Palm Springs Investors Group

On 31 March 2008 ArabianBusiness.com published another article on Damac’s shameful tratment of its most loyal investors. Below is a summary of the article. The full article may be viewed here.

Devastated investors in Damac Properties’ axed development on the Palm Jebel Ali are facing millions of dirhams in losses, one of the project’s investors has told ArabianBusiness.com.

Prior to the cancellation of the project, Palm Springs units were estimated to be worth more than double the original purchase price, according to investors.

Nearly 60 UK-based investors in the project have formed a group to take on Damac, giving the developer until April 11 to reverse its decision or face legal action.

London-based investor Karl Brown told ArabianBusiness.com members of the group were facing average losses on their investment ranging between 300,000-600,000 dirhams ($81,000-$163,000), depending on when they purchased their unit.

Brown said he bought his Palm Springs apartment on resale in March 2006 for 1.5 million dirhams and believes the property is now valued at more than 2.2 million dirhams.

However, he will only receive the original purchase price, estimated at about 1.1 million dirhams, plus 6% interest for each of the five years since the project’s launch.

Damac have told Brown that it was not the developer’s contractual obligation to refund money that was paid on resales.

UK investors’ losses are compounded by the rising value of the British pound against the dirham.

Brown said the group, the Palm Springs Investors Group, was appealing to Dubai’s Real Estate Regulatory Authority (Rera) and Nakheel, master developer of the Palm Jebel Ali, for assistance with the dispute.