The Palazzo Versace hotel in Dubai has cut the price of its apartments by half, but there has been no skimping on the fittings.
A high number of defaults has meant several properties in the Dh2 billion (US$544.4 million) development coming back on to the market at a discount, but all the 169 private homes and 213 hotel rooms will still come with furniture and accessories, right down to the $120 drinking glasses, designed by Versace, the Italian designer.
Eighty per cent of the residences were sold before the financial downturn, with buyers from the UK, Russia and around the region among those who jumped at the offer. But many did not follow through with payments, said Soheil Abedian, the managing director of Emirates Sunland Group, the company behind the project.
"More than 50 per cent of [the apartments sold] have not performed," said Mr Abedian, adding that he was in the process of cancelling about 40 contracts through the Real Estate Regulatory Agency. "When these processes are completed ... we are allowed to sell [them]."
Partly because of these financial problems, construction of the luxurious development on Dubai Creek has slowed and it is still about 12 to 14 months away from completion, having started building in 2007. The main structure of the building is almost finished.
When the apartments first came on the market, prices started at Dh17.7m. Now, a two-bedroom apartment in the Versace property can be had for Dh8.5m, Mr Abedian said. The average price is now Dh4,500 per square foot.
Seven apartments in the Palazzo Versace were sold last year.
"The market is there," said Mr Abedian. "The apartments are selling, but still there is a doubt in off-plan products."
The company has switched from property sales to equity and bank loans to finance completion. External source: To read complete article 'Click Here'.