Pakistani master-developer of real estate projects, Chapal World is offering an eight-year flexible payment plan with just Dh5,000 deposits to attract end-users, that analysts say, could stimulate the UAE's stagnant property market for a solid growth.
"We are the first developer to launch the eight-year payment plan in the UAE. This comes from our experience in Pakistan where we have implemented this to help buyers," said Mohammad Amin Chapal, chairman of Chapal World, a company which delivered 25,000 homes to customers in 40 years.
Customers book apartments with Dh5,000 first. Then after a month, they start paying in monthly instalments - 96 cheques to be precise. In 24-30 months, when they have paid just 24 to 30 per cent, they get possession of the property and move in and keep paying for the rest of the tenure till maturity.
"This way, a family can easily own a property without seeking bank finances. The investors and end-users gain possessions of the properties while having paid only 25-30 per cent of the property value and keep on paying on monthly instalments till maturity, while we as developers take risks."
"We entered the UAE three years ago and launched our first project two years ago - November 2006. Today Chapal World has a portfolio of Dh20 billion involving 8,832 units."
In three years time, the company graduated itself from a developer to a master-developer by involving itself in Jumeirah Lake Towers - a master-planned community in Ajman.
Chapal is currently diversifying its business activities by launching facilities management arm, an investment arm, a micro-financing arm and a construction company to consolidate the real estate business.
Chapal, who is celebrating 40 years of the company's establishment, said, the current market situation is temporary.
"We are all aware of the present market condition. It is suffering due to lack of enough liquidity. In a business cycle where there are plenty of ups and downs, we are at a difficult juncture of the economic cycle. The market is declining and it is yet to bottom out," he said.
Property prices in the UAE are declining as the speculators have left the market. As investor confidence is still low, business activities - buying and selling - have declined, putting downward pressure on property prices further.
"It is a challenging time for the industry and the overall economy as real estate and construction have been driving the UAE's economic growth. If these two sectors suffer, then the rest of the economy will also be affected," he said.
"We are victims of the global financial crisis. The US recession has hit the world badly and we are not immune to the crisis. In any business sector, a strong boom invites investors and speculators, who take advantage of the opportunities and also contribute to the growth by investing and fuelling the value of assets.
"While money and ownership of assets change hands, the property prices and values also appreciates - to a certain level when investment becomes unattractive. We have witnessed this for a while.
"However, I can see light at the end of the tunnel. This is a temporary phase. We are here to stay. Our commitment to the UAE is very solid. That's why we are going ahead with all our projects, without delaying."
From: gulfnews.com
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