Dubai Developers Slow Down Project Development

In today’s financial climate even Dubai’s biggest developers are beginning to feel the effects of the dip in the property market. Whilst Dubai has previously been thought immune to the problems being experienced elsewhere around the world, the slowdown has now reached these shores. And now as a result we are seeing Dubai property developers react to the new situation, even Dubai real estate`s biggest developers Emaar and Nakheel. Rather than pretend the situation is not happening, both are now taking action, but rather than cancel projects completely, they have instead chosen a path of slowing down the rate of development and construction on projects. This scaling back of work should allow companies like Nakheel the opportunity to complete development on projects, but at a time when the financial environment is more conductive to real estate undertakings of this size.

Nakheel has said it has slowed development on long dated projects to align itself better to current market needs and the world’s current liquidity situation. So what projects are actually being affected by the current slow down? Well after the success of the land reclamation project that is the Palm Jumeirah, Nakheel has chosen its current other land reclamation projects as the development that we will have to wait a little longer to see finished. The Dubai Waterfront, The Palm Jebel Ali and the Palm Deira have all had work slowed, as has the prestigious Donald Trump Tower on the Palm Jumeirah. What the Donald has to say on the matter I don’t know, but the AED 2.9 billion project was certainly hotly anticipated! Nakheel has agreed to cover all contractual costs whilst the project officially remains on hold.

And this comes on the back of Nakheel announcing 500 job cuts recently, as it attempts to streamline its operations. So things may seem a little bleak at the moment, but there is good news with the information that the Dubai government will be working with Dubai’s developers to work out an understanding and formulate a plan of attack with regards to new property released onto the market. With most of Dubai properties being controlled by 3 main developers, the Dubai government is looking at controlling real estate supply and helping the markets stability both now and in the future. This should therefore give Dubai freehold property a boost in what are challenging times. 
 

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