Dubai Lagoon investors group urges construction restart

Committee representative says building work is key to regaining confidence in Schon project.
Dubai Lagoon investors group urges construction restart
By Ed Attwood
Mon 26 Apr 2010 09:31 AM

A representative from the Dubai Lagoon Investors Committee on Monday welcomed the offer made by Schon Properties to link to a new construction-linked payment scheme that will attempt to fast-track construction.

“But in all order for all this to happen, construction onsite needs to resume,” Jamal Sirhi, spokesman for the Dubai Lagoon Investors Committee told Arabian Business.

“Once investors see that construction is happening, everything will start to loosen up; the frustration is because building had stopped.”

Sirhi said that he had been in close contact with Schon Properties vice president Danial Schon, and that he expected work onsite to restart in “one or two weeks time”.

“They [Schon Properties] have already renegotiated with two contractors and a third has actually mobilised on Zone 2,” Sirhi indicated. “Everything is happening through RERA which adds more trust to the project.”

The spokesman said that the five-member Dubai Lagoon Investors Committee had been in constant contact with Schon Properties over the course of the last six months to resolve investor concerns.

Schon Properties’ new plan involves asking investors for an initial 30 percent outlay, followed by a further ten percent when each of six construction milestones are met. The final ten percent will be handed over on completion.

Of 2,000 buyers, 35 have switched to the new payment scheme, which will be supervised by RERA. The property watchdog will also be tracking the pace of construction.

“With regard to the new deal, we argued that investors would consider the plan as long as there was an incentive, and after some negotiation with Schon Properties, they have agreed to offer a fifteen percent discount,” said Sirhi.

“Some may go for it and some may not – but personally, I think it’s a good deal.”

Up to 10 percent of Dubai Lagoon investors have defaulted on their payments in the wake of the emirate’s real estate crash, which saw property prices in some areas halve.

The project is currently two years behind schedule.

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