Jumeirah Lake Towers Dubai - Huge queues to leave the development each morning.

original source The National
DUBAI // Residents of Jumeirah Lakes Towers (JLT) face a six-month wait for relief from huge queues to leave the development each morning.

As the number of people living on the development has steadily risen over 18 months, the single access road to Sheikh Zayed Road has become choked with traffic, particularly during the morning and evening rush hours.

continue reading...

Dubai - Nakheel merges with DMCC property arm

Nakheel the state-owned developer of Dubai's palm-tree shaped man-made islands, has been merged with the property wing of Dubai Multi Commodities Centre (DMCC), a newspaper said on Monday.

source ArabianBusiness

"DMCC's property-related operations have been integrated with Nakheel to better accomodate current market conditions and optimise resources and expertise," a DMCC spokesman told The National.

Both companies are owned by Dubai World, which is in turn controlled by the Dubai government.
Nakheel said last month it received funds from Dubai's government, some of which will be used to pay contractors as it looks to complete projects.

Dubai sold $10bn of bonds to the UAE Central Bank earlier this year to raise funds to support state-linked companies suffering from the financial crisis, and plans to issue another $10bn in bonds later this year.

The emirate's once-booming real estate sector is suffering a sharp slowdown as prices have collapsed, developers slow or cancel projects and jobs are slashed.

HSBC said in a report on Sunday prices were stabilising but values could fall further.

Slumping demand would drag residential real estate prices in Dubai down between 50 and 60 percent this year from their 2008 peaks, EFG-Hermes said last month. (Reuters)

Dynasty Zarooni chief rounds on his accusers

FT.com / UK - Dubai property chief rounds on his accusers:

By Michael Peel and Simeon Kerr in Dubai
Published: February 13 2009 02:00 Last updated: February 13 2009 02:00

The executive at the centre of $100m fraud allegations rocking Dubai's property sector has hit back with a counter-claim that his accusers have defaulted on more than $18m of debts owed to his company.

Kabir Mulchandani, chairman of Dynasty Zarooni, claimed that a series of cheques written by investors had bounced as the real estate industry's fortunes plunged late last year.

The case - involving one of Dubai's largest private real estate companies - highlights concerns that the emirate's legal system is poorly equipped to cope with the slew of disputes arising as the sector turns sour.
Dynasty and Mr Mulchandani deny investor allegations of fraud and misrepresentation of the group's property portfolio.

In an interview at Dubai's Port Rashid police station, where he has been held since last month, Mr Mulchandani told the Financial Times he was pursuing cheques totalling Dh68m ($18.5m, €14.5m, £13m) that were written by Dynasty investors to pay for property. He claimed they bounced in late December as the international financial crisis hit the emirate's business community.

He said: "Certain key investors who had issued post-dated cheques to us got caught in the financial trap. They could not pay."

Mr Mulchandani said he suspected the investors whose cheques he alleges bounced - a criminal offence in Dubai - had made the accusations of fraud against him because they saw it as a way to recover money after the market fell.

Salem Al Shaali, who is representing investors claiming up to Dh280m from Dynasty, admitted some of their cheques had not cleared. But he said this was because his clients had decided not to honour the cheques because of their suspicions about Mr Mulchandani.

His clients had deposited cheques covering the money they owed, he added, showing that they had the ability to pay if their allegations against the company were satisfactorily addressed.
Hundreds of complaints have been made against Mr Mulchandani, but the initial claims at the heart of the case came from 10 individuals known as Dynasty's "investment club". Mr Shaali said: "Mr Mulchandani broke Dubai's real estate laws by selling properties without a proper licence and misrepresenting construction progress at the buildings".

Mr Mulchandani, an Indian national, said he was being well treated in custody but expressed frustration at the time taken to investigate a case in which he said he had "nothing to hide". He is expecting a hearing this week over whether he can receive bail.
He said: "This is a wonderful country but . . . it is still gearing up to deal with these complaints, because this is the first time they have had a property meltdown."

The Dynasty imbroglio is a further blow to confidence in Dubai as it scrambles to cope with the sudden end of a six-year property boom on which a good part of its modern-day wealth is founded.
More than 25 executives have been detained over the past year in anti-corruption investigations at state-linked property companies, while lawyers say more claims against private sector property developers are likely to emerge this year as prices collapse and funding dries up.

www.ft.com/dubai
_______________________________

Al Fajer Properties Dynasty Zarooni 2009 - more stories

The Case Dynasty Zarooni: Complaints at Dubai Police now also against Al Fajer Properties

Financial Times 11.January 2009
http://www.ft.com/cms/s/0/2af58370-e013-11dd-9ee9-000077b07658.html?nclick_check=1

Police are investigating fraud allegations against the chairman of one of Dubai’s largest private real estate companies as dozens of aggrieved investors claim he defrauded them of more than $100m.

Kabir Mulchandani, the chairman of Dynasty Zarooni, was arrested last week on allegations of fraud and is helping with inquiries, police officers told the Financial Times.

At least 10 members of Dynasty Zarooni’s ”investment club”, which last year promised vast profits from the company’s preferential access to real estate deals, have lodged complaints against Mr Mulchandani, an Indian national, his Emirati business partner, Hilal Al Zarooni, their joint venture Dynasty Zarooni, and two other employees.

Investors say that Mr Mulchandani in March received subscription fees of Dh300,000 a month from 12 members. He promised them returns of Dh1m a month after six months, or Dh6m, in September, they say.

One British loser says he was encouraged by initial profits made by another club member, who had reinvested the proceeds into the scheme rather than taking the cash.

The fraud allegations weigh further on Dubai’s financial hangover as its six-year property boom fizzles out, with investor confidence hitting rock bottom as people are marooned in an illiquid, declining market while developers are hamstrung by financing difficulties.

More than 25 executives have been detained in an anti-corruption investigation at state-linked property companies. None have gone to trial yet, but the arrests have had an impact on investor confidence in Dubai.

News of the complaints against the chairman could raise concerns among other investors in Dynasty Zarooni’s claimed Dh21bn real estate portfolio.

Mr Zarooni denied any participation in, or knowledge of, a fraudulent scheme. ”One hundred per cent I deny this, there is nothing illegal whatsoever,” he said.

Mr Mulchandani, who has been detained but is seeking bail, could not be reached for comment. He denied any wrongdoing in a local press interview last week.

Lawyers say more than 100 other investors are preparing cases against Dynasty Zarooni over misrepresentation during the sale of its real estate projects.

One aggrieved investor, who in May placed a 20 per cent deposit on an apartment in EbonyTower 1, opposite the Dubai Marina, for Dh650,000, yesterday lodged a complaint with the police against Dynasty Zarooni and their development partners, Al Fajer Properties, for allegedly misleading him about the progress made on the building’s construction, thereby raising the supposed value of the property. ”I have been cheated and am very distressed,” he said.

The cases, if they go to trial, could seek the recovery of hundreds of millions of UAE dirhams, said Salem Shaali, managing partner at Al Shaali & Co, which is representing the victims of the alleged fraud.

This could develop into one of the UAE’s largest fraud cases if other individual investors in Dynasty Zarooni come forward, he said.

more........

