building firm.“Only one in five are being completed on time,” said Mr Taylor. We should be hitting the success factor at a much greater rate than we currently are.”

He said the tensions which this led to had threatened to ripple into delays on other projects.
Successful projects … are not the norm in this part of the world.

From this, a blame culture develops, relationships break down, people become despondent and don’t want to do repeat business.”

A major factor in delays and its impact on the relationship between builders and developers was the reluctance of clients to make difficult decisions quickly, Mr Taylor said.
Because of bureaucracy, nobody wants to stick their head out and make a decision, he said.

But it is vital that the client takes the lead – it’s their project.

Emil Rademeyer of Proleads, a research firm, said more than 90 per cent of projects in Dubai were on average two months late.

I don’t think I’ve ever heard of a project being handed over early – that’s probably the question … and I’m pretty certain the response would be very few.

Mr Rademeyer said that late changes in design were a common problem among projects in the region, which led to a complete project overhaul in some cases. The situation was also compounded by a severe shortage in good quality contractors, which impacted on the standard of construction.

While there are the challenges of materials and resources shortages, much of the problem lies with changes to design – I’ve heard of cases when a project has almost been completed but then the owner decides they don’t like it and so they start over,” he said.

And because of the shortage of materials and contractors, clients are sometimes just taking what’s available, which might not be the best quality and is a big threat to the final product.”Developments in Dubai also face severe delays in connecting power, water supplies and telecommunications, with many forced to rely on temporary backups.“

There are internal risks when dealing with partners, but there are also external risks that affect a project,” said Ali Hamdan, the corporate finance manager at Sama Dubai, the developer behind The Lagoons project.

“When it comes to a large-scale project such as The Lagoons, success is dependent on dealing with organisations like the RTA (Roads and Transport Authority), Dewa (Dubai Electricity and Water Authority) and Etisalat – if you don’t connect with the infrastructure on time, you get delayed.

Jubeir Shamte, the executive director of the commercial and contracts department at Dubai Properties, which is developing Business Bay, said that clashes in culture and business practices between foreign and local firms also caused problems.

A lot of foreign companies do not understand the culture here, and when you try and bring in culture from other places such as the UK or America, a lot of problems come with it,” he said.“

For example, the concept of partnering is being treated as a new phenomenon, when it is something that we’ve been doing here for many years.”

agiuffrida@thenational.ae

Good Business shouldn`t tolerate missed deadlines – Eighty per cent of Dubai construction projects will finish late – and no one cares.

original published EmirtesBusiness 24-7
May 25, 2008

It is telling that the ‘revelation’ only one in five construction projects is likely to finish on time does not come as a shock.

Shortages of materials and skilled workers (plus reams of red tape) are the official excuse, but the public has long since abandoned belief in deadlines being met.

As we’ve mentioned here before, as long as property prices continue to rise, investors are not too fazed by these delays. An investment that has doubled in value tends to soften the blow. But what damage does this do to Dubai’s reputation as a can-do business center?

There is a danger that missed deadlines breeds an acceptance of tardy work. Who cares if you’re going to deliver late, everyone’s still making money, right? This applies to pizza deliveries to magazine publishing dates to nail appointments to real estate handovers. In boom times, even bad business can make money.

Dubai’s reputation, in part, has been built on being the best place to do business for a thousand miles in any direction. Delivering on time is a big part of that boast.

It would be great to think those that deliver on time are remembered when the boom times flatten out.

Dubai – Property Right Law isn`t well-developed in UAE

original published The National

The booming UAE property market looks like a can’t-lose investment. Should you bite?

If you’ve seen the eye-popping figures for property prices in the UAE in recent years, and have salivated over the seemingly endless stream of mega-projects planned for Abu Dhabi and Dubai, you’ve probably thought about getting in on the action ­yourself.
And who could blame you?

Estimates for the market in 2008 project an overall price increase of between 10 and 20 per cent.

Tales abound of investors who have flipped properties for a much bigger profit, in some cases doubling their money within months.

