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

original source The National

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

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

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

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

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

original source The National

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

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

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

Nakheel Dubai – Discovery Garden residents take their row to Dubai Rulers Court

source Arabian Business

Angry residents of Dubai’s Discovery Gardens are set to take their row to the Ruler’s Court this week in a bid to force developer Nakheel into slashing “exorbitant” service charge fees.

More than 90 tenants and homeowners have signed a petition, set to be presented to the Ruler’s Court and Dubai’s Real Estate Regulatory Authority (RERA) later this week, which asks the government to force Nakheel back to the negotiating table to review the charges, which cover building maintenance, community and cooling fees.

Residents are due to pay the first installment of next year’s fees on October 1.

“We want the government to freeze our payments to Nakheel and to force Nakheel to justify its charges in light of the substantial drop in costs we’ve seen since last year,” said Michael Aldendorff, the head of an unofficial resident’s association.

Nakheel Dubai Government controlled developer presses buyers for cash

source The National    20. August 2009

Nakheel is asking investors using credit transfers for property purchases to top up their payments with cash, as it seeks to raise funds ahead of a mid-December due date for a Dh3.5 billion (US$953 million) bond.

According to brokers, the Dubai Government-controlled developer allows investors in delayed projects to sell their downpayments to other investors who have already invested in other Nakheel developments.

But now the company is no longer allowing customers to use credit transfers alone to fund instalments, and is demanding that part of the payments are made in cash, brokers say.

“For example, when a buyer has Dh1m to pay, Nakheel would say you need to pay 30 per cent in cash, which makes Dh300,000,” said one broker, Farid Ahmad Hussein.

“They will accept a credit transfer of Dh700,000 from somebody else. The investor can get this Dh700,000 maybe at 40 per cent discount now in the market from another investor. In total he has saved Dh280,000.”

Nakheel needs to pay back a Dh3.5bn bond on December 14, in what is being seen by international lenders and rating agencies as a litmus test of the Dubai Government’s willingness to support its affiliated companies facing financial difficulties.

So called “credit consolidations” were triggered by the collapse in property prices last autumn, which saw scores of developments either cancelled or delayed and effectively ended the “off-plan” property market.

Investors in stalled projects have been able to sell their downpayments, usually at a loss, to other customers of the same developer, and then those downpayments can be used on continuing projects. These credits can only be transferred between buyers that have already made downpayments and are not available on the secondary market.

Developers facilitate the transfer of credit between investors in different projects to generate funds needed to complete some developments, while also making it easier for them to abandon others. External brokers help to match buyers.

Unlike other developers, Nakheel requires the transfer of ownership between investors to be completed before credit is moved between properties.

“Investors in projects that have been deferred have the option of consolidation if they own other properties within the Nakheel portfolio. The advantage to the investor is that Nakheel is able to hand over property to the owner sooner than it might on a deferred project and help investors reduce their financial exposure,” Nakheel said in a statement. The developer declined to comment on whether cash payments were also required to complete property consolidations.

Nakheel has shortened the time it takes to complete such transactions to about a month, from three or four months previously, according to brokers.

Nakheel, the developer of The Palm Dubai, has spent billions of dirhams on projects that are still under construction, while adding further offshore island developments including The World and The Universe.

But development on such a massive scale has come at a high price for the company, which is now struggling to repay debts accumulated during the six-year building boom.

The trade in credit notes on stalled projects is helping revive activity in the property sector, according to Rajesh Sony, a director of Bluechip Real Estate. The firm, he said, generates 90 per cent of its turnover from matching buyers and sellers of credits.

“This is a win-win situation between the developer and investors. If all the investors of one project transfer the money elsewhere, the developer may call off the project without having to refund the money to investors. At the same time, investors can get out of the market without losing all the money, and other investors in ongoing projects can pay their instalments at a cheaper rate,” he said.

The exchange of Nakheel credit, or consolidations, began in February on projects that include the Dh4.4bn Dubai Promenade, and the Dh2.9bn Trump Tower, the centrepiece of Dubai’s original Palm Island development, according to Mohammad Mujtaba Vakil, a broker from Linkage Real Estate.

He said that while cash components were not requested on earlier transfers, Nakheel now “would not accept anything less than 30 per cent”.

Daubi, Nakheel Dubai, Real Estate News Dubai

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

Nakheel mulls $15bn IPO move – reports – Real Estate – ArabianBusiness.com

Nakheel mulls $15bn IPO move – reports – Real Estate – ArabianBusiness.com

Palm developer Nakheel is reportedly considering plans for an initial public offering (IPO) to raise up to $15 billion.
A report on Monday by newswire Bloomberg quoted unnamed bankers that the developer, the UAE’s biggest developer by project value with nearly $80 billion worth of schemes in the pipeline, is also looking for IPO managers.

A Nakheel spokesperson neither confirmed nor denied the move, and was quoted by UAE daily Gulf News on Tuesday as saying: “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.”

read more
http://www.arabianbusiness.com/540083-nakheel-mulls-15bn-ipo-move—reports

Nakheel cuts staff, delays projects – The National Newspaper

Nakheel cuts staff, delays projects – The National Newspaper

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

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

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

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

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

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

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

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

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

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

Builders struggle to get payments – The National Newspaper

Builders struggle to get payments – The National Newspaper

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

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

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

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

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

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

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

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

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

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

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

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

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

Trump Tower suspended, says Australian contractor – The National Newspaper

Trump Tower suspended, says Australian contractor – The National Newspaper

The proposed Trump Tower on the Palm Jumeirah, a Dh2.9 billion (US$800m) project announced earlier this year, has been suspended, says the Australian construction firm contracted to build it, according to The Australian newspaper.

Citing “easing market conditions,” the Australia-listed Leighton Holdings said today the project was on hold, and that Nakheel, the developer, had agreed to cover all costs incurred to date, paper said.

The tower was to be a centerpiece of the Palm Jumeirah project.

In June a buyer offered $3,000 per square foot, or close to $30m for a penthouse in the development, more than twice the going rate of Dubai’s next most expensive properties.

This follows last week’s announcement by Trump Entertainment Resorts that it would miss a $53.1m bond interest payment due on Dec 1, in an effort to “maintain sufficient liquidity.”

Trump Entertainment, chaired by property magnate Donald Trump, was created out of a bankruptcy restructuring in 2005.At the same time Deutsche Bank said it would sue Mr Trump over the developer’s troubled Chicago condominium and hotel project, according to the Wall Street journal.The bank says Mr Trump personally owes $40 million after defaulting on a $640 million construction loan for Trump International Hotel & Tower under construction in the windy city.
*With agencies

Construction on Palm Jebel Ali to slow – The National Newspaper

Construction on Palm Jebel Ali to slow – The National Newspaper

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

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

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

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

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

Construction on Palm Jebel Ali to slow – The National Newspaper

Construction on Palm Jebel Ali to slow – The National Newspaper

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

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

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

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

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

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.

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.

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Dubai Property Price Index

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

Demand for waterfront properties

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

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

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

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

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

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

The Dubai average price index

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

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

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

Dubai Property Price Index

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

Demand for waterfront properties

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

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

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

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

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

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

The Dubai average price index

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

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

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

Peter Riddoch, CEO Damac Properties, Pt 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

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.”

Dubai – Buying Property in the first Market “It was a fiasco,” said one frustrated buyer :“They create all this hype, and then we

original published:
http://www.thenational.ae/article/20080526/BUSINESS/753783571/1051/rss
Bradley Hope and Kelly Niknejad

Last Updated: May 26. 2008 9:30PM UAE / May 26. 2008 5:30PM GMT

DUBAI
Nakheel Sales Office

Hundreds of potential buyers, some of whom had specially flown into the country, were turned away by Nakheel yesterday after the waterfront property they were after sold out.

Overwhelming interest in Nakheel’s Badrah waterfront developments led to the cancellation of about 400 appointments with potential buyers.Badrah is a district with 45,000 homes, and Nakheel sold about 1,000 apartments on Sunday, the first day of a planned two-day sale, an official said. Another 60 apartments left over from Sunday were released to some customers yesterday, but the remaining hundreds of potential buyers missed out.

Observers have said in recent weeks that the speculative market for property in the UAE was becoming increasingly frantic. A large group of buyers at Aldar’s booth at Cityscape Abu Dhabi earlier this month had to be restrained by security guards, and there were reports last week of people waiting in line for more than 14 hours to buy at Emaar’s Bawadi project.The project was the third where Nakheel used an appointment-only system for sales to reduce the long queues that had accompanied project launches in recent months.

“It’s very difficult to estimate how many people will show up,” said Charlie Taylor, a communications manager for Nakheel. “More people turned up than our estimate, so we had to cancel most of the appointments for the second day.”

One buyer, who gave her name only as Sophia, said she had flown in from Russia for her appointment. Upon arriving at 9:30am, her scheduled time, she was told that her appointment had been cancelled. “It’s very unprofessional,” she said.

Several other buyers also said they had only found out about the cancellation upon arriving at the time of their appointment. “I was very surprised and very shocked to know that when I came here that they would not allow me in,” said one. Another buyer, Salah al Tamimi, the director of Intermaritime Financial, said that of seven appointments made by family members and friends, three were cancelled. “Some of my family were very upset,” he said. “But they cannot accommodate everyone. We bought some property, which makes me happy.”

Nakheel said that it sent out the cancellation notifications on Sunday evening by text message and email. The company would give the people with cancelled appointments priority at the next phase of sales for Badrah in the next two months, Mr Taylor said.

At the May 20 launch of Emaar’s Bawadi project, would-be buyers started lining up at 8:30pm the night before, people in the queue said. Many of them slept on the ground to hold their place.

The next day, only about 120 people were able to get into the sales office to buy apartments. The rest were told they would have priority at the next phase of sales.

“It was a fiasco,” said one frustrated buyer who missed out on an apartment after spending the night in line. “They create all this hype, and then we can’t get in.”

bhope@thenational.ae
kniknejad@thenational.ae

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

 

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

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

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

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

Complaint to RERA Dubai – The untouchable Developer in Dubai – Nakheel – DMCC – Al Fajer Properties Plot H3 JLT Dubai

You believe to be on the secure side buying property from hight reputated Developer in Dubai, you believe RERA will help you if you have problems with your developer?