Business Partner of Al Fajer Properties - Dynasty Zarooni Dubai - Ebony and Ivory Towers Jlumeirah Lake Towers arrested

One Investor said:

"WE have complaint and complaint, running around saying " please hear us - they are Fraudster" - nobody wants listen to us. At least they said our complaints are criminal. And now ???????? "

http://www.khaleejtimes.com/DisplayArticle08.asp?xfile=/data/theuae/2009/January/theuae_January177.xml&section=theuae

DUBAI - 10, January 2009

Dubai Police have arrested a syndicate of tricksters of India origin, who have been operating in pretext of being real estate developers.

The Indian national arrested are Kabir Mulcandani, a UAE national Hilal Al Zarouni and two other employees of ‘Dynasty Zarouni’ a company located in Jebel Ali for issuing bouncing cheques to different nationalities mainly Indians.

Colonel Khalil Al Mansouri, Director of General Department of Criminal Investigation confirmed the arrest to Khaleej Times on Thursday. The officer said the fraudsters are in police custody and assisting in investigations, adding that they will then be referred to the Dubai Public prosecution for further action.

Police sources said that they had received more than forty complains of different fraud cases against the suspects at various police stations and all cases were then referred to the General Department of Criminal investigation. Rajish and Alkopatra used to work as Finance Managers for the company.

While Mulchandani and his accomplice used to convince ‘potential’ investors that they were licensed to invest money and were a real estate developers. They called on people to invest Dh 300, 000 every month and after paying 6 installments, the investor would get Dh1 million in return.

However, after the investors paid all the installments, Kabir did not show up but went into hiding, until police smashed the racket upon their arrest.

Salim Al Sha’ali, a lawyer for the suspects, told Khaleej Times that in order to convince their victims, the company announced massive media advertisements and introduced websites stating that they had successfully invested in development of real estate projects in the UAE.

The company claimed that their total investments reached Dh40 million realizing a revenue of Dh2.8 billion.

amira@khaleejtimes.com

all related reports 2008 - 2009 about Dynasty Zarooni:

http://7starsdubai.wordpress.com/?s=Al+Fajer+Properties

http://7starsdubai.wordpress.com/?s=Dynasty+Zarooni

Dynasty Zarooni Chairman Arrested In Dubai - Official

http://www.zawya.com/story.cfm/sidZW20090106000081/Dynasty%20Zarooni%20Chmn%20Arrested%20In%20Dubai%20-%20Official


Tuesday, Jan 06, 2009

(Adds detail.)

DUBAI (Zawya Dow Jones)--Kabir Mulchandani, chairman of Dubai property company Dynasty Al Zarooni Real Estate , has been held this week by Dubai police, an official at Dubai's Public Prosecution told Zawya Dow Jones Tuesday.

The official confirmed that a case has been filed against Indian businessman Mulchandani in Dubai for an alleged liquor related offense and bouncing a cheque for an undisclosed amount, which is an offense in the United Arab Emirates.

Jaydeep Anand, Dynasty ZarooniDynasty Zarooni's chief operating officer, was unable to confirm the arrest when called by Zawya Dow Jones.

"I have no information," he said.

The Public Prosecution official said that Mulchandani has been questioned but was unable to provide further information.

Earlier this year, Dubai's Real Estate Regulatory Authority cleared Dynasty Zarooni of any wrongdoing after two Indian publications ran reports that some investors had complained that Mulchandani had misled them by showing one property and selling them another.

The developer was created in September 2007 with the merger of the Hilal Al Zarooni Group and Dynasty Enterprises Inc and a net equity of 1.35 billion U.A.E. dirhams ($367.5 million).

-By Majdoline Hatoum and Stefania Bianchi, Dow Jones Newswires; +9714 364 4964; majdoline.hatoum@dowjones.com

Copyright (c) 2007 Dow Jones & Company, Inc.

(END) Dow Jones Newswires

06-01-09 1041GMT

______________________________________________________

Dynasty Zarooni is Business Partner of Al Fajer Properties - Project Jumeirah Business Centre, Towers located on Plots H1, H3 and G3, Jumeirah Lake Towers . The Towers hand been renamed from Juemirah Business Centre 7,8,9 in Ebony and Ivory Towers .

read more from the past:

http://dubai7stars.blogspot.com/search?q=Dynasty+Zarooni

http://dubai7stars.blogspot.com/search?q=Al+Fajer+Properties

A Dubai`s Sheikhs Property Company with hedge fonds metanlity ? - Part I

You believe to be on the secure side buying property from hight reputated Developer in Dubai, you believe RERA will help you if you have problems with your developer?

DO NOT MAKE THE MISTAKE LIKE US

Marwan Bin Galita, chief executive of Dubai's Real Estate Regulatory Authority (Rera), said : “Miscommunication and lack of transparency are the major concerns among real estate investors in Dubai!He added: What is abnormal is to ask a question and never get an answer. This is what annoys investors."

A Story of the tragedy buying a holiday home in Dubai - Part I

We are a couple, not young, who visited Dubai since 1999 permanently, mostly staying 1 month every year as tourists in Dubai. We have loved Dubai - but now everthing is destroyed - our confidence in Dubai is gone.

In 2005 we bought an apartment directly from Nakheel, a 100 % Dubai Government owned companie.

The Tower in which our purchased Apartment was, was named Falcon Tower located on Plot H3 , Jumeirah Lake Towers.

This Plot H3, Jumeirah Lake Towers, has become meanwhile ( 2009) very prominent, the Tower here is named Ebony Tower 1 today, which will you see later in this story- as it it today a part of investors complaints at police Dubai January 2009 and the arrest of the Chairman from Dynasty Zarooni.

It was promised us by Nakheel to give us the contract 14 days after paying the deposit of our booking. We paid the deposit, we didn´t get a formal contract. We asked frequently to sent us this document - without any success - without any answer from Nakheel.

Instead give us an answer and sending the contract, we got letters to pay the further installements.

We paid the further installemts, all correct in time, until June 2006 ( 45 % of total 775.00 Dhs).

We wrote letters to Nakheel, no response no contract until June 2006.

August 2006 we and all other investors of this Tower H3 Jumeirah Lake Towers got a letter from DMCC ( 100 % government) that Nakheel has cancel Falcon Tower in it`s current form.

This letter to all invetsors can be seen here:
http://www.skyscrapercity.com/showthread.php?p=24332666

We ask Nakheel for the reason , we got the answer::It was just a decission of Nakheel

The Mangement.DMCC ( 100 % Government owned company) told and confirmed us in November 2006, that they got a new developer for Falcon Tower Plot H3 Jumeirah Lake Towers.This developer is a high reputated on in Dubai and this new developer will built the Tower in the current form under the same condition we once agreed with Nakheel,100 % Residential , nothing will change, only the completion will be 6 month later in December 2008.

So we agreed to be tranfered ,under the same conditions agreed with Nakheel to get our apartment in a 100 % residetial tower with no changes in the condition and options agreed with Nakheel. DMCC wrote that the contract will be given upon this agreement by the new developer.

