x Abu Dhabi, UAESaturday 22 July 2017

Up to 8 per cent of Reem Island buyers backed out says Sorouh

Reem Island developer Sorouh today discussed the issue of buyers backing out of their contracts, with the company saying it had worked hard to limit that number by cutting prices.

A view of construction on Reem Island from Eastern Ring road in Abu Dhabi. Ravindranath K / The National
A view of construction on Reem Island from Eastern Ring road in Abu Dhabi. Ravindranath K / The National

Up to eight per cent of buyers in Sorouh's Reem Island projects have backed out of their contracts, the developer's chief operating officer said today.

The Abu Dhabi company started an aggressive "default avoidance" programme last year, reworking contracts and cutting prices, hoping to stem the flow of cancellations that have plagued many developments in the region, said Gurjit Singh.

He estimated the number of cancellations is "between five to eight per cent".

After a series of delays, Sorouh expects to begin delivering units in its Sun and Sky towers in January or February, Mr Singh said after the Cityscape Connect forum on Yas Island. The company plans to handover 1,150 units in the towers in 2011.

Although an analyst report recently speculated that Sorouh might need to arrange additional capital after completing a Dh2.3 billion loan three months ago, Mr Singh said the company is "comfortably funded for the next 12 months."

Sorouh doesn't plan on starting construction on any new projects in the next year, Mr Singh said.

"We are concentrating our entire effort on delivery," he said.