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    • Criminal Complaint filed against Al Fajer Properties Sheikh Maktoum
      Criminal Complaint filed in Germany against Sheikh Maktoum Hasher Maktoum Juma Al Maktoum CEO of Dubai Developer Al Fajer Properties The Dubai Sheikh who mislead and extort a German Couple  Germany – Dubai 2011 A German elderly couple , today 80 + 50 years old who have been Dubai Tourists since a decade, bought in 2005 an apartment at Nakheel´s Dubai Residen […]
    • UAE: Human Rights Blogger, Sorbonne Lecturer Charged With ‘Humiliating' Officials
      source Human Rights Watch www.hrw.org (Beirut) - The United Arab Emirates attorney general should immediately drop all charges against five pro-democracy activists to halt their trial, Human Rights Watch said today. The charges of "humiliating" top officials relate solely to the defendants' peaceful use of speech to criticize the UAE governmen […]
    • Nakheel Dubai Sunland Case
      June 5, 2011After 21 hearings, Chris O'Donnell, the Australian chief executive of Dubai's major developer, Nakheel, came to the defence of his former colleagues Matthew Joyce and Marcus Lee. Mr Joyce and Mr Lee are accused of profiting from the sale of land that had been earmarked for a colossal high-rise development, which was to include the futur […]
    • Dubai Nakheel CEO decided to leave the company
      Dubai June 7, 2011 Nakheel said on Wednesday that its CEO Chris O'Donnell had left the company "after completing his contract terms". O'Donnell, an Australian who joined the developer in 2006, said he had decided to leave Nakheel following five years spent with the company, the statement added. O'Donnell has overseen a traumatic time […]
    • Owner of Dubai Developer Damac Hussain Sajwani files case against Egypt corruption ruling
      Dubai property developer Damac said on Tuesday it had filed an international arbitration case against Egypt over a land dispute and the conviction of its chairman and owner, Hussain Sajwani.A Cairo court last week sentenced Sajwani in his absence to jail and ordered him to pay a $40.5 million fine in connection with his 2006 purchase of land at Egypt's […]
    • Dubai Palm Jumeriah - Investors plan to take legal action
      Investors in Dubai Palm Jumeirah’s Golden Mile complex will this week serve the developer behind the project with a legal ultimatum to hand over their units or issue them with a refund.Up to ten investors in the luxury complex plan to issue Souq Residences with legal notice in a bid to force a resolution to a dispute that has been ongoing for more than a yea […]
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Archive for April, 2008

Rera Dubai CEO Marwan bin Ghalita – There are no complaints – it`s all missunderstanding !

Posted by 7starsdubai on April 29, 2008


original published GrulfNews

http://www.zawya.com/story.cfm/sidGN_25042008_10208297

Friday, Apr 25, 2008

Gulf News

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

Developers will have to work to make the market more sustainable, he said in a wide-ranging interview on Dubai’s booming real estate market, which, many analysts feel, is overheated. “They are not transparent,” he said.

Galita, born in the Shindagha area of Dubai on November 27, 1972, graduated from California State University in Fresno with a BA in Surveying and Engineering. He returned to Dubai and joined the Land Department in February 1995 as a surveyor, doing field work for nearly four years.

After becoming deputy chief of the section, and later head, Galita decided it was time to do an MBA in human resources from the Advanced Technology Institute in Alexandria, Egypt.

After becoming technical director at the Land Department, he managed the surveying, IT and filing and archiving sections.

Galita was chosen as a candidate for the Shaikh Mohammad Bin Rashid Young Leadership Programme, in which he participated for two years.

He was appointed CEO of Rera in August 2007.

Gulf News spoke to Galita on the many complaints that have been flooding Dubai’s property sector in recent weeks.

Gulf News: What is happening in Dubai’s real estate sector right now? Why are there so many complaints?

Bin Galita: There is a lot of misunderstanding in the market, from the developers’ point of view and from investors’ point of view. And to tell you the truth, developers aren’t being transparent with us.

We are trying to introduce something called “Stop wondering, start knowing”. The real estate market is good for everyone in Dubai and the government has invested money and trust and support, but even with all our efforts at Rera, people are still wondering. They need to go through the proper channels, get all the information before doing anything.

With projects being cancelled all the time, people are concerned that certain developers have run off with their investments. What do you say to this?

There are no complaints; it is all misunderstanding. If someone comes to me saying a developer has taken money, I have to do three things: I check [if] the developer is registered with me, this is the first security check. Then I check [if] the project is approved and I check if he has a trust account.

If these three are in place, I will say relax, your money is safe in one of two places. It is either already invested in the construction of the project or it’s in the trust account. There is no third place. No new project will come to Dubai without a trust account.

How many developers have registered with the Land department?

The latest number of registered developers is 608. And approximately 20-30 per cent is made up of new developers who have not yet launched anything.

Rera now have 300 projects registered and Dh1.4 billion in activated trust accounts spread over 10 banks. But there are also other accounts still under process.

So the delays in construction and project handover shouldn’t be a cause for concern?

Yes, there are delays in the market, but we have to look for the reason. Delays happen all over the world, and especially here with all the projects Dubai has. It’s normal. What is abnormal is to ask a question and never get an answer. This is what annoys investors. We are sending e-mails to these developers and asking questions. They don’t tell us anything.

Are developers doing enough to increase investors’ trust in them?

Developers are not fulfilling doing their social responsibility correctly. They are focusing on things other than their core business, especially the master developers. People have trust in Dubai and most of the developers wouldn’t even exist on the world map if it weren’t for Dubai. They have to take their responsibilities seriously and educate people. They just want the extra buck.

Do you think the real estate sector is stable? Many people come to Dubai to invest in real estate, reap the rewards and leave. This can’t be making the sector more secure.

I want to encourage people to think of long-term investments. Some real estate agents are encouraging people to come from all over the world with one target: Come to Dubai for a month, you can make Dh100,000 and then leave. And this hurts the economy.

What is your vision for Dubai as head of Rera?

This is the only job I’ve had since I came back from the States. And the real estate sector is very important for Dubai’s growth. I’ve witnessed the good and the bad, the start of Emaar, the start of Nakheel, all of them.

With the Strategic Plan 2015, the market is in place, people have so much trust in Dubai, so now is the time to regulate the market.

It would be very easy to put up lots of red tape and just say no, but Dubai’s story is different. Come, be creative, consider it your haven.

I always say that home is a combination of hope and memories, and Dubai can give you both.

Watchdog: Market regulator

Dubai’s Real Estate Regulatory Authority (Rera) was set up in 2007 to regulate the real estate market in Dubai.

So far, 608 developers are registered with Rera. 300 projects are approved and Dh1.4 billion is in trust accounts.

“We want Dubai’s success story to be sustainable and to set an example for other cities around us,” said Galita.

He said anyone who has a problem with the real estate sector can contact Rera or the Land Department and check registered developers, approved projects, trust accounts and contact details online.

© Gulf News 2008. All rights reserved.

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Dubai Property Scandal No. ? – Bonnington Tower

Posted by 7starsdubai on April 29, 2008


This project has been cancelled and bonnigton has returned the money back with 5% intrest on the paid amount.

Reason land dispute

__________________________________________

Apr 25, 2008Gulf NewsDubai:

Property investors in Dubai should be on their guard as two allegedly “unscrupulous property” agents are operating in the emirate, reportedly conning hundreds of thousands of dirhams out of investors both in the UAE and abroad.William Cowe and Mark Emlick are being sought in Dubai and in the UK by furious investors who claim the two men have absconded with their money.Out of three plots in Bonnington Residence in Jumeirah Village South, Strategic Property Investment (SPI) group bought two comprising about 900 apartments.

SPI has its headquarters in Scotland. Emlick is the chairman.Emlick and Cowe allegedly took a 10 per cent deposit on each of the 900 apartments, averaging about Dh579,482 to Dh651,922
per apartment.The men are based in Suite 4211 of the Grosvenor House Hotel in Dubai Marina.

Speaking to Gulf News, Emlick denied all knowledge. “What money? What plots? If someone has a problem, why don’t they call us? We’ve had no calls.”A source told Gulf News that the men’s escrow account application was recently turned down.
The brokerage firm also has not been registered with the Real Estate Regulatory Agency (Rera), Dubai’s property regulator.

There are at least 11 angry investors wanting to track down Cowe and Emlick, saying they have found it impossible to do so.Cowe told Gulf News he was in police custody in Sharjah last week and his passport remains with the Dubai court.

A spokesperson for Bonnington in Dubai said, “We know him [William Cowe] but he’s not associated with us. He’s nothing to do with Bonnington whatsoever.” Mystery also surrounds Carl Addisson – another property broker – who reportedly sold about 50 apartments belonging to Bonnington Residence to a Spanish company.

According to an insider, there is over Dh7 million in proceeds with more than Dh700,000 going to SPI in commission. The connection between Addisson and Emlick and Cowe is not clear.

Addisson is currently in Barcelona “on business” and told Gulf News he ‘wasn’t interested” in speaking.

letters2editor@gulfnews.com
© Gulf News 2008. All rights reserved.

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Governance and crisis control Dubai

Posted by 7starsdubai on April 27, 2008


Posted on 26 Apr 2008

Deyaar Development, a real estate developer that has a reputation for selling off-plan projects within hours of announcing them, or getting its share offering oversubscribed more than 10 times at a time when most regional corporates dreaded the very thought of going public, has suddenly become a subject of speculation, rumours and unwanted publicity.

The company’s predicament seems to have a lot to do with its communication strategy (or lack of it) rather than the underlying case related to an alleged financial misappropriation and the arrest of senior executives. The case is under investigation and the law of the land will take its course.

It throws up key issues in terms of transparency, governance and reporting standards.

Last week, speaking at the Winning Strategies forum in Dubai, former General Electric CEO Jack Welch advised business leaders in the Gulf to deal pro-actively with the media during a crisis. “The minute you expose it (a crisis), talk about it, it moves fast through the system and you’re over it. If everybody knows, and everybody knows how you are dealing with it, you take away all the ammunition,” said Welch.

This is where Deyaar seem to have erred in its judgment. To be fair, it did indeed report the case to the stock market and the regulator, but only after rumours began to spread and reports appear in the press.

