By Staff writer
US developer behind $1bn Al Maryah Central mall says banks are becoming more cautious about financing projects
Abu Dhabi banks are reportedly becoming more cautious about financing real estate projects amid concern the property market is slowing, according to a US-based developer.
Ken Himmel, chief executive officer of Ney York's Related Urban, which is part of a joint venture building $1 billion shopping mall in the UAE capital made the comments in an interview with Bloomberg TV.
“Everyone is far more cautious about underwriting anything today. I don’t know how any commercial bank could rationally underwrite another project in Abu Dhabi, given the dynamics of the market, given what’s going on with supply and demand,” he was quoted as saying.
Gulf Related is building a shopping mall that will house the Gulf’s first Macy’s department store and is expected to open in August 2018.
Al Maryah Central will also include Bloomingdale’s, the Toy Store and British upmarket grocer Waitrose. Gulf Related said it has so far leased about 50 percent of the available space in the 2.8 million square feet shopping centre.
Gulf Related secured a $626 million loan from Abu Dhabi Commercial Bank a year ago to help finance the mall, with the rest of the money coming from the two companies and other investors, Bloomberg said.
Last year, Gulf Related signed a AED2.3 billion ($626.29 million) financing deal with Abu Dhabi Commercial Bank to fund the building of the mixed-use retail development.
So is the smart money saying that Supply far outstrips Demand , and in that case what about all those new Real Estate projects popping up on Yas- Reem- Reef 2.. in that case i would state away
Nah, it means that it is ok if you lose your money but the banks are not really interested in joining you.
The guy from the US, Ken Himmel, seems to be focusing on the mixed used / retail projects. After visiting Dalma mall this weekend I'd agree with him, the mall, which is the second largest in AD was pretty empty and there are still quite few vacant retail spaces despite the mall being open over 4 years. The high end gateway mall at Al Mariah island is also very light on potential customers. Paul is right, supply well outstrips demand, you'd have to be brave to invest in AD retail space at the moment.