Nakheel poised to scale back some projects

PROJECTS REVIEW: Nakheel said it would scale back some of its projects in light of the global financial crisis. (ITP Images)

Dubai's state-owned developer Nakheel said on Monday that it would scale back some of its projects because of the global economic slowdown.

In a statement, the developer of the Palm islands and proposer of a one-kilometre high tower, said: "The next few months will see a scaling back of activity around our some of our projects. This will not affect our long term business objectives and is a responsible approach in line with the current global economic conditions.

"We are witnessing a global negative economic movement, and while we believe that the economic fundamentals of Dubai have not changed, we also believe that we have a responsibility to aid this market maintain healthy momentum.

"This involves reassessing our immediate business objectives to accommodate the current economic climate."

The statement comes just days after Dubai private developers Damac and Omniyat announced job cuts amid the financial crisis.

And last week Emaar Properties, the Middle East's largest real-estate developer, said it was reviewing recruitment policies.

Earlier on Monday Nakheel said it was witnessing a slowdown in the rate of real estate sales, but insisted demand in the emirate continued to outpace supply.

"If we look at Nakheel, despite the change in the rate of sales, it is nevertheless continuing to sell at a smaller scale," chairman Sultan bin Sulayem said, according to Arabic daily Al-Khaleej.

"Some think that waiting contributes to the decrease in prices through talk of their being a surplus in the market but reality is totally different... Even if demand stabilises at its current levels and does not increase, supply does not cover except a small part of that."

Projects of Dubai World - holding company of Nakheel and other firms including ports operator DP World - would not be cancelled, bin Sulayem added.

In response to a question from Arabian Business regarding the impact of the global financial crisis on jobs at the company, a spokesperson for Nakheel said: "Given the current global economic climate we are naturally being prudent and looking at the best quality and quantity of resourcing across the entire company.

"This is a responsible approach in line with Nakheel’s business model."

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READERS' COMMENTS

Redundancies are worse that people expect
Posted by Matthew Horgan, Dubai, UAE on Wednesday 3 December 2008 at 13:11 UAE time


Everyone is focussed on redundancies being made by the bigger companies like Damac and Nakheel but in reality their numbers represent a fraction of the impact on the workforce in Dubai. For every Damac / Nakheel employee that has been retrenched there are probably 6 or 7 people from service providor companies - Architects; Engineers; Quantity Surveyors; Project managers; Contractors - that have been terminated due to projects being stopped. There have been many small companies that have had to release 20 people and no one pays any attention to them. If there are 100 small companies that have had to do that then there is 2,000 people out of work that no seems concerned about. The Newspapers do head counts of jobs lost in the market - well you are only looking at the head of the iceberg - the number is far greater and that fact should be respected.

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