Mohamed Alabbar, chairman of Dubai developer Emaar Properties, has accused Nakheel Properties of being “unnecessarily aggressive” during the emirate’s six-year real estate boom.
Speaking to the UK's The Sunday Times, Alabbar singled out state-owned Nakheel, which borrowed more than US$10bn and had to be bailed out by the government, as one of the biggest companies to expand too far and quickly during the boom years.
“They were unnecessarily aggressive. They were too optimistic. And they got burnt,” he told the newspaper.
Nakheel was one of the high-profile corporate casualities during Dubai’s debt crisis, which saw house prices in the emirate decline by over 60 percent. The developer, which built the artificial Palm Jumeirah island, agreed a US$16bn debt restructuring deal in 2011 and was forced to scale back its plans.
The state-owned developer said last month it had paid around AED10bn to trade creditors and contractors since November 2009. Local newspaper The National on Sunday said the firm is currently in talks with lenders to extend a AED8bn (US$2.17bn) loan due in 2015.
Concern over Dubai’s debt burden in light of several announcements for multi-billion-dollar real estate projects, including a AED6bn island development off the coast of Jumeirah Beach Residence, are unfounded, added Alabbar.
“Dubai is more serious. We are optimistic but realistic - older and wiser,” he said. Alabbar also said that the emirate’s debt is manageable: “When you look at the size of the debt and the assets of the city and its revenues, it is do-able to pay this thing over 15 to 20 years”.
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