A building under construction in Dubai collapsed over the weekend. It is understood that no one was injured in the accident.

The contractor on the project, understood to be a commercial complex, has been taken into police custody, according to local press reports.

There were 21 labourers on the six-storey building at Deira when it began to crumble on Sunday but all of them were able to evacuate the site safely. The workers fled the site, which is near the Ramada Hotel, after feeling tremors and seeing falling glass and crumbling walls.

The incident lasted about 40 minutes, causing about 12 cars to be crushed and surrounding buildings to evacuated.

An investigation is now under way to ascertain the cause of the collapse under Essa al Maidour, assistant director general for general projects affairs at Dubai Municipality, who is responsible for building safety in Dubai.

He said initial reports suggested there may have been a failure of structural elements.

Al Maidour told Arabian.Business.com: “We have already appointed a technical committee to investigate the reasons behind this collapse. We have called on consultants and project managers to analyse this incident.

“Right now it appears to be a failure in the structural elements of the building. The concentration of the load was disproportionate on one side of the building.”

Source : building.co.uk

Korean giant Samsung Engineering & Construction sought advice from UAE-based law firm Al Tamimi & Company, according to the Legal 500 2009: Europe, Middle East & Africa, published by UK-based Legalease.

All three parties concerned in the Legal 500 report have refused to discuss the possible multi-billion-dollar claim further.

When contacted by CW, a senior associate with Al Tamimi’s construction and engineering division, whose colleague dealt with the case, said: “Other than the information disclosed in Legal 500, my colleague informs me he would not be able to add anything.”

An Emaar spokesperson rubbished the claims, saying only that “Emaar does not respond to such rumours and speculation.”

Samsung Engineering also refused to comment.

The Legal 500 report stated that: “[Al Tamimi] continue to receive important instructions, notably in the contentious segment.

It recently advised Samsung Corporation Engineering & Construction Group in connection with a $4.1bn claim relating to the famous Burj Dubai Tower.”

The Legal 500 provides coverage of legal service providers and their capabilities, in over 100 countries, including the UAE. The cross-referenced service has been published for over 20 years and is internationally recognised in the legal community.

A total of $4.1 billion would represent the biggest claim ever seen in the regional construction industry by far, experts said.

Dubai-based construction law expert and Pinsent Masons partner Sachin Kerur confirmed he was unaware of any precedent involving such a large figure in the history of construction law.

An increase in the frequency of contractor’s claims against developers is connected to the Dubai government’s $10 billion bond issuance earlier this year and a belief that there is liquidity in the system, construction lawyers said.

“You may have a viable claim, the question is, can you collect?” said Michael Lunjevich, a partner at Dubai-based business law firm Hadef & Partners. “Maybe they think they can collect now.”

Contractors’ association vice-chairman Imad Al Jamal agreed that cash from the bond issuance could be influencing the decision of contractors to pursue major claims.

“There is anecdotal evidence in the market that money is flowing back into the system and onto the contractors,” he said. “That would certainly be a positive for the construction industry in easing liquidity and funding issues.”

Samsung Engineering and Construction is one of three main contractors employed on the tower, alongside local firm Arabtec and Belgium-based Besix.

Source: Construction Week Online

Analysts at the Egypt-based investment bank, in a report published on Wednesday, said it had expected recent clarifications from the UAE government on home ownership to improve investor sentiment.

The new federal law passed earlier this month said foreigners buying a home in the UAE valued at more than 1 million dirhams would be eligible for a six-month renewable residency visa.

A statement issued by the Ministry of the Interior said the move underlined the government’s commitment to serving the interests of all people who view the country as “an oasis of stability and peace”.

But EFG Hermes analysts called the rules “self-destructive rather than helpful”. As a result, they have predicted that a market recovery in Dubai could happen as late as late-2011, rather than its earlier prediction of the second half of 2010.

Analysts also said property prices in Dubai were continuing to slide and were now down 35 percent since the start of 2009.

The latest study on the emirate’s real estate market added that prices were 40 percent off their peaks of 2008 while transaction values and volumes were also subdued during April.