And analysts expect demand for housing to outstrip supply for at least a few more years as construction delays continue and new housing projects slowly come on-line.
An excess of demand and a shortage of supply generally means prices go up.

That recipe has investors licking their chops, buying up flats and villas in hopes of cashing in quickly on the boom.

At Cityscape Abu Dhabi, a massive property showcase held recently, the excitement was palpable.

The thing that excites us is that the need is there,” one Austrian couple told me, looking over an enormous model of developments on Reem Island, where they had bought two properties.

The population is growing rapidly, so there is a real need for housing.

That may be so. Yet with the glitz and uniqueness of these projects, not to mention their unprecedented scale, it’s easy to get lost in all the hype.
It’s also tempting to accept the argument that you could easily double or triple your money in a couple of years.

But while buying may turn out to be a smart move, there’s also good reason not to follow the UAE’s property-mad herd.

The first is that the property market looks and acts like a bubble.

Prices have been surging at a clip of 20 per cent a year over the past five years.

At the same time, investors and speculators make up a large share of buyers, which calls into question whether there is enough fundamental demand to justify current prices. As growth in supply eats away at excess demand in the next five or 10 years, the speculators could flee the market, driving prices down ­signficantly.

Abu Dhabi’s Department of Planning and Economy recently warned of just such a boom-and-bust scenario, calling property speculation a “risky business” that “may result in a sharp drop in the value of new units.”

Buying property is an especially risky proposition for expatriates because property rights law isn’t well-developed in the UAE.

If you are arrested and deported after having been found at fault in, say, a traffic accident, there is a chance you could lose your property.

Property investment also involves tremendous political risk. The Government could decide unilaterally to change laws or steer development in a way that negatively affects the value of your investment.

It’s like buying penny stocks in China,” one financial advisor told me. “Go ahead and do it, but be prepared to lose every last cent.”

All this talk about housing is fun, but it ignores one condition under which none of it matters: if you plan to settle down permanently – or at least for the next five years.
That gives you enough time to build up equity to offset the costs of taking on a mortgage and absorb any market swings.

The bigger your down payment, the more insurance you have; 15 to 20 per cent of the purchase price is a solid start.

Of course, you want to be confident that the value of the flat you’re about to shell out millions of dirhams for isn’t going to lose all its value tomorrow.

If you’re just looking for a good place to live, however, most of the predictions are just noise.

Until recent years, nobody aside from a few specialists viewed residential property as an asset to invest in. Houses were places to live and mortgages were forced savings plans that built up equity in a physical asset over decades.

The real estate craze in the US changed all that, as single-family home prices nearly tripled between 1990 and the height of the boom in the summer of 2006, according to the leading US home price index.

It wasn’t until 2000 that the Yale economics professor Robert Shiller put it all into sobering context, showing in his book Irrational Exuberance – which predicted the end of the tech-stock bubble in the US – that home prices had risen at just above the pace of inflation for the prior 100 years. He showed that the US market looked like a bubble and was due for a reversion to its historical mean, but few people believed him until things went south.

Which goes to show that it’s not necessarily smart to think about the house you plan to live in as an investment.
Nobody knows which way the prices are going to go, and most of us need a roof over our heads more than a ticket to vast wealth.

If you can afford to speculate in the UAE’s property boom, do it by all means, but don’t expect to double your money.

One thing I kept hearing from investors at Cityscape recently was that the Abu Dhabi property boom was different, unprecedented, and a unique investment opportunity. It happened in the US stock market in the 1990s. It happened again in the 1990s and 2000s in the US property market. Every bubble is different, but bubbles do have at least one thing in common: they burst.

@Email:Have your own tale of property success or woe? Share it at afitch@thenational.ae

Good Business shouldn`t tolerate missed deadlines – Eighty per cent of Dubai construction projects will finish late – and no one cares.

original published EmirtesBusiness 24-7
May 25, 2008

It is telling that the ‘revelation’ only one in five construction projects is likely to finish on time does not come as a shock.

Shortages of materials and skilled workers (plus reams of red tape) are the official excuse, but the public has long since abandoned belief in deadlines being met.

