I was searching the net for news about the property market and came across this little video.
It is very USA focused and not entirely relevant to us in the UAE but certainly has some points that are globally relevant.
Have a look and next week I will analyse the differences between an emerging property market in relation to a developed one.
21 November, 2010
07 October, 2010
Picture Update of Palm Jumeirah
There are things starting to happen again on the Palm and I took a ride out today to get some pictures so we can keep the ones of you overseas up to date.
As you all know the Golden Mile retail area is now advancing and I will do a separate picture gallery for this next week and hopefully find out more about what retailers have taken space.
This is the area between Al Khudrawi and Al Haseer and where the QE2 was supposes to go. The sand has been removed and is being transported over to the Golden Mile area for landscaping use.
It looks a bit of a pig at the moment but hopefully when it is flattened off and tidied up it will be much better than before.I think it would be great to see this turned into a park whilst for the next few years Nakheel get straight.
As you drive up the Palm, through the villa area, on the right hand side just past Frond F is a new Mosque.It doesn't seem too big and I presume there will be another built in the Shoreline area too.Might not be big but the speakers are huge!!
I don't know if it is true but there was a rumour that when the Palm was ready for handover the design team had forgotten to include Mosques. A small embarassment if true.
As you drive through the tunnel, onto the Crescent, it is clear that this area is really taking shape. Landscapers were out laying the main street borders and this can only mean that people will soon be living out here.
Below is the Balqis Residence which is slower in progress than some of the other developemts on the Crescent.
These are the villas that are at the front of the complex overlooking the sea.Unbeleivable view from these properties.
This is the view
Moving round towards the Marina you can see that the roads are taking shape and further on the landscaping is much more advanced.
Next is the Kempinski which you can see is ready for occupation.It looks like we know the first resident to be given keys so I will get in next week and take some internal pictures.
This is what was called the Ottoman Palace and has recently been taken over by the Jumeirah Group. I went inside this about a year ago and it will look stunning. Very Arabic and very oppulent. The dining experiences should be amazing too as at the time they told me there were 17 different places to eat.
At the end of the cresecent is the Royal Mirage which is going to look stunning.You should be able to get a boat across the water to the mainland hotel which will be novel. Little bit like Venice without the ice cream.
I hope you found this interesting and also it should give investors confidence that the Palm is going to be superb. We need a great Shopping Mall at the top end of the Shorelines and some better facilities management but as you can see it really is going in the right direction.
As you all know the Golden Mile retail area is now advancing and I will do a separate picture gallery for this next week and hopefully find out more about what retailers have taken space.
This is the area between Al Khudrawi and Al Haseer and where the QE2 was supposes to go. The sand has been removed and is being transported over to the Golden Mile area for landscaping use.
It looks a bit of a pig at the moment but hopefully when it is flattened off and tidied up it will be much better than before.I think it would be great to see this turned into a park whilst for the next few years Nakheel get straight.
As you drive up the Palm, through the villa area, on the right hand side just past Frond F is a new Mosque.It doesn't seem too big and I presume there will be another built in the Shoreline area too.Might not be big but the speakers are huge!!
I don't know if it is true but there was a rumour that when the Palm was ready for handover the design team had forgotten to include Mosques. A small embarassment if true.
As you drive through the tunnel, onto the Crescent, it is clear that this area is really taking shape. Landscapers were out laying the main street borders and this can only mean that people will soon be living out here.
Below is the Balqis Residence which is slower in progress than some of the other developemts on the Crescent.
These are the villas that are at the front of the complex overlooking the sea.Unbeleivable view from these properties.
This is the view
Moving round towards the Marina you can see that the roads are taking shape and further on the landscaping is much more advanced.
Next is the Kempinski which you can see is ready for occupation.It looks like we know the first resident to be given keys so I will get in next week and take some internal pictures.
This is what was called the Ottoman Palace and has recently been taken over by the Jumeirah Group. I went inside this about a year ago and it will look stunning. Very Arabic and very oppulent. The dining experiences should be amazing too as at the time they told me there were 17 different places to eat.
At the end of the cresecent is the Royal Mirage which is going to look stunning.You should be able to get a boat across the water to the mainland hotel which will be novel. Little bit like Venice without the ice cream.
I hope you found this interesting and also it should give investors confidence that the Palm is going to be superb. We need a great Shopping Mall at the top end of the Shorelines and some better facilities management but as you can see it really is going in the right direction.
30 September, 2010
Nakheel Credit set to Soar?
This week Nakheel have announced that they have had a good meeting with the banks and their debt restructuring is currently acceptable to 85% of the relevant parties. The target is 95% and they believe this will be reached by December.
In the background the most important thing locally is that Nakheel have been paying sub contractors over the past few months and agreeing terms on how they come back to the table and start construction again.
This is where I believe we could see a very positive lift to the market.
My theory goes like this.
If you have Nakheel Credit now you can transfer to another owner and receive about 50% of its value.
• Nakheel will restart work on 10 delayed projects shortly.
• Nakheel will then send payment request out to the investors of these 10 projects.
• A large portion of investors will default.
• A smaller portion will look to settle and buy credit.
I estimate that from 10 projects there will be at least 1,000 ( not scientific but a reasonable guess) buyers of credit. Today, my sources at Nakheel are telling me that there is little credit available for people to buy.
So in 2 months there could be 1,000 investors looking to purchase credit.
This will undoubtedly put the owner of credit in a better position than they have been in for the last 18 months and I can see credit being sold at around 70% of face value.
As the average credit note is around 1mAED that means the sellers of credit will be 200,000 dhs better off than today.
If there are 1,000 Nakheel customers floating around with 20% extra than today’s rate ( approx 40,000 pounds) I can tell you that there will be a mini party over here. ( I will be right in the middle of it too!)
Bearing in mind that it shows a massive commitment from Nakheel I hope that this is the first signs of recovery and that all you owners of credit are rewarded for youe patience.
In the background the most important thing locally is that Nakheel have been paying sub contractors over the past few months and agreeing terms on how they come back to the table and start construction again.
This is where I believe we could see a very positive lift to the market.
My theory goes like this.
If you have Nakheel Credit now you can transfer to another owner and receive about 50% of its value.
• Nakheel will restart work on 10 delayed projects shortly.
• Nakheel will then send payment request out to the investors of these 10 projects.
• A large portion of investors will default.
• A smaller portion will look to settle and buy credit.
I estimate that from 10 projects there will be at least 1,000 ( not scientific but a reasonable guess) buyers of credit. Today, my sources at Nakheel are telling me that there is little credit available for people to buy.
So in 2 months there could be 1,000 investors looking to purchase credit.
This will undoubtedly put the owner of credit in a better position than they have been in for the last 18 months and I can see credit being sold at around 70% of face value.
As the average credit note is around 1mAED that means the sellers of credit will be 200,000 dhs better off than today.
If there are 1,000 Nakheel customers floating around with 20% extra than today’s rate ( approx 40,000 pounds) I can tell you that there will be a mini party over here. ( I will be right in the middle of it too!)
Bearing in mind that it shows a massive commitment from Nakheel I hope that this is the first signs of recovery and that all you owners of credit are rewarded for youe patience.
20 September, 2010
Palm gets Waitrose
Quick Blog to keep you updated!