Lapses of this nature will have serious implications for the credibility of the company involved, the industry, the market, the regulators and the entire system.

Warning

Delegates at last week’s Corporate Governance Forum (CGF) in Dubai warned that the region has a long way to go before it meets international standards, while its breakneck growth and lagging controls made it prone to corporate failures in the nature of Enron and Barings Bank.

According to a survey of regional institutional investors by HSBC last year, nearly two-thirds of investors (64 per cent) said that poor corporate governance is ‘a significant barrier’ to market performance.

Despite the regional deficiencies in governance standards, it must be recognised that the UAE is one of the first countries in the Gulf that has recognised the urgent need to address the issue. The Dubai International Financial Centre’s (DIFC) Hawkamah Institute is making pioneering efforts to raise the bar. As part of several of its proactive steps, it has recently announced the launch of an environmental corporate governance and sustainability indices for regional markets, in association with rating agency Standard & Poors.

Education is the key to kicking the old habits of stowing away the skeletons. Scandals and failures are the last thing any sensible person would wish for. When they do happen, we have to learn, for the sake of not repeating the mistakes.

According to a survey of regional institutional investors byHSBC last year, nearly two-thirdsof investors(64 per cent) said that poor corporate governance is ‘a significant barrier’ to market performance.

Posted in Dubai | Comments Off on Governance and crisis control Dubai

Al Areifi Tower Dubai Marina faces financial jeopardy

Posted by 7starsdubai on April 25, 2008


By Suzanne Fenton, Staff Reporter
Published: April 25, 2008, 00:45

www.gulfnews.com

Dubai: Adding to the increasingly delicate real estate sector in Dubai, Al Areifi Tower in Dubai Marina is shrouded in mystery after its developer told investors he is in fin-ancial jeopardy, Gulf News has learnt.

Al Areifi Tower was launched three years ago and most investors have now paid the full amount in cash to Saudi developer, Khalid Saud Al Areifi and Partner Real Estate in Riyadh, Saudi Arabia, investors said. The 30-storey tower was half-built in February when investors received faxes and emails from Al Areifi saying he was going through financial jeopardy and therefore couldn’t finish the project.

Khalid Saud Al Areifi informed the investors that he would buy back the units from investors at the price they paid originally, plus 10 per cent interest.

As one owner put it, “If he is facing financial difficulties, where is he going to pay us from?”

It turned out that Al Areifi had sold the tower on to Eskan Properties in Abu Dhabi.

However, Eskan Properties’ finance manager told Gulf News that the tower had been sold on to a private individual one week ago and so is no longer involved. “We sold the tower on again a week back,” he said.

Investors filed a formal complaint to Dubai Land Department two months ago and are waiting for a response.

According to the Real Estate Regulatory Authority (Rera) website, Al Areifi is not a registered developer in Dubai, holds no escrow account and the Al Areifi Tower project is not registered either.

Potential investors should be cautious as Al Areifi is supposedly planning to launch new projects in Saudi Arabia and Bahrain.

No one at Al Areifi’s office in Dubai was available for comment.

Potential investors should be cautious as Al Areifi is supposedly planning to launch new projects in Saudi Arabia and Bahrain.

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Damac Palm Springs Investors still await for the Detail

Posted by 7starsdubai on April 24, 2008


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.

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Dubai Deyaar Former CEO:Others To Blame In Probe

Posted by 7starsdubai on April 23, 2008


original published Zawya

http://www.zawya.com/story.cfm/sidZW20080421000171/lok144503080421?weeklynewsletter&zawyaemailmarketing

Monday, Apr 21, 2008

 

DUBAI (Zawya Dow Jones)–Zack Shahin, who resigned as chief executive of Deyaar Development Co.

Deyaar Development Co (DEYAAR.AI) last week after he was detained amid a financial investigation, told Zawya Dow Jones Monday that he is innocent and that others are to blame for alleged wrongdoing at the company.

“I’m totally innocent,” Shahin, told Zawya Dow Jones in an exclusive interview from a Dubai Police station in the city’s Bur Dubai district, where he is currently being detained amid an alleged embezzlement probe by Dubai authorities.

Shahin, who was unshaven and wearing a plain blue t-shirt, baseball cap and sandals, said he is accused of stealing 350,000 U.A.E. dirhams ($95,000) from DeyaarDeyaar , Dubai’s third-largest traded real-estate company.

“Others are responsible” for the financial irregularities at Deyaar.

Deyaar , he said. Shahin, a U.S. passport holder, said he was currently being held without charge. He spoke to Zawya Dow Jones without his attorneys present.

Lawyers at Shahin’s attorneys Al Sharif Advocates & Legal Consultants were immediately unavailable to comment on the matter when called Monday.

The Shahin investigation threatens to tarnish the reputation of Dubai’s ongoing $300 billion real-estate building boom and question its regulatory standards.

“This case shows the government doesn’t tolerate any corruption and we are committed to tackling corruption and we are completely transparent in this,” a U.A.E. government spokesperson told Zawya Dow Jones Monday.

Arabic-language jail documents seen by Zawya Dow Jones last week said that Shahin’s case was first referred to the police on March 23 and that he was called to the Dubai Public Prosecution office on April 2. His first hearing took place on April 14, according to the document.

When Shahin’s case was first referred to the police Deyaar .

Deyaar ‘s chairman was Mohammed Khalfan Bin Kharbash. Kharbash Monday declined to comment when asked by Zawya Dow Jones whether he was aware of the investigation.

Kharbash resigned from the company on March 29, days ahead of Shahin’s detention.

A spokesman for the U.S. embassy in Abu Dhabi said “We are aware of the situation and are in contact with Mr. Shahin.” The spokesman said he couldn’t comment further citing privacy issues.

 

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RERA Dubai CEO Marwan bin Ghalita interview

Posted by 7starsdubai on April 20, 2008


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Low customer loyalty for Gulf developers – survey

Posted by 7starsdubai on April 19, 2008


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

 

 

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Property Deveolper Dubai Deyaar face Investigation CEO jailed

Posted by 7starsdubai on April 18, 2008


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

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

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

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

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

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

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

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

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

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

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Damac to Honour Original Palm Springs Contract ?

Posted by 7starsdubai on April 17, 2008


original published:  17. April 2007

http://damaconcovered.wordpress.com/

Damac is to proceed with the Palm Springs development at Jebel Ali, and in keeping with the original investor contracts according to a report in Gulfnews today.

original investor contracts according to a report in Gulfnews today.

Bin Mejrin from Dubai Land Department said “Damac has undertaken to implement and accomplish the project according to the contracts with investors and has shown a keenness to abide by the laws and regulations of the department“.

ArabianBusiness.com reports that Hussain Sajwani, chairman of Damac Properties said in a statement emailed to them, “after extensive discussions, Damac Properties is pleased to announce that the Palm Springs project, located on Palm Jebel Ali has been re-instated and will be delivered to customers“.

As mentioned in an earlier post on this website, let’s hope there’s no ‘devil in the detail’ when Damac issues written confirmation to investors.

Most investors, for instance, are of the opinion that the legal action should commence immediately if there is an unreasonable or unacceptable delay in the start of construction of the project.

 

Posted in Dubai | Comments Off on Damac to Honour Original Palm Springs Contract ?

Buy Back Complaints Al Fajer Properties – Damac – Nakheel Comments

Posted by 7starsdubai on April 16, 2008


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

Posted in Jumeirah Business Centre | Comments Off on Buy Back Complaints Al Fajer Properties – Damac – Nakheel Comments

Rera Dubai probes buy-back complaints

Posted by 7starsdubai on April 15, 2008


original published:
 
Business 24/7
by Joseph George April 14, 2007
 
Real estate watchdogs have said they would not hesitate to investigate complaints about developers seeking to buy back unfinished properties from investors.
The warning from Dubai’s Real Estate Regulatory Agency (Rera) came after Damac attempted to shelve plans for the Palm Springs development, prompting an investigation by the agency.
Investors in the Dh300 million waterside project at the Palm Jebel Ali threatened legal action after the developer announced a buy-back programme. Homes in the project were sold more than five years ago but construction has yet to start.

Emirates Business spoke to a number of developers who confirmed they were buying back apartments from investors due to soaring construction costs. The companies – mostly small and inexperienced ones – launched various projects in 2006 but are yet to start work on them.
 
 In the past, developers have bought back flats and then relaunched them at higher prices. But Rera CEO Marwan bin Ghelaita told Emirates Business that the only complaint received so far concerned Damac.
 
“We have not received any other complaint from investors about developers buying back properties. But  if we do, we will definitely investigate the issue,” said bin Ghelaita.

However, several other properties in the emirate, including Al Arefi Marina at Dubai Marina and the A1 Tower at Jumeirah Village South, are reported to have been either put on hold or cancelled. The 50-storey A1 was originally scheduled for completion this year but work has yet to begin.

The increase in building costs is said to be the main reason for the cancellation of projects. Costs in the Gulf have risen by almost 30 per cent over the past year – forcing several small- and medium-sized developers in the UAE to suspend work.

Many projects marketed and sold between 2004 and the first quarter of 2007 for between Dh480 and Dh800 per sq ft are now being sold for Dh1,500.

As a result, projects where construction work is yet to begin or is half-complete have been severely affected, with contractors unable to continue without suffering substantial losses.

A senior sales representative dealing with the 31-storey Al Arefi Marina confirmed to Emirates Business that construction work was on hold, but said the company had yet to decide if it would buy homes back from investors.

“The apartments were sold for Dh800 per sqft but today the rates in Dubai Marina range from Dh1,700 to Dh2,000,” said Mohammed Ali. “We are asking our investors to visit our office and we are working on a solution to the problem. The company has already approached the Land Department.

We have the relevant documents about the increase in construction costs and will show them to our investors.”Officials dismissed speculation the project had been sold to Abu Dhabi-based Iskan. The building was expected to be completed this year, but to date only 18 floors have been built.
 

A senior sales official at Ali Moosa and Sons Contracting Group – which is developing the A1 Tower – said all transactions had been put on hold until the company applied for an escrow account.

Another official at the company said: “At present we cannot reveal any more details about the progress of the construction.”

Developers who spoke anonymously to Emirates Business said they would not hesitate to buy back properties if they could not cope with rising costs.

