(Bloomberg) -- Dubai’s ruler approved a new development plan for the largest of the city’s famous palm-shaped artificial islands, reviving a project that was halted amid the global credit crisis of 2008 and left hundreds of buyers in limbo.
The new master plan for Palm Jebel Ali will include 80 hotels and resorts, and add 110 kilometers (68.351 miles) to the emirate’s coastline, according to the Dubai Media Office. The project, which hopes to house as many as 35,000 families, so is likely to feature luxury mansions and apartments. Roughly a third of its public facilities will be powered by renewable energy.
The project’s revival comes amid a rebound in the emirate’s property market, which has benefitted from an influx of newcomers that’s helped end a seven-year slump and sent real estate prices and rents soaring. Still, the announcement is likely to highlight the plight of hundreds of investors who bought homes on Palm Jebel Ali that never got built.
READ MORE: Dubai’s Vacant Palm Island Plots Reveal Risks of Luxury Boom
State-owned developer Nakheel PJSC first unveiled Palm Jebel Ali Fronds and The Palm Jebel Ali Water Homes in 2003. The project, about 50 kilometers from downtown Dubai, has 17 palm leaves and was meant to host marinas, a theme park, beach-side villas and a thousand homes on stilts that spelled out a poem by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum, according to reports at the time.
The project was abandoned a few years later. While many investors have since swapped their purchases for alternative Nakheel properties, others were offered refunds for amounts collected by the developer until it stopped working on the project in 2009, Bloomberg News reported in October.
A group of 30 owners have lodged an appeal with a Dubai court asking for a judgment — that officially canceled the project and ruled the developer must pay investors only the amount collected from the original buyers — to be voided.
Canceled real estate projects often have messy fallout, but this case of buyer beware is playing out in the midst of one of the world’s biggest housing booms.
Demand for luxury properties with a price tag of $10 million or more have surged, helping Dubai close in on London and New York. During the first quarter, 88 such homes were sold in Dubai — surpassing other global centers even as the value of properties purchased slipped 4% to $7.2 billion, according to a report from the real estate company Knight Frank.
READ MORE: Luxury Real Estate Sales in Dubai are Driving a Global Rebound
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