The size of a flagship real estate project in Ajman is to be halved amid concerns that most investors have not made any payments for the last eight months.
There are now major doubts about the future of the $5.4 billion Awali City project with master developer Awali Real Estate Investments blaming the global economic crisis for the state of affairs.
Amal Amir, sales and marketing manager at Awali Real Estate Investments confirmed that the project has major problems and that it is likely to be resized by up to half its original size.
‘There are 136 plots of land and all had been sold at the time of launch. Most of our investors have stopped paying us for the past eight to nine months and so we are in talks with every one to find out their plans,’ Amir said. ‘We will be reworking the master plan once we get feedback from all our investors,’ he added.
Amir said the company may even return land to the Ajman Government. ‘We are paying the government even though we are not getting payment from our investors. In case we don’t have a sizeable number of investors who want to go ahead with their projects, then we may return land to the government,’ he said.
Amir also explained that the company has not forfeited any deposits or cancelled any contracts as such steps have to be taken after informing the Ajman Real Estate Regulatory Agency.
It is not the only project in the northern Emirates area that is troubled. Ras Al Khaimah-based Saraya Development Group confirmed that it has suspended sales in its $1.4 billion project citing a lack of availability of electricity. The apartment blocks run off generators and this has produced a number of power surge problems for residents.
Omar Agha, Saraya’s managing director, said the suspension of sales was temporary, however, and he stressed that the project had not been cancelled or put on hold indefinitely.
‘In the light of the financial crisis and issues pertaining to the availability of power in RAK, Saraya’s directors opted to slow the project down,’ he explained.
He added that Saraya has given a 100% refund to all its investors in the project and it is now working out a new development strategy and a new phasing plan for the project and this is expected to be completed by the end of this year.
