Sunday, March 8, 2009

Memon Investments projects UAE real estate market to bounce back within next 8 to 12 months

Memon Investments projects UAE real estate market to bounce back within next 8 to 12 months

Construction cost per square foot in the Emirates falls by an average of 30 per cent

March 8, 2009

Memon Investments, a leading Dubai-based property developer and part of the international business conglomerate, the Memon Group of Companies, has projected that the UAE real estate market will bounce back within the next eight to 12 months. The developer has based its optimistic forecast on recent industry findings, which reflect a decline in the construction cost per square foot within the Emirates by an average of 30 per cent since the onset of the economic crisis. The developer has also committed to continue fostering its strong relationships with leading construction companies, in line with its goals to hit the delivery targets for its projects - starting with the AED 75 million ‘Champions Tower I’, which is due for delivery by the end of 2009.

Industry experts point to the massive drop in the prices of steel, as well as that of other materials including aluminium, wood, glass and diesel. The declining cost of labour and supervision due to recent redundancies and terminations has also contributed to the dip in construction expenditures, which are now pegged between AED 400 to AED 900 per sq. ft. in Dubai and Abu Dhabi, and to as low as AED 170 and AED 200 per sq. ft. in Ajman. Amidst speculations of further decrease in construction costs in the coming months due to plunging oil prices, building materials costs and transportation prices, Memon Investments is focusing all its resources towards hitting the delivery deadline set for all its announced projects.

“In lieu of the massive correction in the prices of basic construction materials, we are now focusing our strategy on the implications of this development, particularly with regards to the construction and delivery of our launched projects,” said Ahmed Shaikhani, Managing Director, Memon Investments. “Our strategic planning and consolidation efforts is being driven by our strong resolve to stay true to our promises to our customers in the face of this economic crisis, and we are proud that our actions are paying off with the steady progress we are witnessing in all our projects.”

Memon Investments currently has a portfolio of projects valued at close to AED 1.34 billion, which includes the high profile residential 'Champions Towers' series, the luxurious ‘'Gardenia I & II’, the ‘Frankfurt Sports Tower I’ and the 'Cambridge Business Centre'. The developer also announced that it has identified major master developments in Dubai, including Jumeirah Village South, MIZIN and Downtown Jebel Ali as locations for its new projects, which will include luxury residential, commercial and mixed-use developments. Amongst the leading construction companies with whom Memon Investments has signed strategic partnerships are Stromek Emirates Foundation, Majed Hilal Contracting, Al Sarh Contracting and Cairo Contracting Company. Additionally, the developer has also partnered with leading UAE-based construction suppliers, including Shanghai & Arabian Electromechanical LLC (SAE), HI-TECH Electro Mechanical Contracting Est, ETA MELCO and WIN GATE Electromechanical Services.

“The current adjustments we are seeing in the price of construction indicate that the industry is becoming healthier, which spells more opportunity in the long-term for those who can withstand these truly challenging times that the market is currently facing. It is our goal that by the time the real estate market regains its former vigour; we will be among the few developers to have endured the challenges and remained stable. We plan to accomplish this by working hand in hand with our construction partners as we determine the best course of action to be taken during this unique period in the history of real estate,” concluded Shaikhani.

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