#APPROVED: PALM SPRINGS, 19F Res (Palm Jebel Ali)

[Naz UK]

Probably not, but the situation does need some government intervention before it gets out of hand.

[234sale]

Originally Posted by Naz UK

Probably not, but the situation does need some government intervention before it gets out of hand.

I was suprised to here it all on Dubai Eye.. I wonder if they'll invite Peter back and ask him actual questions rather than the usual pat on the back he gets.

[taxi201]

It seems like Damac arent the only ones that rip people off when you read the news articles. Has anyone else won a case like this? People will definitely stop investing in Dubai if this gets out in the UK - Damac are about the only company selling Dubai flats in the UK. Need to get someone like Panorama or Watchdog involved.

[Naz UK]

Nakheel have apparently denied that "they" are the reason behind Damac's cancellation of Palm Springs, and categorically state that it must be some "other" reason... in talk that Nakheel had with Damac as late as February this year, Nakheel were led to believe by Damac that all was well and the project was well underway.

Go figure.

[bizzybonita]

Originally Posted by 234sale

Support of Damac... I would never endorse this company..

In fact if you look at this thread, I have suggested that the many project get moved to the on-hold section.

If you look in the Damac thread I share a negative view of this company..

I am positive about Dubai, thats my point.. Infact Dubai Goverment is your only back up to get anything resolved

:okey:

[DHLSPY]

Originally Posted by 234sale

http://damaconcovered.wordpress.com/...inbusinesscom/

For other investors to share problems

How long till Lotus owners face the same problem is my next question?

LOTUS is already delayed and the plot is some 3-4 years away before it is handed over to Damac to start construction. The plot is currently occupied by the UN and Damac knew this when they launched! Why did Damac launch and give unrealistic completion dates when they knew well in advance that they would not get the plot! Hmmmmm very fishy and poor Lotus customers will face the same problems and more lies from Damac.

[DHLSPY]

Has anyone contacted customer services recently at Damac in relation to Palm Springs? They have not got a clue and it seems like everyone is leaving. I asked to speak to Fareed Dowlatshahi there senior manager who mysteriously resigned last week and Alan Gammon previous VP a month before. Now the new head boy is a yankie asian who has no clue and his managers who remain are completely useless particularly a lady called Trish who needs to learn how to talk to customers. The whole department is confused and do not know what to tell us the customers. More lies and rubbish.

[taxi201]

This is really worrying. We don't want Damac to go bust do we? We want them to build the apartments. At this rate, there won't be anyone left to run the business. We also want to make sure that when they build the thing, taht it is done properly!

Has anyone had any further communication about options?

[Salty]

The truth, the whole truth, and nothing but the truth ...

"A new luxury resort development, sold-out to investors five years ago, will never be built.

Damac Properties, the biggest private developer in Dubai, has cancelled the Palm Springs project, a 25-storey residential and resort development, planned for the Jebel Ali Palm.

Investors bought the 1, 2 and 3 bedroom apartments, in the project commencing in late 2003. Damac said the property, when completed, would be managed by a five-star hotel operator.

The absolute beachfront property was to have provided sea views from all apartments. With resort facilities, and the opportunity to put units in the hotel pool, the project was so popular the original selling prices almost doubled within a year.

Damac however pushed ahead with building other projects, and announcing new ones across several Gulf countries. It remained tight-lipped about Palm Springs. Buyers received scant, and vague information about when the project was proceeding.

Now after five years Damac, having had the use of the funds from the sell-off, is now saying it won't proceed and the original investors, or those than have bought on the resale market, have a choice of getting their original price back plus 6% per annum interest, or transferring their investment to another Damac property at a 15% discount.

Some buyers however have paid huge premiums on the resale market, and to accept the Damac offer will leave them substantially out-of-pocket.

Damac says it has no choice as the Jebel Ali Palm has been reconfigured and the plot it was to build on will now not take the original development.

'Damac Properties has been advised that the master development of Palm Jebel Ali has been redesigned and the Palm Springs plot will not be delivered. Due to redevelopment of the plots, the building forming the Palm Springs development cannot be situated on the re-allocated plot and, as a result, the Palm Springs project has been cancelled,' Hussain Sajwani, the Chairman of Damac Holdings, said in a statement.

It is somewhat incredulous such an event could be taking place five years after plans were put in place, and the property was marketed.

A more likely event is that construction costs have sky-rocketed since 2003, and the project based on the original prices that Damac contracted for, are now unviable.

The news of the Palm Springs demise comes hot on the heels of the failure of the Alareifi tower at Dubai Marina.

