Monday, June 28, 2010

Sawgrass Marriott Golf - Chapter 11 Filing

This information is quite old, but these links may be useful for anyone looking for information on the Chapter 11 case of the Sawgrass Marriott Golf Resort & Spa in Florida - famous as the venue for Tiger Woods' public apology for his infidelities on Feb. 19th, 2010. It was owned by an Irish consortium, Redquartz Boundary Ltd., which purchased it at the height of the boom in 2006 and was forced into a Chapter 11 filing by its lenders, Goldman Sachs, on January 28th 2010.

The statement released by the Sawgrass Marriott at the time of the filing read as follows: “This action is in response to the current global economic environment and the fact that an agreement on a restructure with the lenders could not be reached. This process will protect the resort and allow us to continue to operate business as usual. We are firmly committed to maintaining our world-class operation and foresee no changes in the day-to-day operations at Sawgrass Marriott Golf Resort & Spa.”

The story has been reported in a number of media outlets since the announcement last March, here are just a few:

Sunday Business Post:

Irish Investors in the Rough

Irish investors, including well-known names in the business world, could lose up to $90million they invested in the buyout of a hotel on the Sawgrass golf course in Florida. About 100 investors, mainly high-net worth individuals, were involved in the $220 million buyout of the Sawgrass Marriott Golf Resort & Spa at the height of the boom in July 2006. The investors include Philip Lynch, chief executive of investment firm On€51. More...

Irish Independent:

Florida Dream Resort's Value has Halved, say Irish Investors.

THE Irish owners of the Sawgrass Golf Resort and Spa believe the Florida property known for hosting Tiger Woods' February apology is worth less than half the $250m (€204m) they've ploughed into it.

The valuations emerged in a Jacksonville courtroom this week as Irish investors, including financier Niall McFadden, fended off an attempt to have the resort seized and sold. More...

Jacksonville Business Journal

Sawgrass Marriott Owners file for Chapter 11

The owners of the Sawgrass Marriott Golf Resort & Spa in Ponte Vedra Beach have filed for Chapter 11 bankruptcy protection.

Public records show RQB Resort LP and RQB Development LP filed for bankruptcy in the U.S. Bankruptcy Court for the Middle District of Florida yesterday, listing Goldman Sachs Group Inc. among its creditors and assets and debt of as much as $500 million each. More...

Sawgrass Marriott Case Summary

Thursday, June 24, 2010

A little car parking space by the sea... a snip at just £60,000

The Daily Mail reports today that a single car parking space in a Cornish seaside town has been sold for nearly £60,000 - which was £20,000 over the asking price.

The small 20ft by 12ft plot of land was snapped up by a local resident who was determined to get the sought-after space in St Ives, Cornwall.

The cost of the space is three times the average annual salary in the town.

Estate agent Jonathan Payne who conducted the sealed bid auction said: 'I cannot remember one going for more money.

'Spaces are always in short supply in St Ives and even going back years, they made a premium price.'

He said there was a chronic lack of car parking space in the old part of the town.

The small plot of land is beside the entrance to the council-owned Island car park.

St Ives councillor and shop owner Colin Nicholls said it was a 'massive price', saying: 'I would rather do without a car than pay that kind of money.

'It is overpriced but that's how market forces operate.'

To view the full article click here.

Tuesday, June 22, 2010

Ryanair Introduces Optional Larger (20KG) Checked-In Bag Allowance

Ryanair has announced that passengers can now choose a larger (20kg) checked-in bag allowance for €/£25 as an alternative to Ryanair’s standard (15kg) checked-in bag allowance which costs €/£15. Passengers who require a second checked-in bag can purchase an additional 15kg allowance for €/£35 (via Manage my Booking).

Ryanair continues to encourage passengers to travel light, by snapping up one of Ryanair’s approved Samsonite carry-on bags when booking their low fares Ryanair flights, which will allow them to continue to save by travelling with Ryanair’s free 10kgs carry-on bag.

Ryanair’s Stephen McNamara said:

“Ryanair continues to encourage passengers to travel light and save even more by leaving the checked-in bags at home and taking advantage of our 10kg free carry on allowance, and our great value Samsonite bag. However, passengers who do require checked-in luggage can now purchase a larger 20kg bag allowance for €/£25 or our standard 15kg bag from €/£15. Passengers can purchase our checked-in baggage allowances at the time of booking or subsequently through Manage My Booking on”


15kg bag 20kg bag

1st Bag
€15/£15 €25/£25

1st Bag - Peak -July & August €20/£20 €30/£30

2nd Bag
€35/£35 n/a

2nd Bag - Peak -July & August €40/£40 n/a

*Each passenger is permitted to purchase up to 2 checked in bags.

Monday, June 21, 2010

Spain - Minister for Housing, Beatriz Corredor, has replied to comments made last week by her predecessor

The Spanish Minister for Housing, Beatriz Corredor, has replied to comments from her predecessor, María Antonia Trujillo and said that now is a good time to buy property in Spain. Trujillo had said that she would not buy property now and forecast prices would fall by a further 30% -50%.

Now Corredor has come out with a defence of the work of her Ministry, underlining the work it does in providing help into the official protection housing market.

