(DUBAI, U.A.E.) -- During the recent fat years before the worldwide economic slump, Dubai Holding created two property companies, Dubai Properties and Sama Dubai, as well as real estate units in Tatweer, a diversified company that is also part of Dubai Holding. Those property companies are now consolidated into a yet to be named single organization, according to a statement issued yesterday by Dubai Holding.
The combined real estate unit controls what is thought to be one of the largest land banks in the Middle East and North Africa as well as a number of existing projects in Dubai. They include the huge Jumeirah Beach Residence mixed use towers, and the ongoing Business Bay, Culture Village, Lagoons, and Dubai Towers-Dubai developments.
The consolidation of property businesses comes ahead of the October merger of Dubai Holding's property companies with Emaar. Emaar is the largest property developer in the UAE by market capitalization. The combined property company would have assets of $52.8 billion with debt of approximately 7 percent of assets. Emaar's shares have been depressed recently because of uncertainty about the merger as well as the economy of Dubai.
Dubai Holding also announced that its Tecom unit that manages the Media City and Internet City business parks and free trade zones would take over Healthcare City and Industrial City, two independent developments. By consolidating property units, Dubai Holding is looking for cost reductions. However, it is not clear how that will work and whether the new companies will experience economies of scale and other benefits.
Dubai Holding includes the Jumeirah Hospitality Group that owns the Burj Al Arab and Jumeirah Emirates Towers hotels in Dubai and manages luxury properties such as the Carlton Tower and Lowndes hotels in London as well as the sovereign wealth fund Dubai International Capital.