Monday 30 November 2009


Dubai's property market could plummet by up to 30 per cent from current levels - already down 50 per cent from peak - and may take more than a decade to recover

Dubai government washes its hands of $59bn debt built up by Dubai World

The Dubai government refused to guarantee the huge debts built up by its conglomerate Dubai World, dashing investor hopes that the latest episode in the global financial crisis might be swiftly resolved.

The comments were made as the region reopened for business after the Eid holiday and local stock markets fell sharply.

Creditors, including several British banks, had been eagerly awaiting some clarification from Dubai officials since the brief announcement ahead of the long weekend on Wednesday night that Dubai World was seeking to defer repayments on its $59bn (£36bn) debt pile, but there was no comfort on offer. British banks have a $50bn exposure to the United Arab Emirates and high street names including Lloyds, HSBC and Royal Bank of Scotland have formed a creditors' committee seeking urgent meetings with Dubai officials.

In an interview on local television, the director general of Dubai's department of finance, Abdulrahman al-Saleh, appeared to suggest that investors only had themselves to blame for the unfolding crisis. "Creditors need to take part of the responsibility for their decision to lend to the companies," he said.

"They think Dubai World is part of the government, which is not correct. Dubai World was established as an independent company; it is true that the government is the owner, but given that the company has various activities and is exposed to various types of risks, the decision, since its establishment, has been that the company is not guaranteed by the [Dubai] government."

Dubai World is the largest of a handful of state-controlled companies and owns assets such as a profitable ports business that includes the former P&O, the QE2 liner, and the property firm behind some of the more outlandish developments of the last decade.

Fears that it could potentially default on its debts sparked turmoil on world markets at the end of last week and concerns that other heavily indebted states could be affected as investor confidence eroded, with much of the focus on Greece, Ukraine and the Baltic states.

The central bank of the United Arab Emirates yesterday sought to restore some calm by providing an emergency facility to shore up local banks, and foreign banks operating in the Emirates.

The International Monetary Fund today welcomed the move and said it continued to monitor the situation.

Sunday 29 November 2009

Dubai’s $59 Billion Default Sends Tremor Through Global Financial System

Dubai’s announcement on Wednesday that it would be delaying by “at least” six months the maturity date of $59 billion in bonds issued by the city-state’s largest state-owned company, Dubai World, has sent global shares tumbling. The market reaction to Dubai’s massive debt default is partly explained by the exposure of European and Asian banks to DP World and its tourism subsidiary, Nakheel.

The real reason for the falls, however, is that Dubai’s apparent insolvency confirms that default by hyper-indebted government borrowers is now a real risk right across the globe, especially in the Middle East and Eastern Europe. Such a default would not only mean an immediate worsening of the already brutal post-crash conditions suffered by millions of workers in defaulting countries, but would usher in a second, and probably worse, phase in the global financial crisis.

If countries like Dubai begin to fail, who will save them?


As one financial crisis recedes, another may be beginning. In Dubai this week, we've had a foretaste of what may be to come as governments around the globe seek to grapple with the explosive growth of fiscal deficits and public debt.



Like everyone else, my regard for the miracle of Dubai's fast-evolving skyline has always been tempered with a high degree of scepticism. As a monument to the vanity and hubris of Sheikh Mohammed bin Rashid al-Maktoum, Dubai has long looked like an accident waiting to happen. Such has been the pace of development that nobody could have been surprised by the debt default now threatened. Only the assumed support of Dubai's richer neighbour Abu Dhabi, which is now far from certain, has prevented it happening sooner.

Yet the important question for markets today is not whether Dubai and Sheikh Mohammed can survive the sandstorm; in fact, that is almost irrelevant. Dubai's debts of $80 billion (£48 billion) are a tiresome and unwelcome irritant which will cause further write-downs among western banks, but in the scale of things not of great significance: Britain is planning to raise more than three times that amount in the debt markets in this financial year alone.

Rather, the issue is whether this folie de grandeur of a desert kingdom is just an isolated, and therefore containable, incident, or a more worrying outrider for a wider sovereign debt crisis which might eventually engulf major, advanced economies. Everyone thought the financial implosion of the last two years was largely behind us – yet Dubai has reminded us that if nations start defaulting, then it may be about to enter a new and even more frightening phase.

Think of Dubai not so much as the hors d'oeuvre as the pre-dinner canapé, with the starter reserved for larger economies with distressed fiscal positions, such as Greece and Ireland, moving for the main course on to Japan and possibly even Britain and the US.