As we reported Sunday, construction of the luxury 35 storey residential Areifi Marina tower at the prestigious Dubai Marina has been halted.

Major Saudi Arabian developer, Alareifi, pulled the plug on the 379-apartment project midway through construction. Investors in the property are being told Alareifi cannot complete the project.

The Alareifi Marina is a unique development in Dubai in that whilst with other projects, off-the-plan buyers pay instalments in accordance with the staging of construction, Alareifi buyers paid the full price of the apartments upfront. In return for this they received discounted prices.

Dubai authorities in recent months have stepped in to regulate off-the-plan instalment payments by insisting developers open escrow accounts and deposit all funds into those accounts. The developers are then only permitted to draw on those funds for authorised construction works.

The Alareifi sales however, marketed through Khalid S. Al-areifi & Partner Real Estate, and the Palm Springs project, were all completed prior to this new regulation.

On Monday stocks on the Dubai stock exchange fell almost 3%, their biggest one-day fall in two months. The decline was led by the city's biggest property developer, Emaar Properties, which shed 3.95%."



Source:

http://story.malaysiasun.com/index.p...d/343073/cs/1/

[Dubai_Steve]

Potential real estate investors in Dubai have been scared off by news Damac Properties has axed a development on the Palm Jebel Ali, the latest ArabianBusiness.com spot poll has revealed.



PROJECT AXED: Two-thirds of respondents said news of the Palm Springs cancellation had made them think twice about investing in Dubai.


The Dubai-based developer cancelled its the much-delayed Palm Springs project, which is yet to be built, five years after launch, citing "redevelopment of the plots".

Investors are now threatening to take Damac to court if it does not reverse its decision and continue with construction.

Damac has offered compensation for the cancellation, but buyers are facing average losses on their investment ranging between 300,000-600,000 dirhams ($81,000-$163,000), one of the project's investors has told ArabianBusiness.com.

The news seems to have reduced confidence in the market, according to the poll.

Two-thirds of respondents said news of the cancellation had made them think twice about buying property off-plan, stating that it had made them "very cautious about the Dubai property market".

Not one respondent said they would still buy off-plan real estate without first checking out the developer, while 33% said they might buy before construction has begun, but that it would depends on the developer and the kind of reputation it had.

Dubai has a massive secondary market for off-plan real estate, with units passing through numerous hands before a development is finally built as investors capitalise on soaring prices in the sector to make quick profits without putting up huge amounts of capital.

Many investors in Palm Springs bought units on the secondary market, meaning from an investor and not directly from the developer, paying up to a 50% premium on the original purchase price.

As the Palm Springs has yet to be built buyers will not have paid the full original purchase price, but will have made downpayments as agreed milestones were reached.

Secondary market buyers will have paid the seller the premium as well as however much of the original purchase price the seller had paid to Damac.

Damac has offered to refund the amount of money investors have put down on their property so far, plus 6% annual interest calculated from the date of each instalment payment, or the option of transferring their investment to another project with a 15% discount off current prices.

Damac said it was not the developer's contractual obligation to refund money that was paid on resales, according to an investor.

[tiny]

Reason for axing Palm Springs questioned
by Amy Glass and Dylan Bowman on Tuesday, 01 April 2008
PROJECT SAGA: Nakheel has questioned Damac's reason for cancelling its Palm Springs project.The master developer of the Palm Jebel Ali has raised questions over Damac Properties' explanation for axing its Palm Springs project on the manmade island.

Dubai-based Damac cancelled the much-delayed project late last month due to "redevelopment of the plots", stating that the development "cannot be situated on the re-allocated plot".

Nakheel, which is building three palm-shaped islands off Dubai's coast, said on Tuesday it had informed investors of changes to the Palm Jebel Ali masterplan over 10 months ago.

Nakheel also said it had "positive" correspondence with Damac as recently as February, in which the developer gave no indication that it would not be going ahead with the project.

“We are very surprised by the statements made by Damac suggesting that the reasons for the recent cancellation of its Palm Springs project are due to revisions in The Palm Jebel Ali masterplan...," Marwan Al Qamzi, Nakheel managing director of the Palm Jebel Ali, said in a statement.

“Our last interaction with Damac took place in February of this year and was one of positive engagement, which left us with the firm view that Damac was proceeding with the project..."

Al Qamzi said the reason for the scrapping the 25-storey beachfront development had to be related to something other than the re-allocation of the plots.

“From Nakheel’s perspective, Damac’s cancellation of the Palm Springs project must be linked to other development issues specifically related to the project,” Al Qamzi said.

Damac was not immediately available for comment when contacted by ArabianBusiness.com.

