Dubai property prices may drop as much as 30 percent more

original source Bloomberg

Nov. 18 (Bloomberg) — Dubai home prices may take at least a decade to recover and increasing supply and a shrinking population will leave 25 percent of the sheikdom’s houses empty next year, according to UBS.

Prices may drop as much as 30 percent more, UBS analyst Saud Masud said in a note today. They have already fallen by more than 50 percent from the peak last year, making Dubai the worst-hit market in the global real estate slump.

Dubai’s construction boom petered out in the third quarter of last year after banks tightened lending and speculators left the market. UBS’s research contrasts with a Deutsche Bank report this month that said the market is “bottoming out” with slowing price declines and an increase in transactions. Masud said the market will probably reach its bottom in 2011.

Consolidation in the industry will result in asset writedowns, limiting the benefits of a possible merger of Emaar Properties LLC and three state-owned companies, UBS said. Emaar, the United Arab Emirates biggest real-estate developer, is in talks to join with state-controlled competitors Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC.

Dubai’s population, which is 90 percent expatriate, may drop by 8 percent this year and another 2 percent in 2010, Masud said. Nearly half the workforce is employed in real estate or construction.

Banks in the United Arab Emirates have understated their non-performing loans and the total may grow to around five times the 27.8 billion dirhams ($7.57 billion) reported by the central bank in September, the Dubai-based analyst wrote.

Bank lending tied to real estate may be 35 to 40 percent of the total when including personal loans used for property investment. Central bank regulations cap real estate lending at 20 percent of a bank’s total. The loans could be 350 billion dirhams to 400 billion dirhams, almost double the stated 204 billion dirhams, UBS said.

Provisions for bad loans may grow to more than five times their current levels over the next 12 to 18 months, Masud wrote. Net provisions stood at 29 billion dirhams by the end of October, central bank data shows.

“We expect to see greater consolidation, higher provisions for non-performing loans, an increase in investor delinquencies and relatively lower end user demand for residential and commercial property,” Masud wrote.

Banks will face pressure to provide liquidity and late payments will probably present a continuing risk for contractors and subcontractors, he said.

To contact the reporter on this story: Zainab Fattah in Dubai on zfattah@bloomberg.net

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

Absoulte unhappy Nakheel Propery Buyers – Dubai Jebel Ali Palm complaints investigated

original source The National

The Dubai Land Department (DLD) will investigate complaints over the stalled Nakheel Palm Jebel Ali project after about 125 disgruntled property buyers petitioned the authority.

Nakheel has offered investors alternative homes in other projects that are either completed or already under construction, including at International City, Jumeirah Heights and Al Furjan.

“After patiently waiting for seven years and putting all of our hard-earned money into this project, we are being given the option to transfer to inferior properties which are not in the same league as those promised to us,” the investors said in a letter to the DLD. “This is not what was sold to us.” An official said the department would compile a report on the situation.

Palm Jebel Ali, the second part of the Palm island trilogy, was launched by Nakheel in 2003 and was designed to accommodate up to 250,000 people and add 70km of beachfront to Dubai. Work came to a standstill on the vast artificial island development after property prices started to tumble last year.
read the rest of the Report The National

Japanese construction companies are facing very serious debt problems as Dubai can’t pay

original source The National

Japanese builders are owed billions of dollars on projects that include the Dubai Metro and Palm Island, according to a top diplomat and leading contractors from the country,
Japanese builders have played a pivotal role in Dubai’s construction boom, spearheading work on the Dh28 billion (US$7.6bn) Metro and helping to build Nakheel’s palm-shaped islands off the emirate’s coast.

But as the global financial crisis brought many projects to a standstill, an increasing number of foreign companies, especially builders, have reported payment problems mainly linked to Dubai developers.

“Some Japanese construction companies are facing very serious debt problems as Dubai can’t pay,” said Seiichi Otsuka, the Japanese consul general in Dubai. “Some companies engaged with the construction of the Metro are facing some payment issues.” He said companies were also owed money by Nakheel.
read the rest of this article…The National

Dubai – More than a half million bounced cheques between January and May 2009

Bounced cheques are regarded legally as fraud, a criminal offence punishable by jail in Dubai and the UAE.

With more than a half-million cheques bounced between January and May of this year alone, the cases have been putting an increasing strain on the legal system.

But now the hard walls of debtors’ prison are beginning to crack.

No longer will home buyers in Dubai who cancel postdated cheques because of a developer’s missed deadlines or broken promises automatically face jail.

Instead of being investigated by police or prosecuted, delinquent tenants and homeowners will be referred to a new judicial committee that will make a binding judgment on whether they should be held to payment. It will also deal with developers who run into financial difficulties and cannot pay their investors.
read the full aricle in The National original source

Shareholders’ equity of the top 150 Arab banks is just 170 billion dollars – Gulf Banks cannot finance huge projects alone

source Zawya

Nov 02, 2009 (AFP) – Gulf and Arab banks are unable to finance huge projects in the oil-rich Gulf region and fill a credit gap created by the withdrawal of foreign banks amid the global financial crisis, bankers said on Monday.

“The total shareholders’ equity of the top 150 Arab banks is just 170 billion dollars,” Shaikha al-Bahar, deputy chief executive of National Bank of Kuwait, told the Kuwait Financial Forum.

“These banks are not capable of financing huge projects. We have limitations,” said Bahar, adding that the cost of projects in Gulf states over the next several years is estimated at more than 2.1 trillion dollars.

The global financial crisis has resulted in a major credit squeeze, forcing many countries in the region to cancel or postpone hundreds of projects for a lack of finance that was mainly provided by international banks.

The cost of lending also became expensive, thus raising the cost of projects.

Jean-Christophe Durand, BNP Paribas managing director in the Gulf, said good projects will still be able to attract capital at the right price.

“(But) we still need international banks,” for financing of major projects in the Gulf, he said.

Abdulaziz al-Ghurair, chief executive of Mashreq Bank in the United Arab Emirates, said Gulf banks can fill part of the credit gap with some help.

“Gulf banks can fill the (credit) gap created by foreign banks… provided risk is distributed at all Gulf states and with help from other sources,” he said.

Speakers said cash-abundant Gulf governments are required to play a key role in financing mega projects, while others said local investment companies should also contribute.

Banks in the Gulf have been strongly affected by the credit crunch and many were exposed to bad debt, resulting mainly from a slide in the value of assets and problems at investment firms and family companies.

All central banks in the region have asked banks to allocate provisions against bad loans, a process that impacted profits of Gulf lenders.

Former Kuwaiti finance minister Mahmud al-Nuri said he believes Gulf banks will not be able to face the post-crisis conditions without key mergers.

“I believe that over the next five years, there should be three to four regional bank mergers. This is very necessary,” he said.

Ghurair said there has been no strategic plan for bank mergers in Arab countries and the few mergers that took place were among distressed banks. “I hope there will be some strategic mergers in the next decade.”

Dubai Good News – Dubai property dispute victims to get free legal advice – Let`s Hope that this is not again only a promise

source Arabian Business

Dubai Land Department on Monday announced a new initiative to introduce a free legal service to support home owners involved in real estate-related court cases.

The announcement follows a meeting between senior Land Department officials and representatives of law firms to finalise details of the move.

The Land Department said an agreement had been signed which would see the law firms become part of a new Legal Care Group.

The group will bring together senior lawyers, professional firms and consultants to offer free legal assistance to members of the public with “genuine real estate issues” who might otherwise be dissuaded from taking action because of the prohibitive cost of fees, the Land Department said in a statement.

Mohammed Sultan Thani, assistant director general of the Dubai Land Department, said: “The objective of this initiative is not merely to meet a need but to ensure fairness and justice is available to anyone who might have a concern which involves property, no matter their circumstances.

“This reflects the government’s commitment to ensuring there is in place a comprehensive equitable system of legalizing ownership and property transactions.”

He added: “Now, no one is prevented from pursuing their rights merely because of the possibility they might be priced out of the legal system.”

Richard Green, head of research at CB Richard Ellis Middle East, said: “The offer of free legal advice is another step in the right direction. Overall confidence in the legal dispute system has been somewhat low due to a time lag in addressing the current case backlog.

“This announcement will go some way to renewing faith in the system as well as providing confidence to individual investors facing financial difficulties in their disputes against developers.

“Overall this is seen as another positive advancement for the Dubai market.”

In August it was reported that property dispute cases that were originally submitted to the Real Estate Regulatory Agency (Rera) and Dubai Courts are now being dealt with by Dubai’s new Property Court.

The new court, which started operations in October, was set up under the First Instance Court to deal exclusively with property-related cases.

Dubai Properties Chairman arrested on suspection of embezzlement

source Bloomberg October 30 2009

Oct. 30 (Bloomberg) — Hashim Al Dabal, chairman of Dubai Properties LLC has been arrested on suspicion of embezzlement at the state-owned company that’s in merger talks with Emaar Properties PJSC, the emirate’s attorney general said.

“Mr. Al Dabal is accused of abusing his position and earning millions in illegal profit,” Attorney General Essam Essa al-Humaidan said in a phone interview today. “We are questioning him almost daily and Mr. Al Dabal indicated he is ready to answer questions without having a lawyer present.”

more….

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.

Critical test of Dubai’s credit worthiness – Dubai `s 80 Billion Dollar debt pile

original source online WallStreetJournal by Maria Abi-Habib and Stefania Bianchi

Dubai will crank up efforts this week to tackle its $80 billion debt pile with senior officials heading to Asia to meet potential investors amid reports that one of its most indebted companies has repaid a $1.2 billion bond ahead of schedule.

Top officials from Dubai’s Department of Finance will meet fixed income and Islamic investors in Hong Kong, Singapore, London, Dubai and Frankfurt starting Thursday ahead of possibly selling more debt this year, according an invitation sent to bankers and seen by Zawya Dow Jones Monday.

An external spokesman for the department said the roadshows are part of “ongoing investor communication” but bankers suspect the meetings could be an early sign that Dubai may be preparing to issue the second half of its $20 billion bond program launched in February to support its economy and embattled companies.

“This will be the first time investors hear the Dubai story from officials post-crisis,” Abdul Kadir Hussain, chief executive of Mashreq Capital told Zawya Dow Jones. “How this story is received will determine how successful Dubai will be over the next three to five years.”

At the height of the global financial crisis, the Abu Dhabi-based central bank of the United Arab Emirates supported Dubai by underwriting the first half of its planned $20 billion bond program to bail out the sheikdom’s struggling companies and economy.

Recently, Dubai officials including Omar bin Sulaiman, the head of the Dubai International Financial Center, have said they expect strong interest from private investors for the eagerly awaited second $10 billion bond.

Mohamed Alabbar, who helps oversee a committee evaluating the impact of the global credit crisis on Dubai, told CNN earlier this month that the emirate may raise the additional $10 billion by November.

The investor meetings due to start in Hong Kong on Oct. 22 are the latest sign that Dubai and its government-owned companies are trying to dig themselves out of an estimated $80 billion debt pile, most of which was incurred during the emirate’s property, tourism and logistics boom.

According to Standard & Poors, Dubai has almost $5 billion worth of debt maturing between September and the end of the year. The biggest share of this debt is held by Nakheel, a unit of government-owned Dubai World. The company has a $3.5 billion Islamic bond maturing December. The bond, which will be pumped into Dubai’s Financial Support Fund, is seen as a critical test of Dubai’s credit worthiness.

“The Financial Support Fund is in need of further resources to fulfill its mandate of supporting Dubai’s government related entities, many of which face heavy debt repayments in the coming three years,” said Farouk Soussa, head of Middle East government ratings at S&P.

PAYING DEBTS

A report Monday in Middle East Economic Digest said Nakheel had repaid a 4.4 billion U.A.E. dirham ($1.2 billion) securitized bond issued in January, one month ahead of the scheduled repayment deadline of Nov. 15.
The repayment made on Oct. 15 will come as a comfort to many investors in Nakheel, and especially those concerned about Nakheel’s December sukuk. A Nakheel spokesperson declined to comment when contacted by Zawya Dow Jones Monday.
Nakheel’s bond repayment came on the same day that government-owned conglomerate Dubai World announced that it completed a major restructuring.

The move will help the firm save $800 million over the next three years and ease a small part of the near $60 billion of liabilities on its books. The term liability refers to a company’s legal debts or obligations arising from its business operations.

Earlier this month, Dubai Holding, a conglomerate controlled by the emirate’s ruler, paid back in full a $300 million loan belonging to its Sama property unit. There are also signs that Dubai is repaying some of its outstanding bills to construction contractors.

On Monday, U.K. Trade Minister Mervyn Davies said that debts owed to British contractors in Dubai have reduced, but payments remain outstanding.

“I think it has improved, but it’s been a sensitive issue, and it is important that Dubai companies pay their debts,” he said.

The U.K.-based Association for Consultancy and Engineering, which represents about 800 British construction firms, said in May it was tracking approximately GBP400 million in unpaid fees for building in the emirate.

(Natasha Brereton in London contributed to this story.)

Dubai Property Market – Flippers, skippers, runners, survivors battle it out

source PropertyWeekly

‘Flipping’, ‘skipping’ and ‘running’ are relatively new terms in the argot of Dubai’s property market. Many would know about at least one person who has done one of the three ‘disrespectful’ things, and may even be aware of several more via the city’s thriving rumour mill.

The residents who remain also have a new nomenclature for themselves — the ‘survivors’.

New players experiment with speculation

Flipping was hitherto the activity of buying and selling property instantly, and solely for instant profit. Despite the impression that this dangerous game is a thing of yore and was once the exclusive prerogative of high risk takers, it is not, and has attracted new players.

Flipping was once restricted to incomplete properties, but they are now doing it with credit notes. Also, flippers are not necessarily risk takers; some are trying to recover investments gone awry, while others are desperate for much needed cash.

Offloading multiple units

AR is a classic flipper. In December 2007, he owned three apartments — on paper — at various buildings in Dubai Marina. By September 2008, he had sold two for a cumulative profit of Dh1.23 million, despite the fact that both were not ready for occupation.

“I am lucky that I disposed them of before it was time to start paying my mortgages and before the economic downturn,” he says. “If things get bad, I will move into the one I still own, so no money lost. But, many other people who acted impulsively have done badly. I know some really sad stories and consider myself blessed.”

However, despite his narrow escape from steep losses, AR cannot shed his innate instincts. When questioned, he admits that he has purchased a credit note for 60 per cent of its face value, and is looking for a buyer who will take it off him for a profit.

Skippers caved in

Skippers are other risk takers like AR, but who didn’t have the sense, instincts, or gumption to offload their properties when the market soured. When they could not find buyers and saw alarming drops in prices, they caved.

Faced with the prospect of bounced cheques, rising debts and the threat of unemployment, some of these foolhardy investors just upped and left, or skipped.

Skippers are not available for quotes, but TQ who left the country in the first week of February is believed to have invested in no less than six properties across the country. A feat made possible by two facts: he was the creative director of an advertising agency and had a substantial salary, and he dealt with an Islamic bank that allows customers to have multiple mortgages.

Coincidentally, the day he lost his job is also the day he realised that the next set of payments towards his property portfolio totalled Dh246,000, and also, that there were no prospects of serious buyers on the anvil, for any of them.

Forfeiting down payments

His simple solution was to forfeit the nominal down payments he had made on the said properties, and to head back to his native country to sit out the storm. In his case, he paid off his credit cards, cleared his lesser debts, and told his bank that he was giving up his claim on the many apartments he owned.

Trail of debts

Runners, on the other hand, don’t bother doing any of the latter or the formalities associated with relocating from the country. One minute they are in Dubai, revelling in their enviable status as the owners of several properties, and the next minute, they are simply missing from the country, with only the trail of debts proving they lived here. They could now be anywhere.

Finally, those who have heard the horror stories and heaved heavy sighs say they too need a moniker for not falling into any of the above categories.

Ordinary residents who continue to pay rent on their homes, have strongly resisted the urge to invest in property. Those who actually live in the properties they purchased say they are just holding tight.

BJ owns a modest studio flat at The Greens and his brother MJ rents a one-bedroom apartment at Dubai Marina, and by their own admission, they worry about the appalling state of the world, just as much as they are alarmed about their own job security… or the possible lack of it.

According to MJ, their mission is to put away and save as much money as they can every month just so that they are not taken unawares by any unpleasant surprises — be it falling prices, increased rents, unexpected payments or unplanned debts.

“All those people we hear about have titles that classify them into categories. We believe that the rest of us who live in Dubai and eke out an everyday existence without running, skipping or flipping need one too. Just call us the ‘survivors’,” say the brothers.

And they are not being sardonic.

Flippers now deal in credit notes

• Despite the impression that flipping is a thing of yore and was once the exclusive prerogative of high risk takers, it has attracted new players
• Flipping was once restricted to incomplete properties, but they are now doing it with credit notes
• Also, flippers are not necessarily risk takers; some are trying to recover investments gone awry, while others are desperate for much needed cash
• Skippers are other risk takers, but who didn’t have the sense, instincts, or gumption to offload their properties when the market soured
• Runners simply go missing from the country, leaving behind a huge trail of debts

Sheikh Maktoum Hasher Al Maktoum Al Fajer Properties Dubai

Sheikh Maktoum Hasher Maktoum Al Maktoum Al Fajer Properties Dubai UAE

Where Are The Locals?

Forbes     March 11, 2009

Seven suspects have reportedly been singled out by the authorities, but all of them are foreigners.

Dubai’s anti-corruption probe seemed in full swing Tuesday, after seven expatriate businessmen were reportedly accused by prosecutors of taking part in a $500.0 million fraud at Dubai Islamic Bank. The suspects included three Britons, two Pakistanis, one Turk and one American, according to the Associated Press, raising concerns that local Emiraatis might not be held as fully accountable as the expat brigade.

“Some might say that it’s evidence of the anti-corruption drive, but again, where are the Emiraatis?” wondered Christopher Davidson, a British academic who has authored several books on Dubai and the United Arab Emirates. “There have to be the local sponsors, the line managers, the people whose desk at which the buck stopped.”

The alleged fraud involved a company called CCH, which according to reports was linked to some of the named suspects and may have forged documents to fraudulently obtain funds from Dubai Islamic Bank. The bank issued a statement on Tuesday claiming its exposure to CCH was around $330.0 million and that it was chasing down assets “in a range of countries.”

The former chief executive of Dubai Islamic Bank, Saad Abdul Razak, was reportedly taken into custody last year for questioning, as part of the authorities’ probe of the real-estate sector, but his name does not seem to have made the final list. Press reports claim that a handful of local Emiraati executives have also been interrogated, including Sami al-Hashemi, ex-CEO of real-estate developer Mizin, and Abdul Salam al-Marri, head of the Lagoons development on Dubai Creek.

Although Dubai’s defenders cite the example of a former cabinet minister, named in press reports as Khalifa Mohammad Bakhit al-Falasi, who was sentenced to two years in jail in February for an unrelated case of fraud and embezzlement, the truth is that very few local Emiraatis have been charged or punished as a result of such investigations.

Expatriate businessmen have also accused the Dubai authorities of torture and detention without charge, including Zack Shahin, ex-CEO of Dubai Islamic Bank’s real-estate subsidiary Deyaar Properties, and Shahram Abdullah Zadeh, former manager of developer Al-Fajer Properties. (See “Desert Storm In Dubai.”)

Zack Shahin is still behind bars and still has not been charged, according to one of his American lawyers, James Pitts, who told Forbes that there were around 40 other foreign businessmen in a similar situation in Dubai.

When asked whether Shahin might have provided names to the authorities in exchange for a lighter potential sentence, or exemption from the charge sheet, Pitts replied: “I am certainly not aware of any such arrangement.” 

Read also: Desert Storm in Dubai

Read also : Madoff of The Mideast Denies Charges 

Compensation for breach of contract – How to Avoid Court? Here’s how…

source Rootsland
Over the last 10 years, Dubai has gained international attention due to its extensive growth and progress, particularly in the projects and construction sectors. During that period, deals were often done and contracts entered into quicker than if those deals were being carried out in less dynamic markets.

 It seems that commercial parties relied heavily on their ability to negotiate solutions to any dispute rather than relying too heavily on the terms of their contracts or resorting to litigation or other formal dispute resolution procedures. The same parties may have also taken comfort from the obligation on contracting parties to act in good faith imposed by the UAE’s Civil Transactions Law (the Civil Code).

 Of course the current economic climate is very different. Now financing is more difficult to obtain. This has reduced confidence that negotiation alone will resolve disputes. As companies compete for the limited credit available, contracts are being more extensively negotiated and scrutinized by all parties (including lenders). Parties are no longer relying on the market’s continued growth to push deals through or their obligation to act in good faith. The focus is shifting towards identifying what dispute resolution procedures should apply and what remedies are available if the other contracting party breaches its contractual obligations. One of the remedies receiving greater attention is the damages payable if a contracting party is in breach of a contract. Of course, the protection provided by damages will depend heavily on the offending party’s ability to pay in this market.

Time to review

 Most contracts should have provisions dealing specifically with what will happen when a breach of contract occurs. Often an overarching termination provision exists, in addition to provisions relating to curing defaults, damages and events such as force majeure or change in law, and these all play a role in determining the options available to contracting parties in a variety of circumstances.

 The current environment highlights the need for solid contractual provisions and should be taken as an opportunity for all players in the project and construction sector to regroup and focus on contracts that they have entered into and those that they are about to enter into. Everyone involved in project and construction deals should be asking themselves what they are entitled to if the contract is breached by the other party.

 

Consideration should be given to whether contracts yet to be entered into should specifically address these issues. But what if the decision is taken not to do so or an existing contract does not address damages? The Civil Code provides an entitlement to compensation for breach of contract even where the contract itself does not provide for such compensation.

Damages under UAE Law

The purpose of damages is to compensate a party for any loss suffered as a result of default by counterparty to a contract. If damages for a breach of contract are not fixed under a provision of the law or in the contract itself, the Civil Code gives the court discretion to assess compensation “in an amount equivalent to the damage in fact suffered at the time of the occurrence”. The focus here is on the actual loss suffered by a party and gives the court a broad discretion to determine an appropriate award of damages on the basis of the facts and evidence before it. However, how is the ultimate determination made and what limits are imposed on the amount of compensation that may be awarded?

Other provisions of the Civil Code that do not specifically relate to contractual damages may give some guidance as to how compensation may be assessed by a court: “In all cases the compensation shall be assessed on the basis of the amount of harm suffered by the victim, together with loss of profit, provided that it is the natural result of the harmful act”.

 The key element of this provision is that a party suffering loss will be compensated for that loss, including any loss of profit, which flows naturally from the default. The explanatory memorandum to the Civil Code says damages are payable in respect of the actual loss suffered as well as loss of expectation (that is loss of an opportunity to obtain a benefit under a contract or to avoid a loss).

 Each type of damages claimed will need to be substantiated and shown to result from the breach. Consequential (or indirect) losses will generally only be recoverable where it can be shown that the party causing the loss did so with a malicious intent. While it is important to keep in mind the award of damages is always at the court’s discretion, a specific damages regime in a contract can have the benefit of providing greater certainty as to a party’s right to contractual damages and can assist parties negotiate ways of avoiding recourse to court in this challenging environment.

Dubai law pins down property defaulters – If the developer has not been able to start construction “without any negligence or omission on the developer’s part”, the developer may keep 30 per cent of the money paid by the buyer to that point

source The National

The Dubai Land Department is planning to issue an amended property law that will determine refunds for investors who default on their payments based on construction progress of the project, according to lawyers briefed on the matter.

The move will bring clarity to the property market in Dubai, where a credit squeeze and the effects of the global financial crisis have led to defaults by home buyers. But some investors have criticised the amendment for being too heavily in favour of developers.

Lawyers say the amendment to article 11 of Dubai Law 13 of 2008 will stipulate that in cases where a buyer defaults and the developer has constructed at least 80 per cent of the project, the buyer loses all money paid to that point. The home can then be auctioned to compensate the developer for the rest of the cost.

If a developer has completed at least 60 per cent of the project and the buyer defaults, the developer is entitled to keep 40 per cent of the purchase price.

But if a developer has completed less than 60 per cent of the project, it can only keep 25 per cent of the purchase price.

If the developer has not been able to start construction “without any negligence or omission on the developer’s part”, the developer may keep 30 per cent of the money paid by the buyer to that point.

Developers would have to refund any money due to the purchaser within one year, or within 60 days of the resale of the home.

A legal briefing from the law firm Clyde & Co said the amendment “provides much anticipated clarification regarding the procedures required to be followed by developers in respect of defaulting purchasers, as well as the rights of developers to retain purchaser monies upon cancellation”.

The original law specified that if a buyer defaulted on payments to the developer, the buyer would be able to recover 70 per cent of any money they had turned over to that point.

But when the property market started to face difficulties last autumn, the Real Estate Regulatory Agency (RERA) issued an interpretation of the law that said the developer could retain 30 per cent of the total price of the property. In some cases, this meant the developer could keep all payments a buyer had made to them.

Officials from RERA later admitted that the interpretation was an emergency measure intended to prevent a wave of defaults that would cripple the property sector.

The new amendment, called Dubai Law No. 9 of 2009, will not only provide more specific terms but be retroactive for all property contracts signed in Dubai. If a contract between a buyer and a developer has a contrary clause, it will be rendered void, according to the Clyde & Co briefing.

Emad Eldin Farouq, a senior legal counsel with the Dubai Land Department, told a panel last week that the amendment had been signed into law and would soon be published in the official gazette of Dubai, according to an article in Xpress, which first reported the story. The amendment would “maintain the confidence of investors and safeguard the real estate of Dubai”, Mr Farouq said, according to Xpress.

But some investors said the amendment did not go far enough in protecting investors from developers who had delayed construction indefinitely.

“It is taking away our rights from the way the law was originally written,” said Nigel Knight, a homebuyer and member of the Dubai Property Investors Group.

The investors’ group handed the Land Department a petition last week asking for a meeting to discuss concerns it has with the amendment.

A Dubai Land Department spokesman could not be reached yesterday.

RERA Hits Back – Dubai RERA CEO said: “The investor should feel happy when he sees the authorities hit with an iron fist all those who put interests of the city and investors at risk.

http://www.7days.ae/storydetails.php?id=73857&title=RERA%20hits%20back

Dubai Real Estate Regulatory Authority (RERA) has denied receiving a letter signed by 300 real estate investors, developers and advocates expressing concerns over the fate of their investment in the emirate.

In their letter, they demanded RERA act before prices in the real estate market crash, according to a report published by Zawya Dow Jones news web site, which also blamed the RERA CEO of declining to comment on the issue.

Marwan bin Ghalita, CEO of Dubai Real Estate Regulatory Authority (RERA), branded the news as absolutely untrue. “Personally, I did neither receive a letter of this kind nor any call from the said news web site or other,” he affirmed in a statement.

He added that RERA could not have made any regulatory achievements in the real estate market if it had not been keeping regular contacts with developers, brokers and investors alike.

It was reported that the petitioners demanded RERA to take measures to bring the situation under control especially following recent financial investigations into several property companies, a move which raised questions about RERA standards.

Commenting on this, the RERA CEO said: “The investor should feel happy when he sees the authorities hit with an iron fist all those who put interests of the city and investors at risk. It’s illogical that such a measure could feed concerns… on the contrary it should send a message of confidence and assurance across the board.”

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

Answering a question about a list being circulated on the internet about tens of cancelled or delayed developments, the RERA CEO affirmed: “The list was not accurate and not true simply because it was not issued by RERA, Department of Lands or any official relevant body. Those behind the list are only seeking to raise fears and panic so as to make narrow gains.”

Dubai Property Buyers may move court for cancelled off-plan contracts

http://business24-7.ae/Articles/2009/1/Pages/01282009_c77c5faf7c0e4120b77817701e56af04.aspx

Property buyers can contest their “terminated” off-plan contracts, signed after August 31, 2008, in the newly set-up Property Court, but will have to go through the Dubai Land Department (DLD), a senior government official said.

“The purchaser will be further able to seek compensation from the Property Court if he establishes a ground for the termination,” Emad Eldin Farouq, Senior Legal Counsel, Dubai Land Department, told Emirates Business.

In November 2008, the Land Department in an administrative circular, said developers – not buyers – would have to initiate the official procedure to cancel the off-plan transactions. But for sales contracts, signed before August 31, 2008, the terms and conditions of the contract will be applicable for the two parties under the UAE Civil Code. However, these would not have to go through the DLD.

In the internal administrative circular, the department gave the interpretation of the meaning and practical application of Article 11 of the Law No.13 regulating the interim real estate registration. According to this circular, in case of a termination of an off-plan contract, the developer shall be entitled to 30 per cent of the purchase price plus 30 per cent of the any further monies paid above 30 per cent of the purchase price.

“In case of a cancellation of an off-plan contract where the purchase price is Dh1 million and the purchaser has paid 40 per cent of the property value, then the maximum claim the developer can make is of Dh330,000 (30 per cent of Dh1 million and 30 per cent of the remaining 10 per cent),” he said.

“If a buyer wants to contest this, he can go to the Property Court which shall apply the civil jurisdiction on this. Nobody can prevent the buyer from going to the court. Further, the Property Court may or may not agree with this and they can choose to either cancel these terms or they can adopt it or they can apply any other rules to this. The Property Court will look at it based on the rules and regulation in place under the Civil Code Law,” added Farouq.

Legally any agreement can be terminated either amicably, voluntarily or can be terminated by a court order based on the facts.

Under the Civil Code, the purchaser has the right to terminate the contract if there is a breach by the seller. The purchaser is entitled to refer the matter to the appropriate court with jurisdiction (which is now the Property Court)

Mohammad Kawasmi, Senior Associate Al Tamimi & Company, said: “We are not aware if the administrative circular issued by the DLD will hold true in the Property Court and they can choose to override the circular.”

Earlier this week, Farouq told this newspaper that investors facing cash-flow constraints can approach the Dubai Land Department for rescheduling payments for their properties.

Register online

Developers will have to register their off plan and completed units through the Dubai Land Department’s online registration system, said Farouq.

Called Oqood, the new system will enable effective implementation of Law No13 of 2008 for regulating the interim real estate register in the emirate.

Developed by Emirates Real Estate Solutions for the Dubai Land Department, the Oqood online interim registration process will lead to minimising conflicts arising between developers, investors and sellers, while contributing to cutting down the escalating off-plan selling and reselling costs.

Charges will be the same as levied by the Dubai Land Department – one per cent of the total value paid by the seller and one per cent to be paid by the consumer. Following the issuance of Law No 13, developers now have to register all their units prior to launch of the project and only then can they proceed with their sales.

The law aims to create further consumer ease and protection within the Dubai realty market.

