Dubai: The stands put up by some of the biggest real estate companies in Dubai at the Cityscape Jeddah event earlier in the week were shut down by officials from the Saudi Department of Trade and Commerce. This was ostensibly because the developers were “directly” selling off-plan properties from their Dubai projects, according to sources present there.

“On the first day, the Saudi authorities sent out officials in plainclothes to determine whether any of the developers were selling … they could not find any instance of that,” said the industry source. “On the second day, they came in officially and ordered the closure of the biggest Dubai-based developer’s stand. Official notices were put up there in front of everybody and it was humiliating.

“The Saudi authorities had a clause — imposed for the first time at this year’s event — that one cannot ‘promote’ off-plan properties without prior approval from them.

“The shutdowns were repeated with all the other Dubai developer stands and the message they kept saying was that off-plan sales should not be conducted. But there were no sales being done … all of us were only marketing the projects as is the case with any industry event, B2B or B2C.”

A statement issued by the organiser of Cityscape Jeddah read: “We can confirm that a small number of GCC based exhibitors received a request from the Ministry of Commerce and Industry to close their exhibition stand during the recent Jeddah Urban Development and Real Estate Investment Event — Cityscape Jeddah. “Despite this unfortunate incident, Cityscape Jeddah witnessed a highly successful edition with a 10 per cent growth in visitor numbers. The Saudi organisers are working closely with authorities in an attempt to understand the rationale behind this unexpected and unprecedented request.”

At any Cityscape event, the rules are clear cut … no developer or any exhibitor can engage in direct sales at the venue/stand. All they can do is showcase their roster of developments and properties to potential buyers, but should stop well short of sealing the deal through any transaction, token or otherwise. At Cityscape Global (and its predecessor event Cityscape Dubai) events in Dubai, the authorities would mount surprise checks to see the rules were being violated. In the past, there have been the isolated shutdowns, but not on the lines of what was seen in Jeddah.

“It’s the first time that something like this is happening at Cityscape Jeddah which has been running for the past six years or so,” said another source.

Financial losses

“The worst part — you could say the injury on top of the insult — is having the Saudi authorities impose stiff fines — SR100,000 — though there is no way they can follow up on that because most Dubai exhibitors do not have direct representation in Saudi Arabia. It was as if the Saudi authorities wanted only their own developers to have the field to themselves.”

Some of the affected exhibitors said they were waiting for a response from the event organisers. After the shut downs, they have suffered financial losses through paying participation fees, mounting massive and impressive stands, and for the expenses incurred by having people flying and staying over the course of the event.

“It was an arbitrary move by the Saudi authorities and there was nothing anyone could have under the circumstances,” said an official with a developer. “We are talking to the organisers and will take the next steps after they respond formally.

“Some sort of compensation needs to be made.”