Pakistan Property & Real Estate News

France looking forward to a stable real estate market in 2010

The French property market is bracing itself for a tough year ahead in 2010 but real estate experts do not expect a sudden recovery despite prices showing signs of stabilising.

Although the global economic downturn has made the last 18 months hard for the real estate industry, France has benefitted from not having an overpriced market and a system that is more cautious and less gung-ho in terms of lending.

It hasn’t seen the kind of boom and bust that has affected its neighbours in Spain and Britain.

But the economic crisis has dented confidence and recent research from the FNAIM, the professional organisation for estate agents which has 12,000 members, shows that in France people think it is not a good time to buy or sell despite average price declines of 5% in 2009 compared with the previous year making it very much a buyer’s market.

The Alps have been particularly badly hit because in this part of France demand meant houses have been over priced. ‘It has been extremely difficult.

Many buyers over stretched themselves and have been experiencing financial difficulties,’ said Andrew Hawkins of Chesterton Humberts International, chartered surveyors and estate agents.

He predicts things will pick up in the middle of the year.

Others agree. ‘In the French Alps prices have dropped by between 10% and 20%, depending on location, which is highly unusual because French property is much less prone to acute movements in price.

Lack of supply is now preventing prices from falling further and there are good deals to be found throughout the area,’ said Nigel Hindle of Property Vision France.

Whereas Aquitaine and Languedoc Roussillon have ridden out the recession well with house prices down just 0.3% and 0.2% respectively.

Hawkins predicts that well located houses in good repair, with pools, especially those along the coast on either side of Marseille will do well in 2010.

‘Marseille and its environs have become increasingly popular with investors especially with government investment in the city,’ he added.

Alistair Lockhart, Sales and Marketing Manager at The French Property Agents (FPA) is also confident about the region. ‘We feel that the Dordogne will make a comeback in 2010.

Prices have been artificially high for the last five years and they are now coming down making the area more accessible,’ he said.

In and around Marseille is his top tip for 2010. ‘Marseilles will see much regeneration work in the next few years, especially round the harbour area.

This is definitely an area for the buyer, particularly the Haussman apartments,’ he added.

Popular areas like Normandy and Brittany area also expected to do well as there is always demand from families looking for holiday homes.

According to Trevor Leggett, Owner of Leggett Immobilier, property that is well priced will sell in 2010.

He believes that the downturn has been good for the property market as prices were too inflated in many regions and that put off the mainstream buyers who are French not foreigners.

Few real estate investors are currently active in Abu Dhabi as they wait for 2010 completion dates

Property prices in Abu Dhabi remain stable but only a small number of investors are currently active in the market and many are waiting for completion dates for 2010 before committing, it is claimed.

According to Landmark Advisory, one of the leading real estate consultancy companies in the Middle East, October and November were two of the most active sales months of 2009 for the city with demand focused on close to completion developments such as Marina Square, Al Reef Villas, Sky Tower and Al Bandar.

However, prices have not measurably appreciated and buyers continue to look for distressed sales.

They are looking for completed properties and are waiting for hand over dates to be announced by developers.

‘Despite an increase in sales activity in the third quarter, demand levels since mid November have waned, leading to limited sales volumes in December,’ explained Jesse Downs, Director of Research and Advisory Services, at Landmark Advisory.

The company’s latest sales guide shows that transactional prices remained stable throughout the fourth quarter of 2009 and are not expected to increase until property is handed over in 2010.

‘Prices are only likely to increase for developments that are close to completion during 2010.

As these developments get closer to completion, transaction volumes are expected to increase, which could gradually lead to marginal price increases,’ said Downs.

Asking prices saw a marginal increase of 5 to 6% with the exception of Al Bandar which has seen average asking prices decrease by 9% since September 2009.

‘This indicates that Al Bandar owners are now adjusting their price expectations.

By reducing the price, Al Bandar is likely to start attracting more buyers that were until now focused on less expensive developments,’ explained Downs.

‘Our findings show that while buyers through the third quarter of 2009 were still primarily end-users, this demand segment is now waiting for clear signals of progress within nearly completed developments before engaging in any activity,’ she said.

‘Only a small number of investors are currently active in the market.

The postponement of delivery dates, most notably for Al Bandar and Marina Square may be further restricting demand,’ she concluded.

