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Sat 3 Jul 2010 02:16 PM

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Dubai's Nakheel to handle property unit Limitless

Move aims at setting united strategies to deal with emirate's property sector.

Dubai's Nakheel to handle property unit Limitless
DOWNTURN WOES: Confidence in Dubais property sector had taken a hit in late 2008 when the global economic crisis triggered a 60 percent plunge in house prices from their peaks.(Getty Images)

A committee overseeing state-owned conglomerate Dubai World, which is in a deal with core lenders to restructure $23.5bn in debt, has handed responsibility of property unit Limitless to Nakheel, Dubai said on Saturday.

"The Higher Committee to oversee Dubai World and its units decided to entrust the board of Nakheel with handling responsibilities of Limitless in a step aimed at setting united strategies and programmes to deal with the real estate sector," the Dubai Media Office said in a statement.

It added that the move would also help take advantage of technical and administrative personnel of Nakheel and Limitless so as to achieve the best result for developers, the construction sector and project investors.

The statement gave no further details on the decision.

Dubai sent global markets into turmoil at the end of last year when Dubai World asked creditors for a standstill on debt mainly linked to its two property firms Limitless World and Nakheel, builder of the Gulf state's eye-catching palm-shaped islands.

Confidence in Dubai's property sector had taken a hit in late 2008 when the global economic crisis triggered a 60 percent plunge in house prices from their peaks.

Hundreds of cranes stood motionless as billions of dollars' worth of projects, including developer Nakheel's planned kilometre-high tower, were put on hold or cancelled.

Nakheel said on Wednesday it had started making cash payments to trade creditors, in the second phase of a repayment schedule, and was restarting several projects put on hold during the downturn.

Limitless, which once attempted to build a 75-kilometre inland waterway called the Arabian Canal, was excluded from Dubai World's restructuring plan, unveiled in March. Limitless has already succeeded in rolling over a $1.2 billion Islamic loan due in March.

Separately, the Dubai government statement said a new board had been appointed for Economic Zones World, a unit of Dubai World that the conglomerate said last year would not be included in restructuring efforts.

"The board will work on developing operations of the company," the statement said, adding that it would "work to support the operations of the company in a manner that will cope with the reality of the regional and global economic situation".

It added that the board, to be headed by Hisham Abdullah al-Shirawi, would also work to help the firm benefit from any opportunities. (Reuters)

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Mark Towers 10 years ago

After the Dhs 4bn Nakheel repayment announced last week and now Limitless being handed over to Nakheel we can only assume that this is good news for those with interests in Nakheel. Nakheel looks like it has been given the green light to move on in a positive manner and these statements over the past week are very positive. I really hope that this time there can be some substance behind the announcements and 'actions' taken that have a positive effect on the ground and not just the board room.

BB 10 years ago

All these things will be good news when Dubai Properties is also cleaned a all levels. Changing the board alone does not mean anything. More professionals are needed at all levels. RERA has to start pushing developers to comply with the laws. DLD has to deal with the challenges too. DM has also a big role to play and it is not only in collecting money via housing fees. It is wake up time before it is too late. Too much time is wasted in none added value discussions and little time is devoted in implementing. Investors will not wait for ever