It has now been officially reported that Waitrose will be opening in the Golden Mile next Spring.
This is great news in itself but in conjunction with this the G Mile will also attract a raft of other retailers.
The landscaping underneath the monorail has started and to unofficially quote a Nakheel source 'there will be people sitting out on the terraces by spring'.
There is a new restaurant in Oceana which i beleive is pricey but worth it and all in all that denotes a great fortnight for the Palm.
Yes there is lots still to do, but the word is that about 15 JBR retail tenants are looking to open on the Palm next year. Food, clothes and coffee is what the place needs to create some atmosphere and I for one am pleased.
So all you Shoreline owners in buildings 11-20 can be very happy that this will breathe fresh life into the sales and rentals prices as people look to locate close to the shops.
It has now been officially reported that Waitrose will be opening in the Golden Mile next Spring.
This is great news in itself but in conjunction with this the G Mile will also attract a raft of other retailers.
The landscaping underneath the monorail has started and to unofficially quote a Nakheel source 'there will be people sitting out on the terraces by spring'.
There is a new restaurant in Oceana which i beleive is pricey but worth it and all in all that denotes a great fortnight for the Palm.
Yes there is lots still to do, but the word is that about 15 JBR retail tenants are looking to open on the Palm next year. Food, clothes and coffee is what the place needs to create some atmosphere and I for one am pleased.
So all you Shoreline owners in buildings 11-20 can be very happy that this will breathe fresh life into the sales and rentals prices as people look to locate close to the shops.
22 August, 2010
Dubai Commercial Property Market – Simple Case of over supply
End of Lease Decisions!
For those of you that have visited our main office you will know it is a converted residential villa which has a cute “boutique” feel about it. It is well located and we enjoy great views of the Burj Al Arab. The most important benefit is the excessive parking as we could probably park over a 100 cars comfortably. It is not a great use of space and i have been mulling over the pros and cons of moving.
The lease we signed has now come to an end and we are considering the other options .The Landlord has given us a discount to renew but not to market rates as he is able to rent it for a higher level now as a residential unit. The market has turned full circle for office space as 3 years ago the occupancy of offices was estimated to be 99.9%. It is now about 70% and falling and it is likelu that the 70% figure is a bit generous.
The options
If you drive over to Jumeirah Lake Towers (JLT) you can pretty much see exactly what the problem is. Not the credit crunch but just an awesome amount of over supply. 100 forty storey towers sit in JLT and a lot have been developed as office space. To compound the issue over near Dubai Mall you have Business Bay providing even more stock for the market to try and absorb.
The past 3 months has seen our residential lettings department record our best figures and I had to try and work out why everybody says Dubai is quiet when we are seeing rental properties snapped up.
The Problem
New companies are arriving to set up in Dubai with big names such as Lukoil ( from Moscow ) and Google ( The World’s larget company) taking office space over the past few months. These companies then need to house a few hundred workers. We are benefitting from this at the moment and have a tenant company client list that looks like it was stolen from the FTSE 100. So why is there a problem?
The simple fact is that these two companies occupy 4 floors of office space but have taken over 300 residential units for rent. In JLT alone there are over 1,000 floors of office space coming on line in the near future. This is why the rents have plummeted. On the optimistic side, if you ever hear a rumour that it is impossible to find office space in JLT then you can bet your bottom dollar that I am sat in a very expensive hotel in Monte Carlo enjoying the successes of the Dubai property revival.
In short, commercial space has been over developed and the ratio of office space versus residential will be out of sync for a long time. There is too much residential space also although this problem is apartment sensitive as the villas are holding up very well.
The Future
There are some good quality commercial tenants entering the Dubai market and the sensible landlords will appreciate that even Google will want the best space they can get at a reasonable rate. It is going to take a long time to pick up the slack of the existing and new offices coming on line and I fear the commercial rates will slide a lot further yet.
One man’s Opinion
As usual I do have an opinion on the problem. Dubai is a great place for companies to base their operation. It is tax free, the airport routes are the best in the world and the Ports are equally as impressive. There are a hundred reasons why some of the best companies in the world would want to be present in Dubai. However, over the past 5 years, as the economy rocketed, new start up companies found it very easy to set up and make huge profits over night. There was an endless amount of commercial activity which did not really have any substance and these badly run companies could not believe their luck. The World has changed and it is the fittest who will survive and now we are left with a base of well run companies who have proven their worth. In addition the companies that are arriving to Dubai are quality companies that can offer the economy a solid contribution.
The next phase of the economic cycle will see the “super profits” replaced by “normal profits.”We are now at the beginning of a new curve where “Normality” will be the main ingredient.
It is this normality that will drive the next cycle of growth. Unfortunately the imbalance of Normality versus Stupidity will take some time to redress itself. The quality commercial space will be occupied by quality tenants and Dubai will grow slowly but effectively
I really don’t foresee a lot of new “start ups” any time soon and the companies that do set up will be ones with a track record but will proceed with caution. They will take smaller units than before and act with more prudence.
The quality office sspace will be occupied by better quality tenants and Dubai will slowly show signs of growth again.
All that said, E &T will probably pay over the odds for a commercial villa with a great view and more parking lots than the NCP on Deansgate Manchester.
For those of you that have visited our main office you will know it is a converted residential villa which has a cute “boutique” feel about it. It is well located and we enjoy great views of the Burj Al Arab. The most important benefit is the excessive parking as we could probably park over a 100 cars comfortably. It is not a great use of space and i have been mulling over the pros and cons of moving.
The lease we signed has now come to an end and we are considering the other options .The Landlord has given us a discount to renew but not to market rates as he is able to rent it for a higher level now as a residential unit. The market has turned full circle for office space as 3 years ago the occupancy of offices was estimated to be 99.9%. It is now about 70% and falling and it is likelu that the 70% figure is a bit generous.
The options
If you drive over to Jumeirah Lake Towers (JLT) you can pretty much see exactly what the problem is. Not the credit crunch but just an awesome amount of over supply. 100 forty storey towers sit in JLT and a lot have been developed as office space. To compound the issue over near Dubai Mall you have Business Bay providing even more stock for the market to try and absorb.
The past 3 months has seen our residential lettings department record our best figures and I had to try and work out why everybody says Dubai is quiet when we are seeing rental properties snapped up.
The Problem
New companies are arriving to set up in Dubai with big names such as Lukoil ( from Moscow ) and Google ( The World’s larget company) taking office space over the past few months. These companies then need to house a few hundred workers. We are benefitting from this at the moment and have a tenant company client list that looks like it was stolen from the FTSE 100. So why is there a problem?
The simple fact is that these two companies occupy 4 floors of office space but have taken over 300 residential units for rent. In JLT alone there are over 1,000 floors of office space coming on line in the near future. This is why the rents have plummeted. On the optimistic side, if you ever hear a rumour that it is impossible to find office space in JLT then you can bet your bottom dollar that I am sat in a very expensive hotel in Monte Carlo enjoying the successes of the Dubai property revival.
In short, commercial space has been over developed and the ratio of office space versus residential will be out of sync for a long time. There is too much residential space also although this problem is apartment sensitive as the villas are holding up very well.