Already, there are rumblings. The cost of insuring sovereign debt against default has risen across the board, and for countries thought particularly at risk, bond yields are on a firm upward march.

Across the developed world, public debt is set on an explosive course. According to new estimates by Moody's, the credit ratings agency, the total stock of sovereign debt worldwide will have risen by more than 50 per cent between the start of the financial crisis in 2007 and the end of next year, to $15.3 trillion.

But this is just the beginning. On current projections, that total is set to rise by at least a further 50 per cent, before finally peaking in four to five years' time, and then only if governments have by then taken remedial action.

These are uncharted waters, quite without precedent in peacetime. In seeking to address the financial and economic crisis of the past few years, countries have come close to bankrupting themselves. It is as if, in treating the patient, a physician has infected himself with the same deadly disease.

Perhaps oddly, financing these fast-growing deficits has not so far been a problem, at least for the major advanced economies. Risk-averse investors have spurred high demand for sovereign debt, in the possibly misguided belief that there can be no haven safer than assets guaranteed by taxpayers and the ability of their governments to print money.

More perversely still, the crisis in Dubai has caused a renewed flight to the perceived security of G7 government debt. Money is being withdrawn from the periphery and reinvested in US Treasuries, German bunds, and even British gilts.

But if the banking crisis is anything to go by, that's not where the story ends. There, too, the implosion began with smaller, obviously flawed bit-players, who had self-evidently grown too rapidly and overstretched themselves.

Markets dashed to withdraw funding from Northern Rock, but in transferring the money to the likes of the Royal Bank of Scotland found that they had invested only in something even more unstable. The Rock, it turned out, was just an outlier in a systemically unsafe sector.

If Dubai is the sovereign debt equivalent of Northern Rock, then Greece might be its Bear Stearns and Japan its Lehman Brothers. But why stop there? For Citigroup, think the US, and for RBS and HBOS, think Britain. Only there would be no one to bail out their creditors if America or Britain showed signs of defaulting.

Of course, I am exaggerating to make a point. Nobody thinks this a likely outcome, even if it ought to be added that nobody thought the semi-nationalisation of RBS and HBOS remotely likely either. The judgment of the markets is that on present trajectories, the sovereign debt burden is just about manageable. But it's touch and go.

The credit ratings agencies are just itching to downgrade some of the big hitters, alongside the obviously more vulnerable, with Britain and America the first in line. If the markets start to demand a premium for their money, that's going to make the task of economic recovery and fiscal consolidation that much tougher. At the risk of sounding like a scratched record, this crisis is not over yet – not by a long chalk.

Friday 27 November 2009

Dubai Default - collection of links

No one saw this coming ...

From Bloomberg: Dubai Debt Delay Rattles Confidence in Gulf Borrowers

Dubai is shaking investor confidence across the Persian Gulf after its proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001.
...
Moody’s Investors Service and Standard & Poor’s cut the ratings on state companies yesterday, saying they may consider state-controlled Dubai World’s plan to delay debt payments a default. The sheikhdom, ruled by Sheikh Mohammed Bin Rashid Al Maktoum, borrowed $80 billion in a four-year construction boom ...
And a few articles from the WSJ: Dubai Starts to Untangle Dubai World Fallout

And European Banks Seen Exposed To Dubai World
Most banks on Thursday said their exposure to Dubai and Dubai World is small or declined to comment, but Credit Suisse analysts estimate European banks have about $40 billion in exposure to debt issued by various Dubai city-state entities, including Dubai World.
And from December 2008: Citi Voices Upbeat View on Dubai (ht jb)
With questions about Dubai's looming debt obligations swirling, Citigroup Inc. said it had raised $8 billion for the Persian Gulf city-state over the course of the past year and still had a positive outlook on its economy.

Citigroup Chairman Win Bischoff was quoted in the bank's statement Monday as saying Citigroup continues to see Dubai as among its "most significant markets."
When there are bad loans to be made, apparently Citi never sleeps.

UPDATES: Brad DeLong suggests it might be Time to Reread the History of Austria's Creditanstalt in 1931...
Interesting time. In Europe, the Creditanstalt's bankruptcy and what followed was what turned the recession into the European Great Depression...
And DeLong excerpts from a Financial Times article by Roula Khalaf: The emirate has a lot of explaining to do

And from Izabella Kaminska at the FT Alphaville: Barclays Capital ‘change their view’ on Dubai
My, my, what a difference a few weeks make.

