Investors in Dubai’s stalled Palm Springs project have reached a deal with developer Damac for a full, upfront refund on payments made for their uncompleted properties.
Buyers on the Palm Jebel Ali project, who have waited eight years for construction to begin, were previously offered a 70 percent refund of their deposits, or 25 percent immediately followed by a further 25 percent annually for the next three years
Of the 48 investors involved, 21 have received payment, and a further 27 are expected to receive their cheques in the next two weeks.
“We received cheques for almost half of the investors. The cheques for the other half are in the process of being arranged,” said Fareya Azfar, partner and head of arbitration at The Legal Group (TLG), who advised the investors.
“The group of investors believed that a partial refund was not a fair compensation, so they wanted us to negotiate with Damac in the hopes of reaching a more acceptable settlement.”
Investors had initially hoped to receive compensation for their lost investment, but settled out of court with the developer in a bid to avoid a lengthy legal battle, said Azfar.
“The investors are pretty satisfied. They were told that we don’t know of any developer in UAE who gave a 100 percent refund in one payment without a court case initiated against them.”
Announced during Dubai’s real estate boom, Palm Springs was designed to be a 25-storey beachfront development located on Nakheel’s Palm Jebel Ali island, but stalled in the wake of the emirate’s real estate crash.
Damac had attempted to cancel the project in 2008, but the move was fought by investors through meetings in the UK and Dubai, and the threat of legal action.
Damac later agreed to reinstate the development, and wrote to investors last year to say it was in discussions with Nakheel, and a decision on Palm Springs would be made in December.
In a statement to Arabian Business, Niall McLoughlin, senior vice president of corporate communications at Damac, said the company had been committed to solving the dispute.
“We are happy that we can now bring closure to this issue,” he said.