Award of the main contract for Dubai Union Oasis, the emirate’s first transit-oriented development (TOD) scheme, will be delayed until 2018.
According to a source familiar with the transaction, ASGC, the selected developer, is proposing some minor revisions including potentially taking out the hotel component from the original plan.
“The final plan could potentially include only residential and retail units,” the source tells MEED.
MEED understands the revision is required to reflect more closely the economic conditions and requirements of the residents around the area where the property will be located.
Union Oasis is to be constructed on the land above the underground stations where Dubai Metro’s Red and Green lines meet. It is part of a wider plan to regenerate the Deira area, which lies at the heart of old Dubai as well as encourage more people to use public transport.
The concession period for the project could also be extended from 35 to 50 years.
The source also tells MEED banks have been keen in providing project financing. "We don't foresee any problems whatsoever in terms of obtaining funding from banks," the source says.
The project is estimated to cost between AED800m ($217m) and AED900m.
During the prequalification process in 2016, the client, Dubai’s Roads and Transport Authority (RTA) integrated a minimum revenue guarantee to the financial structure of the project to relieve the selected developer of the burden of paying a fixed base payment against investing in the project and make it more attractive to investors and developers.
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