Dubai will liquidate many of its building projects and use the money to pay off investors, who are thought to include the Hollywood star Brad Pitt and footballers David Beckham and David James, it has been reported.
The state news agency WAM said ruler Sheikh Mohammed bin Rashid Al Maktoum had ordered a committee to be set up to look at the emirate’s building bubble, which encouraged huge funding but was followed by huge losses when it burst. Many developers withdrew from the city when prices more than halved and a lot of their customers have never received the properties they paid to be built.
Among the projects that remain little more than building sites more than four years after the crash is Dubai World, a complex of islands arranged to resemble the world’s seven continents.
Those reported to have invested in property in the debt-ridden emirate include the former England footballers Michael Owen, Joe Cole, Andy Cole, and Kieron Dyer.
A study by Dubai’s Real Estate Regulatory Authority found that more than 200 development projects were cancelled between 2009 and 2011. WAM reported that the committee will “look into and decide on the claims and cases arising between property developers and buyers of the stalled property projects, as well as liquidation of developments that were ordered cancelled by the Real Estate Regulatory Agency”. The courts will be required to pass on cases to the committee.
It is hoped that it will remove lingering doubts over projects paid for but never built. WAM reported: “In order to carry out its tasks, the committee is authorised to seek assistance of experts and consultants and to appoint auditors whose expenses shall be paid by the developers, to audit the financial position of the stalled projects and to verify the amounts paid by the buyers and the amounts spent by the developers.”
But some of the most extravagant projects, such as Dubai World, will not be included in the settlements because development has been suspended rather than cancelled.
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