Real estate investors who bought property in one of Dubai’s most prominent projects that has been put on hold by developers are being offered alternative apartments within other projects in what is regarded as the first consolidation between Dubai Holding’s two main property companies.
Sama Dubai confirmed that it is looking at transferring credit among buyers in its Lagoons project. It says it makes sense to consolidate projects and keep investors paying for real estate that they bought at the height of the property boom.
The company has contacted buyers with an offer to transfer their credit into apartments in either Executive Towers or Jumeirah Beach Residences. ‘It is clear that Dubai Holding is making some developments a priority and putting others on the back burner,’ said one analyst.
‘They are going through the projects and deciding what’s going to go ahead and what’s not going to go ahead. By offering a credit note, they are protecting their cash flow and consolidating projects,’ he added.
The $21.78 billion Lagoons is one of the most prominent projects in Dubai to have been put on hold. The project in a waterfront area created by expanding Dubai’s Creek includes four buildings designed by internationally renowned architect Zaha Hadid that look like flames.
The company was not clear on what will happen with the project now. ‘We remain committed to The Lagoons. It is always our first priority to meet the needs of our customers and while we are in constant dialogue with our owners-investors it would not be appropriate to comment on these discussions,’ a spokesman said.
It has not officially cancelled any projects but it has made major cuts in its business including reducing staffing from 750 to 100 and projects are on hold. Although the spokesman added that it is looking to resume work on at least three projects next year.