Beach Access Issue

Letter to Al Hamra Estates, 20/6/2009

Dear Mr Mathew,

Following on from your earlier replies and our telephone conversation on 17th January 2009, we are very keen to continue with our dialogue with Al Hamra Estates (AHE) in order to stay abreast of developments and construction progress. We hope that our earlier request for a regular bi-monthly construction update for RB investors is being given serious consideration by AHE.

We are appreciative that you personally acknowledged the importance of good customer service for AHE, and were encouraged by your refreshing willingness to listen to our concerns regarding the development. We were also pleased with your plans to install cameras on the site to allow investors get some idea of construction progress.

The purchase of our apartment(s) was heavily influenced by assurances in all RB sales and publicity literature that the beach area in front of the RB buildings was to be accessible for the use of RB residents (stated or implied). Investors were clearly led to believe that they were buying into the Al Hamra Village resort package, which included facilities such as beach access, gym, and swimming facilities at no additional cost. Here, for example is what Global Estates (who are selling RB units) have to say on their current website

“It’s not just any beach – it’s your beach. As a resident of The Royal Breeze you’ll be privileged to enjoy access to one of the last remaining private beaches in all of the Emirates. Whether it’s a morning dip, an afternoon sunbathe, or a romantic sunset stroll, you just walk out your gate and there you are. You’re surrounded by miles of ivory-white sand, brushed by balmy breezes from the Arabian Gulf and tempted by its clear, warm waters.

At the Royal Breeze, you will enjoy a private beach on the Arabian Gulf, a links-style championship golf course, private marina, onsite destination shopping mall and an onsite 7-star resort hotel.” http://www.royalbreeze.com/

In various communications, AHE has also confirmed that RB residents will have the use of an extensive and exclusive beach area, though no exact details have been provided to date. Despite many requests for clarification, it is extremely upsetting and worrying to learn that the question of the beach area for the use of Royal Breeze residents remains unresolved. It is our understanding that AHE is considering purchasing a section of the beach in front of the RB buildings for the exclusive use of RB residents; we have also been advised that a section of the beach area at the base of Dana Island may be reserved for RB residents.

Given that beach access (and facilities) is such an essential component of the package and lifestyle we purchased from AHE, and given the uncertainty of the Dana Island project, can you please confirm that a) RB residents will have use of an private beach area, and b) provide details of the location of this dedicated beach area. It is disappointing that whilst many of us have now paid up to 70% of the purchase price and the project is now over three years into the launch, no concrete information on details of the beach area have been provided.

We are, however confident that AHE will not let us down, and fully intends to deliver the promised resort with all the promised facilities, including the beach area for the RB. It seems inconceivable that residents can be denied beach access in after all what a 5 star beach resort. We are heartened by the many positive comments from owners whose Marina apartments have been (or are currently being) handed over. To avoid further investor worry and misunderstanding we request that you confirm the existence of a beach area for RB residents as a matter of urgency.

The Al Hamra Investors Group remains committed to playing it’s part in ensuring the success of the project, and will do all it can to promote the resort. We very much hope we can avoid the need to contact the RAK authorities if the beach area were not to be provided.

There are other questions / points on which we would like more information, and would appreciated any updates on the following:

  • What is the current position of the Dana Island project?
  • A detailed construction progress report on RB, with photos
  • What is the status of proposed webcam on RB site?
  • Is expected completion date for the RB Dec 2009 – Jun 2010 still valid?
  • Please provide further details of standard of finish, fixtures and fittings, maintenance charges, etc
  • What health / fitness facilities (such as sauna and fitness equipment) will be available for the use of RB residents?
  • Please give an update on the entitlement to resident visas (as stated in the original contract)
  • Will RB residents have access to any part of the golf course, and on what basis?
  • Will RB residents be able to avail from the facilities of the Al Hamra Fort hotel? If there is a cost involved, please give details?
  • Please provide further info about the proposed construction of the project by HH Sheikh Saqr bin Mohammad al-Qassimi opposite the Marina development

As always, we would like to re-iterate that we want to maintain constructive dialogue with AHE, and will always work with you to achieve a resort that we can all be proud of, be happy with, and enjoy living at.

Looking forward to your reply.

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Follow Up Letter

To: John Mathew, Manager Corporate Strategy & Development, Al Hamra Estates

Dear Mr Mathew,

Whilst it is reassuring to know that work on RB1 and RB2 has started, we are disappointed with the level of detail in your progress report.  From your statement that the ‘work is in full swing on the structures of RB 1 & 2’, we are still none the wiser – does this mean the walls are going up, or that the foundation been completed, or that level 1 has been reached, etc? We would greatly appreciate a more detailed progress report with photos.

