Al Mazaya puts brakes on expansion

CRISIS BITES: Al Mazaya has put a hold on expansion plans due to the financial crisis. (Getty Images)

Kuwait's Al Mazaya Holding said on Sunday it would put any expansion plans on hold and focus on completing existing projects as the global financial crisis bites.

"Mazaya noted that companies adopt expansion plans, on all levels, during economic welfare... but that companies are also more inclined to adopt deflative strategies during recessive times," the firm, which is also listed in Dubai, said in a statement.

"That being said, Al Mazaya sees that the best course of action is to delay expansion plans and to focus on completing current projects."

The developer did not specify which expansion plans were being shelved, but said it was "adopting new strategies concerning its expansion plans to the Gulf and Arab countries, after considering the current situation of the various economic sectors and the distorted movement of the market".

Al Mazaya told newswire Reuters last month that it planned to go ahead with an initial public offering in Qatar in November despite the turmoil in financial markets and would launch $9.5 billion of Dubai projects.

Al Mazaya Qatar, a new unit of the firm, said in August it would launch the IPO as it looks to benefit from a real estate shortage in the world's largest exporter of liquefied natural gas. The firm also set up a Saudi affiliate this year.

It said earlier this year it planned to set up a company in the UAE emirate of Ajman as well as another in Bahrain, to diversify its revenue sources.

A slew of UAE developers have announced delays to expansion plans or slowdowns in existing projects as the global financial crisis brings the country's real estate boom to an end.

Dubai kicked of a regional property boom when it allowed foreign investment in real estate in 2002, and saw years of rapid expansion that drove up inflation, but property prices have fallen in recent weeks, major projects have been scaled back, and jobs are being cut or hiring frozen.

Al Mazaya said it had no loan problems and was close to completing a number of projects including the major Jumeirah Lake Towers project in Dubai, which it said was already sold.

It had also completed work on the 7 Zones project in Kuwait.

"The company has healthy capital, with no loans or financial obligations, and is going onward with developing its current projects, some of which have reached the final phases of development, and will be delivered to owners in a short period of time," the statement quoted Khalid Esbaitah, managing director and CEO as saying. (Reuters)

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