Nakheel's flagship Palm Jumeirah project
Nakheel’s ambitious Palm Jebel Ali project will not be cancelled and will be developed in the “long-term”, its chairman has confirmed.
In an exclusive interview with Gulf Business, Ali Rashid Lootah said that the launch of the project would depend on the market.
“It’s a long-term project for us. [The launch of the project] depends on market behaviour.
“Palm Jebel Ali is almost seven to eight times the size of Palm Jumeirah; it’s not easy. It is very costly, with regards to infrastructure and everything. But we have a commitment to it, and will not cancel the project,” he said.
Work on the mega development, the second among Nakheel’s Palm projects, began in 2002, but construction was suspended after Dubai’s property crash in 2009, when the developer faced a major crisis and was later forced to undergo a $11 billion restructuring.
Nakheel offered investors the option to swap their stakes to its other projects in Dubai such as Palm Jumeirah, or stick on with a revised payment plan.
However, in November last year, 74 investors wrote to Mohammed Al Shaibani, the director general of the Ruler’s Court and CEO of Dubai Investment Corporation, urging him to look into the matter.
“Since 2003, we have all paid between 30 per cent and 50 per cent of the price of our homes to Nakheel,” they wrote.
“The lack of certainty as to when our homes will be built has caused, and is causing, tremendous financial and emotional suffering for us and our families, and many of us continue to endure ongoing mortgage and rental costs whilst we are waiting. Many of us have invested our life savings into the Palm Jebel Ali.”
It added: “We have watched with hope as Nakheel has launched and delivered new projects, move into profitability and paid off its debts. We very much hope that this will now be reflected in the re-launch of this project and that construction will re-commence on our homes.”
According to Lootah, the developer offered investors all the possible options soon after the project was stalled.
“What can I do if they are not happy with anything? We gave them the option to shift to Palm Jumeirah, which was fully developed. Many investors took that call and the price tripled after they moved there,” he said.
“A lot of people – not only villa owners, but also people who bought plots for development, hotels or buildings, they moved. And they are happy.
“Some people also swapped into other properties. But some people just want to wait – what can I do?,” he added.
However, the company has started launching certain portions of the Waterfront project in Jebel Ali, he confirmed.
In January, the company said it plans to build 80 apartment buildings on the site. It is also developing nearly 800 homes at the Badrah and Veneto communities within the Waterfront.
Badrah, an affordable housing project, will almost 600 townhouses and apartments spread across eight low-rise buildings. It will also house offices, educational and civic amenities and retail and leisure elements.
Veneto, a residential district, will comprise villas, townhouses and low-rise apartments.
“For the long-term projects in the Waterfront, we gave people the option to stay but we gave them a longer payment plan. So it is due time that we have to do some infrastructure for these people who have stayed and accepted the new payment plan with us.
“We will be doing more around that area. It is moving ahead,” he said.
The entire exclusive interview with Ali Rashid Lootah will be out in the April issue of Gulf Business.