From Google Video search

http://video.google.de/videoplay?docid=4416649692877507769&ei=l_9xSa2OGKXy2wKJ5cG0BQ&q=dynasty+zarooni

Law No.7/2006 Concerning Land Registration in the Emirate Dubai

Law No.7/2006 Concerning Land Registration in the
Emirate of Dubai
We, Mohammed bin Rashid Al Maktoum, Ruler of Dubai
Having considered the Federal Law No. 5/1985 promulgating the Civil
Transactions Law and its amendments;
the Federal Law No 11/1992 promulgating the Civil Procedure Law and its
amendments;
the Local Law No 7/1997 concerning Land Registration Fees; and
the Local Decree concerning the Formation of Land Affairs Committee of the
year 1960;
do hereby promulgate the following Law:
Chapter One
Title and Definitions
Article (1)
This Law shall be cited as “The Land Registration Law of the Emirate of Dubai
(No 7/2006)”.
Article (2)
In this Law, the following words and terms shall have the respective meanings
assigned to each of them, unless the context requires otherwise:
The UAE :
the United Arab Emirates.
The Emirate:
the Emirate of Dubai.
The Government: the Government of Dubai including any of its
Departments, Authorities or Public Corporations.
The Ruler : His Highness The Ruler of the Emirate of Dubai.
The Department: the Department of Lands and Properties.
The Head: the Head of the Department.
The Director: the Director General of the Department.
Land anything of a permanently fixed nature which cannot
be removed without damaging or altering its form.1
Rights over Land: any principal or accessory rights over Land.
1 The original Arabic word is “‛aqār” which literally means immovable, the equivalent of French
immeuble. The underlying concept of “landed property” may also be expressed by the term “real
estate”.
Land Register: a collection of records kept by the Department in
written or electronic form in an electronic register,
detailing the description of the registered Land, its
location and the rights over it.
Land Unit: any plot of Land and all that is located thereon such
as buildings, plants or otherwise, situated in one
Land Area without being separated from its other
parts by any public or private property and without
any part of it having a right or an encumbrance which
its other parts do not have.
Land Area: a group of Land Units demarcated by principal roads
or fixed and clear signs with an accredited name and
a distinctive number in accordance with the practice
of the Department.
Person: a natural or a legal person.
Chapter Two
Scope of Application and Right of Ownership
Article 3
This Law shall apply to Land situated in the Emirate.
Article 4
The right to own Land in the Emirate shall be restricted to citizens of the
United Arab Emirates, citizens of the Cooperation Council for the Arab States
of the Gulf, the companies totally owned by any of the foregoing, and public
joint stock companies. Foreign Persons may, subject to the approval of the
Ruler, be granted in certain areas the following rights:
(a) The right to acquire absolute ownership of Land without restrictions as
to time.
(b) The right to acquire usufruct or leasehold of Land for a period not
exceeding 99 years.
Chapter Three
General Provisions
Article (5)
The originals of documents and judicial decisions in pursuance of which
registration is made shall be kept in the Department, and shall not be moved
outside its premises. Interested parties, judicial authorities or experts
appointed by them, as well as competent committees may have access to
such originals and obtain a certified copy thereof in accordance with the
provisions of this Law.
Chapter Four
Jurisdiction of the Department
Article (6)
The Department shall have exclusive jurisdiction to register the rights over
Land and the leaseholds mentioned in Article 4 of this Law. For this purpose,
the Department may do any of the following:
(1) determine the areas to be surveyed or re-surveyed and certify the
maps drawn therefor;
(2) prescribe rules in relation to surveying and inspection, as well as in
relation to issuance of maps relating to Land Units;
(3) prepare model forms of contract relating to real estate transactions;
(4) prescribe rules concerning organizing, archiving and destruction of
documents;
(5) prescribe rules in relation to using computers in storing and recording
data;
(6) lay down rules in relation to regulating and keeping a register of real
estate brokers;
(7) prescribe rules in relation to evaluating Land;
(8) lay down rules in relation to voluntary sales of Land by public auction
and supervision of such sales;
(9) determine the fees payable for services rendered by the Department;
and
(10) establish branches of the Department as the Director may deem
appropriate.
Chapter Five
The Land Register
Article (7)
A Land Register shall be maintained in the Department to record all rights
over Land and any changes that might take place in respect of them. This
Register shall be conclusive evidence against all and everyone unless it is
proved to be the result of fraud or forgery.
Article (8)
Subject to the provisions of Article (7) of this Law, all electronic records shall
have the same weight of evidence as that of their hard copy written originals.
Chapter Six
Registration
Article (9)
All transactions that create, transfer, change or cancel rights over Land shall
be recorded in the Land Register and final judgments confirming those
transactions shall also be likewise registered. No transaction shall have any
effect unless registered in the Land Register.
Article (10)
Any undertaking to transfer a Right over Land shall be limited to an obligation
to pay compensation if the obligor is in breach of his undertaking, whether the
undertaking contains a provision to pay compensation or not.
Article (11)
If the estate of a deceased contains Rights over Land then the certificate of
inheritance shall be registered in the Land Register and disposals by any heir
of any of these rights shall not be effective or recognized against third parties
unless registered in the Land Register.
Article (12)
The Department may for the purpose of settlement entertain applications for
registration submitted by Persons in possession of Land that is not registered
in their names.
Chapter Seven
Alterations or Corrections of Records in the Register of Land
Article (13)
The Department may, on the application of an interested party or on its own
initiative with notification to those concerned, correct clerical errors in the
records of the Land Register.
Article (14)
In co-ordination with the relevant authorities, the Department shall update its
records of Land Units and of what is located thereon such as buildings, plants
or otherwise.
Chapter Eight
The Maps
Article (15)
(1) For the purpose of the registration of Land Units and Land Areas, the
following maps shall be relied upon:
(a) typographic master map;
(b) map of Land Unit; and
(c) map of Land Area.
(2) Each Land Area shall have its own separate map indicating the Land
Units located on it and the numbers thereof.
(3) Each Land Unit shall have its own separate map indicating its site,
boundaries, width and length, area, its features, constructions located
on it and the numbers given for its neighboring units.
Chapter Nine
Dividing and Merging
Article (16)
If the dominant Land Unit is divided up, the right of easement shall remain in
existence in favour of each part of it, provided that that does not increase the
burden to the servient Land Unit. However, if the right benefits only some of
such parts, the owner of the servient Land Unit may apply to the Department
for the termination of the right in respect of the other parts.
Article (17)
If the servient Land Unit is divided up, the right of easement shall remain in
existence over each part of it. However, if the right is not in fact used over
some of such parts, and it is not possible to use it over those parts, the owner
of each part thereof may apply to the Department, in accordance with the
provisions of this Law, for the termination of the right in respect of his part.
Article (18)
Easement rights cease to exist by the acquisition of the dominant and servient
Land Units by the same owner.
Article (19)
If a Land Unit which is encumbered by an accessory Right over Land is
divided into two or more Land Units, then each such new Land Unit will be
encumbered by the whole accessory Right over Land. The new owners may
agree with the beneficiary of the accessory Right over Land for the division of
it in such way so that each new Land Unit will be encumbered by only part of
it, to be determined by mutual consent.
Article (20)
If two Land Units merge and one of them is encumbered by an accessory
Right over Land while the other is not, then the accessory Right over Land
shall extend on the whole of the new Land Unit without the approval of the
merger by the beneficiary of the accessory Right over Land. However, if each
of the two Land Units is encumbered by an independent accessory Right over
Land, then the beneficiary of each such accessory Right over Land must
approve the merger.
Article (21)
Any alteration in the Land Unit by dividing or merging shall be registered in
the Land Register.
Chapter Ten
Ownership Documents.
Article (22)
The Department shall issue documents relating to Rights over Land on the
basis of the actual records of the Land Register.
Article (23)
Without prejudice to the provisions of any other law, apartment buildings and
multi-story buildings shall be treated as a single Land Unit and shall have one
record in the Land Register to be supplemented by records stating the names
of the owners of the apartments, stories and common parts.
Article (24)
(1) Ownership documents mentioned in Article (22) of this Law are
conclusive evidence of the Rights over Land contained therein.
(2) In the Land Unit record shall be set out any conditions, promises or
restrictions concerning Rights over Land and other obligations.
Chapter Eleven
Final Provisions
Article (25)
Provisions of the Federal Civil Transactions Law No. 5/1985 and its
amendments shall apply to all matters not provided for by this Law.
Article (26)
(1) Any agreement or transaction made contrary to the provisions of this
Law shall be null and void, as shall also be null and void any
agreement or disposal made with the intention to contravene the
provisions of this Law
(2) The nullity of such agreement or disposal may be invoked before the
Court by every Person having an interest, as well as by the
Department, or the Public Prosecution, and such nullity may also be
ordered by the Court on its own initiative.
Article (27)
The Decree dated 6 November 1977 concerning Civil and Criminal Cases in
Respect of Transactions Relating to Disposals of Lands in the Emirate of
Dubai shall be repealed.
Article (28)
The Head of the Department shall issue all the necessary regulations,
decisions, orders and instructions for the implementation of the provisions of
this Law.
Article (29)
This Law shall be published in the Official Gazette and come into force as of
the date of its publication.
Mohammed bin Rashid Al Maktoum
Ruler of Dubai
Issued in Dubai on:
13 March.2006 AD
13 Safar 1427 AH

Government of Dubai Dubai Lands Department Law No.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government of Dubai

Lands Department

Draft Law No. 8 of 2007

Concerning Real Estate Development Trust

Accounts in the Emirate of Dubai

Draft Law No. 8 of 2007

concerning Real Estate Development Trust Accounts in the Emirate of Dubai

We, Mohammed bin Rashid Al Maktoum, the Ruler of Dubai,

After perusal of Federal Law No. 5 of 1985 in respect of Civil Transactions, as

amended;

Law No. 7 of 2006 in respect of real property registration in the Emirate of Dubai; and

Law No. 3 of 2006 specifying the areas where non-UAE nationals may own real

properties in Dubai,

Do hereby issue the following Law:

Chapter One

Definitions and General Provisions

Article 1

This Law shall be named “Law No. 8 of 2007 concerning Real Estate Development

Trust Accounts in the Emirate of Dubai

Definitions

Article 2

In the application of this Law, unless the context requires otherwise, the following terms

and expressions shall have the meanings as set out opposite each of them:

The Emirate

 

 

: The Emirate of Dubai

Department

 

 

: The Land Department

President

 

 

: The President of the Department

Director

 

 

: The General Director of the Department

Register

 

 

: The Register prepared at the Department to register

developers

Trust Account

 

 

: The bank account of the real estate project in which the

amounts received from off-plan units buyers or the project

financiers will be deposited.

Trustee

 

 

: The financial institution or bank approved by the Department

to manage a trust account.

Competent Authorities

 

 

: The government authorities which grant licenses to

developers.

Developer

 

 

: A natural or corporate person licensed to buy and sell real

properties for development purposes. The term shall include

the master developer and sub-developer.

Real Estate Development

 

 

: The construction of multi-storey buildings or complexes for

residential or commercial purposes.

Unit

 

 

: An allocated part of the property sold by the developer to

third parties.

Article 3

The provisions of this Law shall apply to developers who sell off-plan units in real estate

development projects in the Emirate and, in consideration, receive payments from

buyers or financiers.

Article 4

A special register to be named “The Developers Register” shall be prepared at the

Department. The names and particulars of developers licensed to carry out real estate

development activities in the Emirate shall be recorded in the said register. No

developer may carry out the said activities unless it is registered in the said register and

licensed by the competent authorities pursuant to regulations issued in this regard.

Article 5

After obtaining a written permit from the Department, a developer may advertise in local

or foreign media or participate in local or foreign exhibitions to promote selling off-plan

units in the Emirate. The Director shall issue the resolutions as required to regulate the

requirements for advertising in the media or participating in exhibitions.

Chapter Two

Creating a Trust Account

Article 6

- A developer wishing to sell off-plan units must apply to the Department to open a

trust account. The application should be accompanied with the following:

1. Trade license and Dubai Chamber of Commerce and Industry membership

certificate;

2. Title deed of the plot to be developed, if any;

3. A copy of the contract between the master developer and the sub-developer;

4. Architectural designs and preliminary engineering plans approved by the

competent authorities and the master developer;

5. A financial statement of the costs, revenues and expenditure of the project

certified by a chartered auditor;

6. An undertaking by the developer to commence the project construction works

after obtaining the master developer’s approval to sell off-plan units;

7. the sale contract form between the developer and the buyer.

- The Department shall issue its approval to the developer to open a trust account if

the above documents are provided, otherwise the Department shall require the

developer in writing to complete the documents or provide the required information.

Article 7

The trust account shall be created under a written agreement between the developer

and the trustee. Under the said agreement, the amounts paid by buyers of off-plan units

or received from the financiers shall be deposited in a special account to be opened in

the name of the real estate project.

The said agreement shall set out the terms for managing the account, the rights and

obligations of the contracting parties and other terms and conditions. A copy of the

contract shall be lodged with the Department.

Article 8

The Department may add a note regarding the purchase agreement between the

master developer and the sub-developer in the record of the plot owned by the master

developer. Further, the buyer of an off-plan unit may apply to the Department to add a

note regarding the purchase agreement entered into with the sub-developer in the

record of the plot on which the project is to be constructed.

Article 9

Subject to Article 4 of Law No. 7 of 2006 concerning real property registration in the

Emirate of Dubai, sole proprietorships or companies may obtain a license from the

competent authorities to carry out real estate development in the Emirate in accordance

with the requirements and regulations in this regard.

Chapter Three

Management of the Trust Account

Article 10

1. A trust account shall be opened in the name of the project and shall be used only

for the purposes of developing the real estate project. The amounts deposited in

the said account may not be attached in favor of creditors of the developer.

2. A developer carrying out several projects should open an independent trust

account for each such project.

Article 11

The Department shall prepare a register includes names of financial institutions and

banks who act as trustees. A trustee should be proficient in managing trust accounts.

The agreement between the Department and the trustee shall set out the duties of the

trustee and the terms under which the trust account is managed.

Article 12

The trustee should provide the Department with periodical statements of the revenues

and expenditure of the trust account. The Department may assign an auditor to audit

the statement and data. Further, the Department may at any time require the trustee to

provide it with such information or data as it may deem necessary.

If the Department finds any violation of the provisions hereof or the executive

regulations issued hereunder, it shall advise the trustee of such violation in writing and

request it to rectify the same within a specific period of time and advise the Department

in writing of such rectification.

Article 13

The depositors or their representatives may inspect the accounting records related to

them and request copies thereof. Representatives of the official authorities may also

inspect the records and obtain copies thereof.

Article 14

If the developer mortgages the project in order to obtain a loan from financing

institutions or companies, the developer should deposit the mortgage amount in the

trust account, and such amount shall be disposed of in accordance with the provisions

of this law.

Article 15

1. A trustee should withhold at least 5% of the trust account deposits after the

developer obtains the completion certificate. Such withheld amounts shall be

paid to the developer only one year after the units are registered in the names of

the buyers and title deeds are issued in their names.

2. In the events of unforeseen circumstances resulting in the non-completion of the

project, the trustee should, after consultations with the Department, take

measures as required to maintain the interests of depositors.

Chapter Four

Penalties

Article 16

Any person who:

1. deliberately provides the competent authorities with inaccurate documents or

data in order to obtain a license to carry out real estate development activities;

2. knowingly offers for sale units in unreal real estate projects;

3. embezzles, illegitimately uses or spends payments made to him for real estate

development purposes;

4. an auditor who deliberately prepares false report regarding the result of auditing

the financial position of the developer, or deliberately hides material information

in such report;

5. a consultant who knowingly certifies false documents in relation to the real estate

project; or

6. a developer who deals with a broker who is not registered in the real estate

developers register in accordance with the provision of regulation 85/2006

concerning real estate brokers in the Emirate of Dubai

shall be punished by imprisonment for no less than one month and a fine, or either

punishment.

Article 17

A developer shall be de-registered in the following events:

1. if it is declared bankrupt;

2. if it fails to commence the construction works within 6 months from the date of

the approval granted to it to sell off-plan units without having an acceptable

excuse;

3. if the license granted to it by the competent authorities is cancelled;

4. if it commits a violation under Article 16.2, 3 or 4 hereof; or

5. if it commits a violation of the laws and regulations regulating the real estate

activity in the Emirate.

Chapter Five

Final Provisions

Article 18

Existing developers at the time the provisions of this Law become effective should

adjust their positions to comply with the provisions hereof within 6 months from the date

this Law is published in the Official Gazette. The Department may extend the said

period as it may deem fit.

Article 19

The Department may charge administrative fees against the services provided under

this Law.

Article 20

Any provision or procedure in any law or regulation shall be cancelled to the extent the

same is in conflict with the provisions hereof.

Article 21

The President shall issue the resolutions required to implement the provisions hereof.

Article 22

This Law shall be published in the Official Gazette and come into force from the date of

its publications.

Mohammed bin Rashid Al Maktoum

Ruler of the Emirate of Dubai

Issued in Dubai on this day ____________2007

Corresponding to ______________1428 A.H.

An amended copy of the draft law, prepared on 14.03.2007

Emaar fell 9.9 per cent, its biggest drop since November 18

 

http://www.gulfnews.com/business/Markets/10268982.html

Bloomberg Last updated: December 21, 2008, 14:29

Dubai: Gulf shares fell, led by real-estate companies, on concern declining crude prices will slow government spending in the region. Emaar Properties PJSC dropped the most in more than a month after Credit Suisse cut its price target to more than half for the Middle East’s biggest developer. Sorouh Real Estate Co., Abu Dhabi’s second-largest property developer, had its biggest drop since November 10. Global Investment House closed at its lowest level in four years after Al Qabas reported an investor in the company lowered its stake. The Dubai Financial Market General Index dropped 5.6 per cent to 1,802.77, bringing the slump in 2008 to 70 per cent. Abu Dhabi’s gauge lost 3.7 per cent, while the Kuwait Stock Exchange Index retreated 2.7 per cent.   “Investors are reacting to the massive fall in crude oil prices,” said Chamel Fahmy, senior regional sales trader at Beltone Securities Brokerage in Dubai. “This decline will impact the future growth and government spending.” Crude oil for January delivery slid $2.35, or 6.5 per cent, to $33.87 a barrel in New York on December 19, the lowest settlement since February 2004. Futures tumbled 27 per cent since December 12, the biggest weekly drop since January 1991. Prices have slumped 77 per cent from the record $147.27 a barrel reached on July 11. The drop in oil prices “threatens investment” and is “wreaking havoc,” Saudi Arabia’s Oil Minister Ali Al Naimi said on December 19. “A number of upstream projects have already been canceled or delayed.” Saudi Arabia’s fiscal surplus would fall to zero at an oil price of $50 a barrel, Fitch Ratings said in a report last month. Kuwait would break even at $42 and Abu Dhabi at $31. For Bahrain the budget would balance at $74 a barrel, Fitch said. The Oman’s Muscat Securities Market 30 Index fell 2.3 per cent, and the Bahrain All Share Index lost 2.1 per cent. In Qatar, DSM 20 index rose 0.3 per cent. Saudi Arabia’s Tadawul All Share Index gained 1.6 per cent, according to the exchange’s website. The measure tumbled 4.1 per cent on Saturday. Emaar fell 9.9 per cent, its biggest drop since November 18, to Dh2.63 after Credit Suisse cut its target to Dh4.42 from Dh9.25 and maintained a “neutral” rating in a December18 report. Sorouh fell 9.8 per cent to Dh2.94. Kuwait’s Global Investment House plunged 8.2 per cent to 280 fils, the lowest level since December 2004. Dubai Capital Group reduced its stake in the bank to 7 per cent from 10.38 per cent, Al Qabas reported, without saying where it got the information. Standard & Poor’s cut its credit rating for Global last week on concern Kuwait’s biggest investment bank may not meet some repayment obligations. Doha Bank QSC weakened 5.4 per cent to 42.1 riyals after Raghavan Seetharaman, chief executive officer of Qatar’s fifth- biggest bank by market value, said on December 18 he was “cautiously optimistic” about next year, which would be one “of consolidation”.

UAE Dubai Property bargains fail to sell

Property bargains fail to sell – The National Newspaper

A Dubai-based estate agent slashed millions of dirhams from the value of homes in a 12-hour sell-off, but not one of the properties changed hands.

Last week, the Marina franchise of the international estate agency Engel and Volkers held what it called “the largest discounted sale of completed properties in Dubai” to breathe some life into its local business. But the result was a sign of just how far the property market has reversed since the summer.

More than 150 homes in some of Dubai’s most exclusive addresses, including Emirates Hills, The Marina and the Palm Jumeirah, had a combined Dh175 million (US$48m) knocked off their original listing prices. The company said it made contact with dozens of potential clients, many of whom indicated they would attend similar sell-offs in the future, but failed to sell any properties during the event.

“It was unfortunate, but it proves just how tough the market is at the moment. A lot of people were scared that prices would drop more,” said Harriet Killen, the office manager of Engel and Volkers’s Marina office, who added that December was traditionally a weak sales month since many residents left the country on holiday.The situation was in stark contrast to scenes at this summer’s Abu Dhabi Cityscape Exhibition, when hundreds of investors queued for hours in the hope of putting their names down for properties.
“The market has been slow recently so we had to be active in generating some direct sales and some urgency,” said Ms Killen.The company had urged sellers to drop their prices for a day to stimulate interest among potential buyers, knocking off between Dh500,000 and Dh1m from the prices of many properties.A large number of the current owners of the discounted properties are making payments on assets that are sinking in value.

Many in their position have sold their homes to ease cash flow problems or to re-invest in other markets. Most have already witnessed a huge appreciation in their homes since they first bought them and are generally content to take a hit on their margins. During the event last Saturday, prospective buyers were invited to a 12-hour sell-off starting at 9.30am in which the public could meet the company’s sales and leasing agents. A local mortgage company was also on hand to arrange financing for potential clients.
Obtaining a mortgage is another stumbling block for would-be buyers. Banks and finance houses have tightened their lending criteria as the worldwide credit crisis deepens. One lender, Amlak, has suspended new loan applications and others are demanding larger deposits.Estate agents have said the shifting property market might have a positive effect, “cleansing” the business and raising standards in the industry.

There have already been hundreds of redundancies among brokerages and property developers, in some cases predominately support staff.Quaid Abbas, an executive property consultant at the Sheikh Zayed Road branch of Engel and Volkers, described a typical discounted property as a villa in Arabian Ranches that sold initially for Dh2.5m, reached Dh7m as the market gained, and advertised for Dh6m in today’s market.

“We’re getting more listings than buyers. More people are selling than buying. Buyers are looking for a very good bargain and we cannot always meet their expectations. In their minds they want to buy at less than half of what it was.”rditcham@thenational.ae

Interpol – Money laundry – Malika worked for Define Properties in Dubai – ACI – Niki Lauda Towers

original published:http://www.revu.nl/12499.Ex-spionne%20Malika%20K.%20staat%20op%20straat

original translated by google: http://translate.google.com/translate?sourceid=navclient&hl=en&u=http%3a%2f%2fwww%2erevu%2enl%2f12499%2eEx%2dspionne%2520Malika%2520K%2e%2520staat%2520op%2520straat Malika K., the Moroccan ‘Mata Hari’ from Slotervaart, is dismissed by her company Define Properties in Dubai. It says the director of the company Tarek Kandil in an e-mail. Last week showed that he still Kandil, Malika had suspended “pending the investigation into the allegations” which in his opinion firm were unfounded. . Under pressure from intelligence Kandil has drawn a different conclusion, the work is finally dissolved Monday. Malika’s lawyer mr CMJ Zillikens confirmed yesterday morning in each case the suspension against Revu. According Zillikens the suspension is the result of a “defamation campaign from the Netherlands.” ” “We see what the consequences are,” says Zillikens, it aimed at the continuing online publications of former police officer and private detective Jacques Smits, who was hired by her ex in an attempt to control their son back. Kandil has threatened with legal action if he does not stop with publications about the company. Zillikens together with criminal lawyer Han Jahae last week spoorslags traveled to Dubai. What it wants is discussed Zillikens not say, except that it is a “good trip” and there was more news will soon follow. Malika worked until March of this year by property developer Omniyat Properties. Since she was fired when the company informed brought her back. Smits knew that include telling customers to Omniyat Malika by referring to

Tarek Kandil, an Egyptian who has just started Define Properties.

Kandil had worked for Omniyat, but was fired for unclear reason, as sources tell Revu. Tarek Kandil then dove at Schon Properties, responsible for projects such as Dubai Lagoon and Schon Business Park. The company became discredited because of the various construction projects but did not want rafts and investors suspected that they were taken by the nose. Tarek Kandil to Define Schon left to be examined.

Define Malika has for almost all funds governed by an Egyptian dealer who they already knew, sources tell Revu. Her resignation means to Define also possible that her visa will be revoked and they will have to leave Dubai. In May, the full bench that her 8-year-old son back to the father in the Netherlands, but Malika opposes the extradition of the child. Whether there is a relationship with the custody dispute is not clear, but her ex-husband Mohammed B., owner of an Amsterdam reiswinkel was last Friday when he robbed money and passports of over four hundred customers to airline Royal Jordanian would bring. The robbers have the vault with all the money and a few hundred passports taken. The location of the incident is a massacre, according to eyewitnesses. The two predators would firmly establish the name of Malika have said. The shop was closed Monday. “This is the end of his shop,” says a friend who for years assisted Mohammed state. “We were all scared for a long time that this would happen.” Mohammed B. has many times against Malika declaration made threats and violence, but her lawyers say that the stories B. sucks his thumb to prevent Malika her child in Dubai may hold. Jan Libbenga Jan Libbenga Malika werkte voor inlichtingen én criminelen Malika worked for intelligence and criminals Malika K. Malika K. duikt op in Dubai shows up in Dubai Malika naar Dubai door wangedrag ex-man Malika to Dubai misconduct by ex-husband Wordt Malika K. Is Malika K. uitgeleverd? extradited? this is an google translation from the original report:

Malika K., the Moroccan 
'Mata Hari'  from Slotervaart 
 who as a former spionne 
would have earned millions 
 with the laundering of 
dirty  money, 
is reported in Dubai.  
Sources told Revue this weekend that she has an apartment at the Dubai Marina.

She also has a new job. About her residence were several stories in recent weeks the round. So that they heard Revue in June with a false passport would have landed in France and from there to the Netherlands would be brought, but at different addresses in the Netherlands where they could stay observation teams have found nothing. Since Dubai has no extradition treaty with the Netherlands, authorities can no way. Cees Korvinus lawyer, who for many years the interests of Malika’s ex-husband represents in a custody case, early this year has already called for justice for extradition and that following the publication in Revue last week again done. At the time that there was contact with head Interpol in Dubai to take action, the judiciary refused to provide further details. . The prosecutor wrote that they do not know what the situation is. The publications on Malika in Revue, Telegraph and other newspapers have many disconnected.

Define Properties. Sources refused

Revue not only to her home address

but also on the new job of Malika

This brand new property 
developer,Define Properties  
 in Number One Tower on 
Sheikh Zayed Road in Dubai 
is largely run by former 
managers  of Omniyat, 
the company 
Malika was dismissed 
on March 16.

Director is Tarek Kandil, formerly sales manager at Omniyat.

The name of Malika is nowhere to be found on the website of the company, but it is to see the photo of the press in early June.

The company says now have a working capital of 500 million Dirham, and would have bought land sales worth 1.7 billion Dirham. . The main project is the construction of the Nikki Lauda Twin Towers, which should be completed in 2010. . Director Kandil promised opposite business magazine Business Emirates’ Define that no building plans launches as they do not actually completed, it aimed at the many fraud cases so slowly that Dubai is a very bad name have worried. Supervisor Real Estate Regulatory Agency (Rera) currently doing research on mala fide developers who buy contracts sell many occasions, with no other purpose than to fat profits to gather. . Some of these developers are even funded with money arms from Egypt. Middlemen purchase contracts let criminals’ pre launch ‘on the basis of the beautiful building plans and models,” Frank knows Englishman of Ultra Scan, a Dutch agency that specializes in financial fraud cases. It is a pyramid game that once burst out. ” Damac blies het zogenoemde Palm Springs-project af toen bleek dat men niet eens beschikte over bouwgrond. Certainly eighty investors have from England earlier this year from Dubai developer Damac Properties put under pressure because the luxury apartments were sold but not delivered, even stronger: Damac blew the so-called Palm Springs project off when it became clear that not even available on plot . . Later that was again denied and the company will now still six months to the construction to begin. In June unveiled the Egyptian Telegraph – El Fagr (The Dawn) – in a page article filled an even bigger scandal surrounding a 30 million-acre area covered by the denominator Gamsha Bay to the Red Sea Riviera in Egypt by Damac would be developed as a vacation area. Prime Minister Ahmed Nazif was at the presentation in 2006 and since then there have been 100 million euros to purchase contracts signed. Until various ministries in Egypt peril smoking: the area contains mines, there is oil under and is not suitable for human habitation. Indeed, this area is no formal ownership of Damac. Malika K. diverted, while they worked for rival Omniyat, (criminal) to customers Damac, which they 8-9 percent commission was, according to intelligence data. Piquant detail is Damac El Fagr according to former agents of the secret service as sellers had hired. During his investigation into possible investment frauds of Palm Invest private detective Englishman has an account code detected by Malika at Credit Suisse in Lugano, which they used for money laundering. From this account would be tens of millions of dollars were transferred to Dubai. At Schiphol by the Royal Military Police on August 16 arrested again a money courier who claims that he works for Malika. The man flew from Amsterdam to Milan and from there would go to Dubai. . The Royal Military Police would like this against Revu not confirm. We do not have communications arrested persons, unless we come out themselves.” The arrest of a Turkish money courier in October 2007 was for intelligence agencies to cause great alarm to save on their ‘Malika’. They had to investigate suspicious money flows in the fight against international terrorism, but showed itself at the center of this network are. Jan Libbenga also http://www.revu.nl/12003 http://translate.google.com/translate?sourceid=navclient&hl=en&u=http%3a%2f%2fwww%2erevu%2enl%2f12003

International intelligence agencies and criminals are hunting the

32-year old Malika K., a Dutch infiltrators on the wrong side of the

line landed, and that during her work for intelligence agencies grew

into a broker in criminal relations.

The Amsterdam of Moroccan descent is suspected from its place of Dubai international drug shipments to finance and facilitate, including XTC-Dutch merchants. According to rough estimates in recent years, there were more than 100 million euros through her hands. Many criminals showed their traditional money laundering addresses in the lurch for Malika K.. Attempts to her earlier this year failed to hold. Malika M. is wanted for money laundering, fraud, receiving stolen goods, arson, kidnapping and the commission for liquidation.

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

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

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.

 

 

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

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.

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.

Khaleej Times Online – Shaikh Mohammed orders transfer of Dhs70 bn to the Ministry of Finance

Khaleej Times Online – Shaikh Mohammed orders transfer of Dhs70 bn to the Ministry of Finance

14 October 2008

Dubai -

The Vice President and Prime Minister of UAE and Ruler of Dubai His Highness Shaikh Mohammed bin Rashid Al Maktoum, has ordered the transfer of Dhs70 billion to the Ministry of Finance so that it can inject liquidity into the national banking sector.

The move followed the instructions of President His Highness Shaikh Khalifa bin Zayed Al Nahyan. The order means that Dhs120 billion (US$32.7 billion) has been provided for the banking sector over the last month. On Sheikh Mohammed’s instructions, the Ministry of Finance and the UAE Central Bank have been assigned the task of injecting the liquidity into the banking sector.

Shaikh Mohammed ordered the setting up of a suitably qualified committee composed of the officials of ministries of Finance and Economy and the Central Bank to follow up these instructions, as well as to handle the relevant the Cabinet procedures.

The step further indicates the country’s leadership to provide all required guarantees to support the banking sector in the UAE and to protect it from the global financial crisis. It also reflects the quick response of the UAE government in term of providing whatever could guarantee stability for the financial and banking sector in the country.

On Sept. 22nd, the Central Bank allocated Dhs50 billion (US$13.6 billion) as facilities for the banks operating in the country so that they could use them if required, as part of the economic measures taken by the UAE to support the banks to avoid the current global financial crisis.

Swift action gets an equal and rapid response from UAE Inc

Swift action gets an equal and rapid response from UAE Inc

12 October 2008

The strong comments made by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on the strengths of the UAE economy and the stability of its real estate and financial markets have set off a chain reaction of confidence.
Corporate chieftains have come out in vocal support of Sheikh Mohammed’s statement, made on the final day of Cityscape Dubai. Independent research too has confirmed that the UAE economy has the ability to emerge stronger.

“Our national economy, banking sector and financial markets are sound,” Sheikh Mohammed said. “They draw their strength from a long-term vision, boosted by flexible legislations that protect local and foreign capital.” He added that the UAE economy was able to weather economic downturns, even during Gulf’s first and second wars.

Global Insight, a US-based economic and financial forecasting company, yesterday said the UAE is among the world’s least risky countries along with Saudi Arabia, Taiwan and Malaysia. In the UAE, capital levels are high, liquidity is sufficient, bank management is adequate, and the regulatory environment is prudent, it added.

“In general terms, GCC countries exhibit high levels of banking sector stability, in sharp contrast to emerging economies outside that group. For the GCC countries presently under coverage, the UAE and Saudi Arabia banking sectors are rated as stable and as highly stable,” Global Insight said.

Sheikh Mohammed’s comment that the country’s ability to grow can be attributed to the “clear vision, world-class infrastructure, availability of local and international expertise and the perfect and attractive business environment” has found a resounding echo among the UAE’s business elite that Emirates Business spoke to yesterday.

Sheikh Mohammed said the UAE’s economy was far from being affected by the global credit gloom and referred to the surge in real estate demand.

According to Global Insight, the global financial crisis has had relatively limited direct effect on banking stability in most emerging markets. “We looked at 33 emerging markets and found that credit expansion in many of these economies has been very rapid over the past several years, driven in large part by strong economic growth,” said Toby Wight, manager of Global Insight’s Banking Risk Service.

The nation’s chief executives have firmly stood by Sheikh Mohammed’s words when he said: “Our economy and markets are doing well. Our economic history shows the sound vision of the country’s leadership and the best example for that is the huge demand witnessed in all sectors, especially real estate. We launch initiatives on financial, educational, technological and media fronts and then attract investments from all over the world which shows the success of such initiatives.”

Nasser bin Hassan, Al Shaikh: Director-General, Dubai Department of Finance, and Chairman, Amlak and Deyaar

“The fundamentals of our economy are strong and over the past few years we have enjoyed surpluses besides having strategic reserves in place. Although we are part of the global economy, our position is much better than many countries since we do have solutions in hand whether it be on federal or local level.