Earlier this month — when all still seemed relatively well in the UAE emirate of Dubai — Barclays Capital was among those touting Dubai-related debt as a decent investment for clients. The bank even confidently predicted the repayment of the now infamous Nakheel sukuk.

In fact on November 4 — the day Moody’s slashed its ratings on five Dubai government related entities — BarCap analysts wrote:
We expect several developments to act as positive catalysts for Dubai’s sovereign spreads. First, the likely repayment of the Nakheel sukuk in December. Second, Dubai’s ability to raise the second USD10bn tranche with the support of Abu Dhabi. Third, a successful conclusion of the merger between Emaar and Dubai Holding, as well as a solution allowing mortgage providers Amlak and Tamweel to resume lending.

On that basis, we recommend a long position in Dubai sovereign credit and see today’s negative price actions as an opportunity to buy.
There is much more at the link.

Dubai default is about to be announced

Dubai Holding credit-default swaps rose to 1,175 basis points from 1,085 basis points, CMA Datavision prices show. CMA started to track Dubai credit swap at the beginning of this year.

Lending and investment banking in the Gulf are declining as oil prices and stock markets in Dubai and Abu Dhabi are hit by the worst global economic slump since the 1930s. Dubai is also bracing for a real-estate slowdown after a five-year boom as banks cut back on mortgage loans and speculators exit the market.

The largest state-owned companies in the United Arab Emirates -- of which Dubai is one of seven sheikhdoms -- have $20 billion of debt due this year, according to a Merrill Lynch & Co. report published in October.

“Will Abu Dhabi’s government, or even the federal government, follow this step by supporting banks in other emirates?” analysts led by Sofia El Boury at Shuaa Capital PSC, the U.A.E.’s biggest investment bank, wrote in a note released today. “At this point, we do not have a clear direction of how things will proceed.”

Thursday 26 November 2009

A view - Lisa Strotts


IT was a bubble waiting to burst. For all the glitz and glamour, something about Dubai made me feel distinctly uncomfortable.

When I first visited four years ago Dubai was already a good few years into its frenzy of construction.

The city seemed to me no more than a dusty building site - it screamed environmental disaster.

Everywhere luxury hotels, apartment complexes and more were being thrown up with gay abandon.

As we toured one concrete and glass monstrosity after another I questioned who would fill the thousands of hotel beds.

The scale of the construction came crashing home to me, literally, as I took a breather from a late party at the luxury One & Only Royal Mirage Hotel.

It was 3am and as I strolled down to the beach the sound of the sea was drowned out by hammering.

Guests paying thousands of pounds were trying to sleep as workers toiled away building a hotel next door.

Millions of Brits WERE enjoying holidays in Dubai - drawn by the attainable luxury promoted by hotels including the iconic sail-shaped seven-star Burj Al Arab hotel.

Scorching weather was a given, hotel standards blew traditional Med resorts out of the water - if you didn't fancy any culture or natural wonder it was a great bet.

But as time went on and tourist numbers increased the nagging feeling kept returning. Why, four years after I first saw man-made archipelago The World, was it unfinished and unsold?

Deals to hotels previously thousands of pounds a night began arriving in my inbox.Dubai was on sale.

With the credit crunch, visitor numbers plummeted.

Officially, Brit visitors are down four per cent this year - unofficially, travel experts say it is nearer 15 per cent.

The famous QE2 ocean liner retired last year by Cunard, supposed to become a floating luxury hotel, may end up on the scrap heap.

Plans for Dubai versions of four American theme parks are now on ice.

The practice of pumping salt back into the sea from desalination plants has allegedly all but destroyed aquatic life close to shore.

Apart from sunshine and expensive shops, I can't see a reason to visit Dubai and many other destinations offer that - and more.

Until Dubai offers more than just ostentatious hotels with views of cranes its troubles could get a LOT worse.

What Dubai World owns?

What Dubai World owns

DUBAI PORTS WORLD: World's fourth largest port operator whose investments include Port Of Tilbury in Essex, Southampton Container Terminals, Churchill Dock in Belgium and Port Of Djibouti in Africa.

NAKHEEL PROPERTIES: Developer of The Palm Jumeirah (including Atlantis, The Palm hotel), World Islands, Universe Islands and owns retired ocean liner QE II.

LEISURE CORP: Owns PGA European Tour venues such as Jumeirah Golf Estates and South Africa's Pearl Valley Golf Estates.

