Sunday, September 06, 2009

Rakeen appointed as custodian of La Hoya Bay project

Rakeen, the development arm of RAKIA (Ras Al Khaimah Investment Authority), has taken charge of one of the largest property developments in RAK (Ras Al Khaimah), from its insolvent owner, Khoie Properties, much to the relief of several hundreds of investors in the project.

Rakeen, yesterday announced that it would ensure that the rights of investors in the US$800mn worth La Hoya Bay project, will be protected.

Rakeen has been appointed as custodian of Khoie Properties, under the directives issued by the RAK Court. This is considered one of the significant steps in promoting and protecting the interest of property buyers and investors, pointed out Dr Khater Massaad, Chief Executive of RAKIA.

This move by RAK is also one of the best instances of the government intervention in a failed developer, while the property sector is grappling to overcome the steep price declines and growing defaults among investors. It is also for the first time, that a court has intervened to appoint a judicial custodian for a major developer in the country.

This move will place the company under the control of Rakeen. This move follows the imprisonment of former chief executive of Khoie Properties for writing two bounced cheques worth Dh.57m each to RAKIA.

RAKIA had appealed to the court, urging that Khoie Properties be brought under judicial custodianship, until completion of La Hoya Bay project by a competent developer.

The project comprises seven residential towers and 1400 residential apartments. It is a high-priority project, and is one of the major components of first phase of developments on Al Marjan Island.

Khoie Properties has already received 30 percent down-payment from several investors, worth Dh.280m, and the balance was originally due to be paid on completion.

According to the new payment plan, investors will have to pay only the remaining 70 percent. Also, 50 percent of the balance could be paid in five installments with 20 percent to be paid at the time of delivery.

Rakeen will also help investors in obtaining mortgages to minimize the risk of buyers defaulting and to ensure that the project goes ahead, despite the tight credit conditions.

The investors, meanwhile, have expressed their gratitude to Rakeen and RAKIA for all their efforts in making the project a success, and are keen on knowing if their contracts would be transferred to Rakeen.

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