Dynasty Zarooni Dubai back in the Headlines – Another crimninal complaint ?

original source dailymail uk

For successful London jeweller Nadeem Osman, Dubai had all the bling in the world. Like thousands of others, he loved the city’s fast life, with its sports cars, glitzy shopping malls and super-luxury hotels. And, of course, its sun and fabulous beaches.

The 37-year-old businessman from Balham, South London, holidayed there at least twice a year with his wife and even thought of moving there eventually, away from the rain and cold of England.

So 14 months ago, as an investment on the side, Mr Osman decided to buy four apartments in the city, which he planned to rent and also use as his holiday homes.

Losing its sparkle: Jeweller Nadeem Osman bought four flats in Dubai last year, just before the property market there crashed

He paid £580,000 for two off-plan apartments in Villa Caria, a residential block in Jumeirah South, and two more in a proposed hotel on the Dubai Waterfront, known as Hotel K. But his timing could not have been worse, with the Dubai property market then going into free fall: down 32 per cent in the first quarter of this year and 47 per cent in the second, according to Knight Frank.

Assetz, a property investment company, estimates that the fall may reach 70 per cent this year. Mr Osman bought the apartments through Dynasty Zarooni (DZ) – one of the city’s biggest real estate companies, with a portfolio of properties worth £219million.

He paid the full sum upfront, assured that the money would be put into an escrow account which protects a buyer’s money until the work is complete.

In January, one of the directors of DZ was arrested on a £60million fraud allegation – and since released without charge – but work on Hotel K has not even started. It is scheduled to finish by 2011. The company does not even own the land on which it was to be built.

Villa Caria was supposed to be completed by the end of this year, but DZ has told him it may take a further two years. Mr Osman has also been told that his money was not put into an escrow account, and he is unable to get any back.

‘I don’t know what to do,’ he said. ‘If it was in this country I could do something about it, but in Dubai it’s so difficult as there is a huge backlog in the courts.’

Dynasty Zarooni has declined to comment after repeated attempts to contact it.

Mr Osman has now formed a group with ten other investors to decide whether to take legal action or file a criminal case.

Dubai’s courts are struggling with a mountain of property cases totalling £3billion – as much as £500million may involve British investors.

Stuart Law, of Assetz, says Britons, who were the largest Western investors, were partly responsible for the crash as they inflated prices through their highly geared buy-to-let schemes.

‘We’ve known of properties that were sold again and again about ten times one after another – it was good as each person made a profit, but the person who was left with the contract at the last was in trouble,’ said Mr Law.

Read more: http://www.dailymail.co.uk/property/article-1228306/Why-Dubai-lost-sparkle-UK-jeweller.html#ixzz0X3PuoMQ0

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

Fraud in Dubai and the Gulf Region – Just the tip of the iceberg

source The National

It is more than a year since Dubai launched a highly publicised clampdown on corruption, which led to the arrest of several executives from some of the emirate’s top property developers and financial institutions.

But while Dubai grabbed the international headlines, it represented just the tip of the iceberg in a region that has been identified as a hot spot of corruption.

Kroll, an international risk consultancy, said last week the Middle East was the world’s only region to see a rise in fraud in the past year. It singled out corruption and bribery as the single largest threats.
“For seven out of 10 cases of fraud, it had the highest incidence of any region, including bribery and corruption,” Kroll said. Average financial losses from corruption doubled to US$11.5 million (Dh42.2m) this year from $5.6m last year, it said.

read more of this article….

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….

Hydra Properties to appeal against buyers court victory

source Zawya
Hydra Properties says it will appeal against a court decision in favour of two property buyers in its troubled Hydra Village development.

The case, brought by two European women, was recently heard through the Court of Appeal in Abu Dhabi, a source close to the couple said.

If Hydra loses the appeal, the investors will be refunded the money they have so far paid to the project.

“In principle, they have won the case, and through the legal system they should have the money released to them,” said the source.

Between 10 and 20 more cases by investors were under way against Hydrawhile a further 150 claimants were seeking legal advice, the source said. The cases are being handled by MIO Lawyers and Legal Consultants, based in Abu Dhabi.

Ali bin Sulayem, the chief executive of Hydra Properties, said the company would appeal against the decision and it was still open to negotiating with investors out of court.

“I think that anyone, when there is a dispute, has the right to file cases,” he said. “This is our right to appeal, we have to use it. But I am sure the door of negotiation is still open. It does not mean that if a case is filed against our company that we cannot still find a way of settling this matter.”

The legal action is the consequence of a long-running battle between the investors and Hydra over contract changes, price rises on previously sold properties and demands to make payments for homes that are significantly delayed.

Talk of taking the firm to court started in June, when the Hydra Litigation Group was formed among members of the Hydra Investors Group. About 150 out of 350 people joined the litigation group, with about 50 per cent now pursuing the legal route, said Karl Howard, the co-chairman of the group.

Many of the investors had hoped to settle their contract issues – which included price hikes for property size increases due to an overhaul of the project’s masterplan – amicably with the firm.

But the final straw for most came recently when they received a letter, seen by The National, from Hydras legal department saying their units would be cancelled and all money kept if they failed to sign the new version of the contract by October 15.

“I don’t think you can threaten people to sign a contract that’s not acceptable,” said Graeme Perry, the deputy chairman of the Hydra Investors Group. “It’s got to the stage where people are saying ‘no’ and are lodging court cases.”

One investor, who has started legal proceedings and is hoping to recoup Dh450,000 (US$122,515), said: “We were trying to negotiate with HydraHydraLoading…, but then it got to the point when we realised there was no hope.”

Another investor, who has also started legal proceedings, said: “I’ve had enough now, it’s deeply frustrating. I’ve paid Dh400,000 and am not paying any more … I’m interested in getting out of this and getting my money back.”

More investors are expected to pursue legal action. “We do want to go ahead with it [legal action] as we don’t just want to sit back,” said Matt O’Hara, who has so far paid Dh250,000 towards a villa at Hydra Village.

“But we’re just weighing things up at the moment.”

A lawyer representing the investors at MIO declined to comment.

In June, Hydra tried to appease Hydra Village investors by giving those who had paid 50 per cent or more a payment break until the middle of next year, while penalties for late payment for those who had invested less were waived.

The company, which is owned by The Royal Group and at the time was headed up by Sulaiman al Fahim, the new owner of Portsmouth Football Club in England, also assured investors their homes would be built. The project was supposed to be delivered this year, but is now unlikely to be finished until 2011.

Hydrais one of dozens of developers that sold off-plan property to a market dominated by speculators during the boom, and which is now struggling to get buyers to keep up their payments. The situation has led to a rise in property disputes in Dubai, with Hydras being the first major dispute of its kind in Abu Dhabi.

According to Saud Masud, the head of research and senior analyst of real estate at UBS bank, many buyers did not question the fundamentals of their investments. Hydra Village was sold to investors with promises of a five-star hotel, swimming pools, fountains and significant green areas. But none of these features exist in the revised masterplan.

“In general, if you look at the amount of investment that flowed two years ago, you can’t really argue the case that they were sound investments,” Mr Masud said.

“It was about speculation. Investors didn’t really question the fundamentals of the company, the portfolio, timelines or finances. We all knew this was a pay-as-you-go model.”

Mr Masud said projects were being delayed before the fallout from the economic downturn. “The writing was already on the wall, even in 2006. Handovers were delayed significantly.”

By Angela Giuffrida and Nathalie Gillet
The National 2009

Damac Dubai – UK TV news investigation

Dubai – 29. July 2009

In a report broadcast Monday night in the UK, Channel 4 News spoke to unhappy British investors with property developer Damac who have yet to see a return on their money in the Dubai market.

While some wanted quick returns, others simply wanted an apartment in the sun – not least David Hunter of Oxfordshire who said he had handed over £60,000, so far, for an apartment at Damac’s Lotus development.

Hunter said a Damac representative told him at the time (February 2007) of purchase that construction on the development had already started.

Three months later Hunter found out otherwise when it emerged that the plot was occupied by a UNICEF building. Hunter not surprisingly said he ’should have been told’.

Citing documents, Channel 4 claimed Damac had been selling developments off-plan without having title to the land in the first place – a practice outlawed by the Dubai Government last August.

Another document, dated from ‘late last year’ alleged that almost one quarter of the firm’s projects had been put on hold.

Meanwhile, a Harrow NW London resident who bought off-plan in the Flamingo Heights development 18 months ago, told the broadcaster he had paid three instalments totalling £70,000.

”I asked them in writing what the current state (of the development) was before I made my investment. I was assured that the foundations had been laid and construction was well under way at the site.”

With the Flamingo Heights development showing no evidence of construction when Channel 4 recently visited it Ludmila Yamalova of Al Sayyah Legal Consultants – to whom Channel 4 took the investor’s complaint – said he may have a case as a statement claiming foundations that had been laid when in fact they hadn’t, could amount to misrepresentation.

Erik Pekarski, former VP Customer Relations at Damac said the line being put out to customers was that ‘progress is ongoing, development is ongoing and construction is ongoing’.

Customers would continue to scream and yell at you as they should, because they had been put off for months, he added.

Damac has, in some cases, since offered alternative flats either complete, or near completion. However, many investors Channel 4 spoke to said they wanted their money back but, like the Harrow investor, had been informed by Damac that there is a ‘no refund’ policy.

When asked about the ‘no refund’ policy an unnamed former manager at Damac said the company took a tough line. David Hunter meanwhile says he has hired a lawyer.

In a statement to Channel 4 News the company confirmed it didn’t have a refund policy, except within ‘the provisions of the regulatory framework’.

It also denied any allegations of wrongdoing and said investors interviewed by the broadcaster were ‘not a representative group’. The company added that it had no intention or policy to mislead customers.

Addressing the allegation that the company had claimed foundations had been laid at the Flamingo Heights development when in fact they hadn’t Damac said: ”It is possible to have a rogue element who communicated information which was inaccurate and not endorsed.”

It added that the Flamingo Heights project tender is due to go out shortly.

source of this report Arabian Business

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 

Dubai – Forbes – Al Fajer Properties Scandal – Battle over the Books – Behind the $870 million ”rescue” of a royal developer

original published Forbes

March 08. 2009 12:36AM UAE / March 8. 2009 8:36PM GMT

On Feb. 3, Al-Fajer Properties, a high-profile real estate development firm owned by the brother in law of Dubai’s ruling sheik, announced a 3.2 billion dirham ($871.2 million) restructuring of its operations. Under the leadership of its new president, Sheik Maktoum bin Hasher al-Maktoum–the eldest son of the company’s owner, and nephew of Dubai’s ruling sheik–the company explained it had liquidated its land bank and sold off its remaining inventory after a “rigorous” business review in order to strengthen its balance sheet.

But sources close to Al-Fajer tell Forbes that the restructuring was actually a wholesale “rescue” from financial ruin as an independent entity, after nearly three years of alleged mismanagement under former manager Shahram Abdullah Zadeh, a flamboyant, Iranian-born businessman who was fired last year and who claims to still be owed at least $1.9 billion by Al-Fajer.

Forbes has consulted documents–including bank statements, company contracts and employee interviews drafted by an auditing firm, which was called in to help conduct the business review last year–that purportedly tell the story of how Zadeh allegedly forged company contracts, kept fraudulent, unaudited accounts and moved money back and forth between Al-Fajer Properties and other companies owned by him.

Sources close to Al-Fajer say the new president, Maktoum, was called in by his father to fix the so-called “financial shambles” after an employee indirectly alerted the elder sheik to the company’s financial situation by requesting cash in early 2008. Documents show a cash balance of approximately $8.2 million when Maktoum arrived, which was restored to $163.4 million to $190 million 60 days later.

The sheik, say sources close to the company, did this by unwinding investments that would have saddled Al-Fajer with massive liabilities–in the “hundreds of millions” of dirhams–narrowly escaping the real estate slide that hit Dubai months later after the collapse of U.S. investment bank Lehman Brothers in September. Since then, property prices have fallen an estimated 20% to 25%.

Al-Fajer’s cash balance as of February 2009 was not made available to Forbes, but sources close to the company hint that nearly all of it has been plowed back into construction projects.

Zadeh flatly denies any wrongdoing and claims that the so-called “rescue” was a full-blown theft of a company he had owned and financed alone throughout the course of its existence. Moreover, he denies that the company was a financial mess and claims that his erstwhile partner, Maktoum, breached his trust to take control of a successful firm.

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“I was the sole investor, and Al-Fajer Properties was my company,” he says. “Sheik Hasher Maktoum has not invested a single dirham into the company; his only contribution has been the real estate license.”

The payment for this license, which cost $82,000, sat in a bank account from the company’s inception in 2004 and was not used as operational capital, Zadeh says.

Zadeh claims that Maktoum, his father and others together “cooked the books” and took control of Al-Fajer Properties while he was detained in jail by the authorities, without being charged, between February and April 2008. After being blindfolded, tortured and interrogated for weeks about unfounded bribery allegations and his operations at Al-Fajer in detail, Zadeh says he emerged from jail only to find a letter demanding he cease all involvement with the company.

Zadeh says he believes his detention was the result of a false report. Sources close to Al-Fajer say that any such claims did not come from them.

The battle has already spilled into the courts, a potentially embarrassing development for a company linked to Dubai’s ruling family. After filing two unsuccessful criminal complaints against Al-Fajer last year, Zadeh said his lawyers filed a civil lawsuit against the company on Feb. 26 at the Dubai Courts, claiming he was still owed $1.9 billion.

Although Al-Fajer Properties is said to have filed a criminal complaint against Zadeh in late February, alleging fraud and embezzlement of funds, the company’s lawyer would not confirm this. “I am aware of no suits against me,” Zadeh says.

Zadeh does not deny moving funds between Al-Fajer and other companies he owns, but claims that he put the money into the company’s account in the first place and later took it back as his “investment.” He said that no money was missing, though he admitted there had been no auditing of the company accounts because the firm was understaffed and had big ambitions.

Sources close to Al-Fajer also confirm that no money appeared to be missing; Zadeh is said to have made up the balance of withdrawn funds with later payments back into the firm.

The corporate tussle casts no direct shadow on the reputation of Dubai’s ruling family, even though Al-Fajer’s operators are one degree removed from Sheik Mohammed bin Rashid al-Maktoum. But it’s another example of the dark side of Dubai, one more blow to its image as a spectacular hub for global investment. After recently being forced to borrow $10 billion from the United Arab Emirates’ central bank in Abu Dhabi to help its enterprises pay short-term debts (see “Dubai’s Jolt Back To Reality”), Dubai is bracing for more bad news as its gross domestic product growth plunges from 8% or so in 2008 to an expected 2.5% this year.

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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.

Al Fajer Properties – April 8 , 2009 – Dubai court postpones 1.9 Billion Dollar case against Sheikh Maktoum Hasher bin Juma Al Maktoum, Sheikh Hasher Maktoum Juma Al Maktoum and Sheikha Maryam

DUBAI, Apr 08, 2009 (AFP) –

A Dubai court postponed on Wednesday a 1.9 billion dollar lawsuit by Shahram Abdulla Zadeh ( Iranian) gainst members of the ruling family over an allegedly lost property investment to give the defence time to prepare.

Lawyer Hussein al-Jaziri asked for a “long period of time to respond to the case,” but the judge set May 4 as the date for the next hearing.

No one represented the defence during the first hearing, on March 11.

Iranian Shahram Abdullah Zadeh claims he invested the 1.9 billion dollars as the sole capital of a company, Al-Fajer Properties

Under United Arab Emirates law, only UAE and Gulf citizens may register property firms, and ruling family member Sheikh Hasher Maktoum bin Jumaa al-Maktoum is listed as the owner.

“I was the sole investor. Al-Fajer Propertiesis my company. Sheikh Hasher’s only contribution has been the real estate licence as a sponsor,” he said in March.

Zadeh, who was sacked as company president last year, is demanding the “recovery of all material assets of Al-Fajer Properties,” according to legal documents obtained by AFP.

These include liquid assets and property, which are estimated at seven billion dirhams (1.9 billion dollars), and nine percent interest since the suit was filed.

“We have enough documents to prove he was the sole investor,” Zadeh’s lawyer Salem al-Shaali told AFP after the first hearing.

Sheikh Hasher is a brother-in-law of Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum. Also named in the suit are his daughter, Sheikha Maryam, a partner in the company, and son Sheikh Maktoum, who was made president of Al-Fajer after Zadeh was sacked.

Their names were only made public on Wednesday.

Zadeh said he was detained by Dubai police at the time he was dismissed last year and held without charge for 60 days, and that his passport was confiscated and is still being held without explanation.

The case comes as several executives from high-profile Dubai firms are held on suspicion of embezzlement and as the once-booming regional business and tourism hub struggles to stave off the impact of the global economic slowdown.

ak/al

More about the case Al Fajer Properties
which must be seen also in relation to the pending case Dynasty Zarooni

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.

CEO RERA Dubai: “Dubai is like a movie star, and just like a movie star everyone is looking at us, adding more pressure.”

KippReport

http://www.kippreport.com/kipp/2009/02/12/is-dubai-acting-smart/?bnr=1

“Dubai is like a movie star, and just like a movie star everyone is looking at us, adding more pressure.”

That’s what Marwan Bin Ghalita, the CEO of Dubai’s Real Estate Regulatory Agency (Rera) told Emirates Business, explaining that the city’s success is leading to incorrect media rumors about cancellations of property projects in the city.

A recent report by HSBC said that $75 billion worth of projects are being cancelled in the UAE, but a Morgan Stanley report put the number at $263 billion.

Rera’s CEO, however, says the authority is still “studying the market at present.” He rubbished a list that is doing the rounds, telling Al Bayan that “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.”

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

While the list is possibly inaccurate (Kipp did try to ascertain some projects earlier, but was unable to confirm the status of several projects), it has been more than three months since the effect of the economic slowdown began to be felt in Dubai’s real estate sector.  Hundreds of people have been laid off from their jobs in the property sector, with developers blaming it on postponement or cancellation of projects; and financial houses like HSBC and Morgan Stanley have already come out with their lists.

Rera will be releasing “accurate data next week that would show the true picture of Dubai’s real estate market.”

“We didn’t announce any cancellation of projects especially those sold to investors, and this is a stabilizing factor which can contribute to further boosting confidence in the vibrant real estate market in Dubai,” Ghalita told Al Bayan. “We want to send a clear message that we have confidence in the city,” he told Emirates Business.

Well, Kipp isn’t sure how confident investors are of the movie star’s talents.

 

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.”

RERA chief Marwan bin Ghalita denies petition from worried investors

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

Arabian Business 12. February 2009

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

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

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

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

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

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

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

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

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

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

___________________________________________________________

For our readers:

Links to the Group who started the  Pettion in January 2009

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

The Letter of the Petition to Marwan bin Ghalita RERA Dubai

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

 

 

 

 

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

We proudly double confirm: Dubai Police Arrest Dubai Dynasty Zarooni Fraudsters

WE have  complaint and complaint, running around saying  ” please  hear us – they are Fraudster” – nobody wants listen to us. At least they said our complaints are criminal. And now ????????

http://www.khaleejtimes.com/DisplayArticle08.asp?xfile=/data/theuae/2009/January/theuae_January177.xml&section=theuae

DUBAI – 10, January 2009

Dubai Police have arrested a syndicate of tricksters of India origin, who have been operating in pretext of being real estate developers.

 The Indian national arrested are Kabir Mulcandani, a UAE national Hilal Al Zarouni and two other employees of ‘Dynasty Zarouni’ a company located in Jebel Ali for issuing bouncing cheques to different nationalities mainly Indians.

Colonel Khalil Al Mansouri, Director of General Department of Criminal Investigation confirmed the arrest to Khaleej Times on Thursday.  The officer said the fraudsters are in police custody and assisting in investigations, adding that they will then be referred to the Dubai Public prosecution for further action.

Police sources said that they had received more than forty complains of different fraud cases against the suspects at various police stations and all cases were then referred to the General Department of Criminal investigation. Rajish and Alkopatra used to work as Finance Managers for the company.

While Mulchandani and his accomplice used to convince ‘potential’ investors that they were licensed to invest money and were a real estate developers.  They called on people to invest Dh 300, 000 every month and after paying 6 installments, the investor would get Dh1 million in return.

However, after the investors paid all the installments, Kabir did not show up but went into hiding, until police smashed the racket upon their arrest.

Salim Al Sha’ali, a lawyer for the suspects, told Khaleej Times that in order to convince their victims, the company announced massive media advertisements and introduced websites stating that they had successfully invested in development of real estate projects in the UAE.

The company claimed that their total investments reached Dh40 million realizing a revenue of Dh2.8 billion.

amira@khaleejtimes.com

all related reports 2008 – 2009 about Dynasty Zarooni:

http://7starsdubai.wordpress.com/?s=Al+Fajer+Properties

http://7starsdubai.wordpress.com/?s=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

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

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

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

original translated by google:

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

from

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

 

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

 

 

 

 

 

 

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

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

According to ACI’s financial situation is unclear.

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

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

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

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

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

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

The childprotection in May had the authority granted to him.

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

Jan Libbenga

Curious – Arabian Business Journal blocked latest reports about ACI Real Estate

The  Interview from Joerg Grunwald Aci Real Estate  , hold with Arabian Business and published by Arabian Business on 13. December 2008 , and other reports about ACI Niki Lauda Towers , have been deletd or blocked since December 17.2008. Thats realy strange !

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

Reassuring investors during disputes is paramount

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

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

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

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

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

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

The Times of Flippers are over ?

Once ACI Robin Lohman said in an interview:

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

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

comments about ACI:

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

The Result of Buy and Flip ? German Developer ACI Real Estate Dubai- The Boris Becker Tower is facing a delay as its contractor files for bankruptcy protection

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 projects

http://www.arabianbusiness.com/540847-projects-delayed-as-contractor-seeks-bankruptcy-protection

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 Price Reduction – How Low can they go – Finding a Floor

original published ArabianBusiness.com by Rob Corder 12.12.2008

http://www.arabianbusiness.com/540902-finding-the-floor

In times of market turbulence, be it in stock markets, commodity prices or real estate sales, the six million dollar question for investors is: where is the floor?If futures traders consider $40 oil to be as low as it can go, the market should see a buying spree that will push prices up from that level.There is evidence that stock market traders saw the floor for the Dow Jones Industrial Average at 8000; the FTSE 100 at 4000, and the Dubai Financial Market General Index at 2000 (traders love round numbers).

Because so much property in Dubai is a tradable commodity – it is traded as paper rather than as somewhere to live – the price has fallen far faster than even the most pessimistic of commentators predicted.Buyers evacuated the market during September in such a rush that it was impossible to judge the value of property.

As a result, there were virtually no transactions, a situation that continues to the present day.

The market will only restart when buyers feel the price of property has found some sort of floor, from which it will begin to rise. But what is that number?