The Minister said that there was still a tax deduction on housing in force this year, and that mortgage interest rates remained very low. She also claimed that some property in Spain has fallen in price by more than 60%. She said it was ‘important for purchasers to find out how much housing is worth in the area where they have chosen to live’.

She also noted that the SPA, Public Rent Society, was taking over more than 30,000 of the empty newly built homes into the rental sector.


Sunday, June 20, 2010

Blow to Dubai Property Owners

Dubai property owners, who have been left totally at sea about the potential for having their properties completed at any stage, will not be happy with the news that one of the Emirate's main builders, Nakheel, is believed to have let go as many as 650 staff in the past week leaving the company now employing an estimated 240 people.

Nakheel, the property unit of Dubai World, was responsible for some of the more newsworthy and largest developments in Dubai such as the three Palm developments as well as Dubai World. It has announced the redundancies in a fresh round of job cuts according to Arabian Business magazine, but it was very reluctant to put a figure on the staff reduction.

Nakheel claims that the bulk of the redundancies affected administrative posts, but this is the latest in a string of cutbacks for the developer, which laid off 500 staff in November 2008 at the peak of the global financial crisis, and a further 400 in June 2009.

Dubai World, and therefore Nakheel, is a state backed group which has restructured $10.5bn in financial liabilities, asking trade creditors to wait five years to receive full payment having fallen behind on its repayments. Its owners, the Dubai government, said it would put $8bn in cash into the indebted property unit in March to help it pay contractors and suppliers and complete its projects.

The recent redundancies, in what is the biggest developer in the Emirate, will call into question whether much of the property that was sold in the boom will ever be built. This will, of course, come as quite a setback to the many Irish investors who have sent money to the Emirate. The quandary is whether they now write off their investment to date, contemplate legal action or live in hope that the Emirate can turn around its fortunes and build the properties that have been sold.

Get the full story in the Arabian Business magazine.

Friday, June 18, 2010

Spain's ex Housing Minister says she would not buy property in Spain now

The Spanish ex Minister for Housing, María Antonia Trujillo, has told a reader of El País in an online interview that she would not buy a flat in Spain now.

The questioner asked whether she agreed with her successor’s view; Beatriz Corredor has declared that now is the best time to buy a home.

María Antonia Trujillo replied that everyone can do what they see fit, but that she has been looking to buy for three years and would not do so now as she expected house prices in Spain to fall by a further 30-50%. She added she hoped the adjustment would happen quickly.

Trujillo, who was Minister at the end of the real estate boom, admitted her part of the blame for the crash saying that everyone from the citizen to the politician has their share of the blame. She added however that the then Minister for Tax and the Economy, Pedro Solbes, had opposed her ideas to remove tax breaks for house buyers.

However she thinks such incentives should be in place now, despite the Government’s intention to remove them.

Asked if she missed being in Government, she replied ‘The best thing about being Minister is having been one’.


Thursday, June 17, 2010

House prices now rising in more than half of countries across the globe

Knight Frank Global House Price Index – Quarter 1 2010 results

Key highlights:

• Prices increased in 53% of the locations monitored by the Knight Frank Global House Price Index in the year to the end of March 2010

• The Asia Pacific region saw the strongest growth with prices increasing, on average, by 17.8%

• Annual price inflation for all global housing markets moved into positive territory for the first time since Q4 2008, recording 1.6% growth in the year to March 2010

• The top performers remain the Asian economies of China, Hong Kong and Singapore, all recording annual growth in excess of 24%

• Ukraine and the three Baltic States continue to occupy the bottom rankings with annual price falls of more than 30%

Liam Bailey, head of residential research, Knight Frank, commented: “Arguably, the most noticeable trend in global house prices is the ease with which the performance of global housing markets can now be grouped by world region. The top four positions in our rankings are all occupied by Asia Pacific locations, whilst Europe dominates the bottom half of the table.
“A recovery in the global housing market is undoubtedly under way, in Q1 2009 33% of countries recorded positive annual growth, in Q1 2010 this figure is closer to 53% but still some way off the figure of 90% recorded in Q1 2006. “Analysis of the quarterly growth results suggests the markets in some of the worst performing markets such as the Baltic States and Ukraine are starting to experience some respite, with prices falling at a slower rate than previously. Estonia experienced a 40% fall in prices annually but only a 0.5% fall during the first three months of this year.

“Prices in Hong Kong increased by 30.6% in the year to March 2010, however, we expect results for the coming months will show more muted levels of growth as the Government’s efforts to rein in the overheated market take effect. These include measures to increase land supply, a maximum 60% loan-to-value restriction on mortgages for luxury homes and developers are now required to release at least 30% of units in their first phase to halt the slow release of homes which allows prices to inflate over the course of the development. “In Australia, prices rose 20% in the year to March 2010, according to the Australian Bureau of Statistics (ABS). However, in our opinion the results from ABS overstate the actual underlying price growth due to its unique methodology and seasonal shifts in market activity, partly as a result of the increase in first time buyer demand over the past year which has been driven by government incentives.

