Developer Sun & Sand Developers plans to expand affordable housing sector in Dubai, starting with a pilot project in Dubai Industrial City.
“We wanted to show that creating budget homes that are true to their meaning can be done in Dubai from a construction and project completion standpoint,” said Sailesh Israni, CEO at the developer.
Sun & Sand Developers are sure that a truly affordable property could become a reality in Dubai, but this requires consolidated efforts of the authorities and private developers. “A product that is affordable to the genuine end-user and this can only be achieved by a developer looking at economies of scale and reducing his profit margins," said Israni.
That’s why Sun & Sand Developers had chosen Dubai Industrial City for its first affordable housing project. Besides, land plots here cost approximately USD 150 per square foot.
Initially, Sun & Sand Developers plans to build four ground plus one apartment blocks in Dubai Industrial City, containing 32 apartments with a footprint ranging from 520 to 720 square feet. One year rental cost for one bedroom apartment will be USD 7,800, while two bedroom apartments will cost USD 10,500 per annum.
If all goes as planned, in the future developer will put similar units on sale at a price of USD 88500 for a one bedroom apartment and USD 116,000 for a two bedroom unit. Sun & Sand Developers believe that monthly installments for affordable property shouldn’t exceed 30% of the salary.
“The plan is to first complete the project as a pilot case and to show that affordable units can be delivered to quality and within budget,” said Israni. “Once that’s done, we will show the prototype to the concerned authorities to confirm all the compliance measures.
“Then we could think of building more, in larger formats and offering them for sales as freehold.”
Israni believes that to build affordable housing, developers need to cut margins to under 20%. "If the developer, the government and financial institutions support each other seamlessly the cost of a standard apartment can be reduced by nearly 36 per cent".