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.

'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:

1. It will create a standard porecedure that all agents will have to follow thus illiminating bad practice, negligence, and laziness.
2. The tenancy contract will be standard reducing any disputes and making the agents life a whole lot easier.
3. 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)
4. 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.

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.