“There were several problems that prevented us from starting work on one project,” said a developer operating in Jumeirah Village South. “Although the completion date of the project is 2008, construction is yet to begin there. It just does not make business sense to build something for Dh1,000 per sqft that you have sold for just Dh600.”

An EFG Hermes report said construction cost inflation is being driven high by rising costs of building materials as well as labour.
A serious shortage of labour and raw materials and strong demand as well as the mandatory adoption of green building codes and health and life insurance are likely to increase construction costs in the UAE even further this year.

Over the past year the cost of cement, concrete and rebars has increased by up to 30 per cent. Steel prices have risen dramatically from Dh1,983 per tonne in 2004 to between Dh3,800 and Dh4,000 today.

A severe shortage of cement has led to black market supplies being priced at Dh450 per tonne compared with Dh328 from factories in Ras Al Khaimah – which has put a number of projects under pressure. Similarly, tender returns have risen by almost 15.5 per cent over the past year because of the increase in material costs.
 
Imad Al Jamal, vice-president of the UAE Contractors’ association’s higher technical consultative committee, said: “Nobody expected costs to go up so dramatically – the increase has overtaken all our estimates.

“Today it is very difficult to build a quality structure for less than Dh750 per sqft. In 2006 the average cost of construction per sqft stood at less than Dh250. However, today you can only build an average project for about Dh350 per sqft.”

Property consultant Rakhee Desouza said: “Buy-backs have happened several times before. Deposits are handed back and the projects are later relaunched at a higher price.”Strict rules introduced by Rera and the launch of escrow accounts have reined in the erring developers.

But Al Jamal said: “Some developers, however, try to avoid the law by buying back properties. Such a practice should not be encouraged at any cost. Anyway, gone are the days when developers dictated the terms in the market. Today it is the contractors who determine the price of property.”

Posted in Dubai | Comments Off on Rera Dubai probes buy-back complaints

Brand to Brand » Gulf News vs The National

Posted by 7starsdubai on April 14, 2008


Kippreport » Brand to Brand » Gulf News vs The National

Please – be good”, wrote one commentator on the Dubai Media Observer blog. Despite an apparent oversupply of English daily papers, there was a sense of optimism ahead of the April launch of The National (the UAE’s fourth major daily).

That expectations were running high was in part due to the drum-banging of editor-in-chief Martin Newland (he claims The National will bring new standards of journalism), Newland’s broadsheet experience (he edited the UK’s market leading Daily Telegraph), and frustration with the quality of the incumbents.

“The role of The National is to reflect society, help that society evolve and, perhaps most importantly, promote the bedrock traditions and virtues that must be preserved even in times of change,” Newland said, pinning his hopes on the huge resources owner Abu Dhabi Media Company (itself owned by the Abu Dhabi Executive Council) put at his disposal: the new 80-pages broadsheet has assembled a staff of 175 journalists, nabbed from newspapers around the world.
To compete or not to compete?

According to an Ipsos-Stat survey for Gulf News, eight out of every 10 people in the UAE read a newspaper, and almost 80 per cent of the population gets some part of its daily news from the print editions. Besides, the 2007 Advertising Spend Report by Pan-Arab Research Centre states that ad spend in the UAE has increased from $869 million in 2005 to $1.3 billion in 2007 while a market analysis from Cannes Lions expects the UAE’s print advertising expenditure to reach $2.4 billion next year, something the press industry is obviously aware of.

Newland says that he’s not aiming at poaching market shares from Gulf News – which is celebrating its 30th anniversary – claiming that “there’s room in the market for a new title […] and a battle for readers and ad revenues is not likely” and that price is not a “market differentiator”. But we’re not sure Newland wouldn’t enjoy it and comparisons are inevitable nonetheless. In fact, early on, rumor had it that The National was first planed to be called The Nation, but backed down when Gulf News ramped up its “The Nation” section in recent months.

“The challenge is clearly thrown down to Gulf News,” says financial journalist Peter J. Cooper on his Arabian Money blog.
Inside out

The National certainly impressed by its looks, very Guardian style. “Slick design, authoritative typefaces, well structured sections. At 80 pages, it is also substantial,” said Rob Corder, editorial director of ITP Publishing Group. Abu Dhabi’s new daily feels refreshing, easy to read, steering away from the jibberish that Gulf News covers. But more importantly, it is expected to do what no other newspaper in the region, including Gulf News, has done: make a difference, regardless of its relationships with the Abu Dhabi’s authorities.

So The National may tout itself as the country’s “first truly quality national and international newspaper” according to its editor, the industry remains cautious, expecting it to soon discover the realties of press freedom in the region. “His success will be judged on how well he keeps these people off his back,” Frank Kane, once of the Financial Times, now of Emirates Business, said to The Times.

Unfortunately, it seems The National’s first issue showed that it’s “safety first”, according to Corder: “The lead story […] reveals nothing revelatory. The front page of The National’s launch edition has set the tone for what we found throughout that day’s paper, and every edition since.”
A survey conducted by the Dubai Media Observer blog among the profession indicated nonetheless that 22 percent of participants found The National “surprisingly impressive”, while 39 percent answered “Pretty much as expected” and 23 percent “Better than anticipated”.
Slanted

With expats forming a major chunk of the UAE population, addressing non-Arab readers is a major issue. Newland stated The National targets target high-income, English-speaking expats (as well as people from South Asia, Europe and the Americas). But according to its Ipsos-Stat survey, Gulf News commands 51.2 per cent of this readership. Besides, “The problem is that The National is inevitably slanted towards news from Abu Dhabi, and the capital is a far less lively and interesting place than neighboring Dubai. The National is therefore inevitably going to be more boring than Gulf News,” says Cooper.

Gulf News’ survey showed further that above two-thirds of Gulf News readers are based in Dubai and Abu Dhabi, The National’s home market. Whereas ADMC’s newborn feels more like an English-language Emirati paper rather than a paper for (and by) residents of the UAE.

“‘The National’, ‘The Nation’ etc. Still don’t like that kind of newspaper name. Rather flies in the face of Newland’s claim that he wants a regional type of publication,” adds one blogger on Dubai Media Observer.

It may be too early to tell if The National will live up to its expectations and if Gulf News should worry, but as for now, in Corder’s words, “The National is not a newspaper that is going to change the reading habits of the UAE overnight. People satisfied with market leader Gulf News, will stick with what they have.”

Posted in Dubai | Comments Off on Brand to Brand » Gulf News vs The National

UAE to censor Internet

Posted by 7starsdubai on April 14, 2008


One of the two major ISP’s in the United Arab Emirates is to begin censoring the Internet immediately.

du, which is 40% owned by the Federal government, will commence blocking non-conforming sites on Monday.

du subscribers were notified mid-afternoon Sunday by a general-circular text message to their cell phones, which said ‘sites that do not conform to the moral, social and cultural values of the UAE,’ will be blocked as of Monday.

Separately, du said in a statement, ‘It is our constant endeavour to maintain the perfect balance between ensuring that all our customers’ requirements are met, and that we comply with all the guidelines of the TRA (UAE Telecommunications Regulatory Authority), including those on Internet content filtering.’

‘The World Wide Web offers us great opportunities to get and share information and to communicate. However, it is imperative that when making use of this technology for its enormous benefits, we respect the moral, social and cultural values of the United Arab Emirates,’ the statement said.

‘du will be blocking all content that is not in line with these values, effective from 14 April 2008,’ the du statement added.

Posted in Dubai | Comments Off on UAE to censor Internet

The next case Areifi Tower Dubai Marina – Mystery surrounds luxury Dubai tower

Posted by 7starsdubai on April 14, 2008


original published http://www.dubainews.net/story/347851

Dubai News.Net
Saturday 12th April, 2008

Mystery surrounds the development of the Al Areifi Tower at Dubai Marina.

The 30-storey development of luxury residential apartments has been under a cloud for several weeks as reports have circulated that the construction has been stopped, abandoned, or delayed.

The developer, Khalid Saud Al-Areifi & Partner Co., of Riyadh Saudi Arabia, has reportedly been approaching investors who bought apartments off-the-plan, in a bid to buy the apartments back.

According to investors they are being told construction on the site has been stopped and will not resume.

Investors report receiving telephone calls and faxes from the company.

We have sighted a letter faxed to an investor from Khalid S. Al Areifi which states the project has been stopped, and the company ‘cannot complete the project.’

We spoke to the company who confirmed this, and recently a story was published to this effect.

It now transpires the company has not stopped construction at all. Several questions were emailed to the company to seek clarification, however they have gone unanswered.

On Saturday one of our journalists visited the site and found construction in full swing. The site has cranes and a stream of workers busily working on the building which has already been built to the nineteenth floor.

We contacted the builder, Buset Contracting on Saturday, who confirmed there has been no disruption to the construction. It is going ahead ‘full steam,’ he said. He confirmed the development had attained the 19th level, and there were eleven floors remaining. He said it would take another 15 to 16 months to complete.

The spokesman for the building company would not comment on reports the construction had been stopped, saying such questions should be directed to the developer.

Al Areifi, sold apartments in the complex off-the-plan around five years ago. In an unusual twist it discounted prices by 25% to sell the apartments on the basis of full payment being made upfront.

The prices of the apartments today outweighs those they were sold for, but this applies with almost all projects in Dubai.

Construction costs are increasing rapidly, however to date developers have been delivering pre-bought property without incident, although in most cases way behind schedule.

Al Areifi appears to be involved in trying to buy back apartments at their original cost, notwithstanding they have been holding full payment for several years. Falsely advising investors the project has been stopped, and will not be completed will likely incur the wrath of the authorities. Investors have long maintained several companies use misleading advertising and selling techniques in the high-pressure property industry in Dubai.

Another developer, the Dubai-based Damac Properties has been criticised in recent weeks for recently abandoning a project marketed five years ago.

The company said its Palm Springs residential resort on the Palm Jebel Ali was being cancelled because of changes on the site by the master developer, Nakheel.

Naheel, however, announced it had made no such changes and was unaware Damac was withdrawing from the development.

Angry investors, many from the UK, have disrupted Damac project launches, stormed their sales offices, and threatened a class legal action against the company. Worse still, Damac has suffered from the bad publicity, at a time when it is opening new international offices and launching major new projects.

