Last Updated: Wed Nov 24, 2010 13:35 pm (KSA) 10:35 am (GMT)

UAE property developer files for bankruptcy: reports

UAE's property prices plummeted some 60 percent since peaking in 2008 (File)
UAE's property prices plummeted some 60 percent since peaking in 2008 (File)

Al-Murjan Real Estate, developer of a $3 billion housing project in the United Arab Emirates, has filed for bankruptcy after running into financial difficulties, the Financial Times reported on Wednesday.

The company filed for insolvency in the emirate of Sharjah and two liquidators have been appointed, the FT reported, citing documents it had obtained, and cited lawyers saying that it was the first court-mandated bankruptcy of a distressed property project in the emirates.

Property buyers would likely find it difficult to recover downpayments they made on homes in the 8,000 home White Bay development, which al-Murjan had started to build in another emirate, Umm al-Quwain, the newspaper said.

As property prices plummeted some 60 percent since peaking in 2008, more than half of buyers had not maintained payments, the FT reported.

The project was a joint venture between Sheikh Abdullah bin Rashid al-Mualla, the deputy ruler of Umm al-Quwain, and Sheikh Tariq bin Faisal al-Qassimi of Sharjah-based Emirates investment group, the FT said.

Buyers want the project to go ahead and want to know the real reason for liquidation, according to documents provided to Bloomberg by Ludmila Yamalova, a partner at HPL Yamalova & Plewka JLT representing three buyers in White Bay.

The buyers represented by Yamalova have already paid about 50 percent of the price of their properties, she said.

Al-Murjan Real Estate didn't immediately respond to questions when contacted by Bloomberg on Wednesday.

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