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The artificial islands in Dubai, UAE, where major residential and commercial infrastructure will be constructed are the Palm Islands. These islands are the biggest land reclamation project in the world and will ultimately become the world’s largest man-made islands. Nakheel Properties, a property developer in the UAE, are constructing these islands, and they have hired the Dutch marine and dredging contractor, Van OOrd, one of the specialists in land reclamation. These islands are the Palm Jebel Ali, the Palm Jumeirah and the Palm Deira.

Sheikh Mohammed bin Rashid Al Maktoum commissioned the islands so as to increase tourism in Dubai. Every settlement is supposed to be in the shape of a palm tree, which is topped by a crescent, and will have quite a number of entertainment, leisure and residential centers. The Palm Islands are situated in the Persian Gulf off the coast of UAE and will add about 520 km of beaches to Dubai city.

Jumeirah Palm Island in Dubai is one of the most grand Real Estate developments in the world, said to be the eighth wonder of the world because it can be seen from space with another very important landmark, which is The Great Wall of China.

The Palm Island Jumeirah is the first of the three Palm Island Dubai projects and it began handover to owners in November 2006. Owners are making the most of their investments by giving this wonderful accommodation and location to is to manage their properties. Shoreline Apartments on the Palm, which is fully furnished to suit the customers is offered by Dubaishortstay.com. These Shoreline Apartments are completed to a high level of design and are located in a quiet area with their own beach in front looking over the 7 Star Burj Al Arab hotel. All the Shoreline Apartments have direct access to the beach. The Beach Clubs offer gym facilities, internet facilities, nice pool areas which look over the beach, and also café facilities. Restaurant facilities will also be available in the beach clubs very soon.

The Palm Jumeirah is close to all the facilities - all the hotels are situated very close to The Palm and so are the shopping malls, ski resort, supermarkets, ice cafes and other facilities. This is a prime location for visitors to go see when in Dubai.

Long-term rentals and short-term rentals will help you to capitalize on one of the most sought-after landmarks on earth and it will also be one of the tourist destinations of the world.

The Palm Jebel Ali’s construction was started in October 2002 and it is expected that it will be completed in the middle of 2008. It is expected to accommodate 1.7 million people by 2020. it will be encircled by the Dubai Waterfront once it is completed. This project is 50% bigger than the Palm Jumeirah and will include six marinas, ‘Sea Village’, a water theme park, homes built on stilts above the water and boardwalks will encircle the ‘fronds’ of the ;palm’ which will spell out an Arabic poem by Sheikh Mohammed bin Rashid Al Maktoum

Take wisdom from the wise
It takes a man of vision to write on water
Not everyone who rides a horse is a jockey

The first such duo is Warsaw and Lodz who share a mirror image with London and Birmingham respectively. Where London boomed in the seventies and eighties Birmingham struggled, its industrial heart out-competed by a global economy. Old factories lay dormant and the property market stagnated … until lofts became fashionable and London became just too expensive for many individuals and businesses.

In comparison Warsaw boomed from the late nineties onwards and its property prices soared. Banks, businesses, law firms and consultancies are all making this city their epicentre for central European operations. Since the millennium the airport has been one non-stop building site as it tries to keep up with rising demand. In the meantime Lodz went into recession and saw large scale decline to its identity as a manufacturing base.

But, like Birmingham, things have started to change. Warsaw is becoming expensive and Lodz is only 100 kilometres away yet its real estate is half the price of the capital. And like Birmingham transforming 19th century industrial buildings has become viable. A derelict brewery has become a shopping centre, a disused cotton factory converted into apartments.

Perhaps one of the reasons for the similarity between Lodz and Birmingham is down to the people. Both are proud of their home town, both are keen to show visitors "the real city", both have lived through hard times in living memory. Lodz is still cheap, but probably not for much longer.

The next pair has to be Krakow and Katowice, uncanny in their relation with Edinburgh and Glasgow. Edinburgh has always been easy for tourists to understand, the architecture instantly likeable and its well-to-do image centuries old. Glasgow on the other hand was the ugly sister. A powerhouse of the industrial revolution with the pollution and poverty that went with it.

Today Glasgow has more art galleries and museums per square mile than any other metropolis in Britain. It has been European City of Culture and European City of Architecture. Its music and theatre scene is breathtaking. While Edinburgh is historic, Glasgow is diverse.

Krakow, like Edinburgh, is instantly tourist friendly with its vast old town. It is understandable why real estate prices catapulted here. According to the Royal Society of Chartered Surveyors they actually rose faster in Krakow than any other European city between 2005 and 2006. Today there are plenty of trendy bars and shops but, to steal a Scottish phrase, "all different but the same".