Source: [Property Wire News]

2010 set to be a year of consolidation for UAE property market

The coming year will be one of consolidation for the United Arab Emirates real estate sector with recovery and growth unlikely before 2011, it is claimed.

The key will be attracting back disillusioned investors, especially those from overseas, according to Mohammed Nimer, chief executive of MAG Group Property Development.

'With the onset of the financial crisis at the close of 2008, many of us in the property and real estate world expected 2009 to be one of the most challenging of modern times. It was certainly that - and then some more,’ he said in an interview.

‘Most striking has been the extent to which 2009 has seen major global corporations taken down in size or even toppled as well as smaller players squeezed out of the market,’ he added.

He described 2009 as a rollercoaster ride for virtually all of the real estate sector, not only in the Gulf but across the globe.

‘However, there is no doubt that the psychological effect of coming to terms with a changed world will no doubt eventually filter through with a positive impact on the property market,’ Nimer said.

‘I believe 2010 will be a year of further consolidation before buyers in significant numbers, particularly from abroad, will be tempted back into the market.

We also have to remember that we are currently still living with an oversupply in the market and that will have to work its way through,’ he added.

He expects that everyone in business will continue to experience challenging times, gradually easing throughout 2010.

‘The market, as it consolidates, will benefit from more traditional and sustained business approaches as opposed to the speculative models that took over in 2007 and 2008 and met their inevitable end in 2009,’ he explained.

‘As confidence is regained, the underlying foundations of the excellent business economics of the UAE remain in place for a return to a prosperous and sustainable future by the latter end of 2010 and forward into 2011,’ Nimer added.

Indeed, last week the latest global property report from AT Kearney showed that the UAE could be one of the first real estate markets to benefit from falling prices.

‘Low real estate prices could put the UAE back on track for attracting foreign investors, who are already interested in the region for its other advantages,’ said Dirk Buchta, managing director at AT Kearney Middle East.

US commercial property values now at lowest for seven years, latest figures show

Commercial property values in the US declined in October to the lowest level in more than seven years as unemployment reduced demand for apartments, offices and retail space.

The Moody’s/REAL Commercial Property Price indices fell 1.5 % in October from September to the lowest since August 2002.

Prices were down 36% from a year earlier and are now 44% below the peak in October 2007, Moody’s Investors Service said.

The gloomy news follows predictions from commercial property brokers, including Jones Lang LaSalle and Grubb & Ellis, that office vacancies may approach 20% next year as employers hold off hiring.

‘The number one issue facing commercial real estate right now is the value declines that we’ve seen since prices peaked,’ Matthew Anderson, a partner at Foresight Analytics in Oakland, California.

Also worrying is that an estimated $1.4 trillion of commercial real estate debt is scheduled to mature over the next five years and Foresight estimates that 53% of it is underwater, meaning the value of the property is less than the mortgage.

Commercial property values may decline by a total of 50% from the peak to the bottom, Anderson added. ‘This is the worst that we’ve seen since World War II,’ he commented.

He also predicted that delinquencies for commercial real estate mortgages held by banks may increase by 5.6% in the fourth quarter of 2009 and reach 8% next year.

The delinquency rate for US commercial mortgage-backed securities rose to 4.47% as of the end of November, Moody’s Investors Service said.

That’s almost six times the rate of 0.75% a year ago.

And last week the Mortgage Bankers Association reported that delinquency rates continued to rise in the third quarter on properties held by all but one of the five major commercial real estate investor groups tracked by the MBA. Defaults were the highest among holders of bank, thrift and CMBS loans.

Rs 7.73bn for DHA uplift projects

Karachi: The annual meeting of the Defence Housing Authority (DHA) governing body on Sunday approved a budget of Rs 7.73 billion for various development projects of the authority for the fiscal year 2009-2010.

The meeting also reviewed the ongoing development projects and other policy matters of the DHA. The body’s chairman Defence Secretary Lt Gen (retd) Syed Athar Ali presided over the meeting.

It is pertinent to mention that in the fiscal year 2008-09, Rs 9 billion had been earmarked for the DHA’s development projects.