As we’ve mentioned here before, as long as property prices continue to rise, investors are not too fazed by these delays. An investment that has doubled in value tends to soften the blow. But what damage does this do to Dubai’s reputation as a can-do business center?

There is a danger that missed deadlines breeds an acceptance of tardy work. Who cares if you’re going to deliver late, everyone’s still making money, right? This applies to pizza deliveries to magazine publishing dates to nail appointments to real estate handovers. In boom times, even bad business can make money.

Dubai’s reputation, in part, has been built on being the best place to do business for a thousand miles in any direction. Delivering on time is a big part of that boast.

It would be great to think those that deliver on time are remembered when the boom times flatten out.

Sorouh MD warns developers to deliver on promises

The managing director of Abu Dhabi’s largest publicly listed real estate company has rounded on rogue developers that risk undermining confidence in the city’s property market.Sorouh Real Estate’s Abubaker Al Khouri said that if customers’ expectations of quality are not met, it will have negative impacts on the market as a whole.”We are still in a relatively immature market, in the sense that many purchasers are yet to actually see what their money has bought. Most ‘homeowners’ in the UAE actually only own a promise. So what they are buying is actually the reputation of the firm,” said Al Khouri at this week’s Cityscape exhibition in Abu Dhabi.

“There are real estate companies in the UAE that have yet to deliver a single property,” he continued.”The ones that deliver high quality products will prosper; those that don’t will damage not only themselves, but the market as a whole.”Developers must deliver exactly what they have promised when they sell off-plan, says Al Khouri or confidence could evaporate. “Consumers need to trust the development, the developer and the overall market,” he said.He identified the need for high quality management as critical to ensure confidence remains high, and revealed that it is becoming harder and harder to hire the right people.”What makes a company qualified is professional management and resources, which is increasingly difficult to find at a high calibre, despite the generous packages offered, due to competition in the market and the global real estate boom,” he said.”There has been tremendous growth in the number of developers and that means tremendous growth in the number of professionals needed to make these businesses flourish.”But it is not just today we should be worrying about, it is the future too. That is why developers should invest in the very best calibre of professionals, at every level of the business, including strong investment in training and development of the next generation of managers.”

Luxury Jumeirah Beach project in Dubai disappoints

oroginal published: 7days
http://www.7days.ae/showstory.php?id=72954

A Dubai-based property watchdog has promised to look into complaints made by people living in Jumeirah Beach Residence (JBR), who are furious that some of the facilities they were promised will not be built as advertised.
The residents told 7DAYS they had been assured of seven gyms, a large beach park and four exclusive beach clubs.

But now they have been left reeling after it was revealed Dubai Properties, the developer of JBR, has amended its original proposals. One fuming homeowner, Briton Nicholas Rogers, described the situation as “a scandal”. “

The residents are up in arms because many of the promises Dubai Properties gave us when we bought the place are being broken and scrapped,” said Rogers, 29.

“We were promised four or five beach clubs for residents only but it turns out they will be for the paying public as well as us – and we would have to pay membership.

“We were promised a beach park between the Hilton and Sheraton hotels with pools and grassed areas but now they’ve just levelled it and half will be a public car park.

It was stated we would have seven gyms between the 36 towers but now they’ve confirmed we will have just two gyms for the 30,000 residents.”Rogers said the original proposals, such as the seven gyms, were listed in the ‘handover pack’.

When he asked about the changes of facility in the new proposals, he says he was simply told the “plans had changed”.

Another resident, Hamid Hamri, added: “I’m upset with the changes to the plan as there was no communication.“There has been no consultation nor compensation.”

A spokeswoman for Dubai Properties said: “There will be four beach clubs managed by a certain company – it will be for members only. The beach park will be restricted to JBR residents.
It will not be half the size – in fact the car park will take up 18 per cent of that area with 500 spaces. There will now be two gyms and this has changed because of the retail area which is getting bigger. It is being used for shopping facilities and common facilities on the mezzanine level.

