When I was working in Dubai recently I enjoyed a privileged position in an office that had relatively close links with the government. Aside from the obvious advantages that arose from having an ear close to the ground my clients were also principal developers so, when approval was given at the highest level to develop, say, more housing, another group of towers, a new seafront, an opera house [yes, really] or a conference centre, we were right there on the front line. Through this association I became, by default, a member of a rather exclusive club; my name found its way onto the limited list of individuals who were offered first choice of many irresistible development investment opportunities. So, my working day would frequently start – after the essential cup of strong coffee that was required to gain some degree of perspective on life in an unreal world – with the discovery of a discreetly delivered and personalised envelope that had appeared on my desk overnight. There was always a degree of secrecy about these invitations; I never saw an envelope arrive although I wondered how someone had got past our security, had no idea who sent it and never really understood why someone thought I might be interested in investing in a new island that would be close enough to Iran for the Revolutionary Guards to hit with brick bats. We were, however, swept up in the euphoria of the economic miracle so I would slip the invitation discretely under my jacket and head off to the restroom to peruse it undisturbed. I think there were one or two others in my office that had been elevated to the same Masonic order but I never found out who and never let it be known that I was also one of the chosen few. Of course, there were suspicious and envious glances from colleagues and a few searching questions but I’m cool under pressure and pretty sure that I never gave away what was happening under cover of my day job.
The pattern of the invitation was always similar; hand-made paper, script and edge embossed in gold, an illustration of an idyllic environment or particularly attractive family group – you’ll have seen it elsewhere; handsome and successful husband, attractive home-making wife and intelligent child, sometimes a dog and nearly always seagulls. Then there was a logo of entwined letters forming a distinctive, iconic symbol and, encompassing the essence of it all – the slogan. I was invited to ‘turn my dreams into lifestyle’ and exhorted to ‘live the reality’ or ‘experience the freedom’ and let ‘vision become living’. No, I never really got that one either but I have to say there were times in that locked restroom cubicle, as I slowly turned the glittering pages and marvelled at the glimpse of Eden that unfolded before me, that I was sorely tempted. I never got beyond that, however, eventually taking to reading the international edition of the Guardian instead.
But a lot were tempted and this is how it worked. An exclusive launch would be in one of the ubiquitous sales centres, plush and adorned with extensive wall displays, digital imagery and designer furniture. The lavish welcome would include liveried waiter service before a cultured presentation team ran through the expensively-produced client packs. These would outline ambiance, investment, yield, likely profit and a few cursory dates to indicate project start and completion. Add to that a fly-through video [accompanied by some appropriate Baroque music] and then the money-shot – the invitation to sign-up for the unique opportunity.
Now, it should be noted that the dates presented would have little or no importance at all and this is a part of the reason for the exclusivity of the invitation. The whole point of this exercise is that you sell your investment as soon as it has increased in value. That might be in three months or even three days, but almost certainly it’s before the project is finished and, more often, before it has even started. So, you commit to a 10% down-payment on, say, a sea view apartment on the 40th floor of a proposed tower and a promise to pay ten stage payments that match progress of the building, which is due to start on site, well, soon. Having seen your cheque cashed with frightening speed you don’t go near the site to look for progress because that will lead to bitter and worrying disappointment. Instead, you go back to your office, get on with your job and await the next envelope to appear on your desk.
You see, the developer won’t even consider starting work until he has commitments on the whole project, all the deposits are in his account and stage-payment contracts are ratified because he’ll need all that in place to convince his bank that he has a viable project and sufficient funds to kick it off.
Back in your office a new envelope has appeared, complete with gold lettering, iconic logo and a slogan that reads ‘where dreams and diversity unite’ or some such nonsense, so it’s off to the restroom. This time the invitation is for the launch of another imposing tower development with even better sea views. While you ponder that and after returning to your desk you get a call from an agent who explains that the value of the contract you signed on the sea view apartment [where they haven’t even started clearing the ground] is now worth, say, 20% more than you committed to and ‘would you be interested to sell?’ Well, you’d be foolish not to, wouldn’t you? And how did the agent know you’d invested? Anyhow, you sell at a profit along with your fellow investors and take a more serious look at the latest invitation. Meanwhile, the developer that you paid the original deposit to finds that the market activity has inflated the value of his project, even though he still hasn’t started it and has spent only consultancy fees. So he speaks to his bank and borrows money against the increased value of his yet-to-be started tower. The profit gives him the capital to invest in a new project so he instructs his team to compose a slogan and get the invitations ready.
In those heady days some projects were sold on three times before they were completed, each time inflating the value of the development. There were also a few little local problems – if you were the second or third purchaser of a sea view apartment you might not know until after you’d bought it that the developer had used the profits from the earlier sales to reclaim land in front of your window and was planning to construct a higher tower than you were going to live in. And other developers never quite managed to sell enough deposits and stage-payment commitments to start their projects, so you were left in a position where the project wasn’t really being progressed but wasn’t cancelled either. Bad enough but if you missed a stage payment you were in breach of contract and meantime the value of your investment was going south very fast.
I’ve been back to have a look at some of these iconic developments, those that were started using the increased value that never really existed. The scale of the waste is eye-watering but is nothing in comparison to the scale of the greed that drove it and I wonder now where the money and the intent will come from to complete them.
I’ve not always liked everything I read in the Guardian but I’m glad I found the contents a more interesting read than the numerous invitations that appeared mysteriously on my desk.