DO NOT MAKE THE MISTAKE LIKE US

Marwan Bin Galita, chief executive of Dubai’s Real Estate Regulatory Authority (Rera), said : “Miscommunication and lack of transparency are the major concerns among real estate investors in Dubai!

He added: What is abnormal is to ask a question and never get an answer. This is what annoys investors.

In 2005 we bought an apartment directly from Nakheel. The Tower was named Falcon Tower located on Plot H3 , Jumeirah Lake Towers.

It was promised us by Nakheel to give us the contract 14 days after paying the deposit. We paid the deposit, we didn´t get the contract. We paid the further installemts until June 2006 ( 45 % of total 775.00 Dhs). We wrote letters to Nakheel, no response no contract until June 2006.
August 2006 we and all other investors of this Tower H3 Jumeirah Lake Towers got a letter from DMCC ( 100 % government) that Nakheel has cancel Falcon Tower in it`s current form.
This letter all invetsors get original here:

http://www.skyscrapercity.com/showthread.php?p=24332666

We ask Nakheel for the reason , we got the answer::It was just a decission of Nakheel Mangement.

DMCC told and confirmed us in November 2006, that they found a new developer for Falcon Tower Plot H3 Jumeirah Lake Towers.
This developer will built the Tower in the current form under the same condition we once agreed with Nakheel,100 % Residential , nothing will change, only the completion will be 6 month later in December 2008.

So we agreed to be tranfered,under the same conditions agreed with Nakheel to get our apartment in a 100 % residetial tower with no changes in the condition and options agreed with Nakheel. DMCC wrote that the contract will be given upon this agreement by the new developer.

The new developer was Al Fajer Properties ( ownded by Hasher Al Maktoum).

Since November 2006 Al Fajer Properties gave us the illusion everything is going smooth.

We ask again and again for the contract, meanwhile with our lawyer.

We wrote endless letters since that time to Al Fajer Properties.

In November 2007 we ask for a meeting together with our lawyer.

Here the CEO AFP, Dr. Shahram Zadeh told us, it will be better for to give up, because Al Fajer will now built only a commercial tower on Plot H3.
Falcon Tower Plot H3 will now be named Jumeirah Business Centre 8.

The general message given by CEO AFP Dr. Shahram Zadeh was:
Give up, this will be the best for you. He offered a compensation of 80.000 Dhs,that´s it, he said, what we consider is a bad joke.

If we wish to proceed, he will give the tower only 1 or 2 floor residential,the rest will be offices.
He called this 99% commercial and 1 % residential construct a MixedUse Building. with the advice that this will be the worst situation we can have, to live in a building which is going 99 % commercial.

For this option he gave us a draft of a contract,without any drawings of the unit and building, without any specifications.

The contract was to this peppered with unfair conditions, a contract which was absolute not signable.

Januar 2008 Al Fajer Properties pushed us to sign this unsignable contract by saying:

Deadline to decide 1 week and if you don`t agree we Al Fajer Properties will chancel every right and refund only the paid monies ,without any compensation.

We didn`t agree to this, we didn`t sign this unsignable document and the case was given from us to RERA March, 5th. 2008.

After our complaint reached RERA Dubai Al Fajer Properties started on March 10th, 2008 to write us absolute aggressive letters from Denton Wilde Sapte, lawyers of Al Fajer Properties.

Our lawyer answered them and told Al Fajer Properties that the dispute is laying in the hands of RERA.

Al Fajer Properties ignored this statement and advice.

Their answer was, simply sending a cheque with the sum of refund ( total the 45 % installemnet we already paid) via courier to our lawyer.
This cheque was not taken and accepted from our lawyer and returned to Al Fajer Properties.

After they got the cheque back, that take this as reason to write a letter to not accept our lawyer longer.

Since that time we didn`t hear again from Al Fajer Properties.

Instead of staying to 100 % agreement we have with DMCC, Al Fajer Properties tried to kick us out with illegal methodes. They breached the given word to us and to DMCC.

Our unit today, if residential as once agreed, is worth 2 Mio. AED.
We are from Europe and at the time we bought and paid our 45 % an had convert Euro in AED,the currency convertion at this time for the named 45 % ( of total 775.000) was 74.000 Euro.

The offered refund of Al Fajer Properties is 345.000 Dhs our payment we already paid to Nakheel ( 45 % of 775.000 ), which is today 60.000 Euro.

3 years without interest, 14.000 Euro currency loss, no apartment plus additional cost for our lawyer etc.

Al Fajer Properties is causing us by breaching the agreement a damage of around over 1 Million AED.

Each point of the statement in this report can be witness by original documents

*) all documents are seen by dubai7stars and available via the author of this story

If you wish any further information about the actual status of this case, please do not hesitate to contact us via the comment. If you wish that the comment should not be publish, please give a short advice in your message

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

Damac Palm Spring Scandal – Investors are still uniformed about Details

May, 12. 2008

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

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

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

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

Damac have finally sent written confirmation of the re-instatement of Palm Springs to investors. Whilst the Palm Springs Group is pleased with this development, the communication merely rubber stamps what has already been issued to the press.

The main concern now for investors is that Damac confirm in writing details of the project, such as the plan specification, build quality, start and handover dates, and whether it is in keeping with the original contract.

April 14, 2008
One investor commented, “we will be writing to Nakheel and Damac requesting them to disclose the new plot handover date and details of any planned changes as a matter of urgency” She went on to say that the Group intend to monitor developments to ensure that any changes are compliant with the contract provisions. It is possible that investors may request a meeting with Damac to get clarification of the details and to iron out any concerns.

Barring any nasty surprises contained in the ‘detail’ of the re-location of Palm Springs, it would seem that both investors and Damac will soon be able put their differences behind them and look forward to the dream that was, and hopefully is, Palm Springs. Let’s hope Nakheels’s and RERA’s role in helping to resolve the crisis serves to strengthen the reputation of Dubai real estate.

Dubai property market beset by fraud claims

Malaysia Sun

Claims of scams, fraud, and embezzlement are hitting the real estate market in Dubai.

The multi-billion dollar construction craze which has attracted investors from all over the world, has seemingly brought in unsavoury types who have been preying on the never-ending appetites of locals and foreigners lining up to invest in the market.A UK company which claimed to have acquired a 900-apartment plot in the proposed Jumeriah Village project, has reportedly sold off apartments in the plot, with no prospect of them ever being built.
The company, Strategic Property Investment, and its associates, William Cowe and Mark Emlick, are being investigated by Dubai and UK authorities.

Dubai authorities are also investigating the mysterious Al Areifi Tower being constructed at Dubai Marina. As we reported several weeks ago, Khalid Saud Al-Areifi & Partner Co., of Riyadh Saudi Arabia, sold several hundred apartments in the project off-the-plan some years ago, taking full payment upfront.In recent weeks the owners of the apartments have been receiving telephone calls and faxes from Al Areifi representatives in Saudi Arabia advising them construction on the project had stopped and would not be resumed.

Investors say they have been offered their original cost, plus interest, back. We have sighted one of the letters sent which verifies the investors’ claims.When we visited the site two weeks ago we found construction in full swing. We contacted the builder on site who confirmed there had been no disruption to the construction and it was proceeding at ‘full steam.’Reports are now circulating that Al Areifi sold the site to the newly-formed, Abu Dhabi-based, Eskan Properties.

A report in Gulf News , however quotes a company spokesman as saying, ‘We sold the tower on again a week back.’
Having bought their apartments and paid for them in full, well before construction started, investors are now wondering how ‘their’ apartments could be on-sold, on two separate occasions since.

Several calls to Emaar Properties, the master developer of Dubai Marina, where the project is sited, have not been returned.

Meantime the investigation into the conduct of the former CEO of Dubai’s second largest property developer, Deyaar, has been widened.
According to Dubai’s Attorney General, Essam al-Humaidan, a second person, Ganesan Krishna Kumar, 49, has been arrested in connection with the investigation. Kumar, originally from India, was a co-founder, and is managing director, of the Dubai-based advertizing agency, Masterbrand (ME) Ltd.,Two other men have also been detained and questioned, but have since been released. Zack Shahin, Deyaar’s ex-CEO is being probed in relation to claims of possible embezzlement. Deyaar has more than 1,600 apartments, as well as retail, and office complexes, under construction in Dubai.

The glitz and glamour of Dubai’s red-hot property market must be feeling the heat of the latest troubles, coming on top of the debacle surrounding the Damac project on the Palm Jebel Ali.
Damac, which claims to be the largest private property developer in the Middle East, sold apartments off-the-plan in what it called the Palm Springs project, a luxury apartments and resort project on the Palm at Jebel Ali.

Four years after launching the project, Damac wrote to investors saying it had been abandoned as the master developer of the Palm had changed the plans and the project could not now fit the site.Within days the master developer, Nakheel, announced it was unaware of Damac’s claims, and that the changes which Damac referred to had been made ten months earlier, and Damac was happy with them.

A hastily convened meeting by the authorities, involving Damac and Nakheel, resolved the matter, with Damac agreeing to proceed with the project. That action averted a class-action lawsuit against Damac by at least sixty angry investors, most of whom were from the UK

Comments

Comments on this story

By adel, 04-26-08, 02:31 AM
An advice on Duabai real estate marketI want to give a little advice to prospective investors in Dubai. Ignore those fantastic property offerings, with incredibly low prices and very long-term and low-cost finance. Believe me guys, the price of cunstruction material and labour, rents, oil…etc have made such projects unviable. Such projects are not economically viable anymore and the little investor will, at the end, lose his or her investment. Watch out !

By Anonymous, 04-24-08, 10:03 PM

Dubai property market beset by fraud claimsI have an apartment in this project which I bought off the plan and paid for in full. As far as I am concerned I am the owner and here I read my apartment has been sold to somebody else, twice! What is going on here? And what about the mighty Emaar. They are overall responsible. Surely they can’t sell these plots off to fraudsters like this and not even answer the phone???? Investors like me just sit out here and get these scraps of information from the news media (thanks! I’m not having a go at you, without you I wouldn’t even know I was being pick-pocketed). Where are the authorities? They shouldn’t just be investigating Deyaar they should be investigating Al Areifi.