“Historically, the index has overshot on both the downside and in this case the upside – other private house price measures, which have a more wide reaching methodology, taking into account apartments and semi-detached housing (unlike the ABS), have recorded growth of around 12% in the year to March 2010. This still significant growth has been driven by a confluence of factors; 40-year low interest rates, first time buyer concessions, strong population growth and a lagging supply response.

With interest rates now rising, the government withdrawing stimulus and the supply response picking up (albeit modestly), we expect house price growth to slow over the next six to nine months. “Doubts over the Australian Index’s methodology are mirrored in Spain where, according to its Housing Ministry, prices fell by 4.7% in the year to March 2010. Most serious commentators however believe price falls of 10-20% over this period provide a more accurate reflection of Spain’s housing market performance given its backdrop; 20% unemployment, a shrinking economy and rising debt.

“In Europe a positive story has been provided by the Scandinavian countries of Norway, Sweden and Finland. Here, annual growth has hit double digits as housing markets, less beset by currency weakness and debt crisis than many of their European neighbours, has allowed supply shortages to fuel growth once more. “Generally, however, the Q1 2010 results suggest that whilst global housing markets remain polarised, each quarter provides new evidence that the global recovery is gaining ground as the proportion of countries moving into positive territory increases. It remains to be seen whether this is another period of sustained growth or the middle peak in a double dip recession. Certainly, a number of European economies face growing challenges in the form of tightening fiscal policy and austerity measures.”

For further information, please contact:
Liam Bailey, Residential Research, Knight Frank, +44 (0)20 7861 5133,

To read the full report Click Here.

Monday, June 14, 2010

Leptos Estates Backs Down in Libel Action

Last week, the packed public gallery of a Paphos courtroom broke into applause when the lawyer acting on behalf of Mr O’Hare announced that the libel case against his client, brought by Armonia Estates Ltd and Pantelis Leptos, had been dismissed.

Armonia Estates Limited is part of the Leptos Group and operates under the brand name Leptos Estates; Pantelis Leptos is Vice-chairman of Leptos Group and Marketing Director of Leptos Estates. They were claiming hundreds of thousands of Euros from Mr O’Hare resulting from statements, which Mr O’Hare had published on the Cyprus Property Action Group (CPAG) website, that they considered libellous.

In his opening address to the court, a lawyer acting on behalf of the plaintiffs asked the court’s permission to withdraw their law suit and the injunction against Mr O’Hare.

Outside the courtroom I asked the plaintiffs’ lawyer if he would advise me why his clients had backed down in their libel action. His answer was an emphatic “NO!”

Mr O’Hare refused to comment on the court proceedings, but a spokesperson acting on his behalf said that he wished to thank everyone for their support and especially for the legal testimonies submitted by some of the buyers.

The future of the Cyprus Property Action Group and Denis O’Hare’s continuing involvement is still under discussion. We shall bring you further news as we receive it.

For News Article on Cyprus Property Magazine Click Here.

Sunday, June 13, 2010

Humber Valley Emerges From the Ashes


Noton Enterprises Limited, a numbered company, 61839 Newfoundland and Labrador Limited, and Oke Consultants Limited, all locally owned companies, have formed a joint venture partnership and have purchased the assets of Humber Valley Resort. The new owners intend to operate and manage the Resort under a new corporate entity: Humber Valley Resort Corporation (2010). I, Katie Watton, will be the Public Relations Director, Gary Oke the Managing Director of Operations and Graham Watton, Q.C., General Counsel looking after all corporate and legal matters.

We will be focusing on making that which is already on site work properly so that the Resort can become the success it already has the potential to be. First let me state that Humber Valley Resort is one of the best things that has happened to the West Coast of this beautiful Province. The vision was and still is spectacular, unfortunately the execution was less so, but that is the past. We have to put the past behind us and move forward. All that the Humber Valley and the West Coast has to offer is still here and that hasn’t changed - the scenic beauty and renowned hospitality which attracted people to come here in the first place remains. We intend to promote and develop Humber Valley Resort as a 4 season Resort Destination.

We do not intend to move away from the Resort concept. However, we are confident that by combining permanent residents and seasonal and holiday residents we will attain the best of both worlds and a perfect balance.
A major concern for many of the successful resorts in Western Canada - Fernie, Panorama, Golden, Radium Hot Springs, Kimberly and the like is that chalets are sold exclusively as second or vacation homes and the resorts become desolate ghost towns in the off season.

These resorts are now moving to a mixed residency, both permanent and seasonal residents, and we are convinced that by using this approach we will avoid these “down periods” and maintain the Resort’s vibrancy.

Some of the Humber Valley Resort’s permanent residents are former vacationers who fell in love with our community, the people, the scenery, our warmth, culture and our way of life.

People from all over the world call Humber Valley Resort their home. For some, it is a vacation retreat, and for others it is a permanent residence. As a resident of Humber Valley Resort your neighbours are from all over the world - England, Ireland, Switzerland, Germany, various other places throughout Europe, various parts of Canada and Newfoundland. An exciting and stimulating mix of ideas and cultures.

