Sunland's troubled Dubai projects progressing slowly amid defaults
Australian property developer Sunland’s progress on its two Dubai projects, Palazzo Versace Dubai and D1 Tower, continues at a slow pace.
Set inland on the banks of Dubai Creek, Palazzo Versace Dubai has an anticipated mid-2012 opening.
Work on Palazzo Versace slowed and sales slumped as a result of the economic global financial crash of 2008 that eventually consumed Dubai in 2009.
Its early off-the-plan buyers have been required to make regular purchaser progressive instalments on the two projects and as at June 2011 they totalled $396 million (AED1.45 billion).
But sales achieved over the past year slowed, with just three in the Palazzo Versace Dubai totalling AED15 million and 26 sales in D1 totalling AED64 million.
The apartments for sale range from one bedroom to six bedrooms.
The Versace-branded resort – unveiled in 2006 – will include 169 private apartments and 217 hotel suites, decorated with furnishings from the Italian designer’s home range (pictured above and below).
The developer companies have taken legal action against non-performing purchasers across the projects, according to the annual report.
Forfeited deposits for Palazzo Versace Dubai and D1 total $55.6 million (AED 216.3 million).
Sunland’s net tangible assets per share in Dubai represents just $0.02 of Sunland’s total net tangible assets per share of $1.55.
Sunland’s development projects in Dubai are non-recourse to the group, meaning that development and funding risks are limited to the respective projects.
There is no recourse back to Sunland’s Australian operations.
The market is expected to remain challenging in the short to medium term.
In its June 2010 annual report Sunland noted the D1 residential tower was 60% complete and the Palazzo Versace Dubai was 70% complete. Palazzo Versace Dubai is 87% complete 13 months later.
Plasterboard works are now completed in all condominiums, along with the installation of all major services installation to the condominiums and plant rooms.
Stone floors are complete to approximately 40% of the condominiums, and separate crews are working on level three and level eight.
A total of 600 panels have been installed during June, and approximately 85% of the façade is installed, its July building update notes.
It is being developed by Emirates Sunland Group, a joint venture between the UAE’s Emirates International Holdings and Australian-based Sunland Group Limited.
In 2008 Sunland Group Limited entered into an agreement with the House of Versace for the global rollout of the Palazzo Versace Hotels. The company committed to a payment of €6.75 million by December 2009.
It was anticipated there would be 15 such hotels.