Another important thing to be noted here is that we have always been fast in taking a decision and implementing it. This actually works in our favour in such an environment unlike some other countries where you see the right decision is taken, but so much time passes before the decision is implemented. Sometimes the delay proves fatal.

His Highness’s comment is certainly a vote of confidence in the economy and no one can argue that the UAE or any other regional country does not have the solutions in hand.

Due to the global meltdown in the credit market, what has happened is that the international capital markets closed overnight. This caused a small disturbance in the system. However, since we have solutions in hand, the effects of the global credit crisis will be small on our economy.

The UAE Central Bank has moved fast to provide a Dh50-billion credit line for UAE financial institutions and this is just to compensate for the difficulty they are facing from international capital markets.

Sheikh Khaled bin Zayed Al Nehyan: Chairman, TamweelTamweel and Bin Zayed Group

Today the whole world is going into a huge chaos. It is very important to bring rationality and also bring understanding of the issues. It is very important to know what has happened and how these issues inter-relate and can affect the local market and also who is in charge and who is responsible about what is happening.

Everybody is blaming the stock market, but this stock market is just a reflection of what is happening. Everybody is blaming speculators in the real estate market. These players utilise the opportunities that are there. This is a free market, and we would like to keep it open as much as is possible so that the market decides exactly where prices, where interest should go.

But unfortunately you hear of people who would like to control it, who would like to build dams in their way, which is really very strange.
People need to have a fair chance in being able to utilise the opportunities in their interest as well as contribute to the growth of the whole economy.
Yes, you would like to regulate, there is no doubt about that so that there is no abuse in this market. this is the new era of Dubai and it was the bold move of Sheikh Mohammed in this as well as his advisers and his team who have helped to develop Dubai.
Everybody was saying, no it is not possible. It requires courage to go and build something like this, but it also requires knowledge to navigate in troubled times like this.

Salah Salem bin Omeir Al Shamsi: Chairman, Abu Dhabi Chamber of Commerce and Industry

The comments of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, are very strong and come at the right time.
They have dispersed a lot of clouds that have enveloped the country’s economy since the beginning of the global financial crisis. The statements have consolidated the position and solidity of the national economy and reassured national and foreign investors about their investments in the UAE.

Despite the fact that the world financial crisis has hit most of the world, its effects on the emirates are weak, and the UAE economy will be able to weather the crisis as it did the first and second Gulf wars.

And most certainly our financial institutions and real estate markets are now in a very strong position, and the government will intervene to protect them in case of any trouble.

The UAE has not been much affected by the financial crisis for two main reasons. The first is the sound economic vision of the politicial leadership that has enacted legislations to guarantee stability and protection for investors in various sectors that witness big growth. Evidence of this is the growing demand in sectors such as banking and realty.

The second reason is the strong growth in gross domestic product (GDP) which has exceeded Dh512bn and which depends on abundant liquidity secured by oil. Add to this the contributions made by the private sector.

Ronald Barrott: Chief Executive, Aldar Properties

I agree with His Highness Sheikh Mohammed, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The UAE is good and a sound place for investment. The country continues to attract foreign investors due to its stable market. The investment conditions are excellent here, particularly in Abu Dhabi.

Lots of investors are coming to the UAE. With my experience in Aldar, we are doing well with continued growth, and we see no problem despite these crises.

Mohammed Sharaf: Chief Executive, Dubai Ports World

I strongly believe in the words of Sheikh Mohammed, Vice-President and Prime Minister of the UAE and Ruler of Dubai. There shouldn’t be anything to worry about in terms of the UAE economy. We should pay close attention to what is happening globally to ensure we don’t make the same mistakes, but historically when there has been economic strife in the world, the Gulf, and the UAE in particular, has continued to prosper. Yes, short-term investors in the stocks markets have lost a lot of money, but what many of them were doing was gambling. We have Sheikh Mohammed’s comments and the UAE Central BankUAE Central Bank has also stated that our banking sector is in a strong position, so what more do we need?

Habib Fekih: President, Middle East, Airbus Industrie
As far as the UAE is concerned, it is less affected than the rest of the world. The country has the resources and means to stay strong and grow.

For the aviation industry in particular, the UAE market will do fine. While airlines such as Emirates will be fine, we are waiting to see consequences for other airlines in the Middle East, such as the ones in Saudi Arabia, Syria, Jordan, Lebanon and so on.

Air travel performance depends on how much travel plans will be affected. But we are okay so far and not suffering from any serious downturn. The UAE economy will stand strong but our sector especially is linked to the world economy. So Airbus will suffer if some airlines in the region are not able to perform.

Arif Alharmi: Chief Executive, AmlakAmlak Finance

Sheikh Mohammed’s comments came at the right time, and the whole market, especially the real estate sector, responded positively to the reassurance the economy is strong. We were always confident that the government will take all necessary measures to safeguard our economy and guide us.

Since the start of the global crisis, we worked closely with the authorities and implemented several measures to continue with our commitment of providing leading-edge home financing. However, the real estate sector needs to move forward with the completion of the numerous projects in the pipeline.

Farhan Faraidooni: Executive Chairman, Sama Dubai

The statement made by Sheikh Mohammed has reassured investors about the strength of the UAE economy and will certainly have a positive impact on the real estate industry here. Stock markets across the world have been hit badly and I believe that people will not invest there for a long time.

If we look at what happened after 9/11, I can certainly say that people will start investing in the real estate market here. In today’s circumstances, it offers them a safe and secure investment opportunity in the medium to long term. Dubai now needs more long-term investors and new legislations have actually helped curtail speculation in the market.

I am very optimistic that the property market will react positively to Sheikh Mohammed’s comments, and in the coming years will offer better returns to investors.

Sheikh Abdullah bin Fahid Al Shakra: Chairman, Al Hanoo Holdings

The UAE’s diversified economy has made it capable of standing unshaken in such credit crunch circumstances. This market is based on solid foundations one of which is that it depends on local and regional liquidity.

Compared to the world market, the UAE and the regional markets are at their highest level of economic cycles. Many talk about the negative impacts of the credit crunch on the UAE market but that has not happened.

Khalid Al Malik: Chief Executive, Tatweer

The statement made by Sheikh Mohammed is definitely reassuring since it is coming from someone who has seen the ups and downs of a market. It gives a lot of confidence since it is coming from someone who is a visionary.

But we have to bear in mind that it is very important for us not to ignore the situation. There is a problem in the world and we are part of this world. The bottom line is: the ones who face the situation with confidence in the market are the ones who can bear the consequences of this. Those who don’t have the confidence and only sit and think about the problem will not move forward.

Every market is different. A developer has to understand the market here. There is a certain demand and supply situation in each market, and what I advise a new developer is to look at the market before he ventures into it.

Saif Belhasa: Chief Executive, Saif Belhasa Group

The crisis in the US and Europe will affect our markets, but we won’t know the extent of its impact for a few months. We will have to watch the situation very carefully. We have not seen any slowdown in the UAE, but we can’t say there won’t be any effect in the future. Our banks have a lot of money in Europe and the US, but the Central BankCentral Bank has assured us that the majority of assets are in the UAE.

Sheikh Mohammed has been a great supporter of our markets. The Dubai Government will do everything it can to achieve its targets.

Sultan Butti bin Mijrin: Director-General, Dubai Land Department

The wise leadership represented by Sheikh Mohammed makes us confident about overcoming crises and taking advantage of them. This is due to the strength of the UAE’s economic structure as well as the confidence that Dubai enjoys among investors inside and outside the UAE.

The current crisis will have positive effects on Dubai and consolidate its position as a destination for the world’s capital. That was noticed at Cityscape. In addition, land trading witnessed a big revival. Land transactions at the end of Ramadan were not affected and were close to the transactions done at the beginning of Ramadan, though the real estate market was facing problems. Property registration also increased in 2008 compared to the same period in 2007.

Sina Al Kazim: Chief Executive, Meraas Development

We got a confidence boost by Sheikh Mohammed at Cityscape. When we launched the Jumeirah Gardens project, we were aware of the grim global economic scenario, and we were confident of the Dubai economy and the good prospects it offered. This was evident when we approeached banks for funds and got a positive response from them. This assures us that Dubai is financially stable.

Mohamed S Binbrek: Group Chief Executive, Dubai Properties Group

Sheikh Mohammed’s comments will calm jittery investors’ nerves and reinstate confidence in our economy. Our economic fundamentals are strong; we are a diversified economy with surpluses in our budget. In the real estate sector, only six per cent of the purchases are made through home finance options, while 94 per cent are buyers who pay cash.

Even the Central bank has strict restrictions in place, limiting sectoral lending. I don’t see we will face any problems like the US. Moreover, we have checks and balances in place with 90 per cent lending in best-case scenario and monthly instalments not being more than 50 per cent of take-home salary. This is to prevent people from falling into excessive debt.

The market and people have a herd mentality and they follow what others are doing. A statement coming from the second highest authority of the country reinstates confidence in the market and calms jittery nerves.

Marwan bin Ghalita: Chief Executive, Real Estate Regulatory Agency

The market is doing well and we are part of the global situation, but we have good government support and, as Sheikh Mohammed said, most of the companies are run by the government and semi-government entities. What can I tell people other than that if you have invested in Dubai, you investment is safe. The only thing people have to bear in mind is that an investment in real estate should be long term.

In fact, if you look at the long term, Dubai is the best place for any investment because of the support and the strength of the system. The investor has nothing to worry about. The projects will be completed and they have a secure investment.

A buyer should always check his cash-flow and use professionals while deciding on where to invest. But I will say with all my strength: invest in Dubai’s real estate.

Khalfan Al Kaabi: Board Member, ADCCI, and Chairman, Ascorp

Sheikh Mohammed’s statements have reassured many local and foreign investors who were scared by the fallout of crises in the US, Europe and Asia. The UAE needs two things to overcome the world financial crisis. First is the availability of liquidity. The real estate sector needs money on time to finish ongoing projects.

The second is strong government support to big financial institutions, especially banking and real estate, in light of the collapses seen in several countries.

Wasim Saifi: Chief Executive, Tamweel

The fundamentals of the UAE real estate market are very strong. There is no problem in the supply-demand factor. Demand is continuing with respect to new jobs in the region; plus we are seeing increased delays in project execution that will keep demand afloat.

The second concern for us today is the credit availability in the market. We have seen recently tight liquidity conditions but the UAE Central BankUAE Central Bank is taking steps to mitigate that by introducing rate cuts. Liquidity will improve.

The sentiment of the market is the most important and we reassure investors that they have nothing to worry about. The recent merger talks between AmlakAmlak and TamweelTamweel are not because of credit crunch in the UAE or in the region but to create one big giant establishment. TamweelTamweel’s investments are totally localised, whether it comes to who we lend to or the properties we lend to. We have come together to create one big giant lending corporation.

David Savage: Managing Director, Al Habtoor Leighton

Our business is not being affected by the global crises. The impact will be on smaller developers but it will be far less than the international markets.

Aaref Hejres: Chief Executive, Diyar Al Muharraq, Bahrain

Stock market and property investors in the Gulf need not worry about the current market situation and sub-prime crisis in the United States and financial meltdown in Europe because we are following a different business model in the region.

As far as the property market is concerned, investors such as Diyar Al Murarraq and Kuwait Finance HouseKuwait Finance House are bullish because there is a shortage of housing units in the Gulf. Despite the current crisis affecting property prices in the US, property prices in the region are going up. We have strong control over speculators.

Abdul Azis Glenjawi: Managing Director, Manchester Real Estate

Sheikh Mohammed’s statement that the economy of Dubai and the UAE is strong came at the right time. He pointed out that investors in the UAE realise the ability of the local economy to remain firm through the crises that the global economies are going through. He expected that the rate of new investments in Dubai will increase to take advantage of opportunities that are still available.

So far, there is no sign that the local economic situation has been affected by the global crisis, especially in the real estate sector, which still generates big revenues. What has happened on stock exchanges cannot be considered an index of the economy, because stock markets are the most fragile and are affected more quickly than other sectors.

BR Shetty: Chief Executive, NMC Group

Trust, trust and only trust can protect you from this global crisis. Have trust in the local market, and have trust in the leadership that develops policies for the sbaility of the economy. We have trust and therefore are doing good business with 40 per cent annual growth.

Some greedy people have been withdrawing their investments and money due to lack of trust in the local economy. With my own experience of business in the country, the UAE is the safest place to invest. We see more and more foreign investors entering into the market. We see more and more joint venture companies and projects taking place in the UAE. this is because the country is safe for investors, thanks to the leadership.

Mohammed Ali Yasin: chief Executive, Shuaa Securities

The statement of His Highness Sheikh Mohammed bin Rashid Al Maktoum is very important and will have a positive effect on sentiment. The government has been quiet on the issue of the crisis gripping Western Banks, with most comments locally coming from either businessmen or the Central BankCentral Bank.

A side effect has been the withdrawal of foreign liquidity from our markets, which has stretched our financial system, but the economy remains very strong. Banks do not want to lend to each other and further measures have to be taken to get liquidity moving again. Once this happens, people’s fears will be calmed and the focus can return to maintaining the present economic cycle.

Robert Burnett: Vice-President, Hill International

I am not sure if the economic crisis that began in the United States and set off a global chain reaction was entirely due to financial reasons or due to fear. The market has reacted irrationally even to the support provided to the banks and a lot of it is a pure panic scenario. I do not think that it will affect the UAE in the same way.

A reasonable number of major developers who have their projects on hand will continue to go ahead. Also, UAE developers who have announced projects outside the country will continue to go ahead. A few projects might be held up or stopped but I think that the currect crisis is not as serious as the past market scenarios that we have seen such as the dot.com crash.

KV Shamsuddin: Director, Barjeel Geojith Securities

My business experience in the UAE in the past 38 years shows Dubai has witnessed and overcome several global crises, especially September 11 and the Middle East war. From all these crisis situations, Dubai has got some opportunities for growth and development and emerged stronger. I fully welcome His Highness Sheikh Mohammed’s statement. There are sceptics but very soon they will be proved wrong. In my view, India, Brazil, Russia and the GCCGCC countries will emerge stronger as a powerful economic block. And in the GCCGCC, Dubai will be the leader and the centre that others will follow.

Kamal Vachani: Director, Al Maya Group

I am extremely happy about this statement from His Highness Sheikh Mohammed. It reiterates the fact that investors like us are putting their money in safe hands.

Dubai has always been different from other markets and even if there is any problem, Dubai will get out of it smartly. I believe everything will go smoothly and the markets are bound to recover from the assurance of Sheikh Mohammed. We have invested a lot of money in the property market and our confidence in the market has once again been reiterated.

By Yazad Darasha

© Emirates Business 24/7 2008

Kippreport » Kipp’s Blog » Who is going to live in all those houses?

Kippreport » Kipp’s Blog » Who is going to live in all those houses?: “Who is going to live in all those houses?”

original published www.Kippreport.com , October 9th, 2008

Cityscape Dubai is huge, and Kipp was really impressed with the creativity and the effort put into making the stands.

But the first question we were tempted to ask was: Who’s actually going to live in these houses? While it is true that people are pouring into the city (according to official data last year, some 292,000 more people became Dubai residents in just one year), just skimming through the exhibition makes you realize that the city’s property builders are hoping to house thousands more.

As one show-goer asked us on the way back from the exhibition, once the real estate boom is over and people stop flipping properties, who is going to live here?

Any ideas?

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.

Banks cut mortgage lending limit by up to 25% – Banking & Finance – ArabianBusiness.com

Banks cut mortgage lending limit by up to 25% – Banking & Finance – ArabianBusiness.com

by Amy Glass , Arabian Business, October, 08, 2008

UAE banks and home finance firms have cut their loan to value ratios by as much as 25 percent as the global credit crunch continues to tighten its grip on regional markets.

Tamweel and Amlak, the biggest Islamic mortgage lenders in the UAE, have both dropped their loan to value ratio in the last two weeks. Tamweel has lowered its maximum amount from 90 to 75 percent while rival Amlak has dropped its loan to value ratio from 90 to 65 percent.

“The base case has always been between 70-80 percent and anything in the 90 percent range was on a promotional basis, we have now stopped the promotion,” Nabil Alwan, head of marketing & product development at Tamweel told Arabian Business.

The deepening global credit crisis has forced governments to bail out banks as liquidity dries up. Last week the US approved a $700bn plan to prop up its financial institutions while the UK today announced that its own banks would get an $87bn lifeline. Last month the UAE central bank pumped $13.6bn into the UAE banking system in a bid to ease the impact of the liquidity crunch.

Lenders are lowering mortgage rates as credit tightens and home price growth slows.

In September HSBC Middle East lowered its loan to value ratio from 80 to 70 percent. Lloyds TSB, which currently lends a maximum of 80 percent against villas and 70 percent against apartments, is also expected to lower its rates next week, according to one of its mortgage advisors.

Emirates NBD, the Gulf’s largest lender by assets, on Wednesday announced it would offer fewer large loans and long-term repayment schemes in a campaign to encourage responsible lending after the global credit crunch.

“Large loan amounts and long repayment periods that can place a considerable strain on the borrower will be minimized through this process,” the bank said in a statement on its website.

Banks cut mortgage lending limit by up to 25% – Banking & Finance – ArabianBusiness.com

Banks cut mortgage lending limit by up to 25% – Banking & Finance – ArabianBusiness.com

by Amy Glass , Arabian Business, October, 08, 2008

UAE banks and home finance firms have cut their loan to value ratios by as much as 25 percent as the global credit crunch continues to tighten its grip on regional markets.

Tamweel and Amlak, the biggest Islamic mortgage lenders in the UAE, have both dropped their loan to value ratio in the last two weeks. Tamweel has lowered its maximum amount from 90 to 75 percent while rival Amlak has dropped its loan to value ratio from 90 to 65 percent.

“The base case has always been between 70-80 percent and anything in the 90 percent range was on a promotional basis, we have now stopped the promotion,” Nabil Alwan, head of marketing & product development at Tamweel told Arabian Business.

The deepening global credit crisis has forced governments to bail out banks as liquidity dries up. Last week the US approved a $700bn plan to prop up its financial institutions while the UK today announced that its own banks would get an $87bn lifeline. Last month the UAE central bank pumped $13.6bn into the UAE banking system in a bid to ease the impact of the liquidity crunch.

Lenders are lowering mortgage rates as credit tightens and home price growth slows.

In September HSBC Middle East lowered its loan to value ratio from 80 to 70 percent. Lloyds TSB, which currently lends a maximum of 80 percent against villas and 70 percent against apartments, is also expected to lower its rates next week, according to one of its mortgage advisors.

Emirates NBD, the Gulf’s largest lender by assets, on Wednesday announced it would offer fewer large loans and long-term repayment schemes in a campaign to encourage responsible lending after the global credit crunch.

“Large loan amounts and long repayment periods that can place a considerable strain on the borrower will be minimized through this process,” the bank said in a statement on its website.

Gulf bourses tumble on global concerns – Financial Markets – ArabianBusiness.com

Gulf bourses tumble on global concerns – Financial Markets – ArabianBusiness.com

Dubai Sunday, 5th october 2008

Gulf Arab bourses fell on Sunday as investors rushed to sell stocks after a $700 billion US rescue plan failed to ease qualms over global financial turmoil.

Many foreign investors also fled stock markets in the world’s top oil exporting region as global worries over the health of the world economy escalated.”Retail investors are panicking because of what is happening in global markets. The rescue plan failed to comfort investors as they believe it will take a couple of months for its effects to be felt,” said Adel Nasr, broker at United Securities brokerage.

Real estate stocks led the drop in the United Arab Emirates, with Emaar Properties posting its sharpest one-day decline in at least two years and Aldar Properties and Sorouh Real Estate both falling more than 9 percent.

News of a proposed merger between Dubai-based Islamic mortgage lenders Tamweel and Amlak Finance pushed the shares of the rival firms lower as investors awaited more clarity on the move. “One view is the merger [talks] between Tamweel and Amlak is negative becuase it is not clear why they are doing it now, especially when we have mortgage problems globally and there is a liquidity problem in the UAE and banking sector,” said Sherif Abdelkhalek, institutions accounts manager at Beltone Financial.Banks led Kuwait’s and Qatar’s benchmark to their biggest single-day drop in three weeks.”

The $700 billion move has resolved the issue only for the short term and for the US.

It has done nothing for the rest of the world,” said Mohamed Yasin, managing director of Shuaa Securities.”

The problem we’re facing today is not an equity problem but a liquidity problem across the banking system around the world and the Gulf Arab region is part of that… the money pumped into the system is not enough.

“Saudi Arabia’s market was closed for a holiday.

Gulf bourses tumble on global concerns – Financial Markets – ArabianBusiness.com

Gulf bourses tumble on global concerns – Financial Markets – ArabianBusiness.com

Dubai Sunday, 5th october 2008

Gulf Arab bourses fell on Sunday as investors rushed to sell stocks after a $700 billion US rescue plan failed to ease qualms over global financial turmoil.

Many foreign investors also fled stock markets in the world’s top oil exporting region as global worries over the health of the world economy escalated.”Retail investors are panicking because of what is happening in global markets. The rescue plan failed to comfort investors as they believe it will take a couple of months for its effects to be felt,” said Adel Nasr, broker at United Securities brokerage.

Real estate stocks led the drop in the United Arab Emirates, with Emaar Properties posting its sharpest one-day decline in at least two years and Aldar Properties and Sorouh Real Estate both falling more than 9 percent.

News of a proposed merger between Dubai-based Islamic mortgage lenders Tamweel and Amlak Finance pushed the shares of the rival firms lower as investors awaited more clarity on the move. “One view is the merger [talks] between Tamweel and Amlak is negative becuase it is not clear why they are doing it now, especially when we have mortgage problems globally and there is a liquidity problem in the UAE and banking sector,” said Sherif Abdelkhalek, institutions accounts manager at Beltone Financial.Banks led Kuwait’s and Qatar’s benchmark to their biggest single-day drop in three weeks.”

The $700 billion move has resolved the issue only for the short term and for the US.

It has done nothing for the rest of the world,” said Mohamed Yasin, managing director of Shuaa Securities.”

The problem we’re facing today is not an equity problem but a liquidity problem across the banking system around the world and the Gulf Arab region is part of that… the money pumped into the system is not enough.

“Saudi Arabia’s market was closed for a holiday.

Dubai property to slow on global credit crisis – The National Newspaper

Dubai property to slow on global credit crisis – The National Newspaper:

Last Updated: September 25. 2008 2:43PM UAE / GMT

Profits in Dubai’s buoyant property sector could ease and sales slow as buyers become more selective in the wake of the global credit crisis, the Dubai Land Department chief said in remarks published today.

“The correction in profit levels will not be felt across Dubai as it will be limited to some areas only,” Sultan Butti bin Mijrin told a local newspaper.

“The outlook for the sector remains positive with registered property sales so far this year reaching 200 billion dirhams” he added.

In stark contrast to the United States and Europe, where the subprime mortgage crisis has already hit the property sector, Gulf property markets continue to boom on the back of high oil prices.

The property market in the UAE, the world’s fifth largest oil exporter, has been growing rapidly, pushing up property and rental prices, driving soaring inflation and raising fears that the sector is overheating.

Mr Mijrin’s comments come in the wake of a raft of reports predicting slower UAE property growth.

Credit Suisse said this week that the global market turmoil and the negative sentiment on the future of the property market in Dubai could lead to a slowdown in the region’s property sales and would also hurt demand in Abu Dhabi.

* Reuters

Gulfnews: No more frustration over project delays

Gulfnews: No more frustration over project delays:

By Suzanne Fenton, Staff ReporterPublished: September 24, 2008, 23:39
Dubai:

Investors in Dubai’s property sector will no longer have to bear with frustrating project delays, thanks to new laws that hold developers accountable.

The introduction of Law 13 and Law 14 aims to increase transparency and honesty in Dubai’s property sector, according to senior officials at Dubai’s Land department.
“After registration and approval, all the property information is entered into the system. We will know all details about the projects. There is no reason for delays,” said Mohammad Sultan Thani, Assistant Director-General of the Land Department, during a media roundtable yesterday.

Law 13 requires all developers to pre-register off-plan properties with the land department to create a full database of property transactions.

Law 14, or the mortgage law, makes it easier for banks to secure proof of land titles.

Both laws came into effect last week.

“Law 13 is very good for the market,” said Marwan Bin Galita, CEO of the Real Estate Regulatory Authority (Rera).

The main objective of Law 13 is to ensure developers register all projects before they launch sales.
“No one can release a project unless all the approvals are in place,” Bin Galita said. Under this law, approval must be sought from about five specified government bodies, including the RTA, Dewa, Dubai Municipality, Rera and the Land Department.

Sultan Butti Bin Mejrin, Director-General of the Land Department, said action will be taken against developers violating the law.

Currently, some developers demand a deposit on the unit before a sales and purchase agreement is given. Law 13 states that as soon as the deposit is paid, the sales and purchase agreement should be given immediately.

The new law also stipulates an acceptable increase in the floorplan of a unit. On completion, if the floorplan is smaller than originally agreed, the buyer is entitled to compensation.

Under Law 8, developers have six months from registration to start construction on a project. And developers are not allowed to cancel a project without first informing the Land department.
In line with efforts to increase transparency, the property court is set to begin operations in the first week of October.

Bin Mejrin estimated that 96 cases have been solved with mediation in the Land Department so far.
“The biggest challenge is collecting the data. The other challenge is the behaviour of the investor,” Bin Galita said, referring to those investors who still do transactions with unregistered developers.
Bin Galita also said that the new rent cap will be completed and announced by the end of October.
All three officials said the global financial credit crunch, negative market reports or the recent wave of investigations in Dubai will not damage the market in any way.

“I still have confidence in this market,” Bin Galita said.

Around Dh200 billion worth of transactions have been registered so far within the Land department.
Real estate

Black and white

Registered developers 826
Registered projects 1,624
Registered brokers 4,154
Certified brokers 1,300
Registered broker offices 1,772
Authorised banks 34
Registered contracts 2,176

How to buy

1) Decide what property to buy

.2) Check it is a registered developer, with an approved project

.3) Check trust account is in place.

4) If you want an agent, check that the agent is registered.

Gulfnews: No more frustration over project delays

Gulfnews: No more frustration over project delays:

By Suzanne Fenton, Staff ReporterPublished: September 24, 2008, 23:39
Dubai:

Investors in Dubai’s property sector will no longer have to bear with frustrating project delays, thanks to new laws that hold developers accountable.

The introduction of Law 13 and Law 14 aims to increase transparency and honesty in Dubai’s property sector, according to senior officials at Dubai’s Land department.
“After registration and approval, all the property information is entered into the system. We will know all details about the projects. There is no reason for delays,” said Mohammad Sultan Thani, Assistant Director-General of the Land Department, during a media roundtable yesterday.

Law 13 requires all developers to pre-register off-plan properties with the land department to create a full database of property transactions.

Law 14, or the mortgage law, makes it easier for banks to secure proof of land titles.

Both laws came into effect last week.

“Law 13 is very good for the market,” said Marwan Bin Galita, CEO of the Real Estate Regulatory Authority (Rera).

The main objective of Law 13 is to ensure developers register all projects before they launch sales.
“No one can release a project unless all the approvals are in place,” Bin Galita said. Under this law, approval must be sought from about five specified government bodies, including the RTA, Dewa, Dubai Municipality, Rera and the Land Department.

Sultan Butti Bin Mejrin, Director-General of the Land Department, said action will be taken against developers violating the law.

Currently, some developers demand a deposit on the unit before a sales and purchase agreement is given. Law 13 states that as soon as the deposit is paid, the sales and purchase agreement should be given immediately.

The new law also stipulates an acceptable increase in the floorplan of a unit. On completion, if the floorplan is smaller than originally agreed, the buyer is entitled to compensation.

Under Law 8, developers have six months from registration to start construction on a project. And developers are not allowed to cancel a project without first informing the Land department.
In line with efforts to increase transparency, the property court is set to begin operations in the first week of October.

Bin Mejrin estimated that 96 cases have been solved with mediation in the Land Department so far.
“The biggest challenge is collecting the data. The other challenge is the behaviour of the investor,” Bin Galita said, referring to those investors who still do transactions with unregistered developers.
Bin Galita also said that the new rent cap will be completed and announced by the end of October.
All three officials said the global financial credit crunch, negative market reports or the recent wave of investigations in Dubai will not damage the market in any way.

“I still have confidence in this market,” Bin Galita said.

Around Dh200 billion worth of transactions have been registered so far within the Land department.
Real estate

Black and white

Registered developers 826
Registered projects 1,624
Registered brokers 4,154
Certified brokers 1,300
Registered broker offices 1,772
Authorised banks 34
Registered contracts 2,176

How to buy

1) Decide what property to buy

.2) Check it is a registered developer, with an approved project

.3) Check trust account is in place.

4) If you want an agent, check that the agent is registered.

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/

Dubai property defies global trends – The National Newspaper

Dubai property defies global trends – The National Newspaper:

Last Updated: September 20. 2008 9:11PM UAE / September 20. 2008 5:11PM GMT

Property prices in Dubai have withstood the pressures of a tumultuous year in the industry worldwide, surging on the back of solid economic growth and a rise in construction costs, according to a survey conducted by The National.

The survey found that the prices of villas increased faster than those of offices and apartments, posting a 76 per cent jump in the year to last month, while office prices rose 74 per cent and apartments 63 per cent. Office prices have increased faster than apartments over the past year, with record highs in Downtown Burj Dubai and Tecom.

Analysts said the increase in prices could be attributed to the country’s solid economic growth, an influx of expatriates seeking new job opportunities, rising construction costs sparked by steady inflation in raw materials and a labour shortage. Analysts said they anticipated further price increases in the sector. “You’d expect to see prices grow in Dubai and in the UAE in general, but at what rate we are not quite sure yet,” said Vincent Easton, the head of sales at Sherwoods, a property agency.The survey looked at developments in 16 major investment zones in Dubai which spanned a range of price levels. The intention of the survey was to follow up prices of residential and commercial properties on a monthly basis.The survey was compiled in association with the National Bank of Abu Dhabi, Al Mal Capital, Colliers International, Better Homes, Hamptons International and Sherwoods, all of which provided property sales data. The National also intends to track the sale prices of some residential and commercial properties in Abu Dhabi on a monthly basis, although the capital’s secondary market is still in its infancy.mailto:infancy.ngillet@thenational.ae

Mumbai News – Mumbai Mirror Online – Dynasty Zarooni to float a city on water in Dubai, BUSINESS, Mumbai News, Mumbai newspaper,Current Affairs,Latest news,Mumbai Directory,City Portal,Mumbai,city,Bombay,destination,Web,Internet

Mumbai News – Mumbai Mirror Online – Dynasty Zarooni to float a city on water in Dubai, BUSINESS, Mumbai News, Mumbai newspaper,Current Affairs,Latest news,Mumbai Directory,City Portal,Mumbai,city,Bombay,destination,Web,Internet: “Dynasty Zarooni to float a city on water in Dubai”

Mumbai Mirrow September 17, 2008

On August 23, Mumbai Mirror had carried a story about the alleged investigations being carried out by a government agency in Dubai into complaints against real-estate firm Dynasty Zarooni.

On further investigations, we found that the allegations were not true. Kabir Mulchandani, the 35-year-old chairman of Dynasty Zarooni explains why he is in the eye of controversy:

• Mumbai Mirror: What made you shift your base from India to Dubai, and how difficult was it, business-wise, to relocate to Dubai and start from scratch?

Kabir Mulchandani: On a trip to Dubai in July 2004, I witnessed the beginnings of the process of creating one of the finest master-planned cities of our time. I immediately felt a desire to be a part of such a unique phenomenon. So in October 2004, I moved to Dubai and set up my company, Dynasty Enterprises Inc.

The total transparency and speed of transactions in a tax-free environment provided Dynasty Enterprises the opportunity to grow its profits by over 20,800 per cent in three years.

Then, in September 2007, we merged with the real estate group of Mr Hilal Al Zarooni.

Mr Zarooni was owner of a construction and development company, which had over 30 years of experience in developing projects and the retail of luxury goods in the UAE. The merged entity, Dynasty Zarooni Group, created the largest privately-owned investment company in the UAE.

The value of projects of Dynasty Zarooni group, which have been developed; are under development; and have been successfully invested and disposed off are over Rs 26,000 crores and in the process, investors of Dynasty Zarooni Group have made returns of over Rs 7,500 crores.

• MM: This paper recently carried a story about allegations made against your company which later turned out to be false. Do you see any plan by your adversaries in this campaign?

KM: Success has no friends. During the merger there were certain senior executive(s) in the company who felt insecure about their position in the merged entity.

Once the merger was effected, the covert operations of these executives came to light, along with details of other fraudulent activities being carried out by them.

