Schön says investors' money is safe
A senior official at Schön Properties yesterday assured investors their money was safe after work stopped on its multi-billion dirham Dubai Lagoon project.
The developer's vice-president Danial Schön spoke out after people demanded their money back when they were forced to continue their regular installments, despite no progress being made since May. So far, 25 out of 2,000 investors, whose properties were due for completion in December, have been told they can have their money back, although it will take time to release the case from escrow. And Schön said despite previous problems, Dubai Lagoon, near Dubai World Central, was back on track and would be delivered, albeit with a delay.
He told Emirates Business: "I can reassure people 110 per cent they will get their properties. That's our goal and we're not focusing on more projects until we've done that, as we want to focus our efforts on moving Dubai Lagoon forward."
Earlier media reports claimed the developer was refusing to return investors' money – something Schön denies, although the company is only willing to return basic installments.
Schön said: "We made the decision to give refunds for business reasons – there was no legal requirement for us to do it. It's not about us denying [investors] their properties because we want people to live in Dubai Lagoon and stay there in the long run.
"We didn't refuse to give them refunds, but their demands were unreasonable as some didn't just want their money back, but they wanted us to pay their rent for the past two years too."
Dubai Lagoon – not to be confused with The Lagoons being built by Sama Dubai in Ras Al Khor – is a residential development near Dubai Investments Park, including 4,000 apartments as well as restaurants and shops, all built around a central waterway. The mid-rise buildings were designed at a time when other developers were constructing high-rise towers.
Schön said it was hoped the low-rise design would appeal to people looking for an alternative to ubiquitous high-rise living.
However, the project has been beset by problems, with issues including work being delayed because of requirements by Dubai's Roads and Transport Authority (RTA), the blocking of a work permit and issues with contractors. But one of the main issues was the construction of Dubai Metro. "The RTA wanted to take 45 metres off our land for the Purple Line, but that would have run right through the centre [of Dubai Lagoon], so we agreed on 10 metres and had to redesign it accordingly," said Schön.
In the three years since the development was launched, rising construction costs have meant the project's budget has more than doubled, from Dh1 billion to about Dh2.2bn.
Therefore, remaining plots, to be put on the market later this year, will be sold at higher prices in a move by the company to safeguard its profit margin. An original delivery date for the first phase was set at December last year, which was then put back to this December. It has since been pushed back again, to the final quarter of next year. The whole development is due for completion in the middle of 2011.
Meanwhile, Schön has unveiled Libertas, a 22-storey building in Downtown Jebel Ali, exclusively to Emirates Business. Schön said: "The development is a very good concept because it's one of the most friendly free zones in the UAE that will allow most companies to operate. There's a major shortage of office space in Dubai so Downtown Jebel Ali will help fill the gap and be open to foreign companies." |
