GCC firms launch $100bn projects

Gulf Daily News: GCC property firms launched $100 billion of new projects yesterday, but the news failed to restore investor confidence as fears grew that the global credit crunch is biting and the local real estate market overheating.

From a 350bn UAE dirhams ($95bn) beachfront project to a kilometre-high tower, developers at Dubai's annual Cityscape exhibition launched the usual raft of mega-developments that have propelled the GCC commercial hub to international fame.

The Dubai government has launched the 350bn dirham project to develop a huge swath of land near the coast.

Meraas Development aims to build apartments, shopping malls and offices in some of Dubai's older districts over the next 12 years, chief executive officer Sina Al Kazim said.

Kazim said Dubai was not immune from the problems sweeping global financial markets but said he was confident that the development, called Jumeirah Gardens, would proceed.

Dubai mortgage lender Tamweel said it would launch up to 2bn dirhams of Islamic bonds next year despite the global liquidity squeeze and Abu Dhabi's Sorouh Real Estate said all its projects were on target. But investors in the UAE shrugged off the upbeat news to extend weeks of declines.

And Kuwait's Abyaar Real Estate postponed the sale of its $1bn Islamic bond due to the global credit crunch.

"The UAE is not an isolated link from the chain, from the global financial system," said Sorouh CEO Mounir Haidar.

"However the UAE does enjoy slightly different dynamics. The UAE is an emerging economy and demand is strong. Economic policy is encouraging for people to invest in the region."

Tamweel and fellow Dubai-based mortgage lender Amlak Finance said on Saturday they were in talks to agree a $2.4bn merger. A report by Zawya Dow Jones suggested that Union Properties and Deyaar, which said yesterday that the liquidity crunch could slow its international growth, were also considering a merger.

Meanwhile, Dar Al Arkan, the largest Saudi developer by market value, said it expected the kingdom to buck any Gulf downward trend as economic fundamentals remained strong and demand for property was still surging.

The property unit of Dubai-based family-owned business Al Futtaim Group said it was adopting a cautious approach in its expansion because the GCC region could be affected by a global downturn.

Emad Nimeh, a development director at Al Futtaim Group Real Estate said it was unclear how the local markets would be impacted, but would evaluate things on a project by project basis.