These elements have constantly been working against the interests of ‘Dynasty Zarooni Group’ and have spared no efforts to create fraudulent and fabricated documents, which have found their way into the Indian media.

All allegations that have been given some credence by the fraudulent documents are, therefore, false and baseless. In fact, the Dynasty Zarooni Group has been given a clean chit by the The Real Estate Regulatory Agency (RERA), a body under Land Department, Government of Dubai.

• MM: Who are your competitors? What prospects do you see for your real-estate firm there?

KM: Our unique business model has helped us in fulfilling a niche requirement in the UAE market.

As such, we do not have direct competitors in the market. We already have strategic alliances with Al Fajer Properties LLC, managed by His Highness Sheikh Maktoum Hasher Al Maktoum, a member of the ruling Maktoum family; Business Bay LLC; Dubai Properties; Green Emirates Properties; Hydra Properties LLC; Mazaya Real Estate LLC and many more. All of the above are government, quasi government or listed entities and we are their preferred distribution partners.

The outlook for our company in the UAE real estate market continues to be bullish and we are now embarking on a Rs 30,000 crores project comprising over 6 million square feet in creating a prime new city on the water.

Istithmar suspends two executives – The National Newspaper

Istithmar suspends two executives – The National Newspaper:

Tom Ashby
Last Updated: September 14. 2008 3:09PM UAE / September 14. 2008 11:09AM GMT

Istithmar World, the investment company owned by the Dubai Government through Dubai World, has suspended two of its most senior executives who have been arrested as part of a corruption inquiry by the Dubai authorities.“In light of the ongoing investigations of Adel al Shirawi and Feras Kalthoum in relation to activities during their previous positions at another company, Istithmar World confirms that Adel al Shirawi has been suspended from the position of vice chairman of Istithmar World and Feras Kalthoum has been suspended from the position of chief financial officer of Istithmar World,” the company said.

It added that Mr Shirawi was no longer a member of the board of directors.Both of the Istithmar executives formerly held positions in Tamweel, whose deputy chief executive, Abdullah Nasser Abdullah, was detained last week. Mr Shirawi is the former chief executive of Tamweel and Mr Kalthoum was Tamweel’s former head of finance.

The Dubai Government has acknowledged that it is involved in wide-ranging attempts to eliminate corruption in the property and banking sectors to shore up investor confidence. Seven senior businessmen, including one chief executive, have been arrested since the investigation began in March, but no one has yet been charged.
tashby@thenational.ae

Istithmar suspends two executives – The National Newspaper

Istithmar suspends two executives – The National Newspaper:

Tom Ashby
Last Updated: September 14. 2008 3:09PM UAE / September 14. 2008 11:09AM GMT

Istithmar World, the investment company owned by the Dubai Government through Dubai World, has suspended two of its most senior executives who have been arrested as part of a corruption inquiry by the Dubai authorities.“In light of the ongoing investigations of Adel al Shirawi and Feras Kalthoum in relation to activities during their previous positions at another company, Istithmar World confirms that Adel al Shirawi has been suspended from the position of vice chairman of Istithmar World and Feras Kalthoum has been suspended from the position of chief financial officer of Istithmar World,” the company said.

It added that Mr Shirawi was no longer a member of the board of directors.Both of the Istithmar executives formerly held positions in Tamweel, whose deputy chief executive, Abdullah Nasser Abdullah, was detained last week. Mr Shirawi is the former chief executive of Tamweel and Mr Kalthoum was Tamweel’s former head of finance.

The Dubai Government has acknowledged that it is involved in wide-ranging attempts to eliminate corruption in the property and banking sectors to shore up investor confidence. Seven senior businessmen, including one chief executive, have been arrested since the investigation began in March, but no one has yet been charged.
tashby@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.

Rera and Emcredit to profile realty buyers – Sent Using Google Toolbar

Rera and Emcredit to profile realty buyers original published emiratesBusiness 24-7

A new financial product to share information about individual real estate buyers with sellers in the country’s property market is being developed by the Real Estate Regulatory Agency (Rera) and the UAE’s credit bureau Emcredit.

Under the system, called “Property Profile Solution”, the credit history and credit worthiness of buyers will be available to real estate and property companies to enable them to make sounder financial decisions about how and whom to sell. Emcredit will gather information about a buyer from his/her home country and will be in touch with other credit bureaus worldwide for this purpose.

The information thus gathered will be restricted and not available in the public domain, said Zaid Kamhawi, Chief Business Officer of Emcredit. “We are still waiting for a federal law to be passed regarding this matter. We hope it will be passed by the end of this year. Right now it is under review,” he said.

According to Emcredit, the Property Profile Solution will be provided to the real estate market through real estate agencies, mortgage providers, conveyors, evaluators and other realty industry players. “The solution will be based on Rera’s inputs which will include access to information, such as who owns a particular property, thus getting to the bottom of the information of individual property owners in Dubai,” Kamhawi said.

Rera became a member of Emcredit in April. “Rera will make sure the right information is shared. Some of that information will be important, such as a buyer’s details, but this will not be for everyone,” said Mohammed Sultan Al Thani, Assistant Director-General of the Dubai Land Department.

Emcredit will ensure a balance between protecting the privacy of the individual and facilitating the flow of information. “When a lender enquires about a borrower, we will make sure we get the consent of the borrower before delivering the report,” said Kamhawi.

Emcredit is targeting the first quarter of 2009 to release the Property Profile Solution into the real estate market.

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.

Rera and Emcredit to profile realty buyers – Sent Using Google Toolbar

Rera and Emcredit to profile realty buyers original published emiratesBusiness 24-7

A new financial product to share information about individual real estate buyers with sellers in the country’s property market is being developed by the Real Estate Regulatory Agency (Rera) and the UAE’s credit bureau Emcredit.

Under the system, called “Property Profile Solution”, the credit history and credit worthiness of buyers will be available to real estate and property companies to enable them to make sounder financial decisions about how and whom to sell. Emcredit will gather information about a buyer from his/her home country and will be in touch with other credit bureaus worldwide for this purpose.

The information thus gathered will be restricted and not available in the public domain, said Zaid Kamhawi, Chief Business Officer of Emcredit. “We are still waiting for a federal law to be passed regarding this matter. We hope it will be passed by the end of this year. Right now it is under review,” he said.

According to Emcredit, the Property Profile Solution will be provided to the real estate market through real estate agencies, mortgage providers, conveyors, evaluators and other realty industry players. “The solution will be based on Rera’s inputs which will include access to information, such as who owns a particular property, thus getting to the bottom of the information of individual property owners in Dubai,” Kamhawi said.

Rera became a member of Emcredit in April. “Rera will make sure the right information is shared. Some of that information will be important, such as a buyer’s details, but this will not be for everyone,” said Mohammed Sultan Al Thani, Assistant Director-General of the Dubai Land Department.

Emcredit will ensure a balance between protecting the privacy of the individual and facilitating the flow of information. “When a lender enquires about a borrower, we will make sure we get the consent of the borrower before delivering the report,” said Kamhawi.

Emcredit is targeting the first quarter of 2009 to release the Property Profile Solution into the real estate market.

Western realty investors turning away from Gulf – Sent Using Google Toolbar

Western realty investors turning away from Gulf

Western investors have cooled on Gulf property markets, leaving the scene for local billionaires at least until global credit conditions ease – or markets in the region become more open and predictable.

In Dubai, Abu Dhabi and Kuwait, it is domestic investors who are again calling the shots in real estate, now that debt-starved British and United States property buyers have refocused on other areas they see as cheaper and more competitive.

“Given current economic conditions, US and British institutions are taking a lot of convincing to splash out in the Gulf,” said Fadi Moussalli, a director in Jones Lang LaSalle’s Dubai-based International Capital Group.

“There is less enthusiasm for Gulf property because foreigners are busy dealing with crises elsewhere,” Moussalli said.

Before the credit crunch, Western property buyers were making good progress in opening up fledgling Gulf property markets. But the balance of power has shifted back to local businessmen and their wealth.

Citing data from emerging markets researcher Reidin, Jones Lang LaSalle said less than a fifth of real estate purchases in Dubai in 2008 so far were made by European or US investors.

“A lot of people are [still] looking in the Middle East but it tends to be dominated by local capital,” said Charles Graham, a principal at property fund manager Europa Capital. “There is a lot of it [local investment cash] and the return requirements are for the most part less demanding than our own,” Graham said, adding he was not tempted yet to break away from Europa’s core markets to gain a foothold in the Gulf.

Capital constraints and worries at home are not the only issues driving western investors away from the Gulf. Some believe prices in hotspots like Dubai are close to peaking after years of sky-high growth, while others feel precious capital can earn higher yields closer to home.

House prices in Dubai, which have surged almost 80 per cent since the start of 2007, were likely to fall 15 per cent after a 2009 peak as massive increase in supply overwhelms demand, a Reuters poll showed.

Others are concerned that a clutch of measures to combat property price inflation, such as rental caps, trading restrictions and proposals for a property capital gains tax have made Gulf property investment risky.

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.

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

 

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.

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.”

Nakheel exec in bribery scandal named – Real Estate – ArabianBusiness.com – Sent Using Google Toolbar

Nakheel exec in bribery scandal named – Real Estate – ArabianBusiness.com

The senior Nakheel executive embroiled in a bribery scandal has been named in media reports as Walid Al Jaziri, the company’s general manager of sales.

Al Jaziri is currently being questioned by Dubai police, UAE daily Gulf News reported on Friday.

Nakheel, part of state-owned conglomerate Dubai World, would not confirm whether Al Jaziri is being questioned, but said one of its employees is under investigation.

“As a result of this internal audit process, the company can confirm that a member of staff is being interviewed by the authorities,” Nakheel said in a statement.

“The allegation of financial irregularities is in relation to the acceptance of sums paid to an employee by third parties.”

London-based magazine MEED said on Friday that a criminal case was brought against a senior Nakheel executive this month for alleged financial irregularities.

“The company can confirm that no embezzlement has taken place within Nakheel,” Nakheel said.

Dubai Public Prosecution was closed on Friday and a court official did not answer his mobile phone.

Nakheel CEO Chris O’Donnell declined to comment on the case when contacted by Reuters.

The news comes a day after a probe surfaced involving former employees of mortgage lender Tamweel and months after investigations began into alleged irregularities by executives at Dubai Islamic Bank and its affiliate Deyaar.

Tamweel’s former CEO and head of investments are being probed for alleged wrongdoing, their current employer Istithmar World said on Thursday.

Police arrest Adel Al Shirawi
UPDATE 2: Tamweel says it is unaware of investigation into dealings of former chief executive.

Property firm’s fury over gloomy Dubai report – Real Estate – ArabianBusiness.com – Sent Using Google Toolbar

Property firm’s fury over gloomy Dubai report – Real Estate – ArabianBusiness.com

Dubai-based Union Properties says it is seeking ways to take action against Morgan Stanley, claiming a recent report had a negative impact on its share price.

Morgan Stanley published a report predicting property prices in Dubai could drop by 10 percent by 2010 as an oversupply of housing floods the market.

The investment bank assigned Union Properties, the developer behind plans for F1-theme parks, a base case price of 5.7 dirhams per share.

Since the report’s release, the company’s share prices have fallen from 5.68 dirhams to 4.89 dirhams on the Dubai Financial Market.

“We’re not sure what action we can take as there are no laws against analysts. But we’ve notified the regulator and we’ll see what they decide,” Zaid Ghoul, chief financial officer of the firm told Gulf News on Wednesday.

He said Union Properties met with Morgan Stanley in February but nothing was discussed regarding a future report.

Ghoul dismissed the report’s claims that housing prices would drop 10 percent as it was not sector-specific.

“The report neglected areas such as affordability and mortgage penetration,” Ghoul said.

He also said the report was too general in its analysis and failed to differentiate between the different sectors of the real estate market.

Dubai property prices ‘to fall 10% by 2010′
Research claims sharp correction in market is likely as supply of real estate increases.

Stronger dollar ‘will deter Dubai speculators’ – Real Estate – ArabianBusiness.com – Sent Using Google Toolbar

Stronger dollar ‘will deter Dubai speculators’ – Real Estate – ArabianBusiness.com

Fears over the health of Dubai’s real estate sector are overblown and a stronger dollar would help rid the market of speculative buyers, Al Mal Capital’s head of equity research said on Thursday.

Prices are likely to ease in 2010 after rising another 10-15 percent in the coming year, but developers like Emaar will still be making a significant profit at those levels, Robert McKinnon, the investment bank’s managing director of equity research, told Arabian Business.

“I think a 10 percent decline would actually not be a problem for this market. The market has been up 10 percent in the last four months,” he said after latest figures for July showed a 40 percent increase in real estate prices compared to the same month last year.

Last week, a report from Morgan Stanley predicted a ten percent correction in Dubai’s booming real estate market over the next two years.

“In 2009 and into 2010 I think prices should remain strong, but I don’t think they’ll keep rising at the same pace,” McKinnon said.

The difficulty of getting a demographic view of income levels in the UAE makes prices harder to predict than in other, more developed markets.

“We use GDP per capita, which doesn’t really account for the fact that a lot of wealth could be sitting in the top two percent of the population, who don’t need four or five houses,” McKinnon said.

But comparing rental yields with mortgage costs suggests price gains should start to moderate next year.

The rising US dollar, now at its highest level in almost six months, has sparked fears of international investors exiting the Dubai market, where a significant number of buyers come from the UK, Europe, Asia and Russia.

Along with the benefit of dampening inflation, McKinnon believes a stronger greenback could help curb speculative activity since it would favour domestic buyers looking to buy a house to live in.

“[The rise] is not yet a trend for the dollar, but if it continues it could be a positive in terms of encouraging the type of buyer that we want buying in the market rather than speculative buyers,” he said.

Rental yields in Dubai remained flat in July versus June, at a median rental yield of 6.8 percent, down from 7.8 percent in July last year, according to a research report from Al Mal Capital released today.

The decline in rental yields over the last year has been driven mainly by higher prices as the median rent in Dubai rose by roughly 23 percent in the period, it said.

The bank’s Dubai real estate price index indicated a year over year price appreciation of 39.9 percent in the residential market in July, while prices in the commercial segment rose by 40.5 percent.

Residential property prices were 0.7 percent higher in July on the month, while the less seasonal office market rose 3.7 percent.

Dubai property prices ‘to fall 10% by 2010′
Research claims sharp correction in market is likely as supply of real estate increases.

Dubai Property Prices – the truth – Real Estate – ArabianBusiness.com

Dubai Property Prices – the truth – Real Estate – ArabianBusiness.com:

According to Malcolm Gladwell’s latest book quite often we have discovered the truth of a situation long before we are aware or able to communicate it.

In Blink Gladwell uses a game to demonstrate this. In one example, his test subjects are shown four packs of cards, face down. Two are red and two are blue. Participants must choose the correct combination of cards to make money.

After an average of 50 tries, participants realize that blue cards are the means to greater wealth over time. Red cards are much riskier, and the down side is much bigger than any up.”

The point of the game is not to find out how quickly participants can rationalise the game, but how quickly they subconsciously understand its dynamics.Participants were wired up to see the effect of the game on their heart rates. After ten cards or less, red cards induced palpitations.
Blue cards produced no results at all.In other words the test subjects subconsciously understood the game very quickly, but it took their brain another thirty to forty rounds to be able to explain it – and their actions.George Soros, the $9bn man who made a large chunk of his fortune betting the UK would crash out of the ERM used to suffer back aches – which was his body’s way of telling him he need to change his market holding positions. This is a quote from his son, Robert speaking to Soros’ biographer, Michael Kaufman: “My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking, Jesus Christ, at least half of this is bullshit. I mean, you know the reason he changes his position on the market or whatever is because his back starts killing him. It has nothing to do with reason. He literally goes into a spasm, and it’s his early warning system…

“He is… living in a constant state of not exactly denial, but the rationalisation of his emotional state.”Last week I wrote a column on Dubai property prices. It sparked a lot of debate, with many of you giving infinitely superior rationalisations of why I was wrong – and in far fewer cases right – regarding Dubai’s housing market. My argument was simple: a lack of decent places to live and work in a booming Middle East give Dubai scarcity value – and that means there was more room for property prices to rise.Most of you disagreed.What we are all doing is trying to justify a gut reaction as to where we are on the above chart of what a bubble looks like over time. Some of you may argue we are not on it at all.I have borrowed this chart from Soros’ latest book, The New Paradigm of Financial Markets. To fully explain the curve I would need to go into Soros’ philosophy regarding reflexivity – which would be worthwhile, but not within this column.

Instead, I will explain what the stages look like. The graph or market takes off at point 2.
This is when a trend is recognised (house prices are rising), and is reinforced by a bias (the belief that prices are undervalued and will continue to rise). In a bubble this results in valuations considerably higher than ‘equilibrium’ – the normal balance of supply and demand.Normally the checks and balances of a market will mean at some point ‘testing’ will occur (houses on the Palm fell briefly in 2006 as premiums sky rocketed, and the market wobbled in realisation that many units would not be completed for several years – stage 2). In most cases the set back will return a market to equilibrium.

In a bubble, however, the testing is shrugged off and both the trend and the bias continue (3), normal rules of the market are jettisoned and prices take off (4). It’s at this point, investors are said to be irrationally exuberant, and believe things really can be different this time.According to Soros, there is always a moment of truth, however – stage 5 – when “reality can no longer sustain the exaggerated expectations”.

In period 6 people continue to play the game but no longer believe in it.

Point 7 is reached when the trend turns downwards (house prices fall) and the bias inverses (property prices are over valued), leading to a “catastrophic” downward acceleration (8), also known as a crash.

According to this model the boom-bust cycle starts slowly (prices rise gently), accelerate gradually and then fall steeper than they have risen.Given Malcolm Gladwell’s argument that subconsciously we understand a situation before we can provide a full justification of what is happening, I would like to conduct a little experiment.

What I would like to do is use the Internet to draw your collective subconscious together to pinpoint where as a group ArabianBusiness.com readers think we are on this chart.

I will publish the median score, and if enough of you take part, your best arguments to justify each position.Those of you who argue that we are at stage 1 are arguing we are not in a bubble at all, but that prices are rising to a genuine equilibrium.

Those of you who argue we are in stage 2 are arguing prices have only just begun their journey, and the market will at some point test and correct itself.Those of you who say we are on points 3-5 are arguing that we are in a bubble, but we have not reached the peak yet.

Those of you who say we are at poing 6 are arguing we no longer believe in the valuations – and that a crash is imminent.Very few of us are blessed with a back pain that helps us predict the future.

However, what we have that Soros does not is the Internet, and the ability to draw together the gut instincts of thousands. Comment on this article and we will together form an overview of how much leg room property prices have to run. Make sure you detail whether you are talking about Dubai in particular, or the region as a whole.

Comments : http://www.arabianbusiness.com/index.php?option=com_content&view=article&id=527200:dubai-property-prices—the-truth

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.

Dubai property watchdog launches Chohan probe – Real Estate – ArabianBusiness.com

Dubai property watchdog launches Chohan probe – Real Estate – ArabianBusiness.com: “Dubai’s real estate watchdog is investigating the Dubai operations of a disqualified UK property director whose firm collapsed, owing creditors around $137m.

Balinder Chohan was founder and sole shareholder of UK Land Investments Limited (UKLI) until it went into administration in April. Now he is CEO of a Dubai-registered company called UK Capital Investments Group (UKCIG), which according to its website offers land and property investment opportunities in the UK and Dubai.

“We are looking at UKCIG’s activities in selling plots in the UK, because we have been approached by investors in Dubai wanting to know how solid their UK investments are,” Marwan Bin Ghalita, CEO of the Real Estate Regulatory Authority, told Arabian Business on Wednesday.”

“We are looking at [Chohan’s] activities and… we must be sure that he has approval and the right licences and everything,” he added.Bin Ghalita stressed that RERA currently had no concerns over any UKCIG developments in the UAE itself.Chohan was disqualified in April 2008 for four years for his “unfitness to act as company director”, according to Companies House records.

The ban followed a three-year investigation by the Financial Standards Authority.Investors in the UK bought small plots of farmland from UKLI in the expectation that it would attain planning permission for housing and increase in value as a result. However, none of the land ever gained planning permission, and the FSA charged that UKLI operated as “an illegal collective investment scheme” and denied “investors protection for their money”.

On its website, Dubai-based UKCIG lists itself as an affiliate of UKLI and says that it has “a substantial land bank under management in the wealthy south east of the UK”.The website adds: “The land has been identified by personnel with in-depth planning expertise as having a strong probability of being rezoned from agricultural to developmental use… The UK’s tight planning controls result in a substantial uplift in value when land achieves allocation.”Before it went into administration, UKLI records indicate that approximately 5,000 plots of land were sold to investors, spread over several locations.On Tuesday Arabian Business reported that Chohan had loaned himself almost $1.9 million from UKLI company funds before it went into administration, according to official documents.

The revelation is contained in correspondence obtained by Arabian Business from the former auditors of London-based UK Land Investments Limited, now in administration.In January 2007, UK-based auditors Moore Stephens resigned after expressing concerns about $17.6 million worth of loans made to sister companies and subsidiaries in the UK and abroad – and named Balinder, or ‘Bally’ Chohan as the personal recipient of an “unlawful” $1.872 million loan from UKLI.“The company had loaned 553,002 pounds ($1.1 million) to Bally Chohan. As he was then a director of the company, the loan was unlawful,” the auditor said in a formal letter explaining its decision. “

By September the loan had risen to £957,732 ($1.9 million).”“There could be claims of up to 70 million pounds ($137 million),” Fiona Watson of administrators Deloitte told Arabian Business on Tuesday. “However, we have yet to agree the status of the investors and we are in the very early stages of the administration process.”

Dubai property watchdog launches Chohan probe – Real Estate – ArabianBusiness.com

Dubai property watchdog launches Chohan probe – Real Estate – ArabianBusiness.com: “Dubai’s real estate watchdog is investigating the Dubai operations of a disqualified UK property director whose firm collapsed, owing creditors around $137m.

Balinder Chohan was founder and sole shareholder of UK Land Investments Limited (UKLI) until it went into administration in April. Now he is CEO of a Dubai-registered company called UK Capital Investments Group (UKCIG), which according to its website offers land and property investment opportunities in the UK and Dubai.

“We are looking at UKCIG’s activities in selling plots in the UK, because we have been approached by investors in Dubai wanting to know how solid their UK investments are,” Marwan Bin Ghalita, CEO of the Real Estate Regulatory Authority, told Arabian Business on Wednesday.”

“We are looking at [Chohan’s] activities and… we must be sure that he has approval and the right licences and everything,” he added.Bin Ghalita stressed that RERA currently had no concerns over any UKCIG developments in the UAE itself.Chohan was disqualified in April 2008 for four years for his “unfitness to act as company director”, according to Companies House records.

The ban followed a three-year investigation by the Financial Standards Authority.Investors in the UK bought small plots of farmland from UKLI in the expectation that it would attain planning permission for housing and increase in value as a result. However, none of the land ever gained planning permission, and the FSA charged that UKLI operated as “an illegal collective investment scheme” and denied “investors protection for their money”.

On its website, Dubai-based UKCIG lists itself as an affiliate of UKLI and says that it has “a substantial land bank under management in the wealthy south east of the UK”.The website adds: “The land has been identified by personnel with in-depth planning expertise as having a strong probability of being rezoned from agricultural to developmental use… The UK’s tight planning controls result in a substantial uplift in value when land achieves allocation.”Before it went into administration, UKLI records indicate that approximately 5,000 plots of land were sold to investors, spread over several locations.On Tuesday Arabian Business reported that Chohan had loaned himself almost $1.9 million from UKLI company funds before it went into administration, according to official documents.

The revelation is contained in correspondence obtained by Arabian Business from the former auditors of London-based UK Land Investments Limited, now in administration.In January 2007, UK-based auditors Moore Stephens resigned after expressing concerns about $17.6 million worth of loans made to sister companies and subsidiaries in the UK and abroad – and named Balinder, or ‘Bally’ Chohan as the personal recipient of an “unlawful” $1.872 million loan from UKLI.“The company had loaned 553,002 pounds ($1.1 million) to Bally Chohan. As he was then a director of the company, the loan was unlawful,” the auditor said in a formal letter explaining its decision. “

By September the loan had risen to £957,732 ($1.9 million).”“There could be claims of up to 70 million pounds ($137 million),” Fiona Watson of administrators Deloitte told Arabian Business on Tuesday. “However, we have yet to agree the status of the investors and we are in the very early stages of the administration process.”

Dubai’s off-plan property premiums surge

Dubai’s off-plan property premiums surge

By Anjana Kumar on Sunday, August 03, 2008 All eyes are on completion and delivery. Properties nearing completion are commanding the highest premium in Dubai. Villas and apartments are generating premiums of as much as 70 per cent to 200 per cent a year – far higher than the 10 per cent to 30 per cent for completed properties. For Jumeirah Lake Towers the increase has been not less than 70-80 per cent in the past six to eight months, even before handover began. These premiums are one of the highest in the market . At the Villa project, a development by Dubai Properties and Mizin in Dubailand, prices have appreciated sharply in the past two years. The price per sq ft was Dh550 to Dh650 at the end of 2006 for a three-bedroom villa. Now it is in the region of Dh1,000 to Dh1,050 a sq ft – a 90 to 95 per cent increase. A five-bedroom villa was Dh3.6m in December 2006; now it is Dh8m – a little over 100 per cent in a year and a half. For villas at the Al Barari project in Dubailand, the premium has been 200 per cent on off-plan for two years. “The villas initially selling at Dh12m are now going for Dh36m,” said Basel Al Kasem, CEO, Al Basel Group. Within off-plan properties, some of the Dubai apartments have been earning a higher return on investment than villas depending on the location and developer, say brokers.

Dubai’s off-plan property premiums surge

Dubai’s off-plan property premiums surge

By Anjana Kumar on Sunday, August 03, 2008 All eyes are on completion and delivery. Properties nearing completion are commanding the highest premium in Dubai. Villas and apartments are generating premiums of as much as 70 per cent to 200 per cent a year – far higher than the 10 per cent to 30 per cent for completed properties. For Jumeirah Lake Towers the increase has been not less than 70-80 per cent in the past six to eight months, even before handover began. These premiums are one of the highest in the market . At the Villa project, a development by Dubai Properties and Mizin in Dubailand, prices have appreciated sharply in the past two years. The price per sq ft was Dh550 to Dh650 at the end of 2006 for a three-bedroom villa. Now it is in the region of Dh1,000 to Dh1,050 a sq ft – a 90 to 95 per cent increase. A five-bedroom villa was Dh3.6m in December 2006; now it is Dh8m – a little over 100 per cent in a year and a half. For villas at the Al Barari project in Dubailand, the premium has been 200 per cent on off-plan for two years. “The villas initially selling at Dh12m are now going for Dh36m,” said Basel Al Kasem, CEO, Al Basel Group. Within off-plan properties, some of the Dubai apartments have been earning a higher return on investment than villas depending on the location and developer, say brokers.

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

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

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”.

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.

Update Property Scandal Al Areifi Tower Dubai Marina

7DAYS General and Local News Dubai Abu Dhabi UAE Buyers are sold out

Buyers are sold out

Last Updated : Wednesday 23 Jul, 2008 –

People who paid tens of thousands of dirhams for apartments in a new tower block have told 7DAYS of their shock on discovering the building has been sold TWICE.Melanie Mouton says she paid dhs250,000 for a studio apartment in Al Areifi Marina Tower three years ago, before it was built.But she says Saudi developer, Al Areifi Real Estate Company, then sold the entire building to another company.

According to Mouton, from South Africa, Al Areifi offered to pay back her dhs250,000 plus a percentage – which she says is not enough.

Mouton told 7DAYS: “They said there had been a dispute with the builder and they would give us our money back plus 25 per cent – but I said: ‘No, I just want my apartment’.”

Then they said 50 per cent. But this was for something I paid for three years ago – I can buy nothing in Dubai with that money now because the prices have gone up so much.”Mouton says she found out earlier this year that the 35-floor building had been sold, but since then she has heard little about the fate of her apartment.Another investor,

New Zealander Zaid Al-Hilali, said he was told the tower would not be completed due to “financial difficulties”.”

We were told by the developer to take our money otherwise he would close down and leave the country,” he said.”

Then we heard apartments had been sold twice – once to us and once to another company which bought the whole tower.”At least 50 of us have had our apartments sold twice and most of us are going to court.”

A director for Al Areifi did not want to discuss the matter with 7DAYS, but confirmed the situation.The investors say both the Real Estate Regulatory Agency and Dubai Land Department are aware of the situation. Both were unavailable for comment yesterday.

paul.mclennan@7days.ae

Dubai Property Price Index

original published
http://www.ameinfo.com/163117.html

Demand for waterfront properties

We have seen great demand for waterfront properties such as Dubai Marina, The Palm Islands, Jumeirah Beach Residence, Jumeirah Lake Towers, Jumeirah Islands and even the Green Community, which will include a lake with apartments surrounding it,’ Reis adds.

Confirming this trend, one of the most expensive properties sold in June is on the Palm Jumeirah, going for a slightly over Dhs35.5m.

In rental terms this is also at the top end of the spectrum. The average annual return for landlords hovers around Dhs432,000 (Dhs885,000 at the top end of the market) for villas, and an average of Dhs190,000 (with an upper limit of Dhs450,000) for apartments.

The new commercial districts are also seeing leaps in popularity, especially with the added kudos of having regional landmarks on your doorstep, as the trend of living closer to the place of work continues – especially with the amenities catering to leisure pursuits close at hand. ‘The Old Town development at Burj Dubai is another current favourite,’ concludes Reis. ‘

With its central location alongside the world’s tallest tower and its close proximity to what will be the world’s largest mall, offering a range of entertainment and leisure facilities at your fingertips, it’s easy to see why people are snapping up the apartments.’

Full Dubai property price tables
Dubai apartments for sale
Dubai apartments for rent
Dubai villas for sale
Dubai villas for rent

The Dubai average price index

The information contained within this report was provided by Better Homes.

The index provides minimum and maximum property sales prices along with size in square feet to act as a guide to the property size. Prices are based solely on recent transactions by Better Homes in each area and should therefore be used as a guide only. Average price is determined by calculating the total value of recent sales within each area and then dividing that figure by the total number of property sales. Standard Deviation of Price is an average of the prices of sold properties minus the highest and lowest values, to give a more accurate value.

This is done because prices in some areas vary so much it can skew results, so extreme values are removed and then the average is recalculated, giving a better reflection of the average price in an area.

Dubai Property Price Index

original published
http://www.ameinfo.com/163117.html

Demand for waterfront properties

We have seen great demand for waterfront properties such as Dubai Marina, The Palm Islands, Jumeirah Beach Residence, Jumeirah Lake Towers, Jumeirah Islands and even the Green Community, which will include a lake with apartments surrounding it,’ Reis adds.

Confirming this trend, one of the most expensive properties sold in June is on the Palm Jumeirah, going for a slightly over Dhs35.5m.

In rental terms this is also at the top end of the spectrum. The average annual return for landlords hovers around Dhs432,000 (Dhs885,000 at the top end of the market) for villas, and an average of Dhs190,000 (with an upper limit of Dhs450,000) for apartments.

The new commercial districts are also seeing leaps in popularity, especially with the added kudos of having regional landmarks on your doorstep, as the trend of living closer to the place of work continues – especially with the amenities catering to leisure pursuits close at hand. ‘The Old Town development at Burj Dubai is another current favourite,’ concludes Reis. ‘

With its central location alongside the world’s tallest tower and its close proximity to what will be the world’s largest mall, offering a range of entertainment and leisure facilities at your fingertips, it’s easy to see why people are snapping up the apartments.’

Full Dubai property price tables
Dubai apartments for sale
Dubai apartments for rent
Dubai villas for sale
Dubai villas for rent

The Dubai average price index

The information contained within this report was provided by Better Homes.

The index provides minimum and maximum property sales prices along with size in square feet to act as a guide to the property size. Prices are based solely on recent transactions by Better Homes in each area and should therefore be used as a guide only. Average price is determined by calculating the total value of recent sales within each area and then dividing that figure by the total number of property sales. Standard Deviation of Price is an average of the prices of sold properties minus the highest and lowest values, to give a more accurate value.

This is done because prices in some areas vary so much it can skew results, so extreme values are removed and then the average is recalculated, giving a better reflection of the average price in an area.

