Indian property firms back in UAE wooing expats

Property companies from India are back in the UAE market aggressively wooing investment.

Several of the companies currently advertising investment have in fact been under the scanner for not completing projects that UAE investors had put money into before the economic crisis.

SRK Group said it is resuming its Skywing township project in Kochi, Kerala in partnership with Fern Valley Group of Bangalore to complete the first two towers.

The Pune-based SRK Group has completed s projects outside Kerala, especially in Bengaluru, but its biggest township project in Kochi has been marred by delays and the financial crisis that hit overseas Indian investors.

Confidence in the real estate and construction sector was hit severely after promoters of Apple a Day Property, a construction company, was accused of duping several investors.

Speaking to Emirates 24|7, K R Malik, chairman and managing director of SRK Group, said hundreds of builders in Kerala have been hit by a crisis of confidence and delay in projects caused recently, but his group is reviving the stalled projects.

“We could not complete the projects as per the original schedule because of various reasons including payment delays by investors. About 250 expat investors have booked flats and 150 have cancelled their contracts with the company, putting us under tremendous pressure. In addition, construction costs have escalated.”

He said all expat investors who cancelled their bookings for flats in the SRK Group projects have been paid back 90 per cent of their investment and a team from the company has met investors in the UAE and other Gulf countries to regain their confidence. 

Paul Fernandez, CEO of Fern Valley, said the group is investing in the Skywing project because its viability had improved now, especially after work on the Smart City project in Kochi restarted.

“Now there is a labour shortage in Kochi, because 5,000 construction labourers are employed on the Smart City project, jointly promoted by the Kerala government and Tecom, Dubai.

“Once the Smart City project is completed in the next two to three years, the landscape of Kochi will see a total facelift. Projections say the Smart City would create 60,000 white collar jobs, creating corresponding demand for housing units in the area. Only 8,000 new housing units will be added there and SRK’s housing projects are located only 2 km from the Smart City. While the per square feet price  for flats in the Skywing project was only around Rs 2,000, we will be selling the same at Rs 4,000 per square feet now,” he said.

A few hundred construction companies from Kerala have been hard hit by the Apple a Day Property scandal, prompting an investigation by the state government into abandoned and incomplete projects sold to investors.

The SRK Group chairman said it tried to address customers’ grievances by selling its land and assets in other Indian cities and by roping in new investors and partners for the projects.

“We have taken a severe beating because of project delay. The company suffered big losses because of construction cost escalation. However, we have managed to restore customer confidence and work has resumed at our construction site,” Malik added.

“We will be updating investors every three months on progress of construction. Customers who have booked flats owe us a lot of money,” he added.

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