Five years on, investors of Dubai Lagoon still in limbo
DUBAI // Investors who handed over hundreds of thousands of dirhams for property being built around an artificial lagoon fear they will never be able to move in.
The ambitious community was scheduled for completion five years ago but a string of delays left buyers in limbo.
The developer, Schon Properties, now insists Dubai Lagoon – a Dh3 billion affordable housing project – is on track for a building-by-building handover from April.
But investors say this is not the first deadline to be set, and want the Real Estate Regulatory Authority (Rera) to intervene if there are further setbacks.
One buyer, T?S, a Canadian businessman, is paying interest on bank loans for the unfinished property and renting an apartment for his family.
“How can I survive like this?” he asked. He has already paid Dh1 million – half the amount for four apartments, with the remainder due on completion.
“I thought by 2008 I would have my own home,” he added. “We want Rera to set a deadline or cancel the project and refund investors.”
Dubai Lagoon launched in 2005, with the clusters of eight-storey buildings in seven zones at Dubai Investments Park due to be finished by 2008. The delays have been attributed to road widening, the economic downturn and securing utility clearances.
Rera said it was examining Schon’s proposal to allow investors to switch their units in deferred clusters for those being built now.
“It is under review by the Trust Account department,” the authority said. “The developer applied for a new financial proposal to follow up the work and this is under review.
“Rera asked the developer to communicate with investors about the new financial proposal.
“Regarding the commitment of the developer with the investors, these are contractual agreements and both sides have the right to take legal action to make sure all obligations are fulfilled.”
Some buyers have paid further instalments hoping to secure their apartments. The project also attracted investors from Britain and Europe, who were planning to escape winters in a holiday home.
“I have paid more against my better judgment hoping it would help them finish the apartment,” said David, a British financial adviser and frequent visitor to Dubai since his daughter moved here in 2000.
He has paid more than Dh530,000 – 85 per cent of the total cost – for a one-bedroom apartment.
“I used my retirement money to buy this,” he said. “We thought we’d come here for two months [a year]. But it doesn’t look like the first building will be completed in time.”
The vice president of Schon Properties, Danial Schon, said a building would be completed by April.
Work will focus on zone 1, with 442 apartments in eight buildings.
“Now that the real-estate market is looking extremely positive, Dubai Lagoon is moving forward using a building-by-building strategy,” Mr Schon said. “We are 100 per cent committed to this project and delivering to the customers who have been patient and supportive.”
But investors remain disheartened. “They showed us tiling of one washroom but isolated work is not enough,” said Ahmed Hassan, who paid Dh220,000 as part-payment for a one-bedroom apartment.
“They tried to call us to switch payment plans, sign a new contract and give them more money. But no one wants to pay them more.”
Najam, an American who paid Dh423,000 for a flat, said: “If they complete one building at a time, it will take 10 to 12 years. We have written a petition to Rera that Schon should give us a definite completion date. Will it be one to two years? 20 years? 100 years?”
Published: February 23, 2013 04:00 AM