We will shortly be meeting with the chalet homeowners association to work out and arrange a smooth transition and takeover of the operation, management and provision of all of the essential services to the Resort. A lot of work has to be performed to improve and upgrade the existing services, the roads, the communications, etc. We will start immediately.
With our very capable team which we will shortly be putting into place and under the supervision of our capable Managing Director, Gary Oke, we will get the Resort’s Golf Course in shape as one of the best golf courses in Canada. The Resort and the golf course, which is an 18 hole, Par 72 championship golf course, has won some excellent awards in the past - Humber Valley River Golf Course voted “Canada’s Best New Course 2007" - voted Worldwide Resort of the Year 2006 and 2007 - Best New Canadian Course, 3rd place - Best New International Course. Under the capable management of Gary Oke we intend to win further awards for the Humber River Golf Course and the Humber Valley Resort.

The cost of the green fees will be reasonable - we intend to attract more members, visitors, golfers and tourists, who hopefully will come for several days - possibly weeks - and stay at the chalets at the Resort and vacation throughout Western Newfoundland and the Northern Peninsula, bringing economic benefit throughout the region.

Maintenance and rental of some of the chalets are presently being serviced and rented by a number of rental and management companies, including some owners themselves. We will shortly meet with these firms and individuals and the chalet homeowners association. We will consult with the chalet homeowners association and will have discussions with all of the interested parties with respect to the various property maintenance and rental management scenarios which are available and what would be in the best interests of the chalet owners, Humber Valley Resort and the people visiting and staying at the beautiful chalets in Humber Valley Resort.
We will also shortly be working towards getting the Eagles Perch Club House building up and running and available for special events, meetings, conventions, weddings, and the opening of the Dining room, the bar, and the golf shop. We have plans to provide themed events at the Eagles Perch at various times of the year and to providing seminars and weekends to include culinary instruction, wellness and personal development, and golfing seminars, etc. Within a short period of time we will be creating between 30-40 new jobs.

With the purchase of the Resort assets, the new owners have also purchased all of the intellectual property, copyright, trademarks of Humber Valley Resort. Humber Valley Resort has also in the past been honoured with 3 substantial website awards. The Resort also took top honours at the Silver Spider Web Awards. Humber Valley Resort walked away with awards for both site promotion and best overall site. We will be updating the website of Humber Valley Resort.

We will be giving serious consideration to a 4 star hotel in the Resort’s future plans, and incorporating and taking advantage of the Provincial Government’s Incentive Tax Credit Program. We are well aware of the recent announcement and the various comments concerning the proposed Resort developments in the Steady Brook area and we wish the developers every success.

However, we strongly believe there is room in the Humber Valley Resort for a 4 star hotel-condominium complex. We have the location, the infrastructure, the international world class golf course and the spectacular
Eagles Perch Club House, its Dining and conference facilities, meeting and banquet rooms and available lands adjacent to Eagles Perch which can accommodate the construction of a 4 star hotel-condominium complex.

We are not making any big promises, however, we do realize that to take advantage of the Provincial Government Incentive Tax Credit Program, we will have to make a decision on the 4 star hotel-condominium complex within the next 12-18 months.

We will consult with all stakeholders and keep them informed - the chalet homeowners association - the chalet owners - the Provincial Government - the Department of Tourism - Hospitality Newfoundland and Labrador - the various municipal councils throughout the Humber Valley region, Western Newfoundland and Northern Peninsula.

We intend to provide the chalet owners association, the chalet owners, all of the stakeholders, and the public with thorough and honest communication in all aspects of the Resort’s operation to instill confidence and trust in the Resort and its new owners.

Our goal is to get the Resort and golf course back into operation and further develop and promote the Resort as a four season Destination and an upscale residential community.

We have had an opportunity to recently review the Provincial Government’s long-term vision and plan which was released last February, titled Uncommon Potential - A Vision for Newfoundland and Labrador Tourism”, which provides a framework to guide both the Provincial Government and their industry partners as we all work together to advance tourism in Newfoundland and Labrador through to 2020.
As the Premier said in his message and opening remarks in the Plan:
“As residents, we know our province is a special place, unlike any other. Similarly, we recognize that the opportunities and challenges we face are unique to Newfoundland and Labrador. This plan is designed to address the challenges and make the most of our competitive advantage in the global tourism marketplace - the fact that we offer unique travel experiences to visitors interested in taking an exciting adventure off the beaten track.
In Newfoundland and Labrador, surprises wait around every corner and the possibilities are endless - hiking the stunning coastlines, attending festivals celebrating everything from blueberries to squid, experiencing our rich and vibrant culture and heritage, witnessing natural wonders such as whales and icebergs, and meeting strangers who quickly become friends. Living here, it is sometimes easy to lose sight of the fact that these are, indeed, “uncommon” experiences.”
I would also like to refer to another couple of paragraphs noted in the Plan under the heading of Transportation Strategy to Grow Our Industry:
“For Newfoundland and Labrador, there’s no such thing as an accidental tourist. It takes deliberate planning and determined effort to visit here.
The transportation issues facing tourism in Newfoundland and Labrador are well understood and frequently articulated among industry stakeholders. In short, travel to, from, and around the province, whether by sea, air, or road is constrained by issues of affordability, capacity, infrastructure, and quality.
To compete effectively in an increasingly aggressive global market, we need the ability to bring travellers to the province in an easy, cost-effective, and pleasurable manner - by sea, by air, and by land. There is an immediate requirement for improved, affordable, and efficient access to and within the province. It’s the most critical element to stimulate inbound tourism. And it will have considerable influence on our industry over the next decade.
Access by Air. Air passenger travel accounts for approximately two-thirds of non-resident visits each year. Our response to strategic transport challenges identified in the Government of Newfoundland and Labrador’s ‘Air Access Strategy’ and through other forums is vital to the future success of our industry.”
We will work with the Provincial Government, Hospitality Newfoundland and Labrador, and all of the stakeholders in promoting Humber Valley Resort and our beautiful province of Newfoundland and Labrador.

