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Thu 30 Jul 2009 02:22 AM

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Emaar Syrian JV pushes on with $1.1bn project

IGO says merger of partner Emaar with fellow UAE firms will not derail Syrian project.

Dubai-based Investment Group Overseas (IGO) said on Wednesday the merger of its partner Emaar Properties with fellow UAE firms will not derail a Syrian development worth about $1.1 billion.Emaar, the Gulf region's second-largest developer by market value, pulled out of Algeria earlier in July citing slow progress in a $20 billion project after announcing in June it planned to tie-up with three property firms by the end of 2009.

Speaking to Reuters on Wednesday, IGO managing partner Anas Kozbari said Emaar-IGO was still aiming to complete the first phase of the Eighth Gate project, which will include the new Damascus Stock Exchange, by April 2010.

"There is no indication of such a process (Emaar pulling out)," Kozbari said. "On the contrary, the merger with Dubai Holding should make them stronger."

The joint venture, in which Emaar is the majority shareholder, launched the project in Damascus in 2006 to provide much-needed commercial, retail and leisure space in the Syrian capital as the government takes steps toward economic liberalisation and boosts foreign investment.

With a lack of other investment vehicles in the country run by a socialist government for decades, people often invest in property, which along with a population growth guarantees demand for new housing units and commercial property.

"The project is on schedule ... the first phase is roughly $200 million," Kozbari said, adding the entire development was valued at about $1.1 billion and would be completed by 2012/13.

Kozbari, who founded IGO with Syrian millionaire Moafaq al-Gaddah in 2004, said the project had so far been financed directly by the shareholders.

Only in the past decade has Syria eased restrictions on foreign exchange and banking and allowed companies to transfer profits abroad. But it remains among the world's hardest places to do business, according to World Economic Forum study.

Courts lack safeguards against political interference and the workforce lacks language skills and training. Yet the risks have not put off investors from the oil-exporting Gulf.

Qatari Diar, the real estate arm of Qatar's sovereign wealth fund, is building a $350 million resort on the Mediterranean coast.

Qatar National Bank launched an IPO this month for its Syrian unit while Albaraka, a banking group based in Bahrain and controlled by Saudi billionaire Sheikh Saleh Kamel, plans to raise a similar amount in an October offering for a new Syrian branch. (Reuters)

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Omar 11 years ago

I can confirm that work is still EXTREMELY slow there. A close friend lives in Yaafour right next to the project who confirmed to me that work is almost IDLE. Maybe will be ready in 2020! I do not like dreams but rather FACTS. I advise Mr. Kozbari whom i know very well to concentrate on something else. Small projects in Syria such as a Guess showroom are much easier to operate in Syria for now and the coming years.