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Emaar chairman bullish on Dubai |
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11.21.2009 |
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The chairman of Emaar Properties has delivered the most upbeat assessment of the economy to date with the claim that Dubai’s population has grown by 400,000 this year.
Mohammed Alabbar, who is also a member of Dubai’s Executive Council, said the emirate’s economy would expand by 5 per cent in 2009 in a speech to the World Economic Forum Summit on the Global Agenda in Dubai yesterday.
“We are confident of the stability of the city and the growth the city was built on mainly because we are the hub for over 300 million people,” he said.
His remarks contrast sharply with most local economists and the International Monetary Fund, who expect the UAE economy to shrink. Recent estimates from other government officials have also been more bearish.
The Central Bank Governor said yesterday that the economy would grow next year, but only modestly. Sultan bin Nasser Al Suwaidi said growth would be a “low, single-digit figure”, on the sidelines of a banking conference in Germany, Zawya Dow Jones reported.
Mr Alabbar, whose state-controlled company is the largest developer in the Emirates, said Dubai’s population had increased by 400,000 in the past year, with June and July posting the best statistics.
But Swiss bank UBS said the Dubai population could decline by 8 per cent this year and a further 2 per cent next year, in a report released this week.
Rapid expansion in Dubai’s burgeoning property and financial sectors catapulted the emirate to unprecedented levels of growth in the six years prior to the crisis.
That came to an abrupt halt at the end of last year as property prices collapsed and banks became weighed down by heavy property-related losses, leading to project delays and mounting job losses.
Mr Alabbar criticised the media yesterday for “crossing the line” in its coverage of Dubai during the financial crisis.
His comments echoed a recent speech to investors by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, in which he stressed the strength of Dubai’s links with Abu Dhabi.
He said a reshuffling of the board of the Investment Corporation of Dubai was part of a “normal business restructuring”.
Sheikh Mohammed issued a decree this month re-arranging the board of the investment arm of the Dubai Government, which will be chaired by Sheikh Mohammed, with Sheikh Hamdan Bin Mohammed Bin Rashid, Crown Prince of Dubai, as deputy chairman.
Mr Alabbar said the planned merger of Emaar with Dubai Properties had been delayed as there was still a lot of work ongoing but that the tie-up would benefit Emaar shareholders in the end.
“Maybe we’re a few weeks late in submitting information. That’s OK,” he told The National in an interview.
The two Government-controlled companies are under pressure to restructure following a contraction in the emirate’s property sector.
A recovery in Dubai’s property market may take 12 to 18 months, Mr Alabbar said. Property prices in Dubai fell by as much as 50 per cent during the crisis, affecting developers such as Emaar. “There is no more supply coming to the market,” he said.
“Prices are coming down at a very reasonable level and the market has to work its inventory out.”
The opening of the world’s tallest tower, Burj Dubai, which has been pushed back from December until January 4, would give good returns to both investors and the city of Dubai, he said.
The tower forms the centrepiece of Emaar’s $20bn Downtown Burj Dubai project, close to Dubai’s main business district.
“If you look at the value the Burj Dubai gives to the city of Dubai and the land we own, it’s an incredible value. It takes the price of land so much higher; it takes property prices so much higher; adds so much value to our hotels and adds so much value to our retail operations.”
Hundreds of business leaders, economists and academics are gathering in the city for the World Economic Forum summit which will conclude on Sunday. Mr Alabbar is co-chair of the Summit on the Global Agenda.
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Source:www.thenational.ae |
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