Nakheel Says It Can Fund Current Projects but Not New Ones

Nakheel Says It Can Fund Current Projects but Not New Ones

Residential News » Residential Real Estate Edition | By Alma Kadragic | December 23, 2008 5:30 PM ET

(DUBAI, UAE) -- As experts question where Dubai's real estate market is going, the CEO of Nakheel, one of the biggest and flashiest developers in the emirate, tried to calm fears at a meeting with reporters today. Chris O'Donnell said that Nakheel has no problem funding current projects but will not start new ones because the company has not made sales in the past two months.

Some of Dubai's most dramatic projects like the Palm Jumeirah and the World artificial island communities were conceived and developed by Nakheel. In the last two months, at Palm Jumeirah, the company has opened the Atlantis Hotel and brought the QE2 to its permanent home.

Nakheel announced last month that it would cut 15 percent of its employees. Today O'Donnell said, "based on what we've done to date and where we see the market going, there's no need for further cuts."

He believes the market will look better next year. "The banking system is starting to free up with the liquidity that has gone into the market, and I think you'll find 2009 we will see a lot more liquidity coming into the market," he said, "so basically we are matching supply and demand, and that is how we are managing our projects."

Some other developers in Dubai have announced reductions or are considering reducing the number of employees and are slowing down new projects. Omniyat Properties has cut 69 jobs, and Damac Holding will eliminate 200 jobs. Even the largest, Emaar Properties, may make job cuts, according to what chairman Mohamed Ali Alabbar said last month.  

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