Palm Springs Investors Group

Yet more adverse publicity for DAMAC, this time from David McGee’s blog direct from Dubai:

DAMAC’s attempt to ‘buy-back’ its Palm Springs project, Palm Jebel Ali 5 years after its launch will surely go down as one of DUBAI’s greatest disgraces. While Damac is not owned by the Dubai government, it presents itself around the world as ‘Dubai’. What has happened here is that Damac sold out the project 5 years ago, and cannot now build it without incurring a significant loss. It is attempting to buy out all of its customers by offering to pay them a measly 6% per annum on the sum invested. There are other Developers who find themselves in the same position, but are not resorting to these disgraceful tactics. Greedy Damac doesn’t deserve your money. A real case of ‘I will only play this game if it suits me’ and ‘expect me to go home if I am not winning’. Surely Damac are bigger than that ?

Sadly, the answer is no. Damac’s response would seem to be “no sir, we are not interested in honouring contracts given to customers who invested in Palm Springs in good faith, after all we are so big that we not give a damn about those puny people called investors”. And to make all you poor Damac clients feel even more irritated, Damac have either sold the land they were going to build Palm Springs on at a very enormous profit, or they will launch a new project – when things are ‘quieter’. Yes, this is how Damac are. Just not to be trusted. You are not valued by them. You are just an easy profit target, ready to be abandoned when they have your money. You are just potential victims of their equally disgraceful pricing strategies. This is one incident that needs to hit the international newspapers. I am not sure Sheikh Mohammad knows what is going on here. And he would NOT be happy with the damage Damac’s decision will have the hard earned, and deserved, respectable reputation of Dubai. It is time Damac were brought to book.

We await with interest for some response from HH Sheikh Mohammad, and from the Dubai authorities. The Palm Springs Investors Group do not intend to let the matter to rest until fair and proper justice is achieved.

Angry investors in the coveniently ‘cancelled’ flagship Palm Springs project are planning to distribute leaflets at property exhibitions hosted by Damac, or exhibitions where Damac is participating. Also being considered are protests and distribution of leaflets at Damac investor meetings to highlight the unethical and possibly illegal attempt by Damac to cancel the Palm Springs project. Some investors have already been in contact with the BBC, Channel 4, and other media to alert them of the dangers of dealing with Damac.

Unconfirmed reports suggest that a number of investors are on their way to Dubai to personally put their case to HH Sheikh Mohammed, ruler of Dubai.

It is our opinion that Damac need to take swift action to prevent damaging their reputation and their desire to become a leading global Real Estate player.

Damac should be aware that investors may adopt the following plan of action:

• Try mediation with Damac to resolve grievances
• Complain to Nahkeel
• Complain to Trading Standards, London where Damac’s head office is based
• Complain to UK Chamber of Commerce with a paid advert in UK Press
• Write to HH Sheikh Mohammed asking him to intervene
• Take group legal action in UAE court for consequential loss.

The possible solutions are either pay investors at current market prices, swap like for like. or for Nahkeel to build it for investors.

Investors are urged to contact Peter Riddoch directly on peter@damacproperties.com and direct number 00971504549430

Palm Springs was a property launch during the early, formative years of the real estate market in Dubai. The success of Palm Springs was a foundation stone on which Damac was able to build substantial sales growth through several subsequent successful property launches. The Palm Springs investors placed trust and confidence in Damac in these early years. These investors whom Damac are now seeking to penalise, are the very individuals on which Damac’s success is based. Any Damac intent to cancel the Palm Springs project is morally reprehensible.

I am still in shock with the news, and along with I guess like minded people who waited several years extremely angry

Well, A corrupt company will take your money from you and if the property goes up ,they will give your money back and sell it back at a higher price ,but if it goes down they will build it for you ,basically head you lose ,tail you lose. The winners are damac.

SHAME ON YOU DAMAC. YOU HAVE NO HONOUR OR INTEGRITY SPECIALLY IN A COUNTRY WHEN HONOUR IS EVERYTHING

Dishonest, Arrogant, Money-Grabbing, and Corrupt

Damac are a waste of time and they need a kick up the arse with regards to this Palm Springs project. They are liars and I am sure that Nakheel do not even know about what Damac are doing and telling there customers. This is a scam and there is more to it then what we are seeing!