The new developer was Al Fajer Properties ( ownded by Hasher Al Maktoum, President of Al Fajer Properties today his son Maktoum Hasher Maktoum Al Maktoum).

After this transfer the real nightmare starts.

The new deveopler Al Fajer Properties was adviced by DMCC to fix the agreement in an offcial contract with us.

Since November 2006 Al Fajer Properties gave us the illusion everything is going smooth.

We ask again and again for the contract, meanwhile with our lawyer.

We wrote endless letters since that time to Al Fajer Properties and asked again an again to dent us the contract to the agreemnt taken in Navember 2006. Each month they promised us to do so, but it doesnt happen.

In October 2007, during our 4 week holidays in Dubai, we ask for a meeting together with our lawyer to clear now finaly the fact of the long awaited promise of a porper contract, in which the agreement of 13 November 2006 from the transfer ( nithing will change to our purchase at Nakheel October 2005) should be fixed.

It was a great pleasure by Al Fajer Properties to give us an audience

Here the CEO AFP, Dr. Shahram Zadeh told us, it will be better for to give up, because Al Fajer will now built only a commercial tower on Plot H3.Falcon Tower Plot H3 will now be named Jumeirah Business Centre 8.

We have been shocked.

As reason for this he said: Look, at the time you pruchase at Nakheel it has been made sense to have an Apartment in Jumeirha Lake Towers. But now, look, Jumeirah Lake Towers is a Free Zone. In a Free Zones it makes no sense to have an Apartment. Therfore Al Fajer Properties will built now only Towers with offices.

Yes , Sharahm Zadeh said, we agreed at this time to DMCC, that nothing will change for you, but now this makes no longer sense for us.

But if you want insist, you want to have longer this Apartment, we will do this. But we will only put 1 or 2 Floors with Apartments. Only you and a gentleman fromAmerica instist. All others left from the transfer have seen that this make now sense to have an Apartment in this Tower.

The general message given by the CEO Al Fajer Properties, Dr. Shahram Zadeh was:

Give up, this will be the best for you.

Look if you stay in a Towers in which will only be 1 or 2 floors residential with Apartments, the rest will be offices, you will have the worst situation you can have. Al Fajer is going to do this now, the Tower will be calles Mixed-Use , but will only contain 1 or 2 Floors with Apartments.

He offered a compensation of 80.000 Dhs, on which he said he has no obligation. The genral message was again: Give up, thats the best you can do.

We considered all this is a bad joke.
If we wish to proceed, he will give the tower only 1 or 2 floor residential,the rest will be offices.He called this 99% commercial and 1 % residential construct a MixedUse Building. with the advice that this will be the worst situation we can have, to live in a building which is going 99 % commercial.

After this long faboulus monolog he hold, Shahram Zadeh topped his argumentation by giving us a draft of a contract, to this now named Mixed-Use Tower Plot H3, Jumeirha Lake Towers , Jumeirah Business Centre 8. specifications.

This contract was peppered with unfair conditions, no specific facts ( no unit size, no description about the concrete Building constition, no iformation about the design of the Tower, Plot H3, no master plan, no information about the Apatment location and so on , but named our 3 installements now 45 % booking, not but naming the sum in this document, but forcing within to get the further installment within 2009, changing the completion of the Tower now to 2010 instead before March 2008) , to make it short, a blanco document, without the marginal facts but within tricky placed misleading facts and ablsolute illegal conditions.

An absolute not signable document.

Whithin this meeting we have ask to provide us with the drawings about the apartment and the Floor and the design of the building, to provide us with the facts , named in the contract Schedule A,B,C - which are plain sheets attached in this draft.
They told us they will sent it to us.

We never got them !

We reminded them, to sent us this drawings and informations, again and again in November - December 2007 , also in differnent emails January 2008. They irgnored this again.
This not reactionwas very strange for us and therfore we whished to know, were our money is deposit by them.
To this they sent us are wrong statement, with misleading informations.
After we said this statement is not ok, Al Fajer starts to act agressive against us.

With an email 31 Januar 2008 Al Fajer Properties pushed us to agree and sign this unsignable contract by saying:

Deadline to decide 1 week and if you don`t agree we Al Fajer Properties will chancel every right and refund only the paid monies ,without any compensation.

We didn`t agree to this, we didn`t sign this unsignable document and the case was given from us to RERA March, 5th. 2008.

Just 5 days after our complaint reached RERA Dubai Al Fajer Properties started on March 10th, 2008 to write us absolute aggressive letters over Denton Wilde Sapte, lawyers of Al Fajer Properties, who forced us again to sign and agree to this incomplete and full of misleading informations peppered document , called by them Contract. Al Fajer Properties extort us again, if we will not do so, they terminate our rights in our Apartment and they wiil refund our 3 installements, already in 2007 transfered to them from Nakheel over DMCC.

Our lawyer answered and told Al Fajer Properties that the dispute is laying in the hands of RERA Dubai . Within this advise to Al Fajer, the comlete letter to RERA with all documents was given to Al Fajer Properties by our lawyer.

Al Fajer Properties ignored this advice.

Their answer was March, 18. 2008 simply sending a cheque with the sum of refund ( total the 45 % installemnet we already paid) via courier to our lawyer.This cheque was not taken and accepted from our lawyer and returned to Al Fajer Properties.

After they got the cheque back, Al Fajer Properties take this as reason to write a letter that they will not longer accept our lawyer .

Since that time our money was still in their hands, we couldn´t ask to give it back, because the extortion out of their letters was, if we take it, the termination in our rights will be done.

Within our correspondence before we have asked Al Fajer Properties to deposit our monies on an escrow account to secure it , they didnt follow this advice.


Instead of staying to 100 % agreement we have with DMCC, Al Fajer Properties tried to kick us out with illegal methodes.

Al Fajer Properties breached the valid agreeement, to deliver us the Apartment in a 100 % Residential Building as agreed at the transfer over DMCC ( 100 % Government).

Our unit today, if residential like we purchased at Nakhee in 2005, is worth 2,2 Mio. AED.

We are from Europe and at the time we bought and paid our 45 % , we had to convert Euro in AED,the currency convertion at this time for the named 45 % ( of total 775.000) was 74.000 Euro.

The offered refund of Al Fajer Properties is 345.000 Dhs our payment we already paid to Nakheel ( 45 % of 775.000 ), which is today 60.000 Euro.

3,5 years without interest, 14.000 Euro currency loss, no apartment plus additional cost for our lawyer , mental stress and destroying us the positive image of Dubai.

Al Fajer Properties is causing us by breaching the agreement a damage of around over 1,5 Million AED. This is a damage status until January 2009.

Part II of this story and why this nightmare is still going on ,will be published soon, the stroy is not at the end


Disclaimer:
Each point of this story is true, can be witness by original documents and other evidence any time by the author.
The victims of this case have tried everthing to resolve the matter in an diplomatic on real existing facts based way with Al Fajer Properties and the lawyers of Al Fajer Properties. Al Fajer Properties and the Lawyer of Denton Wilde Sapte have not been willing to compensate the damage , instead of this they furtheron call their actions lawfully and have meanwhile extent the extort to the victims of this case.
As Al Fajer Properties themselve discribe in letters their actions in this case lawfully, the author of this story follow this statement, to present this lawfull called acts by Al Fajr Properties in the public.

