Nakheel has offered investors in the stalled Palm Jebel Ali development alternative homes on other projects, casting further uncertainty over the future of the vast reclaimed island.
Some Dubai developers have encouraged home buyers on struggling projects to transfer their deposits to other developments that are nearer completion.
People who bought waterfront villas on Palm Jebel Ali, where prices have tumbled by about 45 per cent from their peak in the third quarter of last year, are now being asked to transfer their investments to projects that include Al Furjan and Jumeirah Heights, which are both under construction.
But the move has been criticised by investors, who expected to move into their new homes last year.
“Nakheel has called investors and given them this option,” said Saqib Iqbal, who bought a villa in the development in 2006.
“But most investors would like them to complete Palm Jebel Ali. People have paid premiums on top of what they paid originally, it’s a disaster to be asked to move somewhere else.”
Palm Jebel Ali was the second artificial island project to be launched by Nakheel and was designed to accommodate up to 250,000 people… The global financial crisis, which hit Dubai in October last year, was a further blow to the development as speculators withdrew from the market. Other Nakheel projects, including Trump International Hotel and Tower, the Nakheel Harbour and Tower development, have also been put on hold.
Nakheel must repay a US$3.52 billion (Dh12.92bn) debt, which comes due next month… SOURCE
New Islamic lender Ajman Bank AJBNK.DU is revising its strategy amid the global economic crisis until the market improves over the next year, its chief executive said on Monday.
The bank, one of eight Islamic lenders in the United Arab Emirates, had originally planned an aggressive rollout in the federation and across the Gulf Arab region.
But it has pulled back from its pan-regional expansion and curbed plans to participate in the local real estate and credit card business as the global financial crisis sweeps across the region.
“Growth and profitability are no longer important objectives for 2009. What is more important is survival and, to some extent, continuity,” Yousif Khalaf told the Reuters Islamic Banking and Finance Summit in Dubai.
The United Arab Emirates’ construction sector is suffering a sharp slowdown as developers, especially in former boomtown Dubai, halt or postpone projects and thousands of jobs are slashed.
The bank had originally planned to open 15 branches in its first year, but will now open eight in 2009, six next year and another six in 2011…SOURCE
Feeling the worsening global slowdown, many of UAE’s companies — mainly in the property, construction and financial sectors — have laid off hundreds of workers. Construction companies have delayed or canceled projects, banks are tightening lending and tourism is slowing. Some companies have given their employees a period of two to three months to look for alternative work — but jobs are rare because most companies are freezing recruitment.
The Federal National Council on Tuesday voiced concern over the dismissal of a number of Emiratis from the private sector and questioned the Labour Minister about the measures his ministry has taken to tackle the issue.
Saqr Gobash Saeed Gobash, Minister of Labour, assured the House that while the ministry is taking the matter seriously, it should not be blown out of proportion.
“Sixty-four Emiratis have filed labour-related complaints at the ministry of labour between January 2008 and February 15, 2009. Out of around 15,000 Emiratis employed by the private sector, only 37 workers complained to the ministry over dismissal. Twenty-seven others complained over unpaid salaries and other dues. Of these complaints, 16 were settled amicably, 12 filed with the court and nine were shelved after the complainants either failed to show up at the ministry of withdrew their complaints,” Gobash said.
He added the new ministerial decision set conditions on termination of Emirati workers. Private sector companies will face legal action if they sack Emiratis who have not violated the labour law.
The decision came after Al Futtaim Group sacked a number of Emiratis.
Al Futtaim Group said they were terminated because the company was “restructured in light of the current global financial crisis.”…
Seems like everyone wants to copy Obama these days… Somehow the UAE can’t bring itself to say R-E-C-E-S-S-I-O-N:
The country could reverse an economic slump and post 0.5 per cent growth this year with an aggressive plan to boost government spending and inject Dh110 billion (US$29.9bn) into the banking system to promote lending, Standard Chartered Bank said yesterday.
