Friday, July 17, 2009

Damac at a Loss Over UN Site

According to Arabian, preparations are underway by a UK based lawyer against developers and culinary experts DAMAC after the revelation that two projects being sold off plan (La Residence and La Residence 2 at the Lotus) are actually on land that is, or at least part occupied by the United Nations.

In nutshell, DAMAC have been selling the projects since 2006/7 off plan, taking installments as they go. Fair enough one would think, however the sticking point seems to be as to whether clients were actually told that DAMAC did not have vacant possession of the land.

Apparently when DAMAC were pressured they were "at a loss to explain when the plot would be handed over by the master developer Dubai Properties and when construction would start at Lotus."

It would seem the deal was that the project would be completed 3 years after the handover of the land.

That's all well and good, but what about a timeframe for the handover of the land? News sources at the time of writing don't appear to have an answer for that one. In theory, DAMAC who own the land according to the article, could continue to allow occupation by the UN until the end of time leaving "investors" having to pay out installments for something that would never even be built!

Unsurprisingly the "regulatory" body for the region, RERA doesn't appear to have commented on the matter, having said that, it is a little difficult to tell after trying unsuccessfully to wade through all the pop up ads on their website.

To be honest, much of this is no surprise. Developers and agents were incredibly greedy in the beginning, many of them coming from entirely unrelated businesses (The original DAMAC is a catering firm) with no or little experiance. Things were fine for a while in the boom time, but now things are sinking fast, the money has been spent.

As Q2 rental figures show waning performance for Dubai, the worst is yet to come we fear.

(The original article from Arabian Business can he seen here)

Tuesday, July 7, 2009

Warzones Are Apparently The Next Big Thing!

After having taken a break for a wee while, we though we would see what we could find that might make us giggle. The industry being as it is, it wasn't long before something popped up, courtesy of property news agency Property4Media.

Property4Media is a very useful agency for reaching large numbers of journalists who want high resolution pictures and enormous interviews and stories in a rush to meet their deadlines. Great for new companies to gain exposure, and more established ones to keep themselves at the front.

Thing is though, there can be some very amusing press releases through it from time to time which can often lead the to the company issuing it shooting themseles in the foot. Of course, we have an excerpt here of one such article here from titled

Iraq Is The Next Property Hotspot.

After that, the article opens with this,

", the online property group, reveals in its recent poll that Iraq is the number one destination for property investment. The latest figures from Simplyzigzag’s recent poll reveal strong feelings for volatile regions. Iraq was firmly in first place with 44.6%, over double its nearest rival, Croatia 17.9%. Costa Rica followed with 16.1%, Bulgaria, 12.5% and Romania, in the top 5, with 8.9%."

Ok, so these are results from a public poll (via the company's website over a 12 week period from the 1st of March 2009 to the 31st of May 2009,) but Iraq? How on earth does someone come up with that as a result? Surely from a publicity point of view one has to consider the viability of releasing such a claim under their business name, public poll or not?

Well, the rest of the release goes on to say,

Raya Mamarbachi, Director at Simplyzigzag said: “Once upon a time if you wanted to buy property abroad, there were only a few options, with France, Spain and Portugal being the most popular. For the incredibly wealthy came Florida, the Caribbean and skiing chalets in Aspen. Iraq, once a crazy idea, has been become an ideal place for investment. Its economy though plagued by war is dominated by oil, agriculture and tourism. Despite the volatility in the market, huge returns can still be made. Kurdistan’s capital, Erbil, has seen huge rises in foreign direct investment. Croatia, Bulgaria and Romania have all flourished in recent years….investors are swopping allegiances with more traditional places for high risk areas. With the American market in constant turmoil, the Spanish and French market in a slowdown where else should Brits go? Iraq and Costa Rica remain un-spoilt, untouched and a easier place for keen first time buyers to get on the property ladder.”

Hello! Iraq is still in major turmoil! People get kidnapped there! The foreign investment is from governments and industry, not Mr and Mrs Average Nextdoor!

That rant out of the way, lets go take a look on to see if we can fritter away some cash on a bombed out semi..... Oh no, despite Iraq being an option on the site, not a listing to be seen.

However, after a little more roaming on the site, we find possibly the bargain of the century! 67000 square meters of land in Syria for the bargain price of €40!

It goes to show, polls and surveys are all well and good, it doesn't make them right though!

On a final note, it has been announced that John Howell's International Law Partnership is to be wound down as of the 10th of July 2009. A copy of the press release can be seen here.

This is something we would be interested to hear opinion on. ILP was well known for providing advice in many overseas regions, and predominantly in "emerging markets" What we would like to know is what happens to the clients of ILP now and in the future? It is without doubt there will be many developers and agents go out of business in the coming months, what happens to clients who have bought off plan and yet to complete?

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