Schon Properties says work on Zone 1 is almost finished; handover expected in second half of this year
The company behind the troubled Dubai Lagoon project in Dubai Investment Park expects the entire development to be completed by 2016.
And Schon Properties has revealed work on Zone 1 is almost finished and handover is scheduled for the second half of 2014.
A spokesperson told Construction Week Online: “We have finalised funding for the project and the project will be built on a funding and off-plan sales model.
“After the previous [property] crash, we will not rely solely on off-plan sales going forward to build the development, and have arranged partial funding for completion of the project.”
Dubai Lagoon, which spans seven zones across a 5.7m sq ft site, was among dozens of real estate projects in Dubai impacted by funding issues following the collapse of the Emirate’s property market in 2008.
The resort, which was meant to house the region’s first crystalline lagoon, suffered delays after hundreds of the project's investors defaulted on their payments in the wake of the financial crisis.
Units which were originally marketed for sale under a five-or seven-year payment plan were also no longer feasible for many investors following the downturn, creating a negative feeling among buyers.
The spokesperson said: “There were many factors for the delay of the Dubai Lagoon project, despite our best efforts to avoid them.
“The project was launched on January 2006, but a hold on the building permit was issued on March 2006 because of the Road and Transport Authority’s Purple Line of the Metro being incorporated in master plan.
“After the new affection plan, given by Dubai Municipality and a new building permit was awarded in November 2007, the real estate market crashed in October 2008, decreasing sales by 98% and decreasing collections by 95 percent.”
However, the spokesperson confirmed that funding was in place in order to push through the completion of the masterplan.
“Nearly 97 percent of our investors have continued with us,” they said.
“We have faced 3 percent default from purchasers who had purchased at high prices.
“We have offered investors discounts of up to 40 percent on outstanding invoices through the downturn and co-operated with existing buyers by shifting them to earlier completion zones.”
The company will soon be disclosing details on funding ventures and new tie-ups.