Bubbles in the sand

I'm forever blowing bubbles
Property bubbles in the sand
They grow so fast, obviously can't last
But why do I care, I still own the land
People keep on buying
I take all their cash
Oh, I'm forever blowing bubbles
And bubbles always crash

"Nowadays, ten months after the financial crisis came crashing in on the United Arab Emirates (UAE), nearly destroying its shiniest component, Dubai, hundreds of cranes and dredgers have yet to resume work. The Queen Elizabeth II, once the world’s smartest liner, due to become yet another posh Dubai hotel, is a sleeping quayside hulk. Nothing is happening on three of the most recently man-made islands shaped like palm trees off Dubai’s coast that were the latest flashy projects of Nakheel, the emirate’s shaky real-estate developer."


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An Emirati's view

The opinion of local Dubai people - the native Emiratis - on Dubai's rapid growth is scarce compared to expat opinion. Partly it's a language issue, many of them probably express themselves more in Arabic than in English. It may be cultural in that they don't like to speak out. But one Emirati shares their view here:

A lot of us Emiratis feel this downturn is exactly what we have needed. The chance to finally slow down and see things as they are without the stink of greed distorting everything. To finally concentrate our efforts where it counts such as improving our schools and colleges, completing the metro, building a stable civil society, and a sustainable economy.

Here are the negatives that I feel the boom brought:

Pollution: I remember when one could see the Trade Centre as a little dot on the horizon when travelling from AbuDhabi to Dubai. Something no longer possible with the haze we have now
Prostitution: Before the boom, people would travel to South East Asia to get their sin fix and bring back AIDS. The only difference being the prostitutes are here, and all the nefarious enablers that goes with it. A great shame
Greed: Not an expat only phenomenon. It's weird when the only things some members of the family would talk about is money, money, money. This flaunting of wealth was once considered unseemly by most Emiratis.

Here are the positives of the boom:

Coverage: Dubai in the international media made us see ourselves from the point of view of others, and what was written usually contradicted our own self image
Culture Change: The boom added a measure of optimism to the somewhat pessimistic culture that is part of our birthright. Emiratis are working in sectors of the economy that before would have been considered beneath them.
Greater Efficiency and transparency in government: Yes, these are halting steps forward. I remember the hair pulling experiences I have had with Dubai government 5 years ago and how much more modern it is.
Metro: Can't wait for it to go live

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Dubai: boom to bust?

"You don't have to be Einstein to work out that things are slowing down."

Not the words of an Embittered Expat™ retrenched from his tax-free job in one of Dubai's endless "Cities", nor a disgruntled journalist having a whinge over an overpriced pint of frothy haram-juice in the Radisson's Media Bar, but a quote from the CEO of one of the world's biggest construction companies operating in Dubai:

"There are undoubtedly issues in Dubai."

The latest word has it that Abu Dhabi has already bailed Dubai out. Dubai allegedly made the desperate (or cunning?) move of courting Saudi and Iranian funds, and fearing increased Iranian influence, Big Dhabi stepped in.

Despite that, the official line is that Dubai still has US$80 billion worth of debt, and no one knows exactly what needs refinancing when:

"The Dubai government has announced it has debts totalling $80bn, but has yet to release a detailed outline of its servicing requirements or the ability of its assets to generate cash flow.

"Borse Dubai is seeking to refinance a $3.8bn loan which matures this week, but officials say the government-owned group is finding it hard to secure the financing it needs from foreign banks, in spite of strong initial interest."

Meanwhile Dubai Holdings is restructuring and consolidating to cut costs, while local newspapers blame the international economy rather than any wobble in the sheikhly Vision™ :

“Dubai will be the fastest city to recover from the impact of the ongoing credit crunch, and the emirate’s real estate sector will once again witness a period of long term boom."

But when international newspapers are printing "lurid rumours" that the Palm Jumeira is sinking and only cockroaches come of out of the hotel taps, the confidence needed to restore Dubai's boom times may be a very long way away.


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Paris Hilton Towers

Just when we all thought the property bubble was bursting, here comes Paris Hilton to save the day:

Dubai: Paris Hilton could be the latest in a constellation of stars to light up Dubai's property sector, in a possible $2 million (Dh7.3 million) deal with Abu Dhabi-based developer, Hydra Properties.

Hilton, who was famous before she was even born, will add a dash of desert glam to Dubai's celebrity skyline.

