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Ajman Real Estate Regulatory Agency (ARRA) has set July 1, 2009 as the deadline for property developers who have not completed the registration procedures with ARRA. It is not enough that a developer submits part of the required documents to ARRA to be a licensed real estate developer. The Amiri decree, as amended, was very clear in this regard, therefore, all property developers who have not completed all the procedures or failed to provide the documents needed for practicing the activity of real estate development in Ajman are advised to take immediate action otherwise, a fine of Dh100,000 per month will be applied against offenders.”

Omar Barguthi, DG, ARRA, said, “We have stated in early  press releases that May 1, 2009 is the dead line to receive registration applications from developers. As a result, large number of developers rushed into ARRA’s offices and proceeded with the registration process. However, some developers have failed to complete this action believing that they are fully registered with ARRA.

He further went on to explain, “Our target is not to impose fines or penalties against the developers but to see all developers are committed to property regulations and legislations in force in the emirate of Ajman. However, ARRA will take into account circumstances of developers who failed to register because of reasons beyond their control. There is still plenty of time for such developers to start from the point where they stopped and, complete the remainder of the registration procedures.”

He concluded, “Developers are required to realize the fact that ARRA is a regulatory body, set up to ensure transparency and credibility in the Ajman real estate market. Therefore, ARRA’s door is widely opened for investors and developers proposals or complains and, is ready to work with them to reach proper solutions.”

It is worth mentioning that ARRA had given non-registered developers time until May 1, 2009 and imposed a penalty of Dh100,000 per month for offenders.

Speaking at the British Business Group’s welcome dinner in the Raffles hotel, Mandelson stressed that, despite the UK’s strong history of doing business with Dubai, the community must not allow itself to become complacent.

“We are talking about big sums here,” Nasser Bin Hassan Al Shaikh, director-general of the Department of Finance, said in an interview. “The bad days are over” for the economy, which is stabilising and will gradually recover.

Economic growth in Dubai slumped after the worst financial crisis since the 1930s hurt its property, financial services and tourism industries. The emirate’s economy may contract between two per cent and four per cent this year, Standard & Poor’s Ratings Services said in a report on March 17.

The economy still expanded in the first quarter, Al Shaikh said. In February, Dubai sold $10 billion of five-year bonds to the UAE Central Bank, part of a $20 billion medium-term note programme, to help state-affiliated companies struggling to raise cash. That money will be used to meet payment shortfalls and repay loans, the government said on February 25.

“Most of the support will be offered to the property companies since they are the pillars of Dubai’s economy,” Al Shaikh said. The Department of Finance will announce an overall figure for funds paid out and approved for disbursal “very soon” but not the companies that have received help, he added.

HSBC Middle East, Midde East division of the leading international bank, is to re-enter the UAE mortgage market as it has confirmed easing of its proeprty finance rules. The bank had pull out of the property loan market in the UAE due to the liquidity crunch. It will now offer 75 per cent financing on completed villas, 70 per cent on completed apartments and 50 per cent on off-plan units. Previously its loan to value ratio had been lowered to 60 per cent and 50 per cent for villas and apartments, in a tightening of lending policy that was mirrored across the sector.

Abdulfattah Sharaf, CEO, Personal Financial Services, Middle East, said, “This move will provide more flexaibility and choice for our customers who are looking to own a home. HSBC continues to be a responsible lender and as such the offer is primarily targeted at end-users who have recently faced acute difficulties getting affordable mortgage finance”.

Under the terms of the new property finance deals applicants, nationals and expatriates in the UAE, must earn a minimum of Dh20,000 per month. The maximum loan term is 5 to 25 years or until the borrower reaches the age of 65, which ever occurs first and interest will start from 8.5 per cent, on a variable rate.

Adnan Youssef, CEO, Al Baraka Banking Group & Chairman, Union of Arab Banks, said, “We have already completed the necessary research for launching the Islamic bank and there are currently discussions between Sheikh Saleh Kamel, Chairman, Al Baraka Banking Group and investors to prepare for the public offering. Under the current economic climate, Sheikh Saleh Kamel did not withdraw or pull back but on the contrary, he is accelerating the finalization process. The Islamic banking industry needs this investment at such times”.

He said that in coming year, he expects that several banks will follow the Islamic banking model due to the growth achieved by these banks.

