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Investors get novel realty funding offer

London and Dubai-based property wealth manager MiNC, developer of Prodigy 1 in Jumeirah Village South, is offering investors a novel way to get their project built, against the dismal background of the economic crunch.

  • By Suzanne Fenton, Staff Reporter
  • Published: 23:15 November 19, 2008
  • Gulf News

Dubai: London and Dubai-based property wealth manager MiNC, developer of Prodigy 1 in Jumeirah Village South, is offering investors a novel way to get their project built, against the dismal background of the economic crunch.

MiNC has put forward a proposal to investors, in which each investor would pay around Dh1,000 per square foot in order to get the project finished.

In letters to investors, MiNC said that due to the current economic crisis, two local banks have withdrawn their funding from the Prodigy project, making it impossible for construction to continue.

Using an interesting strategy, MiNC told investors that "the project is no longer financially viable. Costs have increased to the extent that MiNC would make a significant and material loss if it were to build this project."

Speaking to Gulf News, investors were concerned that MiNC was giving them an ultimatum of paying or cancelling the project.

However, MiNC officials are adamant that it is just a proposal and the project will go ahead. "If our proposal is rejected, then we will wait until we get project financing. But I don't think we'll get financing for at least 18 months," Simon Everest, director of operations, told Gulf News.

MiNC is talking with other local banks to try to secure financing, according to a sales customer adviser at MiNC. "We want to get the building built," Everest said.

In exchange for each investor paying Dh1,000 per square foot, instead of the lower prices they were paying previously, contractors will be able to resume construction immediately.

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