Commenting on the handover, Mohammed Nimer, CEO of MAG Group Property Development, said: “We have maintained a consistent vision, communicating transparently. We have stood by our strategy through thick and thin which has underscored our commitment to our customers and our confidence in delivering our promise.”

Almost 90% of MAG 218 tower was sold out within months of its 2006 launch, with many investors initially paying an average of AED750,000 – 850,000 for a one-bedroom apartment. Today, despite falling prices over the past two years, the apartments have still appreciated, on average by at least 10%. Indeed competitive rental returns can be achieved due to the realistic original selling price.

Due to MAG Group’s strategic pricing, more than 70% of the owners are end users clearly keeping speculators at bay. The typical profile of residents consists of young professionals in their early thirties and to date MAG Group has not received any cancellations whatsoever.

“So far we have not received any notices’ of cancellation, which in the current climate is quite remarkable. However it does highlight the sustainable demand for quality mid-priced accommodation,” said Nimer.

In terms of service fees, again through MAGme the property management arm of MAG Group, rates are very competitive at less than AED10 per square foot per annum.

“This which compares favourably with other developments in the vicinity,” said Nimer.

Full-floor show-apartments located on the first floor of the MAG 218 Tower were opened in June 2008, so that owners could check out the quality of the interior finish, plus other interior fittings such as lights, built-in kitchen units & white goods, wardrobes and bathroom fixtures.

“Frequent online photo-updates were also posted on to the MAG Group website to further reassure overseas investors,” added Nimer.

The tower, which comprises 333 one-bedroom apartments and 222 two-bedroom apartments and six retail outlets, comes complete with 572 covered car parking spaces and an outdoor Olympic sized swimming pool. The top five floors feature a full glass exterior, which afford spectacular panoramic views of the Marina, Palm Jumeirah and beyond.

A dedicated recreational facilities and community floor houses a state-of-the-art gym, event and dining hall, TV room and an outdoor terrace.

The residential tower is strategically located close to all of the facilities in Dubai Marina and only five minutes’ walk from Dubai’s Internet City and Media City. The tower also forms an integral part of MAG Group’s development strategy to construct competitively priced buildings aimed at the mid-range market and appealing to Dubai’s middle income families.

Imre Solt

Nakheel recently received US$9bn (Dh33bn) from the Dubai Government to revive stalled projects and settle debt, and have now announced more options to investors in long-term projects, such as Palm Jebel Ali.

Options

The options outlined by Nakheel are:

• Staying in the project
• Swapping into near-term projects
• Consolidating into other owned properties
• Consolidating into a third-party property
• Receiving credit that will be useable against any property at anytime and redeemable in five years

History

The debate began late 2009 when Nakheel offered buyers of waterfront homes on Palm Jebel Ali alternatives in Jumeirah Heights and Al Furjan. The buyers declined these offers, saying the options were “inadequate and not acceptable”, and said they would hire a law firm to represent them.

Property prices for a villa on Palm Jebel Ali plunged from  $4.35m to $2.45m in just two months when the financial crisis hit the artifical island in second half of 2008. The project was launched in 2003, but came to a halt in 2008 and on April 10 this year investors will meet in London to sketch up a plan how to put pressure on the project.

The National

The total price tag: about $44 million — or roughly 10,000 years’ worth of salary for the average citizen of Azerbaijan. But the preteen who owns a big chunk of some of Dubai’s priciest real estate seems to be anything but average.

His name, according to Dubai Land Department records, is Heydar Aliyev, which just happens to be the same name as that of the son of Azerbaijan’s president, Ilham Aliyev. The owner’s date of birth, listed in property records, is also the same as that of the president’s son.

Officials in Baku, the capital of Azerbaijan, declined to comment on how the president’s son — or at least an Azerbaijani schoolboy with the same birth date and the same name as the son’s — came to own mansions on Palm Jumeirah, a luxury real estate development popular with multimillionaire British soccer stars and others with cash to burn. Ilham Aliyev’s annual salary as president is the equivalent of $228,000, far short of what is needed to buy even the smallest Palm property.

Azer Gasimov, the president’s spokesman, declined to discuss the Dubai real estate purchases. “I have no comment on anything. I am stopping this talk. Goodbye,” he said when contacted by telephone and told about the names on the property records. Gasimov did not respond to requests for further comment sent by fax, e-mail and cellphone text message.

Azerbaijan, a former Soviet republic blessed with plentiful oil and gas reserves yet blighted by widespread poverty outside its glitzy capital, has long had a reputation for corruption. But the Dubai purchases, which have not been reported before, could provide a rare concrete example of just how much money the country’s governing elite has amassed and of the ways in which at least part of this wealth has been stashed overseas.