“First, the Government must increase its expenditure substantially, and second, it needs to address the liquidity issue,” said Marios Maratheftis, the regional head of research at the bank.
The recommendations echo the policies that countries throughout the world are adopting to spur economic growth, ward off financial instability and spur spending during the worst global economic crisis in three decades.
But Mr Maratheftis said unlike most major industrialised countries that entered the global financial crisis with large public deficits, the UAE was sitting on large surpluses that could be used to battle the downturn. Last year alone, it had a 30 per cent budget surplus.
“We are entering this downturn from a position of relative strength,” he said. “When you run surpluses you have to save for a rainy day. So we have an umbrella that can save us from rain, but we have to open it.” Mr Maratheftis said a budget deficit would be “absolutely sustainable”.
The UAE’s Dh42.2bn budget for this year plans for no shortfall, although the Dubai Department of Finance announced that the emirate would increase spending this year, which could mean a deficit of Dh4.2bn.
Mr Maratheftis said fiscal spending should be focused on projects such as building schools, hospitals and ports. This would also allow the country to diversify its economy and create new jobs.
“Real estate should not be the main driver of our economy, but we should invest in productive capacity of the economy in education, tourism, financial services and trade,” he said. “We must return to where we started.”
He said the crisis could be a “blessing in disguise” for the region, after too much ready money had flowed into real estate.
Until the end of last year, about 75 per cent of announced projects in the region were in property. But with global liquidity all but dried up, house prices have plunged and developers have cancelled several hundred billion dirhams in construction projects.
Economists have lowered their growth forecasts for the UAE in recent months, with expectations of a sustained period of low oil prices and softening economic demand.
Last month, Standard Chartered revised its estimates for real GDP growth in the UAE from 2.7 per cent to 0.5 per cent…SOURCE
02/08/2009 11:15 PM | By Siham Al Najami, Staff Reporter
Dubai: Dubai Modern High School is to keep its 90 per cent fee hike regardless of two parents’ gatherings and meetings with top officials.
During a meeting this Saturday with parents, representatives and officials from the Global Education Management Systems (GEMS) which operates the school, it has been decided by GEMS that the fees, as published on the school’s website, “are final and in agreement with the Knowledge and Human Development Authority [KHDA].”
Last year, KHDA approved the hike on condition the school applies it upon its relocation to its new campus in Nad Al Sheba. However, parents find the fee hike “unjustifiable,” in particular in the wake of the global financial crisis and argue they were not consulted on the matter as claimed.
According to GEMS, “GEMS is being forced to move the school from its location in Jumeirah by the end of the 2009 academic session. Faced with the option of closing the school or moving to a new location, GEMS has taken into consideration the best interests of the students and decided to build a new campus.”
Parents are more determined than ever to hold on to their belief a 90 per cent hike is “unacceptable,” with 1,000 parents filling out a survey…
01/23/2009 09:28 AM | By Siham Al Najami, Staff Reporter
Dubai: Parents of Dubai Modern High School have expressed their anger and frustration following a 90 per cent hike in tuition fees.
The GEMS managed school has seen a significant 90 per cent increase for over two years starting the academic year of 2009-10 and 2010-11, with each year witnessing a 45 per cent hike. The hike does not include other expenses such as transportation, food, uniform and books.
GEMS also increased the transportation charges last year up to 300 per cent, a move that did not go down well with the parents, in the wake of the global financial crisis.
“This is completely outrageous move by GEMS at this time of financial turmoil,” said one parent…
01/16/2009 01:11 PM | By Suzanne Fenton, Staff Reporter
Dubai: Around 3,200 people, among a workforce of more than a million, have lost jobs in Dubai during the last three months as the impact of the global financial crisis bites deeper into the UAE economy.
WS Atkins, a leading British engineering consultancy firm, have laid off 170 professionals, bringing the total number of redundancies in Dubai to well over 3,200.
“In Dubai there have been 170 redundancies, primarily from the building design team out of a total of around 3,000 in the region and 18,000 across the world. There have also been 40 redundancies from our Manila office among people working on Dubai projects,” a spokesperson for WS Atkins, said.
