Real Estate Mega-Development of Yeti to go ahead

In a rather confusing press release yesterday, Dubai based property developer Sama Dubai has said that their Salaam Yeti project will go ahead [as posted on Muscat Confidential on Thursday], while admiting that the company was forced to review its plans. He also states that things "cannot work in the same manner in the light of the aftermaths of the international financial crisis" and that banks are not financing such projects at the moment, whatever that means.



I would expect that he means early receipts from off-plan sales will no longer be considered as crucial a part of the project finance, and perhaps big discounts will be on offer for those still looking to spend their cash on something not yet built and finished. But seeing as how so much money had been spent already on earth works and breakwaters, it seems the project needed to keep going, and presumeably Dubai Holdings, Sama's mother company, can still get access to credit.

Time of Oman

Global financial crisis will not hit Salam-Yetti Project: Sama CEO
Times News Service
Friday, December 12, 2008 11:24:03 PM Oman Time

MUSCAT — Farhan Faraidooni, CEO of Sama Dubai Company, the arm for international development and real estate investment of Dubai Holding, has denied rumours about suspension of works of Salam-Yetti Project, executed by the company in the Sultanate, saying that “work on the project is on and will not be affected by the international financial crisis and will continue as scheduled”.

“We will offer the residential units for sale during the second quarter of the next year as per a pricing policy that will cope with the developments in the real estate market,” he added.

“What applies for the Salam-Yetti Project applies for the other projects executed by the company in Dubai, Qatar, Bahrain, Morocco and Tunisia,” he said, adding that Sama Dubai was keen on proceeding with its plans as scheduled for completion of its projects and fulfilment of its obligations toward its clients and the community.

“But, at the same time, we do not ignore the financial crisis witnessed worldwide which made the company review its project plans,” he said.

The international financial crisis has cast a shadow on the various sectors, including the banking and real estate, he said.

“Sama Dubai and the other companies operating in the field of real estate development cannot work in the same manner in the light of the aftermaths of the international financial crisis and impacts of the same on the states of the region,” he said, pointing out that the world was “witnessing a new stage, which will necessitate the companies operating in the field of real estate development to re-programme their plans and mechanisms as per the new economic outcomes”.

The states of the region would not escape the impacts of the international crisis as they operate within an integrated international financial and economic system, he said, stressing the need for transparency in disclosure of the facts of concern to the public.

Speaking on the banks’ reluctance to finance real estate projects in the present time, he said: “I hope the banking sector will begin to finance the same during the second quarter of next year in the light of the 2008 disclosed profits of the companies.”

...

The project, worth $1.7b, is carried out in two phases: the first phase will be complete in 2011 and the second is expected to be completed by 2013.