Price cut for The Helix towers

Arady, an Abu Dhabi-based private equity group focusing on the property sector, says the reduction on its Reem Island project will reflect lower construction costs.

Arady, an Abu Dhabi-based private equity group focusing on the property sector, will cut prices at The Helix towers on Reem Island by about 20 per cent to pass on savings from lowered construction costs to buyers. "The market needs to be sustainable and the new prices reflect that," said Jassem Saleh Busaibe, the new chief executive of Arady. "We are lucky we did not tender the project yet, so we could pass on the savings to buyers." Mr Busaibe said the company would also change the payment plans so they adhered to construction milestones. The move is among the first from developers in Abu Dhabi to address the slowing market. Prices in the capital have fallen an average of 15 per cent in recent months, according to property brokers. Last week, Bloom Properties said it would let buyers revise their payment plans and renegotiate the prices of its Bloom Gardens project to reflect falling construction costs. "This is not taboo for us," said Hani Shammah, the chief executive of Bloom Properties. "We have revisited the prices in line with the construction costs. We are passing on the declining construction costs to the end-user." Mr Busaibe said he could see a new period of opportunities for his two-year-old investment group, especially in Abu Dhabi. "Despite the current market, there is still an undersupply of housing and hospitality," he said. "There are opportunities in turbulence... Building a good project for end-users will still give you a reasonable profit." The market would see some major changes this year as the credit squeeze and lower sales hit developers, he said. "A lot of people are going to have to go back to the drawing board. The parameters have changed." Arady is raising money for a US$550 million (Dh2.02bn) Abu Dhabi development fund called Al Reem Fund LP. The fund would spread its investments across the property economy, but focus on niches that were undersupplied, Mr Busaibe said. The investment group is in talks with several major developers about buying up plots on Reem Island and Al Raha Beach. Arady is also expanding its direct investments in infrastructure and core services in Abu Dhabi. One of its larger projects is a joint venture called NCP Gulf Services, which has been awarded a contract from the Abu Dhabi Department of Transportation to construct and manage more than 70,000 street parking spaces with meters. Initially, 2,500 parking meters will be installed on the most congested streets. Mr Busaibe said he also planned to build multi-storey car parks around the capital to relieve traffic. Arady, a Shariah-compliant group, is mostly funded by sovereign wealth funds and high-net worth businessmen and dignitaries in the region. Sheikh Hamdan bin Mubarak, Minister of Public Works, is its chairman and Ali Lakhraim is the executive vice chairman and founder. [e-mail]