Austrian company launches first development at The World

Dubai: Kleindienst Group, an Austrian property developer established in 2003 in Dubai, has decided that it is the right time to officially launch its Dh3.1 billion project on The World, the group of 300 artificial islands four kilometres off Dubai's shoreline.

The company has bought six islands comprising Germany, Switzerland, Austria, Netherlands, St Petersburg and Sweden and will market them as The Heart of Europe, the company's CEO Josef Kleindienst said at a press conference at The World on Monday.

Ten per cent of the investment amount has already been paid to developer Nakheel, Kleindienst said. Several other instalments up to 30 per cent of the entire cost will be paid by Kleindienst Group until 2012 in accordance with a payment plan.

For the remaining 70 per cent, additional financing will be sought, Kleindienst said. "We are going to pay all the bills out of our own pockets until 2012, as funding is too expensive at the moment. There is a comprehensive payment plan, and Nakheel is very supportive to us."

Despite the tense sentiment on the Dubai property market, Kleindienst said he is confident that all plots he offers will be sold "very soon".

On the island of Germany, plots for three villas have been sold for Dh300 per square foot.

"In the first quarter of 2010, we will start construction on Germany. Completion of the villas should take no longer than 12 months."

Construction costs for the villas will be around Dh500 per square foot, depending on the customer's choice of materials.

The other islands will follow. Altogether, there is space for 20 villas as well as six hotels. For the latter, he is currently in talks with family-owned Austrian hotel operators, Kleindienst told Gulf News in a separate interview.

Deadline 2015

One of the hotels will be themed after Austria's late empress Sissi. The island of Netherlands will have another hotel and is planned to act as the "party island" of the development, Kleindienst said.

The entire project is scheduled to be completed in 2015. However, some issues with infrastructure are yet to be solved. "Power is the biggest challenge for us," Kleindienst admits.

The villas are expected to be supplied by solar power generators. As for the water supply, "Dewa has said ‘maybe' it will connect the islands to water supply after ten per cent of The World is finished", Kleindienst said.

For the sewerage, self-contained recycling systems will be available which are capable of recycling waste water to use for landscape watering on the island.

The solar power system costs an extra Dh300,000, and for the sewerage system owners will have to shell out another Dh50,000. Service charges are following an "open-book policy" and will be the concern of the future home-owners association.

Bank guarantee

According to Kleindienst, buyers immediately receive their title deed and will also get a bank guarantee during the payment process. The entire development enjoys freehold status.

Kleindienst said he is convinced that a villa on The World is a "very safe investment".

Every instalment by customers will be put into an escrow account, and he solely targets end-users as buyers as he does not want "to cater to speculators".

"There is still a big market for holiday homes," Kleindienst said. "Germans alone are expected to purchase 60,000 holiday homes around the world in 2010."

As for the price drop on Dubai's property market, Kleindienst said it is good that prices have come down because "this is healthy for Dubai. For the macro-economic situation of the city, property should not be too expensive."