ISTITHMAR WORLD: Dubai World investment arm that owns American department store Barneys.

Dubai World spent the boom years hoovering up trophy assets around the world, including golf courses and hotels.

Their subsidiaries own everything from Barneys department store in the US to the QEII liner. These could now be sold off as Dubai's sheikhs scramble to raise cash.

The financial problems stem from a massive bubble in Dubai's housing market - and the Ј36billion debt taken on by Dubai World during their buying spree.

Dubai is unable to repay $70 bn of debt... Another crisis?

Debt problems in Dubai struck financial markets hard on Thursday, sinking global stocks, lifting safe-haven bonds and driving the dollar higher.

Gold climbed to a new record high but fell back as the dollar rose. European shares had their worst daily loss in seven months.

Banking stocks came under particular pressure because of potential exposure to any bad debt in the Gulf, as did shares in European car companies, some of which are part-owned by sovereign wealth funds from the region.

Markets were trading without much input from the United States, where it was the Thanksgiving holiday.

Dubai said on Wednesday it wanted creditors of Dubai World and property group Nakheel to agree a debt standstill as it restructures Dubai World, the conglomerate that spearheaded the emirate's breakneck growth.

The announcement triggered widespread concern about the once-booming Gulf region's financial health, although some investors differentiated between leveraged Dubai and other more solidly wealthy emirates and countries in the region.

But the worries fed directly into a general nervousness in financial markets about the real state of the world economy at a time when investors are also seeking to lock in 2009 profits.

"The Dubai worries have played a major role in rattling market sentiment at a time when the U.S. is closed and we are not getting anything from anywhere else," said Peter Dixon, economist at Commerzbank.

"It is a day in which market uncertainty has been provoked again."

Others, such as Royal Bank of Scotland, said Dubai's bombshell meant investors would now have to "re-appraise the quality of sovereign support for state-owned entities in the region."

Dubai sought to ease some concerns about international port operator DP World DPW.DI, saying its debt was not included in the restructuring.

But markets stayed nervous and the cost of insuring debt through credit default swaps around the Gulf rose.

Tuesday 17 November 2009

Dubai Property Prices Rise 7%

Dubai property prices rose in the third quarter for the first time since the emirate's property market crashed late last year, but are still almost 50% lower than a year earlier, U.K.-based real estate consultancy Colliers International said Tuesday.

Prices increased 7% between July and September from the second quarter -- the first price jump since the market fell from its peak in the third quarter of 2008, Colliers said in its quarterly price index, which collates mortgage transactions on properties open to foreign ownership since the start of 2007.
Here is a post from Emirates City Forum:


I was advised to contact my developer - and request that all PDC's be returned, which I would replace with cheques issued to the new Escrow account. Have been trying to contact the developer, and they say they need more time to set up the Escrow Account. My developer is Sweethomes.

Also, there was a post on Skyscraper City by Ajman_Lover - as follows - about the newly set up AJMAN RERA .... I am reposting below;

A good news for eveybody. From one of my real estate friend, I got some information about AJMAN RERA. The fulflashed office is started in OLD MUNICIPALITY BUILDING & full flash customer supprt office for AJMAN RERA started. Anybody affected peron can visit beween 8 AM to 2.00 PM at their office to lodge your compalint. The staff is very supportive to listen.

Still the office telephone number is not publised officially, so i am not liable for any change/authorised or not. But in interest of my beloved Ajman reputation among investors, anybody can try 009716-7444144 ( Telephone) & 06-7444145 ( Fax ).

One customer support executive communicate me that no need to pay any rest amount direct to developer. Lodge your complaint with the name of developer, who still not register for AJMAN ESCROW account,& this AJMAN RERA seems connected with Ajman rulars Court( Division of property Regulation).

So, give a big hand to AJMAN GOVT. for great initative & don't write bad for AJMAN.

The rest matters better you speak to AJMAN RERA suppott executive regarding PDC cheques return, CONSTRUCTION BASED PAYMENT etc. as I am not a investor.

Dynasty Zarooni is involved in the fraud

Dubai’s Public Prosecution is detaining Kabir Mulchandani, chairman of Dynasty Zarooni Real Estate, amid allegations he defrauded investors of up to 450 million U.A.E. dirhams ($123 million), according to lawyers for the investors, government officials and one of his business partners.

The first case relates to allegations that he conned a small group of wealthy investors into pledging large sums of money with the promise of a hefty monthly return.