By Anonymous, 04-25-08, 05:07 PM

Dubai should act against scamsWhere there is a lot of money the smarties arrive to scam the punters. This al areifi crowd have really done a number on people. The Dubai government shouldn’t stand back and let them get away with it. Selling all the apartments to individuals and then selling the whole building to somebody else is just straight forward theft and fraud. The Saudi Arabian authorities should act as well because this is a Saudi company. What confidence can people have in these gulf markets when this sort of nonsense goes on?

By Anonymous, 04-25-08, 08:09 PM

Few bad apples doesn’t mean you throw out the whole caseYes there are scams and frauds in Dubai, just as there are everywhere. Mostly though I think investment in theis place is safe. The government needs to stamp out the bad guys because it affects how people perceive the market.

By Anonymous, 04-28-08, 01:50 PM

These thugs have to be stopped. Whilst these guys are living the lavish lifestyle, we are repaying our loans to pay for them to do so. I am still pursuing these people and find it a huge disappointment that UAE have no laws against this or protection for people who invest from abroad. It was particualrly enlightening that these guys are residing at one of the sheikhs hotels.. Does that mean he thinks all of this is ok?????

RERA – Dubai master developer Nakheel will take legal action against any sub developer that fails to deliver

original published
http://www.arabianbusiness.com/518551-nakheel-to-take-legal-action-over-late-projects?ln=en

Dubai master developer Nakheel will take legal action against any sub developer that fails to deliver projects on time, the company’s CEO told ArabianBusiness.com on Tuesday.

Speaking at the Arabian Travel Market (ATM) in Dubai, Chris O’Donnell said Nakheel has introduced a clause into all its sales contracts to stamp out late delivery of projects.

“Nakheel sales contracts will now include definite timeframes on the development of the land we sell, if projects aren’t commenced within that certain time frame, we take action against that developer. That’s something we have been focused on that for the last 18 months,” he said in an interview.

O’Donnell’s remarks follow news that Dubai’s real estate watchdog is investigating four developers for what appears to be the non-delivery of projects.

RELATED: Four developers under investigation

Real Estate Regulatory Agency (Rera) CEO Marwan bin Ghalita said on Monday the firms were being subjected to an “internal audit of transactions”, stating that “we cannot let people promise and not deliver in Dubai”.

He did not reveal which companies were being investigated.

O’Donnell said praised Rera’s efforts and encouraged the watchdog to ramp up its probe to sure up investor confidence in the market, which has been shaken in the last few months with the Damac Properties saga and ongoing investigation of Deyaar’s former CEO.

RELATED: Deyaar CEO detained, faces investigation

“I think that’s great, I think they [Rera] should investigate more. It’s very important international and local investors have confidence there is a local government body with teeth and who will take action,” he said.

“It’s important for them [Rera] to take action, and been seen to take action.”

Nakheel was involved in resolving the depute between Damac and investors after the developer in April cancelled its Palm Springs project on the Palm Jebel Ali five years after launch. Infuriated investors were threatening legal action until Damac reversed its decision.

RELATED: Damac will continue Palm Springs project, says chairman

“We were involved with the Damac resolution, it was an unfortunate turn of events but I think it was a right outcome. The customers are getting what promised, Rera intervened and that’s very positive,” O’Donnell said.

O’Donnell said he was not worried there were more Dubai non-delivery scenarios in the future because the government had proved it would take a stand against such action.

“I think it’s sent a very strong message to anyone who is thinking of taking that path, don’t do it because you won’t get away with it.”

O’Donnell would not be drawn on the height of its ‘Tall Tower’ project, which could eclipse Emaar Properties’ Burj Dubai.

A source at Australian architects Woods Bagot told ArabianBusiness.com last month the project, also known as Al Burj, would be 1,200 metres high and located on the Arabian Canal, a $61 billion project being developed by Limitless.

Comments:

buyers should have the opportunity to take action over any projects delays
Posted by hella.g, dubai, uae on 7 May 2008 at 12:52 UAE time

agree!!!!
we should have the opportunity to take also action against any developer who did not deliver any project on time
I have bought an apartment in Dubai Sport city, and I have just been advised that it has been delayed to MID 2009 instead october 2008
such a shame

Nakheel to take legal action
Posted by Wilhelm Niederhauser, Sharjah, UAE on 7 May 2008 at 10:18 UAE time

It seems that Nakheel looks only at delays of sub developers. How about cleaning up their own doorstep ? I am a buyer of an apartment in International City – France. Nakheel delayed the hand over by 14 months ? Would they take legal action against themselves ?

RERA Dubai – Four Dubai Developers under investigation

Four Dubai development companies are being subjected to an “internal audit of transactions”, Marwan bin Ghalita, the CEO of Real Estate Regulatory Agency (Rera) told a Dubai Property Group meeting on Sunday.

“We cannot let people promise and not deliver in Dubai,” he said.

“We want a transparent relationship between parties and have rules and regulations that will be strictly implemented.”

He declined to name the four Dubai developers under investigation.

Last month Damac Properties was involved in a controversy over an attempt to cancel its project Palm Springs on The Palm, Jebel Ali, which has since been reinstated.

Rera has a tough job regulating Dubai realty since its creation last July. Now 2,909 real estate agencies are registered and an estimated 4,000 more illegals in the marketplace have until the end of July to register or face fines.

“From November 1 only licenced agents can advertise property by law,” said Bin Ghalita. “We will not tolerate freelance agents.”

Rera has also licensed 710 development companies, 1,560 projects and 1,487 brokers since its formation, and opened 476 trust accounts worth more than $1.2 billion (Dh4.4bn) with 33 registered banks. “We also want to correct some misleading claims made by developers,” said Bin Ghalita.

“If developers say they sold out in half an hour, how is that possible? If this is advertised they must show data, and not keep us waiting for a month for it.”

In addition, Bin Ghalita said there must be no payment of percentage transfer fees to developers, who are only entitled to claim administration fees for handling such transactions. “Why should developers benefit like this?

It is not their business, we do the transfers.

“He said buyers and sellers should “refuse to pay extra transfer fees”. Bin Ghalita said the proper registration fee is a total of two per cent: one per cent for the buyer and one per cent for the seller.

“Nobody has the right to charge anything else, and please tell me if they do,” he added.

Wall Street Journal – Scandals in Dubai Cast a Cloud

original published Wall Street Journal http://online.wsj.com/article/SB120941603017750659.html
and
http://www.zawya.com/story.cfm/sidDN20080428017680/lok233629080428?weeklynewsletter&zawyaemailmarketing

Some Problem Deals In Real Estate May Dent Trust
By MARGARET COKERApril 29, 2008; Page C2

DUBAI, United Arab Emirates — This city-state’s real-estate market is booming. Massive building projects scrape the sky. Sales and rental prices appear buoyant as investments flow in from other oil-rich Persian Gulf states, the former Soviet Union, India and Iran.

But a series of legal tussles and property-related scandals could dent foreign-investor confidence and tarnish the business-friendly reputation the government has tried so hard to burnish.
Earlier this month, the chief executive of one of Dubai’s largest publicly traded developers was jailed. And two disputes involving European and U.S. investors have raised concerns about Dubai’s regulatory and legal safeguards.
Foreigner-Friendly

The U.A.E., a collection of seven, semiautonomous emirates, was the first of the Arab Gulf states to allow foreign-property ownership. The country, a major oil producer, remains at the center of the Gulf region’s construction surge. More than a third of the estimated $1.2 trillion in projects under way in the region are in the oil-rich U.A.E., according to a report by the London-based Middle East Economic Digest, which tracks building projects.

While Dubai lacks the big oil reserves of its neighbor Abu Dhabi, it has diversified away from petroleum, building a reputation as a hub for tourism, business and transportation. Crucial to that strategy are its development projects.
Dubai has regaled tourists and investors alike with megaprojects such as the construction of Burj Dubai, the world’s tallest building, and the planned Palm developments, three separate man-made island clusters in the shape of palm trees.

“The perception of Dubai is based on the Burj, the Palm trilogy and sunshine 365 days a year. So far, you could call it a successful marketing campaign,” said Martin Kohlhase, a senior analyst in Dubai for Moody’s Investors Service, the credit-rating company. “There is so much at stake.”
Marwan bin Ghalita, chief executive of Dubai’s Real Estate Regulatory Agency, said he has worked hard over the past few months to improve rule making and enforcement among Dubai’s 742 licensed developers. “We are doing a very good job, but there are still lots of things to do to achieve awareness about the rules and procedures here,” said Mr. bin Ghalita.

Deyaar Development PJSC said earlier this month that its former chief executive, Zack Shahin, had left the company and was being held by Dubai police. The company, listed on the local stock exchange, disclosed the moves after the Zawya Dow Jones wire service reported the arrest.
Mr. Shahin, a U.S. citizen, is being held as part of an investigation into alleged financial wrongdoing at the company. In a jail-house interview, he told the wire service he was innocent.

Mystery has shrouded the case, raising concerns about the extent of its repercussions on the company, one of Dubai’s biggest developers. A Deyaar spokeswoman declined to comment.
Another project — on the Palm Jebel Ali archipelago, one of the three clusters — also recently became a battleground between a Dubai developer and disgruntled investors.
In 2003, Damac Properties, one of Dubai’s largest private developers, sold apartments in a 25-story building, known as Palm Springs. The company targeted British investors, eager to snap up retirement or rental properties.

Last month, Damac sent letters to those investors, saying the project had been canceled, giving few details. When investors pressed, they were told Palm Jebel Ali’s government-controlled master developer, Nakheel PJSC, hadn’t given Damac suitable land on which to build.
‘Out of the Blue’

Damac promised to return investors’ money, plus 6% interest, or give discounts on another Damac property. The Palm Springs apartments were sold for about $220 a square foot, according to investors. Current market prices in the same area are as much as $890 a square foot.
“It came out of the blue,” said Colin Murray, who lives southwest of London and bought two Palm Springs apartments.