The Future
There are some good quality commercial tenants entering the Dubai market and the sensible landlords will appreciate that even Google will want the best space they can get at a reasonable rate. It is going to take a long time to pick up the slack of the existing and new offices coming on line and I fear the commercial rates will slide a lot further yet.
One man’s Opinion
As usual I do have an opinion on the problem. Dubai is a great place for companies to base their operation. It is tax free, the airport routes are the best in the world and the Ports are equally as impressive. There are a hundred reasons why some of the best companies in the world would want to be present in Dubai. However, over the past 5 years, as the economy rocketed, new start up companies found it very easy to set up and make huge profits over night. There was an endless amount of commercial activity which did not really have any substance and these badly run companies could not believe their luck. The World has changed and it is the fittest who will survive and now we are left with a base of well run companies who have proven their worth. In addition the companies that are arriving to Dubai are quality companies that can offer the economy a solid contribution.
The next phase of the economic cycle will see the “super profits” replaced by “normal profits.”We are now at the beginning of a new curve where “Normality” will be the main ingredient.
It is this normality that will drive the next cycle of growth. Unfortunately the imbalance of Normality versus Stupidity will take some time to redress itself. The quality commercial space will be occupied by quality tenants and Dubai will grow slowly but effectively
I really don’t foresee a lot of new “start ups” any time soon and the companies that do set up will be ones with a track record but will proceed with caution. They will take smaller units than before and act with more prudence.
The quality office sspace will be occupied by better quality tenants and Dubai will slowly show signs of growth again.
All that said, E &T will probably pay over the odds for a commercial villa with a great view and more parking lots than the NCP on Deansgate Manchester.
02 August, 2010
Blackberry to be taken offline
Yesterday was a day of non property talk in the E & T camp.
Out of the blue the two local telecom operators have decided that Balckberry violates local laws and regulations and will therefore being cancelling its services as of 11th October.
In the middle of a credit crunch last month, against my better judgement,I invested 1800 dhs in a snazzy new blackberry handset. Now they tell me that half of the services will be unusable and my mantra of always insisting that I use Nokia phones is coming back to haunt me.
I was fairly well known for insisting that a phone was a phone and all these 'silly' internet services were a waste of time and money. I admit I have been converted and am feeling a bit exposed ( if not potentially naked ) that I will have to live my life without e mails dropping onto my phone whilst I eat, exercise and watch tv.How will I survive the local tv if I cannot avert my attention for most of a show to my phone. How will I sit through a business meeting if I cannot be rude and stare at my phone and send e mails to someone other than my host. How will I drive in a straight line on Shk Zayed road if I don't multi task and read my e mails.
Life is going to change 'too much' and I will be forced to either convert to Apple ( over my dead body !!) or 'Ah Yes' there is a solution. Nokia. I will buy a phone, forget data packages and start communicating with the power of speech again.
Just as an aside I have a theory that neither Etisalt or Du are as incompetent as this latest problem suggests. If the reason for cancelling the service is because the Blackberry system violates UAE law and regulations then why on earth have they been selling the service for the last few years. No, this is just a smoke screen and I beleive that the Russians are behind this. It is an extension of the 'Anna Chapman' KGB story from the USA. There has to be a good spy story to justify this decision and I truly believe that the real reason is that 'national security' has been breached.Du and Etisalat both have some way to go with their customer service skills but there is no way this violation of law wasn't spotted a long time ago. Something has been detected and fortunately we live in a society where the UAE governemnt can react quickly and not have to have diplomatic debate for months before making a decision to do the right thing.
Sounds like something out of '24' now. Well there are some shows I watch without being distracted by my Blackberry.
05 July, 2010
Chilly times for Palm Residents
There is a lot of concern about air conditioning costs at the moment and i thought i would simply copy and paste the article I found in Emirates 24/7.
Have a read of the article below and then you will see a reaction from one of our team, Steve. Steve is our Tiara and Oceana specialist and, as some of you will know , very knowledgeable and thorough. His response to the problem sheds a clear light on the problem
Chiller water supply to luxury project discontinued
Residents of Tiara Residence claim they should be charged on usage basis rather than on area basis.
By
Parag Deulgaonkar
Published Monday, July 05, 2010
Tiara Residence is located on the main trunk of Palm Jumeirah. It comprises seven 15-storey towers with sea view apartments ranging from one bedroom apartments at 1,309 square feet to 5,500 square foot penthouses at the top of each building. (EB FILE)
Chiller water connection in some apartments of Tiara Residence, a luxury development on Palm Jumeriah, has been discontinued for the past six days, residents said. Zabeel Investments, however, emphasises it was no longer willing to subsidize the bills of those few who are taking free chilled water from the development.
According to final notice served on residents, seen by Emirates Business, Zabeel Properties, the developer of the project, said: “Your chilled water account has not been settled to date following Real Estate Regulatory Agency’s (Rera) agreed settlement. Chiller water supply will be disconnected on June 29, until payment is made and registration is completed.”
As per an earlier notice, sent on May 19, the developer told residents to settle their outstanding bill for the period November 2009 to April 2010 within seven days from the notice being served. Residents were also asked to sign up to an end user agreement with Tiara for the provisioning of chilled water and the activation of the individual apartment meter for consumption going forward.
Shadi Joweihan, an owner of a one-bedroom apartment, said he is not against paying every cent he owes to the developer, but wants more clarity and transparency in dealings. He called for residents being charged on usage basis rather than on area basis.
Joweihan said he has foot a bill of Dh1,200 per month for chiller charges apart from the service charges, which he has paid for a year upfront.
“We are not against paying, but we want them to calibrate the metres. We also want them to set up owners association and pass on the responsibilities to it.”
Asked by chilled water supply was discontinued despite Rera’s order, Zabeel Investments spokesperson said that during the meeting with the Rera CEO it was agreed by all parties that residents needed to register their service for chilled water in order to continue receiving it, much like registration for any utility, such as water, electricity, etc.
“We will no longer subsidize the bills of those few residents who are taking free chilled water from the development and have refused to set up their chilled water accounts,” she added.
According to the spokesperson, since February 2010 residents have received monthly notifications to set up their metres and pay the outstanding amounts.
“Based on a Rera approved notification, the residents were again advised to register and pay for their services via written communication on May 19, giving a deadline of May 26. The few remaining residents who did not heed this notice were then sent a final notice on June 24, the same was copied to Rera for their notification, at which time residents were given a final five day deadline to register and pay outstanding costs dating to the time of apartment handover.”
Ludmila Yamalova, an owner of a three-bedroom apartment, said: “About a month back, they had disconnected the supply, but it was connected after Rera interfered. They sent us a final notice on June 24, saying they would disconnect chilled water supply from June 29. It was a general notice and was not addressed to individuals.”
She said she was paying a service fee of Dh70,000 per year and believed it included the chiller charges as well.
According to Zabeel, it was stated in the sales and purchase agreement that chilled water would be a separate charge from that of the community fees, which the owners agreed to at the time of purchase. The chiller fees are based on size of the individual units and the use by the owner/resident.
“We have even established a dedicated email, so that residents with questions or concerns can get correct and qualified advice on their chilled water consumption.”
