About 70 per cent of buyers in projects that have been delayed by Deyaar Developments, Dubai's second largest developer, have successfully moved their investments to projects under construction, the firm's chief executive said. Buyers who bought offplan units in projects including Deyaar Park, Mirar Residences and Deyaar Enclave have transferred their investments to projects in Business Bay. The consolidation was part of Deyaar's strategy, unveiled earlier this year, to reduce the risk of defaults and their effects.
Those who accepted the deal were also given a 10 per cent refund on the amount they had paid to date. Markus Giebel, the chief executive of Deyaar, said the delayed projects would still be built, only were likely to be smaller in size. "You'll never get 100 per cent consolidation because there are always people who like what they have and who want to stay," he said. "So for these people we'll build, although it will be something smaller and will be a phased approach."
Deyaar will soon make a decision on whether or not to continue with Flamingo Creek, a residential project planned at Sama Dubai's stalled The Lagoons development. The project, which Deyaar took over from National Bonds Corporation last year, has been hampered by lack of progress on infrastructure work at The Lagoons. The National reported last week that investors who in bought in The Lagoons, launched by Sama Dubai in 2006, are being offered alternative apartments within Jumeirah Beach Residences.
"We have not started consolidation at Flamingo Creek," said Mr Giebel. "It's one of the most beautiful projects we have but unfortunately infrastructure still causes us some pain. We don't have the right answer for customers because we don't have the answer for infrastructure," he said. "I think our customers have endured pain for long enough, so we'll have to make a decision very soon." Mr Giebel added that the company had commitments of Dh250 million (US$68m) from a mix of local and overseas investors towards its distressed property fund and was close to securing a further Dh150m.
The fund will be used to buy back distressed properties from Deyaar's own portfolio as well as other properties with high expected returns. The properties would then be resold when market conditions improve. The fund aims to close with Dh500m by the end of the year. "We've only fundraised for three or four weeks now, so to already have Dh400m in the midst of a crisis is pretty good," said Mr Giebel.
Deyaar is also pursuing projects overseas and is aiming to work with Solidere, Lebanon's largest developer, on the construction of low-cost homes in Beirut. Deyaar completed its first development in Lebanon, a Dh365 million project called Saifi Village II, in July. "We do believe that low-cost housing is a great opportunity right now," said Mr Giebel. agiuffrida@thenational.ae