The total annual budget being spend by the Provincial Government for tourism marketing is now 13 Million (from 6 Million in 2003). The tourism industry contributed almost 850 Million to the provincial economy in 2008, up from 790 million in 2007.
The Provincial Government is very committed and is doing an excellent job in marketing Newfoundland and Labrador nationally and internationally. The Provincial Government’s campaign continues to fulfill their main objective - promoting Newfoundland and Labrador as a Destination of Choice. As recently as February 1 of this year in New York City, Newfoundland and Labrador’s “Find Yourself Home” television campaign which was developed in collaboration with Target Marketing and Communications Inc., was awarded platinum honours at the Adrean Awards Gala. (I would further note that only 20 platinum winners were named from more than 1,100 entrants during the award ceremony.

Humber Valley Resort, the chalet owners, Humber Valley and Western Newfoundland will all benefit as a result of the tourism marketing on the part of the Provincial Government. We all have to play our role. We are all ambassadors on behalf of the Province. We want all of the public to know, people throughout Humber Valley, the Province of Newfoundland and Labrador, throughout Canada, the United States, Europe, nationally and internationally, that we are open for business - the security gate is not a barrier - the staff are there to welcome you - come visit us - play on our international golf course - fish in our world class salmon river, the Humber River - enjoy our cuisine, interact with the local residents - stay in the beautiful chalets on the Resort - take in the spectacular views of the Valley - experience our culture, our ideas, our way of life - do what I did. I came here 35 years ago from London, England, for the experience, for a 3 month period, and here I am 35 years later. I stayed for the lifestyle.

And that is our vision - “Come For The Experience, Stay For The Lifestyle”.

Thank you.

Thanks to Crazy About Newfoundland for this information.

Thursday, June 10, 2010

Dubai Action Group responds to Innovation Proposals


Following the meetings this week between the Dubai Action Group and Mr Probir Chatterjee, of Innovation SEZ Developer Ltd, at the Carlton Hotel Dublin, the Dubai Action Group would like to make the following statement:

Mr Chatterjee presented his proposals to approximately 150 investors, over a series of meetings during his two day stay. In summary the proposal is as follows: Innovation SEZ Developer Ltd has taken over the shares in the three development companies responsible for building Eagle Heights, Bermuda Views and Profile Residence. They have declared that they will build out our buildings if they get sufficient numbers of investors to sign up to their proposal, which includes a new payment schedule.

Innovation SEZ Developer Ltd intends to shortly send out an addendum to our current contracts for approval and signing.

Whilst the Dubai Action Group is interested in examining this proposal we cannot recommend it to our members until we have had the opportunity to study the written document in detail.

We believe a cautious and measured approach to any proposal containing adjusted payment schedules is vital given our experience to date.

We welcome all comments and suggestions from our members and a more detailed email will go out to members next week.

Kind regards,

The Committee,
For and on behalf of the Dubai Action Group

Cypriot Property Market Showing Recovery Signs

Those of you with property in Cyprus will be very glad to hear that the latest news from the Mediterranean island is quite positive. This good news comes courtesy of the wonderful Cyprus Property Magazine website run by Nigel Howarth. If you've any interest in the Cypriot property market then this site is a must visit.

"According to figures released by the Department of Lands and Surveys, 803 contracts of sale were deposited at Land Registries throughout Cyprus during May, the highest number since July 2009.

Throughout the first five months of 2010 the number of contracts of sale deposited at Land Registries throughout Cyprus amounted to 3,544 compared to 2,838 during the same period last year; an increase of 25%, with Nicosia and Limassol keeping domestic demand at a higher level than last year.

However, last years figures were exceptionally low and overall sales this year are still down by more than 60% on the numbers sold during the same period in 2008.

There are also encouraging signs that the number foreigners buying property is increasing, with the number of contracts deposited at Land Registries on behalf during the first five months of the year up by 7% on the same period in 2009.

Nicosia is doing particularly well with property sales to non-Cypriots up by 92% this year followed by Famagusta, where sales have risen by 10%.

But in the other coastal towns, which are largely dependent on external demand, sales are not doing so well. Sales in Limassol are down 6%, in Larnaca they are down by 4% and in Paphos they are down by 3% compared to last year.

Last years figures were exceptionally low and sales to non-Cypriots this year are still down by almost 80% on the numbers sold during the same period in 2008.