DHA Administrator Brig Khalid Tirmizi presented the progress report and reiterated that the authority was poised to move forward with a vision and a well-defined strategy to ensure it remains a versatile organisation ready to perform.

The governing body chairman urged the DHA to approach special projects with a positive approach and to move forward on a fast track basis to maintain the credibility of the organization.

He ordered completion of the Gizri flyover including installation of sound barriers and road lights and the refurbishment of the flyover’s surrounding roads at the earliest. The governing body expressed satisfaction over the efficacy and working of newly laid drains in the DHA areas that swiftly drained rainwater during last monsoon rains.

The governing body was informed that the infrastructure development at the upcoming DHA City on Super Highway would commence from Dec 2010 after undertaking town planning on modern lines.

CDA auctions two commercial plots for Rs 2.32bn

Rawalpindi: RAWALPINDI: Capital Development Authority (CDA) on Monday auctioned its two commercial plots at Rs 2,318.93 million during a ceremony at its headquarters.

One plot measuring 11,750 square yards and located in F-10 was sold for Rs 1351.25 million, while the other measuring 4,608 square yards and located in Blue Area was auctioned for Rs 967.68 million.

Federal Government Employees Benevolent Fund secured the Blue Area plot by offering the bid of Rs 210,000 per square yard, while the F-10 Margalla Tower plot was secured by another bidder for Rs 115, 000 per square yard.

The auction committee consisted of the CDA Finance, Estate and Engineering members. The deputy financial advisor was the committee’s secretary. The bids will be submitted to the CDA board for final approval.

RDA launches renovation work

Rawalpindi: The Rawalpindi Development Authority (RDA) has launched renovation work from Committee Chowk to Sherpao Colony.

RDA (Land and Estate Management) Director Shuja Ali told ‘The News’ that the work on remodelling and renovation of area from Committee Chowk to Sherpao Colony has been launched, which will cost around Rs48.8 million. Under the projects, new tiles will be laid at roads, which will help easy and quick repairs in case a section suffers damage in rains or during movement of traffic.

RDA has started installing solar streetlights in Sherpao Colony. MNA Hanif Abbasi, he said is taking keen interest in the project and visits the site every day to review the progress of work on the project.

Besides this, Shuja Ali said the RDA has planned to make Sherpao Colony a commercial area and new shopping centres would be opened in the area to boost the commercial activities in the city.

Commenting on the issue of vacation of occupied land from encroachment mafia, he said that the RDA on Thursday launched operation against encroachment mafia in Sherpao Colony and during the operation RDA staffers removed more than eight encroachers including kiosk holders, shop owners who had illegally grabbed the government land for many years.

He said with the help of police RDA will soon clear up encroachers from Saidpur Road and other areas as well. He said that the evacuated land will be auctioned by RDA to generate revenue.

He also pointed out that some people after occupying government land many years ago sold it to other parties and whenever RDA launches operation against these new owners or issues notices to them, they come with legal documents of their ownership. “We are trying to trace out the real culprits, who sold RDA land to these people and we will catch them and punish them in accordance with law,” he added.

Source: [The News]

Construction of SFC-IV in the offing

Karachi: KARACHI: Karachi District Coordination Officer (DCO) Javed Hanif Khan has said arrangements for alternate routes for traffic flow should be identified before commencing work on Signal-free Corridor (SFC)-IV to avoid any mishaps on Shahrah-e-Faisal, one of the major arteries of the city.

The DCO reviewed these measures during a meeting he convened on Wednesday, following a detailed visit of Shahrah-e-Faisal for overseeing the pros and cons of SFC-IV before starting construction. All stakeholders and city’s administrative agencies assured the DCO for cooperation to facilitate the CDGK for timely and swift construction of SFC-IV.

The DCO urged the CCTP to diligently finalise alternate routes and diversions for the heavy traffic flow at Shahrah-e Faisal to avoid unwanted gridlocks and inconvenience to the citizens. The meeting decided that traffic signals on the Tipu Sultan Road would be closed for this purpose.

Multan Road Project to start next year

LAHORE - After the project of Lahore Ring Road (LRR), another brainchild of Sharif brothers ‘Multan Road Project’ pending since 1988, is likely to start in January 2010. The project will cost Rs 7.4 billion.

The PML-N government has handed over the Multan Road Project to LRR (Project Management Unit) to re-launch the much-delayed construction of main artery of the City.

