Repost from Big News Network.com
Emaar, Dubai’s biggest property developor set the emirate on fire on Saturday but not in the way it intended.
The property giant, amidst heavy security, was launching its latest serviced residential apartments tower, proposed for a site opposite the world’s tallest building, the Burj Khalifa.
After the debacle in September last year when a similar project was launched and hundreds of people camped outside the Emaar sales office for three days to get set, the company announced this time buyers would have to pre-register. What followed was a disaster, with one prominent Dubai real estate agent describing the actions of Emaar as “disgraceful.”
Registration was online and it took place on Wednesday at 10am. Emaar then vetted the applicants, estimated at around 12,000, and allocated tokens to those that had been successful. With 280 apartments on offer the developer it was assumed would have issued 280 tokens, and perhaps a number to offset those clients that didn’t turn up or didn’t proceed to buy an apartment. With approximately 300 to 350 tokens allocated it should have all gone swimmingly.
What the developer didn’t tell clients was that they had issued three lots of tokens. Successful registrants were told they had to be at the Emaar sales office at 8am. When they arrived they found long queues stretching from the front entrance to the three main buildings in the Emaar complex right around the outside of the buildings. The developer issued red, blue and yellow tokens. While the red queue moved swiftly through to the sales office to look over plans, prices and contracts, several hundred, possibly a thousand people, waited outside penned up in long lines for several hours without any communication from Emaar as to what was happening. Trays of Chicken sandwiches and croissants were passed around and bottles of water but there was no-one to tell the throngs what was going on.
Then as it was approaching seven hours in the queues, at about 2.40pm, a crowd marshal got up on her feet, without any amplification, and said the red tokens were up to number 155 and they had yet to start on the blues, and the yellows it seemed may not get a start at all. The Emaar employee stressed that people were welcome to stay but there was little likelihood they would get set. Angry scenes followed as frustrated buyers left in disgust, not so much because they had missed out, but they say because of the way they were treated. Scores were heard muttering, and others making their feelings known more loudly, indicating they would not take part in an Emaar property launch again.
For those that stayed however, in the ever-dwindling queues, and those that had made it inside into the sales office, the worst was yet to come. About 4pm, when the red tokens were up to about 175, an Emaar representative announced all apartments had been sold. There was a complete uproar as angry clients and their agents stormed Emaar personnel seeking an explanation. Agents had been told Emaar was restricting sales of the apartments to one per client, yet before even one third of the tokens had been dealt with all the apartments were gone.
Earlier in the day it had been indicated quotas of apartments had been allocated to each token category, however it appeared at the end of the day only those holding red tokens would get apartments, and clearly the one apartment per client rule didn’t apply to them.
The fact that Emaar may have been abusing their clients, many of whom have been with them for years, some even buying whole floors off them, didn’t seem to register. Management and marketing executives would have been well aware within a couple of hours of opening their doors, if not even before they opened, that there was no prospect of around 900 registrants being able to be dealt with by sales representatives, let alone complete purchases. An Emaar employee when asked about the situation, confirmed the company intended for it to happen this way as they wanted all the hype, and the subsequent publicity about hundreds being turned away. There were even suggestions Emaar limited the number of units on sale, preferring to establish the hype and then sell more units into the open market later.
What may have been deemed to have been a top marketing strategy ultimately turned into a public relations nightmare with more damage being done to the developer’s reputation, notwithstanding it sold whatever number of apartments it intended to. The company may not be so quick to sell the next project. It is unlikely those that took part Saturday, many of which had travelled from all over the UAE, elsewhere in the Gulf and as far away as Iran and Russia, would be lulled into going through a similar exercise again. One prominent real estate agent who did not want to be named said she and her colleagues in the industry were “appalled,” at the way in which Emaar handled the launch, describing it as a “con,” and a “disgrace.”
The developer was also under scrutiny as the emirate’s property regulator, RERA, requires payment programmes for off-the-plan properties to be set commensurate with construction milestones achieved. Emaar however was hitting clients with a 15% up-front payment, followed by a 10% payment in June, and then a 15% instalment when the construction is 10% completed. Investors will therefore have forked out 40% of the cost of their apartments while Emaar, which is state backed, will have only completed 10% of the construction.
The tower itself, The Address Residence Fountain Views comprises 60 floors of one, two, three and four bedroom apartments and penthouses. It will be the only Address property developed by Emaar to date to not include a hotel, however hotel services will be provided to the complex by Emaar’s hotel chain, The Address Hotels and Resorts. The company will also operate a serviced apartments pool in the tower.
Let us know if you had a similar experience at the launch; we would love to hear from you. You can also follow us @DXBPropInvest on Twitter.