The article, along with property sales tables, can be found at the Cyprus Property News website.

Wednesday, June 9, 2010

Feature on Larionovo, Ciaran Maguire Group, Simple Overseas Properties and Kuvera

News feature in Sunday Business Post on June 6th written by Ian Kehoe.

"In his native India, Probir Chatterjee is a little-known figure. Yet, over the coming days, more than 250 Irish people will file into the Carlton Hotel at Dublin Airport to hear the accountant speak.

The reason? Chatterjee’s firm, Smart Investments, is attempting to kick-start a number of stalled property developments in Dubai.

His audience will be made up of Irish investors who put down deposits for three schemes in Dubai’s Sports City complex - Bermuda Views, Eagle Heights and Profile Residence.

Chatterjee is likely to have an attentive audience as he outlines a plan to take over the delayed developments and complete them, giving certainty to the investors at last.

Through an Irish-based selling agent called Larionovo, hundreds of Irish people invested money in apartments and villas in the three developments.

Enticed by glossy brochures and talk of a guaranteed return, many put their life savings into the property projects. Others stepped up to buy multiple properties, paying out hundreds of thousands of euro upfront.

In late 2008, Larionovo collapsed into liquidation. The Dubai developments, which were being spearheaded by a local firm, stalled. Since then, the investors have struggled to get any information about the development or the whereabouts of their funds.

For all concerned, the Dubai investment dream has turned into a nightmare.

‘‘A few years ago, I asked Larionovo about the progress of the development," said Tony Hynes, a Dublin businessman who invested in one of the schemes.

‘‘I was shown a picture of a six-storey building that was almost complete. A few months ago, I went out there myself.

All I could find was a hole in the ground. I don’t know what building they showed me, but it certainly was not mine."

Hynes is the chairman of an action group set up last year to investigate the Dubai debacle and try to recover funds from the project. It has discovered a maze of companies, with intricate shareholdings and impenetrable operations.

‘‘Look, I accept there is a risk associated with any investment, but we were given lots of promises that turned out to be lies," said Hynes. ‘‘We were told it was backed by the Dubai government.

Not true. We were told our money was in a safe account and was not being touched. Not true. It was actually being used to fund the development."

Hynes has already given up hope of getting his money back from Dubai.

He said the best option was finding a partner like Chatterjee to finish the development.

‘‘I am not getting my money back, so I am trying to get the keys instead," he said. ‘‘Next week’s meetings are crucial. Hopefully, in two years, it will all be over and I will be in possession of the apartments. Hopefully."

If a deal with Smart Investments can be agreed, Hynes and his action group could yet salvage something. Others might not be so lucky.

During the years of economic boom, Irish people were among the biggest buyers of foreign property in the world.

The numbers vary, but industry estimates put the number of Irish-owned foreign properties at somewhere between 150,000 and 250,000.

They ranged from condominiums in Chicago to villas in Cape Verde, from Bulgarian flats to penthouses in Poland. Geography was no restriction - properties were purchased in places as diverse as Dubai, Morocco, Hungary, Turkey, India, France, Italy and Portugal.

But as the economic climate has changed, a series of overseas property ventures have come undone. Some developments, like those in Dubai, have failed to materialise. Others have plummeted in value, leaving thousands of investors nursing big losses.

A murky world - that’s how lawyer Tom McGrath described the overseas property business. During the boom years, he provided legal advice for people buying abroad.

Now the market has soured, he is spending much of his time helping clients pick up the pieces.

‘‘People bought into the market, they bought into the flash property shows, the fancy talks, the gushing newspaper articles," said McGrath, a partner with McGrath O’Donnell & Associates in Dublin. ‘‘But at the bottom of it all, there was simply no regulation.

‘‘People were doing things they would never dream of doing if they were investing in Ireland. I know one person who bought an apartment in Bulgaria from the back of a fruit van.

People ran away with themselves," he said.

In the case of Kuvera Ireland, around 250 Irish investors bought into the sales pitch. The company took over a hotel in Dublin 4 on September 15, 2007, to launch plans for two luxury developments in India called Mountain View and Orchard View.

Kieran Murphy, the man behind Kuvera Ireland, spent the day meeting potential customers and introducing them to Dr Ajit Jha, the boss of Kuvera India and his partner on the ground.

The show and the figures must have been impressive -Kuvera raised €8.9million for the apartment scheme in Rudrapur, a special economic zone in north India.

Kuvera Ireland brokered the deal and investors were told that contracts for the building work existed between the investors and a construction company called VG Buildtech.

Between them, Mountain View and Orchard View were to comprise 580 apartments. As of last week, the site consisted of a boundary wall with some small preparatory works. Nothing had been built.

‘‘Two weeks into the project, Kuvera knew there was a problem." said John Plaice, who invested in the scheme and now chairs an action group set up to recover money from Kuvera. ‘‘The problem was very simple. Foreigners could not buy properties there, but they tried to work around it with leaseholds and so on. There were literally problems from day one."

The fall-out from Kuvera ended up in the High Court in Dublin, where an order was obtained freezing Murphy’s assets.

