By Andrew White
'It's great for the sentiment, particularly for investors from overseas coming to Dubai' - MD
The managing director of property research firm CB Richard Ellis said the Dubai World debt deal should assuage uncertainty abroad over the long-term viability of Dubai as an investment destination.
“I was at a property conference in France last week and the primary topic of interest to everybody I spoke to was Dubai World,” Nicholas Maclean told Arabian Business.
“So for Dubai as a whole to have a solution which seems pretty good to me on first reading is great for the sentiment, particularly for investors from overseas coming to Dubai,” he continued.
“There has been some uncertainty about the atmosphere that the Dubai World situation has created and so I think this can go a long way to taking that off the agenda as a discussion item. For investors going forward, I think it’s good news.”
Maclean singled out the section relating to the payment of contractors and consultants, as the most important component of the announcement. In the majority of cases, Dubai World said, full payment will be made.
“For the consultancy world, that’s very important for confidence, especially those [firms] that are looking to do business with government or quasi-government entities,” said Maclean.
Maclean added that Nakheel investors were likely to be buoyed by the announcement, depending on when they made their investment.
“If I were a Nakheel investor my quality of sleep would depend on when I was a buyer,” he said.
“The offer that they can trade effectively the money that they have spent into a Nakheel product for other products, or in due course after five years ask for cash, is interesting and would make me sleep a little more soundly,” he added. “But if I have debt to pay and I can’t get liquidity out of my original investment, that would still be a concern to me.”