To a query on whether the company was working to settle the issue amicably, the spokesperson added: “The charges are based on actual rates and once metres are activated, charges can be tracked by individual units on a monthly basis. We employ the services of a third party to oversee the collection of fees for this service, and the fees paid by the resident are as stated on the monthly bills, with all monies being transferred directly to Palm District Cooling, based on their charges.”
Another point of contention raised by residents was non-formation of interim owners association (IOA), charges which the developer has refuted.
“We expected the IOA to be formed within a month after we met Rera officials in May. But there has been no word about it,” Yamalova added.
Zabeel said it is in the final process of establishing the interim owners association, which will be ready to meet the deadline set by Rera.
“All duties and responsibilities will be duly handed over at that time. For now we are actually well ahead in our implementation for the established of Home Owners Association as part of the rules and regulations for the Jointly Owned Property Declaration, which in light of being a mixed use development, brings its own set of challenges. We welcome the handover to the home owners, so that they can be responsible to one another for creating a stronger Tiara Residence community,” the spokesperson added.
Steve's Response:
We know about this though don’t we?
The last dregs of residents in dispute went to RERA last month and came back thinking they had won a case… but in their meeting with RERA, although it was agreed AC would go back on, it was also agreed they would pay their bills. Some paid their bills but a few of the few didn’t, so Zabeel cut them off again about 10 days or so ago and this is where they are all at.
It’s mostly down to
no one really feeling comfortable with the capacity charge – or understanding it (but that’s a PDC and Palm wide issue)
pre Feb bills being split between all the apartments because the meters were not turned on before them (so some people were perhaps not in Dubai for many months but got a bill from when they moved in to when the meters were turned on. Zabeel were getting one bill from PDC because PDC refused to connect or recognise the meters because they would rather send 1 bill to Zabeel. SO Zabeel had a 1m to 2m per month bill that needed splitting. They took out common usage then split per apartment based on square foot. Will not work for everyone and the communication during the no meter period was non existent so no one knew it was coming, but to be fair to Zabeel, the AC was getting used and no one was paying. Some gesture toward the payment by Zabeel would have been better received but, as I say, there was never going to be a 1 size fits all solution)
There is no access or transparency or clarity regarding the individual meters for each apartment. People are suspicious that Zabeel are on the fiddle or they are top slicing. Zabeel say all the money is going straight to PDC. This surely can be proven and confirmed by Zabeel if it is true – I would imagine it is true but, it is Dubai , so suspicions will be there until proven innocent!
There are some valid issues that will only ever have been settled by compromise (such as 2 above) but generally – there is nothing a good talk, transparency and independent controlled access to the meter couldn’t overcome in my view.
Mark Says:
There you have it!!! Anybody that says E & T are not specialists on the Palm are deranged. We are the biggest managers of property on the Palm and do everything we can to make sure that our customers are upto date with all the antics and antivities..
Have a read of the article below and then you will see a reaction from one of our team, Steve. Steve is our Tiara and Oceana specialist and, as some of you will know , very knowledgeable and thorough. His response to the problem sheds a clear light on the problem
Chiller water supply to luxury project discontinued
Residents of Tiara Residence claim they should be charged on usage basis rather than on area basis.
By
Parag Deulgaonkar
Published Monday, July 05, 2010
Tiara Residence is located on the main trunk of Palm Jumeirah. It comprises seven 15-storey towers with sea view apartments ranging from one bedroom apartments at 1,309 square feet to 5,500 square foot penthouses at the top of each building. (EB FILE)
Chiller water connection in some apartments of Tiara Residence, a luxury development on Palm Jumeriah, has been discontinued for the past six days, residents said. Zabeel Investments, however, emphasises it was no longer willing to subsidize the bills of those few who are taking free chilled water from the development.
According to final notice served on residents, seen by Emirates Business, Zabeel Properties, the developer of the project, said: “Your chilled water account has not been settled to date following Real Estate Regulatory Agency’s (Rera) agreed settlement. Chiller water supply will be disconnected on June 29, until payment is made and registration is completed.”
As per an earlier notice, sent on May 19, the developer told residents to settle their outstanding bill for the period November 2009 to April 2010 within seven days from the notice being served. Residents were also asked to sign up to an end user agreement with Tiara for the provisioning of chilled water and the activation of the individual apartment meter for consumption going forward.
Shadi Joweihan, an owner of a one-bedroom apartment, said he is not against paying every cent he owes to the developer, but wants more clarity and transparency in dealings. He called for residents being charged on usage basis rather than on area basis.
Joweihan said he has foot a bill of Dh1,200 per month for chiller charges apart from the service charges, which he has paid for a year upfront.
“We are not against paying, but we want them to calibrate the metres. We also want them to set up owners association and pass on the responsibilities to it.”
Asked by chilled water supply was discontinued despite Rera’s order, Zabeel Investments spokesperson said that during the meeting with the Rera CEO it was agreed by all parties that residents needed to register their service for chilled water in order to continue receiving it, much like registration for any utility, such as water, electricity, etc.
“We will no longer subsidize the bills of those few residents who are taking free chilled water from the development and have refused to set up their chilled water accounts,” she added.
According to the spokesperson, since February 2010 residents have received monthly notifications to set up their metres and pay the outstanding amounts.
“Based on a Rera approved notification, the residents were again advised to register and pay for their services via written communication on May 19, giving a deadline of May 26. The few remaining residents who did not heed this notice were then sent a final notice on June 24, the same was copied to Rera for their notification, at which time residents were given a final five day deadline to register and pay outstanding costs dating to the time of apartment handover.”
Ludmila Yamalova, an owner of a three-bedroom apartment, said: “About a month back, they had disconnected the supply, but it was connected after Rera interfered. They sent us a final notice on June 24, saying they would disconnect chilled water supply from June 29. It was a general notice and was not addressed to individuals.”
She said she was paying a service fee of Dh70,000 per year and believed it included the chiller charges as well.
According to Zabeel, it was stated in the sales and purchase agreement that chilled water would be a separate charge from that of the community fees, which the owners agreed to at the time of purchase. The chiller fees are based on size of the individual units and the use by the owner/resident.
“We have even established a dedicated email, so that residents with questions or concerns can get correct and qualified advice on their chilled water consumption.”
To a query on whether the company was working to settle the issue amicably, the spokesperson added: “The charges are based on actual rates and once metres are activated, charges can be tracked by individual units on a monthly basis. We employ the services of a third party to oversee the collection of fees for this service, and the fees paid by the resident are as stated on the monthly bills, with all monies being transferred directly to Palm District Cooling, based on their charges.”
Another point of contention raised by residents was non-formation of interim owners association (IOA), charges which the developer has refuted.
“We expected the IOA to be formed within a month after we met Rera officials in May. But there has been no word about it,” Yamalova added.
Zabeel said it is in the final process of establishing the interim owners association, which will be ready to meet the deadline set by Rera.
“All duties and responsibilities will be duly handed over at that time. For now we are actually well ahead in our implementation for the established of Home Owners Association as part of the rules and regulations for the Jointly Owned Property Declaration, which in light of being a mixed use development, brings its own set of challenges. We welcome the handover to the home owners, so that they can be responsible to one another for creating a stronger Tiara Residence community,” the spokesperson added.
Steve's Response:
We know about this though don’t we?
