The developer now estimates a 15% increase in their construction costs as opposed to what it would have been a year ago. One Dubai developer is learning about the ramifications of a year-long delay on project launches, Gulf News reported.
“The plan was to have the sales launch of the Elite Downtown tower — located in the Downtown area — in January 2014 ... but we could not go ahead with it at the time because there was an issue that involved the master-developer and the plot location but had nothing to do with us,” said Juwaad Beg, CEO of Al Madina Al Raeda Real Estate. “We were constantly pressing our case with the Dubai Land Department and to issue us with the No Objection Certificate for the sales programme. It was just three weeks ago that we had the final clearance from the Land Department.”
But things had changed in the interim. The developer now estimates a 15% increase in their construction costs as opposed to what it would have been a year ago.
“The initial plan was to cap the cost of development at around AED500 million, now it could be around AED550 million to AED560 million,” said Beg. “It also cost us by having our funds being blocked all through this period.”