If you wish any further information about the actual status of this case, please do not hesitate to contact us.

DZ - Al Fajer - ACI

Comment by Sarah

LAST NEWS about the people behind the mysterious game around Ebony and Ivory Tower Plot H3 and G3 Jumeirah Lake Towers - Al Fajer Properties - Dynasty Zarooni

#UNDER C: JBC (9 Towers), 41-46F Com, 149-167m, Plots G2, V1, Y1, N3, W1, H1, G3, H3, L1 - Page 15 - SkyscraperCity

AHHHHHHHHHHHAAAAAAA........seems to be A "FLIPPER" Connection...good friends of ACI

original published:

http://www.dc-epaper.com/dc/dch/2008/08/25/ArticleHtmls/25_08_2008_101_009.shtml
S anjay Chimnani, one of the partners in Bottles and Chimneys, a popular pub in Hyderabad, can do without help from his mentor Kabir Mulchandani, owner of Baron International, the company that pioneered colour TVs and music systems under the brand names Aiwa and Akai. After that shut shop, Mulchandani started doing real estate business in the Gulf.
Now, Dubai's Real Estate Regulatory Authority (RERA) is probing Mulchandani's operations after nearly 30 NRIs from India, Russia and the UK complained online that he had misled them by showing a different property and selling them another. He is reportedly accused of having done other fraudulent deals. You may wonder what the connection is with Sanjay Chimnani. Well, Chimnani worked closely with Kabir Mulchandani in Mumbai after which he came to Hyderabad for a few years to market the Aiwa products. Though this venture started off with a bang, it vanished without a whimper.

Next one heard that Sanjay Chimnani was launching B&C in a grand way. He put his heart and soul into pro moting it. But within a short span, he left it all to his partner Sanjay Batla to do real estate business in the Gulf. It was alleged that Sanjay had joined Mulchandani's real estate company, Dynasty Zarouni.

Now with Mulchandani being probed, Chimnani is back in the focus. "He has no links whatsoever with Mulchandani any more, he moved away to be part of a German company," said Sanjay Batla, Chimnani's partner at B&C and Global Properties, the first Indian franchisee of ACI Real Estate, an affiliate of German investment company Alternative Capital Invest GmbH.

Said to be in Italy now, Chimnani started looking for other options after supposed differences cropped up with Mulchandani with regard to his style of work. Chimnani is associated with ACI Real Estate as its joint managing director.

Interestingly, ACI boasts of a portfolio which includes residential, commercial, leisure and retail developments in prime locations in Dubai, Abu Dhabi, Ajman and other emerging cities across the UAE.

"It is impossible that someone can indulge in such kind of malpractices in the real estate business," Batla said, defending Mulchandani, while he vehemently denied Sanjay Chimnani having anything to do with Mulchandani.

Repeated attempts to contact Sanjay Chimnani failed. But he is expected to be back in Hyderabad next month to concentrate on real estate business developments here

A Statement from Dynasty Zarooni Dubai - September 20. 2008 ?

original published:
http://journals.aol.com/jnthnjon3/dynasty-zarooni-dubai

Dynasty Zarooni Dubai:

"UAE Dynasty Zarooni Expose'"

With the kind of investment going on in Dubai, a small property firm Dynasty Zarooni is creating huge trouble for investors from various regions. The market is already talking about it, the Dubai Authorities are investigating it, UAE and International tabloids are running news on one of the owners named Kabir Mulchandani. From Daily Telegraph to UAE National and on towards Indian tabloids, they are creating headlines.The episode started with Dynasty Zarooni (R) misrepresenting their project status on the famous chain of Ebony & Ivory brand name. Dynasty Zarooni flew around pictures of their project at Intermediary/Advanced Level Stages, when the media discovered that the truth was grim and far from what was being advertised.And so opened the confusing scenario which has also put a US Investment Body in a compromising position. Compromised because Investment Bodies mostly carry public investments for a fair share of the returns.It has had minimal correspondence with Dynasty Zarooni as the office spokespersons at Dynasty Zarooni Corporate Offices are unavailable. The web is full of discontent for International Investments attached with Dynasty Zarooni as there are tons of stories revloving around their projects. There are blogs, videos, tabloid features, newspaper headlines and Real Estate Authority's gray stance on the subject.There is absolute abhorrence over the amalgamation of mixed information everywhere.I have had the chance to cover various mismanagement and misinformation scandals worldwide and needless to say we are witnessing another colossal clandestine over there this year.For further advise on planning and managing your investments, please contact me
on my email.

________________________________________

The direct
Statement from Dynatsy Zarooni to the above

Comment from dynastyzarooni 9/20/08 11:10 AM Permalink

Mr.Jonathan,

Dubai is a booming market and Dynasty Zarooni boasts business value of upto 21billion AED.
We have dozens of projects underway.
There was a major muck up by Gulf News when they published the wrong pictures of our project.

I am very apologetic that this happened and I assure you that these projects are going to be completed.

As for the mismanagement, I think we all make mistakes and we have made ours.

Our agents will be in touch with you after our RERA investigation is over.

It is true we were denied entry into an international market and we are finding out about the details next week.

I assure you that we shall revise ourselves and our objectives.

I am sorry if you feel your investment went down, but we shall make sure of securing your next investments.

Regards,
N.Vishran
CEODynasty Zarooni LLC

Update :Buyers are still angry - Just another Blog about Ebony and Ivory Tower Dynasty Zarooni - Al Fajer Properties

Advertisement for Ebony and Ivory Towers September 2008 -

Jumeirah Road Dubai - Dynasty Zarooni / Al Fajer Properties

Picture 7starsDubai Spetember 2008

original published:
http://reradubai.wordpress.com/2008/09/22/dynasty-zarooni-fails-to-trick-rera-case-critical/


DYNASTY ZAROONI FAILS TO TRICK RERA. CASE CRITICAL

Dynasty Zarooni is trying to cover its loose ends but to no avail. The real estate company still has not come up with a decent explanation for its disgusting trick to misquote facts about the ebony and ivory project. Their fake pictures issue still hasnt been addressed by them, insted they go ahead and make these videos and post some insipid articles to make themselves look better.

They’d rather just give out the truth about their misrepresenting tactics to avoid all of the negative publicity.

They really do think the investors are stupid to forget about it.
Please give out an explanation

Investors, please confirm videos. In the meantime, they are releasing such positive made up thing about themselves:

These articles are such a preliminary hoax that even someone with a limited IQ can see right through them:

http://www.mumbaimirror.com/net/mmpaper.aspx?page=article&sectid=5&contentid=20080917200809170312369856aecaf73

http://archive.gulfnews.com/business/General/10240118.html

This is a shameful act

___________________________________


Brief Background:

A few days ago, a number of comments and questions were posted on various Dubai real estate blogs regarding some of the activities of Dynasty Zarooni for the sale of the Ebony and Ivory
Towers that are being developed by Al Fajer Properties.

Dynasty Zarooni deemed this a smear campaign and issued a strong statement through Gulf News about getting a clearance from RERA, however the initial questions remained unanswered by them.

