A construction-based payment plan from property developer Chapal Group could be the beginning of a new trend in the UAE market.
"In the current market situation, people are not planning to invest in the market," said Jawad Chapal, Executive Director at the Chapal Group in an interview with Emirates Business.
"We felt this is the right time to gain confidence of investors and buyers in this market and hence we decided to introduce a construction-based payment plan. This will be part of our 40th year celebration in January."
The current offer is for its new customers and will be valid for projects in Dubai and Ajman. "Right now everything is based on inventory and will depend on availability," said Chapal.
The payment schedule will be decided between Chapal and the client. "This is only valid for new customers. It depends on the work on site and will be decided between us and the clients. We have not finalised the payment schedule yet and will do so in future with them directly."
According to him, every developer is being affected by the economic situation. "We are also affected by the current scenario like every other developer. So far, we have announced 14 towers in Dubai and Ajman. Of these, construction has already started on six of the towers. Work is continuing (see table) since the clients are paying us," he said, and added all Dubai projects have an escrow account. "Our clients are secure so far," he said.
Price fluctuations notwithstanding, Chapal did not want to delay projects, he said. "The rates for construction have been high but we have gone ahead with signing the contract at that time since we wanted to start construction and did not want to delay our projects," said Chapal. "The prices have only come down for concrete and steel. But there are other components in a project such as aluminum, elevators and others and those prices have not yet come down. Even MEP is expensive. Prices can fluctuate but in the end, the developer is paying more. Project costs are based on many factors and it is not just concrete, steel and oil that dictate the budgets.
Ajman Property News, December 2008
