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ETA Star confident of weathering the storm
Dubai-based developer ETA Star said on Monday it was confident of the weathering any looming property downturn in the Gulf.
Speaking to Arabian Business on the opening day of real estate investment exhibition Cityscape, ETA executive director Abid Junaid said barring any meltdown in the world economy, his company would survive the current turmoil because the Dubai market was not too reliant on debt.
"Dubai is fairly insulated from what is happening elsewhere in the world. Although there is a liquidity impact here, there is a shortfall in supply and it is not a debt driven market," Junaid said.
Leveraged investment activity has all but dried up in Europe and the US as firms struggle to borrow money from banks to fund deals.
However, property firms in the Gulf are less highly geared and tend to be more cash-rich because of the wealth generated from region’s vast oil reserves.
Like all firms recently, ETA Star has been forced to cope with spiraling construction costs.
Junaid said construction costs, including cement and labour, had risen 30 percent this year.
However, the price of steel has almost halved in the last three months, dropping from $1500 per tonne in July to around $750 per tonne now, he added.
On Monday ETA unveiled the $540m STARLIVING project, a luxury residential scheme at the Waterfront, Dubai, which is due for completion in 2011, with work starting in the first quarter next year. The tendering process for contractors has not began, Junaid said.
ETA also announced a $1.2bn mixed-use development, in partnership with the Oman Holdings International Group (OHIG), which will feature office, retail and residential space.
Demolition contracts have been awarded for the proposed scheme in Oman and work will begin in the last quarter of the year.
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