Construction cost of the Multan Road Project has increased 600 per cent after expenditure shot up from Rs 1.5 billion to Rs 7.4 billion due to its delay over the last 12 years. Multan Road was initially planned to be widened to six-lane dual carriageway with inclusion of underpasses at Samanabad Chowk, Yateem Khana Chowk and an overhead bridge at Scheme Mor. However, the NESPAK called the widening of the road as unviable and opposed the construction of underpasses and overhead bridge.

Under the technical intricacies, the government has dropped the extension plan and excluded the underpasses and overhead bridge from the project. Now, Multan Road will be remodelled instead of being widened. The City District Government Lahore (CDGL) with the help of the National Logistic Cell (NLC) has already carried out patch-up work of the road at the cost of Rs 22.54 million in 2008.

The Environment Protection Department (EPD) officials told The Nation that remodeling of Multan Road would ease the traffic pressure from other roads, especially Canal Bank Road, Wahdat Road and subsequently Ferozpur Road, but if the road would be reconstructed without underpasses or flyovers it would make the situation worse.

They maintain that Multan road is important for the local traffic as it connects one corner of the City (Raiwind) with the other (Azadi Chowk). It also provides a direct link to the motorway via Bund Road. In a routine day, it takes almost one and a half hours to reach Chauburgi from Thokar, while traffic mess doubles this time.

Under the project, 28 single arm poles, 349 double arm poles, 726 sodium lights and 15 transformers would be installed on both sides of the road while 4 leg-type traffic signals and 07 t-type traffic signals would be installed on it besides the improvements of crossings. Service road and drain will also be constructed to discourage encroachments and to ensure early drainage of rainwater.

The City District Government (CDG) officials said that the provincial government had approved fund Rs 1.5 billion for the project but it could not be given a final shape as Wasa’s feasibility report was poor. “Wasa officials had submitted the report to the District Coordination Officer (DCO) but the report had been sent back,” they added. The then DCO, Muhammad Ijaz had directed the Wasa officials to remove flaws in the plan. TEPA officials say that the road constructed in 1988 has outlived its life.

Sources said that when the CDG sent the project to Environmental Protection Department (EPD) to get Environmental Impact Assessment (EIA), the EPD raised several objections over the remodelling and reconstruction of these two projects and asked the CDG to reply. It is pertinent to mention here that the EPD has also sent two reminders to the Department to get reply to the objections, but failed to get response from the CDG.

The EPD sources say that the Works and Services Department did not include any underpass or flyover in these projects, which means after remodelling and reconstruction both the roads would continue to face traffic congestion and jams at key points such as Chauburgi, Samanabad Mor, Yateem Khana Chowk, Scheme Mor and Garhi Shahu Chowk.

Cairo real estate market poised for significant growth in 2010, according to new report

Buoyed by a growing local economy and its strategic location as a gateway to Africa and Middle East market, Cairo is becoming a pre-eminent real estate market and set to grow in 2010, it is claimed. The city is emerging on the radar screen of an increasing number of regional and global corporates according to a new report from international property consultants Jones Lang LaSalle.

Despite global economic turmoil, the underlying fundamentals of the Cairo real estate market have remained largely intact during 2009, analysts conclude in the Cairo City Profile report.

‘Cairo is characterised by a combination of mature and emerging market conditions. The city is growing rapidly from its heavily constrained historic core to a range of new areas on the urban periphery,’ the report says. ‘Development over the past few years has been focussed on the luxury residential market but while this sector is now approaching saturation, there remain huge opportunities for the increasing income market,’ it continues.

‘Driven by end user demand rather than speculative investment, the Cairo real estate market is cash driven and has experienced much lower levels of debt than in many of the other cities in the region,’ it adds. ‘It is our opinion that demand for real estate in Cairo will continue to grow in 2010 providing opportunities for investors, developers and occupiers across the office, residential, retail and hotel sectors,’ the report concludes.

It predicts that there will be growth in the residential sector with an important shift towards affordable housing as Cairo is a demand-driven market where affordable housing is in short supply.

In the commercial sector the report points out that city’s fragmented office market provides significant opportunities for building international quality office buildings and there is demand from international occupiers. The hospitality and tourism sectors, driven by new investment, are expected to record an important increase in both international and regional tourists.