Mr. Murray helped band together 80 investors in the United Kingdom. They filed a formal complaint with Dubai’s Real Estate Regulatory Agency. Nakheel denied it had caused the project cancellation, and regulatory officials launched talks between Nakheel and Damac. Damac then told investors that the project was back on.

The agency’s Mr. bin Ghalita said Dubai law gives Damac six months to start construction. He said he “would be keeping my eye” on the situation.

The controversy over Palm Springs was just the most prominent in a series of property-investor complaints. The local English-language press has reported stories of middle-class families being bilked by unlicensed brokers or unscrupulous developers who have taken large deposits and failed to deliver. And then there are delays in finishing construction. Damac has completed only 18% of its $30 billion real-estate portfolio.
Financiers in Tussle

It isn’t only small investors getting ensnared. U.S. private-equity firm Capital Partners, a real-estate-development arm of McKinley Reserve, of Wisconsin, is in a $1 billion legal dispute with Tecom Investments, a subsidiary of Dubai Holding, which is owned by Dubai’s ruler, Sheik Mohammed bin Rashid Al Maktoum.

In 2005, Capital Partners and Tecom signed a contract allowing the Americans to develop a 15-hectare site called Riverwalk. Months later, however, the deal had turned sour. Capital Partners accused Tecom of selling it land that it didn’t own, specifically, almost a hectare that was a designated archaeological site.

With $10 million already sunk into the project, Capital Partners refused to make a scheduled second payment to Tecom until the ownership issues had been worked out. Tecom said that missed payment was grounds to terminate the contract. The case is before the Dubai International Arbitration Center, an independent tribunal.

Damac Palm Springs Investors still await for the Detail

original published
http://damaconcovered.wordpress.com/

April, 24. 2007

Damac have finally sent written confirmation of the re-instatement of Palm Springs to investors.

Whilst the Palm Springs Group is pleased with this development, the communication merely rubber stamps what has already been issued to the press.

The main concern now for investors is that Damac confirm in writing details of the project, such as the plan specification, build quality, start and handover dates, and whether it is in keeping with the original contract.

One investor commented, “we will be writing to Nakheel and Damac requesting them to disclose the new plot handover date and details of any planned changes as a matter of urgency” She went on to say that the Group intend to monitor developments to ensure that any changes are compliant with the contract provisions. It is possible that investors may request a meeting with Damac to get clarification of the details and to iron out any concerns.

Barring any nasty surprises contained in the ‘detail’ of the re-location of Palm Springs, it would seem that both investors and Damac will soon be able put their differences behind them and look forward to the dream that was, and hopefully is, Palm Springs.

Let’s hope Nakheels’s and RERA’s role in helping to resolve the crisis serves to strengthen the reputation of Dubai real estate.

How PR works in Dubai

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

Apr 24, 2008

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

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

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

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

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

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

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

Damac – Again No Respect against Investors

Latest News / Still no official detailed confirmation from Damac

Disappointed Damac Investors – Damac Case Palm Springs

Dear All,Long awaited letter arrived from Damac.

What a disappointment!

It was just a press release stating that Palm Springs has been reinstated.

Original Interview April 20,2008 Business24-7.ae RERA Dubai CEO Marwan bin Ghalita

Low customer loyalty for Gulf developers – survey

Low customer loyalty for Gulf developers – survey

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

by Amy Glass on Thursday, 17 April 2008

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

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

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

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

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

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

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

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

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

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

comments of this article:

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

 

 

Low customer loyalty for Gulf developers – survey

Low customer loyalty for Gulf developers – survey

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

by Amy Glass on Thursday, 17 April 2008

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

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

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

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

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

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

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

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

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

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

comments of this article:

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

 

 

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.

 

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

original published: Arabian Business 10.April 2008

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

original published: Arabian Business 10.April 2008

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Comments – The Damac Case Dubai – Caveat Emptor applies to homeowners only!

original published:

http://www.arabianbusiness.com/515293-reason-for-axing-palm-springs-questioned?ln=en

Caveat Emptor applies to homeowners only!
Posted by Samer Helmy on 2 April 2008 at 15:33 UAE time

caveat emptor is the latin origin of the well-known doctrine of “Buyer beware”. That applied in the old days and today to homeowners selling present property to other individuals, and it was against the state of a property as it was the buyer’s responsibility to inspect the unit and decide if the price is worth it, basically that there is no warranty. Developer’s responsibility to actually build the unit is NEVER under caveat emptor, it is a contractual obligation to deliver that Damac in this case clearly violated and is simply counting on investors to bend over and let it slide. As a matter of fact, even in defects and quality issues, the developer (builder-seller) STILL cannot be protected by caveat Emptor as they are responsible for what they build. Today for example in the US they have what is called Implied Warranty of Fitness that developers HAVE to deliver the property free of any defects.

Greed or whatever, the investors invested and signed a contract that forces the developer to build if he can, and the fact that DAMAC did not put in the foundations for over 4 years before Nakheel reorganized the plots is not the investors fault. I say take them to court and make them pay full damages.

Regards,

Samer Helmy

Palm Cancellation
Posted by Sussex Sheikh, London, UK on 2 April 2008 at 13:51 UAE time

There is an old Latin phrase ‘caveat emptor’. This applies as much in Ancient Rome as it does in 21st Century Dubai.

Believe Nakheel
Posted by Riham, Dubai, UAE on 2 April 2008 at 10:49 UAE time

Believe Nakheel! I do realise that they are late on a few projects, but as a buyer, I’d just purchase from them or Emaar. The only two developers I have trust in and I’m saying this as an expat! Have never believed Damac and am sure it is to do with greed. All the money from the downpayments was probably “snatched” up and spent a long time ago….perhaps this is just the beginning of a complete breakdown! Raffle draws on private jets, islands, luxurious cars, etc to attract people? Good idea, sure…but for how long? I can just imagine how many projects are financed to completion in Dubai from the money received as downpayment for newly announced ones…how can you break even then or make a profit? No way….I can just imagine what kind of strict controls the Dubai Government will introduce soon for private developers. Am sure they should start off by asking them to deposit hundreds of millions of dirhams as a safety deposit to protect buyers!

Palm Springs
Posted by Sanjay Amar on 2 April 2008 at 10:03 UAE time

While people talk about potential losses that may arise on account of the shelving of this project, there are damage control measures one could look at.
One idea that immediately comes to my mind is holding the subject land on which the property was to be constructed in trust for the registered buyers of the property, liquidating the land at current values and making proportionate payments.
At least the registered buyers could benefit from the appreciation of the land.
This could be a better solution than the two alternatives offered.
And, if payments have been made to Damac on percentage of completion basis, the damage would be minimised further.

Palm Cancellation
Posted by prahlad, Sharjah, United Arab Emirates on 2 April 2008 at 09:59 UAE time

The probem has got to have its genesis in the turmoil currently facing the construction industry which is bleeding on every front for reasons outside its control. Acute scarcity of resources – notably materials and manpower – coupled with escalation of costs to levels beyond belief on the one hand and fixed-price contracts on the other, have all had a devasting effect on the industry. Palm cancellation is, in my veiw, just tip of the ice-burg.

Palm Cancellation
Posted by Fred, Dubai, UAE on 2 April 2008 at 08:01 UAE time

I’m afraid greed sometimes backfires, for every one investor that may lose money, there are possibly 5,000 others who are waiting for the bubble to burst and help reduce the over inflated housing market and give others a chance to live and work in Dubai.

SHOW ALL COMMENTS

Confirmation
Posted by Ilyas, London on 1 April 2008 at 20:25 UAE time

And Damac were trying to blame Nakheel all along… Simply a case of – how can we make more money – by stuffing the investors and taking their share of the rise in property prices!

Nakheel’s Comments
Posted by Lee, Dubai, UAE on 1 April 2008 at 20:10 UAE time

This is getting interesting!! Damac says one thing and now Nakheel has come out and contradicted Damac’s “story”. Hmmmm? Who should we believe???

The Dubai government needs to quickly get involved or this story is soon going to become world news. If the group of UK investors proceed with taking Damac to court the UK press is going to be all over this story and it will not be good for Dubai’s reputation or image.

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 ?

19thFloor Dubai

Hush money, phantom buyers and feeding the Vegas mentality
The furious response to the cancellation of Damac’s Palm Springs project has created a level of investor mistrust that threatens to rock the entire Dubai real estate market, tainting good and bad. One result is that former real estate sales staff are more willing to recount examples of bad practice. The methods listed below are described by one former sales manager as being “common knowledge in the market”.

The Palms Springs Group Resolute in its Stance

If Damac was hoping that delaying their response to investors demand for justice would cause the Palm Spring Investors Group to fragment, then the news for Damac is not very good. Inside sources report that the Group has, if anything, become even more united and resolute in their aim to ensure Damac does not short-change their members. It is clear that the Group is not ready to accept anything less than that Damac
read more herehttp://damaconcovered.wordpress.com/2008/04/07/the-palms-springs-group-resolute-in-its-stance/

19thFloor Dubai

Hush money, phantom buyers and feeding the Vegas mentality
The furious response to the cancellation of Damac’s Palm Springs project has created a level of investor mistrust that threatens to rock the entire Dubai real estate market, tainting good and bad. One result is that former real estate sales staff are more willing to recount examples of bad practice. The methods listed below are described by one former sales manager as being “common knowledge in the market”.

David Beckham will not be your neighbour – Beckham gives in-laws $16mnDubai Palm home

original published http://www.arabianbusiness.com/property/article/515700-beckham-gives-in-laws-16mn-palm-homeArabianBusiness

Sunday, 06 April 2008by Talal Malik

England football star David Beckham has given his $16 million mansion on Dubai’s Palm Jumeirah to the parents of his pop singer wife Victoria, press reports said on Sunday.

British weekly tabloid News of the World reported on Sunday that Beckham has given the keys to the waterfront villa on the palm-shape artificial island to his in-laws Tony and Jackie Adams, parents of ‘Posh’ Spice Girls singer, Victoria.

