By Amy Glass
Decision comes after 'extensive discussions' with real estate authority.
Damac Properties’ decision to reinstate the Palm Springs project will “further enhance” investor confidence in the emirate’s real estate market, the developer’s chairman said.
The Dubai developer officially announced on Wednesday the reversal of its decision to axe the project on the Palm Jebel Ali, following consultation with Dubai’s Real Estate Regulatory Authority (Rera).
Damac had cancelled the project last month, five years after launch, and offered investors compensation considerably below current market value.
Infuriated investors in the project had threatened legal action, and said they stood to lose millions of dirhams after purchasing their properties on the secondary market.
Hussain Sajwani, chairman of Damac Properties, announced the decision reversal in a statement emailed to ArabianBusiness.com, and said he was “very pleased” with the outcome.
“After extensive discussions, Damac Properties is pleased to announce that the Palm Springs project, located on Palm Jebel Ali has been re-instated and will be delivered to customers,” he said in the statement.
The announcement was testament to the strength of Dubai’s real estate sector, he added.
“This announcement will further enhance confidence for international investors in the Dubai real estate market,” he said.
Sajwani did not say when construction would begin on the project, or offer any further details.
At launch, the 25-storey Palm Springs project had been planned for completion by late 2007, although construction never commenced on the development.
Damac had cancelled the project last month due to "redevelopment of the plots", stating that the development could not 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 had been threatening to take Damac to court unless the developer reversed its decision and continued with construction.
The group, which last month stormed the London launch of Damac's Jumeirah Village South project, had given the developer until April 11 to change its mind or face legal action.