The Washington Post

At the same time, construction on Gateway Towers, Trump International Tower and Hotel and Frond N villas has been delayed indefinitely, as well as other projects on the other Palm islands. According to group managing director of Nakheel development projects, Mr. Marwan al Qamzi, the projects on Palm Jumeirah will be reviewed when market conditions improve.

Other projects, such as the transformation of the famous cruise liner Queen Elizabeth II into a floating hotel, has also come to a halt as Dubai World seeks to cut costs and temporarily store the vessel in other ports. The port of Cape Town in South Africa has been considered but a decision has yet to be taken.

The prices on Palm Jebel Ali have decreased by 45% since 2008 and properties on the island was originally scheduled for handover next year. Now, investors are criticizing Nakheel for asking to move their investments to projects such as Al Furjan and Jumeirah Heights, which are both under construction.

“…most investors would like them to complete Palm Jebel Ali. People have paid premiums on top of what they paid originally, it’s a disaster to be asked to move somewhere else.” an investor told The National.

Nakheel confirm the offer given to the investors saying that

“Further work on Palm Jebel Ali has been delayed until market conditions allow recommencement of these phases of the development, and customers are being given a range of options within the wider Nakheel portfolio to transfer their investment,”

Dubai Holding, owned by the ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum, said it would merge back-office operations at three of its real estate entities, Dubai Properties Group, Sama Dubai and Mizin to cut costs.

“While the ownership and core activities of the three companies will not change, this will lead to closer working relationships by realizing efficiencies through the consolidation of their back-office operations,” Dubai Holding said in a statement.

The three firms have played a role in some of the most high-profile projects in Dubai, including the Business Bay office development and Jumeirah Beach Residence.

In addition, Dubai Holding said it would consolidate back-office operations and revamp management structure at some of its most important sub-holding groups, including Dubai International Capital and Dubai Group.

Reuters

Chief Executive of DAMAC Properties Peter Riddoch said the conclusion of the LakeView project marked a positive indication that the company was remaining focused at a time when there were still many challenges across the property industry.

‘Completing this development is a superb way for us to start the first quarter of 2009 and shows that we have not lost our focus or our commitment to our customers,’ he said. ‘There is no doubt that the second half of last year saw a big shift in terms of the affect of the global economic crisis on the property market in Dubai but it has always been, and will continue to be, our intention to deliver our goals and to meet the commitments that we have made. We firmly believe that the market will continue to reward those companies that deliver on the quality they promised. ‘We are pleased to see our first customers now able to move into LakeView and enjoy an area that is becoming more and more popular with the recent opening of Dubai Marina Mall and with the new metro due to open later this year which will have stations close by.’

DAMAC Properties has already announced its intention to deliver a further 7,000 units into the market during 2009/10 and Mr Riddoch believes that despite continued economic gloom in some areas, that property will continue to be a solid investment. Mr Riddoch added:

‘This is a new era for the UAE property market. Whilst it was reported by Colliers that property prices fell in Dubai by eight per cent in the last quarter of 2008 –overall prices were up 59 per cent on the previous year – something worth keeping in perspective. ‘We are fully aware that the market conditions will remain tough in the UAE during 2009 but believe that by staying focused and continuing in the way we have that we will be in a strong position when the market starts to recover. Construction is continuing steadily across our developments and we look forward to reporting more progress in the coming months.’

“There has been a marked increase in the number of contractors asking for help to obtain payment, including payments certified months ago on some of Dubai’s largest projects,”

Michael Grose, a partner at legal firm Clyde & Co LLP, in the Middle East Projects and Construction Group, told Reuters.

“Whilst there is definitely an upswing in restructuring advice, no construction businesses are coming through the door wanting to put themselves into liquidation. Yet.”

As the global financial crisis began to hit the seaside emirate late in 2008, major government-linked developers behind some of Dubai’s high profile projects have put work on hold and cut jobs.

Projects worth $75bn suspended

Around $75 billion worth of projects in the United Arab Emirates have been suspended or cancelled altogether according to an HSBC report issued in January. “We have had to let go half of our staff and cut wages and it is not because we have no work, it is because we are not being paid for the work that we have completed,” a Dubai-based contractor told Reuters under the condition of anonymity.

“Contracts are not worth the paper they are written on. They don’t understand that the work gets done and you have to pay for it. There is a sense among the big developers that because they are linked to the government, they can do what they want.”

In response to a Reuters query, government-linked developer Emaar Properties, the largest listed Arab developer, said payments were based on a credit cycle and other conditions and that those that qualified would be paid.

“All payments that meet the criteria have been honoured and will continue to be honoured and will continue to be cleared, in line with contractual agreements,” a spokesman said.

Government-owned Meraas said in statement sent to Reuters that payments and payment schedules in the company are an internal matter and therefore details are confidential between the company and its contractors.

