Developer awards Dh400m of contracts for Mina Al Arab

Nathalie Gillet

• Last Updated: January 03. 2010 7:30PM UAE / January 3. 2010 3:30PM GMT

RAK Properties, Ras Al Khaimah’s largest developer, has awarded Dh400 million (US$108.9m) of construction orders for 20 buildings in its Mina Al Arab development.

The developer awarded the contracts to DTC, Al Tameer and AAA Contracting. The three companies will start construction on more than 800 residential units that are due to be completed in the second half of next year, RAK Properties said yesterday.

The contracts are part of the third phase of the development, which has suffered delays as a result of the fall in property prices.

“Everything that was sold is under construction or will be built,” said Mohammed al Qadi, the chief executive of RAK Properties. “This includes precincts four, five and two. As for precincts one and three, including the shopping mall, we will see their fate after the crisis.”

The developer sold about 80 per cent of this phase of the project in 2008 when it was launched at the property market’s peak.

Mina Al Arab is one of the few developments in the emirate in which foreigners have been allowed to buy freehold property.

Investors in man-made islands being built in Ras al Khaimah, including Dana Island and Al Marjan Island, have been allowed to move their deposits from stalled developments to projects where developers have enough funds to finish construction.

“Property values in RAK have fallen significantly, and we think pricing in the secondary market is currently around Dh525 per square foot to Dh575 per sq ft,” said Chet Riley, an analyst at Nomura Securities, recently.

“We think this is well below the current average selling price of the units in Mina Al Arab, which we estimate is around Dh1,400 per sq ft.” RAK Properties’ shares gained 3.5 per cent yesterday on the Abu Dhabi Securities Exchange.

ngillet@thenational.ae