Downfall of the World's Premier Real Estate Development Company

Emaar Misr Chief Axed

March 1, 2010
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In the wake of numerous delays and cost overruns, Emaar recently removed Sameh Muhtadi as Chief Executive Officer of Emaar’s efforts at entering the real estate market in Egypt.

Sources within Emaar Misr have stated that Muhtadi’s departure was related to the lack of substantial progress on Emaar’s Uptown Cairo, Cairo Gate, Mivida, and Marassi Developments.  Emaar has been active on the site since 2006, however, the developer has yet to deliver a single home.  Sources have also stated that Emaar Misr had been subject to a selective and rigorous internal audit by Emaar due to the unexplained delays and massive cost overruns.

Muhtadi has been replaced by Mohamed El Dahan, Emaar’s Internal Audit Executive Director.


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Burj Dubai Delayed…Than Delayed a Couple More Times

November 5, 2009
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The Burj Dubai opening has been delayed from 2 Dec  2009 to 4 Jan 2009 in order to coincide with the 4th aniversary of the Sheik Mo’s installation as head ruler of Dubai.  Apparently, celebrating the Sheik himself is a higher priority than celebrating the country as a whole on National Day.

What’s most interesting, and perhaps most telling, of this latest opening date change is that it was issued by the government.

Who is in control of Emaar?

Is Al Abbar on his way out like the scapegoated ex-Dubai Properties Chief?

 

 


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An Insult to Our Intelligence

October 29, 2009
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Emaar reported $381M (259M Euros) in profit over the last nine months.  The company’s flooded the market with 5 star hotel rooms in a very slow market at the peak of global hotel vacancy rates, not to mention the 50% drop in residential home prices throughout the emirate.  There may be money flowing in, but it’s not from home sales or daily hotel rates.

http://emaar.com/index.aspx?page=press-release-details&id=946


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Emaar Misr – Marassi – A History

October 2, 2009
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Al Bawaba is the only media outlet publishing Emaar Misr’s press release on the “successful” completion of it’s beach club at Sidi Abdel Rahman.

Developed at a cost of EGP 170 million”

Emaar spent 170 Million Egyptian pounds (approximately 21 million Euros) on a non-revenue generating club (except for a restaurant) for the residents of non-existent villas.   Simply an atrocitiy.
Well, remember this article?  Might explain their motivation.

Government to cancel Sidi Abdel Rahman deal

By Ahmed A. Namatalla
First Published: March 29, 2007

CAIRO: The Holding Company for Tourism (HCT) announced yesterday it is launching legal action against Emaar Misr to reclaim the Sidi Abdel Rahman land plot sold for LE 1.2 billion earlier this month.

HCT’s announcement came one day after the expiration of the deadline announced by the Ministry of Investment for Artoc Group to sell its 60 percent stake in Emaar Misr to Emaar Properties without reaching a deal.

According to an HCT statement, the company will begin “immediately” reclamation procedures specified in the land sale contract and notify the local authorities in the Marsa Matrouh Governorate to take the “necessary actions.” HCT added the ongoing dispute within Emaar Misr and its failure to execute the Sidi Abdel Rahman project in a timely manor has left HCT “concerned” over the security of the down-payments made by early subscribers to the project.

Earlier this week, the Capital Market Authority (CMA) declined Emaar Misr’s application for share-listing Sunday, citing the company’s failure to submit financial statements reflecting the company’s activities over a one-year period.

Emaar Misr has since filed an appeal to the CMA’s decision, insisting on listing the company’s shares as a prerequisite to selling its stake.  In a statement earlier yesterday, Artoc Group Spokeswoman Reham Yaseen said the company has fulfilled all of its obligations including depositing its share of the company’s issued capital at Arab African International Bank and wished to terminate the partnership as soon as the UAE side makes its deposit.

Emaar Properties was not available for comment as of press time. The company has avoided commenting to the media since the beginning of its operations in Egypt with the establishment of Emaar Misr in March, 2005.

The last statement made by Emaar Properties came on March 13, when the company announced it has agreed with Artoc Group to acquire 100 percent of Emaar Misr by March 27. No deal value has been disclosed but media reports from Noozz and Al Alam Al Youm estimate Artoc is set to receive $160 million (LE 900 million) for its share.

According to Artoc Group Chairman Shafik Gabr, Emaar Misr now controls LE 6 billion in assets. The company has already launched construction of a $4 billion (LE 23 billion) residential development in El Mokattam and has finalized plans for the Sidi Abdel Rahman Marasi project, but is yet to begin construction.

Artoc Group and Emaar Properties have, on separate occasions, announced Emaar Misr is looking for more development opportunities on the Red Sea coast and in the Nile Valley between Luxor and Aswan to capitalize on the recent trend of developing the second home concept in Egypt for Arabs and Europeans.