The second case involves the selling of property at the AED2 billion Ebony and Ivory development in Dubai’s Jumeirah Lake Towers district. According to Salem Al Shaali, the lawyer handling the case at Dubai-based Al Shaali & Co., Mulchandani took deposits for 20% of the property but failed to deliver the project.

What is happening in Dubai Property Sector?

With Dubai property sector undergoing a transitional phase, companies are reviewing their project strategies, and developers are more cautious with their future investments on projects, as several mega-developments are now being reviewed.

For instance, Nakheel has announced that parts of the Dh.350bn Jumeirah Garden City, the Trump International Hotel, the Tower on Palm Jumeirah, and the kilometer-high tower will be put on hold.

Even work on 'The Universe' will be restricted to preliminary studies, Nakheel said. Decrease in liquidity and financing has led to delay in progress of such projects, resulting in these projects bearing the brunt of financial turmoil. The mega-projects that had earlier brought about a property boom in Dubai, have now been put on hold.

Limitless too, revealed that it is reviewing construction schedule of Arabian Canal. The Head of Dubai's RERA, Marwan bin Galita, said that developers need to review their projects which are yet to be launched for sale. Recession is a very crucial phase, and RERA had been urging developers to do this about a year back, Galita said.

The Chairman of Crisis Management Committee, Mohammad al Abbar, last week said that it would pull back on its building spree due to the current financial crisis. Apart from backing out of its projects, Nakheel has also laid off 500 employees, constituting 15 percent of the company's work-force. All the 500 employees were offered redundancy package, including outplacement support services to assist them during this transitional phase.

Better Homes, Damac and Omniyat too, have followed suit, with Better Homes axing 50 jobs, Omniyat with 69 jobs, and Damac laid off 200 jobs, with the drop in demand for properties.
Meeras however, said that it does not have plans for lay-offs at the moment.

According to analysts, about 819 employees have lost their jobs in the Dubai real estate sector till date, with more to follow. However, the Head of Research and Consultancy at Cluttons, Matthew Green, said that these happenings are not restricted to the realty sector alone, and few other major corporate too, have announced staff reductions.

In the meanwhile, the time is now appropriate for small developers to join hands to bring confidence back into the market, say analysts.

A member of Financial Crisis Committee said that Dubai has been witnessing plenty of defaults on high-end properties with worsening financial conditions, and there are possibilities of merger among smaller developers. Even Head of RERA, Marwan bin Galita, agrees that merger between small companies would bring in more confidence, as good mergers in any sector adds more value to the sector.

The developers, Union Properties and Deyaar, although denied talks about any plans of merger, they were unable to comment on whether the government would order their merger.

Secondary prices in Dubai and Abu Dhabi fell 4 to 5 percent in October from the previous month, while the villa prices of Dubai dropped by 19 percent, under strict lending conditions, according to a recent HSBC statement.

The "off-plan" market is not doing too well, due to market speculations. Few of the banks have stopped financing, while few developers are said to be demanding exorbitant prices. However, the prices of "affordable" off-plan properties may pick-up during second quarter of 2009, if the banks improve on their lending, Bin Galita said.

RERA is likely to implement a new law on registration of off-plan properties next week.

On the whole, Dubai real estate sector has met with stringent mortgage lending measures, liquidity crunch, and real estate slowdown during recent months. The indications of property boom in Dubai, have atleast, temporarily halted, and developers are seen scaling back on their projects, while jobs are cut and property prices have plummeted.

Monday 16 November 2009

Luxury Villa in Dubai

If you are looking for a luxury villa in Dubai, then I recommend visiting the following Luxury Real Estate Companies:

www.dubailuxuryvilla.com
www.dubaishortstay.com
www.dubailuxuryhomes.com
www.emyproperty.com
www.dubailuxurydevelopments.com

How Dubai has lost its sparkle for one UK jeweller

For successful London jeweller Nadeem Osman, Dubai had all the bling in the world. Like thousands of others, he loved the city's fast life, with its sports cars, glitzy shopping malls and super-luxury hotels. And, of course, its sun and fabulous beaches.

The 37-year-old businessman from Balham, South London, holidayed there at least twice a year with his wife and even thought of moving there eventually, away from the rain and cold of England.

