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Harder and harder to see
Something needs to be done about the lack of transparency in distressed property developments in the UAE.
March 8, 2011 4:05 by Eva Fernandes
When it comes to property stories in the UAE, Kipp has noted the developments in stories are both spare and sporadic. Take for instance, the Palazzo Versace that we recently wrote about; very little was known about the development of the project. All we heard was the initial hype back in 2007/2008, about how Dubai will be playing host to a designer hotel and quite possibly the world’s first air conditioned beach.
And then, for three years we heard absolutely nothing about the project until a report in The National this week which said that it was nowhere near opening any time soon (a year at the minimum was their estimate). Now, although Kipp doesn’t have the kind of money you need to tie up in million dirham property developments, we can imagine the kind of frustration this lack of transparency can inspire in investors.
Of course, part of the reason is that distressed property litigation is both tediously complicated and unprecedented in most cases. But with the number of developers struggling you’d be forgiven for thinking that the papers should be abuzz with progress reports and stories of litigation; but of course the reality is far from that.
Take, for instance, the White Bay project that was cancelled when its developer Al Murjan Real Estate filed for bankruptcy in Sharjah, and appointed two liquidators. Do you remember that story? The company declared insolvency, which was the UAE’s first court-mandated bankruptcy of a distressed property project since the downturn hit, all the way back in November of last year, and since that time there have been barely any reports about it in the local press.
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