Latest figures revealed that the total value of transactions amounted to AED31.8 billion during the first quarter of 2009, compared to AED73.4 billion in the fourth quarter of 2008 and AED110 billion in Q3 – when the property market was at its peak.

This represents a 72 percent drop off in market activity from the highs of the previous year, EFG Hermes added.

And analysts forecast that the slump in Dubai house prices would continue until they fell up to 60 percent from their 2008 highs.

Source: Arabian Business

Giant Dubai developer Emaar Properties said on Monday it plans to hire 1,600 new employees despite being hard hit by the financial crisis and as thousands are losing their jobs in the emirate.

Emaar, which suffered a net loss of more than 481 million dollars in the last quarter of 2008, said it was looking to complete the recruiting process within three months, WAM state news agency reported.

It said that the new staff are needed for its retail, hospitality and entertainment divisions.

Chairman Mohammed Alabbar said that the company’s strategy aims to boost the performance of its subsidiaries in waiting for the recovery in the real estate sector, which was heavily hit by the global financial crisis, WAM reported.

Emaar’s decision bucks a trend of layoffs which saw thousands of workers, mainly in the emirate’s once-thriving construction sector, reportedly lose their jobs as finance dried up and investor confidence evaporated.

The company which is building the world’s tallest tower, Burj Dubai, still made a profit in 2008, blaming its heavy losses in the final quarter on huge US writedowns and goodwill impairment of around 735 million dollars.

Its full year profits plunged by more than half to 831.7 million dollars, compared with 1.79 billion dollars in 2007. The stock price of Emaar, the largest listed property developer in the Middle East, crashed 85 percent last year.

Source: AFP

The poll was carried out by Arabian Business on the back of a new rental index for Dubai – drawn up by the Real Estate Regulatory Authority (RERA) and published at the end of April.

The index indicates that rents have plummeted by up to 50 percent in some areas, compared with a similar index issued in January.

However, of those responding to the poll 63 percent thought they were actually more unhelpful than helpful, as they curtailed a completely free market, and prevented individuals from negotiating even better rents.
Source: Arabian Business

A Dubai construction firm is planning to lay off up to 1,000 jobs in the first couple of months of next year.

Al Shafar General Contracting admitted it had taken on more recruits than it needed because it was expecting the market to continue growing.

But Dubai has been at the forefront of the slowdown in the Gulf in recent weeks which has seen a number of high-profile projects in the emirate delayed or mothballed. Local developer Nakheel recently announced a series of big job losses as well.

Al Shafar chief executive Bishoy Azmi said the firm had been expecting “aggressive expansion” and added: “We can manage ongoing work without adding new staff. The amount of new projects has significantly reduced.”

The job cuts will be made in the next two months, Azmi added. The firm employs around 15,000 people and has around £1.1bn worth of projects up and running.

Elsewhere in Dubai, one firm has said it has begun discussions with developers to slow down the rate at which buildings go up.

Arabtec Construction chief executive Riad Kamal said the company was talking to clients about extending the timeframe of some projects.

He added: “There was no reason for projects to be implemented at the speed at which they were.”

Source: Building

“We don’t really have an understanding of the full extent of how bad the current picture is, but from our own pricing index we have seen price declines starting in September,” analyst Sana Kapadia said.

The fall in EFG’s Dubai Residential Pricing Index, which includes both off plan and completed properties, continued in October and November but is difficult to gauge because it is based on asking prices and not the final transactions.

Since September, data collected by the investment bank suggest prices have come down between one and two percent per month, but the real fall is likely to be “much steeper”.

“Everything tends to be quite anecdotal. We’ve only begun to hear about developers beginning to scale back on projects and speculators turning away from deposits,” Kapadia said.

Earlier this year EFG Hermes predicted a peak in Dubai real estate prices by mid-2009, followed by a 15 to 20 percent slump in prices by 2011.

In November it said the decline is likely to be more front loaded, with most of it taking place next year.

The 70,000 new units previously expected to hit the market in 2009 is currently being revised downwards.

Real estate prices in Dubai could begin to pick up in 2010 if liquidity and investor confidence return to the market, but may remain depressed until 2011, Kapadia said.

