Omani papers continue to print any PR crap they are sent

MSM trading flat, everyone off for the Eid holidays, yawn... Stinking Red tide still everywhere (more than 3 weeks now) from Mussandam to Sur.

But, a piece printed in the Times of Oman today shows how the press here will print any old crap sent to them as a PR piece. It's essentially an advertorial filled with total bullshit, pumping some dodgy minor UAE real estate developer 'Sweet Homes', who are trying to sell to the Omani market a planned development called Ajman Uptown in the middle of no-where in Ajman, UAE. You can compare the total PR drivel and hype, mixed with out-dated non-sequitors on the Oman economy, below with comments made over the past few days from people actually trapped in the ‘Ajman Uptown’ development already...

Basic story: Sweet Homes apparently advertise a deal based on a 10% deposit, regular payments until 50% paid, followed by 25% on completion and a further 25% after that. It seems Sweet Homes asks for post-dated cheques from 'investors' who purchase, and then proceed to cash them, because the contract is in reality based on a pre-defined project time schedule and is not related to actual physical construction milestones, simply against a promise to finalise contruction. And all they've done so far at Ajman Uptown is level and compact the land, even though prepayments on some previously sold units are already at 40%.

Here's what it looks like in the brochure (I do love the way the artists foresee the current barren desert miraculously turning into a tropical lush jungle during the coming few years)



and here's what it looked like a few days ago.


Its rather sad. Reading a lot of the comments, many of these development companies have taken large amounts of money from the life savings and personal borrowings of Non-Resident Expats who believed they could buy their dream and secure a UAE residence visa as well. And in the specific case of Ajman Uptown, real construction has still not even started. These so-called developers can take lots of money up front, proceed to pay themselves a fortune in salaries, dubious fees, expenses and generally live the good life, all with no need to progress actual construction according to promises at the time of sale; and in the end the only losers will be those who have paid good money for a patch of sand and a promise.

So Muscat, be very wary. As the UAE real estate bubble springs more leaks and the river of borrowed cash dries up, these UAE guys will be doing a lot to try and pull other GCC investors into their sinking mire of debt, with tactics of aggressive hard sell time-share style, performed by some very talented professional sales people chasing big commissions, with contracts that don't align with verbal assurances, and of course pre-payments. Assurances based upon escrow accounts, contractual penalties, etc, don't seem to be worth anything. Resist the tales of discounts, guaranteed rental income, penalties for non-completion, easy payment schedules, etc etc. Once they have your money up front, they have you by the short and curly's.

And when you see the hundreds and hundreds of multi-tower skyscrapers being built or planned right now, its clear (to me at least) that the best strategy, if for some bizarre reason you do want a property in the UAE, is to wait and pick them up post-completion at much cheaper prices than now, with a standard mortgage from a real bank.

Meanwhile, expect more and more media bullshit about how everything is totally fine and there has never been a better time to buy than right now.

STOP Press Oman Developments: A source tells me the decision was made on Wednesday to continue the Salaam Yeti development in Oman, BTW. But I'll be curious if this will be predicated on the off-plan sales business funding model, which I think is now effectively bankrupt.

From the Times of Oman's Irresponsible PR dept:

Sweet Homes generates large investor interest for its Dh3b ‘Ajman Uptown’ project in Oman

Times
Friday, December 05, 2008 11:47:25 PM Oman Time
MUSCAT — Sweet Homes, a leading UAE-based developer and multi-service provider to the real estate sector, has announced that it has generated huge investor interest in Oman for its Dh3 billion ‘Ajman Uptown’ project following the completion of roadshow organised in Oman.

The developer has a state-of-the-art sales office in Muscat and has attributed the success to growing interest from Omani investors towards villas and townhouse communities.

Sweet Homes had previously opened its offices in Oman to market ‘Ajman Uptown’, a community development that is set to offer a total of 1,504 G+2 villas and townhouses and 7 G+4 buildings spread over 4 million square feet of land in Ajman, UAE.

Recent studies show that real estate investments in Oman totalled $4.2 billion in 2007, up from the $0.75 million figure posted in 2005, and this is expected to further consolidate and reach $20.8 billion by 2010.

As part of a programme to reduce the oil sector’s contribution to GDP to nine per cent by 2020, Oman has been actively pursuing a development plan that focuses on industrialisation, privatisation and diversification, particularly in high-potential investment platforms such as real estate developments.

In addition, investors are also actively looking at investment opportunities in the UAE real estate market, with many having set their eyes on ‘Ajman Uptown’, which offers the benefits of community living within the commercial and residential towers, hotel and hotel apartment complex, and villas and townhouses comprising the development project.

“The growing interest for ‘Ajman Uptown’ shows that our intensified marketing campaigns in Oman are paying off. With a growing number of Omani players looking to invest in residential communities outside of Oman, we are confident that ‘Ajman Uptown’, which offers 8 different types of two, three and four-bedroom townhouses and exclusively designed five-bedroom VIP villas, will be met with overwhelming response. Our project has generated positive ROI’s for our investors and we’re aiming to do the same with investors in Oman,” said Fahad Sattar Dero, CEO, Sweet Homes Group.

The opening of Sweet Homes’ Oman operations coincides with the country’s growing boom in economic growth.

In 2007, Oman’s GDP posted a 12.9 per cent growth attained through a notable rise in non-oil activities and an 18.3 per cent increase in non-petroleum activities.

Despite the fact that its real estate sector is considered to be in its infancy and only posts 3.8 per cent of Oman’s GDP, developer’s such as Sweet Homes are strategically positioning themselves in a sector that is forecasted to grow exponentially in the coming years.

“We are definitely expecting to generate more market response for our projects from these intensified campaigns as there is a huge pool of potential investors and property buyers who are very interested in our unique real estate offerings.

“Further, the success of our expansion initiatives in Oman and also in Qatar have further emboldened us to reach out to more areas in the region, providing international customers an exclusive and convenient platform to facilitate the acquisition of their dream properties and real estate investments in the UAE,” concluded Dero.

With a current project portfolio valued at Dh4.7 billion, including its two primary projects in Ajman, ‘Rainbow Towers’ and ‘Ajman Uptown’, Sweet Homes has earmarked exclusive projects in Dubai and Abu Dhabi as part of its extensive expansion plans.

The developer is positive that its future projects within the UAE will set new records for the company, strengthening the solid reputation it has built in Ajman and building a significant presence in the entire UAE real estate market.

With offices in the UAE, Qatar, and Oman, Sweet Homes continues with its vision of providing more residential developments in the region and to further expand operations to cater to the growing interest across the region.