Dubai Properties Group, a subsidiary of Dubai Holding, has “billions” in receivables from developers across its various master communities with Dh4 billion alone pending from the Remraam development in Dubailand, company CEO has revealed.
“We have billions of receivables from the market… it is these developers, sub-developers who have caused the problems… they are not paying us so how can I pay my contractor.
If they pay what is my problem… I have no problem,” Khalid Al Malik, Group Chief Executive Officer, DPG, told Emirates 24|7.
“I have always said this and still saying that if the market pays us what can hold us from continuing developments. We have done it in the past.
We did everything when we were receiving our receivables. So it is unfair to blame us and forget the reason causing the problems.”
According to Al Malik, the company is fully committed to Remraam project despite the fact that the company has Dh4 billion in receivables from this project.
“The project is registered with government of Dubai.
I have receivable of Dh4 billion but I haven’t shrunk the size of the sub-station, sewage, etc because I am continuing Remraam with the whole 200 buildings; may be not today for those which have been stopped, but I will restart later on as I am restarting my projects.”
Stick to your commitment
Asked why investors were given refund for buildings not constructed, he said: “I have committed to pay billions to my contractors. Investors paid me 10 per cent as down payment and later cited financial crisis to avoid paying their installments.
We went to Rera and asked them for a solution. Following their advice, we sent letters to investors, asking who wants to continue with the project. Later, we agreed with Rera to develop 60 buildings for those who sought to pay.
“Ones who did not answer came back, saying, ‘You are not building my building, so pay me back.’ But Screampoint report said ‘the percentage for the buildings that we stopped work was above 20 per cent.’
Besides, we set up a sub-station, road and sewage network for the project. Rera told them investors that they cannot simply walk away from their commitments.”
“Consolidation is our option”
Al Malik defended his company’s policy on consolidation front, saying, “the option was with DPG to consolidate or not.”
“Why I should take it back and consolidate… you made a commitment so stick with your commitment. It is not my mistake… it is up to us to help or consolidate, but I can’t take each and every customer as per his demand.”
Besides, there is a complexity issue while dealing with a number of customers, he added.
“You have to create a policy.
If you bought five you can consolidate to three or if you have 10 you can take seven.
But if someone who bought 10, asks me to give one what do I do… I have an obligation to pay the contractor; how can I reduce 10 to 1; how can I survive. Besides, my infrastructure is part of your payment.”
Completed units in demand
Al Malik said that the company was witnessing “massive” demand for their real estate projects, especially completed units and villas.
“The market has started to come back and request information. We have sold a couple of building in Marjan, Bahar 4, etc. This is because the appetite is back, the market is good as financial institutions are offering mortgages,” he added.