UAE cancelled $170bn worth construction projects

Cancellations in UAE relate predominantly to real estate, Citi's latest report reveals
UAE cancelled $170bn worth construction projects
Saudia Arabia accounted for the biggest share of new ventures, launching $3.5bn worth of construction and power projects
By Reuters
Tue 13 Sep 2011 11:14 AM

The amount of construction projects cancelled and delayed in the United Arab Emirates rose to $170bn in August, Citigroup said in a report, signalling the battered sector in the Gulf state is still away from a recovery.

UAE accounts for 56 percent of the total cancelled and delayed projects for the main regional markets, the MENA construction projects tracker report by Citi showed. The cancellations are an increase of 13 percent since July.

"Unsurprisingly cancellations in the UAE relate predominantly to real estate," the report said.

UAE's property boom ended in 2008, with home prices in the Dubai emirate plunging by about 60 percent, forcing many developers to abandon projects.

Dubai developer Nakheel , which overstretched itself by building islands in the shape of palms and other ambitious projects, wrote off up to AED78.6bn ($21.4bn) of its real estate assets due to a property crisis, according to a bond prospectus.

Meanwhile, projects cancelled and on hold across main MENA markets dropped slightly to $1.69 trillion in August from $1.7 trillion in July.

In other markets, Saudi Arabia added $81bn of preliminary projects to its pipeline since July, said the report, highlighting the growth potential in the market.

Kuwait and Qatar also have projects worth $20bn and $2bn respectively that are in preliminary stages of construction. In contrast, UAE showed a $12bn decline in preliminary projects to $118bn.

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