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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 22nd, 2008

Ratings agency puts ETA Group on credit watch – Real Estate – ArabianBusiness.com

Posted by 7starsdubai on November 22, 2008

Ratings agency puts ETA Group on credit watch – Real Estate – ArabianBusiness.com

Ratings agency Standard & Poor’s put Dubai-based ETA Group on negative watch on Thursday with a view to downgrading its credit rating due to concerns over the construction and property-dominated firm’s increased leverage.

Standard & Poor’s placed the firm, whose property division has a $10 billion portfolio, on CreditWatch with negative implications with long-term BBB- corporate credit rating, the ratings agency said in a statement.It also put a ‘BBB-‘ debt rating on a $300 million senior unsecured bank loan due 2012 issued by subsidiaries Emirates Trading Agency, ETA Star Holdings, and Associated Construction and Investments Co.

The potential downgrade to junk rating is the latest indication Dubai-based companies are feeling the squeeze from tighter lending conditions, a fall in property prices and a collapse in investor confidence as the global credit crunch begins to sweep across the Gulf Arab region’s trading hub.”These actions are due to concerns over increasing financial leverage, the likely adverse effect of the continuing global economic slowdown on ETA’s cyclical activities, and low levels of headroom under financial covenants,” said Standard & Poor’s credit analyst Stuart Clements.ETA’s construction unit is the sixth largest UAE contractor, according to a survey by London-based MEED magazine.

Its real estate arm ETA Star Properties said in October it planned to sell Islamic bonds worth up to $200 million in the first quarter of next year to fund expansion in North Africa and Europe and was planning to develop residential and office towers in the Russian capital Moscow with a value of $600 million next year.”

ETA’s debt levels have risen significantly in recent years to meet increasing working capital demands from both higher commodity prices and the company’s rapid growth in revenue,” S&P said.The group also operates in mechanical engineering, car trading and shipping – all sectors “considered to be highly sensitive to economic conditions”.”The recent collapse in prices in the dry bulk shipping market (81 percent of ETA’s fleet), of about 90 percent from the 2008 peak, may put pressure on some of its time charter counterparties and lead to some renegotiations,” S&P said.S&P will conclude the CreditWatch within 90 days.

ETA Star executive director Abid Junaid could not immediately be reached for comment. (Reuters)

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Party like it’s 1999 – Media & Marketing – ArabianBusiness.com

Posted by 7starsdubai on November 22, 2008

original published ArabianBusiness

It may seem incongruous or even insensitive to host a $20 million party in the current economic climate but, once again, Dubai has shown strength and vision that will improve its long term prospects.I watched the opening party of Atlantis the Palm on the television in the UK.

The country’s most popular breakfast television show, GMTV, was broadcasting live twice per hour from one of Palm Island’s fronds.The coverage included red carpet interviews with Hollywood Oscar winners, multi-million album selling singers, business billionaires, and even some minor European royals.

Breakfast TV viewers feasted on footage of the most spectacular firework display since the Beijing Olympics; lapped up the glamour of the world’s most beautiful women; and envied at the presenter reporting in his shirt sleeves from beneath clear blue Dubai skies.

The talk over Friday brunch in Dubai will be about how unfair it is that the world’s glitterati had favoured access to the Atlantis celebrations, while those living in the city were not even allowed to set foot on Palm Island for two days prior to the event.This though would be missing the point.

The cost of the world’s most lavish hotel opening party was not just an ego trip for the resort’s owners, or even a marketing stunt to push up its revenue per average room.
It was a Dubai government-backed initiative to show the world that the city remains one of the most spectacular tourist destinations in the world, and that it will serve as an oasis of delight in a global desert of gloom.

The world is entering a downturn in tourism and business travel that will last into 2010.

But while every destination will be affected, including Dubai, some will suffer more than others.

The positive coverage gained from Atlantis’s $20 million party will prove to be a masterstroke of marketing that will ensure Dubai has the best possible chance to weather the coming storm.

By the end of what is going to be a global recession, expect the emirate to emerge even more dominant against its competitors than it is today.

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Property Scandal -Dubai developer demands up to 88% increase on price to pay construction costs | Dubai Property

Posted by 7starsdubai on November 22, 2008

Dubai developer demands up to 88% increase on price to pay construction costs Dubai Property

original published: AME info

The company behind the Prodigy development in Dubai’s Jumeirah Village, MiNC, has sent a letter to investors asking for extra capital to cover construction costs after cash flow shortages caused by the withdrawal of project financing by the two funding banks.

The letter from MiNC‘s CEO explains the company’s financial situation to investors. MiNC says that despite the land purchase being finalised in October 2006, Nakheel only actually delivered the land for construction in May 2008. This has led to: ‘
A significant negative impact on the project; a doubling of construction-related professional fees and a large increase in government imposed costs.’ In addition: ‘The arrival of the global financial crisis has had a severe impact on the monies MiNC has available to build Prodigy 1.
We are no longer able to subsidise construction of the project; the project needs to be self-funded as originally intended.’