Our advice from Damac is that it is currently reviewing its decision on the Palm Springs project.

Adding to the Al Areifi affair, and the Damac debacle, has been the extraordinary delays in the completion of property projects in Dubai, some spanning several years.

Both large and small developers are being caught up in the delays, as chronic labour, materials and resources shortgages have crippled completion schedules.

Comments: original Skyscrapercity
From DubaiInvestor

Calling Dubai Land Department, RERA, will not help. RERA do not enforce the property laws. Enforcement of Dubai’s property laws is done through the courts. RERA does not handle court cases. The head of RERA has said publicly that “people who have problems with developers should have read their contracts better or used legal help etc “. Calling or emailing RERA is a waste of time. Get as many fellow investors together and consult an attorney.”
From Hishamds

Getting investors from all over the world together is not as easy as it sounds,we are from different worlds,i suppose all we have to do is watching from distance in the mean time and make sure that the construction is continuing ,until it stops for real then we make our move. agree? “
Comment from Elb

The guy I talked to in Dubai Land was Mr. Emad Eldeen Farouq (Legal Consultant in Dubai Land) he is the one who told me to send a complaint and gave me all the info. his email is – farouq@dubailand.gov.ae -. Not sure though about the nationality of ISKAN

I think my next move is to visit the site in Dubai and consult/hire a lawyer (they are not cheap in UAE)

Thanks”


Posted in Dubai | Comments Off on The next case Areifi Tower Dubai Marina – Mystery surrounds luxury Dubai tower

The Case Alexandre Robert

Posted by 7starsdubai on April 13, 2008


original published GulfNews

http://www.gulfnews.com/nation/Police_and_The_Courts/10203733.html

By Bassam Zaza, Senior Reporter

Published: April 07, 2008, 09:44

Dubai: The highest court in Dubai on Monday confirmed the 15-year jail term handed to two Emirati men who kidnapped a 15-year-old French boy and had sex with him against his will.

The Dubai Court of Cassation turned down the two men’s appeal for leniency and upheld the ruling.

The case now moves to Dubai Civil Court which will be looking into the victim’s Dh15 million compensation claim.

During Monday morning’s hearing, the Cassation Court confirmed I.M., 18, and A.K., 35, were guilty of kidnapping the 15-year-old French boy, A.R., and having sex with him against his will in a desert area in Al Barsha.

A.K’s reports confirmed he had Aids and Hepatitis. Earlier this year, the victim’s medical reports confirmed that he had not contracted either disease.

The Public Prosecution charged I.M. and A.K. and their compatriot, I.S., 17, with deception and kidnapping the boy and his compatriot, F.K., 16

They were charged with forcefully undressing A.R., threatening him with a knife before having sex with him, while F.K. was kept outside the vehicle.

A.K was solely charged with threatening to kill the victim with a stick.

The Dubai Court of Appeal recently sentenced I.S. to three years in jail after he was found guilty as charged.

Records said the trio picked the boys up from a mall. A.R. testified one of the defendants snatched his cell phone from him when he dialled 999 shortly before he was forced to have sex with them.

“A.K. who carried a billiard stick and I.S. who carried a pocket knife asked me to step down from the car, but I refused. They switched off our phones and took them away. I.S. threatened to rape my mother, burn my parents and our house meanwhile I.K. pulled my friend out of the car powerfully.”

The victim stated that he was beaten, forced to remove his clothes before the defendants sodomized him successively.

“One of them even forced me to have oral sex with him,” he added.

F.K. confirmed the victim’s testimony and said: “When I returned to the vehicle, my friend looked petrified and quivering. I saw him carrying his underwear in a small bag. The suspects dropped us off at Jumeirah and the victim, who was crying angrily, told me what happened in the cab.”

Lawyer: UAE takes firm stance

The UAE has a firm standpoint against crimes of a sexual nature, said a top lawyer in light of the final ruling of the French boy’s sodomy case which was given on Monday.

“Yesterday’s irrevocable verdict [15 years imprisonment] shows that the UAE has a firm standpoint on crimes of rape and sexual violence and that we do not tolerate such crimes irrespective of the nationalities of the individuals involved in the crime,” Dr Habib Al Mulla, of Dr Habib Al Mulla and Co, Advocates and Legal Consultants, told Gulf News.

Commenting on the ruling, Dr Al Mulla who is the Dubai Government spokesperson in this case, said: “The verdict reconfirms our position that we have been putting forward from the beginning of this case that we need to let the system work. This judgement proves beyond any doubt that the UAE in general, and Dubai in particular, enjoys an efficient, reliable and trustworthy judicial system which is capable of dealing with issues of this nature.”

Dr Al Mulla expressed his gratitude that the judgment “has put an end to this saga that should not have existed from the beginning.”

He stressed that the UAE’s judicial system is independent and treats all parties equally before the law.

In an earlier statement Dubai’s Attorney General Essam Eisa Al Humaidan said: “Our role is to enforce the penal code and prosecute criminals who commit such terribly awful crimes which are considerably strange to our society. We ordinarily ask the court to apply the stiffest punishment applicable to combat all sorts of crimes and criminals. The judicial system works to protect the interests of all the UAE population including expatriates and locals.”

Posted in Dubai | Comments Off on The Case Alexandre Robert

ACI Dubai Fond Anleger Warnung

Posted by 7starsdubai on April 12, 2008


Dubaifonds, der Alternative Capital Invest GmbH.

Das Immobilienprojekt umfasst 45 Stockwerke oberirdisch, 3 weitere Ebenen sind unterirdisch als Tiefgarage ausgelegt. Im Erdgeschoss bis zum 13. Stock werden Büroflächen in unterschiedlichen Größenordnungen angesiedelt.

Von dem 14. bis zum 23. Stock werden 1-Schlafzimmer-Apartments, Vom 24. bis zum 31. Stock 2-Schlafzimmer-Apartments, vom 32. bis 35. Stock 3-Schlafzimmer-Apartmens, vom 36. bis zum 41. Stock 4-Schlafzimmer-Apartments und vom 42. bis zum 45. Stock Duplex Penthouses voraussichtlich angesiedelt. Zusätzlich sind 529 Parkplatzeinheiten geplant.

Das Grundstück des Towers ist direkt in Dubailand gelegen.

Die Beteiligung läuft voraussichtlich bis zum 31.12.2009

Fondsentwicklung:

Derzeit sind nur unzureichende Informationen über Entwicklungsstand des Projekts vorhanden.

In zahlreichen Foren und nach zahleichen Expertenmeinungen wird die Erfolgsaussicht der Dubaifonds und im speziellen des III. DUBAI Tower KG sehr kritisch gesehen.

Teilweise wird von einem dilettantischen Auftritt gesprochen und davor gewarnt.

Aus unserer Sicht bestehen sowohl hinsichtlich des Kaufs des Grundstücks für die Fondsgesellschaft als auch hinsichtlich der Realisierung dieses Fonds erhebliche Unklarheiten und Risiken im Raum.

Zudem muss die Steuerliche Berechnung mit Blick auf das aufgelaufene Doppelbesteuerungsabkommen zwischen den Vereinigten Arabischen Emiraten und Deutschland als zusätzlicher Unsicherheits- und Risikofaktor gewertet werden.

Fondsbewertung:

Aufgrund der zahlreichen Unsicherheiten und erheblichen Risiken an diesem Fonds raten wir Anlegern des III. DUBAI Tower KG dringend mit der Deutschen Anleger Stiftung Kontakt aufzunehmen.

Die Deutsche Anleger Stiftung hat bereits Ihre Korrespondenzanwälte mit der Begutachtung der III. DUBAI Tower KG beauftragt
.

Wenn Sie dieses bestellen möchten wenden Sie sich bitte an:

Kontakt@DeutscheAnlegerStiftung.de

Oder

Deutsche Anleger Stiftung

Stichwort: III. DUBAI Tower

Pettenkoferstr.40 80336 München

Posted in ACI Immobilienfonds, Dubai | Tagged: , , | Comments Off on ACI Dubai Fond Anleger Warnung

Dubai – Drohen erneut Millionenverluste für Immobilien Anleger – Investoren bangen um 70 Millionen Euro-Staatsanwaltschaft ermittelt

Posted by 7starsdubai on April 11, 2008


German Investors facing 70 Million Euro losses Dubai-1000-Hotel Investment Fund

original published:
DieWelt
http://www.welt.de/welt_print/article1886858/Statt_versprochener_Luxusherberge_nur_eine_Baugrube_im_Wstensand.html

10. April 2008, 04:00 Uhr
Von Richard Haimann

Dortmund – Den Anlegern seines Dubai-1000-Hotel-Immobilienfonds versprach Georg Recker hohe Renditen im Wüstenemirat. Jetzt ermittelt die Staatsanwaltschaft Dortmund gegen den Diplom-Finanzwirt aus Hamm wegen Betruges. “Wir gehen einem Anfangsverdacht nach”, sagt Oberstaatsanwältin Ina Holznagel. Nach Schätzungen von Fondsanalysten könnten bis zu 70 Mio. Euro Anlegerkapital im Feuer stehen.

Mit dem aufgelegten Fonds wollte Recker insgesamt 142 Mio. Euro bei Privatanlegern einsammeln und in ein noch zu errichtendes 1000-Zimmer-Hotel im Emirat investieren. “Den Anteilszeichnern hatte der Initiator Ausschüttungen von neun bis zwölf Prozent pro Jahr in Aussicht gestellt”, sagt der Anwalt Jens-Peter Gieschen der auf Kapitalanlagerecht spezialisierten Bremer Kanzlei KWAG, die mehrere betroffene Anleger vertritt. Ursprünglich sollte das Hotel bereits im vergangenen Jahr fertiggestellt sein. “Doch bislang existiert dort nur eine Baugrube”, berichtet Gieschen, der kürzlich selbst vor Ort war. Recker selbst war für eine Stellungnahme gestern nicht zu erreichen.