“David realised he was not going to be able to spend any time in Dubai,” said a source close to 32-year old Beckham, who now plays for Los Angeles football team, LA Galaxy.

“He’s got his commitments in Los Angeles and it’s a long trip, especially when he still has to spend a lot of time in London – so he discussed it with Victoria and decided that the Dubai place would be a really special present for her parents.”

more:
http://www.arabianbusiness.com/property/article/515700-beckham-gives-in-laws-16mn-palm-home

Nakheel Dubai government owned Developer suspend ALL sales on its International City Project

Comment by Hanna April6,2008
original published: http://www.skyscrapercity.com/showthread.php?t=490764&page=275

Nakheel Dubai government owned Developer

——————————————————————————–

This weeks’ ‘DOG AWARD’ goes to Nakheel – yes the Dubai government owned Developer. This usually wonderful organization has decided to suspend ALL sales on its International City project. This means that ALL sales/resales/transfers cannot happen and worse still, Nakheel will not advise when this action will be reversed. Instead of honouring ‘transfer commitments’ already booked with them, they have decided to cancel these. This decision however has far greater importance and significance than the ‘clever’ person who gave the ‘go’ instruction. It strikes at the heart of what is important for the foreign investor when looking at overseas markets – ‘are there any restrictions on my being able to sell my property when I want to’. An understandable question for any investor to ask. And, until now, Dubai could hold it’s head high and categorically state that NO such restrictions exist. Well, until now. SHAME on you Nakheel …………………… and the person(s) who made this ridiculous decision. You are damaging the image, reputation and success of Dubai. You DO NOT have THAT mandate or right

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

Damac, said:

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

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

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

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

17. FORCE MAJEURE out of a contract from Nakheel

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

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

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

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

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

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

Introduction

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

What is force majeure?

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

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

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

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

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

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

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

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

The parties may contract out of this rule.

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

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

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

General force majeure provisions

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

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

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

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

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

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

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

There are generally three essential elements to force majeure:

it can occur with or without human intervention;

it cannot have reasonably been foreseen by the parties; and

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

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

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

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

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

‘Circumstances beyond the control of the person concerned’

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

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

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

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

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

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

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

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

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

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

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

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

The way forward

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

In other words, it should not include the catch all “any event beyond the reasonable control of the parties including….”.
Given force majeure is a creation of contract, the courts are unlikely to expand on the definition given by the parties.

Obviously, this restricted approach is most appropriate when the counterparty has time critical obligations eg: in an EPC contract.
However, where it is the project company that has time critical obligations eg: in an offtake agreement, the project company should adopt a more encompassing definition including the traditional catch all phrase.

David Beckham will not be your neighbour – Beckham gives in-laws $16mnDubai Palm home

original published http://www.arabianbusiness.com/property/article/515700-beckham-gives-in-laws-16mn-palm-homeArabianBusiness

Sunday, 06 April 2008by Talal Malik

England football star David Beckham has given his $16 million mansion on Dubai’s Palm Jumeirah to the parents of his pop singer wife Victoria, press reports said on Sunday.

British weekly tabloid News of the World reported on Sunday that Beckham has given the keys to the waterfront villa on the palm-shape artificial island to his in-laws Tony and Jackie Adams, parents of ‘Posh’ Spice Girls singer, Victoria.

“David realised he was not going to be able to spend any time in Dubai,” said a source close to 32-year old Beckham, who now plays for Los Angeles football team, LA Galaxy.

“He’s got his commitments in Los Angeles and it’s a long trip, especially when he still has to spend a lot of time in London – so he discussed it with Victoria and decided that the Dubai place would be a really special present for her parents.”

more:
http://www.arabianbusiness.com/property/article/515700-beckham-gives-in-laws-16mn-palm-home

Nakheel Dubai government owned Developer suspend ALL sales on its International City Project

Comment by Hanna April6,2008
original published: http://www.skyscrapercity.com/showthread.php?t=490764&page=275

Nakheel Dubai government owned Developer

——————————————————————————–

This weeks’ ‘DOG AWARD’ goes to Nakheel – yes the Dubai government owned Developer. This usually wonderful organization has decided to suspend ALL sales on its International City project. This means that ALL sales/resales/transfers cannot happen and worse still, Nakheel will not advise when this action will be reversed. Instead of honouring ‘transfer commitments’ already booked with them, they have decided to cancel these. This decision however has far greater importance and significance than the ‘clever’ person who gave the ‘go’ instruction. It strikes at the heart of what is important for the foreign investor when looking at overseas markets – ‘are there any restrictions on my being able to sell my property when I want to’. An understandable question for any investor to ask. And, until now, Dubai could hold it’s head high and categorically state that NO such restrictions exist. Well, until now. SHAME on you Nakheel …………………… and the person(s) who made this ridiculous decision. You are damaging the image, reputation and success of Dubai. You DO NOT have THAT mandate or right

International City Residents complain about lack of facilities

By Alice Johnson, Staff Reporter Published: April 05, 2008, 00:34 GulfNews http://archive.gulfnews.com/nation/Housing_and_Property/10203136.html

Dubai: Residents of Dubai’s International City have mixed feelings about their homes and its location. While the area is relatively cheap compared with the sky-high rent in other communities in Dubai, some residents are not entirely happy with the area. The main issues are parking, on-site facilities, signage and the smell of sewage that sometimes hangs over the area. F.Z., a resident of the Persia Cluster, has been living in International City for more than two years. “The smell is really bad, especially when there’s a wind blowing.” The smell originates from the nearby Al Aweer sewage plant, which reportedly cannot cope with the amount of sewage delivered. <!– document.write(”); //–> Rashid Al Helli, Nakheel’s general manager for International City, said: “Nakheel has commissioned and completed an independent study into the Dubai Municipality Sewage Treatment Plant (STP), which is located close to International City. The resulting report recommended upgrading the STP to accommodate the rapid growth of Dubai’s development and following discussions with the municipality, upgrading work commenced on the plant in October 2007. This work is due to be completed by June 2008.” Another issue for some residents is the lack of signage. F.Z. said: “There’s no signage to show people how to get here. There’s 50,000 people living here now so it should be sign-posted.” Al Helli said additional internal road signage will be in place by the end of the summer 2008. F.Z. also complained about the lack of facilities. “There’s only a small number of laundries, restaurants and shops.” Al Helli commented: “International City is now fast establishing itself as a vibrant community, providing much needed affordable living with excellent facilities for a broad range of people in Dubai. Facilities are continuing to be made available, landscaping is well underway, and community events are regularly being held, including a hugely successful basketball tournament.” Traffic problems are caused by a large number of sewage trucks that pull in on the hard shoulder by the International City main entrance at the Dragon Mart, slowing traffic down and causing a road hazard. J.H. a secretary from the UK, said: “Big trucks pull in on the side of the road by the main entrance, making cars drive across two lanes. It’s very dangerous.” M.M. a resident of the China Cluster for the last two years, believes that the reason for the traffic is a diversion from a currently closed roundabout. Al Helli said there are currently four access points to International City and the main entrance will be ready before the end of this year. However, despite these issues, Dubai residents are still attracted to the area. Rising rent One married couple who wished to remain anonymous, said: “Property prices are so high in Dubai that there are few places left that are affordable. We currently live in The Greens but, with increased rent, it’s no longer possible for us to stay there. While International City may be a bit deserted at the moment, I think it will soon fill up as people are forced further and further out of the city just to afford a roof over their heads.” J.H. also moved to the area because of rising rent. “I used to live in Umm Suqeim where my rent was Dh78,000 a year. I I moved to International City where a studio is Dh40,000 a year. It is almost half the price.” Do you know anyone who lives in the area? Do they suffer from the same problem? How has it impacted their stay?

Nakheel distances itself from Damac

original published Gulfnews
Damac move surprises Nakheel
By Suzanne Fenton, Staff ReporterPublished: April 04, 2008, 00:44

Dubai:
Uncertainty surrounds Damac’s cancellation of its Palm Springs project as master-developer Nakheel, which is building the Palm Jebel Ali where the project was initially planned, saying it was not informed of Damac’s decision to cancel.

Marwan Al Qamzi, managing director of the Palm Jebel Ali, said Damac’s decision came as a surprise and Nakheel learned of it through the media.

“We are very surprised by the statements made by Damac suggesting that the reasons for the cancellation of its Palm Springs project are due to revisions in the Palm Jebel Ali masterplan,” said Al Qamzi. “The Palm Springs plot was relocated to a prime position due to widening of the crescent,” he said.

“Our last interaction with Damac took place in February this year and was one of positive engagement. It left us with the firm view that Damac was proceeding with the project. We are extremely disappointed by this recent development,” said Al Qamzi.

Al Qamzi said that the revised masterplan allowed for significant improvements in the design.

Nakheel has sold other plots of land on the crescent of Palm Jebel Ali to Damac. Al Qamzi said it was now the responsibility of Damac to ensure the delivery of any units it has sold within these plots to customers.
Revisions to the Palm Jebel Ali masterplan were communicated to investors more than ten months ago.

“From Nakheel’s perspective, Damac’s cancellation of the Palm Springs project must be linked to other development issues specifically related to the project,” said Al Qamzi.

Damac was not unavailable for comment.

Al Fajer Properties without any respect – Damac Victims are not alone

original published Arabian Business
http://www.arabianbusiness.com/515147-palm-spring-investors-face-millions-in-losses-

Damac Victims are not alonePosted by Falcon, Munich, Germany on 1 April 2008 at 03:00 UAE time

The victims of Damac are not alone. They bring to daylight what happens day by day in Dubai.

We bought 2005 Falcon Tower JLT directly at Nakheel.

We paid 45% until June 2006.

In August 2006 we got a letter from DMCCA.

Falcon will not be built – a decision of Nakheel.
But we were told the Falcon Tower would be transfered to AL Fajer Properties, nothing would change for the customers.

Today, 2008, we are getting letters from the lawyer of Al Fajer Properties trying to cancel every right to our purchased apartment.

We have got our own lawyer – but they have refused to correspondence with him.

The case is with RERA – but until today without any response.

