Mubadala reviews real estate plans

21 September 2010

Change in senior management leads to major re-assessment of announced projects

The real-estate unit of Mubadala Development Company is conducting a major review of its projects and how it delivers them following changes to the senior management.

Executive director John Thomas has left Mubadala Real Estate & Hospitality (MREH) and is no longer living in Abu Dhabi.

The change in senior management [at Mubadala] has also resulted in a review of the MGM development

He joined Mubadala in 2006 and was responsible for all domestic and international projects, together with the internal operations for the unit.

“Mubadala can confirm a transition in the leadership of MREH.  John Thomas, executive director of MREH, left Mubadala at the end of August to return to Canada to spend more time with his family and to pursue other business interests,” says a Mubadala spokesman.

Selected Mubadala real estate & hospitality projects
ProjectEstimated budgetStatus
MGM development$3bnOn hold
Football stadium$1bnTender
Sowwah Square$300mConstruction
Central Plaza$250mOn hold
Rosewood hotel$218mConstruction
Four Seasons Hotel$150mPrequalification
Viceroy Hotel$100mDesign
Al-Hilal Bank$100mDesign
Sources: MEED; Meed Projects

Thomas has been replaced by Peter Wilding, who is now the acting director for MREH, says Mubadala. Before joining Mubadala, he was deputy chief executive officer of Capitala, which was formed by Mubadala and Singapore’s Capitaland in 2008.

At Capitala, Wilding was responsible for the daily management of the $6bn Arzanah development near Zayed Grand Mosque on Abu Dhabi Island.

Thomas was also a director at John Buck International (JBI) and his departure has thrown JBI’s role on Mubadala schemes into doubt. According to sources close to both JBI and Mubadala, the company’s role on MREH projects is being reviewed, with the possibility of being removed from the schemes.

The Mubadala spokesman says, “There is a strategic relationship between Mubadala and The John Buck Company. Our 51 per cent ownership of our joint venture company, JBI, is one aspect of that partnership and we are committed to its continuing success in Abu Dhabi and the UAE.”

JBI was established in 2008 by Mubadala and The John Buck Company from the US to act as the development manager on MREH projects such as Sowwah Island, Sowwah Square, Zayed University, Sorbonne University, and the TwoFour54 Media Zone.

It is not the first time JBI’s operations have been reviewed. In January 2009, the company laid off staff after Abu Dhabi property prices began to fall at the end of 2008 (MEED 22:1:09).

In February this year, Mubadala confirmed that JBI’s role on the new football stadium at Abu Dhabi’s Capital District had ended.

The change in senior management has also resulted in a review of the MGM development that is planned for the Mina Zayed area of Abu Dhabi Island. According to sources close to the project, the scheme is now suspended pending a review by Wilding.

The project, which is being developed with US-based MGM Mirage Hospitality involves building a major entertainment complex along 3 kilometres of waterfront. It will include hotels with a total of 1,000 rooms, residential buildings with 500 apartments, a convention centre, a 10,000-seat indoor arena, a 3,000-seat amphitheatre and 25,000 square metres of shops.

In February, MGM received bids from contractors for the project’s enabling and marine works. Companies that participated in that tender say that the bids have now expired and the contract is on hold (MEED 12:2:10).

“The MGM project is still under way. We are assessing certain aspects of the design and further announcements will be made in due course,” says Mubadala.

The real-estate unit is moving ahead with other projects. It is close to awarding the contract to build its new football stadium in the Capital District, and in July it invited contractors to prequalify for the contract to build the Four Seasons hotel on Sowwah Island.

Mubadala’s other business units have also awarded several major contracts this year. The education unit awarded a contract to design and build the New York University main campus in April. In March, the healthcare unit awarded a $1.3bn contract to build Cleveland Clinic Abu Dhabi.

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