The Work on the Private Projects at The World will Begin Soon

Soon the construction will start on the various off-shore island developments in The World and it has been confirmed by the well known property developer Nakheel. Last month it was announced by the Kliendienst Group that they will begin the construction on the Germany Island which is the Heart of Europe development and is a part of the Dh.3.1bn. The confirmation regarding the beginning of the work after a European developer, Major Trade, announced the starting of work on its island project.

Marwan Al Qamzi, The managing Director of Nakheel said, “The World is an attractive project, given its differentiated offering and close proximity and accessibility to developing markets.” The Canadian Gulf Construction and the Arabian Profile Company Limited which is the Arabian architectural and cladding specialist have carried out their construction work on the development.

Viktor Herceg, the Managing Director of Major Trade shared a feeling of confidence by saying that after the project gets completed a huge demand for luxury residences will come up. He further added that Nakheel has been very supportive for its first island development. The island is located on the tip of the Greenland area of The World. It includes a luxury boutique hotel and modern residential villa developments. For a mid-sized European residential property developer, Major Trade is a property development investment arm and is particularly responsible for the construction of various high end Dubai real estate developments.

Nakheel confirmed that this year work will begin on as many 20 islands. Taking the economy into consideration the buyers have revised few of their initial designs and these are now moving ahead with their construction works.

Dubai World Episode Gives Boost to Investor’s Confidence

According to investment bankers at Shuaa Capital, the confidence in the air has built up amongst the investors around the Gulf region. They optimistically predict the region’s economic condition would take its stride towards the rising end in the next six months. One of the leading investment bank in UAE, Shauaa Capital submitted its December GCC investor sentiment report which reflected the fall in investors confidence due the reconstruction of the debt on 25^th Nov’09 by Dubai World. But, positivity has returned after reimbursement of $4.1 billion by Sukuk by Nakheel, PJSC. It is observed, since then there has been a turn around in the market sentiment since the debt announcement of Dubai World was made in November.

Dubai World and its creditors have met to reconstruct the maturing liabilities worth $22 billion, where the final plan would be submitted, in early January, to the lender. There was a speculation over Government’s support to help the distressed firms. Shuaa Capital conducted couple of surveys. One was before Nakheel Sukuk’s repayment and one was after the dues were settled. The Shuaa report revealed progress in GCC economic conditions over the next 6 months after Nakheel’s repayment. The polls show more investors are expected to invest in GCC market and BRIC in the next six months. It is estimated the regional stock market would generate gains in the coming 6 months, where the biggest rise is expected in Abu Dhabi which was projected by 35.5% of investors, 12.9% for Dubai and 13.1% for Nasdaq Dubai.

Dubai Developer Nakheel Bailed Out by Abu Dhabi

The struggling Dubai based developer Nakheel, property arm of Dubai World and the back behind master projects like Palm Jumeirah, The World, Jumeirah Islands, Discovery Gardens etc.; has been bailed out finally by Abu Dhabi by enabling it to pay off a $4.1 billion sukuk bond.

The Chairman of the Dubai Supreme Fiscal Committee, Sheikh Ahmad Bin Saeed Al Maktoum, said, “The Government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World.”

He further added, “As a first action for the new fund, the Government of Dubai has authorized $4.1 billion to be used to pay the sukuk obligations that are due today.  The remaining funds would also provide for interest expenses and company working capital through April 30, 2010 - conditioned on the company being successful in negotiating a standstill as previously announced. In addition, the Government of Dubai is particularly focused on addressing the concerns of Dubai World trade creditors within the Emirate of Dubai.  To help address these concerns, today the Government of Dubai is announcing that the remainder of the funds provided will be used for the satisfaction of obligations to existing trade creditors and contractors. Discussions with affected contractors will begin in short order.”

The total debt of the Dubai government and its state-run companies is a minimum of $80 billion and some experts believe it could run into $100 billion plus. Today’s cash is not the first bail out from neighbouring Abu Dhabi. Two Abu Dhabi controlled banks subscribed last month to a $5 billion bonds package issued by the government of Dubai and the UAE central bank provided a $10 billion bond in February earmarked to help Dubai sort its debt problems.

Dubai Strives to Fulfill its Commitments

A senior official of Dubai Government declared that the Government of Dubai is capable of honoring and meeting its commitments internally as well as externally.

