Tameer says legal fight won’t speed up handover

Dubai developer is facing lawsuit from investors over delay of Abu Dhabi project
Tameer says legal fight won’t speed up handover
Abu Dhabi has seen a slowdown in a number of construction projects
By Claire Ferris-Lay
Thu 08 Dec 2011 10:12 AM

Investor
legal action against Tameer Holding Investment over the delayed handover of its Abu
Dhabi Tameer Tower will not force a quicker handover, its president has told
Arabian Business.

Up to 65
buyers in the developer’s Al Reem Island project plan to push ahead with
arbitration
despite the developer announcing it will restart work by the first
quarter of 2012.

“Of
course no one wants to have legal action taken against them but this will not
affect our delivery date. We have communication with most of our investors and
they know of our plans. We have faced difficulties in the approval processes,”
said Federico Tauber.

The
original delivery date for the towers on the Al Reem Island project was
scheduled for June 2011, with a clause allowing a six month delay to December.

The
Dubai-based developer has so to date only completed 13 levels in Tower A and four in Tower
B.

Tameer
has said it is not at fault and claimed the delay is due to an issue related to
the contractor.

The
first two phases of the project will be completed by the fourth quarter of
2013, said Tauber.

Thabit
Al Temimi, a legal adviser with the Abu Dhabi law firm, House of Justice, last
month said investors plan to push ahead with their case.

“We are going to start
our legal case in the arbitration centre in Abu Dhabi,” he said. “[By] December
2011, legally, Tameer should deliver the whole project… Even if they start
construction, it means nothing. My clients on the 40th floor cannot live in
their apartment if it doesn’t exist.”

The $1.9bn
Tameer Towers development on Abu Dhabi’s Reem Island is the latest in a series
of projects
to be affected by a series of slowdowns in the Abu Dhabi
construction market, which last month saw a delay to the planned Louvre and
Guggenheim museums on Saadiyat Island.

For
developers, many of whom had banked on Abu Dhabi to offset the collapse of
Dubai’s property market in late-2008, the stalling of projects in the UAE
capital is a source of concern.

Tameer
this week officially handed over Silver Tower, a 27-floor commercial tower in
Dubai’s Business Bay. The tower, which is already 80 percent occupied, is part
of a series of projects the developer plans to complete and handover in the
next four months, said Tauber.

The
developer said it will complete the tallest residential building in the world
Princess Tower, The Regal Tower, Elite Residence and Al Jawzaa in International
City by the end of the first quarter of 2012.

Property
prices in Dubai soared after the city opened its real estate sector to foreign
investors in 2002, granting them freehold ownership rights at many
developments. From start-2007 to mid-2008, prices rallied almost 80 percent,
Morgan Stanley estimates showed, with billions of dollars worth of new projects
launched by local developers.

But home
prices in Dubai, the Gulf property market that had the biggest reversal because
of the financial crisis, fell more than 60 percent in the wake of the global
credit crunch.

Tameer
said it had no plans to expand outside of its home market or look at affordable
housing projects in the UAE, as many other developers have done in the wake of
declining prices.

“We plan
to concentrate on the delivery of what we have. Tameer has quite a wide range
of projects including affordable housing in Jordan. At the moment we have no
motivation to launch any new projects,” said Tauber.

Property
prices in Dubai are starting to show some signs of recovery, he added. “The
market has started to stabilise. It depends on what specific area you are
looking at but residential prices in well-located areas such as Dubai Marina,
Downtown and Jumeirah Lake Towers have started to move.

“The
office market is much more oversupplied. There will be a huge increase in stock
coming online during 2010-2012 and that will take some time to absorb,” he
said. Tameer expects to reach 100 percent occupancy in its Silver Tower and
Regal Tower within a year, he added.

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