“If prices come down 15 to 20 percent that still doesn’t make them extremely affordable for the bulk of the addressable market. We have to see how developers cope with bringing new product to the market,” she said.

Source: Arabian Business

The move follows at least five years of break-neck construction during which contractors grappled with tight and, in some cases, unrealistic deadlines.

With the sector slowing as new projects are delayed or cancelled because of a lack of credit, contractors are trying to extend existing contracts to allow developers more time to find funding.

“There was no reason for projects to be implemented at the speed at which they were,” said Riad Kamal, the chief executive of Arabtec Construction, which is talking to several clients about drawing up longer construction schedules.

The extensions would complement moves by companies such as Emaar Properties, Nakheel and Union Properties to relax payment plans for property buyers.

“We’ve asked them to review their cashflow and instruct us as to the speed they wish us to proceed to match the schedule of payments they expect from their buyers,” said Mr Kamal.

“And we’ve asked to continuously review the situation together so we can guarantee everybody gets paid, including our subcontractors and suppliers.”

Mr Kamal said developers would have “no choice” but to be more realistic about project delivery because of the credit crunch.

“They have responded positively so far,” he said.

The revised timetable would mean tower projects of about 40 floors, which previously took an average of two years to complete, would take at least another year. The same amount of time would be needed for low-rise residential and retail projects.

“There’s been a radical change in the last couple of months,” said Kez Taylor, the managing director of Al Jaber Engineering and Contracting.

He said that although work on its Dh3.4 billion (US$926 million) World Trade Centre contract had been “re-phased”, the project was fully going ahead.

“You can still roll a project out, but it might mean extending the contract period to suit the cashflow situation of the developer,” he said.

“As a contractor, you have to be sensitive to the situation… You’ve got to try and work with developers to find a solution that suits the current scenario.”

Companies such as Nakheel are reviewing schedules on a project-by-project basis.

“We’re looking at a variety of options,” said a company insider.

Meanwhile, it is uncertain whether Emaar Properties will adopt a similar stance.

“Emaar does not usually sign long-term contracts with its contractors,” the company said.

While extending deadlines would be costlier for contractors because it would stretch their overheads over a longer period of time, it was essential to avert redundancies, said Imad al Jamal, the vice chairman of the UAE Contractors Association.

“Instead of firing 10 per cent of your workforce, you can keep the same number and decelerate work by 10 or 20 per cent,” he said.

“Laying people off is not good for the company or the economy, because when you recover it will be difficult to bring people back.”

Mr al Jamal said that while prolonging projects could pose risks for developers and contractors, it would also provoke a rethink about how they were implemented.

“Both parties are taking risks, but it will give breathing space to the developer to get bank facilities extended,” he said.

“And it will be good restructuring for banks, developers, contractors and suppliers. The last four or five years was an unusual and crazy time; a lot of what happened in the past was without a proper study of plans or co-ordination between the government authorities and private companies. Now, there will be a period of reorganisation.”

John Bullough, the chief executive of Aldar Properties, based in Abu Dhabi, said developers and contractors would work closer together because of the slowdown.

“In the last few years it’s been very difficult to procure and find contractor resources – now there’ll be more drive to share risk and drive costs down.”

Source: The National

Private developer Damac pioneered this trend by promising every purchaser of its apartments a car and entry into a draw, with prizes such as a boat or a Dh5.5 million private jet up for grabs.

Although some of these extravagant offers no longer exist, there are promotions that are offering added value to new investments.

Damac does not currently have an offer with the same ‘wow’ factor – which featured Bentleys, Aston Martins and Lamborghinis – but its CEO Peter Riddoch said its position was constantly under review. “As a multinational, Damac Properties embarks on innovative marketing promotions to support its overall sales strategy,” he said.

“We conduct similar promotions throughout the year across the countries we operate in and will continue to do so,” said Riddoch.

In the current economic climate, many people are wondering if now is the right time to buy. With speculation that prices will experience a slowdown in 2009, some potential buyers are holding off to get more for their money. But a new wave of developers are offering more “common sense” incentives to lure buyers to part with their dirhams.