The last dregs of residents in dispute went to RERA last month and came back thinking they had won a case… but in their meeting with RERA, although it was agreed AC would go back on, it was also agreed they would pay their bills. Some paid their bills but a few of the few didn’t, so Zabeel cut them off again about 10 days or so ago and this is where they are all at.
It’s mostly down to
no one really feeling comfortable with the capacity charge – or understanding it (but that’s a PDC and Palm wide issue)
pre Feb bills being split between all the apartments because the meters were not turned on before them (so some people were perhaps not in Dubai for many months but got a bill from when they moved in to when the meters were turned on. Zabeel were getting one bill from PDC because PDC refused to connect or recognise the meters because they would rather send 1 bill to Zabeel. SO Zabeel had a 1m to 2m per month bill that needed splitting. They took out common usage then split per apartment based on square foot. Will not work for everyone and the communication during the no meter period was non existent so no one knew it was coming, but to be fair to Zabeel, the AC was getting used and no one was paying. Some gesture toward the payment by Zabeel would have been better received but, as I say, there was never going to be a 1 size fits all solution)
There is no access or transparency or clarity regarding the individual meters for each apartment. People are suspicious that Zabeel are on the fiddle or they are top slicing. Zabeel say all the money is going straight to PDC. This surely can be proven and confirmed by Zabeel if it is true – I would imagine it is true but, it is Dubai , so suspicions will be there until proven innocent!
There are some valid issues that will only ever have been settled by compromise (such as 2 above) but generally – there is nothing a good talk, transparency and independent controlled access to the meter couldn’t overcome in my view.
Mark Says:
There you have it!!! Anybody that says E & T are not specialists on the Palm are deranged. We are the biggest managers of property on the Palm and do everything we can to make sure that our customers are upto date with all the antics and antivities..
20 June, 2010
Credit Notes
Nakheel Credit Notes are being traded again at the Nakheel head office. They were suspended for a while and we believe they have re started to allow people to consolidate their credit into different projects as of last week.
The credit notes have been trading ever since the Credit Crunch hit Dubai in October 2008. All the major developers have been allowing people to trade out of stalled projects into other stock.
It used to be that you could transfer your credit into any other property and even a property that was not in your name. Recently the Developers, and especially Nakheel, have only allowed people to transfer funds into a property they already own. This has slowed the consolidation market down considerably ,as it is effectively forcing people to buy another property ( and introduce more cash) before they can transfer their credit.
Some people are looking to buy credit from those people that have it and they are purchasing at a discounted rate in the region of 40%. The sellers of credit are obviously taking a huge hit on their ‘asset’ but after nearly two years of little improvement in the market, sellers have become pragmatic about the situation and many are deciding to cash in and place the reduced balance into other assets.
Throughout 2010 Credit Notes have been the mainstay of the Dubai property market with these transfers far outstripping legitimate house sales. In the short term this trend is likely to remain as people organize their portfolios the best way they can.
The credit notes have been trading ever since the Credit Crunch hit Dubai in October 2008. All the major developers have been allowing people to trade out of stalled projects into other stock.
It used to be that you could transfer your credit into any other property and even a property that was not in your name. Recently the Developers, and especially Nakheel, have only allowed people to transfer funds into a property they already own. This has slowed the consolidation market down considerably ,as it is effectively forcing people to buy another property ( and introduce more cash) before they can transfer their credit.
Some people are looking to buy credit from those people that have it and they are purchasing at a discounted rate in the region of 40%. The sellers of credit are obviously taking a huge hit on their ‘asset’ but after nearly two years of little improvement in the market, sellers have become pragmatic about the situation and many are deciding to cash in and place the reduced balance into other assets.
Throughout 2010 Credit Notes have been the mainstay of the Dubai property market with these transfers far outstripping legitimate house sales. In the short term this trend is likely to remain as people organize their portfolios the best way they can.
14 June, 2010
Abu Dhabi moves into Leisure
This weekend Aldar Properties, Abu Dhabi's largest developer, has announced it is to build a huge water park at Al Yass Island nearby to Ferrari World.
This area, Yass Island, is slowly becoming a very nice spot for all year round entertainment. It currently hosts the Grand Prix and has now got two magnificent golf courses in Saadiyat Island and Yass Links. With a world class water park to be added you can see that this area will become an very popular place for UAE residents to visit and holidaymakers looking for a great day out.The water park will need at least one day to to see everything and Ferrari World is just enormous .
It is easy to get to, as the governement have put amazing infrastructure in place and ongoing investment is apparent as you drive down the new 10 lane highway which connects the old motorway with Al Reem Island in the city. It also boasts some great new hotels with two new beach fronted developments being halfway complete.
We have also sold a couple of properties last week in AD, on the Yass Island site, which I believe will be a great investment for the buyer.
All in all this is exactly what the region needs and although they are bound to build a huge mall at some stage, it is good to see that creative thought is going into how to maximise this soon to be talked about leisure destination.
03 June, 2010
Palm Jumeirah Rentals
Over the past few weeks there have been a few reports out from the Advisory companies such as Colliers and Landmark suggesting that rents in Dubai and Abu Dhabi are set to fall further. I thought I would look into this a little and see what impact it might have on the Palm.
As you all know we are the only company dealing exclusively with the Palm so we should be able to give a good upto date commentary on what is happening with Palm apartments and villas.
The last month, from a rental perspective, has seen enquiries for both types increase from the previous month. There has been a healthy amount of closed deals and May 2010 was our best month to date for rentals on the Palm.
I think the most important things to analyse are:
The first three questions above can all be answered in a positive manner which would enable a normal market to thrive. The biggest is problem is the amount of new properties coming to the market.
On the Palm Jumeirah we have 400 more Oceana's to be handed over in the next few weeks, The Fairmont Residence in the next month, and 3 buildings at the Golden Mile. That's a lot of new stock which you can add another 500 Marina Residences to.
It really is all about the new inventory and what i have just described for the Palm can be duplicated across all the major developments of Dubai.
A year ago, when Tiara was launched, rental prices for this development held quite firm and actually increased over the first 6 months of launch. It is a quality product and only 300 units were released for rent and the demand was high enough to keep them bouyant.
A year on and Oceana, which is virtually the same product, is now seeing its rental prices drop. A one bed Oceana was rented by us 4 weeks ago for 140k per annum and now you can find them for 120k. This is a big drop and suggests that the landlords are trying to beat the market and ensure they get a tenant before there is so much stock that prices reduce again.
The reports from the advisory firms do have substance and it is true that apartment prices, even on the Palm, are seeing a pressure downwards. In contrast, there are no new villas being built and prices here are very stable. I don't think they have dropped in the past 12 months and because tenants stay for around 3 years in villas stock levels are limited.
The Palm will fair much better than the rest of Dubai over the next 2 years and i predict that occupancy levels will be high, and significantly higher than the rest of Dubai. This is because people do want to live on the Palm and as prices ease existing Dubai tenants will be able to move onto the Palm and benefit from better pricing.Due to the fact that there are 40,000 units to be handed over before Xmas I am sorry to say that this trend has started and Landlords are going to see this affect their revenue streams. This must continue for atleast 2 more years and my advice to all landlords is to offer a well maintained property and look after your tenant to the point where they want to renew for a second year.
