'Emaar owes $15m,' say Pakistani investors

Emaar says it will work to reach resolution; Crescent Bay remains a 'key project'

Emaar is the developer behind many of Dubai’s community developments, including Dubai Downtown, Dubai Marina and Arabian Ranches.

Emaar is the developer behind many of Dubai’s community developments, including Dubai Downtown, Dubai Marina and Arabian Ranches.

Emaar Pakistan, a subsidiary of Dubai-based property developer Emaar Properties, is in a dispute with investors who claim they are owed more than $15m after buying off-plan properties in its stalled project in Karachi.

Emaar launched the Crescent Bay mixed-use community in July, 2008, as part of its multi-billion dollar investment into the country.

The 108-acre development was due to be built with the Pakistani Defence Housing Authority (DHA) and completed by 2013-14, featuring high and mid-rise towers for residential and commercial use, a shopping centre and five-star beachfront hotel.

However, construction is still yet to start.

The delay led investors to stop paying instalments on their properties, eventually causing Emaar to cancel their contracts until a Pakistani court issued a stay order on the bookings, preventing them from being cancelled.

About 300 investors claim Emaar, which built the Burj Khalifa, the world’s tallest tower, abandoned the project, making it liable to refund their deposits plus interest at a rate of 12-17 percent, as well as pay 10 percent compensation. The amount claimed totals Rs1.5bn (US$15.2m).

However, Emaar denies it abandoned the development, claiming it was delayed due to the financial downturn and that work will soon commence.

“Following the global financial crisis, the various aspects of the project had to be evaluated and we were in continuous discussions with DHA to finalise them,” Emaar Properties said in a statement to Arabian Business.

“We have now reached an agreement with DHA, and work on Crescent Bay is likely to commence in May, 2013.”

The investors are seeking a court order preventing Emaar from re-launching the project until the dispute is settled.

Emaar Properties said it would work to reach a resolution and Crescent Bay remained a “key project” for the company’s Pakistani arm.

“As per our agreement with DHA, all the original contracts of the customers will be valid, and along with our partners, we will discuss with the investors to achieve an amicable resolution to address their concerns,” the statement says.

“Pakistan is one of the key international markets of Emaar, and we are committed to the projects we have launched in the country.

“We have already handed over homes in our flagship development, Canyon Views in Islamabad, which is now a full-fledged lifestyle community, and highlights our commitment to project delivery.”

Emaar is the developer behind many of Dubai’s community developments, including Dubai Downtown, Dubai Marina and Arabian Ranches.

It was significantly impacted by the 2008-09 crisis that saw property prices plummet up to 60 percent. But it has shown it is making a comeback, last year recording an 18 percent rise in profits to $577m from $2.24bn in revenue.

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Posted by: Memon

it is true that EMAAR has defaulted in Pakistan as iam also one of the Hundreds of Afectees.
We will go to the supreme court and lodge a complaint with all regulatory bodies including national and international Media.
This a a Democratic country with every individual having a right to defend his/her intrest .
Emmar cannot afford to have same attitude towards the investors which they had with the investors in UAE.

Posted by: Shehryar Iqbal

On the contrary I would not invest a penny or a cent in Pakistan being a Pakistani due to the nature of the country and the very people who live there.
A country like Pakistan should be thankful that an already profitable company like EMAAR had the will to invest in a country which is not doing very well for the past half decade.

Posted by: Tehami Latif

Mr. Shehryar, you are right but one slight correction. Please include people like yourself in your disgraceful comments, who live outside Pakistan, are willing to take third class treatment in foreign countries and still belittle their country. Nothing wrong with Pakistan, its the very people who live there and people like yourself who are thankfully not there anymore. Good riddance!

Posted by: Khurram

Not sure where Mr. Sheheyar gets his facts. Property and land has always been in demand due do the size and population of the city.

Posted by: Rameez

Mr. Shehryar - each and every sector in Pakistan is profiting - I am a real estate developer myself and even in the "slow" phase, things are great - please get your facts straight before putting down a whole country in a public forum. Real estate prices are going up and there is great demand for land, apartments and office space.

Posted by: Peter Hudson

Largely as a result of their partners inability to manage the local environment, EMAAR's reputation has been tarnished for no fault theirs.

They would do well to relook at their local partners and take corrective steps to tighten the management and take control of their operations in these two potentially large markets in the Indian sub-continent before they loose all credibility.

Posted by: Kaptain Mirza

Investing with brains is a concept. Investing away from homeland is another, trusting some in homeland to do your work, is just another..!!

When will Pakistanis learn..? No one will just come and set things free - you are being treated as commercially trade-able commodity in international markets..!!

Wake up and Smell the Coffee..!!

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