The days of free cars may be – temporarily – consigned to history, but in their place are discounted apartments and extra services.

Emaar is pioneering schemes called Rent to Own and Plan to Own to make it easier for buyers to afford a home in Dubai.

The first allows people living in some Downtown Burj Dubai properties to have their first year’s rent put towards a down payment if they decide to buy within 10 months of moving in.

Buyers have to find a 70 per cent mortgage with the remaining amount – up to 25 per cent – paid to Emaar over the next five years.

An Emaar spokesman said: “The Rent to Own programme facilitates easier property transactions in prestigious residential properties such as those within Downtown Burj Dubai by providing customers the flexibility of living in a property, experiencing the qualitative difference provided by Emaar to help them make informed purchase decisions.”

This initiative compares to Plan to Own, which has some like-for-like features, such as a 70 per cent mortgage and 25 per cent extended payment plan, but differs in that buyers only start paying one year after handover.

“The Plan to Own programme will offer flexibility, making it possible to bridge the current gap due to lower loan-to-value ratios offered by banks and financial institutions,” said the spokesman.

In a time when securing a mortgage has become difficult, especially for those who are self employed, Emaar said there had been a good uptake of customers for these schemes, but refuses to release precise numbers.

Cecilia Reinaldo, Managing Director of Fine and Country UAE, says these strategies are vital: “With property marketing becoming more mature in the region – and with greater levels of caution being shown by international investors – serious developers are looking to create a more flexible payment environment for consumers,” she said.

“This, in turn, will attract non-cash buyers and help them facilitate the purchase.”

Getting money back – or money off – is always going to have mass appeal and as developments continue to come onstream, it could be a deal-clincher.

Although some have been put on hold until the global financial crisis passes, other developers are surging ahead with projects as planned and as such are still making their presence felt in the market.

The First Group is offering a Dh50,000 discount on some of its properties, which span communities including Jumeirah Village and Dubai Sports City, but it only applies to existing clients.

A one-bed property in The First Group Tower in Jumeirah Village South starts at Dh1m, thus the offer represents a five per cent discount, but new customers would be better off taking the 15 per cent discount offered on other, similar units – thereby saving an extra Dh100,000.

Although some of First’s other towers have already sold, it still has The Matrix on the market, which overlooks the Els Golf Club in Dubai Sports City, as well as projects in Umm Al Quwain and Ras Al Khaimah, including Beachside at White Bay.

The UK-based developer has also attracted international sports stars, such as Michael Owen, Andrew Flintoff and Sam Torrance, to put their names to its projects, following in the footsteps of the likes of Alternative Capital Investment, which has named buildings after Michael Schumacher and Niki Lauda in Business Bay, Dubai, in a bid to encourage more investment.

While some customers are ruled by their wallet and as such they will be drawn towards discounted properties, others are looking to get more for their money, which means better service.

Perhaps not surprisingly, a number of people want more than just a parking space and swimming pool with their apartment. Many want value-added services too, which is why Jumeirah Group established its Stay Different programme.

It provides residents with services akin to hotel apartments, such as interior design complete with designer furniture, valet parking and housekeeping. Jumeirah Living also offers a lifestyle concierge service.
The green incentive

For some developers and homeowners, investing is as much about giving as it isreceiving.

Tameer and Mizin are working together to create a six-tower Eye Park community in Arjan, Dubailand, constructed to environmental standards devised by the World Green Building Council.

This will mean homes with the smallest environmental impact possible.

These standards govern everything from the paint used on walls to the way electricity is generated to heat or cool buildings, and power lights. It is aiming for ’silver certification’ in the new construction and core and shell categories.

Tameer CEO Ghassan Sakhnini said: “We have chosen to develop the sustainable Eye Park project as a result of the increased interest in the development and the environment.

“The design team has taken the issue of sustainability very seriously, and implemented sustainable design features across all areas of the project, including landscaping and site, energy and atmosphere, and materials and resources, in order to decrease the environmental impact of the project as much as possible.”

Source: Emirates Business 24|7