Krakow is a historical city and while this has brought much wealth it could now become a restraint. All too often there is a mentality in the air that anything new should fit the old. There is a quiet resting on laurels, Why do you need to try when your town centre is stunning? So true for Krakow and so true for Edinburgh.

Head west up the motorway from Edinburgh and you will find Glasgow, do the same from Krakow and you will find Katowice. As with Glasgow the manufacturing base in Katowice disappeared, albeit in the nineties. The demise of the pollution producing commerce bought poverty but since the turn of the millennium it has been quietly reinventing itself. Unlike Krakow, and just like Glasgow, it has no stereotyping chains. It can be anything it wants, it can be more diverse and more interesting than Krakow.

Once again it is clear that the people often make a town. In Glasgow you are first a Glaswegian, then you are Scottish and then (perhaps) you are British. In Katowice first you are ‘from the Slaskie’, then you are Polish. 1,400 miles apart two populations share the same fierce pride over their identity and the same historic routes as urban areas of heavy industry not far from somewhere much prettier.

On a final note of similarity most British people still think Glasgow is not worth a visit, and most Poles would say the same of Katowice. Old images run deep in every country.

The last two pairs are London and Norwich and their counterparts Warsaw and Lublin. Norwich is a sleepy, rural city with a glorious old town and a buzzing student population 115 miles from London. Lublin is a carbon copy 101 miles from Warsaw.

Property price rises in Norwich were not caused so much by the indigenous population but by rich retirees to begin with and then later because, due to better trains, the city fell within the commuter belt of London.

A better lifestyle, more countryside, a beautiful centre and a slower pace of life all attracted people out of the capital to the Norfolk Broads and so it could be for Lublin. But Lublin could go even further. The coming of a new international airport and the government’s plans to use EU funds as a lever for promoting this area as a tourist destination means it holds far more Eastern promise over the next decade.

Three cities - Lodz, Katowice and Lublin. They are the Birmingham, the Glasgow and the Norwich of the past. In ten years time it will all be rather obvious but today the history of a few British towns actually provides the elusive crystal ball so many property investors hanker after.

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Average Property Price Rises - 2002 to 2007
Birmingham 95%
Glasgow 127%
Norwich 88%
Source: UK Land Registry and Registers of Scotland
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Operative provisions of the judgement:

A vendor of investment property with a rent pool has to state all costs and risks likely to be incurred by the investor.

Background:

The vendor buys and renovates apartment blocks to divide them into condos and sell those individually. An investor (the plaintiff) bought such a property and joined the rent pool. He demands the contract to be reverted and the purchase price plus damage to be paid back. He claims incomplete and wrong information in the sales process.

Ruling:

The vendor is in violation of providing the required information if claiming to positive expectations with regard to the return on the investment. This applies when the investor joins the rent pool at the recommendation of the vendor. The risk of repairs and vacancy in other apartments has to be quantified and shown in the calculations and not only mentioned on the side.

While advising on property as an investment the expected cost is a key figure in the calculation. It has to demonstrate that the vendor not only is in the position to buy the property but also to maintain it. The investor can assume that the vendor has included all risks in the calculation. Vacancies or repairs at a normal scale should not immediately reduce the yield promised at the purchase.

BGH ruling 30.11.2007, V ZR 284/06

Comment:

As a reaction many vendors working with such a system have tried to solve the problem by providing a guarantee. The intention is to picture a higher value than the actual value at the time of the offer and thus demanding a price higher than the current actual value. Here are some questions to ask when considering such a purchase:

Rent pool: Demand to see the actual rent of your apartment and find out whether you are subsidizing less valuable apartments or you are given a higher rent than your apartment actually earns and you pay the difference that you receive over time out of your over priced purchase price.

Repairs guarantee: What is the actual state of the investment apartment you are buying? Do not buy based on a viewing of a renovated apartment with the promise that this is how your apartment will be at some point in the future. Why not bring it up to standard and sell it then?

Management cost guarantee: How much does a management cost guarantee help if you are not satisfied with the performance of the property management? Does it cover the cost of a management that you prefer?

What happens to the guarantee when the vendor goes out of business? Bank guarantees are usually offered but they only make up a fraction of the total obligations.

These guarantees deflect that you are investing in a property with an inherent set of risks. The approach to try to talk away these risks is deliberately misleading. If you are not comfortable with property investment choose a different type of investment. If you want a property investment with all its great opportunities and some risks than make sure you have all the true information and not pay above the market for some questionable guarantees.

As a side line let me mention that some of these constructions will be scrutinized for tax reasons. It might be seen as not being a property investment with implications for write off privileges and long term capital gains.

Recommendation

Do not let guarantees deflect you from inspecting all aspects of the apartment you are actually buying!