Nakheel slaps Palm Jumeirah guests with 60% fees hike

CITYSCAPE 2012: Residents furious over beach club fees rise to AED80 per day

Debt-ridden Dubai developer Nakheel has hit residents with a 60 percent rise in fees to bring guests to beach clubs at its Palm Jumeirah Shoreline development.

Debt-ridden Dubai developer Nakheel has hit residents with a 60 percent rise in fees to bring guests to beach clubs at its Palm Jumeirah Shoreline development.

Debt-ridden Dubai developer Nakheel has hit residents with a 60 percent rise in fees to bring guests to beach clubs at its Palm Jumeirah Shoreline development, it was revealed on Tuesday.

On the opening day of the Cityscape Global real estate event in Dubai, residents and tenants at Shoreline - the residential development already the subject of an ongoing dispute over service charges - were informed that guest fees had increased from AED50 to AED80 (US$21.77) effective October 1.

The notice to residents added that the fee was “inclusive of sun lounger and towel… [while] security deposit for towel still applies”.

Previously guests had the option to purchase sun loungers for AED25 and towels for AED5. Under the new scheme, they are effectively forced to pay for both.

The move was met with harsh criticism from residents. One told Arabian Business while on the way to Cityscape Global on Tuesday: “I’m so angry… This is a kick in the teeth for residents who bought into the glossy pictures in the brochures.”

A British tenant who currently has guests visiting from the UK complained: “This means we may have to resort to using the public beaches like everyone else.”

The move is the latest revelation in an ongoing dispute with residents on the artificial island development, with some real estate agents claiming tenants were shunning apartments on the palm-shaped development as the row over fees rumbles on.

Master developer Nakheel’s long running battle with its customers on the Palm Jumeirah started last December, when it banned more than 1,300 residents from using the beaches and gyms at its Shoreline Apartments residences and claimed it was owed US$20m in unpaid service charges.

The row escalated when Nakheel drained all six swimming pools at another development, its prestigious Marina Residences towers after it was revealed over US$4m in service charges remained unpaid.

While Nakheel soon refilling the pools, real estate agents said the ongoing negative publicity has meant renters are now shunning its developments on the Palm and some existing tenants are demanding a rebate on their rent or are seeking to relocate.

“The articles written recently about the problems of service charges or lack of payments to properties on the Palm are, I am sure, having a negative effect,” said Mario Volpi, head of residential sales and leasing at Cluttons said in June.

Patricia Fernandes, assistant manager of residential sales and leasing at Better Homes, echoed this sentiment and said tenants were now “being extremely cautious” about renewing leases on the Palm.

“It’s been noticed that quite a few tenants who have been renting on the Palm for a while now are extremely frustrated and no longer wish to renew their leases, or are looking to break their lease for the obvious reasons of limited or no access to on-site amenities," she said.

Agents have warned that the ongoing negative publicity might have a negative impact on Nakheel’s reputation.

Nakheel, Dubai’s biggest developer by assets, was hit hard by the global economic downturn, which saw property prices in the emirate decline by more than 65 percent from their 2008 peak.

The slump forced Nakheel to write down the value of its real estate by US$21bn and prompted a bailout from the Dubai government.

The firm's decision to ban residents from using its facilities has been heavily criticised earlier this year by UAE business leader Khalaf Al Habtoor, chairman of Al Habtoor Group.

“It was 100 percent [damaging] and unacceptable. If I am buying a house and using the beach and later told I have to pay for the beach, this is abnormal. This is damaging the reputation of my country,” he said.

“I am 100 percent sure that the higher authorities were not aware of such a thing because they would not have accepted it…. They would never have [agreed to] it but some people try to show they are making money for the government - they are damaging its reputation 2m times [over] for a few dirhams,” Al Habtoor added.

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Posted by: deborah wright

Nakheel could learn much from the success of Emaar Properties which is built on their constant efforts to enhance the experience of the residents in their communities. Emaar and Nakheel may have started the property race together but Emaar are streets ahead. They understand the value of building relationships. It?s not rocket science.

Posted by: Ala

I totally agree with Nakheel on this issue.
It is about time those guests are paying these reasonable fees .
It is long time overdue.
This hopefully will generate more income and help to maintain and improve the wonderful Palm Jumeirah.
On this one Nakheel I applaud you.
On the other issues like excessive service charges imposed on owners ,I feel Nakheel needs to be reasonable and transparent and to work together with owners to creat this wonderful and true the eight wonder of the world.
I am one of the owners of Shoreline

Posted by: STE

I see you are most likely not living on the Palm.
I do agree that Nakheel should get their money but the way they are doing it is not acceptable. Nakheel seems to have a problem in how they have done business in the past since they have to resort to this and I can only imagine they have no record of what they sold and who they sold it to othere wise they could just take them to court and I am sure they would win every single case against the landlords.

Posted by: Glen

Times are tough, Nakheel will do anything to make an extra few $

Their "Keep death of the roads" program by driving in the malls puts shoppers at risk, but who cares it brings in the bucks.

On more than one occasion I have seen children narrowly missed by these speeding golf buggies and more recently one nearly run over by the new addition, a train in the mall.

Posted by: Thamir Ghaslan

Not passing judgement on Nakheel or the tenants but if I'm upset with any company for any reason I'd take my cash somewhere else where there are plenty of competitors.

Posted by: GHH

Unfortunately I'm a resident of Palm Jumeirah Shoreline Apartments. It's not so much the individual increase here, but the complete lack of any desire by Nakheel to treat residents in a reasonable manner or to consult them on how both sides could benefit from changes. They almost seem to enjoy the act of winning fights and defeating their residents and saying things like "if you dont like it, go somewhere else we will just find new residents". The arrogance behind such an attitude will eventually lead to Nakheel's downfall. But sadly this does billions of dirhims of damage to Dubai's reputation worldwide.

I wish I have gone for a non-Nakheel property and I am trying to get out of this horrible situation with dealing with Nakheel all the time.

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