Property News | Celebrity gone sour

Browse By Subject

Money

Property

Social

Professional

Celebrity gone sour

Friday, July 03, 2009

Catherine Deshayes

You may think that everything celebrities touch turns to gold, but this is certainly not the case when it comes to some celeb-endorsed property projects in Dubai - angry investors are now demanding their cash back from the firm behind the Niki Lauda, Michael Schumacher and Boris Becker towers in the emirate...

One savvy blogger wrote this sentence back in 2008, ‘Celebrities enjoy giving momentum to the Dubai boom. It will be interesting to see what they do with their names when the development slows and the shine wears off.'

How right he was. Now that his prediction has come true, the celebrities involved in these projects are far more likely to want to keep quiet about them.

German and Austrian investors who paid more than £128 million for the Niki Lauda, Boris Becker and Michael Schumacher towers to be built are far from happy.

Alternative Capital Invest, the company behind the projects, promised them that their investments would be paid back from the capital gains in March of this year.

But that has not happened and they are now taking steps towards legal action.

Sub developers with projects within these master developments have been battling to satisfy investors who have paid deposits for property that is not currently being built, while struggling to pay contractors on jobs that are ongoing.

Robin Lohmann, Managing Director of ACI said in a statement that the company has solid assets and the celebrity-endorsed towers will go ahead.

ACI said that no refunds were being paid to investors because projects have been postponed, not cancelled, but added that investors were not required to pay additional installments until construction work restarted.

He did admit that there was a problem as the global market slowdown meant that the money to repay investors was not available.

He said that they have been offered the choice of waiting until ACI's assets could be liquidated or the chance to take property assets owned by another company, Falcon International Investment Group, based in Dubai. But some investors are concerned that if they accept the Falcon option, they may end up with additional risk and costs.

But Robin Lohmann was quick to dispute this, saying, "With this package, we just wanted to show people that we have the ACI assets which are the Boris Becker Tower, the Schumacher Tower and all the rest, and that in addition to that we also offer a security package through Falcon of fully paid assets worth about £85.5 million, which is almost the double of what was due in March."

Last week, German Trade title Financial Intelligence Service reported that Mr Lohmann has been under investigation by the Dubai police.

These reports have been dismissed as untrue.

Picture by kmayra