There is no reliable index of property prices that can be used as a guide but, if there were, I think the floor would be at 30 percent of peak prices. In other words, buyers will only return to the market when 70 percent has been wiped off the value of villas and apartments in the city.

I do have one caveat: the market for completed property will significantly outperform the market for un-built property because rental rates are so high that the financial case for buying property is more compelling if families subtract the inescapable cost of rent from their cost of owning a property – even if it is depreciating in value.

To explain why I think the floor for the property market is 30 percent of peak values, you have to consider what drove prices to their peak before summer this year, and what are the prevailing market conditions today and for the year ahead.Much of my thinking is outlined in my last commentary “Property Poker”.

To summarise, amateur gamblers that made quick money flipping property in the boom times kept reinvesting their profits in more and more expensive developments. This has continued to the point where very few of them hold cash, but they all hold property in which they have made hefty down payments – normally 30 percent of the asking price.Very few of these speculators can afford to be holding the freehold to these properties when the building is complete, because at this stage they need to raise the other 70 percent of the asking price in the form of a mortgage.
And, guess what, the banks will not be lending them the money because they will not take a risk on an asset that is already worth dramatically less than its original sale price.

If speculators cannot raise the finance to pay the outstanding balance, they run into default, a situation that is currently very poorly regulated (a subject I will return to in another article, and I would love to receive comments on at the end of this article).

But the best guess at the moment is that the original developer will repossess the property, leaving the speculator with nothing. The full 30 percent down payment will be lost, and there is even speculation that developers will pursue defaulters for any further losses they incur as repossessed properties flood the market.This is why I think 30 percent of the peak is the floor.

The least bad scenario for a speculator is to dump all properties before they get handed any keys to completed villas and apartments. At least they get their original stake back, even if they have made no profit during the period they owned the property on paper.

The complication for this theory is at what point you consider the peak of the market to be. This is will come down to speculators’ portfolios, and is dependent on when they bought their properties.If they bought off plan in 2007, they saw their portfolios grow in value by roughly 50 percent in the first half of 2008, so the 30 percent rule applies to the price at which they bought property, not the value at its peak in mid-2008. (The vast majority of speculators that bought before 2007 will have already flipped the properties since so can be largely discounted).
This points to even worse news for those that bought right at the peak this summer. Speculators bailing out at 70 percent below the price they bought at in 2007 will sell at around 80 percent below the value of the summer peak. Taking this additional negative factor into account, and building in the more positive impact on prices created by people moving from renting to buying, I think the 30 percent theory is the best I can offer.

Regrettably, my greatest fear is that 30 percent is optimistic.

If buyers do not collectively agree that this is the floor they will stay out of the market until it falls even further.This will leave masses of speculators trying to raise mortgages to cover the outstanding 70 percent balance of the price at which they bought, and very few able to do so.Developers will be left pondering whether to exercise their rights over defaulters, or support speculators by giving them more time to pay – probably by delaying the completion of thousands of properties.

When all this pain has worked through, Dubai will emerge as a strong and vibrant metropolis in which hard working families will be able to own property at reasonable prices, and get on with the businesses of building lasting rewarding lives in the city

Dubai Immobilien – Krise heilt die Scheichs vom Goessenwahn

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

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

Krise heilt die Scheichs vom Größenwahn

Von Bernhard Zand

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

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

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

Was waren Anfang Oktober schon 70 Milliarden Euro in Dubai?

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

Wolkenkratzer aus Petrodollars

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

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

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

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

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

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

Banken verschenkten zuletzt Kredite

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

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

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

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

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

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

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

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

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

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

Possible Nakheel IPO could meet investor resistance – The National Newspaper

Possible Nakheel IPO could meet investor resistance – The National Newspaper

A potential initial public offering (IPO) by the Dubai government-owned developer Nakheel will have to overcome a lack of investor interest, analysts say.Reports earlier this week said Nakheel was considering an IPO to shore up its cash position, and that it hoped to raise Dh55 billion (US$15bn) to fund some of its projects that form part of its total portfolio of Dh294bn.“It will be difficult to find people interested in the IPO – and the valuation won’t be as attractive as it might have been previously,” said Robert McKinnon, the managing director of research at Al Mal Capital.

Nakheel is the developer of Dubai’s Palm Islands, iconic developments that are the cornerstone of the emirate’s property market.However, the swiftness of the downturn of the local property market – a consequence of a shortage of capital as banks hold back lending due to the international credit squeeze – has caught many developers by surprise. This week, Nakheel said it would lay off 500 staff and slow down work on several key projects.

Nakheel has yet to confirm whether it will go ahead with a listing, but Chris O’Donnell, the chief executive, said yesterday that a number of funding options were being considered. “We’ve got different options and an IPO is one of the options. It doesn’t mean that an IPO is imminent,” he said. Nakheel had intended to sell as much as Dh2.7bn in real estate investment trusts in the first and fourth quarters of this year, but the plan is on hold until stability returns to the market.It had planned to list the securities in Dubai, and in either London or Singapore.

The company said in a statement: “A company as large as Nakheel is constantly exploring a number of capital raising options, be it traditional debt issues, private equity, real estate investment trusts and direct project financing from banks.”Key Nakheel projects including Palms Deira and Jebel Ali, Waterfront and The Universe have been hit by the slowdown.Work on the Trump International Tower and Hotel, Gateway Towers and Frond N villas, all on Palm Jumeirah, has also been delayed. But the company is expected to push forward with the Nakheel Harbour and Tower development, which was launched at Dubai Cityscape in October.
The Dh140bn project will feature a tower more than 1km high.

At least five contractors including the Burj Dubai builder Samsung Engineering and Construction, a South Korean firm, have been invited to submit bids for the tower’s main construction. Soletanche Bachy, a French company, has been carrying out groundwork at the site, near Dubai’s Ibn Battuta Mall, since the beginning of this year.At the time of the project’s launch, Mr O’Donnell said it would be financed through a combination of pre-sales of apartments, the sale of 270 hectares of land surrounding the tower and bank loans.He said he was confident the project would be built successfully, owing to the fact that it would be developed over 10 years. “We will monitor the economic climate over that period when determining funding for the project.”

mailto:project.”agiuffrida@thenational.ae

A disguised opportunity – Technology – ArabianBusiness.com

A disguised opportunity – Technology – ArabianBusiness.com

This month will probably be remembered as the period when the Middle East’s property sector nearly collapsed. As the crisis deepens globally, and real estate investments from outside the region dry up, firms in the Middle East are scrambling to make good as soon as possible.

The news everyday is of construction projects that have been stopped midway, major firms scrambling to merge and consolidate in order to be stronger, and scores of employees being passed out redundancy slips.

While some believe that this is just the necessary ‘balancing out’ that the sector needed, others think that it has truly been a bloodbath. And most think that it is going to get much worse, before it gets any better.

Things have not been nearly as bad in the information technology market, but most industry stakeholders seem to be holding their collective breaths, waiting for the storm to hit. And our articles this month reflect that.

For this, the last issue of 2008, we at NME decided to look back at how the past twelve months could have been different for IT managers and teams. In keeping with this, our features pay attention to the changes that have occurred across enterprise local area networks, data centres and security – arguably, three of the biggest investment areas across the region.The prevailing tone across all articles is that of caution, an attitude of wait and watch. Most stakeholders believe that the first half of 2009 just might pass without mutter. However, the second half will see a large number of IT projects being cancelled.

The hardest hit in the industry will be the small companies, and the ones that set up offices in the region less than a year back. This is what most state.

The absolute truth, though, might be that nobody really knows what is going to happen, and which way the tide is going to turn.

Is the IT industry going to be as hard hit as the banking and construction industries?

Will we witness a situation where many companies leave the region?
Or, is the crisis going to pass by, just grazing the regional technology industry, but causing no major damage?

The eventual state of the industry might depend on how long the financial hard times persist. If, as some analysts (in what might sound like a desperate bid) state, the crisis eases by the end of 2009, then the regional IT industry will be spared.

However, if it does continue in strength into 2010, then it has the potential to cause some serious harm. All enterprises and vendors can do right now is buck down, and wait it out for the first half of 2009. There might be nothing that any company can do to make the situation better or worse, except pull together and brush up on its collective productivity.

The best way to get through this slowdown, whether it is short or long, is to know that it gives us time to reconsider decisions, brush up on processes, and make ourselves better as an industry to ride the good time when it, inevitably, comes around.It is an opportunity, however well disguised it might be.
Let us use it as such.

Dubai’s off plan projects ‘on hold’ through lack of financing | Dubai Property

Dubai’s off plan projects ‘on hold’ through lack of financing Dubai Property

original published ameinfo.com

Dubai has been hit by two financial crises in the last six months, which have combined to bring the emirate’s real estate market to a crawl. As well as the current global credit crisis, Dubai has suffered from its own run on liquidity based around the hype surrounding the dropping of the dollar peg. Rumours of a possible revaluation caused a number of global investors to speculate on the pegs, bringing billions of dollars into the UAE and, in turn, creating an influx of liquidity and allowing banks to lend at very attractive rates, Ali Al Shihabi, CEO of Rasmala Investment Holdings told delegates at the monthly Dubai Property Society meeting.

When the central banks put an end to speculation by issuing repeated denials, these speculators pulled capital from the region. By July the market was suffering from a major lack of liquidity, causing tightening in lending criteria, and by August, the emirate was undergoing its own mini credit crisis. The global crisis being felt by countries across the world, has further compounded the problem by causing local markets to plummet and regional investors to question local stock – especially the real estate shares that prop up Dubai’s economy.

Finances available for ongoing projects
The lack of demand currently being felt in the market is a result of these factors; investors now hold back, fearing further drops in prices, and banks are refusing to lend. ‘Properties that have broken ground will continue to be [financially] supported,’ Al Shihabi said. ‘The top priority is meeting existing commitments, and the government has given money to the banks to continue existing projects.
The value of this sector will hold, after a slight drop, and you may see a limited amount of trading, possibly at a discount, by those that are in urgent need of realising their assets.’

‘Developments that are only on paper are still a huge chunk of the city’s projects, and that has died for the time being,’ Al Shihabi warned. ‘Even the big developers, the Emaars and Nakheels, will have huge problems getting financing, and what is offered will be very expensive. A lot of projects are going to be scaled down or stopped.’ Despite this Al Shihabi said that regional investors should not be unduly worried about the state of the property market.

The governments in the GCC have stockpiled cash reserves from oil revenues for the last five years, meaning that the economies are able to absorb any downturn. The problem is that this has not been properly publicised. ‘One of the reasons for investor confusion is because the political, financial and business leaders have not known how to correctly communicate the strength of the economy and the measures that have been taken to protect the market,’ Al Shihabi said.

The silver lining is that the slowdown has had the positive effect of cutting down on the rampant inflation levels, which had accelerated over the past two years.

The market was overheating and being ground down by constant increases in the prices of raw materials, labour and contracting costs. These should now return to stable levels.

Overly-hyped project launchesDubai has also been suffering from an excess of bad marketing decisions leading to overly hyped project launches.

Though the property market has stable foundations the impression being given was one of unrealistic expectations, which ended up damaging the sector’s image abroad. ‘Everything was the biggest, the tallest, the grandest, and people didn’t take the Dubai market seriously,’ said Al Shihabi. ‘

The latest example was at Cityscape: Everyone knew that the world had changed but we came out and said ‘look two entire new cities, a one kilometre tower’, and the rest of the world either thought we were crazy or didn’t know what was going on. ‘You can’t keep coming out and saying that you’re launching a $90bn project because people will look at that and think you’re making it up.

You have to break it down and explain that it will grow to this amount over this number of years and this is the initial investment.’

See also:
Dubai developers feel the effects of price uncertainty

What does the global financial crisis mean for Dubai real estate? Nakheel denies Palm Deira stoppage rumours

British bank stops issuing mortgages for UAE flats – The National Newspaper

British bank stops issuing mortgages for UAE flats – The National Newspaper

Bradley Hope
Last Updated: November 10. 2008 6:11PM UAE / November 10. 2008 2:11PM GMT
ABU DHABI //

In a sign of worsening lending conditions, a British bank announced today it had stopped granting mortgages for UAE apartments and is now requiring a 50 per cent down payment for villas, a spokesman said.“Due to exceptional global market conditions, Lloyds TSB Middle East has altered some aspects of its mortgage product offering,” the spokesman said, adding that the bank “is not currently lending to customers who wish to purchase apartments”.

Lloyds will lend to customers buying a villa, but at a new rate of 50 per cent.

The bank’s lending standards are now among the most strict in the UAE and along with a general wariness among property buyers, it will further contribute to the slowing sale of apartments in the market.Other banks across the country have raised their home finance offerings to 20 and 25 per cent in recent weeks as the world financial markets entered turmoil and global banks restricted lending to each other. During the early part of the summer, buyers could easily get 10 and 15 per cent deals.
Lloyd’s decision was first reported by Arabian Business today.

mailto:today.bhope@thenational.ae

Slowing property market leads to disputes – The National Newspaper

Slowing property market leads to disputes – The National Newspaper

Abu Dhabi // Dubai

As developers and buyers feel the financial pinch of the slowing property market and dampened global growth, the two sides are getting into more disputes, lawyers and analysts say.“Whenever you get turmoil, you get disputes,” said Chris Dommet, the chief executive of the Dubai office of mortgage broker John Charcol. “When everything is going well and everyone is making money, everything is fine. But when the market moves the other way, you get disputes all along the way, from developers to banks to clients.”

Most of the fallout is coming from buyers who assumed prices would keep rising rapidly, those having difficulty obtaining financing for their purchases and those who are only now realising their contracts were not what they expected, said Tom O’Grady, a partner at DLA Piper in Dubai. “We are seeing higher levels of inquiries from buyers about their options,” Mr O’Grady said. “It’s coming alongside the sort of quieting of the market.”

Buyers at Hydra Village, a residential community of 2,500 houses near the Abu Dhabi airport, said they recently saw the prices of their homes unexpectedly rise by as much 15 per cent when Hydra Properties announced a redesign of the project with larger homes.

Carolyn Munson, an American who owns two two-bedroom houses in the project, said the decision to increase building sizes should not have been made without the consent of owners.
“They are imposing decisions on our behalf and that’s unfortunate,” she said. “This would have been one thing if we had contracts early on, but at this point we have zero recourse.”While some buyers said they welcomed the expanded floor plans and considered the rate for the extra space reasonable, some complained that they were not given an option about whether to accept a larger home. There were also concerns about raising the financing required to meet the higher prices, especially for those who had bought several units.

Under the plan, the additional cost would be based on the development’s original prices and come due upon completion in 2010.Sulaiman al Fahim, the chief executive of Hydra Properties, said the designs were changed because the original plan included houses that were too small. The overall project did not incorporate enough green space, he said.“We tried to make it a really green development so we changed the whole masterplan to reduce the density, make more green areas and build green buildings,” he said. Many of the villas were “too small for a normal family to live in” and were expanded by 107 to 129 square feet. He said the company had received positive feedback from buyers.

Meanwhile, in Dubai several buyers said they were refusing to pay their next instalment for homes they bought at Emaar’s Warsan Estate project because they were not informed of a sewage plant being built close by.“We were misled and then let down by Emaar,” said Arshad Hussain, one of the buyers refusing to pay.
He said he had been pressured into buying the property in a rush.“Once I realised about the plant, I informed my family and they said they wouldn’t want to live next to a sewage plant” said Adel Momar, an Australian citizen who had bought a villa for his family. “From that time I tried to sell this villa. But no one wants to buy it. Everybody just laughs.
Some buyers have even tried to put theirs on the market Dh30,000 (US$8,166) below the opening price and have not succeeded.”
Emaar officials said the company properly informed customers and behaved appropriately. “Purchasers have been adequately informed, as is the case with any of Emaar’s projects, including Warsan Estate,” a spokesman said.He said Emaar had provided a detailed map showing the location of the development.Similarly, a group of investors said they lost 5 per cent of their investment in just weeks when Damac Properties suddenly cut prices.

Matthew Mueller, a managing partner at Mueller and Namejko in Washington, said he and his partners had bought a full floor of Burjside Terrace as an investment. Because they bought in bulk, they were given a 5 per cent discount, but five weeks after the purchase, Damac dropped prices by 10 per cent, he said.“It would have been pretty good information to receive before we bought,” he said of the price cut. Mr Mueller said the group was eventually able to transfer his investment into some other properties with the company in the hopes that they could salvage their initial investment.
Niall McLoughlin, a spokesman for Damac Properties, said the price cut was part of a Ramadan special offering and the company had acted appropriately.“Like may companies in this part of the world, we have festive promotions around Ramadan, Eid and Dubai Shopping Festival where we offer discounts and value additions,” he said.

The disputes are leading to calls for more regulation.Fadi Antar, the operations manager of Better Homes Abu Dhabi, said confidence in property developers’ ability to deliver projects on time and according to their promises would become essential as the market matured. He said the municipality should regulate areas such as stage payments, completion dates and sales contracts and respond swiftly to the concerns of investors.

“At the moment, the only option for a client with a serious complaint is to sue,” he said.

bhope@thenational.aerditcham@thenational.aengillet@thenational.ae

Property cloud nine now looks stormy – The National Newspaper

Property cloud nine now looks stormy – The National Newspaper

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

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

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

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

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

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

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

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

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

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

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

Property cloud nine now looks stormy – The National Newspaper

Property cloud nine now looks stormy – The National Newspaper

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

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

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

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

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

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

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

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

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

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

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

At least 100 jobs go at property giant Damac – Real Estate – ArabianBusiness.com

At least 100 jobs go at property giant Damac – Real Estate – ArabianBusiness.com

At least 100 jobs are thought to have been lost at Dubai-based real estate developer Damac Properties as the global financial crisis continues to hit the region.Arabian Business was contacted by people close to staff at the company saying the jobs had been cut during the past two weeks.

Company chiefs refused to comment on specific numbers but it is understood that dozens of employees from across several departments were let go.

In a statement, Damac Properties CEO Peter Riddoch said: “The continuing global slowdown will inevitably lead companies to review their staffing levels and recruitment requirements. “Damac Properties will continue to review its own position in line with the market and aim to ensure that it right sizes/maintains its staffing levels accordingly.”

read more
http://www.arabianbusiness.com/537423-at-least-100-jobs-go-at-property-giant-damac

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.

Off-plan market frenzy likely to cool off – The National Newspaper

Off-plan market frenzy likely to cool off – The National Newspaper: “Off-plan market frenzy likely to cool off”

original published TheNational October 13, 2008

Nathalie Gillet

Last Updated: October 13. 2008 4:07PM UAE / GMT The global financial crisis will likely cool off some of the market frenzy that has driven speculators to buy off-plan properties in their droves in recent years, Chris Dommett, the chief executive of mortgage adviser John Charcol Dubai said today.

As foreign and local investors are displaying more caution than usual, the off-plan market, which has been known to drive up property prices due to speculative buyers and seller, is expected to slow down, said Mr Dommett.

Investors who buy property and quickly resell for a profit, otherwise known as ‘flipping’, have not only been discouraged by the recent global economic uncertainty, but also by recent Government and regulatory action taken to limit the practice.

End users are already less likely to buy off-plan as they typically need a place to live or to generate rental income to support mortgage payments, and are often wary of the return of their investment, the company found.

“End users are realising there is very little price differential between off-plan and completed properties, and they would prefer to buy something that is ready to move into,” said Mr Dommett. “Financing is also generally more difficult for off-plan buyers as the banks are increasingly reluctant to lend against a property that has yet to be built.”

ngillet@thenational.ae

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

Left with stars in their eyes – The National Newspaper:

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

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

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

read more:

Left with stars in their eyes – The National Newspaper:

Emaar Properties shares fall to new 46-month low – Real Estate – ArabianBusiness.com

Emaar Properties shares fall to new 46-month low – Real Estate – ArabianBusiness.com: “Emaar Properties shares fall to new 46-month low”

on Sunday, 12 October 2008

Shares in Emaar, the largest developer in the Middle East, plunged 9 percent to their lowest value since December 2004 in morning trading on Sunday, as investors took fright from last week’s turmoil in the financial markets.

It came as US investment bank Citi, in a report published on Thursday, predicted a slowdown in the Dubai’s booming real estate market and stood by its buy recommendation for the stock, which was down 9 per cent at 5.18 dirhams at 11.43am.

Citi analyst Hasnain Malik told Arabian Business: “This is exactly in line with what is happening globally. If you look at what the markets did on Friday, it is a spillover from that.”

“We feel there is an overly pessimistic view for [Emaar’s] share price,” he added.

Emaar is the largest publicly traded property company in the Middle East and is building the world’s tallest tower in Dubai as well as a Las Vegas-style strip of hotels.

The firm is largely responsible for Dubai’s rapidly changing skyline in the last decade, together with the city’s massive construction boom.

Over the past year the company has lost nearly two thirds of its value, with shares falling over 65 percent.

At the start of the year the stock peaked at 15.70 dirhams.

Other big property companies in Gulf also suffered this morning. Abu Dhabi’s largest developer Aldar, hit a new year low earlier this morning at AED 5.13, before recovering to AED 5.74 at 12.30pm, down 1.5 percent.

Qatar-based Barwa followed suit, falling for the fifth day out of six. The stock lost 10 percent to QR $44.9, approaching its January year low of QR 40.1.

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

Dubai property on red alert

Dubai property on red alert: “Dubai property on red alert”

The Dubai government likes to use the annual Cityscape real estate exhibition to build confidence in the emirate and build interest in its property market. Massive schemes are announced and ever-more ambitious plans are hatched.

But this year’s exhibition has come amid falling local stock markets – Saudi Arabia fell 10 per cent on Monday – and growing concerns that the international financial crisis will bring about a correction to what is widely viewed as a frothy market.

True to form, NakheelNakheel, which is owned by the government of Dubai, at the weekend launched a Dh140bn ($38bn) project to build the world’s tallest tower and inland harbour. On Monday another government company, Meraas Development, said it would redevelop a swath of the city over 12 years in a Dh350bn project to be called Jumeira Gardens. The intention is that this scheme too should include another of the world’s tallest towers and reclaimed islands off the coast.

“Dubai has always reinvented itself and maintained growth,” Sina al Kazim, chief executive of Meraas, said.

Whereas in years gone by retail investors have tried to gain access to what is supposed to be a business to business event, this year the organisers had no trouble in keeping the public out.

One locally-based real estate broker admitted that there was “a good deal of nervousness” among exhibitors as to whether Dubai’s growth story of the past six years was coming to an end.

Dubai is the most exposed of the local economies because its local real estate market is supported by foreign investment and because, as an emirate, it has little in the way of natural resources. A home-grown credit squeeze caused by excess lending and insufficient deposit taking has added to the disquiet.

