Al Salam City project fails to get off the ground

Investors in Tameer's Al Salam City are being informed the project is on hold and allowed to withdraw their money or roll it over into another project, according to a company official.

"To our knowledge the project is not cancelled. We are experiencing delays because of lack of water and power supplies. We are suggesting options only to those who are impatient and want their money back," said Khurram Rahman, who heads the customer care section at Tameer. "The Al Salam City project has not been cancelled. The first cluster was expected to be ready in 2009 followed by others in the coming years. But because of lack of water and power there is a major delay."

And a Tameer sales agent said uncertainty surrounds the development in Umm Al Quwain, which had been designed to house up to half a million residents.

"About 70 per cent of the project has been sold. Some customers who have already bought are willing to wait to see what happens, but the government is not giving us any answers."

Meanwhile, Tameer is offering one of three options to dissatisfied customers who invested in Al Salam City. They can get a full refund, roll over their investment into Al Arjan, a residential project in Dubai, with a 20 per cent discount, or roll over their investment into any other project with a three per cent discount.

However, one investor in Al Salam City, who did not want to reveal his identity, said prices have gone up so much that he can no longer afford a comparable two-bedroom townhouse in another Tameer project. He said two years ago he paid Dh550 per square foot for a townhouse in Al Salam City, but if he took his money out he would be asked to pay Dh1,200 to Dh1,500 per sq ft for a townhouse in Al Arjan.

In January, the Middle East Economic Digest (Meed) reported a long-awaited agreement had been signed to hand responsibility for power generation in the Northern Emirates to Abu Dhabi. Under the deal, the five northern emirates will depend on the Abu Dhabi Water and Electricity Authority (Adwea) for power. In future, the Federal Electricity and Water Authority (Fewa) could provide Adwea with land to develop new plants in the north.

The memorandum of understanding between Adwea and Fewa would be followed by a power purchasing agreement under which Adwea will supply the northern emirates with 2,500MW of power up to 2015, Meed said.

Water supply for new developments in UAQ has also been set back as a $545 million (Dh2 billion) desalination project, which was expected to become operational by the first quarter of 2008, has yet to break ground and no contractor has been selected for the project. In 2006, Imdad – a joint venture between Saudi-based Al Rajhi Investment Group and the Government of Umm Al Quwain – first announced the desalination project to produce and distribute water to the emirate, including upcoming developments, and to export water to other countries.

Eight companies submitted tenders for the contract to build the plant, but so far no tenders have been issued.

Meed quoted a source close to the project as saying: "The Imdad project has been cancelled… I understand it is because of problems between the two parties [Al Rajhi and the Umm Al Quwain Government] within the client. As a result, there has been little activity since bids were submitted by contractors in 2007."

Umm Al Quwain property law

Law No3 of 2006 provides that freehold title may only be granted to UAE and Gulf Co-operation Council nationals and public joint stock companies in Umm Al Quwain.

The law further provides that non-UAE nationals may own floors (excluding the land) of buildings situated in any of the investment zones. The law also permits non-UAE nationals a right to a 99-year usufruct (similar to a lease) or a 50-year right of musataha (right to build) in respect of land situated within the investments zones.

Given increasing overseas interest in investment in the UAE, it is expected the laws that regulate real estate will continue to be refined in the future, Clyde & Company, an international law firm, said recently.

It is not simply the opportunities for investment return that has made freehold property ownership a sought after commodity, but also a general willingness of those non-UAE nationals living and working in the UAE to obtain the same type of property ownership rights that they would perhaps major projectsexpect to be available in their home countries. There are also the obvious inheritance advantages that come with a freehold title, the firm said.

Major projects

UMM AL QUWAIN MARINA

It is a $3.3 billion (Dh12.1bn) development undertaken by a joint venture between the Government of Umm Al Qaiwain and Emaar Middle East. The project will be a waterfront community along the shores of Khor Al Beidah. It incorporates residential, retail and recreational facilities, sport and yacht clubs, waterfront resorts, boutique hotels, schools, community centres, beaches and landscapes with parks and trails. It will cover an area of 2,000 acres with 23km of waterfront. The total navigable water area, including marina and a set of canals, is about 450 acres. The masterplan envisages 6,000 villas and 2,000 townhouses. Exclusive villas will have facilities to allow owners to moor their boats by their door. A town centre will have retail and leisure facilities; other amenities include gyms, tennis courts and swimming pools. An additional 1,200 resort- and hotel-rooms are also planned. The first and second phase of residences in the Mistral community within the Marina has been launched. It comprises Spanish and Portuguese-styled villas. It will have six zones: Town Center Marina Zone; West Mainland Villa Zone; Mainland Townhouse Zone; East Mainland Villa Zone; Three Islands Villa Zone; and Exclusive Island Villa Zone.

WHITE BAY

A resort-style community project being built by Emirates Sunland Group. The development will be built around a town centre including retail, restaurant and community amenities. White Bay will maximise water front access for the public, whilst maintaining private waterfront villas. The Dh8bn development will cover more than 19 million square foot along the natural shoreline, built around two man-made islands. White Bay will have an arrangement of 8,000 leasehold residential units as waterfront villas, park-view villas, terraced condominiums, mid-rise apartments and townhouses. The development is being built in 10 phases.

Follow Emirates 24|7 on Google News.