I conducted an independant but simple and unbiased investigation of the case. The following is a factual representation of my alarming findings.

The questions raised here need to be answered in order to safe guard investor rights and protect Dubai’s reputation.

Violations of RERA Laws Committed by Dynasty ZarooniMisrepresentation in the Promotional CampaignUnauthorized Activity (Not in accordance with the commercial license Real Estate Brokerage)

1. Misrepresentation in the Promotional Campaign

Under RERA Laws, an Agent/Broker violates the law by giving misleading/fabricated information or using false images and creating misrepresentation for an Off Plan Sales Promotion Campaign - a criminal offence in U.A.E.

read more: http://www.zaroonidynasty.wordpress.com/

http://zaroonidynasty.wordpress.com/2008/09/15/biggest-dubai-property-scandal-revealed/#comments

or: http://www.dynastyzarooniivory.wordpress.com/
http://dynastyzarooniivory.wordpress.com/

or in Blogs below: original published:
http://reradubai.wordpress.com/footage/

FOR FURTHER INFORMATION, PLEASE VISIT SOME OF THE UNDER MENTIONED BLOGS:

http://dynastyzaroonifraud.wordpress.com/

http://dynastyzarooniscam.wordpress.com/

http://dynastyzarooniscandal.wordpress.com/

http://zaroonidynasty.wordpress.com/

http://zaroonidynastyfiasco.wordpress.com/

http://zaroonidynastyscam.wordpress.com/

http://dubaiscams.wordpress.com/

http://dubaiscandals.wordpress.com/

http://kabirmulchandani.wordpress.com/

http://masterofscams.wordpress.com/

http://uaefraud.wordpress.com/

http://dynastycom.wordpress.com/

http://dynastyinfo.wordpress.com/

http://dynastyzaroonirealestate.wordpress.com/

http://dynastyzaroonijumeirah.wordpress.com/

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http://dynastyzarooni.blogspot.com/

Huge Delay - DMCCA - Jumeirah Lake Towers master developer encounters some ground realities

JLT master developer encounters some ground realities
By Nicole Walter, Senior Features Writer

original Published:

http://www.propertyweekly.ae/articles/this_issue/20009436.html

Caught between a 'lake' and a hard place is DMCCA, the master developer of Jumeirah Lakes Towers. It is a situation that DMCC is trying to get out off as it tries to find enough space available for construction activity to take place, but without hampering the movements of those residents at the completed towers.

"Any time you mix construction traffic with personal traffic it's a challenge," states Bryan Wilson, DMCC's Executive Director Property Development. "It's great to be the first person in, but means a lot of time having to compromise on living conditions until construction is completed."

DMCC had earlier allowed construction vehicles access to the sites where the four 'lakes' would be as a way of keeping them off the roads and clogging up traffic. But now, they are driving on the boundary roads.

"Maybe with a different master-plan you could have done something different, but we have the lakes in the middle," adds Wilson. "The owners feel it is time to focus on the landscaping as people have moved in — so we had to move people out of the lakes."

This has increased the chance of residents crossing paths with construction vehicles. "We've assessed the situation after hearing some complaints and decided to put in temporary lighting to make it safer, as safety is our number one priority for construction workers and residents," Wilson comments.
The four lakes
There are four lakes in JLT: Almas East & West, Elucio and Allure, each supplied by seawater via a sophisticated circulation system. The Elucio will be completed by year-end.

JLT towers come in trios set around the lakes. "We need a cluster of three to be out of the ground to a certain extent to begin the work around them," Wilson informs. "The closing of the landscaping tender package is imminent and what follows will change the feel and look of JLT from a construction site to actually becoming a liveable community.

"There are 14 towers with approval at different stages of occupation. We're now transitioning from around half a construction site and a quarter community to a community by end 2010 when all towers are completed."

There are to be 79 towers in JLT proper and another eight on its embankment. Master planned by Nakheel and taken over by DMCC two-and-a-half years ago, JLT's completion cannot come fast enough as far as Ahmed Bin Sulayem, DMCC's Executive Chairman, is concerned.

"Completion within three years would have been the best scenario for me but each developer faces his own challenges in the construction market," Bin Sulayem notes. "They may have several towers in JLT that they have to manage, so we are putting pressure on them to complete construction as soon as possible.

"We get all kinds of excuses and I can't accept them, especially that we have now moved into our building (Almas). JLT is a prime location, they are not going to find another plot on Shaikh Zayed Road within the next six years — this is the heart of New Dubai where everyone wants to be."

Infrastructure issues

Half of the roads circling Jumeirah Lakes Towers are part of the western-perimeter network project, which is undertaken by the RTA.

"That's out of our control, they have awarded the contract but have one-and-a-half years to finish the roads," says Bryan Wilson of DMCC. "We can't wait for them to finish, so we put up our own temporary measures in the interim."

As regards Internet connectivity for the cluster's residents, DMCC is intent on offering residents a choice, a first in Dubai. "I want practicality for our end-users. I believe that is what Dubai, like Palm Deira is also looking at," says Ahmed Bin Sulayem. "They manage in other countries, so there is no reason why they can't manage here."

Du was supposed to be the sole provider. "We have Etisalat and Du now in one room pressuring them to execute and agreement to share the infrastructure within JLT," affirms Wilson.

Update: The False Story ? in Mumbai Mirrow -Dynasty Zarooni - Al Fajer Properties

original published Mumbai Mirrow

Kabir Mulchandani, owner of Baron International, the company that pioneered cheap colour TVs and music systems under the brand names AIWA and AKAI, and who fled Mumbai after scrutiny by the DRI and Enforcement Directorate, is once again at the centre of controversy.

This time in Dubai.

Mulchandani had left Mumbai for Dubai where he set up a company, Dynasty Zarouni, to cash in on Dubai's booming real estate market.

He markets ready-to-move in properties constructed by a real estate company called Al Fajer.

Mulchandani advertises these properties on his website and invites NRIs to invest money.

Al Fajer is known for its projects in Jumeirah Business Centre 1 and 2 apart from various projects at Jumeirah Lakes and Jumeirah Island.

But now Dubai's Real Estate Regulatory Authority (RERA) is probing Mulchandani's operations after nearly 30 NRIs from India, Russia and UK complained online that he had misled them by showing a different property and selling them another

RERA authorities told this newspaper that Mulchandani's firm had also not followed the local rule of depositing sale proceeds of real estate properties into a government-shared escrow account and instead pocketed the entire money.

At least 20 NRIs, originally from Mumbai, had invested money ranging from US $1 million and above in residential-cum-commercial properties developed by Al-Fajer and marketed by Mulchandani.

The smallest of these properties is approximately 5000 square foot.

One particular complaint cites how Mulchandani allegedly sold apartments in a three-tower complex, showing the two completed towers as the properties that were for sale but allotting ownership documents of the third tower which has yet to come up.

Speaking to Mumbai Mirror RERA's head of legal cell, Imad Husein said, "We have received complaints of 30 investors from India, Russia and the UK. Kabir's company Dynasty Zarouni offered real estate properties at half the market price.