We all have very severe doubts about Damac’s capability of completing any of its projects. Even if they do eventually start building and delivering finished properties, goodness knows when this will happen.

I also think that Damac will have looked at the phenomenal success of the Palm Jumeirah, realised just how valuable the real estate on Palm Jebel-Ali is likely to be soon, and decided to build something much bigger (i.e. much more lucrative) on its plot with starting prices no doubt in the 3,500 – 4,000 AED range.

This leaves it with a problem. “What are we going to do about the fact that investors in Palm Springs actually own that space now? Hmnnn. I know, let’s just get rid of them for a song.”

I will be very surprised to see Ocean Heights completed after 4 years of delays,the cost to build this project must have went through the roof and we could be next to see a letter drop the door. I rue the day I took anything to do with Damac and there shoody business practices.

We, the investors are gutted to hear that you have decided to cancel the Palm Springs project. It is quite clear to us that the reason given for cancelling the project is groundless, and merely an excuse to wriggle out of your contractual obligations. This is unethical and very bad news for Dubai real estate industry. It will only tarnish the reputation of Dubai as a safe place to invest, and will have a damaging effect on the image of Dubai his Royal Highness Sheikh Mohammed of Dubai has been trying to build and promote over recent years.

The force majeure clause you refer to in your letter only deals with non-completion of the Palm Jebel Ali or non-delivery of the plot; none of these things has happened or is expected to happen in future. The changes to the plot and redesign of Master plan by Master Developer that you refer to as the reason for cancelation is well within the provisions of clause 13 of the sales contract of Palm Springs and by the virtue of the same clause Damac as the seller has sole discretion to make any changes, vary or modify the plans which includes architectural, structural, landscaping etc.

In June 2004 you informed investors that you had purchased the plot from the Master Developer and waived your right of automatic laps of sales contract accordingly, if the changes to the location of plot as a result of redesign of Palm Jebel Ali are outside the scope of your purchase contract with Master Developer, then it is between you and them rather than between you and the investors. We see no reason why you are no able to make any necessary changes to the plans of Palm Springs project to adapt to the new plot being delivered by Master Developer, and I am sure you will have the support of all investors in this.

Your decision to cancel the Palm Springs project is not only extremely disappointing, but means large financial loss for us. The only fair outcome is either delivery of our apartments in the new plot, or full and fair compensation based on current market value.

We do not accept your apparent ‘cancelation’ of the Palm Springs development, and reject your offer of 10 March 2008. We intend to use all available means to protect our interest in this investment.

However, should you re-considered your decision, we will only be too happy to lend you our full support in every aspect of this project in every way possible.

“Honesty is the road to success. He who lies only believes himself”, Sheikh Mohammed, Ruler of Dubai

• Do you believe in honesty, integrity and fair practice in business?
• Do you believe in the law of contract? Are not the investors who purchased their units from you the legal owners?
• Is the Dubai government aware of your actions? (they soon will be).
• Did you sign a contract with Nakheel in 2003 setting out the terms of the purchase of land at The Palm, Jebel Ali from Nakheel?
• Please provide a copy of the contract signed with Nakheel
• Did you (Damac) have any input in the re-design of Palm, Jebel Ali, and if so did you make any representation on behalf of your investors?
• Have Nakheel failed to abide by their contract?
• If Nakheel have failed to deliver according to the contract, why are you not taking legal action Nakheel in order to fulfil your obligations to your investors?
• Why has it taken you so long to inform investors of the ‘cancelation of the Palm Springs project?
• Are in cahoots with Nakheel to defraud investors in an attempt to pocket profit that rightly belongs to investors?
• What other projects have you cancelled, and are planning to cancel in the near future?
• What is the offer of 6% interest (or 15% discount) based on? Are you not aware of the true current market value of the Palm Springs units you are trying to illegally take back?