Overdue bills

One deputy chief executive with a consulting firm, who had a contract terminated by a major developer, said his firm was owed several million dirhams, now overdue, and did not know when he would be paid.

“Will the government bail the industry out? Well, has the government got the money?” he said.

Dubai — home to palm-shaped islands, an indoor ski slope and the world’s tallest building — has lured investors in droves over the past few years, but is now being hit hard by the global financial crisis.

Cranes that operated day and night before the crisis now stand motionless and many of the building sites are deserted as thousands of construction workers have been ordered to down their tools.

“Established developers or developers who have projects near completion will be in a better position than others (to make payments),”

said Abeer Gouda, senior financial analyst at Global Investment House in Kuwait.

“It will depend on the developer’s track record and the project itself, if it is near completion and on the location.”

State-owned Nakheel, developer of Dubai’s palm-tree shaped islands, said last month it would halt work on a 1-kilometre tall building for one year.

That decision followed the suspension of work on Trump Tower, a $789.5 million project on one the palm-shaped islands, in December. The developer cut 500 jobs in November.

Meraas in December said it would review its $95 billion Jumeirah Gardens project launched at a Dubai property exhibition.

“Payments have always been a problem here, but now the problem is a bit bigger. I reckon the Dubai government would honour their payments but you might have to wait longer than usual,” said the regional director of a construction group.

“Dubai cannot afford not to honour its debt to contractors.”

Reuters

However, despite the ‘Strata Law’ being in place for almost a year, few associations exist in the emirate. Instead, home owners in areas such as Discovery Gardens, The Palm Jumeirah and Jumeirah Beach Residence (JBR) have taken to organising unofficial committees to battle recent hikes in maintenance costs.

In JBR, maintenance fee hikes of as much as 129 per cent have hit owners. An apartment owner, Cecilia Reinaldo, is behind the efforts to organise a committee to fight the increases.

“When we moved in we were shown a brochure which promised five beach clubs and a beach park but it’s been a year and we haven’t seen them,” she said. “I don’t know where this money is going.”

She added that the contract said that as soon as the first building was registered with Dubai Land Department, an owners’ association should be set up to look at how the maintenance fees were being spent. However none has been formed.

“Some of the people I spoke to said they wished they’d have rented, instead of buying the property,” she said. “If they go up across the board then demand for properties will fall further.”

A spokesman for Dubai Properties was unavailable for comment. However, RERA CEO Marwan bin Ghalita confirmed to Khaleej Times that Dubai Properties had already sought out RERA for talks about setting up an owners’ association. Acting on behalf of Dubai Properties, Salwan Property Management sent out a notice to residents informing them that maintenance fees would rise from Dh9.5 per square foot to Dh21.75 per square foot.

Vincent Easton, sales manager at Sherwoods said: “These properties have been subsidised for a while now and I expect we are seeing the real price. Dh9.5 per square feet is quite cheap.”

Coupled with delays on moving in, residents of Discovery Gardens have had large maintenance fees sprung upon them without being forewarned.

Neil Whittaker, who was due to move into the property in June, but wasn’t handed the keys until November, said that he was asked to hand over a sum of Dh45,000 before he could move in. The bill included maintenance charges of Dh15,894 as well as community service fees and other charges.

“Nobody told us about these charges,” he said. “Nobody has told us how they got these figures; what it’s based on; if it’s market rate; if they are annual; if they will stay at this rate year after year. Nothing. I foresee many a fight with Nakheel about it but we have the house now and we are moving in.”“For a limited number of properties at Discovery Gardens, it was necessary to revise completion dates,” said a spokesman for Nakheel. “This was due to circumstances beyond our control.

“For all of Nakheel’s developments, each year’s service charges are budgeted according to the projected costs, and all accounts are independently audited to ensure accuracy and transparency for homeowners.”

Meanwhile, Palm Jumeirah residents have fought back against Nakheel’s plans to increase maintenance fees by as much as 40 per cent.

However, third parties not involved in the dispute said that Nakheel had been -on the whole- responsive to residents’ concerns. No one from the owners’ committee that is involved in negotiations was willing to comment to the Press.

Khaleej Times

“The completion of this high-calibre project, is testimony to Tiger’s commitment to delivery; and is just one of several towers we shall be completing this year,”

said CEO of Tiger Properties, Taha Mohammed, while delivering the project.

The project is located immediately in front of a Dubai Metro station, as well as walking distance from Almas Tower, which will house the region’s only diamond bourse, the Dubai Diamond Exchange (DDE) according to a Press release.

The facilities management arm in line with the holding group’s expansive organi sational development, will also serve the project’s entirety as a response to the mounting requirements of Tiger’s clients, investors and tenants for the provision of extensive, high quality management and maintenance services for units delivered, stated the release. Tiger’s Jumeirah Lake Tower project is intended to accommodate the most stringent requirements of its residents and location.

Khaleej Times