The Director-General of Dubai Finance Department, Abdul Rahman A Saleh expressed the restructuring of Dubai World as a natural phenomenon which can occur in many countries and companies.

Al Saleh also said: “Articles of association of Dubai World stipulate that the emirate’s government shall not guarantee its debts,” he said, noting that a distinction should be made between the Government of Dubai and the group which is made up of several companies – including Nakheel and Limitless World – operating in various sectors.

“The media has blown the issue of restructuring part of the group’s debts including the delay of repaying Nakheel’s debts out of proportion,” he said, affirming that restructuring of companies is a frequent practice worldwide.

“The aim of restructuring is to allow the group to steam ahead with a new shape and keep abreast of changes.”

Al Saleh when asked to comment on the putting off ventures undertaken by the group, he said: “It is better and wise to delay projects that have not been executed yet.” He did not rule out selling of some assets in Dubai or abroad, saying: “Selling of some assets is a natural act in order to bolster the financial situation of the group in such circumstances.”

He added Dubai World is active in many sectors but it was only the real estate sector that was impacted by the international financial crisis.

“Dubai World was to meet its main creditors to discuss its request to delay repayment of $26 billion (Dh95bn) debt,” bankers told.

The bankers, who declined to be identified as the talks are private, said the meeting would take place in the afternoon without being more specific. A Dubai World spokesman declined to comment.

Palm Jumeirah Crosses 70% Construction

According to Nakheel, the developer behind Palm Jumeirah, 70% of its construction has been finished. A senior official said that the master plan is also being visited.

Marwan Al Qamzi, Group Managing Director of Nakheel Development Projects told, "We have finished construction on nearly 70 per cent of Palm Jumeirah. On our part, we sold a couple of fronds on the project but they still have not been built. It is part of the plan to keep them until we come up with some unique designs compared to what you have seen so far. You cannot freeze the master planning. You have to update it as you go. You have to update to meet market demands and customers requirements.”

The Kingdom of Sheba and Ottoman Palace are the inclusions of this waterfront project. Ottoman Palace is almost complete according to Qamzi. He added, “Both will finish by early April to June next year. The Kempinski Hotel is 85 per cent complete.” Work of Marina Residence started in March 2007 after Shimizu Corporation was awarded the contract in 2006 to construct superstructures, basement, architectural works, landscaping of the project and interior finishing.

Regarding rampant payment issues in the market, Qamzi said the developer was addressing the situation. "We are in discussions with all contractors about delays in payment since there are areas where we need to sit and discuss," he said. The Marina Residences did not benefit from the fall in prices of building materials. "With the change in prices, we have negotiated prices on projects that were led at the peak and at the beginning of the phases. However, this was not possible with the contractor at the finishing stages on the Marina project," said Qamzi.

"This is the last one under construction for the time being from our end," he said.
The final touches on the West side of the project are still going on. "Meanwhile, the East side near the Anchor Marina, which comprises a green area with a clubhouse, will be finished in two months," said Qamzi.The Anchor Marina is expected to berth more than 700 vessels, according to an earlier statement from the company. "The residents of Palm Jumeirah will be accorded priority in berthing," said Qamzi.

The developer confidently remarked that Palm Jumeirah project will witness the island emerging as one of the pioneers in resorts in the coming five to six years.

Marina Residences Units Handover Instigated

The handing over of homes at Marina Residences, Palm Jumeirah, has been instigated by Master developer Nakheel. The first residents are expected to slither in by the end of November according to a top company executive.

"We have started handing over the building and already sent notices to 140 customers. We are expecting the first customer to move in by end of the month," told Marwan Al Qamzi, Group Managing Director of Nakheel Development Projects. He added, “We are also gathering all service providers under one roof so that the tenant does not have to go to many places and almost all the units have been sold".

Qamsi also reported that the handover of 980 units at Marina Residences which is at the tip of the island’s trunk will continue by early next year and the development will observe the moving in of 2000 residents on the Palm Jumeirah. "Our focus is on delivering quality communities and the handover of Marina Residences marks another major milestone on Palm Jumeirah.Going in to the New Year we are pleased to welcome more families into this growing community."

The development figures in six residential towers having 980 units in all out of which 940 are a blend of penthouses and apartments. The most luxurious penthouses offer more than 14000 sqare feet of living space which are designed over four floors. Palm Jumeirah is now an abode to more than 12000 residents. Around 40 townhouses are positioned along the marina faced promenade.