Delayed development impacted by collapse of property market in 2008
Dubai Land Department is to oversee the development of the troubled Dubai Lagoon project, which will be broken up into seven phases, according to a report in The National newspaper.
Dubai Lagoon, which spans seven zones across a 5.7m square foot 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.
Last month, the company behind the project - Schön Properties – announced that they had secured AED339m ($92.2m) to enable the much delayed scheme to be completed.
Speaking to The National, Dubai’s Land Department said it would be monitoring the project’s progress.
“The trust account department is working on dividing the project into seven phases,” Essa Al Mansoori, director of the Land Department’s real estate trust account development division told the Abu Dhabi newspaper.
“Each phase will have its standalone trust account, finance and budget. Upon completion of dividing the project into phases this month and finalising the trust accounts for each stage, we will visit the project and raise a technical report showing the progress of each phase and the time required for construction and delivery.”
Al Mansoori said there were many options available to them if the project did not meet the stipulations.
“The Real Estate Regulatory Agency will be taking the necessary legal action and it will assign another investor to complete the project through the Tanmia initiative – one of the Real Estate Investment Management and Promotion Centre’s initiatives – or cancel and send the project to the liquidation committee at Dubai courts,” Al Mansoori was quoted as saying.
Last month Schön Properties said it had signed an agreement with Xanadu Real Estate Development to complete the project and had awarded a AED678m construction contract to PGS Gulf Contracting Company.
PGS Gulf Contracting Company said work was slated to be completed in December 2016 with mobilisation works already starting on site.