Further information:

http://www.dubai7stars.com/

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.“

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

Another case ?

original published: www.skyscarpercity.com

http://www.skyscrapercity.com/showthread.php?t=435136&page=9

Lastest email from Aspire:

Dear Sir,

This is further to your e-mail below we would like to inform you thatAspirehas already paid 45% to Nakheel for the land and the land will betransferred to Aspire’s name in few days. Escrow account is also notyet setup as we are under final negotiation with Banks for opening it.

We ASPIRE REAL ESTATE BROKER (L.L.C.) are already registered as brokerwithRera.
As for the registration as Developer, We are still waiting fortheirapproval.

As you are aware that we have already got the basic approval andundertakenthe necessary proceed to get the approval of the final design andprojecttitle.Now, the reason for delay is these all things are co related anddependenton each other and will be sorted out within a month time. We assuredyouthat we will keep up updated with any developments regarding thesematters.Regards

Nakheel Jumeirah Palm The Pearl

There we have the much-vaunted Dubai Pearl, the ‘futuristic city’ which would be another ‘icon’.

That was going to be completed in May 2006 and it was going to look like this:

Here it is today:

Yes folks, almost two years after it was due to be finished the demolition squad is in, knocking down the buildings and digging up the foundations.

ACI – Frustrated Investors – Star Tower – Jumeirah Lake Towers – Plot L2

original published skyscrapercity.com
http://www.skyscrapercity.com/showthread.php?t=179383&page=5

comment by Bazz

hey guys, i have also invested here since 2004, to date i have heard ABSOLUTELY nothing and am very thankful of you guys here that has provided me with more information then junior gas themselves. Each time i have phoned them they have no answer and no certainty of when the project will commence and complete.i am very anxious and scared now as this project was heading nowhere. I dont know if i should take my money back losing all the bankers fees for money transfer each month or if i should stick this one out hoping it will be worth my while? any ideas?The best i was told was that i can be re-imbursed all monies paid to date if i wish.many thanks.

Comment:

dubai star at gulf and dubai property exhibition

Been to the above property exhibition in London on the 21st and Dubai Star had a stand.

Just vaugely remembered reading this thread – so thought ask them some questions.

They informed the developer is german co called ACI, they dont know whether development has started and gives completion date of september 2008.

The consultants seemed to have been hired just for the day and genuinly did not seem to know anything else about the development.

I would personally stay well away from this project

Comment

hi again, thats exactly where i bought from in april 2004, must av seen you there lol, I have been in touch with ACI and my sister went in person last year when she went for a holiday, they seem professional and work seems to be underway. But lack of communication from them (i.e. updates etc) does not help and for other buyers there has not been any update to the situation, i had to chase junior gas and then found out from here that ACI has taken over, no one from junior gas told me at all…..Yes they speak perfect english at junior gas and personally i am fed up of chasing people to get an answer, i still dont know what is happening to my apartment as its on the 23rd floor, which ACI’s impressive brochure states is a commercial office floor not residential???you stay in touch too, finally we are beginning to shed some light on this whole issue thanks to this forum….

Hi Bazz

I called ACI last week and spoke to Anita. Robin Lohmann (Managing Director) was in Germany, she told me to email her all the details and she will get in touch with me.

So far nothing no reply.

Last year I went to Dubai and appointed Emirates Advocate to handle our case they sent legal notice and thats it. According to them whats happened is fraud and Junior Gas should not have sold the land without informing us.

Well thats all they have done and now they are just sitting on the case and no response. I think we all should get together and go to media. Junior Gas have made 30 million AED profit.

According to Ahmed no one will spend £5ooo to sue him in Kuwait.

Mind you he does have few projects going in Kuwait and they are well known in Kuwait. BBC are looking for real story to investigate and we will not be charged a single penny and they will expose Junior Gas and question Nakheel why has this happened, I have already spoken to a journalist.

Or we get an international solicitor in UK who will handle our case. Like you said You are tired of chasing, so are we. Its not just us they are 30 or 35 people like us.Its about time to take some action.

Any other suggestions are welcome.
________________

Comment

Hi bazz

No havent heard from ACI and every time I call they say they will get back to me but nothing.

Junior Gas are ready to pay back the money on condition that we sign that we have no legal liability with them and with ACI.

If you want you can hold till the end and fight with them because legally you own the appartment and they have to pay you or buy you out. We have invested elsewere and need the money thats why we are asking for money back.

What happened when you got in touch with ACI what did you think about them. I couldnt get time off so we will be flying to Dubai after Easters. Will let you know what happens.

I will go and see ACI in person before we collect the money from Junior Gas.

Will keep you informed.

___________________________

hey shilu,y

es we are still paying junior gas which i found odd but was instructed by ACI to do so.i have paid just over 75% now and still have not heard a peep from anyone!!

i will plan to go soon (maybe july) and see what they have to say for themselves… cant take much more of this thats for sure.

i have looked at the project on various sites and it shows completion date as 2008.

What junior gas and ACI lack is good communication.

if we were informed time to time of what is happening then id feel more secure about my investment.please do stay in touch and keep us informed on here. when are you going and when will you be back?hope it all goes well for you. im glad atleast two of us are trying to sort things out here. everyone has disappeared lol.

bazz780

___________________________
Hi,
i just called ACI and was advised that they no longer reside there.After calling a mobile number in dubai i was advsied that they have now moved offices and are located in Jumeirah.

When i questioned why i was not notified i was told that emails were sent out to advise of this??

Any how: there has been no progress in construction and i have just been told that the tower is still in the ‘piling’ stage… completion is expected in 2008 now and as far as the payment to junior gas is concerned… the secretary will find out for me what i should do about this….

SHILU: i hope when you do go you will get some solid answers out of these people. If you can ask a question for me “what happens to those who purchased a flat on the floors up-to floor 28 as they are now commercial floors…… do they get moved up or what?”Think i will have to go down to dubai as well… just to clear things up!
____________________________________________________________

Dear All Dubai Star property owners

My name is Hicham Nicolas and I’m one of many who bought an appartment in Dubai Star.

They claimed it will be done in April2008, bla bla bla…

To cut the story short, here are the most recent updates:1-ACI did finish the shoring (digging) only last month.2-Nothing happened since than.

The site is empty no machines, no labour no nothing. I visited the site twice (on 10 and 15 April 2007)as I live nearby.3-Based on my telephone calls they claim that they are waiting for the “piling” phase license approval from Nakheel DCCI.4-I heard that the size of the (sq ft) sold to us is not a nett area but a global area(meaning they will deduct a percentage for the lift and the stairs and the lobby etc etc…).

ACI denied that, but still they refuse to put it in writing.5-Last month they said the sales contracts will be ready in May 2007.

This month they said the date has changed and we do not have a deadline.They claim again that Nakheel DCCI have the contracts and haven’t release them yet.6-ACI split from Lakepoint (real estate agency) and they shifted their location to a villa in Jumeira without telling us.

My contact with ACI is their Sales Manager Miss Fereshti.

Who apparently is a mere interface between us and them. Whenever they want they tell her things that they can refute later on.

Based on all the above, we need a plan of action. I alone cannot do much.
We need the power of a group.
I have many ideas and we can get in contact with a lawyer if we have too. We need to force them to start the works. Instead of using our money for something esle (they have other porjects on paper)…I know 1 more owner.

That will make 2 of us until now. Join us. Please contact me on my email hichamnicolas@yahoo.com .

Sincerely YoursHicham Nicolas

_________________________________________
Hi bazz

All this time a year i have been trying to get all the dubai star buyers together and sort things out.

Because i believe that whats happened is not right.

We went to Dubai last April, got in touch with the British Embassy. The embassy said they cant do anything but give us a least of lawyers. And we should take it from there.

We went to Emirates Advocates, they have a very good reputation and are well known in Dubai and GCC countries.Guess what after spending £2000 nothing came off it.

They did inform us that we have a very good case of fraud, and their name held a lot of weight and everything will be sorted out in few months.
The solicitor Rajesh Babu wouldnt reply to any of my emails, would not take my calls and kept me hanging.

I wrote a stong letter on their website and told the bosses what was happening,they appointed a another lawyer Mr Ibrahim and then after few months another Miss Doaa.

In a year I had 3 diffrent lawyers and let me tell you this they all lied.

Six months back the lawyer said Junior Gas are refusing to pay the refunds and fed me so many lies that I couldnt believe it.

I lied to book an appointment with ACI, otherwise they would not see me.

Their legal adviser Mr Rashid Saab is a very shrewd person, he is from Lebanon.

He mentioned the same thing a few times that he will not promise about the completion date its better to collect the refund and invest somewhere else.
Thtats what they want.

Go to Dubai in June and see for yourself. Meet up with both the teams.You will be going to and fro from both of them.

Neither of the party will make any commitment or give you a straight answer.

But if you all gang up and meet them together you will get somewhere.

