Dubai Holding receives 30% stake in Festival City

Dubai Holding Commercial Operations Group, a diversified company owned by Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum, received a 30 percent stake in family owned retail company Dubai Festival City last year.

“The grant was recorded as an investment in an associate and valued at 5.55 billion dirhams ($1.51 billion)," Dubai Holding said in the notes to its 2008 financial statement posted on the Nasdaq Dubai website. It didn’t provide further details.

Dubai Festival City, owned by the Al-Futtaim group, includes a shopping mall, hotels, offices and homes along Dubai’s creek. Al-Futtaim group includes more than 60 companies in the automobile, retail and the real-estate industries.

The fair market value of Dubai Festival City “declined significantly since acquisition” and its “carrying value” was 3.45 billion dirhams at the end of December, the report said. Property prices in Dubai, the Middle East trade and tourism hub, have fallen 49 percent from their peak a year ago, Jones Lang LaSalle said in a report on Aug. 16.

Dubai Festival City had assets of 4.44 billion dirhams and liabilities of 3.29 billion dirhams at the end of December, according to Dubai Holding’s annual report. It posted a loss of 82.7 million dirhams in 2008 on revenue of 952.6 million dirhams, it said.

No official from Dubai Holding or its public relations company was immediately available to respond to questions, while a spokesman for the Al-Futtaim group declined to comment.

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