DUBAI: Shocking new details have emerged about the multi-million dollar Floating Seahorse project in The Heart of Europe on The World Islands — a manmade archipelago four kilometres off the coast of Dubai.
Last fortnight, XPRESS reported how Austrian developer Kleindienst brazenly sold scores of Floating Seahorse units to investors although the much-hyped project lacked basic approvals — and was neither registered with nor regulated by any government authority.
Following our January 25, 2018 report, several investors called us to share their fears over the fate of the project.
Floating house sinks off Dubai's Burj Al Arab area
As it turns out, their apprehensions are not misplaced.
Documents with XPRESS show Kleindienst not only charged between Dh5 million and Dh12 million for each Floating Seahorse but also — in a world first — made investors pay for plots in the sea.
Bizarre sales-purchase pact
“The buyer will sign two agreements: agreement for sale and purchase of the seahorse boat and plot sale,” reads an extract from one such bizarre ‘Plot Reservation Agreement’ between Kleindienst’s CEO and Dubai-based Emirati businessman Jalal Ahmed Abdulla and his partner, who forked out Dh1.3 million towards a 20 per cent down payment for a Floating Seahorse unit on the Germany island.
If this were not audacious enough, the agreements also promise investors title deeds from the Dubai Land Department, never mind the fact that they have nothing to do with the project.
“The title deed for the island plot will be issued by Dubai Land Department.
"The seller shall without delay, once the purchase price has been paid, submit all required documents to The World LLC [Nakheel subsidary] resp. the Land Department in order to enable the latter to issue the title deed in the name of the purchaser,” the sales purchase agreement states.
Marketing blitz ends in court
Nakheel said commercial agreements between investors were confidential, adding that they are “neither responsible for, nor involved in, the terms under which third-party developers carry out sales to their individual customers. All developers and investors must follow the laws and regulations set by the relevant Dubai authorities,” Nakheel said in an email to XPRESS.
Forget promised returns, three years on I’ve not been able to recover my capital (Dh1.3 milllion towards 20 per cent downpayment of a Floating Seahorse) which is stuck with them”
- Jalal Ahmed Abdulla, Emirati Businessman
Abdulla, who has since taken Kleindienst to court, said he is among many who fell for the company’s marketing blitzkrieg.
“They called me to a fancy event at Burj Al Arab and tricked me into believing that I can make good returns on my investment within months.
"Forget returns, three years on, I have not been able to recover my capital which is stuck with them. Worse, now I realise the Floating Seahorse isn’t even approved by or registered with any government authority.
“How was the company allowed to sell it in the first place? I am shocked beyond disbelief,” said Abdulla who heads the Jalal Ahmed Group.
An Indian expat who booked a Floating Seahorse in 2015 said he was assured of handover in 2016.
“All they’ve given are empty promises,” he said.
Bentley Motors has no relationship with Floating Seahorse properties and has not embarked on any partnership or collaboration to create a ‘Bentley Edition’ property”
- Spokesperson, Bentley Motors
“Klenienst told me they are building a hotel on one of their six islands and that I would make a lot of money if I lease out my unit to the management of the hotel which will operate the Floating Seahorse in the Heart of Europe.
“In the two years that have passed since then, little progress has been made,” he said.
'Project on track'
However, David Stafford, chief commercial officer at Kleindienst claimed nothing is amiss and the project is well on track.
So far, the company has completed only three seahorses.
One sank near Burj Al Arab, another toppled into the sea while being transported onsite and the third, being used as a mock up, is supported by sandbags to keep it stable.
Regardless of the fact that not a single Floating Seahorse is ready for delivery, the company has launched the "third phase" of the project.
We’re neither responsible for, nor involved in, the terms under which third party developers carry out sales to their customers. All developers must follow the laws and regulations set by relevant authorities”
- Spokesperson, Nakheel
Their latest edition comes with a price tag of Dh15 million and is called the "Bentley Edition".
However, the British luxury car manufacturer denied any association with the project. “Bentley Motors has no relationship with the floating Seahorse properties and has not embarked on any partnership or collaboration to create a ‘Bentley Edition’ property,” a spokesperson for Bentley said in an email to XPRESS.
Losing the plot as it thickens
Kleindienst may be at pains to describe the Floating Seahorse to XPRESS (they referred to it as a unit) but some of their sales and purchase agreements with buyers clearly call it a luxury boat. Buyers have been asked to sign two agreements - one for the boat and the other for the plot sale! In one such pact, a buyer has been asked to pay Dh1,380,000 for the plot on the completion date. Referring to a ‘building’ the agreement says that the seahorse boat is erected in a ‘submerge’ plot. It explains that “the submerge area means the floating area in which the seahorse boat will be erected and linked to the plot”. The title deed it promises from the Dubai Land Department is for an ‘island’ plot.
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