Damac Properties appears poised to formally announce the reversal of its decision to axe the Palm Springs project, according to investors.
Investors have said they stand to lose million of dirhams after the Dubai-based developer cancelled the 25-storey beachfront development last month on the Palm Jebel Ali, offering compensation below current market value.
The saga has been widely reported in the international media, creating bad publicity for Damac in key markets it is looking to attract investment from, such as the UK.
Investors said they received calls earlier this week from Damac informing them the Palm Springs project is to be re-instated, according to a statement on the website of a Palm Springs investors group.
The project will be located on the new plot provided by master developer Nakheel, with some possible changes to building plans, the statement says.
Niall McLoughlin, senior vice president of corporate communications at Damac, said in a statement emailed to ArabianBusiness.com on Thursday that the developer would shortly announce a decision on the project.
“We have been in contact with our customers in relation to Palm Springs and will be making a formal statement in due course. As soon as I am in a position to comment, we will contact you directly,” McLoughlin said, without giving further details.
Damac had said the cancellation of the project five years after launch was due to "redevelopment of the plots", stating that the development "cannot be situated on the re-allocated plot".
However, this explanation was brought into question when Palm Jebel Ali master developer Nakheel said it had informed investors of changes to the masterplan over 10 months ago.
A group of more than 60 UK-based investors are threatening to take Damac to court unless the developer reverses its decision and continues with construction.
The group, which last month stormed the London launch of Damac's Jumeirah Village South project, has given the developer until April 11 to change its mind or face legal action.
Damac also changed its mind about the cancellation of its Haz Tower in Business Bay on Wednesday, after investors complained about its plans to pull the project, UAE daily Gulf News reported.
The Haz Tower was launched in July with a value of around 240 million dirhams. The tower is now worth an estimated 660 million dirhams, the newspaper said.For all the latest business 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.
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