”Marwan bin Ghalita, CEO of Dubai’s Real Estate Regulatory Authority, has offered to look into the situation and believes Dubai Properties may have acted illegally.
“If they are changing things without putting it in the contract – that is illegal,” he told 7DAYS.
“They [Dubai Properties] cannot show people things and then change their minds. They should be committed to what they are saying. We have been approached by these residents and we will see how we can assist them.

”On Monday, JBR residents held a meeting to decide on a plan of action. It was agreed they would form a residents’ association and hold further meetings on a regular basis.

paul.mclennan@7days.ae
_________________
more about JBR Dubai

original published:
MalysiaSun http://www.dubaicity.com/news/Luxury-Jumeirah-Beach-project-in-Dubai-disappoints-2-05-08.htm

Long after owners and tenants have moved in to the much-acclaimed Jumeirah Beach Residence apartments in Dubai, work is yet to commence on the project’s recreational facilities.

Touted as a luxury development, JBR has disappointed owners with serial delays, a scrambled handover process, poor finishes to the exterior of the buildings, and the non-completion of recreational and retail facilities.

The forty tower, 7,000 apartments on the 1.7 kilometre long, 2.2 million square metres of beachfront, adjacent to Dubai Marina, was handed over to owners over several months commencing early last year, approximately 18 months behind schedule.

The project was launched in August 2002.

Despite owners being handed possession of their properties, the several beach clubs, which are to house recreational facilities, including gymnasiums, swimming pools, spas, sports centres, and beach access pathways, have not been completed. I

n fact construction on them has yet to commence.
A previously built building which was to house a beach club has been occupied by the JBR sales centre.
It was recently vacated for refurbishment, but the occupants have been moved to on-site portocabins, suggesting the sales staff will move back into the building when the refurbishment is completed.

Compounding the lifestyle of the project’s newly-arrived 25,000 residents is the continual delay in completion of The Walk, a cavalcade of restaurants, cafes, retail shops, and supermarkets, that are being developed around the perimeter of the property. Very few of the outlets are operational, despite

The Walk’s scheduled delayed opening having been promised for late 2007.

Added to that, four of JBR’s forty towers, which will house 5 star international hotels, are still under construction.

The developer of JBR, Dubai Properties, has a real estate portfolio valued at 350 billion dirhams ($95.6 billion), and according to CEO Mohammad Bin Braik, this will double in the next few years.
‘What is important to us is that we are creating value for Dubai, not just building towers and projects,’ he said this week.
On JBR he said, ‘It is one of the largest single complexes with so many apartments. From day one it was not an easy task.
However, we have still managed to deliver, with a slight delay due to factors that were not in our hand.

Owners of Jumeirah Beach residence apartments have received no advice, newsletters, or any communication as to the status of the project’s recreational facilities, or The Walk, since they handed over the final instalment of their purchase price, when taking possession of their apartments last year.

German Dubai Property Investment Disaster

German Version original published manager-magazin.de

A Financial Fraud ? – Who or What is LOSNA ?

A dream hotel in Dubai and high returns for investors – what a fund initiator from Germany once promised seems now to be a financial fraud.

The Initiator of this fraud could be an unknown investor from a caribean off shore company named “LOSNA”

It is a closed-end real estate fund, which funds promised develop the largest four-star hotel in the Arab world ,operated by the Maritime Group.

The fund initiator of the Dubai 1000 Investment Fund,Mr. Recker from Germany Hamm in Westphalia, promised investors a profit 9 to 12 percent per year .

Above all, however, it exist a mysterious Off-shore company in the Caribbean,called LOSNA, which paid suspect 107 million euros – money, but so far it seems hardly anyone of this company got to face.

Months before Manager-Magazin.de ( Germany) reported that in the Dubai Desert may be a new investor disaster .

The object of the Hotel Fund “Dubai 1000″, a luxury hotel, equipped with 1,000 rooms and 50 suites would have already opened in July 2007.

In fact, but on the alleged plot to that date only a huge construction pit, surrounded by several hundred-meter-long fence.

Even if under high pressure would continue, experts had estimated, was an opening of the Nobel hostel sooner than two years later to be expected.

What little remained even then, nor now appears unlikely.

And that is not only that the construction since the autumn of 2007 barely discernible progress has been made.

