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Discuss this article (5 Comments)RAK Properties delays projects worth $1.1bn
by This email address is being protected from spam bots, you need Javascript enabled to view it on Tuesday, 21 April 2009
ON HOLD: Projects worth $1.1bn have been postponed in Ras Al Khaimah.
UAE real estate firm Rak Properties has put on hold about 4 billion dirhams ($1.1 billion) worth of projects in Ras al-Khaimah due to the global financial crisis, its chief executive officer has said.
The developer, which said on Sunday first quarter profit fell 39 percent, will now shift its strategy to affordable housing as it waits for the financial situation to improve, Mohamed Sultan al-Qadi said.
Developers in the Gulf Arab trade hub of Dubai, a member of the United Arab Emirates federation, have been delaying and cancelling projects for months as the global financial crisis and a slump in oil prices take their toll on the once-booming construction sector.
Developers and contractors have slashed thousands of jobs in the UAE as years of rapid oil-fuelled growth come to an end.
"We were going to build 11 hotels, but it has been put on hold because of the financial crisis and we're now building one hotel," Qadi said, adding that the value of projects on hold was about 4 billion dirhams.
The developer, the third-largest on the Abu Dhabi bourse, had been working towards creating a real estate portfolio of about 12 billion dirhams, but at present it did not exceed 4 billion dirhams.
Qadi said it had also put on hold expansion into Tanzania and Georgia.
The company's future strategy would be to look at affordable or middle range housing because high-end buildings "are exhausted", Qadi said of his home market.
The firm will raise between $150 million and $200 million in the fourth quarter either by issuing bonds or taking bank loans for developments in Abu Dhabi and Ras al-Khaimah. (Reuters)
READERS' COMMENTS
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Royal Breeze
Posted by Peter, Manama, Bahrain on Wednesday 29 April 2009 at 10:29 UAE time
Which projects are being put on hold and if Royal Breeze is one of them then surely one would assume that all payments are put on hold and interest should be paid on monies already invested. Clarity and openess is needed at this time to ensure investors future confidence.
Posted by Peter, Manama, Bahrain on Wednesday 29 April 2009 at 10:29 UAE time
Which projects are being put on hold and if Royal Breeze is one of them then surely one would assume that all payments are put on hold and interest should be paid on monies already invested. Clarity and openess is needed at this time to ensure investors future confidence.
Royal Breeze, Al Hamra
Posted by Fiona, Dubai on Tuesday 28 April 2009 at 10:31 UAE time
Is there any clarity on which projects have been suspended? I am specifically interested in Royal Breeze golf course town houses in Al Hamra..
Posted by Fiona, Dubai on Tuesday 28 April 2009 at 10:31 UAE time
Is there any clarity on which projects have been suspended? I am specifically interested in Royal Breeze golf course town houses in Al Hamra..
Mina Al Arab
Posted by Paul Bennett, Cork, Eire on Friday 24 April 2009 at 15:12 UAE time
The news of the delays and cut backs to the projects will need to be detailed to all investors.Rak Properties now have a potential situation where the facilities and ambience is going to be effected for all investors whichis not a great situation to have created.Rak Properties will need to address how they are going to deal with investor concerns re reduction in value of their investments and how they are going to compensate them to retain investor confidence which is vital for the region
Posted by Paul Bennett, Cork, Eire on Friday 24 April 2009 at 15:12 UAE time
The news of the delays and cut backs to the projects will need to be detailed to all investors.Rak Properties now have a potential situation where the facilities and ambience is going to be effected for all investors whichis not a great situation to have created.Rak Properties will need to address how they are going to deal with investor concerns re reduction in value of their investments and how they are going to compensate them to retain investor confidence which is vital for the region
Blue Mirage
Posted by Kamran Osman, Birmingham, UK on Tuesday 21 April 2009 at 23:59 UAE time
What will happen to the thousands of investors who have invested money in Ras Al Khaimah? Will they be compensated??
Posted by Kamran Osman, Birmingham, UK on Tuesday 21 April 2009 at 23:59 UAE time
What will happen to the thousands of investors who have invested money in Ras Al Khaimah? Will they be compensated??
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