The Palm is settling down very well and as Nakheel slowly gets back on track The Palm will still be the palce to be and live. I hope the maintenace of the Shorelines and Clubhouses can be improved soon as it this kind of service that will help maintain the rental levels.
It is going to be a rocky couple of years in Dubai and the rest of the World but quality will prevail at the end of the day.
As you all know we are the only company dealing exclusively with the Palm so we should be able to give a good upto date commentary on what is happening with Palm apartments and villas.
The last month, from a rental perspective, has seen enquiries for both types increase from the previous month. There has been a healthy amount of closed deals and May 2010 was our best month to date for rentals on the Palm.
I think the most important things to analyse are:
- How many deals are being done?
- What percentage of lets are fresh tenants versus "house hoppers"
- What level of rent is being achieved and its percentage gain or drop.
- How much new inventory is being added to the register. - This one is critical
The first three questions above can all be answered in a positive manner which would enable a normal market to thrive. The biggest is problem is the amount of new properties coming to the market.
On the Palm Jumeirah we have 400 more Oceana's to be handed over in the next few weeks, The Fairmont Residence in the next month, and 3 buildings at the Golden Mile. That's a lot of new stock which you can add another 500 Marina Residences to.
It really is all about the new inventory and what i have just described for the Palm can be duplicated across all the major developments of Dubai.
A year ago, when Tiara was launched, rental prices for this development held quite firm and actually increased over the first 6 months of launch. It is a quality product and only 300 units were released for rent and the demand was high enough to keep them bouyant.
A year on and Oceana, which is virtually the same product, is now seeing its rental prices drop. A one bed Oceana was rented by us 4 weeks ago for 140k per annum and now you can find them for 120k. This is a big drop and suggests that the landlords are trying to beat the market and ensure they get a tenant before there is so much stock that prices reduce again.
The reports from the advisory firms do have substance and it is true that apartment prices, even on the Palm, are seeing a pressure downwards. In contrast, there are no new villas being built and prices here are very stable. I don't think they have dropped in the past 12 months and because tenants stay for around 3 years in villas stock levels are limited.
The Palm will fair much better than the rest of Dubai over the next 2 years and i predict that occupancy levels will be high, and significantly higher than the rest of Dubai. This is because people do want to live on the Palm and as prices ease existing Dubai tenants will be able to move onto the Palm and benefit from better pricing.Due to the fact that there are 40,000 units to be handed over before Xmas I am sorry to say that this trend has started and Landlords are going to see this affect their revenue streams. This must continue for atleast 2 more years and my advice to all landlords is to offer a well maintained property and look after your tenant to the point where they want to renew for a second year.
The Palm is settling down very well and as Nakheel slowly gets back on track The Palm will still be the palce to be and live. I hope the maintenace of the Shorelines and Clubhouses can be improved soon as it this kind of service that will help maintain the rental levels.
It is going to be a rocky couple of years in Dubai and the rest of the World but quality will prevail at the end of the day.
25 March, 2010
Dubai World Debt - Nakheel to get substantial funds!
Good Morning,
I usually try to give you something a little light hearted but this morning the news wires are reporting some very important and good news. Here is the extract from Arabain Business I have just read:
'Dubai Government has confirmed it is to plough up to $9.5bn into troubled conglomerate Dubai World, as part of a restructuring plan which will see work continue on major Nakheel projects.Of this new cash, $8bn will be pumped into the real estate developer, and the remaining $1.5bn into parent company Dubai World.According to a statement by HH Shiekh Ahmad bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee, the funding will be provided in part by $5.7bn remaining from a loan previously made available from the Government of Abu Dhabi, and the rest from internal Dubai Government resources.Sheikh Ahmad added that as part of Nakheel’s restructuring proposal, the company’s bank creditors “will be asked to restructure their debt at commercial rates. Trade creditors will be offered a significant cash payment shortly and a tradable security. Assuming sufficient support for the proposal, the 2010 and 2011 Nakheel Sukuk will be paid as they fall due”.Describing Nakheel as an “important part” of the emirate’s economy, he said the business plan would allow work “to continue as soon as possible and puts Nakheel on a sound footing. The Government, as shareholder, will work closely with Nakheel so that any future projects are carefully planned and evaluated.”He added that the restructuring process is expected to take several months to implement, and said that the tribunal process “remains available to protect the companies, their creditors and other stakeholders”.Assuming sufficient support for the proposal, the 2010 and 2011 Nakheel Sukuk will be paid as they fall due." ( Source: Arabian Business . com - Andrew White - 25th March 2010)
There will be more detail over the next few weeks but at least we can rejoice in the fact that Nakheel are putting some positive news out there.
This is huge for Dubai through this recovery period and if Dubai World and it's subsidiaries can now show the World that they have effective management pushing forward a clear plan then I think there is a good chance that this could be the beginning of a recovery. Money is not the only answer to this problem and I think there will have to be a public rolling of certain heads before the rest of the World start to have faith again.
I usually try to give you something a little light hearted but this morning the news wires are reporting some very important and good news. Here is the extract from Arabain Business I have just read:
'Dubai Government has confirmed it is to plough up to $9.5bn into troubled conglomerate Dubai World, as part of a restructuring plan which will see work continue on major Nakheel projects.Of this new cash, $8bn will be pumped into the real estate developer, and the remaining $1.5bn into parent company Dubai World.According to a statement by HH Shiekh Ahmad bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee, the funding will be provided in part by $5.7bn remaining from a loan previously made available from the Government of Abu Dhabi, and the rest from internal Dubai Government resources.Sheikh Ahmad added that as part of Nakheel’s restructuring proposal, the company’s bank creditors “will be asked to restructure their debt at commercial rates. Trade creditors will be offered a significant cash payment shortly and a tradable security. Assuming sufficient support for the proposal, the 2010 and 2011 Nakheel Sukuk will be paid as they fall due”.Describing Nakheel as an “important part” of the emirate’s economy, he said the business plan would allow work “to continue as soon as possible and puts Nakheel on a sound footing. The Government, as shareholder, will work closely with Nakheel so that any future projects are carefully planned and evaluated.”He added that the restructuring process is expected to take several months to implement, and said that the tribunal process “remains available to protect the companies, their creditors and other stakeholders”.Assuming sufficient support for the proposal, the 2010 and 2011 Nakheel Sukuk will be paid as they fall due." ( Source: Arabian Business . com - Andrew White - 25th March 2010)
There will be more detail over the next few weeks but at least we can rejoice in the fact that Nakheel are putting some positive news out there.
This is huge for Dubai through this recovery period and if Dubai World and it's subsidiaries can now show the World that they have effective management pushing forward a clear plan then I think there is a good chance that this could be the beginning of a recovery. Money is not the only answer to this problem and I think there will have to be a public rolling of certain heads before the rest of the World start to have faith again.
24 March, 2010
'Ejari'
As a landlord or tenant in Dubai this is a new word for your vocabulary. It basically means 'my rent' and is the name for the new system of controlling rents in Dubai.
From now on all tenancy contracts are to be registered in the 'Ejari' system. There are number of reasons for this and my own thoughts are that it will help in the following ways:
From now on all tenancy contracts are to be registered in the 'Ejari' system. There are number of reasons for this and my own thoughts are that it will help in the following ways:
- It will create a standard porecedure that all agents will have to follow thus illiminating bad practice, negligence, and laziness.