A settlement was eventually reached between Murphy and the investors, under which he agreed to hand over assets.

Under the settlement, the investors were to take possession of properties at a golf resort in South Africa, five British properties and €143,00 0 from a South African bank account.

Murphy’s shares in Kuvera India and equity in VG Buildtech were also to be ceded.

Almost a year on, the transfers of the various assets are close to completion.

However, the Kuvera case shed startling light on how some property deals were structured.

Under the so-called ‘Kuvera reward programme’, investors were promised flights and holidays at five-star hotels if they convinced others to invest in the company’s Indian developments.

‘‘The deal was a good one if it had worked," said Plaice. ‘‘But it did not work, and we are still getting to the bottom of what happened, and why it happened.

Money that should have been in an escrow account was used on sales and marketing.

The whole scheme was based on getting more people involved. The market slowed and no new investors were found. The whole thing became exposed. There was a huge element of trust in the investment.

We were badly let down."

Anthony Joyce, a Dublin solicitor, represented the Kuvera action group and has since spent a lot of his time dealing with disgruntled investors in other property ventures.

‘‘If there is a fraud or a perceived wrongdoing, we can take a legal course of action," according to Joyce. ‘‘But in lots of cases, I simply can’t help people.

The scheme is legitimate, but individuals can’t afford to make the payments. ‘‘But there is a difference.

At least you get the keys if you keep on paying. But there are a lot of cases where you pay your money and you might end up with nothing."

Two weeks ago, Joyce was retained by Irish investors concerned about construction delays at the Kensington Royale development in Dubai Sports City.

The five-star, 18-storey development of 252 units is being developed by Middle East Development in the United Arab Emirates, and was originally due to be completed early last year.

Joyce is also acting for investors who put money into a proposed €100million resort in Cape Verde.

Flash Developments, which is headed by Dublin developer Ciaran Maguire, received deposits from more than 200 Irish and British investors for apartments and villas in the planned Palm View Resort.

Following a 16-month delay in the project getting full planning permission, a number of the investors put together an action group to try to recover their money.

Ten days ago, the investors were stunned when KPMG was appointed as liquidator over Flash.

Maguire said that the development was going ahead, stating that all the ‘‘contracts, development lands and credit lines’’ had been transferred to another company called the Ciaran Maguire Group.

Maguire said that Flash Developments was ‘‘simply a sales and marketing company’’, and its liquidation would not have any effect on the development.

KPMG has initiated a full investigation. ‘‘I have absolute sympathy with a lot of investors," said Joyce.

‘‘They got caught up in genuine investments that went wrong. Many schemes were plausible on paper. They checked out. But they were undone by the market."

Often, the court is the place of last resort.

In recent days, 39 investors launched proceedings against Simple Overseas Properties, an Irish property firm, in relation to deposits which were taken for properties in developments in Morocco and Spain. That case, and others like it, highlighted a major problem, according to experts - a stark lack of regulation.

‘‘Some of it is real Wild West stuff," said Paul McCann, head of specialist advisory services with accountancy firm Grant Thornton.

‘‘There is an assumption that Irish overseas property firms are regulated. Even travel agents are bonded. But it is not the case.

‘‘I think it is now incumbent on the government to introduce regulation, or force companies to be bonded.

Alternatively, the various representative bodies need to start enforcing strict guidelines.

Deposits should not be allowed to be used by developers as cash flow."

The government is understood to be looking at the system, in an effort to introduce some new checks and balances.

But for people like John Plaice, Tony Hynes and the thousands who have seen their investments evaporate, it could well be too late."

Tuesday, June 8, 2010

Hope for Larionovo Investors

The following piece appeared in the Irish Times of Saturday June 5th, written by Una McCaffrey.

"Hundreds of Irish investors who feared they had lost large sums on Dubai properties that were never built will be offered a new completion deal by an Indian company next week.

The investors are being invited to meetings in Dublin, where they will be briefed on proposals to finish construction on the developments, located in the Sports City area of Dubai.

Up to 1,000 Irish investors are thought to have become involved in the Sports City scheme through Irish agent, Larionovo, which went into liquidation at the start of last year.

The matter has largely been in limbo since then, although 150 investors have mobilised through the Dubai Action Group in an effort to recover some of their investment. Each investor has committed tens of thousands of euro to the project, rising to €400,000 in some cases.

Some investors remortgaged their homes to become involved in the project, located in a 50 million sq ft area designed to house a mixture of commercial, residential and sports facilities.

They learned this week that an Indian group had bought out three of the four developments concerned. The Indian company, Smart Investments, wants to finish construction of the properties and is likely to seek further funds from the Irish investors in this respect.

Some investors paid up front in full for the properties, while some paid a portion of the full price. All the purchases were made from plans. All affected investors are being invited to meet Probir Chatterjee, a representative of Smart Investments, next week.

Mr Chatterjee was previously financial controller of Profile Group, which in turn was the parent of Larionovo. He and a fellow Indian businessman have completed a deal to buy the Eagle Heights, Bermuda Views and Profile Residence developments in Sports City. Larionovo controlled a 25 per cent stake in Profile Residence, and Smart is thought to have agreed a sale of that interest with the agent’s Dublin liquidator, Grant Thornton.