On Monday, as the real estate announcements came, property stocks led falls in the UAE’s two main stock markets. EmaarEmaar, Dubai’s main developer, fell 10.7 per cent, while TamweelTamweel, a mortgage lender that is to be merged with AmlakAmlak, was down 10.5 per cent. In Abu Dhabi, AldarAldar, the emirate’s leading developer, fell more than 9 per cent.

One banker described the situation as “belated panic”.

Credit default spreads on Dubai debt, especially real estate linked borrowing, have ballooned as institutions bet that the pace of growth in the property market will not be maintained.

But Dubai developers sought to assuage concerns.

Mr Kazim said he had a positive reaction in initial talks with local institutions about funding his development, which has caused controversy as it is forcing out local families and expatriate labourers from villas in Satwa and Jumeirah, some of the most established parts of the fast changing city.

Dubai Properties, a developer owned by Sheikh Mohammed bin Rashid Al Maktoum, the Dubai ruler, also said publicly that its credit lines were secure. Jade al Khalil, marketing manager, said he believed confidence in the Dubai market could be sustained.

TamweelTamweel, the troubled Islamic mortgage lender that has been at the centre of corruption investigations, which have done so much to harm Dubai’s reputation, said that it was joining other lenders in raising the deposit that investors must put down in order to secure financing.

Analysts said that the government linked property developers are fundamentally sound and will be backed by state funds if they get into trouble. They added that UAE authorities could intervene if they felt the market was in danger of crashing.

Some economists predicted a controlled slowing down rather than a sharp correction, which would be healthy given the steep increase in prices this year, as well as speculative trading.

“I don’t think it’s going to jeopardise or derail the economy,” Marios Maratheftis, head of research at Standard Chartered, said.

“I think we could have a couple of years of slow growth, a couple of years of underperforming markets as well, but I don’t think it will derail what will happen here in the future,” he said. “Having a mild correction will probably be beneficial for the economy and if the market is going to price in some risk in the decision making, especially in real estate, that will be beneficial.”

Others, however, were anticipating a sharper correction and greater consolidation in the real estatesector.

“I think that some kind of sharp correction has to happen because of the way prices have gone up and the fact that global credit conditions are very tight. The big issue is how fast the recovery comes,” said another banker, who asked not to be named. “The stock markets are a barometer of the real estate market – it’s telling you investors are very concerned right now.”

He said that there would have to be consolidation because “some of the more aggressive developers don’t have the cash flow to build what they have sold”.

Another banker said real estate companies in the UAE have been seeking advice from banks about potential merger and acquisitions.

By Simeon Kerr in Dubai and Andrew England in Abu Dhabi

© Copyright The Financial Times Ltd 2008. Privacy policy.

Interest rate cuts too late for regional markets – The National Newspaper

Interest rate cuts too late for regional markets – The National Newspaper

Andrew Foxwell

Last Updated: October 08. 2008 7:17PM UAE / GMT Six central banks around the world – including the US Federal Reserve, The European Central Bank, and the Bank of England – cut interest rates by half a percentage point today in a bid to halt sliding stock markets. China’s Central Bank followed suit, cutting its rate by 27 basis points. The other central banks to act were Sweden’s, Switzerland’s and Canada’s.

Shares rallied on the news, although the move came too late to save Gulf markets, which were closed prior to the cuts, with the Dubai Financial Market down 8.43 per cent and the Abu Dhabi Securities Exchange down 6.43 per cent. The Saudi Tadawul lost 6.12 per cent today, while Kuwait was down 1.41 per cent, Doha down 8.75 per cent, Muscat down 7.21 per cent and Nahrain falling 2.70 per cent.

The move has had a positive effect on other stock markets, however, with the British, French and German markets all recovering after their large earlier losses.

The Central Bank of the UAE will cut interest rates in line with the Fed’s decision because the dirham is pegged to the dollar, leaving the rate in both countries at 1.5 per cent.

Despite the move, one economist in the country said the move will have little effect, calling it an “aspirin and not a panacea” when much more radical action is needed.

afoxwell@thenational.ae

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.

UAE commercial property market slowdown – Real Estate – ArabianBusiness.com

UAE commercial property market slowdown – Real Estate – ArabianBusiness.com

Wednesday, 08 October 2008

Commercial real estate markets in Dubai and Abu Dhabi witnessed a slight slowdown during the third quarter, with trading in August and September relatively flat, realtor Better Homes said in a report on Wednesday.

Better Homes put the lack of activity in the markets down to a seasonal slowdown and the Dubai government’s ongoing corruption probe, which it said had “tainted a negative picture on the real estate market”.

Better Homes said sales had also been affected by a new mortgage law that had made it harder to obtain finance and restrictions on immediate resale of properties by certain developers, which was “starting to push the speculative investors out of the market”, it said.

Demand for office space in Dubai outpaced Abu Dhabi during the quarter – especially in areas such as Meydan, Jumeirah Lake Towers and Dubai Waterfront – but Dubai was starting to show signs of distress among short-term investors, Better Homes said.

It pointed to an example of a commercial building in Nakheel’s Dubai Waterfront development being sold for a negative premium and warned of these sales were likely “as global markets squeeze liquidity and local banks reign in access to debt finance”.

In Abu Dhabi, Better Homes said the sharp increase in office rates during the second quarter post Cityscape Abu Dhabi did not continue into Q3 and prices were mainly flat for the quarter.

It said demand had shifted from Al Reem Island to Al Raha Beach, where premiums offer more upside potential.

Interest rate cuts too late for regional markets – The National Newspaper

Interest rate cuts too late for regional markets – The National Newspaper

Andrew Foxwell

Last Updated: October 08. 2008 7:17PM UAE / GMT Six central banks around the world – including the US Federal Reserve, The European Central Bank, and the Bank of England – cut interest rates by half a percentage point today in a bid to halt sliding stock markets. China’s Central Bank followed suit, cutting its rate by 27 basis points. The other central banks to act were Sweden’s, Switzerland’s and Canada’s.

Shares rallied on the news, although the move came too late to save Gulf markets, which were closed prior to the cuts, with the Dubai Financial Market down 8.43 per cent and the Abu Dhabi Securities Exchange down 6.43 per cent. The Saudi Tadawul lost 6.12 per cent today, while Kuwait was down 1.41 per cent, Doha down 8.75 per cent, Muscat down 7.21 per cent and Nahrain falling 2.70 per cent.

The move has had a positive effect on other stock markets, however, with the British, French and German markets all recovering after their large earlier losses.

The Central Bank of the UAE will cut interest rates in line with the Fed’s decision because the dirham is pegged to the dollar, leaving the rate in both countries at 1.5 per cent.

Despite the move, one economist in the country said the move will have little effect, calling it an “aspirin and not a panacea” when much more radical action is needed.

afoxwell@thenational.ae

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.

UAE liquidity squeeze driven by real estate fears – Banking & Finance – ArabianBusiness.com

UAE liquidity squeeze driven by real estate fears – Banking & Finance – ArabianBusiness.com: “UAE liquidity squeeze driven by real estate fears”

The UAE’s liquidity squeeze is being driven by fears over the real estate sector rather than the global financial crisis, Standard & Poor’s (S&P) said on Wednesday.

The ratings agency said in report tightening liquidity was “only slightly related” to the global credit crunch and was mainly driven by country-specific factors including speculative investor activity surrounding the dirham’s peg to the US dollar, concerns over the real estate sector and rapid domestic growth.

S&P said economic growth could be hit by developers struggling to find funding for future projects.

However, a slowdown in growth was “not necessarily a bad thing” as it would alleviate infrastructure and resource pressures, while preventing a real estate oversupply, the ratings agency said.

S&P said that while financing conditions were becoming more challenging, it did not expect the credit-worthiness of rated domestic entities to be affected.

“Refinancing risks will be contained, and the willingness and ability of the government to provide implicit or explicit support in the event of serious financial distress remains strong,” the ratings agency said.

UAE commercial property market slowdown – Real Estate – ArabianBusiness.com

UAE commercial property market slowdown – Real Estate – ArabianBusiness.com

Wednesday, 08 October 2008

Commercial real estate markets in Dubai and Abu Dhabi witnessed a slight slowdown during the third quarter, with trading in August and September relatively flat, realtor Better Homes said in a report on Wednesday.

Better Homes put the lack of activity in the markets down to a seasonal slowdown and the Dubai government’s ongoing corruption probe, which it said had “tainted a negative picture on the real estate market”.

Better Homes said sales had also been affected by a new mortgage law that had made it harder to obtain finance and restrictions on immediate resale of properties by certain developers, which was “starting to push the speculative investors out of the market”, it said.

Demand for office space in Dubai outpaced Abu Dhabi during the quarter – especially in areas such as Meydan, Jumeirah Lake Towers and Dubai Waterfront – but Dubai was starting to show signs of distress among short-term investors, Better Homes said.

It pointed to an example of a commercial building in Nakheel’s Dubai Waterfront development being sold for a negative premium and warned of these sales were likely “as global markets squeeze liquidity and local banks reign in access to debt finance”.

In Abu Dhabi, Better Homes said the sharp increase in office rates during the second quarter post Cityscape Abu Dhabi did not continue into Q3 and prices were mainly flat for the quarter.

It said demand had shifted from Al Reem Island to Al Raha Beach, where premiums offer more upside potential.

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

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

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

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

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

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

Wine whine – Construction & Industry – ArabianBusiness.com

Wine whine – Construction & Industry – ArabianBusiness.com

by Rob Corder

The typical salary for a labourer workng in the UAE’s construction industry is 600 dirhams per month, or 7200 dirhams per year.

The cost of a bottle of Premier Cru white Burgundy in Dubai’s Buddah Bar in the Grovesnor House Hotel is 7500 dirhams.The fact that certain wine is expensive and the Middle East’s labouring class is underpaid is not news, but the gulf between the value placed on the two is staggering.

It is not the fault of the wine maker. The bottle of wine in question, produced from a single vineyard close to the famous village of Meursault, costs around 25 Euro (130 dirhams) from the cellar door.It is not the fault of the restaurant or the hotel.

They are not in the business of storing wine that will never sell. The price would not be 7500 dirhams – an eye-watering 5769 percent mark-up even when compared to retail prices in Burgundy – if customers were not prepared to pay for it.

It is not even the fault of construction companies. Labourers would not keep arriving to work in the Gulf to earn 600 dirhams per month if they did not feel this represented an improvement to their quality of life.

Most have escaped even more extreme poverty in slum areas of India, Pakistan and Bangladesh.It is nothing more than a reflection of the sickening distortion of values that now pervades super-rich society in the lower Gulf.

Emaar, Mazaya lead declines in UAE markets – Financial Markets – ArabianBusiness.com

Emaar, Mazaya lead declines in UAE markets – Financial Markets – ArabianBusiness.com

Markets in the Gulf were depressed on Sunday as investors returned from a five-day holiday across the Gulf Arab region following a global selloff across US, European and Asian markets last week

.Real estate companies led the declines with Emaar Properties (11 percent) and Mazaya (14 percent) among the high-profile losers in Dubai – with the index down by more than seven percent at just before 1pm (Dubai time).

In Abu Dhabi, Sorouh was down by 10 percent as the exchange fell by more than three percent.”

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.”

News of a proposed merger between Islamic mortgage lenders Tamweel and Amlak Finance also did little to boost confidence as investors await 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.

Kuwait’s exchange was also down by nearly three and a half percent, Qatar by more than six percent and Oman by more than two and a half percent.

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

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

by Soren Billing Tuesday, 30 September 2008

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

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

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

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

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

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

What is a contract ?

http://www.zawya.com/printstory.cfm?storyid=ZAWYA20080612103455&l=060642080616

Contracts are promises that the law will enforce.

Recently, the Dubai property market has witnessed an increasing spate of developers falling behind schedule on their construction milestones. In addition, some developers have even tried to abort entire property developments after off-plan sales, seeking instead to buy back unfinished properties from their investors. In this special report, PROPERTYworks investigates to find out more…

While local property investors get edgy about construction delays and compromises on quality, lawyers are experiencing a renaissance as disgruntled customers engage the legal system here to get back at certain developers.

But a court case is by no means a quick fix. It would be expensive and very difficult to rely on the courts when a developer gets behind schedule. Instead, making oneself aware of the basic elements of a contract and speaking up for one’s rights are the most effective ways to ensure that property developers deliver exactly what they promise and on time.
Currently, most real estate investors in Dubai purchase their properties ‘off-plan’, which means they wait for the construction to commence and for their homes to be completed. In all fairness, almost every property developer in the UAE, big or small, is very keen to promote the UAE as a good place to buy and a great place to live.

Most developers enter into their contracts with investors in good faith and with the full intention of meeting their deadlines. In fact, they themselves probably enter into similar back-to-back contracts with contractors for matching deadlines.
There are, however, a host of factors outside of the control of the developers, especially now, when there is so much strain on construction resources.

Rising construction costs in the UAE are putting extreme pressure on most property developers. The cost of construction has risen significantly in the past few years, with steel prices rising by 38 per cent in 2007 and cement prices by 30 per cent in the same period, according to figures from the construction consultancy EC Harris.

An EFG Hermes report said construction cost inflation is being driven higher by rising costs of building materials, as well as the rising cost of labour. A serious shortage of labour and raw materials and strong demand, as well as the mandatory adoption of green building codes and health and life insurance, are likely to increase construction costs in the UAE even further this year. A tonne of steel reinforcement bar (rebar) now costs about US$1,150 (AED4,223), up from US$980 in March. The wholesale price of cement was this month capped by the ministry of economy at AED340 per tonne, up from AED295.

Price increases have meant that building firms risk huge financial losses, or even bankruptcy, if they sign deals that do not make provisions for price escalation. In some cases, the pressures have resulted in concern that the quality of construction is being compromised.
News of the cancellation of Damac Properties’ Palm Springs development was the first to break into the media. Homes in the project were sold more than five years ago, but construction until today has yet to start.

Opprobrium for Damac’s announcement came from as far away as London, where investors threatened to sue the developer unless the properties they had paid for were built.

Palm Springs should have been completed by the end of last year, but Damac postponed construction of the homes and finally cancelled it completely in March. Damac offered to buy back the ownership rights to the properties at a premium of six per cent per annum for every year since investors bought it. An investment of US$1 million when the project was launched five years ago previously would only be bought back for US$1.33 million – hardly the return that the rest of the Dubai property boom was delivering over the same period.

Damac claimed the cancellation was due to planning changes imposed on it by Nakheel, the master developer of Palm Jebel Ali, on which Palm Springs was due to reside. Nakheel denied any responsibility. Following discussions between Nakheel, Damac and the industry watchdog, the Dubai Real Estate Regulatory Authority (RERA), Damac agreed to complete the project. Officials of the RERA said the major concern was to protect the interests of investors and the reputation of the real estate sector in Dubai.

The Damac case was a rather high profile project and a high profile development. Obviously, from the time of entering into contracts with initial buyers to the stage at which the development should have been delivered, prices in the market have increased significantly as well.

If investors had gone ahead with a court case to recover just their initial stake, not only would they have lost any further potential capital that they had invested and any interest on any loans that they had taken out, but also the capital growth in the market that they could have invested elsewhere.

According to Jane Dalton, a property lawyer with the law firm Trowers & Hamlins in Abu Dhabi: “At the moment, there is very little scope for individual investors to negotiate termination and compensation provisions with developers. It really is a take-it-or-leave-it attitude. And I think going forward, it would be helpful if developers were more open to negotiation of those original sales terms at an earlier stage.”

“Usually a purchase contract has certain provisions specified for delays, and usually depending on the reason for that delay, whether it is directly attributable to the developer, or a matter that is outside of their control, those provisions will dictate at which stage a buyer can actually withdraw from the contract and what is payable in terms of compensation,” she continued. “There do tend to be periods built into the contracts by which both parties accept that the developer may overrun for specific reasons.”

Of course, the consequence of withdrawing from a contract is that the only thing that is reimbursable to the buyer is his initial stake in the property. By the time or termination of the contract due to delays, the property value might have gone up many times. And obviously, if one has bought in the secondary or tertiary market, then one would only be entitled to the price put down by the original buyer.

“And so there could be quite a disparity between what you could actually reclaim by withdrawing from the contract and what one could potentially recoup by waiting and hanging on for the delays to finish,” added Dalton.

During the construction phase, a property investor has no ownership right to his property, and so his only security is found in the sale and purchase agreement that he signed with the property developer. Quite simply, the only option one has in case the developer gets behind schedule or doesn’t live up to promises before the construction has been completed and the property handed over, is to sue the developer in a UAE court – an option that could take years for a final decision.

“It very much boils down to the contract between the purchaser and the developer,” said Mohammed Kamal, associate at Al Tamimi & Company Advocates and Legal Consultants. “Now, usually the contracts allow flexibility to the developer. A developer will usually indicate at least a target date for estimated delivery and then allow room for going beyond that – typically, it can be up to 13 months.

That is quite acceptable in the market right now, both in Dubai and Abu Dhabi.”
“There really isn’t anything else in the laws and regulations, and I think it would really rest on the terms of the contract, and if there was a clear breach of the contract on the part of the developer, then the purchaser would be entitled to take action in the courts or any other alternative form of dispute resolution, if stipulated in the contract,” he added.

Particular attention should be paid by investors to clauses in the contract dealing with any delivery dates and under what circumstances these dates may be pushed back by the developer.
Contracts are promises that the law will enforce. The law provides remedies if such a promise is violated, and recognises the performance of that promise as a duty. Contracts arise when a duty does or may come into existence, because of a promise made by one of the parties.
In order to be a legally binding contract, a promise must be exchanged for adequate ‘consideration’. Adequate consideration is a benefit or detriment a party receives, which reasonably and fairly induces them to make the promise.

An example of this would be purchasing an off-plan apartment from a property developer. The developer and the buyer come together to discuss the terms of the exchange (in all likelihood, the purchase is outlined in a written agreement). Thus, they have fulfilled the first requirement of consideration. To meet the second requirement, there must be a mutual exchange. In this case, the property developer (if one of the main developers in Dubai) provides ownership if the apartment is in a freehold area of Dubai, while the buyer provides payment. Third, the bargain terms must be of value. The apartment is worth what the buyer hands over. Therefore, this contract has met its consideration requirement, because it fits all elements of consideration.
T

he UAE is essentially a Civil Law jurisdiction heavily influenced by French, Egyptian, Roman and Islamic law. The increasing presence of international commercial contracts has resulted in the application of English common law practices, further influencing the UAE legal system.

The law relating to contracts in common law specifies that the agreement must consist of an offer and acceptance, and also consideration for a contract to exist. It is important that buyers learn to recognise these elements in contracts they plan to sign.

An offer is an indication by one person to another of their willingness to contract on certain terms without further negotiations.

A contract is then formed if there is express or implied agreement. A contract is said to come into existence when acceptance of an offer has been communicated to the one making the offer.

Another important element to understand is misrepresentation. Misrepresentation is a false statement of fact made by one party to another party and has the effect of inducing that party into the contract.

For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation.

In the UK, a finding of misrepresentation by a court of law allows for a remedy of rescission (termination of the contract), and sometimes damages depending on the type of misrepresentation found to have taken place. However, common law principles are not explicitly recognised under UAE law.
Despite the differences between legal systems, lawyers like Carol Alderson in Dubai, who has been practicing in the UK and the UAE for the last 25 years, vows to bring about more robust protection for property investors.

“The way sales agreements are drafted in Dubai is very one-sided in favour of developers, and unless customers are aware of their legal rights, they will not know how to protect themselves from becoming unfairly disadvantaged,” said Alderson, who is a senior partner at Samial Al Midfa Advocacy and Legal Consultants in Dubai.

“If we get a precedent ruling in a Dubai court against a developer for construction delays, then it will deter future developers from making promises that they cannot keep and will change the way sales and purchase agreements are drafted here,” she explained.

Adopting previous court judgment is another principle of a common law practice that is not recognised in the UAE. However, such precedents may in Dubai be presented to the court for persuasion purposes.

“Precedents do deter people,” Alderson pointed out.

Dalton further added:

“Within the region, the terms and conditions of contracts that I’ve seen are fairly standard, and I don’t think you could distinguish between one project and one developer from another. It is just the state of the market here, and it is very much a developing market.”
Most lawyers are in agreement that developers are not being brought to task for their demands that customers sign contracts “as is”, regardless of whether the developers are actually able and willing to perform the obligations specified therein.

Developers are obviously going to want to protect their interests as best they can, and it is supply and demand that determines whether a developer will be able to adopt a “take it or leave it” approach with regard to the contracts they produce. The level of demand for property in the past has put developers in a strong position with regard to the contracts they produce, and if a particular buyer wasn’t prepared to accept the developer’s standard form of contract, then there were usually ten others that would have.

It remains to be seen whether there will be a slowdown in the UAE market that may result in buyers being placed in a stronger bargaining position than previously.

Some developers have given buyers the option of a full refund if there are delays beyond the 12 months, while others provide no recourse and buyers just have to sit and wait for them to complete the work.

“Penalties have been paid as well as interest to disgruntled purchasers by certain developers, but it is certainly not the norm. The developers have considerable flexibility,” said Kamal.
Consumer protection in DubaiIn Dubai, new consumer protection laws will protect the purchaser in the case of non-delivery or late delivery. There is also the regulatory watchdog, the RERA. So, a developer is now subject to further controls in terms of its construction progress and ultimate delivery to the buyer.

Specifically, the Trust (Escrow) Account Law has established the setting up of escrow accounts for property development to protect purchasers of off-plan properties by ensuring that the payments made to a developer in advance of handover of a completed unit are protected in a separate ‘escrow’ account until certain construction milestones are met.
The law is applicable to all property developers in Dubai, and they are required to set up trust accounts to deposit all monies received from customers for off-plan property sales.

The funds collected from buyers are to be held in escrow accounts that will be offered at banks that are licensed to offer such facilities by the Dubai RERA.

Funds will only be released to the developer (for the purpose of funding the project) once certain stages of construction are completed. An independent surveyor will assess the stages of completion of construction.
In addition, the Dubai Land Department will hold 10 per cent of the value of the development in the escrow account for one year after handover to act as a warranty for any defects in the construction or finishing of the property.

“I think the risk of non-delivery is somewhat less now for developments in Dubai. Developers are doing the proper budget allocations required so that they can make good on their promises. We don’t just have the contract now, but there are regulatory measures to protect the purchaser in Dubai,” said Kamal.

“The Trust Account Law applies retrospectively. In some cases, if a project is fairly advanced and is close to delivery, we have seen cases of the Escrow Law requirements being waived.”
He added: “I would say that anything that is 70 per cent or above completed is likely to be exempted from the Trust Account Law, subject to approval by the RERA, because the risk of non-delivery is less.”

Another thing off-plan property investors in Dubai should be on guard for is shoddy workmanship.

All sales agreements should specify a written schedule about the finishing and fittings included in the property. Brand names should be mentioned if applicable to the quality promised. If this is not done, a buyer should be prepared to accept whatever he gets, and will have no recourse to get this rectified later.