The investigation now is about suspect money laundering , suspect advertisement from a bank,” said the German Public procecuter Ina Holznagel. “The suspect in the specific case has now disbanded.” According Holznagel the investigation now is whether the money of investors generally in accordance with its purpose is used, whether in Dubai actually a hotel is built. Investment volume of the “Dubai 1000 Fund” is around 145 MillionEURO.

At least half of the invest hold the initiatior Recker as equity investors in place

According to manager-magazin.de only 1000 investors hold shares in volume of around 24.8million euro.

read more:

http://www.manager-magazin.de/geld/geldanlage/0,2828,547468,00.html

http://www.manager-magazin.de/geld/geldanlage/0,2828,547468-2,00.html

http://www.manager-magazin.de/geld/geldanlage/0,2828,547468-3,00.html

GulfNews-German fund faces probe into Dubai hotel

original published GulfNews:
http://archive.gulfnews.com/articles/08/04/12/10204959.html

German real estate fund ‘Dubai-1000-Hotel-Fonds’ may cause severe losses to investors, according to lawyer Jens-Peter Gieschen of German solicitor’s office KWAG, which specialises in capital law and investor protection.

The fund was started in 2005 on the German grey capital market to finance a 1,000-room luxury hotel project in Dubai. The project, which should have been completed in July 2007, hangs in the balance.

The fund was scheduled to collect some 142 million euros from investors. Initiated by German investment broker Georg Recker, the fund promised annual returns between nine and 12 per cent.

“The yield prognosis of the fund has been entirely unrealistic,” Gieschen said. He visited the construction site of the luxury hotel in February and found nothing but a fence surrounding an excavation.

The site did not have a plot number or signs of contract companies, which is mandatory for building projects in Dubai, he said.

Public prosecutor Ina Holznagel from Dortmund, Germany, has ordered a probe as the fund is presumably still collecting money from investors.
Twelve investors have now launched an official complaint against Recker and his investment company Dubai 1000 Verwaltung.

German magazine Cash Online reported Recker as saying that the fund has been closed after collecting the targeted 142 million euros from investors, and the hotel project is developing according to plan.

Damac Haz Tower scandal – Business Bay Dubai

investors are losing confidence in the Land Department ….. ……..as they have now had the complaint for over six months

original published GulfNews May 16, 2008, 00:38 By Suzanne FentonS, taff Reporter Published: May 16, 2008, 00:38

Dubai: Confusion over the Haz Tower project in Business Bay may be nearing an end as both Damac and Hilal Al Zarooni will have to sign an agreement by next week, according to Land Department officials. Emad Eldin Farouq, legal counsel for Dubai Land department, said, “There is a settlement agreement that both parties have to sign. They have no choice.” The signing has so far been delayed due to a possible second option. The Haz towers project was launched July 8, 2007, after Damac bought it from Dubai Properties before selling it on to Hilal Al Zarooni. The cause for the delay is unclear but Eldin Farouq says it is due to the reservation agreement. “Damac blames Zarooni for breaking the reservation agreement. Zarooni was meant to sell the building after approval.” <!– document.write(”); //–> However, Damac had received no authority for the floor plans or marketing of Haz Tower, according to official documents received by Gulf News. “Damac didn’t have approval from Zoning Authority for the floor plan and elevations for Plot BB.B.01.040 [Haz tower plot]. “Damac has not taken any approval for marketing any tower on the above plot. Damac, owner of plot BB.B.01.040, has not got any approval to start selling the tower or units in the plot which need bank guarantee first to be provided to Dubai Properties.” Last week, a Damac employee said that the Haz towers project is “on hold, according to a statement by the chairman”. However, Niall McLoughlin, senior vice-president of corporate communications at Damac, denied this. “Haz towers is going ahead. It would be inappropriate for me to further comment on Haz towers. As you know, it is sub-judice,” McLoughlin said in an email to Gulf News. Another Damac employee said any queries should be directed to Hilal Al Zarooni. Investors are becoming increasingly frustrated as there appears to be no reason why the project shouldn’t go ahead. Hilal Al Zarooni told Gulf News, “We’re waiting for the Land department to give their answer. They said it would be next week.” However, investors are losing confidence in the Land Department as they have now had the complaint for over six months. Eldin Farouq said yesterday that “the chapter will be closed next week.”

