Tanmiyat says investor defaults could hit 50%

Saudi developer adds that it is offering string of concessions to keep rate low.
Tanmiyat says investor defaults could hit 50%
By Alex Delmar-Morgan
Tue 06 Oct 2009 07:26 AM

Investor default rate on Tanmiyat's projects in the UAE could climb as high as 50 percent, the developer has warned. "It could go as high as 50 percent," said Wan Hansi, advisor in charge of Tanmiyat.

He said the current default rate on the Saudi-based developer's three projects in the UAE was low thanks to a string of concessions introduced by the company to help struggling buyers.

Tanmiyat, which owns AED10bn of assets, has revised payment plans for its projects in the UAE and stopped collecting installments from investors for 12 months in February this year.

"I believe that the default rate will come in stages," Hansi added. "The early defaulters is one group and then you will get others along the way. But we want to make the default rate as manageable as possible."

Tanmiyat has around 60 staff in the UAE. Some 2,000 investors have bought off-plan property from the developer in the UAE.

Hansi said Tanmiyat in the UAE would look to fund 20 percent or around AED400m of construction costs through raising debt.

He said he expected revenue from the group's operations in the UAE to be around AED500m in 2009 due to the downturn - half of the AED1bn revenue the company saw before the crisis.   Tanmiyat's AED4bn Living Legends project at Dubailand is due for completion in 2013. Its AED1bn Commercial Heights scheme in Business Bay is scheduled for delivery in 2012.

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