Peter Riddoch, CEO Damac Properties, Pt 2/3 | Face to Face

Link Video Interview :http://www.ameinfo.com/161216.html
Peter Riddoch, CEO Damac Properties

In the interview with Peter Riddoch, CEO Damac Properties, we look at its recent controversy surrounding Palm Springs on Jebel Ali and how this has affected the company’s reputation, and discuss other on-going projects in Dubai

Property Scandal Schon Properties Dubai Lagoon – Latest Action: Termination Letters

Update Property SCandal SchonProperties Dubai Lagoon

latest comment Skyscrapercity Forum

TERMINATION LETTER

Dear All:

I have been to the RERA and had a meeting with Ms.Khoula Al Madani she is located on the 1st floor. I was informed by her that they have asked Schon Properties to issue the buyers a new revised payment plans. If the building hasn’t been started yet (according to the zones) she told me We must wait for revised payment plans and ignore any Termination Letter .

Instead of giving us the revised payment plans ….Schon Properties has started issusing Termination Letters to the buyers which has two meanings:

1.) To Sell the apartments on the higher current market prices.
2.) To collect the balance amount due. Without any promises on delivery dates.

RERA have told them to issue the New Payment Plans Instead Schon is delaying to issue the new payment plans Instead they have issued the Termination Letters

Which RERA doesn’t know about.

I would request everyone who has recieved the Termination Letter to get in touch with her or Mr.Marwan.

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 residents sickened by sewage – Healthcare – ArabianBusiness.com

Dubai residents sickened by sewage – Healthcare – ArabianBusiness.com: “Sewage has flooded an area of Dubai’s International City for the second week in a row, infuriating the development’s residents, UAE daily Gulf News reported on Thursday.

An entire car park, roads and pavements are now submerged under the sewage, which was still rising up from the drains on Wednesday, the newspaper said.

The sewage is now just a metre from the entrances of some residential buildings in the ‘England’ cluster, near one of the main roads, while the car park is also flooded with the waste water.”

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.””

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.”

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.”

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.

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?

Damac Dubai – Investigation – Personal data of thousands compromised

original published: Arabian Business
http://www.arabianbusiness.com/521308-damac-clients-information-offered-on-ebay

Dubai 06.June.2008
Damac Properties has launched an investigation into how thousands of its customers personal details ended up for sale on Ebay for 750 pounds ($1,466), a senior company official told ArabianBusiness.com on Thursday.

Ten copies of a database with personal information on over 8,000 of the Dubai-based developer’s customers were put on the website on May 28.

According to the posting, the database includes information such as email addresses and phone numbers of “investors, VIPs, agents and high net worth individuals based in Dubai and across the world”.

“This database is highly sought after by every financial institution in the region and is worth millions,” the posting says.

The posting has since been removed following a flurry of complaints by investors.

Nile McLoughlin, senior vice president of corporate communications at Damac, said the company took customer confidentiality “very seriously” and a “comprehensive investigation” was taking place.

“We are aware of the auction taking place on Ebay and we have had the item removed from the site,” McLoughlin said.

“A comprehensive investigation is taking place and the relevant action will be taken as an outcome of this investigation.”

The incident comes less than two months after the saga surrounded the high profile cancellation and subsequent reinstatement of Damac’s Palm Springs project on the Palm Jebel Ali.

Original offer Ebay was:

Damac Ebay !!!!

---

Some joker is selling on ebay an excel file with all Damac’s customers details on!!!!!

http://cgi.ebay.co.uk/DUBAI-PROPERTY…QQcmdZViewItem

‘I have the most exclusive database of over 8,000 customers, investors, VIP’s, agents and high net worth individuals based in Dubai and across the world who have already invested and want to invest further in the UAE and region properties market.

List includes customers of Damac Properties the middle easts larget private developer!

This database is complete with contact details, email addresses, phone numbers and personal information.

The databse comprises of people who have invested in the properties market in Dubai and middle east.

This database is highly sort after by every financial institution in the region and is worth millions.

This offer is genuine and you will not be dissapointed. I will deliver the complete database in excel format’

Dubai – The purchase of a freehold property does not qualify for a resident visa

original published GulfNews
http://archive.gulfnews.com/business/Real_Estate_Property/10216379.html

Buyers of freehold properties in Dubai are accusing developers of depriving them of ‘promised’ residence visas – a tool some developers still use to lure investors.

Developers are passing the buck to master developers Nakheel, Emaar and Dubai Properties.
Residents of International City’s Riviera District are worried that there is a breach of contract since the residency visas have not been issued as contractually promised over a year ago.

One resident said, “We feel there has been a breach of contract somewhere as we have not been sold what we were told at the outset.”

Registration
According to residents, the developer of the Riviera Lakeview Apartments, B&M, has been involved in a dispute with master developer Nakheel over registration, and this has delayed visa proceedings.

However, an official at B&M said that residents must understand that they cannot have residency visas until their units have been officially registered with the Land Department and the title deeds produced.

We have approached the Land Department for the registration. Nakheel says the units have to be registered first and then they will provide the residency visas,” Abdul Samad, deputy general manager of B&M, said.

Another source said that there had been internal confusion in the Land Department regarding the wording of the registration, which has delayed the entire process.

There was an internal dispute within the Land Department over whether the units should be registered as net area or gross area,” he said.

The source said the Land Department finally chose to use the net area, meaning all investors had to be notified again and measurements redone.

There are 221 units in the Riviera Lakeview Apartments, all pending registration. “Upon the purchase of a Nakheel property, we will provide customers the basis for sponsorship, although the grant of a residency visa is still subject to the rules, requirements and procedures of the Immigration and Naturalisation Department,” a Nakheel spokesperson said.

Samad said the whole registration process should be resolved in “a matter of months”.
A resident of Central Business District 21, also located in International City, is also still waiting for his title deeds and residency visa.

He said, “I don’t think they [master developers] had any idea what they were getting themselves into.

A statement from Emaar said, Emaar Properties provides residency visas for Emaar homeowners in line with the rules and regulations of the Dubai Department of Naturalisation and Residency Department.”

Officials of the Dubai Naturalisation and Residency Department – the visa issuing authority – were unavailable for comment.


Rules How it worksFreehold ownership in selected areas of Dubai was first introduced in May 2002, sparking the real estate boom.

 

The law states,
“If the homeowner has no alternative means of sponsorship for a residence visa, the first owner may be sponsored by your master developer [Nakheel, Dubai Properties or Emaar] for residency in Dubai, UAE, subject to the applicable immigration laws of the country.”

The purchase of a freehold property apparently does not automatically qualify for a resident visa, officials say.

Mohammad Bin Braik, chief operating of Dubai Properties Group, said, “Resident visas for freehold buyers are subject to conditions which include that you cannot seek employment or run a business and one would assume the buyer has sufficient funds to support himself.”

Blair Hagkull, managing director for the Middle East at Jones Lang LaSalle, said people should not rely on the master developer for their residency visas. “
Most people in Dubai are active in the workplace and so have a residency visa through their employer. But there is a select group which is not active.

Damac Palm Spring Scandal – Investors are still uniformed about Details

May, 12. 2008

Damac recently wrote to investors to confirm the construction of Palm Springs on the new plot allocated by Nakheel. Without doubt, RERA has rightfully flexed its muscles to ensure that the Palm Springs development has become re-instated. The Palm Springs Group sees the re-instatement as an opportunity for all involved to promote a healthy, transparent, and collaborative environment in the Dubai real estate industry.

“We are delighted that RERA, Nakheel, and Damac are now unanimous in their support of the development and we look forward to working collaboratively with Damac in the successful execution of the project.”

Furthermore, the letter to Damac has asked for details of the re-instated project, including apartment plans and construction timelines, as well as monthly updates through to project completion.

It is heartening to hear the CEO of RERA, Marwan bin Ghalita recently state that “we cannot let people promise and not deliver in Dubai” – this sends out the right signal to investors and developers alike and bodes well for the continued the growth of Dubai real estate industry.

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.

April 14, 2008
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.

How PR works in Dubai

original published: http://www.kippreport.com/article.php?articleid=1163

Apr 24, 2008

Back in the golden age of the British Empire, the Royal Navy frequently engaged in an unsubtle but effective recruitment strategy known as “press ganging,” which basically consisted of hitting a person over the head and dragging him by his heels onto a boat.

As tricky as it can be to persuade a man to abandon the comforts of home for the perils of scurvy, seasickness and giant squids, getting a Dubai journalist to attend a press conference presents challenges of its own. Indeed, it seems only a matter of time before we start to see coded messages from Shanghaied hacks slipped into the local business pages: “A Dubai developer ForTheLoveOfGodHelpMe today announced…”

The problem is, the city is in the grips of an epidemic, a particularly virulent strain of Announcement Fatigue. It’s reached the point where many reporters won’t get out of bed for anything less than a cure for cancer, and then they’ll expect you to be handing out limited-edition “Cure for Cancer” mobile phones at the door.

Last year, however, the Middle East Public Relations Association removed this delicate cudgel from the hands of local PR reps, strongly suggesting a $50 limit on press conference incentives. For the unfortunate souls who have nothing more to announce than, say, a new suntan lotion, an audience consisting of three crickets, two tumbleweeds and a guy with a mop is considered a coup.

Given the situation in Dubai, then, it was remarkable to see more than 50 local journalists milling around on a lawn outside the Jumeirah Beach Hotel recently, almost an hour before an upcoming announcement from the Dubai Multi Commodities Centre, nibbling nuts and sipping juice without so much as a rolled eyeball.

DMCC is planning to build an enormous pearling-themed complex on Antarctica, one of the islands of The World. The hook is that the Pearls of Arabia project aims to revive Dubai’s ancient pearling tradition, establishing the emirate, once again, as the global heartland of the trade.

read more:
http://www.kippreport.com/article.php?articleid=1163

Low customer loyalty for Gulf developers – survey

Low customer loyalty for Gulf developers – survey

original published: http://v5.test.arabianbusiness.com/516852-low-customer-loyalty-for-gulf-developers—survey?ln=en

by Amy Glass on Thursday, 17 April 2008

Half of real estate investors in the GCC do not have a preferred property developer, the Arabian Business Property Survey 2008 has found.

The survey results indicate low customer loyalty for Gulf developers, with 49.46% of all people who have purchased property in the GCC stating they do not favour any particular property group.

The surprising findings appear to raise questions about overall customer satisfaction with services offered by GCC developers, and the quality levels of properties purchased.

Of those property investors who did state a developer preference, Emaar Properties investors were the most loyal, with 24.51% of GCC investors placing the developer as their preferred choice. Nakheel was the closest contender to Emaar, receiving 8.28% of votes.

Aldar Properties (3.05%), Dubai Properties (2.51%) and Deyaar (2.18%) were the only other GCC developers to register a percentage above 2%.

Opinion is also split on the level of building quality in the Gulf, as 48.18% of those who had purchased property in the GCC said they believed the building quality was below international standards.

However 49.65% of investors felt building quality was equal to international standards. Only 2.17% felt quality was above international standards.

Data from the survey has also found the overwhelming majority of property investors believe real estate within the GCC is overpriced.

Figures from the study have revealed 45.31% of respondents believe property prices are far too expensive, while 42.78% said prices are moderately overpriced.

Only 10% of survey participants feel prices are fair and only 1.83% believed prices are low, the survey found.

comments of this article:

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Low customer loyalty for Gulf developers – survey

Low customer loyalty for Gulf developers – survey

original published: http://v5.test.arabianbusiness.com/516852-low-customer-loyalty-for-gulf-developers—survey?ln=en

by Amy Glass on Thursday, 17 April 2008

Half of real estate investors in the GCC do not have a preferred property developer, the Arabian Business Property Survey 2008 has found.

The survey results indicate low customer loyalty for Gulf developers, with 49.46% of all people who have purchased property in the GCC stating they do not favour any particular property group.

The surprising findings appear to raise questions about overall customer satisfaction with services offered by GCC developers, and the quality levels of properties purchased.

Of those property investors who did state a developer preference, Emaar Properties investors were the most loyal, with 24.51% of GCC investors placing the developer as their preferred choice. Nakheel was the closest contender to Emaar, receiving 8.28% of votes.

Aldar Properties (3.05%), Dubai Properties (2.51%) and Deyaar (2.18%) were the only other GCC developers to register a percentage above 2%.

Opinion is also split on the level of building quality in the Gulf, as 48.18% of those who had purchased property in the GCC said they believed the building quality was below international standards.

However 49.65% of investors felt building quality was equal to international standards. Only 2.17% felt quality was above international standards.

Data from the survey has also found the overwhelming majority of property investors believe real estate within the GCC is overpriced.

Figures from the study have revealed 45.31% of respondents believe property prices are far too expensive, while 42.78% said prices are moderately overpriced.

Only 10% of survey participants feel prices are fair and only 1.83% believed prices are low, the survey found.

comments of this article:

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2nd largest Property Deveolper Dubai Deyaar faces investigationc- CEO jailed

The CEO of Deyaar, Dubai’s second-largest property developer by market value, has been detained and is under investigation for alleged financial irregularities, the company and Dubai authorities said.

Deyaar said in a statement on Thursday that Chief Executive Officer Zack Shahin had resigned, without giving a reason.

“He’s been detained,” Deyaar Chairman Nasser al-Shaikh told Reuters on Thursday. “There is an investigation by the Public Prosecution … he did something he was not a supposed to do.”

An official at the Dubai Public Prosecution confirmed Shahin had been detained and was under investigation.

Shaikh would not be more specific about the allegations saying only that they are “financial” in nature.

“From our side we saw a few things that raised our concern and we are now going through the legal system for the benefit of our company and our shareholders,” Shaikh said.

“Whatever is going on right now, it will not have any real impact on Deyaar profitability,” Shaikh said.

Shares of Deyaar were down 2.13% at 8:26am GMT.

The company named Adnan Tareen, head of finance, as acting CEO. Shahin could not immediately be reached for comment on his mobile phone. (Reuters)

More information about the case:
in GulfNews
http://www.gulfnews.com/business/Real_Estate_Property/10206298.html

Buy Back Complaints Al Fajer Properties – Damac – Nakheel Comments … to "Buy-Back" Practice Devloper Dubai Property Market

http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?HeadlineID=5606

Richard says
Dear Developer (from the smallest upwards)of Dubai, May we remind you that we, the investors from Europe, have still to bear 30% losses by the currency convertion (Euro/AED) from today to the original purchase dates 2004-2006. What you are going to do cannot be called “buying back”. Buying back means: You have to pay investors the actual market price from today if you wish to call your practice “buying back” If we remeber right, we bought and invested in apartments, villas or units of buildings, not in your companies. If your calculation has failed, we the investors are not the ones who have to understand that your profit is not the one that you once thought. To shift every risk now to the former investors is not the way how it works in global economy.

Jeff says
With Real Estate prices falling 30 percent in the last year from Europe to California (with New York being the only major exception) how long can the desire to live in the Middle East continue? Having lived through a few Real Estate bubbles in Miami there is an economic max before people move on. I have properties in Miami that were over $2 million US a year ago and can be picked up for less than $1 million.

more comments:

http://www.arabianbusiness.com/516597-more-firms-look-to-quit-projects-as-costs-soar

Damac Properties appears poised to formally announce the reversal of its decision to axe the Palm Springs project, according to investors.

original published: Arabian Business 10.April 2008

http://www.arabianbusiness.com/516215-damac-properties-appears-poised-to-formally-announce-the-reversal-of-its-decision-to-axe-the-palm-springs-project

Investors have said they stand to lose million of dirhams after the Dubai-based developer cancelled the 25-storey beachfront development last month on the Palm Jebel Ali, offering compensation below current market value.

The saga has been widely reported in the international media, creating bad publicity for Damac in key markets it is looking to attract investment from, such as the UK.

Investors said they received calls earlier this week from Damac informing them the Palm Springs project is to be re-instated, according to a statement on the website of a Palm Springs investors group.

The project will be located on the new plot provided by master developer Nakheel, with some possible changes to building plans, the statement says.

Niall McLoughlin, senior vice president of corporate communications at Damac, said in a statement emailed to ArabianBusiness.com on Thursday that the developer would shortly announce a decision on the project.

“We have been in contact with our customers in relation to Palm Springs and will be making a formal statement in due course. As soon as I am in a position to comment, we will contact you directly,” McLoughlin said, without giving further details.

Damac had said the cancellation of the project five years after launch was due to “redevelopment of the plots”, stating that the development “cannot be situated on the re-allocated plot”.

However, this explanation was brought into question when Palm Jebel Ali master developer Nakheel said it had informed investors of changes to the masterplan over 10 months ago.

A group of more than 60 UK-based investors are threatening to take Damac to court unless the developer reverses its decision and continues with construction.

The group, which last month stormed the London launch of Damac’s Jumeirah Village South project, has given the developer until April 11 to change its mind or face legal action.

Damac also changed its mind about the cancellation of its Haz Tower in Business Bay on Wednesday, after investors complained about its plans to pull the project, UAE daily Gulf News reported.

The Haz Tower was launched in July with a value of around 240 million dirhams. The tower is now worth an estimated 660 million dirhams, the newspaper said.

Reason for axing Palm Springs questioned
Palm Jebel Ali master developer Nakheel ‘very surprised’ at Damac project cancellation.

Damac Properties appears poised to formally announce the reversal of its decision to axe the Palm Springs project, according to investors.

original published: Arabian Business 10.April 2008

http://www.arabianbusiness.com/516215-damac-properties-appears-poised-to-formally-announce-the-reversal-of-its-decision-to-axe-the-palm-springs-project

Investors have said they stand to lose million of dirhams after the Dubai-based developer cancelled the 25-storey beachfront development last month on the Palm Jebel Ali, offering compensation below current market value.

The saga has been widely reported in the international media, creating bad publicity for Damac in key markets it is looking to attract investment from, such as the UK.

Investors said they received calls earlier this week from Damac informing them the Palm Springs project is to be re-instated, according to a statement on the website of a Palm Springs investors group.

The project will be located on the new plot provided by master developer Nakheel, with some possible changes to building plans, the statement says.

Niall McLoughlin, senior vice president of corporate communications at Damac, said in a statement emailed to ArabianBusiness.com on Thursday that the developer would shortly announce a decision on the project.

“We have been in contact with our customers in relation to Palm Springs and will be making a formal statement in due course. As soon as I am in a position to comment, we will contact you directly,” McLoughlin said, without giving further details.

Damac had said the cancellation of the project five years after launch was due to “redevelopment of the plots”, stating that the development “cannot be situated on the re-allocated plot”.

However, this explanation was brought into question when Palm Jebel Ali master developer Nakheel said it had informed investors of changes to the masterplan over 10 months ago.

A group of more than 60 UK-based investors are threatening to take Damac to court unless the developer reverses its decision and continues with construction.

The group, which last month stormed the London launch of Damac’s Jumeirah Village South project, has given the developer until April 11 to change its mind or face legal action.

Damac also changed its mind about the cancellation of its Haz Tower in Business Bay on Wednesday, after investors complained about its plans to pull the project, UAE daily Gulf News reported.

The Haz Tower was launched in July with a value of around 240 million dirhams. The tower is now worth an estimated 660 million dirhams, the newspaper said.

Reason for axing Palm Springs questioned
Palm Jebel Ali master developer Nakheel ‘very surprised’ at Damac project cancellation.

The case Damac – Dubai Property Sales Purchase Agreements – What is Force Majeure in General

Damac, said:

“We understand that this is a serious and unfortunate situation, but one which is completely outside Damac Properties’ control.

Dubai-based lawyer, Edward Sunna, head of construction and engineering, Al Tamimi and Company, who has been approached by the investors group to represent them, agreed that a ‘force majeure’ is mainly called for in the event of a natural disaster like an earthquake, hurricane or similar forces of nature.”I’m not sure what Damac intends to do but calling for a ‘force majeure’ in this situation is a little strange. I don’t see them getting very far with this,” he said.Damac declined to make any further comment on the story

Force majeure are almost always included in sales and purchase agreements Dubai developers.

For example Terms and Conditions Nakheel ( a wide definition of Force Majeure)

17. FORCE MAJEURE out of a contract from Nakheel

“Event of Force Majeure” means an act of God including but not limited to fire, flood, earthquake, windstorm or
other natural disaster; act of any sovereign including but not limited to war, invasion, act of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, nationalisation, requisition, destruction or damage to property by or under the order of any government or public or local authority or imposition of government sanction embargo or similar action;labour dispute including but not limited to strike, lockout or boycott; interruption or failure of utility service including but not limited to electric power, gas, water or telephone service; failure of the transportation of any personnel, equipment, machinery or material required by the Seller for completion of the Building; delay for any reason by any contractor or subcontractor in carrying out their works or any matter; or cause beyond the control of the Seller.

Should an Event of Force Majeure have occurred that has delayed the Completion Date, the Seller shall upon becoming aware of such delay promptly notify the Buyer and inform the Buyer of the revised Completion Date or an estimate of the duration of the delay, followed by a revised Completion Date when same can be determined.

Should an Event of Force Majeure delay the Completion Date by a period of in excess of one (1) year the Buyer may elect to terminate this Agreement by notice to the Seller and the Seller shall refund all monies paid by the Buyer. (means=without any compensation !!!)
____________________________________________

or see “Force Majeure” in a full contract Nakheel:
http://residents.internationalcity.ae/images/download_attachmenta550.asp?ArticleCode=ART17460&AttachmentID=ART00004

But Force Majeure should not be used as a “catch all phrase” in contracts.

A study shows how this clause should be used in a proper contract.
http://www.mallesons.com/publications/Asian_Projects_and_Construction_Update/Asian_Projects_and_Construction_Update_26_October_2002.pdf
original published :
http://www.mallesons.com/publications/Asian_Projects_and_Construction_Update/6366675W.htm

Introduction

Force majeure clauses are almost always included in project agreements. However, they are rarely given much thought unless and until one or more parties seek to rely on them. However, in the current global environment it is appropriate to examine their application.

What is force majeure?

Force majeure is a civil law concept that has no real meaning under the common law.

However, force majeure clauses are used in contracts because the only similar common law concept – the doctrine of frustration – is of limited application because for it to apply the performance of a contract must be radically different from what was intended by the parties.

In addition, even if the doctrine does apply, the consequences are unlikely to be those contemplated by the parties.

An example of how difficult it is to show frustration is that many of the leading cases relate to the abdication of King Edward VIII before his coronation and the impact that had on contracts entered into in anticipation of the coronation ceremony.

In circumstances where a project company wants to minimise any opportunity for extension of time claims it could consider not including a force majeure clause and instead relying on the doctrine of frustration.

However, before making a determination to rely on frustration a project company must consider how frustration is applied in the relevant jurisdiction and, in particular, whether the common law application has been altered by legislation.

Given force majeure clauses are creatures of contract their interpretation will be governed by the normal rules of contractual construction.

Force majeure provisions will be construed strictly and in the event of any ambiguity the contra proferentem rule will apply.
Contra proferentem literally means “against the party putting forward”. In this context, it means that the clause will be interpreted against the interests of the party that drafted it.

The parties may contract out of this rule.

The rule of ejusdem generis which literally means “of the same class” may also be relevant.

In other words, when general wording follows a specific list of events, the general wording will be interpreted in light of the specific list of events.
In this context it means that when a broad ‘catch-all’ phrase, such as ‘anything beyond the reasonable control of the parties’, follows a list of more specific force majeure events the catch all phrase will be limited to events analogous to the listed events.

Importantly, parties cannot invoke a force majeure clause if they are relying on their own acts or omissions.

General force majeure provisions

Traditionally, force majeure clauses, in referring to circumstances beyond the control of the parties, were intended to deal with unforseen acts of God or of governments and regulatory authorities.

More recently, force majeure clauses have been drafted to cover a wider range of circumstances that might impact on the commercial interests of the parties to the contract.

It is now quite common for force majeure clauses to deal not only with impossibility of performance but also with questions of commercial impracticability.

By itself the term ‘force majeure’ has been construed to cover acts of God1; war and strikes2, even where the strike is anticipated; embargoes, refusals to grant licences3; and abnormal weather conditions4.

The underlying test in relation to most force majeure provisions is whether a particular event was within the contemplation of the parties when they made the contract.

The event must also have been outside the control of the contracting party.

Despite the current trend to expressly provide for specific force majeure events, case law actually grants an extensive meaning to the term force majeure when it occurs in commercial contracts.

There are generally three essential elements to force majeure:

it can occur with or without human intervention;

it cannot have reasonably been foreseen by the parties; and

it was completely beyond the parties control and they could not have prevented its consequences.

For instance, Bailhache J. in Matsoukis v Priestman5 held that force majeure covered dislocation of business owing to a universal coal strike, access to machinery, but not bad weather, football matches or a funeral. I

n Lebeaupin v Crispin6 force majeure was held to mean all circumstances beyond the will of man, and which it is not in his power to control. Therefore, war, floods, epidemics and strikes are all cases of force majeure.

There is an important caveat to the above and that is, parties cannot invoke a force majeure clause if they are relying on their own acts or omissions.

Additionally, the force majeure event must be a legal or physical restraint and not merely an economic one.

‘Circumstances beyond the control of the person concerned’

The phrase ‘circumstances beyond the control of the person concerned’ has not been subject to detailed examination by the courts.

The courts simply assume that the phrase is given its common and everyday meaning.
The phrase has been judicially held to refer to occurrences which neither the person concerned, nor any person acting on their behalf to do the act or take the step, could prevent.

Recent practice has significantly expanded the scope of such clauses to cover a wider range of circumstances that might impact on the commercial interests of the parties to the contract.

Reynolds JA in Caltex Oil v Howard Smith Industries Pty Ltd9 stated that the phrase ‘other circumstances beyond the control of the parties’ would include an industrial strike.
Therefore, specific reference to ’strikes’ may be unnecessary in force majeure provisions where the above phrase appears, although it is still advisable to include it.

The Australian unreported case of Asia Pacific Resources Pty Ltd v Forestry Tasmania (No. 210) noted that as a general rule a party cannot invoke a force majeure clause due to ‘circumstances beyond the control of the parties’ which, to the knowledge of the party seeking to rely upon the clause, were in existence at the time the contract was made.

This case must be contrasted against Reardon Smith Line Ltd v Ministry of Agriculture, Fisheries and Food11 which held that there was no settled rule of construction that prevents a party to a force majeure clause from relying on events in existence at the time the contract was entered into as events beyond that party’s control.

Kerr J in Trade and Transport Inc v Iion Kaiun Kaisha Ltd, The Angelia12 referred to Reardon Smith and then stated that ordinarily a party would be debarred from relying upon a pre-existing causes as an excepted peril if:

(i) the pre-existing cause was inevitably doomed to operate on the contract; and

(ii) the existence of facts which show that the excepted cause is bound to operate is known to the parties at the time of contract, or at least to the party who seeks to rely on the exception;

His Honour then added as an alternative to (ii);

(iii) if the existence of such facts should reasonably have been known to the party seeking to rely upon them and would have been expected by the other party to the contract to be so known.

Given the above, it seems that causes beyond the control of the parties which were known at the date of contracting may excuse performance only where they were of a temporary nature and are not doomed to operate on the contract.

The way forward

If a project company decides it wants to include a force majeure provision in its project agreements the best way to limit the application of that clause is by defining a closed list of events that constitute force majeure for that contract.

In other words, it should not include the catch all “any event beyond the reasonable control of the parties including….”.
Given force majeure is a creation of contract, the courts are unlikely to expand on the definition given by the parties.

Obviously, this restricted approach is most appropriate when the counterparty has time critical obligations eg: in an EPC contract.
However, where it is the project company that has time critical obligations eg: in an offtake agreement, the project company should adopt a more encompassing definition including the traditional catch all phrase.

Damac – "When you talk about a sports car you talk about Ferrari or Lamborghini … that is what we are targeting. That is what we want to be for real

original published http://www.reuters.com/article/MiddleEastInvestment07/idUSL2654365220070326?pageNumber=1

By Daliah Merzaban
DUBAI (Reuters) – 26.Macrh.2008

Dubai-based Damac Properties said on Monday it was considering expansion into Europe and the United States as part of plans to develop a global luxury property brand.
“When you talk about a sports car you talk about Ferrari or Lamborghini … that is what we are targeting. That is what we want to be for real estate,” Damac Chairman Hussain Sajwani told the Reuters Middle East Investment Summit in Dubai.

Damac, which has 60 projects in the Middle East worth about 100 billion dirhams ($27.2 billion), wants to acquire existing real estate firms and develop land it buys on the east coast of the United States and in Europe, Chairman Hussain Sajwani said.

“We’re looking very aggressively at these markets,” he added.

Damac had a team in Europe last week to “study the market”, and had been in negotiations for a plot of land in one European city which fell through last month, he said.

Returns are higher in the West than they are in Middle East real estate, Sajwani said.

The Burj Dubai skyscraper, billed by its developer as the world’s tallest building, sells each square foot for 2,400 UAE dirhams ($653.6), compared with 4,000 pounds ($7,844) for a square foot of prime real estate in London, Sajwani said.

“There is more to be made in the Western world than in the Middle East,” said Sajwani, whose company made sales of about 15 billion dirhams since starting in 2003, and expects sales to double this year over last.

Gulf Arab property developers are expanding outside of Dubai, the Arab world’s commercial hub, which kicked off rapid growth in real estate prices in 2002 by allowing foreigners to invest in property.

Partly state-owned Emaar Properties EMAR.DU, the Arab world’s largest property developer by market value, bought U.S. homebuilder John Laing Homes last June as part of its expansion strategy.

Sajwani shrugged off concerns the U.S. housing market is slowing, as foreclosures rise among so-called sub-prime mortgage borrowers.

“We are actively looking at North America. In one way it might not be the right time to develop the property but it may be the right time to buy a piece of land or acquire a company,” he said.
Damac, which also plans to launch real estate developments in Morocco, Tunisia, Pakistan, India and Turkey, plans to unveil a new luxury residential brand next month that will roll out 12 apartments in seven years in the region and abroad, he said.

“These apartments will be ultimate luxury. They will be the most expensive in the Middle East,” Sajwani said.

Privately held Damac’s biggest project is a $16 billion tourism project on Egypt’s Red Sea coast, which the firm will begin developing this year after receiving the 320 million square feet of land from the Egyptian government a week ago, he said.

Damac is also planning $1 billion of investments in two projects in the Saudi Arabian cities of Jeddah and Riyadh, Sajwani added.

While it has focused on growth regionally without forging partnerships, global expansion could lead to a change of strategy, he added.
“It is not easy to grow in Europe, North America and Asia without this option,” he said. “Acquisitions are on the table as we grow overseas.”

Palm Springs investors face millions in losses

original published: Arabianbusiness.com
http://www.arabianbusiness.com/515147-palm-spring-investors-face-millions-in-losses

Devastated investors in Damac Properties’ axed development on the Palm Jebel Ali are facing millions of dirhams in losses, one of the project’s investors has told ArabianBusiness.com.

The Dubai-based developer recently cancelled the much-delayed Palm Springs project five years after launch, citing “redevelopment of the plots”.

The developer has offered investors compensation of 6% annual interest on the original purchase price and the option of transferring their investment to another project with a 15% discount

Many buyers have snapped up Palm Springs units on the secondary market, meaning off an investor and not directly from the developer, paying up to a 50% premium on the original purchase price.Prior to the cancellation of the project, Palm Springs units were estimated to be worth more than double the original purchase price, according to investors.Investors are now threatening to take Damac to court if it does not reverse its decision and continue with construction.Nearly 60 UK-based investors in the project have formed a group to take on Damac, giving the developer until April 11 to reverse its decision or face legal action.London-based investor Karl Brown told ArabianBusiness.com members of the group were facing average losses on their investment ranging between 300,000-600,000 dirhams ($81,000-$163,000), depending on when they purchased their unit.Brown said he bought his Palm Springs apartment on resale in March 2006 for 1.5 million dirhams and believes the property is now valued at more than 2.2 million dirhams.However, he will only receive the original purchase price, estimated at about 1.1 million dirhams, plus 6% interest for each of the five years since the project’s launch.Brown said Damac had told him it was not the developer’s contractual obligation to refund money that was paid on resales.Brown said UK investors’ losses were compounded by the rising value of the British pound against the dirham.Many investors purchased their units when the exchange rate was 6.4 dirhams to the pound, while the exchange rate is now around 7.3 dirhams to the pound, he said.Brown said the group, the Palm Spring Investors Group, was appealing to Dubai’s Real Estate Regulatory Authority (Rera) and Nakheel, master developer of the Palm Jebel Ali, for assistance with the dispute.Damac was not immediately available for comment, but in a statement issued earlier the developer said it understood the situation was serious and unfortunate, but that it was “completely outside Damac Properties control”.“Due to redevelopment of the plots, the building forming the Palm Springs development cannot be situated on the re-allocated plot and as a result, the Palm Springs project has been cancelled, Niall McLoughlin, senior vice president of corporate communications at Damac Holding, said in the statement.“Damac is committed to its customers and in view of this cancellation, Damac Properties will provide customers an opportunity to release the investment made at Palm Springs and transfer the monies to any other project in the Damac Properties portfolio at a discounted price 15% below current market.”The 25-storey Palm Springs project had originally been planned for completion by late 2007, and buyers were already angry over repeated delays, contractual issues and complaints of poor customer service by Damac.

