The Dubai debt saga has shaken global investors since the emirate’s shock Nov. 25 announcement that it sought a standstill on Dubai World debt as it restructured the sprawling state firm, which builds and operates everything from ports to luxury flats.

Nakheel, the developer at the centre of Dubai’s debt crisis, added to already battered sentiment on Wednesday after its financial statements showed liabilities jumping 7 percent in the first half to a loss of more than $3.6 billion.

While the Dubai government has tried to ring-fence profitable firms from the $26 billion restructuring at Nakheel’s parent, Dubai World, its debt woes have led to credit downgrades for all government-linked firms amid investor fears that state aid would not be forthcoming in times of trouble.

Ratings agencies said such downgrades could lead to an accelerated payment clause for the $2 billion debt of Dubai’s power and water provider, though a DEWA official dismissed the report as speculation. Adding to confusion among investors, Dubai’s finance chief said on Tuesday the Gulf business hub would need more than six months to restructure Dubai World. A banker close to discussions between Dubai World and its creditors said the firm had yet to show them a proposal.

Underscoring the grim mood, a group representing a potentially blocking minority of holders in Nakheel’s bond has written to Dubai World rejecting a standstill, a source familiar with the matter said on Tuesday. “Investors, especially foreign institutions, want a strong statement from Dubai officials that they’ve found a clear way to help these companies,” said Samer al-Jaouni, General Manager of Middle East Financial Brokerage Co.

“There’s no reason to buy back into the market without having a clear picture on what’s going on. Confidence has been lost.” Dubai’s stock index tumbled to a 32-week low falling 5.9 percent at 0640 GMT with construction and real estate companies all down by the daily limit.

Asia-focused bank Standard Chartered, which is one of Dubai World’s creditors, said any losses it suffers in Dubai were unlikely to be material. Its shares have fallen 12 percent since Dubais’s announcement. Nakheel’s Islamic bond maturing on Dec. 14 fell 3 points to 47 cents on the dollar on Wednesday, compared with 110 just before Dubai World’s announcement.

“This does not really enhance Nakheel’s ability to meet near-term obligations,” said Roy Cherry, vice president research, real estate and construction at Shuaa Capital.

Source: Daily Times

State-owned Nakheel, developer of Dubai’s palm-tree shaped islands, is considering a dual stock listing in London and Dubai to raise as much as $15 billion to bolster its finances.

If listed, Nakheel could become one of the biggest publicly traded companies in the Gulf rivalling Dubai’s Emaar Properties, which is currently the biggest listed developer in the Arab world.

The government-controlled developer, one of the biggest employers in the booming Gulf emirate, also said it would be scaling back work on some of its projects.

“Approximately 15 percent of the total workforce, which amounts to 500 employees, was made redundant,” it said in a statement, describing the move as “a responsible action in light of the current global market conditions.”

It is the largest job cut to be announced in the wake of the global financial crisis in the oil-rich United Arab Emirates and in Dubai, a city of opulent hotels and shopping malls which hosts hundreds of thousands of foreign residents.

“We have the responsibility to adjust our short term business plans to accommodate the current global environment,” said an unnamed spokesperson quoted in the statement.

“The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand,” the spokesperson added.

Nakheel is in charge of developing several iconic projects in Dubai, including three palm-shaped man-made islands, only one of which is completed, and a cluster of islands in the shape of a map of the world.

It also announced last month a jaw-dropping plan to build a one-kilometre-high (3,280 feet) tower which would overshadow the still unfinished Burj Dubai, already the tallest on earth.

Nakheel also develops residential and commercial property, whose sales thrived after the sector was opened to foreign investors few years ago.

Dubai top officials insist that the emirate’s real estate sector — a major engine of economic growth in recent years — will weather the global crisis, but investors appear to have lost confidence in the market which was until recently a great magnet for investments.

Source: AFP

Just days after the high profile arrival of the QE2 at its new home in Dubai, new owner Nakheel says it is scaling back work on some of its projects and that it has adjusted it staffing requirements accordingly to accommodate the current easing market conditions.

Approximately 15 per cent of the total workforce, some 500 employees, are being made redundant, said a Nakheel spokesperson, who described the decision as a responsible action in light of the current global market conditions.

“We have the responsibility to adjust our short term business plans to accommodate the current global environment. The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand,” added the spokesperson.

All the affected employees were provided a redundancy package, which includes outplacement support services to assist in this time of transition.

Nakheel’s projects are estimated to be worth $80 billion. Upon completion Nakheel’s waterfront projects will have added more than 1,000km of shoreline to Dubai’s coastline.