‘Cairo remains a market with more demand than supply for new, high quality retail development and is significantly under-served as compared with competing markets for modern, professionally managed retail offerings,’ the report says.

Gulf developers looking to North Africa for investment

Middle East based developers are increasingly looking to North Africa where demand for real estate is expected to grow both from nationals and foreign investors.

Morocco, Egypt and Tunisia are regarded as some of the best markets for investment.

‘I definitely see expansion continuing in this area.

But it will be rationalised and focused as opposed to let's go out there as fast as we can,’ said Jalil Mekouar, head of Middle East and Africa at Jones Lang LaSalle Hotels.

Developers such as Qatar's Barwa Real Estate, which recently announced a $9 billion Cairo project, are targeting the region to help offset troubles closer to home and to tap a region that lacks an appropriate infrastructure to serve a large, rapidly growing population.

Whereas the Gulf region, with Dubai in particular, suffering from a property crash with prices down up to 50%, places like Egypt have seen less of a downturn.

Residential property prices in Cairo have fallen 15% in the last year and are expected to stabilise according to analysts at EFG Hermes.

‘North Africa is a great opportunity for investors.

In Egypt you have three of four big developers and a population of 80 million. In the UAE, more than a dozen large companies are addressing a population that is barely five million,’ said Saud Masud, UBS real estate head of research.

Egypt has also introduced a raft of economic reforms over the last few years, such as slashing taxes and seeking to streamline its customs to boost investment, while Morocco, another key target for Gulf firms, is also taking steps to help investors.

‘In Morocco, there is still a lack of transparency in many areas such as legal, financing and administrative.

But local authorities are aware of these problems and there are actions being put in place to address them,’ said Karim Beqqali, managing director at CB Richard Ellis for Morocco.

RAK Properties, the developer that built Ras Al Khaimah’s first man-made islands is looking at potential projects in Algeria, Morocco and Sudan as they are countries where population growth is driving demand.

‘There are countries in the Arab world which desperately need affordable housing and we are now conducting feasibility studies,’ said Mohammed Al Qathi.

Rawalpindi awaits govt funding for major schemes

RAWALPINDI: Despite announcement in the annual development programme (ADP) six months ago, the provincial government has so far failed to release funds valuing millions of rupees to the garrison city’s civic agencies and departments concerned for many development schemes.

Of these schemes, one is construction of 54 family rooms for Adiala Jail’s married inmates at the cost of Rs 114.525 million.

Sources have said 87 acres land had been acquired by the prison administration for the rooms but the provincial government had yet not released even a single penny for the purpose.

They said the ADP had the Rs 86 million allocations for three major road projects in the city but no funding could be given to Rawalpindi Development Authority (RDA) for the last six months.

The sources said other major projects for which relevant agencies had been awaiting funding included the Rs 50 million construction of Nullah Leh Expressway and Flood Control Channel, the Rs 30 million for carrying out feasibility study of Access control Rawalpindi Ring Road II (City Boulevard) development and the Rs 6 million for the feasibility of the development of Link Road from Airport Road to Lahore High Court Rawalpindi Bench on GT Road.

They also said the provincial government allocated Rs 343.569 million for three major water supply and sewerage projects but had released no money to Water and Sanitation Agency (WASA).

According to them, the ADP has the Rs 198 million allocations for supplying drinking water to Sadiqabad, Muslim Town, Khurram Colony and adjoining areas; Rs 70 million for construction of sewerage network in the city, and Rs 75.569 million for replacement of outlived waterlines under the Islamabad Highway and other rusted, leaking waterlines from Rawal Dam filtration plant to the city along with provision of diesel generators and provision of independent 11 KVA Feeder at Rawal Dam’s filtration plant, but the respective civic agencies had been awaiting release of money since July.

The sources cited financial constraints as the reason behind the government’s failure to provide Rawalpindi’s civic bodies with the allocated money. They said a major chunk of the government money (around Rs 10 billion) was spent on food subsidy during the current fiscal’s first six months.

They said the Sasti Roti Scheme had landed the government in great financial trouble, as it was launched without proper planning.