Comments

These are the kind of Developer that Distroy the Market Confidence
Posted by Sam Wahib, Dubai, UAE on 1 April 2008 at 17:47 UAE time

It is amazing to see the effort and amount that Damac spends on ADVERTISING…. while they do NOT spend enough effort on delivering on their promises. Other than 2 buildings in Dubai Marina, I’m not aware any othe project that was delivered out of the 50+ project they sold….In addition, and not a single Damac project has been delayed less than one year. I can not imagine a project that was supposed to be completed in 2007, just gets cancelled NOW (after the completion date). These investor must have paid in 2004, now they will just get 6% interest while they could have got 200% to 300% return if they would have invested these sums in any other project in Dubai When you deal with such developer you should look carefully at the contract, and make sure that you are covered with proper compensation should this happen to you

Update facts
Posted by Ilyas, London on 1 April 2008 at 17:00 UAE timeNo one apart from Damac is really in the wrong here, Lee talks about who should be sued, the only ones who have gone back on anything are Damac. The have been given a Plot by Nakheel, but they will obviouly get a lot more money by selling it afresh then re designing and leaving it with the original investors. I think most people cant grasp the simple con that is being carried out here – Nakheel have redesigned but have delivered on there side of giving plots – Damac want to make more money by selling at new prices so are trying t cancel peoples contracts. One thing about unavoidable delays but completely cancelling investors contracts and offering 6% per annum so then can then sell at 300% of the orginal price that is a con………..

Damac and the fun and games
Posted by Mike H on 1 April 2008 at 16:53 UAE time

Damac have been selling off plan now for 5 years. They must surely have sold 60 plus developments. In that period they have handed over 2 buildings if my memory serves me. It seems to me that its all about taking in the cash that they can and skirting around the deliverables with excuses like this. Before the escrow was introduced what was happening to all that money?Hmmm interesting. I wonder how their developments in Egypt and Jordan are faring. Maybe Palm Springs is financing those.

Palm Springs Mess
Posted by Lee, Dubai, UAE on 1 April 2008 at 15:18 UAE time

Wow! Lots of opinions on this one!!! I feel for the investors, end users, speculators, etc. who will not be receiving their property. And for those who were secondary buyers, well, these buyers could lose big time depending on the premiums they paid. But who should be sued or held accountable? -Should Damac sue Nakheel as one of the Palm Springs investors suggested? I guess they could but then Damac would never receive another plot in any Nakheel development ever again. I would be surprised if any Middle East master developers would ever want to work with Damac. Is Damac going to risk that??? I don’t think so. -And who is to say when Nakheel told Damac? I think we need Nakheel to “clear the air” and come forward with the facts on this plot and their communications/dealings with Damac.-Should previous owner’s be sued for their premiums? Who is to say they were not “tipped off” to problems and told to sell by Damac executives? I bought a property in JLT and a year later one of the representatives told me how late the project would be and that the finishes were going to be rubbish. He recommended I sell if I could which I did. If you think buyers are not gettings “tips” for when to buy or sell in this market you are being naive.Is anyone really surprised this happened? If anything I am surprised it took this long for it to happen. Developers are buying plots and less than a year later they are selling flats off plan, sometimes before master developer’s complete the infrastructure works. This was bound to happen. My wife and I bought a flat in 2005 only to have the building completely redesigned in 2006. We ended up with a flat on a lower floor because that was all that was left for us. I knew then the whole real estate game in Dubai was going to be risky until the government introduced laws to regulate the “monkey business”. But at the end of the day, this is still the wild frontier. There may be Escrow accounts, but where are the penalties for projects handed over 1, 2 or 3 years late? Who knows how this will turn out…..but I am going to sit back and watch the entertainment!

The Damac fiasco
Posted by Plam Springs Investor, UK on 1 April 2008 at 14:05 UAE time

“As stated before in this thread; sit back and watch and enjoy.” KieranWhat about the first rule of good government, of regulating the real estate industry? I’m sure you wouldn’t be sitting back and enjoying things if your local Wimpy builder did the same to you if they felt their profit margin had become too small to make it worthwhile to deliver the property you had purchased several years ago….”The Dubai Real Estate is like a gambling table, you speculate & invest. The chances of making it big is high but if you lose, you do not blame the casino, you blame your self.” The ThinkerYou have a very poor opinion of Dubai – simply a huge gambling place billing itself as being run along Islamic principles. The Sheikh of Dubai paints a very different picture of Dubai…”Don’t you people who speculate on a value of something that is not happening see that you too pump up the bubble a little too much, and are really helping the same developers whom you want to sue now?”You do not seem to understand the simple fact that Damac have renegaded on the contracts given to investors not because of any property bubble, but SIMPLY TO STEAL MONEY THAT RIGHTFULLY BELONGS TO INVESTORS. It is not as if they do not have money to pay compensation at current market rates, or do not have a plot on the Palm Jebel Ali to build the Palm Springs project.

Palm Springs
Posted by theshadow, Dubai, UAE on 1 April 2008 at 13:51 UAE time

It may not be criminal but it’s shady as you can imagine. Not only DAMAC are to blame though, the real estate industry here is equally guilty of distorting reality in their efforts to get people to buy buy buy.I just don’t see how this works though – surely if a developer announces a development and offers it for sale they’re obligated to deliver the project as advertised? If not, that says a lot about the maturity of the real estate industry here and the type of people it has attracted. I’d rather spend my hard-earned money elsewhere on something solid instead of a coloured, computer rendered bubble that might burst at any given moment for no valid reason. It really is ludicrous.

Facts
Posted by Ilyas, London on 1 April 2008 at 12:18 UAE time
Some people dont seem to understand what this is about. Nothing to do with volatile markets, because if the value had gone down that is something the Investors understand, nothing to do with workmanship, oversupply blah blah. Damac have used investors money to buy the plot, and then when the price goes through the roof they want to renege on the their committments and sell it for more.People posting on here talking about falling markets and all the rest this simply is nothing to do with the issue, investors paid for something on Palm Jebel Ali and thats what they should get. Not some shoddy excuse about a redesign.AND if the price had collapsed ofcourse Damac would then have said to the investors to buy in a redesigned palm springs, just so happens they have seen an opportunity to make more money buy selling them afresh.

First Rule of Investment
Posted by Kieran, London, UK on 1 April 2008 at 10:57 UAE time

Only fools think that high returns are not the reward for high risks…These investors can persue this claim but they need to risk having the world know they were either gullible enough to think this was a guaranteed return or thought they were party to some nefarious deal whereby their returns were guaranteed unless, of course, DAMAC or their agents gave them assurances that there would be a massive return, thereby, through that assurance, underwriting the risk.However, that may well indeed be the case. UAE sales agents (and there are so many of them these days) with their hyperbolic talk about massive returns and guaranteed investments may be advised to have their lawyers double check their publicity material and make sure their staff are trained well or this lawsuit and future ones could start to cascade down the property-boom feeding chain eating the weak.The authorities have recently, and rather belatedly, been taking steps to regulate these sales and are to be applauded for that but, unfortunately, a lot of things were said and done pre-regulation, that might come back to haunt the market.That coupled with the fact that there is a huge amount of property just now coming to completetion so the builders must be praying that their new owners are too ill educated or naiive to spot the shoddy workmanship and poor finishing prevalent in the region and launch a tidal wave of warranty claims for repairs and bringing properties up to the standard portrayed in the sales publicity. There is no evidence to suggest that most of the developers actually have the kind of solid, cash, foundations and secured credit lines to survive any major turbulence in this market, let alone to go paying out compensation back to burnt investors or aggrieved owners.Caveat Emptor and nowhere is this truer than buying “off plan”.As stated before in this thread; sit back and watch and enjoy.

Who’s to blame?
Posted by The Thinker, Dubai, United Arab Emirates on 1 April 2008 at 10:31 UAE time

Well, who is to be blamed, is it DAMAC who just promotes but never forces a investor to buy or is it the investors pouring in millions without seeing a brick on ground. There a very true old saying, ‘SEEING IS BELIEVING’ & there is a counter line that says that only the risk takers reach the top (but for the risk takers, it can be rewarding or a dive in the dump while the believers would have lost a good opportunity if it was really good later).The Dubai Real Estate is like a gambling table, you speculate & invest. The chances of making it big is high but if you loose, you do not blame the casino, you blame your self. After all, before & after investing, you believed in speculation (until DAMAC’s announcement) and took a very strategic decision.

Palm Springs mess
Posted by George, Dubai, UAE on 1 April 2008 at 09:45 UAE time

Well …If Nakheel redesigned the plots, then Damac should have either informed the investors in time, or sue/ask for compensation/alternative plot(s) of the same properties from Nakheel now. While I can feel sorry for the original investors, the ones asking for the compensation of the secondary sales are obviously not entitled to any refund beyond the original price and any interest that the developer is accepting. Their risk – as long as they thought that the value is going up, they kept quiet, right? – and their loss. They would be happy if the project went through and they had 100% returns on the investment.And, I really fail to see how a flat that is never going to be built can be valued, let alone worth millions??? Don’t you people who speculate on a value of something that is not happening see that you too pump up the bubble a little too much, and are really helping the same developers whom you want to sue now? Compound greed … great!Let’s kick back and watch … the game is on …

Palm Springs
Posted by stuart mayhead, Abu Dhabi, UAE on 1 April 2008 at 08:17 UAE time
So is this going to be when they judge the bubble to have burst? Or is it just a leak….
Damac’s action tantmount to

FRAUD
Posted by Palm Springs Investor, UK on 1 April 2008 at 04:24 UAE time

“Damac said it understood the situation was serious and unfortunate, but that it was “completely outside Damac Properties control”.”What a load of codswallop. Damac has known about the re-design of the Palm Jebel Ali for ages, and I’m sure Nakheel would have kept them informed of progress in the re-design. It’s astounding for Damac to suggest that it has ’suddenly’ learned that the original plot will not be delivered, and so has had to cancel the project. Damac seem to think that those who invested in the Palm Springs are a bunch of brainless fools who are not able to see through this LIE.If Damac are not able to honour their contracts for failure to deliver by Nakheel, then they should be suing Nakheel, rather than penalising investors with whose money Damac has had all of these years.It is extremely surprising that the Dubai authorities are not stepping in and investigating Damac, if not on investors behalf, then to safeguard the reputation and of Dubai as a safe place to invest.These latest comments by McLoughlin reveals that Damac’s business ethos is driven by greed, and I applaud Brown and the Palm Springs Investors Group for standing up to Damac’s underhand illegal tactics

London : Damac Dubai Palm Springs Investors take Aktion

Original published by PalmSprings Investorsgroup , 29.March 2008
http://damaconcovered.wordpress.com/

In the wake of it’s ‘cancelled’ Palm Springs project, Damac held an exclusive product launch of Jumeraih Village South on the 27th March 2007 at the Carlton Hotel in Kinghtsbridge, London. Little did they realise that the Palm Springs Investors Group also had plans to attend the event, not to be sucked in by false promises and glitzy presentations it has to be said, but to make the unsuspecting potential investors aware of Damac’s track record with the Palm Springs episode.

Although given very short notice, quite a few members of the Investors Group managed to be present at the event. One member of the Group told us “I went last night and met Andrew Ellis and a friend of his in the lobby and we managed to get into the presentation and spent about an hour bending the chairman’s ear voicing our complaints. I also stood up and exposed the company to whoever could hear, after a bit of fortification. This resulted in the UK Sales rep coming over to see us and he listened to what we had to say after initially trying to get us removed!“

The Palm Springs investors were also handing out leaflets to publicise the scandal (to view)

http://damaconcovered.files.wordpress.com/2008/03/flyer-1.doc

Said another investor “This is only the start, if Riddoch and Sajwani think we are going to take this lying down, then they had better re-think.“ We have to agree with this sentiment; it is in the interest of Damac to resolve this issue quickly and fairly.

After all, Palm Springs have been the most loyal supporters of Damac, having been patiently waiting for over 4 years for delivery of their apartments.

One Palm Springs investor who is a lawyer by profession said “we’d prefer to be backing Damac 100% as soon as the situation is fairly resolved, just as we have been doing all these years.” We could not have put it any better.

Original Text of the Damac Palm Springs InvestorGroup leafelets:

WHY WE WOULD NOT BUY FROM DAMAC AGAIN

On 10 March 2008 Damac Properties informed investors that it had cancelled the Palm Springs, Jebel Ali development originally launched in 2003. Not long ago in September 2006 Damac were offering 10% interest on monies invested in an attempt to get investors to pull out of the project.
Damac’s justification for cancelling the project is based on the fact that the Master Developer has re-designed the Palm, Jebel Ali and is not delivering the original plot where the Palm Springs was to be built. What Damac has conveniently forgotten to mention is that the Master Developer will be delivering to Damac a new plot on the Palm, Jebel Ali. A group of over 60 Palm Springs apartment owners are disputing the legality of using the Force Majeure clause in the contract and are drawing up plans to take Damac to court.
It is quite clear that, 5 years on from the launch of the project, faced with increased construction costs, Damac have decided to try and buy off investors under the pretext of ‘Force Majeure’. Damac’s actions are not only immoral, but we believe illegal. Instead of honouring binding contracts, DAMAC have decided to cheat investors. Although the value of the apartments bought by investors has more than doubled since the launch, Damac are offering only to return money paid plus a paltry 6%, or alternatively or a 15% discount to buy in another Damac project.
We, the Palm Springs Investors Group will be taking Damac to court in order that Damac either reverse their decision and proceed with constructing Palm Springs on Palm Jebel Ali, or they provide a like-for-like apartment at same cost and terms and conditions on a new Damac development on Palm Jebel Ali, or they provide financial compensation at current market rates for Dubai Waterfront/Palm Jebel Ali
Many investors who bought re-sale properties in Palm Springs (assigned by Damac) stand to loose premiums of up to £150,000.
We attended similar evenings to this launch and were duped into buying from Damac. We trusted and believed in Damac but strongly warn that you

DO NOT MAKE THE SAME MISTAKE AS US

Visit http://damaconcovered.wordpress.com/ For More Information

DAMAC Dubai in Dog Corner

original published 22 March 2008 at 12:30 pm
http://damaconcovered.wordpress.com/category/nakheel/

DAMAC’s attempt to ‘buy-back’ its Palm Springs project, Palm Jebel Ali 5 years after its launch will surely go down as one of DUBAI’s greatest disgraces. While Damac is not owned by the Dubai government, it presents itself around the world as ‘Dubai’. What has happened here is that Damac sold out the project 5 years ago, and cannot now build it without incurring a significant loss. It is attempting to buy out all of its customers by offering to pay them a measly 6% per annum on the sum invested. There are other Developers who find themselves in the same position, but are not resorting to these disgraceful tactics. Greedy Damac doesn’t deserve your money. A real case of ‘I will only play this game if it suits me’ and ‘expect me to go home if I am not winning’. Surely Damac are bigger than that ?

Sadly, the answer is no. Damac’s response would seem to be “no sir, we are not interested in honouring contracts given to customers who invested in Palm Springs in good faith, after all we are so big that we not give a damn about those puny people called investors”. And to make all you poor Damac clients feel even more irritated, Damac have either sold the land they were going to build Palm Springs on at a very enormous profit, or they will launch a new project – when things are ‘quieter’. Yes, this is how Damac are. Just not to be trusted. You are not valued by them. You are just an easy profit target, ready to be abandoned when they have your money. You are just potential victims of their equally disgraceful pricing strategies. This is one incident that needs to hit the international newspapers. I am not sure Sheikh Mohammad knows what is going on here. And he would NOT be happy with the damage Damac’s decision will have the hard earned, and deserved, respectable reputation of Dubai. It is time Damac were brought to book.

We await with interest for some response from HH Sheikh Mohammad, and from the Dubai authorities. The Palm Springs Investors Group do not intend to let the matter to rest until fair and proper justice is achieved.

UAE faces cement crisis

05 March 2008
The real estate boom in the UAE is set to hit a major roadblock that could seriously affect the completion of projects across the Emirates. The problem lies with companies that supply ready-mix concrete.

Representatives of these suppliers yesterday told Emirates Business that they are struggling with a huge backlog of orders due to a massive shortage in the supply of cement.

Companies have issued their clients notices that they are not in a position to supply more than 45 per cent of the ready-mix orders. In some cases, ready-mix companies have even ceased production.

Contractors are worried that the shortage might cause another hike in cement prices in the country.

The shortage of cement and the subsequent lack of concrete also risks causing a delay in the delivery of some projects if the situation persists.

The industry, well aware of the problems, painted a gloomy forecast if the situation did not change soon.

“We are already feeling the pinch and if this situation continues, we are bound to see more delays in delivery of projects,” said Ibrahim El Hamadi, executive director of Arabtec ConstructionArabtec Construction.

The shortage has been triggered by the high cost and lack of cement, according to ready-mix producers.

In the past week itself, cement prices in the country have gone up by 25 per cent with factories arguing that it is a direct result of increasing oil prices in the region having a knock-on effect.

Crisis as cement shortage hits UAE industry
Ready-mix concrete supply companies in UAE are struggling with a huge backlog of orders from contractors as a massive shortage of cement hits the country.

Firms have issued their clients with notices that they will be unable to supply more than 45 per cent of the ready-mix orders as they attempt to deliver supplies to their contracted clients.
The shortage triggered by the high cost and lack of cement has forced some ready-mix companies to cease production.

“We need cement to do our work, but since yesterday we have failed to get any, meaning that our production has been zero for two days,” said a managing director of one of the ready-mix companies in the country.

“I have over 20 trucks queuing at the cement factory and none have been able to go through due to the long queue. All factories have been constrained,” he added.

The managing director of another ready-mix company told Emirates Business its daily concrete production capacity had dropped to 40 per cent in the past two weeks and was likely to slide further.

None of the ready-mix companies interviewed would agree to have their names used in this article.

Contractors are worried that the shortage might cause another hike in cement prices in the country.

The shortage of cement and the subsequent lack of concrete also risk causing a delay in the delivery of some projects if the situation persists.

Some contractors have asked ready-mix companies to provide them with concrete at any cost in a bid to complete projects currently running behind schedule.

“The shortage in cement as well as concrete is a big threat to our projects. We are already feeling the pinch and if this situation continues, we are bound to see more delays in delivery of projects,” Ibrahim El Hamadi, executive director of Arabtec ConstructionArabtec Construction, said.

El Hammadi said contractors were currently waiting for government intervention on the issue as it risks descending into a crisis. “It is difficult for us to manage our work with the current situation. We are trying to entice suppliers and cement factories with direct payments and also trying to use influence, but this can not be sustained for a long time.”

In order to cope with the huge demand for concrete, some ready-mix companies are looking to cement imports as a viable option, regardless of the high cost.

“We are ready to import cement at whatever cost because it is a necessity. If the situation persists, I think this will be the only available option to us,” said a manager of a ready-mix company based in Dubai.

He said the shortage in cement had already caused an increase in operating costs, which had forced most companies to increase prices of concrete by an extra Dh40 per cubic metre.

He noted it was difficult to increase prices where contracts with clients exist, and that in such situations, ready-mix companies are taking on all the losses.

According to industry sources, the shortage is mainly being created by the demand-supply imbalance resulting from the massive construction projects going on throughout the country.

“Supply of cement at the existing factories has been constrained by the huge countrywide demand. Its becoming increasingly hard for factories to keep pace with the fast-growing demand,” said Bryan Richardson, a Dubai based consultant on construction and real estate development.

Meanwhile, Imad Al Jamal, vice-president of the UAE Contractors Association acknowledged the shortage and said the problem could only be resolved if three steps were taken.

“First, there should be a readjustment in the schedule of the projects to push back delivery, second cement factories should expand their production capacity and third, contractors should start looking into importing as a solution to the current situation.”

The problem has been worsened by the breakdown of machinery at four major cement factories in the country, putting further pressure on other factories.

Just in the past week, cement prices in the country have gone up by 25 per cent with factories arguing that it is a direct result of increasing oil prices in the region having a knock on effect.
By Ashaba K Abdul Basti

© Emirates Business 24/7 2008

Article originally published by Emirates Business 24/7 05-Mar-08

Gas shortage to double cost of electricity

17 March 2008
The cost of power generation is set to shoot up by at least 100 per cent in the next two years making electricity an even more expensive commodity, industry sources told Emirates Business.

According to a senior official, the current electricity fee will soon be unjustified to the detriment of the plant operators as the price of gas the ideal feedstock for power generation and water desalination plants has already been increased by tenfold in less than a decade.

“The price of electricity has not been changed for the past 10 years and with the current cost of feedstock, I don’t see power generation to be making any profit,” said Khalid Al Awadi, gas operations manager at the government-controlled Emirates General Petroleum Corporation (Emarat).

“It’s either the government subsidies electricity or it incurs losses. There is no profit on that,” he added.

He said the UAE had been reeling from a gas crunch and this situation is more likely to continue. Current gas supplies are just over two billion cubic feet per day (cfd) from Abu Dhabi National Oil Company (Adnoc)Abu Dhabi National Oil Company (Adnoc), another two billion cubic feet per day from Dolphin EnergyDolphin Energy, which imports from Qatar, and around 300-500 million cfd from Dubai, Al Awadi said.

“Gas demand is expected to double over the next 10 years, but the current supply is not enough to feed the growing demand,” he added. In addition, more demand is expected from cement and fertiliser manufacturers, aluminium and steel smelters and other industrial users.

Last summer, the UAE suffered a gas shortage of about one billion cubic feet and had to use other feedstock such as crude oil and coal, said another source who did not wish to be named.

He said Abu Dhabi had diverted its associated gas, originally intended for reservoir re-injection, to its power stations resulting in a drop in oil production. This has worried some as Abu Dhabi is bound by an Opec quota. “They say it occurred for only a week. But the fact they had to divert associated gas for power stations is alarming,” he said.

In Ras Al Khaimah, some cement and ceramic manufacturers have already switched to coal imported from South Africa due to lack of gas. Some companies’ profit fell after they switched from natural gas to high-cost diesel and fuel oil to generate electricity.

“There is a real gas shortage in the UAE,” Al Awadi said. “Today, some power stations in the UAE are burning liquids even though it is the low-peak season. Dubai and Abu Dhabi are the lucky ones as they are currently being supplied by DolphinDolphin so they are not burning any liquids. But Sharjah and the Northern Emirates have been heavily burning liquids to generate electricity.”

Liquids – which refer to diesel, medium fuel oil, LPG, crude oil or kerosene – can also be used as feedstock for power plants, but they cost more than three times the price of gas. Gas, on the other hand, is considered not only cost-efficient but also greener.

“Gas is cleaner for the machine as well as for the environment and it is more efficient,” says Al Awadi. “You need twice as much liquids to generate 1 MW of electricity and at the same time you produce twice as much carbon than when you burn gas.”

Al Awadi said Dubai is currently being supplied by “cheap gas” from Abu Dhabi, Qatar via the Dolphin EnergyDolphin Energy project and by its own fields. But this cheap supply will soon cease to flow, he added.

“Before, gas was very cheap. When Dubai and Abu Dhabi signed for the Dolphin EnergyDolphin Energy project the price was less than a dollar, around 50 cents. Today, the gas price in the region is $4.75 to $5 and no new contracts will be signed below that,” he said.

Despite the big leap, the regional benchmark of $5 is still lower than the international rate of $11-14, he added.

With the original contracted price (50 cents to $1.3), Al Awadi said DewaDewa’s cost of generating one kilowatt per hour (kWh) of electricity stands at Dh14, making room for a “little profit”. But once Dubai signs up for new supplies, the emirate will then have to buy the gas at triple or quadruple the current price. “With the old DolphinDolphin price, the cost of producing electricity is less than 20 fils per kWh,” Al Awadi said. “But with additional gas from outside at $5 per mmbtu, that cost would go up to 40 fils and if they are going to use oil, that would cost 75 fils per kWh.”

Dubai can also get additional gas from Abu Dhabi’s sour gas fields, but the development of this project has been slower than expected and would nevertheless be expensive too.

The amount needed just to sweeten the gas is $4 per million British thermal units (Btu) making Abu Dhabi gas not in any way cheaper than the current benchmark. Liquids on the other hand are costlier with medium fuel oil and diesel trading at $18 and $20 per million Btu, respectively. Btu is a standard unit of measurement used to denote the amount of heat energy in fuels.

All options are therefore expensive compared to what Dubai currently pays. “There is already a very small profit from power generation plant operators during winter and no profit at all during summer,” Al Awadi said.

Despite this looming scenario for plant operators, a power or water shortage is not in sight. DewaDewa Managing Director and Chief Executive Officer Saeed Mohammad Al Tayer told Emirates Business they can accommodate all existing and planned projects.

“We assure you 100 per cent there is no shortage. We have sufficient capacity for water and for power,” he said. DewaDewa’s electricity demand is growing at 15-20 per cent, while water demand is increasing at 12 per cent every year.

“Yes, we can survive without gas,” Al Awadi said, but added the emirate will then need to burn liquids and that means more expensive feedstock and less revenue “as you can sell liquids in the international market at a high price instead of burning it in power generation and water desalination plants”.

“I don’t foresee power shortages,” another source said. “It’s just that they have to pay lot of money for electricity. I can’t see a power shortage just like what happened in Kuwait because of mismanagement. Dubai or the UAE will not let it happen.”

The main issue, however, is who is going to pay for the increased electricity cost. “With the increasing cost of labour and material in addition to rising cost of feedstock, how much is DewaDewa going to charge their customers?” Al Awadi said.

He added Dubai and Abu Dhabi Governments are already subsiding electricity by around 10 per cent during summer season. While in Sharjah and Northern Emirates, government subsidies have been reaching 300 per cent. “The electricity price in Sharjah and Northern Emirates is around 15 fils, but the average cost throughout the year is 70 fils, so it’s three times more. That’s because they have severe gas shortages there and they are using the much more expensive liquids,” Al Awadi said.

The gas shortage is also expected to further delay projects. The $545 million (Dh2bn) desalination plant being built by ImdadImdad, a joint venture between the Umm Al Quwain Government and Saudi Arabia’s Al Rajhi InvestmentAl Rajhi Investment is stalled for lack of feedstock, Gulf State Newsletter said. It said ImdadImdad has issued the tender to build the plant, and short-listed candidates, but cannot issue the contract because there is no electricity.

In Dubai, DewaDewa denies it has anything to do with project delays. “Developers who are claiming there is a delay because of DewaDewa, are themselves the reason for delays,” DewaDewa’s Al Tayer said. “They are delaying the project due to their local contractors but not DewaDewa.”

He said Dubai can source out additional gas from other countries, most probably from Qatar. Qatar, however, has been locked up in a moratorium study and is tight-lipped on new agreements until the study is finished by next year. When asked if DewaDewa is keen to receive gas from the two-year delayed Iranian-UAE venture, Al Tayer said: “Gas is gas. Everybody is looking for gas.”

Dubai had a tentative deal with DolphinDolphin to provide more gas but this is still not certain, said a source familiar with the situation.

In critical supply
With rapid population growth and economic development driving an exponential increase in the demand for water, the region’s governments are having to continuously boost supply to keep pace, according to a MEED power and water special report.

Renewable water availability will fall by 50 per cent per capita over the next four decades, from 1,100 cubic metres a year (cm/y) today to 550 cm/y by 2050. Traditionally, the region’s response has been to spend large sums on increasing water and wastewater capacity. However, as water becomes increasingly scarce, this approach is clearly unsustainable.

DewaDewa recently announced it will introduce sliding electricity and water tariffs based on consumption levels. This is the first time Dubai has increased tariffs since 1998. Developers are also making a concerted effort to meet sustainable requirements from the offset. The UAE has implemented Leeds directive based on the US Green Building Council’s standards.
By Karen Remo-Listana

© Emirates Business 24/7 2008

UAE faces cement crisis

05 March 2008
The real estate boom in the UAE is set to hit a major roadblock that could seriously affect the completion of projects across the Emirates. The problem lies with companies that supply ready-mix concrete.

Representatives of these suppliers yesterday told Emirates Business that they are struggling with a huge backlog of orders due to a massive shortage in the supply of cement.

Companies have issued their clients notices that they are not in a position to supply more than 45 per cent of the ready-mix orders. In some cases, ready-mix companies have even ceased production.

Contractors are worried that the shortage might cause another hike in cement prices in the country.

The shortage of cement and the subsequent lack of concrete also risks causing a delay in the delivery of some projects if the situation persists.

The industry, well aware of the problems, painted a gloomy forecast if the situation did not change soon.

“We are already feeling the pinch and if this situation continues, we are bound to see more delays in delivery of projects,” said Ibrahim El Hamadi, executive director of Arabtec ConstructionArabtec Construction.

The shortage has been triggered by the high cost and lack of cement, according to ready-mix producers.

In the past week itself, cement prices in the country have gone up by 25 per cent with factories arguing that it is a direct result of increasing oil prices in the region having a knock-on effect.

Crisis as cement shortage hits UAE industry
Ready-mix concrete supply companies in UAE are struggling with a huge backlog of orders from contractors as a massive shortage of cement hits the country.

Firms have issued their clients with notices that they will be unable to supply more than 45 per cent of the ready-mix orders as they attempt to deliver supplies to their contracted clients.
The shortage triggered by the high cost and lack of cement has forced some ready-mix companies to cease production.

“We need cement to do our work, but since yesterday we have failed to get any, meaning that our production has been zero for two days,” said a managing director of one of the ready-mix companies in the country.

“I have over 20 trucks queuing at the cement factory and none have been able to go through due to the long queue. All factories have been constrained,” he added.

The managing director of another ready-mix company told Emirates Business its daily concrete production capacity had dropped to 40 per cent in the past two weeks and was likely to slide further.

None of the ready-mix companies interviewed would agree to have their names used in this article.

Contractors are worried that the shortage might cause another hike in cement prices in the country.

The shortage of cement and the subsequent lack of concrete also risk causing a delay in the delivery of some projects if the situation persists.

Some contractors have asked ready-mix companies to provide them with concrete at any cost in a bid to complete projects currently running behind schedule.

“The shortage in cement as well as concrete is a big threat to our projects. We are already feeling the pinch and if this situation continues, we are bound to see more delays in delivery of projects,” Ibrahim El Hamadi, executive director of Arabtec ConstructionArabtec Construction, said.

El Hammadi said contractors were currently waiting for government intervention on the issue as it risks descending into a crisis. “It is difficult for us to manage our work with the current situation. We are trying to entice suppliers and cement factories with direct payments and also trying to use influence, but this can not be sustained for a long time.”

In order to cope with the huge demand for concrete, some ready-mix companies are looking to cement imports as a viable option, regardless of the high cost.

“We are ready to import cement at whatever cost because it is a necessity. If the situation persists, I think this will be the only available option to us,” said a manager of a ready-mix company based in Dubai.

He said the shortage in cement had already caused an increase in operating costs, which had forced most companies to increase prices of concrete by an extra Dh40 per cubic metre.

He noted it was difficult to increase prices where contracts with clients exist, and that in such situations, ready-mix companies are taking on all the losses.

According to industry sources, the shortage is mainly being created by the demand-supply imbalance resulting from the massive construction projects going on throughout the country.

“Supply of cement at the existing factories has been constrained by the huge countrywide demand. Its becoming increasingly hard for factories to keep pace with the fast-growing demand,” said Bryan Richardson, a Dubai based consultant on construction and real estate development.

Meanwhile, Imad Al Jamal, vice-president of the UAE Contractors Association acknowledged the shortage and said the problem could only be resolved if three steps were taken.

“First, there should be a readjustment in the schedule of the projects to push back delivery, second cement factories should expand their production capacity and third, contractors should start looking into importing as a solution to the current situation.”

The problem has been worsened by the breakdown of machinery at four major cement factories in the country, putting further pressure on other factories.

Just in the past week, cement prices in the country have gone up by 25 per cent with factories arguing that it is a direct result of increasing oil prices in the region having a knock on effect.
By Ashaba K Abdul Basti

© Emirates Business 24/7 2008

Article originally published by Emirates Business 24/7 05-Mar-08

Gas shortage to double cost of electricity

17 March 2008
The cost of power generation is set to shoot up by at least 100 per cent in the next two years making electricity an even more expensive commodity, industry sources told Emirates Business.

According to a senior official, the current electricity fee will soon be unjustified to the detriment of the plant operators as the price of gas the ideal feedstock for power generation and water desalination plants has already been increased by tenfold in less than a decade.

“The price of electricity has not been changed for the past 10 years and with the current cost of feedstock, I don’t see power generation to be making any profit,” said Khalid Al Awadi, gas operations manager at the government-controlled Emirates General Petroleum Corporation (Emarat).

