Last Saturday, Dubai’s Emaar Properties announced it is expecting a huge merger to be completed within four months with three real-estate units of Dubai Holding, which is owned by the ruler of the Dubai, Sheikh Mohamed bin Rashid Al Maktoum, also the vice president of the United Arab Emirates. The merger will consolidate Dubai Properties, Sama Dubai, and leisure developer Tatweer who are all prominent players in a sector badly hit by the global financial crisis. Emaar, the largest listed Arab developer, of which 31.2 percent is owned by Dubai’s government and Dubai Holding hopes the merger get finalized by early 4th quarter of 2009.
Sheikh Mohamed’s Dubai Holding owns the world-famous Jumeirah group of hotels lining the highest-premium resort real estate/coastal area of Jumeirah Beach. By 2011, Jumeirah group (before the downturn) expected to operate or have under construction some 60 hotels and resorts worldwide with 65-75 percent of the growth markets in Asia. Dubai Holding subsidiaries also expected to open at least two additional hotels in Dubai in Healthcare City and Business Bay in 2008. However, things have markedly slowdown since the financial crisis.
تتطلع إعمار إلى الدمج الذي سيتطلب العناية الواجبة للكيانات ، وممارسة تقييم مفصلة ، واستكمال الوثائق القانونية ، والاتفاق مع السلطات التنظيمية فيما يتعلق بالهيكل والعملية ، وموافقة المساهمين. يتمتع سعادة محمد علي العبار ، العضو المؤسس ورئيس مجلس إدارة شركة إعمار العقارية ، وهو أيضًا عضو في المجلس التنفيذي في دبي ، الهيئة العليا لحكومة دبي ، بمهمة التآزر بين جميع مبادرات النمو في دبي.
Before the meltdown, Emaar Properties was growing at a phenomenal rate world over, with a plan for global expansion to 36 countries. This Dubai-based public joint stock company set up in 1997 and one of the world’s largest real estate/ property development companies in the Middle East, was listed on the Dubai Financial Market. It is part of the Dow Jones Arabia Titans Index. Emaar had assets in excess of $65 billion in investments, net profit of $1.8 billion and land bank of half a billion square meters worldwide. Emaar also partnered with Giorgio Armani SpA to create a worldwide collection of Armani luxury hotels and resorts. Armani inked the contract with Alabar in an agreement that included the opening of ten hotels and four vacation resorts within seven years in prestigious locations such as Dubai, Milan, London, New York, Paris, Shanghai and Tokyo. Since the recession, bolts loosened up on this deal.
اشتعلت أزمة الائتمان مع جميع التطورات المعلقة. بعد بضعة أشهر من بدء الشعور بالضيق في الولايات المتحدة وأوروبا ، واصلت إعمار المضي قدمًا. نظر ألابار إلى بقية دول آسيا والهند ، مدعيا أنهم تمكنوا من الصمود في وجه العاصفة لأنهم يديرون أصول إعمار مثل متجر صيني صغير ... "نحن لا نحب النقاط. قال بثقة: "نحن لا نحب أن ندفع الكثير من الأرباح لأننا لسنا جديدين في هذا المجال". ظلت إعمار تحلم وتأمل كثيرًا أثناء الانغماس في أطول برج في العالم في دبي - مركز السياحة والتجارة في الخليج الذي كان يتحدى أي ناطحة سحاب تصل إلى أكثر من 1.6 ميل.
But, as soon as Dubai started broadcasting it was recession-proof, the market began showing cracks. Not before long, Dubai resort and real estate markets proved no one was immune from the crash. Sooner than later, Dubai jumped in on the bandwagon like most of the rest of the world.
Nakheel, one of the world’s biggest and busiest property developers famous for the large colony of man-made islands in Dubai, showed signs it too was hurting. The world-famous Palm Islands have had its growth stunted by the economic meltdown. Nakheel’s portfolio including the Palm Trilogy, The Waterfront and The World, each boasting iconic and radical designs (respectively, the palm tree national sign, the striking peninsula and the cluster of 300 islands forming a world map – built on reclaimed land) began unprecedented sales decline. Though tough to do, Nakheel’s CEO admitted not making any sales in the last months and the firm’s first sukuk, worth around $3.6 billion would coming up for renewal in November 2009 – is in trouble. Unfortunately, huge funds mishandled during construction may have contributed to the end of construction. Earlier in April, reports said Nakheel was at the center of a crackdown on alleged corruption in the emirate of Dubai. Two people were arraigned on suspicion of bribery days before a high-profile sales team led by its CEO, headed to the USA to lure investors to Dubai’s $300 billion property boom.
واصلت أسعار العقارات في الإمارة المطلة على البحر بجزرها الشهيرة التي تأخذ شكل أشجار النخيل تراجعا منذ العام الماضي عندما أنهت الأزمة الاقتصادية العالمية وانخفاض أسعار النفط طفرة اقتصادية في منطقة الخليج.
The slowdown has led to project cancellations worth hundreds of billions of dollars. Dubai’s Tatweer project called Bawadi, a destination by itself saw the danger looming ahead. Tatweer, a company owned by Dubai Holding, was developing ‘en-masse’ its own hotel clusters with a total of 60,000 rooms in three clusters. Bawadi wanted its own 30,000 keys, to run the investments, own all business plans and do all feasibilities. They have also signed up with Emaar Properties that owns a piece of land with 5,000 rooms in Bawadi, said CEO Arif Mubarak who said they were to be the destination managers for the overall project which was to create the biggest Bawadi hub catering to 51 hotels on the emirate.
Yet, Bawadi, groomed to be Tatweer’s giant mammoth project, developing a quasi Las Vegas strip and the so-called Boulevard with a heavily-landscaped shopping street adapted for outdoor use throughout the year cracked under market pressure. Construction posed a major challenge. With building costs going up and workers laid-off in droves, the hotels were never delivered.
And so, the days of positive or wishful thinking are over as the bubble burst in Dubai. Emaar Properties, Nakheel, Damac, Tameer and Omniyat had been forced to trim their workforces. Dubailand developer Tatweer reviewed its recruitment policy in light of the economic situation. Perhaps today, the only saving grace could be a merger of the biggest developers still alive in the days of dead and dying deals in City of Gold.