The owner of Lebanon island on Nakheel’s The World development in Dubai has sold it for AED35m (US$9.5m), Arabian Business can reveal.
Wakil Admed Azmi, who bought the island on the artificial archipelago in 2008, sold the 419,161 sqft island on November 18 2012, according to filings on the Dubai Land Department website.
The sale represents a loss of US$6.8m for the Indian entrepreneur, who paid for the island in full four years ago. The cost of the island and the construction work hit AED60m in January 2012, the Indian businessman told Arabian Business in January 2012, just before its official launch.
A spokesperson at Royal Island Beach Club, the exclusive beach resort on the island, confirmed that it has been under new management since November. The new owners are a consortium of investors, she said.
“It’s been operating since last May and its now under new ownership since November,” she said. “The previous owner couldn’t run and maintain it; he did sell it at that point.”
The sale, which was also confirmed by real estate intelligence firm Reidin.com, is one of several transactions on The World in the last year. Two mortgage transactions, for AED35m and AED44m, were recorded in November and May, said Reidin.com.
Announced at the height of Dubai’s real estate bubble, The World epitomised the city’s boom-time ambition and helped launch Nakheel’s reputation for man-made islands.
The project ran aground in the wake of the global financial crisis with almost all of the buyers on the project failing to begin construction. Owners told Arabian Business they have been unable to develop the islands due to lack of vital infrastructure.
Penguin Marine Boat Services, which had the exclusive transport contract to ferry goods and people to the island, lost its appeal against Nakheel in December after a judge in the Dubai World Tribunal failed to release it from an annual licensing fee of AED5m.
Penguin, which was ordered to pay Nakheel AED10m, had argued that the lack of activity on the island made its operations unfeasible.
“What is very obvious is that The World is on hold. No work is going on in the logistics hub. In order to start [work] on the project Nakheel needs to finish the logistics and transportation hubs, which are still not in place,” one owner, who asked not to be named, told Arabian Business.
"Nearly all of the island owners would sell,” he added. “Many owners [want to sell their islands]. Every single one of them because everybody wants a piece of land that they can develop and generate income.
“Even if you have an island that is 100 percent paid [for], you don’t have the infrastructure and the [logistics] hub so you can’t build on it,” he added.
Nakheel has previously said that 70 percent of the 300 manmade islands are sold and that building work is the responsibility of the owners.