“It’s either the government subsidies electricity or it incurs losses. There is no profit on that,” he added.

He said the UAE had been reeling from a gas crunch and this situation is more likely to continue. Current gas supplies are just over two billion cubic feet per day (cfd) from Abu Dhabi National Oil Company (Adnoc)Abu Dhabi National Oil Company (Adnoc), another two billion cubic feet per day from Dolphin EnergyDolphin Energy, which imports from Qatar, and around 300-500 million cfd from Dubai, Al Awadi said.

“Gas demand is expected to double over the next 10 years, but the current supply is not enough to feed the growing demand,” he added. In addition, more demand is expected from cement and fertiliser manufacturers, aluminium and steel smelters and other industrial users.

Last summer, the UAE suffered a gas shortage of about one billion cubic feet and had to use other feedstock such as crude oil and coal, said another source who did not wish to be named.

He said Abu Dhabi had diverted its associated gas, originally intended for reservoir re-injection, to its power stations resulting in a drop in oil production. This has worried some as Abu Dhabi is bound by an Opec quota. “They say it occurred for only a week. But the fact they had to divert associated gas for power stations is alarming,” he said.

In Ras Al Khaimah, some cement and ceramic manufacturers have already switched to coal imported from South Africa due to lack of gas. Some companies’ profit fell after they switched from natural gas to high-cost diesel and fuel oil to generate electricity.

“There is a real gas shortage in the UAE,” Al Awadi said. “Today, some power stations in the UAE are burning liquids even though it is the low-peak season. Dubai and Abu Dhabi are the lucky ones as they are currently being supplied by DolphinDolphin so they are not burning any liquids. But Sharjah and the Northern Emirates have been heavily burning liquids to generate electricity.”

Liquids – which refer to diesel, medium fuel oil, LPG, crude oil or kerosene – can also be used as feedstock for power plants, but they cost more than three times the price of gas. Gas, on the other hand, is considered not only cost-efficient but also greener.

“Gas is cleaner for the machine as well as for the environment and it is more efficient,” says Al Awadi. “You need twice as much liquids to generate 1 MW of electricity and at the same time you produce twice as much carbon than when you burn gas.”

Al Awadi said Dubai is currently being supplied by “cheap gas” from Abu Dhabi, Qatar via the Dolphin EnergyDolphin Energy project and by its own fields. But this cheap supply will soon cease to flow, he added.

“Before, gas was very cheap. When Dubai and Abu Dhabi signed for the Dolphin EnergyDolphin Energy project the price was less than a dollar, around 50 cents. Today, the gas price in the region is $4.75 to $5 and no new contracts will be signed below that,” he said.

Despite the big leap, the regional benchmark of $5 is still lower than the international rate of $11-14, he added.

With the original contracted price (50 cents to $1.3), Al Awadi said DewaDewa’s cost of generating one kilowatt per hour (kWh) of electricity stands at Dh14, making room for a “little profit”. But once Dubai signs up for new supplies, the emirate will then have to buy the gas at triple or quadruple the current price. “With the old DolphinDolphin price, the cost of producing electricity is less than 20 fils per kWh,” Al Awadi said. “But with additional gas from outside at $5 per mmbtu, that cost would go up to 40 fils and if they are going to use oil, that would cost 75 fils per kWh.”

Dubai can also get additional gas from Abu Dhabi’s sour gas fields, but the development of this project has been slower than expected and would nevertheless be expensive too.

The amount needed just to sweeten the gas is $4 per million British thermal units (Btu) making Abu Dhabi gas not in any way cheaper than the current benchmark. Liquids on the other hand are costlier with medium fuel oil and diesel trading at $18 and $20 per million Btu, respectively. Btu is a standard unit of measurement used to denote the amount of heat energy in fuels.

All options are therefore expensive compared to what Dubai currently pays. “There is already a very small profit from power generation plant operators during winter and no profit at all during summer,” Al Awadi said.

Despite this looming scenario for plant operators, a power or water shortage is not in sight. DewaDewa Managing Director and Chief Executive Officer Saeed Mohammad Al Tayer told Emirates Business they can accommodate all existing and planned projects.

“We assure you 100 per cent there is no shortage. We have sufficient capacity for water and for power,” he said. DewaDewa’s electricity demand is growing at 15-20 per cent, while water demand is increasing at 12 per cent every year.

“Yes, we can survive without gas,” Al Awadi said, but added the emirate will then need to burn liquids and that means more expensive feedstock and less revenue “as you can sell liquids in the international market at a high price instead of burning it in power generation and water desalination plants”.

“I don’t foresee power shortages,” another source said. “It’s just that they have to pay lot of money for electricity. I can’t see a power shortage just like what happened in Kuwait because of mismanagement. Dubai or the UAE will not let it happen.”

The main issue, however, is who is going to pay for the increased electricity cost. “With the increasing cost of labour and material in addition to rising cost of feedstock, how much is DewaDewa going to charge their customers?” Al Awadi said.

He added Dubai and Abu Dhabi Governments are already subsiding electricity by around 10 per cent during summer season. While in Sharjah and Northern Emirates, government subsidies have been reaching 300 per cent. “The electricity price in Sharjah and Northern Emirates is around 15 fils, but the average cost throughout the year is 70 fils, so it’s three times more. That’s because they have severe gas shortages there and they are using the much more expensive liquids,” Al Awadi said.

The gas shortage is also expected to further delay projects. The $545 million (Dh2bn) desalination plant being built by ImdadImdad, a joint venture between the Umm Al Quwain Government and Saudi Arabia’s Al Rajhi InvestmentAl Rajhi Investment is stalled for lack of feedstock, Gulf State Newsletter said. It said ImdadImdad has issued the tender to build the plant, and short-listed candidates, but cannot issue the contract because there is no electricity.

In Dubai, DewaDewa denies it has anything to do with project delays. “Developers who are claiming there is a delay because of DewaDewa, are themselves the reason for delays,” DewaDewa’s Al Tayer said. “They are delaying the project due to their local contractors but not DewaDewa.”

He said Dubai can source out additional gas from other countries, most probably from Qatar. Qatar, however, has been locked up in a moratorium study and is tight-lipped on new agreements until the study is finished by next year. When asked if DewaDewa is keen to receive gas from the two-year delayed Iranian-UAE venture, Al Tayer said: “Gas is gas. Everybody is looking for gas.”

Dubai had a tentative deal with DolphinDolphin to provide more gas but this is still not certain, said a source familiar with the situation.

In critical supply
With rapid population growth and economic development driving an exponential increase in the demand for water, the region’s governments are having to continuously boost supply to keep pace, according to a MEED power and water special report.

Renewable water availability will fall by 50 per cent per capita over the next four decades, from 1,100 cubic metres a year (cm/y) today to 550 cm/y by 2050. Traditionally, the region’s response has been to spend large sums on increasing water and wastewater capacity. However, as water becomes increasingly scarce, this approach is clearly unsustainable.

DewaDewa recently announced it will introduce sliding electricity and water tariffs based on consumption levels. This is the first time Dubai has increased tariffs since 1998. Developers are also making a concerted effort to meet sustainable requirements from the offset. The UAE has implemented Leeds directive based on the US Green Building Council’s standards.
By Karen Remo-Listana

© Emirates Business 24/7 2008

Minimalize Risk – Questions about buying Properties in Dubai

Source: Space3 Magazine

Is it possible to get mortgages for property in Dubai?

Yes. Amlak, Tamweel, HSBC, Lloyds TSB, MashreqBank, RAKBANK, National Bank of
Dubai, United National Bank, Arab Bank, Abu Dhabi Commercial Bank, Standard Chartered Bank and United Bank Ltd (Pakistan) are just some of the banks that lend on Dubai property, both on- and off-plan. Each one has different rates and terms, and some only lend to residents.
You can also now get mortgages internationally for property in Dubai. HSBC in the UK, for example, will lend assetbacked mortgages against a property you own there.
Other banks are starting to do the same.

How do mortgages differ from those abroad?

Firstly, lenders do not lend on every project currently being built. Often, buildings are sold
that no one lends on at all, but, given the favourable paymentstructure system in Dubai, that
doesn’t mean they aren’t worth buying. On the other hand, it is possible to get a mortgage on
many off-plan properties, unlike most places in the world.

What are mortgage rates like in Dubai?

On the whole, and in comparison with international rates, rates are considered to be expensive at between six and eight per cent. But these are not asset-backed, as they would generally be were you to get a mortgage for a Dubai property somewhere else in the world. Mortgages in Dubai depend on your income as the main factor.

How quickly can I get a mortgage?

Some banks are claiming that they will be able to give you an offer in under a week. Do not assume this is always the case, though. It is almost unheard of, and you should expect at least
two weeks.

Is it possible for me to get a pre-approved mortgage?

Yes. This is preferable and is the way to go. Most lenders will work out how much they are
likely to lend you before you have a specific property in mind. This means you can then go shopping, and find something you know you can afford. It means fewer surprises, and less heartache.
At EPS, the pre-approval will take between 24-48 hours, provided all the necessary documents are provided.

How do local finance houses assess mortgages?

Your monthly income, less expenses, and then generally divided by three. This gives the figure they will work from, for each month over the term. They do not base it on how well the asset might perform, and do not allow for low-loan-to-value (ie, large down-payment with
small loan). This system makes it frustratingly limited because even if you are earning a
seriously good wage, do not assume that a bank – any bank for that matter – will lend you
substantial sums. Always check whether the property you are buying has a lender, and always check whether they will lend to you.

How much can I borrow?

Resident expatriates can generally borrow between 70 and 80 per cent; non-residents can generally borrow 60 to 70 per cent. It all depends on the lender, and the project they are
lending on.

Can I sell my property prior to completion?

Yes, the property can be sold after the payment of the second instalment, provided there has been no delay in payment. The property cannot, however, be resold by the next landlord until completion.

What do I need to show mortgage firms to get finance?

You will need to show proof of residency (although usually, it doesn’t matter where that is –
it just changes how much you have to stump up as a downpayment).
You will also have to provide proof of income details. For the employed, this means proof of employment, and six months of bank statements. For the self-employed, it generally means three years’ worth of audited accounts.

What does the maintenance fee cover?

In most apartments, the airconditioning cost is covered, along with all external amenities, common areas and security. For villas, the fee covers the maintenance of common areas.

What’s a transfer fee?

A transfer fee is payable if you transfer your property to someone else. It is an administrative charge levied by the primary developer.

If a foreigner writes a will including UAE assets, does it take precedence over local Shari’a law?

Yes, but to be on the safe side, make sure that your will clearly states that you want it to be
understood (elected) in the light of the laws of your own country.
The laws of the UAE specifically allow this. This is particularly important if you are a foreign
Muslim, and do not want your will to be specifically determined by the Shari’a law of the UAE. If
you die abroad,it will make a difference. If you die in the UAE, it might make all the difference.
Do seek legal advice on this one.

Is there any recourse against bad tenants?

There are procedures in the Rent Office that allow you to apply for a tenancy to be ended, as well as to seek possession and damages. You need to make your application with all the relevant documents, accompanied by Arabic translations. A fee of 3.5 per cent of the annual rental value
and claim amount is payable.

What does freehold mean in the context of Dubai?

As it stands, freehold means ownership of the building you are buying in perpetuity. Dubai’s
Government does, however, need to produce a law that defines the legal terminology specifically for Dubai, just as the Abu Dhabi Government has recently done for Abu Dhabi.At the moment, freehold (or leasehold, depending on what you are buying) exists in contract with the primary
developer – the quasi-Dubai Government entities called Nakheel, Emaar and Dubai Holdings. The good news is that legal consultants say a new law is in the pipeline. It is almost certain
that no law will allow foreigners to own land as freehold – this is likely to remain with the primary developers, and has happened in the few cases where title has been granted to foreigners. This is no cause for alarm though, as it also applied in Europe and the
US, for example.

What are the maintenance fees once I purchase a property?

Maintenance fees vary, depending on the project. Apartment-owners pay an annual fee, which is calculated per square foot, whereas villaowners generally pay a fixed amount per month.

What documentation should I demand before I buy?

In a direct purchase situation, a buyer needs to be sure he or she signs, and is given a copy
of, a reservation contract with the original developer if the home is purchased directly from
that developer, or through an agent acting on a developer’s behalf. In a resale situation, a
buyer needs to see proof of ownership from the seller, and sign an assignation document
to prove transfer of ownership to him or her, witnessed by the developer. They will then
themselves be issued with a purchase and sales agreement.
There are no circumstances under which either of these scenarios should be deviated
from unless you are into very high-risk buying and selling.

Can I buy an apartment in the UAE as a foreigner without a residency permit?
Yes, anyone can buy a property in the UAE. All you require is your passport and
cheque book.

What’s the difference between a standard mortgage and an Islamic mortgage?

Very little. An Islamic mortgage doesn’t allow interest to be charged, but you still pay the
bank a fee or profit, or both, over time, for the property to become yours. Try looking at
both options as there are differences in terms of payment amounts and ownership rights
that may be useful to your personal circumstances.

Do I have to pay tax on Dubai property if I am resident abroad?
Most states expect you to pay tax on assets abroad. In some jurisdictions, however (the UK
being one example), it is possible not to pay, by ensuring that rental income or proceeds from the sale of a Dubai property remain offshore.
The best way to do this is through an offshore company where you can keep revenue,
or an offshore deposit account with an international bank, which allows you to deposit
and transfer funds with a certain amount of privacy.

What documentation should I demand before I buy?
In a direct purchase situation, a buyer needs to be sure he or she signs, and is given a copy
of, a reservation.

Do you get a residency visa if you buy a home?
Generally speaking, the answer to this question is yes, but your contract should state that you
are entitled to one. Residence visas are subject to normal immigration regulations, which
means that they are renewable every three years, for example.
They do not replace a work permit, and if you have a work permit, your residency will come
from that. They do not confer special status, so be good.

Should you write a will when buying in Dubai?

Anybody purchasing property in Dubai (or anywhere) should get a will once they have bought. It means your estate can be properly distributed in accordance with your wishes, and according to the laws of the country you elect as your jurisdiction, thus avoiding any conflict with local law.

How can I protect myself from unscrupulous agents?

Always use a reputable company such as Emaar Property Services. Companies that win international awards and have high-profile international partners are a safe bet. If in doubt, ask for an agent’s trade licence. If they don’t want to give it to you, don’t work with them. Use a local lawyer who understands local property and contract law to check your contracts and arrange funds transfer. Many foreign-based lawyers don’t understand the law in Dubai and misguide buyers.

a list of the dos and don’ts of buying property in Dubai to prevent false assumptions, poor decisions and costly mistakes being made

The new Dubai property law has been effectively signed, sealed and delivered and foreign buyers once hesitant to commit to a marketplace where an element of doubt remained about their legal right to own freehold real estate are fuelling a resurgence of interest in property in Dubai.

Furthermore both international and local mortgage lenders are making it easier to borrow to finance a property purchase in the UAE .

This means that it’s high time to draw up a list of the dos and don’ts of buying property in Dubai to prevent false assumptions, poor decisions and costly mistakes being made.

First things first, while Dubai has a reputation for having a transparent and trouble free property purchase process that does not mean it is safe to enter into any form of property transaction without the aid and support of a competent and independent lawyer. There are many complexities associated with the purchase of property whether that property is off plan, completed or resale…money should not change hands and contracts should not be signed before the purchaser has sought independent legal advice.

When it comes to the signing of any contract and the acceptance of any terms, conditions and assignments it’s imperative that the purchaser reads, understands and accepts not only the obligations that the builder/developer/reseller/agents are committing to, but all the terms and conditions that the person buying property in Dubai has to agree to as well – such as getting insurances in place before completion, accepting that title deeds can be assigned to someone else nominated if permission to purchase is not granted to the initial buyer etc. If a buyer does not take a little time and make a tiny amount of effort to ensure they know what they are committing to then they mustn’t be surprised if they face problems further down the line.

Not all builders and developers in Dubai have the same reputation and not all build to expected standards. Enough property has been completed in Dubai by the majority of large constructors for those looking for an investment property in dubaior a second home in the UAE to have examples of completed work to look at. Try and get as good and broad a perspective of a developer before committing to purchase from one of their off plan projects – while this is not an exact science as standards can change, it is as good a basis for making a decision as any!

The terms and conditions that mortgage lenders enforce vary from lender to lender and country to country. Many think that by entering into a mortgage contract they ‘only’ run the risk of losing the home on which the mortgage is based if they default – this is not always the case. Often the larger the financial institution the less scrupulous and customer caring they are too! Don’t get your fingers burned – read, understand and seriously think about any financial contract you sign – it could be that if you default and your home is repossessed that you still end up with a bill for charges, lost interest, the difference between the debt and what they sell your home for. There is no such thing as a sympathetic bank, a kind lender or a generous financial institution – the sooner you come to KNOW that the better off you will be in life! Dubai mortgage lenders are no exception to this rule by the way – look after yourself and your own best interests, do not trust a bank, estate agent or property developer to do so!

Think about what could happen to your dream home in Dubai when you die – sorry – grim topic but an essential one to consider when you bear in mind that the laws of succession differ from country to country and are affected by many issues such as whether you still have finance outstanding on the real estate etc. Make a will but also consider the option of owning property through a company structure or if appropriate to your circumstances, using an offshore trust for the ownership of any property assets purchased outside your country of domicile.

And finally – there is no such thing as a no-risk investment – and while some believe putting money into property as an asset class is the closest thing you can get to risk free investing, that is most certainly not the case. Dubai is still an immature and emerging market that has not been tried and tested, that has never had to suffer economic, social or political change on a large and significant scale and where no investor, market analyst or expert can predict future growth patterns. While property prices and rental yields are continuing to rise at the moment, they may not rise forever.

Minimalize Risk – Questions about buying Properties in Dubai

Source: Space3 Magazine

Is it possible to get mortgages for property in Dubai?

Yes. Amlak, Tamweel, HSBC, Lloyds TSB, MashreqBank, RAKBANK, National Bank of
Dubai, United National Bank, Arab Bank, Abu Dhabi Commercial Bank, Standard Chartered Bank and United Bank Ltd (Pakistan) are just some of the banks that lend on Dubai property, both on- and off-plan. Each one has different rates and terms, and some only lend to residents.
You can also now get mortgages internationally for property in Dubai. HSBC in the UK, for example, will lend assetbacked mortgages against a property you own there.
Other banks are starting to do the same.

How do mortgages differ from those abroad?

Firstly, lenders do not lend on every project currently being built. Often, buildings are sold
that no one lends on at all, but, given the favourable paymentstructure system in Dubai, that
doesn’t mean they aren’t worth buying. On the other hand, it is possible to get a mortgage on
many off-plan properties, unlike most places in the world.

What are mortgage rates like in Dubai?

On the whole, and in comparison with international rates, rates are considered to be expensive at between six and eight per cent. But these are not asset-backed, as they would generally be were you to get a mortgage for a Dubai property somewhere else in the world. Mortgages in Dubai depend on your income as the main factor.

How quickly can I get a mortgage?

Some banks are claiming that they will be able to give you an offer in under a week. Do not assume this is always the case, though. It is almost unheard of, and you should expect at least
two weeks.

Is it possible for me to get a pre-approved mortgage?

Yes. This is preferable and is the way to go. Most lenders will work out how much they are
likely to lend you before you have a specific property in mind. This means you can then go shopping, and find something you know you can afford. It means fewer surprises, and less heartache.
At EPS, the pre-approval will take between 24-48 hours, provided all the necessary documents are provided.

How do local finance houses assess mortgages?

Your monthly income, less expenses, and then generally divided by three. This gives the figure they will work from, for each month over the term. They do not base it on how well the asset might perform, and do not allow for low-loan-to-value (ie, large down-payment with
small loan). This system makes it frustratingly limited because even if you are earning a
seriously good wage, do not assume that a bank – any bank for that matter – will lend you
substantial sums. Always check whether the property you are buying has a lender, and always check whether they will lend to you.

How much can I borrow?

Resident expatriates can generally borrow between 70 and 80 per cent; non-residents can generally borrow 60 to 70 per cent. It all depends on the lender, and the project they are
lending on.

Can I sell my property prior to completion?

Yes, the property can be sold after the payment of the second instalment, provided there has been no delay in payment. The property cannot, however, be resold by the next landlord until completion.

What do I need to show mortgage firms to get finance?

You will need to show proof of residency (although usually, it doesn’t matter where that is –
it just changes how much you have to stump up as a downpayment).
You will also have to provide proof of income details. For the employed, this means proof of employment, and six months of bank statements. For the self-employed, it generally means three years’ worth of audited accounts.

What does the maintenance fee cover?

In most apartments, the airconditioning cost is covered, along with all external amenities, common areas and security. For villas, the fee covers the maintenance of common areas.

What’s a transfer fee?

A transfer fee is payable if you transfer your property to someone else. It is an administrative charge levied by the primary developer.

If a foreigner writes a will including UAE assets, does it take precedence over local Shari’a law?

Yes, but to be on the safe side, make sure that your will clearly states that you want it to be
understood (elected) in the light of the laws of your own country.
The laws of the UAE specifically allow this. This is particularly important if you are a foreign
Muslim, and do not want your will to be specifically determined by the Shari’a law of the UAE. If
you die abroad,it will make a difference. If you die in the UAE, it might make all the difference.
Do seek legal advice on this one.

Is there any recourse against bad tenants?

There are procedures in the Rent Office that allow you to apply for a tenancy to be ended, as well as to seek possession and damages. You need to make your application with all the relevant documents, accompanied by Arabic translations. A fee of 3.5 per cent of the annual rental value
and claim amount is payable.

What does freehold mean in the context of Dubai?

As it stands, freehold means ownership of the building you are buying in perpetuity. Dubai’s
Government does, however, need to produce a law that defines the legal terminology specifically for Dubai, just as the Abu Dhabi Government has recently done for Abu Dhabi.At the moment, freehold (or leasehold, depending on what you are buying) exists in contract with the primary
developer – the quasi-Dubai Government entities called Nakheel, Emaar and Dubai Holdings. The good news is that legal consultants say a new law is in the pipeline. It is almost certain
that no law will allow foreigners to own land as freehold – this is likely to remain with the primary developers, and has happened in the few cases where title has been granted to foreigners. This is no cause for alarm though, as it also applied in Europe and the
US, for example.

What are the maintenance fees once I purchase a property?

Maintenance fees vary, depending on the project. Apartment-owners pay an annual fee, which is calculated per square foot, whereas villaowners generally pay a fixed amount per month.

What documentation should I demand before I buy?

In a direct purchase situation, a buyer needs to be sure he or she signs, and is given a copy
of, a reservation contract with the original developer if the home is purchased directly from
that developer, or through an agent acting on a developer’s behalf. In a resale situation, a
buyer needs to see proof of ownership from the seller, and sign an assignation document
to prove transfer of ownership to him or her, witnessed by the developer. They will then
themselves be issued with a purchase and sales agreement.
There are no circumstances under which either of these scenarios should be deviated
from unless you are into very high-risk buying and selling.

Can I buy an apartment in the UAE as a foreigner without a residency permit?
Yes, anyone can buy a property in the UAE. All you require is your passport and
cheque book.

What’s the difference between a standard mortgage and an Islamic mortgage?

Very little. An Islamic mortgage doesn’t allow interest to be charged, but you still pay the
bank a fee or profit, or both, over time, for the property to become yours. Try looking at
both options as there are differences in terms of payment amounts and ownership rights
that may be useful to your personal circumstances.

Do I have to pay tax on Dubai property if I am resident abroad?
Most states expect you to pay tax on assets abroad. In some jurisdictions, however (the UK
being one example), it is possible not to pay, by ensuring that rental income or proceeds from the sale of a Dubai property remain offshore.
The best way to do this is through an offshore company where you can keep revenue,
or an offshore deposit account with an international bank, which allows you to deposit
and transfer funds with a certain amount of privacy.

What documentation should I demand before I buy?
In a direct purchase situation, a buyer needs to be sure he or she signs, and is given a copy
of, a reservation.

Do you get a residency visa if you buy a home?
Generally speaking, the answer to this question is yes, but your contract should state that you
are entitled to one. Residence visas are subject to normal immigration regulations, which
means that they are renewable every three years, for example.
They do not replace a work permit, and if you have a work permit, your residency will come
from that. They do not confer special status, so be good.

Should you write a will when buying in Dubai?

Anybody purchasing property in Dubai (or anywhere) should get a will once they have bought. It means your estate can be properly distributed in accordance with your wishes, and according to the laws of the country you elect as your jurisdiction, thus avoiding any conflict with local law.

How can I protect myself from unscrupulous agents?

Always use a reputable company such as Emaar Property Services. Companies that win international awards and have high-profile international partners are a safe bet. If in doubt, ask for an agent’s trade licence. If they don’t want to give it to you, don’t work with them. Use a local lawyer who understands local property and contract law to check your contracts and arrange funds transfer. Many foreign-based lawyers don’t understand the law in Dubai and misguide buyers.

a list of the dos and don’ts of buying property in Dubai to prevent false assumptions, poor decisions and costly mistakes being made

The new Dubai property law has been effectively signed, sealed and delivered and foreign buyers once hesitant to commit to a marketplace where an element of doubt remained about their legal right to own freehold real estate are fuelling a resurgence of interest in property in Dubai.

Furthermore both international and local mortgage lenders are making it easier to borrow to finance a property purchase in the UAE .

This means that it’s high time to draw up a list of the dos and don’ts of buying property in Dubai to prevent false assumptions, poor decisions and costly mistakes being made.

First things first, while Dubai has a reputation for having a transparent and trouble free property purchase process that does not mean it is safe to enter into any form of property transaction without the aid and support of a competent and independent lawyer. There are many complexities associated with the purchase of property whether that property is off plan, completed or resale…money should not change hands and contracts should not be signed before the purchaser has sought independent legal advice.

When it comes to the signing of any contract and the acceptance of any terms, conditions and assignments it’s imperative that the purchaser reads, understands and accepts not only the obligations that the builder/developer/reseller/agents are committing to, but all the terms and conditions that the person buying property in Dubai has to agree to as well – such as getting insurances in place before completion, accepting that title deeds can be assigned to someone else nominated if permission to purchase is not granted to the initial buyer etc. If a buyer does not take a little time and make a tiny amount of effort to ensure they know what they are committing to then they mustn’t be surprised if they face problems further down the line.

Not all builders and developers in Dubai have the same reputation and not all build to expected standards. Enough property has been completed in Dubai by the majority of large constructors for those looking for an investment property in dubaior a second home in the UAE to have examples of completed work to look at. Try and get as good and broad a perspective of a developer before committing to purchase from one of their off plan projects – while this is not an exact science as standards can change, it is as good a basis for making a decision as any!

The terms and conditions that mortgage lenders enforce vary from lender to lender and country to country. Many think that by entering into a mortgage contract they ‘only’ run the risk of losing the home on which the mortgage is based if they default – this is not always the case. Often the larger the financial institution the less scrupulous and customer caring they are too! Don’t get your fingers burned – read, understand and seriously think about any financial contract you sign – it could be that if you default and your home is repossessed that you still end up with a bill for charges, lost interest, the difference between the debt and what they sell your home for. There is no such thing as a sympathetic bank, a kind lender or a generous financial institution – the sooner you come to KNOW that the better off you will be in life! Dubai mortgage lenders are no exception to this rule by the way – look after yourself and your own best interests, do not trust a bank, estate agent or property developer to do so!

Think about what could happen to your dream home in Dubai when you die – sorry – grim topic but an essential one to consider when you bear in mind that the laws of succession differ from country to country and are affected by many issues such as whether you still have finance outstanding on the real estate etc. Make a will but also consider the option of owning property through a company structure or if appropriate to your circumstances, using an offshore trust for the ownership of any property assets purchased outside your country of domicile.

And finally – there is no such thing as a no-risk investment – and while some believe putting money into property as an asset class is the closest thing you can get to risk free investing, that is most certainly not the case. Dubai is still an immature and emerging market that has not been tried and tested, that has never had to suffer economic, social or political change on a large and significant scale and where no investor, market analyst or expert can predict future growth patterns. While property prices and rental yields are continuing to rise at the moment, they may not rise forever.

Don`fall for the charm of Dubai Property

original : www.moneyweek.com

I wouldn’t put a penny of my money into Dubai, says Stuart Law of investment property firm Assetz in The Independent. “It’s a city based on consumerism. I’m not sure that guarantees its role as a long-term holiday home location. I wouldn’t buy there.” Several property developers and agents in the region have now begun echoing Law’s opinion. Dubai’s sustainability as a resort isn’t the only worry though, as there is also concern that the supply of property in Dubai has begun to outstrip demand.

Dubai property: buying could be easier than selling
“Thirty years ago there was nothing in Dubai but a creek, a sheikh’s palace and a dodgy reputation as the smuggling capital of the Arabian Gulf,” says The Economist. Since then it has been billing itself as the tourism and business hub of the Gulf region and people have flocked there with their money. Property prices have soared in tandem with the frenzy, but it now seems that it has reached a peak. Since 2003 alone more than 12,000 homes have been built, says Graham Norwood in The Independent, meaning “that anyone wishing to sell a home has competition from new properties”.

According to a spokesperson for Standard Chartered Bank, also in The Independent, “development of the Palms, Dubai Marina, Business Bay and Arabian Ranches, to name just a few [schemes], is going to boost supply in the coming five years in dramatic fashion. To us, this suggests that a decline in property prices is just a matter of time.”

Kevin Fleury, a mortgage broker specialising in overseas loans at Conti Financial Services, agrees. He tells The Times that when investing in property abroad, an exit strategy is needed. With Dubai, though, there isn’t one. “There is a severe danger that there will be an oversupply because so much is being built. This will suppress rents and capital growth, and I think many people will find it difficult to sell.”

Even when it comes to selling a home, the vendor will face additional problems. Dubai may well have just granted the right to own freehold properties to expatriates, but “there is no conveyancing system for property purchases”, says Gill Kerby in The Sunday Times. “The developers and agents offer to undertake all contract exchanges on your behalf (not a good idea).”

Dubai property: is the infrastructure all it’s cracked up to be?
And an oversupply of houses isn’t the only problem facing investors. The Dubai tourism board may well issue sprightly images of superhighways traversing the emirate city’s centre, but as the construction of one of it’s latest property developments demonstrates, infrastructural issues do not seem to have been factored in. “Palm Jumeirah is a peninsula, with one way in and out,” says William Kistler, European President of the Urban Land Institute. He tells The Daily Telegraph that “the question of how the road provision is going to connect into the transit infrastructure is something that we have got a not very satisfactory answer to”.

Palm Jumeirah came to prominence back in 2002, when David Beckham and several other members of the England football team bought properties on the palm-shaped island on their way to the 2002 World Cup in Japan. The subsequent hype helped it to sell out, but its developers have remained tight lipped on allegations that the players received large discounts to buy there. 25% of the properties went to British buyers.

The only road from the resort (down the palm’s trunk) leads directly to Dubai’s main highway, the Sheikh Zayed Road, where traffic “moves as slowly as water down a blocked drain”, says Kistler. People were wondering whether the infrastructure was sustainable even before they built the Palm Jumeirah. Although two new road projects are planned for the area, so too are 100 residential towers, accommodating up to 40,000 people.

The reason for the extra towers seems to be that Nakheel, the property development company owned by the Dubai government, grossly underestimated the number of properties that would be built on the palm-shaped idyll, says The Daily Telegraph. The result makes scary reading. According to a former construction worker for the company, the current plan has 150,000 people living there, “but there are no medical facilities and no evacuation plan in place”.

Dubai property: a bubble waiting to burst?
There is also another reason to be cautious when it comes to Dubai property – the boom in prices is a bubble waiting to burst, fed principally by speculative purchases.

Sure, Dubai enjoys year-round sunshine and indoor skiing, but what promoters of the tiny emirate “don’t emphasise is that Dubai will be the world’s biggest construction site and traffic jam until at least 2010”, says Kerby.

Late in 2004, Middle East Business media reported that 85% of off-plan flats and 50% of off-plan villas were bought by speculators, most of whom sell before completion. This means that most homes are secured by “10% deposits and then traded like shares”, says Graham Norwood in The Observer. In other words, the majority of those buying have no intention of living there.

Some Dubai builders already recognise the “fragility of this speculative frenzy”, says Norwood, but may be too late in looking for larger deposits. “A global economic downturn or a local housing crash, or both, could turn this investment-led boom into a major slump.”

Reuters Summit-Dubai’s Damac wants govt to curb building costs

original published: http://www.reuters.com/article/governmentFilingsNews/idUSL2663790720070326?pageNumber=2&virtualBrandChannel=0

By Daliah Merzaban
DUBAI, March 26,2007 (Reuters) -

Privately held Dubai developer Damac Properties called on Monday for the Dubai government to help curb soaring construction costs by easing restrictions on foreign contractors and encourage more competition.

