Dubai brokers compete to sell Palm Jebel Ali homes

December 16, 2022, 6:47 AM

Nakheel set to restart construction of stalled mega-project in early 2023
Real estate agencies jostling for business from master developer
Development to include beach villas, apartments, hotels and shops

Dubai real estate agents are signing up to sell homes when developer Nakheel relaunches the Palm Jebel Ali manmade island development in the first quarter of next year.

Industry sources told AGBI the project, which was launched in 2002 but has been on hold since 2008, is set to start construction soon after the official launch in early 2023.

Real estate agencies in the emirate have been made aware of the Palm Jebel Ali plans and are now jostling to win work from master developer Nakheel.

At the same time hundreds of investors who bought off-plan units at the project in the early 2000s have been offered financial compensation to either sell their property or reinvest in the scheme.

Nakheel has reached an agreement with investors whereby those who bought off-plan units directly from Nakheel would receive full refunds if they decided to exit their investments.

Otherwise investors can opt to reinvest in the relaunched project with a credit note worth 1.5 times the value of their original investment, to help compensate for rising land values.

“The company continues to work with the remaining investors to complete the financial formalities, with funds set aside for such repayments,” a Nakheel spokesperson said.

The negotiations with investors had been ongoing since 2011, after construction work at the Palm Jebel Ali ground to a halt in 2008 due to the global financial crisis.

The project in its original guise was officially cancelled by the government’s Dubai Land Department earlier this year, according to Nakheel.

Bloomberg has reported that the developer is offering 400 investors who collectively own more than 700 properties that were due to be built on the island – mainly within planned neighbourhoods called the Palm Jebel Ali Fronds and Palm Jebel Ali Water Homes – around AED850 million ($231.4 million) in compensation.

There are additional investors who bought off-plan units from other developers involved in delivering property on the island, and they have yet to reach a settlement, Nakheel said last month.

“[Nakheel] continues to be committed to working with this group, but all settlements will be based on the full amount received by Nakheel, and not on secondary market transactions that did not involve the company.”

Launched in 2002, Palm Jebel Ali was to be one of the three palm-shaped manmade archipelagos Nakheel planned to build off Dubai’s coast. It completed only one as envisaged – the 460-hectare Palm Jumeirah, which contains some of the emirate’s priciest and most luxurious real estate.

The July sale of a mansion on the Palm Jumeirah for AED302.5 million (US$82 million) set a new record for the most expensive home ever to be sold in Dubai.

Demand for beachfront villas is surging in Dubai at present, in part because so much of the coastline is built out and few development sites remain.

Extending the length of the emirate’s public beaches by as much as 400 percent is one of the targets set by the government in its 2040 urban masterplan (the second phase of which was unveiled this week), and completing the development of coastal destinations such as the Palm Jebel Ali could help with this, one property agent said.

An update from Nakheel in 2008 said the project would add a further 100 kilometres of coastline to Dubai.

Located a 15-minute drive from Dubai Marina, the Palm Jebel Ali is one and half times as big as the Palm Jumeirah island.

The Dubai government’s original masterplan to be delivered by state-owned Nakheel proposed the construction of around 2,000 beach villas, plus apartments, townhouses, and more than 1,000 “water homes” accessed via jetties from the end of each frond.

There was also to be a variety of hotels, shops, restaurants and other property, including a leisure attraction called Worlds of Discovery, which was to resemble a giant killer whale once complete and feature attractions such as SeaWorld and a theme park brand called Aquatica.

Nakheel has yet to reveal any revised masterplan for the Palm Jebel Ali, although the Financial Times has reported that up to 1,700 beach villas and 6,000 apartments could be built.

“The Palm Jebel Ali project was based on a masterplan developed over 15 years ago. It required extensive planning and redesign to meet the current standards for master planning of modern waterfront living,” Nakheel said last month.

In an earlier statement issued in September, the developer said: “The Palm Jebel Ali master plan is being revisited. Further details will be released in due course.”