By Joanna Hartley
Dubai developer to renegotiate construction contracts after fall in price of raw mnaterials.
The developer behind Tameer Towers on Reem Island has announced that it is “reviewing” the construction contracts for the project, it has been reported. Dubai-based Tameer Holding plans to renegotiate $1.6bn (AED5.87bn) worth of building contracts with Al Habtoor Engineering, Murray & Roberts and Al Rajhi Contracting, said a company insider, according to UAE daily The National. “Tameer is reviewing the construction programmes and associated costs for its iconic Tameer Towers project on Al Reem Island,” a company official said.
“Tameer confirms that the Tameer Towers project is moving ahead. The enabling works are complete. Residential sub-structure works will commence upon completion of this assessment,” the source added.
Declines in the cost of building raw materials, such as steel and cement, have led to the renegotiation of contracts by several developers in the region.
The move allows companies to pass on savings to buyers in a bid to boost the slowing real estate sector. The contract review is the latest move by Tameer, which is majority owned by the Al Rajhi Investment Group in Saudi Arabia, to survive the region’s property crisis
Late last year it made more than half of its staff redundant, affecting 180 people. Tameer Towers, the central project of the Shams Abu Dhabi development on Reem Island, will have six towers, including four residential buildings, one commercial building and a hotel. Sorouh Real Estate is the master developer of the site.
However, Gurjit Singh, Sorouh’s chief property development officer, refused to comment on the Tameer project specifically. But added: “In the current global economic climate, it will not be surprising if some developers choose to delay some projects."
“But such delays will not impact Sorouh or its projects. A development such as Reem Island is a long-term project and short-term delays will not be significant issues,” he said.