Construction costs in Dubai, the Gulf’s international commercial hub, have doubled in the last four years as demand for building materials has outpaced supply and contracting costs have risen, Damac Chairman Hussain Sajwani said.

“There is a lot the government can do about this,” Sajwani told the Reuters Middle East Investment Summit on Monday.

It could cut the time it takes contractors to get a licence, which runs as much as a year, and encourage more foreign contractors to work in the emirate, he added.
Dubai kicked off growth in real estate prices in 2002 by allowing foreigners from outside the Gulf to invest in property.

Gulf Arab governments have been investing windfall oil revenues in developing tourism and infrastructure projects across the Gulf, driving demand for everything from cranes to cement.

“The number of contractors has not increased drastically while the demand remains unlimited,” Sajwani said, adding that contractors have been taking advantage of the lack of supply to increase margins.

Sajwani said the government must ease restrictions on foreign contractors, or construction costs would continue to rise 15-25 percent annually during the next several years.
The government should also market Dubai as a construction opportunity to the contracting industry through roadshows and presentations, he said.

“Instead of a 25 percent margin, contractors’ margins could go back to 10 percent if this happens,” Sajwani said. “The government should encourage the world’s contractors to come to Dubai.”

Rising construction costs have squeezed margins, developers, including Abu Dhabi-controlled Aldar Properties ALDR.AD Chief Executive Ronald Barrott, have said.
But private developers are finding it more difficult to cope because they must pay the market price for land in the UAE, Sajwani said.

Aldar and Dubai’s Emaar Properties EMAR.DU, the largest Arab property developer by market value, have received free land from their respective governments.
“If you don’t take those rising costs into consideration, you could be bleeding,” said Sajwani, who said many private developers in Dubai have been forced to shut down since 2003.

International City complaints – Letters written to Nakheel

original published:

http://www.totallyproperty.com/international-city-dubai-owners-group-forum/1286-international-city-nakheel-complaint-letter-template.html

YOUR NAME
Your address
Your email

20 December 2006

Aaron Richardson
Senior PR Executive
Nakheel,
P.O. Box 17777,
Dubai,
UAE
Tel: +971 4 368 6946

Dear Aaron Richardson,

I am writing to you to complain about the high service charge for my International City apartment that is being forced upon me by Nakheel.

International City is marketed as an “affordable living experience” [1] which is one of the reasons I decided to purchase an apartment in this development. I expected that the service charge would be around AED 6/sf, since more luxurious apartments with facilities such as a sauna, swimming pool and gym in other developments where no more than AED 12/sf. I was therefore very surprised to have recently received an email from my building owner informing me that the service charge will be AED 11.64/sf. The building owner informed me that this was the price set by Nakheel and didn’t have any explanation as to why it had been set to such a high amount. He also mentioned that different buildings had different service charges and some where as much as AED 3/sf less than mine. His opinion on the difference was that it could be due to the different amount of landscaping required between the buildings.

In my contract it states that “the applicable rate shall be advised to the Purchaser by 31st March 2005” [2]. Had this actually been the case I may have decided to sell the apartment before completion and would have had time to do so. Instead the first I hear about the service charge is just two months prior to handover. Nakheel has put me in a difficult position because if I try to complain or get any information about why the service charge has been set to such a high amount I do not get a reply to my emails. Also, I cannot temporarily withhold payment until this matter is resolved because if I don’t pay the service charge I won’t beable to complete handover of the apartment.

I would like a statement from Nakheel informing me how the service charge has been set and what guarantees there are that it won‘t keep increasing every year. I would also like to know why there are such levels of variance between buildings. I cannot believe this is due to different amounts of landscaping required between the buildings, mainly because It is quite well documented in the media how low the wages of the workers are. A bit of extra landscaping shouldn’t require every person in the building to pay an extra AED 3/sf.

I would like to alert you to the fact that there are many other angry customers who have just found out how much their service charge is [3]. The UK media seems to be on a mission these days to report any negative aspects of the Dubai property market. There are a growing number of frustrated International City customers looking for any way to get their message out to force Nakheel to address their concerns. This could result in their grievances been reported in a story in the overseas property column of a prominent newspaper. As a Senior PR executive I’m sure you can see that this would not be good for Nakheel.

[1] http://www.internationalcity.ae/home.php
[2] International City Unit Sale & Purchase Agreement. Terms and Conditions section 10.3 (page 12)
[3] Totally Property International city forum
http://www.totallyproperty.com/international-city-dubai-owners-group-forum/

Sincerely,

YOUR NAME

Reuters Summit-Dubai’s Damac wants govt to curb building costs

original published: http://www.reuters.com/article/governmentFilingsNews/idUSL2663790720070326?pageNumber=2&virtualBrandChannel=0

By Daliah Merzaban
DUBAI, March 26,2007 (Reuters) -

Privately held Dubai developer Damac Properties called on Monday for the Dubai government to help curb soaring construction costs by easing restrictions on foreign contractors and encourage more competition.

Construction costs in Dubai, the Gulf’s international commercial hub, have doubled in the last four years as demand for building materials has outpaced supply and contracting costs have risen, Damac Chairman Hussain Sajwani said.

“There is a lot the government can do about this,” Sajwani told the Reuters Middle East Investment Summit on Monday.

It could cut the time it takes contractors to get a licence, which runs as much as a year, and encourage more foreign contractors to work in the emirate, he added.
Dubai kicked off growth in real estate prices in 2002 by allowing foreigners from outside the Gulf to invest in property.

Gulf Arab governments have been investing windfall oil revenues in developing tourism and infrastructure projects across the Gulf, driving demand for everything from cranes to cement.

“The number of contractors has not increased drastically while the demand remains unlimited,” Sajwani said, adding that contractors have been taking advantage of the lack of supply to increase margins.

Sajwani said the government must ease restrictions on foreign contractors, or construction costs would continue to rise 15-25 percent annually during the next several years.
The government should also market Dubai as a construction opportunity to the contracting industry through roadshows and presentations, he said.

“Instead of a 25 percent margin, contractors’ margins could go back to 10 percent if this happens,” Sajwani said. “The government should encourage the world’s contractors to come to Dubai.”

Rising construction costs have squeezed margins, developers, including Abu Dhabi-controlled Aldar Properties ALDR.AD Chief Executive Ronald Barrott, have said.
But private developers are finding it more difficult to cope because they must pay the market price for land in the UAE, Sajwani said.

Aldar and Dubai’s Emaar Properties EMAR.DU, the largest Arab property developer by market value, have received free land from their respective governments.
“If you don’t take those rising costs into consideration, you could be bleeding,” said Sajwani, who said many private developers in Dubai have been forced to shut down since 2003.

International City complaints – Letters written to Nakheel

original published:

http://www.totallyproperty.com/international-city-dubai-owners-group-forum/1286-international-city-nakheel-complaint-letter-template.html

YOUR NAME
Your address
Your email

20 December 2006

Aaron Richardson
Senior PR Executive
Nakheel,
P.O. Box 17777,
Dubai,
UAE
Tel: +971 4 368 6946

Dear Aaron Richardson,

I am writing to you to complain about the high service charge for my International City apartment that is being forced upon me by Nakheel.

International City is marketed as an “affordable living experience” [1] which is one of the reasons I decided to purchase an apartment in this development. I expected that the service charge would be around AED 6/sf, since more luxurious apartments with facilities such as a sauna, swimming pool and gym in other developments where no more than AED 12/sf. I was therefore very surprised to have recently received an email from my building owner informing me that the service charge will be AED 11.64/sf. The building owner informed me that this was the price set by Nakheel and didn’t have any explanation as to why it had been set to such a high amount. He also mentioned that different buildings had different service charges and some where as much as AED 3/sf less than mine. His opinion on the difference was that it could be due to the different amount of landscaping required between the buildings.

In my contract it states that “the applicable rate shall be advised to the Purchaser by 31st March 2005” [2]. Had this actually been the case I may have decided to sell the apartment before completion and would have had time to do so. Instead the first I hear about the service charge is just two months prior to handover. Nakheel has put me in a difficult position because if I try to complain or get any information about why the service charge has been set to such a high amount I do not get a reply to my emails. Also, I cannot temporarily withhold payment until this matter is resolved because if I don’t pay the service charge I won’t beable to complete handover of the apartment.

I would like a statement from Nakheel informing me how the service charge has been set and what guarantees there are that it won‘t keep increasing every year. I would also like to know why there are such levels of variance between buildings. I cannot believe this is due to different amounts of landscaping required between the buildings, mainly because It is quite well documented in the media how low the wages of the workers are. A bit of extra landscaping shouldn’t require every person in the building to pay an extra AED 3/sf.

I would like to alert you to the fact that there are many other angry customers who have just found out how much their service charge is [3]. The UK media seems to be on a mission these days to report any negative aspects of the Dubai property market. There are a growing number of frustrated International City customers looking for any way to get their message out to force Nakheel to address their concerns. This could result in their grievances been reported in a story in the overseas property column of a prominent newspaper. As a Senior PR executive I’m sure you can see that this would not be good for Nakheel.

[1] http://www.internationalcity.ae/home.php
[2] International City Unit Sale & Purchase Agreement. Terms and Conditions section 10.3 (page 12)
[3] Totally Property International city forum
http://www.totallyproperty.com/international-city-dubai-owners-group-forum/

Sincerely,

YOUR NAME

Dubai – Lawyer says check your contract first

Lawyer says check your contract first
Helga Jensen –Forde, Freelance Writer

Dubai has gone some way towards ensuring the rights of property owners, but a feeling persists that more will need to be done to get developers to translate promises into reality.

It is very easy to become carried away with glossy brochures and thoughts of a beachfront home. But it must not be forgotten that buying a property is one of the biggest investments one will ever make.

To ensure that the investments are protected, the legal side to buying property should also be taken into consideration — every time.

“The laws are in place to protect homeowners to some degree, however the contracts are definitely biased in favour of the developers,” articulates Carol Alderson, a practising lawyer and Partner at Al Midfa & Associates.

“Most contracts I see are distinctly one-sided and becoming increasingly more so.

“Some contracts don’t even refer to the title. When you buy a property you should know this. A number of contracts do not define the amount of the service charge.

“One other element is that the contract between the master and sub-developer is often cut and pasted and the contract that you, as end-user, receive is not particularly relevant.”

Despite a number of ambiguities in the sales contracts, it does seem that many investors just do not care and not reading the fine print closely enough.

Alderson says, “It is very difficult to persuade certain developers to change their contracts.

“I may represent one client but the developer will say that, because they have sold a hundred other apartments and no one has complained, why should they change it for me? A lot of people are buying property here and not consulting a lawyer or reading their contract thoroughly.”

Over the last few months, the market has been rife with instances of steep increases in maintenance charges at some of the leading residential developments in the city.

“The increase in maintenance charges has been a challenge. It should be the right of every homeowner to see a copy of the accounts, but a number of developers are refusing to give these out,” the lawyer notes.

Car parking is quite an issue for apartment owners.

“The Dubai Municipality stipulates that every apartment should have parking, but some people have purchased an apartment and are then subsequently told that they have to pay an extra Dh75,000 for a space.”

This is where additional laws or even updates on the existing ones can come in real handy, for homeowner and developer alike.

Alderson says, “The law here is still not as complete as it could be. I would like to see an Unfair Contract Law, which would stop the bias in favour of one party.

“In addition, there should be a Misrepresentation Act, which would prevent developers and real estate agents from advertising any developments that are not as they will ultimately be constructed. ‘Caveat emptor’ springs to mind, which means ‘Let the buyer beware’.”

To read this and many other articles in full get the latest issue of PropertyWeekly.

Dubai – Lawyer says check your contract first

Lawyer says check your contract first
Helga Jensen –Forde, Freelance Writer

Dubai has gone some way towards ensuring the rights of property owners, but a feeling persists that more will need to be done to get developers to translate promises into reality.

It is very easy to become carried away with glossy brochures and thoughts of a beachfront home. But it must not be forgotten that buying a property is one of the biggest investments one will ever make.

To ensure that the investments are protected, the legal side to buying property should also be taken into consideration — every time.

“The laws are in place to protect homeowners to some degree, however the contracts are definitely biased in favour of the developers,” articulates Carol Alderson, a practising lawyer and Partner at Al Midfa & Associates.

“Most contracts I see are distinctly one-sided and becoming increasingly more so.

“Some contracts don’t even refer to the title. When you buy a property you should know this. A number of contracts do not define the amount of the service charge.

“One other element is that the contract between the master and sub-developer is often cut and pasted and the contract that you, as end-user, receive is not particularly relevant.”

Despite a number of ambiguities in the sales contracts, it does seem that many investors just do not care and not reading the fine print closely enough.

Alderson says, “It is very difficult to persuade certain developers to change their contracts.

“I may represent one client but the developer will say that, because they have sold a hundred other apartments and no one has complained, why should they change it for me? A lot of people are buying property here and not consulting a lawyer or reading their contract thoroughly.”

Over the last few months, the market has been rife with instances of steep increases in maintenance charges at some of the leading residential developments in the city.

“The increase in maintenance charges has been a challenge. It should be the right of every homeowner to see a copy of the accounts, but a number of developers are refusing to give these out,” the lawyer notes.

Car parking is quite an issue for apartment owners.

“The Dubai Municipality stipulates that every apartment should have parking, but some people have purchased an apartment and are then subsequently told that they have to pay an extra Dh75,000 for a space.”

This is where additional laws or even updates on the existing ones can come in real handy, for homeowner and developer alike.

Alderson says, “The law here is still not as complete as it could be. I would like to see an Unfair Contract Law, which would stop the bias in favour of one party.

“In addition, there should be a Misrepresentation Act, which would prevent developers and real estate agents from advertising any developments that are not as they will ultimately be constructed. ‘Caveat emptor’ springs to mind, which means ‘Let the buyer beware’.”

To read this and many other articles in full get the latest issue of PropertyWeekly.

Real Estate Dubai – Delay-Delay Unhappy with actions of agents

Unhappy with actions of agents
Last Updated : Friday 22 Feb, 2008 – 6 comments

It’s becoming more and more obvious that the Dubai Real Estate market will continue indefinitely to be held artificially high with the help of investors and their agents. I still haven’t met one single agent who seems to also want to take the buyer/tenants issues seriously.

They are all hyping up the market, and they are all flogging the same properties, but at different prices.. They seem obsessed with outbidding each other in order to get the deal done, and in the process leaving tenants and buyers holding the shitty end of the stick.
I come from a North Western European country where the government is now in the process of ratifying a law making re-sales of unfinished properties illegal! Now there’s a thought????? And, how about making it illegal for a property owner to use several different agents for the sale/lease of the same property?
Dubai needs LONG TERM committed residents and buyers of properties, not just the ones out to make big money in a hurry!

Hagar the Horrible
Dubai

6 Comments

Posted by Riaz
I fully agree with you on the status of the property market. Dubai needs a policy of making sale of unfinished properties illegal. This would also stop the collection of advance money against attractive brochures and never delivering the finished property. Not one property in dubai has been completed with the promised landscape in the brochures. I think it is wiser to stay in rented properties if one must stay in dubai at all.

Posted by shaheen
I was checking the price of a studio flat in Horizon Tower Ajman and was quoted dhs 310,000 dhs 350,000 and dhs 370,000 by 3 different Agents for the same sized flat. I used an Agent to find a tenant for my studio flat in International City. I was shocked that many Agents are charging dhs 3,000 commission when it should be dhs 2,000. When there is a new launch, some investors buy many units, hold on to them and resell them at a high premium. I am sorry to say but RERA needs to be more active. Tenants, Landlords, and Buyers are all being held hostage by Agents. I feel property buyers should do thorough research and not depend on Agents, who have ulterior motives. The property market lacks regulation, it’s just like one big fish market.

Posted by Hook
The real reason that rentals and selling prices are the the way they are are is because of the thieving real estate agents who are (unscrupulously) “advising” their owners and landlords that they can sell/rent their properties for more so that they can earn more commission. This has been a proven fact in many countries over the years and has been documented. Now we have proof of this in the letters above. Do not blame the seller/landlord, blame the thieving real estate agents. ALL of them are into the same racket. There is not ONE honest real estate agent company in town as they are all after your money. Sadly, no one can prove me wrong………………

Posted by lantern
It is a big bad world in the world of property and its terrible that there is so much corruption by these agents. The governmemnt should do something to regulate this and expose these agents and impose fines on them . There should be some kind of consumer protection laws for housing issues with limits for their fees and commisions and various different charges. Expats are being looted and exploited every day and to think that people come here for saving and gaining a tax free income! We will all end up returnig back to our countries older and poorer and without any pensions or support! The bubble lifestyle of Dubai has a big price and is at our expense because the law and system doesnt protect us legally or otherwise!

Posted by Nick
There is a lot of gross generalisation going on in this column. While I agree that the majority of agents whether they be rental or sales agents add very little value but there are some that are ethical. Licenses for individual agents are now being enforced and this should improve conditions. It is obvious to me that the income earnt versus the cost of living in Dubai allows very little opportunity to build wealth – the housing market does. Tell me where you can invest 10% (at low risk) and get 100% return in 18 months? I advise you all to quit bitching and join the “bubble.”

ACI ( Alternative Capital Investment) STORIES IN CONCRETE

Reaching for the skies ?

By Ritwika Chaudhuri
original published: http://www.sterlingp.ae

Through innovative investment concepts, ACI, one of the first few international developers, has firmly established itself as a real estate investment firm with a solid following of investors, both locally and internationally

From the Arabian Desert to a city of skyscrapers — that is how the transformation of Dubai can be described. It is no doubt the Mecca for realty developers, and hence developers from around the world are flocking here to grab a share of the realty boom. Alternative Capital Invest (ACI) is one such fortune-seeker which sees immense potential in today’s Dubai and the years to come and hence, they have entered the market from Germany.

In order to benefit from the many investment opportunities of the dynamic Arab markets, ACI opened its doors in 2004. Though it came initially as an asset management company to fund wealth management, the father-and-son team of Uwe Lohmann (Senior) and Robin Lohmann

(Junior) soon realised that huge investment was being done in the property sector but it offered a smart margin. The first German developer who opened the doors to his fellow countrymen for investment in Dubai real estate, it was a different experience. Compared to European and German markets which are rather strictly regulated and controlled, hampering true development, Dubai so far is rather free from different regulations and hence has given an opportunity to developers — national and international — to spread wings.

So initially, the going was tough for the ‘German duo’ who were more used to stringent regulations, but then they realised that for this market, the sky is the limit. Though the earlier free regime has gradually been replaced with clearly specified rules and regulations to protect consumer interest, according to Robin ‘this is good for the sector.’ And because of this transparency and security of investment in the market, many international developers are eyeing the Dubai real estate sector closely.

Through innovative investment concepts, ACI, one of the first few international developers, has firmly established itself as a real estate investment firm with a solid following of investors, both locally and internationally. ACI was founded as a family entity in Germany and the success of the group has evolved through generations.

The management duo have already injected an impressive investment of more than Dh1 billion in property projects in Dubai, in areas such as Jumeirah Lake Towers, Business Bay and City of Arabia. “As long as the economy of Dubai remains robust, rather expensive properties will continue to be built. And where value properties are being developed in this exciting city, there is ACI,” says the company’s website.

The company entered the market with a mission to leverage the growth opportunities offered by Dubai’s real estate sector through world-class projects that ensure value-for-money investment options for a cosmopolitan clientele. ACI Real Estate is likely to uphold the highest standards in building quality and adhere to delivery schedules to maximise returns on investment for customers, assuring them the most competitive property purchase options. ACI Real Estate’s growth strategy is centered on integrating world-class architecture with technologically advanced engineering practices to deliver unparalleled living environments.

Number of projects

Since its entry into the Dubai market, the German development giant has announced a number of prestigious projects located in some of the most coveted destinations in Dubai like Business Bay, Jumeirah Lake Towers, and City of Arabia to name a few. The company handles both investment and development with top companies like Adnan Saffarini for creating design and managing the project.

ACI describes Dubai Star, their first project, as the brightest star at the Jumeirah Lakes Towers (JLT) where people can share the experience of a different kind, which is elegant and inimitable. Given a choice between Dubai Marina and JLT, ACI chose JLT for a number of reasons. With a realistic foresight, ACI management realised there was a huge demand for mixed use projects in JLT and the same completion deadline for all the buildings ensured that residents would not have to stay at the construction site — a not-so-desirable situation when one pays a huge premium for quality. “One step from the frenetic excitement of the city and you are in a sanctuary of serenity and private luxury. Surrounded by the spectacular views of the deep blue yonder and eternal sunshine, Dubai Star is a heavenly place to unwind. The tower is designed to reflect the architectural theme of the future through a fusion of elements, while retaining a unique style and aesthetic expression of its own. It has retail space, office space and residential luxury.”

Victory Bay is a state-of-the-art, 20-storeyed, x-shaped freehold office tower in the heart of Business Bay that creates unique office layouts with maximum efficiency. Offering 75,702 sq. metres of floor space, Victory Bay provides tenants an extensive range of services and facilities, to ensure that business runs smoothly and is an enjoyable experience. The tower overlooks two main streets and is in close proximity to the Burj Dubai Area and the Dubai International Financial Center. Centrally located within Dubai’s expanding city, there is ease of access to Dubai International airport and Jebel Ali Free Zone.

Victory Bay’s blue structural glazing that encases the floor to ceiling glass façade ensures that the building offers an abundance of natural light across all office space, and magnificent views of Business Bay as far as the Arabian Gulf. Victory Bay provides office spaces that can easily be divided into smaller modules without losing easy accessibility. With state-of-the-art technology throughout the building, including CCTV with 24-hour monitoring, Wi-Fi, high-speed Internet connection, 24-hour security and 24-hour maintenance, tenants establishing them at Victory Bay will do so in the knowledge that they have chosen a prime position with the best of facilities. The tower offers a gamut of recreational facilities featuring a restaurant and café with outdoor seating on the podium level, a fully-equipped gymnasium, sauna, rest area, change and locker facilities and outdoor swimming pool, ensuring tenants can make the most of their leisure time. The tower also offers fine dining restaurants, cafes and shopping outlets for some retail therapy.

The other landmark project of the company is Q Sami Tower, once again a commercial building in the Business Bay . Q Sami Tower provides the best working environment where modernity meets elegance.

To keep one’s business moving with time, the tower features state-of-the art VOIP technology, wireless internet technology as well as intelligent fully integrated management systems. The Q Sami Tower offers a successful lifestyle equipped with every amenity needed to make business a real pleasure. Top range recreational facilities at the Q Sami Tower, include state-of-the art leisure facilities and retail shops, providing the end-user with a positive and healthy work environment.

Wings of Arabia

Located in the City of Arabia, Wings of Arabia is designed keeping in view the superior taste of those who never settle for anything less than the best and wish to lead a richer life. Wings of Arabia boasts of commercial and office spaces featuring some of the finest amenities and specifications to make it the preferred avenue for entering a whole new world of business. Uniquely, every office area is beamless, offering maximum potential to exploit the location. Other spectacular advantages are a totally pollution-free, all-green environment. Truly, a great environment for top class business! It is the epitome of luxury living. Wings of Arabia has homes that have the spirit and liveliness to make life more refreshing. The tower is home to premium apartments, which complement the lifestyle of its residents. A world where each day is a revelation of life-styling moments tossed up with choicest of luxuries. Combining efficacy with refinement, Wings of Arabia is a place like no other.

The City of Arabia is an extraordinary development in the heart of Dubai Land, one of the biggest and best leisure, entertainment and tourism centres in the world, comprising business and administrative offices, schools and clinics, luxury apartments, shops, galleries and restaurants. Split into four unique areas, the development is served by its own monorail system to transport residents and visitors around the site with a plan to link it with the Dubai Light Rail Project. The diversity of Dubai converges downtown at the City of Arabia.

So what makes ACI different from others? Most of the renowned developers

Emaar’s communication gap

http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?HeadlineID=2257
By Frank Kane on Thursday, February 14 , 2008
Emirates Business24-7

One of my all-time favourite movie lines is from the 1970s film Cool Hand Luke: “What we’ve got here is a failure to communicate,” says one of the grisly characters in the jail-break drama.

The phrase came back to mind while mulling over the latest events at Emaar, Dubai’s champion in the property business and one of the Emirates’ great standard-bearers on the global scene. For some investors, Emaar is almost a proxy for Dubai and trading in the shares accounts for as much as 40 per cent of the value of the Dubai Financial Market.

So what Emaar says and does is important to the DFM and for Dubai, and this is why there is a crucial need for clarity and accuracy when the company is talking to its shareholders. Sadly this has been lacking recently.

There have been three recent occasions in as many weeks when communications misunderstandings have caused concern among shareholders and volatility in the share price. First there was the confusion about this year’s growth projections, which led some brokers to mistakenly forecast a flat 2008 for Emaar; then there was the uncertainty over the $15 billion flotation of Emaar-MGF in India – calling off the IPO so soon after confident statements that it would go ahead caused more jitters.

Yesterday, there was the crazy mix-up over the use of the word “minimum”. In a statement in Arabic to the DFM on Tuesday night, Emaar appeared to be limiting dividends to 20 per cent of par value for the foreseeable future. That would amount to a dividend yield of less than two per cent, and, if it had been true, be guaranteed to send big investors into panic.

When the English version of the statement appeared, it was obvious that Emaar was committing itself to that rate of shareholder return as a base-level, and the actual pay-out would depend on the usual factors – how well the company was doing in local and global markets and what capital requirements it had to meet in any given year. But, crucially, there was no upward cap put on dividend policy.

For a company like Emaar, it is eminently sensible to take a prudential view of dividend policy. Building a global brand takes long-term financial commitment, and that cannot be achieved if shareholders expect an ever-increasing dividend pot each year. Emaar’s long-termism in this respect is laudable.

But it must also think long-term about its share price. In the confusion over dividend policy, alarming rumours were doing the rounds yesterday. Emaar wanted to depress the share price ahead of a buy-back, it was suggested, or wanted to exert pressure on small, troublesome shareholders to sell the stakes and get big institutions instead. I have no idea whether such rumours are true, but they did cause unnecessary volatility in the share price, and would not have been heard at all if the message had been clear in the first place.

It is not difficult to see how, in a huge multi-cultural organisation like Emaar, such mistakes might happen. I am sure the company and its advisers has a sophisticated understanding of, and commitment to, the best possible communications strategy. But they must ensure that they bridge the gap between understanding and implementation on these crucial issues of shareholder concern.

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Last Update at 9:15 am on February 14, 2008

Emaar’s communication gap

http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?HeadlineID=2257
By Frank Kane on Thursday, February 14 , 2008
Emirates Business24-7

One of my all-time favourite movie lines is from the 1970s film Cool Hand Luke: “What we’ve got here is a failure to communicate,” says one of the grisly characters in the jail-break drama.

The phrase came back to mind while mulling over the latest events at Emaar, Dubai’s champion in the property business and one of the Emirates’ great standard-bearers on the global scene. For some investors, Emaar is almost a proxy for Dubai and trading in the shares accounts for as much as 40 per cent of the value of the Dubai Financial Market.

So what Emaar says and does is important to the DFM and for Dubai, and this is why there is a crucial need for clarity and accuracy when the company is talking to its shareholders. Sadly this has been lacking recently.

There have been three recent occasions in as many weeks when communications misunderstandings have caused concern among shareholders and volatility in the share price. First there was the confusion about this year’s growth projections, which led some brokers to mistakenly forecast a flat 2008 for Emaar; then there was the uncertainty over the $15 billion flotation of Emaar-MGF in India – calling off the IPO so soon after confident statements that it would go ahead caused more jitters.

Yesterday, there was the crazy mix-up over the use of the word “minimum”. In a statement in Arabic to the DFM on Tuesday night, Emaar appeared to be limiting dividends to 20 per cent of par value for the foreseeable future. That would amount to a dividend yield of less than two per cent, and, if it had been true, be guaranteed to send big investors into panic.

When the English version of the statement appeared, it was obvious that Emaar was committing itself to that rate of shareholder return as a base-level, and the actual pay-out would depend on the usual factors – how well the company was doing in local and global markets and what capital requirements it had to meet in any given year. But, crucially, there was no upward cap put on dividend policy.

For a company like Emaar, it is eminently sensible to take a prudential view of dividend policy. Building a global brand takes long-term financial commitment, and that cannot be achieved if shareholders expect an ever-increasing dividend pot each year. Emaar’s long-termism in this respect is laudable.

But it must also think long-term about its share price. In the confusion over dividend policy, alarming rumours were doing the rounds yesterday. Emaar wanted to depress the share price ahead of a buy-back, it was suggested, or wanted to exert pressure on small, troublesome shareholders to sell the stakes and get big institutions instead. I have no idea whether such rumours are true, but they did cause unnecessary volatility in the share price, and would not have been heard at all if the message had been clear in the first place.

It is not difficult to see how, in a huge multi-cultural organisation like Emaar, such mistakes might happen. I am sure the company and its advisers has a sophisticated understanding of, and commitment to, the best possible communications strategy. But they must ensure that they bridge the gap between understanding and implementation on these crucial issues of shareholder concern.

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Last Update at 9:15 am on February 14, 2008

US developer in $1bn Dubai property test case

US developer in $1bn Dubai property test case
By Simeon Kerr in Dubai /financialtimes/ ft.com

Published: February 1 2008 02:00 | Last updated: February 1 2008 02:00

A US real estate developer is suing a quasi-governmental Dubai firm for $1bn in damages, claiming its investment in a project in the emirate’s property boom was unjustly cancelled amid a contractual dispute.

The developer, Capital Partners, had in July 2005 made what was planned to be one of the largest foreign investments in the region’s business hub, when it announced plans for River Walk, a mixed-use $1bn project in the busy internet business park located on prime land near the trunk of the reclaimed Palm Island.

But the deal soon turned sour amid recriminations over the legal title of the plot on which the US developer planned to build apartments, hotels and offices.

The dispute is now in front of the Dubai International Arbitration Centre – a test case for foreign investors seeking to resolve contractual disputes under the centre’s new regulations passed last year to create a level legal playing field for foreign businesses in conflict with local interests. The prospect of protracted court cases in the emirate’s antiquated legal system has put off many foreign companies from pursuing litigation.

The dispute revolves around the existence of a protected archaeological site owned by the emirate’s tourism department within the 1.7m sq ft plot. In October 2005, Capital Partners says it refused to make a second scheduled payment as its partner, Dubai’s Technology, Electronic Commerce & Media Free Zone, or Tecom, had illegally sold it land that belonged to another government entity.

“Tecom misrepresented what they own,” said Jonathan Wride, managing director of Capital Partners. “I am very confident we will receive a judgment in our favour.” Capital Partners, which filed in August, hopes to receive a result in the summer.

Tecom, however, says it had every right to cancel the contract because of the non-payment. The media and internet business cluster owned by the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, claims the archaeological site was never brought up by the US investors before they failed to meet the tight payment schedules. Tecom, in any case, owned the archaeological site, an official said.

The case should become a timely test for DIAC’s new arbitration code, adopted last year, which closed loopholes in the centre’s regulations and aims to give investors a fair hearing in Dubai, where the business interests of the government, royal family and powerful merchant class are far reaching.
Copyright The Financial Times Limited 2008

Developers buying units for resale

Emirates Business 247
12 February 2008
The rising per square feet rates in upcoming real estate projects – especially along Sheikh Zayed Road – have encouraged some developers to enter the secondary market to buy out units they had previously sold at less than Dh1,000 per sq ft.

They plan to hold such units until construction is completed and then offload them at the much higher prevailing rates, which are going up almost on a daily basis, industry insiders told Emirates Business.

At least two developers in the Business Bay area have been active in the secondary real estate market, with one of them offering to buy back units at Dh1,500 to Dh1,600 per sq ft, they pointed out.

This phenomenon emerged when such developers saw the likes of Emaar and Deyaar sell their new launches in the same Business Bay area for prices ranging from Dh2,100 to Dh3,000 per sq ft.

Sources close to one of the developers dabbling in the secondary market said he has re-bought unfinished units he had previously sold at a small premium and now plans to resell the same units for Dh2,500 per sqft or higher.

Prices in the Business Bay area have risen substantially in the past few weeks ranging from Dh1,600 to Dh2,200 per square foot or higher depending on the property, its amenities and its location. When projects were first launched in the area, buyers had been able to purchase units at Dh800 to Dh1,200 per sq ft. Some of the owners are now offering the same properties in the secondary market at up to Dh2,200 per sq ft.

Real estate agents predict that the lower levels in the current price ranges will vanish in the short to medium term and that average prices in the Business Bay area will edge towards the upper limit of Dh2,400 or more.

By Eudore R Chand

© Emirates Business 247 2008