LDA kicks off drive to demolish illegal high-rises

Lahore: THE much-awaited demolition drive against illegally constructed high-rises in the provincial metropolis finally kicked off on Sunday as the Lahore Development Authority (LDA) started razing three out of 400 illegal plazas.

The issue of construction of high-rises in Lahore came into lime light after the Supreme Court of Pakistan (SCP) took suo moto notice and barred the construction of high-rises in May 2007. Later, the apex court constituted a commission for the inspection of all buildings and finally on December 4, 2009, the court vacated the stay order, unleashing the LDA to start demolition of these structures.

The massive demolition drive against illegal high-rises started on the directions of LDA Director General Omar Rasool who along with other senior officials of LDA monitored the operation. Heavy contingents of police accompanied LDA teams.

On Sunday morning, LDA teams equipped with heavy machinery reached the four storey Al Rehman Medical Complex on Ferozpur Road in Naseerabad area and started its demolition.

They said the medical complex was constructed on the land of Kachi Abadi and such land could not be used for commercial purposes under rules. Officials said owners of this medical complex did not get the building map of medical complex approved from the LDA.

The second site where LDA teams started demolition was Inam Complex on Ferozpur Road in Garden Town area. The teams started demolition of top three floors of this high-rise because they were constructed without approval. LDA workers went on the top of this plaza and started razing illegal floors.

The third site was Rabi Centre on Main Boulevard, Gulberg, LDA officials said two extra floors were constructed in the plaza without approval while shops were also constructed in the car parking area. When the LDA teams reached Rabi Centre, they faced resistance by local traders but police managed to control the situation after which LDA officials and labourers started razing illegally constructed floors and shops.

LDA Chief Town Planner Muhammad Wasim talking to The News said that the authority had prepared a complete and comprehensive demolition plan. He said the authority will engage private companies to achieve the target of demolishing all illegally constructed plazas in the city. The commission had identified around 400 such sites and the LDA had to demolish some of them completely and remaining partially, he said.

After coming into power, Punjab Chief Minister Mian Shahbaz Sharif had also constituted a committee to carry out a survey of illegally constructed buildings in the city. During the survey, the City District Government Lahore and the Board of Revenue also jointly planned to launch demolition plans to completely bulldoze around 169 commercial plazas and buildings constructed in sheer violation of building by-laws in five towns.

LDA officials said the commission inspected 170 out of 645 buildings during its survey and found 51 buildings constructed in violation of LDA by-laws. The commission suggested complete demolition of 25 buildings. Later, the LDA also planned to raze 45 high-rises and partial demolition of about 150 other plazas constructed in violation of building by-laws under the recommendations of the commission in 2008. Officials said the plan could not make any headway due to the judicial crisis.

Sources in the LDA said according to the list provided to the SCP by the LDA, some 45 illegal high rising buildings including 15 at Model Town Link Road, five at Gulberg, six at PIA Housing Society, two at Johar Town, four at Shah Alam, three at Peco Road and two in Allama Iqbal Town would be demolished completely. Other illegal high-rises include 75 at Gulshan-i-Ravi Scheme, 30 at Johar Town, 12 in PIA Housing Society, three each at Samag Berg, Garden Town, Samanabad and one each in Faisal Town, New Garden Town and LDA controlled area, sources said.

The LDA’s chief town planner said the authority was committed to demolishing these buildings and had kicked off a massive drive on Sunday by starting demolition of three of such buildings. He said the authority would outsource demolition process, which will not stop until razing of all illegally constructed structures in the provincial capital.

Swiss bank sued over millions of dollars of losses to thousands of property investors

A Swiss bank is being sued for $24 billion by property owners who claim it schemed to defraud investors in several development resorts in the US including the bankrupted Yellowstone Club. In a lawsuit filed on Sunday in the federal court in Idaho, the plaintiffs, on behalf of 3,000 investors, said banking giant Credit Suisse colluded with real estate firm and co-defendant Cushman & Wakefield in a ‘loan to own’ scheme to artificially inflate the value of resort projects.

According to papers lodged in court the scheme was designed to burden resorts and purchasers of property in resorts with too much debt, while winning Credit Suisse ‘enormous fees’ and letting the bank foreclose on or take control of resorts at well below market value. ‘The scheme has been a financial heist for Credit Suisse with no risk,’ according to 81 pages of detailed allegations that include the claim that the scheme began in 2004 when Credit Suisse encouraged developers to take cash out of their resort projects in the form of loans or ‘profit dividend’ based on projected future growth.

