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Is Damac doing it again?
Palm Springs, one a project of Damac canceled and reinstated early 2008, may be at risk of being cancelled again.
February 25, 2009 3:26 by Itara Sharp
Damac, a Dubai-based real estate developer, may once again cancel construction on Palm Springs, the developer’s waterfront property on The Palm Jebel Ali.
Sources confirmed to Kippreport that Peter Riddoch, Damac’s CEO, informed investors that thanks to the current financial condition, The Palm Jebel Ali may never be built, and asked investors to consider using their Damac ‘credits’ to own apartments in other Damac properties or to accept full refunds.
He also stated that even if construction on The Palm Jebel Ali has not stopped, and if plots on the island were handed over to developers in the next five years, Damac will not build Palm Springs at the price they sold it for.
Damac has however told Kipp that the project is on schedule. “We are going ahead with all our projects, which includes Palm Springs,” the company said in a statement.
“As an organization, we are constantly reviewing our inventory and offering our customers value adding opportunities if and when they arise,” it said. “This may involve offering them transfers to other Damac Properties’ units in other projects that are being fast-tracked or at an advanced construction stage in order for customers to start enjoying their Damac homes sooner.
We always make it clear to customers that this is just an option for their consideration.
We consider this good business management and good customer service.”
Damac started selling properties in Palm Springs in 2003, and claimed to have sold all 240 apartments. The project was due for completion last year, but in March 2008, the developer cancelled the project, blaming redevelopment of the The Palm Jebel Ali by the master developer, Nakheel. Damac offered investors their initial investment (25 percent) plus six percent interest.
Nakheel then released a statement saying that it had informed investors of changes to the masterplan over 10 months ago.
Angry Damac investors formed a group and threatened to take legal action against the developer. Damac received widespread media coverage, with reports speculating that the developer tried to “buy back” the building because construction costs had increased.
The whole drama came to an end in April 2008, when Damac announced a reversal of its decision, and reinstated the project.
Is Damac going to go back on its word, again?