What with Pamela Anderson, Paris Hilton, Jim Davidson and half the English football team, no one can deny that Dubai is a classy place. For the Z-list.


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Dubai property bubble bursting

"Welcome to Dubai Aromatic City: enjoy an exclusive lifestyle by the azure-brown waters of the Arabian Gulf, or take a dip in your villa's private cess-pool as you watch the rich rivers of effluent run down to the sea,"

Dubai is in the shit in more ways than one. Raw sewage flowing onto tourist beaches is foul enough, but fouler still would be a property sector meltdown:

Then, over the summer, Morgan Stanley issued a note which said that Dubai property prices would fall by 10% by 2010. Quite simply, there may not be enough demand for the wave of new property coming onto the market. To a society used to easy returns, this was a shock.

It's not actually a shock to anyone who bothered to do a few sums on a pocket calculator, as Matein Khalid did back in 2005. He predicted a glut by 2008, which a later report by EFG Hermes also indicated.

Moody's is also bearish: it believes that Dubai may have to borrow from Abu Dhabi or the federal UAE government (which is basically the same entity). The cost of insuring Dubai Holding's bonds have quadrupled since May.

Even Gulf News reports gloomy tidings from Colliers International and from Citi:

"In our view, there is legitimate concern the Dubai market is enduring a liquidity squeeze, witnessing macro-economic and credit deterioration in most of the countries from where its expat buyers hail, maturing from a regulatory perspective and seeing the beginnings of a shakeout of small developers," said an analyst in yesterday's Citi Research real estate report.

No wonder that 75% of Arabian Business readers wouldn't touch Gulf real estate with someone else's bargepole.


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The Actual World

Forget Saudi Arabia's mile-high architectural phallus, set to be twice the height of the Deathspire, Dubai has yet again trumped its neighbours:

Dubai to build The Actual World

Tues 1 Apr, 2008 1:23 AM GMT

DUBAI, 1 April (Reuters) - Faced with lukewarm celebrity interest in its The World artificial islands project, Dubai has decided to build The Actual World.

The multi-trillion dollar mega-project, believed to be largest in the known universe, will see a scale replica of the entire Earth rebuilt on the planet Mars.

The Red Planet was recently acquired by Dubai Holdings as part of its property portfolio diversification strategy.

Sheikh Jamal Abu Shagara, CEO of The Actual World, says a deal has already been signed with a Norwegian company to build a 250 million mile irrigation pipe to transfer water from the Arabian Gulf to Mars.

"We are also in talks with several companies to design the landmasses," Sheikh Jamal said.

"We plan to make The Actual World as exact a replica as possible, but Illegal Zionist Occupying Nations will be removed since they are blocked due to being inconsistent with the religious, cultural, policital and moral values of the United Arab Emirates," he said.

In an interesting twist The Actual World will be built with the climate of the Miocene era, when the United Arab Emirates was covered with rich jungle and mammoths, tigers and various dinosaurs roamed freely around.

The decision to backdate the climate is good news for the animals at Dubai Zoo.

After decades of overcrowding, the elderly lions and bears will be able to roam free in the hunting grounds and private menageries of luxury villas in The Actual World.

The announcement of the project has already excited interest in the subcontinent, where prospective labourers are putting up their wives and children as collateral against middlemen-loans for the $250,000 space flight and visa fees.

"This is considerable money compared to the $10,000 we pay to work in Sonapur," Bangladeshi labourer Shamsil told reporters.

"But on The Actual World we will be able to earn Dh500 a month minus food, accommodation, visa fees, fines, medical treatment and travel expenses, compared to the Dh400 we earn now."

© Reuters 2008. All Rights Reserved.


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Dubai sued for $1 billion

The announcement of the one billion dollar deal in 2005 between Capital Partners and the Dubai government was heralded as being a major move towards a free trade agreement with the US. A move which would have seen FDI - foreign direct investment - spiral upwards. But more than two years later Capital Partners is suing the Dubai government for one billion US dollars. And of course there's still no FTA:

"The developer, Capital Partners, had in July 2005 made what was planned to be one of the largest foreign investments in the region’s business hub, when it announced plans for River Walk, a mixed-use $1bn project in the busy internet business park located on prime land near the trunk of the reclaimed Palm Island.

But the deal soon turned sour amid recriminations over the legal title of the plot on which the US developer planned to build apartments, hotels and offices.

