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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 November 9th, 2008

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

Posted by 7starsdubai on November 9, 2008


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

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

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

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

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

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

Posted by 7starsdubai on November 9, 2008


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

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

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

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

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

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

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

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

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

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Dubai Property Wrongs

Posted by 7starsdubai on November 9, 2008


November 2008

original published Gulf Business
over
http://www.zawya.com/printstory.cfm?storyid=ZAWYA20081007053225&l=053200081007

Real estate investors are crying foul over project delays and cancellations. While developers blame surging inflation, the regulators are rolling out new laws to make the market foolproof. But is enough being done, asks Seban Scaria.

Dubai-resident Manish Kumar was looking forward to moving into his own studio apartment in a plush tower next to the Emirates Road in July this year. After all, he had been diligently making his payments to the Saudi developer behind the project for a full two years.

Delays being the norm, not exception, in Dubai construction, he was disappointed to learn that that date would be missed. But nothing prepared him from the shock of finding out the company hadn’t even started building the tower, and, was instead cancelling investors’ contracts.

Local and international investors had purchased off-plan units in the 20-storey Ivory Towers project by Saudi-based Sokook Investment Group. Launched in 2005, the project was supposed to be completed by 2008, but the development began to show the proverbial cracks last February when Sokook told investors to stop paying their instalments due to a dispute with Tecom, the master developer of the International Media Production Zone.

The scandal has been making its way through the local media, with deadlines being set by the Real Estate Regulatory Agency (Rera) for the company to start construction.

However, with the November 1 deadline for construction to start just round the corner, the 40-strong group set up by investors to safeguard their rights is not satisfied by the answers from either Sokook or Rera.

Sharon Anderson, an Australian investor, had booked two studio apartments in the Ivory Towers project back in 2003 and had paid Dhs218,000 ($59,390), about half of what she owed in total. Sharon, along with her brother and sister who also had invested in the same project, is now demanding answers, and is clinging to the hope that her money isn’t completely lost.

Hers is becoming an alarmingly familiar tale. According to experts work on more than 150 projects across the GCC is currently on hold. Gulf projects valued at $48.4 billion are either on hold or have been cancelled, according to Proleads. They include at least 88 projects in the UAE, 54 in Saudi Arabia and 15 in Kuwait.

Although Dubai real estate regulator Rera has directed the Saudi based Sokook Investments to reinstate contracts, issue a new payment pattern and deliver the building by 2011, Prakash Parmer, one of the several investors in the Ivory Tower project, who had already paid 60 per cent for a one-bedroom apartment, is still not clear whether the company will complete the construction.

Engineering a scam”This is a clear scam.

The developers trying to scare small investors into liquidating contracts for trivial sums, saying they might lose their investments as the project is delayed due to surging raw material prices. This is happening when Rera clearly states that cancellations are illegal,” says Parmer.

“Ivory Tower was initially designed to be 12 floors, but now they have redesigned it to have around 20 floors. The developers clearly don’t want to start construction but to make money based on the off-plan selling model,” he says.

Earlier, Rera said action would be taken against master developers and sub-developers if they fail to meet contractual obligations. Rera has dismissed reports that Sokook has cancelled the contracts. According to Rera, it has mediated the issue between Tecom and Sokook.
Investors, however, question Rera’s stance. “If Rera can tell us how much funds remain in the escrow account it will be a clear indication of whether Sokook can complete the project. Also, why is Sokook sending us fresh contracts with no penalty clause when Rera clearly states that cancelling a project is illegal?” asks Parmer.

Gulf Business took up the matter with Rera, but the regulator failed to reply to repeated queries from this magazine on the investors’ woes.

Surprisingly it is not only the low profile builders who are playing the elusive game or delaying projects.

Leading developer, Schön Properties had to stop work on its Dubai Lagoon Project, tossing investors into a pool of pain and dilemma. Twenty-five out of 2,000 investors, whose properties were due for completion in December, have been told they can have their money back. Schön later said that in spite of previous problems, Dubai Lagoon, a residential development near

Dubai World Central, is back on track and would be delivered, albeit with a delay.

According to the developer, the project has engulfed with several problems, including work being delayed because of requirements by Dubai’s Roads and Transport Authority (RTA), issues with contractors and the blocking of a work permit. “The RTA wanted to take 45 metres off our land for the Metro’s Purple Line. So, we had to redesign the whole project,” says the company.

To protect its margin, the company has decided to sell the remaining plots at higher prices and the whole development is due for completion by 2011, as the project’s budget was more than doubled due to the rising construction and raw material cost.

Pumping up confidence

While most of the constructors blame the surging prices and non-availability of raw materials such as cement and steel for project delays, manufacturers insist materials are freely availabile in the market. Besides rising cost of materials, the other reasons usually cited for putting projects on hold are: delays in approving designs, design changes and disputes between contractors and developers.

With complaints from investors soaring, Rera is now under pressure to add a shot of the much-needed confidence to the market. The regulator has issued a new property law, requiring all off-plan units to be registered with Dubai Land Department, which is expected to make Dubai’s real estate market a safer place for people to invest their cash.

Dubai has also moved to calm concerns over the rapidly growing mortgage market, where central bank data shows that mortgage lending in the UAE jumped 55 per cent in the year to March, with Dubai responsible for the lion’s share. A new mortgage law, which comes into effect by the end of the year, stipulates that mortgage contracts be registered with the land department, specifying the size of the loan, the repayment period and the value of the property to which the loan is linked.

Research conducted by Colliers International, in the second quarter, in Dubai and Abu Dhabi highlights that by 2010, almost 160,000 new residential units are expected to be delivered in Dubai, with total office supply in the emirate expected to increase to 4.9 million sq m. Also, the number of hotels and hotel apartments is expected to cross 50,000 units by then.

In Abu Dhabi, an additional 100,000 residential units will be required by 2010 to absorb excess demand and as many as 140,000 additional units are expected between 2011 and 2013, assuming developments are completed on time.

“Dubai is certainly a safer place to invest than it was three years ago. There has been a sustained focus on introducing new laws and developing Land Department procedures with a view to achieving an appropriately regulated and transparent real estate industry. We would expect this trend to continue and, with the introduction of the new property court, a level of confidence to return to the market in due course,” says Will Grinter, Legal Consultant, Clyde & Co.
© Gulf Business 2008

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