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Emaar Misr Employee Brags About Delayed Financial Black Hole

September 24, 2009
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Here’s a link to a pretentious little emaar employee who has the audacity to boast about the progress made on the company’s Marassi master plan in Egypt.

Tmallare states in his blog, “The job is progressing well.  The first major milestone was the beach club opening by the first of July.  All the naysayers said it would NEVER be done.”

That’s incorrect, all the naysayers said it would never be done by July of 2008.  And before that, all the naysayers said it would never be done by July of 2007.  (you did prove those of us who were betting that Emaar would make the intelligent decision of walking away wrong).

So, after four years of work, there’s a beach club, but there are no hotels, villas, golf course, retail, or spas.  Who’s going to come to your beach club?

I’m posting tmallare’s entry on my blog:

Oh yeah, that construction project!

Well, I HAVE been a little delinquent on reporting the status of our original mission to the Mideast/Northern Africa.  I will attempt, therefore, to enlighten you as to what Ron has been doing over here for the past year.  The job is progressing well.  The first major milestone was the beach club opening by the first of July.  All the naysayers said it would NEVER be done.  But, it was.  And it is gorgeous.   “It can’t be done” does not really exist in Ron’s repertoire of verbal phrases.  He accepted the errant analysis as a challenge and, with a dedicated team, it was accomplished.

The villas, townhomes and apartments are under construction, with the first of these to be occupied by September, 2010.  The model villas were completed and ready for touring during the selling season of July and August.  The golf course driving range is complete and nine of the eigthteen holes is scheduled to open in 2010, along with a golf academy.  The Ritz Carlton will be the  first hotel to break ground during the 3rd quarter of next year.  The marina is under design and will begin construction in the 1st quarter of 2011.  I will take more pictures as time goes on so you can see the progress.

This is the official description of the projectMarassi, an exciting new development owned by EMAAR. Maraasi site is located 125 kilometers west of Egypt’s second largest city – Alexandria, and 330 kilometers north of Egypt’s capital and largest city, Cairo. It is also only 5 kilometers west of El Alamein’s WW II historic relics and cemeteries.

The project’s strategic location relative to important cities of Egypt, its accessibility and proximity to transport nodes and linkages, its naturally beautiful site and its moderate climate, all make the project’s villas, Townhomes & Hotels, a year-round destination of choice for discerning world travelers and tourists.

The project covers an area of more than 6.25 million square meters in Northern Egypt, along the Mediterranean Sea at the Sidi Abdel Rahman Gulf.

Road and Infrastructure Construction - OngoingRoad and Infrastructure Construction – Ongoing
Construction Underway on VillasConstruction Underway on Villas
Public Entrance Under ConstructionPublic Entrance Under Construction

Marassi Beach Club Under ConstructionMarassi Beach Club Under Construction

Marassi Beach Club on Opening DayMarassi Beach Club on Opening Day
View From the Beachfront RestaurantView From the Beachfront Restaurant
Beach Club Lobby Looking Out Toward Entrance DoorBeach Club Lobby Looking Out Toward Entrance Door
Beach Club Entry/Welcome AreaBeach Club Entry/Welcome Area
Tiled Artwork in Beachclub LobbyTiled Artwork in Beachclub Lobby


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CityScape – The Circus Comes to Town

September 20, 2009
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The WSJ is reporting that Emaar and Nakheel have reconsidered their decision to pull out of CityScape.

I, for one, am glad that attendees this year will not have to miss out on the freakshow for the first time since the inception of CityScape.  What horrible wonders will these developers have in stall for audiences this year?  What will top the financial/architectural nightmare inducing Nakheel 1Km tower?  Will Emaar bounce back with the world’s largest Date Souk?

We, or at least I, can joke about this all day long, but there is a much darker side to this story.

Pulling out of CityScape was a financially sound decision since convention budgets for one company can easily run into the millions, investors aren’t looking to hear about new projects from company’s with a gargantuan balance sheet of overvalued assets, and finally, not attending sends the signal that the company is focused on restructuring and strategy for the way forward.

Unfortunately, as what seems to be often the case, what’s good for investors in Dubai is not good for Dubai Inc (aka the Dubai Municipality).  Maybe, one year ago, Emaar would have had the independent power to resist pressure to avoid wasting time and money on Dubai’s premier circus, but, as the public company will be consolidating their holding with government owned entities, Emaar is more a less a meager PR tool to manage the rapidly declining wealth of an irresponsible ruling body.

Bottom line, Emaar is a shell of a company.  Anything or anyone that brought Emaar to greatness (which wasn’t much), is no longer a part of the company.


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