Dubai property market beset by fraud claims

Malaysia Sun

Claims of scams, fraud, and embezzlement are hitting the real estate market in Dubai.

The multi-billion dollar construction craze which has attracted investors from all over the world, has seemingly brought in unsavoury types who have been preying on the never-ending appetites of locals and foreigners lining up to invest in the market.A UK company which claimed to have acquired a 900-apartment plot in the proposed Jumeriah Village project, has reportedly sold off apartments in the plot, with no prospect of them ever being built.
The company, Strategic Property Investment, and its associates, William Cowe and Mark Emlick, are being investigated by Dubai and UK authorities.

Dubai authorities are also investigating the mysterious Al Areifi Tower being constructed at Dubai Marina. As we reported several weeks ago, Khalid Saud Al-Areifi & Partner Co., of Riyadh Saudi Arabia, sold several hundred apartments in the project off-the-plan some years ago, taking full payment upfront.In recent weeks the owners of the apartments have been receiving telephone calls and faxes from Al Areifi representatives in Saudi Arabia advising them construction on the project had stopped and would not be resumed.

Investors say they have been offered their original cost, plus interest, back. We have sighted one of the letters sent which verifies the investors’ claims.When we visited the site two weeks ago we found construction in full swing. We contacted the builder on site who confirmed there had been no disruption to the construction and it was proceeding at ‘full steam.’Reports are now circulating that Al Areifi sold the site to the newly-formed, Abu Dhabi-based, Eskan Properties.

A report in Gulf News , however quotes a company spokesman as saying, ‘We sold the tower on again a week back.’
Having bought their apartments and paid for them in full, well before construction started, investors are now wondering how ‘their’ apartments could be on-sold, on two separate occasions since.

Several calls to Emaar Properties, the master developer of Dubai Marina, where the project is sited, have not been returned.

Meantime the investigation into the conduct of the former CEO of Dubai’s second largest property developer, Deyaar, has been widened.
According to Dubai’s Attorney General, Essam al-Humaidan, a second person, Ganesan Krishna Kumar, 49, has been arrested in connection with the investigation. Kumar, originally from India, was a co-founder, and is managing director, of the Dubai-based advertizing agency, Masterbrand (ME) Ltd.,Two other men have also been detained and questioned, but have since been released. Zack Shahin, Deyaar’s ex-CEO is being probed in relation to claims of possible embezzlement. Deyaar has more than 1,600 apartments, as well as retail, and office complexes, under construction in Dubai.

The glitz and glamour of Dubai’s red-hot property market must be feeling the heat of the latest troubles, coming on top of the debacle surrounding the Damac project on the Palm Jebel Ali.
Damac, which claims to be the largest private property developer in the Middle East, sold apartments off-the-plan in what it called the Palm Springs project, a luxury apartments and resort project on the Palm at Jebel Ali.

Four years after launching the project, Damac wrote to investors saying it had been abandoned as the master developer of the Palm had changed the plans and the project could not now fit the site.Within days the master developer, Nakheel, announced it was unaware of Damac’s claims, and that the changes which Damac referred to had been made ten months earlier, and Damac was happy with them.

A hastily convened meeting by the authorities, involving Damac and Nakheel, resolved the matter, with Damac agreeing to proceed with the project. That action averted a class-action lawsuit against Damac by at least sixty angry investors, most of whom were from the UK

Comments

Comments on this story

By adel, 04-26-08, 02:31 AM
An advice on Duabai real estate marketI want to give a little advice to prospective investors in Dubai. Ignore those fantastic property offerings, with incredibly low prices and very long-term and low-cost finance. Believe me guys, the price of cunstruction material and labour, rents, oil…etc have made such projects unviable. Such projects are not economically viable anymore and the little investor will, at the end, lose his or her investment. Watch out !

