Dubai Properties, Sama Dubai and Tatweer have merged in an attempt to lessen the impact of the financial crisis. Dubai holding now consists of just 4 divisions instead of the previous 7 – investments, hospitality, property and business parks. there is also talk of merging Emaar properties into this new vehicle.
Worldwide economic downturn brings with it the expectation of mergers and acquisitions, unpredictable pricing in the realms of the sales and rent markets and cautious lending, in a bid to reach a (supposedly) smooth road to market and economic recovery.
Dubai-based developer, Emaar properties saw another slide in share prices after closing it’s offices in Algeria due to “a lack of progress which is beyond the company’s control.” The action came after announcements that Emaar will be merging with several other government-owned developers, and threw more confusion and lack of confidence into Dubai’s stock and real estate markets. Investors reacted badly to the proposed merger and, Emaar’s shares fell sharply on the announcement. Several analysts have stopped rating the company, because of lack of transparency in the deal, but one thing is clear – the merger is highly likely to damage existing shareholders. Emaar shares dropped another 7.2%, to close at 2.60 dirhams (71 cents) Sunday after the Algerian announcement.
Following on from Emaar’s recent announcement that they will merge with selected parts of Dubai Holdings, another merger has just been announced - Standard & Poor’s Ratings Services said today that it had decided to keep its ‘A’ long-term credit ratings on Dubai-based real estate developer and hotel operator Dubai Holding Commercial Operations Group LLC after an announcement that the company will now merge with Emaar. This is the S&P press release:
Yet more property related laws to be introduced in Dubai
According to “The National,” a major Dubai newspaper, Dubai is expected to release yet another set of laws governing the property industry. There is a growing number of disputes between small property investors and developers in Dubai and prices continue to fall. This is what The National has to say:
Ebony Ivory Investors Group, 500 international property buyers and investors, have signed a petition requesting Dubai’s Real Estate Regulatory Authority (RERA) and the Dubai Ruler’s Court to investigate the Jumeirah Lakes Towers Ebony Ivory Towers project, involving Al Fajer Properties and its marketing agent Dynasty Zarooni
More on Property Investors in Dubai Scammed Seek RERA Intervention
The latest press release, I ,mean editorial, I mean advertorial from Emirates Business is pretty clear that Dubai’s property bubble has finished deflating and we are back to boom times. Hold on to your hats!
Dubai’s first property auction took place last night, and not a single one of the four properties up for auction was sold. On the block were three villas in Arabian ranches and a penthouse in Jumeirah beach. Bids were received on only two properties, but both failed to sell. Prior to the auction, the organizers were excited to be able to “see a true reflection of the current market value,” so it seems the current market value is somewhere below the reserves.
The hastily-introduced law No 9 in Dubai heavily favors property developers, and prevents any investors from pulling out of deals, without good reasons while allowing developers to cancel, rearrange or renegotiate the deal. The key points are:
London townhouse sold for huge discount; the UK, Hong Kong, Dubai and Calgary markets have bottomed out; Luxury resort in the Bahamas goes broke; Irish property prices have fallen 52 percent and a British Member of Parliament forgets he paid his mortgage off.
Volatility still rules the property markets – although when the term “volatility,” started to mean “dropping prices,” remains a mystery. A few interesting reports from the property investing world make disturbing reading for some markets – particularly some of the emerging markets.
