Anil Bhoyrul writes a letter to an old friend the property speculator
It’s been a while, hasn’t it? You probably don’t remember me, even though we ran into each other a few times during 2006-2007. But I remember you quite well; you spent most evenings in a place called Barasti in Dubai, buying complete strangers expensive bottles of “sparkling water”. Sometimes you spilt it on your shiny suit, but that didn’t matter because you just drove your BMW Z4 to Pierre Cardin and bought another one.
In fact, the more I think about it, there is no way you would remember me. After all, 2006-2007 was a very, very busy time, wasn’t it? Each day, you would pay a labourer around twenty dollars to go and queue up outside the sales office of a big-name developer, and get you a registration ticket. Then you would buy a property – any property, really - one, two, or three-bedroom, who really cares? You usually put down around 10 percent of the launch price, except that you never had to pay up, because even before the cheque was cashed, you had managed to sell the property for a huge profit.
Sometimes, I know you even bought properties from other flippers, and still made heaps of cash.
Good times, weren’t they? Remember Niki Lauda Twin Towers? Or Michael Schumacher Business Avenue? Then there was the Palm Jebel Ali. Wow, what a project that was. Dubai Sports City. That was fun, wasn’t it?
Thing is, and I don’t want to sound like a party pooper, but you can see the pattern here can’t you? None of these projects I just mentioned were ever fully built. I’m sure you read that Citigroup report in December 2011 which estimated the total value of stalled projects at $958bn.
Or did you? I guess there was no reason to. Back in late 2008, when things started to go badly wrong, you were on the first A380 out of town. And I can see why. You had made your money, a lot of money, but the party was over. So you just left, without even saying goodbye. Shame really, because had you stayed, you might have run into one of the thousands of people who also bought properties off plan – many from you – that were never built. They also hang around Barasti these days, but only because of the Groupon meal deals.
Except now, you are back. It must feel like Groundhog Day to you, because nothing has changed much. There are thousands of people queuing up again overnight to buy off- plan property in Dubai (I bet you paid some of those labourers in line for the Emaar Mira project last week). And as you know much better than me, it’s pretty simple to buy something and sell it for a 20 percent premium online twenty four hours later. All those laws that you feared would be brought in to clamp down on speculators after you left, well, they never left the drawing board.
In a strange way, this town is even better for you today than it was six years ago. Many of the people who started those projects that were never built (do you remember a guy called Robin Lohmann? Just curious...), well they disappeared as well in 2008. And they definitely aren’t coming back.
This means, of course, that all the current big launches are by reputable developers. You and I both know Emaar will definitely deliver its projects, it won’t run out of cash. Even Nakheel – yes, Nakheel. Today they reported a 36 percent rise in Q1 profits to $133m. It won’t be long before your people are queuing up for their projects as well. With the UAE looking at close to a 5 percent growth in GDP this year, I guess you will be here for a while to come.
But anyway, I genuinely wish you well. What you are doing is not wrong, it is not illegal and actually not even immoral. You are just very good at what you do, and deep down, I guess the rest of us are just a little jealous.
Good luck. Welcome back, and have fun at Barasti.