Apr 29 2009

Flamingo Creek construction to begin

Construction on the delayed Flamingo Creek, a residential project that Deyaar Development took over from National Bonds Corporation last year, will begin in the next few weeks.

The project will be among the first to get under way at The Lagoons, a development made up of seven artificial islands along Dubai Creek that was launched by the master developer Sama Dubai in 2006, but which has been under review since November.

Deyaar took over Flamingo Creek following a shake-up of National Bond Corporation's property arm in July last year.

Markus Giebel, the chief executive of Deyaar , said yesterday a fencing contract had been awarded and work would begin on site shortly.

However, there was still ambiguity over whether Sama Dubai or Dubai Properties was managing The Lagoons, he said. Both companies are part of the Dubai Holding group.

Deyaar is in direct talks with both the Dubai Road and Transport Authority (RTA) and the Dubai Electricity and Water Authority (DEWA) to ensure infrastructure for the project is in place, a responsibility that usually lies with the master developer.

"It's difficult for us right now to get answers," Mr Giebel said. "We have talked to DEWA and the RTA , we know what the risks are and we're going ahead."

Flamingo Creek was launched in 2007 and was "100 per cent sold", he added. The project includes 244 villas and townhouses.

Deyaar plans to sign deals for projects overseas this year, in markets including Saudi Arabia, Libya, India and possibly Kazakhstan.

"Things are ready to go. In 2009 we will sign the first deals and in 2010 we will start developing again," Mr Giebel said. "We already have land in some of these countries."

The company has also set up Deyaar Fund Management, which will operate a series of distressed debt funds worth up to Dh1 billion (US$272 million).

It is close to raising the first tranche of Dh500m, which has mostly been subscribed to by a mix of local and overseas investors. The fund will be used to buy back property that customers have defaulted from Deyaar 's own portfolio, while the second half will be raised "in two to three months" for other distressed assets, locally and overseas.

"The funds will be launched in two to three weeks," said Mr Giebel. "The first half will focus on Deyaar projects, but also others. You should never walk away from a good deal."

Deyaar on Monday announced a profit of Dh54.4m for the first quarter of this year, down about 73 per cent on the same quarter last year.

By Angela Giuffrida

© The National 2009

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