Damac's buyback plan angers investors

Dubai: Investors in Damac's Palm Springs project on Palm Jebel Ali are furious at being 'bought off' by Damac due to project alteration.

Damac is now trying to 'buy back' its Palm Springs plot on Palm Jebel Ali five years after its launch.

Damac cannot go ahead and build the development without incurring a significant loss as the master-developer plans have changed.

Hussain Sajwani, chairman of Damac Holding said in a statement, "Damac Properties has been advised that the master development of Palm Jebel Ali has been redesigned and the Palm Springs plot will not be delivered. Due to redevelopment of the plots, the building forming the Palm Springs development cannot be situated on the re-allocated plot and, as a result, the Palm Springs project has been cancelled.

"In view of this, Damac Properties will provide customers an opportunity to release the investment made in Palm Springs and transfer the monies to any other project in the Damac Properties portfolio at a discounted price 15 per cent below current market value. As an alternative, Damac would refund monies paid with interest."

However, according to investors, Damac is only offering six per cent per annum on the sum invested.

Options

Investors are now considering taking the complaint directly to the Ruler's Court. Buyers are already furious over repeated project delays, contractual issues and complaints of poor customer service by Damac.

Marwan Bin Galita, chief executive officer of Dubai's Real Estate Regulatory Authority (Rera), said, "Any investor who has a problem or misunderstanding with a developer, please check our website, or email us or come and see us and we will clarify it for you. Or get legal advice. It's very easy but people don't want to spend money. The problem starts with people signing a contract without asking anybody first."