So 14 months ago, as an investment on the side, Mr Osman decided to buy four apartments in the city, which he planned to rent and also use as his holiday homes.
Losing its sparkle: Jeweller Nadeem Osman bought four flats in Dubai last year, just before the property market there crashed

Losing its sparkle: Jeweller Nadeem Osman bought four flats in Dubai last year, just before the property market there crashed

He paid £580,000 for two off-plan apartments in Villa Caria, a residential block in Jumeirah South, and two more in a proposed hotel on the Dubai Waterfront, known as Hotel K. But his timing could not have been worse, with the Dubai property market then going into free fall: down 32 per cent in the first quarter of this year and 47 per cent in the second, according to Knight Frank.

Assetz, a property investment company, estimates that the fall may reach 70 per cent this year. Mr Osman bought the apartments through Dynasty Zarooni (DZ) - one of the city's biggest real estate companies, with a portfolio of properties worth £219million.

He paid the full sum upfront, assured that the money would be put into an escrow account which protects a buyer's money until the work is complete.

In January, one of the directors of DZ was arrested on a £60million fraud allegation - and since released without charge - but work on Hotel K has not even started. It is scheduled to finish by 2011. The company does not even own the land on which it was to be built.

Villa Caria was supposed to be completed by the end of this year, but DZ has told him it may take a further two years. Mr Osman has also been told that his money was not put into an escrow account, and he is unable to get any back.

'I don't know what to do,' he said. 'If it was in this country I could do something about it, but in Dubai it's so difficult as there is a huge backlog in the courts.' Dynasty Zarooni has declined to comment after repeated attempts to contact it. Mr Osman has now formed a group with ten other investors to decide whether to take legal action or file a criminal case.

Dubai's courts are struggling with a mountain of property cases totalling £3billion - as much as £500million may involve British investors.

Stuart Law, of Assetz, says Britons, who were the largest Western investors, were partly responsible for the crash as they inflated prices through their highly geared buy-to-let schemes.

'We've known of properties that were sold again and again about ten times one after another - it was good as each person made a profit, but the person who was left with the contract at the last was in trouble,' said Mr Law.

Tuesday 3 November 2009

Welcome to Debt City

Default on a loan or bounce a check in Dubai and you could end up in debtors’ prison.

That was the very Dickensian prospect facing Simon Ford, a boyish British entrepreneur whose “alternative gift” business sold rides in hot air balloons and Formula 1 racing cars to the party crowd in this Disneyesque city-state. But the recession has hit Dubai hard and Ford’s business foundered.

When his loans came due last June, he did what thousands of other expats have done. He packed up his family and fled — a few hours ahead of the law.

Ford also left behind an anguished “open letter” to friends and creditors that neatly encapsulates the predicament of many expats in Dubai who took out loans during the flush times and now find themselves out of work and unable to keep up with the payments on their seaside villas and luxury cars.

“I am not running away from debt, I am purely protecting those dearest to me and getting out of a country which, due to the lack of structured bankruptcy laws and a banking system which has zero flexibility on loan repayments, drives people to make horrible decisions,” he wrote in an open letter to local media.

He promised to repay all of his creditors.

Dubai authorities won’t say precisely how many people have been jailed for their debts, but local news accounts put the number at about 1,200 — more than 40 percent of the total prison population.

Even trickier to gauge is how many others took Ford’s route and simply fled. Judging by the number of apparently abandoned BMW’s and Mercedes gathering dust on city streets and the ensuing chatter on expats’ discussion boards, the number is not insignificant.

One recent escapee has written a book about his flight. Herve Jaubert, a former French intelligence agent who used to cruise around Dubai in a red Lamborghini, found the law breathing down his neck after his plans to manufacture “luxury submarines” became submerged in debt.

Jaubert explains that he bolted last year after government interrogators threatened to stick needles up his nose. With 007 panache and a woman’s all-encompassing burqa concealing his frogman gear, Jaubert slipped into the sea, swam out to a police patrol boat and disabled its fuel line so that it could not give chase. He then used a rubber dingy to get safely beyond the UAE’s territorial waters where he was met by a confederate in a sailboat. Eight days later they landed in India.

The book, “Escape from Dubai” comes out next month. But Jaubert’s website has been blocked in Dubai and sale of his book will no doubt be banned here. The Frenchman, now living in Florida, was tried in absentia and sentenced to five years imprisonment for fraud.

A number of U.S. citizens have been imprisoned for bounced checks, but the American Embassy — apparently in keeping with the local custom of casting a veil of silence over disturbing news — declined to provide specific figures.