Nakheel’s Dubai portfolio includes Nakheel Harbour & Tower, Palm Jumeirah, Palm Jebel Ali, Palm Deira, The World, Waterfront, The Universe, Jumeirah Islands, Jumeirah Village, Jumeirah Park, Jumeirah Heights, The Gardens, Discovery Gardens, Ibn Battuta Mall, Al Furjan, International City, and Dragon Mart.

Source: CPI Financial

The QE2, which sailed on its last voyage from its former home port of Southampton in England, was greeted by a large flotilla of private craft including the giant yacht My Dubai, owned by the emirate’s ruler Sheikh Mohammad bin Rashed al-Maktoum.

The British-flagged QE2 will now be completely refurbished and turned into a five-star hotel to be moored at the Palm Jumeirah complex, the world’s largest man-made palm-shaped island off the coast of Dubai.

UAE coast guards and the Royal Navy frigate HMS Lancaster were among those escorting the liner into Mina Rashed port.

A fire boat hosed water skywards to salute her, and an Emirates superjumbo A380 made a low flypast.

Hundreds of passengers who travelled on the final voyage stood on the deck of the 70,000-tonne QE2, cheering and waving British flags.

“This is a magnificent tourist attraction,” said Johann Schumacher, the managing director of Palm Jumeirah, adding that the refit is expected to take up to three years.

The liner will eventually be tugged to a special pier on Palm Jumeirah, about 20 kilometres (12 miles) from Mina Rashed.

US cruise operator Cunard sold the QE2 for about 50 million pounds (67 million euros, 99 million dollars) in November last year to Istithmar, the investment arm of state-owned company Dubai World.

On Thursday, the ceremonial flag changing will take place, and Cunard will officaly hand over the ownership of QE2 to Nakheel, a branch of Dubai World.

Before leaving Southampton on November 11, the QE2 took part in commemorations marking the 90th anniversary of the end of World War I.

The Duke of Edinburgh, Prince Philip, joined invited guests and crew on board to observe a two-minute silence to mark the Armistice anniversary.

Thousands of spectators gathered on the shore to send the vessel on its way against a backdrop of fireworks after a day of goodbyes marred only when she ran aground on a sandbank before being freed about 40 minutes later.

Launched by her namesake in September 1967, the QE2 was Cunard’s longest-serving ship. The 963-feet- (294-metre) long ship can carry up to 1,778 passengers and more than 1,000 crew.

She has travelled 5.5 million nautical miles — the equivalent of to the moon and back 13 times — and has undertaken 25 world cruises, crossed the Atlantic more than 800 times and carried more than two million passengers.

Source: AFP

“I never expected [prices on the Palm Jebel Ali] would have come back so quickly and by so much,” said Jeroen Van Der Geer, partner at AA Properties in Dubai. “We are back to a level of one and a half to two years ago.”

The global financial crisis has hit demand from foreign investors, which make up a large percentage of property buyers in Dubai, while tightening liquidity has made home financing more difficult, agents said.

Local mortgage providers have slashed home financing from 90 percent to as little as 60 percent in recent weeks.

The price of five and six bedroom signature villas, the most expensive properties on Palm Jebel Ali, have dropped from around 16 million dirhams ($4.35 million) to 9 million dirhams since the beginning of September, according to figures from AA Properties.

But that still represents a premium of between 70 percent to 80 percent on the original launch prices.

A four-bed garden home has fallen from around 7.4 million dirhams to 4.1 million dirhams, according to the figures, with the premium dropping from around 160 percent to 45 percent.

The figures show a three-bed water home, the cheaper of the Palm Jebel Ali properties, is now selling for around 3.8 million dirhams, when at the beginning of September it was selling for 6.2 million dirhams, with the premium falling from about 210 percent to 90 percent.

Jodie Smith, managing director of Elysian Real Estate, said garden homes were currently selling at around 4.5 million dirhams, compared to 8.6 million at the beginning of September, while water homes had come down to around 4 million dirhams from 6.5 million dirhams.

David Rowland, sales consultant at Dubai’s Smith & Ken Real Estate, said he had seen premiums on signature villas drop from 200-210 percent in July/August to 75-80 percent currently.

Rowland said he had also seen garden homes selling at a 35-40 percent premium, compared to 130-160 percent in July/August.

He described the drop as “quite alarming”.

Rowland said sales had not completely dried up on the Palm Jebel Ali, but investors were having to accept premiums of around 35-40 percent to make a sale.

Rowland said premiums could go as low as 20 percent before property prices rebound.

“I think we will see a rebound. Palm Jebel Ali may go down to as low as 20 percent [premium]. When it does we will see people start to come back to the market, maybe in December,” he said.

Van Der Geer said he expected demand for properties on Palm Jebel Ali return before Christmas as global financial markets stabilise and investor confidence begins to return.

“It is a good opportunity for investors now and I believe the [long-term] picture is good. Prices will go back up,” he said.