One cannot anticipate structural defects that may crop up, but in Dubai, buyers have the Joint Ownership of Property Law (the Strata Law), which assures that all property developers will remain liable for 10 years from the date of completion of a building to repair and rectify any defects in the structural elements of a property. This includes the main supports, roofs, foundations, walls, ceilings hallways, stairwells, etc.
I

n addition, according to the Dubai Strata Law, all developers also remain liable for one year from the date of completion to repair or replace defective installations in the common property, including mechanical and electrical works, sanitary and plumbing installations, etc. Thereafter, these liabilities devolve to the owners.

There have been a number of complaints about the quality going into the finishing of certain property developments in Dubai. Once again, the advice to buyers is to purchase a property from a developer that has already built properties that are completed, so they can have a look at them inside and out to assess the quality of the finish.

Is it a crime?

But do unfulfilled promises or delays in construction by developers add up to the crime of misrepresentation or fraud, as some lawyers allege they do?

Alderson said: “If written communication is made about what you intend to receive from the developer, and if you don’t receive that, then those written confirmations are misrepresentations by the developer.

If the first stage of construction (the ground breaking) has not even started by the end of the date stipulated in the sales contract, then it is a clear case of breach of contract, and it means the developer is guilty of fraud and had no intention of honoring the performance of its obligations.”

Kamal agrees: “It could be considered misrepresentation, yes. If a date for delivery has been stated somewhere in the marketing literature, the contract or some kind of assurance has been made to the purchaser that they would deliver the property by a certain date, and the purchaser could prove that it would not be realistically possible, then I think that a purchaser would be entitled to make such a claim.”

In order for the concept of misrepresentation in the UAE Civil Code to apply in a case, it would require that the party claiming misrepresentation shows that there was an element of “trickery” on the part of the party accused of misrepresentation.

The Dubai courts tend to require a direct link to be shown between any breach of contract and damages suffered, meaning that an investor, at best, is only likely to get his or her money back in the event of a successful court action (and possibly a minimal costs and interest award). Indirect, consequential or penal damages are very difficult to obtain.

Shahram Safai, partner at Afridi & Angell Legal Consultants, said it is theoretically possible to frame an action based on misrepresentation. However, it is much more difficult to prove in court.

“It should be noted that courts will want to see proof that the developer deceived the buyer by means of trickery to induce the buyer to sign the sale and purchase agreement, for example by stating that the completion date would be much earlier even though the developer knew that this was not the case. It may be difficult for buyers to assemble and to provide such proof to the court as evidence,” he explained.

“In my opinion, an action can be successfully maintained by a buyer on the basis of [what is in the written contract], assuming all material facts support his or her claim. In such an event, a court should order a refund of the payments made by the buyer, as well as interest and any penalties,” added Safai.

As stated before, most sale and purchase agreements in the UAE cover the consequences of delay of completion. These consequences are generally: (1) Interest or a penalty is paid and (2) If delay extends beyond a predetermined date, the buyer can terminate the agreement and receive back his payments along with applicable interest or penalties.

Property investors should make sure that such remedies are included in all contracts they sign to purchase off-plan, and that the terms are clear and explicit.
Kamal said: “Very few cases of this nature go to court. We have seen various investors raising the issue of delays, negotiating and settling with the developer by way of compensation or some other concession to account for the delays in delivery. But I have not seen cases going to court, because it is just not seen as worthwhile from the investor’s standpoint to pay the money to run a court case.”
If penalty clauses for construction delays were made compulsory as a mandatory part of all off-plan sales agreements, this may deter developers and act as a further incentive to ensure that properties are delivered on time.

The most important message that should get across to property investors is simply that they should read their contracts very carefully and ask questions about any provisions that they are unsure about.

Investors should not be afraid to ask for changes or clarifications to be made to the contract before they sign, and a developer’s response to any such reasonable request may give an indication of the respectability of the developer.

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/

Secret Life of Hussain Ali Habib Sajwani Owner of DAMAC | by Kippreport

Secret Life of Hussain Ali Habib Sajwani Kippreport:

While building Sajwani’s profile, the Kipp Report invited comments from readers. A majority of those who responded claimed to be angry and disappointed employees of the company.
One wrote, “I have been a Damac employee for four years now. … This company is mismanaged and needs to be restructured. There is a surplus of manpower, with no proper job allocations.”
Another said, “I was promised a senior position [with Damac], but when I joined work, I found myself sitting in a stupid corridor, doing a very junior job in a very unhealthy work environment full of problems.”

Sajwani responds: “It takes time for an organization to be perfect and seek 100 percent satisfaction. I can assure you that the HR practices at Damac are evolving on a daily basis and we certainly aim to offer the best to our employees. Job allocations and responsibilities are two of the basic steps in running a business, and I do not think we would have reached where we are today if we were not implementing simple things like this.”

Another respondent commented that the company has seen high turnover of senior staff, with three vice-presidents resigning without completing a year. Though asked, Sajwani did not respond to this allegation.

Meanwhile, in accordance with Sajwani’s free-wheeling style, the company continues to dodge authorities’ efforts to regulate its activity. In Dubai, for instance, the government has been cracking down on fly-by-night freelance agents by requiring that all companies and individuals selling property be registered with the emirate’s Real Estate Regulation Authority (RERA).

Yet when a reporter for a local investigative magazine contacted a Damac property consultant posing as an investor’s cousin, he was offered an agent’s cut worth 3 percent to 5 percent – AED 150,000 ($41,000) to AED 375,000 ($102,000) – depending on the millions roped in. The consultant also emailed a single page “individual agent application form” to complete formalities.
When asked about the legality of such an arrangement, the agent replied: “We will register you at Damac Sharjah to avoid RERA regulation.”

“I have done well in achieving what I have,” Sajwani tells Kipp. “I always had the opportunity – the opportunity for good education, the opportunity to exposure – to take initiatives and do things I believe in. I made mistakes, learned from them and carried on.”
Sajwani remains a public figure that is both respected and despised. One might consider, though, that there is no such thing as bad publicity. There is only publicity.

original published: Kippreport

http://www.kippreport.com/kipp/2008/09/22/secret-life-of-hussain-ali-habib-sajwani/3/

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

Headline Gulf News – Corporate corruption probe widens

Dubai:

Housing mortgage company Tamweel on Tuesday found itself facing more scrutiny as it acknowledged that deputy group chief executive Abdullah Nasser Abdullah has been arrested by Dubai police in a corruption investigation.

Abdullah, who is also chief executive officer of Tamweel Properties & Investments LLC, a fully-owned Tamweel PJSC subsidiary focused on real estate investment and brokerage services, becomes the third official with Tamweel connections whose case has become public.
Last month police arrested Adel Al Shirawi, Tamweel’s former chief executive, and the company’s former head of investments, Feras Kalthoum, over financial embezzlement. Tamweel told the Dubai Financial market, where its shares are traded, that Abdullah “has been detained for questioning by Dubai government authorities in connection with an ongoing investigation.”

Tamweel did not provide information of the investigation saying it could “jeopardise” the ongoing case. Abdullah was arrested nearly a week ago over alleged swindling of money, Dubai Public Prosecution sources told Gulf News. “He has been detained since last week and is being questioned over alleged financial irregularities. He is facing alleged charges of embezzlement, swindling of money and of conning people,” said the source.

Sources close to the investigation said that one of the suspects who was arrested earlier in the same case reportedly accused Abdullah of being involved in the financial irregularities. It is alleged that his case involves between Dh40 million and Dh140 million. However, this information could not be confirmed by the Public Prosecution or police.

The news of arrest on Tuesday sent Tamweel’s shares lower. The stock closed 4.06 per cent down at Dh5.20.
The latest arrest highlights widening investigations into corporate corruption in Dubai’s booming real estate and financial sectors.

The Dubai government reiterated recently that it has zero tolerance towards corruption in the public and private sectors.

Gulf property market: a never ending boom? – The National Newspaper – Sent Using Google Toolbar

Gulf property market: a never ending boom? – The National Newspaper

The sub-prime mortgage market crash was the first salvo in a global jitter concerning the health of the property market. Economies that had registered record property price rises are now reporting successive monthly falls, adding to general unease and uncertainty.

In the UK, where more prudent mortgage lending practices were supposed to be in operation, the news on the property front is grim. Over the past six months, UK house prices have dropped at an annual rate of 11.4 per cent, and over the past three months at an alarming 16.1 per cent. The spectre of the crash in the early 1990s looms and even Alistair Darling, the chancellor of the exchequer, has forecast a 30 per cent fall in house prices before things get better.

What has gone wrong? Are markets in different geographic locations and going through different economic cycles, immune from real estate price tremors in other parts of the world? The key is a perception on whether a particular real estate market has reached a critical asset price “bubble”. Bubbles burst at some stage, but it is the exact point of the impact that is uncertain, as well as the consequent speed of a fall in prices.

In the Gulf, there is no sign yet that real estate prices have fallen, but there are also signs that the massive infrastructure and housing construction boom is beginning to face supply bottlenecks. With steel and cement prices rocketing, some projects are being quietly delayed, while others in the drawing stage are being shelved. While each of the Gulf countries has its own real estate market cycle, a reversal in the fortune of one Gulf market might have a knock-on effect on others.

There is some merit for a pause in any upward march in real estate prices. In the western economies, a gentle collapse in the housing market bubble can be socially beneficial. When prices were rising sharply, it was the younger and generally poorer people in society who were left out of the property ownership ladder, while older and richer people, who already owned houses, became better off. In the Gulf, a similar phenomenon was beginning to emerge but, unlike the West, it was based on resource allocation to different real estate projects.

Younger Gulf nationals wishing to buy their first homes were suddenly being outbid by rising prices, as construction resources were channelled to more lucrative penthouses, second homes or cost-plus government infrastructure projects.

In the West, the housing market began to feel some strain when the ratio of earnings to house prices deteriorated. In the final analysis, it is the share of a household’s income that is taken up paying off the mortgages – even at low interest rates – and the ability of young first-time buyers to get such mortgages, that determines purchasing-power ability. When house prices are rising more than 30 per cent a year, this makes buying a home out of reach to many. What saves some markets is the infusion of liquidity from external sources. London property, for example, was boosted by different waves of buying from Americans, Arabs, Asians and east Europeans.

Similarly in the Gulf, one cannot talk about a homogeneous market. For whom are the different real estate projects being built? Construction in some Gulf states is trying to attract buyers from other Gulf states which have either more purchasing power or a shortage of supply. As such, if economic circumstances change in these countries, or their own construction sector starts to generate enough supply, then these states will be left with a massive over capacity and the beginning of a price-bubble burst.

Demographics is a key factor regarding which Gulf property market will flourish and which will ease off. For countries such as Saudi Arabia and Oman, with larger and a younger growing population, there is a genuine need for affordable first-time homes, rather than luxury second homes or penthouses. For such countries, natural demand exists and it is up to imaginative and cost-conscious construction companies to meet this viable long-term demand. Other Gulf countries with smaller population bases seem to construct real estate projects and then create demand after the fact through slick marketing and an appeal to different “lifestyles”.

There is a limit to this type of demand creation, though. At some stage supply will outpace demand and prices will ease unless a new round of external investors and “new” demand is generated to take up the slack of “older” demand.

Again, for some Gulf countries, the marketing of a lifestyle, with free sunshine all year round thrown in, has tapped non-Gulf expatriates, ranging from movie stars to football players, but the supply of these VIPs is limited, unlike the less glamorous but larger home-grown population demand of other Gulf countries. Should expatriates also begin to feel the chill of economic recession back home, and declining property values, then prospects of a second home in the Gulf becomes less attractive.

Economic globalisation has a price.

The Gulf is helped by government-led infrastructure projects, with Saudi Arabia taking the lion’s share in the form of various economic mega cities. Such initiatives will take up the slack from private sector projects, and reduce the effects of a slowdown.

In the long run, even such mega projects are at the mercy of oil price fortunes and government budget surpluses. Should such factors coalesce – foreign purchases slowing, high commodity prices, high inflation and a higher cost of borrowing – then the Gulf property boom will start to ease back.

Dr. Mohamed Ramady is a former banker and Visiting Associate Professor, Finance and Economics Dept. at King Fahd University of Petroleum and Minerals, Saudi Arabia.

Sold short by the developers of Dubai – The National Newspaper – Sent Using Google Toolbar

Sold short by the developers – The National Newspaper

It sounded like the kind of home most people dream about. With a private beach on the doorstep, perfectly landscaped courtyards and a choice of seven gyms, Jumeirah Beach Residences (JBR) was set to become the epitome of lavish beachside living.

Set along the north shore of Dubai Marina, and with the Palm Jumeirah close by, the 36-tower project was going to offer “a year-round beach resort lifestyle” to its anticipated population of 25,000, according to the sales pitch used to attract investors to the Dubai Properties development.

Buyers began moving in to their new homes last year and looked forward to the day when their dream would be made complete with access to their own private beach park and gym complexes. But that day never came. In June, they were horrified to learn that a significant part of that beach would be used as a car park, while only two of the seven community gyms would be built.

“This is a massive part of the lifestyle that was sold to us,” said Wassim Islam, who bought a three-bedroom apartment at JBR. “It’s changed my perception of a development from something that was desirable to something that is just a residential estate. While the value of my property has gone up, I would not be able to afford the lifestyle sold to me now.”

This is just one of countless stories that have prompted a change in the way Dubai’s property market is regulated, aimed at making sure investors get what they paid for.

Residents of JBR can at least take comfort in the fact that their homes were built and are now worth about three times the purchase price.

The same cannot be said for those who have ploughed thousands of dirhams into projects that have either been delayed or cancelled. These people were not necessarily pining for the high life. All they wanted was a home they could afford, and in a location that was likely to increase in value.

In early 2006, Lorenza Gazzola, a Dubai resident, bought an off-the-plan apartment in Dubai Lagoon, a development by Schön Properties, a Pakistani company. Attracted by the project’s location away from the hustle and bustle of central Dubai, and even more so by the price of Dh600 (US$163) per square foot, Ms Gazzola thought it would be the perfect investment. An attractive payment plan also alleviated the need for a mortgage, which few banks were offering at the time.

“When I first saw the Dubai Lagoon project, I was impressed by the number of buildings, the lagoons and the greenery. It felt like a perfect family community, with a friendly and quiet environment,” she said. “It wasn’t marketed as a luxury development, but I was happy that finally someone with a limited income like me could purchase something affordable, and without having to pay high interest rates to the bank.”

Two years on, Ms Gazzola has nothing to show for her investment. After a series of delays over the project’s design, construction finally began at the end of last year. But progress stalled in May, when the contractor ran into difficulties because of the surge in construction costs.

Pressure from angry investors and the Dubai Real Estate Regulatory Authority (Rera) has forced Schön to resume construction on the first two zones of the seven-zone project, while an additional contractor has been appointed to build zones three and six. Another contractor is expected to be appointed for the remaining zones and the project has now been marked for completion in 2011.

“My dream of buying a home has turned into a nightmare,” Ms Gazzola said. “I was looking forward to moving in this year. I have so far spent the majority of my savings on a modest property that hasn’t yet materialised.”

Dubai is not the only emirate to have felt the brunt of property scandals.

Earlier this year Tameer Holding, a company based in Sharjah, decided to put its Dh30 billion AlSalaam City development on hold because of problems with power and water supplies.

Those who had made payments towards their property in the past three years have since been left in limbo while awaiting the development’s fate.

Although Tameer has offered them a refund with interest, or the chance to transfer their investment to another project, many are reluctant to accept.

Martin Nield, an investor from the UK, bought 10 townhouses in the project at Dh600 per sq ft. He has so far paid Dh2 million. “I don’t think it’s acceptable just to be offered your money back. Some people have been making investments for the last three years and have paid around 70 per cent,” he said. “But how long can it continue to be on hold for? The land was graded two years ago, but all that’s been built are eight show houses.”

The common thread between all of these projects is that they were launched between 2004 and 2005, a time when big project announcements were all the rage, but legal protection was limited. Risks were taken on the premise that huge returns on investment could be reaped. For some, the gamble paid off.

“Many have made huge profits on property here,” said Niall O’Toole, a partner at the law firm Clyde & Co. “But others have been naive and haven’t accurately calculated their risk.”

Dubai’s legal structure, although improving, has had to play catch-up with the market. The arrival of Rera last year came as a relief to many. All developers now have to be approved by the authority and have an escrow account, into which all money paid by investors goes and is used solely for the development’s construction.

But while Rera has instilled some confidence in the market, many of the problems faced by investors today stem from projects launched before it was set up, at a time when there was no protection via escrow accounts.

“Contractually, these investors are not without rights, but how effective are they? If the developer is broke and the contractor is broke, what can they do?” said Mr O’Toole.

But better legal remedies are on the way. Foreign investors in Dubai will now be able to take their grievances to the Property Court, which begins this month and is expected to speed up the process of hearings.

“A crucial part of the evolution of Dubai is the appreciation that property and construction breed disputes, and so there must be appropriate ways to resolve or determine those disputes,” said Nick Carnell, a partner at the law firm Kennedys.

“But it’s also fundamental that the court gets off to a good start.

Without an effective means to deal with such disputes, confidence will be eroded very quickly.”

Also in the pipeline is a consumer protection law, which will better protect off-the-plan buyers from misleading marketing by developers and will make it more difficult for developers not to honour their promises.

“These changes, if introduced, will impact how developers market their projects and will hopefully assist in preventing some of the problems that have occurred recently,” said Stephen Kelly, an associate with Clyde & Co.

Still, these changes will go a long way towards avoiding the kind of problems experienced by some investors. Abu Dhabi is still a little behind Dubai in terms of getting its property law in place, although plans are in the pipeline to adopt a similar strategy to Dubai’s. “I believe the Abu Dhabi Government has hired an Australian consulting firm to help devise a Strata Law in Abu Dhabi,” said Mr O’Toole. “There is currently more protection in Dubai than the Abu Dhabi. For example, Dubai has the escrow account in place.”

Mr O’Toole said the best remedy was doing your homework before buying.

“Be careful, do your research and look at the strength of the developers. The big ones have huge asset banks, while the smaller ones are more exposed to risk. Human nature is such that we talk about learning from other people’s mistakes, but we very rarely do. This is a crazy market and I don’t think people will learn their lessons until there are major failures.“

agiuffrida@thenational.ae

Gulf property market: a never ending boom? – The National Newspaper – Sent Using Google Toolbar

Gulf property market: a never ending boom? – The National Newspaper

The sub-prime mortgage market crash was the first salvo in a global jitter concerning the health of the property market. Economies that had registered record property price rises are now reporting successive monthly falls, adding to general unease and uncertainty.

In the UK, where more prudent mortgage lending practices were supposed to be in operation, the news on the property front is grim. Over the past six months, UK house prices have dropped at an annual rate of 11.4 per cent, and over the past three months at an alarming 16.1 per cent. The spectre of the crash in the early 1990s looms and even Alistair Darling, the chancellor of the exchequer, has forecast a 30 per cent fall in house prices before things get better.

What has gone wrong? Are markets in different geographic locations and going through different economic cycles, immune from real estate price tremors in other parts of the world? The key is a perception on whether a particular real estate market has reached a critical asset price “bubble”. Bubbles burst at some stage, but it is the exact point of the impact that is uncertain, as well as the consequent speed of a fall in prices.

In the Gulf, there is no sign yet that real estate prices have fallen, but there are also signs that the massive infrastructure and housing construction boom is beginning to face supply bottlenecks. With steel and cement prices rocketing, some projects are being quietly delayed, while others in the drawing stage are being shelved. While each of the Gulf countries has its own real estate market cycle, a reversal in the fortune of one Gulf market might have a knock-on effect on others.

There is some merit for a pause in any upward march in real estate prices. In the western economies, a gentle collapse in the housing market bubble can be socially beneficial. When prices were rising sharply, it was the younger and generally poorer people in society who were left out of the property ownership ladder, while older and richer people, who already owned houses, became better off. In the Gulf, a similar phenomenon was beginning to emerge but, unlike the West, it was based on resource allocation to different real estate projects.

Younger Gulf nationals wishing to buy their first homes were suddenly being outbid by rising prices, as construction resources were channelled to more lucrative penthouses, second homes or cost-plus government infrastructure projects.

In the West, the housing market began to feel some strain when the ratio of earnings to house prices deteriorated. In the final analysis, it is the share of a household’s income that is taken up paying off the mortgages – even at low interest rates – and the ability of young first-time buyers to get such mortgages, that determines purchasing-power ability. When house prices are rising more than 30 per cent a year, this makes buying a home out of reach to many. What saves some markets is the infusion of liquidity from external sources. London property, for example, was boosted by different waves of buying from Americans, Arabs, Asians and east Europeans.

Similarly in the Gulf, one cannot talk about a homogeneous market. For whom are the different real estate projects being built? Construction in some Gulf states is trying to attract buyers from other Gulf states which have either more purchasing power or a shortage of supply. As such, if economic circumstances change in these countries, or their own construction sector starts to generate enough supply, then these states will be left with a massive over capacity and the beginning of a price-bubble burst.

Demographics is a key factor regarding which Gulf property market will flourish and which will ease off. For countries such as Saudi Arabia and Oman, with larger and a younger growing population, there is a genuine need for affordable first-time homes, rather than luxury second homes or penthouses. For such countries, natural demand exists and it is up to imaginative and cost-conscious construction companies to meet this viable long-term demand. Other Gulf countries with smaller population bases seem to construct real estate projects and then create demand after the fact through slick marketing and an appeal to different “lifestyles”.

There is a limit to this type of demand creation, though. At some stage supply will outpace demand and prices will ease unless a new round of external investors and “new” demand is generated to take up the slack of “older” demand.

Again, for some Gulf countries, the marketing of a lifestyle, with free sunshine all year round thrown in, has tapped non-Gulf expatriates, ranging from movie stars to football players, but the supply of these VIPs is limited, unlike the less glamorous but larger home-grown population demand of other Gulf countries. Should expatriates also begin to feel the chill of economic recession back home, and declining property values, then prospects of a second home in the Gulf becomes less attractive.

Economic globalisation has a price.

The Gulf is helped by government-led infrastructure projects, with Saudi Arabia taking the lion’s share in the form of various economic mega cities. Such initiatives will take up the slack from private sector projects, and reduce the effects of a slowdown.

In the long run, even such mega projects are at the mercy of oil price fortunes and government budget surpluses. Should such factors coalesce – foreign purchases slowing, high commodity prices, high inflation and a higher cost of borrowing – then the Gulf property boom will start to ease back.

Dr. Mohamed Ramady is a former banker and Visiting Associate Professor, Finance and Economics Dept. at King Fahd University of Petroleum and Minerals, Saudi Arabia.

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.

New Property law number 13 of 2008 comes into effect this week

Dubai 04.September 2008

Law number 13 of 2008, governing off plan property sales in Dubai is set to come into effect this week.