Reprinted from Global Post

The Dark Side of Dubai

Karen Andrews can't speak. Every time she starts to tell her story, she puts her head down and crumples. She is slim and angular and has the faded radiance of the once-rich, even though her clothes are as creased as her forehead. I find her in the car park of one of Dubai's finest international hotels, where she is living, in her Range Rover. She has been sleeping here for months, thanks to the kindness of the Bangladeshi car park attendants who don't have the heart to move her on. This is not where she thought her Dubai dream would end.

Her story comes out in stutters, over four hours. At times, her old voice – witty and warm – breaks through. Karen came here from Canada when her husband was offered a job in the senior division of a famous multinational. "When he said Dubai, I said – if you want me to wear black and quit booze, baby, you've got the wrong girl. But he asked me to give it a chance. And I loved him."

All her worries melted when she touched down in Dubai in 2005. "It was an adult Disneyland, where Sheikh Mohammed is the mouse," she says. "Life was fantastic. You had these amazing big apartments, you had a whole army of your own staff, you pay no taxes at all. It seemed like everyone was a CEO. We were partying the whole time."

Her husband, Daniel, bought two properties. "We were drunk on Dubai," she says. But for the first time in his life, he was beginning to mismanage their finances. "We're not talking huge sums, but he was getting confused. It was so unlike Daniel, I was surprised. We got into a little bit of debt." After a year, she found out why: Daniel was diagnosed with a brain tumour.

One doctor told him he had a year to live; another said it was benign and he'd be okay. But the debts were growing. "Before I came here, I didn't know anything about Dubai law. I assumed if all these big companies come here, it must be pretty like Canada's or any other liberal democracy's," she says. Nobody told her there is no concept of bankruptcy. If you get into debt and you can't pay, you go to prison.

"When we realised that, I sat Daniel down and told him: listen, we need to get out of here. He knew he was guaranteed a pay-off when he resigned, so we said – right, let's take the pay-off, clear the debt, and go." So Daniel resigned – but he was given a lower pay-off than his contract suggested. The debt remained. As soon as you quit your job in Dubai, your employer has to inform your bank. If you have any outstanding debts that aren't covered by your savings, then all your accounts are frozen, and you are forbidden to leave the country.

"Suddenly our cards stopped working. We had nothing. We were thrown out of our apartment." Karen can't speak about what happened next for a long time; she is shaking.

Daniel was arrested and taken away on the day of their eviction. It was six days before she could talk to him. "He told me he was put in a cell with another debtor, a Sri Lankan guy who was only 27, who said he couldn't face the shame to his family. Daniel woke up and the boy had swallowed razor-blades. He banged for help, but nobody came, and the boy died in front of him."

Karen managed to beg from her friends for a few weeks, "but it was so humiliating. I've never lived like this. I worked in the fashion industry. I had my own shops. I've never..." She peters out.

Daniel was sentenced to six months' imprisonment at a trial he couldn't understand. It was in Arabic, and there was no translation. "Now I'm here illegally, too," Karen says I've got no money, nothing. I have to last nine months until he's out, somehow." Looking away, almost paralysed with embarrassment, she asks if I could buy her a meal.

She is not alone. All over the city, there are maxed-out expats sleeping secretly in the sand-dunes or the airport or in their cars.

"The thing you have to understand about Dubai is – nothing is what it seems," Karen says at last. "Nothing. This isn't a city, it's a con-job. They lure you in telling you it's one thing – a modern kind of place – but beneath the surface it's a medieval dictatorship."

II. Tumbleweed

Thirty years ago, almost all of contemporary Dubai was desert, inhabited only by cactuses and tumbleweed and scorpions. But downtown there are traces of the town that once was, buried amidst the metal and glass. In the dusty fort of the Dubai Museum, a sanitised version of this story is told.

In the mid-18th century, a small village was built here, in the lower Persian Gulf, where people would dive for pearls off the coast. It soon began to accumulate a cosmopolitan population washing up from Persia, the Indian subcontinent, and other Arab countries, all hoping to make their fortune. They named it after a local locust, the daba, who consumed everything before it. The town was soon seized by the gunships of the British Empire, who held it by the throat as late as 1971. As they scuttled away, Dubai decided to ally with the six surrounding states and make up the United Arab Emirates (UAE).

The British quit, exhausted, just as oil was being discovered, and the sheikhs who suddenly found themselves in charge faced a remarkable dilemma. They were largely illiterate nomads who spent their lives driving camels through the desert – yet now they had a vast pot of gold. What should they do with it?