______________________________________________________

thanks shilu,from what you are saying i think i will take my money back also. i invested 3 years ago to help me buy a house in this country, i now have wasted 3 years of my time in a project that is lifeless.i think it would be more wise to take money and buy our family home here in london, in 3 years time the value of the house will rise as much as the value of my apartment in dubai…. in terms of profit.i hate it when communication is not consistent, i have suffered with junior gas and now aci are proving to be the same.a friend of mine bought in dubai marina and received constant updates and super fast responses to all his communications. i dont think il get this from aci to be honest.i dont really have the money to complete payments in one go and dont think i can go out of my way to scrape the money together for something so uncertain.one question shilu:i have paid 30k so far, converting that back to pounds from dirhams, i will only get back 26k losing 6k.have you not also had this problem? currently the exchange rate is 7.9 dirhams to make a pound.I hear your point and remember how hard you have tried to gather all buyers to make a stand! but apart from me and you… no one else seems bothered.a company called best in dubai (www.bestindubai.co.uk) have apartments being built in international media production zone (IMPZ) with studios starting at 54K off plan. they seem very professional and deal with the developer DAMAC. even the website has photos of regular updates to all projects currently underway, as well as online payment facility that will save bundles on bank charges as well!!!!but i think iv had enough for now, as this new project will not complete until 2010 by which time london prices will have hit the sky (with the olympics getting closer)thanks alot shilu, im glad you have made a choice and hope it will prove to be the right choice overall… i may have to follow your footsteps.
______________________________________

The issue Nakheel Damac Discovery Gardens

Monday , May 7 , 2007

Nakheel has cleared the air by confirming that they are the master developers of Discovery Gardens, putting an end to the confusion about the apartments in a development, Terra Del Sol, which had been marketed by Damac Properties.The investors were basically confused about whether they had bought the apartment from Nakheel or Damac.A representative of Nakheel mentioned that they are the master developer of Discovery Gardens, and are responsible for construction of the entire project, comprising 291 buildings with 26,000 odd multi-sized units in a family-oriented community.Discovery Gardens, launched during July 2004, created a high demand, and the construction of the buildings began the same year. The statement from Nakheel mentions that most of these buildings are sold to developers, and hence the cost of apartments in these buildings is determined by the individual owner.The Damac CEO, Peter Riddoch, has stated that they had purchased two buildings from Nakheel, and re-sold them to third parties during 2005. The buildings in Terra Del Sol were very similar to rest of the major development, and Damac had placed its identity tag on the two buildings for marketing purposes. The investors were also clearly notified about all details, so that they do not feel cheated.Meanwhile, a few British investors who had booked flats during 2004-05 with Damac, claimed that while booking, they were told Damac Properties were the ones to build Terra Del Sol, keeping Nakheel as the master developer during the entire Discovery Gardens project.A resident is said to have stated that Damac had earlier mentioned that they are the ones undertaking construction of the properties, and there was no mention of Nakheel being made. He added that he was only notified about Nakheel being the developer during the year 2006, when Damac had asked the family to sign a Power of Attorney, authorizing them to buy properties from Nakheel on their behalf.A property developer, Sarfraz Mirza, also mentioned the same issue, and agrees that Nakheel was brought to the picture only last year at the time of signing the documents.

RERA – Official Dubai Real Estate Community

International City complaints – Letters written to Nakheel

original published:

http://www.totallyproperty.com/international-city-dubai-owners-group-forum/1286-international-city-nakheel-complaint-letter-template.html

YOUR NAME
Your address
Your email

20 December 2006

Aaron Richardson
Senior PR Executive
Nakheel,
P.O. Box 17777,
Dubai,
UAE
Tel: +971 4 368 6946

Dear Aaron Richardson,

I am writing to you to complain about the high service charge for my International City apartment that is being forced upon me by Nakheel.

International City is marketed as an “affordable living experience” [1] which is one of the reasons I decided to purchase an apartment in this development. I expected that the service charge would be around AED 6/sf, since more luxurious apartments with facilities such as a sauna, swimming pool and gym in other developments where no more than AED 12/sf. I was therefore very surprised to have recently received an email from my building owner informing me that the service charge will be AED 11.64/sf. The building owner informed me that this was the price set by Nakheel and didn’t have any explanation as to why it had been set to such a high amount. He also mentioned that different buildings had different service charges and some where as much as AED 3/sf less than mine. His opinion on the difference was that it could be due to the different amount of landscaping required between the buildings.

In my contract it states that “the applicable rate shall be advised to the Purchaser by 31st March 2005” [2]. Had this actually been the case I may have decided to sell the apartment before completion and would have had time to do so. Instead the first I hear about the service charge is just two months prior to handover. Nakheel has put me in a difficult position because if I try to complain or get any information about why the service charge has been set to such a high amount I do not get a reply to my emails. Also, I cannot temporarily withhold payment until this matter is resolved because if I don’t pay the service charge I won’t beable to complete handover of the apartment.

I would like a statement from Nakheel informing me how the service charge has been set and what guarantees there are that it won‘t keep increasing every year. I would also like to know why there are such levels of variance between buildings. I cannot believe this is due to different amounts of landscaping required between the buildings, mainly because It is quite well documented in the media how low the wages of the workers are. A bit of extra landscaping shouldn’t require every person in the building to pay an extra AED 3/sf.

I would like to alert you to the fact that there are many other angry customers who have just found out how much their service charge is [3]. The UK media seems to be on a mission these days to report any negative aspects of the Dubai property market. There are a growing number of frustrated International City customers looking for any way to get their message out to force Nakheel to address their concerns. This could result in their grievances been reported in a story in the overseas property column of a prominent newspaper. As a Senior PR executive I’m sure you can see that this would not be good for Nakheel.

[1] http://www.internationalcity.ae/home.php
[2] International City Unit Sale & Purchase Agreement. Terms and Conditions section 10.3 (page 12)
[3] Totally Property International city forum
http://www.totallyproperty.com/international-city-dubai-owners-group-forum/

Sincerely,

YOUR NAME

International City complaints – Letters written to Nakheel

original published:

http://www.totallyproperty.com/international-city-dubai-owners-group-forum/1286-international-city-nakheel-complaint-letter-template.html

YOUR NAME
Your address
Your email

20 December 2006

Aaron Richardson
Senior PR Executive
Nakheel,
P.O. Box 17777,
Dubai,
UAE
Tel: +971 4 368 6946

Dear Aaron Richardson,

I am writing to you to complain about the high service charge for my International City apartment that is being forced upon me by Nakheel.

International City is marketed as an “affordable living experience” [1] which is one of the reasons I decided to purchase an apartment in this development. I expected that the service charge would be around AED 6/sf, since more luxurious apartments with facilities such as a sauna, swimming pool and gym in other developments where no more than AED 12/sf. I was therefore very surprised to have recently received an email from my building owner informing me that the service charge will be AED 11.64/sf. The building owner informed me that this was the price set by Nakheel and didn’t have any explanation as to why it had been set to such a high amount. He also mentioned that different buildings had different service charges and some where as much as AED 3/sf less than mine. His opinion on the difference was that it could be due to the different amount of landscaping required between the buildings.

In my contract it states that “the applicable rate shall be advised to the Purchaser by 31st March 2005” [2]. Had this actually been the case I may have decided to sell the apartment before completion and would have had time to do so. Instead the first I hear about the service charge is just two months prior to handover. Nakheel has put me in a difficult position because if I try to complain or get any information about why the service charge has been set to such a high amount I do not get a reply to my emails. Also, I cannot temporarily withhold payment until this matter is resolved because if I don’t pay the service charge I won’t beable to complete handover of the apartment.

I would like a statement from Nakheel informing me how the service charge has been set and what guarantees there are that it won‘t keep increasing every year. I would also like to know why there are such levels of variance between buildings. I cannot believe this is due to different amounts of landscaping required between the buildings, mainly because It is quite well documented in the media how low the wages of the workers are. A bit of extra landscaping shouldn’t require every person in the building to pay an extra AED 3/sf.

I would like to alert you to the fact that there are many other angry customers who have just found out how much their service charge is [3]. The UK media seems to be on a mission these days to report any negative aspects of the Dubai property market. There are a growing number of frustrated International City customers looking for any way to get their message out to force Nakheel to address their concerns. This could result in their grievances been reported in a story in the overseas property column of a prominent newspaper. As a Senior PR executive I’m sure you can see that this would not be good for Nakheel.

[1] http://www.internationalcity.ae/home.php
[2] International City Unit Sale & Purchase Agreement. Terms and Conditions section 10.3 (page 12)
[3] Totally Property International city forum
http://www.totallyproperty.com/international-city-dubai-owners-group-forum/

Sincerely,

YOUR NAME

Taktic of cancellation Dubai Devlopers – Nakheel – DMCCA – Al Fajer Properties – Falcon Tower Jumeirah Lake Towers Plot H3

original published:

http://www.skyscrapercity.com/showthread.php?t=138300&page=3

Website of plaminvest.nl still alive

The WEbsite of Palminvest is still alive !!

So is this really a case of fraud ?

Can please somebody name the new escrow accounts of…..??? whom ever….maybe ACI Real Estate..or developer XXX…just somebody from the Plot common lottery network…
I´m sure some more xxx are still on the way to the same nirvana there in Dubai ?

Nakheel takes legal action against PalmInvest

Nakheel takes legal action against PalmInvest

By Suzzanne FentonStaff Reporter
Published: GulfNews January 22, 2008, 22:13

Dubai: Dubai’s master developer Nakheel, which has more than $60 billion worth of projects in its portfolio, has taken legal action against PalmInvest – an unscrupulous real estate investment broker based in the Netherlands for fraudulently selling bonds with a nine per cent interest rate for property on Palm Jumeirah in Dubai.

Although PalmInvest is not an officially registered company in Dubai, the PR Manager for Nakheel, master developer of the Palm, told Gulf News, “Yes, I’ve heard of them. In fact, we’ve taken legal action against them in the past to stop them using our projects and our name in their marketing and advertising.

“They’ve no connection or affiliation with Nakheel.”

According to an employee of the company, PalmInvest is owned by Dutchman Remy Bal and is based in Hilversum in the Netherlands. However, neither the General Manager nor the Press Officer of PalmInvest was available for comment.

On the company website, PalmInvest invites prospective buyers to ‘invest in the Palm Dubai’ and promises that it is ‘in all respects legal and fiscally responsible’.

It also states that Dubai is ‘the right breeding ground for safe investments’.

PalmInvest is selling bonds guaranteeing a nine per cent interest rate per year over a three-year period to investors willing to pay a minimum of Dh266,385 ($72,525).

Marwan bin Galita, chief executive of the Real Estate Regulatory Agency (Rera), on Monday highlighted the importance of investing safely within the new framework put in place by Rera, “No transactions can be processed outside the land department system, improving confidence and security in the market.”

Dutch authorities arrested five on suspicion of fraud on Tuesday. The Netherlands’ financial prosecutor said in a statement that documents and luxury goods were seized during raids on eight offices and five homes in the Netherlands and one in Monaco.

A research associate at Jones Lang LaSalle, said, “The new Escrow Account Law put in place by Rera now ensures this kind of fraud doesn’t happen. There is full consumer protection in play. So now the developer can’t take any money before he’s got something to show for it.”

