$1.5 billion government deal signed by Abu Dhabi's Sorouh

Abu-Dhabi-Sorouh-Real-EstateA 5.4 billion dirham ($1.47 billion) contract was recently signed by Abu Dhabi's Sorouh Real Estate with the Abu Dhabi government with the aim of developing a community aimed at Emirati families.

The emirate's Urban Planning Council will fund the deal, which provides a new public-funding mechanism to Abu Dhabi's second-largest developer. It also adds to its portfolio of projects in the capital, which is suffering from the effects of the financial crisis.

Khaled al-Rajhi, Sorouh's procurement director said on the sidelines of a property conference, "It's a new way for Sorouh to fund their projects."

The global financial crisis which put an end to a six-year construction boom has put very adverse effects on developers across the United Arab Emirates. The most suffering was bored by Dubai, while Abu Dhabi, home to most of the country's oil, has fared better.

There has been commencement of the first phase of construction on the project, dubbed Watani.

Richard Amos said, "We expect to hand over a good portion of 950 units in Q3 and Q4."

Amos was talking about the company's Sun and Sky Towers project in Abu Dhabi.

He added that in the beginning of July, Sorouh will hand over another 400 apartments from its Tala Tower project.

Amos specified that a recovery in the Abu Dhabi property market is being affected by the liquidity and high mortgage rates.