Dubai war in den vergangenen Jahren Schauplatz eines gigantischen Immobilienbooms. Einheimische Gesellschaften haben in den vergangenen Jahren gigantische Projekte in dem nur 3885 Quadratkilometer winzigen Staat aus dem Wüstenboden gestampft. Darunter künstliche Inseln in Form einer Palme und mehr als 150 Wolkenkratzer, darunter den 321 Meter hohen “Burj al Arab”, das erste Siebensternehotel der Welt. Mit den Mega-Vorhaben will Kronprinz Mohammed bin Rashid al-Maktoum Dubai zu einem Touristenmekka im Nahen Osten wandeln und damit für die Zeit vorsorgen, wenn die Ölquellen im Emirat versiegen.

full story http://www.welt.de/welt_print/article1886858/Statt_versprochener_Luxusherberge_nur_eine_Baugrube_im_Wstensand.html

Posted in Dubai | Comments Off on Dubai – Drohen erneut Millionenverluste für Immobilien Anleger – Investoren bangen um 70 Millionen Euro-Staatsanwaltschaft ermittelt

Second Dubai Damac Project – Haz Tower Business Bay canceled – Another U-turn…. (Damac project now back on track ?)

Posted by 7starsdubai on April 11, 2008


United Arab Emirates: Thursday, April 10 – 2008 at 10:13

UAE-based property developer Damac yesterday said its Haz Tower project in Dubai’s Business Bay is back on track following complaints by investors, reported Gulf News. After learning that the developer had planned to cancel the project, around 10 investors yesterday met officials at the Land Department to complain against the company. Following the meeting, Niall McLoughlin, senior vice-president of corporate communications at Damac, said the project is ‘definitely going ahead’. This latest showdown arises just a week after Damac came under fire for cancelling the Palm Springs project on the Palm Jebel Ali. Damac, the largest private sector developer in the UAE, has launched 80 projects but handed over only two so far.

Posted in Dubai | Tagged: , , | Comments Off on Second Dubai Damac Project – Haz Tower Business Bay canceled – Another U-turn…. (Damac project now back on track ?)

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

Posted by 7starsdubai on April 10, 2008


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.

Posted in Dubai | Tagged: , , , | Comments Off on Damac Properties appears poised to formally announce the reversal of its decision to axe the Palm Springs project, according to investors.

Dubai angry Damac Investors launched Website Damacuncovered

Posted by 7starsdubai on April 10, 2008


When Damac Properties unveiled its slick new sales office in central Dublin on Valentine’s Day, it tried to sweeten up Irish property lovers by promising a free Bentley for every apartment they bought in Dubai. They were even entered in a draw to win an island in the Caribbean and a private jet.

But it was all too late: the Irish love affair with overseas property was already over. Damac, which predicted in February that it would book €100m in sales in Ireland this year, closed its doors last week with none of the fanfare that signalled its arrival.

The Middle East’s largest private developer — a purveyor of glitzy skyscrapers overlooking Dubai’s gold-plated shopping malls, golf resorts and beaches — made its foray into Dublin after seeing interest from Irish investors double every year between 2004 and 2007. Peter Riddoch, Damac’s chief executive, claimed that 99% of customers were so confident about the region that they never even made the trip to Dubai to view their acquisitions.

Richard Spence, director of myoverseasproperty.ie, said: “You should never sign anything and buy off plans until you’ve been to the country and walked on the site, but unfortunately a lot of Irish people did. Back in the heyday, just three years ago, inexperienced Irish investors were so swayed by what they read about overseas property in the press and by their neighbours buying abroad that they didn’t do their research.”

source Timesonline UK continue reading……

The Website of the Damac Investors is here…….

Posted in Damac, Damac Palm Springs Jebel Ali Palm, Dubai Property dispute, Dubai Real Estate Scandal, Nakheel, Palm Jebel Ali Dubai | Tagged: , , | Comments Off on Dubai angry Damac Investors launched Website Damacuncovered

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

Posted by 7starsdubai on April 7, 2008


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.

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Damac Palm Spring collapse shakes investor confidence

Posted by 7starsdubai on April 5, 2008


original published:
http://www.arabianbusiness.com/515467?start=0

Arabian Business by Conrad Egbert on Saturday, 05 April 2008

With investors threatening legal action over Damac’s cancelled Palm Springs project, Conrad Egbert takes a looks at how the outrage is threatening investor confidence.The cancellation of Damac’s Palm Springs has shaken confidence among some investors in the Gulf real estate market.And it has also drawn attention to how tight the market is becoming in the region.

An incident in London last month highlighted the extent to which property investors are losing faith in the market.Angry investors in Damac’s axed Palm Springs project stormed the company’s launch of Jumeirah Village South at the Carlton Hotel in Knightsbridge, circulating flyers to potential investors with negative publicity on the Palm Springs story.An excerpt from the flyer obtained by Construction Week read: “We, the Palm Springs Investors Group, will be taking Damac to court in order so that Damac either reverses its decision and proceeds with constructing Palm Springs on Palm Jebel Ali, or it provides a like-for-like apartment at the same cost, terms and conditions on a new Damac development on Palm Jebel Ali, or it provides financial compensation at current market rates for Dubai Waterfront/Palm Jebel Ali.”We attended similar evenings to this launch and were duped into buying from Damac. We trusted and believed in Damac but strongly warn that you do not make the same mistake as us.”Damac has said it cannot build the project on the plot Nakheel reallocated on Palm Jebel Ali and has instead written it off as a ‘force majeure’.According to UK investor Robert Miller, who bought a unit in Palm Springs in 2003, investors could stand to lose an estimated US $296,000 (AED1.09 million) because of the cancellation.Last week, a letter from The Palm Springs Investors Group, which is made up of more than 50 members, was sent to Damac, demanding that the axed property be constructed on the reallocated plot or else the company would face legal action.Nakheel has also been pulled into the drama with some investors suggesting that if the reallocated land is not good enough for the construction of Palm Springs, and the ‘force majeure’ clause is accepted, then Nakheel should arrange compensation for them.But Nakheel has expressed surprise over Damac’s stance, with the company’s Palm Jebel Ali managing director, Marwan Al Qamzi, saying:”Our last interaction with Damac took place in February of this year and was one of positive engagement, which left us with the firm view that Damac was proceeding with the project. We are extremely disappointed to have heard the news of the cancellation through the media.

The 25-storey Palm Springs project had originally been planned for completion by late 2007.Homebuyers were already believed to be angry over repeated delays, contractual issues and complaints of poor customer service by Damac.”It’s quite clear that this is just a business move by Damac,” said Miller.

“They’ve realised that the land they sold us five years ago will now go for almost three times the price, and so they’ve decided to pay us back our money and resell it at a much higher rate.”In other words, we just lent them our money for them to build a building for someone else. This is going to be very damaging for the Dubai property market and the strongest publicity is always by ‘word of mouth’; they should realise that.Miller added that in September 2006, Damac was offering 10% interest on money invested in an attempt to get investors to pull out of the project.”So this hasn’t just happened. It’s been thought out and has been planned. And if there is planning involved, then how can it be a ‘force majeure’ under any circumstances?Niall McLoughlin, senior vice president – corporate communications, 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.

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International City Residents complain about lack of facilities

Posted by 7starsdubai on April 5, 2008


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.

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?



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Dubai Lagoon Schon Properties – Signs of Trouble

Posted by 7starsdubai on April 5, 2008


March 2008
Schon Properties no Escrow Account ?

Signs of trouble for those who purchased through 3D Venture

Schon Properties has been calling 3D Venture customers saying they are canceling their contracts and will sell these apartments themselves at a higher price.

Will keep you guys updated as I hear more on this.
_________________________________________________________

original posted from
3d Venture to forum skyscrapercity / May 2007
http://www.skyscrapercity.com/showthread.php?t=292680&page=15

This post maybe useful for all Dubai Lagoon customers that have purchased their future homes from 3D-Venture. I am an employee of 3D-Venture. I work as a sales agent. I am personally responsible for the sale of many Dubai Lagoon apartments to customers.To date, Dubai Lagoon remains an attractive proposition for all customers. Sure, there have been delays in starting construction. And it remains uncertain when full fledged activity will start on site. Nonetheless, the location, payment plan, amenities and all other features of the project still attract customers to this development.What people find unusual is the developer’s segregation between their own customers versus customers that have purchased their apartment (and in some cases multiple apartments) from 3D-Venture. To me, there seems to be no reason for this distinction. Customers that have purchased their apartments from 3D-Venture have in fact purchased apartments from the Developer. 3D-Venture merely acted as their agents. The customers have signed an agreement with the Developer. Nowhere in the agreement is 3D-Venture even mentioned.3D-Venture does not receive updates from the Developer on new completion date of the different phases of project as a part of their regular communication. We do not hear of special arrangement and/or flexible payment plans direct from the Developer. We are left in the dark; perhaps by mistake, but more understandably because 3D-Venture is not a “customer” per se of Dubai Lagoon.I remember two occasions when my potential customers that went along with me were denied access to the model-apartment on display at the construction site. Also, I have heard stories about customers wanting to visit the model-apartment, who made the effort of travelling all the way to the construction site, were denied access on some flimsy pretext that they needed permission from the developer to make such visits. I am not sure if this treatment is restricted to certain types of customers, but I am sure “3D-Venture” is not prominently tattooed on the foreheads of the people that visit the construction site. The same lack of concern seems to be evident on delays in signing the sale/purchase agreements and parking lot assignments for some of our customers. I could act paranoid and think that the developer is working against a subset of its customers; however I choose to be proactive and inform the Developer that it needs to follow a more generalized and equally balanced standard for all its customers.Personally, I feel mused that the Developer’s representative brushes aside questions and queries of their customers that have purchased Dubai Lagoon Property thru the efforts of 3D-Venture. As if to say that 3D-Venture is responsible for construction and delivery of the buildings. This is not the case. And, I do not think that this approach by the Developer will necessarily solve the real problem.The main concern of the customers (whether they purchased direct from the Developer, through their agents such as Better Homes, or through 3D-Venture) is why do they need to continue with a payment plan that is now officially (as admitted by the Developer) outdated. The developer has been wise to allow leniency for some customer. However, the Developer has refused to acknowledge the same concerns from their other customers. I am sure there is wisdom here but it escapes me.I am aware of a couple of meetings between the principals of the Developer and 3D-Venture to address this very issue. I am also aware that nothing useful came out of those meetings. I cannot imagine a situation where the developer will offer flexibility on the payment plan to 3D-Venture, and 3D-Venture will turnaround and refuse to forward the same to the customers that have purchase through its office. 3D-Venture has all the advantage in offering the same flexibility to all the customers.I sincerely believe that the Developer will have to face reality that regardless of the origination of sale, a Dubai Lagoon customer is a Dubai Lagoon customer. No ifs and buts about it. And, since there is a delay and the Developer is willing and able to offer concessions to its customers, those concessions should be offered across the board to all its customers.I present these views on a personal level. The views of my employers (3D-Venture) and those who consider themselves owners and/or investors of this project may differ. My employer has not induced me to write this opinion. I am not sure when 3D-Venture will present its views on this forum. But I am sure it will not say anything unless the Developer authorized it to say something. If you are unable to read between the lines, this means the buck stops at the developer and not with Better Homes or 3D-Venture.Syed Arshi Mehfooz