We understand that projects are unavoidably affected by issues around resourcing of materials, workforce shortages, power supply issues, etc.  Our only request is that if there are changes in design, timescales, facilities in the resort, etc. that we be kept fully informed, rather than left wondering what is happening with the development. Many of us who purchased our units over 2 years ago were led to believe that completion would be end of 2008.  During further correspondence with Omar Obeid in Jan 2008 we were told that ‘the expected completion date for the Royal Breeze buildings will be between Dec 2009 and Jun 2010’ by him.  We are now being told that completion may not happen till the end of 2010.

We would also like to remind you that many of us have already paid 60% of the purchase price, with another 10% being due at the end of this month.  We feel that this 60% payment should be more than sufficient to pay for any work on RB1 and RB2 at this early stage of the construction.  Many of us are struggling to make the next payment due to the financial downturn, so would like to repeat our request that 50% (or 40% for those who have already paid 60%) be payable on completion.  We would be grateful if you are able to make a strong representation on our behalf to the General Manager, Romain Felber asking that the payment schedule be revised to these terms.  We hope Al Hamra Estates will look favourably on our request.

One question that we would like answered urgently is that if an investor is unable to make the next payment for the Royal Breeze, what the consequences are, and what understanding / help Al Hamra Estates will offer in such circumstances, given the global financial crisis.

We have many further questions that we would like you to address, such as standard of finish, fixtures and fittings, maintenance charges, etc.  If you are agreeable, we would like to suggest setting up a regular communication with you, perhaps once a month or bimonthly, which would give us the opportunity to ask questions, raise concerns and make suggestions as a group.  Be reassured that we would endeavour to make this communication professional and constructive and avoid generating any bad publicity.

In conclusion, we would be grateful for a more detailed progress report, an agreement to amend the payment schedule as requested, and consideration of our request for a regular communication.

We look forward to your reply.

Group Letter to Al Hamra Estates

To: John Mathew, Manager Corporate Strategy & Development, Al Hamra Estates

Dear Mr Mathew,

First of all we would like to give you and all staff at Al Hamra Estates our best wishes for the New Year.

We, as investors in Al Hamra Village are aware that the next payment for Royal Breeze owners is due very soon. As you know, the current global economic downturn is affecting all of us, including the UAE property market which has not escaped the effects of the recession.

Many big property companies are taking positive steps of supporting investors such as offering flexible or extended payment plans. For example, in an article in GulfNews [14 Nov 2008] Peter Penhall, CEO of Gowealthy said, “Since there is a liquidity shortage and banks are reducing mortgages, it is important to offer flexible payment terms to end-users so that they are not forced to seek bank loans or mortgage finance.” Your attention is also drawn to another article in TheNational [30 Oct 2008] where Sharjeel Hassan Vijdani, vice president at Habib Bank AG Zurich, said the market situation called for a policy change by developers. “I would not be surprised if Emaar and others come up with soft payment plans. The market conditions dictate that”, he said.

We would appeal to you that Al Hamra Estates delay the imminent payment deadline for Royal Breeze owners from January 2009 by at least 6 months. We would also request that only 50% of the payment should be required as staged payment (or 60% who have already paid this amount), with the balance being due on handover of the unit. This would be entirely appropriate in light of the fact that construction progress of phase 3 has stalled and very little construction (apart from piling for building 1, 2 and 3) has taken place over the last 2 years.

We would also like to remind you that the vast majority of investors remain unhappy with the level of customer care and lack of communication to investors afforded by Al Hamra Estates. Why should we have to rely on fellow investors who have been fortunate to visit the project site for updates? And why indeed should we have to discuss the progress of Al Hamra based on rumours?

In a recent article in TheNational [8 Sep 2008]) Alexander McNabb, a group account director at ‘Spot On Public Relations’ highlighted the importance of online communication between investors and developers. “Most people online will appreciate the dialogue rather than silence. And if you’ve got unhappy customers, how long can you afford to simply ignore them?” he said.

We would strongly urge that Al Hamra Estates make communication and progress reporting to customers one of the highest priorities in 2009. Also be aware that are a number of websites where investors are speculating on progress and venting their frustration because they have received little or no official updates as to what is happening, here are a few:

http://www.eyeonworldwide.com
http://alhamragazette.com
http://alhamragroup.blogspot.com

It is our hope that you will make it a policy to provide regular and detailed construction progress reports to keep us informed of progress or delays. It is our understanding that both the alhamragroup.blogspot.com and the alhamragazette.com have written to you on this matter in the past, and that you have ignored their communication. It is also our understanding that there are a number of petitions in progress designed to press Al Hamra Estates for better communication and customer service.

We the investors are as keen to avoid speculation or negative comments, as we’re sure you are. We hope you will take note of our comments and concerns, and will provide a quick reply on the matter of deferring payment and on the issue of customer service. Please be advised that we are prepared to take up our case with HH Sheikh Saud Bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah.

Looking forward to your reply.

Signed by a group of investors