DUBAI: Investors in a luxury Dubai equestrian development that was repossessed by Dubai Islamic Bank yesterday will be compensated, the Gulf Arab commercial hub’s real estate regulator said.
DIB shocked investors this week by saying it had repossessed a “substantial area” in Dubailand, a multibillion-dollar luxury theme park that was set to include world-class polo facilities. The news sent DIB’s shares down sharply as investors struggled to calculate how much the high-profile foreclosure will cost the United Arab Emirates’ biggest Islamic bank, which is already embroiled in a real estate corruption probe.
At it’s 2004 launch, Dubai’s Plantation Project promised to create one of the world’s largest equestrian facilities with air conditioned stables for 800 horses.
“The rights of all parties who invested in the project are 100 percent guaranteed, based on the DIB management’s commitment to all the contracts and agreements signed between the developer and the investors, as long as they are proven,” Al-Khaleej newspaper quoted Marwan Bin Ghalita, head of the Dubai Real Estate Regulatory Authority (RERA) as saying.
The regulator called on all investors in the Plantation Project to approach DIB with documents proving their ownership.
Bin Ghalita told the newspaper that a dispute had broken out between DIB and Plantation over the development of the plot in Dubailand shortly after they had reached a deal and sold some units. The regulator had stepped in to resolve the dispute.
Worries about an overheated property market in Dubai have sent real estate and financial stocks reeling in recent weeks with most indices erasing all 2008 gains.
The government’s anti-corruption campaign in Dubai, which started this year and has also touched DIB, has resulted in a number of arrests. But worries persist that the property boom has resulted in widespread kickbacks, corruption, or waste.
