offshore project development
4 Villa, island of Germany 5 Construction on island of Germany
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GETTING OFF THE GROUND
So why is Kleindienst Group’s project moving forward while other developments on The World have faltered? One reason is that the company has funds available – 30 percent of the capital for the US$820 million project is self-funded. He explains: “We have a company, Kleindienst Capital, which
funds our projects worldwide. At the moment it is very dif- ficult to raise money for our developments – it’s also very expensive – so we have decided to use our own funds. From 2012 onwards, when the financial industry is in better shape, we will get funding from institutional investors.” So far 12 of the 20 villas on Germany island have been sold,
but Kleindienst states that there will be no further sales until the first villa is built. He adds: “We want to increase the price. We can do this if people can see the first villa and appreciate the space and the location.” The developer is aiming to sell the varying-sized villas for around US$1.81 million to US$6 million. Although the financial crisis has brought difficulties for the
project and the company, Kleindienst adds that a key benefit of the downturn is the drop in the cost of construction and the availability of top construction companies. “Before the crisis, the biggest construction companies like Arabtec would not have built 20 villas offshore. But now a developer like us can choose the best construction companies, even on smaller projects.
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When we started discussions with contractors before the downturn, most were not prepared to only build one island, so our options were limited. But now we can get the quality we need – it’s a totally different situation for us due to the crisis
“We can also tender phase by phase. When we started discussions with contractors before the downturn,
most were not prepared to only build one island, so our options were limited. But now we can get the quality we need – it’s a totally different situation for us due to the crisis.” Kleindienst Group was also set on using the best contractor to prepare the islands for construction, as
he explains: “If the building surface is not right then you will have big problems so you really have to take time to find the right company, the right equipment and the right processes.” The contract for the foundation work was awarded to specialist engineering company Foundation
Construction Group Limited (FCG). Groundwork began with soil testing followed by an engineering process to improve the island’s in situ sand, prevent subsidence and ensure future stability. This involves vibro- compaction and surface compaction. At the time of Cityscape’s visit in mid-May, the island of Germany was undergoing the final day of vibro- compaction. As we stood on the island, two huge electric depth vibrators, supported by a crane, were spraying jets of water over the sand. Works manager John Osborne describes the process of vibro-com- paction as a “mini earthquake”. The first ‘model’ villa on Germany is scheduled for completion
by October 2010. Kleindienst adds: “The model villa is a good exercise for the constructor before taking on the other 19 units. When it is completed, a few of the customers will sit with the architect and discuss the final layout and interior materials for their villas. If we can stick to our programme then the villas will be handed over in 2011.” Kleindienst admits that the desired USP is to be the first development on The World. “We wanted to be the first – that’s why we started now.”
RISING TO THE CHALLENGE
Needless to say, the process of building offshore is a consid- erable obstacle for developers. Osborne comments: “Access is a big challenge for all the developers on The World islands. For instance, we had to use a barge to bring in a 140-tonne crane.” Kleindienst adds: “Transportation is an issue but there are solutions. There are many cities all over the world built next to water – such as Stockholm – which have transportation systems. Yet it takes time to build up the offshore infrastructure.” But Kleindienst was well aware of the issues before purchasing
the islands, as he explains: “We expected it to be a challenge. Every week we face a situation that even an experienced contractor has not encountered before. The nature of this project is that you face
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/jun-sep 2010
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