The Dubai Action Group is taking advice from Dublin law firm, Anthony Joyce Co, which has become involved in a number of problematic overseas property cases over recent years.

The firm is also looking at options for investors in a separate Sports World development – Kensington Royale – where construction has been slow and further funds are being sought by the developer, MED.

It is thought a substantial number of Irish investors could be involved, having purchased through British agents.

Next week’s meetings are being held at the Carlton Hotel at Dublin airport. Bermuda Views and Eagle Heights investors are invited to attend at 7pm on Tuesday 8th. Profile Residence investors are meeting on Wednesday at 7pm."

The same story featured on today's Arabian Business Website, written by former Sunday Tribune property reporter, now resident in Dubai, Shane McGinley:

"An Indian company will meet with a group of Irish investors in Dublin on Tuesday in a bid to strike a deal to rescue a number of projects in the Dubai Sports City development, Arabian Business has learnt.

Up to 1,000 Irish investors bought properties in Dubai Sports City through the Dublin-based Larionovo overseas property agency, which ran into financial difficulties and went into liquidation in early 2009.

Around 130 investors, who had each invested a minimum of 75,000 Euro ($89,797.99), set up the Dubai Action Group and attempted to recoup their money from Profile Group, the Dubai-based parent company of Larionovo.

Last week, Probir Chatterjee, the former financial controller of Profile Group, and a number of other Indian businessmen, set up the Innovation Group and took over the Profile Group’s Dubai Sports City projects, which include Eagle Heights, Bermuda Views and Profile Residence.

“The original developer… sold or gave his shareholding to this new Indian company because he either cannot or does not want to build out these units,” Tony Hynes, chairman of the Dubai Action Group, told Arabian Business.

Earlier this week, Chatterjee met with British investors in the developments and he has arranged to meet Irish investors in Dublin on Tuesday and Wednesday, in a bid to persuade them to invest the remainder of the money due in order to complete construction of the units.

“A lot of [Irish investors] have paid 65 percent upfront and I imagine [Chatterjee] needs the 35 percent to finance the building out. So I imagine that is what he is doing here, getting a feeler for who is going to close and who isn’t,” Hynes said.

He added that Chatterjee is aiming to get the finance in place to start construction on the units this month and plans to have them completed within eighteen months.

It is estimated that since 2002 up to 5,000 Irish investors pumped money into developments across Dubai, some of which have now run into difficulty since the onset of the global property downturn in 2008.

‘The simple fact is that too many apartments were being built. It was unsustainable. Investors who got in very early did well if they sold. But most didn’t," said Ronan O’Driscoll, director at the Savills agency in Dublin told the Sunday Business Post newspaper in November last year.

In March 2009, John O’Dolan, one of Ireland's leading building developers and owner of the island of Ireland on The World manmade project off the coast of Dubai took his own life amid rumours of financial worries as a result of the global economic crisis."

Friday, June 4, 2010

The Property Show Abroad to Launch

Globaledge has recently revealed that a multi-millionaire former greyhound track owner is to launch a series of overseas property exhibitions in cities around the UK.

Kevin Wilde, who sold his racing track portfolio to betting chain William Hill in 1998 for over £10 million plans to plough a significant chunk of his fortune into bringing overseas property shows back to what he calls the UK’s 'forgotten' cities.

The events will take place in Manchester on 4th and 5th September this year followed by events in Glasgow, Exeter, Birmingham and Harrogate in 2011.

Wilde promises to invest more than £500,000 in marketing the shows and believes he has spotted a part of the market not being covered by other companies:

“Northern cities have been forgotten by UK exhibition companies but the people I speak to are crying out to buy property overseas. The population of Glasgow and Manchester combined is more than a million but there has been very little coverage of these areas by exhibition companies in the last three years”.

So why does Wilde think he can succeed where others have failed?

“I’m under no illusion, I’ve been an overseas property investor for years and it’s a tough market. It’s a question of timing. I’m an entrepreneur and it’s no use launching something in three or four years’ time when the market is booming again and our competitors are there. Our research shows that there are people in these cities who want to buy property now”.

The shows will be branded “The Property Show Abroad” and will use a combination of radio, local and national press and the internet to bring in visitors.

Globaledge says the response from overseas property companies in Spain and France has been postive but questions if it is the time right for a new exhibtion business to target overseas buyers in the UK.

There are, as yet, no plans to run any of the shows in Ireland, where there are currently no overseas property exhibitions in existence following the demise of the last one in 2008, the Sunday Business Post backed and iQuest run Property Expo.

Agents and developers interested in exhibiting at the show should contact Mick Tyler.

Thursday, June 3, 2010

Ciaran Maguire PR Resigns

We've just received the following communication from Paul Allen, who has been Ciaran Maguire's PR for just a few weeks:

"I write to inform you that we have decided to resign our account with the Ciaran Maguire Group.

Should you wish to make contact with Ciaran Maguire directly you can reach him on 087 1473608 / (01) 6251542.

Kind regards,


No reason has yet been given for the resignation but we will publish it here if it is revealed.