MiNC faces two further problems. New regulations introduced by the Dubai government have meant that the company’s original economic blueprint of using finances from the whole project to fund construction on Prodigy 1 is no longer legal. This has then been compounded by the withdrawal of project financing by two local banks.

Difficult financial situation’We are in an extremely difficult situation,’ Simon Everest, Director of Operations at MiNC told AME Info. ‘Banks have pulled all the finance, so we have the choice of either sitting, doing nothing and waiting it out, like some of our competitors are doing, or we need to find another solution.’ The problems have meant that though most of the units in the seven towers have been sold, and the company’s escrow accounts are up to date, the project is no longer financially viable. MiNC claims that it would make a ‘significant and material loss if it were to build this project’ and it ‘can no longer afford to subsidise this loss’, according to the letter sent to investors. As an example, MiNC is asking buyers to pay an additional Dhs326,000 on units originally sold to them for Dhs370,000, a mark-up of 88% on the original price.

The developer also asks that investors pay the increase up front, with the remaining instalments as per the original terms.
The charge will then go to pay for construction costs. In return for this the company is trying to mitigate buyer displeasure by guaranteeing 8% rental returns on the increased purchase price. MiNC is also playing on the fact that, at Dhs1,000 per square foot, the units are still below market rate. ‘The market is short of new buyers at the moment and as they cannot sell at a higher price, they are in effect re-selling the same apartments back to the original owners at an increased price!’ an investor in the project told AME Info.

‘When we spoke with their London office, and contacted their Dubai office, the only options were – give us the money we have asked for or lose your apartment and 30%.
MiNC are saying that per the new law they will be able to retain 30% of the purchase price, even though we are not in default of payment.
Responding to this comment MiNC said: ‘We do not intend to confiscate all or part of clients’ deposits, and have not in any way threatened our clients in this regard.’

Permanent suspension of workThe letter continues: ‘The current economic climate and the impact on the property sector are unique… Events outside our control have forced us to make difficult decisions. We believe that our proposed course of action will help us meet this target [of delivery in June 2010]. Failing this, we fear that the project will be suspended, possibly permanently.’ The response from investors contacted has been understandably negative so far, with many refusing the terms: ‘If I wanted to buy an apartment at Dhs1000 per square foot back in November 2006, I could have put a little more in and bought in the Marina. As an investor in this company, I feel like I have been robbed of my savings and profit.

I have looked at the market and apartments in Jumeirah Village are selling for under Dhs1000 in the current market.’ If the response by even a large minority of investors is negative then MiNC will not have the funds necessary to begin construction and those who have advanced the extra money will have their funds returned and the company will wait for bank funding to resume. ‘We initiated a meeting with the Land Department to get them to intercede on our behalf with the banks,’ said Everest, ‘and they put pressure on them but we’ve had no joy. Our next move if the buyers don’t accept the deal is to return the money, sit it out and wait for financing. But it is our intention to build every single one of the units.’

UPDATE: Subsequent to the publication of this article MiNC has issued a statement to AME Info stating: ‘We have taken steps to reduce the premium requested from clients to a maximum of 30% or Dhs200,000 (whatever is the lower), as a handful of purchasers that bought at pre-launch prices (less than Dhs600 per square foot) have rightly pointed out that the premium requested of them was excessive.’

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Dubai developers are in denial

Posted by 7starsdubai on November 22, 2008

Dubai developers are in denial

Some of Dubai companies are in “denial” about the viability of projects in light of the global financial crisis, according to the CEO of Depa
We are at the denial stage where lots of developers know for a fact that their projects should be cancelled and they’re either not announcing it or they’re saying it’s going to be delayed,” said Mohannad Sweid, speaking on future Dubai growth at the Nasdaq OMX Investor Conference.

“We cannot deny the effect [the crisis] has been having, we are a part of this world and I believe it’s just not right to say we haven’t seen any impact,” he added.In its capacity as an interior contractor in the Gulf region, Sweid said Depa had seen a lot of project announcements that had not necessarily been fully researched and he expected these to stop as the crisis takes hold.”

What we have had in the GCC in the last three years is the difference between reality and non-reality.

Our market research showed there will be 280 new hotels built over four years within the GCC. That was advertised all the time… If we look at the reality – how many hotels have been delivered – it’s hardly more than five or six hotels a year,” he said.

In terms of risk to his own firm, Sweid was confident that infrastructure projects would still go ahead.”In this region, a lot of infrastructure is not developed yet and these elements of infrastructure have to be developed – it’s not a choice,” he said, citing Dubai’s new metro system as an example.He added that DepaDepa was still on track for growth for next year, but the “fears” were for 2010 and 2011.
© 7Days 2008

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