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Wed 2 Sep 2009 05:14 PM

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Rakeen appointed to take on $800m La Hoya Bay

Gov't owned developer named as judicial custodian of troubled Khoie Properties.

Rakeen appointed to take on $800m La Hoya Bay
LA HOYA: An artists impression of the $800m Ras al Khaimah project.

Rakeen, the government-owned real estate company in Ras Al Khaimah, has been named judicial custodian of Khoie Properties, troubled developer of the emirate’s $800m La Hoya Bay project.

"The Ras Al Khaimah court's decision to appoint Rakeen as custodian of Khoie Properties is a significant step that promotes and protects the welfare of investors and property buyers,” said Ras Al Khaimah Investment Authority (RAKIA) chief executive Khater Massaad.

Khoie Properties had become insolvent and defaulted on land payments, calling into question the future of La Hoya Bay, its main project in Ras Al Khaimah.

As a result, the RAKIA had asked the courts to bring Khoie Properties under judicial custodianship until the completion of La Hoya Bay, to ensure that the rights of investors were protected.

Rakeen is the master developer of Ras Al Khaimah's Al Marjan Island, the site of the planned development.

Around 800 investors, out of which half were from the UK, had already made a 30 percent down payment to Khoie.

Rakeen said those who have made the 30 percent down payment will only be required to pay the remaining 70 percent.

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Mounir 11 years ago

"Rakeen said those who have made the 30 percent down payment will only be required to pay the remaining 70 percent." Really? wow..only 70% ? well then..at least now we know that someone in Rakeen can actually do basic maths

DubaiUKLady 11 years ago

As an investor I can tell you there will be many a sigh of relief; some AED230 million of our (investors) money has gone missing; so it is indeed a relief that we don't have to pay more; please don't make rude comments when you have no idea about what is going on!

Mark 11 years ago

This is great news for all purchasers. This will really cement the integrity of the RAK Government. Lets hope that other Emirates are so supportive in such situations.

UKJane 11 years ago

this is what dubai should do. investor confidence wont return until government take responsibility for their masterplans. bravo RAK!

Lahoya Bay investor 11 years ago

i am happy that RAKEEN is takingover the project. as DubaiUKLady mentioned i also believe that "there will be many a sigh of relief". We need to think positive, hope RAKIA will help us in finance too. special thanks to RAKIA in advance.

basedindubai 11 years ago

Its been around 5 and half months since Rakia/rakeen were working for the benefit of the investors against a v egoistic developer.This guy should be made to pay the interest on all accelerated payments if he does not go for bankruptcy as the developer is still sending emails saying he is the owner of the project and he is the SAVIOUR !!!!!!!

name withheld 11 years ago

this reminds me of a deal on the Lighthouse in DUbai the same promise was made. The investors were made to sign an agreement whereby it was assumed that the 30% was paid and they only had to pay the remaining 70%. However they were also made to sign a clause releasing the new (quasi government) entity from potential legal action. Then what did they do...reneged on the new contract, canceled the project with the land department, did not even tell the investors. When the investors challenged this they were told to get stuffed... and now they are not allowed to sue as per the new contract by the same people who were meant to rescue them. So be careful be very careful and do not sign away your rights you have been warned

Farhad 11 years ago

I am an investor in Bab Al Bahar project from Rakeen on the same island and they are right on the schedule with the project and are planning to deliver within the next 12 months. If they take over, you can rest assured that you will be safe, specially with them asking you for 70% only, which means they are taking care of the initial developer's default so the investors do not lose any money. Now, since they are being so generous with the La Joya Bay investors, I think they should also show some generosity towards their own investors at Bab al Bahar and may be offer some discounts (say 10%?) or extended payments of up to 2 years after handover for the remaining 30% (which is due on handover). That would show that they are after justice everywhere.

Tired of the greed 11 years ago

Hey Farhad, why should Rakeen give you discount or extend your payment plan of the final 30%???? You say they are good company and you claim your project on time so why should the company have to provide you leniancy when they are delivering on the promises of the contract you entered in to with them. You should be thankful that RAKEEN isnt facing issues like other developers and investors. The fact they are helping investors of another project doesnt justify that they should give you discount or delay payment on your project. If they are a good company then support them by fulfilling your obligations rather than squeeze more out of them if they are trying to do the best by saving a development in your backyard so that you dont loose value in your own property!!

Bru 11 years ago

It's clearly very nice of Rakeen/RAK Government to take over. But they're not as nice as some of you think - 30% has gone missing but Rakeen will only ask buyers for the remaining 70% - seems really nice. But in actual fact, the cost of construction has gone down considerably since people bought these properties AND Khoie were making a huge profit margin on them at the high price they were sold. So, the result is that Rakeen can do the full construction within the 70% you have to pay them. Just a questions – isn’t it better for buyers to walk away from their purchase? If you’ve paid 30% and the price has gone down by more than 30% then you may as well buy something ready in Al Hamra Village where you can get excellent prices and it’s an almost completed master development. La Hoya Bay was sold at very high prices and the reality of the price now, esp for a development that is 1-2 years from completion, is much less than the price paid.