The next case Areifi Tower Dubai Marina – Mystery surrounds luxury Dubai tower
Posted by 7starsdubai on April 14, 2008
Saturday 12th April, 2008
Mystery surrounds the development of the Al Areifi Tower at Dubai Marina.
The 30-storey development of luxury residential apartments has been under a cloud for several weeks as reports have circulated that the construction has been stopped, abandoned, or delayed.
The developer, Khalid Saud Al-Areifi & Partner Co., of Riyadh Saudi Arabia, has reportedly been approaching investors who bought apartments off-the-plan, in a bid to buy the apartments back.
According to investors they are being told construction on the site has been stopped and will not resume.
Investors report receiving telephone calls and faxes from the company.
We have sighted a letter faxed to an investor from Khalid S. Al Areifi which states the project has been stopped, and the company ‘cannot complete the project.’
We spoke to the company who confirmed this, and recently a story was published to this effect.
It now transpires the company has not stopped construction at all. Several questions were emailed to the company to seek clarification, however they have gone unanswered.
On Saturday one of our journalists visited the site and found construction in full swing. The site has cranes and a stream of workers busily working on the building which has already been built to the nineteenth floor.
We contacted the builder, Buset Contracting on Saturday, who confirmed there has been no disruption to the construction. It is going ahead ‘full steam,’ he said. He confirmed the development had attained the 19th level, and there were eleven floors remaining. He said it would take another 15 to 16 months to complete.
The spokesman for the building company would not comment on reports the construction had been stopped, saying such questions should be directed to the developer.
Al Areifi, sold apartments in the complex off-the-plan around five years ago. In an unusual twist it discounted prices by 25% to sell the apartments on the basis of full payment being made upfront.
The prices of the apartments today outweighs those they were sold for, but this applies with almost all projects in Dubai.
Construction costs are increasing rapidly, however to date developers have been delivering pre-bought property without incident, although in most cases way behind schedule.
Al Areifi appears to be involved in trying to buy back apartments at their original cost, notwithstanding they have been holding full payment for several years. Falsely advising investors the project has been stopped, and will not be completed will likely incur the wrath of the authorities. Investors have long maintained several companies use misleading advertising and selling techniques in the high-pressure property industry in Dubai.
Another developer, the Dubai-based Damac Properties has been criticised in recent weeks for recently abandoning a project marketed five years ago.
The company said its Palm Springs residential resort on the Palm Jebel Ali was being cancelled because of changes on the site by the master developer, Nakheel.
Naheel, however, announced it had made no such changes and was unaware Damac was withdrawing from the development.
Angry investors, many from the UK, have disrupted Damac project launches, stormed their sales offices, and threatened a class legal action against the company. Worse still, Damac has suffered from the bad publicity, at a time when it is opening new international offices and launching major new projects.
Our advice from Damac is that it is currently reviewing its decision on the Palm Springs project.
Adding to the Al Areifi affair, and the Damac debacle, has been the extraordinary delays in the completion of property projects in Dubai, some spanning several years.
Both large and small developers are being caught up in the delays, as chronic labour, materials and resources shortgages have crippled completion schedules.
I think my next move is to visit the site in Dubai and consult/hire a lawyer (they are not cheap in UAE)
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