UAE | Housing & Property

Bank takes control of land for $3.5b real estate project

Dubai Islamic Bank said on Thursday it has reposessed a "substantial area" of land in a $3.5-billion luxury theme park project in the latest controversy to hit Dubai's booming real estate market.

  • By Suzanne Fenton, Staff Reporter
  • Published: 00:30 September 12, 2008
  • Gulf News

Dubai: Dubai Islamic Bank said on Thursday it has reposessed a "substantial area" of land in a $3.5-billion luxury theme park project in the latest controversy to hit Dubai's booming real estate market.

Plantation Holding, the company behind the project in Dubailand, said the bank did not have "the legal grounds to do so." DIB has taken over Plantation in order to recover funds previously lent to the company.

In a statement on the Dubai Financial Market's website, the bank confirmed that they have "assumed ownership of the land which is the site for a premium property development project, known as Plantation project."

The development worried investors, who scrambled to figure out the financial impact of the foreclosure on the bank. DIB shares ended 3.18 per cent lower to close at Dh6.40.

Earlier, amid frenzied rumours that DIB had bought Plantation assets, DFM suspended trading of shares in DIB until the bank provided confirmation. "At all times, DIB had strong control of the security, as well as other securities covering the same transaction and waited on foreclosure as per the legal requirements of the foreclosure process," DIB said in the statement.

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