Schon Properties, the developer behind the stalled Dh7 billion Dubai Lagoon project in Dubai Investments Park, has agreed to transfer half of the beleaguered mega-project to another developer in an attempt to speed up delivery.
Schon Properties said on Tuesday it had struck a deal with the Dubai developer and contractor Xanadu Real Estate Development to transfer 2.33 million square feet of the total 4.3 million sq ft project to its ownership.
Under the agreement, Xanadu will be responsible for completing three of the seven phases of the vast housing and hospitality project – 17 buildings comprising 1,300 apartments.
Schon said it had agreed the deal with Xanadu to speed up delivery at the mega-project, which was initially announced in 2005 and was scheduled to be completed in 2008.
More than 2,500 people signed up to invest in Schon’s flagship project, which was billed to have included 49 buildings comprising 4,000 apartments around a man-made lagoon.
With little construction on site by 2014 and dozens of investors demanding their deposits, the Dubai Land Department (DLD) announced the scheme would be broken into seven phases and monitored by the Real Estate Regulatory Agency until completion.
Nonetheless, many investors who bought off-plan homes at the project are still angry at the delays and have been meeting to discuss how best to press their case.
“The deal signifies the strength of partnership in developing large projects,” said Noorul Asif, the chief operating officer of Schon Properties. “The government would not allow this to happen unless it was confident that both developers will deliver and that customers are in safe hands.”
Xanadu first became involved with Dubai Lagoon in 2014 as part of a deal brokered by the DLD, which was attempting to restart projects stalled during the global financial crisis.
At the time, Xanadu agreed to invest Dh339 million into the project as part of a deal that involved its contracting arm PGS Gulf Contracting being awarded a Dh678m contract for construction work on the site.
However, yesterday Schon said it had now agreed to transfer ownership of five buildings comprising 210 apartments at its Rowan neighbourhood, another five buildings comprising another 210 apartments at its Winterberry neighbourhood and 880 apartments in seven buildings at its Lilly neighbourhood to Xanadu so that it could press ahead with the rest of the project using its own contractors.
Schon said it now plans to press ahead with work on 830 apartments and another 2,550 hotel rooms, which are also partially built.
According to Schon, the entire mixed-use project will now be finally completed by 2020 .
lbarnard@thenational.ae
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