Dubai only had a dribble of oil compared to neighbouring Abu Dhabi – so Sheikh Maktoum decided to use the revenues to build something that would last. Israel used to boast it made the desert bloom; Sheikh Maktoum resolved to make the desert boom. He would build a city to be a centre of tourism and financial services, sucking up cash and talent from across the globe. He invited the world to come tax-free – and they came in their millions, swamping the local population, who now make up just 5 per cent of Dubai. A city seemed to fall from the sky in just three decades, whole and complete and swelling. They fast-forwarded from the 18th century to the 21st in a single generation.

If you take the Big Bus Tour of Dubai – the passport to a pre-processed experience of every major city on earth – you are fed the propaganda-vision of how this happened. "Dubai's motto is 'Open doors, open minds'," the tour guide tells you in clipped tones, before depositing you at the souks to buy camel tea-cosies. "Here you are free. To purchase fabrics," he adds. As you pass each new monumental building, he tells you: "The World Trade Centre was built by His Highness..."

But this is a lie. The sheikh did not build this city. It was built by slaves. They are building it now.


Reprinted from Independent.co.uk

Monday 2 November 2009

Recovering your Dubai Investments from Fraud and Scam

How to avoid Fraud and Scam when investing in the Dubai and Ajman?
You shall avoid this companies and it owners by any means

3D Ventures -
http://www.3d-venture.com h
ttp://www.3d-venture.co.uk
Mr. Ali Anwar

Fraudulent projects in Dubai - Crown Avenue, R&R Tower
Fraudulent projects in Ajman - Emirates Pearls

Rockland Real Estate -
http://www.rocklanduae.com
Fraudulent projects in Dubai - Cordoba Palace, SP Oasis, Rockland Residence

Remember, investing in these projects is a high-risk and shall be avoided.
They have collected million dollars from investors and are hiding from investors.

If you have invested with those companies - you should join a discussion group to unite with other investors:
http://groups.google.com/group/3dventures

Empty properties in Dubai - but no sign of reducing rents

I don't understand why a landlord would keep his property empty with no hope of recovery in the near future. Just take a trip around the new developments - you can see so many completed...

IT seems like Dubai landlords are still hoping for quick recovery. As we can see from the reviews and advices from international real-estate companies, the future of Dubai Real Estate is still very shaky and further price decreases are waiting to come.

Dubai Real Estate Could Fall Another 30 Percent

There will be no recovery in the Dubai property market in 2010 with prices falling up to 30% in 2010, according to an economist who accurately predicted the credit crunch.

Eckart Woerts, a senior economist at think tank the Gulf Research Center who is currently lecturing at Princeton University in the US, said the global economy is in for a big surprise and as a result the already depressed real estate sector in Dubai faces more misery.

‘Are we out of the woods in Dubai? I don’t think so.

There are so many projects coming on stream. I don’t see a recovery.

My initial take was a decline of 60 to 80%.

We have had 50% so maybe we have another 10 to 30% to go measured against the old high,’ he says in an interview to be published in Arabian Business magazine on Sunday. (Nov 1)

‘A lot of the crash has already happened, but don’t think about the old highs, because that is a price you will not see for a very, very long time,’ he adds.

Unlike many economists predicting a recovery from the global economic downturn in 2010, Woertz said that a time lag between state stimulus packages ending and real demand picking up will cause further problems in 2010.

‘We have some stabilization going on, but the problem is this is mainly attributable to government spending and stimulus.

But what happens when the stimulus peters out? Because the job market looks awful.

So the spending cannot come from private households under such conditions,’ he explains.

‘For the real economy, we are in for a nasty surprise in 2010.

We could see several consecutive bottoms rather than a miraculous recovery,’ he adds.

But even when the global economy does recover it will not necessarily mean the start of an upturn for Dubai’s property prices, Woertz says.

‘Dubai has high inventories.

Just based on end user demand, without the speculative hype, you can probably have quite a few people moving back to the city without the market moving at all.

The point is, you shouldn’t calculate the price of real estate based on your opinion of the market and the hope that you will sell to a bigger fool than you for a higher price,’ he adds.

But he believes that the property market downturn could prove to be good news for Dubai in the long run.

‘It is good for Dubai that the real estate is going down in the sense that it was pricing itself out of the market.

It is a model trading hub. Dubai does things much more efficiently and better than neighboring countries.

There is a need and demand for business services made in Dubai.

But not at the price of yesterday which needed to be high because of ridiculous real estate prices,’ he concludes.

This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.