Shattered dreams International City Dubai 2007

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Shattered dreams International City Dubai A Project by Nakheel Dubai

Updated at

Ansar Abbasi original published http://www.thenews.com.pk/top_story_detail.asp?Id=2072 ISLAMABAD: The dream of hundreds of Pakistanis to have an offshore luxury apartment has turned into a nightmare with the ARY lately issuing cancellation orders of their allotments in Dubai International City. While these innocents were waiting for the possession of their Dubai dream houses that they had bought two years back on instalments, they instead received a bombshell — cancellation order. The shocker in each case was accompanied by the photocopy of a cheque containing 90 per cent refund of the principal amount they had paid to the ARY. They were directed to collect the cheque from the respective ARY offices in Islamabad, Karachi and Lahore. The affectees see it as the worst ever offshore rip-off executed in a unique fashion where after circulating the people’s money in Group’s business for two years they are finally offered 90 per cent refund without any fault on their part. Most of the affectees, including military and civilian bureaucrats, doctors, academicians, businessmen and others, have refused to collect their cheques and are weighing different options including approaching the government on this, what they call, offshore swindle. These affectees complain that the sorry part of the whole episode is that it is the ARY that has backtracked from its commitments made to the allottees. They say that the cancellation orders have been issued unilaterally and without any prior warning at a time when they were to get the possession of their apartments. It is said that the prices of these apartments have gone very high, a fact that might have prompted the ARY to cancel the original allotments and sell the property in the open market to earn huge profits. And most interestingly, hundreds of these Pakistanis are being refunded their partial deposit by the Dubai based ARY out of the recent US$10 million offered to the Group by the National Bank of Pakistan. The NBP has also agreed to give this loan to the company to save it from default in Dubai. The NBP had offered this huge financing to the ARY despite latter’s figuring on the State Bank of Pakistan (SBP)’s list of top loan defaulters in Pakistan besides being prosecuted on “corruption” allegations by the National Accountability Bureau. The ARY Dubai office is tight-lipped on the Dubai Apartment cancellation issue. However, Karachi based country head of the Group told The News that those who did not make the full payments were denied allotments. The ARY is though reluctant to give the exact figure of those whose allotments have been revoked, a just formed Islamabad-based action committee of the affectees claims that the number of such ill-fated people is at least 700. Its Chief Coordinator Dr Salma Kafeel, who runs her own clinic in Islamabad, told The News that she has with her the names of 250 such affectees from Rawalpindi and Islamabad. She said that she was allotted three apartments but got their cancellation orders last week. Kafeel termed it a “major offshore fraud” and said that despite meeting all the requirements on their part, the allottees received cancellation orders without any prior warning. Almost all the affectees including Kafeel, contacted by The News, confirmed that they were never issued any intimation letter about the cancellation of their allotment. However, the ARY in its cancellation order to each affectee said, “Reference to our letter intimating about cancellation of your above-mentioned apartment; we have dispatched to you a cheque of AED……./- (different amount) after deduction of 10% received amount as service charges. Please collect the said cheque (photocopy attached) from the regional office in Karachi/Lahore/Islamabad on surrender of your file of the said apartment.” Each of these cancellation order is signed by Altaf H Chishti, General Manager, ARY Properties – Dubai. According to the details the ARY advertised apartments in Dubai International City for sale on June 27, 2004. The advertisement clearly said, “pay only 30%” and guaranteed “70% financing through Islamic mode of banking” payable in easy instalments over a period of 15 years. It was also committed that the allottees would get possession of their property “after two years” besides guaranteeing “annual rental income” that would offset the (70%) loan instalments under property management agreement. And the last attraction given was of Dubai’s “Residence Visa” to allottees on the basis of investment. On the basis of this advertisement hundreds of Pakistanis applied, deposited the required advance and fulfilled other requirement. Within weeks, allotment letters were issued to the successful applicants. Dean Faculty of Engineering Air University Dr Zafar Ullah Koreshi while showing the allotment letter of his wife to this correspondent said that on July 16th 2004 they were allotted apartment No RA1-105-(S1-122) on First Floor at ARY Residencia of International City, situated in Dubai, UAE. Through the same letter, Dr Koreshi said, it was conveyed that M/S Nakheel were the developer of the project. As per the advertisement, the allottees paid 30% of the cost of each apartment (Rs 1.2m for studio flat and Rs 1.7m for one bed room apartment). In addition to this, registration fee for Nakheel Rs 100,000 were paid by each allottee. During February-March this year, according to most of the affectees including Koreshi, the allottees were asked to submit documents for 70% promised financing by a Dubai based financial institution. “Later, however, we were verbally told that no Dubai Bank is ready to offer loan to Pakistanis,” Koreshi said. Afterwards the ARY, according to the affectees, instead of giving any option of either selling their property or arranging loan or finances on their own issued the cancellation orders of their allotment. An affectee Col (r) Ziaul Qamar, presently serving in Nescom, told this correspondent that by doing this the ARY has done a fraud worth billions of rupees against Pakistani nationals. He said that seeing the high profitability because of escalating prices of the apartments in Dubai, the ARY backed out of its commitments and is selling these apartments in open market. Qamar said that the prices of these apartments have risen 2-3 times. Another retired colonel Masood Baig said that the ARY did not follow any principle while dealing with hundreds of Pakistanis. He said that there has been no breach of agreement on the affectees’ part rather it was the ARY that did not keep its promise and changed its mind seeing high profits. Baig said that the implications of, what he called, this “100% fraud” are too serious as besides inflicting financial loss upon hundreds of Pakistanis, a chance to increase remittances from Dubai has also been lost. While most of the affectees have the same tale to share, one Kamran Niaz, who had the allotment in the name of his brother Hamdan Niaz Abbasi revealed that a letter dated May 6, 2006 signed by the ARY Regional Head Pervez A Malik in Islamabad confirmed to him that M/S Nakheel had completed his flat. He was asked through the same letter to update his payments as soon as possible. He said following this letter when he went to the ARY Islamabad office with the offer to pay the remaining amount (Rs 2 million), the regional manager ARY Islamabad refused to accept it. “A few days later I received the cancellation order,” he said. Dr Kafeel also told this correspondent that she too had offered that she would either pay the remaining 70% amount or would arrange loan from a Pakistani bank but she too got a cancellation order. Chairman ARY Haji Abdur Razzak and the Group’s GM in Dubai Altaf Chisti were contacted but they were shy to talk to this correspondent. However, the Karachi-based Country Head of the ARY Aslam Elahi when approached admitted that hundreds of allotments have been cancelled. Without giving the exact figure of the cancelled apartments, he said that the allotments were annulled because the allottees were not paying their dues. When asked as to why did the ARY fail to facilitate the promised 70% Islamic bank financing to the allotees, he initially said that those who had qualified got this loaning but later confirmed that Dubai financial institutions don’t offer loan to Pakistanis. On further probe as to how many and who got the promised financing, he said such allotees are around 100 and are living in Dubai. He explained that the ARY was not getting the payments from the allotees but it had to pay the committed payments to Nakheel- the Dubai-based developer. He said due to this situation there was no option but to cancel the allotments of those not making the payments. He said that those allotted apartments in Italian Block were asked in May-June this year to immediately make their full payments in order to get the possession of their properties. Those who made the payments, he said, are facing no problems while others who did not make the payments had to face the cancellation of their allotment. When asked about US$ 20 million bridge financing including NBP’s share of US$ 10 million offered to the ARY a few months back, he said the said loan money is being used both for the purpose of paying refund to those whose allotments has been cancelled and to complete the project to give early possession to the qualified allottees. More information and comments of investors Forum TotalProperty.com http://www.totallyproperty.com/international-city-dubai-owners-group-forum/4425-ary-6.html http://www.totallyproperty.com/international-city-italy/1725-italy-cluster-2.html

Nakheel is unlikely to sell shares to public

Nakheel is unlikely to sell shares to public
Bloomberg
Published: January 26, 2008, 23:33

Davos: Nakheel, the Dubai-owned developer of the world’s biggest man-made islands, is unlikely to sell shares to the public as sister company DP World did last year, Nakheel’s chairman said.

“We are continually able to fund our operations and there’s no pressure to IPO,” Sultan Bin Sulayem said yesterday in an interview at the World Economic Forum in Davos, Switzerland. “I’m not keen” on a share sale, he said.

Nakheel, which is spending $30 billion on projects including islands in the shape of a world map off Dubai’s coastline, is a member of the state-owned Dubai World group alongside port operator DP World.

DP World in November raised $4.96 billion by selling 23 per cent of its equity to international investors in the Middle East’s biggest share sale.

Nakheel in November 2006 sold $3.52 billion of Islamic bonds maturing in December 2009 that give holders the right to buy shares in any Nakheel companies should there be an IPO before the securities mature. If there are no share sales, additional payments will be made on redemption.

Nakheel is unlikely to sell shares to public

Nakheel is unlikely to sell shares to public
Bloomberg
Published: January 26, 2008, 23:33

Davos: Nakheel, the Dubai-owned developer of the world’s biggest man-made islands, is unlikely to sell shares to the public as sister company DP World did last year, Nakheel’s chairman said.

“We are continually able to fund our operations and there’s no pressure to IPO,” Sultan Bin Sulayem said yesterday in an interview at the World Economic Forum in Davos, Switzerland. “I’m not keen” on a share sale, he said.

Nakheel, which is spending $30 billion on projects including islands in the shape of a world map off Dubai’s coastline, is a member of the state-owned Dubai World group alongside port operator DP World.

DP World in November raised $4.96 billion by selling 23 per cent of its equity to international investors in the Middle East’s biggest share sale.

Nakheel in November 2006 sold $3.52 billion of Islamic bonds maturing in December 2009 that give holders the right to buy shares in any Nakheel companies should there be an IPO before the securities mature. If there are no share sales, additional payments will be made on redemption.

Sultan Bin Sulayem – Nakheel Part 2

If only dreams come true

Sultan Bin Sulayemسل Part 3

by they behavoir of Nakheel against their customers a lot was going to shattered dreams. The question is: Why ?

Sultan Bin Sulayem Nakheel Part 1

Nakheel Palm before Delays and problems