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Helpfull Adresses Complaints

Posted by 7starsdubai on April 5, 2008


Letters of Complaints Dubai Property Investors
Write to:

email RERA at Marwan@dubailand.gov.ae
send a written complaint, accompanied by a copy of the following documentation:- signed Contract- receipt for all payments made to the Developer including reservation fee- cancellation letter from the Developer- any other letters or documents you may hold which supports the case

The letter of complaint should be addressed to Mr Marwan Ahmed Bin Ghalita, Chief Executive Officer, P O Box 1166, Dubai,UAE

All letters and scanned documents should be emailed to Khawla Madani, Legal Department, kmadani@dubailand.gov.ae
Khawla MadaniSenior Legal OfficerP.O. Box 1166Tel : +9714 2222253 Direct: +9714 2030183 Fax: +9714 2030114URL: www.rera.gov.ae

HH Sheikh Mohammed bin Rashid Al MaktoumWebsite: http://www.sheikhmohammed.co.ae/Email comments to HH here

Dubai Ministry of Finance & IndustryP.O.Box: 1565Tel: 04 3939000Fax: 04 3939738Email: mofi@uae.gov.aeMinister of State for this department is H.E. Dr. Mohammed Khalfan bin Kharbash

Dubai Government’s Department of Tourism & Commerce Marketing11th Floor, National Bank of Dubai BuildingBaniyas RoadDeira
Dubaiecomplaints@dubaitourism.ae mailto:info@dubaitourism

Government of Dubai Real Estate DepartmentP.O.Box 23073DubaiU.A.E.Tel. : 04-3986666Fax : 04-3988111

Dubai Quality GroupP.O.Box: 9278UAETel : (971-4) 343 1950Fax : (971-4) 343 1970E-mail : info@dqg.org

Government of Dubai Land DepartmentTel: 0097142222253Fax: 0097142222251Email: info@dubailand.gov.ae

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Nakheel distances itself from Damac – Jebel Ali Palm Project Palm Springs

Posted by 7starsdubai on April 4, 2008


source Gulf News

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 unavailable for comment.

Read Also …. Glitzy Dubai Developer closes the door……..

Posted in Damac Dubai, Damac Palm Springs Jebel Ali Palm, Dubai, Dubai Property Investors, Dubai Real Estate Scandal, Nakheel, Palm Jebel Ali Dubai | Tagged: , | Comments Off on Nakheel distances itself from Damac – Jebel Ali Palm Project Palm Springs

Finacial Times – Dubai developer faces investors’ legal threat

Posted by 7starsdubai on April 4, 2008


original published Financial Times
Wednesday, Apr 02, 2008

A group of property investors is threatening legal action against a big Dubai developer over the sudden cancellation of a residential project on Palm Jebel Ali, the second man-made island off Dubai.
DamacProperties told investors last month it would axe the Palm Springs project, which was first released for off-plan sales four to five years ago. The Dubai-based developer has offered to repay the initial cost with 6 per cent interest per year or to transfer the investment into another Damac
Properties project.

The looming clash between disgruntled investors and a big Dubai developer threatens to undermine confidence in the buoyant Dubai property market, which has soared since 2002, when foreigners were allowed to own real estate in the regional business hub.
About 70 investors, mostly from the UK, have clubbed together to lobbyDamacProperties.

Nakheel , the state-owned master-developer building the Palm islands, and the Dubai government. Some buyers paid premiums of up to 50 per cent in the secondary market, rather than buy direct from the developer.

DAMAC Properties, after selling off the apartments years ago, now faces higher costs on materials and labour amid the highly inflationary environment.
The aggrieved investors say DAMAC Properties may seek to launch a new project on the plot, selling to new investors at vastly inflated prices.

The Palm Springs Investors Group in a letter to DAMAC Properties
has asked it to confirm the cancellation by April 11 “at which time we will take legal advice with a view to commencing legal proceedings against you”.

DAMAC Properties has targeted sales from several offices across the UK, backed by high-profile advertising campaigns. Only two of 38 advertised residential buildings have been delivered to customers, say real estate analysts, but around a dozen more are scheduled for completion this year.

DAMAC Properties declared force majeure in a letter to owners last month, saying it had been forced to axe the 25-storey building – originally scheduled for completion in 2007 – as Nakheel had assigned the developer a different plot on the reclaimed, palm-shaped island. “The Palm Springs development cannot be situated on the re-a llocated plot and as a result the project has been cancelled,” Niall McLoughlin, of Damac DAMAC Properties , said in a statementNakheel
claims it told the company 10 months ago about the plots’ redesign.
By Simeon Kerr in Dubai
© Copyright The Financial Times Ltd 2008. Privacy policy.

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The Sorry State of Real Estate in the UAE

Posted by 7starsdubai on April 4, 2008


original published http://blogs.zawya.com/sultan/080402073325/
The Sorry State of Real Estate in the UAE (Uncensored version)
by Sultan AL Qassimi

Posted: 02-Apr-2008

It seems like not a single day can pass without yet another extravagant announcement of a new real estate project that defies gravity, the law of nature and the laws of finance.

There is something to be said about the lack of government supervision that extends from allowing firms to issue press releases that are clearly stretching the truth to broken promises that start from delivering these real estate projects late or never, to jeopardizing the reputation of the UAE by mistreating foreign labour.

A curious case comes to mind with Tameer a local development company that claims to have 300 billion dirhams under development[1] which roughly accounts for 75% the GDP of Abu Dhabi. The firm also announced a project “in excess of $20 Billion” in Libya[2] which has a GDP of $36 Billion[3]. Does this make sense to any one as it clearly escapes my understanding? How does the government allow such press releases, and how does the local press publish it without verification. To put things into perspective, this is similar to someone claiming to have a project “in excess of $7 Trillion” in the USA (roughly 55% of the GDP). Damac Properties, which is one of the few homegrown brands to go regional claims to have a portfolio “in excess of $40 Billion[4]”. This is clearly an example of a company that bit off more than it can chew, a local news report found that out of fifteen advertised projects in Dubai that the company is developing “all are running substantially behind their projected completion schedules”[5] to the extent that investors were threatening to withhold future payments to the developer.

Oddly one of the few publicized cases of real estate developers fleeing the country after selling off plan projects to unsuspecting investors to the tune of AED 14 million has yet to be resolved[6].Copy Cats

Another issue plaguing the real estate sector that is quite interesting is the copy cat culture that is about to make our beautiful city of Dubai into a Sameville mini-me of other cities around the world. There is more than one project that promises to replicate the Eiffel Tower of Paris for example, as if copying individual landmarks wasn’t enough one project even threatens to replicate the entire city of Lyon in Dubai[7]. A contender for the most profuse project award has to be the Falcon City of Wonders that promises to replicate “the Pyramids, the Eiffel Tower, the Taj Mahal, the Great Wall of China, and the Leaning Tower of Pisa”[8]. Tatweer also has its own replication process going on within the Bawadi project. Don’t people realize that what has made Dubai great is the spirit of entrepreneurial originality? Shall we wait for a project that promises to replicate the entire city of Abu Dhabi in Dubai or maybe the holy shrine of Mecca?
Labor Pains

A different case of construction woes emerged in the Fall of 2007 when 40,000 employees of Arabtech went on strike over low wages that according to the official UAE news agency “turned into riots” with stones being thrown at the police[9], this situation could have been explosive for the entire country if one considers that the size of the Dubai police force is around 15,000[10] personnel, i.e. they were outnumbered three to one. The management of Arabtech must be proud now that they have reported a 115% increase in profits to $93 Million in 2007[11] despite the serious damage to the UAE’s reputation and social security. Basically because the company didn’t meet the laborers demands for AED 90 million increase per year (a sizeable 25% of their profit) the UAE was negatively featured on the front pages of various newspapers, websites and TV stations around the world as a country that doesn’t treat it’s “guest workers” fairly, is this worth the damage? Other Emirates Sharjah’s real estate development qualifies to be the least planned in the UAE, with problems in parking, electricity cuts, water stoppages and general frustration on the sorry state of the roads a daily headline in the local press all of which seem to be on course to staying the same. Abu Dhabi should pay attention to the plight of its sister emirates before launching humungous projects inside the relatively calm capital island that will result in traffic chaos similar to what Dubai is experiencing today.

How do we even account for such a fabulous collective failure of engineering imagination and planning? Clearly the UAE authorities were not prepared for such a fast pace of development. For a country that proudly claims to have $500 Billion worth of real estate projects under development[12] it is high time for the federal government to finally enact serious nation-wide laws and regulations that will set this haphazard industry straight.

Posted in Dubai | Comments Off on The Sorry State of Real Estate in the UAE

Palm Springs investors face millions in losses

Posted by 7starsdubai on April 1, 2008


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

Devastated investors in Damac Properties’ axed development on the Palm Jebel Ali are facing millions of dirhams in losses, one of the project’s investors has told ArabianBusiness.com.

The Dubai-based developer recently cancelled the much-delayed Palm Springs project five years after launch, citing “redevelopment of the plots”.