It also allegedly lured investors by misrepresenting a different property in the name of another. Each buyer has invested at least one million US dollars with Kabir's firm."

According to Husein, "We have invited all investors with similar complaints through advertisements in local newspapers to come forward, and have assured them that RERA will play an active role in safeguarding their money under law no 8 in line with the directives of Dubai's ruler Sheikh Mohammed."

Husein said, Mulchandani's operations through Dynasty Zarouni involve sale of over 20 towers each consisting of 40 floors, approximating 20,000 residential and commercial units.

The RERA official said Dynasty Zarouni was also under scanner for irregularities in fund management.

"As per the rules of the Emirates, the money received from investors has to be deposited in an escrow account jointly held by the government with the developer.

The money is released only on delivery of the property.

Kabir Mulchandani and his company did not deposit money in the escrow account and hence it results in a case of breach of contract," Husein said, adding that in such a scenario the developer may vanish leaving investors in lurch.

One of the NRIs, originally from Mumbai, who has filed a complaint with RERA said, on condition of anonymity:

"I was devastated to find that it is illegal for Dynasty Zarouni to collect money without the existence of an escrow account.

Not only does this leave my funds unsecured, in addition I have just been told by Al Fajer properties, the developers, that the total area being committed to me in the contract provided by cis inaccurate and is exaggerated by 30 percent," the NRI added.

Mulchandani could not be contacted.

original published: Munbaimirrow.com

http://www.mumbaimirror.com/net/mmpaper.aspx?page=article&sectid=15&contentid=200808232008082302260752817e4982d

also published: zawya.com

http://www.zawya.com/Story.cfm/sidZW20080824000060/SecMain/pagHomepage/chnAll%20Regional%20News/obj2A17E941-F5E0-11D4-867D00D0B74A0D7C/

The original Statement of RERA Dubai published on the Website of Dynasty Zarooni:

Link:

We, the Real Estate Regulatory Agency, hereby confirm that M/s Dynasty Al Zarooni Real Estate LLC is a licensed entity from the Department of Economic Development holding License number 597065 and that it does not hold or have any existing or pending complaints or penalties relating to its registration with the Real Estate Brokers and Development Registrar to date, 25 August 2008. This certificate was issued upon the company's request and the authority shall not bear any responsibility.

Whats going on with Projects Al Fajer Properties Jumeriah Lake Towers - Scandal ? - Dynasty Zarooni

posted to 7starsDubai by:

Rohit said...
I have recently bought an office in the ebony tower through dynasty zarooni.

They have been advertising heavily in Gulf News recently.

I want to warn all my fellow investors to beware of the contract that they are signing with DZ. If you check the website of Al fajer Properties, floor plans of their typical floors does not exceed 11,300 square feet, as per the spreadsheet attached to the MOU of sales between Dynasty & Al fajer where clearly sellable area has been mentioned. however Dynasty without any legal grounds and any such permission is adding 30% to the area and are currently selling and advertising even on the web for the floor area to be 14,664 sqft.

So on handover of the property the buyers will be in for a shock and dynasty is no where to take responsibility because they take their premiums out of the contract long before.

I have made enquiries neither the developer Al Fajer Properties nor DZ has an escrow account, please advise what legal action can I take at this stage?

Rohit said...
I recently booked an office with Dynasty Zarouni in the highly advertised Ebony Tower.

I have been baffled ever since I bought it because my office space as per my contract is 14,664 sq ft and I came across a shocking document of MoU signed between DZ and Al Fajer Properties along with the spreadsheet of sales and floor plans which clearly states the floor size to be 11,300 sq ft. This difference roughly amounts to be 30% and is an indigestible difference.

Transparent calculations have shown that DZ has already or in some cases is currently receiving premiums from the contract.

The part that sends a shiver down my spine is that DZ does not have an escrow account

With the kind of scams going around these days, I have a series of questions starting....1)

What happens if Al Fajer is telling the truth about the floor space and DZ isn’t2)

How do we get re imbursed... blah blah... especially if there is no escrow3)

Who is Hilal Zarouni and Kabir Moolchandani4)

Why is Gulf News mis representing the facts. Isnt it a very credible news source? 5)

What is the procedure for taking legal action! Alot of things don’t make sense here and I hope I can find some answersThere is a big “IF” attached to my presumably new office set up i.e if DZ is not a total hoaxIn one case, I m losing quite alot and in the second one I stand to lose everything.

Confusion!


13 August, 2008 10:38

read more:
http://dynastyzarooni.blogspot.com/

Another Post to 7starsDubai 21.August 2008

Comment:
Please check dynasty zarroni for me....I booked a masive office with them and all they do is make me run around...

I have paid my agent to get the story straight.
They published fake pictures in gulf news.

Please check my company's blog listed below:

http://www.dynastyzarooniscam.wordpress.com/

I need help.


More informations also here:

http://www.skyscrapercity.com/showthread.php?t=290912&page=13

http://www.skyscrapercity.com/showthread.php?t=138300&page=3

http://www.skyscrapercity.com/showthread.php?t=139716&page=2

http://www.skyscrapercity.com/showthread.php?t=567903

Dubai's off-plan property premiums surge

Dubai's off-plan property premiums surge

By Anjana Kumar on Sunday, August 03, 2008 All eyes are on completion and delivery. Properties nearing completion are commanding the highest premium in Dubai. Villas and apartments are generating premiums of as much as 70 per cent to 200 per cent a year – far higher than the 10 per cent to 30 per cent for completed properties. For Jumeirah Lake Towers the increase has been not less than 70-80 per cent in the past six to eight months, even before handover began. These premiums are one of the highest in the market . At the Villa project, a development by Dubai Properties and Mizin in Dubailand, prices have appreciated sharply in the past two years. The price per sq ft was Dh550 to Dh650 at the end of 2006 for a three-bedroom villa. Now it is in the region of Dh1,000 to Dh1,050 a sq ft – a 90 to 95 per cent increase. A five-bedroom villa was Dh3.6m in December 2006; now it is Dh8m – a little over 100 per cent in a year and a half. For villas at the Al Barari project in Dubailand, the premium has been 200 per cent on off-plan for two years. "The villas initially selling at Dh12m are now going for Dh36m," said Basel Al Kasem, CEO, Al Basel Group. Within off-plan properties, some of the Dubai apartments have been earning a higher return on investment than villas depending on the location and developer, say brokers.

DUBAI - Delays hit building projects - Only one in five construction projects is likely to finish on time

original published The National

Last Updated: May 24. 2008 10:51PM UAE / May 24. 2008 6:51PM GMT

DUBAI // Only one in five construction projects is likely to finish on time, as shortages of materials and skilled workers – and an overabundance of red tape – take their toll.

Industry experts said few of the 4,000 or so projects currently under way would be handed over to clients on the scheduled date. The emirate is currently undergoing a construction frenzy and as the pace of building quickens, so do the risks of delays.

Residential and commercial developments along with road, bridge and utilities projects are all competing for the same resources, compounding the problem.

The same issues could crop up in Abu Dhabi and the northern emirates of Ras al Khaimah and Ajman, as they launch their own large-scale development plans.

