As part of its $9 billion recapitalization plan, Nakheel – part of Dubai World conglomerate, offered a ray of hope for investors in its unfinished projects.
Nakheel says it will use a portion of $8 billion in cash it will receive from the government of Dubai to complete construction of “near-term projects.” It is also promising to “provide customers with clarity on completion and handover dates of those projects.
The developer also says it will continue to offer customers in “longer term” projects the option of “receiving credit equivalent to 100 per cent of their installment payments and swap into projects nearing completion at today’s market value.”
The key phrase there is “today’s market value,” which is unlikely to please investors who bought at the top of the market. Values in Dubai have dropped anywhere from 20 to 50 percent in the last two years, according to some studies.
“Those customers invested in longer-term projects that do not want to exchange their property for a property in a development nearing completion will be offered the option of a revised payment schedule or the option to hold the assignable credit for five years,” Nakheel said in a statement. “Customers would be able to swap the credit during this period for property or land, or for cash at the end of five years. The credit would carry no interest.”
