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Dubai developers now openly acknowledge extent of real estate downturn

Property Wire
Dubai developers now openly acknowledge extent of real estate downturn - Property - Real Estate - UAE - Dubai - Markus Giebel

A new attitude of honesty is creeping into the Dubai property market as developers begin to open up publicly about the devastating effects of the real estate downturn.

Just six months ago large companies were continuing to talk up the property market and even talking about recovery in the first quarter of 2009. They would strenuously deny there were going to be job cuts, mergers or the need to cancel major projects.

Now they are responding more honestly to questions and admitting that they are facing severe problems in terms of selling current projects and funding future developments.

Leading the way is Dubai' second largest property developer Deyaar. Last month it admitted that it would put at least a quarter of projects on hold, now it has confirmed that it may have to consider merging with another company.

However, chief executive Markus Giebel said the company is not currently in any merger talks but it is a move that has been discussed and would happen 'if it makes sense to shareholders'.

Giebel also confirmed that it may be interested in securing funding from the recent government $10 billion bond issue designed to bail out the real estate industry. 'If the government opens up funds to companies like Deyaar then we would like to talk,' Giebel said. He added that he expects the first quarter of 2009 to be in profit and the company has sufficient cash to meet its commitments.


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