Investors in Dubai’s stalled Palm Springs project have rejected an offer of a partial refund on the properties from developer Damac, branding the solution “unsatisfactory”.
Buyers on the Palm Jebel Ali project, who have waited eight years for construction to begin, said an offer of a 70 percent refund of their deposit upfront, or 25 percent immediately followed by a further 25 percent annually for the next three years, was unacceptable.
“The offer of Damac to return 70 percent of deposits paid eight years ago as compensation for their inability to respect their contractual obligations is unsatisfactory to the group and discussions are ongoing,” an investor, who asked to remain anonymous, told Arabian Business.
“The 100 percent refund option paid over three years has also been offered and is also unsatisfactory. Damac previously offered refunds to investors with interest at 10 percent per annum when the design of Palm Jebel Ali was changed in 2006.”
Discussions between the investor group and Damac restarted in July, after UK buyers said they would picket a promotion being carried out by the developer at luxury London store, Harrods.
The investors planned to lobby outside the Qatar-owned store, carry placards and hand out leaflets to shoppers headlined ‘I would not buy from Damac again’.
Following last-minute discussions with Damac officials, the protest was called off.
The developer has said it is committed to continuing negotiations to secure a solution.
"We are working very hard with Palm Springs investors to bring closure to this issue," Niall McLoughlin, senior vice president of corporate communication, told Arabian Business.
Announced during Dubai’s real estate boom, Palm Springs was designed to be a 25-storey beachfront development located on the Nakheel-owned Palm Jebel Ali island.
The offshore island stalled in the wake of the emirate’s real estate crash and is now designated by Nakheel as a “long-term project”.
In March, the developer began offering its investors the option of a long-term refund or the chance to move to another Nakheel-backed Dubai development.
Damac had attempted to cancel the Palm Springs project in 2008, but the move was fought by investors through a series of demonstrations and meetings in the UK and Dubai, and the threat of legal action.
Damac later agreed to reinstate the development, and wrote to investors earlier this year to say it was in discussions with Nakheel, and a decision on Palm Springs would be made in December.
Investors have urged Damac to move the project to an unsold plot of land on Palm Jumeirah or another similar waterfront location in Dubai, or to give a full refund to buyers.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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