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Gulf developers apologise and offer new contracts for real estate investors

The fact that RAK Properties, founded by the government of Ras Al Khaimah, made no sales in the first quarter of this year is regarded as a sign of just how deep the property crisis is becoming.

Meanwhile the boss of one of the biggest developers in Abu Dhabi has apologised to investors amid mounting anger about price hikes at its flagship project.

'In general property buying has come to a halt and we did not achieve any sales during the first three months of 2009,' RAK revealed in a statement. It also confirmed 38.5% fall in first quarter profits.

It has now appointed a business consultant to review its current operations and to come up with a future business plan. 'Currently our funds are channelled towards project completions and we will take up further expansion after reviewing recommendations expected out of the business strategy review and revision study,' the company added.

Tameer has begun re-evaluating some of its projects in the light of the slowdown. Ghassan Sakhnini, President and CEO of Tameer, said there will be changes to contracts and also offers to help investors reduce or balance their costs.

Completing projects that are already under construction will also be a priority for Dubai based Nakheel. 'The immediate priority for Nakheel in 2009 and 2010 is to ensure the completion of projects under construction and to deliver high quality finished products,' the company said in a statement.

Hydra has hired a dedicated team to deal with issues arising from the property slowdown. In particular investors have voiced concerns about payments not being in line with construction.

Now CEO Dr Sulaiman Al Fahim has issued an apology. 'We are trying to resolve issues. If there are specific cases where you cannot meet the payment because of the penalties or other reasons, I can tell you we will examine every case on an individual basis,' he said.

'It is clear that the communication has not been adequate. These projects were launched during the boom. We have hired a dedicated team to deal with these issues but let me take this opportunity to personally apologise to all Hydra investors who have had poor customer service,' he added.

One example is new contracts for Hydra Village where new contracts will be for 2.5% to be paid every two months until the project is completed in 2011 compared with the previous plan that required 10% to be paid every three months.