- The tenancy contract will be standard reducing any disputes and making the agents life a whole lot easier.
- All tenancy contracts will be centrally registered giving the Land's Dept a chance to collect superb data. ( Hope it isn't sold on the black market - you wouldn't believe what data base we get offered)
- It will speed up any disputes between Landlord and Tenants.
The important thing to note is that it is mandatory and unless you have registered your tenancy agreement you will not have any claim to a dispute at the Land's Department.
So as a responsible Property Manager we have tried this week to register our landlords property and details. Unfortunately they are not quite ready for us yet but to be fair to them they have responded to my requests faster and more efficiently than any other gov't department in the past.
I really support this initiative as it makes the whole process clear and transparent. and hope that it won't be long before the sales process gets a similar change.
If any of you want more information then you could check out www.ejari.ae or keep checking this page for updates I feel are important.
17 March, 2010
1,000 dirham For Sale Boards!
I need to verify this but I was told on Tuesday that Victory Heights, in Sports City, are going to start charging 1,000 AED a month for the privilage of allowing us to put up 'For Sale' or 'To Let' boards.
At the moment we probably have about 20 boards up which means I would get stung for 20,000 dirhams per month! Not going to happen I can tell you now.
There are agents with a lot more boards up and to perfectly honest you can understand the reason behind it. There are far too many boards up and it does not look appealing when you visit the place. Often they get ripped down by the competition and left for dead on the floor.
Just for the record we will not be paying this charge but if the sellers are keen to have a board up then we would be happy to fill in the paperwork on their behalf and put up one of our aesthetically pleasing little numbers.
Some of you who are overseas may not understand the complexity of Dubai's trade license laws which I think will be my arguement with the facilities management company who are imposing this charge. Simply, you have to have a trade license for the specific trade you engage in. I cannot venture outside of my licensed activities and if i do there would be a large fine. As you will remember I know this only too well with the fight i had with the Tourist board over short term lettings.
In the Uk agents pay a company about 100 dhs to put up a board, maintain it, and add sold slips. So to pay 1,000 dhs a month to effectively rent space in a garden which is not theirs is missing some important thought processes.
If you are taking a look in Victory Heights this weekend you might need to look in the house window for the agent's details as we are confident the Facilities Mgt won't be able to charge a ground rent on your living room window.
At the moment we probably have about 20 boards up which means I would get stung for 20,000 dirhams per month! Not going to happen I can tell you now.
There are agents with a lot more boards up and to perfectly honest you can understand the reason behind it. There are far too many boards up and it does not look appealing when you visit the place. Often they get ripped down by the competition and left for dead on the floor.
Just for the record we will not be paying this charge but if the sellers are keen to have a board up then we would be happy to fill in the paperwork on their behalf and put up one of our aesthetically pleasing little numbers.
Some of you who are overseas may not understand the complexity of Dubai's trade license laws which I think will be my arguement with the facilities management company who are imposing this charge. Simply, you have to have a trade license for the specific trade you engage in. I cannot venture outside of my licensed activities and if i do there would be a large fine. As you will remember I know this only too well with the fight i had with the Tourist board over short term lettings.
In the Uk agents pay a company about 100 dhs to put up a board, maintain it, and add sold slips. So to pay 1,000 dhs a month to effectively rent space in a garden which is not theirs is missing some important thought processes.
If you are taking a look in Victory Heights this weekend you might need to look in the house window for the agent's details as we are confident the Facilities Mgt won't be able to charge a ground rent on your living room window.
08 February, 2010
Top tips to find a tenant
There are alot of properties being handed over at the moment and many landlords are asking about how easy it will be to find a tenant when they recieve the keys. Here are some of my thoughts taking into account current market conditions.
Properties soon to be handed over are:
Marina Residence, Palm Jumeirah
Oceana, Palm Jumeirah
Taj Grandeur, The Crescent, Palm Jumeirah
Fairmont, Palm Jumeirah
I would estimate that there are at least 2,000 apartments in these four developments, and they are all due to be handed over before June. This is alot of units and agents and investors need to be aware that this will impact the rental and the resale market.
We have been lucky throughout 2009 as rents on the Palm have stood up pretty well with one beds in Tiara reaching as high as 150k p.a.
The question is can the market withstand all these new ones coming on at the same time. If you are a landlord who wants to limit the void period then you will be pushing your rent down to get the first batch of tenants in your unit. This, I think, will be a common trend throughout 2010 which will undoubtedly lead to a new pricing structure for the fresh stock coming on.
Link this is with new towers in the Marina and JLT coming online and the simple facts are that supply is going to outwiegh demand.
As a responsible agent we have to take these factors seriously and monitor the situation closely so we can advise both landlords and tenants.
There are a number of simple things we can do to enhance the chances of finding suitable tenants with limited voids.
These are:
Properties soon to be handed over are:
Marina Residence, Palm Jumeirah
Oceana, Palm Jumeirah
Taj Grandeur, The Crescent, Palm Jumeirah
Fairmont, Palm Jumeirah
I would estimate that there are at least 2,000 apartments in these four developments, and they are all due to be handed over before June. This is alot of units and agents and investors need to be aware that this will impact the rental and the resale market.
We have been lucky throughout 2009 as rents on the Palm have stood up pretty well with one beds in Tiara reaching as high as 150k p.a.
The question is can the market withstand all these new ones coming on at the same time. If you are a landlord who wants to limit the void period then you will be pushing your rent down to get the first batch of tenants in your unit. This, I think, will be a common trend throughout 2010 which will undoubtedly lead to a new pricing structure for the fresh stock coming on.
Link this is with new towers in the Marina and JLT coming online and the simple facts are that supply is going to outwiegh demand.
As a responsible agent we have to take these factors seriously and monitor the situation closely so we can advise both landlords and tenants.
There are a number of simple things we can do to enhance the chances of finding suitable tenants with limited voids.
These are:
- Face facts immediately and do some research on prices and understand exactly where the pricies are at. Overshooting the market will result in an empty unit so accept the market price and start returning an income.
- Keep the apartment clean and organise regular cleaning of the floors and windows. Show it off to its best.Dirty toilets are a put off when you are viewing the one next door which is immaculate.
- The state of the apartment is a reflection on the landlord. Over the course of a year the Tenant will need something and if he has a choice of a property which has been ignored since handover or a property which is presented well he will think to himself that the landlord cares and will be easier to deal with if anything goes wrong.
- Landlords should start considering paying the agent fee on the basis that they don't charge the tenant. Advertise with no fees to a tenant and I gaurantee your property will be first off the shelf.
- Choose one agent and give them a key. Those of you who like to send drivers to open the door are not helping yourselves. Your agent needs immediate access and does not want to spend hours waiting for a key everytime there is a viewing. Most properties will need a dozen viewings befiore there is a tenant found and leaving the driver to liase with agents is minimising your chances of being the property of choice in the agent's office.
- Be flexible on the cheques. You don't need to offer more than 4 cheques but insisting on one is suicide these days.
- Be open to furnishing the apartment. Corporate rentals are a good source of enquiries and they all want furnished apartments.
- Tenants love managed properties. They have a point of contact and the property is maintained. They always stay longer.
