Company behind troubled real estate project says agreement, new investment is 'turning point'
The company behind the troubled Dubai Lagoon project said on Wednesday that it has secured AED339m ($92.2m) to enable the much delayed scheme to be completed.
Schön Properties described the deal as a "turning point" for the development which has been dogged by delays for years.
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.
On Wednesday, the developer said it has signed an agreement with Xanadu Real Estate Development to complete the project and has subsequently awarded a AED678m construction contract to PGS Gulf Contracting Company.
Danial H Schon, vice president of Schon Properties, said: "This is a turning point for Dubai Lagoon project and we are pleased to tie-up with Xanadu Real Estate Development to complete construction of the project.
"The funds are being utilised for the completion of Dubai Lagoon project, which also includes the Juma Masjid located within the residential project. Schon-Xanadu have instructed PGS Gulf Contracting to enhance the finishing of the project by including the highest quality items.
"Given its location and quality construction, Dubai Lagoon is poised to be one of the best master development communities in Dubai."
Speaking on behalf of Xanadu Real Estate Development, Adel A AlBreiki, managing director, said: "Xanadu is one of the few developers to have consistently delivered projects through the downturn of the real estate market.
"The prospects of the location are excellent, with the EXPO site in close proximity and huge appreciation can be expected in coming years. We are excited to partner with Schon Properties to deliver this project."
PGS Gulf Contracting Company said work was slated to complete in December 2016 with mobilisation works already starting on site.