The law will introduce a mandatory system of pre-registration for sales contracts at the emirate’s Land Department.

Any off plan sales regarding real estate units in the city that are not registered will be legally invalid.

The registration system is the next stage in the government of Dubai’s efforts to increase the levels of transparency in the local real estate market, along with the introduction of a specific arbitration agency, the Real Estate Regulatory Authority (Rera), and legislative measures such as the escrow law.

These initiatives come at a time when investor confidence in both upcoming and existing projects has been shaken following a series of scandals in the local industry.

Although the system will initially be undertaken by the Land Department, the duty will eventually pass to master developers, who will be obliged to register all purchases by sub-developers.

According to an explanatory report authored by Chloe English and Alexis Waller from legal firm Clyde & Co’s Real Estate department, the registration system is already up and running and will work in tandem with the current project registration system in place at Rera following the introduction of Law number 8, the escrow law. Law number 8 declared that all developers had to be approved by Rera and have an escrow account, which all monies from investors would be paid into and would be used solely for the construction of the development.

The system also paves the way for easing in the emirate’s Law number 14 of 2008, regarding mortgages, allowing investors to register against off plan projects.

Contract and purchase fees Developers will still be obliged to pay a fee of Dhs370 per off plan unit contract when registering their site plan.

The developer will not need to have taken possession of the land before registering off plan sales, registration of the concluded purchase agreement at the Land Department will be enough. There will also be an additional 2% registration fee, payable at the split of 1% by the seller and 1% by the buyer, on all third party sales prior to the beginning of construction.

The good news for buyers is that developers will no longer be able to charge transfer fees on off plan sales. Administrative charges will still be payable but the exact amount is currently being determined by the department. The Clyde & Co report estimates the figure at Dhs5,000 for off plan transfers and Dhs500 for completed properties.

Breach of contract ( attention buyers !!!!!!!!!)

Under the new law, if buyers default on a sales contract it becomes the developer’s responsibility to report the breach to the Land Department.
They will then issue a notice granting the buyer 30 days grace to comply with contractual obligations.
If the issue is not resolved within the period the developer can cancel the contract and return all money paid, minus 30%, which they are allowed to keep.
The new law means that the 30% is now a value of money paid by the buyer, rather than 30% of the value of the project.

In a further boost to buyers, developers will also no longer be able to claim additional money if a project is larger once completed than set out in the original contract.

If the project is smaller than specified, however, the buyer must be compensated (the size difference has yet to be specified but the report anticipates a threshold of 5% and over from the advertised area).

Restrictions on property ‘flipping’

The new law is also part of the government’s efforts to help curb the market speculation that has seen prices rise at fever pitch levels, and ensure that all transactions are monitored by the government rather than by individual companies.

Unfortunately, for many of the investors currently undergoing problematic handovers, the law will not retroactively govern projects that are already underway or completed – although all developments still in the off plan stage only have 60 days to register sale contracts with the Land Department.

Although some of Dubai’s major developers, including powerhouses Nakheel and Emaar have set their own restrictions on the resale of off plan units, placing a hold on sales until either a set period of time has elapsed or a percentage of the contractual value has been paid, the new law does not make these restrictions mandatory across the board.

The Master of Flip – ACI – Robin Lohmann "It is simple. We develop and we flip.

original published: ArabianBusiness

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

Robin Lohmann is a man in a hurry. No sooner have we finished lunch then he turns to racing legend Niki Lauda for a quiet word. “I have another idea. We can discuss it after pudding is served,” says Lohmann.

The chances are it is another cracking idea – right now, Lohmann is on a roll. The boss of German-owned ACI has added spice to the UAE’s property market, by putting branded buildings onto the market. And not just any brand – in the past month, Lohmann has persuaded sporting legends Michael Schumacher, Nikki Lauda and Boris Becker to lend their names to his projects. Early next year, the Michael Schumacher Business Avenue will be launched in Dubai – hot on the heels on Niki Lauda Twin Towers and Boris Becker Tower.

“I nearly got burnt when I first started out and Niki nearly got burnt when he drove Formula One cars, so we have a lot in common,” jokes Lohmann, adding: “It is something different, something new and something that I think will make our investors a lot of money.”

His track record suggests he is more than right. In less than two years of trading in Dubai, ACI has revenues topping the billion dollar mark. So far the company has launched Victory Bay and Sami Tower in Dubai’s Business Bay, Dubai Star in Jumeirah Lake Towers and Wings of Arabia in Dubailand. With his sports-branded developments now off the mark, car-branded buildings are on the drawing board, again in new projects based mostly in Dubai.

“It is simple. We develop and we flip. We make people money. There is a lot of talk about the property market not being sustainable but those people talking that way – well, they don’t know what they are talking about.

There are still millions of people forecast to move to Dubai in the coming years. They all need somewhere to live and work. Prices will keep rising and I actually think we can double our turnover next year,” says a confident Lohmann, adding: “As for the idea of branded buildings, well, again it is a simple equation. What would an investor pay more for – No.1 Business Avenue or No.1 Michael Schumacher Business Avenue?”

The real coup for German-born Lohmann has been in persuading Lauda and friends to join his property empire. Lauda’s son Lukas is a friend of Lohmann, through whom the plan for Niki Lauda Twin Towers was first pitched.

Lauda liked what he saw and very quickly signed up. “I’ve never seen anything like Dubai – the pace of development here is just amazing, and everything is so much bigger every time I come here,” says former F1 champion Lauda.

“Robin approached me with this idea and I was very impressed. The property market here is booming so it is nice to be a part of it in some way. I don’t think you can find this kind of pace and energy anywhere else in the world,” he adds.

Dubai property law to curb speculation

original published Arabian Business
by Jason Benham 27, August 2008

Dubai’s new law to regulate the sale of real estate still under construction is part of an effort to curb speculation that has sent property prices in the Gulf Arab emirate skyrocketing, an official said on Tuesday.

Under the law issued this week sales of off-plan properties in Dubai must be registered with the department before they can be resold, Marwan bin Ghalita chief executive of the Dubai Real Estate Regulatory Authority (RERA) said.Standard Chartered Bank warned in July that Dubai’s property market showed signs of overheating as speculators betting on quick gains inflate prices of units still under construction.”It will help to curb speculation,” bin Ghalita said of the new law. “In Dubai we are introducing laws step by step … Now everything is going to be transparent because it is with the Land Department.”Dubai property prices have surged 79 percent since the beginning of 2007, Morgan Stanley said earlier in the month.Demand for real estate in Dubai, home to the world’s tallest tower and three man-made islands in the shape of palms, has surged since the government first allowed foreigners to invest in properties in 2002.The government passed a freehold property law in 2006 granting foreigners the right to own properties at selected developments.The off-plan law follows the issuance of a mortgage law last week as part of a drive to regulate the Gulf Arab business hub’s booming real estate sector.It will also prevent master and sub-developers from charging transfer fees on off-plan sales, bin Ghalita said.Developers however can be paid administration fees of 1,000-3,000 dirhams ($272-817) for each transaction after approval by the Land Department, he said.Property prices will probably jump 35 percent this year and another 8.5 percent in 2009, when they are expected to peak as Dubai takes measures to weed out short-term speculators, a Reuters poll showed on Tuesday.The analysts said property prices would fall at least 15 percent from peak to trough. (Reuters)
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Dubai to set up real estate watchdogDubai ruler issues royal decree establishing Real Estate Regulatory Authority to oversee industry.
Dylan Bowman and WAM, Tuesday, 31 July 2007, ArabianBusiness/News

Dubai brings in long term rent dealsReal Estate Regulatory Authority is to introduce long-term contracts in a bid to stabilise rising rents.
Reuters, Wednesday, 22 August 2007, ArabianBusiness/News

Dubai to regulate buy-to-let marketThe emirate’s new property regulator will oversee agreements between landlords and tenants.
Rob Corder, Friday, 31 August 2007, ArabianBusiness/News

Laying down the lawCityscape was the ideal shop window for the new real estate laws introduced in Dubai over the last year.
David Sanson, Monday, 05 November 2007, ArabianBusiness/Comment

Strata Law will be delayedImplementation of Dubai’s Strata Law now set for the first half of 2008.
Becca Wilson, Monday, 03 December 2007, ArabianBusiness/News

Rent cap unlikely to dent inflationNew cap of 5% will have limited impact on curbing inflation in Dubai, investment bank EFG-Hermes says.
Daliah Merzaban, Sunday, 30 December 2007, ArabianBusiness/News

Laying down the lawAs confusion surrounding the imposing Strata Law heightens, Becca Wilson gets the low down from the only two independent strata management companies based in the Middle East.
Becca Wilson, Wednesday, 02 January 2008, ArabianBusiness/Features

More than 400 sign with Rera
Dubai’s Real Estate Regulatory Agency (Rera) has put together a list of real estate developers that have signed up with it in accordance to Law No 8 of 2007.
Conrad Egbert, Saturday, 05 January 2008, ArabianBusiness/News

Sought-after properties to remain out of reach

Property index will keep rents in prestigious communities at high levels, analyst says.
Joel Bowman, Sunday, 06 January 2008, ArabianBusiness/News

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.

Property Scandal – Video II – Dynasty Zarooni – Al Fajer Properties Jumeirah Lake Towers

It’s going to be an uncomfortable summer for those without a clear conscience

original published Arabian Business
http://www.arabianbusiness.com/index.php?option=com_content&view=article&id=528460&newsletter=1

White-collar crime rarely captures the imagination as easily as its garden-variety counterparts.It seems you have to bring down a bank, hide billion-dollar losses or at least plunder a pension plan in order to secure column inches alongside the murder du jour.

Part of the reason is in the telling – after all, it’s unfortunately far easier to picture a grisly death, than it is to follow how the judicious use of special purpose entities might scupper a $111bn energy giant, or how one city whiz-kid with delusions of grandeur could blindside a 144 year-old Swiss bank with an alleged $75bn in unauthorised trades.

However, the summer of 2008 will be keenly remembered for a string of high-profile investigations into alleged financial irregularities by senior executives at both Dubai Government-owned and private entities.

If the public prosecutor’s suspicions are proved accurate, then His Highness Sheikh Mohammed Bin Rashid Al Maktoum’s drive for transparency – which is to be applauded – will have claimed its first scalps.

The summer of summonses began in April, and the announcement of probes into the activities of individuals at Dubai Islamic Bank (DIB) and its affiliate Deyaar.DIB’s former vice president for finance structure, Rifaat Othmani, was arrested as part of a fraud investigation on June 5. He and several other former members of DIB staff are being investigated, while the probe also led to the arrest of JPMorgan Chase’s senior country officer for the UAE, Omair Mooraj.At development firm Deyaar, meanwhile, four people have been arrested as part of a police investigation into alleged embezzlement.

Those hauled in include Deyaar’s former CEO, Zack Shahin, who has since maintained his innocence.Ever since the DIB and Deyaar investigations were made public, rumours have run rife that a host of other high-profile figures were also in the firing line. It has been a summer of ‘when’, not ‘if’, and so it came as no surprise when more arrests were announced last week.

First to be named was Adel Al Shirawi, the former CEO of mortgage giant Tamweel, and now vice chairman of state-owned Istithmar World PJSC. His former head of investments Feras Kalthoum is under the microscope too.

Down the road at Dubai Government-owned developer Nakheel, general manager of sales Walid Al Jaziri and former Nakheel executive Karim Masaad have also been arrested.

We can be sure that the public prosecutor’s office is not done yet. Amid tales of tender-rigging, bribery and profit skimming, the government is steadily making its way down a list of names, and circling those unable to balance the books or account for their lavish lifestyles.

This week, sources told Arabian Business that the CEOs of at least two other Dubai development majors – between them responsible for a completed project portfolio worth over $100bn – are currently the subject of CID probes.

It’s going to be an uncomfortable summer for those without a clear conscience.

Andrew White is the deputy editor of Arabian Business English

It’s going to be an uncomfortable summer for those without a clear conscience

original published Arabian Business
http://www.arabianbusiness.com/index.php?option=com_content&view=article&id=528460&newsletter=1

White-collar crime rarely captures the imagination as easily as its garden-variety counterparts.It seems you have to bring down a bank, hide billion-dollar losses or at least plunder a pension plan in order to secure column inches alongside the murder du jour.

Part of the reason is in the telling – after all, it’s unfortunately far easier to picture a grisly death, than it is to follow how the judicious use of special purpose entities might scupper a $111bn energy giant, or how one city whiz-kid with delusions of grandeur could blindside a 144 year-old Swiss bank with an alleged $75bn in unauthorised trades.

However, the summer of 2008 will be keenly remembered for a string of high-profile investigations into alleged financial irregularities by senior executives at both Dubai Government-owned and private entities.

If the public prosecutor’s suspicions are proved accurate, then His Highness Sheikh Mohammed Bin Rashid Al Maktoum’s drive for transparency – which is to be applauded – will have claimed its first scalps.

The summer of summonses began in April, and the announcement of probes into the activities of individuals at Dubai Islamic Bank (DIB) and its affiliate Deyaar.DIB’s former vice president for finance structure, Rifaat Othmani, was arrested as part of a fraud investigation on June 5. He and several other former members of DIB staff are being investigated, while the probe also led to the arrest of JPMorgan Chase’s senior country officer for the UAE, Omair Mooraj.At development firm Deyaar, meanwhile, four people have been arrested as part of a police investigation into alleged embezzlement.

Those hauled in include Deyaar’s former CEO, Zack Shahin, who has since maintained his innocence.Ever since the DIB and Deyaar investigations were made public, rumours have run rife that a host of other high-profile figures were also in the firing line. It has been a summer of ‘when’, not ‘if’, and so it came as no surprise when more arrests were announced last week.

First to be named was Adel Al Shirawi, the former CEO of mortgage giant Tamweel, and now vice chairman of state-owned Istithmar World PJSC. His former head of investments Feras Kalthoum is under the microscope too.

Down the road at Dubai Government-owned developer Nakheel, general manager of sales Walid Al Jaziri and former Nakheel executive Karim Masaad have also been arrested.

We can be sure that the public prosecutor’s office is not done yet. Amid tales of tender-rigging, bribery and profit skimming, the government is steadily making its way down a list of names, and circling those unable to balance the books or account for their lavish lifestyles.

This week, sources told Arabian Business that the CEOs of at least two other Dubai development majors – between them responsible for a completed project portfolio worth over $100bn – are currently the subject of CID probes.

It’s going to be an uncomfortable summer for those without a clear conscience.

Andrew White is the deputy editor of Arabian Business English

98% call for more transparency in real estate – Real Estate – ArabianBusiness.com

98% call for more transparency in real estate – Real Estate – ArabianBusiness.com:

“Last month, a report by Jones Lang Lasalle claimed Dubai was now the most transparent market in the Middle East.

The study showed that the city registered the greatest improvement in real estate transparency globally over the last two years.

But Arabian Business readers disagreed. As well as 86 percent calling for urgent action, another 12 percent thought that, while the situation had improved, there was still a long way to go.

Just two percent of respondents said they were happy with the state of the region’s real estate market and would be happy to do business.

Asked whether their recent real estate dealings had been ‘open and honest’, no-one in our poll said yes.

Dubai rated ‘most improved real estate market’
Transparency report says emirate has made great strides over past two years.”

The UAE Real Estate "FLIPPERS" – Aldar clamps down on property ‘flipping’ – Real Estate – ArabianBusiness.com

Aldar clamps down on property ‘flipping’ – Real Estate – ArabianBusiness.com: “

Abu Dhabi’s largest real estate company is to become the latest developer to clamp down on the practice of ‘flipping’ by placing restrictions on the resale of its properties.

Aldar Properties CEO Ronald Barrott said in comments published on Tuesday that the developer will impose new rules on resales in its next phase of its properties coming online in October and November.

Barrott said these rules governing resale of its properties will become standard for all future projects.”

A degree of speculation can be good, but it needs to be tempered…

You can’t let the market get out of control, otherwise you have what is going on in Dubai,” Barrott told UAE daily The National.

“That is not a criticism, but there is overheating there. What you want is a market that moves quickly, but is sustainable.” Barrott would not reveal what measures Aldar plans to impose to dampen speculation other than that they will be “quite a new way of dealing with this issue”.

The announcement follows a similar move by Dubai-owned developer Nakheel, which said earlier this month that it was taking action to stop speculation on its Trump International Hotel & Tower, already the second most expensive in Dubai behind the Burj Dubai.The developer said investors in the Trump tower have to sign a purchase sale agreement banning them from on-selling the property for one year, adding that the clause could be extended to other projects in the future.

The practice of “flipping”, where investors buy property and then quickly sell it on at a higher price, has been blamed in part for the soaring price of real estate in the UAE.

House prices in Abu Dhabi rocketed by 61 percent between the fourth quarter of 2007 and the second quarter of this year, while in Dubai prices jumped 37 percent over the same period, HSBC said in a report in July.

98% call for more transparency in real estate – Real Estate – ArabianBusiness.com

98% call for more transparency in real estate – Real Estate – ArabianBusiness.com:

“Last month, a report by Jones Lang Lasalle claimed Dubai was now the most transparent market in the Middle East.

The study showed that the city registered the greatest improvement in real estate transparency globally over the last two years.

But Arabian Business readers disagreed. As well as 86 percent calling for urgent action, another 12 percent thought that, while the situation had improved, there was still a long way to go.

Just two percent of respondents said they were happy with the state of the region’s real estate market and would be happy to do business.

Asked whether their recent real estate dealings had been ‘open and honest’, no-one in our poll said yes.

Dubai rated ‘most improved real estate market’
Transparency report says emirate has made great strides over past two years.”

Dubai’s zero tolerance pledge on corruption – Banking & Finance – ArabianBusiness.com – Sent Using Google Toolbar

Dubai’s zero tolerance pledge on corruption – Banking & Finance – ArabianBusiness.com

The Government of Dubai will take strict and prompt action against all acts of corruption and bribery wherever they occur in the emirate, Dubai’s Public Prosecutor said on Sunday.

Commenting on the recent questioning of employees of listed and public companies on suspicion of exploiting their positions to make illegal profits, he said: “The government will continue to have a strict stance against all aspects of corruption and will take legal measures against violators.”

He said fighting corruption is at the top of the government’s priorities.

Dubai Government follows a transparent and clear policy on such issues. There are strict directives to have zero-tolerance towards all aspects of corruption, bribing and taking advantage of official positions.”

His comments came just days after Dubai mortgage lender Tamweel’s former chief executive Adel Al Shirawi and head of investments were named as part of an investigation for alleged wrongdoing.

And Nakheel, the government-owned developer of manmade islands in the shape of palm trees, said on Friday one of its employees was under investigation on suspicion of bribe-taking.

Earlier this year, investigations began into alleged irregularities by executives at Dubai Islamic Bank, the Gulf Arab state’s biggest Islamic bank by market value, and its affiliate real estate firm Deyaar.

The Public Prosecutor added that the results of ongoing investigations about the accused employees will be announced once they are complete.

“Any employee exploiting his position to make illegal profits will not have immunity. The strictness with which some violations that emerged in the recent past were dealt with, confirms the government’s commitment to maintaining the highest global standards in fighting corruption and enhancing its achievements in the economic, financial and legislative fields,” he said.

He added that corruption and bribery are some of the most important issues that obstruct development in the World.

“The government has created an ideal environment here, which is supported by a legal and legislative structure that depends on the best global practices.

“The government will continue this policy, which made it gain the confidence of business leaders throughout the region and the world. There will be no tolerance shown to anybody who tries to exploit his position to make illegal profits,” the Public Prosecutor added.

Meanwhile, Marwan Bin Ghalaita, chief executive of the Dubai Real Estate Regulatory Agency (RERA), said on Sunday that investigations into financial irregularities at property developer Nakheel and mortgage lender Tamweel are a sign that transparency in the real estate sector is improving.

“I think this is a good thing for the market,” Bin Ghalaita told radio station Dubai Eye.

He disagreed with this month’s Morgan Stanley report that claimed Dubai property prices could fall up to 10 percent in the next two years.

“The real estate market is very solid and the confidence is there,” he said.

The RERA head also said that companies need to educate their employees about the values and ethics of their business, as some of them come from countries where bribes are common in the industry and are seen as a form of commission. (Reuters)

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

Nakheel exec in bribery scandal named
UPDATE 1: Media reports say general manager of sales being questioned by police.

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.”

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

The Wisdom of crowds – Dubai Property Prices – the truth – Real Estate – ArabianBusiness.com – Sent Using Google Toolbar

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

Deja Vu
Posted by Luis, Dubai, UAE on 11 August 2008 at 08:59 UAE time

First, for this exercise you may be better if you had quoted “the wisdom of crowds”. I personally find it quite shallow, but probably it would have been a better reference.

Trojan already took care of the market timing aspects and put some of the most disturbing facts. I would just like to add the following (facts and opinions).

Fact
I expected the dot com to crash much earlier than I did. If I had put my money where my mouth was I would have lost my shirt and margin calls would have killed me. Being right is not enough to make money, I think many people knew that there was an overvaluation but still it paid not to bet on it.

In 2004 I could not believe either that property prices in my country (Spain) or my workplace (London) could go any higher. Higher they went, and down… and I heard many of the same reasonings (like the need to provide housing for all the immigrants). Again the prices could go up for much longer than I could expect.

Fact
If you are working here, especially if you are an expat, it is not a good idea to invest here. This is an area with high specific country risk. If your source of money is here and your investments are here when economy goes south you will more likely get a double whammy, losing your job and your investments.

Diversification is king. (and yes, this is a fact, not an opinion, check any basic Finance book). For the same reason the fact tact that some institutional investors are putting their money in other areas is not necessarily bad. They may be looking for diversification themselves.

On the other hand, this supports the idea of people in Europe looking for a non correlated investment (if high oil prices screw up the economy and your job at least your investments are linked to an economy that profits from high oil prices).

Fact
Bubbles are not prickled so much by external events as by people losing heart. These type of polls may be a good barometer. But of course ex post people will build a causal relationship with some event (dot com it was 9/11 even though my company in the telco space had been laying off people earlier). For this one maybe it would be Russian-Georgian conflict… who knows. But all it takes is a change in “sentiment”… this may be quite sudden.

Fact
It is true that there is too much money in the region chasing too few opportunities. But now the opportunities in Europe look suddenly cheaper and the oil price may go down for a number of reasons. Besides trusting that your investments will work because of an excess in liquidity is, well, adventurous to say the least. Most people who invest here do not understand how this works, same was true during the dot com bubble, by the way.

Opinion
Even if prices go up this is not a good thing, it simply means that when (not if) they crash they will do faster and deeper.

Opinion
This region has a number of structural weaknesses that have been overlooked during the good times (legal system, regulatory capabilities). We see the failures in much more mature and (in theory at least) better regulated economies like the US. The mood is “We are different here”. Well, my bet is that “we are NOT so different here” when the bad times arrive I do not think there will be too much preparation.