That led developers to ‘mortgage their development projects to the hilt,’ leaving resorts with ‘excessive and unsustainable debt,’ the complaint says. The bank collected fees and sold the loans to investors, the lawsuit adds. When the real estate market collapsed the resorts went into default or sought bankruptcy protection, devastating property owners who were promised pools, golf courses, shops, hotels and other luxury amenities. Credit Suisse ‘has received huge fees up-front and consummated ownership or control over all but one high-end resort,’ the complaint continues. The lawsuit alleges losses relating to Yellowstone, a private club for millionaires in Montana, as well as to Lake Las Vegas in Nevada, the Tamarack ski resort in Idaho and Ginn Sur Mer on Grand Bahama Island.

The plaintiffs are L.J. Gibson and Beau Blixseth. Blixseth, the son of Timothy Blixseth, a timber baron and onetime billionaire who developed Yellowstone, says he lost money and the use of his property rights in Yellowstone. In the lawsuit they are seeking class-action status for purchasers of property and homes in the developments. It seeks $8 billion of actual damages and $16 billion of punitive damages.

When contacted Credit Suisse head quarters in Zurich declined to comment. Cushman & Wakefield also refused to talk about the legal case.

CDA plans to develop mini cities in Zone IV

Islamabad: The Capital Development Authority (CDA) would seek help of the federal government to develop mini cities in Zone IV that are expected to help cope with various challenges, especially related to increasing population in the capital city.

“Six mini cities will be developed including media, education, Information Technology, business, medical and sports in Zone IV. The main purpose of such an effort is to turn major activities towards this area from urban residential sectors where civic problems are increasing day by day,” sources in CDA told ‘The News’ here Friday.

Non-conforming use of residential units in developed residential sectors have led to various civic and security problems for the concerned authorities, who want to resolve this issue once and for all.

A CDA official said it is simply not practicable to ask private schools to purchase lands and construct school buildings away from the residential sectors, because most of these schools would not be able to do so.

A recent survey conducted by CDA identified some 800 residential units being used for commercial purposes in violation of rules, including 255 schools, 27 government offices, 207 private firms, 18 embassies, four restaurants and 87 guesthouses.

The residents of various residential sectors have already raised their concern over the presence of offices of local and international agencies in their areas. They said it is necessary to shift these offices to other places keeping in view the occurrence of terrorist attacks in the capital city.

The draft proposals in the revised master plan of Zone IV are yet to be approved by the prime minister.

According to the data provided to this scribe, the land acquisition was started in 1962 but CDA could not acquire the whole area because the Lahore High Court had given a verdict that CDA could not regulate the private owners.

Member Planning CDA Syed Tanvir Bukhari in his recent chat with this scribe showed confidence that the revised master plan of Zone IV would greatly help resolve various problems. “The proposals have been prepared after a thorough review of the ongoing problems and future needs due to increasing population, and we hope that after its final approval by the prime minister, effective measures will be taken to implement them at the earliest,” he said.

Prince Charles letter will feature in High Court trial over UK’s most expensive property development

The Prince of Wales and the Mayor of London are named in a high court case launched by UK developers Nick and Christian Candy against Qatari Diar Real Estate company over the controversial Chelsea Barracks project.

The brother’s development company, CPC Group, has lodged a claim for breach of contract against the Middle East company after it withdrew its plans for the £3 billion residential scheme following criticism from Prince Charles and others.

Qatari Diar, a property company backed by the emirate of Qatar, and a long time business partner of the UK developers dropped the planning application in June this year, four months after Prince Charles wrote a letter to Sheikh Hamad bin Jassim bin Jabr Al Thani, chairman of Qatari Diar and prime minister and foreign minister of Qatar.

In it he described it as too dense and too modern for such an historic site.

Now the first arguments have been launched at a pre-trial hearing in the High Court in London. Lord Grabiner QC, representing the Candy brothers, said the court case could be avoided if Qatari Diar honoured a clause in the contract and paid out £68.5 million in compensation.

