Trouble in paradise as plumbing problems hit Dubai's Palm island

The company’s website claims that each apartment in the complex provides "spacious layouts, high quality finishes and panoramic views to the garden, beach and marina".

Fortunately, the units are also "within walking distance to the Village Centre Shopping Mall".

While the plumbing problems do not extend to the multi-million pound villas, lavish hotels and apartment blocks on the rest of the Palm, the extravagant project has not been without its own problems.

Stretching almost four miles into the sea and big enough to be seen from space, the Palm’s trunk and 16 fronds, which were constructed from rock and sand dredged from the seabed of the Arabian Gulf, were once some of the most coveted pieces of real estate in the world – especially among Britons, who own about 25 per cent of properties on the island. When the first 2,000 villas and town houses on the island went on sale in 2002, they sold out in a month.

Styled by its owner, the government-backed Nakheel property development company, as the "eighth wonder of the world", the Palm captured worldwide attention when David Beckham, Michael Owen and nine other members of the England squad bought "signature villas" there when they visited Dubai en route to Japan and South Korea’s 2002 World Cup.

But there has been trouble in paradise.

Some of the "Palm pioneers", who were among the first to move onto the island, complained of their expensive villas being squeezed together like sardines, sky-high air-conditioning bills and repeated snags that led some to joke it should be renamed the "eighth blunder" of the world.

Then, during the height of the global financial crisis in 2008, property prices fell by as much as 40 per cent. Villas that had been selling for £1.8 million were suddenly fetching just £1.2m.

The economic turmoil also affected the pace of construction of the artificial archipelago, and two other palms that were being built beside it, setting completion dates back by several years.

Dubai realty picking up strength :: Abort America

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Friday, Aug 12, 2011

However, one developer stood out from the rest by consistently delivering projects on a regular interval – Damac Properties.

To date Damac has delivered 28 buildings with 6,045 units spanning 10,619,469 square feet of developed space. Before the end of this year it will complete a further eight buildings comprising 1,329 units spanning 2,513,015 square feet.

It also has a further 50 buildings at various stages of planning and progress across the Middle East, North Africa region. These consist of 9,849 units, spanning 16,886,151 square feet.

Damac, a Dubai-based developer, is also perhaps the only Dubai developer that has announced new projects — in Beirut and Saudi Arabia, after the crisis.

The million-dollar question remains: what makes it tick?

“We have very little reliance on banks or external finance. That helped us positively,” Ziad Al Chaar, managing director of Damac Properties, said. “When the financial crisis hit the market, we were at a very advanced stage of development of a number of projects. We took a full review of our projects and finance position.

“We decided to postpone construction of those projects that had not hit the ground by then and continue with those that were under various stages of construction. This helped us to continue to deliver projects.”

He said his colleagues had engaged with customers and explained the company’s determination to complete projects that were going through.

“We offered alternatives to the clients and asked them to shift to the projects that were under construction. Most customers appreciated this move and stuck with us. This helped us to fast track a number of projects,” he said.

“In the end, the strategy has helped both the customers and us.”

In an interview, Al Chaar elaborated his views on the market.

Gulf News: How do you see the market changing and when do you see it picking up?

Ziad Al Chaar: The market has hit the bottom at the beginning of this year. Things can only get better from there. It’s picking up. From our own experience, we see that the rates are picking up and the sales are also increasing — slowly but surely.

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