Monday, January 19, 2009

Nakheel suspends work on landmark Dubai projects

PROJECT DELAYS: The Trump tower (pictured) is one of several projects Nakheel has put on hold. (Supplied)

Dubai-owned real estate developer Nakheel is delaying several of its flagship projects, including the Trump International Hotel and Tower, in addition to axing 500 jobs amid the global financial crisis, the company said late on Sunday.

"Nakheel is delaying long-dated infrastructure work on some of our projects in order to ensure that our business model is aligned to meet market demand," the company said in a statement.

"We have the responsibility to adjust our short term business plans to accommodate the current global environment."

Nakheel said the Frond N villas, Gateway Towers and the Trump tower on the Palm Jumeirah, one of three palm-shaped islands the developer is building off Dubai's coast, would all be delayed.

The company, part of state-owned conglomerate Dubai World, said much of its Waterfront project, a series of man-made islands set to be twice the size of Hong Kong, would also be pushed back.

Nakheel said work would continue on Madinat Al Arab, Venetto, Badra and the Canal District, but areas of the project, including construction of six man-made islands, would be put on hold.

The Universe, a series of man-made islands in the shape of the sun, the moon and the planets that wraps around Nakheel's The World project, has been delayed, the company said, with work restricted to preliminary engineering studies.

On the Palm Jebel Ali, the second largest of the three Palm islands, Nakheel said work on the fond villas and infrastructure for the crescent would continue, while other phases would be delayed.

It did not give details of how long any of its projects would be delayed for.

Nakheel said work on all other projects - which include The World man-made archipelago and Palm Deira, the largest of the Palm islands - would continue as planned.

Earlier on Sunday Nakheel said it had cut 15 percent of its workforce as it scales back projects due to the economic climate.

Nakheel is the latest in a long line of Dubai-based real estate developers to announce layoffs, which includes Damac Holding, Omniyat and Tameer Holding Investment.

Many other developers have relaxed payment plans in a bit to stimulate demand for real estate, which has slowed significantly due to the global financial crisis.

The crisis has hit demand from foreign investors, which make up a large percentage of buyers, while tightening liquidity has made home financing more difficult.

HSBC said in a report earlier this month property prices in Dubai fell four percent between September and October, with the price of villas tumbling 19 percent, the first time prices have fallen in the emirate.

Nakheel cuts 500 jobs
Dubai developer reduces workforce by 15% as it scales back projects amid global financial crisis.

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