Service charges cut at Discovery Gardens

Nakheel, the real estate arm of Dubai World, has lowered service charges for its Discovery Gardens development by Dh5 per square foot in agreement with Dubai's Real Estate Regulatory Agency (Rera).

The announcement follows a review of its own budgets and that of its suppliers by Nakheel.

In a statement, the master developer said the new service charge will be backdated from January 1, 2009, with any rebates for householders being credited against next year's service charges, effective October 1, 2009.

Abdulrahman Kalantar, Managing Director of Nakheel Asset Management and Design (Namad), said: "When we first set the service charges for Discovery Gardens, they were based on our best estimates for this new Nakheel community. Following a lengthy review, we have been able to take advantage of recent reductions in the cost of goods and services, which has in turn reduced our overall service charge budgets. We're delighted to pass on these cost savings to every homeowner at Discovery Gardens."

Service charges across Nakheel's developments, including Discovery Gardens, are budgeted according to projected costs and all accounts are independently audited to ensure accuracy and transparency for homeowners. "We work with Rera, residents and suppliers to ensure that the charges are in line with market averages," he added.

The service charges in Discovery Gardens vary from building to building based on relevant costs for each building. According to Nakheel, there are 245 buildings at Discovery Gardens and the majority of these buildings have been sold to third parties. "The service charges also include all district cooling charges, which amount to just under a third of the total costs. When the district cooling costs are removed, the actual service charges are about Dh14 per square foot, which is a reduction of approximately 25 per cent of the previous rate and in line with similar developments across Dubai," said Kalantar.

Following the introduction of Strata Law in April 2008, the master developer has made necessary preparations to register Owners' Association with Rera once the regulations are finalised by the Dubai Land Department.

Nakheel will also ensure that the owner associations are established in a timely manner, together with the creation of an owners committee, which will empower residents to actively participate in the management of their building.

Speaking to Emirates Business, real estate agents said the move by Nakheel will not lower rentals but the landlord will benefit from a drop in service charges. According to agents, Nakheel was previously charging Dh21 to Dh28 per sq ft as service charge.

"It is a good move by Nakheel to lower service charges as it was high in the first place. With this, landlords will benefit directly and perhaps even pass on the benefit to a potential buyer in Discovery Gardens with lowered sales price," said Andrew Delport, Chief Operating Officer, Gowealthy.com.

Mohanad Alwadiya, Director, Harbor Real Estate, said Nakheel's move is a proactive measure to establish service charges in line with Rera's market requirements.

"The drop in service charges is a direct result of Nakheel correcting its service charge rates. I don't anticipate that rents will drop as a result of this move. The drop in service charges will help landlords as it shows that Nakheel is listening to their complaints," he added.

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