Smith said she had already seen sales pick up this week, with investors taking advantage of bargain prices to snap up properties that just a few months ago were out of their price range.

Nakheel said in a statement that it welcomed “all proposals and discussions by all industry-related partners aimed at maintaining a healthy market movement under the current circumstances”.

“Nakheel realises that it does not work in isolation and has a great number of partners and third parties whose interests are intertwined with its own. This approach is a very responsible approach in line with current global economic conditions,” the developer said.

Source: Arabian Business

High-tech trains arrived from Japan this weekend from leading railway system manufacturer Hitachi Ltd,

Testing begins at Palm Jumeirah as new trains arrive from Japan - Passenger journeys to begin in April 2009

Robert Lee, Nakheel Managing Director, Investment Projects, said:

“It’s great to see the Palm Monorail trains well and truly on track. Having the first monorail in the Middle East here in the Palm Jumeirah is indicative of Nakheel’s vision, leadership and ambition as a developer. It will ensure we continue to play a critical role in Dubai’s growth as a global centre for tourism, and marks our commitment to creating sustainable transport systems, hand-in-hand with our partners at the RTA.”

Tests on the trains will be carried out for the next six months before the monorail is opened to the public in April next year. The new system will carry thousands of passengers each day between Gateway Station at the trunk of Palm Jumeirah and the Atlantis’ Aquaventure Station on the crescent, calling at Trump International Hotel & Tower and the luxury retail centre Palm Mall en route. The system will ultimately connect to the Dubai Metro following the introduction of RTA’s Al Sufouh tramline, with direct links to Dubai Airport and other major transport hubs.

The Palm Monorail is being developed by a consortium of leading international companies led by the Marubeni Corporation. The system is fully automatic and driverless, although an attendant will be on board at all times. The monorail will initially carry up to 2,400 passengers per hour per direction in four separate trains, each made up of three cars. At full capacity, the figure will rise to a maximum of 6,000 people in nine vehicles.

Source: Zawya

The announcement came one day after Dubai developers Nakheel said it planned to build a tower which will stand more than one kilometre tall (3,280 feet), beating the city’s own world record.

The mixed-use Jumeirah Gardens development will be “an integrated city within a city,” to be built over 12 years, Meraas Development said at the opening of Cityscape Dubai 2008, a four-day international real estate fair.

Dubai, part of the oil-rich United Arab Emirates, already boasts the world’s tallest building, the yet to be completed Burj Dubai tower, which reached a height of 688 metres (2,257 feet) at the start of September and is still growing, according to developers Emaar.

It now boasts 160 storeys, the highest skyscraper in the world, Emaar said.

Jumeirah Gardens will stretch north of Sheikh Zayed Road, Dubai’s main thoroughfare linking it to the oil-rich emirate and UAE capital of Abu Dhabi, 150 kilometres (95 miles) to the south.

Meraas Development said the project will comprise business, residential and leisure facilities linked by a transportation network and including some of the city’s biggest towers, and with a large canal running through the development.

Construction of the first phase of the project has already begun, and the first buildings are due for handover in the fourth quarter of 2011, the company said.

The announcement came at the opening of the Cityscape exhibition, an annual feature on the property calendar of Dubai, a regional business and tourism hub which is in the midst of a construction frenzy and aims to rival financial centres like London and New York.

Some 1,500 firms from 150 countries are taking part in the event.

Nakheel CEO Chris O’Donnell told reporters on the sidelines of Cityscape that the skyscraper project announced on Sunday “will be over one kilometre and take 10 years to build.”

The tower, part of the Nakheel Harbour and Tower project, is expected to cost 140 billion dirhams (38 billion dollars), O’Donnell said.

But Dubai has not been spared the turmoil on world markets.

Dubai Financial Market dropped 7.6 percent on Monday to its lowest level in more than 18 months. The market has lost around 14 percent in the past two days, pulled down by the real estate sector.

O’Donnell said Nakheel’s new project is likely to have a psychological effect on the real estate market but denied this was the reason behind the public launch.

“We’ve been working on the project for six years,” he said, adding that work on the foundations is already under way.

“The project is going to go through two or three economic cycles… when you’re running a business you can’t just stop at the middle of the downturn,” O’Donnell said.

“We believe in what we’re doing, (even though) it is an unfortunate time.”

Nakheel is behind some of Dubai’s most grandiose projects. It is building three palm tree-shaped artificial islands, as well as “The World” — a cluster of some 300 islands looking like a blurred vision of the planet’s nations — off Dubai’s coast.

Scores of other ambitious ventures are under way or in the pipeline, including Dubailand, a series of billion-dollars entertainment and leisure projects touted as the Middle East’s very own Orlando.

Source: AFP