Basically, Tecom never owned the land they tried to sell, it "belonged to another government entity". Tecom claims that the contract was cancelled because Capital Partners "failed to meet the tight payment schedule".

However obviously CP couldn't legally make the next payment once they found out there was an issue with the land ownership, as they they have investors and are bound by US financial regulations.

The case is being run in the new Dubai International Arbitration Centre. But if that fails, there's always the US courts, since the Dubai government/royal family owns billions worth of assets there that could be seized if the judgement goes against them.

Of course what's extra ridiculous about all this is that every inch of sand and every government department is owned by Sheikh Mohammed and the Maktoum family, so this whole mess never needed to happen in the first place.

The blazing fronds

Palm is burning, Palm is burning
Fire Fire! Fire Fire!
Pour on water, pour on water

The concrete curtain

A few years ago an associate was commissioned to copywrite a brochure for a new real estate development. All the material was sent through, which details such as location, type of building, market segment, main features and so forth. The associate quickly spotted what seemed to be a mistake, and called the agency. "It says forty towers in the information. Did you mean four?"

"No, it's forty towers."

"On that one strip of land? Will they fit?"

"They'll have to fit."

Roll forward to 2007, and the huge lumbering concrete monstrosity that is Jumeirah Beach Residence has indeed been crammed into the strip of land between Dubai Marina and Jebel Ali power station. So little thought was given to proper planning that no room was left to put in adequate roads, let alone parking:

[Head of Roads Planning Section Hashim Mohammed] Al Hashmi revealed that a high quality public transport bus service would be introduced for the residents of Dubai Marina and Jumeirah Beach Residence. "The corridor in this area is too narrow and since the buildings have come up little can be done about it."

Drive around Jumeirah Beach Residence at any time of the day and it is shocking how dark and shadowy the narrow roads are, in a city usually so brilliantly sunlit as Dubai. The towers cut off the sea, the sky and the sunset like a huge concrete curtain. As National Geographic put it:

"Some critics are questioning the speed of change and a lack of planning: The towering apartment complexes stand like a wall, cutting off the rest of Dubai from its coast."

So who's going to live there? There may be millions more workers pouring into the UAE, but how many of them - even white collars - can afford to rent at JBR, let alone buy? Two years ago, analyst Matein Khalid gave these predictions:

"But in 2007-2008, a phenomenal 200,000 new units will hit the market. This means that we need about 800,000 new expats who are not labourers, housemaids, tailors, minimum wage bachelors or the Sharjah/Ajman commuters to fill this unit. In essence, a doubling of the professional high income salaried population of Dubai in the next two years. Realistic? Not at all."

And now a report from investment bank EFG Hermes is in the spotlight, with analysts noting "overbuilding on a heroic scale":

"The report suggested Dubai has a demand for 40,000 to 50,000 residential units per annum. But it failed to make the point observers have added since that only 30 per cent of this demand is in the luxury sector which comprises the majority of construction projects.

"This could leave the real level of annual demand for new high-end properties in Dubai at 15,000 units per annum, which was also suggested by figures forecast in a recent report on the population growth outlook until 2010 from the Dubai Chamber of Commerce and Industry."

Jumeirah Beach Residence: on course to be the world's darkest, emptiest, luxury skyscrapers.

Bur Dubai Island

Forget The Palm: the world's biggest artificial island hasn't even been built yet, but is already home to hundred of thousands of people. Introducing Bur Dubai Island, several crowded inner-city suburbs about to be encircled by the world's largest seawater moat. A glamourous residential prospect indeed.

Half a dozen major roads and myriad smaller roads will be severed by the Dubai Creek extension, not a particularly pleasant prospect for traffic despite promises of bridge building. Safa Park appears safe, going by Gulf News' map, but Jumeirah Beach Park might not be so lucky. The Co-op - so beloved of Emiratis doing their weekly shopping with all the family at 3am on a school night - also seems to be in the clear, despite persistent rumours of its imminent demolition.

The biggest feature of the Creek extension will be Business Bay, which will also hold a Guinness World Record for being the world's least bay-like bay. It is neither a body of water nor even part of the coastline. "Business Moat" would be a more appropriate name. Its aim is to be "similar in nature to Manhattan or Ginza, which are the business centres for cities like New York and Tokyo" and it will also feature "fascinating canals". Fascinating as in what, gondolas towed by giant hammour?

Looming over everything like a huge pointed lighthouse will be the beautiful Deathspire, set to get a Guinness World Record for being the world's tallest tower for the shortest amount of time.

