Dubai: With Dubai starting to clear off long-delayed or shelved projects, investors in the massive Dubai Lagoon development from Schon Properties are hoping to see some movement happen on the 16-year project that is yet to deliver. Dubai Lagoon was launched with much fanfare in 2005-06 as one of the city’s more affordable projects, with its location being in the then emerging mixed-use destination of Dubai Investment Park.
The investors point out that the land assigned to for Dubai Lagoon is far more valuable than at the time of the launch. If the area can be sold to a new investor, the investors stand some chance of recovering their funds, even partially. Dubai Lagoon was supposed to be a cluster of low-rise buildings, numbering 54 altogether.
“The last communication investors had was that handovers would begin from June 2020 – that was made two or three years ago,” said Taimur Rana, an investor who bought a one-bedroom apartment right at the time the project was launched. Until now, he has paid half of the Dh530,000 cost of the one-bedroom apartment.
“We had become used to Schon pushing back handover rates on Dubai Lagoon all these years. There has been no progress on site apart from a handful of buildings, which too are incomplete.
“If the Land Department or RERA (Real Estate Regulatory Agency) can intervene directly and take over the project, all of us investors can hope for some recompense.”
I purchased a one-bedroom in 2005 and paid everything by the payment plan. The delivery dates were 2007 and changed multiple times. Out of 54 buildings, not a single building has been handed over
Dubai in the recent past has made it clear that it intends to find a permanent solution for all real estate projects that never made headway after their launch between 2005-09. Since all of these projects were sold offplan, investor funds have been stuck for years. At some of the affected projects, such the Dh1 billion Marina 101 skyscraper in Dubai Marina, property buyers had paid off all the installments on the multi-million dirham apartments.
The plan by the Dubai authorities is to fast-track all legalities involved in reviving such projects in some way or the other so that investors will finally have some sort of closure.
While offplan sales at Dubai Lagoon were an immediate hit, matters related to the construction side of things did not quite come together from the beginning. What was supposed to be a three- or four-year handover got bogged down. Even as the rest of Dubai Investment Park became a hive of activity with residential, commercial and industrial projects, Dubai Lagoon schedules never met what the developer had promised investors.
According to Fouziya Fathudeen, a Kuwaiti national, “I bought the one-bedroom apartment for my daughter at the end of 2005 for Dh492,000. It’s now 16 years and I request the authorities to look into this matter and get us justice.”
This is not the first time that investors are calling for help from RERA, which has in the past tried to work out some sort of arrangement with Schon to get the project going. The last attempt was made as recently as in 2019.
Prior to that, Schon had roped in contractors to come on board as part-investors in the project. Based on market feedback, nothing much emerged out of that. The project site is still mostly barren.
I purchased Dh954,000 for a two-bedroom and paid Dh554 plus Dh39,200 as registration fees. I look forward to getting back my money from the escrow account
Surprisingly, some of the apartments in the few buildings that were built started to show up on the local property auction site in recent days. Based on information available, none of those units were picked up by buyers.
“The only solution to a community-style project that got delayed is for a new investor to come in and pick up the whole,” said an industry source. “Buying property units would not make sense to any investor.”
As for property owners there, their only hope is vested with what the authorities can do to sort out a legacy issue. Muhammad Ayub is one such investor: “I purchased a one-bedroom and all the payments were made. Delivery was promised back in 2007 and then moved to 2009 - and as we speak, the building is yet to start construction.”