Investors irate over stalled Emaar development

Dubai: Jobless architect Sanjay K. looks up at motionless cranes over an abandoned construction site. His gaze falls upon a mesh of metal bars now brown with rust. He had invested all his savings in a one-bedroom unit in this project with borrowed money, for which he may face imprisonment.

Sanjay (not his real name) and several other investors last week showed to XPRESS the building site of 29 Boulevard Towers in Dubai's Old Town. The project, designed by US-based Frank Williams, is owned by developer Emaar Properties.

"It was greed that led all of us into this situation," said Sanjay, who requested that his name be changed because he has banks chasing him for loan payments.

Lost hopes

Sanjay spent Dh550,000 of his own money, plus a personal loan of Dh150,000 to pay 16 per cent of the price of the 740-square-foot unit he bought at Dh3.15 million at 29 Boulevard, nearly triple the prevailing market price today.

"I gave Emaar everything I had. Thankfully, my wife still has a job and is paying Dh10,000 as interest on the mortgage for this non-existent property. My plan was to sell it at a profit. Then the crash happened," said Sanjay, who was made redundant in January 2009, four months after he got hooked by the five per cent price reduction from Emaar when he bought the unit in August 2008. His story is on Facebook and Google.

Italian property executive Sylvia Turrin bought a two-bedroom unit in the same project off-plan three years ago. She also sold units from the same project to other Italian investors, many of whom have paid over 65 per cent of the unit price. "Three years have passed since its launch and it's still at the foundation stage. The work progress is less than 60 per cent.

"For people like me who invested in this project, it will be impossible to wait another three years," said Turrin.

Daily increase

Another investor, who paid Dh685,000 to Emaar for a 29 Boulevard unit, said: "I wanted to live in it or rent it. Emaar increased the price on a daily basis. In our group, we have people who have paid from Dh1,200 per square foot to Dh4,000 per square foot for the same type of apartment in the same building."

A senior Emaar official met some investors last week and had promised to answer their queries in a meeting on Wednesday. However, this meeting was cancelled.

"Let us withdraw from the ownership of this property as I don't believe they want to build this structure," said Sanjay.

The plan

29 Boulevard, Old Town, consists of two high-rise towers of 44 and 45 storeys with podium-level amenities and podium car parking.

Dubai Law No 8 of 2007 ("Escrow Law") came into effect on 28 June 2007.

The law guarantees buyers of units in "off-plan" developments that the payment instalments they were making to the developer were being used to construct the development.

The Real Estate Regulatory Agency (Rera), formed by Law No 14 of 2007 and which comes under the umbrella of the Dubai Land Department, has been given the responsibility of, among other matters, implementing the escrow regulations.