Construction at Al Gurm Resort will continue, says Aldar
Aldar Properties says it is proceeding with its Al Gurm Resort, despite doubts about the long-delayed project at its management partner, Singapore's Banyan Tree Hotels and Resorts. John Bullough, Aldar's chief executive, said yesterday the company was "in dialogue" with Banyan Tree. Last week, the hotel management company told The National that work on the 161 suite resort had stopped.
Banyan Tree and Aldar, Abu Dhabi's largest developer, signed an agreement in 2006 for Banyan Tree to manage the hotel, which is to be built next to a protected mangrove forest on the western side of Abu Dhabi island. It was initially expected to open at the end of 2007, but work has advanced on only 72 luxury villas, which are expected to be handed over to owners this year. "The intention is that there will be a hotel facility at Al Gurm ? We're still in dialogue with Banyan Tree," Mr Bullough said.
So far, only the land reclamation for the resort has been completed. Mr Bullough declined to elaborate on Aldar's plans. No one at Banyan Tree who could speak on the issue was available for comment yesterday. On Sunday, Ho Kwong Ping, the executive chairman of Banyan Tree, said, "we've had discussions with [Aldar] whereby I think they feel that the project might not be financially feasible, and therefore if they wish to terminate on that basis, we would terminate very amicably."
Despite a more subdued economy and reduced investor appetite for property, Aldar is pressing ahead with new projects and finalising master plans on others. The company said yesterday it would build 272 apartments as part of Al Bateen Park development in the capital. Those apartments had already been sold, Aldar said. Seventy-five villas will also be released for sale later, with completion expected in August 2012. "In terms of sales, I think people are beginning to make decisions now," Mr Bullough said.
But financing, he said, remained an issue for developers still facing an economic climate in which many banks remain less willing than before to extend home loans. Abu Dhabi Finance, a government-owned mortgage lender, has tried to help the emirate's developers by offering lower interest rates than those of many banks. The company recently reduced its main mortgage rate to 5.75 per cent, and had earlier teamed up with the developer Sorouh Real Estate to offer even lower ones.
"We need to ensure the flow of finance to purchasers, and we're working with a whole range of finance providers to set up packages to ensure they have access to finance," Mr Bullough said. Meanwhile, Aldar is proceeding with the second phase of its US$40 billion (Dh146.91bn) Yas Island development in anticipation of better markets ahead. In February, the company sold a large part of the island, including the Grand Prix circuit, which opened last October, to the Abu Dhabi Government after reporting losses of Dh562 million for the fourth quarter of last year.
The asset sales, which raised about $2.5bn, were a way to bolster Aldar during the downturn, the company said at the time. Seven hotels and the clubhouse at the Yas Links golf club have opened at Yas Island, while Ferrari World, a theme park, is expected to open this year. email@example.com firstname.lastname@example.org
Published: April 20, 2010 04:00 AM