The developer has offered investors compensation of 6% annual interest on the original purchase price and the option of transferring their investment to another project with a 15% discount

Many buyers have snapped up Palm Springs units on the secondary market, meaning off an investor and not directly from the developer, paying up to a 50% premium on the original purchase price.Prior to the cancellation of the project, Palm Springs units were estimated to be worth more than double the original purchase price, according to investors.Investors are now threatening to take Damac to court if it does not reverse its decision and continue with construction.Nearly 60 UK-based investors in the project have formed a group to take on Damac, giving the developer until April 11 to reverse its decision or face legal action.London-based investor Karl Brown told ArabianBusiness.com members of the group were facing average losses on their investment ranging between 300,000-600,000 dirhams ($81,000-$163,000), depending on when they purchased their unit.Brown said he bought his Palm Springs apartment on resale in March 2006 for 1.5 million dirhams and believes the property is now valued at more than 2.2 million dirhams.However, he will only receive the original purchase price, estimated at about 1.1 million dirhams, plus 6% interest for each of the five years since the project’s launch.Brown said Damac had told him it was not the developer’s contractual obligation to refund money that was paid on resales.Brown said UK investors’ losses were compounded by the rising value of the British pound against the dirham.Many investors purchased their units when the exchange rate was 6.4 dirhams to the pound, while the exchange rate is now around 7.3 dirhams to the pound, he said.Brown said the group, the Palm Spring Investors Group, was appealing to Dubai’s Real Estate Regulatory Authority (Rera) and Nakheel, master developer of the Palm Jebel Ali, for assistance with the dispute.Damac was not immediately available for comment, but in a statement issued earlier the developer said it understood the situation was serious and unfortunate, but that it was “completely outside Damac Properties control”.“Due to redevelopment of the plots, the building forming the Palm Springs development cannot be situated on the re-allocated plot and as a result, the Palm Springs project has been cancelled, Niall McLoughlin, senior vice president of corporate communications at Damac Holding, said in the statement.“Damac is committed to its customers and in view of this cancellation, Damac Properties will provide customers an opportunity to release the investment made at Palm Springs and transfer the monies to any other project in the Damac Properties portfolio at a discounted price 15% below current market.”The 25-storey Palm Springs project had originally been planned for completion by late 2007, and buyers were already angry over repeated delays, contractual issues and complaints of poor customer service by Damac.

Comments

These are the kind of Developer that Distroy the Market Confidence
Posted by Sam Wahib, Dubai, UAE on 1 April 2008 at 17:47 UAE time

It is amazing to see the effort and amount that Damac spends on ADVERTISING…. while they do NOT spend enough effort on delivering on their promises. Other than 2 buildings in Dubai Marina, I’m not aware any othe project that was delivered out of the 50+ project they sold….In addition, and not a single Damac project has been delayed less than one year. I can not imagine a project that was supposed to be completed in 2007, just gets cancelled NOW (after the completion date). These investor must have paid in 2004, now they will just get 6% interest while they could have got 200% to 300% return if they would have invested these sums in any other project in Dubai When you deal with such developer you should look carefully at the contract, and make sure that you are covered with proper compensation should this happen to you

Update facts
Posted by Ilyas, London on 1 April 2008 at 17:00 UAE timeNo one apart from Damac is really in the wrong here, Lee talks about who should be sued, the only ones who have gone back on anything are Damac. The have been given a Plot by Nakheel, but they will obviouly get a lot more money by selling it afresh then re designing and leaving it with the original investors. I think most people cant grasp the simple con that is being carried out here – Nakheel have redesigned but have delivered on there side of giving plots – Damac want to make more money by selling at new prices so are trying t cancel peoples contracts. One thing about unavoidable delays but completely cancelling investors contracts and offering 6% per annum so then can then sell at 300% of the orginal price that is a con………..

Damac and the fun and games
Posted by Mike H on 1 April 2008 at 16:53 UAE time

Damac have been selling off plan now for 5 years. They must surely have sold 60 plus developments. In that period they have handed over 2 buildings if my memory serves me. It seems to me that its all about taking in the cash that they can and skirting around the deliverables with excuses like this. Before the escrow was introduced what was happening to all that money?Hmmm interesting. I wonder how their developments in Egypt and Jordan are faring. Maybe Palm Springs is financing those.

Palm Springs Mess
Posted by Lee, Dubai, UAE on 1 April 2008 at 15:18 UAE time

Wow! Lots of opinions on this one!!! I feel for the investors, end users, speculators, etc. who will not be receiving their property. And for those who were secondary buyers, well, these buyers could lose big time depending on the premiums they paid. But who should be sued or held accountable? -Should Damac sue Nakheel as one of the Palm Springs investors suggested? I guess they could but then Damac would never receive another plot in any Nakheel development ever again. I would be surprised if any Middle East master developers would ever want to work with Damac. Is Damac going to risk that??? I don’t think so. -And who is to say when Nakheel told Damac? I think we need Nakheel to “clear the air” and come forward with the facts on this plot and their communications/dealings with Damac.-Should previous owner’s be sued for their premiums? Who is to say they were not “tipped off” to problems and told to sell by Damac executives? I bought a property in JLT and a year later one of the representatives told me how late the project would be and that the finishes were going to be rubbish. He recommended I sell if I could which I did. If you think buyers are not gettings “tips” for when to buy or sell in this market you are being naive.Is anyone really surprised this happened? If anything I am surprised it took this long for it to happen. Developers are buying plots and less than a year later they are selling flats off plan, sometimes before master developer’s complete the infrastructure works. This was bound to happen. My wife and I bought a flat in 2005 only to have the building completely redesigned in 2006. We ended up with a flat on a lower floor because that was all that was left for us. I knew then the whole real estate game in Dubai was going to be risky until the government introduced laws to regulate the “monkey business”. But at the end of the day, this is still the wild frontier. There may be Escrow accounts, but where are the penalties for projects handed over 1, 2 or 3 years late? Who knows how this will turn out…..but I am going to sit back and watch the entertainment!

The Damac fiasco
Posted by Plam Springs Investor, UK on 1 April 2008 at 14:05 UAE time

“As stated before in this thread; sit back and watch and enjoy.” KieranWhat about the first rule of good government, of regulating the real estate industry? I’m sure you wouldn’t be sitting back and enjoying things if your local Wimpy builder did the same to you if they felt their profit margin had become too small to make it worthwhile to deliver the property you had purchased several years ago….”The Dubai Real Estate is like a gambling table, you speculate & invest. The chances of making it big is high but if you lose, you do not blame the casino, you blame your self.” The ThinkerYou have a very poor opinion of Dubai – simply a huge gambling place billing itself as being run along Islamic principles. The Sheikh of Dubai paints a very different picture of Dubai…”Don’t you people who speculate on a value of something that is not happening see that you too pump up the bubble a little too much, and are really helping the same developers whom you want to sue now?”You do not seem to understand the simple fact that Damac have renegaded on the contracts given to investors not because of any property bubble, but SIMPLY TO STEAL MONEY THAT RIGHTFULLY BELONGS TO INVESTORS. It is not as if they do not have money to pay compensation at current market rates, or do not have a plot on the Palm Jebel Ali to build the Palm Springs project.

Palm Springs
Posted by theshadow, Dubai, UAE on 1 April 2008 at 13:51 UAE time

It may not be criminal but it’s shady as you can imagine. Not only DAMAC are to blame though, the real estate industry here is equally guilty of distorting reality in their efforts to get people to buy buy buy.I just don’t see how this works though – surely if a developer announces a development and offers it for sale they’re obligated to deliver the project as advertised? If not, that says a lot about the maturity of the real estate industry here and the type of people it has attracted. I’d rather spend my hard-earned money elsewhere on something solid instead of a coloured, computer rendered bubble that might burst at any given moment for no valid reason. It really is ludicrous.

Facts
Posted by Ilyas, London on 1 April 2008 at 12:18 UAE time
Some people dont seem to understand what this is about. Nothing to do with volatile markets, because if the value had gone down that is something the Investors understand, nothing to do with workmanship, oversupply blah blah. Damac have used investors money to buy the plot, and then when the price goes through the roof they want to renege on the their committments and sell it for more.People posting on here talking about falling markets and all the rest this simply is nothing to do with the issue, investors paid for something on Palm Jebel Ali and thats what they should get. Not some shoddy excuse about a redesign.AND if the price had collapsed ofcourse Damac would then have said to the investors to buy in a redesigned palm springs, just so happens they have seen an opportunity to make more money buy selling them afresh.

First Rule of Investment
Posted by Kieran, London, UK on 1 April 2008 at 10:57 UAE time

Only fools think that high returns are not the reward for high risks…These investors can persue this claim but they need to risk having the world know they were either gullible enough to think this was a guaranteed return or thought they were party to some nefarious deal whereby their returns were guaranteed unless, of course, DAMAC or their agents gave them assurances that there would be a massive return, thereby, through that assurance, underwriting the risk.However, that may well indeed be the case. UAE sales agents (and there are so many of them these days) with their hyperbolic talk about massive returns and guaranteed investments may be advised to have their lawyers double check their publicity material and make sure their staff are trained well or this lawsuit and future ones could start to cascade down the property-boom feeding chain eating the weak.The authorities have recently, and rather belatedly, been taking steps to regulate these sales and are to be applauded for that but, unfortunately, a lot of things were said and done pre-regulation, that might come back to haunt the market.That coupled with the fact that there is a huge amount of property just now coming to completetion so the builders must be praying that their new owners are too ill educated or naiive to spot the shoddy workmanship and poor finishing prevalent in the region and launch a tidal wave of warranty claims for repairs and bringing properties up to the standard portrayed in the sales publicity. There is no evidence to suggest that most of the developers actually have the kind of solid, cash, foundations and secured credit lines to survive any major turbulence in this market, let alone to go paying out compensation back to burnt investors or aggrieved owners.Caveat Emptor and nowhere is this truer than buying “off plan”.As stated before in this thread; sit back and watch and enjoy.

Who’s to blame?
Posted by The Thinker, Dubai, United Arab Emirates on 1 April 2008 at 10:31 UAE time

Well, who is to be blamed, is it DAMAC who just promotes but never forces a investor to buy or is it the investors pouring in millions without seeing a brick on ground. There a very true old saying, ‘SEEING IS BELIEVING’ & there is a counter line that says that only the risk takers reach the top (but for the risk takers, it can be rewarding or a dive in the dump while the believers would have lost a good opportunity if it was really good later).The Dubai Real Estate is like a gambling table, you speculate & invest. The chances of making it big is high but if you loose, you do not blame the casino, you blame your self. After all, before & after investing, you believed in speculation (until DAMAC’s announcement) and took a very strategic decision.

