Reem Island developer eyes debt market move

UPDATE 1: Phase 1 of $30bn mega project slated to be complete by April 2010.
Reem Island developer eyes debt market move
PROJECT DATE: Phase one of the infrastructure works on Reem Island in Abu Dhabi will be completed by April 2010, developers said on Monday.
By Alex Delmar-Morgan
Mon 20 Apr 2009 11:33 AM

Developer Reem Investments said on Monday it was considering going to the debt markets to fund infrastructure works on Reem Island.

So far, master developers Sorouh, Reem Investments and Tamouh have not looked to raise debt to finance the $30bn mega-project.

“At the right time we might go to the debt markets,” Reem Investments CEO Bambang Kajairi, said on the sidelines of real estate event Cityscape Abu Dhabi.

“We are looking at the situation, when we should go out, whether we should go at all. In the last three or fours years we haven’t gone to the debt markets at all, everything was financed from our own balance sheet,” he added.

Reem Island is less than 3.5km from the Abu Dhabi mainland and will house 200,000 residents with schools, mosques, parks and the Paris Sorbonne University.

The developers said they were looking to make savings on Phase II and Phase III of infrastructure works due to falling construction costs.

On sales, Reem said it had sold 50 plots of land to sub-developers and kept 10 back itself for recurring income.

Some 45,000 sq m of office space and 40,000 sq m of commercial space had been leased, Tamouh said, but it was also holding back some stock for income.

Sorouh, Abu Dhabi’s second largest developer by market value, said its Sky Tower at the AED12.5bn Gate District was ‘practically sold’ and 65 percent of its Sun Tower was sold

Infrastructure development at Reem Island is 50 percent complete, the three master developers in charge of the project said earlier on Monday.

Phase I of infrastructure works would be complete by Mar. 31 2010, they said.

The cost of the first stage of infrastructure which includes sewerage and storm water irrigation is AED1.2bn, the developers said. Total infrastructure spend would be AED11bn.

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