Dubai's The Pointe attraction is tipped for redevelopment after tenants were served with eviction notices this week.
The decision comes amid soaring demand for property and entertainment on Palm Jumeirah.
It is believed the open-air venue, which features restaurants and, until it closed on May 15, the world's tallest fountain show, will be given a major revamp.
Nakheel confirmed that the fountains would close but did not disclose its plans. Restaurants lining the man-made bay said they had been given eviction notices this week.
“The tenants of The Pointe have been served notice, which is fully compliant with the Dubai Land Department laws, rules and regulations, as part of the future redevelopment of The Pointe,” a statement from the developer said.
“The tenants will have a period of 12 months to vacate and relocate, as per their individual circumstances.
“Nakheel is working closely with our valued tenants throughout this process. As a part of this redevelopment, The Fountain at The Pointe closed on May 15. Nakheel remains committed to ensuring the smoothest transition possible for its tenants during this time.”
There is no confirmation yet that the site could pave the way for waterfront homes, although it comes as Palm Jumeirah registered the highest sale prices per square foot in Dubai in April, at Dh4,635, up 4 per cent on the previous month.
The highest average annual apartment rents are also found in Palm Jumeirah at Dh263,762.
“If they rejuvenate this area and add real estate then it can only be a good thing because the Palm has come on leaps and bounds in the last three to four years,” said Rennie Sanger, senior off-plan and investment consultant with real estate company Haus & Haus.
“Before then it was seen as a very luxurious area with not much in the way of amenities but now you’ve got West Beach with a host of restaurants and Nakheel Mall.”
Mr Sanger said there was a need for more property on the Palm given how much the area was due to expand.
“There is a surge of people heading to the Palm now with the opening of the Royal Atlantis, and the upcoming Six Senses residences will create a lot more real estate,” said Mr Sanger.
Another expert said the land could end up being among the most valuable properties in Dubai, depending on how it was developed.
“If this was redeveloped as villas or apartments they would command a premium unlike any we have seen so far,” said Peter Townsend, senior property consultant for Palm Jumeirah with Allsopp & Allsopp.
“The land could be among the most valuable on the Palm, either side of The Pointe has some of the most exclusive villas in Dubai.”
There were several ways the land could be redeveloped to Nakheel’s advantage, he added.
“It could be plausible for this prime location – with some of the best views on the Palm – to be relaunched as residential,” he said.
“Or it could be the case that Nakheel is looking to improve what’s on offer in terms of high-end restaurants or bars.”
More internationally recognised restaurant brands and bars, such as those found in DIFC, would add immediate value to the market in the Palm, said Mr Townsend.
The opportunity to purchase new properties on the Palm would be snapped up by buyers, said another property expert.
“Shoreline type apartments, as opposed to ultra luxury villas, would compliment what is already there,” said Matthew Gregory, Marina branch director at Betterhomes.
“It would also take advantage of the boom in property prices and there could be buyers already lined up, given how prestigious it is to live on the Palm.”