According to a new report by Jones Lang LaSalle, the world’s leading real estate investment and advisory firm, prices of real estate throughout the region are likely to continue to fall over the next 6-12 months even when there are signs of recovery in the Middle East and North Africa.

The report stated that during the first quarter of 2009, some progress has been made, with ‘green shoots of recovery’ beginning to emerge. However, none of the necessary conditions for recovery has been met. The key to recovery in the market will be improved sentiment to help boost confidence and reverse the credit default spiral that has been widely experienced over the past 6 months.

The report also noted that Dubai offers a range of options for opportunistic investors given the correction in pricing that is now taking place in the emirate. While yields are likely to increase in the medium term, the long-term outlook for Dubai remains positive, particularly as supply forecasts decline with more and more projects being either cancelled or put on hold.

Following a period of transition, the MENA region will remain well-positioned to emerge with a stronger, more regulated and sustainable pattern of real estate development and investment in the longer term. Not all investors/markets across MENA have been equally impacted by the withdrawal of liquidity and unprecedented opportunities now exist for potential investors to acquire good quality assets at competitive prices in many markets.

The credit crisis is bleeding Wayne’s pockets dry. The Indian expatriate, who started his public relations firm in Dubai about two years ago, has just laid off eight of his 12-man staff.

For months, Wayne (name changed on request) has not made any profit. His clients are defaulting on Dh1 million debt and he’s having difficulty closing new deals. To stay afloat, he sought help from banks, but to no avail.

Left without a choice, Wayne went to his friends and luckily, he managed to raise Dh70,000 from different donors this year. That does not include the money he took from his personal savings.

“Cash flow is really extremely tight. We are burning capital right now. We’ve had operational losses in the last couple of months. There’s no profit to be made because of the downturn. I tried to explore raising capital. We had a strong balance sheet, so we went to the bank early this year to borrow money. But we were told we’re not on their A-list of clients,” Wayne said.

“What are we going to do now? How do SMEs (small-and-medium scale enterprises) like us operate in that kind of scenario? Just imagine our plight. There are many small businesses who are suffering the same.”

“If you look around Dubai, SMEs are the worst hit because they don’t have overdraft facilities, big cash flows and revenue turnover,” he adds.

SMEs, which reportedly constitute 85 per cent of businesses in the UAE, are facing an acute shortage of financing. According to a recent study by Dun & Bradstreet, more than 50 per cent of SMEs in the UAE were having problems accessing credit last year.

The study found that banks in the UAE generally reject between 50 per cent and 70 per cent of the applications for credit to SMEs, largely due to high perceived risk of lending, as well as applicants’ failure to meet tight loan requirements and conditions.

SMEs refer to businesses with less than 100 employees and an approximate annual turnover of less than Dh100 million. There are about 85,000 SMEs registered with the Dubai Chamber of Commerce and Industry alone, as of 2008.

According to Barmak Besharaty, managing director at Almas Capital, there is obviously not enough room for manoeuvring for small businesses right now. “It’s a very tough situation to be in.

The construction, tourism, transportation or any other sector you talk about is feeling the effects of the crisis. It’s a general situation. You can’t blame the banks if they’re not aggressively going into the SME market. But I firmly believe that the UAE economy will definitely come back to its positive growth. Right now, we just kind of have to ride out the storm,” he adds.

Since there’s still so much uncertainty in the air, Sayed Firoz, who opened Grace Homes just before the recession hit, decided not to seek a loan from the bank. He admits that cash in his real estate brokerage firm is running dry, but he has implemented some contingency measures for him to sustain his business.

Instead of relying on banks to bail him out of trouble, Firoz managed to secure financial aid from his friends. Terminating the services of some of his six-man workforce isn’t an option either, so Firoz granted three of his six employees an unpaid vacation for six months.

His company has also slashed spending on advertisements to 40 per cent and is planning to move his office to a cheaper location. “We used to work eight to 10 hours. Now, we work 13 to 14 hours. We work very hard to make money for our business.” Firoz says his company started feeling the economic pinch late last year, when queries from tenants stopped.

“We used to have a lot of calls. Before the crisis, our clients would get loans from banks so they could rent a house. But banks don’t help them nowadays. However, we’re seeing a bit of an improvement in the market recently. Hopefully, the market will get better,” Firoz adds.

Mohammad bin Hamad Al Rumhy said he did not expect any effect from the collision on Omani oil exports because they are carried out through the port of Al Fahl in Muscat, far away from the strait, the Kuwait state news agency reported.