Hundreds of property owners around the "Race to Dubai" golf course are still waiting to move in more than eight months after the tournament concluded because Nakheel has not completed the infrastructure. With most of its large-scale construction sites at a standstill, the developer of Jumeirah Golf Estates hopes to settle about Dh4 billion (US$1.08bn) of claims from its contractors by the middle of this month. Jumeirah Golf Estates is not among the six "priority" projects that Nakheel said last week would shortly resume.
Irish-owned CHI Development completed 121 villas at the Dh750 million Lime Tree Valley villa community shortly before the Race to Dubai golf championship last November. It is the first of 10 communities planned at the Earth and Fire courses to have been completed. But just a week after the tournament finished, Nakheel's parent company, Dubai World, asked creditors for a six-month standstill as it sought to restructure $23.5bn of debt.
Work on roads and utilities at the Earth and Fire courses, where 1,000 villas are planned, stopped shortly after Dubai World's November 25 debt announcement. "Without infrastructure, you can't hand the homes over," said Roger Wakeham, the director of development at CHI. "They're commissioned, but we need to have all the approvals and compliance certificates before you can hand them over properly, especially if the homes are mortgaged."
Other projects at the development, such as Whispering Pines, which was due for completion in March, have also been held up, a homeowner at the project said. Prices have also fallen across the development: a three-bedroom villa at Whispering Pines is now selling for about Dh4m, compared with the original Dh5.4m, an internet listing shows. Meanwhile, an investor trying to sell a five-bedroom villa at Lime Tree Valley is asking for Dh6.4m.
Nakheel took over Jumeirah Golf Estates from its sister company Leisurecorp in the middle of last year as Dubai World started its restructuring. The majority of the villas sold at the Earth and Fire courses are being built by sub-developers, with a handful planned by Nakheel. Meanwhile, two other golf courses - Wind and Water - planned at the development are on hold. The golfers Vijay Singh, Sergio Garcia and Greg Norman and the course designer Pete Dye were signed up to design the courses when the development was launched in 2005.
A Nakheel representative said the company was "in the final stages of assessment of construction completion requirements [at Jumeirah Golf Estates]", adding that it "should be in a position to communicate revised completion dates to stakeholders within the coming months". The developer said last week the six projects on its priority list were Jumeirah Park, Al Furjan, Jumeirah Village, Jumeirah Islands Mansions, Jumeirah Heights Clusters and Al Badrah.
However, in a newsletter sent to property investors at Jumeirah Golf Estates in May, Nakheel assured them that "a significant proportion of the cash being made available by the Dubai Financial Support Fund (DFSF) will be used by Jumeirah Golf Estates to complete the development of those phases nearing completion, providing immediate assurance for customers in these phases". Nakheel has already started paying its smaller trade creditors, those that are owed Dh500,000 or less, as part of a wide-ranging offer made to them in March when the Dubai Government said it would inject $8bn into the developer through the DFSF.
Mr Wakeham said that while there had been a lot of frustration among property owners at Lime Tree Valley, most of them had been understanding about the delay. "A lot of people have been affected by the recession ? Obviously there's a lot of frustration, but there's also been an element of pragmatism. Everyone needs time to recover and get used to the new reality." agiuffrida@thenational.ae