And while the governments in the region will probably take care of the locals (for their own survival), expats will be left hanging high and dry.

I personally do not trust financial statements much here. In my sector I know quite well how easily things would go south, I have no reason to believe that financial institutions are in any better shape.

Opinion
If you are basing your decision to invest on the belief that you will find someone shortly willing to buy it from you, then you are speculating. There is a good reason that speculators make money, it is because they take risks. In my opinion people should stay away from investments where they do not understand the risk, and no, bricks are not “risk free” investments. It does not matter what your mommy told you.

Disclaimer
Yes, I am a very pessimistic person by nature.

Flip mentality Dubai Property Market – Dubai Property Prices – the truth – Real Estate – ArabianBusiness.com – Sent Using Google Toolbar

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

Property Prices Graph
Posted by Maureen, Dubai, UAE on 11 August 2008 at 09:16 UAE time

Well written article – thoroughly enjoyed it!

My own thoughts are that that we are probably at stage 4, but sometimes I even have disbelief of my own beliefs, (i.e. don’t buy in an upmarket). This because of the sheer numbers of people flocking to Dubai (The Gold Rush Syndrome ?).

But on the back of that I see huge numbers leaving and even more colleagues disenchanted because they cannot even afford the standard of accommodation they took for granted back home and now they wonder what it’s all about.

They came here to have a change in lifestyle, make some money and make a difference, but that fairytale is changing.

The only people to truly benefit truly either the people who bought 3 years ago (lucky them for having had both the money and the foresight), and/or the people who are worried about the future of their own unsettled countries and are setting themselves up “just in case” . They are the lucky ones (or maybe not).

The main question I ask myself constantly is, when did the world become so concerned with property, wealth, and greed. Suddenly (and I do mean suddenly), we seem to be on a world stage where the world has gone quite mad about property.

When did it change from being a roof over our heads with maybe another small investment on the side(i.e. holiday cottage), to this monster making enormous capital gains for speculators.

The question has to be asked, is it driven like oil by speculation. I think the answer quite simply yes. Will it last? I don’t think so. When will it end? Certainly not until the appetites are satisfied.

Is it wrong to speculate on property, probably not. Our forefathers never had the chance to “get rich quick without any effort”, so why not get it if you can I hear everyone say.

The real problem arises however with the “Flip” mentality here in the middle east, and that is something which may catch a lot of people out because they will get in at stage 5 and fall victim to the failings in the system.

Check out the wealthy VIP’s invited to these “salubrious property launches”, they put down deposits on say 10 units, hand over their cheque, go down to the hall where the masses wait clutching passports and cheque books (there will never be another building built in Dubai you would think !). He onsells on first come first serve to these poor suckers, who eagerly pay him a 10% premium just to get the right to jump the queue and buy this rare commodity. He then pops back to the seller, gives them ten cheques and takes back his own!

It’s a joke. I have seen it happen, and its wrong, but can we ever stop it, and who cares, certainly not the flippers.

But that’s Dubai, and it is that greed that just might kill the goose in the end, but when will that be, and where are we on the hraph. Well maybe number 4 or 5, but then again maybe it’s number 2. It is going to be a very interesting scenario as it plays out.

One thing for sure however, the rich get richer and the poor struggle to survive and that will never change, only the degrees of wealth changes at the upper end.

Property court to open in Dubai next month – Middle East News

Friday, Aug 08, 2008
Gulf News

Dubai:

Dubai’s Real Estate Regulatory Authority (Rera) will shortly create a property court with operations starting in September.

Currently, most people with disputes contact Rera in the hope a solution will be found.
The majority of cases do not make it to the civil court as investors are put off by a waiting period of anywhere between 18 months and three years.

However, with the new court, investors, end-users, tenants, contractors and developers will be able to have disputes heard in a much shorter time-frame.

“Rera has a huge amount of work to do already. Once the court is in place, it will have a better market understanding than the civil courts,” said Michael Kortbawi, partner at Bin Shabib law firm.

Real estate is playing a large role in generating revenues for the Dubai government.

© Gulf News 2008. All rights reserved.

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.”

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

Schon Properties – Well planned Property Scandal at Dubai Investment Park

posted 20. July 2008 – to Dubai7Stars.blogspot.com

written by frustrated Investors of Schon Properties

Any project whether it is residential or commercial launched by Schon properties to my and overseas investor’s experience is regarded as too risky not only in Dubai but also elsewhere, since the company has fully failed to deliver their first and foremost ambitious project, as they say; the Dubai Lagoon project located within the Dubai Investment Park.

Currently they have following featured projects:

· Dubai Lagoon which was launched in 2005 for 51 buildings, but still sticking to the sand byTown Center Management.

· The Quartet at Dubai Lagoon in the same location but launched in 2007.

· Schön Business Park by Schon Investment Limited

· Schön Residences by YRA Enterprises Limited

· The Signet and the most recent one Libertas, a commercial property located between Dubai

and Abu Dhabi (legal entities not known to me at this point).

Anyone who wants to invest in these projects, first please go to the Schon properties old website www.dubailagoon.com.

Since they had a very bad publicity, they were compelled to change their corporate logo and switched to another website: www.schonproperties.com.

It is interesting to see that their first website have published newsletters for the investors which does not show much achieved whatever they have promised there.

When I write this blog as of 20^th of July 2008, the construction is not even 10% ahead.

The photographs taken in the month of July 2008, the latest.

Remember total 51 buildings and over 4000 apartments to complete and see the pathetic progress made by this developer!

No doubt for me, Schon Properties Limited is one of the most crooked, illegal, untrustworthy developers in Dubai.

Why and how they have been allowed to do business in Dubai and elsewhere in the UAE is a big question.

Not only do they mislead the public by illegally using Schon as their name.. their real name is Husain.. may be they do not want the public to know of their Pakistani background by giving a touch of German word – Schon with 2 dots (umlaut) over the “O”

When I saw the advertisement in 2006, I thought this was a serious company.

They also illegally misled us for buying their property on the condition that we were entitied for a residence visa automatically upon purchase of Dubai Lagoon which was not true.

This out of the blue promise recently came out as false after RERA Audit.

The company does not adhere to global universal business standards and have been stealing from the public with their off plan scams, again and again in front of Dubai Government officials.

Morever, My apartment was purchased in 2006 through another property broker under Name 3D Venture Real Estate and again, Pakistani businessmen who are doing business with Schon in collussion.

When I have asked for a fair settlement through a refund on my problems, it has recently been revealed that they have not disclosed any brokerage fee to us while signing the official contract with Town Center Managerment hence, no transparency on our deal.

We have already involved RERA but still correspondence are going on.

In addition, we have informed Dubai Police, General Manager of Dubai Investment Park Mr. Omar Al Mesmar, UAE Mission for which I I I I am waiting for an answer from them.

A normal refund which we have asked is still in pipeline and is for sure, deliberately being dragged on and on inspite of RERA’s green signal to Schon Properties showing no objection of releasing the refund to us.

Beneficial owners of these firms (you can see all of them personally smiling on their company website while investors are having sleepless nights!) should be legally punished. These are the types of individuals who make Dubai and for that matter UAE in dark shadows which this great land of possibilities is not entitled to.

I am hoping that the UAE Government officials act and bring justice for all the overseas and domestic investors they have damaged and hurt.

BUYERS BEWARE.!!!!..

To all individuals who have received fake excuses from this developer for those horrific year after year delay, do not trust Schon Properties any more.!!

Instead take collective action against these unscrupulous, inexperienced developers now!! Do not go for individual solutions which is not effective.

Just a quick advice for those who are taking action againtst SP.

You can also write a complaint against SP to Ministery of Justice; they have big influece on the Courts and government departments. You can get their details from the internet.

This is one of the messages we have received from another Dubai Lagoon Investor and this is what she/he has to say

Quote

To all Dubai lagoon investors;

I would like to share some infomation that might interest you….

I also have a flat in Dubai Lagoon phase-1. I am currently in court proceedings with Schon Properties to get my refund.

I have been told by my lawyer that Schon Properties previously known as TCM
(Town Center Management) had no legal right to sell any appartment to any individuals back in the end of 2005 which they have done.

What I mean is that the Governmental Authority had not given them the rigtht to sell these appartments when they did and therefore, they have broken the Duabi law. Schon properties are carrying out illegal activities and they do not respect anyone even RERA. I do not think that RERA has a huge influence on getting your rights from Schon and I therefore, advice you to get a Lawyer that will properly dig the secrets of schon properties and what is behind the lies that they all telling their investors. Dubai Courts will give your rights from Schon properties..

I hope this helped..
XXXXXX (Name not disclosed)
Unquote

Thats all for now.

More stories to follow as and when more updates we get. For further information, you may visit :

· Dubai Lagoon Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?t=292680&page=84

· The Signet, Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?p=22861392

· Schon Residence Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?p=22411850

A Overseas Victim of Dubai Lagoon Project !

Schon Properties – Well planned Property Scandal at Dubai Investment Park

posted 20. July 2008 – to Dubai7Stars.blogspot.com

written by frustrated Investors of Schon Properties

Any project whether it is residential or commercial launched by Schon properties to my and overseas investor’s experience is regarded as too risky not only in Dubai but also elsewhere, since the company has fully failed to deliver their first and foremost ambitious project, as they say; the Dubai Lagoon project located within the Dubai Investment Park.

Currently they have following featured projects:

· Dubai Lagoon which was launched in 2005 for 51 buildings, but still sticking to the sand byTown Center Management.

· The Quartet at Dubai Lagoon in the same location but launched in 2007.

· Schön Business Park by Schon Investment Limited

· Schön Residences by YRA Enterprises Limited

· The Signet and the most recent one Libertas, a commercial property located between Dubai

and Abu Dhabi (legal entities not known to me at this point).

Anyone who wants to invest in these projects, first please go to the Schon properties old website www.dubailagoon.com.

Since they had a very bad publicity, they were compelled to change their corporate logo and switched to another website: www.schonproperties.com.

It is interesting to see that their first website have published newsletters for the investors which does not show much achieved whatever they have promised there.

When I write this blog as of 20^th of July 2008, the construction is not even 10% ahead.

The photographs taken in the month of July 2008, the latest.

Remember total 51 buildings and over 4000 apartments to complete and see the pathetic progress made by this developer!

No doubt for me, Schon Properties Limited is one of the most crooked, illegal, untrustworthy developers in Dubai.

Why and how they have been allowed to do business in Dubai and elsewhere in the UAE is a big question.

Not only do they mislead the public by illegally using Schon as their name.. their real name is Husain.. may be they do not want the public to know of their Pakistani background by giving a touch of German word – Schon with 2 dots (umlaut) over the “O”

When I saw the advertisement in 2006, I thought this was a serious company.

They also illegally misled us for buying their property on the condition that we were entitied for a residence visa automatically upon purchase of Dubai Lagoon which was not true.

This out of the blue promise recently came out as false after RERA Audit.

The company does not adhere to global universal business standards and have been stealing from the public with their off plan scams, again and again in front of Dubai Government officials.

Morever, My apartment was purchased in 2006 through another property broker under Name 3D Venture Real Estate and again, Pakistani businessmen who are doing business with Schon in collussion.

When I have asked for a fair settlement through a refund on my problems, it has recently been revealed that they have not disclosed any brokerage fee to us while signing the official contract with Town Center Managerment hence, no transparency on our deal.

We have already involved RERA but still correspondence are going on.

In addition, we have informed Dubai Police, General Manager of Dubai Investment Park Mr. Omar Al Mesmar, UAE Mission for which I I I I am waiting for an answer from them.

A normal refund which we have asked is still in pipeline and is for sure, deliberately being dragged on and on inspite of RERA’s green signal to Schon Properties showing no objection of releasing the refund to us.

Beneficial owners of these firms (you can see all of them personally smiling on their company website while investors are having sleepless nights!) should be legally punished. These are the types of individuals who make Dubai and for that matter UAE in dark shadows which this great land of possibilities is not entitled to.

I am hoping that the UAE Government officials act and bring justice for all the overseas and domestic investors they have damaged and hurt.

BUYERS BEWARE.!!!!..

To all individuals who have received fake excuses from this developer for those horrific year after year delay, do not trust Schon Properties any more.!!

Instead take collective action against these unscrupulous, inexperienced developers now!! Do not go for individual solutions which is not effective.

Just a quick advice for those who are taking action againtst SP.

You can also write a complaint against SP to Ministery of Justice; they have big influece on the Courts and government departments. You can get their details from the internet.

This is one of the messages we have received from another Dubai Lagoon Investor and this is what she/he has to say

Quote

To all Dubai lagoon investors;

I would like to share some infomation that might interest you….

I also have a flat in Dubai Lagoon phase-1. I am currently in court proceedings with Schon Properties to get my refund.

I have been told by my lawyer that Schon Properties previously known as TCM
(Town Center Management) had no legal right to sell any appartment to any individuals back in the end of 2005 which they have done.

What I mean is that the Governmental Authority had not given them the rigtht to sell these appartments when they did and therefore, they have broken the Duabi law. Schon properties are carrying out illegal activities and they do not respect anyone even RERA. I do not think that RERA has a huge influence on getting your rights from Schon and I therefore, advice you to get a Lawyer that will properly dig the secrets of schon properties and what is behind the lies that they all telling their investors. Dubai Courts will give your rights from Schon properties..

I hope this helped..
XXXXXX (Name not disclosed)
Unquote

Thats all for now.

More stories to follow as and when more updates we get. For further information, you may visit :

· Dubai Lagoon Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?t=292680&page=84

· The Signet, Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?p=22861392

· Schon Residence Skyscrapercity through Google search

http://www.skyscrapercity.com/showthread.php?p=22411850

A Overseas Victim of Dubai Lagoon Project !

Protection Law planned for property buyer in Dubai

original published TheNational.ae
http://www.thenational.ae/article/20080619/BUSINESS/979078495/1041/ART
Angela Giuffrida
Last Updated: June 19. 2008 9:13PM UAE / June 19. 2008 5:13PM GMT

The proposed property law would also give home buyers the right to seek compensation against developers who make changes to a project’s design halfway through construction. Ryan Carter / The National

People who buy property off developers’ plans will be better protected from misleading marketing by developers if a new consumer protection law is passed by the Dubai Land Department (DLD).The proposed property law would also give home buyers the right to seek compensation against developers who make changes to a project’s design halfway through construction.Under the regulation, developers would have to give buyers a “disclosure statement” before signing a contract.

The statement must include full disclosure about a development, such as how many buildings it will include, the facilities it will provide and where it will be located. It would also include the estimated service and maintenance charges for the development and a date of completion.The regulation is also expected to contain a “statutory warranty” from the developer, meaning that home buyers will be entitled to seek compensation if changes are made to a development or the final product differs from its description in the disclosure document.

The aim of the regulation is to crack down on developers who sell properties off-plan and then fail to deliver on their promises.”This is going to be huge if they bring it in,” said Stephen Kelly, an associate with Clyde & Company legal consultants.”It will mean developers warranting that the information in their disclosure is correct and not incomplete. If a developer makes changes to the development later, for example they ­decide the development is only going to have five gyms as ­opposed to the original 20, then a buyer can seek compensation if they suffer loss from the changes.”

The National recently highlighted complaints raised by residents at Jumeirah Beach Residence after the developer, Dubai Properties, decided to cancel five of the gyms originally planned for the project and build a 500-vehicle car park where a beach park had been planned.In 2005, Emaar Properties came under similar pressure from residents at its gated community projects, the Meadows and the Springs. Owners complained that the developer had failed to deliver some of the facilities it had promised, and was also charging for amenities initially sold to them as free of charge.

“These changes, if introduced, will impact how developers market their projects and will hopefully assist in preventing some of the problems that have occurred recently, with developers not completing their developments as they have been represented to purchasers,” said Mr Kelly.

The Real Estate Regulatory Authority (RERA) was set up by the Dubai Government last year to regulate the emirate’s property market and stamp out malpractice among developers.

All developers now have to register with the RERA, and any money made from off-plan sales has to be placed in a specially managed account, known as an escrow.The escrow account must be opened with an approved bank, but before this can happen, developers must provide all details about a project to the DLD, such as the title deed of the plot, the designs and layout. Money made from off-plan sales is then placed in the account and used only to fund the construction of the project.

The system is also expected to ensure that construction firms are paid on time.

“You’re no longer going to see property developers collecting money at the launch and then just using it to buy another plot,” said Alexis Waller, a partner at Clyde & Company.”

The developer now has to work with the approved bank, RERA and the DLD to develop a cash flow system, so it’s clear how the development is running and what the money is being spent on. The bank will also have to approve the money being paid to contractors, and when.

It’s really about cracking down on those developers who take the money but then don’t do the work.”

Strata law – legal principles that lay out rules in freehold condominium and apartment developments – took effect in April in Dubai. However, the law is currently under revision and changes may be made.
The law also places the management of a development’s common areas – such as lifts, pools, gyms and parks – in the hands of the home owners, who will be entitled to set up a home owners association.

A spokesman for the RERA, who wished not to be named, said the authority was close to finalising the revisions of the law.
Walid Abdel Latif, the director of sales and marketing at Define Properties, which recently launched in Dubai with a planned portfolio of properties worth Dh8 billion (US$2.1bn), said the fresh regulations would weed out the poor quality developers in the market. “It’s a very healthy move,” he said.

“Through this, we will be able to provide the right services to buyers, will know how much those services will be and how good the actual quality of the building will be. Although we’re a new company, it’s good for us to start from scratch – so we’re building the right way from the start.”

agiuffrida@thenational.ae

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

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

In the final part of our interview with Peter Riddoch, CEO Damac Properties, he discusses why so many real estate developments miss their deadlines, whether the Dubai property boom is a bubble waiting to burst and how the market has changed over the past few years.”

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

Update – Al Areifi Tower Dubai Property Scandal – RERA do not mediate

Al Areifi Tower Scandal still pending/ Dubai Press turns blind eye
June 2008

latest investor comments: http://www.skyscrapercity.com/showthread.php?s=fdb7901a1a29a12cb69dee8f8e1e69c6&t=221552&page=11

Has anyone been in contact with RERA or the Dubai Land Department lately, Ive tried to email Dubai Land Department many times but I haven’t got a reply yet. what is the government doing to help the investors from these robbing developers.

I believe Dubai Land had stopped short of fully supporting investors in this case, for the past three weeks they were trying to convince investors to accept +50% to close the case. As a matter of fact Areifi has been comfortably contacting investors offering them now +55% and claiming that Dubai Land is not legally entitled to mediate or to comment in this case.Regardless of Areifi’s latest claims, there are a number of investors who have hired lawyers and prepared themselves for long court battle.

I advice all to consider joining forces and go to court.

Meanwhile, how come we didn’t see any report or even a letter to the editor from investors in 7DAYS? I sent them a letter the other day but it wasn’t published, I feel we need to get in touch with one of their reporters to put them in the picture.

Got a call a couple of day ago directly from the owners offering for the appartments 35%.. said to him thanks but no thanks. Ill be going back to dubai maybe next week to sit again the the Land Department .. The last time I was there they told me to wait for the investigation to finish.I am preparing myself for a long battle; So I am ready to join forces with any investor who is willing. Just let me know and post a msgThanks

Got another call for the 50% .. saying no

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.””

Dubai – No pets for owners of apartments – JBR residents resist pet ban

Gulfnews: JBR residents resist pet ban

Dubai: Expatriates living in Jumeirah Beach Residence (JBR) are vowing to fight the decision to ban pets – including dogs, cats and birds – from the development. The deadline for all pets to be removed from JBR passed yesterday but many people living there remain adamant they will not give up their loved companions without a fight. Dubai Properties LLC gave residents a 30-day deadline to make alternative arrangements for their pets at the beginning of June. But many people say they never received any correspondence on the matter while others have no intention of giving up their pets. Olga Uskova from Kazakhstan has been living in a Murjan apartment with her Tibetan spaniel Pancho since July last year. She told Gulf News: “Getting rid of my dog is not even up for discussion as he is a member of my family now. I enjoy living here but I don’t understand this whole furore about keeping pets here. I walk my dog outside the main area and I always clean up after him. “He has been chipped with a Municipality tag and doesn’t have any diseases; I really don’t see what the problem is.” The charity K9 Friends has been inundated with calls from worried residents but they are unable to take in any more animals as they are at full capacity. Nick Nice, a sales manager from England, lives with his Spanish jackabee, Lola, in Bahar One. He said there was absolutely no chance of him giving up his dog and said that someone would have to literally force Lola out of the complex. “I have not received any communication from Dubai Properties on this issue; all I have heard is rumours from other people living here. “I am a tenant and the contract I signed certainly said nothing about keeping pets. I think it’s a ridiculous policy considering the amount of rent we pay to stay in this flat.” An official spokesperson for Dubai Properties LLC said, “The JBR Towers’ Association Constitution clearly states that pets are not allowed within the JBR premises. Despite this stipulation, we are receiving repeated complaints about residents flouting the rule. “To address this problem and to ensure the entire JBR community complies with the clause for pets, we have offered a lenient time frame for residents to make alternative arrangements for their pets with immediate effect. “Dubai Properties is also working closely with local animal care organisations to explore solutions for this issue at the earliest.” Would you give up your pet if such a rule was implemented in your residential area? Is it fair for property developers to issues such clauses without prior warning? Why? Tell us at letter2editor@gulfnews.com or fill in the form bellow to send your comments. Your comments All respectable apartment complexes do not allow pets as it is unhygienic. Apartment buildings are not suitable for pets, especially dogs. It is cruel to the pets who need space to run around, and a risk to other residents. If you want a pet, get a villa. Richard Dubai,UAE Posted: July 02, 2008, 09:34 The article implies that the rule on no pets was suddenly sprung on tenants. It is not so. For over a year there have been signs in all the lobby areas, clearly stating the no pet’s policy in JBR. I have issues with JBR Management, but on this topic I think they were upfront and clear. ns Dubai,UAE Posted: July 02, 2008, 08:52 Definitely not, I bought this house and it is totally my personal space . No one is going to come in to my house and tell me what to do . Thanks TONY Dubai,UAE Posted: July 02, 2008, 08:29 When people take pets willingly, they are ready to take care of them, and pets become members of the family. Pets make people more affectionate and kinder. They are like children, would anyone give up his own child? If such rule is implemented to keep the area clean, then they should think of some other way to organize cleanness. Any warning of such kind is very cruel. What will the fate of poor animal be? anonymous Sharjah,UAE Posted: July 02, 2008, 08:29 I wouldn’t give up my pet. Pets become part of one’s family. They do not have the right to issue such a clause as long as it was not mentioned in the contract. Can u give up your child? For many, pets are their children. Mai Abu Dhabi,UAE Posted: July 02, 2008, 08:06 It is really sad 2 know that there are people who just don?t love pets. If the tenants are taking care of their pets in a proper way and they are not causing any problems 2 other people living in the surrounding, there is no reason to through them away. Sunil Abu Dhabi,UAE Posted: July 02, 2008, 08:05 For God sake, Its a pet. Pets are like family. They need to be with the human race. No use to have a pet if you can’t keep one just because of a rule barring pets. Barr night Clubs, bad channels, these are things that need to be removed.!!!! Joseph Sharjah,UAE Posted: July 02, 2008, 07:58 It?s a ridiculous rule, how can you throw a pet you have cared for and loved out of your life. They become part of your family and they are not even any menace to the society. These days we have people among us who are dirtier, not fit to live in flats and menace to the society living in, who will take care of them Danish Dubai,UAE Posted: July 02, 2008, 07:51 Absolutely not. If JBR wants my pet out… then I go out with him. How does management come up with such ridiculous ideas?? This is supposed to be an interactive community. Instead of concentrating on removing our pets – they must concentrate on better service within the residences. Claire Dubai,UAE Posted: July 02, 2008, 06:47 The residents at the JBR are owners of their properties and not at the mercy of the whims and fancies of landlords. It is high time that the developers of these properties got their act together. As shock here (no resident visa for property owners) a shock there (no pets allowed in property) gives Dubai a name that it does not deserve. Sanjay Vancouver,Canada Posted: July 02, 2008, 06:35 Giving up a pet is like giving up a child. This is the most ridiculous rule I have ever heard So basically I pay my rent, and you still, tell me what I can or cant do in my house? Mars Dubai,UAE Posted: July 02, 2008, 05:14

