Developer cites change in investor demands as reason for the retreat
(DUBAI) A newly created Dubai developer that unveiled a US$95 billion real estate project just two months ago is reviewing its plans in the light of the economic downturn.
Project unveiling: The model of Jumeira Gardens on display at the Cityscape 2008 property expo in Dubai in October where Meraas Development announced the US$95 billion projectThe retreat comes as a widely watched report showed property prices in the fast-growing Gulf city- state slowed considerably in the three months to September, ahead of an expected decline later this year.
In reassessing its development plans, Meraas Development said on Wednesday that it has 'seen that investor demands have changed' and that it must 'quickly respond to meet these market needs'.
The developer, launched by the government of Dubai in late September, said it is re-examining its business strategy and the rollout of its flagship Jumeira Gardens project slated for a central part of the city.
'In a worldwide economic downturn, any corporate must analyse the market and ensure its business strategy is aligned to make the most of new opportunities, as well as ensure risk-management strategies take account of the new financial landscape with a focus on new market and investor demands,' the company said.
Meraas announced the 350 billion dirham (S$124.7 billion) Jumeira Gardens at a property expo in October.
The company said at the time that work had already begun on the development, which was advertised as a 'city within a city' that would include one of the world's tallest buildings and take 12 years to complete.
Meraas said it expects to have more details on the project by the beginning of 2009.
The developer is a division of Meraas Holding, whose private equity division, Meraas Capital LLC, joined real estate investment trust Boston Properties Inc and other investors in acquiring the General Motors Building in New York City for about US$2.8 billion in June.
Separately on Wednesday, real estate consultancy Colliers International said its index of Dubai home prices grew 5 per cent year on year from July to September - down from 43 per cent in the first quarter and 16 per cent in the second quarter.
Ian Albert, regional director for consultancy services at Colliers, said he expects the next round of figures would show a decline in the last three months of the year in large part because of the liquidity squeeze caused by the global financial crisis.
'It is clear to us that the landscape has changed since the end of September,' Mr Albert said.
Last month, an HSBC Holdings plc report found home prices on Dubai's secondary market fell month to month for the first time since the emirate began allowing foreigners to buy property in 2002. -- AP
That would be a sensible thing to do at the moment. The US government is not willing to give its 3 major auto companies 15 billion USD and here the matter is 6 times the money. I would keep it in my pocket.
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