By Anonymous, 04-24-08, 10:03 PM

Dubai property market beset by fraud claimsI have an apartment in this project which I bought off the plan and paid for in full. As far as I am concerned I am the owner and here I read my apartment has been sold to somebody else, twice! What is going on here? And what about the mighty Emaar. They are overall responsible. Surely they can’t sell these plots off to fraudsters like this and not even answer the phone???? Investors like me just sit out here and get these scraps of information from the news media (thanks! I’m not having a go at you, without you I wouldn’t even know I was being pick-pocketed). Where are the authorities? They shouldn’t just be investigating Deyaar they should be investigating Al Areifi.

By Anonymous, 04-25-08, 05:07 PM

Dubai should act against scamsWhere there is a lot of money the smarties arrive to scam the punters. This al areifi crowd have really done a number on people. The Dubai government shouldn’t stand back and let them get away with it. Selling all the apartments to individuals and then selling the whole building to somebody else is just straight forward theft and fraud. The Saudi Arabian authorities should act as well because this is a Saudi company. What confidence can people have in these gulf markets when this sort of nonsense goes on?

By Anonymous, 04-25-08, 08:09 PM

Few bad apples doesn’t mean you throw out the whole caseYes there are scams and frauds in Dubai, just as there are everywhere. Mostly though I think investment in theis place is safe. The government needs to stamp out the bad guys because it affects how people perceive the market.

By Anonymous, 04-28-08, 01:50 PM

These thugs have to be stopped. Whilst these guys are living the lavish lifestyle, we are repaying our loans to pay for them to do so. I am still pursuing these people and find it a huge disappointment that UAE have no laws against this or protection for people who invest from abroad. It was particualrly enlightening that these guys are residing at one of the sheikhs hotels.. Does that mean he thinks all of this is ok?????

RERA :1560 Dubai Projects – 476 of them have trust account

Developers deposit Dh4b in escrow accountsBy a staff reporter 6 May 2008
DUBAI — A total of Dh4 billion has been deposited by developers in escrow accounts with 33 banks approved by the Dubai Real Estate Regulatory Agency (RERA), said Marwan bin Ghulaita, the agency’s CEO.

Speaking at the regular monthly meeting of the Dubai Property Group (DPG), Bin Ghulaita announced that the number of projects registered with RERA amounted to 1,560 projects, 476 of them have trust account.

He noted that by the end of April, RERA had registered 710 developers, 1,487 brokers’ offices and 2,909 agents.

RERA and Dubai Land Department representatives presented the latest procedures and regulations for registering and transferring freehold properties in Dubai to over 300 DPG members. In addition to Bin Ghulaita, Mohammed Sultan Al Thani, Assistant Director General of the Dubai Land Department and Khalifa Al Suwaidi, IT Director at the Dubai Land Department were present.

Al Thani announced that electronic forms for real estate agents are ready and can be easily accessed through the Department’s Web site, noting that by November 1, the Land Department will not clear any property transactions without these new official forms which are only accessible to RERA accredited real estate agents.

He added that the Land Department will be introducing two registration systems: one for completed property (the register) and the other for ‘off plan’ sales (the pre-register) in the coming two weeks.

RERA Dubai – Four Dubai Developers under investigation

Four Dubai development companies are being subjected to an “internal audit of transactions”, Marwan bin Ghalita, the CEO of Real Estate Regulatory Agency (Rera) told a Dubai Property Group meeting on Sunday.

“We cannot let people promise and not deliver in Dubai,” he said.

“We want a transparent relationship between parties and have rules and regulations that will be strictly implemented.”

He declined to name the four Dubai developers under investigation.

Last month Damac Properties was involved in a controversy over an attempt to cancel its project Palm Springs on The Palm, Jebel Ali, which has since been reinstated.

Rera has a tough job regulating Dubai realty since its creation last July. Now 2,909 real estate agencies are registered and an estimated 4,000 more illegals in the marketplace have until the end of July to register or face fines.

“From November 1 only licenced agents can advertise property by law,” said Bin Ghalita. “We will not tolerate freelance agents.”

