Lead lender says project 97 per cent complete, looking for new developer

Three lender banks, whom the project was mortgaged to, are now trying to get a new developer to complete the Marina 101 project in Dubai. Image Credit: Atiq Ur Rehman/Gulf News

Dubai: Investors who bought apartments in a Dubai Marina skyscraper that began construction over a decade ago are waiting for handover despite the building being 97 per cent complete, owners and lenders said.

Started in 2007, the Marina 101 development was initially scheduled for completion in 2015. However, the developers Sheffield Holding Limited ran out of funds and failed to repay their bank debts, prompting the project to stall, banks told Gulf News.

Three lender banks, whom the project was mortgaged to are now trying to get a new developer to complete the project.

Dh 1.06 m paid by an investor for a one-bedroom unit in 2016

The last email from Sheffield to investors in April 2018 said: “The tower is one step before the handover with the testing and commissioning ongoing process and the permanent power connected.”

Gulf News spoke to the project’s lead lender Bank of Baroda, who along with Indian Overseas Bank and Bank of India have been left with dues of $95.28 million (Dh349.6 million), which has now raised to $116.44 million (Dh427.33 million), according a debt note on Bank of Baroda’s website.

“We are embarking with developers working to find a resolution to complete this project to ensure all investors and banks get back what they paid,” Bank of Baroda CEO of GCC Operations Ananda Kumar told Gulf News.

“How long that will take, we may not be able to tell exactly, but we are expecting that within six months, this entire thing should be over.

“The building is 97 per cent complete and the market appears to be good keeping in view locality,” he added of the chance of finding a developer to take over the project.

70 % would be the profit on share for one of the investors

Asked what would happen when a new developer came on board, and whether investors would be given handover or repayment with interest, he replied, “We are analysing various options to protect individual buyers’ as well as banks’ interest.

“We are committed to getting this done in the quickest time possible, but there are court processes ongoing out of our jurisdiction that we have to respect.”

The 101 Tower (centre) in Dubai Marina.

Owners in the dark

One investor Niaz Khan, a British national of Pakistani origin, paid Dh1.3 million up front for a one bedroom unit back in 2014.

“Of that investment 30 per cent would go to the management of the building who would run it half hotel and half residential, and 70 per cent would be profit on share. We could also use it for personal use for 15 days a year on peak and 30 days off peak.

“Sheffield kept saying every year it would be finished and then the project just got halted. There’s been no communication since.

“We just want a speedy resolution and definite handover, because prices have already come down 30-40 per cent.”

Sheffield kept saying every year it would be finished and then the project just got halted - Niaz Khan, investor who purchased one unit

It’s not just time and market forces that investors are worried about. At least 15 investors, Gulf News has learnt, claim they weren’t given an Oqood, which is a contract registered with the Dubai Land Department to prove they own the unit.

“Sheffield didn’t register it and now the bank has seized those units,” said another investor, who preferred to remain anonymous. “What will happen to them I don’t know?

“Also many of us paid outside of escrow [a contractual agreement in which a third party receives and disburses money] will that count? I’m not sure,” added the investor, who paid 80 per cent up front for a one bed unit at Dh1.06 million in 2016 and paid the remaining directly to Sheffield outside of escrow in 2018.

Escrow account

Asked what would happen to those without Oqoods and who had paid out of escrow, Ananda Kumar, CEO of Bank of Baroda, said, “It’s difficult to say. If there’s no registered agreement, it’s not recognised and nothing is there to be taken as lawful. They may not have any right or money back.

“If the Oqood is duly registered they should be given justice, however, and we want justice for all buyers who have booked.”

We want justice for all buyers who have booked - Ananda Kumar, CEO of GCC Operations at Bank of Baroda

Another issue experienced by investors is one of breach of contract.

Hashim Husseini, a Canadian of Iraqi origin, purchased three one bed apartments in 2013 paying 90 per cent of Dh1.4 million up front for each.

“The handover was expected in 2015,” he said. “I waited until then but there was no progress, then in 2017 I enquired and found out that all three one bedroom apartments had been changed into studios. It also kept being put off.

“I don’t mind the delay, my issue is that the floorplan stated one bedroom and this is now a studio.

“The bedroom windows for all three apartments were also meant to be sea facing but then an external elevator was built that wasn’t in the original plan sold to me that blocks the view in all three flats,” added Husseini, who said flats were to be used as hotel rooms for three years, with investors getting a return on their share, before the room was handed over.

I don't mind the delay, my issue is that the floorplan stated one bedroom and this is now a studio - Hashim Al Husseini, investor who purchased three units

Sheffield Holding Limited’s listed telephone numbers were not working when Gulf News tried to reach the developer on Thursday. The company’s Emaar Square office was also listed for sale online.

Sheffield Holding Limited’s founder Abu Ali Malik Shroff was also jailed and deported back to India, according to Bank of Baroda CEO Ananda Kumar. However, Gulf News could not independently verify Shroff’s whereabouts.

Marina 101