Deyaar rolls out 2009 business strategy
• Company to deliver 3.6 million square feet of units in 2009
• Deyaar Park, Mirar Residences and Deyaar Enclave to be consolidated
• Customers to benefit from reduced cost of construction
• Soft payment plans and mortgage assistance offered to clients
Deyaar Development PJSC, one of the region’s fastest growing real estate companies, today presented further details of its 2009 business strategy, including specific projects to be considered for consolidation and total area of units to be delivered over the next three years. The strategy has already been rolled out across all business units and is focused on safeguarding its customers and cash flows, the company’s chief executive said.
Under the development strategy, the total area of units within all current Deyaar projects in the UAE is estimated at 16 million square feet. Of this, seven projects accounting for 4 million square feet (25%) will be delivered in 2009. Projects accounting for four million square feet (25%) are on track for delivery in 2010 and 2011. Deyaar Park, Mirar Residences and Deyaar Enclave, which together constitute to an estimated 4 million square feet (25%), will be consolidated within the rest of the Deyaar portfolio. Investors in these projects will be given the option to transfer their ownership to projects that will be completed on a fast track basis.
The transfer option will be exercised purely on a voluntary basis and will give customers the option to transfer their ownership to premium projects in prime locations. It will also allow customers to consolidate their total outstanding payments.
Unannounced and unsold projects are estimated at 4 million square feet (25%).
This approach is in line with Deyaar’s 25%/ 25%/ 25%/ 25% strategy announced earlier and ensures an effective consolidation of the portfolio in order to assist its customers to decrease their future payments. Customers will be contacted individually in order to develop a tailor made solution that meets their individual needs.
“Deyaar has constantly asserted its commitment to safeguarding the interests of its customers and securing its strong capital position,” said Markus Giebel, Chief Executive of Deyaar Development PJSC. “As a leading developer with strong underlying fundamentals, Deyaar continues to be exceptionally well positioned to use its current growth momentum and financial strength to shelter its customers and sufficiently address short-term growth challenges.
“With this objective, we have adjusted our product portfolio by assessing the feasibility of projects, and are allowing customers to transfer ownership to projects that will be completed on a fast-track basis.”
As part of the financial strategy, Deyaar will reduce the sale price for some projects that have already been sold. This is in line with the company’s objective of passing on the benefits of its reduced cost of construction to customers. This includes 30 per cent price reduction on Bristol Office Tower, and 25 per cent on Bristol Residential Tower, 30 per cent on Oxford Tower, an office tower development; and 25 per cent on Fairview Residency. All three projects are located within Business Bay.
The company will also provide soft payment plans to customers, replacing the original payment schedule with smaller payments to be paid out over an extended period. This will allow customers facing liquidity problems to avoid defaults and meet their obligations. This strategy has already proved successful on Deyaar’s Al Seef II project in Jumeirah Lakes Towers, which was delivered earlier this year.
Giebel said: “The financial strategy has been developed to safeguard our customers by stabilising their cash flows and helping them secure easier access to finance. This, in turn, will result in lower risk of defaults and lower receivables risk for Deyaar, maintaining the company’s healthy cash flow.”
As part of its communications strategy, Deyaar launched its first customer newsletter in February this year. Going forward, the customer newsletter will be distributed to all customers and investors in Deyaar properties on a quarterly basis. Additionally, the company is also revamping its website in order to process several customer service transactions online and provide clients with easy access to customer service facilities.
In order to enable customers to fully optimise the benefits of the new enhanced strategy, the company has also established a new customer service facility that will service clients looking for guidance on Deyaar’s new programmes. The facility is sufficiently equipped to offer customised support in structuring individual payment plans.
Giebel concluded: “With its emphasis on meeting the evolving needs of clients and securing Deyaar’s strong cash flows, these three facets of our 2009 business strategy represents the innovative and proactive approach that we believe is appropriate to thrive in the current environment. I would like to highlight here that Deyaar has fully factored in all likely future scenarios in formulating and structuring its business strategy.
“We believe this strategy will enable us to effectively use Deyaar’s financial strength and resources to benefit from current and future opportunities in the real estate sector and help Deyaar emerge even stronger when the larger economic recovery begins to take effect. “
