DUBAI // Dubai Properties has become embroiled in a row with investors surrounding a Dh3 billion (US$817 million) development, after demanding final payment before the project was ready to hand over. The dispute involves the Executive Towers development at Business Bay, a collection of 11 high-rise buildings containing more than 2,200 luxury apartments. The investors said they received demands for final payments from Dubai Properties, which is owned by the Dubai Government, and assurances that the project had been completed. But after making their final payments, the owners were told the handover would be delayed.
Sanjay Sachdev, an investor based in Dubai, said he was out of pocket and wanted the developer to refund his final instalment. "After we made our final payment, we called their customer service department for a date and time as specified by Dubai Properties," said Mr Sachdev. "But we were told that the completion and handover was again delayed till October or December 2009. So we asked why the letter was sent? They replied that the development had hit some snags since the letters were issued."
Mr Sachdev said he had filed a complaint with the Real Estate Regulatory Agency, the government-run property regulator. Making final payments also triggered mortgage payments for investors using bank finance before they were able to occupy or rent the apartments, Mr Sachdev said. Disputes over property have spread throughout the Emirates as waning demand for villas and apartments hits profits for developers, and investors are forced to absorb losses on financial commitments made before the downturn. Property prices in Dubai have fallen about 50 per cent from their peak in the third quarter of last year, according to data from Colliers International.
Dubai Properties said in its final letter to investors that the completion date was fixed for July 20 and asked them to clear the final instalment. "The letter serves as our final notice for final instalment payment, which is due on but not later than the completion date," Samer Zabian, the director of customer relations at Business Bay, said in a letter obtained by The National that was sent to investors in June.
Dubai Properties said the size of the project demanded a phased handover of apartments. "Due to the scope of the project, which includes more than 2,200 residential units, there will be a phased approach to the handover to be executed over the coming months," the company said. "Executive Towers is complete and we have already begun the process of handover. We have mobilised our team and are working closely with local authorities and utilities providers to finalise all elements of the development." The company declined to specify how many apartments had been transferred to their owners.
The Executive Towers project is being built at the heart of the $30bn Business Bay development, one of the largest property projects in the emirate. Scheduled for completion in March last year, the project has suffered a series of setbacks. Business Bay was originally planned to include 200 towers and accommodate more than 190,000 people, but it has been beset by delays relating to infrastructure and power supply.
Dubai Holding Commercial Operations Group, the parent company of Dubai Properties, said last month it was in advanced talks to merge its property units - Dubai Properties, Sama Dubai and Tatweer - with Emaar Properties, the country's largest developer by market capitalisation.
skhan@thenational.ae