Wednesday, Dec 07, 2011
--CEO sees cost saving of 50% after Ajman project was converted, downscaled
--To issue construction tenders within six months
--First phase to be complete by 2014
By Tahani Karrar-Lewsley
Of ZAWYA DOW JONES
AJMAN, U.A.E. (Zawya Dow Jones)--Al Zorah Development Co., a property firm based in the emirate of Ajman, said Wednesday it had managed to cut in half to 1.2 billion U.A.E. dirhams ($326.7 million) the cost of its Al Zorah project after revising its original plans for the scheme.
Al Zorah Development, a joint venture between the government of Ajman and Solidere International Ltd., managed to achieve the savings after it decided to downscale and convert its original plans for a mixed-use real-estate development into a tourism scheme, enabling it to halve cost for the project's first phase, the firm's chief executive officer, Imad Dana, said.
"We have downscaled and changed what we are offering; we have reduced the size of the project and land area and eliminated the islands that were meant to be reclaimed; we reduced costs by 50%," Dana said, adding that the changed plans would help cut costs to AED1.2 billion for phase one.
The U.A.E. property sector has been hard-hit by the fallout from the global financial crisis since 2009. House prices in Dubai have slumped and an oversupply has led to rents being squeezed everywhere leading developers to abandon or scale down size and scope of their projects.
"We have changed our vision of building an urban mixed-use destination into a mainly tourist destination in Ajman because the potential for the tourism industry is there," said Nasser Chammaa, chairman of Dubai-based Solidere International Ltd. in which Lebanese developer Solidere is a shareholder.
The first phase of Al Zorah Resorts, expected to be complete by 2014, includes two hotels, a 180-room tourist village, a beachside village and a golf course. Al Zorah expects to issue construction tenders for four project resorts within six months.
"In six months, we will issue tenders for construction packages for the phase-one resorts," said Dana. He added that the first phase would be financed by the company, which "at present has no need to borrow money from the banks."
Dana said all design contracts for the phase-one infrastructure work have been awarded and land development activities, including infrastructure and marina works, are going ahead.
-By Tahani Karrar-Lewsley, Dow Jones Newswires; +9714 446-1692; Tahani.Karrar@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
07-12-11 1143GMT
