As banks get to grips with the worsening economic environment and the rising cost of funding, many Gulf projects are struggling to secure bank support.
“We are looking at everything we have committed to,” says Sultan Ahmed bin Sulayem, chairman of Dubai World. “Anything we are committed to build, we will build. Anything we have financing for, we will build. Anything we thought we would build, we may delay. Nothing is cancelled in Dubai.”
Dubai World controls some of Dubai’s largest firms, including Nakheel, Limitless and DP World. It also has extensive real estate investments in the US and Europe.
Nakheel itself recently put some dredging work on its Palm Deira project on hold to focus on the islands nearest the shore, which could be developed and sold more quickly (MEED 24:10:08).
Sulayem says that Dubai World has dealt with all of its short-term funding liabilities and may buy undervalued assets overseas. “We are intelligently managing our finances and asking ourselves whether should we build a new project or buy an asset that is depressed,” he says.
The real estate market in Dubai is softening, he says, adding that villa sales in Nakheel’s Forbidden City are at near 30 a day, down from a previous typical figure of 100.