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RELATED ARTICLES: The A-Z of construction projects on hold in Dubai | Up to 500 real estate projects facing axe: RERA | Marina West investors told: this isn't going ahead
Investors in a stalled Downtown Jebel Ali project are scrambling to learn the fate of the development, and their money, following a series of disruptions, which have included contractor disputes and changes of developer.
Buyers of units in Celestial Heights - a AED 1bn, three-tower, residential and commercial project - have experienced a steep decline in correspondence from developer Cirrus Developments, since the onset of the economic downturn. The company has disbanded its office, since handing over the project to a second company, Celestial Developers, in June 2009.
On 24 March investors were sent a letter by consultant Catalyst Project Consultants, informing them that the company had left the site due to a dispute between the main contractor, Al Shafar General Contracting Limited, and the current developer, JAD23, JAD24 and JAD25 Investment Limited. In the letter Catalyst said the project has stopped, leaving investors struggling to get clarity over the situation.
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“When things were good there was a lot of communication, such as pictures of the site, updates and site visits,” said Soren Kraen, who bought a two-bedroom apartment in Capella, one of the two residential towers. “But now we have no clue what’s going on. I’ve tried to make contact with other investors, and hopefully we should have a meeting with the developers to try and find out if the money is protected as it should be. It seems like there are a lot of tenants, it’s just a question of getting hold of them.”
Celestial Heights – which was to comprise of Capella, another residential tower called Orion and a commercial building called Polaris - was launched at Cityscape in 2007, where Kraen bought the unit and paid a quarter of its value upfront. “It had the standard terms and conditions, where you’re spreading the installments of 15% every quarter, with the last 15% to be paid at the handover,” he said.
Investors report that updates from the developer started to dry up after the impact of the global financial crisis. Cirrus Development handed over the project to Celestial Developers in June 2009, according to a statement from the company on its website - www.cirrusdevelopments.com – which also states that Cirrus has closed its office and its previous projects are under different management.
The statement encourages investors with queries about Cirrus Development to contact its representative law firm, Dubai-based Ja’afar Alwan, Al Jaziri & Associates. But a spokesperson at the company’s office confirmed that Cirrus has not been a client of the law firm for the last two years.
Kraen confirms that there was a representative in the site office when he paid his own visit in January, and no construction activity.
“I felt there were people there that were just employed to sit there, they didn’t know anything. In terms of real people we couldn’t get hold of them,” he said.
Celestial Heights’ site office phone line had been disabled when CW called for comment in May.
Ibrahim Salib, ASGC’s project manager on Celestial Heights, confirmed that the project had stopped “since January”, though declined to comment further.
A spokesperson for JAD 23, 24 25 Investment Limited, who called CW by mobile and called himself ‘Hussein’, without further disclosure, said he believed the project was still ongoing, adding that the developer had won all court cases brought against it by investors.
But Dubai’s Real Estate Regulatory Authority still lists the three towers among projects that have stopped on its website. This follows an independent site inspection by Screampoint Property Observer on behalf of RERA on 17 March.
“Work has progressed and then stopped,” wrote Screampoint Property Observer. Though it noted that the substructure work had been completed and the fourth podium slab had been “substantially” completed, “there is no activity being carried out onsite; the project is on hold.”
Investors’ money was deposited in an escrow account with Badr Islamic Bank that is overseen by the Dubai Land Department, according to Cirrus Development’s 2007 brochure.
The letter from Catalyst advises investors to direct their questions to the shareholders of JAD 23, JAD 24 and JAD 25 Investment Limited through its registered agent, law firm Afridi & Angell.
The Afridi & Angell office acknowledged CW’s request for information about the three companies but did not respond.
The phone line at Sharjah-based Catalyst Project Consultants has been disabled, and the request for more information via its messaging service did not produce a response.
The manager in charge of the project for Catalyst also did not respond to calls.
A representative from Dubai Land Department told CW that if investors have a problem they should file a suit at property court. The person added that queries about the money paid into the escrow account should visit the “escrow team” in person in its Deira office.
Kraen is hoping that the meeting between investors and JAD 23, JAD 24 and JAD 25 Investment Limited will provide much-needed information in what appears to be an all-too common case throughout the economic downturn of off-plan selling leading to stalled projects and broken links between buyers and their money.
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TIMELINE
2007
May – project marketed at Cityscape exhibition by Cirrus Developments
2008
Construction starts on the project
2009
January – enabling works are completed
June – Cirrus Developments hands project to Celestial Developers
2011
Spring – Consultant Catalyst Project Consultants walks off site
17th March – Independent Screampoint report confirm work has stopped
24th March – Investors receive letter from Catalyst Project Consultants confirming the dispute with the contractor and the end of construction activity
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FEATURED COMMENT
All investors who bought in Celestial heights please email to dia123155@hotmail.com, we need to gather our cases