The spokesperson said the figure of 170 “isn’t material” in the context of a global workforce of 18,000.
Dubai Labour Supply Company (Dulsco) has laid off 800 workers in two batches, as supply orders continue to shrink due to weaker demand.
Mizin, a real estate development company under Tatweer have also allegedly made 50 people redundant and Universal Studios in Dubailand have also let go of as many as 50, sources told Gulf News.
Universal Studios was originally scheduled for completion in 2010, but it is now going to be complete in the first quarter of 2012 at the very earliest, a source said. Gulf News contacted both Tatweer and their spokespeople but received no comment…
01/11/2009 08:26 AM | By Saifur Rahman, Business Editor
Dubai: The UAE federal government is reviewing the issue of freehold property visas linked to foreigners’ ownership of properties in different emirates, a top Dubai Government official told the media on Saturday.
“The Advisory Council [of Dubai Government] has submitted a proposal to the Federal Government on the issue of property-linked visas to review,” Nasser Bin Hassan Al Shaikh, director-general of Dubai Government’s Department of Finance, said at a media briefing on the sidelines of the government’s 2009 budget announcement.
“Since a number of emirates have developed their own freehold visa arrangements, there are thoughts at the federal level to streamline the process and announce a unified guideline for all the emirates.”
Dubai Government created the Advisory Council in October last year, to assess the impact of the global financial crisis on Dubai’s economy, which has been hit due to an outflow of capital, estimated to be well above Dh200 billion.
He said there could be a new law guiding this soon, without giving any timeframe. When asked if he expects a positive resolution, he replied, “Yes, I hope so.”
The freehold visa issue has come to light in recent months when major master developers Nakheel and Emaar – who have been helping foreign buyers of freehold properties to get three-year renewable residence visas – had stopped facilitating them last year, prompting investor outcry.
Experts have welcomed the move, saying the country needed a unified regulation on this and a streamlined procedure to restore investor confidence.
“It is reassuring. It is positive news and will bring a lot of faith and confidence in the market,” Sudhir Kumar, managing director of Realtor’s International, a property consultancy.
“The matter of freehold visas has been an issue of major concern for real estate investors. This addresses the concern. With this, the government is showing its strength and resilience in the time of crisis.”…
Dubai: Oil demand could fall 45 per cent due to the global financial crisis, but investments should be increased to ensure supplies are maintained, a senior Saudi government official said in remarks published on Thursday.
Majid Al Munif, an adviser to Saudi Arabia’s oil minister, said the global financial crisis may cut oil demand by 23 per cent to 45 per cent, the pan-Arab daily Al Hayat reported, citing remarks made at a conference on Wednesday. World oil demand fell by 50,000 barrels per day in 2008, and is predicted to fall 450,000 bpd this year, the United States Energy Information Administration said in a report in December.
Cooling demand was led by a 1.2 million bpd contraction in top consumer the United States in 2008, and another 200,000 bpd drop is likely this year. The last time world petroleum demand fell was in 1983, part of four years of straight declines in oil consumption that began in 1980, the agency said.
The weak economy and lower oil demand has already caused US crude oil prices to sink more than $100 [Dh367] from a record $147 a barrel in July – a slump that has forced Opec to take 4.2 million bpd of oil off the market in an attempt to reduce bulging global crude inventories and stabilise oil prices…
12/26/2008 11:39 PM | By Cleofe Maceda, Staff Writer
As the economic downturn crimps demand for new apartments, goods and services in the UAE and other GCC countries, the workers who either create or sell them are losing their jobs by the hundreds.
Layoffs have come to the oil-rich Gulf. In recent weeks, companies in the UAE alone, such as Nakheel, Damac, Omniyat and Al Shafar General Contracting, announced more than 1,000 job losses.
While those who are still on the payroll are lucky, prospects of a rise in pay next year now look bleak.
Many companies in the GCC are now rationalising workers’ salaries as a cost-cutting solution. Recruitment plans have been revised, while salaries for newly hired and redundant staff are reportedly being slashed in lieu of layoffs.