And Dubai it will once again be unrecognisable from how it is today, just as it is currently unrecognisable from five years ago.

A $45 million Tiger

Forty-five million dollars - that's how much Dubai is rumoured to have spent to beat China for the world's first Tiger Woods Golf Course:

While specifics aren't known, Sports Illustrated cites rumors that Woods' end of the deal will be as much as $45 million (Sheikh Mohammed bin Rashid al Maktoum, ruler of Dubai outbid the interests of the world's other enlightened despots in China for the honor of building Woods' first course).

It's a solid bet that whatever the amount Woods pockets will be exponentially higher than the amount given to the hands who will provide the labor in sweltering heat to construct the course.

And another nice description of Dubai: "...a mixed steroid cocktail of Las Vegas, Singapore, and Bangkok."

The fall of the wall

The land northeast of the Burj Al Arab has long been the subject of trusty old expat rumour. Allegedly Mohammed Al Fayed owned it, and the government was reportedly having a devil of a time getting it back from the wily pharoah for development. But the fact that land in Dubai can be CPOd from any UAE national at any time for any reason rather files this legend into the unlikely folder.

Either way, Dubai's last decent stretch of public beach (the Russian beach in Jumeirah 1 is too overrun by perverts to qualify as usable without body shields) appeared to be under threat earlier this month. A huge great wooden barrier was put up, with construction of yet another yawnsome bloody beachfront development project set to begin.

But then suddenly this beachside Berlin Wall is to come down by order of Sheikh Mohammed, with construction work to cease:

"The good news came last night when Shaikh Mohammad instructed Dubai Municipality to stop the construction work immediately and remove the boundary wall erected to cordon off the beach for a construction project.

"The beach should be left open for the public, the municipality was told. A major part of the Jumeirah beach in Umm Suqeim near Burj Al Arab was blocked by the developer for construction work earlier this month."

What could be the reason for the sheikhly change of heart? Surely not the thousands of angry surfers, sunbathers and swimmers firing off emails and signing internet petitions. Last year's tepid tourism figures may be a likelier bet.

Blowing bubbles

"World First, Groundbreaking Real Estate Announcement"

There are three of these taking place within two days next week, all at the Burj Al Arab.

Clearly there is more optimism than originality in Dubai's real estate market.

Biggles Sweeps the Desert

Pilot Biggles touches down in the sandlands, ferrying a planeload of rich elderly American tourists on a "Great Trade Routes" luxury air holiday.

"Every single one of them looks like Blanche from The Golden Girls, with extra Botox," he reveals.

As the lowly airborne bus driver, Biggles has to amuse himself while the gilded grannies enjoy tea at the Burj, shopping at Harvey Nichols, and other traditional UAE cultural experiences.

It has been five years since Biggles was last in Dubai, and he doesn't recognise a thing. The thick forest of skyscrapers on Sheikh Zayed road was then a thin copse, with DIFC nothing but the twinkle in a sheikh's eye.

Mall of the Emirates was just a hoarding in a patch of desert reading "Souq Al Nakheel" Conversely, in a kind of restoring-equilibrium-to-the-universe, Oasis Mall is once again nothing but a hoarding. Half a decade ago, the only buildings to the far south of Dubai were the lakeside buildings at Internet and Media City. Now, an army of vast towerblocks looms over them, stretching down to the gargantuan Marina edifices and the grim shadowy slum of Jumeirah Beach Residence.

In another five years, Dubai will be an entirely different city again. Biggles will instead be landing at Jebel Ali airport, with his geriatric flock enjoying the attractions of Dubailand and the Deathspire. The Burj Al Arab and Mall of the Emirates will be nothing but ancient relics, lying disused and deserted in the dust.

Roads to success

Hooray! Streets in the sandlands are finally getting names. No more endless driving around obscure areas of Jumeirah 2 looking for 19c street, only to realise that you actually need 19c street in Umm Seqeim 3, and it leads off 2 and 4b street before the junction with 12.75q street, rather than 19a street, which is actually somewhere in Al Quoz.

Does this mean streets will finally get interesting, evocative names? Such as "Old Camel Street", "Red Desert Road", "Palm Oasis Avenue" and "Stinking Fish Lane, Karama"? Or will we be stuck with several thousand more "Sheikh Ibn bin Khalid bin Al Waleed bin Talal Al Ziyad al Zayed"-type roads, all mispelt in every possible configuration on every map and road sign, with the result that most people end up in Abu Dhabi before they finally find anywhere?

