Abu Dhabi-based Sorouh Real Estate is studying options to develop middle-income housing on Shams Abu Dhabi, as it gets ready to hand over apartments in the Sun and Sky towers by early 2011.
“Sorouh is actively investigating options to develop middle-income housing on Shams, as outlined by the Urban Planning Council (UPC), in conjunction with various third parties,” the company said in a statement on Monday.
In July, UPC said all major residential property developments in the capital will have to set aside rental options for the middle-income group. According to the policy, the rents will be set between Dh25,200 and Dh88,200 per annum, or 35 per cent of total annual household income. The developer will determine the distribution of units within the project.
Gurjit Singh, Chief Operating Officer at Sorouh Real Estate, was quoted by Reuters, as saying: "The undersupply that is focused on in Abu Dhabi... is predominantly middle income and therefore is a gap that needs to be filled," he said, adding that Abu Dhabi's government was encouraging more middle income rental housing projects.”
Sorouh said The Sun and Sky towers in the new investment zone on Al Reem Island are physically complete and will be the first Grade A buildings to be delivered on Al Reem Island. The towers are at present undergoing testing and commissioning. Several approvals have been obtained from the authorities and the remaining approvals are being pursued vigorously.
“Pre-handover inspections by owners are progressing well, with nearly 1,000 residential units having been viewed by owners,” the statement said.
Infrastructure works are almost complete on Shams Abu Dhabi, which has allowed numerous sub-developers to start their developments. Ten plots are now under construction and are expected to be completed by 2012. Shams Abu Dhabi is seeing some deal flow in the sub-developer market with one new international investor purchasing a site in the secondary market.
Sorouh’s said its “lease to own” promotional offer for Sky Tower’s commercial space is progressing well, generating over 100 serious enquiries. There are ongoing discussions with several blue chip companies for office space. The developer will be launching a residential “rent to own” promotion shortly.
On Monday, Sorouh said its third-quarter profit declined 68 per cent as revenues fell and finance costs almost tripled. Profit in the three months to September 30 fell to Dh59.3 million ($16.15 million), compared with Dh187.3 million in the year-ago period.
The profit was "mainly attributable to a plot sale, rental income from the investment portfolio and construction contracts," the company said in the statement.
Analysts polled in a Reuters survey in October forecast an average profit of Dh48.5 million for the third-quarter.
Sorouh said it added a further Dh38 million of provisions in the quarter. Revenues for the quarter fell to Dh371 million from Dh1.4 billion in the same period last year.
Finance costs amounted to Dh72.3 million, up from Dh26.8 million, it said.