The problem is also beginning to manifest in other Gulf states.Qatar, for example, has had to introduce price escalation clauses into contracts to stem the impact of higher building materials prices.

As a result of the delays, the relationship between builders and clients is starting to sour.

In Dubai, only a handful of projects are being completed to the satisfaction of all parties involved, said Kez Taylor, the managing director of Alec, a local building firm.“Only one in five are being completed on time,” said Mr Taylor. We should be hitting the success factor at a much greater rate than we currently are.”

He said the tensions which this led to had threatened to ripple into delays on other projects.
Successful projects ... are not the norm in this part of the world.

From this, a blame culture develops, relationships break down, people become despondent and don’t want to do repeat business.”

A major factor in delays and its impact on the relationship between builders and developers was the reluctance of clients to make difficult decisions quickly, Mr Taylor said.
Because of bureaucracy, nobody wants to stick their head out and make a decision, he said.

But it is vital that the client takes the lead – it’s their project.

Emil Rademeyer of Proleads, a research firm, said more than 90 per cent of projects in Dubai were on average two months late.

I don’t think I’ve ever heard of a project being handed over early – that’s probably the question ... and I’m pretty certain the response would be very few.

Mr Rademeyer said that late changes in design were a common problem among projects in the region, which led to a complete project overhaul in some cases. The situation was also compounded by a severe shortage in good quality contractors, which impacted on the standard of construction.

While there are the challenges of materials and resources shortages, much of the problem lies with changes to design – I’ve heard of cases when a project has almost been completed but then the owner decides they don’t like it and so they start over,” he said.

And because of the shortage of materials and contractors, clients are sometimes just taking what’s available, which might not be the best quality and is a big threat to the final product.”Developments in Dubai also face severe delays in connecting power, water supplies and telecommunications, with many forced to rely on temporary backups.“

There are internal risks when dealing with partners, but there are also external risks that affect a project,” said Ali Hamdan, the corporate finance manager at Sama Dubai, the developer behind The Lagoons project.

“When it comes to a large-scale project such as The Lagoons, success is dependent on dealing with organisations like the RTA (Roads and Transport Authority), Dewa (Dubai Electricity and Water Authority) and Etisalat – if you don’t connect with the infrastructure on time, you get delayed.

Jubeir Shamte, the executive director of the commercial and contracts department at Dubai Properties, which is developing Business Bay, said that clashes in culture and business practices between foreign and local firms also caused problems.

A lot of foreign companies do not understand the culture here, and when you try and bring in culture from other places such as the UK or America, a lot of problems come with it,” he said.“

For example, the concept of partnering is being treated as a new phenomenon, when it is something that we’ve been doing here for many years.”

agiuffrida@thenational.ae

Dubai property market beset by fraud claims

Malaysia Sun

Claims of scams, fraud, and embezzlement are hitting the real estate market in Dubai.

The multi-billion dollar construction craze which has attracted investors from all over the world, has seemingly brought in unsavoury types who have been preying on the never-ending appetites of locals and foreigners lining up to invest in the market.A UK company which claimed to have acquired a 900-apartment plot in the proposed Jumeriah Village project, has reportedly sold off apartments in the plot, with no prospect of them ever being built.
The company, Strategic Property Investment, and its associates, William Cowe and Mark Emlick, are being investigated by Dubai and UK authorities.

Dubai authorities are also investigating the mysterious Al Areifi Tower being constructed at Dubai Marina. As we reported several weeks ago, Khalid Saud Al-Areifi & Partner Co., of Riyadh Saudi Arabia, sold several hundred apartments in the project off-the-plan some years ago, taking full payment upfront.In recent weeks the owners of the apartments have been receiving telephone calls and faxes from Al Areifi representatives in Saudi Arabia advising them construction on the project had stopped and would not be resumed.

Investors say they have been offered their original cost, plus interest, back. We have sighted one of the letters sent which verifies the investors' claims.When we visited the site two weeks ago we found construction in full swing. We contacted the builder on site who confirmed there had been no disruption to the construction and it was proceeding at 'full steam.'Reports are now circulating that Al Areifi sold the site to the newly-formed, Abu Dhabi-based, Eskan Properties.

A report in Gulf News , however quotes a company spokesman as saying, 'We sold the tower on again a week back.'
Having bought their apartments and paid for them in full, well before construction started, investors are now wondering how 'their' apartments could be on-sold, on two separate occasions since.

Several calls to Emaar Properties, the master developer of Dubai Marina, where the project is sited, have not been returned.

Meantime the investigation into the conduct of the former CEO of Dubai's second largest property developer, Deyaar, has been widened.
According to Dubai's Attorney General, Essam al-Humaidan, a second person, Ganesan Krishna Kumar, 49, has been arrested in connection with the investigation. Kumar, originally from India, was a co-founder, and is managing director, of the Dubai-based advertizing agency, Masterbrand (ME) Ltd.,Two other men have also been detained and questioned, but have since been released. Zack Shahin, Deyaar's ex-CEO is being probed in relation to claims of possible embezzlement. Deyaar has more than 1,600 apartments, as well as retail, and office complexes, under construction in Dubai.

The glitz and glamour of Dubai's red-hot property market must be feeling the heat of the latest troubles, coming on top of the debacle surrounding the Damac project on the Palm Jebel Ali.
Damac, which claims to be the largest private property developer in the Middle East, sold apartments off-the-plan in what it called the Palm Springs project, a luxury apartments and resort project on the Palm at Jebel Ali.

Four years after launching the project, Damac wrote to investors saying it had been abandoned as the master developer of the Palm had changed the plans and the project could not now fit the site.Within days the master developer, Nakheel, announced it was unaware of Damac's claims, and that the changes which Damac referred to had been made ten months earlier, and Damac was happy with them.

A hastily convened meeting by the authorities, involving Damac and Nakheel, resolved the matter, with Damac agreeing to proceed with the project. That action averted a class-action lawsuit against Damac by at least sixty angry investors, most of whom were from the UK

Comments

Comments on this story

By adel, 04-26-08, 02:31 AM
An advice on Duabai real estate marketI want to give a little advice to prospective investors in Dubai. Ignore those fantastic property offerings, with incredibly low prices and very long-term and low-cost finance. Believe me guys, the price of cunstruction material and labour, rents, oil...etc have made such projects unviable. Such projects are not economically viable anymore and the little investor will, at the end, lose his or her investment. Watch out !

By Anonymous, 04-24-08, 10:03 PM

Dubai property market beset by fraud claimsI have an apartment in this project which I bought off the plan and paid for in full. As far as I am concerned I am the owner and here I read my apartment has been sold to somebody else, twice! What is going on here? And what about the mighty Emaar. They are overall responsible. Surely they can’t sell these plots off to fraudsters like this and not even answer the phone???? Investors like me just sit out here and get these scraps of information from the news media (thanks! I’m not having a go at you, without you I wouldn’t even know I was being pick-pocketed). Where are the authorities? They shouldn’t just be investigating Deyaar they should be investigating Al Areifi.

