Northern Emirates begin to feel heat of property slump

The Dh20-billion Awali City in Ajman is likely to be resized after claims there have been a number of payment defaults by investors, Emirates Business can reveal.

Master developer Awali Real Estate Investments said the project could be resized to three-quarters, or even half its original size.

"There are 136 plots of land and all had been sold at the time of launch. Most of our investors have stopped paying us for the past eight to nine months and so we are in talks with every one to find out their plans," said Amal Amir, Sales and Marketing Manager, Awali Real Estate Investments.

"We will be reworking the master plan once we get feedback from all our investors." Amir said the company may even return land to the Ajman Government after assessing the feedback from investors. "We are paying the government even though we are not getting payment from our investors. In case we don't have a sizeable number of investors who want to go ahead with their projects, then we may return land to the government."

The company has not forfeited any deposits nor cancelled any contracts as such steps have to be taken after informing the Ajman Real Estate Regulatory Agency (Arra).

"We will return deposits or forfeit them after informing the authorities," she said.

Earlier this month, Arra Director-General Omar Al Barguthi said developers will not be allowed to arbitrarily cancel any sales and purchase agreements without permission.



SARAYA SUSPENDS RAK SALES

The UAE property sector's troubles continued yesterday with Ras Al Khaimah-based Saraya Development Group suspending sales of its $1.4 billion (Dh5.14bn) project citing a lack of availability of electricity.

Omar Agha, Saraya's Managing Director, said the suspension of sales is temporary and the project has not been cancelled or put on hold indefinitely.

"In the light of the financial crisis and issues pertaining to the availability of power in RAK, Saraya's directors opted to slow the project down," said Agha. "Before the financial crisis started, the project's development plan was an aggressive one with completion planned on a fast track basis."

Agha said a decision was taken by Saraya's board in December 2008 to suspend some design plans on the project and terminate some others. He said Saraya has given a 100 per cent refund to all its investors in the project.

"To protect the interests of buyers and Saraya's reputation, the board resolved to refund all deposits and instalments paid by customers, which has already been done."

Agha said Saraya was working out a new development strategy and a new phasing plan for the project and this was expected to be completed by the end of this year. (Anjana Kumar)

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.

Follow Emirates 24|7 on Google News.