Palm Springs mess
Posted by George, Dubai, UAE on 1 April 2008 at 09:45 UAE time

Well …If Nakheel redesigned the plots, then Damac should have either informed the investors in time, or sue/ask for compensation/alternative plot(s) of the same properties from Nakheel now. While I can feel sorry for the original investors, the ones asking for the compensation of the secondary sales are obviously not entitled to any refund beyond the original price and any interest that the developer is accepting. Their risk – as long as they thought that the value is going up, they kept quiet, right? – and their loss. They would be happy if the project went through and they had 100% returns on the investment.And, I really fail to see how a flat that is never going to be built can be valued, let alone worth millions??? Don’t you people who speculate on a value of something that is not happening see that you too pump up the bubble a little too much, and are really helping the same developers whom you want to sue now? Compound greed … great!Let’s kick back and watch … the game is on …

Palm Springs
Posted by stuart mayhead, Abu Dhabi, UAE on 1 April 2008 at 08:17 UAE time
So is this going to be when they judge the bubble to have burst? Or is it just a leak….
Damac’s action tantmount to

FRAUD
Posted by Palm Springs Investor, UK on 1 April 2008 at 04:24 UAE time

“Damac said it understood the situation was serious and unfortunate, but that it was “completely outside Damac Properties control”.”What a load of codswallop. Damac has known about the re-design of the Palm Jebel Ali for ages, and I’m sure Nakheel would have kept them informed of progress in the re-design. It’s astounding for Damac to suggest that it has ‘suddenly’ learned that the original plot will not be delivered, and so has had to cancel the project. Damac seem to think that those who invested in the Palm Springs are a bunch of brainless fools who are not able to see through this LIE.If Damac are not able to honour their contracts for failure to deliver by Nakheel, then they should be suing Nakheel, rather than penalising investors with whose money Damac has had all of these years.It is extremely surprising that the Dubai authorities are not stepping in and investigating Damac, if not on investors behalf, then to safeguard the reputation and of Dubai as a safe place to invest.These latest comments by McLoughlin reveals that Damac’s business ethos is driven by greed, and I applaud Brown and the Palm Springs Investors Group for standing up to Damac’s underhand illegal tactics

Posted in Dubai | Comments Off on Palm Springs investors face millions in losses

ArabianBusiness.com Damac threatened with lawsuit after project axed

Posted by 7starsdubai on April 1, 2008


original published: arabianbusiness.com 31.March 2008
http://www.arabianbusiness.com/514985-legal-action-threatened-after-damac-axes-project

Investors in Damac Properties’ Palm Springs project on the Palm Jebel Ali are threatening legal action after the developer cancelled the venture five years after launch.The project was axed due to changes made to the Palm Jebel Ali masterplan, which meant Damac would suffer a significant loss if it continued with the venture, according to UAE daily Gulf News.Investors are unhappy with the compensation offered by Damac, which said it would only offer 6% per annum interest on the sum invested, the newspaper said.

The cost of real estate in Dubai surged up to 15% in 2007, according to Egyptian investment bank EFG-Hermes.Damac has said it will either refund customers’ investment or allow them to transfer their investment to any other project in its portfolio at a discounted price of 15% below current market value.“Due to redevelopment of the plots, the building forming the Palm Springs development cannot be situated on the re-allocated plot and as a result the Palm Springs project has been cancelled,” Hussain Sajwani, chairman of Damac Holding, said in a statement carried by Gulf News.The 25-storey Palm Springs project had originally been planned for completion by late 2007, and buyers were already angry over repeated delays, contractual issues and complaints of poor customer service by Damac. Damac currently has real estate interests worth $30 billion across Dubai, North Africa, Jordan, Lebanon, Qatar and Saudi Arabia. The developer announced in September that it has launched a total of 79 towers across the region over the last five years, all of which are in various stages of construction.

Comments:

Damac Victims are not alone
Posted 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.

damac Plam Springs
Posted by Richard, London, UK on 1 April 2008 at 01:35 UAE time

DAMAC- Palm Springs this was a dream Five years ago and now in 2008 a COMPLETE nightmare.
Damac’s treatment of its clients
Posted by Sanj, London on 31 March 2008 at 20:31 UAE time

I am outraged at the way Damac have treated us. We have accepted delay after delay and been loyal to this project for the past 5 years. Many of the purchasers can no longer afford to get into the Dubai market let alone a comparable apartment on Palm Jebel Ali. It has been rumoured that Damac has canceled this project because they do not stand to make the financial gain because of the increase in construction costs in Dubai. A penalty that we the buyers are having to bear. We hope that Dubai will make an example of Damac and insist that they fulfill their contractual obligations.

Palm Springs
Posted by jo on 31 March 2008 at 18:05 UAE time

We the investors of Palm Springs are disappointed by what appears to be a unilateral cancellation of the Palm Spring project at Palm Jebel Ali. Following the purchase of our apartments in this project in 2004, Damac thanked each of us “for placing your trust in our company and making this investment in Palm Springs,” It is clear that this trust has morally and contractually been misplaced. Damac have abandoned their duty of care towards their loyal investors. Having relied upon your representations, and remained loyal to the project, despite numerous set backs and delays, we have been rewarded by their abandonment of the project. By canceling the entire project, Damac has set a worrying precedent. This will inevitably have a major impact on the commercial credibility and trustworthiness of Damac in delivering on both current and future developments in Dubai.

Ethics?
Posted by Ilyas, London on 31 March 2008 at 15:19 UAE time

Remember that Damac HAVE been give a plot by Nakheel, and they are using this as an excuse to get out of honouring the investors who bought early. Damac will get 3 times the amount from new investors so thats why they want to return the money to the investors. If the investors had put their money into virtually any reputable developer in Dubai they would have seen a nice return. All the time Damac would have presentations and tell people how much money their investors were making, they should now tell people that they cancelled a project so they could sell it for more to new investors!

Palm Springs Cancellation
Posted by Terry, UK, UK on 31 March 2008 at 15:17 UAE time

I am shocked and disappointed by Damac cancelling Palm Springs Project. I believe that Damac acted illegally and breached the contract with their investors.I feel angry and hurt together with my family because our dream of having our apartment in Palm Springs has been shattered by Damac after nearly five years of waiting, where the prices in Dubai since have more than tripled and we cannot afford to buy any comparable apartment at the current market price.Damac must honour their commitment to their investors without giving us unacceptable excuses. Damac has several plots in Palm Jebel Ali you can build Palm Springs or redesign it.

Damac Palm Springs
Posted by Robert Miller, Newport, UK on 31 March 2008 at 14:57 UAE time

Having bought in to Palm Springs in 2003, the amount Damac are offering will mean that I cannot afford to purchase another property. Put simply, Damac could not build at a profit so will not build at all. Come on Mr Riddoch, do the lawfully and morally correct thing and return to us our investment and the growth we had earned by supporting you in your infancy. Last November I should have received a luxury apartment, instead I am going to receive less than I gave you and a similar apartment will now cost more than three times the price.Just how many apartments have Damac actually built, review the amount they have sold and the amount they have actually built. They are a problem waiting to happen.

Palm Springs
Posted by Palm Spring Investors Group, United Kingdom on 31 March 2008 at 12:37 UAE time

Just a small matter of all those who bought on resale, they have lost anything up to £150,000…Damac will not look at this issue and not refund the premiums. Why should Damac cancel the project when they still own the plot. It has only being relocated and they can redesign the Palm Springs…They will wait a year or two and resell units built at the site for overinflated prices and make a large profit instead of a large loss.

Damac cancels Palm building
Posted by Bob on 31 March 2008 at 09:44 UAE time

They have been using the investors money over the past 5 years to build and build and now we are offered 6% ROI?? DAMAC “Live the Luxury” Yeah right!

Damac
Posted by Heba, Dubai, Egypt on 31 March 2008 at 08:41 UAE time

I am not sure why people are angry, Damac is giving them two options, (1) get back your money with interest or (2) get another property for a discounted price.Damac has not taken the money and fled away. It is a company trying to do the right thing for its customers. I can imagine how customers are angry becuase they thought they can make a profit out of the property, but this in itself shows that the customers motivation for anger is also greed..In fact, the more people get angry and follow the herd, they stand to lose more ..

Showing True Colours!
Posted by Louie Tedesco, Dubai on 31 March 2008 at 08:28 UAE time

Thank you Damac for showing the world your real character – which is not the friendly, caring, persona that you try to typify on your glossy brochures and advertising. Your actions, after five years of sitting on customer down payments, by refusing to honour a huge contract with an international consortium of investors has added one more argument to not buying property or investing in Dubai. In this modern era, people do talk, they send emails around the world and the internet is too open for such a breach of contract to remain hidden from the public. The right thing to do is to step forward, fulfil contractual obligations made five years back, suck up the loss now and move on to reap future profits that lay ahead. Until then, my money stays in my (foreign offshore) bank.

Management has no understanding of reputation
Posted by Dubai Warrior on 31 March 2008 at 06:26 UAE time

It seems that the incredible greed of Damac is strong enough to obscure its management from the potential incredible losses it can incur thanks to a tarnished reputation.How many investors do they think will now be willing to put their money in their next project after the company forced the situation to become this public.The real estate market is shaky and without restoring confidence it can implode like a bubble as many have already said. The fact that it takes time for the effect to happen does not mean it doesn’t happen, or haven’t we learned from the stock market crash two years ago?

Damac threatened with lawsuit after project axed
Posted by H L Nagpal, London, United Kingdom on 30 March 2008 at 21:32 UAE time

It is foolish for a company like Damac to back out from a project just because it is going to make a loss. If Damac does not care about its goodwill, the UAE Government should make it honour its obligations as otherwise its effect will be far reaching. Investors in the West are investing heavily in the upcoming real estate of UAE on the understanding there is rule of law. Damac have launched projects at heavily inflated prices which are going to bring bumper profits to the Company. If the company is going to walk away from its contractual obligations, its effect on other projects by other developers will be enormous. One bit of bad news can ruin the whole market. The writer has no interest in the project and is concerned on a matter of principle.

Posted in Dubai, Jumeirah Business Centre | Comments Off on ArabianBusiness.com Damac threatened with lawsuit after project axed

 
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