By Shane McGinley
Analysts say more investors being offered chance to switch from delayed to vacant projects
UAE developers are increasingly offering investors the opportunity to switch from delayed projects to finished vacant units, even between developments in different emirates, analysts report.
Since the downturn in the UAE property market, which saw prices falling by up to 60 percent and nearly half of projects mothballed in the wake of the global economic crisis, developers and authorities are increasingly looking to move investors out of stalled projects and into those which are seen are more viable.
“An increase in the number of consolidations is really a reflection of the maturing marketplace and a realisation from both parties that a stalemate situation is of no benefit,” said Matthew Green, head of research at Dubai-based real estate consultancy CB Richard Ellis
Earlier this week, it was reported developers in Ajman were in talks to consolidate investors from stalled projects into those currently under construction.
"We are building two projects in Ajman and they are 50 per cent sold. We will look to lease our remaining units when the buildings get completed, but we are also in talks with other developers, who aren't going ahead with their projects, to move their customers to our projects," said Christina Cabading, president of BSEL Infrastructure Realty FZE told Emirates 24/7.
The trend to move investors to projects that have gotten the green light also stretches across borders, said Paul Musson, manager of residential sales and leasing at the Better Homes real estate agency.
“There are certain developers who are offering a switch package for moneys paid to projects in say Ajman, for units here in Dubai,” he said.
However, he said the switch was not always straightforward and as the substitute units offered are “often overpriced” and don’t represent the same value as the original unit.
A lack of clarity regarding the relative rights of investors and developers is also a major stumbling point, said Green.
“Further clarity in this regard, particularly in the form of successful cases against developers, would go a long way in easing investor concerns at this point,” he said.
The switching process is common among large developers, with Nakheel recently offering investors on the stalled Palm Jebel Ali project the option to switch to units on the Palm Jumeirah or in its other completed projects
“However, for the smaller developers this may not be an option and the avenues for negotiation are somewhat more constrained,” added Green.
I like RERA very much as with out them there would be no escrow accounts so i would have no idea where my money would be now 4 years on, but i wish they would tell me if they will return all the money that i have paid in escrow and out side escrow for my apartment, as we have no idea where we stand and it makes a bad feeling, imagine spending 500000 AED and you have no idea where it is ,I am told RERA may have my money now maybe some of it may be all 4 years on I have no idea ,i am only a small home buyer and borrowed most of my money 4 years ago,I still pay alot of interest on my money that I can never see .Every week I pay interest on it and I just wait and wait never knowing how much there is left ,I have all my reciepts but I need to give my money back to the place I borrowed it from,
this is going on too long ,Because of delays and never knowing i have lost so much ,Please do somthing soon ,
RERA is a Government Body that are basically there to monitor and regulate but they do not take action. My advice is to go to the Developer that you have bought from and don't leave their premises until you get your money back. If these Developers are non existent or they have gone bust then I believe you have years ahead before you see anything. I suggest that you inform the Bank or your borrowers that your loan has gone bad and try and stop the interest or come to a reschedule arrangement. It will be years before Real Estate fixes in Dubai !!!!!!
But all my money was in Escrow accounts inline with the law so its still there its just a matter of giving it back or letting me know what they are doing with my money there was nothing built at my project so no progress so no payments from the escrow accounts.If my money has gone what did Standard charterd bank do with it RERA must know this and be looking for the money because it was put into standard chartered bank inline with the law escrow accounts or that is what it said on the letter that i recieved .
With out RERA there would be no escrow accounts so they have done a good job protecting our money from people that build nothing.
I was offered swapping to another property before my estate agent vanished but it was very expensive nothing like the price I was paying in 2007 also it was a skyscraper and I do not like high living in skyscrapers,My Developer has also vanished with no office.
So it is good that RERA are there to look after our money,
Escrow does not mean all your money is "safe" in that account. If the developer spent money on Sales & Marketing this is taken out, if they paid money on design/land/mobilisation then also this will have been taken out. Ultimately there may be little or no money left for the investors in the account and it will have been sunk into the ground....or worse.
We invested with Deyaar for an apartment in Jebel Ali and presumed , like Richard, that our money was in escrow. But I was informed by a senior manager in Deeyar that they had spent over 60% of the money they received even before acquiring the land. So there is apparently no money in the "presumed safe" escrow accounts. An estate agent told me that apparently the government privately gave some big developers the permission to use this money - but I am not sure if this is a fact. Will RERA please make a public statement on this and clarify ?
Deyaar offered us a swap with an office in Business Bay - but we do not want an office. They also offered us an apartment in Silicone Oasis at extremely inflated rates.
The latest missive offered us to get cash through some agent. Both Deyaar and the agent would take their cut and we were expected to receive only 25% of what we paid in. As far as I am concerned this borders on fraud.