KM to deliver Business Bay projects in two years

KM Properties, a Dubai-based real estate developer, will be delivering its three projects in Business Bay over the next 18 to 24 months, a top company executive said.

"Construction is going on in all our towers – Park Lane Tower, B2B Tower and Tamani Arts Offices – which will be coming into the market in the next 18 to 24 months," Sanjeet Joher, Group Chief Executive officer, KM Properties, told Emirates Business.

Even though some developers in Dubai have started repossessing units from defaulting investors, KM Properties has emphasised on rescheduling payment plans, having offered the option to approximately 40 to 50 per cent of its customers.

"We are not doing it [repossessing]… we are giving everybody a fair and equal opportunity. Although times are challenging, we are optimistic about the market. We have a clear vision and mission to help our customers… but beyond a certain level it will become challenging."

Consolidation has not been a preferred option of the developer, as it believes "consolidation impacts viability of the project".

"Although, we have been rescheduling payments, we haven't done consolidation to that greater extent as we don't want the project's viability to be affected since we still are obliged to build/complete the tower."

Number of developers in the region have reduced sale prices for some of their projects sold during the boom period.

According to Joher, they have not offered any price discounts, insisting units were sold at "realistic" prices. "We are more or less in the ballpark figure of between Dh1,500 and Dh2,300 per square feet in Business Bay. Besides, our projects are iconic, offering investors a good value for money and good returns."

Joher claims KM is among the "few developers who have signed contracts with its investors".

"Signing a contract means an obligation from the developer and it ensures that the project will be delivered… We have already signed more than 80 per cent of our contracts," he said.

Asked how the firm was managing its cash flow in tough times, Joher said: "About 60 per cent of our investors are cash buyers. Besides, we have collected between 60 and 80 per cent money from our customers. It would have been challenging had we been in the lower collection bracket."

Finance buyers constitute 25 per cent of KM Properties' investor base, while 15 per cent are a mix of cash and credit. Even though the developer has some inventory left in its three Business Bay projects, it is in "no hurry" to sell them.

"We have some inventory left with us in all our towers. We will start selling it depending on the market conditions… if for some reason we are unable to sell it then we will rent it out."

According to the developer, five per cent inventory is left in Park Lane Tower, 25 per cent in B2B Tower and 35 per cent in Tamani Arts Offices. Asked if KM Properties will sell units at discounted prices, Joher ruled it out, saying: "We will protect all our investors… we will ensure that the prices we sell at are higher than the prices at which our investors had bought it. We cannot compete with them in the secondary market as it won't be fair."

According to Joher, a few institutional investors have approached them, but no concrete deals have yet been struck.

"A few institutions have approached us and are looking at the option of either leasing or purchasing our inventory. However, we are not in the hurry to sell, as we have an obligation towards our existing customers before we have anybody else on the board."

Besides, KM Properties has linked the delivery of its projects to infrastructure completion in Business Bay.

"There has been a slight reschedule with project handovers now linked to infrastructure completion. We don't want to make a tower where there is no power supply, or chiller facility available… we want to ensure handover is linked to infrastructure so there is no burden on the customer as he can rent it out."

The developer says it is liaising very closely with all authorities such as Dubai Properties Group, the Land Department and Real Estate Regulatory Agency in order to ensure that project are delivered in conjunction with the infrastructure completion.

Meanhile, KM Properties has deferred construction on El Matador Tower in Jumeirah Village.

"We have the plot in our possession and we will certainly work on this tower once the market is better."

Asked if the developer was looking to enter Saudi Arabia, Joher said the company has no immediate plans to enter the kingdom and has not set up any joint venture there.

"We will be basically focussing on our three projects in Dubai… we have made a commitment to our clients and we want to deliver that." Joher believes towers that have a low running cost are more likely to be in demand.

"Our focus is to ensure that the running cost of the building is kept to the minimum," said Joher.

Work in progress

Tamani Hotel at Park Lane Office Tower, Business Bay, is a 34-storey mixed-use tower, designed by Carlos Ott. Construction has reached the 20th level with core wall construction from 19th to 20th is in progress.

B2B Tower is a commercial building with three podiums and 19-storey office tower. Construction from basement 2-1 is in progress with core walls and columns completed.

Tamani Arts Offices, a 19-storey office tower designed by UK-based Terry Farell and Partners, is part of the Artisan Cluster in Business Bay. Basement one slab concreting works is completed, while basement one to ground floor columns, corewall, retaining wall and slab form works are in progress.

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