Dubai – Simply no rights for investors ‘Unclear law is threat to realty’ – The 100 % investor risk Dubai property market

‘Unclear law is threat to realty’: Al Mulla

original published Emirates Business 24/7 Hamed Al Sewerky on Thursday, June 19, 2008 Legal expert Dr Habib Al Mulla says Dubai’s real estate market could suffer because of what he describes as “judicial vacuum”. He believes there is conflict between the roles of a number of organisations responsible for the sector. And he says many aspects of the real estate law are unclear and out of step with developments in the sector in Dubai. In an exclusive interview with Emirates Business, Dr Al Mulla – founder and Managing Partner of a Dubai-based law firm that bears his name – calls on those responsible for the sector to end the confusion. —How would you describe the legislation that applies to Dubai’s real estate sector? —The problem with legislation in the real estate market is similar to the problem with legislation in the UAE in general. Legislation is enacted after a period of economic activity or growth and is designed to rectify the situation that has developed. Dubai experienced a real estate boom without full legislation being in place leaving a judicial vacuum in place. Although the period passed off peacefully there was a risk of disasters in the absence of adequate legal procedures and regulations. But now we are entering a stage where there is more organisation and we have seen the introduction of escrow accounts. I wish such accounts had existed at the beginning of the period of real estate growth because they are the only guarantee for investors in the sector. —What do you mean by judicial vacuum? —Development of projects starts with construction. During this phase, disagreements between developers and contractors arise and are referred to the courts. Then comes the completion phase of the project – this is when the property is delivered to the secondary developer and client. Disagreements can arise even at this stage between the developer and the first or second beneficiary. Recently a proposal to set up a committee to settle real estate disputes was put forward and it was followed by the idea of setting up a property court. The first idea is good, but the responsibilities of the committee are still unclear plus the committee has not yet been established even though its launch was announced in December. What is surprising is that after the decision to set up the committee was issued the courts refused to hear real estate cases, even though the committee had not yet been formed. Courts should not refuse cases before the committee is set up. —But the Real Estate Regulatory Agency (Rera) deals with these kinds of complaints and disagreements. —Yes, Rera was dealing with these disputes. Then the property court was established. But there is a question mark here, because a specialised court means federal legislation. Legislation in the real estate field should be federal according to the constitution. The civil procedures law is applied in all kinds of courts, and the real estate court would not be allowed to introduce special measures. —Are we heading for a legislation or a litigation crisis? —The legislative reality of the property sector is like a fireball thrown by one responsible body to another without taking into consideration the requirements of justice. The setting up of the property court ignores the rights of people to resort to [general] courts to settle disputes as it gave the property court the right to look into arbitration decisions. —How is Rera’s complaints procedure working out? —Complaints are registered at Rera only on certain days and this is not practical. In addition not all complaints are accepted and receipts indicating that the complaints have been received are not given to clients. —How would you resolve this crisis? —If we are not able to set up specialised courts without federal legislation then let us leave it to the normal courts. General law is enough and we can add to it and develop it instead of robbing the legal system of the ability to handle issues in a comprehensive and thorough manner. —What can investors in real estate sector, especially small ones, do? —I have not found a solution and have failed to resolve some clients’ cases because I do not know where to go. I went to the executive council, as it is the party that will form the committee, without success. As for normal courts, they rejected the cases. So I went to Rera, where I was told that such disputes were not their area of responsibility. In fact there is no solution. All means have been blocked and what is left is resorting to the media to raise this issue. —Why are all deals in the real estate sector contracts of submission? Legally speaking, contracts in the real estate sector, especially those between developers and buyers, are not contracts of submission. But realistically speaking they are since the buyer has no right to negotiate and has no other option but to accept the conditions as they are. And I see this as a real crisis that requires urgent intervention by officials as this could negatively affect Dubai’s real estate growth. In more developed countries there are laws to protect the consumer. Legislators here should intervene in the real estate sector to set general rules protecting consumer rights. —But does repeated intervention by legislators not conflict with the principles of a free economy? —A free economy does not mean non-intervention by legislators. It means parties having the freedom to enter into contracts in a way that does not harm their interests. And what is happening now is that there is a large group of consumers who are suffering injustice at the hands of developers because of the absence of a legislative tool. —Do some of these practices amount to criminal acts? —These practices are not criminal as crimes have to be defined in law, and as long as there is no legal text defining certain acts in this way they are not crimes. But they can be called negative practices or violations. —What are the most significant negative practices that your firm comes across? —Some developers are not sticking to contracts in terms of finishings, space and the positions of properties – and the buyer can do nothing. Suing can cost the buyer more than the return on the investment. Some developers annul their contracts with buyers and issue new contracts at higher prices – this happens with both small and large developers. —Where can real estate legislative reform start? —Clarity is the best solution. Vagueness threatens the sector, whether it is related to laws, procedures or the acceptance or rejection of complaints. All this cannot be left to personal opinions. —Do you prefer local or federal legislation? —The constitution stipulates that legislation on real estate ownership should be federal. But federal legislation can be flexible by giving freedom to the emirates to establish procedures and execute the law in accordance with their own special circumstances. PROFILE: Dr Habib Al Mulla, Founder and Managing Partner of Habib Al Mulla and Company Dr Habib Al Mulla has a PhD from Cambridge in the United Kingdom, an LLM from Harvard and a BA in Shariah, civil and criminal law from the UAE University. He is licensed to appear in all courts in the UAE and specialises in commercial and corporate transactions, internet technology, intellectual property rights and banking. Al Mulla is a member of the Federal National Council and former Chairman of the Dubai Financial Services Authority. He founded Habib Al Mulla and Company in 1984 and the firm has become one of the largest of its kind in Dubai.

RERA Dubai Property Law – Strata Law unclear about rights of building owners

Strata Law unclear about rights of building owners

originial published Emirates Business 24/7 Anjana Kumar on Sunday, June 29, 2008 The new Strata Law is unclear about the rights of building owners and communities, according to a legal expert. “The law was drawn up to establish the ownership of individual apartments and office spaces in a development and give legal status to homeowners’ associations. But it does not cover the election of association office bearers and how resolutions are adopted and implemented,” said Ali Al Haddad, owner and Senior Lawyer at Al Haddad & Associates. “Also there is no mention about the accounts and balance sheet of the homeowners’ associations,” he added. The Strata Law came into effect through Law No27 of 2007, which contains 33 Articles with no mention of any penalty clauses. Also, Law No7 of 2006 concerning property registration in Dubai also does not contain any penalty clauses. “Considerable rights were given to the master developers regarding the constitutions of homeowners’ associations, but they should be given powers to amend their constitutions. According to the law, master developers make the constitution, rules and regulations for the homeowners’ association. If the master developer prepares the initial constitution, the association must have powers to amend it when it is fully set up. A senior official of another Dubai-based law firm says the rights of buyers and sellers will remain in a state of transition until the Strata Law is finalised by the Real Estate Regulatory Agency. “One cannot really decide what rights people have or don’t have without the regulations of the Strata Law being finalised,” said DLA Piper Middle East’s Real Estate Practice chief Tom O’Grady. The Strata Law is very dependent on the regulations, which are still at the draft phase. Hence, the law will not have much of an effect on the market, he added. “However, there will certainly be more sense of an involvement by the community in decision making in terms of how budgets are struck for developments. More involvement by owners will imply empowerment of people who will feel more involved in their development.” O’Grady suggested the legislation should not be viewed in terms of owners versus buyers, or developers versus buyers but as a partnership between residents and developers. “The law is not about control. You can’t really have a system of freehold ownership of horizontal property without creating a strata law. In most common-law jurisdictions, you either have a landlord and tenant relationship or you create some sort of a condominium and strata law ownership. “Any mature jurisdiction has seen hundreds of years of an active property market, but for a nascent property market such as the UAE to come up with rules and regulations is going to be a little complicated affair. I think if you looked at the building level the strata law could work but at the community level it could get more difficult. “In more mature jurisdictions such as Australia and the US which have had condominium laws for years you tend to have different layers of control. “So if you take somewhere in Dubai like the Meadows or the Greens you have a management company managing the community and all basic infrastructure such as the roads and district cooling. “Right now, the owners’ associations are concentrating on individual blocks rather than the larger community level. “Thus, the complexity of the strata law is heightened because of competing interests in communities in the UAE.”

Property Scandal UAE Al Salam City – Stressed Investors of AL SALAM CITY setup Website

AL SALAM CITY – The developer of Al Salam City have put the project on hold. This happened in March 2008 but was not communicated to the buyers

Wecome to http://www.alsalamcity.biz/ this site has been created by a group of extremely unhappy investors and is for anyone who has purchased a property in Al Salam City and is wondering what happens next.

The developer of Al Salam City have put the project “on hold”. This happened in March 2008 but was not communicated to the buyers, it was only the people who contacted Tameer who were told of the options. Now as time is ticking by, we need to know what exactly is happening to our investments.

We are looking for people to unite as one big entity to make our opinions and losses understood and compensated.

Please feel free to register as a user and use the blog site, its totally free and we are looking for like minded people who have suffered.

The blog site is an excellent medium for any news, sharing stories and also for us to agree on what our action plan will be.

Who am I? Well I am an investor in Al Salam City who has come to the end of a very long road of bad customer service. Someone who has been ignored, not called back, not replied to and basically lied to throughout the whole process. I feel the need to take action, for myself and my family. What has happened is not acceptable and now is the time to do something about it.

If you would like to contact me or my team click the ‘contact us’ link

RERA Dubai Property Law – Strata Law unclear about rights of building owners

Strata Law unclear about rights of building owners

originial published Emirates Business 24/7 Anjana Kumar on Sunday, June 29, 2008 The new Strata Law is unclear about the rights of building owners and communities, according to a legal expert. “The law was drawn up to establish the ownership of individual apartments and office spaces in a development and give legal status to homeowners’ associations. But it does not cover the election of association office bearers and how resolutions are adopted and implemented,” said Ali Al Haddad, owner and Senior Lawyer at Al Haddad & Associates. “Also there is no mention about the accounts and balance sheet of the homeowners’ associations,” he added. The Strata Law came into effect through Law No27 of 2007, which contains 33 Articles with no mention of any penalty clauses. Also, Law No7 of 2006 concerning property registration in Dubai also does not contain any penalty clauses. “Considerable rights were given to the master developers regarding the constitutions of homeowners’ associations, but they should be given powers to amend their constitutions. According to the law, master developers make the constitution, rules and regulations for the homeowners’ association. If the master developer prepares the initial constitution, the association must have powers to amend it when it is fully set up. A senior official of another Dubai-based law firm says the rights of buyers and sellers will remain in a state of transition until the Strata Law is finalised by the Real Estate Regulatory Agency. “One cannot really decide what rights people have or don’t have without the regulations of the Strata Law being finalised,” said DLA Piper Middle East’s Real Estate Practice chief Tom O’Grady. The Strata Law is very dependent on the regulations, which are still at the draft phase. Hence, the law will not have much of an effect on the market, he added. “However, there will certainly be more sense of an involvement by the community in decision making in terms of how budgets are struck for developments. More involvement by owners will imply empowerment of people who will feel more involved in their development.” O’Grady suggested the legislation should not be viewed in terms of owners versus buyers, or developers versus buyers but as a partnership between residents and developers. “The law is not about control. You can’t really have a system of freehold ownership of horizontal property without creating a strata law. In most common-law jurisdictions, you either have a landlord and tenant relationship or you create some sort of a condominium and strata law ownership. “Any mature jurisdiction has seen hundreds of years of an active property market, but for a nascent property market such as the UAE to come up with rules and regulations is going to be a little complicated affair. I think if you looked at the building level the strata law could work but at the community level it could get more difficult. “In more mature jurisdictions such as Australia and the US which have had condominium laws for years you tend to have different layers of control. “So if you take somewhere in Dubai like the Meadows or the Greens you have a management company managing the community and all basic infrastructure such as the roads and district cooling. “Right now, the owners’ associations are concentrating on individual blocks rather than the larger community level. “Thus, the complexity of the strata law is heightened because of competing interests in communities in the UAE.”

Property Scandal UAE Al Salam City – Stressed Investors of AL SALAM CITY setup Website

AL SALAM CITY – The developer of Al Salam City have put the project on hold. This happened in March 2008 but was not communicated to the buyers

Wecome to http://www.alsalamcity.biz/ this site has been created by a group of extremely unhappy investors and is for anyone who has purchased a property in Al Salam City and is wondering what happens next.

The developer of Al Salam City have put the project “on hold”. This happened in March 2008 but was not communicated to the buyers, it was only the people who contacted Tameer who were told of the options. Now as time is ticking by, we need to know what exactly is happening to our investments.

We are looking for people to unite as one big entity to make our opinions and losses understood and compensated.

Please feel free to register as a user and use the blog site, its totally free and we are looking for like minded people who have suffered.

The blog site is an excellent medium for any news, sharing stories and also for us to agree on what our action plan will be.

Who am I? Well I am an investor in Al Salam City who has come to the end of a very long road of bad customer service. Someone who has been ignored, not called back, not replied to and basically lied to throughout the whole process. I feel the need to take action, for myself and my family. What has happened is not acceptable and now is the time to do something about it.

If you would like to contact me or my team click the ‘contact us’ link

Dubai Property buyers ‘have right to residence visa’

original published Gulf News June 06, 2008
http://archive.gulfnews.com/nation/Immigration_and_Visas/10218957.html


Dubai: Freehold property buyers are fully entitled to residence visas, a senior government official has confirmed, quashing widespread confusion among homebuyers in the UAE.

Officials at Dubai’s Naturalisation and Residency Department (DNRD) have confirmed that anyone who buys a freehold property in the emirate is entitled to residence in Dubai through the master-developer.

Omar Mattar Bin Mizaina, head of employment permits section at DNRD, said,”Anyone who buys a property can get a residence visa in Dubai.” There has been widespread concern and confusion in recent weeks among property buyers about this issue, with some believing that master developers had broken the contract as visas had not been issued.

Bin Mizaina said property owners can choose whether they want to be sponsored by their master developer or their employer.”You must be a property owner, but it depends on the Ministry of Labour, as some cases are given special approval. But, yes, you can choose,” he said.

This is good news for Dubai property owners, as it is seemingly a way of getting around the dreaded ban. Now, if you own a property, even if you resign or are sacked from your job, you will still have your residency visa and won’t have to leave the UAE.

However, Mohammad Bin Braik, chief operating officer of Dubai Properties Group, told Gulf News last week:”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.”

Residence visas are given for one, two, or three years and are then renewed by the DNRD through the original sponsor.”As long as you own a property, you will have a residency visa,” Bin Mizaina said.

Delayed by developers

With the DNRD now clarifying the issue, it seems the delay in providing the promised residency visas lies with the master developers. Both Nakheel and Emaar have issued statements saying that they do sponsor freehold buyers for residency visas in line with the rules and procedures of the DNRD.

Despite the DNRD’s clear-cut process, many people in Dubai who have bought freehold properties have still not received their residency visas.

Bin Mizaina said that the master developer can apply for residency visas as soon as a property is bought and a contract is signed with buyer.

The law itself clearly states:”If the homeowner has no alternative means of sponsorship for a residence visa, the first owner may be sponsored by your master-developer for residency in Dubai, UAE, subject to the applicable immigration laws of the country.”

Legal issues

Bypassing Labour Law

An official at the Ministry of Labour said that no resident can jump an employment ban in the UAE.”A person with an employment ban can enter the UAE on a visit visa but this does not entitle him to work in the country. However, people staying in the country on a property linked residency visa and without an employment ban can work but after they obtain a work permit,” the official said.

Lawyer’s view

- According to advocate Mohammad Ebrahim Al Shaiba,
a resident may not work on a property residence visa unless an official work permit is obtained. The employee must cancel the property visa and change to his company’s sponsorship, but he may return to his property’s visa after he leaves his work.
-The work ban is not related to residence visa. Holders of property visas or the wives on husbands’ sponsorship can still stay in the UAE, while others may enter the country on a visit visa during the work ban. A property residence visa does not guarantee jobs. -

Amlak seeks 22 million Dollar in damages from Mazaya – Property Scandal Dubai Sky Gardens by Mazaya

Dubai – June 02 , 2008
original published Arabian Businees
http://www.arabianbusiness.com/520824-amlak-seeking-damages-as-property-deal-falls-through

Dubai-based Islamic mortgage company Amlak Finance said on Sunday it was seeking 82 million dirhams ($22.33 million) in damages after an initial agreement to buy a tower block in Dubai fell through.

Amlak charged in a statement on the Dubai bourse website that the agreement to buy Sky Gardens for 1.65 billion dirhams collapsed because a unit of Kuwait’s Al-Mazaya Holding Company was unable “to honour the terms and conditions stipulated in the MoU”.

The unit, First Dubai Real Estate Development Company, subsequently said it was willing go ahead with the sale, despite the lapse of a May 31 deadline. “That is not an absolute deadline and we are willing to proceed,” First Dubai said in a statement on the Dubai bourse website.

If the sale falls through, it would keep Amlak’s 82 million dirham deposit, it said.

Shares of Amlak were up 4.15% at 0911 GMT. Those of Mazaya and First Dubai were down 1.08% and 1.02% respectively. Arif Al-Harmi, Amlak’s chief executive, could not immediately be reached for comment.

Mazaya said this month it will make a profit of 46 million dinars ($173.7 million) from the sale of the project to Amlak through First Dubai. It owns 76.7% of First Dubai. (Reuters)

read also…

http://www.gulfbase.com/site/interface/NewsArchiveDetails.aspx?n=64469

http://www.zawya.com/Story.cfm/sidZW20080601000056/SecMain/pagHomepage/chnAll%20Regional%20News/obj2A17E941-F5E0-11D4-867D00D0B74A0D7C/#ZW20080601000056

http://www.7days.ae/en/2008/06/02/firms-lock-horns-over-difc-project.html

DUBAI – Delays hit building projects – Only one in five construction projects is likely to finish on time

original published The National

Last Updated: May 24. 2008 10:51PM UAE / May 24. 2008 6:51PM GMT

DUBAI // Only one in five construction projects is likely to finish on time, as shortages of materials and skilled workers – and an overabundance of red tape – take their toll.

Industry experts said few of the 4,000 or so projects currently under way would be handed over to clients on the scheduled date. The emirate is currently undergoing a construction frenzy and as the pace of building quickens, so do the risks of delays.

Residential and commercial developments along with road, bridge and utilities projects are all competing for the same resources, compounding the problem.

The same issues could crop up in Abu Dhabi and the northern emirates of Ras al Khaimah and Ajman, as they launch their own large-scale development plans.

The problem is also beginning to manifest in other Gulf states.Qatar, for example, has had to introduce price escalation clauses into contracts to stem the impact of higher building materials prices.

As a result of the delays, the relationship between builders and clients is starting to sour.

In Dubai, only a handful of projects are being completed to the satisfaction of all parties involved, said Kez Taylor, the managing director of Alec, a local building firm.“Only one in five are being completed on time,” said Mr Taylor. We should be hitting the success factor at a much greater rate than we currently are.”

He said the tensions which this led to had threatened to ripple into delays on other projects.
Successful projects … are not the norm in this part of the world.

From this, a blame culture develops, relationships break down, people become despondent and don’t want to do repeat business.”

A major factor in delays and its impact on the relationship between builders and developers was the reluctance of clients to make difficult decisions quickly, Mr Taylor said.
Because of bureaucracy, nobody wants to stick their head out and make a decision, he said.

But it is vital that the client takes the lead – it’s their project.

Emil Rademeyer of Proleads, a research firm, said more than 90 per cent of projects in Dubai were on average two months late.

I don’t think I’ve ever heard of a project being handed over early – that’s probably the question … and I’m pretty certain the response would be very few.

Mr Rademeyer said that late changes in design were a common problem among projects in the region, which led to a complete project overhaul in some cases. The situation was also compounded by a severe shortage in good quality contractors, which impacted on the standard of construction.

While there are the challenges of materials and resources shortages, much of the problem lies with changes to design – I’ve heard of cases when a project has almost been completed but then the owner decides they don’t like it and so they start over,” he said.

And because of the shortage of materials and contractors, clients are sometimes just taking what’s available, which might not be the best quality and is a big threat to the final product.”Developments in Dubai also face severe delays in connecting power, water supplies and telecommunications, with many forced to rely on temporary backups.“

There are internal risks when dealing with partners, but there are also external risks that affect a project,” said Ali Hamdan, the corporate finance manager at Sama Dubai, the developer behind The Lagoons project.

“When it comes to a large-scale project such as The Lagoons, success is dependent on dealing with organisations like the RTA (Roads and Transport Authority), Dewa (Dubai Electricity and Water Authority) and Etisalat – if you don’t connect with the infrastructure on time, you get delayed.

Jubeir Shamte, the executive director of the commercial and contracts department at Dubai Properties, which is developing Business Bay, said that clashes in culture and business practices between foreign and local firms also caused problems.

A lot of foreign companies do not understand the culture here, and when you try and bring in culture from other places such as the UK or America, a lot of problems come with it,” he said.“

For example, the concept of partnering is being treated as a new phenomenon, when it is something that we’ve been doing here for many years.”

agiuffrida@thenational.ae

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

Shaky foundations

 

original published ArabianBusiness.com

http://www.arabianbusiness.com/516690-shaky-foundations

updateDate = “Wednesday, 16 April 2008 09:52″ document.getElementById(‘crumbs-dir’).innerHTML = ‘REAL ESTATE / COMMENT /’ by Rob Corder on Wednesday, 16 April 2008

Prepayment for any products or services has always warranted a discount. Pay for a flight or hotel room up front, and you expect to get a cheaper price.

