DUBAI FESTIVAL CITY (Residential & Commercial Development at Dubai Creek)

[nathaniel]

not relevant

 

[chen]

Hi

Does anyone know of any news when Festival City residential developments might become freehold property.
I am really interested in buying here after several months of staying at the Albadia Hillside Village. Its got a very family feel to the place. Some of the good proxomity are:
- has 2 excellant school in the area
- air port (for those who travel oversea alot)
- shopping centre. (walking distance)
- gulf course
- a club house free to use for the residents.

I am really hooked. Anyone know when this area might become freehold?

 

[mabs]

You might also be interested in purchasing across the creek in Culture Village - thats another excellent project.

 

[pramod]

Hi all I think Dubai is a beautiful and colorful city. There celebrated so many festival in whole year.Please once visit Dubai and enjoy it.



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Web Design | Web Designing India
Internet Marketing Company | Online Marketing

 

[Refresher]

Dubai real estate -Biggest mistake yet to discover

To day I am going to write something about real estate blast in Gulf.

So many people are severely affected in real estate blast in this region. It was due to tricky practice employed by come marketing companies. Their modus operandi was like this…

1. One of the developer companies buys a plot from one of the master developer in the region. In some of the case only intimation to buy was held on the desk of the relevant authority.
2. On the basis of the permission/ intimation so sought, the company appoints architecture to design a building for certain specification.
3. Once the design is prepared, a rough model for the same design was created.
4. On the basis of the model a marketing company was approached and a price for the project is decided. Marketing company pays upfront 5% -10% of the project cost and acquires the right to market that property.
5. Marketing company on the basis of the rights so acquired, try to sell the property off plan.
a. As unit’s number and square feet specifications are not available, marketing company sells area in packages covering particular square feet in a package. Here, marketing company discloses the facts that real number of the units and exact square feet if that units shall be defined later on. So it was on the mutual understanding that particular package will cover units covering more or less same square feet area on final design of the building.
b. Investor required purchasing the packages and paying upfront payment of 5% to 10% of the package in that project.
c. Here, marketing company is allowed to retain some of the area as its profit.

To understand it better let us assume..
1. Project is that of a building for mixed use.
2. It covers 40 levels and 360 parking bays.
3. First 2 floors are declared as commercial space covering Coffee shop, mall, shopping area and other levels for office or residential.
4. Each level contains approx. 14000 square feet of construction totaling it to 560,000 square feet.
5. The project cost is estimated to be 1 billion.
6. The marketing company is required to pay 25% of the project as under ;
1. 5% (i.e. 50 million) on signing of the project.
2. 10% (i.e. 100 million) after 60 days
3. 10% (i.e. 100 Million) after 120 days
7. Marketing company pays 50 million out of his own pocket to acquire the rights of the project and works out the average price per square feet to be 2100.
8. This fixation of the price will conceptualize that selling of are 476,190 square feet will make the project to cover the project cost leaving 83,810 square feet as remaining portion as profit to the marketing company.
9. Marketing company sells these 83,810 square feet as cash packages while 476,190 square feet as payment packages.
10. Marketing company now, sells its cash packages at a discount of 70% i.e. 2100*30% = 630 per square feet to those who pays up front full amount of the packages.
11. While investor opting for payments packages are required to pay only 5% on the signing of the contract and remaining amount as per the developers plan.
12. Due to sell of cash packages investor are getting huge discount while marketing company can convert its profit into cash profit. This is because it receives 83,810*630 =52.80 million, which reduces its burden on cash balance at bank.
13. As far as Marketing company is concerned it has paid only 50 million to acquire the rights and in return will receive 52.80 Million from sell of Cash units and 50 million from the sell of payment packages. It results into a net cash flow of 52.50 million.
14. The remaining portion of the project payment is required to be paid to the developer as and when the payment is received from the payment plan investors so future cash flow is not affected at all.
15. Now the marketing company creates a virtual market for its investor who wants to sell its right in the form of the packages in the project (remember Project is only on the paper). Inventor can sell its package at premium say 1%.
16. If Payment investor can sell its package at 1% premium, its overall profit would be 20% on the amount so invested.

Until August 2008, so many investors were ready to purchase such book property and making rush to purchase it to sell the same at a profit. They were making huge profit specifically initial investor making huge profit then late Latiff. So everybody was rushing to the management, in fact , tried to influence the management of the marketing company to allot them early package. No body was ready or alert to look at the actual position of the project. Even most of the investor was ready to purchase any units irrespective of its content like, nos. of bedroom sea facing or road facing or floor. They just didn’t want to loose the opportunity to earn the money.

Marketing company made huge profit by selling its property very easily. Now the company has transferred the investors’ rights in the property with the developers and washed its hands off from the situation. Now cash packages investors are not required to pay any money to the developer but payment plan investors are directly required to pay to the developer as and when the installment due.

Here, from the view of the developer, the project is not feasible for want of finance. Initially Banks were ready to give full finance to the construction contract. But due to credit crises the banks have followed strict norms for such financing. The developer cannot start with 50 million when next financing is uncertain. Here so many investors are ready to loose their 5% of the project already paid but not willing to pay remaining amount to the developer. Developer
Due to uncertainty of the finance, are not willing to start the project.

The point is reached where;

1. Cash packages investors are not sure of the receipt of the area they invested.
2. Payment plan investors are ready to loose their investment.
3. Marketing company has washed their hands off after transferring the rights in the name of the investors.
4. Developer cannot start their project now.

Can you assume the amount so involved in this type of real estate boom?
The data I have illustrated here is just for one building and the price is the lowest one. This one building as illustrated here amounts to be of 1 billion.

Some of the marketing companies are not able to transfer their rights to the developer company. Such marketing companies are liable to pay to the developer to that extent. The rules and regulation of the Govt. in these regions are silent about the rights of the cash packages investors.

Whether they can demand refund of the amount so invested from the marketing company?
Whether Developer Company will to pay the refund, if such rights have been transferred to the developer company? In case of such transfer, the amount of the property is mentioned at 1 only as these were the cash units.
What if, developer decides to cancel the project and wants to refund the money? How much Cash plan Investor as well as payment plan investor shall recover?

 

[imported_nivin_adib]

Hi,

You are most welcome to register at The Real Estate Network (www.rn.ae) from the link below and list all your available services in our Classifieds section and Home Show section , which has many categories for all industries and we will assist you in all possible ways to achieve your target.

Our marketplace is still new that's why you can register for free membership for one year with unlimited listings.

If you need any help in listing your products or updating them , please contact me and i will do the listing and updating for free.

Register link: (UAE Real Estate Network)

Kind Regards,
Nivin Adib
Business Developer, UAE
www.rn.ae
[email protected]
[email protected]

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