Diamond to build 2,500 houses amid property glut

Developer says appetite will have improved when Dubai Land homes are delivered in five years
Diamond to build 2,500 houses amid property glut
As many as 48,000 homes will be completed in Dubai in the next two years, increasing current supply by 12 percent
By Bloomberg
Tue 10 May 2011 09:07 AM

Diamond Developers, a privately-owned builder based in Dubai, plans to develop 2,500 townhouses in the Dubai Land entertainment complex, adding homes to a market where prices have fallen by more than 60 percent.

“I know we will be called crazy,” chief executive officer Faris Saeed said in an interview in Dubai Monday.

Demand for townhouses is stronger than other types of property and the market is likely to improve by the time the properties are delivered in about five years, he said.

As many as 48,000 homes will be completed in Dubai in the next two years, increasing current supply by 12 percent, Landmark Advisory estimates.

Dubai Land, a leisure and park that would have been twice the size of the Walt Disney World Resort in Florida, was one of the numerous projects halted after Dubai’s property market crashed in 2008.

Diamond, 75 percent owned by the CEO, will start building infrastructure such as electricity, water and sewage lines for the development in the fourth quarter of this year. Construction of the first 400 homes and 13,935 sq m of office space will start early 2012, he said.

“We don’t look at this project as simply a property development,” he said. “It’s more of a lifestyle one that will be sustainable.”

The planned development is designed to include commercial and retail space, an organic farm and schools, he said. Funding for the project will come mainly from private investors.

Diamond will hand keys to buyers of 600 homes at Jumeirah Village over the next three months, Saeed said. The company has built 2,700 apartments and townhouses in Dubai Marina and Jumeirah Village since it was started in 2003.

Diamond in December won a ruling against state-backed developer Nakheel over an island on the offshore World development. Nakheel had attempted to raise AED41m in late fees from Diamond, which had moved to transfer its investment from the stalled island to a plot in Jumeirah Village.

The two-day trial was the first completed by the Dubai World tribunal, a panel set up to resolve disputes relating to Nakheel’s parent company.

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