Business-to-business transactions invite even deeper discounts for companies prepared to stump up cash in advance.

The reason is simple: prepayment means positive cash flow, which can be worth a considerable percentage of any transaction.

Buying property off plan is the ultimate prepayment scheme and, like all others, it comes with a discount. The reason for the discount is two-fold. First, the developer selling property benefits from positive cash flow. In some cases, sufficient property can be sold to completely finance the building project.

Secondly, there is risk involved for the buyer, and this is built into the price.

The early days of the Dubai real estate boom, when non-Emiratis were first allowed to buy property, was a time of extreme risk. The legal system had not even been changed before developers were selling forms of ownership.

I can recall people being given contracts all but scribbled on the back of a fag packet that promised the bearer that they would own a certain property when the law allowed them to do so.

His Highness Sheikh Mohammed, who was Dubai’s Crown Prince at the time, had given his word the law would change, and for early investors – typically buying from government-owned developers – that word was good enough.

These early investors were right. They took the risk and netted massive rewards. Villas selling for $1.5 million when Palm Island was first announced are now being advertised for closer to $15 million.

The developers also won. Dubai government-owned Nakheel’s business was almost entirely founded on the cash generated from selling the first Palm Island properties off plan. Emaar, also partially owned by the Dubai government, had earlier pulled the same trick with the city’s first freehold developments for expats: Emirates Hills and Emirates Lakes.

Fast-forward six years and, while the law has been considerably tightened regarding foreign ownership, new risks have emerged in the off plan market.

Several tiers of operators have emerged. Developers such as Nakheel and Emaar have been upgraded to master developers. Smaller developers, some of which have become giants in their own right, buy plots from the master developers on which to build their own skyscrapers or villa complexes.

Investors or private home buyers can buy from master developers, sub developers, or real estate brokers that buy and sell ownership rights in the same way as futures traders sell ownership of coffee beans.

And the vast majority of speculators have as much intention of ending up holding keys to a home as traders intend to own tonnes of coffee beans. They are buying and selling paper, not property.

This house or cards has been underpinned by real estate values running ahead of the cost of building property, and the willingness of people to pay ever-higher prices for it.

But these foundations are being attacked from several directions.

Construction costs rose at about twice the rate of inflation in 2007, up around 20% according to research from international consultancy EC Harris. The price of steel reinforcement rose by 46% and structural steel gained 38%, while cement prices ended the year 30% higher.

The cost of steel in the UAE has continued to soar – up 35 percent since the start of the year. And there are shortages of many raw materials used in construction, causing costly delays to projects.

Staff costs are rising due to inflation and competition for workers. Gulf currencies, which are pegged to the US dollar, are weakening. The Indian rupee, the Euro and the British pound are all strengthening, making the GCC a less attractive place to work for citizens of countries that typically provide all the labour for the construction industry.

Money is also getting more expensive in the wake of the global credit crunch. Central banks across the Gulf have been cutting base rates in line with cuts at the US Federal Reserve, but these rates have not been passed on to businesses as banks shy away from making risky loans.

Selling bonds – effectively borrowing from the private sector and wealthy individuals – has become common to finance projects. But confidence is ebbing away and these bonds will need to offer higher and higher guaranteed rates of return to attract buyers. The money to developers is again more expensive.

But the bunker buster that could blow the foundations of the off plan market apart is consumer confidence. Until last month, investors were unconcerned about holding the ownership rights to a property that would be built in the future.

Supply was low, demand was high, and real estate prices looked like going up forever.

But now there are stories that properties will not be built. There are stories that developers would rather compensate people holding ownership rights, than build the properties that they have bought.

Damac Properties’ Palm Springs development was the first cancelled project to break into the open. The shockwaves were felt as far away as London, where investors threatened to sue the developer unless the properties they had paid for were built.

Palm Springs should have been completed by the end of last year, but Damac postponed construction of the homes, and finally cancelled it completely in March. They offered to buy back the ownership rights to the properties at a premium of 6 percent per annum for every year since investors bought it.

An investment of $1 million when the project was launched five years previously would only be bought back for $1.33 million – hardly the return that the rest of the Dubai property boom was delivering over that period.

Damac claimed the cancellation was due to planning changes imposed on it by Nakheel, the master developer of Palm Jebel Ali on which Palm Springs was due to sit. Nakheel denies responsibility.

It is possible that Damac has fallen into a negative equity trap where the revenue it raised from the sale off plan of the Palm Springs development is no longer sufficient to build the project at a profit.

Five years on from the launch of Palm Springs, it is cheaper to buy back the ownership rights at 33 percent more than they sold them for than to build the properties.

UAE daily Emirates Business on Tuesday unearthed two other developers that claim to be in a similar situation. Al Arefi Marina at Dubai Marina and the A1 Tower at Jumeirah Village South, have been put on hold or cancelled, according to the paper, although the developers responsible for the projects have not made the decision on whether to buy back ownership rights, or continue to build what might be loss-making towers.

If buy-backs become common, billions could be wiped off the value of ownership rights overnight. Owners would be faced with a terrifying choice: sell at a discount rate back to the developer – perhaps 30 percent below today’s values – or press for the development to be completed, which might bankrupt the developer leaving the owner with nothing.

The rising costs afflicting the construction and development industries show no signs of abating. The only release valve might be a sharp economic slowdown, which would be as likely to send weaker developers bust as spiralling inflation.

The risks therefore are growing, while the potential rewards are shrinking in buying property off plan. The attraction of prepayment is vanishing for buyers, while becoming ever more critical to the survival of sellers.

The days of multi-billion projects being sold off-plan within hours of their launch could be over. Expect buyers to show considerably more caution in the future.

Rob Corder is the Editorial Director of ITP Publishing Group.

 

The next case Areifi Tower Dubai Marina – Mystery surrounds luxury Dubai tower

original published http://www.dubainews.net/story/347851

Dubai News.Net
Saturday 12th April, 2008

Mystery surrounds the development of the Al Areifi Tower at Dubai Marina.

The 30-storey development of luxury residential apartments has been under a cloud for several weeks as reports have circulated that the construction has been stopped, abandoned, or delayed.

The developer, Khalid Saud Al-Areifi & Partner Co., of Riyadh Saudi Arabia, has reportedly been approaching investors who bought apartments off-the-plan, in a bid to buy the apartments back.

According to investors they are being told construction on the site has been stopped and will not resume.

Investors report receiving telephone calls and faxes from the company.

We have sighted a letter faxed to an investor from Khalid S. Al Areifi which states the project has been stopped, and the company ‘cannot complete the project.’

We spoke to the company who confirmed this, and recently a story was published to this effect.

It now transpires the company has not stopped construction at all. Several questions were emailed to the company to seek clarification, however they have gone unanswered.

On Saturday one of our journalists visited the site and found construction in full swing. The site has cranes and a stream of workers busily working on the building which has already been built to the nineteenth floor.

We contacted the builder, Buset Contracting on Saturday, who confirmed there has been no disruption to the construction. It is going ahead ‘full steam,’ he said. He confirmed the development had attained the 19th level, and there were eleven floors remaining. He said it would take another 15 to 16 months to complete.

The spokesman for the building company would not comment on reports the construction had been stopped, saying such questions should be directed to the developer.

Al Areifi, sold apartments in the complex off-the-plan around five years ago. In an unusual twist it discounted prices by 25% to sell the apartments on the basis of full payment being made upfront.

The prices of the apartments today outweighs those they were sold for, but this applies with almost all projects in Dubai.

Construction costs are increasing rapidly, however to date developers have been delivering pre-bought property without incident, although in most cases way behind schedule.

Al Areifi appears to be involved in trying to buy back apartments at their original cost, notwithstanding they have been holding full payment for several years. Falsely advising investors the project has been stopped, and will not be completed will likely incur the wrath of the authorities. Investors have long maintained several companies use misleading advertising and selling techniques in the high-pressure property industry in Dubai.

Another developer, the Dubai-based Damac Properties has been criticised in recent weeks for recently abandoning a project marketed five years ago.

The company said its Palm Springs residential resort on the Palm Jebel Ali was being cancelled because of changes on the site by the master developer, Nakheel.

Naheel, however, announced it had made no such changes and was unaware Damac was withdrawing from the development.

Angry investors, many from the UK, have disrupted Damac project launches, stormed their sales offices, and threatened a class legal action against the company. Worse still, Damac has suffered from the bad publicity, at a time when it is opening new international offices and launching major new projects.

Our advice from Damac is that it is currently reviewing its decision on the Palm Springs project.

Adding to the Al Areifi affair, and the Damac debacle, has been the extraordinary delays in the completion of property projects in Dubai, some spanning several years.

Both large and small developers are being caught up in the delays, as chronic labour, materials and resources shortgages have crippled completion schedules.

Comments: original Skyscrapercity

http://www.skyscrapercity.com/showthread.php?p=19611668

From DubaiInvestor

”

Calling Dubai Land Department, RERA, will not help. RERA do not enforce the property laws. Enforcement of Dubai’s property laws is done through the courts. RERA does not handle court cases. The head of RERA has said publicly that “people who have problems with developers should have read their contracts better or used legal help etc “. Calling or emailing RERA is a waste of time. Get as many fellow investors together and consult an attorney.”

From Hishamds

”

Getting investors from all over the world together is not as easy as it sounds,we are from different worlds,i suppose all we have to do is watching from distance in the mean time and make sure that the construction is continuing ,until it stops for real then we make our move. agree? “

Comment from Elb

”

The guy I talked to in Dubai Land was Mr. Emad Eldeen Farouq (Legal Consultant in Dubai Land) he is the one who told me to send a complaint and gave me all the info. his email is – farouq@dubailand.gov.ae -. Not sure though about the nationality of ISKAN

I think my next move is to visit the site in Dubai and consult/hire a lawyer (they are not cheap in UAE)

Thanks”

Dubai – Drohen erneut Millionenverluste für Immobilien Anleger – Investoren bangen um 70 Millionen Euro-Staatsanwaltschaft ermittelt

German Investors facing 70 Million Euro losses Dubai-1000-Hotel Investment Fund

original published:
DieWelt
http://www.welt.de/welt_print/article1886858/Statt_versprochener_Luxusherberge_nur_eine_Baugrube_im_Wstensand.html

10. April 2008, 04:00 Uhr

Von Richard Haimann

Dortmund – Den Anlegern seines Dubai-1000-Hotel-Immobilienfonds versprach Georg Recker hohe Renditen im Wüstenemirat. Jetzt ermittelt die Staatsanwaltschaft Dortmund gegen den Diplom-Finanzwirt aus Hamm wegen Betruges. “Wir gehen einem Anfangsverdacht nach”, sagt Oberstaatsanwältin Ina Holznagel. Nach Schätzungen von Fondsanalysten könnten bis zu 70 Mio. Euro Anlegerkapital im Feuer stehen.

Mit dem aufgelegten Fonds wollte Recker insgesamt 142 Mio. Euro bei Privatanlegern einsammeln und in ein noch zu errichtendes 1000-Zimmer-Hotel im Emirat investieren. “Den Anteilszeichnern hatte der Initiator Ausschüttungen von neun bis zwölf Prozent pro Jahr in Aussicht gestellt”, sagt der Anwalt Jens-Peter Gieschen der auf Kapitalanlagerecht spezialisierten Bremer Kanzlei KWAG, die mehrere betroffene Anleger vertritt. Ursprünglich sollte das Hotel bereits im vergangenen Jahr fertiggestellt sein. “Doch bislang existiert dort nur eine Baugrube”, berichtet Gieschen, der kürzlich selbst vor Ort war. Recker selbst war für eine Stellungnahme gestern nicht zu erreichen.

Dubai war in den vergangenen Jahren Schauplatz eines gigantischen Immobilienbooms. Einheimische Gesellschaften haben in den vergangenen Jahren gigantische Projekte in dem nur 3885 Quadratkilometer winzigen Staat aus dem Wüstenboden gestampft. Darunter künstliche Inseln in Form einer Palme und mehr als 150 Wolkenkratzer, darunter den 321 Meter hohen “Burj al Arab”, das erste Siebensternehotel der Welt. Mit den Mega-Vorhaben will Kronprinz Mohammed bin Rashid al-Maktoum Dubai zu einem Touristenmekka im Nahen Osten wandeln und damit für die Zeit vorsorgen, wenn die Ölquellen im Emirat versiegen.

full story http://www.welt.de/welt_print/article1886858/Statt_versprochener_Luxusherberge_nur_eine_Baugrube_im_Wstensand.html

Update – Damac Palm Springs Property Scandal Jebel Ali Palm

original published: April 7,2008

http://overseascafe.blogspot.com/2008/04/palm-springs-dubai-damac-cancel-project.html

No sooner was this posted than the problem seems to have been resolved, or at least there is some hope that it will be. The following has been received from the Investor’s group:

“This statement has come from RERA today,they are the Real Estate Regulatory Authority in the Emirates. Mounting media pressure and evidence against Damac have them under pressure to find a solution on their decision and we await good news!

Should this good news not develop The Palm Springs Investors group will proceed with legal action.

Senior Management from Damac have declared now that they will be in contact with a proposal no later than the 21st of April.

FURTHER UPDATE:

On mature reflection the Investors group have decided that this latest piece of news, which they’ve not received in writing, is merely a ruse by Damac to stop them protesting until after the launch of a new development by the company on April 13th. Hence, they state that their campaign of awareness raising will continue until they receive in writing confirmation that Damac are actually re-assessing their position on this matter.


xxx: Deutsche Version German Version

09.April 2008 Immobilien Dubai Millionen Verluste für Investoren von Damac Palm Springs Projekt – Nakheel Master Developer Jebel Ali Palm – Immobilienskandal – Wie sicher ist der Immobilienmarkt in Dubai ?

Not only The case Damac- Testing time for Dubai – The boom towns

Testing time for the boom towns
updateDate = “Tuesday, 08 April 2008 04:00″
document.getElementById(‘crumbs-dir’).innerHTML = ‘CONSTRUCTION & INDUSTRY / COMMENT /’
by Angela Giuffrida on Saturday, 05 April 2008
original published: http://www.arabianbusiness.com/515463-testing-time-for-the-boom-towns

Boom towns are havens in the way they offer an endless number of business opportunities, usually starting with a clean slate on which ideas can run wild.Emerging sectors of any particular industry operate in much the same way, attracting investment for a relatively short-term gain.The early stage of their rise tends to be described as a ‘boom’, with the ensuing phases spent speculating on when ‘the bubble will burst’.

Unfortunately, that bubble is prone to antagonisation by another trait of a rapidly growing and open market: greedy investors.This is not the first time a project in Dubai has provoked fury among those, mainly from the UK, looking for a place in the sun.In 2006, the owner of the Light House in Dubai Marina allegedly fled overnight, leaving the tower standing 15-storeys and 90 investors around US $3.7 billion out of pocket between them.The same fate descended on a residential project in Sharjah. Only this time the owner stuck around to face the wrath, and in a letter to investors admitted the company had failed to secure a building permit. This admission came two years after investors had placed their deposits. As with the Palm Springs saga, the compensation offered was little in comparison to the amount they were expecting to gain from their new homes.The backgrounds of project owners are often questioned whenever a debacle arises, with some rumoured to have baked cakes for a living before trying their luck at building something of more than three tiers.Many have sales offices scattered across several parts of the globe, without even having a completed project to show as part of their marketing remit. Another characteristic of a boom town is its sensitivity to pitfalls, where even the slightest upheaval can shatter confidence, leaving the reputation of an entire economy in tatters.It wouldn’t be so bad if developers admitted to overstretching themselves and failing to envisage that having so many projects on the go might just impact the resources needed to get them finished. Such a situation makes you wonder if the bigger fools are actually the ones living millions of miles away who buy off-plan

Not only The case Damac- Testing time for Dubai – The boom towns

Testing time for the boom towns
updateDate = “Tuesday, 08 April 2008 04:00″
document.getElementById(‘crumbs-dir’).innerHTML = ‘CONSTRUCTION & INDUSTRY / COMMENT /’
by Angela Giuffrida on Saturday, 05 April 2008
original published: http://www.arabianbusiness.com/515463-testing-time-for-the-boom-towns

Boom towns are havens in the way they offer an endless number of business opportunities, usually starting with a clean slate on which ideas can run wild.Emerging sectors of any particular industry operate in much the same way, attracting investment for a relatively short-term gain.The early stage of their rise tends to be described as a ‘boom’, with the ensuing phases spent speculating on when ‘the bubble will burst’.

Unfortunately, that bubble is prone to antagonisation by another trait of a rapidly growing and open market: greedy investors.This is not the first time a project in Dubai has provoked fury among those, mainly from the UK, looking for a place in the sun.In 2006, the owner of the Light House in Dubai Marina allegedly fled overnight, leaving the tower standing 15-storeys and 90 investors around US $3.7 billion out of pocket between them.The same fate descended on a residential project in Sharjah. Only this time the owner stuck around to face the wrath, and in a letter to investors admitted the company had failed to secure a building permit. This admission came two years after investors had placed their deposits. As with the Palm Springs saga, the compensation offered was little in comparison to the amount they were expecting to gain from their new homes.The backgrounds of project owners are often questioned whenever a debacle arises, with some rumoured to have baked cakes for a living before trying their luck at building something of more than three tiers.Many have sales offices scattered across several parts of the globe, without even having a completed project to show as part of their marketing remit. Another characteristic of a boom town is its sensitivity to pitfalls, where even the slightest upheaval can shatter confidence, leaving the reputation of an entire economy in tatters.It wouldn’t be so bad if developers admitted to overstretching themselves and failing to envisage that having so many projects on the go might just impact the resources needed to get them finished. Such a situation makes you wonder if the bigger fools are actually the ones living millions of miles away who buy off-plan

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

Porper Use of Force Majeure

Wikepedia

Force majeure, French for “greater force”, is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, strike, riot, crime, act of nature (e.g., flooding, earthquake, volcano), prevents one or both parties from fulfilling their obligations under the contract.

However, force majeure is not intended to excuse negligence or other malfeasance of a party, as where non-performance is caused by the usual and natural consequences of external forces (e.g., predicted rain stops an outdoor event), or where the intervening circumstances are specifically contemplated.

It is imperative that Dubai’s Real Estate Regulatory Authority make it mandatory for all contracts to include the clause “Any Party asserting Force Majeure as an excuse shall have the burden of proving that reasonable steps were taken (under the circumstances) to minimize delay or damages caused by foreseeable events, that all non-excused obligations were substantially fulfilled, and that the other Party was timely notified of the likelihood or actual occurrence which would justify such an assertion, so that other prudent precautions could be contemplated.“

Investors step up campain to expose DAMAC

original published 23.March 2008 http://damaconcovered.wordpress.com/category/nakheel/

Just one example of media being contacted:

Thank you for your letter to the Guardian. Unless you have indicated otherwise, it will be considered for publication – as long as you have included the following details a full name and full postal address (including street, town and county) and a daytime contact telephone number.

It is also helpful to include a reference (headline, section, publication date) to the article to which your letter refers. Letters are usually published with only a village, town or city as the address (or an organisation where relevant). The other contact details are forverification only. If your email did not include them, please resend the full text of your letter with these details to letters@guardian.co.uk.

Whether or not we publish your letter, it will be read and forwarded, whereappropriate, to the relevant journalist or section editor. Please note that letters may be edited.

Regards
Letters editor
The Guardian

So keep watching this space!

Extract of cancelled Towers in Dubai

• The Pinnacle 120 cancelled (1)

• Park Square Tower 666.0 m 150 cancelled

• Unnamed Residential Tower 430.0 m 111 cancelled (1)

• Badriya Tower 415.0 m 96 cancelled (1)

• Cancelled Mixed Use Tower 390.1 m 77 cancelled

• United Tower 350.0 m 84 cancelled (1)

• Emirates Hotel 350.0 m 70 cancelled

• Najd Tower 340.0 m 82 cancelled (1)

• Four Seasons Dubai Festival City 320.0 m 72 cancelled

• Marina Gardens 310.1 m 75 cancelled (1)

• Al Durrah Tower II 300.0 m 78 cancelled

• Dubai World Trade Tower 2 300.0 m 60 cancelled

• Dubai World Trade Tower 1 300.0 m 60 cancelled

• The Hexagon 290.0 m 62 cancelled (1)

• Promontory Tower 55 cancelled

• The Tower 65 cancelled

• Dubai Chamber of Commerce Tower 1 50 cancelled

• Beach Towers 235.0 m 45 cancelled

• Marina Tower 205.0 m 51 cancelled (1)

• Al Ghurair Lake Office Tower 200.0 m 44 cancelled

Name Height Floors Status Year Drawings

• Damac Head Quarters 180.0 m 40 cancelled

• Al Ghaith Tower 165.0 m 44 cancelled

• Pacific Tower 160.0 m 40 cancelled

• Mercure Grand Hotel Tower 160.0 m 35 cancelled (1)

• The Monaco Tower 150.0 m 40 cancelled

• The Etoile Tower 150.0 m 40 cancelled

• Nakheel Flamingo Tower 150.0 m 40 cancelled

• Nakheel Falcon Tower 150.0 m 40 cancelled

• Manchester Plaza Tower 145.0 m 38 cancelled

• Al Ghurair Lake Residential Tower 135.0 m 35 cancelled

• Arshia Marina 134.0 m 35 cancelled

• Arabian Heights 95.0 m 15 cancelled

Beware of scam in the real estate market

original www.7days.ae http://www.7days.ae/showstory.php?id=69614
Last Updated : Wednesday 26 Mar, 2008 – 2 comments

Are you aware about the latest news in the real estate market? A landlord pays a real estate agent to follow the renewal of all the contracts with the tenants. Included in the package offered, there is also the service to CONVINCE the tenant to accept increases in the rent much above the 5 per cent!!

Oh yes, selling you the idea that they are experts in the rent market, the real estate agent convinces you to accept an increase well above the 5 per cent fixed by law as a limit. They also mislead you, by telling the tenants the story that even if you go to the Rent Committee, the Committee itself will adjust the rent up to the market price and therefore increasing the rent for more than 5 per cent, which is absolute false!!!!!!

Not only: if you are unable to accept a 30 or 50 per cent increase, they highly reccommend you to move out and vacate the home and in a very polite way reccommend you another flat or area or home where to move!!! Really a great service offered, congratulations!

And this behaviour is coming from one of the most reputable company as far as the rent market is concerned! Unscrupulous and greedy without ethic: no other way to comment these lies to tenants and these cheaters!
Disappointed tenant
Dubai