Some more suggestions:

1. Ramada "roundabout"
Either rebuild a roundabout there, or rename the damn junction Ramada Traffic-lights. There hasn't been a roundabout there for nigh on twenty years.

2. The Dragon Centre
Rename the building that used to be the Dragon Centre as the Dragon Centre again. Because that's all anyone ever calls it.

3. Defence Roundabout
A truly pointless name, which should be changed to Gridlock Interchange. It's not even a roundabout, it's two mini-roundabouts on a road bridge.

4. Al Quoz New Graveyard
It's not new, it's been there for years. When projects like "Downtown Dubai The Old Town" (or whatever the hell it's called) haven't even been built yet, it's more than spurious to tag this cemetery as new.

5. Jumeirah Village
Where is Jumeirah Village? you ask. Is it in the lovely leafy beachside suburb of Jumeirah? No. Is it near the lovely leafy beachside suburb of Jumeirah? No. It's right in the middle of the dusty bloody desert, next to the roaring traffic river of Emirates Road. And no, nor is it anything to do with Jumeirah International (oo - $15 million on a rebrand and we're still not using your new name, sob sob).

Racy lady

"So who exactly are all the people that are going to come and live in these places?"

Margery unwittingly asks the billion dollar question as we drive past yet another mega-luxury-property development. Every time the spinster schoolmarm visits Dubai for her annual oil sheikh hunt, the emirate is barely recognisable. But this year the billboards, construction, new towers, hotels and housing projects are overwhelming.

And we can't answer her, because no one really knows. Though who can forget Matein Khalid's worrying calculation?

One project Margery gets to see for the first time is Dubai Autodrome, where - wearily predictably - she is instantly surrounded by a vast convoy of racing drivers keen to demonstrate their fuel injection and expert handling.

As she fends them off onto the more seemly subject of Dubai's development, one of them makes a sad prediction:

"The way they are putting up hotels everywhere, this racetrack could well become just another themepark. And it will kill real motor sport in the emirate."

A super film

The following email recently arrived from an associate:

"Have you seen Superman? The plot is intriguing. Insane man tries to build offshore islands to sell as real estate "prime beachfront property" as he refers to it. His plans are then laid to waste by a man disguised as a journalist."

What a fascinating and original idea. This will be a must-see film for all sandlanders.

Banana Royale

This week's excuse for the UAE's perennially disrupted internet service is a rather novel and exciting one. It appears that world-famous secret agent James Bond is building a giant banana-shaped island off Fujairah:

"The shifting of the three cables will take about two days each to steer clear of the artificial, banana-shaped, island planned to be set up in the area", according to Sean Connery, the British engineer in charge.

What will 007's latest adventure be titled?

1. Sandraker
2. Seafloor Shaken, Internet Stirred
3. GoldenSouq
4. The World is Not Enough
5. From Rashidiya with Love
6. Dr Laah
7. Octoproxy
8. Dishdash Another Day
9. Diamonds Are On Special
10. The Camel Who Loved Me

Apocryphal Matthew

24 Therefore whosoever heareth these sayings of mine, and doeth them, I will liken him unto a wise man, which built his house upon a rock:

25 And the rain descended, and the floods came, and the winds blew, and beat upon that house; and it fell not: for it was founded upon a rock.

26 And every one that heareth these sayings of mine, and doeth them not, shall be likened unto a foolish man, which built his house upon the sand:

27 And the rain descended, and the floods came, and the winds blew, and beat upon that house; and it fell: and great was the fall of it.

28 And he that not even heareth these sayings of mine, and shutteth his ears to them, shall be likened unto a mad man, which built his house upon the sand and the rocks that he put in the middle of the ocean:

29 And the storms descended, and the wind blew, and the tides came and washed away the sand and rocks from under that house, and it fell: and not unexpected leastsoever was the fall of it

Clanking under cloak of night

Every night at midnight, the clanking begins. Not far from Cell Block G, strange, secretive heavy construction work is taking place on Nakheel's cracked, long-ago evacuated Garden View villas.

There may be a simple explanation why this noisy, heavy building work is done under cloak of darkness. Perhaps the machinery is used on other sites during the daytime.

But for labourers working in dangerously low visibility, and nearby inmates disturbed from their sleep night after night, it is a strange and sad affair.