Deyaar plans to deliver five properties in Dubai's Business Bay in the first quarter of next year, according to the company.
Deyaar to deliver five properties in Business Bay
Deyaar plans to deliver five properties in Dubai's Business Bay in the first quarter of next year, the company said yesterday.
The five projects scheduled for delivery in the first quarter include Hamilton Residency, Mayfair Tower, Mayfair Residency, Metropolis offices and Clayton Residency. Handovers in the 16-storey Hamilton Residency should begin by Thursday, the company said.
The total sales value is Dh1.2 billion (US$326.7 million), but the company expects to receive only about Dh600m when the buildings are handed over, representing "50 per cent of the total sales value of the sold units", the company said.
The five projects include a total of 1,092 residential units, including 177 units in Hamilton, 218 units in Mayfair Tower, 213 units in Mayfair Residency, 320 units in Metropolis and 164 units in Clayton Residency.
The new towers will enter a market already saturated with residential units, said Billy Rautenbach, the managing director of the Property Store, an estate agent.
"There is a lot of competition there [in Business Bay]," said Ms Rautenbach. "It is a sought-after place and people want to live there, but only if rentals are low."
Selling units will be even more difficult in the current market, she said. "Nobody is buying unless they are selling at a really low cost," she said.
Deyaar will also face other obstacles in Business Bay. Much of the infrastructure still has not been completed. And once the buildings are handed over, the developer will be responsible for its share of the maintenance costs, under the new homeowners association laws.
"All these conditions are working against them," Ms Rautenbach said.
Deyaar officials could not be reached for comment.
The handover of the Business Bay projects will come at a key time for the company. In the third quarter, Deyaar reported a net loss of Dh145m on gross revenue of Dh63.45m. As of September 30, the company said its total equity was Dh6.23bn.
At the time the company said it remained committed to a "consolidation and project completion strategy, including the handover of five Deyaar projects in the Business Bay area in 2010".
Business Bay is an 8 million-square-foot development planned to include more than 200 towers and house more than 190,000 residents in a business district that promoters compare to Tokyo's Ginza district or Manhattan's Midtown.
But it has been slowed by market conditions and the financial woes of the master developer, Dubai Properties, a subsidiary of Dubai Holding.
The development is a key focus for Deyaar. Last month the company announced it had finished Windsor Manor, a 24-storey residential tower with 338 residential units in Business Bay.
At the time the company said about half of the units in the tower had been sold.