DUBAI // The value of Palm Jumeirah apartments has fallen by hundreds of thousands of dirhams because of a dispute that has denied residents access to the beach, owners say.
For the past three months, more than 1,000 residents of Shoreline buildings Al Haseer 7 and Al Nabat 8 have been unable to use the beach and the facilities of the Riva Beach Club.
Nakheel, the developer, said it closed access to the beach and the club because IFA Hotels and Resorts, which runs the club, had not paid fees for beach access.
Property owners fear that the dispute is deterring prospective tenants and buyers.
“Since the closure of the beach we have seen a decline in the value of the properties, [especially] rentals,” said Barry Gale, a property adviser.
“People on old rental contracts are trying to renegotiate because they are paying a premium for beachfront property, but there is no access to it.”
Before the closure of the beach, the yearly lease for a three-bedroom apartment was about Dh230,000. Such apartments are now available for Dh180,000.
According to Mr Gale, the value of a three-bedroom flat has fallen to about Dh3 million from Dh3.74m.
“At the peak of the market at the end of 2013 these apartments were going for Dh5.5m,” he said.
Although residents can walk to other beaches, they cannot sunbathe there.
The longer the dispute continues, the greater the risk of further declines in the value of Palm Jumeirah properties, according to Mr Gale.
Nakheel security guards told the beach club’s staff that the beach was closed and they ordered the removal of furniture on October 16 last year.
Julian Redman, chairman of the Al Haseer and Al Nabat Owners Association, said residents had been greatly inconvenienced.
“Many had friends and relatives over during the holiday period and could not pop down to the beach in comfort and were forced to go elsewhere,” he said.
“This has had a very negative impact on the value of the properties, which we hope will be overcome with the speedy resolution of the issues.”
The association is asking IFA Hotels and Resorts for information on what is happening, and plans to voice its concern to the Real Estate Regulatory Agency.
IFA Hotels and Resorts said it would continue to discuss the matter with Nakheel. There was, however, no word on when the beach would be reopened.
“Until now, IFA has failed to pay its outstanding fees for beach access,” said Nakheel.
“Access will be re-granted once the arrears are settled.
“While we sympathise with the residents who are affected by this non-payment, we have no direct contact with them, and therefore urge them to liaise directly with IFA regarding the situation.”
nhanif@thenational.ae