Text size:

  • Small
  • Normal
  • Large

Deyaar takes steps to reduce defaults

One of the UAE's largest developers will unveil a series of measures to help reduce the risk of property defaults.

DUBAI // Deyaar Development will unveil measures to help reduce the risk of property defaults, including full refunds on two of its projects. The measures are part of a strategy to help the firm, Dubai's second largest property developer, survive the economic slowdown. They also include reducing prices for properties that have already been sold. Markus Giebel, the company's chief executive, said the measures would be announced next Tuesday. "There are a couple of projects where we'll give 100 per cent of the money back and a couple where we will have other incentives, which also includes cash back," Mr Giebel said, declining to say whether the full refunds were for projects to be closed down. "This is just one little step of it." Deyaar last month said it planned to offer some buyers the option of swapping their purchases for other property so the company could phase out several projects. In January, it put all unsold projects on hold. The company is also extending payment schedules to be more consistent with construction deadlines. "It is part of the medicine we will give to our clients so they will be stabilised and hopefully the default rate will be as low as possible," said Mr Giebel. "It is in our best interest to keep the default rate low. We have to assist our customers." Mr Giebel said the current market was more about stabilising than selling, and firms needed to be more focused on their customers. "Before, you would just sign a subscription form but wouldn't talk or interact with the customer," he said. "Now to make the change we need to know our customers." Mr Giebel said Deyaar's new strategy would be introduced over the next six months, after which it might consider mergers. Rumours of a possible merger with Union Properties began late last year, although both firms have denied they have been in talks. Simon Azzam, the chief executive of Union Properties, told The National this month he would welcome a merger "if the partner brought a genuine advantage to the company's overall business operations". Mr Giebel said today: "If you merge a strong balance sheet with a weaker one it will stabilise both companies. "It would be good for increasing shareholder value and for stabilising Dubai. If we all go down, Dubai will go down. But there are other solutions; merging isn't the only one." Mr Giebel said none of the company's customers had defaulted, mainly because Deyaar had been assisting those struggling to meet payment schedules. He said the company had enough cash to meet its commitments and expected to be profitable this year, despite the downturn. Its net profit for the fourth quarter of last year was Dh343 million (US$93.3m), compared with Dh216m for the same period in 2007. Property prices in Dubai have fallen by as much as 50 per cent in some developments since the financial crisis took hold. "We believe that 2009 is the year of the bottom and in 2010 the recovery will start," Mr Giebel said. Deyaar said last month it would deliver 1,300 units across seven projects this year. Those scheduled for delivery include Citadel, a commercial tower, and Hamilton Residency, a residential tower, both in Business Bay; and Madison Residency in the Technology, E-Commerce and Media Free Zone. Others include Coral Residence, Jade Residence, Sapphire Residence and Ruby Residence, all at Dubai Silicon Oasis. agiuffrida@thenational.ae

Back to the top

More articles

Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 A sign points the way to an outdoor market popular with German visitors on the Polish side of the German-Polish border. Sean Gallup / Getty Images

In pictures: A decade since the European Union went east

May 1 will mark 10 years since the European Union expanded east, taking in countries like Poland, the Czech Republic and the Baltic states as new members. And though the border region between Germany and Poland is flourishing with trade and cultural exchange, the open border has also brought a sharp rise in crime.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.


To add your event to The National listings, click here

Get the most from The National