By Tom Arnold
EXCLUSIVE: Joint venture developer also halting work on part of flagship Al Raha Beach project.
Aldar Laing O’Rourke, a joint venture between Abu Dhabi’s largest property developer and a UK construction company, is cutting a further 320 jobs, the company revealed on Thursday.
A senior company official told Arabian Business it was also halting work on part of a key development, pending a design review.
The decision follows an announcement from the firm earlier this month that it was shedding more than 200 jobs.
Aldar said it was putting on hold schemes within its Al Raha Beach development in Abu Dhabi including the World Trade Centre, pending a design review, and incorporating more affordable housing within other sites.
The news follows Aldar Properties on Wednesday posting an 84.9 percent fall in fourth-quarter net profit to about 80 million dirhams, due to lower sales in poor market conditions.
Aldar was fully committed to deliver all announced projects such as Al Zeina, Al Muneera, Al Bandar and Al Kuberia within Al Raha Beach, said Sami Asad, chief operating officer of Aldar.
But a decision by the developer to introduce a more measured approach to design and construction, in the light of market conditions, meant it was halting certain aspects of Al Dana, Asad said.
“In today’s market we have to review our strategy to cater for the changes in the market,” he said.
The World Trade Centre would undergo modifications to its design over the next three months, with more office space incorporated into the updated design, Asad said.
The Al Dana Towers development had been suspended pending a review of the architectural design, with the brief extending to both the inside and external aspects of the building.
Work had also stopped on Al Seef, until the completion of a review, expected to include a significant increase of middle income housing.
Asad said falling demand for high-end properties meant it would instead provide more affordable housing within the development.
“We said that we want to be sure that we don’t go to the market until our design is mature, complete and ready and then we can go to the contractor and start building,” he said.
“A year back because of the pressure of the market we had the construction parallel with the design itself. Now we have no obligation to do this. So we said we will finish the design and when it’s ready we will go the contractor and let them do their job, reducing everyone’s risk.”
He said affordable housing was needed to help address the rising demand for middle-income housing in Abu Dhabi.
“Instead of looking at the high-end of the market we needed to look at the affordable houses requirement, as there is a big demand for affordable houses,” he added.
The firm said it had communicated the changes to its consultants in the last few days and was working with them to examine options for workers who would be made redundant.
Aldar, one of UAE's largest developers, said in a statement on Wednesday that full-year profit rose 77.3 percent to 3.44 billion dirhams, compared with 1.94 billion dirhams in 2007.
I thought analyst said Abu Dhabi was immune? I guess the fake analyst will have to go an revise their rating.
Mark my word, you will hear the same thing from the same company as well as others within 4 weeks. There was no sale in AD over the past week. I hope it changes, but it is time to be realistic, AD does not have anything else to offer.
Think this news is abit out of date, there have certainly been more job cuts than this. My heart goes out to all the families affected by this news and hope that, going forward they are dealt fairly and sensitively in this considerate county.
It is sad that such a major developer appears to have adopted this "knee-jerk" reaction without much thought about the knock-on effect it will have on the thousands of people working direct for contractors, consultants, suppliers as well as all of the indirect support industries. They will disappear. What about those people who have purchased property in good faith? Will they be asked to be patient or will they get a full refund? It concerns me that when, eventually, some of these projects are restarted, they will suffer from the loss of the dedicated, enthusiastic and knowledgable engineers and architects who had been involved from the beginning. There is a significant danger that their replacements will be unable to provide the same standards of safety or high quality of work currentlybeing provided. How can ALDAR answer these concerns?
It is a sad news, but it looks like the hidden truth is coming out. So long it was said Abu Dhabi has no crunch. So it is official now. AD is affected by crunch. But the reports like Aldar's second job cuts and project suspensions clearly states the emirate is also affected by the disease. The reasons like design reviews are quite old style excuses. It would have been better if they were honest. AD had lost $125B in outside investment. Why did they had to invest overseas? They could have atleast invested in local infrastructure and other emirates such as ajman and rak. Arabs need to start spending on arabs, only then there is any growth.
All this time, Aldar and Surouh had complained that they could not find workers hence projects are being delayed. Why is this same company then firing people? That clearly shows Abu Dhabi has been affected by crisis but its being hidden. Abu Dhabi is less transparent compared to other states so we dont really realise the happening behind the scene. I have said this long back, no city can be immune, nor is Abu Dhabi.
My friend told me this news 4 days back I vehemently denied Aldar will not do this! But Abu Dhabi too in credit crunch. Any other emirates still?...
Ref. AlDar announcements, â€œInstead of looking at the high-end of the market we needed to look at the affordable houses requirement, as there is a big demand for affordable houses,â€ Asad added. Itâ€™s good to notice that the decision-makers in UAE have just realized that the UAE community is composed of 85~90% of mid-class and poor-class people. Halleluiah, it took 8 years to realize that. This reality should also be redressed in the traffic-fines whereby most truck/taxi drivers are paid ~1000AED per month, and on average a traffic fine is about 25~50% of their monthly salary? Anyway, any abusive application in life gets harshly self-redressed if not properly addressed by itâ€™s maker.