Those mostly affected are workers in the investment, banking and real estate sectors.
Advantage Consulting, a management consulting firm, recently surveyed 500 organisations in the UAE, Bahrain, Kuwait, Oman, Qatar and Saudi Arabia, to assess the prevailing economic scenario in the GCC countries.
In its “Global Financial Crisis and GCC Salary Trends Report,” Advantage Consulting revealed that workers in the region will continue to get salary increases, but companies would probably no longer be as generous as they had been in the past few years.
The Dh15.5 billion Dubai Metro project is going strong and is on schedule, despite the ongoing global financial crisis, Abdul Majeed Al Khaja, the CEO of the Rail Agency, said adding that reports about lay-offs are incorrect.
Speaking on the sidelines of the conference which saw the announcement of the first batch of companies winning the Metro stations Naming Rights bid, the official stressed on the fact that the project was concrete and condensed and firmly on track.
“There have been no layoffs as far as the Metro project goes. We don’t have an abundance of employees as the RTA employs according to the needs. Everyone working on the project has got a role and a job to do and we don’t have a surplus of people.
“In fact, the total number of employees currently working in the Metro and the Tram project is just one-sixth compared to similar projects anywhere in the world,” Al Khaja said.
“This means, that if an employer has hired 600 people for a project as big as the Metro, we have only hired 100. So, the number of employees are less and efficiency is more,”
Thirty Trains
The official said that till now, they had received 30 trains out of the total 44 which will run on the Red Line from September next year.
“Right now, we are focusing on the improvement and construction of roads which will lead to the entrance ports of the many stations. This is being done with the help of the Roads Agency. The Public Transport Agency is also helping and the new lot of 1,616 buses, which they have ordered, will be arriving in phases soon and will act as ‘Feeder buses’ transporting passengers from the many stations. Every mode of public transport will be integrated,” Khaja said…SOURCE
Abu Dhabi: The Federal National Council (FNC) will ask the government to describe the precise effect of the global financial crisis on the banking sector in the UAE.
It will also address questions to the government on the issue of the fictitious investment portfolios. A number of other key topics will also be debated when the FNC convenes on Tuesday in the second round of the third ordinary session in the 14th Legislative chapter.
Frankfurt: The UAE is poised for two years of slow economic growth as its property sector is hit by the global financial crisis and banks rein in expansion, the central bank governor said.
Growth in gross domestic product (GDP) in the world’s fifth-largest oil exporter would fall to low-single-digit levels in 2009 and 2010, Sultan Bin Nasser Al Suwaidi said, as an economic boom spurred by six years of high oil prices comes to a close.
Still, a slump in the booming property sector would be limited as the country continues to adopt an expansionary fiscal policy, although it will take steps to ring-fence its banking system, Al Suwaidi said…
11/27/2008 12:02 AM | By Shakir Husain, Staff Reporter
Dubai: The impact of the global financial crisis is spreading to the Middle East auto industry as there has been a surge in the number of vehicle loan applications being rejected by banks.
A senior General Motors official told reporters in a conference call yesterday that the rate of rejections has risen from five per cent to more than 20 per cent.
The UAE and Qatar are among the markets that have seen a significant rise in these cases.
The situation is different in Saudi Arabia, where there are more cash buyers than customers purchasing cars through bank financing, General Motors Middle East operations president Mike Devereux said.
In the UAE, 70 per cent of the company’s cars are sold through bank financing.
“We used to have rejection rates throughout the Middle East of about five per cent.
“Now all manufacturers are seeing rejection rates in the range of 20 to 30 per cent,” he said.
Devereux said the company and its dealers are talking to banks in the region to ease credit for car purchases.
General Motors, which has approached the US government along with Ford and Chrysler for funds to overcome a credit freeze, sees the Middle East, Russia, China, Brazil and Turkey as future growth markets amid falling vehicle sales at home.
frustration following a 90 per cent hike in tuition fees.
Devereux said.
