By Shane McGinley
Developer says real estate project unlikely to be ready for at least three years
Dubai’s delay-hit Business Bay district will need another three years before it is fully completed, a developer behind one of the project’s first completed towers said.
Slow utility connections and low occupancy rates have deterred tenants from seeing the partially-completed real estate project as a viable destination, said Shahab Lufti, CEO of H&H Investment and Development.
“It will be three years comfortably [before Business Bay is an attractive location],” he told Arabian Business.
The company last week launched its AED300m 014 property, some 14 months past deadline.
“We had issues with sewage, water and electricity. We only got permanent power in January and the building completion was January last year,” he said.
Vacancy rates in the development remain high, in part because declining rental rates elsewhere in the emirate have made office space comparatively cheap to lease.
Around a quarter of units in the 014 tower are occupied but a number of tenants who bought space in development in 2006 have not moved in, despite the handover of office space.
“The location they are in right now gave them such a favourable rate it is actually cheaper to rent than to fit out a new office so we said we will wait for a couple of years,” Lufti said.
Around 12 million sq ft of commercial space probably will be completed in Dubai this year, according to Jones Lang LaSalle Inc. Office vacancy rates stood at 41 percent in the fourth quarter and may exceed 45 percent over 2011, the property broker said on January 23. Average rents dropped by 30 percent during the fourth quarter.
Office occupancy costs in the Middle East continued on a downward trend in 2010, with average prices falling by four percent, according to a survey published last week.
Dubai had witnessed the largest declines in occupancy costs per workstation over the year, falling by 40 percent and 27 percent respectively, DTZ said.
Dubai Properties, the master developer behind Business Bay, has said the project is scheduled for completion in 2015.
The 64 million sq ft project is set to become home to about 191,000 people across 240 towers when completed.
All these delays is cosing the investors, millions of dirhams, by way of delayed handover. Profit during construction is being claimed by the finance companies, and the poor investor will either go bankrupt or else leave the country and go.
What is RERA doing about these developers.
If a complaint is lodged, they will send you to the court, which is another expensive affair.
Wake up RERA. Do something, or else even 2015 we will send sandy roads in Business Bay. The water will dry up in the creek, if no action is taken NOW.