Rera has also licensed 710 development companies, 1,560 projects and 1,487 brokers since its formation, and opened 476 trust accounts worth more than $1.2 billion (Dh4.4bn) with 33 registered banks. “We also want to correct some misleading claims made by developers,” said Bin Ghalita.

“If developers say they sold out in half an hour, how is that possible? If this is advertised they must show data, and not keep us waiting for a month for it.”

In addition, Bin Ghalita said there must be no payment of percentage transfer fees to developers, who are only entitled to claim administration fees for handling such transactions. “Why should developers benefit like this?

It is not their business, we do the transfers.

“He said buyers and sellers should “refuse to pay extra transfer fees”. Bin Ghalita said the proper registration fee is a total of two per cent: one per cent for the buyer and one per cent for the seller.

“Nobody has the right to charge anything else, and please tell me if they do,” he added.

Dubai Property Scandal No. ? – Bonnington Tower

This project has been cancelled and bonnigton has returned the money back with 5% intrest on the paid amount.

Reason land dispute

__________________________________________

Apr 25, 2008Gulf NewsDubai:

Property investors in Dubai should be on their guard as two allegedly “unscrupulous property” agents are operating in the emirate, reportedly conning hundreds of thousands of dirhams out of investors both in the UAE and abroad.William Cowe and Mark Emlick are being sought in Dubai and in the UK by furious investors who claim the two men have absconded with their money.Out of three plots in Bonnington Residence in Jumeirah Village South, Strategic Property Investment (SPI) group bought two comprising about 900 apartments.

SPI has its headquarters in Scotland. Emlick is the chairman.Emlick and Cowe allegedly took a 10 per cent deposit on each of the 900 apartments, averaging about Dh579,482 to Dh651,922
per apartment.The men are based in Suite 4211 of the Grosvenor House Hotel in Dubai Marina.

Speaking to Gulf News, Emlick denied all knowledge. “What money? What plots? If someone has a problem, why don’t they call us? We’ve had no calls.”A source told Gulf News that the men’s escrow account application was recently turned down.
The brokerage firm also has not been registered with the Real Estate Regulatory Agency (Rera), Dubai’s property regulator.

There are at least 11 angry investors wanting to track down Cowe and Emlick, saying they have found it impossible to do so.Cowe told Gulf News he was in police custody in Sharjah last week and his passport remains with the Dubai court.

A spokesperson for Bonnington in Dubai said, “We know him [William Cowe] but he’s not associated with us. He’s nothing to do with Bonnington whatsoever.” Mystery also surrounds Carl Addisson – another property broker – who reportedly sold about 50 apartments belonging to Bonnington Residence to a Spanish company.

According to an insider, there is over Dh7 million in proceeds with more than Dh700,000 going to SPI in commission. The connection between Addisson and Emlick and Cowe is not clear.

Addisson is currently in Barcelona “on business” and told Gulf News he ‘wasn’t interested” in speaking.

letters2editor@gulfnews.com
© Gulf News 2008. All rights reserved.

Damac Palm Springs Investors still await for the Detail

original published
http://damaconcovered.wordpress.com/

April, 24. 2007

Damac have finally sent written confirmation of the re-instatement of Palm Springs to investors.

Whilst the Palm Springs Group is pleased with this development, the communication merely rubber stamps what has already been issued to the press.

The main concern now for investors is that Damac confirm in writing details of the project, such as the plan specification, build quality, start and handover dates, and whether it is in keeping with the original contract.

One investor commented, “we will be writing to Nakheel and Damac requesting them to disclose the new plot handover date and details of any planned changes as a matter of urgency” She went on to say that the Group intend to monitor developments to ensure that any changes are compliant with the contract provisions. It is possible that investors may request a meeting with Damac to get clarification of the details and to iron out any concerns.

Barring any nasty surprises contained in the ‘detail’ of the re-location of Palm Springs, it would seem that both investors and Damac will soon be able put their differences behind them and look forward to the dream that was, and hopefully is, Palm Springs.

Let’s hope Nakheels’s and RERA’s role in helping to resolve the crisis serves to strengthen the reputation of Dubai real estate.