Nakheel's remarks will only further infuriate angry investors, who are facing millions of dirhams in losses, one buyer has told ArabianBusiness.com.

Many investors have rejected the compensation being offered by Damac, and are threatening to take the developer to court if it does not reverse its decision and continue with construction.

Nearly 60 UK-based investors in the project have formed a group to take on Damac, giving the developer until April 11 to change its mind or face legal action.

Damac has offered to refund the amount of money investors have put down on their property so far, plus 6% annual interest calculated from the date of each instalment payment, or the option of transferring their investment to another project with a 15% discount.

Many buyers have snapped up Palm Springs units on the secondary market, meaning from an investor and not directly from the developer, paying up to a 50% premium on the original purchase price.

As Palm Spring has yet to be built buyers will not have paid the full original purchase price, but would have made downpayments as agreed milestones were reached.

Secondary market buyers would have paid the seller the premium as well as however much of the original purchase price the seller had paid to Damac.

Damac said it was not the developer's contractual obligation to refund money that was paid on resales, according to an investor.



The saga seems to have reduced confidence in the Dubai property market, according to the latest ArabianBusiness.com spot poll.

Two-thirds of respondents said news of the cancellation had made them think twice about buying property off-plan, stating that it had made them "very cautious about the Dubai property market".

Dubai has a massive secondary market for off-plan real estate, with units passing through numerous hands before a development is finally built as investors capitalise on soaring prices in the sector to make quick profits without putting up huge amounts of capital.

------------------------------------

[234sale]

Lotus would have to be redesign anyway as Power Capacities have been reduced. Every devloper is getting around a quarter less supply that they expected. I have mentioned this before including my own research..
On top of that the UN issue wont go away..
They should cancel it now before any more by resale thing its going to be finished.

You will see this year

Land Price will Half from current level,, Construction Price will Double from current level.

Property Values of units that can be completed will increase.
Property values of developments that cant complete are in my view worth only the orginial contract value.

Anyone who sold units without a building permit are my biggest concern.

This has happened before in many markets,, Developers do go Bankrupt

[malec]

If construction prices double from the level they are at now how will anyone build anything?

[234sale]

The cost are increasing as your going to have to build a enery efficent building in pretty much every development..

One of my friends who has land in JVS has said the want every building to be gold - platinum rated....

I'm sure you agree adding all these features adds lots of costs

[abf]

Originally Posted by malec

If construction prices double from the level they are at now how will anyone build anything?

It will be unaffordable and hence the market in disarray
My concern is the land registry on current prices rather than purchase prices will have a knock on effect on property

[Dubai_Steve]

[patdubai]

I T V

Holiday Homes from Hell

E-Mail Duty Officer @ I T V . com

Lets tell them about DAMAC DO THE DIRTY IN DUBAI

[Dubai_Steve]

Damac move surprises Nakheel

By Suzanne Fenton, Staff Reporter
Published: April 04, 2008, 00:44

Dubai: Uncertainty surrounds Damac's cancellation of its Palm Springs project as master-developer Nakheel, which is building the Palm Jebel Ali where the project was initially planned, saying it was not informed of Damac's decision to cancel.

Marwan Al Qamzi, managing director of the Palm Jebel Ali, said Damac's decision came as a surprise and Nakheel learned of it through the media.

"We are very surprised by the statements made by Damac suggesting that the reasons for the cancellation of its Palm Springs project are due to revisions in the Palm Jebel Ali masterplan," said Al Qamzi. "The Palm Springs plot was relocated to a prime position due to widening of the crescent," he said.

"Our last interaction with Damac took place in February this year and was one of positive engagement. It left us with the firm view that Damac was proceeding with the project. We are extremely disappointed by this recent development," said Al Qamzi.

Al Qamzi said that the revised masterplan allowed for significant improvements in the design.

Nakheel has sold other plots of land on the crescent of Palm Jebel Ali to Damac. Al Qamzi said it was now the responsibility of Damac to ensure the delivery of any units it has sold within these plots to customers.

Revisions to the Palm Jebel Ali masterplan were communicated to investors more than ten months ago.

"From Nakheel's perspective, Damac's cancellation of the Palm Springs project must be linked to other development issues specifically related to the project," said Al Qamzi.

Damac was not unavailable for comment.

[taxi201]

What di you think this means? Do you thingk that NAkeel can force Damac to build the development? They must be really p....d to have gone public on it like that. I thought Damac were in bed with Nakeel??

[DiamondGeezer]

Well nakheel obviously have had enough now, Damac were trying to blame them even though it is clear Damac are just trying to con investors.