Hi guys, this is my first post and I am a newbie… please correct...

Hi guys, this is my first post and I am a newbie… please correct me if I am wrong.

Dubai

The emirate indicated last year that for any development projects to go ahead, investors have to put in a down payment in an escrow account. This money cannot be touched until the authorities give approval for the construction.

http://www.arabianbusiness.com/533645-sunland-sees-brighter-days-ahead

I believe Sunland's Dubai projects that are currently under construction have achieved at least 50% presales. On page 23 of the Half Yearly presentation, $1.2b out of $1.9b of D1 and Plazzo have been contracted out (63% sales)
That leaves $700m unsold Dubai properties sitting as inventories. (half yearly report pg 16)

As for projects to be constructed, Nur has achieved over 77% pre-sales ($231m/300m).
IMO, the development of the Atrium will not commence if Sunland and EWM does not achieve at least 50% presales. Right now it is only at a stage where they are going to launch the Atrium but it is not yet confirmed. I will call the company if my theory is correct.
http://www.theatriumatwaterfront.com/pdf/sunland-announces-joint-venture-partner.pdf

Property developers do not build if they haven’t sell. By the time they decided to launch a certain project, they have probably made the profit. These guys put in $30m in investment and their end-value is 10 fold. I’d say even if they only manage to sell 50% of their property, they would’ve already broke even.

The risk involved is that property buyers sign into a contract to buy, but they cannot fulfill their obligations to settle the deal (lost of job/ speculators…). But the government and banks will pay, and that is what Dubai government are doing.

The risk involved investing in this particular company is very minimal. Will Sunland go bankrupt because of Dubai? I say very unlikely...

Roy