About 700 people who invested in homes in Nakheel's delayed Palm Jebel Ali say they are unhappy with the Dubai World-owned developer's offer of alternative properties, and plan to hire lawyers to argue their case. The news follows Nakheel having outlined proposals to property buyers after receiving about US$9 billion (Dh33.05bn) worth of fresh funds from the Dubai Government to revive stalled projects and settle some of its debts.
Nakheel said investors in longer-term projects, such as Palm Jebel Ali, were offered "more options in relation to their investments in these projects". These included "staying in the project, swapping into near-term projects, consolidating into other owned property [or properties], consolidating into a third-party property or receiving credit that will be useable against any property at anytime and redeemable in five years".
Nakheel started the consolidation process towards the end of last year when it offered buyers of waterfront homes on Palm Jebel Ali alternatives in projects closer to completion, including Jumeirah Heights and Al Furjan. But the investors are unhappy with the offer, saying the alternative property options are "inadequate and not acceptable". They plan to hire the law firm Kennedys to represent them.
Some of them have invested more than $4 million in the project, which was launched in 2003 and came to a standstill after property prices started to tumble in the third quarter of 2008. Villa prices at the development fell to about $2.45m from about $4.35m between September and November 2008 as the financial crisis took hold. The investors will meet in London on April 10 when they will draw up a plan to pressure Nakheel to set a new schedule for the project, speed up delivery and ensure the original designs are not compromised.
They will also appeal to the developer to link their payments with construction milestones, in line with Dubai Land Department rules, and to provide guarantees against any future setbacks that could jeopardise their investments. They will also discuss plans to appoint the Dubai office of Kennedys as an adviser. "We just want advice - we're not seeking litigation. We don't think it's worth it," said Aarti Chana, a spokeswoman for fellow investors in Palm Jebel Ali. "We just don't think the proposals offered are fair."
Nakheel added that all projects were "being reviewed as part of the current restructuring process. This process needs sufficient time to ensure that the interests of all stakeholders are taken into consideration". Palm Jebel Ali, the second part of the three-development Palm islands, was designed to accommodate up to 250,000 people and add 70km of beachfront to Dubai. Nakheel planned to build 1,300 villas that were due to be completed in the middle of 2008.
Most investors have so far paid 30 per cent of the total price. agiuffrida@thenational.ae