PLEASE TAKE THIS SERIOUSLY. YOU WILL THANK ME ONE DAY!
20 January, 2010
Nakheel start charging for late Service Charges
Service charges are always a contentious issue and in these tough times it is a cost that hurts even more.
Most of the Service charges we deal with are for Nakheel Asset Management with Tiara being a recent addition.
Nakheel have been particularly laid back at collecting the service charges which i presume is due to the fact that many residents have firstly challenged the amount charged and then knocked the service provided. It is no surprise to me that the services provided are sub standard on the Shorelines when you consider the delinquincy rate of collections. I would guess that over 30% of residents are in the very late payer category and some are owing in excess of 100,000 dirhams. I also think that some of these late payers are the more vociferous ones when attacking the quality of services.
Service charges need paying or quite simply the investment will fall into disrepair and impact on sales values.
We have been told this week that Nakheel will start charging a late payment fee which will go down like a lead balloon but I think necessary.
As a guide here are some latest Service charges for you to compare:
Nakheel Shoreline
Service Charge 14 dhs /sq.ft
Community charge 5.10 dhs/sq.ft
Club house 2.6 dhs / sq.ft
Tiara
Service charge 19 dhs/ sq ft
Community charge 6 dhs/sq/ft
Marina Residence
Service charge total 19 dhs / sq.ft
We can challenge these all we like but service charges are a cost that has to be paid and if we want a decent environment to live where you can charge decent rental rates the charge is unavoidable.
Most of the Service charges we deal with are for Nakheel Asset Management with Tiara being a recent addition.
Nakheel have been particularly laid back at collecting the service charges which i presume is due to the fact that many residents have firstly challenged the amount charged and then knocked the service provided. It is no surprise to me that the services provided are sub standard on the Shorelines when you consider the delinquincy rate of collections. I would guess that over 30% of residents are in the very late payer category and some are owing in excess of 100,000 dirhams. I also think that some of these late payers are the more vociferous ones when attacking the quality of services.
Service charges need paying or quite simply the investment will fall into disrepair and impact on sales values.
We have been told this week that Nakheel will start charging a late payment fee which will go down like a lead balloon but I think necessary.
As a guide here are some latest Service charges for you to compare:
Nakheel Shoreline
Service Charge 14 dhs /sq.ft
Community charge 5.10 dhs/sq.ft
Club house 2.6 dhs / sq.ft
Tiara
Service charge 19 dhs/ sq ft
Community charge 6 dhs/sq/ft
Marina Residence
Service charge total 19 dhs / sq.ft
We can challenge these all we like but service charges are a cost that has to be paid and if we want a decent environment to live where you can charge decent rental rates the charge is unavoidable.
06 January, 2010
Costa v Starbucks
Two cups of coffee in the space of an hour and two totally different views of Dubai.
So, Monday 10 am and I have arranged to meet an investor who I have been chatting on and off with for the past 5 years. I generally prefer Starbucks to Costa so we met at JBR for a change from my usual surroundings.
As we stood in line, waiting to order, I politely asked about the kids with every intent of doing a bit of 'oohing' and 'aahing' about the snowfall in the UK. Not necessary as we were straight into the property game quicker than it takes Emaar to change a name on a Tower.
Its like this Mark . I have sat it out for years and Dubai has been good to me but I just don't feel comfortable anymore with any investment outside of the Palm Jumeirah. Jebel Ali in my opinion is a long long way off ,if ever, and I want out. Quite frankly if it was my development company that owned it, he said, I would dump it.
Slurping away at my piping hot skinny latte I bought a bit of time and feigned burnt lips and wiped away the froth from the side of my mouth whilst I thought of an answer
With his eyes bearing down on me he was only expecting one answer . 'You're right the place is never going to get built and you should run for the hills with 50% of the original price in your back pocket.'
It was early and I really didn't feel like the challenge so I shrugged and said 'we don't call it Wobbly Jelly for nothing'.
I honestly haven't got a clue what will happen but one thing for sure is that there is a very large piece of reclaimed land in Jebel Ali waiting to be developed.
After dodging the bullets my latte had cooled down to a temperature where I could gulp rather than slurp so I made my pleasantries and left. I was now Costa bound on the Palm for another potential lecture in how the world is doomed.
Skinny Cappucino please - who am I kidding? the belt is a full stretch since Xmas. We settled down with our respective drinks and I couldn't beleive my ears. 'Mark, I want to buy in Jebel Ali. I know its a risk and information is limited but you know there is a big piece of reclaimed land out there and one day it will get developed. I want in now'. Not exactly deja vu but i thought someone had spiked my drink.
No point in asking this guy about his kids then!!
This is what it is like at the moment. Everybody has a view on the state of the economy and in this emerging market we call Dubai there are a hell of alot of risk takers living here. For sure there are going to be some more tears but at the same time there are going to be some seriously happy people.
I still prefer Starbucks as a venue but for a coffee with a kick I highly recommend a trip to Costa Coffee on the Palm where I think Nakheel are sponsoring the extra shots.
So, Monday 10 am and I have arranged to meet an investor who I have been chatting on and off with for the past 5 years. I generally prefer Starbucks to Costa so we met at JBR for a change from my usual surroundings.
As we stood in line, waiting to order, I politely asked about the kids with every intent of doing a bit of 'oohing' and 'aahing' about the snowfall in the UK. Not necessary as we were straight into the property game quicker than it takes Emaar to change a name on a Tower.
Its like this Mark . I have sat it out for years and Dubai has been good to me but I just don't feel comfortable anymore with any investment outside of the Palm Jumeirah. Jebel Ali in my opinion is a long long way off ,if ever, and I want out. Quite frankly if it was my development company that owned it, he said, I would dump it.
Slurping away at my piping hot skinny latte I bought a bit of time and feigned burnt lips and wiped away the froth from the side of my mouth whilst I thought of an answer
With his eyes bearing down on me he was only expecting one answer . 'You're right the place is never going to get built and you should run for the hills with 50% of the original price in your back pocket.'
It was early and I really didn't feel like the challenge so I shrugged and said 'we don't call it Wobbly Jelly for nothing'.
I honestly haven't got a clue what will happen but one thing for sure is that there is a very large piece of reclaimed land in Jebel Ali waiting to be developed.
After dodging the bullets my latte had cooled down to a temperature where I could gulp rather than slurp so I made my pleasantries and left. I was now Costa bound on the Palm for another potential lecture in how the world is doomed.
Skinny Cappucino please - who am I kidding? the belt is a full stretch since Xmas. We settled down with our respective drinks and I couldn't beleive my ears. 'Mark, I want to buy in Jebel Ali. I know its a risk and information is limited but you know there is a big piece of reclaimed land out there and one day it will get developed. I want in now'. Not exactly deja vu but i thought someone had spiked my drink.
No point in asking this guy about his kids then!!
This is what it is like at the moment. Everybody has a view on the state of the economy and in this emerging market we call Dubai there are a hell of alot of risk takers living here. For sure there are going to be some more tears but at the same time there are going to be some seriously happy people.
I still prefer Starbucks as a venue but for a coffee with a kick I highly recommend a trip to Costa Coffee on the Palm where I think Nakheel are sponsoring the extra shots.
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