Dubai: Involving multiple contractors working on a project — rather than be tied to one main contractor — is proving a boon for developers by ensuring it doesn’t get bogged down by costly delays.
“If we see there’s one cluster work that is falling behind schedule, we can focus on the problem immediately with the concerned contractor and try and speed things up,” said Niall McLoughlin, Senior Vice-President at Damac Properties. “This is the best option available for developers to mitigate the construction-side risks, which may not be possible when working with a single contractor.”
Damac tried it out for the first time at its upscale 42 million square feet Akoya development in Dubailand. “It was also the first time that we have been associated with a community-style project, which made it easier (to sign up multiple contractors associated with the various clusters),” said McLoughlin. “We simultaneously have a 450-stron in-house team embedded with the contractors to smoothen the whole process.”
For developers, getting to the finish line within the stated project timeline has assumed heightened significance. In a tightening property sales market, investors would take a dim view of projects that have a sizeable gap between the launch and anticipated completion. More so if projects get caught in interminable delays.
For the contractors involved, such moves by developers would be a double-edged sword. Sure, they can still pick up sizeable contracts that would keep their operations in fettle, but they will not amount to what they would have got if they had it all to themselves.
Damac looks to deliver the first villas — of which there are to be 2,400 units and priced in a wide band between Dh4 million to Dh40 million — at Akoya by year-end. The location will also feature the Trump International Golf Course (95 per cent complete) plus associated golf club.
Sales of Akoya based residences played a big part in the developer’s sales of Dh2 billion in the first quarter of this year.
The whole development will be completed in 2019, which will include a 100,000 square retail hub and Waitrose anchoring it with a 26,000 square feet spread. And there will be another 300,000 square feet of retail space spread along a 2.5 kilometre ‘Walk’. An operator for a cinema will also be identified.
The project would net Damac a sales value of $7 billion, according to McLoughlin. “We are working on the launch schedule for the limited set (totalling 30 units) of Fendi villas,” said McLoughlin. “The pricing has not been decided.”
The Fendi launch — the first time that the fashion brand has been associated with property — will add another ‘label’ to Dubai’s growing roster of branded properties. Akoya itself will be home to the Trump PVRT ‘mansions’ within an ‘island’, as well as homes bearing the stamp of Paramount Hotels & Resorts.
Late last year, Atlantis came out with its version of super-premium residential offerings on the Palm. More signature properties are on the way, with RP Global expected to confirmed an operator for its high-end sky-rise project.
