By Staff writer
Correspondence highlighted the uncertainly and negative impact the delay in delivering the project has had on the group
A letter signed by 74 investors in Nakheel’s Palm Jebel Ali project has been sent to the office of Dubai ruler, Sheikh Mohammed bin Rashid Al Maktoum, highlighting the uncertainly and negative impact the delay in delivering the project has had on the group.
The letter, addressed to His Excellency Mohammed Al Shaibani, chief executive of Dubai Investment Corporation and director general of The Ruler’s Court, was also forwarded to management at Nakheel, the master developer behind the project.
“We purchased our homes on the Palm Jebel Ali between 2003 and 2008 because we are excited to be part of this world class development… Since 2003, we have all paid between 30 percent and 50 percent of the price of our homes to Nakheel and many of us have paid far more than this via the secondary market,” the letter, which was seen by Arabian Business, stated.
“The lack of certainty as to when our homes will be built has caused, and is causing, tremendous financial and emotional suffering for us and our families and many of us continue to endure on-going mortgage and rental costs whilst we are waiting. Many of us have invested our life savings into the Palm Jebel Ali,” it added.
Construction on Palm Jebel Ali began in 2002 and it was due to be 50 percent bigger than Palm Jumeirah, the first of three palm-shaped manmade islands off the Dubai coast and the only one currently occupied.
It was due to include six marinas, a water theme park, a boardwalk and homes built on stilts above the water. Work stalled in mid-2008 as the Dubai property crisis took hold as nearly half of projects were cancelled or delayed and prices fell by around 60 percent.
In 2011, developer Nakheel confirmed it had begun offering refunds to investors. Buyers on the project, where five and six-bedroom villas sold for around AED16 million ($4.35 million) at their peak, were given the option of credit swaps or receiving a refund.
“Long-term project customers are invited to swap their funds into available inventory or consolidate their funds. A long-term refund option is also available as part of the overall Nakheel restructuring,” a Nakheel spokesperson told Arabian Business.
Investors were reportedly being invited to swap their funds to units in Palm Jumeirah, receive a credit note to be offset against an alternative Nakheel project, or a full refund in 2015.
Last year, Nakheel chairman Ali Rashid Lootah reportedly pledged that the Palm Jebel Ali project will be built – but not in the short term.
In an interview with Arabic daily Al Ittihad, Lootah ruled out dropping the project and said the company was committed to completing all of its announced projects on a schedule that responds to market needs.
Nakheel announced in October a net profit of AED2.60 billion for the first nine months of 2014 - higher than the company's profit for the whole of 2013.
It also represented an increase of 47 percent on a profit of AED1.77 billion in the same period last year.
During the nine months ending September 30, Nakheel added that it handed over 956 units to customers.
Nakheel's current portfolio of developments in Dubai includes Palm Jumeirah, The World, Deira Islands, Jumeirah Islands, Jumeirah Village, Jumeirah Park, Jumeirah Heights, The Gardens, Discovery Gardens, Al Furjan, Warsan Village, International City and Villas at Nad Al Sheba.
Together, these span more than 14,000 hectares and provide homes for over 200,000 people. Retail developments include Dragon Mart, Ibn Battuta Mall, Nakheel Mall and Hotel, The Pointe at Palm Jumeirah, Deira Islands Mall, Jumeirah Village Triangle Mall and a growing number of neighbourhood malls. Nakheel is also developing hotels at Palm Jumeirah, Deira Islands, Ibn Battuta and Dragon Mart.
* Nakheel no longer responds to media enquiries from Arabian Business, nor does it grant Arabian Business access to any of its media events or announcements.real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
I am one of the owner and nobody asked me to sign any letters.I am glad to hear this and hope this project will be build as financial market and Nakheels position is getting better.Also, I hope some will come out of this letter.
This really is a very sorry state of affairs for those concerned and they have the unequivocal right to correspond with the highest authority to secure what they paid for in the first instance IN GOOD FAITH.
The investors dilemma represents a growing stain on Dubai's reputation as a respectable property investment destination. This breach of good practice at the very least demands a full and transparent response.
What about Dubai Lagoon project / The Avalon Residences in DIP BY SCHON PROPERTIES .
the name has been changed to Avalon from Dubai lagoon !
it's been 8 years we are waiting for our apartments
Nakheel continues to have a very bad reputation in the market. Anyone we talk to doesn't have a good impression about Nakheel and the way they deal with the issues.
It's not nice to keep such people on the edge who have invested millions with them.
Readers, please help us by sharing this article with property owners in Dubai and friends. We want this article to gain momentum and hopefully push Nakheel and relevant authorities to take action.
Nakheel never offered any Palm Jumeirah swap nor offered refund. They only offered credit note to buy into their price inflated projects or wait till 2015 for refund with no interest.
You do not invest in 2003-2004 in a project and pay 30-50 percent only to get your money back 10 years latter with no compensation. This does not happen anywhere but in Dubai.
Investors should sit tight anf get what they were promised.
What is the latest on this? Will it be ready in time for Expo 2020? Surely with DWC coming online by 2024 it is time to revive this?
The idea that this project is anywhere near a viable completion, even in the next two decades, shows EXTREME stupidity or, at best, naivety.
First the vast area around and leading up to it needs to become relevant, bustling and busy. It is mostly desert, industrial and wasteland.
Then infrastructure needs to be committed to these communities, businesses and life. That is 100's of millions of dollars of infrastructure, if not billions!
If the AREA develops well (as happened in Jumeirah) so too will Palm Jebel Ali start to become viable. Increasing land values surrounding the island will kick this off.
The Palm Jebel Ali will launch again in time, sure, in the context of the above AND it will be an off plan hero (again) for a decade or so.
Will we be around to see it actually lived on? I'll be old or dead by the time anyone moves in.
Bite the bullet and move on.