The Ras Al Khaimah authorities have stalled work on a second reclaimed island and transferred investors onto its first manmade island, Marjan, as its property market slows. Investors who bought plots of land on Dana, a man-made island under reclamation in Ras al Khaimah, now have the option of transferring their investments to Marjan.
Marjan, another man-made island of 270 hectares, has already been reclaimed and its development is further ahead than Dana, where work has slowed. Both developments are owned by the Ras al Khaimah Investment Authority (RAKIA). About half a dozen investors, representing nearly 40 in total and many of them from the UK, visited RAKIA's headquarters in Ras al Khaimah last week to discuss a solution. The chief executive of RAKIA, Khater Massaad, was said to be "very flexible", even though the government entity would not give back any cash.
Sami el Helou, one of the investors, said: "We are feeling relieved. They approved the idea of transferring our money into another project they have, which is fine." Wahid Attalla, a member of the board of Rakeen, the property branch of RAKIA, and chief developer of both islands, said: "We are listening to everybody's request." The government plans to distinguish between investors according to the amount they paid and their willingness to develop their purchases.
"We are dealing on a case-by-case basis as there are so many projects and investors," said Mr Attalla. "An investor who has paid Dh3 million (US$817,000) and another who has paid Dh150m cannot be treated the same way. Some investors genuinely want to continue but in a different project, and they want to start the construction." According to the investors who met RAKIA, no penalty will be applied but a percentage of their money will be kept to refund the commission that RAKIA said it had paid to the property agent in charge of the land sales.
"I will be able to put 90 per cent of my money from Dana into another plot on Marjan, but I have to start the construction within nine months," said one investor, who did not wish to be named. Dana was expected to house several world-class hotels, commercial and residential complexes, and to extend 7km into the sea, creating an estimated 53km of new shoreline in Ras Al Khaimah over 680 hectares of land.
However, last August the master plan was changed, with several plots cancelled, moved or altered. The development has not been cancelled, but the dredging machines have been temporarily removed, according to the investors who visited the project. "There is work happening in Dana," Mr Attalla said. "It is already 3km into the sea but because of the [global financial] crisis and because of the investors' concern and unwillingness to pay more money until the project has been totally reclaimed, we have slowed down."