‘Whatever happened at Qatari Diar, they know what impact that letter had on their behavior and what they did,’ he told the court. He added that he did not expect to call Prince Charles or Boris Johnson, London's mayor, as witnesses. But it might be necessary to investigate what happened at Qatari Diar following the prince's letter.

Under the alleged terms of the contract, Lord Grabiner said, the application could be withdrawn only under certain conditions, including a planning refusal by Westminster city council or an indication from Mr Johnson that he would refuse the application.

Lord Grabiner pointed out that, when the application was withdrawn, Westminster city council had not met to decide on it, nor had the mayor called it in.

The issue was whether the mayor had indicated that he intended to exercise his powers. ‘We say that this never happened. This will be the key point in the trial,’ he said.

Qatari Diar will argue that it was entitled to withdraw the planning application because the Mayor for London was going to direct Westminster Council to refuse the scheme.

New real estate law to protect property investors being drawn up in aftermath of debt crisis

The Real Estate Regulatory Agency in Dubai is working on a new law that will give property investors new rights.

Although it refused to reveal the details at this stage, a spokesman confirmed that it will be ‘comprehensive’ and seek to protect investors.

‘Along with the Dubai Land Department we are studying a new law to protect the rights of real estate investors.

Our ultimate goal is ensure justice and set up proper rules and regulations to regulate the relationship between developers and investors,’ the spokesman said.

He added that a draft of the law will be ready to send to the Executive Office to get the government's approval by the first quarter of 2010.

It is expected that the new law will be seen as a chance for the Emirate to try to win back confidence among investors following the revelation that state owned Dubai World, owners of development company Nakheel, has massive debts of $59 billion and it is currently trying to restructure some $26 million of debt.

More transparency is likely to be welcomed across the real estate industry.

According to Jason Manolopoulos, managing partner of boutique investment firm Dromeus Capital, the current crisis has raised concerns over corporate governance and transparency to a much higher level.

‘Investors should have been wary about the fundamentals of Nakheel. Everyone was fully aware of the overcapacity on Dubai real estate.

I think 2009 will be remembered as the year when the idea that an implicit guarantee should be priced only slightly wider than an explicit guarantee was relegated to history,’ he explained.

‘Investors will have to differentiate, and the selling of companies on the basis of their connections and strategic importance will no longer work,’ he added.

Dubai’s debt bombshell will further hit confidence in the emirate's expatriate community and could lead to a wave of redundancies at government-owned companies forced to restructure.

‘It's clear there will be job cuts but it's too early to know the extent of it,’ Raj Madha, an analyst at regional investment bank EFG-Hermes said.

Worlds rich plan to invest more in property, survey shows

The richer you are the more likely you are to invest in property which is now regarded as better opportunity for long term returns that stocks and bonds, according to a new survey.

Twice as many people plan to increase their investment in residential and commercial property as intend to reduce, the global survey from Barclays shows.

It is those with more than $800,000 to invest that are leading the property investment race and the extent of their plans for real estate has amazed researchers.

‘I was surprised how big a share of their wealth property represents,’ said Mike Dicks, head of research at Barclays Wealth.

With the global recession having pushed down real estate prices in every region except parts of Asia, it is a belief that properties are now undervalued that was one of the main reasons for increasing investment.

Real estate investment among wealthy individuals is set to rise to 30% of the average portfolio for the next few years from 28% at present, according to the survey.

That excludes properties used as a principal residence.

It also found that an emotional attachment to bricks and mortar can mean that rich investors are often unwilling to sell real estate at short notice and may be less rigorous in measuring its performance as an asset.

Investors from Canada and the Gulf region were the most likely to increase their property allocations, with an average increase of 4% being put into real estate.

Spain was the only country in the survey where more individuals said they would reduce the proportion of real estate investment.

About 60% of rich individuals in that country have more than half their assets in property.

Almost 30% of British and Indian investors have more than half their wealth tied up in real estate while about 40% of the total respondents worth more than £30 million have a similar allocation, the survey shows.

Three out of four investors surveyed said residential property is looking attractive and two thirds are keen to explore investing in commercial real estate.

However a large number, some 75% said they feel hampered by borrowing costs.

The US was the most attractive real estate market for investors outside their home country, regarded as having the highest potential for return on investment.