Selling Building Materials by the Meter: A Financing Solution in Inflationary Times

According to SAMA, the shift in approach to financing construction projects has become a major concern for developers. Rahim Ghorbani, a construction industry developer and CEO of Abniehsazan Construction Company, in an interview with SAMA, announced his successful experience using the method of selling building units by the square meter and even by the centimeter, instead of selling complete units, and introduced it as a modern solution for attracting small-scale capital and accelerating project implementation.

Rising Costs and the Inefficiency of Traditional Methods

This construction industry activist, referring to the significant changes in construction costs in recent years, stated: Previously, project financing was mainly done through the pre-sale of units, but the several-fold increase in the final cost of construction has made this method practically inefficient. He emphasized: “The construction cost of each building has increased significantly compared to the past, and with the old pre-sale model, it is no longer possible to finance large projects.”

Fractional Sales: A Solution for Attracting Small-Scale Capital

Ghorbani, explaining the new model, described the sale of units by the square meter and even by the centimeter as an effective solution for the participation of investors with any level of capital, and added: In our projects, we have also experienced the sale of units by the centimeter, and this method has had a very positive impact on financing and advancing the work.

Referring to a practical example of this approach, he said: In a project in the Marzdaran area with 750 residential units, due to the large scale of the project and the difficulty in liquidating units, we used the method of selling by the square meter, which was well received by investors.

Guaranteed 25% Profit over an 18-Month Period

The CEO of Abniehsazan Company, explaining the advantage of this method for investors, clarified: Units sold by the square meter or centimeter are offered at a price 20 to 25 percent lower than the current market rate. This means that the investor will have at least a 25 percent guaranteed profit from the start over a time horizon of about 18 months (the project construction period). He added: In case of an increase in inflation and price growth during this period, there is also the possibility of earning more profit for the investor, which doubles the attractiveness of this method.

Expansion of Activities to Mazandaran Province

Rahim Ghorbani also announced the expansion of Abniehsazan Company’s activities to Mazandaran Province and said: We have two large projects underway in this province; one is a 1,500-unit project, whose construction operations have begun with the approval of the governorate, and the other is a 2,000-unit project in the city of Nowshahr, which is in the final stages of obtaining permits and will, God willing, be launched soon.

He also referred to a hotel project designed with 1,600 rooms in areas ranging from 50 to 300 square meters and added: This project was initially designed with 400 rooms, but after changes, its capacity was increased to 1,600 rooms, and its construction permit has been obtained.

Outlook for the New Method in Inflationary Conditions

In conclusion, this construction industry developer, emphasizing the effectiveness of the fractional sales method in the current economic conditions, expressed hope that by promoting this approach, an effective step can be taken to accelerate the construction process, reduce financing costs, and meet the growing need of the housing market.