By Anonymous, 04-25-08, 05:07 PM

Dubai should act against scamsWhere there is a lot of money the smarties arrive to scam the punters. This al areifi crowd have really done a number on people. The Dubai government shouldn’t stand back and let them get away with it. Selling all the apartments to individuals and then selling the whole building to somebody else is just straight forward theft and fraud. The Saudi Arabian authorities should act as well because this is a Saudi company. What confidence can people have in these gulf markets when this sort of nonsense goes on?

By Anonymous, 04-25-08, 08:09 PM

Few bad apples doesn't mean you throw out the whole caseYes there are scams and frauds in Dubai, just as there are everywhere. Mostly though I think investment in theis place is safe. The government needs to stamp out the bad guys because it affects how people perceive the market.

By Anonymous, 04-28-08, 01:50 PM

These thugs have to be stopped. Whilst these guys are living the lavish lifestyle, we are repaying our loans to pay for them to do so. I am still pursuing these people and find it a huge disappointment that UAE have no laws against this or protection for people who invest from abroad. It was particualrly enlightening that these guys are residing at one of the sheikhs hotels.. Does that mean he thinks all of this is ok?????

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

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.

Governance and crisis control Dubai

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.

Buy Back Complaints Al Fajer Properties - Damac - Nakheel Comments ... to "Buy-Back" Practice Devloper Dubai Property Market

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

Shaky foundations

 

original published ArabianBusiness.com

http://www.arabianbusiness.com/516690-shaky-foundations

by Rob Corder on Wednesday, 16 April 2008

Prepayment for any products or services has always warranted a discount. Pay for a flight or hotel room up front, and you expect to get a cheaper price.

Business-to-business transactions invite even deeper discounts for companies prepared to stump up cash in advance.

The reason is simple: prepayment means positive cash flow, which can be worth a considerable percentage of any transaction.

Buying property off plan is the ultimate prepayment scheme and, like all others, it comes with a discount. The reason for the discount is two-fold. First, the developer selling property benefits from positive cash flow. In some cases, sufficient property can be sold to completely finance the building project.

Secondly, there is risk involved for the buyer, and this is built into the price.

The early days of the Dubai real estate boom, when non-Emiratis were first allowed to buy property, was a time of extreme risk. The legal system had not even been changed before developers were selling forms of ownership.

I can recall people being given contracts all but scribbled on the back of a fag packet that promised the bearer that they would own a certain property when the law allowed them to do so.

His Highness Sheikh Mohammed, who was Dubai's Crown Prince at the time, had given his word the law would change, and for early investors - typically buying from government-owned developers - that word was good enough.

These early investors were right. They took the risk and netted massive rewards. Villas selling for $1.5 million when Palm Island was first announced are now being advertised for closer to $15 million.

The developers also won. Dubai government-owned Nakheel's business was almost entirely founded on the cash generated from selling the first Palm Island properties off plan. Emaar, also partially owned by the Dubai government, had earlier pulled the same trick with the city's first freehold developments for expats: Emirates Hills and Emirates Lakes.

Fast-forward six years and, while the law has been considerably tightened regarding foreign ownership, new risks have emerged in the off plan market.

Several tiers of operators have emerged. Developers such as Nakheel and Emaar have been upgraded to master developers. Smaller developers, some of which have become giants in their own right, buy plots from the master developers on which to build their own skyscrapers or villa complexes.

Investors or private home buyers can buy from master developers, sub developers, or real estate brokers that buy and sell ownership rights in the same way as futures traders sell ownership of coffee beans.

And the vast majority of speculators have as much intention of ending up holding keys to a home as traders intend to own tonnes of coffee beans. They are buying and selling paper, not property.

This house or cards has been underpinned by real estate values running ahead of the cost of building property, and the willingness of people to pay ever-higher prices for it.

But these foundations are being attacked from several directions.

Construction costs rose at about twice the rate of inflation in 2007, up around 20% according to research from international consultancy EC Harris. The price of steel reinforcement rose by 46% and structural steel gained 38%, while cement prices ended the year 30% higher.

The cost of steel in the UAE has continued to soar - up 35 percent since the start of the year. And there are shortages of many raw materials used in construction, causing costly delays to projects.

Staff costs are rising due to inflation and competition for workers. Gulf currencies, which are pegged to the US dollar, are weakening. The Indian rupee, the Euro and the British pound are all strengthening, making the GCC a less attractive place to work for citizens of countries that typically provide all the labour for the construction industry.

Money is also getting more expensive in the wake of the global credit crunch. Central banks across the Gulf have been cutting base rates in line with cuts at the US Federal Reserve, but these rates have not been passed on to businesses as banks shy away from making risky loans.

Selling bonds - effectively borrowing from the private sector and wealthy individuals - has become common to finance projects. But confidence is ebbing away and these bonds will need to offer higher and higher guaranteed rates of return to attract buyers. The money to developers is again more expensive.

But the bunker buster that could blow the foundations of the off plan market apart is consumer confidence. Until last month, investors were unconcerned about holding the ownership rights to a property that would be built in the future.

Supply was low, demand was high, and real estate prices looked like going up forever.

But now there are stories that properties will not be built. There are stories that developers would rather compensate people holding ownership rights, than build the properties that they have bought.

Damac Properties' Palm Springs development was the first cancelled project to break into the open. The shockwaves were felt as far away as London, where investors threatened to sue the developer unless the properties they had paid for were built.

Palm Springs should have been completed by the end of last year, but Damac postponed construction of the homes, and finally cancelled it completely in March. They offered to buy back the ownership rights to the properties at a premium of 6 percent per annum for every year since investors bought it.

An investment of $1 million when the project was launched five years previously would only be bought back for $1.33 million - hardly the return that the rest of the Dubai property boom was delivering over that period.

Damac claimed the cancellation was due to planning changes imposed on it by Nakheel, the master developer of Palm Jebel Ali on which Palm Springs was due to sit. Nakheel denies responsibility.

It is possible that Damac has fallen into a negative equity trap where the revenue it raised from the sale off plan of the Palm Springs development is no longer sufficient to build the project at a profit.

Five years on from the launch of Palm Springs, it is cheaper to buy back the ownership rights at 33 percent more than they sold them for than to build the properties.

UAE daily Emirates Business on Tuesday unearthed two other developers that claim to be in a similar situation. Al Arefi Marina at Dubai Marina and the A1 Tower at Jumeirah Village South, have been put on hold or cancelled, according to the paper, although the developers responsible for the projects have not made the decision on whether to buy back ownership rights, or continue to build what might be loss-making towers.

If buy-backs become common, billions could be wiped off the value of ownership rights overnight. Owners would be faced with a terrifying choice: sell at a discount rate back to the developer - perhaps 30 percent below today's values - or press for the development to be completed, which might bankrupt the developer leaving the owner with nothing.

The rising costs afflicting the construction and development industries show no signs of abating. The only release valve might be a sharp economic slowdown, which would be as likely to send weaker developers bust as spiralling inflation.

The risks therefore are growing, while the potential rewards are shrinking in buying property off plan. The attraction of prepayment is vanishing for buyers, while becoming ever more critical to the survival of sellers.

The days of multi-billion projects being sold off-plan within hours of their launch could be over. Expect buyers to show considerably more caution in the future.

Rob Corder is the Editorial Director of ITP Publishing Group.